What changed in this filing

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Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 218 added, 177 removed, 763 unchanged (34% of the section changed)

2 unchanged sentences

(in thousands, except share amounts)

As of June 30,

Cash and cash equivalents

25 unchanged sentences

510,000,000 shares authorized;

44,026,736 issued and 43,088,962 outstanding as of March 31, 2023, and 43,303,040 issued and 42,365,266 outstanding as of December 31, 2022, respectively

44,761,247 issued and 43,823,473 outstanding as of June 30, 2023, and 43,303,040 issued and 42,365,266 outstanding as of December 31, 2022, respectively

Class B common stock, $ 0.001 par value;

180,000,000 shares authorized;

72,955,140 shares issued and 72,831,689 shares outstanding as of March 31, 2023, and 73,131,826 shares issued and 73,008,374 shares outstanding as of December 31, 2022, respectively

72,505,177 shares issued and 72,381,726 shares outstanding as of June 30, 2023, and 73,131,826 shares issued and 73,008,374 shares outstanding as of December 31, 2022, respectively

Treasury stock

8 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Management and advisory fees

12 unchanged sentences

Interest expense, net

Other (expense)/income

Total other (expense)

Net (loss)/income before income taxes

Income tax benefit/(expense)

Net income before income taxes

Income tax expense

net income attributable to noncontrolling interest in P10 Intermediate

22 unchanged sentences

Balance at March 31, 2022

Stock-based compensation

Net income attributable to P10

Exchange of Class B common stock for Class A common stock

Dividends declared

Dividends paid

Balance at June 30, 2022

Common Stock - Class A

Common Stock - Class B

Treasury stock

Non Controlling

Stockholders'

Paid-in-capital

Balance at December 31, 2022

Stock-based compensation

Net loss attributable to P10 and net income attributable to non controlling interest

Net income attributable to P10 and net income attributable to non controlling interest

Exchange of Class B common stock for Class A common stock

8 unchanged sentences

Balance at March 31, 2023

Stock-based compensation

Net income attributable to P10 and net income attributable to non controlling interest

Exchange of Class B common stock for Class A common stock

Exercise of stock options (net of tax)

Distributions to non-controlling interests

Issuance of restricted stock units

Repurchase of common stock for employee tax witholding

Dividends declared

Dividends paid

Balance at June 30, 2023

The Notes to Consolidated Financial Statements are an integral part of these statements.

1 unchanged sentence

(Unaudited, in thousands)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

5 unchanged sentences

Income from unconsolidated subsidiaries

Deferred tax expense (benefit)

Deferred tax expense

Amortization of contingent payment to customers

14 unchanged sentences

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS (USED IN) INVESTING ACTIVITIES

Purchase of intangible assets

11 unchanged sentences

Payment of contingent consideration

Cash settlement of stock options

Dividends paid

Distributions to partners

Debt issuance costs

6 unchanged sentences

(Unaudited, in thousands)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash paid for interest

Net cash paid (received) for income taxes

Net cash paid for income taxes

NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES

3 unchanged sentences

Additions to accrued compensation and benefits

Accrual for settlement of stock options

Additions to contingent consideration

7 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Description of Business

38 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

On September 30, 2021, the Company completed acquisitions of Bonaccord and Hark.

12 unchanged sentences

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 fifth amended and restated limited liability agreement of P10 Intermediate Holdings LLC.

Additionally, the Company makes periodic distributions to the WTI sellers for tax related and other agreed upon expenses in accordance with the terms of the P10 Intermediate operating agreement.

Significant Accounting Policies

5 unchanged sentences

All intercompany transactions and balances have been eliminated upon consolidation.

The results for the three months ended March 31, 2023 are not necessarily indicative of the results to be expected for the full year ended December 31, 2023.

The results for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year ended December 31, 2023.

Certain entities in which the Company holds an interest are investment companies that follow FASB Accounting Standards Codification Topic 946, Financial Services - Investment Companies and reflect their investments at estimated fair value.

Accordingly, the carrying value of the Company’s equity method investments in such entities retains the specialized accounting treatment.

Accordingly, the carrying value of the Company’s equity method investments in such entities retains that accounting treatment.

Principles of Consolidation

5 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

19 unchanged sentences

The Company considers all highly liquid instruments with original maturities of three months or less to be cash equivalents.

As of March 31, 2023, and December 31, 2022, cash equivalents include money market funds of $ 5.0 million and $ 7.8 million, respectively, which approximates fair value.

As of June 30, 2023, and December 31, 2022, cash equivalents include money market funds of $ 5.8 million and $ 7.8 million, respectively, which approximates fair value.

