Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 24, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-37872 | ||
Entity Registrant Name | Priority Technology Holdings, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-4257046 | ||
Entity Address, Address Line One | 2001 Westside Parkway | ||
Entity Address, Address Line Two | Suite 155 | ||
Entity Address, City or Town | Alpharetta, | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30004 | ||
City Area Code | 800 | ||
Local Phone Number | 935-5961 | ||
Title of 12(b) Security | Common stock, $0.001 par value | ||
Trading Symbol | PRTH | ||
Security Exchange Name | NASDAQ | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Public Float | $ 30 | ||
Entity Common Stock, Shares Outstanding (in shares) | 67,637,508 | ||
Documents Incorporated by Reference | Portions of the definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A relating to the Annual Meeting of shareholders of Priority Technology Holdings, Inc., scheduled to be held on June 9, 2021, will be incorporated by reference in Part III of this Form 10-K. Priority Technology Holdings, Inc. intends to file such proxy statement with the Securities and Exchange Commission not later than 120 days after its fiscal year ended December 31, 2020. | ||
Entity Central Index Key | 0001653558 | ||
Amendment Flag | false | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 9,241 | $ 3,234 |
Restricted cash | 78,879 | 47,231 |
Accounts receivable, net of allowances of $574 and $803, respectively | 41,321 | 37,993 |
Prepaid expenses and other current assets | 3,500 | 3,897 |
Current portion of notes receivable, net of allowances of $467 and $0, respectively | 2,190 | 1,326 |
Settlement assets | 753 | 533 |
Total current assets | 135,884 | 94,214 |
Notes receivable, less current portion | 5,527 | 4,395 |
Property, equipment and software, net | 22,875 | 23,518 |
Goodwill | 106,832 | 109,515 |
Intangible assets, net | 98,057 | 182,826 |
Deferred income tax assets, net | 46,697 | 49,657 |
Other non-current assets | 1,957 | 380 |
Total assets | 417,829 | 464,505 |
Current liabilities: | ||
Accounts payable and accrued expenses | 29,821 | 26,965 |
Accrued residual commissions | 23,824 | 19,315 |
Customer deposits and advance payments | 2,883 | 4,928 |
Current portion of long-term debt | 19,442 | 4,007 |
Settlement obligations | 72,878 | 37,789 |
Total current liabilities | 148,848 | 93,004 |
Long-term debt, net of current portion, discounts and deferred financing costs | 357,873 | 485,578 |
Other non-current liabilities | 9,672 | 6,612 |
Total non-current liabilities | 367,545 | 492,190 |
Total liabilities | 516,393 | 585,194 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Preferred stock, par value $0.001 per share; 100,000,000 authorized; zero shares issued and outstanding at December 31, 2020 and 2019. | 0 | 0 |
Common stock, par value of $0.001 per share; 1.0 billion shares authorized; 67,842,204 shares issued and 67,390,980 shares outstanding at December 31, 2020; and 67,512,167 shares issued and 67,060,943 shares outstanding at December 31, 2019. | 68 | 68 |
Additional paid-in capital | 5,769 | 3,651 |
Treasury stock, at cost (451,224 shares) | (2,388) | (2,388) |
Accumulated deficit | (102,013) | (127,674) |
Total deficit attributable to stockholders of Priority Technology Holdings, Inc. | (98,564) | (126,343) |
Non-controlling interest | 0 | 5,654 |
Total stockholders' deficit | (98,564) | (120,689) |
Total liabilities and stockholders' deficit | $ 417,829 | $ 464,505 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable allowance for credit loss | $ 574,000 | $ 803,000 |
Notes receivable allowance for credit loss | $ 467,000 | $ 0 |
Preferred stock par value (USD per share) | $ 0.001 | $ 0.001 |
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock issued (in shares) | 67,842,204 | 67,512,167 |
Common stock, shares outstanding (in shares) | 67,390,980 | 67,060,943 |
Treasury stock (in shares) | 451,224 | 451,224 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | |||
REVENUES | $ 404,342 | $ 371,854 | $ 375,822 |
OPERATING EXPENSES: | |||
Costs of services | 277,374 | 252,569 | 269,284 |
Salary and employee benefits | 39,507 | 42,214 | 38,324 |
Depreciation and amortization | 40,775 | 39,092 | 19,740 |
Selling, general and administrative | 25,825 | 30,795 | 32,081 |
Total operating expenses | 383,481 | 364,670 | 359,429 |
Income from operations | 20,861 | 7,184 | 16,393 |
OTHER INCOME (EXPENSE): | |||
Interest expense | (44,839) | (40,653) | (29,900) |
Debt extinguishment and modification expenses | 0 | ||
Gain on sale of business, net | 0 | 0 | |
Other income (expense), net | 596 | 710 | |
Total other income (expenses), net | 61,097 | (39,943) | (36,719) |
Income (loss) before income taxes | 81,958 | (32,759) | (20,326) |
Income tax expense (benefit) | 10,899 | 830 | (2,490) |
Net income (loss) | 71,059 | (33,589) | (17,836) |
Less income attributable to redeemable and redeemed non-controlling interests | (45,398) | 0 | 0 |
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | $ 25,661 | $ (33,589) | $ (17,836) |
Income (loss) per common share for stockholders of Priority Technology Holdings, Inc.: | |||
Basic (in dollars per share) | $ 0.38 | $ (0.50) | $ (0.29) |
Diluted (in dollars per share) | $ 0.38 | $ (0.50) | $ (0.29) |
Weighted-average common shares outstanding: | |||
Basic (in shares) | 67,158 | 67,086 | 61,607 |
Diluted (in shares) | 67,263 | 67,086 | 61,607 |
PRO FORMA (C-corporation basis): | |||
Pro forma income tax benefit (unaudited) | $ (3,169) | ||
Pro forma net loss (unaudited) | $ (17,157) | ||
Basic and diluted (unaudited) (in dollars per share) | $ (280) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Total | Preferred Stock | Common Stock | Treasury Stock | Additional Paid-In Capital (Deficit) | Accumulated Deficit | Noncontrolling Interest | Parent |
Beginning balance (in shares) at Dec. 31, 2017 | 73,110 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions (in shares) | (12,565) | |||||||
Pro-rata adjustment and forfeitures (in shares) | (724) | |||||||
Conversion of MI Acquisitions, Inc. shares (in shares) | 6,667 | |||||||
Founders' Shares (in shares) | (175) | |||||||
Vesting of equity-based compensation (in shares) | 250 | |||||||
Common stock issued for business acquisitions (in shares) | 475 | |||||||
Warrant redemptions (in shares) | 0 | |||||||
Shares repurchased (in shares) | 0 | 0 | ||||||
Ending balance (in shares) at Dec. 31, 2018 | 0 | 67,038 | 0 | |||||
Beginning balance at Dec. 31, 2017 | $ 73 | $ 0 | $ 0 | $ (95,978) | $ 0 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions | (13) | (36,548) | (28,342) | |||||
Conversion of MI Acquisitions, Inc. shares | 7 | 49,382 | ||||||
Vesting of share-based compensation | 1,063 | 586 | ||||||
Repurchases of common stock | 0 | |||||||
Distributions to members | (7,075) | |||||||
Vesting of share-based compensation | 0 | |||||||
Founders' Shares | (2,118) | |||||||
Recapitalization costs | (9,704) | |||||||
Common stock issued for business combinations | $ 5,000 | 5,000 | ||||||
Net deferred income tax asset related to loss of partnership status | 47,485 | |||||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | (17,836) | (17,836) | ||||||
Issuance of NCI in subsidiary | 0 | |||||||
Redemption of NCI in subsidiary | 0 | |||||||
Earnings attributable to redeemable and redeemed NCIs | 0 | |||||||
Earnings distributed to redeemable and redeemed NCIs | 0 | |||||||
Ending balance at Dec. 31, 2018 | (94,018) | $ 0 | $ 67 | $ 0 | 0 | (94,085) | 0 | $ (94,018) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions (in shares) | 0 | |||||||
Pro-rata adjustment and forfeitures (in shares) | 0 | |||||||
Conversion of MI Acquisitions, Inc. shares (in shares) | 0 | |||||||
Founders' Shares (in shares) | 0 | |||||||
Vesting of equity-based compensation (in shares) | 54 | |||||||
Common stock issued for business acquisitions (in shares) | 0 | |||||||
Warrant redemptions (in shares) | 420 | |||||||
Shares repurchased (in shares) | (451) | (451) | ||||||
Ending balance (in shares) at Dec. 31, 2019 | 0 | 67,061 | 451 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions | $ 0 | 0 | 0 | |||||
Conversion of MI Acquisitions, Inc. shares | 0 | 0 | ||||||
Vesting of share-based compensation | 1 | 3,652 | 0 | |||||
Repurchases of common stock | $ (2,388) | |||||||
Distributions to members | 0 | |||||||
Vesting of share-based compensation | (1) | |||||||
Founders' Shares | 0 | |||||||
Recapitalization costs | 0 | |||||||
Common stock issued for business combinations | 0 | 0 | ||||||
Net deferred income tax asset related to loss of partnership status | 0 | |||||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | (33,589) | (33,589) | ||||||
Issuance of NCI in subsidiary | 5,654 | |||||||
Redemption of NCI in subsidiary | 0 | |||||||
Earnings attributable to redeemable and redeemed NCIs | 0 | |||||||
Earnings distributed to redeemable and redeemed NCIs | 0 | |||||||
Ending balance at Dec. 31, 2019 | (120,689) | $ 0 | $ 68 | $ (2,388) | 3,651 | (127,674) | 5,654 | (126,343) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions (in shares) | 0 | |||||||
Pro-rata adjustment and forfeitures (in shares) | 0 | |||||||
Conversion of MI Acquisitions, Inc. shares (in shares) | 0 | |||||||
Founders' Shares (in shares) | 0 | |||||||
Vesting of equity-based compensation (in shares) | 330 | |||||||
Common stock issued for business acquisitions (in shares) | 0 | |||||||
Warrant redemptions (in shares) | 0 | |||||||
Shares repurchased (in shares) | 0 | 0 | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 67,391 | 451 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Member redemptions | $ 0 | 0 | 0 | |||||
Conversion of MI Acquisitions, Inc. shares | 0 | 0 | ||||||
Vesting of share-based compensation | 2,118 | 0 | ||||||
Repurchases of common stock | $ 0 | |||||||
Distributions to members | 0 | |||||||
Founders' Shares | 0 | |||||||
Recapitalization costs | 0 | |||||||
Common stock issued for business combinations | 0 | 0 | ||||||
Net deferred income tax asset related to loss of partnership status | 0 | |||||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | 25,661 | 25,661 | ||||||
Issuance of NCI in subsidiary | 0 | |||||||
Redemption of NCI in subsidiary | (5,654) | |||||||
Earnings attributable to redeemable and redeemed NCIs | 45,398 | |||||||
Earnings distributed to redeemable and redeemed NCIs | (45,398) | |||||||
Ending balance at Dec. 31, 2020 | $ (98,564) | $ 68 | $ (2,388) | $ 5,769 | $ (102,013) | $ 0 | $ (98,564) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 71,059 | $ (33,589) | $ (17,836) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Gain recognized on sale of business | (107,239) | 0 | 0 |
Transaction costs for sale of business | (5,383) | 0 | 0 |
Depreciation and amortization of assets | 40,775 | 39,092 | 19,740 |
Equity-classified and liability-classified share-based compensation | 2,430 | 3,652 | 1,649 |
Amortization of debt issuance costs and discounts | 2,396 | 1,667 | 1,418 |
Equity in losses and impairment of unconsolidated entities | 211 | 23 | 865 |
Deferred income tax expense (benefit) | 5,905 | (8,537) | (2,871) |
Change in allowance for deferred tax assets | (2,945) | 9,302 | (66) |
Change in fair value of warrant liability, net | 0 | 0 | 3,458 |
Change in fair value of contingent consideration | (360) | (620) | 0 |
Write-off of deferred loan costs and discount | 1,523 | 0 | 0 |
Payment-in-kind interest | 8,573 | 5,126 | 4,897 |
Impairment charges for intangible asset | 1,753 | 0 | 0 |
Other non-cash items, net | 233 | (831) | 211 |
Change in operating assets and liabilities (net of business combinations and disposal): | |||
Accounts receivable | (5,160) | (1,736) | 8,180 |
Settlement assets and obligations, net | 34,870 | 27,284 | 6,016 |
Prepaid expenses and other current assets | 65 | (1,230) | 171 |
Notes receivable | (2,230) | (390) | 4,862 |
Customer deposits and advance payments | (2,045) | 1,646 | (1,571) |
Accounts payable and other accrued liabilities | 1,343 | (1,061) | 1,531 |
Other assets and liabilities, net | 1,298 | (434) | 694 |
Net cash provided by operating activities | 47,072 | 39,364 | 31,348 |
Cash flows from investing activities: | |||
Sale of business | 179,416 | 0 | 0 |
Acquisitions of businesses | 0 | 0 | (7,508) |
Additions to property, equipment and software | (7,461) | (11,118) | (10,562) |
Notes receivable loan funding | 0 | (3,500) | 0 |
Acquisitions of intangible assets | (5,559) | (82,945) | (90,858) |
Other investing activity | 0 | (184) | 0 |
Net cash provided by (used in) investing activities | 166,396 | (97,747) | (108,928) |
Cash flows from financing activities: | |||
Proceeds from issuance of long-term debt, net of issue discount | 0 | 69,650 | 126,813 |
Repayments of long-term debt | (110,507) | (3,828) | (2,834) |
Profit distributions to non-controlling interests of subsidiaries | (45,398) | 0 | 0 |
Redemption of non-controlling interest in subsidiary | (5,654) | 0 | 0 |
Borrowings under revolving line of credit | 7,000 | 14,000 | 8,000 |
Repayments of borrowings under revolving line of credit | (18,505) | (2,500) | (8,000) |
Debt issuance and modification costs (paid) refunded | (2,749) | 83 | (425) |
Repurchases of common stock | 0 | (2,388) | 0 |
Distributions from equity | 0 | 0 | (7,075) |
Redemptions of equity interests | 0 | 0 | (76,211) |
Recapitalization proceeds | 0 | 0 | 49,389 |
Redemption of warrants | 0 | 0 | (12,701) |
Recapitalization costs | 0 | 0 | (9,704) |
Net cash (used in) provided by financing activities | (175,813) | 75,017 | 67,252 |
Net increase (decrease) in cash and restricted cash | 37,655 | 16,634 | (10,328) |
Cash and restricted cash at beginning of year | 50,465 | 33,831 | 44,159 |
Cash and restricted cash at end of year | 88,120 | 50,465 | 33,831 |
Reconciliation of cash and restricted cash: | |||
Total cash and restricted cash | 88,120 | 33,831 | 33,831 |
Supplemental cash flow information: | |||
Cash paid for interest | 33,433 | 33,091 | 23,350 |
Cash paid for income taxes, net of refunds | 8,370 | 0 | 0 |
Recognition of initial net deferred income tax asset | 0 | 0 | 47,478 |
Non-cash investing and financing activities: | |||
Payment-in-kind interest added to principal of debt obligations | 8,573 | 5,126 | 4,897 |
Purchases of property, equipment and software through accounts payable | 0 | 23 | 50 |
Payment of accrued contingent consideration for asset acquisition from offset of accounts receivable from same entity | 1,686 | 0 | 0 |
Intangible assets acquired by issuing non-controlling interest in a subsidiary | 0 | 5,654 | 0 |
Notes receivable from sellers used as partial consideration for business acquisitions | 0 | 0 | 560 |
Common stock issued as partial consideration in business acquisitions in Consumer Payments segment | $ 0 | $ 0 | $ 5,000 |
NATURE OF BUSINESS AND ACCOUNTI
NATURE OF BUSINESS AND ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Nature of Business and Accounting Policies | NATURE OF BUSINESS AND ACCOUNTING POLICIES The Business Headquartered in Alpharetta, Georgia, Priority Technology Holdings, Inc. and subsidiaries (together, the "Company") began operations in 2005 with a mission to build a merchant inspired payments platform that would advance the goals of its customers and partners. Today, the Company is a leading provider of merchant acquiring and commercial payment solutions, offering unique product capabilities to small and medium size businesses ("SMBs") and enterprises and distribution partners in the United States. The Company operates from a purpose-built business platform that includes tailored customer service offerings and bespoke technology development, allowing the Company to provide end-to-end solutions for payment and payment-adjacent needs. The Company provides: • Consumer payments processing solutions for business-to-consumer ("B2C") transactions through independent sales organizations ("ISOs"), financial institutions, independent software vendors ("ISVs"), and other referral partners. Our proprietary MX platform for B2C payments provides merchants a fully customizable suite of business management solutions. • Commercial payments solutions such as automated vendor payments and professionally curated managed services to industry leading financial institutions and networks. Our proprietary business-to-business ("B2B") Commercial Payment Exchange (CPX) platform was developed to be a best-in-class solution for buyer/supplier payment enablement. • Institutional services (also known as Managed Services) solutions that provide audience-specific programs for institutional partners and other third parties looking to leverage the Company's professionally trained and managed call center teams for customer onboarding, assistance, and support, including marketing and direct-sales resources. • Integrated partners solutions for ISVs and other third-parties that allow them to leverage the Company's core payments engine via robust application program interfaces ("APIs") resources and high-utility embeddable code. • Consulting and development solutions focused on the increasing demand for integrated payments solutions for transitioning to the digital economy. The Company provides its services through three reportable segments: (1) Consumer Payments, (2) Commercial Payments, and (3) Integrated Partners. For additional information about our reportable segments, see Note 18 , Segment Information . To provide many of its services, the Company enters into agreements with payment processors which in turn have agreements with multiple card associations. These card associations comprise an alliance aligned with insured financial institutions ("member banks") that work in conjunction with various local, state, territory, and federal government agencies to make the rules and guidelines regarding the use and acceptance of credit and debit cards. Card association rules require that vendors and processors be sponsored by a member bank and register with the card associations. The Company has multiple sponsorship bank agreements and is itself a registered ISO with Visa®. The Company is also a registered member service provider with MasterCard®. The Company's sponsorship agreements allow the capture and processing of electronic data in a format to allow such data to flow through networks for clearing and fund settlement of merchant transactions. Corporate History and Recapitalization MI Acquisitions, Inc. ("MI Acquisitions") was incorporated under the laws of the state of Delaware as a special purpose acquisition company ("SPAC") whose objective was to acquire, through a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination, one or more businesses or entities. MI Acquisitions completed an initial public offering ("IPO") in September 2016, and MI Acquisitions' common stock began trading on The Nasdaq Capital Market with the symbol MACQ. In addition, MI Acquisitions completed a private placement to certain initial stockholders of MI Acquisitions. MI Acquisitions received gross proceeds of approximately $54.0 million from the IPO and private placement. On July 25, 2018, MI Acquisitions acquired all of the outstanding member equity interests of Priority Holdings, LLC ("Priority") in exchange for the issuance of MI Acquisitions' common stock (the "Business Combination") from a private placement. As a result, Priority, which was previously a privately-owned company, became a wholly-owned subsidiary of MI Acquisitions. Simultaneously with the Business Combination, MI Acquisitions changed its name to Priority Technology Holdings, Inc. and its common stock began trading on The Nasdaq Global Market with the symbol PRTH. As a SPAC, MI Acquisitions had substantially no business operations prior to July 25, 2018. For financial accounting and reporting purposes under accounting principles generally accepted in the United States ("U.S. GAAP"), the acquisition was accounted for as a "reverse merger," with no recognition of goodwill or other intangible assets. Under this method of accounting, MI Acquisitions was treated as the acquired entity whereby Priority was deemed to have issued common stock for the net assets and equity of MI Acquisitions consisting mainly of cash of $49.4 million, accompanied by a simultaneous equity recapitalization (the "Recapitalization") of Priority. The net assets of MI Acquisitions are stated at historical cost and, accordingly, the equity and net assets of the Company have not been adjusted to fair value. As of July 25, 2018, the consolidated financial statements of the Company include the combined operations, cash flows, and financial positions of both MI Acquisitions and Priority. Prior to July 25, 2018, the results of operations, cash flows, and financial position are those of Priority. The units and corresponding capital amounts and earnings per unit of Priority prior to the Recapitalization have been retroactively revised as shares reflecting the exchange ratio established in the Recapitalization. The Company's President, Chief Executive Officer and Chairman controls a majority of the voting power of the Company's outstanding common stock. As a result, the Company is a "controlled company" within the meaning of the corporate governance standards of the Nasdaq Stock Market, LLC ("Nasdaq"). Emerging Growth Company The Company is an "emerging growth company" (EGC), as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). The Company may remain an EGC until December 31, 2021. However, if the Company's non-convertible debt issued within a rolling three-year period or if its revenue for any year exceeds $1.07 billion, the Company would cease to be an EGC immediately, or the market value of its common stock that is held by non-affiliates exceeds $700.0 million on the last day of the second quarter of any given year, the Company would cease to be an EGC as of the beginning of the following year. As an EGC, the Company is not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. Additionally, the Company as an EGC may continue to elect to delay the adoption of any new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, the Company's financial statements may not be comparable to companies that comply with public company effective dates. Basis of Presentation and Consolidation The accompanying consolidated financial statements include those of the Company and its controlled subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Investments in unconsolidated affiliated companies are accounted for under the equity method and are included in "Other non-current assets" in the accompanying consolidated balance sheets. The Company generally utilizes the equity method of accounting when it has an ownership interest of between 20% and 50% in an entity, provided the Company is able to exercise significant influence over the investee's operations. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. Components of Revenues and Expenses Revenues See Note 3 , Revenue , for information about our revenue. Costs of Services Costs of services primarily consist of residual payments to ISOs and other direct costs of providing payment services. The residual payments represent commissions paid to ISOs and are generally based upon a percentage of the net revenues generated from merchant transactions. Other costs of services consist of third-party costs related to the Company's commercial payment services, ACH processing services, salaries that are reimbursed under cost-plus business process outsourcing services, and the cost of equipment (point of sale terminals). Selling, General and Administrative Selling, general and administrative expenses include mainly professional services, advertising, rent, office supplies, software licenses, utilities, state and local franchise and sales taxes, litigation settlements, executive travel, insurance, and expenses related to the Business Combination. Interest Expense Interest expense consists of interest on outstanding debt and amortization of deferred financing costs and original issue discounts. Other, net Other, net is composed of interest income, changes in fair value of warrant liabilities, and equity in losses and impairment of unconsolidated entities. Interest income consists mainly of interest received pursuant to notes receivable from independent sales agents and another entity (see Note 6 , Notes Receivable ). Equity in loss and impairment of unconsolidated entities consists of the Company's share of the income or loss of its equity method investment as well as any impairment charges related to such investments. At December 31, 2020, the Company no longer has any investments that are accounted for under the equity method. Changes in fair value of warrant liability relates to a warrant that was fully redeemed in 2018. Debt Extinguishment and Modification Expenses Debt extinguishment expenses represents the write-offs of unamortized deferred financing costs and original issue discount relating to the extinguishment, including partial extinguishment, of debt. Debt modification expenses represents amounts paid to third parties to modify existing debt agreements when those amounts are not eligible for capitalization. Earnings Attributable to Redeemable and Redeemed Non-Controlling Interests Represents the earnings and gains that are attributable to the non-controlling equity interests of certain of the Company's consolidated subsidiaries based on the operating agreements of the subsidiaries. See the "Non-Controlling" section under the following header for "Significant Accounting Policies." Net Income (Loss) Attributable to Stockholders of Priority Technology Holdings, Inc. Represents the net income or loss attributable to the stockholders of Priority Technology Holdings, Inc. after subtracting earnings, gains, or losses of consolidated subsidiaries that are attributable to the non-controlling equity interests of the subsidiaries. Comprehensive Income (Loss) Comprehensive income (loss) represents the sum of net income (loss) and other amounts that are not included in the consolidated statement of operations as the amounts have not been realized. For the years ended December 31, 2020, 2019, and 2018, there were no differences between the Company's net income (loss) and comprehensive income (loss). Therefore, no separate Statements of Other Comprehensive Income (Loss) are included in the financial statements for the reporting periods. Significant Accounting Policies Revenue Recognition The Company recognizes revenue when it satisfies a performance obligation by transferring a service or good to the customer in an amount to which the Company expects to be entitled (i.e., transaction price) allocated to the distinct services or goods. The Company uses the 5-step model in ASC 606 to determine when and how much revenue to recognize: Step 1 - Identify the contract with the customer Step 2 - Identify the performance obligation Step 3 - Determine the transaction price Step 4 - Allocate the transaction price to the performance obligation Step 5 - Recognize revenue when (or as) the Company satisfies the performance obligation Instead of evaluating each contract with a customer on an individual basis, the Company elects the permitted practical expedient that allows it to use the portfolio approach for many of its contracts since this approach’s impact on the financial statements, when applied to a group of contracts (or performance obligations) with similar characteristics, is not materially different from the impact of applying the revenue standard on an individual contract basis. Under the portfolio practical expedient, collectability is still assessed at the individual contract level when determining if a contract exists. Deferred revenues are not material for any reporting period. The Company's reportable segments are organized by services the Company provides through distinct business units. Set forth below is a description of the Company's revenue recognition polices by segment. Consumer Payments - Revenue in this segment represents merchant card fee revenues, which involves promises to the customer for services related to the electronic authorization, acceptance, processing, and settlement of credit, debit and electronic benefit payment transactions through the payment networks. Merchants, who are the Company’s customers, are charged rates which are based on various factors, including the type of bank card, card brand, merchant charge volume, the merchant's industry and the merchant's risk profile. Typically, revenues generated from these transactions are based on a variable percentage of the dollar amount of each transaction, and in some instances, additional fees are charged for each transaction. The Company's merchant contracts involve three parties: the Company, the merchant and the sponsoring bank. The Company's sponsoring banks collect the gross merchant discount from the card holder’s issuing bank, pay the interchange fees and assessments to the payment networks and credit card associations, retain their fees, and pay to the Company the remaining amount which represents the Company's revenue. The Company recognizes its revenue net of the amounts retained by these third parties. The Company incurs internal costs and costs of other third parties related to processing services. Merchant customers may also be charged miscellaneous fees, including statement fees, annual fees, and monthly minimum fees, fees for handling chargebacks, gateway fees and fees for other miscellaneous services. Commercial Payments - This segment provides business-to-business ("B2B") automated payment services for customers, including virtual payments, purchase cards, electronic funds transfers, ACH payments, and check payments. Revenues are generally earned on a per-transaction basis and are recognized by the Company net of certain third-party costs for interchange fees, assessments to the payment networks, credit card associations, and sponsor bank fees. In this segment, a portion of the revenue is rebated to certain customers, and these rebates are reported as a reduction of revenue. Additionally, this segment provides outsourced business process services by providing a sales force to certain enterprise customers. Such business process services are provided on a cost-plus fee arrangement and revenue is recognized to the extent of billable rates times hours worked and other reimbursable costs incurred. For most performance obligations associated with outsourced services that are satisfied over time, the Company applies the permitted practical expedient known as the “invoice practical expedient” that allows the Company to recognize revenue in the amount of consideration to which the Company has the right to invoice when that amount corresponds directly to the value transferred to the customer. Integrated Partners - The Integrated Partners segment earns revenue by providing services for payment-adjacent technologies that facilitate the acceptance of electronic payments from customers who conduct business in the rental real estate, rental storage, medical, and hospitality industries. A substantial portion of this segment’s revenues are earned as an agent of a third party, and therefore this earned revenue is reported as a net amount within revenue. Cash and Restricted Cash Cash includes cash held at financial institutions that is owned by the Company. Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements or reserves held per contact terms. Accounts Receivable Accounts receivable are stated net of allowance for doubtful accounts and are amounts primarily due from the Company's sponsor banks for revenues earned, net of related interchange and processing fees, and do not bear interest. Other types of accounts receivable are from agents, merchants and other customers. Amounts due from sponsor banks are typically paid within 30 days following the end of each month. Allowance for Doubtful Accounts Receivable and Notes Receivable The Company records an allowance for doubtful accounts and/or notes receivable when it is probable that the account receivable balance or the note receivable balance will not be collected, based upon loss trends and an analysis of individual accounts. Accounts receivable and notes receivable are written off when deemed uncollectible. Recoveries of accounts receivable and notes receivable, if any, previously written off are recognized when received. The allowance for doubtful accounts was $0.6 million and $0.8 million at December 31, 2020 and 2019, respectively. The allowance for doubtful notes receivable was $0.5 million and zero at December 31, 2020 and 2019, respectively. Customer Deposits and Advance Payments The Company may receive cash payments from certain customers and vendors that require future performance obligations by the Company. Amounts associated with obligations expected to be satisfied within one year are reported in Customer deposits and advance payments on the Company's consolidated balance sheets and amounts associated with obligations expected to be satisfied after one year are reported as a component of Other non-current liabilities on the Company's consolidated balance sheets. These payments are subsequently recognized in the Company's consolidated statements of operations when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments. A vendor may make an upfront payment to the Company to offset costs that the Company incurs to integrate the vendor into the Company’s operations. These upfront payments are deferred by the Company and are subsequently amortized against expense in its statement of operations as the related costs are incurred by the Company in accordance with the agreement with the vendor. Property and Equipment, Including Leases Property and equipment are stated at cost, except for property and equipment acquired in a merger or business combination, which is recorded at fair value at the time of the transaction. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company has multiple operating leases related to office space. Operating leases do not involve transfer of risks and rewards of ownership of the leased asset to the lessee, therefore the Company expenses the costs of its operating leases. The Company may make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are generally amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter. Expenditures for repairs and maintenance which do not extend the useful life of the respective assets are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales, or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts, and the gains or losses are presented as a component of income or loss from operations. Costs Incurred to Develop Software for Internal Use Costs incurred to develop computer software for internal use are capitalized once: (1) the preliminary project stage is completed, (2) management authorizes and commits to funding a specific software project, and (3) it is probable that the project will be completed and the software will be used to perform the function intended. Costs incurred prior to meeting the qualifications are expensed as incurred. Capitalization of costs ceases when the project is substantially complete and ready for its intended use. Post-implementation costs related to the internal use computer software, are expensed as incurred. Internal use software development costs are amortized using the straight-line method over its estimated useful life which generally ranges from three Settlement Assets and Obligations Settlement processing assets and obligations recognized on the Company's consolidated balance sheet represent intermediary balances arising in the Company's settlement process for merchants and other customers. See Note 5 , Settlement Assets and Obligations . Debt Issuance and Modification Costs Eligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's consolidated balance sheets as a direct reduction in the carrying value of the associated debt liability. Business Combinations The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired. The fair values of the assets acquired and liabilities assumed are determined based upon the valuation of the acquired business and involves making significant estimates and assumptions based on facts and circumstances that existed as of the acquisition date. The Company uses a measurement period following the acquisition date to gather information that existed as of the acquisition date that is needed to determine the fair value of the assets acquired and liabilities assumed. The measurement period ends once all information is obtained, but no later than one year from the acquisition date. Non-Controlling Interests The Company issued non-voting profit-sharing interests in three of its subsidiaries that were formed in 2018 or 2019 to acquire the operating assets of certain businesses (see Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations ). The Company is the majority owner of these subsidiaries and therefore the profit-sharing interests are deemed to be non-controlling interests ("NCI"). To estimate the initial fair value of a profit-sharing interest, the Company utilized future cash flow scenarios with focus on those cash flow scenarios that could result in future distributions to the NCIs. Profits or losses are attributed to an NCI based on the hypothetical-liquidation-at-book-value method that utilizes the terms of the profit-sharing agreement between the Company and the NCIs. As the majority owner, the Company has call rights on the profit-sharing interests issued to the NCIs. These call rights can be executed only under certain circumstances and execution is always voluntary at the Company's discretion. The call rights do not meet the definition of a free-standing financial instrument or derivative, thus no separate accounting is required for these call rights. Based on the LLC agreements for these three subsidiaries, in certain instances the NCIs are entitled to certain earnings of the respective subsidiary. Prior to 2020, no earnings were attributable to any NCIs. All material earnings attributable to the NCIs for the year ended December 31, 2020 were simultaneously distributed to the NCIs. As disclosed in Note 2 , Disposal of Business , the NCIs of one of these subsidiaries, Priority Real Estate Technology, LLC, were fully redeemed during the year ended December 31, 2020. At December 31, 2020, the NCIs of one of the other subsidiaries, Priority PayRight Health Solutions, LLC, have also been fully redeemed and only one of the subsidiaries, Priority Hospitality Technology, LLC, has NCIs at December 31, 2020. See Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations . Goodwill The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. See N ote 7 , Goodwill and Other Intangible Assets . Other Intangible Assets Other Intangible assets are initially recorded at cost upon acquisition by the Company. The carrying value of an intangible asset acquired in an asset acquisition may be subsequently increased for contingent consideration when due to the seller and such amounts can be estimated. The portion of any unpaid purchase price that is contingent on future activities is not initially recorded by the Company on the date of acquisition. Rather, the Company recognizes contingent consideration when it becomes probable and estimable. All of the Company's intangible assets, except Goodwill, have finite lives and are subject to amortization. Intangible assets consist of acquired merchant portfolios, customer relationships, ISO relationships, residual buyouts, trade names, technology, and non-compete agreements. Merchant portfolios Merchant portfolios consist of the acquired rights to a portfolio of merchants such as those acquired from Direct Connect Merchant Services, LLC, and YapStone, Inc. The Company amortizes the cost of its acquired merchant portfolios over their estimated useful lives, which generally range from five years to six years using a straight-line amortization method. Customer Relationships Customer relationships represent the cost of the acquired customer relationship, which typically consists of a portfolio of merchants or contracted business relationships. The Company amortizes the cost of its acquired customer relationships over their estimated useful lives, which generally range from 10 years to 15 years, using either a straight-line or an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. ISO Relationships ISO relationships represent the cost of acquired relationships with ISOs. The Company amortizes the cost of its acquired ISO relationships over their estimated useful lives, which generally range from 11 years to 25 years, using an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Residual Buyouts Most of the Company's merchant customers in its Consumer Payments reportable segment are associated with independent ISOs, and these ISOs typically have a right to receive commissions from the Company based on the revenue earned by the associated merchants. The Company may occasionally decide to pay an ISO an agreed-upon amount in exchange for the ISO's surrender of its right to receive future commissions from the Company. The amount that the Company pays for these residual buyouts is capitalized and subsequently amortized over the expected life of the underlying merchant relationships. These amortization periods generally range between 1 year and 9 years and the Company uses either a straight-line or an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Technology Technology intangible assets represent acquired technology, such as proprietary software and website domains. The Company amortizes the cost of acquired technology over their estimated useful lives, which generally range between 6 years and 7 years, using a straight-line amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Trade Names and Non-Compete Agreements These intangible assets are amortized over their estimated useful lives, which generally ranging between 5 years and 12 years, using a straight-line amortization method. All non-compete agreements were fully amortized at December 31, 2020 and 2019. Impairment of Long-lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. For long-lived assets, except goodwill, an impairment loss is indicated when the undiscounted future cash flows estimated to be generated by the asset group are not sufficient to recover the unamortized balance of the asset group. If indicated, the loss is measured as the excess of carrying value over the asset groups' fair value, as determined based on discounted future cash flows. The Company concluded there were no indications of impairment for the years ended December 31, 2019 and 2018. For the year ended December 31, 2020, the Company recognized impairment charges of $1.8 million for a residual buyout intangible asset. See Note 7 , Goodwill and Other Intangible Assets . Accrued Residual Commissions Accrued residual commissions consist of amounts due to independent sales organizations ("ISOs") and independent sales agents based on a percentage of the net revenues generated from the Company's merchant customers. Percentages vary based on the program type and transaction volume of each merchant. Residual commission expenses were $240.2 million, $213.8 million, and $230.2 million, respectively, for the years ended December 31, 2020, 2019 and 2018, and are included in costs of services in the accompanying consolidated statements of operations. ISO Deposit and Loss Reserve ISOs may partner with the Company in an executive partner program in which ISOs are given negotiated pricing in exchange for bearing risk of loss. Through the arrangement, the Company accepts deposits on behalf of the ISO and a reserve account is established by the Company. All amounts maintained by the Company are included in the accompanying consolidated balance sheets as other liabilities, which are directly offset by restricted cash accounts owned by the Company. Share-Based Compensation The Company recognizes the cost resulting from all share-based payment transactions in the financial statements at grant date fair value. Share-based compensation expense is recognized over the requisite service period and is reflected in salary and employee benefits expense on the Company's consolidated statements of operations. Awards generally vest over two The Company measures a liability award under a share-based payment arrangement based on the award’s fair value remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period. Stock options Under the Company's 2018 Equity Incentive Plan, the Company determines the fair value of stock options using the Black-Scholes option pricing model, which requires the use of the following subjective assumptions: Expected Volatili |
