UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, ~~2024~~2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to _________

Commission file number: 000-15078

Ethema Health Corporation

(Exact name of registrant as specified in its charter)

Colorado 84-1227328

(State or other jurisdiction of incorporation or organization)

(I.R.S. 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)

Securities registered under Section 12(b) of the Exchange Act:

Title of each class	Name of each exchange on which registered

None	N/A

Securities registered under Section 12(g) of the Act:

Common Stock, $0.01 par value per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of issuer’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D.1(b). ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated ~~file~~filer, a non-accelerated ~~file~~filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer, “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☒
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The ~~aggregate~~ aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of June 2830, ~~2024~~2025, based on a closing share price of $0.~~0007~~0004 was approximately $21,~~489~~421,~~683~~568.

As of ~~May 21~~June 29, ~~2025~~2026, the registrant had 7,726,283,805 shares of its common stock, par value $0.01 per share, outstanding.

ETHEMA HEALTH CORPORATION

YEAR ENDED DECEMBER 31, ~~2024~~2025

TABLE OF CONTENTS

		PAGE
PART I.
Item 1.	Business	1
Item 1A.	Risk Factors	45
Item 1B.	Unresolved Staff Comments	45
Item 2.	Properties	45
Item 3.	Legal Proceedings	45
Item 4.	Mine Safety Disclosures	45
PART II.
Item 5.	Market for Registrant’s Common Equity Related Stockholder Matters and Issuer Purchases of Equity Securities	56
Item 6.	Reserved	67
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	67
Item 8.	Financial Statements and Supplementary Data	1115
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	1216
Item 9A.	Controls and Procedures	1216
Item 9B.	Other Information	1317
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	1317
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	1418
Item 11.	Executive Compensation	1520
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	1621
Item 13.	Certain Relationships and Related Transactions, and Director Independence	1721
Item 14.	Principal Accountant Fees and Services	1823
Part IV.
Item 15.	Exhibits and Financial Statements Schedules	1924
SIGNATURES		2026

PART I

Special Note Regarding Forward-Looking Statements

Many of the matters discussed within this Annual Report contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) based on our current expectations and projections about future events. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions. These statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties, many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially from those expressed, projected or implied in or by the forward-looking statements. Such risks and uncertainties include the risks noted under Item 7, “Management’s Discussion and Analysis of Financial Condition and ~~Results~~ Results of Operations,” but are also contained elsewhere. We do not undertake any obligation to update any forward looking statements. ~~Unless~~ Unless the context requires otherwise, references to “we,” “us,” “our,” and “Ethema,” refer to Ethema Health Corporation and its subsidiaries.

Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. ~~We do not undertake any obligation to update any forward-looking statements.~~

Item 1. Business.

Company History

Ethema Health Corporation (the “Company” or “Ethema”), a Colorado corporation was incorporated under the laws of the State of Colorado on April 1, 1993, and is the surviving company of a merger, effective February 1, 1995, between the Company and Nova Natural Resources Corporation, a Delaware corporation (“Nova Delaware”). The merger was effectuated solely for the purpose of changing the Company’s domicile from Delaware to Colorado. At all times prior to 2001, the Company was engaged in the oil and gas exploration business. Nova Delaware was the successor entity to Nova Petroleum Corporation, a Delaware corporation, and Power Resources Corporation, a Delaware corporation, which merged in 1986 (“the 1986 Merger”). Prior to the 1986 Merger, Nova Petroleum Corporation and Power Resources Corporation had operated since 1979 and 1972, respectively. In 2001, the Company entered into the electronics business and this business was active in 2001 and 2002, as part of the Torita Group. After 2002, the Company continued with various stages of development in this business until 2010.

On April 1, 2010, the Company changed its principal operations from development stage electronics to ~~healthcare~~health care services. On March 29, 2010, the Company entered into a one -year consulting agreement with Greenstone Clinic Inc., a Canadian corporation (“Greenestone Clinic”), whereby Greenestone Clinic provided consulting services for the Company’s development and operation of medical clinics in the province of Ontario, Canada. Specifically, Greenestone Clinic provided medical and business expertise in the initial startup of private clinics and technical assistance to ensure that the clinics were in compliance with governmental policy and procedure requirements as well as any operational requirements. At the time of entering into this consulting agreement, Greenestone Clinic operated a clinic at the Muskoka property housing its addiction treatment clinic and provided endoscopy services. The Company started offering medical services in June 2010, offering various medical services, including endoscopy, cardiology and executive medicals, which services were subsequently sold.

During December 2016, the Company obtained a license to operate and provide addiction treatment ~~healthcare~~health care services in Florida, USA. The company commenced operations under this license with effect from January 2017.

~~On February 14, 2017, the Company completed a series of transactions (referred to collectively as the “Restructuring Transactions”), including a Share Purchase Agreement (the~~1 “SPA”) whereby the Company acquired 100% of the stock of Cranberry Cove Holdings Ltd. (“CCH”) from Leon Developments Ltd. (“Leon Developments”), a company wholly owned by Shawn E. Leon, who is the President, CEO, and CFO of the Company, for an assignment to Leon Developments of CDN$659,918 owing to the Company and the issuance of 60,000,000 shares of the Company’s common stock valued at $2,184,000. CCH held the real estate on which the Company’s Greenstone Muskoka operated. The Company entered into an Asset Purchase Agreement (the “APA”) whereby the assets of Greenstone Muskoka were sold by Greenstone Muskoka, to Canadian Addiction Residential Treatment LP (the “Purchaser” or “CART”), for a total consideration of CDN$10,000,000. The company also entered into a lease agreement whereby the Company leased the real estate to Cart for an initial 5 year period with three 5 year renewal options.

On ~~February~~ February 14, 2017, ~~immediately~~the ~~after~~Company ~~closing~~completed ona series of transactions (referred to collectively as the ~~sale~~“Restructuring Transactions”), including a Share Purchase Agreement (the “SPA”) whereby the Company acquired 100% of the ~~assets~~stock of ~~Greenstone~~Cranberry ~~Muskoka~~Cove Holdings Ltd. (“CCH”) from Leon Developments Ltd. (“Leon Developments”), a company wholly owned by Shawn E. Leon, who is the ~~Company~~President, ~~closed~~CEO, onand CFO of the ~~acquisition~~Company, for an assignment to Leon Developments of CDN$659,918 owing to the ~~business~~Company and ~~real~~the ~~estate~~issuance ~~assets~~of 60,000,000 shares of ~~Seastone~~the ~~Delray~~Company’s ~~pursuant~~common tostock ~~certain~~valued at $2,184,000. CCH held the real estate ~~and~~on ~~asset~~which ~~purchase~~the ~~agreements~~Company’s ~~through~~Greenstone ~~its~~Muskoka ~~wholly owned~~operated. ~~subsidiary,~~The ~~Addiction~~Company ~~Recovery~~entered ~~Institute~~into ofan ~~America,~~Asset ~~LLC~~Purchase Agreement (the “~~ARIA~~APA”). whereby the assets ~~The~~of ~~purchase~~Greenstone ~~price~~Muskoka ~~for~~were sold by Greenstone Muskoka, to Canadian Addiction Residential Treatment LP (the ~~ARIA~~“Purchaser” or ~~assets~~“CART”), ~~was~~for USa total consideration of CDN$610,~~070~~000,000. The Company also entered into a lease agreement whereby the Company leased the real estate to CART for an initial 5-year period with three 5-year renewal options.

1On February 14, 2017, immediately after closing on the sale of the assets of Greenstone Muskoka, the Company closed on the acquisition of the business and real estate assets of Seastone Delray pursuant to certain real estate and asset purchase agreements through its wholly owned subsidiary, Addiction Recovery Institute of America, LLC (“ARIA”). The purchase price for the ARIA assets was US$6,070,000.

On ~~April~~ April 4, 2017, the Company changed its Corporate name from Greenestone Healthcare Corporation to Ethema Health Corporation.

On ~~November~~ November 2, 2017, the Company entered into an Agreement to purchase certain buildings in West Palm Beach, Florida, totaling approximately 80,000 square feet, on which the Company planned to operate a substance abuse treatment center. The purchase price of the Property was $20,530,000. The Company made a series of nonrefundable down payments totaling $2,940,546 in 2017 and 2018. On May 23, 2018, the Company ~~converted~~ converted the agreement to purchase the buildings from the Landlord into a real property lease agreement with a purchase option. The lease was for an initial 10 years and provided for two additional 10 -year extensions. In June 2018, the Company moved its ARIA operations ~~into~~ into the West Palm Beach properties and in September 2018 received a license to operate in-patient detoxification and residential treatment services. On December 20, 2019, the Company entered into an agreement with the landlord to terminate the lease agreement on January 31, 2020.

On April 2, 2019, the Company disposed of the real estate assets in ARIA located at 801 Andrews Avenue, Delray Beach for gross proceeds of of $3,500,000, and on October 10, 2019, the Company transferred the remaining real estate asset located at 810 Andrews Avenue, Delray Beach, Florida to Leonite Capital, LLC, for net proceeds of $1,398,510, which proceeds were offset against the convertible loan owing to Leonite.

On June 30, 2020, the Company entered into an agreement (“the Stock Purchase Agreement”), whereby the Company agreed to acquire 51% of American Treatment Holdings, Inc. (“ATHI”) from The Q Global Trust (“Seller”) and Lawrence B Hawkins (“Hawkins”), which owned 100% of Evernia Health Services LLC. (“Evernia”), which operates drug rehabilitation facilities. The consideration for the acquisition was a loan to be provided by the Company to Evernia in the amount of $500,000. The Company has an option to acquire an additional 24% of ATHI for 100,000,000 shares of common stock and $50,000, on the condition that a probationary license was approved by the Florida Department of Family and Child Services, which was received on June 30, 2021, upon which the Company exercised its option to acquire the additional 24% of ATHI, resulting in a 75% ownership of ATHI.

On May 15, 2024, the Company entered into a Stock Purchase Agreement whereby it acquired the remaining 25% of ATHI representing 5,000,000 ~~shares~~ shares from the minority stockholder for gross proceeds of $1,100,000.

On December 30, 2022, the company entered into two agreements whereby it sold two non-operating subsidiaries, Greenstone Muskoka and ARIA to the Company Chairman and CEO for ~~gross~~no ~~proceeds of $0~~consideration, after Greenstone Muskoka forgave its intercompany receivable owing from ~~the~~ the Company of $6,690,381 and the Company forgave its intercompany balance owing from ARIA of $9,605,315.

On June 30, 2023, the Company entered into an exchange agreement with Leonite Capital, LLC, whereby it exchanged 400,000 Series B shares with a value of $400,000 plus accrued dividends thereon of $61,184 for its entire shareholding in its property -owning subsidiary, CCH. The Series B shares were cancelled upon consummation of the transaction.

