UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2023

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-39184

SWK Holdings Corporation

(Exact Name of Registrant as Specified in its Charter)

Delaware	77-0435679
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

5956 Sherry Lane, Suite 650
Dallas, TX	75225
(Address of Principal Executive Offices)	(Zip Code)

(Registrant’s Telephone Number, Including Area Code): (972) 687-7250

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	SWKH	The Nasdaq Stock Market LLC
9.00% Senior Notes due 2027	SWKHL	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x YES o NO

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x YES o NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large Accelerated Filer o	Accelerated Filer o	Non-Accelerated Filer x	Smaller Reporting Company x	Emerging Growth Company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES x NO

As of November 3, 2023, there were 12,503,113 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.

SWK Holdings Corporation

Form 10-Q

Quarter Ended September 30, 2023

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	1

	Unaudited Condensed Consolidated Balance Sheets—September 30, 2023 and December 31, 2022	1

	Unaudited Condensed Consolidated Statements of Income—Three and Nine Months Ended September 30, 2023 and 2022	2

	Unaudited Condensed Consolidated Statements of Stockholders’ Equity—Three and Nine Months Ended September 30, 2023 and 2022	3

	Unaudited Condensed Consolidated Statements of Cash Flows—Nine Months Ended September 30, 2023 and 2022	4

	Notes to the Unaudited Condensed Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4	Controls and Procedures	31

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 3.	Defaults Upon Senior Securities	32

Item 4.	Mine Safety Disclosures	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

	Signatures	34

FORWARD-LOOKING STATEMENTS

In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public. Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections about our business and industry, and our beliefs and assumptions, and include, but are not limited to, statements under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Words such as “anticipate,” “believe,” “could,” “estimate,” “expects,” “intend,” “may,” “plan,” “should,” “will” and variations of these words and similar expressions identify forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are difficult to predict and could cause actual results to differ materially (both favorably and unfavorably) from those expressed or forecasted in the forward-looking statements.

These risks and uncertainties include, but are not limited to, those described in Item 1A, “Risk Factors,” and elsewhere in this report. Forward-looking statements that were believed to be true at the time made may ultimately prove to be incorrect or false. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SWK HOLDINGS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value and share data)

	September 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	31,034		$	6,156
Interest and accounts receivable, net		4,411			3,094
Other current assets		1,756			1,114
Total current assets		37,201			10,364

Finance receivables, net of allowance for credit losses of $11,327 and $11,846, as of September 30, 2023 and December 31, 2022, respectively		223,604			236,555
Collateral on foreign currency forward contract		2,750			2,750
Marketable investments		50			76
Deferred tax assets, net		26,090			24,480
Warrant assets		1,297			1,220
Intangible assets, net		6,913			8,190
Goodwill		8,404			8,404
Property and equipment, net		5,479			5,840
Other non-current assets		4,057			1,742
Total assets	$	315,845		$	299,621

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	2,768		$	3,902
Revolving credit facility		22,000			2,445
Total current liabilities		24,768			6,347

Contingent consideration payable		11,200			11,200
Other non-current liabilities		2,312			2,145
Total liabilities		38,280			19,692

Commitments and contingencies (Note 6)

Stockholders’ equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.001 par value; 250,000,000 shares authorized; 12,510,776 and 12,843,157 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		12			12
Additional paid-in capital		4,425,198			4,430,922
Accumulated deficit		(4,147,645	)		(4,151,005	)
Total stockholders’ equity		277,565			279,929
Total liabilities and stockholders’ equity	$	315,845		$	299,621

See accompanying notes to the unaudited condensed consolidated financial statements.

