Ethema Health Corp (GRST)

[uptick1000]

Recent Report....

Acquisitions

In the report recently released we see that grst has made two acquisitions already

On June 30, 2020, the Company entered into an agreement whereby the Company will acquire 51% of American Treatment Holdings, Inc. (“ATHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins (“Hawkins”), which in turn owns 100% of Peace of Evernia Health Services LLC. (“Evernia”), which operates drug rehabilitation facilities. The consideration for the acquisition is a loan to be provided by the purchaser to Evernia in the amount of $500,000.

This acquisition was accomplished by loaning money to ATHI which Grst secured through its own lenders.

The Company has a 180 day option from the advancement of the First Tranche to purchase an additional 9% of ATHI for a purchase consideration of $50,000, payable to the Seller.
 
Second Acquisition

On June 30, 2020, the Company entered into an agreement whereby the Company will acquire 51% of Behavioral Health Holdings, Inc. (“BHHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins, which in turn owns 100% of Peace of Mind Counseling Services, Inc. (“PMCS”), which operates drug rehabilitation facilities. The consideration for the acquisition is still to be determined.
 
The Company has a 180 day option, from the advancement of the first tranche to Evernia, to purchase an additional 9% of BHHI for a purchase consideration still to be determined, payable to the Seller.

There is still the acquisition of covid clear that they will announce plus the potential that they acquired another treatment Center.

Grst still has not filed the required forms concerning the foreign assets they are holding and are still willing to have to pay 250 000$ in penalties for not revealing these assets.

Page 23
 
The Company also has not filed certain foreign assets forms due to the US Federal Government. A provision of $250,000 was made for any potential penalties due.


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 $240,000, 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. The note is convertible into common shares at the option of the holder at $0.0001 per share, or 80% multiplied by the price per share paid in subsequent financings or after a six month period from the effective date at 60% of the lowest trading price during the preceding 21 consecutive trading days. The note has both conversion price protection and anti-dilution protection provisions.

But don’t forget this senior note extends from the original notes which were renegotiated. Even if they wanted to convert they are subject to the new terms and conditions. Which limits all of Leonite conversions to 20% of the Os
 
New notes are no problem....


On August 13, 2020, the Company entered into a Securities Purchase Agreement with Auctus Fund LLC, pursuant to which the Company issued a convertible promissory note in the aggregate principal amount of $100,000 for net proceeds of $85,000 after certain fees and expenses of $15,000. The note has a maturity date of August 13, 2021 and bears interest at 10% per annum. The interest due on the note for the full twelve month period is due immediately upon issuance of the note, regardless of acceleration or prepayment. The principal amount of the note is payable in six monthly instalments of $16,666.66 commencing 180 days after the issuance date, the balance outstanding under the note due at maturity date. In the event a default occurs under the Note, the Note is convertible into shares of common stock at a conversion price equal to the lowest trading price over the prior 5 days prior to the date

Notice that they made Grst pay the Interest on the note right at the closing. That’s like you taking out a mortgage and at the time of closing the bank says ok you must pay the 25 years of interest right now...further they mention that the note can be prepaid before the 12 month term.. this just shows us that grst and the lender expected this note to be paid off prior to the 12 months and the lender wanted to be assured of getting their full interest rate...no dilution unless default occurs.


On September 14, 2020, the Company entered into a Securities Purchase Agreement with Ed Blasiak (“Blasiak”), pursuant to which the Company issued a senior secured convertible promissory note.. it was 55 000$.The note bears interest at 6.5% per annum and matures on September 14, 2021. 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; or 80% of the price per share of subsequent equity financings or; after six months 60% of the lowest trading price during the preceding six month period.

Ok so here we are seeing that this guy lent Grst 55 000$ and that the note can be converted at 80% of the present pps when they decide to convert. So basically the guy is making 20% on his loan to Grst plus the 6.5 .% annual on the full amount. but notice again the loan can be prepaid...this loan is from a person not a business or loan company....makes me think they know one another....

If he converts at the present stock price 003 he gets at most 20 million shares.

September 14, 2020, 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 $110,000, including an original issue discount of $10,000. The note bears interest at 6.5% per annum and matures on September 14, 2021. 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; or 80% of the price per share of subsequent equity financings or; after six months 60% of the lowest trading price during the preceding six month period.

Same as before a private individual loaning motney to Grst and in return they will get 20% plus 6.5% annually but the loan can be prepaid...if they convert now with the anti dilution clause they would get about 40 million shares

On August 13, 2020, the Company entered into a Securities Purchase Agreement with Auctus Fund LLC,

The Company is required to adhere to certain covenants including covenants concerning distributions of capital stock; restrictions on stock repurchases, additional borrowings sales of assets and loans and advances made by the Company.

Now why in the world is the lender here establishing a covenant an agreement that states that grst would be restricted going forward concerning stock repurchase.

Was Or is Grst involved in some sort of stock repurchase action after March 2020.

Concerning the Leonite warrants they still have the right to purchase or own upto 20% of the outstanding OS. The warrants are subject to price adjustment and anti dilution.


In terms of the price protection provided in the Leonite Capital, LLC warrants which were issued at an initial exercise price of $0.10 per share. These warrants provided for a reduction in the issue price should the Company issue any stock at a price below the exercise price. The Company subsequently issued common stock at a price of $0.0000324 per share thereby triggering the price protection clause in the warrant agreement, resulting in an additional 152,017,272,726 warrants exercisable over shares of common stock. Leonite exercised warrants over 125,609,759 shares of common stock resulting in the issue of 103,000,000 shares of common stock. The remaining Leonite warrants exercisable for 154,399,456,399 shares are exercisable at $0.0000324 per share.

Right now they have 103 million common shares in total. These common shares were converted from the original warrant before the new terms came into play.

The existing warrants are cancelled and a new five year warrant, with a cashless exercise options, exercisable for a minimum of 326,286,847 shares of common stock and a maximum of 20% of the outstanding equity of the Company at an initial exercise price of $0.10 per share subject to adjustment based on new stock issuances or the lowest volume weighted exercise price of the stock for 30 days immediately preceding the exercise.

The OS is 1.8 billion in total Leonite can convert upto 20% which is 360 million common shares. The minimum they are allowed to convert is 326 million and the maximum is 360 million. Presently they already hold 103 million from the maximum amount of 360 million...which leaves about 253 million.

Again if you read this the 20% is subject to the lowest volume price of the stock for 30 days.So if Leonite wanted to secure their 253 million now they would convert at about 0028 per million shares..based upon the past 30 days of trading. Seems like this is why they were holding the price down here.

We know that there has been no increase no dilution in the OS since June....if Leonite did convert where did they get the stock...either from retail selling off...or by grst doing a repurchase of stock......after March 2020.