There was no provision for credit losses during the six months ended June 30, 2014, and no allowance for credit losses outstanding as of December 31, 2014.

The following table presents our nonaccrual and performing loans by portfolio segment (in thousands):

 As of June 30, 2015, the Company had two term loans in non-accrual status with a carry value of approximately $17,231,000. As of December 31, 2014, the Company had one loan in non-accrual loan at March 31,status with a carry value of $5,969,000. Total cash collected on non-accrual loans for the six months ended June 30, 2015 for approximately $6,650,000. The Company measured the loan for impairment as of March 31, 2015, by comparing the outstanding loan balancewas $184,500, which was credited to the fair market value ofrespective loans’ carry value. Of the two non-accrual term loans at June 30, 2015, one was identified as impaired. The collateral and determineddependent loan was individually reviewed, noting that the fair market value of the collateral exceededloan, less costs to sell, was lower than the outstanding balance.recorded investment of the loan. As a result,such, the Company recorded a provision for credit loss of $2,594,000. There were no loans considered impaired where a provision for credit loss was not required to record any impairment charge on this loancharged as of MarchDecember 31, 2015. As of March 31, 2014, the Company did not have any non-performing assets.2014.

Note 4. Marketable Investments

Investment in securities at March 31,June 30, 2015, and December 31, 2014, consist of the following (in thousands):

The amortized cost basis amounts,amount, gross unrealized holding gains (losses) and fair value of the available-for-sale security as of June 30, 2015 are as follows (in thousands):

The amortized cost basis amount, gross unrealized holding lossesgains (losses) and fair valuesvalue of the available-for-sale securitiessecurity as of March 31, 2015, and December 31, 2014 are as follows (in thousands):

During the threesix months ended March 31,June 30, 2015, and the year ended December 31, 2014, the Company had no sales of available-for-sale securities and no securities have been considered impaired.

Note 5. Variable Interest Entities

The Company consolidates the activities of VIEs of which we are the primary beneficiary. The primary beneficiary of a VIE is the variable interest holder possessing a controlling financial interest through (i) its power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) its obligation to absorb losses or its right to receive benefits from the VIE that could potentially be significant to the VIE. In order to determine whether the Company owns a variable interest in a VIE, the Company performs qualitative analysis of the entity’s design, organizational structure, primary decision makers and relevant agreements.

Consolidated VIE

SWK HP Holdings LP (“SWK HP”) 

SWK HP was formed in December 2012 to acquire a limited partnership interest in Holmdel Pharmaceuticals LP (“Holmdel”).   Holmdel acquired the U.S. marketing authorization rights to a beta blocker pharmaceutical product indicated for the treatment of hypertension for a total purchase price of $13,000,000. The Company, through its wholly owned subsidiary SWK Holdings GP LLC (“SWK Holdings GP”) acquired a direct general partnership interest in SWK HP, which in turn acquired a limited partnership interest in Holmdel. The total investment in SWK HP of $13,000,000 included $6,000,000 provided by SWK Holdings GP and $7,000,000 provided by non-controlling interests.   Subject to customary limited partner protections afforded the investors by the terms of the limited partnership agreement, the Company maintains voting and managerial control of SWK HP and therefore includes it in its consolidated financial statements.

SWK HP is considered a VIE due to the lack of voting or similar decision-making rights by its equity holders regarding activities that have a significant effect on the economic success of the partnership. The Company’s ownership in SWK HP constitutes variable interests. The Company has determined that it is the primary beneficiary of the SWK HP as (i) the Company has the power to direct the activities that most significantly impact the economic performance of SWK HP via its obligations to perform under the partnership agreement, and (ii) the Company has the right to receive residual returns that could potentially be significant to SWK HP. As a result, the Company consolidates SWK HP in its financial statements and the limited partner interests of SWK HP owned by third parties are reflected as a non-controlling interest in the Company’s unaudited condensed consolidated balance sheets.

