What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2023-03-27 compared with 2022-03-21 · 436 added, 486 removed, 781 unchanged (54% of the section changed)

22 unchanged sentences

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.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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.

16 unchanged sentences

Right-of-use assets

Contingent payments to customers

Deferred tax assets, net

3 unchanged sentences

Accrued expenses

Accrued compensation and benefits

Due to related parties

1 unchanged sentence

Contingent consideration

Accrued contingent liability

Deferred revenues

2 unchanged sentences

Total liabilities

COMMITMENTS AND CONTINGENCIES (NOTE 13)

REDEEMABLE NONCONTROLLING INTEREST

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

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

510,000,000 shares authorized;

43,303,040 issued and 42,365,266 outstanding as of December 31, 2022, and 34,464,920 issued and 34,464,920 outstanding as of December 31, 2021, respectively

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

180,000,000 shares authorized;

73,131,825 shares issued and 73,008,374 shares outstanding as of December 31, 2022, and 82,851,279 shares issued and 82,727,827 shares outstanding as of December 31, 2021, respectively

Treasury stock

1 unchanged sentence

Accumulated deficit

Noncontrolling interest

Total stockholders' equity

11 unchanged sentences

Right-of-use assets

Deferred tax assets, net

Contingent payments to customers

Intangibles, net

1 unchanged sentence

Accrued expenses

Due to related parties

Accrued compensation and benefits

Contingent consideration

Accrued contingent liability

Deferred revenues

Lease liabilities

Debt obligations

Deferred tax liabilities, net

3 unchanged sentences

(in thousands, except per share amounts)

For the Year Ended

Ended December 31,

Management and advisory fees

15 unchanged sentences

Total other (expense)

Net income/(loss) before income taxes

Income tax benefit

Net income before income taxes

Income tax benefit/(expense)

preferred dividends attributable to redeemable

noncontrolling interest

net income attributable to noncontrolling interest in P10 Intermediate

NET INCOME ATTRIBUTABLE TO P10

2 unchanged sentences

Diluted earnings per share

Dividends paid per share

Weighted average shares outstanding, basic

6 unchanged sentences

Treasury stock

Non Controlling

Stockholders'

4 unchanged sentences

Balance at December 31, 2020

Stock-based compensation

Issuance of subsidiary preferred stock

Issuance of preferred dividend

Net income attributable to P10

Balance at December 31, 2020

Stock-based compensation

Exchange of common stock and redeemable noncontrolling interest to Class B common stock

5 unchanged sentences

Exchange of Class B common stock for Class A common stock

Balance at December 31, 2021

Stock-based compensation

Net income attributable to P10

Deferred offering costs

Issuance of restricted stock awards

Issuance of restricted stock units

Exchange of Class B common stock for Class A common stock

Exercise of stock options

Repurchase of common stock for employee tax witholding

Stock repurchase

Settlement of stock options

Capital contributions from non-controlling interest

Distributions to non-controlling interest

Dividends declared

Dividends paid

Balance at December 31, 2022

2 unchanged sentences

(in thousands)

For the Year Ended

Ended December 31,

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Income from unconsolidated subsidiaries

Benefit for deferred tax

Deferred tax expense (benefit)

Loss on extinguishment of debt

Measurement of contingent payments to customers

Remeasurement of contingent consideration

Post close purchase price adjustment

Change in operating assets and liabilities:

5 unchanged sentences

Accrued expenses

Accrued compensation and benefits

Due to related parties

7 unchanged sentences

Note receivable

Proceeds from note receivable

Investments in unconsolidated subsidiaries

Proceeds from investments in unconsolidated subsidiaries

Software capitalization

Post-closing payments related to acquisitions

8 unchanged sentences

Cash paid for extinguishment of debt

Payments to repurchase shares under employee stock plan

Repurchase of Class A common stock for employee tax withholding

Repurchase of Class B common stock

Repurchase of Class A common stock

Payment of preferred stock dividends

1 unchanged sentence

Payment of initial public offering underwriting fees

Payments of contingent consideration

Payment of contingent consideration

Deferred offering costs

Cash settlement of stock options

Dividends paid

Debt issuance costs

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash, cash equivalents and restricted cash

4 unchanged sentences

(in thousands)

For the Year Ended

Ended December 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

1 unchanged sentence

Cash paid for extinguishment of debt

Cash paid for income taxes

Net cash paid for income taxes

NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES

1 unchanged sentence

Issuance of redeemable noncontrolling interests in exchange for tax amortization benefits

Issuance of noncontrolling interest in acquisition

Increase to purchase price of Enhanced for working capital adjustment

1 unchanged sentence

Additions to lease liabilities

Additions to contingent payments to customers

Additions to accrued contingent liability

Additions to property and equipment

Additions to accrued compensation and benefits

Additions to contingent consideration

Dividends declared

RECONCILIATION OF CASH, CASH EQUIVALENTS AND

11 unchanged sentences

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.

("P10") became the parent company and all of the existing equity of P10 Holdings, 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.

3 unchanged sentences

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.

Each share of Class B common stock is entitled to ten votes while each share of Class A common stock is entitled to one vote.

and its consolidated subsidiaries (the “Company”) operate as a multi-asset class private market solutions provider in the alternative asset management industry.

2 unchanged sentences

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").

(“Five Points”), TrueBridge Capital Partners, LLC (“TrueBridge”), Enhanced Capital Group, LLC (“ECG”), Bonaccord Capital Advisors, LLC ("Bonaccord"), Hark Capital Advisors, LLC ("Hark"), P10 Advisors, LLC ("P10 Advisors"), and Western Technology Investment Advisors LLC ("WTI").

Prior to November 19, 2016, P10, formerly Active Power, Inc.

17 unchanged sentences

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.

1 unchanged sentence

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

TrueBridge is a registered investment advisor with the United States Securities and Exchange Commission.

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.

