As of ~~November 13, 2017, 7,058,743~~May 5, 2022, a total of 77,734,647 shares of common stock, par value $0.001 per share, were issued and 76,936,282 shares were outstanding.

~~M I ACQUISITIONS, INC.~~

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

~~TABLE OF CONTENTS~~

Table of Contents

	~~Page~~
~~Part I.~~		~~Financial Information~~		Page
Commonly Used or Defined Terms		ii
PART I. FINANCIAL INFORMATION		1
Item 1. Financial Statements ~~(Unaudited)~~		1
		~~Condensed~~Unaudited Consolidated Balance Sheets as of March 31, 2022 and December 31, 2021	1
		~~Condensed~~Unaudited Consolidated Statements of Operations for the three months ended March 31, 2022 and 2021	2
Unaudited Consolidated Statements of Changes in Stockholders' Deficit for the three months ended March 31, 2022 and 2021		~~Condensed~~3
Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2022 and 2021		3 4
		Notes to Unaudited ~~Condensed~~Consolidated Financial Statements:	4 6
1. Nature of Business and Significant Accounting Policies		6
2. Revenues		8
3. Acquisitions		9
4. Settlement Assets and Customer Account Balances and Related Obligations		11
5. Goodwill and Other Intangible Assets		13
6. Property, Equipment and Software		14
7. Notes Receivable		14
8. Debt Obligations		15
9. Redeemable Senior Preferred Stock and Warrants		16
10. Income Taxes		17
11. Commitments and Contingencies		17
12. Stock-based Compensation		18
13. Segment Information		18
14. Loss per Common Share		20
Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of Operations		12 21
		Item 3. Qualitative and Quantitative ~~and Qualitative~~ Disclosures ~~Regarding~~about Market Risk	13 30
		Item 4. Controls and Procedures	14 30
~~Part~~PART II. OTHER INFORMATION		~~Other Information~~31		15
Item 1. Legal Proceedings		31
Item 1A. Risk Factors		31
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		15 31
Item 3. Defaults Upon Senior Securities		31
Item 4. Mine Safety Disclosures		31
Item 5. Other Information		31
Item 6. Exhibits		15 32
Signatures		16 34

Table of Con tents

Priority Technology Holdings, Inc.
Commonly Used or Defined Terms
Term Definition
2018 Plan 2018 Equity Incentive Plan
2021 Stock Purchase Plan Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
AP Accounts payable
ASC Accounting Standards Codification
ASU Accounting Standards Update
B2B Business-to-business
B2C Business-to-consumer
C&H C&H Financial Services, Inc.
CEO Chief Executive Officer
CFO Chief Financial Officer
Credit Agreement Credit and Guaranty Agreement with Truist Bank dated as of April 27, 2021
EAETR Estimated annual effective tax rate
EBITDA Earnings before interest, taxes, depreciation and amortization
EGC Emerging Growth Company
Exchange Act Securities Exchange Act of 1934
FASB Financial Accounting Standards Board
FBO For the Benefit Of
FI Financial Institution
Finxera Finxera Holdings, Inc.
GAAP U.S. Generally Accepted Accounting Principles
ISO Independent sales organization
ISV Independent software vendor
JOBS Act Jumpstart Our Business Startups Act of 2012
LIBOR London Interbank Offered Rate
nm not meaningful
PIK Payment-in-kind
SEC Securities and Exchange Commission
SMB Small to medium-sized businesses
Term facility $620.0 million senior secured term loan facility issued under the Credit Agreement (including $320.0 million delayed draw facility)
Total Net Leverage Ratio the ratio of consolidated total debt to the Consolidated Adjusted EBITDA (as defined in the Credit Agreement)

ii
Table of Con tents

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

INFORMATION

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

~~M I Acquisitions,~~

Priority Technology Holdings, Inc.

~~Condensed~~

Unaudited Consolidated Balance Sheets

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

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

Liabilities and Stockholders’ Equity

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

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

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

Commitments

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

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

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

~~The accompanying notes are an integral part~~

(in thousands, except share data)


	March 31, 2022		December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$	13,557	$	20,300
Restricted cash	13,588		28,859
Accounts receivable, net of allowances of $869 and $555, respectively	72,863		58,423
Prepaid expenses and other current assets	12,378		15,807
Current portion of notes receivable	652		272
Settlement assets and customer account balances	498,616		479,471
Total current assets	611,654		603,132
Notes receivable, less current portion	2,027		105
Property, equipment and software, net	25,397		25,233
Goodwill	365,740		365,740
Intangible assets, net	325,084		340,211
Deferred income taxes, net	11,493		8,265
Other noncurrent assets	8,944		9,256
Total assets	$	1,350,339	$	1,351,942
Liabilities, Redeemable Senior Preferred Stock and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses	$	43,464	$	42,523
Accrued residual commissions	34,372		29,532
Customer deposits and advance payments	5,008		5,021
Current portion of long-term debt	6,200		6,200
Settlement and customer account obligations	503,731		500,291
Total current liabilities	592,775		583,567
Long-term debt, net of current portion, discounts and debt issuance costs	598,403		604,105
Other noncurrent liabilities	15,677		18,349
Total noncurrent liabilities	614,080		622,454
Total liabilities	1,206,855		1,206,021
Commitments and contingencies (Note 11)	0		0
Redeemable senior preferred stock, $0.001 par value; 250,000 shares authorized; 225,000 issued and outstanding at March 31, 2022 and December 31, 2021	215,053		210,158
Stockholders' deficit:
Preferred stock, $0.001; 100,000,000 shares authorized; none issued or outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value; 1,000,000,000 shares authorized; 77,589,180 and 77,460,312 shares issued at March 31, 2022 and December 31, 2021, respectively; and 76,842,093 and 76,739,896 shares outstanding at March 31, 2022 and December 31, 2021, respectively.	78		77
Treasury stock at cost, 747,087 and 720,416 shares at March 31, 2022 and December 31, 2021, respectively	(4,248)		(4,091)
Additional paid-in capital	32,992		39,835
Accumulated deficit	(100,391)		(100,058)
Total stockholders' deficit	(71,569)		(64,237)
Total liabilities, redeemable senior preferred stock and stockholders' deficit	$	1,350,339	$	1,351,942

See Notes to Unaudited Consolidated Financial Statements

Table of ~~these condensed financial statements.~~

Con tents

~~M I Acquisitions, Inc.~~

~~Condensed~~

Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Operations

~~(unaudited)~~

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

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

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

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

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

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

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

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

~~The accompanying notes are an integral part~~

(in thousands, except per share amounts)


	Three Months Ended March 31,
		2022		2021
Revenues		$	153,239	$	113,297
Operating expenses
Costs of services		101,480		81,863
Salary and employee benefits		16,077		9,548
Depreciation and amortization		17,353		9,070
Selling, general and administrative		7,503		8,289
Total operating expenses		142,413		108,770
Operating income		10,826		4,527
Other (expense) income
Interest expense		(11,535)		(9,168)


Other income (expense), net		51		(269)
Total other expense, net		(11,484)		(9,437)
Loss before income taxes		(658)		(4,910)
Income tax benefit		(325)		(2,231)
Net loss		(333)		(2,679)
Less: Dividends and accretion attributable to redeemable senior preferred stockholders		(8,400)		—


Net loss attributable to common stockholders		$	(8,733)	$	(2,679)

Loss per common share:
Basic and diluted		$	(0.11)	$	(0.04)


Weighted-average common shares outstanding:
Basic and diluted		78,597		67,543

See Notes to Unaudited Consolidated Financial Statements

Table of ~~these condensed financial statements.~~

Con tents

~~M I Acquisitions, Inc.~~

Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Changes in Stockholders' Deficit

(in thousands)

Common
Stock Treasury
Stock Additional Paid-In Capital Accumulated Deficit Deficit Attributable to Stockholders
Shares $ Shares $
December 31, 2021 76,740 $ 77 720 $ (4,091) $ 39,835 $ (100,058) $ (64,237)
Equity-classified stock-based compensation — — — — 1,558 — 1,558
Vesting of stock-based compensation 129 — — — — — —
Share repurchases and shares withheld for taxes (27) 1 27 (157) (1) — (157)
Dividends on redeemable senior preferred stock — — — — (7,595) — (7,595)
Accretion of redeemable senior preferred stock — — — — (805) — (805)
Net loss — — — — — (333) (333)
March 31, 2022 76,842 $ 78 747 $ (4,248) $ 32,992 $ (100,391) $ (71,569)

Common
Stock Treasury
Stock Additional Paid-In Capital Accumulated Deficit Deficit Attributable to Stockholders
Shares $ Shares $
December 31, 2020 67,391 $ 68 451 $ (2,388) $ 5,769 $ (102,013) $ (98,564)
Equity-classified stock-based compensation — — — — 558 — 558
Vesting of stock-based compensation 159 — — — — — —
Liability-classified stock-based compensation converted to equity-classified — — — — 313 — 313
Exercise of stock options 90 — — — 617 — 617
Net loss — — — — — (2,679) (2,679)
March 31, 2021 67,640 $ 68 451 $ (2,388) $ 7,257 $ (104,692) $ (99,755)

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

Table of Con tents

Priority Technology Holdings, Inc.

