VRTS 8-K/A
Virtus Investment Partners, Inc. (VRTS)
8-K/A
2026-05-14
For: 2026-03-01
View Original
Added on
May 15, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
(Amendment No.1)
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
(800 ) 248-7971
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(including Preferred Share Purchase Rights) | ||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Explanatory Note.
This Amendment No. 1 to Form 8-K amends and supplements the Current Report on Form 8-K filed with the Securities and Exchange Commission by Virtus Investment Partners, Inc. (the “Company”), a Delaware corporation, on March 2, 2026, (the “Original Report”), to include the financial statements referred to in Item 9.01(a) and the pro forma financial information referred to in Item 9.01(b) relating to the Company’s acquisition of Keystone National Group, LLC (“Keystone”), a Delaware limited liability company.
As reported in the Original Report, on March 1, 2026, pursuant to the Equity Purchase Agreement, dated as of December 5, 2025, by and among the Company through its wholly owned subsidiary Virtus Private Markets Holdings, LLC, Keystone, and Keystone’s owners and beneficial owners, the Company completed the acquisition of 56% of the equity of Keystone.
Pursuant to the requirements of Item 9.01 of Form 8-K, the Company hereby amends Item 9.01 of the Original Report to include the historical financial information of Keystone and pro forma financial information. Except as otherwise provided herein, the disclosures made in the Original Report remain unchanged.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired
The audited financial statements of Keystone for the fiscal year ended December 31, 2025, including the related notes thereto, are filed herein as Exhibit 99.1 to this Current Report on Form 8-K/A.
(b) Pro Forma Financial Information
The unaudited pro forma condensed combined financial statements of the Company, giving effect to the acquisition of Keystone, as of and for the three months ended March 31, 2026, and for the fiscal year ended December 31, 2025, including the related notes thereto, are filed herein as Exhibit 99.2 to this Current Report on Form 8-K/A.
(d) Exhibits The following exhibits are filed herewith:
23.1 Consent of Richey, May & Co, LLP, independent registered public accounting firm for Keystone National Group, LLC.
99.1 Audited financial statements of Keystone as of and for the fiscal year ended December 31, 2025, including the related notes thereto.
99.2 Unaudited pro forma condensed combined balance sheet of the Company as of December 31, 2025, and the unaudited pro forma condensed combined statements of operations for the Company as of and for the three months ended March 31, 2026, and for the fiscal year ended December 31, 2025, including the related notes thereto.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| VIRTUS INVESTMENT PARTNERS, INC. | |||||||||||||||||
| Dated: May 14, 2026 | By: | /s/ Michael A. Angerthal | |||||||||||||||
| Name: | Michael A. Angerthal | ||||||||||||||||
| Title: | Executive Vice President and Chief Financial Officer | ||||||||||||||||
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-272180) and Form S-8 (No. 333-280053) of Virtus Investment Partners, Inc. of our report dated March 24, 2026, relating to the financial statements of Keystone National Group, LLC, which appears as an exhibit in this Form 8-K/A. Salt Lake City, Utah May 14, 2026
Keystone National Group, LLC A Delaware Limited Liability Corporation Financial Statements as of and for the Year Ended December 31, 2025, and Independent Auditors’ Report Exhibit 99.1 Contents Page Independent Auditors' Report .................................................................................................... 3 Financial Statements Statement of Assets and Liabilities ................................................................................................ 5 Statement of Operations ............................................................................................................... 6 Statement of Changes in Members' capital .................................................................................... 7 Statement of Cash Flows .............................................................................................................. 8 Notes to Financial Statements ....................................................................................................... 9 INDEPENDENT AUDITORS’ REPORT To the Members Keystone National Group, LLC Salt Lake City, Utah Opinion We have audited the accompanying financial statements of Keystone National Group, LLC (a Delaware limited liability company), which comprise the statement of assets and liabilities as of December 31, 2025, and the related statements of operations, changes in members’ capital, and cash flows for the year then ended, and the related notes to the financial statements. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Keystone National Group, LLC as of December 31, 2025, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of Keystone National Group, LLC and to meet our other ethical responsibilities in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about Keystone National Group, LLC’s ability to continue as a going concern within one year after the date that the financial statements are available to be issued. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with generally accepted auditing standards, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Keystone National Group, LLC’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about Keystone National Group, LLC’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. Salt Lake City, Utah March 24, 2026
KEYSTONE NATIONAL GROUP, LLC STATEMENT OF ASSETS AND LIABILITIES FOR THE YEAR ENDED DECEMBER 31, 2025 The accompanying notes are an integral part of the financial statements. 5 Assets: Cash 500,661$ Accounts receivable 4,676,894 Employee notes receivable 2,350,000 Operating lease right-of-use assets 2,241,000 Other assets 87,308 9,855,863$ Liabilities and Members' capital: Liabilities Accounts payable and accrued liabilities 583,917$ Operating lease liabilities 2,256,672 Total liabilities 2,840,589 Members' capital 7,015,274 9,855,863$ Total liabilities and members' capital Total assets KEYSTONE NATIONAL GROUP, LLC STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2025 The accompanying notes are an integral part of the financial statements. 6 Revenues: Management fees 60,915,201$ Expenses: Payroll expense 15,486,509 Commission expense 626,997 Consulting expense 58,000 Rent and improvements 1,139,453 Professional fees 496,689 Computer and internet expense 239,602 Telephone expense 61,326 Travel 171,680 Other expenses 402,577 Total expenses 18,682,833 Net operating income 42,232,368 Other income (expense): Other income 570,762 State tax payments (1,900,000) Net income 40,903,130$ KEYSTONE NATIONAL GROUP, LLC STATEMENT OF CHANGES IN MEMBERS’ CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2025 The accompanying notes are an integral part of the financial statements. 7 6,623,759$ Net income 40,903,130 Member distributions (40,511,615) 7,015,274$ Members' capital - January 1, 2025 Members' capital - December 31, 2025 KEYSTONE NATIONAL GROUP, LLC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2025 The accompanying notes are an integral part of the financial statements. 8 Cash flows from operating activities: Net income 40,903,130$ Changes in operating assets and liabilities: Accounts receivable 151,908 Other assets (13,460) Accounts payable and accrued liabilities (101,772) Operating leases 15,672 Net cash flows provided by operating activities 40,955,478 Cash flows from financing activities: Capital distributions (40,511,615) Net cash used in financing activities (40,511,615) Net change in cash 443,863 Cash, beginning of year 56,798 Cash, end of year 500,661$
