Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 24

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 24
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289,009 Allowance for credit losses(1,923)(6,862)(8,785)(2,075)(9,174)(11,249)Total carrying value$10,896 $212,180 $223,076 $12,755 $265,005 $277,760 As of March 31, 2025, the Company had three finance receivables in nonaccrual status: (1) the Flowonix Medical, Inc. (“Flowonix”) royalty, with a carrying value of $7.4 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 $3.0 million. The Company collected $2.2 million and $0.7 million on its nonaccrual finance receivables for the three months ended March 31, 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.

10

Credit Quality of Finance ReceivablesThe Company evaluates all finance receivables on a quarterly basis and assigns a risk rating based upon management’s assessment of the borrower’s ability and likelihood of repayment. The assessment is subjective and based on multiple factors, including but not limited to, financial strength of borrowers and operating results of the underlying business. The credit risk analysis and rating assignment is performed quarterly in conjunction with the Company's assessment of its allowance for credit losses. The Company uses the following definitions for its risk ratings for Term Loans:1: Borrower performing well below Company expectations, and the borrower's ability to raise sufficient capital to operate its business or repay debt