What changed in this filing

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Item 1. Financial Statements

2024-05-09 compared with 2023-11-13 · 418 added, 520 removed, 560 unchanged (63% of the section changed)

2 unchanged sentences

(in thousands, except share amounts)

As of September 30,

Cash and cash equivalents

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Intangibles, net

LIABILITIES AND STOCKHOLDERS' EQUITY

Accounts payable

Accrued expenses

LIABILITIES AND EQUITY

Accounts payable and accrued expenses

Accrued compensation and benefits

7 unchanged sentences

Total liabilities

STOCKHOLDERS' EQUITY:

COMMITMENTS AND CONTINGENCIES (NOTE 13)

Class A common stock, $ 0.001 par value;

510,000,000 shares authorized;

45,869,964 issued and 44,932,190 outstanding as of September 30, 2023, and 43,303,040 issued and 42,365,266 outstanding as of December 31, 2022, respectively

59,983,472 issued and 54,582,698 outstanding as of March 31, 2024, and 59,340,269 issued and 57,622,895 outstanding as of December 31, 2023, respectively

Class B common stock, $ 0.001 par value;

180,000,000 shares authorized;

71,467,190 shares issued and 71,343,739 shares outstanding as of September 30, 2023, and 73,131,826 shares issued and 73,008,374 shares outstanding as of December 31, 2022, respectively

58,562,814 shares issued and 58,439,363 shares outstanding as of March 31, 2024, and 58,597,718 shares issued and 58,474,267 shares outstanding as of December 31, 2023, respectively

Treasury stock

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Noncontrolling interests

Total stockholders' equity

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

TOTAL LIABILITIES AND EQUITY

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

2 unchanged sentences

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Ended March 31,

Management and advisory fees

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Interest expense, net

Other (expense)/income

Total other (expense)

Net (loss)/income before income taxes

Income tax expense

NET (LOSS)/INCOME

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

NET (LOSS)/INCOME ATTRIBUTABLE TO P10

Net income/(loss) before income taxes

Income tax (expense)/benefit

net income attributable to noncontrolling interests in P10 Intermediate

NET INCOME ATTRIBUTABLE TO P10

Earnings per share

Basic (loss)/earnings per share

Diluted (loss)/earnings per share

Dividends paid per share

Basic earnings per share

Diluted earnings per share

Weighted average shares outstanding, basic

1 unchanged sentence

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

(Unaudited, in thousands)

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Non Controlling

Stockholders'

Paid-in-capital

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Stock-based compensation

Deferred offering costs

Net income attributable to P10

Exchange of Class B common stock for Class A common stock

Settlement of stock options

Balance at March 31, 2022

Stock-based compensation

Net income attributable to P10

Exchange of Class B common stock for Class A common stock

Dividends declared

Dividends paid

Balance at June 30, 2022

Stock-based compensation

Net income attributable to P10

Exchange of Class B common stock for Class A common stock

Issuance of restricted stock awards

Issuance of restricted stock units

Exercise of stock options

Exchange of Class B common stock for Class A common stock

Exercise of stock options (net of tax and strike price)

Repurchase of common stock for employee tax witholding and exercised stock option strike price

Stock repurchase

Accrual for excise tax associated with stock repurchases

Distributions to non-controlling interests, net

Dividends declared

Dividends paid

Balance at September 30, 2022

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

Dividends paid per share $ 0.03

Balance at March 31, 2023

Common Stock - Class A

6 unchanged sentences

Stock-based compensation

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

Exchange of Class B common stock for Class A common stock

Exercise of stock options (net of tax)

Distributions to non-controlling interests

Issuance of restricted stock units

Repurchase of common stock for employee tax witholding

Exchange of Class B common stock for Class A common stock

Exercise of stock options

Repurchase of common stock for employee tax witholding and strike price

Stock repurchase

Accrual for excise tax associated with stock repurchases

Distributions to non-controlling interests, net

Dividends declared

Dividends paid

Dividends paid per share $ 0.03

Balance at March 31, 2024

Stock-based compensation

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

Exchange of Class B common stock for Class A common stock

Exercise of stock options (net of tax)

Distributions to non-controlling interests

Issuance of restricted stock units

Repurchase of common stock for employee tax witholding

Dividends declared

Dividends paid

Balance at June 30, 2023

Stock-based compensation

Net loss attributable to P10 and net loss attributable to non controlling interests

Exchange of Class B common stock for Class A common stock

Distributions to non-controlling interests

Issuance of restricted stock awards

Exercise of stock options (net of tax)

Repurchase of common stock for employee tax witholding

Dividends paid

Balance at September 30, 2023

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

1 unchanged sentence

(Unaudited, in thousands)

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss)/income

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

Adjustments to reconcile net income to net cash provided by operating

Stock-based compensation

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Amortization of debt issuance costs and debt discount

Loss/(income) from unconsolidated subsidiaries

Deferred tax expense

Income from unconsolidated subsidiaries

Deferred tax expense/(benefit)

Amortization of contingent payment to customers

Remeasurement of contingent consideration

Post close purchase price adjustment

Change in operating assets and liabilities:

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Right-of-use assets

Accounts payable

Accrued expenses

Accounts payable and accrued expenses

Accrued compensation and benefits

1 unchanged sentence

Other liabilities

Contingent consideration

Deferred revenues

3 unchanged sentences

Purchase of intangible assets

Draw on notes receivable

Funding of notes receivable

Proceeds from notes receivable

Proceeds from investments in unconsolidated subsidiaries

Investments in unconsolidated subsidiaries

Distributions from investments in unconsolidated subsidiaries

Software capitalization

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Repayments on debt obligations

Repurchase of Class A common stock

Repurchase of Class A common stock for employee tax withholding

Payments to settle exercise of employee stock options

Repurchase of Class B common stock

Repurchase of Class A common stock

Payment of contingent consideration

Cash settlement of stock options

Dividends paid

Distributions to partners

Debt issuance costs

Distributions to non-controlling interests

Net cash used in financing activities

5 unchanged sentences

(Unaudited, in thousands)

For the Nine Months

Ended September 30,

For the Three Months

Ended March 31,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

4 unchanged sentences

Additions to lease liabilities

Additions to property and equipment

Additions to contingent consideration

Dividends declared

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Notes to Consolidated Financial Statements

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

(Unaudited, dollar amounts stated in thousands)

Description of Business

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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 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.

