Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 06, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | SWK Holdings Corporation | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 13,126,058 | |
Amendment Flag | false | |
Entity Central Index Key | 1,089,907 | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Filer Category | Smaller Reporting Company | |
Entity Well-known Seasoned Issuer | No | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
ASSETS | ||
Cash and cash equivalents | $ 61,194 | $ 47,287 |
Accounts receivable | 1,272 | 1,127 |
Finance receivables | 89,455 | 99,346 |
Marketable investments | 5,111 | 5,286 |
Investment in unconsolidated entities | 7,737 | 7,988 |
Deferred tax asset | 16,833 | 16,833 |
Warrant assets | 1,789 | 1,900 |
Other assets | 394 | 720 |
Total assets | 183,785 | 180,487 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Accounts payable and accrued liabilities | 1,086 | 788 |
Warrant liability | 178 | 259 |
Total liabilities | $ 1,264 | $ 1,047 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.001 par value; 25,000,000 shares authorized; 13,115,909, and 13,090,932 shares issued and outstanding at December 31, 2015 and 2014, respectively | $ 13 | $ 13 |
Additional paid-in capital | 4,433,032 | 4,432,926 |
Accumulated deficit | (4,254,702) | $ (4,257,798) |
Accumulated other comprehensive income | 14 | |
Total SWK Holdings Corporation stockholders' equity | 178,357 | $ 175,141 |
Non-controlling interests in consolidated entities | 4,164 | 4,299 |
Total stockholders' equity | 182,521 | 179,440 |
Total liabilities and stockholders' equity | $ 183,785 | $ 180,487 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 5,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 25,000,000 | 25,000,000 |
Common stock, issued | 13,126,058 | 13,115,909 |
Common stock, outstanding | 13,126,058 | 13,115,909 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Revenues | |||
Finance receivable interest income, including fees | $ 3,470 | $ 4,145 | |
Marketable investments interest income | 92 | 90 | |
Income related to investments in unconsolidated entities | 1,659 | 1,551 | |
Other | 15 | 15 | |
Total Revenues | $ 5,236 | 5,801 | |
Costs and expenses: | |||
Interest expense | $ 381 | ||
Security impairment expense | $ 339 | ||
General and administrative | 929 | $ 1,218 | |
Total costs and expenses | 1,268 | 1,599 | |
Other (expense) income | |||
Unrealized net (loss) gain on derivatives | (30) | 371 | |
Income before benefit from income tax | $ 3,938 | 4,573 | |
Provision for income taxes | 1,506 | ||
Consolidated net income | $ 3,938 | 3,067 | |
Net income attributable to non-controlling interests | 842 | 811 | |
Net income attributable to SWK Holdings Corporation Stockholders | $ 3,096 | $ 2,256 | |
Net income per share attributable to SWK Holdings Corporation Stockholders | |||
Basic (in dollars per share) | [1] | $ 0.24 | $ 0.17 |
Diluted (in dollars per share) | [1] | $ 0.24 | $ 0.17 |
Weighted Average Shares | |||
Basic (in shares) | [1] | 13,117 | 12,996 |
Diluted (in shares) | [1] | 13,132 | 13,004 |
[1] | Common stock and per share data at March 31, 2015, has been adjusted retroactively to reflect a net 1-for-10 reverse stock split effective October 7, 2015. |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Consolidated net income | $ 3,938 | $ 3,067 |
Unrealized gains on investment in securities | ||
Unrealized holding gains arising during period | 14 | |
Total other comprehensive income | 14 | |
Comprehensive income | 3,952 | $ 3,067 |
Comprehensive income attributable to non-controlling interests | 842 | 811 |
Comprehensive income attributable to SWK Holdings Corporation Stockholders | $ 3,110 | $ 2,256 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Consolidated net income | $ 3,938 | $ 3,067 |
Adjustments to reconcile consolidated net income to net cash provided by operating activities: | ||
Income from investments in unconsolidated entities | (1,659) | (1,551) |
Change in fair value of warrants | 30 | $ (371) |
Security impairment expense | $ 339 | |
Deferred income taxes | $ 1,506 | |
Loan discount amortization and fee accretion | $ (908) | (344) |
Interest income in excess of cash collected | (33) | |
Stock-based compensation | $ 106 | 197 |
Debt issuance cost amortization | 381 | |
Property and equipment depreciation | $ 3 | 1 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (145) | (86) |
Other Assets | 327 | (87) |
Accounts payable and other liabilities | 298 | 681 |
Net cash provided by operating activities | 2,329 | 3,361 |
Cash flows from investing activities: | ||
Cash distributions from investments in unconsolidated entities | 1,910 | 1,855 |
Net decrease (increase) in finance receivables | 10,648 | (3,423) |
Purchases of property and equipment | (3) | (50) |
Net cash provided by (used in) investing activities | $ 12,555 | (1,618) |
Cash flows from financing activities: | ||
Costs of common stock issuance | (10) | |
Distribution to non-controlling interests | $ (977) | (974) |
Net cash used in financing activities | (977) | (984) |
Net increase in cash and cash equivalents | 13,907 | 759 |
Cash and cash equivalents at beginning of period | 47,287 | 58,728 |
Cash and cash equivalents at end of period | 61,194 | $ 59,487 |
Supplemental noncash flow activity: | ||
Common stock received in conjunction with finance receivables | $ 150 | |
Warrants received in conjunction with finance receivables | $ 191 | |
Consideration (rates and preferred stock) received in connection with loan repayment | $ 8,400 |
SWK Holdings Corporation and Su
SWK Holdings Corporation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
SWK Holdings Corporation and Summary of Significant Accounting Policies | 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. The Companys 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. The Company is primarily 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. The Company has been deploying its assets to earn interest, fees, and other income pursuant to this strategy, and the Company continues to identify and review financing and similar opportunities on an ongoing basis. In addition, through the Companys wholly-owned subsidiary, SWK Advisors LLC, the Company provides 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. The Company intends to fund transactions through its own working capital, as well as by building its asset management business by raising additional third party capital to be invested alongside the Companys capital. The Company fills a niche that it believes is underserved in the sub-$50 million transaction size. Since many of its competitors that provide longer term, royalty-related financing options have much greater financial resources than the Company, they tend to not focus on transaction sizes below $50 million as it is generally inefficient for them to do so. In addition, the Company does 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, the Company believes it faces less competition from such longer term, royalty investors in transactions that are less than $50 million. The Company has net operating loss carryforwards (NOLs) and believes that the ability to utilize these NOLs is an important and substantial asset. The Company believes that the foregoing business strategies can create value for its stockholders, and produce prospective taxable income (or the ability to generate capital gains) that might permit the Company to utilize the NOLs. The Company is unable to assure investors that it will find suitable financing opportunities or that it will be able to utilize its existing NOLs. As of March 31, 2016, the Company had NOL carryforwards for federal income tax purposes of $405.0 million. The federal NOL carryforwards, if not offset against future income, will expire by 2032, with the majority of such NOLs expiring by 2021. The Company also had federal research credit carryforwards of $2.7 million. The federal credits will expire by 2029. As of March 31, 2016, the Company and its partners have executed transactions with 18 different parties under its specialty finance strategy, funding $240.0 million in various financial products across the life science sector. The Companys portfolio includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in the life science sector, purchased royalties generated by sales of life science products and related intellectual property and an unconsolidated equity investment in a company which retains the marketing authorization rights to a pharmaceutical product. The Company is headquartered in Dallas, Texas. Basis of Presentation and Principles of Consolidation The Companys unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The unaudited condensed 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 Companys ownership may be less than 50%. 