Ethema Health Corp (GRST)

[Bubae]

That May 17th press release pretty much tells everyone what is coming. They have a serious cash crunch to deal with but Shawn Leon has shown that he is more than willing to pay penalties on notes past due. The story continues to be that Ethema Health is trying to buy the Evernia Treatment center. That deal was negotiated in the summer of 2020 and didn't close until a year later.

We have the third extension of the Mirage Realty note now passed as of yesterday of $259,514 as of March 31st. The balance on the Bauman note as of March 31st was $124,769 and can convert at any time with an automatic conversion feature date of August 9th. The company borrowed $450K in May against the revolving credit line at 60% APR, 5% a month. We see that Ethema Health also now has $1.2 million in bridge loans to deal with. I see a new $600K loan dated May15 that matures on November 15th and earned 24% per MONTH as a default penalty. This note can be converted into shares of the treatment center (ATHI) in the event of default.

The company's stock has been useless in terms of conversions or raising capital for more than two years now. How much longer can Shawn Leon continue this borrow from Peter to pay Paul Ponzi scheme? They need a healthy reverse split to do two things. One to make the regulation "A" offering viable and the other would be to meet the minimum price needed for the stated up-list attempt. Regulation "A" offering shares are immediately tradable when received. If you all have never experienced a regulation "A" offer which usually comes after a split you are in for a treat. 😆


Ethema Acquires 25% Minority Stake in ARIA Subsidiary
NewMediaWire
Fri, May 17, 2024
https://finance.yahoo.com/news/ethema-acquires-25-minority-stake-134910442.html

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 The Company's $5,000,000 Reg A+ offering has not been successful to date and the offering will be withdrawn or amended by the end of June....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 will be seeking an up-listing to a senior exchange in conjunction with the equity raise.


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



Senior secured promissory note

On May 15, 2024, the Company, together with its subsidiaries, Evernia Health Center, LLC, American Treatment Holdings Inc, and Shawn Leon, entered into a Senior Secured Promissory Note (“Senior Note”)with an accredited investor for gross proceeds of $600,000, maturing on November 15, 2024 and bearing interest at 6% per annum for the first two months, 9% per annum for the following two months and 18% per annum for the last two months. The note also provides for default interest at a maximum of 24% per month, subject to the Usury Act. The Senior Note is senior to all other indebtedness including the promissory note issued to Q Global Trust, LLC (“Q Global”), except for allowed payments in terms of the Q Global agreement, as described below. The Senior Note, upon an event of default, may be converted into shares of ATHI at the rate of 1% of ATHI for each $24,000 of indebtedness, capped at $633,000. The proceeds from this note were used as the down payment for the acquisition of the remaining 25% of ATHI held by the minority shareholder.



Results of operations for the three months ended March 31, 2024 and 2023.

Revenues
Revenues were $1,300,100 and $1,300,046 for the three months ended March 31, 2024 and 2023, respectively, an increase of $54 or 0%.

Operating Expenses
Operating expenses were $1,529,175 and $1,225,020 for the three months ended March 31, 2024 and 2023, respectively, an increase of $304,155 or 24.2%. The increase is primarily due to the following:

Operating loss (income)
The operating loss was $(229,074) and operating income was $75,026 for the three months ended March 31, 2024 and 2023, respectively, an increase in loss of $304,100 or 405.3%

Net loss
Net loss was $374,203 and $175,717 for the three months ended March 31, 2024 and 2023, respectively, an increase of $198,486 or 113.0%.