What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2026-03-10 compared with 2025-03-06 · 680 added, 553 removed, 1025 unchanged (55% of the section changed)

1 unchanged sentence

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets as of December 31, 202 5 and December 31, 202 4

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Changes in Shareholders' Deficit and Non-Controlling Interests for the years ended December 31, 2024, 2023 and 2022

Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest for the years ended December 31, 2025, 2024 and 2023

Consolidated Statements of Cash Flows for the years ended December 31, 202 5 , 202 4 and 202 3

1 unchanged sentence

Nature of Business and Significant Accounting Policies

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations

Settlement Assets and Obligations

Notes Receivable

3 unchanged sentences

Debt Obligations

Redeemable Senior Preferred Stock and Warrants

Shareholders' Deficit

Stockholders' Deficit

Stock-based Compensation

Employee Benefit Plans

Related Party Transactions

Commitments and Contingencies

Segment Information

(Loss) Earnings per Common Share

Earnings (Loss) per Common Share

Subsequent Events

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Priority Technology Holdings, Inc.

To the Stockholders and the Board of Directors of Priority Technology Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Priority Technology Holdings, Inc.

(the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ deficit and non-controlling interests and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

(the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ deficit and non-controlling interest and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 framework and our report dated March 6, 2025 expressed an adverse opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 10, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

1 unchanged sentence

The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accrued Residual Commissions and Residual Commission Expenses

Description of the Matter

Accrued residual commissions recorded by the Company and included on the Consolidated Balance Sheet were $37.6 million at December 31, 2024, and residual commission expenses included within costs of services on the Consolidated Statement of Operations were $426.6 million for the year ended December 31, 2024.

As discussed in Note 1 of the consolidated financial statements, the Company accrues and pays commission expense for certain customer services and other services provided by its independent sales organizations (ISOs).

Commissions are based on a percentage of the net revenues generated from the Company’s merchant customers, and these percentages vary based on the program type and transaction volume of each merchant.

Auditing residual commissions was complex due to the non-standard nature of the pricing terms within the ISO contracts, the volume of contracts, the volume of transactions processed each month, and the degree of auditor judgment needed to design the nature and extent of audit procedures to obtain sufficient audit evidence.

How We Addressed the Matter in Our Audit

To test accrued residual commissions and residual commission expenses, our audit procedures included, among others, testing the completeness and accuracy of the underlying data supporting the commission calculations and the accuracy of the calculations.

We selected a sample of monthly ISO payments and, for each sample item, we compared the pricing terms included in the calculation to the respective ISO contract or other source documents, recalculated the related expense and accrual, and agreed the commission payment to evidence of cash disbursement.

Additionally, for these monthly ISO payments, we selected a sample of merchant customers, then selected a transaction type, obtained their monthly processing statements, which were generated by the Company’s third-party processors, and agreed the monthly payment volumes to the commission calculations.

Earn-out Provisions Related to Current Year Business Combinations and Asset

Description of the Matter As outlined in Note 2 to the consolidated financial statements, the Company executed several acquisitions during the current year which included earn-out provisions as part of the consideration transferred.

Two transactions involved more complex accounting judgments, specifically whether the transaction is a business combination or asset acquisition, and whether the earn-out represents compensation expense or contingent consideration.

The BOOM Commerce residual portfolio rights acquisition was accounted for under the acquisition method of accounting as an asset acquisition.

As an asset acquisition, the earn-out provisions, not to exceed $17.0 million, are recognized only when payable or paid.

The Dealer Merchant Services acquisition was accounted under the acquisition method of accounting as a business combination.

The total purchase consideration included an earn-out provision with a maximum payout of $22.5 million, which was initially recorded at fair value of $17.1 million on the transaction date within Accounts Payable and Accrued Expenses, and Other Noncurrent Liabilities.

The Company evaluated each transaction to determine if it qualified as an asset acquisition or a business combination, and further assessed whether the earn-out provisions awarded to employees who joined the Company should be classified as contingent consideration or as compensation expense.

Auditing the Company's accounting for the earnout provisions in these transactions was complex due to the judgments applied in the determination of whether the acquisition should be accounted for as business combination or asset acquisition and the judgments applied to determine whether the earn-out provision represented contingent consideration or compensation expense.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the internal controls over the Company’s determination as to whether the transactions meet the definition of a business combination or an asset acquisition, and the determination of the accounting for the earn out provision.

This included testing controls related to the evaluation of the technical accounting conclusions supporting the recognition of these transactions.

To test the Company’s accounting conclusions as to whether the transactions should be accounted for as a business combination or an asset acquisition, and the accounting for the earn-out provisions, with the assistance of subject matter resources, our audit procedures included, among others, examining documents related to the acquisitions, including the purchase or asset agreements, reviewing management’s accounting memorandum and evaluating whether the judgments made by management were in accordance with applicable accounting standards.

Additionally, we performed inquiries of senior management responsible for the acquisitions and assessed financial reporting considerations related to those discussions.

We also tested the earn-out consideration for appropriate recognition and evaluated whether the disclosures were in accordance with applicable accounting standards.

/s/ Ernst & Young LLP

3 unchanged sentences

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Priority Technology Holdings, Inc.

To the Stockholders and the Board of Directors of Priority Technology Holdings, Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Priority Technology Holdings, Inc.’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, Priority Technology Holdings, Inc.

(the Company) has not maintained effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness related to the design and operation of certain automated controls (including related information technology general controls) for certain tools or applications involved in the transformation and ingestion of third-party processors’ data in the Company’s control environment.

The ingested data is a key input for determination of merchant revenue (and related accounts receivable) and residual expense (and related accounts payable).

Consequently, automated controls and IT dependent manual business process controls that rely upon information from the affected financial applications and processes were also deemed ineffective.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in shareholders’ deficit and non-controlling interests and cash flows for each of the three years in the period ended December 31, 2024, and the related notes.

This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated March 6, 2025 which expressed an unqualified opinion thereon.

In our opinion, Priority Technology Holdings, Inc.

(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ deficit and non-controlling interest and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 10, 2026 expressed an unqualified opinion thereon.

Basis for Opinion

5 unchanged sentences

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the

risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

2 unchanged sentences

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit

preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

15 unchanged sentences

Current portion of notes receivable, net of allowances of $ 0 and $ 0 , respectively

Settlement assets and customer/subscriber account balances 940,798 756,475

Settlement assets 1,295,896 940,798

Total current assets 1,515,052 1,105,085

6 unchanged sentences

Total assets $ 2,398,804 $ 1,826,860

Liabilities, Redeemable Senior Preferred Stock and Shareholders' Deficit

Liabilities, Stockholders' Deficit and Non-controlling interest

Current liabilities:

3 unchanged sentences

Current portion of long-term debt — 9,503

Settlement and customer/subscriber account obligations 940,213 755,754

Settlement obligations 1,297,263 940,213

Total current liabilities 1,410,334 1,051,671

3 unchanged sentences

Commitments and contingencies ( Note 16 )

Redeemable senior preferred stock, net of discounts and issuance costs:

Redeemable senior preferred stock, $ 0.001 par value per share;

250,000 shares authorized;

225,000 issued at December 31, 2024 and December 31, 2023;

0 and 225,000 outstanding at December 31, 2024 and December 31, 2023

Shareholders' deficit:

Stockholders' deficit:

Preferred stock, $ 0.001 par value per share;

8 unchanged sentences

Additional paid-in capital 13,925 —

Accumulated other comprehensive income ( 176 ) ( 29 )

Accumulated other comprehensive income (loss) ( 210 ) ( 176 )

Accumulated deficit ( 91,453 ) ( 147,134 )

Total shareholders' deficit attributable to shareholders of Priority ( 166,840 ) ( 147,718 )

Non-controlling interests in consolidated subsidiaries 1,815 1,654

Total shareholders' deficit ( 165,025 ) ( 146,064 )

Total liabilities, redeemable senior preferred stock and shareholders' deficit $ 1,826,860 $ 1,615,337

Total stockholders' deficit attributable to stockholders of Priority ( 100,415 ) ( 166,840 )

Non-controlling interest in consolidated subsidiaries 8,043 1,815

Total stockholders' deficit ( 92,372 ) ( 165,025 )

Total liabilities, stockholders' deficit and Non-controlling interest $ 2,398,804 $ 1,826,860

See Notes to Consolidated Financial Statements

Priority Technology Holdings, Inc .

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share amounts)

15 unchanged sentences

Income before income taxes 46,279 37,281 7,152

Income tax expense 13,266 8,463 5,350

Income tax (benefit) expense ( 9,402 ) 13,266 8,463

Net income (loss) 55,681 24,015 ( 1,311 )

1 unchanged sentence

Return on redeemable NCI in consolidated subsidiary — ( 639 ) —

Net loss attributable to common shareholders ( 23,960 ) ( 49,055 ) ( 39,030 )

Other comprehensive loss

Net income (loss) attributable to common stockholders 55,681 ( 23,960 ) ( 49,055 )

Other comprehensive income (loss)

Foreign currency translation adjustments ( 34 ) ( 147 ) ( 29 )

Comprehensive loss $ ( 24,107 ) $ ( 49,084 ) $ ( 39,030 )

Loss per common share:

Basic and diluted $ ( 0.31 ) $ ( 0.63 ) $ ( 0.50 )

Comprehensive income (loss) $ 55,647 $ ( 24,107 ) $ ( 49,084 )

Earnings (loss) per common share:

Basic $ 0.70 $ ( 0.31 ) $ ( 0.63 )

Diluted $ 0.68 $ ( 0.31 ) $ ( 0.63 )

Weighted-average common shares outstanding:

Basic and diluted 77,993 78,333 78,233

Basic 79,798 77,993 78,333

Diluted 81,468 77,993 78,333

See Notes to Consolidated Financial Statements

Priority Technology Holdings, Inc .

Consolidated Statements of Changes in Shareholders' Deficit and Non-Controlling Interests

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

(in thousands)

1 unchanged sentence

Stock APIC AOCI Accumulated

Deficit Deficit Attributable to Shareholders NCIs Total

Deficit Deficit Attributable to Stockholders NCI Total

Shares $ Shares $

1 unchanged sentence

Equity-classified stock-based compensation — — — — 6,480 — — 6,480 — 6,480

Vesting of stock-based compensation 925 1 — — — — — 1 — 1

Issuance of profit interests in wholly-owned subsidiaries — — — — — — — — 1,255 1,255

Share repurchases ( 1,621 ) ( 2 ) 1,621 ( 7,468 ) — — — ( 7,470 ) — ( 7,470 )

Dividends on redeemable senior preferred stock — — — — ( 33,594 ) — — ( 33,594 ) — ( 33,594 )

Accretion of unamortized issuance costs for redeemable senior preferred stock — — — — ( 3,286 ) — — ( 3,286 ) — ( 3,286 )

Net loss — — — — — — ( 2,150 ) ( 2,150 ) — ( 2,150 )

December 31, 2022 76,044 76 2,341 ( 11,559 ) 9,650 — ( 102,208 ) ( 104,041 ) 1,255 ( 102,786 )

Equity-classified stock-based compensation — — — — 6,480 — — 6,480 — 6,480

ESPP compensation and vesting of stock-based compensation 1,204 1 — — 182 — — 183 — 183

Vesting of stock awards and ESPP purchases 1,204 1 — — 182 — — 183 — 183

Shares withheld for taxes ( 291 ) — 291 ( 1,256 ) — — — ( 1,256 ) — ( 1,256 )

6 unchanged sentences

Net loss — — — — — — ( 1,311 ) ( 1,311 ) — ( 1,311 )

December 31, 2023 76,957 $ 77 2,632 $ ( 12,815 ) $ — $ ( 29 ) $ ( 134,951 ) $ ( 147,718 ) $ 1,654 $ ( 146,064 )

Priority Technology Holdings, Inc .

Consolidated Statements of Changes in Shareholders' Deficit and Non-Controlling Interests

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

(in thousands)

1 unchanged sentence

Stock APIC AOCI Accumulated

Deficit Deficit Attributable to Shareholders NCIs Total

Deficit Deficit Attributable to Stockholders NCI Total

Shares $ Shares $

December 31, 2023 76,957 $ 77 2,632 $ ( 12,815 ) $ — $ ( 29 ) $ ( 134,951 ) $ ( 147,718 ) $ 1,654 $ ( 146,064 )

January 1, 2024 76,957 $ 77 2,632 $ ( 12,815 ) $ — $ ( 29 ) $ ( 134,951 ) $ ( 147,718 ) $ 1,654 $ ( 146,064 )

Equity-classified stock-based compensation — — — — 5,957 — — 5,957 — 5,957

3 unchanged sentences

Redemption of PHOT redeemable NCI, net of tax — — — — 3,734 — — 3,734 — 3,734

ESPP compensation and vesting of stock-based compensation 1,197 1 — — 238 — — 239 — 239

Vesting of stock awards and ESPP purchases 1,197 1 — — 238 — — 239 — 239

Shares withheld for taxes ( 326 ) — 326 ( 1,537 ) — — — ( 1,537 ) — ( 1,537 )

6 unchanged sentences

Reclassification of negative additional paid-in capital — — — — 33,460 — ( 33,460 ) — — —

Net income (loss) — — — — — — 24,015 24,015 — 24,015

Net income — — — — — — 24,015 24,015 — 24,015

December 31, 2024 77,480 $ 77 4,386 $ ( 19,607 ) $ — $ ( 176 ) $ ( 147,134 ) $ ( 166,840 ) $ 1,815 $ ( 165,025 )

Priority Technology Holdings, Inc .