On October 3, 2022 the Company entered into a purchase and sale agreement with Evernia Station Limited Partnership for the purchase of 950 Evernia Street, West Palm Beach, Florida (“950”), the property in which it operates its treatment center, for gross proceeds of $5,500,000 (“Purchase Agreement”). The closing was originally scheduled for February 1, 2023, however through a series of 6 addendums to the Purchase Agreement requiring the payment of a total $180,000 in extension fees, the Closing was extended to August 3, 2023.2

~~Simultaneously~~On ~~with~~October ~~the closing of the purchase and sale agreements~~3, on2022 ~~August 4, 2023,~~ the Company entered into a ~~long~~purchase ~~term~~and ~~lease~~sale ~~for~~agreement ~~950~~ with anEvernia ~~initial term~~Station ofLimited ~~twenty~~Partnership ~~years,~~for ~~and~~the ~~two~~purchase ~~ten~~of ~~year~~950 Evernia ~~extension~~Street, ~~options.~~West ~~The lessor is Pontus EHC~~ Palm Beach, ~~LLC~~Florida (“950”), athe ~~Delaware~~property ~~limited~~in ~~liability~~which ~~company and~~it aoperates ~~portfolio~~its ~~company~~treatment ofcenter, ~~Pontus~~for ~~Net~~gross ~~Lease~~proceeds of ~~Advisors~~$5,500,000 ~~LLC~~(“Purchase Agreement”). The ~~lease~~closing iswas ~~absolutely~~originally ~~net~~scheduled ~~and~~for ~~the~~February ~~lease~~1, ~~cost~~2023, ~~for~~however ~~the~~through ~~initial~~a ~~year~~series of is6 ~~$748,000 paid~~addendums ~~monthly.~~to ~~The~~the ~~lease~~Purchase ~~increases~~Agreement atrequiring athe ~~rate~~payment of ~~2.75% per year for~~ a total ~~term~~$180,000 ~~lease~~in ~~obligation~~extension ~~of $19~~fees,~~595,653~~ ~~over~~ the ~~initial~~Closing ~~twenty-year~~was extended to August ~~term~~3, 2023.

On ~~March~~ ~~22,~~May ~~2024~~4, 2023 the Company ~~executed~~signed a ~~LOI~~Letter toof ~~acquire~~Intent ~~certain~~with ~~assets,~~Pontus ~~including~~Net ~~furniture,~~Lease ~~equipment~~Advisors, ~~inventory~~LLC ~~and~~to ~~supplies~~sell of950 ~~Boca Cove~~for ~~Detox~~$8, ~~LLC~~500,000 ~~along~~and ~~with~~lease the property ~~assignment~~to ofthe ~~lease~~Company ~~and sub-lease~~ for ~~premises~~a ~~located~~term atof ~~899~~twenty ~~Meadow~~years ~~Avenue,~~with ~~Boca~~two ~~Raton,~~ten-year ~~Florida~~extensions. On May 119, ~~2024~~2023, the Company, ~~through~~signed ~~its subsidiary Evernia Health Center LLC, entered into~~ a ~~Definitive~~purchase ~~Agreement~~and ~~whereby the Company assumed~~sale ~~the~~agreement ~~lease~~with ~~for~~Pontus ~~suites~~Net ~~100,101,~~Lease ~~201,~~Advisors ~~202~~to ~~and~~sell ~~203~~950 ~~located~~for ~~at 899 Meadows Road~~$8, ~~Boca Raton~~500,000. ~~Florida~~On ~~(the~~August ~~“Leased Premises”) and the furniture~~4, ~~fixtures and equipment located therein~~2023, ~~upon~~ the ~~assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the~~ Company ~~entered~~completed ~~into~~both ~~a Bill of Sale to give effect to~~ the ~~Definitive Agreement. The~~ purchase ~~price~~of ~~was $240,000~~950 ~~which~~from ~~was~~Evernia ~~settled~~Station byLimited aPartnership ~~deposit of $20,000~~ and athe ~~cash~~subsequent ~~payment~~sale of ~~$220,000~~950 ~~and the payment~~ to ~~the~~Pontus ~~Seller~~Net ofLease ~~$83~~Advisors,~~393~~ ~~for the assumption of the security deposit held by the landlord of the Leased Premises located at 899 Meadows Road~~LLC.

Simultaneously with the closing of the purchase and sale agreements, on August 4, 2023, the Company entered into a long-term lease for 950 with an initial term of twenty years, and two ten-year extension options. The lessor is Pontus EHC Palm Beach, LLC , a Delaware limited liability company and a portfolio company of Pontus Net Lease Advisors, LLC. The lease is absolutely net and the lease cost for the initial year is $748,000 paid monthly. The lease increases at a rate of 2.75% per year for a total term lease obligation of $19,655,717 over the initial twenty-year term. The Lease is personally guaranteed by the Company President and the guarantee may be released after 5 years based on certain financial and performance metrics being met.

~~Corporate~~On ~~Structure~~March 22, 2024, the Company executed a LOI to acquire certain assets, including furniture, equipment, inventory and supplies of Boca Cove Detox, LLC, along with the assignment of lease and sub-lease for premises located at 899 Meadow Avenue, Boca Raton, Florida. On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company assumed the lease for suites 100,101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement. The purchase price was $240,000 which was settled by a deposit of $20,000 and a cash payment of $220,000 and the payment to the Seller of $83,393 for the assumption of the security deposit held by the landlord of the Leased Premises located at 899 Meadows Road.

~~The~~On October 22, 2024, ARIA Kentucky LLC (ARIA Kentucky”), a wholly owned subsidiary of the Company, Edgewater Recovery Centers, LLC ~~consists~~(“ERC”) and John Elam (the ”Seller”), entered into an Asset Purchase Agreement (”APA”) pursuant to which ARIA Kentucky agreed to acquire and ERC agreed to sell to ARIA Kentucky on the closing date (the “Acquisition”) , the addiction treatment operations owned by ERC and located in Morehead and Paducah, Kentucky through a purchase of the ~~following~~assets of ERC (the “Acquired Assets”), including; all assets of ERC used in the business of ERC (except for certain specified assets), including but not limited to all current assets existing at the time of closing, all cash balances and rights to receive cash, all equipment, machinery, all warranties related to the business and acquired assets, all intangible personal property, intellectual property, all business inventories, all property leases associated with the business, all assumed contracts, 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 ERC (the “Real Property”) is fully leveraged and requires credit and personal guarantees which the Company is unable to provide. The entities: owning the real property were acquired in a separate transaction by BH Properties Fund LLC (“BH Properties”), a company controlled by Mr. Shawn Leon, the Company’s CEO and therefore a related party. BH Properties through its acquired subsidiaries then entered into lease agreements with ARIA Kentucky on an arms-length basis, at market related rates.

~~Ethema~~On ~~Health~~January 9, ~~Corporation~~2025, ~~(Parent~~ARIA ~~company);~~Kentucky consummated the Acquisition of the Acquired Assets of ERC. Pursuant to the terms of the APA, at closing ARIA Kentucky paid the Seller $250,000 and assumed certain liabilities related to the Acquired Assets, including trade payables and liabilities under assumed contracts and certain specifically identified liabilities, including a settlement agreement with the United States government and the State of Kentucky and certain obligations as a borrower or guarantor related to banking obligations.

~~Ethema~~On January 9, 2025, in a separate transaction, isBH ~~the~~Properties ~~publicly~~acquired ~~traded~~ERC ~~investment~~Investments, ~~holding~~LLC ~~company~~(”ERCI”), ~~registered~~New inJourney ~~Colorado~~LLC (“NJ”) and JDE Properties, ~~U.S.~~LLC (“JDE”) which separately own certain Real Property on which ARIA Kentucky operates and ~~owns~~which ~~the~~was ~~following~~subsequently ~~entities:~~leased to ARIA Kentucky.

~~American Treatment Holdings, Inc, a US registered company (100% owned);~~3

~~ATHI~~Corporate ~~owns 100% of the members’ interest of Evernia Health Center LLC.~~ Structure

~~Evernia~~The Company ~~Health~~consists ~~Center~~of ~~LLC,~~the afollowing ~~US registered company;~~entities:

~~Evernia operates a treatment center in West Palm Beach Florida and is a wholly owned subsidiary of ATHI which was acquired by~~ Ethema ~~effective July~~Health 1,Corporation ~~2021.~~(Parent ~~The Company has been actively involved in the operation of this treatment center since June 30, 2020.~~company);

~~Delray~~Ethema is ~~Andrews~~the ~~RE,~~publicly ~~LLC~~traded ~~(“DARE”),~~investment aholding UScompany, registered ~~company~~in ~~(100%~~Colorado, ~~owned~~U.S. and ~~dormant);~~owns the following entities:

~~DARE has~~American ~~remained~~Treatment ~~dormant~~Holdings, ~~since~~Inc, ~~inception.~~a US registered company (100% owned);

PBATHI owns ~~Billing~~100% of the members’ interest of Evernia Health Center LLC. ~~(“PB~~Ethema ~~Bill”)~~acquired 75% of ATHI effective July 1, 2021. On May 15, 2024, the Company entered into a USStock ~~registered~~Purchase ~~company~~Agreement ~~(100~~whereby it acquired the remaining 25% ~~owned);~~of ATHI from the minority stockholder.

~~PB Billing~~Evernia ~~performs~~Health ~~the~~Center ~~function~~LLC, ofa ~~billing~~US ~~and~~registered ~~collection for Evernia.~~company;

~~ARIA~~Ethema owns ~~Kentucky~~100% ~~LLC~~of ~~(“Aria Kentucky”)~~Evernia, who operates a UStreatment ~~registered~~center ~~company~~in ~~(100%~~West Palm Beach Florida and is a wholly owned); subsidiary of ATHI which was acquired by Ethema effective July 1, 2021. The Company has been actively involved in the operation of this treatment center since June 30, 2020.

~~Aria Kentucky~~Delray ~~was~~Andrews ~~established~~RE, ~~during~~LLC ~~the current year as the acquisition subsidiary for the business of Edgewater Recovery~~(“DARE”), ~~which~~a ~~was closed~~US onregistered ~~January~~company 9,(100% ~~2025,~~owned ~~see~~and ~~subsequent events.~~dormant);

3DARE has remained dormant since inception.

~~Employees~~PB Billing LLC (“PB Bill”), a US registered company (100% owned);

AsEthema owns 100% of ~~December~~PB 31Billing, ~~2024,~~which ~~Ethema~~performs ~~had 70 employees~~the function of billing and 14collection ~~part-time~~for ~~contractors.~~Evernia and ARIA Kentucky

~~Marketing~~ARIA Kentucky LLC (“ARIA Kentucky”), a US registered company (100% owned);

~~The addiction treatment business~~Ethema inowns ~~the~~100% ~~USA~~of ~~operates~~ARIA ~~as an insured healthcare service~~Kentucky. ~~Our~~ARIA ~~marketing~~Kentucky ~~efforts~~acquired ~~are~~the ~~long-term~~business ~~processes~~and ofcertain ~~establishing~~assets ~~relationships with relevant professionals~~ and ~~our~~liabilities ~~treatment~~of ~~staff. We use~~Edgewater ~~industry specific conferences~~Recovery ~~and~~on ~~functions~~January to9, ~~network with these professionals~~2025.

~~Through Evernia, the Company has an in-network relationship with several health care providers and the majority of the Company’s clients are sourced from these health care providers.~~ Employees

~~Competition~~As of December 31, 2025, Ethema had 207 employees and 16 part-time contractors.

~~There are a significant amount of treatment facilities in the United States, we compete with these clinics for patients who are typically covered by insured healthcare services.~~Marketing

~~Environmental~~The addiction ~~Regulations~~treatment business in the USA operates as an insured health care service. Our marketing efforts are long-term processes of establishing relationships with relevant professionals and our treatment staff. We use industry specific conferences and functions to network with these professionals.

