Ethema Completes Restructure and Gets Ready to Open New Treatment Facility
West Palm Beach, FL, Aug. 20, 2020 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE -- Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”) last reported on July 2, 2020 on its progress with its filing status and its debt restructuring. The Company announces today that it has completed its debt restructuring with Leonite Capital LLC (“Leonite”), including the completion of the additional new financing that was a condition of the restructuring. The Company has amended the terms of its debt with Leonite to convert over $1.4 million of defaulted debt into CDN$960,000 (approximately US$700,000) of 10% convertible preferred shares in its wholly owned subsidiary Cranberry Cove Holdings Ltd., and $400,000 in 6% convertible preferred shares in the Company. The Company has filed article of amendment to create a new class of preferred shares for this amendment and a new class of preferred shares for its subsidiary Cranberry Cove Holdings Ltd. The remaining balance of the Leonite debt was reduced to $150,000, which had its terms reset to its original terms prior to its default on the note. As part of the restructuring, Leonite exchanged all of its previous warrants for one new warrant. The company will file all documents related to the restructure in an 8K filing.
New financing of $300,000 was required as part of the restructuring including the previously announced completion of $220,000 in financing from Leonite Capital and the closing on August 14, 2020 of $100,000 in new financing from Auctus Fund LLC. With this new financing, the acquisition of 51% of American Treatment Holdings Ltd. has closed in escrow. The wholly owned subsidiary of American Treatment Holdings Ltd. is Evernia Health Center LLC (“Evernia”), which holds the lease on 950 Evernia Street, West Palm Beach, Florida. Evernia expects to receive its license to operate a full continuum of care at this location in the coming days. Evernia has registered a DBA for doing business as Addiction Recovery Institute of America.
The Company has continued to work on the completion of its overdue filings. After filing its 10k it was expected to be able to file its first quarter 10Q and it second quarter 10Q shortly thereafter. The complexity of the debt restructuring and the delay caused by the COVID-19 pandemic has resulted in the Company taking much longer than expected to complete these filings. With the restructuring now completed it expects that these filings will now get completed in the very near future.
The Company had previously negotiated amendments with four of its variable rate convertible note holders Power Up Lending Group Ltd., First Fire Global Opportunities Fund LLC, Labrys Fund LP and Auctus Fund LLC that would give the Company a reprieve from further conversions under the notes. As per the terms of those amendments, both Power Up Lending Group Ltd. and First Fire Global Opportunities Fund LLC have been paid out as per the terms of their amendments and the notes with Labrys Fund LP and Auctus Fund LLC have repayment terms starting in October.
With the restructuring complete and the impending opening of the new treatment center location, the Company expects to work further on the previously announced acquisition opportunities. The targets have all done extremely well, especially Biohazard Health Services Ltd. (“Covid Clear”). The Company is still working on the financing to purchase 25% of this company for $250,000.00 as per the original LOI which has been extended. Covid Clear has doubled its revenue every month in the last 4 months including revenue expected to exceed $100,000 for the month of August. It has been awarded a large contract for the treatment of public spaces for the Florida locations of a national company. Covid Clear expects that this contract will generate over one million dollars in revenue in 2020. The Company will be a customer of Covid Clear to ensure that the new facility will have the additional levels of safety required to protect its clients and staff from Covid-19. (www.becovidclear.com)
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