Priority Technology Holdings, Inc.

14. Fair Value

Fair Value Disclosures

The Company's contingent considerations were derived from business combinations occurring during nine months ended September 30, 2025 (refer to Note 2. Acquisitions). The contingent considerations are classified within Level 3 of the fair value hierarchy due to the uncertainty of the fair value measurement created by the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value which require judgment. The Company uses valuation techniques including Monte Carlo simulations to estimate fair value based on projection period and assumed growth rates. A change in inputs in the valuation techniques used might result in a significantly higher or lower fair value measurement than what is reported. Contingent consideration liabilities are uncertain due to the utilization of unobservable inputs and management's judgment in determining the likelihood of achieving criteria required by the respective agreements. The contingent considerations fair value of $4.5 million at September 30, 2025, are included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets. There were no contingent consideration on the Company's balance sheet at December 31, 2024.

Notes Receivable

Notes receivable are carried at amortized cost. Substantially all of the Company's notes receivable are secured, and the Company provides for allowances when it believes that certain notes receivable may not be collectible. The carrying value of the Company's notes receivable, net approximates fair value and was approximately $13.6 million and $8.6 million at September 30, 2025 and December 31, 2024, respectively and is within Level 3 of the fair value hierarchy.

Short-term investments

Short-term investments are certificate of deposits which have a maturity that extends beyond three months but within one year of the initial purchase date and are carried at amortized cost. The carrying value approximates fair value of $46.7 million and is within Level 2 of the fair value hierarchy.

Debt Obligations

Outstanding debt obligations (see Note 8. Debt Obligations) are reflected in the Company's Unaudited Consolidated Balance Sheets at carrying value since the Company did not elect to remeasure debt obligations to fair value at the end of each reporting period.

The fair value of the term facility was estimated to be $1.0 billion and $944.4 million at September 30, 2025 and December 31, 2024, respectively. The fair value of the Residual Finance Credit Facility was estimated to be $23.9 million as of September 30, 2025. Both were estimated using binding and non-binding quoted prices in an active secondary market, which considers the credit risk and market related conditions, and is within Level 2 of the fair value hierarchy.

During the three and nine months ended September 30, 2025, there were no transfers into, out of, or between levels of the fair value hierarchy.