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Item 1. Financial Statements

2024-08-08 compared with 2024-05-09 · 258 added, 153 removed, 530 unchanged (44% of the section changed)

Financial Statements

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets:

29 unchanged sentences

250,000 shares authorized;

225,000 issued and outstanding at March 31, 2024 and December 31, 2023

225,000 shares issued at June 30, 2024 and December 31, 2023;

88,064 and 225,000 shares outstanding at June 30, 2024 and December 31, 2023, respectively

105,684 258,605

Redeemable non-controlling interests in consolidated subsidiary 5,837 —

Stockholders' deficit:

1 unchanged sentence

100,000,000 shares authorized;

0 issued or outstanding at March 31, 2024 and December 31, 2023

0 issued or outstanding at June 30, 2024 and December 31, 2023

Common Stock, $ 0.001 par value;

1,000,000,000 shares authorized;

80,018,209 and 79,589,055 shares issued at March 31, 2024 and December 31, 2023, respectively;

and 75,834,517 and 76,956,889 shares outstanding at March 31, 2024 and December 31, 2023, respectively

Treasury stock at cost, 4,183,692 and 2,632,166 shares at March 31, 2024 and December 31, 2023, respectively

80,208,533 and 79,589,055 shares issued at June 30, 2024 and December 31, 2023, respectively;

and 75,967,543 and 76,956,889 shares outstanding at June 30, 2024 and December 31, 2023, respectively

Treasury stock at cost, 4,240,990 and 2,632,166 shares at June 30, 2024 and December 31, 2023, respectively

( 18,673 ) ( 12,815 )

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Revenues $ 219,867 $ 182,290 $ 425,586 $ 367,318

8 unchanged sentences

Interest expense ( 21,710 ) ( 17,765 ) ( 42,590 ) ( 35,464 )

Debt extinguishment and modification costs ( 8,623 ) — ( 8,623 ) —

Other income, net 668 375 1,300 587

Total other expense, net ( 29,665 ) ( 17,390 ) ( 49,913 ) ( 34,877 )

Income (loss) before income taxes 7,775 ( 639 )

Income tax expense (benefit) 2,582 ( 133 )

Income before income taxes 3,509 1,743 11,284 1,104

Income tax expense 2,515 2,355 5,097 2,222

Net income (loss) 994 ( 612 ) 6,187 ( 1,118 )

9 unchanged sentences

Basic and diluted 77,736 78,292 77,878 78,213

See Notes to Unaudited Consolidated Financial Statements

See Notes to Unaudited Consolidated Financial Statement

Priority Technology Holdings, Inc .

16 unchanged sentences

March 31, 2024 75,835 $ 76 4,183 $ ( 18,491 ) $ — $ ( 42 ) $ ( 141,412 ) $ ( 159,869 ) $ 1,747 $ ( 158,122 )

Equity-classified stock-based compensation — — — — 1,744 — — 1,744 — 1,744

ESPP compensation and vesting of stock-based compensation 190 — — — 60 — — 60 — 60

Shares withheld for taxes ( 57 ) — 57 ( 182 ) — — — ( 182 ) — ( 182 )

Redemption of PHOT redeemable NCI — — — — 3,765 — — 3,765 — 3,765

Return on PHOT redeemable NCI — — — — ( 58 ) — — ( 58 ) ( 58 )

Dividends on redeemable senior preferred stock — — — — ( 8,426 ) — — ( 8,426 ) — ( 8,426 )

Accretion of redeemable senior preferred stock — — — — ( 10,139 ) — — ( 10,139 ) — ( 10,139 )

Issuance of profit interests/ common equity in subsidiaries — — — — — — — — 85 85

Foreign currency translation adjustment — — — — — 4 — 4 — 4

Reclassification of negative additional paid-in capital — — — — 13,054 — ( 13,054 ) — — —

Net income — — — — — — 994 994 — 994

June 30, 2024 75,968 $ 76 4,240 $ ( 18,673 ) $ — $ ( 38 ) $ ( 153,472 ) $ ( 172,107 ) $ 1,832 $ ( 170,275 )

Priority Technology Holdings, Inc .

Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest

(in thousands)

Stock Treasury

11 unchanged sentences

March 31, 2023 76,404 $ 76 2,498 $ ( 12,336 ) $ 328 $ 24 $ ( 102,714 ) $ ( 114,622 ) $ 852 $ ( 113,770 )

Equity-classified stock-based compensation — — — — 1,746 — — 1,746 — 1,746

ESPP compensation and vesting of stock-based compensation 192 — — — 43 — — 43 — 43

Share repurchases and shares withheld for taxes ( 65 ) — 65 ( 241 ) — — — ( 241 ) — ( 241 )

Dividends on redeemable senior preferred stock — — — — ( 10,934 ) — — ( 10,934 ) — ( 10,934 )

Accretion of redeemable senior preferred stock — — — — ( 831 ) — — ( 831 ) — ( 831 )

Foreign currency translation adjustment — — — — — 7 — 7 — 7

Reclassification of negative additional paid-in capital — — — — 9,648 — ( 9,648 ) — — —

Net income — — — — — — ( 612 ) ( 612 ) — ( 612 )

June 30, 2023 76,531 $ 76 2,563 $ ( 12,577 ) $ — $ 31 $ ( 112,974 ) $ ( 125,444 ) $ 852 $ ( 124,592 )

See Notes to Unaudited Consolidated Financial Statements

Priority Technology Holdings, Inc .

Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

4 unchanged sentences

Amortization of debt issuance costs and discounts 1,824 1,826

Debt extinguishment and modification costs 8,623 —

Deferred income tax ( 3,023 ) ( 9,619 )

16 unchanged sentences

Cash flows from financing activities:

Proceeds from issuance of long-term debt, net of issue discount 830,200 —

Debt issuance and modification costs paid ( 7,555 ) —

Repayments of long-term debt ( 654,372 ) ( 3,525 )

Borrowings under revolving credit facility — 5,000

Repayments of borrowings under revolving credit facility — ( 12,000 )

Repurchases of Common Stock and shares withheld for taxes ( 421 ) ( 777 )

Redemption of PHOT redeemable NCI ( 2,130 ) —

Repurchases of shares withheld for taxes ( 604 ) ( 1,018 )

Redemption of senior preferred stock ( 136,936 ) —

Redemption of accumulated unpaid dividend on redeemable senior preferred stock ( 30,819 ) —

Dividends paid to redeemable senior preferred stockholders 1

2 unchanged sentences

Payment of contingent consideration related to business combination ( 4,156 ) ( 1,959 )

Net cash (used in) provided by financing activities ( 10,279 ) 57,537

Net cash provided by financing activities 18,149 144,138

Net change in cash and cash equivalents and restricted cash:

Net (decrease) increase in cash and cash equivalents, and restricted cash ( 4,641 ) 77,631

Net increase in cash and cash equivalents, and restricted cash 39,558 177,913

Cash and cash equivalents and restricted cash at beginning of period 796,223 560,610

1 unchanged sentence

Priority Technology Holdings, Inc .

Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Reconciliation of cash and cash equivalents, and restricted cash:

7 unchanged sentences

Non-cash investing and financing activities:

Forfeiture of liability-classified award $ — $ 596

Contingent consideration accrual $ — $ 596

Acquisition of intangible asset $ ( 5,751 ) $ 193

Issuance of NCI $ 178 $ —

(1) The dividend payable for the quarter ended March 31, 2024, was paid on April 1, 2024.

See Notes to Unaudited Consolidated Financial Statements

Priority Technology Holdings, Inc .

Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest

(in thousands)

(1) The dividend payable for the quarter ended June 30, 2024, was paid on July 1, 2024.

See Notes to Unaudited Consolidated Statements

Priority Technology Holdings, Inc.

15 unchanged sentences

Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions.

As of March 31, 2024, there was no income or loss attributable to NCI in accordance with the applicable operating agreements.

Redeemable NCI represents non-controlling ownership of certain redeemable preferred units in one of the Company's consolidated subsidiaries.

These preferred units carry a compounded coupon rate of 6 % per annum.

The return on the redeemable NCI for the three months ended March 31, 2024, since the reissuance of these redeemable preferred units, is $ 0.6 million.

Refer to Note 13.

Related Party Transactions .

As of June 30, 2024, there was no income or loss attributable to NCI in accordance with the applicable operating agreements.

In the opinion of the Company's management, all known adjustments necessary for a fair presentation of the Unaudited Consolidated Financial Statements for interim periods have been made.

1 unchanged sentence

These Unaudited Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

The results for the quarter ended March 31, 2024 include the results of the Plastiq business acquired through Chapter 11 bankruptcy process on July 31, 2023.

The results for the three and six months ended June 30, 2024 include the results of the Plastiq business acquired through Chapter 11 bankruptcy process on July 31, 2023.

Use of Estimates

3 unchanged sentences

The Company's reporting currency is the U.S.

The functional currency of the Indian subsidiary of the Company is Indian Rupee (i.e.

The functional currency of the Indian subsidiary of the Company is the Indian Rupee (i.e.

local currency of Republic of India).

1 unchanged sentence

Accordingly, assets and liabilities denominated in a foreign currency are translated into U.S.

dollars at the

current exchange rate on the last day of the reporting period.

dollars at the current exchange rate on the last day of the reporting period.

Revenues and expenses are translated using the average exchange rate in effect during the reporting period.

Translation adjustments are reported as a component of accumulated other comprehensive income (loss).

Reclassification

In January 2024, the Company changed the grouping of certain business activity to conform to the way we internally manage and monitor the business.

As a result, certain immaterial activity was reassigned from the SMB Payments segment to the Enterprise Payments segment effective January 1, 2024.

Impact on prior year segment results were determined to be immaterial and have not been reclassified to reflect this change.

Recently Issued Accounting Standards Pending Adoption

19 unchanged sentences

and certain of its affiliates ("Plastiq") to acquire substantially all of the assets of Plastiq, including the equity interest in Plastiq Canada, Inc.

Plastiq is a buyer funded B2B payments platform offering bill pay and instant access to working capital to its customers and will complement the Company's existing supplier-funded B2B payments business.

Plastiq is a buyer funded B2B payments platform offering bill pay and instant access to working capital to its customers and complements the Company's existing supplier-funded B2B payments business.

On May 24, 2023, Plastiq filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware.

26 unchanged sentences

(2) The intangible assets acquired consist of $ 13.0 million for customer relationships, $ 7.0 million for referral partner relationships, $ 6.5 million for technology and $ 3.9 million for trade name.

(3) During the first quarter of 2024, the Company recorded an immaterial measurement period adjustment due to a pre-acquisition tax accrual which resulted in an adjustment to goodwill and accounts payable and accrued expenses.

(3) During the first and second quarters of 2024, the Company recorded immaterial measurement period adjustments due to a pre-acquisition tax accrual and security deposit which resulted in an adjustment to goodwill, accounts payable and accrued expenses, and prepaid expenses.

Disaggregation of Revenues

The following table presents a disaggregation of our consolidated revenues by type:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

3 unchanged sentences

Outsourced services and other services (2)

16,256 10,582 31,921 21,587

Equipment 3,025 3,466 5,988 6,439

3 unchanged sentences

The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material.

(2) Approximately $ 11.9 million and $ 5.0 million of interest income for the three months ended March 31, 2024 and 2023, respectively, is included in outsourced services and other services revenue in the table above.

Approximately $ 0.6 million and $ 0.2 million of interest income for the three months ended March 31, 2024, and 2023, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss and not reflected in the table above.

(2) Approximately $ 13.1 million and $ 25.0 million of interest income for the three and six months ended June 30, 2024, respectively, and $ 7.2 million and $ 12.2 million for the three and six months ended June 30, 2023, respectively, is included in outsourced services and other services revenue in the table above.

