Ridgepost Capital, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Report of Independent Registered Public Accounting Firm 88 Consolidated Balance Sheets as of December 31, 2021 and 2020 89 Consolidated Statements of Operations for the Years ended December 31, 2021, 2020, and 2019 91 Consolidated Statements of Changes in Stockholders’ Equity for the Years ended December 31, 2021, 2020, and 2019 92 Consolidated Statements of Cash Flows for the Years ended December 31, 2021, 2020, and 2019 93 Notes to Consolidated Financial Statements 95 87 Report of Independent Registered Public Accounting Firm To the Stockholders and the Board of Directors P10, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of P10, Inc. and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP We have served as the Company’s auditor since 2017. Chicago, Illinois March 18, 2022 88 P10, Inc. Consolidated Balance Sheets (in thousands, except share amounts) As of As of December 31, December 31, 2021 2020 ASSETS Cash and cash equivalents $ 40,916 $ 11,773 Restricted cash 2,566 1,010 Accounts receivable 2,087 2,494 Note receivable 2,552 — Due from related parties 13,124 2,667 Investment in unconsolidated subsidiaries 1,803 2,158 Prepaid expenses and other assets 4,759 3,368 Property and equipment, net 981 1,124 Right-of-use assets 14,789 6,491 Deferred tax assets, net 45,151 37,621 Intangibles, net 128,788 143,738 Goodwill 418,701 369,982 Total assets $ 676,217 $ 582,426 LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: Accounts payable $ 401 $ 1,103 Accrued expenses 12,474 11,912 Due to related parties 2,258 2,200 Other liabilities 1,808 254 Contingent consideration 22,963 593 Deferred revenues 12,953 10,347 Lease liabilities 15,700 7,682 Debt obligations 212,496 290,055 Total liabilities 281,053 324,146 COMMITMENTS AND CONTINGENCIES (NOTE 13) REDEEMABLE NONCONTROLLING INTEREST — 198,439 STOCKHOLDERS' EQUITY: Common stock - $ 0.001 par value; 0 and 110,000,000 shares authorized, respectively; 0 and 62,587,823 issued, respectively; 0 and 62,464,371 outstanding, respectively as of December 31, 2021 and 2020 — 63 Class A common stock, $ 0.001 par value; 510,000,000 and 0 shares authorized; 34,464,920 and 0 issued and outstanding as of December 31, 2021 and 2020, respectively 34 — Class B common stock, $ 0.001 par value; 180,000,000 and 0 shares authorized; 82,851,279 and 0 shares issued; and 82,727,827 and 0 shares outstanding as of December 31, 2021 and 2020, respectively 83 — Treasury stock ( 273 ) ( 273 ) Additional paid-in-capital 650,405 324,310 Accumulated deficit ( 255,085 ) ( 264,259 ) Total stockholders' equity 395,164 59,841 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 676,217 $ 582,426 89 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Consolidated VIE Balance Sheets (in thousands, except per share amounts) As of As of December 31, December 31, 2021 2020 ASSETS Cash and cash equivalents $ 18,536 $ 4,797 Restricted cash 756 756 Accounts receivable 1,060 181 Note receivable 2,552 - Due from related parties 3,243 2,150 Prepaid expenses and other assets 1,330 1,288 Property and equipment, net 866 1,055 Right-of-use assets 4,976 6,274 Deferred tax assets, net - - Intangibles, net 84,339 86,541 Goodwill 295,507 247,890 Total assets $ 413,165 $ 350,932 LIABILITIES Accounts payable $ 121 $ 240 Accrued expenses 9,144 5,511 Due to related parties - - Contingent consideration 22,963 - Deferred revenues 10,676 8,237 Lease liabilities 5,944 7,430 Debt obligations - 256,688 Deferred tax liabilities, net 4,769 6,038 Total liabilities $ 53,617 $ 284,144 90 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Consolidated Statements of Operations (in thousands, except per share amounts) For the Year Ended December 31, 2021 2020 2019 REVENUES Management and advisory fees $ 149,424 $ 66,125 $ 42,209 Other revenue 1,110 1,243 2,693 Total revenues 150,534 67,368 44,902 OPERATING EXPENSES Compensation and benefits 54,755 24,529 12,343 Professional fees 11,508 13,953 4,572 General, administrative and other 9,870 4,710 4,624 Contingent consideration expense 3,472 21 — Amortization of intangibles 30,431 15,466 10,552 Strategic alliance expense 152 — — Total operating expenses 110,188 58,679 32,091 INCOME FROM OPERATIONS 40,346 8,689 12,811 OTHER (EXPENSE)/INCOME Interest expense implied on notes payable to sellers ( 825 ) ( 988 ) ( 1,957 ) Interest expense, net ( 21,360 ) ( 10,732 ) ( 9,415 ) Loss on extinguishment of debt ( 15,312 ) — — Other income 848 — — Total other (expense) ( 36,649 ) ( 11,720 ) ( 11,372 ) Net income/(loss) before income taxes 3,697 ( 3,031 ) 1,439 Income tax benefit 7,070 26,837 10,502 NET INCOME $ 10,767 $ 23,806 $ 11,941 Less: preferred dividends attributable to redeemable noncontrolling interest ( 1,593 ) ( 720 ) — NET INCOME ATTRIBUTABLE TO P10 $ 9,174 $ 23,086 $ 11,941 Earnings per share Basic earnings per share $ 0.13 $ 0.37 $ 0.19 Diluted earnings per share $ 0.08 $ 0.36 $ 0.19 Weighted average shares outstanding, basic 72,660 62,465 62,465 Weighted average shares outstanding, diluted 112,330 64,905 63,421 91 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Consolidated Statements of Changes in Stockholders’ Equity (in thousands) Total Common Stock Common Stock - Class A Common Stock - Class B Treasury stock Additional Accumulated Stockholders' Shares Amount Shares Amount Shares Amount Shares Amount Paid-in-capital Deficit Equity Balance at December 31, 2018 62,464 $ 63 — $ — — $ — 123 $ ( 273 ) $ 323,179 $ ( 299,286 ) $ 23,683 Stock-based compensation — — — — — — — — 417 — 417 Net income attributable to P10 — — — — — — — — — 11,941 11,941 Balance at December 31, 2019 62,464 63 — $ — — $ — 123 $ ( 273 ) $ 323,596 $ ( 287,345 ) $ 36,041 Stock-based compensation — — — — — — — — 714 — 714 Issuance of subsidiary preferred stock — — — — — — — — — — — Issuance of preferred dividend — — — — — — — — — — — Net income attributable to P10 — — — — — — — — — 23,086 23,086 Balance at December 31, 2020 62,464 63 — $ — — $ — 123 $ ( 273 ) $ 324,310 $ ( 264,259 ) $ 59,841 Exchange of common stock and redeemable noncontrolling interest to Class B common stock ( 62,464 ) ( 63 ) — — 105,655 106 — — 197,676 — 197,719 Issuance of Class A common stock sold in IPO, net of underwriting discounts — — 11,500 11 — — — — 129,364 — 129,375 Deferred offering costs — — — — — — — — ( 3,361 ) — ( 3,361 ) Issuance of restricted stock awards — — — — 36 — — — — — — Exchange of Class B common stock for Class A common stock in connection with IPO — — 8,500 9 ( 8,500 ) ( 9 ) — — — — — Exchange of Class B units for Class A common stock and redemption of corresponding Class B common stock in connection with registered offering subsequent to reorganization and IPO — — 3,000 3 ( 3,000 ) ( 3 ) — — — — — Exchange of Class B common stock for Class A common stock — — 11,464 11 ( 11,464 ) ( 11 ) — — — — — Stock-based compensation — — — — — — — — 2,416 — 2,416 Net income attributable to P10 — — — — — — — — — 9,174 9,174 Balance at December 31, 2021 — — 34,464 $ 34 82,727 $ 83 123 $ ( 273 ) $ 650,405 $ ( 255,085 ) $ 395,164 92 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2021 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 10,767 $ 23,806 $ 11,941 Adjustments to reconcile net income to net cash provided by operating activities: Stock-based compensation 3,528 714 417 Non-cash incentive compensation 1,396 — — Depreciation expense 272 105 30 Amortization of intangibles 30,431 15,466 10,552 Amortization of debt issuance costs and debt discount 4,748 2,040 2,683 Income from unconsolidated subsidiaries ( 1,087 ) — — Benefit for deferred tax ( 8,140 ) ( 30,274 ) ( 10,909 ) Loss on extinguishment of debt 10,499 — — Remeasurement of contingent consideration 3,472 — — Change in operating assets and liabilities: Accounts receivable 407 1,942 ( 319 ) Due from related parties ( 9,782 ) ( 427 ) ( 578 ) Prepaid expenses and other assets ( 1,390 ) ( 74 ) ( 866 ) Right-of-use assets 1,651 1,186 829 Accounts payable ( 702 ) 619 23 Accrued expenses 661 2,685 2,291 Due to related parties 58 141 — Other liabilities 1,554 ( 34 ) — Deferred revenues 2,606 ( 5,960 ) 1,586 Lease liabilities ( 1,930 ) ( 1,266 ) ( 867 ) Net cash provided by operating activities 49,019 10,669 16,813 CASH FLOWS FROM INVESTING ACTIVITIES Acquisitions, net of cash acquired ( 44,612 ) ( 213,909 ) — Purchase of intangible assets ( 30 ) — — Note receivable ( 2,552 ) — — Investments in unconsolidated subsidiaries ( 2,638 ) — — Proceeds from investments in unconsolidated subsidiaries 4,080 — — Post-closing payments related to acquisitions ( 1,519 ) ( 250 ) ( 625 ) Purchases of property and equipment ( 129 ) ( 34 ) ( 30 ) Net cash used in investing activities ( 47,400 ) ( 214,193 ) ( 655 ) CASH FLOWS FROM FINANCING ACTIVITIES Issuance of redeemable noncontrolling interests — 46,353 — Repayment of notes payable to sellers ( 9,406 ) — — Repayment of loans payable ( 31,658 ) — — Borrowings on debt obligations 252,873 159,350 19,750 Repayments on debt obligations ( 295,376 ) ( 4,798 ) ( 25,393 ) Cash paid for extinguishment of debt ( 4,813 ) — — Payments to repurchase shares under employee stock plan ( 1,112 ) — — Payment of preferred stock dividends ( 2,313 ) — — Proceeds from initial public offering 138,000 — — Payment of initial public offering underwriting fees ( 8,626 ) — — Payments of contingent consideration ( 727 ) — — Deferred offering costs ( 3,361 ) — — Debt issuance costs ( 4,401 ) ( 4,064 ) — Net cash provided by (used in) financing activities 29,080 196,841 ( 5,643 ) Net change in cash, cash equivalents and restricted cash 30,699 ( 6,683 ) 10,515 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period 12,783 19,466 8,951 CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period $ 43,482 $ 12,783 $ 19,466 93 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Consolidated Statements of Cash Flows (in thousands) For the Year Ended December 31, 2021 2020 2019 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Cash paid for interest $ 18,719 $ 9,699 $ 5,756 Cash paid for extinguishment of debt $ 4,813 $ — $ — Cash paid for income taxes $ 5,039 $ 1,169 $ — NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES Issuance of redeemable noncontrolling interests in acquisition $ — $ 141,354 $ — Issuance of redeemable noncontrolling interests in exchange for tax amortization benefits — 10,012 — Increase to purchase price of Enhanced for working capital adjustment — 1,707 — Additions to right-of-use assets 9,949 — — Additions to lease liabilities 9,949 — — Additions to contingent consideration 22,963 — — RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH Cash and cash equivalents $ 40,916 $ 11,773 $ 18,710 Restricted cash 2,566 1,010 756 Total cash, cash equivalents and restricted cash $ 43,482 $ 12,783 $ 19,466 94 The Notes to Consolidated Financial Statements are an integral part of these statements. P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Note 1. Description of Business Description of Business On October 20, 2021, P10 Holdings, Inc. ("P10 Holdings"), in connection with its Initial Public Offering ("IPO"), completed a reorganization and restructure. In connection with the reorganization, P10, Inc. ("P10") became the parent company and all of the existing equity of P10 Holdings, which is a wholly owned subsidiary of P10, and its consolidated subsidiaries, including the convertible preferred units of P10 Intermediate, as defined below, were converted into common stock of P10. The offering and reorganization included a reverse stock split of P10 Holdings common stock on a 0.7-for-1 basis pursuant to which every outstanding share of common stock decreased to 0.7 shares. The number of shares have been retrospectively adjusted within these financial statements to reflect this stock split. The reorganization was considered a transaction between entities under common control. As a result, the consolidated financial statements for periods prior to the reorganization and IPO are the consolidated financial statements of P10 Holdings as the predecessor to P10 for accounting and reporting purposes. Following the reorganization and IPO, P10 has two classes of common stock, Class A common stock and Class B common stock. Each share of Class B common stock is entitled to ten votes while shares of Class A common stock are entitled to one vote. P10, Inc. and its consolidated subsidiaries (the “Company”) operate as a multi-asset class private market solutions provider in the alternative asset management industry. Our mission is to provide our investors differentiated access to a broad set of solutions and investment vehicles across a multitude of asset classes and geographies. Our existing portfolio of solutions across private equity, venture capital, private credit and impact investing support our mission by offering a comprehensive set of investment vehicles to our investors, including primary fund of funds, secondary investment, direct investment and co-investments, alongside separate accounts (collectively the “Funds”). The direct and indirect subsidiaries of the Company include P10 Holdings, P10 Intermediate Holdings, LLC (“P10 Intermediate”), which owns the subsidiaries P10 RCP Holdco, LLC (“Holdco”), Five Points Capital, Inc. (“Five Points”), TrueBridge Capital Partners, LLC (“TrueBridge”), Enhanced Capital Group, LLC (“ECG”), Bonaccord Capital Advisors, LLC ("Bonaccord") and Hark Capital Advisors, LLC ("Hark"). Prior to November 19, 2016, P10, formerly Active Power, Inc. designed, manufactured, sold, and serviced flywheel-based uninterruptible power supply products and serviced modular infrastructure solutions. On November 19, 2016, we completed the sale of substantially all our assets and liabilities and operations to Langley Holdings plc, a United Kingdom public limited company. Following