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 have the substantial 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 Companys unaudited condensed consolidated financial statements, it would have no effect on its operations and/or total stockholders equity attributable to the Company. Reverse Stock Split On October 7, 2015, the Company effected a 1-for-100 reverse stock split of its common stock, immediately followed by a 10-for-1 forward stock split of its common stock. For holders of greater than 100 shares prior to October 7, 2015, the net effect was a 1-for-10 reverse split. The number of shares of common stock underlying the Companys options and warrants to acquire shares of common stock were adjusted accordingly. All applicable share data, per share amounts and related information in the unaudited condensed consolidated financial statements and notes thereto have been adjusted retroactively to give effect to the stock splits 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, 2016. 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 Companys Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 24, 2016 . Use of Estimates The preparation of the Companys unaudited condensed 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 unaudited condensed 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, impairment of financing receivables and long-lived assets, valuation of warrants, useful lives of property and equipment, 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 Companys 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 Companys 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, volatile equity markets, and economic downturns, can increase the uncertainty already inherent in the Companys 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 unaudited condensed 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. Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: Contracts with customers Significant judgments and changes in judgments Certain assets In August 2015, the FASB issued updated guidance deferring the effective date of the revenue recognition standard. In March and April 2016, the FASB issued additional updated guidance, which clarifies certain aspects of the ASU and the related implementation guidance issued by the FASB-IASB Joint Transition Resource Group for Revenue Recognition. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method. Entities will be required to measure these investments at fair value at the end of each reporting period and recognize changes in fair value in net income. A practicability exception will be available for equity investments that do not have readily determinable fair values; however, the exception requires the Company to consider relevant transactions that can be reasonably known to identify any observable price changes that would impact the fair value. This guidance also changes certain disclosure requirements and other aspects of current GAAP. This guidance is effective for annual periods beginning after December 15, 2017, and is applicable to the Company in fiscal 2019. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact that this guidance will have on its results of operations, financial position and cash flows, nor decided upon the method of adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows |
Net Income per Share
Net Income per Share | 3 Months Ended |
Mar. 31, 2016 | |
Net income per share attributable to SWK Holdings Corporation Stockholders | |
Net Income per Share | Note 2. Net Income per Share Basic net income per share is computed using the weighted average number of outstanding shares of common stock. Diluted net income per share is computed using the weighted average number of outstanding shares of common stock 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 earnings per share for the following (in thousands, except per share amounts): Three Months Ended March 31, 2016 2015 Numerator: Net income attributable to SWK Holdings Corporation Stockholders $ 3,096 $ 2,256 Denominator: Weighted-average shares outstanding 13,117 12,996 Effect of dilutive securities 15 8 Weighted-average diluted shares 13,132 13,004 Basic income per share attributable to SWK Holdings Corporation Stockholders $ 0.24 $ 0.17 Diluted income per share attributable to SWK Holdings Corporation Stockholders $ 0.24 $ 0.17 For the three months ended March 31, 2016 and 2015, outstanding stock options and warrants to purchase shares of common stock in an aggregate of approximately 372,000 and 418,000, respectively, have been excluded from the calculation of diluted income per share as all such securities were anti-dilutive. |
Finance Receivables
Finance Receivables | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Finance Receivables | Note 3. Finance Receivables Finance receivables are reported at their determined principal balances net of any unearned income, cumulative charge-offs and unamortized deferred fees and costs. Unearned income and deferred fees and costs are amortized to interest income based on all cash flows expected using the effective interest method. The carrying value of finance receivables are as follows (in thousands): Portfolio March 31, December 31, Term Loans $ 79,528 $ 89,204 Royalty Purchases 17,009 17,224 Total before allowance for credit losses 96,537 106,428 Allowance for credit losses 7,082 7,082 Total carrying value $ 89,455 $ 99,346 Credit Quality of Finance Receivables The Company originates finance receivables to companies primarily in the life sciences sector. This concentration of credit exposes the Company to a higher degree of risk associated with this sector. On a quarterly basis, the Company evaluates the carrying value of each finance receivable for impairment. A term loan is considered to be impaired when, based on current information and events, it is determined that the Company will not be able to collect the amounts due according to the loan contract, including scheduled interest payments. This evaluation is generally based on delinquency information, an assessment of the borrowers financial condition and the adequacy of collateral, if any. The Company would generally place term loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain and they are 90 days past due for interest or principal, unless the term loan is both well-secured and in the process of collection. When placed on nonaccrual, the Company would reverse any accrued unpaid interest receivable against interest income and amortization of any net deferred fees is suspended. Generally, the Company would return a term loan to accrual status when all delinquent interest and principal become current under the terms of the credit agreement and collectability of remaining principal and interest is no longer doubtful. In certain circumstances, the Company may place a finance receivable on nonaccrual status but conclude it is not impaired. Receivables associated with royalty stream purchases would be considered to be impaired when it is probable that the Company will be unable to collect the book value of the remaining investment based upon adverse changes in the estimated underlying royalty stream. When the Company identifies a finance receivable as impaired, it measures the impairment based on the present value of expected future cash flows, discounted at the receivables effective interest rate, or the estimated fair value of the collateral, less estimated costs to sell. If it is determined that the value of an impaired receivable is less than the recorded investment, the Company would recognize impairment with a charge to the allowance for credit losses. When the value of the impaired receivable is calculated by discounting expected cash flows, interest income would be recognized using the receivables effective interest rate over the remaining life of the receivable. The Company individually develops the allowance for credit losses for any identified impaired loans. In developing the allowance for credit losses, the Company considers, among other things, the following credit quality indicators: business characteristics and financial conditions of obligors; current economic conditions