What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-08-14 compared with 2023-05-15 · 150 added, 92 removed, 394 unchanged (38% of the section changed)

17 unchanged sentences

On October 13, 2022, we completed the acquisition of WTI that again further expanded on solutions available to our investors by entering into the venture debt space.

The Company The effect of this acquisition is reflected in our Consolidated Balance Sheet at December 31, 2022 and Consolidated Statement of Operations beginning with the period from October 13, 2022 to December 31, 2022 and forward.

The effect of this acquisition is reflected in our Consolidated Balance Sheet at December 31, 2022 and Consolidated Statement of Operations beginning with the period from October 13, 2022 to December 31, 2022 and forward.

The acquisition was accounted for as a business combination and WTI is reported as a consolidated subsidiary of P10.

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The timing and amount of any repurchases pursuant to the program will depend on various factors including, the market price of our Class A Common Stock, trading volume, ongoing assessment of our working capital needs, general market conditions, and other factors.

As of March 31, 2023, $21.1 million has been used to buy back shares under this program.

As of March 31, 2023, our private market solutions were comprised of the following:

As of June 30, 2023, $21.1 million has been used to buy back shares under this program.

As of June 30, 2023, our private market solutions were comprised of the following:

Private Equity Solutions (PES) .

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We are further differentiated by the scale, depth, diversity and accuracy of our constantly expanding proprietary private markets database that contains comprehensive information on more than 4,900 investment firms, 9,800 funds, 44,000 individual transactions, 29,000 private companies and 276,000 financial metrics.

As of March 31, 2023, PES managed $11.4 billion of FPAUM.

As of June 30, 2023, PES managed $11.8 billion of FPAUM.

Venture Capital Solutions (VCS).

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In addition, since 2011, we have partnered with Forbes to publish the Midas List, a ranking of the top value-creating venture capitalists.

As of March 31, 2023, VCS managed $5.6 billion of FPAUM.

As of June 30, 2023, VCS managed $5.8 billion of FPAUM.

Impact Investing Solutions (IIS).

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We are differentiated in both the breadth of impact areas served, the type of capital deployed and the duration of our track record.

We have collectively deployed over $5.6 billion into 850+ projects and businesses across 39 states since 1999.

We have invested $3.5 billion in Impact Assets across our Small Business Lending, Impact Real Estate and Climate Finance Strategies.

From inception in 1999 through June 30, 2023, inclusive of proprietary assets and assets managed by affiliates, Enhanced Capital has raised a total of $5.7 billion.

Of the total AUM, impact assets represent $3.5 billion invested in over 1,000 projects and businesses across 39 states, Washington DC, and Puerto Rico and does not include investments made by non-impact affiliates.

Investments in solar assets have generated over 1.6 billion KWh of renewable energy from inception to December 31, 2022.

As of March 31, 2023, IIS managed $1.9 billion of FPAUM .

As of June 30, 2023, IIS managed $1.9 billion of FPAUM .

Private Credit Solutions (PCS).

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We currently maintain 50+ active sponsor relationships and have 45+ platform investments.

As of March 31, 2023, PCS managed approximately $2.7 billion of FPAUM.

As of June 30, 2023, PCS managed approximately $2.7 billion of FPAUM.

Sources of Revenue

9 unchanged sentences

Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our primary funds comprise approximately $12.2 billion of our FPAUM as of March 31, 2023.

Our primary funds comprise approximately $13.0 billion of our FPAUM as of June 30, 2023.

Direct and Co-Investment Funds.

4 unchanged sentences

capital commitments, typically average ten to fifteen years, though they may vary by fund.

We offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit

offer direct and co-investment funds across our private equity, venture capital, impact investing and private credit solutions.

Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our direct investing platform comprises approximately $7.8 billion of our FPAUM as of March 31, 2023.

Our direct investing platform comprises approximately $7.8 billion of our FPAUM as of June 30, 2023.

Secondaries refer to investments in existing private markets funds through the acquisition of an existing interest in a private markets fund by one investor from another in a negotiated transaction.

4 unchanged sentences

Often, the fees are structured such that they step down, or decrease, over the life of the fund.

Our secondary funds comprise approximately $1.6 billion of our FPAUM as of March 31, 2023.

