What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 307 added, 184 removed, 659 unchanged (43% of the section changed)

Financial Statements

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets:

29 unchanged sentences

100,000,000 shares authorized;

0 issued or outstanding at June 30, 2025 and December 31, 2024

0 issued or outstanding at September 30, 2025 and December 31, 2024

Common Stock, $ 0.001 par value;

1,000,000,000 shares authorized;

84,524,131 and 81,866,711 shares issued at June 30, 2025 and December 31, 2024, respectively;

and 79,897,665 and 77,479,908 shares outstanding at June 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 4,626,466 and 4,386,803 shares at June 30, 2025 and December 31, 2024, respectively

86,531,692 and 81,866,711 shares issued at September 30, 2025 and December 31, 2024, respectively;

and 81,821,303 and 77,479,908 shares outstanding at September 30, 2025 and December 31, 2024, respectively

Treasury stock at cost, 4,710,389 and 4,386,803 shares at September 30, 2025 and December 31, 2024, respectively

( 22,613 ) ( 19,607 )

9 unchanged sentences

(in thousands, except per share amounts)

Three Months Ended June 30, Six Months Ended

Three Months Ended September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

13 unchanged sentences

Income before income taxes 7,387 15,507 33,207 26,791

Income tax expense 4,423 2,515 6,673 5,097

Income tax (benefit) expense ( 20,201 ) 4,899 ( 13,528 ) 9,996

Net income 27,588 10,608 46,735 16,795

20 unchanged sentences

Equity-classified stock-based compensation — — — — 1,499 — — 1,499 — 1,499

Vesting of stock-based compensation and ESPP compensation 534 1 — — 62 — — 63 — 63

Vesting of stock awards and ESPP purchases 534 1 — — 62 — — 63 — 63

Shares withheld for taxes ( 122 ) — 122 ( 1,470 ) — — — ( 1,470 ) — ( 1,470 )

6 unchanged sentences

Equity-classified stock-based compensation — — — — 1,625 — — 1,625 — 1,625

Vesting of stock-based compensation and ESPP compensation 270 — — — 111 — — 111 — 111

Vesting of stock awards and ESPP purchases 270 — — — 111 — — 111 — 111

Shares withheld for taxes ( 118 ) — 118 ( 844 ) — — — ( 844 ) — ( 844 )

4 unchanged sentences

June 30, 2025 79,898 $ 80 4,626 $ ( 21,921 ) $ 3,629 $ 84 $ ( 127,987 ) $ ( 146,115 ) $ 1,981 $ ( 144,134 )

Equity-classified stock-based compensation — — — — 1,227 — — 1,227 — 1,227

Vesting of stock awards and ESPP purchases 231 — — — 103 — — 103 — 103

Shares withheld for taxes ( 84 ) — 84 ( 692 ) — — — ( 692 ) — ( 692 )

Shares issued as part of Boom asset purchase 1,766 2 — — 13,459 — — 13,461 — 13,461

Exercise of stock options 10 — — — 79 — — 79 — 79

Plastiq NCI repurchase — — — — ( 5,670 ) — — ( 5,670 ) ( 330 ) ( 6,000 )

Issuance of profit interests in subsidiaries — — — — — — — — 133 133

Foreign currency translation adjustment — — — — — ( 279 ) — ( 279 ) — ( 279 )

Net income — — — — — — 27,588 27,588 — 27,588

September 30, 2025 81,821 $ 82 4,710 $ ( 22,613 ) $ 12,827 $ ( 195 ) $ ( 100,399 ) $ ( 110,298 ) $ 1,784 $ ( 108,514 )

Priority Technology Holdings, Inc.

6 unchanged sentences

Equity-classified stock-based compensation — — — — 1,540 — — 1,540 — 1,540

Vesting of stock-based compensation 429 — — — 49 — — 49 — 49

Vesting of stock awards and ESPP purchases 429 — — — 49 — — 49 — 49

Shares withheld for taxes ( 123 ) — 123 ( 421 ) — — — ( 421 ) — ( 421 )

8 unchanged sentences

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

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

Vesting of stock awards and ESPP purchases 190 — — — 60 — — 60 — 60

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

9 unchanged sentences

Priority Technology Holdings, Inc.

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

(in thousands)

Stock Treasury

Stock APIC AOCI Accumulated Deficit Deficit Attributable to Stockholders NCIs Total

Shares $ Shares $

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

Equity-classified stock-based compensation — — — — 1,358 — — 1,358 — 1,358

Vesting of stock awards and ESPP purchases 419 — — — 56 — — 56 — 56

Shares withheld for taxes ( 108 ) — 108 ( 605 ) — — — ( 605 ) — ( 605 )

PHOT share issuance 813 1 — — — — — 1 — 1

Dividends on redeemable senior preferred stock — — — — ( 4,786 ) — — ( 4,786 ) — ( 4,786 )

Accretion of redeemable senior preferred stock — — — — ( 335 ) — — ( 335 ) — ( 335 )

Issuance of profit interests/common equity in subsidiaries — — — — — — — — 58 58

Foreign currency translation adjustment — — — — — ( 28 ) — ( 28 ) — ( 28 )

Reclassification of negative additional paid-in capital — — — — 3,707 — ( 3,707 ) — — —

Net loss — — — — — — 10,608 10,608 — 10,608

September 30, 2024 77,092 77 4,348 ( 19,278 ) — ( 66 ) ( 146,571 ) ( 165,838 ) 1,890 ( 163,948 )

Priority Technology Holdings, Inc .

Unaudited Consolidated Statements of Cash Flows

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

2 unchanged sentences

Depreciation and amortization of assets 42,992 44,230

Stock-based, ESPP and incentive units compensation 4,792 3,462

Stock-based compensation 7,119 4,878

Amortization of debt issuance costs and discounts 1,329 2,250

2 unchanged sentences

Change in deferred consideration 2,449 3,280

Bargain purchase gain ( 3,506 ) —

Other non-cash items, net ( 130 ) ( 37 )

10 unchanged sentences

Cash flows from investing activities:

Acquisition of business, net of cash acquired ( 4,452 ) —

Acquisition of businesses, net of cash acquired ( 77,369 ) —

Additions to property, equipment and software ( 18,952 ) ( 17,044 )

14 unchanged sentences

Payment of deferred/contingent consideration related to business combination ( 19,756 ) ( 4,996 )

NCI repurchase ( 6,000 ) —

Net cash provided by financing activities 288,634 84,716

Net change in cash and cash equivalents and restricted cash:

Net increase in cash and cash equivalents, and restricted cash 184,026 39,558

Cash and cash equivalents and restricted cash at beginning of period 993,864 796,223

Cash and cash equivalents and restricted cash at end of period $ 1,177,890 $ 835,781

Priority Technology Holdings, Inc .

