RIDGEPOST CAPITAL, INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Description of the Acquisition
On June 22, 2026, Ridgepost Capital, LLC, a Delaware limited liability company (“Ridgepost LLC”) and a subsidiary of Ridgepost Capital, Inc., a Delaware corporation ("Ridgepost" or the “Company”), completed its previously announced acquisition (the “Acquisition”) of all the issued and outstanding equity interests of Stellus Capital Management, LLC, a Delaware limited liability company (“Stellus”) in accordance with the terms and conditions of the previously announced interest purchase agreement (the “Purchase Agreement”), dated February 4, 2026, between Ridgepost LLC, certain entities affiliated with Stellus, and certain direct and indirect equity holders of Stellus (together, the “Sellers”).
The consideration paid at the closing of the Acquisition, which is subject to certain customary closing adjustments, consisted of $125.0 million in cash, 11,191,149 membership units representing limited liability company interests of Ridgepost LLC (“Units”) and 579,096 shares of the Company’s Class A Common Stock (“Class A Common Stock”). Subject to certain conditions, the Units are exchangeable into shares of Class A Common Stock on a one-for-one basis, pursuant to that certain Exchange Agreement entered into on August 25, 2022, by and among Ridgepost LLC, the Company and the other signatory parties thereto, to which the Sellers became parties via joinder (such Exchange Agreement, as modified by the joinder, the “Exchange Agreement”). Shares of Class A Common Stock beneficially held by the Sellers (including following an exchange of Units in accordance with the Exchange Agreement) will be subject to a restricted period during which the holder cannot offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose thereof, directly or indirectly. The restricted period terminates as follows: (i) with respect to one-third of the Class A Common Stock held by such stockholder, on the first anniversary of the Closing Date; (ii) with respect to two-thirds of the Class A Common Stock held by such stockholder, on the second anniversary of the Closing Date; and (iii) with respect to all of the Class A Common Stock held by such stockholder, on the third anniversary of the Closing Date. The Sellers will also have certain registration rights as members of Ridgepost LLC.
Basis of Pro Forma Presentation
The following unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X (“Article 11”). The unaudited pro forma condensed consolidated balance sheet gives effect to the Acquisition as if it were completed on March 31, 2026. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2026 and the year ended December 31, 2025 give effect to the Acquisition as if it were completed on January 1, 2025, with acquisition-related adjustments assuming the transaction occurred at the beginning of the fiscal year presented and had a continuing impact through the interim period presented and described in the accompanying notes.
Considerations Regarding Pro Forma Financial Information
The unaudited pro forma condensed consolidated financial information has been prepared for informational purposes only, is subject to the assumptions and uncertainties set forth in the notes thereto, and is not necessarily indicative of or intended to represent the results that would have been achieved if the Acquisition had been completed as of the dates indicated, or that may be achieved in the future. The unaudited pro forma condensed consolidated financial information does not reflect the costs of any integration activities or benefits that may result from future cost savings due to revenue synergies, procurement savings or operational efficiency that may result from the Acquisition.
The unaudited pro forma condensed consolidated financial information was derived from and should be read in conjunction with the following:
1.Unaudited Consolidated Financial Statements and accompanying Notes of Ridgepost Capital, Inc., as filed in its Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2026 with the United States Securities and Exchange Commission (“SEC”) on May 8, 2026;
2.Audited Consolidated Financial Statements and accompanying Notes of Ridgepost Capital, Inc., as filed in its Annual Report on Form 10-K as of and for the year ended December 31, 2025 with the SEC on February 27, 2026;
3.Unaudited Consolidated Financial Statements and accompanying Notes of Stellus Capital Management, LLC, as of and for the three months ended March 31, 2026; and
4.Audited Consolidated Financial Statements and accompanying Notes of Stellus Capital Management, LLC as of and for the year ended December 31, 2025.
The acquisition date fair value of certain assets and liabilities, including intangible assets acquired and related weighted average expected lives are provisional and subject to revision within one year of the acquisition date. As such, our estimates of fair values are pending finalization which may result in adjustments to goodwill.
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Fair Value |
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ASSETS |
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Cash and cash equivalents |
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$ |
2,634 |
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Accounts receivable |
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|
6,340 |
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Due from related parties |
|
|
208 |
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Prepaid expenses and other assets |
|
|
529 |
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Property and equipment, net |
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73 |
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Right-of-use assets |
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259 |
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Intangible assets, net |
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178,400 |
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Total assets acquired |
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$ |
188,443 |
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LIABILITIES |
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Accounts payable and accrued expenses |
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$ |
1,611 |
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Accrued compensation and benefits |
|
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2,841 |
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Deferred revenues |
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159 |
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Lease liabilities |
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259 |
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Total liabilities assumed |
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4,870 |
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Net identifiable assets acquired |
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$ |
183,573 |
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Goodwill |
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55,319 |
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Less: fair value of noncontrolling interests |
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(7,968 |
) |
Net assets acquired |
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$ |
230,924 |
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Note 3. Unaudited Pro Forma Condensed Consolidated Balance Sheet
For purposes of preparing the unaudited pro forma condensed consolidated balance sheet as of March 31, 2026, the Acquisition will be accounted for as if it occurred on March 31, 2026. Pro forma accounting adjustments related to the Acquisition in the accompanying unaudited pro forma condensed consolidated financial statements are as follows:
(a)Reflects the cash effects of the Acquisition and related transactions, which is comprised of:
•The net cash proceeds from the $139.0 million revolver draw on the Company’s existing credit facility;
•The payment of the $129.8 million in cash consideration for the Acquisition;
•Reflects changes in cash between March 31, 2026 and the acquisition date;
(b)Reflects certain changes in working capital between March 31, 2026 and the acquisition date, and adjusting the carrying value of certain assets to the fair value assigned in the allocation of the purchase price.
(c)Reflects the adjustments to record the estimated fair value of goodwill as well as intangible assets in the form of a trade name, asset management contracts, and direct investor and intermediary relationships acquired in connection with the preliminary purchase accounting for the Acquisition as described in Note 2. The trade name intangible asset is assigned a 10-year useful life, the asset management contracts are assigned a 23-year useful life, and the direct investor and intermediary relationships are assigned an 8-year useful life.
(d)Reflects the elimination of certain accrued obligations to related parties and certain accrued incentive compensation liabilities to individuals which were not assumed by Ridgepost, and related to certain compensation arrangement which will not be applicable post-acquisition to Ridgepost.
(e)Reflects the recording of the contingent consideration liability, based on the estimated fair value of the contingent consideration associated with the Earn-Out Payments as defined in the Purchase Agreement.
(f)Reflects the $139.0 million draw down on the Company’s existing revolving credit facility
(g)Reflects the removal of pre-acquisition retained earnings of Stellus, the removal of $0.1 million of pre-acquisition non-controlling interests and restating the non-controlling interests at the $8.0 million estimated fair value as of the acquisition date, which are reflected as a non-controlling interest on Ridgepost’s balance sheet, recording the $89.9 million fair value of the Units issued to the Seller Recipients (as defined in the Purchase Agreement) in the Acquisition, which are reflected as a non-controlling interest on Ridgepost’s balance sheet, and recording the $4.7 million fair value of the Class A shares issued to the Seller Recipients (as defined in the Purchase Agreement), which are reflected as Class A common stock and additional paid in capital on Ridgepost's balance sheet.