the sale, we changed our name from Active Power, Inc. to P10 Industries, Inc. and became a non-operating company focused on monetizing our retained intellectual property and acquiring profitable businesses. For the period from December 2016 through September 2017, our business primarily consisted of cash, certain retained intellectual property assets and our net operating losses (“NOLs”) and other tax benefits. On March 22, 2017, we filed for re-organization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization. The Company emerged from bankruptcy on May 3, 2017. On December 1, 2017, the Company changed its name from P10 Industries, Inc. to P10 Holdings, Inc. We were founded as a Texas corporation in 1992 and reincorporated in Delaware in 2000. Our headquarters is in Dallas, Texas. On October 5, 2017, we closed on the acquisition of RCP Advisors 2, LLC ("RCP 2") and entered into a purchase agreement to acquire RCP Advisors 3, LLC ("RCP 3") in January 2018. On January 3, 2018, we closed on the acquisition of RCP 3. RCP 2 and RCP 3 are registered investment advisors with the United States Securities and Exchange Commission. On April 1, 2020, the Company completed the acquisition of Five Points. Five Points is a leading lower middle market alternative investment manager focused on providing both equity and debt capital to private, growth-oriented companies and limited partner capital to other private equity funds, with all strategies focused exclusively in the U.S. lower middle market. See Note 3 for additional information on the acquisition. Five Points is a registered investment advisor with the United States Securities and Exchange Commission. On October 2, 2020, the Company completed the acquisition of TrueBridge. TrueBridge is an investment firm focused on investing in venture capital through fund-of-funds, co-investments, and separate accounts. See Note 3 for additional 95 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) information on the acquisition. TrueBridge is a registered investment advisor with the United States Securities and Exchange Commission. On December 14, 2020, the Company completed the acquisition of 100 % of the equity interest in ECG, and a noncontrolling interest in Enhanced Capital Partners, LLC (“ECP”) (collectively, “Enhanced”). Enhanced undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing. See Note 3 for additional information on the acquisitions. ECP is a registered investment advisor with the United States Securities and Exchange Commission. On September 30, 2021, the Company completed acquisitions of Bonaccord and Hark. Bonaccord is an alternative asset manager focusing on acquiring minority equity interests in alternative asset management companies focused on private market strategies which may include private equity, private credit, real estate, and real asset strategies. Hark is engaged in the business of making loans to portfolio companies that are owned or controlled by financial sponsors, such as private equity funds or venture capital funds, and which do not meet traditional direct lending underwriting criteria but where the repayment of the loan by the portfolio company is guaranteed by its financial sponsor. See Note 3 for additional information on these acquisitions. Note 2. Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Management believes it has made all necessary adjustments so that the Consolidated Financial Statements are presented fairly and that estimates made in preparing the Consolidated Financial Statements are reasonable and prudent. The Consolidated Financial Statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. All intercompany transactions and balances have been eliminated upon consolidation. Certain entities in which the Company holds an interest are investment companies that follow specialized accounting rules under U.S. GAAP and reflect their investments at estimated fair value. Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting treatment. Principles of Consolidation The Company performs the variable interest analysis for all entities in which it has a potential variable interest. If the Company has a variable interest in the entity and the entity is a variable interest entity (“VIE”), we will also analyze whether the Company is the primary beneficiary of this entity and if consolidation is required. Generally, VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties, or whose equity holders, as a group, lack one or more of the following characteristics: (a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns. A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits. This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether we, or another party, has the power to direct those activities. When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties. See Note 7 for further information. 96 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity. Accordingly, the Company consolidates these entities, which includes Holdco, RCP 2, RCP 3, TrueBridge, Bonaccord, and Hark. The assets and liabilities of the consolidated VIEs are presented gross in the Consolidated Balance Sheets. As a result of the reorganization, it was determined that P10 Intermediate no longer qualifies as a VIE, but would still be consolidated under the voting interest model. This change has been retrospectively adjusted and is reflected on the Consolidated VIE Balance Sheets. See Note 7 for more information on both consolidated and unconsolidated VIEs. Entities that do not qualify as VIEs are assessed for consolidation under the voting interest model. Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or other means. P10 Holdings, P10 Intermediate, Five Points and ECG are concluded to be consolidated subsidiaries of P10 under the voting interest model. Reclassifications Certain reclassifications have been made within the Consolidated Financial Statements to conform prior periods with current period presentation. Use of Estimates The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents. As of December 31, 2021, and December 31, 2020, cash equivalents include money market funds of $ 10.7 million and $ 2.8 million, respectively, which approximates fair value. The Company maintains its cash balances at various financial institutions, which may periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits. The Company believes it is not exposed to any significant credit risk on cash. Restricted Cash Restricted cash as of December 31, 2021 and December 31, 2020 was primarily cash that is restricted due to certain deposits being held for customers. Accounts Receivable and Due from Related Parties Accounts receivable is equal to contractual amounts reduced for allowances, if applicable. The Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of December 31, 2021 and December 31, 2020. If accounts are subsequently determined to be uncollectible, they will be expensed in the period that determination is made. Due from related parties represents receivables from the Funds for management fees earned but not yet received and reimbursable expenses from the Funds. These amounts are expected to be fully collectible. Note Receivable Note receivable is equal to contractual amounts owed from a signed, secured promissory note with the Company. In addition to contractual amounts, borrowers are obligated to pay interest on outstanding amounts. The Company considers the note receivable to be fully collectible; accordingly, no allowance for doubtful accounts has been established as of 97 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) December 31, 2021 . There was no note receivable balance as of December 31, 2020. If accounts are subsequently determined to be uncollectible, they will be expensed in the period that determination is made. Investment in Unconsolidated Subsidiaries For equity investments in entities that we do not control, but over which we exercise significant influence, we use the equity method of accounting. The equity method investments are initially recorded at cost, and their carrying amount is adjusted for the Company’s share in the earnings or losses of each investee, and for distributions received. The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable. For certain entities in which the Company does not have significant influence and fair value is not readily determinable, we value these investments under the measurement alternative. Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, requires equity securities to be recorded at cost and adjusted to fair value at each reporting period. However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the terms of the respective leases or service lives of the improvements, whichever is shorter, using the straight-line method. Expenditures for major renewals and betterments that extend the useful lives of the property and equipment are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. The estimated useful lives of the various assets are as follows: Computers and purchased software 3 - 5 years Furniture and fixtures 7 - 10 years Long-lived Assets Long-lived assets including property and equipment, lease right-of-use assets, and definite lived intangibles are evaluated for impairment under FASB ASC 360, Property, Plant, and Equipment . Long-lived assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The carrying value of long-lived assets are determined to not be recoverable if the undiscounted estimated future net operating cash flows directly related to the asset or asset group, including any disposal value, is less than the carrying amount of the asset. If the carrying value of an asset is determined to not be recoverable, the impairment loss is measured as the amount by which the carrying value of the asset exceeds its fair value on the measurement date. Fair value is based on the best information available, including prices for similar assets and estimated discounted cash flows. Leases The Company recognizes a lease liability and right-of-use asset in our Consolidated Balance Sheets for contracts that it determines are leases or contain a lease. The Company’s leases primarily consist of operating leases for various office spaces. Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases. The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term. Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent, lease incentives and certain other existing lease liabilities. Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options. Lease expense is recognized on a straight-line basis over the lease term. Additionally, upon amendments or other events, the Company may be required to remeasure our lease liability and right-of-use asset. 98 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The Company does not recognize a lease liability or right-of-use asset on our Consolidated Balance Sheets for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. When determining whether a lease qualifies as a short-term lease, the Company evaluates the lease term and the purchase option in the same manner as all other leases. Goodwill and Intangible Assets Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the amounts assigned to identifiable assets acquired, less the liabilities assumed. As of December 31, 2021, goodwill recorded on our Consolidated Balance Sheets relates to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, and Hark. As of December 31, 2021, the intangible assets are comprised of indefinite-lived intangible assets and finite-lived intangible assets related to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord and Hark. Indefinite-lived intangible assets and goodwill are not amortized. Finite-lived technology is amortized using the straight-line method over its estimated useful life of 4 years . Finite-lived management and advisory contracts, which relate to acquired separate accounts and funds and investor/customer relationships with a specified termination date, are amortized in line with contractual revenue to be received, which range between 7 and 16 years . Certain of our trade names are considered to have finite-lives. Finite-lived trade names are amortized over 10 years in line with the pattern in which the economic benefits are expected to occur. Goodwill is reviewed for impairment at least annually as of September 30 utilizing a qualitative or quantitative approach and more frequently if circumstances indicate impairment may have occurred. The impairment testing for goodwill under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s reporting unit is less than the respective carrying value. The reporting unit is the reporting level for testing the impairment of goodwill. If it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit and record an impairment charge for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill). At December 31, 2021 and December 31, 2020, the Company determined that there was no impairment to goodwill. Contingent Consideration Contingent consideration is initially measured at fair value on the date of the acquisition. The liabilities are remeasured at fair value on each reporting date, with changes in the fair value reflected in other income on our Consolidated Statements of Operations. As of December 31, 2021, contingent consideration recorded relates to the acquisitions of Hark and Bonaccord. The contingent consideration recorded as of December 31, 2020 relates to the TrueBridge acquisition. Debt Issuance Costs Costs incurred which are directly related to the issuance of debt are deferred and amortized using the effective interest method and are presented as a reduction to the carrying value of the associated debt on our Consolidated Balance Sheets. As these costs are amortized, they are included in interest expense, net within our Consolidated Statements of Operations. Redeemable Noncontrolling Interest Redeemable noncontrolling interest represents third party and related party interests in the Company's consolidated subsidiary, P10 Intermediate. This interest is redeemable at the option of the investors and therefore is not treated as permanent equity. Redeemable noncontrolling interest is presented at the greater of its carrying amount or redemption value at each reporting date in the Company’s Consolidated Balance Sheets. Any changes in redemption value are recorded to retained earnings, or in the absence of retained earnings, additional paid-in capital. In conjunction with the IPO, redeemable noncontrolling interest was contractually exchanged for Class B common stock. See Note 18 for additional information. 