How many others are carrying this kind of debt from previous business failures? How many borrow every month to fill what appears to be a gap between expenses and revenue collection. They have been taking out one week notes at a cost of as much as 20% from Leonite. They even missed the payment date for September according to the last filing.
They borrowed more money from Geneva Roth at the beginning of Q4. Now we learn from the March 1st press release that they made three payments totaling $150K on the $550K Labrys fund note. Where did that money come from?
The debt situation is coming to head soon. They will either need to sell the Canadian property which is highly leveraged or find a way to attract new financing. Conditions for new financing may be contingent on a reverse split in my opinion. This story and share structure will not support much more in conversions. They had to conduct that 4 day press release blitz to get the 150 million new shares into the market at the beginning of March.
Ethema Continues to Reduce Debt March 01, 2022 10:19 ET | Source: Ethema Health Corporation
On February 28, 2021, the Company made its third payment since the beginning of the year to Labrys Fund LP (“Labrys”) pursuant to an amendment to the Labrys $550,000.00 note dated May 7, 2021. On January 10, 2022, January 31, 2022 and February 28, 2022 the Company made payments of $25,000.00, $50,000.00 and $75,000.00 respectively to Labrys.
ETHEMA HEALTH CORPORATION NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 13. Short term loans (continued)
"On April 29, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $46,000 for net proceeds of $40,000 after an original issue discount of $6,000. The Note had a maturity date of May 3, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."
The Company repaid the note on May 3, 2021 for $46,000.
"On April 30, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $140,000 for net proceeds of $126,000 after an original issue discount of $14,000. The Note had a maturity date of May 7, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."
The Company repaid the note on May 10, 2021 for $140,000.
"On May 27, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $70,000 for net proceeds of $60,000 after an original issue discount of $10,000. The Note had a maturity date of June 4, 2021 and bore interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."
The Company repaid the note on June 4, 2021 for $70,000.
"On September 15, 2021, the Company, entered into a secured Promissory Note in the aggregate principal amount of $60,000 for net proceeds of $50,000 after an original issue discount of $10,000. The Note had a maturity date of September 23, 2021 and bears interest at the rate of zero percent per annum from the date on which the Note was issued until the same became due and payable."
The note was still outstanding at September 30, 2021.
23. Subsequent events
On October 1, 2021, the Company entered into a Securities Purchase Agreement pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $95,200, for net proceeds of $85,000 before the payment of legal fees and origination fees amounting to $3,750. The note has a maturity date of October 1, 2022 and bears interest at the rate of 8.0% due immediately on the issuance ate of the note. per annum. The outstanding principal amount of the note is payable in nine monthly payments of $11,424 commencing on November 15, 2021. The note is convertible into shares of common stock upon an event of default at the election of the purchaser. The conversion price is 75% of the lowest trading price for the preceding five days prior to the date of conversion.
Liquidity and Capital Resources
..."Over the next twelve months we estimate that the company will require approximately $1.5 million in working capital as it continues to develop the Evernia facility and it is also exploring several other treatment center options and sources of patients throughout the country. The company may have to raise equity or secure debt. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, the Company’s liquidity risk is assessed as medium."...
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