What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-03 compared with 2021-08-03 · 694 added, 701 removed, 1733 unchanged (45% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

June 30, 2021

September 30,

Investments at fair value:

32 unchanged sentences

Three months ended

Six months ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine months ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

INVESTMENT INCOME:

14 unchanged sentences

Net investment income

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

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

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:

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

(gain) loss on debt:

Companies less than 5% owned

Companies more than 25% owned

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

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

NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS

5 unchanged sentences

Three months ended

Six months ended

June 30, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Nine months ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Increase (decrease) in net assets resulting from operations:

6 unchanged sentences

Capital transactions (see note 12) :

Net increase in net assets resulting from capital transactions

Net increase (decrease) in net assets resulting from capital transactions

Total increase (decrease) in net assets

2 unchanged sentences

Capital stock activity (see note 12) :

Net increase from capital stock activity

Net increase (decrease)from capital stock activity

See notes to consolidated financial statements.

2 unchanged sentences

(in thousands)

Six months ended

June 30, 2021

June 30, 2020

Nine months ended

September 30, 2021

September 30, 2020

Cash Flows from Operating Activities:

10 unchanged sentences

Capitalization of

payment-in-kind interest

payment-in-kind income

Collections of

payment-in-kind interest

payment-in-kind income

Receivable for investments sold

13 unchanged sentences

Deferred financing costs

Proceeds from issuance of unsecured debt

Proceeds from secured borrowings

9 unchanged sentences

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited)

June 30, 2021

thousands, except share/unit amounts)

September 30, 2021

(in thousands, except share/unit amounts)

Senior Secured Loans 105.4%

6 unchanged sentences

Communications Equipment

American Teleconferencing Services, Ltd.**

Communications Equipment

AmeriMark Intermediate Holdings, LLC(18)

Internet & Catalog Retail

Atria Wealth Solutions, Inc.

5 unchanged sentences

Diversified Consumer Services

Community Brands ParentCo, LLC (f/k/a Ministry Brands)

Enhanced Permanent Capital, LLC(3)

2 unchanged sentences

Personal Products

Inszone Mid, LLC

Kid Distro Holdings, LLC (Distro Kid)

Kingsbridge Holdings, LLC(2)

6 unchanged sentences

Communications Equipment

Maurices, Incorporated

Specialty Retail

MMIT Holdings, LLC

NAC Holdings Corporation (Jaguar)

One Touch Direct, LLC

6 unchanged sentences

Health Care Providers & Services

Sentry Data Systems, Inc.

Life Sciences Tools & Services

Smile Doctors LLC

Personal Products

Stryten Energy LLC

Auto Parts & Equipment

SunMed Group Holdings, LLC

2 unchanged sentences

Specialty Retail

Ultimate Baked Goods Midco LLC (Rise Baking)

Packaged Foods & Meats

USR Parent, Inc.

4 unchanged sentences

Multi-Sector Holdings

Total Second Lien Asset-Based Senior Secured Loans

Second Lien Bank Debt/Senior Secured Loans

19 unchanged sentences

Health Care Equipment & Supplies

Kindred Biosciences, Inc.

Pharmaceuticals

Health Care Technology

Neuronetics, Inc.

8 unchanged sentences

Pharmaceuticals

SI-BONE, Inc.

Health Care Equipment & Supplies

SOC Telemed, Inc.

5 unchanged sentences

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

June 30, 2021

thousands, except share/unit amounts)

September 30, 2021

(in thousands, except share/unit amounts)

Equipment Financing 31.8%

7 unchanged sentences

3/1/2022-11/1/2022

Boart Longyear

Boart Longyear Company (14)

Metals & Mining

9 unchanged sentences

Hotels, Restaurants & Leisure

6/1/2025-10/1/2026

Dongwon Autopart Technology Inc.

6 unchanged sentences

8/1/2022-4/27/2025

EquipmentShare.com, Inc.

Commercial Services & Supplies

Family First Freight,

Family First Freight, LLC (10)

6/1/2022-5/1/2023

Freightsol LLC (14)

Garda CL Technical Services,

Garda CL Technical Services, Inc.

Commercial Services & Supplies

1 unchanged sentence

Georgia Jet, Inc.

Globecomm Systems Inc.

Wireless Telecommunication Services

GMT Corporation (14)

Haljoe Coaches USA,

HTI Logistics

Corporation (10)

Haljoe Coaches USA, LLC (14)

HTI Logistics Corporation (10)

Commercial Services & Supplies

2 unchanged sentences

Auto Components

ISR Holdings, LLC (10)

Commercial Services & Supplies

Kool Pak, LLC (14)

3 unchanged sentences

Lux Credit Consultants, LLC (10)

7/1/2025-10/1/2025

Lux Vending, LLC (10)

Consumer Finance

Mountain Air Helicopters, Inc.

10 unchanged sentences

Diversified Consumer Services

SLR Equipment Finance (2)

Multi-Sector Holdings

South Texas Oilfield Solutions, LLC (14)

39 unchanged sentences

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

June 30, 2021

thousands, except share/unit amounts)

September 30, 2021

(in thousands, except share/unit amounts)

Common Equity/Equity Interests/Warrants52.5%

22 unchanged sentences

Diversified Consumer Services

Scynexis, Inc.

Pharmaceuticals

Senseonics Holdings, Inc.

15 unchanged sentences

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

June 30, 2021.

September 30, 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 six months ended June 30, 2021 in these controlled investments are as follows:

Transactions during the nine months ended September 30, 2021 in these controlled investments are as follows:

Name of Issuer

3 unchanged sentences

Fair Value at

June 30, 2021

September 30, 2021

AviatorCap SII, LLC

16 unchanged sentences

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

June 30, 2021

September 30, 2021

(in thousands)

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 June 30, 2021, on a fair value

As of September 30, 2021, on a fair value

basis, non-qualifying assets in the portfolio represented 19.3% of the total assets of the Company.

12 unchanged sentences

All investments are Level 3 unless otherwise indicated.

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR

or PRIME rate.

These instruments are often subject to a LIBOR or PRIME rate floor.

13 unchanged sentences

Spread is 6.00% Cash / 2.00% PIK.

Kindred Biosciences, Inc., KindredBio Equine, Inc.

and Centaur Biopharmaceutical Services, Inc.

are co-borrowers.

Spread is 2.50% Cash / 11.50% PIK.

Spread is 5.00% Cash / 1.00% PIK.

AmeriMark Interactive, LLC, AmeriMark Direct LLC, AmeriMark Intermediate Sub, Inc., L.T.D.

Commodities LLC,

Leonards Healthcare Corp.

and Amerimark Intermediate Holdings, LLC are each co-Borrowers.

Non-income producing security.

Investment is on non-accrual status.

