Company: IIIV
Filing Date: 2025-02-07
Form Type: 10-Q
Source: 0001728688-25-000043
Chunk: 74

Company: i3 Verticals, Inc.
Filing Date: 2025-02-07
Form: 10-Q
Item: Part I, Item 1
Chunk 74
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-plead their claims, which leaves some of their claims now dismissed with prejudice. The Sheriffs re-plead their claims, and certain Defendants have filed renewed pleading-stage motions to dismiss, which remain pending.The assets of the S&S business were acquired from South Pointe by the Company in 2018 for $17,000, including upfront cash consideration and contingent consideration, and provides software and payments services within the Company’s Public Sector vertical to local government agencies almost exclusively in Louisiana.

The Company is unable to predict the outcome of this litigation. While we do not believe that this matter will have a material adverse effect on our business or financial condition, we cannot give assurance that this matter will not have a material effect on our results of operations or cash flows for the period in which it is resolved. 

15. RELATED PARTY TRANSACTIONS

In connection with the Company’s IPO, the Company and i3 Verticals, LLC entered into a Tax Receivable Agreement with the Continuing Equity Owners that provides for the payment by the Company to the Continuing Equity Owners of 85% of the amount of certain tax benefits, if any, that it actually realizes, or in some circumstances, is deemed to realize in its tax reporting, as a result of (i) future redemptions funded by the Company or exchanges, or deemed exchanges in certain circumstances, of Common Units of i3 Verticals, LLC for Class A common stock of i3 Verticals, Inc. or cash, and (ii) certain additional tax benefits attributable to payments made under the Tax Receivable Agreement. See Note 10 for further information. As of December 31, 2024, the total amount due under the Tax Receivable Agreement was $39,223.See Note 20 for information regarding certain recapitalization actions involving the Continuing Equity Owners that the Company and i3 Verticals, LLC effected subsequent to December 31, 2024 in order to reduce excess cash held at the Company as a result of its “Up-C” structure.

16. SEGMENTS

The Company determines its operating segments based on ASC 280, Segment Reporting, in alignment with how the chief operating decision making group monitors and manages the performance of the business as well as the level at which financial information is reviewed. The Company’s operating segments are strategic business units that offer different products and services. As noted above, on September 20, 2024, the Company completed the transactions contemplated by the Purchase Agreement dated June 26, 2024, and sold the equity interests of