~~The~~Through ~~Company~~Evernia, isthe ~~not~~Company ~~currently~~has ~~subject~~an toin-network ~~any~~relationship ~~pending~~with ~~administrative~~several orhealth ~~judicial~~care ~~enforcement~~providers ~~proceedings arising under environmental laws or regulations. Environmental laws~~ and ~~regulations~~the ~~may~~majority beof ~~adopted in~~ the ~~future~~Company’s ~~which~~clients ~~may~~are ~~have~~sourced from anthese ~~impact~~health ~~upon~~care ~~the Company’s operations~~providers.

~~Item 1A. Risk Factors.~~Competition

~~Not applicable~~There ~~because~~are a significant number of treatment facilities in the United States, we compete with these clinics for patients who are atypically covered ~~smaller~~by ~~reporting~~insured ~~company~~health care services.

~~Item 1B. Unresolved Staff Comments~~4

~~None.~~ Environmental Regulations

~~Item~~The Company 2is not currently subject to any pending administrative or judicial enforcement proceedings arising under environmental laws or regulations. ~~Properties~~Environmental laws and regulations may be adopted in the future which may have an impact upon the Company’s operations.

~~Ethema~~Item ~~Executive~~1A. ~~Offices~~Risk Factors.

~~The Company’s~~Not ~~executive~~applicable ~~offices~~because we are ~~located~~a atsmaller ~~950~~reporting ~~Evernia Street, West Palm Beach, Florida, 33406~~company.

~~West~~Item ~~Palm~~1B. ~~Beach~~Unresolved ~~Treatment~~Staff ~~Operations~~Comments

~~The Company, through its acquisition of ATHI, effectively acquired an initial 75% of the Evernia treatment facility located at 950 Evernia Street, West Palm Beach Florida~~None. ~~On May 15, 2024, the Company acquired the remaining 25% of ATHI. The Company has been actively involved in the operation of the Evernia treatment facility since June 2020.~~

~~On March~~Item 22, 2024, the Company through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company assumed the lease for suites 100, 101, 201, 202 and 203, located at 899 Meadows Road, Boca Raton, Florida (the “Boca Leased Premises”)2. ~~The~~ ~~company began operating a treatment facility at the Boca Lease Premises during January 2025~~Properties.

~~Item~~Ethema Executive ~~3. Legal Proceedings.~~Offices

~~We are currently~~The ~~not~~Company’s involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive ~~officers~~offices ~~of our~~are ~~company~~located orat ~~any~~950 ofEvernia ~~our subsidiaries~~Street, ~~threatened~~West ~~against~~Palm ~~or affecting our company~~Beach, ~~our common stock~~Florida, ~~any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect~~33401.

~~Item~~West Palm 4.Beach ~~Mine~~Treatment ~~Safety Disclosures.~~Operations

~~None~~The Company, through its acquisition of ATHI, effectively acquired an initial 75% of the Evernia treatment facility located at 950 Evernia Street, West Palm Beach Florida. On May 15, 2024, the Company acquired the remaining 25% of ATHI. The Company has been actively involved in the operation of the Evernia treatment facility since June 2020.

4On March 22, 2024, the Company through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company assumed the lease for suites 100, 101, 201, 202 and 203, located at 899 Meadows Road, Boca Raton, Florida (the “Boca Leased Premises”). The company began operating a treatment facility at the Boca Lease Premises during January 2025.

~~PART~~Kentucky Treatment IIOperations

~~Item~~The Company 5.through ~~Market~~the ~~for~~acquisition ~~Registrant’s~~of ~~Common~~the ~~Equity~~business, ~~Related~~certain ~~Stockholder~~assets ~~Matters~~and liabilities of Edgewater Recovery Center, LLC, operates treatment centers in Morehead, Kentucky and ~~Issuer~~Paducah, ~~Purchases~~Kentucky through 11 leased properties, of ~~Equity~~which ~~Securities~~two are in Paducah and the remaining in Morehead.

~~The Company’s~~Item ~~common stock is quoted on the Over-the-counter Market (the “OTC PINK”) under the symbol “GRST”~~3. ~~The~~Legal ~~Company was sponsored by the market maker Wilson Davis & Co~~Proceedings. from Salt Lake City, Utah, which filed a Form 15c2-11 application with the Financial Industry Regulatory Authority (“FINRA”) for the Company in 2011. This application was approved by FINRA in February 2012, and Wilson Davis & Co. first quoted the stock in March 2012.

~~From~~We are ~~March~~currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results ~~2012~~of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to ~~January~~the ~~2020~~knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, ~~had~~any ~~been~~of ~~traded~~our onsubsidiaries or ~~the~~of ~~OTCQB~~our ~~markets~~companies ~~under~~or ~~the~~our ~~symbol~~subsidiaries’ ~~“GRST”.~~officers Inor ~~January~~directors ~~2020~~in their capacities as such, ~~the~~ ~~stock~~in ~~was~~which ~~downgraded~~an toadverse ~~the~~decision ~~OTC~~could have ~~Pink~~a ~~Sheets~~material ~~market~~adverse effect.

~~The last~~Item ~~reported sale price of our common stock on the OTC Pink on May 21, 2025 was $0~~4.~~0004~~ ~~per~~Mine ~~share.~~Safety ~~As of May 21, 2025, there were approximately 152 holders of record of our common stock~~Disclosures.

~~Dividend Policy~~None.

We have not paid any cash dividends on our common stock to date, and we have no intention of paying cash dividends in the foreseeable future. Whether we declare and pay dividends is determined by our Board of Directors at their discretion, subject to certain limitations imposed under Colorado corporate law. The timing, amount and form of dividends, if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.5

~~Equity~~PART ~~Compensation Plan Information~~II

~~See~~ Item 11 -5. ~~Executive~~Market ~~Compensation~~ for ~~equity~~Registrant’s ~~compensation~~Common ~~plan~~Equity, ~~information.~~Related Stockholder Matters and Issuer Purchases of Equity Securities

~~Recent~~The ~~Sales~~Company’s ofcommon ~~Unregistered~~stock ~~Securities~~is quoted on the Over-the-counter Market (the “OTC PINK”) under the symbol “GRST”. The Company was sponsored by the market maker Wilson Davis & Co. from Salt Lake City, Utah, which filed a Form 15c2-11 application with the Financial Industry Regulatory Authority (“FINRA”) for the Company in 2011. This application was approved by FINRA in February 2012, and Wilson Davis & Co. first quoted the stock in March 2012.

~~Other than~~From asMarch ~~set~~2012 ~~forth~~to ~~below~~January or2020, asour ~~previously~~common ~~disclosed~~stock inhad ~~our~~been ~~filings~~traded ~~with~~on the ~~Securities~~OTCQB ~~and~~markets ~~Exchange~~under ~~Commission,~~the wesymbol ~~did~~“GRST”. ~~not~~In ~~sell~~January ~~any equity securities~~2020, ~~during~~ the ~~year~~stock ~~ended~~was ~~December 31, 2024~~downgraded into ~~transactions~~the ~~that~~OTC ~~were~~Pink ~~not~~Sheets ~~registered under the Securities Act~~market.

The last Onquoted ~~July~~stock ~~12,~~price ~~2024, the Company issued a total~~ of ~~3,000,000,000~~our ~~shares of~~ common stock toon ~~Mr. Shawn Leon,~~ the ~~company~~OTC ~~CEO~~Pink ~~for~~on ~~the~~June ~~conversion of $1~~24,~~500,000~~ of2026 ~~related~~was ~~party~~$0.00001 ~~payables~~per ~~and~~share. aAs ~~further~~of 1June 24,~~000,000,000~~ ~~shares to his spouse~~2026, ~~Ms.~~there ~~Eileen~~were approximately ~~Greene,~~150 ~~for~~holders ~~the~~of ~~conversion~~record of ~~$500,000 of~~our ~~related~~common ~~parties payables~~stock.

~~On September 27, 2024, we issued 600,000 shares of Series~~Dividend ~~A Preferred stock to Mr. Shawn Leon for the conversion of $6,000 of related party payables.~~Policy

OnWe ~~November~~have ~~17,~~not ~~2024,~~paid ~~165~~any cash dividends on our common stock to date,~~000~~ ~~shares~~and we have no intention of ~~Series~~paying Acash ~~Preferred~~dividends ~~stock~~in ~~was~~the ~~sold~~foreseeable tofuture. Whether awe ~~relative~~declare and pay dividends is determined by our Board of MrDirectors at their discretion, subject to certain limitations imposed under Colorado corporate law. ~~Leon~~The ~~for~~timing, ~~gross~~amount ~~proceeds~~and form of $1dividends,~~650~~ if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

~~Penny~~Equity ~~Stock~~Compensation Plan Information

~~The U.S.~~See ~~Securities~~Item 11 and Exchange Commission (the “SEC”) has adopted rules that regulate broker dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; (b) contains a description of the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws. (c) contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; (d) contains a toll-~~free~~ ~~telephone~~Executive ~~number~~Compensation for ~~inquiries~~equity oncompensation ~~disciplinary~~plan ~~actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other~~ information ~~and is in such form, including language, type size and format, as the SEC shall require by rule or regulation~~.

~~The broker~~Recent ~~dealer~~Sales ~~also must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation~~ of ~~the~~Unregistered broker dealer and its salesperson in the transaction; (c) the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.Securities

5Other than as set forth below or as previously disclosed in our filings with the Securities and Exchange Commission, we did not sell any equity securities during the year ended December 31, 2025 in transactions that were not registered under the Securities Act.

~~In addition,~~ ~~the~~Penny penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.Stock

~~These~~The U.S. ~~disclosure~~Securities and Exchange Commission (the “SEC”) has adopted rules that regulate broker dealer practices in connection ~~requirements~~with ~~may~~transactions ~~have~~in penny stocks. Penny stocks are generally equity securities with a market price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the ~~effect~~NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, that: (a) contains a description of ~~reducing~~the nature and level of risk in the market for penny stocks in both public offerings and secondary trading; ~~activity~~(b) ~~for~~contains a ~~our~~description ~~common~~of ~~stock~~the broker’s or dealer’s duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of the securities laws. ~~Therefore~~(c) contains a brief, ~~stockholders~~clear, ~~may~~narrative ~~have~~description of ~~difficulty~~a ~~selling~~dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price; ~~our~~(d) ~~securities~~contains a toll-free telephone number for inquiries on disciplinary actions; (e) defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and (f) contains such other information and is in such form, including language, type size and format, as the SEC shall require by rule or regulation.

~~Issuer Purchases of Equity Securities~~6

~~There~~The ~~were~~broker nodealer ~~issuer~~also ~~purchases~~must provide, prior to effecting any transaction in a penny stock, the customer with (a) bid and offer quotations for the penny stock; (b) the compensation of ~~equity~~the ~~securities~~broker ~~during~~dealer and its salesperson in the ~~fiscal~~transaction; ~~year~~(c) ~~ended~~the ~~December 31~~number of shares to which such bid and ask prices apply, ~~2024~~ or other comparable information relating to the depth and liquidity of the market for such stock; and (d) a monthly account statement showing the market value of each penny stock held in the customer’s account.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from those rules, the broker dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written acknowledgment of the receipt of a risk disclosure statement, a written agreement as to transactions involving penny stocks, and a signed and dated copy of a written suitability statement.

These disclosure requirements may have the effect of reducing the trading activity for our common stock. Therefore, stockholders may have difficulty selling our securities.

