Monday, October 14, 2024 10:48:34 AM
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.
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
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
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.
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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