Company: SWKH
Filing Date: 2025-04-29
Form Type: ARS
Source: 0001628280-25-020753
Chunk: 49

Company: SWK Holdings Corp
Filing Date: 2025-04-29
Form: ARS
Chunk 49
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 of the product covered by the License Agreement. Accordingly, the Company concluded that the liability for contingent consideration, previously held at its estimated fair value of $4.9 million, should be $0.

#### Depreciation and Amortization Expense
The $1.2 million decrease in depreciation and amortization expense for the year ended December 31, 2024 primarily consists of a decrease in amortization expense related to no longer amortizing intangible assets related to the Cara license as the intangible assets were fully impaired during the year. Amortization expense is aligned with the expected future cash flows of the intangible assets. See Note 3 for more information on the impairment of the Cara license.

#### General and Administrative Expense
General and administrative expenses consist primarily of compensation, stock-based compensation and related costs for management, staff and Board; legal and audit expenses; and corporate governance expenses. General and administrative expenses increased to $11.5 million for the year ended December 31, 2024 from $11.2 million for the year ended December 31, 2023.

#### Other Income, Net
Other income, net increased to $6.8 million for the year ended December 31, 2024. Other income, net was immaterial for the year ended December 31, 2023. The $6.8 million increase includes a $2.5 million gain on revaluation related to the Iluvien royalty after a contractual re-negotiation, a $2.4 million increase in unrealized gains on warrants, a $1.1 million gain on asset payoff, and a gain of $0.6 million due to foreign currency transactions.

#### Income Tax Expense
During the years ended December 31, 2024 and 2023 we recognized $4.9 million income tax expense and $1.3 million of income tax benefit, respectively. Income tax expense increased period over period due to the release of valuation allowance on deferred tax assets of $6.7 million during the year ended December 31, 2023 and an increase in the Company's effective tax rate to 26.6% as of December 31, 2024 from a benefit of 8.7% for the same period in the prior year.

#### Liquidity and Capital Resources
As of December 31, 2024, we had $5.9 million in cash and cash equivalents, compared to $4.5 million as of December 31, 2023. The primary driver