Approximately $ 0.6 million and $ 1.2 million of interest income for the three and six months ended June 30, 2024, respectively, and $ 0.3 million and $ 0.6 million three and six months ended June 30, 2023, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss and not reflected in the table above.

The following table presents a disaggregation of our consolidated revenues by segment:

Three months ended March 31, 2024

Three Months Ended June 30, 2024

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

2 unchanged sentences

Enterprise Payments 451 31,340 11,879 — 43,670

Eliminations ( 583 ) — ( 202 ) — ( 785 )

Total revenues $ 169,246 $ 31,340 $ 16,256 $ 3,025 $ 219,867

Three Months Ended March 31, 2023

Six Months Ended June 30, 2024

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

2 unchanged sentences

Enterprise Payments 804 60,484 23,372 — 84,660

Eliminations ( 1,078 ) — ( 326 ) — ( 1,404 )

Total revenues $ 327,193 $ 60,484 $ 31,921 $ 5,988 $ 425,586

Deferred revenues were not material for the three months ended March 31, 2024 and 2023.

Three Months Ended June 30, 2023

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

SMB Payments $ 143,544 $ — $ 938 $ 3,466 $ 147,948

B2B Payments 954 — 2,020 — 2,974

Enterprise Payments 26 23,718 7,694 — 31,438

Eliminations — — ( 70 ) — ( 70 )

Total revenues $ 144,524 $ 23,718 $ 10,582 $ 3,466 $ 182,290

Six Months Ended June 30, 2023

(in thousands) Merchant Card Fees Money Transmission Services Outsourced and Other Services Equipment Total

SMB Payments $ 292,232 $ — $ 4,210 $ 6,439 $ 302,881

B2B Payments 1,881 — 3,879 — 5,760

Enterprise Payments 55 45,124 13,565 — 58,744

Eliminations — — ( 67 ) — ( 67 )

Total revenues $ 294,168 $ 45,124 $ 21,587 $ 6,439 $ 367,318

Deferred revenues were not material for the three and six months ended June 30, 2024 and 2023.

Contract Assets and Contract Liabilities

Material contract assets and liabilities are presented net at the individual contract level in the Unaudited Consolidated Balance Sheets and are classified as current or noncurrent based on the nature of the underlying contractual rights and obligations.

Contract liabilities were $ 0.6 million and $ 0.6 million as of March 31, 2024 and December 31, 2023, respectively.

Contract liabilities were $ 0.6 million and $ 0.6 million as of June 30, 2024 and December 31, 2023, respectively.

Substantially all of these balances are recognized as revenue within 12 months.

Net contract assets were not material for any period presented.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were not material for the three months ended March 31, 2024 and 2023.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were not material for the three and six months ended June 30, 2024 and 2023.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations

2 unchanged sentences

The standards of the card networks require possession of funds during the settlement process by a member bank which controls the clearing transactions.

Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated obligations are not liabilities of the Company.

Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated

obligations are not liabilities of the Company.

Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets.

Member banks held merchant funds of $ 109.2 million and $ 98.0 million at March 31, 2024 and December 31, 2023, respectively.

Member banks held merchant funds of $ 97.7 million and $ 98.0 million at June 30, 2024 and December 31, 2023, respectively.

Exception items that become the liability of the Company are recorded as merchant losses, a component of cost of revenue in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.

Exception items that the Company is still attempting to collect from the merchants through the funds settlement process or merchant reserves are recognized as settlement assets and customer/subscriber account balances in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover.

Expenses for merchant losses for the three months ended March 31, 2024 and 2023 were $ 4.7 million and $ 1.0 million, respectively.

Expenses for merchant losses for the three and six months ended June 30, 2024 were $ 1.7 million and $ 6.5 million, respectively.

Expenses for merchant losses for the three and six months ended June 30, 2023 were $ 1.1 million and $ 2.1 million, respectively.

B2B Payments Segment

1 unchanged sentence

Customers transfer funds to the Company, which are held in either company-owned bank accounts controlled by the Company or bank-owned FBO accounts controlled by the banks, until such time that the transactions are settled with the customer payees.

Amounts due to customer payees that are held by the Company in company-owned bank accounts are included in restricted cash.

Amounts due to customer payees that are held by the Company in company-owned bank accounts are included in restricted cash in the Company's Unaudited Consolidated Balance Sheets.

Amounts due to customer payees that are held in bank-owned FBO accounts are not assets of the Company, and the associated obligations are not liabilities of the Company.

Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets.

Bank-owned FBO accounts held funds of $ 79.1 million and $ 69.0 million at March 31, 2024 and December 31, 2023, respectively.

Company-owned bank accounts held $ 1.6 million and $ 1.2 million at March 31, 2024 and December 31, 2023, respectively, which are included in restricted cash and settlement and customer/subscriber account obligations in the Company's Unaudited Consolidated Balance Sheets.

Bank-owned FBO accounts held funds of $ 93.1 million and $ 69.0 million at June 30, 2024 and December 31, 2023, respectively.

Company-owned bank accounts held $ 1.7 million and $ 1.2 million at June 30, 2024 and December 31, 2023, respectively, which are included in restricted cash and settlement and customer/subscriber account obligations in the Company's Unaudited Consolidated Balance Sheets.

Exception items that the Company is still attempting to collect from the customers through the funds settlement process are recognized as settlement assets and customer/subscriber account balances in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover.

Expenses for these merchant losses for the three months ended March 31, 2024 were $ 0.2 million.

There were no expenses for these merchant losses in 2023.

For the Plastiq business, the Company accepts card payments from its customers and processes disbursements to their vendors.

The time lag between authorization and settlement of card transactions creates certain receivables (from card networks) and

payables (to the vendors of customers).

Expenses for these merchant losses for the three and six months ended June 30, 2024 were $ 0.1 million and $ 0.3 million, respectively.

