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GR RIVCAPITAL RIV Capital Reports Second Quarter Fiscal Year 2022 Financial Results Strategic investment of US $ 150 million by The Hawthorne Collective highlights quarter Cash balance of $ 400 million available to launch U.S. platform Discussions continue with shortlist of potential acquisition targets in strategic U.S. markets TORONTO , Nov. 18 , 2021 / CNW / - RIV Capital Inc. ( " RIV Capital " or the " Company " ) ( TSX : RIV ) ( OTC : CNPOF ) today released its unaudited condensed interim consolidated financial statements and management's discussion and analysis ( " MD & A " ) for the three and six months ended September 30 , 2021 ( " Q2 2022 " ) . " Following the close of the convertible note investment from The Hawthorne Collective , we have been solely focused on narrowing our pipeline of potential acquisition targets in strategic U.S. markets , " said Narbé Alexandrian , President and CEO , RIV Capital . " We continue to advance discussions with a select number of target companies that we believe embody the qualities we are looking for in our U.S. operating and brand platform , and look forward to making an announcement further to this in the coming months . " Hawthorne Investment and Strategy Update Earlier this year , RIV Capital launched a strategic shift to the U.S. market . As the Company embarked upon this transition , it determined that to create a true market leader , it was paramount that the platform be differentiated from other U.S. - focused cannabis businesses in a real , tangible manner . To that end , during the quarter , the Company announced a strategic investment from The Hawthorne Collective , Inc. ( " The Hawthorne Collective " ) , a subsidiary of The Scotts Miracle - Gro Company ( " ScottsMiracle - Gro " ) , the global leader of branded consumer products for lawn and garden care as well as indoor and hydroponics growing products with over US $ 4.9 billion in annual sales . On August 24 , 2021 , The Hawthorne Collective , a newly - formed cannabis - focused subsidiary of ScottsMiracle - Gro , invested US $ 150.0 million in RIV Capital pursuant to an unsecured convertible note ( the " Convertible Note " ) issued by the Company ( the " Hawthorne Investment " ) to be used for general corporate and lawful purposes . The key terms of the Convertible Note include the following : • The Convertible Note has a maturity date of August 24 , 2027 , and bears interest at a rate of approximately 2.0 % per annum until August 24 , 2023 , after which no interest will accrue for the remainder of the term . Accrued interest will be payable on the maturity date or will be included in the conversion value of the Convertible Note at the time of conversion . • The Convertible Note is convertible into common shares of RIV Capital ( the " RIV Shares " ) at a fixed conversion price of $ 1.90 per RIV Share . Assuming full conversion of the Convertible Note , including the full amount of the anticipated accrued interest over the life of the Convertible Note , The Hawthorne Collective would be entitled to receive approximately 103.2 million RIV Shares , representing approximately 42.0 % of the Company's outstanding RIV Shares on a partially diluted basis based on the current number of non - diluted RIV Shares outstanding . • The Convertible Note may be converted into RIV Shares at the election of The Hawthorne Collective on a discretionary basis , or at RIV Capital's discretion upon the later of : ( i ) August 24 , 2023 ; and ( ii ) the date on which federal laws in the U.S. are amended to allow for the general cultivation , distribution , and possession of cannabis . The Hawthorne Investment established RIV Capital as The Hawthorne Collective's preferred vehicle for investments not currently under the purview of The Hawthorne Gardening Company ( another subsidiary of ScottsMiracle - Gro and North America's leader in indoor and hydroponic growing suppliers ) . In connection with the Hawthorne Investment , the Company entered into an investor rights agreement with The Hawthorne Collective that established the key terms of the partnership , including board nomination rights , an investment top - up option , and other rights and restrictions , which are detailed in the Company's press release dated August 10 , 2021. Immediately prior to the closing of the Hawthorne Investment , the Company voluntarily delisted the RIV Shares from the Toronto Stock Exchange ( the " TSX " ) and the RIV Shares began trading on the Canadian Securities Exchange ( " CSE " ) . The Hawthorne Investment fundamentally re - shaped the Company's strategic shift . Over the past few months , the Company has approached its U.S. transition through a new lens , as its new strategic partnership has opened up a new range of possibilities for how its U.S. platform can be built . The Company has been continuing to develop its U.S. market intelligence and engaging in discussions with various potential counterparties . Conversations are ongoing with a shortlist of potential acquisition targets in strategic U.S. markets and the Company is planning to announce a transaction in the coming months . With a strong balance sheet and liquidity , an attractive capital structure , deep domain expertise , and a one - of - a - kind strategic partnership featuring a truly blue - chip company , RIV Capital believes that it is uniquely positioned to create a market - leading , value - driven , quality- and consumer - focused operating and brand platform in the U.S. Q2 2022 Financial Results 1