DEF 14A of i3 Verticals, Inc., Jan 9, 2024

DEF 14A of i3 Verticals, Inc.

Filed Jan 9, 2024 · FY20230001728688-24-000006

Open on EDGAR

  1. Non-Employee Director Compensation

    Non-Employee Director Compensation The following table summarizes the aggregate fees earned or paid and the value of equity-based awards earned by our non-employee directors during the Company’s fiscal year ended September 30, 2023:

  2. Non-Employee Director Compensation

    | Name (1) | Fees Earned or Paid in Cash ($) | Option Awards ($) (2) (3) | Total Compensation ($) | | Elizabeth Seigenthaler Courtney | 50,000 | 114,926 | 164,926 | | John Harrison | 40,000 | 114,926 | 154,926 | | Burton Harvey | 40,000 | 114,926 | 154,926 | | Timothy McKenna | 52,500 | 114,926 | 167,426 | | David Morgan | 55,000 | 114,926 | 169,926 | | David Wilds | 55,000 | 114,926 | 169,926 | | Decosta Jenkins | 40,000 | 114,926 | 154,926 |

  3. Non-Employee Director Compensation

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  4. Non-Employee Director Compensation

    | (1) Messrs. Daily and Whitson have been excluded from this table because they do not receive additional compensation for serving as a director by virtue of the fact that they serve as executive officers of the Company and their compensation is fully reflected in the Summary Compensation Table for executive officers. | | (2) Amounts reflect the grant-date Black-Scholes value of the stock options granted during the fiscal year ended September 30, 2023, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. For a discussion of the assumptions used to calculate the value of all option awards made to our non-employee directors, see Note 14 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. | | (3) As of September 30, 2023, the aggregate number of outstanding options to purchase Class A common stock in the Company held by our non-employee directors was as follows: 69,600 for each of Ms. Courtney and Mr. Morgan, 59,600 for each of Messrs. Harrison, Harvey and Wilds, 49,600 for Mr. McKenna and 25,406 for Mr. Jenkins. |

  5. PROPOSAL 1 — ELECTION OF DIRECTORS

    PROPOSAL 1 — ELECTION OF DIRECTORS Upon the recommendation of a majority of the Nominating and Corporate Governance Committee, the Board has nominated the nine persons listed below for election to serve as directors, each for a term of one year and until his or her successor is elected and qualified. The nominees for director are: •Gregory Daily •Clay Whitson •Elizabeth Seigenthaler Courtney •John Harrison •Burton Harvey •Decosta Jenkins •Timothy McKenna •David Morgan •David Wilds Each of the nominees has consented to being named as a director nominee in this Proxy Statement and has agreed to serve for the one year term to which he or she has been nominated, if elected. If any of the nominees is unable to serve or refuses to serve as a director, the proxies will be voted in favor of such other nominee(s), if any, as the Board of Directors may designate. The Company has no reason to believe that any Board nominee will be unable or unwilling to serve if elected as a director.

  6. Executive Summary

    Fiscal 2023 Highlights The following provides an overview of the Company’s financial performance during the fiscal year ended September 30, 2023. •Revenue for the fiscal year ended September 30, 2023 was $370.2 million, an increase of 16.5% compared to the fiscal year ended September 30, 2022. •Net loss for the fiscal year ended September 30, 2023, was $2.7 million, compared to a net loss of $23.2 million for the fiscal year ended September 30, 2022. •Net loss attributable to i3 Verticals, Inc. for the fiscal year ended September 30, 2023 was $0.8 million, compared to net loss attributable to i3 Verticals, Inc. of $17.1 million for the fiscal year ended September 30, 2022. •Adjusted EBITDA for the fiscal year ended September 30, 2023, was $100.4 million, compared to Adjusted EBITDA of $79.6 million for the fiscal year ended September 30, 2022.* •Diluted net loss per share available to Class A common stock for the fiscal year ended September 30, 2023 was $0.07, compared to a net loss per share of $0.77 in the prior year. •For the year ended September 30, 2023, pro forma adjusted diluted earnings per share, which gives pro forma effect to the Company’s tax rate, was $1.52, compared to $1.48 for the year ended September 30, 2022.* •Annualized Recurring Revenue (“ARR”) for the fourth quarter of fiscal year 2023 and 2022 was $312.9 million and $281.2 million, respectively, representing a period-to-period growth rate of 11.3%. •Software and related services revenue as a percentage of total revenue was 50% and 49% for the fiscal years ended September 30, 2023 and 2022, respectively. Payments revenue as a percentage of total revenue was 45% and 45% for the fiscal years ended September 30, 2023 and 2022, respectively. * Adjusted EBITDA and pro forma adjusted diluted earnings per share are non-GAAP financial measures. See Appendix A for a definition of such non-GAAP financial measures, an explanation of why we believe such non-GAAP financial measures present useful information to investors, and a reconciliation of such non-GAAP financial measures to the most comparable GAAP measures. In addition to our financial performance, other achievements of the Company during the fiscal year ended September 30, 2023, included: •Completion of the acquisition of Celtic Cross Holdings, Inc. and Celtic Systems Pvt. Ltd, on October 1, 2022 for $85.0 million to expand the Company’s software offerings in the Public Sector vertical; •Completion of the acquisition of AccuFund, Inc. on January 1, 2023 for $15.3 million to complement our product offerings with a strong fund accounting solution; and •Refinancing of our credit facility on May 8, 2023, which provides for aggregate commitments of $450.0 million. Key Compensation Actions for Fiscal Year 2023 The following highlights key compensation actions of the Company with respect to the Company’s named executive officers for the fiscal year ended September 30, 2023: •Effective January 1, 2023, Messrs. Daily, Whitson, Stanford, and Maple’s annual base salaries were increased to $341,250, $262,500, $315,000, $275,000, respectively, reflecting increases of 5%, 5%, 5% and 12%, respectively, in comparison to the base salary paid to such individuals during the calendar year ended December 31, 2022. Mr. Christians’ base salary remained at $350,000, the same base salary paid to Mr. Christians during the calendar year ended December 31, 2022. •Messrs. Whitson, Stanford, Maple and Christians were eligible to receive short-term awards for the fiscal year ended September 30, 2023, in the form of a cash bonus as approved by the Compensation Committee. Under the terms of these awards approved by the Compensation Committee in November 2022, Messrs. Whitson, Stanford and Maple were each eligible for a target payout opportunity of 25% of 2023 base salary, and Mr. Christians was eligible for a target payout opportunity of 15% of 2023 base salary. Taking into account the Compensation Committee’s review of applicable factors as described in more detail below, Messrs. Whitson, Stanford, Maple and Christians received a cash bonus for the fiscal year ended September 30, 2023, of $13,125, $15,750, $13,750 and $17,500, respectively, which equaled 5% of such individuals’ base salary (as of September 30, 2023). •In February 2023, the Company granted stock options to Messrs. Whitson, Stanford, Maple and Christians exercisable for 101,076, 103,000, 74,667 and 75,000 shares of Class A Common Stock, respectively. The options had an exercise price of $26.31, the closing stock price of the Company’s Class A common stock on the grant date, and will vest ratably in four equal annual installments on the anniversary of the date of grant subject to the executive’s continued service with the Company. •In November 2022, Paul Christians was promoted to Chief Operating Officer of the Company, having previously served as the President of the Company’s Public Sector Division since May 2019. In connection with the promotion, Mr. Christians was granted 25,000 performance stock units and 5,000 restricted stock units. The performance stock units will vest in equal installments over a five-year period subject to continued service and the achievement of adjusted diluted earnings per share growth objectives. The restricted stock units will vest ratably in four equal annual installments on the anniversary of the date of grant subject to Mr. Christians’ continued service with the Company.

