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 UNITED
STATES

 SECURITIES AND EXCHANGE
COMMISSION

 Washington, D.C.
20549

 FORM 10-K

 (Mark One)

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

 For the fiscal year
ended December 31, 2023

 OR

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

 Commission file number:
 001-39184

 SWK HOLDINGS CORPORATION

 (Exact Name
of Registrant as Specified in its Charter)

 Delaware

 77-0435679

 (State
 or Other Jurisdiction of Incorporation or Organization)

 (I.R.S.
 Employer Identification No.)

 5956 Sherry Lane, Suite 650

 Dallas,
 TX

 75225

 (Address
 of Principal Executive Offices)

 (Zip
 Code)

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

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

 Title of Each
 Class

 Trading Symbol(s)

 Name of Each
 Exchange on Which Registered

 Common Stock, par value $0.001 per share

 SWKH

 The Nasdaq Stock Market LLC

 9.00% Senior Notes due 2027

 SWKHL

 The Nasdaq Stock Market LLC

 Securities registered
pursuant to Section 12(g) of the Act: None

if the Registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the Registrant
is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

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

whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit
such files). Yes No

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

 Large
 accelerated filer

 Accelerated
 filer

 Non-accelerated Filer

 Smaller reporting
 company x

 Emerging
 growth company

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

whether the Registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared
or issued its audit report.

 If securities are registered
pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements.

whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by
any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).

whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No

 The aggregate market value of the common equity held by non-affiliates of
the Registrant on June 30, 2023 was $ 58,133,885 based on the June 30, 2023 closing price of the Registrants Common Stock on such date
as reported on The Nasdaq Stock Market of $16.74 per share.

 O n
March 14, 2024, the Registrant had outstanding approximately 12,497,109
 shares of Common Stock, $0.001 par value per share.

 DOCUMENTS
INCORPORATED BY REFERENCE

 DOCUMENT

 PART
 OF FORM 10-K

 Portions
 of Definitive Proxy Statement for the 2024 Annual Meeting of Shareholders to be filed no later than 120 days after the end
 of the Registrant's fiscal year ended December 31, 2023

 PART
 III

 SWK Holdings Corporation

 Form 10-K

 For the Fiscal
Year Ended December 31, 2023

 Page

 PART I.

 Item 1

 Business

 Item 1A

 Risk
 Factors

 Item 1B

 Unresolved
 Staff Comments

 Item 1C

 Cybersecurity

 Item

 Properties

 Item

 Legal
 Proceedings

 Item

 Mine
 Safety Disclosures

 PART II.

 Item

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item

 Reserved

 Item

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A

 Quantitative
 and Qualitative Disclosures about Market Risk

 Item

 Financial
 Statements and Supplementary Data

 Item

 Changes
 in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A

 Controls
 and Procedures

 Item 9B

 Other
 Information

 Item 9C

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspection

 PART III.

 Item 10

 Directors,
 Executive Officers and Corporate Governance

 Item 11

 Executive
 Compensation

 Item 12

 Security
 Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 Item 13

 Certain
 Relationships and Related Transactions, and Director Independence

 Item 14

 Principal
 Accountant Fees and Services

 PART IV.

 Item 15

 Exhibits
 and Financial Statement Schedules

 Item

 Form
 10-K Summary

 Signatures

 Special Note Regarding Forward-Looking
Statements.

 In
addition to historical information, this Annual Report on Form 10-K ("Annual Report") contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. From time to time, we may also provide oral or written forward-looking statements in other materials we release to the public.
Such forward-looking statements are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. The forward-looking
statements are not historical facts but rather are based on current expectations, estimates and projections about our business and industry,
and our beliefs and assumptions, and include, but are not limited to, statements under the heading "Management's Discussion
and Analysis of Financial Condition and Results of Operations." Words such as "anticipate," "believe,"
"could," "estimate," "expects," "intend," "may," "plan," "should,"
"will" and variations of these words and similar expressions identify forward-looking statements. These statements are not
guarantees of future performance and are subject to risks, uncertainties and other factors, many of which are beyond our control, are
difficult to predict and could cause actual results to differ materially (both favorably and unfavorably) from those expressed or forecasted
in the forward-looking statements.

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

 Trademarks, Trade Names and Service
Marks

 This
Annual Report contains certain trademarks, which are protected under applicable
intellectual property laws and are the Company's property. Solely for convenience, the Company's trademarks and trade names referred to
in this Annual Report may appear without the or TM symbol, but such references are not intended to indicate, in any way, that the
Company will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We own rights to
trademarks and service marks that we believe are necessary to conduct our business as currently operated. In the United States, we own
the Peptelligence and Ovarest trademarks. We also own trademarks in several foreign countries and may pursue registration of other trademarks.

 ITEM 1. BUSINESS

 Overview

 SWK
Holdings Corporation (the "Company," "we," or "us") was incorporated in July 1996 in California and
reincorporated in Delaware in September 1999. In July 2012, we commenced a strategy of building a specialty finance and asset management
business. In August 2019, we commenced a complementary strategy of building a pharmaceutical development, manufacturing and intellectual
property licensing business. Our operations comprise two reportable segments: "Finance Receivables" and "Pharmaceutical
Development." We evaluate and invest in a broad range of healthcare related companies and products with innovative intellectual
property, including the biotechnology, medical device, medical diagnostics and related tools, animal health and pharmaceutical industries
(collectively, "life science"). We allocate capital to each segment in order to generate income through the sales of life
science products by third parties and related earned income sources. We are headquartered in Dallas, Texas.

 Finance Receivables Segment

 Our
Finance Receivables segment strategy is to be a leading healthcare capital
provider by offering customized financing solutions to a broad range of life science companies, institutions and inventors. This segment
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. Our business
partners are primarily engaged in selling products that directly or indirectly treat diseases and/or improve the wellness of people or
animals, or they receive royalties paid on the sales of such products. For example, our biotechnology and pharmaceutical business partners
commercialize medicines that treat disease states, whereas our life science tools partners sell a wide variety of research instrumentation
to help other companies conduct clinical research. We have deploy our assets to earn interest, fees, and other income pursuant to this
strategy, and we continue to identify and review financing and similar opportunities on an ongoing basis with financial solutions that
are tailored to the individual needs of our business partners. In addition, through our wholly-owned subsidiary, SWK Advisors LLC, we
are able to provide non-discretionary investment advisory services to institutional clients in separately managed accounts to similarly
invest in life science finance. SWK Advisors LLC is registered as an investment advisor with the Texas State Securities Board. We intend
to fund transactions through our own working capital and our revolving credit facility, as well as by building our asset management business
by raising additional third-party capital.

 We
fill an underserved niche in the sub-$50 million transaction size market.
Since many of our competitors that provide non-traditional debt and/or royalty financings typically have greater financial resources than
us, they prioritize transaction sizes above $50 million. As such, we believe we face less competition in transactions that are less than
$50 million.

 As
of March 14, 2024, and since inception of the strategy, we and our partners have executed transactions with 55 different parties
under our specialty finance strategy, funding an aggregate of approximately $779.4 million in various financial products across the life
science sector. Our portfolio includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in
the life science sector, and purchased royalties generated by sales of life science products and related intellectual property.

 The
objective of our Finance Receivables segment is to maximize our portfolio total return in the context of a prudent level of risk, and
thus, increase our net income and book value by generating income from three sources:

 1.

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

 2.

 receiving interest and other income by advancing
 capital in the form of secured debt to companies in the life science sector; and

 3.

 to a lesser extent, realizing capital appreciation
 from equity-related investments in the life sciences sector.

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

 The
majority of our finance receivables transactions are structured similarly
to factoring transactions whereby we provide capital in exchange for an interest in an existing revenue stream. We primarily provide capital
to companies following the commercialization of a product, although in certain situations we consider pre-approval financings as well.
The existing revenue stream can take several forms, but is most commonly either a royalty derived from the sales of a life science product
marketed by a third party, such as a royalty paid to an inventor on the sales of a medicine, or from the commercialization by partner
company, such as a medical device company that directly sells its own products. Our structured debt investments may include warrants or
other features, giving us the potential to realize enhanced returns. Capital that we provide directly to our partners is generally used
for growth and general working capital purposes, as well as for acquisitions or recapitalizations in select cases. We generally fund the
full amount of transactions up to $25 million through our working capital.

 In
circumstances where a transaction is greater than $25 million, we typically seek to syndicate amounts in excess of $25 million to both
other investors and our investment advisory clients. We do not expect to earn investment advisory income in transactions where we partner
with investors other than our investment advisory clients.

 Although
we have partnered with investment advisory clients in the past, we currently do not have any transactions in which we have partnered
with investment advisory clients. We may seek to raise discretionary capital from similar investors in the future.

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

Development Segment

2019, we commenced our Pharmaceutical Development segment with the acquisition of Enteris BioPharma, Inc. ("Enteris"). Enteris is a clinical
development and manufacturing organization providing development services to pharmaceutical partners as well as innovative formulation
solutions built around its proprietary oral drug delivery technologies, the Peptelligence platform. We seek to generate income by providing
customers pharmaceutical development, formulation and manufacturing services as well as licensing its internally developed intellectual
property. With an effective date of January 1, 2024, we entered into an Option and Asset Purchase Agreement with AptarGroup, Inc. ("Aptar")
on March 14, 2024 which granted Aptar an exclusive option to acquire certain of Enteris' assets related to its business of providing
good manufacturing practice (GMP) manufacturing and clinical supply services through Phase 1 and 2 to third parties, subject to certain
exclusions. Aptar must exercise the option by or before January 1, 2026.

 Competition

 In
our Finance Receivables segment, we face competition in the pursuit of
outside investors, investment management clients and opportunities to deploy our capital in attractive healthcare related companies. Our
primary competitors provide financing to prospective companies and include non-bank financial institutions, federal or state chartered
banks, venture debt funds, venture capital funds, private equity funds, pharmaceutical royalty and other investment funds, business development
companies and investment banks. Many of these entities have greater financial and managerial resources than we have. Some of these competitors
may also have a lower cost of capital and access to funding sources that are not available to us, which may create a competitive disadvantage
for us. As a result, we tend not to compete on price, but instead focus on our industry experience, flexible financing options and speed
to evaluate and complete a transaction. In addition, since many of our competitors that provide non-traditional debt and/or royalty financing
have greater financial resources than us, they prioritize transaction sizes above $50 million. As such, we believe we face less competition
in transactions that are less than $50 million.

 In
our Pharmaceutical Development segment, we face competition in providing clinical development and manufacturing services. We also face
competition in introducing products that improve efficacy, safety, patients' and clinicians' ease of use and cost-effectiveness.
The success of new product offerings will depend on many factors, including our ability to properly anticipate and satisfy customer needs,
obtain regulatory approvals on a timely basis, develop and manufacture products in an economic and timely manner, obtain or maintain
advantageous positions with respect to intellectual property, and differentiate products from competitors.

 For
additional information concerning the competitive risks we face, see Item 1A., Risk Factors.

 Governmental
Regulation

 For
additional information concerning the effect of existing or probable government regulation on our business, see Item 1A., Risk Factors.

 Human Capital Resources

 As
of December 31, 2023, we had 23 employees, all of whom are full-time. None of our employees are represented by a labor union, and
we consider our employee relations to be good.

 Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. We regularly evaluate our compensation programs and utilize industry benchmarking in an effort to ensure competitiveness compared to similar companies with which we compete for talent, as well as fair and equitable treatment across our workforce with respect to gender, race, and other personal characteristics.

 We are an equal opportunity employer and we maintain policies that prohibit unlawful discrimination based on race, color, religion, gender, sexual orientation, gender identity/expression, national origin/ancestry, age, disability, marital and veteran status.

 Additional Information

 We
file annual, quarterly and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as
amended (the "Exchange Act''), with the Securities and Exchange Commission ("SEC"). Our SEC filings are
available to the public from the SEC's internet site at

 Our
internet site is  We will make available free of charge through our website in the "Investor Relations -
SEC Filings" section our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements
and Forms 3, 4 and 5 filed on behalf of directors and executive officers and any amendments to those reports filed or furnished pursuant
to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Also,
posted on our website in the "Investor Relations - Corporate Governance" section are charters for our Audit Committee, Compensation
Committee and Governance and Nominating Committee as well as our Code of Ethics and Insider Trading Policy governing our directors, officers
and employees. Information on or accessible through our website is not a part of, and is not incorporated into, this Annual Report.

 ITEM 1A. RISK FACTORS

 An
investment in our common stock involves significant risks. You should carefully consider the risks and uncertainties and the risk factors
set forth in the documents and reports filed with the SEC and the risks described below before you make an investment decision regarding
our common stock. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our
business operations.

 Risks Related to
Finance Receivables Segment

 We may suffer
losses on our principal invested in credit and royalty transactions.

 Most
of the assets of our Finance Receivables segment are, and are expected to continue to be, royalty streams or debt backed by royalty streams
or revenue interests paid by small and middle-market life science businesses, which are highly speculative and involve a high degree
of risk of credit loss. In addition, we own royalties or invest in debt backed by royalties or revenue interests that are derived by
pharmaceutical and biologic products that are early in their commercial launch, face intense competition or are subject to other risks,
which similarly involve a high degree of risk of principal loss. If the underlying products do not generate anticipated revenues, we
may suffer a loss of our investment.

 In
addition, the small and middle-market companies that we target to advance debt are subject to a number of other significant risks,
including:

 these
 companies may have limited financial resources and may be unable to meet their obligations
 under their financial instruments that we hold, which may be accompanied by a deterioration
 in the value of their assets or of any collateral with respect to any financial obligations
 and a reduction in the likelihood of our realization of any guarantees we may have obtained
 in connection with our investment;

 they
 may have shorter operating histories, narrower product lines and smaller market shares than
 larger businesses, which tend to render them more vulnerable to competitors'
 actions and market conditions, as well as general economic downturns;

 they
 are more likely to depend on the management talents and efforts of a small group of persons;
 therefore, the death, disability, resignation or termination of one or more of these persons
 could have a material adverse impact on our partner company, and in turn, on us;

 they
 may have less predictable operating results, may from time to time be parties to litigation,
 may be engaged in changing businesses with products subject to a risk of obsolescence and
 may require substantial additional capital to support their operations, finance expansion
 or maintain their competitive position;

 they
 operate in the life science industry, which is both highly competitive and subject to extensive
 regulatory oversight, and their products may be recalled or displaced by new products, or
 they may lose regulatory approval altogether;

 changes
 in laws and regulations, as well as their interpretations, may adversely affect their business,
 financial structure or prospects; and

 they
 may have difficulty accessing capital markets to meet future capital needs.

 Under
circumstances where a partner company does not achieve commercial success or achieves lower sales than we anticipate, and the partner
company requires additional capital that other stakeholders are not willing or are otherwise unable to provide, we may determine it is
in our best interest to advance additional capital to such partner company in order to preserve the partner company's collateral
value and protect our investment. Any additional capital that we decide to advance would be subject to additional risk. We could
lose all of any additional investment. The realization of any of these risks may materially impact our business, financial condition,
results of operations, liquidity and cash flows.

 We operate in a highly competitive
market for investment opportunities.

 A
large number of entities compete with us to advance capital to the companies our Finance Receivables segment targets. We compete with
non-bank financial institutions, federal or state chartered banks, venture debt funds, venture capital funds, private equity funds, pharmaceutical
royalty and other investment funds, business development companies, and investment banks. Additionally, because competition for investment
opportunities generally has increased among alternative investment vehicles, particularly those seeking yield investments, such as hedge
funds, those entities have begun to invest in areas they have not traditionally invested in, including investments in royalties and debt
backed by royalties, which may overlap with our business strategy. As a result of these new entrants, competition for investment opportunities
in our target markets has intensified, which is a trend we expect to continue.

 Many
of our Finance Receivables segment's existing and potential competitors are substantially larger and have considerably greater
financial, technical and marketing resources than we do. For example, some competitors may have a lower cost of funds and access to funding
sources that are not available to us. In addition, some of our competitors may have higher risk tolerances or different risk assessments,
which could allow them to consider a wider variety of investments and establish more or deeper relationships with potential business
partners than us. Furthermore, many of our competitors are not subject to the maintenance of an exception or exemption from regulation
as an investment company, which may allow them more flexibility in advancing capital to companies we may also target, such as advancing
debt capital that is not repaid by royalty streams or revenue interests. We cannot assure you that the competitive pressures we face
will not have a material adverse effect on our business, financial condition and results of operations. Also, as a result of existing
and increasing competition and our competitors' ability to provide a total financing package solution, inclusive of both debt and
equity capital, we may not be able to take advantage of attractive business opportunities from time to time, and we can offer no assurance
that we will be able to identify and make investments that are consistent with our business objectives.

 In
addition, we do not seek to compete primarily based on the cost of the capital that we provide, and we believe that some of our competitors
provide capital at rates that are comparable to or lower than the rates we offer. We may lose business opportunities if we do not match
our competitors' pricing, terms and structure. If we match our competitors' pricing, terms and structure, we may experience
decreased net interest and royalty income and increased risk of credit loss.

 Healthcare and
life science industries are subject to extensive government regulation, litigation risk, reimbursement risk and certain other risks particular
to those industries.

 We
have invested and plan to continue investing in cash flow streams produced by life science products that are subject to extensive regulation
by the Food and Drug Administration ("FDA"), similar foreign regulatory authorities, and to a lesser extent, other
federal and state agencies. If any of these products and the companies which manage such products fails to comply with applicable regulations,
they could be subject to significant penalties and claims that could materially and adversely affect their sales levels and operations.
Medical devices and drugs are subject to the expense, delay and uncertainty of the regulatory approval process in order to reach the
market and, even if approved, these products may not be accepted in the marketplace. In addition, governmental budgetary constraints
affecting the regulatory approval process, new laws, regulations or judicial interpretations of existing laws and regulations
might adversely affect a partner company or product in this industry.

 The
products and services provided by pharmaceutical, medical device and diagnostics companies are generally subject to the ability to obtain
and maintain adequate reimbursement from governmental and other third-party payors for such products and services. The commercial success
of such products and services could be compromised if governmental or third-party payors do not provide coverage and reimbursement, breach,
rescind or modify their contracts or reimbursement policies or delay payments for such products and services.

 Companies
in the life science industry may also have a limited number of suppliers of necessary components or a limited number of manufacturers
for their products, and therefore face a risk of disruption to their manufacturing process if they are unable to find alternative suppliers
when needed.

 Any
of these factors could materially and adversely affect the operations of a partner company, which in turn, would impair our ability to
timely collect principal and interest payments owed to us or decrease our royalty-related income.

 The pharmaceutical
industry is subject to numerous risks, including competition, extensive government regulation, product liability, patent exclusivity
and commercial difficulties.

 Our
assets include royalties and royalty-linked debt that are paid on sales of pharmaceutical products, which are subject to numerous risks.
The successful and timely implementation of the business model of our specialty pharmaceutical and drug discovery partner companies depends
on their ability to adapt to changing technologies and introduce new products. As competitors continue to introduce competitive products,
the ability of our partner companies to continue effectively marketing their existing product portfolio, and to develop and acquire innovative
products and technologies that improve efficacy, safety, patients' and clinicians' ease of use and cost-effectiveness is
important to the success of such partner companies. The success of new product offerings will depend on many factors, including the ability
to properly anticipate and satisfy customer needs, obtain regulatory approvals on a timely basis, develop and manufacture products in
an economical and timely manner, obtain or maintain advantageous positions with respect to intellectual property, and differentiate
products from competitors. Failure by our partner companies to successfully commercialize existing or planned products, or acquire other
new products, could have a material adverse effect on our business, financial condition and results of operations. In addition, the ability
of generic manufactures to invalidate a partner company's patents protecting its products or to invalidate the patents supporting
products in which we receive royalty-related income could have a material adverse effect on our business.

 Our business,
financial condition, results of operations, liquidity and cash flows depend on the accuracy of our management's assumptions and
estimates, and we could experience significant gains or losses if these assumptions and estimates differ significantly from actual results.

 We
make and rely on certain assumptions and estimates regarding many matters related to our businesses, including valuations, interest rates,
investment returns, expenses, operating costs and tax liabilities. We also use these assumptions and estimates to make decisions crucial
to our business operations. Similarly, our management teams make similar assumptions and estimates in planning and measuring the performance
of our Finance Receivables segment. In addition, certain investments and other assets and liabilities of our Finance Receivables segment
must be, or at our election are, measured at fair value, the determination of which involves the use of various assumptions and estimates
and considerable judgment. The factors influencing these various assumptions and estimates cannot be calculated or predicted with certainty,
and if our assumptions and estimates differ significantly from actual outcomes and results, our business, financial condition, results
of operations, liquidity and cash flows may be materially and adversely affected.

 We generally do not control our partner
companies.

 We
generally only hold royalties, debt backed by royalties, and revenue interests that are issued by our partner companies. As such, we
do not, and do not expect to, control any of our partner companies, even though we may have board representation or board observation
rights, and the debt agreements may contain certain restrictive covenants that limit the business and operations of our partner companies.
As a result, we are subject to the risk that a partner company may make business decisions with which we disagree, and the management
of such company may take risks or otherwise act in ways that do not serve our interests. These business decisions or risks may lead to
adverse business or financial consequences for our partner companies, which in turn could adversely affect the performance of our Finance
Receivables segment.

 If we make investments
in unsecured debt backed by royalties or revenue interests, those investments might not generate sufficient cash flow to service our
debt obligations.

 We
may make investments in unsecured debt backed by royalties or revenue interests. Unsecured investments may be subordinated to other obligations
of the obligor. Unsecured investments often reflect a greater possibility that adverse changes in the financial condition of the obligor
or general economic conditions (including, for example, a substantial period of rising interest rates, inflation or declining earnings)
or both may impair the ability of the obligor to make payment of principal and interest. If we make an unsecured investment in a partner
company, that partner company may be highly leveraged, and its relatively high debt-to-equity ratio may increase the risk that its operations
might not generate sufficient cash to service its debt obligations. In such cases we would not have any collateral to help secure repayment
of the obligations owed to us.

 Adverse developments
affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial
institutions or transactional counterparties, could adversely affect our business, financial condition or results of operations, or those
of the companies in our portfolio, which in turn could adversely impact the performance of our Finance Receivables segment.

 Events
involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional
counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors
about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
For instance, on March 10, 2023, Silicon Valley Bank ("SVB") was closed by the California Department of Financial
Protection and Innovation, which appointed the Federal Deposit Insurance Corporation ("FDIC") as receiver. Similarly, on
March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although we assess our banking and customer
relationships as we believe necessary or appropriate, our access to funding sources and other credit arrangements in amounts adequate
to finance or capitalize our current and projected future business operations could be significantly impaired by factors that affect
us, the financial services industry or economy in general. These factors could include, among others, events such as liquidity constraints
or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions
or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for
companies in the financial services industry.

 In
addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing
terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit
and liquidity sources, thereby making it more difficult for us to acquire financing on acceptable terms or at all. Any decline in available
funding or access to our cash and liquidity resources could, among other risks, adversely impact our ability to meet our operating expenses,
financial obligations or fulfill our other obligations, result in breaches of our contractual obligations or result in violations of
federal or state wage and hour laws. Any of these impacts, or any other impacts resulting from the factors described above or other related
or similar factors not described above, could have material adverse impacts on our liquidity and our business, financial condition or
results of operations.

 Further,
the performance of our Finance Receivables segment is substantially dependent upon the underlying performance of the companies in our
portfolio, each of which is subject to the risks and factors discussed above. To the extent these companies are adversely impacted by
developments in the financial services industry, the performance of our Finance Receivables segment would also be adversely impacted.

 We may have limited access to information
about privately-held royalty streams and companies in which we invest.

 We
invest primarily in privately-held royalties and debt backed by royalties or revenue interests issued by private companies. Generally,
little public information exists about these royalty streams and private companies, and we are required to rely on the ability of our
senior management to obtain adequate information to evaluate the potential returns from investing in these assets. If we are unable to
uncover all material information about these assets, we may not make a fully informed investment decision, and we may lose money on our
investment.

 Prepayments of our debt investments
by our partner companies could adversely impact our results of operations and reduce our return on equity.

 We
are subject to the risk that the debt we advance to our partner companies may be repaid prior to maturity. When this occurs, we will
generally reinvest these proceeds in temporary investments, pending their future investment in new royalties or debt repaid by royalties
or revenue interests issued by partner companies. These temporary investments will typically have substantially lower yields than the
debt that was prepaid and we could experience significant delays in reinvesting these amounts. Any future asset may also have lower yields
than the debt that was repaid. As a result, our results of operations could be materially adversely affected if one or more of our partner
companies elect to prepay amounts owed to us. Additionally, prepayments could negatively impact our return on equity, which could result
in a decline in the market price of our common stock.

 We may not be able to complete transactions
without co-investments from third parties.

 We
may co-invest with third parties through our registered investment advisory business or otherwise. In certain circumstances, we may not
be able to fund transactions without the participation of such third parties. In the event that we are unable to find suitable third
parties to co-invest with us or if such third party fails to close, we may not be able to invest in an otherwise attractive opportunity,
which could materially impact our results of operations.

 Our quarterly and annual operating
results are subject to fluctuation as a result of the nature of our business, and if we fail to achieve our investment objective, the
market price of our common stock may decline.

 We
could experience fluctuations in our quarterly and annual operating results due to a number of factors, some of which are beyond our
control, including, but not limited to, the interest rate payable on the debt assets that we acquire, the default rate on such assets,
the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, changes in our
partner composition, the degree to which we encounter competition in our markets, market volatility in our publicly traded securities
and the securities of our partner companies, and general economic conditions. As a result of these factors, results for any period should
not be relied upon as being indicative of performance in future periods. In addition, any of these factors could negatively impact our
ability to achieve our business objectives, which may cause the market price of our common stock to decline.

 Our investments in royalty-related
transactions depend on third parties to market royalty-generating products.

 Generally,
royalties and the royalty-related income we expect to receive in the future will directly or
indirectly depend upon the marketing efforts of third parties, particularly large pharmaceutical companies that license the right to
manufacture and sell products from technology innovators in exchange for royalty payments from the licensees to the licensors, with whom
we may transact. These licensees may be motivated to maximize income by allocating resources to other products, and in the future, may
decide to focus less attention on the products that pay royalties in which we have an economic interest. In addition, there can be no
assurance that any of the licensees have adequate resources and motivation to continue to produce, market and sell such products
in which we have a royalty-related interest. Moreover, the license agreement creating the right to receive royalties may not have specific
sales targets, and the licensee typically has exclusive or substantial discretion in determining its marketing plans and efforts. As
a result, the licensee may not be restricted from abandoning a licensed product or from developing or selling a competitive product.
In addition, in the event that a license expires or is terminated, we would be dependent upon the licensor of the license to find another
marketing partner. There can be no assurance that another licensee could be found on favorable terms, or at all, or that the licensor
will be able to assume marketing, sales and distribution responsibility for its own account. These factors may materially adversely affect
any of our future royalty-related assets.

