RiverNorth
Opportunities Fund, Inc.
|
Directors
and Officers
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July
31, 2021 (Unaudited)
|
(1)
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Each
Director’s term is three years.
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|
(2)
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The
term “Fund Complex” means two or more registered investment companies that:
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|
(a)
|
hold
themselves out to investors as related companies for purposes of investment and investor services; or
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(b)
|
have
a common investment adviser or that have an investment adviser that is an affiliated
person of the investment adviser of any of the other registered investment companies.
For Mr. Galley, Mr. Carter and Mr. Oakes, the Fund Complex consists of the Fund, RiverNorth
Managed Duration Municipal Income Fund Inc., RiverNorth Opportunistic Municipal Income
Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic
Opportunity Fund, Inc., RiverNorth Funds (3 funds), RiverNorth Flexible Municipal Income
Fund, Inc., and RiverNorth Flexible Municipal Income Fund II, Inc.
|
For
Mr. Swanson, the Fund Complex consists of the Fund, RiverNorth Managed Duration Municipal Income Fund Inc., RiverNorth Opportunistic
Municipal Income Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic Opportunity Fund, Inc.,
RiverNorth Funds (3 funds), RiverNorth Flexible Municipal Income Fund, Inc., RiverNorth Flexible Municipal Income Fund II,
Inc. and ALPS Variable Investment Trust (7 funds).
For
Mr. Hutchens and Mr. Raio, the Fund Complex consists of the Fund, RiverNorth Managed Duration Municipal Income Fund Inc., RiverNorth
Opportunistic Municipal Income Fund, Inc., RiverNorth Specialty Finance Corporation, RiverNorth/DoubleLine Strategic Opportunity
Fund, Inc., RiverNorth Flexible Municipal Income Fund, Inc. and RiverNorth Flexible Municipal Income Fund II, Inc.
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(3)
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The
numbers enclosed in the parentheticals represent the number of funds overseen in each respective directorship held by the Director.
Only includes public company directorships.
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(4)
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Officers
are elected annually. Each officer will hold such office until a successor has been elected by the Board.
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(5)
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Mr.
Galley is considered an “Interested Director” because of his affiliation with the Sub-Adviser.
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|
(6)
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Mr.
Raio is considered an “Interested Director” because of his current position
as a director of FLX Distribution, which the Sub-Adviser is an investor in and Mr. Galley
is a Director of; and his prior affiliation with Wells Fargo Securities, LLC, which previously
served as a broker and underwriter for certain funds advised by the Sub-Adviser.
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|
(7)
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“Interested
Directors” refers to those Directors who constitute “interested persons” of the Fund as defined in the 1940
Act.
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The
Statement of Additional Information includes additional information about the Fund’s Directors and is available, without
charge, upon request by calling (toll-free) 1-855-830-1222.
RiverNorth
Opportunities Fund, Inc.
|
Additional
Information
|
|
July
31, 2021 (Unaudited)
|
PORTFOLIO
HOLDINGS
The
Fund files a complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (“SEC”) for
the first and third quarters of each fiscal year on Form N-PORT within 60 days after the end of the period. Copies of the Fund’s
Form N-PORT are available without a charge, upon request, by contacting the Fund at 1-855-830-1222 and on the SEC’s website
at http://www.sec.gov.
PROXY
VOTING
A
description of the Fund’s proxy voting policies and procedures is available (1) without charge, upon request, by calling
1-855-830-1222, (2) on the Fund’s website located at http://www.rivernorthcef.com, or (3) on the SEC’s website at
http://www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the twelve-month
period ended June 30th is available on the SEC’s website at http://www.sec.gov.
STOCKHOLDER
MEETING
RESULTS
On
August 20, 2021, the Fund held a Meeting of Stockholders to consider the proposals set forth below. The following votes were recorded:
Proposal
1: The election of two (2) Directors of the Fund to a three-year term to expire at the Fund’s 2024 Annual Meeting of Stockholders
or until their successor is duly elected and qualified.
Election
of John S. Oakes as a Director of the Fund to a three-year term to expire at the Fund’s 2024 Annual Meeting of Stockholders
or until his successor is duly elected and qualified.
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|
Shares
Voted
|
|
|
%
of Shares Voted
|
|
For
|
|
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8,504,195
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|
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97.76%
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Withheld
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194,524
|
|
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2.24%
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Total
|
|
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8,698,719
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|
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100.00%
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|
Election
of Jerry R. Raio as a Director of the Fund to a three-year term to expire at the Fund’s 2024 Annual Meeting of Stockholders
or until his successor is duly elected and qualified.
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Shares
Voted
|
|
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%
of Shares Voted
|
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For
|
|
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8,295,235
|
|
|
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95.36%
|
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Withheld
|
|
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403,484
|
|
|
|
4.64%
|
|
Total
|
|
|
8,698,719
|
|
|
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100.00%
|
|
Annual
Report | July 31, 2021
|
55
|
RiverNorth
Opportunities Fund, Inc.
|
Additional
Information
|
|
July
31, 2021 (Unaudited)
|
Proposal
2: The conversion of the Fund from a closed-end fund to an open-end investment company, with which the Fund’s common shares
would become redeemable directly by the Fund at NAV and would not trade on any exchange.
|
|
Shares
Voted
|
|
|
%
of Shares Voted
|
|
For
|
|
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264,386
|
|
|
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3.04
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%
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Withheld
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|
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3,768,841
|
|
|
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43.33
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%
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Abstain
|
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115,915
|
|
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1.33
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%
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Broker
Non-Votes
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4,549,577
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52.30
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%
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Total
|
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8,698,719
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|
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100.00
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%
|
UNAUDITED
TAX INFORMATION
The Fund
designated the following for federal income tax purposes for the year ended July 31, 2021:
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Foreign
Taxes Paid
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Foreign
Source Income
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RiverNorth
Opportunities Fund
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$23,463
|
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$223,299
|
|
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Tax-Exempt
Percentage
|
RiverNorth
Opportunities Fund
|
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4.41%
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Of
the distributions paid by the Fund from ordinary income for the calendar year ended December 31, 2020, the following percentages
met the requirements to be treated as qualifying for the corporate dividends received deduction and qualified dividend income:
|
|
Dividend
Received Deduction
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|
Qualified
Dividend Income
|
RiverNorth
Opportunities Fund
|
|
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2.82%
|
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8.05%
|
In
early 2021, if applicable, shareholders of record received this information for the distributions paid to them by the Funds during
the calendar year 2020 via Form 1099. The Fund will notify shareholders in early 2022 of amounts paid to them by the Fund, if
any, during the calendar year 2021.
Pursuant
to Section 852(b)(3) of the Internal Revenue Code, RiverNorth Opportunities Fund designated $0 as long term capital gain dividends.
CUSTODIAN
AND TRANSFER AGENT
State
Street Bank and Trust Company, located at State Street Financial Center, One Lincoln Street, Boston, MA 02111, serves as the Fund’s
custodian and maintains custody of the securities and cash of the Fund.
DST
Systems, Inc., located at 333 West 11th Street, 5th Floor, Kansas City, Missouri 64105, serves as the Fund’s transfer agent
and registrar.
RiverNorth
Opportunities Fund, Inc.
|
Additional
Information
|
|
July
31, 2021 (Unaudited)
|
LEGAL
COUNSEL
Dechert
LLP, located at 1095 Avenue of the Americas, New York, New York 10036, serves as legal counsel to the Fund.
INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
Cohen & Company, Ltd. is the independent registered public accounting firm for the Fund.
Annual
Report | July 31, 2021
|
57
|
RiverNorth
Opportunities Fund, Inc.
|
Expense
Example
|
|
July
31, 2021 (Unaudited)
|
The
following table is intended to assist investors in understanding the fees and expenses (annualized) that an investor in Common
Shares would bear, directly or indirectly. The table is based on the capital structure of the Fund as of July 31, 2021.
The
table shows Fund expenses as a percentage of net assets attributable to Common Shares. The following table should not be considered
a representation of the Fund’s future expenses. Actual expenses may be greater or less than those shown below.
Shareholder
Transaction Expenses
|
|
As
a Percentage of Offering Price
|
Sales
Load(1)
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—%
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Expenses
Borne by Common Stockholders of the Fund(1)
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—%
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Dividend
Reinvestment Plan Fees
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None(2)
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Shareholder
Transaction Expenses
|
|
As
a Percentage of
Net Assets Attributable to
Common Shares (1)(6)
|
Management
Fee(3)
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1.00%
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Dividend
and Interest Expense on Short Sales(4)
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0.45%
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Interest
Expense on borrowings(4)
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0.02%
|
Other
Expenses(4)
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0.44%
|
Acquired
Fund Fees and Expenses(5)
|
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1.68%
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Total
Annual Expenses
|
|
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3.59%
|
Example(6)
The
purpose of the following table is to help a holder of Common Shares understand the fees and expenses that such holder would bear
directly or indirectly. The following example illustrates the expenses that you would pay on a $1,000 investment in Common Shares,
assuming (1) that the Fund incurs total annual expenses of 3.59% of its net assets in years 1 through 10 and (2) a 5% annual return.
|
|
1
year
|
|
|
3
years
|
|
|
5
years
|
|
|
10
years
|
|
Total
Expenses Incurred
|
|
|
$36
|
|
|
|
$110
|
|
|
|
$186
|
|
|
|
$385
|
|
The
example should not be considered a representation of future expenses. Actual expenses may be greater or less than those assumed.
(1)
|
If
Common Shares are sold to or through underwriters, the Prospectus Supplement will set forth any applicable sales load and the
estimated offering expenses borne by the Fund.
|
(2)
|
There
will be no brokerage charges with respect to Common Shares issued directly by the Fund under the dividend reinvestment plan. You
will pay brokerage charges in connection with open market purchases or if you direct the plan agent to sell your Common Shares
held in a dividend reinvestment account.
|
(3)
|
The
management fee is equal to 1.00% of the Fund’s average daily Managed Assets, as opposed to net assets as shown in the table
above. If leverage is used, Managed Assets will be greater in amount than net assets, because Managed Assets includes borrowings
for investment purposes.
|
RiverNorth
Opportunities Fund, Inc.
|
Expense
Example
|
|
July
31, 2021 (Unaudited)
|
(4)
|
Other
Expenses, Interest Expense on Borrowings and Dividend and Interest Expense on Short Sales are estimated based on the Fund’s
Annual report dated July 31, 2021.
|
(5)
|
The
“Acquired Fund Fees and Expenses” disclosed above are based on the expense ratios for the most recent fiscal year
of the Underlying Funds in which the Fund anticipates investing, which may change substantially over time and, therefore, significantly
affect Acquired Fund Fees and Expenses. These amounts are based on the total expense ratio disclosed in each Underlying Fund’s
most recent stockholder report. Some of the Underlying Funds in which the Fund intends to invest charge incentive fees based on
the Underlying Funds’ performance. The 1.68% shown as Acquired Fund Fees and Expenses reflects estimated operating expenses
of the Underlying Funds and transaction-related fees. Certain Underlying Funds in which the Fund intends to invest generally charge
a management fee of 1.00% to 2.00%, which are included in “Acquired Fund Fees and Expenses,” as applicable. The Acquired
Fund Fees and Expenses disclosed above, however, do not reflect any performance-based fees or allocations paid by the Underlying
Funds that are calculated solely on the realization and/or distribution of gains, or on the sum of such gains and unrealized appreciation
of assets distributed in-kind, as such fees and allocations for a particular period may be unrelated to the cost of investing
in the Underlying Funds. Acquired Fund Fees and Expenses are borne indirectly by the Fund, but they will not be reflected in the
Fund’s financial statements; and the information presented in the table will differ from that presented in the Fund’s
financial highlights.
|
(6)
|
The
example should not be considered a representation of future expenses and includes the expenses of the offering. The example assumes
that the estimated “Other Expenses” set forth in the table are accurate and that all dividends and distributions are
reinvested at the Common Share NAVs. Actual expenses may be greater or less than those assumed. Moreover, the Fund’s actual
rate of return may be greater or less than the hypothetical 5% annual return shown in the example.
|
Annual
Report | July 31, 2021
|
59
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
The
following information in this annual report is a summary of certain information about the Fund and changes since the Fund’s
registration statement dated September 17, 2021 (the “prior disclosure date”). This information may not reflect all
of the changes that have occurred since you purchased the Fund.
Investment
Objective
There
have been no changes in the Fund’s investment objective since the prior disclosure date that has not been approved by shareholders.
The Fund’s
investment objective is total return consisting of capital appreciation and current income.
Principal
Investment Strategies
The
Fund seeks to achieve its investment objective by pursuing a tactical asset allocation strategy and opportunistically investing
under normal circumstances in closed-end funds, ETFs, BDCs and SPACs (collectively, “Underlying Funds”). BDCs are
a type of closed-end fund that invests in small companies in the initial stages of their development and are similar to venture
capital funds. SPACs are collective investment structures that pool funds in order to seek potential acquisition opportunities.
RiverNorth Capital Management, LLC (the “Subadviser”) has the flexibility to change the Fund’s asset allocation
based on its ongoing analysis of the equity, fixed income and alternative asset markets. The Subadviser considers various quantitative
and qualitative factors relating to the domestic and foreign securities markets and economies when making asset allocation and
security selection decisions. While the Subadviser continuously evaluates these factors, material shifts in the Fund’s asset
class exposures will typically take place over longer periods of time. In addition, the Fund, in seeking to achieve its investment
objective, will not take activist positions in the Underlying Funds.