SWK HOLDINGS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share data)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2023			2022		2023			2022
Revenues:
Finance receivable interest income, including fees	$	8,608		$	8,502	$	27,146		$	25,745
Pharmaceutical development		315			5,111		616			5,461
Other		39			1		108			481
Total revenues		8,962			13,614		27,870			31,687
Costs and expenses:
Provision for (benefit from) credit losses		223			—		(459	)		—
Interest expense		176			82		721			242
Pharmaceutical manufacturing, research and development expense		606			1,792		2,834			5,173
Depreciation and amortization expense		652			634		1,937			1,964
General and administrative expense		2,979			4,349		8,516			10,527
Income from operations		4,326			6,757		14,321			13,781
Other income (expense), net:
Unrealized net (loss) gain on warrants		(162	)		1,788		(745	)		623
Unrealized net gain (loss) on equity securities		—			13		—			(534	)
(Loss) gain on foreign currency transactions		(76	)		—		426			—
Income before income tax (benefit) expense		4,088			8,558		14,002			13,870
Income tax (benefit) expense		(386	)		1,942		959			3,211
Net income	$	4,474		$	6,616	$	13,043		$	10,659

Net income per share:
Basic	$	0.36		$	0.52	$	1.03		$	0.83
Diluted	$	0.36		$	0.51	$	1.02		$	0.83
Weighted average shares outstanding:
Basic		12,539			12,832		12,703			12,832
Diluted		12,582			12,851		12,746			12,871

See accompanying notes to the unaudited condensed consolidated financial statements.

SWK HOLDINGS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)


	Nine Months Ended September 30, 2023
												Total
	Common Stock					Additional			Accumulated			Stockholders’
	Shares			Amount		Paid-In Capital			Deficit			Equity
Balances at December 31, 2022		12,843,157		$	12	$	4,430,922		$	(4,151,005	)	$	279,929
Stock-based compensation		—			—		35			—			35
Effect of adoption of ASU 2016-13		—			—		—			(9,683	)		(9,683	)
Issuance of common stock upon vesting of restricted stock		16,008			—		—			—			—
Repurchase of common stock in open market		(28,766	)		—		(531	)		—			(531	)
Net income		—			—		—			4,635			4,635
Balances at March 31, 2023		12,830,399			12		4,430,426			(4,156,053	)		274,385
Stock-based compensation		—			—		164			—			164
Issuance of common stock upon vesting of restricted stock		8,612			—		—			—			—
Repurchase of common stock in open market		(272,492	)		—		(4,599	)		—			(4,599	)
Net income		—			—		—			3,934			3,934
Balances at June 30, 2023		12,566,519			12		4,425,991			(4,152,119	)		273,884
Stock-based compensation		—			—		170			—			170
Issuance of common stock upon vesting of restricted stock		4,592			—		—			—			—
Repurchase of common stock in open market		(60,335	)		—		(963	)		—			(963	)
Net income		—			—		—			4,474			4,474
Balances at September 30, 2023		12,510,776		$	12	$	4,425,198		$	(4,147,645	)	$	277,565

	Nine Months Ended September 30, 2022
												Total
	Common Stock					Additional			Accumulated			Stockholders’
	Shares			Amount		Paid-In Capital			Deficit			Equity
Balances at December 31, 2021		12,836,133		$	13	$	4,431,719		$	(4,164,496	)	$	267,236
Stock-based compensation		—			—		85			—			85
Issuance of common stock upon vesting of restricted stock		5,495			—		—			—			—
Forfeiture of unvested restricted stock		(6,815	)		—		—			—			—
Net income		—			—		—			3,478			3,478
Balances at March 31, 2022		12,834,813			13		4,431,804			(4,161,018	)		270,799
Stock-based compensation		—			—		166			—			166
Issuance of common stock upon vesting of restricted stock		4,305			—		—			—			—
Net income		—			—		—			565			565
Balances at June 30, 2022		12,839,118			13		4,431,970			(4,160,453	)		271,530
Stock-based compensation		—			—		59			—			59
Issuance of common stock upon vesting of restricted stock		7,575			—		—			—			—
Net settlement for employee taxes on restricted stock and options		—			—		(160	)		—			(160	)
Stock options exercised, net		23,074			—		—			—			—
Repurchases of common stock in open market		(34,463	)		—		(599	)		—			(599	)
Net income		—			—		—			6,616			6,616
Balances at September 30, 2022		12,835,304		$	13	$	4,431,270		$	(4,153,837	)	$	277,446

See accompanying notes to the unaudited condensed consolidated financial statements.

