Ethema Health Corp (GRST)

[BokehRebl]

The acquisition of Cranberry Cove Holdings was from Leon Investments, which is owned indirectly by Shawn Leon, the President and CEO of GreeneStone. The purchase of the real estate was previously approved by the shareholders in 2015, based on its appraised value of CDN$10,000,000. The total consideration paid by GreeneStone was CDN$10,000,000 and was funded by the assumption of existing debt on the real estate, the cancellation of certain indebtedness owing to GreeneStone in the amount of CDN$659,918 and the issuance of 60,000,000 shares of the Company’s common stock to Leon Investments, valued at US$0.03 per share.

https://www.sec.gov/Archives/edgar/data/792935/000072174817000126/grst8l021617ex99_1.htm

The Asset Purchase Agreement and Lease
Under the APA, the assets of the Canadian Rehab Clinic were sold by the Company, through its subsidiary, Greenstone Clinic Muskoka Inc. (“Muskoka”), to Canadian Addiction Residential Treatment LP (the “Purchaser”), for a total consideration of CDN$10,000,000. The proceeds of the Muskoka clinic asset sale were used to pay down certain tax debts and operational costs of the Company and to fund the Florida Purchase, mentioned below.

Through the APA, substantially all of the assets of the Canadian Rehab Clinic were sold, leaving Ethema with only the underlying clinic real estate, which the Company, through its newly acquired subsidiary, CCH, concurrently leased to the Purchaser. The Lease is a triple net lease and provides for a five (5) year primary term with three (3) five-year renewal options, annual base rent for the first year at CDN$420,000 with annual increases, an option to tenant to purchase the leased premises and certain first refusal rights.

The Florida Purchase
Immediately after closing on the sale of the assets of the Canadian Rehab Clinic, the Company closed on the acquisition of the real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements The purchase price for the Seastone assets was US$6,070,000, financed with a purchase money mortgage of US$3,000,000, and US$3,070,000 in cash.

https://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=15373092-1048-252499&type=sect&TabIndex=2&companyid=3630&ppu=%252fdefault.aspx%253fcompanyid%253d3630

The Asset Purchase Agreement and Lease
Under the APA, the assets of the Canadian Rehab Clinic were sold by the Company, through its subsidiary, GreeneStone Clinic Muskoka Inc. (“Muskoka”), to Canadian Addiction Residential Treatment LP (the “Purchaser”), for a total consideration of CDN$10,000,000, plus an additional performance payment of up to CDN$3,000,000 as a performance payment to be received in 2019 if certain clinic performance metrics are met. The Purchaser completed the sale with cash proceeds to the Company of CDN$10,000,000, of which CDN$1,500,000 will remain in escrow for up to two years to cover indemnities given by the Company. The proceeds of the Muskoka clinic asset sale were used to pay down certain tax debts and operational costs of the Company and to fund the Florida Purchase, mentioned below.

Through the APA, substantially all of the assets of the Canadian Rehab Clinic were sold, leaving Ethema with only the underlying clinic real estate, which the Company, through its newly acquired subsidiary, CCH concurrently leased to the Purchaser. The Lease is a triple net lease and provides for a five (5) year primary term with three (3) five-year renewal options, annual base rent for the first year at CDN$420,000 with annual increases, an option to tenant to purchase the leased premises and certain first refusal rights.

https://www.sec.gov/Archives/edgar/data/792935/000172186817000087/grst10q1105171.htm