WEST PALM BEACH, Fla., Oct. 22, 2024 /PRNewswire/ -- Ethema Health Corporation (OTCPINK: GRST) ("Ethema" "GRST" or the "Company"), has signed a binding Asset Purchase Agreement ("APA") to purchase the business operations and operational assets, excluding any real property of Edgewater Recovery Center, LLC ("ERC") headquartered in Morehead Kentucky. ERC operates primarily in the urban areas of Morehead in eastern Kentucky and Paducah in western Kentucky. The closing of the APA requires consents from multiple government agencies, managed care organizations, lenders and creditors of certain liabilities being assumed in the transaction.
ERC has been managed by the Company since July 15, 2024 and will continue to be managed until such time as the newly created, wholly owned subsidiary of the Company, ARIA Kentucky, LLC ("ARIA Kentucky") is fully licensed, accredited and contracted with the managed care organizations, whereupon the operations of ERC will cease. ERC will continue to generate revenues from servicing clients during the transition period. The existing interim management of ERC will be continued by ARIA Kentucky and all operations will be conducted under the Addiction Recovery Institute of America ("ARIA") Brand.
The current ERC patient census in Kentucky is approximately 195 patients which the Company believes, that with the conclusion of the binding APA, will increase dramatically in the near term. The Ethema management team has stabilized the ERC operations over the last three months and is cash flow positive. The Company intends to add another 16 beds in October at the Paducah location, which has been operating at full capacity, increasing revenue in this underserved market.
ERC and after the closing of the transaction, ARIA Kentucky, primarily provides care to Medicaid insured clients. There is currently on-going investigations into other Medicaid providers in Kentucky, which, we believe, will reduce the number of patients served by these providers, presenting ARIA Kentucky with an opportunity to further expand its footprint and revenue potential in Kentucky. To learn more about the operations of ARIA Kentucky please call 606-462-3001.
Certain of the Real Property associated with the operations of ERC are fully levered and requires credit and personal guarantees which the Company is unable to provide. This Real Property is to be acquired in a separate transaction by a fund controlled by the CEO of the Company, Shawn Leon, a related party, and will be leased to ARIA Kentucky on an arms-length basis, at market related rates.
Mr. Leon, Company CEO reported, "It has been an honor to work with a dedicated team of professionals these last three months, and I can confidently say that this team operates at the highest level of integrity and provides a very effective program that continues to serve the needs of Kentuckians ravaged by the opioid epidemic. We aim to continue providing highly effective services at the highest integrity level and look forward to becoming the provider of choice in the State of Kentucky. Although the industry is experiencing tenuous times for Medicaid providers in the Behavioral Health space due to the misdeeds of certain bad actors, we believe that Kentucky Medicaid and the managed care organizations will recognize the integrity of our organization and trust us to provide effective care for the large number of Kentuckians suffering from substance use disorder."
About Ethema Health Corporation
Ethema Health Corporation (OTCPINK: GRST) operates in the behavioral healthcare space specifically 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