Our secondary funds comprise approximately $1.4 billion of our FPAUM as of June 30, 2023.

Operating Segments

22 unchanged sentences

The purview of private markets has meaningfully broadened over the last decade.

As investors increase their allocations to private markets investments, we believe the demand for asset class diversification will rise.

Furthermore, as part

of this evolution we believe investors will seek out private market solutions providers with scale and an ability to deliver multiple asset classes and vehicle solutions to streamline relationships and pursue cost efficiency.

As investors increase their allocations to

private markets investments, we believe the demand for asset class diversification will rise.

Furthermore, as part of this evolution we believe investors will seek out private market solutions providers with scale and an ability to deliver multiple asset classes and vehicle solutions to streamline relationships and pursue cost efficiency.

Our scalable business model is well positioned to expand and grow our footprint as we develop our position within the private markets ecosystem to further leverage our synergistic solutions offering.

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Referral fee revenue is recognized upon closing of opportunities where we have referred credit opportunities that do not match our investment criteria.

The Company recognizes an accrued contingent liability and contingent payments to customers 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.

The Company recognizes an accrued contingent liability and contingent payments to customers in our Consolidated Balance Sheets for agreements between ECG and third parties.

The agreements require 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 payments to customers asset associated with the agreement and will amortize the asset against revenue over the period the option is expected to be exercised.

The options to repurchase the revenue share are not exercisable until a certain period of time has lapsed per the agreements.

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

The Company has also recognized a contingent payments to customers asset associated with the agreement and will amortize the asset against revenue over the length of the management contracts.

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

Operating Expenses

Compensation and benefits are our largest expense and consists of salaries, bonuses, stock-based compensation, employee benefits and employer-related payroll taxes.

Compensation and benefits are our largest expense and consists of salaries, bonuses, stock-based compensation, earnout and bonus payments related to the acquisition of WTI, employee benefits and employer-related payroll taxes.

Despite our general operating leverage that exists, we expect to continue to experience an incremental rise in compensation and benefits expense commensurate with expected growth in headcount and with the need to maintain competitive compensation levels as we expand into new markets to create new products and services.

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Other Income (Expense)

Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs, amortization of original issue discount.

Interest expense includes interest paid and accrued on our outstanding debt, along with the amortization of deferred financing costs.

Income Tax Benefit (Expense)

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Results of Operations

For the three months ended March 31, 2023 and March 31, 2022.

For the Three Months Ended

For the three and six months ended June 30, 2023 and June 30, 2022.

For the three months

ended June 30,

For the six months

ended June 30,

(in thousands)

Management and advisory fees

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Interest expense, net

Other (expense)/income

Total other (expense)

Net (loss)/income before income taxes

Income tax benefit/(expense)

Three Months Ended March 31, 2023 and March 31, 2022

Our revenue is composed almost entirely of recurring management and advisory fees, with the vast majority of fees earned on committed capital that is typically subject to ten to fifteen year lock up agreements, therefore our average fee rates have remained stable at approximately 1% for the three months ended March 31, 2023 and March 31, 2022.

For the three months ended March 31, 2023 compared to the three months ended March 31, 2022, revenues increased by $14.0 million or 32% due to higher management fees from the impact of inorganic growth of $7.2 million driven by the acquisition of WTI and $7.0 million of organic growth across Bonaccord, ECG, RCP, and Truebridge.

Management and advisory fees increased by $13.6 million, or 32%, to $56.6 million for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022 due to inorganic growth due to the acquisition of WTI which brought $7.2 million of revenue in the first quarter of 2023 and organic FPAUM growth at RCP, TrueBridge, and ECG were the primary drivers of the increase in management and advisory fees of $6.6 million.

Catch-up fees for the three months ended March 31, 2023 were $3.0 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Other revenues, which represent ancillary elements of our business, increased by $0.4 million or 162% to $0.7 million for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022 driven primarily by an increase of $0.4 million of interest income in other revenue.

For the Three Months Ended

Net income before income taxes

Income tax (expense)

Three Months Ended June 30, 2023 and June 30, 2022

For the three months

ended June 30, 2023 compared to the three months ended June 30, 2022, revenues increased by $15.7 million or 34% due to higher management fees from the impact of inorganic growth of $6.9 million driven by the acquisition of WTI and $8.8 million of organic growth across Bonaccord, Hark, ECG, RCP, and Truebridge.