DISPOSAL OF BUSINESS
DISPOSAL OF BUSINESS | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISPOSAL OF BUSINESS | DISPOSAL OF BUSINESSOn September 1, 2020, PRET, a majority-owned and consolidated subsidiary of the Company, entered into an asset purchase agreement (the "Agreement") with MRI Payments LLC and MRI Software LLC (together, "MRI" or the buyer) to sell certain assets from PRET's real estate services business. The buyer also agreed to assume certain obligations associated with the assets. The transaction contemplated by the Agreement was completed on September 22, 2020 after receiving regulatory approval. Prior to execution of the Agreement, the buyer was not a related party of PRET or the Company. The assets covered by the Agreement were substantially the same assets that PRET acquired in March 2019 from YapStone, Inc. and these assets constituted PRET's RentPayment component, which was part of the Integrated Partners reporting unit, operating segment and reportable segment. These assets consist of contracts with customers, an assembled workforce, technology-related assets, Internet domains, trade names and trademarks. The buyer also assumed obligations under an in-place and off-balance-sheet operating lease for office space. Since PRET's acquisition of these assets from YapStone, Inc. in March 2019, PRET and the Company have made operational changes that resulted in these assets becoming a business as defined by the provisions of ASU 2017-01, Clarifying the Definition of a Business, before their sale to MRI . Proceeds received by PRET were $179.4 million, net of $0.6 million for a working capital adjustment. The gain amounted to $107.2 million as follows: (in thousands) Gross cash consideration from buyer $ 180,000 Less working capital adjustment paid in cash (584) Net proceeds from buyer 179,416 Transaction costs incurred (5,383) Assets sold: Intangible assets (62,158) Other assets sold, net of obligations assumed (716) Goodwill assigned to business sale (2,683) Other intangible assets (1,237) Pre-tax gain on sale of business $ 107,239 PRET is a limited liability company and is a pass-through entity for income tax purposes. Income tax expenses associated with the gain attributable to the stockholders of the Company were estimated to be approximately $12.3 million. Allocation of net proceeds, after transaction costs, to the PRET members included return of each member's invested capital in PRET and excess proceeds were distributed in accordance with the distribution provisions of the PRET LLC governing agreement. The Company's invested capital amounted to $71.8 million, which included the assets sold, goodwill and other intangible assets. The non-controlling interest's invested capital was $5.7 million. Approximately $51.4 million and $45.1 million of the excess proceeds were distributed to the Company and the non-controlling interests, respectively. The working capital adjustment of $584 thousand and the allocation of net proceeds described above remain subject to final adjustment with the buyer and PRET members, respectively. Any remaining payments made or received by the Company will be recorded in the period in which such amounts are finalized. As disclosed in Note 10 , Long-T erm Debt and Warrant Liability , $106.5 million of cash received by the Company was used on September 25, 2020 to reduce the outstanding balance of the term loan facility under the Company's Senior Credit Facility. Operating Lease Obligation The buyer assumed an in-place operating lease in Dallas, Texas which expires on November 1, 2024. The Company has not adopted ASC 842; therefore this lease obligation was not reflected in the Company's balance sheet prior to the assumption by the buyer. The Company was relieved of minimum lease payment obligations totaling $0.5 million for the remainder of the current lease term. Continuing Operations Based on historical financial results, the Company does not believe the sale of the RentPayment component represents a strategic shift. Therefore, in accordance with ASC 205-20, Presentation of Financial Statements - Discontinued Operations , the Company will not classify or report the business that was sold as discontinued operations in its consolidated financial statements for any reporting period. The Company will continue to serve the rental property market through its ongoing PRET operations. Pro Forma Information The following unaudited pro forma information is provided for the business (the RentPayment component) that was sold under the Agreement, excluding the gain recognized on the sale transaction: Year Ended December 31, (in thousands) 2020 2019 Revenues $ 12,042 $ 11,694 Income from operations (1) $ 1,825 $ 2,275 Net income (2) (3) $ 1,725 $ 2,218 Net income attributable to the stockholders of Priority Technology Holdings, Inc. (4) $ 1,725 $ 2,218 Income per common share for stockholders of Priority Technology Holdings, Inc. - Basic and Diluted (4) $ 0.03 $ 0.03 (1) Historical financial results are not being reported as discontinued operations. (2) Does not reflect interest expense on the borrowings used to acquire the YapStone assets in March 2019. (3) Pro forma income tax expense based on the following consolidated effective tax rates of Priority Technology Holdings, Inc.: 5.5% and 2.5% for the years ended December 31, 2020 and 2019, respectively. These rates exclude the effect of the $107.2 million net gain on the sale recognized during the year ended December 31, 2020. (4) Prior to the September 2020 sale transaction that resulted in the gain on the sale, no earnings or losses of the PRET LLC were attributable to the NCIs of PRET. |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE For all periods presented, most of the Company’s revenues were recognized over time. Revenues and commissions earned from the sales of payment equipment are typically recognized at a point in time. Nature of our Customer Arrangements The Company’s payment services customers contract with the Company for payment services, which the Company provides in exchange for consideration for completed transactions. Some of these payment services are performed by third parties. The Company’s consumer payment services enable the Company’s customers to accept card, electronic, and digital-based payments at the point of sale. These services may include authorization services, settlement and funding services, customer support and help-desk functions, chargeback resolution, payment security services, consolidated billing and statements, and online reporting. The Company also earns revenue and commissions from resale of electronic point-of-sale (“POS”) equipment. The Company’s commercial payment services enable the Company’s customers to automate their accounts payable and other commercial payments functions with the Company’s payment services that utilize physical and virtual payment cards as well as ACH transactions. In addition, the Company provides cost-plus-fee turnkey business process outsourcing and assists commercial customers with programs that are designed to increase acceptance of electronic payments. The Company's Integrated Partners segment uses payment-adjacent technologies to facilitate the acceptance of electronic payments from customers in the rental real estate, medical, and hospitality industries. Revenue Recognition At contract inception, the Company assesses the services and goods promised in its contracts with customers and identifies the performance obligation for each promise to transfer to the customer a service or good that is distinct. For substantially all of the Company's services, the nature of the Company’s promise to the customer is to stand ready to accept and process the transactions that customers request on a daily basis over the contract term. Since the timing and quantity of transactions to be processed is not determinable, the services comprise an obligation to stand ready to process as many transactions as the customer requires. Under a stand-ready obligation, the evaluation of the nature of the Company’s performance obligation is focused on each time increment rather than the underlying activities. Therefore, the Company has determined that its services comprise a series of distinct days of service that are substantially the same and have the same pattern of transfer to the customer. Accordingly, the promise to stand ready is accounted for as a single-series performance obligation. When third parties are involved in the transfer of services or goods to the customer, the Company considers the nature of each specific promised service or good and applies judgment to determine whether the Company controls the service or good before it is transferred to the customer or whether the Company is acting as an agent of the third party. The Company follows the requirements of ASC 606-10, Principal Agent Considerations , which states that the determination of whether an entity should recognize revenue based on the gross amount billed to a customer or the net amount retained is a matter of judgment that depends on the facts and circumstances of the arrangement. To determine whether or not the Company controls the service or good, it assesses indicators including: 1) whether the Company or the third party is primarily responsible for fulfillment; 2) if the Company or the third party provides a significant service of integrating two or more services or goods into a combined item that is a service or good that the customer contracted to receive; 3) which party has discretion in determining pricing for the service or good; and 4) other considerations deemed to be applicable to the specific situation. Based on assessments of these indicators, the Company concluded: • Promises to customers to provide certain payment services is distinct from the other payment services provided by the card-issuing financial institutions, payment networks, and sponsor banks. The Company does not have the ability to direct the use of and obtain substantially all of the benefits of the services provided by the card-issuing financial institutions, payment networks, and sponsor banks before those services are transferred to the customer, and on that basis, the Company does not control those services prior to being transferred to the customer. The Company has either no or little discretion in setting the price that the customer pays for these specific services. The Company therefore acts as agent for these payment services provided by the card-issuing financial institutions, payment networks, and sponsor banks. • For other promises to customers to provide other significant payment services such as onboarding, underwriting, processing, customer service, and fraud detection/prevention services, the Company has discretion in setting the price that the customer ultimately pays for these services and the Company either is responsible for fulfillment or has shared responsibility. If a third party is partially responsible for fulfillment, the Company provides a significant service of integrating two or more services, which may include services from other parties, and directs their use to create a combined item that is a specified service requested by the customer. For services that involve these other parties, the Company has direct contractual relationships with these parties. Substantially all of the Company’s payment services are priced as a percentage of transaction value or a specified fee per transaction, or a combination of both. Given the nature of the promise and the underlying fees based on unknown quantities or outcomes of services to be performed over the contract terms with customers, the total consideration is determined to be variable consideration. The variable consideration for payment services is usage-based and therefore it specifically relates to efforts to satisfy the payment services obligation. Said another way, the variability is satisfied each day the service is provided to the customer. The Company directly ascribes variable fees to the distinct day of service to which it relates, and considers the services performed each day in order to ascribe the appropriate amount of total fees to that day. Therefore, the Company measures revenue for payment services on a daily basis based on the services that are performed on that day. Once the Company determines the performance obligations and the transaction price, including an estimate of any variable consideration, the Company then allocates the transaction price to each performance obligation in the contract using a relative standalone selling price method. The Company determines standalone selling price based on the price at which the service or good is sold separately. If the standalone selling price is not observable through past transactions, the Company estimates the standalone selling price by considering all reasonably available information, including market conditions, trends or other company-specific or customer-specific factors. Substantially all of the performance obligations described above that involve services are satisfied over time. Equipment sales are generally transferred to the customer at a point in time. In delivering payment services to the customer, the Company may also provide a limited license agreement to the customer for use of one or more of the Company’s proprietary cloud-based software applications. The Company grants a right to use its software applications only when the customer has contracted with the Company to receive related payment services. When combined with the underlying payment services, the license and the payment services provided to the customer are a single stand-ready obligation and the Company’s performance obligation is defined by each time increment, rather than by the underlying activities, satisfied over time based on days elapsed. Interest income is reported separately on the Company’s statements of operations within Other, net and was approximately $0.8 million, $0.6 million, and $0.6 million for the years ended December 31, 2020, 2019, and 2018, respectively. Transaction Price Allocated to Future Performance Obligations ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations. However, as allowed by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. As described above, the Company’s most significant performance obligations consist of variable consideration under a stand-ready series of distinct days of service. Such variable consideration meets the specified criteria for the disclosure exclusion. Therefore, the majority of the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied is variable consideration that is not required for this disclosure. The aggregate fixed consideration portion of customer contracts with an initial contract duration greater than one year is not material. Contract Costs For new, renewed, or anticipated contracts with customers, the Company does not incur material amounts of incremental costs to obtain such contracts, as those costs are defined by ASC 340-40. Fulfillment costs, as defined by ASC 340-40, typically benefit only the period (typically a month in duration) in which they are incurred and therefore are expensed in the period incurred (i.e., not capitalized) unless they meet criteria to be capitalized under other accounting guidance. The Company pays commissions to most of its ISOs, and for certain ISOs the Company also pays (through a higher commission rate) them to provide customer service and other services directly to our merchant customers. The ISO is typically an independent contractor or agent of the Company. Although certain ISOs may have merchant portability rights, the merchant meets the definition of a customer for the Company even if the ISO has merchant portability rights. Since payments to ISOs are dependent substantially on variable merchant payment volumes generated after the merchant enters into a new or renewed contract, these payments to ISOs are not deemed to be a cost to acquire a new contract since the ISO payments are based on factors that will arise subsequent to the event of obtaining a new or renewed contract. Also, payments to ISOs pertain only to a specific month’s activity. For payments made, or due, to an ISO, the expenses are reported within costs of services on our statements of operations. The Company from time-to-time may elect to buy out all or a portion of an ISO’s rights to receive future commission payments related to certain merchants. Amounts paid to the ISO for these residual buyouts are capitalized by the Company under the accounting guidance for intangible assets and included in intangible assets, net on our consolidated balance sheets. Contract Assets and Contract Liabilities A contract with a customer creates legal rights and obligations. As the Company performs under customer contracts, its right to consideration that is unconditional is considered to be accounts receivable. If the Company’s right to consideration for such performance is contingent upon a future event or satisfaction of additional performance obligations, the amount of revenues recognized in excess of the amount billed to the customer is recognized as a contract asset. Contract liabilities represent consideration received from customers in excess of revenues recognized. Material contract assets and liabilities are presented net at the individual contract level in the consolidated balance sheet and are classified as current or non-current based on the nature of the underlying contractual rights and obligations. Supplemental balance sheet information related to contracts from customers as of December 31, 2020 and 2019 was as follows: (in thousands) Consolidated Balance Sheet Location December 31, 2020 December 31, 2019 Liabilities: Contract liabilities, net (current) Customer deposits and advance payments $ 1,494 $ 1,912 The balance for the contract liabilities was approximately $1.8 million and $2.2 million at January 1, 2019 and January 1, 2018, respectively. The changes in the balances during the years ended December 31, 2020, 2019, and 2018 were due to the timing of advance payments received from the customer. 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 years ended December 31, 2020, 2019, or 2018. Disaggregation of Revenues The following table presents a disaggregation of our consolidated revenues by type for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (in thousands) 2020 2019 2018 Revenue Type: Merchant card fees $ 377,346 $ 339,450 $ 343,791 Outsourced services and other services 23,103 28,712 29,099 Equipment 3,893 3,692 2,932 Total revenues $ 404,342 $ 371,854 $ 375,822 |
ASSET ACQUISITIONS, ASSET CONTR
ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS | ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS Asset Acquisitions YapStone In March 2019, the Company, through one of its subsidiaries, PRET, acquired certain assets and assumed certain related liabilities (the "YapStone net assets") from YapStone, Inc. under an asset purchase and contribution agreement. The purchase price for the YapStone net assets was $65.0 million in cash plus a non-controlling interest ("NCI") in PRET issued to YapStone, Inc. with a fair value that was estimated to be approximately $5.7 million. The total purchase price was assigned to customer relationships, except for $1.0 million and $1.2 million which were assigned to a software license agreement and a services agreement, respectively. The $65.0 million of cash was funded from the Company's Senior Credit Facility. PRET is part of the Company's Integrated Partners reportable segment. During the third quarter of 2020, substantially all of the YapStone net assets were sold to a third party. See Note 2 , Disposal of Business , to the consolidated financial statements. Approximately $45.1 million of PRET's 2020 earnings through the disposal date, which were composed mostly of gain recognized on the sale, were attributed and distributed in cash to the NCI during the third quarter 2020 pursuant to the profit-sharing agreement between the Company and the NCI. At the time of the sale, the NCI was also redeemed in cash for its $5.7 million interest in PRET. For the year ended December 31, 2019, no earnings of PRET were allocated to the NCI. Residual Portfolio Rights Acquired On March 15, 2019, a subsidiary of the Company paid $15.2 million cash to acquire certain residual portfolio rights. Of the $15.2 million, $5.0 million was funded from the Senior Credit Facility, $10.0 million was funded from revolving credit facility under the Senior Credit Facility, and cash on hand was used to fund the remaining amount. This acquisition became part of the Company's Consumer Payments reportable segment. The purchase price was subject to a potential increase of up to $6.4 million in accordance with the terms of the agreement between the Company and the sellers over a three-year period. Additional purchase price is accounted for when payment to the seller becomes probable and is added to the carrying value of the asset and amortization expense is adjusted to reflect the new carrying value at the original purchase date. The first period for determining contingent consideration ended in March 2020, and the Company paid the seller $2.1 million of additional cash consideration, partially offset by an amount owed to the Company by the seller. At December 31, 2020, it became apparent that the Company would owe the seller an additional $2.1 million for the second period for determining contingent consideration ending March 2021, and the Company recorded this estimated amount in its consolidated financial statements as of December 31, 2020. Direct Connect In December 2018, the Company acquired a merchant portfolio for $44.8 million from Direct Connect Merchant Services, LLC. The purchase price included cash contingent consideration of up to approximately $7.3 million, determinable over a period that ended on December 31, 2019. At December 31, 2019, the Company determined that it did not owe the contingent consideration. Asset Assignments and Contributions Merchant Portfolio Rights and Reseller Agreement In October 2019, the Company simultaneously entered into two agreements with another entity. These two related agreements 1) assign to the Company certain perpetual rights to a merchant portfolio and 2) form a 5-year reseller arrangement whereby the Company will offer and sell to its customer base certain online services to be fulfilled by the other entity. No cash consideration was paid to, or received from, the other entity at execution of either agreement. It was not initially determinable if the Company would have to pay any amount as consideration for the merchant portfolio rights due to the provisions of the related reseller agreement. The Company does not anticipate any net losses under the two contracts. Subsequent cash payments from the Company to the other entity for the merchant portfolio rights are determined based on a combination of both: 1) the actual financial performance of the acquired merchant portfolio rights and 2) actual sales and variable wholesale costs for the online services sold by the Company under the reseller arrangement. Prior to December 31, 2020, amounts paid to the other entity were accounted for as either 1) standard costs of the services sold by the Company under the 5-year reseller agreement or 2) consideration for the merchant portfolio rights. At December 31, 2020, the Company believes it has accumulated the additional data and historical experience that it deems necessary in order to reasonably estimate an amount of cash that the Company believes it will ultimately have to transfer as remaining consideration for the merchant portfolio rights. Accordingly, at December 31, 2020 the Company accrued approximately $6.2 million of estimated remaining cash consideration and additional accumulated costs for the merchant portfolio. At December 31, 2020, the Company has recorded aggregate costs, including both actual costs and estimated remaining consideration, totaling $11.1 million. As of December 31, 2019, the Company had recorded aggregate actual costs of approximately $1.1 million. A mortization expense was adjusted to reflect the new carrying value at the original purchase date. As of December 31, 2020 and 2019, accumulated amortization was $2.8 million and $0.1 million, respectively. The merchant portfolio has an estimated remaining life of 3.5 years at December 31, 2020. The Company will continue to review its estimate of the remaining consideration to be funded and adjust the value of the intangible asset and accrual for its obligation accordingly. eTab and Cumulus (Related Party) In February 2019, a subsidiary of the Company, PHOT, received a contribution of substantially all of the operating assets of eTab, LLC ("eTab") and CUMULUS POS, LLC ("Cumulus") under asset contribution agreements. No material liabilities were assumed by PHOT. These contributed assets were composed substantially of technology-related assets. Prior to these transactions, eTab was 80% owned by the Company's Chairman and Chief Executive Officer. No cash consideration was paid to the contributors of the eTab or Cumulus assets on the date of the transactions. As consideration for these contributed assets, the contributors were issued redeemable preferred equity interests in PHOT. Under these redeemable preferred equity interests, the contributors are eligible to receive up to $4.5 million of profits earned by PHOT, plus a preferred yield (6% per annum) on any of the $4.5 million amount that has not been distributed to them. The Company's Chairman and Chief Executive Officer owns 83.3% of the redeemable preferred equity interests in PHOT. Once a total of $4.5 million plus the preferred yield has been distributed to the holders of the redeemable preferred equity interests, the redeemable preferred equity interests will cease to exist. The Company determined that the contributor's carrying value of the eTab net assets (as a common control transaction under GAAP) was not material. Under the guidance for a common control transaction, the contribution of the eTab net assets did not result in a change of entity or the receipt of a business, therefore the Company's financial statements for prior periods have not been adjusted to reflect the historical results attributable to the eTab net assets. Additionally, no material amount was estimated for the fair value of the contributed Cumulus net assets. PHOT is a part of the Company's Integrated Partners reportable segment. Pursuant to the limited liability company agreement of PHOT, any material future earnings generated by the eTab and Cumulus assets that are attributable to the holders of the preferred equity interests will be reported by the Company as a form of non-controlling interests classified as mezzanine equity on the Company's consolidated balance sheet until $4.5 million and the preferred yield have been distributed to the holders of the preferred equity interests. Subsequent changes, if material, in the value of the NCI will be reported as an equity transaction between the Company's consolidated retained earnings (accumulated deficit) and any carrying value of the non-controlling interests in mezzanine equity. For the year ended December 31, 2020, a total of $250,000 of PHOT's earnings were attributable to the NCIs of PHOT, and this same amount was also distributed in cash to the NCIs during the same reporting period. Accordingly, there is no material amount to classify as mezzanine equity on the Company's consolidated balance sheet at December 31, 2020. Such amounts were not material to the Company's results of operations, financial position, or cash flows for the period covering February 1, 2019 (date the assets were contributed to the Company) through December 31, 2019, and therefore no recognition of the NCI was reflected in the Company's consolidated financial statements for reporting periods prior to 2020. Business Combinations in 2018 PayRight In April 2018, Priority PayRight Health Solutions, LLC ("PPRHS"), a subsidiary of the Company, purchased the majority of the operating assets and certain operating liabilities of PayRight Health Solutions LLC ("PayRight"). This asset purchase was deemed to be a business under ASC 805. This purchase allowed PPRHS to gain control over the PayRight business and therefore the Company's consolidated financial statements include the financial position, results of operations, and cash flows of PayRight from the date of acquisition. PayRight utilizes technology assets to deliver customized payment solutions to the health care industry. The results of the acquired business and goodwill of $0.3 million from the transaction are being reported by the Company as part of its Integrated Partners reportable segment. The acquisition resulted in the recognition of intangible and net tangible assets with a fair value of $0.6 million. The Company transferred total consideration with a fair value of $0.9 million consisting of: $0.5 million in cash and forgiveness of amounts owed to the Company by PayRight; $0.3 million fair value of the Company's previous equity-method investment in PayRight described in the following paragraph; and $0.1 million of other consideration. Certain PayRight sellers were provided profit-sharing rights in PayRight as non-controlling interests "NCIs"), however, based on this arrangement no losses or earnings were allocated to the NCIs for the years ended December 31, 2020, 2019 and 2018. At December 31, 2020, all of the NCIs' interest have been redeemed for amounts that were not material. Previously, in October 2015, the Company purchased a non-controlling interest in the equity of PayRight, and prior to April 2018 the Company accounted for this investment using the equity method of accounting. At January 1, 2018, the Company's carrying value of this investment was $1.1 million. Immediately prior to PPRHS' April 2018 purchase of substantially all of PayRight's business assets, the Company's existing non-controlling investment in PayRight had a carrying value of approximately $1.1 million with an estimated fair value on the acquisition date of approximately $0.3 million. The Company recorded an impairment loss of $0.8 million during the second quarter of 2018 for the difference between the carrying value and the fair value of the non-controlling equity-method investment in PayRight. The loss is reported within Other, net in the Company's consolidated statements of operations for the year ended December 31, 2018. RadPad and Landlord Station In July 2018, the Company's subsidiary PRET, acquired substantially all of the operating assets of RadPad Holdings, Inc. ("RadPad") and Landlord Station, LLC ("Landlord Station"). RadPad is a marketplace for the rental real estate market. Landlord Station offers a complementary tool set that focuses on facilitation of tenant screening and other services to the fast-growing independent landlord market. These asset purchases were deemed to be a business under ASC 805. Due to the related nature of the two sets of business assets, same acquisition dates, and how the Company intends to operate them under the "RadPad" name and operating platform within PRET, the Company deemed them to be one business for accounting and reporting purposes. PRET is reported within the Company's Integrated Partners reportable segment. Total consideration paid for RadPad and Landlord Station was $4.3 million consisting of $3.9 million in cash plus forgiveness of pre-existing debt owed by the sellers to the Company of $0.4 million. Net tangible and separately-identifiable intangible assets with an initial fair value of $2.1 million were acquired along with goodwill with an initial value of $2.2 million. During the fourth quarter of 2018, the Company received additional information about the fair values of assets acquired and liabilities assumed. Accordingly, measurement period adjustments were made to the opening balance sheet to decrease net assets acquired and increase goodwill by $0.2 million. NCIs in PRET were issued to certain sellers of the RadPad and Landlord Station assets in the form of residual profit interests and distribution rights. However the fair value of these NCIs was deemed to not be material at time of acquisition due to the nature of the profit-sharing and liquidations provisions contained in the operating agreement for PRET. Under the terms of PRET's operating agreement, no material earnings or losses related to RadPad or Landlord Station were attributable to the NCIs for the years ended December 31, 2019 or 2018. As disclosed in Note 2 , Disposal of Business , to the consolidated financial statements, in third quarter 2020 PRET sold substantially all of its assets, composed mostly of the assets acquired from YapStone, Inc. in March 2019, to a third party. This disposal by PRET resulted in the redemptions of PRET's NCIs, including the NCIs that originated from PRET's July 2018 acquisition of the RadPad and Landlord Station assets. Priority Payment Systems Northeast In July 2018, the Company acquired substantially all of the operating assets of Priority Payment Systems Northeast, Inc. ("PPS Northeast"). This purchase of these net assets was deemed to be a business under ASC 805. Prior to this acquisition, PPS Northeast was an independent brand-licensed office of the Company where it developed expertise in software-integrated payment services designed to manage turnkey installations of point-of-sale and supporting systems, as well as marketing programs that place emphasis on online ordering systems and digital marketing campaigns. PPS Northeast is reported within the Company's Consumer Payments reportable segment. Initial consideration of $3.5 million consisted of $0.5 million plus 285,117 shares of common stock of the Company with a fair value of approximately of $3.0 million. In addition, contingent consideration in an amount up to $0.5 million was deemed to have a fair value of $0.4 million at acquisition date. If earned, the seller can receive this contingent consideration in either cash or additional shares of the Company's common stock, as mutually agreed by the Company and seller, over a two-year period from the date of the acquisition. Net tangible and separately-identifiable intangible assets with an initial fair value of $2.0 million were acquired along with goodwill with an initial value of $1.9 million, including the $0.4 million estimated fair value of the contingent consideration due to the seller. Transaction costs were not material and were expensed. As of December 31, 2020, the Company has determined that it will owe no contingent consideration to the seller, and accrued contingent consideration of approximately $0.2 million was credited to the Company's statements of operations for both years ended December 31, 2020 and 2019. Priority Payment Systems Tech Partners In August 2018, the Company acquired substantially all of the operating assets of M.Y. Capital, Inc. and Payments In Kind, Inc., collectively doing business as Priority Payment Systems Tech Partners ("PPS Tech"). These related asset purchases were deemed to be a business under ASC 805. Due to the related nature of the two sets of business assets and how the Company intends to operate them, the Company deemed them to be one business for accounting and reporting purposes. Prior to this acquisition, PPS Tech was an independent brand-licensed office of the Company where it developed a track record and extensive network in the integrated payments and B2B marketplaces. PPS Tech is reported within the Company's Consumer Payments reportable segment. Initial consideration of $5.0 million consisted of $3.0 million plus 190,078 shares of common stock of the Company with a fair value of approximately $2.0 million. In addition, contingent consideration in an amount up to $1.0 million was deemed to have a fair value of $0.6 million at acquisition date. If earned, the seller would have received half of any contingent consideration in cash and the other half in a number of shares of common stock of the Company equal to the portion of the earned contingent consideration payable in shares of common stock of the Company, over a two-year period from the date of acquisition. Net tangible and separately-identifiable intangible assets with an initial fair value of $2.2 million were acquired along with goodwill with an initial value of $3.4 million, including the $0.6 million estimated fair value of the contingent consideration due to the seller. Transaction costs were not material and were expensed. As of December 31, 2020, the Company has determined that it will owe no contingent consideration to the seller, and accrued contingent consideration of approximately $0.2 million and $0.4 million was credited to the Company's statement of operations for the years ended December 31, 2020 and 2019, respectively. Other Information Based on their purchase prices and pre-acquisition operating results and assets, none of the business combinations consummated by the Company in 2018, as described above, met the materiality requirements for disclosure of pro-forma financial information, either individually or in the aggregate. The measurement periods, as defined by ASC 805, Business Combination ("ASC 805"), is closed for these 2018 business combinations. Goodwill for all 2018 business combinations is deductible by the Company for income tax purposes. |