Unconsolidated VIEs

Holmdel  

SWK HP has significant influence over the decisions made by Holmdel. SWK HP will receive quarterly distributions of cash flow generated by the pharmaceutical product according to a tiered scale that is subject to certain cash on cash returns received by SWK HP. Until SWK HP received a 1x cash on cash return on its interest in Holmdel, which occurred in February 2015, SWK HP received approximately 84% of the pharmaceutical product’s cash flow. As the cash on cash multiple received by SWK HP Holdings LP increases, SWK HP’s interest in the cash flow generated by the pharmaceutical product decreases, but in no instance will it decline below 39%. The current interest in the pharmaceutical product’s cash flow is approximately 70%. Holmdel is considered a VIE because SWK HP’s control over the partnership is disproportionate to its economic interest. This VIE remains unconsolidated as the power to direct the activities of the partnership is not held by the Company. The Company is using the equity method to account for this investment.   SWK HP’s current ownership in Holmdel approximates 70%.  The Company accounts for its interest in the entity based on the timing of quarterly distributions, which are paid on a quarter lag basis. For the three and six months ended March 31,June 30, 2015, and 2014, the Company recognized $1,551,000$1,339,000 and $1,503,000, respectively,$2,890,000 of equity method gains.gains, respectively. The amount of equity method gains attributable to the non-controlling interests in SWK HP were $811,000$678,000 and $801,000$1,489,000 for the three and six months ended March 31,June 30, 2015, respectively. For the three and six months ended June 30, 2014, the Company recognized $1,192,000 and $2,695,000 of equity method gains, respectively. The amount of equity method gains attributable to the non-controlling interests in SWK HP were $633,000 and $1,434,000 for the three and six months ended June 30, 2014, respectively.

In addition, SWK HP received cash distributions totaling $1,855,000$3,444,000 during the threesix months ended March 31,June 30, 2015, of which $974,000$1,787,000 was subsequently paid to holders of the non-controlling interests in SWK HP. Changes in the carrying amount of the Company’s investment in Holmdel for the threesix months ended March 31,June 30, 2015, are as follows (in thousands):  

The following table provides the financial statement information related to Holmdel for the comparative periods which SWK HP has reflected its share of Holmdel income in the Company’s unaudited condensed consolidated statements of income:income (loss):

Note 6. Loan Credit Agreement with Related Party

OnSeptember6,2013, theCompanyenteredintoacreditfacilitywith Double Black Diamond, L.P. (the “Lender”),anaffiliateof,CarlsonCapital,L.P.(“Carlson”). Funds affiliated with Carlson(collectively,the“Stockholder”) are holders of a majority of the Company’s common stock.ThecreditfacilityprovidesfinancingfortheCompany,stock.ThecreditfacilityprovidedfinancingfortheCompany,primarilyforthepurchaseof eligible investments. The facility matures on September 6, 2017, and provides that2017. The draw period under the loan shall accrue interest at the LIBORrate plusa6.50%margin.Theprincipalisrepayableinfullatmaturity.Thefacilityworksasadelayeddrawcreditfacilitywiththe Company having the ability to drawdown, as necessary, over the first 18 months (the “Draw Period”) up to $30,000,000, basedon certainconditions.Thecreditfacilityprovidedforaninitial$15,000,000tobeavailableatclosing. The Draw Periodfacility expired on March 6, 2015, and as a result, as of March 31,June 30, 2015, the Company has no availability remaining on the facility. TheLenderhasreceivedTheLenderhas received asecurityinterestinbasicallyallassetsoftheCompanyascollateralforthefacility.Inconjunctionwiththecreditfacility,the CompanyissuedwarrantstotheLender for1,000,000shares oftheCompany’scommonstockata strike priceof$1.3875.The warrants have a price dilution mechanism that was triggered by the price that shares were sold in the Rights Offering in November 2014, and as a result, the strike price of the warrants was reduced to $1.348. In connection with the credit agreement, the Company, the Lender,the Stockholder and certain of the Stockholder’s affiliates, entered into a Voting Rights Agreement restricting the Stockholder’s and such affiliates’ voting rights under certain circumstances and providing the Stockholder andsuch affiliatesarightoffirstofferoncertainfutureshareissuances, which Voting Rights Agreement was terminated on August 18, 2014, in connection with the sale of shares of common stock to the Stockholder.

Due to certain provisions within the warrant agreement, the warrants meet the definition of a derivative and do not qualify for a scope exception as it is not considered indexed in the Company’s stock. As such, the warrants with a value of $586,000$616,000 and $421,000 at March 31,June 30, 2015, and December 31, 2014, respectively, are reflected as a warrant liability in the unaudited condensed consolidated balance sheets. An unrealized lossUnrealized losses of $165,000$30,000 and an unrealized gain of $42,000$195,000 were included in interestother income (expense) in the unaudited condensed consolidated statements of income (loss) for the three and six months ended June 30, 2015, respectively. Unrealized losses of $66,000 and $24,000 were included in other income (expense) in the unaudited condensed consolidated statements of income for the three and six months ended March 31, 2015, andJune 30, 2014, respectively. The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions:

During the three and six months ended March 31,June 30, 2015, the Company recognized interest expense totaling $0 and $381,000, respectively, consisting of debt issuance cost amortization. During the three and six months ended March 31,June 30, 2014, the Company recognized interest expense totaling $189,000, which$223,000 and $412,000, respectively. Interest expense included $153,000 interest due the lender$36,000 and $36,000$71,000 of debt issuance cost amortization.amortization for the three and six months ended June 30, 2014, respectively. 