Issuer Purchases of Equity Securities

There were no issuer purchases of equity securities during the fiscal year ended December 31, 2025.

Item 6. Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with, and is qualified in its entirety by, our audited annual financial statements and the related notes thereto, each of which appear elsewhere in this Annual Report. This discussion contains certain forward-looking statements that involve risks and uncertainties in this Annual Report. Actual results could differ materially from those projected in the forward-looking statements. The Management Discussion and Analysis of Financial Condition and Results of Operations below is based upon only the financial performance of Ethema Health Corporation.

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the consolidated financial statements as well as the reported amounts of revenues and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates. This discussion and analysis should be read in conjunction with the ~~company~~Company’s consolidated financial statements and accompanying notes to the consolidated financial statements for the year ended December 31, ~~2024~~2025.

Results of operations for the year ended December 31, ~~2024~~2025 and the year ended December 31, ~~2023~~2024.

Revenue

Revenue ~~was~~ was $18,764,817 and $6,017,204 for the years ended December 31, 2025 and 2024, respectively, an increase of $512,~~344~~747,~~976~~613 or 211.9%. Revenues included $10,846,266 from the acquisition of the business of ERC. Revenues from existing business was $7,918,551 and $6,017,204 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $~~672~~1,~~228~~901,347 or 1231.6%. The increase is primarily due to the increase in patient count at the West Palm Beach facility and the acquisition of the Boca Raton rehab and detox facility during June 2024, which commenced revenue generating operations in January 2025, after obtaining all necessary regulatory approvals.

~~Revenue from~~During ~~patient~~the ~~treatment~~last ~~was~~quarter of $62025,~~017,204~~ ~~and~~a $5health care provider,~~164,454~~ ~~for~~which ~~the~~is ~~years~~a ~~ended~~significant ~~December~~customer ~~31,~~of ~~2024~~ours ~~and~~reduced ~~2023,~~its ~~respectively,~~reimbursement anrates ~~increase~~on services we provide to their ofpatients ~~$852~~by significant amounts,~~750~~ orthis ~~16.5%.~~resulted ~~The~~in ~~increase~~some isservices ~~due~~we provide to ~~organic~~this ~~growth~~customer inbeing ~~the~~no ~~number~~longer ofprofitable. ~~in-network~~We ~~patients~~have atreacted to ~~the~~these ~~facility~~reduced ~~and~~rates anby ~~increase in~~ceasing ~~advertising~~to ~~spend~~offer certain services to ~~attract~~this customer’s patients and by restructuring our operations to reduce expenses in the ~~facility~~first and second quarters of 2026.

Revenue from rental income was $0 and $180,522 for the years ended December 31, 2024 and 2023, respectively, a decrease of $180,522 or 100.0%. The Company disposed of its real property owning subsidiary, Cranberry Cove Holdings, to a related party, Leonite Capital, LLC on June 30, 2023.7

Operating Expenses

~~Operating~~ ● General and administrative expenses ~~was~~were $73,~~350~~934,~~333~~900, and $51,~~886~~550,~~896~~799 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $2,384,101 or 153.7%. General and administrative expenses include $2,042,981 from the acquisition of the business of ERC. General and administrative expenses from existing operations was $1,~~463~~891,~~437~~919 and $1,550,799 for the years ended December 31, 2025 and 2024, respectively, an increase of $341,120 or 2422.90%. The increase is primarily due to an increase in ~~operating~~client costs related to the additional client count at the Boca Cove facility and an increased patient count at the West Palm Beach facility, an increase in advertising and promotional activity to attract customers to our facilities and an increase in property expenses, iswhich ~~attributable~~includes property taxes at the Boca Cove facility for the full year compared to: eight months from the prior year.

General and administrative expenses was $1,550,799 and $1,041,501 for the years ended December 31, 2024 and 2023, respectively, an increase of $509,298 or 48.9%. The increase is primarily attributable to due to an increase in advertising and marketing costs of $228,767, we spent more funds on advertising to attract new patients to our West Palm Beach facility during the current year, and increases in general operating expenses resulting from the increased patient count, including an increase in food costs of $47,739, an increase in small equipment purchases of $37,596, an increase in client supplies of $20,248, an increase in utilities of $35,450 and an increase in travel costs of $34,160, in addition, property taxes increased by $73,082 due to the increased property value in West Palm Beach and, the balance of $38,256 consisting of increase in numerous individually insignificant costs, related to the increase in the number of patients passing through the facility during the current period.

Rent expense was $1,304,127 and $614,793 for the years ended December 31, 2024 and 2023 an increase of $689,334 or 112.1%. The increase is primarily due to an increase in rental which arose on the acquisition of the west Palm Beach building in August 2023 from our landlord and the immediate disposal of the building to a third party, resulting in the cancellation of the old lease which expired in January 2027 and entering into a new 20 year lease expiring in August 2043, at an increased rental expense of $410,204 over the prior year, including a significant rent smoothing adjustment of $223,851 during the current year, in addition, we acquired the business of Boca Cove Detox during the current year and incurred a rental expense of $221,275 for the use of this facility. We only began generating revenue from this facility in January 2025, after obtaining the necessary licensing and approval from the health care insurance providers.

●

Salaries and wages were $9,547,395 and $3,072,654 for the years ended December 31, 2025 and 2024, respectively, an increase of $6,474,741 or 210.7%. Salaries and wages includes $5,672,662 from the acquisition of the business of ERC. Salaries and wages from existing operations was $3,874,733 and $3,072,654 for the years ended December 31, 2025 and 2024, respectively, an increase of $802,079 or 26.1%. The increase is due to the acquisition of the Boca Raton facility, which was fully staffed up and operational beginning January 2025, and additional staff at our West Palm Beach facility to meet increased patient capacity.

6● Rent expense was $3,013,306 and $1,304,127 for the years ended December 31, 2025 and 2024, respectively, an increase of $1,709,179 or 131.1%. Rent expense includes $1,501,163 from the acquisition of the business of ERC. Rental expense from existing operations was $1,512,143 and $1,304,127 for the years ended December 31, 2025 and 2024, respectively, an increase of $208,016 or 16.0%. The increase is primarily due to the additional rent incurred at the Boca Cove detox facility of $170,835 which was acquired in June 2024 and additional rental costs for an apartment in West Palm Beach during the current period.

·● ~~Management~~Professional fees were $~~0 and $368~~1,~~003 for the years ended December 31~~597,072 ~~2024~~ and ~~2023, respectively, a decrease of~~ $368,003 or 100.0%. In the prior year management fees included a once off charge of $185,503 related to a fee charged by Leon Developments to Cranberry Cove prior to its disposal to a related party, Leonite Capital on June 30, 2023. In addition, the Company paid management fees of $182,500 to the minority stockholder of ATHI during the prior year. · Professional fees were $955,801 ~~and $707,413~~ for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $~~248~~641,~~388~~271 or 3567.1%. ~~The~~Professional ~~increase is primarily due to an increase in contractor~~ fees ~~incurred~~includes ~~by our in-house billing company of~~ $~~182~~645,~~434~~582 ~~during the current year as we bolster this department to improve our collections~~ from ~~insurance providers. In addition we incurred professional fees related to corporate activity on closing~~ the acquisition of ~~Boca Cove Detox and~~ the ~~acquisition of the~~ business of ~~Edgewater Recovery in Kentucky which closed on January 7, 2025~~ERC. ·Professional ~~Salaries~~fees ~~and~~from ~~wages~~existing ~~were~~operations was $3951,~~072,654~~490 and $2955,~~656,267~~801 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, ana ~~increase~~decrease of $~~416~~4,~~387~~311 or 150.75%. ~~The~~Professional ~~increase~~fees isinclude ~~due~~fees toincurred ~~acquisition~~for ofthe ~~Boca~~acquisition ~~Cove Detox which was fully staffed in anticipation~~ of ~~receiving~~the ~~our~~Edgewater ~~licenses~~facility and ~~approvals from healthcare providers~~ in the ~~third~~prior ~~quarter~~period ~~of 2024, this was only obtained in January 2025. In addition we increased our headcount~~ due to the ~~increased~~acquisition ~~patient~~of ~~count during~~ the ~~current~~25% ~~year.~~non-controlling ·shareholders ~~Depreciation~~interest ~~and~~in ~~amortization~~Evernia ~~expense was $466,952~~ and ~~$498,919 for~~ the ~~years~~assets ~~ended December 31, 2024 and 2023, respectively, a decrease~~ of ~~$31,967 or 6.4%. The decrease is primarily due to~~ the ~~disposal~~Boca ~~of Cranberry~~ Cove ~~Holdings~~detox ~~to Leonite Capital, a related party, on June 30, 2023~~center. ~~Cranberry Cove assets included buildings and leasehold improvements which were being depreciated prior to disposal.~~

●

Management fees were $120,000 and $0 for the years ended December 31, 2025 and 2024, respectively, an increase of $120,000 or 100.0%. Due to an improvement in the Company’s performance, 50% of the monthly management fee of $20,000 was accrued during the current year. In the prior year the historical management fee of $20,000 per month was forfeited due to the operating loss realized.

●

Depreciation and amortization expense was $812,279 and $466,952 for the years ended December 31, 2025 and 2024, respectively, an increase of $345,327 or 74.0%. Depreciation and amortization includes depreciation and amortization from the acquisition of the business of ERC amounting to $317,406. Depreciation and amortization expense from existing operations was $494,873 and $466,952 for the years ended December 31, 2025 and 2024, respectively, an increase of $27,921 or 6.0%. The increase is primarily due to additional depreciation incurred on assets acquired with the Boca Raton facility in June 2024.

Operating loss

The operating loss was $260,135 and $1,333,129 ~~and $541,920~~ for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, ana ~~increase~~decrease in loss of $~~791~~1,~~209~~072,994 or ~~146~~80.05%. The decrease is primarily due to the increase in ~~loss~~revenue, isprimarily due to the ~~increase~~acquisition inof ~~operating~~ERC ~~expenses~~and ofthe ~~$1,463,437,~~increased ~~discussed~~revenue in ~~detail~~our ~~above,~~Florida locations, offset by ~~the~~an increase in ~~revenue~~ ofoperating ~~$672~~expenses,~~228,~~ as discussed in detail above.

Other income

Other ~~income~~ income was $~~110~~66,~~000~~107 and $0110,000 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, a decrease of $43,893 or 39.9%. ~~Other~~The decrease in other income ~~consisted~~was ofprimarily related to management fees ~~provided~~earned to from Edgewater Recovery, in the prior toyear. ~~acquisition~~During bythe current year an employee retention credit was received from the ~~Company~~federal government.

Other expense

Other expense was $0 and $1,160 ~~and $0~~ for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, ana ~~increase~~decrease of $1,160 or 100.0%.

Gain on disposal of property

Gain on disposal of property was $0 and $2,484,172 for the years ended December 31, 2024 and 2023, respectively, a decrease of $2,484,172 or 100.0%. In the prior year, the Company exercised its option to acquire the property located at 950 Evernia Street, West Palm Beach, Florida, in which its treatment center operations are located, and subsequently disposed of the property to a third party, realizing a profit on disposal of $2,484,172, after transaction costs.

Loss on debt extinguishment

Loss on debt extinguishment was $0 and $277,175 for the years ended December 31, 2024 and 2023, respectively, a decrease of $277,175 or 100.0%. In the prior year, the loss on debt extinguishment was related primarily to replacement warrants issued to Leonite Capital as part of the debt settlement agreement reached with Leonite.