Unaudited Consolidated Statements of Cash Flows

~~(unaudited)~~

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

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

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

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

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

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

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

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

(in thousands)


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities:
Net loss	$	(333)	$	(2,679)
Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization of assets	17,353		9,070
Stock-based compensation	1,558		558
Amortization of debt issuance costs and discounts	848		590

Deferred income tax benefit	(3,227)		(2,299)

PIK interest	—		1,924

Other non-cash items, net	—		(64)
Change in operating assets and liabilities:
Accounts receivable	(14,440)		(9,575)
Prepaid expenses and other current assets	164		(539)
Income taxes payable (receivable)	2,913		(44)
Notes receivable	98		862
Accounts payable and other accrued liabilities	5,316		8,633
Customer deposits and advance payments	(13)		2,604
Other assets and liabilities, net	(624)		59
Net cash provided by operating activities	9,613		9,100
Cash flows from investing activities:


Additions to property, equipment and software	(2,370)		(2,754)
Notes receivable loan funding	(2,400)		—
Acquisitions of intangible assets	(941)		(2,937)
Net cash used in investing activities	(5,711)		(5,691)
Cash flows from financing activities:


Repayments of long-term debt	(1,550)		(4,860)

Repayments of borrowings under revolving credit facility	(5,000)		—




Dividends paid to redeemable senior preferred stockholders	(3,505)		—


Settlement and customer accounts obligations, net	12,749		(22,526)
Other financing activities	(156)		617
Net cash provided by (used in) financing activities	2,538		(26,769)
Net change in cash and cash equivalents, and restricted cash:
Net increase in cash and cash equivalents, and restricted cash	6,440		(23,360)
Cash and cash equivalents, and restricted cash at beginning of period	518,093		88,120
Cash and cash equivalents, and restricted cash equivalents at end of period	$	524,533	$	64,760

Supplemental cash flow information:
Cash paid for interest	$	10,613	$	6,553

Non-cash investing and financing activities:
PIK interest added to principal of debt obligations	$	—	$	1,924

Table of Con tents


	Three Months Ended March 31,
	2022		2021
Reconciliation of cash and cash equivalents, and restricted cash:
Cash and cash equivalents	$	13,557	$	5,827
Restricted cash	13,588		58,933
Customer account balances (see Note 4)	497,388		—
Total cash and cash equivalents, and restricted cash	$	524,533	$	64,760

See Notes to Unaudited Consolidated Financial Statements

Table of Con tents

Priority Technology Holdings, Inc.

Notes to Unaudited Consolidated Financial Statements

1. Nature of Business and Significant Accounting Policies

Business, Consolidation and Presentation

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

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

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

~~M I Acquisitions, Inc.~~

~~Notes to Condensed~~Unaudited Consolidated Financial Statements

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

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

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

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

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

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

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

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

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

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

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

~~Going Concern~~

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

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

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

~~Note 2 — Significant Accounting Policies~~

~~Basis of presentation~~

~~The accompanying unaudited condensed financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and~~information pursuant to the rules and regulations of the ~~Securities and Exchange Commission (“SEC”) for interim~~SEC. The Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial ~~information and~~statements included in the ~~instructions to~~Company's Annual Report on Form 10-Q. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal accruals) considered for a fair presentation have been included. The Company has evaluated subsequent events through the issuance of this Form 10-Q. Operating results for the quarter ended September 30, 2017 are not necessarily indicative of the results that may be expected10-K for the year ended December 31, ~~2017 or any future~~2021 but does not include all disclosures required by GAAP for annual financial statements.

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

~~Emerging Growth Company~~

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

~~Cash and Cash Equivalents~~

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

~~Marketable securities held in Trust Account~~

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

~~Fair value of financial instruments~~

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

December 31, 2021.

Use of Estimates

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

~~Concentration~~In particular, the continued magnitude, duration and effects of the COVID-19 pandemic are difficult to predict, and the ultimate effect could result in future charges related to the recoverability of assets, including financial assets, long-lived assets, goodwill and other losses.

Foreign Currency

The Company's reporting currency is the U.S. dollar. Assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate on the last day of the reporting period. Revenues and expenses are translated using the average exchange rate in effect during the reporting period. Foreign exchange translation and transaction gains and losses were not material for the periods presented and are included in the Unaudited Consolidated Statements of Operations.

Comparability of Reporting Periods

Certain prior period amounts in these Unaudited Consolidated Financial Statements have been reclassified to conform to the current period presentation, with no net effect on the Company's operating income, loss before income tax benefit, net loss or stockholders' deficit for any period presented.

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We reclassified certain cash flows related to settlement assets and customer account balances and the related obligations from net cash used in operating activities to net cash used in financing activities within the Unaudited Consolidated Statements of Cash Flows. Prior period amounts have been reclassified to conform to the current period presentation. These changes have no impact on our previously reported financial position or net increase in cash and cash equivalents.
The current period presentation classifies all changes in settlement and customer account balance obligations on our Unaudited Consolidated Statements of Cash Flows as net cash provided by (used in) financing activities. The current period presentation provides a more meaningful representation of the cash flows related to the movement of settlement assets and customer account balances due to the restrictions on and use of those funds.

The following tables present the effects of the changes on the presentation of these cash flows to the previously reported Unaudited Consolidated Statement of Cash Flows:
(in thousands) Three Months Ended March 31, 2021
Net cash (used in) provided by operating activities:
Historically reported $ (13,426)
Adjustment 22,526
Reclassified 9,100
Net cash used in financing activities:
Historically reported (4,243)
Adjustment (22,526)
Reclassified $ (26,769)
Emerging Growth Company Status
Prior to December 31, 2021, the Company was an EGC, as defined in JOBS Act, and elected to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies until the Company is no longer an EGC, including using the extended transition period for complying with new or revised accounting standards. On December 31, 2021, we ceased to qualify as an EGC and have adopted any new standards that we are now required to adopt.
Recently Issued Accounting Standards Pending Adoption
Reference Rate Reform
In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from the LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financial Rate. If certain criteria are met, entities can elect not to apply certain modification accounting requirements to contracts affected by what the guidance calls reference rate reform. An entity that makes this election would not have to remeasure the contract at the modification date or reassess a previous accounting determination. In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848), which clarifies that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. These updates can be adopted at any time before December 31, 2022. The Company is currently evaluating the potential impact these updates may have on its Unaudited Consolidated Financial Statements.
Credit Losses

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments. This new guidance will change how entities account for credit ~~risk~~

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

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"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 this update may have on the timing of recognizing future provisions for expected losses on the Company's accounts receivable and notes receivable. Since the Company is a smaller reporting company, the Company must adopt this new standard no later than the beginning of 2023 for annual and interim reporting periods.

Business Combinations

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires entities to recognize and measure contract assets and liabilities acquired in a business combination in accordance with ASC 606, as if the acquirer had originated the contracts. Generally this will result in the acquirer recognizing and measuring the acquired contract assets and liabilities consistent with the manner by which they were recognized and measured by the acquiree. This update is effective for the Company on January 1, 2023, including interim periods within those fiscal years. The impact that ASU 2021-08 may have on the Company's Unaudited Consolidated Financial ~~instruments~~Statements will depend on the circumstances of any business combination that ~~potentially subject~~may occur after adoption.

2. Revenues

Disaggregation of Revenues

The following table presents a disaggregation of our consolidated revenues by type for the three months ended March 31, 2022 and 2021:


	Three Months Ended March 31,
(in thousands)		2022		2021
Revenue Type:
Merchant card fees		$	127,952	$	107,702
Outsourced services and other services		7,097		4,378
Money transmission services revenue		16,283		—
Equipment		1,907		1,217
Total revenues(1),(2)		$	153,239	$	113,297

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

(2)Approximately $0.1 million, $0.2 million of interest income for the three months ended March 31, 2022 and 2021, respectively, is included in other income, net on the Company's Unaudited Consolidated Statements of Operations and not reflected in the table above. Approximately $0.6 million of interest income for the three months ended March 31, 2022, is included in outsourced services and other services revenue in the table above.

Deferred revenues were not material for the three months ended March 31, 2022 and 2021.

Contract Assets and Contract Liabilities

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

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Supplemental balance sheet information related to contracts from customers as of March 31, 2022 and December 31, 2021 was as follows:

(in thousands)

Consolidated Balance Sheet Location

March 31, 2022

December 31, 2021

Liabilities:

Contract liabilities, net (current)

Customer deposits and advance payments

1,280

Substantially all of these balances are recognized as revenue within 12 months. Net contract assets were not material for any period presented.

Impairment losses recognized on receivables or contract assets arising from the Company's contracts with customers were not material for the periods ended March 31, 2022 and December 31, 2021.

3. Acquisitions

Finxera Acquisition

On September 17, 2021, the Company completed its acquisition of 100% of the equity interests of Finxera. Finxera is a provider of deposit account management and licensed money transmission services in the U.S. The acquisition will allow the Company to ~~concentration~~offer clients turn-key merchant services, payment facilitation, card issuing, automated payables, virtual banking, e-wallet tools, risk management, underwriting and compliance on a single platform.

The transaction was funded with the Company's cash on hand, proceeds from the issuance of ~~credit risk~~the redeemable senior preferred stock and debt, and the issuance of common equity shares to the sellers.

The acquisition was accounted for as a business combination using the acquisition method of accounting, under which the assets acquired and liabilities assumed were recognized at their fair values as of September 17, 2021, with the excess of the fair value of consideration transferred over the fair value of the net assets acquired recognized as goodwill. The fair values of the assets acquired and liabilities assumed as of September 17, 2021 were estimated by management based on the valuation of the Finxera business using the discounted cash flow method and other factors specific to certain assets and liabilities. The purchase price allocation is set forth in the table below.

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(in thousands)
Consideration:
Cash	$	379,220
Equity instruments(1)	34,388
Less: cash and restricted cash acquired	(6,598)
Total purchase consideration, net of cash and restricted cash acquired	$	407,010

Recognized amounts of assets acquired and liabilities assumed:
Accounts receivable	$	385
Prepaid expenses and other current assets	5,198
Current portion of notes receivable	784
Settlement assets and customer account balances	498,811
Property, equipment and software, net	712
Goodwill	245,104
Intangible assets, net(2)	211,400
Other noncurrent assets	955
Accounts payable and accrued expenses	(7,837)
Settlement and customer account obligations	(498,811)
Deferred income taxes, net	(44,311)
Other noncurrent liabilities	(5,380)
Total purchase consideration	$	407,010

(1)The fair value of the 7,551,354 shares of PRTH common stock that were issued was determined based on their market price at the time of closing adjusted for an appropriate liquidity discount due to trading restrictions under Securities Rule 144.