 Aside
from any limited audit rights relating to the activities of the licensees that we may have in certain circumstances, we do not have the
rights or ability to manage the operations of the licensees. Poor management of operations by the licensees could adversely affect the
sales of products in which we have a royalty interest, and the payment of royalty-related income to us. In addition, we have limited
information on the licensees' operations. While we may be able to receive certain information relating to sales of the product
in which we have a royalty-related interest through the exercise of the audit rights and review of royalty reports, we may not have the
right to review or receive certain information relating to the marketed products, including the results of any studies conducted by the
licensees or others or complaints from doctors or users of such products, that the licensees may have and that may impact sales levels.
The market performance of such products, therefore, may be diminished by any number of factors relating to the licensees that are beyond
our control.

 Our Finance Receivables
segment has a limited number of assets, which subjects our aggregate returns, and the value of our common stock, to a greater risk of
significant loss if any of our debt securities declines in value or if any of our royalty investments substantially underperforms our
expectations.

 Our
Finance Receivables segment's total investment in companies may be significant, individually or in the aggregate. A consequence
of our limited number of assets in our Finance Receivables segment is that the aggregate returns we realize may be significantly adversely
affected if one or more of our significant partner company investments perform poorly or if we need to write down the value of any one
significant investment, which may be more severe than if we had made smaller investments in more companies. Our financial results could
be materially adversely affected if these partner companies or any of our other significant partner companies encounter financial difficulty
and fail to repay their obligations or to perform as expected.

 Our allowance
for credit losses may prove inadequate.

 The
quality of our debt receivables depends on the credit-worthiness of our borrowers and their ability to fulfill their obligations to us.
We maintain an allowance for credit losses on specific finance receivables to provide for credit defaults and non-performance. The amount
of our allowance reflects management's judgment of losses inherent in the portfolio. However, the economic environment is dynamic,
and our portfolio credit quality could decline in the future.

 Our
allowance for credit losses may not keep pace with changes in the credit-worthiness of our partner companies or in collateral values.
If the credit quality of our partner companies declines, if the risk profile of a market, industry, or group of partner companies changes
significantly, or if the markets for finance receivables or other collateral deteriorates significantly, our allowance for credit losses
may prove inadequate, which could have a material adverse effect on our business, results of operations, and financial condition.

 The interest
rates of some of our term loans to partner companies are priced using a spread over LIBOR.

 We
have used U.S. dollar London Interbank Offered Rate ("LIBOR") as a reference rate in term loans we extend to partner companies
such that the interest due to us pursuant to a term loan extended to a partner company is calculated using LIBOR. Most of our term loan
agreements with partner companies contain a stated minimum value for the reference rate. As of December 31, 2023, approximatel y
18% of term loans with our partner companies utilized LIBOR, including a stated minimum of LIBOR, as a reference
rate.

 On
June 30, 2023, the United Kingdom's Financial Conduct Authority and the administrator
of LIBOR ceased the publication of the most commonly used LIBOR settings. The publication of all other LIBOR settings ceased to be published as of December 31, 2021. The bank
regulatory agencies indicated that entering into new contracts that use LIBOR as a reference rate after December 31, 2021, would create
safety and soundness risks and that they would examine bank practices accordingly. The Adjustable Interest Rate (LIBOR) Act, enacted
in March 2022, provides a statutory framework to replace U.S. dollar LIBOR with a benchmark rate based on the Secured Overnight Financing
Rate ("SOFR") for contracts governed by U.S. law that have no or ineffective fallback, and in December 2022, the Federal
Reserve Board adopted related implementing rules.

 SOFR
is observed and backward looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking
rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government
securities, it is a rate that does not take into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to be
lower than LIBOR and is less likely to correlate with the funding costs of financial institutions. While SOFR has been adopted in select
product areas it has not achieved full implementation as an alternative reference rate. At this time, it is not possible to predict how
markets will respond to alternative reference rates as markets continue to transition away from LIBOR. Furthermore, because of the complexity
of the transition from LIBOR, at this time, it is not possible to predict what rate or rates may become accepted alternatives to LIBOR,
or what the effect of any such changes in views or alternatives may be on the value of LIBOR-based securities and variable rate loans
or other securities or financial arrangements.

 The
transition from LIBOR could create considerable costs and additional risk. We cannot predict whether or when LIBOR will actually cease
to be available. If LIBOR ceases to exist, we may need to renegotiate the credit agreements with our partner companies that utilize LIBOR
as a factor in determining the interest rate to replace LIBOR with the new standard that is established. Our term loans typically contain
provisions to facilitate the transition to such new standard. If affected credit agreements with our partner companies are unable to
be renegotiated, our investments may bear interest at a lower rate, subject to any contractual minimum LIBOR floors, which would decrease
investment income and potentially the value of such investments. In addition, any further changes or reforms to the determination or
supervision of LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR, which could have an adverse impact on
the market value for or value of any LIBOR-linked loans and other financial obligations or extensions of credit held by or due to us
and could have a material adverse effect on our business, financial condition and results of operations. Due to the uncertainty of the
replacement for LIBOR, the potential effect of any such event on our cost of capital and investment income cannot yet be determined.

 A rise in the
reference rates could have an adverse impact on the ability of our partner companies to service their debt obligations to us.

 Many
of our debt transactions contain reference rate-based floating interest rates with minimum reference rate floors. The minimum reference
rate floor insulates partner companies from an increase in the reference rate until the reference rate reaches the minimum floor threshold.
If the reference rate increases above the floor rate, the net effect will be an increase in the interest cost to the borrower. Most of
our borrower partners do not hedge their reference rate exposure, and as a result of an increase of reference rate above the minimum
floor threshold, they will experience an increase in the effective interest rate of their debt obligations to us. If the reference rate
increases materially, the increased cost of debt service will similarly increase materially. If our partner companies are not adequately
capitalized or are unable to generate sufficient income from operations, the increased debt burden caused by increased referenced rates
could materially and adversely affect the operations of a partner company, which in turn, would impair our ability to timely collect
principal and interest payments owed to us.

 Fluctuations
in the price of our publicly traded equity holdings and the price at which we sell such holdings may affect the price of our common stock.

 Our
Finance Receivables segment generally holds equity interests in companies that are publicly traded. Fluctuations in the market prices
of our publicly traded equity holdings may affect the price of our common stock. Historically, the market prices of our publicly traded
holdings have been highly volatile and subject to fluctuations unrelated or disproportionate to operating performance.

 In
addition, we may be unable to sell our holdings of public equities at then-quoted market prices. The trading volume and public float
of the common stock of a publicly traded partner company may be small relative to our holdings. As a result, any significant open-market
divestiture by us of our holdings in such a partner company, if possible at all, would likely have a material adverse effect on the market
price of its common stock and on our proceeds from such a divestiture. Also, registration and other requirements under applicable securities
laws and contractual restrictions also may adversely affect our ability to dispose of our partner company holdings on a timely basis.

 Our financial
condition and results of operations will depend on our ability to manage future growth of our Finance Receivables segment effectively.

 Our
ability to achieve our business objectives depends on our ability to grow, which depends, in turn, on our Finance Receivables segment's
ability to continue to identify, analyze and invest in royalties and/or debt backed by royalties or revenue interests that meet our investment
criteria. Accomplishing this result on a cost-effective basis is largely a function of our structuring of transactions and our access
to financing on acceptable terms. As we continue to grow, we will need to continue to hire, train, supervise and manage new employees.
Failure to manage our future growth effectively could have a material adverse effect on our business, financial condition and results
of operations.

 Risks Related to
Pharmaceutical Development Segment

licensees may not be successful in efforts to develop products for many years, if ever.

success depends on its licensees' ability to commercialize their products that will generate revenues sufficient to sustain and
grow Enteris' operations. Enteris has determined that it will not pursue clinical development of our product candidates. Enteris'
potential licensee may never develop and commercialize any other peptide or small molecule product that helps us achieve profitability
and growth. Even if Enteris' licensee is successful in developing such a product, it is likely that development of any product
will take several years. Enteris' ability to achieve growth is dependent on a number of factors, including Enteris' licensees'
ability to complete development efforts and obtain regulatory approval for additional product candidates.

licensees may not be successful in their efforts to gain regulatory approval for any of their product candidates and, if approved, the
approval may not be on a timely basis.

 Even
if Enteris' licensees are successful in their development efforts, they may not be able to obtain the necessary regulatory approval
for their product candidates. The FDA must approve the commercial manufacture and sale of pharmaceutical products in the United States.
Similar regulatory approvals are required for the sale of pharmaceutical products outside of the United States. None of Enteris'
partners' products have been approved for sale in the United States, and they may never receive the approvals necessary for commercialization.
Additional human testing must be conducted on our partners' product candidates before they can be approved for commercial sale
and such testing requires the investment of significant resources. Any delay in receiving, or failure to receive, these approvals would
adversely affect Enteris' ability to generate product revenues.

 Current and future
legislation may increase the difficulty and cost for Enteris or its partners to obtain marketing approval of and the commercialization
of their product candidates. This could affect the timing as well as the amount of royalty income Enteris may earn as a result.

 In
the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes
regarding the healthcare system that could prevent or delay marketing approval for Enteris' or its partners' product candidates,
restrict or regulate post-approval activities and affect our partners' ability to profitably sell their product candidates. Legislative
and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for pharmaceutical
products. We do not know whether additional legislative changes will be enacted, or whether FDA regulations, guidance or interpretations
of the FDA, or comparable foreign authorities, will be changed, or what the impact of such changes on the marketing approvals of our
partners' product candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA's approval
process may significantly delay or prevent marketing approval, as well as subject our partners to more stringent product labeling and
post-marketing testing and other requirements.

technology or products could give rise to product liability claims.

 While
Enteris does not have a commercial product, Enteris' business exposes us to the risk of product liability claims from human testing
and the manufacturing of pharmaceutical tablets currently used in clinical trials. The administration of drugs to humans, whether in
clinical trials or commercially, can result in product liability claims, even if Enteris' or Enteris' partners' products
are not actually at fault for causing an injury. Furthermore, Enteris' products may cause, or may appear to cause, adverse side
effects or potentially dangerous drug interactions that we may not learn about or understand fully until the drug is actually manufactured
and sold. Product liability claims can be expensive to defend and may result in large judgments against us. Even if a product liability
claim is not successful, the adverse publicity, time and expense involved in defending such a claim may interfere with our business.
We may not have sufficient resources to defend against or satisfy these claims. While we currently maintain product liability insurance
coverage, the amount of coverage may not be sufficient to protect us against losses or may be unavailable in the future on acceptable
terms, if at all.

 Because Enteris
is a biopharmaceutical company, its operations are subject to extensive government regulation.

 Our
research, development and production activities, as well as those of our collaborators and licensees, are subject to significant regulation
by federal, state, local and foreign governmental authorities. The regulatory approval process for a pharmaceutical product requires
substantial resources and may take many years. Our partners' inability to obtain approvals or delays in obtaining approvals would
adversely affect our ability to manufacture products, and to receive revenue from milestone payments, product sales or royalties. Enteris'
present and future business is, and will continue to be, subject to various other laws, rules and/or regulations applicable to us as
a result of our domestic and international business.

 The
FDA and other regulatory agencies may inspect the Enteris production facility at any time to ensure compliance with current good manufacturing
practice guidelines. These guidelines require that Enteris conduct its production operations in strict compliance with established rules
for manufacturing and quality controls. Any of these agencies can suspend production operations and product sales if they find significant
or repeated deviations from these guidelines. A suspension would likely cause Enteris to incur additional costs or delays in product
development and manufacturing.

success depends upon its ability to protect its intellectual property rights.

 Enteris
has filed applications for U.S. patents relating to proprietary formulation and manufacturing technology that Enteris has invented in
the course of its research. Enteris' most important U.S. manufacturing and drug delivery patents are scheduled to expire from 2024
to 2036, although Enteris has applications pending that could extend that protection. As of December 31, 2023, multiple U.S. patents
have been issued and other applications are pending. Enteris has also made patent application filings in selected foreign countries and
multiple foreign patents have issued with other applications pending. Enteris faces the risk that any of its pending applications will
not be issued as patents. In addition, Enteris' patents may be found to be invalid or unenforceable. Enteris' business also
is subject to the risk that its issued patents will not provide Enteris with significant competitive advantages if, for example, a competitor
were to independently develop or obtain similar or superior technologies. To the extent Enteris is unable to protect its patents and
patent applications, or similar or superior technologies are developed, our investment in our technologies may not yield the benefits
that we expect.

 If Enteris encounters
issues with its suppliers or if its licensees encounter issues with their contract manufacturers, Enteris may need to qualify alternative
manufacturers or suppliers, which could impair Enteris' and its licensees' ability to sufficiently and timely manufacture
and supply pharmaceutical products.

 Enteris
relies on third parties to supply the raw materials needed to manufacture its existing products, and expects to rely on third parties
to supply raw materials for potential future products, including suppliers that are located in Asia. Enteris is undertaking efforts to
validate alternate suppliers, but may be unsuccessful in these efforts. Current licensees of Enteris' technology generally rely,
and future licensees are expected to rely, on third party suppliers and contract manufacturers to manufacture drug products that utilize
Enteris' technology as well.

 Any
business interruptions resulting from geopolitical actions, including war and terrorism, adverse public health developments such as COVID-19,
or natural disasters including earthquakes, typhoons, floods and fires, and Enteris' or its licensees' inability to identify
and validate alternate suppliers and contract manufacturers, could further affect supply chains. Any reliance on suppliers may involve
several risks, including a potential inability to obtain critical materials and reduced control over production costs, delivery schedules,
reliability and quality.

 Any
unanticipated disruption caused by problems with suppliers could delay shipment of any of Enteris' or its licensees' drug
candidates or drug products, which could increase Enteris' or its licensees' cost of goods sold or result in lost or decreased
sales, royalties or milestone payments to Enteris.

production facilities have been impacted by COVID-19 and global supply chain constraints, and any future impacts might adversely affect
its operations and financial condition.

 Enteris
experienced a reduction in its productivity as well as delays in receiving some of its needed supplies as a direct result of COVID-19
and the impact it had on key vendors and the global supply chain. Enteris could experience similar delays in the future due to the impact
of governmental restrictions and other impacts of COVID-19 on its vendors, and on the success of efforts to reduce constraints and delays
in the global supply chain. Any further reductions or delays may result in business disruption and reduced revenues, any of which could
materially affect our business, financial condition and results of operations.

 We
are continuously monitoring our own operations and intend to continue to take appropriate actions to mitigate the risks arising from
the COVID-19 pandemic and global supply chain constraints, but there can be no assurances that we will be successful in doing so. We
are taking precautions to protect the safety and well-being of Enteris' employees, including enhancing our standard operating procedures
at Enteris to provide for additional cleaning and hygiene measures, social distancing, as well as following guidelines provided by the
Centers for Disease Control and Prevention and the State of New Jersey. However, no assurance can be given that the steps being taken
will be adequate or deemed to be appropriate. To the extent we are able to obtain information about and maintain communications with
our customers, suppliers, vendors and other business partners, we will seek to minimize disruptions to our Pharmaceutical Development
segment's supply chain, although we cannot provide assurances that we will be successful.

 Risks Related
to Our Business and Structure

 Our ability to use NOL carryforwards
to offset future taxable income for U.S. federal income tax purposes may be limited, and our future cash tax liability may increase.

 As
of December 31, 2023, we had Net Operating Loss ("NOL") carryforwards for U.S. federal income tax purpose s of $87.7
million. The U.S. federal NOL carryforwards, if not offset against future income, will expire by 2037. We may recognize
additional NOLs in the future. In order to utilize the NOLs, we must generate taxable income that can offset such carryforwards.

 The
Internal Revenue Service ("IRS") has not audited our tax returns for any of the years during the carryforward period. We
cannot assure you that we would prevail if the IRS were to challenge the availability of the NOLs. If the IRS were successful in challenging
our NOLs, all or some portion of the NOLs would not be available to offset any future consolidated income which would negatively impact
our results of operations and cash flows.

 Under
Section 382 of the Internal Revenue Code (the "Code"), a corporation that undergoes an "ownership change" may
be subject to limitations on its ability to utilize its pre-change NOL carryforward amounts to offset future taxable income. In general,
an ownership change occurs if the aggregate stock ownership of certain stockholders (generally 5 percent stockholders, applying certain
look-through and aggregation rules) increases by more than 50 percent over such stockholders' lowest percentage ownership during
the testing period (generally three years). New issuances of our common stock, which is within our control, and purchases of our common
stock in amounts greater than specified levels, which are beyond our control, could create an additional limitation on our ability to
utilize our NOL carryforward amounts for tax purposes in the future. Limitations imposed on our ability to utilize NOL carryforward amounts
could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect and could
cause such NOL carryforward amounts to expire unused, in each case reducing or eliminating the expected benefit to us. Additionally,
various states have similar limitations on the use of state NOLs following an ownership change.

 If
an ownership change occurs, the amount of the taxable income for any post-change year that may be offset by a pre-change loss is subject
to an annual limitation that is cumulative to the extent it is not all utilized in a year. This limitation would be derived by multiplying
the fair market value of our common stock as of the ownership change by the applicable federal long-term tax-exempt rate, which
was 3.33 percent for March 2024. To the extent that a company has a net unrealized built-in gain at the time of an ownership
change, which is realized or deemed recognized during the five-year period following the ownership change, there is an increase in the
annual limitation for each of the first five-years that is cumulative to the extent it is not all utilized in a year.

 If
an ownership change should occur in the future, our ability to use NOLs to offset future taxable income will be subject to an annual
limitation and will depend on the amount of taxable income we generate in future periods. There is no assurance that we will be able
to fully utilize our NOLs and we could be required to record an additional valuation allowance related to the amount of the NOLs that
may not be realized, which could impact our results of operations.

 Changes in tax law may adversely affect
us or our investors.

 The
rules dealing with U.S. federal, state and local income taxation are constantly under review by persons involved in the legislative process
and by the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may have retroactive application) could adversely
affect us or holders of our common stock. In recent years, many such changes have been made, and changes are likely to continue to occur
in the future.

 For
example, on August 16, 2022, the U.S. government enacted the Inflation Reduction Act of 2022 (the "IRA"). The IRA contains
a number of tax-related provisions, including a 15 percent minimum corporate income tax on certain large corporations as well as an excise
tax on stock repurchases. It is unclear how the IRA will be implemented by the U.S. Department of the Treasury through regulation. We
are still evaluating the impact of the IRA on our tax liability, which tax liability could also be affected by how the provisions of
the IRA are implemented through such regulation. We will continue to evaluate the IRA's impact as further information becomes available.

 It
cannot be predicted whether, when, in what form or with what effective dates tax laws, regulations and rulings may be enacted, promulgated
or issued, which could result in an increase in our or our shareholders' tax liability or require changes in the manner in which
we operate in order to minimize or mitigate any adverse effects of changes in tax law.

 From time to time,
we engage in acquisitions, divestitures and joint ventures and may encounter difficulties in integrating and separating these businesses
and therefore we may not realize the anticipated benefits.

 We may seek growth opportunities through strategic acquisitions as well
as evaluate our segments for potential divestitures to optimize our business footprint. The success of these transactions will depend
on our ability to integrate or separate, as applicable, assets and personnel in these transactions and to cooperate with our strategic
partners. We may encounter difficulties in integrating acquisitions with our operations as well as separating divested segments, and in
managing strategic investments. Furthermore, we may not realize the degree, or timing, of benefits we anticipate when we first enter into
a transaction. For example, with and effective date of January 1, 2024, we entered into an exclusive option and asset purchase agreement
(the "Option") with Aptar which granted Aptar an exclusive option to acquire certain of Enteris' assets related to its
business of providing contract manufacturing, formulation and development services. Aptar must exercise its Option by or before January
1, 2026. There is a possibility that Aptar may not exercise its Option in the anticipated timeframe or at all. Additionally, the existence
of the Option may deter future potential opportunities to monetize certain Enteris assets. Any of the foregoing could adversely affect
our business and results of operations.

 We are dependent upon our key management
personnel for our future success.

 We
depend on the diligence, skill and network of business contacts of our senior management and their access to the investment professionals
and the information and deal flow generated by these investment professionals in the course of their investment and portfolio management
activities. Our senior management team evaluates, negotiates, structures, closes, monitors and services our investments. Our success
depends to a significant extent on the efforts, judgment, business relationships, personal reputations and continued service of our senior
management team, and other key personnel. The loss of the services of any of our key personnel or damage to their personal reputation
could have a material adverse effect on our business. Accordingly, our retention of our key personnel and our success in recruiting additional
personnel is crucial to our success. If our key personnel were to join or form a competitor, our business could similarly suffer a material
adverse effect. In addition, we have very few employees, so the loss of any employee could be disruptive to our business. We do not carry
any "key man" insurance that would provide us with proceeds in the event of the death or disability of any of our key personnel.
We may also not succeed in recruiting additional personnel because the market for qualified professionals is extremely competitive. Efforts
to retain or attract key personnel may result in significant additional expenses, which could adversely affect our profitability.

 Changes in our management may cause
uncertainty in, or be disruptive to, our business. Certain of our directors and management team members have been with us in those capacities
for only a short time.

 Our
success depends upon the continued services of executive officers and other key personnel, as well as their ability to effectively transition
to their successors. We have experienced significant changes in our senior leadership in 2023, including the appointment of a new Chief
Executive Officer. In addition, following the resignation of our Chief Financial Officer in February 2024, our Chief
Executive Officer has assumed the responsibilities of principal financial and accounting officer on an interim basis, our
former Chief Financial Officer has been engaged as a part-time consultant through the filing of our Quarterly Report on Form 10-Q
for the quarter ended March 31, 2024 and we have commenced an executive search for a new Chief Financial Officer. Although we have
endeavored to implement any management transition in a non-disruptive manner, such transitions might impact our business, and give rise
to uncertainty among our customers, investors, vendors, employees and others concerning our future direction and performance, which may
materially and adversely affect our business, financial condition, results of operations and cash flows, and our ability to execute our
business model.

 In
addition, because certain members of our management and Board have served in their respective capacities for only limited durations,
we face the additional risks that these persons have limited familiarity with our past practices, our business and our industry and lack
established track records in managing our business strategy.

 Any
future changes to the executive management team, including hires or departures, could cause further disruption to the business and have
a negative impact on operating performance, while these operational areas are in transition. We can provide no assurance that we will
be able to continue to find suitable successors to key roles as transitions occur or that any identified successor will be successfully
integrated into its management team.

 We
also believe that our future success will depend in large part upon our ability to attract, motivate and retain highly skilled technical,
management personnel at all levels of the organization. Due to labor shortages and inflationary wage pressure, there is intense competition
for qualified talent, which combined with the salary, benefits and other costs required to employ the right personnel, may make it difficult
to achieve our financial goals. Consequently, we may not be successful in attracting, motivating and retaining such personnel, and our
failure to do so could have a negative effect on our business including our ability to successfully develop, introduce, and market our
products which may adversely impact our operating results, or financial condition.

 Because we are
relying on the exemptions from corporate governance requirements as a result of being a "controlled company" within the meaning
of the Nasdaq listing standards, you do not have the same protections afforded to stockholders of companies that are subject to such
requirements.

 Because
Carlson controls a majority of our common stock, we are a "controlled company" within the meaning of the Nasdaq Capital
Market ("Nasdaq") listing standards. Under these rules, a company of which more than 50 percent of the voting power
is held by an individual, a group or another company is a "controlled company" and may elect not to comply with certain
Nasdaq corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of
independent directors, (2) the requirement that we have a nominating and corporate governance committee that is composed entirely of
independent directors with a written charter addressing the committee's purpose and responsibilities, and (3) the requirement
that the board have a compensation committee composed entirely of independent directors with a written charter addressing the
committee's purpose and responsibilities. However, our Board of Directors is currently comprised of a majority of independent
directors and we currently have a Nominating and Corporate Governance Committee and the majority of the members of such committee
are independent directors. If we were to fully avail ourselves of the controlled company rules, you do not have the same protections
afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

 If we are unable to obtain additional
debt or equity financing on commercially reasonable terms our business could be materially adversely affected.

 As
of December 31, 2023, we had $4.5 million of cash and cash equivalents plus $47.7 million available to be borrowed under our new credit
facility with First Horizon Bank.

 On
June 28, 2023, we entered into a new Credit Agreement (the "Credit Agreement") by and among SWK Funding LLC, our
wholly-owned subsidiary (together with the Company, the "Borrower"), the lenders party thereto ("Lenders"),
and First Horizon Bank as a Lender and Agent (the "Agent"). The Credit Agreement provides for a revolving credit facility
with an initial maximum principal amount of $45.0 million. The Credit Agreement provides that we may request one or more
incremental increases in an aggregate amount not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any
time prior to the termination of the revolving credit period on June 28, 2026 (the "Commitment Termination Date"). The revolving
credit period will be followed by a one-year amortization period, with the final maturity date of the Credit Agreement occurring on June
28, 2027.

 On October 10, 2023,
we entered into a First Amendment to Credit Agreement pursuant to which Woodforest National Bank was added as a lender
under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate commitments under the Credit
Agreement from $45.0 million to $60.0 million.

 Our prior credit agreement with Cadence Bank was terminated in connection with the establishment of the new Credit Agreement.

 On
October 3, 2023, we completed a registered underwritten public offering of $30.0 million of our 9.00% Senior Notes due 2027 (the "Notes").
On October 27, 2023, the underwriters exercised their option to purchase an additional $2.9 million in aggregate principal amount of
the Notes. The Notes will mature on January 31, 2027, unless earlier redeemed, and will bear interest at a rate of 9.00 percent per annum,
payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year and at maturity, commencing on December
31, 2023. We received net proceeds after discounts and commissions, but before expenses and fees, of approximately $31.9 million from
the offering of the Notes.

 If
we are unable to enter into new debt or equity financing arrangements on commercially reasonable terms, our liquidity may be reduced
significantly, and as a result, our ability to implement and grow our business strategy could be materially impacted.

 We
may not be able to generate sufficient cash to service all of our debt, and may be forced to take other actions to satisfy our obligations
under such indebtedness, which may not be successful.

 Our
ability to make scheduled payments on, or to refinance our obligations under, the Notes or future indebtedness, will depend on our financial
and operating performance and that of our subsidiaries, which, in turn, will be subject to prevailing economic and competitive conditions
and to financial and business factors, many of which may be beyond our control.

