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Quarterly Report (10-q)
Source: Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
? QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
or
? TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 000-54748
ETHEMA HEALTH CORPORATION.
(Exact Name of Registrant as Specified in its Charter)
Colorado 84-1227328
(State or other jurisdiction of
incorporation or organization) (I.R.S. employer
Identification No.)
950 Evernia Street
West Palm Beach, Florida
33401
Address of Principal Executive Offices Zip Code
(416) 500-0020
Registrant’s Telephone Number, Including Area Code
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ? No ?
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ? No ?
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ? Accelerated filer ?
Non-accelerated filer ? Smaller reporting company ?
Emerging growth company ?
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ?
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ? No ?
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common shares GRST OTC Pink
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Number of shares of common stock outstanding as of August 12, 2022 was 3,729,053,805.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In particular, statements contained in this Quarterly Report on Form 10-Q, including but not limited to, statements regarding the sufficiency of our cash, our ability to finance our operations and business initiatives and obtain funding for such activities; our future results of operations and financial position, business strategy and plan prospects, or costs and objectives of management for future acquisitions, are forward looking statements. These forward-looking statements relate to our future plans, objectives, expectations and intentions and may be identified by words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “seeks,” “goals,” “estimates,” “predicts,” “potential” and “continue” or similar words. Readers are cautioned that these forward-looking statements are based on our current beliefs, expectations and assumptions and are subject to risks, uncertainties, and assumptions that are difficult to predict, including those identified below, under Part II, Item 1A. “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, and those identified under Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on April 14, 2022. Therefore, actual results may differ materially and adversely from those expressed, projected or implied in any forward-looking statements. We undertake no obligation to revise or update any forward-looking statements for any reason.
NOTE REGARDING COMPANY REFERENCES
Throughout this Quarterly Report on Form 10-Q, “Ethema,” the “Company,” “we,” “us” and “our” refer to Ethema Health Corporation.
FORM 10-Q
ETHEMA HEALTH CORPORATION
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
Item l. Financial Statements 1
Condensed Consolidated Balance Sheets as of June 30, 2022 (Unaudited) and December 31, 2021 1
Unaudited Condensed Consolidated Statements of Operations and Comprehensive (loss) Income for the three and six months ended June 30, 2022 and 2021 2
Unaudited Condensed Consolidated Statements of Stockholders’ Deficit for the three and six months ended June 30, 2022 and 2021 3
Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2022 and 2021 4
Notes to the Unaudited Condensed Consolidated Financial Statements 5
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28
Item 3. Quantitative and Qualitative Disclosures About Market Risk 31
Item 4. Controls and Procedures 31
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 32
Item 1A. Risk Factors 32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32
Item 3. Defaults Upon Senior Securities 32
Item 4. Mine Safety Disclosures 32
Item 5. Other Information 32
Item 6. Exhibits 33
SIGNATURES 34
ETHEMA HEALTH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30,
2022
December 31, 2021
(Unaudited)
ASSETS
Current assets
Cash $ 69,145 $ 48,822
Accounts receivable, net 337,665 176,011
Prepaid expenses 49,326 29,731
Other current assets 18,819 17,235
Total current assets 474,955 271,799
Non-current assets
Due on sale of subsidiary 5,033 5,115
Property and equipment, net 3,095,334 3,012,663
Intangible assets, net 1,431,923 1,610,913
Right of use assets, net 1,525,620 1,653,816
Total non-current assets 6,057,910 6,282,507
Total assets $ 6,532,865 $ 6,554,306
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities $ 380,885 $ 438,482
Taxes payable 752,892 658,836
Convertible loans, net of discounts 5,012,407 4,891,938
Short term loans 323,519 122,167
Mortgage loans 3,742,455 3,864,312
Government assistance loans 157,367 157,367
Operating lease liability, current portion 263,814 241,083
Finance lease liability, current portion 7,634 7,386
Receivables funding 184,135 —
Derivative liability 345,738 515,901
Accrued dividends on preferred stock 152,607 105,049
Related party payables 2,700,039 2,514,281
Total current liabilities 14,023,492 13,516,802
Non-current liabilities
Government assistance loans 46,562 47,326
Deferred taxes 235,469 273,057
Third party loans 583,032 646,176
Operating lease liability, net of current portion 1352,997 1,493,431
Finance lease liability, net of current portion 28,986 32,895
Total non-current liabilities 2,247,046 2,492,885
Total liabilities 16,270,538 16,009,687
Preferred stock - Series B; $1.00 par value, 10,000,000 authorized, 400,000 shares outstanding at June 30, 2022 and December 31, 2021. 400,000 400,000
Stockholders’ deficit
Preferred stock - Series A; $0.01 par value, 10,000,000 authorized, 4,000,000 shares outstanding at June 30, 2022 and December 31, 2021. 40,000 40,000
Common stock - $0.01 par value, 10,000,000,000 shares authorized; 3,729,053,805 and 3,579,053,805 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively. 37,290,539 35,790,539
Additional paid-in capital 22,791,350 22,791,350
Discount for shares issued below par value (27,363,367 ) (26,013,367 )
Accumulated other comprehensive income 778,180 816,532
Accumulated deficit (44,520,889 ) (44,103,311 )
Stockholders’ deficit attributable to Ethema Health Corporation stockholders (10,984,187 ) (10,678,257 )
Non-controlling interest 846,514 822,876
Total stockholders’ deficit (10,137,673 ) (9,855,381 )
Total liabilities and stockholders’ deficit $ 6,532,865 $ 6,554,306
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
1
ETHEMA HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
Three months ended
June 30, 2022 Three months ended
June 30, 2021 Six months ended
June 30, 2022 Six months ended
June 30, 2021
Revenues $ 1,138,032 $ 96,158 $ 2,161,347 $ 186,951
Operating expenses
General and administrative 261,528 2,963 471,460 8,466
Rent expense 109,508 1,012 199,539 2,512
Management fees 30,000 — 60,000 —
Professional fees 112,149 (52,744 ) 161,736 (52,708 )
Salaries and wages 438,842 46,275 875,667 59,127
Depreciation and amortization 134,243 33,108 266,243 65,233
Total operating expenses 1,086,270 30,614 2,034,645 82,630
Operating Income 51,762 65,544 126,702 104,321
Other Income (expense)
Other income 1,045 — 11,063 —
Penalty on convertible debt — — — (9,240 )
