SCP Private Credit Income BDC 10Q 2023 Q3 Quarterly report

SCP Private Credit Income BDC 10-Q2023 Q3 Quarterly report

Content analysis

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

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, 2023

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

Commission File Number:

814-01294

SCP Private Credit Income BDC LLC

(Exact name of registrant as specified in its charter)


Delaware		83-0634992
(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.

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

the

Exchange Act). Yes ☐ No

☒

As of September 30, 2023, there was no established public market for the registrant’s units. The issuer had 26,710,775 units outstanding as of November 3, 2023.

SCP PRIVATE CREDIT INCOME BDC LLC

FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 2023

TABLE OF CONTENTS


	Index	Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Assets and Liabilities as of September 30, 2023 (unaudited) and December 31, 2022		3
	Consolidated Statements of Operations for the three and nine months ended September 30, 2023 (unaudited) and the three and nine months ended September 30, 2022 (unaudited)		4
	Consolidated Statements of Changes in Unitholders’ Capital for the three and nine months ended September 30, 2023 (unaudited) and the three and nine months ended September 30, 2022 (unaudited)		5
	Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 (unaudited) and the nine months ended September 30, 2022 (unaudited)		6
	Consolidated Schedule of Investments as of September 30, 2023 (unaudited)		7
	Consolidated Schedule of Investments as of December 31, 2022		11
	Notes to Consolidated Financial Statements (unaudited)		14
	Report of Independent Registered Public Accounting Firm		31
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		44
Item 4.	Controls and Procedures		44
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings		45
Item 1a.	Risk Factors		45
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities		47
Item 3.	Defaults Upon Senior Securities		47
Item 4.	Mine Safety Disclosures		47
Item 5.	Other Information		48
Item 6.	Exhibits		49
SIGNATURES			50

PART I. FINANCIAL INFORMATION

In this Quarterly Report, “Company”, “we”, “us”, and “our” refer to SCP Private Credit Income BDC LLC unless the context states otherwise.

Item 1. Financial Statements

SCP Private Credit Income BDC LLC

Consolidated Statements of Assets and Liabilities

(in thousands, except unit amounts)


	September 30, 2023 (unaudited)		December 31, 2022
Assets
Investments at fair value:
Companies less than 5% owned (cost: $497,210 and $529,070, respectively)	$	500,654	$	532,895
Companies 5% to 25% owned (cost: $21,469 and $0, respectively)		13,565		—
Cash		14,989		16,697
Interest receiva b le		3,845		3,647
Receivable for investments sold		72		—
Prepaid expenses		54		22

Total assets	$	533,179	$	553,261

Liabilities
Revolving credit facility due December 2023 (the “SPV Facility”) ($223,800 and $267,726 face amounts, respectively, reported net of unamortized debt issuance costs of $348 and $1,392, respectively. See note 5)	$	223,452	$	266,334
Revolving credit facility due December 2023 (the “Subscription Facility”) ($30,000 and $70,400 face amounts, respectively, reported net of unamortized debt issuance costs of $57 and $185, respectively. See note 5)		29,943		70,215
Distributions payable		—		10,825
Management fee payable (see note 3)		3,238		519
Incentive fee payable (see note 3)		3,325		4,025
Administration fee payable (see note 3)		105		108
Interest payable (see note 5)		4,670		4,041
Other liabilities and accrued expenses		473		940

Total liabilities	$	265,206	$	357,007

Commitments and contingencies (see note 6)
Unitholders’ Capital
Common Unitholders’ capital (25,190,253 and 18,992,563 units, respectively, issued and outstanding)		261,160		196,160
Accumulated distributable earnings		6,813		94

Total unitholders’ capital	$	267,973	$	196,254

Total liabilities and unitholders’ capital	$	533,179	$	553,261

Net asset value per unit	$	10.64	$	10.33

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Statement of Operations (unaudited)

(in thousands, except unit amounts)


	Three months ended					Nine months ended
	September 30, 2023			September 30, 2022		September 30, 2023			September 30, 2022
Investment Income:
Interest:
Companies less than 5% owned	$	15,658		$	11,749	$	45,294		$	29,844
Companies 5% to 25% owned		13			—		13			—
Other income:
Companies less than 5% owned		103			48		570			218

Total investment income		15,774			11,797		45,877			30,062

Expenses:
Management fees (see note 3)	$	1,102		$	1,010	$	3,238		$	2,770
Incentive fees (see note 3)		1,285			958		2,339			2,544
Administration fees (see note 3)		105			102		315			283
Interest and other credit facility expenses (s ee note 5)		5,722			4,464		17,824			10,268
Other general and administrative expenses		172			207		694			658

Total expenses		8,386			6,741		24,410			16,523

Net investment income	$	7,388		$	5,056	$	21,467		$	13,539

Realized and unrealized gain (loss) on investments:
Net realized gain on companies less than 5% owned	$	—		$	—	$	74		$	—

Net change in unrealized gain (loss) on investments:
Companies less than 5% owned		(1,045	)		372		(7,155	)		879
Companies 5% to 25% owned		941			—		(1,130	)		—

Net change in unrealized gain (loss) on investments		(104	)		372		(8,285	)		879

Net realized and unrealized gain (loss) on investments		(104	)		372		(8,211	)		879

Net Increase in Unitholders’ Capital Resulting From Operations	$	7,284		$	5,428	$	13,256		$	14,418

Net Income Per Unit	$	0.29		$	0.29	$	0.55		$	0.81

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Statement of Changes

Unitholders’ Capital (unaudited)

(in thousands, except unit amounts)


	Three months ended						Nine months ended
	September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Increase (decrease) in unitholders’ capital resulting from operations:
Net investment income	$	7,388		$	5,056		$	21,467		$	13,539
Net realized gain		—			—			74			—
Net change in unrealized gain (loss)		(104	)		372			(8,285	)		879

Net increase in unitholders’ capital resulting from operations		7,284			5,428			13,256			14,418

Distributions to unitholders:
From net investment income		(6,537	)		(4,528	)		(6,537	)		(4,528	)

Increase in unitholders’ capital resulting from capital activity:
Contributions		—			—			65,000			20,000

Net increase in unitholders’ capital resulting from capital activity		—			—			65,000			20,000

Total increase in unitholders’ capital		747			900			71,719			29,890
Unitholders’ capital, beginning of period		267,226			205,103			196,254			176,113

Unitholders’ capital, end of period	$	267,973		$	206,003		$	267,973		$	206,003

Capital unit activity (see note 7):
Units issued		—			—			6,197,690			1,855,288

Net increase from capital unit activity		—			—			6,197,690			1,855,288

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Statement

Cash Flows (unaudited)

(in thousands)


	Nine months ended September 30, 2023			Nine months ended September 30, 2022
Cash Flows from Operating Activities:
Net increase in unitholders’ capital resulting from operations	$	13,256		$	14,418
Adjustments to reconcile net increase in unitholders’ capital resulting from operations to net cash provided by (used in) operating activities:
Net realized gain on investments		(74	)		—
Net change in unrealized (gain) loss on investments		8,285			(879	)
Deferred financing costs		1,204			1,275
(Increase) decrease in operating assets:
Purchase of investments		(82,937	)		(137,266	)
Net accretion of discount on investments		(2,511	)		(1,779	)
Proceeds from disposition of investments		97,423			38,182
Capitalization of payment-in-kind income		(1,510	)		(461	)
Receivable for investments sold		(72	)		(120	)
Interest receivable		(198	)		(938	)
Prepaid expenses		(32	)		(39	)
Increase (decrease) in operating liabilities:
Management fee payable		2,719			2,770
Incentive fee payable		(700	)		219
Administration fee payable		(3	)		23
Interest payable		629			1,836
Other liabilities and accrued expenses		(467	)		111

Net Cash Provided by (Used in) Operating Activities		35,012			(82,648	)

Cash Flows from Financing Activities:
Contributions from unitholders		65,000			20,000
Cash distributions paid		(17,362	)		(11,805	)
Proceeds from borrowings		46,768			148,010
Repayments of borrowings		(131,126	)		(73,400	)

Net Cash Provided by (Used in) Financing Activities		(36,720	)		82,805

NET INCREASE (DECREASE) IN CASH		(1,708	)		157
CASH AT BEGINNING OF PERIOD		16,697			11,181

CASH AT END OF PERIOD	$	14,989		$	11,338

Supplemental disclosure of cash flow information:
Cash paid for interest	$	17,195		$	8,432

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (unaudited)

September 30, 2023

(in thousands, except share/unit amounts)


Description	Industry	Spread above Index (3)		Floor			Interest Rate (1)			Acquisition Date		Maturity Date		Par Amount		Cost		Fair Value

Bank Debt/Senior Secured Loans —186.9%
Accession Risk Management Group, Inc. (f/k/a RSC Acquisition, Inc.) (2)	Insurance		S+550		0.75	%		11.02	%		10/5/2020		11/1/2026	$	19,553	$	19,333	$	19,553
ACRES Commercial Mortgage, LLC (2)	Diversified Financial Services		S+705		1.00	%		12.49	%		12/24/2021		8/21/2028		12,660		12,461		12,660
Alimera Sciences, Inc. (2)	Pharmaceuticals		S+515		4.60	%		10.48	%		12/31/2019		5/1/2028		5,893		5,919		6,066
All States Ag Parts, LLC (2)	Trading Companies & Distributors		S+600		1.00	%		11.60	%		9/1/2021		9/1/2026		5,178		5,116		5,178
Apex Service Partners, LLC (2)	Diversified Consumer Services		S+525		1.00	%		10.67	%		11/5/2021		7/31/2025		20,699		20,478		20,699
Arcutis Biotherapeutics, Inc. (2)(4)	Pharmaceuticals		S+745		0.10	%		12.88	%		12/22/2021		1/1/2027		24,520		24,945		24,950
Ardelyx, Inc. (2)(4)	Pharmaceuticals		S+795		1.00	%		13.30	%		2/23/2022		3/1/2027		3,319		3,356		3,423
Basic Fun, Inc. (2)	Specialty Retail		S+650		1.00	%		12.17	%		10/30/2020		7/2/2024		960		960		960
BayMark Health Services, Inc. (2)	Health Care Providers & Services		S+500		1.00	%		10.65	%		6/29/2021		6/11/2027		15,741		15,632		15,741
BridgeBio Pharma, Inc. (2)(4)	Biotechnology		—		—			9.00	% (6)		11/17/2021		11/17/2026		14,691		14,658		14,728
CC SAG Holdings Corp. (Spectrum Automotive) (2)	Diversified Consumer Services		S+575		0.75	%		11.18	%		6/29/2021		6/29/2028		12,577		12,416		12,577
Cerapedics, Inc. (2)	Biotechnology		S+620		2.75	%		11.53	%		12/27/2022		1/1/2028		9,698		9,720		9,722
Enhanced Permanent Capital, LLC (2)(4)	Capital Markets		S+700		1.00	%		12.26	%		12/29/2020		12/29/2025		9,062		8,907		9,062
ENS Holdings III Corp. & ES Opco USA LLC (BlueFin) (2)	Trading Companies & Distributors		S+475		1.00	%		10.24	%		12/31/2019		12/31/2025		7,127		7,068		7,127
Enverus Holdings, Inc. (fka Drilling Info Holdings) (2)	IT Services		S+450		—			9.92	%		1/31/2020		7/30/2025		14,053		13,910		14,053
Erie Construction Mid-west, LLC (2)	Building Products		S+475		1.00	%		10.34	%		8/5/2021		7/30/2027		10,943		10,813		10,943
Fertility (ITC) Investment Holdco, LLC (2)	Health Care Providers & Services		S+650		1.00	%		11.63	%		1/4/2023		1/3/2029		10,304		10,022		10,304
Foundation Consumer Brands, LLC (2)	Personal Products		S+625		1.00	%		11.77	%		2/12/2021		2/12/2027		11,721		11,540		11,721
Glooko, Inc. (2)	Health Care Technology		S+790		0.10	%		13.33	%		9/30/2021		10/1/2026		2,123		2,145		2,165
GSM Acquisition Corp. (2)	Leisure Equipment & Products		S+500		1.00	%		10.65	%		4/20/2021		11/16/2026		13,963		13,875		13,963
High Street Buyer, Inc. (2)	Insurance		S+600		0.75	%		11.29	%		4/16/2021		4/16/2028		12,007		11,824		12,007
Human Interest Inc. (2)	Internet Software & Services		S+785		1.00	%		13.18	%		6/30/2022		7/1/2027		6,799		6,731		6,799
iCIMS, Inc. (2)	Software		S+725		0.75	%		12.63	% (7)		8/18/2022		8/18/2028		14,084		13,877		14,084
Kaseya, Inc. (2)	Software		S+625		0.75	%		11.62	% (12)		6/22/2022		6/23/2029		11,030		10,888		11,030
Kid Distro Holdings, LLC (Distro Kid) (2)	Software		S+550		1.00	%		11.04	%		9/24/2021		10/1/2027		12,362		12,185		12,362
KORE Wireless Group, Inc. (2)	Wireless Telecommunication Services		S+550		—			10.99	%		3/12/2019		12/21/2024		13,993		13,923		13,993
Maurices, Incorporated (2)	Specialty Retail		S+675		1.00	%		9.94	%		8/27/2021		6/1/2024		4,685		4,678		4,685
Meditrina, Inc. (2)	Health Care Equipment & Supplies		S+550		3.45	%		10.83	%		12/20/2022		12/1/2027		1,212		1,211		1,218
MRI Software LLC (2)	Software		S+550		1.00	%		10.99	%		7/23/2019		2/10/2026		15,191		15,092		15,191
Neuronetics, Inc. (2)	Health Care Equipment & Supplies		S+565		3.95	%		10.98	%		3/2/2020		3/29/2028		3,274		3,280		3,290
Nexus Intermediate III, LLC (Vortex) (2)	Professional Services		S+550		0.75	%		11.36	%		12/13/2021		12/6/2027		5,396		5,326		5,396
Oldco AI, LLC (f/k/a AmeriMark) (2)(5)(11)*	Internet & Catalog Retail		S+800		1.00	%		—			7/28/2021		10/15/2026		4,271		3,698		—
Oldco AI, LLC (f/k/a AmeriMark) (5)(11)	Internet & Catalog Retail		P+475		1.00	%		13.25	%		6/16/2023		10/31/2023		282		282		282
Orthopedic Care Partners Management, LLC (2)	Health Care Providers & Services		S+650		1.00	%		11.96	%		8/17/2022		5/16/2024		6,385		6,362		6,290
Outset Medical, Inc. (2)(4)	Health Care Equipment & Supplies		S+515		2.75	%		10.48	%		11/3/2022		11/1/2027		11,865		11,891		11,894
Pediatric Home Respiratory Services, LLC (2)	Health Care Providers & Services		S+625		1.00	%		11.67	%		8/19/2022		12/4/2024		4,235		4,186		4,235
Peter C. Foy & Associates Insurance Services, LLC (2)	Insurance		S+600		0.75	%		11.43	%		10/29/2021		11/1/2028		15,461		15,341		15,152
Pinnacle Treatment Centers, Inc. (2)	Health Care Providers & Services		S+675		1.00	%		12.32	%		1/22/2020		1/2/2026		8,275		8,196		8,275
Plastics Management, LLC (2)	Health Care Providers & Services		S+500		1.00	%		10.44	%		8/26/2021		8/18/2027		15,096		14,942		15,096
RQM+ Corp. (2)	Life Sciences Tools & Services		S+575		1.00	%		11.40	%		8/20/2021		8/12/2026		15,561		15,415		15,561
RxSense Holdings LLC (2)	Diversified Consumer Services		S+500		1.00	%		10.47	%		3/17/2020		3/13/2026		14,524		14,406		14,524