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED SCHEDULE OF INVESTMENTS (unaudited) (continued)

June 30, 2021

September 30, 2021

(in thousands)

Industry Classification

1 unchanged sentence

Investments (at fair value) as

of June 30, 2021

of September 30,

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

1 unchanged sentence

Diversified Financial Services (includes SLR Credit Solutions)

Pharmaceuticals

Health Care Providers & Services

Pharmaceuticals

Health Care Equipment & Supplies

2 unchanged sentences

Wireless Telecommunication Services

Communications Equipment

Diversified Consumer Services

Specialty Retail

Diversified Consumer Services

Communications Equipment

Internet & Catalog Retail

Capital Markets

Auto Parts & Equipment

Packaged Foods & Meats

Auto Components

Health Care Technology

Biotechnology

3 unchanged sentences

Energy Equipment & Services

Oil, Gas & Consumable Fuels

Air Freight & Logistics

Containers & Packaging

Health Care Technology

Oil, Gas & Consumable Fuels

Hotels, Restaurants & Leisure

Consumer Finance

Containers & Packaging

Total Investments

3 unchanged sentences

December 31, 2020

(in thousands)

Senior Secured Loans 93.7%

12 unchanged sentences

Specialty Retail

Enhanced Permanent Capital,

Enhanced Permanent Capital, LLC(3)

Capital Markets

78 unchanged sentences

December 31, 2020

thousands, except share/unit amounts)

(in thousands, except share/unit amounts)

Equipment Financing 33.4%

52 unchanged sentences

Multi-Sector Holdings

Rane Light Metal Castings

Rane Light Metal Castings Inc.

Commercial Services & Supplies

54 unchanged sentences

December 31, 2020

thousands, except share/unit amounts)

(in thousands, except share/unit amounts)

Common Equity/Equity Interests/Warrants51.9%

44 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

30 unchanged sentences

December 31, 2020

(in thousands)

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

9 unchanged sentences

federal income tax purposes is $4,446;

aggregate gross unrealized

appreciation and depreciation for U.S.

aggregate gross

unrealized appreciation and depreciation for U.S.

federal tax purposes is $52,349 and $47,903, respectively, based on a tax cost of $1,527,505.

Unless otherwise noted, all of the Companys investments are pledged as collateral against the borrowings

outstanding on the senior secured credit facility.

Unless otherwise noted, all of the Companys investments are pledged as collateral against the

borrowings outstanding on the senior secured credit facility.

The Company generally acquires its investments in private transactions exempt from registration under the Securities Act of 1933, as amended (the Securities Act).

These investments are

generally subject to certain limitations on resale, and may be deemed to be restricted securities under the Securities Act.

investments are generally subject to certain limitations on resale, and may be deemed to be restricted securities under the Securities Act.

All investments are Level 3 unless otherwise indicated.

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR or

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the LIBOR

or PRIME rate.

These instruments are often subject to a LIBOR or PRIME rate floor.

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.

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 the Company through NEFPASS LLC.

18 unchanged sentences

December 31, 2020

(in thousands)

Industry Classification

28 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

June 30, 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

initial capital of $1,200,000 of which 47.04% was funded by affiliated parties.

Immediately prior to our initial public offering, through

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

September 30, 2021

(in 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 initial capital of $1,200,000 of which 47.04% was funded by affiliated parties.

Immediately prior to our initial public offering, through 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 Merger).

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).

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.

SLR 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

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).

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

2 unchanged sentences

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.

Company directly and indirectly invests primarily in leveraged middle market companies in the form of senior secured 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

21 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in thousands, except share amounts)

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

38 unchanged sentences

input in the valuation process.

For the six months ended June 30, 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.

For the nine months ended September 30, 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:

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 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.

September 30, 2021

(in 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.

50 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in thousands, except share amounts)

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

3 unchanged sentences

prepaid assets.

These expenses are typically charged as a reduction of capital upon utilization or expensed, in accordance with ASC 946-20-25.

These expenses are typically charged as a reduction of capital upon the sale of shares or expensed, in accordance with ASC 946-20-25.

Investments that are expected to pay regularly scheduled interest in cash are generally placed on non-accrual status when principal or interest cash payments are past due 30 days or more (90 days or more for equipment financing) and/or when it is no longer probable that principal or interest cash payments will

9 unchanged sentences

Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents.

Recent Accounting Pronouncements

Accounting Pronouncements

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

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 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

September 30, 2021

(in 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 quarter.

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:

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;

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 and six months ended June 30, 2021 and 2020.

For the three and six months ended June 30,

2021, the Company recognized $6,890 and $13,700, respectively, in base management fees and $3,879 and $7,746, respectively, in performance-based incentive fees.

For the three and six months ended June 30, 2020, the Company recognized $5,971 and

$12,240, respectively, in base management fees and $0 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 six months ended June 30, 2021, the Company recognized expenses under the Administration

Agreement of $1,375 and $2,735 respectively.

For the three and six months ended June 30, 2020, the Company recognized expenses under the Administration Agreement of $1,148 and $2,295, respectively.

No managerial assistance fees were accrued or

collected for the three and six months ended June 30, 2021 and 2020.

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 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.

No accrual was required for the three and nine months ended September 30, 2021 and 2020.

For the three and nine months ended September 30, 2021, the Company recognized $7,142 and $20,842, respectively, in base management fees

and $698 and $8,444, respectively, in performance-based incentive fees.

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.

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, 2021, the Company recognized expenses under the Administration Agreement of $1,435 and

$4,170 respectively.

For the three and nine months ended September 30, 2020, the Company recognized expenses under the Administration Agreement of $1,572 and $3,867, respectively.

No managerial assistance fees were accrued or collected for the

three and nine months ended September 30, 2021 and 2020.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in thousands, except share amounts)

Net Asset Value Per Share

At June 30, 2021, the Companys total net assets and net asset value per share were $857,446 and $20.29, 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 and six months ended June 30, 2021 and 2020:

Three months ended June 30,

Six months ended June 30,

At September 30, 2021, the Companys total net assets and net asset value per share were $853,490 and $20.20, respectively.

compares to total net assets and net asset value per share at December 31, 2020 of $852,023 and $20.16, 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, 2021 and 2020:

Three months ended

September 30,

Nine months ended September 30,

Earnings (loss) per share (basic & diluted)

37 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 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 June 30, 2021 and December 31, 2020:

September 30, 2021

(in 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, 2021

and December 31, 2020:

Fair Value Measurements

As of June 30, 2021

As of September 30, 2021

Senior Secured Loans

14 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 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 six months ended June 30, 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 June 30, 2021:

September 30, 2021

(in 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, 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 September 30, 2021:

Fair Value Measurements Using Level 3 Inputs

2 unchanged sentences

Common Equity/

Fair value, March 31, 2021

Fair value, June 30, 2021

Total gains or losses included in earnings:

Net realized gain

Net realized loss

Net change in unrealized gain (loss)

2 unchanged sentences

Transfers in/out of Level 3

Fair value, June 30, 2021

Fair value, September 30, 2021

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

11 unchanged sentences

Transfers in/out of Level 3 (1)

Fair value, June 30, 2021

Fair value, September 30, 2021

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

7 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

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 six months ended June 30, 2021:

2022 Unsecured Notes and Unfunded Commitments

September 30, 2021

(in thousands, except share amounts)

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, 2021:

2022 Unsecured Notes

For the three months ended

June 30, 2021

September 30, 2021

Beginning fair value

3 unchanged sentences

Ending fair value

2022 Unsecured Notes and Unfunded Commitments

For the six months ended

June 30, 2021

2022 Unsecured Notes

For the nine months ended

September 30, 2021

Beginning fair value

5 unchanged sentences

accordance with ASC 825-10.

On June 30, 2021, there were borrowings of $150,000 on the 2022 Unsecured Notes.