Note 7. Stockholders’ Equity

Stock Compensation Plans

The Company’s 1999 Stock Incentive Plan (the “1999 Stock Incentive Plan”), as successor to the 1997 Stock Option Plan (the “1997 Stock Option Plan”), provided for options to purchase shares of the Company’s common stock to be granted to employees, independent contractors, officers, and directors. The plan expired in July 2009. As a result of the termination of all employees on December 31, 2009, the stock options held by employees were cancelled on March 31, 2010.  The only remaining options outstanding as of March 31, 2014, under the 1999 Stock Incentive Plan are those held by some of the Company’s current directors.

The Company’s 2010 Stock Incentive Plan (the “2010 Stock Incentive Plan”) provides for options, restricted stock, and other customary forms of equity to be granted to the Company’s directors, officers, employees, and independent contractors. All forms of equity incentive compensation are granted at the discretion of the Company’s Board of Directors (the “Board”) and have a term not greater than 10 years from the date of grant.

There were no options exercised in the three months ended March 31, 2015 or 2014.

The following table summarizes activities under option plans for the indicated periods:

At March 31, 2015, there were no options available for grant under the 1999 Stock Incentive Plan, and the Company had no total unrecognized stock-based compensation expense under this Plan.  At March 31, 2015, there were 2.7 million shares reserved for equity awards under the 2010 Stock Incentive Plan and the Company had approximately $0.6 million of total unrecognized stock option expense, net of estimated forfeitures, which will be recognized over the weighted average remaining period of 2 years. 

The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2015:

Employee stock-based compensation expense recognized for time-vesting options for the three months ended March 31, 2015, and 2014, uses the Black-Scholes option pricing model for estimating the fair value of options granted under the Company’s equity incentive plans. Risk-free interest rates for the options were taken from the Daily Federal Yield Curve Rates on the grant dates for the expected life of the options as published by the Federal Reserve. The expected volatility was based upon historical data and other relevant factors such as the Company’s changes in historical volatility and its capital structure, in addition to mean reversion. Employee stock-based compensation expense recognized for market performance-vesting options uses a binomial lattice model for estimating the fair value of options granted under the Company’s equity incentive plans.

In calculating the expected life of stock options, the Company determines the amount of time from grant date to exercise date for exercised options and adjusts this number for the expected time to exercise for unexercised options. The expected time to exercise for unexercised options is calculated from grant as the midpoint between the expiration date of the option and the later of the measurement date or the vesting date. In developing the expected life assumption, all amounts of time are weighted by the number of underlying options.

The following table summarizes restricted stock activities under the equity incentive plans for the indicated periods:

For restricted stock granted in 2014 and 2013 under the 2010 Stock Incentive Plan, the Company recognizes compensation expense in accordance with the fair value of such stock as determined on the grant date, amortized over the applicable derived service period using the graded amortization method. The fair value and derived service period of awards with market performance vesting was calculated using a lattice model and included adjustments to the fair value of the Company’s common stock resulting from the vesting conditions being based on the underlying stock price. Restricted shares of 1,125,000 are included in the Company’s shares outstanding as of March 31, 2015, but are not included in the computation of basic income per share as the shares are not yet earned by the recipients. The Company had no unrecognized stock based compensation expense, net of estimated forfeitures, related to restricted shares as of March 31, 2015.

During the threesix months ending March 31,June 30, 2015, the Board approved the following grants as compensation for Board services: (i) a grant of 33,660 shares of common stock as the pro-rated director compensation for the non-employee directors appointed on September 6, 2014; (ii) a grant 10,00020,000 shares to each non-employee directors for services as a director for the period January 1, 2015 to March 31,June 30, 2015; and (iii) a grant of 32,595 shares of common stock in lieu of cash payments to the non-employee directors upon the voluntary election of such directors. The Company recorded approximately $107,000 in board compensation expense relating to the quarterly grant,grants of approximately $68,000 and $107,000, respectively, during the three and six months ended June 30, 2015.