(2)The intangible assets acquired consist of $154.9 million for referral partner relationships, $34.3 million for technology, $20.1 million for customer relationships and $2.1 million for money transmission licenses.

Goodwill of $245.1 million arising from the acquisition primarily consists of the expected synergies and other benefits from combining operations. Approximately $8.7 million of the goodwill attributable to the acquisition is expected to be deductible for income tax purposes. The goodwill was allocated 100% to the Company's Enterprise Payments reportable segment.

In 2020, Finxera acquired 2 businesses for which the purchase price included contingent consideration valued at $6.1 million. The contingent consideration payable is comprised of earnout opportunities equal to 50% of certain revenues earned from the customers assumed in these acquisitions. The associated earnout opportunities are to be measured and paid every six months and expire at various dates through December 31, 2023. As of March 31, 2022, $0.5 million of the $6.1 million of total contingent consideration has been paid. The remaining $5.6 million was accrued, of which $2.0 million and $3.6 million were included in accounts payable and accrued expenses and other noncurrent liabilities, respectively, on the Company's Unaudited Consolidated Balance Sheet as of March 31, 2022.

Other Acquisitions

Wholesale Payments, Inc.

On April 28, 2021, a subsidiary of the Company completed its acquisition of certain residual portfolio rights for a purchase price of $42.4 million and $24.8 million of post-closing payments and earnout payments based on meeting certain attrition thresholds over a three-year period from the date of acquisition. The transaction did not meet the definition of a business, therefore it was accounted for as an asset acquisition under which the cost of the acquisition was allocated to the acquired assets based on relative fair values. As of March 31, 2022, the sellers earned $3.8 million of the $24.8 million, which was paid during 2021, increasing the total purchase price recorded to $46.2 million, which was recorded to residual buyout intangible assets with a seven-year useful life amortized on a straight-line basis. As this is an asset acquisition, additional purchase price is accounted for when payment to the seller becomes probable and is added to the carrying value of the asset. The seller's note payable to the Company of $3.0 million and an advance of $2.0 million outstanding at the time of the purchase was netted

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against the initial purchase price, resulting in cash of $41.2 million being paid by the Company to the seller, which was funded from cash proceeds from the issuance of the redeemable senior preferred stock and cash on hand.

C&H

On June 25, 2021, a subsidiary of the Company acquired certain assets and assumed certain related liabilities of C&H under an asset purchase agreement. C&H was an ISO partner of the Company where it developed expertise in software-integrated payment services, as well as marketing programs for specific verticals such as automotive and youth sports. This business is reported within the Company's SMB Payments reportable segment. The initial purchase price for the net assets was $35.0 million in cash and a total purchase price of not more than $60.0 million including post-closing payments and earnout payments based on certain gross profit and revenue achievements over a three-year period from the date of acquisition. The acquisition date fair value of the contingent consideration was $4.7 million, which increased the total purchase price to $39.7 million. The seller's note payable to the Company of $0.5 million at the time of purchase was netted against the initial purchase price, resulting in cash of $34.5 million being paid by the Company to the seller, which was funded from a $30.0 million draw down of the revolving credit facility under the Credit Agreement held by the Company and $4.5 million cash on hand. Transaction costs were not material and were expensed. The purchase price allocation is set forth in the table below.


(in thousands)
Accounts receivable	$	214
Prepaid expenses and other current assets	209
Property, equipment and software, net and other current assets	287
Goodwill	13,804
Intangible assets, net(1)	25,400
Other noncurrent liabilities	(214)
Total purchase price	$	39,700

(1)The intangible assets acquired consist of $20.2 million for merchant portfolio intangible assets with a ten-year useful life and $5.2 million for ISO partner relationships with a twelve-year useful life.

The goodwill for the Wholesale Payments, Inc. asset acquisition and the C&H business combination is deductible by the Company for income tax purposes. Based on their purchase prices and pre-acquisition operating results and assets, these 2 businesses acquired by the Company in 2021, as described above, did not meet the materiality requirements for pro forma disclosures individually or collectively.

4. Settlement Assets and Customer Account Balances and Related Obligations

SMB Payments Segment

In the Company's SMB Payments reportable segment, funds settlement refers to the process of transferring funds for sales and credits between card issuers and merchants. The standards of the card networks require possession of funds during the settlement process by a member bank which controls the clearing transactions. Since settlement funds are required to be in the possession of a member bank until the merchant is funded, these funds are not assets of the Company and the associated obligations related to these funds are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Member banks held merchant funds of $105.7 million and $102.1 million at March 31, 2022 and December 31, 2021, respectively.

Exception items that become the liability of the Company are recorded as merchant losses, a component of costs of services in the Unaudited 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 and customer account balances in the Company's Unaudited Consolidated Balance Sheets, with an offsetting reserve for those amounts the Company estimates it will not be able to recover. Expenses for merchant losses for the three months ended March 31, 2022 and 2021 were $1.1 million and $0.4 million, respectively.

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B2B Payments Segment

In the Company's B2B Payments segment, the Company earns revenues from certain of its services by processing transactions for FIs and other business customers. Customers transfer funds to the Company, which are held in either company-owned bank accounts controlled by the Company or bank-owned FBO accounts controlled by the banks, until such time as the transactions are settled with the customer payees. Amounts due to customer payees that are held by the Company in Company-owned bank accounts are included in restricted cash. Amounts due to customer payees that are held in bank-owned FBO accounts are not assets of the Company, and the associated obligations related to these funds are not liabilities of the Company. Therefore, neither is recognized in the Company's Unaudited Consolidated Balance Sheets. Bank-owned FBO accounts held funds of $57.6 million and $45.5 million at March 31, 2022 and December 31, 2021, respectively. Company-owned bank accounts held $6.4 million and $21.4 million at March 31, 2022 and December 31, 2021, respectively, which are included in restricted cash and settlement obligations in the Company's Unaudited Consolidated Balance Sheets.

Enterprise Payments Segment

In the Company's Enterprise Payments segment, revenue is derived primarily from enrollment fees, monthly subscription fees and transaction-based fees from licensed money transmission services. As part of its licensed money transmission services, the Company accepts deposits from consumers and subscribers which are held in bank accounts maintained by the Company on behalf of consumers and subscribers. After accepting deposits, the Company is allowed to invest available balances in these accounts in ~~a financial institution which, at times may exceed~~certain permitted investments, and the ~~Federal depository insurance coverage~~return on such investments contributes to the Company's net cash inflows. These balances are payable on demand. As such, the Company recorded these balances and related obligations as current assets and current liabilities. The nature of ~~$250,000.~~these balances are cash and cash equivalents but they are not available for day-to-day operations of the Company. Therefore, the Company has classified these balances as settlement assets and customer account balances and the related obligations as settlement and customer account obligations in the Company's Unaudited Consolidated Balance Sheets.

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


(in thousands)	March 31, 2022		December 31, 2021
Settlement Assets:
Card settlements due from merchants, net of estimated losses	$	1,228	$	537
Customer Account Balances:
Cash and cash equivalents	497,388		468,934
Time deposits	—		10,000
Total settlement assets and customer account balances	$	498,616	$	479,471

Settlement and Customer Account Obligations:
Customer account obligations	$	497,388	$	478,935
Due to customer payees(1)	6,343		21,356
Total settlement and customer account obligations	$	503,731	$	500,291

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

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5. Goodwill and Other Intangible Assets

Goodwill

The Company's goodwill relates to the following reporting units as of March 31, 2022 and December 31, 2021:


(in thousands)	March 31, 2022		December 31, 2021
SMB Payments	$	120,636	$	120,636
Enterprise Payments	245,104		245,104
Total	$	365,740	$	365,740

There were no impairment losses for the three months ended March 31, 2022 and 2021. The Company ~~has~~performed its most recent annual goodwill impairment test as of October 1, 2021, using the optional qualitative method. Under the qualitative method, we examined the factors most likely to affect our valuations. As a result, we have concluded that it remains more likely than not ~~experienced losses on these accounts and management believes~~that the fair value of each of our reporting units exceeds their carrying amounts. As of March 31, 2022, the Company is not ~~exposed~~aware of any triggering events that have occurred since October 1, 2021.

Other Intangible Assets

At March 31, 2022 and December 31, 2021, other intangible assets consisted of the following:


(in thousands, except weighted-average data)	March 31, 2022						Weighted-average Useful Life
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Other intangible assets:
ISO and referral partner relationships	$	175,300	$	(14,771)	$	160,529	14.8
Residual buyouts	126,225		(61,054)		65,171		6.3
Customer relationships	95,566		(74,046)		21,520		8.0
Merchant portfolios	76,016		(33,942)		42,074		6.7
Technology	48,690		(15,921)		32,769		9.9
Non-compete agreements	3,390		(3,390)		—		0.0
Trade names	2,870		(1,949)		921		11.7
Money transmission licenses(1)	2,100		—		2,100
Total gross carrying value	$	530,157	$	(205,073)	$	325,084	10.0

(1)These assets have an indefinite useful life.

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(in thousands, except weighted-average data)	December 31, 2021						Weighted-average Useful Life
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Other intangible assets:
ISO and referral partner relationships	$	175,300	$	(11,679)	$	163,621	14.8
Residual buyouts(1)	126,225		(56,186)		70,039		6.4
Customer relationships	95,566		(70,883)		24,683		8.1
Merchant portfolios	76,016		(30,879)		45,137		6.7
Technology(2)	48,690		(15,039)		33,651		9.9
Non-compete agreements(2)	3,390		(3,390)		—		0.0
Trade names	2,870		(1,890)		980		11.6
Money transmission licenses(3)	2,100		—		2,100
Total gross carrying value	$	530,157	$	(189,946)	$	340,211	9.7

(1)Additions to ~~significant risks on such accounts.~~

residual buyouts were offset by certain assets that became fully amortized in 2021 but are still in service.

