Commonly Used or Defined Terms This section defines key terms and acronyms used throughout the report for clarity and consistency - This section provides definitions for key terms and acronyms used throughout the report, such as '2018 Plan', 'AOCI', 'B2B', 'ESPP', 'GAAP', 'ISO', 'ISV', 'LIBOR', 'MTL', 'NCI', 'SMB', and various credit agreements and company entities7 PART I. FINANCIAL INFORMATION This part presents the company's unaudited consolidated financial statements and management's analysis of financial performance Item 1. Financial Statements This section presents the unaudited consolidated financial statements of Priority Technology Holdings, Inc. for the periods ended June 30, 2025, and December 31, 2024, including balance sheets, statements of operations, changes in stockholders' deficit, cash flows, and comprehensive notes detailing accounting policies, acquisitions, revenues, debt, and segment information Unaudited Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | |---|---|---|---| | Total Assets | $2,027,420 | $1,826,860 | +$200,560 | | Total Liabilities | $2,171,554 | $1,991,885 | +$179,669 | | Total Stockholders' Deficit | $(144,134) | $(165,025) | +$20,891 | | Settlement Assets | $1,125,934 | $940,798 | +$185,136 | | Settlement Obligations | $1,127,266 | $940,213 | +$187,053 | Unaudited Consolidated Statements of Operations and Comprehensive Income (Loss) Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Revenues | $239,812 | $219,867 | $464,442 | $425,586 | | Operating income | $37,350 | $33,174 | $69,975 | $61,197 | | Net income | $10,879 | $994 | $19,147 | $6,187 | | Basic EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | | Diluted EPS | $0.14 | $(0.23) | $0.24 | $(0.33) | Unaudited Consolidated Statements of Changes in Stockholders' Deficit and Non-Controlling Interest Changes in Stockholders' Deficit and NCI (in thousands) | Metric | December 31, 2024 | June 30, 2025 | |---|---|---| | Total Stockholders' Deficit Attributable to Stockholders of Priority | $(166,840) | $(146,115) | | Non-controlling interests in consolidated subsidiaries | $1,815 | $1,981 | | Total Stockholders' Deficit | $(165,025) | $(144,134) | - The total stockholders' deficit decreased by $20,891 thousand from December 31, 2024, to June 30, 2025, primarily driven by net income and equity-classified stock-based compensation, partially offset by treasury stock repurchases for taxes13 Unaudited Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | |---|---|---| | Net cash provided by operating activities | $27,080 | $42,007 | | Net cash used in investing activities | $(21,145) | $(20,598) | | Net cash provided by financing activities | $178,091 | $18,149 | | Net increase in cash and cash equivalents and restricted cash | $184,026 | $39,558 | | Cash and cash equivalents at end of period | $50,564 | $34,626 | | Restricted cash at end of period | $14,205 | $12,625 | | Cash and cash equivalents included in settlement assets | $1,113,121 | $788,530 | Notes to Unaudited Consolidated Financial Statements This section provides detailed disclosures and explanations for the figures presented in the consolidated financial statements, covering significant accounting policies, recent acquisitions, revenue disaggregation, settlement assets, debt obligations, income taxes, stock-based compensation, segment performance, and subsequent events 1. Basis of Presentation and Significant Accounting Policies - Priority Technology Holdings, Inc. operates as a payments and banking fintech, aiming to streamline money management and optimize working capital for businesses through merchant services, payables, and banking/treasury solutions23 Allowance for Expected Losses (in thousands) | Category | June 30, 2025 | December 31, 2024 | |---|---|---| | Accounts Receivable | $5,219 | $3,045 | | Settlement Assets | $8,578 | $7,936 | - Recently issued accounting standards (ASU 2024-01, ASU 2023-09, ASU 2024-03) are expected to impact disclosures but not the Company's results of operations, financial position, or cash flows323334 2. Acquisitions - On January 21, 2025, Priority acquired 100% of Payslate Inc. (Letus business) for $9.0 million, consisting of cash, deferred, and contingent consideration. This acquisition aims to expand the Company's Enterprise Payments rent payment business in the United States and Canada35 Payslate Acquisition Purchase Consideration (in thousands) | Item | Amount | |---|---| | Cash | $4,627 | | Deferred consideration | $4,282 | | Contingent consideration | $104 | | Less: cash acquired | $(175) | | Total purchase consideration, net of cash acquired | $8,838 | - The Letus business contributed $0.4 million in revenue and a net loss of $0.2 million to the Enterprise Payments segment for the six months ended June 30, 202537 3. Revenues Consolidated Revenues by Type (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Merchant card fees | $180,483 | $169,246 | $347,562 | $327,193 | | Money transmission services | $39,273 | $31,340 | $76,722 | $60,484 | | Outsourced services and other services | $16,853 | $16,256 | $33,855 | $31,921 | | Equipment | $3,203 | $3,025 | $6,303 | $5,988 | | Total revenues | $239,812 | $219,867 | $464,442 | $425,586 | Consolidated Revenues by Segment (Six Months Ended June 30, 2025, in thousands) | Segment | Merchant Card Fees | Money Transmission Services | Outsourced and Other Services | Equipment | Total | |---|---|---|---|---|---| | SMB Payments | $306,307 | — | $2,310 | $6,303 | $314,920 | | B2B Payments | $41,257 | — | $7,694 | — | $48,951 | | Enterprise Payments | $1,575 | $76,722 | $24,449 | — | $102,746 | | Eliminations | $(1,577) | — | $(598) | — | $(2,175) | | Total revenues | $347,562 | $76,722 | $33,855 | $6,303 | $464,442 | - Interest income on customer funds, totaling $14.1 million for Q2 2025 and $26.7 million for H1 2025, is included in outsourced services and other services revenue41 4. Settlement Assets and Obligations - Settlement assets and obligations primarily include funds due from merchants, card settlement funds from networks, and customer/subscriber account balances from money transmitter services4851 Consolidated Settlement Assets and Obligations (in thousands) | Category | June 30, 2025 | December 31, 2024 | |---|---|---| | Settlement Assets, net of estimated losses | | | | Card settlements due from merchants, net | $1,481 | $2,587 | | Card settlements due from networks | $11,332 | $12,307 | | MTL Customer cash and cash equivalents (restricted) | $1,113,121 | $924,174 | | Total settlement assets | $1,125,934 | $940,798 | | Settlement Obligations | | | | MTL Customer account obligations | $1,095,509 | $897,497 | | Subscriber account obligations | $17,612 | $26,677 | | Due to customers' payees | $14,145 | $16,039 | | Total settlement obligations | $1,127,266 | $940,213 | - Allowance for estimated losses on settlement assets increased to $8.6 million as of June 30, 2025, from $7.9 million as of December 31, 202453 5. Notes Receivable - Notes receivable increased to $10.0 million as of June 30, 2025, from $8.6 million as of December 31, 2024, with a weighted-average interest rate of 16.0%54 Notes Receivable Activity (in thousands) | Activity | Amount | |---|---| | Balance at January 1, 2025 | $8,557 | | Principal payments (H1 2025) | $(1,798) | | Advances during the period (H1 2025) | $3,228 | | Balance at June 30, 2025 | $9,987 | Notes Receivable Principal Payments Due (in thousands) | Twelve months ending June 30, | Amount | |---|---| | 2026 | $3,283 | | 2027 | $1,867 | | 2028 | $2,402 | | 2029 | $2,435 | | After 2029 | — | | Total | $9,987 | 6. Property, Equipment and Software Property, Equipment and Software, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | |---|---|---| | Computer software | $115,355 | $104,683 | | Equipment | $14,513 | $11,571 | | Leasehold improvements | $2,734 | $2,718 | | Furniture and fixtures | $1,382 | $1,365 | | Less: Accumulated depreciation | $(77,992) | $(70,258) | | Capital work in-progress | $1,537 | $2,398 | | Property, equipment and software, net | $57,529 | $52,477 | Depreciation Expense (in thousands) | Period | 2025 | 2024 | |---|---|---| | Three Months Ended June 30, | $4,075 | $3,428 | | Six Months Ended June 30, | $7,937 | $6,598 | 7. Goodwill and Other Intangible Assets Goodwill by Segment (in thousands) | Segment | June 30, 2025 | December 31, 2024 | |---|---|---| | SMB Payments | $124,139 | $124,139 | | Enterprise Payments | $251,118 | $244,712 | | B2B Payments | $7,240 | $7,240 | | Total | $382,497 | $376,091 | - Goodwill increased by $6.4 million from December 31, 2024, to June 30, 2025, primarily due to the Letus business acquisition ($6.07 million) and foreign currency translation adjustment ($0.34 million)58 Other Intangible Assets, Net (June 30, 2025, in thousands) | Intangible Asset | Gross Carrying Value | Accumulated Amortization | Net Carrying Value | Weighted-average Useful Life | |---|---|---|---|---| | ISO and referral partner relationships | $182,339 | $(55,932) | $126,407 | 14.6 | | Residual