 We may not
maintain a level of cash flow from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on
the Notes or future indebtedness. If our cash flow and capital resources are insufficient to fund our debt service obligations, we may
be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital or restructure the Notes or
future indebtedness. In the future, our cash flow and capital resources may not be sufficient for payments of interest on, and principal
of, our debt, and such alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.
We may not be able to refinance any of our indebtedness or obtain additional financing. In the absence of such operating results and
resources, we could face substantial liquidity problems and might be required to dispose of material assets or operations to meet our
debt service and other obligations. We may not be able to consummate those sales, or if we do, at an opportune time, the proceeds that
we realize may not be adequate to meet debt service obligations when due. Repayment of our indebtedness, to a certain degree, is also
dependent on the generation of cash flows by our subsidiaries (none of which are currently guarantors) and their ability to make such
cash available to us, by dividend, loan, debt repayment, or otherwise. Our subsidiaries may not be able to, or be permitted to, make
distributions or other payments to enable us to make payments in respect of our indebtedness. Each of our subsidiaries is a distinct
legal entity and, under certain circumstances, applicable U.S. and foreign legal and contractual restrictions may limit our ability to
obtain cash from our subsidiaries. In the event that we do not receive distributions or other payments from our subsidiaries, we may
be unable to make required payments on our indebtedness.

 Our use of leverage may limit our
operational flexibility and increase our overall risk, which may adversely affect our business and results of operations.

 Although
the use of leverage may create an opportunity for increased returns for us, it also results in additional risks and can magnify the effect
of any losses and thus could negatively impact our business and results of operations and have important adverse consequences to our
investments. Our current credit facility contains, and any future credit facility, if raised, would likely contain covenants that could
restrict our operating flexibility, including covenants that, among others, could limit our ability to: (i) make distributions in certain
circumstances, (ii) incur additional debt, and (iii) engage in certain transactions, which collectively may prevent us from entering
into transactions which we may otherwise determine are beneficial to us, and which could negatively impact our business and results of
operations. In addition, we expect we would need to secure such a credit facility through the pledging of substantially all of our assets,
and if we are unable to generate sufficient cash flow to meet principal and interest payments on such indebtedness, we would be subject
to risk that the lender seizes our assets through an acceleration of the credit facility that could require liquidation of pledged collateral
at inopportune times or at prices that are not favorable to us and cause significant losses. If the lender seizes and liquidates pledged
collateral, such collateral will likely be sold at distressed price levels. We will fail to realize the full value of such assets in
a distressed sale.

 The liquidity, market price and volume
of our stock are volatile.

 Our
common stock is listed on the Nasdaq. The liquidity of our common stock may be adversely affected,
and purchasers of our common stock may have difficulty selling our common stock, if our common stock does not continue to trade on Nasdaq
or another national securities exchange. Nasdaq maintains certain minimum continued listing standards. If we are not able to continue
to satisfy the continued listing standards, or qualify for an exemption to such standards, then we could be subject non-compliance status
or de-listing.

 As
previously announced, in 2022, we received a letter from Nasdaq indicating that, as a result of the resignations of four of our
directors, we were no longer in compliance with Nasdaq Listing Rules 5605(b)(1), 5605(c)(2), 5605(d)(2) and 5605(e)(1), which require
the Board to be comprised of a majority of independent directors, that the audit committee consist of at least three independent members
and the compensation committee consist of at least two independent members, and that director nominees be selected, or be recommended
for the Board's selection, by a separate vote of a majority of independent directors or a committee comprised solely of independent
directors. While we have successfully regained compliance, we can provide no assurance that we will continue to maintain compliance with
such standards.

 The
trading price of our common stock could be subject to wide fluctuations in response to quarter-to-quarter variations in our operating
results and other events or factors. In addition, the U.S. stock markets have from time to time experienced extreme price and volume
fluctuations that have affected the market price for many companies and which often have been unrelated to the operating performance
of these companies. These broad market fluctuations may adversely affect the market price of our securities.

 Funds affiliated with Carlson can
control or exert significant influence over our management and policies through their ownership of a large amount of our common stock.

 As
of December 31, 2023, funds affiliated with Carlson owned in the aggregate 73.0 percent of our combined issued and outstanding common
stock and unvested restricted stock. Due to the large percentage of ownership by funds affiliated with Carlson, they have the ability
to control or exert significant influence over our management and policies, such as the election of our directors, the appointment of
new management and the approval of any other action requiring the approval of our stockholders, including any amendments to our certificate
of incorporation, a sale of all or substantially all of our assets or a merger or other significant transaction. The investment objectives
of Carlson and its affiliates may from time to time be different than or conflict with those of our other stockholders.

 In
addition, pursuant to the terms of a Stockholders' Agreement entered into on February 27, 2023 (as amended, the "Stockholders'
Agreement"), funds affiliated with Carlson have the right to approve specific transactions, including the incurrence of indebtedness
over specified amounts, the sale of assets over specified amounts, declaration of dividends, loans, capital contributions to or investments
in any third party over specified amounts, changes in the size of the board of directors and repurchases of common stock.

 If there are substantial sales of
shares of our common stock, the price of our common stock could decline.

 The
price of our common stock could decline if there are substantial sales of our common stock, particularly sales by our directors, executive
officers, employees, and significant stockholders including funds associated with Carlson. Funds associated with Carlson own an aggregate
of 73.0 percent (9,093,766 common shares). Pursuant to the Stockholders' Agreement entered into on February 27, 2023, as amended,
and a Registration Rights Agreement entered into on September 6, 2013, we filed a Registration Statement on Form S-3 with the SEC on
February 3, 2020, which became effective on February 19, 2020, to register all of the common stock owned by funds associated with Carlson
for sale freely in the public market from time to time.

 The
market price of our common stock could decline as a result of the sale of a substantial number of our shares of common stock in the public
market or the perception in the market that the holders of a large number of shares intend to sell their shares.

 We have adopted
provisions in our certificate of incorporation and bylaws, and have entered into the Rights Agreement, which could delay or prevent an
acquisition of the Company.

 The
board of directors has the authority to issue up to 5 million shares of preferred stock. Without any further vote or action on the part
of the stockholders, the board of directors has the authority to determine the price, rights, preferences, privileges, and restrictions
of the preferred stock. This preferred stock, if issued, might have preference over and harm the rights of the holders of common stock.
Although the ability to issue this preferred stock provides us with flexibility in connection with possible acquisitions and other corporate
purposes, it can also be used to make it more difficult for a third party to acquire a majority of our outstanding voting stock. We currently
have no plans to issue preferred stock.

 Additionally,
the Rights Agreement is intended to protect our ability to utilize our NOL carryforwards and make it difficult for a third party to acquire
a significant number of shares of our common stock.

 Our
certificate of incorporation and bylaws include provisions that may deter an unsolicited offer to purchase us. These provisions, coupled
with the provisions of the Delaware General Corporation Law, may delay or impede a merger, tender offer or proxy contest. In addition,
directors are only removable by the affirmative vote of holder of at least two-thirds of all classes of voting stock. These factors may
further delay or prevent a change of control of the Company.

 If we were deemed
an investment company under the Investment Company Act of 1940, applicable restrictions could make it impractical for us to continue
our business as contemplated and could have a material adverse effect on our business.

 We
have not been and do not intend to become registered as an "investment company" under the Investment Company Act of 1940,
or the 1940 Act. We intend to conduct our business so as not to become regulated as an investment company under the 1940 Act.

 Generally,
a company will be determined to be an "investment company" if, absent an exclusion or exemption, it is or holds itself out
as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities or owns
or proposes to acquire investment securities having a value exceeding 40 percent of the value of its total assets (exclusive of U.S.
government securities and cash items) on an unconsolidated basis. We refer to this investment company definition test as the "40
percent test."

 We
do not hold ourselves out as being engaged primarily, or propose to engage primarily, in the business of investing, reinvesting or trading
in securities and believe that we are not engaged primarily in the business of investing, reinvesting or trading in securities. We believe
that, for purposes of the 1940 Act, we are engaged primarily, through one or more of our subsidiaries, in the business of purchasing
or otherwise acquiring certain obligations that represent part or all of the sales price of merchandise. Our subsidiaries that are so
engaged rely on Section 3(c)(5)(A) of the 1940 Act, which, as interpreted by the SEC staff, requires each such subsidiary to invest at
least 55 percent of its assets in "notes, drafts, acceptances, open accounts receivable and other obligations representing part
of all of the sales price of merchandise, insurance and services," which we refer to as the ICA Exception Qualifying Assets.

 To
ensure that we are not obligated to register as an investment company, we must not exceed the thresholds provided by the 40% test. For
purposes of the 40 percent test, the term "investment securities" does not include U.S. government securities or securities
issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on Section 3(c)(1) or Section
3(c)(7) of the 1940 Act, such as majority-owned subsidiaries that rely on Section 3(c)(6), which, based on the SEC staff's interpretations,
requires us to invest, either directly or through majority-owned subsidiaries, at least 55 percent of our assets in, as relevant here,
businesses relying on Section 3(c)(5)(A). Therefore, the assets that we and our subsidiaries hold and acquire are limited by the provisions
of the 1940 Act and the rules and regulations promulgated thereunder.

 If
the SEC or its staff in the future adopts a contrary interpretation to that provided in the no-action letter to the predecessor of Royalty
Pharma plc or otherwise restricts the conclusions in the SEC staff's no-action letter such that royalty interests are no longer
treated as ICA Exception Qualifying Assets for purposes of Section 3(c)(6), or the SEC or its staff in the future determines that the
no-action letter does not apply to some or all types of royalty receivables relating to biopharmaceutical assets, our business will be
materially and adversely affected. In particular, we would be required to register as an investment company. The requirements imposed
by the 1940 Act, including limitations on our capital structure and our ability to transact business with affiliates could make it impractical
for us to continue our business as currently conducted. Our ceasing to not be deemed an investment company or to qualify for an exemption
from registration as an investment company could materially and adversely affect the value of our common stock. In addition, we could
be subject to legal actions by regulatory authorities and others and could be forced to dissolve.

 In
complying with Section 3(c)(5)(A), one of our subsidiaries, SWK Funding LLC ("SWK Funding"), relies on an interpretation
that royalty interests that entitle an issuer to collect royalty receivables that are directly based on the sales price of specific biopharmaceutical
products that use intellectual property covered by specific license agreements are ICA Exception Qualifying Assets under Section 3(c)(5)(A).
This interpretation was promulgated by the SEC staff in a no-action letter issued to the predecessor of Royalty Pharma plc on August
13, 2010.

 Our failure to
deal appropriately with conflicts of interest could damage our reputation and adversely affect our businesses.

 We
increasingly confront potential conflicts of interest relating to our business, our investment or financing activities and our partner
companies. Conflicts of interest may arise from the fact that (i) we provide investment management services to more than one partner
company, (ii) the partner companies we work with often have one or more overlapping investment or financing strategies, and (iii) we
could choose to allocate an investment to more than one partner company or to ourselves. Also, the investment or financing strategies
employed by us for current and future partner companies, or on our own behalf, could conflict with each other, and may adversely affect
the prices and availability of other securities or instruments held by, or potentially considered for, one or more partner companies.

 We
currently operate without information barriers in our Finance Receivables segment that some other investment management firms implement
to separate business units and/or to separate persons who make investment decisions from others who might possess material non-public
information that could influence such decisions. Our executive officers, investment professionals or other employees may acquire confidential
or material non-public information and, as a result, we may be restricted from initiating transactions in certain securities. Notwithstanding
the maintenance of restricted securities lists and other internal controls, it is possible that the internal controls relating to the
management of material non-public information could fail and result in us buying or selling a security while, at least constructively,
in possession of material non-public information. Inadvertent trading on material non-public information could have adverse effects on
our reputation, result in the imposition of regulatory or financial sanctions and, as a consequence, negatively impact our ability to
provide our investment management services to our partner companies.

 Appropriately
dealing with conflicts of interest is complex and difficult and our reputation could be damaged if we fail, or appear to fail, to deal
appropriately with one or more potential or actual conflicts of interest. Regulatory scrutiny of, or litigation in connection with, conflicts
of interest could have a material adverse effect on our reputation which would materially adversely affect our business and results of
operations.

 Cybersecurity incidents
and other disruptions to our information technology systems, or the information systems of third parties whom we do business with, may
compromise our information and expose us to liability that could adversely impact our financial condition, business operations, and reputation.

 Our business operations
rely upon information technology systems for data processing, storage, and reporting. Our information technology systems, along with those
of the third parties whom we rely on, are potentially vulnerable to a variety of evolving cybersecurity threats that may expose our data
to unauthorized persons or otherwise compromise its integrity. These threats may include, but are not limited to, social-engineering attacks
(including phishing attacks), business email compromise, online and offline fraud, malicious code (such as viruses and worms), malware
(including as a result of advanced persistent threat intrusions), employee misconduct, denial-of-service attacks, access attacks (such
as credential stuffing), ransomware attacks, supply-chain attacks, and software bugs as well as cybersecurity failures resulting from
human error, catastrophic events (such as fires, floods, hurricanes and tornadoes), loss of data or other information technology assets,
and technological errors. We expend resources trying to protect against cybersecurity threats to our information technology systems. Additionally,
certain data privacy and security laws, as well as industry best practice standards, may require us to implement and maintain additional
cybersecurity measures.

 Cybersecurity threat actors
and their techniques change frequently, are often sophisticated in nature, and may not be detected until after a cybersecurity incident
has occurred. While we have implemented cybersecurity measures designed to protect our information technology systems as well as the confidential
and sensitive data in our possession, there can be no assurance that these measures will be adequate to detect, prevent, or adequately
address any cybersecurity incident or data breach that we may face. Additionally, the third-parties with whom we do business may be sources
or targets of cybersecurity attacks or other technological risks. While we engage in actions to reduce our exposure to third-party risks,
we cannot control the cybersecurity plans and systems put in place by these third parties and ongoing threats may result in unauthorized
access, loss, exposure or destruction or misuse of data, or other cybersecurity incidents, with increased costs and other consequences,
including those described above.

 If we, or a third party
upon whom we rely, experience a cybersecurity incident or are perceived to have experienced a cybersecurity incident, we may experience
adverse consequences. These consequences may affect our business strategy, results of operations, or financial condition and can include:
government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements
and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification
obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability
of data); financial loss; and other similar harms. To the extent that any disruption or cybersecurity incident were to result in a loss
of, or damage to, a counterparties' data or applications, or inappropriate disclosure or misuse of confidential or proprietary
information, our partners' operations may be harmed, and the development and commercialization of their products, development-stage
product candidates, and technologies could be delayed. Further, our insurance coverage may not be adequate or sufficient in type or amount
to protect us from or to mitigate liabilities arising out of our privacy and security practices.

 Risks Associated with Investments in
the Health Care and Life Sciences Industries

 Public health
epidemics, pandemics or outbreaks, including COVID-19, could adversely affect our and our partner companies' businesses.

 Public
health epidemics, pandemics or outbreaks, and the resulting business or economic disruptions resulting therefrom, could adversely impact
our and our partner companies' businesses as well as our ability to raise capital. The impact of COVID-19 has been and will likely
continue to be extensive in many aspects of society, which has resulted in and will likely continue to result in significant disruptions
to the global economy, as well as businesses and capital markets around the world.

 The
extent to which COVID-19 impacts our business will depend on future developments, which are highly uncertain and cannot be predicted
with confidence, including the duration of the pandemic, new information that may emerge concerning the severity of COVID-19 and public
and private actions to contain COVID-19 or treat its impact. COVID-19 has and will likely continue to result in social, economic and
labor instability in the countries in which we or our partner companies operate.

 COVID-19
has impacted, and may continue to impact, the ability of our borrowers and the marketers of products upon which we derive our royalty
income to raise capital in order to fund and conduct their operations during the pandemic. In certain situations, disruptions to our
partner companies, including as a result of global supply chain disruptions, has impaired their ability to fulfill their obligations
to us and resulted in defaults in obligations to us. As a result, we have entered into amendments with certain of our borrowers in order
to cure defaults. Continuing impacts of the pandemic and supply chain disruptions could continue to increase the risk of delinquencies,
defaults, declining collateral values associated with our existing loans, and impairments or losses on our loans. Any such impairment
could increase our credit risk and adversely affect the assets and results of operations of our Finance Receivables segment.

 Any
abrupt and substantial change in economic conditions also may decrease the value of collateral securing some of our loans and the value
of our equity investments. Any sustained disruption in the capital markets from the COVID-19 pandemic could negatively impact our and
our partner companies' ability to raise capital.

 Economic recessions or downturns could
impair the ability of our partner companies to repay loans, which, in turn, could increase our non- performing assets, decrease the value
of our assets, reduce our volume of new loans and have a material adverse effect on our results of operations.

 General
economic conditions may affect our activities and the operation and value of the assets of our Finance Receivables segment. Economic
slowdowns or recessions may result in a decrease of institutional equity investment, which would limit our lending opportunities. Furthermore,
many of our partner companies are susceptible to economic or industry centric slowdowns or recessions and may be unable to repay our
debt investments during these periods. Therefore, our non-performing assets are likely to increase, and the value of our portfolio is
likely to decrease, during these periods. Adverse economic conditions may also decrease the value of collateral securing some of our
debt investments and the value of our equity investments. Economic slowdowns or recessions could lead to financial losses in our portfolio
and a material decrease in revenues, net income and assets. Unfavorable economic conditions could also increase our funding costs, limit
our access to the capital markets or result in a decision by lenders not to extend credit to us.

 A
partner company's failure to satisfy financial or operating covenants imposed by us or other lenders could lead to defaults and,
potentially, termination of its loans and foreclosure on its secured assets, which could trigger cross-defaults under other agreements
and jeopardize the partner company's ability to meet its obligations under the loans that we hold. We may incur expenses to the
extent necessary to recover our investment upon default or to negotiate new terms with a defaulting partner company. These events could
harm our financial condition and operating results.

 A
period of market disruption may have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, unfavorable economic conditions, including rising interest rates, may also increase our funding costs, limit our access
to capital markets or negatively impact our ability to obtain financing, particularly from the debt markets.

 Some of our partner
companies may be unable to protect their proprietary rights and may infringe on the proprietary rights of others.

 Our
partner companies assert various forms of intellectual property protection. Intellectual property may constitute an important part of
partner company assets and competitive strengths, particularly for royalty monetization transactions. Federal law, most typically copyright,
patent, trademark and trade secret laws, generally protects intellectual property rights. Although we expect that our partner companies
will take reasonable efforts to protect the rights to their intellectual property, third parties may develop similar intellectual property
independently or attempt to abandon intellectual property licenses if it is determined such intellectual property from a partner company
is no longer needed. Moreover, the complexity of international trade secret, copyright, trademark and patent law, coupled with the limited
resources of our partner companies and the demands of quick delivery of products and services to market, create a risk that partner company
efforts to prevent misappropriation of their technology will prove inadequate.

 Some
of our partner companies also license intellectual property from third parties and it is possible that they could become subject to infringement
actions based upon their use of the intellectual property licensed from those third parties. Our partner companies generally obtain representations
as to the origin and ownership of such licensed intellectual property. However, this may not adequately protect them. Any claims against
our partner companies' proprietary rights, with or without merit, could subject the companies to costly litigation and divert their
technical and management personnel from other business concerns. If our partner companies incur costly litigation and their personnel
are not effectively deployed, the expenses and losses incurred by our partner companies will increase and their profits, if any, will
decrease.

 Third
parties have and may assert infringement or other intellectual property claims against our partner companies based on their patents or
other intellectual property rights. Although we are not aware that any of our partner companies' products might infringe any third
party's patents, they may have to pay substantial damages, possibly including treble damages, if it is ultimately determined that
they do. They may have to obtain a license to sell their products if it is determined that their products infringe on another person's
intellectual property. Our partner companies might be prohibited from selling their products before they obtain a license, which, if
available at all, may require them to pay substantial royalties. Even if infringement claims against our partner companies are without
merit, defending these types of lawsuits takes significant time, is expensive and may divert management attention from other business
concerns.

 Future
legislation, and/or regulations and policies adopted by the FDA or other U.S. or foreign regulatory authorities may increase the time
and cost required by some of our partner companies to conduct and complete clinical trials for the product candidates that they develop,
and there is no assurance that these companies will obtain regulatory approval to market and commercialize their products in the U.S.
and in foreign countries.

 The
FDA and other foreign and U.S. regulatory authorities have established regulations, guidelines and policies to govern the drug development
and approval process which affect some of our partner companies. Any change in regulatory requirements due to the adoption by the FDA
and/or foreign or other U.S. regulatory authorities of new legislation, regulations, or policies may require some of our partner companies
to amend existing clinical trial protocols or add new clinical trials to comply with these changes. Such amendments to existing protocols
and/or clinical trial applications or the need for new ones, may significantly impact the cost, timing and completion of the clinical
trials.

 In
addition, increased scrutiny by the U.S. Congress of the FDA's and other authorities approval processes may significantly delay
or prevent regulatory approval, as well as impose more stringent product labeling and post-marketing testing and other requirements.
Foreign regulatory authorities may also increase their scrutiny of approval processes resulting in similar delays. Increased scrutiny
and approval processes may limit the ability of our partner companies to market and commercialize their products in the U.S. and in foreign
countries.

 The development
of products by life science companies requires significant research and development, clinical trials and regulatory approvals.

 The
development of products by life science companies requires significant research and development, clinical trials and regulatory approvals.
In addition, similar activities and costs may be required to support products that have already been commercialized. The results of product
development efforts may be affected by a number of factors, including the ability to innovate, develop and manufacture new products,
complete clinical trials, obtain regulatory approvals and reimbursement in the U.S. and abroad, or gain and maintain market approval
of products. In addition, regulatory review processes by U.S. and foreign agencies may extend longer than anticipated as a result of
decreased funding and tighter fiscal budgets. Further, patents attained by others can preclude or delay the commercialization of a product.
There can be no assurance that any products now in development will achieve technological feasibility, obtain regulatory approval, or
gain market acceptance. Failure can occur at any point in the development process, including after significant funds have been invested.
Products may fail to reach the market or may have only limited commercial success because of efficacy or safety concerns, failure to
achieve positive clinical outcomes, inability to obtain necessary regulatory approvals, failure to achieve market adoption, limited scope
of approved uses, excessive costs to manufacture, the failure to establish or maintain intellectual property rights, or the infringement
of intellectual property rights of others. Failure by our partner companies to successfully commercialize pipeline products in which
we have an economic interest could have a material adverse effect on our business, financial condition and results of operations.

 Changes in healthcare
laws and other regulations applicable to some of our partner companies' businesses may constrain their ability to offer their products
and services.

 Changes
in healthcare or other laws and regulations applicable to the businesses of some of our partner companies may occur that could increase
their compliance and other costs of doing business, require significant systems enhancements, or render their products or services less
profitable or obsolete, any of which could have a material adverse effect on their results of operations. There has also been an increased
political and regulatory focus on healthcare laws in recent years, and new legislation could have a material effect on the business and
operations of some of our partner companies.

 We
also anticipate that Congress, state legislatures, and third-party payors may continue to review and assess alternative healthcare delivery
and payment systems and may in the future propose and adopt legislation or policy changes or implementations effecting additional fundamental
changes in the healthcare delivery system. We cannot assure you as to the ultimate content, timing, or effect of changes, nor is it possible
at this time to estimate the impact of any such potential legislation on certain of our partner companies, our business model, prospects,
financial condition or results of operations.

 The potential
inability of our partner companies' and counterparties to charge desired prices with respect to prescription drugs could impact
their revenues and in turn their ability to repay us or the magnitude of their royalty payments to us.

 Our
partner companies, as well as the value of our pharmaceutical royalties, are subject to risks associated with the pricing for prescription
drugs. It is uncertain whether pharmaceutical products will continue to utilize established prescription drug pricing methods, or whether
other pricing benchmarks will be adopted for establishing prices within the industry. Legislation may lead to changes in the pricing
for Medicare and Medicaid programs. Regulators have conducted investigations into the use of prescription drug pricing methods for federal
program payment, and whether such methods have inflated drug expenditures by the Medicare and Medicaid programs. Federal and state proposals
have sought to change the basis for calculating payment of certain drugs by the Medicare and Medicaid programs. We cannot predict the
ultimate content, timing or effect of any such legislation or executive action or the impact of potential legislation or executive action
on us. Any changes to the method for calculating prescription drug costs may reduce the revenues of our partner companies operating in
the pharmaceutical industry, which could in turn impair their ability to timely make any principal and interest payments owed to us.
Additionally, any such changes to pharmaceutical product reimbursement similarly could reduce the revenues of the pharmaceutical products
from which we receive royalties.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY

 Cyber
Risk Management and Strategy

 We rely on information
technology in our operations, and any material failures, inadequacies, interruptions, security failures, social engineering attacks or
cyber-attacks could harm our business. To help manage these risks, we engage and rely on external experts and an information technology
managed services provider. Our managed services provider's information security analysts and IT security specialists offer us advice
on technology, infrastructure, management, and productivity in relation to our information technology capabilities.

 To address risks
from cybersecurity threats, we have implemented and maintain cybersecurity policies and procedures, including an incident response plan,
and our managed services provider implements a number of cybersecurity technologies and controls, including but not limited to, vulnerability
scans and patch management tools. Our current approach to managing cybersecurity risks is informed by periodic risk assessments conducted
by our managed services provider that incorporates elements of a recognized industry framework and evaluates our cyber risk management
controls. We have implemented a process for senior management to review assessments performed and determine the appropriate treatment
of identified risks.

 We have also developed a cybersecurity risk management process for our third-party vendors. This process aims to assess the cybersecurity
maturity of vendors who have access to our data or systems through an evaluation of the vendor's cybersecurity risk profile. We,
like other companies in our industry, face a number of cybersecurity risks in connection with our business. We have not identified any
cybersecurity incidents or threats that have materially affected us or are reasonably likely to materially affect us, including our business
strategy, results of operations, or financial condition; however, like other companies in our industry, we and our third-party vendors
have from time to time experienced threats that could affect our information or systems. For more information about the cybersecurity
risks we face, see Item 1A "Risk Factors."

 Governance
Related to Cybersecurity Risks

 We engage a managed
services provider as discussed above, which includes services to assist us with the identification, monitoring, and management of cybersecurity
risks. Our managed services provider reports periodically to our management team, including our Chief Executive Officer ("CEO").
The CEO briefs the Board on information regarding cybersecurity matters at least quarterly.

 Our risk manager,
along with the CEO, oversee our policies with respect to risk assessment and risk management, including with respect to
cybersecurity risks. The Audit Committee of our Board was recently tasked with oversight of the management of risks related to
cybersecurity. The Audit Committee administers its risk oversight function by receiving reports from members of senior management,
including the risk manager and CEO, on areas of identified material risk to the Company.