On September 30, 2021, 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 for the year ended December 31, 2020, as well

17 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

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:

September 30, 2021

(in thousands, except share amounts)

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:

2022 Unsecured Notes

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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 June 30, 2021 is

Quantitative information about the Companys Level 3 asset and liability fair value measurements as of September 30, 2021 is

summarized in the table below:

Fair Value at

June 30, 2021

September 30, 2021

Principal Valuation

4 unchanged sentences

Income Approach

Market Multiple (1)

Comparable Multiple

4.0% 26.2% (8.4%)

2.0x-3.0x(2.5x)/3.0x-4.0x(3.5x)

Equipment Financing

3 unchanged sentences

7.2% 20.3% (10.0%)

10.6%-10.6% (10.6%)

Preferred Equity

11 unchanged sentences

1.5% 4.6% (4.5%)

Investments are valued using a

sum-of-the parts analysis, using expected EBITDA multiples (2x-3x) for certain segments of the business and expected revenue

multiples (3x-4x) for certain segments of the business.

Includes $402 of investments valued using a Black-Scholes model and $148,212 of investments valued using an

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

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

measurements as of December 31, 2020 is summarized in the table below:

September 30, 2021

(in thousands, except share amounts)

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

32 unchanged sentences

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

Our debt obligations consisted of the following as of June 30, 2021 and December 31, 2020:

June 30, 2021

Our debt obligations consisted of the following as of September 30, 2021 and December 31, 2020:

September 30, 2021

December 31, 2020

8 unchanged sentences

2026 Unsecured Notes

2027 Unsecured Notes

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $1,800 and $2,234 as of

June 30, 2021 and December 31, 2020, respectively.

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $465 and $623 as of

June 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $53 and $70 as of June 30,

2021 and December 31, 2020, respectively.

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $45 and $70 as of

June 30, 2021 and December 31, 2020, respectively.

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $502 and $775 as of

June 30, 2021 and December 31, 2020, respectively.

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $925 and $1,123 as of

June 30, 2021 and December 31, 2020, respectively.

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $644 and $724 as of

September 30, 2021 and December 31, 2020, respectively.

Carrying Value equals the Face Amount net of unamortized debt issuance costs of $33 as of September 30,

Unsecured Notes

On September 14, 2021, the Company closed a private offering of $50,000 of the 2027 Unsecured Notes with a fixed interest rate of 2.95%

and a maturity date of March 14, 2027.

Interest on the 2027 Unsecured Notes is due semi-annually on March 14 and September 14.

The 2027 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, 2021

(in thousands, except share amounts)

On December 18, 2019, the Company closed a private offering of $125,000 of the 2024 Unsecured Notes with a fixed interest rate of 4.20%

2 unchanged sentences

The 2024 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

On December 18, 2019, the Company closed a private offering of $75,000 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 $75,000 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 buyers.

On December 28, 2017, the Company closed a private offering of $21,000 of the 2022

Tranche C Notes with a fixed interest rate of 4.50% and a maturity date of December 28, 2022.

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 $21,000 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 $75,000 in aggregate principal amount of publicly registered

2023 Unsecured Notes for net proceeds of $73,846.

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

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

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

Revolving and Term Loan Facilities

11 unchanged sentences

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.

June 30, 2021, outstanding USD equivalent borrowings under the Credit Facility totaled $194,000, composed of $119,000 of revolving credit and $75,000 of term loans.

September 30, 2021, outstanding USD equivalent borrowings under the Credit Facility totaled $193,500, composed of $118,500 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

7 unchanged sentences

There were $28,240 of borrowings

outstanding as of June 30, 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.

outstanding as of September 30, 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 six months ended

June 30, 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 six months ended June 30, 2021 and the year ended December 31, 2020 were $728,000 and $677,000, respectively.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in thousands, except share amounts)

The average annualized interest cost for all borrowings for the nine months ended September 30, 2021 and the year ended December 31,

2020 was 3.69% 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, the 2026 Unsecured Notes and the 2027 Unsecured Notes (collectively the Credit Facilities), if any.

The maximum amounts borrowed on the

Credit Facilities during the nine months ended September 30, 2021 and the year ended December 31, 2020 were $728,000 and $677,000, respectively.

Financial Highlights

The following is a schedule of financial highlights for the six months ended June 30, 2021 and 2020:

Six months ended

June 30, 2021

June 30, 2020

following is a schedule of financial highlights for the nine months ended September 30, 2021 and 2020:

Nine months ended

September 30, 2021

September 30, 2020

Per Share Data:

25 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in 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

finance company focused on providing asset-based and other secured financing solutions (the Crystal Acquisition).

We invested $275,000 in cash to effect the Crystal Acquisition.

Crystal Financial owned approximately 98% of the

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

December 28, 2012, we acquired an equity interest in Crystal Capital Financial Holdings LLC (Crystal Financial) for $275,000 in cash.

Crystal Financial owned approximately 98% of the 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.

SLR Credit 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 June 30, 2021 SLR

Credit had 25 funded commitments to 21 different issuers with a total par value of approximately $294,949 on total assets of $392,856.

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 June 30, 2021 and December 31, 2020, the largest loan outstanding totaled $32,095 and $45,000, respectively.

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

As of March 11, 2021, total

commitments to the revolving credit facility are $280,000.

As of September 30, 2021 SLR Credit had 24 funded commitments to 19

different issuers with total funded loans of approximately $266,370 on total assets of $387,953.

As of December 31, 2020, SLR Credit had 30 funded commitments to 24 different issuers with total funded loans of approximately $404,115 on total

assets of $433,914.

As of September 30, 2021 and December 31, 2020, the largest loan outstanding totaled $30,000 and $45,000, respectively.

For the same periods, the average exposure per issuer was $14,019 and $16,838,

respectively.

SLR Credits credit facility, which is non-recourse to the Company, had approximately $140,218 and $183,896 of borrowings outstanding at June 30, 2021 and

December 31, 2020, respectively.

For the three months ended June 30, 2021 and 2020, SLR Credit had net income of $2,111 and $8,350, respectively, on gross income of $8,054 and $12,137, respectively.

For the six months ended

June 30, 2021 and 2020, SLR Credit had net income of $7,052 and $10,250, respectively, on gross income of $17,731 and $23,642, respectively.

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

differences between GAAP net income and cash available for distributions.

SLR Credits credit facility, which is non-recourse to the Company, had approximately $140,733 and $183,896 of borrowings outstanding at September 30, 2021 and December 31,

2020, respectively.

For the three months ended September 30, 2021 and 2020, SLR Credit had net income of $5,445 and $6,041, respectively, on gross income of $9,508 and $9,301, respectively.

For the nine months ended September 30, 2021

and 2020, SLR Credit had net income of $12,497 and $16,291, respectively, on gross income of $27,239 and $32,944, respectively.

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

GAAP net income and cash available for distributions.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

September 30, 2021

(in thousands, except share amounts)

Commitments and Contingencies

The Company had unfunded debt and equity commitments to various revolving and delayed-draw term loans as well as to SLR Credit.

amount of these unfunded commitments as of June 30, 2021 and December 31, 2020 is $130,770 and $126,180, respectively, comprised of the following:

June 30, 2021

amount of these unfunded commitments as of September 30, 2021 and December 31, 2020 is $200,958 and $126,180, respectively, comprised of the following:

September 30,

SLR Credit Solutions*

Smile Doctors LLC

NAC Holdings Corporation

CC SAG Holdings Corp.

(Spectrum Automotive)

Inszone Mid, LLC

Smile Doctors LLC

SOC Telemed, Inc.

Stryten Energy LLC

One Touch Direct, LLC

Rezolute, Inc.

Neuronetics, Inc.

SLR Equipment Finance

Neuronetics, Inc.

