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Item 8. Financial Statements and Supplementary Data

2024-03-13 compared with 2023-03-27 · 532 added, 493 removed, 724 unchanged (59% of the section changed)

Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (Auditor Firm ID:

Consolidated Balance Sheets as of December 31, 2023 and 2022

Consolidated Statements of Operations for the Years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Changes in Stockholders’

Equity for the Years ended December 31, 2022, 2021, and 2020

Consolidated Statements of Changes in Equity for the Years ended December 31, 2023, 2022, and 2021

Consolidated Statements of Cash Flows for the Years ended December 31, 2023, 2022, and 2021

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We have audited the accompanying consolidated balance sheets of P10, Inc.

and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, changes in stockholders’

equity, and cash flows for each of the years in the three-year period ended December 31, 2022, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023, in conformity with U.S.

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Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

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

Accordingly, we express no such opinion.

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We believe that our audits provide a reasonable basis for our opinion.

We have served as the Company’s auditor since 2017.

Chicago, Illinois

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Accounts receivable

Note receivable

Notes receivable

Due from related parties

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Intangibles, net

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES AND EQUITY

Accounts payable

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Contingent consideration

Accrued contingent liability

Accrued contingent liabilities

Deferred revenues

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Total liabilities

STOCKHOLDERS' EQUITY:

COMMITMENTS AND CONTINGENCIES (NOTE 14)

Class A common stock, $ 0.001 par value;

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Accumulated deficit

Noncontrolling interest

Total stockholders' equity

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

Noncontrolling interests

TOTAL LIABILITIES AND EQUITY

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

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Accounts receivable

Note receivable

Notes receivable

Due from related parties

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Accrued compensation and benefits

Other liabilities

Contingent consideration

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Deferred revenues

Lease liabilities

Long-term lease obligation

Debt obligations

Deferred tax liabilities, net

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Loss on extinguishment of debt

Other (expense)/income

Total other (expense)

Net income before income taxes

Income tax benefit/(expense)

Net (loss)/income before income taxes

Income tax (expense)/benefit

NET (LOSS)/INCOME

preferred dividends attributable to redeemable

noncontrolling interest

net income attributable to noncontrolling interest in P10 Intermediate

NET INCOME ATTRIBUTABLE TO P10

noncontrolling interests

net loss/(income) attributable to noncontrolling interests in P10 Intermediate

NET (LOSS)/INCOME ATTRIBUTABLE TO P10

Earnings per share

Basic earnings per share

Diluted earnings per share

Dividends paid per share

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

Weighted average shares outstanding, basic

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

Consolidated Statements of Changes in Stockholders’

Consolidated Statements of Changes in Equity

(in thousands)

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Non Controlling

Stockholders'

Paid-in-capital

Balance at December 31, 2020

Stock-based compensation

Net income attributable to P10

Balance at December 31, 2020

Net income attributable to P10

Stock-based compensation

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Exchange of Class B common stock for Class A common stock

Exercise of stock options

Repurchase of common stock for employee tax witholding

Exercise of stock options (net of tax)

Repurchase of common stock for employee tax withholding

Stock repurchase

Settlement of stock options

Capital contributions from non-controlling interest

Distributions to non-controlling interest

Capital contributions from non-controlling interests, net

Distributions to non-controlling interests

Dividends declared

Dividends paid

Dividends paid per share $ 0.09

Balance at December 31, 2022

Stock-based compensation

Issuance of restricted stock awards

Issuance of restricted stock units

Exchange of Class B common stock for Class A common stock

Exercise of stock options (net of tax)

Repurchase of common stock for employee tax withholding

Stock repurchase

Distributions to non-controlling interests

Dividends declared

Dividends paid per share $ 0.13

Balance at December 31, 2023

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

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CASH FLOWS FROM OPERATING ACTIVITIES

Adjustments to reconcile net income to net cash provided by operating

Net (loss)/income

Adjustments to reconcile net (loss)/income to net cash provided by operating

Stock-based compensation

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Income from unconsolidated subsidiaries

Deferred tax expense (benefit)

Deferred tax expense/(benefits)

Loss on extinguishment of debt

Measurement of contingent payments to customers

Amortization of contingent payment to customers

Remeasurement of contingent consideration

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Other liabilities

Contingent consideration

Deferred revenues

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Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS USED IN INVESTING ACTIVITIES

Acquisitions, net of cash acquired

Purchase of intangible assets

Note receivable

Proceeds from note receivable

Funding of notes receivable

Proceeds from notes receivable

Investments in unconsolidated subsidiaries

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Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Issuance of redeemable noncontrolling interests

CASH FLOWS USED IN FINANCING ACTIVITIES

Repayment of notes payable to sellers

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Dividends paid

Distributions to partners

Debt issuance costs

Net cash provided by financing activities

Net cash (used in)/provided by financing activities

Net change in cash, cash equivalents and restricted cash

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Net cash paid for income taxes

NON-CASH OPERATING, INVESTING AND FINANCING ACTIVITIES

Issuance of redeemable noncontrolling interests in acquisition

Issuance of redeemable noncontrolling interests in exchange for tax amortization benefits

Issuance of noncontrolling interest in acquisition

Increase to purchase price of Enhanced for working capital adjustment

NON-CASH INVESTING AND FINANCING ACTIVITIES

Issuance of noncontrolling interests in acquisition

Additions to right-of-use assets

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Additions to property and equipment

Additions to accrued compensation and benefits

Additions to contingent consideration

Dividends declared

Fair value adjustment to contingent consideration

RECONCILIATION OF CASH, CASH EQUIVALENTS AND

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In connection with the reorganization, P10, Inc.

("P10") became the parent company and all of the existing equity of P10 Holdings, and its consolidated subsidiaries, including the convertible preferred units of P10 Intermediate, as defined below, were converted into common stock of P10.

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

The offering and reorganization included a reverse stock split of P10 Holdings common stock on a 0.7-for-1 basis pursuant to which every outstanding share of common stock decreased to 0.7 shares.

The number of shares have been retrospectively adjusted within these financial statements to reflect this stock split.

The reorganization was considered a transaction between entities under common control.

As a result, the consolidated financial statements for periods prior to the reorganization and IPO are the consolidated financial statements of P10 Holdings as the predecessor to P10 for accounting and reporting purposes.

Following the reorganization and IPO, P10 has two classes of common stock, Class A common stock and Class B common stock.

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

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

Our mission is to provide our investors differentiated access to a broad set of solutions and investment vehicles across a multitude of asset classes and geographies.

Our existing portfolio of solutions across private equity, venture capital, private credit and impact investing support our mission by offering a comprehensive set of investment vehicles to our investors, including primary fund of funds, secondary investment, direct investment and co-investments, alongside separate accounts (collectively the “Funds”).

The direct and indirect subsidiaries of the Company include P10 Holdings, P10 Intermediate Holdings, LLC (“P10 Intermediate”), which owns the subsidiaries P10 RCP Holdco, LLC (“Holdco”), Five Points Capital, Inc.

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

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

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and became a non-operating company focused on monetizing our retained intellectual property and acquiring profitable businesses.

For the period from December 2016 through September 2017, our business primarily consisted of cash, certain retained intellectual property assets and our net operating losses (“NOLs”) and other tax benefits.

On March 22, 2017, we filed for re-organization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization.

On March 22, 2017, we filed for reorganization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization.

The Company emerged from bankruptcy on May 3, 2017.

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lower middle market.

In 2022, Five Points established the Reynolda brand that specializes in direct equity funds.

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

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

On December 14, 2020, the Company completed the acquisition of 100 % of the equity interest in ECG, and a noncontrolling interest in Enhanced Capital Partners, LLC (“ECP”, and collectively with ECG, “Enhanced”).

Enhanced undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

On December 14, 2020, the Company completed the acquisition of 100 % of the equity interest in ECG, and a noncontrolling interest in Enhanced Capital Partners, LLC (“ECP”) (collectively, “Enhanced”).

Enhanced undertakes and manages equity and debt investments in impact initiatives across North America, targeting underserved areas and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing.

and other socially responsible end markets including renewable energy, historic building renovations, and affordable housing.

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

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Hark is engaged in the business of making loans to portfolio companies that are owned or controlled by financial sponsors, such as private equity funds or venture capital funds, and which do not meet traditional direct lending underwriting criteria but where the repayment of the loan by the portfolio company is guaranteed by its financial sponsor.

See Note 3 for additional information on these acquisitions.

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

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

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

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

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

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

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

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

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

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

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

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

Noncontrolling interests 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 in accordance with the terms of the P10 Intermediate operating agreement.

On October 20, 2023, the Company entered into an executive transition agreement with each of Mr.

Alpert and Mr.

Webb (each, a “Transition Agreement”).

Pursuant to the Transition Agreements, Mr.

Alpert and Mr.

Webb ceased to serve as Co-Chief Executive Officer, and Mr.

Alpert and Mr.

Webb were appointed as Executive Chairman and Executive Vice Chairman, respectively, for a one-year period.

Additionally, Mr.

Webb's Transition Agreement provides a one year transition period to continue serving the Company in a mergers and acquisitions capacity.

Effective October 23, 2023, the board of the Company appointed Luke A.

