Monday, August 12, 2024 10:30:08 PM
Their ability to continue borrow is running into problems as evidenced by the expensive short term loans taken in Q1. They managed to buy some time in 2023 with the crazy and expensive property purchase, sale, and leaseback scheme which put both Shawn Leon and his spouse Eileen Greene on the hook for a more than $9 million operating lease agreement. There are certain “personal guaranty metrics” under this lease that must be met to relieve them of this personal debt guaranty. Those are detailed below, the largest hurdle appears to be the $5 million of unrestricted cash.
August 11 2023 8K
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000792935/000190359623000607/grst_8k.htm
10.6 Pontus EHC Palm Beach, LLC Lease
https://www.sec.gov/Archives/edgar/data/792935/000190359623000607/ex10_6.htm
Guaranty of Lease
Page 03
1.5 Guarantor. The term “Guarantor” means (1) American Treatment Holdings Inc, a Florida company, (2) Evernia Health Center LLC, a Florida limited liability company, and (3) Shawn Leon, personally (the “Personal Guarantor”); provided so long as (i) Tenant is not in default under this lease, (ii) The tenant does not have any debt or financial obligations with any affiliate or shareholder of tenant, and,(iii) (a) Tenant generates unadjusted EBITDA greater than $9.0 million a year on a calendar year basis, as confirmed by audited financials. (iii) (b) Tenant maintains a total debt to EBITDA ratio of 3.0x or less on a calendar year basis, as confirmed by audited financials, and (iii) (c) Tenant has greater than $5.0 million of unrestricted cash on hand, as confirmed by audited financials. (collectively, (a), (b), and (c) the “Personal Guaranty Metrics”), Then following the (5) year anniversary of the Effective Date, the Personal Guarantor shall be released under the Guaranty. The Personal Guaranty Metrics shall be tested annually commencing on December 31, 2028. The forms of Guaranty are attached as Exhibit C to this lease. (collectively, The “Guaranty”).
See Exhibit “C” Personal Guaranty of Lease beginning on page 54 of document 10.6 Pontus EHC Palm Beach, LLC Lease
Everything that I post is just my informed opinion and is simply an invitation to debate. Trade on your own due diligence please..
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