SWK HOLDINGS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	Nine Months Ended September 30,
	2023			2022
Cash flows from operating activities:
Net income	$	13,043		$	10,659
Adjustments to reconcile net income to net cash provided by operating activities:
Benefit from credit losses		(459	)		—
Right-of-use asset amortization		244			171
Amortization of debt issuance costs		243			26
Deferred income taxes		915			3,189
Change in fair value of warrants		745			(623	)
Change in fair value of equity securities		—			534
Foreign currency transaction gain		(375	)		—
Loan discount and fee accretion		(2,959	)		(1,357	)
Interest paid-in-kind		(1,826	)		(3,335	)
Stock-based compensation		369			310
Depreciation and amortization expense		1,937			1,964
Changes in operating assets and liabilities:
Interest and accounts receivable		(1,317	)		(5,581	)
Other assets		(738	)		(76	)
Accounts payable and other liabilities		(635	)		(603	)
Net cash provided by operating activities		9,187			5,278

Cash flows from investing activities:
Proceeds from sale of investments		13,942			—
Investment in finance receivables		(17,525	)		(71,750	)
Repayment of finance receivables		7,430			43,938
Corporate debt securities principal payments		26			31
Purchases of property and equipment		(299	)		(194	)
Net cash provided by (used in) investing activities		3,574			(27,975	)

Cash flows from financing activities:
Payments for financing costs		(1,345	)		—
Proceeds from (payments on) credit facilities		19,555			(8	)
Net settlement for employee taxes on restricted stock and options		—			(160	)
Repurchases of common stock, including fees and expenses		(6,093	)		(599	)
Net cash provided by (used in) financing activities		12,117			(767	)

Net increase (decrease) in cash and cash equivalents		24,878			(23,464	)
Cash and cash equivalents at beginning of period		6,156			42,863
Cash and cash equivalents at end of period	$	31,034		$	19,399

See accompanying notes to the unaudited condensed consolidated financial statements.

SWK HOLDINGS CORPORATION

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. SWK Holdings Corporation and Summary of Significant Accounting Policies

Nature of Operations

SWK Holdings Corporation (the “Company”) was incorporated in July 1996 in California and reincorporated in Delaware in September 1999. In July 2012, the Company commenced its strategy of building a specialty finance and asset management business. In August 2019, the Company commenced a complementary strategy of building a pharmaceutical development, manufacturing and intellectual property licensing business. The Company’s operations comprise two reportable segments: “Finance Receivables” and “Pharmaceutical Development.” The Company allocates capital to each segment in order to generate income through the sales of life science products by third parties. The Company is headquartered in Dallas, Texas, and as of September 30, 2023, the Company had 23 full-time employees.

The Company has net operating loss carryforwards (“NOLs”) and believes that the ability to utilize these NOLs is an important and substantial asset. However, at this time, under current law, the Company does not anticipate that the Finance Receivables and/or Pharmaceutical Development segments will generate sufficient income to permit the Company to utilize all of its NOLs prior to their respective expiration dates. As such, it is possible that the Company might pursue additional strategies that it believes might result in the ability to utilize more of the NOLs.

As of November 3, 2023, the Company and its partners have executed transactions with 53 different parties under its specialty finance strategy, funding an aggregate of $756.7 million in various financial products across the life science sector. The Company’s portfolio includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in the life science sector, and purchased royalties generated by sales of life science products and related intellectual property.

During 2019, the Company commenced its Pharmaceutical Development segment with the acquisition of Enteris BioPharma, Inc. (“Enteris”). Enteris is a clinical development and manufacturing organization providing development services to pharmaceutical partners as well as innovative formulation solutions built around its proprietary oral drug delivery technologies, the Peptelligence® platform.

Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The consolidated financial statements include the accounts of all subsidiaries and affiliates in which the Company holds a controlling financial interest as of the financial statement date. Normally a controlling financial interest reflects ownership of a majority of the voting interests. The Company consolidates a variable interest entity (“VIE”) when it possesses both the power to direct the activities of the VIE that most significantly impact its economic performance and the Company is either obligated to absorb the losses that could potentially be significant to the VIE or the Company holds the right to receive benefits from the VIE that could potentially be significant to the VIE, after elimination of intercompany accounts and transactions.

The Company owns interests in various partnerships and limited liability companies, or LLCs. The Company consolidates its investments in these partnerships or LLCs where the Company, as the general partner or managing member, exercises effective control, even though the Company’s ownership may be less than 50 percent, the related governing agreements provide the Company with broad powers, and the other parties do not participate in the management of the entities and do not effectively have the ability to remove the Company. The Company has reviewed each of the underlying agreements to determine if it has effective control. If circumstances change and it is determined this control does not exist, any such investment would be recorded using the equity method of accounting. Although this would change individual line items within the Company’s consolidated financial statements, it would have no effect on its operations and/or total stockholders’ equity attributable to the Company.

Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements have been prepared by the Company and reflect all normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2023. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted under the rules and regulations of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 31, 2023.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions are required in the determination of revenue recognition; stock-based compensation; valuation of interest and accounts receivable; impairment of finance receivables; allowance for credit losses; long-lived assets; property and equipment; intangible assets; goodwill; valuation of warrants and other investments; contingent consideration; income taxes; and contingencies and litigation, among others. Some of these judgments can be subjective and complex, and consequently, actual results may differ from these estimates. The Company’s estimates often are based on complex judgments, probabilities and assumptions that it believes to be reasonable but that are inherently uncertain and unpredictable. For any given individual estimate or assumption made by the Company, there may also be other estimates or assumptions that are reasonable.

The Company regularly evaluates its estimates and assumptions using historical experience and other factors, including the economic environment. As future events and their effects cannot be determined with precision, the Company’s estimates and assumptions may prove to be incomplete or inaccurate, or unanticipated events and circumstances may occur that might cause changes to those estimates and assumptions. Market conditions, such as illiquid credit markets, health crises such as the COVID-19 global pandemic, volatile equity markets, and economic downturns, can increase the uncertainty already inherent in the Company’s estimates and assumptions. The Company adjusts its estimates and assumptions when facts and circumstances indicate the need for change. Those changes generally will be reflected in our consolidated financial statements on a prospective basis unless they are required to be treated retrospectively under the relevant accounting standard. It is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts.

Segment Information

The Company earns revenues from its two U.S.-based business segments: its specialty finance and asset management business offering customized financing solutions to a broad range of life-sciences companies, and its business offering clinical development and manufacturing services as well as oral therapeutic formulation solutions built around Enteris’ pharmaceutical Peptelligence® platform, which enables the oral delivery of molecules that are typically injected, including peptides and BCS Class II, III, and IV small molecules in an enteric-coated tablet formulation.

Revenue Recognition

The Company’s Pharmaceutical Development segment enters into collaboration and licensing agreements with strategic partners, under which it may exclusively license rights to research, develop, manufacture and commercialize its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products.

Deferred revenue includes amounts that have been billed per the contractual terms but have not been recognized as revenue. The Company classifies as current the portion of deferred revenue that is expected to be recognized within one year from the balance sheet date and is included in accounts payable and accrued liabilities in the unaudited condensed consolidated balance sheets.

Reclassification

Certain prior year amounts have been reclassified to conform to current year presentation and have no impact on previously reported total assets and total liabilities, total stockholders’ equity or net income.