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

(in thousands)

Common Stock Treasury

Stock APIC AOCI Accumulated

Deficit Deficit Attributable to Stockholders NCI Total

Shares $ Shares $

January 1, 2025 77,480 $ 77 4,386 $ ( 19,607 ) $ — $ ( 176 ) $ ( 147,134 ) $ ( 166,840 ) $ 1,815 $ ( 165,025 )

Equity-classified stock-based compensation — — — — 5,953 — — 5,953 — 5,953

Vesting of stock awards and ESPP purchases 1,135 1 — — 396 — — 397 — 397

Shares withheld for taxes ( 346 ) — 346 ( 3,152 ) — — — ( 3,152 ) — ( 3,152 )

Exercise of stock options 67 — — — 467 — — 467 — 467

Exercise of warrants 1,804 2 — — ( 2 ) — — — — —

Shares issued as part of Boom asset purchase 1,767 2 — — 13,459 — — 13,461 — 13,461

Purchase of NCI — — — — ( 6,348 ) — — ( 6,348 ) ( 669 ) ( 7,017 )

Issuance of NCI as part of DMS acquisition — — — — — — — — 6,562 6,562

Issuance of profit interests in subsidiaries — — — — — — — — 335 335

Foreign currency translation adjustment — — — — — ( 34 ) — ( 34 ) — ( 34 )

Net income — — — — — — 55,681 55,681 — 55,681

December 31, 2025 81,907 $ 82 4,732 $ ( 22,759 ) $ 13,925 $ ( 210 ) $ ( 91,453 ) $ ( 100,415 ) $ 8,043 $ ( 92,372 )

See Notes to Consolidated Financial Statements

12 unchanged sentences

Deferred income tax benefit ( 12,153 ) ( 2,194 ) ( 6,086 )

Change in contingent consideration liability 2,839 ( 1,639 ) 2,059

Change in deferred consideration liability 2,692 2,839 ( 1,639 )

Other non-cash items, net ( 293 ) ( 147 ) ( 3,924 )

Bargain purchase gain ( 3,989 ) — —

Change in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other current assets ( 84 ) ( 6,062 ) ( 936 )

Income taxes (receivable) payable ( 3,633 ) ( 273 ) 6,260

Income taxes receivable ( 8,554 ) ( 3,633 ) ( 273 )

Notes receivable — — ( 912 )

Accounts payable and other accrued liabilities 9,562 ( 3,218 ) 19,794

Accounts payable and accrued expenses 5,743 4,535 ( 2,954 )

Accrued residuals commissions 2,903 5,027 ( 264 )

Customer deposits and advance payments ( 319 ) ( 1,688 ) 1,102

Other assets and liabilities, net ( 4,960 ) ( 5,031 ) ( 6,000 )

Other assets, net ( 4,449 ) ( 6,214 ) ( 6,763 )

Other liabilities, net ( 3,612 ) 1,254 1,732

Net cash provided by operating activities 100,005 85,609 81,256

2 unchanged sentences

Additions to property, equipment and software ( 24,926 ) ( 21,693 ) ( 21,256 )

Notes receivable, net ( 3,361 ) 376 ( 4,662 )

Acquisition of assets and other investing activities ( 10,492 ) ( 6,646 ) ( 7,983 )

Notes receivable, net (see Note 5 )

( 11,134 ) ( 3,361 ) 376

Acquisition of assets ( 69,462 ) ( 5,667 ) ( 6,646 )

Other investing activities ( 29,218 ) ( 4,825 ) —

Net cash used in investing activities ( 174,041 ) ( 35,546 ) ( 55,748 )

8 unchanged sentences

Redemption of redeemable non-controlling interest in subsidiary ( 7,017 ) ( 2,130 ) —

Repurchases of Common Stock and shares withheld for taxes ( 1,538 ) ( 1,256 ) ( 7,468 )

Shares withheld for taxes ( 3,152 ) ( 1,538 ) ( 1,256 )

Dividends paid to redeemable senior preferred stockholders — ( 23,646 ) ( 24,718 )

Proceeds from the exercise of stock options 467 1,816 —

Settlement and customer/subscriber accounts obligations, net 179,614 211,077 43,143

Payment of contingent consideration related to a business combination ( 5,592 ) ( 4,700 ) ( 7,014 )

Net cash provided by financing activities 147,578 210,105 8,502

Net change in cash and cash equivalents, and restricted cash:

Net increase in cash and cash equivalents, and restricted cash 197,641 235,613 42,517

Cash and cash equivalents, and restricted cash at beginning of period 796,223 560,610 518,093

Settlement obligations, net 355,127 179,614 211,077

Payment of contingent/deferred consideration ( 20,051 ) ( 5,592 ) ( 4,700 )

Priority Technology Holdings, Inc .

3 unchanged sentences

2025 2024 2023

Net cash provided by financing activities 426,170 147,578 210,105

Net change in cash and cash equivalents, and restricted cash:

Net increase in cash and cash equivalents, and restricted cash 352,134 197,641 235,613

Cash and cash equivalents, and restricted cash at beginning of period 993,864 796,223 560,610

Cash and cash equivalents, and restricted cash equivalents at end of period $ 1,345,998 $ 993,864 $ 796,223

2 unchanged sentences

Restricted cash 16,457 11,090 11,923

Cash and cash equivalents included in settlement assets and customer/subscriber account balances (see Note 4 )

Cash and cash equivalents included in settlement assets (restricted in nature, see Note 4 )

1,252,349 924,174 744,696

4 unchanged sentences

Non-cash investing and financing activities:

Contingent consideration accrual $ 2,839 $ 5,951 $ 6,079

Addition of contingent/deferred consideration liabilities $ 28,134 $ — $ 8,419

Deferred consideration accrual $ 2,692 $ 2,839 $ 5,951

Net non-cash change in lease liability $ 1,091 $ 1,549 $ 1,520

4 unchanged sentences

Issuance of NCI $ 6,562 $ — $ 184

Issuance of Common Stock in asset acquisition $ 13,461 $ — $ —

Liability incurred in asset acquisition $ 4,000 $ — $ —

Adjustment to value of profit interest unit $ — $ — $ ( 404 )

Forfeiture of liability-classified award $ — $ — $ 325

Change in ESPP liability $ — $ — $ 143

(1) The dividend payable for year ended December 31, 2023, was paid on January 2, 2024.

The dividend payable for year ended December 31, 2022, was paid on January 2, 2023.

See Notes to Consolidated Financial Statements

2 unchanged sentences

Nature of Business and Significant Accounting Policies

Priority is a payments and banking fintech that streamlines collecting, storing, lending and sending money through its innovative commerce engine (the “Priority Commerce Engine” or “PCE”) to unlock revenue opportunities and generate operational success for businesses.

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

The Company operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent needs.

Priority is a payments and banking fintech purpose-built to collect, store, lend and send money.

Our connected commerce engine combines full-service merchant acquiring for accounts receivable, complete automated payables tools for bill payment, and sophisticated treasury management solutions.

These combine to accelerate cash flow and optimize working capital for our customers.

The Company provides its services through the following reportable segments:

• SMB Payments :

• 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 (including Citibank, Visa and Mastercard) in addition to improving cash flows by providing instant access to working capital.

• Enterprise Payments :

• Treasury Solutions :

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

15 unchanged sentences

There was no income or loss attributable to NCI in accordance with the applicable operating agreements for any years presented.

Certain amounts from prior periods have been reclassified to conform to the current period’s presentation.

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

Use of Estimates

20 unchanged sentences

and 3) other considerations deemed to be applicable to the specific situation.

Based on our assessment of these indicators, we have concluded that the promise to our customers to provide payment services is distinct from the services provided by the card issuing FIs and payment networks in connection with payment transactions.

We do not have the ability to direct the use of and obtain substantially all of the benefits of the services provided by the card issuing FIs and payment networks before those services are transferred to our customer, and on that basis, we do not control those services prior to being transferred to our customer.

As a result, we present our revenues net of the interchange fees retained by the card issuing FIs and the fees charged by the payment networks except for our Plastiq (B2B Payments) business where the Company is considered a merchant of record and therefore, revenue is presented on gross basis.

SMB Payments – The Company's SMB Payments segment enables the Company's customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services including authorization, settlement and funding, customer support and help-desk functions, chargeback resolution, payment security, consolidated billing and statements, and online reporting.

Additionally, the Company enables customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services.

Based on our assessment of these indicators, we have concluded that the promise to our customers to provide payment services is distinct from the services provided by the card issuing FIs, sponsor banks, and payment networks in connection with payment transactions.

We do not have the ability to direct the use of and obtain substantially all of the benefits of the services provided by the card issuing FIs, sponsor bank fees, and payment networks before those services are transferred to our customer, and on that basis, we do not control those services prior to being transferred to our customer.

As a result, we present our revenues net of the interchange fees retained by the card issuing FIs and the fees charged by the payment networks except for our Plastiq (Payables segment) business where the Company is considered a merchant of record and therefore, revenue is presented on gross basis.

Merchant Solutions – The Company's Merchant Solutions segment enables the Company's customers to accept card, electronic and digital-based payments at the point of sale by providing a suite of services including authorization, settlement and funding, customer support and help-desk functions, chargeback resolution, payment security, consolidated billing and statements, and online reporting.

The Company also earns revenue and commissions from resale of electronic POS equipment and certain subscription coupons.

2 unchanged sentences

assessments to the payment networks and credit card associations, retain their fees, and pay to the Company the net amount which represents the Company's revenue.

B2B Payments – The Company's B2B Payments segment enables the Company's customers to automate their accounts payable and other commercial payments functions with the Company's payment services that utilize physical and virtual payment cards as well as ACH transactions.

Additionally, in certain cases, the Company directly bills to its customers at the month end and records the revenue on a net basis.

Payables – The Company's Payables segment enables the Company's customers to automate their accounts payable and other commercial payments functions with the Company's payment services that utilize physical and virtual payment cards as well as ACH transactions.

The Company also provides cost-plus-fee turn-key business process outsourcing and assists commercial customers with programs that are designed to increase acceptance of Electronic Payments.

Revenues are generally earned on a per-transaction basis and are recognized by the Company over time, net of certain third-party costs for interchange fees, assessments to the payment networks, credit card associations fees, sponsor bank fees and rebates to customers.

The Company's payables management software helps businesses improve cash flow with instant access to working capital, while automating and enabling control over all aspects of accounts receivable and payable.

The Company's payables management platform (Plastiq) helps businesses improve cash flow with instant access to working capital, while automating and enabling control over all aspects of accounts receivable and payable.

For these transactions, the Company acts as a merchant of record, therefore, considered as the principal and accordingly presents its revenue on a gross basis.

1 unchanged sentence

These rebates are presented as net of revenue.

Enterprise Payments – The Company's Enterprise Payments segment uses payment-adjacent technologies to facilitate the acceptance of Electronic Payments from customers.

Revenue from the Enterprise Payments segment consists of the following:

Treasury Solutions – The Company's Treasury Solutions segment uses payment-adjacent technologies to facilitate the acceptance of Electronic Payments from customers.

Revenue from the Treasury Solutions segment consists of the following:

• Enrollment fees :

The revenue associated with enrollment fees is recognized at a point in time upon the receipt of a fully executed enrollment application, completion of the customer account setup, data verification and the constructive receipt of the applicable non-refundable fee.

The enrollment fees are charged for services provided in connection with initial setup (i.e.

data verification and review of underlying documents) and is recognized as revenue at the time of the receipt of a fully executed enrollment application, completion of the customer account setup, and the constructive receipt of the applicable non-refundable fee.

• Subscription fees :

3 unchanged sentences

• Interest revenue :

Interest revenue is derived from certain customer balances maintained in interest bearing accounts with select partner banks.

Interest revenue is derived from certain customer balances maintained in interest bearing accounts with select partner banks and recognized when earned.

• CRM and consulting fees :

4 unchanged sentences

from reserves and customer deposits) are presented within outsourced services and other services revenue.

Interest income is recognized using the effective interest rate method, which is based upon the respective interest rates and the average daily asset balance.

Interest income from the Company's surplus cash balances, notes receivable and other investments are included within other income.

7 unchanged sentences

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

Cost of Services

Cost of Services (excludes depreciation and amortization)

Costs of merchant card fees primarily consist of residual payments to agents and ISOs and other third-party costs directly attributable to payment processing.

The residual payments represent commissions paid to agents and ISOs based upon a percentage of the net revenues generated from merchant transactions.

Costs of outsourced services and other revenue consist of salaries directly related to outsourced services revenue, the cost of equipment (point of sale terminals) sold, and third-party fees and commissions related to the Company's ACH processing activities.

For the Plastiq (B2B Payments) business, the Company acts as merchant of record and therefore transaction processing costs, including interchange fees, are presented as costs of services.

Costs of outsourced services and other revenue consist of the cost of equipment (point of sale terminals) sold, and third-party fees and commissions related to the Company's ACH processing activities.

For the years ended December 31, 2024 and 2023, this also included salaries directly related to outsourced services revenue.

Cost of services for Passport includes bank partner fees for account issuance, maintenance, ledgering, settlement, and transaction‑based ACH, wire, and similar activity.

It also includes technology platform fees and reseller commissions.

Cost of services for CFTPay includes third‑party processing fees such as ACH origination charges, wire fees, and other settlement‑related banking costs.

It also includes check printing, handling, and shipping fees for creditor disbursements.

For the Plastiq business, the Company acts as merchant of record and therefore transaction processing costs, including interchange fees, are presented as costs of services.

Contracts with Customers and Contract Costs

The Company accrues and pays commission expense based on variable merchant payment volumes and for certain customer service and other services provided by its ISOs.

Since commission expenses are accrued and paid to ISOs on a monthly basis after the merchant enters into a new or renewed contract, these are not deemed to be a cost to acquire a new contract but they are reported within costs of services on our Consolidated Statements of Operations and Comprehensive Loss.

The ISO is typically an independent contractor or agent of the Company.

The Company may occasionally elect to buy out all or a portion of an ISO's rights to receive future commission payments related to certain merchants.

Amounts paid to the ISO for these residual buyouts are capitalized and amortized over the useful life on a straight-line basis under the accounting guidance for intangible assets and included in intangible assets, net on our Consolidated Balance Sheets.

A contract with a customer creates a legal right and obligation.

