What changed in this filing

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Item 1. Financial Statements

2024-08-09 compared with 2024-05-09 · 289 added, 216 removed, 762 unchanged (40% of the section changed)

28 unchanged sentences

510,000,000 shares authorized;

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

60,405,928 issued and 53,471,354 outstanding as of June 30, 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;

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

58,330,995 shares issued and 58,207,544 shares outstanding as of June 30, 2024, and 58,597,718 shares issued and 58,474,267 shares outstanding as of December 31, 2023, respectively

Treasury stock

7 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Management and advisory fees

12 unchanged sentences

Interest expense, net

Other income/ (loss)

Total other (expense)

Net income/(loss) before income taxes

Income tax (expense)/benefit

Net income before income taxes

Income tax (expense)

net income attributable to noncontrolling interests in P10 Intermediate

21 unchanged sentences

Accrual for excise tax associated with stock repurchases

Distributions to non-controlling interests, net

Distribution to non-controlling interests, net

Dividends declared

1 unchanged sentence

Balance at March 31, 2023

Stock-based compensation

Issuance of restricted stock units

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

Distribution to non-controlling interests, net

Dividends declared

Dividends paid per share $ 0.03

Balance at June 30, 2023

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

Common Stock - Class A

2 unchanged sentences

Non Controlling

Stockholders'

Paid-in-capital

7 unchanged sentences

Accrual for excise tax associated with stock repurchases

Distributions to non-controlling interests, net

Distribution to non-controlling interests, net

Dividends declared

1 unchanged sentence

Balance at March 31, 2024

Stock-based compensation

Issuance of restricted stock awards

Issuance of restricted stock units

Exchange of Class B common stock for Class A common stock

Exercise of stock options

Repurchase of common stock for employee tax witholding and strike price

Stock repurchase

Accrual for excise tax associated with stock repurchases

Distribution to non-controlling interests, net

Dividends declared

Dividends paid per share $ 0.04

Balance at June 30, 2024

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

1 unchanged sentence

(Unaudited, in thousands)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

5 unchanged sentences

Income from unconsolidated subsidiaries

Deferred tax expense/(benefit)

Deferred tax expense

Amortization of contingent payment to customers

37 unchanged sentences

(Unaudited, in thousands)

For the Three Months

Ended March 31,

For the Six Months

Ended June 30,

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

12 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

Description of Business

38 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

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

10 unchanged sentences

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.

As of June 30, 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.

5 unchanged sentences

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.

As of June 30, 2024, $ 71.9 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.

13 unchanged sentences

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

Effective June 14, 2024, Mr.

Alpert resigned as Executive Chairman and Chairman of the Board and the board of the Company appointed CEO and President Mr.

Sarsfield to Chairman of the Board.

In connection with Mr.

Alpert's resignation as Executive Chairman, the Company and Mr.

Alpert agreed to the early termination of Mr.

Alpert's Transition Agreement.

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

3 unchanged sentences

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

Management believes it has made all necessary adjustments so that

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.

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

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.

All intercompany transactions and balances have been eliminated upon consolidation.

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.

The results for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year ended December 31, 2024 .

Principles of Consolidation

17 unchanged sentences

Reclassifications

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

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

Use of Estimates

2 unchanged sentences

Actual results could differ from those estimates.

Notes to Consolidated Financial Statements

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

Cash and Cash Equivalents

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

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.

As of June 30, 2024, and December 31, 2023, cash equivalents include money market funds of $ 11.4 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”) 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.

2 unchanged sentences

Restricted Cash

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.

Restricted cash as of June 30, 2024 and December 31, 2023 was primarily cash on deposit related to RCP's lease and 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.

5 unchanged sentences

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.

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

Notes Receivable

3 unchanged sentences

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

The Company determines 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.

The Company establishes reserves for any estimated credit losses with a corresponding charge in the 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 .

accordingly, no allowances have been established as of June 30, 2024 and December 31, 2023 .

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

2 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023 , respectively, there is $ 0 and $ 9.6 million within prepaid expenses and other assets on the Consolidated Balance Sheets associated with allocable state tax credits purchases.