Under
normal market conditions, the Fund will invest at least 80% of its Managed Assets in Underlying Funds. The Fund directly, and
therefore holders of common stock (“Common Stockholders”) indirectly, will bear the expenses of the Underlying Funds.
Under
normal market conditions: (i) no more than 80% of the Fund’s Managed Assets will be invested in “equity” Underlying
Funds; (ii) no more than 60% of the Fund’s Managed Assets will be invested in “fixed income” Underlying Funds;
(iii) no more than 30% of the Fund’s Managed Assets will be invested in “global equity” Underlying Funds; (iv)
no more than 15% of the Fund’s Managed Assets will be invested in “emerging market equity” Underlying Funds;
(v) no more than 30% of the Fund’s Managed Assets will be invested in “high yield” (also known as “junk
bond”) and “senior loan” Underlying Funds; (vi) no more than 15% of the Fund’s Managed Assets will be
invested in “emerging market income” Underlying Funds; (vii) no more than 10% of the Fund’s Managed Assets will
be invested in “real estate” Underlying Funds; and (viii) no more than 15% of the Fund’s Managed Assets will
be invested in “energy master limited partnership” (“MLP”) Underlying Funds. Underlying Funds included
in the 30% limitation applicable to investments in “global equity” Underlying Funds may include Underlying Funds that
invest a portion of their assets in emerging markets securities. The Fund will also limit its investments in closed-end funds
(including BDCs) that have been in operation for less than one year to no more than 10% of the Fund’s Managed Assets. The
Fund will not invest in inverse ETFs and leveraged ETFs. The types of Underlying Funds referenced in this
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
paragraph
will be categorized in accordance with the fund categories established and maintained by Morningstar, Inc. The investment parameters
stated above (and elsewhere in this disclosure) apply only at the time of purchase. The Underlying Funds in which the Fund invests
will not include those that are advised or subadvised by the Adviser, the Subadviser or their affiliates.
In
selecting closed-end funds, the Subadviser opportunistically utilizes a combination of short-term and longer-term trading strategies
to seek to derive value from the discount and premium spreads associated with closed-end funds. The Fund benefits if it purchases
a closed-end fund at a discount and the discount narrows. In addition, the Fund may purchase closed-end funds at a premium if
the Subadviser believes the premium will increase. The Subadviser employs both a quantitative and qualitative approach in its
selection of closed-end funds and has developed proprietary screening models and trading algorithms to trade closed-end funds.
Under
normal circumstances, the Fund intends to maintain long positions in Underlying Funds, however, may engage in short sales for
investment purposes. When the Fund engages in a short sale, it sells a security it does not own and, to complete the sale, borrows
the same security from a broker or other institution. The Fund may benefit from a short position when the shorted security decreases
in value. The Fund may also at times establish hedging positions. Hedging positions may include short sales and derivatives, such
as options and swaps (“Hedging Positions”). Under normal market conditions, no more than 30% of the Fund’s Managed
Assets will be in Hedging Positions. The Fund’s investments in derivatives will be included under the 80% policy noted above
so long as the underlying asset of such derivatives is a closed-end fund or Underlying Fund, respectively. The Subadviser intends
to use Hedging Positions to lower the Fund’s volatility but they may also be used to seek to enhance the Fund’s return.
A short sale is a transaction in which the Fund sells a security that it does not own in anticipation of a decline in the market
price of the security. To complete the short sale, the Fund must arrange through a broker to borrow the security in order to deliver
it to the buyer. The Fund is obligated to replace the borrowed security by purchasing it at a market price at or prior to the
time it must be returned to the lender. The price at which the Fund is required to replace the borrowed security may be more or
less than the price at which the security was sold by the Fund. The Fund will incur a loss if the price of the security sold short
increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund will realize
a gain if the price of the security declines between those dates.
The
Fund may attempt to enhance the return on the cash portion of its portfolio by investing in a total return swap agreement. A total
return swap agreement provides the Fund with a return based on the performance of an underlying asset, in exchange for fee payments
to a counterparty based on a specific rate. The difference in the value of these income streams is recorded daily by the Fund,
and is typically settled in cash at least monthly. If the underlying asset declines in value over the term of the swap, the Fund
would be required to pay the dollar value of that decline plus any applicable fees to the counterparty. The Fund may use its own
NAV or any other reference asset that the Subadviser chooses as the underlying asset in a total return swap. The Fund will limit
the notional amount of all total return swaps in the aggregate to 15% of the Fund’s Managed Assets. Using the Fund’s
own NAV as the underlying asset in the total return swap serves to reduce cash drag (the impact of cash on the Fund’s overall
return) by replacing it with the impact of market exposure based upon the Fund’s own investment holdings. This type of total
return swap would provide the Fund with a return based on its NAV. Like any total return swap, the Fund would be subject to counterparty
risk and the risk that its own NAV declines in value.
Annual
Report | July 31, 2021
|
61
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
Use
of Leverage
The
Fund may borrow money and/or issue preferred stock, notes or debt securities for investment purposes. These practices are known
as leveraging. The Fund may utilize leverage to purchase portfolio securities and for portfolio or cash management purposes. The
Fund also may borrow money as a temporary measure for extraordinary or emergency purposes, including settlement of securities
transactions, which otherwise might require untimely dispositions of the Fund’s portfolio securities. The Fund currently
anticipates that if employed, leverage will primarily be obtained through the use of bank borrowings or other similar term loans.
The Underlying Funds that the Fund invests in may also use leverage. The Fund may be subject to certain restrictions on investments
imposed by lenders or by one or more rating agencies that may issue ratings for any senior securities issued by the Fund. Borrowing
covenants or rating agency guidelines may impose asset coverage or Fund composition requirements that are more stringent than
those imposed on the Fund by the 1940 Act.
The
provisions of the 1940 Act further provide that the Fund may borrow or issue notes or debt securities in an amount up to 33 1/3%
of its total assets or may issue preferred shares in an amount up to 50% of the Fund’s total assets (including the proceeds
from leverage). Notwithstanding the limits discussed above, the Fund may enter into derivatives or other transactions (e.g., total
return swaps) that may provide leverage (other than through borrowings or the issuance of preferred stock), but which are not
subject to the above foregoing limitations, if the Fund earmarks or segregates liquid assets (or enters into offsetting positions)
in accordance with applicable SEC regulations and interpretations to cover its obligations under those transactions and instruments.
However, these transactions will entail additional expenses (e.g., transaction costs) which will be borne by the Fund. These types
of transactions have the potential to increase returns to Common Stockholders, but they also involve additional risks. This additional
leverage will increase the volatility of the Fund’s investment portfolio and could result in larger losses than if the transactions
were not entered into. However, to the extent that the Fund enters into offsetting transactions or owns positions covering its
obligations, the leveraging effect is expected to be minimized or eliminated.
Under
the 1940 Act, the Fund is not permitted to incur indebtedness unless immediately after doing so the Fund has an asset coverage
of at least 300% of the aggregate outstanding principal balance of indebtedness (i.e., such indebtedness may not exceed 33 1/3%
of the value of the Fund’s total assets including the amount borrowed). Additionally, under the 1940 Act, the Fund may not
declare any dividend or other distribution upon any class of its shares, or purchase any such shares, unless the aggregate indebtedness
of the Fund has, at the time of the declaration of any such dividend or distribution or at the time of any such purchase, asset
coverage of at least 300% after deducting the amount of such dividend, distribution, or purchase price, as the case may be. Under
the 1940 Act, the Fund is not permitted to issue preferred stock unless immediately after such issuance the total asset value
of the Fund’s portfolio is at least 200% of the liquidation value of the outstanding preferred stock (i.e., such liquidation
value may not exceed 50% of the Fund’s Managed Assets). In addition, the Fund is not permitted to declare any cash dividend
or other distribution on its Common Shares unless, at the time of such declaration, the NAV of the Fund’s portfolio (determined
after deducting the amount of such dividend or other distribution) is at least 200% of such liquidation value of the preferred
stock. If preferred stock is issued, the Fund intends, to the extent possible, to purchase or redeem shares, from time to time,
to maintain coverage of any preferred stock of at least 200%. Normally, holders of Common Shares will elect the directors of the
Fund except that the
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
holders
of any preferred stock will elect two directors. In the event the Fund failed to pay dividends on its preferred stock for two
years, holders of preferred stock would be entitled to elect a majority of the directors until the dividends are paid.
Effects
of Leverage
The
following table is furnished in response to requirements of the SEC. It is designed to illustrate the effect of leverage on total
return on common shares, assuming investment portfolio total returns (comprised of income, net expenses and changes in the value
of investments held in the Fund’s portfolio) of -10%, -5%, 0%, 5% and 10%. These assumed investment portfolio returns are
hypothetical figures and are not necessarily indicative of what the Fund’s investment portfolio returns will be. In other
words, the Fund’s actual returns may be greater or less than those appearing in the table below. The table further reflects
the use of leverage representing approximately 33⅓% of the Fund’s Managed Assets and estimated leverage costs of 1.14%.
Assumed
Portfolio Return
|
|
|
-10.00
|
%
|
|
|
-5.00
|
%
|
|
|
0.00
|
%
|
|
|
5.00
|
%
|
|
|
10.00
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
Share Total Return
|
|
|
-15.57
|
%
|
|
|
-8.07
|
%
|
|
|
-0.57
|
%
|
|
|
6.93
|
%
|
|
|
14.43
|
%
|
Total
return is composed of two elements—the dividends on common shares paid by the Fund (the amount of which is largely determined
by the Fund’s net investment income after paying the cost of leverage) and realized and unrealized gains or losses on the
value of the securities the Fund owns. As the table shows, leverage generally increases the return to common shareholders when
portfolio return is positive or greater than the costs of leverage and decreases return when the portfolio return is negative
or less than the costs of leverage.
During
the time in which the Fund is using leverage, the amount of the fees paid to the Adviser (and from the Adviser to the Subadviser)
for investment management services (and subadvisory services) is higher than if the Fund did not use leverage because the fees
paid are calculated based on the Fund’s Managed Assets. This may create a conflict of interest between the Adviser and the
Subadviser, on the one hand, and common shareholders, on the other. Also, because the leverage costs are borne by the Fund at
a specified interest rate, only the Fund’s common shareholders bear the cost of the Fund’s management fees and other
expenses. There can be no assurance that a leveraging strategy will be successful during any period in which it is employed.
Market
and Net Asset Value Information
The
Fund’s Common Shares are listed on the NYSE under the symbol “RIV.” The Fund’s Common Shares commenced
trading on the NYSE in December 2015.
The
Fund’s Common Shares have traded both at a premium and a discount to NAV. The Fund cannot predict whether the Common Shares
will trade in the future at a premium or discount to NAV. The provisions of the 1940 Act generally require that the public offering
price of Common Shares (less any underwriting commissions and discounts) must equal or exceed the NAV per share of a company’s
common stock (calculated within 48 hours of pricing). The Fund’s issuance of Common Shares may have an adverse effect on
prices in the secondary market for the Fund’s Common Shares by increasing the number of Common Shares available, which may
put downward pressure on the
Annual
Report | July 31, 2021
|
63
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
market
price for the Fund’s Common Shares. Shares of common stock of closed-end investment companies frequently trade at a discount
from NAV.
The
following table shows, for each fiscal quarter since the quarter ended January 31, 2016: (i) high and low NAVs per share of common
stock, (ii) the high and low sale prices per share of common stock, as reported in the consolidated transaction reporting system,
and (iii) the percentage by which the Common Shares traded at a premium over, or discount from, the high and low NAVs per shares
of common stock. The Fund’s NAV per Common Share is determined on a daily basis.
