2019 Annual Meeting

2019 Annual Stockholders Meeting

       SWK Holdings Corporation’s 2019 Annual Meeting of Stockholders will be held at the Signature Exchange Conference Center, 14785 Preston Road, Dallas, Texas 75254, on Tuesday, November 19, 2019 at 9:00 a.m., central time. 

       The matters expected to be acted upon at our 2019 Annual Meeting of Stockholders are the election of six (6) directors, the ratification of the appointment of BPM LLP as our independent auditors for the fiscal year ending December 31, 2019, the approval on an advisory basis of the compensation paid to certain officers, and the approval of our 2010 Equity Incentive Plan, as amended.

The materials for the annual meeting can be found at the following links:

• 2019 Proxy
• 2018 Forms 10-K and 10-K/A

Message From Our Chief Executive

Dear Fellow Stakeholders:

       Following a productive 2018 fiscal year, we entered 2019 seeking to generate near-term and longer-range returns to the shareholders of SWK by capitalizing on our unique position as a leader in the specialty healthcare finance industry focused on commercial-stage, small to mid-sized life science companies and royalty owners. The strategy, which we continue to execute, is focused on expanding our traditional specialty healthcare finance business through synergistic transactions that offer both attractive valuations and upside optionality capable of driving returns for our shareholders. Our transformational acquisition of Enteris BioPharma, Inc. (“Enteris”) is evidence of this plan in action.

       Dovetailing our initiatives to enhance SWK’s business, we are also in the midst of transforming our position as a publicly traded company. Central to this plan is our effort to list our common stock on the NASDAQ Capital Markets. We believe our application is strong, and in preparation for this anticipated event, we have enhanced our Board of Directors to comply with market requirements and infuse the team with expertise that aligns with our growth strategy. 

       Through it all, SWK remains laser focused on securing transactions that leverage our well-established reputation as a trusted financing partner for small life sciences companies looking for capital to support their growth opportunities. This is our core business, and we expect it to remain the primary growth driver for SWK.

       I would like to take this opportunity to highlight some of our accomplishments and how these events feed into our future plans.  All this was made possible by the diligent efforts of our lean SWK team. We would like to thank our employees for their dedication and loyalty and our stakeholders for their continued support as we evolve our model and grow SWK.

A Productive 2018 Fiscal Year

       In 2018, SWK closed six new transactions, had two successful repayments and exited two non-performing situations where we have no further funding obligations. SWK also raised a credit facility to support growth efforts and initiated a stock buyback program, which was resumed earlier this year. SWK continued this positive momentum in 2019 and anticipates continued strength into 2020 and beyond. Given our reputation as a trusted financing partner for life science companies seeking unique financing structures to support growth, our opportunity pipeline remains very active. Since launching in 2012, SWK has successfully executed this business model with 35 partners, deployed $523 million of capital and created a portfolio of royalties and structured credit backed by royalties that totals $170 million across 23 partners. That said, SWK seeks to continue to improve the quality of our portfolio and our management with disciplined underwriting.

Fiscal 2019 Acquisition

       On August 26, 2019, SWK announced a strategic acquisition whereby our wholly-owned subsidiary, SWK Acquisition Corporation, acquired 100 percent of Enteris from a private equity firm. Enteris is a biotechnology company offering innovative formulation solutions utilizing its proprietary oral drug delivery technology, Peptelligence®. Enteris will operate as a wholly-owned subsidiary of SWK.

       Under the terms of the deal, SWK paid $21.5 million to the seller.  Further, Enteris and the seller will share the milestone and royalty proceeds of the Non-Exclusive License Agreement between Enteris and Cara Therapeutics, Inc. (“Cara”) executed on August 20, 2019 under which Enteris licensed its proprietary Peptelligence® oral drug formulation to Cara for use with its Oral KORSUVA™ drug development candidate per the following conditions:

• Seller received 100 percent of the $8 million upfront amount paid upon execution of the Cara License;
• Seller will receive 40 percent of the first milestone payment, with Enteris to receive 60 percent of such payment;
• Seller will receive 75 percent of any remaining milestone and royalty payments until Seller receives an aggregate $32.75 million, excluding the first milestone payment, with Enteris entitled to the remaining 25 percent; and
• All proceeds thereafter will be split evenly between Enteris and Seller.

Leadership Changes

       SWK made some key changes to its Board of Directors during fiscal year 2019. On August 30, 2019, the board expanded to include six members, and upon the recommendation of the Governance and Nominating Committee, appointed both Winston L. Black, III, Chief Executive Officer of SWK, and Aaron G.L. Fletcher, Ph.D., to the newly created board seats, effective immediately.  The board also appointed Dr. Fletcher to its Audit Committee, effective immediately.  Dr. Fletcher’s compensation as a director will be consistent with the compensation provided to all of SWK’s non-employee directors.

Application for Uplisting to NASDAQ Capital Market

       On September 3, 2019, SWK announced that it has filed an application to list its common stock on the NASDAQ Capital Market. Becoming a NASDAQ-listed company represents a significant milestone for our company that builds on the momentum from the acquisition of Enteris and our broader strategy to expand our traditional specialty healthcare finance business with opportunistic transactions that are synergistic with our specialty finance platform and offer attractive valuations with substantial upside optionality.  We expect that the move to NASDAQ will raise SWK’s visibility and enhance trading liquidity by broadening the appeal of our stock to a larger shareholder base as we execute our business plan and drive long-term shareholder value.

                                                                                                                             Sincerely,

                                                                                                                             Winston L. Black III
                                                                                                                             Chief Executive Officer