Notes to Consolidated Financial Statements

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

Investment in Unconsolidated Subsidiaries

1 unchanged sentence

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

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

3 unchanged sentences

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.

All other investments in unconsolidated subsidiaries are accounted for under the measurement alternative.

Property and Equipment

20 unchanged sentences

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.

Notes to Consolidated Financial Statements

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

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

(Unaudited, dollar amounts stated in thousands)

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

14 unchanged sentences

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

As of March 31, 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.

As of June 30, 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 June 30, 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.

10 unchanged sentences

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

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

As of June 30, 2024 and December 31, 2023 , the contingent consideration is related to the acquisition of Bonaccord on the Consolidated Balance Sheets.

Notes to Consolidated Financial Statements

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

Accrued Compensation and Benefits

1 unchanged sentence

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

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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 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.

15 unchanged sentences

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

As of March 31, 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:

As of June 30, 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.

1 unchanged sentence

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

The Company estimates the fair value of the credit facility using level two inputs.

The Company discounts the future cash flows using current interest rates which the Company could obtain similar borrowings.

The Company estimates the fair value of the due from related parties associated with the Advisory Agreements based on the current expectation of payments.

If the payments are not expected to be made on a short-term basis, the fair value is estimated using level three inputs and a discounted cash flow.

See Note 12 for

Notes to Consolidated Financial Statements

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

further details.

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.

1 unchanged sentence

See Note 10 for additional information.

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

Revenue Recognition

11 unchanged sentences

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.

Advisory service 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 allocates a portion of consideration received under an arrangement to a financing component when it determines that a significant financing component exists.

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

To the extent the Company determines that there is a significant financing component in a contract with a customer, it determines the impact of the time value of money in adjusting the transaction price to account for the income associated with the financing component by estimating the discount rate that would be reflected in a separate financing transaction between the customer and the Company at contract inception, based upon the credit characteristics of the customer receiving financing in the contract.

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.

3 unchanged sentences

Other Revenue

Notes to Consolidated Financial Statements

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

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

6 unchanged sentences

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 stated in thousands)

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

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.

23 unchanged sentences

Forfeitures are recognized as they occur .

Notes to Consolidated Financial Statements

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

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 in deciding how to allocate resources and in assessing performance.

According to ASC 280, Segment Reporting , 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 stated in thousands)

Business Acquisitions

21 unchanged sentences

Recent Accounting Pronouncements

Pronouncements Recently Adopted

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

3 unchanged sentences

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

Notes to Consolidated Financial Statements

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

Pronouncements Not Yet Adopted

2 unchanged sentences

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 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.

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

We will adopt the standard in our financial statements for the fiscal year ending December 31, 2024 and the Company expects to expand its segment disclosures.

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.

3 unchanged sentences

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Management fees

7 unchanged sentences

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

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.

For the three and six months ended June 30, 2024 , the strategic alliance expense reported was $ 0.9 million and $ 1.5 million, respectively.

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

This is reported on the Consolidated Statements of Operatio ns 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.

1 unchanged sentence

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 .

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

1 unchanged sentence

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.

This commitment has not yet been met as of June 30, 2024 as Fund III

Notes to Consolidated Financial Statements

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

has not yet started raising capital and as such, there is no impact to the consolidated financial statements.

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.

1 unchanged sentence

Notes Receivable

The Company has two types of notes receivable.

The Company has two significant 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.

This agreement provides for a note to BCP for $ 5.0 million, of which $ 4.9 million was drawn as of June 30, 2024 with a maturity date of September 30, 2031 .

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

Internal Revenue Code and (ii) 5.5 %.

6 unchanged sentences

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.

As of June 30, 2024 and December 31, 2023, the notes receivable balance associated with these notes was $ 5.9 million and $ 5.8 million, respectively.

The Company recognized interest income of $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024 , respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2023 , respectively.

Variable Interest Entities

Consolidated VIEs

The Company consolidates certain VIEs for which it is the primary beneficiary.

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

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.

The assets of the consolidated VIEs totaled $ 559.6 million and $ 579.4 million as of June 30, 2024 and December 31, 2023 , respectively.

The liabilities of the consolidated VIEs totaled $ 414.6 million and $ 397.6 million as of June 30, 2024 and December 31, 2023, respectively.