  7. Compensation Philosophy

    Compensation Philosophy The fundamental objectives of our executive compensation policies are to attract, retain and motivate executives and to incentivize our executives to execute our business strategy and to deliver strong financial results and long-term stockholder value. We believe that we have a strong “pay for performance” philosophy, and the Compensation Committee seeks to implement an executive compensation structure that is fair, balanced, aligned with stockholder interests, and linked to overall financial performance and long-term stockholder value. Consistent with the goal of focusing on long-term stockholder value, the target levels of compensation payable to our executives are weighted more heavily towards long-term equity incentive awards than short-term cash incentive awards. Additionally, our philosophy considers employee retention, vulnerability to recruitment by other companies, and the difficulty and costs associated with replacing executive talent. Based on these objectives, the Compensation Committee has determined that the compensation payable to our named executive officers should primarily consist of the following: (i) base salary, which is intended to provide a secure level of guaranteed cash compensation; (ii) annual cash bonuses, which take into account the level of achievement with respect to certain financial and stock price objectives established by the Compensation Committee at the beginning of the fiscal year; and (iii) long-term equity-based incentive awards which further align the interests between executive officers and our stockholders. Annual cash bonuses are determined following the completion of the fiscal year based on the Compensation Committee’s discretionary evaluation of management’s performance during the year taking into account the level of achievement with respect to these pre-defined objectives. The Compensation Committee believes that discretionary bonuses are preferable to formulaic cash incentive awards because this compensation approach allows for greater flexibility and permits the Compensation Committee to consider and weigh all factors that it may deem relevant to an executive’s performance in a particular period, which factors and weighting may differ from period to period. The Compensation Committee believes that a formulaic approach, on the other hand, would have the potential to skew the focus of our executives toward short-term financial performance, which is more easily measured, at the expense of focusing on longer term goals and considerations with respect to our business and achieving sustained growth in financial performance. Similarly, the Compensation Committee believes that such an approach may provide a disincentive for management to change course or reallocate resources where necessary to respond to unanticipated risks or opportunities, because management may be reluctant to shift focus away from the pre-established objectives on which their performance would be measured. In these respects, the Compensation Committee also believes that its more flexible, subjective approach to bonuses helps to ensure that executives are not provided with an incentive to take inappropriate risks in order to meet short-term financial objectives and drive short-term stock performance. In the fiscal year ended September 30, 2023, the Compensation Committee approved the grant of long-term equity-based incentive awards to our named executives principally in the form of time-based vesting stock options. The Compensation Committee approved the grant of stock options as the principal form of equity-based compensation to named executive officers based on its view that stock options are an optimal form of equity award to retain and motivate senior executives, to align the interests of our senior executives with our stockholders, and to incentivize our senior executives to create long-term stockholder value.

  8. Compensation Committee Processes and Analyses

    Compensation Committee Processes and Analyses Role of Compensation Committee The Compensation Committee sets and administers the policies that govern compensation of our executive officers, including, among other things: •reviewing and approving the Company’s compensation strategy, corporate goals and objectives relevant to senior management compensation (including with respect to the Company’s Chief Executive Officer) and the total compensation policy for the Company to ensure they support business objectives, create stockholder value, are consistent with stockholder interests, attract and retain required key executive talent and link compensation with business performance; •annually evaluating the performance of the Chief Executive Officer in light of the Company’s corporate goals and objectives relevant to the Chief Executive Officer’s compensation; •in consultation with the Chief Executive Officer and Chief Financial Officer, reviewing and approving annual performance goals and total compensation with respect to performance-based or incentive compensation plans and individual awards for executive officers and other members of senior management; •reviewing and approving individual compensation and incentive arrangements (including any equity-based awards and employment or severance agreements or change in control agreements) for executive officers and other members of senior management of the Company; and •overseeing the administration of equity-based plans or incentive compensation plans, which includes selecting the persons to whom awards will be made and determining the terms and conditions of each award under such plans. Each of the Compensation Committee members is independent as defined under Nasdaq listing standards. In addition, each members of the Compensation Committee is a “non-employee director” for purposes of Section 16(b) of the Exchange Act. Role of the Compensation Committee’s Independent Consultant In recent years, including the fiscal year ended September 30, 2023, the Compensation Committee has retained the services of FW Cook as its compensation consultant to provide independent counsel and advice on executive compensation matters. The Compensation Committee engaged FW Cook to provide independent compensation advice, perspective and data for annual executive and director compensation. FW Cook regularly assesses our compensation program’s potential for risk and its competitiveness relative to our industry and our peers. FW Cook attends Compensation Committee meetings upon request. While the Compensation Committee considers input from FW Cook when making compensation decisions, the Compensation Committee’s final decisions reflect many factors and considerations. The Compensation Committee annually reviews the independence of its compensation consultant. The Compensation Committee considered the Company’s relationship with FW Cook, assessed the independence of FW Cook pursuant to Nasdaq and Exchange Act rules, and concluded that there are no conflicts of interest that would preclude FW Cook from independently representing the Compensation Committee. Role of Our Named Executive Officers in Determining Executive Compensation The Compensation Committee solicits the views and recommendations of our Chief Executive Officer and Chief Financial Officer when setting the amount and form of compensation payable to our executives, given their insight into executive performance and other factors relevant to our executive compensation. At a Compensation Committee meeting, typically held during the first quarter of each fiscal year, the Chief Executive Officer and Chief Financial Officer summarizes their assessment of the performance during the previous year of each member of the executive team, other than the Chief Executive Officer and Chief Financial Officer, including their recommendations on compensation for such members of the executive team, other than the Chief Executive Officer and Chief Financial Officer. Following this presentation and Compensation Committee discussion, the Compensation Committee discusses and approves the compensation for each member of the executive team, other than the Chief Executive Officer and Chief Financial Officer. The process is similar for determining the compensation for the Chief Executive Officer and Chief Financial Officer, except that the Chief Executive Officer and the Chief Financial Officer are not present during voting or deliberations with respect to the compensation payable to such individuals. Impact of Say-on-Pay Vote Results The Company will hold its first Say-on-Pay Vote at the Annual Meeting (Proposal 3). The “say-on-pay” vote is advisory, which means that the vote is not binding on the Company, the Board, or the Compensation Committee. Although the vote is non-binding, the Compensation Committee and the Board value the opinions of stockholders and will review the voting results in connection with its ongoing evaluation of our compensation philosophy and compensation decisions.