Loss on advance — (120,000 ) — (120,000 )
Fair value of warrants granted to convertible debt holders — — — (976,788 )
Interest expense (122,848 ) (474,008 ) (203,616 ) (737,988 )
Amortization of debt discount (211,202 ) (847,865 ) (464,034 ) (1,350,542 )
Derivative liability movement (67,039 ) (1,146,864 ) 130,437 (1,723,619 )
Foreign exchange movements 193,368 (101,247 ) 97,812 (180,738 )
Net loss before income taxes (154,914 ) (2,626,438 ) (301,636 ) (4,994,594 )
Income taxes (24,700 ) — (42,963 ) —
Net loss (179,614 ) (2,626,438 ) (344,599 ) (4,994,594 )
Net income attributable to non-controlling interest (14,176 ) — (23,638 ) —
Net loss allocable to Ethema Health Corporation Stockholders (193,790 ) (2,626,438 ) (368,237 ) (4,994,594 )
Preferred stock dividend (24,728 ) (19,232 ) (49,341 ) (50,079 )
Net loss available to common shareholders of Ethema Health Corporation (218,518 ) (2,645,670 ) (417,578 ) (5,044,673 )
Accumulated other comprehensive income (loss)
Foreign currency translation adjustment (72,869 ) 35,311 (38,352 ) 64,917
Total comprehensive loss $ (291,387 ) $ (2,610,359 ) $ (455,930 ) $ (4,979,756 )
Loss per share
Basic and diluted $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 )
Weighted average common shares outstanding
Basic and diluted 3,729,053,805 2,397,374,825 3,680,158,777 2,271,234,382
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
2
ETHEMA HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
Series A Preferred Common
Shares Amount Shares Amount Additional Paid in Capital Discount to par value Comprehensive Income Accumulated Deficit
Non-controlling
shareholders interest
Total
Balance as of December 31, 2021 4,000,000 $ 40,000 3,579,053,805 $ 35,790,539 $ 22,791,350 $ (26,013,367 ) $ 816,532 $ (44,103,311 ) $ 822,876 $ (9,855,381 )
Conversion of convertible notes — — 150,000,000 1,500,000 — (1,350,000 ) — — — 150,000
Foreign currency translation — — — — — — 34,517 — — 34,517
Net loss — — — — — — (174,447 ) 9,462 (164,985 )
Dividends accrued — — — — — — — (24,613 ) — (24,613 )
Balance as of March 31, 2022 4,000,000 $ 40,000 3,729,053,805 $ 37,290,539 $ 22,791,350 $ (27,363,367 ) $ 851,049 $ (44,302,371 ) $ 832,338 $ (9,860,462 )
Foreign currency translation — — — — — — (72,869 ) — — (72,869 )
Net loss — — — — — — — (193,790 ) 14,176 (179,614 )
Dividends accrued — — — — — — — (24,728 ) — (24,728 )
Balance as of June 30, 2022 4,000,000 $ 40,000 3,729,053,805 $ 37,290,539 $ 22,791,350 $ (27,363,367 ) $ 778,180 $ (44,520,889 ) $ 846,514 $ (10,137,673 )
Series A Preferred Common
Shares Amount Shares Amount Additional Paid in Capital Discount to par value Comprehensive Income Accumulated Deficit
Non-controlling
shareholders interest
Total
Balance as of December 31, 2020 4,000,000 $ 40,000 2,027,085,665 $ 20,270,857 $ 23,344,885 $ (17,728,779 ) $ 806,719 $ (42,459,781 ) $ 700,000 $ (15,026,099 )
Fair value of warrants issued to convertible debt holders — — — — 1,207,214 — — — — 1,207,214
Warrants exercised — — 59,999,999 600,000 — (510,000 ) — — — 90,000
Conversion of convertible notes — — 175,763,466 1,757,635 97,000 (582,850 ) — — — 1,271,785
Foreign currency translation — — — — — — 29,606 — — 29,606
Net loss — — — — — — (2,368,156 ) — (2,368,156 )
Dividends accrued — — — — — — — (30,847 ) — (30,847 )
Balance as of March 31, 2021 4,000,000 $ 40,000 2,262,849,130 $ 22,628,492 $ 24,649,099 $ (18,821,629 ) $ 836,325 $ (44,858,784 ) $ 700,000 $ (14,826,497 )
Fair value of warrants issued to convertible debt holders — — — — 677,700 — — — — 677,700
Warrants exercised — — 42,353,038 423,530 — (336,707 ) — — — 86,823
Conversion of convertible notes — — 296,313,108 2,963,133 — (1,603,511 ) — — — 1,359,622
Foreign currency translation — — — — — — 35,311 — — 35,311
Net loss — — — — — — (2,626,438 ) — (2,626,438 )
Dividends accrued — — — — — — — (19,232 ) — (19,232 )
Balance as of June 30, 2021 4,000,000 $ 40,000 2,601,515,276 $ 26,015,155 $ 25,326,799 $ (20,761,847 ) $ 871,636 $ (47,504,454 ) $ 700,000 $ (15,312,711 )
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
3
ETHEMA HEALTH CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended
June 30,
2022 Six months ended
June 30,
2021
Operating activities
Net loss $ (344,599 ) $ (4,994,594 )
Adjustment to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 266,243 65,233
Non-cash interest converted to equity — 344,701
Fair value of warrants granted — 976,788
Amortization of debt discount 464,034 1,350,542
Unrealized foreign exchange loss — 39,468
Derivative liability movements (130,437 ) 1,723,619
Amortization of right of use asset 128,195 —
Changes in operating assets and liabilities
Accounts receivable (169,211 ) —
Prepaid expenses and other current assets (21,181 ) 83,840
Accounts payable and accrued liabilities 104,282 1,544
Operating lease liabilities (117,703 ) —
Deferred taxation movement (37,588 ) —
Taxes payable 104,905 25,501
Net cash provided by (used in) operating activities 246,940 (383,358 )
Investing activities
Purchase of property and equipment (213,726 ) —
Other investments — (498,020 )
Net cash used in investing activities (213,726 ) (498,020 )
Financing activities
Repayment of mortgage loans (59,761 ) (58,449 )
Proceeds from convertible notes — 1,262,149
Repayment of convertible notes (278,467 ) (709,778 )
Proceeds from promissory notes 160,000 —
Proceeds from federal assistance loans — 173,406
Repayment of third party loans (78,646 ) —
Repayment of finance leases (3,661 ) —
Proceeds from receivables funding 195,500 —
Repayment of receivables funding (15,000 ) —
Proceeds from related party payables 207,294 23,974
Net cash provided by financing activities 127,259 691,302
Effect of exchange rate on cash (140,150 ) 133,230
Net change in cash 20,323 (56,846 )
Beginning cash balance 48,822 90,500
Ending cash balance $ 69,145 $ 33,654
Supplemental cash flow information
Cash paid for interest $ 86,733 $ 303,336
Cash paid for income taxes $ — $ —
Non-cash investing and financing activities
Conversion of convertible notes $ 150,000 $ —
Fair value of warrants issued $ — $ 908,126
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements
4
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Nature of business
Since 2010, the Company has operated addiction treatment centers. Initially the Company operated an addiction treatment center in Ontario Canada under its Greenestone Muskoka clinic, which was sold on February 14, 2017. Simultaneously with this sale the Company purchased buildings and operated an addiction treatment center in Delray Beach Florida under its Addiction recovery Institute of America subsidiary with a license obtained in December 2016, initially though owned properties in Delray Beach and subsequently though leased properties in West Palm Beach, Florida. Since June 30, 2020, the Company has been actively involved in the management of a treatment center operated by Evernia in West Palm Beach Florida. On July 1, 2021, the Company closed on the acquisition of 75% of ATHI, which owns 100% of Evernia, once the probationary approval of a license was obtained from the Department of Children and Family Services of Florida. Evernia is the only active treatment center operated by the Company.
