Headline: Ethema acquires 25% minority stake in ARIA subsidiary, announces recapitalization plan.
West Palm Beach, FL, May 17, 2024 – Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”), is pleased to announce that on May 16,, 2024, it closed on a deal to acquire the 25% share (the “Interest”) of American Treatment Holdings Inc. (“ATHI”) that it did not already own. This brings the total holding in ATHI to 100%. ATHI owns 100% of the ARIA operating subsidiary that runs a 62-bed addiction treatment center in West Palm Beach, Florida. The total price paid for the Interest was $1,100,000. The cash component of the acquisition was $625,000 and the balance was funded with a promissory note of $475,000 given to the Seller which will be paid over 18 months.
The Company presented at a series of three investor conferences beginning in the middle of January and ending in the middle of March and a webinar at the end of March. The plans presented at these events included a plan to raise bridge loan funds to fund both the purchase of the aforementioned minority interest and an additional location in Boca Raton. The Company has raised $1,200,000 in bridge loan funding to date and lined up an additional $300,000 to fund the expansion into the Boca Raton location when that is finalized. The purchase of the minority interest was an important first step to be able to expand the ARIA subsidiary without the need to raise additional financing from the minority partner.
Once the Boca Raton location acquisition is complete, the Company will focus on the plan to raise $5,000,000 in equity financing in order to pay off the bridge loans and provide further growth capital. These steps were all presented to potential investors over the last three months. The Company’s $5,000,000 Reg A+ offering has not been successful to date and the offering will be withdrawn or amended by the end of June. The Company strongly believes that the value of the offering is very good and even better given that these steps are now coming to fruition. The Company may not need to use the Reg A+ offering as a method to complete the $5,000,000 equity raise as there has seen significant interest in the equity raise from institutional investors. The Company will be seeking an up-listing to a senior exchange in conjunction with the equity raise.
Mr. Shawn Leon, Company CEO reported, “We are pleased to report that we have been able to increase our ownership in the ARIA subsidiary as the operating unit continues to increase revenue and net income with every month of 2024 up from the same months in 2023. By adding detox and residential beds in the Boca Raton location under the ARIA management team and infrastructure, it will significantly increase the profitability of those beds giving ARIA a real boost in its already great performance numbers. Finally, although we are financing these two very important steps with bridge loan debt, the value of what we now own 100% of will be great enough to raise equity at significantly improved valuations and to finally get to a debt free balance sheet fulfilling our mission of revenue growth and the elimination of debt. This is a good day for Ethema.”
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