(2)Certain assets in the group became fully amortized in 2021 but are still in service.

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

(3)These assets have an indefinite useful life.

Amortization expense for intangible assets was $15.1 million and $7.0 million for the three months ended March 31, 2022 and 2021, respectively.

The Company ~~complies with accounting and disclosure requirements ASC Topic 260, “~~~~Earnings Per Share~~~~.” Net income (loss) per common share is computed by dividing net income (loss) applicable to common stockholders~~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. The Company also considered the market conditions generated by the ~~weighted average number~~COVID-19 pandemic and concluded that there were no additional impairment indicators present at March 31, 2022.

6. Property, Equipment and Software

A summary of ~~common shares outstanding during~~property, equipment and software, net as of March 31, 2022 and December 31, 2021 was as follows:


(in thousands, except useful lives)	March 31, 2022		December 31, 2021
Computer software	$	54,939	$	52,715
Equipment	12,874		12,255
Leasehold improvements	6,835		6,467
Furniture and fixtures	3,035		2,819
Property, equipment and software	77,683		74,256
Less: accumulated depreciation	(52,286)		(49,023)
Property, equipment and software, net	$	25,397	$	25,233

Depreciation expense totaled $2.2 million and $2.1 million for the ~~period, plus,~~three months ended March 31, 2022 and 2021, respectively.

Computer software represents purchased software and internally developed back office and merchant interfacing systems used to assist in the reporting of merchant processing transactions and other related information.

7. Notes Receivable

The Company had notes receivable of $2.7 million and $0.4 million as of March 31, 2022 and December 31, 2021, respectively, which are reported as current portion of notes receivable and notes receivable less current portion on the Company's Unaudited Consolidated Balance Sheets. The carrying value of the Company's notes receivable approximates fair value. On the fair value hierarchy, Level 3 inputs are used to estimate the fair value of notes receivable. The notes receivable carried weighted-average

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interest rates of 14.6% and 13.8% as of March 31, 2022 and December 31, 2021, respectively. The notes receivable are comprised of notes receivable from ISOs, and under the terms of the agreements the Company preserves the right to hold back residual payments due to the ~~extent dilutive,~~ISOs and to apply such residuals against future payments due to the ~~incremental number~~Company. As of ~~shares~~March 31, 2022 and December 31, 2021, the Company had no allowance for doubtful notes receivable.

As of ~~common stock to settle warrants,~~March 31, 2022, the principal payments for the Company's notes receivable are due as ~~calculated~~follows:


(in thousands)
Twelve month period ending March 31,
2023	$	652
2024	549
2025	526
2026	463
2027	489

Total	$	2,679

8. Debt Obligations

Outstanding debt obligations as of March 31, 2022 and December 31, 2021 consisted of the following:


(in thousands)	March 31, 2022		December 31, 2021
Term facility - matures April 27, 2027, interest rate of 6.75% at March 31, 2022 and December 31, 2021	$	615,350	$	616,900
Revolving credit facility - $40.0 million line, matures April 27, 2026, interest rate of 5.75% at March 31, 2022 and December 31, 2021	10,000		15,000
Total debt obligations	625,350		631,900
Less: current portion of long-term debt	(6,200)		(6,200)
Less: unamortized debt discounts and deferred financing costs	(20,747)		(21,595)
Long-term debt, net	$	598,403	$	604,105

Interest Expense and Amortization of Deferred Loan Costs and Discounts

Deferred financing costs and debt discounts are amortized using the ~~treasury stock method. An aggregate~~effective interest method over the remaining term of ~~4,718,573 shares~~the respective debt and are recorded as a component of ~~common stock~~interest expense. Unamortized deferred financing costs and debt discounts are included in long-term debt on the Company's Unaudited Consolidated Balance Sheets.

Outstanding borrowings under the Credit Agreement accrue interest using either a base rate or a LIBOR rate plus an applicable margin per year, subject to ~~possible redemption at September 30, 2017, have been excluded from the calculation~~a LIBOR rate floor of ~~basic loss~~1.00% per ~~ordinary share since such shares, if redeemed, only participate~~year. The revolving credit facility incurs an unused commitment fee on any undrawn amount in ~~their pro rata share~~an amount equal to 0.50% per year of the ~~trust earnings. At September 30, 2016, weighted average shares were reduced~~unused portion. The future applicable interest rate margins may vary based on the Company's Total Net Leverage Ratio in addition to future changes in the underlying market rates for LIBOR and the rate used for base-rate borrowings.

Interest expense for outstanding debt, including fees for undrawn amounts and amortization of deferred financing costs and debt discounts, was $11.5 million, and $9.2 million for the ~~effect~~three months ended March 31, 2022 and 2021. Interest expense included amortization of ~~an aggregate~~deferred financing costs and debt discounts of ~~187,500 shares~~$0.8 million and $0.6 million for the three months ended March 31, 2022 and 2021, respectively.

Table of ~~common stock that were subject to forfeiture if~~Con tents

Fair Value

Outstanding debt obligations are reflected in the ~~over-allotment option is not exercised by the underwriters. At September 30, 2017,~~Company's Unaudited Consolidated Balance Sheets at carrying value since the Company did not ~~have any dilutive securities~~elect to remeasure debt obligations to fair value at the end of each reporting period.

The fair value of the of the term facility was estimated to be $614.6 million and $613.8 million. at March 31, 2022 and December 31, 2021, respectively, and was estimated using binding and non-binding quoted prices in an active secondary market, which considersthe credit risk and market related conditions, and is within Level 3 of the fair value hierarchy.

The carrying values of the other ~~contracts~~long-term debt obligations approximate fair value due to mechanisms in the credit agreements that ~~could, potentially, be exercised~~adjust the applicable interest rates and the lack of a market for these debt obligations.

Debt Covenants

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

If the aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the total revolving facility thereunder, the loan parties are required to comply with certain restrictions on its Total Net Leverage Ratio. If applicable, the maximum permitted Total Net Leverage Ratio is: 1) 6.50:1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022; 2) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023; and 3) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter. As of March 31, 2022, the Company was in compliance with our financial covenants.

9. Redeemable Senior Preferred Stock and Warrants

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


(in thousands)	Shares	Amount
January 1, 2022	225	$	210,158

Unpaid dividend on redeemable senior preferred stock	—	4,090
Accretion of discounts and issuance cost	—	805
March 31, 2022	225	$	215,053

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


(in thousands)	Three Months Ended March 31, 2022
Dividends paid in cash	$	3,505
Accumulated dividends accrued as part of the carrying value of redeemable senior preferred stock	4,090
Dividends declared at the rate of 13.0% per year	$	7,595

On April 27, 2021, the Company issued warrants to purchase up to 1,803,841 shares of the Company's common stock, ~~and then~~par value $0.001 per share, at an exercise price of $0.001. As of March 31, 2022, none of the warrants have been exercised. The warrants are considered to be equity contracts indexed in the ~~earnings~~Company's own shares and therefore were recorded at their inception date relative fair value and are included in additional paid-in capital on the Company's Unaudited Consolidated Balance Sheets.

Table of Con tents

10. Income Taxes

The Company's consolidated effective income tax rate was 49.4% for the three months ended March 31, 2022, compared to a consolidated effective income tax rate of 45.4% for the three months ended March 31, 2021. The effective rate for March 31, 2022 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. The effective rate for March 31, 2021 differed from the statutory federal rate of 21.0% primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

Valuation Allowance for Deferred Income Tax Assets

The Company considers all available positive and negative evidence to determine whether sufficient taxable income will be generated in the future to permit realization of the existing deferred tax assets. In accordance with the provisions of ASC 740, Income Taxes, the Company is required to provide a valuation allowance against deferred income tax assets when it is "more likely than not" that some portion or all of the deferred tax assets will not be realized.

Based on management's assessment, as of March 31, 2022, the Company continues to record a full valuation allowance against non-deductible interest expense. The Company will continue to evaluate the realizability of the net deferred tax asset on a quarterly basis and, as a result, the valuation allowance may change in future periods.

11. Commitments and Contingencies

Minimum Annual Commitments with Third-party Processors

The Company has multi-year agreements with third parties to provide certain payment processing services to the Company. The Company pays processing fees under these agreements that are based on the volume and dollar amounts of processed payment transactions. Some of these agreements have minimum annual requirements for processing volumes. Based on existing contracts in place at March 31, 2022, the Company is committed to pay minimum processing fees under these agreements of approximately $15.7 million in 2022 and $16.6 million in 2023.

Contingent Consideration

For asset acquisitions that do not meet the definition of a business, the portion of the unpaid purchase price that is contingent on future activities is not initially recorded by the acquirer on the date of acquisition. Rather, the acquirer generally recognizes contingent consideration when it becomes probable and estimable.

On March 15, 2019, a subsidiary of the Company paid $15.2 million cash to acquire certain residual portfolio rights. This asset acquisition became part of the Company's SMB Payments reportable segment. The initial purchase price is subject to an increase of up to $6.4 million in accordance with the terms of the agreement between the Company and the sellers. As of March 31, 2022, the sellers had not achieved the criteria to earn the remaining $2.1 million.

See Note 3, Acquisitions, for information about contingent consideration related to other acquisitions.

Legal Proceedings

The Company is involved in certain legal proceedings and claims which arise in the ordinary course of business. In the opinion of the Company and based on consultations with internal and external counsel, the results of any of these matters, individually and in the aggregate, are not expected to have a material effect on the Company's results of operations, financial condition or cash flows. As more information becomes available, and the Company determines that 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.

