UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 15, 2020
| Ethema Health Corporation |
| (Exact name of registrant as specified in its charter) |
| Colorado | 000-15078 | 84-1227328 | ||
|
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
| 1590 S. Congress Avenue, West Plam Beach, Florida | 33406 | |
| (Address of principal executive offices) | (Zip Code) |
| 561-290-0239 |
| (Registrant’s telephone number, including area code) |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging Growth Company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
[ ]
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 15, 2020, the Company and Labrys Fund, LP (“Labrys”) signed an amendment to a convertible promissory note issued by the Company to Labrys on July 8, 2019. The amendment waives default interest and penalties (if any) that may have accrued as of the Effective Date under the Note. Labrys agrees not to effectuate a conversion under the Note after the Effective Date so long as the Company complies with the terms of the Amendment. The Company shall make eight (8) monthly cash payments to Labrys, totaling $200,000, starting October 15, 2020 and an Event of Default (as defined in the Note) under the Note shall not occur unless the Company fails to comply with the Payment Schedule.
A copy of the executed amendment is attached hereto as Exhibit 10.1
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 5, 2020, the Company and First Fire Global Opportunities Fund, LLC (“FirstFire”) signed an amendment to a convertible promissory note issued by the Company to First Fire on March 5, 2019. The amendment calls for two payments of $25,000.00 on July 1, 2020 and August 1, 2020 in full satisfaction of the note. First Fire agrees not to effectuate a conversion under the note so long as the Company complies with the terms of the Amendment. First Fire will be entitled to all of its rights under the note if the Company fails to make the payments as agreed.
A copy of the executed amendment is attached hereto as Exhibit 10.2
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On June 15, 2020, the Company and Auctus Fund, LLC (“Auctus”) signed an amendment to a convertible promissory note issued by the Company to Auctus on August 7, 2019. The amendment waives default interest and penalties (if any) that may have accrued as of the Effective Date under the Note. Auctus agrees not to effectuate a conversion under the Note after the Effective Date so long as the Company complies with the terms of the Amendment. The Company shall make nine (9) monthly cash payments to Auctus, totaling $225,000, starting October 1, 2020 and an Event of Default (as defined in the Note) under the Note shall not occur unless the Company fails to comply with the Payment Schedule.
A copy of the executed amendment is attached hereto as Exhibit 10.3
ITEM 8.01 OTHER EVENTS.
On June 17, 2020 the Company signed a non-binding Letter of Intent (the “Letter of Intent”) with Biohazard Health Services LLC (“Vendor”), an environmental services company providing disinfecting, testing and training services to companies and institutions to provide their employees and customers with safe work and meeting space. The Vendor is based in West Palm Beach Florida. The Company plans to acquire a 51% interest in the Vendor for the purchase price of $5,000,000 in a series of three tranches. The funds are to be retained by Covid Clear for working capital purposes. The first tranche buys 25% of Covid Clear for a payment of $250,000.00. The second and third tranches are dependent on Covid Clear reaching certain sales revenue thresholds. The second tranche buys an additional 15% for a payment of $1,750,000.00 and the third buys an additional 10% for a payment of $3,000,000.00. The first tranche is expected to close on June 30, 2020.
On June 17, 2020, the Company issued a press release announcing the Letter of Intent (the “Press Release”). A copy of the Press Release is attached as Exhibit 99.1 hereto.
The foregoing descriptions of the Letter of Intent and the Press Release do not purport to be complete and are qualified in their entirety by reference to the Letter of Intent and the Press Release, the forms of which are filed as, respectively, Exhibits 10.4 and 99.1 hereto.
| Item 9.01 | Financial Statements and Exhibits |
Exhibits
| Exhibit No. | Description of Exhibit | |
| 10.1 | ||
| 10.2 | ||
| 10.3 | ||
| 10.4 | Letter of Intent dated June 17, 2020 by and between Ethema Health Corporation and Biohazard Health Services LLC | |
| 99.1 | Press Release dated June 17, 2020 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Ethema Health Corporation has duly caused this current report to be signed on its behalf by the undersigned hereunto duly authorized.
| ETHEMA HEALTH CORPORATION | ||
| Date: 06/17/20 | By: | /s/ Shawn E. Leon |
| Shawn E. Leon | ||
| Chief Executive Officer | ||
Ethema Signs LOI on Acquisition of a majority Interest in Biohazard Health Services LLC
West Palm Beach, FL, June 16, 2020 – Ethema Health Corporation (OTCQB: GRST) (“Ethema” “GRST” or the “Company”), has signed an LOI to purchase a majority interest in Biohazard Health Services LLC of West Palm Beach, Florida (“Covid Clear”), or the (“Vendor”), is an environmental services company providing disinfecting, testing and training services to companies and institutions to provide their employees and customers with safe work and meeting spaces. The Vendor operates under its brand name Covid Clear and offers its customers a unique product through airborne delivery on a constant basis to keep spaces continuously disinfected. Covid Clear has a number of companies and institutions who have purchased services locally in Florida.
The LOI contemplates the purchase of the majority interest (51%) for $5,000,000.00 in a series of three tranches. The funds are to be retained by Covid Clear for working capital purposes. The first tranche buys 25% of Covid Clear for a payment of $250,000.00. The second and third tranches are dependent on Covid Clear reaching certain sales revenue thresholds. The second tranche buys an additional 15% for a payment of $1,750,000.00 and the third buys an additional 10% for a payment of $3,000,000.00. The initial closing is set for June 30, 2020. In addition to the majority interest in Covid Clear Ethema is buying the exclusive right to distribute the Covid Clear products in Canada on a royalty basis and an exclusive right to sell to the addiction treatment industry in the United States on a commission basis. Ethema will be issuing $100,000 of restricted Ethema common stock for these rights.
The Covid Clear product can aid in decreasing the spread of viruses and provides a safety net for customers and employees while in the workplace. This is a functional electrolyzed water enhanced with NaCl Electrolytes. In short, it is non-toxic, safe for kids, pets, clothes, odorless, food safe, noncorrosive, and poses no respiratory hazards. This means it can be used during and while there are customers or employees in the area.
“The
product is an Inert water-based ionic solution
that is generated electrolytically from a Sodium Chloride (NaCl) electrolyte solution. This positively charged product spreads
evenly across all surfaces to disinfect Viruses like the SARS-COV2, Bacteria and Fungi”, said John Dietz, the President
and one of the founders of the Vendor.
Covid Clear began taking orders for their programs in April of 2020 and has signed reoccurring purchase agreements with multiple customers. Businesses are seeing this as a method to safely open and operate for both their customers and employees with a cost-effective mechanism. The Company will continue its due diligence and will require raising additional new funds to complete the initial phase of the acquisition. The process will need to move quickly to a closing in order to meet the Vendors requirement for capital to meet the demands of its customers.
“We came across this opportunity while sourcing disinfectant services for the opening of the Company new treatment center. Their need for capital to meet customer demand was an opportunity for us to add tremendous value to our Company. The unique product will make our new treatment center safe for clients and staff and give us a competitive advantage over other treatment centers”, said Shawn Leon CEO of the Company.
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 eight 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
416-500-0020
shawn@ethemahealth.com