EQUITY

6 Months Ended

Jun. 30, 2019

RECONCILIATION OF STOCKHOLDERS' EQUITY (DEFICIT) AND NON-CONTROLLING INTEREST

The following tables provide a reconciliation of the beginning and ending carrying amounts of equity (deficit) attributable to stockholders of the Company, and equity attributable to non-controlling interest for the periods presented:



(in thousands)																Additional Paid-In Capital			Accumulated (Deficit)			Total Priority Technology Holdings, Inc. Stockholders' (Deficit)			Non-Controlling Interest
	Preferred Stock					Common Stock						Treasury Stock
	Shares		Amount			Shares			Amount			Shares	Amount
																									—
January 1, 2018	—		$	—		73,110			$	73		—	$	—		$	—		$	(90,228	)	$	(90,155	)	$	—
Distribution to members (a)	—		—			—			—			—	—			(188		)	(3,836		)	(4,024		)	—
Member redemption (a)	—		—			(12,565	)		(13		)	—	—			—			(64,890		)	(64,903		)	—
Pro-rata adjustment for redemption (a)	—		—			(724	)		—			—	—			—			—			—			—
Equity-based compensation	—		—			—			—			—	—			188			—			188			—
Net loss	—		—			—			—			—	—			—			(3,177		)	(3,177		)	—
March 31, 2018	—		—			59,821			60			—	—			—			(162,131		)	(162,071		)	—
Distribution to members (a)	—	—	—		—	—		—	—			—	—			(607		)	(1,707		)	(2,314		)	—
Equity-based compensation	—	—	—			250			—			—	—			607			—			607			—
Net loss	—		—			—			—			—	—			—			(5,628		)	(5,628		)	—
June 30, 2018	—		$	—		60,071			$	60		—	$	—		$	—		$	(169,466	)	$	(169,406	)	$	—

January 1, 2019	—		$	—		67,038			$	67		—	$	—		$	—		$	(85,540	)	$	(85,473	)	$	—
Equity-based compensation	—		—			—			—			—	—			1,160			—			1,160			—
Warrant redemptions	—		—			420			(b)			—	—			(b)			—			—			—
Net loss	—		—			—			—			—	—			—			(6,446		)	(6,446		)	—
Issuance of non-controlling interest	—		—			—			—			—	—			—			—			—			5,654
March 31, 2019	—		—			67,458			67			—	—			1,160			(91,986		)	(90,759		)	5,654
Equity-based compensation	—		—			—			—			—	—			1,023			—			1,023			—
Repurchases of common stock	—		—			(451	)		—			451	(2,388		)	—			—			(2,388		)	—
Net loss	—		—			—			—			—	—			—			(14,130		)	(14,130		)	—
June 30, 2019	—		$	—		67,007			$	67		451	$	(2,388	)	$	2,183		$	(106,116	)	$	(106,254	)	$	5,654

(a) Before reverse acquisition and recapitalization on July 25, 2018. See "Corporate Matters" in Note 1, Nature of Business and Basis of Presentation.

(b) Par value of the common shares issued in connection with the warrant exchange rounds to less than one thousand dollars (see Note 12, Equity).

The Company is authorized to issue 100,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. As of June 30, 2019 and December 31, 2018, the Company has not issued any shares of preferred stock.EQUITY

Repurchases of the Company's Common Stock

During the second quarter of 2019, the Company repurchased a total of 451,224 shares of its common stock at an average price of $5.29 per share. Total cash paid by the Company was approximately $2.4 million. The repurchases were authorized under a December 2018 resolution by the Company's board of directors, which expired during the second quarter of 2019.

Warrants for the Company's Common Stock

In August 2018, the Company was informed by Nasdaq that it intended to delist the Company's outstanding warrants and units due to an insufficient number of round lot holders for the public warrants. The Company subsequently filed a Registration Statement on Form S-4 with the SEC for the purpose of offering holders of the Company's outstanding 5,310,109 public warrants and 421,107 private warrants the opportunity to exchange each warrant for 0.192 shares of the Company's common stock. The exchange offer expired in February 2019 resulting in a portion of the warrants being tendered in exchange for approximately 420,000 shares of the Company's common stock plus cash in lieu of fractional shares. Nasdaq proceeded to delist the remaining outstanding warrants and units, which were comprised of one share of common stock and one warrant, from The Nasdaq Global Market at the open of business on March 6, 2019. The delisting of the remaining outstanding warrants and units had no impact on the Company's financial statements.

Earn-Out Consideration

An additional 9.8 million common shares may be issued under the Company's Earn-Out Incentive Plan. For the first earn-out of up to 4.9 million common shares, consolidated adjusted EBITDA (as defined in the Earn-Out Incentive Plan) of the Company must have been no less than $82.5 million for the year ended December 31, 2018 and the Company's stock price must trade in excess of $12.00 for any 20 trading days within any consecutive 30-day trading period at any time on or before December 31, 2019. For the second earn-out of up to 4.9 million common shares, consolidated adjusted EBITDA of the Company must be no less than $91.5 million for the year ending December 31, 2019 and the Company's stock price must trade in excess of $14.00 for any 20 trading days within any consecutive 30-day trading period at any time between January 1, 2019 and December 31, 2020. In the event that the first earn-out targets are not met, the entire 9.8 million shares may be issued if the second earn-out targets are met. As of June 30, 2019 and December 31 2018, none of the 9.8 million shares have been earned. Any unvested shares issued to management or directors under compensation plans will be expensed under the provisions of ASC 718, Stock Compensation.