What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-05 compared with 2020-11-05 · 925 added, 982 removed, 1423 unchanged (57% of the section changed)

Financial Statements

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except share amounts)

September 30,

March 31, 2021

Investments at fair value:

28 unchanged sentences

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

1 unchanged sentence

Three months ended

Nine months ended

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

March 31, 2021

March 31, 2020

INVESTMENT INCOME:

14 unchanged sentences

Net investment income

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS AND DEBT:

Net realized gain (loss) on investments and cash equivalents:

Companies less than 5% owned

Companies more than 25% owned

Net realized loss on investments and cash equivalents

Net change in unrealized gain (loss) on investments and cash equivalents and net change in

unrealized (gain) loss on debt:

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS, DEBT AND UNFUNDED

Net realized gain (loss) on investments and cash equivalents (companies less than 5%

Net change in unrealized gain (loss) on investments, cash equivalents and unfunded commitments and

net change in unrealized (gain) loss on debt:

Companies less than 5% owned

Companies more than 25% owned

Net change in unrealized gain (loss) on investments, cash equivalents and debt

Net realized and unrealized gain (loss) on investments, cash equivalents and debt

Unfunded commitments

Net change in unrealized gain (loss) on investments, cash equivalents, debt and unfunded

Net realized and unrealized gain (loss) on investments, cash equivalents, debt and unfunded

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

1 unchanged sentence

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS (unaudited)

1 unchanged sentence

Three months ended

Nine months ended

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Increase in net assets resulting from operations:

March 31, 2021

March 31, 2020

Increase (decrease) in net assets resulting from operations:

Net investment income

Net realized loss

Net realized gain (loss)

Net change in unrealized gain (loss)

10 unchanged sentences

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

(in thousands)

Nine months ended

September 30,

Three months ended

March 31, 2021

March 31, 2020

Cash Flows from Operating Activities:

2 unchanged sentences

cash provided by (used in) operating activities:

Net realized loss on investments and cash equivalents

Net realized (gain) loss on investments and cash equivalents

Net change in unrealized (gain) loss on investments

11 unchanged sentences

Dividends receivable

Other receivables

Prepaid expenses and other assets

19 unchanged sentences

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited)

September 30, 2020

(in thousands, except share/unit amounts)

March 31, 2021

thousands, except share/unit amounts)

Senior Secured Loans 98.1%

10 unchanged sentences

Aerospace & Defense

AviatorCap SII, LLC (2)

Aerospace & Defense

Enhanced Capital Group, LLC

Basic Fun, Inc.

Specialty Retail

Enhanced Permanent Capital, LLC(3)

Capital Markets

Foundation Consumer Brands, LLC

Personal Products

High Street Insurance Partners, Inc.

Kingsbridge Holdings, LLC(2)

17 unchanged sentences

Sentry Data Systems, Inc.

Soleo Health Holdings, Inc

Health Care Providers & Services

Smile Doctors LLC

Personal Products

The Childrens Place, Inc.(3)

Specialty Retail

USR Parent, Inc.

8 unchanged sentences

Second Lien Bank Debt/Senior Secured Loans

Bishop Lifting Products, Inc.

Trading Companies & Distributors

PhyMed Management LLC

10 unchanged sentences

Pharmaceuticals

aTyr Pharma, Inc.

Pharmaceuticals

Axcella Health Inc.

Pharmaceuticals

Cardiva Medical, Inc.

Health Care Equipment & Supplies

Centrexion Therapeutics, Inc.

20 unchanged sentences

Health Care Equipment & Supplies

SOC Telemed, Inc.

Health Care Providers & Services

Total First Lien Life Science Senior Secured Loans

1 unchanged sentence

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

September 30, 2020

(in thousands, except share/unit amounts)

March 31, 2021

thousands, except share/unit amounts)

Interest Rate (1)

Equipment Financing 33.4%

Aero Operating LLC (10)

Commercial Services & Supplies

3/1/2025-4/1/2025

AmeraMex International, Inc.

5 unchanged sentences

Metals & Mining

7/1/2024-4/1/2025

C&H Paving, Inc.

2 unchanged sentences

Capital City Jet Center, Inc.

10/4/2023-6/22/26

Central Freight Lines, Inc.

Champion Air, LLC (10)

Dongwon Autopart Technology Inc.

Auto Components

Easton Sales and Rentals, LLC (10)

Commercial Services & Supplies

EasyPak, LLC (10)

Containers & Packaging

Environmental Protection & Improvement Company, LLC (10)

25 unchanged sentences

Kool Pak, LLC (14)

Lineal Industries, Inc.

Construction & Engineering

Loyer Capital LLC (2)(12)

1 unchanged sentence

5/16/24-9/25/24

Meridian Consulting I Corp, Inc.

Hotels, Restaurants & Leisure

Mountain Air Helicopters, Inc.

1 unchanged sentence

4/30/2022-2/28/2025

NEF Holdings, LLC (2)

Multi-Sector Holdings

Rane Light Metal Castings Inc.

8 unchanged sentences

Diversified Consumer Services

8/1/2022-10/1/2022

SLR Equipment Finance (2)

Multi-Sector Holdings

South Texas Oilfield Solutions, LLC (14)

1 unchanged sentence

9/1/2022-7/1/2023

Southwest Traders, Inc.

ST Coaches, LLC (14)

8 unchanged sentences

Superior Transportation, Inc.

4/1/2022-8/1/2024

Tailwinds, LLC (10)

Air Freight & Logistics

8/1/2024-10/16/2025

The Smedley Company & Smedley Services, Inc.

2 unchanged sentences

Thora Capital, LLC (10)

Tornado Bus Company (14)

Trinity Equipment Rentals, Inc.

Commercial Services & Supplies

Trolleys, Inc.

6 unchanged sentences

Diversified Consumer Services

8/1/2024-10/5/25

Womble Company, Inc.

Energy Equipment & Services

NEF Holdings, LLC Equity Interests (2)(9)

SLR Equipment Finance Equity Interests (2)(9)

Multi-Sector Holdings

7 unchanged sentences

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

September 30, 2020

(in thousands, except share/unit amounts)

March 31, 2021

thousands, except share/unit amounts)

Common Equity/Equity Interests/Warrants51.7%

1 unchanged sentence

Pharmaceuticals

B Riley Financial Inc.

Research & Consulting Services

CardioFocus, Inc.

4 unchanged sentences

Health Care Equipment & Supplies

Crystal Financial LLC (2)(3)

Diversified Financial Services

Delphinus Medical Technologies, Inc.

2 unchanged sentences

Health Care Technology

KBH Topco LLC (Kingsbridge) (2)(5)

Multi-Sector Holdings

PQ Bypass, Inc.

13 unchanged sentences

Health Care Equipment & Supplies

Sunesis Pharmaceuticals, Inc.

Pharmaceuticals

SLR Credit Solutions (2)(3)

Diversified Financial Services

Venus Concept Ltd.

Warrants* (fka Restoration Robotics)

Warrants* (f/k/a Restoration Robotics)

Health Care Equipment & Supplies

1 unchanged sentence

Total Investments (6) 183.9%

Maturity Date

Cash Equivalents 40.9%

3 unchanged sentences

Net Assets 100.0%

Floating rate debt investments typically bear interest at a rate determined by reference to the London Interbank

Offered Rate (LIBOR), and which typically reset monthly, quarterly or semi-annually.

Floating rate debt investments typically bear interest at a rate determined by reference to the London

Interbank Offered Rate (LIBOR), and which typically reset monthly, quarterly or semi-annually.

For each debt investment we have provided the current rate of interest, or in the case of leases the current implied yield, in effect as of

September 30, 2020.

March 31, 2021.

Denotes investments in which we are deemed to exercise a controlling influence over the management or policies

of a company, as defined in the Investment Company Act of 1940 (1940 Act), due to beneficially owning, either directly or through one or more controlled companies, more than 25% of the outstanding voting securities of the investment.

Transactions during the nine months ended September 30, 2020 in these controlled investments are as follows:

Transactions during the three months ended March 31, 2021 in these controlled investments are as follows:

Name of Issuer

Fair Value at

December 31, 2020

Interest/Dividend

Fair Value at

September 30,

AviatorCap SII, LLC

March 31, 2021

AviatorCap SII, LLC

Crystal Financial LLC

Equipment Operating Leases, LLC

Kingsbridge Holdings, LLC

KBH Topco, LLC (Kingsbridge)

Loyer Capital LLC

NEF Holdings, LLC (equity)

NEF Holdings, LLC (debt)

RD Holdco Inc.

5 unchanged sentences

Rug Doctor LLC

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR Credit Solutions

SLR Equipment Finance (equity)

SLR Equipment Finance (debt)

See notes to consolidated

financial statements.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

September 30, 2020

(in thousands)

March 31, 2021

Indicates assets that the Company believes may not represent qualifying assets under

2 unchanged sentences

follow-on investments in existing portfolio companies or could be required to dispose of investments at inappropriate times in order to comply with the 1940 Act.

As of September 30, 2020, on a fair value

As of March 31, 2021, on a fair value

basis, non-qualifying assets in the portfolio represented 28.3% of the total assets of the Company.

Solar Capital Ltd.s investments in SOAGG, LLC and SOINT, LLC include a two and one dollar investment in

common shares, respectively.

Bishop Lifting Products, Inc., SEI Holding I Corporation, Singer Equities, Inc.

& Hampton Rubber Company

are co-borrowers.

Aggregate net unrealized depreciation for U.S.

The Companys investments in SOAGG, LLC and SOINT, LLC include a two and one dollar investment in common

shares, respectively.

Kingsbridge Holdings, LLC is held through KBH Topco LLC, a Delaware corporation.

Aggregate net unrealized appreciation for U.S.

federal income tax purposes is $10,855;

11 unchanged sentences

Denotes a Level 1 investment.

NEF Holdings, LLC is held through NEFCORP LLC, a wholly-owned consolidated taxable subsidiary and NEFPASS LLC,

a wholly-owned consolidated subsidiary.

Indicates an investment that is wholly held by Solar Capital Ltd.

through NEFPASS LLC.

SLR Equipment Finance is held through NEFCORP LLC, a wholly-owned consolidated taxable subsidiary and NEFPASS

LLC, a wholly-owned consolidated subsidiary.

Indicates an investment that is wholly held by the Company through NEFPASS LLC.

Interest is paid in kind (PIK).

Denotes a subsidiary of NEF Holdings, LLC.

Denotes a subsidiary of SLR Equipment Finance.

OmniGuide Holdings, Inc., Domain Surgical, Inc.

9 unchanged sentences

are co-borrowers.

Spread is 2.50% Cash / 9.50% PIK.

Spread is 5.50% Cash / 1.00% PIK.

Non-income producing security.

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

September 30, 2020

(in thousands)

March 31, 2021

Industry Classification

1 unchanged sentence

Investments (at fair value) as

of September 30, 2020

Diversified Financial Services (includes Crystal Financial LLC)

Multi-Sector Holdings (includes NEF Holdings, LLC, Equipment Operating Leases, LLC and Loyer

of March 31, 2021

Multi-Sector Holdings (includes Kingsbridge Holdings, LLC, SLR Equipment Finance, Equipment

Operating Leases, LLC and Loyer Capital LLC)

Diversified Financial Services (includes SLR Credit Solutions)

Health Care Providers & Services

2 unchanged sentences

Commercial Services & Supplies

Specialty Retail

Personal Products

Wireless Telecommunication Services

Communications Equipment

Specialty Retail

Trading Companies & Distributors

Capital Markets

2 unchanged sentences

Aerospace & Defense

Energy Equipment & Services

Oil, Gas & Consumable Fuels

Metals & Mining

Construction & Engineering

Hotels, Restaurants & Leisure

Energy Equipment & Services

Oil, Gas & Consumable Fuels

Auto Components

Air Freight & Logistics

Research & Consulting Services

Containers & Packaging

Health Care Technology

1 unchanged sentence

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS

DECEMBER 31, 2020

(in thousands, except share/unit amounts)

(in thousands)

Senior Secured Loans 93.7%

Bank Debt/Senior Secured Loans

First Lien Bank Debt/Senior Secured Loans

Aegis Toxicology Sciences Corporation

2 unchanged sentences

Health Care Providers & Services

Altern Marketing, LLC

Household & Personal Products

American Teleconferencing Services, Ltd.

4 unchanged sentences

Aerospace & Defense

AviatorCap SII, LLC (2)

Aerospace & Defense

Bishop Lifting Products, Inc.

Trading Companies & Distributors

Enhanced Capital Group, LLC

Basic Fun, Inc

Specialty Retail

Enhanced Permanent Capital, LLC(3)

Capital Markets

Falmouth Group Holdings Corp.

Greystone Select Holdings LLC & Greystone & Co., Inc.

Thrifts & Mortgage Finance

IHS Intermediate, Inc.**

Health Care Providers & Services

Kingsbridge Holdings, LLC(2)

2 unchanged sentences

Wireless Telecommunication Services

Legility, LLC

Commercial Services & Supplies

Logix Holding Company, LLC

Communications Equipment

MRI Software LLC

On Location Events, LLC & PrimeSport Holdings Inc

One Touch Direct, LLC

Commercial Services & Supplies

Pet Holdings ULC & Pet Supermarket, Inc.

Specialty Retail

PhyMed Management LLC

Health Care Providers & Services

PhyNet Dermatology LLC

Health Care Providers & Services

Pinnacle Treatment Centers, Inc.

Health Care Providers & Services

PPT Management Holdings, LLC

Health Care Providers & Services

PSKW, LLC & PDR, LLC

Sentry Data Systems, Inc

Smile Doctors LLC

Personal Products

Soleo Health Holdings, Inc

Health Care Providers & Services

PSKW, LLC & PDR, LLC

The Childrens Place, Inc.(3)

Specialty Retail

USR Parent, Inc.

Specialty Retail

Total First Lien Bank Debt/Senior Secured Loans

Second Lien Asset-Based Senior Secured Loans

Greystone Select Holdings LLC & Greystone & Co., Inc.

Thrifts & Mortgage Finance

Varilease Finance, Inc.

Multi-Sector Holdings

Total Second Lien Asset-Based Senior Secured Loans

Second Lien Bank Debt/Senior Secured Loans

PhyMed Management LLC

Health Care Providers & Services

RS Energy Group U.S., Inc

Rug Doctor LLC (2)

Diversified Consumer Services

Solara Medical Supplies, Inc

Health Care Providers & Services

The Octave Music Group, Inc.

(fka TouchTunes)

Varilease Finance, Inc.

Multi-Sector Holdings

Total Bank Debt/Senior Secured Loans

Life Science Senior Secured Loans

Total Second Lien Bank Debt/Senior Secured Loans

First Lien Life Science Senior Secured Loans

Alimera Sciences, Inc.

4 unchanged sentences

Pharmaceuticals

aTyr Pharma, Inc.

Pharmaceuticals

Axcella Health Inc.

12 unchanged sentences

Pharmaceuticals

Neuronetics, Inc.

Health Care Equipment & Supplies

OmniGuide Holdings, Inc.

6 unchanged sentences

Pharmaceuticals

Senseonics Holdings, Inc

SI-BONE, Inc.

Health Care Equipment & Supplies

Total Life Science Senior Secured Loans

Total First Lien Life Science Senior Secured Loans

Total Senior Secured Loans

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2019

(in thousands, except share/unit amounts)

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

March 31, 2020

thousands, except share/unit amounts)

Interest Rate (1)

Equipment Financing 33.4%

Althoff Crane Service, Inc.

Commercial Services & Supplies

AmeraMex International, Inc.

3 unchanged sentences

3/1/2022-11/1/2022

Boart Longyear Company (14)

Metals & Mining

C&H Paving, Inc.

2 unchanged sentences

Capital City Jet Center, Inc.

10/4/2023-6/22/26

Central Freight Lines, Inc.

2 unchanged sentences

Commercial Services & Supplies

Environmental Protection & Improvement Company, LLC (10)

Equipment Operating Leases, LLC (2)(12)

1 unchanged sentence

8/1/2022-4/27/2025

EquipmentShare.com, Inc.

Commercial Services & Supplies

Family First Freight, LLC (10)

10 unchanged sentences

7/1/2022-7/1/2024

Hawkeye Contracting Company, LLC (10)(11)

Oil, Gas & Consumable Fuels

HTI Logistics Corporation (10)

12 unchanged sentences

5/16/24-9/25/24

Meridian Consulting I Corp, Inc.

