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Common Stock | Pharmaceuticals | 7/20232024-12-310001832148Bank Debt/Senior Secured Loans | ONS MSO, LLC | Health Care Providers & Services | S+575 | 1.00% | 10.34% | 4/2024 | 7/20262024-01-012024-12-310001832148us-gaap:FairValueInputsLevel3Memberck0001832148:MeasurementInputmarketyieldMemberck0001832148:BankDebtSeniorSecuredLoansMembersrt:MinimumMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMember2025-03-310001832148ck0001832148:PinnacleFertilityIncMember2025-03-310001832148us-gaap:FairValueInputsLevel3Memberck0001832148:MeasurementInputmarketyieldMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMemberck0001832148:PreferredEquityMembersrt:MaximumMember2024-12-310001832148Total Investments2024-12-310001832148srt:MinimumMemberck0001832148:FirstLienLifeScienceLoansMember2025-01-012025-03-310001832148Bank Debt/Senior Secured Loans2024-12-310001832148Bank Debt/Senior Secured Loans | Centinel Spine, LLC | Health Care Equipment & Supplies | S+530 | 4.35% | 9.65% | 2/2025 | 3/20302025-03-310001832148Bank Debt/Senior Secured Loans | Plastic Management, LLC | Health Care Providers & Services | S+500 | 1.00% | 9.30% | 8/2021 | 8/20272025-03-310001832148ck0001832148:TypeOfAgreementFourthMembersrt:MaximumMember2025-01-012025-03-3100018321482025-05-050001832148Bank Debt/Senior Secured Loans | ONS MSO, LLC | Health Care Providers & Services | S+575 | 1.00% | 10.34% | 4/2024 | 7/20262024-12-310001832148ck0001832148:InitialUnitholderMember2021-01-050001832148Bank Debt/Senior Secured Loans | FE Advance, LLC | Diversified Financial Services | S+650 | 1.00% | 10.86% | 7/2024 | 7/20272024-12-310001832148ck0001832148:BiotechnologyMember2024-12-310001832148Bank Debt/Senior Secured Loans | Arcutis Biotherapeutics, Inc. | Pharmaceuticals | S+595 | 2.50% | 10.47% | 12/2021 | 8/20292024-01-012024-12-310001832148Preferred Equity | Veronica Holdings, LLC (Vapotherm) | Health Care Equipment & Supplies | 9.00%PIK | 9/20242024-01-012024-12-310001832148Bank Debt/Senior Secured Loans | Urology Management Holdings, Inc. | Health Care Providers & Services | S+550 | 1.00% | 9.83% | 2/2023 | 6/20272024-12-310001832148ck0001832148:ArdelyxIncMember2025-03-310001832148ck0001832148:FirstLienHealthCareCashFlowLoansMember2025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | FE Advance, LLC | Diversified Financial Services | S+650 | 1.00% | 10.86% | 7/2024 | 7/20272024-01-012024-12-310001832148Preferred Equity | Veronica Holdings,LLC (Vapotherm) | Health Care Equipment & Supplies | 9.00%PIK | 9/20242025-01-012025-03-310001832148ck0001832148:SunmedGroupHoldingsLlcMember2024-12-310001832148Bank Debt/Senior Secured Loans | Medrina, LLC | Health Care Providers & Services | S+600 | 1.00% | 10.44% | 10/2023 | 10/20292024-01-012024-12-310001832148ck0001832148:JpmorganChaseBankN.a.Memberus-gaap:SecuredOvernightFinancingRateSofrOvernightIndexSwapRateMemberck0001832148:SpvFacilityMember2025-01-142025-01-140001832148ck0001832148:NonControlledNonAffiliatedInvestmentsMember2025-01-012025-03-310001832148us-gaap:InvestmentsMember2025-01-012025-03-310001832148us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberck0001832148:TransactionPriceValuationTechniqueMemberck0001832148:CommonEquityMember2025-01-012025-03-310001832148Preferred Equity | Veronica Holdings,LLC (Vapotherm) | Health Care Equipment & Supplies | 9.00%PIK | 9/20242025-03-310001832148ck0001832148:UnitedDigestiveMsoParentLlcMember2025-03-310001832148ck0001832148:PreferredEquityMemberus-gaap:InvestmentsMember2023-12-310001832148Bank Debt/Senior Secured Loans | Retina Midco, Inc. | Health Care Providers & Services | S+575 | 1.00% | 10.35% | 12/2023 | 1/20262024-01-012024-12-310001832148Total Warrant2025-03-310001832148ck0001832148:InitialUnitholderMember2021-01-052021-01-050001832148Bank Debt/Senior Secured Loans | Urology Management Holdings, Inc. | Health Care Providers & Services | S+550 | 1.00% | 9.83% | 2/2023 | 6/20272024-01-012024-12-310001832148Common Equity/ Warrants | Meditrina, Inc. 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S+600 | 1.00% | 10.42% | 3/2023 | 3/20292025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | AAH Topco., LLC | Diversified Consumer Services | S+525 | 0.75% | 9.71% | 1/2024 | 12/20272024-01-012024-12-310001832148ck0001832148:TypeOfAgreementSecondMembersrt:MaximumMember2025-01-012025-03-310001832148us-gaap:FairValueInputsLevel3Memberus-gaap:FairValueMeasurementsRecurringMemberck0001832148:TransactionPriceValuationTechniqueMemberck0001832148:CommonEquityMember2025-03-310001832148Bank Debt/Senior Secured Loans | ONS MSO, LLC | Health Care Providers & Services | S+575 | 1.00% | 10.04% | 4/2024 | 7/20262025-03-310001832148Bank Debt/Senior Secured Loans | Ardelyx, Inc | Pharmaceuticals | S+400 | 1.00% | 8.70% | 2/2022 | 7/20282025-03-310001832148ck0001832148:AdviserMember2025-01-012025-03-310001832148srt:MinimumMember2025-03-310001832148us-gaap:FairValueInputsLevel3Memberck0001832148:MeasurementInputmarketyieldMemberus-gaap:FairValueMeasurementsRecurringMemberck0001832148:PreferredEquityMemberus-gaap:IncomeApproachValuationTechniqueMember2025-03-310001832148Bank Debt/Senior Secured Loans | Plastic Management, LLC | Health Care Providers & Services | S+500 | 1.00% | 9.43% | 8/2021 | 8/20272024-12-310001832148Bank Debt/Senior Secured Loans | Pinnacle Fertility, Inc | Health Care Providers & Services | S+500 | 0.75% | 9.51% | 3/2025 | 3/20282025-01-012025-03-310001832148ck0001832148:PersonalCareProductsMember2025-03-310001832148Bank Debt/Senior Secured Loans | Meditrina, Inc. | Health Care Equipment & Supplies | S+550 | 3.45% | 10.02% | 12/2022 | 12/20272024-01-012024-12-310001832148ck0001832148:RealizedInvestmentGainsLossesMemberus-gaap:InvestmentsMemberck0001832148:CommonEquityWarrantsMember2024-01-012024-12-310001832148Bank Debt/Senior Secured Loans | Southern Orthodontic Partners Management, LLC | Health Care Providers & Services | S+525 | 1.00% | 9.58% | 6/2022 | 7/20262024-01-012024-12-310001832148Bank Debt/Senior Secured Loans | Eyesouth Eye Care Holdco LLC | Health Care Providers & Services | S+550 | 1.00% | 9.96% | 10/2022 | 10/20292024-01-012024-12-310001832148Bank