 ITEM 2. PROPERTIES

 Our
corporate headquarters and the location of our Finance Receivables segment are in Dallas, Texas, where we lease two office spaces totaling
approximately 6,850 square feet of space. The Pharmaceutical Development segment's headquarters is located in Boonton, New
Jersey, where Enteris leases approximately 32,000 square feet of space. We believe these facilities are adequate for our business requirements.

 ITEM 3. LEGAL PROCEEDINGS

 We
are involved in, or have been involved in, arbitrations or various other legal proceedings that arise from the normal course of our business.
We cannot predict the timing or outcome of these claims and other proceedings. The ultimate outcome of any litigation is uncertain, and
either unfavorable or favorable outcomes could have a material negative impact on our results of operations, balance sheets and cash
flows due to defense costs, and divert management resources. Currently, we are not involved in any arbitration and/or other legal proceeding
that we expect to have a material effect on our business, financial condition, results of operations and cash flows.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

 ITEM 5. MARKET FOR REGISTRANT'S
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 Market Information

 Since
January 22, 2020, our common stock has been listed on the Nasdaq Capital Market, under the symbol "SWKH."

 Holders of Record

 There
were approximately 88 stockholders of record of our common stock as of February 27, 2024. The actual number of stockholders is greater
than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers
and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.

 Dividend Policy

 To
date, we have not paid any cash dividends on our capital stock. We intend to retain our cash and do not anticipate paying any cash dividends
in the foreseeable future.

 Recent Sales
of Unregistered Equity Securities

 None.

 Issuer Purchases
of Equity Securities

 On
May 31, 2022, the Board authorized a share repurchase program under which the Company was previously authorized to repurchase up to $10.0
million of the Company's outstanding shares of common stock from time to time until May 15, 2023, through a Rule 10b5-1 trading
plan in compliance with all applicable laws and regulations, including Rule 10b-18 of the Exchange Act (the "Prior Repurchase Program").
The purchase period for the Prior Repurchase Program was July 1, 2022 through May 15, 2023.

 On
May 16, 2023, the Company announced that the Board had authorized the Company to repurchase up to $10.0 million of the Company's
outstanding shares of common stock from time-to-time until May 16, 2024, through a trading plan established in compliance with Rule 10b5-1
and Rule 10b-18 of the Exchange Act (the "New Repurchase Program"). The actual timing, number and value of shares repurchased
under the New Repurchase Program will depend on several factors, including the constraints specified in the Rule 10b5-1 trading plan,
price, and general market conditions. There is no guarantee as to the exact number of shares that will be repurchased under the New Repurchase
Program. Our Board may also suspend or discontinue the New Repurchase Program at any time, in its sole discretion. The purchase period
for the New Repurchase Program is May 16, 2023 through May 16, 2024.

 The
table below summarizes information about our purchases of common stock during the three months ending December 31, 2023 (in thousands,
except per share data):

 Period

 Total Number of

 Shares Purchased

 Average

 Price Paid

 per Share

 Total Number of

 Shares Purchased

 as Part of Publicly

 Announced Plan

 Maximum

 Approximate

Dollar Value

of Shares That

 May Yet Be

 Purchased

Under the

 Plan

 October 1, 2023 - October 31, 2023

 7,104

 $
 15.75

 7,104

 $
 4,694

 November 1, 2023 - November 30, 2023

 1,283

 16.10

 1,283

 4,673

 December 1, 2023 - December 31, 2023

 5,846

 17.37

 5,846

 4,571

 14,233

 $
 16.45

 14,233

 As
of December 31, 2023, the Company has repurchased an aggregate of 113,639 shares under the Prior Repurchase Program and an aggregate
of 326,088 shares under the New Repurchase Program at a total cost of $7.5 million, or $16.97 per share. As of December 31, 2023, the
maximum dollar value of shares that may yet be purchased under the New Repurchase Program was approximately $4.6 million shares of
common stock. No shares are available for repurchase under the Prior Repurchase Program, which expired on May 15, 2023.

 ITEM 6. RESERVED

 Not Applicable.

 ITEM 7. MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 The
following discussion and analysis should be read in conjunction with our financial statements and the related notes included elsewhere
in this Annual Report. Statements below regarding future events or performance are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Our actual results could be quite different from those expressed or
implied by the forward-looking statements. Factors that could affect results are discussed more fully under the sections entitled "Risk
Factors, " and "Special Note Regarding Forward-Looking Statements" as revised and supplemented by those risks described
from time to time in other reports which we file with the SEC. Although forward-looking statements help to provide complete information
about us, readers should keep in mind that forward-looking statements may not be reliable. Readers are cautioned not to place undue reliance
on the forward-looking statements. We undertake no duty to update any forward-looking statements made herein after the date of this Annual
Report.

 Overview

 We
have organized our operations into two segments: Finance Receivables and Pharmaceutical Development. These segments reflect the way we
evaluate our business performance and manage our operations. Please refer to Part I, Item 1, Business and Part II, Item 8, Financial
Statements, Notes 1 and 11 of the notes to the consolidated financial statements for further information regarding segment information.

 With an effective date of January 1, 2024, we entered into an exclusive
option and asset purchase agreement with Aptar on March 14, 2024 which granted Aptar an exclusive option to acquire certain of Enteris'
assets related to its business of providing good manufacturing practice (GMP) manufacturing and clinical supply services through Phase
1 and 2 to third parties, subject to certain exclusions. Aptar must exercise the option by or before January 1, 2026. Please refer to
Part II, Item 8, Financial Statements, Note 13 of the notes to the consolidated financial statements for further information regarding
the Option and Asset Purchase Agreement with Aptar.

Receivables Portfolio Overview

 The
tables below provide an overview of our outstanding transactions as of, and for the year ended, December 31, 2023 (in thousands, except
rate, share and per share data):

 Royalty
 Purchases

 Licensed

 Technology

 Footnote

 Funded

 Amount

 GAAP

 Balance

 (Loss)

 Recognized

 Besivance

 Ophthalmic antibiotic

 (1)

 $
 6,000

 $
 —

 $

 Best ABT, Inc.

 Oncology diagnosis

 (2),
 (3)

 5,784

 2,587

 —

 Coflex /Kybella

 Spinal stenosis/submental fullness

 4,350

 3,212

 (270
)

 Cambia

 NSAID migraine treatment

 (4)

 8,500

 —

 Duo Royalty

 Japanese Women's health/cystic
 fibrosis

 15,488

 13,588

 2,701

 Flowonix Medical, Inc.

 Drug delivery device

 (3),
 (5)

 10,433

 10,433

 —

 Forfivo XL

 Depressive disorder treatment

 6,000

 1,340

 1,053

 Ideal Implant, Inc.

 Aesthetics

 (3),
 (6)

 3,834

 3,834

 —

 Iluvien

 Diabetic macular edema

 16,501

 14,650

 2,041

 Immune Globulin Portfolio

 Immune Globulin Therapeutics

 14,100

 14,197

 —

 Veru, Inc.

 Women's health

 10,000

 3,419

 Term Loans

 Type

 Footnote

 Maturity

 Date

 Principal

 GAAP

 Balance

 Rate

 (Loss)

 Recognized

 4Web, Inc.

 12/31/24

 $
 29,411

 $
 31,807

 12.8
 %

 $
 4,769

 AOTI, Inc.

 03/21/27

 12,000

 12,104

 11.0
 %

 1,989

 (7)

 03/04/24

 —

 —

 12.0
 %

 1,560

 Elutia, Inc.

 08/10/27

 23,045

 24,285

 12.0
 %

 3,992

 BIOLASE, Inc.

 05/31/25

 13,135

 14,015

 11.3
 %

 2,263

 Biotricity, Inc.

 12/21/26

 12,364

 12,493

 14.5
 %

 2,286

 CDMO Manufacturer

 09/13/27

 5,000

 5,026

 13.3
 %

 Epica International, Inc.

 07/23/24

 9,750

 10,485

 9.5
 %

 1,863

 eTon Pharmaceuticals, Inc.

 11/13/24

 5,460

 5,696

 10.0
 %

 Exeevo, Inc.

 07/01/27

 6,952

 6,924

 15.0
 %

 Journey Medical Corporation

 12/27/27

 15,000

 14,802

 12.8
 %

 MedMinder Systems, Inc.

 08/18/27

 20,000

 20,107

 12.9
 %

 2,849

 MolecuLight, Inc.

 12/29/26

 10,000

 10,227

 12.8
 %

 1,867

 Nicoya Lifesciences, Inc.

 11/30/26

 6,000

 5,971

 12.8
 %

 NeoLight, LLC

 02/17/27

 5,000

 5,016

 13.5
 %

 Shield Therapeutics, Plc

 09/28/28

 20,000

 19,325

 14.3
 %

 SKNV

 05/15/27

 13,497

 13,734

 10.4
 %

 2,055

 Trio Healthcare Ltd.

 (3)

 07/01/26

 9,152

 9,128

 12.5
 %

 Marketable Investments

 Number of

 Shares

 Footnote

 Funded

 Amount

 GAAP

 Balance

 Change

 in Fair

 Value

 Active

 Investment

 as of

 12/31/23

 Secured Royalty Financing (Marketable Investment)

 N/A

 (2), (3)

 $
 3,000

 $

 $
 —

 Yes

 Epica International, Inc.

 25,000

 N/A

 —

 —

 Yes

 Sincerus Pharmaceuticals, Inc.

 26,575

 N/A

 —

 —

 Yes

 Warrants to Purchase Stock

 Number of

 Shares

 Footnote

 Exercise

 Price per

 Share

 GAAP

 Balance

 Change in

 Fair Value

 4Web, Inc.

 TBD

 $
 —

 $
 —

 $
 —

 AOTI, Inc.

 92,490

 —

 —

 —

 150,000

 2.46

 —

 (185
)

 100,000

 1.51

 —

 (132
)

 250,000

 2.39

 —

 (259
)

 500,000

 1.00

 —

 Acerus Pharmaceuticals Corporation

 —

 —

 —

 (5
)

 Aziyo Biologics, Inc.

 157,895

 6.65

 (232
)

 Aziyo Biologics, Inc.

 30,075

 6.65

 (45
)

 BIOLASE, Inc.

 22,039

 9.80

 —

 (4
)

 Biotricity, Inc.

 57,536

 6.26

 (7
)

 CDMO Manufacturer

 211,442

 1.42

 —

 —

 CeloNova BioSciences, Inc.

 TBD

 —

 —

 —

 DxTerity Diagnostics, Inc.

 2,019,231

 —

 —

 —

 Epica International, Inc.

 TBD

 —

 —

 —

 eTon Pharmaceuticals, Inc.

 51,239

 5.86

 eTon Pharmaceuticals, Inc.

 18,141

 6.62

 Exeevo, Inc.

 —

 —

 —

 EyePoint Pharmaceuticals, Inc.

 40,910

 11.00

 EyePoint Pharmaceuticals, Inc.

 7,773

 19.30

 Shield Warrant

 8,910,540

 —

 (96
)

 MedMinder Systems, Inc.

 57,859

 —

 —

 —

 MolecuLight, Inc.

 TBD

 —

 —

 —

 Assets

 Recognized

 Total gross finance receivables

 $
 288,405

 $
 36,346

 Total marketable investments

 —

 Fair value of warrant assets

 1,759

 —

 Total gross assets/revenues

 $
 290,212

 $
 36,346

 (1)
 US
 royalty was paid off during the year ended December 31, 2021. SWK continues to receive insignificant royalties on international sales.

 (2)
 Investment
 considered partially impaired.

 (3)
 Investment
 on non-accrual.

 (4)
 Investment
 was paid off during the year ended December 31, 2023.

 (5)
 Flowonix Medical assets were sold to Algorithm Sciences, Inc. during the
year ended December 31, 2023. In exchange for releasing its lien, the Flowonix estate received $2.5M cash and is expected to receive royalties
on sales of two products. The finance receivable is now classified as a royalty.

 (6)
 In
 July 2023, Ideal Implant assets were sold to an aesthetics company, which
is expected to pay SWK a mid-single digit, capped royalty on implant sales beginning in 2024.

 (7)
 Loan
 was sold to a third party during the year ended December 31, 2023.

 Unless otherwise specified,
our senior secured debt assets generally are repaid by a revenue interest that is charged on a company's quarterly net sales and
royalties.

 Critical Accounting Policies and
Estimates

 The
discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which
have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The preparation of financial
statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses,
and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related
to revenue recognition, stock-based compensation, impairment of finance receivables and long-lived assets, impairment of goodwill and
identifiable intangible assets, valuation of warrants and investments, contingent consideration, income taxes and contingencies and litigation,
among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under
the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The accounting estimates and assumptions discussed in this section are those that we consider to be the most critical to an understanding
of our consolidated financial statements because they inherently involve significant judgments and uncertainties. For a discussion of
our significant accounting policies, refer to Note 1 of the notes to the consolidated financial statements in Part II, Item 8, Financial
Statements and Supplementary Data.

 Allowance
for Credit Losses

 The
allowance for credit losses is reviewed for adequacy based on portfolio collateral values and credit quality indicators, including
non-performing assets, evaluation of portfolio diversification and concentration as well as economic conditions to determine the need
for a qualitative adjustment. We review our finance receivables periodically to determine the probability of loss, and record charge-offs
after considering such factors as delinquencies, the financial condition of obligors, the value of underlying collateral, as well as
third-party credit enhancements such as guarantees.

 The
process of determining the level of the allowance for credit losses requires a high degree of judgment. Others given the same information
could reach different reasonable conclusions.

 Finance Receivables

receivables are measured based upon the difference between the recorded investment in each receivable and either the present value of
the expected future cash flows discounted at each receivable's effective interest rate (the receivable's contractual interest
rate adjusted for any deferred fees, costs, discount or premium at the date of origination or acquisition) or if a receivable is collateral
dependent, the collateral's fair value. When impairment is determined to be probable, the measurement will be based on the fair
value of the collateral. The determination of impairment involves management's judgment and the use of market and third party estimates
regarding collateral values. Valuations of impaired receivables and corresponding impairment affect the level of the reserve for credit
losses.

 Revenue Recognition

Receivables Segment

 Our
Finance Receivables segment records interest income on an accrual basis based on the effective interest rate method to the extent that
we expect to collect such amounts. Incentive fees, if any, are recognized when earned at the end of the relevant performance period,
pursuant to the underlying contract. Other administrative service revenues are recognized when contractual obligations are fulfilled
or as services are provided.

Development Segment

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

 In
determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, we perform
the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised
goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement of
the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting
for these arrangements, the Company must use its judgment to determine: (a) the number of performance obligations based on the determination
under step (ii) above; (b) the transaction price under step (iii) above; (c) the stand-alone selling price for each performance obligation
identified in the contract for the allocation of transaction price in step (iv) above; and d) the contract term and pattern of satisfaction
of the performance obligations under step (v) above. Management uses judgment to determine whether milestones or other variable consideration,
except for royalties, should be included in the transaction price as described further below. The transaction price is allocated to each
performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance
obligations under the contract are satisfied.

 Amounts
received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in our consolidated balance sheets. Amounts
expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current deferred revenue.
Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue,
net of current portion.

 Fair Value of Financial Instruments

 The
fair value of our financial instruments reflects the amounts 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).

 Our financial instruments not required to be adjusted to fair value on a recurring basis consist principally of cash, cash equivalents,
and accounts and finance receivables, accounts payable, and accrued expenses. We believe the carrying amount of cash and accounts and
finance receivable, accounts payable and accrued expenses approximate fair value due to their relatively short maturities.

 Income Taxes

 The
recognition of certain net deferred tax assets of our reporting entities are dependent upon, but not limited to, the future profitability
of the reporting entity, when the underlying temporary differences will reverse, and tax planning strategies. Further, management's
judgment regarding the use of estimates and projections is required in assessing our ability to realize the deferred tax assets relating
to NOL carryforwards, as most of these assets are subject to limited carryforward periods.

 We
will continue to assess the need for a valuation allowance on the deferred tax assets by evaluating both positive and negative evidence
that may exist at each reporting date. Any adjustments to the deferred tax asset valuation allowance is recorded in the statement of
operations in the period it is determined an adjustment is required.

 Please
refer to Note 12 of the notes to the consolidated financial statements in Part II, Item 8, Financial Statements and Supplementary
Data.

 Recent Accounting Pronouncements

 For
a discussion of recent accounting pronouncements, refer to Note 1 of the notes to the consolidated financial statements in Part II, Item
8, Financial Statements and Supplementary Data.

 Results of Operations

 This section of this
Annual Report generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. Discussion of 2021 items and
year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report can be found in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report
on Form 10-K for the year ended December 31, 2022.

 Comparison of the Years Ended
December 31, 2023 and 2022

 The following table summarizes the
results of our operations for the years ended December 31, 2023 and 2022:

 (in millions)

 For the Year Ended
December
 31,

 2023

 2022

 Change

 Revenues

 $
 37.8

 $
 41.5

 $
 (3.7
)

 1.9

 3.5

 (1.6
)

 Interest expense

 1.8

 0.3

 1.5

 8.4

 —

 8.4

 Pharmaceutical manufacturing, research and development expense

 3.4

 7.0

 (3.6
)

 Increase (decrease) in fair value of acquisition-related contingent consideration

 (6.3
)

 5.2

 (11.5
)

 2.6

 2.6

 —

 General and administrative expense

 11.2

 13.0

 (1.8
)

 Other (expense) income, net

 —

 (0.5
)

 0.5

 Income tax expense

 (1.3
)

 (4.0
)

 2.7

 Net income

 15.9

 13.5

 2.4

 Revenues

 We
generated revenues of $37.8 million and $41.5 million for the years ended December 31, 2023 and 2022, respectively. The $3.7 million decrease
in revenue for the year ended December 31, 2023, consisted mainly of a $4.3 million decrease in Pharmaceutical Development segment revenue
and a $0.9 million increase in Finance Receivables segment revenue. The decrease in Pharmaceutical Development segment revenue was primarily
due to $5.0 million of milestone revenue related to Enteris' license agreement ("License Agreement") with Cara Therapeutics, Inc.
("Cara") received during the year ended December 31, 2022, and no similar milestone revenue was recognized during year end December 31,
2023. The $0.9 million increase in Finance Receivables segment revenue was primarily due to $9.0 million increase in interest and fees
earned due to funding new and existing loans and a $3.8 million increase in interest earned on our finance receivables due to an overall
increase in reference rates. The increase was partially offset by a net $1.2 million decrease in royalty revenue when compared to the
same period of the previous year and an $10.5 million decrease in interest, royalties and fees earned on finance receivables that were
paid off in 2022.

 Allowance for
Credit Losses

 Our
allowance for credit losses is established through charges or credits to income in the form of the provision in order to bring our allowance
for credit losses for loans and unfunded commitments to a level deemed appropriate by management. We recognized Allowance for credit loss
expense of $1.9 million and $3.5 million during the years ended December 31, 2023 and 2022, respectively (please refer to Part II, Item
8, Financial Statements and Supplementary Data, Note 3 of the notes to the consolidated financial statements for further information on
the allowance for credit losses).

 Interest Expense

 Interest expense consists
of interest accrued on our revolving line of credit, 9.00% Senior Notes due 2027 ("Notes"), unused line of
credit and maintenance fees, as well as amortization of debt issuance costs. Interest expense increased to $1.8 million for the year
ended December 31, 2023 from $0.3 million for the year ended December 31, 2022. This increase in interest expense was mainly due to issuing
approximately $32.9 million of Notes in an underwritten public offering in October of 2023. Additionally,
during the year ended December 31, 2023 there was acceleration of debt issuance costs related to the Prior Credit Agreement with Cadence
Bank, as well as interest expense incurred on both the Prior Credit Agreement and the new Credit Agreement with First Horizon Bank. See
Note 6 for further information on the Notes, new Credit Agreement, and Prior Credit Agreement.

 Impairment of
Goodwill

 We
recognized a $8.4 million impairment charge during the year ended December 31, 2023. As part of the Company's annual goodwill impairment
analysis, the Company elected to bypass the qualitative goodwill impairment assessment and proceed directly with a quantitative assessment.
The goodwill impairment test concluded that the fair value of the Company's Pharmaceutical Development reporting unit did not exceed
the carrying amount and the Company recognized an impairment charge of $8.4 million and reduced the goodwill balance to $0. Refer
to Note 2 for further information.

Manufacturing, Research and Development Expense

manufacturing, research and development expense decreased from $7.0 million for the year ended December 31, 2022 to $3.4 million for
the year ended December 31, 2023. The $3.6 million decrease was primarily due to a reduction in headcount, as well as a reduction in
research and development and clinical trial expenditures.

 Change in Fair Value of Contingent
Consideration

 We
recognized a $6.3 million gain from the change in fair value of acquisition-related contingent consideration during the year ended December
31, 2023 and recognized a $5.2 million loss in 2022. The contingent consideration is the earnout related to the 2019 acquisition of Enteris
and sharing of certain milestone and royalties due to Enteris pursuant to the License Agreement with Cara for oral formulation rights
to Enteris' Peptelligence technology to develop and commercialize Oral KORSUVA in any indication worldwide, excluding South
Korea and Japan (please refer to Part II, Item 8, Financial Statements and Supplementary Data, Note 7 of the notes to the consolidated
financial statements for further information on contingent consideration). The carrying amount of the liability may fluctuate significantly,
and actual amounts paid may be materially different from the estimated value of the liability.

 Depreciation
and Amortization

 Depreciation
and amortization expense for the year ended December 31, 2023 and 2022 was $2.6 million. Amortization expense is aligned with the expected
future cash flows of the intangible assets.

 General and Administrative

 General
and administrative expenses consist primarily of compensation, including stock-based compensation and related costs for management, staff
and Board; legal and audit expenses; and corporate governance expenses. General and administrative expenses decreased to $11.2 million
for the year ended December 31, 2023 from $13.0 million for the year ended December 31, 2022. The $1.8 million decrease was primarily
driven by a one-time severance payment of $1.1 million paid to the former CEO during the three months ended September 30, 2022; a $0.8
million decrease in one-time professional fees and other expense related to corporate strategic planning; and a net $0.5 million decrease
in Pharmaceutical Development segment operational expenses due to a reduction in headcount and business development expense. The decrease
was partially offset by a $0.6 million increase in salaries and wages for the Finance Receivables segment due to additional headcount
and annual pay increases.

 Other
(Expense) Income, Net

 Other
expense, net for the year ended December 31, 2023 was approximately $36.9 thousand which consisted of a realized loss of $0.8 million
from the write off of warrants and a net aggregate fair market value loss of approximately $54.4 thousand on our warrant derivatives.
This was offset by a $0.8 million gain from the remeasurement of foreign currency transactions into our functional currency.

 Other income,
net for the year ended December 31, 2022 reflected a net aggregate fair market value gain of $0.4 million on our warrant derivatives
and a net fair value loss $0.5 million on the change in fair value of our Bioventus and Harrow common stock. Additionally,
a realized loss $0.2 million was reflected on the sale of our Bioventus and Harrow common stock, in addition to a $0.2 million
loss from the remeasurement of foreign currency transactions into our functional currency, net of changes in fair value of the foreign
currency forward contract.

 Income
Tax (Benefit) Expense

 During the years ended December 31, 2023 and 2022, we recognized income tax benefit of $1.3 million and $4.0 million, respectively. The $2.7 million
decrease in income tax benefit is mainly the result of releasing the valuation allowance against deferred tax assets.

 As of December 31, 2023 and 2022, our cumulative gross deferred tax assets were $28.4 million and $33.1 million, respectively. Based on historical
and expected future operating performance, we concluded that it was more likely than not that we will not be able to realize the full
benefit of the U.S. federal and state deferred tax assets in the future. The valuation allowance against deferred tax assets was $0 and
$6.7 million as of December 31, 2023 and 2022, respectively. As of December 31, 2023, we believe it is more likely than not that we will
realize approximately $28.3 million of benefit from the U.S. federal and state deferred tax assets in the future.

 As of December 31, 2023, we had NOLs for federal income tax purposes of $87.7 million. The federal NOL carryforwards, if not offset
against future income, will expire by 2037. Approximately $6.9 million of the $87.7 million can be carried forward indefinitely.
We also had federal research credit carryforwards of $3.0 million. The federal federal research credits begin to expire in 2023 and
will fully expire by 2042.

 Liquidity
and Capital Resources

 As of December 31, 2023, we had $5.2 million in cash, cash equivalents and restricted cash, compared to $6.2 million as of December 31, 2022.
The primary driver of the $0.9 million decrease in our cash balance was $55.8 million of interest, fees, principal and royalty payments
received on our finance receivables, a $9.9 million net increase on our credit facility, a $0.9 million increase in Enteris revenue receipts,
and $33.0 million cash received from the issuance of Senior Notes. The increase in cash and cash equivalents was offset by $74.1 million
of investment funding, net of deferred fees and origination expenses; payroll, accounts payable and credit facility closing costs of $18.4
million; and $6.3 million to repurchase shares of the Company's common stock in the open market.

 We
entered into a new $45.0 million revolving credit facility in June 2023 with First Horizon Bank. The Credit Agreement provides for one
or more incremental increases not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any time prior to the
Commitment Termination Date. On October 10, 2023, the Company entered into a First Amendment to Credit Agreement pursuant to which Woodforest
National Bank was added as a lender under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate
commitments under the Credit Agreement from $45.0 million to $60.0 million. As of December 31, 2023, $12.4 million was outstanding under
the new Credit Agreement, and $47.7 million was available for borrowing.

 Our Prior Credit Agreement with Cadence Bank was terminated in connection with the establishment of the new Credit Agreement (please refer
to Part II, Item 8, Financial Statements and Supplementary Data, Note 6 of the notes to the consolidated financial statements for further
information regarding the Credit Agreement with First Horizon Bank).

 On October 3, 2023,
the Company completed a registered underwritten public offering of $30.0 million of the Notes. On October 27, 2023, the underwriters
exercised their option to purchase an additional approximately $3.0 million in aggregate principal amount of the Notes. The Notes
will mature on January 31, 2027, unless earlier redeemed, and will bear interest at a rate of 9.00 percent per annum, payable quarterly
in arrears on March 31, June 30, September 30 and December 31 of each year and at maturity, commencing on December 31, 2023. The Company
received net proceeds after discounts, commissions, expenses and fees, of approximately $30.6 million.

 Primary Driver of Cash Flow

 Our
ability to generate cash in the future depends primarily upon our success in implementing our Finance Receivable segment business model
of generating income by providing capital to a broad range of life science companies, institutions and inventors, as well as the success
of our Pharmaceutical Development segment. We generate income primarily from four sources:

 1.

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

 2.

