Company: SWKH
Filing Date: 2025-04-29
Form Type: ARS
Source: 0001628280-25-020753
Chunk: 106

Company: SWK Holdings Corp
Filing Date: 2025-04-29
Form: ARS
Chunk 106
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• the history of tax net operating losses in recent years;

• predictability of operating results;

• profitability for a sustained period of time; and

• level of profitability on a quarterly basis.

As of December 31, 2024, the Company had cumulative net income before tax for the three years then ended. Based on its historical operating performance, the Company had previously concluded that it was more likely than not that the Company would not be able to realize the full benefit of the U.S. federal and state deferred tax assets in the future. However, at December 31, 2024 the Company has concluded that it is more likely than not that the Company will be able to realize approximately $23.5 million benefit of the U.S. federal and state deferred tax assets in the future.

The Company will continue to assess the need for a valuation allowance on the deferred tax assets by evaluating both positive and negative evidence that may exist on a quarterly basis. Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated statements of income for the period that the adjustment is determined to be required. There was no valuation allowance against deferred tax assets as of December 31, 2024 and 2023, respectively.

Deferred tax assets consist of the following (in thousands):

| Deferred tax assets:        |     | December 31, 
 2024         |        |     | 2023 |        |
|:----------------------------|:----|:-------------|-------:|:----|:-----|-------:|
| Credit carryforward         |     | $            |  2,899 |     | $    |  2,973 |
| Provision for credit losses |     |              |  2,433 |     |      |  2,967 |
| Stock-based compensation    |     |              |    230 |     |      |    153 |
| Other                       |     |              |  2,999 |     |      |  2,438 |
| Net operating losses        |     |              | 13,682 |     |      | 19,891 |
| Gross deferred tax assets   |     | $            | 22,243 |     | $    | 28,422 |
| Deferred tax liabilities:   |     |              |        |     |      |        |
| Intangible assets           |     |              |  1,863 |     |      |    586 |
| Other                       |     |              |