7 unchanged sentences

Net contract acquisition costs were $ 6.4 million and $ 8.7 million at December 31, 2025 and December 31, 2024, respectively.

Amortization expense for contract acquisition costs for the years ended December 31, 2024 and 2023 was $ 2.0 million and $ 1.0 million, respectively.

Amortization expense for the year ended December 31, 2022, was immaterial .

Amortization expense for contract acquisition costs for the years ended December 31, 2025 and December 31,

2024 was $ 2.4 million and $ 2.0 million, respectively.

Amortization expense for contact acquisition costs for the year ended December 31, 2023, was $ 1.0 million.

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents includes highly liquid instruments with an original maturity of three months or less, and cash owned by the Company that is held in financial institutions.

Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements or reserves held per contact terms.

Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements, reserves held per contract terms or minimum cash balance required to be maintained at the unrestricted subsidiary of the Company as per the terms of the Residual Finance credit facility.

Accounts Receivable, net

Accounts receivable is stated net of allowance for current period credit losses for any uncollectible amounts and are amounts primarily due from the Company's sponsor banks for revenues earned, net of related interchange and processing fees, and do not bear interest.

Other types of accounts receivable are from agents, merchants, card networks and other customers.

Amounts due from sponsor banks are typically paid within 30 days following the end of each month.

Inventory consists primarily of POS terminals and certain subscription coupons which is carried at the lower of cost or net realizable value.

Cost is equal to the purchase price and other expenses incurred with acquiring the inventory and is substantially valued using the weighted average cost method.

Accounts receivable includes amounts due from sponsor banks, agents, merchants, and other card networks and are stated net of allowance for current period credit losses for any uncollectible amounts.

These balances are typically paid within 30 days following the end of each month.

Inventory consists primarily of POS terminals which is carried at the lower of cost or net realizable value.

Cost is equal to the purchase price and other expenses incurred with acquiring the inventory and is valued using the weighted average cost method.

The carrying amount is reduced when items are determined to be obsolete/expired.

For the year ended December 31, 2024, the Company had a write-off for obsolete inventory for $ 3.5 million.

The Company had no obsolete or expired inventory for the years ended December 31, 2023 and 2022.

For the year ended December 31, 2024, the Company had inventory in transit of $ 7.1 million.

For the years ended December 31, 2025 and 2024, the Company had a write-off for obsolete inventory for $ 0.2 million and $ 3.5 million, respectively.

As of December 31, 2025 and 2024, the Company’s inventory totaled $ 14.5 million and $ 7.7 million, respectively, of which $ 5.3 million and $ 7.1 million, respectively, represented inventory in transit.

As of December 31, 2025 , $ 8.1 million is recorded in prepaid and other current assets and $ 6.4 million is recorded in other noncurrent assets on the Company's Consolidated Balance Sheets.

As of December 31, 2024, $ 7.7 million is recorded in prepaid and other current assets on the Company's Consolidated Balance Sheets.

Notes Receivable

Notes receivable are primarily comprised of notes receivable from ISOs 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.

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

Notes receivable are recorded at the unpaid principal balance.

3 unchanged sentences

The Company may also utilize a mix of qualitative and quantitative risk factors within its estimation.

The allowance for expected loss from accounts receivable was $ 3.0 million and $ 5.3 million at December 31, 2024 and December 31, 2023, respectively.

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

1 unchanged sentence

As of December 31, 2025 and December 31, 2024, the allowance for expected losses on settlement assets was $ 7.1 million and $ 7.9 million, respectively.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations .

A reconciliation of the beginning and ending amount of allowance for expected losses is as follows for the year ended December 31, 2024:

Settlement Assets and Obligations .

A reconciliation of the beginning and ending amount of allowance for expected losses for Trade Receivables and Settlement Assets is as follows for the year ended December 31, 2025:

(in thousands) Trade Receivables Settlement Assets

2 unchanged sentences

Provision ( 2,889 ) ( 9,383 )

Reclassification ( 1,509 ) 1,509

Balance at December 31, 2025 $ ( 6,297 ) $ ( 7,069 )

3 unchanged sentences

Amounts associated with obligations expected to be satisfied within one year are reported in customer deposits and advance payments on the Company's Consolidated Balance Sheets and amounts associated with obligations expected to be satisfied after one year are reported as a component of other noncurrent liabilities on the Company's Consolidated Balance Sheets.

These payments are subsequently recognized in the Company's Consolidated Statements of Operations and Comprehensive Loss when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments.

These payments are subsequently recognized in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments.

A vendor may make an upfront payment to the Company to offset costs that the Company incurs to integrate the vendor into the Company's operations.

These upfront payments are deferred by the Company and are subsequently amortized against expense in its Consolidated Statements of Operations and Comprehensive Loss as the related costs are incurred by the Company in accordance with the agreement with the vendor.

During the year ended December 31, 2024, the Company made an investment in an equity security, carried at the cost of $ 4.8 million within other noncurrent assets.

The fair value of this security is not readily determinable.

These upfront payments are deferred by the Company and are subsequently amortized against expense in its Consolidated Statements of Operations and Comprehensive Income (Loss) as the related costs are incurred by the Company in accordance with the agreement with the vendor.

During the year ended December 31, 2025 and 2024, the Company made investments in equity securities and other permissible investments, carried at the cost of $ 8.6 million and $ 4.8 million, within other noncurrent assets on the Company's Consolidated Balance Sheets.

The fair value of the securities are not readily determinable.

Accordingly, the Company has elected to apply the measurement alternative in accordance with ASC 321 , Investments-Equity Securities , under which such investments are measured at cost, less any impairment.

Investments in unconsolidated entities are evaluated for impairment when events and circumstances indicate that the carrying value of the investment has been impaired beyond a temporary period of time.

Property and Equipment

14 unchanged sentences

The costs incurred in the preliminary stages of development are expensed as incurred.

Once an application has reached the development stage, internal and external costs incurred to develop internal-use software are capitalized and amortized using the straight-line method over the estimated useful life of the software, which generally range from two to five years .

Maintenance costs including those in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software that result in added functionality, in which case such costs are capitalized and amortized using the straight-line method over the estimated useful life of the software.

3 unchanged sentences

As of December 31, 2025 and 2024, capitalized software development costs, net of accumulated amortization, totaled $ 51.2 million and $ 48.1 million, respectively, and are included in property, equipment and software, net on the Consolidated Balance Sheets.

Amortization expense for capitalized software development costs for the years ended December 31, 2024, 2023 and 2022 was $ 11.8 million, $ 9.4 million and $ 6.9 million, respectively, and are included in depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Loss.

Amortization expense for capitalized software development costs for the years ended December 31, 2025, 2024 and 2023 was $ 16.5 million, $ 11.8 million and $ 9.4 million, respectively, and are included in depreciation and amortization on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Intangible Assets

Intangible assets are initially recorded at cost or fair value when acquired in connection with a business combination.

The carrying value of an intangible asset acquired in an asset acquisition may subsequently be increased for contingent consideration when due to the seller and such amounts can be estimated.

The portion of any unpaid purchase price that is contingent on future activities is not initially recorded by the Company on the date of acquisition.

Rather, the Company recognizes contingent consideration when it becomes probable and estimable.

Intangible assets acquired as asset acquisitions are initially recorded at cost and at fair value when acquired in connection with a business combination.

The carrying value of an intangible asset acquired in an asset acquisition may subsequently be increased for contingent consideration when due to the seller and such amounts are payable.

All of the Company's intangible assets, except goodwill and money transmission licenses, have finite lives and are subject to amortization.

9 unchanged sentences

states, the District of Columbia and two U.S.

The Company may occasionally elect to buy out all or a portion of an ISO's rights to receive future commission payments related to certain merchants.

Impairment of Long-lived Assets

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

The Company periodically reviews its long-lived assets for impairment to determine if events or changes in circumstances indicate the carrying value of an asset may not be recoverable.

For long-lived assets, except goodwill and indefinite-lived intangibles, an impairment loss is indicated when the undiscounted future cash flows estimated to be generated by the asset group are not sufficient to recover the carrying value of the asset group.

1 unchanged sentence

The Company concluded there were no indications of impairment for the years ended December 31, 2025, 2024 and 2023.

Goodwill and Other Intangible Assets .

Goodwill and Indefinite-lived Intangibles

The Company tests goodwill and indefinite-lived intangibles for impairment on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value.

The Company tests goodwill and indefinite-lived intangibles for impairment annually on October 1 st , or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value.

The test for impairment may be a qualitative or a quantitative analysis depending on the facts and circumstances associated with the reporting unit.

If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the indefinite-

lived intangibles or goodwill within the reporting unit is less than its carrying value.

Reporting units are reevaluated annually or when events occur such as a reorganization of our operating segments or business reasons resulting in material changes to how reporting units are organized and managed.

If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the indefinite-lived intangibles or goodwill within the reporting unit is less than its carrying value.

Goodwill and Other Intangible Assets for further information.

3 unchanged sentences

Finance leases, if applicable, are reported as part of property, equipment and software, net, and debt on the Company's Consolidated Balance Sheets.

Leases with a term of twelve months or less ("short-term leases") are generally not included on the Company's Balance Sheets.

Leases with a term of twelve months or less ("short-term leases") are not included on the Company's Balance Sheets.

The Company does not separate lease and non-lease components.

4 unchanged sentences

Lease expense and depreciation expense, if applicable, are recognized on a straight-line basis over the term of the lease.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations

Settlement assets and customer/subscriber account balances and the related obligations recognized on the Company's Consolidated Balance Sheets represent intermediary balances arising in the Company's settlement process for merchants and other customers.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations .

Settlement Assets and Obligations

Settlement assets and obligations recognized on the Company's Consolidated Balance Sheets represent intermediary balances arising in the Company's settlement process for merchants and other customers.

Settlement Assets and Obligations .

Debt Issuance and Modification Costs

2 unchanged sentences

Restructuring Costs

The Company's Management approved a plan to restructure the business of its wholly owned subsidiary, PayRight.

In the year ending December 31, 2023, the Company's Management approved a plan to restructure the business of its wholly owned subsidiary, PayRight.

PayRight's business activity included advancing funds to customers, which did not generate the desired financial results due to changes in the economic environment, particularly the cost of capital.

The restructuring plan included termination of the advancing business effective June 30, 2024.

The Company included costs related to this restructuring within selling, general and administrative operating expenses and depreciation and amortization within its Consolidated Statement of Operations and Comprehensive Loss for the year ended December 31, 2023.

The costs include allowance for certain advances whose recoverability was impacted by the restructuring of $ 3.5 million and $ 0.3 million for accelerated depreciation and amortization of assets of the restructured business.

Business Combinations and Asset Acquisitions

The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date.

Upon acquisition of a company, the Company determines if the transaction is a business combination, which is accounted for under the acquisition method of accounting.

Under this method, the assets acquired and liabilities assumed are recognized at their fair values on the acquisition date.

Goodwill represents the excess of the purchase price over the fair value of the net assets acquired.

The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date.

The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired

and liabilities assumed.

The fair values of the assets acquired and liabilities assumed, including earn-out provisions assumed, are determined based upon the valuation of the acquired business and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date.

The Company assesses earn-out provisions granted to employees who joined the Company upon the effective date of the acquisition for whether the earn-out represents contingent consideration, deferred consideration, or compensation expense depending on, among others, whether a requisite service period exists.

The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed.

The measurement period ends once all information is obtained, but no later than one year from the acquisition date.

1 unchanged sentence

Asset acquisition-related costs are capitalized as part of the asset or assets acquired.

Deferred Consideration

The deferred considerations related to acquisitions are recorded at the fair value on the date of the acquisition and accreted to their redemption value through interest expense.

Amounts due within 12 months under the terms of the agreement are classified as current within the Consolidated Balance Sheets.

Contingent Consideration

Contingent consideration related to the Company's business combinations are estimated based on the present value of a weighted payout probability at the measurement date using a Monte Carlo simulation model.

This valuation falls within Level 3 on the fair value hierarchy.

A change in inputs in the valuation techniques used might result in a significantly higher or lower fair value measurement than what is reported.

This valuation falls within Level 3 in the fair value hierarchy.

A change in inputs in the valuation techniques used might result in a significantly higher or lower fair value than what is reported.

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

For asset acquisitions that do not meet the definition of a business, the portion of the unpaid purchase price that is contingent on future activities is not recorded by the Company on the date of acquisition, but when it becomes probable and can be estimated.

Non-controlling Interests

Non-controlling Interest

Occasionally, the Company issues common equity and non-voting incentive units within its subsidiaries.

1 unchanged sentence

NCI is valued based on the events and methodologies including the acquisition-date fair value or the option pricing method.

To estimate the initial fair value of the incentive units, the Company utilizes future cash flow scenarios with focus on those cash flow scenarios which could result in future distributions to the NCIs.

In subsequent periods, income or loss will be attributed to an NCI based on the hypothetical liquidation at book value method utilizing the terms of the operating agreement between the Company and the NCI.

As the majority owner, the Company has call rights on the incentive units issued to the NCIs.

In subsequent periods, income or loss will be attributed to

an NCI based on the hypothetical liquidation at book value method utilizing the terms of the operating agreement between the Company and the NCI.

As the majority owner, the Company has call rights on the incentive units issued to the NCI.

These call rights can only be executed under certain circumstances and execution is always optional at the Company's discretion.

1 unchanged sentence

thus no separate accounting is required for these call rights.

Accrued Residual Commissions

Accrued residual commissions consist of amounts due to ISOs and independent sales agents based on a percentage of the net revenues generated from the Company's merchant customers referred by the respective ISO and independent sales agent.

Residual Commissions

Residual commissions consist of amounts due to ISOs and ISVs and independent sales agents based on a percentage of the net revenues generated from the Company's merchant customers referred by the respective ISO, ISV and independent sales agent.

Percentages vary based on the program type and transaction volume of each merchant.

