Shawn Leon just finds new ways to refinance the debt, not pay it. Had he and his wife had not entered into personal guarantee contracts to back the crazy refinance deal to cover the defaulted notes last year they would have been out of business. Details in post #48824 The Leons were owed more than $2.5 million and The series "N" notes, were also in default, was more than $4 million at that time. That Leonite debt was secured by all assets of the company so they had to do something drastic as to not lose their stake in the treatment center. Those series "N" notes represents those close to the Leons which now have a new maturity date of December 2024.
Now the company is at another inflection point with Shawn Leon borrowing a couple million more of nasty short term debt to buy this latest narrative. Details for that debt is detailed in post# 50341. They lost the cash flow last year with the handing over of the Canadian property to Leonite for debt. Now they must pay monthly on the refinance deal where as before they were paying nothing on the defaulted debt. Cash flow has become a serious problem from what I see.
That is correct, the stock has been absolutely worthless to the company in terms of conversions and raising any capital so Shawn just continued to borrow to the point where the debt was, and is, in default. How desperate do you have to be to sign off on a deal for $2.3 million in net proceeds that was saddled with what appears to be nearly $1 million in fees alone. ($520,627.60 + $180,000 + $260,548 = $961,175) Now finance that and the $5.5 million for the treatment center over 20 years and end up owning nothing.
It is crazy that Ethema Health (GRST) shareholders poured so much money into this treatment center financed with toxic debt only to have to buy it all over again! The only business that can do things like this are those that can print shares which inevitably is paid for by shareholder losses. Right now this company is sitting on worthless shares so what will they do to fix the narrative and share structure is the question. Do they further con existing shareholders for new conversions at this price level? It happened before, right?
Because Leon could pull the plug anytime on 1 hand or solve the debt issue somehow on the other hand. At current pps (MV) if I was more positive I would add to my position but if I was thinking of the negative potential only I would sellout. Right now I've placed my bet and will wait till the wheel stop spinning.
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