Ethema Health Corp (GRST)

[Bubae]

The most telling point in the last press release for me was the inability to acquire an agreement on Leonite's $745K June note that matured March 1st 2023. This is the third forbearance extension agreement and I for one would love to see what in in the agreements. Even with an agreement those notes will accrue interest and penalties until they can be converted of otherwise paid. For the $745K June note, the current quote for the WSJ prime rate is 8.25% which brings the note interest rate to 14%. That is if they aren't getting the 24% default interest per the agreement. If I were Leonite, I would just sit back and enjoy the ride.

However you can't deposit note agreements in the bank. They will still have the chore of conning retail traders into buying those share conversions for cold hard cash. That is where the regulation "A" offering comes in from what I see. Get ready for massive dilution which will absolutely require a reverse split in my opinion.

The original $76K May 3, 2022 note will be worth more than more than $160K by June 30th, and the original March 1, 2022 note for $124K will be in excess of $250K. Keep in mind that the company only received net proceeds of $161K from these two notes when issued. These two notes alone will be worth more than $410K by the end of the month. And you think you have credit card troubles.


Ethema Reports Updates and Extends Forbearance
June 08, 2023 13:50 ET
https://www.globenewswire.com/en/news-release/2023/06/08/2685133/0/en/Ethema-Reports-Updates-and-Extends-Forbearance.html

The company is in negotiation with its senior lender on repayment of its debt and convertible notes. The lender has agreed to extend the original forbearance agreement expiring June 8, 2023, until June 28, 2023 to agree to a plan for repayment of the Leonite debts and convertible loans.


8. Short-term Notes
Leonite Capital, LLC
Secured Promissory Notes

On March 1, 2022, the Company entered into a secured Promissory Note in the aggregate principal amount of $124,000 for net proceeds of $100,000 after an original issue discount of $24,000. Due to the failure to repay the note by due date, a penalty of $37,200 was added to the principal outstanding and the Company incurs a monthly monitoring fee of $2,000 per month. In addition the note earns interest at a default rate of 24% per annum on the total balance outstanding, including the monthly monitoring fee and accrued interest.

The Note had a maturity date of April 1, 2022. This note has not been repaid at the date of this report. We are in negotiations with Leonite to settle the balance outstanding and no default has been declared.

The balance outstanding on the note, including default penalty, interest accrued and monthly monitoring fees is $231,481 as of March 31, 2023.



On May 3, 2022, the Company, entered into a secured Promissory Note in the aggregate principal amount of $76,250 for net proceeds of $61,000 after an original issue discount of $15,250. Due to the failure to repay the note by due date, a penalty of $22,875 was added to the principal outstanding and the Company incurs a monthly monitoring fee of $2,000 per month. In addition the note earns interest at a default rate of 24% per annum on the total balance outstanding, including the monthly monitoring fee and accrued interest.

The Note had a maturity date of June 17, 2022. This note has not been repaid at the date of this report. We are in negotiations with Leonite to settle the balance outstanding and no default has been declared.

The balance outstanding on the note, including default penalty, interest accrued and monthly monitoring fees is $143,634 as of March 31, 2023.

For the quarterly period ended June 30, 2022
https://www.otcmarkets.com/filing/html?id=16018411&guid=5zm-kqGiKufgcVh

Leonite Fund I, LP

Effective June 1, 2022, The Company entered into a Note Exchange Agreement whereby

..., were exchanged for a new Senior Secured Convertible Promissory note in the principal amount of $745,375,... .

...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.

June Leonite Note 8K
https://www.otcmarkets.com/filing/html?id=15961451&guid=5zm-kqGiKufgcVh

...The obligations of the Borrower under this Note are secured pursuant to the terms of the security and pledge agreement (The "Security and Pledge Agreement" and collectively the Purchase Agreement, the "Related Documents"...