Hotels, Restaurants & Leisure

Mountain Air Helicopters, Inc.

Commercial Services & Supplies

4/30/2022-2/28/2025

NEF Holdings, LLC (2)

Multi-Sector Holdings

Rane Light Metal Castings Inc.

Commercial Services & Supplies

7 unchanged sentences

Diversified Consumer Services

8/1/2022-10/1/2022

South Texas Oilfield Solutions, LLC (14)

1 unchanged sentence

9/1/2022-7/1/2023

Southern Nevada Oral & Maxillofacial Surgery, LLC (10)

Health Care Providers & Services

Southwest Traders, Inc.

Spartan Education, LLC (10)

Diversified Consumer Services

7/31/2020-12/27/2023

ST Coaches, LLC (14)

7 unchanged sentences

Sun-Tech Leasing of Texas, L.P.

6/25/2020-7/25/2021

Superior Transportation, Inc.

2 unchanged sentences

Air Freight & Logistics

8/1/2024-10/16/2025

The Smedley Company & Smedley Services, Inc.

2 unchanged sentences

Thora Capital, LLC (10)

Tornado Bus Company (14)

Trinity Equipment Rentals, Inc.

8 unchanged sentences

Diversified Consumer Services

8/1/2024-10/5/25

Womble Company, Inc.

Energy Equipment & Services

W.P.M., Inc., WPM-Southern, LLC, WPM Construction Services, Inc.(10)

Construction & Engineering

NEF Holdings, LLC Equity Interests (2)(9)

8 unchanged sentences

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2020

(in thousands, except share/unit amounts)

thousands, except share/unit amounts)

Common Equity/Equity Interests/Warrants51.9%

2 unchanged sentences

B Riley Financial Inc.

Research & Consulting Services

CardioFocus, Inc.

Health Care Equipment & Supplies

Centrexion Therapeutics, Inc.

1 unchanged sentence

Conventus Orthopaedics, Inc.

Health Care Equipment & Supplies

Crystal Financial LLC (2)(3)

Diversified Financial Services

Delphinus Medical Technologies, Inc.

Health Care Equipment & Supplies

Essence Group Holdings Corporation (Lumeris) Warrants *

Health Care Technology

KBH Topco LLC (Kingsbridge) (2)(5)

Multi-Sector Holdings

PQ Bypass, Inc.

Health Care Equipment & Supplies

RD Holdco Inc.

(Rug Doctor) (2)*

Diversified Consumer Services

RD Holdco Inc.

(Rug Doctor) Class B (2)*

Diversified Consumer Services

RD Holdco Inc.

(Rug Doctor) Warrants (2)*

Diversified Consumer Services

Scynexis, Inc.

1 unchanged sentence

Senseonics Holdings, Inc.

Health Care Equipment & Supplies

Sunesis Pharmaceuticals, Inc.

Pharmaceuticals

Tetraphase Pharmaceuticals, Inc.

Warrants (3)*

Pharmaceuticals

Venus Concept Ltd.

Warrants* (fka Restoration Robotics)

Warrants* (f/k/a Restoration Robotics)

Health Care Equipment & Supplies

Total Common Equity/Equity Interests/Warrants

14 unchanged sentences

Fair Value at

December 31, 2019

Interest/Dividend

/Other Income

Fair Value at

Ark Real Estate Partners LP

Ark Real Estate Partners II LP

December 31, 2020

AviatorCap SII, LLC

2 unchanged sentences

Equipment Operating Leases, LLC

Kingsbridge Holdings, LLC (debt)

Kingsbridge Holdings, LLC (equity)

Loyer Capital LLC

NEF Holdings, LLC

NEF Holdings, LLC (equity)

NEF Holdings, LLC (debt)

RD Holdco Inc.

5 unchanged sentences

Rug Doctor LLC

SOINT, LLC (preferred equity)

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

See notes to consolidated

financial statements.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2020

(in thousands)

Indicates assets that the Company believes may not represent qualifying assets under

4 unchanged sentences

basis, non-qualifying assets in the portfolio represented 25.9% of the total assets of the Company.

Solar Capital Ltd.s investments in SOAGG, LLC and SOINT, LLC include a two and one dollar investment in

common shares, respectively.

Bishop Lifting Products, Inc., SEI Holding I Corporation, Singer Equities, Inc.

& Hampton Rubber Company

are co-borrowers.

The Companys investments in SOAGG, LLC and SOINT, LLC include a two and one dollar investment in common

shares, respectively.

Kingsbridge Holdings, LLC is held through KBH Topco LLC, a Delaware corporation.

Aggregate net unrealized appreciation for U.S.

14 unchanged sentences

a wholly-owned consolidated subsidiary.

Indicates an investment that is wholly held by Solar Capital Ltd.

through NEFPASS LLC.

Hawkeye Contracting Company, LLC, Eagle Creek Mining, LLC & Falcon Ridge Leasing, LLC are co-borrowers.

Indicates an investment that is wholly held by the Company through NEFPASS LLC.

Interest is paid in kind (PIK).

Denotes a subsidiary of NEF Holdings, LLC.

10 unchanged sentences

are co-borrowers.

Spread is 2.50% Cash / 8.50% PIK.

Non-income producing security.

Investment is on non-accrual status.

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

See notes to consolidated

financial statements.

SLR INVESTMENT CORP.

CONSOLIDATED SCHEDULE OF INVESTMENTS (continued)

December 31, 2019

(in thousands)

Deember 31, 2020

Industry Classification

2 unchanged sentences

of December 31, 2020

Multi-Sector Holdings (includes Kingsbridge Holdings, LLC, NEF Holdings, LLC, Equipment Operating

Leases, LLC and Loyer Capital LLC)

Diversified Financial Services (includes Crystal Financial LLC)

Multi-Sector Holdings (includes NEF Holdings, LLC, Equipment Operating Leases, LLC and Loyer

Health Care Providers & Services

2 unchanged sentences

Commercial Services & Supplies

Specialty Retail

Wireless Telecommunication Services

Communications Equipment

Thrifts & Mortgage Finance

Diversified Consumer Services

Specialty Retail

Household & Personal Products

Trading Companies & Distributors

Capital Markets

Thrifts & Mortgage Finance

Aerospace & Defense

Oil, Gas & Consumable Fuels

Construction & Engineering

Energy Equipment & Services

Hotels, Restaurants & Leisure

Metals & Mining

Construction & Engineering

Oil, Gas & Consumable Fuels

Personal Products

Air Freight & Logistics

2 unchanged sentences

Total Investments

See notes to consolidated financial statements.

SOLAR CAPITAL LTD.

See notes to consolidated

financial statements.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

Solar Capital LLC, a Maryland limited liability company, was formed in February 2007 and commenced operations on March 13, 2007 with

1 unchanged sentence

Immediately prior to our initial public offering, through

a series of transactions, Solar Capital Ltd.

merged with Solar Capital LLC, leaving Solar Capital Ltd.

as the surviving entity (the Merger).

Solar Capital Ltd.

issued an aggregate of approximately 26.65 million shares of common

stock and $125,000 in senior unsecured notes to the existing Solar Capital LLC unit holders in connection with the Merger.

Solar Capital Ltd.

had no assets or operations prior to completion of the Merger and as a result, the historical books and

records of Solar Capital LLC have become the books and records of the surviving entity.

The number of shares used to calculate weighted average shares for use in computations on a per share basis have been decreased retroactively by a factor of

approximately 0.4022 for all periods prior to February 9, 2010.

This factor represents the effective impact of the reduction in shares resulting from the Merger.

Solar Capital Ltd.

(Solar Capital, the Company, we, us or our), a Maryland

corporation formed in November 2007, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business

development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act).

Furthermore, as the Company is an investment company, it continues to apply the guidance in FASB Accounting Standards Codification

(ASC) Topic 946.

In addition, for U.S.

federal income tax purposes, the Company has elected to be treated, and intend to qualify annually, as a regulated investment company (RIC) under Subchapter M of the Internal Revenue

Code of 1986, as amended (the Code).

On February 9, 2010, Solar Capital priced its initial public offering, selling

5.68 million shares of common stock, including the underwriters over-allotment, at a price of $18.50 per share.

Concurrent with this offering, the Companys senior management purchased an additional 600,000 shares through a private

placement, also at $18.50 per share.

The Companys investment objective is to maximize both current income and capital appreciation

through debt and equity investments.

The Company directly and indirectly invests primarily in leveraged middle market companies in the form of senior secured loans, stretch-senior loans, financing leases and to a lesser extent, unsecured loans and

equity securities.

From time to time, we may also invest in public companies that are thinly traded.

a series of transactions, SLR Investment Corp.

(f/k/a Solar Capital Ltd.) (the Company, we, us or our), merged with Solar Capital LLC, leaving SLR Investment Corp.

as the surviving entity (the

SLR Investment Corp.

issued an aggregate of approximately 26.65 million shares of common stock and $125,000 in senior unsecured notes to the existing Solar Capital LLC unit holders in connection with the Merger.

Investment Corp.

had no assets or operations prior to completion of the Merger and as a result, the historical books and records of Solar Capital LLC have become the books and records of the surviving entity.

The number of shares used to calculate

weighted average shares for use in computations on a per share basis have been decreased retroactively by a factor of approximately 0.4022 for all periods prior to February 9, 2010.

This factor represents the effective impact of the reduction

in shares resulting from the Merger.

SLR Investment Corp., a Maryland corporation formed in November 2007, is a closed-end, externally managed, non-diversified management investment company that has elected to be regulated as a business development company (BDC) under the

Investment Company Act of 1940, as amended (the 1940 Act).

Furthermore, as the Company is an investment company, it continues to apply the guidance in FASB Accounting Standards Codification (ASC) Topic 946.

In addition, for

federal income tax purposes, the Company has elected to be treated, and intend to qualify annually, as a regulated investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

On February 9, 2010, the Company priced its initial public offering, selling 5.68 million shares of common stock, including the

underwriters over-allotment, at a price of $18.50 per share.

Concurrent with this offering, the Companys senior management purchased an additional 600,000 shares through a private placement, also at $18.50 per share.

The Companys investment objective is to maximize both current income and capital appreciation through debt and equity investments.

Company directly and indirectly invests primarily in leveraged middle market companies in the form of senior secured loans, stretch-senior loans, financing leases and to a lesser extent, unsecured loans and equity securities.

From time to time, we

may also invest in public companies that are thinly traded.

Significant Accounting Policies

17 unchanged sentences

financial statements, have been included.

SOLAR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

The significant accounting policies consistently followed by the Company are:

Investment transactions are accounted for on the trade date;

(a) Investment

transactions are accounted for on the trade date;

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

March 31, 2021

thousands, except share amounts)

Under procedures established by our board of directors (the Board), we value investments, including

8 unchanged sentences

Debt investments with maturities of 60 days or less shall each be valued at cost plus accreted discount, or minus

amortized premium, which is expected to approximate fair value, unless such valuation, in the judgment of Solar Capital Partners, LLC (the Investment Adviser), does not represent fair value, in which case such investments shall be valued

at fair value as determined in good faith by or under the direction of our Board.

Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as determined in good faith by or under the

direction of our Board.

amortized premium, which is expected to approximate fair value, unless such valuation, in the judgment of SLR Capital Partners, LLC (f/k/a Solar Capital Partners, LLC) (the Investment Adviser), does not represent fair value, in which

case such investments shall be valued at fair value as determined in good faith by or under the direction of our Board.

Investments that are not publicly traded or whose market quotations are not readily available are valued at fair value as

determined in good faith by or under the direction of our Board.

Such determination of fair values involves subjective judgments and estimates.

With respect to

investments for which market quotations are not readily available or when such market quotations are deemed not to represent fair value, our Board has approved a multi-step valuation process each quarter, as described below:

With respect to investments for which market quotations are not readily available or when such market quotations are deemed not to represent

fair value, our Board has approved a multi-step valuation process each quarter, as described below:

our quarterly valuation process begins with each portfolio company or investment being initially valued by the

21 unchanged sentences

input in the valuation process.

For the nine months ended September 30, 2020, there has been no change to the Companys valuation approaches or techniques and the nature of the related inputs considered in the valuation process.

SOLAR CAPITAL LTD.

For the three months ended March 31, 2021, there has been no change to the Companys valuation approaches or techniques and the nature of the related inputs considered in the valuation process.

ASC Topic 820 classifies the inputs used to measure these fair values into the following hierarchy:

Unadjusted quoted prices in active markets for identical assets or liabilities, accessible by the Company

at the measurement date.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

ASC Topic 820 classifies the inputs used to measure these fair values into the following

Quoted prices in active markets for identical assets or liabilities, accessible by the

Company at the measurement date.

Quoted prices for similar assets or liabilities in active markets, or

quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

March 31, 2021

thousands, except share amounts)

Quoted prices for similar assets or liabilities in active

markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Unobservable inputs for the asset or liability.

48 unchanged sentences

The straight-line method may be used on revolving facilities and/or when it approximates the effective yield method.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

The Company may enter into forward exchange contracts in order to hedge against foreign currency risk.

16 unchanged sentences

Recent Accounting Pronouncements

2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement.

The amendments in ASU 2018-13 modify and eliminate certain disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement.

ASU 2018-13 is effective for all entities for

fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted.

The Company has adopted ASU 2018-13 and determined that the adoption has not

had a material impact on its consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and

other transactions affected by reference rate reform if certain criteria are met.

ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

The Company is currently

evaluating the impact of adopting ASU 2020-04 on its consolidated financial statements and disclosures.

SOLAR CAPITAL LTD.

In March 2020, the FASB issued Accounting Standards Update No.

2020-04, Reference Rate

Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other

transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued because of the reference rate reform.

ASU 2020-04 is effective for all entities as

of March 12, 2020 through December 31, 2022.

The Company is evaluating the potential impact that the adoption of this guidance will have on the Companys financial statements.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

Solar Capital

has an Advisory Agreement with the Investment Adviser, under which the Investment Adviser will manage the day-to-day operations of, and provide investment advisory

services to, Solar Capital.

For providing these services, the Investment Adviser receives a fee from Solar Capital, consisting of two componentsa base management fee and a performance-based incentive fee.

The base management fee is determined

by taking the average value of Solar Capitals gross assets at the end of the two most recently completed calendar quarters calculated at an annual rate of 1.75% on gross assets up to 200% of the Companys total net assets as of the

immediately preceding quarter end and 1.00% on gross assets that exceed 200% of the Companys total net assets as of the immediately preceding quarter end.

For purposes of computing the base management fee, gross assets exclude temporary assets

acquired at the end of each fiscal quarter for purposes of preserving investment flexibility in the next fiscal quarter.

March 31, 2021

thousands, except share amounts)

The Company has an Advisory Agreement with the Investment Adviser, under which the Investment Adviser will manage the day-to-day operations of, and provide investment advisory services to the Company.

For providing these services, the Investment Adviser receives a fee from the Company,

consisting of two componentsa base management fee and a performance-based incentive fee.

The base management fee is determined by taking the average value of the Companys gross assets at the end of the two most recently completed

calendar quarters calculated at an annual rate of 1.75% on gross assets up to 200% of the Companys total net assets as of the immediately preceding quarter end and 1.00% on gross assets that exceed 200% of the Companys total net assets

as of the immediately preceding quarter end.

For purposes of computing the base management fee, gross assets exclude temporary assets acquired at the end of each fiscal quarter for purposes of preserving investment flexibility in the next fiscal

Temporary assets include, but are not limited to, U.S.

treasury bills, other short-term U.S.

government or government agency

securities, repurchase agreements or cash borrowings.

government or government agency securities, repurchase agreements or cash borrowings.

The performance-based incentive fee has two parts, as follows:

calculated and payable quarterly in arrears based on Solar Capitals pre-incentive fee net investment income for the immediately preceding calendar quarter.

For this purpose, pre-incentive fee net investment income means interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination,

structuring, diligence and consulting fees or other fees that we receive from portfolio companies) accrued during the calendar quarter, minus Solar Capitals operating expenses for the quarter (including the base management fee, any expenses

payable under the Administration Agreement, and any interest expense and distributions paid on any issued and outstanding preferred stock, but excluding the performance-based incentive fee).

Pre-incentive fee

net investment income does not include any realized capital gains or losses, or unrealized capital appreciation or depreciation.

Pre-incentive fee net investment income, expressed as a rate of return on the

value of Solar Capitals net assets at the end of the immediately preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7% annualized).

Solar Capital pays the Investment Adviser a performance-based incentive fee

with respect to Solar Capitals pre-incentive fee net investment income in each calendar quarter as follows:

(1) no performance-based incentive fee in any calendar quarter in which Solar

Capitals pre-incentive fee net investment income does not exceed the hurdle rate;

(2) 100% of Solar Capitals pre-incentive fee net investment income

with respect to that portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar quarter;

and (3) 20% of the amount of Solar

Capitals pre-incentive fee net investment income, if any, that exceeds 2.1875% in any calendar quarter.

These calculations are appropriately pro-rated for any

period of less than three months.

The second part of the performance-based incentive fee is determined and payable in arrears as of the

end of each calendar year (or upon termination of the Advisory Agreement, as of the termination date), and will equal 20% of Solar Capitals cumulative realized capital gains less cumulative realized capital losses, unrealized capital

depreciation (unrealized depreciation on a gross investment-by-investment basis at the end of each calendar year) and all net capital gains upon which prior

performance-based capital gains incentive fee payments were previously made to the Investment Adviser.

For financial statement purposes, the second part of the performance-based incentive fee is accrued based upon 20% of cumulative net realized

gains and net unrealized capital appreciation.

No accrual was required for the three and nine months ended September 30, 2020 and 2019.

For the three and nine months ended September 30, 2020, the Company recognized $6,176 and $18,416, respectively, in base management fees

and $0 and $1,480, respectively, in performance-based incentive fees.

For the three and nine months ended September 30, 2019, the Company recognized $6,738 and $20,027, respectively, in base management fees and $4,606 and $13,830, respectively,

in performance-based incentive fees.

Solar Capital has also entered into an Administration Agreement with Solar Capital Management, LLC

(the Administrator) under which the Administrator provides administrative services to Solar Capital.

For providing these services, facilities and personnel, Solar Capital reimburses the Administrator for Solar Capitals allocable

portion of overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent.

The Administrator will also provide, on Solar Capitals behalf, managerial assistance to

those portfolio companies to which Solar Capital is required to provide such assistance.

one part is calculated and payable quarterly in arrears based on the

Companys pre-incentive fee net investment income for the immediately preceding calendar quarter.

For this purpose, pre-incentive fee net investment income means

interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that we receive from

portfolio companies) accrued during the calendar quarter, minus the Companys operating expenses for the quarter (including the base management fee, any expenses payable under the Administration Agreement, and any interest expense and

distributions paid on any issued and outstanding preferred stock, but excluding the performance-based incentive fee).

Pre-incentive fee net investment income does not include any realized capital gains or

losses, or unrealized capital appreciation or depreciation.

Pre-incentive fee net investment income, expressed as a rate of return on the value of the Companys net assets at the end of the immediately

preceding calendar quarter, is compared to the hurdle rate of 1.75% per quarter (7% annualized).

The Company pays the Investment Adviser a performance-based incentive fee with respect to the Companys

pre-incentive fee net investment income in each calendar quarter as follows:

(1) no performance-based incentive fee in any calendar quarter in which the Companys

pre-incentive fee net investment income does not exceed the hurdle rate;

(2) 100% of the Companys pre-incentive fee net investment income with respect to that

portion of such pre-incentive fee net investment income, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar quarter;

and (3) 20% of the amount of the Companys pre-incentive fee net investment income, if any, that exceeds 2.1875% in any calendar quarter.

These calculations are appropriately pro-rated for any period of less than three

The second part of the performance-based incentive fee is determined and payable in arrears as of the end of each calendar year

(or upon termination of the Advisory Agreement, as of the termination date), and will equal 20% of the Companys cumulative realized capital gains less cumulative realized capital losses, unrealized capital depreciation (unrealized depreciation

on a gross investment-by-investment basis at the end of each calendar year) and all net capital gains upon which prior performance-based capital gains incentive fee

payments were previously made to the Investment Adviser.

For financial statement purposes, the second part of the performance-based incentive fee is accrued based upon 20% of cumulative net realized gains and net unrealized capital appreciation.

accrual was required for the three months ended March 31, 2021 and 2020.

For the three months ended March 31, 2021 and 2020,

the Company recognized $6,810 and $6,269, respectively, in base management fees and $3,867 and $1,480, respectively, in performance-based incentive fees.

The Company has also entered into an Administration Agreement with SLR Capital Management, LLC (f/k/a Solar Capital Management, LLC) (the

Administrator) under which the Administrator provides administrative services to the Company.

For providing these services, facilities and personnel, the Company reimburses the Administrator for the Companys allocable portion of

overhead and other expenses incurred by the Administrator in performing its obligations under the Administration Agreement, including rent.

The Administrator will also provide, on the Companys behalf, managerial assistance to those portfolio

companies to which the Company is required to provide such assistance.

The Company typically reimburses the Administrator on a quarterly basis.

For the three and nine months ended September 30, 2020, the Company recognized expenses under the Administration Agreement of $1,572 and

For the three months ended March 31, 2021 and 2020, the Company recognized expenses under the Administration Agreement of $1,360 and

$1,147 respectively.

For the three and nine months ended September 30, 2019, the Company recognized expenses under the Administration Agreement of $1,352 and $4,013, respectively.

No managerial assistance fees were accrued or collected for the

three and nine months ended September 30, 2020 and 2019.

SOLAR CAPITAL LTD.

No managerial assistance fees were accrued or collected for the three months ended March 31, 2021 and 2020.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

Net Asset Value Per Share

At September 30, 2020, the Companys total net assets and net asset value per share were $851,093 and $20.14, respectively.

compares to total net assets and net asset value per share at December 31, 2019 of $905,880 and $21.44, respectively.

(Loss) Per Share

The following table sets forth the computation of basic and diluted net increase (decrease) in net assets per share

resulting from operations, pursuant to ASC 260-10, for the three and nine months ended September 30, 2020 and 2019:

Three months ended

September 30,

Nine months ended

September 30,

At March 31, 2021, the Companys total net assets and net asset value per share were $856,206 and $20.26, respectively.

This compares

to total net assets and net asset value per share at December 31, 2020 of $852,023 and $20.16, respectively.

Earnings (Loss) Per

The following table sets forth the computation of basic and diluted net increase (decrease) in net assets per share resulting

from operations, pursuant to ASC 260-10, for the three months ended March 31, 2021 and 2020:

Three months ended March 31,

Earnings (loss) per share (basic & diluted)

35 unchanged sentences

Within the fair value hierarchy tables below, cash and cash equivalents are excluded but could be classified as

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

The following tables present the balances of assets and liabilities measured at fair value on

a recurring basis, as of September 30, 2020 and December 31, 2019:

a recurring basis, as of March 31, 2021 and December 31, 2020:

Fair Value Measurements

As of September 30, 2020

As of March 31, 2021

Senior Secured Loans

12 unchanged sentences

2022 Unsecured Notes

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

The following tables provide a summary of the changes in fair value of Level 3 assets

and liabilities for the three and nine months ended September 30, 2020, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at

September 30, 2020:

and liabilities for the three months ended March 31, 2021, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at March 31, 2021:

Fair Value Measurements Using Level 3 Inputs

2 unchanged sentences

Common Equity/

Fair value, June 30, 2020

Total gains or losses included in earnings:

Net realized gain (loss)

Net change in unrealized gain (loss)

Purchase of investment securities

Proceeds from dispositions of investment securities.

Transfers in/out of Level 3

Fair value, September 30, 2020

Unrealized gains (losses) for the period relating to those Level 3 assets that were still

held by the Company at the end of the period:

Net change in unrealized gain (loss)

Senior Secured

Preferred Equity

Common Equity/

Fair value, December 31, 2020

5 unchanged sentences

Transfers in/out of Level 3 (1)

Fair value, September 30, 2020

Unrealized gains (losses) for the period relating to those Level 3 assets that were still

held by the Company at the end of the period:

Net change in unrealized loss

The following table shows a reconciliation of the beginning and ending balances for fair valued liabilities

measured using significant unobservable inputs (Level 3) for the three and nine months ended September 30, 2020:

2022 Unsecured Notes

For the three months ended

September 30, 2020

Beginning fair value

Net realized (gain) loss

Fair value, March 31, 2021

Unrealized losses for the period relating to those Level 3 assets that were still held by the

Company at the end of the period:

Net change in unrealized gain (loss)

Transfers in/out of Level 3

Ending fair value

SOLAR CAPITAL LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

2022 Unsecured Notes

For the nine months ended

September 30, 2020

On February 17, 2021, the Company exercised its warrants in Senseonics Holdings, Inc., receiving shares in

the common stock of Senseonics Holdings, Inc.

The common stock of Senseonics Holdings, Inc.

is publicly traded, so this position is considered to be a Level 1 asset.

The following table shows a reconciliation of the beginning and ending balances for fair valued liabilities measured using significant

unobservable inputs (Level 3) for the three months ended March 31, 2021:

2022 Unsecured Notes and Unfunded Commitments

For the three months ended

March 31, 2021

Beginning fair value

5 unchanged sentences

accordance with ASC 825-10.

On September 30, 2020, there were borrowings of $150,000 on the 2022 Unsecured Notes.

The following table provides a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2019, as well

as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2019:

On March 31, 2021, there were borrowings of $150,000 on the 2022 Unsecured Notes.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

March 31, 2021

thousands, except share amounts)

The following table provides a summary of the changes in fair value of Level 3 assets

for the year ended December 31, 2020, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets still held at December 31, 2020:

Fair Value Measurements Using Level 3 Inputs

4 unchanged sentences

Total gains or losses included in earnings:

Net realized gain (loss)

Net realized loss

Net change in unrealized gain (loss)

5 unchanged sentences

held by the Company at the end of the period:

Net change in unrealized gain (loss)

Net change in unrealized loss

The following table shows a reconciliation of the beginning and ending balances for fair valued liabilities

measured using significant unobservable inputs (Level 3) for the year ended December 31, 2020:

Credit Facility, 2022 Unsecured Notes and SSLP Facility

2022 Unsecured Notes

For the year ended

3 unchanged sentences

Net change in unrealized (gain) loss

Transfers into Level 3

Transfers out of Level 3

Transfers in/out of Level 3

Ending fair value

2 unchanged sentences

On December 31, 2020, there were borrowings of $150,000 on the 2022 Unsecured Notes.

SOLAR CAPITAL LTD.

Quantitative Information about Level 3 Fair Value Measurements

The Company typically determines the fair value of its performing debt investments utilizing a yield analysis.

In a yield analysis, a price is

ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles.

Additional consideration is given to current contractual interest rates, relative maturities and other key terms

and risks associated with an investment.

Among other factors, a significant determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of our

investment within each portfolio company.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

The Company did not elect to apply the fair value option of accounting to the SSLP Facility,

which was refinanced by way of amendment on May 31, 2019.

As this refinancing was deemed to be a significant modification of debt, per ASC 825-10-25, a new election

was triggered.

As such the SSLP Facility is shown as a transfer out of Level 3.

Quantitative Information about Level 3

Fair Value Measurements

The Company typically determines the fair value of its performing debt investments utilizing a yield

In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles.

Additional consideration is given to current contractual interest rates,

relative maturities and other key terms and risks associated with an investment.

Among other factors, a significant determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company,

and the rights and remedies of our investment within each portfolio company.

Significant unobservable quantitative inputs typically used

in the fair value measurement of the Companys Level 3 assets and liabilities primarily reflect current market yields, including indices, and readily available quotes from brokers, dealers, and pricing services as indicated by comparable

assets and liabilities, as well as enterprise values, returns on equity and earnings before income taxes, depreciation and amortization (EBITDA) multiples of similar companies, and comparable market transactions for equity securities.

Quantitative information about the Companys Level 3 asset and liability fair value measurements as of September 30, 2020

is summarized in the table below:

March 31, 2021

thousands, except share amounts)

Significant unobservable quantitative inputs typically used in the fair value measurement of

the Companys Level 3 assets and liabilities primarily reflect current market yields, including indices, and readily available quotes from brokers, dealers, and pricing services as indicated by comparable assets and liabilities, as well as

enterprise values, returns on equity and earnings before income taxes, depreciation and amortization (EBITDA) multiples of similar companies, and comparable market transactions for equity securities.

Quantitative information about the Companys Level 3 asset and liability fair value measurements as of March 31, 2021 is

summarized in the table below:

Fair Value at

September 30,

March 31, 2021

Principal Valuation

Technique/Methodology

Unobservable Input

1 unchanged sentence

Senior Secured Loans

Income Approach

5.8% 15.4% (8.7%)

Equipment Financing

Approach Market

Income Approach

Market Approach

Return on Equity

6.6% 20.3% (10.2%)

1 unchanged sentence

Preferred Equity

Income Approach

3.2% 8.0% (4.6%)

Common Equity/Equity Interests/Warrants

Approach Market

Multiple Return on

Market Multiple (1)

Market Approach

Comparable Multiple

Return on Equity

5.8x 6.3x (6.3x)

1 unchanged sentence

2022 Unsecured Notes

Income Approach

1.5% 4.6% (4.5%)

Quantitative information about the Companys Level 3 asset and liability fair value measurements as

of December 31, 2019 is summarized in the table below:

Includes $675 of investments valued using a weighted valuation approach, $486 of investments valued using a

Black-Scholes model, $6,442 of investments valued using an EBITDA multiple and $136,596 of investments which, due to the relative proximity of the transaction relative to the measurement date, were valued using the cost of the investments.

Quantitative information about the Companys Level 3 asset and liability fair value measurements as of

December 31, 2020 is summarized in the table below:

Fair Value at

December 31, 2020

Principal Valuation

Technique/Methodology

Unobservable Input

1 unchanged sentence

Senior Secured Loans

Approach Market

Income Approach

5.8% 16.4% (8.9%)

7.8x-8.0x (7.9x)

Equipment Financing

Approach Market

Income Approach

Market Approach

Return on Equity

6.6% 20.3% (10.3%)

1 unchanged sentence

Preferred Equity

Income Approach

3.3% 8.0% (5.0%)

Common Equity/Equity Interests/Warrants

Approach Market

Multiple Return on

Market Multiple (1)

Market Approach

Comparable Multiple

Return on Equity

5.8x 6.3x (6.3x)

1 unchanged sentence

2022 Unsecured Notes

Income Approach

1.5% 4.6% (4.5%)

Significant increases or decreases in any of the above unobservable inputs in isolation, including

unobservable inputs used in deriving bid-ask spreads, if applicable, could result in significantly lower or higher fair value measurements for such assets and liabilities.

Generally, an increase in market

yields or decrease in EBITDA multiples may result in a decrease in the fair value of certain of the Companys investments.

SOLAR CAPITAL LTD.

Includes $675 of investments valued using a weighted valuation approach, $492 of investments valued using a

Black-Scholes model, $6,442 of investments valued using an EBITDA multiple and $136,596 of investments which, due to the proximity of the transaction relative to the measurement date, were valued using the cost of the investments.

Significant increases or decreases in any of the above unobservable inputs in isolation, including unobservable inputs

used in deriving bid-ask spreads, if applicable, could result in significantly lower or higher fair value measurements for such assets and liabilities.

Generally, an increase in market yields or decrease in

EBITDA multiples may result in a decrease in the fair value of certain of the Companys investments.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

Our debt obligations consisted of the following as of September 30, 2020 and December 31, 2019:

September 30, 2020

March 31, 2021

thousands, except share amounts)

Our debt obligations consisted of the following as of March 31, 2021 and December 31, 2020:

March 31, 2021

December 31, 2020

8 unchanged sentences

2026 Unsecured Notes

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $2,388 and $2,683,

respectively, as of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $680 and $851, respectively, as

of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $72 and $95, respectively, as

of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $863 and $1,124, respectively,

as of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $1,188 and $1,268,

respectively, as of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $751 and $762, respectively as

of September 30, 2020 and December 31, 2019.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $2,084 and $2,234 as of

March 31, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $567 and $623 as of

March 31, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $62 and $70 as of

March 31, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $686 and $775 as of

March 31, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $1,058 and $1,123 as of

March 31, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $698 and $724 as of

March 31, 2021 and December 31, 2020, respectively.

