1. RIV Capital reports record Q3 revenue at $4.9 million. 2. Net loss attributed to non-cash impairment charge on intangible assets. 3. Company holds $50.7 million cash for growth in New York and Florida. 4. Anticipates completion of Cansortium business combination soon. 5. Strategic growth strategy enhanced by distribution deal with Nabis.
Increased revenue and strategic partnerships suggest positive market momentum.
Strategic developments and financial growth could enhance investor confidence in CNTMF.
Business combination and revenue increase likely to affect CNTMF price shortly.
Adjusted EBITDA loss improves; net loss primarily driven by non-cash pre-tax impairment charge on intangible assets
Ended the quarter with $50.7 million of cash to support growth initiatives in New York and Florida
Cansortium Business Combination anticipated to close in the coming weeks
TORONTO, Nov. 29, 2024 /PRNewswire/ - RIV Capital Inc. ("RIV Capital" or the "Company") (CSE: RIV) (OTC: CNPOF), a firm dedicated to developing a leading multi-state platform with a strong portfolio of cannabis brands focused on key strategic markets in the United States ("U.S."), today released its financial results for the third quarter ended September 30, 2024 ("Q3 2024"). All financial information in this press release is reported in U.S. dollars unless otherwise indicated.
"Since the launch of adult-use sales in New York this year, we have achieved significant growth, driven by our ongoing enhancements to customer retail experiences and commitment to delivering exceptional customer service," said Dave Vautrin, Chief Retail Officer and Interim Chief Executive Officer of RIV Capital. "With our operations scaling as patient and consumer demand continues to build, we experienced significant acceleration in the third quarter results, demonstrated by our record net revenue of $4.9 million. We now proudly operate three co-located adult-use and medical retail dispensaries, plus an additional medical-only location, across our footprint, and customer response has been great, with especially strong enthusiasm following the launch of the highly popular MOODS brand by FLUENT into the New York market."
Mr. Vautrin added, "As we continue to improve our retail network, we're also scaling our wholesale operations, with a growing pipeline of approximately 60 retailers. With the recent strategic distribution agreement with Nabis, we're well-positioned to support this rapid growth across the state. This momentum has continued into the fourth quarter."
Mr. Vautrin concluded, "Since announcing the proposed Business Combination with Cansortium, we've identified and captured substantial synergies, and our joint integration efforts are progressing smoothly. With Cansortium, we're poised to complete this transaction on a solid foundation and positioned to quickly capitalize on the combined expertise and experience of our teams in some of the most dynamic markets in the cannabis industry."
New York State continues to undertake efforts to combat illicit market activities, which the Company believes will positively impact the ability of the legal market to establish a stronger and safer footprint. The Company continues to work closely with the Office of Cannabis Management ("OCM") and foster its strong relationship with New York stakeholders. At the federal level, the Company continues to monitor developments regarding the rescheduling of cannabis from a Schedule I to a Schedule III substance under the Controlled Substances Act (the "CSA"), as rescheduling is anticipated to lead to the removal of 280E taxes and provide support for further potential federal reform. Additionally, this change has the potential to expand institutional access to invest in the cannabis sector and accelerate opportunities for research into the medical benefits of cannabis.
The Company anticipates being in a position to complete the previously announced business combination (the "Business Combination") with Cansortium Inc. (CSE: TIUM.U) (OTCQB: CNTMF) ("Cansortium"), a vertically integrated, multi-state cannabis company operating under the FLUENT™ brand, in the coming weeks. Closing remains subject to, among other things, the requirement for RIV Capital to maintain a certain minimum cash balance as of a specified date prior to closing, and the satisfaction of certain other closing conditions customary in transactions of this nature, all of which are expected to be completed during this quarter. Further details regarding the Business Combination, including the principal closing conditions and the anticipated benefits for RIV Shareholders, can be found in RIV Capital's management information circular dated July 12, 2024 in respect of the RIV Meeting (the "Circular") and in the joint press release issued by RIV Capital and Cansortium on May 30, 2024, both of which can be found under RIV Capital's SEDAR+ profile at www.sedarplus.ca.
The following is a summary of the Company's unaudited financial results for the three and nine months ended September 30, 2024, and 2023. As previously announced, the Company has changed its fiscal year end from March 31 to December 31. Accordingly, the comparative period presented for the nine months ended September 30, 2023, had not previously been reported in historical unaudited condensed interim consolidated financial statements published by the Company. Further details regarding the change in fiscal year end, including the length and ending dates of the Company's financial reporting periods, are available in the Company's Notice of Change in Year End prepared in accordance with Section 4.8 of National Instrument 48-102 and filed on the Company's SEDAR+ profile at www.sedarplus.ca.
Unless otherwise indicated, all financial highlights summarized in tables in this press release are presented in thousands of dollars, except share and per share amounts. All references to "$" are to United States dollars.
Three months ended Sep. 30, 2024 (unaudited)
Three months ended Sep. 30, 2023 (unaudited)
Nine months ended Sep. 30, 2024 (unaudited)
Nine months ended Sep. 30, 2023 (unaudited)
| Revenue, net | Cost of goods sold | Gross profit excluding fair value items | Net loss | |
|---|---|---|---|---|
| Q3 2024 | $ 4,859 | $ 5,737 | $ (878) | $ (63,359) |
| Q3 2023 | $ 1,697 | $ 1,851 | $ (154) | $ (7,386) |
| 9M 2024 | $ 10,786 | $ 12,571 | $ (1,785) | $ (76,629) |
| 9M 2023 | $ 5,211 | $ 5,038 | $ 173 | $ (40,098) |
The following is a summary of the Company's unaudited cash flows for the nine months ended September 30, 2024, and 2023:
| Period | Net cash flows used in operating activities | Cash, end of fiscal period |
|---|---|---|
| 9M 2024 | $ (9,293) | $ 50,701 |
| 9M 2023 | $ (29,574) | $ 84,996 |
This press release should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three and nine months ended September 30, 2024 and 2023, which are available under the Company's profile on SEDAR+ at www.sedarplus.com and on the Company's website at www.rivcapital.com/investors.
RIV Capital is a firm dedicated to developing a leading multi-state platform with a strong portfolio of cannabis brands focused on key strategic markets in the U.S. Backed by in-house expertise and cannabis domain knowledge, RIV Capital aims to grow its own brands and partner with established U.S. cannabis operators and brands to bring them to new markets and build market share. RIV Capital established the foundational building blocks of its active U.S. strategy with its previously announced acquisition of Etain. Through its strategic relationship with The Hawthorne Collective, Inc. ("The Hawthorne Collective"), a subsidiary of The ScottsMiracle-Gro Company ("ScottsMiracle-Gro"), RIV Capital is The Hawthorne Collective's preferred vehicle for cannabis-related investments not under the purview of other ScottsMiracle-Gro subsidiaries.