  9. Executive Compensation for 2023

    Executive Compensation for 2023 Program Elements The 2023 executive compensation program primarily consisted of: •Base salaries; •Annual cash bonuses; and •Equity incentive compensation, principally in the form of stock options. Peer Group Analysis The Compensation Committee engaged FW Cook to conduct a peer group compensation analysis in February 2023 in order to inform the Compensation Committee on current competitive compensation levels (both in terms of the forms and total amount of compensation) of executives at surveyed companies in comparison to the executive compensation payable to the Company’s senior executives. Individual compensation elements covered in the analysis included salary, target annual bonus, and target long-term incentive grant values at selected companies. Competitive market compensation data were compiled from the following two sources: •A nationally recognized compensation third-party survey with compensation data from over 2,000 technology industry participants; and •Proxy statement disclosures of the Company’s compensation peer group developed by FW Cook (the “Peer Group”). The 18 companies in the Peer Group were:

  10. Executive Compensation for 2023

    Among the companies included in the Peer Group, the Company was at the 65th percentile among these companies in annual revenue and 43rd among these companies in market capitalization as of December 31, 2022. The Compensation Committee has utilized FW Cook to provide similar peer group and other comparative data in previous fiscal years (including in the fiscal year ended September 30, 2022), and may continue to do so in the future. One company from the 2022 Peer Group was removed because it is no longer a public company (Bottomline Technologies) and two companies were added to the Peer Group for 2023 (EngageSmart and EverCommerce). At the time that this data was received from FW Cook in February 2023, the Compensation Committee had determined base salary levels and short-term cash incentive opportunities for named executive officers for the fiscal year ended September 30, 2023, but had not approved the annual grant of equity awards for our named executive officers for this fiscal year. This analysis was intended to serve as a “market check” and reference point in relation to ongoing executive compensation decisions made by the Compensation Committee, including its assessment of the annual equity awards to be made to our executives in respect of our fiscal year ended September 30, 2023, which awards were approved by the Compensation Committee in February 2023, with the goal of ensuring that the amount and type of executive compensation payable to the Company’s executives is reasonably competitive compared to compensation levels paid to executives at similar companies. However, the Compensation Committee did not utilize such analysis for the purpose of establishing total compensation opportunities for the Company’s named executive officers (or any components of compensation payable to such named executive officers) at a specified percentile relative to the available third-party survey or Peer Group benchmark data. Base Salary We seek to provide base salaries for our executive officers that provide a secure level of guaranteed cash compensation in accordance with their experience, professional status, and job responsibilities. Each year, the Compensation Committee reviews and approves a revised annual salary plan for executive officers, taking into account various factors, including prior year salary, responsibilities, tenure, individual performance, salaries paid by similar companies for comparable positions solely for purposes of a “market check” with the goal of ensuring that the Company’s base salary levels are reasonably competitive compared to base salary levels at similar companies, and the Company’s recent financial performance. Each year, the Compensation Committee considers annual base salary increases for our executives, and typically approves base salary increases effective January 1 of each year. The Compensation Committee approved the following base salaries for our named executive officers effective January 1, 2023.

  11. Executive Compensation for 2023

    Taking into account the factors outlined above, the Compensation Committee approved annual base salary increases equal to 5.0% to Messrs. Daily, Whitson and Stanford as reflected above. Additionally, the Compensation Committee approved an increase in the base salary payable to Mr. Maple equal to 12.2%, which base salary increase was intended to cause Mr. Maple’s base salary to be more competitive with base salary levels payable to individuals serving in comparable roles at other companies taking into account market data previously provided to the Compensation Committee. The Compensation Committee made a determination not to approve an annual base salary increase payable to Mr. Christians during 2023, taking into account the fact that the base salary level of Mr. Christians was previously established at the time that the Company acquired Pace (where Mr. Christians was previously employed) in 2019, and such base salary level was and continues to be higher than the base salary levels of the Company’s other named executive officers as reflected above. Annual Cash Bonuses Annual bonuses are a key component of our executive compensation strategy. In addition to base salary, our annual cash bonuses provide our executives with the potential for enhanced cash compensation as may be determined by the Compensation Committee. Consistent with past practice, the Compensation Committee decided, in consultation with Mr. Daily, to not make available any cash incentive opportunities for Mr. Daily in fiscal year 2023 due to his considerable ownership share in the Company. The Company has utilized a short-term cash incentive program for executives in which the Compensation Committee retains the discretion to determine the amount of the short-term cash incentive amount payable to our executives (other than Mr. Daily) in relation to certain threshold and target percentage parameters (expressed as a percentage of base salary) established by the Compensation Committee at the beginning of our fiscal year. In connection therewith, in recent fiscal years (including in the fiscal year ended September 30, 2023), the Compensation Committee has approved at the beginning of each fiscal year certain relevant Company goals which may be considered by the Compensation Committee in connection with determining the amount of the cash incentive award ultimately payable to our named executive officers, while retaining the discretion to apply or not apply any of these goals (and not weighting any of these goals in terms of order of importance at the time they were established) and to determine the amount of any bonus payable to our executives irrespective of the level of achievement with respect to these goals. The Compensation Committee also considers individual performance in connection with determining the amount of any cash bonus payable to our named executive officers pursuant to this program. For the fiscal year ended September 30, 2023, the Compensation Committee approved the following goals and associated targets for this fiscal year for purposes of our short-term cash incentive program: Adjusted EBITDA, Adjusted EBITDA Margin, Annual Recurring Revenue, and the Company’s stock price performance in comparison to a group of selected group of peer companies. Two of these goals (Adjusted EBITDA and comparative stock price) were similarly used as goals in connection with determining short-term cash incentive opportunities for our executives during the fiscal year ended September 30, 2022, whereas two other goals (Adjusted EBITDA Margin and Annual Recurring Revenue) were new goals for purposes of our short-term cash incentive program and replaced other goals (Adjusted Net Revenue and Integrated Payments Percentage) which had been utilized in connection with determining short-term cash incentive opportunities during the fiscal year ended September 30, 2022. The Compensation Committee changed these two goals because the Compensation Committee believed that these new goals were desired metrics by the market and would more accurately reflect the underlying performance of the Company’s business. For information regarding Adjusted EBITDA (a non-GAAP financial measure), including the manner in which Adjusted EBITDA is calculated and a reconciliation of Adjusted EBITDA to the most comparable GAAP measure, see Appendix A. In November 2022, the Compensation Committee set the following percentage threshold and target bonus percentages (expressed as a percentage of 2023 base salary payable to such named executive officers).