Sarsfield III as Chief Executive Officer (“CEO”) of the Company.

In connection with his appointment as CEO, the Company entered into an employment agreement with Mr.

Sarsfield (the “Employment Agreement”) setting forth the terms of his employment and compensation.

In connection with both the Transition Agreements and the Employment Agreement, provisions were made for severance and sign-on compensation, respectively.

The associated expenses were recorded in compensation and benefits on the Consolidated Statement of Operations.

Significant Accounting Policies

Basis of Presentation

The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”).

The accompanying Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Management believes it has made all necessary adjustments so that the Consolidated Financial Statements are presented fairly and that estimates made in preparing the Consolidated Financial Statements are reasonable and prudent.

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All intercompany transactions and balances have been eliminated upon consolidation.

Certain entities in which the Company holds an interest are investment companies that follow specialized accounting rules under U.S.

GAAP and reflect their investments at estimated fair value.

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

Principles of Consolidation

The Company performs the variable interest analysis for all entities in which it has a potential variable interest.

If the Company has a variable interest in the entity and the entity is a variable interest entity (“VIE”), we will also analyze whether the Company is the primary beneficiary of this entity and if consolidation is required.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Principles of Consolidation

The Company performs the variable interest analysis for all entities in which it has a potential variable interest.

Generally, VIEs are entities that lack sufficient equity to finance their activities without additional financial support from other parties, or whose equity holders, as a group, lack one or more of the following characteristics:

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To determine a VIE's primary beneficiary, we perform a qualitative assessment to determine which party, if any, has the power to direct activities of the VIE and the obligation to absorb losses and/or receive its benefits.

This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determine whether we, or another party, has the power to direct those activities.

This assessment involves identifying the activities that most significantly impact the VIE's economic performance and determining whether we, or another party, has the power to direct those activities.

When evaluating whether we are the primary beneficiary of a VIE, we perform a qualitative analysis that considers the design of the VIE, the nature of our involvement and the variable interests held by other parties.

See Note 7 for further information.

The Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity.

Primarily due to the governance structure at subsidiaries, the Company has determined that certain of its subsidiaries are VIEs, and that the Company is the primary beneficiary of the entities, because it has the power to direct activities of the entities that most significantly impact the VIE’s economic performance and has a controlling financial interest in each entity.

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

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

As a result of the reorganization in 2021, and reaffirmed after the 2022 restructure, it was determined that P10 Intermediate no longer qualifies as a VIE, but would still be consolidated under the voting interest model.

This change has been retrospectively adjusted.

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

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

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

Reclassifications

Certain reclassifications have been made within the Consolidated Financial Statements to conform prior periods with current period presentation.

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

Use of Estimates

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Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made within the Consolidated Financial Statements to conform prior periods with current period presentation.

Cash and Cash Equivalents

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As of December 31, 2023, and December 31, 2022, cash equivalents include money market funds of $ 11.1 million and $ 7.8 million, respectively, which approximates fair value.

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

The Company believes it is not exposed to any significant credit risk on cash.

Restricted Cash

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

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.

The Company's credit risk in the event of failure of these financial institutions is represented by the difference between the FDIC limit and the total amounts on deposit.

Management monitors the financial institutions' credit

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

worthiness in conjunction with balances on deposit to minimize risk.

The Company from time to time may have amounts on deposit in excess of the insured limits.

Restricted Cash

Restricted cash as of December 31, 2023 and December 31, 2022 was primarily cash on deposit from third parties related to pending tax credit projects.

There are deposit liabilities associated with restricted cash in other liabilities on the Consolidated Balance Sheets.

Accounts Receivable and Due from Related Parties

Accounts receivable is equal to contractual amounts reduced for allowances, if applicable.

The Company considers accounts receivable to be fully collectible;

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

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

Management fees are collected on a quarterly basis.

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

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

Due from related parties represents receivables from the Funds for reimbursable expenses and management fees collected by a related party of RCP 2 that are owed to RCP 2.

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

These amounts are expected to be fully collectible.

Note Receivable

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

Notes Receivable

Notes receivable is related to contractual amounts owed from signed, secured promissory notes with BCP Partners Holdings, LP ("BCP") as well as certain employees.

In addition to contractual amounts, borrowers are obligated to pay interest on outstanding amounts.

The Company considers the note receivable to be fully collectible;

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

Refer to Note 6 for further information.

Current Expected Credit Losses

We evaluate our accounts receivable, due from related parties, and notes receivable using the current expected credit loss model.

We determine a current estimate of all expected credit losses over the life of each financial instrument, which may result in recognition of credit losses on loans and receivables before an actual event of default.

We establish reserves for any estimated credit losses with a corresponding charge in our Consolidated Statements of Operations.

The Company estimates that accounts receivable, due from related parties, and notes receivable are fully collectible based on historical events, current conditions, and reasonable and supportable forecasts;

accordingly, no allowances have been established as of December 31, 2023 and December 31, 2022 .

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

Prepaid Expenses and Other Assets

Prepaid expenses and other assets consist primarily of prepaid expenses related to technology, insurance and professional fees.

From time to time, there are also investments in allocable state tax credits on the Consolidated Balance Sheets due to timing differences associated with the purchase and sale of state tax credits in the tax credit finance business.

As of December 31, 2023 and December 31, 2022, respectively, there is $ 9.6 million and $ 0.6 million within prepaid expenses and other assets on the Consolidated Balance Sheets associated with investments in allocable state tax credits.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Investment in Unconsolidated Subsidiaries

For equity investments in entities that we do not control, but over which we exercise significant influence, we use the equity method of accounting.

The equity method investments are initially recorded at cost, and their carrying amount is adjusted for the Company’s share in the earnings or losses of each investee, and for distributions received.

The Company discontinues applying the equity method if the investment (and net advances) is reduced to zero and shall not record additional losses unless the Company has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee.

The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

For certain entities in which the Company does not have significant influence and fair value is not readily determinable, we value these investments under the measurement alternative.

Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 825, Financial Instruments, requires equity securities to be recorded at cost and adjusted to fair value at each reporting period.

The Company accounts for its investment in ECP, Enhanced PC, and the ECG’s asset management businesses using the equity method of accounting.

For certain entities in which the Company does not have significant influence and fair value is not readily determinable, these investments are not accounted for on the equity method, but instead as equity securities and we value these investments under the measurement alternative.

However, the guidance allows for a measurement alternative, which is to record the investments at cost, less impairment, if any, and subsequently adjust for observable price changes of identical or similar investments of the same issuer.

The Company accounts for its investment in ECG's tax credit finance division under this method.

Distributions from investments in unconsolidated subsidiaries are presented on the accompanying Consolidated Statements of Cash Flows consistent with the nature of the underlying distribution.

Property and Equipment

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

The carrying value of long-lived assets are determined to not be recoverable if the undiscounted estimated future net operating cash flows directly related to the asset or asset group, including any disposal value, is less than the carrying amount of the asset.

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

The Company’s leases primarily consist of operating leases for various office spaces.

Right-of-use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the leases.

The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term.

The Company’s leases primarily consist of operating leases for various office spaces.

The Company’s right-of-use assets and lease liabilities are recognized at lease commencement based on the present value of lease payments over the lease term.

Lease right-of-use assets include initial direct costs incurred by the Company and are presented net of deferred rent, lease incentives and certain other existing lease liabilities.

Absent an implicit interest rate in the lease, the Company uses its incremental borrowing rate, adjusted for the effects of collateralization, based on the information available at commencement in determining the present value of lease payments.

The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise those options.

The Company’s lease terms may include options to extend or terminate

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

the lease, and the Company would account for this when it is reasonably certain that the Company will exercise those options.

Lease expense is recognized on a straight-line basis over the lease term.

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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 options to repurchase the revenue share are exercisable starting in July 2025.

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

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

The 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.

The Company will remeasure each reporting period.

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

The Company will reassess the fair value at each reporting period.

Refer to Note 14 for further information.

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Finite-lived management and advisory contracts, which relate to acquired separate accounts and funds and investor/customer relationships with a specified termination date, are amortized in line with contractual revenue to be received, which range between 7 and 16 years .

Certain of our trade names are considered

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

to have finite-lives.

Certain of our trade names are considered to have finite-lives.

Finite-lived trade names are amortized over 10 years in line with the pattern in which the economic benefits are expected to occur.

Goodwill is reviewed for impairment at least annually as of September 30 utilizing a qualitative or quantitative approach and more frequently if circumstances indicate impairment may have occurred.

The impairment testing for goodwill under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s reporting unit is less than the respective carrying value.

The reporting unit is the reporting level for testing the impairment of goodwill.

If it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then the difference is recorded as an impairment (not to exceed the carrying amount of goodwill).

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

Goodwill and indefinite lived intangibles are reviewed for impairment at least annually as of September 30 utilizing a qualitative or quantitative approach and more frequently if circumstances indicate impairment may have occurred.

The impairment testing for goodwill and indefinite lived intangibles under the qualitative approach is based first on a qualitative assessment to determine if it is more likely than not that the fair value of the Company’s reporting unit or asset is less than the respective carrying value.

The reporting unit is the reporting level for testing the impairment of goodwill and indefinite lived intangibles.