See notes

consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (unaudited) (continued)

September 30, 2023

(in thousands)


Description	Industry	Spread above Index (3)	Floor			Interest Rate (1)			Acquisition Date		Maturity Date		Par Amount		Cost		Fair Value

Bank Debt/Senior Secured Loans (continued)
Southern Orthodontic Partners Management, LLC (2)	Health Care Providers & Services	S+625		1.00	%		11.89	%		6/3/2022		1/27/2026	$	4,486	$	4,450	$	4,397
SunMed Group Holdings, LLC (2)	Health Care Equipment & Supplies	S+550		0.75	%		10.99	%		6/16/2021		6/16/2028		7,623		7,527		7,623
TAUC Management, LLC (2)	Health Care Providers & Services	L+525		1.00	%		10.59	%		2/12/2021		2/12/2027		9,005		8,921		8,375
Tilley Distribution, Inc. (2)	Trading Companies & Distributors	S+600		1.00	%		11.54	%		12/8/2021		12/31/2026		12,526		12,419		12,526
Transportation Insight, LLC (2)	Road & Rail	S+450		1.00	%		9.87	%		10/27/2021		12/18/2024		5,581		5,536		5,581
Ultimate Baked Goods Midco LLC (Rise Baking) (2)	Packaged Foods & Meats	S+625		1.00	%		11.67	%		8/12/2021		8/13/2027		7,574		7,442		7,574
Vapotherm, Inc. (2)	Health Care Equipment & Supplies	S+930		1.00	%		14.73	% (8)		2/18/2022		2/1/2027		12,901		13,052		13,094
Vessco Midco Holdings, LLC (2)	Water Utilities	S+450		1.00	%		9.85	%		9/3/2021		11/2/2026		5,504		5,458		5,504
World Insurance Associates, LLC (2)	Insurance	S+575		1.00	%		11.14	%		10/12/2020		4/1/2026		19,217		19,199		19,217

Total Bank Debt/Senior Secured Loans															$	501,012	$	500,850

													Shares/Units
Common Equity/Equity Interests/Warrants — 5.0%
Assertio Holdings, Inc. Common Stock† (13)	Pharmaceuticals									7/31/2023				4,230		17		11
Centrexion Therapeutics, Inc. Warrants†	Pharmaceuticals									6/28/2019				56,483		27		10
Meditrina, Inc. Warrants†	Health Care Equipment & Supplies									12/20/2022				10,572		8		7
Senseonics Holdings, Inc. Common Stock† (4)(13)	Health Care Equipment & Supplies									7/25/2019				79,501		23		48
SLR-AMI Topco Blocker, LLC† (10)(11)	Internet & Catalog Retail									6/16/2023				—		17,489		13,283
Vapotherm, Inc.†	Health Care Equipment & Supplies									2/18/2022				17,156		103		10

Total Common Equity/Equity Interests/Warrants															$	17,667	$	13,369

Total Investments (9) — 191.9%															$	518,679	$	514,219
Liabilities in Excess of Other Assets — (91.9%)																		(246,246	)

Net Assets — 100.0%																	$	267,973

(1)

Floating rate debt investments typically bear interest at a rate determined by reference to either the London Interbank Offered Rate (“LIBOR” or “L”) index rate, 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 we have provided the current interest rate in effect as of September 30, 2023.

(2)

Indicates an investment that is wholly or partially held by the Company through its wholly-owned financing subsidiary SCP Private Credit Income 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.

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

(4)

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 September 30, 2023, on a fair value basis,

non-qualifying

assets in the portfolio represented 12.0% of the total assets of the Company.

(5)	AmeriMark Interactive, LLC, AmeriMark Direct LLC, AmeriMark Intermediate Sub, Inc., L.T.D. Commodities LLC, Dr. Leonard’s Healthcare Corp. and AmeriMark Intermediate Holdings, LLC are each co-Borrowers.

(6)	BridgeBio Pharma, Inc. may elect to defer up to 3.00% of the coupon as PIK.

(7)	iCIMS, Inc. may elect to defer up to 3.875% of the coupon as PIK.

(8)	Vapotherm, Inc. may elect to defer up to 9.00% of the coupon as PIK.

(9)

Aggregate net unrealized depreciation for U.S. federal income tax purposes is $9,212; aggregate gross unrealized appreciation and depreciation for U.S. federal tax purposes is $4,423 and $13,635, respectively, based on a tax cost of $523,431. 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.

(10)	Through this entity and other intermediate entities, the Company owns approximately 6.5% of the underlying common units of ASC Holdco, LLC, a joint venture which owns certain assets of the former AmeriMark Interactive, LLC.

(11)

Denotes investments in which we are an “Affiliated Person” but do not exercise a controlling influence, as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), due to beneficially owning, either directly or through one or more controlled companies, more than 5% but less than 25% of the outstanding voting securities of the investment. Transactions during the period June 16, 2023 (date at which the Company became an Affiliated Person) through September 30, 2023 in these affiliated investments are as follows:

See notes

consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (unaudited) (continued)

September 30, 2023

(in thousands)


Name of Issuer	Fair Value at June 16, 2023		Gross Additions		Gross Reductions			Realized Gain (Loss)		Change in Unrealized Gain (Loss)			Fair Value at September 30, 2023		Interest/Dividend Income
Oldco AI, LLC (f/k/a AmeriMark)	$	8,243	$	—	$	(11,318	)	$	—	$	3,075		$	—	$	—
Oldco AI, LLC (f/k/a AmeriMark)		—		1,110		(828	)		—		—			282		13
SLR-AMI Topco Blocker, LLC		6,170		11,318		—			—		(4,205	)		13,283		—

	$	14,413	$	12,428	$	(12,146	)	$	—	$	(1,130	)	$	13,565	$	13

(12)	Kaseya, Inc. may elect to defer up to 2.50% of the coupon as PIK.

(13)	Denotes a Level 1 investment.

*	Investment is on non-accrual st atus.

†	Non-income producing security.

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (unaudited) (continued)

September 30, 2023

(in thousands)


Industry Classification	Percentage of Total Investments (at fair value) as of September 30, 2023
Health Care Providers & Services		14.1	%
Insurance		12.8	%
Software		10.3	%
Diversified Consumer Services		9.3	%
Health Care Equipment & Supplies		7.2	%
Pharmaceuticals		6.7	%
Trading Companies & Distributors		4.8	%
Biotechnology		4.8	%
Life Sciences Tools & Services		3.0	%
IT Services		2.7	%
Wireless Telecommunication Services		2.7	%
Leisure Equipment & Products		2.7	%
Internet & Catalog Retail		2.6	%
Diversified Financial Services		2.5	%
Personal Products		2.3	%
Building Products		2.1	%
Capital Markets		1.8	%
Packaged Foods & Meats		1.5	%
Internet Software & Services		1.3	%
Specialty Retail		1.1	%
Road & Rail		1.1	%
Water Utilities		1.1	%
Professional Services		1.1	%
Health Care Technology		0.4	%

Total Investments		100.0	%

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments

December 31, 2022

(in thousands, except share/unit amounts)


Description	Industry	Spread above Index (3)		Floor			Interest Rate (1)			Acquisition Date		Maturity Date		Par Amount		Cost		Fair Value
Bank Debt/Senior Secured Loans — 271.5%
ACRES Commercial Mortgage, LLC (2)	Diversified Financial Services		S+705		1.00	%		11.38	%		12/24/2021		8/21/2028	$	12,660	$	12,437	$	12,660
Alimera Sciences, Inc. (2)	Pharmaceuticals		L+765		1.78	%		11.82	%		12/31/2019		7/1/2024		3,929		4,059		4,145
All States Ag Parts, LLC (2)	Trading Companies & Distributors		S+575		1.00	%		10.19	%		9/1/2021		9/1/2026		5,358		5,279		5,358
AmeriMark Intermediate Holdings, LLC (2)(5)	Internet & Catalog Retail		L+800		1.00	%		14.77	%		7/28/2021		10/15/2026		21,189		20,858		20,129
Apex Service Partners, LLC (2)	Diversified Consumer Services		S+525		1.00	%		9.42	%		11/5/2021		7/31/2025		21,450		21,134		21,450
Arcutis Biotherapeutics, Inc. (2)(4)	Pharmaceuticals		L+745		0.10	%		11.62	%		12/22/2021		1/1/2027		24,520		24,654		24,827
Ardelyx, Inc. (2)(4)	Pharmaceuticals		L+795		0.10	%		12.12	%		2/23/2022		3/1/2027		3,319		3,328		3,328
Basic Fun, Inc. (2)	Specialty Retail		L+550		1.00	%		10.27	%		10/30/2020		10/30/2023		966		961		966
BayMark Health Services, Inc. (2)	Health Care Providers & Services		L+500		1.00	%		9.73	%		6/29/2021		6/11/2027		15,861		15,733		15,861
BridgeBio Pharma, Inc. (2)(4)	Biotechnology		—		—			9.00	% (6)		11/17/2021		11/17/2026		14,362		14,257		14,362
CC SAG Holdings Corp. (Spectrum Automotive) (2)	Diversified Consumer Services		L+575		0.75	%		10.48	%		6/29/2021		6/29/2028		6,491		6,407		6,491
Centrexion Therapeutics, Inc.	Pharmaceuticals		L+725		2.45	%		11.42	%		6/28/2019		1/1/2024		2,314		2,417		2,453
Cerapedics, Inc. (2)	Biotechnology		S+620		2.75	%		10.52	%		12/27/2022		1/1/2028		9,698		9,674		9,673
Enhanced Permanent Capital, LLC (2)(4)	Capital Markets		L+700		1.00	%		10.13	%		12/29/2020		12/29/2025		7,503		7,352		7,503
ENS Holdings III Corp. & ES Opco USA LLC (BlueFin) (2)	Trading Companies & Distributors		S+475		1.00	%		9.43	%		12/31/2019		12/31/2025		7,570		7,490		7,570
Enverus Holdings, Inc. (fka Drilling Info Holdings) (2)	IT Services		L+450		—			8.88	%		1/31/2020		7/30/2025		14,454		14,252		14,454
Erie Construction Mid-west, LLC (2)	Building Products		S+475		1.00	%		9.79	%		8/5/2021		7/30/2027		11,381		11,222		11,381
Foundation Consumer Brands, LLC (2)	Personal Products		L+550		1.00	%		10.15	%		2/12/2021		2/12/2027		12,288		12,063		12,288
Glooko, Inc. (2)	Health Care Technology		L+790		0.10	%		12.07	%		9/30/2021		10/1/2026		2,831		2,838		2,838
GSM Acquisition Corp. (2)	Leisure Equipment & Products		S+500		1.00	%		9.03	%		4/20/2021		11/16/2026		14,069		13,961		13,928
Higginbotham Insurance Agency, Inc. (2)	Insurance		L+525		0.75	%		9.63	%		11/25/2020		11/25/2026		8,130		8,043		8,130
High Street Buyer, Inc. (2)	Insurance		L+600		0.75	%		8.75	%		4/16/2021		4/16/2028		11,606		11,408		11,606
Human Interest Inc. (2)	Internet Software & Services		S+785		1.00	%		11.97	%		6/30/2022		7/1/2027		6,799		6,690		6,799
iCIMS, Inc. (2)	Software		S+725		0.75	%		11.52	% (7)		8/18/2022		8/18/2028		13,757		13,527		13,517
Ivy Fertility Services, LLC (2)	Health Care Providers & Services		L+625		1.00	%		10.39	%		12/22/2021		2/25/2026		10,515		10,369		10,620
Kaseya, Inc. (2)	Software		S+575		0.75	%		10.33	%		6/22/2022		6/23/2029		10,966		10,810		10,966
Kid Distro Holdings, LLC (Distro Kid) (2)	Software		L+575		1.00	%		10.48	%		9/24/2021		10/1/2027		12,457		12,251		12,457
KORE Wireless Group, Inc. (2)	Wireless Telecommunication Services		S+550		—			10.08	%		3/12/2019		12/21/2024		14,104		13,992		14,104
Maurices, Incorporated (2)	Specialty Retail		S+675		1.00	%		8.74	%		8/27/2021		6/1/2024		4,947		4,891		4,947
Meditrina, Inc. (2)	Health Care Equipment & Supplies		S+550		3.45	%		9.82	%		12/20/2022		12/1/2027		1,212		1,201		1,209
MRI Software LLC (2)	Software		L+550		1.00	%		10.23	%		7/23/2019		2/10/2026		15,308		15,180		15,308
NAC Holding Corporation (Jaguar) (2)	Insurance		S+525		1.00	%		9.45	%		7/30/2021		9/28/2024		12,461		12,355		12,461
Neuronetics, Inc. (2)	Health Care Equipment & Supplies		L+765		1.66	%		11.82	%		3/2/2020		2/28/2025		3,056		3,143		3,224
Nexus Intermediate III, LLC (Vortex) (2)	Professional Services		L+550		0.75	%		10.22	%		12/13/2021		12/6/2027		5,947		5,858		5,947
Oral Surgery Partners Holdings, LLC	Health Care Providers & Services		S+625		1.00	%		10.92	%		11/29/2022		5/10/2024		2,206		2,164		2,162
Orthopedic Care Partners Management, LLC (2)	Health Care Providers & Services		S+650		1.00	%		10.91	%		8/17/2022		5/16/2024		4,226		4,200		4,226
Outset Medical, Inc. (2)(4)	Health Care Equipment & Supplies		S+515		2.75	%		9.33	%		11/3/2022		11/1/2027		11,865		11,796		11,775
Pediatric Home Respiratory Services, LLC (2)	Health Care Providers & Services		S+625		1.00	%		10.67	%		8/19/2022		12/4/2024		1,802		1,778		1,784
Peter C. Foy & Associates Insurance Services, LLC (2)	Insurance		S+600		0.75	%		11.21	%		10/29/2021		11/1/2028		15,579		15,444		15,579
Pinnacle Treatment Centers, Inc. (2)	Health Care Providers & Services		S+650		1.00	%		10.57	%		1/22/2020		1/2/2026		8,339		8,233		8,152
Plastics Management, LLC (2)	Health Care Providers & Services		S+500		1.00	%		9.89	%		8/26/2021		8/18/2027		12,117		11,967		12,117
Revlon Consumer Products Corporation (2)	Personal Products		P+475		2.75	%		12.25	%		5/7/2021		6/17/2023		13,905		13,876		13,974
RQM+ Corp. (2)	Life Sciences Tools & Services		S+575		1.00	%		10.59	%		8/20/2021		8/12/2026		15,680		15,499		15,680
RSC Acquisition, Inc. (2)	Insurance		S+550		0.75	%		9.26	%		10/5/2020		11/1/2026		9,345		9,191		9,345
RxSense Holdings LLC (2)	Diversified Consumer Services		L+500		1.00	%		9.41	%		3/17/2020		3/13/2026		14,674		14,522		14,674