and trends; actual charge-off experience; current delinquency levels; value of underlying collateral and guarantees; regulatory environment; and any other relevant factors predicting investment recovery. There was no provision for credit losses, charge offs or recoveries during the three months ended March 31, 2016 and 2015, respectively. The following table presents nonaccrual and performing loans by portfolio segment (in thousands): March 31, 2016 December 31, 2015 Nonaccrual Performing Total Nonaccrual Performing Total Term Loans $ 31,306 $ 41,140 $ 72,446 $ 20,093 $ 62,029 $ 82,122 Royalty Purchases 17,009 17,009 17,224 17,224 Total carrying value $ 31,306 $ 58,149 $ 89,455 $ 20,093 $ 79,253 $ 99,346 As of March 31, 2016, the Company had four term loans associated with three portfolio companies in nonaccrual status with a carrying value, net of credit loss allowance, of $31.3 million. As of December 31, 2015, the Company had three term loans associated with three portfolio companies in nonaccrual status with a carrying value, net of credit loss allowance, of $20.1 million. No cash was collected on nonaccrual loans during the three months ended March 31, 2016. Of the four nonaccrual term loans at March 31, 2016, two loans, with an aggregate carrying value of $12.5 million, net of credit loss allowance, were identified as impaired by the Company, as the fair market value of the loans, less costs to sell, were lower than their respective recorded investments in the loans. SynCardia Systems, Inc. (SynCardia) During the year ended December 31, 2015, the Company purchased from an unrelated party a first lien term loan and a second lien convertible note, with an aggregate $20.1 million par value for a discounted purchase price of $6.6 million. The purchased loans represent an additional investment in two existing loans the Company has outstanding with SynCardia. The purchased loans and the prior existing have both been placed on nonaccrual status, therefore no accretable yield has been recognized during three months ended March 31, 2016 or the year ended December 31, 2015. In addition to the newly purchased loans, the Company placed its two existing loans with a carrying value before credit loss allowance of $6.9 million, as of December 31, 2015, on nonaccrual status. Cash collected on the loans totaled $0 and $1.0 million, during the three months ended March 31, 2016 and the year ended December 31, 2015, and $0 and $0.8 million was applied to the carrying value of the loans, respectively. SynCardia defaulted under its loans in December 2015 by violating certain financial covenants and not paying interest due to the Company. The Company and SynCardia entered into a forbearance agreement in December 2015 whereby the Company agreed to forbear on exercising its rights and remedies available to it under the loan agreements subject to SynCardia retaining certain financial advisory professionals and pursuing a sale and/or recapitalization process. The collateral for the loans has been individually reviewed, noting that the fair market value of the loan, less costs to sell, was lower than the recorded investments in the loans as of March 31, 2016. Based on the impairment analysis, the Company recorded a provision for credit loss of $6.9 million, as of December 31, 2015. As of March 31, 2016, there was no additional provision for credit loss recorded. ABT Molecular Imaging, Inc. (ABT) On October 10, 2014, the Company entered into a credit agreement pursuant to which the Company provided ABT a second lien term loan in the principal amount of $10.0 million. The loan matures on October 8, 2021. The synthetic royalty payment due to the Company on December 15, 2015 was blocked by ABTs first lien lender pursuant to the terms of the intecreditor agreement by and between the Company and the first lien lender as a result of a forbearance agreement entered into between ABT and the first lien lender. Per the terms of the forbearance agreement, the first lien lender deferred principal payments until maturity of the first lien in March 2016 and ABT raised additional equity capital. The collateral for the loan has been individually reviewed, noting that the fair market value of the loan, less costs to sell, was greater than the recorded investments in the loans as of March 31, 2016. Based on the impairment analysis, the Company has not recorded a provision for credit loss, as of March 31, 2016. B&D Dental (B&D) On December 10, 2013, the Company entered into a 5 year credit agreement to provide B&D a senior secured term loan with a principal amount of $6.0 million funded upon close, net of an arrangement fee of $60,000. As of March 31, 2016, the total amount funded was $7.9 million. B&D is currently in default under the terms of the credit agreement and as a result the Company classified the loan to non-accrual as of September 30, 2015. The previously accrued and unearned interest have not been reversed nor has an allowance been recorded for this loan because the Company believes its collateral position is greater than the unpaid balance. The Company obtained a third party valuation to support such assertion. During the first quarter of 2016, the Company executed additional amendments to the loan to advance an additional $0.3 million in order to directly pay critical vendors and protect the value of the collateral. The Company believes its collateral position is greater than the unpaid balance; thus, accrued and unearned interest have not been reversed nor has an allowance been recorded as of March 31, 2016. Unfunded Commitments As of March 31, 2016, the Company had total unfunded commitments of $5.3 million. Of the total $5.3 million, $2.5 million is committed to DxTerity Diagnostics should it exceed an established revenue threshold at any time on or before the quarter ended December 31, 2016; $2.0 million is committed to Nanosphere, Inc. upon Nanosphere, Inc. meeting certain operational milestones by September 30, 2016; and $0.8 million is committed to Cambia® for earn out payments if cumulative net sales reach a certain threshold within a specified period of time. |
Marketable Investments
Marketable Investments | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Investments | Note 4. Marketable Investments Investment in securities at March 31, 2016 and December 31, 2015 consist of the following (in thousands): March 31, December 31, Corporate debt securities $ 2,857 $ 2,857 Equity securities 2,254 2,429 Total $ 5,111 $ 5,286 The amortized cost basis amounts, gross unrealized holding gains, gross unrealized holding losses and fair values of available-for-sale securities as of March 31, 2016 and December 31, 2015, are as follows (in thousands): March 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Available for sale securities: Corporate debt securities $ 2,857 $ $ $ 2,857 Equity securities 2,240 14 2,254 $ 5,097 $ 14 $ $ 5,111 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Available for sale securities: Corporate debt securities $ 2,857 $ $ $ 2,857 Equity securities 2,429 2,429 $ 5,286 $ $ $ 5,286 During the three months ended March 31, 2016, and the year ended December 31, 2015, the Company had no sales of available-for-sale securities. Equity Securities The Companys equity securities include 736,076 shares of Cancer Genetics common stock and 1,168,831 shares of Hooper Holmes common stock, which were valued at $2.1 million and $0.2 million, respectively. For the three months ended March 31, 2016, the Company recognized an other-than-temporary impairment loss of $0.3 million related to Cancer Genetics common stock. Debt Securities Additionally, on July 9, 2013, the Company entered into a note purchase agreement to purchase, at par, $3.0 million of a total of $100.0 million aggregate principal amount of senior secured notes due in November 2026. The agreement allows the first interest payment date to include paid-in-kind notes for any cash shortfall, of which the Company received $0.1 million on November 15, 2013. The notes are secured only by certain royalty and milestone payments associated with the sales of pharmaceutical products. The notes are reflected at fair value as available-for-sale securities. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Variable Interest Entities | Note 5. Variable Interest Entities The Company consolidates the activities of VIEs of which it is 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 VIEs 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 entitys 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 $13.0 million. 