Quarter
Ended
|
Market
Price
|
|
NAV
at
|
|
Market
Premium
(Discount) to NAV at
|
|
|
|
|
High
|
|
|
Low
|
|
|
Market
High
|
|
|
Market
Low
|
|
|
Market
High
|
|
|
Market
Low
|
|
2021
|
|
July
31
|
|
$
|
18.75
|
|
|
$
|
16.75
|
|
|
$
|
17.24
|
|
|
$
|
17.02
|
|
|
|
8.76
|
%
|
|
|
-1.59
|
%
|
|
|
April
30
|
|
$
|
17.88
|
|
|
$
|
16.71
|
|
|
$
|
17.23
|
|
|
$
|
16.61
|
|
|
|
3.77
|
%
|
|
|
0.60
|
%
|
|
|
January
31
|
|
$
|
17.07
|
|
|
$
|
13.81
|
|
|
$
|
16.48
|
|
|
$
|
14.53
|
|
|
|
3.58
|
%
|
|
|
-4.96
|
%
|
2020
|
|
October
31
|
|
$
|
16.09
|
|
|
$
|
13.75
|
|
|
$
|
15.29
|
|
|
$
|
14.49
|
|
|
|
5.23
|
%
|
|
|
-5.11
|
%
|
|
|
July
31
|
|
$
|
15.55
|
|
|
$
|
12.52
|
|
|
$
|
14.95
|
|
|
$
|
13.58
|
|
|
|
4.01
|
%
|
|
|
-7.81
|
%
|
|
|
April
30
|
|
$
|
17.00
|
|
|
$
|
8.65
|
|
|
$
|
17.01
|
|
|
$
|
11.72
|
|
|
|
-0.06
|
%
|
|
|
-26.19
|
%
|
|
|
January
31
|
|
$
|
17.10
|
|
|
$
|
15.85
|
|
|
$
|
17.30
|
|
|
$
|
16.79
|
|
|
|
-1.16
|
%
|
|
|
-5.60
|
%
|
2019
|
|
October
31
|
|
$
|
17.32
|
|
|
$
|
16.09
|
|
|
$
|
17.13
|
|
|
$
|
16.90
|
|
|
|
1.11
|
%
|
|
|
-4.79
|
%
|
|
|
July
31
|
|
$
|
17.75
|
|
|
$
|
16.44
|
|
|
$
|
17.54
|
|
|
$
|
17.14
|
|
|
|
1.20
|
%
|
|
|
-4.08
|
%
|
|
|
April
30
|
|
$
|
17.36
|
|
|
$
|
16.44
|
|
|
$
|
17.49
|
|
|
$
|
17.50
|
|
|
|
-0.74
|
%
|
|
|
-6.06
|
%
|
|
|
January
31
|
|
$
|
17.30
|
|
|
$
|
14.20
|
|
|
$
|
17.79
|
|
|
$
|
15.90
|
|
|
|
-2.75
|
%
|
|
|
-10.69
|
%
|
2018
|
|
October
31
|
|
$
|
20.04
|
|
|
$
|
16.76
|
|
|
$
|
19.02
|
|
|
$
|
17.57
|
|
|
|
5.36
|
%
|
|
|
-4.61
|
%
|
|
|
July
31
|
|
$
|
21.63
|
|
|
$
|
18.80
|
|
|
$
|
19.47
|
|
|
$
|
18.98
|
|
|
|
11.09
|
%
|
|
|
0.96
|
%
|
|
|
April
30
|
|
$
|
21.36
|
|
|
$
|
20.02
|
|
|
$
|
19.76
|
|
|
$
|
19.67
|
|
|
|
8.10
|
%
|
|
|
1.78
|
%
|
|
|
January
31
|
|
$
|
21.09
|
|
|
$
|
19.10
|
|
|
$
|
19.98
|
|
|
$
|
19.87
|
|
|
|
5.56
|
%
|
|
|
-3.88
|
%
|
2017
|
|
October
31
|
|
$
|
21.51
|
|
|
$
|
19.70
|
|
|
$
|
20.89
|
|
|
$
|
20.59
|
|
|
|
2.97
|
%
|
|
|
-4.32
|
%
|
|
|
July
31
|
|
$
|
21.57
|
|
|
$
|
19.42
|
|
|
$
|
20.80
|
|
|
$
|
20.68
|
|
|
|
3.70
|
%
|
|
|
-6.09
|
%
|
|
|
April
30
|
|
$
|
20.13
|
|
|
$
|
19.19
|
|
|
$
|
20.87
|
|
|
$
|
20.56
|
|
|
|
-3.55
|
%
|
|
|
-6.66
|
%
|
|
|
January
31
|
|
$
|
19.65
|
|
|
$
|
18.00
|
|
|
$
|
20.21
|
|
|
$
|
19.64
|
|
|
|
-2.77
|
%
|
|
|
-8.35
|
%
|
2016
|
|
October
31
|
|
$
|
20.59
|
|
|
$
|
18.67
|
|
|
$
|
20.88
|
|
|
$
|
20.33
|
|
|
|
-1.39
|
%
|
|
|
-8.17
|
%
|
|
|
July
31
|
|
$
|
19.71
|
|
|
$
|
17.79
|
|
|
$
|
20.70
|
|
|
$
|
19.73
|
|
|
|
-4.78
|
%
|
|
|
-9.83
|
%
|
|
|
April
30
|
|
$
|
19.79
|
|
|
$
|
15.31
|
|
|
$
|
19.99
|
|
|
$
|
17.73
|
|
|
|
-1.00
|
%
|
|
|
-13.65
|
%
|
|
|
January
31
|
|
$
|
20.81
|
|
|
$
|
18.66
|
|
|
$
|
18.03
|
|
|
$
|
18.06
|
|
|
|
15.42
|
%
|
|
|
3.32
|
%
|
Risks
Investing
in any investment company security involves risk, including the risk that you may receive little or no return on your investment
or even that you may lose part or all of your investment. Investors should consider the following risk factors and special considerations
associated with investing in the Fund’s Common Shares.
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
Structural
Risks:
Not
a Complete Investment Program
The
Fund is intended for investors seeking capital appreciation and current income over the long- term, and is not intended to be
a short-term trading vehicle. An investment in the Common Shares of the Fund should not be considered a complete investment program.
Each investor should take into account the Fund’s investment objective and other characteristics as well as the investor’s
other investments when considering an investment in the Common Shares. An investment in the Fund may not be appropriate for all
investors.
Risks
Associated with Offerings of Additional Common Shares
The
voting power of current Common Stockholders will be diluted to the extent that current Common Stockholders do not purchase Common
Shares in any future offerings of Common Shares or do not purchase sufficient Common Shares to maintain their percentage interest.
If the Fund is unable to invest the proceeds of such offering as intended, the Fund’s per Common Share distribution may
decrease and the Fund may not participate in market advances to the same extent as if such proceeds were fully invested as planned.
If the Fund sells Common Shares at a price below NAV pursuant to the consent of Common Stockholders, shareholders will experience
a dilution of the aggregate NAV per Common Share because the sale price will be less than the Fund’s then-current NAV per
Common Share. Similarly, were the expenses of the offering to exceed the amount by which the sale price exceeded the Fund’s
then current NAV per Common Share, shareholders would experience a dilution of the aggregate NAV per Common Share. This dilution
will be experienced by all shareholders, irrespective of whether they purchase Common Shares in any such offering.
Additional
Risks of Rights
There
are additional risks associated with an offering of subscription rights to purchase Common Shares (“Rights”). Shareholders
who do not exercise their Rights may, at the completion of such an offering, own a smaller proportional interest in the Fund than
if they exercised their Rights. As a result of such an offering, a shareholder may experience dilution in NAV per share if the
subscription price per share is below the NAV per share on the expiration date. If the subscription price per share is below the
NAV per share of the Fund’s Common Shares on the expiration date, a shareholder will experience an immediate dilution of
the aggregate NAV of such shareholder’s Common Shares if the shareholder does not participate in such an offering and the
shareholder will experience a reduction in the NAV per share of such shareholder’s Common Shares whether or not the shareholder
participates in such an offering. Such a reduction in NAV per share may have the effect of reducing market price of the Common
Share. The Fund cannot state precisely the extent of this dilution (if any) if the shareholder does not exercise such shareholder’s
Rights because the Fund does not know what the NAV per share will be when the offer expires or what proportion of the Rights will
be exercised. If the subscription price is substantially less than the then current NAV per Common Share at the expiration of
a rights offering, such dilution could be substantial. Any such dilution or accretion will depend upon whether (i) such shareholders
participate in the rights offering and (ii) the Fund’s NAV per Common Share is above or below the subscription price on
the expiration date
Annual
Report | July 31, 2021
|
65
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
of
the rights offering. In addition to the economic dilution described above, if a Common Stockholder does not exercise all of their
rights, the Common Stockholders will incur voting dilution as a result of this rights offering. This voting dilution will occur
because the Common Stockholders will own a smaller proportionate interest in the Fund after the rights offering than prior to
the rights offering. There is a risk that changes in market conditions may result in the underlying Common Shares purchasable
upon exercise of the subscription rights being less attractive to investors at the conclusion of the subscription period. This
may reduce or eliminate the value of the subscription rights. If investors exercise only a portion of the rights, the number of
Common Shares issued may be reduced, and the Common Shares may trade at less favorable prices than larger offerings for similar
securities. Subscription rights issued by the Fund may be transferable or non-transferable rights. In a non-transferable rights
offering, Common Stockholders who do not wish to exercise their rights will be unable to sell their rights. In a transferrable
rights offering, the Fund will use its best efforts to ensure an adequate trading market for the rights; however, investors may
find that there is no market to sell rights they do not wish to exercise.
Leverage
Risks
The
Fund may borrow money, or issue debt or preferred stock. Since the holders of Common Shares pay all expenses related to the issuance
of debt or use of leverage, the use of leverage through borrowing of money, issuance of debt securities or the issuance of preferred
stock for investment purposes creates risks for the holders of Common Shares. Leverage is a speculative technique that exposes
the Fund to greater risk and increased costs than if it were not implemented. Increases and decreases in the value of the Fund’s
portfolio will be magnified when the Fund uses leverage. As a result, leverage may cause greater changes in the Fund’s NAV.
The Fund will also have to pay interest on its borrowings or dividends on preferred stock, if any, which may reduce the Fund’s
return. The leverage costs may be greater than the Fund’s return on the underlying investment. The Fund’s leveraging
strategy may not be successful.
If
the Fund utilizes leverage in the form of borrowing, it anticipates that the money borrowed for investment purposes will incur
interest based on shorter-term interest rates that would be periodically reset. So long as the Fund’s portfolio provides
a higher rate of return, net of expenses, than the interest rate on borrowed money, as reset periodically, the leverage may cause
the holders of Common Shares to receive a higher current rate of return than if the Fund were not leveraged. If, however, long-term
and/or short-term rates rise, the interest rate on borrowed money could exceed the rate of return on securities held by the Fund,
reducing return to the holders of Common Shares.
There
is no assurance that a leveraging strategy will be successful. Leverage involves risks and special considerations for Common Stockholders,
including:
|
●
|
the
likelihood of greater volatility of NAV, market price and dividend rate of the Common Shares than a comparable portfolio without
leverage;
|
|
●
|
the
risk that fluctuations in interest rates on borrowings or on short-term debt or in the interest or dividend rates on any debt
securities or preferred shares that the Fund must pay will reduce the return to the Common Stockholders;
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
|
●
|
the
effect of leverage in a declining market, which is likely to cause a greater decline in the NAV of the Common Shares than if the
Fund were not leveraged, may result in a greater decline in the market price of the Common Shares;
|
|
●
|
when
the Fund uses financial leverage, the investment management fees payable to the Adviser and the subadvisory fees payable by the
Adviser to the Subadviser will be higher than if the Fund did not use leverage. This may create a conflict of interest between
the Adviser and the Subadviser, on the one hand, and the holders of Common Shares, on the other; and
|
|
●
|
leverage
may increase operating costs, which may reduce total return.
|
The
use of leverage will require the Fund to segregate assets to cover its obligations (or, if the Fund borrows money or issues preferred
shares, to maintain asset coverage in conformity with the requirements of the 1940 Act). While the segregated assets will be invested
in liquid securities, they may not be used for other operational purposes. Consequently, the use of leverage may limit the Fund’s
flexibility and may require that the Fund sell other portfolio investments to pay Fund expenses, to maintain assets in an amount
sufficient to cover the Fund’s leveraged exposure or to meet other obligations at a time when it may be disadvantageous
to sell such assets. Certain types of borrowings by the Fund may result in the Fund being subject to covenants in credit agreements
relating to asset coverage and portfolio composition requirements. The Fund may be subject to certain restrictions on investments
imposed by guidelines of one or more rating agencies, which may issue ratings for the short-term debt securities or preferred
shares issued by the Fund. These guidelines may impose asset coverage or portfolio composition requirements that are more stringent
than those imposed by the 1940 Act. The Subadviser does not believe that these covenants or guidelines will impede it from managing
the Fund’s portfolio in accordance with the Fund’s investment objective and policies if the Fund were to utilize leverage.
Leverage
risk would also apply to the Fund’s investments in Underlying Funds to the extent an Underlying Fund uses leverage.
Market
Discount
The
stock of closed-end management investment companies often trade at a discount from their NAV, and the Fund’s Common Shares
may likewise trade at a discount from NAV. The trading price of the Fund’s Common Shares may be less than the NAV. The returns
earned by Common Stockholders who sell their Common Shares below NAV will be reduced. The Fund’s Common Shares are currently
sold at a premium to NAV. This risk would also apply to the Fund’s investments in closed-end funds.
Anti-Takeover
Provisions
Maryland
law and the Fund’s Charter and Bylaws include provisions that could limit the ability of other entities or persons to acquire
control of the Fund or to convert the Fund to open-end status. These provisions could deprive the holders of Common Shares of
opportunities to sell their Common Shares at a premium over the then current market price of the Common Shares or at NAV. This
risk would also apply to many of the Fund’s investments in closed-end funds.
Annual
Report | July 31, 2021
|
67
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
Investment-Related
Risks
The
risks listed below are in alphabetical order. With the exception of Underlying Fund risk (and as otherwise noted below), the following
risks apply to the direct investments the Fund may make, and generally apply to the Fund’s investments in Underlying Funds.
That said, each risk described below may not apply to each Underlying Fund. Similarly, an Underlying Fund may be subject to additional
or different risks than those described below.
Asset
Allocation Risks
To
the extent that the Subadviser’s asset allocation strategy may fail to produce the intended result, the Fund’s return
may suffer. Additionally, the active asset allocation style of the Fund leads to changing allocations over time and represents
a risk to investors who target fixed asset allocations.
