Company: UFPT
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001628280-25-050425
Chunk: 66

Company: UFP TECHNOLOGIES INC
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 8
Chunk 66
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 receivables. The estimate of the amount of accounts receivable that may not be collected is based on the aging of the accounts receivable balances as well as the financial condition of customers. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. The Company’s monitoring activities include timely account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible.The following table provides a roll-forward of the allowance for credit losses that is deducted from accounts receivable to present the net amount expected to be collected for the nine months ended September 30, 2025 and 2024 (in thousands):Allowance for Credit LossesNine Months Ended September 30,20252024Allowance - beginning of period$885 $727 (Provision) adjustment for expected credit losses(63)355 Amounts written off against the allowance, net of recoveries(9)(28)Allowance - end of period$813 $1,054 

(7)    Fair Value of Financial Instruments

Financial instruments recorded at fair value in the consolidated balance sheets, or disclosed at fair value in the footnotes, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels defined by ASC 820, Fair Value Measurements and Disclosures, and directly related to the amount of subjectivity associated with inputs to fair valuation of these assets and liabilities, are as follows:Level 1Valued based on unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.Level 2Valued based on either directly or indirectly observable prices for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.Level 3Valued based on management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

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The following table presents the fair value and hierarchical levels, for financial assets that are measured at fair value on a recurring basis (in thousands):September 30,2025December 31,2024Level 3Purchase price contingent consideration:Acc