The stock-based compensation expense recognized by the Company for the three months ended March 31, 2015, and 2014was $90,000 and $76,000,respectively.

Non-controlling Interests

As discussed in Note 5, SWK HP has a limited partnership interest in Holmdel. Changes in the carrying amount of the non-controlling interest in the unaudited condensed consolidated balance sheet for the threesix months ended March 31,June 30, 2015, are as follows (in thousands):follows:  

Note 8. Fair Value Measurements

The Company measures and reports certain financial and non-financial assets and liabilities on a fair value basis. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). GAAP specifies a three-level hierarchy that is used when measuring and disclosing fair value. The fair value hierarchy gives the highest priority to quoted prices available in active markets (i.e., observable inputs) and the lowest priority to data lacking transparency (i.e., unobservable inputs). An instrument’s categorization within the fair value hierarchy is based on the lowest level of significant input to its valuation. The following is a description of the three hierarchy levels.

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any levels during the threesix months ended March 31,June 30, 2015 and 2014.

The fair value of equity method investments is not readily available nor have we estimated the fair value of these investments and disclosure is not required. The Company is not aware of any identified events or changes in circumstances that would have a significant adverse effect on the carrying value of any of our equity method investments included in ourtheir unaudited condensed consolidated balance sheets at March 31,June 30, 2015 or December 31, 2014.

Following are descriptions of the valuation methodologies used to measure material assets and liabilities at fair value and details of the valuation models, key inputs to those models and significant assumptions utilized.

Finance Receivables

The fair values of finance receivables are estimated using discounted cash flow analyses, using market rates at the balance sheet date that reflect the credit and interest rate-risk inherent in the finance receivables. Projected future cash flows are calculated based upon contractual maturity or call dates, projected repayments and prepayments of principal. These receivables are classified as Level 3. Finance receivables are not measured at fair value on a recurring basis, but estimates of fair value are reflected below.

Marketable Investments and WarrantsWarrant Liability 

Marketable InvestmentsDebt securities 

If active market prices are available, fair value measurement is based on quoted active market prices and, accordingly, these securities would be classified as Level 1. If active market prices are not available, fair value measurement is based on observable inputs other than quoted prices included within Level 1, such as prices for similar assets or broker quotes utilizing observable inputs, and accordingly these securities would be classified as Level 2. If market prices are not available and there are no observable inputs, then fair value would be estimated by using valuation models including discounted cash flow methodologies, commonly used option-pricing models and broker quotes. Such securities would be classified as Level 3, if the valuation models and broker quotes are based on inputs that are unobservable in the market. If fair value is based on broker quotes, the Company checks the validity of received prices based on comparison to prices of other similar assets and market data such as relevant bench mark indices. Available-for-sale securities are measured at fair value on a recurring basis, while securities with no readily available fair market value are not, but estimates of fair value are reflected below.

Derivative securities

For exchange-traded derivatives, fair value is based on quoted market prices, and accordingly, would be classified as Level 1. For non-exchange traded derivatives, fair value is based on option pricing models and are classified as Level 3.

The following table presents financial assets and liabilities measured at fair value on a recurring basis as of March 31,June 30, 2015 (in thousands):

The following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2014 (in thousands):

The changes on the value of the warrant assets during the threesix months ended March 31,June 30, 2015, were as follows (in thousands):

During the six months ended June 30, 2015, the Company wrote-off the entire value of the warrants associated with Response Genetics, Inc. (“Response”). Refer to Note 10, Subsequent Events for further information.  

The Company holds warrants issued to the Company in conjunction with certain term loan investments. These warrants meet the definition of a derivative and are included in the unaudited condensed consolidated balance sheets. The fair values for warrants outstanding, that have a readily determinable value, are measured using the Black-Scholes option pricing model. The following weighted average assumptions were used in the models to determine fair value:

The changes on the value of the warrant liability during the threesix months ended March 31,June 30, 2015, were as follows (in thousands):

For assets and liabilities measured on a non-recurring basis during the year, accounting guidance requires quantitative disclosures about the fair value measurements separately for each major category. There were no remeasured assets or liabilities at fair value on a non-recurring basis during the threesix months ended March 31,June 30, 2015 and December 31, 2014.

The following information, is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivative financial instruments, other than investment in affiliates (in thousands):

Note 9. Income Taxes

The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company had no unrecognized tax benefits as of March 31,June 30, 2015, and December 31, 2014.