3 unchanged sentences

See Note 3 for additional information on these acquisitions.

In June 2022, the Company formed P10 Advisors, a fully consolidated subsidiary, to manage investment opportunities that are sourced across the P10 platform but do not fit within an existing investment mandate.

On October 13, 2022, the Company completed the acquisition of all of the issued and outstanding membership interests of WTI.

WTI provides senior secured financing to early-stage and emerging stage life sciences and technology companies.

WTI is a registered investment advisor with the United States Securities and Exchange Commission.

Simultaneously with the acquisition of WTI, the Company completed a restructuring of P10 Intermediate and subsidiaries to LLC entities that are considered disregarded entities for federal income tax purposes.

This allowed the WTI sellers to obtain a partnership interest in P10 Intermediate and all of its subsidiaries.

As a result of the acquisition, the WTI sellers obtained 3,916,666 membership units of P10 Intermediate, which can be exchanged into 3,916,666 shares of P10 class A common stock, following applicable restrictive periods.

The results of WTI’s operations have been included in the consolidated financial statements effective October 13, 2022.

The Company reports noncontrolling interest related to the partnership interests which are owned by the WTI sellers.

This is recorded as noncontrolling interest on the Consolidated Balance Sheets.

Noncontrolling interest is allocated a share of income or loss in the respective consolidated subsidiaries in proportion to their relative ownership interest.

Additionally, the Company makes periodic distributions to the WTI sellers for tax related and other agreed upon expenses as disclosed in the purchase agreement.

Significant Accounting Policies

11 unchanged sentences

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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:

6 unchanged sentences

See Note 7 for further information.

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.

Accordingly, the Company consolidates these entities, which includes P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Bonaccord, Hark, and WTI.

The assets and liabilities of the consolidated VIEs are presented on a gross basis in the Consolidated Balance Sheets.

As a result of the reorganization in 2021, and reaffirmed after the 2022 restructure, 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.

See Note 7 for more information on both consolidated and unconsolidated VIEs.

1 unchanged sentence

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.

P10 Holdings, P10 Inc., Five Points, P10 Advisors, and ECG are concluded to be consolidated subsidiaries of P10 under the voting interest model.

Reclassifications

10 unchanged sentences

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.

Restricted cash as of December 31, 2022 and December 31, 2021 was primarily cash that is restricted due to certain deposits being held by the Company for its customers.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Accounts Receivable and Due from Related Parties

3 unchanged sentences

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.

Management fees are collected on a quarterly basis.

Certain subsidiaries management fee contracts are collected at the beginning of the quarter, while others are collected in arrears.

The management fees reflected in accounts receivable at period end are those that are collected in arrears.

Due from related parties represents receivables from the Funds for reimbursable expenses from the Funds.

Additionally, fees owed to the Company for the advisory agreement entered into upon the closing of the acquisitions of ECG and ECP ("Advisory Agreement") where ECG provides advisory services to Enhanced Permanent Capital, LLC ("Enhanced PC") are reflected in due from related parties on the Consolidated Balance Sheets.

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.

Note receivable is mostly related to contractual amounts owed from a signed, secured promissory note with BCP Partners Holdings, LP ("BCP").

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

December 31, 2021 .

There was no note receivable balance as of December 31, 2020.

accordingly, no allowance for doubtful accounts has been established as of December 31, 2022 and December 31, 2021 .

If accounts are subsequently determined to be uncollectible, they will be expensed in the period that determination is made.

18 unchanged sentences

Long-lived assets are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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.

10 unchanged sentences

Additionally, upon amendments or other events, the Company may be required to remeasure our lease liability and right-of-use asset.

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.

2 unchanged sentences

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.

Revenue Share and Repurchase Arrangement

The Company recognizes an accrued contingent liability and contingent payments to customers asset in our Consolidated Balance Sheets for an agreement between ECG and a third party.

The agreement requires ECG to share in certain revenues earned with the third party and also includes an option for the third party to sell back the revenue share to ECG at a set multiple.

Additionally, ECG holds the option to buy back 50% of the revenue share at a set multiple.

The options to repurchase the revenue share are not exercisable until July of 2025.

The Company believes it is probable that the third party will exercise its option to sell back the revenue share and has recognized a liability on the Consolidated Balance Sheets.

The Company has also recognized a contingent payment to customers associated with the agreement and will amortize the asset against revenue over the period the option is expected to be exercised.

The amortization is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company will remeasure each reporting period.

The asset is defined as contingent payments to customers and the liability is defined as accrued contingent liability on the Consolidated Balance Sheets.

Refer to Note 14 for further information.

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.

As of December 31, 2022, goodwill recorded on our Consolidated Balance Sheets relates to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, Hark, and WTI.

As of December 31, 2022, 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, Hark, and WTI.

Indefinite-lived intangible assets and goodwill are not amortized.

1 unchanged sentence

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.

Certain of our trade names are considered

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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.

2 unchanged sentences

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).

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 difference is recorded as an impairment (not to exceed the carrying amount of goodwill).

At December 31, 2022 and December 31, 2021, the Company determined that there was no impairment to goodwill.

2 unchanged sentences

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.

As of December 31, 2022 and 2021, contingent consideration recorded relates to the acquisitions of Hark and Bonaccord.

Accrued Compensation and Benefits

Accrued compensation and benefits consists of employee salaries, bonuses, benefits, and acquisition-related earnouts (contingent on employment) not yet been paid.

The acquisition-related earnout contingent on employment is a product of the acquisition of WTI.

The sellers and eligible employees of WTI are eligible to earn up to $ 70.0 million contingent upon meeting certain EBITDA related hurdles that are contingent on employment.

Upon the achievement of $ 20.0 million, $ 22.5 million, and $ 25.0 million of EBITDA, $ 35.0 million, $ 17.5 million, and $ 17.5 million are earned, respectively.

The earnout period is eligible through December 31, 2027 with the potential to extend an additional two years .