Unsecured Notes

10 unchanged sentences

Interest on the 2022 Tranche C Notes is due semi-annually on June 28 and December 28.

The 2022 Tranche C Notes were issued in a private placement only to qualified institutional buyers.

On November 22, 2017, we issued $75,000 in aggregate principal amount of publicly registered 2023 Unsecured Notes for net proceeds of

The 2022 Tranche C Notes were issued in a private placement only to qualified

institutional buyers.

On November 22, 2017, we issued $75,000 in aggregate principal amount of publicly registered 2023 Unsecured

Notes for net proceeds of $73,846.

Interest on the 2023 Unsecured Notes is paid semi-annually on January 20 and July 20, at a fixed rate of 4.50% per year, commencing on January 20, 2018.

The 2023 Unsecured Notes mature on January 20, 2023.

On February 15, 2017, the Company closed a private offering of $100,000 of the 2022 Unsecured Notes with a fixed interest rate of 4.60%

and a maturity date of May 8, 2022.

The 2023 Unsecured Notes mature on

January 20, 2023.

On February 15, 2017, the Company closed a private offering of $100,000 of the 2022

Unsecured Notes with a fixed interest rate of 4.60% and a maturity date of May 8, 2022.

Interest on the 2022 Unsecured Notes is due semi-annually on May 8 and November 8.

The 2022 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

On November 8, 2016, the Company closed a private offering of $50,000 of the 2022 Unsecured Notes with a fixed interest rate of 4.40% and

a maturity date of May 8, 2022.

The 2022 Unsecured Notes were issued in a private placement

only to qualified institutional buyers.

On November 8, 2016, the Company closed a private offering of $50,000 of the 2022 Unsecured

Notes with a fixed interest rate of 4.40% and a maturity date of May 8, 2022.

Interest on the 2022 Unsecured Notes is due semi-annually on May 8 and November 8.

The 2022 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

SOLAR CAPITAL LTD.

The 2022 Unsecured Notes were issued in a private placement only to

qualified institutional buyers.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

Revolving and Term Loan Facilities

1 unchanged sentence

secured credit agreement (the Credit Facility).

The Credit Facility was originally composed of $470,000 of revolving credit and $75,000 of term loans.

On February 12, 2020, a new lender to the Company executed a commitment increase

to our Credit Facility providing for an additional $75,000 of revolving credit, bringing our Credit Facilitys total revolving credit capacity to $545,000.

Borrowings generally bear interest at a rate per annum equal to the base rate plus a

range of 2.00-2.25% or the alternate base rate plus 1.00%-1.25%.

The Credit Facility is composed of $470,000 of revolving credit and $75,000 of term loans.

Borrowings generally bear interest at a rate per annum equal to the base rate plus a range of 2.00-2.25% or the alternate base rate plus 1.00%-1.25%.

The Credit Facility has no LIBOR floor requirement.

The Credit Facility matures in August 2024 and

includes ratable amortization in the final year.

The Credit Facility matures in August 2024 and includes ratable

amortization in the final year.

The Credit Facility may be increased up to $800,000 with additional new lenders or an increase in commitments from current lenders.

The Credit Facility contains certain customary affirmative and

negative covenants and events of default.

The Credit Facility contains certain customary affirmative and negative covenants and

events of default.

In addition, the Credit Facility contains certain financial covenants that among other things, requires the Company to maintain a minimum shareholders equity and a minimum asset coverage ratio.

September 30, 2020, outstanding USD equivalent borrowings under the Credit Facility totaled $75,000, composed of $0 of revolving credit and $75,000 of term loans.

At March 31, 2021,

outstanding USD equivalent borrowings under the Credit Facility totaled $235,000, composed of $160,000 of revolving credit and $75,000 of term loans.

On September 26, 2018, NEFPASS SPV LLC, a newly formed wholly-owned subsidiary of NEFPASS LLC, as borrower entered into a $50,000 senior

2 unchanged sentences

The NEFPASS Facility is scheduled to mature on September 26,

NEFPASS Facility generally bears interest at a rate of LIBOR plus 2.15%.

NEFPASS and NEFPASS SPV LLC, as applicable, have made certain customary representations and warranties, and are required to comply with various covenants, including leverage

restrictions, reporting requirements and other customary requirements for similar credit facilities.

The NEFPASS Facility generally bears interest at a rate of LIBOR plus 2.15%.

NEFPASS and NEFPASS SPV LLC, as applicable, have made certain customary representations and warranties, and are required to comply with various

covenants, including leverage restrictions, reporting requirements and other customary requirements for similar credit facilities.

The NEFPASS Facility also includes usual and customary events of default for credit facilities of this nature.

There were no borrowings outstanding

as of September 30, 2020.

Certain covenants on our issued debt may restrict our business activities, including limitations that

could hinder our ability to finance additional loans and investments or to make the distributions required to maintain our status as a RIC under Subchapter M of the Code.

were $30,000 of borrowings outstanding as of March 31, 2021.

Certain covenants on our issued debt may restrict our business

activities, including limitations that could hinder our ability to finance additional loans and investments or to make the distributions required to maintain our status as a RIC under Subchapter M of the Code.

The Company has made an election to apply the fair value option of accounting to the 2022 Unsecured Notes, in accordance with ASC 825-10.

2 unchanged sentences

reported in the Consolidated Statement of Operations.

The average annualized interest cost for all borrowings for the nine months ended

September 30, 2020 and the year ended December 31, 2019 was 4.23% and 4.52%, respectively.

These costs are exclusive of other credit facility expenses such as unused fees, agency fees and other prepaid expenses related to establishing

and/or amending the Credit Facility, the 2022 Unsecured Notes, the 2022 Tranche C Notes, the NEFPASS Facility, the 2023 Unsecured Notes, the 2024 Unsecured Notes, and the 2026 Unsecured Notes (collectively the Credit Facilities), if any.

The maximum amounts borrowed on the Credit Facilities during the nine months ended September 30, 2020 and the year ended December 31, 2019 were $601,000 and $616,186, respectively.

SOLAR CAPITAL LTD.

The average annualized interest cost for all borrowings for the three months ended

March 31, 2021 and the year ended December 31, 2020 was 3.68% and 4.11%, respectively.

These costs are exclusive of other credit facility expenses such as unused fees, agency fees and other prepaid expenses related to establishing and/or

amending the Credit Facility, the 2022 Unsecured Notes, the 2022 Tranche C Notes, the NEFPASS Facility, the 2023 Unsecured Notes, the 2024 Unsecured Notes, and the 2026 Unsecured Notes (collectively the Credit Facilities), if any.

maximum amounts borrowed on the Credit Facilities during the three months ended March 31, 2021 and the year ended December 31, 2020 were $715,000 and $677,000, respectively.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

Financial Highlights

The following is a schedule of financial highlights for the nine months ended September 30, 2020 and 2019:

Nine months ended

September 30, 2020

Nine months ended

September 30, 2019

The following is a schedule of financial highlights for the three months ended March 31, 2021 and 2020:

Three months ended

March 31, 2021

Three months ended

March 31, 2020

Per Share Data:

23 unchanged sentences

Not annualized for periods less than one year.

SOLAR CAPITAL LTD.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

Crystal Financial LLC

March 31, 2021

thousands, except share amounts)

SLR Credit Solutions

On December 28, 2012, we completed the acquisition of Crystal Capital Financial Holdings LLC (Crystal Financial), a commercial

2 unchanged sentences

Crystal Financial owned approximately 98% of the

outstanding ownership interest in Crystal Financial LLC.

The remaining financial interest was held by various employees of Crystal Financial LLC, through their investment in Crystal Management LP.

Crystal Financial LLC had a diversified portfolio of

23 loans having a total par value of approximately $400,000 at November 30, 2012 and a $275,000 committed revolving credit facility.

On July 28, 2016, the Company purchased Crystal Management LPs approximately 2% equity interest in

Crystal Financial LLC for approximately $5,737.

Upon the closing of this transaction, the Company holds 100% of the equity interest in Crystal Financial LLC.

On September 30, 2016, Crystal Capital Financial Holdings LLC was dissolved.

December 20, 2018, the revolving credit facility was expanded to $330,000.

As of September 30, 2020 Crystal Financial LLC had

28 funded commitments to 23 different issuers with a total par value of approximately $380,874 on total assets of $417,726.

As of December 31, 2019 Crystal Financial LLC had 35 funded commitments to 28 different issuers with total funded loans

outstanding ownership interest in SLR Credit Solutions (SLR Credit), f/k/a Crystal Financial LLC.

The remaining financial interest was held by various employees of SLR Credit, through their investment in Crystal Management LP.

had a diversified portfolio of 23 loans having a total par value of approximately $400,000 at November 30, 2012 and a $275,000 committed revolving credit facility.

On July 28, 2016, the Company purchased Crystal Management LPs

approximately 2% equity interest in SLR Credit for approximately $5,737.

Upon the closing of this transaction, the Company holds 100% of the equity interest in SLR Credit.

On September 30, 2016, Crystal Capital Financial Holdings LLC was

As of March 11, 2021, total commitments to the revolving credit facility are $280,000.

As of March 31, 2021 SLR

Credit had 30 funded commitments to 24 different issuers with a total par value of approximately $344,414 on total assets of $400,737.

As of December 31, 2020, SLR Credit had 30 funded commitments to 24 different issuers with a total par value

of approximately $404,115 on total assets of $433,914.

As of September 30, 2020 and December 31, 2019, the largest loan outstanding totaled $45,000 and $45,000, respectively.

As of March 31, 2021 and December 31, 2020, the largest loan outstanding totaled $32,782 and $45,000, respectively.

For the same periods, the average exposure per issuer was $14,351

and $16,838, respectively.

Crystal Financial LLCs credit facility, which is non-recourse to Solar Capital, had approximately $167,422 and $275,954 of borrowings outstanding at

September 30, 2020 and December 31, 2019, respectively.

For the three months ended September 30, 2020 and 2019, Crystal Financial LLC had net income of $6,041 and $4,518, respectively, on gross income of $9,301 and $13,346,

respectively.

For the nine months ended September 30, 2020 and 2019, Crystal Financial LLC had net income of $16,291 and $20,163, respectively, on gross income of $32,944 and $48,336, respectively.

SLR Credits credit facility, which is non-recourse to the Company, had approximately $140,495 and $183,896 of borrowings outstanding at March 31, 2021 and

December 31, 2020, respectively.

For the three months ended March 31, 2021 and 2020, SLR Credit had net income of $4,953 and $1,901, respectively, on gross income of $9,676 and $11,505, respectively.

Due to timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions.

Commitments and Contingencies

The Company had unfunded debt and equity commitments to various revolving and delayed draw loans as

well as to Crystal Financial LLC.

The total amount of these unfunded commitments as of September 30, 2020 and December 31, 2019 is $109,559 and $124,529, respectively, comprised of the following:

September 30, 2020

December 31, 2019

Crystal Financial LLC*

Kindred Biosciences, Inc

The Company had unfunded debt and equity commitments to various revolving and delayed-draw term

loans as well as to SLR Credit.

The total amount of these unfunded commitments as of March 31, 2021 and December 31, 2020 is $122,259 and $126,180, respectively, comprised of the following:

SLR Credit Solutions*

Smile Doctors LLC

High Street Insurance Partners, Inc.

One Touch Direct, LLC

Cardiva Medical, Inc

Kindred Biosciences, Inc

Neuronetics, Inc

Soleo Health Holdings, Inc.

SOC Telemed, Inc

PQ Bypass, Inc

NEF Holdings, Inc.

Centrexion Therapeutics, Inc

SLR Equipment Finance

Atria Wealth Solutions, Inc

Cerapedics, Inc

Foundation Consumer Brands, LLC

Basic Fun, Inc

Sentry Data Systems, Inc

1 unchanged sentence

Delphinus Medical Technologies, Inc.

Enhanced Capital Group, LLC

Rubius Therapeutics, Inc

Phynet Dermatology LLC

Altern Marketing, LLC

Varilease Finance, Inc

MRI Software LLC

Solara Medical Supplies, Inc

RS Energy Group U.S., Inc

Alimera Sciences, Inc

Soleo Health Holdings, Inc.

Cardiva Medical, Inc

Centrexion Therapeutics, Inc

Total Commitments

* The Company controls the funding of the Crystal Financial LLC commitment and may cancel it

at its discretion.

SOLAR CAPITAL LTD.

The Company controls the funding of the SLR Credit Solutions commitment and may cancel it at its

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

March 31, 2021

thousands, except share amounts)

The credit agreements of the above loan commitments contain customary lending provisions

2 unchanged sentences

Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the

As of September 30, 2020 and December 31, 2019, the Company had sufficient cash available and/or liquid securities available to fund its commitments.

NEF Holdings, LLC

July 31, 2017, we completed the acquisition of NEF Holdings, LLC (NEF), which conducts its business through its wholly-owned subsidiary Nations Equipment Finance, LLC.

NEF is an independent equipment finance company that provides

senior secured loans and leases primarily to U.S.

As of March 31, 2021 and December 31, 2020, the Company had sufficient cash available and/or liquid securities available to fund its commitments.

SLR Equipment Finance

July 31, 2017, we completed the acquisition of NEF Holdings, LLC, which conducts its business through its wholly-owned subsidiary Nations Equipment Finance, LLC.

Effective February 25, 2021, Nations Equipment Finance, LLC and its related

companies is now known as SLR Equipment Finance (SLR Equipment).

SLR Equipment is an independent equipment finance company that provides senior secured loans and leases primarily to U.S.

based companies.

We invested $209,866 in cash to effect the transaction, of which $145,000 was invested in the equity of NEF through our wholly-owned consolidated taxable subsidiary NEFCORP LLC and

our wholly-owned consolidated subsidiary NEFPASS LLC and $64,866 was used to purchase certain leases and loans held by NEF through NEFPASS LLC.

Concurrent with the transaction, NEF refinanced its existing senior secured credit facility into a

$150,000 non-recourse facility with an accordion feature to expand up to $250,000.

In September 2019, NEF amended the facility, increasing commitments to $213,957 with an accordion feature to expand up to

$313,957 and extended the maturity date of the facility to July 31, 2023.

At July 31, 2017, NEF also had two securitizations outstanding, with an issued note balance of $94,587, which were later redeemed in 2018.

As of September 30, 2020, NEF had 141 funded equipment-backed leases and loans to 62 different customers with a total net investment in

leases and loans of approximately $192,316 on total assets of $279,063.

As of December 31, 2019, NEF had 168 funded equipment-backed leases and loans to 78 different customers with a total net investment in leases and loans of approximately

$244,996 on total assets of $304,203.

As of September 30, 2020 and December 31, 2019, the largest position outstanding totaled $25,600 and $26,948, respectively.

For the same periods, the average exposure per customer was $3,102 and

$3,141, respectively.

NEFs credit facility, which is non-recourse to Solar Capital, had approximately $106,927 and $128,150 of borrowings outstanding at September 30, 2020 and December 31,

2019, respectively.

For the three months ended September 30, 2020 and September 30, 2019, NEF had net income (loss) of $1,532 and ($707), respectively, on gross income of $6,462 and $8,728, respectively.

For the nine months ended

September 30, 2020 and September 30, 2019, NEF had net loss of $395 and $206, respectively, on gross income of $17,795 and $24,284, respectively.

Due to timing and non-cash items, there may be

material differences between GAAP net income and cash available for distributions.

We invested $209,866 in cash to

effect the transaction, of which $145,000 was invested in the equity of SLR Equipment through our wholly-owned consolidated taxable subsidiary NEFCORP LLC and our wholly-owned consolidated subsidiary NEFPASS LLC and $64,866 was used to purchase

certain leases and loans held by SLR Equipment through NEFPASS LLC.

Concurrent with the transaction, SLR Equipment refinanced its existing senior secured credit facility into a $150,000 non-recourse facility

with an accordion feature to expand up to $250,000.

In September 2019, SLR Equipment amended the facility, increasing commitments to $213,957 with an accordion feature to expand up to $313,957 and extended the maturity date of the facility to

July 31, 2023.

At July 31, 2017, SLR Equipment also had two securitizations outstanding, with an issued note balance of $94,587, which were later redeemed in 2018.

As of March 31, 2021, SLR Equipment had 132 funded equipment-backed leases and loans to 59 different customers with a total net

investment in leases and loans of approximately $188,414 on total assets of $262,284.