Table of Con tents

Concentration of Risks

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

A majority of the Company's cash and restricted cash is held in certain FIs, 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.

12. Stock-based Compensation

For the three months ended March 31, 2022 and 2021, stock-based compensation was as follows:


	Three Months Ended March 31,
(in thousands)	2022		2021


Restricted stock units compensation expense	$	1,558	$	558

In March 2021, the Company converted a $0.3 million liability-classified stock-based compensation award for restricted stock units under the ~~treasury~~2018 Plan, whereby the service inception date preceded the future grant-date, to an equity-classified award when the restricted stock ~~method.~~units were granted.

Income tax benefit for stock-based compensation was immaterial for the three months ended March 31, 2022 and 2021. No stock-based compensation has been capitalized.

2018 Plan

The Company's 2018 Plan provided for the issuance of up to 6,685,696 shares of the Company's common stock. On March 17, 2022, the Company's Board of Directors unanimously approved an amendment to the 2018 Plan, subject to approval by our shareholders, to increase the number of shares authorized for issuance under the plan by 2,500,000 shares, resulting in 9,185,696 shares of the Company's common stock authorized for issuance under the plan.

2021 Stock Purchase Plan

The 2021 Stock Purchase Plan provides for up to 200,000 shares to be purchased under the plan. Shares issued under the plan may be authorized but unissued or reacquired shares of common stock. All employees of the Company who work more than 20 hours per week and have been employed by the Company for at least 30 days may participate in the 2021 Stock Purchase Plan.

Under the 2021 Stock Purchase Plan, participants are offered, on the first day of the offering period, the option to purchase shares of Common Stock at a discount on the last day of the offering period. The offering period shall be for a period of three months, and the first offering period began on January 10, 2022. The 2021 Stock Purchase Plan provides eligible employees the opportunity to purchase shares of the Company's common stock on a quarterly basis through payroll deductions at a price equal to 95% of the lesser of the fair value on the first and last trading day of each offering period.

13. Segment Information

Prior to the fourth quarter of 2021, the Company's 3 reportable segments included the Consumer Payments segment, the Commercial Payments segment and the Integrated Partners segment. As a result ~~diluted~~of the Company's organic growth and recent acquisitions, a new internal reporting structure was implemented which resulted in changes to the Company's reportable segments. The 3 new reportable operating segments are SMB Payments, B2B Payments and Enterprise Payments. All comparative periods have been adjusted to reflect the new reportable segments.

Table of Con tents

More information about our 3 reportable segments:

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

•B2B Payments – provides AP automation solutions to corporations, software partners and FIs, including Citi, Mastercard and American Express.

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

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

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


(in thousands)	Three Months Ended March 31,
		2022		2021
Revenues:
SMB Payments		$	129,959	$	109,101
B2B Payments		5,925		3,500
Enterprise Payments		17,355		696
Consolidated revenues		$	153,239	$	113,297

Depreciation and amortization:
SMB Payments		$	10,824	$	8,708
B2B Payments		73		74
Enterprise Payments		6,197		—
Corporate		259		288
Consolidated depreciation and amortization		$	17,353	$	9,070

Operating income (loss):
SMB Payments		$	12,486	$	13,289
B2B Payments		409		(409)
Enterprise Payments		4,494		164
Corporate		(6,563)		(8,517)
Consolidated operating income		$	10,826	$	4,527

A reconciliation of total operating income of reportable segments to the Company's net loss ~~per common share~~ is ~~the same as basic loss per common share for the period.~~

~~Reconciliation of net income (loss) per common share~~

~~The Company’s net income is adjusted for the portion of income that is attributable to common stock subject to redemption, as these shares only participate~~provided in the ~~income~~following table:


(in thousands)	Three Months Ended March 31,
		2022		2021
Total operating income of reportable segments		$	17,389	$	13,044
Corporate		(6,563)		(8,517)
Interest expense		(11,535)		(9,168)


Other income (expense), net		51		(269)
Income tax benefit		325		2,231
Net loss		$	(333)	$	(2,679)

Table of Con tents

14. Loss per Common Share

The following tables set forth the computation of the ~~Trust Account and not the losses of the Company. Accordingly,~~Company's basic and diluted loss per common share:


(in thousands except per share amounts)	Three Months Ended March 31,
		2022		2021
Numerator:
Net loss		$	(333)	$	(2,679)
Less: Dividends and accretion attributable to redeemable senior preferred stockholders		(8,400)		—


Net loss attributable to common stockholders		$	(8,733)	$	(2,679)
Denominator:
Basic and diluted:
Weighted-average common shares outstanding(1)		78,597		67,543
Loss per common share		$	(0.11)	$	(0.04)

(1)The weighted-average common shares outstanding includes 1,803,841 warrants issued in the second quarter of 2021.

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

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

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

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

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

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

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

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

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

~~Common stock subject to possible conversion~~

Three Months Ended March 31,
(in thousands) 2022 2021
Outstanding warrants on common stock(1)
3,557 3,557
Outstanding options and warrants issued to adviser(2)
600 600
Restricted stock awards(3)
2,284 842
Outstanding stock option awards(3)
1,203 1,394
Total 7,644 6,393

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

~~Income Taxes~~

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

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company is required to file income tax returns in the United States (federal) and in various state and local jurisdictions. Based on the Company’s evaluation, it has been concluded that there are no significant uncertain tax positions requiring recognition in the Company’s financial statements. Since the Company was incorporated on April 23, 2015, the evaluation was performed for the 2015 and 2016 tax year. The Company believes that its income tax positions and deductions would be sustained on audit and does not anticipate any adjustments that would result in a material change to its financial position.

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

~~Related Parties~~

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

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

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

~~Settlement Income~~

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

~~Subsequent Events~~

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

~~Recent Accounting Pronouncements~~

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

~~Note 3 — Initial Public Offering~~

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

~~Each Unit consists of one share of common stock in the Company, and one Warrant (“Warrant”). Each Warrant entitles the holder to purchase one share of common stock at a price of~~ $11.50 per share ~~commencing~~and expire on ~~the later of 30 days after the Company’s completion of its initial Business Combination or September 14, 2017,~~August 24, 2023.

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

~~Note 4 — Private Units~~

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

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

~~Note 5 — Notes Payable~~

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

~~Note 6 — Commitments~~

~~Underwriting Agreement~~

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

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

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

~~Purchase Option~~

~~The Company sold to the underwriters, for $100, a unit purchase option to purchase up to a total of 300,000 units~~ exercisable at $12.00 per ~~unit (or an aggregate exercise price~~share and expire on August 24, 2023.

(3)Granted under the 2018 Plan.

Table of $3,600,000) commencing on the later of the consummation of a Business Combination and six months from September 13, 2016. The unit purchase option expires five years from September 13, 2016. The units issuable upon exercise of this option are identical to the Units being offered in the Offering. The Company has agreed to grant to the holders of the unit purchase option, demand and “piggy back” registration rights for periods of five and seven years, respectively, from September 13, 2016, including securities directly and indirectly issuable upon exercise of the unit purchase option.

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

~~Registration Rights~~

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

~~Administrative Service Fee~~

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

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

~~Note 7 — Stockholder’s Equity~~

~~Preferred Stock~~

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

Con tents

~~As of September 30, 2017, there are no preferred shares issued or outstanding.~~

~~Common Stock~~

~~Amended and Restated Certificate of Incorporation~~

~~The Company’s Certificate of Incorporation was amended in connection with the Offering to reduce the Company’s authorized shares of common stock from 50,000,000 to 30,000,000.~~

~~The Company is authorized to issue 30,000,000 shares of common stock with a par value of $0.001 per share.~~

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

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

The Company’s insiders have agreed (A) to vote their insider shares, private shares and any public shares acquired in or after the Offering in favor of any proposed Business Combination, (B) not to propose, or vote in favor of, an amendment to the Company’s certificate of incorporation that would affect the substance or timing of its obligation to redeem 100% of its public shares if it does not complete its initial business combination within 18 months from the closing of the Offering (or 21 months, as applicable), unless the Company provides its public stockholders with the opportunity to redeem their shares of common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its franchise and income taxes, divided by the number of then outstanding public shares, (C) not to convert any shares (including the insider shares and private shares) into the right to receive cash from the Trust Account in connection with a stockholder vote to approve the Company’s proposed initial Business Combination (or sell any shares they hold to the Company in a tender offer in connection with a proposed initial Business Combination) or a vote to amend the provisions of the Company’s certificate of incorporation relating to the substance or timing of its obligation to redeem 100% of the Company’s public shares if it does not complete its initial business combination within 18 months from the closing of the Offering (or 21 months, as applicable) and (D) that the insider shares and private shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the Trust Account if a Business Combination is not consummated.

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

~~Forward-Looking Statements~~

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our ~~condensed financial statements~~Audited Consolidated Financial Statements and related ~~notes thereto~~Notes and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021.

Cautionary Note Regarding Forward-looking Statements

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

•the impact of the COVID-19 pandemic;

•competition in the payment processing industry;

•the use of distribution partners;

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

•any breakdowns in our processing systems;

•government regulation, including regulation of consumer information;

•the use of third-party vendors;

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

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

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

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

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

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

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

Table of Con tents

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

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

Terms Used in this Quarterly Report on Form 10-Q

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

Table of Con tents

Results of Operations

This section includes certain components of our results of operations for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. We have derived this data, except key indicators for merchant bankcard processing dollar values and transaction volumes, from our Unaudited Consolidated Financial Statements included elsewhere in this ~~report.~~

~~Overview~~

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

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

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

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

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

~~Results of Operations~~

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

~~For the three and nine months~~year ended September 30, 2017, we had a net income and net loss of $152,350 and $(111,519), respectively. During the three and nine months ended September 30, 2017, we incurred $367,033 and $714,534, respectively, of general and administrative expenses and $30,000 and $90,000, respectively, of administrative fees paid to a related party. For the three and nine months ended September 30, 2017, these expenses were offset by other income totaling $549,383 and $693,015. respectively. December 31, 2021.