Extension fee on property purchase

The extension fee on the property purchase was $0 and $140,000 for the years ended December 31, 2024 and 2023, respectively, a decrease of $140,000 or 100%. In the prior year, the extension fee was levied by the landlord of our West Palm Beach facility to afford us additional time to structure the acquisition of the facility, which we in turn disposed of to a third party lender.

Penalty on convertible notes

The penalty on convertible notes was $0 and $34,688 for the years ended December 31, 2024 and 2023, respectively, a decrease of $34,688 or 100.0%. In the prior year, the penalty on convertible note was agreed upon with one of our lenders whose notes were in default and was subsequently settled after June 30, 2023.

Interest income

Interest income was $23,~~292~~884 and $~~676~~2,292 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 respectively. Interest income ~~represent~~represents interest earned on on positive bank balances.

Interest expense

Interest expense was $~~565~~1,~~343~~ 388,074 and $~~500~~565,~~226~~343 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $65822,~~117~~731 or 13145.05%,. ~~primarily~~Included ~~due~~in interest expense is interest of $486,234 related to the ~~increase~~ inacquisition ~~short~~of ~~term~~the ~~note~~business ~~funding~~ of ERC. Interest expense on the existing business was $1901,~~912~~840 and $565,~~000~~343 ~~less~~for ~~repayments~~the years ended December 31, 2025 and 2024, respectively, an increase of $~~752~~336,~~680~~498 or 59.5%, primarily ~~the~~due to default interest on letter of credit funding, additional ~~funds~~interest on Series R promissory notes which were entered into ~~raised~~during the period March to ~~fund~~May 2024, and interest on promissory notes issued to acquire the ~~acquisition~~assets of the Boca ~~Cove~~Raton ~~Detox~~facility and ~~for~~the non-controlling ~~general~~shareholders ~~working~~interest ~~capital~~in ~~purposes~~the prior year.

~~Debt~~Amortization of debt discount

~~Debt~~Amortization of debt discount was $~~416~~616,~~120~~072 and $~~281~~416,~~354~~120 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase of $~~134~~199,~~766~~952 or 4748.91%. ~~The~~ Included in ~~increase~~amortization of debt discount is ~~primarily~~amortization ~~due~~of $209,212 related to ~~the~~funding ~~increase~~arrangements in ~~short~~ARIA ~~term~~Kentucky. ~~note~~Amortization ~~funding~~of ~~issued~~debt discount atin athe ~~discount~~existing business was $406,860 and ~~the~~$416,120, ~~increased~~a ~~utilization~~decrease of ~~receivables~~$9,260 or 2.2%. The amortization of debt discount relates primarily to short-term funding ~~during~~arrangements. In the current ~~year~~period ~~resulting~~the inCompany increased ~~amortization~~its offunding ~~debt~~arrangements ~~discount~~to ~~associated~~fund ~~with~~working ~~this~~capital requirements ~~funding~~in both the ARIA Kentucky operation and our Florida operations.

Foreign exchange movements

Foreign exchange movements were $37(36,~~523~~023) and $~~(95~~37,~~032)~~523 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. Foreign exchange movements represents the realized exchange gains and (losses) on monetary assets and liabilities settled during the current year as well as mark to market unrealized gains and losses on monetary assets and liabilities reflected on the balance sheet and denominated in Canadian Dollars.

Net (loss) ~~income~~ before income taxes

Net ~~(loss)~~ ~~income~~loss before income taxes was $(2,~~165~~230,~~937)~~313 and $~~614~~2,~~453~~165,937 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase in loss of $264,~~780,390~~376 or ~~452~~3.50%. The increase is primarily due to ~~the~~ an increase in operating ~~loss as discussed above~~expenses, ~~the increase in~~ interest expense and amortization of debt discount, ~~the prior period gain on sale of property,~~ offset by the ~~other~~increased ~~income earned for managing the Edgewater facility~~revenue, ~~a decrease in the prior year loss on debt extinguishment and the prior year extension fee on the property purchase,~~ all discussed in detail above.

Income taxes

Income taxes ~~were~~was a credit of $052,644 and $~~391,962~~0 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively aan ~~decrease~~increase in credit of $~~391~~52,~~962~~644 or 100.0%. ~~Losses were~~The ~~made~~taxation incharge represents the ~~current~~deferred ~~year,~~tax ~~resulting~~movement inon ~~an increase in~~ the ~~NOL~~value ~~valuation~~of ~~allowance.~~certain Inidentifiable ~~the~~intangibles ~~prior~~acquired from ~~year,~~Edgewater. weThe ~~completed~~Company ~~tax returns~~made ~~for~~losses ~~our~~during ~~operating~~the ~~subsidiaries~~current year, ~~which~~increasing ~~resulted~~its inNet ~~the~~Operating ~~reversal~~loss ~~of previously provided~~ for ~~income~~tax ~~taxes~~purposes, ~~primarily~~a ~~related~~full tovaluation ~~accelerated~~allowance ~~depreciation~~has ~~allowances~~been onprovided ~~property~~against ~~and equipment and the reversal of the~~ deferred tax ~~liability related to intangible~~ assets.

Net (loss~~) income~~

Net (loss) ~~income~~ was $(2,~~165~~177,~~937)~~669 and $12,~~006~~165,~~415~~937 for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively, an increase in loss of $311,~~172,352~~ 732 or ~~315~~0.25%. The increase is due to the increase in loss before income taxes, ~~and~~offset by the ~~prior~~deferred ~~period~~tax ~~reversal~~credit relating to the acquisition of ~~income~~intangibles ~~tax~~assets ~~charges~~on ~~and deferred~~the ~~tax~~acquisition ~~balances,~~of ~~discussed~~the ~~above~~assets of Edgewater.

Liquidity and Capital Resources

Cash used in operating activities was $0.4603 million and $0.5346 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively a decrease of $0.0743 million or 1393.25%. The decrease is primarily due to the following:

	The increase in net loss of $(3.2) million, as discussed above;
·	The decrease in non-cash movements of $2.5 million, primarily due to the prior year gain on disposal of property of $2.5 million, as discussed above;
·	The decrease in working capital movements of $0.8 million, primarily due to an increase in the movement of accounts receivable of $0.1 million, increase in the movement of accounts payable and accrued liabilities of $0.2 million, the increase in movement of operating lease liabilities of $0.3 million, and the increase in the movement of taxes payable of $0.2 million due to the reversal of tax provisions in the prior year.

●	The increase in net loss of $0.01 million, as discussed above;

●	The increase in non-cash movements of $1.8 million, primarily due to the increase in the movement on right-of-use assets, due to new leases entered into in ARIA Kentucky, the increase in the movement for provision for credit losses of $0.46 million on ARIA Kentucky receivables, the increase in the movement of depreciation and amortization of $0.35 million due to the ARIA Kentucky acquisition of property and equipment assets and intangibles, and the increase in the movement of amortization of debt discount of $0.2 million due to the increased level of debt subject to discount borrowed during the current year;

●	The decrease in working capital movements of $(1.39) million, primarily due to an increase in the movement of accounts receivable of $1.1 million, due to the acquisition of the business of Edgewater and the increase in receivables balances in existing operations, a decrease in the movement in related party balances of $(0.28) million as some of the ARIA Kentucky acquisition liabilities were repaid, a decrease in the movement of operating lease liabilities of $(0.70) million, primarily related to new leases entered into in ARIA Kentucky and the increase in the liability for the West Palm Beach facility, related to rent smoothing adjustments, offset by an increase in the movement of accounts payable and accrued liability balances of $0.67 million, primarily due to interest accruals during the current year.

Cash used in investing activities was $1.0.25 million and ~~cash provided by investing activities was~~ $21.50 million for the years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively. In the current year, ~~the~~we ~~Company~~ acquired the business of ~~the~~ERC ~~Boca~~for ~~Cove~~gross ~~detox~~proceeds ~~facility~~of ~~for~~ $0.225 million ~~and~~ ~~the~~net ~~payment~~ of ~~property~~cash ~~deposits~~on ~~related~~acquisition ~~to this facility~~ of $0.1 3 million, weresulting ~~also acquired the minority stockholders interest~~ in ~~ATHI for~~ a net cash ~~payment~~generated on acquisition of $0.605 million, ~~and~~we ~~purchased~~also ~~additional~~invested ~~property and equipment of~~ $0.128 million atin ~~our~~property ~~west~~and ~~Palm Beach facility.~~equipment, Inincluding ~~the~~leasehold ~~prior~~improvements ~~year, the Company exercised its option~~ to ~~acquire~~leased ~~950~~properties ~~Evernia~~and ~~Street,~~purchases ~~where~~of itfittings ~~conducts~~and ~~its~~fixtures ~~treatment~~to ~~facility~~increase ~~for~~the ~~net~~capacity ~~proceeds~~ of $5our facilities.2 In ~~million,~~the ~~net~~prior ofperiod we paid $0.463 million offor ~~deposits~~the ~~previously paid. Upon~~ acquisition, weof ~~immediately~~the ~~sold~~minority ~~the~~interest ~~property~~in ~~for~~ATHI, ~~net~~a ~~proceeds of~~further $80.124 million, for ~~after~~the ~~fees~~acquisition ~~and~~of ~~expenses~~the ~~related~~assets toof ~~the~~Boca ~~disposal,~~Cove Detox and ~~paid~~ a ~~rental~~further ~~deposit of~~ $0.408 million ~~related~~for tothe assumption of the ~~lease~~real ~~entered into~~property deposit on the ~~property~~Boca ~~disposed~~Cove offacility.

Cash provided by financing activities was $0.08 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively. During the current period, we raised $2.64 million from funding arrangements and repaid $2.56 million, a net movement of $0.08 million, we received an additional bank loan of $0.3 million and issued two promissory notes for an additional $0.3 million, additionally we repaid $0.17 million of short-term notes and $0.12 million in principal on bank loans. We repaid assumed liabilities of $0.16 million and promissory notes of $0.14 million. In the prior period the Company received $1.9 million and repaid $0.8 million of short-term notes and received $0.69 million and repaid $0.59 million from funding arrangements, we repaid $0.07 million of promissory notes, and in addition we received an advance of $0.25 million from related parties and $0.2 million from subscribers for common and preferred stock.