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (continued)

December 31, 2022

(in thousands)


Description	Industry	Spread above Index (3)	Floor			Interest Rate (1)			Acquisition Date		Maturity Date		Par Amount		Cost			Fair Value

Bank Debt/Senior Secured Loans (continued)
Southern Orthodontic Partners Management, LLC (2)	Health Care Providers & Services	S+600		1.00	%		10.84	%		6/3/2022		1/27/2026	$	1,901	$	1,884		$	1,901
Spectrum Pharmaceuticals, Inc. (2)	Biotechnology	S+570		2.30	%		9.88	%		9/21/2022		9/1/2027		3,559		3,519			3,524
SunMed Group Holdings, LLC (2)	Health Care Equipment & Supplies	L+575		0.75	%		10.48	%		6/16/2021		6/16/2028		7,929		7,815			7,929
TAUC Management, LLC (2)	Health Care Providers & Services	L+525		1.00	%		9.98	%		2/12/2021		2/12/2027		9,013		8,912			8,968
Tilley Distribution, Inc. (2)	Trading Companies & Distributors	S+550		1.00	%		10.14	%		12/8/2021		12/31/2026		12,762		12,633			12,762
Transportation Insight, LLC (2)	Road & Rail	L+450		1.00	%		8.91	%		10/27/2021		12/18/2024		4,198		4,150			4,198
Ultimate Baked Goods Midco LLC (Rise Baking) (2)	Packaged Foods & Meats	L+650		1.00	%		10.88	%		8/12/2021		8/13/2027		7,877		7,717			7,877
Vapotherm, Inc. (2)	Health Care Equipment & Supplies	S+830		1.00	%		12.58	% (8)		2/18/2022		2/1/2027		12,070		12,076			12,131
Vessco Midco Holdings, LLC (2)	Water Utilities	L+450		1.00	%		7.87	%		9/3/2021		11/2/2026		2,207		2,189			2,206
World Insurance Associates, LLC (2)	Insurance	S+575		1.00	%		10.07	%		10/12/2020		4/1/2026		19,614		19,261			18,829

Total Bank Debt/Senior Secured Loans															$	528,920		$	532,753

													Shares/Units
Common Equity/Equity Interests/Warrants — 0.0%
Centrexion Therapeutics, Inc. Warrants†	Pharmaceuticals									6/28/2019				56,483		27			16
Meditrina, Inc. Warrants†	Health Care Equipment & Supplies									12/20/2022				10,572		8			8
Senseonics Holdings, Inc. Common Stock† (4)	Health Care Equipment & Supplies									7/25/2019				79,501		23			82
Spectrum Pharmaceuticals, Inc. Warrants†	Biotechnology									9/21/2022				53,930		17			5
Vapotherm, Inc.†	Health Care Equipment & Supplies									2/18/2022				12,960		75			31

Total Common Equity/Equity Interests/Warrants															$	150		$	142

Total Investments (9) — 271.5%															$	529,070		$	532,895
Liabilities in Excess of Other Assets —(171.5%)																(336,641	)

Net Assets — 100.0%															$	196,254

(1)

(2)

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

(4)

Indicates assets that the Company believes may not represent “qualifying assets” under Section 55(a) of the Investment Company Act of 1940, as amended (“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, 2022, on a fair value basis,

non-qualifying

assets in the portfolio represented 11.2% of the total assets of the Company.

(5)	AmeriMark Interactive, LLC, AmeriMark Direct LLC, AmeriMark Intermediate Sub, Inc., L.T.D. Commodities LLC, Dr. Leonard’s Healthcare Corp. and Amerimark Intermediate Holdings, LLC are each co-Borrowers. Amerimark may elect to defer up to 8.00% of the coupon as PIK.

(6)	BridgeBio Pharma, Inc. may elect to defer up to 3.00% of the coupon as PIK.

(7)	iCIMS, Inc. may elect to defer up to 3.875% of the coupon as PIK.

(8)	Vapotherm, Inc. may elect to defer up to 8.00% of the coupon as PIK.

(9)

Aggregate net unrealized depreciation for U.S. federal income tax purposes is $927; aggregate gross unrealized appreciation and depreciation for U.S. federal tax purposes is $5,202 and $6,129, respectively, based on a tax cost of $533,822. 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.

†	Non-income producing security.

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Consolidated Schedule of Investments (continued)

December 31, 2022

(in thousands)


Industry Classification	Percentage of Total Investments (at fair value) as of December 31, 2022
Insurance		14.3	%
Health Care Providers & Services		12.4	%
Software		9.8	%
Diversified Consumer Services		8.0	%
Health Care Equipment & Supplies		6.8	%
Pharmaceuticals		6.5	%
Biotechnology		5.2	%
Personal Products		4.9	%
Trading Companies & Distributors		4.8	%
Internet & Catalog Retail		3.8	%
Life Sciences Tools & Services		2.9	%
IT Services		2.7	%
Wireless Telecommunication Services		2.7	%
Leisure Equipment & Products		2.6	%
Diversified Financial Services		2.4	%
Building Products		2.1	%
Packaged Foods & Meats		1.5	%
Capital Markets		1.4	%
Internet Software & Services		1.3	%
Professional Services		1.1	%
Specialty Retail		1.1	%
Road & Rail		0.8	%
Health Care Technology		0.5	%
Water Utilities		0.4	%

Total Investments		100.0	%

See notes to consolidated financial statements.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited)

September 30, 2023

(in thousands, except unit amounts)

Note 1. Organization

SCP Private Credit Income BDC LLC (the “Company”, “we”, “us” or “our”) is a Delaware limited liability company formed on May 18, 2018. The Company 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 (“FASB”) 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”). 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 (the Company’s investments in portfolio companies are referred to herein as “Portfolio Investments”).

On October 5, 2018 (the “Initial Closing Date”), the Company closed on $326,000 in capital commitments. On March 12, 2019, the sale and issuance of 2,800,000 of the Company’s units (“Units”), at an aggregate purchase price of $28,000 ($10.00 per Unit) occurred and the Company commenced operations. As of September 30, 2023, $261,500 of capital commitments were drawn and $64,500 were unfunded.

The Company has implemented a corporate lending strategy focused on sourcing, underwriting and managing a diverse portfolio of private senior secured loans primarily to upper middle market companies (generally, aggregate loan sizes of $100,000 to $300,000 to companies with earnings before interest, tax, depreciation and amortization (“EBITDA”) between approximately $25,000 and $100,000) across the United States. In addition to senior secured loans to upper middle market companies, the Company intends to invest a portion of its assets in

non-traditional

asset-based loans and first lien loans to rapidly growing healthcare companies. The Company also expects that some of its investments will contain delayed-draw term loan type features and/or other types of unfunded commitments.

The offering period of the Company ended on April 5, 2019 (the “Offering Period”). The investment period of the Company ended on December 31, 2022. The term of the Company will be six years from the end of the Offering Period unless the Company is liquidated earlier 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 Company’s Board of Directors (the “Board”) 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 the LLC Agreement. 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.

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. Certain prior period amounts may have been reclassified to conform

current period presentation.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

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 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, 2023.

In the opinion of management, all adjustments which are of a normal recurring nature considered necessary for the fair presentation of 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;

the audit committee of the Board reviews the preliminary valuations of the Adviser and third-party valuation specialist, if any, and responds to the valuation recommendations

reflect any comments; and

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

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 nine months ended September 30, 2023, 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

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

Level

: 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

: 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.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

(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 receive such amounts. Capital structuring fees, amendment fees, consent fees, and any other

non-recurring

fee income as well as management fee 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)

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.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

(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.

Note 3. Agreements and Related Party Transactions

The Company has entered into an investment management agreement with the Adviser (the “Investment Management Agreement”) pursuant to which it will pay management fees, administrative coordinator fees and incentive fees to the Adviser. The Company will pay the Adviser a fee for investment advisory and management services consisting of two components: a base management fee and an incentive fee. The Company will also pay the Adviser (in its capacity as Administrative Coordinator, defined herein) an administration fee for administrative and coordination services. The cost of the base management fee, the incentive fee, and the administration fee will be borne by the Unitholders.

Management Fees and Administration Fees

The Company will pay the Adviser a management fee (the “Management Fee”), calculated as of the close of business in New York, New York on the last day of each calendar quarter (each such date, the “Management Fee Calculation Date”), in an amount equal to 1.5% per annum of Invested Capital (defined as, as of any date, the sum of (i) capital contributions to the Company plus (ii) the total amount of credit drawn on subscription credit facilities), and payable quarterly in arrears after such Management Fee Calculation Date.

Pursuant to the Investment Management Agreement, the Adviser has also been appointed to provide administrative and coordination services to the Company (in such capacity, the “Administrative Coordinator”). The Company will pay the Administrative Coordinator, a fee (the “Administration Fee”), calculated as of the close of business in New York, New York on the last day of each calendar quarter (the “Administration Fee Calculation Date”), in an amount equal to 0.08% per annum of the average Cost Basis (defined as the aggregate accreted and amortized cost of all Portfolio Investments, including any amounts reinvested in investments and the cost of investments acquired using leverage), as measured on the last day of the preceding quarter and the last day of the current quarter for the period ended and payable quarterly in arrears after such Administration Fee Calculation Date. The Administrative Coordinator will be responsible for all expenses of its own staff responsible for (i) certain

on-going,

routine,

non-investment-related

administrative services for the Company, (ii) the coordination of various third-party services needed or required by the Company and (iii) certain Unitholder servicing functions.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Each of the Management Fee and the Administration Fee will be appropriately adjusted for any stub period. Such fees will be paid out of net current income and/or disposition proceeds or, to the extent such amounts are not available, from unfunded capital commitments that will be drawn down, or borrowings of the Company. In the event that the Adviser arranges for the Company to pay any portion of a placement fee to a placement agent, the amount of Management Fees otherwise payable shall be reduced by an amount equal to 100% of such payment to the placement agent.