Research and Development

Research and development expenses include the costs associated with internal research and development and research and development conducted for the Company by third parties. These costs primarily consist of salaries, pre-clinical and clinical trials, outside consultants, and supplies. All research and development costs discussed above are expensed as incurred. Third-party expenses reimbursed under research and development contracts, which are not refundable, are recorded as a reduction to pharmaceutical manufacturing research and development expense in the consolidated statements of income.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848),” which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. ASU 2020-04 provides optional expedients and exceptions for applying GAAP to transactions affected by reference rate reform if certain criteria are met. These transactions include: (i) contract modifications, (ii) hedging relationships, and (iii) sales or transfers of debt securities classified as held-to-maturity. ASU 2020-04 was effective upon issuance, and the provisions generally can be applied prospectively as of January 1, 2020 through December 31, 2024. The Company has identified existing loans that reference London Interbank Offered Rate (“LIBOR”) and is in the process of evaluating alternatives in each situation. The Company expects that it will elect to apply some of the expedients and exceptions provided in ASU 2020-04 and does not believe the adoption of this standard will have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2016-13, “Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”),” as amended, on January 1, 2023 using the modified retrospective approach method. ASU 2016-13 replaced the incurred loss impairment methodology with a methodology that reflects a current expected credit loss (“CECL”). ASU 2016-13 impacted all of the Company’s investments held at amortized cost. At December 31, 2022, the Company’s allowance for credit losses of $11.8 million was the accumulation of allowance for credit losses (“ACL”) applied to specific finance receivables, representing management’s prior estimates of potential future losses on such finance receivables. As part of the Company’s adoption of ASU 2016-13, management reviewed its prior estimates of finance receivable-specific ACL and chose to apply the full $11.8 million ACL under legacy GAAP to the finance receivables such allowance applied. Under the new CECL model, the net GAAP balances of such finance receivables are presented net of previously reported ACL and are included in the Company’s estimated ACL for its Royalty Purchases portfolio segment.

Upon adoption of ASC 2016-13 on January 1, 2023, the Company’s transition adjustment included $11.8 million of ACL on finance receivables, which is presented as a reduction to finance receivables, and a $0.4 million ACL on unfunded loan commitments, which is recorded within other non-current liabilities. The Company recorded a net decrease of $9.7 million to accumulated deficit as of January 1, 2023 for the cumulative effect of adopting ASU 2016-13, which reflects the transition adjustments noted above, net of the applicable deferred tax assets of $2.5 million. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2016-13, while prior period amounts continue to be reported in accordance with previously applicable accounting standards. The Company elected not to measure an allowance for credit losses for accrued interest receivable and instead elected to reverse interest income on finance receivables when placed on nonaccrual status, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest. Please refer to Note 3 for more information on how the Company determines its allowance for credit losses on finance receivables.

In March 2022, the FASB issued ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures,” which removes the accounting guidance for Troubled Debt Restructurings (“TDR”) and requires entities to evaluate whether a modification provided to a borrower results in a new loan or continuation of an existing loan. The amendment enhances existing disclosures and requires new disclosures for receivables when there has been a modification in contractual cash flows due to a borrower experiencing financial difficulties. Additionally, the amendments require public business entities to disclose gross charge-off information by year of origination in the vintage disclosures. The Company adopted ASU 2022-02 on January 1, 2023 and incorporated the required disclosures into Note 3, Finance Receivables, Net.

Note 2. Net Income per Share

Basic net income per share is computed using the weighted-average number of outstanding shares of common stock during the applicable period. Diluted net income per share is computed using the weighted-average number of outstanding shares of common stock during the applicable period, and when dilutive, shares of common stock issuable upon exercise of options and warrants deemed outstanding using the treasury stock method.

The following table shows the computation of basic and diluted net income per share for the following periods (in thousands, except per share amounts):

Three Months Ended
September 30,

Nine Months Ended
September 30,

2023

SEC Form 10-Q filed by SWK Holdings Corporation