As of ~~November 13, 2017, 7,058,743 shares~~August 4, 2023, the number of ~~common stock, par value $0.001 per share, were issued and outstanding.~~

the registrant's Common Stock outstanding was 76,571,408.

~~M I ACQUISITIONS, INC.~~

~~FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2017~~

~~TABLE OF CONTENTS~~

Table of Contents

	~~Page~~
~~Part I.~~		~~Financial Information~~		Page
Commonly Used or Defined Terms		ii
PART I. FINANCIAL INFORMATION		1
Item 1. Financial Statements ~~(Unaudited)~~		1
		~~Condensed~~Unaudited Consolidated Balance Sheets	1
		~~Condensed~~Unaudited Consolidated Statements of Operations and Comprehensive Loss	2
Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest		~~Condensed~~3
Unaudited Consolidated Statements of Cash Flows		3 5
		Notes to Unaudited ~~Condensed~~Consolidated Financial Statements:	4 7
1. Basis of Presentation and Significant Accounting Policies		7
2. Acquisitions		8
3. Revenues		9
4. Settlement Assets and Customer/Subscriber Account Obligations		11
5. Notes Receivable		12
6. Property, Equipment and Software		13
7. Goodwill and Other Intangible Assets		13
8. Debt Obligations		15
9. Redeemable Senior Preferred Stock and Warrants		16
10. Income Taxes		17
11. Stockholders' Deficit		17
12. Stock-based Compensation		18
13. Commitments and Contingencies		19
14. Fair Value		20
15. Segment Information		21
16. Loss per Common Share		23
17. Subsequent Events		24
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations		12 25
		Item 3. Qualitative and Quantitative ~~and Qualitative~~ Disclosures ~~Regarding~~about Market Risk	13 35
		Item 4. Controls and Procedures	14 35
~~Part~~PART II. OTHER INFORMATION		~~Other Information~~36		15
Item 1. Legal Proceedings		36
Item 1A. Risk Factors		36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		15 36
Item 3. Defaults Upon Senior Securities		36
Item 4. Mine Safety Disclosures		36
Item 5. Other Information		37
Item 6. Exhibits		15 37
Signatures		16 39

Table of Contents

Commonly Used or Defined Terms

Term Definition
2018 Plan 2018 Equity Incentive Plan
2021 Stock Purchase Plan Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
2021 Share Repurchase Program Priority Technology Holdings, Inc. 2021 Share Repurchase Program
AOCI Accumulated other comprehensive income/loss
AP Accounts payable
ASC Accounting Standards Codification
APIC Additional paid-in capital
Amended Certificate of Designation Amended and Restated Certificate of Designation of Senior Preferred Stock effective as of June 30, 2023
ASU Accounting Standards Update
B2B Business-to-business
B2C Business-to-consumer
CEO Chief Executive Officer
CFO Chief Financial Officer
Common Stock The Company's Common Stock, par value $0.001
Credit Agreement Credit and Guaranty Agreement with Truist Bank dated as of April 27, 2021 (as amended)
EAETR Estimated annual effective tax rate
ESPP Employee Stock Purchase Plan
Exchange Act Securities Exchange Act of 1934
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
FBO For the benefit of
FI Financial institution
Finxera Finxera Holdings, Inc.
GAAP U.S. Generally Accepted Accounting Principles
IRA Inflation Reduction Act, enacted by the U.S. Federal Government on August 16, 2022
ISO Independent sales organization
ISV Independent software vendor
LIBOR London Interbank Offered Rate
NCI Non-controlling interests in consolidated subsidiaries
Revolving credit facility $55.0 million line issued under the Credit Agreement
Plastiq Acquisition of Plastiq, Inc. and certain of its affiliates
PRTH Priority Technology Holdings, Inc.
SEC Securities and Exchange Commission
SOFR Secured Overnight Financing Rate
SMB Small to medium-sized businesses
Term facility $620.0 million senior secured term loan facility issued under the Credit Agreement (including $320.0 million delayed draw facility)

ii
Table of Contents
Priority Technology Holdings, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except share data)

PART ~~I –~~I. FINANCIAL ~~STATEMENTS~~

INFORMATION

Item 1. Financial Statements ~~(Unaudited)~~

~~M I Acquisitions, Inc.~~

June 30, 2023 December 31, 2022
Assets
Current assets:
Cash and cash equivalents $ 17,567 $ 18,454
Restricted cash 12,357 10,582
Accounts receivable, net of allowances of $1,227 and $1,143, respectively 60,130 78,113
Prepaid expenses and other current assets 14,608 11,832
Current portion of notes receivable, net of allowance of $0 and $0, respectively 2,530 1,471
Settlement assets and customer/subscriber account balances 710,705 532,018
Total current assets 817,897 652,470
Notes receivable, less current portion 3,018 3,191
Property, equipment and software, net 38,984 34,687
Goodwill 368,740 369,337
Intangible assets, net 269,428 288,794
Deferred income taxes, net 26,066 16,447
Other noncurrent assets 8,147 8,437
Total assets $ 1,532,280 $ 1,373,363
Liabilities, Redeemable Senior Preferred Stock and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses $ 59,839 $ 51,864
Accrued residual commissions 34,614 35,979
Customer deposits and advance payments 3,253 2,618
Current portion of long-term debt 6,200 6,200
Settlement and customer/subscriber account obligations 710,551 533,340
Total current liabilities 814,457 630,001
Long-term debt, net of current portion, discounts and debt issuance costs 589,932 598,926
Other noncurrent liabilities 11,752 11,643
Total noncurrent liabilities 601,684 610,569
Total liabilities 1,416,141 1,240,570
Commitments and contingencies (Note 13)
Redeemable senior preferred stock, net of discounts and issuance costs:
Redeemable senior preferred stock, $0.001 par value; 250,000 shares authorized; 225,000 issued and outstanding at June 30, 2023 and December 31, 2022 240,731 235,579
Stockholders' deficit:
Preferred stock, $0.001; 100,000,000 shares authorized; none issued or outstanding at June 30, 2023 and December 31, 2022 — —
Common Stock, $0.001 par value; 1,000,000,000 shares authorized; 79,094,150 and 78,385,685 shares issued at June 30, 2023 and December 31, 2022, respectively; and 76,531,703 and 76,044,629 shares outstanding at June 30, 2023 and December 31, 2022, respectively 76 76
Treasury stock at cost, 2,562,447 and 2,341,056 shares at June 30, 2023 and December 31, 2022, respectively (12,577) (11,559)
Additional paid-in capital — 9,650
Accumulated other comprehensive income 31 —
Accumulated deficit (112,974) (102,208)
Total stockholders' deficit attributable to stockholders of PRTH (125,444) (104,041)
Non-controlling interests in consolidated subsidiaries 852 1,255
Total stockholders' deficit (124,592) (102,786)
Total liabilities, redeemable senior preferred stock and stockholders' deficit $ 1,532,280 $ 1,373,363

See Notes to Unaudited Consolidated Financial Statements~~Condensed Balance Sheets~~

September 30, 2017 December 31, 2016
(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 479,382 $ 362,535
Prepaid expenses and other current assets 35,322 56,241
Total current assets 514,704 418,776

Cash and cash equivalents held in trust 54,948,047 54,731,828
Total Assets $ 55,462,751 $ 55,150,604

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable and accrued expenses $ 474,677 $ 111,011
Accounts payable - related party 60,000 —
Offering costs payable 11,616 11,616
Note payable 27,500 27,500
Total Current Liabilities 573,793 150,127

Deferred underwriting fee payable 1,062,022 1,062,022

Total Liabilities 1,635,815 1,212,149

Commitments

Common stock subject to possible conversion (4,718,573 and 4,748,033 shares at conversion value as of September 30, 2017 and December 31, 2016) 48,826,934 48,938,449

Stockholders’ Equity:
Preferred stock, $0.001 par value; 1,000,000 authorized none issued and outstanding — —
Common stock, $0.001 par value; 30,000,000 shares authorized; 2,340,170 and 2,310,710 shares issued and outstanding (excluding 4,718,573 and 4,748,033 shares subject to possible conversion) at September 30, 2017 and December 31, 2016, respectively 2,340 2,311
Additional paid in capital 5,227,402 5,115,916
Accumulated deficit (229,740 ) (118,221 )
Total Stockholders’ Equity 5,000,002 5,000,006

Total Liabilities and Stockholders’ Equity $ 55,462,751 $ 55,150,604

~~The accompanying notes are an integral part~~

Table of ~~these condensed financial statements.~~

Contents

Priority Technology Holdings, Inc.

~~M I Acquisitions, Inc.~~

~~Condensed~~

Unaudited Consolidated Statements of Operations

~~(unaudited)~~

For the Three Months For the Three Months For the Nine Months For the Nine Months
Ended Ended Ended Ended
September 30, 2017 September 30, 2016 September 30, 2017 September 30, 2016

EXPENSES
Administration fee - related party $ 30,000 $ 5,667 $ 90,000 $ 5,667
Operating costs 367,033 61,360 714,534 68,624

TOTAL EXPENSES 397,033 67,027 804,534 74,291

OTHER INCOME
  Extinguishment of debt — 27,500 — 27,500
  Settlement income 427,701 — 427,701 —
  Interest income 121,682 3,145 265,314 3,145

TOTAL OTHER INCOME 549,383 30,645 693,015 30,645

Net income (loss) 152,350 (36,382 ) (111,519 ) (43,646 )

Net income (loss) per shares of common stock – basic and diluted $ 0.02 $ 0.01 $ (0.14 ) $ 0.00

Weighted average shares of common stock outstanding – basic and diluted 2,344,454 1,363,737 2,327,754 1,288,329

~~The accompanying notes are an integral part~~ and Comprehensive Loss

(in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues	$	182,290	$	166,430	$	367,318	$	319,669
Operating expenses
Cost of revenue (excludes depreciation and amortization)	115,281		110,749		237,247		212,229
Salary and employee benefits	19,109		15,770		38,157		31,847
Depreciation and amortization	17,980		17,505		36,028		34,858
Selling, general and administrative	10,787		9,346		19,905		16,849
Total operating expenses	163,157		153,370		331,337		295,783
Operating income	19,133		13,060		35,981		23,886
Other (expense) income
Interest expense	(17,765)		(12,335)		(35,464)		(23,870)


Other income, net	375		29		587		80
Total other expense, net	(17,390)		(12,306)		(34,877)		(23,790)
Income before income taxes	1,743		754		1,104		96
Income tax expense	2,355		467		2,222		142
Net (loss) income	(612)		287		(1,118)		(46)
Less: Dividends and accretion attributable to redeemable senior preferred stockholders	(11,765)		(8,549)		(23,060)		(16,949)

Net loss attributable to common stockholders	(12,377)		(8,262)		(24,178)		(16,995)
Other comprehensive income (loss)
Foreign currency translation adjustments	7		—		31		—
Comprehensive loss	$	(12,370)	$	(8,262)	$	(24,147)	$	(16,995)

Loss per common share:
Basic and diluted	$	(0.16)	$	(0.11)	$	(0.31)	$	(0.22)



Weighted-average common shares outstanding:
Basic and diluted	78,292		78,603		78,213		78,600

See Notes to Unaudited Consolidated Financial Statements

Table of ~~these condensed financial statements.~~

Contents

Priority Technology Holdings, Inc.

~~M I Acquisitions, Inc.~~

Unaudited 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 NCIs Total
Shares $ Shares $
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 — — — — 1,936 — — 1,936 — 1,936
ESPP compensation and vesting of stock-based compensation 517 — — — 37 — — 37 — 37
Shares withheld for taxes (157) — 157 (777) — — — (777) — (777)
Dividends on redeemable senior preferred stock — — — — (10,477) — — (10,477) — (10,477)
Accretion of redeemable senior preferred stock — — — — (818) — — (818) — (818)
Adjustment to NCI — — — — — — — — (403) (403)
Foreign currency translation adjustment — — — — — 24 — 24 — 24
Net loss — — — — — — (506) (506) — (506)
March 31, 2023 76,404 $ 76 2,498 $ (12,336) $ 328 $ 24 $ (102,714) $ (114,622) $ 852 $ (113,770)
Equity-classified stock-based compensation — — — — 1,746 — — 1,746 — 1,746
ESPP compensation and vesting of stock-based compensation 192 — — — 43 — — 43 — 43
Shares withheld for taxes (65) — 65 (241) — — — (241) — (241)
Dividends on redeemable senior preferred stock — — — — (10,934) — — (10,934) — (10,934)
Accretion of redeemable senior preferred stock — — — — (831) — — (831) — (831)
Foreign currency translation adjustment — — — — — 7 — 7 — 7
Reclassification of negative additional paid-in capital — — — — 9,648 — (9,648) — — —
Net loss — — — — — — (612) (612) — (612)
June 30, 2023 76,531 $ 76 2,563 $ (12,577) $ — $ 31 $ (112,974) $ (125,444) $ 852 $ (124,592)

Table of Contents~~Condensed~~
Priority Technology Holdings, Inc.
Unaudited 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 NCIs Total
Shares $ Shares $
December 31, 2021 76,740 $ 77 720 $ (4,091) $ 39,835 $ — $ (100,058) $ (64,237) $ — $ (64,237)
Equity-classified stock-based compensation — — — — 1,558 — — 1,558 — 1,558
Vesting of stock-based compensation 129 — — — — — — — — —
Share repurchases and shares withheld for taxes (27) 1 27 (157) (1) — — (157) — (157)
Dividends on redeemable senior preferred stock — — — — (7,595) — — (7,595) — (7,595)
Accretion of redeemable senior preferred stock — — — — (805) — — (805) — (805)
Net loss — — — — — — (333) (333) — (333)
March 31, 2022 76,842 $ 78 747 $ (4,248) $ 32,992 $ — $ (100,391) $ (71,569) $ — $ (71,569)
Equity-classified stock-based compensation — — — — 1,542 — — 1,542 — 1,542
ESPP compensation and vesting of stock-based compensation 157 — — — 57 — — 57 — 57
Share repurchases and shares withheld for taxes (431) — 431 (1,922) — — — (1,922) — (1,922)
Dividends on redeemable senior preferred stock — — — — (7,732) — — (7,732) — (7,732)
Accretion of redeemable senior preferred stock — — — — (817) — — (817) — (817)
Net income — — — — — — 287 287 — 287
June 30, 2022 76,568 $ 78 1,178 $ (6,170) $ 26,042 $ — $ (100,104) $ (80,154) $ — $ (80,154)

See Notes to Unaudited Consolidated Financial Statements

4

Table of Contents
Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Cash Flows

~~(unaudited)~~

For the Nine Months For the Nine Months
Ended Ended
September 30, 2017 September 30, 2016

Cash Flows From Operating Activities:
Net loss $ (111,519 ) $ (43,646 )
Gain on extinguishment of debt (27,500 )
Interest earned on cash and securities held in Trust Account (265,314 ) —
Adjustments to reconcile net loss to net cash used in operating activities:
Accrued interest income — (3,145 )
Formation and organization costs paid by related parties — 2,537
Changes in operating assets and liabilities:
Prepaid expenses 20,919 —
Accounts payable and accrued expenses 363,666 67,027
Accounts payable - related party 60,000 —
Net Cash Provided By (Used In) Operating Activities 67,752 (4,727 )

Cash Flows From Investing Activities:
Interest released from Trust Account 71,702 —
Cash deposited into Trust Account (22,607 ) (51,500,000 )
Net Cash Provided By (Used In) Investing Activities 49,095 (51,500,000 )

Cash Flows From Financing Activities:
    Proceeds from public offering, net of offering costs — 48,194,567
    Proceeds from insider units — 4,025,000
    Payments of related party notes — (131,720 )
    Proceeds from related party advances — 55,201
    Payments of related party advances — (54,230 )
    Payments of offering costs — (80,040 )
    Net Cash Provided By Financing Activities — 52,008,778

Net change in cash and cash equivalents 116,847 504,051

Cash and cash equivalents at beginning of period 362,535 5,000

Cash and cash equivalents at end of period $ 479,382 $ 509,051

Supplemental disclosure of non-cash financing activities:
Reclassification of deferred offering costs to equity $ — $ 258,997
Payment of deferred offering costs by issuance of notes and related party notes $ — $ 15,000
Common stock subject to possible conversion $ 111,515 $ 45,870,695
Deferred Underwriting commission $ — $ 1,000,000