Management and advisory fees increased by $15.2 million, or 33%, to $61.7 million for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022 due to inorganic growth due to the acquisition of WTI which brought $6.9 million of revenue in the first quarter of 2023 and organic FPAUM growth at Bonaccord, Hark, RCP, TrueBridge, and ECG were the primary drivers of the increase in management and advisory fees of $8.3 million.

Catch-up fees for the three months ended June 30, 2023 were $4.7 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Other revenues, which represent ancillary elements of our business, increased by $0.5 million or 184% to $0.8 million for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022 driven primarily by an increase of $0.6 million of interest income in other revenue.

Six Months Ended June 30, 2023 and June 30, 2022

For the six months ended June 30, 2023 compared to the six months ended June 30, 2022, revenues increased by $29.7 million or 33% due to higher management fees from the impact of inorganic growth of $14.0 million driven by the acquisition of WTI and $15.7 million of organic growth across Bonaccord, Hark, ECG, RCP, and Truebridge.

Management and advisory fees increased by $28.8 million, or 32%, to $118.2 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 due to inorganic growth due to the acquisition of WTI which brought $14.0 million of revenue in the first quarter of 2023 and organic FPAUM growth at Bonaccord, Hark, RCP, TrueBridge, and ECG were the primary drivers of the increase in management and advisory fees of $14.8 million.

Catch-up fees for the six months ended June 30, 2023 were $7.8 million associated with the fund closings at Bonaccord, TrueBridge and RCP.

Other revenues, which represent ancillary elements of our business, increased by $0.9 million or 174% to $1.5 million for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 driven primarily by an increase of $0.7 million of interest income in other revenue.

For the three months

ended June 30,

For the six months

ended June 30,

OPERATING EXPENSES

(in thousands)

Compensation and benefits

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Operating Expenses

For the Three Months Ended March 31, 2023 and March 31, 2022

Total operating expenses increased by $20.7 million, or 65%, to $52.4 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

This increase was primarily due to increases in compensation and benefits as well as professional fees and amortization expense.

Compensation and benefits expense increased by $17.1 million, or 93%, to $35.6 million, for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

For the Three Months Ended June 30, 2023 and June 30, 2022

Total operating expenses increased by $21.2 million, or 68%, to $52.1 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

This increase was primarily due to increases in compensation and benefits as well as amortization expense.

Compensation and benefits expense increased by $18.5 million, or 104%, to $36.3 million, for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

The acquisition of WTI added $2.7 million of

compensation expense in the first half of 2023.

Stock compensation contributed to $5.3 million of the increase, of which $2.2 million relates to acquisition activity.

An additional $2.1 million of the increase in stock compensation expense is attributable to management compensation as a result of amended employment agreements executed during the second quarter of 2023.

The earn out and bonus accruals associated with the acquisition of WTI as discussed in Note 14 in the Notes to the Consolidated Financial Statements contributed $6.4 million.

Additionally, there was a $4.2 million increase associated with an increase in headcount and associated benefits across all subsidiaries.

Professional fees increased by $0.3 million, or 9%, to $3.0 million.

The primary cost in professional fees for the three months ended June 30, 2023 and 2022 are tax fees associated with year end reporting and strategic planning.

General, administrative and other increased by $0.8 million, or 19%, to $5.0 million, due primarily to the acquisition of WTI.

Contingent consideration expense increased by $0.2 million, to $0.1 million, for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

This was driven by remeasurement during the periods of contingent consideration payable in connection with the acquisitions of Hark and Bonaccord.

Amortization of intangibles increased by $1.2 million, or 19%, to $7.3 million, for the three months ended June 30, 2023 as compared to the three months ended June 30, 2022.

This is due to the acquisition of WTI.

For the Six Months Ended June 30, 2023 and June 30, 2022

Total operating expenses increased by $41.9 million, or 67%, to $104.5 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

This increase was primarily due to increases in compensation and benefits as well as amortization expense.

Compensation and benefits expense increased by $35.6 million, or 98%, to $72.0 million, for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The increase was driven by a number of factors.

The acquisition of WTI added $3.2 million of compensation expense in the first quarter of 2023.