1 unchanged sentence

(in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Net increase in cash and cash equivalents, and restricted cash 199,897 121,834

Cash and cash equivalents and restricted cash at beginning of period 993,864 796,223

Cash and cash equivalents and restricted cash at end of period $ 1,193,761 $ 918,057

Reconciliation of cash and cash equivalents, and restricted cash:

8 unchanged sentences

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

Issuance of NCI $ — $ 178

Measurement period adjustment to purchase price $ — $ 12

Cash portion of dividend payable for redeemable senior preferred stock (1)

Common stock issued for Boom Commerce asset purchase $ 13,461 $ —

Foreign currency adjustment to goodwill and intangibles $ ( 321 ) $ —

Exercise of stock options $ 11 $ —

Deferred/contingent consideration $ 8,824 $ —

See Notes to Unaudited Consolidated Statements

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and its consolidated subsidiaries are referred to herein collectively as "Priority," the "Company," "we," "our" or "us," unless the context requires otherwise.

Priority is a payments and banking fintech that streamlines collecting, storing, lending and sending money through its innovative commerce engine to unlock revenue and generate operational success for businesses.

Our mission is to provide a personalized financial tool set to accelerate cashflow and optimize working capital for our customers by providing merchant services, payables and banking and treasury solutions.

Priority is the payments and banking solution that enables businesses to collect, store, lend and send funds through a unified commerce engine.

Our platform combines payables, merchant solutions, and treasury solutions so leaders can streamline financial operations efficiently — and our innovative industry experts help businesses navigate and build momentum on the path to growth.

With the Priority Commerce Engine, leaders can accelerate cash flow, optimize working capital, reduce unnecessary costs, and unlock new revenue opportunities.

The Company operates on a calendar year ending each December 31 and reports quarterly results on four calendar quarters ending on March 31, June 30, September 30 and December 31 of each year.

6 unchanged sentences

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

As of June 30, 2025, there was no income attributable to NCI in accordance with the applicable operating agreements.

As of September 30, 2025, there was no income 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.

3 unchanged sentences

The effect of these reclassifications on the Company’s previously reported consolidated financial statements was not material.

Segment Renaming

The Company renamed it's segments to align with the services offered.

SMB Payments was renamed to Merchant Solutions, B2B Payments was renamed to Payables and Enterprise Payments was renamed to Treasury Solutions.

There was no other change to the segments, see further information at Note 15.

Segment Information .

Use of Estimates

5 unchanged sentences

local currency of Republic of India).

The functional currency of the Canadian subsidiaries of the Company is the Canadian Dollar.

The functional currency of the Canadian subsidiaries of the Company is

the Canadian Dollar.

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

6 unchanged sentences

Allowance for Expected Losses

As of June 30, 2025 and December 31, 2024, there was no allowance for expected loss on notes receivable.

Notes Receivable .

The allowance for expected loss from accounts receivable was $ 5.2 million and $ 3.0 million at June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the allowance for expected losses on settlement assets was $ 8.6 million and $ 7.9 million, respectively.

Settlement Assets and Obligations .

A reconciliation of the beginning and ending amount of allowance for expected losses is as follows:

3 unchanged sentences

Provision ( 1,841 ) ( 7,937 )

Balance at March 31, 2025 ( 3,368 ) ( 9,925 )

Charge-offs (recoveries), net 127 2,627

Provision ( 469 ) ( 2,789 )

Reclassification ( 1,509 ) 1,509

Balance at June 30, 2025 $ ( 5,219 ) $ ( 8,578 )

Balance at September 30, 2025 $ ( 5,637 ) $ ( 9,395 )

The Company has elected not to measure expected losses for accrued interest on notes receivable but instead recognize losses for accrued interest within the period losses are incurred.

13 unchanged sentences

The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods beginning after December 15, 2027.

Early adoption is permitted.

adoption is permitted.

The Company will adopt this guidance for the year ended December 31, 2026.

This guidance is expected to only impact the disclosures with no impact on the results of operations, financial position or cash flows.

On January 21, 2025, PRTH’s wholly owned subsidiary, Priority Canada Acquisition Company, Inc.

Accounting for Internal-Use Software ASU 2025-06

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) ("ASU 2025-06") for targeted improvements to the accounting for internal-use software.

The amendments updates guidance to consider different methods of software development, updating the requirements for capitalization of software costs.

This ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact this ASU will have on its consolidated financial statements.

On January 21, 2025, Priority’s wholly owned subsidiary, Priority Canada Acquisition Company, Inc.

(the "acquiring entity"), acquired 100 % of the equity interest in Payslate Inc.

1 unchanged sentence

The Letus business is engaged in processing of rent payments for property management companies in the United States and Canada.

The acquisition will provide synergy opportunities to the Company's Enterprise Payments rent payment business and expand Priority's services in Canada.

The acquisition will provide synergy opportunities to the Company's Treasury Solutions rent payment business and expand Priority's services in Canada.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations .

1 unchanged sentence

The deferred consideration of $ 4.3 million was recorded at the fair value on the acquisition date.

The deferred consideration will be paid monthly equal to 40 % of gross profit under the agreement.

The deferred consideration will be paid monthly equal to 40 % of gross profit under the agreement and total payments will not exceed $ 6.5 million.

Any amount remaining but unpaid will be paid in full by January 21, 2030.

The Company will accrete interest expense on the deferred consideration throughout the period, which was $ 0.2 million for three and six months ended June 30, 2025.

As of June 30, 2025, total deferred consideration was $ 4.5 million, $ 0.6 million included in accounts payable and accrued expenses and $ 3.9 million included in noncurrent liabilities on the Unaudited Consolidated Balance Sheets.

Results for the Letus business since the acquisition are included within the Enterprise Payments segment, which includes $ 0.1 million and $ 0.4 million in revenue and a net loss of $ 0.2 million and $ 0.2 million for the three and six months ended June 30, 2025, respectively.

