Ethema Health Corp (GRST)

[Bubae]

So who owns what of the Evernia treatment center? This is a huge black box, or should I say black hole that Ethema's borrowed cash flows into. We know that Lawrence (Larry) Hawkins sold this pig in a poke to Ethema Health (GRST) and retained 25% ownership. I will get back to Larry Hawkins and the Evernia Health hustle that Shawn bought into in another segment. Shawn Leon boasts a 75% ownership of the Evernia treatment center, the only treatment center.

Then there are the secured notes taken out to fund this scheme in the form of options for direct shares of ATHI, the holding company of the treatment center. Nearly all of the original 51% Ethema Health (GRST) purchased in the treatment center is secured by these options. The plan was supposed to pay these note holders with proceeds from the treatment center but as we know there is no cash flow to pay on this debt. The statement about the options in the Q2 2023 filing shows $686K owed to these options holders. Once the principle is paid these holders still retain 50% ownership of the treatment center as defined per their secured shares.

Leonite actually had two transactions for debt secured by options. They had a July 10th 2020 deal and a separate one on October 29th 2020 according to the December 2020 8K filing. We see this reflected in the new number in the Q1 2021 filing bringing the new number up to $655K. This number held until the Q1 2022 filing when we see an adjustment down to the current $396K. I see no notes or other explanation for the adjustment. Q3 2020 filing shows the Leonite $300K worth 2,666,667 shares of ATHI, as of June 30th 2023 the $396K is worth 4,000,000 shares of ATHI.

Bottom line is that you will not find anywhere in the filings that details what Ethema Health (GRST) actually owns of the Evernia treatment center. It doesn't appear at this point the company owns much of anything other than the debt and the need to constantly borrow more cash to support the real investors and owners of the treatment center.





December 2020 8K with 30 documents detailing the deals from that debt restructuring
https://www.otcmarkets.com/filing/html?id=14554778&guid=_lg-kWrdbx3aJth


For the quarterly period ended June 30, 2023
https://www.otcmarkets.com/filing/html?id=16878947&guid=fPg-kqNc5d5fwih
18. Commitments and contingencies



a. Options granted to purchase shares in ATHI



On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”). The Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase 4,000,000 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $400), based on the advances that Leonite made to the Company totaling $396,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.



On September 14, 2020, the Company entered into a five year option agreement with Ed Blasiak (“Blasiak”) whereby the Company agreed to sell to Blasiak a portion of the total outstanding shares of ATHI. The Company provided Blasiak an option to purchase 571,428 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $57), based on the advances that Blasiak made to the Company totaling $50,000. Blasiak shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Blasiak to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.



On October 29, 2020, the Company entered into a five year option agreement with First Fire whereby the Company agreed to sell to First Fire a portion of the total outstanding shares of ATHI. The Company provided First Fire an option to purchase 1,428,571 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $143), based on the advances that First Fire made to the Company totaling $120,000. First Fire shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by First Fire to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.



On October 29, 2020, the Company entered into a five year option agreement entered into with Bauman, so that the Company agreed to sell to Bauman a portion of the total outstanding shares of ATHI. The Company provided Bauman an option to purchase 1,428,571 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $143), based on the advances that Bauman made to the Company totaling $120,000. Bauman shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Bauman to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.




For the quarterly period ended March 31, 2022
https://www.otcmarkets.com/filing/html?id=15821144&guid=fPg-kqNc5d5fwih

20. Commitments and contingencies

a. Options granted to purchase shares in ATHI

On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”), the Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase 4,000,000 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $400), based on the advances that Leonite made to the Company totaling $396,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.


For the quarterly period ended March 31, 2021
https://www.otcmarkets.com/filing/html?id=14979734&guid=fPg-kqNc5d5fwih

On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”), the Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase a 33% of ATHI from the Company for a purchase consideration of $0.0001 per share, based on the advances that Leonite made to the Company totaling $655,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.



For the quarterly period ended September 30, 2020
https://www.otcmarkets.com/filing/html?id=14506428&guid=_lg-kWrdbx3aJth

6. Other investments

On July 12, 2020, the Company entered into a five year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”), the Company agreed to sell to the Transferees 20% of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase 2,666,667 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $267), based on the advances that Leonite and others made to the Company totaling $300,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.