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): ~~July~~October 822, 2024

ETHEMA HEALTH CORPORATION

(Exact name of registrant as specified in its charter)

Colorado

000-15078

84-1227328

(State or other jurisdiction of

incorporation or organization)

(Commission File Number)

(IRS Employer

Identification No.)

950 Evernia Street, West Palm Beach, Florida 33401

(Address of principal executive offices)

(416) 500-0020

(Registrant’s telephone number, including area code)

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

[ ]

Soliciting material pursuant to Rule 14a-12 under the Exchange Act

[ ]

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))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

Edgewater Recovery Centers, LLC

On ~~July~~October 1022, 2024, ARIA Kentucky, LLC (“ARIA Kentucky”), a wholly owned subsidiary of Ethema Heath Corporation (the “Company”) and ~~finalized~~Edgewater Recovery Center LLC (“ECI”) and its sole member John David Elam (the ~~execution~~“Seller”), ofentered ainto ~~letter~~an Asset ofPurchase ~~intent~~Agreement ~~and~~(the a“APA”) ~~management~~pursuant ~~agreement~~to ~~with~~which ~~respect~~ARIA Kentucky agreed to acquire and ECI agreed to sell to ARIA Kentucky, on the ~~assets~~closing ~~and~~date, the addiction treatment operations of ~~Edgewater~~owned ~~Recovery~~by ~~Center~~ECI ~~LLC~~and oflocated in Morehead and Paducah, Kentucky ~~attached~~through ~~hereto~~a aspurchase of ~~Exhibit~~the ~~10.01.~~assets ~~The~~of ~~purchase~~ECI ~~agreements~~(the ~~will~~“Acquired beAssets”) , including; all assets of ECI used in the business of ECI (except for certain specified assets), including but not limited to all current assets existing at the ~~shares~~time of closing, all cash balances and rights to receive cash, all equipment, machinery, all warranties related to the business and~~/or~~ acquired assets, ofall ~~Edgewater~~intangible ~~Recovery~~personal ~~Centers~~property, ~~LLC~~intellectual property, ~~(“ETC”)~~all business inventories, ~~ERC~~all ~~Investments~~property leases associated with the business, ~~LLC~~all ~~(“ERC”)~~assumed contracts, ~~JDE~~all governmental authorizations; and all information and records, including patient records, as defined in the APA. Certain of the Real Property associated with the operations of ERI 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, BH Properties Fund, LLC (“~~JDE~~BH Properties”) controlled by the CEO of the Company, Shawn Leon, a related party, and ~~New~~will ~~Journey~~be ~~LLC~~leased ~~(“NJ”)~~to asARIA ~~follows:~~Kentucky on an arms-length basis, at market related rates. Other properties used by ECI which are owned by separate entities owned by the sole member of the Seller will also be acquired by BH Properties in separate transactions.

~~NJ:~~THE APA ~~The~~also ~~purchase~~contains ~~price~~certain ~~for~~ECI ~~NJ including cash, accounts receivable~~ and ~~real~~ARIA ~~property~~Kentucky ~~at 721 White Street~~representations, ~~Morehead~~warranties, KYcovenants and ~~not including any liabilities~~obligations, ~~not~~which ~~limited~~are ~~to,~~defined ~~but~~in ~~including property taxes or income taxes, other than~~ the ~~mortgage~~APA and ~~loan~~are ~~against~~customary ~~the~~in ~~property~~agreements ~~will~~of bethis $1nature.~~00.~~

