Riv Capital Stock Trading Higher On Stagnating Q3 FY23 Revenue And CEO Departing

RIV Capital Inc. CNPOF RIV released its financial results for the three months ended December 31, 2022, revealing net revenue of $1.9 million, consistent with the previous quarter (the company did not report revenue for any reporting periods ended on or prior to March 31, 2022). Retail revenue of $1.8 million was generated from Etain, LLC's dispensaries in Manhattan, Kingston, Syracuse, and Yonkers.

Q3 FY 2023 Financial Highlights

• Gross profit of $783,000, compared to a gross profit of $900,000 for the previous quarter.

• Net loss of $9.9 million, and a basic and diluted loss per share of $0.06 for the three months ended December 31, 2022, compared with a net loss of $2.8 million, and a basic and diluted loss per share of $0.02 for the same period last year.

• Total comprehensive loss of $12.7 million for the three months ended December 31, 2022, compared with a total comprehensive loss of $1.1 million for the same period last year.

Executive Team Changes and Strategic Growth Committee

Mark Sims, former president and CEO of RIV Capital, has departed the company. The board of directors of the company has appointed COO Mike Totzke as interim CEO, and the board will conduct a comprehensive search for a new CEO. Totzke has been with the company since June 2022 and will continue to focus on building out the company's New York State cultivation, dispensary, and sales operations, among other management duties previously performed by Sims, who also resigned from the board. Pursuant to its investor rights agreement with the company, The Hawthorne Collective, Inc. a subsidiary of The Scotts Miracle Gro Co SMG is entitled to fill the board seat formerly held by Sims and has initiated a selection process to fill that seat.

The board is in the process of establishing a strategic growth committee to develop and lead growth strategies, including potential strategic M&A. The strategic growth committee will be chaired by Chris Hagedorn, board member and president of Hawthorne, and will include board members Dawn Sweeney, Amy Peckham, and Richard Mavrinac. The board anticipates the strategic growth committee will work with management in exploring a range of initiatives to capitalize on the company's strengths and drive value for all stakeholders. The company believes that its cash resources, New York assets and positioning, and strategic partnership with Hawthorne create multiple avenues for realizing value that is not currently reflected in the company's share price.

Price Action

RIV Capital shares were trading 6.33% higher at $0.1276 per share at the time of writing Wednesday morning.

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