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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., designed, manufactured, sold, and serviced flywheel-based uninterruptible power supply products and serviced modular infrastructure solutions.

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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 reorganization under Chapter 11 of the Federal Bankruptcy Code, using a prepackaged plan of reorganization.

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We were founded as a Texas corporation in 1992 and reincorporated in Delaware in 2000.

Our headquarters is in Dallas, Texas.

Our headquarters are in Dallas, Texas.

On October 5, 2017, we closed on the acquisition of RCP Advisors 2, LLC ("RCP 2") and entered into a purchase agreement to acquire RCP Advisors 3, LLC ("RCP 3") in January 2018.

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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 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.

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

Notes to Consolidated Financial Statements

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

(Unaudited, dollar amounts stated in thousands)

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.

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

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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.

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

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

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

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.

As of March 31, 2024 , no units have been exchanged into shares of P10 Class A common stock.

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

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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.

During 2022, the Board approved a program to repurchase up to $ 40.0 million of outstanding shares of our Class A and Class B common stock.

On February 27, 2024, the Board approved an additional $ 40.0 million to be used towards repurchases.

These shares may be repurchased from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades, in accordance with Rule 10b5-1 trading plans and/or through other legally permissible means.

As of March 31, 2024 , $ 59.5 million has been spent to buy back shares under this program.

On October 20, 2023, the Company had a transition of executives ("Executive Transition") and 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 Statements of Operations.

See Note 15 for further information.

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.

The Consolidated Financial Statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model.

The Consolidated Financial Statements include the accounts of the Company, its wholly owned or majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

controlling financial interest based on either a variable interest model or voting interest model.

All intercompany transactions and balances have been eliminated upon consolidation.

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

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

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

The results for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year ended December 31, 2024.

Principles of Consolidation

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

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

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

(a) direct or indirect ability to make decisions, (b) obligation to absorb expected losses or (c) right to receive expected residual returns.

Notes to Consolidated Financial Statements

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

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

A VIE must be evaluated quantitatively and qualitatively to determine the primary beneficiary, which is the reporting entity that has (a) the power to direct activities of a VIE that most significantly impact the VIE's economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The primary beneficiary is required to consolidate the VIE for financial reporting purposes.

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See Note 6 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.

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P10 Holdings, 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.

Use of Estimates

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

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

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

As of March 31, 2024, and December 31, 2023, cash equivalents include money market funds of $ 11.3 million and $ 11.1 million, respectively, which approximates fair value.

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

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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.

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Restricted Cash

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

Restricted cash as of March 31, 2024 and December 31, 2023 was primarily cash on deposit from third parties related to pending tax credit projects.

There are deposit liabilities associated with restricted cash reported 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 estimates that accounts receivable is fully collectible based on historical events, current conditions, and reasonable and supportable forecasts;

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

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

Management fees are collected on a quarterly basis.

1 unchanged sentence

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

Notes to Consolidated Financial Statements

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

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

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.

Notes Receivable

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

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 estimates the notes receivable to be fully collectible based on historical events, current conditions, and reasonable and supportable forecasts;

no allowance has been established as of September 30, 2023 and December 31, 2022 .

Refer to Note 5 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 March 31, 2024 and December 31, 2023 .

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 March 31, 2024 and December 31, 2023, respectively, there is $ 8.5 million and $ 9.6 million within prepaid expenses and other assets on the Consolidated Balance Sheets associated with allocable state tax credits purchases.

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

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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 RCP's investment in a privately held investment manager and E CG'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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Fair value is based on the best information available, including prices for similar assets and estimated discounted cash flows.

Notes to Consolidated Financial Statements

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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, 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.

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

Notes to Consolidated Financial Statements

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The Company does not recognize a lease liability or right-of-use asset on our Consolidated Balance Sheets for short-term leases.

Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term.

Instead, the Company recognizes short-term lease payments as an expense when incurred.

A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise.

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

The Company will reassess at each reporting period.

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

Refer to Note 13 for further information .

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Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the amounts assigned to identifiable assets acquired, less the liabilities assumed.

As of September 30, 2023, goodwill recorded on our Consolidated Balance Sheets relates to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, Hark, and WTI.

As of September 30, 2023, the intangible assets are comprised of indefinite-lived intangible assets and finite-lived intangible assets related to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, Hark, and WTI.

As of March 31, 2024, goodwill recorded on our Consolidated Balance Sheets relates to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, Hark, and WTI.

As of March 31, 2024, the intangible assets are comprised of indefinite-lived intangible assets and finite-lived intangible assets related to the acquisitions of RCP 2, RCP 3, Five Points, TrueBridge, Enhanced, Bonaccord, Hark, and WTI.

Indefinite-lived intangible assets and goodwill are not amortized.

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

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

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

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

If it is determined that it is more likely than not that a reporting unit’s fair value is less than its carrying value, then the Company will determine the fair value of the reporting unit and record an impairment charge

Notes to Consolidated Financial Statements

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

for the difference between fair value and carrying value (not to exceed the carrying amount of goodwill).

The Company performed the annual impairment assessment as of September 30, 2023 noting that no goodwill impairment existed.

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).

Contingent Consideration

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

As of March 31, 2024 and December 31, 2023 , the contingent consideration is related to the acquisition of Bonaccord on the Consolidated Balance Sheets.

Accrued Compensation and Benefits

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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.