The Company maintains its cash balances at various financial institutions among multiple accounts, which may periodically exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits.

3 unchanged sentences

Restricted Cash

Restricted cash as of March 31, 2023 and December 31, 2022 was primarily cash that is restricted due to certain deposits being held for customers.

Restricted cash as of June 30, 2023 and December 31, 2022 was primarily cash that is restricted due to certain deposits being held for customers.

Accounts Receivable and Due from Related Parties

1 unchanged sentence

The Company considers accounts receivable to be fully collectible;

accordingly, no allowance for doubtful accounts has been established as of March 31, 2023 and December 31, 2022.

If accounts are subsequently determined to be uncollectible, they will be expensed

accordingly, no allowance for doubtful accounts has been established as of June 30, 2023 and December 31, 2022.

If accounts are subsequently determined to be uncollectible, they will be expensed in

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

in the period that determination is made.

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

the period that determination is made.

Management fees are collected on a quarterly basis.

8 unchanged sentences

The Company considers the note receivable to be fully collectible;

no allowance for doubtful accounts has been established as of March 31, 2023 and December 31, 2022.

no allowance for doubtful accounts has been established as of June 30, 2023 and December 31, 2022.

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

22 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

The Company recognizes a lease liability and right-of-use asset in our Consolidated Balance Sheets for contracts that it determines are leases or contain a lease.

17 unchanged sentences

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 the contractual term of the management contract.

The Company has also recognized a contingent payment to customers associated with the agreement and will amortize the asset against revenue over the contractual term of the management contract.

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

3 unchanged sentences

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 March 31, 2023, 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 March 31, 2023, 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.

As of June 30, 2023, 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 June 30, 2023, 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.

8 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

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).

2 unchanged sentences

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.

As of March 31, 2023, contingent consideration recorded relates to the acquisitions of Hark and Bonaccord on the Consolidated Balance Sheets.

As of June 30, 2023 , contingent consideration recorded relates to the acquisitions of Hark and Bonaccord on the Consolidated Balance Sheets.

Accrued Compensation and Benefits

19 unchanged sentences

We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then we rank the estimated values based on the reliability of the inputs used following the fair value hierarchy set forth by the FASB.

As of March 31, 2023 and December 31, 2022, we used the following valuation techniques to measure fair value for assets and there were no changes to these methodologies during the periods presented:

As of June 30, 2023 and December 31, 2022, we used the following valuation techniques to measure fair value for assets and there were no changes to these methodologies during the periods presented:

Level 1—Assets were valued using the closing price reported in the active market in which the individual security was traded.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Level 2—Assets were valued using quoted prices in markets that are not active, broker dealer quotations, and other methods by which all significant inputs were observable at the measurement date.

29 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Uncertain tax positions are recognized only when we believe it is more likely than not that the tax position will be upheld on examination by the taxing authorities based on the merits of the position.

30 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Business Acquisitions

34 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Pronouncements Not Yet Adopted

12 unchanged sentences

Total purchase consideration

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 $ 0 and $ 0 for the three months ended March 31, 2023 and March 31, 2022, respectively.

Total acquisition-related expenses were $ 0 for the three and six months ended June 30, 2023 and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2022, respectively.

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.

13 unchanged sentences

Net assets acquired

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

2 unchanged sentences

Total identifiable intangible assets

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

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 $ 87.3 million of goodwill is expected to be deductible for tax purposes.

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.

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

Identifiable Intangible Assets

8 unchanged sentences

The following unaudited pro forma condensed consolidated results of operations of the Company assumes the acquisition of WTI was completed on January 1, 2022:

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

Net income attributable to P10

1 unchanged sentence

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, 2022.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

The following presents revenues disaggregated by product offering:

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Management and advisory fees

4 unchanged sentences

In connection with the Bonaccord acquisition, Bonaccord entered into a Strategic Alliance Agreement ("SAA") with a third-party investor.

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.

This SAA provides the third-party the right to receive 15 % of the net management fee earnings, which

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

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.

2 unchanged sentences

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 March 31, 2023.

The Company believes it's 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.

The maximum commitment requirement has been met as of June 30, 2023 .

The Company believes it is 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 March 31, 2023 as Fund III has not yet started raising capital.

This commitment has not yet been met as of June 30, 2023 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 three months ended March 31, 2023, the strategic alliance expense reported was $ 0.4 million .

For the three months ended March 31, 2022, the strategic alliance expense reported was $ 0.2 million.

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

For the three and six months ended June 30, 2023 , the strategic alliance expense reported was $ 0.4 million and $ 0.8 million, respectively.