The assets of our consolidated VIEs are owned by those entities and not generally available to satisfy P10’s obligations.

With the exception of the Credit Facility, 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

6 unchanged sentences

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.

As of June 30, 2024, investment in unconsolidated subsidiaries totaled $ 2.5 million, of which $ 0.9 million related to RCP's investment in a privately held investment manager, $ 1.7 million related to ECG’s asset management businesses, and

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

$ 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.

Property and Equipment

Property and equipment consist of the following:

As of March 31,

As of June 30,

As of December 31,

5 unchanged sentences

Goodwill and Intangibles

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

Changes in goodwill for the six months ended June 30, 2024 are as follows:

Balance at December 31, 2023

Increase from acquisitions

Balance at March 31, 2024

Balance at June 30, 2024

Intangibles consists of the following:

As of March 31, 2024

As of June 30, 2024

Gross Carrying

14 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

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.

3 unchanged sentences

Fair Value Measurements

Financial Instruments not recognized at Fair Value

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.

Our financial instruments not recognized at fair value were as follows:

As of June 30,

As of December 31, 2023

Carrying Value

Fair Value Level

Due from related party - Advisory Agreements

Debt Obligations

As of June 30, 2024 and December 31, 2023, debt obligations' carrying value approximates fair value.

Earnouts associated with the acquisitions of Bonaccord and Hark

2 unchanged sentences

Payments are made after each close.

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.

As of June 30, 2024, $ 14.4 million has been paid in total contingent consideration associated with the earnout, of which $ 1.2 million was paid in the six months ended June 30, 2024.

Total remeasurement expense recognized for the three and six months ended June 30, 2024 wa s $ 0.1 million an d $ 0.1 million, respectively.

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

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.

As of June 30, 2024 , the estimated fair value of the remaining contingent consideration totaled $ 5.6 million.

Following June 30, 2024, the Company has paid $ 1.3 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 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.

Total remeasurement expense recognized for the three and six months ended June 30, 2024 totaled $ 0 and $ 0 , respectively.

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

Notes to Consolidated Financial Statements

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

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

As of March 31, 2024

As of June 30,

Contingent consideration obligation

3 unchanged sentences

Total liabilities

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.

For the liabilities presented in the tables above, there were no changes in fair value hierarchy levels during the six months ended June 30, 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 Three Months Ended March 31,

For the Six Months Ended June 30,

Balance, beginning of year:

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Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

The principal balance consists of the following tranches:

March 31, 2024

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

June 30, 2024

Principal Amount

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Revolver Facility

Revolving Credit Facility and Term Loan

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

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

In October 2022, the accordion feature was exercised with a split of $ 87.5 million worth of term loan and $ 37.5 million of revolver.

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

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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 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 stated in thousands)

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

As of June 30, 2024, P10 was in compliance with its financial and other covenants required under the facility.

For the three and six months ended June 30, 2024, $ 5.8 million and $ 11.2 million of interest expense was incurred, respectively.

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

Future principal maturities of debt as of June 30, 2024 are as follows:

Related Party Transactions

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

This contributed an additional $ 3.4 thousand monthly.

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

Notes to Consolidated Financial Statements

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

contributed an additional $ 3.4 thousand monthly.

P10 has paid $ 0.1 million and $ 0.1 million in rent to 210 Capital, LLC for the three and six months ended June 30, 2024 , respectively, and $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 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 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 June 30, 2024, the total accounts receivable from the Funds totaled $ 24.6 million , of which $ 8.4 million related to reimbursable expenses and $ 16.2 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.

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

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

In certain instances, the Company may incur expenses related to specific products that never materialize and therefore would not be reimbursed and expensed at that time.

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.

ECG provides advisory services relating to new projects undertaken by Enhanced PC under additional arrangements governed by the terms of the Advisory Agreement.

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.

The Company allocates a portion of the consideration received under this arrangement to a financing component when it determines that a significant financing component exists.

As of June 30, 2024, one of the Company's contracts with Enhanced PC contained a significant financing component, as a result of the Company's expectation that the period between services being provided and cash collection will exceed one year.