The sellers and certain employees of WTI are eligible to earn up to $ 70.0 million

Notes to Consolidated Financial Statements

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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.

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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 Income to clearly distinguish between our interests and the economic interest of third parties in those entities.

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

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

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

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

Notes to Consolidated Financial Statements

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

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

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

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

The fair value of the credit facilities approximate 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.

As of March 31, 2024 and December 31, 2023, 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, 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 10 for additional information.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Revenue Recognition

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

While the determination of who 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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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 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.

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.

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.

Other Revenue

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

Interest income is recognized from interest bearing bank accounts and revenue is recognized as it is earned.

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.

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

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.

Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized.

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

Deferred tax assets and liabilities are measured using enacted tax rates in effect

Notes to Consolidated Financial Statements

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

(Unaudited, dollar amounts stated in thousands)

for the year in which the differences are expected to reverse.

Valuation allowances are recorded to reduce deferred tax assets to the amount we believe is more likely than not to be realized.

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

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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 (Loss) Per Share

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

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, if the Company is in a net income position.

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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 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, Compensation - Stock Compensation ("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 on 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.

For these, the Company uses the tranche method and recognizes expense for each tranche of RSUs 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 15 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.

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

Forfeitures are recognized as they occur.

Segment Reporting

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(s) 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 makers evaluate financial performance and make decisions regarding the allocation of resources.

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 (our Chief Executive Officer) evaluates financial performance and makes decisions regarding the allocation of resources.

Notes to Consolidated Financial Statements

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

(Unaudited, dollar amounts stated in thousands)

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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Recent Accounting Pronouncements

Pronouncements Recently Adopted

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

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

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

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

The Company adopted this guidance on January 1, 2023.

The guidance had no effect on the Consolidated Financial Statements but will be considered for future acquisitions.

Notes to Consolidated Financial Statements

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

Pronouncements Not Yet Adopted

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

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

Effective January 1, 2024, the Company adopted ASU 2022-03, Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions ("ASU 2022-03").

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

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

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

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

Acquisition of WTI

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

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

The following is a summary of consideration paid:

Fair value of equity consideration

Total purchase consideration

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

Total acquisition-related expenses were $ 0 for the three and nine months ended September 30, 2023 and $ 1.4 million and $ 1.5 million for the three and nine months ended September 30, 2022, respectively.

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

Cash and cash equivalents

Accounts receivable

Right-of-use assets

Prepaid expenses and other assets

Property and equipment

Intangible assets, net

Total assets acquired

Accounts payable and accrued expenses

Lease liabilities

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

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

Approximately $ 87.3 million of

The adoption of ASU 2022-03 did not have a material impact on the Company's Consolidated Financial Statements.

Pronouncements Not Yet Adopted

On November 27, 2023, the FASB issued ASU 2023-07, 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

Notes to Consolidated Financial Statements

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

goodwill is expected to be deductible for tax purposes.

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

The fair value of management and advisory contracts acquired were estimated using the excess earnings method.

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

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

Significant inputs to the valuation model include estimates of existing and future revenue, estimated royalty rate, economic life and a discount rate based on a weighted average cost of capital.

The management and advisory contracts and trade names have a finite useful life.

The carrying value of the management fund and advisory contracts and trade names will be amortized in line with the pattern in which the economic benefits arise and are reviewed at least annually for indicators of impairment in value that is other than temporary.

Pro-forma Financial Information

Prior 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, 2022:

For the Nine Months

Ended September 30,

Net (loss)/income attributable to P10

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, 2022.

(Unaudited, dollar amounts stated in thousands)

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, 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.

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

The following presents revenues disaggregated by product offering:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Management and advisory fees

Ended March 31,

Management fees

Advisory fees

Subscriptions

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

This SAA provides the third-party the right to receive 15 % of the net management fee earnings, which includes the management fees minus applicable expenses, for Fund I and subsequent funds, paid quarterly, in exchange for funding certain amounts of capital commitments to the fund.

This SAA provides the third-party the right to receive 15 % of the net management fee earnings, which includes the management fees minus applicable expenses, for Bonaccord 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 three and nine months ended September 30, 2023 , the strategic

Notes to Consolidated Financial Statements

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

alliance expense reported was $ 0.3 million and $ 1.1 million, respectively.

For the three and nine months ended September 30, 2022 , the strategic alliance expense reported was $ 0.1 million and $ 0.4 million, respectively.

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

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

For the three months ended March 31, 2024 and 2023, the strategic alliance expense reported was $ 0.6 million and $ 0.4 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 maximum commitment requirement has been met as of September 30, 2023 .

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 March 31, 2024 .

Fund II has not yet reached the 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.

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

This commitment has not yet been met as of September 30, 2023 as Fund III has not yet started raising capital.

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

This commitment has not yet been met as of March 31, 2024 as Fund III has not yet started raising capital.

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

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Notes Receivable

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

This agreement provides for a note to BCP for $ 5.0 million, of which $ 4.4 million was drawn as of September 30, 2023 with a maturity date of September 30, 2031 .

The note will earn interest at the greater of (i) the applicable federal rate that must be charged to avoid imputation of interest under Section 1274(d) of the U.S.

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 March 31, 2024 with a maturity date of September 30, 2031 .

The note will

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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 %.

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

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

The Company recognized interest income of $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2023 , respectively, and $ 0.1 million and $ 0.1 million for the three and nine months ended September 30, 2022 , 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 provided $ 1.0 million of cash, in aggregate, to certain employees and is 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 March 31, 2024 and December 31, 2023 , the total notes receivable balance was $ 5.8 million and $ 5.8 million, respectively.

The Company recognized interest income of $ 0.1 million and $ 0.1 million for the three months ended March 31, 2024 and 2023, 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.

The assets of the consolidated VIEs totaled $ 553.5 million and $ 568.0 million as of September 30, 2023 and December 31, 2022 , respectively.

The liabilities of the consolidated VIEs totaled $ 377.5 million and $ 96.3 million as of September 30, 2023 and December 31, 2022, respectively.

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

to P10 Intermediate.

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

Notes to Consolidated Financial Statements

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

The assets of the consolidated VIEs totaled $ 566.6 million and $ 579.4 million as of March 31, 2024 and December 31, 2023, respectively.

The liabilities of the consolidated VIEs totaled $ 422.6 million and $ 397.6 million a s of March 31, 2024 and December 31, 2023, respectively.

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

The liabilities of our consolidated VIEs 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.

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 September 30, 2023 , investment in unconsolidated subsidiaries totaled $ 1.6 million, of which $ 1.4 million related to ECG’s asset management businesses and $ 0.2 million 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 loss in the amount of $ 0.8 million and $ 0.2 million for the three and nine months ended September 30, 2023 , respectively, and recorded its share of income in the amount of $ 0.2 million and $ 1.3 million for the three and nine months ended September 30, 2022, respectively.

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

For the three and nine months ended September 30, 2022 , ECG made $ 0 capital contributions and received distributions of $ 0.3 million and $ 1.0 million, respectively.

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 three and nine months ended September 30, 2023 and September 30, 2022, EC G made $ 0 of capital contributions and received distributions of $ 0 .

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, suspended the use of the equity method of accounting because the Company has no guaranteed obligations or commitments to provide financial support to the investee.

As of March 31, 2024, investment in unconsolidated subsidiaries totaled $ 2.8 million, of which $ 0.9 million related to RCP's investment in a privately held investment manager, $ 1.9 million related to ECG’s asset management businesses, and $ 0 related to ECG’s tax credit finance businesses.

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

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Property and Equipment

Property and equipment consist of the following:

As of September 30,

As of March 31,

As of December 31,

5 unchanged sentences

Goodwill and Intangibles

Changes in goodwill for the nine months ended September 30, 2023 are as follows:

Changes in goodwill for the three months ended March 31, 2024 are as follows:

Balance at December 31, 2023

Purchase price adjustment

Increase from acquisitions

Balance at September 30, 2023

Notes to Consolidated Financial Statements

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

During the period, there was a revision to the provisional fair value of the WTI tradename as a result of obtaining new information that was not available at acquisition.

This revision resulted in a purchase price adjustment.

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

Balance at March 31, 2024

Intangibles consists of the following:

As of September 30, 2023

As of March 31, 2024

Gross Carrying

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Total intangible assets

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

Notes to Consolidated Financial Statements

(Unaudited, 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 in which the economic benefits that are expected to occur.

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

2 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 $ 314.0 million and $ 289.8 million as of March 31, 2024 and December 31, 2023, 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

Notes to Consolidated Financial Statements

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

will be paid by October 2027, at which point the earnout expires.

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 September 30, 2023 , $ 9.7 million has been paid in total contingent consideration associated with the earnout.

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

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

Total remeasurement expense recognized for the three and nine months ended September 30, 2022 was $ 0.2 million and $ 0.2 million, respectively.

This is included in contingent consideration expense on the 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 signific ant judgment or estimation.

As of September 30, 2023 , the estimated fair value of the remaining contingent consideration totaled $ 8.2 million.

Following September 30, 2023, the Company has paid $ 1.5 million towards the remaining contingent consideration.

As of March 31, 2024, $ 13.4 million has been paid in total contingent consideration associated with the earnout, of which $ 0.2 million was paid in the three months ended March 31, 2024.

Total remeasurement expense recognized for the three months ended March 31, 2024 and March 31, 2023 was $ 0 and $ 0.3 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 March 31, 2024, the estimated fair value of the remaining contingent consideration totaled $ 6.5 million .

Following March 31, 2024, through the date these financial statements were issued, the Company has paid $ 1.0 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 three and nine months ended September 30, 2023 totaled $ 0 and $ 0.1 million, respectively.

Total remeasurement expense recognized for the three and nine months ended September 30, 2022 , respectively, totaled $ 1.2 million and $ 1.2 million, which was included in contingent consideration expense on the Statements of Operations.

The entirety of the Hark contingent consideration was paid during the quarter ended September 30, 2023.

Total remeasurement expense recognized for the three months ended March 31, 2024 and March 31, 2023 totaled $ 0 and $ 0.1 million, respectively.

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

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

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

As of September 30, 2023

As of March 31, 2024

Contingent consideration obligation

3 unchanged sentences

Total liabilities

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

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the three months ended March 31, 2024 and December 31, 2023.

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

Contingent Consideration Liability

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Balance, beginning of year:

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Changes in the fair value of the liability are included in contingent consideration expense on the Consolidated Statements of Operations.

Notes to Consolidated Financial Statements

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

Debt Obligations

Debt obligations consists of the following:

September 30,

Revolver facility

3 unchanged sentences

Term loan, net

Total debt obligations

September 30, 2023

Total debt obligations, net

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

The principal balance consists of the following tranches:

March 31, 2024

Principal Amount

6 unchanged sentences

Revolver Facility

Revolving Credit Facility and Term Loan

8 unchanged sentences

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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The Credit Agreement contains affirmative and negative covenants typical of such financing transactions, and specific financial covenants which require P10 to maintain a minimum leverage ratio.

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

As of September 30, 2023 , the balance drawn on the revolving credit facility is $ 60.5 million and on the term loan, the balance is $ 204.5 million.

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

For the three and nine months ended September 30, 2023 , $ 5.1 million and $ 15.0 million of interest expense was incurred, respectively.

For the three and nine months ended September 30, 2022 , $ 2.1 million and $ 4.6 million of interest expense was incurred, respectively.

As of March 31, 2024, P10 was in compliance with its financial covenants required under the facility.

For the three months ended March 31, 2024 and March 31, 2023, $ 5.4 million and $ 4.8 million of interest expense was incurred, respectively.

