Ethema Health Corp (GRST)

[Bubae]

Don't put words in my mouth, I didn't predict how low it would go. I do however believe it will see something like a dime before .0001. They will need a massive reverse split to keep it above a penny if they want to regain their OTCQB status again in my opinion. They only had 155 million outstanding shares at the beginning of 2020 when they released the letter of intent for the latest iteration of the treatment center. At that time it was only trading at .004.

Up-list was a potential condition for reverse split in the FAQ page if you recall. The "valuable asset in the treatment center" isn't throwing off much cash and they have already stated that they will need $1.5 million just for working capital in the next 12 months let alone any other ambitions. We also know that they are still borrowing.


FAQ page release July 27, 2021
https://ethema.wpengine.com/?page_id=683

Will you do a stock consolidation?
The current Board and management does not support a stock consolidation. There are only two reasons the board would consider it. The first would be if the stock halts trading because it has reached 0.0001. The Company has already been through a situation where the stock hit .0001 and essentially stopped trading. The Company resisted doing a consolidation then and would resist doing it in the future if anything near to that happened. The Company does not foresee how that can happen now that it has a valuable asset in the treatment center and still has a well performing real estate asset in Canada. The second would be to up-list to an exchange that requires a minimum stock price. The Company could seek an up-listing at some point in the future but there would have to be some sort of financing tied to that. Neither of these situations are in the foreseeable future.


Q3 2021 10Q filing
https://sec.report/Document/0001721868-21-000835/

Liquidity and Capital Resources

..."Over the next twelve months we estimate that the company will require approximately $1.5 million in working capital as it continues to develop the Evernia facility and it is also exploring several other treatment center options and sources of patients throughout the country. The company may have to raise equity or secure debt. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, the Company’s liquidity risk is assessed as medium."...





ETHEMA HEALTH CORPORATION
NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
13. Short term loans (continued)

"On April 29, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $46,000 for net proceeds of $40,000 after an original issue discount of $6,000. The Note had a maturity date of May 3, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."

The Company repaid the note on May 3, 2021 for $46,000.

"On April 30, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $140,000 for net proceeds of $126,000 after an original issue discount of $14,000. The Note had a maturity date of May 7, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."

The Company repaid the note on May 10, 2021 for $140,000.

"On May 27, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $70,000 for net proceeds of $60,000 after an original issue discount of $10,000. The Note had a maturity date of June 4, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."

The Company repaid the note on June 4, 2021 for $70,000.

"On September 15, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $60,000 for net proceeds of $50,000 after an original issue discount of $10,000. The Note had a maturity date of September 23, 2021 and bears interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."

The note was still outstanding at September 30, 2021.

23. Subsequent events

On October 1, 2021, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $95,200, for net proceeds of $85,000 before the payment of legal fees and origination fees amounting to $3,750. The note has a maturity date of October 1, 2022 and bears interest at the rate of 8.0% due immediately on the issuance ate of the note. per annum. The outstanding principal amount of the note is payable in nine monthly payments of $11,424 commencing on November 15, 2021. The note is convertible into shares of common stock upon an event of default at the election of the purchaser. The conversion price is 75% of the lowest trading price for the preceding five days prior to the date of conversion.