Interest income related to the identified significant financing component was $ 5.0 thousand and $ 5.6 thousand for the three and six months ended June 30, 2024, respectively.

No significant financing components were identified for the three and six months ended June 30, 2023.

As of June 30, 2024, the total advisory fees are $ 110.1 million over ten years .

These agreements are subject to customary termination provisions.

Since inception, $ 70.4 million of the total $ 110.1 million advisory fees have been recognized as revenue.

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.

There was $ 39.7 million in remaining performance obligations related to these agreements, which will be recognized between July 1, 2024 and December 31, 2031.

For the three and six months ended June 30, 2024, advisory fees earned or recognized under these agreements were $ 4.2 million and $ 8.4 million, respectively, and $ 5.3 million and $ 10.2 million for the three and six months ended June 30, 2023 , respectively, and is reported in management and advisory fees on the Consolidated Statements of Operations.

The Company invoices Enhanced PC quarterly in arrears and earns interest on balances not paid within 30 days.

Revenues from interest were $ 0.3 million and $ 0.5 million for the three and six months ended June 30, 2024 , respectively, and $ 0.1 million and $ 0.3 million for the three and six months ended June 30, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

As of June 30, 2024 and December 31, 2023 , the associated receivable was $ 56.9 million and $ 48.5 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 multi-year projects covered under this agreement.

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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)

The Company recognized $ 3.2 million and $ 6.4 million for the three and six months ended June 30, 2024 , respectively, and $ 3.0 million and $ 6.2 million for the three and six months ended June 30, 2023, respectively, related to this agreement within compensation and benefits on the Consolidated Statements of Operations.

As of June 30, 2024 and December 31, 2023 , the associated accrual was $ 1.0 million and $ 2.1 million, respectively, and is included in due to related parties on the Consolidated Balance Sheets.

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

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

Notes to Consolidated Financial Statements

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

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

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

In relation to the strategic partnership with Crossroads effective September 10, 2021 and the Crossroads Advisory Agreement, 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.

In relation to the strategic partnership with Crossroads effective September 10, 2021 and the Crossroads Advisory Agreement, t he Company recognized $ 2.1 million and $ 4.3 million for the three and six months ended June 30, 2024 , respectively, and $ 2.6 million and $ 5.0 million for the three and six months ended June 30, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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

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The 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.

Two members of the Board of Directors of the Company, including the Vice-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 $ 10 thousand has been recognized for the three and six months ended June 30, 2024 , respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

The Company recognized $ 5 thousand and $ 10 thousand for the three and six months ended June 30, 2023, respectively.

Upon the closing of the Bonaccord acquisition on September 30, 2021, an Advance Agreement and Secured Promissory Note was signed with BCP, an entity that was formed by employees of the Company.

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These lease agreements provide for various renewal options.

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

Rent expense for the various leased office space and equipment was approximately $ 1.1 million and $ 2.1 million for the three and six months ended June 30, 2024, respectively, and $ 1.1 million and $ 1.9 million for the three and six months ended June 30, 2023, respectively.

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

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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 March 31, 2024:

The following table presents information regarding the Company’s operating leases as of June 30, 2024:

Operating lease right-of-use assets

Operating lease liabilities

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

Cash paid during six months ended June 30, 2024 for operating lease liabilities

Weighted-average remaining lease term (in years)

Weighted-average discount rate

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

The future contractual lease payments as of June 30, 2024 are as follows:

Total undiscounted lease payments

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Total operating lease liabilities

Notes to Consolidated Financial Statements

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

Earnout Payment

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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 payments 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 has the potential to extend an additional two years.

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

As of March 31, 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.

As of June 30, 2024, the Company has determined that only the first two EBITDA hurdles are probable of being achieved.

For the three and six months ended June 30, 2024 , $ 3.1 million and $ 6.1 million of expense, respectively, was recognized and for the three and six months ended June 30, 2023 , $ 5.9 million and $ 11.8 million was recognized, respectively, which is included in compensation and benefits in the Consolidated Statements of Operations.

As of June 30, 2024 and December 31, 2023, the balance was $ 32.3 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 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.