Notes to Consolidated Financial Statements

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

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

Debt Issuance Costs

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

Unamortized debt issuance costs for the Revolver Facility and Term Loan as of September 30, 2023 and December 31, 2022 were $ 3.1 million and $ 4.2 million, respectively.

Amortization expense related to debt issuance costs totaled $ 0.4 million and $ 1.1 million for the three and nine months ended September 30, 2023 , respectively, and $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2022 , respectively.

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

(Unaudited, dollar amounts stated in thousands)

Future principal maturities of debt as of March 31, 2024 are as follows:

Related Party Transactions

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This contributed an additional $ 3.4 thousand monthly.

P10 has paid $ 0.1 million and $ 0.2 million in rent to 210 Capital, LLC for the three and nine months ended September 30, 2023 , respectively, and $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2022, respectively.

P10 has paid $ 0.1 million and $ 0.1 million in rent to 210 Capital, LLC for the three months ended March 31, 2024 and March 31, 2023, respectively.

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

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

As of September 30, 2023, the total accounts receivable from the Funds totaled $ 16.8 million , of which $ 5.7 million related to reimbursable expenses and $ 11.1 million related to fees earned but not yet received.

As of March 31, 2024, the total accounts receivable from the Funds totaled $ 23.8 million , of which $ 6.9 million related to reimbursable expenses and $ 16.9 million related to fees earned but not yet received.

As of December 31, 2023 , the total accounts receivable from the Funds totaled $ 18.9 million, of which $ 5.5 million related to reimbursable expenses and $ 13.4 million related to fees earned but not yet received.

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

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

Under this agreement, ECG 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,which totals $ 107.5 million over 7 years .

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 $ 110.1 million over ten years inclusive of new projects added since inception.

This agreement is subject to customary termination provisions.

Since inception, $ 66.2 million of the total $ 110.1 million advisory fees have been recognized as revenue.

Advisory fees earned or recognized under this agreement were $ 5.3 million and $ 15.5 million for the three and nine months ended September 30, 2023 , respectively, and $ 5.5 million and $ 16.6 million for the three and nine months ended September 30, 2022 , respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company also incurs interest income on the balance outstanding.

Revenues from interest were $ 0.2 million and $ 0.5 million for the three and nine months ended September 30, 2023, respectively, and $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2022, respectively, and is reported in management and advisory fees on the Consolidated Statement of Operations.

As of September 30, 2023 and December 31, 2022 , the balance was $ 44.0 million and $ 28.5 million, respectively, 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 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

Notes to Consolidated Financial Statements

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

became effective.

There was $ 43.9 million in remaining performance obligations related to this agreement, which will be recognized between April 1, 2024 and December 31, 2031.

For the three months ended March 31, 2024 and March 31, 2023 , advisory fees earned or recognized under this agreement were $ 4.2 million and $ 4.9 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 $ 0.2 million and $ 0.1 million for the three months ended March 31, 2024 and March 31, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023 , the associated receivable was $ 52.7 million and $ 48.5 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 this agreement, ECG pays ECH for the use of their employees to provide services to Enhanced PC at the direction of ECG.

The Company recognized $ 3.1 million and $ 9.3 million for the three and nine months ended September 30, 2023 , respectively, and $ 3.3 million and $ 7.9 million for the three and nine months ended September 30, 2022, respectively, related to this agreement within compensation and benefits on our Consolidated Statements of Operations.

As of September 30, 2023 and December 31, 2022 , the balance was $ 0.8 million and $ 2.2 million, respectively, and is included in due to related parties on the Consolidated Balance Sheets.

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

The Company recognized $ 3.2 million and $ 3.2 million for the three months ended March 31, 2024 and March 31, 2023, respectively, related to this agreement within compensation and benefits in our Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023 , the associated accrual was $ 0.4 million and $ 2.1 million, respectively, and is included in due to related parties on the Consolidated Balance Sheets.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

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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.

In relation to the strategic partnership with Crossroads effective September 10, 2021 and the Crossroads Advisory Agreement, t he Company recognized $ 1.6 million and $ 6.6 million for the three and nine months ended September 30, 2023 , respectively, and $ 1.2 million and $ 2.2 million for the three and nine months ended September 30, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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, t he Company recognized $ 2.2 million and $ 2.3 million for the three months ended March 31, 2024 and March 31, 2023, 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 recognizes an annual fee of $ 20 thousand of which $ 5 thousand and $ 15 thousand has been recognized for the three and nine months ended September 30, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

The Company recognized no revenue for the three and nine months ended September 30, 2022, respectively.

The funds managed by the Company do not have the ability to change the investment strategy of Crossroads.

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 $ 5 thousand and $ 5 thousand have been recognized for the three months ended March 31, 2024 and March 31, 2023, which is included in management and advisory fees on the Consolidated Statements of Operations.

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 5.

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These lease agreements provide for various renewal options.

Rent expense for the various leased office space and equipment was approximately $ 1.0 million and $ 2.9 million for the three and nine months ended September 30, 2023, respectively, and $ 0.8 million and $ 2.4 million for the three and nine months ended September 30, 2022, respectively.

The Company leases an insignificant amount of office equipment under a non-cancelable financing lease, with the 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 Sheet.

Rent expense for the various leased office space and equipment was approximately $ 1.0 million for the three months ended March 31, 2024 and $ 0.8 million for the three months ended March 31, 2023.

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 September 30, 2023:

The following table presents information regarding the Company’s operating leases as of March 31, 2024:

Operating lease right-of-use assets

Operating lease liabilities

Cash paid for operating lease liabilities

Cash paid during three months ended March 31, 2024 for operating lease liabilities

Weighted-average remaining lease term (in years)

1 unchanged sentence

Notes to Consolidated Financial Statements

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

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

(Unaudited, dollar amounts stated in thousands)

The future contractual lease payments as of March 31, 2024 are as follows:

Total undiscounted lease payments

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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.