The acquisition of WTI added $5.9 million of compensation expense in the first half of 2023.

Stock compensation contributed to $10.9 million of the increase, of which $6.7 million relates to acquisition activity.

Management compensation contributed to the increase in stock compensation by $2.1 million as a result of amended employment agreements executed during the second quarter of 2023.

The earn out and bonus accruals associated with the acquisition of WTI as discussed in Note 14 in the footnotes to the consolidated financial statements contributed $12.8 million.

1 unchanged sentence

Professional fees increased by $1.5 million, or 28%, to $6.8 million.

The primary cost in professional fees for the three months ended March 31, 2023 and 2022 are tax fees associated with year end reporting and strategic planning.

The primary cost in professional fees for the six months ended June 30, 2023 and 2022 are tax fees associated with year end reporting and strategic planning and audit expenses.

General, administrative and other increased by $1.5 million, or 18%, to $9.9 million, due primarily to the acquisition of WTI.

Contingent consideration expense increased by $0.3 million, to $0.4 million, for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

This was driven by remeasurement during the first quarter of 2023 of the contingent consideration payable in connection with the acquisitions of Hark and Bonaccord.

Amortization of intangibles increased by $1.1 million, or 17%, to $7.2 million, for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

Contingent consideration expense increased by $0.5 million, to $0.5 million, for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

This was driven by remeasurement during the periods of contingent consideration payable in connection with the acquisitions of Hark and Bonaccord.

Amortization of intangibles increased by $2.2 million, or 18%, to $14.6 million, for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

This is due to the acquisition of WTI.

Other Income (Expense)

For the Three Months Ended March 31, 2023 and March 31, 2022

Other expenses increased by $4.0 million, or 379%, to $5.1 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

For the Three Months Ended June 30, 2023 and June 30, 2022

Other expenses increased by $5.5 million, or 753%, to $6.3 million for the three months ended June 30, 2023 compared to the three months ended June 30, 2022.

This increase was driven by a rise in interest expense of $3.9 million.

The increase in interest expense correlates to the increase in the principal balance outstanding of our Revolving Credit Facility and Term Loan of $96.8 million from the first quarter of 2022 to the first quarter of 2023 as well as rising interest rates.

This primarily relates to the acquisition of WTI.

The increase in interest expense correlates to the increase in the principal balance outstanding of our Revolving Credit Facility and Term Loan of $84.3 million from the second quarter of 2022 to the second quarter of 2023 as well as rising interest rates.

The increase in principal balances primarily relates to the acquisition of WTI.

For the Six Months Ended June 30, 2023 and June 30, 2022

Other expenses increased by $9.5 million, or 532%, to $11.3 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

This increase was driven by a rise in interest expense of $7.7 million.

The increase in interest expense correlates to the increase in the principal balance outstanding of our Revolving Credit Facility and Term Loan of $84.3 million from the first six months of 2022 to the first six months of 2023 as well as rising interest rates.

The increase in principal balances primarily relates to the acquisition of WTI.

Income Tax Expense/Benefit

For the Three Months Ended March 31, 2023 and March 31, 2022

Income tax benefit increased by $3.7 million to $1.0 million for the three months ended March 31, 2023 compared to an expense of $2.8 million for the three months ended March 31, 2022.

The increase was primarily due to a discrete item during 2023.

For the Three Months Ended June 30, 2023 and June 30, 2022

Income tax expense decreased by $1.9 million to $2.0 million for the three months ended June 30, 2023 compared to an expense of $3.9 million for the three months ended June 30, 2022.

The decrease was due to lower pre-tax income during the period.

For the Six Months Ended June 30, 2023 and June 30, 2022

Income tax expense decreased by $5.6 million to $1.0 million for the six months ended June 30, 2023 compared to an expense of $6.6 million for the six months ended June 30, 2022.

The decrease was due to lower pre-tax income during the period.

The following table provides a period-to-period roll-forward of our fee paying assets under management on a pro forma basis as if WTI was acquired on January 1, 2022.

For the Three Months Ended

For the three months

ended June 30,

For the three months

ended June 30,

For the six months

ended June 30,

For the six months

ended June 30,

(in millions)

Balance, Beginning of Period

9 unchanged sentences

The following table provides a period-to-period roll-forward of our fee paying assets under management on an actual basis.