(in thousands)


	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(1,118)	$	(46)
Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization of assets	36,028		34,858
Stock-based compensation	3,682		3,100
Amortization of debt issuance costs and discounts	1,826		1,719

Deferred income tax	(9,619)		(3,053)
Change in contingent consideration	346		—


Other non-cash items, net	(461)		—
Change in operating assets and liabilities:
Accounts receivable	18,066		(12,015)
Prepaid expenses and other current assets	(3,560)		(4,445)
Income taxes (receivable) payable	498		(304)
Notes receivable	(389)		297
Accounts payable and other accrued liabilities	1,306		14,792
Customer deposits and advance payments	635		(3,957)
Other assets and liabilities, net	(383)		(612)
Net cash provided by operating activities	46,857		30,334
Cash flows from investing activities:


Additions to property, equipment and software	(9,869)		(6,011)
Notes receivable, net	(498)		(2,750)
Acquisitions of assets and other investing activities	(2,715)		(3,974)

Net cash used in investing activities	(13,082)		(12,735)
Cash flows from financing activities:


Repayments of long-term debt	(3,525)		(3,100)
Borrowings under revolving credit facility	5,000		12,000
Repayments of borrowings under revolving credit facility	(12,000)		(12,500)



Repurchases of common stock and shares withheld for taxes	(1,018)		(2,079)
Dividends paid to redeemable senior preferred stockholders	(17,908)		(7,076)


Settlement and customer/subscriber accounts obligations, net	175,548		15,180
Payment of contingent consideration related to business combination	(1,959)		(1,863)

Net cash provided by financing activities	144,138		562
Net change in cash and cash equivalents, and restricted cash:
Net increase in cash and cash equivalents, and restricted cash	177,913		18,161
Cash and cash equivalents, and restricted cash at beginning of period	560,610		518,093
Cash and cash equivalents, and restricted cash equivalents at end of period	$	738,523	$	536,254

Table of Contents

Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Cash Flows

(in thousands)


	Six Months Ended June 30,
	2023		2022
Reconciliation of cash and cash equivalents, and restricted cash:
Cash and cash equivalents	$	17,567	$	22,162
Restricted cash	12,357		11,717
Cash and cash equivalents included in settlement assets and customer/subscriber account balances (see Note 4)	708,599		502,375
Total cash and cash equivalents, and restricted cash	$	738,523	$	536,254

Supplemental cash flow information:
Cash paid for interest	$	35,234	$	21,362

Non-cash investing and financing activities:





Contingent consideration accrual	$	—	$	4,141

Adjustment to value of profit interest units	$	596	$	—
Acquisition of intangible asset	$	193	$	—
Non-cash additions to other noncurrent assets for right-of-use operating leases	$	—	$	67

See Notes to Unaudited Consolidated Financial Statements

Table of Contents

Priority Technology Holdings, Inc.

Notes to Unaudited Consolidated Financial Statements

1. Basis of Presentation and Significant Accounting Policies

Business, Consolidation and Presentation

Priority Technology Holdings, Inc. and its consolidated subsidiaries are referred to herein collectively as "Priority," "PRTH," the "Company," "we," "our" or "us," unless the context requires otherwise. Priority is a provider of merchant acquiring, integrated payment software, money transmission services and commercial payments solutions.

The Company operates on a calendar year ending each December 31 and on four calendar quarters ending on March 31, June 30, September 30 and December 31 of each year. Results of operations reported for interim periods are not necessarily indicative of results for the entire year.

The accompanying ~~notes are an integral part of these condensed financial statements.~~

~~M I Acquisitions, Inc.~~

~~Notes to Condensed~~Unaudited Consolidated Financial Statements

~~Note 1 — Organization, Plan of Business Operations and Going Concern Consideration~~

M I Acquisitions, Inc. (the “Company”) was incorporated in Delaware on April 23, 2015 as a blank check company whose objective is to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities (a “Business Combination”). The Company’s efforts to identify a prospective target business will not be limited to any particular industry or geographic region, although include the ~~Company intends to focus its search on target businesses operating in the technology, media and telecommunications industries.~~

~~At September 30, 2017, the Company had not yet commenced any operations.~~For the nine months ended September 30, 2017, the Company’s activity has been limited to the evaluation of business combination candidates, and the Company will not be generating any operating revenues until the closing and completion of an initial business combination.

The registration statement for the Company’s initial public offering was declared effective on September 13, 2016. The Company consummated a public offering of 5,000,000 units (“Units”) on September 19, 2016 (the “Offering”), generating gross proceeds of $50,000,000 and net proceeds of $47,981,581 after deducting $2,018,419 of transaction costs. In addition, the Company generated gross proceeds of $4,025,000 from the private placement of 402,500 units (the “Private Placement”) to certain initial stockholders (“Initial Stockholders”) of the Company. The Units sold pursuant to the Offering and the Private Placement were sold at an offering price of $10.00 per Unit. The Company also incurred additional issuance costs totaling $1,169,032, of which the deferred underwriting fee of $1,062,022 was unpaid as of September 30, 2017.

The underwriters exercised the over-allotment option in part and, on October 14, 2016, the underwriters purchased 310,109 Over-allotment Option Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $3,101,090 and net proceeds of $3,008,057 after deducting $93,033 of transaction costs. On October 14, 2016, simultaneously with the sale of the over-allotment Units, the Company consummated the private sale of an additional 18,607 private Units to one of the initial stockholders, generating gross proceeds of $186,070.

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Offering and Private Placement, although substantially all of the net proceeds are intended to be generally applied toward consummating a Business Combination. The Company’s Units, common stock and warrants are listed on the Nasdaq Capital Market (“NASDAQ”). Pursuant to the NASDAQ listing rules, the Company’s initial Business Combination must be with a target business or businesses whose collective fair market value is at least equal to 80% of the balance in the trust account at the time of the execution of a definitive agreement for such Business Combination, although this may entail simultaneous acquisitions of several target businesses. There is no assurance that the Company will be able to effect a Business Combination successfully.

Following the closing of the Offering and the Private Placement (including the partial exercise of the over-allotment option) an amount of $54,694,127 (or $10.30 per share sold to the public in the Offering included in the Units (“Public Shares”)) from the sale of the Units and Private Units is being held in a trust account (“Trust Account”) at J.P. Morgan Chase Bank maintained by American Stock Transfer & Trust Company, acting as trustee, and may be invested in money market funds meeting the applicable conditions of Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended, and that invest solely in U.S. treasuries or United States bonds, treasuries or notes having a maturity of 180 days or less. The funds in the Trust Account may not be released until the earlier of (i) the consummation of the Company’s initial Business Combination and (ii) the Company’s failure to consummate a Business Combination within the prescribed time. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. However, the interest earned on the Trust Account balance may be released to the Company to pay the Company’s tax obligations. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Company’s insiders will agree to be liable under certain circumstances to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or vendors or other entities that are owed money by the Company for service rendered, contracted for or products sold to the Company. However, they may not be able to satisfy those obligations should they arise. With these exceptions, expenses incurred by the Company may be paid prior to a Business Combination only from the net proceeds of the Proposed Public Offering not held in the Trust Account; provided, however, that in order to meet its working capital needs following the consummation of the Proposed Public Offering, the Company’s Initial Stockholders, officers and directors or their affiliates may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of the Company’s initial Business Combination, without interest, or, at the lender’s discretion, up to $200,000 of the notes may be converted upon consummation of the Company’s Business Combination into additional Private Units at a price of $10.00 per Unit. If the Company does not complete a Business Combination, the loans would not be repaid.

The Company will either seek stockholder approval of any Business Combination at a meeting called for such purpose at which stockholders may seek to convert their shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, or provide stockholders with the opportunity to sell their shares to the Company by means of a tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. The Company will proceed with a Business Combination only if it will have net tangible assets of at least $5,000,001 upon consummation of the Business Combination and, solely if stockholder approval is sought, a majority of the outstanding common sharesaccounts of the Company ~~voted are voted~~and its majority-owned subsidiaries. All material intercompany balances and transactions have been eliminated in favor of the Business Combination. Notwithstanding the foregoing, a public stockholder, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking conversion rights with respect to 20% or more of the common shares sold in the Offering. Accordingly, all shares purchased by a holder in excess of 20% of the shares sold in the Offering will not be converted to cash.

In connection with any stockholder vote required to approve any Business Combination, the Initial Stockholders agreed (i) to vote any of their respective shares, including the common shares sold to the Initial Stockholders in connection with the organization of the Company (the “Initial Shares”), common shares included in the Private Units sold in the Private Placement, and any common shares which were initially issued in connection with the Offering, whether acquired in or after the effective date of the Offering, in favor of the initial Business Combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account or seek to sell their shares in connection with any tender offer the Company engages in.

Pursuant to the Company’s amended and restated Certificate of Incorporation if the Company is unable to complete its initial Business Combination within 18 months from the date of the Offering, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the outstanding public shares and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining holders of common stock and the Company’s board of directors, dissolve and liquidate. However, if the Company anticipates that it may not be able to consummate its initial Business Combination within 18 months, the Company may extend the period of time to consummate a Business Combination up to three times, each by an additional month (for a total of up to 21 months to complete a Business Combination). Pursuant to the terms of the Company’s amended and restated articles of incorporation and the trust agreement entered into between the Company and American Stock Transfer & Trust Company, in order to extend the time available for the Company to consummate its initial Business Combination, the Company’s insiders or their affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the trust account $132,753 ($0.025 per unit), up to an aggregate of $398,259, or $0.075 per unit, on or prior to the date of the applicable deadline, for each one month extension. In the event that the Company receives notice from its insiders five days prior to the applicable deadline of their intent to effect an extension, the Company intends to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, the Company intends to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. The Company’s insiders and their affiliates or designees are not obligated to fund the trust account to extend the time for the Company to complete its initial Business Combination. To the extent that some, but not all, of the Company’s insiders, decide to extend the period of time to consummate the initial Business Combination, such insiders (or their affiliates or designees) may deposit the entire $398,259. If the Company is unable to consummate an initial Business Combination and is forced to redeem 100% of the outstanding public shares for a pro rata portion of the funds held in the Trust Account, each holder will receive a pro rata portion of the amount then in the Trust Account less income and franchise tax obligations. Holders of warrants will receive no proceeds in connection with the liquidation. The Initial Stockholders and the holders of Private Units will not participate in any redemption distribution with respect to their initial shares and Private Units, including the common stock included in the Private Units.

To the extent the Company is unable to consummate a business combination, the Company will pay the costs of liquidation from the remaining assets outside of the trust account. If such funds are insufficient, the insiders have agreed to pay the funds necessary to complete such liquidation (currently anticipated to be no more than $15,000) and have agreed not to seek repayment of such expenses.

~~Going Concern~~

~~The accompanying condensed financial statements~~consolidation. These Unaudited Consolidated Financial Statements have been prepared ~~assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities~~ in the normal course of business. As of September 30, 2017, the Company had $479,382 in cash and cash equivalents held outside Trust Account, $265,314 in interest income available from the Company’s investments in the Trust Account to pay its franchise and income tax obligations, and a working capital deficit of $59,089. Further, the Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company’s plans to raise capital or to consummate the initial Business Combination may not be successful. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Based on the foregoing, the Company may have insufficient funds available to operate its business through the earlier of consummation of a Business Combination or March 19, 2018 (if an extension is not completed). Following the initial Business Combination, if cash on hand is insufficient, the Company may need to obtain additional financing in order to meet its obligations. The Company cannot be certain that additional funding will be available on acceptable terms, or at all.

~~The accompanying condensed~~accordance with GAAP for interim financial ~~statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.~~

~~Note 2 — Significant Accounting Policies~~

~~Basis of presentation~~

~~The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and~~information pursuant to the rules and regulations of the ~~Securities and Exchange Commission (“SEC”) for interim~~SEC. The Consolidated Balance Sheet as of December 31, 2022 was derived from the audited financial ~~information and~~statements included in the ~~instructions to~~Company's Annual Report on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. The Company has evaluated subsequent events through the issuance of this Form 10-Q. Operating results for the quarter ended September 30, 2017 are not necessarily indicative of the results that may be expected10-K for the year ended December 31, ~~2017~~2022 but does not include all disclosures required by GAAP for annual financial statements.

NCI represents the equity interest in certain consolidated entities in which the Company owns less than 100% of the profit interests. Changes in the Company's ownership interest while the Company retains its controlling interest are accounted for as equity transactions. As of June 30, 2023, there was no income or ~~any future~~loss attributable to NCI in accordance with the applicable operating agreements.

In the opinion of the Company's management, all known adjustments necessary for a fair presentation of the Unaudited Consolidated Financial Statements for interim ~~period. The accompanying unaudited condensed financial statements~~periods have been made. These adjustments consist of normal recurring accruals and estimates that affect the carrying amounts of assets and liabilities. These Unaudited Consolidated Financial Statements should be read in conjunction with the ~~Company’s financial statements~~Consolidated Financial Statements and notes thereto included in the ~~Company’s~~Company's Annual Report on Form 10-K ~~filed with~~for the ~~Securities and Exchange Commission on March 13, 2017.~~

~~Emerging Growth Company~~

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statement with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

~~Cash and Cash Equivalents~~

~~The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.~~

~~Marketable securities held in Trust Account~~

The amounts held in the Trust Account represent substantially all of the proceeds of the Initial Public Offering and are classified as restricted assets since such amounts can only be used by the Company in connection with the consummation of a Business Combination. Except with respect to interest earned on the funds held in the Trust Account that may be released to pay income or other tax obligations, the proceeds will not be released from the Trust Account until the earlier of the completion of a Business Combination or the redemption of 100% of the outstanding public shares if we have not completed a Business Combination in the required time period. As of September 30, 2017, marketable securities held in the Trust Account consisted of $54,948,047 in United States Treasury Bills with an original maturity of six months or less. During the nine monthsyear ended September 30, 2017, the Company withdrew interest income totaling $71,702 to be utilized for payment of tax obligations. Of this amount, $22,607 was returned to the Company for overpayment of its tax obligations and deposited into the Trust Account.

~~Fair value of financial instruments~~

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “~~Fair Value Measurements and Disclosures~~~~,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.~~

December 31, 2022.

Use of Estimates

The preparation of ~~financial statements~~Unaudited Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the ~~financial statements.~~Unaudited Consolidated Financial Statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates.

~~Concentration~~

Accounts Receivable, net

Accounts receivables include dues from the Company's sponsor banks (for revenues earned, net of related interchange and processing fees, and do not bear interest), agents, merchants and other customers, stated net of allowance for current expected credit ~~risk~~

~~Financial instruments that potentially subject~~losses for any uncollectible amounts.

Foreign Currency

The Company's reporting currency is the U.S. dollar. The functional currency of the Indian subsidiary of the Company is Indian Rupee (i.e. local currency of Republic of India). Accordingly, assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate on the last day of the reporting period. Revenues and expenses are translated using the average exchange rate in effect during the reporting period. Translation adjustments are reported as a component of accumulated other comprehensive income (loss).

Table of Contents

Recently Adopted Accounting Standards

Credit Losses

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). This new guidance changes how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 replaces the current "incurred loss" model with an "expected loss" model. Under the "incurred loss" model, a loss (or allowance) is recognized only when an event has occurred (such as a payment delinquency) that causes the entity to ~~concentration~~believe that a loss is probable (i.e., that it has been "incurred"). Under the "expected loss" model, a loss (or allowance) is recognized upon initial recognition of the asset that reflects all future events that leads to a loss being realized, regardless of whether it is probable that the future event will occur. The Company adopted ASU 2016-13 effective January 1, 2023 using the modified-retrospective approach. The implementation of ASU 2016-13 did not have a material impact on the Company's Unaudited Consolidated Financial Statements. Additionally, the Company modified its accounting policy to conform with the requirements of the adoption of this standard.

Reference Rate Reform

In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, such as the SOFR. An entity that makes this election would not have to remeasure the contract at the modification date or reassess a previous accounting determination. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), Scope ASU 2021-01, which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The Company adopted the optional expedients of Topic 848 on June 30, 2023 upon the amendments of its Credit Agreement (see Note 8. Debt Obligations) and the Certificate of Designation (see Note 9. Redeemable Senior Preferred Stock and Warrants), which transitioned the Company's reference rates from LIBOR to SOFR. The adoption of this standard did not have a material impact on the Company's Unaudited Consolidated Financial Statements.