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 $13.0 million included $6.0 million provided by SWK Holdings GP and $7.0 million 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 Companys ownership in SWK HP constitutes variable interests. The Company has determined that it is the primary beneficiary of 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 Companys consolidated balance sheet. 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 receives a 1x cash on cash return on its interest in Holmdel, SWK HP will receive approximately 84% of the pharmaceutical products cash flow. As the cash on cash multiple received by SWK HP increases, SWK HPs interest in the cash flow generated by the pharmaceutical product decreases, but in no instance will it decline below 39%. Holmdel is considered a VIE because SWK HPs 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 HPs 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 months ended March 31, 2016 and 2015, the Company recognized $1.7 million and $1.6, respectively, of equity method gains. The amount of equity method gains attributable to the non-controlling interests in SWK HP were $0.8 million and $0.8 million for the three months ended March 31, 2016 and 2015, respectively. In addition, SWK HP received cash distributions totaling $1.9 million during the three months ended March 31, 2016, of which $1.0 million was subsequently paid to holders of the non-controlling interests in SWK HP. Changes in the carrying amount of the Companys investment in Holmdel for the three months ended March 31, 2016 are as follows (in thousands): Balance at December 31, 2015 $ 7,988 Add: Income from investments in unconsolidated entities 1,659 Less: Cash distribution on investments in unconsolidated (1,910 ) Balance at March 31, 2016 $ 7,737 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 Companys consolidated statements of operations: in millions As of March 31, Three Months Assets $ 11.5 Revenue $ 3.0 Liabilities $ 3.5 Expenses $ 0.4 Equity $ 8.0 Net income $ 2.6 in millions As of December 31, Three Months Assets $ 11.7 Revenue $ 2.4 Liabilities $ 3.3 Expenses $ 0.4 Equity $ 8.4 Net income $ 2.0 |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 6. Related Party Transactions The Company entered into a credit facility with an affiliate of a stockholder, Carlson Capital, L.P. (Carlson), (collectively, the Stockholder) on September 6, 2013. The draw period expired on March 6, 2015 and, as a result, the Company has no availability remaining on the facility. There was no outstanding balance under the credit facility as of March 31, 2016 and December 31, 2015, respectively. In conjunction with the credit facility, the Company issued warrants to the Stockholder for 100,000 shares of the Companys common stock at a strike price of $13.875. The warrants have a price dilution mechanism that was triggered by the price that shares were sold by the Company in a rights offering in 2014, and as a result, the strike price of the warrants was reduced to $13.48. In connection with the credit facility, the Company and the Stockholder and certain of the Stockholders affiliates, including the lender entered into a Voting Rights Agreement restricting the Stockholders and such affiliates voting rights under certain circumstances and providing the Stockholder and such affiliates a right of first offer on certain future share issuances. 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 Companys stock. As such, the warrants with a value of $0.2 million and $0.3 million at March 31, 2016 and December 31, 2015, respectively, are reflected as a warrant liability in the unaudited condensed consolidated balance sheets. Unrealized (losses) gains of $(0.1) million and $0.2 million were included in other (expense) income in the consolidated statements of income for the three months ended March 31, 2016 and 2015, respectively. The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions: March 31, 2016 March 31, 2015 Dividend rate 0 % 0 % Risk-free rate 1.2 % 1.4 % Expected life (years) 4.4 5.4 Expected volatility 32.7 % 32.6 % During the three months ended March 31, 2015, the Company recognized interest expense totaling $381,000 consisting of debt issuance cost amortization. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Note 7. Stockholders Equity Stock Compensation Plans During the three months ended March 31, 2016, the Board approved compensation for Board services by granting 6,150 shares of common stock as compensation for the non-employee directors. The Company recorded approximately $62,000 in board compensation expense relating to the quarterly grant. During the three months ended March 31, 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 10,000 shares to each non-employee directors for services as a director for the period January 1, 2015 to March 31, 2015; and (iii) a grant of 32,595 shares of common stock in lieu of cash payments to the nonemployee directors upon the voluntary election of such directors. The Company recorded approximately $0.1 million in board compensation expense relating to the quarterly grant. The stock-based compensation expense recognized by the Company for the three months ended March 31, 2016 and 2015, was $0.1 million and $90,000, respectively. The following table summarizes activities under the option plans for the three months ended March 31, 2016: Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Term (in years) Aggregate Intrinsic Value Balances, December 31, 2015 364,000 $ 12.05 7.4 $ 420.0 Options cancelled and retired (170,250 ) 12.67 Options exercised (18,750 ) 8.30 Options granted Balances, March 31, 2016 175,000 $ 11.39 7.4 $ 128.0 Options vested and exercisable and expected to be vested and exercisable at March 31, 2016 175,000 $ 11.39 7.4 $ 128.0 Options vested and exercisable at March 31, 2016 31,250 $ 10.46 7.0 $ 31.9 At March 31, 2016, there were 0.3 million shares reserved for equity awards under the 2010 Stock Incentive Plan and the Company had $0.1 million of total unrecognized stock option expense, net of estimated forfeitures, which will be recognized over the weighted average remaining period of 1.8 years. The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2016: Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $ 8.30 75,000 6.1 $ 8.30 18,750 $ 8.30 13.70 100,000 8.4 13.70 12,500 13.70 Total 175,000 7.4 $ 11.39 31,250 $ 10.46 J. Brett Pope resigned as the Companys Chief Executive Officer and a member of the Board of Directors effective January 12, 2016. Under the terms of Mr. Popes severance agreement, the Company approved the cashless exercise of 18,750 vested stock options and the remaining 156,250 unvested stock options were forfeited. Of the 18,750 vested stock options, 14,751 options were surrendered to the Company to pay the exercise price, resulting in a net issuance of 3,999. The surrendered shares were immediately canceled by the Company. 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 three months ended March 31, 2016, is as follows (in thousands): Balance at December 31, 2015 $ 4,299 Add: Income attributable to non-controlling interests 842 Less: Cash distribution to non-controlling interests (977 ) Balance at March 31, 2016 $ 4,164 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 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 instruments 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. Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Active markets are considered to be those in which transactions for the assets or liabilities occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability. This category includes quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in inactive markets. Level 3 Unobservable inputs are not corroborated by market data. This category is comprised of financial and non-financial assets and liabilities whose fair value is estimated based on internally developed models or methodologies using significant inputs that are generally less readily observable from objective sources. 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 three months ended March 31, 2016 and 2015. The fair value of equity method investments is not readily available nor has the Company 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 its equity method investments included in the consolidated balance sheets as of March 31, 2016 and December 31, 2015. The information following is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying unaudited and condensed consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivative financial instruments, other than investment in affiliates . 