Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 61

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 61
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$73,011 $66,584 $46,107 $27,351 $60,022 $289,009 

12

Note 4. Assets Held For Sale

Finance receivables held for saleThe Company generally holds its finance receivables as long-term investments, however, the Company occasionally classifies some of its finance receivables as held for sale. Finance receivables held for sale are recorded at the lower of fair value or amortized cost. On the date of transfer into the held for sale category, any previously recorded allowance for credit losses is reversed in earnings and the finance receivables are recorded at amortized cost. If the amortized cost basis exceeds the finance receivables’ carrying value on the date of transfer, a valuation allowance is established equal to the difference between amortized cost basis and fair value. Deferred fees and costs related to finance receivables held for sale are deferred upon transfer to the held for sale category and are included in the carrying value of finance receivables held for sale on the consolidated balance sheets. The Company recognizes the full amount of deferred fees and costs at the time of sale as a component of the gain or loss on sale.On March 19, 2025, the Company entered into a definitive agreement with Soleus Capital (“Soleus”) for the sale of the majority of its finance receivables segment royalty portfolio for approximately $34.0 million in cash ("the Transaction"), which approximated the fair value of the finance receivables held for sale as of March 31, 2025. At that time, the amortized cost basis of the royalty portfolio was $37.7 million, inclusive of interest receivables of $2.3 million. As a result of the Transaction, the Company performed a lower-of-cost-or-market analysis in the aggregate resulting in a loss of $3.7 million which is included in the "Loss on revaluation of finance receivables" caption on the Company's unaudited condensed consolidated statements of income for the three months ended March 31, 2025. The transaction closed subsequent to March 31, 2025 on April 10, 2025. In conjunction with the closing, the Company's Board of Directors declared a special cash dividend of $4.00 per share, payable to all holders of record of the Company’s common stock as of April 24, 2025, with a payment date of May 8, 2025.D