Revenue

For the three months ended ~~September 30, 2017, other income was comprised~~March 31, 2022, our consolidated revenue of ~~interest income of $121,682 and settlement income of $427,701, which we received~~$153.2 million increased by $39.9 million, or 35.2%, from ~~an entity that decided that it no longer wished to engage in a transaction with us. The settlement income received was approximately~~$113.3 million for the ~~amount of the expenses we incurred pursuing that transaction. For the nine~~three months ended ~~September 30, 2017, other income~~March 31, 2021. This overall increase was ~~comprised of interest income of $265,314~~mainly driven by an increase in bankcard volumes fueled by increased consumer spending and ~~settlement income of $427,701.~~

acquisitions completed by the Company in 2021.

The following table presents our revenues by type for the three months ended March 31, 2022 and 2021:


(in thousands)	Three Months Ended March 31,
	2022		2021		$ Change		% Change
Revenue Type:
Merchant card fees	$	127,952	$	107,702	$	20,250	18.8	%
Outsourced services and other services	7,097		4,378		2,719		62.1	%
Money transmission services revenue	16,283		—		16,283		nm
Equipment	1,907		1,217		690		56.7	%
Total revenues	$	153,239	$	113,297	$	39,942	35.3	%

For the three ~~and nine~~ months ended ~~September 30, 2016, we had a net loss~~March 31, 2022, our merchant card fees revenue of ~~$36,382 and $43,646, respectively. During~~$128.0 million increased by $20.3 million, or 18.8%, from $107.7 million for the three ~~and nine~~ months ended March 31, 2021. This increase was primarily driven by an increase in the merchant bankcard volume processed by the Company and purchased residuals related to the C&H acquisition, slightly offset by rate decreases.

Outsourced services and other services revenue of $7.1 million for the three months ended March 31, 2022 increased by $2.7 million, or 61.4%, from $4.4 million for the three months ended March 31, 2021, primarily due to growth in revenue from AP automation solutions and the acceleration of certain customer programs which were scaled back in 2021 due to the impact of the COVID-19 pandemic.

Money transmission services revenue of $16.3 million for the three months ended March 31, 2022 is related to the acquisition of Finxera in September ~~30, 2016, we incurred $61,360~~2021.

Equipment revenue of $1.9 million for the three months ended March 31, 2022 increased by $0.7 million, or 58.3%, from $1.2 million for the three months ended March 31, 2021. The increase was primarily due to increased sales of mobile card reader equipment and ~~$68,624, respectively,~~other equipment from our MX product line.

Table of Con tents

Operating Expenses

Operating expenses for three months ended March 31, 2022 and 2021 were as follows:


(in thousands)	Three Months Ended March 31,
	2022		2021		$ Change		% Change
Operating expenses
Costs of services	$	101,480	$	81,863	$	19,617	24.0	%
Salary and employee benefits	16,077		9,548		6,529		68.4	%
Depreciation and amortization	17,353		9,070		8,283		91.3	%
Selling, general and administrative	7,503		8,289		(786)		(9.5)	%
Total operating expenses	$	142,413	$	108,770	$	33,643	30.9	%

Costs of Services

Costs of services of $101.5 million for the three months ended March 31, 2022 increased by $19.6 million, or 23.9%, from $81.9 million for the three months ended March 31, 2021, primarily due to the corresponding increase in revenues. For the three months ended March 31, 2022, costs of services as a percentage of total revenues decreased to 66.2% as compared to 72.3% for the three months ended March 31, 2021. This decrease was primarily due to the impact of the Finxera acquisition on gross profit margins, partially offset by bankcard volume growth from larger partners with higher commissions and contraction of the specialized merchant acquiring portfolio.

Salary and Employee Benefits

Salary and employee benefits expense of $16.1 million for the three months ended March 31, 2022 increased by $6.6 million, or 69.5%, from $9.5 million for the three months ended March 31, 2021, primarily due to increases in headcount related to our acquisition of Finxera in September 2021, an increase in stock-based compensation and overall growth of the Company.

Depreciation and Amortization Expense

Depreciation and amortization expense of $17.4 million for the three months ended March 31, 2022 increased by $8.3 million, or 91.2%, from $9.1 million for the three months ended March 31, 2021, primarily due to the amortization of finite-lived intangible assets acquired from the business combinations completed during 2021.

Selling, General and Administrative

Selling, general and administrative expenses ~~and $5,667 and $5,667, respectively,~~ of ~~administrative fees paid to a related party. For~~$7.5 million for the ~~nine~~three months ended March 31, 2022 decreased by $0.8 million, or 9.6%, from $8.3 million for the three months ended March 31, 2021, primarily due to an increase in expenses from acquired businesses offset by one-time transaction expenses in the prior year period.

Other (Expenses) Income, net


(in thousands)	Three Months Ended March 31,
	2022		2021		$ Change		% Change
Other (expense) income
Interest expense	$	(11,535)	$	(9,168)	$	(2,367)	25.8	%


Other income (expense), net	51		(269)		320		(119.0)	%
Total other expense, net	$	(11,484)	$	(9,437)	$	(2,047)	21.7	%

Table of Con tents

Interest Expense

Interest expense of $11.5 million for the three months ended March 31, 2022 increased by $2.3 million, or 25.0%, from $9.2 million for the three months ended March 31, 2021, due to additional borrowings to fund the acquisition of Finxera in September ~~30, 2016,~~2021.

Income Tax Expense


(in thousands)	Three Months Ended March 31,
	2022			2021			$ Change		% Change
Loss before income taxes	$	(658)		$	(4,910)		$	4,252	(86.6)	%
Income tax benefit	$	(325)		$	(2,231)		$	1,906	(85.4)	%
Effective tax rate	49.4		%	45.4		%

We compute our interim period income tax expense or benefit by using a forecasted EAETR and adjust for any discrete items arising during the interim period and any changes in our projected full-year business interest expense and taxable income. The EAETR for 2022 is 51.5% and includes the income tax provision on pre-tax income and a tax provision related to establishment of a valuation allowance for deferred income tax on the future portion of the Section 163(j) limitation created by additional 2022 interest expense. The effective tax rate for 2022 increased primarily due to an increase in the valuation allowance against certain business interest carryover deferred tax assets.

Our consolidated effective income tax rates differ from the statutory rate due to timing and permanent differences between amounts calculated under accounting principles GAAP and the U.S. tax code. The consolidated effective income tax rate for 2022 may not be indicative of our effective tax rate for future periods.

Segment Results

The Company reorganized its business segments as of December 31, 2021, resulting in three segments: SMB Payments, B2B Payments and Enterprise Payments. Segment results included in the discussion below were restated in accordance with the new segment structure for comparison purposes.

Table of Con tents

The impact of the restatement of the prior period results is as follows:


(in thousands)	Three Months Ended March 31, 2021
	SMB Payments(1)		B2B Payments(2)		Enterprise Payments(3)
Revenue:
Restated	$	109,101	$	3,500	$	696
Historically reported	108,393		3,500		1,404
Difference	$	708	$	—	$	(708)
Operating Income (Loss):
Restated	$	13,289	$	(409)	$	164
Historically reported	13,363		(409)		92
Difference	$	(74)	$	—	$	72
Depreciation and Amortization:
Restated	$	8,708	$	74	$	—
Historically reported	8,579		74		129
Difference	$	129	$	—	$	(129)

(1)Compared to the Company's legacy Consumer Payments segment.

(2)Compared to the Company's legacy Commercial Payments segment.

(3)Compared to the Company's legacy Integrated Partners segment.

SMB Payments


(in thousands)	Three Months Ended March 31,
	2022			2021			$ Change		% Change
Revenue	$	129,959		$	109,101		$	20,858	19.1	%
Operating expenses	117,473			95,812			21,661		22.6	%
Operating income	$	12,486		$	13,289		$	(803)	(6.0)	%
Operating margin	9.6		%	12.2		%
Depreciation and amortization	$	10,824		$	8,708		$	2,116	24.3	%
Key Indicators:
Merchant bankcard processing dollar value	$	14,076,847		$	11,883,166		$	2,193,681	18.5	%
Merchant bankcard transaction volume	145,948			127,583			18,365		14.4	%

Revenue

Revenue from our SMB Payments segment was $130.0 million for the three months ended March 31, 2022, compared to $109.1 million for the three months ended March 31, 2021. The increase of $20.9 million, or 19.2%, was primarily driven by increased merchant bankcard volume. The Company's revenue from the SMB Payments segment as a percentage of merchant bankcard processing dollar value during 2022 decreased to 0.88% from 0.90% during 2021. The decrease is primarily driven by a decrease in revenue from the specialized merchant acquiring portfolio offset by an increase in other fees revenues.

Operating Income

Operating income from our SMB Payments segment was ~~comprised~~$12.5 million for the three months ended March 31, 2022, compared to $13.3 million for the three months ended March 31, 2021. The decrease of ~~interest~~$0.8 million, or 6.0%, was primarily driven by the increase in volumes from partners with higher commissions.

Table of Con tents

Depreciation and Amortization

Depreciation and amortization expense from our SMB Payments segment was $10.8 million for the three months ended March 31, 2022, compared to $8.7 million depreciation expense for the three months ended March 31, 2021. The increase of $2.1 million was primarily driven by the amortization of acquired intangibles resulting from the C&H and Wholesale Payments, Inc. acquisitions.