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. Cash and cash equivalents The carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets fair values. Securities available for sale Certain common equity securities are reported at fair value utilizing Level 1 inputs (exchange quoted prices). 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 Warrants Marketable Investments 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, 2016 (in thousands): Total Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Financial Assets: Warrant assets $ 1,789 $ $ $ 1,789 Marketable investments 5,111 2,254 2,857 Financial Liabilities: Warrant liability $ 178 $ $ $ 178 The following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Total Carrying Value in Consolidated Balance Sheet Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Financial Assets: Warrant assets $ 1,900 $ $ $ 1,900 Marketable investments 5,286 2,429 2,857 Financial Liabilities: Warrant liability $ 259 $ $ $ 259 The changes on the value of the warrant assets during the three months ended March 31, 2016 and 2015 were as follows (in thousands): Fair value December 31, 2015 1,900 Issuance Transfers Change in fair value (111 ) Fair value March 31, 2016 $ 1,789 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 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 three months ended March 31, 2016 were as follows (in thousands): Fair value December 31, 2015 259 Issuances Changes in fair value (81 ) Fair value March 31, 2016 $ 178 There were no financial assets and liabilities measured at fair value on a nonrecurring basis as of March 31, 2016. 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 as of March 31, 2016. Off-balance sheet financial instruments Fair values for off-balance sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties credit standing. As of March 31, 2016 (in thousands): Carry Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and restricted cash $ 61,194 $ 61,194 $ 61,194 $ $ Finance receivables 89,455 89,455 89,455 Marketable investments 5,111 5,111 2,254 2,857 Warrant assets 1,789 1,789 1,789 Financial Liabilities Warrant liability $ 178 $ 178 $ $ $ 178 As of December 31, 2015 (in thousands): Carry Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and restricted cash $ 47,287 $ 47,287 $ 47,287 $ $ Finance receivables 99,346 99,346 99,346 Marketable investments 5,286 5,286 2,429 2,857 Warrant assets 1,900 1,900 1,900 Financial Liabilities Warrant liability $ 259 $ 259 $ $ $ 259 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9. Subsequent Events Thermedx, LLC On May 5, 2016, the Company closed a $3,500,000 first lien synthetic royalty term loan with Thermedx, LLC (Thermedx). The Company funded $2,500,000 at closing and Thermedx can draw an additional $1,000,000 upon achieving certain operational benchmarks. The term loan is required to be repaid by a tiered revenue interest that is charged on quarterly net sales and royalties until such time as the lenders receive a 2.0x cash on cash return. Galil Medical Group On May 5, 2016, Galil Medical Group (Galil) announced it had entered into a definitive agreement to be acquired by BTG plc (BTG). BTG has agreed to acquire Galil for initial cash consideration of $84.5 million and up to $25.5 million in future milestone payments. The announcement indicated that the transaction is expected to close late in the second quarter, 2016. |
SWK Holdings Corporation and 16
SWK Holdings Corporation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Operations | 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. The Companys 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. The Company is primarily 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. The Company has been deploying its assets to earn interest, fees, and other income pursuant to this strategy, and the Company continues to identify and review financing and similar opportunities on an ongoing basis. In addition, through the Companys wholly-owned subsidiary, SWK Advisors LLC, the Company provides 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. The Company intends to fund transactions through its own working capital, as well as by building its asset management business by raising additional third party capital to be invested alongside the Companys capital. The Company fills a niche that it believes is underserved in the sub-$50 million transaction size. Since many of its competitors that provide longer term, royalty-related financing options have much greater financial resources than the Company, they tend to not focus on transaction sizes below $50 million as it is generally inefficient for them to do so. In addition, the Company does 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, the Company believes it faces less competition from such longer term, royalty investors in transactions that are less than $50 million. The Company has net operating loss carryforwards (NOLs) and believes that the ability to utilize these NOLs is an important and substantial asset. The Company believes that the foregoing business strategies can create value for its stockholders, and produce prospective taxable income (or the ability to generate capital gains) that might permit the Company to utilize the NOLs. The Company is unable to assure investors that it will find suitable financing opportunities or that it will be able to utilize its existing NOLs. As of March 31, 2016, the Company had NOL carryforwards for federal income tax purposes of $405.0 million. The federal NOL carryforwards, if not offset against future income, will expire by 2032, with the majority of such NOLs expiring by 2021. The Company also had federal research credit carryforwards of $2.7 million. The federal credits will expire by 2029. As of March 31, 2016, the Company and its partners have executed transactions with 18 different parties under its specialty finance strategy, funding $240.0 million in various financial products across the life science sector. The Companys portfolio includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in the life science sector, purchased royalties generated by sales of life science products and related intellectual property and an unconsolidated equity investment in a company which retains the marketing authorization rights to a pharmaceutical product. The Company is headquartered in Dallas, Texas. |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Companys unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (GAAP). The unaudited condensed 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 Companys ownership may be less than 50%. 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 have the substantial 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 Companys unaudited condensed consolidated financial statements, it would have no effect on its operations and/or total stockholders equity attributable to the Company. |
Reverse Stock Split | Reverse Stock Split On October 7, 2015, the Company effected a 1-for-100 reverse stock split of its common stock, immediately followed by a 10-for-1 forward stock split of its common stock. For holders of greater than 100 shares prior to October 7, 2015, the net effect was a 1-for-10 reverse split. The number of shares of common stock underlying the Companys options and warrants to acquire shares of common stock were adjusted accordingly. All applicable share data, per share amounts and related information in the unaudited condensed consolidated financial statements and notes thereto have been adjusted retroactively to give effect to the stock splits. |
Unaudited Interim Financial Information | 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, 2016. 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 Companys Annual Report on Form 10-K for the year ended December 31, 2015, filed with the SEC on March 24, 2016 . |