~~Cash~~Over ~~provided by financing activities was $1.7 million and cash used in financing activities was $(2.1) million and for~~ the ~~years~~next ~~ended~~twelve ~~December 31,~~months ~~2024~~we ~~and~~estimate ~~2023,~~that ~~respectively. In~~ the ~~current~~Company ~~year,~~will werequire ~~raised~~approximately $13.9 million in ~~short~~funding ~~term~~to ~~notes,~~repay ~~and~~its ~~repaid~~obligations ~~$0.8 million, realizing~~other athan ~~net~~convertible ~~$1.1~~notes ~~million,~~and Wepromissory ~~repaid $0~~notes.1 ~~million~~We onwill ~~the~~need ~~promissory~~funding ~~note~~for ~~due~~working oncapital ~~the~~as ~~acquisition of ATHI,~~ we ~~received~~continue ~~subscription~~to ~~receipts~~seek ofadditional opportunities ~~$0.2~~for ~~million,~~addiction wetreatment ~~also~~in ~~raised~~the aUS ~~total of $0~~markets.7 ~~million~~There ~~and~~is ~~repaid~~no ~~$0.6~~assurance ~~million~~that inthe ~~receivables~~Company ~~funding,~~will webe ~~received~~successful awith ~~net~~future ~~advance~~financing ~~from related parties of $0.2 million~~ventures, ~~these proceeds were used to acquire Boca Cove Detox~~ and the ~~minority~~inability ~~stockholders~~to ~~interest~~secure ~~and~~such ~~for~~financing ~~general working~~may ~~capital~~have ~~purposes.~~a Inmaterial ~~the~~adverse ~~prior~~effect ~~year, the net proceeds realized~~ on the ~~acquisition~~Company’s ~~and~~financial ~~immediate sale of the property, discussed under investing activities was used to repay convertible notes of $(1~~condition.0) ~~million,~~In the ~~net~~opinion ~~repayment~~ of ~~promissory notes of $(0.1) million~~ ~~and~~management, the ~~payment of third party loans of $(0.3) million. The~~ Company’s ~~also~~liquidity ~~repaid~~risk ~~net~~is ~~receivables~~assessed ~~funding~~as ~~of $(0~~high.~~4) million, mortgage loans of $(0.1) million and related party loans of $(0.2) million during the prior year.~~

Over the next twelve months we estimate that the company will require approximately $3.8 million in funding to repay its obligations other than convertible notes. We will need funding for working capital as we continue to seek additional opportunities for addiction treatment in the US markets. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. In the opinion of management, the Company’s liquidity risk is assessed as high.10

Going Concern

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the year ended December 31, ~~2024~~2025, we ~~incurred operating losses of $1.3 million and~~ had a negative cash flow from operating activities of $0.503 million. As of December 31, ~~2024~~2025, we had an accumulated deficit of $4446.46 million, working capital deficiency of $913.18 million and total liabilities in excess of total assets of $79.56 million. These matters raise substantial doubt about our ability to continue as a going concern.

Management believes that current available resources will not be sufficient to fund our planned expenditures over the next 12 months. Accordingly, we will be dependent upon the raising of additional capital through placement of common shares, and/or debt financing in order to implement our business plan and ~~generating~~generate sufficient revenue in excess of costs. If we raise additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If we raise additional funds by issuing debt, we may be subject to limitations on our operations, through debt covenants or other restrictions. If we obtain additional funds through arrangements with collaborators or strategic partners, we may be required to relinquish ~~its~~our rights to certain geographical areas, or or techniques that it might otherwise seek to retain. There is no assurance that we will be successful with future financing ventures, ~~and~~ and the inability to secure such financing may have a material adverse effect on our financial condition.

Based on the uncertainties described above, we believe our business plan does not alleviate the existence of substantial doubt about our ability to continue as a going concern within one year from the date of the issuance of these consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should we be unable to continue as a going concern.

Commitments and contingencies

The Company has commitments under operating and finance leases as follows:

The amount of future minimum lease payments under finance leases at December 31, 2025 is as follows:

	Amount
2026	$	6,195
2027		1,707
Total undiscounted minimum future finance lease payments	$	7,902

The amount of future minimum lease payments under operating leases are as follows:

	Amount
2026	$	2,854,105
2027		2,717,331
2028		2,400,557
2029		2,400,557
2030		2,400,557
2031 and thereafter		16,630,172
Total undiscounted minimum future operating lease payments	$	29,403,279

The Company also has commitments under bank loans, assumed liabilities, promissory notes, convertible loans and short-term loans, as disclosed in the financial statements.

Critical accounting policies

Revenue recognition

We recognize revenue in terms of ASC 606 which requires us to exercise more judgment and recognize revenue using a five-step process as described under our accounting policies in note 2 to the consolidated financial statements.

We derive substantially all of our revenue from payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management.

Allowance for credit losses

In conjunction with Revenue recognition, we recognize revenue based on historical collections received from ~~healthcare~~health care providers, recognizing only a percentage of revenues actually billed. Effectively recognizing revenue net of any expected billing differentials. Based on our collection experience, the percentage of revenue recognized is adjusted on a periodic basis, thereby taking into account expected ~~credit~~ credit losses in the revenue recognition process. The revenue we recognize is already net of expected credit losses.

Leases

We account for leases in terms of ASC 842. In terms of ASC 842, the Company assesses whether any asset based leases entered into for periods longer than twelve months meet the definition of financial leases or ~~operation~~operating leases, by evaluating the terms of the lease, including the following; the duration of the lease; the implied interest rate in the lease; the cash flows of the lease; and whether the Company intends to retain ownership of the asset at the end of the lease term.

Leases which imply that we will not acquire the asset at the end of the lease term are classified as operating leases, our right to use the asset is reflected as a non-current right of use asset with a corresponding ~~operational~~operating lease liability raised at the date of lease inception. The right of use asset and the ~~operational~~operating lease liability are amortized over the right of use period using the effective interest rate implied in the operating lease agreement.

Long Lived Assets

The Company evaluates the carrying value of its long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value will be charged to earnings.

Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers.

Critical Accounting Estimates

Preparation of our consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. Our estimates are based on our historical experience, information received from third parties and on various other factors that we believe are reasonable under the circumstances, the results of which form ~~the~~ the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these ~~estimated~~estimates under different ~~assumption~~assumptions or conditions. Significant accounting policies are fundamental to understanding our financial condition and results as they require the use of estimates and assumptions which affect the financial statements and accompanying notes. See Note 2 - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this Annual Report for further information.

The Critical accounting policies that involved significant estimation include the following:

Business combination

In Terms of ASC 805, the Company allocated the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed for the acquisition of Edgewater Recovery Center on January 9, 2025 for gross proceeds of $250,000 and bank loan proceeds and related party proceeds, paid directly to settle the sellers debt in connection with the acquisition of $4,250,000 and $66,741, respectively. The fair value of the intangible assets acquired was estimated at $2,996,000 and the excess of the fair value of purchase consideration over the fair values of the identified assets and liabilities, recorded as goodwill amounted to $3,427,847.

Revenue recognition

Management constantly monitors the level of billings and collections on those billings and makes an estimation of the percentage of billings that will ultimately be recorded as revenue. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates.

Since we already make adjustments for expected collections we are constantly taking into account any expected credit losses.

Leases

On August 4, 2023, we entered into an acquisition and immediate disposal transaction with two unrelated third parties for the building which we currently operate our West Palm Beach treatment facility~~, see note 5 to the consolidated financial statements~~.

Simultaneously with the acquisition and disposal, on August 4, 2023, we entered into a long -term lease for 950 Evernia Street, West Palm Beach, Florida with an initial term of twenty years, and two ten -year extension options. The lease is absolutely net and the lease cost for the initial year is $748,000 paid monthly. The lease increases at a rate of 2.75% per year for a total term lease obligation of $19,655,717 ~~over~~ over the initial twenty-year term. Due to the initial lease term of twenty years, we are not certain that the extension periods will be exercised at this point in time and accordingly, these have been excluded from the present value of the minimum future lease payments.

1012

To ~~determine~~ determine the present value of minimum future lease payments for operating leases at August 4, 2023, we were required to estimate a rate of interest that we would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment (the "incremental borrowing rate" or "IBR"). ~~Wey~~We determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the Fannie Mae, in excess of $3,000,000 rate based on an 80% value to loan ratio, averaging the 15- and 30 -year indicative rates, resulting in a rate of 7.70%. We determined that 7.70% per annum was an appropriate incremental borrowing rate to apply to its real estate operating lease.

The present value of the future minimum lease payments was valued at $9,333,953 on August 4, 2023.

On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company would ~~assume~~ assume the lease for suites 100, 101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement.

The assigned lease has a remaining term of 3 years, expiring on June 30, 2027, with an initial monthly lease cost of $21,843 from July 1, 2024 to December 31, 2024, escalating by 2.9% per annum, each annual period being a calendar year.

To determine the present value of minimum future lease payments for operating leases at June 10, 2024, the Company was required to estimate a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment (the "incremental borrowing rate" or "IBR").

The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the Bank rate 3/1 adjustable-rate mortgage which represents the average rate for several mortgage lenders in the market of 6.36%. The Company determined that 6.36% per annum was an appropriate incremental borrowing rate to apply to its real estate operating lease.

The present value of the future minimum lease payments was valued at $744,256 on June 10, 2024.

On January 9, 2025, the Company consummated the acquisition of the Acquired Assets of ERC. Simultaneously, with the acquisition of the assets of ERC, BH Properties, a company controlled by Mr. Shawn Leon, the Company’s CEO and a related party, acquired certain of the real property associated with the operations of ERC.

The acquired properties are fully leveraged and required personal guarantees which the Company was unable to provide. The entities owning the real property were acquired in a separate transaction by BH Properties, which then, through its acquired subsidiaries entered into lease agreements with ARIA Kentucky on an arms-length basis, at market related rates.

The Company entered into 7 lease agreements, effective January 1, 2025, with its related party, BH Properties, all of which were for an initial period of five years with an option to extend for an additional five years, since the transaction is between related parties the option is reasonably certain to be exercised, the lease agreements all include an annual escalation of 1.5% of the base rent and the lessee is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

The Company also entered into a third-party lease agreement with Trent Developments, LLC for a property located at 141, 141.5 and 143 East Main Street, Morehead Kentucky. The lease is for a period of 5 years commencing on January 1, 2025, with a base annual rental of $138,000, escalating by 1.5% on the second anniversary of the lease term and each anniversary thereafter.

In addition, the Company entered into an assignment of lease agreement with MAT Properties, LLC for a property located at 154 S Owens Road, Morehead Kentucky. The original lease was modified and the term of the lease was extended to 2 years commencing on January 1, 2025, ending on December 31, 2027. The base rental of the lease is $180,000 per annum with no escalations.

The Company, through its subsidiary ARIA Kentucky, entered into 2 lease agreements, effective July 1, 2025, with its related party, BH Properties and its subsidiary, Viking Assets, LLC. The first lease is for property situated at 417 South 4^th Street, Paducah, Kentucky, with an annual base rent of $96,000 and the second lease is for property situated at 425 South 6^th Street, Paducah Kentucky, with an annual base rent of $72,000. Each lease is for an initial period of four years and six months with an option to extend for an additional five years, since the transaction is between related parties the option is reasonably certain to be exercised. Each lease agreement includes an escalation of 1.5% of the base rent, commencing on January 1, 2026, and annually thereafter. The Company is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

To determine the present value of minimum future lease payments for the operating leases entered into, the Company used the borrowing rate of 7.72% at which it had recently secured to consummate the acquisition of the assets of Edgewater Recovery and is indicative of the borrowing costs the Company would expect to incur on asset funding.

The present value of the future minimum lease payments of the properties leased from related parties was $7,622,084 on January 9, 2025 and $1,243,831 on July 1, 2025, totaling $8,865,915 and the present value of future lease payments of properties leased from third parties was $1,149,642 on January 1, 2025.