For the three and six months ended June 30, 2022 , the strategic alliance expense reported was $ 0.2 million and $ 0.3 million, respectively.

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

As of March 31, 2023, the associated liability is $ 0.2 million which is reported in accrued expenses on the Consolidated Balance Sheets.

As of June 30, 2023 and December 31, 2022 the associated liability is $ 0.3 million and $ 0.2 million, respectively, which is reported in accrued expenses on the Consolidated Balance Sheets.

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 $ 4.4 million was drawn as of March 31, 2023 with a maturity date of September 30, 2031 .

This agreement provides for a note to BCP for $ 5.0 million, of which $ 4.4 million was drawn as of June 30, 2023 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.

2 unchanged sentences

There was $ 0.1 million cash paid for interest as of December 31, 2022 and the $ 0.1 million was capitalized to the note receivable.

As of March 31, 2023, $ 0.1 million of interest was repaid.

As of June 30, 2023 , $ 0.1 million of interest was paid.

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

As of March 31, 2023 and December 31, 2022, the balance was $ 4.4 million and $ 4.2 million, respectively.

The Company recognized interest income of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2023 and 2022, respectively.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

As of June 30, 2023 and December 31, 2022, the balance was $ 4.4 million and $ 4.2 million, respectively.

The Company recognized interest income of $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2023 , respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2022 , respectively.

Variable Interest Entities

3 unchanged sentences

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

The assets of the consolidated VIEs totaled $ 500.2 million and $ 568.0 million as of March 31, 2023 and December 31, 2022 , respectively.

The liabilities of the consolidated VIEs totaled $ 79.3 million and $ 96.3 million a s of March 31, 2023 and December 31, 2022, respectively.

The assets of the consolidated VIEs totaled $ 562.9 million and $ 568.0 million as of June 30, 2023 and December 31, 2022 , respectively.

The liabilities of the consolidated VIEs totaled $ 379.8 million and $ 96.3 million as of June 30, 2023 and December 31, 2022, respectively.

The assets of our consolidated VIE’s are owned by those entities and not generally available to satisfy P10’s obligations, and the liabilities of our consolidated VIE’s are obligations of those entities and their creditors do not generally have recourse to the assets of P10.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Unconsolidated VIEs

3 unchanged sentences

The Company’s investment in unconsolidated subsidiaries consist of equity method investments primarily related to ECG’s tax credit finance and asset management activities.

As of March 31, 2023 , investment in unconsolidated subsidiaries totaled $ 2.4 million, of which $ 0.2 million related to ECG’s tax credit finance businesses and $ 2.2 million related to ECG’s asset management businesses.

As of June 30, 2023 , investment in unconsolidated subsidiaries totaled $ 2.4 million, of which $ 0.2 million related to ECG’s tax credit finance businesses and $ 2.2 million related to ECG’s asset management businesses.

As of December 31, 2022 , investment in unconsolidated subsidiaries totaled $ 2.3 million, of which $ 2.1 million related to ECG’s asset management businesses and $ 0.2 million related to ECG’s tax credit finance businesses.

1 unchanged sentence

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 $ 0.1 million for the three months ended March 31, 2023 and $ 0.3 million for the three months ended March 31, 2022.

For the three months ended March 31, 2023, ECG made $ 0 capital contributions and received distributions of $ 0 .

For the three months ended March 31, 2022, ECG made $ 0 capital contributions and received distributions of $ 0.1 million.

ECG recorded its share of income in the amount of $ 0.4 million and $ 0.5 million for the three month and six months ended June 30, 2023 , respectively, and $ 0.8 million and $ 1.1 million for the three and six months ended June 30, 2022, respectively.

For the three and six months ended June 30, 2023, ECG made $ 0 capital contributions and received distributions of $ 0.4 million and $ 0.5 million, respectively.

For the three and six months ended June 30, 2022 , ECG made $ 0 capital contributions and received distributions of $ 0.6 million and $ 0.7 million, respectively.

Tax Credit Finance

1 unchanged sentence

Some of these subsidiaries own nominal interests, typically under 1.0%, in various VIEs and record these investments under the measurement alternative described in Note 2 above.

For the three months ended March 31, 2023 and March 31, 2022, EC G made $ 0 of capital contributions and received distributions of $ 0 .

For the three and six months ended June 30, 2023 and June 30, 2022, EC G made $ 0 of capital contributions and received distributions of $ 0 .