Incentive Fee

The Company will make 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, warrant gains, prepayment fees and exit fees, other than Disposition Proceeds. The Adviser will apportion each Unitholder’s pro rata share of Investment Proceeds between Disposition Proceeds and Current Proceeds. Amounts of Investment Proceeds apportioned to Unitholders will be 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 an incentive fee, on the other hand, in the following amounts and order of priority:

(A)

Return of Capital Contributions

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

(B)

Unitholder Preferred Return

. Second, 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 pursuant to clause (ii)(A) and clause (ii)(C) below equal to 6% per annum, compounded annually, on such Unitholder’s unreturned capital contributions to the Company (including amounts contributed to pay Management Fees, Administration Fees, Organizational Expenses and other Company expenses) (the “Preferred Return”);

(C)

Adviser Catch Up to 15%

. Third, 80% of all remaining Disposition Proceeds paid to the Adviser as an incentive fee until the Adviser has received payments of Investment Proceeds with respect

o Unitholders pursuant to this clause (C) and clause (ii)(B) equal to 15% of the total amounts distributed to Unitholders and paid to the Adviser pursuant to clause (B) above and this clause (C) and pursuant to clause (ii)(A) and clause (ii)(B); and

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

(D)

85%/15%

. Thereafter, 85% to Unitholders and 15% paid to the Adviser as an incentive fee.

(ii) Current Proceeds apportioned to Unitholders shall be divided between and distributed to Unitholders, on the one hand, and paid to the Adviser as an incentive fee, on the other hand, in the following amounts and order of priority:

(A)

Unitholder Preferred Return

. First, 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) equal to the Preferred Return;

(B)

Adviser Catch Up to 15%

. Second, 80% of all remaining Current Proceeds paid to the Adviser as an incentive fee until the Adviser has received payments of Investment Proceeds with respect to Unitholders pursuant to this clause (B) and clause (i)(C) equal to 15% of the total amounts distributed to Unitholders and paid to the Adviser pursuant to clause (A) above and this clause (B) and pursuant to Section clause (i)(B) and clause (i)(C); and

(C)

85%/15% Units

. Thereafter, 85% to Unitholders and 15% paid to the Adviser as an incentive fee.

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

The Adviser has the right with respect to all Unitholders, upon approval of the Company’s independent directors, to waive or reduce the incentive fee to which it is entitled. The Adviser may also elect not to receive all or any portion of the incentive fee that would otherwise be distributed to it, and may cause any or all amounts subsequently available for distribution to the Unitholders to be distributed to the Adviser until it has received the same aggregate amount of incentive fees had it not previously waived receipt of incentive fees.

The Adviser will be entitled to withhold from any distributions, in its discretion, any required tax withholdings. Amounts of taxes paid or withheld from amounts otherwise distributable to a Unitholder will be deemed distributed for purposes of the calculations above.

Upon liquidation of the Company, the Adviser will be required to restore funds to the Company for distribution to the Unitholders if and to the extent that the Adviser has received cumulative incentive fees in excess of the incentive fees that would have been payable to the Adviser on an aggregate basis covering all transactions of the Company; provided, however, that in no event will the Adviser be required to contribute an aggregate amount in excess of 100% of the net amount distributed to the Adviser (net of taxes) on account of its incentive fees. In addition, the Adviser will apply an interim incentive fee adjustment at the end of each fiscal year so that, in the event of any over-distribution of incentive fee to the Adviser (measured with respect to each Unitholder using the fair value of the Company’s portfolio at the end of the applicable fiscal year as if the Company were to liquidate on such date), future distributions that would, absent such interim incentive fee adjustment, otherwise be distributed to the Adviser as an incentive fee, shall be distributed to such Unitholder until such over-distribution (net of taxes payable by the Adviser with respect to such incentive fee) has been eliminated.

For the three and nine months ended September 30, 2023, the Company incurred $1,102 and $3,238, respectively, in Management Fees, $105 and $315, respectively, in Administration Fees and $1,285 and $2,339, respectively, in incentive fees. For the three and nine months ended September 30, 2022, the Company incurred $1,010 and $2,770, respectively, in Management Fees, $102 and $283, respectively, in Administration Fees and $958 and $2,544, respectively, in Incentive Fees.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

The aggregate amount of certain operating expenses relating to Unitholders investing directly in the Company will not exceed the Operating Expense Cap, calculated as follows: (A) if the Company has less than or equal to $400,000 in capital commitments, an amount equal to the sum of (x) the product of the capital commitments and 0.0025 and (y) $1,250, or (B) if the Company has greater than $400,000 in capital commitments, $2,250. Any amount in excess of the Operating Expense Cap for any fiscal year will be paid by the Adviser. For the avoidance of doubt, the Operating Expense Cap will not apply to any fees, costs, expenses and liabilities allocable to persons investing indirectly in the Company through any Unitholder.

The Adviser or Administrative Coordinator and/or their affiliates has advanced organizational and offering expenses to the Company, which include organizational fees, costs, expenses and liabilities of the Company, including legal expenses, incurred in connection with the initial offering of Units and the formation and establishment of the Company (“Organizational Expenses”). The Adviser or Administrative Coordinator (or such affiliate) has been reimbursed by the Company for such advanced costs and expenses in an amount not to exceed $500. $308 of offering expenses were charged to capital and $84 of organizational costs were expensed in 2019.

Note 4. Fair Value

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level

Financial assets and liabilities whose values are based on unadjusted quoted prices for identical assets or liabilities in an active market that the Company has the ability to access.

Level

Financial assets and liabilities whose values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability. Level 2 inputs include the following:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in

non-active

markets;

Pricing models whose inputs are observable for substantially the full term of the asset or liability; and

Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability.

Level

Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s and, if applicable, an independent third-party valuation firm’s own assumptions about the assumptions a market participant would use

pricing the asset or liability.

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety. For example, a Level 3 fair value measurement may include inputs that are observable (Levels 1 and 2) and unobservable (Level 3).

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Gains and losses for assets and liabilities categorized within the Level 3 table below may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3).

A review of fair value hierarchy classifications is conducted on a quarterly basis. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Such reclassifications involving Level 3 assets and liabilities are reported as transfers in/out of Level 3 as of the end of the quarter in which the reclassifications occur. Within the fair value hierarchy tables below, cash and cash equivalents are excluded but could be classified as Level 1.

The following tables present the balances of assets measured at fair value on a recurring basis, as of September 30, 2023 and December 31, 2022:

Fair Value Measurements

As of September 30, 2023


	Level 1		Level 2		Level 3		Total
Assets:
Bank Debt/Senior Secured Loans	$	—	$	—	$	500,850	$	500,850
Common Equity/Equity Interests/Warrants		59		—		13,310		13,369

Total Investments	$	59	$	—	$	514,160	$	514,219

While the Company has not made an election to apply the fair value option of accounting to any of its debt obligations, if the Company’s debt obligations were carried at fair value at September 30, 2023, the fair value of the SPV Facility and the Subscription Facility would be $223,800 and $30,000, respectively.

Fair Value Measurements

As of December 31, 2022


	Level 1		Level 2		Level 3		Total
Assets:
Bank Debt/Senior Secured Loans	$	—	$	—	$	532,753	$	532,753
Common Equity/Equity Interests/Warrants		82		—		60		142

Total Investments	$	82	$	—	$	532,813	$	532,895

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

While the Company has not made an election to apply the fair value option of accounting to any of its debt obligations, if the Company’s debt obligations were carried at fair value at December

31,

2022, the fair value of the SPV Facility and the Subscription Facility would be $267,726 and $70,400, respectively.

The following table provides a summary of the changes in fair value of Level 3 assets for the three and nine months ended September 30, 2023, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets still held at September 30, 2023:


	Bank Debt/Senior Secured Loans			Common Equity/Equity Interests/Warrants			Total
Fair value, June 30, 2023	$	514,531		$	7,877		$	522,408
Total gains or losses included in earnings:
Net realized gain		—			—			—
Net change in unrealized gain (loss)		5,793			(5,879	)		(86	)
Purchase of investment securities*		9,334			11,329			20,663
Proceeds from dispositions of investment securities		(28,808	)		(17	)		(28,825	)
Transfers into Level 3		—			—			—
Transfers out of Level 3		—			—			—

Fair value, September 30, 2023	$	500,850		$	13,310		$	514,160

Unrealized gains (losses) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:
Net change in unrealized gain (loss)	$	5,959		$	(5,869	)	$	90


	Bank Debt/Senior Secured Loans			Common Equity/Equity Interests/Warrants			Total
Fair value, December 31, 2022	$	532,753		$	60		$	532,813
Total gains or losses included in earnings:
Net realized gain		6			—			6
Net change in unrealized loss		(3,995	)		(4,250	)		(8,245	)
Purchase of investment securities*		69,424			17,517			86,941
Proceeds from dispositions of investment securities		(97,338	)		(17	)		(97,355	)
Transfers into Level 3		—			—			—
Transfers out of Level 3		—			—			—

Fair value, September 30, 2023	$	500,850		$	13,310		$	514,160

Unrealized losses for the period relating to those Level 3 assets that were still held by the Company at the end of the period:
Net change in unrealized loss	$	(3,643	)	$	(4,262	)	$	(7,905	)

*	Includes PIK capitalization and accretion of discount

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

The following table provides a summary of the changes in fair value of Level 3 assets for the year ended December 31, 2022, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets still held at December 31, 2022:


	Bank Debt/Senior Secured Loans			Common Equity/Equity Interests/Warrants			Total
Fair value, December 31, 2021	$	439,661		$	13		$	439,674
Total gains or losses included in earnings:
Net realized gain (loss)		—			—			—
Net change in unrealized gain (loss)		340			(53	)		287
Purchase of investment securities		188,107			100			188,207
Proceeds from dispositions of investment securities		(95,355	)		—			(95,355	)
Transfers into Level 3		—			—			—
Transfers out of Level 3		—			—			—

Fair value, December 31, 2022	$	532,753		$	60		$	532,813

Unrealized gains (losses) for the period relating to those Level 3 assets that were still held by the Company at the end of the period:
Net change in unrealized gain (loss)	$	744		$	(53	)	$	691

Quantitative Information about Level 3 Fair Value Measurements

The Company typically determines the fair value of its performing debt investments utilizing a yield analysis. In a yield analysis, a price is ascribed for each investment based upon an assessment of current and expected market yields for similar investments and risk profiles. Additional consideration is given to current contractual interest rates, relative maturities and other key terms and risks associated with an investment. Among other factors, a significant determinant of risk is the amount of leverage used by the portfolio company relative to the total enterprise value of the company, and the rights and remedies of our investment within each portfolio company.

Significant unobservable quantitative inputs typically used in the fair value measurement of the Company’s Level 3 assets and liabilities primarily reflect current market yields, including indices, and readily available quotes from brokers, dealers, and pricing services as indicated by comparable assets and liabilities, as well as enterprise values, returns on equity and earnings before income taxes, depreciation and amortization (“EBITDA”) multiples of similar companies, and comparable market transactions for equity securities.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Quantitative information about the Company’s Level 3 asset fair value measurements as of September 30, 2023 is summarized in the table below:

Asset or
Liability

Fair Value at
September 30,
2023

Principal Valuation
Technique/
Methodology

Unobservable Input

Range (Weighted
Average)

Senior Secured Loans

Asset

500,850

Income Approach

Market Yield

10.1% - 16.8% (12.1%)

Common Equity/Equity Interests/Warrants

Asset

Market Approach

Volatility

17.8% - 17.8% (17.8%)

13,283

EBITDA Multiple

Comparable Multiple

6.25x-7.25x

(6.75x)

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

bid-ask

spreads, if applicable, would result in a significantly lower or higher fair value measurement for such assets. Generally, an increase in market yields may result in a decrease in the fair value of certain of the Company’s investments.

Quantitative information about the Company’s Level 3 asset fair value measurements as of December 31, 2022 is summarized in the table below:

Asset or
Liability

Fair Value at
December 31,
2022

Principal Valuation
Technique/
Methodology

Unobservable Input

Range (Weighted
Average)

Senior Secured Loans

Asset

532,753

Income Approach

Market Yield

9.4% - 16.2% (11.4%)

Common Equity/Equity Interests/Warrants

Asset

Market Approach

Volatility

26.0% - 26.0% (26.0%)

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

bid-ask

inve

stments.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Note 5. Debt

SPV Facility

—During the first quarter of 2019, the Company, through its wholly-owned subsidiary, SCP Private Credit Income BDC SPV LLC (the “SPV”), entered into the $100,000 SPV Facility with JPMorgan Chase Bank, N.A. acting as administrative agent. The commitment can also be expanded up to $400,000. The stated interest rate on the SPV Facility is SOFR plus 2.90% with no floor requirement and the current final maturity date is December 31, 2023. The fee on undrawn commitments is generally 0.875%. The SPV Facility is secured by all of the assets held by the SPV. Under the terms of the SPV Facility, the Company and SPV, 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 SPV also includes usual and customary events of default for credit facilities of this nature. On November 18, 2019, the Company amended the SPV Facility, reducing commitments to $75,000

. On February

27, 2021, the Company again amended the SPV Facility, increasing commitments to $100,000. On July 16, 2021, the Company entered into an amended SPV Facility, which increased commitments to $125,000, and on August 18, 2021 entered into a second amended SPV Facility which increased commitments to $200,000 and extended the final maturity date to December 31, 2023. On November 2, 2021, the Company entered into Amendment No. 1 to the second amended SPV Facility, which increased commitments to $275,000. On August 3, 2022, the Company entered into Amendment No. 2 to the second amended SPV Facility, which increased commitments to $300,000 and changed the interest rate to a SOFR-based calculation. There were $223,800 of borrowings outstanding as of September 30, 2023 under the SPV Facility. Effective with the end of the Investment Period on December 31, 2022, future advances are no longer permitted.

