SWK Holdings Corp Q1 FY2023 earnings call

• Implemented CECL, resulting in an $11.8 million allowance for credit losses. - Gross total investment assets increased to $250 million. - Enteris subsidiary's operating expenses reduced. - Repurchased 28,766 shares, with Board set to approve new 10b5 program.

Financial segment non-GAAP net income totaled $7.3 million, representing a 12% annualized return on tangible finance book value. Gross total investment assets reached an all-time high of $250 million. Portfolio effective yield was 15.5%. Pharmaceutical Development segment revenue decreased. Enteris subsidiary's operating expenses declined from $2.6 million in fourth quarter 2022 to $1.4 million in first quarter 2023.

• Finance Receivables revenue expected to be comparable to Q1 2023 in next 3 quarters. - Pursuing balance sheet capital to deploy into attractive loan opportunities once additional capital is secured.

• Market conditions affecting companies raising capital. - Uncertainty regarding timing of additional balance sheet capital.

Q: Just wanted to clarify how are you doing kind of low loss reserves previous where you haircutting specific loans? Or is there a different way that you're accomplishing the same thing?

A: Historically, we've been impairing or reserving against specific loans or royalties once a loss is anticipated. Now we have a general reserve applied to the entire portfolio.

Q: How do you kind of view or prepare for the possible new regime in the market for companies raising capital since it often appears that your kind of that bridge until they get that next set of financing?

A: We identify differentiated life science product companies, bridge them to cash flow breakeven. Trying to get out in front of near-term capital needs, looking for runways 18 months plus.

Q: You had mentioned a possible increase in cost just for the second quarter for Enteris. Do you have like an approximate range about what that might be?

A: It won't be that much, hundreds of thousands of dollars, including one-timers, severance, retention, and strategic process costs.