KEYSTONE NATIONAL GROUP, LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2025 9 Note 1 – Organization and Nature of Business Keystone National Group, LLC (the Company) is a Delaware limited liability company which commenced operations on July 14, 2006. The Company is registered with the United States Securities and Exchange Commission (“SEC”) as an investment adviser under the Investment Advisers Act of 1940, as amended, with CRD Number 142885 and SEC File Number is 801-67537. The purpose of the Company is to act as investment advisor to various pooled investment funds (collectively, the Funds), other investment vehicles and accounts related thereto and to perform the functions required of an investment advisor to the Funds or other accounts, to provide investment management and related services necessary for the operation of the Funds and other accounts and to do all things necessary or incidental thereto. The Company is governed by the terms, conditions, and other provisions set forth in that certain Fourth Amended and Restated Limited Liability Company Agreement (the Agreement), dated January 1, 2024. Capitalized terms used, but not otherwise defined herein, shall have the meanings ascribed to such terms in the Agreement. The existence of the Company shall continue unless and until the Company is dissolved, wound up and terminated in accordance with the Agreement. The Company’s principal place of business is in Salt Lake City, Utah. The Company operates as a pass-through entity for federal income tax purposes, and all income, gains, losses, deductions, and credits are allocated to members in accordance with the Agreement. Note 2 – Summary of Significant Accounting Policies Basis of Accounting These financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") as established by the Financial Accounting Standards Board ("FASB"). The financial statements include all accounts of the Company on a standalone basis, and do not consolidate any client funds, private funds advised by the Company, or related entities under common ownership. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Cash represents cash deposits held at federally insured financial institutions. Cash deposits are held at major financial institutions and are subject to credit risk to the extent they exceed federal deposit insurance limits. The Fund maintains its cash solely in accounts maintained by its cash custodian, Wells Fargo Bank, N.A. Accounts Receivable Accounts receivable consists primarily of management fees earned and billed to clients for investment advisory services rendered but not yet collected. KEYSTONE NATIONAL GROUP, LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2025 10 Leases The Company leases office space under a leasing arrangement. In accordance with ASC 842, Leases, the Company's lease is evaluated and classified as either a financing lease or operating lease, as appropriate. The Company recognizes a lease liability and corresponding right of use (ROU) asset on the commencement date of any lease arrangement. The lease liability is initially measured at the present value of the future lease payments over the lease term using the rate implicit in the arrangement or, if not readily determinable, the Company's incremental borrowing rate. The Company determines its incremental borrowing rate through market sources, including relevant industry rates. A ROU asset is measured initially as the value of the lease liability plus initial direct costs and prepaid lease payments, and less lease incentives received. Lease expense is recognized on a straight-line basis over the lease term and is recorded within operating expenses on the Company’s Statement of Operations. The Company does not have finance leases. Organizational Costs and Other Assets Organizational costs are stated net of accumulated amortization. Organizational costs are amortized over 15 years using the straight-line method. Other assets primarily include security deposits related to the office rental locations. Income Taxes The Company is treated as a partnership for U.S. federal and state income tax purposes. Accordingly, no federal or state income taxes are imposed at the entity level; instead, taxable income or loss is passed through to the members. Concentrations of Credit Risk The Company's financial instruments that may be exposed to concentrations of credit risk consist primarily of temporary cash investments and other receivables. Most of the receivables consist of management fees from related investment funds. Management has assessed the financial strength of these funds and does not anticipate any losses on these balances. The Company maintains its cash balance at a federally insured financial institution. At times such investments may exceed federally insured limits. The Company has not experienced any losses in such accounts. The Company believes it is not exposed to any significant credit risk on cash. Liability of Members The members are not personally liable for any obligations of the Company and have no obligation to make contributions to the Company in excess of their respective capital commitments as specified in the operating agreement. Note 3 – Employee Notes Receivable During 2022, the Company transferred $1,500,000 to certain key employees in the form of promissory notes for the purpose of investing in various related funds. An additional $850,000 and $250,000 were transferred during 2023 and 2024, respectively. The notes are secured by the employees' interest(s) in investment(s) made. The notes bear interest at the lowest short-term applicable federal rate of the Internal Revenue Service, compounded annually. Provided the employee remains employed by the Company for a period of three years, the notes and accrued interest will be forgiven in full. In 2024, one note for $250,000 was written off following the departure of an employee. KEYSTONE NATIONAL GROUP, LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2025 11 Note 4 – Revenue The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers, and where applicable, ASC Topic 946, Financial Services—Investment Companies. The Company provides various investment management services to the Funds and other accounts, including investigating, structuring and negotiating potential investments, monitoring