v3.26.1
Subsequent events
 12 Months Ended
Dec. 31, 2025
Subsequent Events [Abstract]  
Subsequent events

  

  24. Subsequent events

 

Bank funding

On January 8, 2026, the Company, through its subsidiary Evernia, entered into a $1,600,000 loan and security agreement with a bank to repay certain liabilities of the Company, the loan is guaranteed by the Company and the Company’s CEO, Mr. Leon. The maturity date of the loan is January 8, 2031and bears interest at a fixed rate of 7.75%, unless the loan is in default whereby the default rate of prime plus 6% or 12%, whichever is the greater, will apply. The loan is repayable in monthly instalment of $24,750 commencing on February 8, 2026, with a balloon payment at maturity of the remaining principal and interest thereon. Certain expenses were deducted off the proceeds resulting in a net proceeds of $1,583,404. The proceeds were used to repay the Mirage Realty, LLC, short term note, related party balances to Shawn Leon and Eileen Greene and for general working capital purposes.

 

Replacement of promissory note

Effective February 1, 2026, the company entered into a new promissory note agreement replacing the previous promissory note due on the acquisition of the minority interest of ATHI. The promissory note is for $220,000, resulting in a reduction in the liability of $15,000 and is repayable in monthly instalment of $20,000 commencing on February 16, 2026 and for the ten months thereafter. The promissory note bears no interest unless the note is not repaid by the due date of January 16, 2027, then interest will accrue at a maximum rate allowed in Florida or 18% per annum. The original promissory note holder agreed that all obligations due to him under the original promissory note are fully discharged and replaced by the new promissory note.

 

Letter of intent to acquire certain assets and legal entities

·On October 20, 2025, the Company entered into an exclusive letter of intent (“LOI”) with Addiction Recovery Care LLC (“Vendor”) to purchase certain of the assets and separate entities operating under the ARC brand name in Kentucky, expiring 90 days from signature thereof. On November 18, 2025, we entered into an amendment to the LOI removing the exclusivity clause, with all other terms remaining the same. The potential assets to be purchased are of the ARC in-patient facilities in Kentucky operating in Inez, Pikeville, Owensboro and Ashland, along with out-patient facilities in Kentucky operating in Prestonsburg,  Mount Sterling, Louisa, Ashland and Lexington. The potential separate entities to be purchased include a Psychiatric Hospital, a Pharmacy, a Medical Laboratory and a Rural Health Clinic. The addiction treatment and psychiatric facilities have a capacity of approximately 900 patients. There are likely to be related real estate transactions involved in the acquisitions which will remain outside of the Company but could be utilized to generate substantial new equity for the Company.

 

The proposed funding of the purchase price will be approximately 25% in cash, 25% in a vendor note and 50% in equity linked funding from the vendor.  The cash portion will be raised by issuance of new equity and the proceeds from sale and subsequent leasing of certain of the ARC facilities.

 

The Company intends on creating a new entity (“NewcoARIA”) to acquire the ARC assets and separate entities and will ultimately also hold the Company’s existing Florida and Kentucky treatment entities. NewcoARIA will be initially owned by Ethema, new investors and the Vendor.  It is likely that the Company will pursue an Initial Public Offering of NewcoARIA on a senior U.S. exchange.

 

The Company continues to pursue this acquisition.

 

  · On January 7, 2026, the Company entered into an exclusive letter of intent (“LOI”) to acquire the total membership interest of Specialist MAT, PSC (“MAT”), A Kentucky professional limited liability company. The purchase price is estimated at $9.5 million with $6.5 million payable in cash and the balance of $3.0 million funded by a 24-month Sellers note. The principal of the business will sign an employment agreement for a period of two years and continue as the medical director of MAT, in addition the Seller will enter into a 5-year non-compete agreement from closing. The parties agreed to conclude the transaction within 75 days, however the closing date had been extended by an additional 15 days and has still not closed. The parties continue to negotiate in good faith and the exclusivity agreement remains in place.

 

New lease agreements

The Company, through its subsidiary ARIA Kentucky, entered into five new lease agreements, effective between January 1, 2026 and March 1, 2026, with its related party, BH Properties and its subsidiaries, Viking Assets, LLC, JDE Properties and New Journey. The leases are for property situated at:

 

·304 Viking Drive, Morehead, Kentucky with an annual base rent of $60,000.
·164, 166 and 168 Maple Drive, Morehead Kentucky with an annual base rent of $36,000, $60,000 and $36,000, respectively.
·2495 Cranston Road, Morehead Kentucky with an annual base rent of $96,000.

 

The leases are for an initial period expiring on December 31, 2029, with an option to extend for an additional five years, since the transaction is between related parties the option is likely to be exercised. Each lease agreement includes an escalation of 1.5% of the base rent, commencing on January 1, 2027, and annually thereafter. The Company is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

 

Funding Arrangement

On March 16, 2026, the Company, through its subsidiary Evernia, entered into a funding arrangement with Itria, whereby it received proceeds of $244,500, net of discount and fees of $68,000. The Company is obliged to pay $6,010 per week until the amount of $312,500 is paid in full. The maturity date of this funding is March 16, 2027.

 

The discount and fees totaling $68,000 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period.

 

Related Party funding

During March 2026, Mr. Leon the Company’s CEO advanced $300,000 to the Company. The advance bears interest at 6% per annum and is repayable on demand.

 

Other than the above, the Company has evaluated subsequent events through the date the audited consolidated financial statements were issued and did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.