Maurices, Incorporated

Atria Wealth Solutions, Inc.

Cerapedics, Inc.

Kid Distro Holdings, LLC

MMIT Holdings, LLC

Foundation Consumer Brands, LLC

Ultimate Baked Goods Midco LLC

Basic Fun, Inc.

Sentry Data Systems, Inc.

Pinnacle Treatment Centers, Inc.

5 unchanged sentences

Centrexion Therapeutics, Inc.

Sentry Data Systems, Inc.

Delphinus Medical Technologies, Inc.

1 unchanged sentence

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 Company.

September 30, 2021 and December 31, 2020, the Company had sufficient cash available and/or liquid securities available to fund its commitments and had reviewed them for any appropriate fair value adjustment.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

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 June 30, 2021 and December 31, 2020, the Company had sufficient cash available and/or liquid securities available to fund its commitments.

September 30, 2021

(in thousands, except share amounts)

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).

July 31, 2017, we acquired a 100% equity interest in 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 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.

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 June 30, 2021, SLR Equipment had 129 funded equipment-backed leases and loans to 58 different customers with a total net investment

in leases and loans of approximately $183,871 on total assets of $251,622.

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 June 30, 2021 and December 31, 2020, the largest position outstanding totaled $19,244 and $25,103, respectively.

For the same periods, the average exposure per customer was $3,170 and

As of September 30, 2021, SLR Equipment had 128 funded equipment-backed leases and loans to 58 different customers with a total net

investment in leases and loans of approximately $201,402 on total assets of $267,316.

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 September 30, 2021 and December 31, 2020, the largest position outstanding totaled $19,222 and $25,103, respectively.

For the same periods, the average exposure per customer

was $3,472 and $3,089, respectively.

SLR Equipments credit facility, which is non-recourse to the Company, had approximately $108,264 and $100,569 of borrowings outstanding at September 30,

2021 and December 31, 2020, respectively.

For the three months ended September 30, 2021 and September 30, 2020, SLR Equipment had net income (loss) of ($306) and $1,532, respectively, on gross income of $5,809 and $6,462,

respectively.

SLR Equipments credit facility, which is non-recourse to the Company, had approximately $90,589 and $100,569 of borrowings outstanding at June 30, 2021 and

December 31, 2020, respectively.

For the three months ended June 30, 2021 and June 30, 2020, SLR Equipment had net loss of $1,677 and $2,354, respectively, on gross income of $5,740 and $5,419, respectively.

For the six months ended

June 30, 2021 and June 30, 2020, SLR Equipment had net loss of $1,995 and $1,927, respectively, on gross income of $10,634 and $11,333, respectively.

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

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

For the nine months ended September 30, 2021 and September 30, 2020, SLR Equipment had net loss of $2,301 and $395, respectively, on gross income of $16,443 and $17,795, 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 June 30, 2021 and June 30, 2020, 200,000,000 shares of $0.01 par value capital stock were authorized.

There were no transactions in capital stock during the three and six months ended June 30, 2021 and June 30, 2020.

As of September 30, 2021 and September 30, 2020, 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, 2021

and September 30, 2020.

Kingsbridge Holdings, LLC

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.

On November 3, 2020, the Company acquired an 87.5% equity interest in 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 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 June 30, 2021, KBHT had total assets of $749,141.

Recourse debt outstanding for KBHT totaled $201,002 as

of June 30, 2021.

Non-recourse debt outstanding for KBHT totaled $352,429 at June 30, 2021.

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

September 30, 2021, KBHT had total assets of $734,592.

Recourse debt outstanding for KBHT totaled $196,158 as of September 30, 2021.

Non-recourse debt outstanding for KBHT totaled $349,008 at

September 30, 2021.

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

KBHT 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 and six months ended June 30, 2021, KBHT had net income of $3,778 and $6,045, respectively, on

gross income of $61,423 and $119,570, respectively.

KBHT 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 and nine months ended September 30, 2021, KBHT had net income of $3,163 and $10,314, respectively, on gross income of $60,510 and $180,079, 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 KBHTs funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that KBHT will be able to maintain consistent dividend payments to us.

As such, and subject to fluctuations in KBHTs funded commitments, the timing of originations, and

the repayments of financings, the Company cannot guarantee that KBHT will be able to maintain consistent dividend payments to us.

SLR INVESTMENT CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)(continued)

June 30, 2021

thousands, except share amounts)

September 30, 2021

(in 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 August 3, 2021, our Board declared a quarterly distribution of $0.41 per share payable on

October 5, 2021 to holders of record as of September 23, 2021.

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, 2021, our Board declared a quarterly distribution of $0.41 per share payable on January 5, 2022 to holders of record

as of December 16, 2021.

Report of Independent Registered Public Accounting Firm

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

schedule of investments, as of June 30, 2021, the related consolidated statements of operations and changes in net assets, for the three-month and six-month periods ended June 30, 2021 and 2020, the related consolidated statements of cash flows

for the six-month periods ended June 30, 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.

schedule of investments, as of September 30, 2021, the related consolidated statements of operations and changes in net assets, for the three-month and nine-month periods ended September 30, 2021 and 2020, the related consolidated

statements of cash flows for the nine-month periods ended September 30, 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.

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.

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

This consolidated interim financial information is the responsibility of the Companys management.

We are a public accounting firm registered with the

PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

consolidated interim financial information is the responsibility of the Companys management.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB.

A review of consolidated interim financial information consists principally of

applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.

It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the

expression of an opinion regarding the financial statements taken as a whole.

Accordingly, we do not express such an opinion.

We conducted our reviews in

accordance with the standards of the PCAOB.

A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.

substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole.

Accordingly, we do not express such an

New York, New York

August 3, 2021

November 3, 2021

Managements Discussion and Analysis of Financial Condition

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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

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.

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.

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 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 June 30, 2021, the Investment Adviser has directly

invested approximately $10.8 billion in more than 430 different portfolio companies since 2006.

We invest primarily in leveraged middle-market companies in the

form of senior secured 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.

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 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 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, 2021, the Investment Adviser has directly invested approximately

$11.6 billion in more than 440 different portfolio companies since 2006.

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

Recent Developments

2021, our Board declared a quarterly distribution of $0.41 per share payable on October 5, 2021 to holders of record as of September 23, 2021.

On November 3,

2021, our Board declared a quarterly distribution of $0.41 per share payable on January 5, 2022 to holders of record as of December 16, 2021.

The global outbreak of the COVID-19 pandemic, and the related effect on the U.S.

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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.

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

Such amounts of accrued

PIK income 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

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Portfolio and Investment Activity

During the three months ended June 30, 2021, we invested approximately $69.0 million across 12 portfolio companies.

This compares to

investing approximately $61.2 million in 14 portfolio companies for the three months ended June 30, 2020.

Investments sold, prepaid or repaid during the three months ended June 30, 2021 totaled approximately $149.7 million versus

approximately $28.9 million for the three months ended June 30, 2020.

At June 30, 2021, our portfolio consisted of 101 portfolio companies and was invested

23.0% in cash flow senior secured loans, 25.5% in asset-based senior secured loans / SLR Credit Solutions (SLR Credit), 14.6% in Kingsbridge Holdings, LLC (KBH), 18.7% in equipment senior secured financings / SLR Equipment

Finance (SLR Equipment), and 18.2% in life science senior secured loans, in each case, measured at fair value, versus 108 portfolio companies and was invested 23.0% in cash flow senior secured loans, 31.4% in asset-based senior secured

loans / SLR Credit, 22.2% in equipment senior secured financings / SLR Equipment, and 23.4% in life science senior secured loans, in each case, measured at fair value, at June 30, 2020.