the performance of the Funds or accounts' portfolio investments, and advising the Funds and other accounts as to disposition opportunities. In consideration for services rendered, the Company is entitled to annual management fees, generally payable either monthly or quarterly in advance on the first day of each calendar quarter, equal to a pre-determined, fixed amount as agreed to with each investor in each of the Funds. Management fees are generally paid out of the capital contributions to each of the Funds but may vary based upon written agreements with the Company. Following the expiration or termination of the investment period of each of the investors’ Funds, management fees are generally calculated based upon the net asset value of an investor's interest in each of the Funds. The Company may also be entitled to annual advisory fees payable by separately managed accounts, generally payable on a quarterly basis. Advisory fees are generally a minimum fixed flat rate but may be based upon assets under management or performance. The Company or any of the Funds or other clients may generally terminate an investment management or advisory agreement without penalty upon five (5) days written notice. Any fees that have been prepaid would then be refunded on a pro-rata basis based upon the number of calendar days remaining after the termination date in the period as to which fees may have been prepaid. The Company may also be reimbursed by any of the Funds or other account for organizational, legal, due diligence, travel, accounting and administration, operational and other expenses incurred in connection with the management and review of the investment portfolio of each of the Funds or accounts. The maximum aggregate amount of such expenses to be reimbursed may be limited as set forth in the limited partnership or other agreement of each of the Funds or accounts. Note 5 – Operating Leases The Company leases office space in Salt Lake City, Utah and Dallas, Texas, both under a non-cancelable operating lease agreements expiring in March 2029 and August 2027, respectively. The Company’s ROU asset and liability are presented on the Statement of Assets and Liabilities. The weighted average discount rate used to measure the Company’s lease liability was 4.13% at December 31, 2025. The Company elected to use the risk-free rate for the applicable lease terms as the discount rate. For the year ended December 31, 2025, lease expense totaled $776,658. Cash payments related to operating leases during 2025 were $852,253. KEYSTONE NATIONAL GROUP, LLC NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2025 12 Lease liability maturities as of December 31, 2025 were as follows: Note 6 – Related Party Transactions The Company receives a management fee from the Funds based upon the limited partnership agreement between the Company and each of the respective Funds. During 2025, the Company provided services to the Funds resulting in total management fee revenue of $60,915,201, which is 100% of the Company's total revenue. Note 7 – Subsequent Events Management of the Company has evaluated subsequent events through March 24, 2026, which is also the date the financial statements were available to be issued. No subsequent events were noted during this evaluation that require recognition or disclosure in these financial statements, except for the following: Effective March 1, 2026, the members sold a majority interest in the Company to Virtus Investment Partners, Inc. Effective March 1, 2026, employee promissory notes totaling $2,350,000 were forgiven as part of the acquisition by Virtus Investment Partners, Inc. (see Note 3). 2026 759,168$ 2027 759,462 2028 751,968 2029 189,370 Total lease payments 2,459,968 Less: Imputed interest 203,296 Present value of lease liabilities 2,256,672$
Exhibit 99.2
Pro Forma Condensed Combined Financial Statements
(unaudited)
On March 1, 2026, Virtus Investment Partners, Inc. (the "Company" or "Virtus"), through its wholly owned subsidiary, Virtus Private Markets Holdings, LLC, completed the acquisition of 56% of the equity of Keystone National Group, LLC ("Keystone"), an investment manager specializing in asset-centric private credit (the "Acquisition"). The Acquisition expands the Company's offerings into private markets with the addition of a differentiated asset-backed lending capability. The total purchase price was $308.2 million: $198.8 million cash paid at closing, and $109.4 million in contingent consideration recorded at fair value. The contingent consideration consists of $88.1 million in deferred cash consideration at fair value, which represents payments of $65.0 million and $30.0 million to be paid on the first and second anniversary of the Acquisition, and $21.3 million in contingent consideration at fair value, which represents a maximum of $75.0 million in potential earn-out payments based on pre-established performance metrics related to revenue retention and revenue growth rates.
The following Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 combine the historical consolidated statements of operations of the Company and Keystone for those periods, and give effect to the Acquisition as if it had been consummated on January 1, 2025, the beginning of the full-year period presented. The following Unaudited Pro Forma Condensed Combined Balance Sheet combines the consolidated balance sheets of Virtus and Keystone, give effect to the Acquisition as if it had been consummated on December 31, 2025. Virtus and Keystone have the same fiscal year ends and, as such, no adjustments are necessary to align the reporting periods.
The Unaudited Pro Forma Condensed Combined Financial Statements were prepared using the acquisition method of accounting in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations, with the Company considered as the accounting acquirer and Keystone as the accounting acquiree. Accordingly, consideration paid by the Company to complete the Acquisition has been allocated to identifiable assets and liabilities of Keystone based on their estimated fair values as of the closing date of the Acquisition.
Assumptions and estimates underlying the unaudited adjustments to the unaudited pro forma condensed combined financial information (the "pro forma adjustments") are described in the accompanying notes. The historical consolidated financial statements have been adjusted in the unaudited pro forma condensed combined financial information to give effect to pro forma events that are: (1) directly attributable to the Acquisition; (2) factually supportable; and (3) with respect to the Unaudited Pro Forma Condensed Combined Statement of Operations, expected to have a continuing impact on the combined results following the Acquisition. The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the operating results and financial position that would have been achieved had the Acquisition occurred on the date indicated. Further, the unaudited pro forma condensed combined financial information does not purport to project the future operating results or financial position of the combined company following the Acquisition.
