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MICROCAP DAILY
Thursday, November 11, 2021
Ethema Health Corp (OTCMKTS: GRST) Powerful Runner as ARIA Treatment Center Secures New Licenses & Expansion of ARIA Property - September 27, 2021
Ethema Health Corp (OTCMKTS: GRST) is making a strong move northbound in recent days on a massive increase in trading volume as many new investors jump on board. GRST is quickly transforming into one of the most active stocks in small caps attracting legions of new shareholders and becoming among the most discussed stocks in small caps. Microcapdaily reported on GRST back in November 2020 noting at the time: “GRST management has been busy behind the scenes, paying off its convertible debt and recently filing a 10Q and a 10K. The Company’s lender; Leonite has the option to buy 20% of the Outstanding Shares (OS) at .10 per share as Ethema Health Corporation.”
GRST has been putting out some impressive news in recent days stating the Department of Children and Family Services of Florida has issued the full licenses for all five levels of care for Evernia Health Center LLC (“ARIA”) after completing its audit. Aria has been operating with probationary licenses since Ethema closed on the acquisition of ARIA on July 1, 2021. ARIA scored very high on the DCF grading scale. Another positive note for the Company and ARIA was the announcement on August 31, 2021 that the City and County of West Palm Beach were donating large blocks of land for the development of a new Graduate Program Campus of the University of Florida (see link below). These lands are immediately abutting and across the street from the ARIA campus. This brings significant value to the ARIA property. ARIA has an option to purchase the property in its lease, which it intends to exercise. The Company is in talks with various investors on partnerships for the acquisition of the property. This opportunity is a windfall for the Company and it is going to determine the best course of action for realizing on this opportunity.
GRST has been busy paying down their debt load at a minimum exposure to dilution and is now pink current and just recently filed their Q2 2021 results. The Company’s management is heavily invested in GRST with Shawn Leon and his family in control of about 280 million shares. Shawn Leon is a high-level executive who has twenty-five years of experience in managing public and private development stage companies. With experience in various industries including Industrial Minerals, Aggregates, Oil and Gas, Mining, Financial, Technology, Hospitality and Medical. Mr. Leon is related to the noble and impressive billionaire Leon family from Canada.
Ethema Health Corporation (OTCPINK: 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 decade and has had much success with in-patient treatment for adults. Ethema will continue to develop world class programs and techniques for North America.
Earlier this year GRST reported the acquisition of the majority interest in the multi-million-dollar Evernia Health Center LLC (“ARIA”) which operates the ARIA addiction treatment center in West Palm Beach, Florida closed effective July 1, 2021. The new licenses required to be issued by the Department of Children and Families of Florida when there is an ownership change in an addiction treatment center operator, were received by ARIA on June 30, 2021 for all five levels of addiction treatment care that ARIA provides. The Company now owns 75% of the common shares of American Treatment Holdings, Inc. (“ATI”) which owns 100% of the interest in Evernia Health Center, LLC. The Vendor retains 25% of the shares of ATI. In addition to advances in the form of an operating loan that the Company had advanced to ARIA as part of the consideration, the Company also issued to the Vendor 100,000,000 shares of Ethema common stock and agreed to pay the vendor $50,000.00 in cash. The cash portion has been partly paid and the balance is expected to be paid within the coming month. ARIA will generate approximately $1.8 million in revenue for the second half of 2021 based on current run rates. The Company will be looking to expand revenues for ARIA through expansion of the current facilities.
At the time of closing the Company had loaned ARIA approximately $1.1 million to fund its start-up all of which it had borrowed from various lenders over the previous 15 months. A large portion of the loans were variable rate loans and most of these loans were either repaid with new longer-term loans with fixed conversion prices, or have been partly converted to equity. Since the beginning of the year 786,429,791 new shares have been issued of which 100,000,000 were for the acquisition, 102,353,037 were for warrants related to the financings and 584,076,754 has been for debt conversion eliminating over $550,000 in debt.
The Company retains the right to repay the debt it still owed and expects to begin using the cash it receives from ARIA as repayments of its loans to pay down more debt in order to reduce further conversions. The Company does expect to see some additional debt converted to equity before repaying all of the debt but the conversions should be greatly reduced
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