PharmHouse Closes Sale of Greenhouse Facility

Rhea-AI Summary

RIV Capital has settled its guarantee obligations related to PharmHouse's Credit Facility following the sale of PharmHouse's greenhouse facility. The transaction, facilitated through PharmHouse's asset purchase agreement, enables the repayment of debts owed to Canadian lenders. RIV Capital made a cash payment of approximately $7.5 million alongside a prior $25.0 million payment in March 2021, effectively discharging its liabilities. The company anticipates receiving cash distributions after PharmHouse's ongoing legal proceedings conclude, directing focus toward U.S. market investments.

Positive

• Settlement of guarantee obligations with PharmHouse enhances financial stability.
• Cash payments totaling approximately $32.5 million effectively reduce debt exposure.
• Anticipated cash distribution from PharmHouse's proceedings could benefit RIV Capital.

Negative

• None.

RIV Capital settles guarantee obligations pursuant to PharmHouse's Credit Facility

TORONTO, May 17, 2021 /PRNewswire/ - RIV Capital Inc. ("RIV Capital" or the "Company") (TSX: RIV) (OTC: CNPOF) today announced that PharmHouse Inc. ("PharmHouse"), through its sale and investment solicitation process (the "SISP"), has closed the sale of its greenhouse facility pursuant to its asset purchase agreement with a company related to Sensei Ag Holdings, Inc. (the "PharmHouse Sale"). PharmHouse will use the net proceeds received from the PharmHouse Sale to reduce the amount owing under its syndicated credit facility (the "Credit Facility") with a group of Canadian bank lenders (the "Lenders").

Concurrent with the closing of the PharmHouse Sale, RIV Capital has made a cash payment of approximately $7.5 million to the Lenders. This payment, when combined with the net proceeds received from the PharmHouse Sale and the $25.0 million payment made by RIV Capital in March 2021, among other items, is expected to fully satisfy PharmHouse's obligations under the Credit Facility, which RIV Capital had guaranteed. These payments are in line with the Company's previous disclosure related to its total liability, and the Company does not anticipate any additional payments in respect of its guarantee of the Credit Facility. As the parties have now been discharged of their obligations in respect of the Credit Facility, any cash available for distribution upon the termination of PharmHouse's proceedings under the CCAA is expected to be distributed to RIV Capital.

"Over the past few quarters, we have worked tirelessly to mitigate our liability exposure on PharmHouse, ensure that our liability does not exceed our disclosed estimates, and secure a buyer for the facility," said Narbe Alexandrian, President & CEO, RIV Capital. "With this chapter behind us, our complete focus is on executing on our investment strategy in the U.S. market."

PharmHouse continues to work through its CCAA proceedings and the Company expects to provide an update on these proceedings in the coming weeks.

About RIV Capital

RIV Capital is an investment and acquisition company specializing in cannabis with a portfolio of 13 companies across various segments of the cannabis value chain. We believe that bringing together people, capital, and ideas raises the potential of the entire cannabis industry. By leveraging our industry insights, in-house expertise, and thesis-driven approach to investing, we aim to provide shareholders with exposure to specialized and disruptive cannabis companies.

Forward-Looking Statements

This news release contains statements which constitute "forward-looking information" within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the Company with respect to 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 anticipation that no additional payments will be required in respect of its guarantee of the PharmHouse Credit Facility, the Company's anticipation of receiving a cash distribution upon termination of PharmHouse's proceedings under the CCAA; and the Company's focus on its investment strategy in the U.S. market .

Investors are cautioned that forward-looking information is not based on historical fact but instead reflects management's expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although the Company 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 could have material adverse effects on future results, performance or achievements of the Company. Our actual financial position and results of operations may differ materially from management's current expectations.

Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: litigation risks; stock market volatility; regulatory and licensing risks; cannabis pricing risks; changes in cannabis industry growth and trends; changes in the business activities, focus and plans of the Company and its investees and the timing associated therewith; the Company's actual financial results and ability to manage its cash resources; changes in general economic, business and political conditions, including challenging global financial conditions and the impact of the novel coronavirus pandemic; competition risks; potential conflicts of interest; the regulatory landscape and enforcement related to cannabis, including political risks and risks relating to regulatory change; changes in the Company's relationship with its investees; changes in applicable laws; compliance with extensive government regulation, including the Company's interpretation of such regulation; changes in the global sentiment towards, and public opinion of, the cannabis industry; reliance on material contracts; risk of default by investees; divestiture risks; and the risk factors set out in the Company's annual information form for the year ended March 31, 2020 and the Company's management information circular dated January 15, 2021, filed with the Canadian securities regulators and available on the Company's profile on SEDAR at www.sedar.com.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although the Company 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 anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update this forward-looking information except as otherwise required by applicable law.

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SOURCE RIV Capital Inc.

FAQ

What does RIV Capital's recent press release about PharmHouse entail?

RIV Capital announced the settlement of its guarantee obligations related to PharmHouse's Credit Facility following the sale of PharmHouse's greenhouse facility.

How much cash did RIV Capital pay to settle its obligations?

RIV Capital made a cash payment of approximately $7.5 million to settle its obligations.

What was the total amount paid by RIV Capital regarding PharmHouse?

RIV Capital's total payments regarding PharmHouse amounted to approximately $32.5 million, including a prior $25 million payment.

What will RIV Capital focus on after settling its obligations with PharmHouse?

After settling its obligations, RIV Capital plans to focus on executing its investment strategy in the U.S. market.

Is RIV Capital expecting any financial benefits from PharmHouse's proceedings?

Yes, RIV Capital expects to receive cash distributions upon the termination of PharmHouse's proceedings.