B2B Payments


(in thousands)	Three Months Ended March 31,
	2022			2021			$ Change		% Change
Revenue	$	5,925		$	3,500		$	2,425	69.3	%
Operating expenses	5,516			3,909			1,607		41.1	%
Operating income (loss)	$	409		$	(409)		$	818	(200.0)	%
Operating margin	6.9		%	(11.7)		%
Depreciation and amortization	$	73		$	74		$	(1)	(1.4)	%
Key Indicators:
Merchant bankcard processing dollar value	$	108,407		$	63,650		$	44,757	70.3	%
Merchant bankcard transaction volume	88			39			49		125.6	%

Revenue

Revenue from our B2B Payments segment was $5.9 million for the three months ended March 31, 2022, compared to $3.5 million for the three months ended March 31, 2021. The increase of $2.4 million, or 68.6%, was primarily driven by $1.5 million, or 42.9%, as a result of the acceleration of certain programs in the Managed Services business operations that were scaled back in 2021 as a result of the COVID-19 pandemic and volume growth in the CPX business. The remaining increase of $0.9 million, or 25.7%, is from the recognition of certain revenues for which recovery became probable during the current quarter.

Operating Income (Loss)

Operating income from our B2B Payments segment was $0.4 million for the three months ended March 31, 2022, compared to an operating loss of ~~$30,645.~~

$(0.4) million for the three months ended March 31, 2021. The increase of $0.8 million, or 200.0%, was primarily attributable to increases in revenue.

Enterprise Payments


(in thousands)	Three Months Ended March 31,
	2022			2021			$ Change		% Change
Revenue	$	17,355		$	696		$	16,659	nm
Operating expenses	12,861			532			12,329		nm
Operating income	$	4,494		$	164		$	4,330	nm
Operating margin	25.9		%	23.6		%
Depreciation and amortization	$	6,197		$	—		$	6,197	nm
Key Indicators:
Merchant bankcard processing dollar value	$	216,398		$	—		$	216,398	nm
Merchant bankcard transaction volume	372			—			372		nm

Table of Con tents

Revenue

Revenue from our Enterprise Payments segment was $17.4 million for the three months ended March 31, 2022, compared to $0.7 million for the three months ended March 31, 2021. The increase of $16.7 million was primarily driven by revenues contributed by the Finxera business acquired in September 2021.

Operating Income

Operating income from our Enterprise Payments segment was $4.5 million for the three months ended March 31, 2022, compared to $0.2 million for the three months ended March 31, 2021. The increase of $4.3 million was primarily driven by operating income contributed by the Finxera business acquired in September 2021.

Depreciation and Amortization

Depreciation and amortization expense from our Enterprise Payments segment was $6.2 million for the three months ended March 31, 2022, compared to no depreciation expense for the three months ended March 31, 2021. The increase of $6.2 million was primarily driven by the amortization of acquired intangibles resulting from the Finxera acquisition in September 2021.

Liquidity and Capital Resources

Liquidity and capital resource management is a process focused on providing the funding we need to meet our short-term and long-term cash and working capital needs. We have used our funding sources to build our merchant portfolio, for technology solutions and to make acquisitions with the expectation that such investments will generate cash flows sufficient to cover our working capital needs and other anticipated needs, including for our acquisition strategy. We anticipate that cash on hand, funds generated from operations and available borrowings under our revolving credit agreement are sufficient to meet our working capital requirements for at least the next twelve months. This is based upon management's estimates and assumptions, including utilizing the most currently available information regarding the effects of the COVID-19 pandemic on our financial results. Actual future results could differ materially, as the magnitude, duration and effects of the COVID-19 pandemic are difficult to predict, and ultimately could negatively impact our liquidity and capital resources.

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

Our working capital, defined as current assets less current liabilities, was $18.9 million at March 31, 2022 and $19.6 million at December 31, 2021. As of ~~September 30, 2017,~~March 31, 2022, we had cash ~~outside~~totaling $13.6 million compared to $20.3 million at December 31, 2021. These cash balances do not include restricted cash of $13.6 million and $28.9 million at March 31, 2022 and December 31, 2021, respectively, which reflects cash accounts holding customer settlement funds and cash reserves for potential losses. The current portion of long-term debt included in current liabilities was $6.2 million at March 31, 2022 and December 31, 2021.At March 31, 2022, we had availability of approximately $30.0 million under our ~~trust account~~revolving credit arrangement.

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


	Three Months Ended March 31,
(in thousands)	2022		2021
Net cash provided by (used in):
Operating activities	$	9,613	$	9,100
Investing activities	(5,711)		(5,691)
Financing activities	2,538		(26,769)
Net increase in cash and cash equivalents and restricted cash	$	6,440	$	(23,360)

Table of ~~$479,382.~~

~~Our liquidity needs have been satisfied to date through~~Con tents

Cash Provided by Operating Activities

Net cash provided by operating activities was $9.6 million and $9.1 million for the ~~Offering, the receipt of $25,000~~three months March 31, 2022 and 2021, respectively. The $0.5 million, or 5.5%, increase in 2022 was primarily driven by cash generated from the sale of the insider shares and loans from insiders and a related party and an unrelated party in an aggregate amount of $186,720. During the nine months ended September 30, 2017, we withdrew interest income totaling $71,702 to be utilized for payment of tax obligations. In addition, we received $427,701 from a company with which we were negotiating a business combination after it decided that it no longer wished to engage in a transaction with us. The amount received was approximately the amount of the expenses we incurred in pursuing that transaction.

We intend to use substantially all of the net proceeds of the Offering, including the funds held in the trust account, in connection with our initial business combination and to pay our expenses relating thereto, including a deferred underwriting commission payable to Chardan Capital Markets, LLC in an amount equal to 2.0% of the total gross proceeds raised in the offering upon consummation of our initial business combination. To the extent that our capital stock is used in whole or in part as consideration to effect our initial business combination, the remaining proceeds held in the trust account as well as any other net proceeds not expended will be used as working capital to finance the operations of the ~~target business. Such working capital funds could be~~Company, offset by changes in operating assets and liabilities

Cash Used in Investing Activities

Net cash used in ~~a variety~~investing activities was $5.7 million for both the three months ended March 31, 2022 and 2021. For the three months ended March 31, 2022, net cash used in investing activities included $2.4 million related to the funding of ~~ways including continuing or expanding the target business’ operations, for strategic~~new loans to ISOs, additions to property, equipment and software of $2.4 million, and acquisitions ~~and for marketing, research and development~~ of ~~existing or new products. Such funds could also be~~intangible assets of $0.9 million. For three months ended March 31, 2021, net cash used in investing activities included $2.9 million of cash used to ~~repay any operating expenses or finders’ fees which~~fund a portfolio acquisition and $2.8 million of cash used to acquire property, equipment and software.

Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities was $2.5 million for the three months ended March 31, 2022, compared to $26.8 million of cash used in financing activities for the three months ended March 31, 2021. The net cash provided by financing activities for three months ended March 31, 2022 included $6.6 million of cash used for the repayment of debt, $3.5 million of cash dividends paid to redeemable senior preferred stockholders and $0.2 million of cash used for other financing activities, offset by changes in the net obligations for funds held on the behalf of customers of $12.7 million. The net cash used in financing activities for the three months ended March 31, 2021 included $22.5 million of cash used related to changes in the net obligations for funds held on behalf of customers and $4.9 million of cash used for the repayment of debt, slightly offset by $0.6 million of cash provided by other financing activities.

Long-Term Debt

As of March 31, 2022, we had ~~incurred prior~~outstanding debt obligations, including the current portion and net of unamortized debt discount of $604.6 million, compared to $610.3 million at December 31, 2021, resulting in a decrease of $5.7 million. The debt balance at March 31, 2022 consisted of $615.3 million outstanding under the term facility and $10.0 million outstanding under the revolving credit facility, offset by $20.7 million of unamortized debt discounts and issuance costs. Minimum amortization of the term facility are equal quarterly installments in aggregate annual amounts equal to 1.0% of original principal, with the balance paid upon maturity. The term facility matures in April 2027 and the revolving credit facility expires in April 2026.

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

If the ~~funds available to us outside~~aggregate principal amount of outstanding revolving loans and letters of credit under the Credit Agreement exceeds 35% of the ~~trust account were insufficient~~total revolving facility thereunder, the loan parties are required to ~~cover such expenses.~~

~~We anticipate that~~comply with certain restrictions on its Total Net Leverage Ratio. If applicable, the ~~amounts outside~~maximum permitted Total Net Leverage Ratio is: 1) 6.50:1.00 at each fiscal quarter ended September 30, 2021 through June 30, 2022; 2) 6.00:1.00 at each fiscal quarter ended September 30, 2022 through June 30, 2023; and 3) 5.50:1.00 at each fiscal quarter ended September 30, 2023 each fiscal quarter thereafter. As of March 31, 2022, the Company was in compliance with our ~~trust account will be insufficient to allow us to operate until March 19, 2018 (if an extension is not completed). We expect to~~financial covenants.

Critical Accounting Policies and Estimates

Our Unaudited Consolidated Financial Statements have to raise additional capital through loans or additional investments from our shareholders, officers, directors, or third parties to allow us to operate until March 19, 2018 (if an extension is not completed). Nonebeen prepared in accordance with GAAP for interim periods, which often require the judgment of management in the ~~shareholders, officers or directors~~selection and application of certain accounting principles and methods. Our critical accounting policies and estimates are ~~under any obligation to advance funds to, or to invest~~discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our ~~company. Accordingly, we~~Annual Report on Form 10-K for the year ended December 31, 2021. There have been no material changes to these critical accounting policies and estimates as of March 31, 2022.

Table of Con tents

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

From time to time, new accounting pronouncements are issued by the FASB or other standards setting bodies that may affect our current and/or future financial statements. See Note 1, Basis of Presentation and Significant Accounting Policies, to our Unaudited Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, for a discussion of recently issued accounting pronouncements not be able to obtain additional financing. If we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses. We cannot provide any assurance that new financing will be available to us on commercially acceptable terms, if at all. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

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

~~Off-Balance Sheet Arrangements~~

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

yet adopted.