Debt/Senior Secured Loans | UVP Management, LLC | Health Care Providers & Services | S+625 | 1.00% | 10.73% | 9/2023 | 9/20252024-01-012024-12-310001832148ck0001832148:UnitedDigestiveMsoParentLlcMember2024-12-310001832148ck0001832148:InvestmentTrancheSpreadFourHundredAndTwentyFiveMember2024-12-310001832148Bank Debt/Senior Secured Loans | AAH Topco., LLC | Diversified Consumer Services | S+525 | 0.75% | 9.71% | 1/2024 | 12/20272024-12-310001832148ck0001832148:JpmorganChaseBankN.a.Membersrt:MinimumMemberck0001832148:SpvFacilityMember2022-02-180001832148ck0001832148:IngCapitalLlcMemberck0001832148:SubscriptionFacilityMember2021-03-190001832148ck0001832148:IngCapitalLlcMemberck0001832148:SubscriptionFacilityMember2025-03-102025-03-100001832148Common Equity/Warrants | Assertio Holdings Inc Common Stock | Pharmaceuticals | 7/20232025-03-310001832148ck0001832148:SpvFacilityMember2024-01-230001832148Bank Debt/Senior Secured Loans | RQM+ Corp | Life Sciences Tools & Services | S+675 | 1.00% | 11.31% | 8/2021 | 8/20292025-03-310001832148ck0001832148:TypeOfAgreementSecondMembersrt:MinimumMember2025-01-012025-03-310001832148ck0001832148:EyesouthEyeCareHoldcoLlcMember2025-03-310001832148ck0001832148:TypeOfAgreementFirstMember2025-01-012025-03-310001832148us-gaap:FairValueInputsLevel2Memberck0001832148:BankDebtSeniorSecuredLoansMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001832148Bank Debt/Senior Secured Loans | Western Veterinary Partners LLC | Diversified Consumer Services | S+500 | 1.00% | 9.33% | 1/2024 | 10/20272024-01-012024-12-310001832148ck0001832148:CvausaManagementLlcMember2025-03-310001832148Bank Debt/Senior Secured Loans | SPR Therapeutics, Inc | Health Care Technology | S+515 | 4.00% | 9.47% | 1/2024 | 2/20292025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | Pinnacle Fertility, Inc | Health Care Providers & Services | S+500 | 0.75% | 9.51% | 3/2025 | 3/20282025-03-310001832148Bank Debt/Senior Secured Loans | Medrina, LLC | Health Care Providers & Services | S+600 | 1.00% | 10.25% | 10/2023 | 10/20292025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | United Digestive MSO Parent, LLC | Health Care Providers & Services | S+575 | 1.00% | 10.08% | 3/2023 | 3/20292024-01-012024-12-310001832148ck0001832148:NonControlledNonAffiliatedInvestmentsMember2024-01-012024-03-310001832148ck0001832148:DiversifiedConsumerServicesMember2024-12-310001832148us-gaap:FairValueMeasurementsRecurringMemberck0001832148:CommonEquityWarrantsMember2025-03-310001832148Bank Debt/Senior Secured Loans | Fertility (ITC) Investment Holdco, LLC | Health Care Providers & Services | S+650 | 1.00% | 11.74% | 1/2023 | 1/20292024-01-012024-12-310001832148us-gaap:InvestmentsMember2025-03-310001832148Bank Debt/Senior Secured Loans | Urology Management Holdings, Inc | Health Care Providers & Services | S+500 | 1.00% | 9.80% | 2/2023 | 6/20272025-01-012025-03-310001832148us-gaap:FairValueInputsLevel3Memberck0001832148:MeasurementInputmarketyieldMemberck0001832148:BankDebtSeniorSecuredLoansMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMembersrt:MaximumMember2024-12-310001832148ck0001832148:JpmorganChaseBankN.a.Memberck0001832148:SpvFacilityMember2025-01-142025-01-140001832148us-gaap:InvestmentsMemberck0001832148:CommonEquityWarrantsMember2025-01-012025-03-310001832148us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberck0001832148:PreferredEquityMember2024-12-310001832148us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberck0001832148:PreferredEquityMember2024-12-310001832148ck0001832148:HealthCareEquipmentSuppliesMember2024-12-310001832148ck0001832148:RevolvingCreditFacilityDueFebruaryTwoThousandAndTwentyEightTheSPVFacilityMember2024-12-310001832148Common Equity/ Warrants | Veronica Holdings, LLC (Vapotherm) Common Units | Health Care Equipment & Supplies | 9/20242025-03-310001832148ck0001832148:SouthernOrthodonicPartnersManagementLlcMember2025-03-310001832148us-gaap:FairValueInputsLevel3Membersrt:WeightedAverageMemberck0001832148:MeasurementInputmarketyieldMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:IncomeApproachValuationTechniqueMemberck0001832148:PreferredEquityMember2025-03-310001832148Bank Debt/Senior Secured Loans | Maxor Acquisition, Inc. | Health Care Providers & Services | S+600 | 1.00% | 10.44% | 3/2023 | 3/20292024-01-012024-12-310001832148ck0001832148:FirstLienLifeScienceLoansMembersrt:MaximumMember2025-03-310001832148ck0001832148:UnrealizedGainLossOnInvestmentsMemberck0001832148:PreferredEquityMemberus-gaap:InvestmentsMember2024-01-012024-12-310001832148Bank Debt/Senior Secured Loans | Arcutis Biotherapeutics, Inc | Pharmaceuticals | S+595 | 2.50% | 10.27% | 12/2021 | 8/20292025-01-012025-03-3100018321482025-01-012025-03-310001832148ck0001832148:MedrinaLlcMember2025-03-310001832148us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPriceVolatilityMemberus-gaap:WarrantMemberus-gaap:MarketApproachValuationTechniqueMemberus-gaap:FairValueMeasurementsRecurringMember2025-03-310001832148us-gaap:FairValueInputsLevel3Memberus-gaap:MeasurementInputPriceVolatilityMemberus-gaap:WarrantMemberus-gaap:MarketApproachValuationTechniqueMemberus-gaap:FairValueMeasurementsRecurringMember2025-01-012025-03-310001832148ck0001832148:UnrealizedGainLossOnInvestmentsMemberus-gaap:InvestmentsMemberck0001832148:CommonEquityWarrantsMember2024-01-012024-12-310001832148ck0001832148:RevolvingCreditFacilityDueFebruaryTwoThousandAndTwentyEightTheSPVFacilityMember2025-03-310001832148Total Investments2025-03-310001832148ck0001832148:RealizedInvestmentGainsLossesMemberus-gaap:InvestmentsMemberck0001832148:PreferredEquityMember2025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | Vapotherm, Inc | Health Care Equipment & Supplies | S+600 | 4.50% | 10.50% | 2/2022| 9/20272025-03-310001832148Bank Debt/Senior Secured Loans | ONS MSO, LLC | Health Care Providers & Services | S+625 | 1.00% | 10.54% | 2/2023 | 7/20262025-01-012025-03-310001832148Bank Debt/Senior Secured Loans | AAH Topco., LLC | Diversified Consumer Services | S+525 | 0.75% | 9.67%| 1/2024 | 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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 March 31, 2025