The Company also owns the real estate on which its Greenstone Muskoka clinic operated. The current tenant operates an addiction treatment center on these premises. The Company collects rent on this property, which is treated as a separate business segment.
2. Summary of significant accounting policies
Financial Reporting
The (a) unaudited condensed consolidated balance sheets as of June 30, 2022, which have been derived from the unaudited condensed consolidated financial statements, and as of December 31, 2021, which have been derived from audited consolidated financial statements, and (b) the unaudited condensed consolidated statements of operations, stockholders’ deficit and cash flows of the Company, have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on April 14, 2022.
All amounts referred to in the notes to the unaudited condensed consolidated financial statements are in United States Dollars ($) unless stated otherwise.
a) Use of Estimates
The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include valuing equity securities issued in share-based payment arrangements, determining the fair value of assets acquired, allocation of purchase price, impairment of long-lived assets, the collectability of receivables, leasing arrangements, convertible debentures, contingencies and the value of deferred taxes and related valuation allowances. Certain estimates, including evaluating the collectability of receivables and advances, could be affected by external conditions, including those unique to the Company’s industry and general economic conditions. It is possible that these external factors could have an effect on the Company’s estimates that could cause actual results to differ from the Company’s estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and record adjustments when necessary.
5
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (continued)
b) Principals of consolidation and foreign currency translation
The accompanying condensed consolidated financial statements include the accounts of the Company and all of its subsidiaries. ATHI and its wholly owned subsidiary Evernia, have been consolidated since July 1, 2021. All intercompany transactions and balances have been eliminated on consolidation.
Certain of the Company’s subsidiaries functional currency is the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows:
? Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date.
? Non-monetary, non-current and equity at historical rates.
? Revenue and expense items and cash flows at the average rate of exchange prevailing during the period.
Adjustments arising from such translations are deferred until realization and are included as a separate component of stockholders’ deficit as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments are not included in determining net income (loss) but reported as other comprehensive income (loss).
For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the period.
The relevant translation rates are as follows: For the six months ended June 30, 2022, a closing rate of CDN$1.0000 equals US$0.7760 and an average exchange rate of CDN$1.0000 equals US$0.7865. For the six months ended June 30, 2021, a closing rate of CAD$1.0000 equals US$0.8068 and an average exchange rate of CAD$1.0000 equals US$0.8019.
c) Business Combinations
The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.
Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.
d) Cash and cash equivalents
For purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company maintains cash and cash equivalents with several financial institutions in the USA and Canada.
The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution, in Canada which are insured by the Canadian Deposit Insurance Corporation up to a limit of CDN$100,000 per institution.
6
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (continued)
e) Accounts receivable
Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s condensed consolidated financial statements are recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients.
f) Allowance for Doubtful Accounts, Contractual and Other Discounts
The Company derives the majority of its revenues from commercial payors at in-network rates. Management estimates the allowance for contractual and other discounts based on its historical collection experience. The services authorized and provided and related reimbursement are often subject to interpretation and negotiation that could result in payments that differ from the Company’s estimates. The Company’s allowance for doubtful accounts is based on historical experience, but management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts. An account is written off only after the Company has pursued collection efforts or otherwise determines an account to be uncollectible. Uncollectible balances are written-off against the allowance. Recoveries of previously written-off balances are credited to income when the recoveries are made.
g) Property and equipment
Property and equipment is recorded at cost. Depreciation is calculated on the straight line basis over the estimated life of the asset.
h) Intangible assets
Intangible assets are stated at acquisition cost less accumulated amortization, if applicable, less any adjustments for impairment losses.
Amortization is charged on a straight-line basis over the estimated remaining useful lives of the individual intangibles. Where intangibles are deemed to be impaired the Company recognizes an impairment loss measured as the difference between the estimated fair value of the intangible and its book value.
Licenses to provide substance abuse rehabilitation services are amortized over the expected life of the contract, including any anticipated renewals. The Company expects its licenses to remain in operation for a period of five years.
i) Leases
The Company accounts for leases in terms of AC 842 whereby leases are classified as either finance or operating leases. Leases that transfer substantially all of the benefits and inherent risks of ownership of property to the Company are accounted for as finance leases. At the time a finance lease is entered into, an asset is recorded together with its related long-term obligation to reflect the acquisition and financing. Equipment recorded under finance leases is amortized on the same basis as described above. Operating leases are recognized on the balance sheet as a lease liability with a corresponding right of use asset for all leases with a term that is more than twelve months. Payments under operating leases are expensed as incurred.
7
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (continued)
j) Derivatives
The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company uses a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period are included in the condensed consolidated statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued.
If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.
k) Financial instruments
The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost.
Financial assets measured at amortized cost include cash and accounts receivable.
Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, harmonized sales tax payable, withholding taxes payable, convertible notes payable, loans payable and related party notes.
Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption.
FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
? Level 1. Observable inputs such as quoted prices in active markets;
? Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
? Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.
The Company measures its convertible debt and derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the Statement of Operations and Comprehensive Loss.
l) Related parties
Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.
8
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (continued)
m) Revenue Recognition
ASC 606 requires companies to exercise more judgment and recognize revenue using a five-step process.
The Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations and comprehensive loss.
As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities.
The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and does not adjust for the effects of a significant financing component.
The Company derives a significant portion of its revenue from other payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management.
Settlements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s receivables were $337,665 and $176,011 at June 30, 2022 and December 31, 2021, respectively. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount.
The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:
i. identify the contract with a customer;
ii. identify the performance obligations in the contract;
iii. determine the transaction price;
iv. allocate the transaction price to performance obligations in the contract; and
v. recognize revenue as the performance obligation is satisfied.
9
ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of significant accounting policies (continued)
n) Income taxes
The Company accounts for income taxes under the provisions of ASC Topic 740, ”Income Taxes”. Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax basis of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of, the deferred tax assets will not be realized.
ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made.
o) Net income (loss) per Share
Basic net income (loss) per share is computed on the basis of the weighted average number of common stock outstanding during the period.
