Company: SWKH
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050155
Chunk: 24

Company: SWK Holdings Corp
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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 $289,009 Allowance for credit losses(1,725)(6,015)(7,740)(2,075)(9,174)(11,249)Total carrying value$9,777 $235,619 $245,396 $12,755 $265,005 $277,760 As of September 30, 2025, the Company had three finance receivables in nonaccrual status: (1) the Flowonix Medical, Inc. (“Flowonix”) royalty, with a carrying value of $6.6 million; (2) the Best ABT, Inc. (“Best”) royalty, with a carrying value of $2.3 million; and (3) the Ideal Implant, Inc. (“Ideal”) royalty, with a carrying value of $2.5 million. The Company collected $2.5 million and $2.6 million on its nonaccrual finance receivables for the nine months ended September 30, 2025 and 2024, respectively.Loan Modifications Made to Borrowers Experiencing Financial Difficulty The Company evaluates the carrying value of each finance receivable for impairment. A term loan is considered to be impaired when, based on current information and events, it is determined that the Company will not be able to collect the amounts due according to the loan contract, including scheduled interest payments. This evaluation is generally based on delinquency information, an assessment of the borrower’s financial condition and the adequacy of collateral, if any. In certain circumstances, the Company may place a finance receivable on nonaccrual status but conclude it is not impaired. The Company may retain independent third-party valuations on such nonaccrual positions to support impairment decisions. On an ongoing basis, the Company monitors the performance of modified loans to their restructured terms.

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Revaluation of Finance ReceivablesOn April 10, 2025, the Company completed the sale of the majority of its finance receivables segment royalty portfolio to Soleus Capital (“Soleus”) for approximately $34.0 million in cash ("the Transaction"), which approximated the fair value of those royalties. 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