2. Acquisitions

Ovvi Acquisition

On November 18, 2022, the Company completed its acquisition of certain assets and assumption of a certain liability of Ovvi, LLC, under an asset purchase agreement through its wholly-owned subsidiary, Priority Ovvi, LLC ("Ovvi"). The acquisition was accounted for as a business combination using the acquisition method of accounting. Prior to this acquisition, the business operated as a SaaS proprietary platform for the restaurant, hospitality and retail industries by providing complete all-in-one point of sale software and hardware systems, comprehensive ancillary services including fraud detection and mitigation, and processing services for various types of cards including credit ~~risk~~cards, debit cards, private label cards and prepaid cards. This business is reported within the Company's SMB Payments reportable segment. Transaction costs were not material and were expensed. The non-voting incentive shares issued to the seller will be evaluated at each reporting period to determine whether or not profit or loss should be allocated based on the subsidiary's operating agreement. The preliminary purchase price allocation is set forth in the table below and is expected to be finalized as soon as practicable, but no later than one year from the acquisition date.

Table of Contents


(in thousands)
Consideration:
Cash(1)	$	5,026
Total purchase consideration	5,026
Fair value of class B shares issued in Ovvi (NCI)(3)	659
Total enterprise value of business acquired(3)	$	5,685

Recognized amounts of assets acquired and liabilities assumed:
Accounts receivable	$	110
Inventory	142
Property, equipment and software, net	20
Goodwill(3)	3,393
Intangible assets(2)	2,021
Other non-current asset	152
Other non-current liability	(153)
Total enterprise value of business acquired(3)	$	5,685

(1)Includes $50,000 withheld for inventory acquired which was subsequently released in March 2023.

(2)The intangible assets consist of $1.3 million for technology, $0.4 million for customer relationships and $0.3 million for trade names.

(3)During the three months ended March 31, 2023, the Company recorded measurement period adjustments due to additional information received related to the valuation of the Class B shares. This measurement period adjustment resulted in a decrease of $0.6 million in goodwill and NCI.

Other Acquisition

The Company also completed another acquisition during 2022 for approximately $1.2 million, which was not material. The acquisition did not meet the definition of a business, therefore it was accounted for as an asset acquisition under which the cost of acquisition was allocated to the technology asset acquired.

3. Revenues

Disaggregation of Revenues

The following table presents a disaggregation of our consolidated revenues by type for the three and six months ended June 30, 2023 and 2022:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Revenue Type:
Merchant card fees	$	144,524	$	139,793	$	294,168	$	267,745
Money transmission services	23,718		17,183		45,124		33,466
Outsourced services and other services	10,582		6,887		21,587		13,984
Equipment	3,466		2,567		6,439		4,474
Total revenues(1),(2)	$	182,290	$	166,430	$	367,318	$	319,669

(1)Includes contracts with an original duration of one year or less and variable consideration under a stand-ready series of distinct days of service. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material.

Table of Contents

(2)Approximately $7.2 million and $12.2 million of interest income for the three and six months ended June 30, 2023 and $0.8 million and $1.4 million for the three and six months ended June 30, 2022, respectively, is included in outsourced services and other services revenue in the table above. Approximately $0.3 million and $0.6 million of interest income for the three and six months ended June 30, 2023, and $0.1 million and $0.2 million three and six months ended June 30, 2022, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss and not reflected in the table above.

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


	Three Months Ended June 30, 2023
(in thousands)	Merchant Card Fees		Money Transmission Services		Outsourced and Other Services		Equipment		Total
Segment
SMB Payments	$	143,544	$	—	$	885	$	3,466	$	147,895
B2B Payments	954		—		2,017		—		2,971
Enterprise Payments	26		23,718		7,680		—		31,424
Total revenues	$	144,524	$	23,718	$	10,582	$	3,466	$	182,290


	Six months ended June 30, 2023
(in thousands)	Merchant Card Fees		Money Transmission Services		Outsourced and Other Services		Equipment		Total
Segment
SMB Payments	$	292,232	$	—	$	4,157	$	6,439	$	302,828
B2B Payments	1,881		—		3,876		—		5,757
Enterprise Payments	55		45,124		13,554		—		58,733
Total revenues	$	294,168	$	45,124	$	21,587	$	6,439	$	367,318


	Three Months Ended June 30, 2022
(in thousands)	Merchant Card Fees		Money Transmission Services		Outsourced and Other Services		Equipment		Total
Segment
SMB Payments	$	139,163	$	—	$	776	$	2,567	$	142,506
B2B Payments	630		—		4,665		—		5,295
Enterprise Payments	—		17,183		1,446		—		18,629
Total revenues	$	139,793	$	17,183	$	6,887	$	2,567	$	166,430


	Six Months Ended June 30, 2022
(in thousands)	Merchant Card Fees		Money Transmission Services		Outsourced and Other Services		Equipment		Total
Segment
SMB Payments	$	266,550	$	—	$	1,441	$	4,474	$	272,465
B2B Payments	1,195		—		10,025		—		11,220
Enterprise Payments	—		33,466		2,518		—		35,984
Total revenues	$	267,745	$	33,466	$	13,984	$	4,474	$	319,669

Table of Contents

Deferred revenues were not material for the three and six months ended June 30, 2023 and 2022.

Contract Assets and Contract Liabilities

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

Contract liabilities were $0.5 million and $0.2 million as of June 30, 2023 and December 31, 2022, respectively. Substantially all of these balances are recognized as revenue within 12 months.

Net contract assets were not material for any period presented.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were not material for the three and six months ended June 30, 2023 and June 30, 2022.

4. 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. The standards of the card networks require possession of funds during the settlement process by a member bank which controls the clearing transactions. Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated obligations are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Member banks held merchant funds of $97.2 million and $110.3 million at June 30, 2023 and December 31, 2022, respectively.

Exception items that become the liability of the Company are recorded as merchant losses, a component of cost of revenue in the Company's Unaudited Consolidated Statements of Operations and Comprehensive Loss. Exception items that the Company is still attempting to collect from the merchants through the funds settlement process or merchant reserves are recognized as settlement assets and customer/subscriber account balances in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. Expenses for merchant losses for the three and six months ended June 30, 2023 were $1.1 million and $2.1 million, respectively. Expenses for merchant losses for the three and six months ended June 30, 2022 were $1.0 million and $2.1 million, respectively.

B2B Payments Segment

In the Company's B2B Payments segment, the Company earns revenues 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 that the transactions are settled with the customer payees. Amounts due to customer payees that are held by the Company in company-owned bank accounts are included in restricted cash. Amounts due to customer payees that are held in bank-owned FBO accounts are not assets of the Company, and the associated obligations are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Bank-owned FBO accounts held funds of $58.0 million and $42.7 million at June 30, 2023 and December 31, 2022, respectively. Company-owned bank accounts held $2.0 million and $1.8 million at June 30, 2023 and December 31, 2022, respectively, which are included in restricted cash and settlement and customer/subscriber account obligations in the Company's Unaudited Consolidated Balance Sheets.

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 ~~a financial institution which,~~certain permitted investments, and the return on such investments contributes to the Company's net cash inflows.

Table of Contents

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 Unaudited Consolidated Balance Sheets.

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 $10.1 million and $6.1 million at ~~times may exceed the Federal depository insurance coverage of $250,000.~~ June 30, 2023 and December 31, 2022, respectively.

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


(in thousands)	June 30, 2023		December 31, 2022
Settlement Assets:
Card settlements due from merchants, net of estimated losses	$	2,106	$	444
Customer/Subscriber Account Balances:
Cash and cash equivalents	708,599		531,574

Total settlement assets and customer/subscriber account balances	$	710,705	$	532,018

Settlement and Customer/Subscriber Account Obligations:
Customer account obligations	$	692,630	$	516,086
Subscriber account obligations	15,969		15,488
Total customer/subscriber account obligations	708,599		531,574
Due to customers' payees(1)	1,952		1,766
Total settlement and customer/subscriber account obligations	$	710,551	$	533,340

(1)The related assets are included in restricted cash on our Unaudited Consolidated Balance Sheets.

5. Notes Receivable

The Company ~~has not experienced losses~~had notes receivable of $5.5 million and $4.7 million as of June 30, 2023 and December 31, 2022, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on ~~these accounts~~the Company's Unaudited Consolidated Balance Sheets. The notes receivable carried weighted-average interest rates of 18.1% and ~~management believes~~15.4% as of June 30, 2023 and December 31, 2022. The notes receivable are comprised of notes receivable from ISOs, and under the terms of the agreements the Company preserves the right to hold back residual payments due to the ISOs and to apply such residuals against future payments due to the Company. As of June 30, 2023 and December 31, 2022, the Company had no allowance for doubtful notes receivable.

As of June 30, 2023, the principal payments for the Company's notes receivable are due as follows:


(in thousands)
Twelve months ending June 30,
2024	$	2,530
2025	1,178
2026	971
2027	746
After 2027	123
Total	$	5,548

Table of Contents

6. Property, Equipment and Software

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


(in thousands)	June 30, 2023		December 31, 2022
Computer software	$	70,203	$	64,197
Equipment	13,903		13,302
Leasehold improvements	7,194		6,990
Furniture and fixtures	2,974		2,909
Property, equipment and software	94,274		87,398
Less: Accumulated depreciation	(63,976)		(58,409)
Capital work in-progress	8,686		5,698
Property, equipment and software, net	$	38,984	$	34,687


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022


Depreciation expense	$	2,815	$	2,311	$	5,572	$	4,537

Computer software represents purchased software and internally developed software that is used to provide the Company's services to its customers.

7. Goodwill and Other Intangible Assets

Goodwill

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


(in thousands)	June 30, 2023		December 31, 2022
SMB Payments	$	124,028	$	124,625
Enterprise Payments	244,712		244,712
Total	$	368,740	$	369,337

The following table summarizes the changes in the carrying value of goodwill:


(in thousands)	Amount
Balance at December 31, 2022	$	369,337
Purchase price adjustment for Ovvi	(597)


Balance at June 30, 2023	$	368,740

As of June 30, 2023, the Company is not ~~exposed to significant risks~~aware of any triggering events for impairment that have occurred since the last annual impairment test.

Table of Contents

Other Intangible Assets

Other intangible assets consisted of the following:


	June 30, 2023						Weighted-average Useful Life
(in thousands, except weighted-average data)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Other intangible assets:
ISO and referral partner relationships	$	175,300	$	(30,166)	$	145,134	14.8
Residual buyouts	136,064		(86,239)		49,825		6.3
Customer relationships	96,000		(89,298)		6,702		8.2
Merchant portfolios	83,350		(49,281)		34,069		6.5
Technology	51,156		(20,474)		30,682		8.9
Trade names	3,183		(2,267)		916		11.4
Non-compete agreements	3,390		(3,390)		—		0.0
Money transmission licenses(1)	2,100		—		2,100
Total	$	550,543	$	(281,115)	$	269,428	9.6

(1)These assets have an indefinite useful life.


	December 31, 2022						Weighted-average Useful Life
(in thousands, except weighted-average data)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Other intangible assets:
ISO and referral partner relationships	$	175,300	$	(24,021)	$	151,279	14.8
Residual buyouts	132,325		(76,316)		56,009		6.6
Customer relationships	96,000		(83,298)		12,702		8.2
Merchant portfolios	76,423		(43,170)		33,253		6.7
Technology	50,963		(18,566)		32,397		8.4
Trade names	3,183		(2,129)		1,054		11.6
Non-compete agreements	3,390		(3,390)		—		0.0
Money transmission licenses(1)	2,100		—		2,100
Total	$	539,684	$	(250,890)	$	288,794	9.7

(1)These assets have an indefinite useful life.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022


Amortization expense	$	15,165	$	15,194	$	30,456	$	30,321

As of June 30, 2023, there were no impairment indicators present.

Table of Contents

8. Debt Obligations

Outstanding debt obligations consisted of the following:


(in thousands)	June 30, 2023		December 31, 2022
Term facility - matures April 27, 2027, interest rates of 11.23%(1) and 9.82% at June 30, 2023 and December 31, 2022, respectively	$	607,175	$	610,700
Revolving credit facility - $55.0 million line as of June 30, 2023 and $40.0 million as of December 31, 2022, matures April 27, 2026, interest rates of 9.94%(2) and 8.82% at June 30, 2023 and December 31, 2022, respectively	5,500		12,500
Total debt obligations	612,675		623,200
Less: current portion of long-term debt	(6,200)		(6,200)
Less: unamortized debt discounts and deferred financing costs	(16,543)		(18,074)
Long-term debt, net	$	589,932	$	598,926

(1)Considering the last interest pricing date was May 26, 2023, this rate is calculated based on ~~such accounts.~~

~~Net Income (Loss) Per Common Share~~

~~The Company complies with accounting~~the three-month LIBOR and ~~disclosure requirements ASC Topic 260, “~~~~Earnings Per Share~~~~.” Net income (loss) per common share~~applicable margin.

(2)Considering the last interest pricing date was June 28, 2023, this rate is ~~computed by dividing net income (loss)~~calculated based on the one-month LIBOR and applicable ~~to common stockholders by~~margin.

Interest Expense and Amortization of Deferred Loan Costs and Discounts

Deferred financing costs and debt discounts are amortized using the ~~weighted average number~~effective interest method over the remaining term of ~~common shares~~the respective debt and are recorded as a component of interest expense. Unamortized deferred financing costs and debt discounts are included in long-term debt on the Company's Unaudited Consolidated Balance Sheets.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Interest expense(1),(2)	$	17,765	$	12,335	$	35,464	$	23,870

(1)Included in interest expense is $0.1 million and $0.2 million related to the ~~extent dilutive,~~accretion of contingent considerations from acquisitions for the ~~incremental number~~three and six months ended June 30, 2023, respectively, $0.6 million and $0.6 million for the three and six months ended June 30, 2022, respectively.

(2)Interest expense included amortization of ~~shares~~deferred financing costs and debt discounts of ~~common stock~~$0.9 million and $1.8 million for the three and six months ended June 30, 2023, respectively, and $0.9 million and $1.7 million for the three and six months ended June 30, 2022, respectively.

Third Amendment to ~~settle warrants, as calculated using~~ the ~~treasury stock method. An aggregate~~April 2021 Credit Agreement

On June 30, 2023, the Credit Agreement of ~~4,718,573 shares of common stock subject~~the Company was amended to ~~possible redemption at September 30, 2017, have been excluded from~~incorporate the following:

■Reference rate: The reference rate for the calculation of ~~basic loss~~interest on the Company’s term loan and revolving credit facility was amended from LIBOR to SOFR effective June 30, 2023. Per the amended terms, the outstanding borrowings under the Credit Agreement interest will accrue using the SOFR rate plus a term SOFR adjustment plus an applicable margin per ~~ordinary share since such shares, if redeemed, only participate~~year, subject to a SOFR floor of 1.00% per year. The applicable interest rate as of June 30, 2023, for the revolving credit facility based on one-month SOFR was 9.97% and for the term facility based on three-month SOFR was 11.28%.

Table of Contents

■Increase in ~~their pro rata share~~the revolving credit facility: The amendments also resulted in an increase in the Company’s revolving credit facility from $40 million to $65 million, with $10 million of this increase contingent upon closing of the ~~trust earnings. At~~acquisition of assets of Plastiq, Inc (See Note 17 . Subsequent Events). As of June 30, 2023, the acquisition of assets of Plastiq, Inc. had not closed.

Debt Covenants

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

If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving credit facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio. If applicable, the maximum permitted Total Net Leverage Ratio is: 1) 6.50:1.00 at each fiscal quarter ended September 30, ~~2016, weighted average shares were reduced~~2021 through June 30, 2022; 2) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023; and 3) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter. As of June 30, 2023, the Total Net Leverage Ratio was not applicable and the Company was in compliance with the covenants in the Credit Agreement.