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

For quantitative and qualitative disclosures about market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of ~~September 30, 2017, we were~~our Annual Report on Form 10-K for the year ended December 31, 2021. Our exposures to market risk have not subject to any market or interest rate risk. Following the consummation of the Offering, the net proceeds of the Offering, including amounts in the trust account, may only be invested in U.S. government treasury bills, notes or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in US treasuries. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.

changed materially since December 31, 2021.

Item 4. Controls and Procedures

(a)Evaluation of Disclosure Controls and Procedures

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

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

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

disclosures.

Management, with the participation of the CEO and CFO, has evaluated the effectiveness of the Company's disclosure controls and procedures as of March 31, 2022. Based on that evaluation, the Company's CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of March 31, 2022.

(b)Changes in Internal Control over Financial Reporting

There ~~was~~were no ~~change~~changes in ~~our~~the Company's internal control over financial reporting ~~that occurred~~ during the ~~fiscal quarter of 2017 covered by this Quarterly Report on Form 10-Q~~three months ended March 31, 2022 that ~~has~~have materially affected, or isare reasonably likely to materially affect, ~~our~~the Company's internal control over financial reporting.

Table of Con tents

PART ~~II -~~II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

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

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

Unregistered Sales of Equity Securities

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

None.

Issuer Purchases of ~~one share~~Equity Securities

The Company's purchases of its common stock ~~(“Common Stock”), and one warrant (“Public Warrant”)~~during the three months ended March 31, 2022 were as follows:


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1-31, 2022	—	$	—	—	—
February 1-28, 2022	26,671	$	5.86	—	—
March 1-31, 2022	—	$	—	—	—
Total	26,671			—

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

~~The Private Units are identical~~satisfy employees' tax withholding obligations related to the units sold in the Offering except the warrants included in the Private Units will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the initial purchasers or their permitted transferees. The holdersvesting of the Private Units have agreed (A) to vote their private shares and any public shares acquired by them in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our certificate of incorporation that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2018 (or June 13, 2018, as applicable), unless we provide our public stockholders with the opportunity to redeem their shares of commonrestricted stock ~~upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest earned~~awards, which was determined based on the ~~funds held in~~fair market value on the ~~trust account and not previously released to us to pay our franchise and income taxes, divided by the number~~vesting date.

Item 3. Defaults Upon Senior Securities

N/A

Item 4. Mine Safety Disclosures

N/A

Item 5. Other Information

N/A

Table of then outstanding public shares, (C) not to convert any shares (including the private shares) into the right to receive cash from the trust account in connection with a stockholder vote to approve our proposed initial business combination (or sell any shares they hold to us in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of our certificate of incorporation relating to the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination by March 13, 2018 (or June 13, 2018, as applicable) and (D) that the private shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the trust account if a business combination is not consummated. Additionally, our insiders (and/or their designees) have agreed not to transfer, assign or sell any of the private units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of our initial business combination.

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

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

~~For a description of the use of the proceeds generated in our initial public offering, see Part I, Item 2 of this Form 10-Q.~~

Con tents

Item 6. ~~Exhibits.~~

Exhibits

~~Exhibit No.~~	~~Description~~
Exhibit		Description
2.1		Second Amended and Restated Contribution Agreement, dated as of April 17, 2018, by and among Priority Investment Holdings, Priority Incentive Equity Holdings, LLC and M I Acquisitions, Inc. (incorporated by reference to Annex A to the Company's Proxy Statement on Schedule 14(a), filed July 5, 2018).
2.2†		Agreement and Plan of Merger, dated as of March 5, 2021, by and among the Company, Finxera, Merger Sub, and the Equityholder Representative.
2.3		Certificate of Amendment to the Certificate of Incorporation of Priority Technology Holdings dated April 16, 2021, filed April 29, 2021
2.4		Agreement and Plan of Merger by and among the Company, Finxera Holdings, Inc., Prime Warrior Acquisition Corp., and Stone Point Capital LLC.
3.1		Second Amended and Restated Certificate of Incorporation of Priority Technology Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed July 31, 2018).
3.2		Amended and Restated Bylaws of Priority Technology Holdings, Inc. (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, filed July 31, 2018).
3.3		Certificate of Designations of Senior Preferred Stock
4.4		Warrant Agreement, dated September 13, 2016, by and between American Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed September 16, 2016).
10.1		Registration Rights Agreement dated as of July 25, 2018 by and among M I Acquisitions, Inc. and the other parties thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed July 31, 2018).
10.2†		Priority Technology Holdings, Inc. 2018 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed July 31, 2018).
10.3		Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
10.3.1		Amendment No. 1 to Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan
10.4†		Credit Agreement, dated as of April 27, 2021, among the Loan Parties name therein and Truist Bank.
10.5†		Director Agreement by and among Priority Holdings LLC, Pipeline Cynergy Holdings, LLC, Priority Payment Systems Holdings, LLC and Thomas C. Priore, dated May 21, 2014 (incorporated by reference to Exhibit 10.6 to the Company's Registration Statement on Form S-4/A, filed December 26, 2018).
10.6†		Amendment No. 1 to Director Agreement by and among Priority Holdings LLC, Pipeline Cynergy Holdings, LLC, Priority Payment Systems Holdings, LLC and Thomas C. Priore, dated April 19, 2018 (incorporated by reference to Exhibit 10.7 to the Company's Registration Statement on Form S-4/A, filed December 26, 2018).
10.11†		Executive Employment Agreement between Priority Technology Holdings, Inc. and Michael Vollkommer, dated December 20, 2018 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed December 26, 2018).
10.12†		Restricted Stock Unit Award Agreement between Priority Technology Holdings, Inc. and Michael Vollkommer, dated December 20, 2018 (incorporated by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K, filed March 29, 2019).


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

Table of Con tents


10.21†			Credit Agreement, dated as of April 27, 2021, among the Loan Parties name therein and Truist Bank
10.22			Amendment No. 2, dated September 17, 2021, to the Credit Agreement, dated as of April 27, 2021, by and among the Loan Parties named therein and Truist Bank.
10.23 *			Form Restricted Stock Unit Award Agreement
21.1			Subsidiaries
31.1 *			Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d-14(a), promulgated under the Securities and Exchange Act of 1934, as amended.

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

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

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

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

* Filed herewith.

** Furnished herewith.

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

Table of Con tents

SIGNATURES

~~In accordance with~~

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

PRIORITY TECHNOLOGY HOLDINGS, INC.

	~~M I ACQUISITIONS, INC.~~
May 11, 2022
	~~By:~~	/s/ ~~Joshua Sason~~
	~~Joshua Sason~~
	Thomas C. Priore Thomas C. Priore President, Chief Executive Officer and Chairman (Principal ~~executive officer)~~Executive Officer)

May 11, 2022			~~By:~~	/s/ ~~Marc Manuel~~
	~~Marc Manuel~~
	Michael Vollkommer Michael Vollkommer Chief Financial Officer (Principal ~~financial and accounting officer)~~Financial Officer)

~~Date: November 14, 2017~~

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

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

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

Registrant's telephone number, including area code: (800) 935-5961

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


Term						Definition
2018 Plan						2018 Equity Incentive Plan
2021 Stock Purchase Plan						Priority Technology Holdings, Inc. 2021 Employee Stock Purchase Plan

AP						Accounts payable

ASC						Accounting Standards Codification
ASU						Accounting Standards Update
B2B						Business-to-business
B2C						Business-to-consumer
C&H						C&H Financial Services, Inc.
CEO						Chief Executive Officer
CFO						Chief Financial Officer
Credit Agreement						Credit and Guaranty Agreement with Truist Bank dated as of April 27, 2021
EAETR						Estimated annual effective tax rate
EBITDA						Earnings before interest, taxes, depreciation and amortization
EGC						Emerging Growth Company
Exchange Act						Securities Exchange Act of 1934
FASB						Financial Accounting Standards Board
FBO						For the Benefit Of
FI						Financial Institution
Finxera						Finxera Holdings, Inc.
GAAP						U.S. Generally Accepted Accounting Principles

ISO						Independent sales organization
ISV						Independent software vendor
JOBS Act						Jumpstart Our Business Startups Act of 2012
LIBOR						London Interbank Offered Rate
nm						not meaningful




PIK						Payment-in-kind

SEC						Securities and Exchange Commission
SMB						Small to medium-sized businesses



Term facility						$620.0 million senior secured term loan facility issued under the Credit Agreement (including $320.0 million delayed draw facility)
Total Net Leverage Ratio						the ratio of consolidated total debt to the Consolidated Adjusted EBITDA (as defined in the Credit Agreement)

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

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

Liabilities and Stockholders’ Equity

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

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

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

Commitments

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

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

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

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

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

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

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

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

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

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

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


	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Deficit Attributable to Stockholders
	Shares	$		Shares	$
December 31, 2021	76,740	$	77	720	$	(4,091)	$	39,835	$	(100,058)	$	(64,237)
Equity-classified stock-based compensation	—	—		—	—		1,558		—		1,558
Vesting of stock-based compensation	129	—		—	—		—		—		—




Share repurchases and shares withheld for taxes	(27)	1		27	(157)		(1)		—		(157)

Dividends on redeemable senior preferred stock	—	—		—	—		(7,595)		—		(7,595)
Accretion of redeemable senior preferred stock	—	—		—	—		(805)		—		(805)

Net loss	—	—		—	—		—		(333)		(333)
March 31, 2022	76,842	$	78	747	$	(4,248)	$	32,992	$	(100,391)	$	(71,569)


(in thousands)	Three Months Ended March 31, 2021
Net cash (used in) provided by operating activities:
Historically reported	$	(13,426)
Adjustment	22,526
Reclassified	9,100
Net cash used in financing activities:
Historically reported	(4,243)
Adjustment	(22,526)
Reclassified	$	(26,769)

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

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

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

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

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

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