DionyMed Brands (CSE: DYME) announced this morning that they have been served with a notice of default by GLAS America and GLAS USA in connection with an outstanding secured debt of over US$24.8 million. The news of the notice of default comes following yesterday’s news of the resignation of CEO Edward Fields and interim COO Mark Zinselmeier.
Subsequently with the notice of default, DionyMed was service with a Notice of Intention to Enforce Security. After a ten day waiting period, GLAS USA will have the right to enforce its security by acquiring assets from the issuer.
DionyMed Brands is currently working towards achieving a resolution with the lender, however its questionable whether the lender will be willing to negotiate with the firm. DionyMed also acknowledged that the situation will likely negatively impact shareholders, stating, “holders of the Company’s shares may face a loss of their investment as a result of a failure to reach a solution with the lender or as a result of a failure to reach a solution that includes holders of shares.”
DionyMed, following the acquisition of assets by the lender, will become one of the first public Canadian cannabis firms to have its assets secured by a lender following a default on a loan. However, they are not alone in the space as loan default becomes more common in the sector, largely a result of capital drying up. Curative Cannabis, an Ontario based operation, recently had Auxly Cannabis call its debts in a similar fashion.
DionyMed Brands last traded at a price of $0.095 on the Canadian Securities Exchange. The equity is currently halted by IIROC.
Information for this briefing was found via Sedar and DionyMed Brands. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