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 unaudited condensed consolidated statementstatements of income (loss) for the period that the adjustment is determined to be required.

Deferred tax assets consist of the following (in thousands):

The Tax Reform Act of 1986 limits the use of net operating loss and tax credit carryforwards in certain situations where stock ownership changes occur. In the event the Company has had a change in ownership, the future utilization of the Company’s net operating loss and tax credit carryforwards could be limited.

A portion of deferred tax assets relating to net operating loss carryforwards (“NOLs”),NOLs, pertains to NOLsNOL carryforwards resulting from tax deductions upon the exercise of employee stock options of approximately $1,900,000.$1,800,000. When recognized, the tax benefit of these loss carryforwards will be accounted for as a credit to additional paid-in capital rather than a reduction of the income tax expense.

As of December 31, 2014, the Company had net operating loss carryforwards for federal income tax purposes of approximately $421,000,000. The federal net operating loss carryforwards, if not offset against future income, will expire by 2032, with the majority of such NOLs expiring by 2021.

Note 10. Subsequent Events

During April

On August 10, 2015, the Company entered into two new senior secured credit agreements forResponse filed a total commitment of $12,500,000, of which $10,000,000 funded upon close. In conjunction with onevoluntary petition under Chapter 11 of the credit agreements, the Company was issued a warrant to purchase 8,152,174 shares of common stock with an exercise price of $0.46 per share that may be exercised at any time prior to April 17, 2022. In addition, on April 6, 2015 the Company amended the credit agreement of one of its partner companies to allow the draw of the remaining $2.0 million available under the facility, of which $1.0 million was funded by the Company and $1.0 million by an unaffiliated third party.U.S. Bankruptcy Code. In connection with the amendment,filing, Response and Cancer Genetics, Inc. (“Cancer Genetics”) entered into an agreement pursuant to which Cancer Genetics will acquire substantially all of Response’s assets. The agreement constitutes a stalking horse bid and is subject to potential, competing bids through the approval process by the Delaware Bankruptcy Court. During the bankruptcy process, the Company received warrantswill provide up to purchase 1,351,351 shares$3 million in debtor-in-possession financing (the “DIP financing”), to fund Response’s continued daily operations. The Company anticipates the sale will close in early October.

Based on the Company’s analysis of common stock. In addition, on May 7, 2015, SWK signed a commitment letter obligatingthe fair value of Response’s net assets serving as collateral of the Company’s loan, as well as the costs anticipated to be incurred throughout the bankruptcy process, the Company to fund up to $12determined that the loan outstanding at June 30, 2015, which had a carry value before any loss allowance of $10.6 million, inwas impaired and, as a result, the Company recognized loan transaction subjectimpairment expense of $2.6 million. The unaudited condensed consolidated statement of income (loss) for the three and six months ended June 30, 2015, also includes a market valuation loss of $802,000 on outstanding warrants issued by Response to the potential borrower fulfilling certain obligations.Company. The respective warrant assets were valued at zero in the unaudited condensed consolidated balance sheet as of June 30, 2015.

ITEM 2.            MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is provided as a supplement to and should be read in conjunction with, our audited consolidated financial statements, and the MD&A included in our Annual Report on Form 10-K for the year ended December 31, 2014 (“Annual Report”), as well as our unaudited condensed consolidated financial statements and the accompanying notes include in this report.

Overview

We were incorporated in July 1996 in California and reincorporated in Delaware in September 1999.

In July 2012, we commenced our new corporate strategy of building a specialty finance and asset management business. Our strategy is to be a leading healthcare capital provider by offering sophisticated, customized financing solutions to a broad range of life science companies, institutions and inventors. We will initially focusare currently focused on monetizing cash flow streams derived from commercial-stage products and related intellectual property through royalty purchases and financings, as well as through the creation of synthetic revenue interests in commercialized products. We expect to deploy our assets to earn interest, fees, and other income pursuant to this strategy, and we continue to identify and review financing and similar opportunities on an ongoing basis. In addition, through our wholly-owned subsidiary, SWK Advisors LLC, we provide non-discretionary investment advisory services to institutional clients in separately managed accounts to similarly invest in life science finance. SWK Advisors LLC is registered as an investment advisor with the Texas State Securities Board. We intend to fund transactions through our own working capital, as well as by building our asset management business to invest additional third party capital alongside our capital.