  12. Executive Compensation for 2023

    | Named Executive Officer | Threshold Bonus Percentage | Target Bonus Percentage | | Greg Daily | —% | —% | | Clay Whitson | 10% | 25% | | Rick Stanford | 10% | 25% | | Paul Maple | 10% | 25% | | Paul Christians | 10% | 15% |

  13. Executive Compensation for 2023

    In connection with considering the short-term cash incentive compensation to be paid to our named executive officers (other than Mr. Daily) for the fiscal year ended September 30, 2023, at a meeting held in November 2023, the Compensation Committee took note of the fact that the Company met the performance guidelines set by the Compensation Committee for fiscal year 2023 in respect of the Adjusted EBITDA growth, Adjusted EBITDA margin and ARR goals, but did not meet the Company relative stock price performance goal. In determining the amount of cash bonus to be paid to such named executive officers, the Compensation Committee placed particular emphasis on the fact that the Company did not meet its relative stock price performance goal, and the fact that the stock price of the Company remained relatively flat, during the fiscal year ended September 30, 2023. Taking these factors into account, the Compensation Committee determine to award cash bonuses to our named executive officers (other than Mr. Daily) below the threshold bonus percentages set forth above and approved cash bonuses in the amount of $13,125, $15,750, $13,750 and $17,500 to Messrs. Whitson, Stanford, Maple and Christians, respectively, which equaled 5% of such named executive officer’s base salary (as of September 30, 2023). Equity Compensation Pursuant to our 2018 Plan, we may grant equity-based incentive awards in order to attract, motivate and retain employees, including our named executive officers. Equity awards are generally granted annually to eligible employees, including our named executive officers (other than Mr. Daily, as described further below). Equity incentive awards have historically been made in February of each year following the filing of our Quarterly Report on Form 10-Q for our first quarter ended December 31, and annual equity incentive awards for our fiscal year ended September 30, 2023, were made to our named executive officers (aside from the promotional grants made to Mr. Christians as described below) with a grant date of February 13, 2023. The Compensation Committee may also approve additional equity-based awards to executives in certain special circumstances, such as upon an executive’s initial employment with the Company, the promotion of an executive to a new position or in recognition of special contributions made by an executive. As discussed above, in the fiscal year ended September 30, 2023, the Compensation Committee determined to approve the grant of long-term equity-based incentive awards to our named executives principally in the form of time-based vesting stock options. The following summarizes the grant of long-term equity awards to our named executive officers (other than Mr. Daily) during the fiscal year ended September 30, 2023. Consistent with past practice, the Compensation Committee decided, in consultation with Mr. Daily, to award no equity compensation to Mr. Daily in fiscal year 2023 due to his considerable ownership share in the Company. Stock Options. In February 2023, the Compensation Committee approved the grant of time-based vesting stock options to Messrs. Whitson, Stanford, Maple and Christians exercisable for 101,076, 103,000, 74,667 and 75,000 shares of Class A Common Stock, respectively, with a grant date of February 13, 2023. The options had an exercise price of $26.31, the closing stock price of the Company’s Class A common stock on the grant date. In fiscal year 2023, the Compensation Committee determined to make two adjustments to the Company’s recent historical option grant practices. First, the Compensation Committee determined to grant a higher number of options to the Company’s named executive officers in fiscal year 2023 than they had in prior years to incentivize long-term value creation and for retention purposes, particularly given such executives’ importance to the Company and such executives’ lower than market historical base salaries and target bonus opportunities. Second, in furtherance of the goal of employee retention, the Compensation Committee determined to utilize a four-year vesting period compared to the three-year vesting period the Company had used for option grants in prior years. Restricted Stock Units (RSUs). In connection with the promotion of Mr. Christians to Chief Operating Officer in November 2022, the Compensation Committee approved the grant of 5,000 time-based vesting RSUs to Mr. Christians, which vest in equal installments over a four-year period and are settled in shares of Class A common stock, provided Mr. Christians is employed by the Company on the applicable vesting date. No other named executive officer was granted RSUs during fiscal year 2023. Performance Stock Units (PSUs). Additionally, in connection with the promotion of Mr. Christians to Chief Operating Officer in November 2022, the Compensation Committee approved the grant of 25,000 PSUs. The PSUs vest over a five-year period and are settled in shares of Class A common stock, provided Mr. Christians is employed by the Company on the applicable vesting date and certain year-over-year pro forma adjusted diluted earnings per share growth performance conditions are met. Pro forma adjusted diluted earnings per share is a non-GAAP financial measure. For additional information regarding the calculation of adjusted diluted earnings per share and the Company’s level of achievement under these PSUs in respect of the fiscal year ended September 30, 2023, see “—2023 Fiscal Year Performance With Respect to Vesting of Previously Granted PSUs” below. These PSUs were granted as a replacement award for 25,000 PSUs that had been granted to Mr. Christians in fiscal year 2022 (which PSUs were cancelled in connection with such new grant) in order to align the performance vesting conditions of these PSUs with Mr. Christians’ new role as Chief Operating Officer. No other named executive officer was granted PSUs during fiscal year 2023. The PSUs granted to Mr. Christians as referenced above are eligible to vest in increments of 5,000 shares per fiscal year over a period of five fiscal years, beginning with the fiscal year ended September 30, 2023, based on the Company’s achievement of pro forma adjusted diluted earnings per share targets for each such fiscal year (with target performance increasing in each succeeding fiscal year) which were determined in connection with the Compensation Committee’s initial approval of such grant, provided that Mr. Christians is employed by the Company on the applicable vesting date for each such fiscal year. In addition, under the terms of such grants, if the Company’s actual pro forma adjusted diluted earnings per share during an applicable fiscal year does not satisfy the applicable pro forma adjusted diluted earnings per share target for such fiscal year, the unearned PSUs remain eligible to vest in any subsequent fiscal year over such five-year performance period if the pro forma adjusted diluted earnings per share target for any such subsequent fiscal year is achieved by the Company during any such subsequent fiscal year. 2023 Fiscal Year Performance With Respect to Vesting of Previously Granted PSUs As disclosed above, the Compensation Committee approved the grant of 25,000 PSUs to Mr. Christians upon his promotion to Chief Operating Officer in November 2022. Additionally, during the fiscal year ended September 30, 2022, the Compensation Committee approved the grants of PSUs in respect of 25,000 shares of Class A common stock to each of Messrs. Whitson, Stanford and Maple.

  14. Compensation Policies and Practices as they relate to Risk Management

    Compensation Policies and Practices as they relate to Risk Management Our compensation program is designed to not incentivize excessive risk taking. In this regard, the base salary component of compensation is a fixed amount and is therefore not subject to or influenced by risk taking. In addition, the Compensation Committee believes that the Company’s more flexible, subjective approach to bonuses pursuant to the Company’s discretionary cash bonus program as described above helps to ensure that executives are not provided with an incentive to take inappropriate risks in order to meet short-term financial objectives and drive short-term stock performance. Further, our equity compensation grant practices are tied to the achievement of long-term stock price growth through the grant of stock options as well as PSUs which vest based upon the achievement of pro forma adjusted diluted earnings per share targets. Moreover, options granted to named executive officers vest over a four-year period beginning on the first anniversary of the grant date, which further emphasizes the long-term nature of this compensation component and reduces the incentive for risk taking. In addition, as set forth in our Incentive Equity Grant Policy, our stock option grants generally occur on an annual basis in accordance with a pre-determined schedule, which eliminates the ability of named executive officers to time the grant of options around short-term, market events. Taking into account these considerations, the Compensation Committee believes that the Company’s compensation programs do not motivate risk-taking that could reasonably be expected to have a material adverse effect on the Company. These principles are reviewed annually by the Compensation Committee.