Expenses for merchant losses for the three and six months ended June 30, 2023 were not material.

The Company accepts card payments from its customers and processes disbursements to their vendors within the Plastiq business.

The time lag between authorization and settlement of card transactions creates certain receivables (from card networks) and payables (to the vendors of customers).

These receivables and payables arise from the settlement activities that the Company performs on the behalf of its customers and therefore, are presented as settlement assets and related obligations.

7 unchanged sentences

Therefore, the Company has classified these balances as settlement assets and customer/subscriber account balances and the related obligations as settlement and customer/subscriber account obligations in the Company's Unaudited Consolidated Balance Sheets.

Expenses for merchant losses for the

three and six months ended June 30, 2024 were $ 0.4 million and $ 0.4 million, respectively.

Expenses for merchant losses for the three and six months ended June 30, 2023 were not material.

In certain states, the Company accepts deposits under agency arrangement with member banks wherein accepted deposits remain under the control of the member banks.

Therefore, the Company does not record assets for the deposits accepted and liabilities for the associated obligation.

Agency owned accounts held $ 46.2 million and $ 19.6 million at March 31, 2024 and December 31, 2023, respectively.

Agency owned accounts held $ 53.0 million and $ 19.6 million at June 30, 2024 and December 31, 2023, respectively.

The Company's consolidated settlement assets and customer/subscriber account balances and settlement and customer/subscriber account obligations were as follows:

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

Settlement Assets, net of estimated losses (1) :

10 unchanged sentences

Due to customers' payees (2)

10,224 11,058

Total settlement and customer/subscriber account obligations $ 798,753 $ 755,754

(1) Allowance for estimated losses was $ 9.2 million and $ 6.6 million as of March 31, 2024 and December 31, 2023, respectively

(2) Card settlements due from networks includes $ 6.3 million and $ 8.2 million as of March 31, 2024 and December 31, 2023, respectively, related assets and remainder are included in restricted cash on our Unaudited Consolidated Balance Sheets.

(1) Allowance for estimated losses was $ 7.5 million and $ 6.6 million as of June 30, 2024 and December 31, 2023, respectively.

(2) Card settlements due from networks includes $ 7.7 million and $ 8.2 million as of June 30, 2024 and December 31, 2023, respectively, related assets and remainder are included in restricted cash on our Unaudited Consolidated Balance Sheets.

Notes Receivable

The Company had notes receivable of $ 6.5 million and $ 5.2 million as of March 31, 2024 and December 31, 2023, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets.

The notes receivable carried weighted-average interest rates of 18.5 % and 18.6 % as of March 31,

2024 and December 31, 2023.

The Company had notes receivable of $ 7.2 million and $ 5.2 million as of June 30, 2024 and December 31, 2023, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets.

The notes receivable carried weighted-average interest rates of 18.6 % as of June 30, 2024 and December 31, 2023.

The notes receivable are comprised of notes receivable from ISOs, and under the terms of the agreements the Company preserves the right to hold back residual payments due to the ISOs and to apply such residuals against future payments due to the Company.

As of March 31, 2024 and December 31, 2023, the Company had no allowance for doubtful notes receivable.

As of March 31, 2024, the principal payments for the Company's notes receivable are due as follows:

As of June 30, 2024 and December 31, 2023, the Company had no allowance for doubtful notes receivable.

As of June 30, 2024, the principal payments for the Company's notes receivable are due as follows:

(in thousands)

Twelve months ending March 31,

After 2028 247

Twelve months ending June 30,

Total $ 7,186

1 unchanged sentence

A summary of property, equipment and software, net was as follows:

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

Computer software $ 85,934 $ 78,492

6 unchanged sentences

Property, equipment and software, net $ 49,800 $ 44,680

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

2 unchanged sentences

Fully depreciated assets are retained in property, equipment and software, net, until removed from service.

During the quarter ended March 31, 2024, certain fully depreciated assets were removed from service.

During the three and six months ended June 30, 2024, certain fully depreciated assets were removed from service.

Goodwill and Other Intangible Assets

The Company's goodwill relates to the following reporting units:

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

SMB Payments $ 124,139 $ 124,139

6 unchanged sentences

Plastiq adjustment ( 12 )

Balance at March 31, 2024

As of March 31, 2024, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test.

Balance at June 30, 2024

As of June 30, 2024, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test.

Other Intangible Assets

Other intangible assets consisted of the following:

March 31, 2024 Weighted-average

June 30, 2024 Weighted-average

(in thousands, except weighted-average data) Gross Carrying Value Accumulated Amortization Net Carrying Value

25 unchanged sentences

(1) These assets have an indefinite useful life.

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

1 unchanged sentence

$ 11,816 $ 15,165 $ 23,899 $ 30,456

(1) Included in amortization expense is $ 0.4 million and $ 0.1 million as of March 31, 2024 and 2023, respectively, related to the amortization of certain contract acquisition costs.

As of March 31, 2024, there were no impairment indicators present.

(1) Included in amortization expense is $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2024, respectively, and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively, related to the amortization of certain contract acquisition costs.

As of June 30, 2024, there were no impairment indicators present.

Debt Obligations

Outstanding debt obligations consisted of the following:

(in thousands) March 31, 2024 December 31, 2023

Term facility - matures April 27, 2027, interest rates of 11.19 % and 11.21 % at March 31, 2024 and December 31, 2023, respectively

June 30, 2024 December 31, 2023

2024 Credit Agreement

Term facility - matures May 16, 2031, interest rate of 10.08 % at June 30, 2024

$ 835,000 $ —

Revolving credit facility - $ 65.0 million line as of March 31, 2024 and December 31, 2023, matures April 27, 2026, interest rate of 10.20 % at March 31, 2024 and December 31, 2023

Revolving credit facility - $ 70.0 million line at June 30, 2024, matures May 16, 2029, interest rate of 9.58 % at June 30, 2024

2021 Credit Agreement - refinanced on May 16, 2024

Term facility - original maturity April 27, 2027, interest rate of 11.21 % at December 31, 2023

Revolving credit facility - $ 65.0 million line as of December 31, 2023, original Maturity April 27, 2026, interest rate of 10.20 % at December 31, 2023

Total debt obligations 835,000 654,373

2 unchanged sentences

Long-term debt, net $ 809,045 $ 631,965

2024 Credit Agreement

On May 16, 2024, the Company entered into a Credit Agreement ("2024 Credit Agreement") which provides 1) a $ 835.0 million senior secured first lien term loan facility ;

and 2) a $ 70.0 million senior secured revolving facility ("Credit facilities").