Residual commission expenses were $ 426.6 million, $ 415.1 million and $ 396.2 million, respectively, for the years ended December 31, 2024, 2023 and 2022, and are included in costs of services in the accompanying Consolidated Statements of Operations and Comprehensive Loss.

Residual commission expenses were $ 457.5 million, $ 426.6 million and $ 415.1 million, respectively, for the years ended December 31, 2025, 2024 and 2023, and are included in costs of services in the accompanying Consolidated Statements of Operations and Comprehensive Income (Loss).

ISO Deposit and Loss Reserve

1 unchanged sentence

Through the arrangement, the Company accepts deposits on behalf of the ISO and a reserve account is established by the Company.

All amounts maintained by the Company are included in the accompanying Consolidated Balance Sheets as other noncurrent liabilities, which are directly offset by restricted cash accounts owned by the Compan y of $ 5.2 million and $ 6.4 million as of December 31, 2024 and 2023, respectively.

All amounts maintained by the Company are included in the accompanying Consolidated Balance Sheets as other noncurrent liabilities, which are directly offset by restricted cash accounts owned by the Company of $ 5.6 million and $ 5.2 million as of December 31, 2025 and 2024, respectively.

Stock-based Compensation

The Company recognizes the cost resulting from all stock-based payment transactions in the financial statements at grant date fair value.

Stock-based compensation expense is recognized over the requisite service period and is reflected in salary and

employee benefits expense on the Company's Consolidated Statements of Operations and Comprehensive Loss.

Stock-based compensation expense is recognized over the requisite service period and is reflected in salary and employee benefits expense on the Company's Consolidated Statements of Operations and Comprehensive Income (Loss).

Awards generally vest over three or four years and may not vest evenly over the vesting period.

3 unchanged sentences

Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period.

The Company had no liability classified awards for the year ended December 31, 2024, 2023, and 2022.

Stock Options

21 unchanged sentences

The Company reassesses the probability of vesting at each reporting period and prospectively adjusts stock-based compensation expense based on its probability assessment.

Additionally, if performance goals are set or reset on an

annual basis, compensation cost is recognized in any reporting period only for performance-based restricted stock awards in which the performance goals have been established and communicated to the award recipient.

Additionally, if performance goals are set or reset on an annual basis, compensation cost is recognized in any reporting period only for performance-based restricted stock awards in which the performance goals have been established and communicated to the award recipient.

Non-voting Incentive Units

7 unchanged sentences

The model requires management to make a number of assumptions, including the fair value of the Company’s Common Stock, expected volatility, expected term, risk-free interest rate, and expected dividends.

The Company records the resulting compensation expense in the Consolidated Statements of Operations and Comprehensive Loss over each three-month offering period.

The Company records the resulting compensation expense in the Consolidated Statements of Operations and Comprehensive Income (Loss) over each three-month offering period.

Stock-based Compensation .

3 unchanged sentences

The equity accounts that were originally credited for the original share issuance, Common Stock and additional paid-in capital, remain intact.

Shareholders' Deficit .

Stockholders' Deficit .

If the treasury shares are ever reissued in the future, proceeds in excess of repurchased cost will be credited to additional paid-in capital.

2 unchanged sentences

Earnings (Loss) per Share

Basic EPS is computed by dividing net income (loss) available to Common Shareholders by the weighted-average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities.

Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using the more dilutive of the two-class method or if-converted method.

Basic EPS is computed by dividing net income (loss) available to Common Stockholders by the weighted-average number of shares of Common Stock outstanding during the period, excluding the effects of any potentially dilutive securities.

Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock, using either the treasury stock method or if-converted method, where appropriate.

Diluted EPS excludes potential shares of Common Stock if their effect is anti-dilutive.

If there is a net loss in any period, basic and diluted EPS are computed in the same manner.

Shareholders' Deficit .

Stockholders' Deficit .

The Company accounts for income taxes under the asset and liability method.

2 unchanged sentences

A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings.

The Financial Accounting Standards Board, or FASB, Staff has provided additional guidance to address the accounting for the effects of the provisions related to the taxation of Global Intangible Low-Tax Income noting that companies should make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse in future years or to

include the tax expense in the year it is incurred.

The Company has made a policy election to recognize such taxes as current period expenses when incurred.

14 unchanged sentences

Level 3 – Unobservable inputs that are not corroborated by market data.

The fair values of the Company's merchant portfolios, assets and liabilities acquired in mergers and business combinations, and contingent consideration are primarily based on Level 3 inputs and are generally estimated based upon valuation techniques that include discounted cash flow analysis based on cash flow projections or Monte Carlo simulations and, for years beyond the projection period, estimates based on assumed growth rates.

include discounted cash flow analysis based on cash flow projections or Monte Carlo simulations and, for years beyond the projection period, estimates based on assumed growth rates.

Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others.

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 subsidiaries of the Company is Indian Rupee (i.e.

local currency of Republic of India).

The functional currency of the Canadian subsidiary 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

Most of the Company's merchant customers were referred to the Company by an ISO or other reseller partners.

If the Company's agreement with an ISO allows the ISO to have merchant portability rights, the ISO can move the underlying merchant relationships to another merchant acquirer upon notice to the Company and completion of a "wind down"

For the years ended December 31, 2024, 2023 and 2022, merchants referred by one ISO organization with merchant portability rights generated revenue within the Company's SMB Payments reportable segment that represented approximately 6 %, 15 % and 21 %, respectively, of the Company's consolidated revenues.

As of December 31, 2024, the Company's settlement assets and customer /subscriber account balances of $ 940.8 million includes cash and cash equivalents of $ 924.2 million related to customer account balances which are maintained in FDIC insured accounts with certain FIs.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations .

For the years ended December 31, 2025, 2024 and 2023, merchants referred by one ISO organization with merchant portability rights generated revenue within the Company's Merchant Solutions reportable segment that represented approximately 5 %, 6 % and 15 %, respectively, of the Company's consolidated revenues.

As of December 31, 2025, the Company's settlement assets balance of $ 1.3 billion includes cash and cash equivalents of $ 1.3 billion related to customer account balances which are maintained in FDIC insured accounts with certain FIs.

Settlement Assets and Obligations .

A majority of the Company's cash and restricted cash (including subscriber account balances) is held in certain FIs, substantially all of which is in excess of FDIC limits.

3 unchanged sentences

Recently Adopted Accounting Standards

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires incremental reportable segment disclosures, primarily about significant segment expenses.

The amendments also require entities with a single reportable segment to provide all disclosures required by these amendments, and all existing segment disclosures.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company has adopted this guidance for the year ended December 31, 2024.

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

Recently Issued Accounting Standards Pending Adoption

Profit Interest ASU 2024-01

In March 2024, the FASB issued ASU 2024-01, Profit Interest and Similar Awards ("ASU 2024-01"), to improve GAAP by adding an illustrative example to demonstrate how an entity should apply the scope in paragraph 718-10-15-3 to determine whether profit interest and similar awards should be accounted for in accordance with Topic 718, Compensation- Stock

Compensation.

This guidance is effective for annual and interim periods beginning after December 15, 2024.

Adoption of this standard did not have any significant impact on results of operations, financial position or cash flows.

Income Taxes ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvement to Income Tax Disclosures, to enhance the transparency and decision usefulness of income tax disclosures.

The guidance includes improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

Profit Interest ASU 2024-01

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The Company is in the process of evaluating the potential effects this guidance will have.

Improvements to Income Tax Disclosures to enhance income tax disclosures primarily related to the effective tax rate reconciliation and income taxes paid disclosures.

This guidance requires disclosure of specific categories in the effective tax rate reconciliation and additional information on reconciling items meeting a quantitative threshold.

In addition, the amended guidance requires disaggregating income taxes paid (net of refunds received) by federal, state, and foreign taxes.

It also requires disaggregating individual jurisdictions in which income taxes paid (net of refunds received) are above a quantitative threshold.

The amended guidance is effective for annual periods beginning after December 15, 2024.

We adopted this guidance prospectively for the annual period ending December 31, 2025.

For additional information, see Note 11.

Income Taxes .

Adoption of this standard did not have any significant impact on results of operations, financial position or cash flows.

Recently Issued Accounting Standards Pending Adoption

Disaggregation of Income Statement Expenses ASU 2024-03

4 unchanged sentences

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

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 amendment 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.

(Canada), and its subsidiary Rentmoola Payment Solutions Ltd (United Kingdom) (jointly referred as "Letus business").

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 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 .

The total purchase consideration was $ 8.8 million, consisting of $ 4.4 million in cash consideration funded by the Company’s cash flows net of cash acquired, deferred consideration of $ 4.3 million and contingent consideration of $ 0.1 million.

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 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 $ 0.5 million for the twelve months ended December 31, 2025.

December 31, 2025, total deferred consideration was $ 4.7 million, $ 1.1 million included in accounts payable and accrued expenses and $ 3.6 million included in noncurrent liabilities on the Consolidated Balance Sheets.

Results for the Letus business since the acquisition are included within the Treasury Solutions segment, which includes $ 1.0 million in revenue and a net loss of $ 1.0 million for the twelve months ended December 31, 2025.

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

(in thousands)

Consideration:

Deferred consideration (2)

Contingent consideration (3)

cash acquired ( 175 )

Total purchase consideration, net of cash acquired $ 8,838

Recognized amounts of assets acquired and liabilities assumed (4) :

Accounts receivable $ 149

Prepaid expenses 229

Property, equipment and software 8

Goodwill 6,070

Intangible assets:

Customer relationships 1,555

Trademarks 480

Technology 706

Accounts payable and accrued expenses ( 359 )

Total purchase consideration $ 8,838

(1) Cash at closing net of working capital adjustments.

(2) The fair value of the deferred 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 deferred 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 deferred consideration payments over all iterations of the simulation.

(3) The contingent consideration represents the fair value of the share of net operating loss carryforwards owed to the seller in the future.

(4) Includes deferred tax asset of $ 3.8 million which has a full valuation allowance.

Goodwill of $ 6.1 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations.

There was no goodwill deductible for income tax purposes.

The goodwill was 100 % allocated to the Company's Treasury Solutions reportable segment.

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 Income (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 its merger subsidiary, acquired all 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 reportable segment.

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

The total purchase consideration was $ 7.2 million, consisting of $ 3.4 million in cash consideration funded by the Company's cash flows net of cash acquired, and contingent consideration of $ 3.8 million for contractual earn-outs and additional contingent consideration.

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 purchase price is considered preliminary pending finalization of working capital adjustments.

The contingent consideration for the contractual earn-outs was recorded at the fair value of $ 3.9 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 December 31, 2025, total contingent consideration of $ 3.9 million is recorded in noncurrent liabilities on the Consolidated Balance Sheets.

Results for the Sila business since the acquisition are included within the Treasury Solutions reportable segment, which includes $ 0.3 million in revenue and a net loss of $ 0.6 million for the twelve months ended December 31, 2025.

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

(in thousands)

Consideration:

Contingent consideration (2)(4)

cash acquired ( 100 )

Total purchase consideration, net of cash acquired $ 7,230

Recognized amounts of assets acquired and liabilities assumed:

Accounts receivable (4)

Prepaid expenses (4)

Other noncurrent assets (3)(4)

Intangible assets:

Trademarks (4)

Technology (4)

Accounts payable and accrued expenses (4)

Customer deposits ( 46 )

Fair value of net assets acquired $ 11,219

Estimated bargain purchase gain (4)

(1) Cash at closing net of working capital adjustments.

(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.

(3) Includes a deferred tax asset of $ 9.5 million.

(4) During the fourth quarter of 2025, the Company recorded measurement period adjustments due to additional information received that existed on the acquisition date.

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 estimated bargain purchase

gain is recorded in other income, net , in the Consolidated Statements of Operations and Comprehensive Income (Loss) for twelve months ended December 31, 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 Consolidated Statements of Operations and Comprehensive Income (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 October 1, 2025, Priority's subsidiary, Priority DMS, LLC, ("the Acquiring Entity") entered into the asset purchase and contribution agreement with DMSJV, LLC ("DMS"), to acquire substantially all of the assets of DMS, including all voting interests.

DMS provides credit card processing solutions to automotive dealerships via marketing and selling card and ACH processing services and ancillary services including POS systems, payment gateways, payment processing and authorization, clearing, and settlement for credit card, debit and ACH transactions, which will supplement the Company's Merchant Solutions reportable segment.

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

The total purchase consideration was $ 57.9 million, consisting of $ 31.5 million in cash consideration funded by the Company's term loan facility, deferred consideration of $ 2.8 million, contingent consideration of $ 17.1 million for contractual earn-outs and $ 6.6 million in non-voting subsidiary shares issued to the sellers.

Earn-outs will be paid as a percentage of gross profit when certain thresholds are met.

The purchase price is considered preliminary pending finalization of working capital adjustments.

The contingent consideration for the contractual earn-outs was recorded at the fair value of $ 17.1 million on the acquisition date.

The contingent consideration will be paid when an initial cumulative threshold for gross profit is met, subject to terms and conditions noted within the agreement, over a period of at least four years and total payments will not exceed $ 22.5 million.

As of December 31, 2025, total contingent consideration of $ 17.1 million is recorded in noncurrent liabilities on the Consolidated Balance Sheets.

Results for the DMS since the acquisition are included within the Merchant Solutions reportable segment, which includes $ 2.8 million in revenue and a net loss of $ 0.3 million for the twelve months ended December 31, 2025.

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

(in thousands)

Consideration:

Cash $ 31,500

Contingent consideration (2)

Common equity of the Acquiring Entity (3)

Deferred consideration (1)

Total purchase consideration, net of cash acquired $ 57,929

Recognized amounts of assets acquired and liabilities assumed:

Accounts receivable $ 11

Inventory 145

Other noncurrent assets 7

Goodwill 34,159

Intangible assets:

Customer relationships 17,187

Trademarks 3,222

Technology 3,277

Accounts payable and accrued expenses ( 79 )

Total purchase consideration $ 57,929

(1) The deferred consideration represents the fair value of the amount to be remitted upon direction of the seller no later than four years from the acquisition date.