buyouts | $143,862 | $(111,247) | $32,615 | 6.2 | | Customer relationships | $110,658 | $(96,522) | $14,136 | 8.4 | | Merchant portfolios | $83,350 | $(67,036) | $16,314 | 6.5 | | Technology | $59,384 | $(30,007) | $29,377 | 8.5 | | Trade names | $7,611 | $(3,525) | $4,086 | 10.9 | | Money transmission licenses | $2,100 | — | $2,100 | Indefinite | | Total | $592,694 | $(367,659) | $225,035 | 9.5 | 8. Debt Obligations Outstanding Debt Obligations (in thousands) | Debt Type | June 30, 2025 | December 31, 2024 | |---|---|---| | Term facility | $935,537 | $945,537 | | Revolving credit facility | — | — | | Total debt obligations | $935,537 | $945,537 | | Less: current portion of long-term debt | $(4,254) | $(9,503) | | Less: unamortized debt discounts and deferred financing costs | $(14,266) | $(15,146) | | Long-term debt, net | $917,017 | $920,888 | Interest Expense (in thousands) | Period | 2025 | 2024 | |---|---|---| | Three Months Ended June 30, | $23,054 | $21,710 | | Six Months Ended June 30, | $46,230 | $42,590 | - The Company was in compliance with all covenants in the 2024 Credit Agreement as of June 30, 202566 9. Income Taxes Consolidated Effective Income Tax Rates | Period | 2025 | 2024 | |---|---|---| | Three Months Ended June 30, | 28.9% | 71.7% | | Six Months Ended June 30, | 25.8% | 45.2% | - The effective tax rates differed from the statutory rate of 21.0% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets and forecasted nondeductible expenses67 - The Company continues to record a full valuation allowance against non-deductible interest expense and net deferred tax assets acquired as part of the Payslate acquisition69 - The Company is evaluating the impact of the 'One Big Beautiful Bill Act' (OBBBA), enacted July 4, 2025, which extends or reinstates certain provisions of the 2017 Tax Cuts and Jobs Act71 10. Stockholders' Deficit - The Board of Directors amended the share repurchase program on May 5, 2025, increasing the authorization to 5,000,000 shares for a total of $40.0 million72 - As of June 30, 2025, the Company had purchased 1,309,374 shares for $5.8 million under this plan, with no shares repurchased since December 202272 11. Stock-based Compensation Stock-based Compensation Expense (in thousands) | Compensation Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Stock-based compensation expense | $1,597 | $1,730 | $3,081 | $3,258 | | Incentive units compensation expense | $79 | $85 | $166 | $178 | | Liability-classified compensation expense | $1,502 | — | $1,502 | — | | ESPP compensation expense | $28 | $14 | $43 | $26 | | Total | $3,206 | $1,829 | $4,792 | $3,462 | - As of June 30, 2025, 3,033,500 shares were available for issuance under the 2018 Equity Incentive Plan75 - The 2021 Employee Stock Purchase Plan (ESPP) was amended on June 13, 2025, to increase available shares by 200,000, with 219,587 shares available as of June 30, 20257778 12. Related Party Transactions - No subsequent activity occurred for the three and six months ended June 30, 2025, regarding the redemption of PHOT preferred units held by the CEO and COO81 13. Commitments and Contingencies - The Company has minimum annual commitments for third-party processing fees of approximately $14.0 million in 2025 and $22.9 million in 202682 - Deferred consideration liabilities related to completed acquisitions increased to $16.4 million as of June 30, 2025, from $10.7 million at December 31, 202486 - A class action lawsuit settlement for $19.5 million was granted final approval, with no contribution from the Company88 14. Fair Value - The carrying value of notes receivable, net, approximated fair value at $10.0 million as of June 30, 2025, and $8.6 million as of December 31, 2024, classified within Level 3 of the fair value hierarchy92 - The fair value of the term facility was estimated at $936.7 million as of June 30, 2025, and $944.4 million as of December 31, 2024, classified within Level 2 of the fair value hierarchy94 15. Segment Information - The Company operates in three reportable segments: SMB Payments, B2B Payments, and Enterprise Payments. Adjusted EBITDA is used by the chief operating decision makers to measure segment profit or loss and allocate resources969799 Segment Adjusted EBITDA (Three Months Ended June 30, 2025, in thousands) | Segment | Revenue from external customers | Segment Adjusted EBITDA | |---|---|---| | SMB Payments | $162,788 | $27,749 | | B2B Payments | $24,668 | $3,770 | | Enterprise Payments | $52,356 | $45,558 | | Total