Diluted net income (loss) per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation.
Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share).
p) Stock based compensation
Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates.
10
$1,138,000 revenues
$ 51,762 operating income...
8,000,000 revenues in the next 12 months
2,000,000 market cap...
Mr. Leon has turnaround this company and can make a new start with this 62 bed clinic...
BUY TIME!
10Q out... enjoy!
https://docoh.com/filing/792935/0001903596-22-000529/GRST-10Q-2022Q2
Should have earnings or a late notice. Maybe a promo effort to see if they can get the price into the conversion zone.
Wow...$8 million annual again. Why stop there if there is no basis for that number. Really can't show Q1 results enough. 950 Evernia street is built out now and 10 beds in the little house adjacent to the property will likely only hold the 10 beds mentioned. Where does this growth come from? Q2 will be very revealing. Time for another of those letters of intent to try and get the price over .001 so that they can convert some more of that debt.
The number of notes that have matured and are eligible to convert at .001 will keep the price in this neighborhood as the outstanding share count grows in my opinion. I suspect that they have had tranches of shares at the ready in the event that the market will accommodate these conversions. The Sunday tweet February 27th set up the 4 day share selling campaign. The 150 million shares on the 12% Leonite note were issued February 28th, the first date of the press release. The balance of that note with a conversion price of .001 is $173K. The July 2020 note mentioned in the press release for as much as $440K, again converts at .001. A $150K Joshua Bauman note matures October 1st, conversion price .001. Look at the June 2022 Leonite note for $745K with a conversion price of .01. That price adjusts if there is a "dilutive issuance" per the terms of the note. These are but a few and may not be all inclusive. Buyer beware chasing those press releases in my opinion. No, I do not hold a position of any kind in this stock.
For the quarterly period ended March 31, 2022
https://sec.report/Document/0001903596-22-000301/
[color=red]10. Short-term Convertible Notes (continued)
Leonite Capital, LLC (continued)
On February 28, 2022, in terms of a conversion notice, Leonite converted the principal sum of $149,250 of the Leonite Note into 150,000,000 shares of common stock at a conversion price of $0.0010 per share.
Joshua Bauman
On October 21, 2021, the Company entered into a Securities Purchase Agreement with Joshua Bauman (“Bauman”), pursuant to which the Company issued a senior secured convertible promissory note in the aggregate principal amount of $150,000, including an original issue discount of $16,250. The note bears interest at 11.0% per annum, which is guaranteed and earned in full on issue date and matures on October 21, 2022. The note may be prepaid at certain prepayment penalties and is convertible into shares of common stock at a conversion price at the option of the holder at $0.001 per share, adjusted for anti-dilution provisions.[/color]
On July 12, 2020, the Company entered into a Senior Secured Convertible Note agreement with Leonite for $440,000 with an original issue discount of $40,000 for gross proceeds of $400,000, the initial tranche advanced will be for cash of $200,000 plus the OID of $20,000, the remaining advances will be at the discretion of the Leonite. The loan bears interest at 6.5% per annum and matures on June 12, 2021. The Company is required to make monthly payments of the accrued interest on the advances made.
Ethema Continues to Reduce Debt
March 01, 2022 10:19 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/en/news-release/2022/03/01/2394545/0/en/Ethema-Continues-to-Reduce-Debt.html
...The Company entered into a forbearance agreement with Leonite Capital Inc. (“Leonite”) for their note dated July 12, 2020 which limits certain collection activities for payment defaults until June 28, 2022. The current conversion price being employed on the note is $.001 per share...
They did default on the payments an it is stated as such in the Leonite June note 8K. also doubt that the CEO is "Obsessing" over the situation. He seems to be fine with paying the steep penalties because in the end, as usual, those moneys end up as trading losses for retail.
June 2022 Leonite Note 8K filing
https://sec.report/Document/0001903596-22-000464/
Recitals
C. WHEREAS, the Company failed to make certain payments required pursuant to Section 4.17 of the May Note, which is an event of default under the May note.
GRST - Do not think that Mr. Shawn Leon is "Obsessing" about the due Payments......
There has been No Default in Payments in the past .....No reason that there is going to be Default in future!.....-
Mr. Shawn Leon said:
Ethema Continues to Reduce Debt
March 01, 2022 10:19 ET | Source: Ethema Health Corporation
We have good relationships with all of our lenders and the lenders have worked with the Company to this end.
We will use cash flow from operations, new fixed rate debt, and market rate equity to do our very best to make this happen in the first half of 2022......
=========================================
***The Company growth is real and the elimination of variable rate debt is real.
***Please see Post #42737 & 42751 Reply from The CEO!
.https://nz.finance.yahoo.com ›
GRST - https://fb.watch/bN-wNMFvWg/
https://t.co/5GwitXravc $GRST
So the company defaulted on the Labrys agreement for payments to satisfy those notes by the end of June. I would like to know what they did about the Leonite note mentioned in the same press release. This $440K note was originally set up like a line of credit so it is hard to pin down what the value of the note is. While the company was very specific about the Labrys payments that were agreed to, they conveniently left out the current total owed on the July 2020 Leonite note with the "forbearance agreement". The company didn't reveal the status of the Labrys payments or the new note for nearly 60 days after the June 1st Leonite "Exchange Note" to settle that debt. It is possible that they may not reveal the status of this note until they absolutely need to . You might look at that conversion price of .001 on the note and have an idea of what might be in store if this stock price had exceeded .001 on decent volume off of any of the recent press releases.
.
Ethema Continues to Reduce Debt
March 01, 2022 10:19 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/en/news-release/2022/03/01/2394545/0/en/Ethema-Continues-to-Reduce-Debt.html
...The Company entered into a forbearance agreement with Leonite Capital Inc. (“Leonite”) for their note dated July 12, 2020 which limits certain collection activities for payment defaults until June 28, 2022. The current conversion price being employed on the note is $.001 per share...
For the quarterly period ended March 31, 2022
https://sec.report/Document/0001903596-22-000301/
Leonite Capital, LLC
On July 12, 2020, the Company entered into a Senior Secured Convertible Note agreement with Leonite for $440,000 with an original issue discount of $40,000 for gross proceeds of $400,000, the initial tranche advanced will be for cash of $200,000 plus the OID of $20,000, the remaining advances will be at the discretion of the Leonite. The loan bears interest at 6.5% per annum and matures on June 12, 2021. The Company is required to make monthly payments of the accrued interest on the advances made.
June 2022 Leonite Note 8K filing
https://sec.report/Document/0001903596-22-000464/
Recitals
C. WHEREAS, the Company failed to make certain payments required pursuant to Section 4.17 of the May Note, which is an event of default under the May note.