If it is determined that it is more likely than not that an asset's or reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit or asset and record an impairment charge for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill or indefinite lived intangible).

At December 31, 2023 and December 31, 2022 and for the years then ended, the Company determined that there was no impairment to goodwill and indefinite lived intangibles.

Contingent Consideration

Contingent consideration is initially measured at fair value on the date of the acquisition.

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

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

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 December 31, 2023, the contingent consideration recorded related to the acquisition of

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Bonaccord on the Consolidated Balance Sheets.

As of December 31, 2022, the con tingent consideration recorded related to the acquisitions of Hark and Bonaccord on the Consolidated Balance Sheets.

Accrued Compensation and Benefits

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

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

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

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

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

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

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

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

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

Refer to Note 14 for further information.

Debt Issuance Costs

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As these costs are amortized, they are included in interest expense, net within our Consolidated Statements of Operations.

Noncontrolling Interest

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

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

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

Noncontrolling Interests

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

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

Net income attributable to P10, as reported in the Consolidated Statements of Operations, is presented net of the portion of net (loss)/income attributable to holders of non-controlling interest.

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

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Fair Value Measurements

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As of December 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:

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

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

Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date.

The carrying values of financial instruments comprising cash and cash equivalents, prepaid assets, accounts payable, accounts receivable and due from related parties approximate fair values due to the short-term maturities of these instruments.

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

The Company has a contingent consideration liability related to the acquisitions of Hark and Bonaccord that is measured at fair value and is remeasured on a recurring basis.

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

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

Level 3—Assets were valued using unobservable inputs in which little or no market data exists as reported by the respective institutions at the measurement date.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

The carrying values of financial instruments comprising cash and cash equivalents, restricted cash, prepaid assets, accounts payable, accounts receivable and due from related parties approximate fair values due to the short-term maturities of these instruments.

We estimate the fair value of the credit facility using level two inputs.

We discount the future cash flows using current interest rates at which we could obtain similar borrowings.

The Company has a contingent consideration liability related to the acquisition of Bonaccord that is measured at fair value and is remeasured on a recurring basis.

The Company also had a contingent consideration liability related to the acquisition of Hark, which was paid in full on July 27, 2023.

See Note 11 for additional information.

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Revenue is recognized when, or as, the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods or services.

While the determination of who is the customer in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts.

While the determination of who the customer is in a contractual arrangement will be made on a contract-by-contract basis, the customer will generally be the investment fund for the Company’s significant management and advisory contracts.

Management and Advisory Fees

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Management and advisory fees received in advance reflects the amount of fees that have been received prior to the period the fees are earned.

These fees are recorded as deferred revenues on the Consolidated Balance Sheets.

For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are rendered, since the customers simultaneously receive and consume the benefits provided as the Company performs the service.

The transaction price is the amount of consideration to which the Company expects to be entitled based on the terms of the arrangement.

For certain funds, management fees are initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term.

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

Certain management fees are also calculated on capital deployed.

Advisory services are generally based upon fixed amounts and billed quarterly.

These fees are recorded as deferred revenues on the Consolidated Balance Sheets due to the performance obligation not being satisfied at the time of collection.

For asset management and advisory services, the Company typically satisfies its performance obligations over time as the services are provided as a distinct series of daily performance obligations that the customer simultaneously benefits from as they are performed.

Asset management fees are based on the contractual terms of each contract which differ, such as fees calculated based on committed capital or deployed capital, fees initially calculated based on committed capital during the investment period and on net invested capital through the remainder of the fund’s term, fees that step down during specified periods of the fund’s term, or in limited instances, fees based on assets under management.

At contract inception, no revenue is estimated as the fees are dependent variable amounts which are susceptible to factors outside of our control.

Fees are recognized for services provided during the period, which are distinct from services provided in other periods.

In certain asset management and advisory agreements progress is measured using the practical expedient under the output method resulting in the recognition of revenue in the amount for which the Company has a right to invoice.

Advisory services fees are determined using fixed-rate fees and are recognized over time as the related services are completed.

Other advisory services include transaction and management fees associated with managing the origination and ongoing compliance of certain investments.

Other Revenue

Other revenue on our Consolidated Statements of Operations primarily consists of subscriptions, consulting agreements and referral fees.

The subscription and consulting agreements typically have renewable one-year lives, and revenue is recognized ratably over the current term of the subscription or the agreement.

If subscriptions or fees have been paid in

The Company is applying the optional disclosure exemption for variable consideration for unsatisfied performance obligations, as the variable consideration relates to these unsatisfied performance obligations being fulfilled as a series.

The performance obligations related to these contracts are expected to be satisfied over the next 1 - 10 years as services are provided to the customer.

Catch-up fees are earned from investors that make commitments to the fund after the first fund closing occurs during the fundraising period of funds originally launched in prior periods, and as such the investors are required to pay a catch-up fee as if they had committed to the fund at the first closing.

Catch-up fees are recorded as revenue when such commitments are made as variable consideration.

During 2023, one fund managed by the Company experienced a change in management at one of the underlying portfolio company's it invested it.

The fund’s investment thesis and documents required the original manager to continue managing the underlying portfolio company.

The change in management caused the fund to be non-compliant with its investment mandate.

The Company agreed to modify the terms of the management fee for the fund with the investors, which was not a provision in the original fund agreement and the Company has no history of making similar modifications.

As a result, a $ 3 million reduction in the revenue transaction price was recorded for the year ended December 31, 2023 to reflect the consideration which the Company is entitled to after this concession was provided.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

advance, these fees are recorded as deferred revenues on our Consolidated Balance Sheets.

Other Revenue

Other revenue on our Consolidated Statements of Operations primarily consists of subscriptions, consulting agreements, interest income, and referral fees.

Interest income is from interest bearing fund bank accounts managed by the Company and is additional consideration per the Limited Partner Agreements.

Interest income is recognized as it is earned.

The subscription and consulting agreements typically have renewable one-year lives, and revenue is recognized ratably over the current term of the subscription or the agreement.

If subscriptions or fees have been paid in advance, these fees are recorded as deferred revenues on our Consolidated Balance Sheets.

Referral fee revenue is recognized upon closing of certain opportunities.

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

In accordance with ASC 740, Income Taxes (“ASC 740”), we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards.

In accordance with ASC 740, Income Taxes , we recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards.

Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse.

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We file various federal and state and local tax returns based on federal and state local consolidation and stand-alone tax rules as applicable.

Earnings Per Share

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

Diluted EPS includes the determinants of basic EPS and common stock equivalents outstanding during the period adjusted to give effect to potentially dilutive securities.

Earnings (Loss) Per Share

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

Diluted EPS includes the determinants of basic EPS and common stock equivalents outstanding during the period adjusted to give effect to potentially dilutive securities, if the Company is in a net income position.

Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses.

See Note 17 for additional information.

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

Prior to the conversion of the redeemable convertible preferred shares issued by P10 Intermediate to class B shares, the numerator in the computation of diluted EPS was impacted by the redeemable convertible preferred shares.

Under the if converted method, diluted EPS reflects a reduction in earnings that P10 would recognize by owning a smaller percentage of P10 Intermediate when the preferred shares are assumed to be converted.

The denominator in the computation of diluted EPS is impacted by additional common shares that would have been outstanding if dilutive potential shares of common stock had been issued.

When the Company is in a net income position, the denominator in the computation of diluted EPS is impacted by additional common shares that would have been outstanding if dilutive potential shares of common stock had been issued.

Potential shares of common stock that may be issued by the Company include shares of common stock that may be issued upon exercise of outstanding stock options as well as the vesting of restricted stock units.

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

Also included in the diluted EPS denominator are the units of P10 Intermediate owned by the sellers of WTI, assuming the option to exchange the units for shares of Class A common stock of the Company is exercised in full.

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

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

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

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

Stock compensation expense for awards that cliff-vest after a service period is recorded ratably over the vesting period at the fair market value on the grant date.

For awards with graded vesting, and vesting only requires a service condition, the Company elected, in accordance with ASC 718, to treat these awards as single awards for recognition purposes and recognize compensation on a straight-line basis over the requisite service period of the entire award.

For awards with graded vesting and require either a performance condition or market condition to vest, the Company treats each expected vesting tranche as an individual award and recognizes expense ratably over the vesting period at the fair market value of the grant date.

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

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

For these, the Company uses the tranche method and recognizes expense for each tranche of RSU's deemed probable of vesting on a straight-line basis over the expected vesting period.

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

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

Unvested units are remeasured quarterly against performance metrics as a liability on the Consolidated Balance Sheets.

Refer to Note 16 for further discussion.

Stock option compensation cost is estimated at the grant date based on the fair-value of the award, which is determined using the Black Scholes option valuation model and is recognized as expense ratably over the requisite service period of the award, generally five years .

The share price used in the Black Scholes model is based on the trading price of our shares on the public markets.

Expected life is based on the vesting period and expiration date of the option.

Stock price volatility is estimated based on a group of similar publicly traded companies determined to be most reflective of the expected volatility of the Company due to the nature of operations of these entities.

The risk-free rates are based on the U.S.

Treasury yield in effect at the time of grant.

Forfeitures are recognized as they occur.