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

Commission File Number: 814-01382

SLR HC BDC LLC

(Exact name of registrant as specified in its charter)


Delaware	85-1801692
(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
 
     Name of Each Exchange
on Which Registered

     N/A

     N/A

     N/A

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.


Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☐

Emerging growth company	☒

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☒

As of March 31, 2025, there was no established public market for the registrant’s units. The issuer had 1,253,582 units outstanding as of May 5, 2025.

Table of Contents

SLR HC BDC LLC

FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2025

TABLE OF CONTENTS


	Index	Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of March 31, 2025 (unaudited) and December 31, 2024	3
	Consolidated Statements of Operations for the three months ended March 31, 2025 (unaudited) and the three months ended March 31, 2024 (unaudited)	4
	Consolidated Statements of Changes in Unitholders’ Capital for the three months ended March 31, 2025 (unaudited) and the three months ended March 31, 2024 (unaudited)	5
	Consolidated Statements of Cash Flows for the three months ended March 31, 2025 (unaudited) and the three months ended March 31, 2024 (unaudited)	6
	Consolidated Schedule of Investments as of March 31, 2025 (unaudited)	7
	Consolidated Schedule of Investments as of December 31, 2024	10
	Notes to Consolidated Financial Statements (unaudited)	13
	Report of Independent Registered Public Accounting Firm	30
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3.	Defaults Upon Senior Securities	42
Item 4.	Mine Safety Disclosures	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
SIGNATURES		44

Table of Contents

PART I. FINANCIAL INFORMATION

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

Item 1. Financial Statements

SLR HC BDC LLC

Consolidated Statements of Assets and Liabilities

(in thousands, except unit and per unit amounts)


	March 31, 2025 (unaudited)			December 31, 2024
Assets
Investments at fair value:
Non-controlled/non-affiliated investments (cost: $72,616 and $69,345, respectively)	$	73,401		$	70,321
Cash		1,979			2,684
Interest receivable		683			581
Receivable for investments sold		31			6
Prepaid expenses and other assets		26			2
Total assets	$	76,120		$	73,594
Liabilities
Revolving credit facility due February 2028 (the “SPV Facility”) ($31,250 and $26,250 face amounts, respectively, reported net of unamortized debt issuance costs of $541 and $481, respectively. See note 5)	$	30,709		$	25,769
Revolving credit facility due March 2026 (the “Subscription Facility”) ($17,300 and $18,500 face amounts, respectively, reported net of unamortized debt issuance costs of $117 and $27, respectively. See note 5)		17,183			18,473
Management fee payable (see note 3)		—			477
Incentive fee payable (see note 3)		61			515
Administration fee payable (see note 3)		14			14
Interest payable (see note 5)		605			658
Other liabilities and accrued expenses		172			120
Total liabilities	$	48,744		$	46,026
Commitments and contingencies (see note 6)
Unitholders’ Capital
Common Unitholders’ capital (1,253,582 and 1,253,582 units, respectively, issued and outstanding)		27,393			27,393
Accumulated distributable net earnings (loss)		(17	)		175
Total unitholders’ capital	$	27,376		$	27,568
Total liabilities and unitholders’ capital	$	76,120		$	73,594
Net asset value per unit	$	21.84		$	21.99

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Statements of Operations (unaudited)

(in thousands, except unit and per unit amounts)


	Three months ended
	March 31, 2025			March 31, 2024
Investment Income:
Interest income from non-controlled/non-affiliated investments	$	1,948		$	2,167
Dividend income from non-controlled/non-affiliated investments		69			—
Other income from non-controlled/non-affiliated investments		7			—
Total investment income		2,024			2,167
Expenses:
Management fees (see note 3)	$	168		$	154
Incentive fees (see note 3)		53			—
Administration fees (see note 3)		14			12
Interest and other credit facility expenses (see note 5)		974			1,074
Other general and administrative expenses		152			187
Total expenses		1,361			1,427
Net investment income	$	663		$	740
Realized and unrealized gain (loss) on investments and cash equivalents:
Net realized gain (loss) on non-controlled/non-affiliated investments and cash equivalents	$	1		$	(3	)
Net change in unrealized gain (loss) on non-controlled/non-affiliated investments and cash equivalents		(191	)		133
Net realized and unrealized gain (loss) on non-controlled/ non-affiliated investments and cash equivalents		(190	)		130
Net Increase in Unitholders’ Capital Resulting From Operations	$	473		$	870
Net Income Per Unit	$	0.38		$	0.81

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Statements of Changes in Unitholders’ Capital (unaudited)

(in thousands, except unit amounts)


	Three months ended
	March 31, 2025			March 31, 2024
Increase (decrease) in unitholders’ capital resulting from operations:
Net investment income	$	663		$	740
Net realized gain (loss)		1			(3	)
Net change in unrealized gain (loss)		(191	)		133
Net increase in unitholders’ capital resulting from operations		473			870
Distributions to unitholders:
From distributable earnings		(664	)		(540	)
From return of capital		(1	)		—
Net distributions to unitholders		(665	)		(540	)
Increase in unitholders’ capital resulting from capital activity:
Contributions		—			—
Net increase in unitholders’ capital resulting from capital activity		—			—
Total increase (decrease) in unitholders’ capital		(192	)		330
Unitholders’ capital, beginning of period		27,568			22,969
Unitholders’ capital, end of period	$	27,376		$	23,299
Capital unit activity (see note 7):
Units issued		—			—
Net increase from capital unit activity		—			—

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Statements of Cash Flows (unaudited)

(in thousands)


	Three months ended March 31, 2025			Three months ended March 31, 2024
Cash Flows from Operating Activities:
Net increase in unitholders’ capital resulting from operations	$	473		$	870
Adjustments to reconcile net increase in unitholders’ capital resulting from operations to net cash used in operating activities:
Net realized (gain) loss on investments and cash equivalents		(1	)		3
Net change in unrealized (gain) loss on investments		191			(133	)
Deferred financing costs amortization		172			99
Net accretion of discount on investments		(90	)		(117	)
(Increase) decrease in operating assets:
Purchase of investments		(11,030	)		(4,419	)
Proceeds from disposition of investments		7,956			4,812
Capitalization of payment-in-kind income		(106	)		(107	)
Interest receivable		(102	)		(63	)
Prepaid expenses and other assets		(24	)		(50	)
Receivable for investments sold		(25	)		(2	)
Increase (decrease) in operating liabilities:
Payable for cash equivalents purchased		—			(4,955	)
Management fee payable		(477	)		(524	)
Incentive fee payable		(454	)		—
Interest payable		(53	)		(140	)
Other liabilities and accrued expenses		52			16
Net Cash Used in Operating Activities		(3,518	)		(4,710	)
Cash Flows from Financing Activities:
Cash distributions paid		(665	)		(540	)
Proceeds from borrowings		13,278			6,513
Repayments of borrowings		(9,800	)		(5,500	)
Net Cash Provided by Financing Activities		2,813			473
NET DECREASE IN CASH AND CASH EQUIVALENTS		(705	)		(4,237	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		2,684			11,790
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,979		$	7,553
Supplemental disclosure of cash flow information:
Cash paid for interest	$	855		$	1,214

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments (unaudited)

March 31, 2025

(in thousands, except share/unit amounts)