At June 30, 2021, 71.6% or $1.07 billion of our income producing investment

portfolio * is floating rate and 28.4% or $422.6 million is fixed rate, measured at fair value.

At June 30, 2020, 76.7% or $1.04 billion of our income producing investment portfolio * is floating rate and 23.3% or $314.6 million is fixed rate, measured at fair value.

As of June 30, 2021 and 2020, we had no issuers on non-accrual

Since inception through June 30, 2021, the Company and its predecessor companies have invested approximately

$6.9 billion in more than 305 portfolio companies.

During the three months ended September 30, 2021, we invested approximately $230.7 million across 23 portfolio companies.

compares to investing approximately $42.4 million in 12 portfolio companies for the three months ended September 30, 2020.

Investments sold, prepaid or repaid during the three months ended September 30, 2021 totaled approximately

$105.9 million versus approximately $60.3 million for the three months ended September 30, 2020.

At September 30, 2021, our portfolio consisted of 106 portfolio companies and was

invested 28.4% in cash flow senior secured loans, 26.5% in asset-based senior secured loans / SLR Credit Solutions (SLR Credit), 13.7% in Kingsbridge Holdings, LLC (KBH), 16.7% in equipment senior secured financings / SLR

Equipment Finance (SLR Equipment), and 14.7% in life science senior secured loans, in each case, measured at fair value, versus 105 portfolio companies invested 22.3% in cash flow senior secured loans, 31.8% in asset-based senior secured

loans / SLR Credit, 22.0% in equipment senior secured financings / SLR Equipment, and 23.9% in life science senior secured loans, in each case, measured at fair value, at September 30, 2020.

At September 30, 2021, 74.1% or $1.20 billion of our income producing investment portfolio * is floating rate and 25.9% or $418.4 million is fixed rate, measured at fair value.

At September 30, 2020, 77.3% or $1.04 billion of our income producing investment portfolio * is floating rate and 22.7% or $305.1 million is fixed rate, measured at fair value.

As of September 30, 2021 and 2020, we had one and zero issuers, respectively, on non-accrual status.

Since inception through September 30, 2021, the Company and its predecessor

companies have invested approximately $7.1 billion in more than 315 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.

* 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

finance company focused on providing asset-based and other secured financing solutions (the Crystal Acquisition).

We invested $275 million in cash to effect the Crystal Acquisition.

Crystal Financial owned approximately 98% of the

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.

On December 28, 2012, we acquired an equity interest in Crystal Capital Financial Holdings LLC (Crystal Financial) for

$275 million in cash.

Crystal Financial owned approximately 98% of the 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.

SLR Credit 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 June 30, 2021, SLR Credit had 25 funded commitments to 21 different issuers with a total par value of approximately

As of September 30, 2021, SLR Credit had 24 funded commitments to 19 different issuers with total funded loans of approximately

$266.4 million on total assets of $388.0 million.

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$433.9 million.

As of June 30, 2021 and December 31, 2020, the largest loan outstanding totaled $32.1 million and $45.0 million, respectively.

For the same periods, the average exposure per issuer was $14.0 million and

$16.8 million, respectively.

As of September 30, 2021 and December 31, 2020, the largest loan outstanding totaled $30.0 million and $45.0 million, respectively.

For the same periods, the average exposure per issuer was $14.0 million

and $16.8 million, respectively.

SLR Credits credit facility, which is non-recourse to the Company, had approximately $140.7 million and $183.9 million of borrowings outstanding at

June 30, 2021 and December 31, 2020, respectively.

For the three months ended June 30, 2021 and 2020, SLR Credit had net income of $2.1 million and $8.4 million, respectively, on gross income of $8.1 million and

$12.1 million, respectively.

For the six months ended June 30, 2021 and 2020, SLR Credit had net income of $7.1 million and $10.3 million, respectively, on gross income of $17.7 million and $23.6 million,

September 30, 2021 and December 31, 2020, respectively.

For the three months ended September 30, 2021 and 2020, SLR Credit had net income of $5.4 million and $6.0 million, respectively, on gross income of $9.5 million

and $9.3 million, respectively.

For the nine months ended September 30, 2021 and 2020, SLR Credit had net income of $12.5 million and $16.3 million, respectively, on gross income of $27.2 million and $32.9 million,

respectively.

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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).

2017, we acquired a 100% equity interest in 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.

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were later redeemed in 2018.

As of June 30, 2021, SLR Equipment had 129 funded equipment-backed leases and loans to 58 different

customers with a total net investment in leases and loans of approximately $183.9 million on total assets of $251.6 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 June 30, 2021 and December 31, 2020, the largest position outstanding totaled $19.2 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 $90.6 million and $100.6 million of borrowings outstanding at June 30, 2021 and December 31, 2020, respectively.

For the three months ended June 30, 2021 and 2020, SLR Equipment had net loss of

$1.7 million and $2.4 million, respectively, on gross income of $5.7 million and $5.4 million, respectively.

For the six months ended June 30, 2021 and 2020, SLR Equipment had net loss of $2.0 million and

$1.9 million, respectively, on gross income of $10.6 million and $11.3 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.

As of September 30, 2021, SLR Equipment had 128 funded equipment-backed leases and loans to 58

different customers with a total net investment in leases and loans of approximately $201.4 million on total assets of $267.3 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 September 30, 2021 and December 31, 2020, the largest position outstanding totaled

$19.2 million and $25.1 million, respectively.

For the same periods, the average exposure per customer was $3.5 million and $3.1 million, respectively.

SLR Equipments credit facility, which is non-recourse to the Company, had approximately $108.3 million and $100.6 million of borrowings outstanding at September 30, 2021 and December 31, 2020, respectively.

For the three months ended

September 30, 2021 and 2020, SLR Equipment had net income (loss) of ($0.3) million and $1.5 million, respectively, on gross income of $5.8 million and $6.5 million, respectively.

For the nine months ended September 30,

2021 and 2020, SLR Equipment had net loss of $2.3 million and $0.4 million, respectively, on gross income of $16.4 million and $17.8 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.

On November 3, 2020, the Company acquired an 87.5% equity interest in 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

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 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 June 30, 2021, KBHT had total assets of $749.1 million.

As of September 30, 2021, KBHT had total assets of $734.6 million.

Recourse debt outstanding for KBHT totaled $196.2 million at

June 30, 2021.

Non-recourse debt outstanding for KBHT totaled $352.4 million at June 30, 2021.

September 30, 2021.

Non-recourse debt outstanding for KBHT totaled $349.0 million at September 30, 2021.

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

KBHT also had

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 and six months ended June 30, 2021, KBHT had

net income of $3.8 million and $6.0 million, respectively, on gross income of $61.4 million and $119.6 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 KBHTs funded commitments, the timing of originations, and the repayments of financings, the Company cannot guarantee that KBHT

will be able to maintain consistent dividend payments to us.

also had 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 and nine months ended September 30,

2021, KBHT had net income of $3.2 million and $10.3 million, respectively, on gross income of $60.5 million and $180.1 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 KBHTs funded commitments, the timing of originations, and the repayments of financings, the Company cannot

guarantee that KBHT will be able to maintain consistent dividend payments to us.

Critical Accounting Policies

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with GAAP, and the 1940 Act.