~~JDE:~~ The APA ~~purchase~~may ~~price~~be ~~for~~terminated ~~JDE~~by ~~including~~either ~~cash,~~party ~~accounts~~if ~~receivable~~not ~~and~~closed ~~real~~within ~~property~~120 ~~at 164~~days, ~~166~~or ~~and~~by ~~168~~mutual ~~Maple~~consent ~~Street,~~of ~~1135~~the ~~Rodburn Road~~parties, ~~214~~or ~~Jackson~~by ~~Road,~~either 70the ~~Brandywine~~purchaser or ~~Lane~~seller ~~and~~upon ~~1800~~breach ~~Rice~~of ~~Road, all in Morehead, KY and not including~~ any ~~liabilities,~~of ~~not~~the ~~limited to~~representations, ~~but including property taxes and income taxes~~warranties, ~~other~~covenants ~~than~~or ~~mortgages~~obligations ~~and~~by ~~loans registered against~~ the ~~properties~~other ~~will~~party, beor ~~$1.00~~by ~~plus~~either anparty ~~agreement~~if toany law ~~transfer~~or ~~the~~regulation ~~real~~prevents ~~property at 70 Brandywine Lane and 1800 Rice Road from JDE to~~ the ~~Seller,~~conclusion ~~together with an assumption~~ of ~~mortgages~~the ~~against those properties~~APA.

~~ERC:~~ The closing ~~purchase~~is ~~price~~subject ~~for~~to ~~the~~certain ~~ERC~~conditions ~~business~~set ~~including~~forth ~~cash~~in ~~accounts~~the ~~receivable~~APA and ~~real~~there ~~property~~can atbe ~~1111~~no USguarantee 60when ~~West~~such ~~and~~conditions ~~425,~~will ~~435~~be ~~and~~met ~~445~~or ~~Clinic~~that such ~~Drive,~~conditions ~~all~~will inbe ~~Morehead~~met. KYUpon ~~and~~the ~~not~~closing ~~including~~of ~~any~~the ~~liabilities~~APA, ~~not~~which ~~limited~~will ~~to,~~occur ~~but~~upon ~~including~~the ~~property~~settlement ~~taxes~~or ~~and~~waiver ~~income~~of ~~taxes,~~all ~~other~~condition’s ~~than~~precedent including ~~mortgage~~the ~~and~~simultaneous ~~loans~~closing ~~against~~of ~~those~~the ~~properties,~~Equity ~~will~~Purchase beAgreements $2with BH Properties,~~600,000~~ ~~paid~~ARIA byKentucky ~~the~~will ~~issuance~~pay of a 6%cash ~~interest~~purchase consideration ~~Seller Note in the principal amount~~ of $2250,~~600,~~000 ~~amortized~~to ~~over~~the 25Seller ~~years~~and ~~with~~has aagreed ~~term~~to ofassume 7certain ~~years~~liabilities ~~collateralized~~related ~~behind~~to the ~~existing~~Acquired ~~mortgages~~Assets, onincluding ~~the~~trade payables ~~ERC~~from ~~properties.~~July ~~Principal~~15, ~~and~~2024 ~~interest~~( ~~payment on~~ the ~~$2,600,000~~“Transfer ~~note~~Date”), ofuntil ~~$16,751.84 will be paid monthly and will take effect upon~~ the ~~Closing~~closing ~~Date~~date. ~~From~~All ~~and~~liabilities ~~after~~under ~~the~~assumed ~~Effective~~contracts ~~Date~~ and ~~until~~certain specifically ~~the~~identified ~~Closing Date~~liabilities, ~~ETC~~including ~~will~~a ~~pay~~settlement ~~$13,000.00~~agreement ~~(an~~with ~~amount~~the ~~equal~~United toStates 6%and ~~interest~~Kentucky ongovernment ~~$2,600,000)~~and ~~per~~certain ~~month~~obligations as toa ~~the~~borrower ~~Seller.~~or ~~The~~guarantor ~~first~~related ~~payment~~to ofbanking ~~$13,000~~obligations.00 ~~will be made 30 days after the Effective Date.~~