Subscription Facility

—During the first quarter of 2019, the Company established the $35,000 Subscription Facility with East West Bank, and subsequently entered into an amendment on June 24, 2019, which increased commitments from $35,000 to $50,000. On March 5, 2021, the Company entered into a second amendment. Under the second amendment, commitments were increased from $50,000 to $75,000 and the maturity date was extended. On October 4, 2021, the Company entered into an amended and restated loan and security agreement, which increased commitments to $100,000 and the maturity date was extended. On December 28, 2022, the Company entered into the first amendment to the amended and restated loan and security agreement, extending the maturity date to December 31, 2023, reducing commitments to $75,000 and the stated interest rate is SOFR plus 2.80%. Under the terms of the Subscription Facility, the Company has made certain customary representations and warranties, and is required to comply with various covenants, including reporting requirements and other customary requirements for similar credit facilities. The Subscription Facility also includes usual and customary events of default for credit facilities of this nature. There were $30,000 of borrowings outstanding as of September 30, 2023 under the Subscription Facility.

The average annualized interest cost for borrowings for the nine months ended September 30, 2023 and the year ended December 31, 2022 was 8.03% and 4.67%, respectively. These costs are exclusive of other credit facility expenses such as unused fees and fees paid to the

back-up

servicer, if any. The maximum amount borrowed on the credit facilities during the nine months ended September 30, 2023 and the year ended December 31, 2022 was $338,126 and $343,350, respectively.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Note 6. Commitments and Contingencies

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

e total amount of these unfunded commitments as of September 30, 2023 and December 31, 2022 is $47,908 and $98,214, respectively, comprised of the following:


	September 30, 2023		December 31, 2022
Outset Medical, Inc.	$	11,865	$	11,865
Human Interest Inc.		6,799		6,799
Arcutis Biotherapeutics, Inc.		3,065		3,065
Ardelyx, Inc.		2,716		2,716
iCIMS, Inc.		2,555		3,867
Cerapedics, Inc.		2,424		2,424
Neuronetics, Inc.		1,964		—
High Street Buyer, Inc.		1,890		2,797
Maurices, Incorporated		1,640		2,733
RxSense Holdings, LLC		1,558		1,558
Enverus Holdings, Inc.		1,545		1,251
Nexus Intermediate III, LLC (Vortex)		1,264		1,264
Kid Distro Holdings, LLC		1,121		1,121
GSM Acquisition Corp.		1,101		1,101
Foundation Consumer Brands, LLC		967		967
Basic Fun, Inc.		960		1,195
Ultimate Baked Goods Midco LLC		753		578
Kaseya, Inc.		625		1,315
MRI Software LLC.		577		577
ENS Holdings III Corp. & ES Opco USA LLC		574		179
SunMed Group Holdings, LLC		515		268
Transportation Insight, LLC		454		1,860
Vessco Midco Holdings, LLC		417		4,969
TAUC Management, LLC		385		385
CC SAG Holdings Corp. (Spectrum Automotive)		174		6,568
Accession Risk Management Group, Inc.		—		10,328
Oral Surgery Partners Holdings, LLC		—		3,277
Glooko, Inc.		—		3,185
Plastics Management, LLC		—		3,095
Spectrum Pharmaceuticals, Inc.		—		2,966
Southern Orthodontic Partners Management, LLC		—		2,605
Pediatric Home Respiratory Services, LLC		—		2,451
Orthopedic Care Partners Management, LLC		—		2,200
Erie Construction Mid-west, LLC		—		1,593
Meditrina, Inc.		—		1,212
Tilley Chemical Buyer, Inc.		—		670
Peter C. Foy & Associates Insurance Services, LLC		—		570
Pinnacle Treatment Centers, Inc.		—		520
Ivy Fertility Services, LLC		—		499
BayMark Health Services, Inc.		—		499
NAC Holdings Corporation		—		470
Apex Service Partners, LLC		—		345
All States Ag Parts, LLC		—		172
World Insurance Associates, LLC		—		135

Total Commitments	$	47,908	$	98,214

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

The credit agreements of the above loan commitments contain customary lending provisions and/or are subject to the respective portfolio company’s 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. As of September 30, 2023 and December 31, 2022, 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.

In the normal course of our business, we invest or trade in various financial instruments and may enter into various investment activities with

off-balance

sheet risk, which may include forward foreign currency contracts. Generally, these financial instruments represent future commitments to purchase or sell other financial instruments at specific terms at future dates. These financial instruments contain varying degrees of

off-balance

sheet risk whereby changes in the market value or our satisfaction of the obligations may exceed the amount recognized in our Consolidated Statements of Assets and Liabilities.

Note 7. Unitholders’ Capital

Transactions in Unitholders’ capital were as follows:


	Three months ended September 30, 2023		Three months ended September 30, 2022
Units at beginning of period		25,190,253		18,992,563
Units issued		—		—

Units issued and outstanding at end of period		25,190,253		18,992,563


	Nine months ended September 30, 2023		Nine months ended September 30, 2022
Units at beginning of period		18,992,563		17,137,275
Units issued		6,197,690		1,855,288

Units issued and outstanding at end of period		25,190,253		18,992,563

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Note 8. Financial Highlights

The following is a schedule of financial highlights for the nine months ended September 30, 2023 and September 30, 2022:


	Nine months ended September 30, 2023			Nine months ended September 30, 2022
Per Share Data: (a)
Net asset value per Unit, beginning of period	$	10.33		$	10.28

Net investment income		0.89			0.76
Net realized and unrealized gain (loss)		(0.31	)*		0.06

Net increase in Unitholders’ capital resulting from operations		0.58			0.82
Distributions to Unitholders:
From distributable earnings		(0.27	)		(0.25	)

Net asset value per Unit, end of period	$	10.64		$	10.85

Total Return (b)(c)		5.61	%		7.98	%
Unitholders’ capital, end of period	$	267,973		$	206,003
Units outstanding, end of period		25,190,253			18,992,563

Ratios to average net assets of Unitholders’ Capital (c):
Net investment income		8.57	%		7.16	%

Operating expenses		2.63	%		3.31	%
Interest and other credit facility expenses		7.11	%		5.43	%

Total expenses		9.74	%		8.74	%

Average debt outstanding	$	274,782		$	291,045
Portfolio turnover ratio		15.9	%		8.1	%

(a)	Calculated using the average Units outstanding method. Weighted average Units outstanding for the nine months ended September 30, 2023 and September 30, 2022 were 24,077,997 and 17,898,419, respectively.

(b)	Calculated as the change in net asset value (“NAV”) per Unit during the period plus distributions declared per Unit, divided by the beginning NAV per Unit. Total return does not include a sales load.

(c)	Not annualized for periods less than one year.

*	Includes the impact of the different Unit amounts used in calculating per Unit data as a result of calculating certain per Unit data based upon the weighted average Units outstanding during the period and certain per Unit data based on the Units outstanding as of a period end.

Table of Contents

SCP Private Credit Income BDC LLC

Notes to Consolidated Financial Statements (unaudited) (continued)

September 30, 2023

(in thousands, except unit amounts)

Note 9. 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 October 13, 2023, the Company delivered a capital drawdown notice to its investor, an investment fund created by a financial institution unaffiliated with the Company (the “Access Fund”), relating to the sale of approximately 1,500,000 Units, for an aggregate offering price of $16,300. The sale closed on October 27, 2023.

The sale of Units is being made pursuant to a subscription agreement (the “Subscription Agreement”) and the LLC Agreement entered into by the Company and the Access Fund. Under the terms of the Subscription Agreement and the LLC Agreement, the Access Fund is required to fund drawdowns to purchase Units up to the amount of its capital commitment on an

as-needed

basis with a minimum of 10 business days’ prior notice to the Access Fund.

The issuance and sale of the Units are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.

On October 20, 2023, the SPV entered into the third amendment (the “Amendment”) to the SPV Facility. Pursuant to the Amendment, (i) commitments to the SPV Facility were reduced from $300,000 to approximately $261,388, as may be further adjusted per the terms of the SPV Facility, (ii) the final maturity date of the SPV Facility was extended from December 31, 2023 to August 15, 2024, and (iii) the general stated interest rate of the SPV Facility was decreased from SOFR plus 2.90% with respect to advances denominated in U.S. dollars and CDOR plus 2.90% with respect to advances denominated in Canadian dollars to SOFR plus 2.70% with respect to advances denominated in U.S. dollars and CDOR plus 2.70% with respect to advances denominated in Canadian dollars, among other

non-material

changes.

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Unitholders’ and Board of Directors

SCP Private Credit Income BDC LLC:

Results of Review of Interim Financial Information

We have reviewed the consolidated statement

assets and liabilities of SCP Private Credit Income BDC LLC (and subsidiaries) (the Company), including the consolidated schedule of investments, as of September 30, 2023, the related consolidated statements of operations and changes in unitholders’ capital for the three-month and nine-month periods ended September 30, 2023 and 2022, the related consolidated statements of cash flows for the nine-month periods ended September 30, 2023 and 2022, 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, 2022, and the related consolidated statements of operations, changes in unitholders’ capital, and cash flows for the year then ended (not presented herein); and in our report dated February 28, 2023, 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, 2022, 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 Company’s 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.

/s/ KPMG LLP

New York, New York

November 7, 2023

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. Such statements involve known and unknown risks, uncertainties and other factors and undue reliance should not be placed thereon. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about SCP Private Credit Income BDC LLC, our current and prospective Portfolio Investments (as defined below), our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continue,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

•

our future operating results, including our ability to achieve objectives;

•

our business prospects and the prospects of our portfolio companies;

•

the impact of investments that we expect to make;

•

our contractual arrangements and relationships with third parties;

•

the dependence of our future success on the general economy and its impact on the industries in which we invest;

•

the impact of any protracted decline in the liquidity of credit markets on our business;

•

the ability of our portfolio companies to achieve their objectives;

•

the valuation of our investments in portfolio companies, particularly those having no liquid trading market;

•

market conditions and our ability to access alternative debt markets and additional debt and equity capital;

•

our expected financings and investments;

•

the adequacy of our cash resources and working capital;

•

the timing of cash flows, if any, from the operations of our portfolio companies;

•

the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments;

•

the ability of our investment adviser to attract and retain highly talented professionals;

•

the ability of our investment adviser to adequately allocate investment opportunities among the Company and its other advisory clients;

•

any conflicts of interest posed by the structure of the management fee and incentive fee to be paid to the Adviser;

•

changes in political, economic or industry conditions, relations between the United States, Russia, Ukraine and other nations, the interest rate environment or conditions affecting the financial and capital markets;

•

the escalating conflict in the Middle East;

•

changes in the general economy, slowing economy, rising inflation, risk of recession and risks in respect of a failure to increase the U.S. debt ceiling; and

•

our ability to anticipate and identify evolving market expectations with respect to environmental, social and governance matters, including the environmental impacts of our portfolio companies’ supply chains and operations.

These statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including without limitation:

•

an economic downturn could impair our portfolio companies’ ability to continue to operate, which could lead to the loss of some or all of our investments in such portfolio companies;

•

a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities;

•

interest rate volatility could adversely affect our results, particularly because we use leverage as part of our investment strategy;

•

currency fluctuations could adversely affect the results of our investments in foreign companies, particularly to the extent that we receive payments denominated in foreign currency rather than U.S. dollars; and

•

the risks, uncertainties and other factors we identify in Item 1A. — Risk Factors contained in our Annual Report on Form 10-K for the year ended December 31, 2022, elsewhere in this Quarterly Report on Form 10-Q and in our other filings with the SEC.

Although we believe that the assumptions on which these forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, the forward-looking statements based on those assumptions also could be inaccurate. In light of these and other uncertainties, the inclusion of a projection or forward-looking statement in this report should not be regarded as a representation by us that our plans and objectives will be achieved. These risks and uncertainties include those described or identified in the section entitled “Item 1A. Risk Factors” and elsewhere in this report. These forward-looking statements apply only as of the date of this report. Moreover, we assume no duty and do not undertake to update the forward-looking statements.

The following analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto contained elsewhere in this Quarterly Report on Form 10-Q.

Overview

SCP Private Credit Income BDC LLC (the “Company”, “we”, “us” or “our”) was formed as a limited liability company under the laws of the State of Delaware on May 18, 2018. We have elected to be regulated as a business development company (“BDC”) under the Investment Company Act of 1940, as amended (the “1940 Act”), and have elected to be treated as a regulated investment company (“RIC”) for U.S. federal income tax purposes. As such, we are required to comply with various regulatory requirements, such as the requirement to invest at least 70% of our assets in “qualifying assets,” source of income limitations, RIC asset diversification requirements, and the requirement to distribute annually at least 90% of our taxable income and tax-exempt interest. In addition, we expect that all of the Company’s total portfolio will be comprised of investments in the U.S. 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 (the Company’s investments in portfolio companies are referred to herein as “Portfolio Investments”).