99 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Treasury Stock The Company records common stock purchased for treasury at cost. At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock using the average cost method. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between independent and knowledgeable parties who are willing and able to transact for an asset or liability at the measurement date. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB. As of December 31, 2021 and December 31, 2020, we used the following valuation techniques to measure fair value for assets and there were no changes to these methodologies during the periods presented: Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded. Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, and other methods by which all significant inputs were observable at the measurement date. Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date. The carrying values of financial instruments comprising cash and cash equivalents, prepaid assets, accounts payable, accounts receivable and due from related parties approximate fair values due to the short-term maturities of these instruments. The fair value of the credit facilities approximate the carrying value based on the interest rates which approximate current market rates. The carrying values of the seller notes payable and tax amortization benefits approximate fair value as of December 31, 2020. The seller notes payable and tax amortization benefits were both paid down in 2021 and did not carry a balance as of December 31, 2021. The Company has a contingent consideration liability related to the acquisitions of Hark and Bonaccord that is measured at fair value and is remeasured on a recurring basis. See Note 11 for additional information. Revenue Recognition Revenue is recognized when, or as, the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services. While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts. Management and Advisory Fees The Company earns management fees for asset management services provided to the Funds where the Company has discretion over investment decisions. The Company primarily earns fees for advisory services provided to clients where the Company does not have discretion over investment decisions. Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned. These fees are recorded as deferred revenue on the Consolidated Balance Sheets. For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are rendered, since the customers simultaneously receive and consume the benefits provided as the Company performs the service. The transaction price is the amount of consideration to which the Company expects to be entitled based on the terms of the arrangement. For certain funds, management fees are initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term. Additionally, the management fee may step down for certain funds depending on the contractual arrangement. Advisory services are generally based upon fixed amounts and billed quarterly. Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments. 100 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Other Revenue Other revenue on our Consolidated Statements of Operations primarily consists of subscriptions, consulting agreements and referral fees. The subscription and consulting agreements typically have renewable one-year lives, and revenue is recognized ratably over the current term of the subscription or the agreement. If subscriptions or fees have been paid in advance, these fees are recorded as deferred revenue on our Consolidated Balance Sheets. Referral fee revenue is recognized upon closing of certain opportunities. Strategic Alliance Expense Strategic alliance expense on our Consolidated Statements of Operations consists solely of the Strategic Alliance Agreement ("SAA") at Bonaccord. In connection with the acquisition, Bonaccord assumed a Strategic Alliance Agreement ("SAA"). This SAA provides the third-party the right to receive 15% of the net management fee earnings, which includes the management fees minus applicable expenses, for Bonaccord Fund I ("Fund I"), paid quarterly, in exchange for funding certain amounts of capital commitments to the fund. Refer to Note 5 for further discussion of the agreement. Income Taxes Current income tax expense represents our estimated taxes to be paid or refunded for the current period. In accordance with ASC 740, Income Taxes (“ASC 740”), we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized. Uncertain tax positions are recognized only when we believe it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position. We recognize interest and penalties, if any, related to uncertain tax positions in income tax expense. We file various federal and state and local tax returns based on federal and state local consolidation and stand-alone tax rules as applicable. Earnings Per Share Basic earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted EPS includes the determinants of basic EPS and common stock equivalents outstanding during the period adjusted to give effect to potentially dilutive securities. See Note 17 for additional information. Prior to the conversion of the redeemable convertible preferrred shares issued by P10 Intermediate to class B shares, the numerator in the computation of diluted EPS was impacted by the redeemable convertible preferred shares. Under the if converted method, diluted EPS reflects a reduction in earnings that P10 would recognize by owning a smaller percentage of P10 Intermediate when the preferred shares are assumed to be converted. The denominator in the computation of diluted EPS is impacted by additional common shares that would have been outstanding if dilutive potential shares of common stock had been issued. Potential shares of common stock that may be issued by the Company include shares of common stock that may be issued upon exercise of outstanding stock options and restricted stock units that have been issued, but not vested. Under the treasury stock method, the unexercised options are assumed to be exercised at the beginning of the period or at issuance, if later. The assumed proceeds are then used to purchase shares of common stock at the average market price during the period. 101 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Stock-Based Compensation Expense Stock-based compensation relates to grants for shares of P10 awarded to our employees. Stock option compensation cost is estimated at the grant date based on the fair-value of the award, which is determined using the Black Scholes option valuation model and is recognized as expense ratably over the requisite service period of the award, generally five years . The share price used in the Black Scholes model is based on the trading price of our shares on the public markets. Expected life is based on the vesting period and expiration date of the option. Stock price volatility is estimated based on a group of similar publicly traded companies determined to be most reflective of the expected volatility of the Company due to the nature of operations of these entities. The risk-free rates are based on the U.S. Treasury yield in effect at the time of grant. Forfeitures are recognized as they occur. Segment Reporting The Company operates as an integrated private markets solution provider and a single operating segment. According to ASC 280, Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker(s) in deciding how to allocate resources and in assessing performance. Business Acquisitions In accordance with ASC 805, Business Combinations (“ASC 805”), the Company identifies a business to have three key elements; inputs, processes, and outputs. While an integrated set of assets and activities that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set of assets and activities are not required if market participants can acquire the set of assets and activities and continue to produce outputs. In addition, the Company also performs a screen test to determine when a set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set of assets is not a business. If the set of assets and activities is not considered a business, it is accounted for as an asset acquisition using a cost accumulation model. In the cost accumulation model, the cost of the acquisition, including certain transaction costs, is allocated to the assets acquired on the basis of relative fair values. The Company includes the results of operations of acquired businesses beginning on the respective acquisition dates. In accordance with ASC 805, the Company allocates the purchase price of an acquired business to its identifiable assets and liabilities based on the estimated fair values using the acquisition method. The excess of the purchase price over the amount allocated to the assets and liabilities, if any, is recorded as goodwill. The excess value of the net identifiable assets and liabilities acquired over the purchase price of an acquired business is recorded as a bargain purchase gain. The Company uses all available information to estimate fair values of identifiable intangible assets and property acquired. In making these determinations, the Company may engage an independent third-party valuation specialist to assist with the valuation of certain intangible assets, notes payable, and tax amortization benefits. The consideration for certain of our acquisitions may include liability classified contingent consideration, which is determined based on formulas stated in the applicable purchase agreements. The amount to be paid under these arrangements is based on certain financial performance measures subsequent to the acquisitions. The contingent consideration included in the purchase price is measured at fair value on the date of the acquisition. The liabilities are remeasured at fair value on each reporting date, with changes in the fair value reflected in operating expenses on our Consolidated Statements of Operations. For business acquisitions, the Company recognizes the fair value of goodwill and other acquired intangible assets, and estimated contingent consideration at the acquisition date as part of purchase price. This fair value measurement is based on unobservable (Level 3) inputs. Recent Accounting Pronouncements The Company adopted ASU No. 2016-15, Statement of Cash Flows ("ASC 320") Classification of Certain Cash Receipts and Cash Payments on January 1, 2019. The adoption of this new guidance did not have a material impact on our Consolidated Financial Statements and related disclosures. 102 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The Company adopted ASU No., 2016-18, Statement of Cash Flows ("ASC 320") Restricted Cash on January 1, 2019. The adoption of this new guidance did not have a material impact on our Consolidated Financial Statements and related disclosures. The Company adopted ASU No. 2017-01, Business Combinations ("ASC 805") Classifying the Definition of a Business on January 1, 2019. The adoption of this new guidance did not have a material impact on our Consolidated Financial Statements and related disclosures. The Company adopted ASU No. 2017-04, Intangibles—Goodwill and Other (“ASC 350”) Simplifying the Test for Goodwill Impairment on January 1, 2020. The adoption of this new guidance did not have a material impact on our Consolidated Financial Statements and related disclosures. The Company adopted ASU No. 2018-13, Fair Value Measurement (“ASC 820”): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement on January 1, 2020. The adoption of this new guidance did not have a material impact on our Consolidated Financial Statements and related disclosures. The Company adopted ASU No. 2019-12, Income Taxes ("Topic 740"): Disclosure Framework - Simplifying the Accounting for Income Taxes , on January 1, 2021, which simplified the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying and amending existing guidance. The adoption of this standard did not have a material impact on our financial statements. Pronouncements not yet adopted In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 provides amendments to ASC 326, Financial Instruments - Credit Losses , which replaces the incurred loss impairment model with a current expected credit loss (“CECL”) model. CECL requires a company to estimate lifetime expected credit losses based on relevant information about historical events, current conditions and reasonable and supportable forecasts. The guidance must be applied using the modified retrospective adoption method on January 1, 2023, with early adoption permitted. Note 3. Acquisitions Five Points Capital On April 1, 2020 , we completed the acquisition of 100 % of the capital stock of Five Points, an independent private equity manager focused exclusively on the U.S. lower middle market. The transaction was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805. The following is a summary of consideration paid: Fair Value Cash $ 46,751 Preferred stock 20,100 Total purchase consideration $ 66,851 Consideration paid in the transaction consisted of both cash and equity. See Note 18 for additional information on the preferred stock issued in the connection with the acquisition of Five Points. In connection with the acquisition, the Company incurred a total of $ 2.3 million of acquisition-related expenses. Total acquisition-related expenses were $ 0.0 million, $ 1.1 million and $ 1.