Property and Equipment

Property and equipment consist of the following:

As of March 31,

As of June 30,

As of December 31,

4 unchanged sentences

Total property and equipment, net

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Goodwill and Intangibles

Changes in goodwill for the three months ended March 31, 2023 are as follows:

Changes in goodwill for the six months ended June 30, 2023 are as follows:

Balance at December 31, 2022

1 unchanged sentence

Increase from acquisitions

Balance at March 31, 2023

Balance at June 30, 2023

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

During the period, there was a revision to the provisional fair value of the WTI tradename as a result of obtaining new information that was available at acquisition.

This revision resulted in a purchase price adjustment.

This resulted in a $ 0.6 million adjustment to goodwill and intangible assets.

Intangibles consists of the following:

As of March 31, 2023

As of June 30, 2023

Gross Carrying

17 unchanged sentences

Total amortization

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Fair Value Measurements

3 unchanged sentences

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 earnout expires.

As of March 31, 2023, $ 8.0 million has been paid in contingent consideration associated with the earnout.

Total expense recognized for the three months ended March 31, 2023 and March 31, 2022, respectively, was $ 0.3 million and $ 0.1 million, which is included in contingent consideration expense on the Satements of Operations.

As of June 30, 2023 , $ 8.9 million has been paid in

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

contingent consideration associated with the earnout.

Total expense recognized for the three and six months ended June 30, 2023 was $ 0.1 million and $ 0.5 million, r espectively.

Total expense recognized for the three and six months ended June 30, 2022 was $ 0 million and $ 0.1 million, respectively.

This is included in contingent consideration expense on the Statements of Operations.

The fair value of the contingent consideration is derived from an analysis of the option pricing model and the scenario based model.

3 unchanged sentences

The Company's contingent consideration is considered to be a Level 3 fair value measurement as the significant inputs are unobservable and require significant judement or estimation.

As of March 31, 2023 , the estimated fair value of the remaining contingent consideration totaled $ 11.6 million.

As of June 30, 2023 , the estimated fair value of the remaining contingent consideration totaled $ 10.8 million.

Following June 30, 2023, the Company has paid $ 2.7 million towards the remaining contingent consideration.

Included in the total consideration of the acquisition of Hark is an earnout not to exceed $ 5.4 million.

As of March 31, 2023, the contingent consideration associated with the earnout totaled $ 5.4 million and is considered earned but has not yet been paid.

The Company expects this to be paid in 2023.

Total expense recognized for the three months ended March 31, 2023 and March 31, 2022, respectively, totaled $ 0.1 million and $ 0.1 million, which was included in contingent consideration expense on the Statements of Operations.

Total expense recognized for the three and six months ended June 30, 2023 totaled $ 0 and $ 0.1 million, respectively.

Total gain recognized for the three and six months ended June 30, 2022 , respectively, totaled $ 0 million and $ 0.1 million, which was included in contingent consideration expense on the Statements of Operations.

As of June 30, 2023 , the contingent consideration associated with the earnout totaled $ 5.4 million and is considered earned but has not yet been paid.

Following June 30, 2023, this was paid in entirety.

The following tables provide details regarding the classification of these liabilities within the fair value hierarchy as of the dates presented:

As of March 31, 2023

As of June 30, 2023

Contingent consideration obligation

3 unchanged sentences

Total liabilities

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the periods ended March 31, 2023 and December 31, 2022.

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the periods ended June 30, 2023 and December 31, 2022.

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

Contingent Consideration Liability

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Balance, beginning of year:

7 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Debt Obligations

6 unchanged sentences

Total debt obligations

March 31, 2023

Maturity Date

Aggregate Facility Size

Outstanding Debt

Amount Available

Net Carrying Value

Average Interest Rate

June 30, 2023

Principal Amount

Rate Expiration Date

Revolver Facility

Revolving Credit Facility State Tax Credits

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.

Revolver Facility

Revolving Credit Facility and Term Loan

12 unchanged sentences

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 March 31, 2023, P10 was in compliance with its financial covenants required under the facility.

As of March 31, 2023, the balance drawn on the revolving credit facility is $ 77.9 million and on the term loan, the balance is $ 209.8 million.

As of June 30, 2023, P10 was in compliance with its financial covenants required under the facility.

As of June 30, 2023 , the balance drawn on the revolving credit facility is $ 68.0 million and on the term loan, the balance is $ 207.2 million.

The balance as of December 31, 2022 was $ 80.9 million on the revolving credit facility and $ 212.5 million on the term loan.

For the three months ended March 31, 2023 and March 31, 2022, $ 4.8 million and $ 0.9 million of interest expense was incurred, respectively.