Total payments 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 September 30, 2023, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

For the three and nine months ended September 30, 2023 , $ 6.0 million and $ 17.9 million, respectively, was recognized and for the three and nine months ended September 30, 2022 , $ 0 and $ 0 was recognized, respectively.

As of September 30, 2023 and December 31, 2022, the balance was $ 23.1 million and $ 5.2 million, respectively, and is included in accrued compensation and benefits in the Consolidated Balance Sheets.

As of March 31, 2024, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

For the three months ended March 31, 2024 and March 31, 2023, $ 3.0 million and $ 5.9 million of expense was recognized, respectively, which is included in compensation and benefits in the Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023, the balance was $ 29.2 million and $ 26.2 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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Total payment will not exceed $ 10.0 million and any amounts will be paid in October 2027, the fifth anniversary of the effective date.

For the three and nine months ended September 30, 2023 , $ 0.5 million and $ 1.5 million, respectively, of expense was recognized and for the three and nine months ended September 30, 2022 , no expense was recognized.

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

As of September 30, 2023 and December 31, 2022, the balance was $ 1.9 million and $ 0.4 million, respectively, and is included in accrued compensation and benefits on the Consolidated Balance Sheets.

For the three months ended March 31, 2024 and March 31, 2023, the Company recognized $ 0.5 million and $ 0.5 million of expense, respectively, which is included in compensation and benefits in the Consolidated Statements of Operations.

As of March 31, 2024 and December 31, 2023, the balance was $ 2.9 million and $ 2.4 million, respectively, and is included in accrued compensation and benefits in 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 parties.

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

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

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

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

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

The associated contingent payments to customers asset balance was $ 12.5 million and $ 13.6 million as of September 30, 2023 and December 31, 2022, respectively.

The Company recognized $ 0.4 million and $ 1.1 million of amortization of contingent payments to customers for the three and nine months ended September 30, 2023 , respectively, and $ 0 and $ 0 of

The Company recognizes accrued contingent liabilities and contingent payments to customers assets in our Consolidated Balance Sheets for agreements that exist 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 agreements.

As of March 31, 2024, the Company has determined that the put options are probable of being exercised and have accrued estimated contingent liabilities and contingent payments to customers.

As of March 31, 2024 and December 31, 2023, the associated liabilities were $ 16.2 million and $ 16.2 million, respectively, and are included in accrued contingent liabilities on the Consolidated Balance Sheets.

The associated contingent payments to customers assets were $ 13.6 million and $ 14.0 million as of March 31, 2024 and December 31, 2023, respectively.

The Company recognized $ 0.4 million

Notes to Consolidated Financial Statements

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

amortization of contingent payments to customers for the three and nine months ended September 30, 2022, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

(Unaudited, dollar amounts stated in thousands)

and $ 0.4 million of amortization of contingent payments to customers for the three months ended March 31, 2024 and March 31, 2023, 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.

Executive Transition Agreement

As described in Note 18, subsequent to the end of the quarter, the Company's Co-CEOs transitioned into Board of Directors roles and were succeeded by a newly hired CEO.

Associated with their transition, the Co-CEOs received severance payments and accelerated bonus payments.

For the three and nine months ended September 30, 2023, the Company recognized $ 4.9 million of expense related to the executive transition agreement which is included in compensation and benefits in the Consolidated Statement of Operations.

Departure of Chief Operating Officer

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.

As of March 31, 2024 and December 31, 2023 , the Company has $ 1.2 million of severance payable related to the retirement, which is included in accrued compensation and benefits in the Consolidated Balance Sheets.

The severance expense was accrued in the fourth quarter of 2023 and has no impact on the Consolidated Statements of Operations for the three months ended March 31, 2024 and March 31, 2023 .

In addition, the COO will be granted options to purchase 34,608 shares of common stock of the Company.

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 disclosed anything more likely than not to be recognized below.

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, if any are applicable.

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

No formal claims have been filed by the Oregon DOJ.

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

The subsidiary of Enhanced Capital completed non-binding mediation in July 2023 and a settlement has been negotiated which is pending Board and Oregon DOJ approval.

The Company has agreed with the insurance carrier to contribute $ 1.5 million toward the settlement amount and is exploring additional recoveries.

Based on our assessment of the current stage of this investigation and settlement, our financial results for the three and nine months ended September 30, 2023, includes an accrual of the settlement amount of $ 2.6 million and $ 3.6 million, respectively, related thereto in accrued expenses on the Consolidated Balance Sheets and other (expense)/income on the Consolidated Statements of Operation.

Additionally, following an executed insurance recovery agreement, the Company has recorded a receivable of $ 1.5 million associated with the insurance recovery in accounts receivable on the Consolidated Balance Sheets and other (expense)/income on the Consolidated Statements of Operation.

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

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

1 unchanged sentence

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

Based on these methodologies, the Company’s effective income tax rate was ( 25.90 %) and ( 91.32 %) for the three and nine months ended September 30, 2023 , respectively.

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

The Company's effective income tax rate for the three and nine months ended September 30, 2022 was 25.77 % and 25.90 %, respectively.

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

Based on these methodologies, the Company’s effective income tax rate was 25.11 % for the three months ended March 31, 2024.

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

Absent any discrete items for both years, the Company's effective tax rates would be 29.44 % and 28.64 % for the three months ended March 31, 2024 and March 31, 2023, respectively.

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

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

1 unchanged sentence

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

As of September 30, 2023 , the Company has recorded a $ 12.8 million

Notes to Consolidated Financial Statements

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

valuation allowance against deferred tax assets, primarily related to a note impairment.

As of March 31, 2024, the Company has recorded a $ 12.8 million valuation allowance against deferred tax assets, primarily related to a note impairment.