Debt Issuance Costs

1 unchanged sentence

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Noncontrolling Interest

Noncontrolling interest ("NCI") reflect the portion of income or loss and the corresponding equity attributable to third-party equity holders and employees in certain consolidated subsidiaries that are not 100% owned by the Company.

Noncontrolling interest is presented as a separate component in our consolidated statements of income to clearly distinguish between our interests and the economic interest of third parties in those entities.

Net income attributable to P10, as reported in the consolidated statements of income, is presented net of the portion of net income attributable to holders of non-controlling interest.

NCI is allocated a share of income or loss in the respective consolidated subsidiaries in proportion to their relative ownership interest.

Treasury Stock

1 unchanged sentence

At the date of subsequent reissuance, the treasury stock account is reduced by the cost of such stock using the average cost method.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Fair Value Measurements

6 unchanged sentences

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 fair value of the credit and guarantee facility approximates the carrying value based on the interest rates which approximate current market rates.

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.

7 unchanged sentences

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.

These fees are recorded as deferred revenues 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.

2 unchanged sentences

Additionally, the management fee may step down for certain funds depending on the contractual arrangement.

Certain management fees are also calculated on capital deployed.

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Other Revenue

1 unchanged sentence

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.

If subscriptions or fees have been paid in

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

advance, these fees are recorded as deferred revenues 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.

Current income tax expense represents our estimated taxes to be paid or refunded for the current period.

6 unchanged sentences

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.

Basic earnings per share (“EPS”) is calculated by dividing net income attributable to common stockholders by the weighted-average number of common shares.

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.

Prior to the IPO, redeemable noncontrolling interests represented third party and related party interests in the Company's consolidated subsidiary, P10 Intermediate.

Prior to the conversion of the redeemable convertible preferred 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.

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 as well as the vesting of restricted stock units.

Also included in the diluted EPS denominator are the units of P10 Intermediate owned by the sellers of WTI under the assumption that they were exercised.

Under the treasury stock method, the unexercised options are assumed to be exercised at the beginning of the period or at issuance, if later.

3 unchanged sentences

Stock-Based Compensation Expense

Stock-based compensation relates to grants for shares of P10 awarded to our employees.

Stock-based compensation relates to grants for shares of P10 awarded to our employees through stock options as well as RSUs awarded to employees and RSAs issued to non-employee directors as compensation for service on the Company's board.

Stock compensation expense for RSAs and certain RSUs, where vesting occurs after a service period is recorded ratably over the vesting period at the fair market value on the grant date.

Stock compensation expense for performance based RSUs are recognized ratably over the implicit service period of when the awards are expected to be earned.

Certain acquisition-related RSUs vest after meeting certain performance metrics.

For these, the Company uses the tranche method for RSU's deemed probable of vesting and the expense is recorded over the expected vesting period.

The Company evaluates the probability of vesting at each reporting period.

Unvested units are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets and expense is recognized over the expected vesting period.

Refer to Note 16 for further discussion.

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 .

26 unchanged sentences

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.

The liabilities are remeasured at fair value on each reporting date, with changes in the fair value reflected in contingent consideration on our Consolidated Statements of Operations.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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.

Dividends are reflected in the consolidated financial statements when declared.

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.

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") :

7 unchanged sentences

The guidance must be applied using the modified retrospective adoption method on January 1, 2023, with early adoption permitted.

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:

Preferred stock

Total purchase consideration

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.

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:

Cash and cash equivalents

Accounts receivable

Due from related parties

Prepaid expenses and other

Property and equipment

Right-of-use assets

Intangible assets

Total assets acquired

Accounts payable

Accrued expenses

Long-term lease obligation

Deferred tax liability

Total liabilities assumed

Net identifiable assets acquired

Net assets acquired

The following table presents the fair value of identifiable intangible assets acquired:

Value of management contracts

Value of trade name

Total identifiable intangible assets

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 guidance does not have a material impact on the consolidated financial statements.

On October 28, 2021, the FASB issued ASU 2021-08, which amends ASC 805 to “require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.”

Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date.

The guidance is effective for fiscal years beginning after December 15, 2022.

The Company adopted this guidance on January 1, 2023.

The guidance had no effect on the consolidated financial statements.

On June 30, 2022, the FASB issued ASU No.

2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03").

The amendments in this Update affect all entities that have investments in equity securities measured at fair value that are subject to a contractual sale restriction.

The amendments clarify that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value.

The amen d ments also clarify that an entity cannot, as a separate unit of account, recognize and measure a contractual sale restriction.

The guidance is effective for fiscal years beginning after December 15, 2023.

We are evaluating the effects of these amendments on our financial reporting.

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 management 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:

Contingent consideration

Preferred stock

Total purchase consideration

1 unchanged sentence

(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:

Cash and cash equivalents

Accounts receivable

Due from related parties

Prepaid expenses and other

Property and equipment

Right-of-use assets

Intangible assets

Total assets acquired

Accounts payable

Accrued expenses

Deferred revenues

Long-term lease obligation

Deferred tax liability

Total liabilities assumed

Net identifiable assets acquired

Net assets acquired

The following table presents the fair value of identifiable intangible assets acquired:

Value of management contracts

Value of trade name

Value of technology

Total identifiable intangible assets

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.

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.

Estimated post-closing working capital adjustment

Preferred stock

Total purchase consideration

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.

See Note 18 for additional information on the preferred stock issued in the connection with the acquisition of Enhanced.

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 contingent consideration will not exceed $ 20 million.

As of December 31, 2022, $ 7.3 million has been paid in contingent consideration.

The fair value of the contingent consideration 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, 2022, the estimated fair value of the remaining contingent consideration totaled $ 12.0 million.

See Note 11 for more details.

In connection with the acquisition, the Company incurred a total of $ 0.7 million of acquisition-related expenses.