Convertible
Securities Risks
The
market value of convertible securities tends to fall when prevailing interest rates rise. The value of convertible securities
also tends to change whenever the market value of the underlying common or preferred stock fluctuates. Convertible securities
tend to be of lower credit quality
Defensive
Measures
The
Fund may invest up to 100% of its assets in cash, cash equivalents and short-term investments as a defensive measure in response
to adverse market conditions or opportunistically at the discretion of the Subadviser. During these periods or during periods
when an Underlying Fund invests defensively, the Fund may not be pursuing its investment objective.
Derivatives
Risks
The
Fund and the Underlying Funds may enter into derivatives. Derivative transactions involve investment techniques and risks different
from those associated with investments in Underlying Funds. Generally, a derivative is a financial contract the value of which
depends upon, or is derived from, the value of an underlying asset, reference rate, or index, and may relate to individual debt
or equity instruments, interest rates, currencies or currency exchange rates, commodities, related indexes, and other assets.
Derivatives can be volatile and involve various types and degrees of risk, depending upon the characteristics of a particular
derivative. Derivatives may entail investment exposures that are greater than their cost would suggest, meaning that a small investment
in a derivative could have a large potential impact on the performance of a fund. A fund could experience a loss if derivatives
do not perform as anticipated, if they are not correlated with the performance of other investments which they are used to hedge
or if the fund is unable to liquidate a position because of an illiquid secondary market. The market for many derivatives is,
or can suddenly become, illiquid. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices
of derivatives. When used for speculative purposes, derivatives will produce enhanced investment exposure, which will magnify
gains and losses. Certain derivatives transactions may give rise to a form of leverage. The use of leverage may cause a fund to
liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements.
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
Leverage
may cause a fund to be more volatile than if it had not been leveraged. This is because leverage tends to exaggerate the effect
of any increase or decrease in the value of the fund’s portfolio securities. Further, using derivatives may include the
risk of mispricing or improper valuation of derivatives and the inability of derivatives to correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are designed to closely track. The Fund also will be subject to credit
risk with respect to the counterparties to the derivatives contracts purchased by the Fund. If a counterparty becomes bankrupt
or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience
significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding.
The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.
Defaulted
and Distressed Securities Risks
The
Underlying Funds may invest in defaulted and distressed securities. Legal difficulties and negotiations with creditors and other
claimants are common when dealing with defaulted or distressed companies. Defaulted or distressed companies may be insolvent or
in bankruptcy. In the event of a default, an Underlying Fund may incur additional expenses to seek recovery. The repayment of
defaulted bonds is subject to significant uncertainties, and in some cases, there may be no recovery of repayment. Defaulted bonds
might be repaid only after lengthy workout or bankruptcy proceedings, during which the issuer might not make any interest or other
payments. Because of the relative illiquidity of defaulted or distressed debt and equity securities, short sales are difficult,
and most Underlying Funds primarily maintain long positions. Some relative value trades are possible, where an investor sells
short one class of a defaulted or distressed company’s capital structure and purchases another. With distressed investing,
often there is a time lag between when an Underlying Fund makes an investment and when the Underlying Fund realizes the value
of the investment. In addition, an Underlying Fund may incur legal and other monitoring costs in protecting the value of the Underlying
Fund’s claims.
Equity
Securities Risks
While
equity securities have historically generated higher average returns than fixed income securities, equity securities have also
experienced significantly more volatility in those returns. An adverse event, such as an unfavorable earnings report, may depress
the value of an issuer’s equity securities held by an Underlying Fund. Equity security prices fluctuate for several reasons,
including changes in investors’ perceptions of the financial condition of an issuer or the general condition of the relevant
stock market, or when political or economic events affecting the issuers occur. The value of a particular equity security may
fall in value. The prices of stocks change in response to many factors, including the historical and prospective earnings of the
issuer, the value of its assets, management decisions, decreased demand for an issuer’s products or services, increased
production costs, general economic conditions, interest rates, currency exchange rates, investor perceptions and market liquidity.
The value of an Underlying Fund’s shares will go up and down due to movement in the collective returns of the individual
securities held by the Underlying Fund. Common stocks are subordinate to preferred stocks and debt in a company’s capital
structure, and if a company is liquidated, the claims of secured and unsecured creditors and owners of preferred stocks take precedence
over the claims of those who own Common Shares. In addition, equity
Annual
Report | July 31, 2021
|
69
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
security
prices may be particularly sensitive to rising interest rates, as the cost of capital rises and borrowing costs increase.
Exchange-Traded
Note Risks
The
Fund and the Underlying Funds may invest in exchange-traded notes (“ETNs”), which are notes representing unsecured
debt issued by an underwriting bank. ETNs are typically linked to the performance of an index plus a specified rate of interest
that could be earned on cash collateral. The value of an ETN may be influenced by time to maturity, level of supply and demand
for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable interest rates, changes in the
issuer’s credit rating and economic, legal, political or geographic events that affect the referenced index. ETNs typically
mature 30 years from the date of issue. The issuer’s credit rating will be investment grade at the time of investment, however,
the credit rating may be revised or withdrawn at any time and there is no assurance that a credit rating will remain in effect
for any given time period. If a rating agency lowers the issuer’s credit rating, the value of the ETN will decline and a
lower credit rating reflects a greater risk that the issuer will default on its obligation. When a fund invests in ETNs, it will
bear its proportionate share of any fees and expenses associated with investment in such securities. Such fees reduce the amount
of return on investment at maturity or upon redemption.
There
may be restrictions on a fund’s right to liquidate its investment in an ETN prior to maturity (for example, a fund may only
be able to offer its ETN for repurchase by the issuer on a weekly basis), since ETNs are meant to be held until maturity. A fund’s
decision to sell its ETN holdings may be limited by the availability of a secondary market.
Fixed
Income Securities Risks
The
Underlying Funds and the Fund may invest in fixed income securities. Fixed income securities increase or decrease in value based
on changes in interest rates. If rates increase, the value of an Underlying Fund’s fixed income securities generally declines.
On the other hand, if rates fall, the value of the fixed income securities generally increases. The issuer of a fixed income security
may not be able to make interest and principal payments when due. This risk is increased in the case of issuers of high yield
securities, also known as “junk bonds.” If a U.S. Government agency or instrumentality in which an Underlying Fund
invests defaults, and the U.S. Government does not stand behind the obligation, the Underlying Fund’s share price or yield
could fall. Securities of certain U.S. Government sponsored entities are neither issued nor guaranteed by the U.S. Government.
The Underlying Funds may invest in fixed income securities of any credit quality, maturity or duration. Fixed income securities
risks include components of the following additional risks:
Credit
Risk. The issuer of a fixed income security may not be able to make interest and principal payments when due. Generally, the
lower the credit rating of a security, the greater the risk that the issuer will default on its obligation, which could result
in a loss to a fund. The Underlying Funds may invest in securities that are rated in the lowest investment grade category. Issuers
of these securities are more vulnerable to changes in economic conditions than issuers of higher grade securities.
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Summary
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RiverNorth
Opportunities Fund, Inc.
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the Fund
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July
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High
Yield Securities Risk. The Underlying Funds may invest in high yield securities, also known as “junk bonds.” High
yield securities provide greater income and opportunity for gain, but entail greater risk of loss of principal. High yield securities
are predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with
the terms of the obligation. The market for high yield securities is generally less active than the market for higher quality
securities. This may limit the ability of a fund to sell high yield securities at the price at which it is being valued for purposes
of calculating NAV.
U.S.
Government Securities Risk. The Underlying Funds may invest in U.S. Government securities. The U.S. Government’s guarantee
of ultimate payment of principal and timely payment of interest on certain U.S. Government securities owned by an Underlying Fund
does not imply that the Underlying Fund’s shares are guaranteed or that the price of the Underlying Fund’s shares
will not fluctuate. In addition, securities issued by Freddie Mac, Fannie Mae and Federal Home Loan Banks are not obligations
of, or insured by, the U.S. Government. If a U.S. Government agency or instrumentality in which an Underlying Fund invests defaults
and the U.S. Government does not stand behind the obligation, the Fund’s NAV could fall.
Interest
Rate Risk. An Underlying Fund’s NAV and total return will vary in response to changes in interest rates. If rates increase,
the value of an Underlying Fund’s investments generally will decline, as will the Underlying Fund’s NAV. In typical
interest rate environments, the prices of longer-term fixed income securities generally fluctuate more than the prices of shorter-term
fixed income securities as interest rates change. These risks may be greater in the current market environment because certain
interest rates are near historically low levels.
Sovereign
Obligation Risk. The Underlying Funds may invest in sovereign (i.e., foreign government) debt obligations. Investment in sovereign
debt obligations involves special risks not present in corporate debt obligations. The issuer of the sovereign debt or the governmental
authorities that control the repayment of the debt may be unable or unwilling to repay principal or interest when due, and the
Underlying Funds may have limited recourse in the event of a default. During periods of economic uncertainty, the market prices
of sovereign debt may be more volatile than prices of U.S. debt obligations. In the past, certain emerging markets have encountered
difficulties in servicing their debt obligations, withheld payments of principal and interest, and declared moratoria on the payment
of principal and interest on their sovereign debts. See also “Foreign Investing Risks” below.
Foreign
Investing Risks
The
Fund and the Underlying Funds may invest in foreign securities. Investments in foreign securities may be affected by currency
controls and exchange rates; different accounting, auditing, financial reporting, and legal standards and practices; expropriation;
changes in tax policy; social, political and economic instability; greater market volatility; differing securities market structures;
higher transaction costs; and various administrative difficulties, such as delays in clearing and settling portfolio transactions
or in receiving payment of dividends. In addition, changes in government administrations or economic or monetary policies in the
United States or abroad could result in appreciation or depreciation of the Fund’s or Underlying Fund’s securities.
These risks may be heightened in connection with investments in emerging or developing countries. To the extent that a Fund or
Underlying Fund invests in depositary receipts, the Fund or Underlying Fund will be subject
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to
many of the same risks as when investing directly in foreign securities. The effect of recent, worldwide economic instability
on specific foreign markets or issuers may be difficult to predict or evaluate, and some national economies continue to show profound
instability, which may in turn affect their international trading partners.
Illiquid
Securities Risks
The
Underlying Funds may invest in illiquid securities. It may not be possible to sell or otherwise dispose of illiquid securities
both at the price and within the time period deemed desirable by a fund. Illiquid securities also may be difficult to value.
Initial
Public Offerings Risks
The
Fund and the Underlying Funds may purchase securities in initial public offerings (“IPOs”). Because securities sold
in an IPO frequently are volatile in price, the Fund or an Underlying Fund may hold IPO shares for a very short period of time.
This may increase the turnover of a fund’s portfolio and may lead to increased expenses to the fund, such as commissions
and transaction costs. By selling shares, a fund may realize taxable capital gains that it will subsequently distribute to shareholders.
Investing in IPOs has added risks because the shares are frequently volatile in price. As a result, their performance can be more
volatile and they face greater risk of business failure, which could increase the volatility of a fund’s portfolio.
The
Fund’s IPO investments may be in IPOs of Underlying Funds. There is a significant risk that the shares of closed-end funds
purchased in an IPO will trade at a price below their IPO price.
Investment
and Market Risks
An
investment in Common Shares is subject to investment risk, including the possible loss of the entire principal amount invested.
An investment in Common Shares represents an indirect investment in the Underlying Funds owned by the Fund. The value of the Underlying
Funds, like other market investments, may move up or down, sometimes rapidly and unpredictably. Overall stock market risks may
also affect the NAV of the Fund or the Underlying Funds. Factors such as domestic and foreign economic growth and market conditions,
interest rate levels and political events affect the securities markets. The Common Shares at any point in time may be worth less
than the original investment, even after taking into account any reinvestment of dividends and distributions.
Legislation,
Policy and Regulatory Risks
At
any time after the date of this annual report, legislation or additional regulations may be enacted that could negatively affect
the assets of the Fund or the issuers of such assets. Recent changes in the U.S. political landscape and changing approaches to
regulation may have a negative impact on the entities and/or securities in which the Fund invests. Legislation or regulation may
also change the way in which the Fund itself is regulated. New or amended regulations may be imposed by the Commodity Futures
Trading Commission (“CFTC”), the SEC, the Board of Governors of the Federal Reserve System or other financial regulators,
other governmental regulatory authorities or
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RiverNorth
Opportunities Fund, Inc.
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Regarding
the Fund
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July
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self-regulatory
organizations that supervise the financial markets that could adversely affect the Fund. In particular, these agencies are empowered
to promulgate a variety of new rules pursuant to recently enacted financial reform legislation in the United States. There can
be no assurance that future legislation, regulation or deregulation will not have a material adverse effect on the Fund or will
not impair the ability of the Fund to achieve its investment objective. The Fund also may be adversely affected by changes in
the enforcement or interpretation of existing statutes and rules by these governmental regulatory authorities or self regulatory
organizations.
Additionally,
the U.S. presidential administration has expressed interest in altering the regulation of U.S. financial markets, including the
amendment or repeal of certain regulations relating to the Fund, including, potentially pursuing amending or repealing the Wall
Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), revisions to various swaps and derivatives
regulations, and changes to the authority of the Federal regulators, among others. The U.S. presidential administration has also
instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition
of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations or countries, and other government
regulations affecting trade between the U.S. and other countries that the Fund or its Underlying Funds invest. It is not possible
to predict the actions that will be taken, if any, or, if taken, their effect on the economy, securities markets or the financial
stability of the United States.