Use of Estimates | Use of Estimates The preparation of the Companys unaudited condensed 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 unaudited condensed 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, impairment of financing receivables and long-lived assets, valuation of warrants, useful lives of property and equipment, 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 Companys 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 Companys 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, volatile equity markets, and economic downturns, can increase the uncertainty already inherent in the Companys 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 unaudited condensed 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires an entity to disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about: Contracts with customers Significant judgments and changes in judgments Certain assets In August 2015, the FASB issued updated guidance deferring the effective date of the revenue recognition standard. In March and April 2016, the FASB issued additional updated guidance, which clarifies certain aspects of the ASU and the related implementation guidance issued by the FASB-IASB Joint Transition Resource Group for Revenue Recognition. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This guidance changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method. Entities will be required to measure these investments at fair value at the end of each reporting period and recognize changes in fair value in net income. A practicability exception will be available for equity investments that do not have readily determinable fair values; however, the exception requires the Company to consider relevant transactions that can be reasonably known to identify any observable price changes that would impact the fair value. This guidance also changes certain disclosure requirements and other aspects of current GAAP. This guidance is effective for annual periods beginning after December 15, 2017, and is applicable to the Company in fiscal 2019. Early adoption is permitted. The Company is currently evaluating the new guidance and has not determined the impact that this guidance will have on its results of operations, financial position and cash flows, nor decided upon the method of adoption. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. |
Net Income per Share (Tables)
Net Income per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table shows the computation of basic and diluted earnings per share for the following (in thousands, except per share amounts): Three Months Ended March 31, 2016 2015 Numerator: Net income attributable to SWK Holdings Corporation Stockholders $ 3,096 $ 2,256 Denominator: Weighted-average shares outstanding 13,117 12,996 Effect of dilutive securities 15 8 Weighted-average diluted shares 13,132 13,004 Basic income per share attributable to SWK Holdings Corporation Stockholders $ 0.24 $ 0.17 Diluted income per share attributable to SWK Holdings Corporation Stockholders $ 0.24 $ 0.17 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of carrying value of finance receivables | The carrying value of finance receivables are as follows (in thousands): Portfolio March 31, 2016 December 31, 2015 Term Loans $ 79,528 $ 89,204 Royalty Purchases 17,009 17,224 Total before allowance for credit losses 96,537 106,428 Allowance for credit losses 7,082 7,082 Total carrying value $ 89,455 $ 99,346 |
Schedule of analysis of nonaccrual and performing loans by portfolio segment | The following table presents nonaccrual and performing loans by portfolio segment (in thousands): March 31, 2016 December 31, 2015 Nonaccrual Performing Total Nonaccrual Performing Total Term Loans $ 31,306 $ 41,140 $ 72,446 $ 20,093 $ 62,029 $ 82,122 Royalty Purchases 17,009 17,009 17,224 17,224 Total carrying value $ 31,306 $ 58,149 $ 89,455 $ 20,093 $ 79,253 $ 99,346 |
Marketable Investments (Tables)
Marketable Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable investments | Investment in securities at March 31, 2016 and December 31, 2015 consist of the following (in thousands): March 31, 2016 December 31, 2015 Corporate debt securities $ 2,857 $ 2,857 Equity securities 2,254 2,429 Total $ 5,111 $ 5,286 |
Schedule of available-for-sale securities reconciliation | The amortized cost basis amounts, gross unrealized holding gains, gross unrealized holding losses and fair values of available-for-sale securities as of March 31, 2016 and December 31, 2015, are as follows (in thousands): March 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Available for sale securities: Corporate debt securities $ 2,857 $ $ $ 2,857 Equity securities 2,240 14 2,254 $ 5,097 $ 14 $ $ 5,111 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Loss Fair Value Available for sale securities: Corporate debt securities $ 2,857 $ $ $ 2,857 Equity securities 2,429 2,429 $ 5,286 $ $ $ 5,286 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Receivables [Abstract] | |
Schedule of changes in the carrying amount of equity investment | Changes in the carrying amount of the Companys investment in Holmdel for the three months ended March 31, 2016 are as follows (in thousands): Balance at December 31, 2015 $ 7,988 Add: Income from investments in unconsolidated entities 1,659 Less: Cash distribution on investments in unconsolidated (1,910 ) Balance at March 31, 2016 $ 7,737 |
Schedule of equity method investments | 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 Companys consolidated statements of operations: in millions As of March 31, Three Months Assets $ 11.5 Revenue $ 3.0 Liabilities $ 3.5 Expenses $ 0.4 Equity $ 8.0 Net income $ 2.6 in millions As of December 31, Three Months Assets $ 11.7 Revenue $ 2.4 Liabilities $ 3.3 Expenses $ 0.4 Equity $ 8.4 Net income $ 2.0 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of assumptions used | The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions: March 31, 2016 March 31, 2015 Dividend rate 0 % 0 % Risk-free rate 1.2 % 1.4 % Expected life (years) 4.4 5.4 Expected volatility 32.7 % 32.6 % |
Stockholders Equity (Tables)
Stockholders Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stock options activity | The following table summarizes activities under the option plans for the three months ended March 31, 2016: Options Outstanding Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balances, December 31, 2015 364,000 $ 12.05 7.4 $ 420.0 Options cancelled and retired (170,250 ) 12.67 Options exercised (18,750 ) 8.30 Options granted Balances, March 31, 2016 175,000 $ 11.39 7.4 $ 128.0 Options vested and exercisable and expected to be vested and exercisable at March 31, 2016 175,000 $ 11.39 7.4 $ 128.0 Options vested and exercisable at March 31, 2016 31,250 $ 10.46 7.0 $ 31.9 |
Schedule of stock option plans by exercise price range | The following table summarizes significant ranges of outstanding and exercisable options as of March 31, 2016: Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (in Years) Weighted Average Exercise Price Per Share Number Exercisable Weighted Average Exercise Price Per Share $ 8.30 75,000 6.1 $ 8.30 18,750 $ 8.30 13.70 100,000 8.4 13.70 12,500 13.70 Total 175,000 7.4 $ 11.39 31,250 $ 10.46 |
Schedule of change in non-controlling interest | Changes in the carrying amount of the non-controlling interest in the unaudited condensed consolidated balance sheet for the three months ended March 31, 2016, is as follows (in thousands): Balance at December 31, 2015 $ 4,299 Add: Income attributable to non-controlling interests 842 Less: Cash distribution to non-controlling interests (977) Balance at March 31, 2016 $ 4,164 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on recurring basis | The following table presents financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2016 (in thousands): Total Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Financial Assets: Warrant assets $ 1,789 $ $ $ 1,789 Marketable investments 5,111 2,254 2,857 Financial Liabilities: Warrant liability $ 178 $ $ $ 178 The following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2015 (in thousands): Total Carrying Value in Consolidated Balance Sheet Quoted prices in active markets for identical assets or liabilities (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Financial Assets: Warrant assets $ 1,900 $ $ $ 1,900 Marketable investments 5,286 2,429 2,857 Financial Liabilities: Warrant liability $ 259 $ $ $ 259 |
Schedule of fair value assets measured on recurring basis unobservable input reconciliation | The changes on the value of the warrant assets during the three months ended March 31, 2016 and 2015 were as follows (in thousands): Fair value December 31, 2015 1,900 Issuance Transfers Change in fair value (111 ) Fair value March 31, 2016 $ 1,789 |
