Company: SWKH
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001628280-25-025955
Chunk: 35

Company: SWK Holdings Corp
Filing Date: 2025-05-15
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 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 for recurring fair value measurements during the three months ended March 31, 2025 and 2024.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 equivalentsThe carrying amounts reported in the balance sheet for cash and cash equivalents approximate those assets’ fair values.Finance ReceivablesFinance receivables are measured at amortized cost, which approximates fair value. The fair value of finance receivables is 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.Finance Receivables held for saleFinance receivable held for sale are measured at fair value on a nonrecurring basis and evaluated using executed purchase agreements or letters of intent. The fair value is determined using a lower-of-cost