P10 Industries Inc. (PX)

[value1008]

Regarding PIOE financials, i did get one comment (by someone making his/her first comment at SAlpha - maybe it's someone from this board), and it inspired me to write a good amount more to clarify some larger points about this entire P10 / RCP transaction.

I'll reproduce those comments here, since i don't believe any of this is copyrighted by SAlpha:

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User 24649553
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I have followed the P10 story since ironically one year ago today 11/21/16 when Active Power Inc. announced that they had sold substantially all of their assets to Langley Holdings.

The path over the last year has been a bit of a roller coaster, but P10 is clearly onto the next phase of its life cycle and this is where the excitement begins!

The article is very well written and you did an excellent job of organizing and documenting the complex journey over the past year, but one KEY PIECE OF INFORMATION is not given enough attention....

The 10/5/17 press release announcing the acquisition of RCP 2 makes mention that the newly issued shares amounting of 49% of PIOE “alongside cash and seller notes” were part of the purchase price. Since the acquisition was announced, P10 has given no additional details regarding the aggregate purchase price, cash paid, debt incurred, nor any financials for RCP 2. Under OTC Adequate Information Requirements, it is likely that the public will not be given any of this information until sometime in February 2018.

The primary concerns are how much cash was consumed and more importantly how much debt P10 is now carrying in the form of “seller notes” to close on the acquisition of RCP 2. Assuming that the various potential valuation models suggested in the article are correct, why would the shareholders give up RCP 2 for only a 49% interest in PIOE? Hence, the “seller notes” are likely substantial and would GREATLY IMPACT the projected market cap attributable to common shareholders going forward.

In addition, all of this holds true for the proposed acquisition of RCP 3 in 2018, which in all likelihood will occur before the full details of the RCP 2 acquisition are required to be disclosed.

In conclusion, without knowing the purchase price, cash paid, amount and terms of the “seller notes” and projected profits of RCP 2 it is virtually impossible at this point to place a present or future value on P10, there are simply TOO MANY FUNDAMENTAL UNKNOWNS....
21 Nov 2017, 07:07 PM


Timothy Conway, Contributor
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Dear User 24649553, thanks for reading and for your appreciative words, and also thanks for your sober-minded input here about "cash and seller's notes."

I actually wanted to input at a late stage of the editing process something about this (but editors forbade it at that point)-- specifically, i wanted to mention that i think P10's **cash levels will shrink further** in finalizing the acquisitions of RCP 2 and RCP 3. I also am wondering about what amount and interest rate will be given over to RCP by P10 in the "seller's notes" aspect of this deal.

Three things STRONGLY reassure me here:

1) I don't think the Alpert & Webb duo (and former CEO Ascolese) want to shoot themselves in the foot by zeroing out P10's cash and saddling P10 Industries with an onerous burden of debt owed to their wholly-owned subsidiary. Alpert & Webb's P10 / 210 Acquisition Partners already subjected themselves to major dilution in this acquisition, de-valuing their holdings from 48% to 24%. I'm sure they don't want to see the value of PIOE shares bend down under the weight of a big give-away to RCP. In the article i've shown that the benefits to RCP in this deal are already several-- including many millions of dollars over the coming years of zero tax liability. So i don't think that RCP could be too greedy or choosy here in wanting two arms and a leg from PIOE in this purchase agreement of RCP 2 and 3.

2) It stands to reason, moreover, that the guys at RCP Advisors don't want to break the back of their new acquiring party, P10 Industries. They want to be owned by a financially-healthy parent company.

3) The most important over-arching point: this entire transaction ONLY MAKES SENSE if EVERYONE WINS by *****maximizing the PIOE shareprice!****** This is what will benefit Alpert & Webb, what will benefit the RCP guys (who now own 49% of PIOE shares), and what will benefit the rest of shareholders, including Ascolese, Jay Powers (CFO), and others, including any additional institutional investors and including the rest of us retail folks who have bought or are buying shares.

In sum: the way i see it is this: If the shareprice goes up, everyone wins. If the pps goes down, everyone loses. I think all major parties involved in the P10 / RCP deal are working together on this and that this will always be the raison-d'etre for this deal....... And that's why i'm long.
21 Nov 2017, 08:35 PM

Timothy Conway, Contributor
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P.S.-- the image just came to me that this P10 / RCP acquisition and reverse-merger play is very much like the spirit of the Three Musketeers: "All for one and one for all." If all the parties help each other, they move forward successfully. But if any one party is trying to take advantage of the other, there will be bad feeling, bickering and everything falls apart.

I think the three parties here are obviously 1) Alpert & Webb, 2) RCP Advisors, 3) the former Beneficial Owners and former CEO-Ascolese, who still hold a lot of shares and (in Ascolese's case) options.
21 Nov 2017, 09:02 PM Edit/Delete


Timothy Conway, Contributor
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Reflecting even further, I think there's more to be said about all this....
So, for instance, if i take the "devil's advocate" viewpoint, i could say, "Nah, RCP Advisors is only in this to get those valuable NOLs and save themselves all those millions over the years in tax liabilities. And they probably want to do some fund-raising from the public."

But i think anyone looking at the deal this way is looking far too narrowly.

In becoming part of a public-traded company, as i pointed out in the article, surely RCP doesn't want to be associated with a "stinky pinky," as pinksheet-traded stocks are often called. How would they ever be able to go to serious venues and present themselves as a respected asset-management group?? How would they ever be able to get PIOE uplisted to a major exchange?

Moreover, if they saddle PIOE with a lot of toxic debt, eventually PIOE would go under, probably sooner than later. And then--- "POOF!" -- there goes RCP's ability to remain being part of a publicly-traded company.

One might try to argue-- "Ah, then RCP could buy up the remaining shares of PIOE." But that would violate the strict "change of ownership" stipulations in the Internal Revenue Code. And RCP loses all the NOLs.

So we come back to a simple explanation here: the reason that items like "cash and seller's notes" have not yet been disclosed is not for some shadowy sinister reason, but probably just to honor the NDA (non-disclosure agreement) pertaining to this entire transaction.

And i repeat: I'm sure RCP Advisors wants to be owned by a financially-healthy parent entity, P10 Industries.

The stronger and more prestigious is P10 Industries, the stronger and more prestigious RCP Advisors will be when presenting themselves to the world of their peers, their clients, their investors, and investors in the new P10 / RCP entity and enterprise.