Consolidated | $239,812 | $77,077 | Segment Adjusted EBITDA (Six Months Ended June 30, 2025, in thousands) | Segment | Revenue from external customers | Segment Adjusted EBITDA | |---|---|---| | SMB Payments | $314,029 | $53,454 | | B2B Payments | $48,356 | $7,286 | | Enterprise Payments | $102,057 | $88,001 | | Total Consolidated | $464,442 | $148,741 | 16. Earnings (Loss) per Common Share Earnings (Loss) per Common Share | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |---|---|---|---|---| | Net income (loss) attributable to common stockholders (in thousands) | $10,879 | $(17,629) | $19,147 | $(25,679) | | Basic Earnings (loss) per common share | $0.14 | $(0.23) | $0.24 | $(0.33) | | Diluted Earnings (loss) per share | $0.14 | $(0.23) | $0.24 | $(0.33) | - For the three and six months ended June 30, 2025, the Company had 0.9 million and 1.1 million dilutive securities, respectively, included in diluted EPS. All potentially dilutive securities were anti-dilutive for the same periods in 2024105 17. Subsequent Events - On July 31, 2025, the Company entered into a new credit agreement providing a $1,000 million senior secured first lien term loan and a $100.0 million senior secured revolving credit facility, used to refinance existing debt, accelerate deferred considerations, acquire non-controlling interests, and for corporate purposes107 - On July 31, 2025, the Company accelerated a $19.0 million payment of deferred consideration related to the Plastiq acquisition108 - On July 31, 2025, the Company purchased the noncontrolling interest in its subsidiary Plastiq, Powered by Priority, LLC, for $6.0 million109 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial performance, including a detailed analysis of revenues, operating expenses, and other income/expenses for the three and six months ended June 30, 2025, compared to the prior year. It also discusses critical accounting policies, liquidity, capital resources, and the impact of new accounting pronouncements Revenues - Consolidated revenue increased by 9.1% to $239.8 million for the three months ended June 30, 2025, and to $464.4 million for the six months ended June 30, 2025, driven by growth across all segments124125 Revenue by Type (in thousands) | Revenue Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | |---|---|---|---|---|---|---| | Merchant card fees | $180,483 | $169,246 | $11,237 | $347,562 | $327,193 | $20,369 | | Money transmission services | $39,273 | $31,340 | $7,933 | $76,722 | $60,484 | $16,238 | | Outsourced services and other services | $16,853 | $16,256 | $597 | $33,855 | $31,921 | $1,934 | | Equipment | $3,203 | $3,025 | $178 | $6,303 | $5,988 | $315 | | Total revenues | $239,812 | $219,867 | $19,945 | $464,442 | $425,586 | $38,856 | - Money transmission services revenue saw a significant increase of 25.3% for the three months ended June 30, 2025, primarily due to new customer enrollments and average billed clients129 Operating Expenses Operating Expenses (in thousands) | Operating Expense | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | |---|---|---|---|---|---|---| | Cost of revenue (excludes D&A) | $147,399 | $138,118 | $9,281 | $284,752 | $267,416 | $17,336 | | Salary and employee benefits | $27,060 | $22,119 | $4,941 | $52,835 | $44,269 | $8,566 | | Depreciation and amortization | $14,093 | $15,244 | $(1,151) | $27,870 | $30,497 | $(2,627) | | Selling, general and administrative | $13,910 | $11,212 | $2,698 | $29,010 | $22,207 | $6,803 | | Total operating expenses | $202,462 | $186,693 | $15,769 | $394,467 | $364,389 | $30,078 | - Salary and employee benefits expense increased by 22.3% for the three months ended June 30, 2025, due to merit increases, increased headcount for growth, the Letus business acquisition, and higher stock-based compensation137 - Depreciation and amortization expense decreased by 7.6% for the three months ended June 30, 2025, primarily due to the full amortization of certain intangible assets139 Other Expense, net Other (Expense) Income, Net (in thousands) | Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | |---|---|---|---|---|---|---| | Interest expense | $(23,054) | $(21,710) | $(1,344) | $(46,230) | $(42,590) | $(3,640) | | Debt extinguishment and modification costs | — | $(8,623) | $8,623 | $(38) | $(8,623) | $8,585 | | Other income, net | $1,006 | $668 | $338 | $2,113 | $1,300 | $813 | | Total other expense, net | $(22,048) | $(29,665) | $7,617 | $(44,155) | $(49,913) | $5,758 | - Interest expense increased by 6.2% for the