I love the word syndicate, there's nothing wrong with it of course...but whenever I hear or read it I think of organized crime.  Regardless of the word though when it comes to Resverlogix and this syndicate of lenders, a reasonable question I think is who has the leverage...the hammer. 

At first glance, especially when the loan was first announced, it appeared that the situation was tilted heavily toward the lenders.  After all the loan didn't come cheap with a 10% interest rate, plus entry/exit fees totalling another $1.5 million and 3 year warrants priced at $1.77 to boot.  

And then of course came the kicker...the loan was secured agains basically all of Resverlogix's intellectual property and assets, including Apabetalone.  Then of course there were the disclosed covenants, the breaching of which could cause the lenders to call the loan.  Not an ideal situation it seemed at the time...but as some remarked back in May of 2018....desperate times call for desperate measures, or put another way, beggars can't be choosers.

Now though we're more than a year into the loan agreement, one that was supposed to expire in May that has now been extended with the possibility of another extension looming.  Resverlogix failed to meet one covenant when they didn't have TPL out by Jan 31st 2019, and with the most recent financial and MD&A we now know that the requirement to use half of all proceeds from cash raises to pay down the loan, that this covenant has be waived at least once....and that other covenants could be waived as well.

Some have opined that perhaps calling the loan and seizing Resverlogix's assets would be too problematic and messy....I've seen at least a couple messages inferring it might involve legal proceedings.  Maybe that's true...I don't know.

But when it comes to who has the hammer, Resverlogix or the lenders.....who's under the most pressure in other words, rather than either the lenders or Resverlogix I considered another poossibility....that the real hammer is hanging over shareholders, wrestling with the details of the loan and the requirements.  IMO it certainly presented at least the perception of uncertainty....although now seeing that the lenders have waived provisions of the loan before and may do so again, I think a good measure of that uncertainty is being lifted.  After all, it seems that if this syndicate of lenders wanted to foreclose on the loan they could have instructed their Agent Third Eye to do that a while ago....

Fun times in any case....and now we have the August 4th deadline to look forward to, its almost like the old Batman TV shows.

How will our caped heros escape this situation?  Tune in for the next episode, same Resverlogix time, same Resverlogix channel: