RIV Capital completes the final closing of the previously announced Etain transaction | Daily News Byte

RIV Capital completes the final closing of the previously announced Etain transaction

 | Daily News Byte


The transformative transaction establishes the foundation for the company’s platform as Etain is one of only 10 vertically integrated operators in the New York

TORONTO, December 15, 2022 /CNV/ – RIV Capital Inc. (“RIV Capital” or “Company“) (CSE: RIV) (OTC: CNPOF), an acquisition and investment company focused on building a leading multi-state platform with one of the strongest portfolios of brands in key strategic US markets, today announced that it has completed the final closing of its previously announced transaction that includes Etain, LLC (“Etain“) – owner and operator of a legally licensed registered organization with cannabis cultivation and production facilities and retail dispensaries in the state New York – and Etain IP LLC (“Transaction“).

Logo RIV Capital (CNV Group/RIV Capital Inc.)

Logo RIV Capital (CNV Group/RIV Capital Inc.)

“With four ambulances, including a Manhattan flagship store and locations in Kingston, Syracuse and Westchesteras well as a facility for cultivation and production in Chestertownwe believe Etain is a strong foundation and scalable platform for future growth,” he said Mark Sims, President and CEO of RIV Capital. “We plan to continue Etain’s cooperation with different New York-owned brands, optimize Etain’s attractive retail footprint and expand Etain’s four premium product lines with high-performing West Coast brands. The ongoing expansion of Etain Chestertown cultivation facility, which is nearing completion, and our planned flagship indoor cultivation facility in Buffalo will allow Etain to better serve medical patients and, ultimately, adult consumers in New York.”

Details of the closing transaction
Under the terms of the transaction, RIV Capital paid the remaining purchase price through the combination of approximately 42 million dollars in cash and the issuance of 5,273,084 Class A ordinary shares in RIV Capital. Following the final closing, the former owners of Etain will hold approximately 16% of the issued and outstanding Class A common stock of RIV Capital.

Growth and expansion strategy
RIV Capital’s long-term strategy is to build a leading multi-state operating and brand platform, with New York serving as a foundation. The company intends to develop and expand new brands and products designed to be consistent with New York consumer, with plans to offer the popular Etain product line as one of its core brands, which will include new form factors and SKUs in the near future.

An extension of Etain’s Chestertown– The cultivation and production infrastructure, which the company anticipates will be completed by the second quarter of calendar year 2023, is designed to increase cultivation capacity and support the development of new product formats in anticipation of the launch of adult sales in New York. RIV Capital is also in the process of developing a new, state-of-the-art flagship indoor grow facility in Buffalo, designed with state-of-the-art grow and production infrastructure specifically tailored to support premium New York market.

Early warning detection
BrandCo HoldCo, LLC (“HoldCo”) announced today, pursuant to applicable requirements under Canadian securities laws, that it has acquired (“Acquisition“) 5,273,084 shares of Class A common stock as of the final closing of the Etain Transaction. That number of shares was determined not on the basis of the price on the date of issuance, but on the basis of the five-day volume-weighted average price of those shares on the Canadian Securities Exchange as of the last trading day before of the first publication of the transaction (March 30, 2022), which was C$1.65 per action i 8.7 million Canadian dollars in aggregate. The issued shares represent approximately 3% of RIV Capital’s issued and outstanding Class A shares. Prior to the acquisition, HoldCo owned 21,092,335 shares of Class A common stock representing approximately 13% of the Company’s issued and outstanding shares.

HoldCo completed the acquisition for investment purposes. Subject to applicable laws and the terms of the Investor Rights Agreement entered into by Holdco and the Company, HoldCo may acquire additional securities of RIV Capital or may dispose of any or all of its ownership of Class A common stock, from time to time until, between among other things, transactions in the open market or in private transactions or otherwise, on such terms and at such times as HoldCo may deem advisable depending on the current valuation of the Company’s Class A Common Shares, prevailing market conditions, the availability of Class A Common Shares at prices that would purchase or sale of shares made desirable by other investment opportunities, HoldCo’s liquidity requirements, respectively, and/or other considerations and in such manner as it deems appropriate.

A copy of the early warning report filed by HoldCo in connection with the foregoing will be filed on SEDAR and available under RIV Capital’s SEDAR profile at www.sedar.com.

HoldCo is located at 172 Prospect Hill Road, Brewster, New York10509. For additional information, please contact Hilary Peckham at 914-482-2481.