We have NOLs and believesbelieve that the ability to utilize these NOLs is an important and substantial asset. We believe that the foregoing business strategies can create value for itsour stockholders, and produce prospective taxable income (or the ability to generate capital gains) that might permit us to utilize the NOLs. We are unable to assure investors that itwe will find suitable financing or other revenue generating opportunities or that itwe will be able to utilize itsour existing NOLs.

We intend to fill a niche that we believe is underserved in the sub-$50 million transaction size. Since many of our competitors that provide longer term, royalty-related financing options have much greater financial resources than us, they tend to not focus on transaction sizes below $50 million as it is generally inefficient for them to do so. In addition, we do not believe that a sufficient number of other companies offer similar types of long-term financing options to fill the demand of the sub-$50 million market. As such, we believe we face less competition from such longer term, royalty investors in transactions that are less than $50 million. 

We will evaluate and invest in a broad range of healthcare related companies and products with innovative intellectual property, including, the biotechnology, medical device, medical diagnostics and related tools, animal health and pharmaceutical industries (together “life science”) and to tailor our financial solutions to the needs of our business partners. Our business partners are primarily engaged in selling products that directly or indirectly cure diseases and/or improve people’s or animals’ wellness, or they receive royalties paid on the sales of such products. For example, our biotechnology and pharmaceutical business partners manufacture medication that directly treat disease states, whereas our life science tools partners sell a wide variety of research instrumentation to help other companies conduct research into disease states.

Our investment objective is to maximize our portfolio total return and thus increase our net income and net operating income by generating income from three sources:

1. primarily owning or financing through debt investments, royalties generated by the sales of life science products and related intellectual property;

2. to a lesser extent, receiving interest and other income by advancing capital in the form of secured debt to companies in the life science sector; and

3. to a lesser extent, realize capital appreciation from equity-related investments in the life science sector.

In our portfolio we seek to achieve attractive risk-adjusted current yields and opportunities with the potential for equity-like returns.

The majority of our transactions are expected to be structured similarly to factoring transactions whereby we provide capital in exchange for an interest in an existing revenue stream. We do not anticipate providing capital in situations prior to the commercialization of a product. The existing revenue stream can take several forms, but is most commonly either a royalty derived from the sales of a life science product (1) from the marketing efforts of a third party, such as a royalty paid to an inventor on the sales of a medicine or (2) from the marketing efforts of a partner company, such as a medical device company that directly sells its own products. Our structured debt investments may include warrants or other features, giving us the potential to realize enhanced returns on a portion of our portfolio. Capital that we provide directly to our partners is generally used for growth and general working capital purposes, as well as for acquisitions or recapitalizations in select cases. We generally fund the full amount of transactions up to $20 million through our working capital.  We do not anticipate providing capital in situations prior to the commercialization of a product.

Our investment advisory agreements are currently non-discretionary and each client determines individually if it wants to participate in a transaction. Each account receives its pro rata allocation for a transaction based on which clients opt into a transaction, and each account receives its pro rata allocation of income produced by a transaction in which they participate. Clients pay us management and incentive fees according to a written investment advisory agreement, and we negotiate fees based on each client’s needs and the complexity of the client’s requirements. Fees paid by clients may differ depending upon the terms negotiated with each client and are paid directly by the client upon receipt of an invoice from us. We may seek to gain access to additional discretionary capital from similar investors in the future.

In circumstances where a transaction is greater than $20 million, we seek to syndicate amounts in excess of $20 million to our investment advisory clients. In addition, we may participate in transactions in excess of $10 million with investors other than our investment advisory clients. In those instances, we do not expect to earn investment advisory income from the participations of such investors.

We source our investment opportunities through a combination of our senior management’s proprietary relationships within the industry, outbound business development efforts and inbound inquiry from companies, institutions and inventors interested in learning about our capital financing alternatives. Our investment advisory clients generally do not originate investment opportunities for us.

As of May 8,August 12, 2015, we have executed 1618 transactions, deploying approximately $134,600,000$158,100,000 across a variety of opportunities:

In counting our transactions, we generally consider a series of transactions with one partner company as a single transaction. In six of the transactions, we participated alongside other investors; our investment advisory clients co-invested in two of these transactions. The other ten transactions were completed solely by SWK. Subsequent to closing on one of the eight transactions, however, we syndicated a portion of the loan to an investment advisory client and then subsequently purchased it back, and subsequently partnered with another investor on a follow-on round for the same partner company.

The table below provides an overview of the transactions.