Proceeds from these Credit facilities were used to repay the outstanding balances under the 2021 Credit Agreement and redeem a portion of the Company's redeemable senior preferred stock (see Note 9.

Redeemable Securities ).

In accordance with ASC 470, the Company determined on a creditor-by-creditor basis that the 2024 Credit Agreement was both a debt modification and extinguishment of the 2021 Credit Agreement.

The Company expensed $ 3.8 million of previously unamortized fees and $ 4.8 million of debt issuance costs related to the refinancing which is reported in debt extinguishment and modification in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.

Outstanding borrowings under the Credit agreement accrue interest using a base rate or a SOFR rate plus an applicable margin per year, subject to a SOFR rate floor of 0.50 % per year.

The revolving credit facility incurs an unused commitment fee on any undrawn amount in an amount equal to 0.50 % per year of the unused portion.

The future applicable interest rate margins may vary based on the Company's Total Net Leverage Ratio in addition to future changes in the underlying market rates for SOFR and the rate used for base-rate borrowings.

The 2024 Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the loan parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates) and to enter into certain leases.

If the aggregate principal amount of outstanding revolving loans and letters of credit under the 2024 Credit Agreement exceeds 35 % of the total revolving credit facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio.

If applicable, the maximum permitted Total Net Leverage Ratio is:

1) 6.90 :1.00 at each fiscal quarter ended September 30, 2024 through December 31, 2025;

2) 6.40 :1.00 at each fiscal quarter ended March 31, 2026 and each fiscal quarter thereafter.

As of June 30, 2024, the Company was in compliance with the covenants in the 2024 Credit Agreement.

2021 Credit Agreement

On April 27, 2021, the Company entered into the 2021 Credit Agreement with Truist which provides for:

1) a $ 300.0 million Initial Term Loan;

2) a $ 290.0 million Delayed Draw Term Loan (together, the "Term Facility");

and 3) a $ 40.0 million senior secured revolving credit facility.

The First Amendment to the Credit Agreement on May 20, 2021, clarified and provided further detail on the Credit Agreement's terms.

The Second Amendment to the Credit Agreement on September 17, 2021, increased the amount of the Delayed Draw Term Loan facility by $ 30.0 million to $ 320.0 million.

The additional Delayed Draw Term Loan is part of the same class of term loans made pursuant to the original commitments under the Credit Agreement.

The third amendment amended the reference rate from LIBOR to SOFR and increased the revolving facility from $ 40.0 million to $ 65.0 million effecting June 30, 2023.

The fourth amendment increased the principal balance by $ 50.0 million and increased the quarterly principal amortization payment from $ 1.6 million to $ 1.7 million.

Outstanding borrowings from the 2021 Credit Agreement were repaid on May 16, 2024 as part of the refinancing and the Company was released from any related commitments, guarantees and security interests.

Outstanding borrowings under the Credit Agreement accrued interest using either a base rate or a SOFR rate plus an applicable margin per year, subject to a SOFR rate floor of 1.00 % per year.

Accrued interest is payable on each interest payment date (as defined in the Credit Agreement).

The revolving credit facility incurs an unused commitment fee on any undrawn amount in an amount equal to 0.50 % per year of the unused portion.

Proceeds from the Initial Term Loan were used to partially fund the refinancing of the Company's existing credit facilities as of April 27, 2021.

Proceeds from the Delayed Draw Term Loan were used to fund the Company's acquisition of Finxera.

Proceeds from the Fourth Amendment were used to repay the balance of the revolving credit facility (used to acquire the Plastiq business) and added additional cash for general corporate purposes.

Interest Expense and Amortization of Deferred Loan Costs and Discounts

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Interest expense for outstanding debt, including fees for undrawn amounts and amortization of deferred financing costs and debt discounts was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended March 31,

(in thousands) 2024 2023 2024 2023

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$ 21,710 $ 17,765 $ 42,590 $ 35,464

(1) Included in interest expense is $ 1.0 million and $ 0.1 million related to the accretion of contingent consideration from acquisitions for the three months ended March 31, 2024, and 2023, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 1.1 million and $ 0.9 million for the three months ended March 31, 2024, and 2023, respectively.

Debt Covenants

The Credit Agreement contains representations and warranties, financial and collateral requirements, mandatory payment events, events of default and affirmative and negative covenants, including without limitation, covenants that restrict among other things, the ability to create liens, pay dividends or distribute assets from the loan parties to the Company, merge or consolidate, dispose of assets, incur additional indebtedness, make certain investments or acquisitions, enter into certain transactions (including with affiliates) and to enter into certain leases.

If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35 % of the total revolving credit facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio.

If applicable, the maximum permitted Total Net Leverage Ratio is:

1) 6.50 :1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022;

2) 6.00 :1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023;

and 3) 5.50 :1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter.

As of March 31, 2024, the Company was in compliance with the covenants in the Credit Agreement.

(1) Included in interest expense is $ 1.2 million and $ 2.2 million related to the accretion of contingent consideration from acquisitions for the three and six months ended June 30, 2024, respectively, $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2023, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 0.8 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively, and $ 0.9 million and $ 1.8 million for the three and six months ended June 30, 2023, respectively.

