Quarterly report pursuant to Section 13 or 15(d)

Reconciliation of Stockholders' Equity (Deficit) and Non-Controlling Interest

v3.19.1
Reconciliation of Stockholders' Equity (Deficit) and Non-Controlling Interest
3 Months Ended
Mar. 31, 2019
Equity [Abstract]  
Reconciliation of Stockholders' Equity (Deficit) and Non-Controlling Interest 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 Priority Technology Holdings, Inc., and equity attributable to non-controlling interest:

(in thousands)
 
 
 
 
 
 
 
 
 
Additional Paid-In Capital (Deficit)
 
Accumulated Earnings (Deficit)
 
Total Priority Technology Holdings, Inc. Stockholders' Deficit
 
Non-Controlling Interest
 
 
Preferred Stock
 
Common Stock
 
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

January 1, 2018
 

 
$

 
73,110

 
$
73

 
$

 
$
(90,228
)
 
$
(90,155
)
 
$

Distribution to members (before recapitalization)
 

 

 

 

 
(188
)
 
(3,836
)
 
(4,024
)
 

Member redemption (before recapitalization)
 

 

 
(12,565
)
 
(13
)
 

 
(64,890
)
 
(64,903
)
 

Pro-rata adjustment for redemption (before recapitalization)
 

 

 
(724
)
 

 

 

 

 

Equity-based compensation
 

 

 

 

 
188

 

 
188

 

Net loss
 

 

 

 

 

 
(3,177
)
 
(3,177
)
 

March 31, 2018
 

 
$

 
59,821

 
$
60

 
$

 
$
(162,131
)
 
$
(162,071
)
 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
January 1, 2019
 

 
$

 
67,038

 
$
67

 
$

 
$
(85,540
)
 
$
(85,473
)
 
$

Equity-based compensation
 

 

 

 

 
1,160

 

 
1,160

 

Warrant redemptions
 

 

 
420

 
(a)

 
(a)

 

 

 

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


(a) 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 March 31, 2019 and December 31, 2018, the Company has not issued any shares of preferred stock.EQUITY

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 March 31, 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.