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

The fair value was estimated to be the average present value of the contingent consideration payments over all iterations of the simulation.

(3) The fair value determination for the Class B units utilized an option pricing model.

The seller may request to convert 50 % of the Class B Units to shares in the Company no later than five years from the acquisition date.

Goodwill of $ 34.2 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations.

There was no goodwill deductible for income tax purposes.

The goodwill was 100 % allocated to the Company's Merchant Solutions reportable segment.

The Company incurred $ 0.2 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 Income (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 acquisition under which the cost of the acquisition

was allocated to the acquired assets based on relative fair values.

As an asset acquisition, 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.

Acquisitions occurred in prior years

2 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 Payables platform offering bill pay and instant access to working capital to its customers and will complement the Company's existing supplier-funded Payables 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.

27 unchanged sentences

(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.

The goodwill was 100 % allocated to the Company's Payables reportable segment.

Disaggregation of Revenues

15 unchanged sentences

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

SMB $ 595,104 $ — $ 6,293 $ 12,150 $ 613,547

B2B 75,822 — 13,281 — 89,103

Enterprise 1,989 130,123 48,336 — 180,448

Merchant Solutions $ 625,232 $ — $ 4,620 $ 12,217 $ 642,069

Payables 84,984 — 15,888 — 100,872

Treasury Solutions 5,142 159,169 51,468 — 215,779

Eliminations ( 4,443 ) — ( 1,268 ) — ( 5,711 )

2 unchanged sentences

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

SMB $ 564,356 $ — $ 6,225 $ 12,670 $ 583,251

B2B 31,114 — 10,042 — 41,156

Enterprise 410 98,142 33,634 — 132,186

Merchant Solutions $ 595,104 $ — $ 6,293 $ 12,150 $ 613,547

Payables 75,822 — 13,281 — 89,103

Treasury Solutions 1,989 130,123 48,336 — 180,448

Eliminations ( 2,504 ) — ( 892 ) — ( 3,396 )

2 unchanged sentences

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

SMB $ 549,646 $ — $ 3,150 $ 9,441 $ 562,237

B2B 3,390 — 15,500 — 18,890

Enterprise 1 71,536 10,977 — 82,514

Merchant Solutions $ 564,356 $ — $ 6,225 $ 12,670 $ 583,251

Payables 31,114 — 10,042 — 41,156

Treasury Solutions 410 98,142 33,634 — 132,186

Eliminations ( 675 ) ( 5 ) ( 301 ) — ( 981 )

6 unchanged sentences

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 $ 6.2 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were immaterial for the year ended December 31, 2022.

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations

SMB Payments Segment

In the Company's SMB Payments reportable segment, funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were $ 1.1 million, $ 6.2 million and $ 0.5 million for the years ended December 31, 2025, 2024 and 2023,respectively.

Settlement Assets and Obligations

Settlement assets and obligations include, 1) funds due from merchants arising from settlement of funds for sales and credits between card issuers and merchants 2) card settlement funds due from networks due to timing and its related obligations, and 3) Customer/Subscriber account balances and related obligations resulting from licensed money transmitter services.

Card settlements due from merchants, net

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 related to these funds are not liabilities of the Company.

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

Member banks held merchant funds of $ 106.2 million and $ 98.0 million at December 31, 2024 and 2023, respectively.

Exception items that become the liability of the Company are recorded as merchant losses, a component of costs of services in the 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 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 years ended December 31, 2024, 2023 and 2022 were $ 11.0 million, $ 5.2 million and $ 4.1 million, respectively.

B2B Payments Segment

In the Company's B2B Payments segment, the Company earns revenues from certain of its services by processing transactions for FIs and other business customers.

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 as 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 in bank-owned FBO accounts are not assets of the Company.

As such, the associated obligations related to these funds 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 Consolidated Balance Sheets.

Bank-owned FBO accounts held funds of $ 64.8 million and $ 69.0 million at December 31, 2024 and 2023, respectively.

Company-owned bank accounts held $ 1.6 million and $ 1.2 million at December 31, 2024 and 2023, respectively, which are included in restricted cash and settlement obligations in the Company's 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 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 years ended December 31, 2024, 2023 and 2022 were $ 0.6 million, $ 1.0 million, and $ 0.3 million, respectively.

The Company also accepts card payments from its B2B Payments segment customers and processes disbursements to their vendors within the Plastiq business.

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 in the Company's Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover.

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

Expenses for merchant losses net of recoveries for the years ended December 31, 2025, 2024 and 2023 were $ 0.4 million, $ 0.9 million and $ 1.0 million, respectively.

Card settlements due from networks and Dues to Customers’ Payees

As part of the Payables service offering:

• Priority accepts card payments for its customers and processes disbursements to their vendors (customers’ payees).

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.

Enterprise Payments Segment

In the Company's Enterprise Payments segment revenue is derived primarily from enrollment fees, monthly subscription fees and transaction-based fees from licensed money transmission services.

As part of its licensed money transmission services, the Company accepts deposits from consumers and subscribers which are held in bank accounts maintained by the Company on behalf of consumers and subscribers.

After accepting deposits, the Company is allowed to invest available balances in these accounts in certain permitted investments, and the return on such investments contributes to the Company's net cash inflows.

These balances are payable on demand.

As such, the Company recorded these balances and related obligations as current assets and current liabilities.

The nature of these balances are cash and cash equivalents, but they are not available for day-to-day operations of the Company.

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 Consolidated Balance Sheets.

Exception items that become the liability of the Company are recorded as merchant losses, a component of cost of revenue in the Company's Consolidated Statements of Operations and Comprehensive Income (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 year ended December 31, 2024 was $ 0.4 million.

Expenses for merchant losses for the years ended December 31, 2023 and 2022 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 $ 22.6 million and $ 19.6 million and at December 31, 2024 and 2023, respectively.

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

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.

Balances in the bank-owned FBO accounts and related obligations are not considered assets and obligations of the Company.

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

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

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, the District of Columbia, and 2 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 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.

As such, the Company recognized these balances and related obligations on its balance sheet.

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 Consolidated Balance Sheets.

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 Consolidated Statement of Cash Flows.

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

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

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

1 unchanged sentence

Card settlements due from merchants (1)(2)

$ 2,455 $ 2,587

Card settlements due from networks 16,092 12,307

Other settlement assets — 1,730

Customer/Subscriber Account Balances:

Cash and cash equivalents 924,174 744,696

Total settlement assets and customer/subscriber account balances $ 940,798 $ 756,475

Settlement and Customer/Subscriber Account Obligations:

Subtotal $ 18,547 $ 16,624

MTL Customer cash and cash equivalents (restricted in nature) (3)

1,252,349 924,174

MTL Short-term investments 25,000 —

Total settlement assets $ 1,295,896 $ 940,798

Settlement Obligations:

Customer account obligations $ 1,244,975 $ 897,497

3 unchanged sentences

20,257 16,039

Total settlement and customer/subscriber account obligations $ 940,213 $ 755,754

Total settlement obligations $ 1,297,263 $ 940,213

(1) Allowance for estimated losses was $ 7.1 million and $ 7.9 million as of December 31, 2025 and 2024, respectively.

(2) Card settlements due from networks includes $ 12.3 million and $ 8.2 million as of December 31, 2024 and 2023, respectively, of related assets and remainder are included in restricted cash on our Consolidated Balance Sheets.

(2) Excludes merchant funds held at member banks of $ 103.9 million and $ 106.2 million on December 31, 2025 and 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 $ 50.3 million and $ 22.6 million at December 31, 2025 and 2024, respectively.

(4) Includes $ 16.1 million and $ 12.3 million as of December 31, 2025 and 2024, respectively, of card settlements due from networks and the remainder is included in restricted cash on our 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 Consolidated Balance Sheets.

Bank-owned FBO accounts held funds of $ 151.8 million and $ 90.3 million at December 31, 2025 and 2024, respectively.

Notes Receivable

1 unchanged sentence

The notes bear a weighted-average interest rate of 13.6 % and 16.9 % as of December 31, 2025 and 2024, respectively.

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.

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

As of December 31, 2025 and 2024, the Company had no allowance for doubtful notes receivable.

The following table provides a reconciliation for activity within the notes receivable as of December 31, 2025:

(in thousands)

Balance at January 1, 2025 $ 8,557

Principal payments ( 7,766 )

Advances during the period 18,900

Balance at December 31, 2025 $ 19,691

As of December 31, 2025, the principal payments for the Company's notes receivables are due as follows:

19 unchanged sentences

During the year ended December 31, 2025 and 2024, certain fully depreciated assets were removed from service.

Goodwill and Other Intangible Assets

Goodwill and Intangible Assets

The Company records goodwill upon acquisition of a business when the purchase price is greater than the fair value assigned to the underlying separately identifiable tangible and intangible assets acquired and the liabilities assumed.

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

The Company's goodwill relates to the following reportable segments:

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

SMB Payments $ 124,139 $ 124,139

Enterprise Payments 244,712 244,712

Plastiq (B2B Payments) 7,240 7,252

Merchant Solutions $ 158,298 $ 124,139

Treasury Solutions 251,103 244,712

Payables 7,240 7,240

Total $ 416,641 $ 376,091

2 unchanged sentences

Balance at January 1, 2025 $ 376,091

Plastiq adjustment ( 12 )

Letus business combination 6,070

DMS business combination 34,159

Foreign currency translation adjustment 321

Balance at December 31, 2025

The Company evaluates goodwill for impairment annually on October 1 or whenever circumstances or events make it more likely than not impairment may have occurred.

The Company may test for goodwill impairment using an optional qualitative analysis or proceed directly with a quantitative analysis.

If the optional qualitative analysis is performed, the Company assesses whether it is more likely than not the fair value is less than its carrying amount.

For the purpose of the goodwill impairment analysis, the Company determined its reporting units were Enterprise Payments, SMB Payments, and Plastiq, a component of the B2B Payments operating segment, as allowed by ASC 350.

Electing to perform the optional qualitative analysis as of October 1, 2024, no indicators of impairment were identified.

As of December 31, 2024, the Company is not aware of any triggering events that have occurred since October 1, 2024.

There were no impairment losses for the years ended December 31, 2024, 2023 or 2022.

Other Intangible Assets

At December 31, 2024 and 2023, other intangible assets consisted of the following:

On October 1, 2025, the Company performed the quantitative assessment for goodwill impairment as provided by ASC 350 – Intangibles-Goodwill and Other for all reporting units.

The quantitative assessment considered both the market approach, which estimates fair value using market multiples of comparable companies and transaction multiples of recent transactions, and the income approach, which estimates fair value using a discounted cash flow utilizing forecasted projections discount rates based on the reporting unit’s weighted average cost of capital.

These estimates change from year to year based on operating results, market conditions and other factors, and could materially impact the determination of fair value and potential goodwill impairment for each reporting unit.

The quantitative assessment is sensitive to changes in estimates and assumptions utilized, the most sensitive of which is the discount rate.

The results of the quantitative impairment analysis indicated the fair values of the reporting units exceeded their carrying values and therefore, there was no goodwill impairment.

As of December 31, 2025, the Company is not aware of any triggering events which have occurred since October 1, 2025.

There was no impairment of goodwill for the years ended December 31, 2024 or 2023.

Intangible Assets

At December 31, 2025 and 2024, intangible assets consisted of the following:

(in thousands, except weighted-average data) December 31, 2025 Weighted-average

Gross Carrying Value Accumulated Amortization Net Carrying Value

Other intangible assets:

Intangible assets:

ISO and referral partner relationships $ 223,016 $ ( 63,701 ) $ 159,315 13.8

3 unchanged sentences

Technology 63,602 ( 32,684 ) 30,918 8.5

Non-compete agreements 3,390 ( 3,390 ) — 0.0

Trade names 13,329 ( 4,023 ) 9,306 10.6

1 unchanged sentence

2,100 — 2,100

Total gross carrying value $ 589,801 $ ( 348,927 ) $ 240,874 9.5

Total $ 702,724 $ ( 387,534 ) $ 315,190 9.4

(1) These assets have an indefinite useful life.

11 unchanged sentences

2,100 — 2,100

Total gross carrying value $ 580,103 $ ( 306,753 ) $ 273,350 9.7

Total $ 589,801 $ ( 348,927 ) $ 240,874 9.5

(1) These assets have an indefinite useful life.

Fully amortized intangible assets are retained in intangible assets, net, until removed from service.

During the year ended December 31, 2025, certain fully amortized intangible assets were removed from service.

Years Ended December 31,

49 unchanged sentences

Accrued compensation 5,581 2,570

Contingent consideration, current portion 3,891 5,951

Contingent/deferred consideration, current portion 1,163 3,891

Accounts payable (1)

19,551 14,590

Total accounts payable and accrued expenses $ 70,636 $ 62,149

(1) The current portion of the operating lease obligation is included in this amount.

Debt Obligations

2 unchanged sentences

2024 Credit Agreement

Term facility - matures May 16, 2031, interest rate of 9.11 % at December 31, 2024

Term facility - matures July 31, 2032, interest rate of 7.47 % and 9.11 % at December 31, 2025 and 2024, respectively

$ 1,020,000 $ 945,537

Revolving credit facility - $ 70.0 million line matures May 16, 2029, interest rate of 8.61 % at December 31, 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, original Maturity April 27, 2026, interest rate of 10.20 % at December 31, 2023

Revolving credit facility - $ 100.0 million line matures July 31, 2030, interest rate of 7.22 % and 8.61 % at December 31, 2025 and 2024, respectively

Residual Finance credit facility

Delayed draw term facility - matures August 18, 2031, interest rate of 9.98 % at December 31, 2025

Total debt obligations 1,055,394 945,537

4 unchanged sentences

Based on terms and conditions existing at December 31, 2025, future minimum principal payments for long-term debt are as follows:

(in thousands) Revolving Credit Facility

December 31, Term Facility Total Principal Due

(in thousands) Residual Finance credit facility 2024 Credit Agreement Revolving Credit Facility

December 31, Total Principal Due

2026 $ — $ — $ — $ —

9 unchanged sentences

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 11.