Another good sign. but Indeed needs to get their act together. The reviews on the Aria link are for jobs at Aria hotel in Las Vegas! GRST
And another NEW job offering at GRST...
YEAH this company is doing so bad NOT! LOL
companies hiring in a bearmarket always a good sign.
https://www.indeed.com/m/viewjob?jk=ff342273b3f8e0c6&advn=1173823876113003&adid=382290254&ad=-6NYlbfkN0Cih2X0QMsg-sTfJbwHRKRvbjDtvltGG0MzylraOaasyM-bfRvgcDYzuRN_St0OdGG7dBK2LpWswXeWUpbrt1UXTOKIwjKSBColl_WNYGqQVXZY7oSe1XuOMUWcNm9p7JB3KYqJsFySj1Camrpf46jh0bWFW5RIohwvHYcjWdfMCtuTM01KWJzO8OuD66RP541N4oNqw1Vi_jCwBHk5IOcLwKEQ-ydgNxL_x6b1aL3UkjEDwAE2uEqArjPDsZZO4BZQOsUVYYHztICo0rbbcfrVaxAoUibpm1v_zgLMBsjO5vlhEEKR2Q1nojQvIimmqnJQLFpPhBTBIxGcPnaaG2p3zrm4IA9FObgXT4W7g0q2dS9LxSTxewHu&from=ja&alid=61dc5caf221c50549a464c8b&tk=1gaet5iithv37800&utm_source=jobseeker_emails&utm_medium=email&utm_campaign=job_alerts
GRST - Clients Satisfaction is what makes the Business Grow!......
Ethema Health has excellent reviews of ARIA health care patients.
*****LINK*****
https://www.google.com/search?q=Addiction+Recovery+Institute+of+America+review&sxsrf=ALeKk03_SLqqeWvgpbVNWXprTluQmxQJhA%3A1622576702081&source=hp&ei=Po62YL__Ade0tQbK54KQCA&iflsig=AINFCbYAAAAAYLacTkOCM38mgicTjs8thVFPzN6DxfZ8&oq=Addiction+Recovery+Institute+of+America+review&gs_lcp=Cgdnd3Mtd2l6EAMyBQghEKABOgQIIxAnOgYIABAWEB46CwguEMcBEK8BEJMCOggIIRAWEB0QHlDSBVjUEWDQFGgAcAB4AIABywKIAaEIkgEHMy40LjAuMZgBAKABAqABAaoBB2d3cy13aXo&sclient=gws-wiz&ved=0ahUKEwi_lsifmffwAhVXWs0KHcqzAIIQ4dUDCAk&uact=5#lrd=0x88d8d775516d8485:0x77f0097b8f8575a3,1,,,
============================================
*** - Drug & Alcohol Rehabilitation Clinics in the US industry outlook (2021-2026)
Average industry growth 2021-2026: x.xlock
Over the five years to XXX, the Drug and Alcohol Rehabilitation Clinics industry is expected to sustain strong growth. The ongoing epidemic of opioid addiction will continue to draw attention, which will likely attract additional funding for rehabilitation programs and lead to a further decline in the stigmatization of treatment. Additionally, as shutdowns brought on during the COVID-19 (coronavirus) pandemic are lifted, industry establishments will likely see a surge of patients with pent up demand. Meanwhile, with people locked down in their homes, drug and alcohol use is expected to rise in XXX, leading to greater demand for rehabilitation services over the next five years.
=================================================
***Cost Of Drug And Alcohol Rehab - Addiction Centerhttps://www.addictioncenter.com › rehab-questions › co...
Some inpatient rehabs may cost around $6,000 for a 30-day program. Well-known centers often cost up to $20,000 for a 30-day program. For those requiring 60-
==================================================
-The Company growth is real and the elimination of variable rate debt is real.
***Please see Post #42737 & 42751 Reply from The CEO!
.https://nz.finance.yahoo.com ›
GRST - https://fb.watch/bN-wNMFvWg/
https://t.co/5GwitXravc $GRST
GRST - The OTC Stocks Being Less Regulated they are subject to Scare Tactics and Manipulation!.......
*** How to Buy Penny Stocks
Once you've learned to dodge the scammers, there are five steps to follow when purchasing a penny stock.
It's important to evaluate whether the stock has upside potential. You're investing because you'd like to get a return, right? So you need to ask yourself whether the penny stock you're considering truly has upside potential, or if it seems more to be a flavor-of-the-day stock, such as a company that's trying to ride the coattails of the latest investment fad.
***The Bottom Line
Penny stocks are extremely volatile and speculative by nature. As most trade on OTC exchanges or via pink sheets, where listing standards are lax, penny stocks are susceptible to manipulation and fraud. Still, the potential to make large returns is a strong allure, driving risk-taking investors into taking positions in these securities. Though many penny stocks go bust, if an investor exercises careful fundamental analysis and picks sound management teams, they could find the coveted diamond in the rough.
Pay more attention to what they don't say and what they don't reveal. The Leonite June note of $745K to pay the Labrys notes totaling $596,300 referred to as the "Outstanding Balance". This note has a penalty of $150K built in is the note isn't paid by October 1st, which it will not be of course. The note will not be paid through the conversion of shares as well with the current story and share structure in my opinion. So this is where the "Security and Pledge Agreement" comes in. What was promised to secure this note and where is this "attached" document?
June Leonite note 8K
https://sec.report/Document/0001903596-22-000464/
...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 with the Purchase Agreement, the "Related Documents"), a copy of which is attached hereto as Exhibit C, between the Borrower and Holder, terms of which are incorporated by reference and made part of this note...
Exhibt "C" missing in action
https://sec.report/Document/792935/000190359622000464/ex10_2-027.jpg
GRST hiring another therapist. Looks like they will soon have, not 62 beds, but 68 beds... NICE!
"The Primary Therapist provides comprehensive treatments in collaboration with a multidisciplinary clinical team at a 24-bed detox and residential and 28 soon to be 44 bed PHP, IOP, and OP addiction treatment center in West Palm Beach, Florida. As a contributing member to the primary care team, the primary therapist works closely with the clinical director, medical staff, BHT’s, and other psychotherapists to help manage a broad range of chronic and acute substance abuse, mental health, and medical conditions."
https://www.indeed.com/m/viewjob?jk=9ab991f96cf06ea1&from=serp&prevUrl=https%3A%2F%2Fwww.indeed.com%2Fm%2Fjobs%3Fq%3DARIA%26l%3DDelray%2BBeach%252C%2BFL%26rbc%3DARIA%26jcid%3D8af18b60674515aa%26vjk%3Dbae8cb3e08f0c2ad
Hahaha... is that your answer? Does it even matter? In a "crackhouse" or by Mr. Leon selling Crack on the streets.... hahaha...