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

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The Company is not currently under audit.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Stockholders' Equity

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

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

Starting with options granted in 2024 under the Plan, vesting occurs on a graded schedule with 25 % vesting on each of the second, third, fourth, and fifth anniversary of the grant date, but only if the grantee is continuously employed by the Company or a subsidiary through each such date.

Options granted prior to 2024 under both the Plan and the 2018 Plan cliff vest over a period of four or five year s.

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

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

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

This was paid on April 4, 2022.

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

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 September 30, 2023, there are 4,016,477 shares available for grant.

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

A summary of stock option activity for the three months ended March 31, 2024 is as follows:

Weighted Average

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Expired/Forfeited

Outstanding as of September 30, 2023

Exercisable as of September 30, 2023

Compensation expense equal to the grant date fair value is recognized for these awards over the vesting period and is included in compensation and benefits on our Consolidated Statements of Operations.

The stock-based compensation expense for stock options was $ 1.9 million and $ 5.3 million for the three and nine months ended September 30, 2023 ,

Notes to Consolidated Financial Statements

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

respectively, and $ 0.1 million and $ 2.4 million for the three and nine months ended September 30, 2022, respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of September 30, 2023 was $ 7.8 million and is expected to be recognized over a weighted average period of 3.18 years.

Outstanding as of March 31, 2024

Exercisable as of March 31, 2024

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 in 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.

Until October 2023, stock price volatility was 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.

Since October 2023, stock price volatility is estimated using a weighted average of P10 and 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.

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

The stock-based compensation expense for stock options was $ 2.8 million and $ 1.6 million for the three months ended March 31, 2024 and March 31, 2023, respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of March 31, 2024 was $ 14.2 million and is expected to be recognized over a weighted average period of 3.22 years.

Any future forfeitures will impact this amount.

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

For the Nine Months Ended September 30,

Expected life

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

The weighted average assumptions used in calculating the fair value of stock options granted during the three months ended March 31, 2024 and March 31, 2023 were as follows:

For the Three Months Ended March 31,

Expected life (in years)

Expected volatility

1 unchanged sentence

Expected dividend yield

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

The Company has granted restricted stock awards ("RSAs") to certain non-employee directors.

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

3 unchanged sentences

Outstanding as of December 31, 2023

Outstanding as of September 30, 2023

Outstanding as of March 31, 2024

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.

1 unchanged sentence

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 September 30, 2023 , certain performance metrics have been met and specific employees have earned $ 7.8 million in value of which $ 6.6 million was issued in shares and $ 1.2 million was issued in cash.

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

As of March 31, 2024 , certain performance metrics have been met and specific employees have earned $ 8.8 million in value, which $ 6.6 million was issued in shares and $ 2.2 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.

Future vested tranches will be settled in cash.

An expense of $ 0.4 million and $ 5.6 million has been recorded for the three and nine months ended September 30, 2023 , respectively, and $ 3.9 million for the three and nine months ended September 30, 2022 on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 4.9 million as of September 30, 2023.

An expense of $ 0.4 million and $ 3.6 million has been recorded for the three months ended March 31, 2024 and March 31, 2023, respectively, on the Consolidated Statements of Operations.

The unrecognized expense associated with the Bonaccord Units was $ 4.3 million as of March 31, 2024.

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

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

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

An expense of $ 0 and $ 0.3 million has been recorded for the three and nine months ended September 30, 2023 , respectively, and $ 0.6 million for the three and nine months ended September 30, 2022 on the Consolidated Statements of Operations.

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.

All Hark Units have vested and been issued in 2023.

An expense of $ 0 and $ 0.3 million has been recorded for the three months ended March 31, 2024 and March 31, 2023, respectively, 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, sold, 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 $ 1.0 million increments quarterly beginning on October 20, 2023 and at the start of each of the following three quarters.

Each $ 1.0 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 March 31, 2024 , $ 2.0 million has been issued.

For the three months ended March 31, 2024 , $ 0.6 million of stock compensation was recognized on the Consolidated

Notes to Consolidated Financial Statements

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

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 or vested and settled in cash.

(Unaudited, dollar amounts stated in thousands)

Statements of Operations.

No stock compensation expense for these units was incurred for the three months ended March 31, 2023.

The unrecognized expense associated with the Executive Transition Units was $ 2.9 million as of March 31, 2024.

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 March 31, 2024 , no ne of the Executive Market Units have vested.

For the three months ended March 31, 2024 , $ 0.7 million of stock compensation was recognized on the Consolidated Statements of Operations.

No stock compensation was incurred for the three months ended March 31, 2023 .

The unrecognized expense associated with the Executive Market Units was $ 9.6 million as of March 31, 2024.

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 market 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

1 unchanged sentence

Outstanding as of December 31, 2023

Outstanding as of September 30, 2023

Outstanding as of March 31, 2024

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 (loss)/income by the weighted-average number of common shares outstanding for the period.

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

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

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

For the three months ended March 31, 2024 and March 31, 2023, diluted EPS also 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

(Unaudited, 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:

For the Three Months

Ended September 30,

For the Nine Months

Ended September 30,

Numerator for basic calculation—Net (loss)/income

Ended March 31,

Numerator for basic calculation—Net income

attributable to P10

Adjustment for:

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

Numerator for (loss)/earnings per share

Numerator for (loss)/earnings per share assuming

Denominator for basic calculation—Weighted-

average shares

Net income attributable to noncontrolling interests in P10 Intermediate

Numerator for earnings per share

Numerator for 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

Denominator for (loss)/earnings per share assuming dilution

(Loss)/earnings per share—basic

(Loss)/earnings per 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 1.8 million and 3.2 million options for the three and nine months ended September 30, 2023 , respectively, because the options were anti-dilutive.

The computations of diluted earnings per share on a weighted average basis exclude 1.0 million and 1.0 million options for the three and nine months ended September 30, 2022 , respectively, because the options were anti-dilutive.