The
U.S. presidential administration has also instituted or proposed changes in trade policies that include the negotiation or termination
of trade agreements, the imposition of higher tariffs on imports into the U.S., economic sanctions on individuals, corporations
or countries, and other government regulations affecting trade between the U.S. and other countries that the Fund or its Underlying
Funds invest. The new tariffs and other changes in U.S. trade policy could trigger retaliatory actions by affected countries,
and certain foreign governments have instituted or are considering imposing trade sanctions on certain U.S. goods. While the effect
of such policies are not known, they may cause increased short and long term market volatility and may have adverse long- term
effects on U.S. and world economies generally. It is not possible to predict the actions that will be taken, if any, or, if taken,
their effect on the economy, securities markets or the financial stability of the United States or globally.
The
Dodd-Frank Act and related regulatory developments requires the clearing and exchange- trading of many OTC derivative instruments
that the CFTC and SEC defined as “swaps.” Mandatory exchange-trading and clearing occurs based on the type of market
participant and CFTC determination of contracts for central clearing. The Adviser and Subadviser will continue to monitor these
developments, particularly to the extent regulatory changes affect a Fund’s ability to enter into swap agreements.
Management
Risks
The
Subadviser’s judgments about the attractiveness, value and potential appreciation of a particular asset class or individual
security in which the Fund invests may prove to be incorrect and there is no guarantee that the Subadviser’s judgment will
produce the desired results. Similarly, the Fund’s investments in Underlying Funds are subject to the judgment of the Underlying
Funds’ managers which may prove to be incorrect. In addition, the Subadviser will have limited information as to the portfolio
holdings of the Underlying Funds at any given time. This may result in the
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Subadviser
having less ability to respond to changing market conditions. The Fund may allocate its assets so as to under-emphasize or over-emphasize
ETFs or other investments under the wrong market conditions, in which case the Fund’s NAV may be adversely affected.
Market
Disruption and Geopolitical Risks
The
value of your investment in the Fund is based on the values of the Fund’s investments, which may change due to economic and other
events that affect markets generally, as well as those that affect particular regions, countries, industries, companies or governments.
These movements, sometimes called volatility, may be greater or less depending on the types of securities the Fund owns and the markets
in which the securities trade. The increasing interconnectivity between global economies and financial markets increases the likelihood
that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial
market. Securities in the Fund’s portfolio may underperform due to inflation (or expectations for inflation), interest rates,
global demand for particular products or resources, natural disasters, pandemics, epidemics, terrorism, regulatory events and governmental
or quasi-governmental actions. The occurrence of global events similar to those in recent years, such as terrorist attacks around the
world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and
may have long term effects on both the U.S. and global financial markets. The occurrence of such events may be sudden and unexpected,
and it is difficult to predict when similar events affecting the U.S. or global financial markets may occur, the effects that such events
may have and the duration of those effects. Any such event(s) could have a significant adverse impact on the value, liquidity and risk
profile of the Fund’s portfolio, as well as its ability to sell securities to meet redemptions. There is a risk that you may lose
money by investing in the Fund.
Social,
political, economic and other conditions and events, such as natural disasters, health emergencies (e.g., epidemics and pandemics), terrorism,
conflicts and social unrest, may occur and could significantly impact issuers, industries, governments and other systems, including the
financial markets. As global systems, economies and financial markets are increasingly interconnected, events that once had only local
impact are now more likely to have regional or even global effects. Events that occur in one country, region or financial market will,
more frequently, adversely impact issuers in other countries, regions or markets. These impacts can be exacerbated by failures of governments
and societies to adequately respond to an emerging event or threat. These types of events quickly and significantly impact markets in
the U.S. and across the globe leading to extreme market volatility and disruption. The extent and nature of the impact on supply chains
or economies and markets from these events is unknown, particularly if a health emergency or other similar event, such as the recent
COVID-19 (the “Coronavirus”) outbreak, persists for an extended period of time. Social, political, economic and other conditions
and events, such as natural disasters, health emergencies (e.g., epidemics and pandemics), terrorism, conflicts and social unrest, could
reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant
impact on the economies and financial markets and the Adviser’s investment advisory activities and services of other service providers,
which in turn could adversely affect the Fund’s investments and other operations. The value of the Fund’s investment may
decrease as a result of such events, particularly if these events adversely impact the operations and effectiveness of the Adviser or
key service providers or if these events disrupt systems and processes necessary or beneficial to the investment advisory or other activities
on behalf the Fund.
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Summary
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RiverNorth
Opportunities Fund, Inc.
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Regarding
the Fund
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July
31, 2021 (Unaudited)
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Master
Limited Partnerships Risks
The
Underlying Funds may invest in MLPs. Investments in publicly traded MLPs, which are limited partnerships or limited liability companies
taxable as partnerships, involve some risks that differ from an investment in the common stock of a corporation, including risks related
to limited control and limited rights to vote on matters affecting MLPs, risks related to potential conflicts of interest between an
MLP and the MLP’s general partner, cash flow risks, dilution risks and risks related to the general partner’s right to
require unit-holders to sell their common units at an undesirable time or price. MLPs may derive income and gains from the exploration,
development, mining or production, processing, refining, transportation (including pipelines transporting gas, oil, or products thereof),
or the marketing of any mineral or natural resources. MLPs generally have two classes of owners, the general partner and limited partners.
When investing in an MLP, an Underlying Fund generally purchases publicly traded common units issued to limited partners of the MLP.
The general partner is typically owned by a major energy company, an investment fund, the direct management of the MLP or is an entity
owned by one or more of such parties. The general partner may be structured as a private or publicly traded corporation or other entity.
The general partner typically controls the operations and management of the MLP through an up to 2% equity interest in the MLP plus,
in many cases, ownership of common units and subordinated units. Limited partners own the remainder of the partnership, through ownership
of common units, and have a limited role in the partnership’s operations and management. As compared to common stockholders of
a corporation, holders of MLP common units have more limited control and limited rights to vote on matters affecting the partnership.
MLPs
are typically structured such that common units and general partner interests have first priority to receive quarterly cash distributions
up to an established minimum amount (“minimum quarterly distributions” or “MQD”). Common and general partner
interests also accrue arrearages in distributions to the extent the MQD is not paid. Once common and general partner interests have been
paid, subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue arrearages. Distributable
cash in excess of the MQD paid to both common and subordinated units is distributed to both common and subordinated units generally on
a pro rata basis. The general partner is also eligible to receive incentive distributions if the general partner operates the business
in a manner which results in distributions paid per common unit surpassing specified target levels. As the general partner increases
cash distributions to the limited partners, the general partner receives an increasingly higher percentage of the incremental cash distributions.
A common arrangement provides that the general partner can reach a tier where it receives 50% of every incremental dollar paid to common
and subordinated unit holders. These incentive distributions encourage the general partner to streamline costs, increase capital expenditures
and acquire assets in order to increase the partnership’s cash flow and raise the quarterly cash distribution in order to reach
higher tiers. Such results benefit all security holders of the MLP.
MLP
common units represent a limited partnership interest in the MLP. MLP common units are listed and traded on U.S. securities exchanges,
with their value fluctuating predominantly based on prevailing market conditions and the success of the MLP. An Underlying Fund may purchase
MLP common units in market transactions. Unlike owners of common stock of a corporation, owners of MLP common units have limited voting
rights and have no ability to elect directors. In the event of liquidation, MLP common units have preference over subordinated units,
but not over debt or preferred units, to the remaining assets of the MLP.
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MLPs
may be subject to legal and other restrictions on resale or will otherwise be less liquid than publicly traded securities. Certain MLP
securities may trade in lower volumes due to their smaller capitalizations. Accordingly, those MLPs may be subject to more abrupt or
erratic price movements and may lack sufficient market liquidity to enable an Underlying Fund to effect sales at an advantageous time
or without a substantial drop in price. As a result, these investments may be difficult to dispose of at a fair price at the times when
an Underlying Fund believes it is desirable to do so. MLPs are generally considered interest-rate sensitive investments. During periods
of interest rate volatility, these investments may not provide attractive returns, which may adversely impact the overall performance
of the Fund or an Underlying Fund.
MLPs
are subject to various risks related to the underlying operating companies they control, including dependence upon specialized management
skills and the risk that those operating companies may lack or have limited operating histories. The success an Underlying Fund’s
investments in an MLP will vary depending on the underlying industry represented by the MLP’s portfolio. Certain MLPs in which
an Underlying Fund may invest depend upon their parent or sponsor entities for the majority of their revenues.
Certain
MLPs in which an Underlying Fund may invest depend upon a limited number of customers for substantially all of their revenue. Similarly,
certain MLPs in which an Underlying Fund may invest depend upon a limited number of suppliers of goods or services to continue their
operations. The loss of those customers or suppliers could have a material adverse effect on an MLP’s results of operations and
cash flow, and on its ability to make distributions to unit holders such as an Underlying Fund.
The
benefit an Underlying Fund will derive from its investment in MLPs will be largely dependent on the MLPs being treated as partnerships
and not as corporations for federal income tax purposes. As a partnership, an MLP generally has no tax liability at the entity level.
If, as a result of a change in current law or a change in an MLP’s business, an MLP were treated as a corporation for federal
income tax purposes, such MLP would be obligated to pay federal income tax on its income at the corporate tax rate. If an MLP were classified
as a corporation for federal income tax purposes, the amount of cash available for distribution by the MLP would be reduced and distributions
received by an Underlying Fund would be taxed under federal income tax laws applicable to corporate dividends (as dividend income, return
of capital, or capital gain). Therefore, treatment of an MLP as a corporation for federal income tax purposes would result in a reduction
in the after-tax return to an Underlying Fund, likely causing a reduction in the value of the Common Shares.
Micro-,
Small- and Medium-Sized Company Risks
The
Underlying Funds may invest in securities without regard to market capitalization. Investments in securities of micro-, small-and medium-sized
companies may be subject to more abrupt or erratic market movements than larger, more established companies, because these securities
typically are traded in lower volume and issuers are typically more subject to changes in earnings and future earnings prospects. Small-
and medium-sized companies often have narrower markets for their goods and/or services and more limited managerial and financial resources
than larger, more established companies. Furthermore, these companies often have limited product lines, services, markets or financial
resources, or are dependent on a small management group. Since these stocks are not well-known to the investing public, do not have significant
institutional ownership and are
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RiverNorth
Opportunities Fund, Inc.
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the Fund
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followed
by relatively few security analysts, there will normally be less publicly available information concerning these securities compared
to what is available for the securities of larger companies. Adverse publicity and investor perceptions, whether or not based on fundamental
analysis, can decrease the value and liquidity of securities held by the Fund. As a result, small- and medium-sized companies’
performance can be more volatile and the companies face greater risk of business failure, which could increase the volatility of the
Fund’s portfolio. The risks are intensified for investments in micro-cap companies.
Options
and Futures Risks
The
Fund and the Underlying Funds may invest in options and futures contracts. The use of futures and options transactions entails certain
special risks. In particular, the variable degree of correlation between price movements of futures contracts and price movements in
the related securities position of the Fund or an Underlying Fund could create the possibility that losses on the hedging instrument
are greater than gains in the value of the Fund’s or Underlying Fund’s position. In addition, futures and options markets
could be illiquid in some circumstances and certain over- the- counter options could have no markets. As a result, in certain markets,
the Fund or an Underlying Fund might not be able to close out a transaction without incurring substantial losses. Although the Fund’s
or an Underlying Fund’s use of futures and options transactions for hedging should tend to minimize the risk of loss due to a
decline in the value of the hedged position, at the same time it will tend to limit any potential gain to the Fund or an Underlying Fund
that might result from an increase in value of the position. There is also the risk of loss by the Fund or an Underlying Fund of margin
deposits in the event of bankruptcy of a broker with whom the Fund or Underlying Fund has an open position in a futures contract or option
thereon. Finally, the daily variation margin requirements for futures contracts create a greater ongoing potential financial risk than
would purchases of options, in which case the exposure is limited to the cost of the initial premium. However, because option premiums
paid by the Fund or an Underlying Fund are small in relation to the market value of the investments underlying the options, buying options
can result in large amounts of leverage. This leverage offered by trading in options could cause the Fund’s or an Underlying Fund’s
NAV to be subject to more frequent and wider fluctuation than would be the case if the Fund or Underlying Fund did not invest in options.
Options
transactions may be effected on securities exchanges or in the over-the-counter market. When options are purchased over-the-counter,
the Fund or an Underlying Fund bears the risk that the counterparty that wrote the option will be unable or unwilling to perform its
obligations under the option contract. The counterparties to these transactions typically will be major international banks, broker-dealers
and financial institutions. Such options may also be illiquid, and in such cases, the Fund or an Underlying Fund may have difficulty
closing out its position. Banks, broker- dealers or other financial institutions participating in such transactions may fail to settle
a transaction in accordance with the terms of the option as written. In the event of default or insolvency of the counterparty, the Fund
or an Underlying Fund may be unable to liquidate an over-the-counter option position.