These Unaudited Pro Forma Condensed Combined Financial Statements have been derived from, and should be read in conjunction with:
•The unaudited condensed consolidated financial statements of the Company as of and for the three-month period ended March 31, 2026, as contained in its Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission ("SEC") on May 8, 2026.
•The audited consolidated financial statements of the Company as of and for the year ended December 31, 2025, as contained in its Annual Report on Form 10-K filed with the SEC on February 27, 2026.
•The audited financial statements of Keystone for the year ended December 31, 2025, filed as exhibit 99.1 to this Current Report on Form 8-K.
The Unaudited Pro Forma Condensed Combined Financial Statements do not reflect the costs of any integration activities, including any benefits that may result from the realization of future cost savings from operating efficiencies or revenue synergies expected to result from the Acquisition.
Virtus Investment Partners, Inc.
Unaudited Pro Forma Condensed Combined Balance Sheet
As of December 31, 2025
| Historical | |||||||||||||||||||||||||||||
| ($ in thousands) | Virtus | Keystone | Acquisition Adjustments (1) | Notes | Pro Forma Combined | ||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 386,483 | $ | 501 | $ | (148,769) | (a) | $ | 238,215 | ||||||||||||||||||||
| Investments | 157,480 | — | — | 157,480 | |||||||||||||||||||||||||
| Accounts receivable, net | 102,733 | 4,677 | — | 107,410 | |||||||||||||||||||||||||
| Assets of consolidated investment products ("CIP") | — | ||||||||||||||||||||||||||||
| Cash and cash equivalents of CIP | 90,686 | — | — | 90,686 | |||||||||||||||||||||||||
| Cash pledged on deposit of CIP | 1,017 | — | — | 1,017 | |||||||||||||||||||||||||
| Investments of CIP | 2,633,352 | — | — | 2,633,352 | |||||||||||||||||||||||||
| Other assets of CIP | 40,620 | — | — | 40,620 | |||||||||||||||||||||||||
| Furniture, equipment and leasehold improvements, net | 21,891 | — | — | 21,891 | |||||||||||||||||||||||||
| Intangible assets, net | 327,409 | — | 307,000 | (b) | 634,409 | ||||||||||||||||||||||||
| Goodwill | 397,098 | — | 246,019 | (c) | 643,117 | ||||||||||||||||||||||||
| Deferred taxes, net | 18,578 | — | — | 18,578 | |||||||||||||||||||||||||
| Operating lease right-of-use assets | 75,166 | 2,241 | (84) | (d) | 77,323 | ||||||||||||||||||||||||
| Other assets | 38,687 | 2,437 | (1,900) | (e) | 39,224 | ||||||||||||||||||||||||
| Total assets | $ | 4,291,200 | $ | 9,856 | $ | 402,266 | $ | 4,703,322 | |||||||||||||||||||||
| Liabilities and Equity | |||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Accrued compensation and benefits | $ | 182,808 | $ | — | $ | — | $ | 182,808 | |||||||||||||||||||||
| Accounts payable and accrued liabilities | 54,520 | 584 | 7,813 | (f) | 62,917 | ||||||||||||||||||||||||
| Contingent consideration | 39,108 | — | 109,420 | (g) | 148,528 | ||||||||||||||||||||||||
| Debt | 389,957 | — | 50,000 | (h) | 439,957 | ||||||||||||||||||||||||
| Operating lease liabilities | 93,225 | 2,257 | (100) | (d) | 95,382 | ||||||||||||||||||||||||
| Investment manager noncontrolling interests liability | 14,937 | 137,584 | (i) | 152,521 | |||||||||||||||||||||||||
| Other liabilities | 20,821 | — | — | 20,821 | |||||||||||||||||||||||||
| Liabilities of CIP | |||||||||||||||||||||||||||||
| Notes payable of CIP | 2,359,828 | — | — | 2,359,828 | |||||||||||||||||||||||||
| Securities purchased payable and other liabilities of CIP | 98,217 | — | — | 98,217 | |||||||||||||||||||||||||
| Total liabilities | $ | 3,253,421 | 2,841 | 304,717 | 3,560,979 | ||||||||||||||||||||||||
| Commitments and Contingencies | |||||||||||||||||||||||||||||
| Redeemable noncontrolling interests | $ | 102,934 | — | 104,564 | (i) | 207,498 | |||||||||||||||||||||||
| Equity: | |||||||||||||||||||||||||||||
| Equity attributable to Virtus Investment Partners, Inc: | |||||||||||||||||||||||||||||
| Common stock | 123 | — | — | 123 | |||||||||||||||||||||||||
| Members' equity | 7,015 | (7,015) | (j) | — | |||||||||||||||||||||||||
| Additional paid-in capital | 1,342,153 | — | — | 1,342,153 | |||||||||||||||||||||||||