  15. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding the compensation earned by, or paid to, our named executive officers during the fiscal years ended September 30, 2023, September 30, 2022, and September 30, 2021.

  16. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Bonus(1) ($) | Stock Awards(2) ($) | Option Awards(3) ($) | All Other Compensation(5) ($) | Total ($) | | Gregory Daily | 2023 | 337,188 | — | — | — | 8,401 | 345,589 | | Chief Executive Officer | 2022 | 325,000 | — | — | — | 9,114 | 334,114 | | | 2021 | 300,000 | — | — | — | 8,338 | 308,338 | | Clay Whitson | 2023 | 259,375 | 13,125 | — | 1,501,388 | 20,956 | 1,794,843 | | Chief Financial Officer | 2022 | 250,000 | 25,000 | 561,250 | 491,683 | 23,222 | 1,351,155 | | | 2021 | 225,000 | 22,500 | — | 648,813 | 19,135 | 915,448 | | Rick Stanford | 2023 | 311,250 | 15,750 | — | 1,529,883 | 17,120 | 1,874,003 | | President | 2022 | 300,000 | 30,000 | 561,250 | 491,683 | 8,739 | 1,391,672 | | | 2021 | 275,000 | 27,500 | — | 648,813 | 8,561 | 959,874 | | Paul Maple (4) | 2023 | 267,500 | 13,750 | — | 1,110,265 | 23,746 | 1,415,261 | | General Counsel & Secretary | | | | | | | | | Paul Christians (4) | 2023 | 350,000 | 17,500 | 111,400 | 1,115,196 | 4,704 | 1,598,800 | | Chief Operating Officer | | | | | | | |

  17. Summary Compensation Table

    __________________________

  18. Summary Compensation Table

    | (1) Represents discretionary cash bonus awards paid to our named executive officers as approved by the Compensation Committee for the applicable fiscal year. For more information regarding such cash bonuses paid to our named executive officers in respect of the fiscal year ended September 30, 2023, please refer to “Executive Compensation—Compensation Discussion and Analysis— Executive Compensation for 2023—Annual Discretionary Cash Bonuses.” | | (2) Amounts reflect the aggregate grant date fair value of the time-vesting restricted stock units (“RSUs”) and performance-vesting restricted stock units (“PSUs”) with a grant date during the fiscal years ended September 30, 2023 and September 30, 2022, as applicable, computed in accordance with ASC Topic 718. Such RSUs are subject to service vesting requirements and such PSUs are subject to performance and service-vesting requirements, and the amounts included above assume that the performance conditions will be satisfied during the performance period. See Note 14 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. The stock awards column for Mr. Christians for the fiscal year ended September 30, 2023, includes the grant date fair value of the 5,000 time-based vesting RSUs awarded to Mr. Christians, but not the grant date value of the 25,000 PSUs granted to Mr. Christians, as described above under “Executive Compensation – Compensation Discussion and Analysis – Executive Compensation for 2023 – Equity Compensation.” These PSUs are not reflected in such column for the fiscal year ended September 30, 2023, due to the fact that the grant date for such award under ASC Topic 718 was during the fiscal year ended September 30, 2022 (not the fiscal year ended September 30, 2023), taking into account the fact that such PSUs were granted as a replacement award for 25,000 PSUs previously granted to Mr. Christians during the fiscal year ended September 30, 2022 that were cancelled in connection with such new grant, as noted above in the Compensation Discussion and Analysis. | | (3) Amounts reflect the grant-date Black-Scholes value of the stock options with a grant date during the fiscal years ended September 30, 2023, September 30, 2022, and September 30, 2021, as applicable, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. For a discussion of the assumptions used to calculate the value of all option awards made to our named executive officers, see Note 14 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. | | (4) Compensation information for Messrs. Maple and Christians is not provided for 2022 and 2021 because they were not named executive officers during those years. | | (5) All Other Compensation for the fiscal year ended September 30, 2023 consists of the following: |

  19. Summary Compensation Table

    | Name | Health Insurance Premiums ($) | HSA and 401(k) Plan Employer Matching Contributions ($) | | Gregory Daily | $— | $8,400.99 | | Clay Whitson | $10,031.16 | $10,924.38 | | Rick Stanford | $8,007.93 | $9,112.50 | | Paul Maple | $9,953.75 | $13,792.41 | | Paul Christians | $— | $4,703.94 |

  20. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table summarizes the number of outstanding equity awards held by each of our named executive officers as of September 30, 2023.

  21. Outstanding Equity Awards at Fiscal Year End

    | Name | Grant Date | Option Awards | | | | Stock Awards | | | | | | | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares or Units That Have not Vested (#) | Equity Incentive Plan Awards: Market Value of Unearned Shares or Units That Have Not Vested ($) | | Gregory Daily | — | — | — | — | — | — | — | — | — | | Clay Whitson | 6/20/2018 | 76,924(1) | — | $13.00 | 6/20/2028 | — | — | — | — | | | 2/19/2019 | 50,000(1) | — | $21.65 | 2/19/2029 | — | — | — | — | | | 2/13/2020 | 32,000(1) | — | $32.25 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 23,333(2) | 11,667(2) | $34.20 | 2/11/2031 | — | — | — | — | | | 2/11/2022 | 11,667(3) | 23,333(3) | $26.53 | 2/11/2032 | — | — | — | — | | | 9/2/2022 | — | — | — | — | — | — | 25,000(4) | $528,500(4) | | | 2/13/2023 | — | 101,076(5) | $26.31 | 2/13/2033 | — | — | — | — | | Rick Stanford | 6/20/2018 | 100,000(1) | — | $13.00 | 6/20/2028 | — | — | — | — | | | 2/19/2019 | 50,000(1) | — | $21.65 | 2/19/2029 | — | — | — | — | | | 2/13/2020 | 32,000(1) | — | $32.25 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 23,333(2) | 11,667(2) | $34.20 | 2/11/2031 | — | — | — | — | | | 2/11/2022 | 11,667(3) | 23,333(3) | $26.53 | 2/11/2032 | — | — | — | — | | | 9/2/2022 | — | — | — | — | — | — | 25,000(4) | $528,500(4) | | | 2/13/2023 | — | 103,000(5) | $26.31 | 2/13/2033 | — | — | — | — | | Paul Maple | 6/20/2018 | 100,000(1) | — | $13.00 | 6/20/2028 | — | — | — | — | | | 2/19/2019 | 33,333(1) | — | $21.65 | 2/19/2029 | — | — | — | — | | | 2/13/2020 | 32,000(1) | — | $32.25 | 2/13/2030 | — | — | — | — | | | 2/11/2021 | 23,333(2) | 11,667(2) | $34.20 | 2/11/2031 | — | — | — | — | | | 9/24/2021 | 13,334(6) | 6,666(6) | $25.22 | 9/24/2031 | — | — | — | — | | | 2/11/2022 | 11,667(3) | 23,333(3) | $26.53 | 2/11/2032 | — | — | — | — | | | 9/2/2022 | — | — | — | — | — | — | 25,000(4) | $528,500(4) | | | 2/13/2023 | — | 74,667(5) | $26.31 | 2/13/2033 | — | — | — | — | | Paul Christians | 5/31/2019 | 200,000(1) | — | $25.57 | 5/31/2029 | — | — | — | — | | | 2/13/2020 | 20,000(1) | — | $32.25 | 2/13/2030 | — | — | — | — | | | 2/11/2022 | 8,334(3) | 16,666(3) | $26.53 | 2/11/2032 | — | — | — | — | | | 9/2/2022 | — | — | — | — | — | — | 25,000(4) | $528,500(4) | | | 11/16/2022 | — | — | — | — | 5,000(7) | $105,700(7) | — | — | | | 2/13/2023 | — | 75,000(5) | $26.31 | 2/13/2033 | — | — | — | — |