As of December 31, 2020, NEF had 138 funded equipment-backed leases and loans to 61 different customers with a total net investment in leases and loans of

approximately $188,448 on total assets of $263,443.

As of March 31, 2021 and December 31, 2020, the largest position outstanding totaled $19,121 and $25,103, respectively.

For the same periods, the average exposure per customer was

$3,193 and $3,089, respectively.

SLR Equipments credit facility, which is non-recourse to the Company, had approximately $101,658 and $100,569 of borrowings outstanding at March 31, 2021 and

December 31, 2020, respectively.

For the three months ended March 31, 2021 and March 31, 2020, SLR Equipment had net income (loss) of ($318) and $427, respectively, on gross income of $4,894 and $5,914, respectively.

Due to timing and

non-cash items, there may be material differences between GAAP net income and cash available for distributions.

Capital Share Transactions

As of September 30, 2020 and September 30, 2019, 200,000,000 shares of $0.01 par value capital stock were authorized.

There were no transactions in capital stock during the three and nine months ended September 30, 2020 and September 30, 2019.

Subsequent Events

has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the consolidated financial statements were issued.

On November 3, 2020, the Company completed the acquisition of Kingsbridge Holdings, LLC (Kingsbridge).

Kingsbridge is an

independent equipment finance company that provides senior secured financings to U.S.

based companies.

On November 5, 2020, our

Board declared a quarterly distribution of $0.41 per share payable on January 5, 2021 to holders of record as of December 17, 2020.

SOLAR CAPITAL LTD.

of March 31, 2021 and March 31, 2020, 200,000,000 shares of $0.01 par value capital stock were authorized.

There were no

transactions in capital stock during the three months ended March 31, 2021 and March 31, 2020.

Kingsbridge Holdings, LLC

On November 3, 2020, the Company acquired 87.5% of Kingsbridge Holdings, LLC (KBH) through KBH Topco LLC (KBHT), a

newly formed Delaware corporation.

KBH is a residual focused independent mid-ticket lessor of equipment primarily to U.S.

investment grade companies.

The Company invested $216,596 to effect the

transaction, of which $136,596 was invested to acquire 87.5% of KBHTs equity and $80,000 in KBHs debt.

The existing management team of KBH committed to continue to lead KBH after the transaction.

Post the transaction, the

Company owns 87.5% of KBHT equity and the KBH management team owns the remaining 12.5% of KBHTs equity.

As of March 31, 2021,

KBH had total assets of $748,444.

Recourse debt outstanding for KBH totaled $220,706 as of March 31, 2021.

Non-recourse debt outstanding for KBH totaled $345,260 at March 31, 2021.

December 31, 2020, KBH had total assets of $744,684.

KBH also had recourse debt outstanding of $219,044 as well as non-recourse debt outstanding of $335,899 at December 31, 2020.

For the three

months ended March 31, 2021, KBH had net income of $2,267 on gross income of $58,146.

Due to timing and non-cash items, there may be material differences between GAAP net income and cash available

for distributions.

As such, and subject to fluctuations in KBHs funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that KBH will be able to maintain consistent dividend payments to

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2020

(in thousands, except share amounts)

The global outbreak of the COVID-19 pandemic, and the

related effect on the U.S.

and global economies, has continued to have adverse consequences for the business operations of some of the Companys portfolio companies and, as a result, has had adverse effects on the Companys operations.

ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, remain uncertain.

The operational and financial performance of the issuers of securities in which the Company invests

depends on future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Companys investments and negatively impact the Companys performance.

March 31, 2021

thousands, except share amounts)

Subsequent Events

The Company has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the consolidated

financial statements were issued.

On May 5, 2021, our Board declared a quarterly distribution of $0.41 per share payable on

July 2, 2021 to holders of record as of June 23, 2021.

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Solar Capital Ltd.:

SLR Investment

Results of Review of Interim Financial Information

We have reviewed the consolidated statement of assets and liabilities of Solar Capital Ltd.

(and subsidiaries) (the Company), including the consolidated

schedule of investments, as of September 30, 2020, the related consolidated statements of operations and changes in net assets, for the three-month and nine-month periods ended September 30, 2020 and 2019, the related consolidated

statements of cash flows for the nine-month periods ended September 30, 2020 and 2019, and the related notes (collectively, the consolidated interim financial information).

Based on our reviews, we are not aware of any material modifications

that should be made to the consolidated interim financial information for it to be in conformity with U.S.

We have reviewed the consolidated statement of assets and liabilities of SLR Investment Corp.

(and subsidiaries) (the Company), formerly Solar Capital Ltd.,

including the consolidated schedule of investments, as of March 31, 2021, the related consolidated statements of operations, changes in net assets, and cash flows for the three-month periods ended March 31, 2021 and 2020, and the related

notes (collectively, the consolidated interim financial information).

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S.

generally accepted accounting principles.

have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statement of assets and liabilities, including the consolidated schedule of investments, of the

Company as of December 31, 2019, and the related consolidated statements of operations, changes in net assets, and cash flows for the year then ended (not presented herein);

and in our report dated February 20, 2020, we expressed an

unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of

December 31, 2019, is fairly stated, in all material respects, in relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board

(United States) (PCAOB), the consolidated statement of assets and liabilities, including the consolidated schedule of investments, of the Company as of December 31, 2020, and the related consolidated statements of operations, changes in net

assets, and cash flows for the year then ended (not presented herein);

and in our report dated February 24, 2021, we expressed an unqualified opinion on those consolidated financial statements.

In our opinion, the information set forth in the accompanying consolidated statement of assets and liabilities, including the consolidated schedule of investments, as of December 31, 2020, is fairly stated, in all material respects, in

relation to the consolidated statement of assets and liabilities, including the consolidated schedule of investments, from which it has been derived.

Basis for Review Results

11 unchanged sentences

New York, New York

November 5, 2020

Managements Discussion and Analysis of Financial Condition and Results of Operations

46 unchanged sentences

with initial capital of $1.2 billion of which 47.04% was funded by affiliated parties.

Solar Capital Ltd.

Capital, the Company, we or our), a Maryland corporation formed in November 2007, is a closed-end, externally managed,

non-diversified management investment company that has elected to be regulated as a business

development company (BDC) under the Investment Company Act of 1940, as amended (the 1940 Act).

Furthermore, as the Company is an investment company, it continues to apply

the guidance in the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946.

In addition, for U.S federal income tax purposes, the Company has elected to be treated as a regulated

investment company (RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

February 9, 2010, we priced our initial public offering, selling 5.68 million shares of our common stock.

SLR Investment Corp.

f/k/a Solar Capital,

Ltd., a Maryland corporation formed in November 2007, is a closed-end, externally managed, non-diversified management investment company that has elected to be

regulated as a business development company

(BDC) under the Investment Company Act of 1940, as amended (the 1940 Act).

Furthermore, as the Company is an investment company, it continues to apply the guidance in the

Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 946.

In addition, for U.S federal income tax purposes, the Company has elected to be treated as a regulated investment company

(RIC) under Subchapter M of the Internal Revenue Code of 1986, as amended (the Code).

On February 9, 2010,

we priced our initial public offering, selling 5.68 million shares of our common stock.

Concurrent with our initial public offering, Michael S.

Gross, our Chairman, Co-Chief

Executive Officer and President, and Bruce Spohler, our Co-Chief Executive Officer and Chief Operating Officer, collectively purchased an additional 0.6 million shares of our common stock through a

private placement transaction exempt from registration under the Securities Act.

Gross, our Chairman, Co-Chief Executive Officer and

President, and Bruce Spohler, our Co-Chief Executive Officer and Chief Operating Officer, collectively purchased an additional 0.6 million shares of our common stock through a private placement

transaction exempt from registration under the Securities Act.

We invest primarily in privately held U.S.

middle-market

companies, where we believe the supply of primary capital is limited and the investment opportunities are most attractive.

middle-market companies, where

we believe the supply of primary capital is limited and the investment opportunities are most attractive.

Our investment objective is to generate both current income and capital appreciation through debt and equity investments.

invest primarily in leveraged middle-market companies in the form of senior secured loans, stretch-senior loans, financing leases and to a lesser extent, unsecured loans and equity securities.

From time to time, we may also invest in public

companies that are thinly traded.

We invest primarily

in leveraged middle-market companies in the form of senior secured loans, stretch-senior loans, financing leases and to a lesser extent, unsecured loans and equity securities.

From time to time, we may also invest in public companies that are thinly

Our business is focused primarily on the direct origination of investments through portfolio companies or their financial sponsors.

Our investments generally range between $5 million and $100 million each,

although we expect that this investment size will vary proportionately with the size of our capital base and/or with strategic initiatives.

Our investment activities are managed by Solar Capital Partners, LLC (the Investment Adviser) and

supervised by our board of directors, a majority of whom are non-interested, as such term is defined in the 1940 Act.

Solar Capital Management, LLC (the Administrator) provides the administrative

services necessary for us to operate.

In addition, we may invest a portion of our portfolio in other types of investments, which we refer

to as opportunistic investments, which are not our primary focus but are intended to enhance our overall returns.

These investments may include, but are not limited to, direct investments in public companies that are not thinly traded and securities

of leveraged companies located in select countries outside of the United States.

As of September 30, 2020, the Investment Adviser

has directly invested approximately $9.5 billion in more than 400 different portfolio companies since 2006.

Over the same period, the Investment Adviser completed transactions with approximately 200 different financial sponsors.

Our investments generally range between $5 million and $100 million each, although we expect that

this investment size will vary proportionately with the size of our capital base and/or with strategic initiatives.

Our investment activities are managed by SLR Capital Partners, LLC (the Investment Adviser) and supervised by our board

of directors, a majority of whom are non-interested, as such term is defined in the 1940 Act.

SLR Capital Management, LLC (the Administrator) provides the administrative services necessary for us

In addition, we may invest a portion of our portfolio in other types of investments, which we refer to as opportunistic

investments, which are not our primary focus but are intended to enhance our overall returns.

These investments may include, but are not limited to, direct investments in public companies that are not thinly traded and securities of leveraged

companies located in select countries outside of the United States.

As of March 31, 2021, the Investment Adviser has directly

invested approximately $10.4 billion in more than 420 different portfolio companies since 2006.

Over the same period, the Investment Adviser completed transactions with more than 200 different financial sponsors.

Recent Developments

On November 3,

2020, the Company completed the acquisition of Kingsbridge Holdings, LLC (Kingsbridge).

Kingsbridge is an independent equipment finance company that provides senior secured financings to U.S.

based companies.

On November 5, 2020, our Board declared a quarterly distribution of $0.41 per share payable on January 5, 2021 to holders of record

as of December 17, 2020.

The global outbreak of the COVID-19 pandemic, and the related effect

economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, remain uncertain.

The operational and financial performance of the issuers of securities in which the Company invests depends on

future developments, including the duration and spread of the outbreak, and such uncertainty may in turn adversely affect the value and liquidity of the Companys investments and negatively impact the Companys performance.

Our level of investment

activity can and does vary substantially from period to period depending on many factors, including the amount of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such companies, the

general economic environment and the competitive environment for the types of investments we make.

As a BDC, we must not acquire any assets other than qualifying assets specified in the 1940 Act unless, at the time the acquisition is

made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).

Qualifying assets include investments in eligible portfolio companies. The definition of eligible portfolio company includes

certain public companies that do not have any securities listed on a national securities exchange and companies whose securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

We generate revenue primarily in

the form of interest and dividend income from the securities we hold and capital gains, if any, on investment securities that we may sell.

Our debt investments generally have a stated term of three to seven years and typically bear interest at a

floating rate usually determined on the basis of a benchmark London interbank offered rate (LIBOR), commercial paper rate, or the prime rate.

On May 5, 2021,

our Board declared a quarterly distribution of $0.41 per share payable on July 2, 2021 to holders of record as of June 23, 2021.

Our level of investment activity can and does vary substantially from period to period depending on many factors, including the amount

of debt and equity capital available to middle market companies, the level of merger and acquisition activity for such companies, the general economic environment and the competitive environment for the types of investments we make.

must not acquire any assets other than qualifying assets specified in the 1940 Act unless, at the time the acquisition is made, at least 70% of our total assets are qualifying assets (with certain limited exceptions).

Qualifying assets

include investments in eligible portfolio companies. The definition of eligible portfolio company includes certain public companies that do not have any securities listed on a national securities exchange and companies whose

securities are listed on a national securities exchange but whose market capitalization is less than $250 million.

We generate revenue primarily in the form of interest and dividend income from the securities we hold and capital gains, if any, on investment

securities that we may sell.

Our debt investments generally have a stated term of three to seven years and typically bear interest at a floating rate usually determined on the basis of a benchmark London interbank offered rate (LIBOR),

commercial paper rate, or the prime rate.

Interest on our debt investments is generally payable monthly or quarterly but may be bi-monthly or semi-annually.

In addition, our investments may provide payment-in-kind (PIK) interest.

Such amounts of

accrued PIK interest are added to the cost of the investment on the respective capitalization dates and generally become due at maturity of the investment or upon the investment being called by the issuer.

We may also generate revenue in the form of

commitment, origination, structuring fees, fees for providing managerial assistance and, if applicable, consulting fees, etc.

All investment professionals of the investment adviser and their respective staffs, when and to the extent engaged in providing investment

advisory and management services, and the compensation and routine overhead expenses of such personnel allocable to such services, are provided and paid for by Solar Capital Partners.

We bear all other costs and expenses of our operations and

transactions, including (without limitation):

Such amounts of accrued PIK interest are added to the cost of the investment on the respective capitalization dates and generally

become due at maturity of the investment or upon the investment being called by the issuer.

We may also generate revenue in the form of commitment, origination, structuring fees, fees for providing managerial assistance and, if applicable,

consulting fees, etc.

investment professionals of the investment adviser and their respective staffs, when and to the extent engaged in providing investment advisory and management services, and the compensation and routine overhead expenses of such personnel allocable

to such services, are provided and paid for by SLR Capital Partners.

We bear all other costs and expenses of our operations and transactions, including (without limitation):

the cost of our organization and public offerings;

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state securities laws;

all other expenses incurred by either Solar Capital Management or us in connection with administering our

business, including payments under the Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by Solar Capital Management in performing its obligations under the Administration Agreement,

including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the costs of compensation and related expenses of our chief compliance officer and our chief financial officer and their respective

We expect our general and administrative operating expenses related to our ongoing operations to increase

moderately in dollar terms.

all other expenses incurred by either SLR Capital Management or us in connection with administering our business,

including payments under the Administration Agreement that will be based upon our allocable portion of overhead and other expenses incurred by SLR Capital Management in performing its obligations under the Administration Agreement, including rent,

the fees and expenses associated with performing compliance functions, and our allocable portion of the costs of compensation and related expenses of our chief compliance officer and our chief financial officer and their respective staffs.

We expect our general and administrative operating expenses related to our ongoing operations to increase moderately in

dollar terms.

During periods of asset growth, we generally expect our general and administrative operating expenses to decline as a percentage of our total assets and increase during periods of asset declines.

Incentive fees, interest

expense and costs relating to future offerings of securities, among others, may also increase or reduce overall operating expenses based on portfolio performance, interest rate benchmarks, and offerings of our securities relative to comparative

periods, among other factors.

Incentive fees, interest expense and

costs relating to future offerings of securities, among others, may also increase or reduce overall operating expenses based on portfolio performance, interest rate benchmarks, and offerings of our securities relative to comparative periods, among

other factors.

Portfolio and Investment Activity

During the three months ended September 30, 2020, we invested approximately $42.4 million across 12 portfolio companies.

compares to investing approximately $116.2 million in 24 portfolio companies for the three months ended September 30, 2019.

Investments sold, prepaid or repaid during the three months ended September 30, 2020 totaled approximately

$60.3 million versus approximately $111.4 million for the three months ended September 30, 2019.

At September 30, 2020, our portfolio consisted of 105 portfolio companies and was

invested 22.3% in cash flow senior secured loans, 31.8% in asset-based senior secured loans / Crystal, 22.0% in equipment senior secured financings / NEF, and 23.9% in life science senior secured loans, in each case, measured at fair value, versus

110 portfolio companies invested 29.2% in cash flow senior secured loans, 29.7% in asset-based senior secured loans / Crystal, 21.8% in equipment senior secure financings / NEF, and 19.3% in life science senior secured loans, in each case, measured

at fair value, at September 30, 2019.

