Financial Reporting Non-GAAP Reconciliation to GAAP

The following tables provide a reconciliation of SWK’s GAAP net income to non-GAAP adjusted net income for the last twelve month period ended September 30, 2019 and for the fiscal years ended December 31, 2015 through 2018.

In the table above, management has deducted the following non-cash items: (i) fair-market value of warrants as mark-to-market changes are non-cash, (ii) income taxes as the Company has substantial net operating losses to offset against future income, and (iii) depreciation and amortization expenses, primarily associated with the Enteris acquisition.