Segment Reporting

The Company operates as an integrated private markets solution provider and a single operating segment.

According to ASC 280, Disclosures about Segments of an Enterprise and Related Information, operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker(s) in deciding how to allocate resources and in assessing performance.

According to ASC 280, Disclosures about Segments of an Enterprise and Related Information , operating segments are defined as components of an enterprise for which discrete financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company operates our business as a single operating segment, which is how our chief operating decision maker evaluates financial performance and makes decisions regarding the allocation of resources.

Business Acquisitions

In accordance with ASC 805, Business Combinations (“ASC 805”), the Company identifies a business to have three key elements;

inputs, processes, and outputs.

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The contingent consideration included in the purchase price is measured at fair value on the date of the acquisition.

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

For business acquisitions, the Company recognizes the fair value of goodwill and other acquired intangible assets, and estimated contingent consideration at the acquisition date as part of purchase price.

This fair value measurement is based on unobservable (Level 3) inputs.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Dividends are reflected in the Consolidated Financial Statements when declared.

Recent Accounting Pronouncements

The Company adopted ASU No.

Effective January 1, 2021, the Company adopted ASU No.

2019-12, Income Taxes ("Topic 740") :

Disclosure Framework - Simplifying the Accounting for Income Taxes , on January 1, 2021, which simplified the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying and amending existing guidance.

The adoption of this standard did not have a material impact on our financial statements.

Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

ASU 2016-13 provides amendments to ASC 326, Financial Instruments - Credit Losses , which replaces the incurred loss impairment model with a current expected credit loss (“CECL”) model.

Disclosure Framework - Simplifying the Accounting for Income Taxes , which simplified the accounting for income taxes by removing certain exceptions to the general principles of Topic 740 and clarifying and amending existing guidance.

The adoption of Topic 740 did not have a material impact on the Company's Consolidated Financial Statements.

Effective January 1, 2023, the Company adopted ASU No.

2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”).

ASU 2016-13 provides amendments to ASC 326, Financial Instruments - Credit Losses , which replaces the incurred loss impairment model with a current expected credit loss (“CECL”) model.

CECL requires a company to estimate lifetime expected credit losses based on relevant information about historical events, current conditions and reasonable and supportable forecasts.

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

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

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

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

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

The adoption of ASU 2016-13 did not have a material impact on the Company's Consolidated Financial Statements.

Effective January 1, 2023, the Company adopted ASU 2021-08, which amends ASC 805 to “require acquiring entities to apply Topic 606 to recognize and measure contract assets and contract liabilities in a business combination.” Under current GAAP, an acquirer generally recognizes such items at fair value on the acquisition date.

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

The Company adopted this guidance on January 1, 2023.

The guidance had no effect on the consolidated financial statements.

The adoption of ASU 2021-08 did not have a material impact on the Company's Consolidated Financial Statements.

Pronouncements Not Yet Adopted

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

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

Acquisition of Bonaccord

On September 30, 2021 , the Company completed the purchase of Bonaccord for total consideration of $ 56.4 million, which includes cash and contingent consideration.

Bonaccord is engaged in the business of acquiring minority interests in alternative asset management companies focused on private market strategies which may include private equity, private client, real estate, and real asset strategies.

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

The following is a summary of consideration paid:

Contingent consideration

Total purchase consideration

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

A total of $ 35.0 million of the cash consideration was financed through an amendment to the term loan under the Facility with HPS.

The additional draw had the same terms as the existing Facility, including the maturity date.

Included in total consideration is $ 17.4 million of contingent consideration, representing the fair value of expected future payments on the date of the acquisition.

The amount ultimately owed to the sellers is based on achieving specific fundraising targets and any amounts paid to the sellers will be paid by October 2027, at which point the contingent consideration expires.

Total payment contingent consideration will not exceed $ 20 million.

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

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

The assumptions used in the analysis are inherently subjective;

therefore, the ultimate amount of the liability may differ materially from the current estimate.

As of December 31, 2022, the estimated fair value of the remaining contingent consideration totaled $ 12.0 million.

See Note 11 for more details.

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

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

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

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

Prepaid expenses and other assets

Investment in partnership

Intangible assets

Total assets acquired

Accrued expenses

Total liabilities assumed

Net identifiable assets acquired

Net assets acquired

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

Value of management and advisory contracts

Value of trade name

Total identifiable intangible assets

In connection with the acquisition, Bonaccord assumed a Strategic Alliance Agreement ("SAA"), providing a third-party the right to receive 15 % of the net management fee earnings, which includes the management fees minus applicable expenses, for Bonaccord Fund I ("Fund I"), and any subsequent fund, paid quarterly, in exchange for funding certain amounts of capital commitments to the fund.

See Note 5 for more information.

The goodwill recorded as part of the acquisition includes the expected benefits that management believes will result from the acquisition, including the Company’s build out of its investment product offering.

Approximately $ 42.9 million of goodwill is expected to be deductible for tax purposes.

On November 27, 2023, the FASB issued ASU 2023-07, Segment Reporting - Improvements to Reportable Segment Disclosure ("ASU 2023-07"), which requires incremental disclosures related to a public entity’s reportable segments.

Required disclosures include, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount for other segment items (which is the difference between segment revenue less segment expenses and less segment profit or loss) and a description of its composition, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The standard also permits disclosure of more than one measure of segment profit.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

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

On December 14, 2023, the FASB issued ASU 2023-09, Income Taxes ( "Topic 740" ) - Improvements to Income Tax Disclosures ("ASU 2023-09") to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.

ASU 2023-09 is effective for our annual periods beginning January 1, 2025, with early adoption permitted.

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Acquisition of Hark

On September 30, 2021 , the Company completed the purchase of Hark for total consideration of $ 7.2 million, which includes $ 5.0 million of cash and $ 2.2 million of estimated contingent consideration, with the fair value based on the scenario based method.

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

Hark is engaged in the business of making loans to portfolio companies that are owned or controlled by financial sponsors, such as private equity funds or venture capital funds, and which do not meet traditional direct lending underwriting criteria, but where the repayment of the loan by the portfolio company is guaranteed by its financial sponsor.

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

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

Acquisition of WTI

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

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

The acquisition was accounted for as a business combination pursuant to ASC 805.

The following is a summary of consideration paid:

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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.

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

The acquisition date fair value of certain assets and liabilities, including intangible assets acquired and related weighted average expected lives are provisional and subject to revision within one year of the acquisition date.

As such, our estimates of fair values are pending finalization, which may result in adjustments to goodwill.

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

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

Cash and cash equivalents

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Net assets acquired

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

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

Value of management and advisory contracts

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Total identifiable intangible assets

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

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Significant inputs to the valuation model include existing revenue, estimates of expenses and contributory asset charges, the economic life of the contracts and a discount rate based on a weighted average cost of capital.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

The fair value of trade names acquired were estimated using the relief from royalty method.

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Pro-forma Financial Information

Current Year Acquisition:

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

2022 Acquisition:

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

Ended December 31,

Net income attributable to P10

Pro-forma adjustments include revenue and net income (loss) of the acquired business for each period.

Pro-forma adjustments include revenue and net (loss)/income of the acquired business for each period.

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

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

Prior Year Acquisitions:

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Ended December 31,

Net income attributable to P10

Pro-forma adjustments include revenue and net income (loss) of the acquired business for each period.

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

The following presents revenues disaggregated by product offering:

Ended December 31,

Management and advisory fees

Management fees

Advisory fees

Subscriptions

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Strategic Alliance Expense

In connection with the Bonaccord acquisition, Bonaccord assumed a SAA.

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.

Net management fee earnings the third-party has the right to receive is based on the total capital committed.

For the years ended December 31, 2023 , 2022, and 2021, the strategic alliance expense reported was $ 1.5 million, $ 0.7 million, and $ 0.2 million, respectively.

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

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

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

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

The third party would be entitled to receive distributions of net management fee earnings by the percentage acquired, retroactive to the date of the first close in Fund II.

The maximum commitment requirement has been met as of December 31, 2023.

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

Fund II has not yet reached the

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

final close, but 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, which is included in the strategic alliance expense.

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.

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

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

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

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

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

Note Receivable

The Company's note receivable consists of an Advance Agreement and Secured Promissory Note that was executed on September 30, 2021 between the Company and BCP to lend funds to certain employees to be used to pay general partner commitments to certain funds managed by Bonaccord.

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

$ 4.2 million was drawn as of December 31, 2022 with a maturity date of September 30, 2031 .

Notes Receivable

The Company has two types of notes receivable.

The first is 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 $ 4.8 million was drawn as of December 31, 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.

Internal Revenue Code and (ii) 5.5 %.

The stated interest rate is the effective rate.

Interest will be paid on December 31st of each year commencing December 31, 2021, with any unpaid accrued interest being capitalized and added to the outstanding principal balance .

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

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

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

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

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

The second consists of Secured Promissory Notes that were executed on October 13, 2023 between the Company and certain employees of Bonaccord to lend funds to be used to pay general partner commitments to certain funds managed by Bonaccord.

The notes provide $ 1.0 million of cash to certain employees and are collateralized by such employees' privately owned shares of the Company.