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. These costs are included in professional fees on our Consolidated Statements of Operations. 103 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The following table presents the fair value of the net assets acquired as of the acquisition date: Fair Value ASSETS Cash and cash equivalents $ 111 Accounts receivable 295 Due from related parties 27 Prepaid expenses and other 13 Property and equipment 87 Right-of-use assets 339 Intangible assets 23,960 Total assets acquired $ 24,832 LIABILITIES Accounts payable $ 358 Accrued expenses 390 Long-term lease obligation 339 Deferred tax liability 5,524 Total liabilities assumed $ 6,611 Net identifiable assets acquired $ 18,221 Goodwill 48,630 Net assets acquired $ 66,851 The following table presents the fair value of identifiable intangible assets acquired: Weighted- Average Amortization Fair Value Period Value of management contracts $ 19,900 10 Value of trade name 4,060 10 Total identifiable intangible assets $ 23,960 Goodwill The goodwill recorded as part of the acquisition includes benefits that management believes will result from the acquisition, including expanding the Company’s product offering into private credit. The goodwill is no t expected to be deductible for tax purposes. Acquisition of TrueBridge Capital On October 2, 2020 , the Company completed the acquisition of 100 % of the issued and outstanding membership interests of TrueBridge for a total consideration of $ 189.1 million, which includes cash, contingent consideration and preferred stock of P10 Intermediate. TrueBridge is a leading venture capital firm that invests in both venture funds and directly in select venture-backed companies. The transaction was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805. The following is a summary of consideration paid: Fair Value Cash $ 94,216 Contingent consideration 572 Preferred stock 94,350 Total purchase consideration $ 189,138 104 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) A net cash amount of $ 89.5 million was financed through an amendment to the term loan under the credit and guarantee facility with HPS Investment Partners, LLC (“HPS”), an unrelated party. The additional draw had the same terms as the existing Facility including the maturity date. See Note 18 for additional information on the preferred stock issued in the connection with the acquisition of TrueBridge. Included in total consideration is $ 0.6 million of contingent consideration, representing the fair value of expected future payments on the date of the acquisition. The amount ultimately owed to the sellers is based on achieving specific fundraising targets, and all amounts under this arrangement were paid by October 2021. For the year ended December 31, 2021 , a total of $ 0.7 million was paid to the sellers of Truebridge and $ 0.1 million in expense was recognized in other income on the Consolidated Statements of Operations for the change in estimated value of the contingent consideration. In connection with the acquisition, the Company incurred a total of $ 1.7 million of acquisition-related expenses. Total acquisition-related expenses were $ 0 , $ 1.7 million and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively. These costs are included in professional fees on our Consolidated Statements of Operations. The following table presents the fair value of the net assets acquired as of the acquisition date: Fair Value ASSETS Cash and cash equivalents $ 6,537 Accounts receivable 14 Due from related parties 55 Prepaid expenses and other 60 Property and equipment 1,061 Right-of-use assets 1,627 Intangible assets 43,600 Total assets acquired $ 52,954 LIABILITIES Accounts payable $ 20 Accrued expenses 323 Deferred revenues 6,491 Long-term lease obligation 2,031 Deferred tax liability 5,518 Total liabilities assumed $ 14,383 Net identifiable assets acquired $ 38,571 Goodwill 150,567 Net assets acquired $ 189,138 The following table presents the fair value of identifiable intangible assets acquired: Weighted- Average Amortization Fair Value Period Value of management contracts $ 34,100 10 Value of trade name $ 7,300 10 Value of technology 2,200 4 Total identifiable intangible assets $ 43,600 Goodwill The goodwill recorded as part of the acquisition includes the expected benefits that management believes will result from the acquisition, including the Company’s build out of its investment product offering. Approximately $ 73.7 million of goodwill is expected to be deductible for tax purposes. 105 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Acquisition of Enhanced On December 14, 2020 , the Company completed the acquisition of 100 % of the equity interest in ECG and a non-controlling interest in ECP’s outstanding equity, comprised of a 49% voting interest and a 50% economic interest, for total consideration of $ 111.0 million. The consideration included cash, estimated working capital adjustments and preferred stock of P10 Intermediate. ECG is an alternative asset manager and provider of tax credit transaction and consulting services focused on underserved areas and other socially responsible end markets such as renewable energy (impact investing). The alternative asset management business includes providing management, transaction, and consulting services to various entities which have historically been wholly owned by subsidiaries and affiliates of ECG. ECP’s primary business is to participate in various state sponsored premium tax credit investment programs through debt, equity, and equity-related investments. The acquisition of ECG was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805, while ECP is reported as an unconsolidated investee of P10 and accounted for under the equity method of accounting. Upon the completion of the acquisitions, certain agreements contemplated in the Securities Purchase Agreement became effective immediately upon the closing of the acquisitions. The allocation of the consideration paid for the assets acquired and liabilities assumed takes into consideration the fact that these agreements occurred contemporaneously with the closing of the acquisitions. Prior to and through the date of the acquisition by the Company, ECG had certain consolidated subsidiaries and funds whose primary activities consisted of issuing qualified debt or equity instruments to tax credit investors in order to make investments in qualified businesses, which are referred to as the “Permanent Capital Subsidiaries.” Pursuant to a Reorganization Agreement, upon the closing of P10’s acquisition of ECG, the Permanent Capital Subsidiaries were contributed by ECG to Enhanced Permanent Capital, LLC (“Enhanced PC”), a newly formed entity. In exchange for this contribution of the Permanent Capital Subsidiaries, ECG obtained a non-controlling equity interest in Enhanced PC. The ownership in Enhanced PC was evaluated by management, and it was determined to be a variable interest. However, ECG was concluded to not be the primary beneficiary of Enhanced PC and, accordingly, Enhanced PC is not consolidated by ECG. Rather, the interest in Enhanced PC is reflected as an equity method investment by ECG. In addition to the Reorganization Agreement, see Note 13 for information on the Advisory Agreement and Administrative Services Agreement. The acquisition of the equity interests in ECG and ECP were negotiated simultaneously for a single purchase price. The following tables illustrate the consideration paid for Enhanced, and the allocation of the purchase price to the acquired assets and assumed liabilities. Fair Value Cash $ 82,596 Estimated post-closing working capital adjustment 1,519 Preferred stock 26,904 Total purchase consideration $ 111,019 A total of $ 66.6 million of the cash consideration was financed through an amendment to the term loan under the Facility with HPS. The additional draw had the same terms as the existing Facility, including the maturity date. See Note 18 for additional information on the preferred stock issued in the connection with the acquisition of Enhanced. In connection with the acquisition, the Company incurred a total of $ 3.7 million of acquisition-related expenses. Total acquisition-related expenses were $ 0.1 million, $ 3.6 million and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively. These costs are included in professional fees on our Consolidated Statements of Operations. 106 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The following table presents the fair value of the net assets acquired as of the acquisition date: Fair Value ASSETS Cash and cash equivalents $ 2,752 Restricted cash 254 Accounts receivable 3,424 Due from related parties 257 Prepaid expenses and other assets 2,099 Investment in unconsolidated subsidiaries 2,158 Intangible assets 36,820 Total assets acquired $ 47,764 LIABILITIES Accrued expenses $ 551 Other liabilities 288 Deferred revenues 2,110 Due to related parties 2,059 Debt obligations 1,693 Deferred tax liability 2,551 Total liabilities assumed $ 9,252 Net identifiable assets acquired $ 38,512 Goodwill 72,507 Net assets acquired $ 111,019 The following table presents the fair value of identifiable intangible assets acquired: Weighted- Average Amortization Fair Value Period Value of management and advisory contracts $ 30,820 12 Value of trade name 6,000 10 Total identifiable intangible assets $ 36,820 Goodwill The goodwill recorded as part of the acquisition includes the expected benefits that management believes will result from the acquisition, including the Company’s build out of its investment product offering. Approximately $ 18.7 million of goodwill is expected to be deductible for tax purposes. Acquisition of Bonaccord On September 30, 2021 , the Company completed the purchase of Bonaccord for total consideration of $ 56.4 million, which includes cash and contingent consideration. Bonaccord is engaged in the business of acquiring minority interests in alternative asset mangement companies focused on private market strategies which may include private equity, private client, real estate, and real asset strategies. The acquisition was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805. The following is a summary of consideration paid: Fair Value Cash $ 38,927 Contingent consideration 17,435 Total purchase consideration $ 56,362 107 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) A total of $ 35.0 million of the cash consideration was financed through an amendment to the term loan under the Facility with HPS. The additional draw had the same terms as the existing Facility, including the maturity date. Included in total consideration is $ 17.4 million of contingent consideration, representing the fair value of expected future payments on the date of the acquisition. The amount ultimately owed to the sellers is based on achieving specific fundraising targets and any amounts paid to the sellers will be paid by October 2027, at which point the contingent consideration expires. Total payment ranges from $ 0 to $ 20.0 million. The fair value was derived from an analysis of the option pricing model and the scenario based model. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the liability may differ materially from the current estimate. As of December 31, 2021 , the estimated fair value of the remaining contingent consideration totaled $ 19.1 million, with the increase during the year driven primarily by the changing of the Company's borrowing rate due to the debt refinancing. See Note 12 for more details. A total of $ 0 was paid to the sellers of Bonaccord and $ 2.1 million in expense was recognized in general, administrative and other on the Consolidated Statements of Operations for the change in estimated value of the contingent consideration in the year ended December 31, 2021. At the time of the acquisition, the Company entered into a Notice of Restricted Stock Units with certain employees, for 1,113,637 Restricted Stock Units ("Bonaccord Units"), to be allocated and granted to employees at a later date for meeting certain performance metrics. The Bonaccord Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until it has become vested. As of December 31, 2021, no Bonaccord Units have been allocated to specific employees or vested and no expense has been recorded in the Consolidated Statements of Operations. In connection with the acquisition, the Company incurred a total of $ 0.5 million of acquisition-related expenses. Total acquisition-related expenses were $ 0.5 million, $ 0 and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively. These costs are included in professional fees on the Consolidated Statement of Operations. Bonaccord's revenues for the period from the acquisition date to December 31, 2021 were $ 2.6 million which is 1.7 % of the $ 150.5 million of total revenues for the Company for the year. The acquisition date fair value of certain assets and liabilities, including intangible assets acquired and related weighted average expected lives are provisional and subject to revision within one year of the acquisition date. As such, our estimates of fair values are pending finalization, which may result in adjustments to goodwill. The following table presents the provisional fair value of the net assets acquired as of the acquisition date: Fair Value ASSETS Prepaid expenses and other assets 9 Investment in partnership 1,396 Intangible assets 12,940 Total assets acquired $ 14,345 LIABILITIES Accrued expenses $ 919 Total liabilities assumed $ 919 Net identifiable assets acquired $ 13,426 Goodwill 42,936 Net assets acquired $ 56,362 108 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The following table presents the provisional fair value of the identifiable intangible assets acquired: Weighted- Average Amortization Fair Value Period Value of management and advisory contracts $ 9,450 8 Value of trade name 3,490 10 Total identifiable intangible assets $ 12,940 In connection with the acquisition, Bonaccord assumed a Strategic Alliance Agreement ("SAA"), providing a third-party the right to receive 15 % of the net management fee earnings, which includes the management fees minus applicable expenses, for Bonaccord Fund I ("Fund I"), paid quarterly, in exchange for funding certain amounts of capital commitments to the fund. See Note 5 for more information. Goodwill The goodwill recorded as part of the acquisition includes the expected benefits that management believes will result from the acquisition, including the Company’s build out of its investment product offering. Approximately $ 42.9 million of goodwill is expected to be deductible for tax purposes. Acquisition of Hark On September 30, 2021 , the Company completed the purchase of Hark for total consideration of $ 7.2 million, which includes $ 5.0 million of cash and $ 2.2 million of estimated contingent consideration, with the fair value based on the scenario based method. The acquisition was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805. Hark is engaged in the business of making loans to portfolio companies that are owned or controlled by financial sponsors, such as private equity funds or venture capital funds, and which do not meet traditional direct lending underwriting criteria, but where the repayment of the loan by the portfolio company is guaranteed by its financial sponsor. T he provisional fair value consisted of $ 2.5 million in net assets and $ 4.7 million in goodwill. At the time of the acquisition, the Company entered into a Notice of Restricted Stock Units with an employee, which grants 95,455 Restricted Stock Units ("Hark Units") for meeting a certain performance metric. The Hark Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until it has become vested. As of December 31, 2021, no Hark Units have vested and no expense has been recorded in the Consolidated Statements of Operations as we have not determined that the achievement of the performance metric is probable yet. Identifiable Intangible Assets The fair value of management and advisory contracts acquired were estimated using the excess earnings method. Significant inputs to the valuation model include existing revenue, estimates of expenses and contributory asset charges, the economic life of the contracts and a discount rate based on a weighted average cost of capital. The fair value of trade names acquired were estimated using the relief from royalty method. Significant inputs to the valuation model include estimates of existing and future revenue, estimated royalty rate, economic life and a discount rate based on a weighted average cost of capital. The fair value of technology acquired was estimated using the relief from royalty method. Significant inputs to the valuation model include a royalty rate, an estimated life and a discount rate. The management and advisory contracts, trade names and the acquired technology all have a finite useful life. The carrying value of the management fund and advisory contracts and trade names will be amortized in line with the pattern in which the economic benefits arise and are reviewed at least annually for indicators of impairment in value that is other than temporary. The technology will be amortized on a straight-line basis. 109 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Pro-forma Financial Information Current Year Acquisition: The following unaudited pro forma condensed consolidated results of operations of the Company assumes the acquisition of Bonaccord was completed on January 1, 2020: For the Year Ended December 31, 2021 2020 Revenue $ 169,728 $ 74,864 Net income attributable to P10 12,834 19,915 Pro-forma adjustments include revenue and net income (loss) of the acquired business for each period. Other pro forma adjustments include intangible amortization expense and interest expense based on debt issued in connection with the acquisition as if the acquisition were completed on January 1, 2020. Additionally, this does not reflect any pro forma adjustments related to the acquisitions which occurred in 2020. Prior Year Acquisitions: The following unaudited pro forma condensed consolidated results of operations of the Company assumes the acquisitions of Five Points, TrueBridge and Enhanced were completed on January 1, 2019: For the Year Ended December 31, 2020 2019 Revenue $ 118,978 $ 111,813 Net income attributable to P10 14,269 4,159 Pro-forma adjustments include revenue and net income (loss) of the acquired business for each period. Other pro forma adjustments include intangible amortization expense and interest expense based on debt issued or repaid in connection with the acquisitions as if the acquisitions were completed on January 1, 2019 . The pro forma adjustments also give effect to the reorganization of Enhanced and formation of Enhanced Permanent Capital, as well as the impacts of the advisory services agreement as further described at Note 13. Note 4. Revenue The following presents revenues disaggregated by product offering: For the Year Ended December 31, 2021 2020 2019 Management and advisory fees $ 149,424 $ 66,125 $ 42,209 Subscriptions 641 671 788 Consulting agreements and referral fees 150 55 1,479 Other revenue 319 517 426 Total revenues $ 150,534 $ 67,368 $ 44,902 Note 5. Strategic Alliance Expense In connection with the acquisition, Bonaccord assumed a Strategic Alliance Agreement ("SAA"). This SAA provides the third-party the right to receive 15 % of the net management fee earnings, which includes the management fees minus applicable expenses, for Bonaccord Fund I ("Fund I"), paid quarterly, in exchange for funding certain amounts of capital commitments to the fund. Net management fee earnings the third-party has the right to receive is based on the total capital committed. 110 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Within 60 days following the final closing of the next fund, Bonaccord Fund II ("Fund II"), the third-party has the opportunity to acquire equity interests in Bonaccord based on the amount of commitment made to subsequent Funds II and III that ranges from 0.1 %- 9.9 % of equity in Bonaccord. If within 60 days of the final closing of Funds II and III, the third-party has not met specific equity commitments in the SAA, Bonaccord may elect to repurchase the equity interests at fair market value. In addition to this SAA, there is another agreement with a third-party, similar to a placement fee arrangement, whereby they will receive 5 % of net management fee revenues for Fund I. This expense is reported on the Consolidated Statements of Operations as strategic alliance expense in operating expenses. For the year ended December 31, 2021, strategic alliance expense reported was $ 0.2 million. In the years ended December 31, 2020 and December 31, 2019, there was no strategic alliance expense. Note 6. Note Receivable The Company's note receivable consists of an Advance Agreement and Secured Promissory Note that was executed on September 30, 2021 between the Company and BCP Partners Holdings, LP ("BCP") to lend funds to certain employees to be used to pay GP commitments to certain funds managed by Bonaccord. This agreement provides for a note to BCP for $ 5.0 million, of which $ 2.6 million was drawn as of December 31, 2021 with a maturity date of September 30, 2031 . The note will earn interest at the greater of (i) the applicable federal rate that must be charged to avoid imputation of interest under Section 1274(d) of the code and (ii) 5.5 %. Interest will be paid on December 31st of each year commencing December 31, 2021, with any unpaid accrued interest being capitalized and added to the outstanding principal balance. Principal payments will be made periodically from mandatory payments from available cash flows at BCP. As of December 31, 2021 and December 31, 2020, the balance was $ 2.6 million and $ 0 , respectively. The Company recognized interest income of $ 0.1 million, $ 0.0 million and $ 0.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. Note 7. Variable Interest Entities Consolidated VIEs The Company consolidates certain VIEs for which it is the primary beneficiary. VIEs consist of certain operating entities not wholly owned by the Company and include Holdco, RCP 2, RCP 3, TrueBridge, Hark and Bonaccord. See Note 2 for more information on the Company’s accounting policies related to the consolidation of VIEs. The assets of the consolidated VIEs totaled $ 413.2 million and $ 350.9 million as of December 31, 2021 and December 31, 2020 , respectively. The liabilities of the consolidated VIEs totaled $ 53.6 million and $ 284.1 million as of December 31, 2021 and December 31, 2020, respectively. The assets of our consolidated VIE’s are owned by those entities and not generally available to satisfy P10’s obligations, and the liabilities of our consolidated VIE’s are obligations of those entities and their creditors do not generally have recourse to the assets of P10. Unconsolidated VIEs Through its subsidiary, ECG, the Company holds variable interests in the form of direct equity interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary. The Company's maximum exposure to loss is limited to the potential loss of assets recognized by the Company relating to these unconsolidated entities. Note 8. Investment in Unconsolidated Subsidiaries The Company’s investment in unconsolidated subsidiaries consist of equity method investments primarily related to ECG’s tax credit finance and asset management activities. As of December 31, 2021 , investment in unconsolidated subsidiaries totaled $ 1.8 million, of which $ 0.2 million related to ECG’s tax credit finance businesses and $ 1.6 million related to ECG’s asset management businesses. As of December 31, 2020 , investment in unconsolidated subsidiaries totaled $ 2.2 million, of which $ 2.0 million related to ECG’s asset management businesses and $ 0.2 million related to ECG’s tax credit finance businesses. Asset Management ECG manages some of its alternative asset management funds through various unconsolidated subsidiaries and records these investments under the equity method of accounting. ECG recorded its share of income in the amount of $ 1.1 million 111 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) for the year ended December 31, 2021 and $ 0 for the year ended December 31, 2020. For the year ended December 31, 2021 , ECG made $ 0 capital contributions and received distributions of $ 1.4 million. For the year ended December 31, 2020, ECG made $ 0 capital contributions and received $ 0 in distributions. Tax Credit Finance ECG provides a wide range of tax credit transactions and consulting services through various entities which are wholly owned subsidiaries of Enhanced Tax Credit Finance, LLC (“ETCF”), which is a wholly owned subsidiary of ECG. Some of these subsidiaries own nominal interests, typically under 1.0%, in various VIEs and record these investments under the measurement alternative described in Note 2 above. For the years ended December 31, 2021 and December 31, 2020, ECG made $ 0 of capital contributions and received distributions of $ 0 . Note 9. Property and Equipment Property and equipment consist of the following: As of As of December 31, December 31, 2021 2020 Computers and purchased software $ 387 $ 281 Furniture and fixtures 461 449 Leasehold improvements 601 595 Other 3 — $ 1,452 $ 1,325 Less: accumulated depreciation ( 471 ) ( 201 ) Total property and equipment, net $ 981 $ 1,124 Note 10. Goodwill and Intangibles Changes in goodwill for the years ended December 31, 2021 and December 31, 2020 are as follows: Balance at December 31, 2019 $ 97,323 Purchase price adjustment - Increase from acquisitions 272,659 Balance at December 31, 2020 $ 369,982 Purchase price adjustment 1,103 Increase from acquisitions 47,616 Balance at December 31, 2021 $ 418,701 Due to new information that became available during the year ended December 31, 2021 and a revision to the Company's outside basis and intangibles from finalizing the tax return, there was an adjustment to Enhanced that resulted in a purchase price adjustment. This was the result of using an estimate as of December 31, 2020 and resulted in a $ 1.3 million adjustment to the purchase price. Since this was completed during the measurement period, the adjustment was recorded as an adjustment to goodwill. A measurement period adjustment was also recorded related to contingent consideration associated with the Bonaccord acquisition resulting in an increase in goodwill of $0.5 million. 