A search on Google maps... nice
8,000,000 + revenues in the next 12 months. And a 1,8 mil mc...
That big boy that was betting on GRST going BK is in big trouble.
..!..
GRST - Shawn Leon Positive Remark "Offset" any Negative Saying!
<<Mr. Shawn Leon, Company CEO, reported, “While there are many positive events for the Company to talk about, our revenue growth for ARIA is a standout. The revenue improvements are a direct result of building a reputation of quality care. We have reduced marketing spend significantly which helps improve the bottom line. It is early in the second quarter but we expect the revenue growth to continue due to the expected increase in the available beds.”>>
-The Company growth is real and the elimination of variable rate debt is real.***Please see Post #42737 & 42751 Reply from The CEO!
===============================================
*** The Satisfaction at Aria Detox Center Is Good....With this Good Reputation The Company Should Be Doing Well Going Forward with Continue Growth......
*** Addiction Recovery Institute of America
66 Google reviews
Addiction Treatment Center In West Palm Beach, Florida
***Reviews
*Tony Kruska "My experience at Aria was awesome, great food, great staff, great groups!!!"
*K Telfort "This place was very helpful in assisting me with my family member."
*Irene Avery "Rooms are good quality, some with en-suite."
View all Google reviews
===========================================
$42 Billion U.S. Addiction Rehab Industry Poised for Growth
Feb 5, 2020 — Drug and alcohol addiction rehab in the United States is big business — worth $42 billion this year.
GRST - https://fb.watch/bN-wNMFvWg/
LOL, you determined a rate of growth from the addition of the 10 beds (40%) in an adjacent, separately leased property to determine what the revenue will be a year from now. The problem is that 950 Evernia street facility is now done. The addition 10 beds are in a very small, crack house looking building next door, so also done. Take the google street view link and drive around 950 Evernia street. There is only one building that can possibly be described as adjacent to 950 Evernia street and that is 921 Fern street with just under 2600 square feet.
The problem also is how they report revenue and is best described in the FAQ page released July 2021. This is how you can report nearly $1 million in revenue for a quarter and only have net earnings of $14K. This is also why they are now defaulting on their debt payments.
950 Evernia Street google street view start for virtual drive by
https://www.google.com/maps/place/950+Evernia+St,+West+Palm+Beach,+FL+33401/@26.7113752,-80.0620397,3a,75y,113.78h,83.72t/data=!3m6!1e1!3m4!1s4Gmy9bwWoCXiQfpV_9fANg!2e0!7i16384!8i8192!4m5!3m4!1s0x88d8d66689891069:0x9eb47c2ec2a516a3!8m2!3d26.7113012!4d-80.0617434
Property Card 921 Fern Street
https://www.pbcgov.org/papa/Asps/PropertyDetail/PropertyDetail.aspx?parcel=74434321010430061&srchtype=MASTER&srchVal=921%20FERN
FAQ page release July 27, 2021
https://ethema.wpengine.com/?page_id=683
For the quarterly period ended March 31, 2022
https://sec.report/Document/0001903596-22-000301/
AGAIN, with LINKS and everything!!! SO IT MUST BE TRUE! LOL
so as I explained, we can expect a $8,548,722 revenues in the next 12 months.
So $8,548,722 revenues for a company with a $ 1,864,527 mc... HILARIOUS!!!
LINK!
https://www.newmediawire.com/news/ethema-files-8k-on-debt-restructure-6999029#.Yve7QXT8Brk.link
I know GRST has to eliminate some more debt but doing a great job if you look at the ASSETS growth and the LIABILITIES going down Q after Q. But overall you can say a company trades between the 8 and 12 times the revenues.
LINKS:
https://www.newmediawire.com/news/ethema-posts-positive-q1-results-6391102#.Yve7e4za7UU.link
https://www.newmediawire.com/news/ethema-files-10k-and-reports-positive-revenue-growth-6335615#.Yve7wpXtsy4.link
That's 8,5mil X 8= $ 68mil mc OR 34 BAGGER in the next 12 months
$1000 will become $34000
OR
8,5mil X 12= $ 102mil mc OR 51 BAGGER in the next 12 months
$1000 will become $51000
Of course, all in my opinion
GRST - ***The failure by some to see what is going on does not change what is going on......Progress are made and continue to be made!....
-The Company growth is real and the elimination of variable rate debt is real.***Please see Post #42737 & 42751 Reply from The CEO!
GRST - https://fb.watch/bN-wNMFvWg/
https://t.co/5GwitXravc $GRST
Well YES, to be correct: $8,548,722
With LINKS and everything LOL
You follow?
13% revenue increase on Q2.
https://www.newmediawire.com/news/ethema-posts-strong-revenue-guidance-for-second-quarter-6788302#.Yvewa_Vs7sI.link
With 1,023,000 revenues in Q1.
https://www.newmediawire.com/news/ethema-posts-positive-q1-results-6391102#.Yveww1_SHEE.link
That's 1,156,000 for Q2.
Expanding from 44 to 62 beds in Q3 that's + 41% extra or $1,630,000
https://www.newmediawire.com/news/ethema-posts-strong-revenue-guidance-for-second-quarter-6788302#.Yvew9Cx-oWI.link
$1,630,000 + 13% extra = 1,842,000 revenues for Q3
Let's say GRST can add 10% revenues every Q as they already proved. Than this will be the revenues for the next 12 months:
Q3 22= $1,842,000
Q4 22= $2,026,200
Q1 23= $2,228,820
Q2 23= $2,451,702
TOTAL REVENUES FOR GRST YOU CAN EXPECT IN THE NEXT 12 MONTHS=
$8,548,722
This without any expanding of the clinic with extra beds in the next 12months or treatments outside the clinic.
When and where did the CEO make this statement?
Quote:
...the fact that the CEO stated he knows someone is holding the pps down...
$259K that was debited in Q3 2021 and then a credited entry for $259K cash from the CEO back in Q1 2022. The proceeds were used to repay part of a note owed to the CEO's wife while they are unable to make other note payments and borrowing very short term at at a cost of around 20%. The point of this subject of this post is the claims of comments made by the CEO from posters here. Excerpt below from my post dated June 1st in response to a post that purportedly quotes the CEO as an example.
https://sec.report/Document/0001903596-22-000301/
For the quarterly period ended March 31, 2022
During March 2022, the Company paid $20,000 of principal on the convertible note, thereby reducing the principal outstanding to $80,000. The note matured May 7, 2020, Auctus Fund LLC has not declared a default and we are in constant discussion with the lender on settling the note.
Leonite Capital, LLC
Secured Promissory Notes
On March 1, 2022, the Company entered into a secured Promissory Note in the aggregate principal amount of $124,000 for net proceeds of $100,000 after an original issue discount of $24,000. The Note had a maturity date of April 1, 2022. This note has not been repaid at the date of this report and no default has been declared. We are in discussions with Leonite on the repayment of this note and the advancement of additional funds for business purposes.