SETTLEMENT ASSETS AND OBLIGATIO
SETTLEMENT ASSETS AND OBLIGATIONS | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement Assets and Obligations | SETTLEMENT ASSETS AND OBLIGATIONS Consumer Payments Segment In the Company’s Consumer 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 restrict non-members, such as the Company, from performing funds settlement or accessing merchant settlement funds. Instead, these funds must be in the possession of a member bank until the merchant is funded. The Company has agreements with member banks which allow the Company to route transactions under the member bank's control to clear transactions through the card networks. Timing differences, interchange fees, merchant reserves and exception items cause differences between the amounts received from the card networks and the amounts funded to the merchants. Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated obligations related to these funds are not liabilities of the Company. Therefore, neither is recognized in the Company’s consolidated balance sheets. Member banks held merchant funds of approximately $103.8 million and $79.8 million at December 31, 2020 and 2019, respectively. Exception items include items such as customer chargeback amounts received from merchants and other losses. Under agreements between the Company and its merchant customers, the merchants assume liability for such chargebacks and losses. If the Company is ultimately unable to collect amounts from the merchants for any charges or losses due to merchant fraud, insolvency, bankruptcy or any other reason, it may be liable for these charges. In order to mitigate the risk of such liability, the Company may 1) require certain merchants to establish and maintain reserves designed to protect the Company from such charges or losses under its risk-based underwriting policy and 2) engage with certain ISOs in partner programs in which the ISOs assume liability for these charges or losses. A merchant reserve account is funded by the merchant and held by the member bank during the term of the merchant agreement. Unused merchant reserves are returned to the merchant after termination of the merchant agreement or in certain instances upon a reassessment of risks during the term of the merchant agreement. Exception items that become the liability of the Company are recorded as merchant losses, a component of costs of services in the consolidated statements of operations. Exception items that the Company is still attempting to collect from the merchants through the funds settlement process or merchant reserves are recognized as settlement assets in the Company’s consolidated balance sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. Expenses for actual and estimated merchant losses for the years ended December 31, 2020, 2019, and 2018 were $4.1 million, $3.1 million, and $3.1 million, respectively. Commercial Payments Segment In the Company’s Commercial Payments segment, the Company earns revenue from certain of its services by processing ACH transactions for financial institutions and other business customers. Customers transfer funds to the Company, which are held in bank accounts controlled by the Company until such time as the ACH transactions are made. The Company recognizes these cash balances within restricted cash and settlement obligations in its consolidated balance sheets. The Company's settlement assets and obligations at December 31, 2020 and 2019 were as follows: (in thousands) December 31, 2020 December 31, 2019 Settlement Assets: Card settlements due from merchants, net of estimated losses $ 753 $ 446 Card settlements due from processors — 87 Total Settlement Assets $ 753 $ 533 Settlement Obligations: Card settlements due to merchants $ — $ 44 Due to ACH payees (1) 72,878 37,745 Total Settlement Obligations $ 72,878 $ 37,789 (1) Amounts due to ACH payees are held by the Company in restricted cash. |
NOTES RECEIVABLE
NOTES RECEIVABLE | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Notes Receivable | NOTES RECEIVABLE The Company has notes receivable from ISOs and another entity (see Note 13 , Related Party Matters ) totaling approximately $7.7 million and $5.7 million as of December 31, 2020 and 2019, respectively. These notes receivable are reported as current and non-current on the Company's consolidated balance sheet. The notes bear a weighted-average interest rate of 13.1% and 12.4% as of December 31, 2020 and 2019, respectively. Under the terms of the agreements with ISOs, the Company preserves the right to hold back residual payments due to the ISOs and to apply such residuals against future payments due to the Company. The note receivable due from another entity is secured by business assets and a personal guarantee. The allowance for doubtful note receivable is shown net of the current outstanding principal balances for notes receivable on the consolidated balance sheet and the $0.5 million provision for doubtful note receivable is included within selling, general and administrative expense on the consolidated statement of operations and within other noncash items, net on the consolidated statement of cash flows. Principal contractual maturities on the notes receivable, including payment-in-kind interest, at December 31, 2020 were as follows: (in thousands) Year Ended December 31, Maturities 2021 $ 2,657 2022 1,463 2023 132 2024 3,970 Total principal due 8,222 Discount (long-term) (38) Allowance for doubtful note receivable (current) (467) Notes receivable, net $ 7,717 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill The Company records goodwill when an acquisition is made and the purchase price is greater than the fair value assigned to the underlying separately-identifiable tangible and intangible assets acquired and the liabilities assumed. The Company's goodwill was allocated to reporting units as follows: (in thousands) December 31, 2020 December 31, 2019 Consumer Payments $ 106,832 $ 106,832 Integrated Partners — 2,683 $ 106,832 $ 109,515 The following table summarizes the changes in the carrying value of goodwill for the years ended December 31, 2020, 2019 and 2018: (in thousands) Amount Balance at January 1, 2018 (all Consumer Payments) $ 101,532 Additions for the year ended December 31, 2018: PayRight (Integrated Partners) 298 RadPad/Landlord Station (Integrated Partners) 2,385 PPS Northeast (Consumer Payments) 1,920 PPS Tech (Consumer Payments) 3,380 Balance at December 31, 2019 and 2018 109,515 Disposal of goodwill in Integrated Partners reporting unit (Note 2 , Disposal of Business ) (2,683) Balance at December 31, 2020 $ 106,832 For business combinations consummated during the year ended December 31, 2018, goodwill is deductible for income tax purposes. There were no impairment losses for the years ended December 31, 2020, 2019, or 2018. The Company performed its most recent annual goodwill impairment test as of October 1, 2020, as noted below, using the optional qualitative method. On October 1, 2020 and December 31, 2020, only one of the Company's reporting units, Consumer Payments, had goodwill assigned to it due to the 2020 events described in Note 2 , Disposal of Business . Effective for the annual reporting period ended December 31, 2020, the Company voluntarily changed the date for its annual goodwill impairment assessment from November 30 to October 1. Both dates occur in the Company’s fourth quarter. The Company believes this prospective change does not represent a material change to a method of applying an accounting principle, even though the carrying value of goodwill is material to the Company’s consolidated financial statements. This change had no effect on the Company’s results of operations, financial condition, or cash flows for any reporting period. By using the October 1 annual assessment date, the Company believes that it will be able to utilize more readily available data from both internal and external sources and have additional time to evaluate the data prior to finalizing its year-end consolidated financial statements and disclosures. Based on the last quantitative assessment performed as of November 30, 2019, the estimated fair value of the Consumer Payments reporting unit exceeded the carrying value of the reporting unit. The Consumer Payments reporting unit passed the qualitative assessment as of October 1, 2020 and the Company believes that it is not more likely than not that the fair value of the Consumer Payments reporting unit is less than its carrying amount on October 1, 2020. This change in the date for the annual impairment assessment for goodwill does not change the Company’s requirements to assess goodwill on an interim date between scheduled annual testing dates if triggering events are present. As of December 31, 2020, the Company is not aware of any triggering events that have occurred since October 1, 2020. Other Intangible Assets The Company's other intangible assets include acquired merchant portfolios, customer relationships, ISO relationships, trade names, technology, non-compete agreements, and residual buyouts. For the year ended December 31, 2020, the Company recognized costs, including accrued contingent consideration, of $10.0 million and $3.5 million for merchant portfolios and residual buyouts, respectively. For the year ended December 31, 2019, the Company recognized costs, including accrued contingent consideration, of $69.8 million for merchant portfolios (including $68.7 million related to the asset acquisition from YapStone, Inc.), $19.9 million for residual buyouts, and $1.0 million for technology intangibles. See Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations , for information about contingent consideration related to acquisitions consummated in 2019 and 2018. See Note 2 , Disposal of Business , for information about intangible assets that were disposed during the year ended December 31, 2020. At December 31, 2020 and December 31, 2019, other intangible assets consisted of the following: As of December 31, (in thousands) 2020 2019 Capitalized: Merchant portfolios $ 55,816 $ 114,554 Customer relationships 40,740 40,740 Residual buyouts 116,112 112,731 Non-compete agreements 3,390 3,390 Trade names 2,870 2,870 Technology 14,390 15,390 ISO relationships 15,200 15,200 Total capitalized $ 248,518 $ 304,875 Less accumulated amortization: Merchant portfolios $ (19,471) $ (12,655) Customer relationships (30,267) (25,836) Residual buyouts (72,659) (59,796) Non-compete agreements (3,390) (3,390) Trade names (1,651) (1,273) Technology (13,951) (12,758) ISO relationships (7,319) (6,341) Total accumulated amortization $ (148,708) $ (122,049) Accumulated allowance for impairment $ (1,753) $ — Net carrying value $ 98,057 $ 182,826 The weighted-average amortization periods for intangible assets held at December 31, 2020 are as follows: Useful Life Amortization Method Weighted-Average Life Merchant portfolios 5 - 6 years Straight-line 5.5 years Residual buyouts 1 - 9 years Straight-line and double declining 6.8 years Non-compete agreements 3 years Straight-line 3.0 years Trade names 5 -12 years Straight-line 11.6 years Technology 6 - 7 years Straight-line 6.1 years ISO relationships 11 - 25 years Sum-of-years digits 23.7 years Customer relationships 10 - 15 years Straight-line and sum-of-years digits 11.0 years Amortization expense for intangible assets was $33.1 million, $32.4 million, and $14.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. The estimated amortization expense of intangible assets as of December 31, 2020 for the next five years and thereafter is: (in thousands) Estimated Year Ending December 31, Amortization Expense 2021 $ 28,216 2022 27,066 2023 21,280 2024 10,126 2025 3,671 Thereafter 7,698 Total $ 98,057 Actual amortization expense to be reported in future periods could differ from these estimates as a result of new intangible asset acquisitions, changes in useful lives, and other relevant events or circumstances. The Company tests intangible assets for impairment when events occur or circumstances indicate that the fair value of an intangible asset or group of intangible assets may be impaired. In the Company's Consumer Payments segment, a residual buyout intangible asset with a net carrying value of $2.2 million was deemed to be impaired at December 31, 2020. The fair value of this intangible asset was estimated to be approximately $0.5 million, resulting in the recognition of an impairment charge of $1.8 million and this amount is included in selling, general and administrative expenses on the Company' consolidated statement of operations for the year ended December 31, 2020. This impairment was the result of diminished cash flows generated by the merchant portfolio. The Company also considered the market conditions generated by the COVID-19 pandemic and concluded that there were no additional impairment indicators present at December 31, 2020. |
PROPERTY, EQUIPMENT AND SOFTWAR
PROPERTY, EQUIPMENT AND SOFTWARE | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | PROPERTY, EQUIPMENT AND SOFTWARE The Company's property, equipment, and software balance primarily consists of furniture, fixtures, and equipment used in the normal course of business, computer software developed for internal use, and leasehold improvements. Computer software represents purchased software and internally developed back office and merchant interfacing systems used to assist the reporting of merchant processing transactions and other related information. A summary of property, equipment and software as of December 31, 2020 and December 31, 2019 was as follows: As of December 31, (in thousands) 2020 2019 Estimated Useful Life Furniture and fixtures $ 2,795 $ 2,787 2 - 7 years Equipment 10,216 10,101 3 - 7 years Computer software 44,320 37,440 3 - 5 years Leasehold improvements 6,250 6,367 5 - 10 years 63,581 56,695 Less accumulated depreciation (40,706) (33,177) Property, equipment and software, net $ 22,875 $ 23,518 |
ACCOUNTS PAYABLE AND ACCRUED EX
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Payable [Abstract] | |
Accounts Payable and Accrued Expenses | ACCOUNTS PAYABLE AND ACCRUED EXPENSES The Company accrues for certain expenses that have been incurred and not paid, which are classified within accounts payable and accrued expenses in the accompanying consolidated balance sheets. The components of accounts payable and accrued expenses that exceeded five percent of total current liabilities at December 31, 2020 and December 31, 2019 consisted of the following: As of December 31, (in thousands) 2020 2019 Accounts payable - trade $ 4,308 $ 6,968 Accrued card network fees $ 8,041 $ 6,950 |
LONG-TERM DEBT AND WARRANT LIAB
LONG-TERM DEBT AND WARRANT LIABILITY | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-Tem Debt and Warrant Liability | LONG-TERM DEBT AND WARRANT LIABILITY Long-term debt owed by certain subsidiaries (the "Borrowers") of the Company consisted of the following as of December 31, 2012 and December 31, 2019: As of December 31, 2020 (dollar amounts in thousands) 2020 2019 Senior Credit Agreement: Term Loan - Matures January 3, 2023 and bears interest at LIBOR (with a LIBOR "floor" of 1.00% beginning March 8, 2020) plus 6.50% and 5.0% at December 31, 2020 and 2019, respectively (actual rate of 7.50% and 6.71% at December 31, 2020 and 2019, respectively) $ 279,417 $ 388,837 Revolving credit facility - $25.0 million line, matures January 22, 2022, and bears interest at LIBOR plus 6.50% and 5.0% at December 31, 2020 and 2019, respectively (actual rate of 6.65% and 6.71% at December 31, 2020 and 2019, respectively). — 11,500 Term Loan - Subordinated, matures July 3, 2023 and bears interest at 5.0% plus an applicable margin at December 31, 2020 and 2019 (actual rate of 12.50% and 10.50% at December 31, 2020 and 2019, respectively) 102,623 95,142 Total debt obligations 382,040 495,479 Less: current portion of long-term debt (19,442) (4,007) Less: unamortized debt discounts and deferred financing costs (4,725) (5,894) Total long-term debt, net $ 357,873 $ 485,578 Substantially all of the Company's assets are pledged as collateral under the credit agreements. The Company is neither a borrower nor a guarantor of the credit agreements. The Company's subsidiaries that are borrowers or guarantors under the credit agreements are referred to as the "Borrowers." Long-Term Debt On January 3, 2017, the Company refinanced existing long-term debt whereby the Borrowers entered into a credit agreement with a syndicate of lenders (the "Senior Credit Agreement"). The Senior Credit Agreement had an original maximum borrowing amount of $225.0 million, consisting of a $200.0 million term loan and a $25.0 million revolving credit facility. As part of the debt refinancing on January 3, 2017, the Borrowers also entered into a Credit and Guaranty Agreement (the "GS Credit Agreement") with Goldman Sachs Specialty Lending Group, L.P. ("Goldman Sachs" or "GS") for an $80.0 million term loan, the proceeds of which were used to refinance the amounts previously outstanding with Goldman Sachs. The Company determined that the 2017 debt refinancing should be accounted for as a debt extinguishment. Amendments The following table summarizes changes made as the results of key amendments to the 2017 credit agreements through December 31, 2020: (in millions) GS Credit Senior Credit Agreement Agreement Discounts and Costs Additional Additional Revolving Principal Line Amendment Principal Issue Costs Costs Amendment Established Established Type Established (a) Discount Expensed (b) Capitalized January 2017 $ 200.0 $ 25.0 Extinguishment $ 80.0 $ 3.7 $ 1.8 $ 3.3 January 2018 67.5 — Modification — $ 0.4 $ 0.8 $ 0.7 December 2018 130.0 — Modification — $ 0.3 $ 1.2 $ 0.1 March 2020 — — Modification — $ — $ 0.4 $ 2.7 $ 397.5 $ 25.0 $ 80.0 (a) The GS Credit Agreement allows for payment-in-kind interest which subsequently increases the amount outstanding. Beginning with the Sixth Amendment, the Senior Credit Agreement began to allow certain amounts of interest to be treated as payment-in-kind interest and added to the outstanding borrowings balance, as discussed below under the header "Changes to Applicable Interest Rate Margins." (b) Reported within "Debt extinguishment and modification expenses" on the Company's consolidated statements of operations. The Senior Credit Agreement and the GS Credit Agreement were also amended on November 14, 2017. This amendment allows for loan advances of less than $5.0 million and for certain liens on cash securing the Company's funding obligations under a new product involving a virtual credit card program. This amendment did not affect any of the material terms, conditions, or covenants of the Senior Credit Agreement or the GS Credit Agreement. Additionally, two amendments were executed in 2019 that concerned procedural changes to the quarterly and annual reporting for lenders and did not affect any of the material terms, conditions, or covenants of the Senior Credit Agreement or the GS Credit Agreement. Senior Credit Agreement Outstanding borrowings under the Senior Credit Agreement accrue interest using either a base rate (as defined) or a LIBOR rate plus an applicable margin, or percentage per annum, as provided in the amended credit agreement. For the term loan facility of the Senior Credit Facility, the Sixth Amendment provides for a LIBOR "floor" of 1.0% per annum. Accrued interest is payable quarterly. The revolving credit facility incurs a commitment fee on any undrawn amount of the $25.0 million credit line, which equates to 0.5% per annum for the unused portion. GS Credit Agreement Outstanding borrowings under the GS Credit Agreement accrue interest at 5.0%, plus an applicable margin, or percentage per annum, as indicated in the amended credit agreement. Accrued interest is payable quarterly at 5.0% per annum, and the accrued interest attributable to the applicable margin is capitalized as payment-in-kind ("PIK") interest each quarter. Senior Credit Agreement - Partial Pay Down of Term Debt and Changes to Applicable Interest Rate Margins in 2020 Under the Sixth Amendment, the interest rate margins for the Senior Credit Agreement and the GS Credit Agreement increased incrementally by 1.0% on June 16, 2020, and then increased incrementally by 0.5% on each of the dates July 16, August 15, and September 14, 2020 because the Borrowers did not make a permitted accelerated principal payment of at least $100.0 million under the term loan facility of the Senior Credit Agreement on or before those dates as described in the Sixth Amendment (the "$100.0 million principal prepayment"). The additional interest expense incurred by the Borrowers due to the increases in the applicable margin for the revolving credit facility under the Senior Credit Agreement was paid in cash and such increases for the term facility of the Senior Credit Facility and the GS Credit Agreement were accounted for as PIK interest at the election of the Borrowers. On September 25, 2020, the Borrowers made the $100.0 million principal prepayment plus an additional $6.5 million principal prepayment to reduce the outstanding indebtedness under the term loan facility of the Senior Credit Agreement. This $106.5 million prepayment resulted in simultaneous reductions in the applicable interest rate margins under the Senior Credit Agreement and the GS Credit Agreement, which prospectively eliminates and reverses the applicable margin increases described in the preceding paragraph. Under the terms of the Senior Credit Agreement and the GS Credit Agreement, the future applicable interest rate margins may vary based on the Borrowers' future Total Net Leverage Ratio (as defined) in addition to future changes in the underlying market rates for LIBOR and the rate used for base-rate borrowings. The Senior Credit Agreement and the GS Credit Agreement also have incremental margins that would apply to the future applicable interest rates if the Borrowers are deemed to be in violation of the terms of the credit agreement. Contractual Maturities Principal outstanding at December 31, 2020 for term debt under the Senior Credit Agreement and the GS Credit Agreement are scheduled to be paid as follows: (in thousands) Principal Due Senior Credit Agreement GS Credit Agreement Total Year Ending December 31, Term Revolver Term 2021 ( current ) $ 19,442 $ — $ — $ 19,442 2022 38,884 — — 38,884 2023 221,091 — 102,623 323,714 Total $ 279,417 $ — $ 102,623 $ 382,040 Additionally, the Company may be obligated to make certain additional mandatory prepayments after the end of each year based on excess cash flow, as defined in the Senior Credit Agreement. No such prepayments were due for the years ended December 31, 2020 and 2019. Under the Senior Credit Agreement, prepayments of outstanding principal may be made in permitted increments with a 1.0% penalty for certain prepayments. Under the GS Credit Agreement, prepayment of outstanding principal is subject to a 4.0% penalty for certain prepayments occurring prior to March 18, 2021 and 2.0% for certain prepayments occurring between March 18, 2021 and March 18, 2022. Such penalties will be based on the principal amount that is prepaid, subject to the terms of the credit agreements. On March 5, 2021, the Company entered into a debt commitment letter with Truist Bank and Truist Securities, Inc., pursuant to which Truist has committed to provide Priority with a new Term Loan Facility and Revolving Credit Facility, which will replace existing Senior loan facilities. Also, on March 5, 2021, the Company entered into a preferred stock commitment letter (the “Equity Commitment Letter”) with Ares Capital Management LLC and Ares Alternative Credit Management LLC to issue preferred stock, the proceeds of which will be partially used to entirely repay our Subordinated Debt Facility. See Note 21, Subsequent Events, for additional information. PIK Interest The principal amount borrowed and outstanding under the GS Credit Agreement was $80.0 million at December 31, 2020 and December 31, 2019. Included in the outstanding principal balance at December 31, 2020 and December 31, 2019 was accumulated PIK interest of $22.6 million and $15.1 million, respectively. For the years ended December 31, 2020 and 2019, the payment-in-kind (PIK) interest under the GS Credit Agreement added $7.5 million and $5.1 million, respectively, to the principal amount outstanding under the GS Credit Agreement. Interest Expense and Amortization of Deferred Loan Costs and Discounts Deferred financing costs and debt discount are being amortized using the effective interest method over the remaining term of the respective debt and are recorded as a component of interest expense. Unamortized deferred financing costs and debt discount are included in net long-term debt in the Company's consolidated balance sheets. Interest expense, including fees for undrawn amounts under the revolving credit facility and amortization of deferred financing costs and debt discounts, was $44.8 million, $40.7 million, and $29.9 million for the years ended December 31, 2020, 2019 and 2018, respectively. Interest expense increased due to the amortization of deferred financing costs and debt discounts by $2.4 million, $1.7 million, and $1.4 million for the years ended December 31, 2020, 2019, and 2018, respectively. Interest expense for the year ended December 31, 2019 also included a $0.4 million fee for the $70.0 million delayed principal draw under December 2018 amendment to the Senior Credit Agreement, which occurred during the first quarter of 2019. Debt Extinguishment and Debt Modification Expenses In addition to the $0.4 million of expenses associated with amounts paid to third parties related to the debt modification that occurred in March 2020, debt modification and extinguishment expenses for the year ended December 2020 also included the write off of certain previously deferred loan costs. The $106.5 million principal repayment made in September 2020 for the term facility of the Senior Credit Agreement was deemed to be a partial extinguishment of debt that was permitted and contemplated by the existing debt agreement, as previously amended. As a result, a proportional amount of unamortized loan costs and discount in the amount of $1.5 million were removed and expensed during the year ended December 31, 2020. Covenants The Senior Credit Agreement and the GS Credit Agreement, as amended, contain 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 Company's subsidiaries 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. The Company is also required to comply with certain restrictions on its Total Net Leverage Ratio, which is defined in the credit agreements as the ratio of consolidated total debt of the Borrowers to the Company's consolidated adjusted EBITDA (as defined in the Senior Credit Agreement and GS Credit Agreement). The maximum permitted Total Net Leverage Ratio was 7.75:1.00 at December 31, 2020. As of December 31, 2020, the Company remained in compliance with the covenants. The table below sets forth the maximum permitted Total Net Leverage Ratio for the indicated test periods: Test Period Ending Total Net Leverage Ratio Maximum Permitted December 31, 2020 7.75 : 1.00 March 31, 2021 7.71 : 1.00 June 30, 2021 7.44 : 1.00 September 30, 2021 7.19 : 1.00 December 31, 2021 7.00 : 1.00 March 31, 2022 6.75 : 1.00 June 30, 2022 6.72 : 1.00 September 30, 2022 to December 31, 2022 6.50 : 1.00 Each test period thereafter 5.50 : 1.00 Redeemed Goldman Sachs Warrant ("GS Warrant") In connection with the prior GS Credit Agreement, Priority Holdings, LLC issued a warrant to GS to purchase 1.0% of Priority Holdings, LLC's outstanding Class A common units. As part of the 2017 debt amendment, the 1.0% warrant with GS was extinguished and Priority Holdings, LLC issued a new warrant to GS to purchase 1.8% of Priority Holding, LLC's outstanding Class A common units. As of December 31, 2017, the warrant had a fair value of $8.7 million and was presented as a warrant liability in the accompanying consolidated balance sheets. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES In connection with the Business Combination as disclosed in Note 1, Nature of Business and Accounting Policies , the partnership tax status was terminated on July 25, 2018. Under the former partnership status, Priority Holdings, LLC was a dual member limited liability company and as such its financial statements reflected no income tax provisions as a pass-through entity. As a result of the Business Combination, for income tax purposes Priority Holdings, LLC became a disregarded subsidiary of the Company, the successor entity to MI Acquisitions, Inc., whereby its operations became taxable. For all periods subsequent to the Business Combination, the income tax provision reflects the taxable status of the Company as a corporation. The initial net deferred tax asset from the Business Combination is the result of the difference between initial tax basis, generally substituted tax basis, and the reflective carrying amounts of the assets and liabilities for financial statement purposes. The net deferred tax asset as of July 25, 2018 was approximately $47.5 million, which was recorded and classified on the Company's consolidated balance sheet in accordance with ASU 2015-17 and as an adjustment to Additional Paid-In Capital in the Company's consolidated statement of changes in stockholders' deficit. In addition, the Company's consolidated financial statement for the year ended December 31, 2018 presented herein reflects unaudited pro-forma income tax disclosure amounts to illustrate the income tax effects had the Company been subject to federal and state income taxes for the full year 2018. Components of consolidated income tax expense (benefit) for the years ended December 31, 2020, 2019, and 2018 was as follows: For the Year Ended December 31, (in thousands) 2020 2019 2018 U.S. current income tax expense (benefit) Federal $ 4,766 $ (11) $ 29 State and local 3,173 75 418 Total current income tax expense $ 7,939 $ 64 $ 447 U.S. deferred income tax expense (benefit) Federal $ 3,875 $ 1,920 $ (2,541) State and local (915) (1,154) (396) Total deferred income tax expense (benefit) $ 2,960 $ 766 (2,937) Total income tax expense (benefit) $ 10,899 $ 830 $ (2,490) The Company's consolidated effective income tax rate was 13.3% for the year ended December 31, 2020, compared to an consolidated effective income tax benefit rate of 2.5% for the year ended December 31, 2019. For the year ended December 31, 2018, the Company's consolidated effective income tax rate was 12.5%. The effective rate for 2020 differed from the statutory rate of 21% primarily due to earnings attributable to noncontrolling interests and valuation allowance changes against certain business interest carryover deferred tax assets. The effective rate for 2019 differed from the statutory federal rate of 21% primarily due to valuation allowance changes against certain business interest carryover deferred tax assets. The effective rate for 2018 differed from the statutory federal rate of 21% primarily due to the partnership status of Priority Holdings, LLC. for periods prior to July 25, 2018. The following table provides a reconciliation of the consolidated income tax expense (benefit) at the statutory U.S. federal tax rate to actual consolidated income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018: For the Year Ended December 31, (in thousands) 2020 2019 2018 U.S. federal statutory (benefit) $ 17,211 $ (6,879) $ (4,268) Non-controlling interests (5,626) — — Earnings as dual-member LLC — — 1,643 State and local income taxes, net 1,140 (1,564) (2) Excess tax benefits pursuant to ASU 2016-09 (37) 309 140 Valuation allowance changes (2,945) 9,302 (66) Intangible assets 1,056 — — Nondeductible items 233 125 86 Tax credits (283) (323) (123) Other, net 150 (140) 100 Income tax expense (benefit) $ 10,899 $ 830 $ (2,490) Deferred income taxes reflect the expected future tax consequences of temporary differences between the financial statement carrying amount of the Company's assets and liabilities, tax credits and their respective tax bases, and loss carry forwards. The significant components of consolidated deferred income taxes were as follows: As of December 31, (in thousands) 2020 2019 Deferred Tax Assets: Accruals and reserves $ 1,499 $ 1,566 Intangible assets 49,558 53,600 Net operating loss carryforwards 436 4,114 Interest limitation carryforwards 6,295 9,266 Other 2,115 1,877 Gross deferred tax assets 59,903 70,423 Valuation allowance (7,200) (10,144) Total deferred tax assets 52,703 60,279 Deferred Tax Liabilities: Prepaid assets (973) (521) Investments in partnership (19) (5,408) Property and equipment (5,014) (4,693) Total deferred tax liabilities (6,006) (10,622) Net deferred tax assets $ 46,697 $ 49,657 In accordance with the provisions of ASC 740, Income Taxes ("ASC 740"), the Company provides a valuation allowance against deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The assessment considers all available positive and negative evidence and is measured quarterly. As of December 31, 2020 and 2019, the Company had a consolidated valuation allowance of approximately $7.2 million and $10.1 million, respectively, against certain deferred income tax assets related to business interest deduction carryovers and Business Combination costs that the Company believes are not more likely than not to be realized. The Company recognizes the tax effects of uncertain tax positions only if such positions are more likely than not to be sustained based solely upon its technical merits at the reporting date. The Company refers to the difference between the tax benefit recognized in its financial statements and the tax benefit claimed in the income tax return as an "unrecognized tax benefit." As of December 31, 2020 and 2019, the net amounts of our unrecognized tax benefits were not material. The Company is subject to U.S. federal income tax and income tax in multiple state jurisdictions. Tax periods for 2017 and all years thereafter remain open to examination by the federal and state taxing jurisdictions and tax periods for 2016 and all years thereafter remain open for certain state taxing jurisdictions to which the Company is subject. At December 31, 2020, the Company has utilized all of its federal NOL carryforwards of approximately $26.5 million. Also, at December 31, 2020 and 2019, the Company had state NOL carryforwards of approximately $6.2 million and $19.5 million, respectively, with expirations dates ranging from 2023 to 2044. On December 22, 2017, the Tax Cuts and Jobs Act ("Tax Act") was enacted. The Tax Act included a number of changes to existing U.S. tax laws. The most notable provisions of the Tax Act that impacted the Company included a reduction of the U.S. corporate income tax rate from 35% to 21% and the limitations on interest deductibility, both effective January 1, 2018, as well as immediate expensing for certain assets placed into service after September 27, 2017. The Company did not experience any material impacts of the provisions of the Tax Act for the year ended December 31, 2018 other than the impact of the reduction |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Leases The Company has various operating leases for office space and equipment. These leases range in terms from 2 years to 16 years. Most of these leases are renewable at expiration, subject to terms acceptable to the lessors and the Company. Future minimum lease commitments under non-cancelable operating leases with initial or remaining terms in excess of one year are as follows at December 31, 2020: (in thousands) Due In Amount Due 2021 $ 1,356 2022 1,307 2023 1,356 2024 1,394 2025 1,367 Thereafter 2,388 Total $ 9,168 Total rent expenses for the years ended December 31, 2020, 2019, and 2018 was $2.5 million, $2.0 million, and $1.9 million, respectively, which is included in selling, general and administrative expenses in the Company's consolidated statements of operations. 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 that are based on the volume and dollar amounts of processed payments transactions. Some of these agreements have minimum annual requirements for processing volumes. As of December 31, 2020, the Company is committed to pay minimum processing fees under these agreements of approximately $7.0 million over the next year. Merchant Reserves See Note 5 , Settlement Assets and Obligations , for information about merchant reserves. Commitment to Lend See Note 13 , Related Party Matters , for information on a loan commitment extended by the Company to another entity. Contingent Consideration See Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations , for information about contingent consideration related to acquisitions consummated in 2019 and 2018. 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 inside and outside 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 an unfavorable outcome is probable on a claim and that the amount of 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. |