112 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Intangibles consists of the following: As of December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 17,350 $ — $ 17,350 Technology 30 — 30 Total indefinite-lived intangible assets 17,380 — 17,380 Finite-lived intangible assets: Trade names 21,440 ( 1,785 ) 19,655 Management and advisory contracts 151,166 ( 60,934 ) 90,232 Technology 8,160 ( 6,639 ) 1,521 Total finite-lived intangible assets 180,766 ( 69,358 ) 111,408 Total intangible assets $ 198,146 $ ( 69,358 ) $ 128,788 As of December 31, 2020 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trade names $ 17,350 $ — $ 17,350 Total indefinite-lived intangible assets 17,350 — 17,350 Finite-lived intangible assets: Trade names 17,360 ( 368 ) 16,992 Management and advisory contracts 139,796 ( 33,967 ) 105,829 Technology 8,160 ( 4,593 ) 3,567 Total finite-lived intangible assets 165,316 ( 38,928 ) 126,388 Total intangible assets $ 182,666 $ ( 38,928 ) $ 143,738 Management and advisory contracts and finite lived trade names are amortized over 7 - 16 years and are being amortized in line with pattern in which the economic benefits arise. Technology is amortized on a straight-line basis over 4 years. The amortization expense for each of the next five years and thereafter are as follows: 2022 $ 24,639 2023 21,155 2024 17,590 2025 13,807 2026 10,878 Thereafter 23,339 Total amortization $ 111,408 113 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Note 11. Fair Value Measurements The Company measures certain liabilities at fair value on a recurring basis. The following tables provide details regarding the classification of these liabilities within the fair value hierarchy as of the dates presented: As of December 31, 2021 Level I Level II Level III Total Liabilities Contingent consideration obligation $ - $ - $ 22,963 $ 22,963 Total liabilities $ - $ - $ 22,963 $ 22,963 As of December 31, 2020 Level I Level II Level III Total Liabilities Contingent consideration obligation $ - $ - $ 593 $ 593 Total liabilities $ - $ - $ 593 $ 593 For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the years ended December 31, 2021 and 2020. The changes in the fair value of Level III financial instruments are set forth below: Contingent Consideration Liability Year Ended December 31, 2021 2020 Balance, beginning of year: $ 593 $ - Additions 19,625 572 Change in fair value 3,472 21 Settlements ( 727 ) - Balance, end of year: $ 22,963 $ 593 The fair value of the contingent consideration liability represents the fair value of future payments of certain performance targets. The assumptions used in the analysis are inherently subjective; therefore, the ultimate amount of the contingent consideration liability primarily relate to the discount rates applied to the expected future payments of obligations. The contingent consideration liability is included in contingent consideration on the Consolidated Balance Sheets. Changes in the fair value of the liability are included in contingent consideration expense on the Consolidated Statements of Operations. 114 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Note 12. Debt Obligations Debt obligations consists of the following: As of As of December 31, December 31, 2021 2020 Gross revolving credit facility state tax credits $ — $ 1,533 Debt issuance costs ( 8 ) ( 25 ) Revolving credit facility state tax credits, net $ ( 8 ) $ 1,508 Gross notes payable to sellers $ - $ 41,064 Less debt discount - ( 9,205 ) Notes payable to sellers, net $ - $ 31,859 Gross credit and guaranty facility $ - $ 261,683 Debt issuance costs - ( 4,995 ) Credit and guaranty facility, net $ - $ 256,688 Revolver facility $ 90,900 $ - Debt issuance costs ( 233 ) - Revolver facility, net $ 90,667 $ - Term Loan $ 125,000 $ - Debt issuance costs ( 3,163 ) - Term loan, net $ 121,837 $ - Total debt obligations $ 212,496 $ 290,055 Refinancing On December 22, 2021, the Company extinguished its current debt outstanding with HPS, as described below in the Credit and Guaranty Facility section and simultaneously entered into a new credit agreement with JP Morgan Chase Bank, N.A. ("JP Morgan") in order to gain more favorable interest terms. The Company used the proceeds from the new credit agreement with JP Morgan not only to repay the outstanding balance with HPS but also to repay the notes payable to sellers as described below in the Notes Payable to Sellers section. Revolving Credit Facility State Tax Credits Enhanced State Tax Credit Fund III, LLC, a subsidiary of ECG, has a $ 10 million revolving credit facility with a regional financial institution restricted solely for the purchase of allocable state tax credits from various state tax credit incentive programs. The facility bears interest at 0.25 % above the Prime Rate and matures on June 15, 2022 . As of December 31, 2021 and December 31, 2020 , the credit facility had an outstanding balance of $ 0.0 million and $ 1.5 million, respectively, and is reported net of unamortized debt issuance costs on our Consolidated Balance Sheets. As of December 31, 2021 and December 31, 2020 , the Company’s investment in allocable state tax credits was $ 0.0 million and $ 1.5 million. Notes Payable to Sellers On October 5, 2017, the Company issued Secured Promissory Notes Payable (“2017 Seller Notes”) in the amount of $ 81.3 million to the owners of RCP 2 in connection with the acquisition of that entity. The 2017 Seller Notes mature on January 15, 2025 . The 2017 Seller Notes were recorded at their discounted fair value in the amount of $ 78.7 million. Non-cash interest expense was recorded on a periodic basis increasing the 2017 Seller Notes to their gross value. On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the 2017 Sellers Notes. As of December 31, 2021 and December 31, 2020 , the gross value of the 2017 Seller Notes was $ 0.0 million and $ 6.4 million. On January 3, 2018, the Company issued Secured Promissory Notes Payable (“2018 Seller Notes”) in the amount of $ 22.1 million to the owners of RCP 3 in connection with the acquisition of that entity. The 2018 Seller Notes mature on January 15, 2025 . The 2018 Seller Notes were recorded at their discounted fair value in the amount of $ 21.2 million. 115 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Noncash interest expense was recorded on a periodic basis increasing the 2018 Seller Notes to their gross value. On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the 2018 Sellers Notes. As of December 31, 2021 and December 31, 2020 , the gross value of the 2018 Seller Notes was $ 0.0 million and $ 3.0 million. On January 3, 2018, the Company issued tax amortization benefits in the amount of $ 48.4 million (“TAB Payments”) to the owners of RCP 3 in connection with the acquisition of that entity. The TAB Payments are non-interest bearing and will be paid in equal annual installments beginning April 15, 2023 . The TAB Payments mature on April 15, 2037 . The TAB Payments were recorded at their discounted fair value in the amount of $ 28.9 million. Non-cash interest expense is recorded on a periodic basis increasing the TAB Payments to their gross value. On April 1, 2020, the holders of the TAB Payments contributed $ 16.8 million of their TAB Payments to P10 Intermediate in exchange for receiving 3.3 million shares of Series C preferred stock. The discounted fair value of the TAB Payments received was $ 10.0 million on the date of the Five Points acquisition, April 1, 2020. See Note 18 for additional information. On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the TAB Payments. As of December 31, 2021 and December 31, 2020 , the gross value of the 2018 TAB Payments was $ 0.0 million and $ 31.7 million. During the years ended December 31, 2021, 2020 and 2019, we recorded combined interest expense on the 2018 Seller Notes and 2017 Seller Notes in the amount of $ 0.0 million, $ 0.0 million and $ 0.6 million, respectively. During the year ended December 31, 2021, we recorded $ 9.2 million in interest expense related to the TAB Payments of which $8.4 million related to the debt extinguishment. For the years ended December 31, 2020 and December 31, 2019, P10 recorded $ 1.0 million and $ 1.3 million, respectively, in interest expense related to the TAB Payments. The 2017 Seller Notes, the 2018 Seller Notes and the TAB Payments are collectively referred to as “Notes payable to sellers” on our Consolidated Financial Statements. Credit and Guaranty Facility The Company’s subsidiary, Holdco, entered into the Facility with HPS as administrative agent and collateral agent on October 7, 2017. The Facility initially provided for a $ 130.0 million senior secured credit facility in order to refinance the existing debt obligations of RCP Advisors and provide for the financing to repay the Seller Notes due resulting from the acquisition of RCP Advisors. The Facility provided for a $ 125 million five-year term, subject to certain EBITDA levels and conditions, and a $ 5 million one-year line of credit. The line of credit was repaid and subsequently expired during 2018. Holdco was permitted to draw up to $ 125 million in aggregate on the term loan in tranches through July 31, 2019 . On October 2, 2020 and December 14, 2020, in connection with the acquisitions of TrueBridge and Enhanced, the term loan under the Facility was amended adding an additional $ 91.4 million and $ 68.0 million to the Facility, respectively. On September 30, 2021, in connection with the acquisition of Bonaccord, the term loan under the Facility was amended adding an additional $ 35.0 million to the Facility. On October 28, 2021, a payment of $ 88.6 million was made, which included an optional repayment of $ 86.8 million, required prepayment penalty of $ 1.2 million, and an accrued interest payment of $ 0.6 million. On December 22, 2021, the remaining principal balance of $ 200 million was repaid using the proceeds of the new credit facility with JP Morgan. In accordance with the Facility, the Company also paid the remaining accrued interest balance of $ 2.1 million and an early extinguishment fee of $ 3.7 million. Revolving Credit Facility and Term Loan On December 22, 2021, the Company entered into a new credit agreement (the "Credit Agreement") with JPMorgan Chase Bank, N.A., in its capacity as administrative agent and collateral agent, JP Morgan Chase Bank, N.A. and Texas 116 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Capital Bank, as joint lead arrangers and joint bookrunners, and the other loan parties party thereto, with the intention of using the proceeds to repay the Company's remaining debt obligations related to the HPS Facility and the Notes Payable to Sellers. The Credit Agreement consists of two facilities. The first is a revolving credit facility with an available balance of $ 125 million (the "Revolver Facility"). The second is a term loan for $ 125 million (the "Term Loan"). Both facilities are "Term SOFR Loans" meaning loans bearing interest based upon the "Adjusted Term SOFR Rate". The Adjusted Term SOFR Rate is SOFR rate at the date of election, plus 0.10 %. The Company can elect one or three months for the Revolver Facility. The Company elected a six month SOFR rate at the time of draw for the term loan and a one month SOFR rate for the Revolver Facility at the time of draw. Principal is contractually repaid at a rate of 1.25 % on the term loan quarterly effective March 31, 2023. The Revolving Credit Facility has no contractual principal repayments until maturity, which is December 22, 2025 for both facilities. The Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum leverage ratio. As of December 31, 2021, P10 was in compliance of its financial covenants required under the facility. As of December 31, 2021 , the balance drawn on the revolving credit facility is $ 90.9 million and on the term loan, the balance is $ 125.0 million. There was no balance as of December 31, 2020. Debt Payable Future principal maturities of debt as of December 31, 2021 are as follows: 2022 $ - 2023 6,250 2024 6,250 2025 203,400 $ 215,900 Debt Issuance Costs Debt issuance costs are offset against the Revolving Credit Facility State Tax Credits, the Credit and Guaranty Facility, and the Revolver Facility and Term Loan. Unamortized debt issuance costs for the Credit and Guaranty Facility as of December 31, 2021 and December 31, 2020 were $ 0 and $ 5.0 million, respectively. Unamortized debt issuance costs for the Revolving Credit Facility State Tax Credits as of December 31, 2021 and December 31, 2020 were $ 8 thousand and $ 25 thousand, respectively. Unamortized debt issuance costs for the Revolver Facility and Term Loan as of December 31, 2021 and December 31, 2020 were $ 3.4 million and $ 0 , respectively. Amortization expense related to debt issuance costs totaled $ 6.0 million for the year ended December 31, 2021 , $ 1.1 million for the year ended December 31, 2020 and $ 0.7 million for the year-ended December 31, 2019. Of the $ 6.0 million of amortization expense recognized in 2021, $ 2.1 million relates to the extinguishment of the Credit and Guaranty Facility and is included in loss on extinguishment on the Consolidated Statements of Operations. The remaining $ 3.9 million of amortization expense incurred during the year is reported in interest expense, net on the Consolidated Statements of Operations. During the years ended December 31, 2021 and December 31, 2020 , we recorded $ 4.4 million and $ 4.1 in debt issuance costs, respectively, which is included in debt obligations on the Consolidated Balance Sheets. Of the $ 4.4 million recorded in 2021, $ 3.4 million relates to the Revolver Facility and Term Loan established on December 22, 2021. Note 13. Related Party Transactions Effective May 1, 2018, P10 started paying a monthly services fee of $ 31.7 thousand for administration and consulting services along with a monthly fee of $ 18.8 thousand for certain reimbursable expenses to 210/P10 Acquisition Partners, LLC, which owns approximately 24.9 % of P10. These services were terminated effective December 31, 2020 . P10 paid $ 0 , $ 0.6 million and $ 0.6 million for administrative and consulting services and reimbursable expenses respectively for the years ended December 31, 2021, 2020 and 2019, respectively. 