Priority Technology Holdings – Non-Reliance on Financial Statements
Priority Technology Holdings Files Form 8-K Regarding Non-Reliance on Previously Issued Financial Statements
Kehoe Law Firm, P.C. is making investors of Priority Technology Holdings, Inc. (“Priority Technology” or the “Company”) (NasdaqGS: PRTH) aware that on March 30, 2020, the Company filed a Form 8-K (“Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review“) which, among other things, stated that
[o]n March 26, 2020, the Audit Committee of the Board of Directors (the “Audit Committee”) of Priority Technology Holdings, Inc. (the “Company”) concluded, in consultation with management and RSM US LLP (“RSM”), the Company’s independent registered public accounting firm, that the audited consolidated financial statements as of and for the fiscal years ended December 31, 2018 (“FY18”) and 2017 (“FY17”) as contained in the Company’s 2018 Annual Report on Form 10-K, and its unaudited condensed consolidated financial statements as of and for the quarterly periods ended March 31, 2018, June 30, 2018, and September 30, 2018 included in its Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2019 and 2018, June 30, 2019 and 2018, and September 30, 2019 and 2018 (collectively, the “Non-Reliance Periods”) should no longer be relied upon because of misstatements further described below. Similarly, related press releases, earnings releases and investor communications describing the Company’s financial statements for those periods should no longer be relied upon.
During the preparation of its Annual Report on Form 10-K for the year ended December 31, 2019 (the “2019 Annual Report”), the Company identified two errors. First, the Company noted an understatement of losses related to certain settlement activities with the Company’s sponsor banks, merchants and ISOs. The second error noted involved an out-of-period recognition of certain chargeback revenues and related costs of services between 2018 and 2017. An investigation was conducted with the assistance of outside accounting consultants. As a result of the investigation, the Company concluded that the errors had resulted in misstatements in its consolidated financial statements for the periods identified above that were due to a failure to appropriately reconcile certain settlement accounts with the Company’s general ledger.
As reported in the Company’s FY18 Annual Report on Form 10-K, the Company will continue to report in its 2019 Annual Report a material weakness in internal control over financial reporting, as well as in subsequent periods until such material weakness is remediated. [Emphasis added.]
Kehoe Law Firm, P.C.
