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final_prth-responsetosec

  Troutman Pepper Hamilton Sanders LLP  600 Peachtree Street NE, Suite 3000  Atlanta, GA  30308-2216  troutman.com      November 10, 2022    VIA EDGAR    United States Securities and Exchange Commission  Division of Corporation Finance  Office of Trade & Services  100 F Street, NE  Washington, D.C. 20549  Attn: Blaise Rhodes and Angela Lumley    Re:  Priority Technology Holdings, Inc.  Form 10-K for the Fiscal Year Ended December 31, 2021, filed March  16, 2022  Form 8-K filed March 16, 2022  Form 8-K filed May 11, 2022  File No. 001-37872  Ladies and Gentlemen:  At the request and on behalf of our client, Priority Technology Holdings, Inc. (the  “Company”, “we”, “us”, “our”), we are submitting our response to the comments received from  the staff (the “Staff’) of the Securities and Exchange Commission’s (the “Commission”) Division  of Corporation Finance by  comment letter dated October 31, 2022, with respect to the Form 10- K for the fiscal year ended December 31, 2021, filed with the Commission on March 16, 2022 (the  “Form 10-K”), the Form 8-K filed with the Commission on March 16, 2022 (the “March Form 8- K”), and the Form 8-K filed with the Commission on May 11, 2022, File No.001-37872.    For your convenience, our responses are prefaced by the exact text of the Staff’s  comments in bold, italicized text.   Form 10-K for the Fiscal year Ended December 31, 2021  Item 1. Business - Overview of the Company, page 3  1. We note that you characterize Adjusted EBITDA as a non-GAAP liquidity measure. We  further note on page 4 of Exhibit 99.1 your Form 8-K filed March 16, 2022, that you  describe EBITDA and adjusted EBITDA as a non-GAAP performance measure. Please  revise your disclosures to reconcile for consistency.  Response:

Securities and Exchange Commission  November 10, 2022  Page 2  110025275v2   The Adjusted EBITDA is appropriately described as a non-GAAP performance measure in the  Company’s filing on the March Form 8-K. Reference to the same as a liquidity measure in the  “Item 1. Business - Overview of the Company” section of the Company’s annual report on form  10-K is inadvertent. Accordingly, in response to the Staff’s comment, in our future filings we will  replace the discussion around Adjusted EBITDA in “Item 1. Business - Overview of the Company”  from Form 10-K with Operating Income which is a GAAP performance measure.     2. Please provide the disclosures required by Item 10(e) of Regulation S-K and Regulation  G as it relates to your presentation of the non-GAAP measure, Adjusted EBITDA.  Response:  The Company will not include any non-GAAP performance measures in our annual reports  on Form 10-K or quarterly reports on Form 10-Q. Therefore, disclosures required by item 10(e)  of Regulation S-K and Regulation G will not be applicable for those future filings.   However, the Company does include certain non-GAAP performance measures (i.e.,  Gross Profit, Gross Margin, EBITDA and Adjusted EBITDA) in its press release to investors which  is filed on Form 8-K. The required disclosures by Item 10(e) of Regulation S-K and Regulation G  as it relates to these non-GAAP measures are included therein. The Company will further  enhance its disclosures around Gross Profit and Gross Margin (as further described in our  response to question 4 below)in its future filings.    Item 7. Management's Discussion and Analysis of Financial Condition and Results of  Operations Liquidity and Capital Resources Long-Term Debt, page 34    3. We note the Total Net Leverage Ratio covenant in your debt agreements uses  Consolidated Adjusted EBITDA in the denominator. In prior filings, the debt agreement  and related covenant was determined to be material to an investor's understanding of  your financial condition and/or liquidity. Therefore, you provided the actual Total Net  Leverage Ratio covenant computation (reconciled to GAAP amounts) for the most  recent period and for each reconciling item, their nature and how they were derived.  The disclosure also included the actual or reasonably likely effects of compliance or  noncompliance with the covenant on your financial condition and liquidity. Please tell  us why this disclosure has been removed or revise to include the required disclosures.  Please refer to Question 102.09 of the Non-GAAP Financial Measures Compliance and  Disclosure Interpretations. Similarly revise your disclosures in your Forms 10-Q and 8- K.

Securities and Exchange Commission  November 10, 2022  Page 3  110025275v2   Response:  On April 27, 2021 the Company entered into a new credit and guaranty agreement (“New  Debt Agreement)” which replaced its prior debt agreements. Per this New Debt Agreement, the  maximum Total Net Leverage Ratio (the “Financial Covenant”) is a springing covenant and is  only applicable when the outstanding balance of the revolving credit facility (“Revolver”) exceeds  35% of the limit.  In addition, the Financial Covenant is only applicable to the Revolver and there  is no Financial Covenant related to the term facility. The Financial Covenants were applicable as  of December 31, 2021 as the outstanding balance of the Revolver was $15 million (i.e., 37.5% of  the available limit of $40 million). However, considering that the outstanding balance of the  Revolver continued to decrease and the Total Net Leverage Ratio remained well within the  required limits as per the New Debt Agreement, the covenant was no longer considered a material  term of the debt agreement and therefore the disclosure related to the calculation of Total Net  Leverage Ratio was removed.  Form 8-K Filed May 11, 2022   Exhibit 99.1 Non-GAAP Financial Measures, page 2    4. We note your designation of Gross Profit and Gross Profit Margin as non-GAAP  measures. Please tell us how Gross Profit and Gross Profit Margin, as presented, differ  from the corresponding GAAP Gross Profit and Gross Profit Margin.  Response:  GAAP defines gross profit as revenue less cost of revenue, and includes in cost of revenue  depreciation and amortization expenses related to revenue-generating long-lived and intangible  assets. We define Gross Profit as revenue less cost of revenue (excludes depreciation and  amortization). This measure differs from the GAAP definition of gross profit as we do not include  the impact of depreciation and amortization expenses related to revenue-generating long-lived  and intangible assets which represent non-cash expenses. We use this measure to evaluate  operating margins and the effectiveness of cost management.   In response to the Staff’s comment, we will make following updates in our future filings to  enhance our disclosures:  • label these measures as Gross Profit (non-GAAP) and Gross Profit Margin (non-GAAP)   • include a tabular reconciliation of these two non-GAAP measures to GAAP Gross Profit  and GAAP Gross Profit Margin.   • update cost of revenue line to “cost of revenue (excludes depreciation and amortization)”

Securities and Exchange Commission  November 10, 2022  Page 4  110025275v2   These updated disclosures are included in PRTH’s earnings release for the quarter ended  September 30, 2022 filed on Form 8-K on November 10, 2022.  We appreciate the Staff’s prompt comments and look forward to working with you on this  matter. The Staff is requested to direct any further questions regarding these filings and this letter  to the undersigned at (404) 885-3721.  Thank you.     Sincerely,     /s/ James Stevens     James Stevens