RELATED PARTY MATTERS
RELATED PARTY MATTERS | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Matters | RELATED PARTY MATTERS Contributed Assets of eTab and Cumulus See Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations , for information about the contributions from related parties of certain assets and liabilities of eTab and Cumulus. Loan with Warrant During 2019, the Company, through one of its wholly-owned subsidiaries, executed an interest-bearing loan and commitment agreement with another entity. The Company loaned the entity a total of $3.5 million during 2019, with a commitment to loan up to $10.0 million based on certain growth metrics of the entity and continued compliance by the entity with the terms and covenants of the agreement. The Company's commitment to make additional advances under the loan agreement is dependent upon such advances not conflicting with covenants or restrictions under any of the Company's debt or other applicable agreements. Amounts loaned to this entity by the Company are secured by substantially all of the assets of the entity and by a personal guarantee. The note receivable has an interest rate of 12.0% per annum and is repayable in full in May 2024. The Company also received a warrant to purchase a non-controlling interest in this entity's equity at a fixed amount. The loan agreement also gives the Company certain rights to purchase some or all of this entity's equity in the future, at the entity's then-current fair value. The fair values of the warrant, loan commitment, and purchase right were not material at inception or at December 31, 2020. Prior Management Services Agreement During the year ended December 31, 2018, Priority Holdings, LLC had a management services agreement with PSD Partners LP, which is owned by Mr. Thomas Priore, the Company's President, Chief Executive Officer and Chairman. The Company incurred total expenses of $1.1 million for the year ended December 31, 2018 related to management service fees, annual bonus payout, and occupancy fees, which are recorded in selling, general and administrative expenses in the Company's consolidated statements of operations. Due from Members of Priority Holdings, LLC As noted in Note 1, Nature of Business and Accounting Policies , on July 25, 2018 the owners of Priority Holdings, LLC contributed their member equity interests in exchange for the issuance of MI Acquisitions Inc.'s common stock, and MI Acquisitions, Inc. simultaneously changed its name to Priority Technology Holdings, Inc. Subsequent to July 25, 2018, the Company has made cash payments to, and received cash refund payments from, the former owners of Priority Holdings, LLC, mostly related to pass-through tax amounts for periods prior to July 25, 2018. At December 31, 2020 and 2019, the net amounts receivable from these parties were approximately $0.2 million and $0.2 million, respectively. Underwriting Commissions During the year ended December 31, 2018, the Company paid and capitalized in additional paid-in capital underwriting commissions of $8.0 million related to the recapitalization. See Note 14 , Stockholders' Deficit . Call Right The Company's President, Chief Executive Officer and Chairman was given the right to require any of the founders of MI Acquisitions to sell all or a portion of their Company securities at a call-right purchase price, payable in cash. The call right purchase price for common stock will be based on the greater of: 1) $10.30; 2) a preceding volume-weighted average closing price (as defined in the governing document); or 3) a subsequent volume-weighted average closing price (as defined in the governing document). The call right purchase price for warrants will be determined by the greater of: 1) a preceding volume-weighted average closing price (as defined in the governing document) of the called security or 2) a subsequent volume-weighted average closing price of the called security. For the Company, the call right does not constitute a financial instrument or derivative under GAAP since it does not represent an asset or obligation of the Company, however the Company discloses it as a related party matter. |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | STOCKHOLDERS' DEFICIT As disclosed in Note 1, Nature of Business and Accounting Policies , on July 25, 2018, the Company executed the Business Combination which was accounted for as a "reverse merger" between Priority Holdings, LLC and MI Acquisitions, resulting in the Recapitalization of the Company's equity. The combined entity was renamed Priority Technology Holdings, Inc. Common and Preferred Stock For periods prior to July 25, 2018, equity has been retroactively revised to reflect the number of shares received as a result of the Recapitalization. The equity structure of the Company was as follows as of December 31, 2020 and 2019: (shares in thousands) December 31, 2020 December 31, 2019 Authorized Issued Outstanding Authorized Issued Outstanding Common stock, par value $0.001 1,000,000 67,842 67,391 1,000,000 67,512 67,061 Preferred stock, par value $0.001 100,000 — — 100,000 — — The difference between the issued and outstanding common stock at December 31, 2020 and 2019 is due to 451,224 shares of treasury stock held by the Company. In connection with the Business Combination and Recapitalization, the following occurred in 2018: • In exchange for the 4.6 million common units of Priority Holdings, LLC, 60.1 million shares of common stock were issued in a private placement that resulted in the Company receiving approximately $49.4 million. The 60.1 million shares exclude 0.5 million shares issued as partial consideration in two business acquisitions (see N ote 4, Asset Acquisitions, Asset Contributions , and Business Combinations ) and includes 3.0 million shares issued in connection with the 2014 Management Incentive Plan (see Note 15 , Share -Based Compensation ). • Approximately 4.9 million shares of common stock were deemed to have been issued through share conversion in exchange for the publicly-traded shares of MI Acquisitions that originated from MI Acquisitions' 2016 IPO. • $2.1 million was paid to MI Acquisitions' founding shareholders (the "MI Founders") in exchange for 421,107 units and 453,210 shares of common stock held by the MI Founders. Each unit consisted of one share and one warrant of MI Acquisitions. • The MI Founders forfeited 174,863 shares of their common stock. At December 31, 2018, the Company had 67,038,304 shares of common stock outstanding, of which: 1) 60,071,200 shares were issued in the Recapitalization through the private placement; 2) 874,317 shares were transferred to the sellers of Priority Holdings, LLC that were purchased from the MI Founders; 3) 4,918,138 shares were issued in MI Acquisitions' 2016 IPO; 4) 699,454 shares were issued to the MI Founders; and 5) 475,195 shares were issued as partial consideration for two business acquisitions. Certain holders of common stock from the private placement may be subject to holding period restrictions under applicable securities laws. During the second quarter of 2019, the Company repurchased a total of 451,224 shares of its common stock at an average price of $5.29 per share. Total cash paid by the Company was approximately $2.4 million. The repurchases were authorized under a December 2018 resolution by the Company's board of directors, which expired during the second quarter of 2019. Except as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders of the Company's common stock possess all voting power for the election of members of the Company's board of directors and all other matters requiring stockholder action and will at all times vote together as one class on all matters submitted to a vote of the Company's stockholders. Holders of the Company's common stock are entitled to one vote per share on matters to be voted on by stockholders. Holders of the Company's common stock will be entitled to receive such dividends and other distributions, if any, as may be declared from time to time by the Company's board of directors in its discretion. Since the Business Combination and Recapitalization, the Company has neither declared nor paid dividends. The holders of the Company's common stock have no conversion, preemptive or other subscription rights and there is no sinking fund or redemption provisions applicable to the common stock. The Company is authorized to issue 100,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. As of December 31, 2020, the Company has not issued any shares of preferred stock. Warrants issued by MI Acquisitions Prior to July 25, 2018, MI Acquisitions issued warrants that allow the holders to purchase up to 5,731,216 shares of the Company's common stock at an exercise price of $11.50 per share, subject to certain adjustments (5,310,109 of these warrants were designated as "public warrants" and 421,107 were designated as "private warrants"). The warrants, which survived the Business Combination, may be exercised before August 24, 2023, which is the end of the five-year period that commenced 30 days after the Business Combination of July 25, 2018. The Company has the option to redeem all (and not less than all) of the outstanding public warrants at any time from and after the warrants become exercisable, and prior to their expiration, at the price of $0.01 per warrant; provided that the last sales price of the Company's common stock has been equal to or greater than $16.00 per share (subject to adjustment for splits, dividends, recapitalizations and other similar events), for any 20 trading days within a 30 trading day period ending on the third business day prior to the date on which notice of redemption is given and provided further that (i) there is a current registration statement in effect with respect to the shares of common stock underlying the public warrants for each day in the 30-day trading period and continuing each day thereafter until the redemption date or (ii) the cashless exercise is exempt from the registration requirements under the Securities Act of 1933, as amended. The warrants are classified as equity for accounting purposes. In August 2018, the Company was informed by Nasdaq that Nasdaq intended to delist the Company's outstanding warrants and units due to an insufficient number of round lot holders for the public warrants. The Company subsequently filed a Registration Statement on Form S-4 with the SEC for the purpose of offering holders of the Company's outstanding 5,310,109 public warrants and 421,107 private warrants the opportunity to exchange each warrant for 0.192 shares of the Company's common stock. The exchange offer expired in February 2019 resulting in approximately 2.2 million warrants being tendered during 2019 in exchange for approximately 0.4 million shares of the Company's common stock plus cash in lieu of fractional shares. Nasdaq proceeded to delist the remaining outstanding warrants and units, which were comprised of one share of common stock and one warrant, from The Nasdaq Global Market at the open of business on March 6, 2019. The delisting of the remaining outstanding warrants and units had no impact on the Company's financial statements. Purchase option issued by MI Acquisitions Prior to July 25, 2018, a purchase option was sold to an underwriter by MI Acquisitions for consideration of $100. The purchase option, which survived the Business Combination, allows the holder to purchase up to a total of 300,000 units (each consisting of a share of common stock and a public warrant) exercisable at $12.00 per unit. The purchase option expires on August 24, 2023, which is the end of the five-year period that commenced 30 days after the Business Combination of July 25, 2018. The purchase option is classified as equity for accounting purposes. No exercises have occurred through December 31, 2020. 2018 Business Combination and Recapitalization Costs In connection with the Business Combination and Recapitalization, the Company incurred $13.3 million in fees and expenses, of which $9.7 million of recapitalization costs were charged to Additional Paid in Capital in 2018 since these costs were less than the cash received in conjunction with the Recapitalization costs and were directly related to the issuance of equity for the Recapitalization. These costs are presented as Recapitalization costs in the accompanying consolidated statements of changes in stockholders' deficit. The remaining $3.6 million of expenses were related to the Business Combination and are presented in selling, general and administrative expenses in the accompanying consolidated statements of operations. 2018 Equity Events for Priority Holdings, LLC that Occurred Prior to July 25, 2018 (date of Business Combination) On January 31, 2017, Priority entered into a redemption agreement with one of its minority unit holders to redeem their former Class A common membership units for a total redemption price of $12.2 million. Priority accounted for the Common Unit Repurchase Obligation as a liability because it was required to redeem these former Class A common units for cash. The liability was recorded at fair value at the date of the redemption agreement, which was equal to the redemption value. Under this agreement, Priority redeemed $3.0 million of 69,450 former Class A common units in April 2017. The remaining $9.2 million was redeemed through the January 17, 2018 redemption of 115,751 former Class A common units for $5.0 million and the February 23, 2018 redemption of 96,999 former Class A common units for $4.2 million. In addition to the aforementioned redemptions, Priority redeemed 295,834 former Class A common units for $25.9 million on January 17, 2018 and 445,410 former Class A common units for $39.0 million on January 19, 2018. As a result of the aforementioned redemptions, Priority was 100% owned by Priority Investment Holdings, LLC and Priority Incentive Equity Holdings, LLC until July 25, 2018. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION During 2020, 2019 and 2018, the Company had three share-based compensation plans: 2018 Equity Incentive Plan; Earnout Incentive Plan; and 2014 Management Incentive Plan. Total share-based compensation expense, for both equity-classified and liability-classified awards, was approximately $2.4 million, $3.7 million, $1.6 million for the years ended December 31, 2020, 2019, and 2018, respectively, which is included in salary and employee benefits in the accompanying consolidated statements of operations. For the years ended December 31, 2020, 2019 and 2018, the Company recognized an income tax benefit of approximately $0.4 million, $0.5 million and $0.1 million, respectively, for share-based compensation expense. For the years ended December 31, 2020, 2019, and 2018, share-based compensation was recognized by plan as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Plan: 2018 Equity Incentive Plan $ 2,430 $ 2,385 $ 187 Earnout Incentive Plan — — — 2014 Management Incentive Plan — 1,267 1,462 Total $ 2,430 $ 3,652 $ 1,649 No share-based compensation has been capitalized. Beginning in 2018, the Company elected to recognize the effects of forfeitures on compensation expense as the forfeitures occur for all plans. 2018 Equity Incentive Plan The 2018 Equity Incentive Plan ("2018 Plan") was approved by the Company's board of directors and shareholders in July 2018. The 2018 Plan provides for the issuance of up to 6,685,696 of the Company's common stock, and these shares were registered on a Form S-8 during 2018. Under the 2018 Plan, the Company's compensation committee may grant awards of non-qualified stock options, incentive stock options, stock appreciation rights ("SARs"), restricted stock awards, restricted stock units RSU), other share-based awards (including cash bonus awards) or any combination of the foregoing. Any current or prospective employees, officers, consultants or advisors that the Company's compensation committee (or, in the case of non-employee directors, the Company's board of directors) selects, from time to time, are eligible to receive awards under the 2018 Plan. If any award granted under the 2018 Plan expires, terminates, or is canceled or forfeited without being settled or exercised, or if a SAR is settled in cash or otherwise without the issuance of shares, shares of the Company's common stock subject to such award will again be made available for future grants. In addition, if any shares are surrendered or tendered to pay the exercise price of an award or to satisfy withholding taxes owed, such shares will again be available for grants under the 2018 Plan. A summary of the activity in stock units for the 2018 Plan that occurred during the years ended December 31, 2020, 2019 and 2018 is as follows: 6,685,696 Common stock authorized for the 2018 Plan (2,044,815) Stock options granted in December 2018 7,558 Stock option grants forfeited in 2018 (202,200) RSUs granted in 2018 4,446,239 Common stock available for issuance under the 2018 Plan at December 31, 2018 326,173 Stock option grants forfeited in 2019 (36,657) RSUs granted in 2019 60,421 RSUs forfeited in 2019 4,796,176 Common stock available for issuance under the 2018 Plan at December 31, 2019 (15,000) Stock options granted in 2020 220,045 Stock option grants forfeited in 2020 (1,031,740) RSUs granted in 2020 (128,624) RSU granted in 2020 with performance goals that have not been determined 21,277 RSUs forfeited in 2020 3,862,134 Common stock available for issuance under the 2018 Plan at December 31, 2020 The above table does not reflect a liability-classified award with an estimated fair value of $0.8 million included in accounts payable and accrued expenses in the consolidated balance sheet at December 31, 2020. Stock Options Substantially all stock options grants were granted in December 2018 when the Company issued stock option grants to substantially all of the Company's employees at the time, excluding the Company's executive officers. The stock options issued in December 2018 vest as follows: 50% on July 27, 2019; 25% on July 27, 2020; and 25% on July 27, 2021. If a participant terminates employment with the Company, vested options may be exercised for a short period of time while unvested options are forfeited. However, in any event, a stock option will expire ten years from date of grant. Details about the time-based equity-classified stock options granted under the plan are as follows: Weighted- Options for average Weighted-average Aggregate number of exercise remaining intrinsic value shares price contractual terms (in thousands) Outstanding, January 1, 2018 — — Granted in 2018 2,044,815 $ 6.95 Exercised in 2018 — — Forfeited in 2018 (7,558) $ 6.95 Expired in 2018 — — Outstanding, December 31, 2018 2,037,257 $ 6.95 9.6 years $ 2,139 Granted in 2019 — — Exercised in 2019 — — Forfeited or expired in 2019 (326,173) $ 6.95 Outstanding, December 31, 2019 1,711,084 $ 6.95 8.6 years $ — Granted in 2020 15,000 $ 2.47 Exercised in 2020 — — Forfeited or expired in 2020 (220,045) $ 6.95 Outstanding, December 31, 2020 1,506,039 $ 6.91 7.8 years $ 203 Vested and Expected to Vest 1,506,039 $ 6.91 7.8 years $ 203 Exercisable at December 31, 2020 1,125,755 $ 6.95 7.8 years $ 101 No stock options have been exercised as of December 31, 2020. For the years ended December 31, 2020, 2019 and 2018, compensation expense of $0.8 million, $2.0 million and $0.2 million was recognized for stock option grants. As of December 31, 2020, there was approximately $0.4 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a remaining weighted-average period of 0.7 years. The table below presents the assumptions used to calculate the fair value of the stock options issued in 2020 and 2018: 2020 2018 Expected volatility 94 % 30 % Risk-free interest rate 0.5 % 2.4 % Expected term (years) 7.5 4.3 Dividend yield — % — % Exercise price $2.47 $6.95 No stock options were granted in 2019. Equity-Classified Restricted Stock Units Underlying Weighted-average (in thousands) Common Grant-date Aggregate Shares Fair Value Fair Value Service-based vesting: Unvested at January 1, 2018 — Granted in 2018 107,142 $ 7.00 $ 750 Unvested at December 31, 2018 107,142 Granted in 2019 36,657 $ 6.82 $ 250 Vested in 2019 (53,571) $ 171 Forfeited in 2019 (36,657) $ 6.82 Unvested at December 31, 2019 53,571 Granted in 2020 892,142 $ 2.93 $ 2,617 Forfeited in 2020 (21,277) $ 2.35 Vested in 2020 (328,035) $ 1,150 Unvested at December 31, 2020 596,401 Performance-based vesting: Unvested at January 1, 2018 — Granted in 2018 95,057 $ 10.52 $ 1,000 Unvested at December 31, 2018 95,057 Forfeited in 2019 (23,674) $ 10.52 Unvested at December 31, 2019 71,383 Granted in 2020 (a) (b) 139,598 $ 2.56 $ 358 Forfeited in 2020 (71,383) $ 10.52 Unvested at December 31, 2020 139,598 (a) Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient. For the portions of any grants for which the required performance goals have not been determined and communicated to the grant recipient, a grant has not yet occurred for accounting purposes. (b) Does not include a liability-classified performance-based RSU award with an estimated fair value of $0.8 million. As of December 31, 2020, there was approximately $1.6 million and $0.2 million of unrecognized compensation cost for equity-classified service-based RSUs and performance-based RSUs, respectively, and these costs are expected to be recognized over a weighted-average period of 2.2 years and 2.6 years, respectively. Liability-Classified Share-Based Arrangement In March 2020, the compensation committee of the Company's board of directors provided performance goals and achievement criteria to its CEO and Chairman. If these performance goals are met, the Company has committed to issue an RSU grant with a target fair value of $0.8 million on the future grant date, which occurred in the first quarter of 2021. The Company began accruing compensation expense in 2020 and through December 31, 2020 has accrued an aggregate of $0.3 million for this liability-classified award. Earnout Incentive Plan The Company's Earnout Incentive Plan (the "EIP") expired on December 31, 2019. No shares were issued under the EIP. During the fourth quarter of 2019, a total of 95,057 RSUs expired under the EIP with a grant-date fair value of $10.52 each (these grants were in addition to the 95,057 RSUs issued under the 2018 Plan, as previously noted above). Prior to December 31, 2019, it was not probable that the performance metrics would be achieved, thus no compensation expense was recognized for these RSUs for any reporting period. 2014 Management Incentive Plan The Priority Holdings Management Incentive Plan (the "MIP") was established in 2014 to issue share-based compensation awards to selected employees. Simultaneously with the Business Combination and Recapitalization (see Note 14 , Stockholders' Deficit |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2020 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The Company sponsors a 401(k) defined contribution savings plan that covers substantially all of its eligible employees. Under the plan, the Company contributes safe-harbor matching contributions to eligible plan participants on an annual basis. The Company may also contribute additional discretionary amounts to plan participants. The Company's contributions to the plan were $1.3 million, $1.3 million, and $0.9 million for the years ended December 31, 2020, 2019, and 2018, respectively. The Company offers a comprehensive medical benefit plan to eligible employees. All obligations under the plan are fully insured through third-party insurance companies. Employees participating in the medical plan pay a portion of the costs for the insurance benefits. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value | FAIR VALUE Fair Value Measurements The following is a description of the valuation methodologies used for contingent consideration for business combinations and for the Goldman Sachs warrant prior to its July 2018 redemption (see Note 10 , Long-Term Debt and Warrant Liability ), both of which were initially recorded and remeasured at fair value at the end of each reporting period. The contingent consideration for business combinations are related to acquisitions made in 2018 and the contingency periods have expired at December 31, 2020. The Goldman Sachs warrant was fully redeemed in July 2018. Accordingly, at December 31, 2020, the Company no longer has any fair value estimates that are remeasured at the end of each reporting period. Redeemed Goldman Sachs Warrant Prior to its redemption in July 2018, the Goldman Sachs warrant was classified as level 3 in the fair value hierarchy. Historically, the fair value of the Goldman Sachs warrant was estimated based on the fair value of Priority Holdings, LLC using a weighted-average of values derived from generally accepted valuation techniques, including market approaches, which consider the guideline public company method, the guideline transaction method, the recent funding method, and an income approach, which considers discounted cash flows. Priority Holdings, LLC adjusted the carrying value of the warrant to fair value as determined by the valuation model and recognized the change in fair value as an increase or decrease in interest and other expense. On July 25, 2018, the Goldman Sachs warrant was fully redeemed in exchange for $12.7 million cash, which resulted in a gain of $0.1 million, as the value of the Goldman Sachs warrant immediately prior to the cancellation was $12.8 million. Contingent Consideration for Business Combinations The initial estimated fair value of approximately $1.0 million for the contingent consideration related to the 2018 business combinations for PPS Tech and PPS Northeast (see Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations ) were based on a weighted payout probability at the measurement date, which falls within Level 3 on the fair value hierarchy since these recurring fair value measurements are based on significant unobservable inputs. The probabilities used to estimate the payout probability of the contingent consideration for the two business combinations ranged between 15% and 35% for one and between 5.0% and 80% for the other. The weighted average probabilities were based on present value of estimated projections for financial metrics for the remaining earnout periods. At December 31, 2019 and 2018, the fair value of this contingent consideration was estimated to be an aggregate of approximately $0.4 million and $1.0 million, respectively. During the years ended December 31, 2020 and 2019, the carrying values of these contingent consideration arrangements were reduced by approximately $0.4 million and $0.6 million, respectively, and these amounts are reported within selling, general and administrative expense on the Company's consolidated statements of operations. The Company paid no amounts under either of these earnout arrangements which expired during the year ended December 31, 2020. The following table shows a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs that are classified as Level 3 in the fair value hierarchy for the years ended December 31, 2020, 2019, and 2018: (in thousands) Warrant Liability Contingent Consideration Balance at January 1, 2018 $ 8,701 $ — Extinguishment of GS 1.8% warrant liability (Note 10) (8,701) — GS 2.2% warrant liability (Note 10) 12,182 — Adjustment to fair value included in earnings 591 — Extinguishment of GS 2.2% warrant liability (Note 10) (12,701) — Change in fair value of warrant liability (72) — Earnout liabilities arising from business combinations (Note 4) — 980 Balance at December 31, 2018 — 980 Adjustment to fair value included in earnings — (620) Balance at December 31, 2019 — 360 Adjustment to fair value included in earnings — (360) Balance at December 31, 2020 $ — $ — There were no transfers among the fair value levels during the years ended December 31, 2020, 2019, or 2018. 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 believes that all of its notes receivable are collectible. The fair value of the Company's notes receivable at December 31, 2020 and December 31, 2019 was approximately $7.7 million and $5.7 million, respectively. On the fair value hierarchy, Level 3 inputs are used to estimate the fair value of these notes receivable. Debt Obligations The Borrower's outstanding debt obligations (see Note 10 , Long-Term Debt and Warrant Liability ) are reflected in the Company's consolidated balance sheets at carrying value since the Company did not elect to remeasure debt obligations to fair value at the end of each reporting period. The fair value of the term loan facility under the Borrowers' Senior Credit Agreement at December 31, 2020 and 2019 was estimated to be approximately $278.0 million and $381.0 million, respectively. The fair value of these notes with a notional value and carrying value (gross of deferred costs and discounts) of $279.4 million and $388.8 million, respectively, was estimated using binding and non-binding quoted prices in an active secondary market, which considers the Borrowers' credit risk and market related conditions, and is within Level 3 of the fair value hierarchy. The carrying values of the Borrowers' 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION The Company has three reportable segments that are reviewed by the Company's chief operating decision maker ("CODM"), who is the Company's President, Chief Executive Officer and Chairman. The Consumer Payments operating segment is one reportable segment. The Commercial Payments and Institutional Services (aka Managed Services) operating segments are aggregated into one reportable segment, Commercial Payments. The Integrated Partners operating segment is one reportable segment. Prior to second quarter of 2019, the Integrated Partners operating segment was aggregated with the Commercial Payments and Institutional Services operating segments and reported as one aggregated reportable segment, Commercial Payments. As of the second quarter of 2019, the Integrated Partners operating segment is no longer aggregated into the Commercial Payments operating segment. All comparative periods have been adjusted to reflect the current three reportable segments. More information about our three reportable segments: • Consumer Payments – represents consumer-related services and offerings including merchant acquiring and transaction processing services including the proprietary MX enterprise suite. Either through acquisition of merchant portfolios or through resellers, the Company becomes a party or enters into contracts with a merchant and a sponsor bank. Pursuant to the contracts, for each card transaction, the sponsor bank collects payment from the credit, debit or other payment card issuing bank, net of interchange fees due to the issuing bank, pays credit card association (e.g., Visa, MasterCard) assessments and pays the transaction fee due to the Company for the suite of processing and related services it provides to merchants, with the remainder going to the merchant. • Commercial Payments – represents services provided to certain enterprise customers, including outsourced sales force to those customers and accounts payable automation services to commercial customers. • Integrated Partners - represents payment adjacent services that are provided primarily to the rental real estate and rental storage, medical and hospitality industries. Integrated Partners had no material operations prior to 2018 and sold a significant portion of its business in September 2020. Corporate includes costs of corporate functions and shared services not allocated to our reportable segments. Information on segments and reconciliations to consolidated revenues, consolidated income (loss) from operations, and consolidated depreciation and amortization are as follows for the years presented: Year Ended December 31, (in thousands) 2020 2019 2018 Revenues: Consumer Payments $ 367,816 $ 330,599 $ 347,013 Commercial Payments 20,922 25,980 27,056 Integrated Partners 15,604 15,275 1,753 Consolidated revenues $ 404,342 $ 371,854 $ 375,822 Income (loss) from operations: Consumer Payments $ 38,392 $ 32,237 $ 47,002 Commercial Payments 923 (891) (952) Integrated Partners 1,404 725 (1,969) Corporate (19,858) (24,887) (27,688) Consolidated income from operations $ 20,861 $ 7,184 $ 16,393 Depreciation and amortization: Consumer Payments $ 35,002 $ 32,842 $ 17,945 Commercial Payments 306 323 557 Integrated Partners 4,299 4,398 145 Corporate 1,168 1,529 1,093 Consolidated depreciation and amortization $ 40,775 $ 39,092 $ 19,740 A reconciliation of total income from operations of reportable segments to the Company's net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. is provided in the following table: Year Ended December 31, (in thousands) 2020 2019 2018 Total income from operations of reportable segments $ 40,719 $ 32,071 $ 44,081 Less Corporate (19,858) (24,887) (27,688) Less interest expense (44,839) (40,653) (29,935) Less debt modification and extinguishment expense (1,899) — (2,043) Add gain on sale of business 107,239 — — Add (less) other, net 596 710 (4,741) Income tax (expense) benefit (10,899) (830) 2,490 Net income (loss) 71,059 (33,589) (17,836) Less earnings attributable to non-controlling interests (45,398) — — Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. $ 25,661 $ (33,589) $ (17,836) Total assets, all located in the United States, by reportable segment reconciled to consolidated assets as of December 31, 2020 and 2019 were as follows: (in thousands) As of December 31, 2020 2019 Consumer Payments $ 261,675 $ 274,136 Commercial Payments 81,106 45,152 Integrated Partners 3,991 74,386 Corporate 71,057 70,831 Total consolidated assets $ 417,829 $ 464,505 Assets in Corporate at December 31, 2020 and 2019 primarily represent prepaid expenses and other current assets; property, equipment and software; and net deferred income tax assets. Substantially all assets related to business operations are assigned to one of the Company's three reportable segments even though some of those assets result in Corporate expenses. |
EARNINGS (LOSS) PER COMMON SHAR
EARNINGS (LOSS) PER COMMON SHARE | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Common Share | EARNINGS (LOSS) PER COMMON SHARE As a result of the Recapitalization, the Company has retrospectively adjusted the weighted-average Class A units outstanding prior to July 25, 2018 by multiplying them by the exchange ratio used to determine the number of Class A common stock into which they converted. The following tables set forth the computation of the Company's earnings (loss) per common share: Year Ended December 31, (in thousands except per share amounts) 2020 2019 2018 Numerator: Net income (loss) $ 71,059 $ (33,589) $ (17,836) Less: Income allocated to participating securities — — (45) Less: Earnings attributable to non-controlling interests (45,398) — — Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. $ 25,661 $ (33,589) $ (17,881) Basic: Weighted-average common stock shares outstanding 67,158 67,086 61,607 Basic earnings (loss) per common share $ 0.38 $ (0.50) $ (0.29) Fully Diluted: Weighted-average common stock shares outstanding 67,158 67,086 61,607 Weighted-average dilutive common shares outstanding 105 — — Weighted-average common shares for fully-diluted earnings (loss) per share 67,263 67,086 61,607 Fully-diluted earnings (loss) per common share $ 0.38 $ (0.50) $ (0.29) Anti-dilutive securities that were excluded from earnings (loss) per common share that could potentially be dilutive in future periods are as follows: As of December 31, (in thousands) 2020 2019 2018 Stock options (1) 1,506 1,711 2,091 Restricted stock units (1) 280 125 202 Liability-classified restricted stock units (1) 107 — — Earnout incentive awards subject to vesting (2) — — 95 Warrants on common stock (3) 3,556 3,556 5,731 Options and warrants issued to underwriter (3) 600 600 600 Earnout incentive awards subject to issuance (2) — — 9,705 Total 6,049 5,992 18,424 (1) Granted under the 2018 Equity Incentive Plan. See Note 15 , Share - Based Compensation . (2) Plan expired on December 31, 2019 with no shares issued. (3) Issued by M.I. Acquisitions prior to July 25, 2018. See Note 14 , Stockholders ' Deficit . |
SELECTED QUARTERLY FINANCIAL RE
SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Results (Unaudited) | SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED) (in thousands, except per share amounts) 2020 1Q 2Q 3Q 4Q Year Revenues $ 96,933 $ 92,356 $ 108,962 $ 106,091 $ 404,342 Operating expenses 93,374 88,325 101,920 99,862 383,481 Income from operations 3,559 4,031 7,042 6,229 20,861 Interest expense (10,315) (11,668) (13,471) (9,385) (44,839) Gain on sale of business — — 107,239 — 107,239 Debt extinguishment and modification expenses (376) — (1,523) — (1,899) Other, net 30 194 190 182 596 Income tax (benefit) expense (1,233) 415 13,737 (2,020) 10,899 Net (loss) income (5,869) (7,858) 85,740 (954) 71,059 Income attributable to non-controlling interests — — (45,348) (50) (45,398) Net (loss) income attributable to stockholders of Priority Technology Holdings, Inc. $ (5,869) (7,858) $ 40,392 $ (1,004) $ 25,661 Basic and diluted (loss) income per common share (1) $ (0.09) $ (0.12) $ 0.60 $ (0.01) $ 0.38 (in thousands, except per share amounts) 2019 1Q 2Q 3Q 4Q Year Revenues $ 87,646 $ 92,142 $ 93,883 $ 98,183 $ 371,854 Operating expenses 86,680 89,706 91,158 97,126 364,670 Income from operations 966 2,436 2,725 1,057 7,184 Interest expense (9,363) (10,776) (10,463) (10,051) (40,653) Other, net 227 138 158 187 710 Income tax (benefit) expense (1,724) 5,928 (1,736) (1,638) 830 Net loss $ (6,446) $ (14,130) $ (5,844) $ (7,169) $ (33,589) Basic and diluted loss per common share (1) $ (0.10) $ (0.21) $ (0.09) $ (0.11) $ (0.50) (1) May not be additive to the net (loss) income per common share amounts for the year due to the calculation provision of ASC 260, Earnings Per Share . |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS Merger with Finxera Holdings, Inc. On March 5, 2021, the Company entered into a definitive merger agreement to acquire Finxera Holdings, Inc. (“Finxera”). Finxera is a provider of deposit account management payment processing services to the debt settlement industry. The transaction is expected to close in the third quarter of 2021, subject to customary closing conditions, regulatory approvals, shareholder approval for both companies, and Finxera having delivered all required consents of banking departments or other governmental entities related to its money transmitter licenses or an arrangement sufficient to enable Finxera to continue operating the business in any material jurisdictions in compliance with all applicable law without a money transmitter license. In the event that the condition is waived for a material jurisdiction pursuant to the above, the Company’s closing stock consideration will be reduced by $10 million, and if a non-material jurisdiction, Finxera will take all steps necessary to ensure compliance with applicable law. Consideration for the Merger will consist of a combination of cash and stock, with the purchase price comprising of: (a) $425 million, plus (b) the aggregate value of the current assets of the Finxera and each of its subsidiaries (the “Group Companies”) less the aggregate value of the current liabilities of Group Companies, in each case, determined on a consolidated basis without duplication, as of the close of business on the business day immediately preceding the date of the Closing (which may be a positive or negative number), plus (c) the sum of all cash and cash equivalents of the Group Companies as of the close of business on the business day immediately preceding the date of the Closing, minus (d) the amount of indebtedness of the Group Companies as of the close of the business day immediately prior to the date of the Closing, minus (e) the amount of unpaid transaction expenses, minus (f) 25% of the earnings of the Group Companies during the period between the signing of the Merger Agreement and the Closing. If the merger agreement is terminated by the Company because the transactions have not been consummated by February 28, 2022, and every condition to consummate the transactions contemplated by the merger agreement has been satisfied and the merger has not been consummated, or if the Company is in material breach of the representations, warranties or covenants in the merger agreement, then the Company may be required to pay Finxera a $22.5 million termination fee. Debt Commitment Letter In connection with the definitive merger agreement, Priority entered into a debt commitment letter with Truist Bank and Truist Securities, Inc. to provide Priority with $300 million of term loan commitments, $290 million of delayed draw term loan commitments, and a $40 million revolving credit facility, subject to the conditions set forth in the debt commitment letter. The proceeds of the term loan facility and the revolving credit facility will be used to refinance existing Senior loan facilities, to pay fees and expenses in connection with the refinancing, and for working capital and general corporate requirements. The proceeds of the delayed draw term loan facility will be used to finance a portion of the merger consideration and paying fees and expenses related to the merger. The availability of loans under the term loan commitments and the revolving credit facility is subject to certain conditions including, but not limited to, prior or substantially simultaneous completion of the transactions contemplated by the equity commitment letter (as described below), either a successful marketing period in connection with the syndication of the initial term loan facility and the revolving credit facility or substantially simultaneous satisfaction of the conditions precedent for the delayed draw term loan facility, and certain other customary closing conditions. The availability of loans under the delayed draw term loan facility is subject to certain conditions including, but not limited to, completion of the merger in accordance with the merger agreement substantially concurrently with the borrowing under the delayed draw term loan facility, substantially simultaneous occurrence of the issuance of common equity of the Company as merger consideration, pro forma leverage below a particular threshold, and certain other customary closing conditions. Equity Commitment Letter Additionally in connection with the definitive merger agreement, the Company entered into a preferred stock commitment letter with Ares Capital Management LLC (“ACM”) and Ares Alternative Credit Management LLC (“AACM” and together with ACM, the “Equity Commitment Parties”), pursuant to which, among other things, the Equity Commitment Parties have agreed to purchase perpetual senior preferred equity securities (the “Preferred Stock”) of the Company (a) to be issued in connection with the refinancing and repayment in full of certain Credit and Guaranty Agreements as described in the Equity Commitment Letter (the “Closing Date Refinancing”) (the “Initial Preferred Stock” and the issuance and sale thereof and certain warrants representing 2.50% of the fully diluted Company Common Shares at the Closing, the “Initial Preferred Stock Financing”) in an amount equal to (i) in the case of ACM, $90.0 million and (ii) in the case of AACM, $60.0 million, (b) to be issued in connection with the Merger (the “Acquisition Preferred Stock” and the issuance and sale thereof, the “Acquisition Preferred Stock Financing”) in an amount equal to (i) in the case of ACM, $30.0 million and (ii) in the case of AACM, $20.0 million and (c) available to be issued in connection with one or more acquisitions by the Company or its subsidiaries as permitted by the Equity Commitment Letter (the “Delayed Preferred Stock” and the issuance and sale thereof, the “Delayed Preferred Stock Financing” and together with the Initial Preferred Stock Financing and the Acquisition Preferred Stock Financing, the “Preferred Stock Financing”) an amount equal to (i) in the case of ACM, $30.0 million and (ii) in the case of AACM, $20.0 million. The Company has also agreed to issue to the Equity Commitment Parties warrants to purchase shares of common stock of the Company equal to an aggregate of 2.5% of the outstanding shares of common stock at a nominal exercise price. The Preferred Stock will require quarterly dividend payments initially equal to a LIBOR rate plus 12% per annum of the liquidation preference, of which at least LIBOR plus 5% is to be payable in cash and the remainder paid in kind. In certain circumstances, including if the Company does not pay the minimum cash dividend, the required dividend may be increased. The Preferred Stock will be redeemable beginning two years after the first issuance of Preferred Stock at a price equal to 102% of the liquidation preference of the Preferred Stock plus any accrued and unpaid dividends or, beginning three years after the first issuance of Preferred Stock, at a price equal to the liquidation preference plus any accrued and unpaid dividends. Prior to two years after the first issuance, the Preferred Stock is redeemable at a make-whole rate. In the event of a change of control or liquidation event, the Company will be required to redeem the outstanding Preferred Stock. The Preferred Stock will not have any voting rights except as required under Delaware law, but certain actions by the Company will require the consent of holders of a majority of the Preferred Stock. In addition, the Preferred Stock will include certain covenants restricting, among other things, restricted payments, the incurrence of indebtedness, acquisitions and investments. The Equity Commitment Parties’ commitment to provide the initial preferred stock financing is subject to certain conditions including but not limited to, the occurrence of the debt commitment refinancing, execution and delivery of the definitive documentation for the preferred stock financing, delivery by the Company to the investors of evidence of a bound buyer-side representation and warranty insurance policy, and certain other customary closing conditions. |
NATURE OF BUSINESS AND ACCOUN_2
NATURE OF BUSINESS AND ACCOUNTING POLICIES - (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Segments | The Company provides its services through three reportable segments: (1) Consumer Payments, (2) Commercial Payments, and (3) Integrated Partners. For additional information about our reportable segments, see Note 18 , Segment Information . |
Basis of Presentation and Consolidation and Non-Controlling Interests | Basis of Presentation and Consolidation The accompanying consolidated financial statements include those of the Company and its controlled subsidiaries. All intercompany accounts and transactions have been eliminated upon consolidation. Investments in unconsolidated affiliated companies are accounted for under the equity method and are included in "Other non-current assets" in the accompanying consolidated balance sheets. The Company generally utilizes the equity method of accounting when it has an ownership interest of between 20% and 50% in an entity, provided the Company is able to exercise significant influence over the investee's operations. Non-Controlling Interests The Company issued non-voting profit-sharing interests in three of its subsidiaries that were formed in 2018 or 2019 to acquire the operating assets of certain businesses (see Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations ). The Company is the majority owner of these subsidiaries and therefore the profit-sharing interests are deemed to be non-controlling interests ("NCI"). To estimate the initial fair value of a profit-sharing interest, the Company utilized future cash flow scenarios with focus on those cash flow scenarios that could result in future distributions to the NCIs. Profits or losses are attributed to an NCI based on the hypothetical-liquidation-at-book-value method that utilizes the terms of the profit-sharing agreement between the Company and the NCIs. As the majority owner, the Company has call rights on the profit-sharing interests issued to the NCIs. These call rights can be executed only under certain circumstances and execution is always voluntary at the Company's discretion. The call rights do not meet the definition of a free-standing financial instrument or derivative, thus no separate accounting is required for these call rights. Based on the LLC agreements for these three subsidiaries, in certain instances the NCIs are entitled to certain earnings of the respective subsidiary. Prior to 2020, no earnings were attributable to any NCIs. All material earnings attributable to the NCIs for the year ended December 31, 2020 were simultaneously distributed to the NCIs. As disclosed in Note 2 , Disposal of Business , the NCIs of one of these subsidiaries, Priority Real Estate Technology, LLC, were fully redeemed during the year ended December 31, 2020. At December 31, 2020, the NCIs of one of the other subsidiaries, Priority PayRight Health Solutions, LLC, have also been fully redeemed and only one of the subsidiaries, Priority Hospitality Technology, LLC, has NCIs at December 31, 2020. See Note 4 , Asset Acquisitions, Asset Contributions , and Business Combinations . |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could materially differ from those estimates. |
Components of Revenues and Expenses, Revenue Recognition, and Customer Deposits and Advance Payments | Components of Revenues and Expenses Revenues See Note 3 , Revenue , for information about our revenue. Costs of Services Costs of services primarily consist of residual payments to ISOs and other direct costs of providing payment services. The residual payments represent commissions paid to ISOs and are generally based upon a percentage of the net revenues generated from merchant transactions. Other costs of services consist of third-party costs related to the Company's commercial payment services, ACH processing services, salaries that are reimbursed under cost-plus business process outsourcing services, and the cost of equipment (point of sale terminals). Selling, General and Administrative Selling, general and administrative expenses include mainly professional services, advertising, rent, office supplies, software licenses, utilities, state and local franchise and sales taxes, litigation settlements, executive travel, insurance, and expenses related to the Business Combination. Interest Expense Interest expense consists of interest on outstanding debt and amortization of deferred financing costs and original issue discounts. Other, net Other, net is composed of interest income, changes in fair value of warrant liabilities, and equity in losses and impairment of unconsolidated entities. Interest income consists mainly of interest received pursuant to notes receivable from independent sales agents and another entity (see Note 6 , Notes Receivable ). Equity in loss and impairment of unconsolidated entities consists of the Company's share of the income or loss of its equity method investment as well as any impairment charges related to such investments. At December 31, 2020, the Company no longer has any investments that are accounted for under the equity method. Changes in fair value of warrant liability relates to a warrant that was fully redeemed in 2018. Debt Extinguishment and Modification Expenses Debt extinguishment expenses represents the write-offs of unamortized deferred financing costs and original issue discount relating to the extinguishment, including partial extinguishment, of debt. Debt modification expenses represents amounts paid to third parties to modify existing debt agreements when those amounts are not eligible for capitalization. Earnings Attributable to Redeemable and Redeemed Non-Controlling Interests Represents the earnings and gains that are attributable to the non-controlling equity interests of certain of the Company's consolidated subsidiaries based on the operating agreements of the subsidiaries. See the "Non-Controlling" section under the following header for "Significant Accounting Policies." Net Income (Loss) Attributable to Stockholders of Priority Technology Holdings, Inc. Revenue Recognition The Company recognizes revenue when it satisfies a performance obligation by transferring a service or good to the customer in an amount to which the Company expects to be entitled (i.e., transaction price) allocated to the distinct services or goods. The Company uses the 5-step model in ASC 606 to determine when and how much revenue to recognize: Step 1 - Identify the contract with the customer Step 2 - Identify the performance obligation Step 3 - Determine the transaction price Step 4 - Allocate the transaction price to the performance obligation Step 5 - Recognize revenue when (or as) the Company satisfies the performance obligation Instead of evaluating each contract with a customer on an individual basis, the Company elects the permitted practical expedient that allows it to use the portfolio approach for many of its contracts since this approach’s impact on the financial statements, when applied to a group of contracts (or performance obligations) with similar characteristics, is not materially different from the impact of applying the revenue standard on an individual contract basis. Under the portfolio practical expedient, collectability is still assessed at the individual contract level when determining if a contract exists. Deferred revenues are not material for any reporting period. The Company's reportable segments are organized by services the Company provides through distinct business units. Set forth below is a description of the Company's revenue recognition polices by segment. Consumer Payments - Revenue in this segment represents merchant card fee revenues, which involves promises to the customer for services related to the electronic authorization, acceptance, processing, and settlement of credit, debit and electronic benefit payment transactions through the payment networks. Merchants, who are the Company’s customers, are charged rates which are based on various factors, including the type of bank card, card brand, merchant charge volume, the merchant's industry and the merchant's risk profile. Typically, revenues generated from these transactions are based on a variable percentage of the dollar amount of each transaction, and in some instances, additional fees are charged for each transaction. The Company's merchant contracts involve three parties: the Company, the merchant and the sponsoring bank. The Company's sponsoring banks collect the gross merchant discount from the card holder’s issuing bank, pay the interchange fees and assessments to the payment networks and credit card associations, retain their fees, and pay to the Company the remaining amount which represents the Company's revenue. The Company recognizes its revenue net of the amounts retained by these third parties. The Company incurs internal costs and costs of other third parties related to processing services. Merchant customers may also be charged miscellaneous fees, including statement fees, annual fees, and monthly minimum fees, fees for handling chargebacks, gateway fees and fees for other miscellaneous services. Commercial Payments - This segment provides business-to-business ("B2B") automated payment services for customers, including virtual payments, purchase cards, electronic funds transfers, ACH payments, and check payments. Revenues are generally earned on a per-transaction basis and are recognized by the Company net of certain third-party costs for interchange fees, assessments to the payment networks, credit card associations, and sponsor bank fees. In this segment, a portion of the revenue is rebated to certain customers, and these rebates are reported as a reduction of revenue. Additionally, this segment provides outsourced business process services by providing a sales force to certain enterprise customers. Such business process services are provided on a cost-plus fee arrangement and revenue is recognized to the extent of billable rates times hours worked and other reimbursable costs incurred. For most performance obligations associated with outsourced services that are satisfied over time, the Company applies the permitted practical expedient known as the “invoice practical expedient” that allows the Company to recognize revenue in the amount of consideration to which the Company has the right to invoice when that amount corresponds directly to the value transferred to the customer. Integrated Partners - The Integrated Partners segment earns revenue by providing services for payment-adjacent technologies that facilitate the acceptance of electronic payments from customers who conduct business in the rental real estate, rental storage, medical, and hospitality industries. A substantial portion of this segment’s revenues are earned as an agent of a third party, and therefore this earned revenue is reported as a net amount within revenue. Customer Deposits and Advance Payments The Company may receive cash payments from certain customers and vendors that require future performance obligations by the Company. Amounts associated with obligations expected to be satisfied within one year are reported in Customer deposits and advance payments on the Company's consolidated balance sheets and amounts associated with obligations expected to be satisfied after one year are reported as a component of Other non-current liabilities on the Company's consolidated balance sheets. These payments are subsequently recognized in the Company's consolidated statements of operations when the Company satisfies the performance obligations required to retain and earn these deposits and advance payments. A vendor may make an upfront payment to the Company to offset costs that the Company incurs to integrate the vendor into the Company’s operations. These upfront payments are deferred by the Company and are subsequently amortized against expense |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) represents the sum of net income (loss) and other amounts that are not included in the consolidated statement of operations as the amounts have not been realized. For the years ended December 31, 2020, 2019, and 2018, there were no differences between the Company's net income (loss) and comprehensive income (loss). Therefore, no separate Statements of Other Comprehensive Income (Loss) are included in the financial statements for the reporting periods. |
Cash and Restricted Cash | Cash and Restricted CashCash includes cash held at financial institutions that is owned by the Company. Restricted cash is held by the Company in financial institutions for the purpose of in-process customer settlements or reserves held per contact terms. |
Accounts Receivable | Accounts Receivable Accounts receivable are stated net of allowance for doubtful accounts and are amounts primarily due from the Company's sponsor banks for revenues earned, net of related interchange and processing fees, and do not bear interest. Other types of accounts receivable are from agents, merchants and other customers. Amounts due from sponsor banks are typically paid within 30 days following the end of each month. |
Allowance for Doubtful Accounts Receivable and Notes Receivable | Allowance for Doubtful Accounts Receivable and Notes Receivable |
Property and Equipment, Including Leases | Property and Equipment, Including Leases Property and equipment are stated at cost, except for property and equipment acquired in a merger or business combination, which is recorded at fair value at the time of the transaction. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The Company has multiple operating leases related to office space. Operating leases do not involve transfer of risks and rewards of ownership of the leased asset to the lessee, therefore the Company expenses the costs of its operating leases. The Company may make various alterations (leasehold improvements) to the office space and capitalize these costs as part of property and equipment. Leasehold improvements are generally amortized on a straight-line basis over the useful life of the improvement or the term of the lease, whichever is shorter. Expenditures for repairs and maintenance which do not extend the useful life of the respective assets are charged to expense as incurred. Expenditures that increase the value or productive capacity of assets are capitalized. At the time of retirements, sales, or other dispositions of property and equipment, the original cost and related accumulated depreciation are removed from the respective accounts, and the gains or losses are presented as a component of income or loss from operations. |
Costs Incurred to Develop Software for Internal Use | Costs Incurred to Develop Software for Internal Use three |
Settlement Assets and Obligations | Settlement Assets and Obligations Settlement processing assets and obligations recognized on the Company's consolidated balance sheet represent intermediary balances arising in the Company's settlement process for merchants and other customers. See Note 5 , Settlement Assets and Obligations . |
Debt Issuance Costs | Debt Issuance and Modification CostsEligible debt issuance costs associated with the Company's credit facilities are deferred and amortized to interest expense over the term of the related debt using the effective interest method. Debt issuance costs associated with Company's term debt are presented on the Company's consolidated balance sheets as a direct reduction in the carrying value of the associated debt liability. |
Business Combinations | Business Combinations The Company uses the acquisition method of accounting for business combinations which requires assets acquired and liabilities assumed to be recognized at their fair values on the acquisition date. Goodwill represents the excess of the purchase |
Goodwill | Goodwill The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur or circumstances indicate the fair value of a reporting unit is below its carrying value. If the fair value of a reporting unit is less than its carrying value, an impairment loss is recorded to the extent that implied fair value of the goodwill within the reporting unit is less than its carrying value. See N ote 7 , Goodwill and Other Intangible Assets . |
Other Intangible Assets | Other Intangible Assets Other Intangible assets are initially recorded at cost upon acquisition by the Company. The carrying value of an intangible asset acquired in an asset acquisition may be subsequently increased for contingent consideration when due to the seller and such amounts can be estimated. The portion of any unpaid purchase price that is contingent on future activities is not initially recorded by the Company on the date of acquisition. Rather, the Company recognizes contingent consideration when it becomes probable and estimable. All of the Company's intangible assets, except Goodwill, have finite lives and are subject to amortization. Intangible assets consist of acquired merchant portfolios, customer relationships, ISO relationships, residual buyouts, trade names, technology, and non-compete agreements. Merchant portfolios Merchant portfolios consist of the acquired rights to a portfolio of merchants such as those acquired from Direct Connect Merchant Services, LLC, and YapStone, Inc. The Company amortizes the cost of its acquired merchant portfolios over their estimated useful lives, which generally range from five years to six years using a straight-line amortization method. Customer Relationships Customer relationships represent the cost of the acquired customer relationship, which typically consists of a portfolio of merchants or contracted business relationships. The Company amortizes the cost of its acquired customer relationships over their estimated useful lives, which generally range from 10 years to 15 years, using either a straight-line or an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. ISO Relationships ISO relationships represent the cost of acquired relationships with ISOs. The Company amortizes the cost of its acquired ISO relationships over their estimated useful lives, which generally range from 11 years to 25 years, using an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Residual Buyouts Most of the Company's merchant customers in its Consumer Payments reportable segment are associated with independent ISOs, and these ISOs typically have a right to receive commissions from the Company based on the revenue earned by the associated merchants. The Company may occasionally decide to pay an ISO an agreed-upon amount in exchange for the ISO's surrender of its right to receive future commissions from the Company. The amount that the Company pays for these residual buyouts is capitalized and subsequently amortized over the expected life of the underlying merchant relationships. These amortization periods generally range between 1 year and 9 years and the Company uses either a straight-line or an accelerated amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Technology Technology intangible assets represent acquired technology, such as proprietary software and website domains. The Company amortizes the cost of acquired technology over their estimated useful lives, which generally range between 6 years and 7 years, using a straight-line amortization method that most accurately reflects the pattern in which the economic benefits of the respective asset is consumed. Trade Names and Non-Compete Agreements These intangible assets are amortized over their estimated useful lives, which generally ranging between 5 years and 12 years, using a straight-line amortization method. All non-compete agreements were fully amortized at December 31, 2020 and 2019. |
Impairment of Long-Lived Assets | Impairment of Long-lived AssetsThe Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. For long-lived assets, except goodwill, an impairment loss is indicated when the undiscounted future cash flows estimated to be generated by the asset group are not sufficient to recover the unamortized balance of the asset group. If indicated, the loss is measured as the excess of carrying value over the asset groups' fair value, as determined based on discounted future cash flows. |
Accrued Residual Commissions | Accrued Residual Commissions Accrued residual commissions consist of amounts due to independent sales organizations ("ISOs") and independent sales agents based on a percentage of the net revenues generated from the Company's merchant customers. Percentages vary based on the program type and transaction volume of each merchant. Residual commission expenses were $240.2 million, $213.8 million, and $230.2 million, respectively, for the years ended December 31, 2020, 2019 and 2018, and are included in costs of services in the accompanying consolidated statements of operations. |
ISO Deposits and Loss Reserves | ISO Deposit and Loss Reserve ISOs may partner with the Company in an executive partner program in which ISOs are given negotiated pricing in exchange for bearing risk of loss. Through the arrangement, the Company accepts deposits on behalf of the ISO and a reserve account is established by the Company. All amounts maintained by the Company are included in the accompanying consolidated balance sheets as other liabilities, which are directly offset by restricted cash accounts owned by the Company. |
Share-Based Compensation | Share-Based Compensation The Company recognizes the cost resulting from all share-based payment transactions in the financial statements at grant date fair value. Share-based compensation expense is recognized over the requisite service period and is reflected in salary and employee benefits expense on the Company's consolidated statements of operations. Awards generally vest over two The Company measures a liability award under a share-based payment arrangement based on the award’s fair value remeasured at each reporting date until the date of settlement. Compensation cost for each period until settlement is based on the change (or a portion of the change, depending on the percentage of the requisite service that has been rendered at the reporting date) in the fair value of the instrument for each reporting period. Stock options Under the Company's 2018 Equity Incentive Plan, the Company determines the fair value of stock options using the Black-Scholes option pricing model, which requires the use of the following subjective assumptions: Expected Volatility - Measure of the amount by which a stock price has fluctuated or is expected to fluctuate. Due to the relatively short amount of time that the Company's common stock (Nasdaq: PRTH) has traded on a public market, the Company uses volatility data for the common stocks of a peer group of comparable public companies. An increase in the expected volatility will increase the fair value of the stock option and related compensation expense. Risk-free interest rate - U.S. Treasury rate for a stripped-principal treasury note as of the grant date having a term equal to the expected term of the stock option. An increase in the risk-free interest rate will increase the fair value of the stock option and related compensation expense. Expected term - Period of time over which the stock options granted are expected to remain outstanding. As a newly-public company, the Company lacks sufficient exercise information for its stock option plan. Accordingly, the Company uses a method permitted by the Securities and Exchange Commission ("SEC") whereby the expected term is estimated to be the mid-point between the vesting dates and the expiration dates of the stock option grants. An increase in the expected term will increase the fair value of the stock option and the related compensation expense. Dividend yield - The Company used an amount of zero as the Company has paid no cash or stock dividends and does not anticipate doing so in the foreseeable future. An increase in the dividend yield will decrease the fair value of the stock option and the related compensation expenses. Time-Based Restricted Stock Awards The fair value of time-based restricted stock awards is determined based on the quoted closing price of the Company's common stock on the date of grant and is recognized as compensation expense over the vesting term of the awards. Performance-Based Restricted Stock Awards The Company accounts for its performance-based restricted equity awards based on the quoted closing price of the Company's common stock on the date of grant, adjusted for any market-based vesting criteria, and records shared-based compensation expense over the vesting term of the awards based on the probability that the performance criteria will be achieved. The performance goals may be work-related goals for the individual recipient and/or based on certain corporate performance goals. The Company reassesses the probability of vesting at each reporting period and prospectively adjusts share-based compensation expense based on its probability assessment. Additionally, if performance goals are set or reset on an annual basis, compensation cost is recognized in any reporting period only for performance-based RSU awards in which the performance goals have been established and communicated to the award recipient. |
Repurchased Stock | Repurchased Stock Pursuant to the provisions of ASC 505-30, Treasury Stock , the Company has elected to apply the cost method when accounting for treasury stock resulting from the repurchase of its common stock. Under the cost method, the gross cost of the shares reacquired is charged to a contra equity account labeled Treasury Stock. The equity accounts that were originally credited for the original share issuance, common stock and additional paid-in capital, remain intact. See Note 14 , Stockholders' Deficit . If the treasury shares are ever reissued in the future, proceeds in excess of repurchased cost will be credited to additional paid-in capital. Any deficiency will be charged to retained earnings (accumulated deficit), unless additional paid-in capital from previous treasury stock transactions exists, in which case the deficiency will be charged to that account, with any excess charged to retained earnings (accumulated deficit). If treasury stock is reissued in the future, a cost flow assumption (e.g., FIFO, LIFO, or specific identification) will be adopted to compute excesses and deficiencies upon subsequent share reissuance. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share ("EPS") is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method or if-converted method. Diluted EPS excludes potential shares of common stock if their effect is anti-dilutive. If there is a net loss in any period, basic and diluted EPS are computed in the same manner. The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common shareholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. Prior to redemption in July 2018, the Goldman Sachs warrants were deemed to be participating securities because they had a contractual right to participate in non-forfeitable dividends on a one-for-one basis with the Company's common stock. Accordingly, the Company applied the two-class method for EPS when computing net income (loss) per common share. For periods beginning after September 30, 2018, EPS using the two-class method is no longer required due to the redemption of the Goldman Sachs warrant. See Note 10 , Long-term Debt and Warrant Liability . |
Income Taxes | Income Taxes Prior to July 25, 2018, Priority was a "pass-through" entity for income tax purposes and had no material income tax accounting reflected in its financial statements since taxable income and deductions were "passed through" to Priority's unconsolidated owners. As a limited liability company, Priority Holdings, LLC elected to be treated as a partnership for the purpose of filing income tax returns, and as such, the income and losses of Priority Holdings, LLC flowed through to its members. Accordingly, no provisions for federal and most state income taxes was provided in the consolidated financial statements. However, periodic distributions were made to members to cover company-related tax liabilities. MI Acquisitions was a taxable "C-Corp" for income tax purposes. As a result of Priority's acquisition by MI Acquisitions, the combined Company is now a taxable "C-Corp" that reports all of Priority's income and deductions for income tax purposes. Accordingly, subsequent to July 25, 2018, the consolidated financial statements of the Company reflect the accounting for income taxes in accordance with Financial Accounting Standards Board 's ("FASB") Accounting Standards Codification ("ASC") 740, Income Taxes ("ASC 740"). The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. The Company recognized interest and penalties associated with uncertain tax positions as a component of income tax expense. |
Fair Value Measurements | Fair Value Measurements The Company measures certain assets and liabilities at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level fair value hierarchy to prioritize the inputs used to measure fair value and maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: Level 1 – Quoted market prices in active markets for identical assets or liabilities as of the reporting date. Level 2 – Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3 – Unobservable inputs that are not corroborated by market data. The fair values of the Company's merchant portfolios, assets and liabilities acquired in mergers and business combinations, and contingent consideration are primarily based on Level 3 inputs and are generally estimated based upon valuation techniques that include discounted cash flow analysis based on cash flow projections and, for years beyond the projection period, estimates based on assumed growth rates. Assumptions are also made regarding appropriate discount rates, perpetual growth rates, and capital expenditures, among others. In certain circumstances, the discounted cash flow analysis is corroborated by a market-based approach that utilizes comparable company public trading values and, where available, values observed in public market transactions. The carrying values of accounts and notes receivable, accounts payable and accrued expenses, long-term debt and cash, including settlement assets and the associated deposit liabilities approximate fair value due to either the short-term nature of such instruments or the fact that the interest rate of the debt is based upon current market rates. |
