Replies to post #38291 on Ethema Health Corp (GRST)

[Niceguy1]

Earnings absolutely NOT priced in to the current pps simply because there is no track record after acquisition to go by. Only the ceo word...which is not enough

[Bubae]

Don't put words in my mouth or mischaracterize my opinions to support your own. I do not tell traders not to buy. I simply post from the filings and remind traders that stock social media is full of hyped projections that need to be tempered by facts from the filings.

...Bubae is just the kind of guy that will tell you to not buy 99% of tickers because they have a little bit too much debt and won't be reasonably able to pay it back in a couple years...

With this one I say, buy if you can gain a flippable position, but be sure that you sell the news. even if you need to flip for a small loss, do it and be patient for a new entry in my opinion. The debt conversions in the pipe line are huge for this stock. Wash rules in these situations of small losses are inconsequential, again in my opinion and experience.

I actually like buying periods of dilution if you can catch it on the low and toward the end. The problem with this stock isn't that you are paying for elements of growth, what you are paying for is the huge debt load that is the result of repeated mistakes moving this ARIA entity around and now buying it back. The forfeiture of $3 million in deposits as a result of the failed purchase deal for the last West Palm Beach facility is a great example. That is a lot of shareholders dollars when you consider it is financed with toxic debt financiers.

The debt is supper toxic with the anti-dilution price protections ensuring that the face value is doubled. The huge warrant awards, again with nice price protections, high interest, and with the December refinancing 8K, nice, cheap options for direct ownership of ARIA shares.

2020 Refinancing deals 8K
https://sec.report/Document/0001721868-20-000600/

https://sec.report/Document/0001721868-21-000524/
Total liabilities $19,105,744 June 31, 2021 18,448,565 Dec 30, 2020
Total assets $4,193,033
Revenues were $96,158 three months ended June 30, 2021
Net loss was $(2,626,438) for the three months ended June 30, 2021

Accumulated deficit June 30 - 47,504,454 and 44,858,784 as of March 31

https://sec.report/Document/0001721868-20-000304/

Addiction Recovery Institute of America, LLC(“ARIA”), a US registered company (formerly Seastone Delray Healthcare, LLC);
ARIA operated a treatment center in Delray Beach, Florida out of premises which it had acquired in February 2017. The treatment center was relocated and was operated out of leased premises in West Palm Beach Florida.

ARIA

On February 13, 2017, the Company, through its subsidiary, ARIA, entered into a Mortgage and Security Agreement to purchase the properties located at 801 and 810 Andrews Avenue, Delray Beach, Florida, for an aggregate principal sum of $3,000,000, bearing interest at the rate of 5% per annum, maturing on February 13, 2020, with monthly installments of $15,000.

On April 2, 2019, the Company entered into a Commercial Contract whereby the real property at 801 Andrews Avenue, Delray Beach, Florida, consisting of land and condominiums thereon, was sold to a third party for $3,500,000. This transaction closed during April 2019 and the principal mortgage liability of $2,942,526, including interest thereon was settled.

21. Subsequent events


The Company intends to continue its operations at a new location in west Palm Beach. A Letter of Intent ("LOI") was signed on February 7, 2020, with a third party that has a property lease and a pending license at its new location. The Company originally anticipated recommencing operations in February 2020, however it has been adversely affected by the COVID-19 pandemic. The LOI requires the Company to provide a working capital loan of up to $500,000. The ability to secure financing has been delayed by the pandemic. The Company is expecting to complete the working capital financing and to close the acquisition of the third party during the next month and to begin operations at the new location shortly thereafter.


The Florida Purchases and Business
On November 2, 2017, the Company entered into an agreement to purchase from AREP 5400 East Avenue LLC certain buildings in West Palm Beach, Florida, totaling approximately 80,000 square feet, on which the Company planned to operate a substance abuse treatment center. The purchase price of the Property was $20,530,000. The Company made a series of nonrefundable down payments totaling $2,940,546 in 2017 and 2018. The Company could not get the necessary financing to close on the deal.



Ethema Health Completes First Deposits on Real Estate Purchase of 174 Bed Treatment Facility
November 06, 2017 08:00 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/news-release/2017/11/06/1246898/0/en/Ethema-Health-Completes-First-Deposits-on-Real-Estate-Purchase-of-174-Bed-Treatment-Facility.html

“This property adds to the property the Company acquired in Delray Beach, Florida earlier this year where the Company has moved its principal office and where it operates a licensed treatment facility with 32 beds of community housing.”
“Ethema Health Corporation (OTCQB: GRST) operates in the behavioral healthcare space specifically in the treatment of substance use disorders. Ethema developed a unique style of treatment over the last six years and has had much success with in-patient treatment for adults.”

Ethema Expands into 174-Bed Florida Facility
DELRAY BEACH, FL, June 07, 2018 (GLOBE NEWSWIRE)
https://www.globenewswire.com/fr/news-release/2018/06/07/1518496/0/en/Ethema-Expands-into-174-Bed-Florida-Facility.html

“Mr. Shawn Leon, president and CEO of the Company, said, "It has taken us longer than we anticipated to be able to move forward with this jewel of a property, but we are now well underway with our licensing to be able to offer a full continuum of care to our clients in one location. This has been our U.S. expansion goal for several years and after exploring dozens of expansion opportunities, this is by far the best opportunity that we have seen to date.”


Ethema to Focus on Acquisitions for Growth Strategy
December 24, 2019 10:01 ET | Source: Ethema Health Corporation
https://www.globenewswire.com/en/news-release/2019/12/24/1964449/0/en/Ethema-to-Focus-on-Acquisitions-for-Growth-Strategy.html
“…a provider of healthcare services, has announced that it has signed a non-binding Letter of Intent to acquire a majority interest in an addiction treatment company. The acquisition target will have approximately $20 million in revenue for 2019 and an EBITDA of $3.6 Million. Under the terms of the LOI the Company would be required to enter into a binding agreement by February 29, 2020 and be closed by April 30, 2020. The purchase price will be determined during the due diligence process and is subject to agreement by both parties.”

“The Company has experienced sustained losses during the development of its business in Florida and is securing new financing that will allow it to stabilize earnings by buying a profitable business with positive cash flow. The Company will raise new capital to make the acquisition and to pay down some current debt. The Company has sold two of its properties in Delray Beach, Florida in 2019, reducing debt significantly and may pursue a sale of its Canadian property to eliminate any remaining debt. The Company expects some of the new capital to be debt secured by the cash flow of the acquisition and some of the additional new equity to be raised directly as equity in the acquisition. Both of these financing methods will be less dilutive on existing shareholders.”