PAR TECHNOLOGY CORP (Form: 10-Q, Received: 08/14/2017 17:10:51)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2017.

☐ TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From __________ to __________

Commission File Number 1-09720

PAR TECHNOLOGY CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		16-1434688
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
PAR Technology Park
8383 Seneca Turnpike
New Hartford, New York		13413-4991
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (315) 738-0600

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer ☐	Accelerated Filer ☐
Non Accelerated Filer ☐ (Do not check if a smaller reporting company)	Smaller Reporting Company ☒
	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

As of August 11, 2017, 15,907,281 shares of the registrant’s common stock, $0.02 par value, were outstanding.

PAR TECHNOLOGY CORPORATION

FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Item 1.

Financial Statements

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

	For the three months ended June 30,			For the three months ended June 30,			For the six months ended June 30,			For the six months ended June 30,
	2017			2016			2017			2016
Net revenues:
Product	$	32,682		$	21,444		$	69,888		$	43,528
Service		15,034			11,804			29,377			23,508
Contract		14,545			19,410			28,861			40,927
		62,261			52,658			128,126			107,963
Costs of sales:
Product		24,389			16,137			51,961			32,579
Service		9,766			8,219			19,651			16,818
Contract		12,909			17,857			25,656			37,512
		47,064			42,213			97,268			86,909
Gross margin		15,197			10,445			30,858			21,054
Operating expenses:
Selling, general and administrative		8,917			7,058			18,527			14,600
Research and development		3,284			2,793			6,853			5,555
Amortization of identifiable intangible assets		242			242			483			483
		12,443			10,093			25,863			20,638
Operating income from continuing operations		2,754			352			4,995			416
Other income (expense), net		54			(210	)		(194	)		(280	)
Interest (expense) income, net		(13	)		3			(45	)		32
Income from continuing operations before provision for income taxes		2,795			145			4,756			168
Provision for income taxes		(818	)		(45	)		(1,515	)		(53	)
Net income from continuing operations		1,977			100			3,241			115
Discontinued operations
(Loss on) income from discontinued operations (net of tax)		-			(26	)		183			(26	)
Net income	$	1,977		$	74		$	3,424		$	89
Basic Earnings per Share:
Income from continuing operations		0.12			0.01			0.20			0.01
(Loss on) income from discontinued operations, net of tax		(0.00	)		(0.00	)		0.01			(0.00	)
Net income	$	0.12		$	0.01		$	0.21		$	0.01
Diluted Earnings per Share:
Income from continuing operations		0.12			0.01			0.20			0.01
(Loss on) income from discontinued operations, net of tax		(0.00	)		(0.00	)		0.01			(0.00	)
Net income	$	0.12		$	0.01		$	0.21		$	0.01
Weighted average shares outstanding
Basic		15,919			15,615			15,893			15,651
Diluted		16,179			15,670			16,146			15,717

See accompanying notes to unaudited interim consolidated financial statements

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	For the three months ended June 30,						For the six months ended June 30,
	2017			2016			2017			2016
Net income	$	1,977		$	74		$	3,424		$	89
Other comprehensive loss, net of applicable tax:
Foreign currency translation adjustments		(197	)		(28	)		(156	)		(150	)
Comprehensive income (loss)	$	1,780		$	46		$	3,268		$	(61	)

See accompanying notes to unaudited interim consolidated financial statements

PAR TECHNOLOGY CORPORATIONAND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

Assets	June 30, 2017			December 31, 2016
Current assets:
Cash and cash equivalents	$	3,282		$	9,055
Accounts receivable-net		33,807			30,705
Inventories-net		28,845			26,237
Note receivable		-			3,510
Income taxes receivable		-			261
Other current assets		4,246			4,027
Assets of discontinued operations		-			462
Total current assets		70,180			74,257
Property, plant and equipment - net		9,854			7,035
Deferred income taxes		16,403			17,417
Goodwill		11,051			11,051
Intangible assets - net		11,886			10,966
Other assets		3,833			3,785
Total Assets	$	123,207		$	124,511
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of long-term debt	$	191		$	187
Borrowings on line of credit		1,000			-
Accounts payable		14,163			16,687
Accrued salaries and benefits		6,411			5,470
Accrued expenses		4,752			4,682
Customer deposits and deferred service revenue		14,513			19,814
Total current liabilities		41,030			46,840
Long-term debt		283			379
Other long-term liabilities		7,764			7,712
Total liabilities		49,077			54,931
Commitments and contingencies
Shareholders’ Equity:
Preferred stock, $.02 par value, 1,000,000 shares authorized		-			-
Common stock, $.02 par value, 29,000,000 shares authorized; 17,615,390 and 17,479,454 shares issued, 15,907,281 and 15,771,345 outstanding at June 30, 2017 and December 31, 2016, respectively		352			350
Capital in excess of par value		47,354			46,203
Retained earnings		35,598			32,357
Accumulated other comprehensive loss		(3,338	)		(3,494	)
Treasury stock, at cost, 1,708,109 shares		(5,836	)		(5,836	)
Total shareholders’ equity		74,130			69,580
Total Liabilities and Shareholders’ Equity	$	123,207		$	124,511

See accompanying notes to unaudited interim consolidated financial statements

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the six months ended June 30,
	2017			2016
Cash flows from operating activities:
Net income	$	3,424		$	89
(Income) loss from discontinued operations		(183	)		26
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation, amortization and accretion		1,852			1,606
Provision for bad debts		315			397
Provision for obsolete inventory		1,528			970
Equity based compensation		238			207
Deferred income tax		1,014			52
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		(3,417	)		(329	)
Inventories		(4,136	)		(4,863	)
Income tax receivable/(payable)		261			(490	)
Other current assets		(219	)		(751	)
Other assets		(48	)		(105	)
Accounts payable		(2,524	)		4,802
Accrued salaries and benefits		941			137
Accrued expenses		70			(1,488	)
Customer deposits and deferred service revenue		(5,301	)		913
Other long-term liabilities		52			(124	)
Deferred tax equity based compensation		-			(9	)
Net cash (used in) provided by operating activities-continuing operations		(6,133	)		1,040
Net cash provided by (used in) operating activities-discontinued operations		462			(299	)
Net cash (used in) provided by operating activities		(5,671	)		741
Cash flows from investing activities:
Capital expenditures		(3,497	)		(984	)
Capitalization of software costs		(2,148	)		(1,220	)
Acquisition related consideration paid		-			(977	)
Net cash used in investing activities		(5,645	)		(3,181	)
Cash flows from financing activities:
Payments of long-term debt		(92	)		(89	)
Payments of other borrowings		(14,150	)		(107,907	)
Proceeds from other borrowings		15,150			107,907
Proceeds from stock awards		915			29
Proceeds from note receivable		3,794			-
Net cash provided by (used in) financing activities		5,617			(60	)
Effect of exchange rate changes on cash and cash equivalents		(74	)		(150	)
Net decrease in cash and cash equivalents		(5,773	)		(2,650	)
Cash and cash equivalents at beginning of period		9,055			8,024
Cash and equivalents at end of period		3,282			5,374
Less cash and cash equivalents of discontinued operations at end of period		-			-
Cash and cash equivalents of continuing operations at end of period	$	3,282		$	5,374


Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	60	21
Income taxes, net of refunds	56	551

See accompanying notes to unaudited interim consolidated financial statements

PAR TECHNOLOGY CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Basis of presentation

The accompanying unaudited interim consolidated financial statements of PAR Technology Corporation (the “Company” or “PAR”) have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial statements and the instructions to Form 10-Q and Article 8 of Regulation S-X pertaining to interim financial statements. Accordingly, they do not include all information and footnotes required by GAAP for annual financial statements. In the opinion of the management, such unaudited interim consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the results for the interim periods included in this Quarterly Report on Form 10-Q (“Quarterly Report”). Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results of operations that may be expected for any future period. Certain amounts for prior periods have been reclassified to conform to the current period classification.

The preparation of unaudited interim consolidated financial statements requires management of the Company to make a number of estimates, judgements and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited interim consolidated financial statements and the reported amount of revenues and expenses during the period. Primary areas where financial information is subject to the use of estimates, assumptions and the application of judgment include revenue recognition, accounts receivable, inventories, accounting for business combinations, contingent consideration, goodwill and intangible assets, and taxes. Actual results could differ from those estimates.

The unaudited interim consolidated financial statements and related notes should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on April 17, 2017.

Note 2 — Divestiture and Discontinued Operations

On November 4, 2015, the Company sold substantially all of the assets of its hotel/spa technology business operated by PAR Springer-Miller Systems, Inc., Springer-Miller International, LLC, and Springer-Miller Canada, ULC (collectively, “PSMS”) pursuant to an asset purchase agreement (the “PSMS APA”) dated on even date therewith among PSMS and Gary Jonas Computing Ltd., SMS Software Holdings LLC, and Jonas Computing (UK) Ltd. (the “Purchasers”). Accordingly, the results of operations of PSMS have been classified as discontinued operations in the Consolidated Statements of Operations (unaudited) and Consolidated Statements of Cash Flows (unaudited) in accordance with Accounting Standards Codification (“ASC”) ASC 205-20 (Presentation of Financial Statements – Discontinued Operations). Additionally, the assets and associated liabilities have been classified as discontinued operations in the Consolidated Balance Sheets (unaudited). Total consideration to be received from the sale is $16.6 million in cash (the “Base Purchase Price”), with $12.1 million paid at the closing of the asset sale and up to $4.5 million payable 18 months following the closing (the “Holdback Amount”). On May 5, 2017, the Company received payment of $4.2 million of the Holdback Amount, the unpaid balance is reflective of a negative purchase price adjustment based on the net tangible asset calculation provided under the PSMS APA. In addition to the Base Purchase Price, contingent consideration of up to $1.5 million (the “Earn-Out”) could be received by the Company based on the achievement of certain agreed-upon revenue and earnings targets for calendar years 2016, 2017 and 2018 (up to $500,000 per calendar year), subject to setoff for PSMS and ParTech, Inc. indemnification obligations thereunder and unresolved claims. The Company received no Earn-Out payment for calendar year 2016 and, as of June 30, 2017, the Company did not record any amount associated with calendar years 2017 and 2018, as the Company does not believe achievement of the related revenue and earnings targets is probable.

Summarized financial position for the Company’s discontinued operations is as follows (in thousands):

	(in thousands)
	June 30, 2017		December, 31 2016
Assets
Other current assets	$	-	$	462
Assets of discontinued operations	$	-	$	462

Summarized financial operating results for the Company’s discontinued operations is as follows (in thousands):

	For the three months ended June 30,					For the six months ended June 30,
	2017		2016			2017			2016
Operations
Total revenues	$	-	$	-		$	-		$	-

(Loss) income from discontinued operations before income taxes	$	-	$	(38	)	$	284		$	(38	)
Benefit from (provision for) income taxes		-		12			(101	)		12
(Loss) income from discontinued operations, net of taxes	$	-	$	(26	)	$	183		$	(26	)

Note 3 — Accounts Receivable

The Company’s net accounts receivable consists of:

	(in thousands)
	June 30, 2017			December 31, 2016
Government segment:
Billed	$	7,778		$	6,779
Advanced billings		(1,662	)		(1,599	)
		6,116			5,180
Restaurant/Retail segment:
Accounts receivable - net		27,691			25,525
	$	33,807		$	30,705

At June 30, 2017 and December 31, 2016, the Company had recorded allowances for doubtful accounts of $1.1 million and $0.9 million, respectively, against Restaurant/Retail segment accounts receivable.

