SLR SENIOR INVESTMENT CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
December 31, 2021
(in thousands, except share amounts)
federal tax years since 2018 remain subject to examination by the Internal Revenue Service and the state department of revenue. The capital loss carryforwards shown above do not expire.
Note 9(b). Other Tax Information (unaudited)
No distributions paid during the fiscal years ended December 31, 2021, 2020 or 2019 were eligible for qualified dividend income treatment
or were eligible for the dividends received deduction for corporate stockholders. For the fiscal years ended December 31, 2021, 2020, and 2019, 99.70%, 100% and 99.25%, respectively, of each of the distributions paid during the year represent
interest-related dividends. For the fiscal years ended December 31, 2021, 2020 and 2019, none of the distributions represent short-term capital gains dividends.
Note 10. SLR Healthcare ABL
We acquired
an equity interest in SLR Healthcare ABL, f/k/a Gemino Healthcare Finance, LLC (SLR Healthcare) on September 30, 2013. SLR Healthcare is a commercial finance company that originates, underwrites, and manages primarily secured,
asset-based loans for small and mid-sized companies operating in the healthcare industry. Our initial investment in SLR Healthcare ABL was $32,839. The management team of SLR Healthcare co-invested in the transaction and continues to lead SLR Healthcare. As of December 31, 2021, SLR Healthcares management team and SLR Senior own approximately 7% and 93% of the equity in SLR Healthcare,
respectively.
Concurrent with the closing of the transaction, SLR Healthcare entered into a new, four-year, non-recourse, $100,000 credit facility with non-affiliates, which was expandable to $150,000 under its accordion feature. Effective March 31, 2014, the credit facility
was expanded to $105,000 and again on June 27, 2014 to $110,000. On May 27, 2016, SLR Healthcare entered into a new $125,000 credit facility which replaced the previously existing facility. The new facility has similar terms as compared to
the previous facility and includes an accordion feature increase to $200,000 and had a maturity date of May 27, 2020. On June 28, 2019, this $125,000 facility was amended, extending the maturity date to June 28, 2023.
SLR Healthcare currently manages a highly diverse portfolio of directly-originated and underwritten senior-secured commitments. As of
December 31, 2021, the portfolio totaled approximately $183,501 of commitments with a total net investment in loans of $81,604 on total assets of $91,275. As of December 31, 2020, the portfolio totaled approximately $218,028 of
commitments with a total net investment in loans of $39,340 on total assets of $58,881. At December 31, 2021, the portfolio consisted of 36 issuers with an average balance of approximately $2,267 versus 37 issuers with an average balance of
approximately $1,063 at December 31, 2020. All of the commitments in SLR Healthcares portfolio are floating-rate, senior-secured, cash-pay loans. SLR Healthcares credit facility, which is non-recourse to us, had approximately $60,000 and $25,000 of borrowings outstanding at December 31, 2021 and December 31, 2020, respectively. For the years ended December 31, 2021, 2020 and 2019, SLR
Healthcare had net income of $662, $4,289 and $3,559, respectively, on gross income of $10,052, $10,367 and $12,717, respectively. Due to timing and non-cash items, there may be material differences between
GAAP net income and cash available for distributions. SLR Healthcares consolidated financial statements for the fiscal years ended December 31, 2021 and December 31, 2020 are attached as an exhibit to this annual report on Form 10-K.
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