At September 30, 2020, 77.3% or $1.04 billion of our income producing investment

During the three months ended March 31, 2021, we invested approximately $98.7 million across 15 portfolio companies.

This compares to

investing approximately $79.6 million in 15 portfolio companies for the three months ended March 31, 2020.

Investments sold, prepaid or repaid during the three months ended March 31, 2021 totaled approximately $67.0 million

versus approximately $200.3 million for the three months ended March 31, 2020.

At March 31, 2021, our portfolio consisted

of 105 portfolio companies and was invested 21.1% in cash flow senior secured loans, 25.8% in asset-based senior secured loans / SLR Credit Solutions (SLR Credit), 13.7% in Kingsbridge Holdings, LLC (KBH), 18.2% in equipment

senior secured financings / SLR Equipment Finance (SLR Equipment), and 21.2% in life science senior secured loans, in each case, measured at fair value, versus 105 portfolio companies and was invested 23.3% in cash flow senior secured

loans, 31.8% in asset-based senior secured loans / SLR Credit, 22.5% in equipment senior secured financings / SLR Equipment, and 22.4% in life science senior secured loans, in each case, measured at fair value, at March 31, 2020.

At March 31, 2021, 72.8% or $1.14 billion of our income producing investment

portfolio * is floating rate and 27.2% or $426.3 million is fixed rate, measured at fair value.

At September 30, 2019, 76.8% or $1.13 billion of our income producing investment

At March 31, 2020, 76.5% or $969.7 million of our income producing investment

portfolio * is floating rate and 23.5% or $298.1 million is fixed rate, measured at fair value.

As of September 30, 2020 and 2019, we had zero issuers and one issuer on non-accrual status, respectively.

Since inception through September 30, 2020, Solar Capital and

its predecessor companies have invested approximately $6.5 billion in more than 290 portfolio companies.

Over the same period, Solar Capital has completed transactions with more than 150 different financial sponsors.

* We have included Crystal Financial LLC and NEF Holdings LLC within our income producing

investment portfolio.

Crystal Financial LLC

As of March 31, 2021 and 2020, we had zero and one issuer, respectively, on non-accrual status.

Since inception through March 31, 2021, the Company and its predecessor

companies have invested approximately $6.8 billion in more than 300 portfolio companies.

Over the same period, the Company has completed transactions with more than 150 different financial sponsors.

We have included SLR Credit Solutions, SLR Equipment Finance and Kingsbridge Holdings, LLC within our income

producing investment portfolio.

SLR Credit Solutions

On December 28, 2012, we completed the acquisition of Crystal Capital Financial Holdings LLC (Crystal Financial), a commercial

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Crystal Financial owned approximately 98% of the

outstanding ownership interest in Crystal Financial LLC.

The remaining financial interest was held by various employees of Crystal Financial LLC, through their investment in Crystal Management LP.

Crystal Financial LLC had a diversified portfolio of

23 loans having a total par value of approximately $400 million at November 30, 2012 and a $275 million committed revolving credit facility.

On July 28, 2016, the Company purchased Crystal Management LPs approximately 2%

equity interest in Crystal Financial LLC for approximately $5.7 million.

Upon the closing of this transaction, the Company holds 100% of the equity interest in Crystal Financial LLC.

On September 30, 2016, Crystal Capital Financial

Holdings LLC was dissolved.

On December 20, 2018, the revolving credit facility was expanded to $330 million.

September 30, 2020, Crystal Financial LLC had 28 funded commitments to 23 different issuers with a total par value of approximately $380.9 million on total assets of $417.7 million.

As of December 31, 2019, Crystal Financial LLC

had 35 funded commitments to 28 different issuers with total funded loans of approximately $496.8 million on total assets of $518.0 million.

As of September 30, 2020 and December 31, 2019, the largest loan outstanding totaled

$45.0 million and $45.0 million, respectively.

For the same periods, the average exposure per issuer was $16.6 million and $17.7 million, respectively.

Crystal Financial LLCs credit facility, which is non-recourse to Solar Capital, had approximately $167.4 million and $276.0 million of borrowings outstanding at September 30, 2020 and December 31, 2019, respectively.

For the three months ended

September 30, 2020 and September 30, 2019, Crystal Financial LLC had net income of $6.0 million and $4.5 million, respectively, on gross income of $9.3 million and $13.3 million, respectively.

For the nine months

ended September 30, 2020 and September 30, 2019, Crystal Financial LLC had net income of $16.3 million and $20.2 million, respectively, on gross income of $32.9 million and $48.3 million, respectively.

timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions.

As such, and subject to fluctuations in Crystal Financial LLCs funded

commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that Crystal Financial LLC will be able to maintain consistent dividend payments to us.

NEF Holdings, LLC

On July 31, 2017,

we completed the acquisition of NEF Holdings, LLC (NEF), which conducts its business through its wholly-owned subsidiary Nations Equipment Finance, LLC.

NEF is an independent equipment finance company that provides senior secured loans

and leases primarily to U.S.

based companies.

We invested $209.9 million in cash to effect the transaction, of which $145.0 million was invested in the equity of NEF through our wholly-owned consolidated taxable subsidiary NEFCORP LLC and

our wholly-owned consolidated subsidiary NEFPASS LLC and $64.9 million was used to purchase certain leases and loans held by NEF through NEFPASS LLC.

Concurrent with the transaction, NEF refinanced its existing senior secured credit facility

into a $150.0 million non-recourse facility with an accordion feature to expand up to $250.0 million.

In September 2019, NEF amended the facility, increasing commitments to $214.0 million with

an accordion feature to expand up to $314.0 million and extended the maturity date of the facility to July 31, 2023.

At July 31, 2017, NEF also had two securitizations outstanding, with an issued note balance of $94.6 million,

which were later redeemed in 2018.

As of September 30, 2020, NEF had 141 funded equipment-backed leases and loans to 62 different

customers with a total net investment in leases and loans of approximately $192.3 million on total assets of $279.1 million.

As of December 31, 2019, NEF had 168 funded equipment-backed leases and loans to 78 different customers with

a total net investment in leases and loans of approximately $245.0 million on total assets of $304.2 million.

As of September 30, 2020 and December 31, 2019, the largest position

outstanding totaled $25.6 million and $26.9 million, respectively.

For the same periods, the average exposure per customer was $3.1 million and $3.1 million,

respectively.

NEFs credit facility, which is non-recourse to Solar Capital, had approximately $106.9 million and $128.2 million of borrowings outstanding at September 30, 2020 and

December 31, 2019, respectively.

For the three months ended September 30, 2020 and September 30, 2019, NEF had net income (loss) of $1.5 million and ($0.7) million, respectively, on gross income of $6.5 million and

outstanding ownership interest in SLR Credit Solutions (SLR Credit), f/k/a Crystal Financial LLC.

The remaining financial interest was held by various employees of SLR Credit, through their investment in Crystal Management LP.

had a diversified portfolio of 23 loans having a total par value of approximately $400 million at November 30, 2012 and a $275 million committed revolving credit facility.

On July 28, 2016, the Company purchased Crystal

Management LPs approximately 2% equity interest in SLR Credit for approximately $5.7 million.

Upon the closing of this transaction, the Company holds 100% of the equity interest in SLR Credit.

On September 30,

2016, Crystal Capital Financial Holdings LLC was dissolved.

As of March 11, 2021, total commitments to the revolving credit facility are $280 million.

As of March 31, 2021, SLR Credit had 30 funded commitments to 24 different issuers with a total par value of approximately

$344.4 million on total assets of $400.7 million.

As of December 31, 2020, SLR Credit had 30 funded commitments to 24 different issuers with total funded loans of approximately $404.1 million on total assets of

$433.9 million.

As of March 31, 2021 and December 31, 2020, the largest loan outstanding totaled $32.8 million and $45.0 million, respectively.

For the same periods, the average exposure per issuer was $14.4 million and

$16.8 million, respectively.

For the nine months ended September 30, 2020 and September 30, 2019, NEF had net loss of $0.4 million and $0.2 million, respectively, on gross income of $17.8 million and

SLR Credits credit facility, which is non-recourse to the Company, had approximately $140.5 million and $183.9 million of borrowings outstanding at

March 31, 2021 and December 31, 2020, respectively.

For the three months ended March 31, 2021 and 2020, SLR Credit had net income of $5.0 million and $1.9 million, respectively, on gross income of $9.7 million and

$11.5 million, respectively.

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As such, and subject to fluctuations in

NEFs funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that NEF will be able to maintain consistent dividend payments to us.

SLR Credits funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that SLR Credit will be able to maintain consistent dividend payments to us.

SLR Equipment Finance

2017, we completed the acquisition of NEF Holdings, LLC, which conducts its business through its wholly-owned subsidiary Nations Equipment Finance, LLC.

Effective February 25, 2021, Nations Equipment Finance, LLC and its related companies is

now known as SLR Equipment Finance (SLR Equipment).

SLR Equipment is an independent equipment finance company that provides senior secured loans and leases primarily to U.S.

based companies.

We invested $209.9 million in cash to

effect the transaction, of which $145.0 million was invested in the equity of SLR Equipment through our wholly-owned consolidated taxable subsidiary NEFCORP LLC and our wholly-owned consolidated subsidiary NEFPASS LLC and $64.9 million was

used to purchase certain leases and loans held by SLR Equipment through NEFPASS LLC.

Concurrent with the transaction, SLR Equipment refinanced its existing senior secured credit facility into a $150.0 million

non-recourse facility with an accordion feature to expand up to $250.0 million.

In September 2019, SLR Equipment amended the facility, increasing commitments to $214.0 million with an accordion

feature to expand up to $314.0 million and extended the maturity date of the facility to July 31, 2023.

At July 31, 2017, SLR Equipment also had two securitizations outstanding, with an issued note balance of $94.6 million, which

were later redeemed in 2018.

As of March 31, 2021, SLR Equipment had 132 funded equipment-backed leases and loans to 59 different

customers with a total net investment in leases and loans of approximately $188.4 million on total assets of $262.3 million.

As of December 31, 2020, SLR Equipment had 138 funded equipment-backed leases and loans to 61 different

customers with a total net investment in leases and loans of approximately $188.4 million on total assets of $263.4 million.

As of March 31, 2021 and December 31, 2020, the largest position outstanding totaled $19.1 million

and $25.1 million, respectively.

For the same periods, the average exposure per customer was $3.2 million and $3.1 million, respectively.

SLR Equipments credit facility, which is

non-recourse to the Company, had approximately $101.7 million and $100.6 million of borrowings outstanding at March 31, 2021 and December 31, 2020, respectively.

For the three months ended

March 31, 2021 and 2020, SLR Equipment had net income (loss) of ($0.3) million and $0.4 million, respectively, on gross income of $4.9 million and $5.9 million, respectively.

Due to timing and

non-cash items, there may be material differences between GAAP net income and cash available for distributions.

As such, and subject to fluctuations in SLR Equipments funded commitments, the timing of

originations, and the repayments of financings, the Company cannot guarantee that SLR Equipment will be able to maintain consistent dividend payments to us.

Kingsbridge Holdings, LLC

On November 3, 2020, the Company acquired 87.5% of Kingsbridge Holdings, LLC (KBH) through KBH Topco LLC (KBHT), a

newly formed Delaware corporation.

KBH is a residual focused independent mid-ticket lessor of equipment primarily to U.S.

investment grade companies.

The Company invested $216.6 million to

effect the transaction, of which $136.6 million was invested to acquire 87.5% of KBHTs equity and $80.0 million in KBHs debt.

The existing management team of KBH committed to continue to lead KBH after the

Post the transaction, the Company owns 87.5% of KBHT equity and the KBH management team owns the remaining 12.5% of KBHTs equity.

As of March 31, 2021, KBH had total assets of $748.4 million.

Recourse debt outstanding for KBH totaled $220.7 million at

March 31, 2021.

Non-recourse debt outstanding for KBH totaled $345.3 million at March 31, 2021.

As of December 31, 2020, KBH had total assets of $744.7 million.

recourse debt outstanding of $219.0 million as well as non-recourse debt outstanding of $335.9 million at December 31, 2020.

For the three months ended March 31, 2021, KBH had net

income of $2.3 million, on gross income of $58.1 million.

Due to timing and non-cash items, there may be material differences between GAAP net income and cash available for distributions.

such, and subject to fluctuations in KBHs funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that KBH will be able to maintain consistent dividend payments to us.

Critical Accounting Policies

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based on the input of the Investment Adviser, the respective independent valuation firm, if any, and the audit committee.

Investments in all asset classes are valued utilizing a market approach, an income approach, or both approaches, as appropriate.

accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946, may be valued using net asset value as a practical expedient for fair value.

The market approach

uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business).

The income approach uses valuation approaches to convert future amounts (for example, cash

flows or earnings) to a single present amount (discounted).

Investments in all asset classes are valued utilizing a market approach, an income approach,

or both approaches, as appropriate.

However, in accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946, may be valued using net asset value as a

practical expedient for fair value.

The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business).

The income approach uses valuation

approaches to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted).

The measurement is based on the value indicated by current market expectations about those future amounts.

In following these approaches, the types of factors that we may take into account

in fair value pricing our investments include, as relevant:

available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection

provisions, the nature and realizable value of any collateral, the

portfolio companys ability to make payments, its earnings and discounted cash flows, the markets in which the portfolio company does business, comparisons of financial ratios of peer

companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors.

When available, broker quotations and/or quotations provided by pricing services are considered as an input in

the valuation process.

For the nine months ended September 30, 2020, there has been no change to the Companys valuation approaches or techniques and the nature of the related inputs considered in the valuation process.

Accounting Standards Codification (ASC) Topic 820 classifies the inputs used to measure these fair values into the following

Quoted prices in active markets for identical assets or liabilities, accessible by the

Company at the measurement date.

Quoted prices for similar assets or liabilities in active markets, or

quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

In following these

approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant:

available current market data, including relevant and applicable market trading and transaction comparables, applicable market

yields and multiples, security covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio companys ability to make payments, its earnings and discounted cash flows, the markets in which the

portfolio company does business, comparisons of financial ratios of peer companies that are public, M&A comparables, our principal market (as the reporting entity) and enterprise values, among other factors.

When available, broker quotations

and/or quotations provided by pricing services are considered as an input in the valuation process.

For the three months ended March 31, 2021, there has been no change to the Companys valuation approaches or techniques and the nature of

the related inputs considered in the valuation process.

Accounting Standards Codification (ASC) Topic 820 classifies the

inputs used to measure these fair values into the following hierarchy:

Quoted prices in active markets

for identical assets or liabilities, accessible by the Company at the measurement date.

Quoted prices

for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Unobservable inputs for the asset or liability.

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Capital structuring fees are recorded as other income when

The typically higher yields and interest rates on PIK securities, to the extent we invested, reflects the payment deferral and

increased credit risk associated with such instruments and that such investments may represent a significantly higher credit risk than coupon loans.

PIK securities may have unreliable valuations because their continuing accruals require continuing

judgments about the collectability of the deferred payments and the value of any associated collateral.

PIK interest has the effect of generating investment income and increasing the incentive fees payable at a compounding rate.

In addition, the

deferral of PIK interest also increases the loan-to-value ratio at a compounding rate.

PIK securities create the risk that incentive fees will be paid to the Investment

Adviser based on non-cash accruals that ultimately may not be realized, but the Investment Adviser will be under no obligation to reimburse the Company for these fees.

For the three and nine months ended

September 30, 2020, capitalized PIK income totaled $1.6 million and $3.0 million, respectively.

For the three and nine months ended September 30, 2019, capitalized PIK income totaled $0.3 million and $1.0 million,

respectively.

Net Realized Gain or Loss and Net Change in Unrealized Gain or Loss

We generally measure realized gain or loss by the difference between the net proceeds from the repayment or sale and the amortized cost basis

of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized origination or commitment fees and prepayment penalties.

The net change in unrealized gain or loss reflects the change in

portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gain or loss, when gains or losses are realized.

Gains or losses on investments are calculated by using the specific identification

Capital, a U.S.

The typically higher yields and interest rates on PIK securities, to the extent we invested,

reflects the payment deferral and increased credit risk associated with such instruments and that such investments may represent a significantly higher credit risk than coupon loans.

PIK securities may have unreliable valuations because their

continuing accruals require continuing judgments about the collectability of the deferred payments and the value of any associated collateral.