For the three and six months ended June 30, 2024, the Company recognized $ 0.5 million and $ 1.0 million of expense , respectively, and for the three and six months ended June 30, 2023 , $ 0.5 million and $ 1.0 million was recognized, respectively, which is included in compensation and benefits on the Consolidated Statements of Operations.

As of June 30, 2024 and December 31, 2023, the balance was $ 3.4 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 assets in our Consolidated Balance Sheets for agreements that exist between ECG and third party customers.

The Company recognizes accrued contingent liabilities and contingent payments to customers assets in the 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.

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

Both options are not exercisable until a certain period of time has lapsed per the agreements.

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 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.

As of June 30, 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 June 30, 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 $ 13.2 million and $ 14.0 million as of June 30, 2024 and December 31, 2023 , respectively.

The Company recognized $ 0.3 million and $ 0.7 million of amortization of contingent payments to customers for the three and six months ended June 30, 2024 , respectively, and $ 0.6 million and $ 0.2 million of amortization of contingent payments to customers for the three and six months ended June 30, 2023, respectively, which is included in management and advisory fees on the Consolidated Statements of Operations.

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

Departure of 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.

Departure of the Chief Operating Officer

William "Fritz" Souder, the Company's Chief Operating Officer ("COO"), retired from P10 in May of 2024.

Associated with his retirement, the COO received $ 1.2 million of severance payments.

As of June 30, 2024 and December 31, 2023 , the

Notes to Consolidated Financial Statements

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

Company has $ 0 and $ 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 and six months ended June 30, 2024 and for the three and six months ended June 30, 2023.

The severance payment was made in May 2024.

In addition, the COO was granted options to purchase 34,608 shares of common stock of the Company in May 2024, which remain exercisable for a period of 90 days following the termination.

Contingencies

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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 25.11 % 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.

Based on these methodologies, the Company’s effective income tax rate was 31.76 % and 30.24 % for the three and six months ended June 30, 2024, respectively.

The Company's effective income tax rate was 59.62 % and 29.80 % for the three and six months ended June 30, 2023, respectively.

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

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

As of March 31, 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.

As of June 30, 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 six months ended June 30, 2024.

The Company monitors federal and state legislative activity and other developments that may impact our tax positions and their relation to the income tax provision.

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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 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.

Notes to Consolidated Financial Statements

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

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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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.

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

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.

On June 14, 2024, at the Annual Meeting of Stockholders, the shareholders authorized an increase of 11,000,000 shares that may be issued under the Plan, resulting in a total of 29,300,000 shares available for grant under the Plan and the 2018 Plan.

As of June 30, 2024, there are 9,635,674 shares available for grant under the Plan.

A summary of stock option activity for the six months ended June 30, 2024 is as follows:

Weighted Average

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Expired/Forfeited

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.

Outstanding as of June 30, 2024

Exercisable as of June 30, 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 the Consolidated Statements of Operations.

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.

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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.

The dividend yield is based on the quarterly dividend as of the grant date.

The stock-based compensation expense for stock options was $ 2.5 million and $ 5.3 million for the three and six months ended June 30, 2024 , respectively, and $ 1.8 million and $ 3.4 million for the three and six months ended June 30, 2023, respectively.

Unrecognized stock-based compensation expense related to outstanding unvested stock options as of June 30, 2024 was $ 12.8 million and is expected to be recognized over a weighted average period of 3.07 years.

Any future forfeitures will impact this amount.

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,

The weighted average assumptions used in calculating the fair value of stock options granted during the six months ended June 30, 2024 and June 30, 2023 were as follows:

For the Six Months Ended June 30,

Expected life (in years)

2 unchanged sentences

Expected dividend yield

Notes to Consolidated Financial Statements

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

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

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Outstanding as of December 31, 2023

Outstanding as of March 31, 2024

Outstanding as of June 30, 2024

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

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.

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

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

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

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

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

As of 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.

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

As of June 30, 2024 , certain performance metrics have been met and specific employees have earned $ 9.6 million in value, which $ 6.6 million was issued in shares and $ 3.0 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 recognize during the period.

Future vested tranches will be settled in cash.

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.

An expense of $ 0.1 million and $ 0.1 million has been recorded for the three and six months ended June 30, 2024 , respectively, and $ 1.6 million and $ 5.2 million for the three and six months ended June 30, 2023 on the Consolidated Statements of Operations.