For the three and six months ended June 30, 2023 , $ 5.0 million and $ 9.9 million of interest expense was incurred, respectively.

For the three and six months ended June 30, 2022 , $ 1.3 million and $ 2.5 million of interest expense was incurred, respectively.

Future principal maturities of debt as of June 30, 2023 are as follows:

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Future principal maturities of debt as of March 31, 2023 are as follows:

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Debt Issuance Costs

Debt issuance costs are offset against the Revolver Facility and Term Loan.

Unamortized debt issuance costs for the Revolver Facility and Term Loan as of March 31, 2023 and December 31, 2022 were $ 3.8 million and $ 4.2 million, respectively.

Amortization expense related to debt issuance costs totaled $ 0.3 million for the three months ended March 31, 2023 and $ 0.2 million for the three months ended March 31, 2022.

Unamortized debt issuance costs for the Revolver Facility and Term Loan as of June 30, 2023 and December 31, 2022 were $ 3.5 million and $ 4.2 million, respectively.

Amortization expense related to debt issuance costs totaled $ 0.4 million and $ 0.7 million for the three and six months ended June 30, 2023 , respectively, and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2022 , respectively.

This is reported in interest expense, net on the Consolidated Statements of Operations.

During the three months ended March 31, 2023 and March 31, 2022 , we recorded $ 0 and $ 8 thousand in debt issuance costs, respectively, which is included in debt obligations on the Consolidated Balance Sheets.

Related Party Transactions

3 unchanged sentences

This contributed an additional $ 3.4 thousand monthly.

P10 has paid $ 0.1 million and $ 0.1 million in rent to 210 Capital, LLC for the three months ended March 31, 2023 and March 31, 2022, respectively.

P10 has paid $ 0.1 million and $ 0.1 million in rent to 210 Capital, LLC for the three and six months ended June 30, 2023 , respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2022, respectively.

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

Certain expenses incurred by the Funds are paid upfront and are reimbursed from the Funds as permissible per fund agreements.

As of March 31, 2023, the total accounts receivable from the Funds totaled $ 16.0 million , of which $ 5.5 million related to reimbursable expenses and $ 10.5 million related to fees earned but not yet received.

As of June 30, 2023, the total accounts receivable from the Funds totaled $ 16.0 million , of which $ 3.5 million related to reimbursable expenses and $ 12.5 million related to fees earned but not yet received.

As of December 31, 2022 , the total accounts receivable from the Funds totaled $ 16.8 million, of which $ 6.2 million related to reimbursable expenses and $ 10.6 million related to fees earned but not yet received.

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As a result of new projects during 2021 and 2022, ECG will receive additional advisory fees from Enhanced PC totaling $ 22.0 million over 7 years , based on a declining fixed fee schedule.

An additional advisory fee was agreed to in 2023 as a result of new projects, this fee totals $ 9.5 million over 7 years on a declining fixed fee schedule.

This agreement is subject to customary termination provisions.

Since inception, $ 51.4 million of the total $ 107.5 million advisory fees have been recognized as revenue.

For the three months ended March 31, 2023 and March 31, 2022, advisory fees earned or recognized under this agreement were $ 4.9 million and $ 4.3 million, respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

As of March 31, 2023 and December 31, 2022, the balance was $ 33.8 million and $ 28.5 million and is included in due from related parties on the Consolidated Balance Sheets.

Advisory fees earned or recognized under this agreement were $ 5.3 million and $ 10.2 million for the three and six months ended June 30, 2023 , respectively, and $ 5.5 million and $ 11.1 million for the three and six months ended June 30, 2022 , respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company also incurs interest income on the balance outstanding.

Revenues from interest were $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2023, respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2022, respectively, and is reported in management and advisory fees on the Consolidated Statement of Operations.

As of June 30, 2023 and December 31, 2022, the balance was $ 38.7 million and $ 28.5 million, respectively, 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.

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Under this agreement, ECG pays ECH for the use of their employees to provide services to Enhanced PC at the direction of ECG.

The Company recognized $ 3.2 million and $ 2.2 million for the three months ended March 31, 2023 and March 31, 2022, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations.

The Company recognized $ 3.0 million and $ 6.2 million for the three and six months ended June 30, 2023 , respectively, and $ 2.4 million and $ 4.6 million for the three and six months ended June 30, 2022, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

On September 10, 2021, Enhanced entered into a strategic partnership with Crossroads Impact Corp ("Crossroads"), the parent company of Capital Plus Financial ("CPF"), a leading certified development financial institution.

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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.