| Retained earnings (accumulated deficit) | 340,898 | — | — | 340,898 | |||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 462 | — | — | 462 | |||||||||||||||||||||||||
| Treasury stock | (749,593) | — | — | (749,593) | |||||||||||||||||||||||||
| Total equity attributable to stockholders | 934,043 | 7,015 | (7,015) | 934,043 | |||||||||||||||||||||||||
| Noncontrolling interests | 802 | — | — | 802 | |||||||||||||||||||||||||
| Total equity | 934,845 | 7,015 | (7,015) | 934,845 | |||||||||||||||||||||||||
| Total liabilities and equity | $ | 4,291,200 | $ | 9,856 | $ | 402,266 | $ | 4,703,322 | |||||||||||||||||||||
(1) See Note 5 to the Unaudited Pro Forma Condensed Combined Financial Statements
Virtus Investment Partners, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
Three Months Ended March 31, 2026
| Historical | |||||||||||||||||||||||||||||
| ($ in thousands, except per share data) | Virtus | Keystone | Acquisition Adjustments (1) | Notes | Pro-Forma Combined | ||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Investment management fees | $ | 169,133 | $ | 10,461 | $ | — | $ | 179,594 | |||||||||||||||||||||
| Administration and shareholder service fees | 17,311 | — | — | 17,311 | |||||||||||||||||||||||||
| Distribution and service fees | 11,633 | — | — | 11,633 | |||||||||||||||||||||||||
| Other income and fees | 1,458 | — | — | 1,458 | |||||||||||||||||||||||||
| Total revenues | 199,535 | 10,461 | — | 209,996 | |||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||||
| Employment expenses | 105,213 | 2,942 | 1,575 | (k) | 109,730 | ||||||||||||||||||||||||
| Distribution and other asset-based expenses | 20,534 | 128 | — | 20,662 | |||||||||||||||||||||||||
| Other operating expenses | 36,203 | 444 | — | 36,647 | |||||||||||||||||||||||||
| Other operating expenses of consolidated investment products ("CIP") | 2,015 | — | — | 2,015 | |||||||||||||||||||||||||
| Change in fair value of contingent consideration | 409 | — | 845 | (g) | 1,254 | ||||||||||||||||||||||||
| Restructuring expense | 2,871 | — | — | 2,871 | |||||||||||||||||||||||||
| Depreciation expense | 1,667 | — | — | 1,667 | |||||||||||||||||||||||||
| Amortization expense | 15,175 | — | 4,631 | (b) | 19,806 | ||||||||||||||||||||||||
| Total operating expenses | 184,087 | 3,514 | 7,051 | 194,652 | |||||||||||||||||||||||||
| Operating Income (Loss) | 15,448 | 6,947 | (7,051) | 15,344 | |||||||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||||
| Realized and unrealized gain (loss) on investments, net | 845 | — | — | 845 | |||||||||||||||||||||||||
| Realized and unrealized gain (loss) of CIP, net | (14,344) | — | — | (14,344) | |||||||||||||||||||||||||
| Other income (expense), net | 623 | — | (1,291) | (i) | (668) | ||||||||||||||||||||||||
| Total other income (expense), net | (12,876) | — | (1,291) | (14,167) | |||||||||||||||||||||||||
| Interest Income (Expense) | |||||||||||||||||||||||||||||
| Interest expense | (6,765) | — | (480) | (h) | (7,245) | ||||||||||||||||||||||||
| Interest and dividend income | 2,947 | 14 | (853) | (l) | 2,108 | ||||||||||||||||||||||||
| Interest and dividend income of investments of CIP | 48,631 | — | — | 48,631 | |||||||||||||||||||||||||
| Interest expense of CIP | (34,082) | — | — | (34,082) | |||||||||||||||||||||||||
| Total interest income (expense), net | 10,731 | 14 | (1,333) | 9,412 | |||||||||||||||||||||||||
| Income (Loss) Before Income Taxes | 13,303 | 6,961 | (9,675) | 10,589 | |||||||||||||||||||||||||
| Income tax expense (benefit) | 7,152 | — | (823) | (m) | 6,329 | ||||||||||||||||||||||||
| Net Income (Loss) | 6,151 | 6,961 | (8,852) | 4,260 | |||||||||||||||||||||||||
| Noncontrolling interests | 974 | — | (590) | (i) | 384 | ||||||||||||||||||||||||
| Net Income (Loss) Attributable to Virtus Investment Partners, Inc. | $ | 7,125 | $ | 6,961 | $ | (9,442) | $ | 4,644 | |||||||||||||||||||||
| Earnings (Loss) per Share-Basic | $ | 1.07 | $ | 0.69 | |||||||||||||||||||||||||
| Earnings (Loss) per Share-Diluted | $ | 1.05 | $ | 0.68 | |||||||||||||||||||||||||
| Weighted Average Shares Outstanding-Basic | 6,690 | 6,690 | |||||||||||||||||||||||||||
| Weighted Average Shares Outstanding-Diluted | 6,806 | 6,806 | |||||||||||||||||||||||||||
(1) See Note 5 to the Unaudited Pro Forma Condensed Combined Financial Statements
Virtus Investment Partners, Inc.