Note 4 — Inventories

Inventories are primarily used in the manufacture, maintenance and service of Restaurant/Retail segment products. The components of inventories (net) consist of the following:

	(in thousands)
	June 30, 2017		December 31, 2016
Finished goods	$	10,912	$	9,423
Work in process		701		443
Component parts		10,623		10,386
Service parts		6,609		5,985
	$	28,845	$	26,237

At June 30, 2017 and December 31, 2016, the Company had recorded inventory reserves of $7.6 million and $9.2 million, respectively, against Restaurant/Retail inventories, which relates primarily to service parts.

Note 5 — Identifiable Intangible Assets and Goodwill

The Company’s identifiable intangible assets represent intangible assets in connection with the Brink Software Inc. acquisition in 2014 and internally developed software costs. The Company capitalizes certain costs related to the development of computer software used in its Restaurant/Retail segment. Software development costs incurred prior to establishing technological feasibility are charged to operations and included in research and development costs. The technological feasibility of a computer software product is established when the Company has completed all planning, designing, coding, and testing activities that are necessary to establish that the product meets its design specifications including functionality, features, and technical performance requirements. Software development costs incurred after establishing feasibility for software sold as a perpetual license, as defined within ASC 985-20 (Software – Costs of Software to be sold, Leased, or Marketed) and for software as a service (“SAAS”), as defined within ASC-350-40 (Intangibles – Goodwill and Other – Internal – Use Software) are capitalized and amortized on a product-by-product basis when the product is available for general release to customers. Software costs capitalized within continuing operations during the three and six months ended June 30, 2017 were $1.1 million and $2.1 million, respectively. Software costs capitalized within continuing operations during the three and six months ended June 30, 2016 were $0.5 million and $1.2 million, respectively.

Annual amortization, charged to cost of sales when a product is available for general release to customers, is computed using the greater of (a) the straight-line method over the remaining estimated economic life of the product, generally three to seven years or (b) the ratio that current gross revenues for the product bear to the total of current and anticipated future gross revenues for the product. Amortization of capitalized software costs from continuing operations for the three and six months ended June 30, 2017 were $0.4 million and $0.7 million, respectively. Amortization of capitalized software costs from continuing operations for the three and six months ended June 30, 2016 were $0.3 million and $0.5 million, respectively.

Amortization of intangible assets acquired from the Brink Software Inc. acquisition amounted to $0.2 million and $0.5 million for the three and six months ended June 30, 2017, respectively. Amortization of intangible assets acquired in the Brink Software Inc. acquisition for the three and six months ended June 30, 2016 were $0.2 million and $0.5 million, respectively.

The components of identifiable intangible assets, excluding discontinued operations, are:

	(in thousands)
	June 30, 2017			December 31, 2016			Estimated Useful Life
Acquired and internally developed software costs	$	18,032		$	15,884		3 - 7 years
Customer relationships		160			160		7 years
Non-competition agreements		30			30		1 year
		18,222			16,074
Less accumulated amortization		(6,736	)		(5,508	)
	$	11,486		$	10,566
Trademarks, trade names (non-amortizable)		400			400			N/A
	$	11,886		$	10,966

The expected future amortization of our intangible assets, assuming straight-line amortization of capitalized software costs and acquisition related intangibles, is as follows (in thousands):

2017	$	1,168
2018		2,196
2019		1,722
2020		1,396
2021		1,028
Thereafter		3,976
Total	$	11,486

The Company tests goodwill for impairment on an annual basis, or more often if events or circumstances indicate that there may be impairment. The Company operates in two reportable business segments, Restaurant/Retail and Government. Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to a specific reporting unit at the date the goodwill is initially recorded. Once goodwill has been assigned to a specific reporting unit, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or organically grown, are available to support the value of the goodwill. The amount of goodwill carried by the Restaurant/Retail and Government reporting unit is $10.3 million and $0.7 million, respectively, at June 30, 2017 and December 31, 2016.

Note 6 — Stock Based Compensation

The Company applies the fair value recognition provisions of ASC Topic 718. The Company recorded stock based compensation of $62,000 and $238,000 for the three and six months ended June 30, 2017, respectively. The Company recorded stock based compensation of $141,000 and $207,000 for the three and six months ended June 30, 2016, respectively. The amount recorded for the three and six months ended June 30, 2017 was recorded net of benefits of $10,000 and $10,000, respectively, as a result of forfeitures of unvested stock awards prior to the completion of the requisite service period and/or performance criteria.. The amount recorded for the three and six months ended June 30, 2016 was recorded net of benefits of $22,000 and $48,000, respectively, as a result of forfeitures of unvested stock awards prior to the completion of the requisite service period and /or performance criteria. At June 30, 2017, the aggregate unrecognized compensation expense related to non-vested equity awards was $0.4 million (net of estimated forfeitures), which is expected to be recognized as compensation expense in fiscal years 2017 through 2019.

For the three and six month periods ended June 30, 2017, the Company recognized compensation expense related to performance awards based on its estimate of the probability of achievement in accordance with ASC Topic 718.

Note 7 — Net Income per share

Earnings per share are calculated in accordance with ASC Topic 260, which specifies the computation, presentation and disclosure requirements for earnings per share (EPS). It requires the presentation of basic and diluted EPS. Basic EPS excludes all dilution and is based upon the weighted average number of shares of common stock outstanding during the period. Diluted EPS reflects the potential dilution that would occur if securities or other contracts to issue common stock were exercised or converted into common stock. For the three and six months ended June 30, 2017 there were no anti-dilutive stock options outstanding. For the three and six months ended June 30, 2016 there were 38,000 and 26,000 anti-dilutive stock options outstanding.

The following is a reconciliation of the weighted average of shares of common stock outstanding for the basic and diluted EPS computations (in thousands, except share and per share data):

	For the three months ended June 30,
	2017		2016
Net income from continuing operations	$	1,977	$	100

Basic:
Shares outstanding at beginning of period		15,811		15,607
Weighted average shares issued during the period, net		108		8
Weighted average common shares, basic		15,919		15,615
Net income from continuing operations per common share, basic	$	0.12	$	0.01
Diluted:
Weighted average common shares, basic		15,919		15,615
Dilutive impact of stock options and restricted stock awards		260		55
Weighted average common shares, diluted		16,179		15,670
Net income from continuing operations per common share, diluted	$	0.12	$	0.01

	For the six months ended June 30,
	2017		2016
Net income from continuing operations	$	3,241	$	115

Basic:
Shares outstanding at beginning of period		15,771		15,645
Weighted average shares issued during the period, net		122		6
Weighted average common shares, basic		15,893		15,651
Net income from continuing operations per common share, basic	$	0.20	$	0.01
Diluted:
Weighted average common shares, basic		15,893		15,651
Dilutive impact of stock options and restricted stock awards		253		66
Weighted average common shares, diluted		16,146		15,717
Net income from continuing operations per common share, diluted	$	0.20	$	0.01

Note 8 — Contingencies

The Company is subject to legal proceedings, which arise in the ordinary course of business. Additionally, U.S. Government contract costs are subject to periodic audit and adjustment. The Company is investigating whether certain import/export and sales documentation activities at the Company’s China and Singapore offices were improper and in possible violation of the U.S. Foreign Corrupt Practices Act (“FCPA”) and other applicable laws and certain Company policies. The Company voluntarily notified, and is fully cooperating with, the SEC and the U.S. Department of Justice (“DOJ”) of these activities. On May 1, 2017, the Company received a subpoena from the SEC for documents relating to the Company’s investigation. The SEC’s investigation is a non-public, fact-finding inquiry and it is not clear what action, if any, the SEC intends to take with respect to the information it gathers. If the SEC, DOJ, or other governmental agencies (including foreign governmental agencies) determine that violations of certain laws or regulations occurred, the Company could be exposed to a broad range of civil and criminal sanctions. The potential liability arising out of the China and Singapore matters or the SEC investigation cannot currently be reasonably estimated; however, the imposition of sanctions, fines or remedial measures could have a material adverse effect on the Company’s business, prospects, reputation, financial condition, liquidity, results of operations or cash flows.

Note 9 — Segment and Related Information

The Company is organized in two reportable business segments, Restaurant/Retail and Government. The Company’s chief operating decision maker is the Company’s Chief Executive Officer. Management views the Restaurant/Retail and Government segments separately in operating its business, as the products and services are different for each segment. The Restaurant/Retail segment offers integrated solutions to restaurants and retail, including in the fast casual, quick serve and table service restaurant categories, and speciality retail outlets. These offerings include industry leading hardware and cloud and on-premise software applications utilized at the point-of-sale, back of store and corporate office and includes the Brink cloud-based point-of-sale software. This segment also offers customer support including field service, installation, and twenty-four-hour telephone support and depot repair. With our SureCheck solution, we continue to expand our business into big box retailers, grocery stores and contract food management organizations. The Government segment performs complex technical studies, analysis, and experiments, develops innovative solutions, and provides on-site engineering in support of advanced defense, security, and aerospace systems. This segment also provides expert on-site services for operating and maintaining U.S. Government-owned communication assets.

Information noted as “Other” primarily relates to the Company’s corporate, home office operations.

Information as to the Company’s segments is set forth below. Amounts below exclude discontinued operations.

	(in thousands) For the three months ended June 30,						(in thousands) For the six months ended June 30,
	2017			2016			2017			2016
Revenues:
Restaurant/Retail	$	47,716		$	33,248		$	99,265		$	67,036
Government		14,545			19,410			28,861			40,927
Total	$	62,261		$	52,658		$	128,126		$	107,963

Operating income:
Restaurant/Retail	$	1,795		$	(800	)	$	4,161		$	(1,300	)
Government		1,587			1,496			3,098			3,303
Other		(628	)		(344	)		(2,264	)		(1,587	)
		2,754			352			4,995			416
Other income (loss), net		54			(210	)		(194	)		(280	)
Interest (expense) income, net		(13	)		3			(45	)		32
Income before provision for income taxes	$	2,795		$	145		$	4,756		$	168

Depreciation, amortization and accretion:
Restaurant/Retail	$	821		$	756		$	1,595		$	1,488
Government		4			10			11			19
Other		129			63			246			99
Total	$	954		$	829		$	1,852		$	1,606

Capital expenditures including software costs:
Restaurant/Retail	$	1,256		$	702		$	2,331		$	1,650
Government		7			32			7			39
Other		1,033			489			3,307			515
Total	$	2,296		$	1,223		$	5,645		$	2,204

Revenues by country:
United States	$	57,621		$	47,571		$	119,188		$	97,790
Other Countries		4,640			5,087			8,938			10,173
Total	$	62,261		$	52,658		$	128,126		$	107,963

The following table represents identifiable assets by business segment. Amounts below exclude discontinued operations.