9. Redeemable Senior Preferred Stock and Warrants

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


(in thousands)	June 30, 2023		December 31, 2022
Redeemable senior preferred stock	$	225,000	$	225,000
Accumulated unpaid dividend	34,342		25,498
Dividend payable	—		5,341
Redemption value	259,342		255,839
Less: unamortized discounts and issuance costs	(18,611)		(20,260)
Redeemable senior preferred stock, net of discounts and issuance costs:	$	240,731	$	235,579

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
December 31, 2022	225	$	235,579
Payment of cash portion of dividend and ticking fee outstanding at December 31, 2022	—	(5,341)
Unpaid dividend on redeemable senior preferred stock	—	4,383
Accretion of discounts and issuance costs	—	818
March 31, 2023	225	235,439
Unpaid dividend on redeemable senior preferred stock	—	4,461
Accretion of discounts and issuance costs	—	831



June 30, 2023	225	$	240,731

At June 30, 2023, the dividend rate for the redeemable senior preferred stock was equal to the three-month LIBOR rate (minimum of 1.00%) plus an ~~aggregate~~applicable margin of ~~187,500~~12.00% (capped at 22.50%)per year, with a minimum quarterly cash dividend payment of 5.00% plus the three-month LIBOR rate per year. 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

Table of Contents

if the Company fails to obtain the required stockholder 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 June 30, 2023 and December 31, 2022, was 17.2% and 15.7% respectively.

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Dividends paid in cash	$	6,473	$	3,571	$	12,567	$	7,076
Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock	4,461		4,161		8,844		8,251
Dividends declared	$	10,934	$	7,732	$	21,411	$	15,327

In 2021, the Company issued warrants to purchase up to 1,803,841 shares of ~~common stock that~~the Common Stock, at an exercise price of $0.001. As of June 30, 2023, 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 ~~subject to forfeiture if~~recorded at their inception date relative fair value and are included in additional paid-in capital on the ~~over-allotment option is not exercised by the underwriters. At September~~Company's Unaudited Consolidated Balance Sheets.

On June 30, ~~2017,~~2023, the Company ~~did not have any dilutive securities and~~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%), plus the three-month term SOFR spread adjustment of 0.26% plus the applicable margin of 12%. All other ~~contracts that could, potentially, be exercised or converted into common stock and then share~~terms in the ~~earnings~~agreement were unchanged. The revised rate will be applicable to the LIBOR/SOFR reset date as of and after June 30, 2023. For the three and six month period ended June 30, 2023, LIBOR continued to be the reference rate for calculation of the ~~Company under the treasury stock method. As a result, diluted loss per common share is the same as basic loss per common share~~dividend.

10. Income Taxes

The Company's consolidated effective income tax rate for the ~~period.~~

~~Reconciliation~~three and six months ended June 30, 2023, was 135.1% and 201.3%, respectively, compared to a consolidated effective income tax rate of ~~net income (loss) per common share~~

~~The Company’s net income is adjusted~~61.9% and 147.9% for the ~~portion~~three and six months ended June 30, 2022, respectively. The effective rates differed from the statutory rate of ~~income that is attributable~~21.0% primarily due to ~~common stock subject to redemption, as these shares only participate~~an increase in the valuation allowance against certain business interest carryover deferred tax assets.

Valuation Allowance for Deferred Income Tax Assets

The Company considers all available positive and negative evidence to determine whether sufficient taxable income will be generated in the future to permit realization of the ~~Trust Account and not the losses of the Company. Accordingly, basic and diluted loss per common share is calculated as follows:~~

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

2017 2016
Net income (loss) $ 152,350 $ (36,382 )
Less: Income attributable to common shares subject to redemption (108,127 ) 47,084
Adjusted net income (loss) $ 44,223 $ 10,702

Weighted average shares outstanding, basic and diluted 2,344,454 1,363,737

Basic and diluted net income (loss) per common share $ 0.02 $ 0.01

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

2017 2016
Net loss $ (111,519 ) $ (43,646 )
Less: Income attributable to common shares subject to redemption (210,500 ) 47,084
Adjusted net income (loss) $ (322,019 ) $ 3,438

Weighted average shares outstanding, basic and diluted 2,327,754 1,288,329

Basic and diluted net loss per common share $ (0.14 ) $ 0.00

~~Common stock subject to possible conversion~~

~~The Company accounts for its common stock subject to possible conversion in~~existing deferred tax assets. In accordance with the ~~guidance enumerated in~~provisions of ASC ~~480 “~~~~Distinguishing Liabilities from Equity~~”. Common stock subject to mandatory conversion is classified as a liability instrument and is measured at fair value. Conditionally convertible common stock (including common shares that feature conversion rights that are either within the control of the holder or subject to conversion upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, common stock is classified as stockholders’ equity. The Company’s common stock features certain conversion rights that are considered by740, Income Taxes, the Company is required to be outside of the Company’s control and subject to the occurrence of uncertain future events. Accordingly, the common stock subject to possible conversion is presented as temporary equity, outside of the stockholders’ equity section of the Company’s condensed balance sheet.

~~Income Taxes~~

~~The Company accounts for income taxes under ASC 740 “~~~~Income Taxes~~”. ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requiresprovide a valuation allowance ~~to be established~~against deferred income tax assets when it is ~~more~~"more likely than ~~not~~not" that some portion or all ~~or a portion~~ of the deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions.

Based on ~~the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since~~management's assessment, as of June 30, 2023, the Company was incorporated on April 23, 2015, the evaluation was performed for the 2015 and 2016 tax year. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.

~~The Company’s policy for recording interest and penalties associated with audits is~~continues to record ~~such expense as~~ a ~~component of income tax~~full valuation allowance against non-deductible interest expense. There were no amounts accrued for penalties or interest as of or during the period from January 1, 2017 through September 30, 2017. Management is currently unaware of any issues under review that could result in significant payments, accruals or material deviations from its position.

~~Related Parties~~

~~The Company follows subtopic ASC 850-10 for the identification of related parties and disclosure of related party transactions.~~

Pursuant to Section 850-10-20, the related parties include: (a.) affiliates of the Company (“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act); (b.) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of Section 825–10–15, to be accounted for by the equity method by the investing entity; (c.) trusts for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of management; (d.) principal owners of the Company; (e.) management of the Company; (f.) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and (g.) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: (a.) the nature of the relationship(s) involved; (b.) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; (c.) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and (d.) amounts due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

~~Settlement Income~~

During the three and nine months ended September 30, 2017, the Company received $427,701 from an entity with which the Company was negotiating a business combination pursuant to a Letter of Intent originally executed in February 2017. During quarter ended June 30, 2017, the Letter of Intent expired. The amount received was approximately the amount of the expenses the Company incurred in pursuing that business combination transaction.

~~Subsequent Events~~

~~The Company’s management reviewed all material events that have occurred after the balance sheet date through the date which these financial statements were issued.~~

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.~~

~~Note 3 — Initial Public Offering~~

On September 19, 2016, the Company sold 5,000,000 Units at a price of $10.00 per Unit generating gross proceeds of $50,000,000 and net proceeds of $47,981,581 after deducting $2,018,419 of transaction costs. In addition, the Company granted the Underwriter the option to purchase an additional 750,000 Units solely to cover over allotments, if any, pursuant to a 45-day over-allotment option granted to the Underwriter. The underwriters exercised the over-allotment option in part and, on October 14, 2016, the underwriters purchased 310,109 Over-allotment Option Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $3,101,090 and net proceeds of $3,008,057 after deducting $93,033 of transaction costs.

Each Unit consists of one share of common stock in the Company, and one Warrant (“Warrant”). Each Warrant entitles the holder to purchase one share of common stock at a price of $11.50 per share commencing on the later of 30 days after the Company’s completion of its initial Business Combination or September 14, 2017, and expiring five years from the completion of the Company’s initial Business Combination. The Company may redeem the Warrants at a price of $0.01 per Warrant upon 30 days’ notice, only in the event that the last sale price of the common shares is at least $16.00 per share for any 20 trading days within a 30-trading day period (“30-Day Trading Period”) ending on the third day prior to the date on which notice of redemption is given, provided there is a current registration statement in effect with respect to the common shares underlying such Warrants during the 30 day redemption period. If the Company redeems the Warrants as described above, management will have the option to require all holders that wish to exercise Warrants to do so on a “cashless basis.” In accordance with the warrant agreement relating to the Warrants to be sold and issued in the Offering the Company is only required to use its best efforts to maintain the effectiveness of the registration statement covering the Warrants. If a registration statement is not effective within 90 days following the consummation of a Business Combination, Warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act of 1933, as amended. In the event that a registration statement is not effective at the time of exercise or no exemption is available for a cashless exercise, the holder of such Warrant shall not be entitled to exercise such Warrant for cash and in no event (whether in the case of a registration statement being effective or otherwise) will the Company be required to net cash settle the Warrant exercise. If an initial Business Combination is not consummated, the Warrants will expire and will be worthless.

~~Note 4 — Private Units~~

Simultaneously with the Offering, the Initial Shareholders of the Company purchased an aggregate of 421,107 Private Units at $10.00 per Private Unit (for an aggregate purchase price of $4,211,070) from the Company. All of the proceeds received from these purchases were placed in the Trust Account.

The Private Units are identical to the Units sold in the Offering except the Warrants included in the Private Units will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. Additionally, the holders of the Private Units have agreed (A) to vote the shares underlying their Private Units in favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s amended and restated certificate of incorporation with respect to the Company’s pre-Business Combination activities prior to the consummation of such a Business Combination unless the Company provides dissenting Public Stockholders with the opportunity to convert their public shares in connection with any such vote, (C) not to convert any shares underlying the Private Units into the right to receive cash from the Trust Account in connection with a stockholder vote to approve an initial Business Combination or a vote to amend the provisions of the Company’s amended and restated certificate of incorporation relating to shareholders’ rights or pre-Business Combination activity or sell their shares to the Company in connection with a tender offer the Company engages in and (D) that the shares underlying the Private Units shall not participate in any liquidating distribution upon winding up if a Business Combination is not consummated. The purchasers have also agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of an initial Business Combination.

~~Note 5 — Notes Payable~~

On July 1, 2015, the Company issued a $55,000 principal amount unsecured promissory note. The note was non-interest bearing and was payable on the consummation of the Offering. On September 26, 2016, the Company amended the agreement with lender and outstanding balance was amended to $27,500. The note is now due upon completion of an initial business combination. Due to the short-term nature of the note, the fair value of the note approximates the carrying amount.

~~Note 6 — Commitments~~

~~Underwriting Agreement~~

The Company entered into an agreement with the underwriters of the Offering (“Underwriting Agreement”). The Underwriting Agreement required the Company to pay an underwriting discount of 3.0% of the gross proceeds of the Offering as an underwriting discount and incur a deferred underwriting discount of up to 2.0% for an aggregate underwriting discount of 5.0% of the gross proceeds of the Offering, in each case as set forth in the Underwriting Agreement. The Company will ~~pay~~continue to evaluate the ~~deferred underwriting fee at the closing~~realizability of the Business Combination. The underwriters also purchased an interest in M SPAC Holdings I LLC, an entity controlled by the Company’s insiders, which entitles it to a beneficial interest in 63,184 insider shares.

The Underwriting Agreement granted Chardan Capital Markets, LLC a right of first refusal, for a period of thirty-six months from the closing of the Offering, to act as lead investment banker, lead book-runner, and/or lead placement agent with 33% of the economics or 25% if three investment banks are involved in the transaction, for any public or private equity and debt offerings during such period.

The Underwriting Agreement will provide that the Company will pay Chardan Capital Markets, LLC a warrant solicitation fee of five percent (5%) of the exercise price of each public warrant exercised during the period commencing on the later of 12 months from the closing of the Proposed Public Offering or 30 days after the completion of the Company’s initial business combination including warrants acquired by security holders in the open market. The warrant solicitation fee will be payable in cash. There is no limitation on the maximum warrant solicitation fee payable to Chardan Capital Markets, LLC except to the extent it is limited by the number of warrants outstanding.

~~Purchase Option~~

The Company sold to the underwriters, for $100, a unit purchase option to purchase up to a total of 300,000 units exercisable at $12.00 per unit (or an aggregate exercise price of $3,600,000) commencing on the later of the consummation of a Business Combination and six months from September 13, 2016. The unit purchase option expires five years from September 13, 2016. The units issuable upon exercise of this option are identical to the Units being offered in the Offering. The Company has agreed to grant to the holders of the unit purchase option, demand and “piggy back” registration rights for periods of five and seven years, respectively, from September 13, 2016, including securities directly and indirectly issuable upon exercise of the unit purchase option.

The Company accounts for the fair value of the unit purchase option, inclusive of the receipt of a $100 cash payment, as an expense of the Offering resulting in a charge directly to stockholders’ equity. The Company estimates that the fair value of this unit purchase option was approximately $2,695,000 (or $8.98 per unit) using a Black-Scholes option-pricing model. The fair value of the unit purchase option to be granted to the placement agent is estimated as of the date of grant using the following assumptions: (1) expected volatility of 149%, (2) risk-free interest rate of 1.22% and (3) expected life of five years. The unit purchase option may be exercised for cash ornet deferred tax asset on a ~~“cashless”~~quarterly basis atand, as a result, the ~~holder’s option (except~~valuation allowance may change in the case of a forced cashless exercise upon the Company’s redemption of the Warrants, as described in Note 3), such that the holder may use the appreciated value of the unit purchase option (the difference between the exercise prices of the unit purchase option and the underlying Warrants and the market price of the Units and underlying common stock) to exercise the unit purchase option without the payment of any cash. The Company will have no obligation to net cash settle the exercise of the unit purchase option or the Warrants underlying the unit purchase option. The holder of the unit purchase option will not be entitled to exercise the unit purchase option or the Warrants underlying the unit purchase option unless a registration statement covering the securities underlying the unit purchase option is effective or an exemption from registration is available. If the holder is unable to exercise the unit purchase option or underlying Warrants, the unit purchase option or Warrants, as applicable, will expire worthless.

~~Registration Rights~~

The Initial Stockholders are entitled to registration rights with respect to their initial shares and the purchasers of the Private Units will be entitled to registration rights with respect to the Private Units (and underlying securities), pursuant to an agreement signed on September 13, 2016. The holders of the majority of the initial shares are entitled to demand that the Company register these shares at any time commencing three months prior to the first anniversary of the consummation of a Business Combination. The holders of the Private Units (or underlying securities) are entitled to demand that the Company register these securities at any time after the Company consummates a Business Combination. In addition, the holders have certain “piggy-back” registration rights on registration statements filed after the Company’s consummation of a Business Combination.

~~Administrative Service Fee~~

The Company, commencing on September 13, 2016, has agreed to pay an affiliate of the Company’s executive officers a monthly fee of $10,000 for general and administrative services due on the first of each month. During the three months ended September 30, 2017 and 2016, the Company incurred administrative fees of $30,000 and $5,667, respectively. During the nine months ended September 30, 2017 and 2016, the Company incurred administrative fees of $90,000 and $5,667, respectively.

~~In April 2017, the Company and its Sponsor have agreed to defer payment of the monthly administrative service fee until a~~ future ~~date which has yet to be determined by the Sponsor.~~

~~Note 7 — Stockholder’s Equity~~

~~Preferred Stock~~

periods.

11. Stockholders' Deficit

The Company is authorized to issue ~~1,000,000~~100,000,000 shares of preferred ~~shares with a par value of $0.001 per share~~stock with such ~~designation,~~designations, voting and other rights and preferences as may be determined from time to time by the ~~Company’s board~~Board of ~~directors.~~

Directors. As of ~~September~~June 30, ~~2017, there are no preferred shares~~2023 and December 31, 2022, the Company has not issued ~~or outstanding.~~

~~Common Stock~~

~~Amended and Restated Certificate of Incorporation~~

~~The Company’s Certificate of Incorporation was amended in connection with the Offering to reduce the Company’s authorized~~any shares of ~~common stock from 50,000,000~~preferred stock.

Table of Contents

Share Repurchase Program

During the second quarter of 2022, PRTH's Board of Directors authorized a general share repurchase program under which the Company may purchase up to ~~30,000,000.~~

2.0 million shares of its outstanding Common Stock for a total of up to $10.0 million. Under the terms of this plan, the Company may purchase shares through open market purchases, unsolicited or solicited privately negotiated transactions, or in another manner so long as it complies with applicable rules and regulations. The Company ~~is authorized~~has not repurchased any shares under the share repurchase program for the three and six months ended June 30, 2023.
June 30, 2023 December 31, 2022
in thousands, except share data, which is in whole units
Number of shares purchased(1)
— 1,309,374
Average price paid per share $ — $ 4.42
Total Investment(1)
$ — $ 5,791

(1)These amounts may differ from the repurchases of Common Stock amounts in the Unaudited Statements of Cash Flows due to ~~issue 30,000,000~~ shares withheld for taxes and unsettled share repurchases at the end of ~~common stock with a par value~~the quarter.