Our valuation procedures are set forth in more detail below:

Under procedures established by our board of

directors (the Board), we value investments, including certain senior secured debt, subordinated debt and other debt securities with maturities greater than 60 days, for which market quotations are readily available, at such market

quotations (unless they are deemed not to represent fair value).

We attempt to obtain market quotations from at least two brokers or dealers (if available, otherwise from a principal market maker or a primary market dealer or other independent

pricing service).

We utilize mid-market pricing as a practical expedient for fair value unless a different point within the range is more representative.

If and when market quotations are deemed not to

represent fair value, we may utilize independent third-party valuation firms to assist us in determining the fair value of material assets.

Accordingly, such investments go through our multi-step valuation process as described below.

In each case,

independent valuation firms consider observable market inputs together with significant unobservable inputs in arriving at their valuation recommendations.

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 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

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:

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

investment professionals of the Investment Adviser responsible for the portfolio investment;

preliminary valuation conclusions are then documented and discussed with senior management of the Investment

independent valuation firms engaged by our Board conduct independent appraisals and review the Investment

Advisers preliminary valuations and make their own independent assessment for all material assets;

the audit committee of the Board reviews the preliminary valuation of the Investment Adviser and that of the

independent valuation firm, if any, and responds to the valuation recommendation of the independent valuation firm to reflect any comments;

the Board discusses valuations and determines the fair value of each investment in our portfolio in good faith

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).

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 six months ended June 30, 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

Unadjusted 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.

In all cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls is determined based on the

lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to each investment.

exercise of judgment is based in part on our knowledge of the asset class and our prior experience.

Determination of fair value involves

subjective judgments and estimates.

Accordingly, the notes to our consolidated financial statements express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial

Our valuation procedures are set forth in more detail in Note 2(b) to the Companys Consolidated Financial Statements.

Determination of fair value involves subjective judgments and estimates.

Accordingly, the notes to our consolidated financial statements

express the uncertainty with respect to the possible effect of such valuations, and any change in such valuations, on our consolidated financial statements.

Valuation of 2022 Unsecured Notes

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cash payments will be collected.

Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in managements judgment, are likely to

continue timely payment of their remaining interest or dividend obligations.

Interest or dividend cash payments received on investments may be recognized as income or applied to principal depending upon managements judgment.

investments may have contractual PIK interest or dividends.

PIK interest and dividends computed at the contractual rate are accrued into income and reflected as receivable up to the capitalization date.

PIK investments offer issuers the option at

each payment date of making payments in cash or in additional securities.

When additional securities are received, they typically have the same terms, including maturity dates and interest rates as the original securities issued.

On these payment

dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received).

PIK generally becomes due at the maturity of the investment or upon the investment being called

by the issuer.

At the point the Company believes

PIK is not expected to be realized, the PIK investment will be placed on non-accrual status.

Such non-accrual investments are restored to accrual status if past due principal and interest or dividends are paid in cash, and in managements

judgment, are likely to continue timely payment of their remaining interest or dividend obligations.

Interest or dividend cash payments received on investments may be recognized as income or

applied to principal depending upon managements judgment.

Some of our investments may have contractual PIK income.

PIK income is computed at the contractual rate, if applicable, and is accrued and reflected as a receivable up to the

capitalization date.

PIK investments offer issuers the option at each payment date of making payments in cash or in additional securities.

When additional securities are received, they typically have the same terms, including maturity dates and

interest rates as the original securities issued.

On these payment dates, the Company capitalizes the accrued interest or dividends receivable (reflecting such amounts as the basis in the additional securities received).

PIK generally becomes due at

the maturity of the investment or upon the investment being called by the issuer.

At the point the Company believes PIK is not expected to be realized, the PIK investment will be placed on non-accrual status.

When a PIK investment is placed on non-accrual status, the accrued, uncapitalized interest or dividends is reversed from the related receivable through interest or dividend income, respectively.

The Company does not reverse previously capitalized PIK

interest or dividends.

does not reverse previously capitalized PIK income.

Upon capitalization, PIK is subject to the fair value estimates associated with their related investments.

PIK investments on non-accrual status are restored to accrual status if the

Company again believes that PIK is expected to be realized.

PIK investments on non-accrual status are restored

to accrual status if the Company again believes that PIK is expected to be realized.

Loan origination fees, original issue discount, and market discounts are capitalized and amortized into income using the effective interest method.

Upon the prepayment of a loan, any

unamortized loan origination fees are recorded as interest income.

prepayment of a loan, any unamortized loan origination fees are recorded as interest income.

We record prepayment premiums on loans and other investments as interest income when we receive such amounts.

Capital structuring fees are recorded as other income when earned.

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 six months ended June 30,

2021, capitalized PIK income totaled $1.6 million and $3.3 million, respectively.

For the three and six months ended June 30, 2020, capitalized PIK income totaled $1.3 million and $1.4 million, respectively.

Capital structuring fees are recorded as other

income when earned.

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

addition, the deferral of PIK income 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, 2021, capitalized PIK income totaled $1.7 million and $5.0 million, respectively.

For the three and nine months ended September 30, 2020, capitalized PIK income totaled $1.6 million and $3.0 million,

respectively.

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

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RESULTS OF OPERATIONS

Results comparisons are for the three and six months ended June 30, 2021 and June 30, 2020:

Results comparisons are for the three and nine months ended September 30, 2021 and September 30, 2020:

Investment Income

For the three and six

months ended June 30, 2021, gross investment income totaled $35.6 million and $71.5 million, respectively.

For the three and six months ended June 30, 2020, gross investment income totaled $28.6 million and

For the three and nine

months ended September 30, 2021, gross investment income totaled $32.2 million and $103.6 million, respectively.

For the three and nine months ended September 30, 2020, gross investment income totaled $28.9 million and

$90.4 million, respectively.

The increase in gross investment income for the year over year three and six month periods was primarily due to growth in the income producing portfolio.

Expenses totaled $20.1 million and $40.5 million, respectively, for the three and six months ended June 30, 2021, of which

$10.8 million and $21.4 million, respectively, were base management fees and performance-based incentive fees and $7.2 million and $14.4 million, respectively, were interest and other credit facility expenses.

Administrative

services and other general and administrative expenses totaled $2.1 million and $4.7 million, respectively, for the three and six months ended June 30, 2021.

Expenses totaled $14.4 million and $31.5 million, respectively,

for the three and six months ended June 30, 2020, of which $6.0 million and $13.7 million, respectively, were base management fees and performance-based incentive fees and $6.6 million and $13.7 million, respectively, were

interest and other credit facility expenses.

Administrative services and other general and administrative expenses totaled $1.8 million and $4.1 million, respectively, for the three and six months ended June 30, 2020.

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 and six months ended June 30, 2021 versus the three and six months ended June 30, 2020 was primarily due to higher management and incentive fees resulting from a larger income producing investment portfolio on

Net Investment Income

Companys net investment income totaled $15.5 million and $31.0 million, or $0.37 and $0.73, per average share, respectively, for the three and six months ended June 30, 2021.

The Companys net investment income totaled

$14.2 million and $30.1 million, or $0.34 and $0.71, per average share, respectively, for the three and six months ended June 30, 2020.

The increase in gross investment income for the year over year three and nine month periods was primarily due to growth in the income producing portfolio.

Expenses totaled

$17.2 million and $57.6 million, respectively, for the three and nine months ended September 30, 2021, of which $7.8 million and $29.3 million, respectively, were base management fees and performance-based incentive fees and

$7.1 million and $21.5 million, respectively, were interest and other credit facility expenses.

