Stockholders' Equity

9 Months Ended

Sep. 30, 2021

Note 14. Stockholders' Equity

Equity-Based Compensation

On July 20, 2021, the Board of Directors approved the P10 Holdings, Inc. 2021 Stock Incentive Plan (the "Plan"), which replaced the 2018 Incentive Plan, our previously existing equity compensation plan. The Plan provides for the issuance of 1,000,000 shares available for grant, in addition to those approved in the 2018 Incentive Plan ("2018 Plan"), for a total of 10,000,000 shares. Per the Plan, the Compensation Committee of the Board of Directors may issue equity-based awards including stock appreciation rights, restricted stock units and restricted stock awards. Options previously granted under the 2018 Incentive Plan vest over a period of up to four years and five years, respectively. The term of each option is no more than ten years 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. All future awards will be granted under the Plan, and no additional awards will be granted under the 2018 Plan.

A summary of stock option activity for the nine months ended September 30, 2021 is as follows:


						Weighted Average
						Contractual Life		Aggregate
	Number of			Weighted Average		Remaining		Intrinsic Value
	Shares			Exercise Price		(in years)		(whole dollars)
Outstanding as of December 31, 2020		5,350,800		$	1.69		7.75	$	41,442,250
Granted		2,101,750			8.11
Exercised		—			—
Expired/Forfeited		(320,600	)		3.27
Outstanding as of September 30, 2021		7,131,950		$	3.50		7.67	$	87,034,525
Exercisable as of September 30, 2021		1,178,800		$	0.60		5.49	$	17,747,150

The weighted average assumptions used in calculating the fair value of stock options granted during the nine months ended September 30, 2021 and September 30, 2020 were as follows:


	For the Nine Months Ended September 30,
	2021			2020
Expected life	7.5 (yrs)			7.5 (yrs)
Expected volatility		40.33	%		36.85	%
Risk-free interest rate		1.68	%		1.39	%
Expected dividend yield		0.00	%		0.00	%

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 the nine and three months ended September 30, 2021 was $1.5 and $0.5 million and for the nine and three months ended September 30, 2020 was $0.5 million and $0.2 million, respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of September 30, 2021 was $8.4 million and is expected to be recognized over a weighted average period of 3.06 years. Any future forfeitures will impact this amount.

A summary of restricted stock activity for the nine months ended September 30, 2021 is presented below:


	Number of		Weighted-Average Grant
	RSAs		Date Fair Value Per RSA
Outstanding as of December 31, 2020		—	$	—
Granted		26,582		11.29
Exercised		—		—
Expired/Forfeited		—		—
Outstanding as of September 30, 2021		26,582	$	11.29