Total acquisition-related expenses were $ 0.2 million, $ 0.5 million and $ 0 for the years ended December 31, 2022, 2021 and 2020, respectively.

These costs are included in professional fees on our Consolidated Statements of Operations.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

These costs are included in professional fees on the Consolidated Statements of Operations.

The following table presents the fair value of the net assets acquired as of the acquisition date:

Cash and cash equivalents

Restricted cash

Accounts receivable

Due from related parties

Prepaid expenses and other assets

Investment in unconsolidated subsidiaries

Investment in partnership

Intangible assets

1 unchanged sentence

Accrued expenses

Other liabilities

Deferred revenues

Due to related parties

Debt obligations

Deferred tax liability

Total liabilities assumed

1 unchanged sentence

Net assets acquired

The following table presents the fair value of identifiable intangible assets acquired:

The following table presents the fair value of the identifiable intangible assets acquired:

Value of management and advisory contracts

1 unchanged sentence

Total identifiable intangible assets

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"), and any subsequent fund, paid quarterly, in exchange for funding certain amounts of capital commitments to the fund.

See Note 5 for more information.

Approximately $ 42.9 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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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 fair value consisted of $ 2.5 million in net assets and $ 4.7 million in goodwill.

The total contingent consideration payment will not exceed $ 5.4 million.

Acquisition of WTI

On October 13, 2022 , the Company completed the acquisition of all of the issued and outstanding membership interests of WTI for a total consideration of $ 146.0 million and an aggregate of 3,916,666 membership units of P10 Intermediate which can be exchanged on a one-for-one basis into shares of P10 class A common stock, subject to certain conditions pursuant to the Exchange Agreement entered into on August 25, 2022.

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:

Contingent consideration

Fair value of equity consideration

Total purchase consideration

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.

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.

The Company exercised the accordion feature on the Credit Facility to complete the acquisition of WTI.

The $ 125 million available on the accordion was split into $ 87.5 million of term loan and $ 37.5 million of revolver.

The Company drew the $ 87.5 million of term loan and $ 6.0 million of the available revolver to complete the acquisition and financed the remainder with cash on hand.

In connection with the acquisition, the Company incurred a total of $ 3.2 million of acquisition-related expenses.

Total acquisition-related expenses were $ 3.2 million, $ 0 and $ 0 for the years ended December 31, 2022, 2021 and 2020, 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.

These costs are included in professional fees on the Consolidated Statements of Operations.

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.

1 unchanged sentence

The following table presents the provisional fair value of the net assets acquired as of the acquisition date:

Cash and cash equivalents

Accounts receivable

Right-of-use assets

Prepaid expenses and other assets

Investment in partnership

Intangible assets

Property and equipment

Intangible assets, net

Total assets acquired

Accrued expenses

Accounts payable and accrued expenses

Lease liabilities

Total liabilities assumed

7 unchanged sentences

Total identifiable intangible assets

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.

Approximately $ 87.9 million of goodwill is expected to be deductible for tax purposes.

Acquisition of Hark

The acquisition was accounted for as a business combination under the acquisition method of accounting pursuant to ASC 805.

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.

To the extent there are payments on EBITDA-related earnouts as discsused in Note 14, those amounts would be amortizable for tax purposes at such time.

Identifiable Intangible Assets

3 unchanged sentences

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 management and advisory contracts and trade names 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.

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

The following unaudited pro forma condensed consolidated results of operations of the Company assumes the acquisition of WTI was completed on January 1, 2021:

Ended December 31,

Net income attributable to P10

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.

Other pro forma adjustments include intangible amortization expense, interest expense based on debt issued in connection with the acquisition, and compensation expense contingent on EBITDA (as noted in Note 14) as if the acquisition were completed on January 1, 2021.

Additionally, this does not reflect any pro forma adjustments related to the acquisitions which occurred in 2021.

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

The following unaudited pro forma condensed consolidated results of operations of the Company assumes the acquisition of Bonaccord was completed on January 1, 2020:

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Ended December 31,

Net income attributable to P10

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.

Other pro forma adjustments include intangible amortization expense and interest expense based on debt issued or repaid in connection with the acquisition as if the acquisition was completed on January 1, 2020 .

The following presents revenues disaggregated by product offering:

For the Year Ended

Ended December 31,

Management and advisory fees

Subscriptions

Consulting agreements and referral fees

Other revenue

1 unchanged sentence

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.

In connection with the Bonaccord acquisition, Bonaccord assumed a 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 Fund I and subsequent funds, 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.

Within 60 days following the final closing of the next fund, Bonaccord Fund II ("Fund II"), the third-party has the opportunity to acquire, at the price at the time of the original acquisition, equity interests in Bonaccord based on the amount of commitment made.

For each $ 5.0 million, up to a maximum of $ 250.0 million in irrevocable capital commitments to Fund II, the third-party can acquire 10 basis points up to a maximum of 5 % equity in Bonaccord.

In addition, net management fee earnings would increase by the same percentage, retroactive to the date of the first close in Fund II.

The maximum commitment requirement has been met as of December 31, 2022.

The Company believes its probable that the third-party will exercise the option to acquire equity in Bonaccord and has begun to accrue an additional 5 % of net management fee earnings.

If executed, the purchase price shall be reduced by the amount of management fee distributions which the third-party would have been paid as of the initial closing of Fund II.

Similar terms apply for Fund III with the exception that the third-party can acquire 9.8 basis points for every $ 5.0 million committed up to 4.9 %.

This commitment has not yet been met as of December 31, 2022 as Fund III has not yet started raising capital.

If commitment conditions to funds subsequent to Funds II and III are not satisfied, then within 60 days of the final closing of such subsequent fund giving rise to the condition not being satisfied, the Company may elect to repurchase the equity granted to the third-party.

The repurchase shall be at the fair market value of such equi ty at that point in time.

For the year ended December 31, 2022, the strategic alliance expense reported was $ 0.7 million .