In relation to the strategic partnership with Crossroads effective September 10, 2021 and the Crossroads Advisory Agreement, t he Company recognized $ 2.3 million and $ 0.4 million for the three months ended March 31, 2023 and March 31, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

In relation to the strategic partnership with Crossroads effective September 10, 2021 and the Crossroads Advisory Agreement, t he Company recognized $ 2.6 million and $ 5.0 million for the three and six months ended June 30, 2023 , respectively, and $ 0.6 million and $ 1.0 million for the three and six months ended June 30, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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.

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

The Company recognized $ 0.1 million of revenue for the three months ended March 31, 2023, which is included in management and advisory fees on the Consolidated Statements of Operations.

No revenues were recognized for the three months ended March 31, 2022.

The Company recognizes an annual fee of $ 20 thousand of which $ 5 thousand and $ 10 thousand has been recognized for the three and six months ended June 30, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

The Company recognized $ 20 thousand and $ 20 thousand for the three and six months ended June 30, 2022, respectively.

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.

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These lease agreements provide for various renewal options.

Rent expense for the various leased office space and equipment was approximately $ 0.8 million for the three months ended March 31, 2023 and $ 0.5 million for the three months ended March 31, 2022.

The following table presents information regarding the Company’s operating leases as of March 31, 2023:

Rent expense for the various leased office space and equipment was approximately $ 1.1 million and $ 1.9 million for the three and six months ended June 30, 2023 , respectively, and $ 0.8 million and $ 1.6 million for the three and six months ended June 30, 2022, respectively.

The following table presents information regarding the Company’s operating leases as of June 30, 2023:

Operating lease right-of-use assets

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Weighted-average discount rate

The future contractual lease payments as of March 31, 2023 are as follows:

The future contractual lease payments as of June 30, 2023 are as follows:

Total undiscounted lease payments

2 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Earnout Payment

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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 continued employment and, therefore, these earnout payments are recorded as compensation expense on the Consolidated Statements of Operations.

Payment to both sellers and employees is contingent on continued employment and, therefore, these earnout payments are recorded as compensation and benefits 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 March 31, 2023, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

As of June 30, 2023 , 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 three months ended March 31, 2023 and March 31, 2022, $ 5.9 million and $ 0.0 were recognized, respectively.

As of March 31, 2023 and December 31, 2022, the balance was $ 11.1 million and $ 5.2 million, respectively, and is included in accrued compensation and benefits in the Consolidated Balance Sheets.

For the three and six months ended June 30, 2023 , $ 5.9 million and $ 11.8 million, respectively, was recognized and for the three and six months ended June 30, 2022 , $ 0 and $ 0 was recognized, respectively.

As of June 30, 2023 and December 31, 2022, the balance was $ 17.0 million and $ 5.2 million, respectively, and is included in accrued compensation and benefits in the Consolidated Balance Sheets.

No payments have been made on the earnout.

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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 three months ended March 31, 2023 and March 31, 2022, the Company recognized $ 0.5 million and $ 0.0 of expense, respectively, which is included in compensation and benefits on the Consolidated Statement of Operations.

As of March 31, 2023 and December 31, 2022, the balance was $ 0.9 million and $ 0.4 million, respectively, and is included in accrued compensation and benefits on the Consolidated Balance Sheets.

For the three and six months ended June 30, 2023 , $ 0.5 million and $ 1.0 million, respectively, of expense was recognized and for the three and six months ended June 30, 2022 , no expense was recognized.

Recognized expense is included in compensation and benefits on the Consolidated Statement of Operations.

As of June 30, 2023 and December 31, 2022, the balance was $ 1.4 million and $ 0.4 million, respectively, and is included in accrued compensation and benefits on the Consolidated Balance Sheets.

Revenue Share Arrangement

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

The agreements require ECG to share in certain revenues earned with the third parties and also includes an option for the third parties 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 and estimable.

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 March 31, 2023, the Company has determined that the put options are probable and have accrued estimated contingent liabilities and contingent payments to customers.

As of March 31, 2023 and December 31, 2022, the balance was $ 14.3 million and $ 14.3 million, respectively, and is included in accrued contingent liabilities on the Consolidated Balance Sheets.

The associated contingent payments to customers asset balance was $ 13.3 million and $ 13.6 million as of March 31, 2023 and December 31, 2022, respectively.

The Company recognized $ 0.4 million and $ 0.0 of amortization of contingent payments to customers for the three months ended March 31, 2023 and March 31, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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

The contingent payments to customers are amortized and recorded within management and advisory fees on the Consolidated Statements of Operations over the revenue share agreement.