Unaudited Pro Forma Condensed Combined Statement of Operations
Year Ended December 31, 2025
| Historical | |||||||||||||||||||||||||||||||||||||||||
| ($ in thousands, except per share data) | Virtus | Keystone | Reclassifications (1) | Notes | Acquisition Adjustments (2) | Notes | Pro-Forma Combined | ||||||||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||||||||||||||
| Investment management fees | $ | 725,039 | $ | 60,915 | $ | — | $ | — | $ | 785,954 | |||||||||||||||||||||||||||||||
| Administration and shareholder service fees | 73,275 | — | — | — | 73,275 | ||||||||||||||||||||||||||||||||||||
| Distribution and service fees | 49,579 | — | — | — | 49,579 | ||||||||||||||||||||||||||||||||||||
| Other income and fees | 4,972 | — | — | — | 4,972 | ||||||||||||||||||||||||||||||||||||
| Total revenues | 852,865 | 60,915 | — | — | 913,780 | ||||||||||||||||||||||||||||||||||||
| Operating Expenses | |||||||||||||||||||||||||||||||||||||||||
| Employment expenses | 400,720 | 15,487 | — | 9,965 | (k) | 426,172 | |||||||||||||||||||||||||||||||||||
| Distribution and other asset-based expenses | 89,047 | 627 | — | — | 89,674 | ||||||||||||||||||||||||||||||||||||
| Other operating expenses | 130,358 | 2,569 | — | — | 132,927 | ||||||||||||||||||||||||||||||||||||
| Other operating expenses of consolidated investment products ("CIP") | 5,812 | — | — | — | 5,812 | ||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | (2,214) | — | — | 5,197 | (g) | 2,983 | |||||||||||||||||||||||||||||||||||
| Restructuring expense | 693 | — | — | — | 693 | ||||||||||||||||||||||||||||||||||||
| Depreciation expense | 7,992 | — | — | — | 7,992 | ||||||||||||||||||||||||||||||||||||
| Amortization expense | 51,777 | — | — | 29,291 | (b) | 81,068 | |||||||||||||||||||||||||||||||||||
| Total operating expenses | 684,185 | 18,683 | — | 44,453 | 747,321 | ||||||||||||||||||||||||||||||||||||
| Operating Income (Loss) | 168,680 | 42,232 | — | (44,453) | 166,459 | ||||||||||||||||||||||||||||||||||||
| Other Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
| Realized and unrealized gain (loss) on investments, net | 5,823 | — | — | — | 5,823 | ||||||||||||||||||||||||||||||||||||
| Realized and unrealized gain (loss) of CIP, net | (28,103) | — | — | — | (28,103) | ||||||||||||||||||||||||||||||||||||
| Other income (expense), net | 3,473 | 571 | (111) | (1) | (8,262) | (i) | (4,329) | ||||||||||||||||||||||||||||||||||
| Total other income (expense), net | (18,807) | 571 | (111) | (8,262) | (26,609) | ||||||||||||||||||||||||||||||||||||
| Interest Income (Expense) | |||||||||||||||||||||||||||||||||||||||||
| Interest expense | (21,471) | — | — | (2,882) | (h) | (24,353) | |||||||||||||||||||||||||||||||||||
| Interest and dividend income | 12,303 | — | 111 | (1) | (6,020) | (l) | 6,394 | ||||||||||||||||||||||||||||||||||
| Interest and dividend income of investments of CIP | 187,452 | — | — | — | 187,452 | ||||||||||||||||||||||||||||||||||||
| Interest expense of CIP | (140,908) | — | — | — | (140,908) | ||||||||||||||||||||||||||||||||||||
| Total interest income (expense), net | 37,376 | — | 111 | (8,902) | 28,585 | ||||||||||||||||||||||||||||||||||||
| Income (Loss) Before Income Taxes | 187,249 | 42,803 | — | (61,617) | 168,435 | ||||||||||||||||||||||||||||||||||||
| Income tax expense (benefit) | 51,261 | 1,900 | — | (8,546) | (m) | 44,615 | |||||||||||||||||||||||||||||||||||
| Net Income (Loss) | 135,988 | 40,903 | — | (53,071) | 123,820 | ||||||||||||||||||||||||||||||||||||
| Noncontrolling interests | 2,408 | — | — | (7,875) | (i) | (5,467) | |||||||||||||||||||||||||||||||||||
| Net Income (Loss) Attributable to Virtus Investment Partners, Inc. | $ | 138,396 | $ | 40,903 | $ | — | $ | (60,946) | $ | 118,353 | |||||||||||||||||||||||||||||||
| Earnings (Loss) per Share-Basic | $ | 20.27 | $ | 17.33 | |||||||||||||||||||||||||||||||||||||
| Earnings (Loss) per Share-Diluted | $ | 19.97 | $ | 17.08 | |||||||||||||||||||||||||||||||||||||
| Weighted Average Shares Outstanding-Basic | 6,829 | 6,829 | |||||||||||||||||||||||||||||||||||||||
| Weighted Average Shares Outstanding-Diluted | 6,929 | 6,929 | |||||||||||||||||||||||||||||||||||||||
(1) See Note 3 to the Unaudited Pro Forma Condensed Combined Financial Statements
(2) See Note 5 to the Unaudited Pro Forma Condensed Combined Financial Statements
Virtus Investment Partners, Inc.
Notes To Pro Forma Condensed Combined Financial Statements
(Unaudited)
Note 1 - Description of the Acquisition
On March 1, 2026, Virtus Investment Partners, Inc. (the "Company" or "Virtus"), through its wholly owned subsidiary, Virtus Private Markets Holdings, LLC, completed the acquisition of 56% of the equity of Keystone National Group, LLC ("Keystone"), an investment manager specializing in asset-centric private credit (the "Acquisition"). The total purchase price of the Acquisition was $308.2 million, comprising $198.8 million paid in cash and $109.4 million in contingent consideration recorded at fair value. The contingent consideration consists of $88.1 million in deferred cash consideration recorded at fair value, which represents payments of $65.0 million and $30.0 million to be paid on the first and second anniversaries of the Acquisition, respectively, and $21.3 million in contingent consideration recorded at fair value, which represents future potential earn-out payments based on pre-established performance metrics related to revenue retention and revenue growth rates. The Company accounted for the Acquisition in accordance with Financial Accounting Standards Board Accounting Standards Codification ("ASC") 805, Business Combinations ("ASC 805"). Accordingly, the purchase price was allocated to the assets acquired, liabilities assumed, and noncontrolling interests based upon their estimated fair values at the date of the Acquisition, as well as definite-lived intangible assets and goodwill of $307.0 and $243.7 million, respectively. The final fair value of the net assets acquired may result in adjustments to certain assets and liabilities, including goodwill.