  22. Outstanding Equity Awards at Fiscal Year End

    | (1) Amount reflects options to purchase Class A common stock in the Company granted pursuant to the 2018 Plan. | | (2) Amount reflects options to purchase Class A common stock in the Company granted pursuant to the 2018 Plan. The options vest ratably in three equal annual installments beginning on February 11, 2022, subject to the executive officer’s continued service with the Company. | | (3) Amount reflects options to purchase Class A common stock in the Company granted pursuant to the 2018 Plan. The options vest ratably in three equal annual installments beginning on February 11, 2023, subject to the executive officer’s continued service with the Company. | | (4) Amount reflects PSU awards which vest in equal installments over a five-year period, beginning on November 1, 2023, provided the executive officer is employed by the Company on the applicable vesting date and certain year-over-year pro forma adjusted diluted earnings per share growth performance conditions are met. Includes the portion of the PSU awards that did not vest in respect of the fiscal year 2023 performance period because such PSUs remain eligible to vest if the performance conditions are satisfied in subsequent performance periods. See “Executive Compensation—Compensation Discussion and Analysis— Executive Compensation for 2023—2023 Fiscal Year Performance With Respect to Vesting of Previously Granted PSUs.” The market value is based upon the closing share price of our Class A common stock as of September 30, 2023 of $21.14. | | (5) Amount reflects options to purchase Class A common stock in the Company granted pursuant to the 2018 Plan. The options vest ratably in four equal annual installments beginning on February 13, 2024, subject to the executive officer’s continued service with the Company. | | (6) Amount reflects options to purchase Class A common stock in the Company granted pursuant to the 2018 Plan. The options vest ratably in three equal annual installments beginning on September 24, 2022, subject to the executive officer’s continued service with the Company. | | (7) Amount reflects RSU awards which vest in equal installments over a four-year period, beginning on November 16, 2023, provided the executive officer is employed by the Company on the applicable vesting date. The market value is based upon the closing share price of our Class A common stock as of September 30, 2023 of $21.14. |

  23. Option Exercises and Stock Vested

    Option Exercises and Stock Vested During the fiscal year ended September 30, 2023, none of the named executive officers exercised any options and none of the stock awards held by any named executive officers vested.

  24. Potential Payments upon Termination or Change-in-Control

    Potential Payments upon Termination or Change-in-Control Gregory Daily, Chief Executive Officer Mr. Daily would not be entitled to any payments upon any termination of employment or a change in control of the Company if his employment had terminated on September 30, 2023. Clay Whitson, Chief Financial Officer The following table shows the potential payments upon termination or a change in control of the Company for Mr. Whitson if his employment had terminated on September 30, 2023.

  25. Potential Payments upon Termination or Change-in-Control

    | | Involuntary Without Cause of Voluntary For Good Reason | Involuntary For Cause on 9/30/2023 | Voluntary Without Good Reason on 9/30/2023 | | Cash Severance | $393,750(1) | $— | $— | | Group Medical Benefits | 10,031(2) | — | — | | Accelerated Vesting of Stock Options | — | — | — | | Accelerated Vesting of Performance Stock Units | — | — | — | | Total | $403,781 | $— | $— | | | Change in Control on 9/30/23 | Termination on 9/30/23 following a Change in Control | Death or Disability on 9/30/23 | | Cash Severance | $— | $393,750(5) | $131,250(6) | | Group Medical Benefits | — | 10,031(2) | — | | Accelerated Vesting of Stock Options | —(3) | —(3) | —(7) | | Accelerated Vesting of Performance Stock Units | 528,500(4) | 528,500(4) | — | | Total | $528,500 | $932,281 | $131,250 |

  26. Potential Payments upon Termination or Change-in-Control

    | (1) Payable pursuant to Mr. Whitson’s employment agreement. Represents 12 months of Mr. Whitson’s base salary, plus Mr. Whitson’s contractual bonus eligibility of 50% of base salary to be paid in a lump sum following Mr. Whitson’s termination. | | (2) Payable pursuant to Mr. Whitson’s employment agreement. Represents 12 months of the Company’s portion of premiums for group medical benefits | | (3) In the event of a change of control, any unvested options held by Mr. Whitson would vest upon the occurrence of the change of control and will be canceled in exchange for a payment in cash, stock or other property having a fair market value equal to the fair market value of the consideration to be paid in the change of control, reduced by the applicable exercise price of the option. Assuming a stock price per share of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. | | (4) In the event Mr. Whitson’s employment is terminated for good reason or without cause within one year of a change of control, or if the acquiring entity in such change of control does not assume the PSUs, any unvested PSUs would immediately vest. The table above assumes that such awards are not assumed by the acquiring corporation or other successor to the Company in a change in control. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. | | (5) Payable pursuant to Mr. Whitson’s employment agreement. This amount would be payable if Mr. Whitson’s employment is terminated for any reason within six months following a change of control. Represents 12 months of Mr. Whitson’s base salary, plus Mr. Whitson’s contractual bonus eligibility of 50% of base salary to be paid in a lump sum within 10 days following Mr. Whitson’s termination. | | (6) Payable pursuant to Mr. Whitson’s employment agreement. Represents 50% of Mr. Whitson’s annual base salary to be paid in a lump sum following Mr. Whitson’s death or disability, as applicable. | | (7) In the event of Mr. Whitson’s death or disability, any unvested options would immediately vest, and any vested options will remain exercisable for one year following Mr. Whitson’s death or disability. Assuming a stock price of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above |

  27. Potential Payments upon Termination or Change-in-Control

    Rick Stanford, President Mr. Stanford is not party to any agreements with the Company that would entitle him to cash payments upon termination or a change in control of the Company. The following table shows the potential payments in respect of equity awards held by Mr. Stanford upon termination or a change in control of the Company for Mr. Stanford if his employment had terminated on September 30, 2023.