 Receiving interest and other income by advancing
 capital in the form of secured debt to companies in the life science sector;

 3.

 Pharmaceutical development, manufacturing, and
 licensing activities; and

 4.

 To a lesser extent, realizing capital appreciation
 from equity-related investments in the life science sector.

 As
of December 31, 2023, our finance receivables portfolio contains $274.5 million of net finance receivables and $48,000 of marketable investments.
We expect these assets to generate positive cash flows in 2024. We continuously monitor the short and long-term financial position of
our finance receivables portfolio. In addition, the majority of our finance receivables portfolio are debt instruments that carry floating
interest rates. Changes in interest rates, including the levels of the underlying reference rates may affect the interest income for debt
instruments with floating rates. We believe we are well positioned to benefit should market interest rates rise in the future.

 We
continue to evaluate multiple attractive opportunities that, if consummated, we believe would similarly generate additional income. Since
the timing of any investment is difficult to predict, our Finance Receivables segment may not be able to generate positive cash flow
above what our existing assets are expected to produce in 2023. We do not assume any near-term repayments from borrowers, and as a result,
no assurances can be given that actual results would not differ materially from the statement above.

 Off-Balance Sheet Arrangements

 In
the normal course of operations, we engage in a variety of financial transactions that, in accordance with GAAP, are not recorded in
our consolidated financial statements. These transactions involve, to varying degrees, elements of credit, interest rate, and liquidity
risk. Such transactions are used primarily to manage partner companies' requests for funding and take the form of loan commitments
and lines of credit.

 The
contractual amounts of commitments to extend credit represent the amounts of potential accounting loss should the contract be fully drawn
upon, the partner company defaults, and the value of any existing collateral becomes worthless. We use the same credit policies in making
commitments and conditional obligations as we do for on-balance sheet instruments.

 As
of December 31, 2023, we had $5.0 million of unfunded commitments. Please refer to Part II, Item 8, Financial Statements, Note
7 of the notes to the consolidated financial statements for further information regarding the Company's commitments and contingencies.

 ITEM 7A. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

the year ended December 31, 2023, our cash and cash equivalents were deposited in accounts at well capitalized financial institutions.
The fair value of our cash and cash equivalents at December 31, 2023, approximated its carrying value.

 Investment and Interest Rate
Risk

 We
are subject to financial market risks, including changes in interest rates. Interest rate risk is defined as the sensitivity of our current
and future earnings to interest rate volatility, variability of spread relationships, the difference in re-pricing intervals between
our assets and liabilities and the effect that interest rates may have on our cash flow.

 As
we seek to provide capital to a broad range of life science companies, institutions and investors with the majority of our finance receivables
portfolio paying interest based on floating interest rates, our net investment income is dependent, in part, upon the difference between
the rate at which we earn on our cash and cash equivalents and the rate at which we lend those funds to third parties. As a result, we
are subject to risks relating to changes in market interest rates. We may use interest rate risk management techniques in an effort to
limit our exposure to interest rate fluctuations by providing capital at variable interest rates. We do not currently engage in any interest
rate hedging activities. We constantly monitor our portfolio and position our portfolio to respond appropriately to a reduction in credit
rating of any of our investments.

 We
entered into a revolving credit facility. As we borrow funds to make additional investments, our income will depend, in part, upon the
difference between the rate at which we borrow funds and the rate at which we invest those funds. As a result, we are subject to risks
relating to changes in market interest rates. In periods of rising interest rates when we have debt outstanding, our cost of funds would
increase, which could reduce our income, especially to the extent we continue to hold fixed rate investments. We generally seek to mitigate
this risk by pricing our debt investments with floating interest rates to maintain the spread of our portfolio over the cost of leverage.
If deemed prudent, we may use interest rate risk management techniques in an effort to minimize our exposure to interest rate fluctuations,
which we have not done. Adverse developments resulting from changes in interest rates or hedging transactions could have a materially
adverse effect on our business, financial condition and results of operations. Accordingly, there can be no assurance that a significant
change in market interest rates will not have a material adverse effect on our investment income, net of borrowing expenses.

 Inflation

 Certain
of our partner companies may be impacted by inflation. If such partner companies are unable to pass any increases in their costs along
to their customers, it could adversely affect their results and impact their ability to pay interest and principal on our loans. In addition,
any projected future decreases in our partner companies' operating results due to inflation could adversely impact the fair value
of those investments. Any decreases in the fair value of our investments could result in future unrealized losses and therefore reduce
carrying value of our net assets.

 ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA

 SWK
HOLDINGS CORPORATION

TO FINANCIAL STATEMENTS

 Contents

 Page

 Report
 of Independent Registered Public Accounting Firm (PCAOB ID # 207)

 Financial Statements

 Balance Sheets

 Statements of Income

 Statements of Stockholders' Equity

 Statements of Cash Flows

 Notes
 to the Consolidated Financial Statements

 Report Of Independent
Registered Public Accounting Firm

 To the Stockholders
and Board of Directors of

 SWK Holdings
Corporation

 Opinion on
the Consolidated Financial Statements

 We have audited the accompanying consolidated
balance sheets of SWK Holdings Corporation and its subsidiaries (the "Company") as of December 31, 2023 and 2022, the related
consolidated statements of income, stockholders' equity, and cash flows, for each of the two years in the period ended December
31, 2023, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the
consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of
December 31, 2023 and 2022, and the consolidated results of its operations and its cash flows for each of the two years in the period
ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

 Basis for
Opinion

 These consolidated
financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted
our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits,
we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or
fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding
the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used
and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audits provide a reasonable basis for our opinion.

 Critical Audit
Matters

 The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are
material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication
of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we
are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts
or disclosures to which they relate.

 Valuation
of Finance Receivables

 As
described in Note 3 to the consolidated financial statements, the Company's consolidated finance receivables balance was $274.5
million as of December 31, 2023, which is net of the allowance for credit losses of $13.9 million. The Company generated $36.3 million
of finance receivable interest income, including fees during the year ended December 31, 2023. The Company's finance receivables
are stated at amortized cost, net of unamortized origination fees, if any. Interest income on the finance receivables is recorded on an
accrual basis based on the effective interest rate method to the extent that the Company expects to collect such amounts. The Company
evaluates the collectibility of both interest and principal for each finance receivable to determine whether it is impaired. A finance
receivable is considered to be impaired when, based on current information and events, the Company determines it is probable that it will
be unable to collect amounts due according to existing contractual terms. When a loan is considered to be impaired, the amount of loss
is calculated by comparing the carrying value of the finance receivable to the value determined by discounting the expected future cash
flows. If actual cash flows were to be substantially lower than estimated, there could be a significant adverse impact on the carrying
value of the finance receivables and results of operations.

 The principal considerations for our determination that performing procedures relating to valuation of the finance receivables is a critical
audit matter are its overall impact on the consolidated financial statements, including the realization of the Company's deferred
tax assets, and the significant amount of judgement by management in developing the assumptions of the expected future cash flows, which
in turn led to significant auditor judgement, subjectivity, and effort in performing audit procedures and evaluating audit evidence relating
to the expected future cash flows. Additionally, for certain finance receivables, there may be limited historical data with which to evaluate
the expected future cash flows.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the
consolidated financial statements. These procedures included, among others, (i) evaluating management's process and valuation method
for developing the estimate of expected cash flows of its finance receivables and potential credit losses; (ii) testing the completeness
and accuracy of the underlying data used in the estimate; and (iii) evaluating management's assumptions used to estimate future
cash flows. Evaluating management's assumptions used to estimate future cash flows for reasonableness involved (i) considering historical
cash flows from the Company's finance receivable portfolio; (ii) comparing prior period estimates to actual results of the same
period; (iii) publicly available information which supports or is to the contrary of the estimated future cash flows and; (iv) determining
whether the estimated cash flows used were consistent with evidence obtained in other areas of the audit.

 Quantitative Goodwill Impairment Assessment
- Enteris Reporting Unit

 As described in Note 2 to the consolidated financial
statements, the net book value of the Company's goodwill asset is solely related to the Company's acquisition of Enteris BioPharma,
Inc. (Enteris) in 2019. During the year ended December 31, 2023, the Company recognized goodwill impairment expense of $8.4 million.

 Management tests goodwill for impairment annually
during the fourth fiscal quarter as well as whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
To determine the fair value of the reporting unit, management utilized the results derived from an income valuation approach. The income
approach is estimated through a probability-adjusted discounted cash flow analysis. This valuation technique requires management to make
significant estimates and assumptions related to discount rates and forecasts of revenues and earnings.

 The principal consideration for our determination
that performing procedures relating to the quantitative goodwill impairment assessment for the Enteris reporting unit is a critical audit
matter is the significant judgment by management when determining the fair value of the reporting unit, which in turn led to significant
auditor judgment, subjectivity and effort in performing procedures and evaluating management's significant assumptions related to
forecasts of revenues, earnings and discount rates, as these assumptions may have a significant effect on the Company's assessment
of the carrying value of the goodwill of the reporting unit.

 Addressing the matter involved performing procedures
and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included, among others, (i) testing management's process for developing the fair value estimate of the reporting unit; (ii) evaluating
the appropriateness of management's valuation model; (iii) testing the completeness and accuracy of underlying data used in the
valuation model; (iv) evaluating the significant assumptions used by management related to the projected revenues, earnings, and margins,
and the discount rate, and (v) underlying analysis detailing business strategies and plans, including internal communications to management
and the Board of Directors. Evaluating management's assumptions related to projected revenues, earnings and margins involved evaluating
whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii)
evaluating management's process and valuation method for developing the estimate of expected cash flows; (iii) the consistency with
external market data, and (iv) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals
with specialized skill and knowledge were used to assist in the evaluation of the Company's valuation approach and the discount
rate.

 Valuation of Contingent Consideration Payable

 As described in Note 7 and Note 9 to the consolidated financial
statements, the Company recorded contingent consideration related to the August 2019 acquisition of Enteris and sharing of certain milestone
and royalties due to Enteris under a license agreement. The Company evaluates the fair value of contingent consideration payable at each
reporting date. During the year ended December 31, 2023, the Company recognized a remeasurement gain of $6.3 million for contingent consideration
payable.

 To determine the fair value of contingent consideration
payable, management utilized the results derived from an income valuation approach, whereby management estimates probability-adjusted
discounted cash flows. This valuation technique requires management to make significant estimates and assumptions related discount rates
and forecasts of probability-adjusted cash flows.

 The principal consideration for our determination
that performing procedures relating to contingent consideration payable is a critical audit matter is the significant judgment by management
when determining the fair value of contingent consideration payable, which in turn led to significant auditor judgment, subjectivity and
effort in performing procedures and evaluating management's significant assumptions related to forecasts of probability-adjusted
cash flows from the license agreement and discount rates, as these assumptions may have a significant effect on the Company's assessment
of the fair value of contingent consideration payable. Additionally, the valuation of contingent consideration payable is inherently interrelated
to the Company's goodwill impairment assessment for the Enteris reporting unit.

 Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our
overall opinion on the consolidated financial statements. These procedures included, among others, (i) testing management's process
for developing the fair value estimate; (ii) evaluating the appropriateness of management's valuation model; (iii) testing the completeness
and accuracy of underlying data used in the valuation model; and (iv) evaluating the significant assumptions used by management related
to the projected cash flows and the discount rate. Evaluating management's assumptions related to projected cash flows involved
evaluating whether the assumptions used by management were reasonable considering (i) evaluating management's process and valuation
method for developing the estimate of expected cash flows, (ii) consistency with external market data, and (iii) whether these assumptions
were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist
in the evaluation of the Company's valuation approach and the discount rate.

 /s/ BPM LLP

 We have served
as the Company's auditor since 2006.

 San Francisco,
California

 March 20,
2024

 SWK HOLDINGS

 CONSOLIDATED
BALANCE SHEETS

 (In thousands,
except share data)

 Year
 Ended
 December
 31,

 2023

 2022

 Assets

 Current assets:

 Cash and cash equivalents

 $
 4,503

 $
 6,156

 Restricted cash

 —

 Interest and accounts receivable, net

 4,729

 3,094

 Other current assets

 1,904

 1,114

 Total current assets

 11,869

 10,364

 Finance receivables, net

 Collateral on foreign currency forward contract

 2,750

 2,750

 Deferred tax assets, net

 28,290

 24,480

 1,759

 1,220

 Goodwill

 —

 8,404

 Intangible assets, net

 6,487

 8,190

 Property and equipment, net

 5,438

 5,840

 Other non-current assets

 3,109

 1,742

 Total assets

 $
 334,254

 $
 299,621

 Liabilities and Stockholders' Equity

 Current liabilities:

 Accounts payable and accrued liabilities

 $
 3,944

 $
 3,902

 Revolving credit facility

 —

 2,445

 Total current liabilities

 3,944

 6,347

 4,900

 Unsecured senior notes, net

 30,781

 —

 Revolving credit facility

 12,350

 —

 Other non-current liabilities

 1,964

 2,145

 Total liabilities

 53,939

 19,692

 Commitments and contingencies (Note 7)

 Stockholders' equity:

 Preferred Stock, $ 0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding

 —

 —

 Common stock, $ 0.001
 par value; 250,000,000 shares
 authorized; 12,497,770 and
 12,843,157 shares issued and outstanding
 at December 31, 2023 and 2022, respectively

 Additional paid-in capital

 4,425,104

 4,430,922

 Accumulated deficit

 ( 4,144,801
)

 ( 4,151,005
)

 Total stockholders' equity

 280,315

 279,929

 Total liabilities and stockholders' equity

 $
 334,254

 $
 299,621

 See accompanying
notes to the consolidated financial statements.

 S WK HOLDINGS

 CONSOLIDATED
STATEMENTS OF INCOME

 (In thousands,
except per share data)

 Year Ended December
 31,

 2023

 2022

 Revenues:

 Finance receivable interest income, including
 fees

 $
 36,346

 $
 35,461

 Pharmaceutical development

 1,202

 5,485

 Other

 Total revenues

 37,760

 41,484

 Costs and expenses:

 1,912

 3,491

 8,404

 —

 Interest expense

 1,849

 Pharmaceutical manufacturing, research and development expense

 3,436

 6,952

 General and administrative

 11,232

 12,964

 Change in fair value of acquisition-related contingent consideration

 ( 6,300
)

 5,170

 2,577

 2,599

 Income from operations

 14,650

 9,968

 Other income (expense), net

 Unrealized net (loss) gain on warrants

 ( 55
)

 Unrealized net loss on equity securities

 —

 ( 528
)

 Realized loss from sale of investments

 ( 799
)

 ( 151
)

 Foreign currency transaction gain (loss)

 ( 215
)

 Income before income tax benefit

 14,613

 9,491

 Income tax benefit

)

)

 Net income

 $

 $

 Net income per share

 Basic

 $
 1.26

 $
 1.05

 Diluted

 $
 1.25

 $
 1.05

 Weighted average shares outstanding

 Basic

 12,653

 12,835

 Diluted

 12,696

 12,880

 See accompanying
notes to the consolidated financial statements.

 SWK HOLDINGS

 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' EQUITY

 (In
thousands, except share data)

 Total

 Common Stock

 Additional

 Accumulated

 Stockholders'

 Shares

 Amount

 Paid-In
 Capital

 Deficit

 Equity

 Balances
 at December 31, 2021

 12,836,133

 $

 $
 4,431,719

 $
 ( 4,164,496
)

 $
 267,236

 Stock-based
 compensation

 —

 —

 —

 Issuance
 of common stock upon vesting of restricted stock

 54,666

 —

 —

 —

 —

 Forfeiture
 of unvested restricted stock

 ( 6,815
)

 —

 —

 —

 —

 Net
 settlement for employee taxes on restricted stock and options

 —

 —

 ( 160
)

 —

 ( 160
)

 Stock
 options exercised, net

 23,074

 —

 —

 —

 —

 Repurchases
 of common stock in the open market

 ( 63,901
)

 ( 1
)

 ( 1,137
)

 —

 ( 1,138
)

 Net
 income

 —

 —

 —

 Balances
 at December 31, 2022

 12,843,157

 4,430,922

 ( 4,151,005
)

 279,929

 Stock-based
 compensation

 —

 —

 —

 Issuance
 of common stock upon vesting of restricted stock

 29,978

 —

 —

 —

 —

 Effect
 of adoption of ASU 2016-13

 —

 —

 —

 ( 9,683
)

 ( 9,683
)

 Stock
 options exercised, net

 —

 —

 —

 —

 Repurchases
 of common stock in the open market

 ( 375,826
)

 —

 ( 6,327
)

 —

 ( 6,327
)

 Net
 income

 —

 —

 —

 Balances
 at December 31, 2023

 12,497,770

 $

 $
 4,425,104

 $
 ( 4,144,801
)

 $
 280,315

 See accompanying
notes to the consolidated financial statements.

 SWK HOLDINGS

 CONSOLIDATED
STATEMENTS OF CASH FLOWS

 (In thousands)

 Year Ended December 31,

 2023

 2022

 Cash flows from operating activities:

 Net income

 $

 $

 Adjustments to reconcile net income to net cash provided
 by operating activities:

 1,912

 3,491

 Amortization of debt issuance costs

 8,404

 —

 Right-of-use asset amortization

 Deferred income taxes

 ( 1,286
)

 ( 3,941
)

 Change in fair value of warrants

 ( 417
)

 Change in fair value of equity securities

 —

 Realized loss from write down of warrant assets

 —

 Foreign currency transaction (gain) loss

 ( 1,876
)

 Loss on sale of marketable securities

 —

 Change in fair value of acquisition-related contingent consideration

 ( 6,300
)

 5,170

 Loan discount and fee accretion

 ( 3,827
)

 ( 2,204
)

 Interest paid-in-kind

 ( 1,826
)

 ( 5,995
)

 Stock-based compensation

 2,577

 2,599

 Changes in operating assets and liabilities:

 Interest and accounts receivable

 ( 1,635
)

 ( 1,291
)

 Derivative assets and liabilities, net

 1,059

 ( 539
)

 Collateral on forward currency exchange contract

 —

 ( 2,750
)

 Other assets

 ( 787
)

 ( 44
)

 Accounts payable and other liabilities

 ( 1,599
)

 Net cash provided by operating activities

 14,887

 8,202

 Cash flows from investing activities:

 Proceeds from sale of investment and finance receivables

 13,942

 4,151

 Investment in finance receivables

 ( 74,125
)

 ( 93,118
)

 Repayment of finance receivables

 11,703

 45,673

 Corporate debt securities principal payments

 Purchases of property and equipment

 ( 496
)

 ( 297
)

 Net cash used in investing activities

 ( 48,948
)

 ( 43,548
)

 Cash flows from financing activities:

 Net settlement for employee taxes on restricted stock and
 options

 —

 ( 160
)

 Payments for financing costs

 ( 3,407
)

 —

 Repurchases of common stock, including fees and expenses

 ( 6,327
)

 ( 1,138
)

 Proceeds from senior unsecured notes

 32,969

 —

 Net proceeds from revolving credit facilities

 9,905

 2,437

 Payment of acquisition-related contingent consideration

 —

 ( 2,500
)

 Net cash provided by (used in) financing activities

 33,140

 ( 1,361
)

 Net decrease in cash, cash equivalents and restricted cash

 ( 920
)

 ( 36,707
)

 Cash, cash equivalents and restricted cash, beginning of period

 6,156

 42,863

 Cash, cash equivalents and restricted cash, end of period

 $
 5,236

 $
 6,156

 Supplemental noncash flow activity:

 Warrants received in connection with finance receivables

 $
 1,364

 $
 1,180

 Cash paid for interest

 $
 1,351

 $

 Fair value of common stock received upon exercise of warrant

 $
 —

 $
 3,667

 See accompanying
notes to the consolidated financial statements.

 SWK HOLDINGS

 NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

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

 Nature of Operations

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

 The
Company has net operating loss carryforwards ("NOLs") and believes that the ability to utilize these NOLs is an important
and substantial asset.

 As
of March 14, 2024, the Company and its partners have executed transactions with 55 different parties under its specialty finance
strategy, funding an aggregate $779.4 million in various financial products across the life science sector. The Company's portfolio
includes senior and subordinated debt backed by royalties and synthetic royalties paid by companies in the life science sector, and purchased
royalties generated by sales of life science products and related intellectual property.

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

 Basis of Presentation and Principles
of Consolidation

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

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

 Use of Estimates

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

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

 Segment Information

 The
Company earns revenues from its two U.S.-based business segments: its specialty finance and asset management business offering customized
financing solutions to a broad range of life-sciences companies, and its business offering clinical development and manufacturing services
to pharmaceutical partners as well as innovative formulation solutions built around its proprietary oral drug delivery technologies,
the Peptelligence platform.

 Goodwill
and Intangible Assets

 The
Company's methodology for allocating the purchase price of an acquisition is based on established valuation techniques that reflect
the consideration of a number of factors, including a valuation performed by a third-party appraiser. Goodwill is measured as the excess
of the cost of an acquired business over the fair value assigned to identifiable assets acquired and liabilities assumed. Goodwill is
considered impaired when the estimated fair value of the reporting unit that was allocated the goodwill is less than its carrying value.
If the estimated fair value of such reporting unit is less than its carrying value, goodwill impairment is recognized based on that difference,
not to exceed the carrying amount of goodwill. A reporting unit is an operating segment or a component of an operating segment provided
that the component constitutes a business for which discrete financial information is available and management regularly reviews the
operating results of that component. Goodwill arising from the Enteris acquisition has been allocated to the Pharmaceutical Development
segment.

 Finite-lived intangible assets are amortized over their estimated useful life, which is the period over which the assets are expected to contribute
directly or indirectly to the future cash flows of the Company. Goodwill and indefinite-lived intangible assets are not amortized, but
instead, are subject to annual impairment testing. We review goodwill and indefinite-lived intangible assets for impairment annually during
the fourth quarter and continually assess whether a triggering event has occurred to determine whether the carrying value exceeds the
implied fair value. For the year ended December 31, 2023, the Company identified indicators of impairment for identifiable finite-lived
intangible assets due to the lowering of financial expectations for the License Agreement. The Company performed a Step 2 recoverability
test in accordance with Accounting Standards Codification ("ASC") 350, Property, Plant and Equipment and determined that the sum of undiscounted
future cash flows exceeded the carrying value. As such, no further analysis was performed and no impairment
was recognized on identifiable finite-live intangible assets. For the year ended December 31 2022, the Company determined there were no
indicators of impairment relating to identifiable finite-lived intangible assets.

 The
identification and measurement of goodwill impairment involves the estimation of the fair value of the reporting unit. We have the option
to assess impairment through a qualitative assessment, which includes factors such as general economic conditions, negative developments
in equity and credit markets, adverse changes in the markets in which a reporting unit operates, increases in input costs that have a
negative effect on earnings and cash flows, or a trend of negative or declining cash flows over multiple periods, among others. When
a potential impairment is indicated, we perform quantitative testing by comparing the estimated fair value of the reporting unit to the
carrying value of the reported net assets. We also have the unconditional option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. Under our quantitative testing, fair value is generally based on the income approach
using a calculation of discounted cash flows, based on the most recent financial projections for the reporting unit. The revenue growth
rates included in the financial projections are our best estimates based on current and forecasted market conditions, and the profit
margin assumptions are projected by the reporting unit based on current cost structure and, when applicable, anticipated net cost reductions.

 During the year ended December 31, 2023, as a result
of decreasing the financial expectations for the License Agreement, the Company elected to bypass the qualitative goodwill impairment assessment
and proceed directly with a quantitative assessment. The goodwill impairment test concluded that the fair value of the Company's Pharmaceutical
Development reporting unit did not exceed the carrying amount and the Company recognized an impairment charge of $8.4 million for the
year ended December 31, 2023, and reduced the goodwill balance to $0 as of December 31, 2023. Refer to Note 2 for further information.

 Inventory

 Inventories
are stated at the lower of cost or net realizable value, valued at specifically identified cost which approximates the first-in, first-out
method. The components of inventory include raw materials of $ 0.6 million as of both December 31, 2023 and 2022 and are reflected in
current assets in the consolidated balance sheets.

 Property
and Equipment, Net

 Property
and equipment are recorded at cost less accumulated depreciation and amortization. Expenditures for major additions and improvements
are capitalized, while minor replacements, maintenance, and repairs are charged to expense as incurred. In addition, we capitalize interest
on borrowings during the active construction period of capital projects. Capitalized interest is added to the cost of the assets and
depreciated over the estimated useful lives of the assets. Leased property meeting certain criteria is capitalized and the present value
of the related lease payments is recorded as a liability and included in current liabilities.

 Depreciation
is recorded over the estimated useful lives of the assets involved using the straight-line method. Leasehold improvements and capitalized
lease assets are amortized to depreciation expense over the estimated useful life of the asset or the respective lease term used in determining
lease classification, whichever is shorter. The range of estimated useful lives is as follows:

 Schedule of Useful Life of Property and Equipment, Net

 Asset

 Estimated
 Useful Life

 Leasehold improvements

 Lesser of lease term or useful life

 Furniture, fixtures and equipment

 3 to 15 years

 Deferred
Revenue and Deferred Costs

 Deferred
revenue includes amounts that have been billed per the contractual terms but have not been recognized as revenue. The Company classifies
as current the portion of deferred revenue that is expected to be recognized within one year from the balance sheet date. Deferred revenue
was $ 9,000 and $ 33,000 as of December 31, 2023 and 2022, respectively, and is included in accounts payable and accrued liabilities in
the consolidated balance sheets.

 Research
and Development

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

Receivables

 The
Company extends credit to customers through a variety of financing arrangements, including revenue interest term loans. The amounts outstanding
on loans are referred to as finance receivables and are included in finance receivables in the consolidated balance sheets. It is the
Company's expectation that the loans originated will be held for the foreseeable future or until maturity. In certain situations,
for example to manage concentrations and/or credit risk, some or all of certain exposures may be sold. Loans for which the Company has
the intent and ability to hold for the foreseeable future or until maturity are classified as held for investment ("HFI").
If the Company no longer has the intent or ability to hold loans for the foreseeable future, then the loans are transferred to held for
sale ("HFS"). Loans entered into with the intent to resell are classified as HFS.

 If
it is determined that a loan should be transferred from HFI to HFS, then the balance is transferred at the lower of cost or fair
value. At the time of transfer, a write-down of the loan is recorded as an impairment when the carrying amount exceeds fair value
and the difference relates to credit quality. Otherwise the write-down is recorded as a reduction in finance receivable interest
income, and any credit loss reserve is reversed. Once classified as HFS, the amount by which the carrying value exceeds fair
value is recorded as a valuation allowance and is reflected as a reduction to finance receivable interest income.