Note 2 - Basis of Presentation
The Unaudited Pro Forma Condensed Combined Financial Statements are prepared in accordance with Article 11 of the Securities and Exchange Commission Regulation S-X. The historical financial information has been adjusted to give effect to the transactions that are (i) directly attributable to the Acquisition, (ii) factually supportable and (iii) with respect to the Unaudited Pro Forma Condensed Combined Statements of Operations, expected to have a continuing impact on the operating results of the combined company. The historical information of the Company and Keystone is presented in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), except that it does not contain all of the footnote disclosures normally required by U.S. GAAP.
The Unaudited Pro Forma Condensed Combined Financial Statements are based on the Company’s historical consolidated financial statements and the historical financial statements of Keystone as adjusted to give effect to the Acquisition. The Unaudited Pro Forma Condensed Combined Balance Sheet at December 31, 2025 gives effect to the Acquisition as if it had been consummated on that day. The Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2026 and for the year ended December 31, 2025, give effect to the Acquisition as if it had been consummated on January 1, 2025.
The transaction accounting adjustments for the Acquisition consist of those necessary to account for the Acquisition. The Unaudited Pro Forma Condensed Combined Financial Statements have been prepared using the acquisition method of accounting, which is based on ASC 805, and uses the fair value concepts defined in ASC 820, Fair Value Measurement. As the acquirer for accounting purposes, the Company has estimated the fair value of the assets acquired and liabilities assumed. The Unaudited Pro Forma Condensed Combined Financial Statements have been presented for illustrative purposes only and are not necessarily indicative of the financial condition or results of operations that would have been achieved had the Acquisition occurred on the dates indicated. Further, they do not purport to project the future financial condition and results of operations of the combined company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.
These Unaudited Pro Forma Condensed Combined Financial Statements should be read in conjunction with (i) the accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Statements; (ii) the Company’s separate historical unaudited consolidated financial statements and the related notes included in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2026; (iii) the Company’s separate historical audited consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025; (iv) Keystone's separate historical audited consolidated financial statements and related notes as of and for the year ended December 31, 2025, included in this Current Report on Form 8-K as Exhibit 99.1.
Note 3 - Reclassifications and Conforming Accounting Policies
The Unaudited Pro Forma Condensed Combined Statements of Operations reflect the following reclassification in order to conform the presentation of Keystone’s financial results to that of the Company:
(1)An adjustment to conform the presentation of interest income related to cash and cash equivalents from Other income (expense), net to Virtus' classification as Interest and dividend income.
At this time, the Company is not aware of any additional differences that would have a material impact on the Unaudited Pro Forma Condensed Combined Financial Statements.
Note 4 - Preliminary Purchase Price Allocation
Under the acquisition method of accounting, the total purchase price is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of the acquisition.
The Company, with the assistance of a third party valuation firm, has performed a preliminary valuation analysis of the fair market value of Keystone’s tangible and intangible assets and liabilities.
The table below represents a preliminary allocation of the total purchase price to Keystone’s tangible and intangible assets and liabilities as of December 31, 2025 based on the Company's preliminary estimate of their respective fair values (in thousands):
| Assets acquired | $ | 7,872 | |||
| Identified intangible assets | 307,000 | ||||
| Goodwill | 246,019 | ||||
| Liabilities assumed | (10,554) | ||||
| Redeemable noncontrolling interests | (104,564) | ||||
| Investment manager noncontrolling interests liability | (137,584) | ||||
| Total consideration | $ | 308,189 | |||
This preliminary purchase price allocation has been used to prepare pro forma adjustments in these Unaudited Pro Forma Condensed Combined Financial Statements. Any changes to the initial estimates of the fair value of assets and liabilities that are made within the measurement period, which will not exceed one year, will be recorded as adjustments to those assets and liabilities and residual amounts will be allocated to goodwill.
Note 5 - Pro Forma Adjustments
The Unaudited Pro Forma Condensed Combined Statements of Operations do not include any material non-recurring charges that will arise in subsequent periods related to the Acquisition. In addition, the Unaudited Pro Forma Condensed Combined Financial Statements do not reflect the costs of any integration activities including any benefits that may result from realization of future cost savings from operating efficiencies or revenue synergies expected to result from the Acquisition. The Unaudited Pro Forma Condensed Combined Financial Statements reflect the following adjustments:
(a) Cash
Represents adjustments to cash to reflect cash receipts and payments related to the Acquisition, as follows (in thousands):
| Receipts: | |||||
| Proceeds from borrowings on existing credit facility | $ | 50,000 | |||
| Payments: | |||||
| Cash consideration for acquisition | (198,769) | ||||
| Net pro forma adjustments to cash and cash equivalents | $ | (148,769) | |||
(b) Intangible Assets and Amortization Expense
The preliminary valuation analysis identified intangible assets consisting of investment contracts and trade names. The fair value
of acquired investment contracts, which was determined using the multi-period excess earnings method, was estimated at $292.0 million. The fair value of the acquired trademarks/trade names, which was determined using the relief from royalties method, was estimated at $15.0 million. The calculation of these fair values is preliminary and subject to change.
