RIV Capital Inc. (CNSX:RIV) entered into an agreement to acquire unknown stake in Etain, LLC from Peckham Family for approximately $250 million on March 29, 2022. Under the terms of the transaction, RIV Capital will pay approximately $210 million in cash and and approximately $35 million by the issuance of Class A common shares in RIV Capital. The value of the 26.3 million RIV Capital shares will be issued based on the five-day volume-weighted average price of such shares on the Canadian Securities Exchange as of the last trading day prior to today's announcement. Approximately 80% of the purchase price will be payable upon the initial closing, with the remainder payable upon the final closing. Following closing, the Peckham Family of Etain are expected to hold approximately 16% of the issued and outstanding Class A common shares of RIV Capital. In connection with the transaction, RIV Capital and the Peckham Family of Etain will enter into an investor rights agreement providing such former owners, registration and information rights. In addition, no later than RIV Capital's upcoming annual general meeting of shareholders, expected to be held in the third calendar quarter of 2022, the Peckham Family will be entitled to require that RIV Capital nominate a proposed member to the RIV Capital Board of Directors, expected to be Amy Peckham, Etain's Chief Executive Officer. Peckham Family will also be entitled to designate one observer to the Board of Directors under the terms of the investor rights agreement. RIV Capital and The Hawthorne Collective have also agreed to permit an increase in the size of RIV Capital's Board of Directors to accommodate the Etain director nomination right. In connection with this, The Hawthorne Collective will also be entitled to nominate a fourth individual to the Board of Directors.

To finance the cash portion of the consideration payable pursuant to the transaction, RIV Capital will utilize the US$150 million proceeds received from The Hawthorne Collective, Inc. pursuant to its convertible note investment in RIV Capital announced in August 2021. To provide additional financing support, The Hawthorne Collective agreed to advance RIV Capital $25 million at the time of the initial closing pursuant to rights existing under The Hawthorne Collective's previous convertible note investment in RIV Capital, to be evidenced by a newly issued convertible note with a conversion price of C$1.65 per Class A common share of RIV Capital. The Hawthorne Collective has advised RIV Capital that it also intends to provide RIV Capital with additional funding of US$40 million, at a future date that is anticipated to be on or around the time of the final closing of the acquisition, via a subscription for an additional convertible note. RIV Capital anticipates that the entire cash consideration payable pursuant to the transaction will be financed from proceeds received from The Hawthorne Collective. RIV Capital's Board of Directors named Mark Sims as President and Chief Executive Officer, to lead the company's formal entry into the U.S. market and expansion into licensed adult-use operations in New York. The transaction is subject to obtaining receipt of regulatory approvals from the New York Cannabis Control Board and the New York State Office of Cannabis Management. The transaction is structured to close in two stages, the initial closing is expected to occur in the second calendar quarter of 2022 and the final closing is expected to occur in the second half of 2022. As of April 22, 2022, RIV Capital Inc. completed the initial acquisition of Etain, LLC for $198 million. RIV Capital is acquiring the non-regulated portion of the Etain. The consideration is through a combination of cash and Common Shares will be paid subject, to among other things, receipt of all required regulatory approvals, including from the New York Cannabis Control Board and the New York State Office of Cannabis Management. As of November 21, 2022, New York State Cannabis Control Board and the New York State Office of Cannabis Management have approved Etain, LLC's owners and operators of a legally-licensed Registered Organization with cannabis cultivation and manufacturing facilities and retail dispensaries in the state of New York - change of control request. Final closing of the Etain Acquisition remains subject to customary closing conditions and is expected to occur by the end of calendar year 2022.

Dickinson Wright PLLC acted as legal advisor to RIV Capital, Samuel Waxman, Sam Waite of Paul Hastings LLP acted as legal advisor to RIV Capital, and Blake, Cassels & Graydon LLP acted as legal advisor to RIV Capital. Moelis & Company LLC acted as financial advisor and DLA Piper, LLP acted as legal advisor to Etain, LLC.

RIV Capital Inc. (CNSX:RIV) acquired unknown stake in Etain, LLC from Peckham Family on December 15, 2022.