 If
it is determined that a loan should be transferred from HFS to HFI, the loan is transferred at the lower of cost or fair value on the
transfer date, which coincides with the date of change in management's intent. The difference between the carrying value of the
loan and the fair value, if lower, is reflected as a loan discount at the transfer date, which reduces its carrying value. Subsequent
to the transfer, the discount is accreted into earnings as an increase to finance revenue interest income over the life of the loan using
the effective interest method.

 The
Company accounts for its finance receivables at amortized cost, net of unamortized origination fees, if any. Related fees and costs are
recorded net of any amounts reimbursed, and interest is accreted or accrued to interest revenue using the effective interest method.
When and if supplemental payments are received from these long-term receivables, an adjustment to the estimated effective interest rate
is affected prospectively.

 The
Company evaluates the collectibility of both interest and principal for each loan to determine whether it is impaired. A loan is considered
to be impaired when, based on current information and events, the Company determines it is probable that it will be unable to collect
amounts due according to the existing contractual terms. When a loan is considered to be impaired, the amount of loss is calculated by
comparing the carrying value of the financial asset to the value determined by discounting the expected future cash flows at the loan's
effective interest rate or to the estimated fair value of the underlying collateral, less costs to sell, if the loan is collateralized
and the Company expects repayment to be provided solely by the collateral. Impairment assessments require significant judgments and are
based on significant assumptions related to the borrower's credit risk, financial performance, expected sales, and estimated fair
value of the collateral.

 Allowance for Credit Losses
on Finance Receivables

 The
allowance for credit losses is intended to provide for credit losses inherent in the finance receivables portfolio and is periodically
reviewed for adequacy considering credit quality indicators, including expected and historical losses and levels of and trends in past
due loans, non-performing assets and impaired loans, collateral values and economic conditions. The allowance for credit losses is determined
based on specific allowances for loans that are impaired, based upon the value of underlying collateral or projected cash flows. Changes
to the allowance for credit losses are recorded in the provision for loan credit losses in the consolidated statements of income.

 The
Company adopted Accounting Standards Update 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial
Instruments ("ASU 2016-13"), as amended, on January 1, 2023 using the modified retrospective approach method. See Recent
Accounting Pronouncements section below and Note 3 for further information.

 Marketable Investments

 The
Company's marketable investment portfolio includes debt securities as of December 31, 2023. The debt security is classified as an
available-for-sale security, which is reported at fair value with unrealized gains or losses recorded in statements of other comprehensive
income, net of applicable income taxes. In any case where fair value might fall below amortized cost, the Company would consider whether
that security is other-than temporarily impaired using all available information about the collectibility of the security. The Company
would not consider that an other-than temporary impairment for a debt security has occurred if (1) the Company does not intend to sell
the debt security, (2) it is not more likely than not that the Company will be required to sell the debt security before recovery of its
amortized cost basis and (3) the present value of estimated cash flows will fully cover the amortized cost of the security. The Company
would consider that an other-than-temporary impairment has occurred if any of the above mentioned three conditions are not met.

 For
a debt security for which an other-than-temporary impairment is considered to have occurred, the Company would recognize the entire difference
between the amortized cost and the fair value in earnings if the Company intends to sell the debt security or it is more likely than
not that the Company will be able to sell the debt security before recovery of its amortized cost basis. If the Company does not intend
to sell the debt security and it is not more likely than not that the Company will be required to sell the debt security before recovery
of its amortized cost basis, the Company would separate the difference between the amortized cost and the fair value of the debt security
into the credit loss component and the non-credit loss component. The credit loss component would be recognized in earnings and the non-credit
loss component would be recognized in other comprehensive income, net of applicable income taxes.

 Foreign Currency Transactions

 The
Company uses the U.S. dollar as its functional currency. Monetary assets and liabilities and transactions denominated in currencies other
than an entity's functional currency are remeasured into its functional currency using current exchange rates, whereas nonmonetary
assets and liabilities are remeasured using historical exchange rates. The Company recognizes gains and losses from such remeasurements
within other income (expense), net in the consolidated statements of income in the period of occurrence.

 Other Receivables

 As
of December 31, 2023, the Company had collateral receivable of $2.8 million with the counterparties on its foreign currency exchange
contract and is recorded as collateral on foreign currency forward contract in the consolidated balance sheets.

 Derivatives

 All
derivatives held by the Company are recognized in the consolidated balance sheets at fair value. Changes in fair value for derivatives
that do not meet the criteria for hedge accounting, or for which the Company has not elected hedge accounting are recorded in the consolidated
statements of income. If a derivative is recorded using hedge accounting, then depending on its nature, changes in its fair value will
be either offset against change in the fair value of hedged assets or liabilities through the consolidated statements of income or recorded
in other comprehensive income.

 The
Company had no derivatives designated as hedges as of December 31, 2023 and 2022. The Company holds warrants issued to the Company in
conjunction with term loan investments discussed in Note 3. These warrants meet the definition of a derivative and are included in warrant
assets in the consolidated balance sheets. The Company also uses a foreign currency forward contract to manage the impact of fluctuations
in foreign currency denominated cash flows expected to be received from one of its royalty finance receivables denominated in a foreign
currency. The foreign currency forward contract discussed in Note 9 is not designated as a hedging instrument, and changes in fair value
are recognized in earnings.

 Revenue Recognition

 Finance Receivables Segment

 The
Company's Finance Receivables segment records interest income on an accrual basis based on the effective interest rate method to
the extent that it expects to collect such amounts. The Company recognizes investment management fees when clients invest in our recommended
transactions as earned over the period the services are rendered. Incentive fees, if any, are recognized when earned at the end of the
relevant performance period, pursuant to the underlying contract. The Company did not recognize any management or incentive fees in 2023
or 2022. Other service revenues are recognized when contractual obligations are fulfilled or as services are provided.

 Pharmaceutical Development Segment

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

 In
determining the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its agreements, the Company
performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the
promised goods or services are performance obligations including whether they are distinct in the context of the contract; (iii) measurement
of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance
obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting
for these arrangements, the Company must use its judgment to determine: (a) the number of performance obligations based on the determination
under step (ii) above; (b) the transaction price under step (iii) above; (c) the stand-alone selling price for each performance obligation
identified in the contract for the allocation of transaction price in step (iv) above; and (d) the contract term and pattern of satisfaction
of the performance obligations under step (v) above. The Company uses judgment to determine whether milestones or other variable consideration,
except for royalties, should be included in the transaction price as described further below. The transaction price is allocated to each
performance obligation on a relative stand-alone selling price basis, for which the Company recognizes revenue as or when the performance
obligations under the contract are satisfied.

 Amounts
received prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the Company's consolidated balance
sheets. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current
deferred revenue. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified
as deferred revenue, net of current portion. Deferred revenue as of December 31, 2023 and 2022 was $ 9,000 and $ 33,000, respectively,
and is classified as current deferred revenue and is included in accounts payable and accrued liabilities in the consolidated balance
sheets.

 The
Company evaluates collaboration agreements with respect to the Financial Accounting Standards Board ("FASB") ASC Topic 808, Collaborative
Arrangements, considering the nature and contractual terms of the arrangement and the nature of its business operations to determine the
classification of the transactions. When the Company is an active participant in the activity and exposed to significant risks and rewards
dependent on the commercial success of the collaboration, it will record its transactions on a gross basis in the consolidated financial
statements and describe the rights and obligations under the collaborative arrangement in the notes to the consolidated financial statements.

 Exclusive
Licenses

 If
the license to the Company's intellectual property is determined to be distinct from the other promises or performance obligations
identified in the arrangement, the Company recognizes revenue from non-refundable, upfront fees allocated to the license when the license
is transferred to the customer and the customer is able to use and benefit from the license. In assessing whether a promise or performance
obligation is distinct from the other promises, the Company considers factors such as the research, manufacturing and commercialization
capabilities of the collaboration partner; the retention of any key rights by the Company; and the availability of the associated expertise
in the general marketplace. In addition, the Company considers whether the collaboration partner can benefit from a promise for its intended
purpose without the receipt of the remaining promises, whether the value of the promise is dependent on the unsatisfied promise, whether
there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise.
For licenses that are combined with other promises, the Company exercises judgment to assess the nature of the combined performance obligation
to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate
method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period
and, if necessary, adjusts the measure of performance and related revenue recognition. The measure of progress, and thereby periods over
which revenue should be recognized, are subject to estimates by management and may change over the course of the research and development
and licensing agreement. Such a change could have a material impact on the amount of revenue the Company records in future periods.

 Customer
Options

 If
an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and
services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are
contingent upon option exercise. The Company evaluates the customer options for material rights, or options to acquire additional goods
or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized
as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights
based on the relative standalone selling price, which is determined based on the identified discount and the probability that the customer
will exercise the option. Amounts allocated to a material right are not recognized as revenue until, at the earliest, the option is exercised.

 Research
and Development Services

 The
promises under the Company's collaboration agreements may include research and development services to be performed by the Company
on behalf of the partner. Payments or reimbursements resulting from the Company's research and development efforts are recognized
as the services are performed and presented on a gross basis because the Company is the principal for such efforts. Reimbursements from
and payments to the partner that are the result of a collaborative relationship with the partner, instead of a customer relationship,
such as co-development activities, are recorded as a reduction to research and development expense.

 Milestone
Payments

 At
the inception of each arrangement that includes development milestone payments, the Company evaluates whether the milestones are considered
probable of being achieved and estimates the amount to be included in the transaction price using the most likely amount method. If it
is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.
Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable
of being achieved until those approvals are received. The Company evaluates factors such as the scientific, clinical, regulatory, commercial,
and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved
in determining whether it is probable that a significant revenue reversal would not occur. At the end of each subsequent reporting period,
the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate
of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings
in the period of adjustment.

 Royalties

 For
arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to
be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur,
or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).
To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements.

 Cash and
Cash Equivalents

 The
Company considers all highly liquid investments with an original maturity date of three months or less at the date of purchase to be
cash equivalents. There were no such investments at December 31, 2023 or 2022, as all of our cash was held in checking, savings and brokerage
accounts. As of December 31, 2023, cash was deposited in financial institutions and consisted of immediately available fund balances. The
Company maintains its cash deposits with well-known and stable financial institutions but balances may exceed stated federally insured
limits.

 Restricted Cash

 Restricted cash as of December
31, 2023 is composed of a holdback amount associated with one of the Company's finance receivables.

 Interest and Accounts Receivable

 The
Company records interest receivable on an accrual basis and recognizes it as earned in accordance with the contractual terms of the loan
agreement, to the extent that such amounts are expected to be collected. When management does not expect that principal, interest, and
other obligations due will be collected in full, the Company will generally place the loan on nonaccrual status and cease recognizing
interest income on that loan until all principal and interest due has been paid or the Company believes the partner company has demonstrated
the ability to repay the Company's current and future contractual obligations. Any uncollected interest related to prior periods
is reversed from income in the period that collection of the interest receivable is determined to be doubtful. However, the Company may
make exceptions to this policy if the investment has sufficient collateral value and is in the process of collection. The Company did
not recognize any provision for interest receivable credit losses in 2023 and 2022.

 Accounts
receivable for management fees are recorded at the aggregate unpaid amount less any allowance for doubtful accounts. The Company determines
an account receivable's delinquency status based on its contractual terms. Interest is not charged on outstanding balances. Accounts
are written-off only when all methods of recovery have been exhausted. As of December 31, 2023 and 2022, the allowance for doubtful accounts
was zero.

 Certain Risks and Concentrations

 Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents,
interest and accounts receivable, finance receivables and marketable investments. The Company invests its excess cash with major U.S.
banks and financial institutions. The Company has not experienced any losses on its cash and cash equivalents.

 Finance Receivables
Segment

 The
Company performs ongoing credit evaluations of its partner companies and generally requires collateral. For the year ended December
31, 2023, three of our business partners accounted for 35 percent of our interest and accounts receivable. For the year
ended December 31, 2022, two of our business partners accounted for 31 percent of our interest and accounts receivable.

Development Segment

 For
the years ended December 31, 2023 and 2022, Cara accounted for approximately 23 percent and 87 percent, respectively, of Pharmaceutical
Development segment revenues.

 The
Company does not expect its current or future credit risk exposures to have a significant impact on its operations. However, there can
be no assurance that its business will not experience any adverse impact from credit risk in the future.

 Stock-based Compensation

 All
employee and director stock-based compensation is measured at the grant date, based on the estimated fair value of the award, and is
recognized as an expense over the requisite service period. Stock-based compensation expense is reduced for estimated future forfeitures.
These estimates are revised in future periods if actual forfeitures differ from the estimates. Changes in forfeiture estimates impact
compensation expense in the period in which the change in estimate occurs.

 For
restricted stock, the Company recognizes compensation expense in accordance with the fair value of the Company's stock as determined
on the grant date, amortized over the applicable service period. When vesting of awards is based wholly or in part upon the future performance
of the stock price, such terms result in adjustments to the grant date fair value of the award and the derivation of a service period.
If service is provided over the derived service period, the adjusted fair value of the awards will be recognized as compensation expense,
regardless of whether or not the awards vest.

 Fair Value of Financial Instruments

 The
recorded values of cash and restricted cash, accounts and finance receivables, accounts payable, and accrued expenses approximate the
fair values due to the short-term nature of the instruments. The recorded values of our foreign currency forwards are fair value based
on observable inputs other than quoted prices.

 Income Taxes

 Deferred
tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their respective tax bases. A valuation allowance is recorded to reduce
deferred tax assets to an amount where realization is more likely than not.

 If
the Company ultimately determines that the payment of such a liability is not necessary, then the Company reverses the liability and
recognizes a tax benefit during the period in which the determination is made that the liability is no longer necessary. The Company
recognizes accrued interest and penalties related to unrecognized tax benefits as a component of income tax benefit in the statements
of income.

 Comprehensive Income

 The consolidated
statements of comprehensive income have been omitted, as net income equals comprehensive income for the years ended December 31, 2023
and 2022.

 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):

 Schedule of Basic
and Diluted Earning per Share

 Year Ended December
 31,

 2023

 2022

 Numerator:

 Net income

 $

 $

 Denominator:

 Weighted-average shares outstanding

 12,653

 12,835

 Effect of dilutive securities

 Weighted-average diluted shares

 12,696

 12,880

 Basic net income per share

 $
 1.26

 $
 1.05

 Diluted net income per share

 $
 1.25

 $
 1.05

 As
of December 31, 2023 and 2022, outstanding options to purchase shares of common stock and outstanding shares of restricted stock in an
aggregate of approximately 122,000 and 248,000, respectively, have been excluded from the calculation of diluted net income per share,
as such securities were anti-dilutive.

 Recent Accounting Pronouncements

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

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

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

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

 In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures," which requires
public entities to disclose information about their reportable segments' significant expenses on an interim and annual basis. This
ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December
15, 2024. Early adoption is permitted. Public entities are required to adopt the changes retrospectively, recasting each prior-period
disclosure for which a comparative income statement is presented in the period of adoption. The Company is currently evaluating the impact
of adopting this ASU on the Company's consolidated financial statements and disclosures.

 In December 2023,
the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The standard is intended to provide greater
transparency in various income tax components that affect the rate reconciliation based on the applicable taxing jurisdictions, as well
as the qualitative and quantitative aspects of those components. The ASU is effective for fiscal years beginning after December 15, 2024,
with early adoption permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated
financial statements and related disclosures.

 Note 2. Goodwill and Intangible
Assets

 Goodwill

 The net book value of goodwill was solely related to the Enteris acquisition in 2019. The Company reviews goodwill for impairment on an annual
basis or whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. During the year ended
December 31, 2023 the Company decreased its financial expectations for the License Agreement and elected to bypass the qualitative goodwill
impairment assessment and proceed directly with a quantitative assessment. The goodwill impairment test concluded that the fair value
of the Company's Pharmaceutical Development reporting unit did not exceed the carrying amount and the Company recorded an impairment charge
of $8.4 million and reduced the goodwill balance to $0. An income valuation approach was used to estimate the fair value of the Enteris
reporting unit which was estimated through a probability-adjusted discounted cash flow analysis. During the prior year ended December
31, 2022 the carrying amount of goodwill did not change.

 Intangible Assets

 As
of December 31, 2023 and 2022, the gross book value, accumulated amortization,
net book value and estimated useful life of acquired intangible assets were as follows (in thousands, except estimated useful life data):

 Schedule of Intangible Assets

 As of December 31, 2023

 Gross Book

 Value

 Accumulated

 Amortization

 Net Book

 Value

 Estimated

 Useful

 Life

 License Agreement (1)

 $
 29,400

 $
 23,167

 $
 6,233

 Trade names and trademarks

 Customer relationships

 Total intangible assets

 $
 29,850

 $
 23,363

 $
 6,487

 As of December 31, 2022

 Gross Book

 Value

 Accumulated

 Amortization

 Net Book

 Value

 Estimated

 Useful

 Life

 License Agreement (1)

 $
 29,400

 $
 21,509

 $
 7,891

 Trade names and trademarks

 Customer relationships

 Total intangible assets

 $
 29,850

 $
 21,660

 $
 8,190

 (1)
 Prior to our acquisition of Enteris, Enteris entered into the
License Agreement with Cara, for oral formulation rights to Enteris' Peptelligence technology to develop and commercialize
Oral KORSUVA TM in any indication worldwide, excluding South Korea and Japan. Cara is obligated to pay Enteris certain development,
regulatory and tiered commercial milestone payments, as well as low single-digit royalties based on net sales in the licensed territory.

 Amortization
expense was $ 1.7 million and
$ 1.8 million for
the years ended December 31, 2023 and 2022, respectively, and
was recognized in the consolidated statements of net income. Based on amounts recorded at December 31, 2023, the Company
will recognize acquired intangible asset amortization as follows (in thousands):

 Schedule of Intangible Asset Amortization Expense

 2024

 $
 1,546

 2025

 1,076

 2026

 1,076

 2027

 1,076

 2028

 1,036

 2029 and thereafter

 Total

 $
 6,487

 Note 3. Finance
Receivables

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 values of finance receivables are as follows (in thousands):

 Schedule of carrying value of finance receivables

 2023

 2022

 Term loans

 $
 221,145

 $
 188,836

 Royalty purchases

 67,260

 59,565

 Total before allowance for credit losses

 288,405

 248,401

 ( 13,901
)

 ( 11,846
)

 Total carrying value

 $

 $

 Allowance
for Credit Losses

 The
ACL is management's estimate of the amount of expected credit losses over the life of the loan portfolio, or the amount of amortized
cost basis not expected to be collected, at the balance sheet date. This estimate encompasses information about historical events, current
conditions and reasonable and supportable economic forecasts. Determining the amount of the ACL is complex and requires extensive judgment
by management about matters that are inherently uncertain. Given the current level of economic uncertainty, the complexity of the ACL
estimate and level of management judgment required, we believe it is possible that the ACL estimate could change, potentially materially,
in future periods. Changes in the ACL may result from changes in current economic conditions, our economic forecast, and circumstances
not currently known to us that may impact the financial condition and operations of our borrowers, among other factors.

 Expected
credit losses are estimated on a collective basis for groups of loans that share similar risk characteristics. For finance receivables
that do not share similar risk characteristics with other finance receivables, expected credit losses are estimated on an individual
basis. Expected credit losses are estimated over the contractual terms of the finance receivables, adjusted for expected prepayments
and unfunded commitments, generally excluding extensions and modifications. The loan portfolio segment is defined as the level at which
an entity develops and documents a systematic method for determining its allowance for credit losses. As part of the Company's quarterly
assessment of the allowance, the finance receivables portfolio included two portfolio segments: Term Loans and Royalty Purchases.

 The
implementation of ASU 2016-13 also impacted the Company's ACL on unfunded loan commitments, as the ACL now represents expected
credit losses over the contractual life of commitments not identified as unconditionally cancellable by the Company. The reserve for
unfunded commitments is estimated using the same reserve or coverage rates calculated on collectively evaluated loans following the application
of a funding rate to the amount of the unfunded commitment. The funding rate represents management's estimate of the amount of
the current unfunded commitment that will be funded over the remaining contractual life of the commitment and is based on historical
data. On January 1, 2023, the Company recorded an adjustment for unfunded commitments of $0.4 million for the adoption of ASU 2016-13.
As of December 31, 2023, the $0.2 million liability for credit losses on off-balance-sheet credit exposures is included in other
non-current liabilities. Please refer to Note 7 for further information on the Company's unfunded commitments.

 The
following table details the changes in the allowance for credit losses by portfolio segment for the respective periods (in thousands):

 Schedule of Allowance for Credit Losses

 2023

 2022

 Term

 Loans

 Royalties

 Total

 Term

 Loans

 Royalties

 Total

 Allowance at beginning of period, prior to adoption
 of ASU 2016-13

 $
 —

 $
 11,846

 $
 11,846

 $
 —

 $
 8,388

 $
 8,388

 Write offs (1)

 —

 ( 11,846
)

 ( 11,846
)

 —

 —

 —

 Recoveries

 —

 —

 —

 —

 Effect of adoption of ASU 2016-13

 8,900

 2,886

 11,786

 —

 —

 —

 1,284

 2,115

 —

 —

 —

 Allowance at end of period (2)

 $
 9,731

 $
 4,170

 $
 13,901

 $
 —

 $
 8,355

 $
 8,355

 (1)
 Reversal of finance receivable-specific ACL recognized in prior
periods. No impact to consolidated statement of income for the year ended December 31, 2023. Please refer to Note 1 for further details.

 (2)
 The allowance at end of period as of December 31, 2022 excludes the Company's $3.5 million allowance on its cost
method investment.

 Non-Accrual
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 its finance receivables. Recognition of income is suspended, and the finance
receivable is placed on non-accrual status when management determines that collection of future income is not probable. This evaluation
is generally based on delinquency information, an assessment of the borrower's 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 collectibility of remaining principal and interest
is no longer doubtful.

 The
following table presents nonaccrual and performing finance receivables by portfolio segment, net of credit loss allowance (in thousands):

 Schedule of Allowance for Credit Losses

 2023

 2022

 Nonaccrual

 Performing

 Total

 Nonaccrual

 Performing

 Total

 Term loans

 $
 9,128

 $
 212,017

 $
 221,145

 $
 11,304

 $
 177,532

 $
 188,836

 Royalty purchases

 16,854

 50,406

 67,260

 6,736

 52,829

 59,565

 Total before allowance for credit losses

 $
 25,982

 $
 262,423

 $
 288,405

 $
 18,040

 $
 230,361

 $
 248,401

 $
 ( 1,447
)

 $
 ( 12,454
)

 $
 ( 13,901
)

 $
 ( 10,091
)

 $
 ( 1,755
)

 $
 ( 11,846
)

 Total carrying value

 $
 24,535

 $
 249,969

 $

 $
 7,949

 $
 228,606

 $

 As
of December 31, 2023, the Company had four finance receivables in nonaccrual status: (1) the term loan to Trio Healthcare Ltd.
("Trio"), with a carrying value of $ 9.1
million; (2) the Flowonix Medical, Inc. ("Flowonix") royalty, with a carrying value of $ 10.4
million (see Loan Modifications Made to Borrowers Experiencing Financial Difficulty below for further details); (3)
the Best ABT, Inc. ("Best") royalty, with a carrying value of $ 2.6
million; and (4) the Ideal Implant, Inc. ("Ideal") royalty, with a carrying value of $ 3.8
million. Although in nonaccrual status, none of the finance receivables were considered impaired as of December 31, 2023. The
Company collected $2.4 million and $1.1 million on its nonaccrual finance receivables during the year ended December 31, 2023 and
December 31, 2022, respectively.

 Loan Modifications
Made to Borrowers Experiencing Financial Difficulty

 Effective
January 1, 2023, the Company adopted the provisions of ASU 2022-02, which eliminated the accounting for TDRs while expanding loan modification
and vintage disclosure requirements. The update specifically required additional disclosures on loan modifications to borrowers experiencing
financial difficulties that involved an interest rate reduction, other-than-insignificant payment delay, a term extension, principal
forgiveness or a combination thereof.

the year ended December 31, 2023, the Company made one significant modification to a borrower experiencing financial difficulty involving
an other-than-insignificant payment delay and a term extension/modification. Flowonix's assets were sold to Algorithm Sciences,
Inc. ("Algorithm") during the year ended December 31, 2023, and in exchange for releasing its lien, the Company received
$1.5 million of cash at close, bringing the carrying value from $11.9 million as of June 30, 2023 to $10.4 million as of December
31, 2023. The Company expects to receive royalties on the net sales of two products beginning in late 2024.

 Although
in nonaccrual status, the Flowonix royalty was not considered impaired as of December 31, 2023 and is considered in the $4.2 million
Royalty allowance for credit losses as of December 31, 2023. On an ongoing basis, the Company monitors the performance of modified loans
to their restructured terms.

 Credit Quality of Finance Receivables

 The
Company evaluates all finance receivables on a quarterly basis and assigns a risk rating based upon management's assessment of
the borrower's likelihood of repayment. The assessment is subjective and based on multiple factors, including but not limited to,
financial strength of borrowers and operating results of the underlying business. The credit risk analysis and rating assignment is performed
quarterly in conjunction with the Company's assessment of its allowance for credit losses. The Company uses the following definitions
for its risk ratings for Term Loans:

 1: Borrower
performing well below Company expectations, and the borrower's ability to raise sufficient capital to operate its business or repay
debt is highly in question. Finance receivables rated a 1 are on non-accrual and are at an elevated risk for principal impairment.

 2: Borrower
performing below plan, and the loan-to-value is generally worse than at the time of underwriting. Borrower has limited access to additional
capital to operate its business. Finance receivables rated a 2 might be placed on non-accrual. While there is a potential for future
principal impairment, we may refrain from placing borrower on non-accrual due to enterprise value coverage, continued receipt of interest
payments, and/or anticipate a near-term capital raise.

 3: Borrower
performing in-line-to-modestly-below Company expectations, and loan-to-value is similar to slightly worse than at the time of underwriting.
Borrower has demonstrated access to capital markets.

 4: Borrower
performing in line-to-modestly above Company expectations and loan-to-value similar or modestly better than underwriting case.
Borrower has demonstrated access to capital markets.

 5: Borrower
performing in excess of Company expectations, and loan-to-value is better than at time of origination.

 The
Company uses an internal credit rating system which rates each Royalty on a color scale of Green to Red, with Green typically indicative
of a Royalty that is exceeding base underwritten case and Red reflective of underperformance relative to plan.

