Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 81

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 8
Chunk 81
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2025 from other expense, net of $0.4 million for the three months ended March 31, 2024. The $1.9 million decrease primarily relates to the loss on revaluation of finance receivables and related interest receivable held for sale, offset by a gain on the early payoff of the Iluvien royalty. 

Income Tax Expense

During the three months ended March 31, 2025 we recognized $1.3 million of income tax expense, for the three months ended March 31, 2024 we recognized an income tax expense of $0.2 million. Income tax expense increased period over period due to an increase in net income compared to the previous period.

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Liquidity and Capital Resources 

As of March 31, 2025, we had $29.8 million in cash and cash equivalents, compared to $5.9 million as of December 31, 2024. The primary driver of the $23.9 million increase in our cash balance was primarily related to interest fees and principal and royalty payments received on finance receivables. The increase in cash and cash equivalents was partially offset by investment funding, net of deferred fees and origination expenses, net payments of our credit facility, payments for payroll and benefits expense, payments on accounts payable, and share repurchases.

We entered into a $45.0 million revolving credit facility in June 2023 with First Horizon Bank. The Credit Agreement provides for one or more incremental increases not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any time prior to the Commitment Termination Date. On October 10, 2023, the Company entered into a First Amendment to Credit Agreement pursuant to which Woodforest National Bank was added as a lender under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate commitments under the Credit Agreement from $45.0 million to $60.0 million. As of March 31, 2025, there was no outstanding amount under the new Credit Agreement, and $55.0 million was available for borrowing. The $60.0 million Credit Agreement contains a $5.0 million liquidity covenant, bringing the total amount available for borrowing to $55.0 million. 

Driver of Cash Flow

Our ability to generate cash in the future depends primarily upon our success in implementing our Finance Receivables business model of generating income by providing capital to a broad range of