Members' Equity and Temporary Members' Equity |
3 Months Ended | ||
|---|---|---|---|
Mar. 31, 2025 | |||
| Equity [Abstract] | |||
| Members' Equity and Temporary Members' Equity |
The Company has issued equity in the form of two classes of common units to its members and has issued temporary equity in the form of Class B common units (collectively the “Units”). The Company retains the corporate authority to issue additional units in accordance with the Company’s LLC Operating Agreement. All unitholders are eligible to receive distributions and distributions have been proportionally allocated. Common Units Class A Units Within Class A units, the Company has 92,096 units issued and outstanding as of March 31, 2025 and December 31, 2024. Class A unitholders are entitled to one vote for each unit. The A unitholders were entitled to the return of their original capital contributions made plus interest at the rate of 12% per annum. The capital contributions plus interest were repaid in 2007, the same year of issuance. Class B Units Within Class B units, the Company has 27,900 units issued and outstanding as of March 31, 2025 and December 31, 2024. Class B unitholders are entitled to one vote for each unit. The Class B units were issued as compensation to the founder of the Company upon the Company’s formation in 2006 and vested immediately. The Class B units contained a right to convert into Class A units, which is exercisable upon termination of employment of the American Integrity Insurance Group, LLC and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) (Dollar amounts in thousands, except unit and per unit data, unless otherwise stated) founder. The Class B units also include a puttable redemption feature, which provides compensation to the Class B unitholders upon death or disability if while employed, thus these are determined to be temporary members’ equity. Since the Class B units were issued upon the formation of the Company before the Company had any assets or substantive operations, it was determined that the Class B units had a grant date fair value of $0 upon issuance. Accordingly, no amounts have been recognized in the Company’s financial statements for the Class B units. As of March 31, 2025, the Company concluded that the Class B units are not probable to become redeemable. Class C Units Within Class C units, the Company has 2,904 units issued and outstanding as of March 31, 2025 and December 31, 2024. Class C unitholders are no t entitled to vote. The C units were issued to key employees at the Company upon the Company’s formation in 2006 in exchange for services and vested immediately with no conversion options. Since the Class C units were issued upon the formation of the Company before the Company had any assets or substantive operations, it was determined that the Class C units had a grant date fair value of $0 upon issuance. Accordingly, no amounts have been recognized in the Company’s financial statements for the Class C Units. The Company has analyzed these awards under both ASC 718 and ASC 480 and concluded that the Class A and Class C awards should be classified as equity. There were no changes in the number of Class A, Class B or Class C units issued and outstanding as of March 31, 2025 or the year ended December 31, 2024. Refer to Note 18 – “ Subsequent Events ntri bution of these units subsequent to quarter end and in connection with the IPO. Distributions AIIG is a legal entity separate and distinct from its subsidiaries. As a holding company, the primary sources of cash needed to meet its obligations are distributions, dividends, and other permitted payments from its subsidiaries and consolidated VIEs. While there are no restrictions on distributions from AIMGA, AICS, PA, and PIC, dividends from AIICFL and Catstyle are restricted. See Note 9 – “ Regulatory Requirements and Restrictions Variable Interest Entity Taxable income is allocated to the members in accordance with the United States Internal Revenue Code and the Company’s LLC Operating Agreement. Distributions to members totaling Additionally, according to the Company’s LLC Operating Agreement, the Company’s Board of Directors may, at their discretion, declare distributions to the members in the form of: (1) a return of capital contribution plus interest for Class A unit holders and (2) distributions to holders of the Units proportionally in accordance with their respective percentage ownership interests. The Company made $10.0 million and $4.0 million of discretionary distributions to members during the three months ended March 31, 2025 and 2024, respectively.
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