Stockholders' Equity

3 Months Ended

Mar. 31, 2022

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 9,300,000 shares (previously unadjusted for the stock split of 12,000,000). The Compensation Committee of the Board of Directors may issue equity-based awards including stock options, stock appreciation rights, restricted stock units and restricted stock awards. Options previously granted under the 2018 Incentive Plan vest over a period of up to five years. 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.

On March 15, 2022, the Board of Directors approved the settlement of 1.1 million options from a grantee with a fair market value option price of $11.83, less a negotiated discount of 2.5%, totaling $12.5 million. This is presented in other liabilities on the Consolidated Balance Sheets.

A summary of stock option activity for the period ended March 31, 2022 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, 2021		7,095,936		$	3.71		7.45	$	73,156,722
Granted		1,323,733			12.28
Exercised		—			—
Settled		(1,120,000	)		0.41
Expired/Forfeited		—			—
Outstanding as of March 31, 2022		7,299,669		$	5.95		8.08	$	43,865,350
Exercisable as of March 31, 2022		363,445		$	4.09		6.67	$	2,920,165

The weighted average assumptions used in calculating the fair value of stock options granted during the three months ended March 31, 2022 and March 31, 2021 were as follows:


	For the Three Months Ended March 31,
	2022			2021
Expected life	7.5 (yrs)			7.5 (yrs)
Expected volatility		35.40	%		41.70	%
Risk-free interest rate		1.83	%		0.79	%
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, 2021		36,033	$	11.24
Granted		—		—
Vested		—		—
Forfeited		—		—
Outstanding as of March 31, 2022		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, 2021		59,654	$	12.74
Granted		508,135		12.30
Vested		—		—
Forfeited		—		—
Outstanding as of March 31, 2022		567,789	$	12.35

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 $1.5 million and $0.4 million for the three months ended March 31, 2022 and March 31, 2021, respectively. Unrecognized stock-based compensation expense related to outstanding unvested stock options as of March 31, 2022 was $7.5 million and is expected to be recognized over a weighted average period of 3.05 years. Any future forfeitures will impact this amount.