Description	Industry	Spread above Index (2)	Floor			Interest Rate (1)			Acquisition Date	Maturity Date	Par Amount		Cost		Fair Value
Bank Debt/Senior Secured Loans — 258.1%
AAH Topco., LLC(4)	Diversified Consumer Services	S+525		0.75	%		9.67	%	1/2024	12/2027	$	2,027	$	1,992	$	2,027
Arcutis Biotherapeutics, Inc.(3)(4)	Pharmaceuticals	S+595		2.50	%		10.27	%	12/2021	8/2029		3,144		3,270		3,325
Ardelyx, Inc.(3)(4)	Pharmaceuticals	S+400(7)		1.00	%		8.70	%	2/2022	7/2028		3,449		3,487		3,492
BayMark Health Services, Inc.(4)	Health Care Providers & Services	S+500		1.00	%		9.56	%	6/2021	6/2027		3,975		3,958		3,975
Centinel Spine, LLC	Health Care Equipment & Supplies	S+530		4.35	%		9.65	%	2/2025	3/2030		1,897		1,880		1,878
Cerapedics Inc.(4)	Biotechnology	S+620		2.75	%		10.52	%	12/2022	1/2028		3,348		3,385		3,381
CVAUSA Management, LLC(4)	Health Care Providers & Services	S+525		1.00	%		9.57	%	5/2023	5/2029		5,798		5,701		5,798
Exactcare Parent, Inc.(4)	Health Care Providers & Services	S+550		1.00	%		9.80	%	11/2023	11/2029		924		903		924
Eyesouth Eye Care Holdco LLC(4)	Health Care Providers & Services	S+550		1.00	%		9.92	%	10/2022	10/2029		3,466		3,381		3,466
FE Advance, LLC	Financial Services	S+650		1.00	%		10.83	%	7/2024	7/2027		2,407		2,367		2,407
Fertility (ITC) Investment Holdco, LLC(4)	Health Care Providers & Services	S+650		1.00	%		10.74	%	1/2023	1/2029		2,610		2,555		2,610
Foundation Consumer Brands, LLC	Personal Care Products	S+500		1.00	%		9.44	%	1/2025	2/2029		1,844		1,836		1,844
Maxor Acquisition, Inc.(4)	Health Care Providers & Services	S+600		1.00	%		10.42	%	3/2023	3/2029		2,018		1,977		2,018
Meditrina, Inc.(4)	Health Care Equipment & Supplies	S+550		3.45	%		9.82	%	12/2022	12/2027		429		436		437
Medrina, LLC(4)	Health Care Providers & Services	S+600		1.00	%		10.25	%	10/2023	10/2029		804		787		804
OIS Management Services, LLC(4)	Health Care Providers & Services	S+475		0.75	%		9.05	%	12/2023	11/2028		3,383		3,340		3,383
ONS MSO, LLC(4)	Health Care Providers & Services	S+575		1.00	%		10.04	%	4/2024	7/2026		865		860		865
ONS MSO, LLC(4)	Health Care Providers & Services	S+625		1.00	%		10.54	%	2/2023	7/2026		2,489		2,455		2,489
Pinnacle Fertility, Inc.	Health Care Providers & Services	S+500		0.75	%		9.51	%	3/2025	3/2028		2,046		1,966		1,964
Plastic Management, LLC(4)	Health Care Providers & Services	S+500		1.00	%		9.30	%	8/2021	8/2027		3,812		3,787		3,812
RQM+ Corp.(4)	Life Sciences Tools & Services	S+675(8)		1.00	%		11.31	%	8/2021	8/2029		3,989		3,954		3,829
Southern Orthodontic Partners Management, LLC(4)	Health Care Providers & Services	S+550		1.00	%		9.80	%	6/2022	7/2026		3,614		3,581		3,614
SPR Therapeutics, Inc.(4)	Health Care Technology	S+515		4.00	%		9.47	%	1/2024	2/2029		751		751		776
SunMed Group Holdings, LLC(4)	Health Care Equipment & Supplies	S+550		0.75	%		9.89	%	6/2021	6/2028		1,925		1,908		1,925
United Digestive MSO Parent, LLC(4)	Health Care Providers & Services	S+575		1.00	%		10.05	%	3/2023	3/2029		1,042		1,019		1,042
Urology Management Holdings, Inc.(4)	Health Care Providers & Services	S+550		1.00	%		9.80	%	2/2023	6/2027		1,187		1,166		1,187
UVP Management, LLC(4)	Health Care Providers & Services	S+625		1.00	%		10.70	%	9/2023	9/2025		1,402		1,393		1,402
Vapotherm, Inc.	Health Care Equipment & Supplies	S+600		4.50	%		10.50	%	2/2022	9/2027		1,238		1,279		1,285
WCI-BXC Purchaser, LLC(4)	Distributors	S+625		0.75	%		10.55	%	11/2023	11/2030		830		812		830
Western Veterinary Partners LLC(4)	Diversified Consumer Services	S+500		1.00	%		9.30	%	1/2024	10/2027		3,871		3,823		3,871
Total Bank Debt/Senior Secured Loans													$	70,009	$	70,660

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments (unaudited) (continued)

March 31, 2025

(in thousands, except share/unit amounts)


Description	Industry	Interest Rate	Acquisition Date	Shares/ Units/ Warrants		Cost		Fair Value
Preferred Equity—9.8%
Veronica Holdings, LLC (Vapotherm)	Health Care Equipment & Supplies	9.00% PIK	9/2024		1,172,897	$	2,570	$	2,681
Total Preferred Equity						$	2,570	$	2,681
Common Equity/ Warrants—0.2%
Assertio Holdings, Inc. Common Stock(6)*	Pharmaceuticals		7/2023		1,088	$	4	$	1
Meditrina, Inc. Warrants*	Health Care Equipment & Supplies		12/2022		4,079		3		2
Veronica Holdings, LLC (Vapotherm) Common Units*	Health Care Equipment & Supplies		9/2024		26,336		30		57
Total Common Equity/Warrants						$	37	$	60
Total Investments(5) — 268.1%						$	72,616	$	73,401
Liabilities in Excess of Other Assets — (168.1%)									(46,025	)
Net Assets — 100.0%								$	27,376

(1)

Floating rate debt investments typically bear interest at a rate determined by reference to either the Secured Overnight Financing Rate (“SOFR” or “S”) or the prime index rate (“PRIME” or “P”), and which typically reset monthly, quarterly or semi-annually. For each debt investment, the Company has provided the current interest rate in effect as of March 31, 2025.

(2)

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the SOFR or PRIME rate. These instruments are often subject to a SOFR or PRIME rate floor.

(3)

Indicates assets that the Company believes may not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (the “1940 Act”). If we fail to invest a sufficient portion of our assets in qualifying assets, we could be prevented from making 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 March 31, 2025, on a fair value basis, non-qualifying assets in our portfolio represented 9.0% of the total assets of the Company.

(4)

Indicates an investment that is wholly or partially held by the Company through its wholly-owned financing subsidiary SLR HC BDC SPV LLC (the “SPV”). Such investments are pledged as collateral under the SPV Facility (see Note 5 to the consolidated financial statements) and are not generally available to creditors, if any, of the Company.

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments (unaudited) (continued)

March 31, 2025

(in thousands, except share/unit amounts)

(5)

Aggregate net unrealized appreciation for U.S. federal income tax purposes is $38; aggregate gross unrealized appreciation and depreciation for U.S. federal tax purposes is $996 and $958, respectively, based on a tax cost of $73,363. 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. All investments are Level 3 unless otherwise indicated.

(6)

Denotes a Level 1 investment.

(7)

Certain tranches have a spread of S+795 and certain tranches have a spread of S+425.

(8)

Spread is S+200 Cash / 4.75% PIK.

* Non-income producing security.


Industry Classification	Percentage of Total Investments (at fair value) as of March 31, 2025
Health Care Providers & Services		53.6	%
Health Care Equipment & Supplies		11.3	%
Pharmaceuticals		9.3	%
Diversified Consumer Services		8.0	%
Life Science Tools & Services		5.2	%
Biotechnology		4.6	%
Financial Services		3.3	%
Personal Care Products		2.5	%
Distributors		1.1	%
Health Care Technology		1.1	%
Total Investments		100.0	%

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments

December 31, 2024

(in thousands, except share/unit amounts)


