Ethema Health Corp (GRST)

[Bubae]

Yep, as always the same story and a new group of retail to con retail out of their money. Lets get back to that interestingly timed video with a little context. The script that guy was using looked a lot like a 2017 research paper White Diamond did back in 2017. Points he makes in his manic video also appears in the research paper include talking about the size of the substance abuse and addiction rehab market. Both talk about Acadia Healthcare Company (ACHC) representative of the industry and that they are too big for substantial gains and the video claims that they can't "consolidate" the industry. The Markowski video claims that Ethema Health is headed for a billion dollar valuation and back in 2017 the research price target was $0.24. Take a look at the five year charts below for a quick snapshot for the performance comparison.

Ethema Health had a lot going for it back 2017 but the subsequent history leading up to the current situation is not pretty. If not for the $9 million leaseback deal to settle a bit more than $2.3 million in mostly defaulted debt, guaranteed personally by Shawn Leon and his wife Eileen Greene, Ethema Health would be out of business. The Delray Beach properties, one sold and one handed over to Leonite for debt in 2019. The facility at 5400 East Avenue in West Palm Beach closed in January 2020. They wouldn't be able to claim any ownership of a treatment center again until the summer of 2021. In June 2023 Ethema Health hands over Cranberry Cove Holdings (CCH), the Muskoka, Canada property mentioned in the research paper, to Leonite for what was debt secured by the property.

Michael Markowski Video
https://share.vidyard.com/watch/T7UNySg1pKnQ2EfgtFEyAx


White Diamond Research Ethema Health (GRST)
https://whitediamondresearch.com/wp-content/uploads/2017/08/GRST-WDR-report.pdf

• Upside can be substantial, a 10x+ return is possible in the next few years. Downside
  risk is limited because its assets, primarily its real estate, put its book value at $0.066 per
  share.
  
  
• Our discounted cash flow analysis puts the current value of the stock at $0.24 per share.
  
  
• The only two other behavioral health publically traded pure plays are Acadia Healthcare
  (ACHC) and AAC Holdings (AAC). These companies are on a strong uptrend, but
  neither have the outsized return potential as an investment in Ethema Health
  
  
• An investment in Ethema Health has the potential for outsized returns with rapidly
  growing drug and alcohol addiction and need for treatment in the United States and especially
  Florida.

For the fiscal year ended: December 31, 2018
https://www.sec.gov/Archives/edgar/data/792935/000172186819000199/f2sgrst10k041019.htm

Revenue
Revenue was $432,515 and $929,416 for the years ended December 31, 2018 and 2017, respectively, a decrease of $469,901 or 53.5%.

Operating Expenses
Operating expenses was $3,316,833 and $2,382,573 for the years ended December 31, 2018 and 2017, respectively, an increase of $934,260 or 39.2%...

Operating loss
The operating loss was $2,884,317 and $1,453,157 for the years ended December 31, 2018 and 2017, respectively, an increase of $1,431,159 or 98.5%...


For the fiscal year ended: December 31, 2019
https://www.sec.gov/Archives/edgar/data/792935/000172186820000304/f2sgrst10k070620.htm

Revenue
Revenue was $359,947 and $432,515 for the years ended December 31, 2019 and 2018, respectively, a decrease of $72,568 or 16.8%.

Operating Expenses
Operating expenses was $4,559,682 and $3,316,832 for the years ended December 31, 2019 and 2018, respectively, an increase of $1,242,850 or 37.5%.

Operating loss
The operating loss was $4,199,735 and $2,884,317 for the years ended December 31, 2019 and 2018, respectively, an increase of $1,315,418 or 45.6%.

Page F-6
The Florida Purchase
Immediately after closing on the sale of the assets of the Canadian Rehab Clinic, the Company closed on the acquisition of the real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements The purchase price for the Seastone assets was US$6,070,000 financed with a purchase money mortgage of US$3,000,000, and US$3,070,000 in cash.

On May 23, 2018, the Company converted a purchase agreement with AREP 5400 East Avenue LLC to a ten year lease agreement for a substance abuse treatment center in properties located at 5400, 5402 and 5410 East Avenue, west Palm Beach, Florida. The Company was also granted an option to purchase the property at a price of $17,250,000, increasing by $750,000 per month.

The Company ceased operations in its Delray Beach properties and relocated its treatment facility to the newly leased premises in West Palm Beach.
On April 2, 2019, the Company disposed of the real property located at 801 Andrews Avenue, Delray Beach for gross proceeds of $3,500,000, retaining the property at 810 Andrews Avenue Delray Beach, Florida.

On October 10, 2019, the Company transferred the real Property located at 810 Andrews Avenue, Delray Beach, Florida to Leonite Capital, LLC, for net proceeds of $1,398,510, which proceeds were offset against the convertible loan owing to Leonite.


For the fiscal year ended: December 31, 2020
https://www.sec.gov/Archives/edgar/data/792935/000172186821000220/f2sgrst10k041221.htm

West Palm Beach Treatment Operations

The Company treatment operations were based in our leased premises at 5400 East Avenue, West Palm Beach, Florida, USA.

This facility was operated until January 30, 2020, we have subsequently ceased operations at this facility and are currently exploring new treatment facility options.

Greenestone Muskoka Treatment Facility

The Greenestone Muskoka Treatment Facility is located in Bala, Ontario at 3571 Highway 169. The property is 43 acres in size and contains approximately 48,000 square feet of buildings. The property is owned by Ethema’s wholly owned Canadian subsidiary CCH and has been leased to the new owner of the Muskoka Clinic for a term of five years,...


For the fiscal year ended: December 31, 2023
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000792935/000190359624000279/grst_10k.htm

On June 30, 2023, the Company entered into an exchange agreement with Leonite Capital, LLC, whereby it exchanged 400,000 Series B shares with a value of $400,000 plus accrued dividends thereon of $61,184 for its entire shareholding in its property owning subsidiary, CCH. The Series B shares were cancelled upon consummation of the transaction.