For the year ended December 31, 2021, the strategic alliance expense reported was $ 0.2 million.

For the year ended December 31, 2020, there was no strategic alliance expense.

This is reported on the Consolidated Statements of Operations as strategic alliance expense in operating expenses.

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 to lend funds to certain employees to be used to pay general partner commitments to certain funds managed by Bonaccord.

This agreement provides for a note to BCP for $ 5.0 million, of which

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 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 %.

$ 4.2 million was drawn as of December 31, 2022 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 U.S.

Internal Revenue 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.

There was no cash paid for interest as of December 31, 2021 and the outstanding balance was capitalized to the note receivable.

In 2022, $ 0.1 million of interest was repaid, the remainder was capitalized and added to the outstanding balance.

Principal payments will be made periodically from mandatorily required payments from available cash flows at BCP.

As of December 31, 2022 and December 31, 2021, the balance was $ 4.2 million and $ 2.6 million, respectively.

The Company recognized interest income of $ 0.1 million, $ 0.1 million and $ 0 for the years ended December 31, 2022, 2021 and 2020, respectively.

Variable Interest Entities

1 unchanged sentence

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.

VIEs consist of certain operating entities not wholly owned by the Company and include P10 Intermediate, Holdco, RCP 2, RCP 3, TrueBridge, Hark, Bonaccord, and WTI.

See Note 2 for more information on the Company’s accounting policies related to the consolidation of VIEs.

11 unchanged sentences

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

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.

ECG recorded its share of income in the amount of $ 1.5 million for the year ended December 31, 2022 and $ 1.1 million for the year ended December 31, 2021.

For the year ended December 31, 2022 , ECG made $ 0 of capital contributions and received distributions of $ 1.0 million.

For the year ended December 31, 2021, ECG made $ 0 of capital contributions and received $ 1.4 million in distributions.

Tax Credit Finance

2 unchanged sentences

For the years ended December 31, 2022 and December 31, 2021, ECG made $ 0 of capital contributions and received distributions of $ 0 .

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Property and Equipment

Property and equipment consist of the following:

As of December 31,

Computers and purchased software

10 unchanged sentences

Purchase price adjustment

Increase from acquisitions

Increase from acquisition

Balance at December 31, 2022

2 unchanged sentences

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Intangibles consists of the following:

7 unchanged sentences

Total intangible assets

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

As of December 31, 2021

6 unchanged sentences

Total intangible assets

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.

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 that are expected to occur.

Technology is amortized on a straight-line basis over 4 years.

1 unchanged sentence

Total amortization

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Fair Value Measurements

9 unchanged sentences

The changes in the fair value of Level III financial instruments are set forth below:

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Contingent Consideration Liability

Year Ended December 31,

Balance, beginning of year:

For the Year Ended December 31,

Balance, beginning of period:

Change in fair value

Balance, end of year:

The fair value of the contingent consideration liability represents the fair value of future payments of certain performance targets.

Balance, end of period:

The fair value of the contingent consideration liability represents the fair value of future payments upon satisfaction of 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.

therefore, the ultimate amount of the contingent consideration liability primarily relate to the expected future payments of obligations with a discount rate applied.

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Debt Obligations

3 unchanged sentences

Revolving credit facility state tax credits, net

Gross notes payable to sellers

Less debt discount

Notes payable to sellers, net

Gross credit and guaranty facility

Debt issuance costs

Credit and guaranty facility, net

Revolver facility

4 unchanged sentences

Total debt obligations

The table below summarizes terms of the debt obligations.

December 31, 2022

Maturity Date

Aggregate Facility Size

Outstanding Debt

Amount Available

Net Carrying Value

Average Interest Rate

Revolver Facility

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.

2 unchanged sentences

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.

Enhanced State Tax Credit Fund III, LLC, a subsidiary of ECG, had 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 bore interest at 0.25 % above the Prime Rate and matured on June 15, 2022 .

The facility was not renewed upon maturity.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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.

The 2017 Seller Notes were set to mature on January 15, 2025 .

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.

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.

The 2018 Seller Notes were set to mature on January 15, 2025 .

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.

The TAB Payments were set to mature on April 15, 2023 .

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.

Non-cash interest expense was recorded on a periodic basis for the Notes payable to sellers.

During the year ended December 31, 2022, we recorded $ 0 in interest expense related to the TAB Payments.

For the years ended December 31, 2021 and December 31, 2020, P10 recorded $ 9.2 million and $ 1.0 million, respectively, in interest expense related to the TAB Payments.

Of the $ 9.2 million recorded in 2021, $ 8.4 million related to the debt extinguishment.

The 2017 Seller Notes, the 2018 Seller Notes and the TAB Payments are collectively referred to as “Notes payable to sellers”

12 unchanged sentences

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.

On December 22, 2021, the Company entered into a new credit agreement (the "Credit Agreement") with JPMorgan, in its capacity as administrative agent and collateral agent, and Texas Capital Bank, as joint lead arrangers and joint bookrunners, and the other loan parties party thereto.

The Credit Agreement consists of a revolving credit facility with an available balance of $ 125 million (the "Revolver Facility"), a term loan for $ 125 million (the "Term Loan"), and the Credit

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.

Agreement also includes a $ 125.0 million accordion feature which was exercised with the acquisition of WTI.

In October 2022, the accordion feature was exercised at which point it was split into $ 87.5 million worth of term loan and $ 37.5 million of revolver.

The facilities are "Term SOFR Loans" meaning loans bearing interest based upon the "Adjusted Term SOFR Rate".

The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 0.10 %.

The Company can elect one or three months for the Revolver Facility and three or six months for the Term Loan.

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.

Certain P10 subsidiaries are encumbered by this debt agreement.

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, 2022, P10 was in compliance with its financial covenants required under the facility.

As of December 31, 2022 , the balance drawn on the revolving credit facility is $ 80.9 million and on the term loan, the balance is $ 212.5 million.