The term of the additional notes is five years , maturing on October 13, 2028 with all principal due at maturity.

The notes will accrue interest at SOFR plus 2.10% and is payable annually in arrears.

As of December 31, 2023 and December 31, 2022 , the total notes receivable balance was $ 5.8 million and $ 4.2 million, respectively.

The Company recognized interest income of $ 0.3 million, $ 0.1 million and $ 0.1 million for the years ended December 31, 2023, 2022 and 2021 , respectively.

Variable Interest Entities

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

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

The assets of the consolidated VIEs totaled $ 579.4 million and $ 568.0 million as of December 31, 2023 and December 31, 2022 , respectively.

The liabilities of the consolidated VIEs totaled $ 397.6 million and $ 96.3 million as of December 31, 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.

The increase in VIE liabilities throughout 2023 is mainly attributable to debt obligations moving from P10, Inc.

to P10 Intermediate.

With the exception of the Credit Facility, the assets of our consolidated VIE’s are owned by those entities and not generally available to satisfy P10’s obligations.

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

Unconsolidated VIEs

Through its subsidiary, ECG, the Company holds variable interests in the form of direct equity interests in certain VIEs that are not consolidated because the Company is not the primary beneficiary.

The Company's maximum exposure to loss is limited to the potential loss of assets recognized by the Company relating to these unconsolidated entities.

The Company's maximum exposure to loss is limited to the potential loss of assets recognized relating to these unconsolidated entities.

These variable interests are included in investment in unconsolidated subsidiaries on the accompanying Consolidated Balance Sheets.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Investment in Unconsolidated Subsidiaries

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

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

As of December 31, 2021 , investment in unconsolidated subsidiaries totaled $ 1.8 million, of which $ 1.6 million related to ECG’s asset management businesses and $ 0.2 million related to ECG’s tax credit finance businesses.

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

Additionally, the investment in Enhanced Capital Partners and Enhanced PC is recorded at zero .

The Company, therefore, does not use the equity method of accounting because the Company has no guaranteed obligations or commitments to provide financial support to the investee.

As of December 31, 2023 , investment in unconsolidated subsidiaries totaled $ 1.7 million, of which $ 1.7 million related to ECG’s asset management businesses and $ 0 related to ECG’s tax credit finance 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.

Asset Management

ECG manages some of its alternative asset management funds through various unconsolidated subsidiaries and records these investments under the equity method of accounting.

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

ECG recorded its share of income in the amount of $ 0.2 million for the year ended December 31, 2023 and $ 1.5 million for the year ended December 31, 2022, which is included in other (expense)/income on the Consolidated Financial Statements.

For the year ended December 31, 2023 , ECG made $ 0 of capital contributions and received distributions of $ 0.6 million.

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Tax Credit Finance

ECG provides a wide range of tax credit transactions and consulting services through various entities which are wholly owned subsidiaries of Enhanced Tax Credit Finance, LLC (“ETCF”), which is a wholly owned subsidiary of ECG.

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

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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.

For the year ended December 31, 2023 , ECG made $ 0 of capital contributions and received distributions of $ 0.1 million.

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

Property and Equipment

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Total property and equipment, net

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Goodwill and Intangibles

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Purchase price adjustment

Increase from acquisition

Balance at December 31, 2023

Due to new information that became available during the year ended December 31, 2021 and a revision to the Company's outside basis and intangibles from finalizing the tax return, there was an adjustment to Enhanced that resulted in a purchase price adjustment.

This was the result of using an estimate as of December 31, 2020 and resulted in a $ 1.3 million adjustment to the purchase price.

Since this was completed during the measurement period, the adjustment was recorded as an adjustment to goodwill.

During the year ended December 31, 2023, there was a revision to the provisional fair value of the WTI tradenames as a result of obtaining new information that was not available at acquisition.

This revision resulted in a purchase price adjustment of $ 0.6 million to goodwill and intangible assets.

Intangibles consists of the following:

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Total intangible assets

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

As of December 31, 2022

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Total intangible assets

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Management and advisory contracts and finite lived trade names are amortized over 7 - 16 years and are being amortized in line with pattern in which the economic benefits that are expected to occur.

3 unchanged sentences

Fair Value Measurements

The Company measures certain liabilities at fair value on a recurring basis.

The Company measures certain liabilities at fair value on a recurring basis which are discussed below.

The credit facility's estimated fair value was $ 289.8 million and $ 289.2 million as of December 31, 2023 and 2022, respectively using Level 2 inputs.

Earnouts associated with the acquisitions of Bonaccord and Hark

Included in total consideration of the acquisition of Bonaccord is an earnout payment not to exceed $ 20 million.

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.

Payments are made after each close.

As of December 31, 2023, $ 13.1 million has been paid in total contingent consideration associated with the earnout, of which $ 5.8 million was paid in the year ended December 31, 2023.

It is highly probable that the remainder of the earnout will be achieved.

Total remeasurement expense recognized for the years ended December 31, 2023, 2022, and 2021 was $ 0.5 million , $ 0.3 million and $ 1.7 million, respectively.

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

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

The remainder of the earnout is highly probable to be achieved given the fundraising amount to date and projected fundraising should satisfy the targets.

As of December 31, 2023, the estimated fair value of the remaining contingent consideration totaled $ 6.7 million.

Following December 31, 2023, the Company has paid $ 0.2 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.

Total remeasurement expense recognized for the years ended December 31, 2023, 2022, and 2021 totaled $ 0.1 million, $ 1.5 million, and $ 1.7 million, respectively.

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

The entirety of the Hark contingent consideration for $ 5.4 million was paid during the year ended December 31, 2023.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

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Total liabilities

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the years ended December 31, 2022 and 2021.

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

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Contingent Consideration Liability

For the Year Ended December 31,

Balance, beginning of period:

Balance, beginning of year:

Change in fair value

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Debt obligations consists of the following:

Gross revolving credit facility state tax credits

Debt issuance costs

Revolving credit facility state tax credits, net

Revolver facility

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Total debt obligations

The table below summarizes terms of the debt obligations.

December 31, 2022

Maturity Date

Aggregate Facility Size

Outstanding Debt

Amount Available

Net Carrying Value

Average Interest Rate

Revolver Facility

On December 22, 2021, the Company extinguished its current debt outstanding with HPS, as described below in the Credit and Guaranty Facility section and simultaneously entered into a new credit agreement with JP Morgan Chase Bank, N.A.

("JP Morgan") in order to gain more favorable interest terms.

The Company used the proceeds from the new credit agreement with JP Morgan not only to repay the outstanding balance with HPS but also to repay the notes payable to sellers as described below in the Notes Payable to Sellers section.

Revolving Credit Facility State Tax Credits

Enhanced State Tax Credit Fund III, LLC, a subsidiary of ECG, 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.

The principal balance consists of the following tranches:

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Notes Payable to Sellers

On October 5, 2017, the Company issued Secured Promissory Notes Payable (“2017 Seller Notes”) in the amount of $ 81.3 million to the owners of RCP 2 in connection with the acquisition of that entity.

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

On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the 2017 Sellers Notes.

On January 3, 2018, the Company issued Secured Promissory Notes Payable (“2018 Seller Notes”) in the amount of $ 22.1 million to the owners of RCP 3 in connection with the acquisition of that entity.

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

On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the 2018 Sellers Notes.

On January 3, 2018, the Company issued tax amortization benefits in the amount of $ 48.4 million (“TAB Payments”) to the owners of RCP 3 in connection with the acquisition of that entity.

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

On December 23, 2021, the Company used the proceeds from the new credit agreement with JP Morgan to repay the outstanding balance of the TAB Payments.

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

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

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

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

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

on our Consolidated Financial Statements.

Credit and Guaranty Facility

The Company’s subsidiary, Holdco, entered into the Facility with HPS as administrative agent and collateral agent on October 7, 2017.

The Facility initially provided for a $ 130.0 million senior secured credit facility in order to refinance the existing debt obligations of RCP Advisors and provide for the financing to repay the Seller Notes due resulting from the acquisition of RCP Advisors.

The Facility provided for a $ 125 million five-year term, subject to certain EBITDA levels and conditions, and a $ 5 million one-year line of credit.

The line of credit was repaid and subsequently expired during 2018.

Holdco was permitted to draw up to $ 125 million in aggregate on the term loan in tranches through July 31, 2019 .

On October 2, 2020 and December 14, 2020, in connection with the acquisitions of TrueBridge and Enhanced, the term loan under the Facility was amended adding an additional $ 91.4 million and $ 68.0 million to the Facility, respectively.

On September 30, 2021, in connection with the acquisition of Bonaccord, the term loan under the Facility was amended adding an additional $ 35.0 million to the Facility.

On October 28, 2021, a payment of $ 88.6 million was made, which included an optional repayment of $ 86.8 million, required prepayment penalty of $ 1.2 million, and an accrued interest payment of $ 0.6 million.

On December 22, 2021, the remaining principal balance of $ 200 million was repaid using the proceeds of the new credit facility with JP Morgan.

In accordance with the Facility, the Company also paid the remaining accrued interest balance of $ 2.1 million and an early extinguishment fee of $ 3.7 million.

