Ethema Health Corporation Expands Operations with New Acquisition in Kentucky

WEST PALM BEACH, Fla., Oct. 22, 2024 /PRNewswire/ — Ethema Health Corporation GRST (“Ethema”, “GRST”, or the “Company”) has officially signed a binding Asset Purchase Agreement (“APA”) to acquire the business operations and assets, excluding real estate, of Edgewater Recovery Center, LLC (“ERC”), based in Morehead, Kentucky. ERC mainly serves the urban areas of Morehead in eastern Kentucky and Paducah in western Kentucky. The completion of this APA involves approvals from several government agencies along with managed care organizations, lenders, and creditors due to some assumed liabilities.

Transition to New Management Structure

Since July 15, 2024, ERC has been under Ethema’s management, a role that continues until the newly formed subsidiary, ARIA Kentucky, LLC (“ARIA Kentucky”), gains the necessary licenses and accreditation with managed care organizations. Throughout this transition, ERC will keep its operations running and continue to generate revenue. The interim management team will be retained by ARIA Kentucky, and all services will operate under the Addiction Recovery Institute of America (“ARIA”) brand.

Potential for Growth in Patient Care

Currently, ERC has around 195 patients in Kentucky. Ethema expects this number to rise significantly following the completion of the APA. With the management team stabilizing ERC’s operations over the past three months, the center is financially positive. Plans are in place to add 16 more beds at the full-capacity Paducah location this October, aimed at enhancing service in an underserved area.

Expanding Opportunities in Medicaid Services

ERC and, subsequently, ARIA Kentucky provide care mainly for Medicaid-insured clients. There are ongoing investigations into other Medicaid providers in Kentucky, which could decrease patient numbers for those providers. This situation opens up potential for ARIA Kentucky to grow its services and increase revenue.

Real Property Considerations

Some real property associated with ERC’s operations is fully leveraged and requires credit and personal guarantees that the Company cannot offer. Instead, this real property will be acquired separately by a fund controlled by the CEO of Ethema, Shawn Leon, a related party. The property will then be leased to ARIA Kentucky under fair market terms.

Statement from the CEO

CEO Mr. Shawn Leon remarked, “It has been an honor to collaborate with a dedicated team these last three months. I can confidently state that this team operates with integrity and provides an effective program that meets the needs of Kentuckians afflicted by the opioid crisis. We aim to maintain this level of service and aspire to be the provider of choice in Kentucky. Despite current challenges for Medicaid providers due to actions by some bad actors, we believe that the Kentucky Medicaid system and managed care organizations will recognize our integrity and rely on us for effective care for those struggling with substance use disorders.”

About Ethema Health Corporation

Ethema Health Corporation GRST specializes in behavioral healthcare, specifically in treating substance use disorders. Over the past decade, Ethema has developed a unique treatment approach with significant success in inpatient care for adults. The company will continue to refine its programs and techniques across North America. For further details, visit www.ethemahealth.com.

Forward-Looking Statements Notice

This announcement includes forward-looking statements regarding future events and financial outcomes. These statements involve known and unknown risks and uncertainties, which might cause actual results to differ from forecasts. Caution is advised in interpreting these forward-looking statements, as they reflect current views and are subject to these risks. The Company does not commit to publicly updating or revising these projections.

For further information, please contact:

Ethema Health Corporation
shawn@ethemahealth.com
Text to 416-500-0020
Twitter @healthethema

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SOURCE Ethema Health Corporation