The following table summarizes the estimated fair values of Keystone’s identifiable intangible assets and their estimated useful lives and uses a straight-line method of amortization (in thousands):
| Estimated Fair Value | Estimated Useful Life in Years | Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | ||||||||||||||||||||
| Investment management agreements | $ | 292,000 | 1 - 11 | $ | 4,381 | $ | 27,791 | ||||||||||||||||
| Trade name | 15,000 | 10 | 250 | 1,500 | |||||||||||||||||||
| Total | $ | 307,000 | $ | 4,631 | $ | 29,291 | |||||||||||||||||
(c) Goodwill
Reflects an adjustment to record the estimated goodwill associated with the Acquisition of $246.0 million as shown in Note 4.
(d) Leases
Adjustment to existing Keystone operating leases to reflect impact of applying ASC 805 as a result of the Acquisition.
(e) Other Assets
Adjustment to other assets acquired to reflect impact of applying ASC 805 as a result of the Acquisition to certain employee notes.
(f) Accounts Payable and Accrued Liabilities
Reflects a liability for pre-closing Keystone equity distributions to be paid as part of the assets and liabilities assumed in accordance with the equity purchase agreement between Virtus and Keystone dated December 5, 2025 (the "Equity Purchase Agreement").
(g) Contingent Consideration
Represents an adjustment to reflect the $109.4 million in contingent consideration recorded at fair value. The contingent consideration consists of $88.1 million in deferred cash consideration recorded at fair value, which represents payments of $65.0 million and $30.0 million to be paid on the first and second anniversaries of the Acquisition, respectively, and $21.3 million in contingent consideration recorded at fair value, which represents a maximum of $75.0 million in potential earn-out payments based on pre-established performance metrics related to revenue retention and revenue growth rates. Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2026 and the year ended December 31, 2025 reflect the estimated fair value adjustments for each of the respective periods, primarily consisting of accretion from the passage of time.
(h) Debt and Interest Expense
In conjunction with the closing of the Acquisition, the Company borrowed $50.0 million under its existing credit facility to provide proceeds to complete the Acquisition, which is reflected as an adjustment to the Unaudited Pro Forma Condensed Combined Balance Sheet. The Unaudited Pro Forma Condensed Combined Statements of Operations reflect an adjustment to interest expense associated with the additional borrowing of $50.0 million, using an estimated borrowing rate of 5.9%, resulting in additional estimated interest expense of $0.5 million and $2.9 million for the three months ended March 31, 2026 and the year ended December 31, 2025, respectively.
(i) Investment manager noncontrolling interests liability and redeemable noncontrolling interests
Represents the noncontrolling interests of Keystone consisting of equity units subject to holder put rights and Company call rights and conditional and unconditional redemption provisions depending on unit class. Noncontrolling interests with unconditional redemption provisions are classified as a liability while noncontrolling interests with conditional redemption provisions are classified as redeemable noncontrolling interests (see Note 4 to the Unaudited Pro Forma Condensed Combined Financial Statements).
This investment manager noncontrolling interests liability is recorded at the greater of the estimated redemption value or the initial fair value, with any changes recorded on the Condensed Consolidated Statements of Operations within Total other income (expense), net, along with any distributions earned and paid. Adjustments to the Unaudited Pro Forma Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and the year ended December 31, 2025 reflect estimated distributions for each period.
Redeemable noncontrolling interests are subsequently recorded at estimated redemption value within redeemable noncontrolling interests on the Company's Condensed Consolidated Balance Sheets, and any changes in the estimated redemption value are recorded on the Condensed Consolidated Statements of Operations within noncontrolling interests, as reflected in the following activity for the three months ended March 31, 2026 and the year ended December 31, 2025 (in thousands):
| Three Months Ended March 31, 2026 | Year Ended December 31, 2025 | ||||||||||
| Balances, beginning of period | $ | 107,730 | $ | 104,564 | |||||||
| Net income (loss) and changes in redemption value | 590 | 7,875 | |||||||||
| Distributions | (1,570) | (4,709) | |||||||||
| Balances, end of period | $ | 106,750 | $ | 107,730 | |||||||
(j) Stockholders' Equity
Represents the elimination of the equity balances of Keystone.
(k) Employment Expenses
To align annual incentive plans with that of the Company, the Keystone annual incentive plan was modified upon acquisition to align with the incentive plan outlined in the Equity Purchase Agreement. The impact of the modification to the annual incentive plan on the Unaudited Pro Forma Statement of Operations for the three months ended March 31, 2026 and the year ended December 31, 2025 was estimated at $1.6 million and $10.0 million, respectively.
(l) Interest and dividend income
Represents the estimated reduction in interest and dividend income resulting from lower average cash balances due to the cash consideration paid to complete the Acquisition.
(m) Income Taxes
Prior to the Acquisition, Keystone was not required to provide for income taxes as it was treated as a pass-through entity for U.S. federal and state income tax purposes. Federal and state income taxes were assessed at the owner level and each owner was liable for its own tax payments.
The Unaudited Pro Forma Condensed Combined Statement of Operations reflects an adjustment of $0.8 million and $8.5 million to income tax expense from continuing operations for the three months ended March 31, 2026 and the year ended December 31, 2025, respectively, based on a statutory tax rate of 24.9%, as the Company will be subject to federal and state income taxes through its ownership of Keystone.