DionyMed Brands Inc. (CSE: DYME)(OTCQB: DYMEF) on Wednesday announced that the company’s CEO Edward Fields and Mark Zinselmeier, the company’s Interim COO, have both resigned effective immediately. Mr. Fields also resigned as a director of the Company and as an officer of the subsidiaries of the Company.
Today, it told the public that GLAS USA LLC, as administrative agent and GLAS America LLC as collateral agent under the Company’s credit agreement dated January 16, 2019, provided the company with notice of default under the Credit Agreement and demand for immediate payment of the amount of $24,810,682.80 plus any additional interest, fees and expenses. GLAS America also concurrently provided the company with a Notice of Intention to Enforce Security under section 244 of the Bankruptcy and Insolvency Act (Canada).
DionyMed said it was reviewing and considering the Demand Notice and BIA Notice and its options. “At present, there can be no assurance as to what, if any, alternatives might be pursued by the Company and there can be no assurance that the Company will reach any solution with the Company’s lender, or as to the terms of any such solution, if achieved. 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.”
This follows two lawsuits filed against the company. One from Eaze, who decided to fight back after Dionymed claimed that Eaze’s processing procedure didn’t meet California regulatory requirements. The company said it was going to invest in its own delivery service called “Chill.” DionyMed through its dispensary store Hometown Hearts claimed that Eaze was using shell accounts to create fraudulent charges and payment processing, which was the excuse it needed to terminate a three-year contract.
Then on September 23, Flow Capital began legal proceedings against Dionymed saying they were in default under the company’s royalty agreement. The claim is for the minimum sum of $2,698,116 which is made up of the investment balance, past due royalty payments and late payment fees. The company’s investment in DionyMed is $1,000,000 and there can be no assurance that the Company will recover any portion of its investment.
Just last month, Dionymed announced an additional investment from its senior secured investor of $3.2MM and a reorganization of the business to right-size the company. “This increases the credit facility with the senior lender to US$19.2 MM. The credit facility bears interest at LIBOR (at a floor of 2.5%) plus 12% plus an anniversary fee of 2.5%, maturing February 6, 2021. While the credit facility is currently in default, the senior lender has agreed to make additional advances to the Company.”