Company: SWKH
Filing Date: 2025-03-20
Form Type: 10-K
Source: 0001628280-25-013989
Chunk: 118

Company: SWK Holdings Corp
Filing Date: 2025-03-20
Form: 10-K
Item: Item 1B
Chunk 118
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 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 it was more likely than not that the Company would not be able to realize the full benefit of the U.S. federal and state deferred tax assets in the future. However, at December 31, 2024 the Company has concluded that it is more likely than not that the Company will be able to realize approximately $23.5 million benefit of the U.S. federal and state deferred tax assets in the future.The Company will continue to assess the need for a valuation allowance on the deferred tax assets by evaluating both positive and negative evidence that may exist on a quarterly basis. Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated statements of income for the period that the adjustment is determined to be required. There was no  valuation allowance against deferred tax assets as of December 31, 2024 and 2023, respectively.Deferred tax assets consist of the following (in thousands):December 31,20242023Deferred tax assets:Credit carryforward$2,899 $2,973 Provision for credit losses2,433 2,967 Stock-based compensation230 153 Other2,999 2,438 Net operating losses13,682 19,891 Gross deferred tax assets$22,243 $28,422 Deferred tax liabilities:Intangible