WEST PALM BEACH, FL - May 23, 2025 (NEWMEDIAWIRE) - Ethema Health Corporation (OTCPINK: GRST) (“Ethema” “GRST” or the “Company”), files its annual report on Form 10-K today.   

2024 RESULTS

We delivered strong revenue growth from our core in-patient services with revenue growing from $5.16 million to $6.02 million, an increase of $0.86 million or 16.5%. The revenue growth was realized in our existing West Palm Beach facility and is partly attributable to an increase in our marketing spend of approximately $0.23 million.

Our operating expenses increased from $5.89 million to $7.35 million, an increase of 24.9%. This increase includes direct operating expenses of approximately $0.33 million related to our mid-year acquisition of a new detox facility located in Boca Raton, discussed under Florida Expansion below. This facility generated no revenue during 2024 as the process of adding it to our accredited locations took longer than expected. Personnel expenses, excluding the new detox facility, increased by $0.35 million, as we increased our staff complement to meet an expected and sustained increase in our patient count. Our property related expenses, excluding the new detox facility increased by $0.56 million, primarily due to the increase in our base rental cost and related property tax expense incurred on our West Palm Beach facility which was acquired and resold in the prior year for a profit of $2.5 million, to inject cash into the business. The Company earned management fees of $110,000.00 for the management of Edgewater, Kentucky from July 15, 2024 until the end of the year. These fees were earned and paid as a minimum compensation during this period, and additionally, the Company would earn any of the profits during the management period, but only if the transaction closed, which it did on January 9, 2025. That income will be reported in the first quarter.     

As a result of the strong revenue growth, offset by the increase in our operating expenses, we realized a net operating loss of $1.33 million compared to $0.54 million in the prior year. Although we are disappointed with the overall outcome, we are encouraged and confident that the developments below will improve our results significantly in the coming year.

FLORIDA RE-CERTIFICATION

Ethema was recently re-certified for another three years by the internationally recognized Joint Commission accrediting body.  The Joint Commission completed its audit of our West Palm Beach and Boca Raton locations, with very few and minor findings, demonstrating our commitment to the safety and quality of our care for our patients and the successful outcome of our treatment regimens. In addition, the accreditation ensures we maintain and exceed state and local regulatory compliance requirements.

FLORIDA EXPANSION 

We are pleased to report that we have recently completed the arduous task of licensing our second Florida treatment center, located in Boca Raton, and adding it to our accredited locations with all except one of our provider contracts, which is still underway. The facility increases our capacity in Florida by a further 25 beds to a total of 87 beds, including the 62 beds located at our West Palm Beach facility. We expect to increase our Florida capacity, which is currently 70%, to 85% in the second quarter of 2025. We expect 2025 first quarter revenues of approximately $1.5 million, an expected 18% increase on comparative prior year revenues. Revenue estimates are based on actual patient count data for the quarter and unbilled claims, which may take up to 60 days after quarter end to finalize. 

KENTUCKY EXPANSION

As previously disclosed, we closed on the acquisition of the treatment operations of Edgewater Kentucky on January 9, 2025, through our wholly owned legal entity ARIA Kentucky, LLC (“ARIA Kentucky”). Our Kentucky operations add a further 347 licensed beds of which 275 are fully staffed and operational, the remaining 72 will become operational and staffed when our patient count increases. In addition to this we have an additional 36 beds available to outpatients that have completed our programs and are in a transitional period.

We received our license to operate treatment facilities in Kentucky during January 2025 and obtained Kentucky Medicaid approval in March 2025, to be effective on June 1, 2025.  We have contracted with 4 of the 5 major Managed Care Organizations in Kentucky, that manage the Kentucky Medicaid and expect the fifth the be completed by the end of June, 2025, thereby completing our transition from Edgewater. We recently obtained approval from the Kentucky Department of Corrections, which will improve and enhance our revenue growth opportunities in Kentucky. This approval is also effective June 1, 2025. 

For the Kentucky operations, during the first quarter of 2025 (since acquisition on January 9, 2025), we had utilized 65% of our 275 fully staffed capacity, with expected 2025 first quarter revenues of $2.1 million. We aim to increase our utilization to at least 85% of our total operational capacity of 347 beds, within the first year of operations, with expected quarterly revenues of $3.8 million. Revenue estimates are based on actual patient billed claims for the quarter, which may take up to 60 days after quarter end to finalize. 

Mr. Shawn Leon, Company CEO, reported, “that although we had strong revenue growth, our operating expenses increased with the addition of the new Florida facility, located in Boca Raton, with no revenue generated to offset the additional costs, resulting in a disappointing increase in our operating loss.

"However, I am optimistic that the addition of the new Florida facility and the integration of the significant Kentucky operations, will deliver substantially increased revenue and income in the coming quarters. The integration and expansion has gone very smoothly which I can attribute to our very dedicated teams in Florida and Kentucky. The Joint Commission audit in Florida was one of our best ever results for an accrediting audit and I am very proud of the Florida team for that accomplishment. We will continue to optimize the Florida and Kentucky assets and increase our patient count in our facilities, which will improve our profitability prospects. 

"The Company continues to experience audit related delays in its filings, this issue is currently being addressed with the auditors to ensure that future filings are done within the prescribed deadlines. We expect this to get on track for the second quarter filing.”  

 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 

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