Other general and administrative expenses totaled $2.2 million and $6.8 million, respectively, for the three and nine months ended

September 30, 2021.

Expenses totaled $14.6 million and $46.1 million, respectively, for the three and nine months ended September 30, 2020, of which $6.2 million and $19.9 million, respectively, were base management

fees and performance-based incentive fees and $6.5 million and $20.2 million, respectively, were interest and other credit facility expenses.

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 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 and nine months ended September 30, 2021 versus the three and nine months ended September 30, 2020 was primarily driven by a larger

income producing investment portfolio on average, which resulted in higher management and incentive fees as well as higher interest costs.

Investment Income

The Companys net investment income totaled $15.0 million and $46.0 million, or $0.36 and $1.09, per

average share, respectively, for the three and nine months ended September 30, 2021.

The Companys net investment income totaled $14.3 million and $44.3 million, or $0.34 and $1.05, per average share, respectively, for the three

and nine months ended September 30, 2020.

Net Realized Gain (Loss)

The Company had

investment sales and prepayments totaling approximately $150 million and $214 million, respectively, for the three and six months ended June 30, 2021.

Net realized gains over the same periods were $0.6 million and

$0.2 million, respectively.

The Company had investment sales and prepayments totaling approximately $29 million and $229 million, respectively, for the three and six months ended June 30, 2020.

Net realized losses over the same

periods were $24.8 million and $24.7 million, respectively.

Net realized gains for the three months ended June 30, 2021 were generally related to the exit of our warrant position in PQ Bypass, Inc.

Net realized gains for the six

months ended June 30, 2021 were generally related to the exit of our warrant position in PQ Bypass, Inc., partially offset by losses from the sale of our legacy investment in B.

Riley Financial, Inc.

Net realized losses for the three and six

month periods ended June 30, 2020 were primarily related to the exit of our investment in IHS Intermediate, Inc.

Net Change in Unrealized Gain

For the three and six months ended June 30, 2021, net change in unrealized gain on the Companys assets and

liabilities totaled $2.5 million and $8.9 million, respectively.

For the three and six months ended June 30, 2020, net change in unrealized gain (loss) on the Companys assets and liabilities totaled $64.6 million and

($26.7) million, respectively.

Net unrealized gain for the three months ended June 30, 2021 is primarily due to appreciation in the value of our investments in PhyMed Management LLC, KBH Topco, LLC and Foundation Brands, LLC, among others,

partially offset by the reversal of previously recognized appreciation in our investment in Genmark Diagnostics, Inc., as well as depreciation in the value of our investment in American Teleconferencing Services, Ltd.

and SOAGG, LLC, among others.

Net unrealized gain for the six months ended June 30, 2021 was primarily due to appreciation in the value our investments in PhyMed Management LLC, Senseonics Holdings, Inc.

and KBH Topco, LLC, among others, partially offset by the reversal of

previously recognized appreciation in our investment in Genmark Diagnostics, Inc., as well as depreciation in the value of our investment in American Teleconferencing Services, Ltd.

and SOAGG, LLC, among others.

Net unrealized loss for the three

months ended June 30, 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 unrealized gain for the three months ended June 30, 2020 is primarily due to the reversal of previously recognized unrealized depreciation in the value of our investment in IHS Intermediate, Inc., as well as appreciation in

the value of our investments in Crystal Financial LLC, NEF Holdings LLC, Bishop Lifting Products, Inc.

and Kore Wireless Group, Inc., among others, partially offset by appreciation on our 2022 Unsecured Notes.

Net unrealized loss for the six months

ended June 30, 2020 is primarily due to depreciation in the value of our investments in NEF Holdings LLC, Crystal Financial LLC, Rug Doctor and PhyMed Management LLC, among others, partially offset by the reversal of previously recognized

unrealized depreciation in the value of our investment in IHS Intermediate, Inc.

The Company had investment sales and prepayments totaling approximately $106 million and $320 million, respectively, for the three

and nine months ended September 30, 2021.

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

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.

Net realized losses for the three months ended

September 30, 2021 were generally related to the exit of our warrant position in Scynexis, Inc.

Net realized gains for the nine months ended September 30, 2021 were generally related to the exit of our warrant position in PQ Bypass, Inc.,

partially offset by losses from the sale of our legacy investment in B.

Riley Financial, Inc and exit of our warrant position in Scynexis, Inc.

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.

Net Change in Unrealized Gain (Loss)

the three and nine months ended September 30, 2021, net change in unrealized gain (loss) on the Companys assets and liabilities totaled ($1.5) million and $7.4 million, respectively.

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.

Net unrealized loss for the three months ended September 30, 2021 is

primarily due to depreciation in the value of our investments in American Teleconferencing Services, Ltd., PhyMed Management LLC and Rug Doctor, among others, partially offset by appreciation in the value of our investments in KBH Topco, LLC and SLR

Credit Solutions, among others.

Net unrealized gain for the nine months ended September 30, 2021 was primarily due to appreciation in the value our investments in KBH Topco, LLC, SLR Credit Solutions, and Senseonics Holdings, Inc., among

others, partially offset by depreciation in the value of our investments in American Teleconferencing Services, Ltd., Rug Doctor and SOAGG, LLC, among others.

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 Notes.

(Decrease) in Net Assets From Operations

For the three and six months ended June 30, 2021, the Company had a net increase in net

assets resulting from operations of $18.6 million and $40.1 million, respectively.

Net Increase (Decrease) in Net Assets From

For the three and nine months ended September 30, 2021, the Company had a net increase in net assets resulting from

operations of $13.4 million and $53.4 million, respectively.

For the same periods, earnings per average share were $0.32 and $1.26, respectively.

For the three and six months ended June 30, 2020, the Company had

a net increase (decrease) in net assets resulting from operations of $54.0 million and ($21.4) million, respectively.

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 same periods, earnings (loss) per average share were $0.44 and ($0.07), respectively.

LIQUIDITY AND CAPITAL RESOURCES

The Companys liquidity and capital resources are generated and generally available through its 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), 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 June 30, 2021, we had a total of $446.0 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.

The issuance of such securities will depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful.

uses of existing funds and any funds raised in the future is expected to be for investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders, or for other general corporate purposes.

Companys liquidity and capital resources are generated and generally available through its Credit Facility, the 2022 Unsecured Notes, the 2022 Tranche C Notes, the NEFPASS Facility, the 2023 Unsecured Notes, the 2024 Unsecured Notes, the 2026

Unsecured Notes and the 2027 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, 2021, we had a total of $448.3 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.

The issuance of such securities will

depend on future market conditions, funding needs and other factors and there can be no assurance that any such issuance will occur or be successful.

The primary uses of existing funds and any funds raised in the future is expected to be for

investments in portfolio companies, repayment of indebtedness, cash distributions to our stockholders, or for other general corporate purposes.

On September 14, 2021, the Company closed a private offering of $50,000 of the 2027 Unsecured Notes with a fixed interest rate of 2.95%

and a maturity date of March 14, 2027.

Interest on the 2027 Unsecured Notes is due semi-annually on March 14 and September 14.

The 2027 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

On February 12, 2020, a new lender to the Company executed a commitment increase to our Credit Facility providing for an additional

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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.

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 $420 million in cash equivalents as of

June 30, 2021.

September 30, 2021.

