Medly Health has defaulted on $12 million DIP facility, lender says

By Sarah Lizee

Olympia, Wash., Jan. 5 – Medly Health Inc. has defaulted on a $12 million debtor-in-possession facility with prepetition secured lender TriplePoint Venture Growth BDC Corp., the lender said in documents filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The lender said one or more events of default have occurred, including as a result of the debtors’ failure to sell, assign or transfer all Medly prescription files for cash, on terms reasonably acceptable to the DIP agent on or before Dec. 30.

TriplePoint said the debtor isn’t able to satisfy the draw conditions under the DIP facility, and as such the lenders aren’t obligated to make any DIP loans.

However, the lenders said they would advance $400,000 to Medly on Jan. 4 without any waiver of rights or remedies with respect to the existing events of default or the borrower’s failure to satisfy the draw conditions as of Jan. 4.

So long as the existing events of default are continuing, any further draws under the DIP facility will only be made with prior written consent from the DIP lenders.

As previously reported, the company had received interim court approval of $4 million of the facility.

Interest is equal to the U.S. Prime rate plus 900 basis points. Default interest would be an additional 500 bps. The loan is set to mature on Feb. 11, 2023.

The Boulder-based pharmacy company filed Chapter 11 bankruptcy on Dec. 9 under case number 22-11257.

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