PIK interest has the effect of generating investment income and increasing the incentive fees payable at a

compounding rate.

In addition, the deferral of PIK interest also increases the loan-to-value ratio at a compounding rate.

PIK securities create the risk that incentive

fees will be paid to the Investment Adviser based on non-cash accruals that ultimately may not be realized, but the Investment Adviser will be under no obligation to reimburse the Company for these fees.

the three months ended March 31, 2021 and 2020, capitalized PIK income totaled $1.7 million and $0.2 million, respectively.

Realized Gain or Loss and Net Change in Unrealized Gain or Loss

We generally measure realized gain or loss by the difference

between the net proceeds from the repayment or sale and the amortized cost basis of the investment, without regard to unrealized appreciation or depreciation previously recognized, but considering unamortized origination or commitment fees and

prepayment penalties.

The net change in unrealized gain or loss reflects the change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gain or loss, when gains or losses are realized.

Gains or losses on investments are calculated by using the specific identification method.

SLR Investment Corp., a U.S.

corporation, has elected to be treated, and intends to qualify annually, as a RIC under Subchapter M of the Code.

In order to qualify for U.S.

federal income taxation as a RIC, the Company is required, among other things, to timely

distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each year.

Depending on the level of taxable income earned in a given tax year, we may choose to carry forward taxable income in excess of

current year distributions into the next tax year and pay a 4% excise tax on such income, as required.

To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year

distributions, the Company accrues an estimated excise tax, if any, on estimated excess taxable income.

federal income taxation as a RIC, the Company is required, among other things, to timely distribute to its stockholders at least 90% of investment company taxable income, as defined by the Code, for each year.

on the level of taxable income earned in a given tax year, we may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a nondeductible 4% U.S.

federal excise tax on such income, as required.

To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year distributions, the Company accrues an estimated excise tax, if any, on estimated excess taxable income.

Recent Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework

Changes to the Disclosure Requirements for Fair Value Measurement.

The amendments in ASU 2018-13 modify and eliminate certain disclosure requirements on fair value measurements in Topic 820, Fair Value

ASU 2018-13 is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Early adoption is permitted.

The Company has

adopted ASU 2018-13 and determined that the adoption has not had a material impact on its consolidated financial statements and disclosures.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848).

The amendments in ASU 2020-04 provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met.

March 2020, the FASB issued Accounting Standards Update No.

2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The

guidance provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships and other transactions, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be

discontinued because of the reference rate reform.

ASU 2020-04 is effective for all entities as of March 12, 2020 through December 31, 2022.

The Company is currently evaluating the impact of adopting ASU 2020-04 on its

consolidated financial statements and disclosures.

The Company is evaluating the potential impact that the

adoption of this guidance will have on the Companys financial statements.

RESULTS OF OPERATIONS

Results comparisons are for the three and nine months ended September 30, 2020 and 2019:

Results comparisons are for the three months ended March 31, 2021 and March 31, 2020:

Investment Income

For the three and nine

months ended September 30, 2020, gross investment income totaled $28.9 million and $90.4 million, respectively.

For the three and nine months ended September 30, 2019, gross investment income totaled $39.7 million and

$117.7 million, respectively.

The decrease in gross investment income for the year over year three and nine month periods was primarily due to a reduction in portfolio yield, mainly as a result of the approximately 175 basis point decrease in

average LIBOR year over year, on a smaller income producing investment portfolio on average.

Expenses totaled $14.6 million and $46.1 million, respectively, for the three and nine months ended September 30, 2020, of which

For the three months

ended March 31, 2021 and 2020, gross investment income totaled $35.9 million and $32.9 million, respectively.

The increase in gross investment income for the year over year three month periods was primarily due to growth in the income

producing portfolio.

Expenses totaled $20.4 million and $17.1 million, respectively, for the three months ended March 31, 2021 and 2020, of which

$10.7 million and $7.8 million, respectively, were base management fees and performance-based incentive fees and $7.2 million and $7.0 million, respectively, were interest and other credit facility expenses.

Administrative

services and other general and administrative expenses totaled $1.9 million and $6.0 million, respectively, for the three and nine months ended September 30, 2020.

Expenses totaled $21.3 million and $62.3 million,

respectively, for the three and nine months ended September 30, 2019, of which $11.3 million and $33.9 million, respectively, were base management fees and performance-based incentive fees and $7.5 million and $22.0 million,

respectively, were interest and other credit facility expenses.

Administrative services and other general and administrative expenses totaled $2.4 million and $6.5 million, respectively, for the three and nine months ended

September 30, 2019.

Expenses generally consist of management and performance-based incentive fees, interest and other credit facility expenses, administrative services fees, insurance expenses, legal fees, directors fees, transfer

agency fees, printing and proxy expenses, audit and tax services expenses, and other general and administrative expenses.

Interest and other credit facility expenses generally consist of interest, unused fees, agency fees and loan origination fees,

if any, among others.

The decrease in expenses for the three and nine months ended September 30, 2020 versus the three and nine months ended September 30, 2019 was primarily due to lower management and incentive fees resulting from a

reduction in portfolio yield on a smaller income producing investment portfolio on average as well as lower interest expense due to reductions in LIBOR.

services and other general and administrative expenses totaled $2.5 million and $2.3 million, respectively, for the three months ended March 31, 2021 and 2020.

Expenses generally consist of management and performance-based incentive

fees, interest and other credit facility expenses, administrative services fees, insurance expenses, legal fees, directors fees, transfer agency fees, printing and proxy expenses, audit and tax services expenses, and other general and

administrative expenses.

Interest and other credit facility expenses generally consist of interest, unused fees, agency fees and loan origination fees, if any, among others.

The increase in expenses for the three months ended March 31, 2021

versus the three months ended March 31, 2020 was primarily due to higher management and incentive fees resulting from a larger income producing investment portfolio on average.

Net Investment Income

The Companys net investment income totaled $15.5 million and $15.9 million, or $0.37 and $0.38, per average share,

respectively, for the three and nine months ended September 30, 2020.

The Companys net investment income totaled $18.4 million and $55.3 million, or $0.44 and $1.31, per average share, respectively, for the three and nine months

ended September 30, 2019.

respectively, for the three months ended March 31, 2021 and 2020.

Net Realized Gain (Loss)

The Company had investment sales and prepayments totaling approximately $60 million and $289 million, respectively, for the three and

nine months ended September 30, 2020.

Net realized losses over the same periods were $0.3 million and $25.0 million, respectively.

The Company had investment sales and prepayments totaling approximately $111 million and

$276 million, respectively, for the three and nine months ended September 30, 2019.

Net realized losses over the same periods were ($0.1) million and ($0.5) million, respectively.

Net realized losses for the three month period ended

September 30, 2020 was primarily related to the termination of warrants.

Net realized losses for the nine month period ended September 30, 2020 were primarily related to the exit of our investment in IHS Intermediate, Inc.

losses for the three months ended September 30, 2019 were primarily related to the termination of warrants.

Net realized losses for the nine months ended September 30, 2019 were primarily related to the exit of our investments in ARK Real

Estate Partners.

Net Change in Unrealized Gain (Loss)

For the three and nine months ended September 30, 2020, net change in unrealized gain (loss) on the Companys assets and liabilities

totaled $4.6 million and ($22.1) million, respectively.

For the three and nine months ended September 30, 2019, net change in unrealized gain (loss) on the Companys assets and liabilities totaled ($4.7) million and $3.3 million,

respectively.

Net unrealized gain for the three months ended September 30, 2020 is primarily due to appreciation in the value of our investments in NEF Holdings LLC, Crystal Financial LLC and PhyMed Management LLC, among others, partially

offset by appreciation on our 2022 Unsecured Notes.

Net unrealized loss for the nine months ended September 30, 2020 is primarily due to depreciation in the value of our investments in NEF Holdings LLC, Rug Doctor, Crystal Financial LLC, PhyMed

Management LLC and Bishop Lifting Products, Inc., among others, partially offset by the reversal of previously recognized unrealized depreciation in the value of our investment in IHS Intermediate, Inc.

as well as depreciation on our 2022 Unsecured

Net unrealized loss for the three months ended September 30, 2019 is primarily due to depreciation in the value of our investments in IHS Intermediate, Inc., SOAGG LLC and NEF Holdings LLC, among others, partially offset by appreciation

on our investments in PPT Management Holdings, LLC and iCIMS, Inc., among others.

Net unrealized gain for the nine months ended September 30, 2019 is primarily due to appreciation in the value of our investments in Crystal Financial LLC, Rug

Doctor and PPT Management Holdings, LLC, among others, partially offset by depreciation on our investments in IHS Intermediate, Inc., American Teleconferencing Services, Ltd.

and Aegis Toxicology Sciences Corporation, among others.

The year over

year net change in unrealized loss for the nine month period ended September 30, 2020 is impacted by uncertainty due to the COVID-19 pandemic and its effect on market yields and fundamental portfolio

company performance.

The Company had investment sales and prepayments totaling approximately $67 million and $200 million, respectively, for the three

months ended March 31, 2021 and 2020.

Net realized gains (losses) over the same periods were ($0.4) million and $0.03 million, respectively.

Net realized losses for the three months ended March 31, 2021 were generally related to the

sale of our legacy investment in B.

Riley Financial, Inc.

Net realized gains for the three months ended March 31, 2020 were immaterial.

Change in Unrealized Gain (Loss)

For the three months ended March 31, 2021 and 2020, net change in unrealized gain (loss) on the

Companys assets and liabilities totaled $6.4 million and ($91.4) million, respectively.

Net unrealized gain for the three months ended March 31, 2021 is primarily due to the reversal of previously recognized depreciation in our

investment in B.

Riley Financial, Inc.

as well as appreciation in the value of our investments in Genmark Diagnostics, Inc., SLR Credit Solutions and Senseonics Holdings, Inc., among others, partially offset by the reversal of previously recognized

appreciation in our investment in Cardiva Medical, Inc.

as well as depreciation in the value of our investment in SOAGG, LLC, among others.

Net unrealized loss for the three months ended March 31, 2020 is primarily due to depreciation in the

value of our investments in SLR Credit Solutions, SLR Equipment Finance, IHS Intermediate, Inc.

and Rug Doctor, among others, partially offset by depreciation on our 2022 Unsecured Notes.

Net Increase (Decrease) in Net Assets From Operations

For the three and nine months ended September 30, 2020, the Company had a net increase (decrease) in net assets resulting from operations

of $18.6 million and ($2.8) million, respectively.

For the three months ended March 31, 2021 and 2020, the Company had a net increase (decrease) in net assets resulting from operations of

$21.5 million and ($75.5) million, respectively.

For the same periods, earnings (loss) per average share were $0.51 and ($1.79), respectively.

For the three and nine months ended September 30, 2019, the Company had a net increase in net

assets resulting from operations of $13.7 million and $58.2 million, respectively.

For the same periods, earnings per average share were $0.32 and $1.38, respectively.

LIQUIDITY AND CAPITAL RESOURCES

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2026 Unsecured Notes (collectively the Credit Facilities), through cash flows from operations, investment sales, prepayments of senior and subordinated loans, income earned on investments and cash equivalents, and periodic follow-on equity and/or debt offerings.

As of September 30, 2020, we had a total of $595.0 million of unused borrowing capacity under the Credit Facilities, subject to borrowing base limits.

As of March 31, 2021, we had a total of $405.0 million of unused borrowing capacity under the Credit Facilities, subject to borrowing base limits.

We may from time to time issue equity and/or debt securities in either public or private offerings.

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investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders, or for other general corporate purposes.

On February 12, 2020, a new lender to the Company executed a commitment increase to our

Credit Facility providing for an additional $75.0 million of revolving credit, bringing our Credit Facilitys total revolving credit capacity to $545.0 million.

On December 18, 2019, the Company closed a private offering of $125 million of the 2024 Unsecured Notes with a fixed interest rate

of 4.20% and a maturity date of December 15, 2024.

Interest on the 2024 Unsecured Notes is due semi-annually on June 15 and December 15.

On February 12, 2020, a new lender to the Company executed a commitment increase to our Credit Facility providing for an additional

$75.0 million of revolving credit, bringing our Credit Facilitys total revolving credit capacity to $545.0 million.

December 18, 2019, the Company closed a private offering of $125 million of the 2024 Unsecured Notes with a fixed interest rate of 4.20% and a maturity date of December 15, 2024.

Interest on the 2024 Unsecured Notes is due

semi-annually on June 15 and December 15.

The 2024 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

On December 18, 2019, the Company closed a private offering of $75 million of the 2026 Unsecured Notes with a fixed interest

rate of 4.375% and a maturity date of December 15, 2026.

On December 18, 2019, the Company closed a private offering of $75 million of the 2026 Unsecured Notes with a fixed interest rate of

4.375% and a maturity date of December 15, 2026.

Interest on the 2026 Unsecured Notes is due semi-annually on June 15 and December 15.

The 2026 Unsecured Notes were issued in a private placement only to qualified institutional

On August 28, 2019, the Company repaid its existing senior secured credit agreement due September 2021 and entered into the

new senior secured credit agreement (the Credit Facility).

The Credit Facility was originally composed of $470 million of revolving credit and $75 million of term loans, but was expanded to $545 million of revolving credit

and $75 million of term loans in February 2020.

Borrowings generally bear interest at a rate per annum equal to the base rate plus a range of 2.00-2.25% or the alternate base rate plus 1.00%-1.25%.

The 2026 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

On August 28, 2019, the Company repaid its existing senior secured credit agreement due September 2021 and entered into the new senior

secured credit agreement (the Credit Facility).

The Credit Facility is composed of $470 million of revolving credit and $75 million of term loans.

Borrowings generally bear interest at a rate per annum equal to the base rate

plus a range of 2.00-2.25% or the alternate base rate plus 1.00%-1.25%.

The Credit Facility has no LIBOR floor requirement.

The Credit Facility matures in August 2024 and includes ratable amortization in the final year.

On December 28, 2017, the Company closed a private offering of $21 million of the 2022 Tranche C Notes with a fixed interest rate of

4.50% and a maturity date of December 28, 2022.

The Credit Facility matures in August 2024

and includes ratable amortization in the final year.

On December 28, 2017, the Company closed a private offering of $21 million

of the 2022 Tranche C Notes with a fixed interest rate of 4.50% and a maturity date of December 28, 2022.

Interest on the 2022 Tranche C Notes is due semi-annually on June 28 and December 28.

The 2022 Tranche C Notes were issued in a private placement only to qualified institutional buyers.

On November 22, 2017, we issued $75 million in aggregate principal amount of publicly registered 2023 Unsecured Notes for net

proceeds of $73.8 million.

The 2022 Tranche C Notes

were issued in a private placement only to qualified institutional buyers.

On November 22, 2017, we issued $75 million in aggregate principal amount of

publicly registered 2023 Unsecured Notes for net proceeds of $73.8 million.

Interest on the 2023 Unsecured Notes is paid semi-annually on January 20 and July 20, at a fixed rate of 4.50% per year, commencing on January 20, 2018.

The 2023 Unsecured Notes mature on

January 20, 2023.

On February 15, 2017, the Company closed a private offering of $100 million of the 2022 Unsecured Notes

with a fixed interest rate of 4.60% and a maturity date of May 8, 2022.

The 2023 Unsecured Notes mature on January 20, 2023.

On February 15, 2017, the Company closed a private

offering of $100 million of the 2022 Unsecured Notes with a fixed interest rate of 4.60% and a maturity date of May 8, 2022.

Interest on the 2022 Unsecured Notes is due semi-annually on May 8 and November 8.

The 2022 Unsecured Notes were issued in a private placement only to qualified

institutional buyers.

On November 8, 2016, the Company closed a private offering of $50 million of the 2022 Unsecured Notes

with a fixed interest rate of 4.40% and a maturity date of May 8, 2022.

The 2022 Unsecured

Notes were issued in a private placement only to qualified institutional buyers.

On November 8, 2016, the Company closed a private

offering of $50 million of the 2022 Unsecured Notes with a fixed interest rate of 4.40% and a maturity date of May 8, 2022.

Interest on the 2022 Unsecured Notes is due semi-annually on May 8 and November 8.

The 2022 Unsecured Notes were issued in a private placement only to qualified

institutional buyers.

On January 11, 2013, the Company closed its most recent follow-on

public equity offering of 6.3 million shares of common stock raising approximately $146.9 million in net proceeds.

