WEST PALM BEACH, FL, Aug. 21, 2023 (GLOBE NEWSWIRE) -- via NewMediaWire - Ethema Health Corporation (OTCPINK: GRST) ("Ethema", "GRST" or the "Company"), filed its second quarter 10-Q today and reported strong results for the quarter. Included in the quarter filing was the accounting for the disposition of the Company's wholly-owned subsidiary, Cranberry Cove Holdings Ltd.
Effective June 30, 2023, Ethema sold its 100% interest in Cranberry Cove Holdings Ltd ("CCH"), a Canadian registered Company, to Leonite Capital, LLC ("Leonite"), the holder of the Series A Preferred Stock in CCH, with a carrying value of $700,000 and Series B Preferred Stock in Ethema, with a carrying value of $400,000, in exchange for the return of the Series B Preferred Stock and the accrued dividends thereon of $61,184.
Due to Leonite's preferred shareholdings in both Ethema and CCH as well as other convertible note advances and secured promissory note advances, Leonite was considered a related party and as such the gain realized on the transaction of $1,334,885, and the elimination of the minority interest Series A Preferred stock of $700,000 in CCH, was recorded as a capital transaction reflected in the statement of shareholders equity as a deemed contribution to Ethema of $2,034,885, reflected in additional paid-in-capital.
The exchange of the Series B Preferred stock for the shares in CCH, is regarded as an extinguishment of a debt with a related party and therefore the elimination of the Series B Preferred Stock and the accrued dividends thereon, totaling $461,184, is recorded as a capital transaction with a credit to additional paid-in-capital of $461,184.
The cumulative effect of the above is an increase in additional paid-in-capital of $2,496,069, thereby improving the overall financial position of Ethema by eliminating significant debt, including mortgage debt of $3,525,233, CCH Series A Preferred stock liability of $700,000 and accrued dividends thereon of $184,845 and Series B Preferred Stock liability of $400,000 and accrued dividends thereon of $61,184.
The Company's ARIA subsidiary continued to perform well with an EBITDA of $506,310 before intercompany charges. Additionally, tax accruals from previous periods were reversed upon the finalization of prior period tax returns.
Other unusual charges in the quarter were extension fees and professional transaction fees paid during the current quarter for the Florida real estate closing that happened after quarter end which will result in a once-off gain in the third quarter.
On August 17, 2023, Deal Maker Securities received its clearance from FINRA to proceed with the Reg A financing as the Broker Dealer of record for the Company clearing the way for the commencement of the Reg A marketing. The Company expects the marketing to commence before the end of August 2023.
Mr. Shawn Leon, Company CEO, reported, "The second quarter was significant in that we delivered great results in the ARIA subsidiary and reduced overall debt significantly. We continue to meet our goals and expect to continue delivering good results in the quarters to come."
Ethema is proud of our core mission which centers on delivering compassionate, evidence-based addiction treatment. We operate under stringent ethical standards and maintain a robust admission process driven by patients' individual needs and clinical necessities. We remain steadfast in our commitment to serve those battling addiction.
About Ethema Health Corporation
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. 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
shawn@ethemahealth.com
Text to 416-500-0020
Twitter @healthethema