December 31, 2023

Principal Amount

Rate Expiration Date

Revolver Facility

Revolving Credit Facility and Term Loan

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

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

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

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

The Credit Agreement consists of two facilities.

The first is a revolving credit facility with an available balance of $ 125 million (the "Revolver Facility").

The second is a term loan for $ 125 million (the "Term Loan").

In addition to the Term Loan and Revolver Facility, the Credit Agreement also includes a $ 125 million accordion feature.

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

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

The Adjusted Term SOFR Rate is the Secured Overnight Financing Rate ("SOFR") at the date of election, plus 2.10 %.

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

Principal is contractually repaid at a rate of 1.25 % on the term loan quarterly effective March 31, 2023.

Principal for the Term Loan is contractually repaid at a rate of 1.25 % on the term loan quarterly effective March 31, 2023.

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

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

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

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

For the years ended December 31, 2023, 2022, and 2021 , $ 20.4 million, $ 8.4 million, and $ 22.2 million of interest expense was incurred, respectively.

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

Debt Issuance Costs

Debt issuance costs are offset against the Revolving Credit Facility State Tax Credits, the Credit and Guaranty Facility, and the Revolver Facility and Term Loan.

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

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

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 December 31, 2023 and December 31, 2022 were $ 2.7 million and $ 4.2 million, respectively.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Amortization expense related to debt issuance costs totaled $ 1.4 million for the year ended December 31, 2023 , $ 1.1 million for the year ended December 31, 2022 and $ 6.0 million for the year ended December 31, 2021 .

Of the $ 6.0 million of amortization expense recognized in 2021, $ 2.1 million relates to the extinguishment of the Credit and Guaranty Facility and is included in loss on extinguishment on the Consolidated Statements of Operations for the year ended December 31, 2021.

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

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

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

Related Party Transactions

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This contributed an additional $ 3.4 thousand monthly.

P10 has paid $ 0.3 million, $ 0.2 million and $ 0 in rent to 210 Capital, LLC for the years ended December 31, 2022, 2021 and 2020, respectively.

P10 has paid $ 0.3 million, $ 0.3 million and $ 0.2 million in rent to 210 Capital, LL C for the years ended December 31, 2023, 2022 and 2021, respectively.

Effective April 1, 2020, P10 Intermediate pays a quarterly management fee of $ 250 thousand to Keystone Capital XXX, LLC, which was the holder of the Series B preferred shares issued by P10 Intermediate in connection with the acquisition of Five Points.

As a result of that agreement, P10 Intermediate paid $ 0 , $ 0.8 million and $ 0.5 for the years ended December 31, 2022, 2021 and 2020, respectively.

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

As a result of that agreement, P10 Intermediate paid $ 0 , $ 0 , and $ 0.8 million for the years ended December 31, 2023, 2022 and 2021, respectively.

This management fee was terminated effective October 20, 2021 when the Company's redeemable noncontrolling interest was converted to shares of Class B common stock in connection with the Company's IPO.

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

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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.

Reimbursable expenses and fees earned but not yet received are included in due from related parties and accounts receivable on the Consolidated Balance Sheets, respectively.

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

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

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

Upon the closing of the Company’s acquisition of ECG and ECP, the Advisory Agreement between ECG and Enhanced PC immediately became effective.

Under this agreement, ECG provides advisory services to Enhanced PC related to the assets and operations of the permanent capital subsidiaries owned by Enhanced PC, as contributed by both ECG and ECP, and new projects undertaken by Enhanced PC.

In exchange for those services, which commenced on January 1, 2021, ECG receives advisory fees from Enhanced PC based on a declining fixed fee schedule, initially totaling $ 76.0 million over 7 years .

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

In exchange for those services, which commenced on January 1, 2021, ECG receives advisory fees from Enhanced PC based on a declining fixed fee schedule, that is commensurate with the level of services being performed as the projects expire.

The Company did not adjust the promised amount of consideration for the effects of a significant financing component at each contract inception as the Company expected that the period between services being provided and cash collection would be less than one year.

The total advisory fees are $ 107.5 million over nine years inclusive of new projects added since inception.

This agreement is subject to customary termination provisions.

Since inception, $ 62.0 million of the total $ 107.5 million advisory fees have been recognized as revenue.

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

As of December 31, 2022 and December 31, 2021, the balance was $ 28.5 million and $ 9.5 million and is included in due from related parties on the Consolidated Balance Sheets.

Upon the closing of the Company’s acquisition of ECG and ECP, the Administrative Services Agreement between ECG and Enhanced Capital Holdings, Inc.

(“ECH”), the entity which holds a controlling equity interest in ECP, immediately became effective.

Under th is agreement, ECG will pay ECH for the use of their employees to provide services to Enhanced PC at the direction of ECG.

The Company recognized $ 11.5 million, $ 8.3 million and $ 0.4 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations.

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

There was $ 45.5 million in remaining performance obligations related to this agreement , which will be recognized between January 1, 2024 and December 31, 2030.

For the years ended December 31, 2023 , 2022, and 2021, advisory fees earned or recognized under this agreement were $ 20.9 million, $ 22.2 million and $ 19.0 million, respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company also earns interest income on the balance outstanding.

Revenues from interest were $ 0.7 million, $ 0.3 million, and $ 0 for the years ended December 31, 2023, 2022, and 2021, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

As of December 31, 2023 and December 31, 2022 , the associated receivable was $ 48.5 million and $ 28.5 million and is included in due from related parties on the Consolidated Balance Sheets.

Payment is expected to be collected as the permanent capital subsidiaries complete and liquidate multi-year projects covered under this agreement.

Upon the closing of the Company’s acquisition of ECG and ECP, the Administrative Services Agreement between ECG and Enhanced Capital Holdings, Inc.

(“ECH”), the entity which holds a controlling equity interest in ECP, immediately became effective.

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

The invoice associated with this agreement is paid quarterly in arrears and subject to 5 % of interest per annum.

The Company recognized $ 13.2 million, $ 11.5 million and $ 8.3 million for the years ended December 31, 2023, 2022 and 2021, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

As of December 31, 2023 and December 31, 2022 , the associated accrual was $ 2.1 million and $ 2.2 million, respectively, and is included in due to related parties on the Consolidated Balance Sheets.

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.

Under the terms of the agreement, Enhanced will originate and manage loans across its diverse lines of business including small business loans to women and minority owned businesses, and loans to renewable energy and community development projects.

The loans will be held by CPF and CPF will pay an advisory fee to Enhanced.

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

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

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

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

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

The Crossroads Advisory Agreement provides for ECG to receive a services fee of approximately 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, the Company recognized $ 8.9 million, $ 4.4 million, and $ 0.2 million of fees for the years ended December 31, 2023, 2022, and 2021, 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.

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

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

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

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

Two members of the Board of Directors of the Company, including the Executive Chairman, are directors of Crossroads and have recused themselves from any decisions related to Crossroads or CPF .

The Company recognizes an annual fee from the funds of $ 20 thousand of which $ 20 thousand and $ 10 thousand have been recognized for the years ended December 31, 2023 and December 31, 2022 , respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

No revenues were recognized for the year ended December 31, 2021.

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.

Additional Secured Promissory Notes were signed with certain Bonaccord employees on October 13, 2023.

For details, see Note 6.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Commitments and Contingencies

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These lease agreements provide for various renewal options.

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

Rent expense for the various leased office space and equipment was approximately $ 3.9 million, $ 3.5 million, and $ 2.0 million for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 , respectively.

Rent expense for the year ended December 31, 2021 included a reduction to overall expense of $ 0.3 million for a rent concession as a result of the COVID-19 pandemic.

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

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

The Company leases an insignificant amount of office equipment under non-cancelable financing leases, with the longest lease expiring in 2028.

The finance lease right-of-use asset is included in right-of-use assets and the finance lease liability is included in lease liabilities in the Consolidated Balance Sheets.

Amortization and interest expense for the finance leased equipment is included in general, administrative and other in the Consolidated Statements of Operations.

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

Operating lease right-of-use assets

Operating lease liabilities

Cash paid for lease liabilities

Cash paid during year ended December 31, 2023 for operating lease liabilities

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

Total undiscounted lease payments

Less discount

Total lease liabilities

Less imputed interest

Total operating lease liabilities

Earnout Payment

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

With the acquisition of WTI, an earnout payment of up to $ 70.0 million of cash and common stock may be earned upon meeting certain performance metrics.

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

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

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

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.

Payments will be made in cash, with the option to pay up to 50.0 % in units of P10 Intermediate, no later than 90 days following the last day of the calendar quarter in which a milestone payment is 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.

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

As of December 31, 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 period ended December 31, 2022, December 31, 2021, and December 31, 2020, $ 5.2 million, $ 0.0 million, and $ 0.0 .

million were recognized, respectively.

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

For the years ended December 31, 2023, December 31, 2022, and December 31, 2021 , $ 21.0 million, $ 5.2 million, and $ 0.0 million of expense was recognized, respectively.

As of December 31, 2023 and December 31, 2022 , the balance was $ 26.2 million and $ 5.2 million, respectively, which is included in accrued compensation and benefits in the Consolidated Balance Sheets.

No payments have been made on the earnout.