The Company will accrete interest expense on the deferred consideration throughout the period, which was $ 0.1 million and $ 0.3 million for the three and nine months ended September 30, 2025, respectively.

As of September 30, 2025, total deferred consideration was $ 4.5 million, $ 0.7 million included in accounts payable and accrued expenses and $ 3.8 million included in noncurrent liabilities on the Unaudited Consolidated Balance Sheets.

Results for the Letus business since the acquisition are included within the Treasury Solutions segment, which includes $ 0.2 million and $ 0.6 million in revenue and a net loss of $ 0.2 million and $ 0.4 million for the three and nine months ended September 30, 2025, respectively.

The preliminary purchase price allocation is set forth in the table below:

23 unchanged sentences

The Company incurred $ 0.5 million in acquisition related costs, which primarily consisted of consulting, legal and accounting and valuation expenses.

These expenses were recorded in selling, general and administrative expenses in the Company's Consolidated Statements of Operations and Comprehensive Loss.

These expenses were recorded in selling, general and administrative expenses in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.

Based on the purchase consideration and pre-acquisition operating results, this business combination did not meet the materiality requirements for pro forma disclosures.

On August 26, 2025, Priority's wholly owned subsidiary, Priority Tech Ventures, LLC (the "acquiring entity"), through it's merger subsidiary, acquired total outstanding shares including all voting interests in Sila Inc.

("the "Sila business" or "Sila").

Sila is a payment platform that enables ACH transfers, instant settlement, digital wallets and built-in compliance through a simple application programming interface.

Technology acquired in this transaction will supplement Priority's current treasury solutions.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC 805 Business Combinations.

The total purchase price was $ 7.9 million, consisting of $ 3.6 million in cash consideration funded by the Company's cash flows, and contingent consideration of $ 4.3 million for contractual earn-outs and additional contingent consideration of $ 0.1 million.

Earn-outs will be paid as a percentage of gross profit when certain thresholds are met and additional contingent considerations will be paid based on utilization of the seller's carryforward tax losses.

The contingent consideration for the contractual earn-outs was recorded at the fair value of $ 4.3 million on the acquisition date.

The contingent consideration will be paid quarterly subject to terms and conditions noted within the agreement over a period of seven years and total payments will not exceed $ 17.0 million.

As of September 30, 2025, total contingent consideration of

$ 4.4 million is recorded in noncurrent liabilities on the Unaudited Consolidated Balance Sheets.

Results for the Sila business since the acquisition are included within the Treasury Solutions segment, which includes $ 0.1 million in revenue and a net loss of $ 0.3 million for the three and nine months ended September 30, 2025.

The preliminary purchase price allocation is set forth in the table below:

(in thousands)

Consideration:

Contingent consideration (2)

cash acquired ( 100 )

Total purchase consideration, net of cash acquired $ 7,893

Recognized amounts of assets acquired and liabilities assumed:

Accounts receivable $ 84

Prepaid expenses 309

Other noncurrent assets 9,641

Intangible assets:

Trademarks 824

Technology 991

Accounts payable and accrued expenses ( 404 )

Customer deposits ( 46 )

Fair value of net assets acquired $ 11,399

Estimated bargain purchase gain $ 3,506

(1) Cash at closing net of adjustments from estimated net working capital and closing cash.

(2) The fair value of the contingent consideration was determined utilizing a Monte Carlo simulation.

The payments were calculated based on the path for the simulated metrics and the contractual terms of the contingent consideration payments and were discounted to present value at a rate reflecting a risk associated with the payoffs.

The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation.The contingent consideration represents the fair value of the contractual earn-outs and the share of net operating loss carryforwards owed to the seller in the future.

The fair value of acquired assets and assumed liabilities exceeded the consideration paid, resulting in a bargain purchase gain.

The Company reviewed its acquisition accounting methods, confirmed all assets and liabilities were properly identified, and ensured measurements reflected all consideration as of the closing date.

The gain was primarily due to recognizing a deferred tax asset recorded in accordance with ASC 740 related to Sila's historical net operating losses.

The bargain purchase gain is recorded in other income, net, in the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2025.

The Company incurred $ 0.2 million in acquisition legal expenses for the acquisition, which were recorded in selling, general and administrative expenses in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss.

Based on the purchase consideration and pre-acquisition operating results, this business combination did not meet the materiality requirements for pro forma disclosures.

Other Acquisitions

Boom Commerce

On August 18, 2025, Priority Boom, LLC, a subsidiary of Priority, completed its acquisition of certain residual portfolio rights for a purchase price of $ 73.5 million in cash, $ 13.5 million in Common shares of Priority and earn-out payments not to exceed $ 17.0 million based on meeting certain thresholds over a three-year period from the date of acquisition.

The transaction did not meet the definition of a business;

therefore, it was accounted for as an asset purchase under which the cost of the acquisition was allocated to the acquired assets based on relative fair values.

As an asset purchase, additional purchase price (in the form of earn-outs) is accounted for when payment to the seller becomes payable and is added to the carrying value of the asset.

Disaggregation of Revenues

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

9 unchanged sentences

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

(2) Approximately $ 14.1 million and $ 26.7 million of interest income on customer funds for the three and six months ended June 30, 2025, respectively, and $ 13.1 million and $ 25.0 million for the three and six months ended June 30, 2024, respectively, is included in outsourced services and other services revenue in the table above.

Approximately $ 1.0 million and $ 2.1 million of interest income on corporate funds for the three and six months ended June 30, 2025 and $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2024, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) and not reflected in the table above.

(2) Approximately $ 15.8 million and $ 42.5 million of interest income on customer funds for the three and nine months ended September 30, 2025, respectively, and $ 13.8 million and $ 38.8 million for the three and nine months ended September 30, 2024, respectively, is included in outsourced services and other services revenue in the table above.

Approximately $ 1.1 million and $ 3.2 million of interest income on corporate funds for the three and nine months ended September 30, 2025 and $ 0.6 million and $ 1.8 million for the three and nine months ended September 30, 2024, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) and not reflected in the table above.