three months ended June 30, 2025, due to an increased outstanding balance of the term loan facility, partially offset by a decrease in interest rates144 - Debt extinguishment and modification costs were significantly lower in 2025 compared to 2024, contributing to an overall improvement in other expense, net143 Income Tax (Benefit) Expense Income Tax Expense and Effective Tax Rate (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | $ Change | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | $ Change | |---|---|---|---|---|---|---| | Income before income taxes | $15,302 | $3,509 | $11,793 | $25,820 | $11,284 | $14,536 | | Income tax expense | $4,423 | $2,515 | $1,908 | $6,673 | $5,097 | $1,576 | | Effective tax rate | 28.9% | 71.7% | | 25.8% | 45.2% | | - The effective tax rate for 2025 changed primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets146 - The Company is evaluating the provisions of the recently enacted 'One Big Beautiful Bill Act' (OBBBA) and its potential impact on financial statements148 Segment Results SMB Payments SMB Payments Segment Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | |---|---|---|---| | Revenues | $163,230 | $155,101 | +$8,129 | | Adjusted EBITDA | $27,749 | $28,597 | $(848) | | Merchant bankcard processing dollar value | $16,150,363 | $15,801,626 | +$348,737 | | Total card processing dollar value | $18,667,898 | $18,253,900 | +$413,998 | - Revenue increased by 5.2% due to higher merchant card fee rates, increased card processing dollar value, and transaction count. Adjusted EBITDA decreased by 3.0% due to mix-related margin compression and other operating expenses152154 B2B Payments B2B Payments Segment Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | |---|---|---|---| | Revenues | $25,033 | $21,881 | +$3,152 | | Adjusted EBITDA | $3,770 | $1,530 | +$2,240 | | B2B issuing dollar volume | $220,227 | $249,454 | $(29,227) | | B2B issuing transaction count | 223 | 242 | (19) | - Revenue increased by 14.4% driven by increases in total card volume processed and incentive income, despite decreases in issuing dollar volume and transaction count157 - Adjusted EBITDA surged by 146.4%, contributed by growth in both supplier-funded business (incentive income) and buyer-funded business (increased processing volume)159 Enterprise Payments Enterprise Payments Segment Performance (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change | |---|---|---|---| | Revenues | $52,658 | $43,670 | +$8,988 | | Adjusted EBITDA | $45,558 | $37,244 | +$8,314 | | Average CFTPay billed clients | 992,279 | 762,873 | +229,406 | | Average CFTPay new enrollments | 57,818 | 55,416 | +2,402 | - Revenue increased by 20.6% due to higher billed clients, new customer enrollments, new integrated partners, the acquisition of the Letus business, and growth in interest income162 - Adjusted EBITDA increased by 22.3%, primarily driven by the strong revenue growth in the segment164 Critical Accounting Policies and Estimates - There have been no material changes to the Company's critical accounting policies and estimates as of June 30, 2025, compared to those discussed in the Annual Report on Form 10-K for the year ended December 31, 2024169 Liquidity and Capital Resources Cash Provided by Operating Activities - Net cash provided by operating activities decreased to $27.1 million for the six months ended June 30, 2025, from $42.0 million in the prior year, primarily due to a decrease in interest expense and changes in operating assets and liabilities175 Cash Used in Investing Activities - Net cash used in investing activities was $21.1 million for the six months ended June 30, 2025, a slight increase from $20.6 million in the prior year. This was mainly for additions to property, equipment and software ($13.0 million), notes receivable ($1.4 million), business acquisition ($4.5 million), and investments in unconsolidated entities ($2.3 million)176 Cash Provided by Financing Activities - Net cash provided by financing activities significantly increased to $178.1 million for the six months ended June 30, 2025, compared to $18.1 million in the prior year. This was driven by changes in net obligations for customer funds ($190.9 million) and proceeds from stock option exercises ($0.3 million), partially offset by debt repayments and deferred consideration payments177 Long-term Debt - Outstanding debt obligations decreased by $10.0 million to $935.5 million as of June 30, 2025, from $945.5 million at December 31, 2024, due to an unscheduled