Dear investors,

We’ve been sending you monthly video updates for sixteen months now. This period allowed us to experiment, learn and better understand the benefits and drawbacks of this new form of communication.

Our desire is obviously to be as transparent as possible and to share relevant information for you to assess your investment properly. We want to help you better understand the strategy and put the returns into context.

That being said, we’ve also identified a few inconsistencies in this goal so far:

1. Some months are busier (for example, when companies release quarterly financial results), while others are quiet. The monthly updates sometimes seem redundant or less relevant when the portfolio has few fundamental developments.
2. The microcap strategy is very long-term in nature, given the illiquidity of the stocks we invest in. We consider one month a very short period compared to our investment horizon. The frequency of communications should probably be revised to reflect the optimal investment horizon.
3. Producing updates requires time to prepare, record, edit, review, and send them. Does the monthly frequency provide the best return on that time investment?

The approach of the summer period seems to be an excellent time to take a break from monthly updates in the current format. The summer will allow us to reflect on the comments and questions raised above to determine the best way to send you the most relevant information possible in the coming months.

In fact, we already have some ideas to make the updates more interactive that we’re looking forward to sharing. Your suggestions are also always welcome to make our content more valuable.

As of next month, in early July, you will also receive the biannual letter in written format, in which we will give you more details on the current composition of the portfolio to help you better understand the outlook and long-term prospects.

Finally, here is a short written update for May 2023:
Snapshot of the MicroCap strategy on May 31, 2023 

There are barely any changes to the snapshot compared to last month. However, May was a very busy month on a fundamental level, as most of the companies we own or follow reported financial results for the quarter ending March 31.

Overall, we were quite pleased with the results published by our portfolio companies. There were a few positive surprises and not many negative ones. We also saw a growing divergence between our portfolio companies and the stocks on our watch list. Given the significant challenges associated with obtaining financing in the current market, we noticed an increasing number of non-profitable companies in financial trouble.

It is clear that there will be more bankruptcies or distressed sales in the coming quarters, leading to a significant cleanup in the microcap sector. Unfortunately, this cleanup will be painful for many investors. Still, it will leave more room for quality companies that will stand out with a viable business model and a healthy balance sheet.

Overall, we are very satisfied with the current positioning of the portfolio. Although the market anticipates a more challenging economic period to come, and stock prices reflect this after the significant decline of the last two years, we believe that our companies will get through 2023 just fine. In our view, they could be among the first to be repriced higher when risk appetite returns.

In closing, we will leave you with three videos that might interest you: Mathieu’s participation in an educational panel at the Planet MicroCap Showcase in Las Vegas and two company presentations during our most recent Rivemont MicroCap Cocktail Event in Montreal.

Planet MicroCap Podcast: LIVE with Ryan Irvine, Sam Namiri, Harris Perlman and Mathieu Martin

Biorem (TSX-V: BRM) Presentation | Rivemont MicroCap Cocktail Event – CleanTech Special (May 2023)

Progressive Planet Solutions (TSX-V: PLAN) Presentation | Rivemont MicroCap Cocktail Event – CleanTech Special (May 2023)

Until our next communication, we are always happy to discuss or answer any questions. Please do not hesitate to contact us.

We thank you for your trust and wish you a great summer!

The Rivemont MicroCap team