117 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Effective January 1, 2021, the Company entered into a sublease with 210 Capital, LLC, a related party, for office space serving as our corporate headquarters. The monthly rent expense is $ 20.3 thousand, and the lease expires December 31, 2029 . P10 has paid $ 0.2 million, $ 0 and $ 0 in rent to 210 Capital, LLC for the years ended December 31, 2021, 2020 and 2019, respectively. Effective April 1, 2020, P10 Intermediate pays a quarterly management fee of $ 250 thousand to Keystone Capital XXX, LLC, which was the holder of the Series B preferred shares issued by P10 Intermediate in connection with the acquisition of Five Points. As a result of that agreement, P10 Intermediate paid $ 0.8 million, $ 0.5 million and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively. This management fee was terminated effective October 20, 2021 when the Company's redeemable noncontrolling interest was converted to Class B shares associated with the Company's IPO. See Note 18 below for additional information. As described in Note 1, through its subsidiaries, the Company serves as the investment manager to the Funds. Certain expenses incurred by the Funds are paid upfront and are reimbursed from the Funds as permissible per fund agreements. As of December 31, 2021, the total accounts receivable from the Funds totaled $ 2.4 million , of which $ 1.6 million related to reimbursable expenses and $ 0.8 million related to fees earned but not yet received. As of December 31, 2020 , the total accounts receivable from the Funds totaled $ 2.6 million, of which $ 0.6 million related to reimbursable expenses and $ 2.0 million related to fees earned but not yet received. In certain instances, the Company may incur expenses related to specific products that never materialize. Upon the closing of the Company’s acquisition of ECG and ECP, the Advisory Agreement between ECG and Enhanced PC immediately became effective. Under this agreement, ECG will provide advisory services to Enhanced PC related to the assets and operations of the permanent capital subsidiaries owned by Enhanced PC, as contributed by both ECG and ECP, and new projects undertaken by Enhanced PC. In exchange for those services, which commenced on January 1, 2021, ECG will receive advisory fees from Enhanced PC based on a declining fixed fee schedule, initially totaling $ 76.0 million over 7 years . As a result of new projects during 2021, ECG will receive additional advisory fees from Enhanced PC totaling $1.6 million over 7 years , based on a declining fixed fee schedule. This agreement is subject to customary termination provisions. For the years ended December 31, 2021, 2020 and 2019, advisory fees earned or recognized under this agreement were $ 19 million, $ 0 and $ 0 , respectively, and is reported in management and advisory fees on the Consolidated Statement of Operations. As of December 31, 2021 and December 31, 2020, the balance was $9.5 million and $0 and is included in due from related parties on the Consolidated Balance Sheets. Upon the closing of the Company’s acquisition of ECG and ECP, the Administrative Services Agreement between ECG and Enhanced Capital Holdings, Inc. (“ECH”), the entity which holds a controlling equity interest in ECP, immediately became effective. Under this agreement, ECG will pay ECH for the use of their employees to provide services to Enhanced PC at the direction of ECG. The Company recognized $ 8.3 million, $ 0.4 million and $ 0 for the years ended December 31, 2021, 2020 and 2019, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations. On September 10, 2021, Enhanced entered into a strategic partnership with Crossroads Systems, Inc, parent company of Capital Plus Financial ("CPF"), a leading certified development financial institution. Under the terms of the agreement, Enhanced will originate and manage loans across its diverse lines of business including small business loans to women and minority owned businesses, and loans to renewable energy and community development projects. The loans will be held by CPF and provide an advisory fee to Enhanced. The Company recognized $ 0.2 million for the year ended December 31, 2021, which is included in management and advisory fees on the Consolidated Statements of Operations. No revenues were recognized for the years ended December 31, 2020 and 2019. Upon the closing of Bonaccord on September 30, 2021, an Advance Agreement and Secured Promissory Note was signed with BCP, an entity that was formed by employees of the Company. For details, see Note 6. Note 14. Commitments and Contingencies Operating Leases The Company leases office space and various equipment under non-cancelable operating leases, with the longest lease expiring in 2032. These lease agreements provide for various renewal options. Rent expense for the various leased office 118 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) space and equipment was approximately $ 2.0 million for the year ended December 31, 2021 and $ 1.6 million for the year-ended December 31, 2020 , respectively. Rent expense for the year ended December 31, 2021 included a reduction to overall expense of $ 0.3 million for a rent concession as a result of the COVID-19 pandemic. P10 elected the practical expedient, whereby the concessions were treated as a reduction of rent expense during the current period. The following table presents information regarding the Company’s operating leases as of December 31, 2021: Operating lease right-of-use assets $ 14,789 Operating lease liabilities $ 15,700 Cash paid for lease liabilities $ 2,400 Weighted-average remaining lease term (in years) 7.64 Weighted-average discount rate 4.68 % The future contractual lease payments as of December 31, 2021 are as follows: 2022 $ 2,184 2023 2,937 2024 3,184 2025 2,028 2026 1,690 Thereafter 8,061 Total undiscounted lease payments 20,084 Less discount ( 3,425 ) Less construction allowance ( 959 ) Total lease liabilities $ 15,700 Contingencies We may be involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of our business. We evaluated all potentially significant litigation, government investigations, claims or assessments in which we are involved and do not believe that any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any. COVID-19 In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) a global pandemic, which has resulted in significant disruption and uncertainty in the global economic markets. The extent of the operational and financial impact the COVID-19 pandemic may have on the Company has yet to be determined and is dependent on its duration and spread, any related operational restrictions and the overall economy. Currently, we have activated our Business Continuity Plan, which assures the ability for all aspects of our business to continue operating without interruption. COVID-19 has not negatively impacted our business in a material way and our business continuity plan is operating as planned with limited interruptions. We are closely monitoring developments related to COVID-19 and assessing any negative impacts to our business. It is possible that our future results may be adversely affected by slowdowns in fundraising activity and the pace of capital deployment, which could result in delayed or decreased management fees. 119 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Note 15. Income Taxes All the Company's operations are domestic. The components of the provision (benefit) for income taxes attributable to continuing operations are as follows: For the Years Ended December 31, 2021 2020 2019 Current Federal $ 918 $ 2,104 $ - State 152 1,333 407 Total Current $ 1,070 $ 3,437 $ 407 Deferred Federal $ ( 6,727 ) $ ( 28,906 ) ( 11,481 ) State ( 1,413 ) ( 1,368 ) 572 Total Deferred $ ( 8,140 ) $ ( 30,274 ) $ ( 10,909 ) Total provision (benefit) $ ( 7,070 ) $ ( 26,837 ) $ ( 10,502 ) The reconciliation of the Company's federal statutory rate to the effective tax rate is as follows: For the Years Ended December 31, 2021 2020 2019 Federal statutory rate 21.0 % 21.0 % 21.0 % State taxes, net of federal benefit ( 20.8 %) 7.4 % 73.4 % Permanent items and other ( 4.6 %) 2.0 % ( 18.6 %) Expiration of net operating losses and tax credits 70.0 % ( 125.7 %) 0.0 % Valuation allowance increase/decrease ( 247.8 %) 1168.7 % ( 805.1 %) Uncertain tax positions ( 9.8 %) ( 145.2 %) 0.0 % Return to provision adjustments and change in tax rates 0.9 % ( 42.8 %) ( 1.0 %) Effective rate ( 191.1 %) 885.4 % ( 730.3 %) Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse. 120 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Significant components of the Company's deferred taxes are as follows: As of As of December 31, December 31, 2021 2020 Deferred tax assets: Deferred revenue $ 675 $ - Capitalized legal costs 1,249 1,403 Stock compensation 762 423 Interest expense 4,837 1,029 Other 1,307 535 Lease liabilities—operating leases 3,998 1,987 Passthrough activity—investment in partnerships 5,740 3,767 Debt obligations 10,430 11,122 Suspended losses 28 1,591 Contingent liabilities - 153 Net operating losses and credit carryforwards 47,205 52,699 Total deferred tax assets 76,231 74,709 Valuation allowance for deferred tax assets ( 12,857 ) ( 17,102 ) Deferred tax assets, net of valuation allowance $ 63,374 $ 57,607 Deferred tax liabilities: Goodwill ( 8,455 ) ( 5,166 ) Intangibles ( 5,728 ) ( 12,983 ) Investment in partnership ( 147 ) - Property and equipment ( 127 ) ( 158 ) Right of use assets—operating leases ( 3,766 ) ( 1,679 ) Total deferred tax liabilities ( 18,223 ) ( 19,986 ) Deferred tax assets, net $ 45,151 $ 37,621 Due to the uncertainty of realizing the benefits of our domestic favorable tax attributes in future tax returns, as of December 31, 2021, the Company has recorded a valuation allowance against its net deferred tax asset of $ 12.9 million. During the years ended December 31, 2021 and 2020, the valuation allowance decreased by approximately $ 4.2 million and $ 23.2 million, respectively. The 2021 decrease is primarily attributable to the release of valuation allowance on partnership outside basis differences and the expiration of federal net operating losses while the 2020 valuation allowance decrease is due primarily to projected future income from operations, acquisitions and the impact of changes in tax law. Among other factors in 2020, the Company’s long-term management and advisory fee contracts and related projected income serve as the positive evidence to support the release of the valuation allowance. Additionally, the Company’s restructuring undertaken as part of the IPO transaction introduces new sources of taxable income available to absorb existing loss carry forwards. With the exception of certain deferred tax assets, primarily related to built-in capital losses, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. As of December 31, 2021, the Company had federal and post-apportioned state NOL carryforwards of approximately $ 220.4 million and $ 44.0 million, respectively, and research and development credit carryforwards of approximately $ 5.3 million. The federal NOL and credit carryforwards will expire beginning in 2022, if not utilized. $ 24.5 million of federal NOLs will expire in 2022, $ 22.1 million will expire in 2023, and $ 174.0 million will expire between 2024-2039. $ 10.9 million of the state NOLs will expire between 2022 and 2029 and $ 33.1 million will expire between 2030 and 2039. Utilization of the NOLs and tax credits may be subject to substantial annual limitation due to the “change of ownership” provisions of the Internal Revenue Code of 1986. The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization. Tax positions are evaluated utilizing a two-step process. The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position. Once it is 121 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon ultimate settlement. The reconciliation of the Company's unrecognized tax benefits at the beginning and end of the year is as follows: For the Years Ended December 31, 2021 2020 Balance at January 1 $ 7,378 $ 1,966 Additions based on tax positions related to the current year - - Additions for tax positions of prior years ( 361 ) 5,412 Reductions for tax positions of prior years - - Settlements - - Balance at December 31 $ 7,017 $ 7,378 The uncertain tax position is primarily related to transfer pricing, research and development credits and state exposure due to intercompany interest expense. The Company does not anticipate any significant changes to the unrecognized tax benefits within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2021 and 2020, the Company has $ 0.1 million of accrued interest and penalties related to uncertain tax positions. The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. The Company is not currently under audit in any other income tax jurisdictions. We are generally subject to U.S. federal and state tax examinations for all tax years since 1999 due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute. Note 16. Stockholders' Equity Equity-Based Compensation On July 20, 2021, the Board of Directors approved the P10 Holdings, Inc. 2021 Stock Incentive Plan (the "Plan"), which replaced the 2018 Incentive Plan, our previously existing equity compensation plan. The Plan provides for the issuance of 3,000,000 shares available for grant, in addition to those approved in the 2018 Incentive Plan ("2018 Plan"), for a total of 12,000,000 shares. Per the Plan, the Compensation Committee of the Board of Directors may issue equity-based awards including stock appreciation rights, restricted stock units and restricted stock awards. Options previously granted under the 2018 Incentive Plan vest over a period of up to four years and five years , respectively. The term of each option is no more than ten years from the date of grant. When the options are exercised, the Board of Directors has the option of issuing shares of common stock or paying a lump sum cash payment on the exercise date equal to the difference between the common stock’s fair market value on the exercise date