SLR Capital Partners, LLC (the “Adviser”) serves as the Company’s investment adviser pursuant to an investment management agreement between the Company and the Adviser (as amended, restated or otherwise modified from time to time, the “Investment Management Agreement”). Subject to the overall supervision of the Company’s Board of Directors (the “Board”), the Adviser is responsible for managing the Company’s business and activities, including sourcing investment opportunities, conducting research, performing diligence on potential investments, structuring our investments, and monitoring our portfolio companies on an ongoing basis through a team of investment professionals. The managing members of the Adviser are Michael Gross and Bruce Spohler, who also oversee the Adviser’s investment committee. Pursuant to the Investment Management Agreement, the Adviser has also been appointed to provide administrative and coordination services to the Company (in such capacity, the “Administrative Coordinator”). The Administrative Coordinator supervises or provides the Company’s administrative services, including operational trade support, net asset value calculations, financial reporting, fund accounting and registrar and transfer agent services. The Administrative Coordinator also provides assistance to the Adviser in connection with communicating with investors and other persons with respect to the Company.

The Company is organized primarily 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”). Certain other investors may also invest directly in the Company. For those investors who invest through the Access Fund, we expect the Access Fund will issue a pro rata interest to each investor in the Access Fund (the “Access Fund Investors”) that, with respect to each Access Fund Investor’s investment in the Access Fund, corresponds to the pro rata share of the Company’s units (the “Units”) issued by the Company to the Access Fund. We also expect that Units will only be

sold (i) in the U.S. only to U.S. persons who are “accredited investors” within the meaning of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”) and (ii) outside the U.S. in accordance with Regulation S under the Securities Act. Upon a sale of Units to an investor, we expect the Access Fund will pass its voting rights in the Company through to the Access Fund Investors.

The Company’s principal focus is to invest in first lien secured floating rate loans primarily to upper middle market private leveraged companies (generally, loan sizes of $100 million to $300 million to companies with earnings before interest, tax, depreciation and amortization (“EBITDA”) between approximately $25 million and $100 million) that have significant free cash flow and are in non-cyclical industries in which the Adviser has direct experience. In addition to senior secured loans to upper middle market companies, the Company intends to invest a portion of its assets in non-traditional asset-based loans and first lien loans to rapidly growing healthcare companies. 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 expects to co-invest with other vehicles managed by the Adviser. There can be no assurance that the Company will be able to co-invest with such other funds, including as a result of legal restrictions and contractual restrictions and, as a result, the Company may not be able to meet its investment objective. The Company believes the potential scale resulting from co-investments with vehicles managed by the Adviser will provide the Company a significant advantage to source loans over other lenders that do not have the capital base to provide significant debt financing.

The Company is an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 and the Company may from time to time take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act.

Recent Developments

On October 13, 2023, the Company delivered a capital drawdown notice to the Access Fund, relating to the sale of approximately 1.5 million of the Company’s Units, for an aggregate offering price of $16.3 million. The sale closed on October 27, 2023.

The sale of Units is being made pursuant to a subscription agreement (the “Subscription Agreement”) and the second amended and restated limited liability company agreement (the “LLC Agreement”) entered into by the Company and the Access Fund. Under the terms of the Subscription Agreement and the LLC Agreement, the Access Fund is required to fund drawdowns to purchase Units up to the amount of its capital commitment on an as-needed basis with a minimum of 10 business days’ prior notice to the Access Fund.

The issuance and sale of the Units are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof and Regulation D thereunder.

On October 20, 2023, the SCP Private Credit Income BDC SPV LLC as borrower (the “SPV”), a wholly owned financing subsidiary of the Company, entered into the third amendment (the “Amendment”) to its second amended and restated senior secured revolving credit facility with JPMorgan Chase Bank, National Association acting as administrative agent (the “SPV Facility”). Pursuant to the Amendment, (i) commitments to the SPV Facility were reduced from $300 million to approximately $261.4 million, as may be further adjusted per the terms of the SPV Facility, (ii) the final maturity date of the SPV Facility was extended from December 31, 2023 to August 15, 2024, and (iii) the general stated interest rate of the SPV Facility was decreased from SOFR plus 2.90% with respect to advances denominated in U.S. dollars and CDOR plus 2.90% with respect to advances denominated in Canadian dollars to SOFR plus 2.70% with respect to advances denominated in U.S. dollars and CDOR plus 2.70% with respect to advances denominated in Canadian dollars, among other non-material changes.

Revenues

The Company’s principal focus is to invest in first lien secured floating rate loans primarily to upper middle market private leveraged companies (generally, aggregate loan sizes of $100 million to $300 million to companies with EBITDA between approximately $25 million and $100 million) that have significant free cash flow and are in non-cyclical industries in which we have direct experience. In addition to senior secured loans to upper middle market companies, the Company intends to invest a portion of its assets in non-traditional asset-based loans and first lien loans to rapidly growing healthcare companies.

Expenses

The Company will (directly or indirectly) bear:

(i)

all of its fees, costs, expenses and liabilities, all of its investment-related fees, costs, expenses and liabilities (including with respect to amounts incurred prior to the Company’s initial closing) and all of its other operating fees, costs, expenses and liabilities, including all fees, due diligence costs and other fees, costs, expenses and liabilities related to the identification, sourcing, evaluation, pursuit, acquisition, holding, appraisals, asset management, restructuring and disposing of investments, including all reasonable travel-related fees, costs, expenses and liabilities, including lodging and meals, all fees, costs, expenses and liabilities of legal counsel and financial and other advisers incurred in connection therewith, all fees, costs, expenses and liabilities of information technology services relating to the ongoing management of investments, and all other investment-related fees, costs, expenses and liabilities (to the extent not reimbursed by the relevant portfolio company);

(ii)

all fees, costs, expenses and liabilities related to any audits or agreed upon procedures, tax forms and return preparations and filings, custodian fees and expenses, fund accounting, administrator services, financial statement preparation and reporting, web services for the benefit of Unitholders, delivery costs and expenses in connection with reporting obligations and communications and compliance services;

(iii)

all fees, costs, expenses and liabilities relating to insurance policies (including director and officer liability insurance) maintained by or for the Company, including in respect of Portfolio Investments and/or personnel of the Adviser, the Administrative Coordinator and their affiliates;

(iv)

other administrative fees, costs, and liabilities;

(v)

all fees, costs, expenses and liabilities of brokers, transaction finders and other intermediaries, including brokerage commissions and spreads, and all other transaction-related fees, costs, expenses and liabilities, including reverse break-up fees;

(vi)

all fees, costs, expenses and liabilities relating to derivatives and hedging transactions;

(vii)

all principal amounts of, and interest expense on, borrowings and guarantees, and all other fees, costs, expenses and liabilities arising out of borrowings and guarantees, including the arranging and maintenance thereof, whether incurred by the Company or incurred or facilitated by a special purpose vehicle that makes Portfolio Investments;

(viii)

Management Fees and incentive fees;

(ix)

Administration Fees;

(x)

all fees, costs, expenses and liabilities incurred through the use or engagement of Service Providers;

(xi)

all taxes, fees, penalties and other governmental charges levied against the Company and all fees, costs, expenses, penalties and liabilities related to tax compliance;

(xii)

all fees, costs, expenses and liabilities of the Company’s legal counsel related to extraordinary matters, including expenses for any dispute resolution (including litigation and regulatory-related legal expenses);

(xiii)

all fees, costs, expenses and liabilities relating to legal and regulatory filings, including securities law filings relating to Portfolio Investments;

(xiv)

all fees, costs, expenses and liabilities related to the Company’s indemnification or contribution obligations;

(xv)

all fees, costs, expenses and liabilities for subscription services (to the extent such subscription is required by the general partner of the Access Fund);

(xvi)

any required regulatory filings and related legal fees;

(xvii)

all fees, costs, expenses and liabilities related to liquidating the Company;

(xviii)

transfer agent services; and

(xix)

any other fees, costs, expenses and liabilities not specifically assumed by the Adviser or the Administrative Coordinator.

In addition, the aggregate amount of the operating expenses relating to Unitholders investing directly in the Company set forth in clauses (ii)-(iv) and the operating expenses included in sub-clauses (xiii) and (xvi) related to U.S. regulatory bodies above borne by the Company (directly or indirectly) will not exceed the Operating Expense Cap, calculated as follows: (A) if the Company has less than or equal to $400 million in capital commitments (“Commitments”), an amount equal to the sum of (x) the product of the Commitments and 0.0025 and (y) $1.25 million, or (B) if the Company has greater than $400 million in Commitments, $2.25 million. Any amount in excess of the Operating Expense Cap for any fiscal year will be paid by the Adviser. Solely by way of example, if Commitments equal $350 million, the Operating Expense Cap will be equal to $2.125 million. For the avoidance of doubt, the Operating Expense Cap will not apply to any fees, costs, expenses and liabilities allocable to persons investing indirectly in the Company through any Unitholder.

Additionally, the Company will not bear the costs of any third-party valuation agent engaged solely for purposes of valuing the net asset value of the Company.

The Adviser or Administrative Coordinator and/or their affiliates has advanced organizational and offering expenses to the Company, which include organizational fees, costs, expenses and liabilities of the Company, including legal expenses, incurred in connection with the initial offering of Units and the formation and establishment of the Company. The Adviser or Administrative Coordinator (or such affiliate) has been reimbursed by the Company for such advanced costs and expenses in an amount not to exceed $0.5 million. Accordingly, $0.3 million of offering expenses were charged to capital and $0.1 million of organizational costs were expensed in 2019.

Portfolio and Investment Activity

During the three months ended September 30, 2023, we invested $19.2 million across 11 portfolio companies. This compares to investing $66.1 million in 28 portfolio companies for the three months ended September 30, 2022. Investments sold or prepaid during the three months ended September 30, 2023 totaled $28.7 million versus $4.7 million for the three months ended September 30, 2022.

At September 30, 2023, our portfolio consisted of 53 portfolio companies and was invested 97.4% directly in senior secured loans and 2.6% in common equity/equity interests/warrants, in each case, measured at fair value versus 59 portfolio companies invested 99.9% directly in senior secured loans and 0.1% in common equity/equity interests/warrants at September 30, 2022.

At September 30, 2023, 97.1% of our income producing investment portfolio was floating rate and 2.9% was fixed rate, measured at fair value. At September 30, 2022, 97.4% of our income producing investment portfolio was floating rate and 2.6% was fixed rate, measured at fair value.

Critical Accounting Policies

The preparation of consolidated financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and revenues and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following items as critical accounting policies. Within the context of these critical accounting policies and disclosed subsequent events herein, we are not currently aware of any other reasonably likely events or circumstances that would result in materially different amounts being reported.

Valuation of Portfolio Investments

In December 2020, the SEC adopted new Rule 2a-5 under the 1940 Act addressing fair valuation of fund investments. The new rule sets forth requirements for good faith determinations of fair value, as well as for the performance of fair value determinations, including related oversight and reporting obligations. The new rule also defines “readily available market quotations” for purposes of the definition of “value” under the 1940 Act, and the SEC noted that this definition will apply in all contexts under the 1940 Act. The Company complies with Rule 2a-5’s valuation requirements.

The Company conducts the valuation of its assets, pursuant to which the Company’s net asset value (the “NAV”) is determined, at all times consistent with GAAP and the 1940 Act. The Board will (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.

It is anticipated that in respect of many of the Company’s assets, readily available market quotations will not be obtainable and that such assets will be valued at fair value. 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.

For purposes of calculating the NAV, the Company’s assets will generally be valued as described in Note 2(b) to the Company’s Consolidated Financial Statements.

Leverage

The Company is required to comply with the asset coverage requirements of the 1940 Act. The Company expects to employ leverage and otherwise incur indebtedness with respect to its portfolio both on a recourse and non-recourse basis (including and potentially through guarantees, derivatives, forward commitments and reverse repurchase agreements), but will not exceed the maximum amount permitted by the 1940 Act. The Company is generally permitted, under specified conditions, to issue senior securities in amounts such that the Company’s asset coverage, as defined in the 1940 Act, is at least equal to 150% immediately after such issuance. In connection with the organization of the Company, the Adviser, as the initial Unitholder, has authorized the Company to adopt the 150% asset coverage ratio as of August 2, 2018. In connection with their subscriptions of the Units, our Unitholders were required to acknowledge our ability to operate with an asset coverage ratio that may be as low as 150%. The Company will be exposed to the risks of leverage, which may be considered a speculative investment technique. The use of leverage magnifies the potential for gain and loss on amounts invested and therefore increases the risks associated with investing in our securities. In addition, the costs associated with our borrowings, including any increase in the management fee payable to the Adviser will be borne by our Unitholders. As of September 30, 2023, the Company had $253.8 million of senior securities, for an asset coverage ratio of 205.6%.

Taxation as a RIC

The Company elected to be treated as a RIC under Subchapter M of the Code and intends to qualify for taxation as a RIC annually. As a RIC, the Company generally will not pay corporate-level U.S. federal income taxes on any ordinary income or capital gains that it timely distributes to Unitholders as dividends. In order to qualify for taxation as a RIC, the Company is required, among other things, to be diversified at each quarter end and to timely distribute to its Unitholders at least 90% of investment company taxable income, as defined by the Code, for each year. There is no guarantee the Company will be able to maintain its status as a RIC. Depending on the level of taxable income earned in a given tax year, the Company may choose to carry forward taxable income in excess of current year distributions into the next tax year and pay a nondeductible 4% U.S. federal excise tax on such income, as required. To the extent that the Company determines that its estimated current year annual taxable income will be in excess of estimated current year distributions, the Company will accrue an estimated excise tax, if any, on estimated excess taxable income.