Redeemable Senior Preferred Stock and Warrants

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The following table provides the redemption value of the redeemable senior preferred stock for the periods presented:

(in thousands) March 31, 2024 December 31, 2023

(in thousands) June 30, 2024 December 31, 2023

Redeemable senior preferred stock $ 88,064 $ 225,000

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March 31, 2024 225 264,240

The dividend rate as of March 31, 2024 and December 31, 2023, was 17.6 % and 17.7 % respectively.

The following table provides a summary of the dividends for the period presented:

Three Months Ended March 31,

Redemption of senior preferred stock (1)

( 137 ) ( 166,268 )

Unpaid dividend on redeemable senior preferred stock — 1,871

Accretion of discounts and issuance costs — 10,139

Cash portion of dividend outstanding at June 30, 2024 — 2,824

Payment of cash portion of dividend outstanding at March 31, 2024 — ( 7,122 )

June 30, 2024 88 $ 105,684

(1) On May 16, 2024, the Company used proceeds totaling $ 170.0 million from the refinancing ( see Note 8.

Debt Obligations ) to redeem a portion of the redeemable senior preferred stock.

The redemption consisted of $ 136.9 million of redeemable senior preferred stock, $ 29.4 million for accumulated unpaid dividend, and $ 2.2 million of cash dividend and $ 1.5 million of accumulated unpaid dividend for the quarter ending June 30, 2024.

The dividend rate as of June 30, 2024 and December 31, 2023, was 17.6 % and 17.7 % respectively.

The following table provides a summary of the dividends for the periods presented:

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

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Dividends declared $ 8,426 $ 10,934 $ 20,247 $ 21,411

(1) Dividend payable for the three months ended March 31, 2024 was paid on April 1, 2024.

(1) Dividend payable for the three months ended June 30, 2024 of $ 2.8 million was paid on July 1, 2024.

On June 30, 2023, the Company amended the Certificate of Designation of its redeemable senior preferred stock to transition the reference rate used for the calculation of dividends from LIBOR to SOFR.

Under the Amended Certificate of Designation, the dividend rate (capped at 22.50 %) is equal to the three-month term SOFR (minimum of 1.00 %), plus the three-month term SOFR spread adjustment of 0.26 % plus the applicable margin of 12.00 %.

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In 2021, the Company issued warrants to purchase up to 1,803,841 shares of the Common Stock, at an exercise price of $ 0.001 .

As of March 31, 2024, none of the warrants have been exercised.

As of June 30, 2024, none of the warrants have been exercised.

The warrants are considered to be equity contracts indexed in the Company's own shares and therefore were recorded at their inception date relative fair value and are included in additional paid-in capital on the Company's Unaudited Consolidated Balance Sheets.

The Company's consolidated effective income tax rate for the three months ended March 31, 2024, was 33.2 % compared to a consolidated effective income tax rate of 20.8 % for the three months ended March 31, 2023.

The Company's consolidated effective income tax rate for the three and six months ended June 30, 2024, was 71.7 % and 45.2 %, respectively, compared to a consolidated effective income tax rate of 135.1 % and 201.3 % for the three and six months ended June 30, 2023, respectively.

The effective rates differed from the statutory rate of 21.0% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets, and certain forecasted nondeductible expenses.

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In accordance with the provisions of ASC 740, Income Taxes , the Company is required to provide a valuation allowance against deferred income tax assets when it is "more likely than not" that some portion or all of the deferred tax assets will not be realized.

Based on management's assessment, as of March 31, 2024, the Company continues to record a full valuation allowance against non-deductible interest expense.

Based on management's assessment, as of June 30, 2024, the Company continues to record a full valuation allowance against non-deductible interest expense.

The Company will continue to evaluate the realizability of the net deferred tax asset on a quarterly basis and, as a result, the valuation allowance may change in future periods.

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The Company is authorized to issue 100,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors.

As of March 31, 2024 and December 31, 2023, the Company has not issued any shares of preferred stock.

As of June 30, 2024 and December 31, 2023, the Company has not issued any shares of preferred stock.

Share Repurchase Program

In 2022, PRTH's Board of Directors authorized a general share repurchase program under which the Company may purchase up to 2.0 million shares of its outstanding Common Stock for a total of up to $ 10.0 million.

In 2022, PRTH's Board of Directors authorized a general share repurchase program under which the Company may purchase up to 2,000,000 shares of its outstanding Common Stock for a total of up to $ 10.0 million.

Under the terms of this plan, the Company may purchase shares through open market purchases, unsolicited or solicited privately negotiated transactions, or in another manner so long as it complies with applicable rules and regulations.

There have been no shares repurchased under this plan since December 2022.

As of June 30, 2024, the Company has purchased 1,309,374 shares for $ 5.7 million under this plan.

Stock-based Compensation

Stock-based compensation expense was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

Stock options compensation expense $ 1,528 $ 1,922

Stock-based compensation expense $ 1,730 $ 1,735 $ 3,258 $ 3,657

Incentive units compensation expense 85 — 178 —

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Total $ 1,829 $ 1,746 $ 3,462 $ 3,682

Income tax benefit for stock-based compensation was immaterial for the three months ended March 31, 2024 and 2023.

Income tax benefit for stock-based compensation was immaterial for the three months ended June 30, 2024 and 2023.

No stock-based compensation has been capitalized.

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The offering period shall be for a period of three months and the first offering period began on January 10, 2022.

The 2021 Stock Purchase Plan provides eligible employees the

opportunity to purchase shares of the Company's Common Stock on a quarterly basis through payroll deductions at a price equal to 95 % of the lesser of the fair value on the first and last trading day of each offering period.

The 2021 Stock Purchase Plan provides eligible employees the opportunity to purchase shares of the Company's Common stock at 95 % of the lesser of the fair value on the first and last trading day of each offering period.

Non-voting Incentive Units

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The Company denied any wrongdoing.

The lawsuit was settled on January 30, 2024, wherein the Company agreed to unwind the exchange transaction and received previously issued shares of common stock of the Company from the CEO, COO and others in exchange of the reissuance of PHOT redeemable preferred units.