Redeemable Securities ).

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 which was fully redeemed in 2024.

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.

3 unchanged sentences

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.

All of the assets of the company are pledged as collateral for the credit facilities under the 2024 Credit Agreement.

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 Company is 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 December 31, 2024, the Company was in compliance with the covenants in the 2024 Credit Agreement.

First Amendment to the 2024 Credit Agreement

On November 21, 2024, the Company modified its existing Term Facility.

The agreement increased the principal balance by $ 115.0 million to $ 950.0 million and increased the quarterly principal amortization payment from $ 2.1 million to $ 2.4 million.

There were no other significant modifications to the Credit Agreement.

Proceeds from this amendment were used to redeem the remaining balance of the Company's redeemable senior preferred stock (see Note 11.

Redeemable Securities ).

The Company determined on a creditor-by-creditor basis that the 2024 Credit Agreement was a debt modification.

The Company expensed $ 1.0 million of previously unamortized fees and $ 0.7 million of debt issuance costs related to the refinancing which is reported in debt extinguishment and modification in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss).

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 2021 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 2021 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.

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 Consolidated Statements of Operations and Comprehensive Income (Loss).

Also reported in debt extinguishment and modification on the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) is the acceleration and payout of $ 6.9 million of deferred consideration for Plastiq (see Note 16.

Commitments and Contingencies ) and the $ 0.8 million gain on the extinguishment of a loan.

Third Amendment to the 2024 Credit Agreement

On October 1, 2025, the Company amended the 2024 Credit Agreement to incorporate the following:

• Term facility:

The amendment increased the principal balance of the term loan from $ 1.0 billion to $ 1.04 billion through a single lender draw and increased quarterly principal payments from $ 2.5 million to $ 2.6 million.

All other material terms of the term facility remained unchanged.

Proceeds from the increase in the term facility, net of fees and accrued interest, were approximately $ 34.7 million and were primarily used to fund a portion of the acquisition of 100 % of the assets of DMS, see Note 2.

Acquisitions , as well as related transaction fees and expenses.

In accordance with ASC 470, the Company determined that the amendment represents a debt modification.

As the terms of the

Credit Agreement remained unchanged other than the increase in principal, previously unamortized debt issuance costs and original issue discount continue to be amortized over the remaining term of the loan.

Debt issuance costs and original issue discount associated with the incremental borrowing were capitalized as a reduction of the related debt balance and are being amortized over the remaining term of the loan.

The amendment was not considered a troubled debt restructuring.

Residual Finance Credit Facility

On August 18, 2025, a wholly owned subsidiary of the Company not restricted by the 2024 Credit Agreement, Priority Finance SPV, LLC ("Finance SPV") 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 Finance SPV has drawn $ 35.4 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

5 unchanged sentences

$ 90,654 $ 88,948 $ 76,108

(1) Included in this amount is $ 4.3 million, $ 1.7 million and $ 0.9 million of interest expense related to the accretion of contingent considerations from acquisitions for December 31, 2024, 2023 and 2022.

(1) Included in this amount is $ 2.7 million, $ 4.3 million and $ 1.7 million of interest expense related to the accretion of deferred consideration for the years ended December 31, 2025, 2024 and 2023.

(2) Interest expense included amortization of deferred financing costs and debt discounts of $ 1.8 million, $ 2.7 million and $ 3.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Redeemable Senior Preferred Stock and Warrants

On April 27, 2021, the Company entered into an agreement pursuant to which it issued 150,000 shares of redeemable senior preferred stock, par value $ 0.001 per share, and a detachable warrant to purchase 1,803,841 shares of the Company's Common Stock, for gross proceeds of $ 150.0 million, less a $ 5.0 million discount and $ 5.5 million of issuance costs.

The agreement also provided the Company the option to issue an additional 50,000 shares of redeemable senior preferred stock upon the closing of the Finxera acquisition for $ 50.0 million, less a $ 0.6 million discount and within 18 months after the issuance of those additional shares, subject to the satisfaction of certain customary closing conditions.

The Company was also provided with the option to issue an additional delayed 50,000 shares at a purchase price of $ 50.0 million, less a $ 0.6 million discount, subject to the satisfaction of certain customary closing conditions.

Of the total net proceeds of $ 139.5 million, $ 131.4 million was allocated to the redeemable senior preferred stock, $ 11.4 million was allocated to additional paid-in capital for the warrants and $ 3.3 million was allocated to noncurrent assets for the committed financing put right.

On September 17, 2021, the Company issued an additional 75,000 shares of redeemable senior preferred stock for $ 75.0 million, less a $ 0.9 million discount, $ 0.7 million of ticking fees and $ 1.9 million of issuance costs.

Upon issuance of these additional shares, the $ 3.3 million that was previously allocated to noncurrent assets for the committed financing put right was reclassified to the redeemable senior preferred stock.

On May 16, 2024, the Company used proceeds totaling $ 170.0 million from the refinancing (see Note 10.

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 as of the date of redemption.

On November 21, 2024, the Company used $ 113.3 million of the $ 115.0 million from Amendment 1 to the 2024 Credit agreement (see Note 10.

Debt Obligations ) to redeem the remaining balance of the outstanding redeemable preferred stock.

The redemption consisted of $ 88.1 million of redeemable senior preferred stock, $ 22.6 million for accumulated unpaid dividend, and $ 1.5 million of cash dividend and $ 1.1 million of accumulated unpaid divided for the period of October 1, 2024 through November 21, 2024.

The redeemable senior preferred stock ranked senior to the Company's Common Stock, equal with any other class of the Company's stock designated as being ranked on a parity basis with the redeemable senior preferred stock and junior to any other class of the Company's stock, including preferred stock, that is designated as being ranked senior to the redeemable senior preferred stock, with respect to the payment and distribution of dividends, the purchase or redemption of the Company's stock and the liquidation, winding up of and distribution of assets of the Company.

The redeemable senior preferred stock did not meet the definition of a liability pursuant to ASC 480, Distinguishing Liabilities from Equity , as it is redeemable upon the occurrence of events that are not solely within the Company's control.

Therefore, the Company classified the redeemable senior preferred stock as temporary equity and was accreting the carrying amount to its full redemption amount from the date of issuance to the earliest redemption date using the effective interest method.

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

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

Redeemable senior preferred stock $ — $ 225,000

Accumulated unpaid dividend — 43,498

Dividend payable — 7,027

Redemption value — 275,525

unamortized discounts and issuance costs — ( 16,920 )

Redeemable senior preferred stock, net of discounts and issuance costs $ — $ 258,605

The following table provides a reconciliation of the beginning and ending carrying amounts of the redeemable senior preferred stock for the periods presented:

(in thousands) Shares Amount

January 1, 2023 225 $ 235,579

Unpaid dividend on redeemable senior preferred stock — 18,000

Accretion of discounts and issuance cost — 3,340

Cash portion of dividend and ticking fee outstanding at the end of the year — 7,027

Payment of cash portion of dividend and ticking fee outstanding at December 31, 2022 — ( 5,341 )

December 31, 2023 225 $ 258,605

Payment of cash portion of dividend and ticking fee outstanding at December 31, 2023 — ( 7,027 )

Accretion of discounts and issuance cost — 16,920

Redemption of senior preferred stock and accumulated dividend ( 225 ) ( 268,498 )

December 31, 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 %) will be 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 %.

All other terms in the agreement were unchanged.

For the year ended December 31, 2024, SOFR is the reference rate for calculation of the dividend.

The dividend rate is subject to future increases if the Company doesn't comply with the minimum cash payment requirements outlined in the agreement, which includes required payments of dividends, required payments related to redemption or required prepayments.

The dividend rate may also increase if the Company fails to obtain the required shareholder approval for a forced sale

transaction triggered by investors or if an event of default as outlined in the agreement occurs.

The dividend rate as of December 31, 2023, was 17.7 %.

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

(in thousands) Year Ended December 31, 2024 Year Ended December 31, 2023

Dividends paid in cash (1)

Debt Covenants

All of the assets of the company are pledged as collateral for the credit facilities under the 2024 Credit Agreement.

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 at quarter end, the Company is 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, 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 December 31, 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 Finance SPV 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 December 31, 2025, Finance SPV was in compliance with the restrictions in the agreement.

Components of income before income taxes were as follows:

(in thousands) For the Years Ended December 31,

2025 2024 2023

Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock 11,059 18,000

Dividends declared $ 27,678 $ 44,404

(1) Included in this amount is $ 0.0 million and $ 7.0 million of dividends outstanding as of December 31, 2024 and 2023 respectively.

The following table presents cumulative dividends in arrears in aggregate and per-share:

(in thousands, except per share amounts) Year Ended December 31, 2024 Year Ended December 31, 2023

Cumulative preferred dividends in arrears $ — $ 43,498

Redeemable senior preferred stock, outstanding — 225

Cumulative preferred dividends in arrears, per share $ — $ 193.3

On April 27, 2021 the Company issued warrants to purchase up to 1,803,841 shares of the Company's Common Stock, par value $ 0.001 per share, at an exercise price of $ 0.001 .

The exercise price and the number of shares issuable upon exercise of the warrants are subject to certain adjustments from time to time on the terms outlined in the warrants.

These warrants were exercisable upon issuance.

In connection with the issuance of the warrants, the Company entered into an agreement pursuant to which it agreed to provide certain registration rights with respect to the common shares issuable upon exercise of the warrants.

Under this agreement, the holders of the related shares of Common Stock were granted piggyback rights to be included in certain underwritten offerings of Common Stock and the right to demand a shelf registration of the shares of Common Stock issued upon exercise of the warrants.

As of December 31, 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 Consolidated Balance Sheet.

US $ 45,327 $ 35,834 $ 5,255

Foreign 952 1,447 1,897

Total income before income taxes $ 46,279 $ 37,281 $ 7,152

Components of consolidated income tax expense were as follows:

11 unchanged sentences

Total deferred income tax (benefit) expense $ ( 12,153 ) $ ( 2,194 ) $ ( 6,086 )

Total income tax expense $ 13,266 $ 8,463 $ 5,350

Total income tax (benefit) expense $ ( 9,402 ) $ 13,266 $ 8,463

The Company's consolidated effective income tax rate was ( 20.3 )% for the year ended December 31, 2025, compared to a consolidated effective income tax rate of 35.6 % for the year ended 2024.

For the year ended December 31, 2023, the Company's consolidated effective income tax benefit rate was 118.3 %.

The effective rate for December 31, 2024 differed from the statutory rate of 21% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

The effective rate for December 31, 2025 differed from the statutory rate of 21% primarily due to a decrease in the valuation allowance against certain business interest carryover deferred tax assets.

The effective rate for December 31, 2024 differed from the statutory federal rate of 21% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

The effective rate for December 31, 2022, differed from the statutory federal rate of 21% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets and the finalization of prior estimates of certain intangible deferred tax liabilities resulting from the Finxera acquisition.

The following table provides a reconciliation of the consolidated income tax expense at the statutory U.S.

federal tax rate to actual consolidated income tax expense:

(in thousands) For the Years Ended December 31,

2024 2023 2022

The effective rate for December 31, 2023, differed from the statutory federal rate of 21% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

The following is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate:

(in thousands) December 31, 2025

Rate Recognition Amount Percent

US federal statutory expense (benefit) 9,719 21.0 %

State and local income taxes, net of federal benefit (1)

Foreign tax effects ( 83 ) ( 0.2 ) %

Tax credits ( 425 ) ( 0.9 ) %

Changes in valuation allowance ( 18,347 ) ( 39.6 ) %

Nontaxable items

Stock-based compensation ( 826 ) ( 1.8 ) %

Non-taxable compensation 886 1.9 %

Bargain purchase gain ( 838 ) ( 1.8 ) %

Other non-taxable items 238 0.5 %

Uncertain tax positions ( 67 ) ( 0.1 ) %

Other adjustments

Noncontrolling interest ( 596 ) ( 1.3 ) %

Other miscellaneous ( 99 ) ( 0.2 ) %

Income tax expense (benefit) $ ( 9,402 ) ( 20.3 ) %

(1) The states that contributed to the majority (greater than 50%) of the tax effect in this category were California, Maryland, and Pennsylvania.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the following is a reconciliation of the difference between the effective income tax rate and the federal statutory tax rate:

(in thousands)

federal statutory expense $ 7,829 $ 1,502

4 unchanged sentences

Nondeductible items 1,045 768

Intangible assets — — ( 1,226 )

Tax credits ( 275 ) —

1 unchanged sentence

Income tax expense $ 13,266 $ 8,463

The following is a summary of income taxes paid by jurisdiction (net of refunds) pursuant to disclosure requirements of ASU 2023-09 for year ended December 31, 2025:

(in thousands) Income Taxes Paid

US federal $ 7,000

US state and local:

California 597

Total cash taxes paid, net of refunds received $ 10,588

Deferred income taxes reflect the expected future tax consequences of temporary differences between the financial statement carrying amount of the Company's assets and liabilities, tax credits and their respective tax bases, and loss carry forwards.

19 unchanged sentences

The assessment considers all available positive and negative evidence and is measured quarterly.

As of December 31, 2024 and 2023, the Company had a consolidated valuation allowance of approximately $ 21.6 million and $ 19.4 million, respectively, against certain deferred income tax assets related to business interest deduction carryovers and business combination costs that the Company believes are not more likely than not to be realized.

On July 4, 2025, the U.S.

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.

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.

As of December 31, 2025, the Company had a consolidated valuation allowance of approximately $ 5.1 million against certain transaction costs and net deferred tax assets acquired as part of the Payslate acquisition that the Company believes are not more than likely to be realized.

As of December 31, 2024, the Company had a consolidated valuation allowance of approximately $ 21.6 M against certain transaction costs and interest deduction limitation carryforwards that the Company believes are not more than likely to be

As of December 31, 2025 and December 31, 2024, the Company had interest deduction limitation carryforwards of $ 76.8 million and $ 87.6 million, respectively.

