Bubae
16 hours ago
Lets break down what you call Shawn Leon' "good money" Looks like the Leons needed to acquire more than 50% of Ethema Health for voting control because they need to make some moves here to protect what they call "friendly debt" held by themselves and these series "N" and now "R" note holders. So Shawn Leon takes the debt owed to him and Leon Developments by the company and writes himself a Regulation "D" offering for $1.5 million. Where did this debt owed to Shawn Leon come from? He is claiming the $420K is accrued management fees citing an agreement with Addiction Recovery of America (ARIA) which Shawn Leon took for himself in December 2022 for $0. In the 2023 deal to hand over Cranberry Cove, the holding company for the Canadian to Leonite for debt owed Shawn Leon was awarded "approximately $185,503" in so called accrued management fees. That is $605,503 in management fees. Yet what we see owed to Leon Developments jumped $242K from the end of 2022 to the end of Q2 2023. The balance of the debt owed to Leon Development comes from the sale of assets to Ethema Health by Leon Developments back in 2017.
The Leons use a couple of regulation "D" offerings to move the debt owed them to equity ownership priced at only $0.0005 a share giving them more than 52% ownership. That $0.0005 price exemption for these insiders was carved out in the Leonite warrant exchange agreement in 2023. I have many questions about this including the use of the regulation "D" offering for unregistered shares which is normally used to raise new capital. Questions about management fees which is income being converted full value to equity when there should have been tax consequences. The conversion of debt owed from the sale of the Canadian assets to Ethema Health which should have also had tax consequences at least in Canada. The awarding of management fees to Shawn Leon after years of filings stating that such fees were were "forfeited". Very sloppy, waiting to see if the Leons are going to compound the problems by acting on their majority ownership to the detriment of existing shareholders. Hey, this is only the cliff notes version, this whole deal is layered for a reason and sloppy in my opinion. Take a look at the title of Exhibit 10.02 of the July 2023 8K. It is titled " Management Agreement Completed July 10, 2024'" it is actually the regulation "D" securities purchase agreement.Shawn Leon is not gonna put his good money into a bad company, he's smarter than that!
https://www.otcmarkets.com/filing/html?id=17679613&guid=aoL-kKMwM2vCJth#ex10_2_htm
SECURITIES PURCHASE AGREEMENT
NOW THEREFORE, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree as follows:
b. Form of Payment. The Buyer agrees to convert $1,500,000.00 in principle of an amount outstanding from the Company to the Buyer for advances to the Company over a period of time between 2017 and 2024 and management fees.
Bubae
Re: pual post# 51205
Sunday, September 08, 2024 10:28:13 AM
Post# 51209 of 51307
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175050042&txt2find=series%2Bnotes
Some of the series "N" notes "friendly debt" was reworked in Q1 using newly created series "R" notes. Looks like one note holder exited with interest while others paid interest from these notes. Excerpts below full text in on page 24 of the filing. The previously defaulted series "N" notes have new expiration dates of December 2024 and December 2025. The series "N: balance as of June 30th $3,701,846 down from $4,228,161 as of December 31st 2023, chart page 17 of Q2 filing. Add in the new series "R" notes totaling $1,081,578 as of June 30th, page 18, we have a new total $4,783,424 of so called "friendly debt".Bubae
Re: janetcanada post# 50744
Wednesday, July 31, 2024 10:48:11 AM
Post# 50749 of 50826
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174841515&txt2find=management%2Bfees
Filings going back years state that management fees were forfeited. The language is pretty unambiguous concerning this subject in the filings. Looks to me like he is trying to take the $420K as part of the conversions to acquire more than a 52% stake in this to take the sting out of it. They must believe that they need controlling interest to work the plan. That plan is in the interest of those who held more than $7 million in what Shawn Leon calls "friendly debt".For the quarterly period ended June 30, 2023
https://www.otcmarkets.com/filing/html?id=16878947&guid=aoL-kKMwM2vCJth
14. Related party transactions
Shawn E. Leon
As of June 30, 2023 and December 31, 2022, the Company had a payable to Shawn Leon of $365,126 and $411,611, respectively. Mr. Leon is a director and CEO of the Company. The balances payable are non-interest bearing and have no fixed repayment terms.