Recent Accounting Pronouncements

None.

Results of Operations

Results are shown for the three and nine months ended September 30, 2023 and September 30, 2022:

Investment Income

For the three and nine months ended September 30, 2023, gross investment income totaled $15.8 million and $45.9 million, respectively. For the three and nine months ended September 30, 2022, gross investment income totaled $11.8 million and $30.1 million, respectively. The comparative increase in gross investment income is due to an increase in the average size of the income-producing portfolio as well as higher interest rates.

Expenses

Expenses totaled $8.4 million and $24.4 million, respectively, for the three and nine months ended September 30, 2023, of which $2.5 million and $5.9 million, respectively, were management, incentive and administration fees and $5.7 million and $17.8 million, respectively, were interest and other credit facility expenses. Administrative services, organization and other general and administrative expenses totaled $0.2 million and $0.7 million, respectively, for the three and nine months ended September 30, 2023. Expenses totaled $6.7 million and $16.5 million, respectively, for the three and nine months ended September 30, 2022, of which $2.1 million and $5.6 million, respectively, were management, incentive and administration fees and $4.5 million and $10.3 million, respectively, were interest and other credit facility expenses. Administrative services, organization and other general and administrative expenses totaled $0.2 million and $0.7 million, respectively, for the three and nine months ended September 30, 2022. Expenses generally consist of management fees, administration fees, performance-based incentive fees, insurance, legal expenses, directors’ expenses, audit and tax 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 comparative increase in expenses is mainly due to higher index rates on our revolving credit facilities.

Net Investment Income

The Company’s net investment income totaled $7.4 million and $21.5 million, or $0.29 and $0.89 per average unit, respectively, for the three and nine months ended September 30, 2023. The Company’s net investment income totaled $5.1 million and $13.5 million, or $0.27 and $0.76 per average unit, respectively, for the three and nine months ended September 30, 2022.

Net Realized Gain (Loss)

The Company had investment sales and prepayments totaling approximately $28.7 million and $97.4 million, respectively, for the three and nine months ended September 30, 2023. Net realized gain over the same periods totaled $0 and $0.1 million, respectively. The Company had investment sales and prepayments totaling approximately $4.7 million and $38.5 million, respectively, for the three and nine months ended September 30, 2022. Net realized gain (loss) over the same periods totaled $0 and $0, respectively.

Net Change in Unrealized Gain (Loss)

For the three and nine months ended September 30, 2023, net change in unrealized gain (loss) on the Company’s assets totaled ($0.1) million and ($8.3) million, respectively. Net unrealized loss for the three months ended September 30, 2023 was primarily due to depreciation on our investments in Peter C. Foy & Associates Insurance Services, LLC, among others, partially offset by appreciation on our investments in Alimera Sciences, Inc. and GSM Acquisition Corp., among others. Net unrealized loss for the nine months ended September 30, 2023 was primarily due to depreciation on our investments in Oldco AI, LLC (f/k/a Amerimark), TAUC Management, LLC and Peter C. Foy & Associates Insurance Services, LLC, among others, partially offset by appreciation on our investments in World Insurance Associates, LLC, iCIMS, Inc. and Pinnacle Treatment Centers, Inc., among others. For the three and nine months ended September 30, 2022, net change in unrealized gain on the Company’s assets totaled $0.4 million and $0.9 million, respectively. Net unrealized gain for the three months ended September 30, 2022 was primarily due to appreciation on our investments in World Insurance Associates, LLC and Arcutis Biotherapeutics, Inc., among others, partially offset by depreciation on our investments in Apex Service Partners, LLC and Rubius Therapeutics, Inc., among others. Net unrealized gain for the nine months ended September 30, 2022 was primarily due to appreciation on our investments in ACRES Commercial Mortgage, LLC, Arcutis Biotherapeutics, Inc. and Kid Distro Holdings, LLC, among others, partially offset by depreciation on our investments in Apex Service Partners, LLC, Rubius Therapeutics, Inc. and GSM Acquisition Corp., among others, as well as the reversal of previously recognized appreciation in Community Brands ParentCo, LLC.

Net Increase in Unitholders’ Capital Resulting From Operations

For the three and nine months ended September 30, 2023, the Company had a net increase in Unitholders’ capital resulting from operations of $7.3 million and $13.3 million, respectively. For the same period, income per average unit was $0.29 and $0.55, respectively. For the three and nine months ended September 30, 2022, the Company had a net increase in Unitholders’ capital resulting from operations of $5.4 million and $14.4 million, respectively. For the same period, income per average unit were $0.29 and $0.81, respectively.

Financial Condition, Liquidity and Capital Resources

Our primary uses of cash are for (i) investments in portfolio companies and other investments to comply with certain portfolio diversification requirements, (ii) the cost of operations (including paying the Adviser), (iii) debt service of any borrowings, and (iv) cash distributions to our Unitholders.

Equity

During the period March 12, 2019 (commencement of operations) to September 30, 2023, on a net basis, the Company sold and issued 25,190,253 Units at an average price of $10.38 per Unit, for net proceeds of $261.5 million. All of our outstanding Units were issued and sold in reliance upon the available exemptions from registration requirements of Section 4(a)(2) of the Securities Act. Unfunded equity capital commitments totaled $64.5 million at September 30, 2023.

Debt

Revolving credit facility due December 2023 (the “SPV Facility”)—On February 27, 2019, the Company, through its wholly-owned subsidiary, SCP Private Credit Income BDC SPV LLC (the “SPV”), entered into a $100 million SPV Facility with JPMorgan Chase Bank, N.A. acting as administrative agent. The commitment can also be expanded up

to $400 million. The stated interest rate on the SPV Facility is SOFR plus 2.90% with no floor requirement and the current final maturity date is December 31, 2023. The fee on undrawn commitments is generally 0.875%. The SPV Facility is secured by all of the assets held by SPV. Under the terms of the SPV Facility, the Company and SPV, 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 SPV also includes usual and customary events of default for credit facilities of this nature. On November 18, 2019, the Company amended the SPV Facility, reducing commitments to $75 million. On February 27, 2021, the Company again amended the SPV Facility, increasing commitments to $100 million. On July 16, 2021, the Company entered into an amended and restated SPV Facility, which increased commitments to $125 million, and on August 18, 2021 entered into a second amended and restated SPV Facility which increased commitments to $200 million and extended the final maturity date to December 31, 2023. On November 2, 2021, the Company entered into Amendment No. 1 to the second amended SPV Facility, which increased commitments to $275 million. On August 3, 2022, the Company entered into Amendment No. 2 to the second amended SPV Facility, which increased commitments to $300 million and changed the interest rate to a SOFR-based calculation. As of September 30, 2023, there were $223.8 million of borrowings outstanding under the SPV Facility. Effective with the end of the Investment Period on December 31, 2022, future advances are no longer permitted.

Revolving credit facility due December 2023 (the “Subscription Facility”)—During the first quarter of 2019, the Company established the $35.0 million Subscription Facility with East West Bank, and subsequently entered into an amendment on June 24, 2019, which increased commitments from $35.0 million to $50.0 million. On March 5, 2021, the Company entered into a second amendment. Under the second amendment, commitments were increased from $50.0 million to $75.0 million and the maturity date was extended. On October 4, 2021, the Company entered into an amended and restated loan and security agreement, which increased commitments to $100 million and extended the maturity date to December 31, 2022. On December 28, 2022, the Company entered into a first amendment to the amended and restated loan and security agreement, changing the stated interest rate on the Subscription Facility to SOFR plus 2.80%, reducing commitments to $75 million and extending the maturity date to December 31, 2023. Under the terms of the Subscription Facility, the Company has made certain customary representations and warranties and is required to comply with various covenants, including reporting requirements and other customary requirements for similar credit facilities. The Subscription Facility also includes usual and customary events of default for credit facilities of this nature. As of September 30, 2023, there were $30.0 million of borrowings outstanding under the Subscription Facility.

Cash Equivalents

We deem certain U.S. Treasury bills, repurchase agreements and other high-quality, short-term debt securities as cash equivalents. The Company makes purchases that are consistent with its purpose of making investments in securities described in paragraphs 1 through 3 of Section 55(a) of the 1940 Act. From time to time, including at or near the end of each fiscal quarter, we consider using various temporary investment strategies for our business. One strategy includes taking proactive steps by utilizing cash equivalents as temporary assets with the objective of enhancing our investment flexibility pursuant to Section 55 of the 1940 Act. More specifically, from time-to-time we may purchase U.S. Treasury bills or other high-quality, short-term debt securities at or near the end of the quarter and typically close out the position on a net cash basis subsequent to quarter end. We may also utilize repurchase agreements or other balance sheet transactions, including drawing down on our credit facilities, as deemed appropriate. The amount of these transactions or such drawn cash for this purpose is excluded from total assets for purposes of computing the asset base upon which the management fee is determined. We held no cash equivalents at September 30, 2023.

Contractual Obligations

We have entered into certain contracts under which we have material future commitments. We have entered into the Investment Management Agreement with the Adviser in accordance with the 1940 Act. Under the Investment Management Agreement, the Company will pay the Adviser the Management Fee and the Incentive Fee, and the Administrative Coordinator the Administration Fee. Under the Investment Management Agreement, the Administrative Coordinator may engage or delegate certain administrative functions to third parties or affiliates on behalf of the Company. The Administrative Coordinator will be responsible for all expenses of its own staff responsible for (i) certain on-going, routine, non-investment-related administrative services for the Company, (ii) the coordination of various third-party services needed or required by the Company, and (iii) certain Unitholder servicing functions.

A summary of our significant contractual payment obligations is as follows as of September 30, 2023:


Payments due by Period as of September 30, 2023 (dollars in millions)
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Credit facilities (1)	$	253.8	$	253.8	$	—	$	—	$	—

(1)	At September 30, 2023, we had a total of $45.0 million of unused borrowing capacity under our credit facilities, subject to borrowing base limits.

If any of the contractual obligations discussed above are terminated, our costs under any new agreements that we enter into may increase. In addition, we would likely incur significant time and expense in locating alternative parties to provide the services we expect to receive under the Investment Management Agreement. Any new investment advisory agreement would also be subject to approval by our Unitholders.

Off-Balance Sheet Arrangements

From time-to-time and in the normal course of business, the Company may make unfunded capital commitments to current or prospective portfolio companies. Typically, the Company may agree to provide delayed-draw term loans or, to a lesser extent, revolving loan or equity commitments. These unfunded capital commitments always take into account the Company’s liquidity and cash available for investment, portfolio and issuer diversification, and other considerations. Accordingly, the Company had the following unfunded capital commitments at September 30, 2023 and December 31, 2022, respectively:


		September 30, 2023		December 31, 2022
(in millions)
Outset Medical, Inc.		$	11.9	$	11.9
Human Interest Inc.			6.8		6.8
Arcutis Biotherapeutics, Inc.	��		3.1		3.1
Ardelyx, Inc.			2.7		2.7
iCIMS, Inc.			2.5		3.9
Cerapedics, Inc.			2.4		2.4
Neuronetics, Inc.			2.0		—
High Street Buyer, Inc.			1.9		2.8
Maurices, Incorporated			1.6		2.7
RxSense Holdings, LLC			1.6		1.6
Enverus Holdings, Inc.			1.5		1.2
Nexus Intermediate III, LLC (Vortex)			1.3		1.3
Kid Distro Holdings, LLC			1.1		1.1
GSM Acquisition Corp.			1.1		1.1
Foundation Consumer Brands, LLC			1.0		1.0
Basic Fun, Inc.			1.0		1.2
Ultimate Baked Goods Midco LLC			0.7		0.6
Kaseya, Inc.			0.6		1.3
MRI Software LLC			0.6		0.6


	September 30, 2023		December 31, 2022
(in millions)
ENS Holdings III Corp. & ES Opco USA LLC		0.6		0.2
SunMed Group Holdings, LLC		0.5		0.2
Transportation Insight, LLC		0.4		1.8
Vessco Midco Holdings, LLC		0.4		5.0
TAUC Management, LLC		0.4		0.4
CC SAG Holdings Corp. (Spectrum Automotive)		0.2		6.6
Accession Risk Management Group, Inc.		—		10.3
Oral Surgery Partners Holdings, LLC		—		3.3
Glooko, Inc.		—		3.2
Plastics Management, LLC		—		3.1
Spectrum Pharmaceuticals, Inc.		—		3.0
Southern Orthodontic Partners Management, LLC		—		2.6
Pediatric Home Respiratory Services, LLC		—		2.4
Orthopedic Care Partners Management, LLC		—		2.2
Erie Construction Mid-west, LLC		—		1.6
Meditrina, Inc.		—		1.2
Tilley Chemical Buyer, Inc.		—		0.6
Peter C. Foy & Associates Insurance Services, LLC		—		0.6
Pinnacle Treatment Centers, Inc.		—		0.5
Ivy Fertility Services, LLC		—		0.5
BayMark Health Services, Inc.		—		0.5
NAC Holdings Corporation		—		0.5
Apex Service Partners, LLC		—		0.3
All States Ag Parts, LLC		—		0.2
World Insurance Associates, LLC		—		0.1

Total Commitments	$	47.9	$	98.2

Distributions

Tax characteristics of all distributions will be reported to unitholders on Form 1099 after the end of the calendar year. Future quarterly distributions, if any, will be determined by our Board. We expect that our distributions to unitholders will generally be from accumulated net investment income, from net realized capital gains or non-taxable return of capital, if any, as applicable.