The Company recognizes the tax effects of uncertain tax positions only if such positions are more likely than not to be sustained based solely upon its technical merits at the reporting date.

2 unchanged sentences

Balance as of January 1, 2025 $ 80

Additions based on tax positions related to the current year —

Additions based on positions of prior years 65

Reductions for tax positions of prior years —

Reductions related to lapse of the applicable statutes of limitations ( 61 )

Settlements —

Balance as of December 31, 2025

1 unchanged sentence

The Company continually evaluates the uncertain tax benefit associated with its uncertain tax positions.

It is reasonably possible that the liability for uncertain tax benefits could decrease during the next 12 months by up to $ 0.1 million due to the expiration of statutes of limitations.

The Company is subject to U.S.

1 unchanged sentence

Tax periods for December 31, 2022 and all years thereafter remain open to examination by the federal and state taxing jurisdictions and tax periods for December 31, 2021 and all years thereafter remain open for certain state taxing jurisdictions to which the Company is subject.

At December 31, 2024 and December 31, 2023, the Company had state NOL carryforwards of approximately $ 19.9 million and $ 17.9 million, respectively, with expirations dates ranging from 2024 to 2044.

The Company has historically been impacted by the new interest deductibility rule under the Tax Act.

This rule disallows interest expense to the extent it exceeds 30% of ATI, as defined.

In March 2020, the CARES Act was enacted, which among other provisions, provides for the increase of the 163(j) ATI limitation from 30% to 50% for tax years 2019 and 2020.

As of December 31, 2024, the Company had interest deduction limitation carryforwards of $ 87.6 million.

Shareholders' Deficit

Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of the Company's Common Stock possess all voting power for the election of members of the Company's Board of Directors and all other matters requiring shareholder action and will at all times vote together as one class on all matters submitted to a vote of the Company's shareholders.

Holders of the Company's Common Stock are entitled to one vote per share on matters to be voted on by shareholders.

As of December 31, 2025 and December 31, 2024, the Company had federal NOL carryforwards of approximately $ 34.4 million and $ 0.0 million, respectively, with no expiration date.

In addition, as of December 31, 2025 and December 31, 2024 the Company had state NOL carryforwards of approximately $ 53.2 million and $ 19.9 million, respectively, with expiration dates ranging from 2031 to 2045.

Also, as of December 31, 2025 and December 31, 2024, the Company had Canadian NOL carryforwards of approximately $ 15.6 million and $ 0.0 million, respectively, with expiration dates ranging from 2037 to 2045.

Stockholders' Deficit

Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of the Company's Common Stock possess all voting power for the election of members of the Company's Board of Directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of the Company's stockholders.

Holders of the Company's Common Stock are entitled to one vote per share on matters to be voted on by stockholders.

Holders of the Company's Common Stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the Company's Board of Directors in its discretion.

6 unchanged sentences

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 December 31, 2024, the Company has purchased 1,309,374 shares for $ 5.8 million under this plan.

The Company has purchased 1,309,374 shares for $ 5.8 million under this plan as of the year ended December 31, 2022.

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

There have been no shares repurchased under this plan since the year ended December 31, 2022, and no shares were repurchased during the year ended December 31, 2025.

Stock-based Compensation

2018 Equity Incentive Plan

The 2018 Plan was approved by the Company's Board of Directors and shareholders in July 2018.

The 2018 Plan provided for the issuance of up to 6,685,696 of the Company's Common Stock, and these shares were registered on a Form S-8 during 2018.

The 2018 Plan was approved by the Company's Board of Directors and stockholders in July 2018.

The 2018 Plan provided for the issuance of up to 6,685,696 shares of the Company's Common Stock, and these shares were registered on a Form S-8 during 2018.

Under the 2018 Plan, the Company's compensation committee may grant awards of non-qualified stock options, incentive stock options, SARs, restricted stock awards, RSUs, other stock-based awards (including cash bonus awards) or any combination of the foregoing.

2 unchanged sentences

In addition, if any shares are surrendered or tendered to pay the exercise price of an award or to satisfy withholding taxes owed, such shares will again be available for grants under the 2018 Plan.

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.

On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan which was subsequently approved by our stockholders, 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.

These additional shares were registered on Form S-8 in December 2022.

5 unchanged sentences

Stock options compensation expense — 4 7

Liability-classified compensation expense (1)

Total stock-based compensation under the 2018 Equity Incentive Plan 10,374 5,901 6,430

2 unchanged sentences

Total $ 10,807 $ 6,118 $ 6,768

(1) Includes $ 2.5 million settled in cash subsequent to December 31, 2025

For the year ended December 31, 2025, 2024 and 2023 the Company's income tax expense for stock-based compensation was immaterial .

For the year ended December 31, 2022, the Company recognized an income tax benefit of approximately and $ 0.7 million for stock-based compensation expense.

No stock-based compensation has been capitalized.

1 unchanged sentence

Common Stock available for issuance at January 1, 2023 3,505,286

New shares authorized for issuance 2,500,000

Stock options forfeited 129,380

20 unchanged sentences

(1) The number of shares surrendered to satisfy withholding taxes owed are subsequently added back to the shares available for grant under the 2018 Plan.

(2) The shares were deemed granted to calculate remaining available shares when the participants were made aware of the award in 2022 to properly account for the number of shares available for issuance.

However, they were not granted for accounting purposes until 2023 once the respective performance criteria were met.

Details about the time-based equity-classified stock options granted under the plan are as follows:

11 unchanged sentences

There were no options granted in 2025, 2024, or 2023.

The intrinsic value of options exercised in 2024 was $ 0.8 million.

There were no options exercised in 2023 or 2022.

The intrinsic value of options exercised in 2025 and 2024 was $ 0.1 million and $ 0.8 million, respectively.

There were no options exercised in 2023.

As of December 31, 2025, there were no unrecognized compensation costs related to stock options.

19 unchanged sentences

345,000 $ 5.31

Forfeited ( 37,500 ) $ 5.31

Vested ( 116,958 ) $ 5.12

Unvested at December 31, 2023 289,995 $ 5.31

345,000 $ 5.31

Granted 10,753 $ 9.30

Forfeited ( 1,666 ) $ 5.31

5 unchanged sentences

Unvested at December 31, 2025 515,490 $ 5.25

(1) Includes 175,720 shares with an estimated fair value of $ 0.6 million, 143,605 shares with an estimated fair value of $ 0.5 million and 228,347 shares with an estimated fair value of $ 1.1 million issued to non-employees in December 31, 2024, 2023 and 2022, respectively.

(1) Includes 56,066 with an estimated fair value of $ 0.6 million, 175,720 shares with an estimated fair value of $ 0.6 million and 143,605 shares with an estimated fair value of $ 0.5 million issued to non-employees in December 31, 2025, 2024 and 2023, respectively.

(2) Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient.

Any grants for which the required performance goals have not been determined and communicated to the grant recipient are not considered to have been granted for accounting purposes.

As of December 31, 2024, there was $ 5.5 million and $ 0.5 million of unrecognized compensation costs for equity-classified service-based RSUs and performance-based RSUs, respectively, which are expected to be recognized over a remaining

weighted-average period of 1.9 years and 1.0 year, respectively.

As of December 31, 2025, there was $ 4.8 million and $ 2.1 million of unrecognized compensation costs for equity-classified service-based RSUs and performance-based RSUs, respectively, which are expected to be recognized over a remaining weighted-average period of 1.9 years and 2.1 years, respectively.

The total fair value of RSUs and PSUs that vested in 2025, 2024, and 2023 was $ 10.1 million, $ 5.8 million and $ 1.3 million, respectively.

2 unchanged sentences

The maximum number of shares available for purchase under the 2021 Stock Purchase Plan is 200,000 shares.

The shares issued under the 2021 Stock Purchase Plan may be authorized but unissued or reacquired shares of Common Stock.

The ESPP was amended by stockholder approval on June 13, 2025, to increase the number of shares available by 200,000 .The shares issued under the 2021 Stock Purchase Plan may be authorized but unissued or reacquired shares of Common Stock.

All employees of the Company who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the 2021 Stock Purchase Plan.

12 unchanged sentences

Related Party Transactions

In February 2019, PHOT, a subsidiary of the Company, received a contribution of substantially all of the operating assets of eTab and Cumulus under asset contribution agreements.

PHOT is a part of the Company's SMB reportable segment.

These contributed assets were primarily composed of technology-related assets.

Prior to these transactions, eTab was 80.0 % owned by the Company's Chairman and Chief Executive Officer ("CEO").

No cash consideration was paid to the contributors of the eTab or Cumulus assets on the date of the transactions.

As consideration for these contributed assets, the contributors were issued redeemable non-controlling preferred equity interests ("redeemable NCIs") in PHOT.

Under these redeemable NCIs, the contributors were eligible to receive up to $ 4.5 million of profits earned by PHOT, plus a preferred yield ( 6.0 % per year) on any undistributed preferred equity interest ("Total Preferred Equity Interest").

Once the total preferred equity interest is distributed to the holders, the redeemable NCIs cease to exist.

The Company's CEO initially owned 83.3 % of the redeemable NCIs, which ownership interest was subsequently reduced to 35.3 % through the CEO's disposition of interests to others.

In November 2020, the Company agreed with the contributors to an exchange of shares of common stock of the Company, or cash, for the remaining undistributed Total Preferred Equity Interests of $ 4.8 million.

An exchange valuation for the Company's common stock was established as of November 12, 2020 at the prior 20-day volume weighted average price of $ 2.78 per share.

The exchange was contingent upon receiving approval of the Company's lenders;

therefore, the binding exchange agreements were not entered into until after lender approval was received in April 2021 in connection with the debt refinancing.

In May 2021, the Company entered into exchange agreements and completed the exchange of 1,428,358 shares of common stock and $ 0.8 million of cash for the Total Preferred Equity Interests.

The CEO received 605,623 shares of common stock of the Company in exchange for his 35.3 % interest, and the Company's Chief Operating Officer (“COO”) received 413,081 shares of common stock of the Company in exchange for her 24.1 % interest.

On October 31, 2023, a lawsuit was filed alleging that the Board breached its fiduciary duties by approving the above mentioned exchange transaction.

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 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 Consolidated Balance Sheets.

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 shareholders in the Company’s Statements of Operations and Comprehensive Income (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.

During the quarter ended June 30, 2024, the PHOT redeemable preferred units held by the CEO were redeemed in cash for $ 2.1 million and the promissory notes were satisfied.

During the quarter ended September 30, 2024, the PHOT redeemable preferred units held by the COO were redeemed for 408,013 shares of the Company's common stock and PHOT redeemable preferred units held by other holders were redeemed for 404,628 shares of the Company's common stock.

In February 2019, the Company's CEO contributed assets of certain businesses to PHOT (a subsidiary of the Company).

In consideration, PHOT issued redeemable preferred equity interest (preferred units) to the CEO and COO of the Company.

These preferred units were eligible to receive up to $ 4.5 million in profits earned by PHOT plus an annual preferred yield of 6 % on undistributed amounts.

On May 30, 2024, the Company approved the redemption of certain preferred units of PHOT either in cash or in exchange for shares of its common stock.

The redemption value of these preferred units was $ 5.9 million and exchange ratio was established based on the 30 days volume weighted average close price adjusted for market illiquidity.

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 408,013 shares of the Company's common stock valued at $ 1.5 million.

There was no subsequent activity as of December 31, 2025.

Commitments and Contingencies

3 unchanged sentences

Some of these agreements have minimum annual requirements for processing volumes.

Based on existing contracts in place at December 31, 2024, the Company is committed to pay minimum processing fees under these agreements of approximately $ 22.9 million in 2025 and $ 25.4 million in 2026.

Based on existing contracts in place at December 31, 2025, the Company is committed to pay minimum processing fees under these agreements as noted below:

(in thousands)

Year Ending December 31,

2026 $ 22,087

Thereafter 32,594

Total $ 143,262

Other Commitments

The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $ 32.0 million and $ 26.0 million as of December 31, 2024 and 2023, respectively.

As of December 31, 2025 and 2024, the Company had a capital contribution commitment of $ 3.2 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 December 31, 2024 and 2023, the Company contributed $ 19.7 million and $ 11.8 million, respectively.

The Company committed to funding notes receivables totaling $ 27.8 million and $ 11.3 million as of December 31, 2025 and 2024, respectively.

2 unchanged sentences

Merchant Reserves

Settlement Assets and Customer/Subscriber Account Balances and Related Obligations , for information about merchant reserves.

Contingent Consideration

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

(in thousands) Contingent Consideration Liabilities

Settlement Assets and Obligations , for information about merchant reserves.

Contingent/Deferred Consideration

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

(in thousands) Contingent Consideration Liabilities Deferred Consideration Liabilities

January 1, 2024 $ — $ 13,438

Addition of contingent consideration (related to asset acquisition) 263

Addition of contingent consideration due to resolution of contingency 7,000

Addition of contingent consideration (related to business combination)

Accretion of contingent consideration 1,658

Accretion — 4,339

Fair value adjustments due to changes in estimates of future payments — ( 1,500 )

Payment of contingent consideration ( 9,909 )

Adjustment for receivable due to residual shortfall ( 2,053 )

Payments — ( 5,592 )

December 31, 2024 $ — $ 10,685

Accretion of contingent consideration 4,339

Fair value adjustments due to changes in estimates of future payments ( 1,500 )

Payment of contingent consideration ( 5,592 )

Additions (Related to acquisition, see Note 2 )

Additions due to acceleration of timing payments — 6,894

Accretion — 2,692

Payments — ( 20,051 )

Foreign currency translation adjustment 1 ( 234 )

December 31, 2025 21,058 7,296

10 unchanged sentences

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

On January 24, 2025, the court preliminarily approved the settlement agreement entered into by the parties wherein defendants agree to pay $ 19.5 million to settle this litigation.

