Item 9A. Controls and Procedures
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
and the Chief Financial 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 and Chief Financial 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 and Chief Financial
Officer have 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 and the Chief Financial 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 and Chief Financial 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, 2021, our internal control over financial
reporting was effective based on the criteria set forth in the COSO framework.
This
Annual Report on Form 10-K 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 the Company’s registered public accounting
firm pursuant to rules of the Securities and Exchange Commission that permit the Company 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;
61
· 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, 2021 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
None.
ITEM
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not Applicable.
62
PART
III
ITEM
10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
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 2022 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 2022 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 2022 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 2022 Proxy Statement is
incorporated herein by reference.
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES
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 2022 Proxy
Statement is incorporated herein by reference.
63
PART
IV
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)
31
Consolidated
Balance Sheets as of December 31, 2021 and 2020
33
Consolidated
Statements of Income for the years ended December 31, 2021 and 2020
34
Consolidated
Statements of Stockholders’ Equity for the years ended December 31, 2021 and 2020
35
Consolidated
Statements of Cash Flows for the years ended December 31, 2021 and 2020
36
Notes
to the Consolidated Financial Statements
37
2.
Exhibits: See attached Exhibit Index.
64
ITEM 16.
FORM 10-K SUMMARY
None.
65
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 25, 2022.
SWK
Holdings Corporation
By:
/s/
Winston L. Black
Winston
L. Black
Chief
Executive Officer
(Principal
Executive Officer)
POWER
OF ATTORNEY
KNOW
ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Winston L. Black and Charles
M. Jacobson and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution, for him and in his 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 attorneys-in-fact
and agents, and each of them, 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 attorneys-in-fact and agents or any of them, 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 and on the dates indicated.
Date:
March
25, 2022
By:
/s/
Winston L. Black
Winston
L. Black
Chief
Executive Officer and Director
(Principal
Executive Officer)
Date:
March
25, 2022
By:
/s/
Charles M. Jacobson
Charles
M. Jacobson
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
Date:
March
25, 2022
By:
/s/
Wendy F. DiCicco
Wendy
F. DiCicco
Director
Date:
March
25, 2022
By:
/s/
Laurie M. Dotter
Laurie
M. Dotter
Director
Date:
March
25, 2022
By:
/s/
Robert K. Hatcher
Robert
K. Hatcher
Director
Date:
March
25, 2022
By:
/s/
Marcus E. Pennington
Marcus
E. Pennington
Director
66
EXHIBIT
INDEX
Exhibit
Number
Exhibit
Description
Form
Exhibit
Filing
Date
Filed
Herewith
3.01
Second Amended and Restated Certificate of Incorporation, as amended by the Certificate of Amendment dated April 18, 2000.
8-K
3.1
05/04/00
3.02
Certificate of Amendment to the Amended and Restated Certificate of Incorporation dated June 29, 2001.
S-8
4.02
07/03/01
3.03
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation filed on December 11, 2001.
S-3
4.03
01/18/02
3.04
Certificate of Amendment to the Second Amended and Restated Certificate of Incorporation dated November 21, 2005.
8-A
3.04
01/31/06
3.05
Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of Kana Software, Inc.
10-K
3.05
03/31/10
3.06
Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of SWK Holdings Corporation
10-Q
3.01
08/14/15
3.07
Amended and Restated Bylaws as of May 20, 2015
8-K
3.02
05/21/15
4.01
Form of Specimen Common Stock Certificate
S-1/A
4.01
09/21/99
4.02
Form of Rights Certificate (Exhibit B to Rights Agreement filed as Exhibit 4.03)
8-K
4.01
04/14/16
4.03
Rights Agreement, dated as of April 8, 2016 by and between SWK Holdings Corporation and Computershare Trust Company, N.A.
8-K
4.02
04/14/16
4.04
Amendment No. 1 to Rights Agreement, dated as of April 8, 2019, by and between SWK Holdings Corporation and Computershare Trust Company, N.A., as Rights Agent
8-K
4.01
04/08/19
4.05
Description of Securities Registered Under Section 12 of the Exchange Act
10-K
4.05
03/31/21
10.02
2010 Equity Incentive Plan.*
10-Q
10.1
11/09/10
10.03
SWK Holdings Corporation 2010 Equity Incentive Plan Restricted Stock Award Agreement.*
10-Q
10.2
11/09/10
67
Exhibit
Number
Exhibit
Description
Form
Exhibit
Filing
Date
Filed
Herewith
10.05
Voting 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
8-K
10.3
09/09/13
10.06
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
8-K
10.4
09/09/13
10.07
Employment Agreement, dated January 28, 2019, between the Company and Winston L. Black III.*
8-K
10.1
01/30/19
10.08
Royalty Agreement, dated April 2, 2013, among SWK Funding LLC, Bess Royalty, L.P. and InSite Vision Incorporated.**#
S-1/A
10.13
04/01/14
10.09
Securities Purchase Agreement, dated August 18, 2014, between SWK Holdings Corporation and Carlson Capital, L.P.
8-K/A
10.1
08/21/14
10.10
Stockholders’ Agreement, dated August 18, 2014, among Double Black Diamond Offshore Ltd., Black Diamond Offshore Ltd. and SWK Holdings Corporation
8-K
10.2
08/19/14
10.11
Royalty Agreement dated December 13, 2016, among SWK Funding LLC and Opiant Pharmaceuticals, Inc.
10-K
10.16
03/29/18
10.12
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
8-K
10.1
06/29/18
21.01
Subsidiaries
X
23.01
Consent of Independent Registered Public Accounting Firm - BPM LLP
X
68
Exhibit
Number
Exhibit
Description
Form
Exhibit
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 Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.02
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.01
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
X
32.02
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
X
101.INS+
XBRL
Instance
101.SCH+
XBRL
Taxonomy Extension Schema
101.CAL+
XBRL
Taxonomy Extension Calculation
101.DEF+
XBRL
Taxonomy Extension Definition
101.LAB+
XBRL
Taxonomy Extension Labels
101.PRE+
XBRL
Taxonomy Extension Presentation
*
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
+
XBRL
information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the
Securities Act is deemed not filed for purposes of Section 18 of the Exchange Act and otherwise is not subject to liability under
these sections.
69