12. Stock-based Compensation

For the three and six months ended June 30, 2023 and 2022, stock-based compensation expense was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023	2022


Stock-based compensation expense	$	1,746	$	1,542	3,682	$	3,100

Income tax benefit for stock-based compensation was immaterial for the three and six months ended June 30, 2023 and 2022. No stock-based compensation has been capitalized.

2018 Plan

The Company's 2018 Plan initially provided for the issuance of ~~$0.001 per share.~~

~~On April 23, 2015, 1,437,500~~up to 6,685,696 shares of the ~~Company’s common stock were sold to~~Company's Common Stock. On March 17, 2022, the ~~Initial Stockholders at a price~~Company's Board of approximately $0.02 per share for an aggregate of $25,000. This number includes an aggregate of up to 187,500 shares that are subject to forfeiture if the over-allotment option is not exercised by the underwriters. All of these shares will be placed in escrow until (1) with respect to 50% of the shares, the earlier of six months after the date of the consummation of an initial Business Combination and the date on which the closing price of the Company’s common stock equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing after the Company’s initial business combination and (2) with respect to the remaining 50% of the insider shares, six months after the date of the consummation of an initial Business Combination, or earlier, in either case, if, subsequent to an initial Business Combination, the Company consummates a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s stockholders having the right to exchange their shares for cash, securities or other property. On November 11, 2016, 109,973 Founders’ shares were forfeited and cancelled.

As of September 30, 2017 and December 31, 2016, there were 2,340,170 and 2,310,710 common shares issued and outstanding, which excludes 4,718,573 and 4,748,033 shares subject to possible conversion, respectively.

The Company’s insiders have agreed (A) to vote their insider shares, private shares and any public shares acquired in or after the Offering in favor of any proposed Business Combination, (B) not to propose, or vote in favor of,Directors unanimously approved an amendment to the ~~Company’s certificate~~2018 Plan, which was subsequently approved by our shareholders, to increase the number of ~~incorporation~~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.

2021 Stock Purchase Plan

The 2021 Stock Purchase Plan provides for up to 200,000 shares to be purchased under the plan. Shares issued under the 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.

Under the 2021 Stock Purchase Plan, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period. The offering period shall be for a period of three months, and the first offering period began on January 10, 2022. The 2021 Stock Purchase Plan provides eligible employees the opportunity to purchase shares of the Company's Common Stock on a quarterly basis through payroll deductions at a price equal to 95% of the lesser of the fair value on the first and last trading day of each offering period. The compensation expense for the three and six months ended June 30, 2023, was immaterial and is included in stock-based compensation in the table above.

Table of Contents

13. Commitments and Contingencies

Minimum Annual Commitments with Third-party Processors

The Company has multi-year agreements with third parties to provide certain payment processing services to the Company. The Company pays processing fees under these agreements. Based on existing contracts in place, the Company is committed to pay minimum processing fees under these agreements of approximately $19.3 million in 2023 and $22.0 million in 2024.

Annual Commitment with Vendor

Effective January 1, 2022, the Company entered into a three year business cooperation agreement with a vendor to resell its services. Under the agreement, the Company purchased vendor services worth $0.7 million for the year ended December 31, 2022, and is committed to purchase vendor services worth $1.5 million in 2023 and $2.3 million in 2024.

Capital Commitments

The Company committed to capital contributions to fund the operations of certain subsidiaries totaling $26.0 million and $22.0 million as June 30, 2023 and December 31, 2022, respectively. The Company is obligated to make the contributions within 10 business days of receiving notice for such contribution from the subsidiary. As of June 30, 2023 and December 31, 2022, the Company has contributed $10.2 million and $6.9 million, respectively.

Merchant Reserves

See Note 4. Settlement Assets and Customer/Subscriber Account Balances and Related Obligations, for information about merchant reserves.

Contingency

The Company received an invoice of $2.7 million in March 2023 from one of the partner banks related to certain services rendered during Q1 2022. Of the invoiced amount, $2.3 million was disputed with the partner bank. During the three months ended June 30, 2023, the dispute was resolved wherein the Company received a revised invoice of $1.0 million and granted certain future price concessions to the vendor. The revised invoice of $1.0 million was recorded during the three months ended June 30, 2023 and the price concession of approximately $1.3 million, will be recorded as costs in the future periods when the related revenue is recognized.

Table of Contents

Contingent Consideration

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


(in thousands)	Contingent Consideration Liabilities
December 31, 2022	$	8,079
Addition of contingent consideration (related to asset acquisition)	2,100
Accretion of contingent consideration	113
Fair value adjustments due to changes in estimates of future payments	116
Payment of contingent consideration	(4,059)
March 31, 2023	6,349
Addition of contingent consideration due to resolution of contingency	7,000
Adjustment for receivable due to residual shortfall	(2,053)
Accretion of discount on contingent consideration	117


June 30, 2023	$	11,413

Legal Proceedings

The Company is involved in certain legal proceedings and claims which arise in the ordinary course of business. In the opinion of the Company and based on consultations with internal and external counsel, the results of any of these matters, individually and in the aggregate, are not expected to have a material effect on the Company's results of operations, financial condition or cash flows. As more information becomes available, and the Company determines that ~~would affect~~an unfavorable outcome is probable on a claim and that the ~~substance or timing~~amount of ~~its obligation~~probable loss that the Company will incur on that claim is reasonably estimable, the Company will record an accrued expense for the claim in question. If and when the Company records such an accrual, it could be material and could adversely impact the Company's results of operations, financial condition and cash flows.

Concentration of Risks

The Company's revenue is substantially derived from processing Visa and Mastercard bankcard transactions. Because the Company is not a member bank, in order to ~~redeem 100%~~process these bankcard transactions, the Company maintains sponsorship agreements with member banks which require, among other things, that the Company abide by the by-laws and regulations of ~~its public shares if it~~the card associations.

The Company's settlement assets and customer /subscriber account balances of $708.6 million includes cash and cash equivalents of $692.6 million related to customer account balances which are maintained in FDIC insured accounts with certain FIs.

A majority of the Company's cash and restricted cash is held in certain FIs, substantially all of which is in excess of FDIC limits. The Company does not ~~complete its initial~~believe it is exposed to any significant credit risk from these transactions.

14. Fair Value

Fair Value Measurements

Contingent consideration related to the Company's business ~~combination~~combinations is estimated based on the present value of a weighted payout probability at the measurement date, which falls within ~~18 months from~~Level 3 on the ~~closing~~fair value hierarchy. The current portion of contingent consideration is included in accounts payable and accrued expenses on the Company's Unaudited Consolidated Balance Sheets and the noncurrent portion of contingent consideration is included in other noncurrent liabilities on the Company's Unaudited Consolidated Balance Sheets.

Table of Contents

Liabilities measured at fair value on a recurring basis consisted of the ~~Offering (or 21~~following:


(in thousands)	Fair Value Hierarchy	June 30, 2023		December 31, 2022
Contingent consideration, current portion	Level 3	$	9,413	$	6,079
Contingent consideration, noncurrent portion	Level 3	2,000		2,000
Total contingent consideration		$	11,413	$	8,079

During the three and six months ~~as applicable), unless~~ended June 30, 2023, there were no transfers into, out of, or between levels of the fair value hierarchy.

Fair Value Disclosures

Notes Receivable

Notes receivable are carried at amortized cost. Substantially all of the Company's notes receivable are secured, and the Company provides for allowances when it believes that certain notes receivable may not be collectible. The carrying value of the Company's notes receivable, net approximates fair value and was approximately $5.5 million and $4.7 million at June 30, 2023 and December 31, 2022, respectively. On the fair value hierarchy, Level 3 inputs are used to estimate the fair value of these notes receivable.

Debt Obligations

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

The fair value of the term facility was estimated to be $604.1 million and $606.1 million at June 30, 2023 and December 31, 2022, respectively, and was estimated using binding and non-binding quoted prices in an active secondary market, which considersthe credit risk and market related conditions, and is within Level 3 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.

15. Segment Information

The Company has three reportable segments:

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

•B2B Payments – provides AP automation solutions to corporations, software partners and FIs.

•Enterprise Payments – provides embedded payment and banking solutions to enterprise customers that modernize legacy platforms and accelerate modern software partners looking to monetize payments.

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

Table of Contents

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


(in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues:
SMB Payments	$	147,895	$	142,506	$	302,828	$	272,465
B2B Payments	2,971		5,295		5,757		11,220
Enterprise Payments	31,424		18,629		58,733		35,984
Consolidated revenues	$	182,290	$	166,430	$	367,318	$	319,669

Depreciation and amortization:
SMB Payments	$	10,769	$	10,980	$	21,615	$	21,804
B2B Payments	127		73		252		146
Enterprise Payments	6,713		6,199		13,403		12,396
Corporate	371		253		758		512
Consolidated depreciation and amortization	$	17,980	$	17,505	$	36,028	$	34,858

Operating (loss) income:
SMB Payments	$	11,542	$	13,995	$	23,553	$	26,481
B2B Payments	(19)		663		(868)		1,072
Enterprise Payments	16,079		5,698		28,742		10,192
Corporate	(8,469)		(7,296)		(15,446)		(13,859)
Consolidated operating income	$	19,133	$	13,060	$	35,981	$	23,886

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


(in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Total operating income of reportable segments	$	27,602	$	20,356	$	51,427	$	37,745
Corporate	(8,469)		(7,296)		(15,446)		(13,859)
Interest expense	(17,765)		(12,335)		(35,464)		(23,870)


Other income, net	375		29		587		80
Income tax benefit (expense)	(2,355)		(467)		(2,222)		(142)
Net (loss) income	$	(612)	$	287	$	(1,118)	$	(46)

Table of Contents

16. Loss per Common Share

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands except per share amounts)	2023		2022		2023		2022
Numerator:
Net (loss) income	$	(612)	$	287	$	(1,118)	$	(46)
Less: Dividends and accretion attributable to redeemable senior preferred stockholders	(11,765)		(8,549)		(23,060)		(16,949)


Net loss attributable to common stockholders	$	(12,377)	$	(8,262)	$	(24,178)	$	(16,995)
Denominator:
Basic and diluted:
Weighted-average common shares outstanding(1)	78,292		78,603		78,213		78,600
Loss per common share	$	(0.16)	$	(0.11)	$	(0.31)	$	(0.22)

(1)The weighted-average common shares outstanding includes 1,803,841 warrants (refer to Note 9. Redeemable Senior Preferred Stock and Warrants).

Potentially anti-dilutive securities that were excluded from the Company's loss per common share that could potentially be dilutive in future periods are as follows:


	Six Months Ended June 30,
(in thousands)	2023	2022
Outstanding warrants on Common Stock(1)	3,557	3,557
Outstanding options and warrants issued to adviser(2)	600	600
Restricted stock awards(3)	1,018	2,045
Outstanding stock option awards(3)	919	1,172
Total	6,094	7,374

(1)The warrants are exercisable at $11.50 per share and expire on August 24, 2023.

(2)The warrants and options are exercisable at $12.00 per share and expire on August 24, 2023.

(3)Granted under the 2018 Plan.

Table of Contents

17. Subsequent Events

On May 23, 2023, PRTH’s indirect subsidiary, Plastiq, Powered by Priority, LLC (the "acquiring entity"), entered into a stalking horse equity and asset purchase agreement (the "Purchase Agreement") with Plastiq, Inc. and certain of its ~~public stockholders with~~affiliates ("Plastiq") to acquire substantially all of the ~~opportunity~~assets of Plastiq, including the equity interest in Plastiq Canada, Inc. Plastiq is a B2B payments platform offering bill pay and instant access to ~~redeem their shares~~working capital to SMBs. On May 24, 2023, Plastiq filed voluntary petitions for relief under Chapter 11 of ~~common stock upon approval~~Title 11 of ~~any such amendment at~~the United States Code in the United States Bankruptcy Court for the District of Delaware.

The purchase was completed on July 31, 2023 for a ~~per-share price, payable~~total purchase consideration of approximately $43.8 million. The total purchase consideration included $28.5 million in cash ~~equal to~~and the ~~aggregate amount then on deposit~~remaining consideration is in the ~~Trust Account, including~~nature of deferred or contingent consideration and certain equity interest ~~earned on the funds held~~ in the ~~Trust Account and not previously released to~~acquiring entity. The cash consideration for the ~~Company to pay its franchise and income taxes, divided~~purchase was funded by ~~the number of then outstanding public shares, (C) not to convert any shares (including the insider shares and private shares) into the right to receive cash~~borrowings from the Trust Account in connection with a stockholder vote to approve the Company’s proposed initial Business Combination (or sell any shares they hold to the Company in a tender offer in connection with a proposed initial Business Combination) or a vote to amend the provisionsCompany's revolving credit facility.

Table of the Company’s certificate of incorporation relating to the substance or timing of its obligation to redeem 100% of the Company’s public shares if it does not complete its initial business combination within 18 months from the closing of the Offering (or 21 months, as applicable) and (D) that the insider shares and private shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the Trust Account if a Business Combination is not consummated.

Contents

Item 2. ~~Management’s~~Management's Discussion and ~~Analysis.~~

~~Forward-Looking Statements~~

~~This Quarterly Report on Form 10-Q includes forward-looking statements. We have based these forward-looking statements on our current expectations~~Analysis of Financial Condition and ~~projections about future events. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels~~Results of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,” or the negative of such terms or other similar expressions. Factors that might cause or contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission (“SEC”) filings. References to “we”, “us”, “our” or the “Company” are to M I Acquisitions Inc., except where the context requires otherwise. Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our ~~condensed financial statements~~Audited Consolidated Financial Statements and related ~~notes thereto~~Notes and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. Certain amounts in this section may not add mathematically due to rounding.

Cautionary Note Regarding Forward-looking Statements

Some of the statements made in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the federal securities laws. Such forward-looking statements include, but are not limited to, statements regarding our management's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, such as statements about our future financial performance, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "future," "goal," "intend," "likely," "may," "might," "plan," "possible," "potential," "predict," "project," "seek," "should," "would," "will," "approximately," "shall" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•negative economic and political conditions that adversely affect the general economy, consumer confidence and consumer and commercial spending habits, which may, among other things, negatively impact our business, financial condition and results of operations;

•competition in the payment processing industry;

•the use of distribution partners;

•any unauthorized disclosures of merchant or cardholder data, whether through breach of our computer systems, computer viruses or otherwise;

•any breakdowns in our processing systems;

•government regulation, including regulation of consumer information;

•the use of third-party vendors;

•any changes in card association and debit network fees or products;

•any failure to comply with the rules established by payment networks or standards established by third-party processors;

•any proposed acquisitions or dispositions or any risks associated with completed acquisitions or dispositions; and

•other risks and uncertainties set forth in the "Item 1A - Risk Factors" section of this Quarterly Report on Form 10-Q or our Annual Report on Form 10-K.

We caution you that the foregoing list may not contain all of the forward-looking statements made in this Quarterly Report on Form 10-Q.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us. You should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities. We cannot assure you that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions, including the risk factors set forth in the "Item 1A - Risk Factors" section of this Quarterly Report on Form 10-Q or our Annual Report on Form 10-K, that may cause our actual results or performance to be materially different from those expressed or implied by these forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially

Table of Contents

available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.

Forward-looking statements speak only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

Terms Used in this Quarterly Report on Form 10-Q

As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to the terms "Company," "Priority," "we," "us" and "our" refer to Priority Technology Holdings, Inc. and its consolidated subsidiaries.

Table of Contents

Results of Operations

This section includes certain components of our results of operations for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022. We have derived this data, except the key indicators, from our Unaudited Consolidated Financial Statements included elsewhere in this ~~report.~~

~~Overview~~

~~We were formed~~Quarterly Report on ~~April 23, 2015~~Form 10-Q and our Audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more target businesses. Our efforts to identify a prospective target business will not be limited to any particular industry or geographic region, although we intend to focus on target businesses operating in the technology, media and telecommunications industries. We intend to utilize cash derived from the proceeds of our public offering in effecting our initial business combination.

We presently have no revenue, have had losses since inception from incurring formation costs and have had no operations other than the active solicitation of a target business with which to complete a business combination. We have relied upon the sale of our securities and loans from our officers and directors to fund our operations.

