SWK Holdings Provides Portfolio Update

Rhea-AI Summary

SWK Holdings (NASDAQ:SWKH) has provided a comprehensive portfolio update highlighting significant transactions from Q4 2024. The company made several new originations, including a $5.0M advance to Journey Medical, $0.6M to Biotricity (with 600,000 warrants), an $8.0M senior secured loan to Triple Ring Technologies, $2.5M to SKNV, a $25.7M facility expansion with Eton (with 289,736 warrants), and $2.5M to MedMinder.

On the repayments side, SWK received $4.1M from Exeevo's asset sale, $13.0M from Biolase's bankruptcy estate, $1.9M from Trio Healthcare, $4.2M from Veru's FC2 Female Condom sale, and $12.2M final payment from Moleculight. Additional payments are expected in 2025 from various sources, including Exeevo earn-outs and the Biolase estate.

Positive

• New loan originations totaling $44.3M across multiple companies
• Received significant repayments totaling $35.4M
• Acquired warrant positions in Biotricity and Eton
• Additional payments expected in 2025 from multiple sources

Negative

• Biolase bankruptcy involvement indicates a troubled investment
• Several early repayments might impact future interest income

Insights

Financial Analyst

This portfolio update reveals substantial activity in SWK Holdings' lending operations, with $44.3M in new originations and $35.4M in repayments. The new deals showcase strategic diversification across healthcare and technology sectors, with Triple Ring Technologies representing an expansion into sustainable agriculture and environmental tech. The $25.7M Eton facility expansion is particularly noteworthy, demonstrating confidence in existing relationships and potential upside through warrant coverage.

The repayment activity signals strong portfolio management, with successful exits from troubled positions like Biolase and strategic asset sales from Exeevo and Veru. The Moleculight repayment of $12.2M, while removing a performing asset, maintains potential upside through preferred equity holdings. The warrant positions in Biotricity (600,000 at $0.50) and Eton (289,736 at $5.32) provide additional equity upside potential, effectively structuring deals with both current income and capital appreciation opportunities.

Portfolio Risk Analyst

The portfolio movements demonstrate effective risk management and value recovery strategies. The successful resolution of distressed situations (Biolase bankruptcy) and structured exits (Veru, Exeevo) highlight the company's ability to navigate complex workout scenarios. The earn-out structure in the Exeevo exit and retention of Moleculight preferred equity preserve upside potential while securing principal returns.

The new originations show a balanced approach to risk, with a mix of follow-on investments in existing relationships ($10.6M across Journey Medical, Biotricity, SKNV and MedMinder) and new relationship establishment ($8.0M with Triple Ring). The warrant coverage on new investments provides downside protection while maintaining upside exposure, particularly valuable in the current market environment where equity valuations may be compressed.

DALLAS, TX / ACCESSWIRE / January 6, 2025 / SWK Holdings Corporation (NASDAQ:SWKH) ("SWK" or the "Company"), a life science-focused specialty finance company catering to small- and mid-sized commercial-stage companies, provided today a portfolio update for material events occurring since September 30, 2024.

Originations

In November, SWK advanced $5.0M to existing borrower Journey Medical to help fund the company's launch of Emrosi^TM.

In November, as part of a broader amendment SWK advanced $0.6M to existing borrower Biotricity. On amendment closing, SWK received 600,000 warrants to purchase Biotricity stock at $0.50 per share.

In December, SWK closed an $8.0M senior secured term loan with Triple Ring Technologies, a leader in R&D and product co-development across the medtech, life sciences, sustainable agriculture, and environmental technology industries.

In December, SWK advanced $2.5M to existing SWK borrower SKNV.

In December, SWK closed a $25.7M expansion of its existing credit facility with Eton, which now totals $30.0M. On funding, SWK received 289,736 warrants to purchase Eton stock at $5.32 per share.

In December, SWK advanced $2.5M to existing SWK borrower MedMinder.

Repayments

In November, as a result of the sale of certain Exeevo assets to a third-party, SWK received a $3.4M net payment. In early January, SWK received an additional $0.7M net payment. SWK anticipates receiving a $0.5M payment during the first quarter of 2025 and is eligible for a three-year, annual earn-out based on the increase in gross profit.

In November, SWK received a $13.0M payment from the Biolase bankruptcy estate. SWK anticipates receiving an additional payment from the estate in the first half of 2025.

In December, SWK received a $1.9M payment from Trio Healthcare. SWK may receive an additional, small payment during 2025.

In December, SWK received a $4.2M payment from Veru triggered by the sale of the FC2 Female Condom® to a third-party. SWK has no remaining economics on the product.

In January, Moleculight made a final payment to SWK totaling $12.2M, fully satisfying its outstanding obligation. SWK continues to hold Moleculight preferred equity, which is carried at no value on SWK's balance sheet.

About SWK Holdings Corporation

SWK Holdings Corporation is a life science focused specialty finance company partnering with small- and mid-sized commercial-stage healthcare companies. SWK provides non-dilutive financing to fuel the development and commercialization of lifesaving and life-enhancing medical technologies and products. SWK's unique financing structures provide flexible financing solutions at an attractive cost of capital to create long-term value for all SWK stakeholders. SWK's solutions include structured debt, traditional royalty monetization, synthetic royalty transactions, and asset purchases typically ranging in size from $5.0 million to $25.0 million.

SWK also owns Enteris BioPharma, 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. Additional information on the life science finance market is available on the Company's website at www.swkhold.com.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements including words such as "believes," "expects," "anticipates," "intends," "estimates," "plan," "will," "may," "look forward," "intend," "guidance," "future" or similar expressions are forward-looking statements. Because these statements reflect SWK's current views, expectations and beliefs concerning future events, these forward-looking statements involve risks and uncertainties. Investors should note that many factors, as more fully described under the caption "Risk Factors" and elsewhere in SWK's Form 10-K, Form 10-Q and Form 8-K filings with the Securities and Exchange Commission and as otherwise enumerated herein, could affect the Company's future financial results and could cause actual results to differ materially from those expressed in such forward-looking statements. The forward-looking statements in this press release are qualified by these risk factors. These are factors that, individually or in the aggregate, could cause the Company's actual results to differ materially from expected and historical results. You should not place undue reliance on any forward-looking statements, which speak only as of the date they are made. We assume no obligation to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

For more information, please contact:

Investor Relations and Media
Ira M. Gostin
investorrelations@swkhold.com
775-391-0213

SOURCE: SWK Holdings Corp.

View the original press release on accesswire.com

FAQ

How much new funding did SWKH provide in Q4 2024?

SWKH provided $44.3M in new funding across six transactions, including a $25.7M expansion to Eton, $8.0M to Triple Ring Technologies, and multiple smaller advances to existing borrowers.

What repayments did SWKH receive in Q4 2024?

SWKH received multiple repayments totaling $35.4M, including $13.0M from Biolase, $4.1M from Exeevo, $1.9M from Trio Healthcare, $4.2M from Veru, and $12.2M from Moleculight.

What warrant positions did SWKH acquire in Q4 2024?

SWKH acquired 600,000 warrants in Biotricity at $0.50 per share and 289,736 warrants in Eton at $5.32 per share.

What additional payments does SWKH expect in 2025?

SWKH expects additional payments in 2025 including $0.5M from Exeevo, a payment from the Biolase estate, a small payment from Trio Healthcare, and potential three-year annual earn-outs from Exeevo.