 The
following table summarizes the carrying value of Finance Receivables by origination year, grouped by risk rating as of December 31,
2023 (in thousands):

 Schedule of Financing Receivable by origination year

 2023

 2023

 2022

 2021

 2020

 2019

 Prior

 Total

 Term Loans

 $
 —

 $
 —

 $
 13,734

 $
 —

 $
 5,696

 $
 —

 $
 19,430

 25,799

 32,211

 —

 —

 —

 10,485

 68,495

 24,341

 24,285

 10,227

 —

 31,807

 —

 90,660

 —

 6,924

 12,493

 —

 —

 14,015

 33,432

 —

 —

 9,128

 —

 —

 —

 9,128

 Subtotal - Term Loans

 $
 50,140

 $
 63,420

 $
 45,582

 $
 —

 $
 37,503

 $
 24,500

 $
 221,145

 Royalties

 Green

 $
 27,785

 $
 —

 $
 —

 $
 14,650

 $
 —

 $
 1,340

 $
 43,775

 Yellow

 —

 —

 —

 3,212

 —

 3,419

 6,631

 Red

 —

 —

 3,834

 10,433

 —

 2,587

 16,854

 Subtotal - Royalty Purchases

 $
 27,785

 $
 —

 $
 3,834

 $
 28,295

 $
 —

 $
 7,346

 $
 67,260

 Total Finance Receivables, gross

 $
 77,925

 $
 63,420

 $
 49,416

 $
 28,295

 $
 37,503

 $
 31,846

 $
 288,405

 Note 4. Property and Equipment,
Net

 Property and
equipment, net consisted of the following as of December 31, 2023 and 2022 (in thousands):

 Schedule of Property
and Equipment, Net

 December 31, 2023

 December 31, 2022

 Production equipment and other

 $
 4,079

 $
 3,895

 Furniture and fixtures

 Leasehold improvements

 3,645

 3,656

 Capitalized software

 Total

 8,114

 7,697

 Less accumulated depreciation and amortization

 ( 2,676
)

 ( 1,857
)

 Property and equipment, net

 $
 5,438

 $
 5,840

 Depreciation
and amortization expense on property and equipment was $ 0.8
million for both the years ended December 31, 2023 and 2022, respectively.

 Note 5. Marketable Investments

 Investments
in corporate debt securities securities as of December 31, 2023 and 2022 consist of the following (in thousands):

 Schedule of marketable investments

 Year
 Ended

 2023

 2022

 Corporate debt securities

 $

 $

 Total marketable investments

 $

 $

 The
amortized cost basis amounts, gross unrealized holding gains, gross unrealized holding losses and fair values of available-for-sale debt
securities as of December 31, 2023 and 2022, are as follows (in thousands):

 Schedule of available-for-sale securities reconciliation

 Amortized Cost

 Gross Unrealized

 Gains

 Gross Unrealized

 Losses

 Fair Value

 December 31, 2023

 $

 $
 —

 $
 —

 $

 December 31, 2022

 $

 $
 —

 $
 —

 $

 The
following table presents realized and unrealized gains and losses on equity securities as prescribed by ASC 321, Investments - Equity
Securities during the year ended December 31, 2023 and 2022 (in thousands):

 Schedule of Proceeds from sales, gross unrealized gains and gross unrealized losses for available-for-sale securities

 2023

 2022

 Unrealized net loss on equity securities
 reflected in the Consolidated Statements of Income

 $
 —

 $
 ( 528
)

 Fair value of common stock received upon exercise of warrant
 to purchase stock

 —

 3,667

 Realized net loss on write-off of warrant assets and
 sale/tender of equity securities reflected in the Consolidated Statements of Income

 ( 799
)

 ( 151
)

 Equity Securities

 There
was no equity securities activity during the year ended December 31, 2023. During the year ended December 31, 2022, the Company exercised
its right to purchase Harrow Health, Inc. ("Harrow") common stock. Upon exercise, the Company received 306,347 shares of
Harrow common stock with a fair value of $3.7 million, or $11.97 per share. During the year ended December 31, 2022, the Company sold
its shares of Harrow and Bioventus common stock and received proceeds of $3.7 million and $0.5 million, respectively.

 Note 6. Debt

 Revolving
Credit Facility

 On
June 28, 2023, the Company entered into a new Credit Agreement (the "Credit Agreement") by and among SWK Funding LLC, the
Company's wholly-owned subsidiary (together with the Company, the "Borrower"), the lenders party thereto ("Lenders"),
and First Horizon Bank as a Lender and Agent (the "Agent"). The Credit Agreement provides for a revolving credit facility
with an initial maximum principal amount of $45.0 million. The Credit Agreement provides that the Company may request one or more incremental
increases in an aggregate amount not to exceed $80.0 million, subject to the consent of the Agent and each Lender, at any time prior
to the termination of the revolving credit period on June 28, 2026 (the "Commitment Termination Date"). The revolving credit
period will be followed by a one-year amortization period, with the final maturity date of the Credit Agreement occurring on June 28,
2027.

 The
outstanding principal balance of the Credit Agreement will bear interest at a rate per annum equal to the sum of (i) Term SOFR (as defined
in the Credit Agreement) plus (ii) 3.75 percent at all times prior to the Commitment Termination Date. The outstanding principal balance
of the Revolving Credit Facility will bear interest at a rate per annum equal to the sum of (i) Term SOFR (as defined in the Credit Agreement)
plus (ii) 4.25 percent at all times on and after the Commitment Termination Date. Under the terms of the Credit Agreement, all accrued
and unpaid interest shall be due and payable, in arrears, on the first business day of each calendar month.

 The
Credit Agreement contains customary affirmative and negative covenants, in addition to financial covenants specifying that, as of the
end of each calendar month, (i) the consolidated leverage ratio of Borrower will not exceed 1.00 to 1.00, (ii) the consolidated interest
coverage ratio of Borrower will not be less than 4.00 to 1.00, (iii) the cash collection rate in relation to Borrower's portfolio
of loan assets will not be less than 4.5 percent, for such calendar month, (iv) the net charge-off percentage in relation to Borrower's
portfolio of loan assets will not exceed 3 percent for such calendar month, and (v) the weighted average risk rating in relation to Borrower
portfolio of loan assets will not be less than 3.00. In addition, the Credit Agreement provides that at no time shall the Company permit
its consolidated tangible net worth to be less than $145.0 million, or its Liquidity (as defined in the Credit Agreement) to be less
than $5.0 million. The Credit Agreement also contains events of default customary for such financings, the occurrence of which would
permit the Agent and Lenders to accelerate the aggregate principal amount due thereunder. As of December 31, 2023 the Company was
in compliance with all covenants.

 The
Credit Agreement refinances the Company's Loan and Security Agreement dated as of June 29, 2018 (the "Prior Credit Agreement"),
as amended, between the Company and Cadence Bank, N.A. ("Cadence Bank"), as the lender and administrative agent, which was
due to expire on September 30, 2025. The Prior Credit Agreement was terminated by the Company, effective as of June 28, 2023.

 On
October 10, 2023, the Company entered into a First Amendment to Credit Agreement pursuant to which Woodforest National Bank was added
as a lender under the Credit Agreement for an aggregate commitment of $15.0 million, thereby increasing the aggregate commitments under
the Credit Agreement from $45.0 million to $60.0 million.

 As
of December 31, 2023, $ 12.4 million was outstanding under the new Credit Agreement, and approximately $ 2.4 million was outstanding under
the Prior Credit Agreement as of December 31, 2022. During the year December 31, 2023 and 2022, the Company recognized $1.0 million and
$0.3 million, respectively, of interest expense relating to the old and new Credit Agreements.

 Senior Notes
Due 2027

 On
October 3, 2023, the Company issued a $30.0 million aggregate principal amount of 9 percent Senior Notes due 2027 ("2027 Senior
Notes" or "Notes") in a registered underwritten public offering. On October 27, 2023, the underwriter exercised in
full, its over-allotment option by purchasing an additional approximately $3.0 million aggregate principal amount of the 2027
Senior Notes. The interest rates are fixed at 9% per annum and are payable quarterly in arrears on March 31, June 30, September 30, and
December 31 of each year, commencing on December 31, 2023, and until maturity. The Notes will mature on January 31, 2027. The
total net proceeds from the debt offering, after deducting initial purchase discounts and debt issuance costs, were approximately $30.6
million. The Company intends to use the net proceeds from the Offering for general corporate purposes, including funding future acquisitions
and investments, repaying indebtedness, making capital expenditures, and funding working capital.

 Schedule
of Long Term Debt

 The following table summarizes the outstanding
balance of the Notes, net of debt issuance costs, as of December 31 (in thousands):

 2023

 2022

 2027 Senior Notes

 32,969

 —

 Debt issuance costs

 ( 2,188
)

 —

 Total Long-term debt, net

 30,781

 —

 The Company's future principal obligations
for the notes were as follows as of December 31 (in thousands):

 Schedule of Maturities of Long Term Notes

 2023

 2022

 2024

 —

 —

 2025

 —

 —

 2026

 —

 —

 2027

 32,969

 —

 Total Long-term debt, net

 32,969

 —

 The
Company may redeem the Notes for cash in whole or in part at any time (i) on or after September 30, 2025 (the "First Call Date")
and prior to September 30, 2026, at a price equal to the sum of 102% of their principal amount, and (ii) on or after September 30, 2026
at a price equal to the sum of 100% of their principal amount, plus (in each case noted above) accrued and unpaid interest to, but excluding,
the date of redemption. At any time prior to the First Call Date, the Company may, at its option, redeem the Notes for cash, in whole
at any time or in part from time to time at a redemption price equal to (i) 100% of the principal amount of Notes redeemed, plus (ii)
a Make-Whole Amount (as defined in the Indenture), plus (iii) accrued and unpaid interest, if any, to, but excluding, the date of redemption.
On and after any redemption date, interest will cease to accrue on the redeemed Notes. Additionally, upon the occurrence of a Triggering
Event (as defined in the Indenture), holders of the Notes will have the right to require the Company to make an offer to repurchase all
or any portion of their Notes for cash at a purchase price equal to 100% of the aggregate principal amount thereof, plus accrued and
unpaid interest, if any, to, but excluding, the date of purchase.

 The
Notes are senior unsecured obligations of the Company and rank equal in right of payment with the Company's existing and future
senior unsecured indebtedness.

 The
Company evaluated the 2027 Senior Notes for derivatives pursuant to ASC 815, Derivatives and Hedging, and identified an embedded derivative
that required bifurcation as the feature is not clearly and closely related to the host instrument. The embedded derivative was a default
provision, which could require additional interest payments. The Company determined that the fair value of the embedded derivative was
immaterial as of December 31, 2023.

 Note 7. Commitments and Contingencies

 Lease Obligations

 Topic
842, Leases, establishes a right-of-use ("ROU") model that requires
a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than twelve months. Leases
are classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income
statement. The Company's leases consist of operating leases for office space. The Company determines if an arrangement is a lease
at inception. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent
the Company's obligation to make lease payments arising from the lease. Operating lease right-of-use assets are recognized at commencement
date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate,
the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value
of lease payments.

 All the
Company's material leases are operating leases. ROU assets related to operating leases are included on the balance sheet in
the other non-current assets caption and operating lease cost is recognized over the lease term on a straight-line basis and is
classified within general and administrative cost on the income statement. In March of 2023, the Company entered into a new lease
for additional office space in Dallas, Texas. The Company's corporate office spaces in Dallas, Texas total approximately 6,850
square feet consisting of the two office locations. Total rent expense recognized was $0.2 million for the year ended December 31,
2023 and $0.1 million for the year ended December 31, 2022. The respective office leases expire in August 2028 and August 2025.

 The
Enteris headquarters is located in Boonton, New Jersey, where Enteris leases approximately 32,000 square feet of space. Total rent expense
recognized under the lease was $ 0.3 million for both the years ended December 31, 2023 and 2022. The office lease expires in December
2024 with an option to renew for an additional five years.

 Cash paid for amounts
included in the measurement of operating lease liabilities was $0.4 million and $0.3 million for the years ended December 31, 2023 and
2022 and right-of-use assets obtained in exchange for new operating lease obligations was $0.6 million and $0.

 The components of
lease cost is as follows (in thousands):

 Schedule of
Lease Cost

 2023

 2022

 Operating lease cost

 $

 $

 Variable lease cost

 Total lease cost

 $

 $

 Supplemental balance sheet information
related to operating leases is as follows (in thousands):

 2023

 2022

 Operating lease right-of-use assets

 $
 2,085

 $
 1,692

 Operating lease liabilities, current

 Operating lease liabilities, non-current

 1,863

 1,509

 Total operating lease liabilities

 $
 2,230

 $
 1,744

 2023

 2022

 Weighted-average remaining lease term (years)

 5.3

 6.6

 Weighted-average discount rate

 6.3 %

 5.9 %

 Future minimum rent on the Company's operating leases is as follows (in thousands):

 Schedule of Future Minimum Rent

 2024

 2025

 2026

 2027

 2028

 Thereafter

 Total future lease payments

 $
 2,616

 Contingent Consideration

 The
Company recorded contingent consideration related to the 2019 acquisition of Enteris and sharing of certain milestone and royalties due
to Enteris pursuant to the License Agreement. Contingent consideration is remeasured to fair value at each reporting date until the contingency
is resolved, with changes in the estimated fair value recognized in earnings. The estimated fair value of contingent consideration as
of December 31, 2023 and 2022 was $ 4.9 million and $ 11.2 million, respectively. The company recognized $6.3 million of remeasurement
gain on the change in the estimated fair value of its contingent consideration during year ended December 31, 2023. See Note 9 for further information regarding the Company's contingent consideration.

 Unfunded Commitments

 As
of December 31, 2023, the Company's unfunded commitments were as follows (in thousands):

 Schedule of Unfunded Commitments

 Journey Medical Corporation

 $
 5,000

 Total unfunded commitments

 $
 5,000

 Per
the terms of the royalty purchase or credit agreements, unfunded commitments are contingent upon reaching an established revenue threshold
or other performance metrics on or before a specified date or period of time, and in the case of loan transactions, are subject to being
advanced as long as an event of default does not exist.

 On
January 1, 2023, the Company adopted ASU 2016-13, which replaced the incurred loss methodology with an expected loss model known as the
CECL model. See Note 3 for information regarding the Company's allowance for credit losses related to its unfunded commitments.

 Litigation

 The
Company is involved in, or has been involved in, arbitrations or various other legal proceedings that arise from the normal course of
its business. The ultimate outcome of any litigation is uncertain, and either unfavorable or favorable outcomes could have a material
impact on the Company's results of operations, balance sheets and cash flows due to defense costs, and divert management resources. The
Company cannot predict the timing or outcome of these claims and other proceedings. As of December 31, 2023, the Company is not involved
in any arbitration and/or other legal proceeding that it expects to have a material effect on its business, financial condition, results
of operations and cash flows.

 Indemnification

 As
permitted by Delaware law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences
while the officer or director is, or was, serving in such capacity, or in other capacities at the Company's request. The term of
the indemnification period is for the officer's or director's lifetime. The maximum potential amount of future payments the
Company could be required to make under these indemnification agreements is unlimited; however, the Company has a director and officer
insurance policy that limits its exposure and enables the Company to recover a portion of any such amounts. As a result of the Company's
insurance policy coverage, the Company believes the estimated fair value of these indemnification agreements is insignificant. Accordingly,
the Company had no liabilities recorded for these agreements as of December 31, 2023 and 2022.

 Note 8. Stockholders' Equity

 Common Stock

 The
total number of shares of common stock, $ 0.001 par value, that the Company is authorized to issue is 250,000,000.

 Issuer Purchases of Equity Securities

 On
May 31, 2022, the Board authorized a share repurchase program under which the Company was previously authorized to repurchase up to $ 10.0
million of the Company's outstanding shares of common stock from time to time until May 15, 2023, through a Rule 10b5-1 trading
plan in compliance with all applicable laws and regulations, including Rule 10b-18 of the Exchange Act (the "Prior Repurchase Program").
The purchase period for the Prior Repurchase Program was July 1, 2022 through May 15, 2023.

 On
May 16, 2023, the Company announced that the Board had authorized the Company to repurchase up to $10.0 million of the Company's
outstanding shares of common stock from time-to-time until May 16, 2024, through a trading plan established in compliance with Rule 10b5-1
and Rule 10b-18 of the Exchange Act (the "New Repurchase Program"). The actual timing, number and value of shares repurchased
under the New Repurchase Program will depend on several factors, including the constraints specified in the Rule 10b5-1 trading plan,
price, and general market conditions. There is no guarantee as to the exact number of shares that will be repurchased under the New Repurchase
Program. Our Board may also suspend or discontinue the New Repurchase Program at any time, in its sole discretion. The purchase period
for the New Repurchase Program is May 16, 2023 through May 16, 2024.

 As
of December 31, 2023, the Company has repurchased 326,088
shares under the new share repurchase program at a total cost of $5.4 million, or $16.65 per share. As of December 31, 2023, the
maximum number of shares that may yet be purchased under the plan was approximately $4.6 million, or 289,297 shares of common
stock.

 Preferred Stock

 The
Company's Board may, without further action by the stockholders, issue one or more series of preferred stock and fix the rights
and preferences of those shares, including the dividend rights, dividend rates, conversion rights, exchange rights, voting rights, terms
of redemption, redemption price or prices, liquidation preferences, the number of shares constituting any series and the designation
of such series. As of December 31, 2023, no shares of preferred stock have been issued.

 Stock Compensation Plans

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

 The
calculation of the fair values of our stock-based compensation plans requires estimates that require management's judgments. Under
ASC 718, Compensation - Stock Compensation, the fair value of each stock option is estimated on the grant date using the
Black-Scholes option-pricing model. The valuation models require assumptions and estimates to determine expected volatility, expected
life and expected risk-free interest rates. The expected volatility was determined using historical volatility of our stock based on
the contractual life of the award. The risk-free interest rate assumption was based on the yield on zero-coupon U.S. Treasury strips
at the award grant date. There were no options granted in the fiscal years ended December 31, 2023 and 2022.

 The following
table summarizes activities under the 2010 Stock Incentive Plan for the indicated periods:

 Schedule
of Stock Option Activity

 Options Outstanding

 Number of

 Shares

 Weighted-

 Average Exercise

 Price

 Weighted-Average

 Remaining

 Contractual Term

 (in years)

 Aggregate

 Intrinsic Value

 (in thousands)

 Balances, December 31, 2021

 287,500

 $
 10.75

 5.7

 $
 1,746

 Options canceled and retired

 ( 72,500
)

 14.50

 Options exercised

 ( 125,000
)

 12.98

 Options granted

 —

 —

 Balances, December 31, 2022

 90,000

 10.88

 6.3

 Options canceled and retired

 ( 22,039
)

 16.29

 Options exercised, net

 ( 461
)

 16.29

 Options granted

 —

 —

 Balances, December 31, 2023

 67,500

 12.70

 5.0

 Options vested and exercisable and expected to be vested
 and exercisable at December 31, 2023

 67,500

 $
 12.70

 5.0

 $

 Options vested and exercisable at December 31, 2023

 63,750

 $
 12.49

 5.0

 $

 At
December 31, 2023, there were approximately 741,274 shares reserved for issuance under the 2010 Stock Incentive Plan, and the
Company had $2,325 of total unrecognized stock option expense for time-based awards, net of estimated forfeitures, which will be recognized
over the weighted-average remaining period of 0.03 years.

 The
following table summarizes significant ranges of outstanding and exercisable options as of December 31, 2023:

 Schedule
of Stock Options Outstanding

 Exercise Prices

 Outstanding

 Weighted-Average

 Remaining
 Contractual Life
 (in years)

 Weighted-

 Average Exercise
 Price per Share

 Exercisable

 Weighted-

 Average Exercise
 Price per Share

 $

 9.61

 15,000

 2.5

 $
 9.61

 15,000

 $
 9.61

 12.50

 18,750

 5.4

 12.50

 18,750

 12.50

 12.50

 18,750

 5.4

 12.50

 18,750

 12.50

 16.29

 15,000

 6.3

 16.29

 11,250

 16.29

 Total

 67,500

 4.9

 $
 12.70

 63,750

 $
 12.49

 Employee
stock-based compensation expense recognized for time-vesting options for the years ended December 31, 2023 and 2022, uses the Black-Scholes
option pricing model for estimating the fair value of options granted under the Company's equity incentive plans. Risk-free interest
rates for the options were taken from the Daily Federal Yield Curve Rates on the grant dates for the expected life of the options as
published by the Federal Reserve. The expected volatility was based upon historical data and other relevant factors such as the Company's
changes in historical volatility and its capital structure, in addition to mean reversion. Employee stock-based compensation expense
recognized for market performance-vesting options uses a binomial lattice model for estimating the fair value of options granted under
the Company's equity incentive plan.

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

the year ended December 31, 2022, the Company's Board approved the modification of the previous Chief Executive Officer's ("CEO's")
stock options with respect to 100,000 Shares with an exercise price of $13.70 per share pursuant to an award agreement dated August
18, 2014. The Company and the previous CEO agreed that (i) 50 percent of the 2014 award has already vested due to the satisfaction of
time-based vesting conditions set forth in the 2014 award agreement, and a cashless exercise of the 2012 award was facilitated by net
settlement of exercise price and taxes. The remaining 50 percent of the 2014 award that had not vested as of December 31, 2021 was forfeited
as of the date on which the previous CEO separated from the Company, or September 30, 2022.

the year ended December 31, 2023, 25,944 restricted shares were granted and 15,989 restricted shares vested. During the year ended December
31, 2022, 41,427 restricted shares were granted and 4,696 restricted shares vested. As of December 31, 2023 and 2022, there were 97,283
and 71,339 shares of restricted stock outstanding, respectively.

 In
September 2022, the Board approved a change in the compensation plan for non-employee directors such that each non-employee director
shall receive a cash retainer of $55,000, payable quarterly in arrears. The Board will also receive an annual equity retainer of $55,000
in restricted shares of the Company's common stock, subject to a one-year cliff vesting period. In addition, each member of (i)
the Audit Committee shall receive an additional quarterly fee of $10,000, with the Audit Committee Chair receiving $15,000; (ii) the
Compensation Committee shall receive an additional quarterly fee of $6,000, with the Compensation Committee Chair receiving $8,000; and
(iii) the Governance Committee shall receive an additional quarterly fee of $6,000, with the Governance Committee Chair receiving $8,000.
Each non-employee director has the option to elect to receive up to 100 percent of the annual cash retainer in shares of the Company's
common stock.

the years ended December 31, 2023 and 2022, the Board approved compensation for Board services by granting 9,897 and 13,168 shares, respectively,
of common stock as compensation for the non-employee directors. The Board also received 9,151 restricted shares as compensation for the
non-employee directors during the year ended December 31, 2022. The Company recorded $ 0.3 million in Board stock-based compensation expense
during both the years ended December 31, 2023 and 2022. The Company recorded aggregate stock-based compensation expense, including the
quarterly and annual Board grants, of $0.5 million and $0.5 million during the years ended December 31, 2023 and 2022, respectively.

 Note 9. Fair Value Measurements

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

 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 years ended December 31, 2023 and 2022.

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

 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, cash equivalents, and restricted cash 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.

 Contingent Consideration

 The
Company recorded contingent consideration related to the August 2019 acquisition of Enteris and sharing of certain milestone and royalties
due to Enteris pursuant to the License Agreement.

 The
fair value measurements of the contingent consideration obligations and the related intangible assets arising from business combinations
are classified as Level 3 estimates under the fair value hierarchy, as these items have been valued using unobservable inputs. These
inputs include: (a) the estimated amount and timing of projected cash flows; (b) the probability of the achievement of the factors on
which the contingency is based; and (c) the risk-adjusted discount rate used to present value the probability-weighted cash flows. Changes
in fair value of this obligation are recorded as income or expense within operating income in our consolidated statements of income.
Significant increases or decreases in any of those inputs in isolation could result in a significantly lower or higher fair value measurement.

 As
of December 31, 2023 and 2022, the acquisition-related contingent consideration was $4.9 million and $11.2 million, respectively.
During the year ended December 31, 2023 and 2022, the Company recorded a $6.3 million gain and a $5.2 million loss, respectively,
for the change in the estimated fair value of contingent consideration. The Company made no payments during the year ended December
31, 2023 and made a $2.5 million payment against the contingent consideration liability during the years ended December 31,
2022.

 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 Instruments

 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
Company uses a foreign currency forward contract to manage the impact of fluctuations in foreign currency denominated cash flows expected
to be received from one of its royalty finance receivables denominated in a foreign currency. The foreign currency forward contract is
not designated as a hedging instrument, and changes in fair value are recognized in earnings. The foreign currency forward was recorded
in other non-current assets and other non-current liabilities in the consolidated balance sheets as of December 31, 2023 and December
31, 2022, respectively. The Company recognized a $1.7 million gain due to changes in fair value related to its foreign currency
forward contract during the year ended December 31, 2023.

 The
following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 (in thousands):

 Schedule of fair value assets measured on recurring basis

 Total Carrying

 Value in

 Balance Sheets

 Quoted
 Prices in

 Active Markets for

 Identical Assets or

 Liabilities

 (Level 1)

 Other

 Observable Inputs

 (Level 2)

 Unobservable

 Inputs

 (Level 3)

 Financial assets:

 $
 1,759

 $
 —

 $
 —

 $
 1,759

 —

 —

 Foreign Currency Forward Contract

 —

 —

 Financial liabilities:

 $
 4,900

 $
 —

 $
 —

 $
 4,900

 The
following table presents financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2022 (in thousands):

 Total Carrying

 Value in
 Balance Sheets

 Quoted Prices
 in
 Active Markets for
 Identical Assets or
 Liabilities
 (Level 1)

 Significant Other

 Observable
 Inputs
 (Level 2)

 Unobservable
 Inputs
 (Level 3)

 Financial assets:

 $
 1,220

 $
 —

 $
 —

 $
 1,220

 —

 —

 Financial liabilities:

 $

 $
 —

 $
 —

 $

 Derivative liability - foreign currency forward

 $

 $
 —

 $
 —

 $

 The contingent consideration payable is valued using a discounted cash flow approach and includes a significant unobservable input which
is the discount rate. As of the year ended December 31, 2023 and 2022 the discount rate was 14.5% and 14.0%, respectively. During the
year ended December 31, 2023 there was a change in the range of outcomes as a result of royalty and milestone cash flow projections being
decreased for the License Agreement.