Description	Industry	Spread above Index (2)	Floor			Interest Rate (1)			Acquisition Date	Maturity Date	Par Amount		Cost		Fair Value
Bank Debt/Senior Secured Loans — 245.4%
AAH Topco., LLC(4)	Diversified Consumer Services	S+525		0.75	%		9.71	%	1/2024	12/2027	$	1,521	$	1,494	$	1,521
Arcutis Biotherapeutics, Inc.(3)(4)	Pharmaceuticals	S+595		2.50	%		10.47	%	12/2021	8/2029		3,144		3,259		3,317
Ardelyx, Inc.(3)(4)	Pharmaceuticals	S+400(7)		1.00	%		8.70	%	2/2022	7/2028		3,449		3,477		3,492
BayMark Health Services, Inc.(4)	Health Care Providers & Services	S+500		1.00	%		9.59	%	6/2021	6/2027		3,985		3,966		3,985
Cerapedics Inc.(4)	Biotechnology	S+620		2.75	%		10.72	%	12/2022	1/2028		3,348		3,380		3,381
CVAUSA Management, LLC(4)	Health Care Providers & Services	S+650		1.00	%		10.84	%	5/2023	5/2029		1,674		1,633		1,674
Exactcare Parent, Inc.(4)	Health Care Providers & Services	S+550		1.00	%		10.03	%	11/2023	11/2029		927		905		927
Eyesouth Eye Care Holdco LLC(4)	Health Care Providers & Services	S+550		1.00	%		9.96	%	10/2022	10/2029		3,363		3,278		3,363
FE Advance, LLC	Diversified Financial Services	S+650		1.00	%		10.86	%	7/2024	7/2027		2,407		2,363		2,407
Fertility (ITC) Investment Holdco, LLC(4)	Health Care Providers & Services	S+650		1.00	%		11.74	%	1/2023	1/2029		2,617		2,559		2,617
Maxor Acquisition, Inc.(4)	Health Care Providers & Services	S+600		1.00	%		10.44	%	3/2023	3/2029		2,024		1,981		2,024
Meditrina, Inc.(4)	Health Care Equipment & Supplies	S+550		3.45	%		10.02	%	12/2022	12/2027		468		473		475
Medrina, LLC(4)	Health Care Providers & Services	S+600		1.00	%		10.44	%	10/2023	10/2029		690		676		690
OIS Management Services, LLC(4)	Health Care Providers & Services	S+475		0.75	%		9.07	%	12/2023	11/2028		3,225		3,182		3,225
ONS MSO, LLC(4)	Health Care Providers & Services	S+575		1.00	%		10.34	%	4/2024	7/2026		867		861		867
ONS MSO, LLC(4)	Health Care Providers & Services	S+625		1.00	%		10.84	%	2/2023	7/2026		2,495		2,455		2,495
Outset Medical, Inc.(4)	Health Care Equipment & Supplies	S+515		2.75	%		9.67	%	11/2022	11/2027		3,909		3,963		4,055
Plastic Management, LLC(4)	Health Care Providers & Services	S+500		1.00	%		9.43	%	8/2021	8/2027		3,822		3,794		3,822
Retina Midco, Inc.(4)	Health Care Providers & Services	S+575		1.00	%		10.35	%	12/2023	1/2026		3,831		3,787		3,908
RQM+ Corp.(4)	Life Sciences Tools & Services	S+675(8)		1.00	%		11.34	%	8/2021	8/2029		3,952		3,930		3,794
Southern Orthodontic Partners Management, LLC(4)	Health Care Providers & Services	S+525		1.00	%		9.58	%	6/2022	7/2026		3,570		3,532		3,570
SPR Therapeutics, Inc.(4)	Health Care Technology	S+515		4.00	%		9.67	%	1/2024	2/2029		501		502		517
SunMed Group Holdings, LLC(4)	Health Care Equipment & Supplies	S+550		0.75	%		10.19	%	6/2021	6/2028		1,930		1,911		1,930
United Digestive MSO Parent, LLC(4)	Health Care Providers & Services	S+575		1.00	%		10.08	%	3/2023	3/2029		994		971		994
Urology Management Holdings, Inc.(4)	Health Care Providers & Services	S+550		1.00	%		9.83	%	2/2023	6/2027		1,190		1,167		1,190
UVP Management, LLC(4)	Health Care Providers & Services	S+625		1.00	%		10.73	%	9/2023	9/2025		1,405		1,392		1,405
Vapotherm, Inc.	Health Care Equipment & Supplies	S+600		4.50	%		10.52	%	2/2022	9/2027		1,238		1,274		1,281
WCI-BXC Purchaser, LLC(4)	Distributors	S+625		0.75	%		10.78	%	11/2023	11/2030		832		813		832
Western Veterinary Partners LLC(4)	Diversified Consumer Services	S+500		1.00	%		9.33	%	1/2024	10/2027		3,880		3,829		3,880
Total Bank Debt/Senior Secured Loans													$	66,807	$	67,638

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments (continued)

December 31, 2024

(in thousands, except share/unit amounts)


Description	Industry	Interest Rate	Acquisition Date	Maturity Date	Shares/ Warrants		Cost		Fair Value
Preferred Equity—9.5%
Veronica Holdings, LLC (Vapotherm)	Health Care Equipment & Supplies	9.00% PIK	9/2024			1,172,897	$	2,501	$	2,622
Total Preferred Equity							$	2,501	$	2,622
Common Equity/ Warrants—0.2%
Assertio Holdings, Inc. Common Stock(6)*	Pharmaceuticals		7/2023			1,088	$	4	$	1
Meditrina, Inc. Warrants*	Health Care Equipment & Supplies		12/2022			4,079		3		3
Veronica Holdings, LLC (Vapotherm) Common Units*	Health Care Equipment & Supplies		9/2024			26,336		30		57
Total Common Equity/Warrants							$	37	$	61
Total Investments(5) — 255.1%							$	69,345	$	70,321
Liabilities in Excess of Other Assets — (155.1%)										(42,753	)
Net Assets — 100.0%									$	27,568

(1)

Floating rate debt investments typically bear interest at a rate determined by reference to either the Secured Overnight Financing Rate or the prime index rate, and which typically reset monthly, quarterly or semi-annually. For each debt investment, we have provided the current interest rate in effect as of December 31, 2024.

(2)

Floating rate instruments accrue interest at a predetermined spread relative to an index, typically the SOFR or PRIME rate. These instruments are often subject to a SOFR or PRIME rate floor.

(3)

Indicates assets that the Company believes may not represent “qualifying assets” under Section 55(a) of the 1940 Act. If we fail to invest a sufficient portion of our assets in qualifying assets, we could be prevented from making 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 December 31, 2024, on a fair value basis, non-qualifying assets in our portfolio represented 9.3% of the total assets of the Company.

(4)

Indicates an investment that is wholly or partially held by the Company through its wholly-owned financing subsidiary SLR HC BDC SPV LLC. Such investments are pledged as collateral under the SPV Facility (see Note 5 to the consolidated financial statements) and are not generally available to creditors, if any, of the Company.

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Consolidated Schedule of Investments (continued)

December 31, 2024

(in thousands, except share/unit amounts)

(5)

Aggregate net unrealized appreciation for U.S. federal income tax purposes is $229; aggregate gross unrealized appreciation and depreciation for U.S. federal tax purposes is $1,191 and $962, respectively, based on a tax cost of $70,092. The Company generally acquires its investments in private transactions exempt from registration under 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. All investments are Level 3 unless otherwise indicated.

(6)

Denotes a Level 1 investment.

(7)

Certain tranches have a spread of S+795, certain tranches have a spread of S+425 and certain tranches have a spread of S+400.

(8)

Spread is S+200 Cash / 4.75% PIK.

* Non-income producing security.


Industry Classification	Percentage of Total Investments (at fair value) as of December 31, 2024
Health Care Providers & Services		52.3	%
Health Care Equipment & Supplies		14.8	%
Pharmaceuticals		9.7	%
Diversified Consumer Services		7.7	%
Life Science Tools & Services		5.4	%
Biotechnology		4.8	%
Diversified Financial Services		3.4	%
Distributors		1.2	%
Health Care Technology		0.7	%
Total Investments		100.0	%

See notes to consolidated financial statements.

