From: Jd isaacman
Sent: Thursday, January 28, 2021 4:18:59 PM
To: Taylor Lavery; Sam Bakhshandehpour; Michael Isaacman; Brian Lemon; Jordan Frankel
Subject: Re: [EXT] 2020 YE Budget Results - v6

Taylor can provide the 50 shades version. I don't think she can do it justice in
one shade as there were some very creative accounting decisions that were
made throughout the legacy Shift4 business in order to achieve the YE result.
We should discuss.

Sent from my iPhone

> On Jan 28, 2021, at 3:52 PM, Taylor Lavery <tlavery@shift4.com> wrote:
>
> 
>> Jordan,
>>
>> I have included the bridge from our original budget to actuals for both
>> EBITDA and Revenue.
>>
>> Thanks!
>>
>> [image omitted - financial table summary]
>>
>> Taylor Lavery | SVP Finance
>> Shift4 Payments
>> 2202 N. Irving Street | Allentown, PA 18109
>>> 610-596-1700
>> [image omitted - Shift4 logo]
>>
>>> On Thu, Jan 28, 2021 at 3:13 PM Jordan Frankel <jfrankel@firstatlanticcapital.com>
>>> wrote:
>>>
>>> Can someone send me/us the final bridge from budget to actual for both
>>> EBITDA and Rev?
>>>
>>>
>>> Thanks
>>>
>>> Jordan
>>>
>>> *Jordan Frankel*
>>>
>>> *First Atlantic Capital*
>>>
>>> *P* 212-582-1870 ext 108
>>>
>>> *C* 917-584-8132
>>
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From: Jd isaacman
To: Bradley B. Cohen
(Jan 29, 2021)

Jd isaacman: 4:15 PM
We put up $86.8m of EBITDA for the
year or $88.8m with my $2m fudge.
Pretty solid. What did you want to do
for a press release?

Bradley B. Cohen: 4:16 PM
That great.  I am
psmj,. You?

Jd isaacman: 4:16 PM
Still at office

Bradley B. Cohen: 4:18 PM
Can u call after kids
bed?

Jd isaacman: 4:18 PM
yup

From: Jd isaacman
To: Bradley B. Cohen
(Jan 26, 2021)

Jd isaacman: 7:27 PM
So they did 22.9.
I authorized adding $800k,. Which is 23.7.
We put up 86.8.
FY20.

Bradley B. Cohen:9:25 PM
That's a
Great number.

Jd isaacman: 9:29 PM
Indeed

Bradley B. Cohen: 9:30 PM
Well done

To: Distribution
From: [Redacted]
Date: October 5, 2020
Subject: Accounting Issues

As discussed on our call today, the following items were identified as potential accounting misstatements that
require additional follow-up and correction (if deemed appropriate):

1.  **Accrued Customer Credits:** Shift4 has accrued customer credits for minimum processing commitment
    shortfalls that have not been billed to the customer due to a lack of invoice generation. The majority of the accrual
    was booked during 2018 and the first half of 2019. This is not in accordance with U.S. GAAP, as the
    Company has no present obligation to forego future revenue related to minimum processing fees prior to billing
    such amounts to customers. Shift4 has had a consistent policy and practice of not invoicing minimum shortfall
    fees without explicit customer communication.
2.  **Duplicate Customer Credits:** Shift4 has duplicate customer credits as a result of one-time credit adjustments
    not being properly applied within the Company's merchant processing database during the customer setup
    process. The Company's merchant processing database feeds the reserve calculation, thus the reserve activity
    (revenue and margin) is overstated due to such credits.
3.  **Point-of-Sale ("POS") System Placements:** During 2019, the Company recorded the installation of SkyTab
    and other hardware packages that did not meet the definition of a sale in accordance with ASC 606 – Revenue
    from Contracts with Customers. The arrangements did not meet the definition of a sale due to the terms of
    repayment and ongoing hardware support/warranties.

Follow-Up Items:
*   For item #1, [Redaction].
*   For item #2, [Redaction].
    For item #3, the accounting for these transactions should be re-evaluated and potentially accounted for
    as an operating lease.

Please let me know if you have any questions.

9. In late January 2021, after Shift4 calculated its final financial statements for
2020,1 learned that Shift4 had identified and made certain accounting adjustments-
which it referred to internally as "true-up" adjustments-that significantly reduced
Shift4's reported 2020 revenue and EBITDA.

11. I understand that FAC contends there were three "buckets" of accounting adjustments during 2018-2020 that reduced Shift4's revenue and EBITDA. The 2020 "true-up" is the only one that ever factored into management's YE reporting.

a. First, Creative Accounting. Shift4 engaged in "creative accounting"
to improve its results. During the J. Isaacman/Lemon Call, Mr. Isaacman took
responsibility for directing creative accounting decisions in 2020...

b. Mr. Isaacman also acknowledged that he had authorized certain adjustments.
For example, in one text exchange, he said to Mr. Cohen "So they did 22.9 [million
dollars of EBITDA for the month of December 2020]. I authorized adding $800k.
Which is 23.7 [million dollars of EBITDA]. We put up 86.8 [million dollars of
EBITDA] FY20."

c. Second, Fudge Factor...

d. ... Mr. Isaacman also admitted to "fudging" Shift4's EBITDA to make
it look better. In a text exchange with Bradley Cohen, one of CardConnect's former
owners and a Class A Member of the Company, Mr. Isaacman said, "We put up $86.8m
of EBITDA for the year or $88.8m with my $2m fudge:' Ex. 9 (Isaacman/Cohen
Text Messages).