New Accounting and Reporting Standards | New Accounting and Reporting Standards Prior to July 25, 2018, Priority was defined as a non-public entity for purposes of applying transition guidance related to new or revised accounting standards under U.S. GAAP, and as such was typically required to adopt new or revised accounting standards subsequent to the required adoption dates that applied to public companies. MI Acquisitions was classified as an EGC. Subsequent to the Business Combination, the Company will cease to be an EGC no later than December 31, 2021. The Company will maintain the election available to an EGC to use any extended transition period applicable to non-public companies when complying with a new or revised accounting standards. Therefore, as long as the Company retains EGC status, the Company can continue to elect to adopt any new or revised accounting standards on the adoption date (including early adoption) required for a private company. Accounting Standards Adopted in 2020 Disclosures for Fair Value Measurements (ASU 2018-13) On January 1, 2020, the Company adopted Accounting Standards Update ("ASU") No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). ASU 2018-13 eliminated, added, and modified certain disclosure requirements for fair value measurements as part of the Financial Accounting Standards Board's ("FASB") disclosure framework project. Certain amendments must be applied prospectively while others are applied on a retrospective basis to all periods presented. As disclosure guidance, the adoption of this ASU had no effect on the Company's results of operations, financial position, or cash flows for the year ended December 31, 2020. Note 1 7 , Fair Value , reflects the disclosure provisions of ASU 2018-13. Share-Based Payments to Non-Employees (ASU 2018-07) In June 2018, the FASB issued ASU 2018-07, Share-based Payments to Non-Employees , to simplify the accounting for share-based payments to non-employees by aligning it with the accounting for share-based payments to employees, with certain exceptions. As an EGC, the ASU was effective for the Company's annual reporting period that began on January 1, 2020 and will be effective for interim periods beginning first quarter of 2021. The adoption of ASU 2018-07 had no material effect on the Company's results of operations, financial position, or cash flows for the year ended December 31, 2020. Share-Based Payments to Customers (ASU 2019-08) In November 2019, the FASB issued ASU 2019-08, Stock Compensation and Revenue from Contracts with Customers ("ASU 2019-08"). ASU 2019-08 applies to share-based payments granted in conjunction with the sale of goods and services to a customer that are not in exchange for a distinct good or service. Entities apply ASC 718 to measure and classify share-based sales incentives, and reflect the measurement of such incentives, as a reduction of the transaction price and also recognize such incentives in accordance with the guidance in ASC 606 on consideration payable to a customer. Entities that receive distinct goods or services from a customer account for the share-based payment in the same manner as they account for other purchases from suppliers (i.e., by applying the guidance in ASC 718). Any excess of the fair-value-based measure of the share-based payment award over the fair value of the distinct goods or services received is reflected as a reduction to the transaction price and recognized in accordance with the guidance in ASC 606 on consideration payable to a customer. ASU 2019-08 was effective for the Company at the same time it adopted ASU 2018-07, which was for its annual reporting period that began January 1, 2020 and will be effective for interim periods beginning first quarter 2021. The adoption of ASU 2018-07 had no material effect on the Company's results of operations, financial position, or cash flows for the year ended December 31, 2020. Accounting Standards Adopted in 2019 Revenue Recognition (ASC 606) and Related Costs to Obtain or Fulfill a Contracts with Customers (ASC 340-40) For the annual reporting period that began on January 1, 2019, the Company adopted ASU 2014-09 and the other clarifications and technical guidance issued by the Financial Accounting Standards Board ("FASB") related to this new revenue standard that have been collectively codified in ASC 606, Revenue from Contracts with Customers, and the related ASC Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers, (together, "ASC 606"). As an emerging growth company, the Company adopted ASC 606 under the extended transition provisions available to a non-public business entity. Accordingly, the Company was not required to report under the new standards until the Company’s annual reporting period for the year ended December 31, 2019. In reporting the effects of the adoption of ASC 606 in its consolidated financial statements and related disclosures, the Company elected the full retrospective transition method. Under this method, all annual periods presented herein in these consolidated financial statements and related disclosures have been retrospectively recasted to reflect the provisions of ASC 606. In connection with the Company’s evaluation and adoption of ASC 606, the classification of certain transactions previously presented in revenue at their gross amounts were re-evaluated under the principal-agent guidance were retrospectively recasted within the Company’s statements of operations to a net presentation. There were no other adjustments as the result of the adoption of ASC 606 and, accordingly, no adjustment was required to the Company’s beginning retained earnings (deficit) at January 1, 2017 to reflect the cumulative effect of initially applying the new standards. The adoption of ASC 606 resulted only in offsetting reclassifications between revenues and costs of services within the same reporting periods. Accordingly, these reclassifications did not have any impact on income from operations, income (loss) before income taxes, net income (loss), assets, liabilities, stockholders’ deficit, or cash flows for any period. Gains and Losses from Derecognition of Non-Financial Assets (ASU 2017-05) Concurrent with the adoption of ASC 606, the Company was also required to adopt the provisions of ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Non-financial Assets ("ASU 2017-05"). ASU 2017-05 clarifies that the guidance in ASC 610-20 on accounting for derecognition of a non-financial asset and an in-substance non-financial asset applies only when the asset or asset group does not meet the definition of a business or is not a non-for-profit entity. Non-financial assets include, but are not limited to, intangible assets, property and equipment. This ASU also clarifies that the provisions of ASC 606 apply if an entity transfers an asset to a customer. If an asset transfer in within the scope of ASU 2017-05, an entity measures its gain or loss on derecognition of each distinct asset as the difference between the amount of consideration received and the carrying amount of the distinct asset. The adoption of ASU 2017-05 had no impact on the Company's results of operations, financial position, or cash flows for the year ended December 31, 2019. However, the application of ASU 2017-05 to future transactions could be material. Measurements of Certain Equity Investments (ASU 2016-01) Under ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, entities have to measure equity investments (except those accounted for under the equity method, those that result in consolidation of the investee and certain other investments) at fair value and recognize any changes in fair value in net income. However, for equity investments that do not have readily determinable fair values and do not qualify for the existing practical expedient in ASC 820 to estimate fair value using the net asset value per share (or its equivalent) of the investment, the guidance provides a new measurement alternative. Entities may choose to measure those investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company early adopted the provisions of ASU 2016-01 on April 1, 2019 and applied them to an acquired warrant to purchase equity of another entity, the same entity that borrowed $3.5 million from the Company during 2019 under a $10.0 million loan and loan commitment agreement. The carrying value, at cost, and fair value of the warrant were not material. See Note 13 , Related Party Matters . Statement of Cash Flows (ASU 2016-15) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230). This ASU represents a consensus of the FASB's Emerging Issues Task Force on eight separate issues that each impact classifications on the statement of cash flows. In particular, issue number three addresses the classification of contingent consideration payments made after a business combination. Under ASU 2016-15, cash payments made soon after an acquisition's consummation date (i.e., approximately three months or less) will be classified as cash outflows from investing activities. Payments made thereafter will be classified as cash outflows from financing activities up to the amount of the original contingent consideration liability. Payments made in excess of the amount of the original contingent consideration liability will be classified as cash outflows from operating activities. As an EGC, this ASU was effective for the Company's annual reporting period beginning in 2019 and was effective for interim periods beginning in 2020. The Company made no payments in 2020 or 2019 for contingent consideration related to business combinations. Income Taxes for Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16) In October 2016, the FASB issued ASU 2016-16, Intra-Entity Transfers of Assets Other Inventory ("ASU 2016-16"). ASU 2016-16 removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The ASU is intended to reduce the complexity of U.S. GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. ASU 2016-16 was effective for the Company's annual reporting period ended December 31, 2019 and interim periods beginning in 2020. The adoption of ASU 2016-16 did not have a material effect on the Company's results of operations, financial position, or cash flows. However, any future inter-entity transfers of assets within scope of this ASU may be affected. Accounting Standards Adopted in 2018 Modifications to Share-Based Compensation Awards (ASU 2017-09) As of January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2017-09, Compensation-Stock Compensation Topic 718 - Scope of Modification Accounting ("ASU 2017-09"). ASU 2017-09 clarifies when changes to the terms and conditions of share-based payment awards must be accounted for as modifications. Entities apply the modification accounting guidance if the value, vesting conditions, or classification of an award changes. The Company has not modified any share-based payment awards since the adoption of ASU 2017-09, therefore this new ASU has had no impact on the Company's financial position, operations, or cash flows. Should the Company modify share-based payment awards in the future, it will apply the provisions of ASU 2017-09. Balance Sheet Classification of Deferred Income Taxes (ASU 2015-17) In connection with the Business Combination and Recapitalization, the Company prospectively adopted the provisions of ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"), during the third quarter of 2018. ASU 2015-17 simplifies the balance sheet presentation of deferred income taxes by reporting the net amount of deferred tax assets and liabilities for each tax-paying jurisdiction as non-current on the balance sheet. Prior guidance required the deferred taxes for each tax-paying jurisdiction to be presented as a net current asset or liability and net non-current asset or liability. Definition of a Business (ASU 2017-01) On October 1, 2018, the Company prospectively adopted the provisions of ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business ("ASU 2017-01") . ASU 2017-01 assists entities in determining if acquired assets constitute the acquisition of a business or the acquisition of assets for accounting and reporting purposes. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. In practice prior to ASU 2017-01, if revenues were generated immediately before and after a transaction, the acquisition was typically considered a business. The Company's December 2018 acquisition of certain assets of Direct Connect Merchant Services, LLC was not deemed to be the acquisition of a business under ASU 2017-01 because substantially all of the fair value was concentrated in a single identifiable group of similar identifiable assets. Accounting for Share-Based Payments to Employees (ASU 2016-09) For its annual reporting period beginning January 1, 2018, the Company adopted the provisions of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which amends ASC Topic 718, Compensation–Stock Compensation . This adoption had the following effects: Consolidated Statement of Operations - ASU 2016-09 imposes a new requirement to record all of the excess income tax benefits and deficiencies (that result from an increase or decrease in the value of an award from grant date to settlement date) related to share-based payments at settlement through the statement of operations instead of the former requirement to record income tax benefits in excess of compensation cost ("windfalls") in equity, and income tax deficiencies ("shortfalls") in equity to the extent of previous windfalls, and then to operations. This change is required to be applied prospectively upon adoption of ASU 2016-09 to all excess income tax benefits and deficiencies resulting from settlements of share-based payments after the date of adoption. This particular provision of ASU 2016-09 had no material effect on the Company's financial position, operations, or cash flows. Consolidated Statement of Cash Flows - ASU 2016-09 requires that all income tax-related cash flows resulting from share-based payments, such as excess income tax benefits, are to be reported as operating activities on the statement of cash flows, a change from the prior requirement to present windfall income tax benefits as an inflow from financing activities and an offsetting outflow from operating activities. This particular provision of ASU 2016-09 had no material effect on the Company's financial position, operations, or cash flows. Additionally, ASU 2016-09 clarifies that: • All cash payments made to taxing authorities on an employee's behalf for withheld shares at settlement are presented as financing activities on the statement of cash flows. This change must be applied retrospectively. This particular provision of ASU 2016-09 had no material effect on the Company's financial position, operations, or cash flows. • Entities are permitted to make an accounting policy election for the impact of forfeitures on the recognition of expense for share-based payment awards. Forfeitures can be estimated or recognized when they occur. Estimates of forfeitures will still be required in certain circumstances, such as at the time of modification of an award or issuance of a replacement award in a business combination. If elected, the change to recognize forfeitures when they occur needs to be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to opening retained earnings. The Company made a policy election to recognize the impact of forfeitures when they occur. This policy election primarily impacted the Company's new equity compensation plans originating in 2018 (see Note 15, Share -Based Compensation ) , thus not requiring a cumulative effect adjustment to opening retained earnings for these new plans. For the Company's previously existing equity compensation plan (the Management Incentive Plan), see Note 15, Share -Based Compensation . The amount of the cumulative effect upon adoption of ASU 2016-09 was not material and therefore has not been reflected in opening retained earnings on the Company's consolidated balance sheets or consolidated statements of changes in stockholders' deficit. Recently Issued Accounting Standards Pending Adoption The following standards are pending adoption and will likely apply to the Company in future periods based on the Company's current business activities. Implementation Costs Incurred in Cloud Computing Arrangements (ASU 2018-15) In August 2018, the FASB issued ASU 2018-15, Implementation Costs Incurred in Cloud Computing Arrangements ("ASU 2018-15"), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). As an EGC, this ASU will be effective for the Company's annual reporting period beginning January 1, 2021, and will be effective for interim periods beginning in 2022. The amendments are applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption, and the Company has not yet made a determination to use the retrospective or prospective adoption method. Based on current operations of the Company, the adoption of ASU 2018-15 is not expected to have a material effect on the Company's results of operations, financial position, or cash flows. Reference Rate Reform (ASU 2020-04) On March 12, 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU 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 London Interbank Offered Rate ("LIBOR") and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financial Rate. Entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contact at the modification date or reassess a previous accounting determination. ASU 2021-01 ASU 2020-04 can be adopted at any time before December 31, 2022. The provisions of ASU 2020-04 may impact the Company if future debt modifications or refinancings utilize one or more of the reference rates covered by the provisions of this ASU. Leases (ASC 842) In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, Leases-Topic 842 , which has been codified in ASC 842, Leases . Under this new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases): 1) a lease liability equal to the lessee's obligation to make lease payments arising from a lease, measured on a discounted basis and 2) a right-of-use asset which will represent the lessee's right to use, or control the use of, a specified asset for the lease term. As an EGC, this standard is effective for the Company's annual and interim reporting periods beginning 2022. The adoption of ASC 842 will require the Company to recognize non-current assets and liabilities for right-of-use assets and operating lease liabilities on its consolidated balance sheet, but it is not expected to have a material effect on the Company's results of operations or cash flows. ASC 842 will also require additional footnote disclosures to the Company's consolidated financial statements. Credit Losses (ASU 2016-13 and ASU 2018-19) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This new guidance will change how entities account for credit impairment for trade and other receivables, as well as for certain financial assets and other instruments. ASU 2016-13 will replace 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 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 "incurred loss" model considers past events and current conditions, while the "expected loss" model includes expectations for the future which have yet to occur. The standard will require entities to record a cumulative-effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. The Company is currently evaluating the potential impact that ASU 2016-13 may have on the timing of recognizing future provisions for expected losses on the Company's accounts receivable and notes receivable. Since the Company was a smaller reporting company ("SRC") on November 15, 2019, the Company must adopt this new standard no later than the beginning of 2023 for annual and interim reporting periods. Goodwill Impairment Testing (ASU 2017-04) In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . ASU 2017-04 will eliminate the requirement to calculate the implied fair value of goodwill (i.e., step 2 of the current goodwill impairment test) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit's carrying amount over its fair value (i.e., measure the charge based on the current step 1). Any impairment charge will be limited to the amount of goodwill allocated to an impacted reporting unit. ASU 2017-04 will not change the current guidance for completing Step 1 of the goodwill impairment test, and an entity will still be able to perform the current optional qualitative goodwill impairment assessment before determining whether to proceed to Step 1. Upon adoption, the ASU will be applied prospectively. Since the Company was a SRC on November 15, 2019, the Company must adopt this new standard no later than the beginning of 2023 for annual and interim reporting periods. The impact that ASU 2017-04 may have on the Company's financial condition or results of operations will depend on the circumstances of any goodwill impairment event that may occur after adoption. Simplifying the Accounting for Income Taxes (ASU 2019-12) In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes ("ASU 2019-12"). ASU 2019-12 will affect several topics of income tax accounting, including: tax-basis step-up in goodwill obtained in a transaction that is not a business combination; intra-period tax allocation; ownership changes in investments when an equity method investment becomes a subsidiary of an entity; interim-period accounting for enacted changes in tax law; and year-to-date loss limitation in interim-period tax accounting. This ASU is effective for the Company on January 1, 2022. We are evaluating the effect of ASU 2019-12 on our consolidated financial statements. |
Concentration of Risk | Concentration of Risk A substantial portion of the Company's revenues and receivables are attributable to merchants. For the years ended December 31, 2020, 2019, and 2018, no one merchant customer accounted for 10% or more of the Company's consolidated revenues. Most of the Company's merchant customers were referred to the Company by an ISO or other referral partners. If the Company's agreement with an ISO allows the ISO to have merchant portability rights, the ISO can move the underlying merchant relationships to another merchant acquirer upon notice to the Company and completion of a "wind down" period. For the years ended December 31, 2020, 2019, and 2018, merchants referred by one ISO organization with merchant portability rights generated revenue within the Company's Consumer Payments reportable segment that represented approximately 21%, 18%, and 14%, respectively, of the Company's consolidated revenues. A majority of the Company's cash and restricted cash is held in certain financial institutions, substantially all of which is in excess of federal deposit insurance corporation limits. The Company does not believe it is exposed to any significant credit risk from these transactions. |
Reclassifications | Reclassifications Certain prior year amounts in these consolidated financial statements have been reclassified to conform to the current year presentation, with no net effect on the Company's income from operations, income (loss) before income tax expense (benefit), net income (loss), stockholders' deficit, or cash flows from operations, investing, or financing activities. |
DISPOSAL OF BUSINESS (Tables)
DISPOSAL OF BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Sale of Business | The gain amounted to $107.2 million as follows: (in thousands) Gross cash consideration from buyer $ 180,000 Less working capital adjustment paid in cash (584) Net proceeds from buyer 179,416 Transaction costs incurred (5,383) Assets sold: Intangible assets (62,158) Other assets sold, net of obligations assumed (716) Goodwill assigned to business sale (2,683) Other intangible assets (1,237) Pre-tax gain on sale of business $ 107,239 The following unaudited pro forma information is provided for the business (the RentPayment component) that was sold under the Agreement, excluding the gain recognized on the sale transaction: Year Ended December 31, (in thousands) 2020 2019 Revenues $ 12,042 $ 11,694 Income from operations (1) $ 1,825 $ 2,275 Net income (2) (3) $ 1,725 $ 2,218 Net income attributable to the stockholders of Priority Technology Holdings, Inc. (4) $ 1,725 $ 2,218 Income per common share for stockholders of Priority Technology Holdings, Inc. - Basic and Diluted (4) $ 0.03 $ 0.03 (1) Historical financial results are not being reported as discontinued operations. (2) Does not reflect interest expense on the borrowings used to acquire the YapStone assets in March 2019. (3) Pro forma income tax expense based on the following consolidated effective tax rates of Priority Technology Holdings, Inc.: 5.5% and 2.5% for the years ended December 31, 2020 and 2019, respectively. These rates exclude the effect of the $107.2 million net gain on the sale recognized during the year ended December 31, 2020. (4) Prior to the September 2020 sale transaction that resulted in the gain on the sale, no earnings or losses of the PRET LLC were attributable to the NCIs of PRET. |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract With Customer Liability | Supplemental balance sheet information related to contracts from customers as of December 31, 2020 and 2019 was as follows: (in thousands) Consolidated Balance Sheet Location December 31, 2020 December 31, 2019 Liabilities: Contract liabilities, net (current) Customer deposits and advance payments $ 1,494 $ 1,912 |
Schedule of Disaggregation of Revenue | The following table presents a disaggregation of our consolidated revenues by type for the years ended December 31, 2020, 2019 and 2018: Year Ended December 31, (in thousands) 2020 2019 2018 Revenue Type: Merchant card fees $ 377,346 $ 339,450 $ 343,791 Outsourced services and other services 23,103 28,712 29,099 Equipment 3,893 3,692 2,932 Total revenues $ 404,342 $ 371,854 $ 375,822 |
SETTLEMENT ASSETS AND OBLIGAT_2
SETTLEMENT ASSETS AND OBLIGATIONS - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Settlement Assets | The Company's settlement assets and obligations at December 31, 2020 and 2019 were as follows: (in thousands) December 31, 2020 December 31, 2019 Settlement Assets: Card settlements due from merchants, net of estimated losses $ 753 $ 446 Card settlements due from processors — 87 Total Settlement Assets $ 753 $ 533 Settlement Obligations: Card settlements due to merchants $ — $ 44 Due to ACH payees (1) 72,878 37,745 Total Settlement Obligations $ 72,878 $ 37,789 (1) Amounts due to ACH payees are held by the Company in restricted cash. |
Settlement Obligations | The Company's settlement assets and obligations at December 31, 2020 and 2019 were as follows: (in thousands) December 31, 2020 December 31, 2019 Settlement Assets: Card settlements due from merchants, net of estimated losses $ 753 $ 446 Card settlements due from processors — 87 Total Settlement Assets $ 753 $ 533 Settlement Obligations: Card settlements due to merchants $ — $ 44 Due to ACH payees (1) 72,878 37,745 Total Settlement Obligations $ 72,878 $ 37,789 (1) Amounts due to ACH payees are held by the Company in restricted cash. |
NOTES RECEIVABLE - (Tables)
NOTES RECEIVABLE - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Receivables [Abstract] | |
Schedule of Notes Receivable Maturities | Principal contractual maturities on the notes receivable, including payment-in-kind interest, at December 31, 2020 were as follows: (in thousands) Year Ended December 31, Maturities 2021 $ 2,657 2022 1,463 2023 132 2024 3,970 Total principal due 8,222 Discount (long-term) (38) Allowance for doubtful note receivable (current) (467) Notes receivable, net $ 7,717 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The Company's goodwill was allocated to reporting units as follows: (in thousands) December 31, 2020 December 31, 2019 Consumer Payments $ 106,832 $ 106,832 Integrated Partners — 2,683 $ 106,832 $ 109,515 The following table summarizes the changes in the carrying value of goodwill for the years ended December 31, 2020, 2019 and 2018: (in thousands) Amount Balance at January 1, 2018 (all Consumer Payments) $ 101,532 Additions for the year ended December 31, 2018: PayRight (Integrated Partners) 298 RadPad/Landlord Station (Integrated Partners) 2,385 PPS Northeast (Consumer Payments) 1,920 PPS Tech (Consumer Payments) 3,380 Balance at December 31, 2019 and 2018 109,515 Disposal of goodwill in Integrated Partners reporting unit (Note 2 , Disposal of Business ) (2,683) Balance at December 31, 2020 $ 106,832 |
Schedule of Other Intangible Assets | At December 31, 2020 and December 31, 2019, other intangible assets consisted of the following: As of December 31, (in thousands) 2020 2019 Capitalized: Merchant portfolios $ 55,816 $ 114,554 Customer relationships 40,740 40,740 Residual buyouts 116,112 112,731 Non-compete agreements 3,390 3,390 Trade names 2,870 2,870 Technology 14,390 15,390 ISO relationships 15,200 15,200 Total capitalized $ 248,518 $ 304,875 Less accumulated amortization: Merchant portfolios $ (19,471) $ (12,655) Customer relationships (30,267) (25,836) Residual buyouts (72,659) (59,796) Non-compete agreements (3,390) (3,390) Trade names (1,651) (1,273) Technology (13,951) (12,758) ISO relationships (7,319) (6,341) Total accumulated amortization $ (148,708) $ (122,049) Accumulated allowance for impairment $ (1,753) $ — Net carrying value $ 98,057 $ 182,826 The weighted-average amortization periods for intangible assets held at December 31, 2020 are as follows: Useful Life Amortization Method Weighted-Average Life Merchant portfolios 5 - 6 years Straight-line 5.5 years Residual buyouts 1 - 9 years Straight-line and double declining 6.8 years Non-compete agreements 3 years Straight-line 3.0 years Trade names 5 -12 years Straight-line 11.6 years Technology 6 - 7 years Straight-line 6.1 years ISO relationships 11 - 25 years Sum-of-years digits 23.7 years Customer relationships 10 - 15 years Straight-line and sum-of-years digits 11.0 years |
Schedule of Finite-lived Intangible Assets Amortization Expense | The estimated amortization expense of intangible assets as of December 31, 2020 for the next five years and thereafter is: (in thousands) Estimated Year Ending December 31, Amortization Expense 2021 $ 28,216 2022 27,066 2023 21,280 2024 10,126 2025 3,671 Thereafter 7,698 Total $ 98,057 |
PROPERTY, EQUIPMENT AND SOFTW_2
PROPERTY, EQUIPMENT AND SOFTWARE - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | A summary of property, equipment and software as of December 31, 2020 and December 31, 2019 was as follows: As of December 31, (in thousands) 2020 2019 Estimated Useful Life Furniture and fixtures $ 2,795 $ 2,787 2 - 7 years Equipment 10,216 10,101 3 - 7 years Computer software 44,320 37,440 3 - 5 years Leasehold improvements 6,250 6,367 5 - 10 years 63,581 56,695 Less accumulated depreciation (40,706) (33,177) Property, equipment and software, net $ 22,875 $ 23,518 |
ACCOUNTS PAYABLE AND ACCRUED _2
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounts Payable [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The components of accounts payable and accrued expenses that exceeded five percent of total current liabilities at December 31, 2020 and December 31, 2019 consisted of the following: As of December 31, (in thousands) 2020 2019 Accounts payable - trade $ 4,308 $ 6,968 Accrued card network fees $ 8,041 $ 6,950 |
LONG-TERM DEBT AND WARRANT LI_2
LONG-TERM DEBT AND WARRANT LIABILITY - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt owed by certain subsidiaries (the "Borrowers") of the Company consisted of the following as of December 31, 2012 and December 31, 2019: As of December 31, 2020 (dollar amounts in thousands) 2020 2019 Senior Credit Agreement: Term Loan - Matures January 3, 2023 and bears interest at LIBOR (with a LIBOR "floor" of 1.00% beginning March 8, 2020) plus 6.50% and 5.0% at December 31, 2020 and 2019, respectively (actual rate of 7.50% and 6.71% at December 31, 2020 and 2019, respectively) $ 279,417 $ 388,837 Revolving credit facility - $25.0 million line, matures January 22, 2022, and bears interest at LIBOR plus 6.50% and 5.0% at December 31, 2020 and 2019, respectively (actual rate of 6.65% and 6.71% at December 31, 2020 and 2019, respectively). — 11,500 Term Loan - Subordinated, matures July 3, 2023 and bears interest at 5.0% plus an applicable margin at December 31, 2020 and 2019 (actual rate of 12.50% and 10.50% at December 31, 2020 and 2019, respectively) 102,623 95,142 Total debt obligations 382,040 495,479 Less: current portion of long-term debt (19,442) (4,007) Less: unamortized debt discounts and deferred financing costs (4,725) (5,894) Total long-term debt, net $ 357,873 $ 485,578 The following table summarizes changes made as the results of key amendments to the 2017 credit agreements through December 31, 2020: (in millions) GS Credit Senior Credit Agreement Agreement Discounts and Costs Additional Additional Revolving Principal Line Amendment Principal Issue Costs Costs Amendment Established Established Type Established (a) Discount Expensed (b) Capitalized January 2017 $ 200.0 $ 25.0 Extinguishment $ 80.0 $ 3.7 $ 1.8 $ 3.3 January 2018 67.5 — Modification — $ 0.4 $ 0.8 $ 0.7 December 2018 130.0 — Modification — $ 0.3 $ 1.2 $ 0.1 March 2020 — — Modification — $ — $ 0.4 $ 2.7 $ 397.5 $ 25.0 $ 80.0 (a) The GS Credit Agreement allows for payment-in-kind interest which subsequently increases the amount outstanding. Beginning with the Sixth Amendment, the Senior Credit Agreement began to allow certain amounts of interest to be treated as payment-in-kind interest and added to the outstanding borrowings balance, as discussed below under the header "Changes to Applicable Interest Rate Margins." (b) Reported within "Debt extinguishment and modification expenses" on the Company's consolidated statements of operations. |
Schedule of Maturities of Long-Term Debt | Principal outstanding at December 31, 2020 for term debt under the Senior Credit Agreement and the GS Credit Agreement are scheduled to be paid as follows: (in thousands) Principal Due Senior Credit Agreement GS Credit Agreement Total Year Ending December 31, Term Revolver Term 2021 ( current ) $ 19,442 $ — $ — $ 19,442 2022 38,884 — — 38,884 2023 221,091 — 102,623 323,714 Total $ 279,417 $ — $ 102,623 $ 382,040 |
Schedule of Maximum Net Leverage Ratios By Period | The table below sets forth the maximum permitted Total Net Leverage Ratio for the indicated test periods: Test Period Ending Total Net Leverage Ratio Maximum Permitted December 31, 2020 7.75 : 1.00 March 31, 2021 7.71 : 1.00 June 30, 2021 7.44 : 1.00 September 30, 2021 7.19 : 1.00 December 31, 2021 7.00 : 1.00 March 31, 2022 6.75 : 1.00 June 30, 2022 6.72 : 1.00 September 30, 2022 to December 31, 2022 6.50 : 1.00 Each test period thereafter 5.50 : 1.00 |
INCOME TAXES - (Tables)
INCOME TAXES - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Components of consolidated income tax expense (benefit) for the years ended December 31, 2020, 2019, and 2018 was as follows: For the Year Ended December 31, (in thousands) 2020 2019 2018 U.S. current income tax expense (benefit) Federal $ 4,766 $ (11) $ 29 State and local 3,173 75 418 Total current income tax expense $ 7,939 $ 64 $ 447 U.S. deferred income tax expense (benefit) Federal $ 3,875 $ 1,920 $ (2,541) State and local (915) (1,154) (396) Total deferred income tax expense (benefit) $ 2,960 $ 766 (2,937) Total income tax expense (benefit) $ 10,899 $ 830 $ (2,490) |
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of the consolidated income tax expense (benefit) at the statutory U.S. federal tax rate to actual consolidated income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018: For the Year Ended December 31, (in thousands) 2020 2019 2018 U.S. federal statutory (benefit) $ 17,211 $ (6,879) $ (4,268) Non-controlling interests (5,626) — — Earnings as dual-member LLC — — 1,643 State and local income taxes, net 1,140 (1,564) (2) Excess tax benefits pursuant to ASU 2016-09 (37) 309 140 Valuation allowance changes (2,945) 9,302 (66) Intangible assets 1,056 — — Nondeductible items 233 125 86 Tax credits (283) (323) (123) Other, net 150 (140) 100 Income tax expense (benefit) $ 10,899 $ 830 $ (2,490) |
Schedule of Deferred Tax Assets and Liabilities | The significant components of consolidated deferred income taxes were as follows: As of December 31, (in thousands) 2020 2019 Deferred Tax Assets: Accruals and reserves $ 1,499 $ 1,566 Intangible assets 49,558 53,600 Net operating loss carryforwards 436 4,114 Interest limitation carryforwards 6,295 9,266 Other 2,115 1,877 Gross deferred tax assets 59,903 70,423 Valuation allowance (7,200) (10,144) Total deferred tax assets 52,703 60,279 Deferred Tax Liabilities: Prepaid assets (973) (521) Investments in partnership (19) (5,408) Property and equipment (5,014) (4,693) Total deferred tax liabilities (6,006) (10,622) Net deferred tax assets $ 46,697 $ 49,657 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Commitments Under Non-Cancelable Operating Leases | Future minimum lease commitments under non-cancelable operating leases with initial or remaining terms in excess of one year are as follows at December 31, 2020: (in thousands) Due In Amount Due 2021 $ 1,356 2022 1,307 2023 1,356 2024 1,394 2025 1,367 Thereafter 2,388 Total $ 9,168 |
STOCKHOLDERS' DEFICIT - (Tables
STOCKHOLDERS' DEFICIT - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of Equity Structure | The equity structure of the Company was as follows as of December 31, 2020 and 2019: (shares in thousands) December 31, 2020 December 31, 2019 Authorized Issued Outstanding Authorized Issued Outstanding Common stock, par value $0.001 1,000,000 67,842 67,391 1,000,000 67,512 67,061 Preferred stock, par value $0.001 100,000 — — 100,000 — — |
SHARE-BASED COMPENSATION - (Tab
SHARE-BASED COMPENSATION - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Equity-Based Compensation | For the years ended December 31, 2020, 2019, and 2018, share-based compensation was recognized by plan as follows: Year Ended December 31, (in thousands) 2020 2019 2018 Plan: 2018 Equity Incentive Plan $ 2,430 $ 2,385 $ 187 Earnout Incentive Plan — — — 2014 Management Incentive Plan — 1,267 1,462 Total $ 2,430 $ 3,652 $ 1,649 |
Summary of Cumulative Activity for the 2018 Plan | A summary of the activity in stock units for the 2018 Plan that occurred during the years ended December 31, 2020, 2019 and 2018 is as follows: 6,685,696 Common stock authorized for the 2018 Plan (2,044,815) Stock options granted in December 2018 7,558 Stock option grants forfeited in 2018 (202,200) RSUs granted in 2018 4,446,239 Common stock available for issuance under the 2018 Plan at December 31, 2018 326,173 Stock option grants forfeited in 2019 (36,657) RSUs granted in 2019 60,421 RSUs forfeited in 2019 4,796,176 Common stock available for issuance under the 2018 Plan at December 31, 2019 (15,000) Stock options granted in 2020 220,045 Stock option grants forfeited in 2020 (1,031,740) RSUs granted in 2020 (128,624) RSU granted in 2020 with performance goals that have not been determined 21,277 RSUs forfeited in 2020 3,862,134 Common stock available for issuance under the 2018 Plan at December 31, 2020 |