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

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

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

SMB Payments $ 158,825 $ — $ 1,202 $ 3,203 $ 163,230

B2B Payments 21,488 — 3,545 — 25,033

Enterprise Payments 968 39,273 12,417 — 52,658

Merchant Solutions $ 157,197 $ — $ 1,035 $ 3,642 $ 161,874

Payables 21,380 — 3,782 — 25,162

Treasury Solutions 908 40,991 13,785 — 55,684

Eliminations ( 967 ) — ( 314 ) — ( 1,281 )

Total revenues $ 178,518 $ 40,991 $ 18,288 $ 3,642 $ 241,439

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

SMB Payments $ 306,307 $ — $ 2,310 $ 6,303 $ 314,920

B2B Payments 41,257 — 7,694 — 48,951

Enterprise Payments 1,575 76,722 24,449 — 102,746

Merchant Solutions $ 463,503 $ — $ 3,346 $ 9,945 $ 476,794

Payables 62,637 — 11,476 — 74,113

Treasury Solutions 2,484 117,713 38,233 — 158,430

Eliminations ( 2,544 ) — ( 912 ) — ( 3,456 )

Total revenues $ 526,080 $ 117,713 $ 52,143 $ 9,945 $ 705,881

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

SMB Payments $ 150,696 $ — $ 1,380 $ 3,025 $ 155,101

B2B Payments 18,682 — 3,199 — 21,881

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

Merchant Solutions $ 153,061 $ — $ 2,405 $ 3,304 $ 158,770

Payables 18,924 — 3,219 — 22,143

Treasury Solutions 521 33,868 12,710 — 47,099

Eliminations ( 692 ) — ( 271 ) — ( 963 )

Total revenues $ 171,814 $ 33,868 $ 18,063 $ 3,304 $ 227,049

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

SMB Payments $ 290,496 $ — $ 2,621 $ 5,988 $ 299,105

B2B Payments 36,971 — 6,254 — 43,225

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

Merchant Solutions $ 443,557 $ — $ 5,026 $ 9,292 $ 457,875

Payables 55,895 — 9,473 — 65,368

Treasury Solutions 1,325 94,352 36,081 — 131,758

Eliminations ( 1,770 ) — ( 596 ) — ( 2,366 )

Total revenues $ 499,007 $ 94,352 $ 49,984 $ 9,292 $ 652,635

Deferred revenues were not material for the three and six months ended June 30, 2025 and 2024.

Deferred revenues were not material for the three and nine months ended September 30, 2025 and 2024.

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 $ 0.4 million and $ 0.2 million as of June 30, 2025 and December 31, 2024, respectively.

Contract liabilities were $ 0.3 million and $ 0.2 million as of September 30, 2025 and December 31, 2024, respectively.

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

Net contract assets were $ 0.3 million for the period ended June 30, 2025 and were not material for the period ended December 31, 2024.

Impairment losses recognized on contract assets arising from the Company's contracts with customers were not material for the three and six months ended June 30, 2025 and 2024.

Net contract assets were $ 0.3 million for the period ended September 30, 2025 and were not material for the period ended December 31, 2024.

Impairment losses recognized on contract assets arising from the Company's contracts with customers were not material for the three and nine months ended September 30, 2025 and 2024.

Settlement Assets and Obligations

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Card settlements due from merchants, net

The merchant acquiring services of the Company include settlement of funds for sales and credits between card issuers, card networks and merchants.

The merchant solution services of the Company include settlement of funds for sales and credits between card issuers, card networks and merchants.

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 merchants are 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.

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Exception items that the Company has deemed uncollectible are recorded as merchant losses, a component of cost of revenue in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss).

Expenses for merchant losses net of recoveries for the three and six months ended June 30, 2025 were $ 0.2 million and $ 1.9 million, respectively.

Recoveries for merchant losses, net of expense for the three months ended June 30, 2024, were $ 1.7 million.

Expenses for merchant losses net of recoveries for the six months ended June 30, 2024 were $ 0.9 million.

Expenses for merchant losses net of recoveries for the three and nine months ended September 30, 2025 were $ 0.9 million and $ 2.8 million, respectively.

Expenses for merchant losses, net of recoveries for the three and nine months ended September 30, 2024, were $ 0.7 million and $ 1.6 million respectively.

Card settlements due from networks and Dues to Customers’ Payees

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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.

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

• Priority processes payments to the customers’ payees wherein customers funds are received either in 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 customers’ payees.

2 unchanged sentences

Amounts due to customers’ payees that are held in company-owned bank accounts are included in restricted cash in the Company's Unaudited Consolidated Balance Sheets and related obligations are presented as due to customers’ payees.

MTL Customer cash and cash equivalents (restricted in nature) and MTL Customer account obligations

The Company provides banking and treasury services to its customers through its money transmission licenses in 46 states and 3 territories of the United States and through agency relationships with banks in the remaining states.

MTL Customer cash and cash equivalents (restricted in nature), short-term investments and MTL Customer account obligations

The Company provides treasury solutions to its customers through its money transmission licenses in 46 states and 3 territories of the United States and through agency relationships with banks in the remaining states.

These services include the acceptance and disbursement of funds.

While waiting for disbursement, these funds are held in bank accounts maintained by the Company on the behalf of its customers.

While waiting for disbursement, these funds are held in bank accounts maintained by the Company on behalf of its customers.

Per the money transmission regulations, the Company is allowed to invest available balances in these accounts in certain permitted investments, and returns on such investments contribute to the Company's net cash inflows.

1 unchanged sentence

Considering these balances are payable on demand and are related to settlement activities, they are presented as settlement assets (as part of the current assets) and the related obligations as settlement obligations (as part of the current liabilities) in the Company's Unaudited Consolidated Balance Sheets.

Further, the nature of these assets is cash and cash equivalent, but they are restricted in nature and therefore these balances are presented as restricted cash on the Company's Unaudited Consolidated Statement of Cash Flows.

The nature of these MTL Customer cash and cash equivalent are restricted in nature and therefore these balances are presented as restricted cash on the Company's Unaudited Consolidated Statement of Cash Flows.

The MTL Short-term investments are included within acquisitions of assets and other investing activities on the Company's Unaudited Consolidated Statement of Cash Flows.

The Company's consolidated settlement assets and obligations were as follows:

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Settlement Assets, net of estimated losses (1) :

6 unchanged sentences

1,123,799 924,174

MTL Short-term investments 46,667 —

Total settlement assets $ 1,187,417 $ 940,798

6 unchanged sentences

Total settlement obligations $ 1,188,071 $ 940,213

(1) Allowance for estimated losses were $ 8.6 million and $ 7.9 million as of June 30, 2025 and December 31, 2024, respectively.