The
Fund may purchase put options. An Underlying Fund may purchase and sell call and put options with respect to specific securities, and
may write and sell covered or uncovered call and put options. A call option gives the purchaser of the call option, in return for a premium
paid, the right to buy the security underlying the option from the writer of the call option at a specified exercise price
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within
a specified time frame. A put option gives the purchaser of the put option, in return for a premium paid, the right to sell the underlying
security to the writer of the put option at a specified price within a specified time frame. A covered call option is a call option with
respect to an underlying security that a fund owns. A covered put option is a put option with respect to which a fund has segregated
cash or liquid securities to fulfill the obligation of the option. The purchaser of a put or call option runs the risk of losing the
purchaser’s entire investment, paid as the premium, in a relatively short period of time if the option is not sold at a gain or
cannot be exercised at a gain prior to expiration. In selling put options, there is a risk that the Underlying Fund may be required to
buy the underlying security at a disadvantageous price above the market price. The un-covered writer of a call option is subject to a
risk of loss if the price of the underlying security should increase, and the un-covered writer of a put option is subject to a risk
of loss if the price of the underlying security should decrease. The Fund will not treat uncovered options as “senior securities”
under the 1940 Act and instead, to address senior security concerns, will segregate cash or liquid securities to fulfill its obligation
under the options.
The
Fund may invest a significant portion of its total assets in Underlying Funds that write covered call options. To the extent that an
Underlying Fund writes a covered call option, it forgoes, during the option’s life, the opportunity to profit from increases in
the market value of the security covering the call option above the sum of the premium and the strike price of the call, but has retained
the risk of loss should the price of the underlying security decline. As the writer of the option, the Underlying Fund bears the market
risk of an unfavorable change in the price of the security underlying a written option. As an Underlying Fund writes covered calls over
more of its portfolio, its ability to benefit from capital appreciation becomes more limited and the risk of NAV erosion increases. To
the extent an Underlying Fund experiences NAV erosion (which itself may have an indirect negative effect on the market price of interests
in the Underlying Fund, the Underlying Fund will have a reduced asset base over which to write covered calls, which may eventually lead
to reduced distributions to shareholders such as the Fund. The writer of an option has no control over the time when it may be required
to fulfill its obligation as a writer of the option. Once an option writer has received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its obligation under the option and must deliver the underlying security at the exercise price.
To
the extent that an Underlying Fund engages in selling options that trade in over-the-counter markets, the Underlying Fund may be subject
to additional risks. Participants in these markets are typically not subject to the same credit evaluation and regulatory oversight as
members of “exchange based” markets. By engaging in option transactions in these markets, an Underlying Fund may take credit
risk with regard to parties with which it trades and also may bear the risk of settlement default. These risks may differ materially
from those involved in exchange-traded transactions, which generally are characterized by clearing organization guarantees, daily marking-to-market
and settlement, and segregation and minimum capital requirements applicable to intermediaries. Transactions entered into directly between
two counterparties generally do not benefit from these protections, which may subject an Underlying Fund to the risk that a counterparty
will not settle a transaction in accordance with agreed terms and conditions because of a dispute over the terms of the contract or because
of a credit or liquidity problem. Such “counterparty risk” is increased for contracts with longer maturities when events
may intervene to prevent settlement.
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RiverNorth
Opportunities Fund, Inc.
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the Fund
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The
Fund or an Underlying Fund may enter into futures contracts in U.S. domestic markets or on exchanges located outside of the United States.
Foreign markets may offer advantages, including trading opportunities or arbitrage possibilities, not available in the United States.
Foreign markets, however, may have greater risk potential than domestic markets. For example, some foreign exchanges are principal markets,
so that no common clearing facility exists and an investor may look only to the broker or counterparty for the performance of the contract.
Unlike trading on domestic commodity exchanges, trading on foreign commodity exchanges is not regulated by the Commodity Futures Trading
Commission.
There
can be no assurance that a liquid market will exist for any particular futures contract at any particular time. Many futures exchanges
and boards of trade limit the amount of fluctuation permitted in futures contract prices during a single trading day. Once the daily
limit has been reached in a particular contract, no trades may be made that day of a price beyond that limit or trading may be suspended
for specified periods during the trading day.
The
Fund or an Underlying Fund may purchase and sell single stock futures, stock index futures contracts, interest rate futures contracts,
currency futures and other commodity futures. A stock index future obligates a fund to pay or receive an amount of cash based upon the
value of a stock index at a specified date in the future, including the Standard & Poor’s 500 Composite Stock Price Index,
NASDAQ High Technology Index or similar foreign indices. An interest rate futures contract obligates a fund to purchase or sell an amount
of a specific debt security at a future date at a specified price. A currency futures contract obligates a fund to purchase or sell an
amount of a specific currency at a future date at a future price.
If
the Fund or an Underlying Fund purchases an option and the price of the underlying stock fails to move in the expected direction, the
Fund or Underlying Fund will lose most or all of the amount the fund paid for the option, plus commission costs. If an Underlying Fund
writes (“sells”) an option and the price of the underlying stock fails to move in the expected direction, the Underlying
Fund’s losses could easily exceed the proceeds it received when it wrote the options.
Private
Debt Risk
The
Fund may invest in debt issued by non-listed funds and BDCs (“Private Debt”). Private Debt often may be illiquid and is typically
not listed on an exchange and traded less actively than similar securities issued by publically traded-vehicles. For certain Private
Debt investments, trading may only be possible through the assistance of the broker who originally brought the security to the market
and has a relationship with the issuer. Due to the limited trading market, independent pricing services may be unable to provide a price
for Private Debt, and as such the fair value of the securities may be determined in good faith under procedures approved by the Board,
which typically will include the use of one or more independent broker quotes.
Real
Estate Investment Trust (“REIT”) Risks
The
Underlying Funds may invest in equity and mortgage REITs. Equity REITs invest in real estate, and mortgage REITs invest in loans secured
by real estate. Investing in REITs involves certain unique risks in addition to those risks associated with investing in the real estate
industry in general. Equity REITs may be affected by changes in the value of the underlying property owned by the REITs, while
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Opportunities Fund, Inc.
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the Fund
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mortgage
REITs may be affected by the quality of any credit extended. REITs are dependent upon management skills, are not diversified, and are
subject to heavy cash flow dependency, default by borrowers and self-liquidation. REITs also are subject to the possibilities of failing
to qualify for tax free pass-through of income under the Internal Revenue Code of 1986, as amended (the “Code”), and failing
to maintain their exemption from registration under the 1940 Act. Investment in REITs involves risks similar to those associated with
investing in small capitalization companies, and REITs (especially mortgage REITs) are subject to interest rate risks. When interest
rates decline, the value of a REIT’s investment in fixed rate obligations can be expected to rise. Conversely, when interest rates
rise, the value of a REIT’s investment in fixed rate obligations can be expected to decline. By investing in REITs directly or
indirectly through the Underlying Funds, the Fund will indirectly bear its proportionate share of the expenses of the REITs. The expenses
at the REIT level are not included in the Fund’s expense table as acquired fund fees and expenses.
Securities
Lending Risks
The
Underlying Funds may engage in securities lending. Securities lending involves counterparty risk, including the risk that the loaned
securities may not be returned in a timely manner and/or a loss of rights in the collateral if the borrower or the lending agent defaults.
This risk is increased when an Underlying Fund’s loans are concentrated with a single or limited number of borrowers. In addition,
an Underlying Fund bears the risk of loss in connection with the investments of the cash collateral it receives from the borrower. To
the extent that the value or return of an Underlying Fund’s investments of the cash collateral declines below the amount owed
to a borrower, the Underlying Fund may incur losses that exceed the amount it earned in lending the security.
Securities
Risks
The
value of the Fund or an Underlying Fund may decrease in response to the activities and financial prospects of individual securities in
the Fund’s portfolio.
Senior
Loan Risks
The
Underlying Funds may invest in senior secured floating rate and fixed-rate loans (“Senior Loans”). There is less readily
available and reliable information about most Senior Loans than is the case for many other types of instruments, including listed securities.
Senior Loans are not listed on any national securities exchange or automated quotation system and as such, many Senior Loans are illiquid,
meaning that an Underlying Fund may not be able to sell them quickly at a fair price. To the extent that a secondary market does exist
for certain Senior Loans, the market is more volatile than for liquid, listed securities and may be subject to irregular trading activity,
wide bid/ask spreads and extended trade settlement periods. The market for Senior Loans could be disrupted in the event of an economic
downturn or a substantial increase or decrease in interest rates. Senior Loans, like most other debt obligations, are subject to the
risk of default. Default in the payment of interest or principal on a Senior Loan will result in a reduction of income to the Fund, a
reduction in the value of the Senior Loan and a potential decrease in the Fund’s NAV of the Common Shares.
The
Underlying Funds may acquire or hold Senior Loans of borrowers that are experiencing, or are more likely to experience, financial difficulty,
including Senior Loans issued to highly leveraged borrowers or borrowers that have filed for bankruptcy protection. Borrowers may have
outstanding
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Summary
of Updated Information
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RiverNorth
Opportunities Fund, Inc.
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Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
debt
obligations, including Senior Loans that are rated below investment grade. An Underlying Fund may invest a substantial portion of its
assets in Senior Loans that are rated below investment grade or that are unrated at the time of purchase but are deemed by the Underlying
Fund’s adviser’s to be of comparable quality. The values of Senior Loans of borrowers that have filed for bankruptcy protection
or that are experiencing payment difficulty could be affected by, among other things, the assessment of the likelihood that the lenders
ultimately will receive repayment of the principal amount of such Senior Loans, the likely duration, if any, of a lapse in the scheduled
payment of interest and repayment of principal and prevailing interest rates. There is no assurance that an Underlying Fund will be able
to recover any amount on Senior Loans of such borrowers or that sale of the collateral granted in connection with Senior Loans would
raise enough cash to satisfy the borrower’s payment obligation or that the collateral can or will be liquidated. In the event
of bankruptcy, liquidation may not occur and the bankruptcy court may not give lenders the full benefit of their senior position in the
capital structure of the borrower.
LIBOR
Risk
Certain
Senior Loans may be based on floating rates, such as LIBOR. On July 27, 2017, the Chief Executive of the UK Financial Conduct Authority
(“FCA”), which regulates LIBOR, announced that the FCA will no longer persuade nor require banks to submit rates for the
calculation of LIBOR after 2021. Such announcement indicates that the continuation of LIBOR on the current basis cannot and will not
be guaranteed after 2021. Prior to 2021, it is expected that market participants will focus on the transition mechanisms by which references
to LIBOR in existing contracts or instruments may be amended. Nonetheless, the termination of LIBOR presents risks to an Underlying Fund.
The transition process might lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest
rates. The risks associated with the above factors, including decreased liquidity, are heightened with respect to investments in LIBOR-based
products that do not include a fallback provision that addresses how interest rates will be determined if LIBOR stops being published.
Even with some LIBOR-based instruments with fallback provisions providing for an alternative rate-setting methodology and/or increased
costs for certain LIBOR-related instruments or financing transactions, there may be significant uncertainty regarding the effectiveness
of any such alternative methodologies, resulting in prolonged adverse market conditions for the affected securities or payments. Since
the usefulness of LIBOR as a benchmark could deteriorate during the transition period, these effects could occur prior to the end of
2021. In addition, when LIBOR is discontinued, the successor reference rate may be lower than market expectations, which could have an
adverse impact on the value of preferred and debt-securities with floating or fixed-to-floating rate coupons. All of the aforementioned
may adversely affect the Fund’s performance or NAV.
Short
Sale Risks
The
Fund and Underlying Funds may sell securities short. Positions in shorted securities are speculative and more risky than long positions
(purchases) in securities because the maximum sustainable loss on a security purchased is limited to the amount paid for the security
plus the transaction costs, whereas there is no maximum attainable price of the shorted security. Therefore, in theory, securities sold
short have unlimited risk. Short selling will also result in higher transaction costs (such as interest and dividends), directly or indirectly
through the investments in Underlying Funds, and may result in higher taxes, which reduce the Fund’s return.
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Opportunities Fund, Inc.
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Regarding
the Fund
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July
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If
a security sold short increases in price, a fund may have to cover its short position at a higher price than the short sale price, resulting
in a loss. With respect to a fund’s short positions, the Fund must borrow those securities to make delivery to the buyer. A fund
may not be able to borrow a security that it needs to deliver or it may not be able to close out a short position at an acceptable price
and may have to sell related long positions before it had intended to do so. As a result, a fund may not be able to successfully implement
its short sale strategy due to the limited availability of desired securities or for other reasons.
When
borrowing a security for delivery to a buyer, a fund also may be required to pay a premium and other transaction costs, which would increase
the cost of the security sold short. A fund must normally repay to the lender an amount equal to any dividends or interest earned while
the loan is outstanding. The amount of any gain will be decreased, and the amount of any loss increased, by the amount of the premium,
dividends, interest or expenses a fund may be required to pay in connection with the short sale. Also, the lender of a security may terminate
the loan at a time when a fund is unable to borrow the same security for delivery. In that case, a fund would need to purchase a replacement
security at the then current market price or “buy in” by paying the lender an amount equal to the costs of purchasing the
security.
Until
a fund replaces a borrowed security, it is required to maintain a segregated account of cash or liquid assets to cover the fund’s
short position. Securities held in a segregated account cannot be sold while the position they are covering is outstanding, unless they
are replaced with similar securities. Additionally, a fund must maintain sufficient liquid assets (less any additional collateral held
by the broker), marked-to-market daily, to cover its short sale obligations. This may limit a fund’s investment flexibility, as
well as its ability to meet redemption requests or other current obligations.