On December 30, 2022, the Company sold its wholly-owned subsidiaries, Greenestone Muskoka and ARIA, to Mr. Leon for gross proceeds of $0. The Company realized a gain on disposal of $628,567 which was recorded as an increase in Additional Paid in Capital due to the related party nature of the transaction.
Due to the current financial position of the Group, Mr. Leon forfeited the management fees due to him for the six months ended June 30, 2023 and the year ended December 31, 2022.
Leon Developments, Ltd.
Leon Developments is owned by Shawn Leon, the Company’s CEO and director. As of June 30, 2023 and December 31, 2022, the Company owed Leon Developments, Ltd., $1,092,701 and $850,607, respectively.
The Company paid Leon Developments a management fee of CDN$250,000 (approximately $185,503) and $0 for the six months ended June 30, 2023 and 2022, respectively.
On June 30, 2023, the Company assumed the liability owing to Leon developments of CDN$1,974,012 (approximately $1,490,946) from its subsidiary, CCH, immediately prior to the disposal of CCH to a related party, Leonite Capital LLC.
Bubae
2 days ago
Have to quit listening to Shawn Leon, the year over year numbers tell the real story. The cash burn consequences from the crazy property purchase, sale, leaseback deal of August 2023 finally showed up in the Q1 and Q2 numbers to cover what was $2.3 million in mostly defaulted debt. The Evernia treatment center is fine, they have a separate lease agreement with Ethema Health. That is the business model, the debt and liabilities to get the treatment center up and running belong to Ethema Health shareholders. They keep the treatment center balance sheet clean in secure the new debt. If things go sideways these lenders will walk away with the treatment center operations used to secure the new debt.
More consequences to come with the crazy property, purchase, sale, leaseback deal of August 2023. That base payment increases 2.75% a year on the August anniversary date and the leaseback company covered themselves against inflation by tying the payment to the annual CPI. The expensive promotion for Q2 to sell the regulation "A" offering failed. Now Shawn Leon is trying to find a way to do another property purchase, sale, lease back deal to cover the new very short term debt he took on already for 2024. There is a $600K note that matures on November 15th with some nasty default terms to include ownership of 25% of ATHI direct shares, the holding company for the treatment center. Ethema just did a ridiculous deal in Q1 with Lawrence Hawkins for $1.1 million for his 25%. Yeah, they are still trying to buy the Evernia treatment center that they financed beginning in 2020. 🙄
August 4th 2023 Lease Agreement
https://www.otcmarkets.com/filing/html?id=16855888&guid=iEN-kF378EVAB3h#ex10_6_htm
For the quarterly period ended June 30, 2024
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000792935/000190359624000535/grst_10q.htm
Page 29 and 30
For the six months ended June 30, 2024 and June 30, 2023.
Revenues
Revenues were $2,790,200 and $2,866,005 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $75,805 or 2.6%...
Operating Expenses
Operating expenses were $3,296,785 and $2,758,833 for the six months ended June 30, 2024 and 2023, respectively, an increase of $537,952 or 19.5%. The increase is primarily due to the following:...
Rent expense was $539,263 and $220,497 for the six months ended June 30, 2024 and 2023, respectively, an increase of $318,766 or 144.6%. The increase is primarily due to the acquisition of the Evernia property and the subsequent sale of property at an increased value with the simultaneous entry into a new 20-year lease agreement. The rental increased significantly by $203,412 over the period and the rental smoothing adjustment in terms of US GAAP over the life of the lease added an additional $115,354 to the current period charge.
Operating (loss) income
The operating loss was $(506,585) and the operating income was $107,172 for the six months ended June 30, 2024 and 2023, respectively, an increase of $613,757 or 572.7%.