As of June 30, 2023, the Company has determined that the put options are probable and have accrued estimated contingent liabilities and contingent payments to customers.

As of June 30, 2023 and December 31, 2022, the balance was $ 14.3 million and $ 14.3 million, respectively, and is included in accrued contingent liabilities on the Consolidated Balance Sheets.

The associated contingent payments to customers asset balance was $ 12.9 million and $ 13.6 million as of June 30, 2023 and December 31, 2022, respectively.

The Company recognized $ 0.6 million and $ 0.2 million of amortization of contingent payments to customers for the three and six months ended June 30, 2023 , respectively, and $ 0 and $ 0 of amortization of contingent payments to customers for the three and six months ended June 30, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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

Contingencies

We may be involved, either as plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from time to time in the ordinary course of our business.

We evaluated all potentially significant litigation, government investigations, claims or assessments in which we are involved and do not believe that any of these matters, individually or in the aggregate, will result in losses that are materially in excess of amounts already recognized, if any.

We evaluated all potentially significant litigation, government investigations, claims or assessments in which we are involved and disclosed anything more likely than not to be recognized below.

We 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 2021, the Civil Enforcement Division of the Oregon Department of Justice (Oregon DOJ) initiated an investigation of certain transactions involving the Oregon Low Income Community Jobs Initiative, also known as the Oregon New

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Markets Tax Credit (NMTC) program, to which a subsidiary of Enhanced Capital, among others, was a party.

The Oregon DOJ contends that the subsidiary of Enhanced Capital omitted from the NMTC application information regarding the application of leveraged financing in the transaction and the sources and uses of funds in the proposed transactions.

No formal claims have been filed by the Oregon DOJ.

The Company continues to assert that it followed all program requirements and met all disclosure obligations.

The subsidiary of Enhanced Capital completed non-binding mediation in July 2023 and settlement discussions continue.

Based on our assessment of the current stage of this investigation and settlement, our financial results as of June 30, 2023, includes an immaterial accrual related thereto in accrued expenses on the Consolidated Balance Sheets and other (expense)/income on the Consolidated Statements of Operation.

At this time, we do not believe any outcome in this investigation will have a material adverse effect on our business, operating results, or financial position.

The Company calculates its tax provision using the estimated annual effective tax rate methodology.

1 unchanged sentence

To the extent that information is not available for the Company to fully determine the full year estimated impact of an item of income or tax adjustment, the Company calculates the tax impact of such item discretely.

The Company’s effective income tax rate for the three months ended March 31, 2023 was not meaningful due to the impact of a discrete item recognized in the tax rate for the period that related to windfall tax benefits associated with employee stock options exercised during the period.

Absent this discrete item, the Company’s effective tax rate would be 28.64 %.

Based on these methodologies, the Company’s effective income tax rate was 59.62 % and 29.80 % for the three and six months ended June 30, 2023, respectively.

The effective tax rate differs from the federal statutory rate of 21 % due to executive compensation subject to 162(m) limitation, state taxes, and a discrete period recognition of windfall tax adjustments related to options exercised year-to-date.

The Company's effective income tax rate for the three and six months ended June 30, 20 22 was 26.11 % and 25.94 %, respectively.

The effective tax rate differs from the federal statutory rate of 21 % due primarily to state and local income taxes.

The Company records deferred tax assets and liabilities for the future tax benefit or expense that will result from differences between the carrying value of its assets for income tax purposes and for financial reporting purposes, as well as for operating loss and tax credit carryovers.

1 unchanged sentence

This level will be estimated based on a number of factors, especially the amount of net deferred tax assets of the Company that are actually expected to be realized, for tax purposes, in the foreseeable future.

As of March 31, 2023, the Company has recorded a $ 12.8 million valuation allowance against deferred tax assets.

As of June 30, 2023, the Company has recorded a $ 12.8 million valuation allowance against deferred tax assets, primarily related to a note impairment.

There was no change to the valuation allowance during the period.

3 unchanged sentences

The Company is not currently under audit.

Tax years 2019 - 2021 remain open under statute for IRS examination of federal income tax returns.

State statutes remain open for the 2018 - 2021 years, depending on jurisdiction.

Stockholders' Equity

10 unchanged sentences

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.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

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.

2 unchanged sentences

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 March 31, 2023, there are 3,378,921 shares available for grant.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

A summary of stock option activity for the period ended March 31, 2023 is as follows:

As of June 30, 2023, there are 3,965,756 shares available for grant.

