Ayr Wellness provides update on receipt of notice of disposition of collateral

AYR Wellness (AYRWF) has received a Notification of Disposition of Collateral from Anthony DePaul, as Agent and Secured Party under the Pledge Agreement dated as of October 1, 2021 between CSAC Acquisition PA II Corp., a subsidiary of the Company, and the Agent. Separately, the Company announces that it has entered into an additional amendment to the previously disclosed Limited Waiver Agreement dated June 6, as amended on June 19. The Notice alleges that due to certain purported defaults under the Pledge Agreement and related loan documents, the Agent intends to potentially reclaim ownership of and subsequently sell all of CSAC Acquisition PA II Corp.’s interest in and to all of the equity interests in PA Natural Medicine owned by CSAC Acquisition PA II Corp. PA Natural Medicine operates licensed medical cannabis dispensaries in State College, Bloomsburg, and Selinsgrove, Pennsylvania. The Company is considering the Notice, exploring all of its options in response to the Notice and is prepared to take any steps it determines to be appropriate in the circumstances. The Second Amendment formally extends the temporary waiver period provided under the Original Agreement to July 11, after it was extended by the First Amendment to July 3. As previously disclosed, under the Original Agreement, the holders of a majority of AYR’s senior secured notes provided a waiver of certain events of default related to the Company’s delay in filing its interim financial statements for the quarter ended March 31, as well as specific payment defaults that may occur under AYR’s other outstanding indebtedness. This waiver temporarily restrains the Majority Holders from exercising their default-related rights and remedies with respect to those specified defaults, subject to the terms and conditions in the Original Agreement. By further extending the waiver period, the Second Amendment grants the Company additional time and flexibility to continue ongoing negotiations with its senior lenders and to further pursue strategic options to strengthen its capital structure.