Ethema restructures its debt and raises new financing for

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WEST PALM BEACH, FL, Jun 12, 2020 (GLOBE NEWSWIRE) – via NEWMEDIAWIRE – Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”), a health service provider, previously announced that he was working to restructure his debt and acquire a majority stake in a company that would give Ethema a new treatment center in West Palm Beach. This press release will update the status of these negotiations as well as previous announcements regarding letters of intent for other acquisitions and general business matters. This release will serve as a general update on these matters and more detailed information will follow in other press releases and regulatory documents.

New financing and acquisition

The Company has secured lists of conditions from two of its existing lenders for new investments to finance the acquisition and operation of its new drug treatment facility at 950 Evernia Street, West Palm Beach, Florida. The new notes will be for a principal amount of $ 330,000.00 including an OID of $ 30,000. The net proceeds accruing to the Company after delivery of the OID and legal fees will be $ 293,000.00. Draft documents have been submitted and the Company hopes to complete this transaction next week. The acquisition announced in January 2020 is expected to be finalized immediately after the closing of the new financing. The new facility will be approved for all levels of care. There is a capacity of 60 beds on the property. The Company plans to scale up its virtual care that it developed in 2019, as this will become an important aspect of treatment in the future. The company expects a high demand for drug treatment services in the foreseeable future. The location and building are ideal for operating a drug treatment business. The Company plans to use the latest developments and methods to make the facility a COVID-19 free zone for its customers.

Amendments to Debt and Warrants

The following lenders and warrants have renegotiated the terms of their debt and / or warrants. All these agreements provide for blockages when converting into shares. Some of these agreements are finalized and others are awaiting completion of documentation.

  1. Power Up Lending Group Ltd. – Paid.
  2. Firstfire LLC Global Opportunities Fund – Amendment signed with Lock-up pending two payments of $ 25,000.00 each at the end of June and July 2020.
  3. Labrys Fund, SEC – Endorsement signed with Lock-up pending eight monthly payments of $ 25,000.00 each as of October 15, 2020.
  4. AUctus Fund, LLC (“Auctus”) – The modification is pending. The agreement involves a blockage with a payment plan of nine monthly installments of $ 25,000.00 each starting October 1, 2020. Auctus is participating in the new financing.
  5. Leonite Capital LLC (“Leonite”) – Signed term and final documents pending. The list of conditions includes the following changes:
    1. The principal outstanding would be reduced to $ 1,250,000.00 and all existing defaults would be canceled.
    2. A portion of $ 700,000 of the note would be converted into 10% redeemable preferred shares of the Company’s Canadian real estate holding subsidiary, Cranberry Cove Holdings Ltd.
    3. $ 400,000 of the note would be converted into 6% redeemable Series A preferred shares of the Company.
    4. A portion of $ 150,000 of the note would remain unpaid with the following changes:
      1. All existing defects would be canceled
      2. No conversion between months 1 and 3
      3. Minimum leak conversion between month 4 and month 6
      4. Six equal monthly payments of the balance starting from month 7

The documentation for making the Leonite Amendments is still in draft form and subject to legal review.

  1. All existing Leonite warrants will be exchanged for a new five-year Leonite warrant granting Leonite the option to purchase up to 20% of the outstanding common shares at $ 0.10 subject to adjustment. . Any portion of the warrant that is exercised will reduce the remainder of the remaining warrant based on the total number of common shares outstanding at the time of exercise. The warrant cannot be exercised during the first three months of the term of the warrant.
  2. Series N Convertible Notes – There is approximately $ 3 million of Series N Convertible Notes outstanding plus accrued interest. A portion of these notes have extended their term and the Company expects to renegotiate the term and / or conversion of the notes in the near future.
  3. Shareholder Loan – Over $ 3 million in shareholder loans remains to be paid in the near future.

Other acquisitions

The company entered into two letters of intent before the end of 2019 and those two letters of intent expired before the company could raise financing to complete these acquisitions. An effort is still underway on a non-exclusive basis in both cases to participate in acquisition financing for part of these companies. There is no concrete development in either of these cases.

Company actions:

The audit of the Company’s annual financial statements is nearing completion and the filing of the 10k is expected within the next 7-10 days and the filing of the 10Q for the first quarter is expected to follow shortly thereafter.

CEO statement:

“Despite the serious setbacks experienced by the company over the past 6 months, my wife and I remain committed to the success of the company. We have continued to support the Company financially and believe wholeheartedly in its ability to provide quality drug treatment services to clients. We have personally guaranteed many of the Company’s obligations and fully support the Company going forward. The future of drug treatment services is expected to be very bright given the severe effects on many people of isolation and fear of the COVID-19 virus, not to mention the trauma of losing a loved one under these difficult circumstances. . We aim to be a part of the healing and recovery from these extraordinary times and would like to thank all of the various lenders, shareholders and stakeholders who have supported us in the restructuring and given us the opportunity to help as many people as possible to the future, ”said Shawn Leon, CEO of the company.

Some of the actions described in this update have not yet been finalized and the Company will provide an update on these items as they are completed.

About Ethema Health Corporation

Ethema Health Corporation (OTCQB: GRST) operates in the field of behavioral health specifically in the treatment of substance use disorders. Ethema has developed a unique style of treatment over the past ten years and has had great success with the treatment of adult inpatients. Ethema will continue to develop world class programs and techniques for North America. For more information, you can visit our website at www.ethemahealth.com.

Notice Regarding Forward-Looking Statements

The information contained in this document includes forward-looking statements. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially. different from the results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements as they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and probably will, have a material effect on actual results, activity levels, performances or achievements. Any forward-looking statement reflects our current views regarding future events and is subject to these and other risks, uncertainties and assumptions regarding our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons why actual results could differ materially from those anticipated in such forward-looking statements, even if from new information becomes available in the future.

For more information please contact:
Ethema Health Society
Text to 416-500-0020
[email protected]


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