Wednesday, June 01, 2022 5:30:59 PM
Post# 42821 of 43649
Pretty weak and troubling that a CEO doesn't release some thing directly, by himself, to shareholders related to balance sheet activity. At what point does disseminating information to individual shareholders become a problem that should be reported as inside information...
For the quarterly period ended September 30, 2021
https://sec.report/Document/0001721868-21-000835/
18. Related party transactions
Shawn E. Leon
As of September 30, 2021 and December 31, 2020 the Company had a payable to Shawn Leon of $121,797 and $322,744, respectively. Mr. Leon is a director and CEO of the Company. The balances payable are non-interest bearing and has no fixed repayment terms.
Management fees from prior periods due to Mr. Leon amounting to $259,175, related to Mr. Leon and reflected as a payable to Mr. Leon were reversed during the current period.
For the quarterly period ended March 31, 2022
https://sec.report/Document/0001903596-22-000301/
14. Third party loans
On April 12, 2019, Eileen Greene, a related party assigned CDN$1,000,000 of the amount owed by the Company to her, to a third party. The loan bears interest at 12% per annum which the Company agreed to pay.
During the current period the Company repaid CDN$100,000 (approximately $78,977).
We repaid $78,977 of third party debt during the current period and received short term proceeds of $100,000 from promissory notes payable. We funded the above repayments from proceeds advanced by our CEO of $259,228 during the current period.
Hmmm...8 million a year in revenue now. LOL The last press release claims a projected 13% increase over Q1 for for the Q2 filing. Net earnings stink and another 13% isn't going to smell much better. Didn't they call that "Strong Guidance" for Q2 and say that the filing would come in July? We are more likely to see a notice of late quarterly filing next week. Can't wait to see what they did with the rest of the debt payments that were due in Q2.
Ethema Posts Strong Revenue Guidance for Second Quarter
June 30, 2022 12:07 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/en/news-release/2022/06/30/2472430/0/en/Ethema-Posts-Strong-Revenue-Guidance-for-Second-Quarter.html
...expects its ARIA subsidiary to report a revenue increase of 13% for the second quarter 2022 over the first quarter 2022 when the Company files its Q2 financials with the SEC in July.
For the quarterly period ended March 31, 2022
https://sec.report/Document/0001903596-22-000301/
Hmm... a lot of new faces here this week... wondering what is coming.
Expecting Q2 results on Monday... on a Monday, always good
Haveca great weekend
Yep, yet GRST isn't a stinky pinky but a real company with 8mil revenues in the next 12 months and a fast growing business. You can't deny that. Most of the time these sticks are called GEM... just before the big money comes in.
We'll soon see who's right.
The CEO, or some posters on a message board. ;-]
..!..
LOLOL.....So many Stinky-Pinkies blaming "naked shorts"...
I'd like to know the answer to this also.
CEO in direct private communication with a shareholder is not a good look.
that's like being given the choice between being shot or stabbed. neither one is all that appealing. grst
Interesting. Watch. Will 5's or 6's be new base?
GRST
GRST - Progress have been made. - The Satisfaction at ARIA Center is Good.....
*** Addiction Recovery Institute of America
"66 Google reviews" -
*** Updated Events that did Occur that Should Make The Difference Going Forward!.....
1-Increase in Bed now 62
2-Increase in Billing Rate from New Directions....
3-Increase in Stuff now 46 from 2 last year
Some inpatient rehabs may cost around $6,000 for a 30-day program. Well-known centers often cost up to $20,000 for a 30-day program. For those requiring 60- or more...>>
***Cost Of Drug And Alcohol Rehab -
Addiction Centerhttps://www.addictioncenter.com › rehab-questions › co...
<<The CEO say: We will continue to focus on growth while improving our balance sheet.>>
-The Company growth is real and the elimination of variable rate debt is real.
***Please see Post #42737 & 42751 Reply from The CEO!
.https://nz.finance.yahoo.com ›
GRST - https://fb.watch/bN-wNMFvWg/
https://t.co/5GwitXravc $GRST
When and where did the CEO make this statement?
1 billion naked shorted shares! LOL No basis for the opinion or link to suggestive information, nothing. Just the same old promotional rhetoric without any supporting information. The reality is that this has been an easy flip between .0005 and .001 since it appears that the company needs a minimum .001 to convert. So as long as there is retail willing to step up and buy those 8s and 9s the cycle will continue. Below .001 the company just sits and spins and agrees to the ridiculous terms of the June Leonite note. I suppose short sellers are responsible for all the selling of those 6s shortly after a run.
One thing to consider. Someone who is in a position to conduct this illegal activity of naked short selling profitably considering the cost. That is these people would only do it if they had information that suggested a very high probability of being successful. That they would have information that suggests that the company is in even worse shape than any of us know.
NorfolklP, the fact that the CEO stated he knows someone is holding the pps down, makes me wonder how, and what is going on.
GRST seems to be manipulated, only possible through naked shorting imo
CEO also stated they will not be able to keep the pps down for much longer.
This ticker is
Completely
Manipulated by
Borrowed shares.
NAKED
Pink, there are no naked shorts in GRST.
My estimate 1+ BILLION GRST NAKED SHARES. NAKED*SHORTS*TRAPPED.
* MILLIONS IN REVENUE NOW
* COMPANY GROWING
* OS FROZEN
* CEO FAMILY OWN 200+ MILLION SHARES
* DEBT BEING PAID OFF
I WISH CEO BUYS MILLIONS OF SHARES AT .000s AND RETIRE THEM AND REDUCE THE OS NOW HAS REVENUE. BURN NAKED SHORTS. NAKED SHORTS KEEP SELLING PHANTOM SHARES AT .0006 TO .001. OS FROZEN SINCE LAST 5 MONTHS BUT SOMEONE KEEPS SELLING SHARES AND RELOADING .0006 TO .001 - CLEAR SIGN OF NAKED SHORTING SINCE .015 TO .0005. i KEEP ADDING AND WILL LOCK THEM FOR BIGGER $$$$$$
GRST HAD VERY LITTLE REVENUE WHEN IT TRADED AT .015 WITH HUGE DEBT. NOW GRST HAS MILLIONS IN REVENUE WITH LITTLE DEBT AND AT .0006. WHAT A JOKE. THESE NAKED SHORTS WILL BURN BADLY HERE. ALL THESE SHARES ARE BEING BOUGHT AND WILL NOT BE SOLD UNTIL THEY REACH VERY HIGH PPS. MILLIONS OF DOLLARS WILL BE MADE HERE BY GRST SHAREHOLDERS INCLUDING ME.