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

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

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

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

Total payment will not exceed $ 10.0 million and any amounts will be paid in October 2027.

For the years ended December 31, 2023, December 31, 2022, and December 31, 2021, the Company recognized $ 2.0 million , $ 0.4 million, and $ 0 of expense, respectively, which is included in compensation and benefits on the Consolidated Statements of Operations.

As of December 31, 2023 and December 31, 2022, the balance was $ 2.4 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 accrued contingent liabilities and contingent payments to customers asset in our Consolidated Balance Sheets for an agreement that exists between ECG and third party customers.

The agreements require ECG to share in certain revenues earned with the third parties and also include 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 revenue share agreement.

As of December 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 December 31, 2023 and December 31, 2022, the balance was $ 16.2 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 $ 14.0 million and $ 13.6 million as of December 31, 2023 and December 31, 2022, respectively.

The Company recognized $ 1.5 million , $ 0.7 million, and $ 0 of amortization of

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

compensation and benefits on the consolidated statement of operations.

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

Revenue Share Arrangement

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

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

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

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

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

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

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

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

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

contingent payments to customers for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, 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.

Departure of Director

As discussed in Note 18, subsequent to the end of the year, the Company announced that William "Fritz" Souder, the Company's Chief Operating Officer ("COO"), will be retiring from P10 in May of 2024.

Associated with his termination, the COO will receive $ 1.2 million of severance payments.

For the year ended December 31, 2023, P10 recognized $ 1.2 million of severance expense related to the retirement, which is included in compensation and benefits in the Consolidated Statements of Operations.

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.

All the Company's operations are domestic.

The components of the provision (benefit) for income taxes attributable to continuing operations are as follows:

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

The Oregon DOJ contended 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.

The subsidiary of Enhanced Capital completed non-binding mediation in July 2023 and a settlement was negotiated which was paid in the fourth quarter of 2023.

The total settlement was $ 3.6 million of which the insurance carrier contributed $ 1.5 million.

For the year ended December 31, 2023, the total expense associated with the litigation was $ 2.1 million in other (expense)/income on the Consolidated Statements of Operations.

The Company is subject to income taxes in the United States.

The components of the provision for (benefit from) income taxes for the years ended December 31, 2023, 2022, and 2021 are as follows (in thousands):

For the Years Ended

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Total Deferred

Total provision (benefit)

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

Income tax expense/(benefit)

The following is a reconciliation of the statutory federal income tax rate to the Company's effective tax rate for the years ended December 31, 2023, 2022, and 2021 are as follows:

Notes to Consolidated Financial Statements

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State taxes, net of federal benefit

Permanent items and other

Nondeductible expenses 2

Expiration of net operating losses and tax credits

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Effective rate 1

1 The overall rate impact was due to a decrease in the pre-tax income and an increase in non-deductible expenses.

Due to the non-deductible characteristic of the expenses, the taxable income did not decrease at the same rate as the GAAP income, leading to this change in the tax rate.

2 The 2023 rate impact for “non-deductible expenses” was primarily driven by the increase in executive compensation due to the CEO transition, and a settlement with the Oregon DOJ.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to reverse.

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

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

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

The components of deferred tax assets as of December 31, 2023 and December 31, 2022 are as follows:

Deferred tax assets:

Deferred revenue

Capitalized legal costs

Stock compensation

Interest expense

Right of use assets - operating leases

Investment in partnership

Debt obligations

Suspended losses

Passthrough activity—investment in partnerships

Net operating losses and credit carryforwards

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Deferred tax liabilities:

Investment in partnership

Property and equipment

Right of use assets—operating leases

Total deferred tax liabilities

Deferred tax assets, net

Valuation allowances are established when necessary to reduce deferred tax assets to the amount that are more-likely-than-not expected to be realized based on the weighing of positive and negative evidence.

Future realization of the deferred tax assets ultimately depends on the existence of sufficient taxable income of the appropriate character (for example, ordinary income or capital gain) within the carryback or carryforward periods available under the applicable tax law.

The Company regularly reviews the deferred tax assets for recoverability based on the historical taxable income, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies.

This may change due to many factors, including future market conditions and the ability to successfully execute the business plan and/or tax planning strategies.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

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

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

Among other factors in 2022, the Company’s long-term management and advisory fee contracts and related projected income serve as the positive evidence to support the release of the valuation allowance.

Additionally, the Company’s restructuring undertaken in 2021 as part of the IPO transaction introduced new sources of taxable income available to absorb existing loss carry forwards.

With the exception of certain deferred tax assets, primarily related to built-in capital losses, management believes it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

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

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

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

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

This includes $ 4.5 million that may expire between 2023 and 2029 and $ 17.2 million that may expire between 2030 and 2039.

Utilization of the NOLs and tax credits may be subject to substantial annual limitation due to the “change of ownership”

provisions of the Internal Revenue Code of 1986.

The Company had a valuation allowance against net deferred tax asset of $ 12.8 million as of December 31, 2023.

In 2023, the slight increase in the valuation allowance was attributable to the Section 382 limitations on its NY and NYC NOLs, which were expected to expire unused.

The components of the existing valuation allowance primarily include a valuation allowance recorded in 2020 against its net deferred tax asset of $ 11.4 million due to the write-off of an intercompany debt which is capital in nature.

Management believes that it is not more-likely-than-not that future operations will generate sufficient taxable capital gain income to realize the deferred tax asset.

This assessment remains valid for 2023, and no adjustments have been made to this valuation allowance.

The remaining $ 1.4 million valuation allowance is against the NOLs that are expected to expire without being used.

However, should there be a change in the ability to recover deferred tax assets, the income tax provision would either increase or decrease in the period when the assessment is modified.

As of December 31, 2023, the Company had federal carryforwards of approximately $ 160.1 million (net of uncertain tax reserve).

The federal NOL carryforward may expire beginning in 2024, if not utilized.

This includes $ 14.0 million of federal NOLs that may expire in 2024, $ 23.8 million that may expire in 2025, $ 18.4 million that may expire in 2026, and $ 108.2 million that may expire between 2027-2037.

The Company is expected to use the federal NOLs before expiration based on historical taxable income, projected future taxable income, and the expected timing of the reversals of existing temporary differences.

The Company had post-rate effected state NOLs (net of valuation allowance on expected expire unused) of approximately $ 0.6 million as of December 31, 2023.

Utilization of the NOLs and tax credits may be subject to substantial annual limitation due to the “change of ownership” provisions of the Internal Revenue Code of 1986.

The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization.

Tax positions are evaluated utilizing a two-step process.

The Company first determines whether any of its tax positions are more-likely-than-not to be sustained upon examination, based solely on the technical merits of the position.

Once it is determined that a position meets this recognition threshold, the position is measured as the largest amount of benefit that is greater than 50 % likely of being realized upon ultimate settlement.

The reconciliation of the Company's unrecognized tax benefits at the beginning and end of the year is as follows:

The Company accounts for uncertainty in tax positions recognized in the consolidated financial statements by recognizing a tax benefit from an uncertain tax position when it is more-likely-than-not that the position will be sustained upon examination based on the technical merits.

Recording an uncertain tax position is inherently uncertain and requires making judgments, assumptions, and estimates.

The Company believes the judgments, assumptions and estimates made are reasonable and appropriate, no assurance can be given that the final tax outcome of these matters will not be different.

To the extent that the final tax outcome of these matters is different than the amount recorded, such difference will affect the provision for income taxes and the effective tax rate in the period in which such determination is made.

The reconciliation of the Company's unrecognized tax benefits, which is included in deferred tax assets, net on the Consolidated Balance Sheets, at the beginning and end of the year is as follows:

For the Years Ended

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Balance at December 31

The uncertain tax position is primarily related to transfer pricing, research and development credits and state exposure due to intercompany interest expense.

The uncertain tax position is primarily related to imputed interest, and research and development credits.

The 2023 decrease of $ 0.5 million resulted from the release of the state exposure related to the intercompany interest expense.

This release was due to the statute of the limitation expired in the states where the uncertain tax positions existed.

The Company does not anticipate any significant changes to the unrecognized tax benefits within the next twelve months.

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federal and state tax examinations for all tax years since 1999 due to our net operating loss carryforwards and the utilization of the carryforwards in years still open under statute.

Stockholders' Equity

Equity-Based Compensation

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

Stockholders' Equity

Equity-Based Compensation

On July 20, 2021, the Board of Directors approved the P10 Holdings, Inc.

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

When the options are exercised, the Board of Directors has the option of issuing shares of common stock or paying a lump sum cash payment on the exercise date equal to the difference between the common stock’s fair market value on the exercise date and the option price.

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

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This was paid on April 4, 2022.

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

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

On June 17, 2022, at the Annual Meeting of Stockholders, the shareholders authorized an increase of 5,000,000 shares that may be issued under the Plan..

On December 9, 2022, a special meeting of stockholders was held to increase the number of shares issuable under the Plan by 4,000,000 shares, resulting in a total of 18,300,000 shares available for grant under the Plan and the 2018 Plan.

As of December 31, 2023 , there are 1.8 million shares available for grant.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

A summary of stock option activity for the years ended December 31, 2023 and December 31, 2022 is as follows:

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Exercisable as of December 31, 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 share price used in the Black Scholes model is based on the trading price of our shares on the public markets.