The lawsuit was settled on January 30, 2024, wherein the Company agreed to unwind the exchange transaction and received previously issued shares of common stock of the Company and promissory notes for the amount of cash paid from the CEO, COO and others in exchange of the reissuance of PHOT redeemable preferred units.

The returned shares of common stock of the Company are recorded as treasury stock at their closing market price as of the settlement date of January 30, 2024.

The reissued PHOT redeemable preferred units are recorded as redeemable NCI at their estimated fair value as of the settlement date on the Company’s Unaudited Consolidated Balance Sheets.

The redeemable preferred units were accreted to their redemption value as of March 31, 2024, through net loss available to common stockholders in the Company’s Unaudited Statements of Operations and Comprehensive Loss.

As of May 30, 2024, the Company approved redemption of PHOT redeemable preferred units for cash, common stock of the Company or a combination of both, at the sole discretion of the Company.

The redeemable preferred units were accreted to their redemption value of $ 5.9 million as of May 30, 2024, through net loss available to common stockholders in the Company’s Unaudited Statements of Operations and Comprehensive Loss.

The exchange value of the Company's common stock was established based on the 30-day volume weighted average close price adjusted for market illiquidity.

As of June 30, 2024, the PHOT redeemable preferred units held by the CEO were redeemed in cash for $ 2.1 million, the promissory notes were cancelled and other holders are expected to receive their redemption consideration at a later date.

Commitments and Contingencies

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Capital Commitments

The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $ 26.0 million as March 31, 2024 and December 31, 2023.

The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $ 0.0 million as of June 30, 2024 and December 31, 2023.

The Company is obligated to make the contributions within 10 business days of receiving notice for such contribution from the subsidiary.

As of March 31, 2024 and December 31, 2023, the Company has contributed $ 13.4 million and $ 11.8 million, respectively.

As of June 30, 2024 and December 31, 2023, the Company has contributed $ 0.0 million and $ 11.8 million, respectively.

Merchant Reserves

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March 31, 2024 11,339

Accretion of discount on contingent consideration 1,240

Payment of contingent consideration ( 1,085 )

June 30, 2024 $ 11,494

Legal Proceedings

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(“Wells Fargo”).

The Complaint alleges that Wholesale is an agent of Priority, PPS and Wells Fargo

and that it made non-consensual recordation of telephonic communications with California businesses in violation of California Invasion of Privacy Act (the “Act”).

The Complaint alleges that Wholesale is an agent of Priority, PPS and Wells Fargo and that it made non-consensual recordation of telephonic communications with California businesses in violation of California Invasion of Privacy Act (the “Act”).

T he Complaint seeks to certify a class of affected businesses and an award of $ 5,000 per violation of the Act.

As of May 9, 2024, the financial impact, if any, of the outcome of this legal proceeding is neither probable nor estimable.

As of August 8, 2024, the financial impact, if any, of the outcome of this legal proceeding is neither probable nor estimable.

Concentration of Risks

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Because the Company is not a member bank, in order to process these bankcard transactions, the Company maintains sponsorship agreements with member banks which require, among other things, that the Company abide by the by-laws and regulations of the card associations.

As of March 31, 2024 , the Company's customer account balances of $ 703 million are maintained in FDIC insured eligible accounts with certain FIs (refer to Note 4.

As of June 30, 2024, the Company's customer account balances of $ 746 million are maintained in FDIC insured eligible accounts with certain FIs (refer to Note 4.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations ) A majority of the Company's cash and restricted cash is held in certain FIs, substantially all of which is in excess of FDIC limits.

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Fair Value Measurements

Contingent consideration related to the Company's business combinations is estimated based on the present value of a weighted payout probability at the measurement date, which falls within Level 3 on the fair value hierarchy.

The Company's contingent consideration derived from business combinations 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 judgement.

The Company uses valuation techniques including discounted cash flow analysis based on cash flow projections and 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.

The current portion of contingent consideration is included in accounts payable and accrued expenses on the Company's Unaudited Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

Liabilities measured at fair value on a recurring basis consisted of the following:

(in thousands) Fair Value Hierarchy March 31, 2024 December 31, 2023

(in thousands) Fair Value Hierarchy June 30, 2024 December 31, 2023

Contingent consideration, current portion Level 3 $ 5,026 $ 5,951

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Total contingent consideration $ 11,494 $ 13,438

During the three months ended March 31, 2024, there were no transfers into, out of, or between levels of the fair value hierarchy.

During the three and six months ended June 30, 2024, there were no transfers into, out of, or between levels of the fair value hierarchy.

Fair Value Disclosures

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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 $ 6.5 million and $ 5.2 million at March 31, 2024 and December 31, 2023, respectively.

The carrying value of the Company's notes receivable, net approximates fair value and was approximately $ 7.2 million and $ 5.2 million at June 30, 2024 and December 31, 2023, respectively.

On the fair value hierarchy, Level 3 inputs are used to estimate the fair value of these notes receivable.

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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 $ 651.9 million at March 31, 2024 and December 31, 2023 and was 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.

The fair value of the term facility was estimated to be $ 835.0 million and $ 651.9 million at June 30, 2024 and December 31, 2023, respectively, and was 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.

The carrying values of the other long-term debt obligations approximate fair value due to mechanisms in the credit agreements that adjust the applicable interest rates and the lack of a market for these debt obligations.

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• SMB Payments – Provides full-service acquiring and payment-enabled solutions for B2C transactions, leveraging Priority's proprietary software platform, distributed through ISO, direct sales and vertically focused ISV channels.

• B2B Payments – provides market-leading AP automation solutions to corporations, software partners and industry leading FIs (including Citibank and Mastercard) in addition to working improving cash flow by providing instant access to working capital.

• B2B Payments – provides market-leading AP automation solutions to corporations, software partners and industry leading FIs (including Citibank and Mastercard) in addition to improving cash flow by providing instant access to working capital.

