Company: SWKH
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050155
Chunk: 74

Company: SWK Holdings Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 74
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 in the Indenture), plus (iii) accrued and unpaid interest, if any, to, but excluding, the date of redemption. On and after any redemption date, interest will cease to accrue on the redeemed Notes. Additionally, upon the occurrence of a Triggering Event (as defined in the Indenture), holders of the Notes will have the right to 

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require the Company to make an offer to repurchase all or any portion of their Notes for cash at a purchase price equal to 100% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the date of purchase.The Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company’s existing and future senior unsecured indebtedness. During the three and nine months ended September 30, 2025, the Company recognized $0.9 million and $2.7 million, respectively, of interest expense in connection with the Notes. During the three and nine months ended September 30, 2024, the Company recognized $0.9 million and $2.7 million, respectively, of interest expense in connection with the Notes.

The Company evaluated the 2027 Senior Notes for derivatives pursuant to Accounting Standard Codification ("ASC") 815, "Derivatives and Hedging," and identified an embedded derivative that required bifurcation as the feature is not clearly and closely related to the host instrument. The embedded derivative was a default provision, which could require additional interest payments. The Company reassesses the feature quarterly to determine if it requires separate accounting. There have been no changes to the Company’s assessment that the fair value of the embedded derivative is immaterial through September 30, 2025. 

Note 7. Commitments and Contingencies 

Lease ObligationsAll the Company’s material leases are operating leases. Right-of-use ("ROU") assets related to operating leases are included on the unaudited condensed consolidated balance sheets in other non-current assets. Operating lease cost is recognized over the lease term on a straight-line basis and is recorded within general and administrative expenses on the unaudited condensed consolidated statements of income. In March of 2023, the Company entered into a new lease for office space in Dallas, Texas on Sherry Lane. The Company’s corporate office space in Dallas, Texas totals approximately 4,450 square feet.The components of lease cost were as follows (in thousands):Three Months EndedSeptember 30,Nine Months Ended