Expected life is based on the vesting period and expiration date of the option.

The risk-free rates are based on the U.S.

Treasury yield in effect at the time of grant.

The dividend yield is based on a $ 0.0325 per share quarterly dividend.

The stock-based compensation expense for stock options was $ 10.3 million , $ 3.9 million, and $ 3.4 million for the years ended December 31, 2023, 2022, and 2021 respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of December 31, 2023 was $ 7.7 million and is expected to be recognized over a weighted average period of 2.90 years .

Any future forfeitures will impact this amount.

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

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

For the Year Ended December 31,

For the Years Ended December 31,

Expected life

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Expected dividend yield

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

The Company has granted restricted stock awards ("RSAs") to certain employees.

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

Holders of RSUs have no voting rights and are not eligible to receive dividends or other distributions paid with respect to any RSUs that have not vested.

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

Holders of RSUs have no voting rights and generally are not eligible to receive dividends or other distributions paid with respect to any RSUs that have not vested.

All of the shares currently vest one year from the grant date excluding the Hark, Bonaccord, and Executive Market Units, which are discussed in more detail below.

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

The Bonaccord Units may not be transferred, sold, pledged, exchanged, assigned or otherwise encumbered or disposed of by any grantee until it has become vested.

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

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

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

As of December 31, 2023 , certain performance metrics have been met and specific employees have earned $ 8.0 million in value, which $ 6.6 million was issued in shares and $ 1.4 million was issued in cash.

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

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

Future vested tranches will be settled in cash.

An expense of $ 5.6 million, $ 7.0 million, and $ 0 has been recorded for the years ended December 31, 2023, December 31, 2022, and December 31, 2021, respectively, on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 4.8 million as of December 31, 2023.

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

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

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

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

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

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

As of December 31, 2023, all Hark Units have vested and been issued.

An expense of $ 0.3 million and $ 1.3 million have been recorded for the years ended December 31, 2023 and December 31, 2022 on the Consolidated Statements of Operations.

At the time of executive transition, the Company entered into an Executive Transition Agreement with a certain former executive, which granted Restricted Stock Units ("Executive Transition Units") for meeting a service requirement.

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

The award has a stated value of $ 4.0 million and will be issued in $ 1 million increments quarterly beginning on October 20, 2023 and at the start of each of the following three quarters.

Each $ 1 million increment will vest one year following issuance.

Attributes of this award include graded vesting and service conditions, therefore, the expense recognition of this award is recognized on straight-line basis over the requisite service period of the award in line with the policy election discussed in Note 2.

As of December 31, 2023 , $ 1.0 million has been issued.

For the year ended December 31, 2023 , $ 0.5 million of stock compensation was recognized on the Consolidated Statements of Operations.

The unrecognized expense associated with the Executive Transition Units was $ 3.5 million as of December 31, 2023.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

At the time of executive transition, the Company entered into an Employment Agreement with a certain executive, which granted Restricted Stock Units ("Executive Market Units") for meeting a service requirement and achieving certain share price performance hurdles based on the thirty-day volume-weighted average price (“VWAP”).

The executive is entitled to receive RSUs upon the thirty day VWAP of the Company's common stock reaching certain per share prices at any time prior to the fifth anniversary of the start date.

There are five price per share performance hurdles for the executive to meet with each hurdle achievement allowing for the issuance of $ 8.0 million of units, with the number of shares determined by dividing $ 8.0 million by the applicable stock price performance hurdle, for a total of up to $ 40.0 million of units or approximately 2 million shares.

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

The RSUs shall vest ratably on the third, fourth, and fifth anniversaries of the executive's start date, provided that no such units shall vest earlier than the first anniversary of the applicable issuance date of such units.

The fair value was determined using a Monte Carlo simulation as of the executive's start date of October 23, 2023, and was determined to be $ 10.8 million.

As of December 31, 2023 , no ne of the Executive Market Units have vested.

For the year ended December 31, 2023 , $ 0.5 million of stock compensation was recognized on the Consolidated Statements of Operations.

The below table shows the assumptions used in the Monte Carlo simulation for the Executive Market Units' fair value.

October 23, 2023

Expected life

Expected volatility

Risk-free interest rate

Expected dividend yield

The below table excludes Executive Market Units that the performance conditions have not been satisfied, Executive Transition Units that have not vested and are recorded as a liability, and Bonaccord or Hark that were issued outside of the Plan, that have not vested and are recorded as a liability or vested and settled in cash.

Weighted-Average Grant

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Outstanding as of December 31, 2023

The stock-based compensation expense was $ 18.6 million, $ 3.5 million and $ 0.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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

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

Any future forfeitures will impact this amount.

Earnings Per Share

The Company presents basic EPS and diluted EPS for our common stock.

Basic EPS excludes potential dilution and is computed by dividing net income by the weighted-average number of common shares outstanding for the period.

Basic EPS excludes potential dilution and is computed by dividing net (loss)/income by the weighted-average number of common shares outstanding for the period.

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

Additionally, diluted EPS reflects the potential dilution that could occur if convertible preferred shares of P10 Intermediate were converted into common shares of P10 Intermediate.

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

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

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

For the year ended December 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.

Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses.

The Company has Class A and Class B shares outstanding, therefore follows the two-class method.

However, the shares are entitled to the same amount of the Company's earnings therefore the earnings per share calculation for Class A and Class B shares will always be equivalent.

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

Ended December 31,

Numerator for basic calculation—Net income

Numerator for basic calculation—Net (loss)/income

attributable to P10

Adjustment for:

Net income attributable to noncontrolling interest in P10 Intermediate

Numerator for earnings per share

Numerator for earnings per share assuming

Denominator for basic calculation—Weighted-

average shares

Weighted shares assumed upon conversion of partnership units

Net (loss)/income attributable to noncontrolling interests in P10 Intermediate

Numerator for (loss)/earnings per share

Numerator for (loss)/earnings per share assuming dilution

Denominator for basic calculation—Weighted-

average shares outstanding, basic attributable to P10

Weighted shares assumed upon exercise of partnership units

Weighted shares assumed upon exercise of stock

options and vesting of RSUs

Denominator for earnings per share assuming dilution

Earnings per share—basic

Earnings per share—diluted

Denominator for (loss)/earnings per share assuming dilution

(Loss)/earnings per Class A share—basic

(Loss)/earnings per Class A share—diluted

(Loss)/earnings per Class B share—basic

(Loss)/earnings per Class B share—diluted

If the Company was in a net income position, the computations of diluted earnings per share on a weighted average basis would exclude 7.0 million options for the year ended December 31, 2023.

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

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Subsequent Events

On March 9, 2023, the Company granted to employees 2,677,974 options under the 2021 Incentive Plan.

The options vest over five years and expire ten years from the grant date.

On March 9, 2023, the Company granted to employees 906,343 res tricted stock units under the 2021 Incentive Plan.

The options vest over one year .

The Board of Directors of the Company has declared a quarterly dividend of $ 0.0325 per share of Class A and Class B common stock, payable on March 26, 2024, to the holders of record as of the close of business on March 11, 2024.

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

On February 9, 2024, the Company announced that William "Fritz" Souder will be retiring from P10 and his employment will end as of the expiration of the initial term of his employment agreement on May 11, 2024, unless terminated earlier in accordance with the provisions of the employment agreement.

Accordingly, Mr.

Souder will, subject to his entering into a general release of claims, receive the following severance payments and benefits in accordance with his

Notes to Consolidated Financial Statements

(dollar amounts stated in thousands)

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

employment agreement:

(i) a lump sum payment, equal to twelve (12) months of his base salary;

(ii) subject to his timely election and elegibility for COBRA, reimbursement of COBRA premiums for health insurance continuation coverage (to the extent such premiums exceed the contributory cost for the same coverage that P10 charges active employees) for twelve (12) months or until his right to COBRA continuation expires, whichever is shorter;

(iii) the target amount of his annual bonus ( 100 % of base salary);

(iv) immediate vesting of any and all options, restricted stock, and restricted stock units owned directly or beneficially by him and carried interests in the investment vehicles of the affiliated entities granted to him;

and (v) he will be released from all lock up restrictions.

For the year ended December 31, 2023, the Company recognized $ 1.2 million of severance expense, which is included in compensation and benefits in the Consolidated Statements of Operations for the year ended December 31, 2023.

On February 27, 2024, the Board of Directors authorized an additional $ 40.0 million of repurchases of outstanding Class A and B shares of the Company's stock under the Stock Repurchase Program.

On March 4, 2024, the Company granted to employees 2,470,917 options under the 2021 Incentive Plan.

The exercise of options granted to employees other than Section 16 officers are contingent upon approval by the Company’s shareholders of an increase in the share reserve under the 2021 Incentive Plan at the Company’s 2024 annual shareholder meeting.

The options vest 25 % a year starting with the second anniversary of the date of grant and expire ten years from the grant date.

On March 4, 2024, the Company granted to employees 845,394 restricted stock units under the 2021 Incentive Plan.

The RSUs vest on the first anniversary of the grant.

In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after December 31, 2023, the Consolidated Balance Sheets 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.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data