Schedule of fair value liability measured on recurring basis unobservable input reconciliation | The changes on the value of the warrant liability during the three months ended March 31, 2016 were as follows (in thousands): Fair value December 31, 2015 259 Issuances Changes in fair value (81 ) Fair value March 31, 2016 $ 178 |
Schedule of fair value by balance sheet grouping | Fair values for off-balance sheet, credit related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties credit standing. As of March 31, 2016 (in thousands): Carry Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and restricted cash $ 61,194 $ 61,194 $ 61,194 $ $ Finance receivables 89,455 89,455 89,455 Marketable investments 5,111 5,111 2,254 2,857 Warrant assets 1,789 1,789 1,789 Financial Liabilities Warrant liability $ 178 $ 178 $ $ $ 178 As of December 31, 2015 (in thousands): Carry Value Fair Value Level 1 Level 2 Level 3 Financial Assets Cash and restricted cash $ 47,287 $ 47,287 $ 47,287 $ $ Finance receivables 99,346 99,346 99,346 Marketable investments 5,286 5,286 2,429 2,857 Warrant assets 1,900 1,900 1,900 Financial Liabilities Warrant liability $ 259 $ 259 $ $ $ 259 |
SWK Holdings Corporation and 24
SWK Holdings Corporation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Oct. 07, 2015 | Mar. 31, 2016 |
Accounting Policies [Abstract] | ||
Description of reverse stock split | 1-for-100 reverse stock split of its common stock, immediately followed by a 10-for-1 forward stock split | |
Net operating loss carryforwards for federal income tax | $ 405,000 | |
Net operating loss carryforwards for federal research | $ 2,700 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | ||
Numerator: | |||
Net income attributable to SWK Holdings Corporation Stockholders | $ 3,096 | $ 2,256 | |
Denominator: | |||
Weighted-average shares outstanding | [1] | 13,117 | 12,996 |
Effect of dilutive securities | 15 | 8 | |
Weighted-average diluted shares | [1] | 13,132 | 13,004 |
Basic income per share attributable to SWK Holdings Corporation Stockholders (in dollars per share) | [1] | $ 0.24 | $ 0.17 |
Diluted income per share attributable to SWK Holdings Corporation Stockholders (in dollars per share) | [1] | $ 0.24 | $ 0.17 |
[1] | Common stock and per share data at March 31, 2015, has been adjusted retroactively to reflect a net 1-for-10 reverse stock split effective October 7, 2015. |
Net Income per Share (Details N
Net Income per Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Net Income Per Share Details Narrative | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares) | 372,000 | 418,000 |
Finance Receivables (Details)
Finance Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Portfolio | ||
Total before allowance for credit losses | $ 96,537 | $ 99,346 |
Allowance for credit losses | 7,082 | 7,082 |
Total carrying value | 89,455 | 99,346 |
Life Science Term Loans [Member] | ||
Portfolio | ||
Total before allowance for credit losses | 79,528 | 82,122 |
Life Science Royalty Purchases [Member] | ||
Portfolio | ||
Total before allowance for credit losses | $ 17,009 | $ 17,224 |
Finance Receivables (Details 1)
Finance Receivables (Details 1) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Nonaccrual | $ 31,306 | $ 20,093 |
Performing | 58,149 | 79,253 |
Total | 96,537 | 99,346 |
Life Science Term Loans [Member] | ||
Nonaccrual | 31,306 | 20,093 |
Performing | 41,140 | 62,029 |
Total | $ 79,528 | $ 82,122 |
Life Science Royalty Purchases [Member] | ||
Nonaccrual | ||
Performing | $ 17,009 | $ 17,224 |
Total | $ 17,009 | $ 17,224 |
Finance Receivables (Details Na
Finance Receivables (Details Narrative) - USD ($) $ in Thousands | Oct. 10, 2014 | Dec. 10, 2013 | Feb. 29, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Face amount | $ 31,300 | $ 20,100 | ||||
Credit allowance | 12,500 | |||||
Financing receivable investment current | 58,149 | 79,253 | ||||
Unfunded Commitment [Member] | ||||||
Loan commitment | 5,300 | |||||
Unfunded Commitment [Member] | DxTerity Diagnostics [Member] | ||||||
Loan commitment | 2,500 | |||||
Unfunded Commitment [Member] | Nanosphere [Member] | Subsequent Event [Member] | ||||||
Financing receivable investment current | $ 2,000 | |||||
Unfunded Commitment [Member] | Cambia [Member] | ||||||
Loan commitment | 800 | |||||
Syn Cardia Systems [Member] | ||||||
Face amount | 6,900 | |||||
Cash collected on loans | 0 | 1,000 | ||||
Provision for credit loss | 6,900 | |||||
Loan carrying value | 0 | 800 | ||||
Syn Cardia Systems [Member] | First Lien Term Loan [Member] | ||||||
Face amount | 20,100 | |||||
Syn Cardia Systems [Member] | Second Lien Loan [Member] | ||||||
Face amount | $ 6,600 | |||||
ABT Molecular Imaging, Inc [Member] | Second Lien Loan [Member] | ||||||
Face amount | $ 10,000 | |||||
Debt instrument maturity date | Oct. 8, 2021 | |||||
ABT Molecular Imaging, Inc [Member] | First Lien Loan [Member] | ||||||
Payments to aquire loans receivable | $ 700 | |||||
B&D Dental [Member] | ||||||
Face amount | $ 6,000 | 7,900 | ||||
Credit agreement term | 5 years | |||||
Arrangement fee | $ 60 | |||||
Advance loan to collateral | $ 300 |
Marketable Investments (Details
Marketable Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments, Debt and Equity Securities [Abstract] | ||
Corporate debt securities | $ 2,857 | $ 2,857 |
Equity securities | 2,254 | 2,429 |
Total | $ 5,111 | $ 5,286 |
Marketable Investments (Detai31
Marketable Investments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Available for Sale Securities: | ||
Amortized Cost | $ 5,097 | $ 5,286 |
Gross Unrealized Gains | $ 14 | |
Gross Unrealized Loss | ||
Fair Value | $ 5,111 | $ 5,286 |
Equity Securities [Member] | ||
Available for Sale Securities: | ||
Amortized Cost | 2,240 | $ 2,429 |
Gross Unrealized Gains | $ 14 | |
Gross Unrealized Loss | ||
Fair Value | $ 2,254 | $ 2,429 |
Corporate Debt Securities [Member] | ||
Available for Sale Securities: | ||
Amortized Cost | $ 2,857 | $ 2,857 |
Gross Unrealized Gains | ||
Gross Unrealized Loss | ||
Fair Value | $ 2,857 | $ 2,857 |
Marketable Investments (Detai32
Marketable Investments (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Nov. 15, 2013 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Jul. 09, 2013 | |
Senior notes | $ 2,857 | $ 2,857 | |||
Paid-in-kind interest | $ (33) | ||||
Number of common shares | 13,126,058 | 13,115,909 | |||
Cancer Genetics, Inc [Member] | |||||
Impairment loss | $ 300 | ||||
Value of common shares | $ 2,100 | ||||
Number of common shares | 736,076 | ||||
Hooper Holmes [Member] | |||||
Value of common shares | $ 200 | ||||
Number of common shares | 1,168,831 | ||||
Agreement To Purchase Senior Secured Notes [Member] | |||||
Senior notes | $ 3,000 | ||||
Paid-in-kind interest | $ 100 | ||||
Agreement To Purchase Senior Secured Notes [Member] | Tribute [Member] | |||||
Senior notes | $ 100,000 |
Variable Interest Entities (Det
Variable Interest Entities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Rollforward] | ||
Beginning Balance | $ 7,988 | |
Add: Income from investments in unconsolidated entities | 1,659 | $ 1,551 |
Less: Cash distribution on investments in unconsolidated entities | (1,910) | $ (1,855) |
Ending Balance | $ 7,737 |
Variable Interest Entities (D34
Variable Interest Entities (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Receivables [Abstract] | ||
Assets | $ 11,500 | $ 11,700 |
Liabilities | 3,500 | 3,300 |
Equity | 8,000 | 8,400 |
Revenue | 3,000 | 2,400 |
Expenses | 400 | 400 |
Net income | $ 2,600 | $ 2,000 |
Variable Interest Entities (D35
Variable Interest Entities (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2012 | Mar. 31, 2016 | Mar. 31, 2015 | |
Percent of pharmaceutical product's cash flow to be received by the limited partnership | 84.00% | ||
Income (loss) from equity method investments | $ 1,659 | $ 1,551 | |
Proceeds from equity method investment, dividends or distributions | 1,910 | 1,855 | |
Payments to noncontrolling interests | 977 | 974 | |
Minimum Interest [Member] | |||
Percent of pharmaceutical product's cash flow to be received by the limited partnership | 39.00% | ||
Non-controlling Interests in Consolidated Entities | |||
Investments in advance to affiliates, subsidiaries, associates, and joint ventures | $ 7,000 | ||
SWKHP Holdings [Member] | |||
Income (loss) from equity method investments | 800 | $ 800 | |
Proceeds from equity method investment, dividends or distributions | 1,900 | ||
Payments to noncontrolling interests | $ 1,000 | ||
SWKHP Holdings LP [Member] | |||
Investments in advance to affiliates, subsidiaries, associates, and joint ventures | 13,000 | ||