Notes to Consolidated Financial Statements

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

Denominator for earnings per share assuming dilution

Earnings per Class A share—basic

Earnings per Class A share—diluted

Earnings per Class B share—basic

Earnings per Class B share—diluted

T he computations of diluted earnings per share on a weighted average basis would exclude 12.0 million options for the three months ended March 31, 2024 , and 5.1 million options for the three months ended March 31, 2023 , respectively, because the options were anti-dilutive.

Subsequent Events

The Board of the Company appointed Luke A.

Sarsfield III as Chief Executive Officer (“CEO”) of the Company, effective as of October 23, 2023.

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.

The initial term of the Employment Agreement is for a five-year period and will automatically renew for additional one-year periods unless either party delivers written notice of non-renewal at least 90 days prior to the expiration of the then-current term.

Pursuant to the Employment Agreement, Mr.

Sarsfield will be entitled to receive:

(i) an annual base salary of $ 1 million;

(ii) a target annual cash bonus of $ 1.5 million based on certain performance criteria and benchmarks to be set each year by the Board or the Compensation Committee thereof;

(iii) a target annual incentive bonus of $ 5 million based on certain performance criteria and benchmarks to be set each year by the Board or the Compensation Committee thereof, of which (a) 70 % will be awarded in the form of carried interest in certain investment vehicles controlled by the Company, (b) 20 % will be awarded in the form of restricted stock units granted under the Company’s 2021 Incentive Plan (the “Plan”), and (c) 10 % will be awarded in the form of stock options granted under the Plan;

(iv) an initial signing bonus of $ 1 million, which the Company intends to pay in the form of fully vested shares of common stock under the Plan in lieu of cash;

(v) an initial grant of restricted stock units with an aggregate value of $ 6 million, which will vest ratably over the first three anniversaries of the Effective Date;

(vi) reimbursement of up to $ 85,000 for legal expenses incurred in connection with the negotiation of the Employment Agreement;

and (vii) reimbursements for reasonable out-of-pocket expenses during the term of employment.

In addition, Mr.

Sarsfield will be entitled to receive up to $ 40 million in the aggregate of additional grants of restricted stock units, comprised of up to five grants of $ 8 million each, upon achieving certain stock price performance hurdles.

The Employment Agreement also provides that if the Company terminates the employment of Mr.

Sarsfield without cause, or if Mr.

Sarsfield resigns for good reason, then Mr.

Sarsfield will be entitled to receive, in addition to any accrued and unpaid benefits:

(i) a lump sum payment equal to one and one half (1.5) times his then-current base salary;

(ii) a lump sum payment equal to one and one half (1.5) times his then-current annual cash bonus;

and (iii) immediate vesting of any and all outstanding equity awards and all carried interests in certain investment vehicles controlled by the Company.

The foregoing severance payments would be conditioned upon Mr.

Sarsfield’s execution, non-revocation and delivery of a general release of the Company and its affiliates.

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.

Each Transition Agreement provides for certain transition and severance related payments.

Pursuant to his Transition Agreement, Mr.

Alpert will be entitled to receive a salary of $ 0.1 million and a transition award having an aggregate gross value of $ 0.1 million in the form of restricted stock units, which will vest on the first anniversary.

Pursuant to his Transition Agreement, Mr.

Webb will be entitled to receive a salary of $ 0.1 million and a transition award having an aggregate gross value of $ 4 million in the form of restricted stock units, which will be granted in four equal quarterly installments with the first grant occurring on the effective date, and each grant will vest on the first anniversary of the applicable grant date.

The Transition Agreements may be terminated by either party upon 90 days’

prior written notice.

Upon any such termination effective prior to the first anniversary, such executive will be entitled to receive:

(i) the accrued and unpaid portion of the transition salary;

and (ii) accelerated vesting of a portion of the transition restricted stock units, prorated based on the number of days employed during the transition period.

In addition, the Transition Agreements each provide that the cessation of their respective roles as Co-Chief Executive Officer was without cause under their existing amended and restated employment agreements with the Company, each dated May 12, 2023 (each, an “Existing Employment Agreement”).

Accordingly, Mr.

Alpert and Mr.

Webb will receive the following severance payments and benefits in accordance with their respective Transition Agreements:

(i) a cash transition severance payment of $ 1.2 million;

(ii) a severance payment having an aggregate gross value of $ 5.65 million, which is the equivalent of the remaining base salary and bonus under their respective Existing Employment Agreements, which payment shall consist of:

(a) a cash payment of $ 1.6 million;

(b) an award of $ 3.4 million, which the Company intends pay in the form of fully vested shares of common stock under the Plan in lieu of cash and (c) an award of stock options having an aggregate value of $ 650,000 , which are fully vested and;

and (iii) all unvested options, restricted stock units or other equity awards issued to such executive under the Plan and carried interests in certain investment vehicles controlled by the Company became fully vested and immediately exercisable.

On October 13, 2023, the Company extended notes to 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 cash to certain employees and is collateralized by employees' privately owned shares of the Company.

The term of the notes is five years , expiring on October 13, 2028 .

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

Notes to Consolidated Financial Statements

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

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

In accordance with ASC 855, Subsequent Events , the Company evaluated all material events or transactions that occurred after September 30, 2023 , the Consolidated Balance Sheet date, through the date the Consolidated Financial Statements were issued, and determined there have been no additional events or transactions that would materially impact the Consolidated Financial Statements.

The Board of Directors of the Company has declared a quarterly cash dividend of $ 0.035 per share of Class A and Class B common stock, payable on June 20, 2024, to the holders of record as of the close of business on May 31, 2024.

On May 9, 2024 an amendment to the Transition Agreement with Robert Alpert was executed, resigning him as Executive Chairman and Chairman of the Board effective as of the Company's Annual Meeting on June 14, 2024.

In accordance with ASC 855, Subsequent Events, the Company evaluated all material events or transactions that occurred after March 31, 2024 , 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.

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

What changed 10-Q

Item 1. Financial Statements