Schedule of Stock Options Roll Forward | Details about the time-based equity-classified stock options granted under the plan are as follows: Weighted- Options for average Weighted-average Aggregate number of exercise remaining intrinsic value shares price contractual terms (in thousands) Outstanding, January 1, 2018 — — Granted in 2018 2,044,815 $ 6.95 Exercised in 2018 — — Forfeited in 2018 (7,558) $ 6.95 Expired in 2018 — — Outstanding, December 31, 2018 2,037,257 $ 6.95 9.6 years $ 2,139 Granted in 2019 — — Exercised in 2019 — — Forfeited or expired in 2019 (326,173) $ 6.95 Outstanding, December 31, 2019 1,711,084 $ 6.95 8.6 years $ — Granted in 2020 15,000 $ 2.47 Exercised in 2020 — — Forfeited or expired in 2020 (220,045) $ 6.95 Outstanding, December 31, 2020 1,506,039 $ 6.91 7.8 years $ 203 Vested and Expected to Vest 1,506,039 $ 6.91 7.8 years $ 203 Exercisable at December 31, 2020 1,125,755 $ 6.95 7.8 years $ 101 |
Summary of Valuation Assumptions for Stock Options | The table below presents the assumptions used to calculate the fair value of the stock options issued in 2020 and 2018: 2020 2018 Expected volatility 94 % 30 % Risk-free interest rate 0.5 % 2.4 % Expected term (years) 7.5 4.3 Dividend yield — % — % Exercise price $2.47 $6.95 |
Schedule of RSU Activity | Underlying Weighted-average (in thousands) Common Grant-date Aggregate Shares Fair Value Fair Value Service-based vesting: Unvested at January 1, 2018 — Granted in 2018 107,142 $ 7.00 $ 750 Unvested at December 31, 2018 107,142 Granted in 2019 36,657 $ 6.82 $ 250 Vested in 2019 (53,571) $ 171 Forfeited in 2019 (36,657) $ 6.82 Unvested at December 31, 2019 53,571 Granted in 2020 892,142 $ 2.93 $ 2,617 Forfeited in 2020 (21,277) $ 2.35 Vested in 2020 (328,035) $ 1,150 Unvested at December 31, 2020 596,401 Performance-based vesting: Unvested at January 1, 2018 — Granted in 2018 95,057 $ 10.52 $ 1,000 Unvested at December 31, 2018 95,057 Forfeited in 2019 (23,674) $ 10.52 Unvested at December 31, 2019 71,383 Granted in 2020 (a) (b) 139,598 $ 2.56 $ 358 Forfeited in 2020 (71,383) $ 10.52 Unvested at December 31, 2020 139,598 (a) Includes only the portions of grants for which the performance goals have been determined and communicated to the grant recipient. For the portions of any grants for which the required performance goals have not been determined and communicated to the grant recipient, a grant has not yet occurred for accounting purposes. (b) Does not include a liability-classified performance-based RSU award with an estimated fair value of $0.8 million. |
FAIR VALUE - (Tables)
FAIR VALUE - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Liabilities Measured on Recurring Basis | The following table shows a reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs that are classified as Level 3 in the fair value hierarchy for the years ended December 31, 2020, 2019, and 2018: (in thousands) Warrant Liability Contingent Consideration Balance at January 1, 2018 $ 8,701 $ — Extinguishment of GS 1.8% warrant liability (Note 10) (8,701) — GS 2.2% warrant liability (Note 10) 12,182 — Adjustment to fair value included in earnings 591 — Extinguishment of GS 2.2% warrant liability (Note 10) (12,701) — Change in fair value of warrant liability (72) — Earnout liabilities arising from business combinations (Note 4) — 980 Balance at December 31, 2018 — 980 Adjustment to fair value included in earnings — (620) Balance at December 31, 2019 — 360 Adjustment to fair value included in earnings — (360) Balance at December 31, 2020 $ — $ — |
SEGMENT INFORMATION - (Tables)
SEGMENT INFORMATION - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Information on segments and reconciliations to consolidated revenues, consolidated income (loss) from operations, and consolidated depreciation and amortization are as follows for the years presented: Year Ended December 31, (in thousands) 2020 2019 2018 Revenues: Consumer Payments $ 367,816 $ 330,599 $ 347,013 Commercial Payments 20,922 25,980 27,056 Integrated Partners 15,604 15,275 1,753 Consolidated revenues $ 404,342 $ 371,854 $ 375,822 Income (loss) from operations: Consumer Payments $ 38,392 $ 32,237 $ 47,002 Commercial Payments 923 (891) (952) Integrated Partners 1,404 725 (1,969) Corporate (19,858) (24,887) (27,688) Consolidated income from operations $ 20,861 $ 7,184 $ 16,393 Depreciation and amortization: Consumer Payments $ 35,002 $ 32,842 $ 17,945 Commercial Payments 306 323 557 Integrated Partners 4,299 4,398 145 Corporate 1,168 1,529 1,093 Consolidated depreciation and amortization $ 40,775 $ 39,092 $ 19,740 |
Reconciliation of Revenue from Segments to Consolidated | A reconciliation of total income from operations of reportable segments to the Company's net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. is provided in the following table: Year Ended December 31, (in thousands) 2020 2019 2018 Total income from operations of reportable segments $ 40,719 $ 32,071 $ 44,081 Less Corporate (19,858) (24,887) (27,688) Less interest expense (44,839) (40,653) (29,935) Less debt modification and extinguishment expense (1,899) — (2,043) Add gain on sale of business 107,239 — — Add (less) other, net 596 710 (4,741) Income tax (expense) benefit (10,899) (830) 2,490 Net income (loss) 71,059 (33,589) (17,836) Less earnings attributable to non-controlling interests (45,398) — — Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. $ 25,661 $ (33,589) $ (17,836) |
Reconciliation of Assets from Segment to Consolidated | Total assets, all located in the United States, by reportable segment reconciled to consolidated assets as of December 31, 2020 and 2019 were as follows: (in thousands) As of December 31, 2020 2019 Consumer Payments $ 261,675 $ 274,136 Commercial Payments 81,106 45,152 Integrated Partners 3,991 74,386 Corporate 71,057 70,831 Total consolidated assets $ 417,829 $ 464,505 |
EARNINGS (LOSS) PER COMMON SH_2
EARNINGS (LOSS) PER COMMON SHARE - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Common Share | The following tables set forth the computation of the Company's earnings (loss) per common share: Year Ended December 31, (in thousands except per share amounts) 2020 2019 2018 Numerator: Net income (loss) $ 71,059 $ (33,589) $ (17,836) Less: Income allocated to participating securities — — (45) Less: Earnings attributable to non-controlling interests (45,398) — — Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. $ 25,661 $ (33,589) $ (17,881) Basic: Weighted-average common stock shares outstanding 67,158 67,086 61,607 Basic earnings (loss) per common share $ 0.38 $ (0.50) $ (0.29) Fully Diluted: Weighted-average common stock shares outstanding 67,158 67,086 61,607 Weighted-average dilutive common shares outstanding 105 — — Weighted-average common shares for fully-diluted earnings (loss) per share 67,263 67,086 61,607 Fully-diluted earnings (loss) per common share $ 0.38 $ (0.50) $ (0.29) |
Schedule of Antidilutive Securities | Anti-dilutive securities that were excluded from earnings (loss) per common share that could potentially be dilutive in future periods are as follows: As of December 31, (in thousands) 2020 2019 2018 Stock options (1) 1,506 1,711 2,091 Restricted stock units (1) 280 125 202 Liability-classified restricted stock units (1) 107 — — Earnout incentive awards subject to vesting (2) — — 95 Warrants on common stock (3) 3,556 3,556 5,731 Options and warrants issued to underwriter (3) 600 600 600 Earnout incentive awards subject to issuance (2) — — 9,705 Total 6,049 5,992 18,424 (1) Granted under the 2018 Equity Incentive Plan. See Note 15 , Share - Based Compensation . (2) Plan expired on December 31, 2019 with no shares issued. (3) Issued by M.I. Acquisitions prior to July 25, 2018. See Note 14 , Stockholders ' Deficit . |
SELECTED QUARTERLY FINANCIAL _2
SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED) - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information (Unaudited) | (in thousands, except per share amounts) 2020 1Q 2Q 3Q 4Q Year Revenues $ 96,933 $ 92,356 $ 108,962 $ 106,091 $ 404,342 Operating expenses 93,374 88,325 101,920 99,862 383,481 Income from operations 3,559 4,031 7,042 6,229 20,861 Interest expense (10,315) (11,668) (13,471) (9,385) (44,839) Gain on sale of business — — 107,239 — 107,239 Debt extinguishment and modification expenses (376) — (1,523) — (1,899) Other, net 30 194 190 182 596 Income tax (benefit) expense (1,233) 415 13,737 (2,020) 10,899 Net (loss) income (5,869) (7,858) 85,740 (954) 71,059 Income attributable to non-controlling interests — — (45,348) (50) (45,398) Net (loss) income attributable to stockholders of Priority Technology Holdings, Inc. $ (5,869) (7,858) $ 40,392 $ (1,004) $ 25,661 Basic and diluted (loss) income per common share (1) $ (0.09) $ (0.12) $ 0.60 $ (0.01) $ 0.38 (in thousands, except per share amounts) 2019 1Q 2Q 3Q 4Q Year Revenues $ 87,646 $ 92,142 $ 93,883 $ 98,183 $ 371,854 Operating expenses 86,680 89,706 91,158 97,126 364,670 Income from operations 966 2,436 2,725 1,057 7,184 Interest expense (9,363) (10,776) (10,463) (10,051) (40,653) Other, net 227 138 158 187 710 Income tax (benefit) expense (1,724) 5,928 (1,736) (1,638) 830 Net loss $ (6,446) $ (14,130) $ (5,844) $ (7,169) $ (33,589) Basic and diluted loss per common share (1) $ (0.10) $ (0.21) $ (0.09) $ (0.11) $ (0.50) (1) May not be additive to the net (loss) income per common share amounts for the year due to the calculation provision of ASC 260, Earnings Per Share . |
NATURE OF BUSINESS AND ACCOUN_3
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Corporate History and Recapitalization (Details) $ in Millions | Jul. 25, 2018USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2020segment |
Business Acquisition [Line Items] | |||
Number of reportable segments | segment | 3 | ||
MI Acquisitions | |||
Business Acquisition [Line Items] | |||
IPO proceeds | $ 54 | ||
MI Acquisitions | |||
Business Acquisition [Line Items] | |||
Total consideration transferred | $ 49.4 |
NATURE OF BUSINESS AND ACCOUN_4
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Allowance for Doubtful Accounts Receivable and Notes Receivable (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Accounts receivable allowance for credit loss | $ 574,000 | $ 803,000 |
Notes receivable allowance for credit loss | $ 467,000 | $ 0 |
NATURE OF BUSINESS AND ACCOUN_5
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Costs Incurred to Develop Software for Internal Use (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Impairment of internal use software | $ 0 | $ 0 | $ 0 |
Software costs capitalized during the period | 7,100,000 | 8,200,000 | 6,700,000 |
Capitalized computer software, net | 16,400,000 | 14,900,000 | |
Capitalized computer software, amortization | $ 5,300,000 | $ 4,100,000 | $ 2,600,000 |
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years |
NATURE OF BUSINESS AND ACCOUN_6
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Non-Controlling Interests (Details) | 12 Months Ended |
Dec. 31, 2020subsidiary | |
Accounting Policies [Abstract] | |
Number of non-controlling interest subsidiaries | 3 |
NATURE OF BUSINESS AND ACCOUN_7
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Merchant Portfolio | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 3 years 6 months |
Merchant Portfolio | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 5 years |
Merchant Portfolio | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 6 years |
Customer relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 10 years |
Customer relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 15 years |
ISO relationships | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 11 years |
ISO relationships | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 25 years |
Residual buyouts | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 1 year |
Residual buyouts | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 9 years |
Technology-Based Intangible Assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 6 years |
Technology-Based Intangible Assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 7 years |
Trade Names And Non-Compete Agreements | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 5 years |
Trade Names And Non-Compete Agreements | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, useful lives | 12 years |
NATURE OF BUSINESS AND ACCOUN_8
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Accrued Residual Commissions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | |||
Residual commission expenses | $ 240.2 | $ 213.8 | $ 230.2 |
NATURE OF BUSINESS AND ACCOUN_9
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Share-based Compensation (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 2 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Award vesting period | 3 years |
NATURE OF BUSINESS AND ACCOU_10
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Measurements of Certain Equity Investments (Details) - USD ($) $ in Millions | Dec. 31, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Amount borrowed under loan and loan commitment agreement | $ 3.5 | $ 3.5 |
Maximum loan commitment available for future issuance | $ 10 | $ 10 |
NATURE OF BUSINESS AND ACCOU_11
NATURE OF BUSINESS AND ACCOUNTING POLICIES - Concentration of Risk (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue from Contract with Customer | Merchant Portability Rights | |||
Product Information [Line Items] | |||
Concentration risk, percentage | 21.00% | 18.00% | 14.00% |
DISPOSAL OF BUSINESS - Narrativ
DISPOSAL OF BUSINESS - Narrative (Details) - USD ($) $ in Thousands | Sep. 25, 2020 | Sep. 01, 2020 | Sep. 30, 2020 |
Syndicate of Lenders | Line of Credit | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Debt prepayment | $ 106,500 | $ 106,500 | |
Priority Real Estate Technology LLC (PRET) | Integrated Partners, Rent Payment Component | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Tax effect of disposal | $ 12,300 | ||
Net proceeds from buyer | 179,416 | ||
Working capital adjustment paid in cash | 584 | ||
Reduction of operating leases future minimum payments due | $ 500 | ||
Priority Real Estate Technology LLC (PRET) | Integrated Partners, Rent Payment Component | Parent | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Return of invested capital after sale | 71,800 | ||
Net proceeds from buyer | 51,400 | ||
Priority Real Estate Technology LLC (PRET) | Integrated Partners, Rent Payment Component | Noncontrolling Interest | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Return of invested capital after sale | 5,700 | ||
Net proceeds from buyer | $ 45,100 |
DISPOSAL OF BUSINESS - Schedule
DISPOSAL OF BUSINESS - Schedule of Sale Details (Details) - USD ($) $ in Thousands | Sep. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Assets sold: | |||
Gain on sale of business, net | $ 0 | $ 0 | |
Priority Real Estate Technology LLC (PRET) | Integrated Partners, Rent Payment Component | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gross cash consideration from buyer | $ 180,000 | ||
Less working capital adjustment paid in cash | (584) | ||
Net proceeds from buyer | 179,416 | ||
Transaction costs incurred | (5,383) | ||
Assets sold: | |||
Intangible assets | (62,158) | ||
Other assets sold, net of obligations assumed | (716) | ||
Goodwill assigned to business sale | (2,683) | ||
Other intangible assets | (1,237) | ||
Gain on sale of business, net | $ 107,239 |
DISPOSAL OF BUSINESS - Schedu_2
DISPOSAL OF BUSINESS - Schedule of Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Revenues | $ 106,091 | $ 108,962 | $ 92,356 | $ 96,933 | $ 98,183 | $ 93,883 | $ 92,142 | $ 87,646 | $ 404,342 | $ 371,854 | $ 375,822 | |
Total income from operations of reportable segments | 6,229 | 7,042 | 4,031 | 3,559 | 1,057 | 2,725 | 2,436 | 966 | 20,861 | 7,184 | 16,393 | |
Net income | (954) | 85,740 | (7,858) | (5,869) | 71,059 | (33,589) | (17,836) | |||||
Net (loss) income | $ (1,004) | $ 40,392 | $ (7,858) | $ (5,869) | $ (7,169) | $ (5,844) | $ (14,130) | $ (6,446) | $ 25,661 | $ (33,589) | $ (17,836) | |
Basic and diluted (USD per share) | $ (0.01) | $ 0.60 | $ (0.12) | $ (0.09) | $ (0.11) | $ (0.09) | $ (0.21) | $ (0.10) | $ 0.38 | $ (0.50) | ||
Effective income tax rate | 13.30% | 2.50% | 12.50% | |||||||||
Gain on sale of business, net | $ 0 | $ 0 | ||||||||||
Pro Forma | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Effective income tax rate | 5.50% | 2.50% | ||||||||||
Priority Real Estate Technology LLC (PRET) | Integrated Partners, Rent Payment Component | ||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||||||
Revenues | $ 12,042 | $ 11,694 | ||||||||||
Total income from operations of reportable segments | 1,825 | 2,275 | ||||||||||
Net income | 1,725 | 2,218 | ||||||||||
Net (loss) income | $ 1,725 | $ 2,218 | ||||||||||
Basic and diluted (USD per share) | $ 0.03 | $ 0.03 | ||||||||||
Gain on sale of business, net | $ 107,239 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | |
Revenue from Contract with Customer [Abstract] | |||||
Interest income from secured loans issued | $ 800 | $ 600 | $ 600 | ||
Contract liabilities, net (current) | $ 1,494 | $ 1,912 | $ 1,800 | $ 2,200 |
REVENUE - Contract with Custome
REVENUE - Contract with Customer Liability (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2019 | Jan. 01, 2018 |
Revenue from Contract with Customer [Abstract] | ||||
Contract liabilities, net (current) | $ 1,494 | $ 1,912 | $ 1,800 | $ 2,200 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
REVENUES | $ 106,091 | $ 108,962 | $ 92,356 | $ 96,933 | $ 98,183 | $ 93,883 | $ 92,142 | $ 87,646 | $ 404,342 | $ 371,854 | $ 375,822 |
Merchant card fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
REVENUES | 377,346 | 339,450 | 343,791 | ||||||||
Outsourced services and other services | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
REVENUES | 23,103 | 28,712 | 29,099 | ||||||||
Equipment | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
REVENUES | $ 3,893 | $ 3,692 | $ 2,932 |
ASSET ACQUISITIONS, ASSET CON_2
ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS - Asset Acquisitions Narrative (Details) - USD ($) | Mar. 15, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||||||
Non-controlling interest | $ 0 | $ 5,654,000 | ||||||
Borrowings under revolving line of credit | 7,000,000 | 14,000,000 | $ 8,000,000 | |||||
Accruals for asset acquisition contingent consideration | $ 0 | 8,332,000 | 2,133,000 | $ 0 | ||||
Priority Real Estate Technology LLC (PRET) | ||||||||
Business Acquisition [Line Items] | ||||||||
Gain on sale attributable to noncontrolling interest | $ 45,100,000 | |||||||
YapStone, Inc | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments for asset acquisitions | $ 65,000,000 | |||||||
Non-controlling interest | 5,700,000 | |||||||
Asset acquisition, software license agreement | 1,000,000 | |||||||
Asset acquisition, service agreement | $ 1,200,000 | |||||||
Residual Portfolio Rights Acquired | ||||||||
Business Acquisition [Line Items] | ||||||||
Asset acquisition, intangible assets | $ 15,200,000 | |||||||
Asset acquisition, contingent consideration | $ 6,400,000 | |||||||
Asset acquisition, contingent consideration, period | 3 years | |||||||
Payment for contingent consideration | $ 2,100,000 | |||||||
Contingent consideration liability, current | $ 2,100,000 | |||||||
Direct Connect Merchant Services, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments for asset acquisitions | $ 44,800,000 | |||||||
Asset acquisition, contingent consideration | 7,300,000 | |||||||
Accruals for asset acquisition contingent consideration | $ 0 | |||||||
Term Loan | Line of Credit | Syndicate of Lenders | Residual Portfolio Rights Acquired | ||||||||
Business Acquisition [Line Items] | ||||||||
Borrowings under revolving line of credit | $ 5,000,000 | |||||||
Revolving Credit Facility | Residual Portfolio Rights Acquired | ||||||||
Business Acquisition [Line Items] | ||||||||
Borrowings under revolving line of credit | $ 10,000,000 |
ASSET ACQUISITIONS, ASSET CON_3
ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS - Asset Assignments and Contributions Narrative (Details) | Jan. 31, 2019 | Oct. 31, 2019agreement | Feb. 28, 2019USD ($) | Dec. 31, 2020USD ($) | Mar. 31, 2020 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||||||
Number of reseller agreements | agreement | 2 | ||||||
Reseller arrangement, cash consideration paid | $ 0 | ||||||
Reseller arrangement, cash consideration received | 0 | ||||||
Reseller arrangement period | 5 years | ||||||
Accumulated amortization | $ 148,708,000 | 148,708,000 | $ 122,049,000 | ||||
Sellers eligible amount to receive | $ 4,500,000 | ||||||
Redeemable noncontrolling interest, equity, preferred, annual preferred yield percent | 6.00% | ||||||
Priority Hospitality Technology, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Net income attributable to noncontrolling interest | 250,000 | ||||||
Merchant Portfolio | |||||||
Business Acquisition [Line Items] | |||||||
Accumulated costs and estimated remaining consideration, additions | 6,200,000 | ||||||
Accumulated costs and estimated remaining consideration | 11,100,000 | 11,100,000 | 1,100,000 | ||||
Accumulated amortization | $ 2,800,000 | $ 2,800,000 | $ 100,000 | ||||
Useful Life | 3 years 6 months | ||||||
Chief Executive Officer And Chairman | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of eTab owned by chief executive office and chairman prior to transaction | 80.00% | ||||||
Percentage of PHT preferred stock owned by president, chief executive officer and chairman | 83.30% |
ASSET ACQUISITIONS, ASSET CON_4
ASSET ACQUISITIONS, ASSET CONTRIBUTIONS, AND BUSINESS COMBINATIONS - Business Combinations in 2018 (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 30 Months Ended | |||||||
Aug. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 109,515 | $ 106,832 | $ 109,515 | $ 109,515 | $ 101,532 | ||||||
Common stock issued for business combinations | 0 | 0 | 5,000 | ||||||||
Impairment loss | $ 800 | ||||||||||
Contingent consideration | 184 | 0 | 0 | 184 | |||||||
Priority PayRight Health Solutions, LLC | PayRight | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Equity interest in acquiree, carrying value | 1,100 | $ 1,100 | $ 1,100 | ||||||||
PayRight | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Equity interest in acquiree, fair value | $ 300 | ||||||||||
RadPad and Landlord Station | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 2,200 | ||||||||||
Intangible assets acquired | 2,100 | ||||||||||
Total consideration transferred | 4,300 | ||||||||||
Payments to acquire business | 3,900 | ||||||||||
Debt incurred | 400 | ||||||||||
Goodwill, measurement period adjustments | $ 200 | ||||||||||
PPS Northeast | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | 1,900 | ||||||||||
Intangible assets acquired | 2,000 | ||||||||||
Total consideration transferred | 3,500 | ||||||||||
Payments to acquire business | 500 | ||||||||||
Common stock issued for business combinations | $ 3,000 | ||||||||||
Business acquisition, shares issued (in shares) | 285,117 | ||||||||||
Contingent consideration maximum | $ 500 | ||||||||||
Contingent consideration | $ 400 | 200 | 200 | ||||||||
Business acquisition, contingent consideration, period | 2 years | ||||||||||
PPS Tech | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 3,400 | ||||||||||
Intangible assets acquired | 2,200 | ||||||||||
Total consideration transferred | 5,000 | ||||||||||
Payments to acquire business | 3,000 | ||||||||||
Common stock issued for business combinations | $ 2,000 | ||||||||||
Business acquisition, shares issued (in shares) | 190,078 | ||||||||||
Contingent consideration maximum | $ 1,000 | ||||||||||
Contingent consideration | $ 600 | $ 200 | $ 400 | ||||||||
Business acquisition, contingent consideration, period | 2 years | ||||||||||
Subsidiaries | PayRight | Priority PayRight Health Solutions, LLC | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Goodwill | $ 300 | ||||||||||
Intangible assets acquired | 600 | ||||||||||
Total consideration transferred | 900 | ||||||||||
Payments to acquire business | 500 | ||||||||||
Common stock issued for business combinations | 300 | ||||||||||
Other consideration transferred | $ 100 |
SETTLEMENT ASSETS AND OBLIGAT_3
SETTLEMENT ASSETS AND OBLIGATIONS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||
Merchant reserves held by sponsor banks | $ 103.8 | $ 79.8 | |
Provision for merchant losses | $ 4.1 | $ 3.1 | $ 3.1 |
SETTLEMENT ASSETS AND OBLIGAT_4
SETTLEMENT ASSETS AND OBLIGATIONS - Schedule of Settlement Assets and Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Settlement Assets: | ||
Settlement assets | $ 753 | $ 533 |
Settlement Obligations: | ||
Settlement obligations | 72,878 | 37,789 |
Card settlements due to merchants | ||
Settlement Obligations: | ||
Settlement obligations | 0 | 44 |
Due To ACH Payees | ||
Settlement Obligations: | ||
Settlement obligations | 72,878 | 37,745 |
Card settlements due from merchants, net of estimated losses | ||
Settlement Assets: | ||
Settlement assets | 753 | 446 |
Card settlements due from processors | ||
Settlement Assets: | ||
Settlement assets | $ 0 | $ 87 |
NOTES RECEIVABLE - Narrative (D
NOTES RECEIVABLE - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Receivables [Abstract] | ||
Notes receivable | $ 7,717,000 | $ 5,700,000 |
Notes receivable, average interest rate | 13.10% | 12.40% |
Notes receivable allowance for credit loss | $ 467,000 | $ 0 |
NOTES RECEIVABLE - Schedule of
NOTES RECEIVABLE - Schedule of Principal Contract Maturities (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Receivables [Abstract] | ||
2021 | $ 2,657,000 | |
2022 | 1,463,000 | |
2023 | 132,000 | |
2024 | 3,970,000 | |
Total principal due | 8,222,000 | |
Discount (long-term) | (38,000) | |
Notes receivable allowance for credit loss | (467,000) | $ 0 |
Notes receivable | $ 7,717,000 | $ 5,700,000 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | ||||
Goodwill | $ 106,832 | $ 109,515 | $ 109,515 | $ 101,532 |
Consumer Payments | ||||
Goodwill [Line Items] | ||||
Goodwill | 106,832 | 106,832 | ||
Integrated Partners | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 0 | $ 2,683 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill Acquired (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||
Goodwill | $ 109,515 | $ 101,532 |
Disposal of goodwill in Integrated Partners reporting unit | (2,683) | |
Goodwill | $ 106,832 | 109,515 |
PayRight | ||
Goodwill [Roll Forward] | ||
Goodwill acquired from business combinations | 298 | |
RadPad/Landlord Station | ||
Goodwill [Roll Forward] | ||
Goodwill acquired from business combinations | 2,385 | |
PPS Northeast | ||
Goodwill [Roll Forward] | ||
Goodwill acquired from business combinations | 1,920 | |
PPS Tech | ||
Goodwill [Roll Forward] | ||
Goodwill acquired from business combinations | $ 3,380 |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 33,100 | $ 32,400 | $ 14,700 | |
Intangible assets, net | 98,057 | 182,826 | ||
Impairment charges for intangible asset | 1,753 | 0 | $ 0 | |
Merchant portfolios | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | 10,000 | 69,800 | ||
Residual buyouts | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | 3,500 | 19,900 | ||
Residual buyouts | Consumer Payments | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible assets, net | $ 2,200 | |||
Intangible asset, fair value | $ 500 | |||
Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | 1,000 | |||
YapStone, Inc | Merchant portfolios | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets acquired | $ 68,700 |
GOODWILL AND OTHER INTANGIBLE_6
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Assets And Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 248,518 | $ 304,875 |
Intangible assets, accumulated amortization | (148,708) | (122,049) |
Accumulated allowance for impairment | (1,753) | 0 |
Total | 98,057 | 182,826 |
Merchant portfolios | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 55,816 | 114,554 |
Intangible assets, accumulated amortization | (19,471) | (12,655) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 40,740 | 40,740 |
Intangible assets, accumulated amortization | (30,267) | (25,836) |
Residual buyouts | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 116,112 | 112,731 |
Intangible assets, accumulated amortization | (72,659) | (59,796) |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 3,390 | 3,390 |
Intangible assets, accumulated amortization | (3,390) | (3,390) |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,870 | 2,870 |
Intangible assets, accumulated amortization | (1,651) | (1,273) |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 14,390 | 15,390 |
Intangible assets, accumulated amortization | (13,951) | (12,758) |
ISO relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 15,200 | 15,200 |
Intangible assets, accumulated amortization | $ (7,319) | $ (6,341) |
GOODWILL AND OTHER INTANGIBLE_7
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible Asset Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Merchant portfolios | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 5 years |
Merchant portfolios | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 6 years |
Merchant portfolios | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 5 years 6 months |
Residual buyouts | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 1 year |
Residual buyouts | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 9 years |
Residual buyouts | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 6 years 9 months 18 days |
Non-compete agreements | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 3 years |
Non-compete agreements | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 3 years |
Trade names | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 5 years |
Trade names | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 12 years |
Trade names | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 11 years 7 months 6 days |
Technology | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 6 years |
Technology | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 7 years |
Technology | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 6 years 1 month 6 days |
ISO relationships | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 11 years |
ISO relationships | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 25 years |
ISO relationships | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 23 years 8 months 12 days |
Customer relationships | Minimum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 10 years |
Customer relationships | Maximum | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 15 years |
Customer relationships | Weighted Average | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Useful Life | 11 years |
GOODWILL AND OTHER INTANGIBLE_8
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization Expense By Year (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 28,216 | |
2022 | 27,066 | |
2023 | 21,280 | |
2024 | 10,126 | |
2025 | 3,671 | |
Thereafter | 7,698 | |
Total | $ 98,057 | $ 182,826 |
PROPERTY, EQUIPMENT AND SOFTW_3
PROPERTY, EQUIPMENT AND SOFTWARE - (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software, gross | $ 63,581 | $ 56,695 | |
Less accumulated depreciation | (40,706) | (33,177) | |
Property, equipment, and software, net | 22,875 | 23,518 | |
Depreciation expense | 7,700 | 6,600 | $ 5,100 |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software, gross | $ 2,795 | 2,787 | |
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 2 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 7 years | ||
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software, gross | $ 10,216 | 10,101 | |
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 7 years | ||
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software, gross | $ 44,320 | 37,440 | |
Computer software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 3 years | ||
Computer software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 5 years | ||
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, equipment and software, gross | $ 6,250 | $ 6,367 | |
Leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | 10 years |
ACCOUNTS PAYABLE AND ACCRUED _3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES - (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Accounts Payable [Abstract] | ||
Accounts payable | $ 4,308 | $ 6,968 |
Accrued card network fees | $ 8,041 | $ 6,950 |
LONG-TERM DEBT AND WARRANT LI_3
LONG-TERM DEBT AND WARRANT LIABILITY - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Total debt obligations | $ 382,040 | $ 495,479 |
Less: current portion of long-term debt | (19,442) | (4,007) |
Less: unamortized debt discounts and deferred financing costs | (4,725) | (5,894) |
Total long-term debt, net | $ 357,873 | $ 485,578 |
Line of Credit | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Actual interest rate | 6.65% | 6.71% |
Line of Credit | Goldman Sachs Specialty Lending Group | ||
Debt Instrument [Line Items] | ||
Actual interest rate | 12.50% | 10.50% |
Line of Credit | Revolving Credit Facility | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 0 | |
Line of Credit | LIBOR | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Applicable margin | 6.50% | 5.00% |
Line of Credit | Payment-in-Kind Interest Rate | Goldman Sachs Specialty Lending Group | ||
Debt Instrument [Line Items] | ||
Applicable margin | 5.00% | 5.00% |
Senior Term Loan, Maturing January 3, 2023 | Senior Notes | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Interest rate, LIBOR floor | 1.00% | |
Actual interest rate | 7.50% | 6.71% |
Total debt obligations | $ 279,417 | $ 388,837 |
Senior Term Loan, Maturing January 3, 2023 | Senior Notes | LIBOR | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Applicable margin | 6.50% | 5.00% |
Senior Term Loan, Maturing January 3, 2023 | Line of Credit | Revolving Credit Facility | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 0 | $ 11,500 |
Senior Term Loan, Maturing January 3, 2023 | Line of Credit | Letter of Credit | Syndicate of Lenders | ||
Debt Instrument [Line Items] | ||
Total debt obligations | 25,000 | 25,000 |
Subordinated Term Loan, Maturing July 3, 2023 | Subordinated Debt | Goldman Sachs Specialty Lending Group | ||
Debt Instrument [Line Items] | ||
Total debt obligations | $ 102,623 | $ 95,142 |
LONG-TERM DEBT AND WARRANT LI_4
LONG-TERM DEBT AND WARRANT LIABILITY - Long Term Debt Narrative (Details) - Line of Credit - USD ($) | Dec. 31, 2020 | Mar. 18, 2020 | Jan. 31, 2017 | Jan. 03, 2017 |
Syndicate of Lenders | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 225,000,000 | |||
Term Loan | Syndicate of Lenders | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | $ 397,500,000 | $ 200,000,000 | 200,000,000 | |
Term Loan | Goldman Sachs Specialty Lending Group | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt | 80,000,000 | 80,000,000 | 80,000,000 | |
Revolving Credit Facility | Syndicate of Lenders | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 |
LONG-TERM DEBT AND WARRANT LI_5
LONG-TERM DEBT AND WARRANT LIABILITY - Amendments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||
Mar. 31, 2020 | Dec. 31, 2018 | Jan. 31, 2018 | Jan. 31, 2017 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 18, 2020 | Nov. 14, 2017 | Jan. 03, 2017 | |
Debt Instrument [Line Items] | ||||||||||||||
Debt discount | $ 4,725,000 | $ 4,725,000 | $ 5,894,000 | |||||||||||
Write-off of deferred loan costs and discount | 0 | $ 1,523,000 | $ 0 | $ 376,000 | 1,899,000 | |||||||||
Amortization of debt issuance costs and discounts | 2,396,000 | $ 1,667,000 | $ 1,418,000 | |||||||||||
Maximum allowable loan advances | $ 5,000,000 | |||||||||||||
Syndicate of Lenders | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum borrowing capacity | $ 225,000,000 | |||||||||||||
Syndicate of Lenders | Term Loan | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Face amount of debt | $ 200,000,000 | 397,500,000 | 397,500,000 | 200,000,000 | ||||||||||
Additional borrowings | $ 0 | $ 130,000,000 | $ 67,500,000 | |||||||||||
Debt discount | 0 | 300,000 | 400,000 | 3,700,000 | 0 | 300,000 | ||||||||
Write-off of deferred loan costs and discount | 1,800,000 | |||||||||||||
Amortization of debt issuance costs and discounts | 400,000 | 1,200,000 | 800,000 | |||||||||||
Capitalized incremental deferred finance costs | 2,700,000 | 100,000 | 700,000 | 3,300,000 | $ 2,700,000 | $ 100,000 | ||||||||
Syndicate of Lenders | Revolving Credit Facility | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum borrowing capacity | 25,000,000 | 25,000,000 | 25,000,000 | $ 25,000,000 | 25,000,000 | |||||||||
Goldman Sachs Specialty Lending Group | Term Loan | Line of Credit | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Face amount of debt | $ 80,000,000 | $ 80,000,000 | $ 80,000,000 | $ 80,000,000 | ||||||||||
Additional borrowings | $ 0 | $ 0 | $ 0 |
LONG-TERM DEBT AND WARRANT LI_6
LONG-TERM DEBT AND WARRANT LIABILITY - Senior Credit Agreement Narrative (Details) - USD ($) | Mar. 18, 2020 | Dec. 31, 2020 | Nov. 14, 2017 | Jan. 31, 2017 | Jan. 03, 2017 |
Debt Instrument [Line Items] | |||||
Maximum allowable loan advances | $ 5,000,000 | ||||
Syndicate of Lenders | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 225,000,000 | ||||
Syndicate of Lenders | Line of Credit | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | $ 25,000,000 | |
Unused commitment fee percentage | 0.50% | ||||
Minimum | Syndicate of Lenders | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
Interest rate, LIBOR floor | 1.00% |
LONG-TERM DEBT AND WARRANT LI_7
LONG-TERM DEBT AND WARRANT LIABILITY - GS Credit Agreement Narrative (Details) - Goldman Sachs Specialty Lending Group - Line of Credit | Mar. 18, 2020 |
Debt Instrument [Line Items] | |
Effective interest rate | 5.00% |
Applicable Margin | |
Debt Instrument [Line Items] | |
Applicable margin | 5.00% |
LONG-TERM DEBT AND WARRANT LI_8
LONG-TERM DEBT AND WARRANT LIABILITY - Senior Credit Agreement Additional Narrative (Details) - Line of Credit - USD ($) $ in Millions | Sep. 25, 2020 | Sep. 14, 2020 | Aug. 15, 2020 | Jul. 16, 2020 | Jun. 16, 2020 | Mar. 18, 2020 | Sep. 30, 2020 | Mar. 18, 2022 | Mar. 17, 2021 |
Syndicate of Lenders | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest rate increases | 0.50% | 0.50% | 0.50% | 1.00% | |||||
Periodic principal payment | $ 100 | ||||||||
Principal prepayment | $ 100 | ||||||||
Additional principal repayment | 6.5 | ||||||||
Debt prepayment | $ 106.5 | $ 106.5 | |||||||
Syndicate of Lenders | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Penalty percentage on default principal prepayments | 1.00% | ||||||||
Goldman Sachs Specialty Lending Group | Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Penalty percentage on default principal prepayments | 2.00% | 4.00% |