SWKHP Holdings GP [Member] | |||
Investments in advance to affiliates, subsidiaries, associates, and joint ventures | 6,000 | ||
Holmdel Pharmaceuticals LP [Member] | |||
Payments to acquire intangible assets | $ 13,000 | ||
Percentage of ownership by parent | 70.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - Loan Credit Agreement [Member] | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Dividend rate | 0.00% | 0.00% |
Risk-free rate | 1.20% | 1.40% |
Expected life (years) | 4 years 4 months 24 days | 5 years 4 months 24 days |
Expected volatility | 32.70% | 32.60% |
Related Party Transactions (D37
Related Party Transactions (Details Narartive) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Warrants and rights outstanding | $ 178 | $ 259 | |
Unrealized gain (loss) on derivatives | $ (30) | $ 371 | |
Interest expense | $ 381 | ||
Delayed Draw [Member] | |||
Number of securities called by warrants or rights (in shares) | 1,000,000 | ||
Exercise price of warrants or rights (in dollars per Share) | $ 13.875 | ||
Reduction in strike price | $ 13.48 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ in Thousands | Oct. 07, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2012 |
Options surrendered to pay exercise price | 31,250 | ||||
Net issuance of options were surrendered | 175,000 | 364,000 | |||
Quantity of securities issued (in shares) | 10,000 | ||||
Share-based compensation | $ 106 | $ 197 | |||
Reverse stock split | 1-for-100 reverse stock split of its common stock, immediately followed by a 10-for-1 forward stock split | ||||
Compensation for non-employee directors (in shares) | 6,150 | 33,660 | |||
Common stock issued in lieu of cash payments to non - employee director (in shares) | 32,595 | ||||
Allocated share-based compensation | $ 90 | $ 100 | |||
SWKHP Holdings GP [Member] | |||||
Investments in advance to affiliates, subsidiaries, associates, and joint ventures | $ 6,000 | ||||
SWKHP Holdings LP [Member] | |||||
Investments in advance to affiliates, subsidiaries, associates, and joint ventures | $ 13,000 | ||||
J Brett Pope [Member] | |||||
Vested stock options | 18,750 | ||||
Unvested stock options were forfeited | 156,250 | ||||
Options surrendered to pay exercise price | 14,751 | ||||
Net issuance of options were surrendered | 3,999 | ||||
2010 Stock Incentive Plan [Member] | |||||
Number of shares reserved for equity awards | 300 | ||||
Total unrecognized stock option expense, net of estimated forfeitures | $ 100 | ||||
Weighted average remaining period | 1 year 9 months 18 days |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 364,000 |
Options cancelled and retired | shares | (170,250) |
Options exercised | shares | (18,750) |
Options granted | shares | |
Outstanding at ending | shares | 175,000 |
Options vested and exercisable and expected to be vested and exercisable | shares | 175,000 |
Vested and exercisable at ending | shares | 31,250 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 12.05 |
Options cancelled and retired | $ / shares | 12.67 |
Options exercised | $ / shares | $ 8.30 |
Granted | $ / shares | |
Outstanding at ending | $ / shares | $ 11.39 |
Options vested and exercisable and expected to be vested and exercisable | $ / shares | 11.39 |
Vested and exercisable at ending | $ / shares | $ 10.46 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted-Average Remaining Term [Roll Forward] | |
Outstanding at beginning | 7 years 4 months 24 days |
Outstanding at ending | 7 years 4 months 24 days |
Options vested and exercisable and expected to be vested and exercisable | 7 years 4 months 24 days |
Vested and exercisable at ending | 7 years |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic value [Roll Forward] | |
Outstanding at beginning | $ | $ 420,000 |
Outstanding at ending | $ | 128,000 |
Options vested and exercisable and expected to be vested and exercisable | $ | 128,000 |
Vested and exercisable at ending | $ | $ 31,900 |
Stockholders' Equity (Details 1
Stockholders' Equity (Details 1) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Number outstanding (in Shares) | 175,000 | |
Weighted average remaining contractual life (In Years) | 7 years 4 months 24 days | |
Weighted average exercise price per share | $ 11.39 | $ 12.05 |
Number exercisable (in Shares) | 31,250 | |
Weighted average exercise price per hare | $ 10.46 | |
Exercise Price $8.30 [Member] | ||
Number outstanding (in Shares) | 75,000 | |
Weighted average remaining contractual life (In Years) | 6 years 1 month 6 days | |
Weighted average exercise price per share | $ 8.30 | |
Number exercisable (in Shares) | 18,750 | |
Weighted average exercise price per hare | $ 8.30 | |
Exercise Price $13.70 [Member] | ||
Number outstanding (in Shares) | 100,000 | |
Weighted average remaining contractual life (In Years) | 8 years 4 months 24 days | |
Weighted average exercise price per share | $ 13.70 | |
Number exercisable (in Shares) | 12,500 | |
Weighted average exercise price per hare | $ 13.70 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||
Beginning Balance | $ 4,299 | |
Add: Income attributable to non-controlling interests | 842 | $ 811 |
Less: Cash distribution to non-controlling interests | (977) | |
Ending Balance | $ 4,164 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Financial Assets: | ||
Warrant assets | $ 1,789 | $ 1,900 |
Marketable investments | 5,111 | 5,286 |
Financial Liabilities: | ||
Warrant liability | 178 | 259 |
Tribute Warrant [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Financial Assets: | ||
Warrant assets | 1,789 | 1,900 |
Marketable investments | 2,857 | 2,857 |
Financial Liabilities: | ||
Warrant liability | 178 | 259 |
Tribute Warrant [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Financial Assets: | ||
Marketable investments | 2,254 | 2,429 |
Warrant Liability [Member] | ||
Financial Liabilities: | ||
Warrant liability | 178 | 259 |
Marketable Securities [Member] | Tribute Warrant [Member] | ||
Financial Assets: | ||
Warrant assets | 1,789 | 1,900 |
Marketable investments | 5,111 | 5,286 |
Financial Liabilities: | ||
Warrant liability | $ 178 | $ 259 |
Fair Value Measurements (Deta43
Fair Value Measurements (Details 1) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Fair value - December 31, 2015 | $ 1,900 |
Fair value - March 31, 2016 | 1,789 |
Tribute Warrant [Member] | |
Fair value - December 31, 2015 | $ 1,900 |
Issuances | |
Transfers | |
Change in fair value | $ (111) |
Fair value - March 31, 2016 | 1,789 |
Warrent Liability [Member] | |
Fair value - December 31, 2015 | $ 259 |
Issuances | |
Change in fair value | $ (81) |
Fair value - March 31, 2016 | $ 178 |
Fair Value Measurements (Deta44
Fair Value Measurements (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Financial Assets | ||||
Cash and restricted cash | $ 61,194 | $ 47,287 | $ 59,487 | $ 58,728 |
Cash and restricted cash at fair value | 61,194 | 47,287 | ||
Finance receivables | 89,455 | 99,346 | ||
Finance receivables at fair value | 89,455 | 99,346 | ||
Marketable investments | 5,111 | 5,286 | ||
Marketable investments at fair value | 5,111 | 5,286 | ||
Warrant assets | 1,789 | 1,900 | ||
Warrant assets at fair value | 1,789 | 1,900 | ||
Financial Liabilities | ||||
Warrant liability | 178 | 259 | ||
Gross liability at fair value | 178 | 259 | ||
Fair Value, Inputs, Level 3 [Member] | ||||
Financial Assets | ||||
Finance receivables at fair value | 89,455 | 99,346 | ||
Marketable investments at fair value | 2,857 | 2,857 | ||
Warrant assets at fair value | 1,789 | 1,900 | ||
Financial Liabilities | ||||
Gross liability at fair value | 178 | 259 | ||
Fair Value, Inputs, Level 1 [Member] | ||||
Financial Assets | ||||
Cash and restricted cash at fair value | 61,194 | 47,287 | ||
Marketable investments at fair value | $ 2,254 | $ 2,429 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] $ in Thousands | May. 05, 2016USD ($) |
Thermedex, LLC [Member] | First Lien Synthetic Royalty Term Loan [Member] | |
Loan carrying value | $ 3,500 |
Payments to acquire financial receivable | 2,500 |
Additional drawn upon achieving operational benchmarks | $ 1,000 |
Description of loan repayment | The term loan is repaid by a tiered revenue interest that is charged on quarterly net sales and royalties until such time as the lenders receive a 2.0x cash on cash return. |
BTG [Member] | Galil Medical Group [Member] | |
Payments to acquire business | $ 84,500 |
Future milestone payment to acquire business | $ 25,500 |