About RIV Capital
RIV Capital is an acquisition and investment firm focused on building a leading multi-state platform with one of the strongest brand portfolios in key strategic US markets. Backed by in-house expertise and knowledge of the cannabis domain, RIV Capital aims to develop its own brands and partner with established US cannabis operators and brands to bring them into new markets and build market share. With the announced Transaction, RIV Capital established the fundamental blocks of its active American strategy. Through its strategic relationship with The Hawthorne Collective, Inc. (“The Hawthorne Collective“), a subsidiary of ScottsMiracle-Gro, RIV Capital is The Hawthorne Collective’s preferred vehicle for cannabis-related investments outside the purview of other ScottsMiracle-Gro subsidiaries.

Dickinson Wright PLLC, Paul Hastings LLP and Blake, Cassels & Graidon LLP served as legal advisors to RIV Capital. Moelis & Company LLC served as exclusive financial advisor and DLA Piper, LLP served as legal advisor to Etain, LLC and Etain IP LLC.

Forward-looking statements
This release contains statements that constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of portfolio companies RIV Capital, Etain and RIV Capital with respect to expansions and increases. Etain’s retail footprint and product lines, an extension of Etain Chestertown grow facilities, the development of our flagship indoor grow facility in Buffalo, USA and New York State cannabis market, the Company’s expectations of the expected benefits of the transaction, including the scalability of Etain’s business, growth opportunities, future business activities and operating performance. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and includes information regarding the Company’s strategies, goals, objectives, capabilities and plans, including with respect to future growth and shareholder value creation; and expectations for other economic, business and/or competitive factors.

Investors are cautioned that forward-looking information is not based on historical facts, but instead reflects management’s expectations, estimates or projections regarding future results or events based on management’s opinions, assumptions and judgments believed to be reasonable as of the date the statements are made. dates Although RIV Capital believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors may have a material adverse effect on future results. , performance or achievements of RIV Capital or its portfolio companies.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: the Company’s ability to execute its growth strategy; stock market volatility; changes in the Company’s, Etain’s and investees’ business activities, focus and plans and related timelines; the timing of any changes to US federal laws to allow for the general cultivation, distribution and possession of cannabis; regulatory and licensing risks; changes in the growth and trends of the cannabis industry; changes in general economic, business and political conditions, including changes in financial markets; litigation risks; the global regulatory landscape and enforcement related to cannabis, including political and regulatory change risks; risks related to anti-money laundering laws; compliance with extensive government regulations, including RIV Capital’s interpretation of such regulations; public opinion and perception of the cannabis industry; sales risks; and the risk factors set forth in RIV Capital’s management discussion and analysis as of the date November 28, 2022 and annual information form from date June 10, 2022 filed with Canadian securities regulators and available on RIV Capital’s SEDAR profile at www.sedar.com.

The Company has invested in and acquired, and intends to invest in and/or acquire in the future, companies engaged in the production, ownership, use, sale and distribution of cannabis in the recreational and medical cannabis markets in United States. Local state laws in which such operations take place permit such activities, however, investors should note that there are significant legal restrictions and regulations governing the cannabis industry in United States. Cannabis remains a Schedule I drug under the US Controlled Substances Act, making it illegal under federal law in United States to, among other things, grow, distribute or possess cannabis in United States. Financial transactions involving income generated or intended to promote cannabis-related business activities in United States may constitute grounds for prosecution under applicable US federal money laundering laws.

While the federal government’s approach to enforcing such laws in United States tends toward non-enforcement against individuals and businesses that adhere to recreational and medical cannabis programs in states where such programs are legal, strict compliance with state cannabis laws will not exempt a company from liability under US federal law, nor will it provide a defense in any federal proceedings that can be initiated against the Company. Enforcement of federal laws in United States represents a significant risk for the Company’s operations and any proceedings initiated against the Company on this basis may adversely affect the Company’s operations and financial performance.

If one or more of these risks or uncertainties materialize, or if the assumptions underlying the forward-looking information prove incorrect, actual results may differ materially from those described herein as anticipated, planned, expected, believed , estimated or expected. Although RIV Capital has attempted to identify important risks, uncertainties and factors that could cause actual results to differ materially, there may be others that cause results not to be as expected, estimated or planned. RIV Capital does not intend and undertakes no obligation to update this forward-looking information unless otherwise required by applicable law.



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SOURCE RIV Capital Inc.



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