~~ETC:~~ECI has ~~The~~been ~~purchase~~managed ~~for~~by the ~~Business~~Company ~~will~~since July ~~include cash~~15, ~~accounts~~2024 and ~~receivable~~will ~~and~~continue ~~all~~to ~~assets~~be ofmanaged by the ~~business.~~Company ~~The~~until ~~assumed~~closing. ~~liabilities~~Thereafter ECI will ~~only~~ be ~~accounts~~managed ~~payable~~by ~~for~~ARIA ~~expenses~~Kentucky ofpursuant to the ~~Business~~terms ~~from~~of ~~The~~a ~~Effective~~Transition ~~Date~~Agreement ~~forward.~~to ~~All~~be ~~other~~entered ~~liabilities~~into ~~other~~upon ~~than~~closing, ~~debts~~until tosuch time as the ~~Lenders,~~newly ~~The~~created ARIA ~~Justice~~Kentucky ~~Department~~is ~~and~~fully ~~the~~licensed, ~~Seller~~accredited ~~will~~and ~~not~~contracted bewith ~~assumed.~~the ~~The~~managed ~~purchase~~care ~~price~~organizations, ~~for~~whereupon the operations ~~Business~~of ECI will ~~be $250,000~~cease.00 toStarting beimmediately all ~~directed~~operations ~~towards~~will ~~payment~~be ofconducted ~~legal~~under ~~fees~~the Addiction ~~and~~Recovery ~~brokerage~~Institute of ~~fees~~America ("ARIA") Brand.

The ~~Management~~foregoing ~~Agreement~~summary ~~will~~of ~~have~~the anAPA ~~Effective~~does ~~Date~~not purport to be complete and is qualified in its entirety by reference to the full text of ~~July~~the ~~15,~~APA that ~~2024.~~is filed herewith as Exhibit 2.1.

~~Item~~The 3representations, warranties and covenants contained in the APA were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the APA and may be subject to limitations agreed upon by the contracting parties.~~02 Unregistered~~ ~~sale~~Accordingly, the APA is incorporated herein by reference only to provide investors with information regarding the terms of ~~Equity~~the APA, and not to provide investors with any other factual information regarding the Company or ECI or either of their businesses, and should be read in conjunction with the disclosures in Heat’s periodic reports and other filings with the Securities and Exchange Commission. (the “SEC”)

~~On July~~Item ~~12, 2024 the Company CEO and his spouse converted a total debt of $2,000,000~~9.0001 ~~into~~Financial 4Statements ~~billion shares of restricted common stock of the Company at the price of $0.0005 per share. The debt was non-interest bearing~~ and ~~aged from 0 to 7 years old~~Exhibits. A portion of the converted debt was due to Management fees that the CEO was entitled to under a management agreement for the Company subsidiary ARIA, bur deferred due to cash flow constraints. The former owner partner had been paid management fees of 420,000 from 2021 to the end of 2023 which is the same amount that the CEO was entitled to but deferred. That amount was recorded in the books of the Company on July 10, 2024 and converted to stock on July 12, 2024. The balance of debt converted between the CEO and his spouse was from cash injections into the company and Real Estate assets sold to the company. The Company CEO converted 1,500,000 of his debt and his spouse converted 500,000 of her debt. The Share purchase agreement is attached hereto as Exhibit 10.02.

~~Item 9.01 Financial Statements and~~ (d) Exhibits.

~~(d) Exhibits~~Exhibit No. Description

~~Exhibit No~~10. ~~Description~~01 Asset Purchase Agreement dated October 22, 2024.

~~10.01 Letter of Intent July 8, 2024~~SIGNATURES

~~10.02 Management~~Pursuant ~~Agreement~~to ~~Completed~~the ~~July~~requirements 10of the Securities Exchange Act of 1934, ~~2024~~as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

~~SIGNATURES~~Date: October 29, 2024

~~Pursuant~~By: to/s/ ~~the~~Shawn ~~requirements~~E. ofLeon ~~the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.~~

~~Date~~Name: ~~July~~Shawn ~~12,~~E. ~~2024~~Leon

ByTitle: ~~/s/ Shawn E. Leon~~ CEO

Name: Shawn E. Leon

Title: CEO

Filing Compare · ETHEMA HEALTH Corp