On September 19, 2016, we consummated our initial public offering (the “Offering”) of 5,000,000 units (the “Units”). Each Unit consists of one share of common stock (“Common Stock”), and one warrant (“Public Warrant”) to purchase one share of Common Stock at an exercise price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $50,000,000. We granted the underwriters a 45-day option to purchase up to 750,000 additional Units to cover over-allotments, if any. Simultaneously with the consummation of the Offering, we consummated the private placement (“Private Placement”) of 402,500 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $4,025,000. The underwriters exercised the over-allotment option in part and, on October 14, 2016, the underwriters purchased 310,109 over-allotment option Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $3,101,090. On October 14, 2016, simultaneously with the sale of the Over-Allotment Units, we consummated the private sale of an additional 18,607 Private Units to one of the initial stockholders, generating gross proceeds of $186,070. The remainder of the over-allotment option expired unexercised.

As of November 13, 2017, a total of $54,990,849 was held in the trust account established for the benefit of the Company’s public shareholders, which includes approximately $296,726 in interest income available from the Company’s investments in the Trust Account to pay its income tax obligations.

Our management has broad discretion with respect to the specific application of the net proceeds of the initial public offering and the private placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination.

~~Results of Operations~~

Our entire activity from inception up to September 19, 2016 was in preparation for the Offering. Since the Offering, our activity has been limited to the evaluation of business combination candidates, and we will not be generating any operating revenues until the closing and completion of our initial business combination. We expect to generate small amounts of non-operating income in the form of interest income on cash and cash equivalents. Interest income is not expected to be significant in view of current low interest rates on risk-free investments (treasury securities). We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses. Our expenses have increased substantially since closing the Offering.

~~For the three and nine months~~year ended September 30, 2017, we had a net income and net loss of $152,350 and $(111,519), respectively. During the three and nine months ended September 30, 2017, we incurred $367,033 and $714,534, respectively, of general and administrative expenses and $30,000 and $90,000, respectively, of administrative fees paid to a related party. For the three and nine months ended September 30, 2017, these expenses were offset by other income totaling $549,383 and $693,015. respectively. December 31, 2022.

Revenue

For the three months ended ~~September~~June 30, ~~2017, other income~~2023, our consolidated revenue of $182.3 million increased by $15.9 million, or 9.6%, from $166.4 million for the three months ended June 30, 2022. This overall increase was ~~comprised of~~mainly driven by increases in merchant card fee rates, offset by merchant bankcard volume decreases in our SMB Payments segment, an increase in new enrollments and higher interest income in our Enterprise Payments segment. These increases were partially offset by a decrease in revenue in B2B Payments segment due to wind down of $121,682 and settlement income of $427,701, which we received from an entity that decided that it no longer wished to engage in a transaction with us. The settlement income received was approximately the amount of the expenses we incurred pursuing that transaction. certain managed services programs.

For the ~~nine~~six months ended ~~September~~June 30, ~~2017, other income~~2023, our consolidated revenue of $367.3 million increased by $47.6 million, or 14.9%, from $319.7 million for the six months ended June 30, 2022. The overall increase was ~~comprised of~~driven by increases in merchant card fee rates, increased merchant bankcard volume, offset by a decrease in certain fee based revenue in our SMB Payments segment and an increase in new enrollments and higher interest income in our Enterprise Payments segment. These increases were partially offset by a decrease in revenue in B2B Payments segment due to wind down of ~~$265,314 and settlement income of $427,701.~~

certain managed services programs.

~~For~~The following table presents our revenues by type for the three and ~~nine~~six months ended ~~September~~June 30, ~~2016, we had a net loss of $36,382~~2023 and ~~$43,646, respectively. During~~2022:


(in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2023		2022		$ Change		2023		2022		$ Change
Revenue Type:
Merchant card fees	$	144,524	$	139,793	$	4,731	$	294,168	$	267,745	$	26,423
Money transmission services	23,718		17,183		6,535		45,124		33,466		11,658
Outsourced services and other services	10,582		6,887		3,695		21,587		13,984		7,603
Equipment	3,466		2,567		899		6,439		4,474		1,965
Total revenues	$	182,290	$	166,430	$	15,860	$	367,318	$	319,669	$	47,649

Merchant card fees

Merchant card fees revenue for the three ~~and nine~~ months ended ~~September~~June 30, ~~2016, we incurred $61,360~~2023 was $144.5 million an increase of $4.7 million, or 3.4%, from $139.8 million for the three months ended June 30, 2022. This increase was primarily driven by an increase in the transaction count processed by the Company and ~~$68,624, respectively,~~rate increases, offset by merchant bankcard dollar volume decreases with certain partners.

Merchant card fees revenue for the six months ended June 30, 2023 was $294.2 million an increase of $26.5 million, or 9.9%, from $267.7 million for the six months ended June 30, 2022. This increase was primarily driven by an increase in the merchant bankcard volume processed by the Company and rate increases.

Money transmission services

Money transmission services for the three months ended June 30, 2023 was $23.7 million an increase of $6.5 million, or 37.8%, from $17.2 million for the three months ended June 30, 2022. This increase was primarily driven by an increase in customer enrollments.

Money transmission services for the six months ended June 30, 2023 was $45.1 million an increase of $11.6 million, or 34.6%, from $33.5 million for the six months ended June 30, 2022. This increase was primarily driven by an increase in customer enrollments.

Table of Contents

Outsourced services and other services revenue

Outsourced services and other services revenue of $10.6 million for the three months ended June 30, 2023 increased by $3.7 million, or 53.6%, from $6.9 million for the three months ended June 30, 2022, primarily due to growth in interest income due to higher interest rates and deposit balances offset by decreased managed services revenue due to wind down of certain programs.

Outsourced services and other services revenue of $21.6 million for the six months ended June 30, 2023 increased by $7.6 million, or 54.3%, from $14.0 million for the six months ended June 30, 2022, primarily due to growth in interest income due to higher interest rates and deposit balances offset by decreased managed services revenue due to wind down of certain programs.

Equipment

Equipment revenue of $3.5 million for the three months ended June 30, 2023 increased by $0.9 million, or 34.6%, from $2.6 million for the three months ended June 30, 2022. The increase was primarily due to increased sales of point of sale equipment.

Equipment revenue of $6.4 million for the six months ended June 30, 2023 increased by $1.9 million, or 42.2%, from $4.5 million for the six months ended June 30, 2022. The increase was primarily due to increased sales of point of sale equipment.

Operating expenses for three and six months ended June 30, 2023 and 2022 were as follows:


(in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2023		2022		$ Change		2023		2022		$ Change
Operating expenses
Cost of services (excludes depreciation and amortization)	$	115,281	$	110,749	$	4,532	$	237,247	$	212,229	$	25,018
Salary and employee benefits	19,109		15,770		3,339		38,157		31,847		6,310
Depreciation and amortization	17,980		17,505		475		36,028		34,858		1,170
Selling, general and administrative	10,787		9,346		1,441		19,904		16,849		3,055
Total operating expenses	$	163,157	$	153,370	$	9,787	$	331,336	$	295,783	$	35,553

Cost of services (excludes depreciation and amortization)

Cost of services (excludes depreciation and amortization) of $115.3 million for the three months ended June 30, 2023 increased by $4.6 million, or 4.2%, from $110.7 million for the three months ended June 30, 2022, primarily due to corresponding increase in revenues.

Cost of services (excludes depreciation and amortization) of $237.2 million for the six months ended June 30, 2023, increased by $25.0 million, or 11.8%, from $212.2 million for the six months ended June 30, 2022, primarily due to the corresponding increase in revenues.

Salary and employee benefits

Salary and employee benefits expense of $19.1 million for the three months ended June 30, 2023 increased by $3.3 million, or 20.9%, from $15.8 million for the three months ended June 30, 2022, primarily due to merit increases, an increase in stock-based compensation and increased headcount to support overall growth of the Company.

Salary and employee benefits expense of $38.2 million for the six months ended June 30, 2023 increased by $6.4 million, or 20.1%, from $31.8 million for the six months ended June 30, 2022, primarily due to merit increases, an increase in stock-based compensation and increased headcount to support overall growth of the Company.

Table of Contents

Depreciation and amortization expense

Depreciation and amortization expense of $18.0 million for the three months ended June 30, 2023 increased by $0.5 million, or 2.9%, from $17.5 million for the three months ended June 30, 2022, primarily due to the depreciation of new assets placed in service.

Depreciation and amortization expense of $36.0 million for the six months ended June 30, 2023 increased by $1.1 million, or 3.2%, from $34.9 million for the six months ended June 30, 2022, primarily due to the depreciation of new assets placed in service.

Selling, general and administrative

Selling, general and administrative expenses of $10.8 million for the three months ended June 30, 2023 increased by $1.5 million, or 16.1%, from $9.3 million for the three months ended June 30, 2022, primarily due to certain nonrecurring expenses related to an upcoming business combination and ~~$5,667~~other expenses to support overall growth of the Company.

Selling, general and ~~$5,667,~~administrative expenses of $19.9 million for the six months ended June 30, 2023 increased by $3.1 million, or 18.5%, from $16.8 million for the six months ended June 30, 2022, primarily due to certain nonrecurring expenses related to an upcoming business combination and other expenses to support overall growth of the Company.

Other Expense, net

Other expenses, net for three and six months ended June 30, 2023 and 2022 were as follows:


(in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2023		2022		$ Change		2023		2022		$ Change
Other (expense) income
Interest expense	$	(17,765)	$	(12,335)	$	(5,430)	$	(35,464)	$	(23,870)	$	(11,594)


Other income, net	375		29		346		587		80		507
Total other expense, net	$	(17,390)	$	(12,306)	$	(5,084)	$	(34,877)	$	(23,790)	$	(11,087)

Interest expense

Interest expense of $17.8 million for the three months ended June 30, 2023 increased by $5.5 million, or 44.7%, from $12.3 million for the three months ended June 30, 2022, due to increased interest rates in the three months ended June 30, 2023.

Interest expense of $35.5 million for the six months ended June 30, 2023 increased by $11.6 million, or 48.5%, from $23.9 million for the six months ended June 30, 2022, due to increased interest rates in the six months ended June 30, 2023.

Income tax (benefit) expense

Income tax benefit for three and six months ended June 30, 2023 and 2022 was as follows:


(in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2023			2022			$ Change		2023			2022			$ Change
Income before income taxes	$	1,743		$	754		$	989	$	1,105		$	96		$	1,009
Income tax expense	$	2,355		$	467		$	1,888	$	2,222		$	142		$	2,080
Effective tax rate	135.1		%	61.9		%			201.2		%	147.9		%

We compute our interim period income tax expense or benefit by using a forecasted EAETR and adjust for any discrete items arising during the interim period and any changes in our projected full-year business interest expense and taxable income. The

Table of Contents

EAETR for 2023 is 174.5% and includes the income tax provision on pre-tax income and a tax provision related to establishment of a valuation allowance for deferred income tax on the future portion of the Section 163(j) limitation created by additional 2023 interest expense. The effective tax rate for 2023 changed primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

Our consolidated effective income tax rates differ from the statutory rate due to timing and permanent differences between amounts calculated under accounting principles GAAP and the U.S. tax code. The consolidated effective income tax rate for 2023 may not be indicative of our effective tax rate for future periods.

On August 16, 2022, the U.S. government enacted the Inflation Reduction Act into law. The IRA, among other provisions, implements a 15% corporate alternative minimum tax based on global adjusted financial statement income and a 1% excise tax on share repurchases, which shall take effect in tax years beginning after December 31, 2022. We do not expect the enactment of the IRA will have a material effect on our reported results, cash flows, or financial position. If applicable, we expect to reflect the excise tax within equity as part of the repurchase price of common stock.

Segment Results

SMB Payments


(in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2023			2022			$ Change		2023			2022			$ Change
Revenue	$	147,895		$	142,506		$	5,389	$	302,828		$	272,465		$	30,363
Operating expenses	136,353			128,511			7,842		279,275			245,984			33,291
Operating income	$	11,542		$	13,995		$	(2,453)	$	23,553		$	26,481		$	(2,928)
Operating margin	7.8		%	9.8		%			7.8		%	9.7		%
Depreciation and amortization	$	10,769		$	10,980		$	(211)	$	21,615		$	21,804		$	(189)
Key Indicators:
Merchant bankcard processing dollar value	$	15,111,781		$	15,402,560		$	(290,779)	$	30,332,495		$	29,479,407		$	853,088
Merchant bankcard transaction count	$	180,343		$	164,341		$	16,002	$	343,749		$	310,289		$	33,460

Revenue

Revenue from our SMB Payments segment was $147.9 million for the three months ended June 30, 2023, compared to $142.5 million for the three months ended June 30, 2022. The increase of $5.4 million, or 3.8%, was primarily driven by increases in transaction count and merchant card fee rate increases, offset by merchant bankcard volume decreases and a true up of an invoice from one of the partner banks for certain services provided in Q1 2022. The Company's revenue from the SMB Payments segment as a percentage of merchant bankcard processing dollar value during 2023 increased to 0.98% from 0.93% during 2022. The increase was primarily driven by a rate increase and changes in the merchant mix.

Revenue from our SMB Payments segment was $302.8 million for the six months ended June 30, 2023, compared to $272.5 million for the six months ended June 30, 2022. The increase of $30.3 million, or 11.1%, was primarily driven by increased merchant bankcard volume, increased transaction count, merchant card fee rate increases and accrual of certain incentives, offset by a decrease in certain fee-based revenue and a true up of an invoice from one of the partner banks for certain services provided in Q1 2022. The Company's revenue from the SMB Payments segment as a percentage of merchant bankcard processing dollar value during 2023 increased to 1.0% from 0.92% during 2022. The increase was primarily driven by an increase in incentive revenue and changes in the merchant mix.

Table of Contents

Operating Income

Operating income from our SMB Payments segment was $11.5 million for the three months ended June 30, 2023, compared to $14.0 million for the three months ended June 30, 2022. The decrease of $2.5 million, or 17.9%, was primarily driven by mix related margin compression, a $1.7 million increase in salary and employee benefits due to higher headcount, higher stock-based compensation and annual pay raises, and a $0.6 million increase in selling, general and administrative expenses driven by higher software and travel and other operating costs. The increase in headcount and selling, general and administrative expenses are mainly attributable to growth initiatives.

Operating income from our SMB Payments segment was $23.6 million for the six months ended June 30, 2023, compared to $26.5 million for the six months ended June 30, 2022. The decrease of $2.9 million, or 10.9%, was primarily driven by mix related margin compression, a $3.7 million increase in salary and employee benefits due to higher headcount, higher stock-based compensation and annual pay raises, and a $1.6 million increase in selling, general and administrative expenses driven by higher software and travel and other operating costs. The increase in headcount and selling, general and administrative expenses are mainly attributable to growth initiatives.

Depreciation and Amortization

Depreciation and amortization expense of our SMB Payments segment was $10.8 million for the three months ended June 30, 2023, which is consistent with $11.0 million for the three months ended June 30, 2022.

Depreciation and amortization expense of our SMB Payments segment was $21.6 million for the six months ended June 30, 2023, which is consistent with $21.8 million for the six months ended June 30, 2022.

B2B Payments


(in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2023			2022			$ Change		2023			2022			$ Change
Revenue	$	2,971		$	5,295		$	(2,324)	$	5,757		$	11,220		$	(5,463)
Operating expenses	2,990			4,632			(1,642)		6,625			10,148			(3,523)
Operating (loss) income	$	(19)		$	663		$	(682)	$	(868)		$	1,072		$	(1,940)
Operating margin	(0.6)		%	12.5		%			(15.1)		%	9.6		%
Depreciation and amortization	$	127		$	73		$	54	$	252		$	146		$	106
Key Indicators:
B2B issuing dollar volume	$	216,358		$	214,085		$	2,273	$	414,904		$	383,580		$	31,324
B2B issuing transaction count	282,000			247			$	35	562			435			127

Revenue

Revenue from our B2B Payments segment was $3.0 million for the three months ended June 30, 2023, compared to $5.3 million for the three months ended June 30, 2022. The decrease of $2.3 million, or 43.4%, was primarily driven by a decrease in managed services business due to wind down of certain programs and recognition of certain revenues during 2022 related to a contract termination.