For the Three Months Ended

For the three months

ended June 30,

For the three months

ended June 30,

For the six months

ended June 30,

For the six months

ended June 30,

(in millions)

Balance, Beginning of Period

8 unchanged sentences

(3) Net asset value change consists primarily of the impact of market value appreciation (depreciation) from funds that earn fees on a net asset value basis.

FPAUM as of March 31, 2023

FPAUM increased by $0.4 billion, or 1.9%, to $21.6 billion on a pro forma basis and $0.4 billion, or 1.9%, to $21.6 billion on an actual basis for the three months ended March 31, 2023, due primarily to an increase in capital raised and deployed from our private equity and venture capital solutions and offset by expirations.

Our FPAUM growth and concentration across solutions and vehicles has been relatively consistent over time but can vary in particular periods due to the systematic fundraising cycles of new funds, which typically lasts 12-24 months.

We expect to continue to expand our fundraising efforts and grow FPAUM with the launch of new specialized investment vehicles and asset class solutions.

FPAUM as of March 31, 2022

FPAUM increased by $0.3 billion, or 1.9%, to $17.6 billion on an actual basis and $0.3 billion, or 1.3%, to $19.3 billion on a pro forma basis for the three months ended March 31, 2022.

The increase is due primarily to an increase in capital raised and deployed from our private equity and venture capital solutions at RCP and TrueBridge which is offset by some expirations.

FPAUM as of June 30, 2023

FPAUM increased by $0.6 billion or 2.6% to $22.2 billion on a pro forma basis and actual basis for the three months ended June 30, 2023, due primarily to an increase in capital raise and deployed from our private equity and venture capital solutions and offset by stepdowns and expirations.

FPAUM increased by $1.0 billion, or 4.5%, to $22.2 billion on a pro forma basis and actual basis for the six months ended June 30, 2023, due primarily to an increase in capital raised and deployed from our private equity and venture capital solutions and offset by stepdowns and expirations.

18 unchanged sentences

(in thousands)

Depreciation & amortization

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Selected Statements of Financial Position

As of June 30,

(in thousands)

3 unchanged sentences

Stockholders’

There was an increase in cash and cash equivalents of $6.4 million from December 31, 2022 to $25.1 million as of March 31, 2023 primarily due to timing of debt facility maturities and associated repayments.

There was a decrease in goodwill and intangible assets of $7.2 million due to amortization of intangibles during the three months ended March 31, 2023.

There was a decrease in cash and cash equivalents of $4.6 million from December 31, 2022 to $24.9 million as of June 30, 2023 primarily due to timing of debt facility maturities and associated repayments.

There was a decrease in goodwill and intangible assets of $14.5 million due to amortization of intangibles during the six months ended June 30, 2023.

Remaining total assets increased in the same period by $9.9 million.

The increase is driven by an increase in accounts

receivable from related parties which is entirely due to ECG's Advisory Agreement with Enhanced PC and Crossroads.

Debt obligations declined by $5.3 million which is driven by revolver activity during the period.

The increase is driven by an increase in accounts receivable from related parties which is primarily due to ECG's Advisory Agreement with Enhanced PC and Crossroads.

Debt obligations declined by $17.5 million which is driven by payments towards the revolver and term loan balances during the period.

Historical Liquidity and Capital Resources

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The Revolving Credit Facility has no contractual principal repayments until maturity, which is December 22, 2025 for both facilities.

As of March 31, 2023, the Term Loan with a balance of $209.8 million is incurring interest at a weighted average SOFR rate of 6.62%.

As of March 31, 2023, the Revolver Facility is split into eight tranches.

The total principal outstanding is $77.9 million and the average SOFR rate amongst the tranches is 6.20%.

The tranches are all incurring interest at a set rate for three month periods and are subsequently reset at the current SOFR rate.

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 of less than or equal to 3.50.

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.

The Company has incurred $5.2 million in interest expense for the three months ended March 31, 2023.

In September 2022, the Company exercised the accordion feature of the Credit Agreement.

1 unchanged sentence

The Company incurred $1.4 million of up front fees during the exercise which are reflected as debt obligations on the Consolidated Balance Sheets.

