Ethema Restructures Debt and Raises New Financing to Acquire Interest in New Facility
WEST PALM BEACH, FL - (NewMediaWire) - June 12, 2020 - Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”), a provider of healthcare services, previously announced that it was working to restructure its debt and to acquire the majority interest in a company that would give Ethema a new treatment center location in West Palm Beach. This press release will update the status of those negotiations as well as previous announcements regarding letters of intent for other acquisitions, and general corporate matters. This release will serve as a general update on these matters and more detailed information will follow in additional press releases and regulatory filings.
New Financing and Acquisition
The Company has secured term sheets from two of its existing lenders for new investments to finance the acquisition and operation of its new addiction 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 to the Company after the OID discount and legal fees will be $293,000.00. Document drafts have been submitted and the Company hopes to close on this transaction in the next week. The acquisition announced in January 2020 is scheduled to close immediately after closing the new financing. The new facility will be licensed for all levels of care. There is capacity for 60 beds on the property. The Company expects to ramp up its virtual care that it developed in 2019 as this will become an important aspect of treatment going forward. The company expects strong demand for addiction treatment services for the foreseeable future. The location and building are ideal for the operation of an addiction treatment business. The Company expects to use the latest developments and methods to make the facility a COVID-19 free zone for its clients.
Debt and Warrant Amendments
The following Lenders and Warrant holders have been renegotiating the terms of their debt and/or warrants. All of these agreements include lock-ups on the conversion to shares. Some of these agreements are finalized and some are pending completion of documentation.
The company entered into two LOI’s before the end of 2019 and both of those LOIs expired before the Company could raise any financing to complete those acquisitions. There is still an effort ongoing on a non-exclusive basis in both cases to participate in a financing for an acquisition for a portion of these businesses. There is no concrete development in either of these cases.
The Audit of the Company’s annual financial statements are near completion and the filing of the 10k is expected in the next 7 to 10 days and the filing of the 10Q for the first quarter should follow shortly thereafter.
Statement from CEO:
“Despite the severe setbacks faced by the Company over the last 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 the ability to deliver quality addiction treatment services to clients. We have personally guaranteed many of the Company obligations and fully support the Company going forward. The future for addiction treatment services is expected to be very strong due to the severe effects on many people from isolation and fear of the COVID-19 virus, not to mention the trauma of losing a loved one in these difficult circumstances. We aim to be part of the healing and recovery from these extraordinary times and wish to thank all the various lenders, shareholders, and stakeholders who have supported us in restructuring and have given us the opportunity to help as many people as we can going forward,” said Shawn Leon CEO of the Company.
Some of the actions described in this update are not yet finalized and the Company will provide an update on these items as they are consummated.
About Ethema Health Corporation
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 ten years and has had much success with in-patient treatment for adults. 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 herein includes forward-looking statements. These statements relate to future events or to 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 any future 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 since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties, and assumptions relating to 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 actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
For information please contact:
Ethema Health Corporation
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