In
addition, until a fund replaces a borrowed instrument, a fund may also be required to maintain short sale proceeds with the lending broker
as collateral. Moreover, a fund will be required to make margin payments to the lender during the term of the borrowing if the value
of the security it borrowed (and sold short) increases. Thus, short sales involve credit exposure to the broker that executes the short
sales. In the event of the bankruptcy or other similar insolvency with respect to a broker with whom a fund has an open short position,
a fund may be unable to recover, or delayed in recovering, any margin or other collateral held with or for the lending broker.
Because
a fund’s loss on a short sale arises from increases in the value of the security sold short, the loss is theoretically unlimited.
In certain cases, purchasing a security to cover a short position can itself cause the price of the security to rise further, which would
exacerbate the loss. Conversely, gains on short sales, after transaction and related costs, are generally the difference between the
price at which a fund sold the borrowed security and the price it paid to purchase the security for delivery to the buyer. By contrast,
a fund’s loss on a long position arises from decreases in the value of the security and is limited by the fact that a security’s
value cannot drop below zero.
By
investing the proceeds received from selling securities short, the Fund is using a form of leverage, which creates special risks. The
use of leverage may increase the Fund’s exposure to long equity positions and make any change in the Fund’s NAV greater
than it would be without the use of leverage. This could result in increased volatility of returns. There is no guarantee that the Fund
will
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Summary
of Updated Information
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RiverNorth
Opportunities Fund, Inc.
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Regarding
the Fund
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|
July
31, 2021 (Unaudited)
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leverage
its portfolio, or if it does, that the Fund’s leveraging strategy will be successful. The Fund also cannot guarantee that the
use of leverage will produce a higher return on an investment.
Special
Purpose Acquisition Companies Risks
The
Fund may invest in SPACs. SPACs are collective investment structures that pool funds in order to seek potential acquisition opportunities.
SPACs are generally publicly traded companies that raise funds through an initial public offering (“IPO”) for the purpose
of acquiring or merging with another company to be identified subsequent to the SPAC’s IPO. The securities of a SPAC are often
issued in “units” that include one share of common stock and one right or warrant (or partial right or warrant) conveying
the right to purchase additional shares or partial shares. Unless and until an acquisition is completed, a SPAC generally invests its
assets (less an amount to cover expenses) in U.S. Government securities, money market fund securities and cash. SPACs and similar entities
may be blank check companies with no operating history or ongoing business other than to seek a potential acquisition. Accordingly, the
value of their securities is particularly dependent on the ability of the entity’s management to identify and complete a profitable
acquisition. Certain SPACs may seek acquisitions only in limited industries or regions, which may increase the volatility of their prices.
If an acquisition or merger that meets the requirements for the SPAC is not completed within a predetermined period of time, the invested
funds are returned to the entity’s shareholders, less certain permitted expenses. Accordingly, any rights or warrants issued by
the SPAC will expire worthless. Certain private Investments in SPACs may be illiquid and/or be subject to restrictions on resale. Additionally,
the Fund may acquire certain private rights and other interests issued by a SPAC (commonly referred to as “founder shares”),
which may be subject to forfeiture or expire worthless and which typically have more limited liquidity than SPAC shares issued in an
IPO. To the extent the SPAC is invested in cash or similar securities, this may impact a Fund’s ability to meet its investment
objective.
Structured
Notes Risks
The
Underlying Funds may invest in structured notes. Structured notes are subject to a number of fixed income risks including general market
risk, interest rate risk, and the risk that the issuer on the note may fail to make interest and/or principal payments when due, or may
default on its obligations entirely. In addition, because the performance of structured notes tracks the performance of the underlying
debt obligation, structured notes generally are subject to more risk than investing in a simple note or bond issued by the same issuer.
It is impossible to predict whether the referenced factor (such as an index or interest rate) or prices of the underlying securities
will rise or fall. To the extent that an Underlying Fund invests in structured notes, the Underlying Fund may be more volatile than other
funds that do not invest in structured notes. The actual trading prices of structured notes may be significantly different from the principal
amount of the notes. If an Underlying Fund sells the structured notes prior to maturity, it may suffer a loss of principal. At final
maturity, structured notes may be redeemed in cash or in kind, which is at the discretion of the issuer. If the notes are redeemed in
kind, a fund would receive shares of stock at a depressed price. To the extent that a structured note is not principal-protected through
an insurance feature, the note’s principal will not be protected. In the case of a decrease in the value of the underlying asset,
an Underlying Fund would receive shares at a value less than the original amount invested; while an increase in the value of an underlying
asset will not increase the return on the note.
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Opportunities Fund, Inc.
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the Fund
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Swap
Risks
The
Fund and the Underlying Funds may enter into interest rate, index, total return and currency swap agreements. Swap agreements are two-party
contracts under which the fund and a counterparty, such as a broker or dealer, agree to exchange the returns (or differentials in rates
of return) earned or realized on an agreed-upon underlying asset or investment over the term of the swap. The use of swap transactions
is a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security
transactions. If the Subadviser or an Underlying Fund’s investment adviser is incorrect in its forecasts of default risks, market
spreads, liquidity or other applicable factors or events, the investment performance of the Fund or Underlying Fund would diminish compared
with what it would have been if these techniques were not used. Swaps and swap options can be used for a variety of purposes, including:
to manage fund exposure to changes in interest or foreign currency exchange rates and credit quality; as an efficient means of adjusting
fund overall exposure to certain markets; in an effort to enhance income or total return or protect the value of portfolio securities;
to serve as a cash management tool; and to adjust portfolio duration.
There
are risks in the use of swaps. Swaps could result in losses if interest or foreign currency exchange rates or credit quality changes
are not correctly anticipated. Total return swaps could result in losses if the reference index, security, or investments do not perform
as anticipated. Total return swaps involve an enhanced risk that the issuer or counterparty will fail to perform its contractual obligations.
Total return swaps may effectively add leverage to the Fund’s portfolio because the Fund would be subject to investment exposure
on the full notional amount of the swap. To the extent the Fund or an Underlying Fund enters into a total return swap on equity securities,
the Fund or the Underlying Fund will receive the positive performance of a notional amount of such securities underlying the total return
swap. In exchange, the Fund or the Underlying Fund will be obligated to pay the negative performance of such notional amount of securities.
Therefore, the Fund or the Underlying Fund assumes the risk of a substantial decrease in the market value of the equity securities. The
use of swaps may not always be successful; using them could lower fund total return, their prices can be highly volatile, and the potential
loss from the use of swaps can exceed the fund’s initial investment in such instruments. Also, the other party to a swap agreement
could default on its obligations or refuse to cash out the fund’s investment at a reasonable price, which could turn an expected
gain into a loss.
Currently,
certain categories of interest rate swaps are subject to mandatory clearing, and more are expected to be cleared in the future. The counterparty
risk for cleared derivatives is generally expected to be lower than for uncleared over-the-counter derivative transactions as each party
to a transaction looks only to the central clearing house for performance of obligations under the transaction. However, there can be
no assurance that a clearing house, or its members, will satisfy the clearing house’s obligations to the fund or that the fund’s
use of swaps will be advantageous.
Underlying
Fund Risks
The
Fund will invest in Underlying Funds such as other closed-end funds and ETFs. The expenses of the Fund will generally be higher than
the direct expenses of other fund shares. The Fund will indirectly bear fees and expenses charged by the Underlying Funds in which the
Fund invests in addition to the Fund’s direct fees and expenses. The Fund may also incur brokerage costs when it
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
purchases
shares of Underlying Funds. Furthermore, investments in Underlying Funds could affect the timing, amount and character of distributions
to Common Stockholders and therefore may increase the amount of taxes payable by investors in the Fund. The value of your investment
in the Fund will go up and down with the prices of Underlying Fund shares (and other securities) in which the Fund invests. Similarly,
the value of the Fund’s investments in Underlying Funds will go up and down with the prices of the securities in which the Underlying
Funds invest.
There
is also the risk that the Fund may suffer losses due to the investment practices or operations of the Underlying Funds. To the extent
that the Fund invests in one or more Underlying Funds that concentrate in a particular industry, the Fund would be vulnerable to factors
affecting that industry and the concentrating Underlying Funds’ performance, and that of the Fund, may be more volatile than Underlying
Funds that do not concentrate.
As
the Fund will invest at least 80% of its Managed Assets in Underlying Funds, the Fund’s performance will depend to a greater extent
on the overall performance of closed-end funds, ETFs, BDCs and SPACs generally, in addition to the performance of the specific Underlying
Funds (and other assets) in which the Fund invests. The use of leverage by Underlying Funds magnifies gains and losses on amounts invested
and increases the risks associated with investing in Underlying Funds. Further, the Underlying Funds are not subject to the Fund’s
investment policies and restrictions. The Fund generally receives information regarding the portfolio holdings of Underlying Funds only
when that information is made available to the public. The Fund cannot dictate how the Underlying Funds invest their assets. The Underlying
Funds may invest their assets in securities and other instruments, and may use investment techniques and strategies, that are not described
in this disclosure. Common Stockholders will bear two layers of fees and expenses with respect to the Fund’s investments in Underlying
Funds because each of the Fund and the Underlying Fund will charge fees and incur separate expenses. In addition, subject to applicable
1940 Act limitations, the Underlying Funds themselves may purchase securities issued by registered and unregistered funds (e.g., common
stock, preferred stock, auction rate preferred stock), and those investments would be subject to the risks associated with Underlying
Funds and unregistered funds (including a third layer of fees and expenses, i.e., the Underlying Fund will indirectly bear fees and expenses
charged by the funds in which the Underlying Fund invests, in addition to the Underlying Fund’s own fees and expenses). An Underlying
Fund with positive performance may indirectly receive a performance fee from the Fund, even when the Fund’s overall returns are
negative. Additionally, the Fund’s investment in an Underlying Fund may result in the Fund’s receipt of cash in excess
of the Underlying Fund’s earnings; if the Fund distributes these amounts, the distributions could constitute a return of capital
to Fund shareholders for federal income tax purposes. As a result of these factors, the use of the fund of funds structure by the Fund
could therefore affect the amount, timing and character of distributions to shareholders.
The
Fund may invest in shares of closed-end funds that are trading at a discount to NAV or at a premium to NAV and closed-end funds may not
be able to outperform their benchmarks. There can be no assurance that the market discount on shares of any closed-end fund purchased
by the Fund will ever decrease. In fact, it is possible that this market discount may increase and the Fund may suffer realized or unrealized
capital losses due to further decline in the market price of the securities of such closed-end funds, thereby adversely affecting the
Fund’s NAV. The Fund’s investment in the Common Shares of closed-end funds that are financially leveraged may create an
opportunity for greater total return on its investment, but at the same time may be expected to exhibit more
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Opportunities Fund, Inc.
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volatility
in market price and NAV than an investment in shares of investment companies without a leveraged capital structure.
The
Fund may invest in BDCs. BDCs generally invest in less mature U.S. private companies or thinly traded U.S. public companies which involve
greater risk than well-established publicly-traded companies. While BDCs are expected to generate income in the form of dividends, certain
BDCs during certain periods of time may not generate such income. The Fund will indirectly bear its proportionate share of any management
fees and other operating expenses incurred by the BDCs and of any performance-based or incentive fees payable by the BDCs in which it
invests, in addition to the expenses paid by the Fund. A BDC’s incentive fee may be very high, vary from year to year and be payable
even if the value of the BDC’s portfolio declines in a given time period. Incentive fees may create an incentive for a BDC’s
manager to make investments that are risky or more speculative than would be the case in the absence of such compensation arrangements,
and may also encourage the BDC’s manager to use leverage to increase the return on the BDC’s investments. The use of leverage
by BDCs magnifies gains and losses on amounts invested and increases the risks associated with investing in BDCs. A BDC may make investments
with a larger amount of risk of volatility and loss of principal than other investment options and may also be highly speculative and
aggressive.
The
1940 Act imposes certain constraints upon the operations of a BDC. For example, BDCs are required to invest at least 70% of their total
assets primarily in securities of U.S. private companies or thinly traded U.S. public companies, cash, cash equivalents, U.S. government
securities and high quality debt investments that mature in one year or less. Generally, little public information exists for private
and thinly traded companies in which a BDC may invest and there is a risk that investors may not be able to make a fully informed evaluation
of a BDC and its portfolio of investments. With respect to investments in debt instruments, there is a risk that the issuers of such
instruments may default on their payments or declare bankruptcy. Many debt investments in which a BDC may invest will not be rated by
a credit rating agency and will be below investment grade quality. These investments are commonly referred to as “junk bonds”
and have predominantly speculative characteristics with respect to an issuer’s capacity to make payments of interest and principal.
Although lower grade securities are potentially higher yielding, they are also characterized by high risk. In addition, the secondary
market for lower grade securities may be less liquid than that of higher rated securities. Certain BDCs may also be difficult to value
since many of the assets of BDCs do not have readily ascertainable market values.
Additionally,
a BDC may only incur indebtedness in amounts such that the BDC’s asset coverage ratio of total assets to total senior securities
equals at least 200% after such incurrence. These limitations on asset mix and leverage may affect the way that the BDC raises capital.
BDCs compete with other entities for the types of investments they make, and such entities are not necessarily subject to the same investment
constraints as BDCs.
