RIV Capital Inc. (CSE: RIV) (OTC: CNPOF) settled its conflict with JW Asset Management LLC (JWAM) related to the company’s acquisition of New York medical cannabis operator Etain. JWAM had complained about the purchase price paid for Etain by Riv Capital.
RIV Capital has repurchased for cancellation all RIV Capital Class A common shares currently owned or controlled by JWAM and its affiliates, amounting to 33,733,334 shares, for an aggregate purchase price of $19,625,000. RIV Capital also reimbursed certain legal expenses incurred by JWAM as part of its application and related matters in the amount of $375,000.
RIV Capital funded such amounts with cash on hand. As part of the settlement, JWAM and its affiliated funds have also withdrawn their requisition for a special meeting of the company’s shareholders currently scheduled for June 6, which meeting will be canceled by the company.
JWAM sought a remedy requiring the JWAM Shares to be repurchased by the company at a price of C$1.65 (US$1.22) per share. This math works out to US$0.58 per share.
“I am glad to have reached a mutually beneficial agreement that enables both parties to move forward in a positive manner,” said Mark Sims, director, president, and chief executive officer of RIV Capital. “In our view, our share price simply does not reflect the intrinsic value of our unique assets – industry-leading liquidity, reputable strategic partner, and vertical license in New York.
“Our board of directors, on the recommendation of the Conflicts Review Committee, which is comprised solely of independent directors, determined that this settlement is in the best interest of the company, as it mitigates the risks associated with the application and the remedies sought by JWAM,” Sims continued. “Now that these claims have been resolved, we can focus on continuing to operationalize New York, in addition to exploring a range of opportunities inside and outside of New York as we seek to build our platform going forward.”
The Hawthorne Collective Inc. owned by Scott’s Miracle-Gro (NYSE: SMG), also said it settled its conflict with JWAM and Jason Wild.
According to the statement, Jason Wild and JWAM have agreed, among other things, not to take any action that would interfere with The Hawthorne Collective’s agreements with the company or any rights set forth in those agreements.