There was no balance as of December 31, 2020.

The balance as of December 31, 2021 was $ 90.9 million and $ 125.0 million, respectively.

Future principal maturities of debt as of December 31, 2022 are as follows:

1 unchanged sentence

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.

Unamortized debt issuance costs for the Credit and Guaranty Facility as of December 31, 2022 and December 31, 2021 were $ 0 and $ 0 , respectively.

Unamortized debt issuance costs for the Revolving Credit Facility State Tax Credits as of December 31, 2022 and December 31, 2021 were $ 0 and $ 8 thousand, respectively.

Unamortized debt issuance costs for the Revolver Facility and Term Loan as of December 31, 2022 and December 31, 2021 were $ 4.2 million and $ 3.4 million, respectively.

Amortization expense related to debt issuance costs totaled $ 1.1 million for the year ended December 31, 2022 , $ 6.0 million for the year ended December 31, 2021 and $ 1.1 million for the year ended December 31, 2020.

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.

During the years ended December 31, 2022 and December 31, 2021 , we recorded $ 1.9 million and $ 4.4 million in debt issuance costs, respectively, which is included in debt obligations on the Consolidated Balance Sheets.

Most of the debt issuance costs recorded during 2022 relate to the exercise of the accordion feature.

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.

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.

In the fourth quarter of 2022, the Company sublet an additional amount of office space in the corporate headquarters.

This contributed an additional $ 3.4 thousand monthly.

P10 has paid $ 0.3 million, $ 0.2 million and $ 0 in rent to 210 Capital, LLC for the years ended December 31, 2022, 2021 and 2020, 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 a result of that agreement, P10 Intermediate paid $ 0 , $ 0.8 million and $ 0.5 for the years ended December 31, 2022, 2021 and 2020, respectively.

This management fee was terminated effective October 20, 2021 when the

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Company's redeemable noncontrolling interest was converted to shares of Class B common stock in connection with the Company's IPO.

As described in Note 1, through its subsidiaries, the Company serves as the investment manager to the Funds.

3 unchanged sentences

In certain instances, the Company may incur expenses related to specific products that never materialize.

The costs are then removed from the balance sheet and expensed on the Consolidated Statements of Operations.

The management fees described here are included in accounts receivable on the Consolidated Balance Sheets and the reimbursable expenses are included in due from related parties on the Consolidated Balance Sheets.

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 .

Under this agreement, ECG provides 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 receives 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 $ 22.0 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.

Since inception, $ 41.2 million of the total $ 98.0 million advisory fees have been recognized as revenue.

For the years ended December 31, 2022, 2021 and 2020, advisory fees earned or recognized under this agreement were $ 22.2 million, $ 19 million and $ 0 , respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

As of December 31, 2022 and December 31, 2021, the balance was $ 28.5 million and $ 9.5 million 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 th is 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 $ 11.5 million, $ 8.3 million and $ 0.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations.

On September 10, 2021, ECG entered into a strategic partnership with Crossroads Impact Corp ("Crossroads"), 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 loans will be held by CPF and CPF will pay an advisory fee to Enhanced.

The Company recognized $ 2.8 million and $ 0.2 million for the years ended December 31, 2022 and 2021, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

No revenues were recognized for the year ended December 31, 2020.

On July 6, 2022, Crossroads entered into the Advisory Agreement (the “Crossroads Advisory Agreement) with ECG.

The Crossroads Advisory Agreement provides for ECG to receive a services fee of 1.5 % per year of the capital deployed by Crossroads under the Crossroads Advisory Agreement ( 0.375 % quarterly), and an incentive fee of 15 % over a 7 % hurdle rate.

On July 6, 2022, certain funds managed by the Company purchased 4,646,840 shares of Crossroads common stock at $ 10.76 per shares, for an aggregate amount of approximately $ 50 million.

On August 1, 2022, an additional purchase of 1,394,052 shares of Crossroads common stock at $ 10.76 per share occurred.

The Co-CEOs of the Company are directors of Crossroads .

The Company recognized $ 0.1 million for the year ended December 31, 2022, which is included in management and advisory fees on the Consolidated Statements of Operations.

No revenues were recognized for the years ended December 31, 2021 and 2020.

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.

Upon the closing of the Bonaccord acquisition 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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Commitments and Contingencies

2 unchanged sentences

These lease agreements provide for various renewal options.

Rent expense for the various leased office

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 various leased office space and equipment was approximately $ 3.5 million for the year ended December 31, 2022 and $ 2.0 million for the year-ended December 31, 2021 , 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.

P10 elected the practical expedient, whereby the concessions were treated as a reduction of rent expense during the period received.

The following table presents information regarding the Company’s operating leases as of December 31, 2022:

7 unchanged sentences

Less discount

Less construction allowance

Total lease liabilities

Earnout Payment

With the acquisition of WTI, an earnout payment of up to $ 70.0 million of cash and common stock may be earned upon meeting certain performance metrics.Upon the achievement of $ 20.0 million, $ 22.5 million, and $ 25.0 million of EBTIDA, $ 35.0 million, $ 17.5 million, and $ 17.5 million are earned, respectively.

Of the total amount, $ 50.0 million can be earned by the sellers and the remaining $ 20.0 million would be allocated to employees of the Company at the time the earnout is earned.

Payment to both sellers and employees is contingent on employment and, therefore, these earnout payments are recorded as compensation expense on the Consolidated Statements of Operations.

The Company will evaluate whether each earn-out hurdle is probable of occurring and recognize an expense over the period the hurdle is expected to be achieved.

As of December 31, 2022, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

Total payment will not exceed $ 70.0 million and any amounts paid will be paid by October 2027, at which point the earnout expires.

For the period ended December 31, 2022, December 31, 2021, and December 31, 2020, $ 5.2 million, $ 0.0 million, and $ 0.0 .

million were recognized, respectively.

As of December 31, 2022, December 31, 2021, and December 31, 2022, the balance was $ 5.2 million, $ 0.0 million, and $ 0.0 million and is included in accrued compensation and benefits in the Consolidated Balance Sheets.

No payments have been made on the earnout.

Bonus Payment

In connection with the acquisition of WTI, certain employees entered into employment agreements.

As part of these employment agreements, certain employees may receive a one-time bonus payment if the employee is employed by the Company as of the fifth anniversary of the effective date and the trailing-twelve month EBITDA of WTI at that time is equal to or greater than $ 20.0 million.

Payment can be made in cash or stock of P10, provided that no more than $ 5.0 million will be payable in cash.

Total payment will not exceed $ 10.0 million and any amounts will be paid in October 2027, the fifth anniversary of the effective date.

For the period ended December 31, 2022, December 31, 2021, and December 30, 2020, the Company recognized $ 0.4 million, $ 0.0 .

million, and $ 0.0 million of expense, respectively, which is included in

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

compensation and benefits on the consolidated statement of operations.

As of December 31, 2022, December 31, 2021, and December 30, 2020, the balance was $ 0.4 million, $ 0.0 million, and $ 0.0 million, respectively, and is included in accrued compensation and benefits on the Consolidated Balance Sheets.

Revenue Share Arrangement

The Company recognizes an accrued contingent liability and contingent payments to customers asset in our Consolidated Balance Sheets for an agreement that exists between ECG and a third party.

The agreement requires ECG to share in certain revenues earned with the third party and also includes an option for the third party to sell back the revenue share to ECG at a set multiple.

The Company’s contingent liabilities and corresponding contingent payments to customers are recognized once determined to be probable.

The contingent payments to customers are amortized and recorded within management and advisory fees on the Consolidated Statements of Operations over the expected period before exercise of an option occurs.

As of December 31, 2022, the Company has determined that the put options are probable and have accrued an estimated contingent liability and contingent payments to customers.

As of December 31, 2022, December 31, 2021, and December 31, 2020, the balance was $ 14.3 million, $ 0.0 million, and $ 0.0 million, respectively, and is included in accrued contingent liabilities on the Consolidated Balance Sheets.

The associated contingent payments to customers asset balance was $ 13.6 million, $ 0.0 million, and $ 0.0 million as of December 31, 2022, December 31, 2021, and December 31, 2020, respectively.

The Company recognized $ 0.7 million, $ 0.0 million, and $ 0.0 million of amortization of contingent payments to customers for the years ended December 31, 2022, December 31, 2021, and December 31, 2020, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

The Company will remeasure each period and recognize all changes as if they occurred at inception and recognize changes in revenue.

Contingencies

1 unchanged sentence

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.

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

All the Company's operations are domestic.

5 unchanged sentences

The reconciliation of the Company's federal statutory rate to the effective tax rate is as follows:

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

For the Years Ended

Federal statutory rate

Noncontrolling interest

State taxes, net of federal benefit

7 unchanged sentences

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

During the year, the Company completed an organizational restructure whereby the majority of it’s assets were contributed to a majority owned entity, treated as a partnership for US Federal Income Tax purposes.

As a result, the deferred taxes related to the contributed assets and liabilities have been characterized as a deferred tax asset arising from the outside basis difference in the partnership investment.

Significant components of the Company's deferred taxes are as follows:

4 unchanged sentences

Interest expense

Lease liabilities—operating leases

Passthrough activity—investment in partnerships

Right of use assets - operating leases

Investment in partnership

Debt obligations

Suspended losses

Contingent liabilities

Net operating losses and credit carryforwards

8 unchanged sentences

Deferred tax assets, net

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Due to the uncertainty of realizing the benefits of our domestic favorable tax attributes in future tax returns, as of December 31, 2022, the Company has recorded a valuation allowance against its net deferred tax asset of $ 12.8 million.

During the years ended December 31, 2022 and 2021, the valuation allowance decreased by approximately $ 0.1 million and $ 4.2 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.

The 2022 decrease is primarily attributable to the release of valuation allowances for state net operating loss carryforwards while the 2021 valuation allowance decrease is due primarily to the release of valuation allowance on partnership outside basis differences.

Among other factors in 2022, 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.

Additionally, the Company’s restructuring undertaken in 2021 as part of the IPO transaction introduced 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.

As of De cember 31, 2022, the Company had federal and post-apportioned state NOL carryforwards of approximately $ 177.4 million and $ 21.8 million, respectively, and research and development credit carryforwards of approximately $ 5.3 million.

The federal NOL and credit carryforwards may expire beginning in 2023, if not utilized.

This includes $ 2.8 million of federal NOLs that may expire in 2023, $ 24.3 million that may expire in 2024, and $ 150.3 million that may expire between 2025-2037.

The state NOLs may expire beginning in 2023, if not utilized.

This includes $ 4.5 million that may expire between 2023 and 2029 and $ 17.2 million that may 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”

3 unchanged sentences

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.

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.

Once it is 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:

8 unchanged sentences

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.

As of December 31, 2022, the Company has $ 0.1 million of accrued interest and penalties related to uncertain tax positions.

The Company is subject to U.S.

5 unchanged sentences

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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 ("2018 Plan"), our previously existing equity compensation plan.

The Compensation Committee of the Board of Directors may issue equity-based awards including stock options, stock appreciation rights, restricted stock units and restricted stock awards.

Options previously granted under the 2018 Plan cliff vest over a period of four or five year s.

The term of each option is no more than ten year s from the date of grant.

Terms of all future awards will be granted under the Plan, and no additional awards will be granted under the 2018 Plan.

Awards granted under the 2018 Plan continue to follow the 2018 Plan.

The 2018 Plan provided for an initial 6,300,000 shares (adjusted for the reverse stock split).

The Plan provided for the issuance of 3,000,000 shares available for grant, in addition to those approved in the 2018 Plan for a total of 9,300,000 shares.

