Ethema Health Corp (GRST)

[Bubae]

All one needs to do is look at the use of the revolving credit line to see the cash flow stress that the company is experiencing. The company took a draw on February 1st after they secured the credit line and according to the subsequent events section of the filing they repaid $186,120 of principal and interest in April and May. According to the chart on page 17 of the quarterly the company took three draws on May 1st, 12th, and 14th totaling $320K. Then again in the subsequent events section we see another draw of $130,000 on May 15th for a total of $450K drawn on the credit line in May. This draw on the 15th of May was used to repay a draw taken on February 15th. So now Ethema Health is using revolving credit line draws to pay off a previous draw? The interest on this money is 5% a month or an APR of 60%. 🙄 Looks like they may plan to cover that $40K commitment fee with the regulation "A" offering. Shawn Leon has big plans for this badly need capital infusion from the offering. Will retail show up to buy it after the inevitable split is the question.


For the quarterly period ended March 31, 2024
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000792935/000190359624000371/grst_10q.htm

Revolving line of credit

On February 1, 2024 Ethema Health Corporation, American Treatment Holdings Inc, and Evernia Health Center LLC entered into a secured revolving line of credit agreement (“ Agreement”) with Testing 123, LLC. The draw under the is limited to a maximum of 80% of the Receivables balance as provided to the Lender, subject to the maximum borrowing under the Term Loan Agreement of $1,000,000. The interest on the term loan is 5% per month. The revolving credit line is valid for a period of two years and each draw will have a maturity date that is two years from the draw date, with an origination fee of $1,000 per draw. Each loan may be prepaid at any time without penalty. The Company will pay a commitment fee of $40,000 to the borrower in common shares on the completion of a public offering, unless no such offering takes place within a year, whereby the outstanding principal will be increased by $40,000. The revolving credit line is secured by all assets, tangible and intangible of the Company and its direct and indirect subsidiaries, American Treatment Holdings, Inc. and Evernia Health Center, LLC.


Page 24
17. Subsequent events
Revolving line of credit

Between April 8, 2024 and May 2, 2024, the Company repaid $186,120 of principal and interest on the initial revolving line of credit advance on February 1, 2024.

On May 15, 2024, the Company drew down a further $130,000 on the revolving line of credit, of which $85,800 was used to repay the second line of credit advance on February 15, 2024, the balance of $44,200 was used for working capital purposes.