Ethema Health Corp (GRST)

[Bubae]

I am actually giving them the benefit of the doubt that terms like "dilutive issuance" adjustment provisions in the notes is preventing them from behaving like a normal pink listed company. It could be that they are simply bad managers as evidenced by the history of huge losses and very bad toxic financing terms. Why would even a stinky pink agree to a $150K built in penalty on a $600K note, financed with a variable interest rate tied to prime which is already over 11%. The terms are so egregious that it is clear that Leonite considers this company to be very high risk even in this category. If they default on this note it will cost them an additional 24% on top of everything else. There is a document in the 8K called " Security and Pledge Agreement" The note claims that the document is attached, however I am unable to find it anywhere. I would like to see what Ethema (GRST) had to give up as security for this note. The only asset that isn't already leverages in around 27% of the 75% shares of ARIA (AKA ATHI, AKA Evernia) that they claim to own. Talk about consequences of "dilutive issuance", that is how a .10 warrant can turn into one at $0.0000324 per share. LOL Those warrant renegotiated in the 2020 debt restructuring for minimum of 326,286,847 shares.



For the quarterly period ended March 31, 2020
https://sec.report/Document/0001721868-20-000426/

c) Warrants

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.


June 2022 Leonite note 8K
https://sec.report/Document/0001903596-22-000464/

The existing warrants were 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 was issued to Leonite.