I would think some kind of acquisition or another start-up would be in the mix but that takes capital that is not easy to come by these days. The offering is primarily for retiring debt but I can see a path forward where they go ahead and exchange what they actually own for debt.
If the "Security and Pledge Agreement" was available that was supposed to be attached to the June Leonite note we would have a better idea of how they will be working through the debt situation. All we know if that the note is secured by all of the assets of Ethema Health Corporation and Addiction Recovery Institute of America, LLC.
They could let the Canadian property go or sell it since its unlikely that they can get the mortgage refinanced. They then could claim to have paid off debt to the tune of the $3.8 million mortgage and the $700K owed to Leonite against the property. But this would mean that they would be disposing of their best performing asset. Then further claim debt reduction by handing over the remaining assets to Leonite for the June Note.
It would seem to me that what the company wants now is a share structure fix and a new narrative from which to sell shares. All they had when current story started three years ago was a fairly low outstanding share count and a start-up story after they closed their previous treatment center. They sold a lot of shares that has translated into shareholder losses since then. They need a wash and repeat if they want to continue as a going concern.
...The obligations of the Borrower under this Note are secured pursuant to the terms of the security and pledge agreement (The "Security and Pledge Agreement" and collectively the Purchase Agreement, the "Related Documents"...
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