  28. Potential Payments upon Termination or Change-in-Control

    | | Involuntary Without Cause of Voluntary For Good Reason | Involuntary For Cause on 9/30/2023 | Voluntary Without Good Reason on 9/30/2023 | | Accelerated Vesting of Stock Options | — | — | — | | Accelerated Vesting of Performance Stock Units | — | — | — | | Total | $— | $— | $— | | | Change in Control on 9/30/23 | Involuntary Without Cause of Voluntary For Good Reason on 9/30/23 On or Within 12 Months following a Change in Control | Death or Disability on 9/30/23 | | Accelerated Vesting of Stock Options | —(1) | —(1) | —(3) | | Accelerated Vesting of Performance Stock Units | 528,500(2) | 528,500(2) | — | | Total | $528,500 | $528,500 | $— |

  29. Potential Payments upon Termination or Change-in-Control

    | (1) In the event of a change of control, any unvested options held by Mr. Stanford would vest upon the occurrence of the change of control and will be canceled in exchange for a payment in cash, stock or other property having a fair market value equal to the fair market value of the consideration to be paid in the change of control, reduced by the applicable exercise price of the option. Assuming a stock price per share of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. | | (2) In the event Mr. Stanford’s employment is terminated for good reason or without cause within one year of a change of control, or if the acquiring entity in such change of control does not assume the PSUs, any unvested PSUs would immediately vest. The table above assumes that such awards are not assumed by the acquiring corporation or other successor to the Company in a change in control. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. | | (3) In the event of Mr. Stanford’s death or disability, any unvested options would immediately vest, and any vested options will remain exercisable for one year following Mr. Stanford’s death or disability. Assuming a stock price of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. |

  30. Potential Payments upon Termination or Change-in-Control

    Paul Maple, General Counsel and Secretary The following table shows the potential payments upon termination or a change in control of the Company for Mr. Maple if his employment had terminated on September 30, 2023.

  31. Potential Payments upon Termination or Change-in-Control

    | | Involuntary Without Cause of Voluntary For Good Reason | Involuntary For Cause on 9/30/2023 | Voluntary Without Good Reason on 9/30/2023 | | Cash Severance | $— | $— | $— | | Group Medical Benefits | — | — | — | | Accelerated Vesting of Stock Options | — | — | — | | Accelerated Vesting of Performance Stock Units | — | — | — | | Total | $— | $— | $— | | | Change in Control on 9/30/23 | Involuntary Without Cause of Voluntary For Good Reason on 9/30/23 On or Within 12 Months following a Change in Control | Death or Disability on 9/30/23 | | Cash Severance | $— | $302,500(3) | $— | | Group Medical Benefits | — | 9,954(4) | — | | Accelerated Vesting of Stock Options | —(1) | —(1) | —(5) | | Accelerated Vesting of Performance Stock Units | 528,500(2) | 528,500(2) | — | | Total | $528,500 | $840,954 | $— |

  32. Potential Payments upon Termination or Change-in-Control

    | (1) In the event of a change of control, any unvested options held by Mr. Maple would vest upon the occurrence of the change of control and will be canceled in exchange for a payment in cash, stock or other property having a fair market value equal to the fair market value of the consideration to be paid in the change of control, reduced by the applicable exercise price of the option. Assuming a stock price per share of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. | | (2) In the event Mr. Maple’s employment is terminated for good reason or without cause within one year of a change of control, or if the acquiring entity in such change of control does not assume the PSUs, any unvested PSUs would immediately vest. The table above assumes that such awards are not assumed by the acquiring corporation or other successor to the Company in a change in control. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. | | (3) Payable pursuant to Mr. Maple’s Change in Control Agreement. Represents 12 months of Mr. Maple’s base salary, plus Mr. Maple’s annual bonus target of 10% of base salary to be paid in a lump sum within 10 days following Mr. Maple’s termination. | | (4) Payable pursuant to Mr. Maple’s Change in Control Agreement. Represents 12 months of the Company’s portion of premiums for group medical benefits. | | (5) In the event of Mr. Maple’s death or disability, any unvested options would immediately vest, and any vested options will remain exercisable for one year following Mr. Maple’s death or disability. Assuming a stock price of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. |

  33. Potential Payments upon Termination or Change-in-Control

    Paul Christians, Chief Operating Officer Mr. Christians is not party to any agreements with the Company that would entitle him to cash payments upon termination or a change in control of the Company. The following table shows the potential payments in respect of equity awards held by Mr. Christians upon termination or a change in control of the Company if his employment had terminated on September 30, 2023.

  34. Potential Payments upon Termination or Change-in-Control

    | | Involuntary Without Cause of Voluntary For Good Reason | Involuntary For Cause on 9/30/2023 | Voluntary Without Good Reason on 9/30/2023 | | Accelerated Vesting of Stock Options | — | — | — | | Accelerated Vesting of Restricted Stock Units | — | — | — | | Accelerated Vesting of Performance Stock Units | — | — | — | | Total | $— | $— | $— | | | Change in Control on 9/30/23 | Involuntary Without Cause of Voluntary For Good Reason on 9/30/23 On or Within 12 Months following a Change in Control | Death or Disability on 9/30/23 | | Accelerated Vesting of Stock Options | —(1) | —(1) | —(4) | | Accelerated Vesting of Restricted Stock Units | 105,700(2) | 105,700(2) | 105,700(5) | | Accelerated Vesting of Performance Stock Units | 528,500(3) | 528,500(3) | — | | Total | $634,200 | $634,200 | $105,700 |

  35. Potential Payments upon Termination or Change-in-Control

    | (1) In the event of a change of control, any unvested options held by Mr. Christians would vest upon the occurrence of the change of control and will be canceled in exchange for a payment in cash, stock or other property having a fair market value equal to the fair market value of the consideration to be paid in the change of control, reduced by the applicable exercise price of the option. Assuming a stock price per share of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. | | (2) In the event Mr. Christians’ employment is terminated for good reason or without cause within one year of a change of control, or if the acquiring entity in such change of control does not assume the RSUs, any unvested RSUs would immediately vest. The table above assumes that such awards are not assumed by the acquiring corporation or other successor to the Company in a change in control. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. | | (3) In the event Mr. Christians’ employment is terminated for good reason or without cause within one year of a change of control, or if the acquiring entity in such change of control does not assume the PSUs, any unvested PSUs would immediately vest. The table above assumes that such awards are not assumed by the acquiring corporation or other successor to the Company in a change in control. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. | | (4) In the event of Mr. Christians’ death or disability, any unvested options would immediately vest, and any vested options will remain exercisable for one year following Mr. Christians’ death or disability. Assuming a stock price of $21.14 (the closing stock price as of September 30, 2023), all such accelerated options would have an exercise price higher than such closing stock price, and therefore would be underwater and as such are not reflected in the chart above. | | (5) In the event of Mr. Christians’ death or disability, any unvested RSUs would immediately vest. The values in the table are based upon the closing price of the Common Stock on September 30, 2023 of $21.14 per share. |

  36. Pay Versus Performance

    Pay Versus Performance

  37. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    Required Tabular Disclosure of Compensation Actually Paid versus Performance The following table discloses information with respect to "compensation actually paid" or "CAP" (as determined pursuant to SEC rules) to our principal executive officer (“PEO”) and (on average) to our other named executive officers (“non-PEO Named Executive Officers”) for the three fiscal years ended September 30, 2023 alongside total shareholder return (“TSR”) and net income, as well as the Company-selected measure of Adjusted EBITDA. The Company selected this measure as the most important measure used to link compensation actually paid to our named executive officers to Company performance for the year ended September 30, 2023.