	(in thousands)
	June 30, 2017		December 31, 2016

Restaurant/Retail	$	87,553	$	87,672
Government		7,613		6,504
Other		28,041		29,873
Total	$	123,207	$	124,049

The following table represents assets by country based on the location of the assets. Amounts below exclude discontinued operations.

	(in thousands)
	June 30, 2017		December 31, 2016
United States	$	107,293	$	110,369
Other Countries		15,914		13,680
Total	$	123,207	$	124,049

The following table represents Goodwill by reporting unit. Amounts below exclude discontinued operations.

	(in thousands)
	June 30, 2017		December 31, 2016
Restaurant/Retail	$	10,315	$	10,315
Government		736		736
Total	$	11,051	$	11,051

Customers comprising 10% or more of the Company’s total revenues, excluding discontinued operations, are summarized as follows:

	For the three months ended June 30,						For the six months ended June 30 ,
	2017			2016			2017			2016
Hospitality segment :
McDonald’s Corporation		36	%		24	%		40	%		21	%
Yum! Brands, Inc.		14	%		10	%		13	%		11	%
Government segment :
U.S. Department of Defense		23	%		37	%		23	%		38	%
All Others		27	%		29	%		24	%		30	%
		100	%		100	%		100	%		100	%

No other customer within All Others represented more than 10% of the Company’s total revenue for the three and six months ended June 30, 2017 or 2016.

Note 10 — Fair Value of Financial Instruments

The Company’s financial instruments have been recorded at fair value using available market information and valuation techniques. The fair value hierarchy is based upon three levels of input, which are:

Level 1 − quoted prices in active markets for identical assets or liabilities (observable)

Level 2 − inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in inactive markets, or other inputs that are observable market data for essentially the full term of the asset or liability (observable)

Level 3 − unobservable inputs that are supported by little or no market activity, but are significant to determining the fair value of the asset or liability (unobservable)

The Company’s financial instruments consist primarily of cash and cash equivalents, trade receivables, trade payables, debt instruments and deferred compensation assets and liabilities. For cash and cash equivalents, trade receivables and trade payables, the carrying amounts of these financial instruments as of June 30, 2017 and December 31, 2016 were considered representative of their fair values. The estimated fair value of the Company’s long-term debt and line of credit at June 30, 2017 and December 31, 2016 was based on variable and fixed interest rates at June 30, 2017 and December 31, 2016, respectively, for new issues with similar remaining maturities and approximates the respective carrying values at June 30, 2017 and December 31, 2016.

The deferred compensation assets and liabilities primarily relate to the Company’s deferred compensation plan, which allows for pre-tax salary deferrals for certain key employees. Changes in the fair value of the deferred compensation liabilities are derived using quoted prices in active markets of the asset selections made by the participants. The deferred compensation liabilities are classified within Level 2, as defined under U.S. GAAP, because their inputs are derived principally from observable market data by correlation to the hypothetical investments. The Company holds insurance investments to partially offset the Company’s liabilities under its deferred compensation plan, which are recorded at fair value each period using the cash surrender value of the insurance investments.

The Company has obligations, to be paid in cash, to the former owners of Brink Software Inc., based on the achievement of certain conditions defined in the September 18, 2014 stock purchase agreement governing the Brink Software, Inc. acquisition. The fair value of this contingent consideration payable was estimated using a discounted cash flow method, with significant inputs that are not observable in the market and thus represents a Level 3 fair value measurement as defined in ASC 820, Fair Value Measurements and Disclosures. The significant inputs in the Level 3 measurement not supported by market activity included the Company’s probability assessments of expected future cash flows related to the Company’s acquisition of Brink Software Inc. during the contingent consideration period, appropriately discounted considering the uncertainties associated with the obligation, and calculated in accordance with the terms of the definitive agreement. Any change in the fair value adjustment is recorded in the earnings of that period. Changes in the fair value of the contingent consideration obligations may result from changes in probability assumptions with respect to the likelihood of achieving the various contingent payment obligations. Significant increases or decreases in the inputs noted above in isolation would result in a significantly lower or higher fair value measurement.

The following table presents a summary of changes in fair value of the Company’s Level 3 assets and liabilities that are measured at fair value on a recurring basis (in thousands), and are recorded as a component of other long-term liabilities on the consolidated balance sheet:

	Level 3 Inputs
	Liabilities
Balance at December 31, 2016	$	4,000
New level 3 liability		-
Total gains (losses) reported in earnings		-
Transfers into or out of Level 3		-
Balance at June 30, 2017	$	4,000

Note 11 — Related Party Transactions

The Company leases its corporate wellness facility to related parties at a current rate of $9,775 per month. The Company receives a complimentary membership to this facility which is provided to all employees. The Company received rental income amounting to $29,325 and $58,650 for each of the three and six months ended June 30, 2017 and June 30, 2016.

In October 2016, the Company entered into a statement of work (“SOW”) with Xpanxion LLC for software development services. For the six months ended June 30, 2017 we incurred approximately $742,000 of expenses to Xpanxion, LLC under the SOW. The Company did not incur any expenses to Xpanxion during the six month period ended June 30, 2016. Until his retirement on June 30, 2017, Paul Eurek, a director of the Company, was President of Xpanxion LLC.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

When used in this Quarterly Report on Form 10-Q (“Quarterly Report”), the terms “PAR Technology Corporation,” “Company,” “we,” “us” and “our” mean PAR Technology Corporation and all entities included in our unaudited interim consolidated financial statements. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim Consolidated Financial Statements and the Notes thereto included under Part I, Item 1 of this Quarterly Report. See also, “Forward-Looking Statements” below.

Forward-Looking Statements

This Quarterly Report contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), and the Private Litigation Reform Act of 1995. Forward-looking statements are not historical in nature, but rather are predictive of our future operations, financial condition, business strategies and prospects. Forward-looking statements are generally identified by words such as “anticipate”, “believe,” “belief,” “continue,” “could”, “expect,” “estimate,” “intend,” “may,” “opportunity,” “plan,” “should,” “will,” “would,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, delays in new product development and/or product introduction, changes in customer base, a significant portion of our revenue is derived from two customers, product and service demands and competition, risks associated with the ongoing investigation into possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) and similar laws, including the cost of such investigation and any sanctions, fines or remedial measures that may be imposed by the U.S. Department of Justice (“DOJ”) or the U.S. Securities and Exchange Commission (“SEC”), additional expenses related to remedial measures, risks associated with our identified material weaknesses in internal control over financial reporting and any other failure to maintain effective internal controls, and the other risk factors discussed in our most recent Annual Report on Form 10-K and other filings with the SEC. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities law.

Our management technology solutions for the Restaurant/Retail segment features cloud and on-premise software applications, hardware platforms, and related installation, technical, and maintenance support services tailored for the needs of restaurants and retailers. Our Government segment provides technical expertise in contract development of advanced systems and software solutions for the U.S. Department of Defense and other federal agencies, as well as management technology and communications support services to the U.S. Department of Defense.

Our products sold in the Restaurant/Retail segment are utilized in a wide range of applications by customers worldwide. We face competition across all categories in the Restaurant/Retail segment in which we compete based on product design, innovative features and functionality, quality and reliability, price, customer service, and delivery capability. Our strategy is to provide complete integrated management technology solutions, supported by industry leading customer service. Our research and development efforts are focused on timely identifying changes in customer needs and/or relevant technologies, to rapidly and effectively develop innovative new products and enhancements to our existing products that meet and exceed customer requirements.

Our strategy is to expand our Restaurant/Retail business by continuing to invest in our existing products - Brink and SureCheck - including the development of enhancements to our existing software applications and hardware platforms and the development of new and innovative cloud based software applications. To support the growth of our products, we continue to expand our direct sales force and third-party channel partners.

Currently, PAR’s primary market is the quick serve restaurant category and hardware sales to tier one customers in that category. Consistent with our strategy to expand our product offerings beyond the restaurant/retail markets, we continue to focus on growing and expanding our software offerings, including our cloud software as a service (SaaS) and related hardware and support services. As we implement our strategies, we continuously monitor the trends in the markets within which we currently operate and the markets we intend to operate in the future. We know POS hardware is becoming a commodity, as more POS devices (tablets, kiosks and bring your own device) are introduced, competition will increase, driven by pricing, scalability, functionality, and economies of scale, resulting in smaller margins. Our strategy acknowledges this trend, and we intend to grow our recurring revenues from software contracts, specifically SaaS, reducing the impact of this eventual commoditization of POS hardware.

The strategy for our PAR Government segment is to build on our sustained outstanding performance of existing service contracts, coupled with investments in enhanced business development capabilities. We believe we are well positioned to realize continued renewals of expiring contracts and extensions of existing contracts, and secure service and solution contracts in expanded areas within the U.S. Department of Defense and other federal agencies. We believe our highly relevant technical competencies, intellectual property, and investments in new technologies provide opportunities to offer systems integration, products, and highly-specialized service solutions to the U.S. Department of Defense and other federal agencies. The general uncertainty in U.S. defense total workforce policies (military, civilian, and contract), procurement cycles, and spending levels for the next several years are factors we monitor as we develop and implement our business strategy for the PAR Government segment.

Internal Investigation; Update .

As previously disclosed, our Audit Committee has been overseeing an internal investigation by outside counsel into certain import/export and sales documentation activities at our China and Singapore offices, and whether these activities were improper and in violation of the FCPA and other applicable laws, and certain of our policies, including our Code of Business Conduct and Ethics. We voluntarily notified, and we are fully cooperating with, the SEC and the DOJ of these activities. On May 1, 2017, we received a subpoena from the SEC for documents relating to the investigation. The SEC’s investigation is a non-public, fact-finding inquiry. During the six months ended June 30, 2017, we recorded $1.6 million of expenses relating to our internal investigation and the SEC subpoena. It is not clear what action, if any, the SEC intends to take with respect to the information it gathers pursuant to its subpoena. If the SEC, or the DOJ or other governmental agency (including foreign governmental agencies) determine that violations of certain laws or regulations occurred, then we could be exposed to a broad range of civil and criminal sanctions, including injunctive relief, disgorgement, fines, penalties, modifications to our business practices, including the termination or modification of existing business relationships, the imposition of compliance programs and the retention of a monitor to oversee our future compliance. While we cannot currently reasonably estimate the potential liability arising out of the China and Singapore matters or the SEC investigation, the imposition of sanctions, fines or remedial measures could have a material adverse effect on our business, prospects, reputation, financial condition, liquidity, results of operations or cash flows.

Results of Operations —

Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016

We reported revenues of $62.3 million for the quarter ended June 30, 2017, an increase of 18.2% from the $52.7 million reported for the quarter ended June 30, 2016. Our net income from continuing operations was $2.0 million or $0.12 per diluted share for the second quarter of 2017 versus $0.1 million or $0.01 per diluted share for the same period in 2016.

Product revenues were $32.7 million for the quarter ended June 30, 2017, an increase of 52.4% from the $21.4 million recorded for the same period in 2016. This increase was primarily driven by demand for our hardware solutions due to the timing of major project installations with a tier one customers in our Restaurant/Retail segment. Also, contributing to the growth in the quarter was continued deployments of hardware sold with our Brink POS software.

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Service revenues were $15.0 million for the quarter ended June 30, 2017, an increase of 27.4% from the $11.8 million reported for the same period in 2016. This increase was primarily due to an increase in installation services driven by an increase in Tier one product revenue and continued deployments of our Brink POS software.

Contract revenues were $14.5 million for the quarter ended June 30, 2017, compared to $19.4 million reported for the same period in 2016, a decrease of 25.1%. This decrease was driven by the wind down of a large multi-year contract within our program management office (“PMO”) product offering.

Product margins for the quarter ended June 30, 2017 were 25.4%, compared to 24.7% for the same period in 2016.

Service margins for the quarter ended June 30, 2017 were 35.0%, compared to 30.4% recorded for the same period in 2016. Our favorable margin rate was primarily driven by favorable fixed cost absorption on increased volume and continued mix shift to SaaS offering.

Contract margins for the quarter ended June 30, 2017 were 11.2%, compared to 8.0% for the same period in 2016. Our favorable margin rate was primarily driven by a shift in revenues from PMO to the higher value added product offerings of Intelligence, Surveillance, and Reconnaissance (“ISR”) and Mission Support. In addition, within the quarter, all product lines showed improved margins in comparison to the prior year due to revenue mix within each respective product line.

Selling, general and administrative (SG&A) expenses for the quarter ended June 30, 2017 were $8.9 million, an increase of 26.3% compared to the $7.1 million for the quarter ended June 30, 2016. The increase is primarily due to costs related to favorable year-over-year financial performance such as commissions and bonus accrual, in addition to investment in personnel to support the current and future growth in our Brink POS & SureCheck products.

Research and development (R&D) expenses were $3.3 million for the quarter ended June 30, 2017, an increase from $2.8 million for the same period in 2016. This increase was primarily due to an increase in software development costs for products associated with our Brink POS Software and SureCheck software applications in the Restaurant/Retail segment.

During each of the quarters ended June 30, 2017 and June 30, 2016, we recorded $0.2 million of amortization expense associated with acquired identifiable intangible assets from the 2014 acquisition of Brink Software Inc.

Other income, net, was $54,000 for the quarter ended June 30, 2017, compared to other expense, net of $0.2 million for the same period in 2016. Other income/expense primarily includes, fair market value fluctuations of our deferred compensation plan, rental income, and foreign currency fair value adjustments.

Interest (expense) income, net, was interest expense of ($13,000) for the quarter ended June 30, 2017 compared to interest income of $3,000 for quarter ended June 30, 2016. The 2016 interest income represents interest recorded on a note receivable in the amount of $40,000 related to the sale of PSMS’ assets in November 2015, offset by interest charged on our short-term borrowings and from long-term debt of $37,000.

For the three months ended June 30, 2017, our effective income tax rate was 29.3%, compared to 31.0% for the same period in 2016.

Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016

We recorded total revenues of $128.1 million for the six months ended June 30, 2017, an increase of 18.7% from the $108.0 million reported for the six months ended June 30, 2017. Net income from continuing operations was $3.2 million or $0.20 per diluted share for the six months ended 2017 versus $0.1 million or $0.01 per diluted share for the same six-month period in 2016.

Product revenues were $69.9 million for the six months ended June 30, 2017, an increase of 60.6% from the $43.5 million recorded for the same six-month period in 2016. This increase was primarily driven by high volume of sales to our tier one customers in our domestic operations and new accounts won through deployments of Brink POS and related hardware. The increase was offset by lower sales volume by our channel partners selling our Pixel Point product.

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Service revenues were $29.4 million for the six months ended June 30, 2017, an increase of 25.0% from the $23.5 million reported for the same six-month period in 2016. This increase is primarily due to an increase in installation services driven by an increase in Tier one product revenue, continued deployment of our Brink POS, and an increase in our depot repair services.

Contract revenues were $28.9 million for the six months ended June 30, 2017, compared to $40.9 million reported for the same six-month period in 2016, a decrease of 29.5%. This decrease was primarily driven by the wind down of a lare multi-year contract within our PMO product offering.

Product margins for the six months ended June 30, 2017 were 25.7%, compared to from 25.2% for the same six-month period in 2016.

Service margins were 33.1% for the six months ended June 30, 2017, compared to 28.5% for the same six-month period in 2016. This increase was primarily driven by favorable fixed cost absorption on increased volume and continued revenue shifting to our SaaS offering.

Contract margins for the six months ended June 30, 2017 were 11.1%, compared to 8.3% for the same six-month period in 2016. This increase was primarily driven by a shift in revenue from PMO to higher volume added product offerings of ISR and Mission Support. In addition, on a year to date basis, Mission Support and PMO showed improved margins in comparison to the prior year due to revenue mix within those respective product lines.

Selling, general and administrative (SG&A) expenses were $18.5 million for the six months ended June 30, 2017, an increase of 26.9%, compared to the $14.6 million for the six months ended June 30, 2016. This increase is due to costs related to favorable year-over-year financial performance such as commissions and bonus accrual in addition to investments in personnel to support the growth in our Brink and SureCheck products.

Research and development (R&D) expenses were $6.9 million for the six months ended June 30, 2017, an increase of 23.4% compared to the $5.6 million for the same period in 2016. The increase was primarily due to an additional investment in software development costs for products associated with our Brink POS and SureCheck software applications in the Restaurant/Retail segment.

For each of the six months ended June 30, 2017 and 2016, the Company recorded $483,000 of amortization expense associated with acquired identifiable intangible assets from the acquisition of Brink Software Inc.

Other expense, net, was $194,000 for the six months ended June 30, 2017 and $280,000 for the same period in 2016. Other expense/income primarily includes, fair market value fluctuations of our deferred compensation plan, rental income, and foreign currency fair value adjustments.

Interest (expense) income, net, was interest expense of ($45,000) for the six months ended June 30, 2017 compared to interest income of $32,000 for the six months ended June 30, 2016. The 2016 interest income represents interest recorded on the note receivable related to the sale of PSMS’ assets in November 2015, offset by interest charged on our short-term borrowings and from long-term debt.

For the six months ended June 30, 2017, our effective income tax rate was 31.9%, compared to 31.5% for the same period in 2016.

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Liquidity and Capital Resources

Our primary sources of liquidity have been cash flow from operations and borrowings under our Credit Facility. Cash used in operating activities from continuing operations was $5.7 million for the six months ended June 30, 2017, compared to cash provided by operating activities from continuing operations of $1.0 million for the same period in 2016. This decrease was primarily driven by second quarter hardware deployments associated with customer deposits received in the fourth quarter of 2016 from one of our Tier one accounts. For the six months ended June 30, 2016 cash generated from operations was mostly due to changes in working capital requirements, primarily associated with increases in accounts payable due to timing of inventory procurement.

Cash used in investing activities from continuing operations was $5.6 million for the six months ended June 30, 2017 versus $3.2 million used in investing activities from continuing operations for the six months ended June 30, 2016. In the six months ended June 30, 2017, our capital expenditures of $3.5 million were primarily related to the implementation of our enterprise resource planning system and capital improvements made to our owned and leased properties. We capitalized $2.1 million in costs associated with investments in our Restaurant/Retail segment software platforms. In the six months ended June 30, 2016, our capital expenditures of $1.0 million were primarily related to our enterprise resource planning system, capital improvements to leased properties, as well as purchases of computer equipment associated with our software support service offerings. We capitalized $1.2 million in costs associated with investments in our Restaurant/Retail segment software platforms. Additionally, the Company made an agreed upon working capital payment of $1.0 million in regard to the sale of the hotel/spa technology business unit.

Cash provided by financing activities from continuing operations was $5.6 million for the six months ended June 30, 2017 versus cash used of $60,000 for the six months ended June 30, 2016. This change was a result of borrowings on our line of credit under our Credit Facility, proceeds from stock options, and receipt of final installment related to the 2015 sale of hotel business unit.

On November 29, 2016, we, together with certain of our U.S. subsidiaries entered into a three-year credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A. (“JPMorgan Chase”). The Credit Agreement provides for revolving loans in an aggregate principal amount of up to $15.0 million, with availability thereunder equal to the lesser of (i) $15.0 million and (ii) a borrowing base (equal to the sum of 80% eligible accounts, 50% eligible raw materials inventory and 35% eligible finished goods inventory, with no more than 50% of total eligible inventory included in the borrowing base), less the aggregate principal amount outstanding (the “Credit Facility”). Interest accrues on outstanding principal balances at an applicable rate per annum determined, as of the end of each fiscal quarter, by reference to the CBFR Spread or the Eurodollar Spread based on the Company’s consolidated indebtedness ratio as at the determination date. The Credit Agreement contains customary affirmative and negative covenants, including covenants that restrict the ability of the Company and its subsidiaries to incur additional indebtedness, incur or permit to exist liens on assets, make investments, loans, advances, guarantees and acquisitions, consolidate or merge, pay dividends and make distributions, and financial covenants, requiring that the Company’s consolidated indebtedness ratio not exceed 3.0 to 1.0 and, a fixed charge coverage ratio of not less than 1.25 to 1.0 for each fiscal quarter. In August 2017, we entered into an Omnibus Amendment Number 1 to Loan Documents with JPMorgan Chase to provide the Company with more flexibility in its use of its assets and a waiver of any default relating to the location of certain collateral. We were in compliance with the Credit Agreement as of June 30, 2017. On June 30, 2017, there was $1.0 million outstanding and up to $14.0 million available under the Credit Agreement.

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In addition to the Credit Facility, the Company has a mortgage loan, collateralized by certain real estate, with a balance of $0.5 million and $0.7 million as of June 30, 2017 and 2016, respectively. This mortgage matures on November 1, 2019. Interest is fixed at 4.00% through maturity. The annual mortgage payment, including interest through November 1, 2019, is $0.2 million.

We expect our operating cash flows and available capacity under our Credit Facility will be sufficient to meet our operating needs for the next 12 months. Our actual cash needs will depend on many factors, including our rate of revenue growth, including growth of our SaaS revenues, the timing and extent of spending to support our product development efforts, the timing of introductions of new products and enhancements to existing products, market acceptance of our products, and potential fines and penalties that, while currently inestimable, could be material (see Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 for further discussion about the potential adverse effect of such fines and penalties on our business). If we are required or otherwise elect to seek additional funding, we cannot be certain that such additional funding will be available on terms and conditions acceptable to us, if at all.

Critical Accounting Policies and Estimates

Our unaudited interim consolidated financial statements are based on the application of U.S. generally accepted accounting principles (“GAAP”). GAAP requires the use of estimates, assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenue and expense amounts reported. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently applied. Valuations based on estimates are reviewed for reasonableness and adequacy on a consistent basis. Primary areas where financial information is subject to the use of estimates, assumptions and the application of judgment include revenue recognition, accounts receivable, inventories, accounting for business combinations, contingent consideration, goodwill and intangible assets, and taxes. Our critical accounting policies have not changed materially from the discussion of those policies included under “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2016.

Recently Issued Accounting Pronouncements Not Yet Adopted

In May 2014, the FASB amended the existing accounting standards for revenue recognition. The amendments are based on the principle that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. In July 2015, the FASB affirmed its proposal of a one-year deferral of the effective date of the new revenue standard. As a result, the new guidance will be effective for the Company beginning in the first quarter of 2018. The amendments may be applied retrospectively to each prior period presented or with the cumulative effect recognized as of the date of initial application. PAR is currently evaluating the impact of these amendments and will adopt in January, 2018. In the third quarter of 2017, we will continue to assess the potential impact of the new standard on our consolidated financial statements and related disclosures. This project includes the continued assessment and enhancement of our internal processes and systems to address the new standard. At this time, we have not yet selected a transition method.

In February 2016, the FASB issued ASU 2016-02 impacting the accounting for leases intending to increase transparency and comparability of organizations by requiring balance sheet presentation of leased assets and increased financial statement disclosure of leasing arrangements. The revised standard will require entities to recognize a liability for its lease obligations and a corresponding asset representing the right to use the underlying asset over the lease term. Lease obligations are to be measured at the present value of lease payments and accounted for using the effective interest method. The accounting for the leased asset will differ slightly depending on whether the agreement is deemed to be a financing or operating lease. For finance leases, the leased asset is depreciated on a straight-line basis and recorded separately from the interest expense in the income statement resulting in higher expense in the earlier part of the lease term. For operating leases, the depreciation and interest expense components are combined, recognized evenly over the term of the lease, and presented as a reduction to operating income. The ASU requires that assets and liabilities be presented or disclosed separately and classified appropriately as current and noncurrent. The ASU further requires additional disclosure of certain qualitative and quantitative information related to lease agreements. The new standard is effective for the Company beginning in the first quarter of 2019. We are currently evaluating the impact of these amendments on our consolidated financial statements.

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In January 2017, the FASB issued ASU 2017-01 clarifying the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this update affect all reporting entities that must determine whether they have acquired or sold a business. This guidance clarifies that to be a business there must also be at least one substantive process, and narrows the definition of outputs by more closely aligning it with how outputs are described in the new revenue recognition standard. The amendments in this update should be applied prospectively on or after the annual periods beginning after December 15, 2017, including interim periods within those periods. The adoption of this standards update is not expected to have a material impact on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04 intended to simplify the subsequent measurement of goodwill. The amendments in this Update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. Because these amendments eliminate Step 2 from the goodwill impairment test, they should reduce the cost and complexity of evaluating goodwill for impairment. The standards update is effective on a prospective basis for annual and interim goodwill impairment testing performed in fiscal years beginning after December 15, 2019. The adoption of this standards update is not expected to have a material impact on our consolidated financial statements.

In May 2017, the FASB issued an accounting standards update which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This update requires modification only if the fair value, vesting conditions or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein, with early adoption permitted. The adoption of this standards update is not expected to have a material impact on our consolidated financial statements.

Recently Adopted Accounting Pronouncements

In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09 to simplify several aspects of the accounting for employee share-based payment transactions standard, including the classification of excess tax benefits and deficiencies and the accounting for employee forfeitures. The guidance was effective for the Company beginning in the quarter ended March 31, 2017 2017 at which time we adopted this new standard. The updates to the accounting standard include the following:

•

Excess tax benefits and deficiencies no longer are recognized as a change in additional paid-in-capital in the equity section of the balance sheet, instead they are recognized in the income statement as a tax expense or benefit. In the statement of cash flows, excess tax benefits and deficiencies are no longer classified as a financing activity, instead they are classified as an operating activity.

•

Entities have the option to continue to reduce share-based compensation expense during the vesting period of outstanding awards for estimated future employee forfeitures or they may elect to recognize the impact of forfeitures as they actually occur. The Company will continue to reduce the share based compensation expense during the vesting period of outstanding rewards for estimated future forfeitures.

•

The ASU also provides new guidance to other areas of the standard including minimum statutory tax withholding rules and the calculation of diluted common shares outstanding. The adoption of this provision will be reflected prospectively in the financial statements and did not have a material impact.

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The adoption of the new standard in the first quarter of 2017 did not have a significant impact on our unaudited interim consolidated financial statements.

In November 2015, the FASB issued new guidance related to the balance sheet classification of deferred taxes. This standard requires an entity to classify all deferred tax assets, along with any valuation allowance, as noncurrent on the balance sheet. As a result, each jurisdiction will have one net noncurrent deferred tax asset or liability. The Company adopted this standard in the first quarter of 2017, which resulted in the Company’s reclassification of deferred tax assets from current assets to non-current assets in the amount of $7.8 million for the six months ended June 30, 2017 and December 31, 2016.

In July 2015, the FASB issued new guidance related to the measurement of inventory. This standard changes the inventory valuation method from the lower of cost or market to the lower of cost or net realizable value for inventory valued under the first-in, first-out or average cost methods. The implementation of the amended accounting guidance did not have a significant impact on our consolidated financial statements.

In August 2014, the FASB issued new guidance related to disclosures around going concern, including management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related disclosures when conditions or events raise substantial doubt about an entity’s ability to continue as a going concern. The adoption of the new standard in the first quarter of 2017, did not have a significant impact on our consolidated financial statements.

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Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Not required.

Item 4 .

Controls and Procedures

Internal Investigation

As previously disclosed, our Audit Committee has been overseeing an internal investigation by outside counsel focused on whether certain import/export and sales documentation activities at our China and Singapore offices were improper and in possible violation of the FCPA and other applicable laws, and certain of our policies, including our Code of Business Conduct and Ethics. Based on the investigation findings to date, we discovered that certain members of our China and Singapore staff participated in or were aware of improper activities in China and Singapore, involving the improper bypassing of applicable customs laws of various countries. Such activities in China and Singapore included the failure to properly label items for import into various non-U.S. countries and the failure to properly document the declared value of certain items exported to various non-U.S. countries, as well as questionable payments made to customs officials in China without sufficient documentation to evidence or confirm the legitimacy of their purpose. The investigation also revealed that certain members of upper management knew or should have known of the questionable conduct, but failed to take action to prevent or correct such conduct.

Evaluation of Disclosure Controls and Procedures; Material Weaknesses

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the design and operating effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2017. Based on that evaluation, and as a result of the material weaknesses in our internal control over financial reporting previously described and described below, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2017. However, it has been determined that no material adjustments, restatements, or other amendments to our previously issued financial statements are required.

Notwithstanding remedial actions taken through June 30, 2017, our management concluded that material weaknesses continue to exist as of June 30, 2017 because:

we did not maintain a control environment that effectively promoted, maintained, and/or supported the control consciousness of employees or a culture of adequate and prompt reporting of information internally;

we failed to maintain sufficient monitoring activities to ensure compliant and consistent global practices and procedures and timely detection of deviations, allowing for timely corrective action; and

our policies, procedures, and training were insufficient as to procurement and sales activities, including insufficient documentation involving arrangements with third parties, knowledge of, and compliance with, import/export, customs and similar laws and regulations of international jurisdictions and the FCPA, including deficiencies in our training.

Remediation Efforts to Address Material Weaknesses .

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

As we previously disclosed, we have developed and we have begun to implement changes in our internal control over financial reporting to remediate our material weaknesses; and, we are currently implementing our comprehensive compliance program which is focused on both domestic and international anti-bribery, trade control, and other laws, rules, and regulations, and includes new and revised policies. These additional measures are intended to address the above deficiencies and ensure a continuous and effective control environment that not only encourages, but demands compliance and provides processes and procedures for the timely reporting of necessary and/or required information to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

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We caution that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Controls Over Financial Reporting .

In evaluating whether there were any reportable changes in our internal control over financial reporting during the quarter ended June 30, 2017, we determined that, other than the changes described above under “Remediation Efforts to Address Material Weaknesses”, there were no changes in internal control over financial reporting during the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. However, we do anticipate further changes will be implemented to remedy the material weaknesses identified above.

Part II - Other Information

Item 1.

Legal Proceedings

The information in Note 8 - Contingencies to the unaudited interim consolidated financial statements is responsive to this Item and is incorporated by reference herein.

Item 1A.

Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A. Risk Factors, in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed with the SEC on April 17, 2017, as supplemented by the disclosure in Part II, Item 1A Risk Factors, in our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2017, filed May 15, 2017.

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Item 2.

Unregistered Sales of Equity Securities and Use Of Proceeds

Under our equity incentive plans, recipients of restricted stock grants must pay us, in cash, the par value for each share granted. If the vesting requirements are not satisfied, we will repurchase the forfeited shares at par value. In addition, employees may elect to have us withhold shares to satisfy minimum statutory federal, state and local tax withholding obligations arising from the vesting of their restricted stock. When we withhold these shares, we are required to remit to the appropriate taxing authorities the market price of the shares withheld, which could be deemed a purchase of shares by us on the date of withholding. For the six months ended June 30, 2017, 1,930 shares were purchased at an average price of $7.39 per share.

Item 5.

Other Information

(i)	Amendment to Material Agreement.

On August 10, 2017, the Company and certain of its U.S. subsidiaries entered into an Omnibus Amendment Number 1 to Loan Documents (the “Amendment”) with J.P. Morgan Chase Bank, N.A., which provides the Company with more flexibility in its use of its assets and waives any default relating to the location of certain collateral. The preceding description of the Amendment is subject to, and qualified in its entirety by reference to, the Amendment, which is filed as Exhibit 10.4 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

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Item 6 .

Exhibits

Exhibit Index

Exhibit Number	Exhibit Description	Filed or Furnished Herewith

10.1††	Employment Offer Letter, dated April 12, 2017, between Donald H. Foley and PAR Technology Corporation	Filed

10.2††	Restricted Stock Award Agreement, dated May 17, 2017, between PAR Technology Corporation and Donald H. Foley	Filed

10.3††	Amendment to Restricted Stock Award Agreement, dated May 31, 2017, between PAR Technology Corporation and Donald H. Foley	Filed

10.4	Omnibus Amendment Number 1 to Loan Documents dated August 10, 2017 among PAR Technology Corporation, ParTech, Inc., Ausable Solutions, Inc., PAR Government Systems Corporation, Rome Research Corporation, Brink Software, Inc and JPMorgan Chase Bank, N.A.	Filed

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended	Filed

31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended	Filed

32.1	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350	Furnished

32.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350	Furnished

101.INS	XBRL Instance Document	Filed

101.SCH	XBRL Taxonomy Extension Schema Document	Filed

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed

101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed

†† Indicates management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PAR TECHNOLOGY CORPORATION
	(Registrant)

Date: August 14, 2017	/s/ Bryan A. Menar
	Bryan A. Menar
	Chief Financial Officer
	(Principal Financial Officer)

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Exhibit Index

Exhibit Number	Exhibit Description	Filed or Furnished Herewith

10.1††	Employment Offer Letter, dated April 12, 2017, between Donald H. Foley and PAR Technology Corporation	Filed

10.2††	Restricted Stock Award Agreement, dated May 17, 2017, between PAR Technology Corporation and Donald H. Foley	Filed

10.3††	Amendment to Restricted Stock Award Agreement, dated May 31, 2017, between PAR Technology Corporation and Donald H. Foley	Filed

10.4	Omnibus Amendment Number 1 to Loan Documents dated August 10, 2017 among PAR Technology Corporation, ParTech, Inc., Ausable Solutions, Inc., PAR Government Systems Corporation, Rome Research Corporation, Brink Software, Inc and JPMorgan Chase Bank, N.A.	Filed

31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended	Filed

31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended	Filed

32.1	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350	Furnished

32.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. Section 1350	Furnished

101.INS	XBRL Instance Document	Filed

101.SCH	XBRL Taxonomy Extension Schema Document	Filed

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed

101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed

†† Indicates management contract or compensatory plan or arrangement.

Par Technology Corporation

8383 Seneca Turnpike

New Hartford, NY 13492

P 800.448.6505

www.partech.com

10919 Martingale Court

Potomac, Maryland 20854

I am pleased to extend to you an offer of employment to serve as Chief Executive Officer and President of PAR Technology Corporation (“PTC”). This letter outlines your compensation package:

· Your annual base salary will be $460,000, 25% of which will be paid in time vesting restricted stock, that vest ratably monthly. Such shares to be granted on the first day of the open trading window following the Effective Date (as herein defined).

· You will be paid a signing bonus of $5,000, payable within 10 business days following the Effective date.

· The term of your employment with PTC will be for a period of one year, and will continue thereafter for consecutive one year periods unless terminated by you or PTC upon at least 90-days' notice prior to the end of the initial one year employment period or any one year extension thereof, or otherwise terminated by PTC with or without cause.

· You will participate in PTC’s short-term incentive plan as in effect from time to time for executive officers (“STI”). You will have the opportunity to earn, on an annual basis, a bonus subject to the achievement of performance goals for the applicable year determined by PTC’s Board of Directors (the “Board”). Your annual bonus target amount for any year performance period will be 75% of your then base salary (the “Bonus Target”), 25% of such bonus shall be paid in time vesting restricted stock, that vest one year from the date of grant. Your STI award for 2017, will be pro-rated from the Effective Date through December 31, 2017.

· If you are employed by PTC, as contemplated hereunder, on December 31, 2017, you shall be paid not less than 50% of your pro-rated bonus amount for 2017, the balance to be paid to the extent the Board shall determine the 2017 performance goals were achieved.

· If PTC terminates your employment without cause during 2017, you will be paid the unpaid balance of your 2017 base salary. Additionally, if your employment is terminated without cause on or after August 1, 2017, you will be entitled to payment of a pro-rata portion of your STI bonus for 2017, equal to the number of days you were actually employed during 2017 year; payment of 50% of such pro-rata amount shall be guaranteed, the balance to be paid to the extent the Board shall determine the 2017 performance goals were achieved.

· With respect to any employment year other than 2017, if your employment is terminated without cause by PTC prior to the end of any one year extension of your employment term, you will be entitled to a pro-rata portion (equal to the number of days you were employed during that year) of your bonus for that year determined by reference to the performance goals determined by the Board to have been achieved, multiplied by your Bonus Target.

· In addition to the STI plan, you will be entitled to participate in any employee benefit plan that PTC has adopted or may adopt, maintain, or contribute to for the benefit of its executive officers, subject to satisfying the applicable eligibility requirements. Your participation will be subject to the terms of the applicable plan documents and generally applicable PTC policies. Nothing in this letter shall be construed to require PTC to establish any specific employee benefit plan(s) or to prevent PTC from amending, modifying or terminating any employee benefit plan at any time.

· You will be entitled to four (4) weeks of paid vacation per calendar year and five (5) days of personal time off (PTO) annually, as pro-rated for partial years.

· You will be reimbursed for all reasonable out-of-pocket business expenses incurred by you in connection with your performance of your duties in accordance with PTC's expense reimbursement policy as in effect from time to time.

· Your principal office will be located in Potomac, Maryland, provided, you understand and agree that you will be required to travel from time to time for business purposes and in the performance of your duties.

· You will devote your full time, energy, business judgment, skills, and best efforts to the performance of your duties with PTC, provided that you will not be prevented from (i) participating in charitable, civic, educational, professional, community or industry affairs, (ii) managing your passive personal investments, and (iii) continuing to serve on the boards of directors of Thomas Somerville Co., Government Secure Solutions GCI (GSSC), Inc., and T.S. Realty Co.

· You will continue to serve as a Director of PTC, however, as an executive officer of PTC, from and after the Effective Date you will not be compensated for such service. Additionally, your execution of this letter shall constitute your resignation from the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee of the Board of Directors of PTC, effective as of the Effective Date.

This offer is contingent on your delivery of a duly executed Non-Disclosure; Non-Solicitation Agreement, and upon a satisfactorily completed background investigation and screening in accordance with PTC’s application process and background screening policy. Immediately following the Effective Date, we will prepare an employment contract, which will formally set forth all of the terms and conditions of your employment.

If you decide to accept our offer, and I hope you will, please sign the enclosed copy of this letter in the space indicated and return it to me. Your signature will acknowledge that you have read and understood and agreed to the terms and conditions of this letter and the attached documents, if any.

The “Effective Date” of your employment shall be the later of: (A) a satisfactorily completed background investigation and screening and (B) the date you Accepted and Agreed below.

Dr. Foley, we are very much looking forward to your joining the PTC team! Please indicate your written acceptance by signing this offer letter and returning it to me by email.

		Sincerely,

		/s/ Paul Eurek
		Paul Eurek, Chairman, Compensation Committee
		By Order of the Board of Directors

Accepted and Agreed to:

/s/ Donald H. Foley
Donald H. Foley
Dated:	4-12-2017

Exhibit 10.2

RESTRICTED STOCK AWARD AGREEMENT

This Restricted Stock Award Agreement (“ Agreement ”), dated May 17, 2017 (the “ Effective Date ”), is between PAR Technology Corporation (the “ Company ”) and Donald H. Foley (“ Participant ”). Capitalized terms used but not specifically defined herein shall have the meanings specified in the Plan (as herein defined).

RECITALS :

Whereas, pursuant to the employment offer letter dated April 12, 2017 (“ Letter Agreement ”) between the Company and Participant, 25% of Participant’s annual base salary, or $115,000, shall be paid in time vesting Restricted Stock of the Company; and

Whereas, the Company maintains the PAR Technology Corporation 2015 Equity Incentive Plan (the “ Plan ”), which is incorporated into and forms a part of this Agreement, and the Plan provides for the grant of Restricted Stock Awards to certain service providers, including employees of the Company.

NOW, THEREFORE, as provided in the Letter Agreement, and for other good and valuable consideration, Participant and the Company agree as follows:

1. Award of Restricted Stock .

(a) Award . Upon the terms and conditions set forth in this Agreement, effective as of the Grant Date, the Company hereby grants to Participant: a total of 14,162 shares of Restricted Stock (the “ Shares ”) under the Plan (the “ Award ”), which Shares shall be subject to the Restrictions set forth and defined in Section 2(a) and Section 2(c) and time vesting in accordance with Section 1(b) . The “ Grant Date ” shall be the Effective Date.

(b) Vesting Schedule . The Shares shall vest in increments, in accordance with the following schedule: (i) 2,682 Shares shall vest on May 31, 2017; and (ii) 1,640 Shares shall vest in seven (7) equal monthly installments starting with June 30, 2017 and at the end of each month thereafter. May 31, 2017 and each month end thereafter, being referred to herein as, a “ Vesting Date ”. There shall be no proportionate or partial vesting in the periods prior to the applicable Vesting Date and all vesting shall occur only on the appropriate Vesting Date provided Participant is then providing services to the Company or, if Participant is no longer providing services to the Company, Participant’s employment was terminated without cause by the Company.

(c) Book Entry Form; Certificates . At the sole discretion of the Administrator, the Shares will be issued in either: (i) uncertificated form, with the Shares recorded in the name of Participant in the books and records of the Company’s transfer agent with such notations regarding the Restrictions and vesting requirements as the Administrator shall deem appropriate, and upon vesting and satisfaction of the conditions set forth in Section 2(d) , the Company shall remove such notations on any such vested Shares in accordance with Section 1(e) ; or (ii) certificated form pursuant to the terms of Section 1(d) and Section 1(e) .

(d) Escrow . The Secretary of the Company or such other escrow holder as the Administrator may appoint shall retain physical custody of any certificates representing the Shares until the Restrictions lapse and the Shares become vested Shares; in such event, Participant shall not retain physical custody of any certificates representing unvested Shares issued to him. Participant, by acceptance of the Award, shall be deemed to appoint, and does so appoint, the Company and each of its authorized representatives as Participant’s attorney(s)-in-fact to effect any transfer of unvested forfeited Shares to the Company as may be required pursuant to the Plan or this Agreement and to execute such documents as the Company or such representatives deem necessary or advisable in connection with any such transfer.

(e) Removal of Notations; Delivery of Certificates Upon Vesting . As soon as administratively practicable after vesting of any of the Shares pursuant to Section 1(b) , the Company shall, as applicable, either remove the notations on the vested Shares issued in book entry form or deliver to Participant a certificate or certificates evidencing the number of vested Shares (or, in either case, such lesser number of Shares as may be permitted pursuant to Section 8 of the Plan). The vested Shares so delivered shall no longer be subject to the Restrictions.

2. Restrictions .

(a) Forfeiture . Notwithstanding anything to the contrary herein or in the Plan, in the event Participant’s employment is terminated for any reason (other than termination by the Company without cause), each unvested Share shall be automatically forfeited as of the effective date of such termination without payment of any consideration by the Company. For purposes of this Agreement, “ Restrictions ” shall mean the restrictions on sale or other transfer set forth in Section 2(c) and the exposure to forfeiture set forth in this Section 2(a) .

(b) Lapse of Restrictions . The Restrictions shall lapse as to vested Shares.

(c) Unvested Shares Not Transferable . Except as otherwise expressly permitted in Section 7.a. of the Plan, until the Restrictions lapse (and the Shares become “vested Shares”), the Shares (including any shares of common stock of the Company received by Participant with respect to the Shares as a result of stock dividends, stock splits or any other form of recapitalization) may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, by operation of law or otherwise (each of the forgoing individually or collectively, a “ Transfer ”).

(d) Tax Withholding . As set forth in Section 8 of the Plan, the Company shall have the authority and the right to deduct or withhold, or to require Participant to remit to the Company, an amount sufficient to satisfy all applicable federal, state and local taxes required by law to be withheld with respect to any taxable event arising in connection with the Award. The Company shall not be obligated to deliver any new certificate representing vested Shares to Participant or enter such vested Shares in book entry form unless and until Participant shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of Participant resulting from the grant or vesting of the Award or the issuance of Shares.

3. Rights as Stockholder . Except as otherwise provided herein, upon the Grant Date, Participant shall have all the rights of a stockholder of the Company with respect to the Shares, whether or not vested, but subject to the Restrictions, including, without limitation, voting rights and rights to receive any cash or stock dividends, in respect of the Shares subject to the Award.

4. General Provisions .

(a) Section 83(b) Election . Participant acknowledges that the Company has advised Participant of the possibility of making an election under Section 83(b) of the Code with respect to the Award of the Shares and has recommended that Participant consult a qualified tax advisor regarding the desirability of making such an election in light of Participant’s individual circumstances. If the Participant makes an election under Section 83(b) of the Code, Participant hereby agrees to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

(b) Entire Agreement . This Agreement, the Letter Agreement and the Plan include the complete agreement and understanding among the parties and supersede and preempts any prior understandings, agreements, or representations by or among the parties, written or oral, which may have related to the subject matter of this Agreement, the Letter Agreement and/or the Plan in anyway.

(c) Successors and Assigns . The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the Restrictions, including the restrictions on Transfer set forth in Section 2(c) , this Agreement shall be binding upon Participant and his heirs, executors, administrators, successors and assigns.

(d) Amendment . The provisions of this Agreement may be amended, modified or waived in a manner materially adverse to Participant only as permitted by the Plan or, if otherwise, with the prior written consent of the Company and Participant.

(e) No Rights to Continued Employment or Service or to Award . Nothing in the Plan or in this Agreement shall confer on Participant any right to employment or continued service with the Company, or interfere in any way with the right of the Company to terminate or change the terms of Participant's employment or service at any time.

(f) Governing Law and Construction . This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to any choice of law or conflict of law rules or provisions.

(g) Spousal Consent . Participant’s spouse has signed the Consent of Spouse attached to this Agreement as Exhibit A .

(h) Signatures . This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

	PAR Technology Corporation

	By:	/s/ Paul Eurek,
	Paul Eurek, Chairman of the
	Compensation Committee

Participant’s Acceptance . The undersigned hereby accepts the grant of the Award described in this Agreement and agrees to the terms and conditions hereof and of the PAR Technology Corporation 2015 Equity Incentive Plan (the “Plan”), and acknowledges receipt thereof.

Date:	May 17, 2017		/s/ Donald H. Foley
			Donald H. Foley

EXHIBIT A

CONSENT OF SPOUSE

I, Icy Mariam Foley, spouse of Donald H. Foley, have read and approve the Restricted Stock Award Agreement (the “ Agreement ”) to which this Consent of Spouse is attached. In consideration of PAR Technology Corporation’s issuance to my spouse, Donald H. Foley, the shares of common stock of PAR Technology Corporation set forth in the Agreement, I hereby appoint my spouse, Donald H. Foley, as my attorney-in-fact in respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or in any of the shares of common stock of PAR Technology Corporation issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

Date:	May 17, 2017		/s/ Icy Mariam Foley
			Signature of Spouse

Exhibit 10.3

AMENDMENT TO

RESTRICTED STOCK AWARD AGREEMENT

Amendment dated May 31, 2017 (the “ Amendment ”) between PAR Technology Corporation (the “ Company ”) and Donald H. Foley (“ Participant ”) to the Restricted Stock Award Agreement (the “ Agreement ”) dated May 17, 2017 between the Company and the Participant. Capitalized terms used but not specifically defined herein shall have the meanings specified in the Agreement.

RECITALS :

WHEREAS, the Company and the Participant are entering into this Amendment solely to correct an administrative error in the number of Shares granted and the vesting of the Shares under the Agreement .

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto hereby agree as follows:

1. Award of Restricted Stock .

Section 1(a) and Section 1(b) of the Agreement are hereby deleted and amended and restated in their entireties as follows:

(a) Award . Upon the terms and conditions set forth in this Agreement, effective as of the Grant Date, the Company hereby grants to Participant: a total of 10,243 shares of Restricted Stock (the “ Shares ”) under the Plan (the “ Award ”), which Shares shall be subject to the Restrictions set forth and defined in Section 2(a) and Section 2(c) and time vesting in accordance with Section 1(b) . The “ Grant Date ” shall be the Effective Date.

(b) Vesting Schedule . The Shares shall vest in increments, in accordance with the following schedule: (i) 1,940 Shares shall vest on May 31, 2017; (ii) 1,186 Shares shall vest on each of June 30, July 31, August 31, September 30, October 31, and November 30, 2017; and (iii) 1,187 Shares shall vest on December 31, 2017, each of the foregoing dates being referred to herein as, a “ Vesting Date ”. There shall be no proportionate or partial vesting in the periods prior to the applicable Vesting Date and all vesting shall occur only on the appropriate Vesting Date provided Participant is then providing services to the Company or, if Participant is no longer providing services to the Company, Participant’s employment was terminated without cause by the Company.

2. Miscellaneous

(a) Except as amended hereby all other terms and provisions of the Agreement remain unchanged and in full force and effect.

(b) Signatures. This Amendment may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

Signature Page to

AMENDMENT TO

RESTRICTED STOCK AWARD AGREEMENT

	PAR Technology Corporation

	By:	/s/ Paul Eurek
	Paul Eurek, Chairman of the Compensation Committee

	/s/ Donald H. Foley
	Donald H. Foley

Exhibit 10.4

Omnibus Amendment Number 1

Loan Documents

This Omnibus Amendment Number 1 to Loan Documents (“Amendment”) is entered into as of August 10, 2017 by and among PAR Technology Corporation, a Delaware corporation (the “ Borrower ”), and ParTech, Inc. (“ Partech ”), PAR Government Systems Corporation (“ PAR Government ”), Rome Research Corporation (“ Rome Research ”), each a New York corporation, Ausable Solutions, Inc., a Delaware corporation (“ Ausable ”), and Brink Software, Inc., a California corporation (“ Brink ”, and together with the Borrower, Partech, PAR Government, Rome Research, and Ausable, the “ Loan Parties ”) and JPMorgan Chase Bank, N.A. (the “ Lender ”). The Loan Parties and the Lender being referred to herein collectively, as the “ parties ” and each of the foregoing being sometimes referred to herein individually, as a “ party ”.

In consideration of the promises and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Loan Parties and the Lender hereby agree as follows:

1. Definitions . All capitalized terms used in this Amendment which are not otherwise defined herein shall have the respective meanings given to those terms in the Credit Agreement dated as of November 29, 2016 among PAR Technology Corporation and the Loan Parties identified as parties thereto and JPMorgan Chase Bank, N.A. ( as it may be amended, restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”).

2. Amendments to the Credit Agreement .

A. Article I, Section 1.01 . The parties hereto acknowledge and agree that the “Defined Terms” contained in Section 1.01 of the Credit Agreement, and set forth below, are hereby deleted and amended and restated in their entireties as follows:

“ Eligible Accounts ” means, at any time, the Accounts of the Borrower which the Lender determines in its Permitted Discretion are eligible as the basis for the extension of Loans and the issuance of Letters of Credit. Without limiting the Lender’s discretion provided herein, Eligible Accounts shall not include any Account:

(a) which is not subject to a first priority perfected security interest in favor of the

Lender;

(b) which is subject to any Lien other than (i) a Lien in favor of the Lender and (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Lender;

(c) (i) with respect to which is unpaid more than 90 days after the date of the original invoice therefor, (ii) which is unpaid more than 60 days after the original due date, or (iii) which has been written off the books of the Borrower or otherwise designated as uncollectible; provided that Accounts unpaid more than 90 days but less than 120 days from the date of original invoice which are not more than 60 days past due may be included in Eligible Accounts in an amount not exceeding $1,000,000 in the aggregate;

(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible pursuant to clause (c) above;

(e) which is owing by an Account Debtor (other than McDonald’s Corporation or a consolidating subsidiary thereof) to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to the Borrower exceeds 20% of the aggregate amount of Eligible Accounts;

(f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been breached or is not true;

(g) which (i) does not arise from the sale of goods, or the performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Lender which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon the Borrower’s completion of any further performance, (v) represents a sale on a bill-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis, or (vi) relates to payments of interest;

(h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by the Borrower or if such Account was invoiced more than once;

(i) with respect to which any check or other instrument of payment has been returned uncollected for any reason;

(j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;

(k) which is owed by any Account Debtor which has sold all or substantially all of its assets;

(l) which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or (ii) is not organized under applicable law of the U.S. or any state of the U.S. or the District of Columbia unless, in either case, such Account is backed by a letter of credit acceptable to the Lender which is in the possession of, has been assigned to and is directly drawable by the Lender;

(m) which is owed in any currency other than U.S. dollars;

(n) which is owed by (i) any Governmental Authority of any country other than the U.S., unless such Account is backed by a letter of credit acceptable to the Lender which is in the possession of, and is directly drawable by, the Lender, or (ii) any Governmental Authority of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Lender in such Account have been complied with to the Lender’s satisfaction;

(o) which is owed by any Affiliate of any Loan Party or any, employee, officer, director, agent or stockholder of any Loan Party or any of its Affiliates;

(p) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but only to the extent of such indebtedness or is subject to any security, deposit, progress payment, retainage or other similar advance made by or for the benefit of an Account Debtor, in each case to the extent thereof;

(q) which is subject to any counterclaim, deduction, defense, setoff or dispute, but only to the extent that such Account is subject to any such counterclaim, deduction, defense, setoff or dispute;

(r) which is evidenced by any promissory note, chattel paper or instrument;

(s) which is owed by an Account Debtor (i) located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit the Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless the Borrower has filed such report or qualified to do business in such jurisdiction or (ii) which is a Sanctioned Person;

(t) with respect to which the Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business, to the extent of the agreed upon reduction, or any Account which was partially paid and the Borrower created a new receivable for the unpaid portion of such Account;

(u) which does not comply in all material respects with the requirements of all applicable laws and regulations, whether federal, state or local, including without limitation the Federal Consumer Credit Protection Act, the Federal Truth in Lending Act and Regulation Z of the Board;

(v) which is for goods that have been sold under a purchase order or pursuant to the terms of a contract or other agreement or understanding (written or oral) that indicates or purports that any Person other than the Borrower has or has had an ownership interest in such goods, or which indicates any party other than the Borrower as payee or remittance party;

(w) which was created on cash on delivery terms; or

(x) which the Lender reasonably determines may not be paid by reason of the Account Debtor’s inability to pay or which the Lender otherwise reasonably determines is unacceptable for any reason whatsoever.

The above notwithstanding, Eligible Accounts shall include payments for software as a service (“SaaS”) provided by a Loan Party, including payments for SaaS provided in connection with a Loan Party’s lease of I nventory to third parties, or a Loan Party’s permitting a third party to take possession of Inventory on a trial evaluation basis, and shall exclude payments for leased Inventory or Inventory in the possession of a third-party on a trial evaluation basis. In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder, the Borrower shall notify the Lender thereof on and at the time of submission to the Lender of the next Borrowing Base Certificate. In determining the amount of an Eligible Account, the face amount of an Account may, in the Lender’s Permitted Discretion, be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that the Borrower may be obligated to rebate to an Account Debtor pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrower to reduce the amount of such Account.

“ Eligible Inventory ” means, at any time, raw material and finished goods Inventory of the Borrower which the Lender determines in its Permitted Discretion is eligible as the basis for the extension of Loans and the issuance of Letters of Credit. Without limiting the Lender’s discretion provided herein, Eligible Inventory shall not include any Inventory:

(a) which is not subject to a first priority perfected Lien in favor of the Lender;

(b) which is subject to any Lien other than (i) a Lien in favor of the Lender and (ii) a Permitted Encumbrance which does not have priority over the Lien in favor of the Lender;

(c) which is, in the Lender’s Permitted Discretion, slow moving, obsolete, unmerchantable, defective, used, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;

(d) with respect to which any covenant, representation, or warranty contained in this Agreement or the Security Agreement has been breached or is not true and which does not conform to all standards imposed by any Governmental Authority;

(e) in which any Person other than the Borrower shall (i) have any direct or indirect ownership, interest or title to such Inventory or (ii) be indicated on any purchase order or invoice with respect to such Inventory as having or purporting to have an interest therein;

(f) which is not finished goods or which constitutes work-in-process, spare or replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, samples, prototypes, displays or display items, bill-and-hold or ship-in-place goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;

(g) which is not located in the U.S. or is in transit with a common carrier from vendors and suppliers;

(h) which is located in any location leased by the Borrower unless (i) the lessor has delivered to the Lender a Collateral Access Agreement or (ii) a reserve for rent, charges and other amounts due or to become due with respect to such facility has been established by the Lender in its Permitted Discretion;

(i) which is located in the facility of a lessee of Inventory or of a transferee of Inventory under trial evaluation arrangements in contemplation of a sale or lease;

(j) which is located in any third-party warehouse or is in the possession of a bailee (other than a third party processor) where, in each instance, more than $75,000 is located and is not evidenced by a Document, unless (i) such warehouseman or bailee has delivered to the Lender a Collateral Access Agreement and such other documentation as the Lender may require or (ii) an appropriate reserve has been established by the Lender in its sole discretion;

(k) which is being processed offsite at a third-party location or outside processor, or is in transit to or from such third-party location or outside processor;

(l) which is a discontinued product or component thereof;

(m) which is the subject of a consignment by the Borrower as consignor;

(n) which is perishable;

(o) which contains or bears any intellectual property rights licensed to the Borrower unless the Lender is satisfied in Lender’s Permitted Discretion that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any liability with respect to payment of royalties, other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

(p) which is not reflected in a current perpetual inventory report of the Borrower;

(q) for which reclamation rights have been asserted by the seller;

(r) which has been acquired from a Sanctioned Person; or

(s) which the Lender otherwise reasonably determines is unacceptable for any reason whatsoever.

In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory hereunder, the Borrower shall notify the Lender thereof on and at the time of submission to the Lender of the next Borrowing Base Certificate.

“ Loan Parties ” shall not include PAR Springer-Miller Systems, Inc., a Delaware corporation, or Springer-Miller International, LLC, a Delaware limited liability company.

B. Article VI, Section 6.03(b) . The parties hereto acknowledge and agree that subsection (b) of Section 6.03 of the Credit Agreement and the provisions thereof, is hereby deleted and amended and restated in its entirety as follows:

“(b) No Loan Party will, nor will it permit any Subsidiary to, engage to any material extent in any business other than businesses of the type conducted by the Borrower and its Subsidiaries on the date hereof and businesses reasonably related thereto; subject to Section 6.05(a)(i) of this Agreement, a Loan Party’s lease of I nventory to third parties, or a Loan Party’s permitting a third party to take possession of Inventory on a trial evaluation basis constitutes a reasonably related business.”

C. Article VI, Section 6.05 . The parties hereto acknowledge and agree that Section 6.05 of the Credit Agreement and the provisions thereof, are hereby deleted and amended and restated in their entireties as follows:

“SECTION 6.05. Asset Sales . No Loan Party will, nor will it permit any Subsidiary to, sell, transfer, lease or otherwise dispose of any asset, including any Equity Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with Section 6.04), except:

(a) sales, transfers, leases and dispositions of (i) Inventory in the ordinary course of business, including transfers of Inventory under trial evaluation arrangements in contemplation of a sale or lease; provided that the aggregate fair market value of Inventory leased or under trial evaluation arrangements in contemplation of a sale or lease shall not exceed $750,000 at any one time; and (ii) obsolete, worn out or surplus Equipment or property in the ordinary course of business;

(b) sales, transfers, and dispositions of assets to the Borrower or any Subsidiary, provided that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;

(c) sales, transfers and dispositions of Accounts (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

(d) sales, transfers and dispositions of Permitted Investments and other investments permitted by clauses (i) and (k) of Section 6.04

(e) Sale and Leaseback Transactions permitted by Section 6.06;

(f) dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary; and

(g) sales, transfers and other dispositions of assets (other than Equity Interests in a Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not exceed $500,000 during any fiscal year of the Borrower;

provided that all sales, transfers, leases and other dispositions permitted under this Section 6.05 (other than those permitted by paragraphs (b), (d) and (f) above) shall be made for fair value and for cash consideration.”

3. Amendments to the Security Agreement .

A. “ Grantor” or “Grantors” . PAR Springer-Miller Systems, Inc., a Delaware corporation, or Springer-Miller International, LLC, a Delaware limited liability company, shall no longer be a Grantor party to the Security Agreement.

B. Article IV, Section 4.1(g) . The parties hereto acknowledge and agree that subsection (g) to Section 4.1 of the Security Agreement and the provisions thereof, is hereby deleted and amended and restated in its entirety as follows:

“(g) Locations . Such Grantor will not (i) maintain any Collateral owned by it at any location other than those locations listed on Exhibit A, (ii) otherwise change, or add to, such locations without the Lender’s prior written consent as required by the Credit Agreement, and, if the Lender gives such consent, such Grantor will concurrently therewith obtain a Collateral Access Agreement for each such location to the extent required by the Credit Agreement; the Lender shall be deemed to have consented to the location of Collateral placed in accordance with Section 6.05(a)(i) of the Credit Agreement, or (iii) change its principal place of business or chief executive office from the location identified on Exhibit A, other than as permitted by the Credit Agreement.

C. Article IV, Section 4.3 . The parties hereto acknowledge and agree that Section 4.3 of the Security Agreement is hereby amended to,

(i) delete and amend and restate in its entirety subsection (b) of Section 4.3 as follows:

“ (b) Returned Inventory . Except the return of Inventory on a trial evaluation basis, as contemplated by Section 6.05(a)(i) of the Credit Agreement, if an Account Debtor returns any Inventory to such Grantor when no Event of Default exists, then such Grantor shall promptly determine the reason for such return and shall issue a credit memorandum to the Account Debtor in the appropriate amount. Such Grantor shall immediately report to the Lender any return involving an amount in excess of $25,000. Each such report shall indicate the reasons for the returns and the locations and condition of the returned Inventory. In the event any Account Debtor returns Inventory to such Grantor when an Event of Default exists, such Grantor, upon the request of the Lender, shall: (i) hold the returned Inventory in trust for the Lender; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Lender’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Lender’s prior written consent. All returned Inventory shall be subject to the Lender’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory and such returned Inventory shall not be Eligible Inventory.”

4. Provisions of General Application .

A. This Amendment is a Loan Document, and the amendments to the Credit Agreement and the Security Agreement set forth in this Amendment shall be effective as of June 30, 2017, and any default under Section 4.1 (g) of the Security Agreement relating to the location of certain of the Inventory constituting Collateral prior to such effective date is hereby waived. The Credit Agreement and the Security Agreement, each as amended hereby, shall remain in full force and effect. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same agreement. Delivery of an executed counterpart to this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart to this Amendment. Any party delivering an executed counterpart to this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

B. This Amendment contains the entire agreement of the parties hereto concerning the subject matter hereof and supersedes all prior oral or written discussions, proposals, negotiations or communications concerning the subject matter hereof.

C. After giving effect to this Amendment, each of the representations and warranties contained in this Amendment, the Credit Agreement, the Security Agreement and the other Loan Documents is true and correct in all material respects on and as of the date hereof as if made on the date hereof (except to the extent that such representation or warranty expressly relates to an earlier date) and no Default or Events of Default shall have occurred and be continuing under the Loan Documents after giving effect to this Amendment.

IN WITNESS WHEREOF, the Loan Parties and the Lender have executed this Amendment as of the date set forth above.

Loan Parties :	PAR TECHNOLOGY CORPORATION

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	General Counsel & Secretary

	PARTECH, INC.

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	Secretary

	PAR GOVERNMENT SYSTEMS CORPORATION

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	Secretary

	ROME RESEARCH CORPORATION

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	Secretary

	AUSABLE SOLUTIONS, INC.

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	Secretary

	BRINK SOFTWARE, INC.

	By:	/s/ Cathy A. King

	Name:	Cathy A. King

	Title:	Secretary

Lender :	JPMORGAN CHASE BANK, N.A.

	By:	/s/ Karen L. Mikols

	Name:	Karen L. Mikols

	Title:	Vice President

Exhibit 31.1

I, Donald H. Foley, certify that:

1.	I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluations; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 14, 2017	/s/ Donald H. Foley
	Donald H. Foley
	Chief Executive Officer & President
	(Principal Executive Officer)

Exhibit 31.2

I, Bryan A. Menar, certify that:

1.	I have reviewed this report on Form 10-Q of PAR Technology Corporation;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 14, 2017	/s/ Bryan A. Menar
	Bryan A. Menar
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

Certification of Principal Executive Officer

pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,

and 18 U.S.C. Section 1350

In connection with the Quarterly Report of PAR Technology Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Donald H. Foley, Chief Executive Officer & President of the Company, certify pursuant to 18 U.S.C. § 1350, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2017

/s/ Donald H. Foley
Donald H. Foley
Chief Executive Officer & President
(Principal Executive Officer)

Exhibit 32.2

Certification of Principal Financial Officer

pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended,

and 18 U.S.C. Section 1350

In connection with the Quarterly Report of PAR Technology Corporation (the “Company”) on Form 10-Q for the quarter ended June 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bryan A. Menar, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, that, to my knowledge:

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 14, 2017

/s/ Bryan A. Menar
Bryan A. Menar
Chief Financial Officer
(Principal Financial Officer)

Item Number		Page

Item 1.	Financial Statements (unaudited)

	Consolidated Statements of Operations for the three and six months ended June 30, 2017 and June 30, 2016	1

	Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2017 and June 30, 2016	2

	Consolidated Balance Sheets at June 30, 2017 and December 31, 2016	3

	Consolidated Statements of Cash Flows for the six months ended June 30, 2017 and June 30, 2016	4

	Notes to Unaudited Interim Consolidated Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22

Item 4.	Controls and Procedures	22

PART II
OTHER INFORMATION

Item 1.	Legal Proceedings	23

Item 1A.	Risk Factors	23

Item 2.	Unregistered Sales of Equity Securities and Use Of Proceeds	24

Item 5.	Other Information	24

Item 6.	Exhibits	25

Signatures		26

Exhibit Index		27