(2) Excludes merchant funds held at member banks of $ 122.9 million and $ 106.2 million on June 30, 2025 and December 31, 2024, respectively.

(1) Allowance for estimated losses were $ 9.4 million and $ 7.9 million as of September 30, 2025 and December 31, 2024, respectively.

(2) Excludes merchant funds held at member banks of $ 109.7 million and $ 106.2 million on September 30, 2025 and December 31, 2024, respectively.

(3) Excludes funds held under agency arrangement with member banks (in states where the Company does not have a money transmitter license), balances remain under the control of the member banks (therefore not the assets or obligation of the Company).

Agency owned accounts held $ 58.4 million and $ 22.6 million at June 30, 2025 and December 31, 2024, respectively.

(4) Includes $ 11.3 million and $ 12.3 million as of June 30, 2025 and December 31, 2024, respectively, of card settlements due from networks and the remainder is included in restricted cash on our Unaudited Consolidated Balance Sheets.

Agency owned accounts held $ 57.0 million and $ 22.6 million at September 30, 2025 and December 31, 2024, respectively.

(4) Includes $ 15.3 million and $ 12.3 million as of September 30, 2025 and December 31, 2024, respectively, of card settlements due from networks and the remainder is included in restricted cash on our Unaudited Consolidated Balance Sheets.

(5) Excludes amounts due to customer payees that are held in bank-owned FBO accounts which 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 $ 70.6 million and $ 64.8 million at June 30, 2025 and December 31, 2024, respectively.

Bank-owned FBO accounts held funds of $ 198.2 million and $ 64.8 million at September 30, 2025 and December 31, 2024, respectively.

Notes Receivable

The Company had notes receivable of $ 10.0 million and $ 8.6 million as of June 30, 2025 and December 31, 2024, 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 16.0 % and 16.9 % as of June 30, 2025 and December 31, 2024, respectively.

The Company had notes receivable of $ 13.6 million and $ 8.6 million as of September 30, 2025 and December 31, 2024, 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 13.8 % and 16.9 % as of September 30, 2025 and December 31, 2024, respectively.

The notes are receivables from ISOs, which are made with a term of 1 - 5 years.

Under the terms of the agreements, the Company will hold back residual payments due to the ISOs and apply such residuals against future payment due to the Company.

The following table provides a reconciliation for activity within the notes receivable as of June 30, 2025 :

As of September 30, 2025 and December 31, 2024, there were no allowance for expected losses on notes receivable.

The following table provides a reconciliation for activity within the notes receivable as of September 30, 2025:

(in thousands)

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Balance at June 30, 2025 $ 9,987

As of June 30, 2025, the principal payments for the Company's notes receivable are due as follows:

Principal payments ( 1,925 )

Advances during the period 5,555

Balance at September 30, 2025 $ 13,617

As of September 30, 2025, the principal payments for the Company's notes receivable are due as follows:

(in thousands)

Twelve months ending June 30,

Twelve months ending September 30,

After 2029 6,134

Total $ 13,617

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

(in thousands) June 30, 2025 December 31, 2024

(in thousands) September 30, 2025 December 31, 2024

Computer software $ 120,559 $ 104,683

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Property, equipment and software, net $ 59,306 $ 52,477

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

2 unchanged sentences

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

Certain fully depreciated assets were removed from service during the three and six months ended June 30, 2025 and 2024.

Certain fully depreciated assets were removed from service during the three and nine months ended September 30, 2025 and 2024.

Goodwill and Other Intangible Assets

The Company's goodwill relates to the following segments:

(in thousands) June 30, 2025 December 31, 2024

SMB Payments $ 124,139 $ 124,139

Enterprise Payments 251,118 244,712

B2B Payments 7,240 7,240

(in thousands) September 30, 2025 December 31, 2024

Merchant Solutions $ 124,139 $ 124,139

Treasury Solutions 251,009 244,712

Payables 7,240 7,240

Total $ 382,388 $ 376,091

2 unchanged sentences

Balance at December 31, 2024 $ 376,091

Letus business acquisition 6,070

Letus business combination 6,070

Foreign currency translation adjustment 227

Balance at June 30, 2025

As of June 30, 2025, the Company is not aware of any triggering events for impairment that have occurred since the last annual impairment test.

Balance at September 30, 2025

As of September 30, 2025, 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:

June 30, 2025 Weighted-average

September 30, 2025 Weighted-average

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

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(1) These assets have an indefinite useful life.

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

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$ 10,936 $ 10,210 $ 30,869 $ 34,108

(1) Included in amortization expense is $ 0.6 million and $ 1.2 million for the three and six months ended June 30, 2025, respectively, and $ 0.4 million and $ 0.8 million for the three and six months ended June 30, 2024, respectively, related to the amortization of certain contract acquisition costs.

As of June 30, 2025, there were no impairment indicators present.

(1) Included in amortization expense is $ 0.6 million and $ 1.8 million for the three and nine months ended September 30, 2025, respectively, and $ 0.4 million and $ 1.2 million for the three and nine months ended September 30, 2024, respectively, related to the amortization of certain contract acquisition costs.

As of September 30, 2025, there were no impairment indicators present.

Debt Obligations

Outstanding debt obligations consisted of the following:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

2024 Credit Agreement

Term facility - matures May 16, 2031, interest rate of 9.08 % and 9.11 % at June 30, 2025 and December 31, 2024, respectively

Term facility - matures July 31, 2032, interest rate of 7.91 % and 9.11 % at September 30, 2025 and December 31, 2024, respectively

$ 1,000,000 $ 945,537

Revolving credit facility - $ 70.0 million line matures May 16, 2029, interest rate of 8.58 % and 8.61 % at June 30, 2025 and December 31, 2024, respectively

Revolving credit facility - $ 100.0 million line matures July 31, 2030, interest rate of 7.66 % and 8.61 % at September 30, 2025 and December 31, 2024, respectively

Residual Finance Credit Facility

Term facility - matures August 18, 2031, interest rate of 10.39 % at September 30, 2025

Total debt obligations 1,023,909 945,537

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Long-term debt, net $ 997,549 $ 920,888

Second Amendment to the 2024 Credit Agreement

On July 31, 2025, the Company amended the 2024 Credit Agreement to incorporate the following:

• Term facility:

The amendment increased the principal balance from $ 935.5 million to $ 1.0 billion, increased quarterly principal payments from $ 2.4 million to $ 2.5 million, extended the maturity date from May 2031 to July 2032 and decreased the margin rate from 4.75 % to 3.75 %.