As of June 30, 2024, the Company deemed $ 13.0 million probable and $ 0.2 million is unrecognized expense.

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

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

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.

All Hark Units have vested and been issued.

An expense of $ 0 has been recorded for the three and six months ended June 30, 2024 , and $ 0.3 million for the three and six months ended June 30, 2023 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.

2 unchanged sentences

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 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.

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 June 30, 2024 , $ 3.0 million has been issued.

For the three and six months ended June 30, 2024 , $ 0.6 million and $ 1.2 million of stock compensation expense was recognized on the Consolidated Statements of Operations.

No stock compensation expense for these units was incurred for the three and six months ended June 30, 2023 .

The unrecognized expense associated with the Executive Transition Units was $ 2.3 million as of June 30, 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.

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

Notes to Consolidated Financial Statements

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

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.

1 unchanged sentence

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.

As of June 30, 2024 , no ne of the Executive Market Units have vested.

For the three and six months ended June 30, 2024 , $ 0.7 million and $ 1.4 million of stock compensation expense was recognized on the Consolidated Statements of Operations.

No stock compensation expense for these units was incurred for the three and six months ended June 30, 2023 .

The unrecognized expense associated with the Executive Market Units was $ 8.9 million as of June 30, 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 life (in years)

Expected volatility

1 unchanged sentence

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.

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 Units 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 March 31, 2024

Outstanding as of June 30, 2024

Earnings Per Share

2 unchanged sentences

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

For the three months ended March 31, 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.

For the three and six months ended June 30, 2024, 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.

2 unchanged sentences

Notes to Consolidated Financial Statements

(Unaudited, dollar amounts stated in thousands)

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

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

For the Three Months

Ended March 31,

Ended June 30,

For the Six Months

Ended June 30,

Numerator for basic calculation—Net income

14 unchanged sentences

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.

T he computations of diluted earnings per share on a weighted average basis would exclude 11.9 million and 11.1 million options for the three and six months ended June 30, 2024 , respectively, because the options were anti-dilutive.

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

Subsequent Events

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.

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 September 20, 2024, to the holders of record as of the close of business on August 30, 2024.

On August 1, 2024, the Company entered into a restatement agreement, which amends and restates the Company's Credit Agreement (the "Amended and Restated Credit Agreement").

The Amended and Restated Credit Agreement provides for a new senior secured revolving credit facility in the amount of $ 175 million, with a $ 10 million sublimit for the issuance of letters of credit (the "New Revolving Facility"), and a new senior secured term loan facility in the amount of $ 325 million (the "New Term Loan" and, together with the New Revolving Facility, the "New Credit Facilities"), both scheduled to mature on August 1, 2028 (the "Maturity Date").

The Amended and Restated Credit Agreement provides for an ability to increase the amount of the New Credit Facilities by up to $ 125 million, subject to certain conditions.

The New Credit Facilities are to be used to refinance and replace the credit facilities under the Credit Agreement and for general corporate purposes, including acquisitions.

The New Term Loan requires quarterly amortization payments, beginning on December 31, 2025, in an annual amount equal to 5.00 % of the original funded amount of the New Term Loan, with remaining amounts required to be repaid on the Maturity Date.

The New Revolving Facility does not require scheduled principal payments prior to the Maturity Date.

Borrowings under the New Credit Facilities will bear interest from time to time at a per annum rate equal to, at the Company’s election, either an adjusted term SOFR rate plus a margin of 2.50 % or a base rate plus a margin of 1.50 %.

The Company is required to pay a customary commitment fee on undrawn amounts under the New Revolving Facility from time to time as well as customary fees in respect of letters of credit issued under such facility.

The Amended and Restated Credit Agreement contains customary representations and warranties and affirmative and negative covenants, including financial

Notes to Consolidated Financial Statements

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

covenants requiring the Company to comply with a maximum leverage ratio and to maintain a minimum level of fee paying assets under management, and customary events of default.

On August 6, 2024, the Board of Directors authorized an additional $ 12.0 million of repurchases of outstanding Class A and Class B shares of the Company's stock under the Stock Repurchase Program.

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