LONG-TERM DEBT AND WARRANT LI_9
LONG-TERM DEBT AND WARRANT LIABILITY - Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
2021 (current) | $ 19,442 | |
2022 | 38,884 | |
2023 | 323,714 | |
Total Debt | 382,040 | $ 495,479 |
Term Loan | Syndicate of Lenders | Line of Credit | ||
Debt Instrument [Line Items] | ||
2021 (current) | 19,442 | |
2022 | 38,884 | |
2023 | 221,091 | |
Total Debt | 279,417 | |
Term Loan | Goldman Sachs Specialty Lending Group | Line of Credit | ||
Debt Instrument [Line Items] | ||
2021 (current) | 0 | |
2022 | 0 | |
2023 | 102,623 | |
Total Debt | 102,623 | |
Revolving Credit Facility | Syndicate of Lenders | Line of Credit | ||
Debt Instrument [Line Items] | ||
2021 (current) | 0 | |
2022 | 0 | |
2023 | 0 | |
Total Debt | $ 0 |
LONG-TERM DEBT AND WARRANT L_10
LONG-TERM DEBT AND WARRANT LIABILITY - PIK Interest Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||
Payment-in-kind interest | $ 8,573 | $ 5,126 | $ 4,897 |
Goldman Sachs Specialty Lending Group | Term Loan | Line of Credit | |||
Debt Instrument [Line Items] | |||
Line of credit | 80,000 | ||
Interest payable | 22,600 | 15,100 | |
Payment-in-kind interest | $ 7,500 | $ 5,100 |
LONG-TERM DEBT AND WARRANT L_11
LONG-TERM DEBT AND WARRANT LIABILITY - Interest Expense and Amortization of Deferred Loan Costs and Discounts Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||||||||
Less interest expense | $ 9,385 | $ 13,471 | $ 11,668 | $ 10,315 | $ 10,051 | $ 10,463 | $ 10,776 | $ 9,363 | $ 44,839 | $ 40,653 | $ 29,900 |
Amortization of debt issuance costs and discounts | $ 2,400 | 1,700 | $ 1,400 | ||||||||
Term Loan | Delayed Draw | Goldman Sachs Specialty Lending Group | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, commitment fee amount | $ 400 | ||||||||||
Maximum borrowing capacity | $ 70,000 |
LONG-TERM DEBT AND WARRANT L_12
LONG-TERM DEBT AND WARRANT LIABILITY - Debt Extinguishment and Debt Modification Expenses Narrative (Details) - USD ($) $ in Thousands | Sep. 25, 2020 | Sep. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||||
Amortization of debt issuance costs and discounts | $ 2,396 | $ 1,667 | $ 1,418 | |||||
Syndicate of Lenders | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt prepayment | $ 106,500 | $ 106,500 | ||||||
Debt prepayment cost, unamortized loan costs and discount expensed | $ 1,500 | |||||||
Term Loan | Syndicate of Lenders | Line of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortization of debt issuance costs and discounts | $ 400 | $ 1,200 | $ 800 |
LONG-TERM DEBT AND WARRANT L_13
LONG-TERM DEBT AND WARRANT LIABILITY - Covenants (Details) | Jan. 01, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||||||
Net leverage ratio | 7.75 | ||||||||
Scenario, Forecast | |||||||||
Debt Instrument [Line Items] | |||||||||
Net leverage ratio | 5.50 | 6.50 | 6.72 | 6.75 | 7 | 7.19 | 7.44 | 7.71 |
LONG-TERM DEBT AND WARRANT L_14
LONG-TERM DEBT AND WARRANT LIABILITY - Goldman Sachs Warrant Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 25, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 24, 2018 | Jan. 11, 2018 | Jan. 10, 2018 | Dec. 31, 2017 | Jan. 02, 2017 |
Debt Instrument [Line Items] | |||||||||
Warrants, exercise price (in dollars per share) | $ 10.30 | ||||||||
Cash paid for cancellation of warrants | $ 0 | $ 0 | $ 12,701 | ||||||
GS Warrants | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrant liability | $ 12,800 | $ 8,700 | |||||||
Cash paid for cancellation of warrants | $ 12,700 | ||||||||
Common Class A | GS Warrants | |||||||||
Debt Instrument [Line Items] | |||||||||
Warrants, percentage of outstanding stock available for purchase | 2.20% | 1.80% | 1.00% | ||||||
Warrants, term | 7 years | ||||||||
Warrants, exercise price (in dollars per share) | $ 0 |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 25, 2018 | |
Operating Loss Carryforwards [Line Items] | ||||
Deferred income taxes, net | $ 46,697 | $ 49,657 | $ 47,500 | |
Effective income tax rate | 13.30% | 2.50% | 12.50% | |
Deferred tax assets, valuation allowance | $ 7,200 | $ 10,144 | ||
Tax Cuts and Jobs Act of 2017, interest deduction limitation | 21,200 | $ 11,000 | ||
Federal | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforward | 26,500 | |||
State | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforward | $ 6,200 | $ 19,500 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
U.S. current income tax expense (benefit) | |||||||||||
Federal | $ 4,766 | $ (11) | $ 29 | ||||||||
State and local | 3,173 | 75 | 418 | ||||||||
Total current income tax expense | 7,939 | 64 | 447 | ||||||||
U.S. deferred income tax expense (benefit) | |||||||||||
Federal | 3,875 | 1,920 | (2,541) | ||||||||
State and local | (915) | (1,154) | (396) | ||||||||
Total deferred income tax expense (benefit) | 2,960 | 766 | (2,937) | ||||||||
Total income tax expense (benefit) | $ (2,020) | $ 13,737 | $ 415 | $ (1,233) | $ (1,638) | $ (1,736) | $ 5,928 | $ (1,724) | $ 10,899 | $ 830 | $ (2,490) |
INCOME TAXES - Income Tax Benef
INCOME TAXES - Income Tax Benefit Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||||||||||
U.S. federal statutory (benefit) | $ 17,211 | $ (6,879) | $ (4,268) | ||||||||
Non-controlling interests | (5,626) | 0 | 0 | ||||||||
Earnings as dual-member LLC | 0 | 0 | 1,643 | ||||||||
State and local income taxes, net | 1,140 | (1,564) | (2) | ||||||||
Excess tax benefits pursuant to ASU 2016-09 | (37) | 309 | 140 | ||||||||
Valuation allowance changes | (2,945) | 9,302 | (66) | ||||||||
Intangible assets | 1,056 | 0 | 0 | ||||||||
Nondeductible items | 233 | 125 | 86 | ||||||||
Tax credits | (283) | (323) | (123) | ||||||||
Other, net | 150 | (140) | 100 | ||||||||
Total income tax expense (benefit) | $ (2,020) | $ 13,737 | $ 415 | $ (1,233) | $ (1,638) | $ (1,736) | $ 5,928 | $ (1,724) | $ 10,899 | $ 830 | $ (2,490) |
INCOME TAXES - Schedule of Comp
INCOME TAXES - Schedule of Components of Deferred Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Jul. 25, 2018 |
Deferred Tax Assets: | |||
Accruals and reserves | $ 1,499 | $ 1,566 | |
Intangible assets | 49,558 | 53,600 | |
Net operating loss carryforwards | 436 | 4,114 | |
Interest limitation carryforwards | 6,295 | 9,266 | |
Other | 2,115 | 1,877 | |
Gross deferred tax assets | 59,903 | 70,423 | |
Valuation allowance | (7,200) | (10,144) | |
Total deferred tax assets | 52,703 | 60,279 | |
Deferred Tax Liabilities: | |||
Prepaid assets | (973) | (521) | |
Investments in partnership | (19) | (5,408) | |
Property, plant, and equipment | (5,014) | (4,693) | |
Total deferred tax liabilities | (6,006) | (10,622) | |
Net deferred tax assets | $ 46,697 | $ 49,657 | $ 47,500 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Commitments [Line Items] | |||
Rent expense | $ 2.5 | $ 2 | $ 1.9 |
Minimum processing fees to be paid over next four years | $ 7 | ||
Minimum | |||
Other Commitments [Line Items] | |||
Operating leases, terms | 2 years | ||
Maximum | |||
Other Commitments [Line Items] | |||
Operating leases, terms | 16 years |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Future Minimum Lease Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 1,356 |
2022 | 1,307 |
2023 | 1,356 |
2024 | 1,394 |
2025 | 1,367 |
Thereafter | 2,388 |
Total | $ 9,168 |
RELATED PARTY MATTERS - Narrati
RELATED PARTY MATTERS - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | |||
Amount borrowed under loan and loan commitment agreement | $ 3.5 | $ 3.5 | |
Maximum loan commitment available for future issuance | $ 10 | $ 10 | |
Annual interest rate | 12.00% | ||
Expenses from transactions with related party | $ 1.1 | ||
Underwriting commissions capitalized to additional paid in capital | $ 8 | ||
Call-right purchase price | $ 10.30 | ||
Members Of Priority Holdings LLC | |||
Related Party Transaction [Line Items] | |||
Due from related parties | $ 0.2 | $ 0.2 |
STOCKHOLDERS' DEFICIT - Schedul
STOCKHOLDERS' DEFICIT - Schedule of Equity Structure (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Equity [Abstract] | |||
Common shares, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Common shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | |
Common stock issued (in shares) | 67,842,204 | 67,512,167 | |
Common stock, shares outstanding (in shares) | 67,390,980 | 67,060,943 | 67,038,304 |
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 | |
Preferred stock shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
STOCKHOLDERS' DEFICIT - Busines
STOCKHOLDERS' DEFICIT - Business Combination and Recapitalization (Details) $ / shares in Units, $ in Millions | Jul. 25, 2018USD ($)businessCombinationacquisitionshares | Jun. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2020businessCombinationvoteshares | Dec. 31, 2019shares | Dec. 31, 2018shares |
Class of Stock [Line Items] | |||||
Common units (in shares) | 4,600,000 | ||||
Number of business combinations | businessCombination | 2 | 2 | |||
Business acquisition, number of warrants per unit (in shares) | 1 | ||||
Common stock, shares outstanding (in shares) | 67,390,980 | 67,060,943 | 67,038,304 | ||
Number of votes per share | vote | 1 | ||||
Stock repurchased during period (in shares) | 451,224 | ||||
Treasury stock acquired (in dollars per share) | $ / shares | $ 5.29 | ||||
Stock repurchased during period | $ | $ 2.4 | ||||
Preferred stock authorized (in shares) | 100,000,000 | 100,000,000 | |||
MI Acquisitions | |||||
Class of Stock [Line Items] | |||||
Business acquisition, shares issued (in shares) | 60,100,000 | 60,071,200 | |||
Total consideration transferred | $ | $ 49.4 | ||||
Two Business Acquisition | |||||
Class of Stock [Line Items] | |||||
Business acquisition, shares issued (in shares) | 500,000 | 475,195 | |||
Number of business combinations | acquisition | 2 | ||||
2018 Equity Incentive Plan | |||||
Class of Stock [Line Items] | |||||
Issued during period (in shares) | 3,000,000 | ||||
Common Stockholders of MI Acquisitions | MI Acquisitions | |||||
Class of Stock [Line Items] | |||||
Business acquisition, shares issued (in shares) | 4,918,138 | ||||
Number of shares converted (in shares) | 4,900,000 | ||||
MI Acquisitions Founders | MI Acquisitions | |||||
Class of Stock [Line Items] | |||||
Business acquisition, shares issued (in shares) | 453,210 | 699,454 | |||
Payments to acquire business | $ | $ 2.1 | ||||
Business acquisition, units issued (in shares) | 421,107 | ||||
Business acquisition, number of shares per unit (in shares) | 1 | ||||
Business acquisition, number of shares forfeited (in shares) | 174,863 | ||||
Sellers Of Priority | MI Acquisitions | |||||
Class of Stock [Line Items] | |||||
Business acquisition, shares issued (in shares) | 874,317 |
STOCKHOLDERS' DEFICIT - Warrant
STOCKHOLDERS' DEFICIT - Warrants and Purchase Options Issued by MI Acquisitions (Details) - $ / shares | Jul. 24, 2018 | Dec. 31, 2020 | Feb. 28, 2019 | Aug. 31, 2018 |
Class of Stock [Line Items] | ||||
Warrants and rights, number of shares allowed to purchase (in shares) | 400,000 | |||
Warrants, exercise price (in dollars per share) | $ 10.30 | |||
Warrants outstanding (in shares) | 2,200,000 | |||
Number of securities called by each warrant (in shares) | 0.192 | |||
MI Acquisitions Warrants | ||||
Class of Stock [Line Items] | ||||
Warrants and rights, number of shares allowed to purchase (in shares) | 5,731,216 | |||
Warrants, exercise price (in dollars per share) | $ 11.50 | |||
Warrants, term | 5 years | |||
Number of days after business combination, start of exercisable period | 30 days | |||
MI Acquisitions Warrants, Public | ||||
Class of Stock [Line Items] | ||||
Warrants outstanding (in shares) | 5,310,109 | 5,310,109 | ||
Warrants, redemption price (in dollars per share) | $ 0.01 | |||
Warrants, minimum stock price (in dollars per share) | $ 16 | |||
Number of trading days equal or greater to price threshold within period | 20 days | |||
Number of trading days period for price threshold | 30 days | |||
MI Acquisitions Warrants, Private | ||||
Class of Stock [Line Items] | ||||
Warrants and rights, number of shares allowed to purchase (in shares) | 421,107 | |||
Warrants outstanding (in shares) | 421,107 | |||
MI Acquisitions Purchase Options | ||||
Class of Stock [Line Items] | ||||
Warrants and rights, number of shares allowed to purchase (in shares) | 300,000 | |||
Warrants, exercise price (in dollars per share) | $ 12 | |||
Warrants, term | 5 years | |||
Call-right, aggregate purchase price (in dollars per share) | $ 100 |
STOCKHOLDERS' DEFICIT - Busin_2
STOCKHOLDERS' DEFICIT - Business Combination and Recapitalization Costs (Details) - USD ($) $ in Millions | Jul. 25, 2018 | Dec. 31, 2019 |
Class of Stock [Line Items] | ||
Transaction costs | $ 13.3 | $ 3.6 |
Additional Paid-In Capital | ||
Class of Stock [Line Items] | ||
Transaction costs | $ 9.7 |
STOCKHOLDERS' DEFICIT - Equity
STOCKHOLDERS' DEFICIT - Equity Events for Priority Holdings, LLC that Occurred Prior to July 25, 2018 (Details) - USD ($) $ in Millions | Feb. 23, 2018 | Jan. 19, 2018 | Jan. 17, 2018 | Apr. 30, 2017 | Jul. 25, 2018 | Dec. 31, 2019 | Dec. 31, 2020 | Jan. 31, 2017 |
Class of Stock [Line Items] | ||||||||
Common shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 | ||||||
Common stock issued (in shares) | 67,512,167 | 67,842,204 | ||||||
Member distributions | $ 7.1 | |||||||
Common Class A | ||||||||
Class of Stock [Line Items] | ||||||||
Redemptions of common stock (in shares) | 96,999 | 445,410 | 69,450 | |||||
Redemptions of common stock | $ 4.2 | $ 39 | $ 3 | |||||
Common unit repurchase obligation, purchase price | $ 12.2 | |||||||
Reclass of common unit repurchase obligation | $ 9.2 | |||||||
January 17, 2018 (1st Redemption) | Common Class A | ||||||||
Class of Stock [Line Items] | ||||||||
Redemptions of common stock (in shares) | 115,751 | |||||||
Redemptions of common stock | $ 5 | |||||||
January 17, 2018 (2nd Redemption) | Common Class A | ||||||||
Class of Stock [Line Items] | ||||||||
Redemptions of common stock (in shares) | 295,834 | |||||||
Redemptions of common stock | $ 25.9 | |||||||
Parent Company | ||||||||
Class of Stock [Line Items] | ||||||||
Ownership percentage | 100.00% |
SHARE-BASED COMPENSATION - Narr
SHARE-BASED COMPENSATION - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2020USD ($)share-basedCompensationPlan | Dec. 31, 2019USD ($)share-basedCompensationPlan | Dec. 31, 2018USD ($)share-basedCompensationPlan | |
Share-based Payment Arrangement [Abstract] | |||
Number of share-based compensation plans | share-basedCompensationPlan | 3 | 3 | 3 |
Equity-classified and liability-classified share-based compensation | $ 2,430,000 | $ 3,652,000 | $ 1,649,000 |
Equity-based compensation expense | 2,430,000 | 3,652,000 | 1,649,000 |
Equity-based compensation expense capitalized | 0 | ||
Tax benefit recognized for equity-based compensation expense | $ 400,000 | $ 500,000 | $ 100,000 |
SHARE-BASED COMPENSATION - Sche
SHARE-BASED COMPENSATION - Schedule of Equity-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 2,430,000 | $ 3,652,000 | $ 1,649,000 |
2018 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 2,430,000 | 2,385,000 | 187,000 |
Earnout Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | 0 | 0 | 0 |
2014 Management Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity-based compensation expense | $ 0 | $ 1,267,000 | $ 1,462,000 |
SHARE-BASED COMPENSATION - The
SHARE-BASED COMPENSATION - The 2018 Equity Incentive Plan (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSU grants with performance goals that have not been determined (in shares) | (128,624) | ||||
2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 6,685,696 | ||||
Stock options granted (in shares) | (15,000) | 0 | (2,044,815) | ||
Stock options grants forfeited (in shares) | 7,558 | ||||
RSU grants (in shares) | (1,031,740) | (36,657) | (202,200) | ||
Stock option grants forfeited in 2019 (in shares) | 220,045 | 326,173 | |||
RSUs forfeited (in shares) | 21,277 | 60,421 | |||
Common shares available for issuance under the plan at end of period (in shares) | 4,796,176 | 3,862,134 | 4,796,176 | 4,446,239 | |
2018 Equity Incentive Plan | Restricted Stock Units (RSUs) - Performance Based With Market Condition | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
RSU grants (in shares) | (95,057) | (139,598,000) | (95,057,000) | ||
RSUs forfeited (in shares) | 71,383,000 | 23,674,000 | |||
Liability-classified award fair value | $ 0.8 |
SHARE-BASED COMPENSATION - Stoc
SHARE-BASED COMPENSATION - Stock Options Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 2,430 | $ 3,652 | $ 1,649 | |
2018 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 10 years | |||
Exercised (in shares) | 0 | 0 | 0 | |
Equity-based compensation expense | $ 2,430 | $ 2,385 | $ 187 | |
Stock option expense, not yet recognized | $ 400 | |||
Granted (in shares) | 15,000 | 0 | 2,044,815 | |
2018 Equity Incentive Plan | Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 50.00% | |||
2018 Equity Incentive Plan | Tranche Two | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
2018 Equity Incentive Plan | Tranche Three | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 25.00% | |||
Employee Stock Option | 2018 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 800 | $ 2,000 | $ 200 | |
Share-based awards, compensation cost recognition period (in years) | 8 months 12 days |
SHARE-BASED COMPENSATION- Stock
SHARE-BASED COMPENSATION- Stock Options Activity (Details) - 2018 Equity Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding, beginning balance (in shares) | 1,711,084 | 2,037,257 | 0 |
Granted (in shares) | 15,000 | 0 | 2,044,815 |
Exercised (in shares) | 0 | 0 | 0 |
Forfeited (in shares) | (7,558) | ||
Expired (in shares) | 0 | ||
Forfeited or expired (in shares) | (220,045) | (326,173) | |
Outstanding, ending balance (in shares) | 1,506,039 | 1,711,084 | 2,037,257 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding, beginning balance, weighted-average exercise price (in dollars per share) | $ 6.95 | $ 6.95 | $ 0 |
Granted, weighted-average exercise price (in dollars per share) | 2.47 | 0 | 6.95 |
Exercised, weighted-average exercise price (in dollars per share) | 0 | 0 | 0 |
Forfeited, weighted-average exercise price (in dollars per share) | 6.95 | 6.95 | 6.95 |
Expired, weighted-average exercise price (in dollars per share) | 0 | ||
Outstanding, ending balance, weighted-average exercise price (in dollars per share) | $ 6,910 | $ 6.95 | $ 6.95 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |||
Outstanding, weighted-average remaining contractual terms (in years) | 7 years 9 months 18 days | 8 years 7 months 6 days | 9 years 7 months 6 days |
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | |||
Outstanding, beginning balance, aggregate intrinsic value | $ 0 | $ 2,139 | |
Outstanding, ending balance, aggregate intrinsic value | $ 203 | $ 0 | $ 2,139 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | |||
Vested and expected to vest (in shares) | 1,506,039 | ||
Vested and expected to vest, weighted average exercise price (in dollars per share) | $ 6.91 | ||
Vested and expected to vest, weighted average remaining contractual term (in years) | 7 years 9 months 18 days | ||
Vested and expected to vest, aggregate intrinsic value | $ 203 | ||
Exercisable (in shares) | 1,125,755 | ||
Exercisable, weighted average exercise price (in dollars per share) | $ 6.95 | ||
Exercisable, weighted average remaining contractual term (in years) | 7 years 9 months 18 days | ||
Exercisable, aggregate intrinsic value | $ 101 |
SHARE-BASED COMPENSATION - Assu
SHARE-BASED COMPENSATION - Assumptions Used to Calculate the Fair Value of Stock Options (Details) - 2018 Equity Incentive Plan - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 94.00% | 30.00% |
Risk-free interest rate | 0.50% | 2.40% |
Expected term (years) | 7 years 6 months | 4 years 3 months 18 days |
Dividend yield | 0.00% | 0.00% |
Exercise price | $ 2.47 | $ 6.95 |
SHARE-BASED COMPENSATION - Rest
SHARE-BASED COMPENSATION - Restricted Stock Units Activity (Details) - 2018 Equity Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Restricted stock units, number of shares issued (in shares) | 1,031,740 | 36,657 | 202,200 | ||
Restricted stock units, number of shares forfeited (in shares) | (21,277) | (60,421) | |||
Stock option expense, not yet recognized | $ 400 | ||||
Restricted Stock Units (RSUs) - Service Based | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Restricted stock units, unvested, beginning of period | 53,571,000 | 107,142,000 | 0 | ||
Restricted stock units, number of shares issued (in shares) | 892,142,000 | 36,657,000 | 107,142,000 | ||
Restricted stock units, number of shares vested (in shares) | (328,035,000) | (53,571,000) | |||
Restricted stock units, number of shares forfeited (in shares) | (21,277,000) | (36,657,000) | |||
Restricted stock units, unvested, end of period | 53,571,000 | 596,401,000 | 53,571,000 | 107,142,000 | |
Restricted stock units, grant-date fair value (in dollars per share) | $ 2,930 | $ 6,820 | $ 7,000 | ||
Restricted stock units, forfeiture fair value (in dollars per share) | $ 2,350 | $ 6,820 | |||
Restricted stock units, grants fair value | $ 2,617 | $ 250 | $ 750 | ||
Restricted stock units, vesting fair value | 1,150 | $ 171 | |||
Stock option expense, not yet recognized | $ 1,600 | ||||
Share-based awards, compensation cost recognition period (in years) | 2 years 2 months 12 days | ||||
Restricted Stock Units (RSUs) - Performance Based With Market Condition | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Restricted stock units, unvested, beginning of period | 71,383,000 | 95,057,000 | 0 | ||
Restricted stock units, number of shares issued (in shares) | 95,057 | 139,598,000 | 95,057,000 | ||
Restricted stock units, number of shares forfeited (in shares) | (71,383,000) | (23,674,000) | |||
Restricted stock units, unvested, end of period | 71,383,000 | 139,598,000 | 71,383,000 | 95,057,000 | |
Restricted stock units, grant-date fair value (in dollars per share) | $ 2,560 | $ 10,520 | |||
Restricted stock units, forfeiture fair value (in dollars per share) | $ 10,520 | $ 10,520 | |||
Restricted stock units, grants fair value | $ 358 | $ 1,000 | |||
Liability-classified award fair value | 800 | ||||
Stock option expense, not yet recognized | $ 200 | ||||
Share-based awards, compensation cost recognition period (in years) | 2 years 7 months 6 days | ||||
Accrued compensation expense | $ 300 | ||||
Restricted Stock Units (RSUs) - Performance Based With Market Condition | Subsequent Event | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||||
Liability-classified award fair value | $ 800 |
SHARE-BASED COMPENSATION - Th_2
SHARE-BASED COMPENSATION - The Earnout Incentive Plan (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 2,430,000 | $ 3,652,000 | $ 1,649,000 | |
Earnout Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 0 | $ 0 | $ 0 | |
Earnout Incentive Plan | Restricted Stock Units (RSUs) | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued during period (in shares) | 0 | |||
Restricted stock units, number of shares issued (in shares) | 95,057 | |||
Restricted stock units, grant-date fair value (in dollars per share) | $ 10.52 | |||
2018 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units, number of shares issued (in shares) | 1,031,740 | 36,657 | 202,200 | |
Equity-based compensation expense | $ 2,430,000 | $ 2,385,000 | $ 187,000 | |
2018 Equity Incentive Plan | Restricted Stock Units (RSUs) - Performance Based With Market Condition | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock units, number of shares issued (in shares) | 95,057 | 139,598,000 | 95,057,000 | |
Restricted stock units, grant-date fair value (in dollars per share) | $ 2,560 | $ 10,520 |
SHARE-BASED COMPENSATION - Th_3
SHARE-BASED COMPENSATION - The 2014 Management Incentive Plan (Details) - USD ($) shares in Millions | Jul. 25, 2018 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity-based compensation expense | $ 2,430,000 | $ 3,652,000 | $ 1,649,000 | |
2014 Management Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued during period (in shares) | 3 | |||
Equity-based compensation expense | 1,300,000 | $ 1,500,000 | ||
Restricted stock units, unrecognized compensation cost | 0 | |||
Restricted stock units, total grant-date fair value | $ 0 |
EMPLOYEE BENEFIT PLANS - Narrat
EMPLOYEE BENEFIT PLANS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Postemployment Benefits [Abstract] | |||
Company contributions to the plan | $ 1.3 | $ 1.3 | $ 0.9 |
FAIR VALUE - Narrative (Details
FAIR VALUE - Narrative (Details) $ in Thousands | Jul. 25, 2018USD ($)businessCombination | Dec. 31, 2020USD ($)businessCombination | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 24, 2018USD ($) | Dec. 31, 2017USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash paid for cancellation of warrants | $ 0 | $ 0 | $ 12,701 | |||
Change in fair value of warrant liability | 0 | 0 | (3,458) | |||
Contingent consideration | $ 0 | 0 | 184 | |||
Number of business combinations | businessCombination | 2 | 2 | ||||
Change in fair value of contingent consideration | $ 360 | 620 | 0 | |||
Notes receivable, fair value | 7,700 | 5,700 | ||||
Total debt obligations | 382,040 | 495,479 | ||||
Contingent Consideration | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Change in fair value of warrant liability | 0 | |||||
Change in fair value of contingent consideration | (400) | 600 | ||||
Senior Term Loan, Maturing January 3, 2023 | Syndicate of Lenders | Senior Notes | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Long-term debt, fair value | 278,000 | 381,000 | ||||
Total debt obligations | $ 279,417 | 388,837 | ||||
GS Warrants | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash paid for cancellation of warrants | $ 12,700 | |||||
Change in fair value of warrant liability | $ 100 | |||||
Warrant liability | $ 12,800 | $ 8,700 | ||||
PPS Tech and PPS Northeast | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent consideration | $ 400 | $ 1,000 | ||||
Business Acquisition One | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent consideration range of outcomes, percent, low | 15.00% | |||||
Contingent consideration range of outcomes, percent, high | 35.00% | |||||
Business Acquisition Two | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Contingent consideration range of outcomes, percent, low | 5.00% | |||||
Contingent consideration range of outcomes, percent, high | 80.00% |
FAIR VALUE - Rollforward (Detai
FAIR VALUE - Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 25, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Change in fair value of warrant liability | $ 0 | $ 0 | $ (3,458) | |
Warrant Liability | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 0 | 0 | 8,701 | |
Adjustment to fair value included in earnings | 0 | 0 | 591 | |
Change in fair value of warrant liability | (72) | |||
Earnout liabilities arising from business combinations (Note 4) | 0 | |||
Ending balance | 0 | 0 | 0 | |
Contingent Consideration | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 360 | 980 | 0 | |
Extinguishment | 0 | |||
Issuance | 0 | |||
Adjustment to fair value included in earnings | (360) | (620) | 0 | |
Change in fair value of warrant liability | 0 | |||
Earnout liabilities arising from business combinations (Note 4) | 980 | |||
Ending balance | $ 0 | $ 360 | 980 | |
GS 1.8% Warrants | Warrant Liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrants, percentage of outstanding stock available for purchase | 1.80% | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Extinguishment | (8,701) | |||
GS 2.2% Warrants | Warrant Liability | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Warrants, percentage of outstanding stock available for purchase | 2.20% | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Extinguishment | (12,701) | |||
Issuance | $ 12,182 |
SEGMENT INFORMATION - Narrative
SEGMENT INFORMATION - Narrative (Details) - segment | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 3 | |
Consumer Payments | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | |
Commercial Payments | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | |
Integrated Partners | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 | |
Commercial Payments | ||
Segment Reporting Information [Line Items] | ||
Number of reportable segments | 1 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues: | |||||||||||
Revenues | $ 106,091 | $ 108,962 | $ 92,356 | $ 96,933 | $ 98,183 | $ 93,883 | $ 92,142 | $ 87,646 | $ 404,342 | $ 371,854 | $ 375,822 |
Operating income (loss): | |||||||||||
Income from operations | $ 6,229 | $ 7,042 | $ 4,031 | $ 3,559 | $ 1,057 | $ 2,725 | $ 2,436 | $ 966 | 20,861 | 7,184 | 16,393 |
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 40,775 | 39,092 | 19,740 | ||||||||
Operating Segments | |||||||||||
Revenues: | |||||||||||
Revenues | 404,342 | 371,854 | 375,822 | ||||||||
Operating income (loss): | |||||||||||
Income from operations | 40,719 | 32,071 | 44,081 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 40,775 | 39,092 | 19,740 | ||||||||
Operating Segments | Consumer Payments | |||||||||||
Revenues: | |||||||||||
Revenues | 367,816 | 330,599 | 347,013 | ||||||||
Operating income (loss): | |||||||||||
Income from operations | 38,392 | 32,237 | 47,002 | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 35,002 | 32,842 | 17,945 | ||||||||
Operating Segments | Commercial Payments | |||||||||||
Revenues: | |||||||||||
Revenues | 20,922 | 25,980 | 27,056 | ||||||||
Operating income (loss): | |||||||||||
Income from operations | 923 | (891) | (952) | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 306 | 323 | 557 | ||||||||
Operating Segments | Integrated Partners | |||||||||||
Revenues: | |||||||||||
Revenues | 15,604 | 15,275 | 1,753 | ||||||||
Operating income (loss): | |||||||||||
Income from operations | 1,404 | 725 | (1,969) | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | 4,299 | 4,398 | 145 | ||||||||
Corporate | |||||||||||
Operating income (loss): | |||||||||||
Income from operations | (19,858) | (24,887) | (27,688) | ||||||||
Depreciation and amortization: | |||||||||||
Depreciation and amortization | $ 1,168 | $ 1,529 | $ 1,093 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciliation of Total Operating Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||||
Total income from operations of reportable segments | $ 6,229 | $ 7,042 | $ 4,031 | $ 3,559 | $ 1,057 | $ 2,725 | $ 2,436 | $ 966 | $ 20,861 | $ 7,184 | $ 16,393 |
Less interest expense | (9,385) | (13,471) | (11,668) | (10,315) | (10,051) | (10,463) | (10,776) | (9,363) | (44,839) | (40,653) | (29,900) |
Less debt modification and extinguishment expense | 0 | ||||||||||
Add gain on sale of business | 0 | 0 | |||||||||
Add (less) other, net | 182 | 190 | 194 | 30 | 187 | 158 | 138 | 227 | 596 | 710 | |
Income tax (expense) benefit | 2,020 | (13,737) | (415) | 1,233 | 1,638 | 1,736 | (5,928) | 1,724 | (10,899) | (830) | 2,490 |
Net income (loss) | (954) | 85,740 | (7,858) | (5,869) | 71,059 | (33,589) | (17,836) | ||||
Less income attributable to redeemable and redeemed non-controlling interests | (50) | (45,348) | 0 | 0 | (45,398) | 0 | 0 | ||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | $ (1,004) | $ 40,392 | $ (7,858) | $ (5,869) | $ (7,169) | $ (5,844) | $ (14,130) | $ (6,446) | 25,661 | (33,589) | (17,836) |
Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total income from operations of reportable segments | 40,719 | 32,071 | 44,081 | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Total income from operations of reportable segments | (19,858) | (24,887) | (27,688) | ||||||||
Less interest expense | (44,839) | (40,653) | (29,935) | ||||||||
Less debt modification and extinguishment expense | (1,899) | 0 | (2,043) | ||||||||
Add gain on sale of business | 107,239 | 0 | 0 | ||||||||
Add (less) other, net | 596 | 710 | (4,741) | ||||||||
Income tax (expense) benefit | (10,899) | (830) | 2,490 | ||||||||
Net income (loss) | 71,059 | (33,589) | (17,836) | ||||||||
Less income attributable to redeemable and redeemed non-controlling interests | (45,398) | 0 | 0 | ||||||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | $ 25,661 | $ (33,589) | $ (17,836) |
SEGMENT INFORMATION - Reconci_2
SEGMENT INFORMATION - Reconciliation of Total Assets by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Assets | $ 417,829 | $ 464,505 |
Operating Segments | Consumer Payments | ||
Segment Reporting Information [Line Items] | ||
Assets | 261,675 | 274,136 |
Operating Segments | Commercial Payments | ||
Segment Reporting Information [Line Items] | ||
Assets | 81,106 | 45,152 |
Operating Segments | Integrated Partners | ||
Segment Reporting Information [Line Items] | ||
Assets | 3,991 | 74,386 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 71,057 | $ 70,831 |
EARNINGS (LOSS) PER COMMON SH_3
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | |||||||
Net income (loss) | $ (954) | $ 85,740 | $ (7,858) | $ (5,869) | $ 71,059 | $ (33,589) | $ (17,836) |
Less: Income allocated to participating securities | 0 | 0 | (45) | ||||
Less income attributable to redeemable and redeemed non-controlling interests | $ (50) | $ (45,348) | $ 0 | $ 0 | (45,398) | 0 | 0 |
Net (loss) income available to common stockholders | $ 25,661 | $ (33,589) | $ (17,881) | ||||
Basic weighted-average common stock shares outstanding (in shares) | 67,158 | 67,086 | 61,607 | ||||
Basic earnings (loss) per common share (in dollars per share) | $ 0.38 | $ (0.50) | $ (0.29) | ||||
Weighted- average dilutive common shares outstanding (in shares) | 105 | 0 | 0 | ||||
Weighted-average common shares for fully-diluted earnings (loss) per share (in shares) | 67,263 | 67,086 | 61,607 | ||||
Diluted (in dollars per share) | $ 0.38 | $ (0.50) | $ (0.29) |
EARNINGS (LOSS) PER COMMON SH_4
EARNINGS (LOSS) PER COMMON SHARE - Schedule of Antidilutive Securities (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 6,049 | 5,992 | 18,424 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 1,506 | 1,711 | 2,091 |
Restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 280 | 125 | 202 |
Liability-classified restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 107 | 0 | 0 |
Earnout incentive awards subject to vesting | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 0 | 95 |
Warrants on common stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 3,556 | 3,556 | 5,731 |
Options and warrants issued to underwriter | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 600 | 600 | 600 |
Earnout incentive awards subject to issuance | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities that were excluded from EPS (in shares) | 0 | 0 | 9,705 |
SELECTED QUARTERLY FINANCIAL _3
SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED) - (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 106,091 | $ 108,962 | $ 92,356 | $ 96,933 | $ 98,183 | $ 93,883 | $ 92,142 | $ 87,646 | $ 404,342 | $ 371,854 | $ 375,822 |
Operating expenses | 99,862 | 101,920 | 88,325 | 93,374 | 97,126 | 91,158 | 89,706 | 86,680 | 383,481 | 364,670 | |
Income from operations | 6,229 | 7,042 | 4,031 | 3,559 | 1,057 | 2,725 | 2,436 | 966 | 20,861 | 7,184 | 16,393 |
Interest expense | (9,385) | (13,471) | (11,668) | (10,315) | (10,051) | (10,463) | (10,776) | (9,363) | (44,839) | (40,653) | (29,900) |
Gain recognized on sale of business | 0 | 107,239 | 0 | 0 | 107,239 | 0 | 0 | ||||
Debt extinguishment and modification expenses | 0 | (1,523) | 0 | (376) | (1,899) | ||||||
Other income (expense), net | 182 | 190 | 194 | 30 | 187 | 158 | 138 | 227 | 596 | 710 | |
Income tax expense (benefit) | (2,020) | 13,737 | 415 | (1,233) | (1,638) | (1,736) | 5,928 | (1,724) | 10,899 | 830 | (2,490) |
Net income (loss) | (954) | 85,740 | (7,858) | (5,869) | 71,059 | (33,589) | (17,836) | ||||
Less income attributable to redeemable and redeemed non-controlling interests | (50) | (45,348) | 0 | 0 | (45,398) | 0 | 0 | ||||
Net income (loss) attributable to stockholders of Priority Technology Holdings, Inc. | $ (1,004) | $ 40,392 | $ (7,858) | $ (5,869) | $ (7,169) | $ (5,844) | $ (14,130) | $ (6,446) | $ 25,661 | $ (33,589) | $ (17,836) |
Basic and diluted (USD per share) | $ (0.01) | $ 0.60 | $ (0.12) | $ (0.09) | $ (0.11) | $ (0.09) | $ (0.21) | $ (0.10) | $ 0.38 | $ (0.50) | |
Diluted (in dollars per share) | $ 0.38 | $ (0.50) | $ (0.29) |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - USD ($) | Mar. 30, 2021 | Mar. 05, 2021 |
Scenario, Forecast | Initial Preferred Stock Financing | ||
Subsequent Event [Line Items] | ||
Preferred stock to be sold as a percent of fully diluted common stock at closing | 2.50% | |
Scenario, Forecast | Initial Preferred Stock Financing | Ares Capital Management (ACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | $ 90,000,000 | |
Scenario, Forecast | Initial Preferred Stock Financing | Ares Alternative Credit Management (AACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | 60,000,000 | |
Scenario, Forecast | Acquisition Preferred Stock Financing | Ares Capital Management (ACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | 30,000,000 | |
Scenario, Forecast | Acquisition Preferred Stock Financing | Ares Alternative Credit Management (AACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | 20,000,000 | |
Scenario, Forecast | Preferred Stock Financing | Ares Capital Management (ACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | 30,000,000 | |
Scenario, Forecast | Preferred Stock Financing | Ares Alternative Credit Management (AACM) | ||
Subsequent Event [Line Items] | ||
Sale of stock, consideration to be received on transaction | $ 20,000,000 | |
Scenario, Forecast | Equity Commitment Letter | ||
Subsequent Event [Line Items] | ||
Warrant, issued, percent of outstanding shares of common stock | 2.50% | |
Preferred stock, dividend rate, percentage per annum of liquidation preference plus LIBOR | 12.00% | |
Preferred stock, dividend rate, percentage per annum of liquidation preference plus LIBOR, payable in cash | 5.00% | |
Preferred stock, period until redeemable, option one | 2 years | |
Preferred stock, redemption percentage, option one | 102.00% | |
Preferred stock, period until redeemable, option two | 3 years | |
Finxera Holdings Inc Merger | Scenario, Forecast | ||
Subsequent Event [Line Items] | ||
Business combination, reduction to stock consideration value if condition waived | $ 10,000,000 | |
Payments to acquire business | $ 425,000,000 | |
Business combination, percent of earnings to reduce consideration | 25.00% | |
Business combination, termination fee | $ 22,500,000 | |
Subsequent Event | Term Loan | Initial Term Loan Facility | Initial Term Loan Facility | ||
Subsequent Event [Line Items] | ||
Face amount of debt | $ 300,000,000 | |
Subsequent Event | Term Loan | Delayed Draw Term Loan Facility | Delayed Draw Term Loan Facility | ||
Subsequent Event [Line Items] | ||
Face amount of debt | 290,000,000 | |
Subsequent Event | Line of Credit | Delayed Draw Term Loan Facility | Revolving Credit Facility | ||
Subsequent Event [Line Items] | ||
Face amount of debt | $ 40,000,000 |