 The
changes on the value of the warrant assets during the years ended December 31, 2023 and 2022 were as follows (in thousands):

 Schedule of fair value assets measured on recurring basis unobservable input reconciliation

 Fair Value - December 31, 2021

 $
 3,419

 Issuance

 1,180

 Exercised

 ( 3,796
)

 Change in fair value

 Fair Value - December 31, 2022

 1,220

 Issuance

 1,364

 Cancelled

 ( 770
)

 Change in fair value

 ( 55
)

 Fair Value - December 31, 2023

 $
 1,759

 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, for companies that have a
readily determinable value, are measured using the Black-Scholes option pricing model. The following range of assumptions were used in
the models to determine fair value:

 Schedule of weighted average assumptions

 December
 31,

 2023

 2022

 Dividend rate

 —

 —

 Risk-free rate

 3.8 % to
 4.8 %

 4.0 %
 to 4.3 %

 Expected life (years)

 1.2
 to 5.8

 2.0
 to 6.9

 Expected volatility

 75.3 %
 to 154.3 %

 54.8 %
 to 139.4 %

 The
warrant assets are valued using a market approach and include significant unobservable inputs such as risk-free rate, expected life, and
expected volatility. For the year ended December 31, 2023 the risk-free rate range was 3.8 % - 4.8 %, weighted average of 4.3 %, and median
of 3.8 %. For the year ended December 31, 2022 the risk-free rate range was 4.0 % - 4.3 %, weighted average of 4.0 %, and median of 4.0 %. For
the year ended December 31, 2023 the expected life range was 1.2 - 5.8 years, weighted average of 3.4 years, and median of 4.4 years. For
the year ended December 31, 2022 the expected life range was 2.0 - 6.9 years, weighted average of 6.2 years, and median of 5.4 years. For
the year ended December 31, 2023 the expected volatility range was 75.4 % - 154.3 %, weighted average of 124.6 %, and median of 134.4 %. For
the year ended December 31, 2022 the expected volatility range was 54.8 % - 139.4 %, weighted average of 93.8 %, and median of 94.1 %.

 As
of December 31, 2023, the Company had one royalty, Best, that was deemed to be impaired based on reductions in carrying value in prior
periods. As of December 31, 2022, the Company had two royalties, Best and Cambia, that were deemed to be impaired based on reductions
in carrying values in prior periods. The following table presents these royalties measured at amortized cost using the effective interest
method, which approximates fair value, on a nonrecurring basis as of December 31, 2023 and 2022 (in thousands):

 Schedule of weighted average assumptions

 Total Carrying

 Value in

 Balance Sheets

 Quoted
 Prices in

 Active Markets for

 Identical Assets or

 Liabilities

 (Level 1)

 Other

 Observable Inputs

 (Level 2)

 Unobservable

 Inputs

 (Level 3)

 December 31, 2023

 $
 2,587

 $
 —

 $
 —

 $
 2,587

 December 31, 2022

 $
 3,545

 $
 —

 $
 —

 $
 3,545

 There
were no liabilities measured at fair value on a nonrecurring basis as of December 31, 2023 or 2022.

 The
following information is provided to help readers gain an understanding of the relationship between amounts reported in the accompanying
consolidated financial statements and the related market or fair value. The disclosures include financial instruments and derivative
financial instruments.

 The following table presents the fair value of financial assets and liabilities as of year ended December 31, 2023 (in thousands):

 Schedule of fair value by balance sheet grouping

 Carrying

 Value

 Fair Value

 Level 1

 Level 2

 Level 3

 Financial assets:

 Finance receivables

 $

 $

 $
 —

 $
 —

 $

 —

 —

 1,759

 1,759

 —

 —

 1,759

 Foreign Currency Forward Contract

 —

 —

 Financial liabilities

 $
 4,900

 $
 4,900

 $
 —

 $
 —

 $
 4,900

 The
following table presents the fair value of financial assets and liabilities as of the year ended December 31, 2022 (in
thousands):

 Carrying

 Value

 Fair Value

 Level 1

 Level 2

 Level 3

 Financial assets:

 Finance receivables

 $

 $

 $
 —

 $
 —

 $

 —

 —

 1,220

 1,220

 —

 —

 1,220

 Financial liabilities

 $

 $

 $
 —

 $
 —

 $

 Derivative liability - foreign currency forward

 —

 —

 Note 10. Revenue Recognition

 The
Company's Pharmaceutical Development segment recognizes revenues received from contracts with its customers by revenue source,
as we believe it best depicts the nature, amount, timing and uncertainty of our revenue and cash flow. The Company's Finance Receivables
segment does not have any revenues received from contracts with customers.

 The
following table provides the contract revenue recognized by revenue source for the years ended December 31, 2023 and 2022 (in thousands):

 Schedule of Revenue Recognized by Revenue Source

 2023

 2022

 Pharmaceutical Development Segment

 License Agreement

 $

 $
 5,255

 Pharmaceutical development and other

 Total contract revenue

 $
 1,204

 $
 6,008

 The
Company's contract liabilities represent advance consideration received from customers and are recognized as revenue when the related
performance obligation is satisfied.

 The
Company's contract liabilities are presented as deferred revenues and are included in accounts payable and accrued liabilities
in the consolidated balance sheets (in thousands):

 Schedule of Company's Contract Liabilities

 2023

 2022

 Pharmaceutical Development Segment

 Deferred revenue

 $

 $

 Total contract liabilities

 $

 $

the year ended December 31, 2023, the Company recognized $ 24.0
thousand of 2022 deferred revenue from satisfaction of performance obligations. Please refer to Notes 1 and 2 for further details on
the Company's deferred revenue and License Agreement, respectively. The Company did not have any contract assets nor did it
have any contract liabilities related to the License Agreement as of December 31, 2023 or 2022.

 Note 11. Segment Information

 Selected
financial and descriptive information is required to be provided about reportable operating segments, considering a "management
approach" concept as the basis for identifying reportable segments. The management approach is based on the way that management
organizes the segments within the Company for making operating decisions, allocating resources, and assessing performance. Consequently,
the segments are evident from the structure of the Company's internal organization, focusing on financial information that the
Company's CEO uses to make decisions about the Company's operating matters.

 As
described in Note 1, SWK Holdings Corporation and Summary of Significant Accounting Policies, the Company has determined it has
 two reportable segments: Finance Receivables and Pharmaceutical Development, and each are individually managed and provide separate services.
Revenues by segment represent revenues earned on the services offered within each segment. The Company does not report assets by reportable
segment, nor does the Company report results by geographic region, as these metrics are not used by the Company's chief executive
officer in assessing performance or allocating resources to the segments.

 Segment
performance is evaluated based on several factors, including income (loss) from continuing operations before income taxes. Management
uses this measure of profit (loss) to evaluate segment performance because the Company believes this measure is indicative of performance
trends and the overall earnings potential of each segment. The Company does not report assets by reportable segment, as this metric is
not used by the Company's CEO in assessing performance or allocating resources to the segments.

 The
following tables present financial information for the Company's reportable segments for the periods indicated (in thousands):

 Schedule of Reportable Revenue by
Geographic Region

 Year Ended December 31, 2023

 Receivables

 Development

 and Other

 Holding

 Company and

 Other

 $
 36,346

 $
 1,202

 $
 —

 $
 37,548

 Other revenue

 1,912

 —

 —

 1,912

 Interest expense

 1,849

 Change in fair value of contingent consideration

 —

 ( 6,300
)

 ( 6,300
)

 —

 8,404

 —

 8,404

 Manufacturing, research and development

 —

 3,436

 —

 3,436

 —

 2,525

 2,577

 General and administrative

 2,874

 7,830

 11,232

 Other expense, net

 ( 13
)

 ( 24
)

 —

 ( 37
)

 Income tax benefit

 —

 —

)

)

 Net income (loss)

 $
 33,117

 $
 ( 9,763
)

 $
 ( 7,467
)

 $

 Year Ended December 31, 2022

 Receivables

 Development

 and Other

 Holding

 Company and

 Other

 $
 35,461

 $
 5,485

 $
 —

 $
 40,946

 Other revenue

 Allowance for credit losses and impairment expense

 3,491

 —

 —

 3,491

 Interest expense

 —

 —

 Manufacturing, research and development

 —

 6,952

 —

 6,952

 Change in fair value of contingent consideration

 —

 5,170

 —

 5,170

 —

 2,593

 2,599

 General and administrative

 3,617

 9,014

 12,964

 Other expense, net

 ( 477
)

 —

 —

 ( 477
)

 Income tax benefit

 —

 —

)

)

 Net income (loss)

 $
 30,829

 $
 ( 12,324
)

 $
 ( 5,014
)

 $

 Included
in Holdings Company and Other are the expenses of the parent holding company and certain other enterprise-wide overhead costs, which
have been included for purposes of reconciling to the consolidated amounts.

 Note 12. Income Taxes

 The components
of income before income tax benefit are as follows (in thousands):

 Schedule of Income before Income Tax Provision

 2023

 2022

 U.S.

 $
 14,613

 $
 9,491

the years ended December 31, 2023 or 2022, the Company's benefit from income taxes was as follows (in thousands):

 Schedule
of Components of Income Tax Expense (Benefit)

 2023

 2022

 Current (benefit) expense

 State

 $

 $
 ( 59
)

 Deferred (benefit)

 Federal

 ( 1,233
)

 ( 3,922
)

 State

 ( 54
)

 ( 19
)

 Total income tax (benefit) expense

 $
)

 $
)

 The
components of the income tax benefit are as follows(in thousands):

 2023

 2022

 Federal tax provision at statutory rate

 $
 3,070

 $
 2,035

 Change in valuation allowance

 ( 6,697
)

 ( 9,587
)

 State taxes, net of federal income tax benefit

 ( 52
)

 ( 97
)

 1,765

 —

 Mark-to-market adjustments

 ( 50
)

 ( 88
)

 Tax credits

 ( 167
)

 ( 403
)

 Contingent consideration revaluation

 ( 1,323
)

 1,044

 Other

 Write off of expired deferred tax
 assets

 2,064

 2,905

 Total income tax benefit

 $
)

 $
)

 The
Company records deferred tax assets if the realization of such assets is more likely than not to occur in accordance with accounting
standards that address income taxes. Significant management judgment is required in determining whether a valuation allowance against
the Company's deferred tax assets is required. The Company has considered all available evidence, both positive and negative, such
as historical levels of income and predictability of future forecasts of taxable income from existing investments, in determining whether
a valuation allowance is required. The Company is also required to forecast future taxable income in accordance with accounting standards
that address income taxes to assess the appropriateness of a valuation allowance, which further requires the exercise of significant
management judgment. The Company focuses on forecasting future taxable income for the investment portfolio that exists as of the balance
sheet date. Specifically, the Company evaluated the following criteria when considering a valuation allowance:

 the
 history of tax net operating losses in recent years;

 predictability
 of operating results;

 profitability
 for a sustained period of time; and

 level
 of profitability on a quarterly basis.

 As
of December 31, 2023, the Company had cumulative net income before tax for the three years then ended. Based on its historical
operating performance, the Company had previously concluded that it was more likely than not that the Company would not be able to realize
the full benefit of the U.S. federal and state deferred tax assets in the future. However, at December 31, 2023 the Company has
concluded that it is more likely than not that the Company will be able to realize approximately $28.3 million benefit of the U.S.
federal and state deferred tax assets in the future.

 The
Company will continue to assess the need for a valuation allowance on the deferred tax assets by evaluating both positive and negative
evidence that may exist on a quarterly basis. Any adjustment to the deferred tax asset valuation allowance would be recorded in the consolidated
statements of income for the period that the adjustment is determined to be required. The valuation allowance against deferred tax assets
was $0 and $6.7 million as of December 31, 2023 and 2022, respectively.

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

 Schedule of Deferred Tax Assets and Liabilities

 2023

 2022

 Deferred tax assets:

 Credit carryforward

 $
 2,973

 $
 2,947

 Effect of adoption of ASU 2016-13

 2,967

 —

 Stock based compensation

 Other

 2,438

 3,846

 Net operating losses

 19,891

 26,158

 Gross deferred tax assets

 $
 28,422

 $
 33,094

 Deferred tax liabilities:

 Intangible assets other than goodwill

 ( 1,288
)

 Other

 ( 718
)

 ( 629
)

 Valuation allowance

 —

 ( 6,697
)

 Net deferred tax assets

 $
 28,290

 $
 24,480

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

 As
of December 31, 2023, the Company had NOL carryforwards for federal income tax purposes of approximately $ 87.7 million. The federal
NOL carryforwards, if not offset against future income, will expire by 2037. Approximately $6.9 million can be carried forward indefinitely.

 The
Company also had federal research carryforwards of $3.0 million. The federal research credits began to expire in 2023 and will
fully expire by 2042.

 The
Company records liabilities, where appropriate, for all uncertain income tax positions and recognizes potential accrued interest and
penalties related to unrecognized tax benefits within income tax expense. As of December 31, 2023 and 2022, the Company had approximately
$ 0.6 million and $0.7 million, respectively, of
unrecognized tax benefit, none of which would impact the effective tax rate if recognized. The Company does not expect the unrecognized
tax benefits to change materially over the next twelve months. There are no tax positions for which it is reasonably possible that the
total amount of unrecognized tax benefits will significantly increase or decrease within twelve months of December 31, 2023.

 The
Company is subject to taxation in the U.S. and various state jurisdictions. The Company is currently open to audit under the statute
of limitations by the Internal Revenue Service for the years ending December 31, 1999 through December 31, 2023 due to carryforward of
unutilized net operating losses and research and development credits. The Company does not anticipate significant changes to its
uncertain tax positions through December 31, 2023.

 Note 13. Subsequent
Events

 With an effective date of January 1, 2024, Enteris, a wholly owned subsidiary
of SWK Holdings Corporation, entered into an exclusive option and asset purchase agreement with Aptar on March 14, 2024 which granted
Aptar an exclusive option to acquire certain of Enteris' tangible assets related to its business of providing good manufacturing
practice (GMP) manufacturing and clinical supply services through Phase 1 and 2 to third parties. Aptar must exercise the option by or
before January 1, 2026.

 ITEM 9. CHANGES IN AND DISAGREEMENTS
WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Evaluation of Disclosure Controls
and Procedures

 Disclosure
controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are designed to ensure that information
required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within
the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Chief Executive Officer, to allow timely decisions regarding required disclosures.

 In
connection with the preparation of this report, our management, under the supervision and with the participation of the Chief Executive
Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the
end of the period covered by this report. Based on that evaluation, our Chief Executive Officer has
concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

 Management's Report on
Internal Control over Financial Reporting

 Our
management, under the supervision of the Chief Executive Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting. Internal control over financial reporting (as defined in Rules 13a-15(f)
and 15d-15(f) under the Exchange Act) is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the
United States of America. Internal control over financial reporting includes those policies and procedures which (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets, (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, (iii) provide
reasonable assurance that receipts and expenditures are being made only in accordance with appropriate authorization of management and
the board of directors, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use
or disposition of assets that could have a material effect on the financial statements.

 In
connection with the preparation of this report, our management, under the supervision and with the participation of the Chief
Executive Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of the
end of the period covered by this report based on the criteria established in Internal Control—Integrated Framework
issued in 2013, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). As a result of
that evaluation, management concluded that as of December 31, 2023, our internal control over financial reporting was effective
based on the criteria set forth in the COSO framework.

 This
Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal control
over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant
to rules of the Securities and Exchange Commission that permit us to provide only management's report in this Annual Report.

 Inherent Limitations over Internal
Controls

 Our
system of controls is designed to provide reasonable, not absolute, assurance regarding the reliability and integrity of accounting and
financial reporting. Our management does not expect that our disclosure controls and procedures or our internal control over financial
reporting will prevent or detect all errors and fraud. A control system, no matter how well-designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system will be met. These inherent limitations include the following:

 Judgments
 in decision-making can be faulty, and control and process breakdowns can occur because of
 simple errors or mistakes;

 Controls
 can be circumvented by individuals, acting alone or in collusion with each other, or by management
 override;

 The
 design of any system of controls is based in part on certain assumptions about the likelihood
 of future events, and there can be no assurance that any design will succeed in achieving
 its stated goals under all potential future conditions;

 Over
 time, controls may become inadequate because of changes in conditions or deterioration in
 the degree of compliance with associated policies or procedures; and

 The
 design of a control system must reflect the fact that resources are constrained, and the
 benefits of controls must be considered relative to their costs.

 Because
of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, have been detected.

 Changes in Internal Control over
Financial Reporting

 There
have been no changes during the Company's fiscal year ended December 31, 2023 in our internal control over financial reporting
that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 ITEM 9B. OTHER INFORMATION

 Not Applicable.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN
JURISDICTIONS THAT PREVENT INSPECTIONS

 Not Applicable.

 We
have omitted from Part III the information that will appear in our Definitive Proxy Statement for our 2024 Annual Meeting of Stockholders
(the "2024 Proxy Statement"), which we intend to file within 120 days after the end of our fiscal year pursuant to Regulation
14A.

 ITEM 10. DIRECTORS, EXECUTIVE
OFFICERS AND CORPORATE GOVERNANCE

 Our
Board has adopted a Code of Ethics and Conduct that applies to our principal executive officer, principal financial officer and principal
accounting officer, as well as to the members of our Board and our other officers and employees. This Code of Ethics and Conduct is available
on our website at www.swkhold.com. We intend to satisfy the amendment and waiver disclosure requirements under applicable securities
regulations by posting any amendments of, or waivers to, the Code of Ethics and Conduct on our website.

 The
information under the principal headings "ELECTION OF DIRECTORS," "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE,"
and "CODE OF ETHICS AND CONDUCT", the information regarding executive officers of the Company under the subheading "Executive
Officers", and the information regarding the Audit Committee under the subheading "Board Meetings and Committees"
under the principal heading "CORPORATE GOVERNANCE," in the Company's 2024 Proxy Statement is incorporated herein by
reference.

 ITEM 11. EXECUTIVE COMPENSATION

 The
information under the principal headings "DIRECTOR COMPENSATION," "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION",
"EXECUTIVE COMPENSATION," and "RELATED INFORMATION" in the Company's 2024 Proxy Statement is incorporated
herein by reference.

 ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

 The
information under the principal headings "EQUITY COMPENSATION PLAN INFORMATION" and "OWNERSHIP OF EQUITY SECURITIES
OF THE COMPANY" in the Company's 2024 Proxy Statement is incorporated herein by reference.

 ITEM 13. CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

 The
information under the principal heading "TRANSACTION WITH RELATED PERSONS" in the Company's 2024 Proxy Statement is
incorporated herein by reference.

 ITEM 14. PRINCIPAL ACCOUNTING
FEES AND SERVICES

 Our independent public accounting firm is BPM LLP, San Francisco, CA, USA, PCAOB Auditor Firm ID 207.

 The
information under the subheadings "Audit Fees and All Other Fees" and "Audit Committee Pre-Approval of Audit and Permissible
Non-Audit Services of Independent Auditors" below the principal heading "AUDIT FEES" in the Company's 2024 Proxy
Statement is incorporated herein by reference.

 ITEM 15. EXHIBITS AND FINANCIAL
STATEMENT SCHEDULES

 (a) The following
documents are filed as part of this Report:

 1. Financial
Statements:

 Page

 Report of Independent Registered
 Public Accounting Firm (PCAOB ID #207)

 Consolidated Balance Sheets
 as of December 31, 2023 and 2022

 Consolidated Statements
 of Income for the years ended December 31, 2023 and 2022

 Consolidated Statements
 of Stockholders' Equity for the years ended December 31, 2023 and 2022

 Consolidated Statements
 of Cash Flows for the years ended December 31, 2023 and 2022

 Notes to the Consolidated
 Financial Statements

 2. Exhibits: See
attached Exhibit Index.

 ITEM 16. FORM 10-K SUMMARY

 None.

 SIGNATURES

 Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on March 20, 2024.

 SWK Holdings
 Corporation

 By:

 /s/
 Joe D. Staggs

 Joe D. Staggs

 Chief Executive Officer

 (Principal Executive Officer, Principal Financial and Accounting Officer)

 POWER OF ATTORNEY

 KNOW ALL PERSONS BY THESE PRESENTS
that each individual whose signature appears below constitutes and appoints Joe D. Staggs, his or her true and lawful attorney-in-fact
and agent, with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities,
to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full
power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully
to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact
and agent, or his or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

 Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated below as of March 20, 2024.

 By:

 /s/
 Joe D. Staggs

 Joe D. Staggs

 Chief Executive Officer

 (Principal Executive Officer, Principal Financial and Accounting Officer)

 By:

 /s/
 Jerry Albright

 Jerry Albright

 Director

 By:

 /s/
 Laurie M. Dotter

 Laurie M. Dotter

 Director

 By:

 /s/
 Robert K. Hatcher

 Robert K. Hatcher

 Director

 By:

 /s/
 Marcus E. Pennington

 Marcus E. Pennington

 Director

 EXHIBIT

 Description

 Form

 Filing
 Date

 Filed

 Herewith

 3.01

 Third Amended and Restated Certificate of Incorporation, dated as of August 12, 2022.

 3.1

 08/15/22

 3.02

 Amended and Restated Bylaws, dated as of August 12, 2022.

 3.02

 08/15/22

 4.01

 Form of Specimen Common Stock Certificate

 S-1/A

 4.01

 09/21/99

 4.02

 Description of Securities Registered Under Section 12 of the Exchange Act

 4.02

 03/31/23

 4.03

 Indenture dated as of October 3, 2023, between the Company and Wilmington Trust, National Association, as trustee.

 4.1

 10/03/23

 4.04

 First Supplemental Indenture dated as of October 3, 2023, between the Company and Wilmington Trust, National Association, as trustee

 4.2

 10/03/23

 4.05

 Form of 9.00% Senior Notes due 2027 (included as Exhibit A to 4.04 above)

 4.2.1

 45202

 10.01

 2010 Equity Incentive Plan, as amended.*

 DEF 14A

 Appendix
 A

 10/25/19

 10.02

 SWK Holdings Corporation 2010 Equity Incentive Plan Form of Restricted Stock Award Agreement.*

 10.2

 11/09/10

 10.03

 Registration Rights Agreement, dated as of September 6, 2013, among Double Black Diamond, L.P., Double Black Diamond Offshore Ltd., Black Diamond Offshore, Ltd. and the Company

 10.4

 09/09/13

 10.04

 Employment Agreement, dated January 28, 2019, between the Company and Winston L. Black III.*

 10.1

 01/30/19

 10.05

 Royalty Agreement, dated April 2, 2013, among SWK Funding LLC, Bess Royalty, L.P. and InSite Vision Incorporated.**#

 S-1/A

 10.1

 04/01/14

 10.06

 Stockholders' Agreement, dated August 18, 2014, among Double Black Diamond Offshore Ltd., Black Diamond Offshore Ltd. and SWK Holdings Corporation

 10.2

 08/19/14

 10.07

 Amendment No. 1 to the Stockholders' Agreement dated June 28, 2022

 10.1

 06/29/22

 10.08

 Amendment No. 2 to the Stockholders' Agreement dated February 27, 2023

 10.1

 3/31/23

 10.09

 Royalty Agreement dated December 13, 2016, among SWK Funding LLC and Opiant Pharmaceuticals, Inc.

 10.16

 03/29/18

 Description

 Form

 Filing
 Date

 Filed

 Herewith

 10.10

 Loan and Security Agreement between SWK Holdings Corporation and SWK Funding LLC as Borrowers and Certain Financial Institutions as Lenders and State Bank and Trust Company as Agent dated June 29, 2018

 10.1

 07/02/18

 10.11

 First Amendment to Loan and Security Agreement dated August 26, 2019 by and among SWK Holdings Corporation and Cadence Bank, N.A.

 10.1

 03/31/23

 10.12

 Second Amendment to Loan and Security Agreement dated June 29, 2021 by and among SWK Holdings Corporation and Cadence Bank, N.A.

 10.1

 06/29/21

 10.13

 Third Amendment to Loan and Security Agreement dated September 27, 2021 by and among SWK Holdings Corporation and Cadence Bank, N.A.

 10.1

 10/01/21

 10.14

 Fourth Amendment to Loan and Security Agreement, dated September 26, 2022, by and among SWK Holdings Corporation, SWK Funding LLC and Cadence Bank, N.A.

 10.1

 09/28/22

 10.15

 Fifth Amendment to Loan and Security Agreement between SWK Holdings Corporation and SWK Funding LLC as Borrowers, and Cadence Bank, a Mississippi bank and successor by merger to Cadence Bank, N.A., a

 10.1

 11/22/22

 10.16

 Letter Agreement, dated June 30, 2022, by and between the Company and Winston L. Black III

 10.1

 07/08/22

 10.17

 Separation and Release Agreement, dated August 31, 2022, by and between the Company and Winston L. Black III.

 10.2

 11/09/22

 10.18

 Employment Agreement, dated January 2, 2023 between SWK Holdings Corporation and Jody Staggs

 10.1

 01/03/23

 10.19

 Credit Agreement, dated June 28, 2023 by and among SWK Holdings Corporation, SWK Funding LLC, the Lenders party thereto and First Horizon Bank as a Lender and Agent

 10.1

 06/30/23

 10.20

 First Amendment to Credit Agreement dated October 10, 2023 by and among the Company, SWK Funding LLC, the financial institutions party thereto and First Horizon Bank as a Lender and Agent

 10.1

 10/13/23

 10.21

 Second Amendment to Credit Agreement dated December [13], 2023 by and among the Company, SWK Funding LLC, the financial institutions party thereto and First Horizon Bank as a Lender and Agent~

 X

 21.01

 Subsidiaries

 X

 23.01

 Consent of Independent Registered Public Accounting Firm - BPM LLP

 X

 Description

 Form

 Filing
 Date

 Filed

 Herewith

 24.01

 Power of Attorney (included on signature page of this Annual Report on Form 10-K).

 X

 31.01

 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 X

 32.01

 Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**

 X

 97.01

 SWK Holdings Corporation Compensation Recovery

 X

 101.INS+

 101.SCH+

 Document

 101.CAL+

 Linkbase

 101.DEF+

 Linkbase

 101.LAB+

 Linkbase

 101.PRE+

 Linkbase

 Cover Page Interactive Data File (formatted as

 *
 Management
 contracts and compensatory plans and arrangements required to be filed as exhibits pursuant to Item 15(b) of this report.

 **
 These
 certifications accompany SWK's Annual Report on Form 10-K; they are not deemed "filed"
 with the SEC and are not to be incorporated by reference in any filing of SWK under the Securities
 Act or the Exchange Act, whether made before or after the date hereof and irrespective of
 any general incorporation language in any filings, except to the extent that SWK specifically
 incorporates it by reference.

 #
 Confidential
 treatment is requested for certain confidential portions of these exhibit pursuant to Rule
 24b-2 under the Exchange Act. In accordance with Rule 24b-2, these confidential portions
 have been omitted from these exhibits and filed separately with the Securities and Exchange
 Commission

 +
 Certain portions of the exhibit have been omitted pursuant to Regulation S-K Item 601(b) because it is both (i) not material to investors
and (ii) likely to cause competitive harm to the Company if publicly disclosed.

 ~
 Certain schedules and exhibits to the Agreement have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted
schedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.