Three Months Ended March 31, 2023 Compared to the Three Months Ended March 31, 2022

The following table reflects our cash flows for the three months ended March 31, 2023 and 2022:

For the Three Months

Ended March 31,

As of June 30, 2023, the Term Loan with a balance of $207.2 million is incurring interest at a weighted average SOFR rate of 7.28%.

As of June 30, 2023, the Revolver Facility is split into six tranches.

The total principal outstanding is $68.0 million and the average SOFR rate amongst the tranches is 7.31%.

The tranches are all incurring interest at a set rate for one, three, or six month periods and are subsequently reset at the current SOFR rate.

Refer to Note 12 for further details provided on the tranches and associated interest periods.

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

The Company has incurred $10.6 million in interest expense for the six months ended June 30, 2023.

Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

The following table reflects our cash flows for the six months ended June 30, 2023 and 2022:

For the Six Months

Ended June 30,

(in thousands)

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Operating Activities

Three Months Ended March 31, 2023 and March 31, 2022

Cash from operating activities increased by $13.2 million, or 173%, to $20.8 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022.

Six Months Ended June 30, 2023 and June 30, 2022

Cash from operating activities increased by $6.0 million, or 26%, to $29.2 million for the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The components of this net increase primarily consisted of the following changes in operating assets and liabilities:

An increase in revenues of $29.7 million associated with the acquisition of WTI as well as additional fund closings;

A decrease of $0.9 million in the current quarter of cash received related to the Advisory Agreement at Enhanced compared to the first quarter in 2022.

A decrease of $10.8 million in the current year of cash received related to the Advisory Agreement at Enhanced compared to the first half of 2022;

An increase of restricted cash used of $7.0 million related to operations of Enhanced projects;

An increase of cash used for bonus payments of $1 million as a result of timing.

Investing activities

Three Months Ended March 31, 2023 and March 31, 2022

The cash used in investing activities increased by $0.3 million, or 65%, to ($0.7) million, for the three months ended March 31, 2023 as compared to the three months ended March 31, 2022.

This increase in cash used was due to additional property and equipment in the first quarter of 2023.

Six Months Ended June 30, 2023 and June 30, 2022

The cash used in investing activities increased by $0.3 million, or 96%, to ($0.6) million, for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022.

This increase in cash used was due to additional property and equipment purchased in the first half of 2023.

Financing Activities

Three Months Ended March 31, 2023 and March 31, 2022

We recorded a net $13.7 million for the three months ended March 31, 2023 for cash used in financing activities, as compared to cash used in financing activities of $25.7 million for the three months ended March 31, 2022.

The change is attributed to timing differences of revolver tranches subject to repayment.

Six Months Ended June 30, 2023 and June 30, 2022

We recorded a net $33.2 million for the six months ended June 30, 2023 for cash used in financing activities, as compared to cash used in financing activities of $40.9 million for the six months ended June 30, 2022.

The change is attributed to timing differences of revolver tranches subject to repayment and payments of contingent consideration.

Future Sources and Uses of Liquidity

5 unchanged sentences

In the ordinary course of business, we enter contractual arrangements that require future cash payments.

The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of March 31, 2023:

The following table sets forth information regarding our anticipated future cash payments under our contractual obligations as of June 30, 2023:

(in thousands)

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Entities that do not qualify as VIEs are assessed for consolidation as voting interest entities under the voting interest model.

Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest or other means.

Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest

or other means.

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

27 unchanged sentences

Interest Rate Risk

As of March 31, 2023, we had $209.8 million in outstanding principal in Term Loan under our Term Loan and Revolving Credit Facility.

As of June 30, 2023, we had $207.2 million in outstanding principal in Term Loan under our Term Loan and Revolving Credit Facility.

The annual interest rate on the Term Loan is based on SOFR, subject to a floor of 0.10%, plus 2.00%.

On March 31, 2023, the interest rate on these borrowings was 2.1% + SOFR.

On June 30, 2023, the interest rate on these borrowings was 2.1% + SOFR.

We estimate that a 100-basis point increase in the interest rate would result in an approximately $2.1 million increase in interest expense related to the loan over the next 12 months.

12 unchanged sentences

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

6 unchanged sentences

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 2. Management’s Discussion and Analysis