Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 27

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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ized cost basis and fair value. Deferred fees and costs related to finance receivables held for sale are deferred upon transfer to the held for sale category and are included in the carrying value of finance receivables held for sale on the consolidated balance sheets. The Company recognizes the full amount of deferred fees and costs at the time of sale as a component of the gain or loss on sale.On March 19, 2025, the Company entered into a definitive agreement with Soleus Capital (“Soleus”) for the sale of the majority of its finance receivables segment royalty portfolio for approximately $34.0 million in cash ("the Transaction"), which approximated the fair value of the finance receivables held for sale as of March 31, 2025. At that time, the amortized cost basis of the royalty portfolio was $37.7 million, inclusive of interest receivables of $2.3 million. As a result of the Transaction, the Company performed a lower-of-cost-or-market analysis in the aggregate resulting in a loss of $3.7 million which is included in the "Loss on revaluation of finance receivables" caption on the Company's unaudited condensed consolidated statements of income for the three months ended March 31, 2025. The transaction closed subsequent to March 31, 2025 on April 10, 2025. In conjunction with the closing, the Company's Board of Directors declared a special cash dividend of $4.00 per share, payable to all holders of record of the Company’s common stock as of April 24, 2025, with a payment date of May 8, 2025.During neither the three months ended March 31, 2025, there was not a strategic shift for the Company, and accordingly, the finance receivable segment does not meet the criteria to be classified as a discontinued operation. The following table shows the net income before taxes for finance receivables and related interest receivable held for sale (in thousands):Three Months Ended March 31,20252024Net income before taxes$2,022 $1,804 MOD3 Exclusive Option and Asset Purchase AgreementWith an effective date of January 1, 2024, the Company entered into an Option and Asset Purchase Agreement with a strategic partner on March 14, 2024, which granted the strategic partner an exclusive option to acquire certain of MOD3 assets related to its business of providing CDMO services to third parties, subject to