and the option price. All future awards will be granted under the Plan, and no additional awards will be granted under the 2018 Plan. 122 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) A summary of stock option activity for the years ended December 31, 2021 and December 31, 2020 is as follows: Weighted Average Contractual Life Aggregate Number of Weighted Average Remaining Intrinsic Value Shares Exercise Price (in years) (whole dollars) Outstanding as of December 31, 2019 3,969,000 $ 1.33 8.25 $ 2,668,000 Granted 1,400,000 2.74 Exercised — — Expired/Forfeited ( 18,200 ) 3.67 Outstanding as of December 31, 2020 5,350,800 $ 1.69 7.75 $ 41,442,250 Exercisable as of December 31, 2020 1,483,445 $ 0.67 6.22 $ 10,363,950 Outstanding as of December 31, 2020 5,350,800 $ 1.69 7.75 $ 41,442,250 Granted 2,224,250 8.54 Exercised — — Expired/Forfeited ( 472,114 ) 3.27 Outstanding as of December 31, 2021 7,102,936 $ 2.60 7.45 $ 115,468,794 Exercisable as of December 31, 2021 1,483,445 $ 0.93 5.76 $ 27,661,727 A total of 327,707 options granted were accelerated associated with the Company's IPO. These options are not considered exercisable as of December 31, 2021 as the shares are subject to lock up until April 20, 2022. The weighted average assumptions used in calculating the fair value of stock options granted during the years ended December 31, 2021 and December 31, 2020 were as follows: For the Years Ended December 31, 2021 2020 Expected life 7.5 (yrs) 7.5 (yrs) Expected volatility 41.65 % 39.49 % Risk-free interest rate 0.82 % 1.11 % Expected dividend yield 0.00 % 0.00 % The Company has granted restricted stock awards ("RSAs") to certain employees. Holders of RSAs have no voting rights and are not eligible to receive dividends or other distributions paid with respect to any RSAs that have not vested. All of the shares currently vest one year from the grant date. Number of Weighted-Average Grant RSAs Date Fair Value Per RSA Outstanding as of December 31, 2020 — $ — Granted 36,033 11.24 Vested — — Forfeited — — Outstanding as of December 31, 2021 36,033 $ 11.24 123 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The Company has granted restricted stock units ("RSUs") to certain employees. Holders of RSUs have no voting rights and are not eligible to receive dividends or other distributions paid with respect to any RSUs that have not vested. All of the shares currently vest one year from the grant date. Number of Weighted-Average Grant RSUs Date Fair Value Per RSU Outstanding as of December 31, 2020 — $ — Granted 59,654 12.74 Vested — — Forfeited — — Outstanding as of December 31, 2021 59,654 $ 12.74 Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits on our Consolidated Statements of Operations. The stock-based compensation expense was $ 3.5 million, $ 0.7 million and $ 0.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Of the $3.5 million of stock-based compensation expense recognized during the year-ended December 31, 2021, $ 1.4 million relates to employees' shares accelerated or converted to cash associated with the Company's IPO. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of December 31, 2021 was $ 9.1 million and is expected to be recognized over a weighted average period of 2.83 years. Any future forfeitures will impact this amount. Note 17. Earnings Per Share The Company presents basic EPS and diluted EPS for our common stock. Basic EPS excludes potential dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if shares of common stock were issued pursuant to our stock-based compensation awards. Additionally, diluted EPS reflects the potential dilution that could occur if convertible preferred shares of P10 Intermediate were converted into common shares of P10 Intermediate. This is only applicable to fiscal year 2020 as the preferred shares of P10 Intermediate converted to Class B common shares effective with the IPO. The following table presents a reconciliation of the numerators and denominators used in the computation of basic and diluted EPS: For the Years Ended December 31, 2021 2020 2019 Numerator: Numerator for earnings per share Numerator for earnings per share assuming dilution $ 9,174 $ 23,086 $ 11,941 Denominator: Denominator for basic calculation—Weighted- average shares 72,660 62,465 62,465 Weighted shares assumed upon exercise of stock options 39,670 2,440 956 Denominator for earnings per share assuming dilution 112,330 64,905 63,421 Earnings per share—basic $ 0.13 $ 0.37 $ 0.19 Earnings per share—diluted $ 0.08 $ 0.36 $ 0.19 The computations of diluted earnings per share excluded options to purchase 0.1 million shares of common stock and 1.2 million restricted stock units for the year ended December 31, 2021 and 0.9 million options and 0 restricted stock units for the year ended December 31, 2020, respectively, because the options were anti-dilutive. See Note 3 for more information related to the restricted stock units. 124 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) Note 18. Redeemable Noncontrolling Interest In connection with the closing of the acquisition of Five Points on April 1, 2020, the Company formed a new subsidiary, P10 Intermediate, which was the acquiring entity of Five Points. On April 1, 2020, P10 Intermediate issued three series (A, B and C) of redeemable convertible preferred shares. On October 2, 2020 and December 14, 2020, P10 Intermediate issued two additional series (D and E) in connection with the acquisitions of TrueBridge and Enhanced. The preferred shares on an as-if-converted basis represent approximately 40.9 % of the aggregate issued and outstanding share capital of P10 Intermediate with P10 owning the remaining 59.1 % through its 100 % ownership of the outstanding common stock of P10 Intermediate. The third-party ownership interest represents a noncontrolling interest in P10 Intermediate, which we have a controlling interest in. There are common features among all three series of preferred shares, including: • The right to convert each share into a common share of P10 Intermediate ( 1 :1 ratio). • The right to require P10 Intermediate to purchase all shares from the preferred shareholder after the 3 rd anniversary of the Five Points acquisition close date unless the Company meets the acquisition threshold (as defined in P10 Intermediate’s Operating Agreement), at which point the right will be extended to the 5 th anniversary. The shares are redeemable at fair market value. • P10 Intermediate has the right to exchange, immediately prior to a qualified public offer (as defined in P10 Intermediate’s Operating Agreement), each preferred share into an ordinary share of the new public entity at the then effective and applicable conversion price. • Each preferred share accrues dividends at the rate of 1 % of the issue price per annum. • In the event of any liquidation, dissolution or winding up of P10 Intermediate, the preferred shareholders have legal rights after the debt holders, but before the notes payable to sellers and common equity holders. • Except for certain additional rights granted to the Series B preferred shareholder, each preferred shareholder has a number of votes equal to the number of shares they hold. The voting rights are identical to the common shareholders. The following is a summary of each individual series and any additional features they have: Series A P10 Intermediate issued to the Five Points sellers 6,700,000 shares of Series A redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 20.1 million. These shares were a part of the purchase consideration in the acquisition of Five Points described in Note 3. Series B P10 Intermediate issued to Keystone Capital XXX, LLC (“Keystone”) 10,000,000 shares of Series B redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 30.0 million. The shares were issued in exchange for cash. The cash received was used as part of the cash consideration in the acquisition of Five Points described in Note 3. In addition to the rights listed above, the Series B preferred shares also feature a call option that gives the shareholder the ability to purchase up to an additional 5,000,000 Series B preferred shares at an exercise price of $ 3 per share; provided the option may only be used for funding the cash purchase price of an acquisition and any related fees. The option may only be exercised with respect to a definitive agreement related to an acquisition and the option expires on the second anniversary of the Five Points acquisition close date. On October 2, 2020, in connection with the acquisition of TrueBridge, Keystone exercised its option purchasing 1,333,333 shares of Series B redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 4.0 million. 125 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) On December 14, 2020, in connection with the acquisition of Enhanced, Keystone exercised its option purchasing 3,333,334 shares of Series B redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 10.0 million. The Series B preferred shareholder is also granted additional protective rights with respect to certain matters. Series C P10 Intermediate issued to the holders of the TAB Payments 3,337,470 shares of Series C redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 10.0 million. The shares were issued in a non-cash exchange for a portion of the TAB Payments held. The gross value of the TAB payments received was $ 16.8 million. Additionally, P10 Intermediate issued to certain key members of Five Points management 333,333 shares of Series C redeemable convertible preferred shares at a price of $ 3.00 per share for an aggregate issuance price of $ 1.0 million. The shares were issued in exchange for cash. Series D P10 Intermediate issued to the TrueBridge sellers 28,590,910 shares of Series D redeemable convertible preferred shares at a price of $ 3.30 per share for an aggregate issuance price of $ 94.4 million. These shares were a part of the purchase consideration in the acquisition of TrueBridge described in Note 3. Additionally, on December 14, 2020, P10 Intermediate issued to certain TrueBridge employees 285,714 shares of Series D redeemable convertible preferred shares at a price of $ 3.50 per share for an aggregate issuance price of $ 1.0 million. The shares were issued in exchange for cash. The Series D preferred shareholders are also granted additional protective rights with respect to certain matters. Series E P10 Intermediate issued to the Enhanced sellers 7,686,925 shares of Series E redeemable convertible preferred shares at a price of $ 3.50 per share for an aggregate issuance price of $ 26.9 million. These shares were a part of the purchase consideration in the acquisition of Enhanced described in Note 3. Additionally, P10 Intermediate issued to certain key members of Enhanced management 100,714 shares of Series E redeemable convertible preferred shares at a price of $ 3.50 per share for an aggregate issuance price of $ 0.4 million. The shares were issued in exchange for cash. Since the preferred shares are redeemable at the option of the holder and the redemption is not solely in the control of the Company, the preferred shares are accounted for as a redeemable noncontrolling interest and classified within temporary equity in the Company’s Consolidated Balance Sheets. The redeemable noncontrolling interest was initially measured at the fair value of the consideration paid. The preferred shares were contractually converted to Class B common shares at the date of IPO, October 20, 2021. Dividends on the preferred shares are recognized as preferred dividends attributable to redeemable non-controlling interest in our Consolidated Statements of Operations. 126 P10, Inc. Notes to Consolidated Financial Statements (dollar amounts stated in thousands) The table below presents the reconciliation of changes in redeemable noncontrolling interests: Balance at December 31, 2019 $ - Issuance of subsidiary preferred stock 197,719 Distribution of preferred dividends attributable to redeemable non-controlling interest - Preferred dividends attributable to redeemable noncontrolling interest 720 Balance at December 31, 2020 $ 198,439 Issuance of subsidiary preferred stock — Distribution of preferred dividends attributable to redeemable non-controlling interest ( 2,313 ) Preferred dividends attributable to redeemable noncontrolling interest 1,593 Conversion of redeemable noncontrolling interest in connection with the IPO ( 197,719 ) Balance at December 31, 2021 $ - Cumulative dividends in arrears on the preferred stock were $ 0.0 million and $ 0.7 million as of December 31, 2021 and December 31, 2020 , respectively. Note 19. Subsequent Events On February 24, 2022, the Company paid down $ 25.0 million of the Revolver Facility. On March 2, 2022, the Company granted to employees 1,276,078 options under the 2021 Incentive Plan. The options vest over five years and expire ten years from the grant date. On March 2, 2022, the Company granted to employees 508,135 restricted stock units under the 2021 Incentive Plan. The options vest over one year . On March 10, 2022, the Company granted to employees 47,655 options under the 2021 Incentive Plan. The options vest over five years and expire ten years from the grant date. On March 15, 2022, the Company agreed to pay a lump-sum cash payment to an optionee for the exercise of its options with a fair market value option price of $ 11.83 , less a negotiated discount of 2.5 %. In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after December 31, 2021, the Consolidated Balance Sheet date, through the date the Consolidated Financial Statements were issued, and determined there have been no additional events or transactions that would materially impact the Consolidated Financial Statements. 127 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Not applicable.