Table of Contents

SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited)

March 31, 2025

(in thousands, except unit and per unit amounts)

Note 1. Organization

SLR HC BDC LLC (the “Company”, “we”, “us” or “our”) is a Delaware limited liability company formed on July 7, 2020 as an externally managed, non-diversified closed-end 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 applies the guidance in the Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 946. In addition, for U.S. federal income tax purposes, the Company has elected to be treated, and intends to qualify annually, as a regulated investment company (“RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). As a BDC and a RIC, the Company is required to comply with certain regulatory requirements. The Company was formed primarily to provide investors with attractive long-term returns through investments made pursuant to the investment strategy of the Company described below. SLR Capital Partners, LLC (the “Adviser” or “SLR”) serves as the Company’s investment adviser pursuant to an investment management agreement with the Company (as amended, restated or otherwise modified from time to time, the “Investment Management Agreement”).

In connection with the Company’s formation, the Company issued and sold 40 units to the Adviser (the “Initial Unitholder”), which were acquired for an initial capital contribution of $1 on January 5, 2021 in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act of 1933, as amended. The Company’s capital commitments total $83,850. The Company’s initial drawdown occurred on March 8, 2021 with the sale and issuance of units at an aggregate purchase price of $3,500 or $29.30 per unit. Prior to the issuance of units on March 8, 2021, the Initial Unitholder’s initial seed capital was withdrawn from the Company and its units were canceled. As of March 31, 2025, $28,000 of capital commitments were drawn and $55,850 were unfunded.

The Company pursues a corporate lending strategy focused on direct sourcing, underwriting and managing a diverse portfolio of private loans to U.S. healthcare companies. The Company’s investments in portfolio companies are referred to herein as “Portfolio Investments”. The Company’s principal focus is to invest in two differentiated strategies: first lien healthcare cash flow loans and first lien life science loans. First lien healthcare cash flow loans are expected to be made to private equity-owned upper-middle-market healthcare companies with EBITDA (defined below) between approximately $25,000 and $100,000. These aggregate loan tranches are expected to range in size from $100,000 to $300,000. Healthcare cash flow loans are generally expected to have a five-to-six-year final maturity and are often repaid within three years. First lien life science loans are expected to be made to venture-capital owned pre-commercialization or early revenue drug and device development companies. These aggregate loan tranches are expected to range in size from $25,000 to $150,000. Loans to life science companies are generally expected to have an initial interest-only period and then straight-line amortization with a four-to-five-year final maturity. These loans are often repaid within two to three years. The Company expects to primarily invest in non-investment grade debt instruments. The Company also expects that some of its investments will contain delayed-draw term loan type features (which is a legally binding commitment by the Company to fund additional term loans to a borrower in the future) and/or other types of unfunded commitments.

The Company is organized for investors who may invest through one or more investment funds created by one or more financial institutions unaffiliated with the Company (collectively, the “Access Fund”). The Company was permitted to hold closings at any time during the Company’s offering period, which ended on December 31, 2022. The term of the Company is expected to be seven years from the Company’s final closing with the Access Fund, which was held on February 11, 2021, unless the Company is terminated earlier or causes its units (or securities into which the units are converted or exchanged) to be listed for trading on a national securities exchange (an “Exchange Listing”) as set forth in the Limited Liability Company Agreement of the Company (as amended, restated or otherwise modified from time to time, the “LLC Agreement”), but may be extended by the board of directors for up to two consecutive one-year periods upon approval of the Company’s independent directors and the approval of unitholders of the Company (“Unitholders”), which approval will be obtained through a non-1940 Act vote as described in Item 11 of the Company’s Form 10. The Company may be dissolved and its affairs wound up prior to the end of the term under the circumstances set forth in the LLC Agreement. The fiscal year end of the Company is December 31.

At any time prior to the end of the term, subject to the requirements of the 1940 Act and applicable law, the board of directors may, without the approval of Unitholders, cause the Company’s units (or securities into which the units are converted or exchanged) to be listed for trading on a national securities exchange. In connection with any such Exchange Listing, subject to the requirements of the 1940 Act and applicable law, the board of directors may, without the approval of Unitholders, cause the Company to complete (i) an initial public offering, (ii) a merger with another entity, including an affiliated company, subject to any limitations under the 1940 Act, (iii) the sale, exchange or disposition of all or a portion of the assets of the Company, or (iv) a conversion of the Company into a

Table of Contents

SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

corporation incorporated in a state determined by the board of directors, either through a conversion in accordance with applicable law, a merger with or into an existing corporation or otherwise in which all units will be converted into or exchanged for shares of common stock of the resulting corporation. If the Company is unable to effectuate an Exchange Listing prior to the end of the term, the Company will use commercially reasonable efforts to wind down or liquidate pursuant to the procedures set forth in the LLC Agreement.

Note 2. Summary of Significant Accounting Policies

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles (“GAAP”) and include the accounts of the Company and certain wholly-owned subsidiaries. The consolidated financial statements reflect all adjustments and reclassifications which, in the opinion of management, are necessary for the fair presentation of the results of the operations and financial condition for the periods presented. All significant intercompany balances and transactions have been eliminated.

Interim consolidated financial statements are prepared in accordance with GAAP for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-X, as appropriate. Accordingly, they may not include all of the information and notes required by GAAP for annual consolidated financial statements. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements and the reported amounts of income and expenses during the reported period. Changes in the economic environment, financial markets and any other parameters used in determining these estimates could cause actual results to differ materially. The current period’s results of operations will not necessarily be indicative of results that ultimately may be achieved for the fiscal year ending on December 31, 2025.

In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for the fair presentation of consolidated financial statements, have been included.

The significant accounting policies consistently followed by the Company are:

(a)

Investment transactions are accounted for on the trade date.

(b)

In accordance with GAAP and the 1940 Act, the Company’s assets will generally be valued as follows:

(i)

securities or other instruments (other than as referred to in clauses (ii) and (iii) below) for which market quotes are readily available and deemed to represent fair value under GAAP will be valued based on quotes obtained from a quotation reporting system, market makers or pricing services (when deemed to represent fair value under GAAP). A market quotation is readily available for a security only when that quotation is a quoted price (unadjusted) in active markets for identical investments that the Company can access at the measurement date, provided that a quotation will not be readily available if it is not reliable. If the Company anticipates using a market quotation for a security, it will also monitor for circumstances that may necessitate the use of fair value, such as significant events that may cause concern over the reliability of a market quotation;

(ii)

exchange-traded options, futures and options on futures will be valued at the settlement price determined by the exchange or through the use of a model such as Black-Scholes;

(iii)

short-term investments with maturities of sixty (60) days or less generally will be valued at amortized cost; and

(iv)

securities, loans or other instruments for which market quotes are not readily available or reliable under GAAP will be valued as described below:

the quarterly valuation process begins with each portfolio company or investment being initially valued by the investment professionals of SLR responsible for the Portfolio Investment;

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

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SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

the audit committee of the board of directors (the “Board”) reviews the preliminary valuations of the Adviser and third-party valuation specialist, if any, and responds to the valuation recommendations to reflect any comments; and

the Board discusses valuations and determines the fair value of each investment in the Company’s portfolio in good faith based on the input of the Adviser, the audit committee, and third-party valuation specialist, if any, which may from time to time be engaged by the Board.

The valuation principles set forth above may be modified from time to time without notice to Unitholders, in whole or in part, as determined by the Board in its sole discretion.

The Board will also (1) periodically assess and manage valuation risks; (2) establish and apply fair value methodologies; (3) test fair value methodologies; (4) oversee and evaluate third-party pricing services, as applicable; (5) oversee the reporting required by Rule 2a-5 under the 1940 Act; and (6) maintain recordkeeping requirements under Rule 2a-5.

When an external event such as a purchase transaction, public offering or subsequent equity sale occurs, the Company will consider the pricing indicated by the external event to corroborate the valuation. Due to the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the investments may differ significantly from the values that would have been used had a readily available market value existed for such investments, and the differences could be material.

