Ethema Signs Contract to Purchase Property

Rhea-AI Summary

Ethema Health Corporation (OTCPINK: GRST) has signed a contract to purchase its currently leased property at 950 Evernia Street, West Palm Beach, for $5,500,000. A $50,000 down payment was made, with the purchase to be finalized by February 2023. The landlord will offer $4,000,000 in financing, requiring a cash balance payment by September 30, 2022. Ethema plans to structure the purchase through a Limited Partnership, investing $100,000 and controlling the property with a 50% income interest. This acquisition aims to enhance their long-term presence in the addiction treatment sector.

Positive

• Secured long-term control of the property through purchase, enhancing operational stability.
• Potential for 50% income interest from the property, adding to revenue streams.
• Opportunity to amortize renovation costs over a longer term, optimizing financial management.

Negative

• Dependence on securing alternate mortgage financing below 6% interest, amid tight credit markets.
• Risk of needing to pay the cash balance by a tight deadline, potentially straining liquidity.

West Palm Beach, FL, July 26, 2022 (GLOBE NEWSWIRE) -- via NewMediaWire -- Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”) has entered into a contract to purchase the property at 950 Evernia Street, West Palm Beach, that  its ARIA subsidiary is currently leasing and that is the new address of the Company’s head office.  On July 25 the Company completed a $50,000.00 down payment on the purchase agreement.  The agreement between the Company and the landlord/owner of the property is for a purchase price of $5,500,000 to be completed in February 2023. The landlord will provide financing of $4,000,000 as part of the purchase completion and the Company will need to pay the balance of the purchase price in cash on or before September 30, 2022.

The Company intends to structure the purchase in an off-balance sheet transaction through a Limited Partnership structure whereby the equity funds required for the purchase will be a direct investment in the property limited partnership.  The Company will invest $100,000.00 into the limited partnership and become the General partner giving the Company control of the property and a 50% interest in the income of the property.  The overall net cost to the Company for the property will not change unless the Company can secure alternate mortgage financing on the property for less than 6% interest, in which case the cost will go down.  This may not be possible due to the tightening credit markets but the agreement gives the Company cost certainty into 2024.  

Mr. Shawn Leon, Company CEO, reported, “We have worked hard to secure a manageable agreement to purchase the property.  There is a substantial amount of activity taking place around the property with the proposed development of a new University of Florida campus on the same block.  The property has tremendous value to our Company and we felt that we needed to have long-term control of the property.  Our five-year lease term on the property was not going to give us that control.  We have made significant investments in the renovation of the property and those expenditures will now be amortized over a longer term.  This strategy fits with our vision of building a significant presence in the addiction treatment industry.” 

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

FAQ

What is the significance of Ethema Health Corporation purchasing the property at 950 Evernia Street?

The purchase allows Ethema Health Corporation (OTCPINK: GRST) to gain long-term control of a key property, enhancing operational stability and strategic positioning in the addiction treatment industry.

How much is Ethema Health paying for the property in West Palm Beach?

Ethema Health Corporation is purchasing the property for $5,500,000, with a down payment of $50,000 completed.

What are the financial implications of Ethema's property purchase?

The acquisition may lead to a 50% income interest in the property and allows for cost amortization of renovations, though it relies on securing favorable financing conditions.

When will the property purchase by Ethema Health Corporation be completed?

The property purchase is expected to be completed by February 2023.