principal payment178 - The Company was in compliance with all covenants in the 2024 Credit Agreement as of June 30, 2025180 Effect of New Accounting Pronouncements and Recently Issued Accounting Pronouncements Not Yet Adopted - This section refers to Note 1, 'Basis of Presentation and Significant Accounting Policies,' for a discussion of recently issued accounting pronouncements not yet adopted181 Item 3. Qualitative and Quantitative Disclosures about Market Risk This section refers to the Annual Report for detailed market risk disclosures, noting no material changes in market risk exposures since December 31, 2024 - The Company's exposures to market risk have not changed materially since December 31, 2024, with detailed disclosures available in the Annual Report on Form 10-K182 Item 4. Controls and Procedures Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal controls over financial reporting related to automated controls for third-party data. Despite this, management believes the financial statements fairly present the company's financial condition - The Company's disclosure controls and procedures were not effective as of June 30, 2025, due to a material weakness in internal controls over financial reporting related to the design and operation of certain automated controls for third-party data184186 - Despite the material weakness, management believes that the consolidated financial statements and related financial information in this Form 10-Q fairly present the Company's financial condition, results of operations, and cash flows185 - No other material changes in internal control over financial reporting occurred during the three and six months ended June 30, 2025188 PART II. OTHER INFORMATION This part covers legal proceedings, risk factors, equity sales, and other miscellaneous disclosures Item 1. Legal Proceedings The company is involved in ordinary course legal proceedings, which are not expected to materially affect financial results. However, if an unfavorable outcome becomes probable and estimable, an accrual could be material - The Company is involved in certain legal proceedings and claims arising in the ordinary course of business, which are not expected to have a material effect on its results of operations, financial condition, or cash flows190 Item 1A. Risk Factors This section refers to the Annual Report for a comprehensive discussion of risk factors, noting that additional unknown or immaterial risks could also adversely affect the business - Investors should carefully consider the risk factors discussed in the Company's Annual Report on Form 10-K, as additional unknown or immaterial risks may also materially adversely affect the business191 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred. The company's purchases of its common stock during the three months ended June 30, 2025, were primarily for tax withholding obligations related to restricted stock awards Issuer Purchases of Equity Securities Issuer Purchases of Equity Securities (Three Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |---|---|---|---|---| | April 1-30, 2025 | 20,348 | $6.82 | — | 690,296 | | May 1-31, 2025 | 3,434 | $7.26 | — | 5,690,626 | | June 1-30, 2025 | 94,364 | $7.96 | — | 5,690,626 | | Total | 118,146 | $7.75 | — | | - The shares purchased represent shares withheld to satisfy employees' tax withholding obligations related to the vesting of restricted stock awards193 Item 3. Defaults Upon Senior Securities Not applicable Item 4. Mine Safety Disclosures Not applicable Item 5. Other Information This section discloses a Rule 10b5-1 trading arrangement adopted by Sean Kiewiet, Chief Strategy Officer, for the sale of 600,000 shares of common stock Rule 10b5-1 Trading Arrangement | Officer or Director Name and Title | Action | Plan Type | Date | Number of Shares to be sold | Expiration | |---|---|---|---|---|---| | Sean Kiewiet, Chief Strategy Officer | Adopted | Rule 10b5-1 | March 11, 2025 | 600,000 | August 31, 2026 | Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements, certificates, plans, and certifications, providing supporting documentation for the report - The exhibits include various agreements (e.g., Contribution Agreement, Merger Agreements, Credit and Guaranty Agreement), corporate documents (e.g., Certificate of Incorporation, Bylaws), equity plans (e.g., 2018 Equity Incentive Plan, 2021 Employee Stock Purchase Plan), and certifications (e.g., CEO/CFO certifications)197198
Priority Technology (PRTH) - 2025 Q2 - Quarterly Report