Investments are valued utilizing a market approach, an income approach, or both approaches, as appropriate. However, in accordance with ASC 820-10, certain investments that qualify as investment companies in accordance with ASC 946 may be valued using net asset value as a practical expedient for fair value. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities (including a business). The income approach uses valuation approaches to convert future amounts (for example, cash flows or earnings) to a single present amount (discounted). The measurement is based on the value indicated by current market expectations about those future amounts. In following these approaches, the types of factors that we may take into account in fair value pricing our investments include, as relevant: available current market data, including relevant and applicable market trading and transaction comparables, applicable market yields and multiples, security covenants, call protection provisions, the nature and realizable value of any collateral, the portfolio company’s 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, and enterprise values, among other factors. When available, broker quotations and/or quotations provided by pricing services are considered as an input in the valuation process. For the three months ended March 31, 2025, there has been no change to the Company’s 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:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities, accessible by the Company at the measurement date.

Level 2: Quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other observable inputs other than quoted prices.

Level 3: 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. The exercise of judgment is based in part on our knowledge of the asset class and our prior experience.

(c)

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

(d)

The Company records dividend income and interest, adjusted for amortization of premium and accretion of discount, on an accrual basis. Loan origination fees, original issue discount, and market discounts are capitalized, and we amortize such amounts into income using the effective interest method. Upon the prepayment of a loan, any unamortized loan origination fees are recorded as interest income. We record call premiums on loans repaid as interest income when we

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SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

receive such amounts. Capital structuring fees, amendment fees, consent fees, and any other non-recurring fee income as well as management fees and other fee income for services rendered, if any, are recorded as other income when earned.

(e)

The Company intends to comply with the applicable provisions of the Code pertaining to RICs to make distributions of taxable income sufficient to relieve it of substantially all U.S. federal income taxes. The Company, at its discretion, may carry forward taxable income in excess of calendar year distributions and pay a 4% excise tax on this income. The Company will accrue excise tax on such estimated excess taxable income as appropriate.

(f)

Book and tax basis differences relating to Unitholder distributions and other permanent book and tax differences are typically reclassified among the Company’s capital accounts annually. In addition, the character of income and gains to be distributed is determined in accordance with income tax regulations that may differ from GAAP.

(g)

Distributions to Unitholders are recorded as of the record date. The amount to be paid out as a distribution is determined by the Board. Net realized capital gains, if any, are generally distributed or deemed distributed at least annually.

(h)

In accordance with Regulation S-X and ASC Topic 810—Consolidation, the Company consolidates its interest in controlled investment company subsidiaries, financing subsidiaries and certain wholly-owned holding companies that serve to facilitate investment in portfolio companies. In addition, the Company may also consolidate any controlled operating companies substantially all of whose business consists of providing services to the Company.

(i)

The accounting records of the Company are maintained in U.S. dollars. Any assets and liabilities denominated in foreign currencies are translated into U.S. dollars based on the rate of exchange of such currencies against the U.S. dollar on the date of valuation. The Company will not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations would be included with the net unrealized gain or loss from investments. The Company’s investments in foreign securities, if any, may involve certain risks, including without limitation: foreign exchange restrictions, expropriation, taxation or other political, social or economic risks, all of which could affect the market and/or credit risk of the investment. In addition, changes in the relationship of foreign currencies to the U.S. dollar can significantly affect the value of these investments in terms of U.S. dollars and therefore the earnings of the Company.

(j)

In accordance with ASC 835-30, the Company reports origination and other expenses related to certain debt issuances, if any, as a direct deduction from the carrying amount of the debt liability. Applicable expenses are deferred and amortized using either the effective interest method or the straight-line method over the stated life. The straight-line method may be used on revolving facilities and/or when it approximates the effective yield method.

(k)

The Company records expenses related to applicable equity offering costs as a charge to capital upon the sale of units, in accordance with ASC 946-20-25.

(l)

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 and/or when it is no longer probable that principal or interest cash payments will be collected. Such non-accrual investments are restored to accrual status if past due principal and interest are paid in cash, and in management’s judgment, are likely to continue timely payment of their remaining principal and interest obligations. Cash interest payments received on such investments may be recognized as income or applied to principal depending on management’s judgment.

(m)

The Company records expenses directly related to its organization as incurred.

(n)

The Company defines cash equivalents as securities that are readily convertible into known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only securities with a maturity of three months or less would qualify, with limited exceptions. The Company believes that certain U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities would qualify as cash equivalents.

Recent Accounting Pronouncements

The Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the accompanying consolidated financial statements.

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SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

Note 3. Agreements and Related Party Transactions

Pursuant to the Investment Management Agreement we have entered into with the Adviser, we intend to pay the Adviser certain management and incentive fees prior to and following an Exchange Listing. Prior to an Exchange Listing, the Adviser has been appointed to provide administrative and coordination services to the Company (in such capacity, the “Administrative Coordinator”). The Company will pay an administration fee to the Administrative Coordinator for such administrative and coordination services. Following an Exchange Listing, we intend to enter into a separate administration agreement with an affiliate pursuant to which administrative services would be provided to the Company, as described further below. The cost of the base management fee, the incentive fee and the administration fee will ultimately be borne by our Unitholders.

Management Fees

The Company will pay the Adviser a management fee prior to an Exchange Listing (as the same may be adjusted pursuant to the LLC Agreement and the Investment Management Agreement, the “Pre-Exchange Listing Management Fee”) and a management fee following an Exchange Listing (as the same may be adjusted pursuant to the LLC Agreement and the Investment Management Agreement, the “Post-Exchange Listing Management Fee” and, together with the Pre-Exchange Listing Management Fee, the “Management Fee”). The Management Fee will be payable quarterly in arrears, as follows:

•

Pre-Exchange Listing. Prior to an Exchange Listing, the Pre-Exchange Listing Management Fee will be calculated as of the close of business on the last day of each calendar quarter in an amount equal to 1.50% per annum of Invested Capital (defined as, as of any date, the sum of (i) capital contributions to the Company used to make Portfolio Investments and (ii) the total amount of credit drawn on subscription or similarly structured credit facilities).

•

Post-Exchange Listing. Following an Exchange Listing, the Post-Exchange Listing Management Fee will be an amount equal to 1.50% per annum of the average value of the Company’s total assets at the end of the two most recently completed calendar quarters; provided, however, the Post-Exchange Listing Management Fee will be calculated at an annual rate of 1.00% of the average value of the Company’s total assets at the end of the two most recently completed calendar quarters that exceeds the product of (i) 200% and (ii) the value of the Company’s total net assets at the end of the immediately preceding calendar quarter.

The Management Fee will be appropriately adjusted for any stub period. The Adviser may arrange for the Company to direct to a placement agent any portion of the Management Fee which the Adviser is owed for purposes of paying any placement fee that the Adviser owes to such placement agent.

The Adviser will have the right, in its sole discretion, to waive or reduce, as well as recoup in a subsequent period, the Management Fee to which the Adviser is entitled in respect of all Unitholders’ units in any particular calendar quarter. Any such Management Fee may be recouped by the Adviser in a future calendar quarter within three years of the date of the applicable waiver of the Management Fee. No Management Fees have been waived as of March 31, 2025.

Incentive Fee

Distributions. Prior to an Exchange Listing, the Company makes distributions out of two categories: Current Proceeds and Disposition Proceeds (collectively referred to as “Investment Proceeds”). “Disposition Proceeds” means all amounts received by the Company upon the disposition of an investment, including full or partial repayments or amortization of principal (but excluding Current Proceeds). “Current Proceeds” means all proceeds from investments, including interest income, fee income, prepayment fees and exit fees, other than Disposition Proceeds, less Company expenses. The Adviser apportions each Unitholder’s pro rata share of Investment Proceeds between Disposition Proceeds and Current Proceeds.