• Revolving credit facility:

The amendment increased the credit commitment from $ 70.0 million to $ 100.0 million, extended the maturity date from May 2029 to July 2030 and decreased the margin rate from 4.25 % to 3.50 %.

Proceeds from the increase in the term facility was primarily used for the acquisitions in Note 2.

Acquisitions .

In accordance with ASC 470, the Company determined on a creditor-by-creditor basis that the amendment was both a debt extinguishment and modification.

The Company expensed $ 2.3 million of previously unamortized fees and $ 4.1 million of debt issuance costs related to the refinancing which is reported in debt extinguishment and modification on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss).

Also reported in debt extinguishment and modification on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) is the acceleration and payout of $ 6.9 million of deferred consideration for Plastiq (see Note 13.

Commitments and C onti ngencies ) and the $ 0.8 million gain on the extinguishment of a loan.

Residual Finance Credit Facility

On August 18, 2025, a wholly owned subsidiary of the Company not restricted by the 2024 Credit Agreement entered into an agreement ("Residual Finance Credit Facility") which provides a delayed draw term loan facility with a total commitment of $ 50.0 million of which the Company has drawn $ 23.9 million.

The agreement also provides an accordion feature to increase the commitment by an aggregate amount not to exceed $ 75.0 million such that the total commitment may equal, but not exceed, $ 125.0 million.

The purpose of this credit facility is to fund certain residual purchases and loans to ISOs and ISVs.

Outstanding borrowings under the Residual Finance Credit Facility accrue interest using a SOFR rate plus an applicable margin per year, equal to 6.25 %, subject to a SOFR rate floor of 2.0 % per year.

Unused commitments are subject to a unused commitment fee on any undrawn amount equal to 1.0 % per year of the unused portion.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

1 unchanged sentence

$ 22,463 $ 23,246 $ 68,693 $ 65,836

(1) Included in interest expense is $ 1.0 million and $ 2.0 million related to the accretion of deferred consideration from acquisitions for the three and six months ended June 30, 2025, respectively, and $ 1.2 million and $ 2.2 million for the three and six months ended June 30, 2024, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 0.5 million and $ 0.9 million for the three and six months ended June 30, 2025, respectively, and $ 0.8 million and $ 1.8 million for the three and six months ended June 30, 2024, respectively.

(1) Included in interest expense is $ 0.4 million and $ 2.5 million related to the accretion of deferred consideration from acquisitions for the three and nine months ended September 30, 2025, respectively, and $ 1.1 million and $ 3.3 million for the three and nine months ended September 30, 2024, respectively.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 0.4 million and $ 1.3 million for the three and nine months ended September 30, 2025, respectively, and $ 0.4 million and $ 2.3 million for the three and nine months ended September 30, 2024, respectively.

Debt Covenants

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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, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.

The Company's consolidated effective income tax rate for the three and six months ended June 30, 2025 was 28.9 % and 25.8 %, respectively, compared to a consolidated effective income tax rate of 71.7 % and 45.2 % for the three and six months ended June 30, 2024, 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.

1) 6.90 :1.00 at each fiscal quarter ended September 30, 2025 through March 31, 2026;

2) 6.40 :1.00 at each fiscal quarter ended June 30, 2026 and each fiscal quarter thereafter.

As of September 30, 2025, the Company was in compliance with the covenants in the 2024 Credit Agreement.

The Residual Finance Credit Facility contains customary 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, and enter into certain transactions (including with affiliates).

The Residual Finance Credit Facility requires the Company to comply with certain restrictions including minimum liquidity of $ 2.0 million, minimum tangible net worth of $ 5.0 million, maximum default ratio of 2.5 %, maximum delinquency ratio of 5.0 %, and a minimum excess spread ratio of 1.00 to 1.00.

As of September 30, 2025, the Company was in compliance with the restrictions in the agreement.

The Company's consolidated effective income tax rate for the three and nine months ended September 30, 2025 was ( 273.5 )% and ( 40.7 )%, respectively, compared to a consolidated effective income tax rate of 31.6 % and 37.3 % for the three and nine months ended September 30, 2024, respectively.

The effective rates differed from the statutory rate of 21.0% primarily due to a decrease in the valuation allowance against certain business interest carry over deferred tax assets.

Valuation Allowance for Deferred Income Tax Assets

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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 June 30, 2025, the Company continues to record a full valuation allowance against non-deductible interest expense, and net deferred tax assets acquired as part of the Payslate acquisition.

Based on management's assessment, as of September 30, 2025, the Company continues to record a full valuation allowance against certain transaction costs, and net deferred tax assets acquired as part of the Payslate acquisition.

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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government enacted legislation known as the One Big Beautiful Bill Act ("OBBBA") into law.

The OBBBA, among other provisions, extends or reinstates certain provisions of the 2017 Tax Cuts and Jobs Act ("TCJA"), including but not limited to, 100% bonus depreciation on eligible property, immediate expensing of domestic research and

development costs, and the restoration of an EBITDA based interest expense limitation calculation.

The Company is in the process of evaluating the provisions of the OBBBA, and their impact on the Company's financial statements.

As a result of the OBBBA interest expense limitation provision changes, the Company has released its valuation allowance against its interest limitation deferred tax assets.

Stockholders' Deficit

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 June 30, 2025 and December 31, 2024, the Company has not issued any shares of preferred stock.

As of September 30, 2025 and December 31, 2024, the Company has not issued any shares of preferred stock.

Share Repurchase Program

1 unchanged sentence

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.

The Company has purchased 1,309,374 shares for $ 5.8 million under this plan.

On May 5, 2025, the Company's Board of Directors amended the program to increase the authorization to 5,000,000 shares of it's outstanding common stock for a total of $ 40.0 million.

As of June 30, 2025, the Company has purchased 1,309,374 shares for $ 5.8 million under this plan.

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

As of September 30, 2025, there have been no shares repurchased under this amended plan.