Index-based
ETFs (and other index funds) in which the Fund may invest may not be able to replicate exactly the performance of the indices they track
or benchmark because the total return generated by the securities will be reduced by transaction costs incurred in adjusting the actual
balance of the securities. ETFs may trade at a price above (premium) or below (discount) their net asset value, especially during periods
of significant market volatility or stress, causing investors to pay significantly more or less than the value of the ETF’s underlying
portfolio. Certain ETFs traded on exchanges may be thinly traded and experience large spreads between the “ask” price quoted
by a
|
Summary
of Updated Information
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RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
seller
and the “bid” price offered by a buyer. While the creation/redemption feature is designed to make it likely that ETF shares
normally will trade close to their NAVs, market prices are not expected to correlate exactly to the shares’ NAVs due to timing
reasons, supply and demand imbalances and other factors. In addition, disruptions to creations and redemptions, adverse developments
impacting market makers, authorized participants or other market participants, high market volatility or lack of an active trading market
for an ETF’s shares (including through a trading halt) may result in market prices that differ significantly from its NAV or to
the intraday value of the ETF’s holdings. An active trading market for shares of an ETF may not develop or be maintained. When
all or a portion of an ETF’s underlying securities trade in a foreign market that is closed during the time the domestic market
in which the ETF’s shares are listed and traded is open, there may be changes between the last quote from the closed foreign market
and the value of such underlying security during the ETF’s trading day. In times of market stress, market makers or authorized
participants may step away from their respective roles in making a market in shares of the ETF and in executing purchase or redemption
orders. During such times, the ETF’s shares may trade at a wider than normal discount or premium and may possibly face trading
halts. Additionally, the underlying securities of an ETF may be traded outside of a collateralized settlement system, such as the National
Securities Clearing Corporation, a clearing agency that is registered with the SEC. There are a limited number of financial institutional
that may act as authorized participants that pose collateral for certain trades on an agency basis. To the extent that these authorized
participants exit the business or are unable to proceed with creation and/or redemption orders with the ETF, and no other authorized
participant is able to step forward, ETF shares may trade at a discount to net asset value and possibly face trading halts and/or delisting.
Additionally, in stressed market conditions, the market for ETF shares may become less liquid in response to deteriorating liquidity
in the markets for such ETF’s underlying portfolio holdings, this may cause the shares of the ETF to trade at a wider than normal
discount or premium. Furthermore, purchases and redemptions of creation units primarily in cash rather than in-kind may cause an ETF
to incur certain costs, such as brokerage costs, taxable gains or other losses that it may not have incurred with an in-kind purchase
or redemption. These costs may be borne by the ETF and decrease the ETF’s NAV to the extent they are not offset by a transaction
fee payable by an authorized participant.
In
addition, index-based ETFs (and other index funds) will incur expenses not incurred by their applicable indices. Certain securities comprising
the indices tracked by these investments may, from time to time, temporarily be unavailable, which may further impede the ability of
the index-based ETFs and other index funds to track their applicable indices. Underlying Funds may not be able to match or outperform
their respective benchmarks. With sector ETFs, there is a risk that securities within the same group of industries will decline in price
due to sector-specific market or economic developments. The Fund may also invest in actively managed ETFs that are subject to management
risk as the ETF’s investment adviser will apply certain investment techniques and risk analyses in making investment decisions.
There can be no guarantee that these will produce the desired results.
Certain
of the Underlying Funds in which the Fund will invest may be taxed as regulated investment companies under Subchapter M of the Code.
To qualify and remain eligible for the special tax treatment accorded to regulated investment companies and their shareholders, such
Underlying Funds must meet certain source-of-income, asset diversification and annual distribution requirements. If an Underlying Fund
in which the Fund invests fails to qualify as a regulated investment company, such Underlying Fund would be liable for federal, and possibly
state, corporate taxes on its taxable income and gains. Such failure by an Underlying Fund could
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Opportunities Fund, Inc.
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the Fund
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July
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substantially
reduce the Underlying Fund’s net assets and the amount of income available for distribution to the Fund, which would in turn decrease
the total return of the Fund in respect of such investment.
The
Fund’s investments in Underlying Funds may be limited by provisions of the 1940 Act, which generally limit the amount the Fund
and its affiliates can invest in any one Underlying Fund to 3% of the Underlying Fund’s outstanding voting stock. As a result,
the Fund may hold a smaller position in an Underlying Fund than if it were not subject to this restriction. In addition, to comply with
provisions of the 1940 Act, in any matter upon which Underlying Fund stockholders are solicited to vote, the Subadviser may be required
to vote Underlying Fund shares in the same proportion as shares held by other stockholders of the Underlying Fund. However, pursuant
to exemptive orders issued by the SEC to various ETF sponsors, the Fund is permitted to invest in such Underlying Funds in excess of
the limits set forth in the 1940 Act subject to certain terms and conditions set forth in such exemptive orders.
Warrant
Risks
The
Fund and the Underlying Funds may invest in warrants. Warrants are securities giving the holder the right, but not the obligation, to
buy the stock of an issuer at a given price (generally higher than the value of the stock at the time of issuance) during a specified
period or perpetually. Warrants do not carry with them the right to dividends or voting rights with respect to the securities that they
entitle their holder to purchase and they do not represent any rights in the assets of the issuer. The value of a warrant does not necessarily
change with the value of the underlying securities and a warrant ceases to have value if it is not exercised prior to its expiration
date.
Investment
Restrictions
Except
as otherwise indicated, the Fund’s investment policies are not fundamental and may be changed without a vote of shareholders.
There can be no assurance the Fund’s investment objective will be met.
Any
investment restrictions herein that involve a maximum percentage of securities or assets shall not be considered to be violated unless
an excess over the percentage occurs immediately after and is caused by an acquisition or encumbrance of securities or assets of, or
borrowings by, the Fund.
As
a matter of fundamental policy, the Fund will not:
|
(1)
|
borrow
money, except as permitted under the 1940 Act, and as interpreted or modified by regulatory authority
having jurisdiction, from time to time;
|
|
(2)
|
issue
senior securities, except as permitted under the 1940 Act and as interpreted or modified by regulatory
authority having jurisdiction, from time to time;
|
|
(3)
|
concentrate
its investments in a particular industry or group of industries (as the term “concentrate”
is used in the 1940 Act, as interpreted or modified by regulatory authority having jurisdiction, from
time to time), except to the extent that Underlying Funds in which the Fund invests concentrate their
investments in a particular industry or group of industries;
|
|
Summary
of Updated Information
|
RiverNorth
Opportunities Fund, Inc.
|
Regarding
the Fund
|
|
July
31, 2021 (Unaudited)
|
|
(4)
|
engage
in the business of underwriting securities issued by others, except to the extent that the Fund may be
deemed to be an underwriter in connection with the disposition of portfolio securities;
|
|
(5)
|
purchase
or sell real estate, which term does not include securities of companies which deal in real estate or
mortgages or investments secured by real estate or interests therein, except that the Fund reserves freedom
of action to hold and to sell real estate acquired as a result of the Fund’s ownership of securities;
|
|
(6)
|
purchase
or sell commodities, unless acquired as a result of ownership of securities or other instruments; provided
that this restriction shall not prohibit the Fund from purchasing or selling options, future contracts
and related options thereon, forward contracts, swaps, caps, floors collars and any other financial instruments
or from investing in securities or other instruments backed by physical commodities or as otherwise permitted
by the 1940 Act and as interpreted or modified by regulatory authority having jurisdiction, from time
to time, or an exemption or other relief applicable to the Fund from the provisions of the 1940 Act,
as amended from time to time;
|
|
(7)
|
With
respect to 75% of the Fund’s total assets, purchase the securities of any issuer (except obligations
of the United States Government and its instrumentalities and securities of other investment companies)
if, as a result, (a) more than 5% of the Fund’s total assets would be invested in the securities
of that issuer, or (b) the Fund would hold more than 10% of the outstanding voting securities of that
issuer; or
|
|
(8)
|
make
loans except as permitted under the 1940 Act and as interpreted or modified by regulatory authority having
jurisdiction, from time to time.
|
A
fundamental policy may not be changed without the approval of a majority of the outstanding voting securities of the Fund which, under
the 1940 Act and the rules thereunder and as used in this SAI, means the lesser of (1) 67% or more of the voting securities present at
such meeting, if the holders of more than 50% of the outstanding voting securities of the Fund are present or represented by proxy, or
(2) more than 50% of the outstanding voting securities of the Fund.
Portfolio
Manager Information
Since
the prior disclosure date, there have been no changes in the Fund’s portfolio managers or background.
Fund
Organizational Structure
Since
the prior disclosure date, there have been no changes in the Fund’s charter or by-laws that would delay or prevent a change of
control of the Fund that have not been approved by stockholders.
Annual
Report | July 31, 2021
|
89
|
RiverNorth
Opportunities Fund, Inc.
|
Data
Privacy Policies and Procedures
|
FACTS
|
WHAT
DOES RIVERNORTH OPPORTUNITIES FUND DO WITH YOUR PERSONAL INFORMATION?
|
WHY?
|
Financial
companies choose how they share your personal information. Federal law gives consumers the right to limit some but not all sharing.
Federal law also requires us to tell you how we collect, share, and protect your personal information. Please read this notice carefully
to understand what we do.
|
WHAT?
|
The types of
personal information we collect and share depend on the product or service you have with us. This information can include:
|
|
● Social
Security number
● Assets
● Retirement
Assets
● Transaction
History
● Checking
Account Information
|
● Purchase
History
● Account
Balances
● Account
Transactions
● Wire
Transfer Instructions
|
|
When
you are no longer our customer, we continue to share your information as described in this notice.
|
HOW?
|
All
financial companies need to share customers’ personal information to run their everyday business. In the section below, we
list the reasons financial companies can share their customers’ personal information; the reasons RiverNorth Opportunities
Fund chooses to share; and whether you can limit this sharing.
|
REASONS
WE CAN SHARE YOUR
PERSONAL
INFORMATION
|
DOES
RIVERNORTH
OPPORTUNITIES
INCOME
FUND
SHARE?
|
CAN
YOU
LIMIT
THIS
SHARING?
|
For
our everyday business purposes – such as to process your transactions, maintain your account(s), respond to court orders
and legal investigations, or report to credit bureaus
|
Yes
|
No
|
For
our marketing purposes – to offer our products and services to you
|
No
|
We
don’t share
|
For
joint marketing with other financial companies
|
No
|
We
don’t share
|
For
our affiliates’ everyday business purposes –
information about your transactions and experiences
|
No
|
We
don’t share
|
For
our affiliates’ everyday business purposes –
information about your creditworthiness
|
No
|
We
don’t share
|
For
nonaffiliates to market to you
|
No
|
We
don’t share
|
QUESTIONS?
|
Call
1-855-838-9485
|
|
|
RiverNorth
Opportunities Fund, Inc.
|
Data
Privacy Policies and Procedures
|
WHO
WE ARE
|
|
|
Who
is providing this notice?
|
RiverNorth
Opportunities Fund
|
WHAT
WE DO
|
|
|
How
does RiverNorth Opportunities Fund protect my personal information?
|
To
protect your personal information from unauthorized access and use, we use security
measures that comply with federal law. These measures include computer safeguards and
secured files and buildings.
|
Our
service providers are held accountable for adhering to strict policies and procedures
to prevent any misuse of your nonpublic personal information.
|
How
does RiverNorth Opportunities Fund collect my personal information?
|
We
collect your personal information, for example, when you
|
●
|
Open
an account
|
●
|
Provide
account information
|
●
|
Give
us your contact information
|
●
|
Make
deposits or withdrawals from your account
|
●
|
Make
a wire transfer
|
●
|
Tell
us where to send the money
|
●
|
Tells
us who receives the money
|
●
|
Show
your government-issued ID
|
●
|
Show
your driver’s license
|
We
also collect your personal information from other companies.
|
|
Federal
law gives you the right to limit only:
|
|
●
|
Sharing
for affiliates’ everyday business purposes – information about your creditworthiness
|
Why
can’t I limit all sharing?
|
●
|
Affiliates
from using your information to market to you
|
|
●
|
Sharing
for nonaffiliates to market to you
|
|
State
laws and individual companies may give you additional rights to limit sharing.
|
DEFINITIONS
|
|
|
Affiliates
|
Companies
related by common ownership or control. They can be financial and nonfinancial companies.
|
●
|
RiverNorth
Opportunities Fund does not share with our affiliates for marketing purposes.
|
Nonaffiliates
|
Companies
not related by common ownership or control. They can be financial and nonfinancial companies.
|
●
|
RiverNorth
Opportunities Fund does not share with nonaffiliates so they can market to you.
|
Joint
marketing
|
A
formal agreement between nonaffiliated financial companies that together market financial
products or services to you.
|
●
|
RiverNorth
Opportunities Fund does not jointly market.
|
Annual
Report | July 31, 2021
|
91
|
|
|
RiverNorth
Capital Management, LLC
|
ALPS
Advisors, Inc.
|
325
N. LaSalle Street, Suite 645
|
1290
Broadway, Suite 1000
|
Chicago,
IL 60654
|
Denver,
CO 80203
|
Secondary
market support provided to the Fund by ALPS Advisors Inc.’s affiliate, ALPS Portfolio Solutions Distributor, Inc., a FINRA member.
(b)
Not applicable.