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SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

Pre-Exchange Listing Incentive Fee. Prior to an Exchange Listing, and subject to availability, the Company will cause distributable cash to be distributed to Unitholders and to be paid to the Adviser as an incentive fee (the “Pre-Exchange Listing Incentive Fee”). Amounts of Investment Proceeds apportioned to Unitholders are divided between and distributed to Unitholders, on the one hand, and the Adviser, on the other hand, in the following amounts and order of priority:

(i) Disposition Proceeds apportioned to Unitholders shall be divided between and distributed to Unitholders, on the one hand, and paid to the Adviser as a Pre-Exchange Listing Incentive Fee, on the other hand, in the following amounts and order of priority:

(A) First, Return of Capital Contributions: 100% to such Unitholder until such Unitholder has received cumulative distributions of Investment Proceeds pursuant to this clause (A) equal to such Unitholder’s total capital contributions to the Company (including amounts contributed to pay Pre-Exchange Listing Management Fees, Pre-Exchange Listing Administration Fees (defined below), Organizational Expenses (defined below) and other Company expenses);

(B) Second, Unitholder Preferred Return: 100% of all remaining Disposition Proceeds to Unitholders until they have each received cumulative distributions of Investment Proceeds, without duplication, pursuant to this clause (B) and clause (D) below and clauses (ii)(A) and (ii)(C) below equal to 6% per annum, compounded annually, on Unitholders’ capital contributions to the Company (including amounts contributed to pay Pre-Exchange Listing Management Fees, Pre-Exchange Listing Administration Fees, Organizational Expenses and other Company expenses), determined on the basis of all capital contributions made by such Unitholder and considering all distributions (including the subject distribution) under this “—Pre-Exchange Listing Incentive Fee” made to such Unitholder (computed from the dates that such capital contributions were due (or, if actually made later, the date on which such capital contributions were actually made) until the date that the Company, in its sole discretion, designates distributable cash as available for distribution or, if no such designation is made, the occurrence of an Event of Dissolution, as defined in the LLC Agreement) (the “Preferred Return”);

(C) Third, Adviser Catch Up: 100% of all remaining Disposition Proceeds to the Adviser as a Pre-Exchange Listing Incentive Fee, until the Adviser has received payments of Investment Proceeds with respect to Unitholders pursuant to this clause (C) and clause (ii)(B) below equal to 10% of the total amounts due to Unitholders and earned by the Adviser pursuant to clause (B) above and this clause (C) and clauses (ii)(A) and (ii)(B) below; and

(D) Fourth, 90%/10%: 90% of all remaining Disposition Proceeds to Unitholders and 10% of all remaining Disposition Proceeds to the Adviser as a Pre-Exchange Listing Incentive Fee.

In no event will the Adviser receive amounts of Pre-Exchange Listing Incentive Fees under clauses (i)(C) and (i)(D) above in excess of the percentage of the Disposition Proceeds actually distributed to Unitholders pursuant to clauses (i)(B), (i)(C) and (i)(D) above.

In no event will the Adviser receive amounts attributable to Disposition Proceeds that, as of any distribution or payment date, exceed 20% of cumulative realized capital gains net of all cumulative realized capital losses and unrealized capital depreciation.

(ii) Current Proceeds apportioned to Unitholders shall be divided between and distributed to Unitholders, on the one hand, and paid to the Adviser as a Pre-Exchange Listing Incentive Fee, on the other hand, in the following amounts and order of priority:

(A) First, Unitholder Preferred Return: 100% of all Current Proceeds to Unitholders until Unitholders have received cumulative distributions of Investment Proceeds, without duplication, pursuant to this clause (A) and clause (C) below and pursuant to clause (i)(B) and clause (i)(D) above equal to the Preferred Return;

(B) Second, Adviser Catch Up: 100% of all remaining Current Proceeds to the Adviser as a Pre-Exchange Listing Incentive Fee until the Adviser has received payments of Investment Proceeds with respect to Unitholders pursuant to this clause (B) and clause (i)(C) above equal to 10% of the total amounts due to Unitholders and earned by the Adviser pursuant to clause (A) above and this clause (B) and pursuant to clause (i)(B) and clause (i)(C) above; and

(C) Third, 90%/10%: 90% of all remaining Current Proceeds to Unitholders and 10% of all remaining Current Proceeds to the Adviser as a Pre-Exchange Listing Incentive Fee.

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SLR HC BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

March 31, 2025

(in thousands, except unit and per unit amounts)

In no event will the Adviser receive amounts of Pre-Exchange Listing Incentive Fees under clauses (ii)(B) and (ii)(C) above in excess of the percentage of the Current Proceeds actually distributed to Unitholders pursuant to clauses (ii)(A), (ii)(B) and (ii)(C) above.

Post-Exchange Listing Incentive Fee. Following an Exchange Listing, the Company will pay an incentive fee to the Adviser consisting of two parts, as follows (the “Post-Exchange Listing Incentive Fee” and, together with the Pre-Exchange Listing Incentive Fee, the “Incentive Fee”):

(i)

Pre-Incentive Fee Net Investment Income. One part will be calculated and payable quarterly in arrears based on the 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 the Company receives from portfolio companies) accrued by the Company during the calendar quarter, minus the Company’s operating expenses for the quarter (including the Post-Exchange Listing Management Fee, expenses payable under an administration agreement, and any interest expense and dividends paid on any issued and outstanding preferred stock, but excluding the Post-Exchange Listing Incentive Fee).

Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Company’s net assets at the end of the immediately preceding calendar quarter, will be compared to a “hurdle rate” of 1.50% per quarter (6.00% annualized). The Company’s Pre-Incentive Fee Net Investment Income used to calculate this part of the Post-Exchange Listing Incentive Fee is also included in the amount of its gross assets used to calculate the 1.50% Post-Exchange Listing Management Fee.

The Company will pay the Adviser a Post-Exchange Listing Incentive Fee with respect to the Company’s Pre-Incentive Fee Net Investment Income in each calendar quarter as follows:

no Post-Exchange Listing Incentive Fee in any calendar quarter in which the Company’s Pre-Incentive Fee Net Investment Income does not exceed the quarterly hurdle rate of 1.50%;

ii.

100% of the Company’s 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 1.875% in any calendar quarter (7.5% annualized); this portion of the Pre-Incentive Fee Net Investment Income (which exceeds the hurdle but is less than 1.875%) is referred to herein as the “catch-up.” The “catch-up” is meant to provide the Adviser with 20% of the Company’s Pre-Incentive Fee Net Investment Income as if a hurdle did not apply if this Pre-Incentive Fee Net Investment Income exceeds 1.875% in any calendar quarter; and

iii.

20% of the amount of the Company’s Pre-Incentive Fee Net Investment Income, if any, that exceeds 1.875% in any calendar quarter (7.5% annualized) payable to the Adviser (once the hurdle is reached and the catch-up is achieved, 20% of all Pre-Incentive Fee Net Investment Income thereafter is allocated to the Adviser).

These calculations will be appropriately pro-rated for any period of less than three months.

(ii) Capital Gains Fee. The second part of the Post-Exchange Listing Incentive Fee, the “Capital Gains Fee”, will be determined and payable in arrears as of the end of each calendar year (or upon termination of the Investment Management Agreement as set forth below), commencing as of the end of the first fiscal year following an Exchange Listing, and will equal 20.0% of the Company’s realized capital gains, if any, on a cumulative basis through the end of each calendar year, computed net of all realized capital losses and unrealized capital depreciation as of each fiscal year end, less the amount of any previously paid capital gain Post-Exchange Listing Incentive Fees, with respect to the Company; provided that the Post-Exchange Listing Incentive Fee determined as of the end of the fiscal year in which an Exchange Listing is completed will be calculated for a period of shorter than twelve calendar months to take into account any realized capital gains computed net of all realized capital losses and unrealized capital depreciation. In the event that the

SLR HC BDC LLC 10-Q