Any contribution toward the settlement by the Company will be nominal, and will not have any material impact on the Company's results of operations, financial conditions or cash flows.

On May 23, 2025, the court approved the final settlement agreement wherein the defendants agree to pay $ 19.5 million to settle this litigation on a class basis.

Final judgment has been entered dismissing all claims against defendants.

Concentration of Risks

3 unchanged sentences

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

Fair Value Measurements

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.

Contingent consideration liabilities related to certain of the Company's acquisitions are uncertain due to the utilization of unobservable inputs and management's judgement in determining the likelihood of achieving the earn-out criteria or the years ended December 31, 2024 and 2023.

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

Years Ended December 31,

(in thousands) Fair Value Hierarchy 2024 2023

Contingent consideration, current portion Level 3 $ 3,891 $ 5,951

Contingent consideration, noncurrent portion Level 3 6,794 7,487

Total contingent consideration $ 10,685 $ 13,438

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

Fair Value Disclosures

The Company's contingent and deferred considerations were derived from business combinations occurring during the year ended December 31, 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 and deferred 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 and deferred considerations fair value of $ 28.4 million at December 31, 2025, $ 1.2 million included in accounts payable and accrued expenses and $ 27.2 million are included in other noncurrent liabilities on the Company's Consolidated Balance Sheets.

Notes Receivable

3 unchanged sentences

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

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 $ 25.0 million at December 31, 2025 and is within Level 2 of the fair value hierarchy.

Debt Obligations

1 unchanged sentence

Debt Obligations ) are reflected in the Company's 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 loan facility was estimated to be approximately $ 944.4 million and $ 651.9 million at December 31, 2024 and 2023, respectively, and was estimated using binding and non-binding quoted market 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.

The fair value of 2024 Credit Agreement's term facility was estimated to be approximately $ 998.3 million and $ 944.4 million at December 31, 2025 and 2024, respectively.

The fair value was estimated using binding and non-binding quoted market 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.

Long term incentive award

The Company has established a long-term incentive award for the Chief Executive Officer, which is subject to specified performance conditions.

Upon satisfaction of these performance criteria, the Chief Executive Officer becomes entitled to a predetermined amount of incentive compensation, which may be settled either in cash or in shares of the Company's Common Stock.

Consequently, this arrangement is accounted for as a liability award in accordance with applicable accounting standards.

The fair value of these awards is remeasured at each reporting date utilizing Level 3 inputs, which encompass management's estimates regarding the anticipated achievement of relevant financial metrics.

The fair value of these awards as of December 31, 2025 was $ 4.5 million.

Segment Information

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

More information about our three reportable segments:

• SMB Payments :

The Company's renamed its three reportable 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.

Activities within the segment include the following:

• Merchant Solutions :

• B2B Payments :

• Enterprise Payments :

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

• 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.

The Company's chief operating decision makers ("CODM") are our CEO and CFO.

Historically, the CODM used operating income (loss) as the measure of segment profit or loss to allocate resources.

However, during the year, the segment performance measure was updated to adjusted earnings before interest expense, income tax and depreciation and amortization expenses ("Adjusted EBITDA") to have consistent measure of results across the organization.

The CODM uses adjusted earnings before interest expense, income tax and depreciation and amortization expenses ("Adjusted EBITDA") as the measure of segment profit or loss to allocate resources.

Adjusted EBITDA represents EBITDA (i.e.

earnings before interest, income tax, and depreciation and amortization expenses) adjusted for certain non-cash costs, such as stock-based compensation and the write-off of the carrying value of investments or other assets, as well as debt extinguishment and modification expenses and other expenses and income items considered non-recurring, such as acquisition integration expenses, certain professional fees, and litigation settlements.

Adjusted EBITDA is a non-GAAP measure and therefore, a reconciliation to earnings (loss) before income taxes (a GAAP measure) is included within this footnote.

Segment level assets information is not provided or subject to review by the CODM and therefore not provided.

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 ended June 30, 2024.

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

All comparative periods have been recasted to reflect this update.

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

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

Year Ended December 31, 2025

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Revenues $ 613,547 $ 89,103 $ 180,448 $ 883,098

(in thousands) Merchant Solutions Payables

Treasury Solutions Total

Revenue from external customers $ 639,682 $ 99,407 $ 213,920 $ 953,009

Intersegement revenues 2,387 1,465 1,859 5,711

642,069 100,872 215,779 958,720

Elimination of intersegment revenues ( 5,711 )

4 unchanged sentences

( 35,486 ) ( 14,989 ) ( 20,159 )

Depreciation and amortization 4

30,865 5,258 16,928 53,051

Other segment items (3)

3,152 447 948

Adjustment for corporate items 4

— — — — ( 63,791 )

Adjusted EBITDA $ 108,913 $ 7,605 $ 154,936 $ 204,267

Segment Adjusted EBITDA $ 111,793 $ 14,591 $ 182,231 $ 308,615

Reconciliation of Adjusted EBITDA to income (loss) before income taxes

Adjusted EBITDA $ 204,267

Segment Adjusted EBITDA $ 308,615

Adjustment for corporate items (4)

Intersegment revenue elimination ( 5,711 )

Depreciation and amortization ( 63,183 )

2 unchanged sentences

Selling, general and administrative (non-recurring) ( 5,718 )

Salary and employee benefits (non-recurring) ( 2,501 )

Non-cash stock based compensation (6)

1 unchanged sentence

(1) The significant expense categories and amounts align with the segment level information regularly provided to the CODM.

Other operating expenses include salary and employee benefits, depreciation and amortization, and selling, general and administrative expenses.

Other segment items for each reportable segment include other income, net and stock based compensation expense.

(2) Other operating expenses include salary and employee benefits, and selling, general and administrative expenses.

(3) Other segment items for each reportable segment include other income, net of stock based compensation expense.

(4) Adjustment for corporate items include:

2 unchanged sentences

Other operating expenses (2)

Depreciation and amortization 4,990

Other items (5)

Other items include other income, net, stock based compensation expense, and selling, general and administrative (non-recurring expenses).

(5) Other items include other income, net, stock based compensation expense, selling, general and administrative (non-recurring expenses) and salary and employee benefits (non-recurring expenses).

(6) Excludes stock based compensation settled in cash subsequent to December 31, 2025.

(in thousands) Other specified segment disclosure

Year Ended December 31, 2025

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Revenues $ 583,251 $ 41,156 $ 132,186 $ 756,593

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 31,102 $ 5,081 $ 19,626 $ 55,809

Year Ended December 31, 2024

(in thousands) Merchant Solutions Payables

Treasury Solutions Total

Revenue from external customers $ 612,116 $ 87,954 $ 179,632 $ 879,702

Intersegement revenues 1,431 1,149 816 3,396

613,547 89,103 180,448 883,098

Elimination of intersegment revenues ( 3,396 )

4 unchanged sentences

( 28,234 ) ( 17,059 ) ( 14,485 )

Depreciation and amortization 4

36,715 1,831 22,426 60,972

Other segment items (3)

2,051 220 865

Adjustment for corporate items 4

— — — — ( 53,315 )

Adjusted EBITDA $ 109,485 $ 2,250 $ 110,893 $ 168,332

Segment Adjusted EBITDA $ 108,913 $ 7,605 $ 154,936 $ 271,454

Reconciliation of Adjusted EBITDA to income (loss) before income taxes

Adjusted EBITDA $ 168,332

Segment Adjusted EBITDA $ 271,454

Adjustment for corporate items (4)

Intersegment revenue elimination ( 3,396 )

Depreciation and amortization ( 58,041 )

Interest expense ( 88,948 )

Debt modification and extinguishment expenses ( 10,369 )

Selling, general and administrative (non-recurring) ( 3,510 )

Non-cash stock based compensation ( 6,118 )

Non-cash other losses ( 84 )

Income before income taxes $ 37,281

(1) The significant expense categories and amounts align with the segment level information regularly provided to the CODM.

Other operating expenses include salary and employee benefits, depreciation and amortization, and selling, general and administrative expenses.

Other segment items for each reportable segment include other income, net and stock based compensation expense.

(2) Other operating expenses include salary and employee benefits, and selling, general and administrative expenses.

(3) Other segment items for each reportable segment include other income, net of stock based compensation expense.

(4) Adjustment for corporate items include:

2 unchanged sentences

Other operating expenses (2)

Other items (5)

(5) Other items include other income, net, stock based compensation expense, selling, general and administrative (non-recurring expenses).

(in thousands) Other specified segment disclosure

Year Ended December 31, 2024

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 30,865 $ 5,258 $ 16,928 $ 53,051

Other segment items 3

Other items include other income, net, stock based compensation expense, selling, general and administrative (non-recurring expenses) and non-cash other losses.

Year Ended December 31, 2023

(in thousands) SMB Payments B2B

Payments Enterprise Payments Total

Revenues $ 562,237 $ 18,890 $ 82,514 $ 663,641

(in thousands) Merchant Solutions Payables

Treasury Solutions Total

Revenue from external customers $ 583,053 $ 40,530 $ 132,029 $ 755,612

Intersegement revenues 198 626 157 981

583,251 41,156 132,186 756,593

Elimination of intersegment revenues ( 981 )

4 unchanged sentences

( 29,165 ) ( 12,853 ) ( 13,389 )

Depreciation and amortization 4

37,193 162 24,734 62,089

Other segment items (3)

1,587 554 552

Adjustment for corporate items 4

— — — — ( 46,299 )

Adjusted EBITDA $ 117,429 $ 2,978 $ 66,194 $ 140,302

Segment Adjusted EBITDA $ 109,485 $ 2,250 $ 110,893 $ 222,628

Reconciliation of Adjusted EBITDA to income (loss) before income taxes

Adjusted EBITDA $ 140,302

Segment Adjusted EBITDA $ 222,628

Adjustment for corporate items (4)

Intersegment revenue elimination ( 981 )

Depreciation and amortization ( 68,395 )

2 unchanged sentences

Non-cash stock based compensation ( 6,768 )

Non cash other losses ( 84 )

Income before income taxes $ 7,152

(1) The significant expense categories and amounts align with the segment level information regularly provided to the CODM.

Other operating expenses include salary and employee benefits, depreciation and amortization, and selling, general and administrative expenses.

Other segment items for each reportable segment include other income, net and stock based compensation expense.

(2) Other operating expenses include salary and employee benefits, and selling, general and administrative expenses.

(3) Other segment items for each reportable segment include other income, net of stock based compensation expense.

(4) Adjustment for corporate items include:

2 unchanged sentences

Other operating expenses (2)

Other items (5)

(4) Other items include other income, net, stock based compensation expense, selling, general and administrative (non-recurring expenses) and non-cash other losses.

(in thousands) Other specified segment disclosure

Year Ended December 31, 2023

Merchant Solutions Payables Treasury Solutions Total

Depreciation and amortization $ 36,715 $ 1,831 $ 22,426 $ 60,972

Other segment items 3

(Loss) Earnings per Common Share

Earnings (Loss) per Common Share

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

4 unchanged sentences

NCI preferred unit redemptions — ( 639 ) —

Earnings attributable to NCI — — —

Net loss attributable to common shareholders $ ( 23,960 ) $ ( 49,055 ) $ ( 39,030 )

Basic and diluted:

Weighted-average common shares outstanding (1)

Net income (loss) attributable to common stockholders $ 55,681 $ ( 23,960 ) $ ( 49,055 )

Weighted average shares outstanding (1)

79,798 77,993 78,333

Loss per common share $ ( 0.31 ) $ ( 0.63 ) $ ( 0.50 )

(1) The weighted-average common shares outstanding includes 1,803,841 warrants issued in the second quarter of 2021 (refer to Note 11, Redeemable Senior Preferred Stock and Warrants ) .

Potentially anti-dilutive securities that were excluded from (loss) earnings per common share that could potentially be dilutive in future periods are as follows:

Effect of dilutive potential common shares 1,670 — —

Adjusted weighted average shares outstanding 81,468 77,993 78,333

Basic earnings (loss) per common share $ 0.70 $ ( 0.31 ) $ ( 0.63 )

Diluted earnings (loss) per share $ 0.68 $ ( 0.31 ) $ ( 0.63 )

(1) For all periods presented, the weighted-average common shares outstanding includes 1,803,841 warrants issued in the second quarter of 2021 that were exercised during the first quarter of 2025.

Anti-dilutive securities that were excluded from earnings (loss) per common share that could potentially be dilutive in future periods are as follows:

Common Stock Equivalents at December 31,

(in thousands) 2025 2024 2023

Outstanding warrants on common stock (1)

Outstanding options and warrants issued to adviser (2)

Restricted stock awards (1)

1 unchanged sentence

Outstanding stock option awards (1)

840 900 1,098

Liability-classified restricted stock awards (2)

Total 238 1,561 2,080

(1) The warrants were exercisable at $ 11.50 per share and expired on August 24, 2023.

Refer to Note 13.

Shareholders' Deficit .

(2) The warrants and options were exercisable at $ 12.00 per share and expired on August 24, 2023.

Refer Note 13.

Shareholders' Deficit .

(3) Granted under the 2018 Plan.

(1) Granted under 2018 Plan

(2) Award can be settled in cash or the Company's common stock at mutual agreement of the grantee and the Company

Subsequent Events

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

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

(Canada), Rentmoola Payment Solutions LLC (U.S.), and Rentmoola Payment Solutions Ltd (United Kingdom) (jointly referred as "letus business") for a total purchase consideration of $ 11.0 million (including earn outs of $ 6.5 million which is in the nature of deferred consideration).

The cash consideration of $ 4.5 million was funded by the cash flows of the Company.

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

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

The acquisition is aimed to provide an opportunity to expand Priority's services in Canada.

The Company’s management evaluated subsequent events through the date of the issuance of the consolidated financial statements.

There have been no subsequent events that occurred during such period that would require disclosure in, or would be required to be recognized in the consolidated financial statements as of and for the year ended December 31, 2025.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

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-K

Item 8. Financial Statements and Supplementary Data