Page 32
Over the next twelve months we estimate that the company will require approximately $3.5 million for working capital and to repay existing short-term notes as the business continues to develop its rehab business in the US market. The Company has convertible notes, short term loans and promissory notes which will mature or have already matured during the current year and may have to raise equity or secure debt. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, the Company’s liquidity risk is assessed as high due to this uncertainty.
Bubae
3 days ago
Ethema Health was bankrupt and done in 2023 Paul. I was absolutely correct that the business was bankrupt. The Leons had to personally guarantee the the crazy property purchase, sale, leaseback deal of August 2023 to bail it out. They refinanced that $2.3 million in mostly defaulted debt into a lease liability of more than $9 million, more than $19 million over the 20 year term. Leonite held a note that refinanced defaulted debt the previous year secured by all assets of ATHI the holding company for the treatment centers and Ethema Health which finally forced their hand. Now Shawn Leon has so badly fumbled the regulation "A" offering and taken out a couple of more million in debt in 2024 that he claims to be trying another property purchase, sale, leaseback deal with the Edgewater properties. Think the Leons have enough on their personal ledger to underwrite another disaster? 😆
Now it would appear that these people are fools but I would like someone with the means to follow the cash. Millions of Ethema Health cash has went into the Evernia treatment center and now Shawn Leon is paying Lawrence Hawkins $1.1 million for the last 25%. No way should that be possible in my opinion given what Shawn Leon bought into in 2020 which was really nothing of a treatment center. Go to 9:00 in the January podcast linked below where Shawn Leon is talking about the Evernia treatment center purchase negotiated 51% ownership for zero dollars in return for financing to open the new facility. Compare the millions that went into Evernia to the $240K for the hard assets and a lease that they just took over the Boca treatment center for with roughly half the beds of Evernia. Now Ethema Health went from a slight cash flow positive position in 2023 when they weren't paying on that defaulted debt to one of a serious quarterly cash burn because now they must pay. OTC retail traders aren't bailing out the Leons and their so called "friendly debt holders" anymore. In any case, according to your smart analysises, comments and repetitions, this company should have died at least a dozen times (conservatively) within the last 3 years.
Bubae
Member Level
Re: janetcanada post# 51157
Tuesday, September 03, 2024 6:18:11 AM
Post# 51159 of 51298
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=175023681&txt2find=guaranty
The company failed in 2023 in my opinion. Shawn Leon had to do the property purchase, sale, leaseback scheme to cover the $2.3 in mostly defaulted debt. Now they are financing not only the debt over 20 years but also the $5.5 million property price and the nearly $1 million in fees. That deal was personally guarnteed by both Shawn Leon, and his spouse Eileen Greene, by Ethema Health and ATHI, the holding company for the treatment centers.
Bubae
Re: Welcome2Pinkyland post# 50921
Wednesday, August 14, 2024 9:16:24 AM
Post# 50922 of 51298
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=174917110&txt2find=lease%2Bback
They have been funding this Evernia treatment center for four years now and they still can't say Ethema Health shareholders own the operation and will never own the property even after paying for it. Ethema Health has taken on the debt and funded the build out of the treatment center and still are paying out Lawrence Hawkins with $1.1 million for the last 25%. That makes no sense if you know the history here. The man has already made a small fortune off of this.
pual
3 days ago
In any case, according to your smart analysises, comments and repetitions, this company should have died at least a dozen times (conservatively) within the last 3 years. Since it has not, maybe, just maybe, you are not as smart as you want to believe you are and\or are blinded by your obvious motivation to attack Leon, God knows why.
Given time, you may finally see failure of the company and brag that you said it (50%) but you may also look even more stupid if Leon pulls out of his financial miseries (50%)..
Till then, you are just a big mouth continuously expressing your anger whatever the selected links you quote show ... or not.
Bottom line, you know as much as we all do and only can quote what Leon reported or said, picking and chosing the facts that fit your agenda.
Trade smarter, not harder: Unleash your inner pro with our toolkit and live discussions.
Ask ADVFN Intelligence (AI)
loanshark007
4 days ago
declaes
4 days ago
xqsme_imnew
1 week ago
Hot Features
Premium