Revenue from our B2B Payments segment was $5.8 million for the six months ended June 30, 2023, compared to $11.2 million for the six months ended June 30, 2022. The decrease of $5.4 million, or 48.2%, was primarily driven by a decrease in managed services business due to wind down of certain programs and recognition of certain revenues during 2022 related to a contract termination. This decrease was partially offset by certain nonrecurring items.

Table of Contents

Operating Income (Loss)

Operating loss from our B2B Payments segment was $0.0 million for the three months ended June 30, 2023 compared to an operating income of $0.7 million for the three months ended June 30, 2022. The decrease of $0.7 million was primarily attributable to decreases in revenue.

Operating loss from our B2B Payments segment was $0.9 million for the six months ended June 30, 2023 compared to an operating income of $1.1 million for the six months ended June 30, 2022. The decrease of $2.0 million was primarily attributable to decreases in revenue.

Enterprise Payments


(in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2023			2022			$ Change		2023			2022			$ Change
Revenue	$	31,424		$	18,629		$	12,795	$	58,733		$	35,984		$	22,749
Operating expenses	15,345			12,931			2,414		29,991			25,792			4,199
Operating income	$	16,079		$	5,698		$	10,381	$	28,742		$	10,192		$	18,550
Operating margin	51.2		%	30.6		%			48.9		%	28.3		%
Depreciation and amortization	$	6,713		$	6,199		$	514	$	13,403		$	12,396		$	1,007
Key Indicators:
Average billed clients	387,384			342,789			44,595		520,028			354,473			165,555
Average new enrollments	53,374			28,251			25,123		49,661			25,846			23,815

Revenue

Revenue from our Enterprise Payments segment was $31.4 million for the three months ended June 30, 2023, compared to $18.6 million for the three months ended June 30, 2022. The increase of $12.8 million or 68.8%, was primarily driven by an increase in billed clients and customer enrollments, and growth in interest income due to higher interest rates and deposit balances.

Revenue from our Enterprise Payments segment was $58.7 million for the six months ended June 30, 2023, compared to $36.0 million for the six months ended June 30, 2022. The increase of $22.7 million or 63.1%, was primarily driven by an increase in billed clients and customer enrollments, and growth in interest income due to higher interest rates and deposit balances.

Operating Income

Operating income from our Enterprise Payments segment was $16.1 million for the three months ended June 30, 2023, compared to $5.7 million for the three months ended June 30, 2022. The increase of $10.4 million or 181.4%, was primarily driven by increases in revenues.

Operating income from our Enterprise Payments segment was $28.7 million for the six months ended June 30, 2023, compared to $10.2 million for the six months ended June 30, 2022. The increase of $18.5 million or 182.5%, was primarily driven by increases in revenues.

Depreciation and Amortization

Depreciation and amortization from our Enterprise Payments segment was $6.7 million for the three months ended June 30, 2023, compared to $6.2 million depreciation and amortization expense for the three months ended June 30, 2022. The increase of $0.5 million or 8.1%, was primarily driven by the amortization of additional capitalized internal use software and acquired intangibles.

Depreciation and amortization from our Enterprise Payments segment was $13.4 million for the six months ended June 30, 2023, compared to $12.4 million depreciation and amortization expense for the six months ended June 30, 2022. The increase

Table of Contents

of $1.0 million or 8.1%, was primarily driven by the amortization of additional capitalized internal use software and acquired intangibles.

Critical Accounting Policies and Estimates

Our Unaudited Consolidated Financial Statements have been prepared in accordance with GAAP for interim periods, which often require the judgment of management in the selection and application of certain accounting principles and methods. Our critical accounting policies and estimates are discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to these critical accounting policies and estimates as of June 30, 2023.

Liquidity and Capital Resources

Liquidity and capital resource management is a process focused on providing the funding we need to meet our short-term and long-term cash and working capital needs. We have used our funding sources to build our merchant portfolio, for technology solutions and to make acquisitions with the expectation that such investments will generate cash flows sufficient to cover our working capital and other anticipated needs, including our acquisition strategy. We anticipate that cash on hand, funds generated from operations and available borrowings under our revolving credit facility are sufficient to meet our working capital requirements for at least the next 12 months.

During the second quarter of 2022, PRTH's Board of Directors authorized the Company to implement a general share repurchase program under which the Company may purchase up to 2.0 million shares of its outstanding Common Stock for a total of up to $10.0 million. Under the terms of this plan, the Company may purchase shares through open market purchases, unsolicited or solicited privately negotiated transactions, or in another manner so long as it complies with applicable rules and regulations. The Company had repurchased shares of $5.7 million during the year ended December 31, 2022 and has not repurchased any shares under the share repurchase program for the six months ended June 30, 2023.

Our principal uses of cash are to fund business operations and administrative costs, and to service our debt.

Our working capital, defined as current assets less current liabilities, was $3.4 million at June 30, 2023 and $22.5 million at June 30, 2022. As of June 30, 2023, we had cash totaling $17.6 million compared to $18.5 million at June 30, 2022. These cash balances do not include restricted cash of $12.4 million and $10.6 million at June 30, 2023 and June 30, 2022, respectively, which reflects cash accounts holding customer settlement funds and cash reserves for potential losses. The current portion of ~~administrative fees~~long-term debt included in current liabilities was $6.2 million at June 30, 2023 and June 30, 2022.At June 30, 2023, we had availability of approximately $49.5 million under our revolving credit facility.

The following table and discussion reflect our changes in cash flows for the comparative six month periods.


	Six Months Ended June 30,
(in thousands)	2023		2022
Net cash provided by (used in):
Operating activities	$	46,857	$	30,334
Investing activities	(13,082)		(12,735)
Financing activities	144,138		562
Net increase in cash and cash equivalents and restricted cash	$	177,913	$	18,161

Cash Provided by Operating Activities

Net cash provided by operating activities was $46.9 million for the six months ended June 30, 2023 compared to $30.3 million of net cash used in operating activities for the six months ended June 30, 2022. The $16.6 million increase in 2023 was primarily driven by changes in the operating assets and liabilities.

Table of Contents

Cash Used in Investing Activities

Net cash used in investing activities was $13.1 million and $12.7 million for the six months ended June 30, 2023 and 2022, respectively. For the six months ended June 30, 2023, net cash used in investing activities included additions to property, equipment and software of $9.9 million, acquisitions of intangible assets of $2.7 million, and $0.5 million related to the net payments received on loans to ISOs. For the six months ended June 30, 2022, net cash used in investing activities included $4.0 million of cash used to fund acquisitions of intangible assets, $2.8 million related to the funding of new loans to ISOs and $6.0 million of cash used to acquire property, equipment and software.

Cash Provided by Financing Activities

Net cash provided by financing activities was $144.1 million for the six months ended June 30, 2023, compared to $0.6 million of cash provided by financing activities for the six months ended June 30, 2022. The net cash provided by financing activities for the six months ended June 30, 2023 included changes in the net obligations for funds held on the behalf of customers of $175.5 million and $5.0 million in borrowings under the revolving credit facility, offset by $15.5 million of cash used for the repayment of debt, $17.9 million of cash dividends paid to redeemable senior preferred stockholders, $1.0 million of cash used for shares withheld for taxes, and $2.0 million of payments of contingent consideration for business combinations. The net cash provided by financing activities for the six months ended June 30, 2022 included $15.6 million of cash used for the repayment of debt, $7.1 million of cash dividends paid to redeemable senior preferred stockholders and $2.1 million of cash used for shares withheld for taxes and share repurchases, and $1.9 million of payments of contingent consideration for business combinations, offset by changes in the net obligations for funds held on the behalf of customers of $15.2 million and borrowings under the revolving credit facility of $12.0 million.

Long-term Debt

As of June 30, 2023, we had outstanding debt obligations, including the current portion and net of unamortized debt discount of $596.1 million, compared to $605.1 million at December 31, 2022, resulting in a ~~related party. For~~decrease of $9.0 million. The debt balance at June 30, 2023 consisted of $607.2 million outstanding under the ~~nine months~~term facility and $5.5 million outstanding under the revolving credit facility, offset by $16.5 million of unamortized debt discounts and issuance costs. Minimum amortization of the term facility are equal quarterly installments in aggregate annual amounts equal to 1.0% of the original principal, with the balance paid upon maturity. The term facility matures in April 2027 and the revolving credit facility expires in April 2026.

~~Liquidity and Capital Resources~~

~~As of September~~2021 through June 30, ~~2017, we had cash outside our trust account of $479,382.~~

Our liquidity needs have been satisfied to date through the Offering, the receipt of $25,000 from the sale of the insider shares and loans from insiders and a related party and an unrelated party in an aggregate amount of $186,720. During the nine months2022; 2) 6.00:1.00 at each fiscal quarter ended September 30, ~~2017, we withdrew interest income totaling $71,702 to be utilized for payment~~2022 through June 30, 2023; and 3) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter. As of ~~tax obligations. In addition, we received $427,701 from a company~~June 30, 2023, the Total Net Leverage Ratio was not applicable and the Company was in compliance with ~~which we were negotiating a business combination after it decided that it no longer wished to engage in a transaction with us. The amount received was approximately~~ the ~~amount of the expenses we incurred in pursuing that transaction.~~

~~We intend to use substantially all of the net proceeds of the Offering, including the funds held~~covenants in the ~~trust account,~~Credit Agreement.

Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that may affect our current and/or future financial statements. See Note 1, Basis of Presentation and Significant Accounting Policies, to our Unaudited Consolidated Financial Statements included in ~~connection with our initial business combination and to pay our expenses relating thereto, including~~Part I, Item 1 of this Quarterly Report on Form 10-Q, for a ~~deferred underwriting commission payable to Chardan Capital Markets, LLC in an amount equal to 2.0%~~discussion of ~~the total gross proceeds raised in the offering upon consummation~~recently issued accounting pronouncements not yet adopted.

Table of our initial business combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our initial business combination if the funds available to us outside of the trust account were insufficient to cover such expenses.

We anticipate that the amounts outside of our trust account will be insufficient to allow us to operate until March 19, 2018 (if an extension is not completed). We expect to have to raise additional capital through loans or additional investments from our shareholders, officers, directors, or third parties to allow us to operate until March 19, 2018 (if an extension is not completed). None of the shareholders, officers or directors are under any obligation to advance funds to, or to invest in, our company. Accordingly, we may not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to convert a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

~~Off-Balance Sheet Arrangements~~

~~As of September 30, 2017, we did not have any off-balance sheet arrangements.~~

Contents

Item 3. Quantitative and Qualitative Disclosures ~~about~~About Market Risk

For quantitative and qualitative disclosures about market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of ~~September 30, 2017, we were~~our Annual Report on Form 10-K for the year ended December 31, 2022. Our exposures to market risk have not subject to any market or interest rate risk. Following the consummation of the Offering, the net proceeds of the Offering, including amounts in the trust account, may only be invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

changed materially since December 31, 2022.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer, we conducted an evaluation of the effectiveness of our

We maintain disclosure controls and procedures, as ~~of the end of the fiscal quarter ended September 30, 2017, as such term is~~ defined in Rules 13a-15(e) and 15d-15(e) ~~under~~of the Exchange Act. Based on this evaluation, our principal executive officer and principal financial and accounting officer have concluded that during the period covered by this report, our disclosure controls and procedures were effective.

~~Disclosure controls and procedures are~~Act, designed to ~~ensure~~provide reasonable assurance that information required to be disclosed by usthe Company in ~~our~~reports that it files or submits under the Exchange Act ~~reports~~ is recorded, processed, summarized ~~and~~or reported within the time periods specified in ~~the SEC’s~~SEC rules and ~~forms,~~regulations and that such information is accumulated and communicated to our management, including our principal executive officer ~~and~~(CEO), our principal financial officer ~~or persons performing similar functions,~~(CFO) and, as appropriate, to allow timely decisions regarding required ~~disclosure.~~

disclosures.

Management, with the participation of the CEO and CFO, has evaluated the effectiveness of the Company's disclosure controls and procedures as of June 30, 2023. Based on that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2023.

Changes in Internal Control over Financial Reporting

There ~~was~~have been no ~~change~~changes in ~~our~~the Company's internal control over financial reporting ~~that occurred~~ during the ~~fiscal quarter of 2017 covered by this Quarterly Report on Form 10-Q~~three and six months ended June 30, 2023 that ~~has~~have materially affected, or isare reasonably likely to materially affect, ~~our~~the Company's internal control over financial reporting.

Table of Contents

PART ~~II -~~II. OTHER INFORMATION

Item 1. Legal Proceedings

We are involved in certain legal proceedings and claims, which arise in the ordinary course of business. In the opinion of the Company, based on consultations with internal and external counsel, the results of any of these ordinary course matters, individually and in the aggregate, are not expected to have a material effect on our results of operations, financial condition, or cash flows. As more information becomes available and we determine that an unfavorable outcome is probable on a claim and that the amount of probable loss that we will incur on that claim is reasonably estimable, we will record an accrued expense for the claim in question. If and when we record such an accrual, it could be material and could adversely impact our results of operations, financial condition and cash flows.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in our Annual Report under Part I, Item 1A "Risk Factors" because these risk factors may affect our operations and financial results. The risks described in the Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds ~~from Registered~~

Unregistered Sales of Equity Securities

~~On September 19, 2016, we consummated our initial public offering (the “Offering”)~~ and Use of ~~5,000,000 units (the “Units”). Each Unit consists~~Proceeds

None.

Issuer Purchases of ~~one share~~Equity Securities

The Company's purchases of ~~common stock (“Common Stock”), and one warrant (“Public Warrant”) to purchase one share of~~its Common Stock ~~at an exercise price~~during the three months ended June 30, 2023 were as follows:


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 1-30, 2023	64,616	$	3.66	—	690,626
May 1-31, 2023	—	$	—	—	690,626
June 1-30, 2023	—			—	690,626
Total	64,616	$	3.66	—

(1)Represents shares (in whole units) withheld to satisfy employees' tax withholding obligations related to the vesting of ~~$11.50 per share. The Units were sold at an offering price~~restricted stock awards, which was determined based on the fair market value on the vesting date.

(2)In May 2022, the Company's Board of ~~$10.00 per Unit, generating gross proceeds~~Directors approved a stock repurchase program for the purchase of ~~$50,000,000. We granted the underwriters a 45-day option to purchase~~ up to ~~750,000 additional Units to cover over-allotments, if any. Simultaneously with the consummation~~2.0 million of the ~~Offering, we consummated the private placement (“Private Placement”) of 402,500 units (the “Private Units”) at a price of $10.00 per Private Unit, generating total proceeds of $4,025,000.~~Company's Common Stock outstanding for up to $10.0 million. The underwriters exercised the over-allotment option in part and, on October 14, 2016, the underwriters purchased 310,109 over-allotment option Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $3,101,090. On October 14, 2016, simultaneously with the sale of the Over-Allotment Units, we consummated the private sale of an additional 18,607 Private Units to one of the initial stockholders, generating gross proceeds of $186,070. The remainder of the over-allotment option expired unexercised.

The Private Units are identical to the units sold in the Offering except the warrants included in the Private Units will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. The holders of the Private Units have agreed (A) to vote their private shares and any public shares acquired by them in favor of any proposed business combination, (B)Company did not to propose, or vote in favor of, an amendment to our certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2018 (or June 13, 2018, as applicable), unless we provide our public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned on the funds held in the trust account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, (C) not to convertrepurchase any shares ~~(including~~under the ~~private shares) into~~share repurchase program during the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination (or sell any shares they hold to us in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisionsfirst quarter of ~~our certificate~~2023.

Item 3. Defaults Upon Senior Securities

N/A

Item 4. Mine Safety Disclosures

N/A

Table of incorporation relating to the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2018 (or June 13, 2018, as applicable) and (D) that the private shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the trust account if a business combination is not consummated. Additionally, our insiders (and/or their designees) have agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of our initial business combination.

As of October 14, 2016, a total of $54,694,127 of the net proceeds from the Offering and the Private Placement were in a trust account established for the benefit of the Company’s public shareholders.

~~We paid a total of $1,500,000 in underwriting discounts and commissions and $1,687,451 for other costs and expenses related to our formation and the IPO.~~

~~For a description of the use of the proceeds generated in our initial public offering, see Part I,~~ Contents

Item ~~2 of this Form 10-Q.~~

5. Other Information

N/A

Item 6. ~~Exhibits.~~

Exhibits

~~Exhibit No.~~	~~Description~~
Exhibit		Description
2.1		Second Amended and Restated Contribution Agreement, dated as of April 17, 2018, by and among Priority Investment Holdings, Priority Incentive Equity Holdings, LLC and M I Acquisitions, Inc. (incorporated by reference to Annex A to the Company's Proxy Statement on Schedule 14(a), filed July 5, 2018).
2.2		Agreement and Plan of Merger, dated as of March 5, 2021, by and among the Company, Finxera, Merger Sub, and the Equityholder Representative.
2.3		Certificate of Amendment to the Certificate of Incorporation of Priority Technology Holdings dated April 16, 2021, filed April 29, 2021
2.4		Agreement and Plan of Merger by and among the Company, Finxera Holdings, Inc., Prime Warrior Acquisition Corp., and Stone Point Capital LLC.
3.1		Second Amended and Restated Certificate of Incorporation of Priority Technology Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed July 31, 2018).
3.2		Amended and Restated Bylaws of Priority Technology Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed July 31, 2018).
4.1		Warrant Agreement, dated September 13, 2016, by and between American Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed September 16, 2016).
4.2		Certificate of Designations of Senior Preferred Stock
10.1		Registration Rights Agreement dated as of July 25, 2018 by and among M I Acquisitions, Inc. and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed July 31, 2018).
10.2		Priority Technology Holdings, Inc. 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed July 31, 2018).
10.3		Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
10.3.1		Amendment No. 1 to Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
10.4		Credit Agreement, dated as of April 27, 2021, among the Loan Parties name therein and Truist Bank.
10.5†		Director Agreement by and among Priority Holdings LLC, Pipeline Cynergy Holdings, LLC, Priority Payment Systems Holdings, LLC and Thomas C. Priore, dated May 21, 2014 (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-4/A, filed December 26, 2018).
10.6†		Amendment No. 1 to Director Agreement by and among Priority Holdings LLC, Pipeline Cynergy Holdings, LLC, Priority Payment Systems Holdings, LLC and Thomas C. Priore, dated April 19, 2018 (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-4/A, filed December 26, 2018).


10.7		Form of Independent Director Agreement (incorporated by reference to Exhibit 10.19 to the Company's Annual Report on Form 10-K, filed March 29, 2019).
10.8		Asset Purchase Agreement by and between MRI Payments LLC, MRI Software LLC, and Priority Real Estate Technology LLC, dated August 31, 2020 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed September 1, 2020).
10.9		Support Agreement, dated as of March 5, 2021, by and among the Stockholders and Finxera
10.10		Debt Commitment Letter, dated as of March 5, 2021, between Priority Holdings, LLC and Truist Securities, Inc.
10.11		Preferred Stock Commitment Letter, dated as of March 5, 2021, among the Company and certain affiliates of Ares Capital Management LLC
10.12		Securities Purchase Agreement, dated as of April 27, 2021, among the Company and the Investors named therein
10.1 3		Registration Rights Agreement, dated as of April 27, 2021, among the Company and the Investors name therein
10.14		Credit Agreement, dated as of April 27, 2021, among the Loan Parties name therein and Truist Bank

Table of Contents


10.15			Amendment No. 2, dated September 17, 2021, to the Credit Agreement, dated as of April 27, 2021, by and among the Loan Parties named therein and Truist Bank.
10.16			Third Amendment to the Credit and Guaranty Agreement, dated as of June 30, 2023, by and among Priority Holdings, LLC, as the Initial Borrower, the Credit Parties thereto, the 2023 Incremental Revolving Credit Lender and Truist Bank, as Administrative Agent and Collateral Agent.
10.17			Form Restricted Stock Unit Award Agreement.
10.18			Executive Employment Agreement between Priority Technology Holdings, Inc. and Tim O'Leary, dated September 19, 2022.
10.19			Priority Technology Holdings, Inc. Recoupment Policy adopted March 1, 2023
10.20			Amendment No. 1 to Equity and Asset Purchase Agreement, dated July 31, 2023, by and among Plastiq, Powered by Priority, LLC, Plastiq Inc., PLV Inc. and Nearside Business Corp.
10.21			Side Letter Agreement, dated July 28, 2023, by and between Plastiq, Powered by Priority, LLC and Colonnade Acquisition Corp. II.
10.22			Earnout Agreement, dated July 31, 2023, by and among Plastiq, Powered by Priority, LLC, Plastiq Inc., PLV Inc., Nearside Business Corp., Blue Torch Finance, LLC and Priority Holdings, LLC.
10.23 *			Priority Technology Holdings, Inc. Amended and Restated Certificate of Designations of the Powers, Preferences and Relative, Participating, Optional and Other Special Rights, and Qualifications, Limitations and Restrictions thereof, of Senior Preferred Stock.
21.1 *			Subsidiaries
31.1 *			Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

31.2 *		Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

32 **		Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *
~~101.INS~~	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH *
~~101.SCH~~		XBRL Taxonomy Extension Schema Document
101.CAL *
~~101.CAL~~		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB *			XBRL Taxonomy Extension Label Linkbase Document
~~101.DEF~~101.PRE *			XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF *			XBRL Taxonomy Extension Definition Linkbase Document

~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

* Filed herewith.

** Furnished herewith.

† Indicates exhibits that constitute management contracts or compensation plans or arrangements.

Table of Contents

SIGNATURES

~~In accordance with~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PRIORITY TECHNOLOGY HOLDINGS, INC.

	~~M I ACQUISITIONS, INC.~~

August 10, 2023		~~By:~~	/s/ ~~Joshua Sason~~
	~~Joshua Sason~~
	Thomas C. Priore Thomas C. Priore President, Chief Executive Officer and Chairman (Principal ~~executive officer)~~Executive Officer)

August 10, 2023		~~By:~~	/s/ ~~Marc Manuel~~
	~~Marc Manuel~~
	Timothy M. O'Leary Tim O'Leary Chief Financial Officer (Principal ~~financial and accounting officer)~~Financial Officer)

~~Date: November 14, 2017~~

~~M I ACQUISITIONS, INC.~~
~~(Exact Name of Registrant as Specified in Its Charter)~~Delaware				47-4257046

~~Delaware~~	~~47-4257046~~
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

2001 Westside Parkway
Suite 155
Alpharetta,		Georgia		30004
(Address of principal executive offices)				(Zip Code)

Registrant's telephone number, including area code: (404) 952-2107

Not applicable
(Former name, former address and former fiscal year, if changed since last report)


Term						Definition
2018 Plan						2018 Equity Incentive Plan
2021 Stock Purchase Plan						Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
2021 Share Repurchase Program						Priority Technology Holdings, Inc. 2021 Share Repurchase Program
AOCI						Accumulated other comprehensive income/loss
AP						Accounts payable
ASC						Accounting Standards Codification
APIC						Additional paid-in capital
Amended Certificate of Designation						Amended and Restated Certificate of Designation of Senior Preferred Stock effective as of June 30, 2023
ASU						Accounting Standards Update
B2B						Business-to-business
B2C						Business-to-consumer

CEO						Chief Executive Officer
CFO						Chief Financial Officer
Common Stock						The Company's Common Stock, par value $0.001
Credit Agreement						Credit and Guaranty Agreement with Truist Bank dated as of April 27, 2021 (as amended)
EAETR						Estimated annual effective tax rate

ESPP						Employee Stock Purchase Plan
Exchange Act						Securities Exchange Act of 1934
FASB						Financial Accounting Standards Board
FDIC						Federal Deposit Insurance Corporation
FBO						For the benefit of
FI						Financial institution
Finxera						Finxera Holdings, Inc.
GAAP						U.S. Generally Accepted Accounting Principles
IRA						Inflation Reduction Act, enacted by the U.S. Federal Government on August 16, 2022
ISO						Independent sales organization
ISV						Independent software vendor

LIBOR						London Interbank Offered Rate
NCI						Non-controlling interests in consolidated subsidiaries


Revolving credit facility						$55.0 million line issued under the Credit Agreement
Plastiq						Acquisition of Plastiq, Inc. and certain of its affiliates
PRTH						Priority Technology Holdings, Inc.
SEC						Securities and Exchange Commission
SOFR						Secured Overnight Financing Rate
SMB						Small to medium-sized businesses
Term facility						$620.0 million senior secured term loan facility issued under the Credit Agreement (including $320.0 million delayed draw facility)


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	17,567	$	18,454
Restricted cash	12,357		10,582
Accounts receivable, net of allowances of $1,227 and $1,143, respectively	60,130		78,113
Prepaid expenses and other current assets	14,608		11,832
Current portion of notes receivable, net of allowance of $0 and $0, respectively	2,530		1,471
Settlement assets and customer/subscriber account balances	710,705		532,018
Total current assets	817,897		652,470
Notes receivable, less current portion	3,018		3,191
Property, equipment and software, net	38,984		34,687
Goodwill	368,740		369,337
Intangible assets, net	269,428		288,794
Deferred income taxes, net	26,066		16,447
Other noncurrent assets	8,147		8,437
Total assets	$	1,532,280	$	1,373,363
Liabilities, Redeemable Senior Preferred Stock and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses	$	59,839	$	51,864
Accrued residual commissions	34,614		35,979
Customer deposits and advance payments	3,253		2,618
Current portion of long-term debt	6,200		6,200
Settlement and customer/subscriber account obligations	710,551		533,340
Total current liabilities	814,457		630,001
Long-term debt, net of current portion, discounts and debt issuance costs	589,932		598,926
Other noncurrent liabilities	11,752		11,643
Total noncurrent liabilities	601,684		610,569
Total liabilities	1,416,141		1,240,570
Commitments and contingencies (Note 13)
Redeemable senior preferred stock, net of discounts and issuance costs:
Redeemable senior preferred stock, $0.001 par value; 250,000 shares authorized; 225,000 issued and outstanding at June 30, 2023 and December 31, 2022	240,731		235,579
Stockholders' deficit:
Preferred stock, $0.001; 100,000,000 shares authorized; none issued or outstanding at June 30, 2023 and December 31, 2022	—		—
Common Stock, $0.001 par value; 1,000,000,000 shares authorized; 79,094,150 and 78,385,685 shares issued at June 30, 2023 and December 31, 2022, respectively; and 76,531,703 and 76,044,629 shares outstanding at June 30, 2023 and December 31, 2022, respectively	76		76
Treasury stock at cost, 2,562,447 and 2,341,056 shares at June 30, 2023 and December 31, 2022, respectively	(12,577)		(11,559)
Additional paid-in capital	—		9,650
Accumulated other comprehensive income	31		—
Accumulated deficit	(112,974)		(102,208)
Total stockholders' deficit attributable to stockholders of PRTH	(125,444)		(104,041)
Non-controlling interests in consolidated subsidiaries	852		1,255
Total stockholders' deficit	(124,592)		(102,786)
Total liabilities, redeemable senior preferred stock and stockholders' deficit	$	1,532,280	$	1,373,363

	September 30, 2017			December 31, 2016
	(unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	479,382		$	362,535
Prepaid expenses and other current assets		35,322			56,241
Total current assets		514,704			418,776

Cash and cash equivalents held in trust		54,948,047			54,731,828
Total Assets	$	55,462,751		$	55,150,604

Liabilities and Stockholders’ Equity

Current Liabilities:
Accounts payable and accrued expenses	$	474,677		$	111,011
Accounts payable - related party		60,000			—
Offering costs payable		11,616			11,616
Note payable		27,500			27,500
Total Current Liabilities		573,793			150,127

Deferred underwriting fee payable		1,062,022			1,062,022

Total Liabilities		1,635,815			1,212,149

Commitments

Common stock subject to possible conversion (4,718,573 and 4,748,033 shares at conversion value as of September 30, 2017 and December 31, 2016)		48,826,934			48,938,449

Stockholders’ Equity:
Preferred stock, $0.001 par value; 1,000,000 authorized none issued and outstanding		—			—
Common stock, $0.001 par value; 30,000,000 shares authorized; 2,340,170 and 2,310,710 shares issued and outstanding (excluding 4,718,573 and 4,748,033 shares subject to possible conversion) at September 30, 2017 and December 31, 2016, respectively		2,340			2,311
Additional paid in capital		5,227,402			5,115,916
Accumulated deficit		(229,740	)		(118,221	)
Total Stockholders’ Equity		5,000,002			5,000,006

Total Liabilities and Stockholders’ Equity	$	55,462,751		$	55,150,604

	For the Three Months		For the Three Months			For the Nine Months			For the Nine Months
	Ended		Ended			Ended			Ended
	September 30, 2017		September 30, 2016			September 30, 2017			September 30, 2016

EXPENSES
Administration fee - related party	$	30,000	$	5,667		$	90,000		$	5,667
Operating costs		367,033		61,360			714,534			68,624

TOTAL EXPENSES		397,033		67,027			804,534			74,291

OTHER INCOME
Extinguishment of debt		—		27,500			—			27,500
Settlement income		427,701		—			427,701			—
Interest income		121,682		3,145			265,314			3,145

TOTAL OTHER INCOME		549,383		30,645			693,015			30,645

Net income (loss)		152,350		(36,382	)		(111,519	)		(43,646	)

Net income (loss) per shares of common stock – basic and diluted	$	0.02	$	0.01		$	(0.14	)	$	0.00

Weighted average shares of common stock outstanding – basic and diluted		2,344,454		1,363,737			2,327,754			1,288,329


	Common Stock			Treasury Stock			APIC		AOCI		Accumulated Deficit		Deficit Attributable to Stockholders		NCIs		Total
	Shares	$		Shares	$
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	—	—		—	—		1,936		—		—		1,936		—		1,936
ESPP compensation and vesting of stock-based compensation	517	—		—	—		37		—		—		37		—		37
Shares withheld for taxes	(157)	—		157	(777)		—		—		—		(777)		—		(777)
Dividends on redeemable senior preferred stock	—	—		—	—		(10,477)		—		—		(10,477)		—		(10,477)
Accretion of redeemable senior preferred stock	—	—		—	—		(818)		—		—		(818)		—		(818)
Adjustment to NCI	—	—		—	—		—		—		—		—		(403)		(403)
Foreign currency translation adjustment	—	—		—	—		—		24		—		24		—		24
Net loss	—	—		—	—		—		—		(506)		(506)		—		(506)
March 31, 2023	76,404	$	76	2,498	$	(12,336)	$	328	$	24	$	(102,714)	$	(114,622)	$	852	$	(113,770)
Equity-classified stock-based compensation	—	—		—	—		1,746		—		—		1,746		—		1,746
ESPP compensation and vesting of stock-based compensation	192	—		—	—		43		—		—		43		—		43
Shares withheld for taxes	(65)	—		65	(241)		—		—		—		(241)		—		(241)
Dividends on redeemable senior preferred stock	—	—		—	—		(10,934)		—		—		(10,934)		—		(10,934)
Accretion of redeemable senior preferred stock	—	—		—	—		(831)		—		—		(831)		—		(831)

Foreign currency translation adjustment	—	—		—	—		—		7		—		7		—		7
Reclassification of negative additional paid-in capital	—	—		—	—		9,648		—		(9,648)		—		—		—
Net loss	—	—		—	—		—		—		(612)		(612)		—		(612)
June 30, 2023	76,531	$	76	2,563	$	(12,577)	$	—	$	31	$	(112,974)	$	(125,444)	$	852	$	(124,592)

	Three Months Ended September 30,			Three Months Ended September 30,
	2017			2016
Net income (loss)	$	152,350		$	(36,382	)
Less: Income attributable to common shares subject to redemption		(108,127	)		47,084
Adjusted net income (loss)	$	44,223		$	10,702

Weighted average shares outstanding, basic and diluted		2,344,454			1,363,737

Basic and diluted net income (loss) per common share	$	0.02		$	0.01

	Nine Months Ended September 30,			Nine Months Ended September 30,
	2017			2016
Net loss	$	(111,519	)	$	(43,646	)
Less: Income attributable to common shares subject to redemption		(210,500	)		47,084
Adjusted net income (loss)	$	(322,019	)	$	3,438

Weighted average shares outstanding, basic and diluted		2,327,754			1,288,329

Basic and diluted net loss per common share	$	(0.14	)	$	0.00


	June 30, 2023		December 31, 2022
in thousands, except share data, which is in whole units
Number of shares purchased(1)	—		1,309,374
Average price paid per share	$	—	$	4.42
Total Investment(1)	$	—	$	5,791