A summary of stock option activity for the period ended June 30, 2023 is as follows:

Weighted Average

6 unchanged sentences

Expired/Forfeited

Outstanding as of March 31, 2023

Exercisable as of March 31, 2023

The weighted average assumptions used in calculating the fair value of stock options granted during the three months ended March 31, 2023 and March 31, 2022 were as follows:

For the Three Months Ended March 31,

Outstanding as of June 30, 2023

Exercisable as of June 30, 2023

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 $ 8.1 million and $ 15.2 million for the three and six months ended June 30, 2023 , respectively, and $ 2.7 million and $ 4.2 million for the three and six months ended June 30, 2022, respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of June 30, 2023 was $ 7.1 million and is expected to be recognized over a weighted average period of 3.39 years.

Any future forfeitures will impact this amount.

The weighted average assumptions used in calculating the fair value of stock options granted during the six months ended June 30, 2023 and June 30, 2022 were as follows:

For the Six Months Ended June 30,

Expected life

8 unchanged sentences

Outstanding as of December 31, 2022

Outstanding as of March 31, 2023

Outstanding as of June 30, 2023

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

The Company has granted restricted stock units ("RSUs") to certain employees.

4 unchanged sentences

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 March 31, 2023, 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 $ 3.6 million has been recorded for the three months ended March 31, 2023 on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 6.9 million as of March 31, 2023.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

As of June 30, 2023 , certain performance metrics have been met and 348,931 units have been issued to specific employees.

The Company evaluates whether it is pro bable 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 $ 1.6 million and $ 5.2 million has been recorded for the three and six months ended June 30, 2023 , respectively, on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 5.3 million as of June 30, 2023.

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 March 31, 2023, no Hark Units have vested but the Company believes it is probable that the RSUs will be earned.

An expense of $ 0.3 million has been recorded for the three months ended March 31, 2023 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 Company expects the Hark Units to be issued in 2023.

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

As of June 30, 2023 , all Hark Units have vested and been issued.

An expense of $ 0.3 million has been recorded for the three and six months ended June 30, 2023 on the Consolidated Statements of Operations.

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.

2 unchanged sentences

Outstanding as of December 31, 2022

Outstanding as of March 31, 2023

The stock-based compensation expense was $ 7.1 million and $ 1.5 million for the three months ended March 31, 2023 and March 31, 2022, respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of March 31, 2023 was $ 7.0 million and is expected to be recognized over a weighted average period of 3.65 years.

Any future forfeitures will impact this amount.

Outstanding as of June 30, 2023

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

(Unaudited, dollar amounts stated in thousands, except share and per share amounts)

Earnings Per Share

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Diluted EPS reflects the potential dilution that could occur if shares of common stock were issued pursuant to our stock-based compensation awards.

For the three months ended March 31, 2023, diluted EPS reflects the potential dilution that could occur assuming that all units in P10 Intermediate that were granted as a result of the WTI acquisition are converted to shares of Class A common stock.

For the three and six months ended June 30, 2023, diluted EPS reflects the potential dilution that could occur assuming that all units in P10 Intermediate that were granted as a result of the WTI acquisition are converted to shares of Class A common stock.

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

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Numerator for basic calculation—Net income

12 unchanged sentences

Earnings per share—diluted

The computations of diluted earnings per share excluded 5.1 million options for the three months ended March 31, 2023, and 0.2 million options for the three months ended March 31, 2022, because the options were anti-dilutive.

The computations of diluted earnings per share on a weighted average basis excluded 5.2 million and 4.0 million options for the three and six months ended June 30, 2023 , respectively, and 1.4 million and 1.0 million options for the three and six months ended June 30, 2022 , because the options were anti-dilutive.

Subsequent Events

On May 12, 2023, P10’s Co-CEO’s, Robert Alpert and Clark Webb, signed revised employment agreements as a result of the restructuring that occurred within P10 entities for the WTI acquisition.

The revised agreements are now with P10 Intermediate Holdings, LLC rather than P10 Holdings, Inc.

due to the restructuring.

Also, clarifications on compensation structure are included in the revised employment agreements, which specify non-cash stock-based compensation value of $ 5.9 million each for 2023 performance.

The Board of Directors of the Company has declared a quarterly cash dividend of $ 0.0325 per share of Class A and Class B common stock, payable on June 20, 2023, to the holders of record as of the close of business on May 30, 2023.

In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after March 31, 2023, 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 cash dividend of $ 0.0325 per share of Class A and Class B common stock, payable on September 20, 2023, to the holders of record as of the close of business on August 31, 2023.

In accordance with ASC 855, Subsequent Events , the Company evaluated all material events or transactions that occurred after June 30, 2023, 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.

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-Q

Item 1. Financial Statements