Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 33

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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, 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.

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 March 31, 2025. 

16

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 MOD3 headquarters is located in Boonton, New Jersey, where MOD3 leases approximately 32,000 square feet of space. The office lease expires in December 2029 with an option to renew for an additional five years.The components of lease cost were as follows (in thousands):Three Months EndedMarch 31,20252024Operating lease cost$108 $125 Variable lease cost10 15 Total lease cost$118 $140 Future minimum rent on the Company's operating leases was as follows as of March 31, 2025 (in thousands):Remainder of 2025$135 2026183 2027188 2028128 2029— Thereafter— Total future lease payments$634 (1) As of March 31, 2025, total future lease payments exclude $1.3 million of lease payments related to held for sale leases, of which $0.2 million are due in the remainder of 2025.Unfunded CommitmentsPer the terms of the royalty purchase or credit agreements, unf