10-Q

Table of Contents

Table of Contents

Table of Contents

Table of Contents

10-Q 1 d242122d10q.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarter Ended September 30, 2021

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 814-00754

SLR INVESTMENT CORP.

(Exact name of registrant as specified in its charter)


Maryland		26-1381340
(State of Incorporation)		(I.R.S. Employer Identification No.)
500 Park Avenue New York, N.Y.		10022
(Address of principal executive offices)		(Zip Code)

(212) 993-1670

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading

Symbol(s)

Name of Each Exchange
on Which Registered

Common Stock, par value $0.01 per share

SLRC

The NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s Common Stock, $.01 par value, outstanding as of October 29, 2021 was 42,260,826.

SLR INVESTMENT CORP.

FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS


		PAGE
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements

	Consolidated Statements of Assets and Liabilities as of September 30, 2021 (unaudited) and December 31, 2020		3

	Consolidated Statements of Operations for the three and nine months ended September 30, 2021 (unaudited) and the three and nine months ended September 30, 2020 (unaudited)		4

	Consolidated Statements of Changes in Net Assets for the three and nine months ended September 30, 2021 (unaudited) and the three and nine months ended September 30, 2020 (unaudited)		5

	Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 (unaudited) and the nine months ended September 30, 2020 (unaudited)		6

	Consolidated Schedule of Investments as of September 30, 2021 (unaudited)		7

	Consolidated Schedule of Investments as of December 31, 2020		12

	Notes to Consolidated Financial Statements (unaudited)		17

	Report of Independent Registered Public Accounting Firm		34

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		49

Item 4.	Controls and Procedures		50

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings		50

Item 1A.	Risk Factors		50

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		53

Item 3.	Defaults Upon Senior Securities		53

Item 4.	Mine Safety Disclosures		53

Item 5.	Other Information		53

Item 6.	Exhibits		53

	Signatures		55

PART I. FINANCIAL INFORMATION

In this Quarterly Report, “Company”, “we”, “us”, and “our” refer to SLR Investment Corp. unless the context states otherwise.

Item 1.

Financial Statements

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES

(in thousands, except share amounts)


	September 30, 2021 (unaudited)			December 31, 2020
Assets
Investments at fair value:
Companies less than 5% owned (cost: $924,613 and $832,507, respectively)	$	915,687		$	822,298
Companies more than 25% owned (cost: $717,531 and $724,428, respectively)		708,862			709,653
Cash		39,999			8,779
Cash equivalents (cost: $419,994 and $379,997, respectively)		419,994			379,997
Dividends receivable		9,019			7,927
Interest receivable		5,640			6,478
Receivable for investments sold		204			255
Prepaid expenses and other assets		611			571

Total assets	$	2,100,016		$	1,935,958

Liabilities
Debt ($717,740 and $677,000 face amounts, respectively, reported net of unamortized debt issuance costs of $4,414 and $5,549, respectively. See notes 6 and 7)	$	713,326		$	671,451
Payable for investments and cash equivalents purchased		496,798			380,038
Distributions payable		17,327			17,327
Management fee payable (see note 3)		7,142			6,535
Performance-based incentive fee payable (see note 3)		698			792
Interest payable (see note 7)		6,591			3,416
Administrative services payable (see note 3)		2,152			1,946
Other liabilities and accrued expenses		2,492			2,430

Total liabilities	$	1,246,526		$	1,083,935

Commitments and contingencies (see note 10)
Net Assets
Common stock, par value $0.01 per share, 200,000,000 and 200,000,000 common shares authorized, respectively, and 42,260,826 and 42,260,826 shares issued and outstanding, respectively	$	423		$	423
Paid-in capital in excess of par		962,481			962,481
Accumulated distributable net loss		(109,414	)		(110,881	)

Total net assets	$	853,490		$	852,023

Net Asset Value Per Share	$	20.20		$	20.16

See notes to consolidated financial statements.

SLR INVESTMENT CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(in thousands, except share amounts)


	Three months ended				Nine months ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
INVESTMENT INCOME:
Interest:
Companies less than 5% owned	$	19,202	$	20,922	$	62,517	$	66,329
Companies more than 25% owned		2,834		1,355		8,605		4,050
Dividends:
Companies less than 5% owned		—		14		133		37
Companies more than 25% owned		9,078		6,094		28,485		18,777
Other income:
Companies less than 5% owned		1,044		462		3,862		1,175
Companies more than 25% owned		5		4		20		12

Total investment income		32,163		28,851		103,622		90,380

EXPENSES:
Management fees (see note 3)	$	7,142	$	6,176	$	20,842	$	18,416
Performance-based incentive fees (see note 3)		698		—		8,444		1,480
Interest and other credit facility expenses (see note 7)		7,127		6,510		21,502		20,173
Administrative services expense (see note 3)		1,435		1,572		4,170		3,867
Other general and administrative expenses		755		326		2,673		2,123

Total expenses		17,157		14,584		57,631		46,059

Net investment income	$	15,006	$	14,267	$	45,991	$	44,321

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, CASH EQUIVALENTS AND DEBT:
Net realized gain (loss) on investments and cash equivalents (companies less than 5% owned)	$	(127)	$	(278)	$	68	$	(25,044	)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting company

Emerging growth company

SEC Form 10-Q filed by Solar Capital Ltd.