Company: SWKH
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001628280-25-040420
Chunk: 79

Company: SWK Holdings Corp
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 79
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 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 June 30, 2025. 

17

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 EndedJune 30,Six Months EndedJune 30,2025202420252024Operating lease cost$110 $134 $218 $259 Variable lease cost16 17 26 32 Total lease cost$126 $151 $244 $291 Future minimum rent on the Company's operating leases was as follows as of June 30, 2025 (in thousands):Remainder of 2025$90 2026183 2027188 2028128 Total future lease payments$589 As of June 30, 2025, total future lease payments exclude $1.2 million of lease payments related to held for sale leases, of which $0.1 million are due in the remainder of 2025.Contingent ConsiderationDuring fiscal year 2019 the Company recorded contingent consideration related to the 2019 acquisition of MOD3 and sharing of certain milestone and royalties due to MOD3 pursuant to the License Agreement. Contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved, with changes in the estimated fair value recognized in earnings. During the three months ended June 30,