I would have to disagree. First, the line total outstanding shares of ARIA is used in the options. Also the 30% of ARIA total shares in the options for the consideration of $600K matches up well with the $460K that Ethema (GRST) just paid for the additional 24%.One thing to pay attention to is how little they paid for ARIA and how enormous their debt is. Other than the revenue from the property leased in Canada that throws off a bit under 100K a quarter in revenue, ARIA is all they have.
"...agreed to sell to the Transferees 30% of the total outstanding shares of ATHI...."
They paid 100 million shares plus $50K cash for 24% of ARIA. Per the “subsequent events” section of the Q2 filing those shares were issued on July 1st. The closing share price that day was .0041. So $410K plus the $50K, around $460K for about 25% of the company in a leased facility. So essentially a $1.8 to $2 million dollar entity and traders here believe it is going to throw off how much net earnings in a quarter? Either the person who is selling ARIA is a fool or those revenue projections promoted by some are very optimistic.
Look at the example of the options granted to note holders last year as part of the refinancing deal. Some might say that those options haven’t exercised but I believe they certainly have. First the price to exercise is nothing. The First Fire options agreement is for 1.4 million shares of ARIA at .0001 a share or $143. Yes one hundred forty three dollars for the shares of ARIA, not Ethema (GRST). It appears to me that the options intent are to pay the money owed through distributions of ARIA earnings until the money is repaid to the note holders. Once repaid half of those shares goes back to Ethema (GRST), but note holders retain half. Notice in the options agreement that the 30% referred to is for consideration of $600K capital from the note holders reinforcing the earlier valuation for ARIA, in the leased facility, of around $2 million.
So again, How much of ARIA’s actual earnings will hit Ethema’s balance sheet to offset the quarterly losses? How much net earning can be expected of a company that appears to be worth about $2 million? Want to bet they file Q3 as late as possible?
On July 1, 2021, in terms of the amendment to the stock Purchase Agreement entered into on June 30, 2020 between the Company and the Q Global Trust, LLC, and American Treatment Holdings, the company issued 100,000,000 shares of common stock thereby closing the transaction and acquiring a controlling interest in American Treatment Holdings.
On April 28, 2021, the Stock Purchase Agreement date June 30, 2020 between the Company and the Q Global Trust, and ATHI was amended whereby the option to purchase an additional 9% of ATHI for $50,000 was amended to purchase an additional 24%, an increase of 15% over the prior option, for 100,000,000 shares of common stock. The remaining condition to closing, the receipt of approval for the change of ownership of the license from the Department of Children and Family Services of Florida, was satisfied by the probationary approval, which was received on June 30, 2021. The Company exercised the option and issued the 100,000,000 shares of common stock and paid $25,000 of the $50,000 due to the Seller, in terms of the amended agreement as of the date of this report. In addition to the consideration paid for the additional equity the Company agreed to execute a promissory note for the payment of any unpaid management fees at the time of Closing such that the unpaid fees shall be paid pari-passu with the repayment of the Loan Agreement and Seller agrees that any funds advanced to the Company by Behavioural Health Holdings, LLC shall be forgiven and considered contributed capital to ATHI. The Company agrees to advance up to $1,100,000 under the Loan Agreement for the funding of the operations of ATHI as required without any contribution required by the Seller.
On October 29, 2020, the Company entered into a five-year option agreement with FirstFire and other investors (collectively the “Transferees”), the Company agreed to sell to the Transferees 30% of the total outstanding shares of ATHI. The Company provided First Fire an option to purchase 1,428,571 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $142.86), based on the advances that First Fire and others made to the Company totaling $600,000. First Fire shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by First Fire to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option. The Option Agreement is filed as Exhibit 10.3 attached hereto.
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