  38. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    | Year (a) | Summary Compensation Table total for PEO (b) (1) | Compensation Actually Paid to PEO (c) (1)(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers (d) (1) | Average Compensation Actually Paid to Non-PEO Named Executive Officers (e) (1)(2) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) (h) (4) $ in 000’s | Adjusted EBITDA (5) $ in 000’s | | | | | | | Total Shareholder Return (f) (3) | Peer Group Total Shareholder Return (g) (3) | | | | Fiscal 2023 | 345,589 | 345,589 | 1,670,727 | 1,427,555 | $91.99 | $219.78 | (2,652) | 100,363 | | Fiscal 2022 | 334,114 | 334,114 | 1,371,414 | 1,156,664 | $87.16 | $157.32 | (23,217) | 79,544 | | Fiscal 2021 | 308,338 | 308,338 | 937,661 | 886,430 | $105.35 | $198.46 | (7,839) | 55,407 |

  39. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    (1)Greg Daily served as PEO for each of the years on the table. The non-PEO Named Executive Officers included in columns (d) and (e) are as follows:

  40. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    | Fiscal 2021 | Fiscal 2022 | Fiscal 2023 | | Clay Whitson | Clay Whitson | Clay Whitson | | Rick Stanford | Rick Stanford | Rick Stanford | | | | Paul Maple | | | | Paul Christians |

  41. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    (2)Below is an explanation of the amounts deducted and added from Summary Compensation table total compensation amounts to determine “compensation actually paid” in accordance with Item 402(v)(2) of Regulation S-K:

  42. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    | | PEO | | | Non-PEO Named Executive Officers (averages) | | | | | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | Fiscal 2023 | Fiscal 2022 | Fiscal 2021 | | Summary Compensation table total | $345,589 | $334,114 | $308,338 | $1,670,727 | $1,371,414 | $937,661 | | Less grant date fair value of stock awards | — | — | — | (1,342,033) | (1,052,933) | (648,813) | | Add year-end fair value of awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year | — | — | — | 884,993 | 814,868 | 332,667 | | Add change in fair value as of vesting date compared to prior year-end fair value for vested and outstanding awards granted in prior fiscal years | — | — | — | 146,350 | 70,421 | 308,381 | | Add change in fair value as of fiscal year-end compared to prior year-end fair value for unvested and outstanding awards granted in prior fiscal years | — | — | — | 67,518 | (47,106) | (43,466) | | Less amount equal to the fair value at end of the prior fiscal year for any awards granted in any prior fiscal year that fail to meet applicable vesting conditions | — | — | — | — | — | — | | Add dividends paid on unvested equity awards during fiscal year | — | — | — | — | — | — | | Compensation Actually Paid | $345,589 | $334,114 | $308,338 | $1,427,555 | $1,156,664 | $886,430 |

  43. Required Tabular Disclosure of Compensation Actually Paid versus Performance

    (3)Column (g) represents the cumulative total shareholder return (“TSR”) of the S&P Information Technology index over the applicable measurement period, as calculated in the manner prescribed by Item 201(e) of Regulation S-K. (4)Reflects Net Loss as set forth in the consolidated financial statements of the Company for the fiscal years ended September 30, 2023, 2022, and 2021, respectively, included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed on November 22, 2023. (5)Adjusted EBITDA is the company-selected financial performance measure that, in our assessment, represents the most important performance measure used to link compensation actually paid to our named executive officers to company performance for the year ended September 30, 2023. See Appendix A for additional information regarding Adjusted EBITDA, including the manner in which Adjusted EBITDA is calculated and a reconciliation of Adjusted EBITDA for the fiscal year ended September 30, 2023, to the most comparable GAAP measure.

  44. Description of the relationships between executive compensation actually paid and metrics on the Pay Versus Performance table

    Description of the relationships between executive compensation actually paid and metrics on the Pay Versus Performance table The following graphs illustrate the relationship between the pay and performance figures that are included in the pay versus performance tabular disclosure above. In addition, the first graph below further illustrates the relationship between Company TSR and cumulative TSR of the S&P Information Technology index. As noted above, “compensation actually paid” for purposes of the tabular disclosure and the following graphs were calculated in accordance with SEC rules, and may not fully represent the actual final amount of compensation earned by or actually paid to our named executive officers during the applicable years.

  45. Tabular list of most important financial performance measures used to link compensation actually paid to company performance

    Tabular list of most important financial performance measures used to link compensation actually paid to company performance Listed below, in no specific order, are the performance measures, including the Company-Selected Measure, which, in our assessment, represent the most important measures we used to link compensation actually paid to our named executive officers for the year ended September 30, 2023, to the Company’s performance. ▪Adjusted EBITDA ▪Annualized Recurring Revenue ▪Stock price performance ▪Pro forma Adjusted Diluted Earnings Per Share See the Compensation Discussion and Analysis for more information regarding how we utilized these performance measures in connection with determining compensation paid to our named executive officers during the fiscal year ended September 30, 2023. In addition, Adjusted EBITDA and Pro Forma Adjusted Diluted Earnings per Share are non-GAAP financial measures. See Appendix A for additional information regarding Adjusted EBITDA and Pro Forma Adjusted Diluted Earnings per Share, including the manner in which such non-GAAP financial measures are calculated and a reconciliation of such non-GAAP financial measures to the most comparable GAAP measures for the fiscal year ended September 30, 2023.

  46. CEO Pay Ratio

    CEO Pay Ratio CEO-to-median-employee pay ratio is calculated in accordance with Item 402(u) of the SEC’s Regulation S-K. We identified the median employee by examining the annual total compensation for all our employees who were employed by us on September 30, 2023, excluding our Chief Executive Officer. We included all employees, whether employed on a full-time, part-time, seasonal or temporary basis. To determine the median employee, we calculated the total annual compensation payable in respect of the fiscal year ended September 30, 2023, for each of our 1,669 employees employed by us as of September 30, 2023, as the sum of the following amounts: ▪Annual base salary (including commissions, if applicable) ▪Matching contributions made by i3 Verticals to the employee’s HSA and 401(k) Plan ▪Fiscal year health insurance premiums ▪Fiscal year cash bonus ▪Fiscal year share-based awards (including, incentive and/or non-qualified stock options and restricted stock units) We calculated annual total compensation for the median employee using the same methodology as we used to identify the median employee as set forth above, which was also the same methodology we use for our named executive officers as set forth in the 2023 Summary Compensation Table included in this Proxy Statement. The total annual compensation calculated was $345,589 and $58,837 for our CEO and our median employee, respectively. The resulting ratio for our CEO’s pay compared with the pay of our median employee for 2023 is 5.87 to 1.