Unsecured Notes

September 14, 2021, the Company closed a private offering of $50,000 of the 2027 Unsecured Notes with a fixed interest rate of 2.95% and a maturity date of March 14, 2027.

Interest on the 2027 Unsecured Notes is due semi-annually on

March 14 and September 14.

The 2027 Unsecured Notes were issued in a private placement only to qualified institutional buyers.

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.

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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.

2021, outstanding USD equivalent borrowings under the Credit Facility totaled $194.0 million, composed of $119.0 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

Facility with Keybank acting as administrative agent.

September 30, 2021, outstanding USD equivalent borrowings under the Credit Facility totaled $193.5 million, composed of $118.5 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 Facility with Keybank acting as administrative agent.

The Company acts as servicer under the NEFPASS Facility.

The NEFPASS Facility is scheduled to mature on September 26, 2023.

The NEFPASS Facility generally bears interest at a rate of LIBOR

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.

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 $30.0 million of borrowings outstanding as of June 30, 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 June 30, 2021, the Company was in compliance with all financial and operational covenants required by our

Credit Facilities.

There were $28.2 million of

borrowings outstanding as of September 30, 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, 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 June 30, 2021:

A summary of our significant contractual payment obligations is as follows as of September 30, 2021:

Payments Due by Period (in millions)

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Unsecured senior notes

As of June 30, 2021, we had a total of $446.0 million of unused borrowing capacity under our

As of September 30, 2021, we had a total of $448.3 million of unused borrowing capacity under our

revolving credit facilities, subject to borrowing base limits.

Under the provisions of the 1940 Act, we are permitted, as a BDC, to issue senior securities

in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of senior securities.

If the value of our

assets declines, we may be unable to satisfy the asset coverage test.

If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of our indebtedness at a time when such

sales may be disadvantageous.

Under the provisions of the 1940 Act, we are permitted,

as a BDC, to issue senior securities in amounts such that our asset coverage ratio, as defined in the 1940 Act, equals at least 150% of gross assets less all liabilities and indebtedness not represented by senior securities, after each issuance of

senior securities.

If the value of our assets declines, we may be unable to satisfy the asset coverage test.

If that happens, we may be required to sell a portion of our investments and, depending on the nature of our leverage, repay a portion of

our indebtedness at a time when such sales may be disadvantageous.

Also, any amounts that we use to service our indebtedness would not be available for distributions to our common stockholders.

Furthermore, as a result of issuing senior securities, we would also be exposed to typical

risks associated with leverage, including an increased risk of loss.

Furthermore, as a result of issuing senior securities,

we would also be exposed to typical risks associated with leverage, including an increased risk of loss.

Senior Securities

Information about our senior securities is shown in the following table (in thousands) as of the quarter ended June 30, 2021 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 September 30,

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 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

Class and Year

Outstanding(1)

2022 Unsecured Notes

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

2022 Tranche C Notes

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

2023 Unsecured Notes

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

2024 Unsecured Notes

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

2026 Unsecured Notes

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

2027 Unsecured Notes

Fiscal 2021 (through September 30, 2021)

2042 Unsecured Notes

Senior Secured Notes

Fiscal 2021 (through September 30, 2021)

Class and Year

Outstanding(1)

Senior Secured Notes

Fiscal 2021 (through June 30, 2021)

NEFPASS Facility

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 2021)

SSLP Facility

Total Senior Securities

Fiscal 2021 (through June 30, 2021)

Fiscal 2021 (through September 30, 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.

As of June 30,

2021, asset coverage was 228.0%.

September 30, 2021, asset coverage was 218.9%.

The amount to which such class of senior security would be entitled upon the involuntary liquidation of the

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Payments under the

Advisory Agreement are equal to (1) a percentage of the value of our average gross assets and (2) a two-part

incentive fee.

Payments under the Administration Agreement are equal to an amount based upon our allocable portion of the Administrators overhead in performing its obligations under

the Administration Agreement, including rent, technology systems, insurance and our allocable portion of the costs of our chief financial officer and chief compliance officer and their respective staffs.

Either party may terminate each of the

Advisory Agreement and administration agreement without penalty upon 60 days written notice to the other.

See note 3 to our Consolidated Financial Statements.

Advisory Agreement are equal to (1) a percentage of the value of our average gross assets and (2) a two-part incentive fee.

Payments under the Administration Agreement are equal to an amount based

upon our allocable portion of the Administrators overhead in performing its obligations under the Administration Agreement, including rent, technology systems, insurance and our allocable portion of the costs of our chief financial

officer and chief compliance officer and their respective staffs.

Either party may terminate each of the Advisory Agreement and administration agreement without penalty upon 60 days written notice to the other.

See note 3 to our

Consolidated Financial Statements.

On July 31, 2017, the Company, NEFPASS LLC and NEFCORP LLC entered into a servicing agreement.

NEFCORP LLC was engaged to provide NEFPASS

LLC with administrative services related to the loans and capital leases held by NEFPASS LLC.

NEFCORP LLC was engaged to provide NEFPASS LLC with administrative services related to the loans and capital leases held by NEFPASS LLC.

NEFPASS LLC may terminate this agreement upon 30 days written notice to NEFCORP LLC.

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These unfunded capital

commitments always take into account the Companys liquidity and cash available for investment, portfolio and issuer diversification, and other considerations.

Accordingly, the Company had the following unfunded capital commitments at

June 30, 2021 and December 31, 2020, respectively:

June 30, 2021

commitments always take into account the Companys liquidity and cash available for investment, prudent portfolio management of issuer diversification, and other considerations.

Accordingly, the Company had the following unfunded capital

commitments at September 30, 2021 and December 31, 2020, respectively:

September 30,

(in millions)

SLR Credit Solutions*

Smile Doctors LLC

NAC Holdings Corporation

CC SAG Holdings Corp.

(Spectrum Automotive)

Inszone Mid, LLC

Smile Doctors LLC

SOC Telemed, Inc.

Stryten Energy LLC

One Touch Direct, LLC

Rezolute, Inc.

Neuronetics, Inc.

SLR Equipment Finance

Neuronetics, Inc.

Maurices, Incorporated

Atria Wealth Solutions, Inc.

Cerapedics, Inc.

Kid Distro Holdings, LLC

MMIT Holdings, LLC

Foundation Consumer Brands, LLC

Ultimate Baked Goods Midco LLC

Basic Fun, Inc.

Sentry Data Systems, Inc.

Pinnacle Treatment Centers, Inc.

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Centrexion Therapeutics, Inc.

Sentry Data Systems, Inc.

Delphinus Medical Technologies, Inc.

5 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 Company.

June 30, 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

8 unchanged sentences

Date Declared

November 3, 2021

December 16, 2021

January 5, 2022

August 3, 2021

48 unchanged sentences

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.

have not yet received in cash, such as contractual payment-in-kind income, which represents contractual income 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

3 unchanged sentences

Gross, our Chairman, Co-Chief Executive Officer and President and Mr.

Spohler, our Co-Chief Executive Officer, Chief Operating Officer and board member, are

managing members and senior investment professionals of, and have financial and controlling interests in, the Investment Adviser.

Spohler, our Co-Chief Executive Officer, Chief Operating Officer and board member, are managing members and senior

investment professionals of, and have financial and controlling interests in, the Investment Adviser.

In addition, Mr.

Peteka, our Chief Financial Officer,

Treasurer and Secretary serves as the Chief Financial Officer for SLR Capital Partners.

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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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

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,

12 unchanged sentences

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