We have elected to be taxed as a RIC under Subchapter M of the Code. To maintain our RIC tax treatment, we must distribute at least 90% of our ordinary income and realized net short-term capital gains in excess of realized net long-term capital losses, if any, out of the assets legally available for distribution. In addition, although we currently intend to distribute realized net capital gains (i.e., net long-term capital gains in excess of short-term capital losses), if any, at least annually, out of the assets legally available for such distributions, we may in the future decide to retain such capital gains for investment.

We may not be able to achieve operating results that will allow us to make distributions at a specific level or to increase the amount of these distributions from time to time. In addition, due to the asset coverage test applicable to us as a BDC, we may in the future be limited in our ability to make distributions. Also, our revolving credit facility may limit our ability to declare distributions if we default under certain provisions. If we do not distribute a certain percentage of our income annually, we will suffer adverse tax consequences, including possible loss of the tax benefits available to us as a RIC. 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 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 RIC.

With respect to the distributions to unitholders, 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 unitholders.

Related Parties

We have entered into the Investment Management Agreement with the Adviser. Mr. 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 Adviser. In addition, Mr. Kajee, our Chief Financial Officer and Treasurer serves as the Chief Financial Officer for the Adviser.

The Adviser may also manage other funds in the future that may have investment mandates that are similar, in whole and in part, with ours. For example, the Adviser presently serves as investment adviser to SLR Investment Corp., a publicly traded BDC, which focuses on investing in senior secured loans, financing leases and to a lesser extent, unsecured loans and equity securities, SLR HC BDC LLC, an unlisted BDC whose principal focus is to invest directly and indirectly in senior secured loans and other debt instruments typically to middle market companies within the healthcare industry, and SLR Private Credit BDC II LLC, an unlisted BDC whose principal focus is to invest in first lien senior secured floating rate loans primarily to upper middle market leveraged companies with EBITDA between approximately $25 million and $250 million that have significant free cash flow and are in non-cyclical industries in which the Adviser has significant experience. In addition, Michael S. Gross, our Chairman, Co-Chief Executive Officer and President, Bruce Spohler, our Co-Chief Executive Officer and Chief Operating Officer, and Shiraz Y. Kajee, our Chief Financial Officer, serve in similar capacities for SLR Investment Corp., SLR HC BDC LLC and SLR Private Credit BDC II LLC. The Adviser and certain investment advisory affiliates may determine that an investment is appropriate for us and for one or more of those other funds. In such event, depending on the availability of such investment and other appropriate factors, the Adviser or its affiliates may determine that we should invest side-by-side with one or more other funds. Any such investments will be made only to the extent permitted by applicable law and interpretive positions of the SEC and its staff, and consistent with the Adviser’s 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 Company’s investment objective, positions, policies, strategies and restrictions as well as regulatory requirements and other pertinent factors, and pursuant to various conditions (the “Order”). If the Company is unable to rely on the Order for a particular opportunity, such opportunity will be allocated first to the entity whose investment strategy is the most consistent with the opportunity being allocated, and second, if the terms of the opportunity are consistent with more than one entity’s investment strategy, on an alternating basis. Although the Adviser’s investment professionals will endeavor to allocate investment opportunities in a fair and equitable manner, the Company and its Unitholders could be adversely affected to the extent investment opportunities are allocated among us and other investment vehicles managed or sponsored by, or affiliated with, our executive officers, directors and members of the Adviser. In addition, we have adopted a formal code of ethics that governs the conduct of our officers and directors. Our officers and directors also remain subject to the duties imposed by the 1940 Act and the Delaware Limited Liability Company Act.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We are subject to financial market risks, including changes in interest rates. Uncertainty with respect to rising interest rates, inflationary pressures, risks in respect of a failure to increase the U.S. debt ceiling or a downgrade in the U.S. credit rating, the wars between Ukraine and Russia and health epidemics and pandemics introduced significant volatility in the financial markets, and the effects of this volatility have materially impacted and could continue to materially impact our market risks. Because we fund a portion of our investments with borrowings, our net investment income is affected by the difference between the rate at which we invest and the rate at which we borrow. As a result, there can be no assurance that a significant change in market interest rates will not have a material adverse effect on our net investment income. In a low interest rate environment, including a reduction of LIBOR or SOFR to zero, the difference between the total interest income earned on interest earning assets and the total interest expense incurred on interest bearing liabilities may be compressed, reducing our net interest income and potentially adversely affecting our operating results. Conversely, in a rising interest rate environment, such as the current economic environment, such difference could potentially increase thereby increasing our net investment income. During the nine months ended September 30, 2023, certain investments in our investment portfolio had floating interest rates. These floating rate investments were primarily based on floating LIBOR or SOFR and typically have durations of one to three months after which they reset to current market interest rates. Additionally, some of these investments have floors. The Company also has revolving credit facilities that are generally based on floating LIBOR or SOFR. Assuming no changes to our balance sheet as of September 30, 2023 and no new defaults by portfolio companies, a hypothetical one percent decrease in LIBOR or SOFR on our comprehensive floating rate assets and liabilities would decrease our net investment income by approximately eight cents per average unit over the next twelve months. Assuming no changes to our balance sheet as of September 30, 2023 and no new defaults by portfolio companies, a hypothetical one percent increase in LIBOR or SOFR on our comprehensive floating rate assets and liabilities would increase our net investment income by approximately eight cents per average unit over the next twelve months. However, we may hedge against interest rate fluctuations from time-to-time by using standard hedging instruments such as futures, options, swaps and forward contracts subject to the requirements of the 1940 Act. While hedging activities may insulate us against adverse changes in interest rates, they may also limit our ability to participate in any benefits of certain changes in interest rates with respect to our portfolio of investments. At September 30, 2023, we have no interest rate hedging instruments outstanding on our balance sheet.


Increase (Decrease) in LIBOR/SOFR		(1.00	%)		1.00	%
Increase in Net Investment Income Per Unit Per Year	$	(0.08	)	$	0.08

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of September 30, 2023 (the end of the period covered by this report), our management, including our Co-Chief Executive Officers and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, our management, including the Co-Chief Executive Officers and Chief Financial Officer, concluded that our disclosure controls and procedures were effective and provided reasonable assurance that information required to be disclosed in our periodic SEC filings is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Co-Chief Executive Officers and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of such possible controls and procedures.

(b) Changes in Internal Controls Over Financial Reporting

Management has not identified any change in the Company’s internal control over financial reporting that occurred during the third quarter of 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We and our consolidated subsidiaries are not currently subject to any material pending legal proceedings threatened against us. From time to time, we may be a party to certain legal proceedings incidental to the normal course of our business including the enforcement of our rights under contracts with our portfolio companies. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our business, financial condition or results of operations beyond what has been disclosed within these financial statements.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in “Risk Factors” in the February 28, 2023 filing of the Annual Report on Form 10-K, which could materially affect our business, financial condition and/or operating results. The risks described in our Annual Report are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results. Other than the risk factors set forth below, there have been no material changes during the three months ended September 30, 2023 to the risk factors discussed in “Risk Factors” in the February 28, 2023 filing of our Annual Report on Form 10-K.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties could have a material adverse effect on us, the Adviser and our portfolio companies.

Cash not held in custody accounts and held by us, our Adviser and by our portfolio companies in non-interest-bearing and interest-bearing operating accounts could, at times, exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, we, our Adviser, or our portfolio companies could lose all or a portion of those amounts held in excess of such insurance limits. In addition, actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems, which could adversely affect our, our Adviser’s and our portfolio companies’ business, financial condition, results of operations, or prospects.

Although we and our Adviser assess our and our portfolio companies’ banking and financing relationships as we believe necessary or appropriate, our and our portfolio companies’ access to funding sources and other credit arrangements in amounts adequate to finance or capitalize current and projected future business operations could be significantly impaired by factors that affect the financial institutions with which we, our Adviser or our portfolio companies have arrangements directly or the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services

industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry. These factors could involve financial institutions or financial services industry companies with which we, our Adviser or our portfolio companies have financial or business relationships, but could also include factors involving financial markets or the financial services industry generally.

In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us, our Adviser, or our portfolio companies to acquire financing on acceptable terms or at all.

The alternative reference rates that have replaced LIBOR in our credit arrangements and other financial instruments may not yield the same or similar economic results as LIBOR over the life of such transactions.

The London Interbank Offered Rate (“LIBOR”) is an index rate that historically was widely used in lending transactions and was a common reference rate for setting the floating interest rate on private loans. LIBOR was typically the reference rate used in floating-rate loans extended to our portfolio companies.

The ICE Benchmark Administration (“IBA”) (the entity that is responsible for calculating LIBOR) ceased providing overnight, one, three, six and twelve months USD LIBOR tenors on September 30, 2023. In addition, the United Kingdom’s Financial Conduct Authority (“FCA”), which oversees the IBA, now prohibits entities supervised by the FCA from using LIBORs, including USD LIBOR, except in very limited circumstances.

In the United States, SOFR is the preferred alternative rate for LIBOR. SOFR is a measure of the cost of borrowing cash overnight, collateralized by U.S. Treasury securities, and is based on directly observable U.S. Treasury-backed repurchase transactions. SOFR is published by the Federal Reserve Bank of New York each U.S. Government Securities Business Day, for transactions made on the immediately preceding U.S. Government Securities Business Day. Alternative reference rates that may replace LIBOR, including SOFR for USD transactions, may not yield the same or similar economic results as LIBOR over the lives of such transactions.

As of the filing date of this Quarterly Report on Form 10-Q, many of our loans that referenced LIBOR have been amended to reference the forward-looking term rate published by CME Group Benchmark Administration Limited based on SOFR (“CME Term SOFR”) or CME Term SOFR plus a fixed spread adjustment. CME Term SOFR rates are forward-looking rates that are derived by compounding projected overnight SOFR rates over one, three, and six months taking into account the values of multiple consecutive, executed, one-month and three-month CME Group traded SOFR futures contracts and, in some cases, over-the-counter SOFR Overnight Indexed Swaps as an indicator of CME Term SOFR reference rate values. CME Term SOFR and the inputs on which it is based are derived from SOFR. Since CME Term SOFR is a relatively new market rate, there will likely be no established trading market for credit agreements or other financial instruments when they are issued, and an established market may never develop or may not be liquid. Market terms for instruments referencing CME Term SOFR rates may be lower than those of later-issued CME Term SOFR indexed instruments. Similarly, if CME Term SOFR does not prove to be widely used, the trading price of instruments referencing CME Term SOFR may be lower than those of instruments indexed to indices that are more widely used. Further, the composition and characteristics of SOFR and CME Term SOFR are not the same as those of LIBOR. Even with the application of a fixed spread adjustment, LIBOR and CME Term SOFR will not have the same composition and characteristics, and there can be no assurance that the replacement rate, as so adjusted, will be a direct substitute for LIBOR.

There can be no guarantee that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of investors in loans referencing SOFR. If the manner in which SOFR or CME Term SOFR is calculated is changed, that change may result in a reduction of the amount of interest payable on such loans and the trading prices of the SOFR Loans. In addition, there can be no guarantee that loans referencing SOFR or CME Term SOFR will continue to reference those rates until maturity or that, in the future, our loans will reference benchmark rates other than CME Term SOFR. Should any of these events occur, our loans, and the yield generated thereby, could be affected. Specifically, the anticipated yield on our loans may not be fully realized and our loans may be subject to increased pricing volatility and market risk.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

There were no unregistered sales of equity securities other than those already disclosed in certain Form 8-Ks filed with the SEC.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

Rule

10b5-1

Trading Plans

During the fiscal quarter ended September 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule

10b5-1

trading arrangement” as defined in Item 408(c) of Regulation

S-K.

Item 6. Exhibits

The following exhibits are filed as part of this report or hereby incorporated by reference to exhibits previously filed with the SEC:


3.1		Certificate of Formation⁽¹⁾

3.2		Second Amended and Restated Limited Liability Company Agreement⁽²⁾

4.1		Form of Subscription Agreement⁽¹⁾

31.1		Certification of Co-Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

31.2		Certification of Co-Chief Executive Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

31.3		Certification of Chief Financial Officer pursuant to Rule 13a-14 of the Securities Exchange Act of 1934, as amended.*

32.1		Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification of Co-Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.3		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded with the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema Document*

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document*

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document*

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document*

104		Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

*	Filed herewith.

(1)	Previously filed as an exhibit to Amendment No. 1 to the Registrant’s Registration Statement on Form 10 (File No. 000-55955) filed with the SEC on August 24, 2018.

(2)	Previously filed in connection with the Registrant’s report on Form 10-K filed on February 20, 2020.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 7, 2023.


SCP PRIVATE CREDIT INCOME BDC LLC

By:		/s/ MICHAEL S. GROSS
		Michael S. Gross Co-Chief Executive Officer (Principal Executive Officer)

By:		/s/ BRUCE J. SPOHLER
		Bruce J. Spohler Co-Chief Executive Officer (Principal Executive Officer)

By:		/s/ SHIRAZ Y. KAJEE
		Shiraz Y. Kajee Chief Financial Officer (Principal Financial and Accounting Officer)

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. sophomore Avg

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller Reporting company

Emerging growth company