You are outright incredible. One has to wonder what made you such an ennemy of our CEO and what he did to you ???
The company use to be fond of letters of intent. None of their letters of intent were ever completed since the beginning of 2019. The December 2019 letter of intent was an example of what they are capable of. LOI to acquire a company with a $3.6 million EBITDA from $20 million revenue for 2019. This was after giving up the Delray Beach property to Leonite for debt October 2019 and just before closing the last ARIA treatment center entity January 2020. So they were essentially out of business yet floated this big purchase idea of another treatment facility. They went on to dump 1.3 billion new shares on traders the following 8 weeks dropping the price to .0001 where it stayed for four months. They could use another of those letters of intent about now.
Ethema to Focus on Acquisitions for Growth Strategy
December 24, 2019 10:01 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/news-release/2019/12/24/1964449/0/en/Ethema-to-Focus-on-Acquisitions-for-Growth-Strategy.html
West Palm Beach, FL, Dec. 24, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Ethema Health Corporation (OTCQB: GRST) (“Ethema” “GRST” or the “Company”), a provider of healthcare services, has announced that it has signed a non-binding Letter of Intent to acquire a majority interest in an addiction treatment company. The acquisition target will have approximately $20 million in revenue for 2019 and an EBITDA of $3.6 Million...
For the quarterly period ended March 31, 2020
https://sec.report/Document/0001721868-20-000426/
12. Stockholders' deficit
a) Common shares
Authorized, issued and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding common shares of 1,577,862,975 and 155,483,897 as of March 31, 2020 and December 31, 2019, respectively.
Between January 6, 2020 and February 27, 2020, the Company issued 1,316,679,078 shares of common stock in terms of conversion notices received from convertible note holders. The shares issued were issued below par based on the market price of the stock on the date of conversion and were valued at $531,005...
GRST- FAILURE is a major part of entrepreneurial success. Its value is the gift of learning that empowers you to never stop pursuing your dreams. Just look around: the world is full inspiring stories. Today, entrepreneurship is all around us and is much needed in the corporate world as well for social welfare>>.
*** 5 Successful Companies That Didn't Make a Dollar for 5 Years-
https://www.inc.com/drew-hendricks/5-successful-companies-that-didn-8217-t-make-a-dollar-for-5-years.html
***The fact is, while there are an infinite number of ways that successful entrepreneurs make their money, there's only one thing they all have in common: failure. There's no shortage of examples of great successes who had to struggle before they became the winners we now know them as.Jan. 15, 2018
***Entrepreneurs Face Failure But the Successful Ones Didn't Quit!!!....
***TENACITY!!!.. This is where you put the work in. Tenacity is a key characteristic of any successful person, and basically the entire mindset of successful entrepreneurs. Included above all in the tenacious mindset is determination and work ethic.
Time will tell the story!!!....
This really looks very, very...Familiar. Didn't I see this stuff around March 2021 when the stock was heavily promoted to .015? Those new to this stock you should go back to posts during that time and you won't find anyone talking about the Delray Beach property that was handed over to Leonite for debt in October 2019. No one talking about the treatment center at 5400 East Avenue, West Palm Beach that closed January 2020. All after heavy losses and financed with toxic notes that again, no one was talking about. Even dilution deniers for 2021. Now the numbers are in, the story is very old and done, and we have note payment defaults. Can't talk it up this year.
For the quarterly period ended March 31, 2021
https://sec.report/Document/0001721868-21-000319/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share.The company has issued and outstanding 2,262,849,130 and 2,027,085,665 shares of common stock at March 31, 2021 and December 31, 2020, respectively
235,763,465 shares for Q1 2021
For the quarterly period ended June 30, 2021
https://sec.report/Document/0001721868-21-000524/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 2,601,515,456 and 2,027,085,665 shares of common stock at June 30, 2021 and December 31, 2020, respectively. 338,666,326 shares for Q2 2021
338, 666,326 increase for period Q2 2021
For the quarterly period ended September 30, 2021
https://sec.report/Document/0001721868-21-000835/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 3,111,047,811 and 2,027,085,665 shares of common stock at September 30, 2021 and December 31, 2020, respectively.
509,532,355 new shares for Q3 2021
For the fiscal year ended: December 31, 2021
https://sec.report/Document/0001903596-22-000192/
Authorized and outstanding
The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued and outstanding 3,579,053,805 and 2,027,085,665 2,207,085,665 shares of common stock at December 31, 2021 and December 31, 2020, respectively.
468,005,994 new shares for Q4 2021
For the fiscal year ended: December 31, 2020
https://sec.report/Document/0001721868-21-000220/
West Palm Beach Treatment Operations
The Company treatment operations were based in our leased premises at 5400 East Avenue, West Palm Beach, Florida, USA.
This facility was operated until January 30, 2020, we have subsequently ceased operations at this facility and are currently exploring new treatment facility options.
For the fiscal year ended: December 31, 2019
https://sec.report/Document/0001721868-20-000304/
11. Short-term Convertible Notes (continued)
Leonite Capital, LLC (continued)
On October 10, 2019, the Company transferred a warranty deed to the real property located at 810 Andrews Avenue, Delray Beach, Florida to Leonite Capital, LLC, in settlement of indebtedness of $1,398,514 and additional expenses related to the disposal of the property of $36,470. These expenses of $36,470 were provided for resulting in net proceeds recognized on the transfer of the property of $1,362,044...
GRST - Mr. Shawn Leon is Pleased and is Projecting a Positive & Favorable Outlook......
Progress have been made. - The Satisfaction at ARIA Center is Good.....
*** Addiction Recovery Institute of America
"66 Google reviews" -
*** Updated Events that did Occur that Should Make The Difference Going Forward!.....
1-Increase in Bed now 62
2-Increase in Billing Rate from New Directions....
3-Increase in Stuff now 46 from 2 last year
Some inpatient rehabs may cost around $6,000 for a 30-day program. Well-known centers often cost up to $20,000 for a 30-day program. For those requiring 60- or more...>>
***Cost Of Drug And Alcohol Rehab -
Addiction Centerhttps://www.addictioncenter.com › rehab-questions › co...
<<The CEO say: We will continue to focus on growth while improving our balance sheet.>>
-The Company growth is real and the elimination of variable rate debt is real.
***Please see Post #42737 & 42751 Reply from The CEO!
.https://nz.finance.yahoo.com ›
GRST - https://fb.watch/bN-wNMFvWg/
https://t.co/5GwitXravc $GRST
I estimate 1 BILLION+ NAKED GRST SHARES.'
https://www.sec.gov/comments/4-627/4627-95.pdf
$GRST WILL SEE ONE OF THE BIGGEST #SHORTSQUEEZE IN OTC HISTORY.
CEO is best in OTC.
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