On March 15, 2022, the Board of Directors approved the settlement of 1.1 million options from a grantee with a fair market value option price of $ 11.83 , less a negotiated discount of 2.5 %, totaling $ 12.5 million.

This was paid on April 4, 2022.

On June 17, 2022, at the Annual Meeting of Stockholders, the shareholders authorized an increase of 5,000,000 shares that may be issued under the Plan creating a total of 14,300,000 shares available for grant under the Plan and the 2018 Plan.

On October 21, 2022, a special meeting of stockholders was held to increase the number of shares issuable under the Plan by 4,000,000 shares.

As of December 31, 2022, there are 7.1 million shares available for grant.

A summary of stock option activity for the years ended December 31, 2022 and December 31, 2021 is as follows:

13 unchanged sentences

Exercisable as of December 31, 2022

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, 2022 and December 31, 2021 were as follows:

For the Years Ended December 31,

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

For the Year Ended December 31,

Expected life

3 unchanged sentences

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.

Holders of RSAs have no voting rights and accrue dividends until vesting with payment being made once they vest.

All of the shares currently vest one year from the grant date.

3 unchanged sentences

Outstanding as of December 31, 2021

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

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.

All of the shares currently vest one year from the grant date excluding the restricted stock units at Hark and Bonaccord which are discussed in more detail below.

At the time of the Bonaccord acquisition, the Company entered into a Notice of Restricted Stock Units with certain employees of Bonaccord for grants of Restricted Stock Units ("Bonaccord Units") to be allocated 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.

On August 16, 2022, allocations were finalized pursuant to which an aggregate a value of $ 17.5 million of units may vest at each future achievement of performance metrics .

As of December 31, 2022, certain performance metrics have been met and 345,765 units have been allocated and issued to specific employees.

The Company evaluates whether it is probable that the Bonaccord Units will vest and applies the tranche method to determine the amount of expense to recognized during the period.

An expense of $ 7.0 million has been recorded for the year ended December 31, 2022 on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 5.0 million as of December 31, 2022.

At the time of the Hark acquisition, the Company entered into a Notice of Restricted Stock Units with an employee, which grants Restricted Stock Units ("Hark Units") for meeting a certain performance metric.

The Hark Units may not be transferred, s old, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until they have become vested.

As of December 31, 2022, no Hark Units have vested but the Company believes it is probable that the RSUs will be earned.

An expense of $ 1.3 million has been recorded for the year ended December 31, 2022 on the Consolidated Statements of Operations.

Unvested units are recognized ratably as a liability on the Consolidated Balance Sheets and expense is recognized over the expected vesting period.

The unrecognized expense associated with the Hark Units was $ 0.3 million as of December 31, 2022.

The below table does not include Bonaccord or Hark Units that were issued outside of the Plan, that have not vested and are recorded as a liability.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Weighted-Average Grant

2 unchanged sentences

Outstanding as of December 31, 2021

Outstanding as of December 31, 2022

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 $ 18.6 million, $ 3.5 million and $ 0.7 million for the years ended December 31, 2022, 2021 and 2020, 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.

Of the $ 18.6 million of stock-based compensation expense recognized during the year ended December 31, 2022, $ 8.3 million re lates to the Bonaccord Units and Hark Units.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of December 31, 2022 was $ 5.8 million and is expected to be recognized over a weighted average period of 3.14 years.

5 unchanged sentences

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.

This is only applicable to fiscal year 2020 as the preferred shares of P10 Intermediate converted to shares of Class B common stock effective with the IPO.

For the year ended December 31, 2022, diluted EPS reflects the potential dilution that could occur assuming the exercise of partnership units in P10 Intermediate, that were granted as a result of the WTI acquisition.

The following table presents a reconciliation of the numerators and denominators used in the computation of basic and diluted EPS:

For the Years Ended

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Ended December 31,

Numerator for basic calculation—Net income

attributable to P10

Adjustment for:

Net income attributable to noncontrolling interest in P10 Intermediate

Numerator for earnings per share

2 unchanged sentences

average shares

Weighted shares assumed upon conversion of partnership units

Weighted shares assumed upon exercise of stock

options and vesting of RSUs

Denominator for earnings per share assuming dilution

1 unchanged sentence

Earnings per share—diluted

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.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

The computations of diluted earnings per share excluded options to purchase 6.7 million shares of common stock for the year ended December 31, 2022 and 0.1 million options for the year ended December 31, 2021, respectively, because the options were anti-dilutive.

Redeemable Noncontrolling Interest

4 unchanged sentences

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:

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.

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.

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.

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.

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.

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.

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

Distribution of preferred dividends attributable to

redeemable non-controlling interest

Preferred dividends attributable to redeemable

noncontrolling interest

Balance at December 31, 2020

Issuance of subsidiary preferred stock

Distribution of preferred dividends attributable to

redeemable non-controlling interest

Preferred dividends attributable to redeemable

noncontrolling interest

Conversion of redeemable noncontrolling interest in connection with the IPO

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.

Dividends on the preferred shares were recognized as preferred dividends attributable to redeemable non-controlling interest in our Consolidated Statements of Operations.

In connection with the IPO on October 20, 2021, all preferred shares were contractually converted to Class B common shares.

Subsequent Events

On February 24, 2022, the Company paid down $ 25.0 million of the Revolver Facility.

On March 9, 2023, the Company granted to employees 2,677,974 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.

On March 9, 2023, the Company granted to employees 906,343 res tricted 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.

The Board of Directors of the Company has declared a quarterly dividend of $ 0.03 per share of Class A and Class B common stock, payable on March 31, 2023, to the holders of record as of the close of business on March 16, 2023.

In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after December 31, 2022, the Consolidated Balance Sheet date, through the date the Consolidated Financial

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Statements were issued, and determined there have been no additional events or transactions that would materially impact the Consolidated Financial Statements.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data