• Enterprise Payments – Provides embedded finance and treasury solutions to enterprise customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments.

The Company does not have dedicated assets assigned to any particular reportable segment and such information is not available and continues to be aggregated.

Corporate includes costs of corporate functions and shared services not allocated to our reportable segments.

In January 2024, the Company changed the grouping of certain business activity to conform to the way we internally manage and monitor the business.

As a result, certain immaterial activity was reassigned from the SMB Payments segment to the Enterprise Payments segment effective January 1, 2024.

Impact on prior year segment results were determined to be immaterial and have not been reclassified to reflect this change.

Information on reportable segments and reconciliations to consolidated revenues, consolidated depreciation and amortization, and consolidated operating income are as follows:

(in thousands) Three Months Ended March 31,

SMB Payments $ 143,751 $ 154,933

B2B Payments 21,115 2,786

Enterprise Payments 40,853 27,309

Consolidated revenues $ 205,719 $ 185,028

Depreciation and amortization:

SMB Payments $ 8,802 $ 10,846

B2B Payments 1,640 125

Enterprise Payments 4,356 6,690

Corporate 455 387

Consolidated depreciation and amortization $ 15,253 $ 18,048

Operating income (loss):

SMB Payments $ 12,383 $ 12,011

B2B Payments ( 793 ) ( 849 )

Enterprise Payments 25,547 12,663

Corporate ( 9,114 ) ( 6,977 )

Consolidated operating income $ 28,023 $ 16,848

A reconciliation of total operating income of reportable segments to the Company's net (loss) income is provided in the following table:

(in thousands) Three Months Ended March 31,

Total operating income of reportable segments $ 37,137 $ 23,825

Corporate ( 9,114 ) ( 6,977 )

Due to the recent acquisitions, growth, implementation of a shared services model and management of a single unified commerce engine across our payments infrastructure, the costs of operating overhead and shared services becomes less identifiable at the segment level.

Therefore, the process of review of the CODM was updated during the quarter.

The CODM's review of segment performance and allocation of resources are based on adjusted earnings before interest, income tax and depreciation and amortization expenses ("EBITDA").

Adjusted EBITDA at each segment level includes revenues of the segment, less costs of revenue (excluding depreciation and amortization) and operating expenses that are directly related to those revenues.

Operating overhead and shared costs are managed centrally and included in the corporate segment.

All comparative periods have been adjusted to reflect this update.

Information on reportable segments and reconciliations to income (loss) before income taxes are as follows:

Three Months Ended June 30, 2024

(in thousands) SMB Payments B2B

Payments Enterprise Payments Corporate Eliminations Total Consolidated

Revenues $ 155,101 $ 21,881 $ 43,670 $ — $ ( 785 ) $ 219,867

Adjusted EBITDA $ 28,597 $ 1,530 $ 37,244 $ ( 15,820 ) $ — $ 51,551

Three Months Ended June 30, 2023

(in thousands) SMB Payments B2B

Payments Enterprise Payments Corporate Eliminations Total Consolidated

Revenues $ 147,948 $ 2,974 $ 31,438 $ — $ ( 70 ) $ 182,290

Adjusted EBITDA $ 28,434 $ 608 $ 25,728 $ ( 13,677 ) $ — $ 41,093

Six Months Ended June 30, 2024

(in thousands) SMB Payments B2B

Payments Enterprise Payments Corporate Eliminations Total Consolidated

Revenues $ 299,105 $ 43,225 $ 84,660 $ — $ ( 1,404 ) $ 425,586

Adjusted EBITDA $ 53,620 $ 3,276 $ 71,971 $ ( 30,976 ) $ — $ 97,891

Six Months Ended June 30, 2023

(in thousands) SMB Payments B2B

Payments Enterprise Payments Corporate Eliminations Total Consolidated

Revenues $ 302,881 $ 5,760 $ 58,744 $ — $ ( 67 ) $ 367,318

Adjusted EBITDA $ 56,836 $ 518 $ 48,096 $ ( 26,717 ) $ — $ 78,733

Three Months Ended

June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

Reconciliation of Segment measure of profit or loss to income (loss) before income taxes

Total consolidated Adjusted EBITDA $ 51,551 $ 41,093 $ 97,891 $ 78,733

Interest expense ( 21,710 ) ( 17,765 ) ( 42,590 ) ( 35,464 )

Other income, net 632 212

Income tax (expense) benefit ( 2,582 ) 133

Net income (loss) $ 5,193 $ ( 506 )

Depreciation and amortization ( 15,244 ) ( 17,980 ) ( 30,497 ) ( 36,028 )

Debt modification and extinguishment expenses ( 8,623 ) — ( 8,623 ) —

Selling, general and administrative (non-recurring) ( 636 ) ( 1,859 ) ( 1,435 ) ( 2,296 )

Non-cash stock based compensation ( 1,829 ) ( 1,746 ) ( 3,462 ) ( 3,682 )

Other non-recurring loss, net — — — ( 159 )

Income before income taxes $ 3,509 $ 1,743 $ 11,284 $ 1,104

Loss per Common Share

The following tables set forth the computation of the Company's basic and diluted loss per common share:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands except per share amounts) 2024 2023 2024 2023

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Redeemable Senior Preferred Stock and Warrants ).

For the three months ended March 31, 2024 and 2023, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

For the three and six months ended June 30, 2024 and 2023, all potentially dilutive securities were anti-dilutive, so diluted net loss per share was equivalent to basic net loss per share.

Potentially anti-dilutive securities that were excluded from the Company's loss per common share are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(in thousands) 2024 2023 2024 2023

Outstanding warrants on Common Stock (1)

— 3,557 — 3,557

Outstanding options and warrants issued to adviser (2)

Restricted stock awards (3)

889 1,159 946 1,018

Outstanding stock option awards (3)

866 916 865 919

Total 1,755 6,232 1,811 6,094

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements