Company: SWKH
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0001628280-25-013989
Chunk: 200

Company: SWK Holdings Corp
Filing Date: 2025-03-20
Form: 10-K
Item: Item 8
Chunk 200
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Note 14. Income Taxes  

The components of income before income tax expense (benefit) are as follows (in thousands):December 31,20242023U.S.$18,372 $14,613  The Company’s income tax expense (benefit) was as follows (in thousands):December 31,20242023Current expenseState$78 $13 Deferred expense (benefit)Federal 4,879 (1,233)State(73)(54)Total income tax expense (benefit)$4,884 $(1,274)The components of the income tax expense (benefit) are as follows (in thousands):December 31,20242023Federal tax provision at statutory rate$3,858 $3,070 Change in valuation allowance— (6,697)State taxes, net of federal income tax benefit(13)(52)Impairment of goodwill— 1,765 Mark-to-market adjustments(476)(50)Tax credits(4)(167)Contingent consideration revaluation(1,029)(1,323)Other143 116 Write off of expired deferred tax assets2,405 2,064 Total income tax expense (benefit)$4,884 $(1,274) The Company records deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting standards that address income taxes. Significant management judgment is required in determining whether a valuation allowance against the Company’s deferred tax assets is required. The Company has considered all available evidence, both positive and negative, such as historical levels of income and predictability of future forecasts of taxable income from existing investments, in determining whether a valuation allowance is required. The Company is also required to forecast future taxable income in accordance with accounting standards that address income taxes to assess the appropriateness of a valuation allowance, which further requires the 

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exercise of significant management judgment. The Company focuses on forecasting future taxable income for the investment portfolio that exists as of the balance sheet date. Specifically, the Company evaluated the following criteria when considering a valuation allowance:•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