Company: IIIV
Filing Date: 2025-08-08
Form Type: 10-Q
Source: 0001728688-25-000108
Chunk: 137

Company: i3 Verticals, Inc.
Filing Date: 2025-08-08
Form: 10-Q
Item: Part I, Item 1
Chunk 137
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 Class A Common Stock purchased during this nine-month period represent the total number of shares of Class A Common Stock purchased under the Prior Share Repurchase Program since its adoption.

Tax Receivable Agreement

We are a party to a Tax Receivable Agreement with i3 Verticals, LLC and each of the Continuing Equity Owners, as described in Note 10 of our condensed consolidated financial statements. As a result of the Tax Receivable Agreement, we have been required to establish a liability in our condensed consolidated financial statements. That liability, which will increase upon the redemptions or exchanges of Common Units for our Class A common stock, generally represents 85% of the estimated future tax benefits, if any, relating to the increase in tax basis associated with the Common Units we received as a result of the reorganization transactions entered into in connection with our IPO and other redemptions or exchanges by holders of Common Units. If this election is made, the accelerated payment will be based on the present value of 100% of the estimated future tax benefits and, as a result, the associated liability reported on our condensed consolidated financial statements may be increased. We expect that the payments required under the Tax Receivable Agreement will be substantial. The actual increase in tax basis, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of redemptions or exchanges by the holders of Common Units, the price of our Class A common stock at the time of the redemption or exchange, whether such redemptions or exchanges are taxable, the amount and timing of the taxable income we generate in the future and the tax rate then applicable as well as the portion of our payments under the Tax Receivable Agreement constituting imputed interest. We intend to fund the payment of the amounts due under the Tax Receivable Agreement out of the cash savings that we actually realize in respect of the attributes to which the Tax Receivable Agreement relates. 

As of June 30, 2025, the total amount due under the Tax Receivable Agreement was $35.1 million, and payments to the Continuing Equity Owners related to exchanges through June 30, 2025 will range from $0 to $3.5 million per year and are expected to be paid over the next 26 years. The amounts recorded as of June 30, 2025, approximate the current estimate of expected tax savings and are subject to change after the filing of the Company’s U.S. federal and state income tax