Company: IIIV
Filing Date: 2025-01-10
Form Type: DEF 14A
Source: 0001728688-25-000006
Chunk: 65

Company: i3 Verticals, Inc.
Filing Date: 2025-01-10
Form: DEF 14A
Chunk 65
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. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners maintaining a continued ownership interest in i3 Verticals, LLC. If a Continuing Equity Owner transfers common units but does not assign to the transferee of such units its rights under the Tax Receivable Agreement, such Continuing Equity Owner generally will continue to be entitled to receive payments under the Tax Receivable Agreement arising in respect of a subsequent exchange of such common units. In general, the Continuing Equity Owners’ rights under the Tax Receivable Agreement may not be assigned, sold, pledged or otherwise alienated to any person, other than certain permitted transferees, without (a) our prior written consent, which should not be unreasonably withheld, conditioned or delayed, and (b) such person’s becoming a party to the Tax Receivable Agreement and agreeing to succeed to the applicable Continuing Equity Owner’s interest therein.

Although the actual timing and amount of any payments that may be made under the Tax Receivable Agreement will vary, we expect that the payments that we may be required to make (directly or indirectly) to the Continuing Equity Owners could be substantial. During the year ended September 30, 2024, liabilities for payments due to the Continuing Equity Owners under our Tax Receivable Agreement decreased $0.9 million. Since October 1, 2023, we have made approximately $59,000 of cash disbursements pursuant to the Tax Receivable Agreement. In addition, in connection with the tax benefits realized by us during the year ended September 30, 2024, as a result of the gain on sale of the Merchant Services Business which was completed in September 2024, we expect to make cash payments to certain Continuing Equity Owners during the three months ended March 31, 2025, pursuant to the terms of the Tax Receivables Agreement in the aggregate amount of approximately $10 million (the final amounts of which payments have not yet been definitively determined).

Any payments made to the Continuing Equity Owners under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us or to i3 Verticals, LLC. To the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts will be deferred and will accrue interest until paid; provided that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may result in the acceleration of payments due under the Tax Receivable Agreement.