Stock-based Compensation

Stock-based compensation expense, which is included in salary and employee benefits within the Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss), was as follows:

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2025 2024 2025 2024

4 unchanged sentences

Total $ 2,327 $ 1,416 $ 7,119 $ 4,878

Income tax benefit for stock-based compensation was $ 0.1 million and $ 0.8 million respectively, for the three and six months ended June 30, 2025 and was immaterial for the three and six months ended June 30, 2024.

Income tax benefit for stock-based compensation was $ 0.2 million and $ 1.0 million respectively, for the three and nine months ended September 30, 2025 and was immaterial for the three and nine months ended September 30, 2024.

No stock-based compensation has been capitalized in any period presented.

Awards granted during the three and six months ended months ended June 30, 2025 and June 30, 2024, were not material.

Awards granted during the three and nine months ended September 30, 2025 and September 30, 2024, were not material.

The Company's 2018 Plan initially provided for the issuance of up to 6,685,696 shares of the Company's Common Stock.

On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan, which was subsequently approved by our shareholders, to increase the number of shares authorized for issuance under the plan by 2,500,000 shares, resulting in 9,185,696 shares of the Company's Common Stock authorized for issuance under the plan.

As of June 30, 2025, the Company had 3,033,500 shares available for issuance under the 2018 Plan.

As of September 30, 2025, the Company had 3,123,543 shares available for issuance under the 2018 Plan.

2021 Employee Stock Purchase Plan

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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 ESPP 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.

The ESPP 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.

The ESPP was amended by shareholder approval on June 13, 2025, to increase the number of shares available by 200,000 .

As of June 30, 2025, the Company had 219,587 shares available for issuance under the 2021 Stock Purchase Plan.

As of September 30, 2025, the Company had 203,702 shares available for issuance under the 2021 Stock Purchase Plan.

Non-voting Incentive Units

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During 2024, preferred units held by the CEO were redeemed for $ 2.1 million in cash and those held by the Chief Operating Officer were redeemed by issuance of 404,013 shares of the Company's common stock valued at $ 1.5 million.

There was no subsequent activity for the three and six months ended June 30, 2025 and June 30, 2024 .

There was no subsequent activity for the three and nine months ended September 30, 2025 and September 30, 2024.

Commitments and Contingencies

4 unchanged sentences

Other Commitments

As of June 30, 2025 and December 31, 2024, the Company had a capital contribution commitment $ 5.6 million and $ 12.6 million respectively, to fund operations of certain subsidiaries.

As of September 30, 2025 and December 31, 2024, the Company had a capital contribution commitment of $ 4.4 million and $ 12.6 million respectively, to fund operations of certain subsidiaries.

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

As of June 30, 2025, the Company committed to making a minimum investment of $ 1.5 million in an unconsolidated entity.

The Company is expected to make the investment during 2025.

Deferred Consideration

The following table provides a reconciliation of the beginning and ending balance of the Company's deferred consideration liabilities related to completed acquisitions:

(in thousands) Deferred Consideration Liabilities

Deferred/Contingent Consideration

The following table provides a reconciliation of the beginning and ending balance of the Company's deferred and contingent consideration liabilities related to completed acquisitions:

(in thousands) Deferred/Contingent Consideration Liabilities

December 31, 2024 $ 10,685

2 unchanged sentences

Accretion of deferred consideration 2,449

Additions due to acceleration of timing of deferred consideration payments 6,894

Payment of deferred consideration ( 19,756 )

June 30, 2025 $ 16,358

September 30, 2025 $ 9,096

On July 31, 2025, the Company accelerated remaining payments of $ 18.9 million of the deferred considerations related to the Plastiq acquisition.

The acceleration of these payments resulted in $ 6.9 million of debt extinguishment and modification costs, net, in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss).

Legal Proceedings

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

As of June 30, 2025, the court granted final approval of the settlement agreement wherein the defendants agree to pay $ 19.5 million to settle this litigation on a class basis.

During the quarter ended June 30, 2025, the court granted final approval of the settlement agreement wherein the defendants agree to pay $ 19.5 million to settle this litigation on a class basis.

There was no contribution from the Company towards this settlement agreement.

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Because Priority is not a member bank, these customer funds are held in bank accounts maintained with member banks pursuant to sponsorship agreements which require, among other things, that the Company abide by the laws and regulations of the card associations and MTL regulators.

As of June 30, 2025, the Company's customer account balances of $ 1,095.5 million are maintained in accounts with certain FIs which are eligible to pass-through insurance subject to FDIC rules and regulations (refer to Note 4.

As of September 30, 2025, the Company's customer account balances of $ 1.2 billion are maintained in accounts with certain FIs which are eligible to pass-through insurance subject to FDIC rules and regulations (refer to Note 4.

Settlement Assets and Obligations ).

A majority of the Company's cash, restricted cash and off-balance sheet settlement funds are held in certain FIs, substantially all of which is in excess of FDIC limits.

A majority of the Company's cash, restricted cash and off-balance sheet settlement funds are held in certain FIs,

substantially all of which is in excess of FDIC limits.

The Company does not believe it is exposed to any significant credit risk from these transactions.

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

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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 $ 10.0 million and $ 8.6 million at June 30, 2025 and December 31, 2024, respectively and is within the Level 3 of the fair value hierarchy.

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

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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 $ 936.7 million and $ 944.4 million at June 30, 2025 and December 31, 2024, 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.

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

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.

Segment Information

The Company's three reportable segments included SMB Payments, B2B Payments and Enterprise Payments:

• SMB Payments :

The Company's three reportable segments included Merchant Solutions, Payables and Treasury Solutions:

• Merchant Solutions :

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 in addition to improving cash flows by providing instant access to working capital.

• Enterprise Payments :

Provides embedded finance and BaaS solutions to customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments.

• Treasury Solutions :

Provides embedded finance and treasury solutions to customers to modernize legacy platforms and accelerate software partners' strategies to monetize payments.