The primary uses of the funds raised were for investments in portfolio companies, reductions in revolving debt outstanding

and for other general corporate purposes.

The 2022 Unsecured

Notes were issued in a private placement only to qualified institutional buyers.

On January 11, 2013, the Company closed its most

recent follow-on public equity offering of 6.3 million shares of common stock raising approximately $146.9 million in net proceeds.

The primary uses of the funds raised were for investments in

portfolio companies, reductions in revolving debt outstanding and for other general corporate purposes.

Cash Equivalents

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We held approximately $350 million in cash equivalents as of

September 30, 2020.

March 31, 2021.

Unsecured Notes

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The 2026 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

On December 28, 2017, the Company closed a private offering of $21 million of the

2022 Tranche C Notes with a fixed interest rate of 4.50% and a maturity date of December 28, 2022.

On December 28, 2017, the Company closed a private offering of $21 million of the 2022 Tranche C Notes with a fixed interest rate of

4.50% and a maturity date of December 28, 2022.

Interest on the 2022 Tranche C Notes is due semi-annually on June 28 and December 28.

The 2022 Tranche C Notes were issued in a private

placement only to qualified institutional buyers.

On November 22, 2017, we issued $75 million in aggregate principal amount of

publicly registered 2023 Unsecured Notes for net proceeds of $73.8 million.

The 2022 Tranche C Notes were issued in a private placement only to qualified

institutional buyers.

On November 22, 2017, we issued $75 million in aggregate principal amount of publicly registered 2023

Unsecured Notes for net proceeds of $73.8 million.

Interest on the 2023 Unsecured Notes is paid semi-annually on January 20 and July 20, at a fixed rate of 4.50% per year, commencing on January 20, 2018.

The 2023 Unsecured Notes mature on January 20, 2023.

The 2023 Unsecured Notes

mature on January 20, 2023.

On February 15, 2017, the Company closed a private offering of

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The Credit Facility contains certain customary affirmative and negative

covenants and events of default.

In addition, the Credit Facility contains certain financial covenants that among other things, requires the Company to maintain a minimum shareholders equity and a minimum asset coverage ratio.

September 30, 2020, outstanding USD equivalent borrowings under the Credit Facility totaled $75.0 million, composed of $0 of revolving credit and $75.0 million of term loans.

covenants and events of

In addition, the Credit Facility contains certain financial covenants that among other things, requires the Company to maintain a minimum shareholders equity and a minimum asset

coverage ratio.

At March 31, 2021, outstanding USD equivalent borrowings under the Credit Facility totaled $235.0 million, composed of $160.0 million of revolving credit and $75.0 million of term loans.

On September 26, 2018, NEFPASS SPV LLC, a newly formed wholly-owned subsidiary of NEFPASS LLC, as borrower entered into the NEFPASS

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The NEFPASS Facility also includes usual and customary events of default for credit facilities of this nature.

There were no borrowings outstanding as of September 30, 2020.

There were $30.0 million of borrowings outstanding as of March 31, 2021.

Certain covenants on our issued debt may restrict our business activities, including limitations that could hinder our ability to finance

additional loans and investments or to make the distributions required to maintain our status as a RIC under Subchapter M of the Code.

At September 30, 2020, the Company was in compliance with all financial and operational covenants required by

our Credit Facilities.

At March 31, 2021, the Company was in compliance with all financial and operational covenants required by our

Credit Facilities.

Contractual Obligations

A summary of our significant contractual payment obligations is as follows as of September 30, 2020:

A summary of our significant contractual payment obligations is as follows as of March 31, 2021:

Payments Due by Period (in millions)

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Unsecured senior notes

As of September 30, 2020, we had a total of $595.0 million of unused borrowing capacity under our

As of March 31, 2021, we had a total of $405.0 million of unused borrowing capacity under our

revolving credit facilities, subject to borrowing base limits.

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Senior Securities

Information about our senior securities is shown in the following table (in thousands) as of the quarter ended September 30, 2020 and each

year ended December 31 for the past ten years, unless otherwise noted.

Information about our senior securities is shown in the following table (in thousands) as of the quarter ended March 31, 2021

and each year ended December 31 for the past ten years, unless otherwise noted.

The indicates information which the SEC expressly does not require to be disclosed for certain types of senior securities.

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Revolving Credit Facility

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

Class and Year

Outstanding(1)

2022 Unsecured Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

2022 Tranche C Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

2023 Unsecured Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

2024 Unsecured Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

2026 Unsecured Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

2042 Unsecured Notes

Senior Secured Notes

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

NEFPASS Facility

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

SSLP Facility

Total Senior Securities

Fiscal 2020 (through September 30, 2020)

Fiscal 2021 (through March 31, 2021)

Total amount of each class of senior securities outstanding (in thousands) at the end of the period presented.

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In order to determine the specific Asset Coverage Per Unit for each class of debt, the total Asset Coverage Per Unit is allocated based on the amount outstanding in each class of debt at the end of the period.

September 30, 2020, asset coverage was 263.4%.

As of March 31,

2021, asset coverage was 220.4%.

The amount to which such class of senior security would be entitled upon the involuntary liquidation of the

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We have also entered into two contracts under which we have future commitments:

the Advisory Agreement, pursuant to which Solar Capital

the Advisory Agreement, pursuant to which SLR Capital

Partners, LLC has agreed to serve as our investment adviser, and the Administration Agreement, pursuant to which the Administrator has agreed to furnish us with the facilities and administrative services necessary to conduct our day-to-day operations and provide on our behalf managerial assistance to those portfolio companies to which we are required to provide such assistance.

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Accordingly, the Company had the following unfunded capital commitments at

September 30, 2020 and December 31, 2019, respectively:

September 30,

March 31, 2021 and December 31, 2020, respectively:

(in millions)

Crystal Financial LLC*

Kindred Biosciences, Inc

SLR Credit Solutions*

Smile Doctors LLC

High Street Insurance Partners, Inc

One Touch Direct, LLC

Cardiva Medical, Inc

Kindred Biosciences, Inc

Neuronetics, Inc

Soleo Health Holdings, Inc

SOC Telemed, Inc

PQ Bypass, Inc

NEF Holdings, Inc

Centrexion Therapeutics, Inc

SLR Equipment Finance

Atria Wealth Solutions, Inc

Cerapedics, Inc

Foundation Consumer Brands, LLC

Basic Fun, Inc

Sentry Data Systems, Inc

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Delphinus Medical Technologies, Inc

Enhanced Capital Group, LLC

Rubius Therapeutics, Inc

Phynet Dermatology LLC

Altern Marketing, LLC

Varilease Finance, Inc

MRI Software LLC

Solara Medical Supplies, Inc

RS Energy Group U.S., Inc

Alimera Sciences, Inc

Soleo Health Holdings, Inc

Cardiva Medical, Inc

Centrexion Therapeutics, Inc

Total Commitments

* The Company controls the funding of the Crystal Financial LLC commitment and may cancel it

at its discretion.

The credit agreements of the above loan commitments contain customary lending provisions and/or are subject to the

portfolio companys achievement of certain milestones that allow relief to the Company from funding obligations for previously made commitments in instances where the underlying company experiences materially adverse events that affect the

financial condition or business outlook for the company.

Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the Company.

September 30, 2020 and December 31, 2019, the Company had sufficient cash available and/or liquid securities available to fund its commitments.

The Company controls the funding of the SLR Credit Solutions commitment and may cancel it at its discretion.

The credit agreements of the above loan commitments contain customary lending provisions

and/or are subject to the portfolio companys achievement of certain milestones that allow relief to the Company from funding obligations for previously made commitments in instances where the underlying company experiences materially adverse

events that affect the financial condition or business outlook for the company.

Since these commitments may expire without being drawn upon, unfunded commitments do not necessarily represent future cash requirements or future earning assets for the

As of March 31, 2021 and December 31, 2020, the Company had sufficient cash available and/or liquid securities available to fund its commitments.

In the normal course of its business, we invest or trade in various financial instruments and may enter into various investment activities

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Date Declared

November 5, 2020

December 17, 2020

January 5, 2021

August 4, 2020

September 17, 2020

October 2, 2020

June 23, 2021

33 unchanged sentences

available for such distributions, we may in the future decide to retain such capital gains for investment.

We maintain an opt

out dividend reinvestment plan for our common stockholders.

As a result, if we declare a distribution, then stockholders cash distributions will be automatically reinvested in additional shares of our common stock, unless they

specifically opt out of the dividend reinvestment plan so as to receive cash distributions.

We may not be able to achieve

operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time.

In addition, due to the asset coverage test applicable to us as a business development company, we may

in the future be limited in our ability to make distributions.

Also, our revolving credit facility may limit our ability to declare distributions if we default under certain provisions.

If we do not distribute a certain percentage of our income

annually, we will suffer adverse tax consequences, including possible loss of the tax benefits available to us as a regulated investment company.

In addition, in accordance with GAAP and tax regulations, we include in income certain amounts that we

have not yet received in cash, such as contractual payment-in-kind interest, which represents contractual interest added to the loan balance that becomes due at the end

of the loan term, or the accrual of original issue or market discount.

Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our

investment company taxable income to obtain tax benefits as a regulated investment company.

With respect to the distributions to

stockholders, income from origination, structuring, closing and certain other upfront fees associated with investments in portfolio companies are treated as taxable income and accordingly, distributed to stockholders.

We maintain an opt out dividend reinvestment plan for our common stockholders.

As a result, if we declare a distribution, then stockholders cash distributions will be automatically reinvested in additional shares of our common stock, unless they specifically opt out of the dividend reinvestment plan so as to

receive cash distributions.

We may not be able to achieve operating results that will allow us to make distributions at a specific level

or to increase the amount of these distributions from time to time.

In addition, due to the asset coverage test applicable to us as a business development company, we may in the future be limited in our ability to make distributions.

revolving credit facility may limit our ability to declare distributions if we default under certain provisions.

If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of

the tax benefits available to us as a regulated investment company.

In addition, in accordance with GAAP and tax regulations, we include in income certain amounts that we have not yet received in cash, such as contractual payment-in-kind interest, which represents contractual interest added to the loan balance that becomes due at the end of the loan term, or the accrual of original issue or

market discount.

Since we may recognize income before or without receiving cash representing such income, we may have difficulty meeting the requirement to distribute at least 90% of our investment company taxable income to obtain tax benefits as a

regulated investment company.

With respect to the distributions to stockholders, income from origination, structuring, closing and

certain other upfront fees associated with investments in portfolio companies are treated as taxable income and accordingly, distributed to stockholders.

Related Parties

1 unchanged sentence

number of business relationships with affiliated or related parties, including the following:

We have entered into the Advisory Agreement with Solar Capital Partners.

We have entered into the Advisory Agreement with SLR Capital Partners.

Gross, our Chairman, Co-Chief Executive Officer and President and Mr.

2 unchanged sentences

In addition, Mr.

Peteka, our Chief Financial Officer, Treasurer and Secretary serves as the Chief Financial Officer for Solar Capital

Peteka, our Chief Financial Officer, Treasurer and Secretary serves as the Chief Financial Officer for SLR Capital Partners.

The Administrator provides us with the office facilities and administrative services necessary to conduct day-to-day operations pursuant to our Administration Agreement.

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We have entered into a license agreement with the Investment Adviser, pursuant to which the Investment Adviser

has granted us a non-exclusive, royalty-free license to use the name Solar Capital.

The Investment Adviser may also manage other funds in the future that may have investment

mandates that are similar, in whole and in part, with ours.

For example, the Investment Adviser presently serves as investment adviser to Solar Senior Capital Ltd., a publicly traded BDC, which focuses on investing in senior secured loans, including

first lien and second lien debt instruments, as well as SCP Private Credit Income BDC LLC, an unlisted BDC that focuses on investing primarily in senior secured loans, including non-traditional asset-based

loans and first lien loans.

has granted us a non-exclusive, royalty-free license to use the licensed marks Solar and SLR.

The Investment Adviser may also manage other funds in the future that may have investment mandates that are similar, in whole and in part,

For example, the Investment Adviser presently serves as investment adviser to SLR Senior Investment Corp., a publicly traded BDC, which focuses on investing in senior secured loans, including first lien and second lien debt instruments,

as well as SCP Private Credit Income BDC LLC, an unlisted BDC that focuses on investing primarily in senior secured loans, including non-traditional asset-based loans and first lien loans and SLR HC BDC LLC,

an unlisted BDC whose principal focus is to invest directly and indirectly in senior secured loans and other debt instruments typically to middle market companies within the healthcare industry.

In addition, Michael S.

Gross, our Chairman, Co-Chief Executive Officer and President, Bruce Spohler, our Co-Chief Executive Officer and

Chief Operating Officer, and Richard L.

Peteka, our Chief Financial Officer, serve in similar capacities for Solar Senior Capital Ltd.

and SCP Private Credit Income BDC LLC.

The Investment Adviser and certain investment advisory affiliates may

determine that an investment is appropriate for us and for one or more of those other funds.

In such event, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that

we should invest side-by-side with one or more other funds.

Any such investments will be made only to the extent permitted by applicable law and interpretive positions

of the SEC and its staff, and consistent with the Investment Advisers allocation procedures.

On June 13, 2017, the Adviser received an exemptive order that permits the Company to participate in

negotiated co-investment transactions with certain affiliates, in a manner consistent with the Companys investment objective, positions, policies, strategies and restrictions as well as

regulatory requirements and other pertinent factors, and pursuant to various conditions (the Order).

If the Company is unable to rely on the Order for a particular opportunity, such opportunity will be allocated first to the entity whose

investment strategy is the most consistent with the opportunity being allocated, and second, if the terms of the opportunity are consistent with more than one entitys investment strategy, on an alternating basis.

Although the Advisers

investment professionals will endeavor to allocate investment opportunities in a fair and equitable manner, the Company and its stockholders could be adversely affected to the extent investment opportunities are allocated among us and other

investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors and members of the Adviser.

party transactions may occur among Solar Capital Ltd., Crystal Financial LLC, Equipment Operating Leases LLC, Loyer Capital LLC and NEF Holdings LLC.

These transactions may occur in the normal course of business.

No administrative fees are paid to

Solar Capital Partners by Crystal Financial LLC, Equipment Operating Leases LLC, Loyer Capital LLC or NEF Holdings LLC.

In addition, we

have adopted a formal code of ethics that governs the conduct of our officers and directors.

Gross, our Chairman, Co-Chief Executive Officer and President, Bruce Spohler, our Co-Chief Executive Officer and Chief Operating Officer, and Richard L.

Peteka, our Chief Financial Officer, serve

in similar capacities for SLR Senior Investment Corp., SCP Private Credit Income BDC LLC and SLR HC BDC LLC.

The Investment Adviser and certain investment advisory affiliates may determine that an investment is appropriate for us and for one or more

of those other funds.

In such event, depending on the availability of such investment and other appropriate factors, the Investment Adviser or its affiliates may determine that we should invest side-by-side with one or more other funds.

Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the

Investment Advisers allocation procedures.

On June 13, 2017, the Adviser received an exemptive order that permits the Company to participate in negotiated co-investment transactions with

certain affiliates, in a manner consistent with the Companys investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, and pursuant to various conditions (the

If the Company is unable to rely on the Order for a particular opportunity, such opportunity will be allocated first to the entity whose investment strategy is the most consistent with the opportunity being allocated, and second,

if the terms of the opportunity are consistent with more than one entitys investment strategy, on an alternating basis.

Although the Advisers investment professionals will endeavor to allocate investment opportunities in a fair and

equitable manner, the Company and its stockholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors

and members of the Adviser.

Related party transactions may occur among SLR Investment Corp., SLR Credit Solutions, Equipment Operating

Leases LLC, Kingsbridge Holdings, LLC, Loyer Capital LLC, SLR Business Credit, SLR Healthcare ABL and SLR Equipment Finance.

transactions may occur in the normal course of business.

No administrative or other fees are paid to SLR Capital Partners by SLR Credit Solutions, Equipment Operating Leases LLC, Kingsbridge

Holdings, LLC, Loyer Capital LLC, SLR Business Credit, SLR Healthcare ABL or SLR Equipment Finance.

In addition, we have adopted a formal

code of ethics that governs the conduct of our officers and directors.

Our officers and directors also remain subject to the duties imposed by both the 1940 Act and the Maryland General Corporation Law.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements