Ethema Health Corp (GRST)

[Bubae]

Judge their actions not their words. The Labrys notes defaulted and was exchanged for the June Leonite note. That was 596K of new debt exchanged for hte $745K Labrys fund note, with a variable interest that updates daily, and the fixed rate resets to any subsequent dilutive issuance price. Default interest is 24% calculated back to day one of the note. The note is to be paid first and foremost before all other notes, nothing has been paid on the note as of the end of Q3, with only 3 months left on the note. The March 1st press release rings pretty hollow. The debt situation has gotten much worse, not better. 2022 has been a fairly wasted year for debt retirement. They can't keep borrowing from future earnings forever and that offering isn't yet viable given the current narrative and share structure. There also is not sense of urgency n their part so have to wonder if the offering is for show and liquidation may already be in the works. Their silence off the quarterly filing isn't good.

The Company growth is real and the elimination of variable rate debt is real.

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


Ethema Continues to Reduce Debt
March 01, 2022 10:19 ET | Source: Ethema Health Corporation

leaves a total balance due on the note of $386,000.00. The amendment which also altered the Maturity Date to May 31, 2022 calls for the balance to be paid in the following amounts on the following dates; $100,000.00 on March 31, 2022, $150,000.00 on April 30, 2022 and $136,000.00 on May 31, 2022. As long as these payments are made Labrys has agreed not to make any conversions under the note. A similar amendment was made to the Labrys $230,000.00 note dated June 2, 2021 such that there will be no conversions under the note as long as the note is repaid in two equal payments of $127,650.00 on May 31, 2022 and June 30, 2022. The maturity date of the note was amended to June 30, 2022.

Mr. Shawn Leon, Company CEO, reported, “We are dedicated to the elimination of any debt that the company has with any feature of variable rate conversions. There has been over $600,000 in this type of debt eliminated in the last four months. We have good relationships with all of our lenders and the lenders have worked with the Company to this end. We will use cash flow from operations, new fixed rate debt, and market rate equity to do our very best to make this happen in the first half of 2022.”


Leonite Fund I, LP

Effective June 1, 2022, The Company entered into a Note Exchange Agreement whereby the convertible promissory notes entered into with Labrys Fund LP on May 7, 2021, with. A principal outstanding of $341,000, and on June 2, 2021 with a principal outstanding of $230,000 and accrued interest thereon of $25,300, were exchanged for a new Senior Secured Convertible Promissory note in the principal amount of $745,375, including an OID of $149,075. The Note matures on March 1, 2023, and bears interest at the minimum of 10% per annum or the Wall Street Journal quoted prime rate plus 5.75%.

The convertible note is secured by all of the assets of Ethema Health Corporation and Addiction Recovery Institute of America, LLC.