Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Note 16. 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 3,000,000 shares available for grant, in addition to those approved in the 2018 Incentive Plan ("2018 Plan"), for a total of 12,000,000 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 years ended December 31, 2021 and December 31, 2020 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, 2019		3,969,000		$	1.33		8.25	$	2,668,000
Granted		1,400,000			2.74
Exercised		—			—
Expired/Forfeited		(18,200	)		3.67
Outstanding as of December 31, 2020		5,350,800		$	1.69		7.75	$	41,442,250
Exercisable as of December 31, 2020		1,483,445		$	0.67		6.22	$	10,363,950

Outstanding as of December 31, 2020		5,350,800		$	1.69		7.75	$	41,442,250
Granted		2,224,250			8.54
Exercised		—			—
Expired/Forfeited		(472,114	)		3.27
Outstanding as of December 31, 2021		7,102,936		$	2.60		7.45	$	115,468,794
Exercisable as of December 31, 2021		1,483,445		$	0.93		5.76	$	27,661,727

A total of 327,707 options granted were accelerated associated with the Company's IPO. These options are not considered exercisable as of December 31, 2021 as the shares are subject to lock up until April 20, 2022.

The weighted average assumptions used in calculating the fair value of stock options granted during the years ended December 31, 2021 and December 31, 2020 were as follows:


	For the Years Ended December 31,
	2021			2020
Expected life	7.5 (yrs)			7.5 (yrs)
Expected volatility		41.65	%		39.49	%
Risk-free interest rate		0.82	%		1.11	%
Expected dividend yield		0.00	%		0.00	%

The Company has granted restricted stock awards ("RSAs") to certain employees. Holders of RSAs have no voting rights and are not eligible to receive dividends or other distributions paid with respect to any RSAs that have not vested. All of the shares currently vest one year from the grant date.


	Number of		Weighted-Average Grant
	RSAs		Date Fair Value Per RSA
Outstanding as of December 31, 2020		—	$	—
Granted		36,033		11.24
Vested		—		—
Forfeited		—		—
Outstanding as of December 31, 2021		36,033	$	11.24

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.


	Number of		Weighted-Average Grant
	RSUs		Date Fair Value Per RSU
Outstanding as of December 31, 2020		—	$	—
Granted		59,654		12.74
Vested		—		—
Forfeited		—		—
Outstanding as of December 31, 2021		59,654	$	12.74

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 was $3.5 million, $0.7 million and $0.4 million for the years ended December 31, 2021, 2020 and 2019, respectively. Of the $3.5 million of stock-based compensation expense recognized during the year-ended December 31, 2021, $1.4 million relates to employees' shares accelerated or converted to cash associated with the Company's IPO. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of December 31, 2021 was $9.1 million and is expected to be recognized over a weighted average period of 2.83 years. Any future forfeitures will impact this amount.