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

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

Three Months Ended June 30, 2025

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Three Months Ended September 30, 2025

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 161,307 $ 24,698 $ 55,434 $ 241,439

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Interest expense ( 22,463 )

Debt modification and extinguishment expenses ( 12,476 )

Selling, general and administrative (non-recurring) ( 1,491 )

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(4) Adjustment for corporate items include:

(in thousands) Three Months Ended June 30, 2025

(in thousands) Three Months Ended September 30, 2025

Elimination of cost of services (excludes depreciation and amortization) $ 1,277

3 unchanged sentences

(in thousands) Other specified segment disclosure

Three Months Ended June 30, 2025

SMB Payments B2B

Payments Enterprise Payments Total

Three Months Ended September 30, 2025

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 7,607 $ 1,275 $ 4,923 $ 13,805

Six Months Ended June 30, 2025

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Nine Months Ended September 30, 2025

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 475,336 $ 73,054 $ 157,491 $ 705,881

24 unchanged sentences

(4) Adjustment for corporate items include:

(in thousands) Six Months Ended June 30, 2025

(in thousands) Nine Months Ended September 30, 2025

Elimination of cost of services (excludes depreciation and amortization) $ 3,447

3 unchanged sentences

(in thousands) Other specified segment disclosure

Six Months Ended June 30, 2025

SMB Payments B2B

Payments Enterprise Payments Total

Nine Months Ended September 30, 2025

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 20,865 $ 3,798 $ 14,507 $ 39,170

Three Months Ended June 30, 2024

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Three Months Ended September 30, 2024

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 158,350 $ 21,820 $ 46,879 $ 227,049

23 unchanged sentences

(4) Adjustment for corporate items include:

(in thousands) Three Months Ended June 30, 2024

(in thousands) Three Months Ended September 30, 2024

Elimination of cost of services (excludes depreciation and amortization) $ 961

3 unchanged sentences

(in thousands) Other specified segment disclosure

Three Months Ended June 30, 2024

SMB Payments B2B

Payments Enterprise Payments Total

Three Months Ended September 30, 2024

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 6,938 $ 1,261 $ 4,304 $ 12,503

Six Months Ended June 30, 2024

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Nine Months Ended September 30, 2024

(in thousands) Merchant Solutions Payables Treasury Solutions Total

Revenue from external customers $ 456,865 $ 64,556 $ 131,214 $ 652,635

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Other segment items 3

1,277 272 582

Segment Adjusted EBITDA $ 82,265 $ 5,209 $ 112,911 $ 200,385

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(4) Adjustment for corporate items include:

(in thousands) Six Months Ended June 30, 2024

(in thousands) Nine Months Ended September 30, 2024

Elimination of cost of services (excludes depreciation and amortization) $ 2,361

3 unchanged sentences

(in thousands) Other specified segment disclosure

Six Months Ended June 30, 2024

SMB Payments B2B

Payments Enterprise Payments Total

Nine Months Ended September 30, 2024

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 24,065 $ 3,992 $ 12,431 $ 40,488

1 unchanged sentence

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

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

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands except per share amounts) 2025 2024 2025 2024

9 unchanged sentences

Diluted Earnings (loss) per share $ 0.34 $ 0.07 $ 0.58 $ ( 0.26 )

(1) For the three and six months ended June 30, 2024, the weighted-average common shares outstanding includes 1,803,841 warrants.

(1) For the three and nine months ended September 30, 2024, the weighted-average common shares outstanding includes 1,803,841 warrants.

These shares of common stock had an exercise price of $ 0.001 and were exercised on January 14, 2025.

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.

For the three and six months ended June 30, 2025, the Company had 0.9 million and 1.1 million, respectively, dilutive securities that were included in the Company's diluted earnings per share.

For the three and six months ended June 30, 2024, 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 nine months ended September 30, 2025, the Company had 0.8 million and 1.0 million, respectively, dilutive securities that were included in the Company's diluted earnings per share.

For the three and nine months ended September 30, 2024, the Company had 2.1 million and 0.0 million , respectively, dilutive securities that were included in the Company's diluted earnings per share.

Anti-dilutive securities that were excluded from the Company's earnings (loss) per common share are as follows:

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

(in thousands) 2025 2024 2025 2024

Three Months Ended September 30, Nine Months Ended September 30,

(number of shares, in thousands) 2025 2024 2025 2024

Restricted stock awards (1)

4 unchanged sentences

Subsequent Events

We have evaluated subsequent events and determined that no events or transactions met the definition of a subsequent event for purposes of recognition or disclosure in the accompanying unaudited consolidated financial statements except as disclosed in Note 9 Income Taxes and included herein.

On July 31, 2025, the Company entered into a credit agreement which provides 1) a $ 1,000 million senior secured first lien term loan facility and 2) a $ 100.0 million senior secured revolving credit facility.

Proceeds from the term loan were used to refinance the existing credit facilities under the 2024 Credit Agreement, to accelerate payments of certain deferred considerations related to prior acquisitions, acquisition of non-controlling interests in one of the Company's subsidiaries and the remainder will be used for corporate purposes.

The revolving credit facility remained undrawn.

The Company is in the process of evaluating this transaction in accordance with ASC 470.

On July 31, 2025, the Company accelerated the timing of payment of deferred consideration related to the Plastiq acquisition.

The total payment was $ 19.0 million.

On July 31, 2025, the Company purchased the noncontrolling interest in it's subsidiary Plastiq, Powered by Priority, LLC., for $ 6.0 million.

On October 1, 2025, Priority’s indirect subsidiary, Priority DMS LLC, (the "acquiring entity"), acquired certain assets of DMSJV LLC (the "DMS business"), for cash consideration of $ 35.0 million, earn outs not to exceed $ 22.5 million and equity in the acquiring entity.

Post transaction, Priority owns 76.7 % of the equity interest in the acquiring entity with the remaining interest owned by the sellers of the DMS business.

Considering the timing of the acquisition, the Company has not yet completed its preliminary acquisition accounting.

The DMS business is a leading vertically focused reseller in the auto and

truck dealership sector and will complement the Company's Merchant Solutions segment.

Priority will benefit from the addition of the DMS team, vertically focused integrated software and distribution in the automotive dealership arena.

The preliminary acquisition accounting is expected to be completed in the fourth quarter of 2025.

On October 1, 2025, the Company entered into the third amendment to its 2024 Credit Agreement to increase its term loan facility by $ 35.0 million.

All other significant terms remained unchanged.

The proceeds of the increase were used to fund the acquisition of the DMS business.

The accounting evaluation of the amendment is in process.

On October 31, 2025, the Company made a voluntary principal prepayment of $ 15.0 million on the 2024 Credit Agreement's term facility.

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