Effective October 1, 2025, the Company entered into rental abatement agreements with its related party, ERC Investments, LLC, whereby rental on the 425 Clinic Drive and the 1111 US 60 W properties was abated for the three months ended December 31, 2025 by $60,000 and $90,000, respectively. This abatement was evaluated under ASC 842 and determined to be a lease modification. The Company re-evaluated the IBR rate at the date of modification and determined that the rate was 7.8% which was used to calculate the present value of future minimum lease payments of the 425 Clinic Drive and 1111 US 60 W properties at $5,409,062, a net reduction of $165,975, on the date of modification. The modification also resulted in a decrease in the rental smoothing liability of $45,761 on the date of modification, and an increase in the smoothing expense of $147,183 over the three-month period ended December 31, 2025, a net impact of $101,422 increase in rental smoothing liability for the year ended December 31, 2025.

The details of the related party property leases are as follows:

Description	Base Rental (annual)
425 Clinic Drive, Morehead, Kentucky*	$	312,000
445 Clinic Drive, Morehead, Kentucky		120,000
1111 US 60 W, Morehead, Kentucky*		480,000
2180 US 60 W, Morehead, Kentucky		36,000
721 White Street, Morehead Kentucky		30,000
214 Jackson Drive, Morehead, Kentucky		30,000
1135 Rodburn Hollow Drive, Morehead, Kentucky		30,000
417 South 4^th Street, Paducah, Kentucky		96,000
425 South 6^th Street, Paducah, Kentucky		72,000
Total	$	1,206,000

* During 2025, a once off rental abatement of $60,000 and $90,000 was granted to ARIA Kentucky by ERC Investments on the 425 Clinic Drive property and the 1111 US60W property, respectively.

Long-lived assets

We have ~~significant~~ significant long-lived assets, including property and equipment, intangible assets, right-of-use assets and deposits. The Company evaluates the carrying value of its long-lived assets for impairment by comparing ~~managements~~management’s estimates of undiscounted future cash flows of the assets to the net book value of the assets when events or circumstances indicate that the carrying amount of a long-lived asset may not be recoverable. This requires significant estimation of future revenue streams, based on management’s understanding of the business which may not be accurate and may require re-estimation at a future date. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value will be charged to earnings.

Fair value is based upon discounted cash flows of the assets at a rate deemed by management to be reasonable for the type of asset and prevailing market conditions, appraisals, and, if appropriate, current estimated net sales proceeds from pending offers.

Item 8. Financial Statements and Supplementary Data.

ETHEMA HEALTH CORPORATION

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in US$ unless otherwise indicated)

	PAGE
Report of Independent Registered Public Accounting Firm (PCAOB ID 587)	F-1
Consolidated Balance Sheets as of December 31, 2024 and 2023	F-3
Consolidated Balance Sheets as of December 31, 2025 and 2024	F-2
Consolidated Statements of Operations for the years ended December 31, 2024 and 2023	F-4
Consolidated Statements of Operations for the years ended December 31, 2025 and 2024	F-3
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2024 and 2023	F-5
Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, 2025 and 2024	F-4
Consolidated Statements of Cash Flows for the years ended December 31, 2024 and 2023	F-6
Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024	F-5
Notes to the Consolidated Financial Statements	F-76

1115

~~New~~Florida ~~York~~ Office: ~~805~~2424 ~~Third~~N. ~~Avenue~~Federal ~~New~~Highway ~~York~~Suite 257 Boca Raton, NYFL ~~10022~~33431 ~~212~~561.~~838-5100~~405.9440

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Ethema Health Corporation and subsidiaries

West Palm Beach, FL 33401

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Ethema Health Corporation and subsidiaries (collectively, the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related consolidated statements of operations, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, ~~2024~~2025, and the related notes (collectively, ~~referred to as~~ the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, ~~2024~~2025, in conformity with accounting principles generally accepted in the United States of America.

~~The~~Substantial Doubt About the Company'’s Ability to Continue as a Going Concern

The accompanying ~~consolidated~~ consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations, has generated negative cash flows from operating activities, and has a working capital deficiency and accumulated deficit. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management's ~~evaluation of the events and conditions and management’s~~ plans into ~~regarding~~address these matters are ~~also~~ described in Note 3. The consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. Our opinion is not modified with respect to that matter.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from ~~the~~ the current period audit of the consolidated financial statements that were communicated or are required to be communicated to the audit ~~committee~~ committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

WeGoodwill ~~determined~~and Identifiable Intangible ~~that~~Assets ~~there~~- ~~are~~Acquisition noof ~~critical~~Edgewater ~~audit~~Recovery ~~matters.~~Centers, LLC

Critical Audit Matter Description

As described in Notes 4, 8, and 9 to the consolidated financial statements, the Company completed the acquisition of the addiction treatment operations of Edgewater Recovery Centers, LLC ("ERC") on January 9, 2025, accounted for as a business combination under ASC 805. As part of the final purchase price allocation, the Company recorded goodwill of $3,427,847, customer relationships of $2,944,000, and non-compete agreements of $52,000. An assembled workforce of $1,358,000 was valued and included within goodwill. The final purchase price allocation as of December 31, 2025 reflected a net decrease to goodwill of approximately $147,000 compared to the provisional allocation; the fair values of the identified intangible assets were not affected.

We identified the accounting for the ERC acquisition as a critical audit matter because auditing management's determination of the fair value of the acquired identifiable intangible assets involved a high degree of auditor judgment and subjectivity. The valuation required management to make significant assumptions regarding future revenues, projected cash flows, customer attrition rates, and discount rates. Auditing these assumptions required specialized knowledge and significant auditor judgment in evaluating the reasonableness of management's estimates.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the accounting for the ERC acquisition included, among others:

Evaluated management's conclusion that the transaction constitutes a business combination under ASC 805, including assessment of acquired inputs, processes, and outputs.

Tested management's identification of the acquired assets and assumed liabilities included in the purchase price allocation.

Evaluated the reasonableness of the valuation methodologies and significant assumptions used by management, including projected revenues, projected cash flows, customer attrition rates, and discount rates, utilizing professionals with specialized skill and knowledge to assist in evaluating the valuation methodologies and significant assumptions used by management.

Tested the completeness and accuracy of the underlying data used in the valuation analyses, the mathematical accuracy of the valuation models and purchase price allocation, and agreed the allocated amounts to the consolidated financial statements.

Reviewed management's measurement period adjustments and confirmed that revisions did not affect the fair value conclusions for customer relationships or non-compete agreements.

/s/ RBSM LLP

We have served as the Company’s auditor since 2023.

~~New~~Boca ~~York~~Raton, NYFL

~~May 23~~June 30, ~~2025~~2026

~~PCAOP~~ PCAOB ID Number 587

New York, NY Washington DC Mumbai & Pune, India Boca Raton, FL

Houston, TX San Francisco, CA Las Vegas, NV Beijing, China Athens, Greece

Member: ANTEA International with affiliated offices worldwide

F-1

ETHEMA HEALTH CORPORATION

CONSOLIDATED BALANCE SHEETS

	December 31, 2024			December 31, 2023
	December 31, 2025			December 31, 2024
ASSETS
Current assets
Cash	$	~~244~~59,~~771~~509		$	68244,~~573~~771
Accounts receivable, net		~~260~~1,~~841~~446,366			~~313~~260,~~338~~841
Prepaid expenses		2351,~~146~~572			1823,~~159~~146
Other current assets		—			3,030
Total current assets		1,557,447			528,758
Total current assets		528,758			403,100
Non-current assets
Property and equipment, net		~~699~~1,~~688~~377,358			~~508~~699,~~401~~688
Intangible assets, net		~~536~~2,~~971~~972,516			~~894~~536,~~952~~971
Right of use assets		9,920,592			9,323,723
Goodwill		3,427,847			—
Deposits paid		472,393			389,000
Right of use assets		10,540,982			9,920,592
Total non-current assets		11,629,644			11,116,076
Right of use assets – Related Parties		8,378,005			—
Total assets	$	12,158,402		$	11,519,176
Deposits paid		512,824			472,393
Total non-current assets		27,209,532			11,629,644
Total assets	$	28,766,979		$	12,158,402
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities	$	~~764~~1,~~255~~411,442		$	~~352~~764,~~101~~255
Convertible notes, net of discounts		3,973,245			4,419,927
Bank loans		888,315			—
Short-term notes, net		2,575,123			680,672
Assumed liability		1,624,205			—
Promissory note		405,000			—
Convertible notes, net of discounts		4,017,962			3,973,245
Receivables funding, net		516,247			211,961
Short-term notes, net		3,253,727			2,575,123
Related party advance, net		264,966			—
Promissory note		265,000			405,000
Government assistance loans		15,088			14,962
Funding arrangements, net		1,165,831			516,247
Operating lease liability		299,102			38,563
Related party advance, net		273,461			264,966
Finance lease liability		9,829			8,426
Government assistance loans		21,448			15,088
Related party payables		633,318			2,572,292
Operating lease liability		537,884			299,102
Stock subscription liability		198,600			—
Operating lease liability – Related parties		540,304			—
Total current liabilities		9,654,773			8,298,904
Finance lease liability		6,195			9,829
Related party payables		1,155,217			633,318
Stock subscription liability		198,600			198,600
Total current liabilities		15,359,591			9,654,773
Non-current liabilities
Government assistance loans		6,149			20,520
Bank loans		3,663,982			—
Operating lease liability		9,949,454			9,383,557
Note payable – Related Parties		87,507			—
Finance lease liability		6,593			16,475
Government assistance loans		—			6,149
Total non-current liabilities		9,962,196			9,420,552
Operating lease liability		10,541,565			9,949,454
Total liabilities		19,616,969			17,719,456
Operating lease liability – Related parties		8,023,085			—
Finance lease liability		1,168			6,593
Deferred tax liability		726,317			—
Total non-current liabilities		23,043,624			9,962,196
Total liabilities		38,403,215			19,616,969
Stockholders’ deficit
Preferred stock - Series A; $0.01 par value, 10,000,000 authorized, 4,765,000 and 4,000,000 shares issued and outstanding as of December 31, 2024 and 2023, respectively.		47,650			40,000
Preferred stock - Series A; $0.01 par value, 10,000,000 authorized, 4,765,000 shares issued and outstanding as of December 31, 2025 and 2024, respectively.		47,650			47,650
Common stock - $0.01 par value, 10,000,000,000 shares authorized; 7,729,053,805 and 3,729,053,805 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively.		77,290,539			37,290,539
Common stock - $0.01 par value, 10,000,000,000 shares authorized; 7,726,283,805 and 7,729,053,805 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively.		77,262,839			77,290,539
Additional paid-in capital		2425,~~986~~013,~~083~~783			2624,~~187~~986,~~925~~083
Discount for shares issued below par value		(65,363,367	)		(2765,363,367	)
Accumulated deficit		(4446,~~419~~597,~~472~~141	)		(4244,~~355~~419,~~377~~472	)
Total stockholders’ deficit		(79,~~458~~636,~~567~~236	)		(67,~~200~~458,~~280~~567	)
Total liabilities and stockholders’ deficit	$	1228,~~158~~766,~~402~~979		$	1112,~~519~~158,~~176~~402

The accompanying notes are an integral part of the consolidated financial statements

F-2

ETHEMA HEALTH CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year ended December 31, 2024			Year ended December 31, 2023
	Year ended December 31, 2025			Year ended December 31, 2024
Revenues	$	618,~~017~~764,~~204~~817		$	56,~~344~~017,~~976~~204
Operating expenses
General and administrative		13,~~550~~934,~~799~~900			1,~~041~~550,~~501~~799
Rent expense		13,~~304~~013,~~127~~306			~~614~~1,~~793~~304,127
Management fees		—120,000			~~368,003~~—
Professional fees		~~955~~1,~~801~~597,072			~~707~~955,~~413~~801
Salaries and wages		39,~~072~~547,~~654~~395			23,~~656~~072,~~267~~654
Depreciation and amortization		~~466~~812,~~952~~279			~~498~~466,~~919~~952
Total operating expenses		719,~~350~~024,~~333~~952			57,~~886~~350,~~896~~333
Operating loss		(1260,~~333,129~~135	)		(~~541~~1,~~920~~333,129	)
Other (expense) income
Other income		~~110~~66,~~000~~107			—110,000
Other expense		~~(1,160~~—	)		—(1,160	)
Gain on sale of property		—			2,484,172
Interest income		3,884			2,292
Loss on debt extinguishment		—			(277,175	)
Interest expense		(1,388,074	)		(565,343	)
Extension fee on property purchase		—			(140,000	)
Amortization of debt discount		(616,072	)		(416,120	)
Penalty on notes and convertible notes		—			(34,688	)
Foreign exchange movements		(36,023	)		37,523
Interest income		2,292			676
Net loss before income taxes		(2,230,313	)		(2,165,937	)
Interest expense		(565,343	)		(500,226	)
Income taxes		52,644			—
Debt discount		(416,120	)		(281,354	)
Net loss		(2,177,669	)		(2,165,937	)
Foreign exchange movements		37,523			(95,032	)
Net loss attributable to non-controlling stockholders interest		—			101,842
Net (loss) income before income taxes		(2,165,937	)		614,453
Net loss available to common stockholders of Ethema Health Corporation	$	(2,177,669	)	$	(2,064,095	)
Income taxes		—			391,962
Basic and diluted loss per common share	$	(0.00	)	$	(0.00	)
Net (loss) income		(2,165,937	)		1,006,415
Weighted average common shares outstanding – Basic and diluted		7,726,655,688			5,608,835,226
Net loss attributable to non-controlling stockholders interest		101,842			170,184
Net (loss) income attributable to Ethema Health Corporation Stockholders’		(2,064,095	)		1,176,599
Preferred stock dividend		—			(47,225	)
Net (loss) income available to common stockholders of Ethema Health Corporation		(2,064,095	)		1,129,374
Basic (loss) income per common share	$	(0.00	)	$	0.00
Diluted (loss) income per common share	$	(0.00	)	$	0.00
Weighted average common shares outstanding – Basic		5,608,835,226			3,729,053,805
Weighted average common shares outstanding – Diluted		5,608,835,226			3,903,671,684

The accompanying notes are an integral part of the consolidated financial statements

F-3

ETHEMA HEALTH CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

	Series A Preferred				Common						Additional Paid			Discount			~~Comprehensive~~Accumulated			~~Accumulated~~Non- controlling stockholders			~~Non- controlling stockholders~~
	Shares		Amount		Shares			Amount			in Capital			to par value			~~Income~~Deficit			~~Deficit~~Interest			~~Interest~~Total			~~Total~~
Balance as of December 31, 2022		4,000,000	$	40,000		3,729,053,805		$	37,290,539		$	23,419,917		$	(27,363,367	)	$	(5,065	)	$	(43,484,751	)	$	870,184		$	(9,232,543	)
Balance as of December 31, 2023		4,000,000	$	40,000		3,729,053,805		$	37,290,539		$	26,187,925		$	(27,363,367	)	$	(42,355,377	)	$	—		$	(6,200,280	)
Disposal of subsidiary to related party		—		—		—			—			2,034,885			—			—			—			(700,000	)		1,334,885
Acquisition of minority stockholders interest		—		—		—			—			(1,201,842	)		—			—			101,842			(1,100,000	)
Deemed extinguishment of debt by related party		—		—		—			—			461,184			—			—			—			—			461,184
Conversion of related party payable to Series A preferred shares		600,000		6,000		—			—			—			—			—			—			6,000
Fair value of warrants issued on debt extinguishment		—		—		—			—			271,939			—			—			—			—			271,939
Subscription for Series A preferred A shares		165,000		1,650		—			—			—			—			—			—			1,650
Foreign currency translation		—		—		—			—			—			—			5,065			—			—			5,065
Conversion of related party payables to common shares		—		—		4,000,000,000			40,000,000			—			(38,000,000	)		—			—			2,000,000
Net income		—		—		—			—			—			—			—			1,176,599			(170,184	)		1,006,415
Net loss		—		—		—			—			—			—			(2,064,095	)		(101,842	)		(2,165,937	)
Dividends accrued		—		—		—			—			—			—			—			(47,225	)		—			(47,225	)
Balance as of December 31, 2024		4,765,000	$	47,650		7,729,053,805		$	77,290,539		$	24,986,083		$	(65,363,367	)	$	(44,419,472	)	$	—		$	(7,458,567	)
Balance as of December 31, 2023		4,000,000	$	40,000		3,729,053,805		$	37,290,539		$	26,187,925		$	(27,363,367	)	$	—		$	(42,355,377	)	$	—		$	(6,200,280	)
Cancellation of common stock		—		—		(2,770,000	)		(27,700	)		27,700			—			—			—			—
Acquisition of minority stockholders interest		—		—		—			—			(1,201,842	)		—			—			—			101,842			(1,100,000	)
Net loss		—		—		—			—			—			—			(2,177,669	)		—			(2,177,669	)
Conversion of related party payable to Series A preferred shares		600,000		6,000		—			—			—			—			—			—			—			6,000
Balance as of December 31, 2025		4,765,000	$	47,650		7,726,283,805		$	77,262,839		$	25,013,783		$	(65,363,367	)	$	(46,597,141	)	$	—		$	(9,636,236	)
Subscription for Series A preferred A shares		165,000		1,650		—			—			—			—			—			—			—			1,650
Conversion of related party payables to common shares		—		—		4,000,000,000			40,000,000			—			(38,000,000	)		—			—			—			2,000,000
Net loss		—		—		—			—			—			—			—			(2,064,095	)		(101,842	)		(2,165,937	)
Balance as of December 31, 2024		4,765,000	$	47,650		7,729,053,805		$	77,290,539		$	24,986,083		$	(65,363,367	)	$	—		$	(44,419,472	)	$	—		$	(7,458,567	)

The accompanying notes are an integral part of the consolidated financial ~~statement~~ statements

F-4

ETHEMA HEALTH CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31, 2024			Year ended December 31, 2023
	Year ended December 31, 2025			Year ended December 31, 2024
Operating activities
Net (loss) income	$	(2,165,937	)	$	1,006,415
Net loss	$	(2,177,669	)	$	(2,165,937	)
Adjustment to reconcile net (loss) income to net cash used in operating activities:
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		~~466~~812,~~952~~279			~~498~~466,~~919~~952
Amortization of debt discount		~~416~~616,~~120~~072			~~281~~416,~~354~~120
Gain on disposal of property		—			(2,484,172	)
Provision for credit losses		460,760			—
Loss on debt extinguishment		—			277,175
Amortization of right of use asset		1,017,162			147,387
Penalty on notes and convertible notes		—			34,688
Deferred taxation movement		(52,644	)		—
Amortization of right of use asset		147,387			177,220
Deferred taxation movement		—			(217,451	)
Changes in operating assets and liabilities
Accounts receivable		~~183~~(923,~~137~~104	)		78183,~~037~~137
Prepaid expenses		(428,~~987~~407	)		26(4,~~562~~987	)
Other current assets		361,~~030~~090			53,~~513~~030
Accounts payable and accrued liabilities		~~416~~1,~~414~~085,335			~~201~~416,~~978~~414
Operating lease liabilities		82,180			(179,184	)
Related party accruals		(282,473	)		—
Taxes payable		—			(237,211	)
Operating lease liabilities		(621,277	)		82,180
Net cash used in operating activities		(~~455~~32,~~704~~876	)		(~~530~~455,~~157~~704	)
Investing activities
Acquisition of real property, net of $400,000 deposit paid		—			(5,209,276	)
Acquisition of ARIA Kentucky, net of cash of $299,492		49,492			—
Proceeds on disposal of real property		—			8,093,448
Purchase of property and equipment		(277,740	)		(60,259	)
Purchase of property and equipment		(60,259	)		(40,602	)
Acquisition of property		—			(240,000	)
Acquisition of property		(240,000	)		—
Acquisition of minority stockholders interest		—			(625,000	)
Acquisition of minority stockholders interest		(625,000	)		—
Investment in deposits		(25,431	)		(83,393	)
Investment in deposits		(83,393	)		(389,000	)
Net cash used in investing activities		(253,679	)		(1,008,652	)
Net cash (used in) provided by investing activities		(1,008,652	)		2,454,570
Financing activities
Repayment of mortgage		—			(58,320	)
Repayment of assumed liability		(159,085	)		—
Proceeds from convertible notes		—			150,000
Proceeds from bank loans		300,000			—
Repayment of convertible notes		—			(1,153,666	)
Repayment of bank loans		(121,376	)		—
Proceeds from short term notes		1310,~~912,~~000			~~447~~1,912,000
Repayment of short term notes		(752,680	)		(568,325	)
Repayment of short-term notes		(173,376	)		(752,680	)
Repayment of promissory notes		(70140,000	)		—(70,000	)
Proceeds from receivables funding		690,000			580,646
Proceeds from funding arrangements		2,638,750			690,000
Repayment of receivables funding		(586,752	)		(994,483	)
Repayment of funding arrangements		(2,564,046	)		(586,752	)
Proceeds from advances – related party		~~250,000~~—			—250,000
Repayment of advances – related party		~~(11,538~~—	)		—(11,538	)
Repayment of government assistance loans		~~(14,250~~—	)		(14,~~579~~250	)
Proceeds from (repayment of) third party loans		—			(283,746	)
Repayment of finance leases		(9,008	)		(8,478	)
Repayment of finance leases		(8,478	)		(7,943	)
Proceeds from stock subscription liability		—			198,600
Proceeds from stock subscription liability		198,600			—
Proceeds from Series A preferred subscriptions		—			1,650
Proceeds from Series A preferred subscriptions		1,650			—
(Repayment) proceeds of related party notes		—			67,026
(Repayment) proceeds of related party notes		67,026			(174,012	)
Net cash provided by financing activities		81,859			1,675,578
Net cash provided by (used in ) financing activities		1,675,578			(2,077,428	)
Effect of exchange rate on cash		19,434			(35,024	)
Effect of exchange rate on cash		(35,024	)		80,831
Net change in cash		(185,262	)		176,198
Net change in cash		176,198			(72,184	)
Beginning cash balance		244,771			68,573
Beginning cash balance		68,573			140,757
Ending cash balance	$	59,509		$	244,771
Ending cash balance	$	244,771		$	68,573
Supplemental cash flow information
Cash paid for interest	$	~~355~~695,~~443~~920		$	~~425~~355,~~117~~443
Cash paid for income taxes	$	—		$	—
Non-cash investing and financing activities
Fair value of warrant issued on debt extinguishment	$	—		$	271,939
Present value of operating lease liability and operating lease right of use assets recognized in connection with lease commencement	$	1,149,642		$	—
Disposal of subsidiary to related party	$	—		$	1,334,885
Present value of operating lease liability and operating lease right of use assets recognized in connection with lease commencement – Related parties	$	8,865,915		$	—
Deemed extinguishment of debt by related party	$	—		$	461,184
Present value of operating lease liability and operating lease right of use assets recognized on lease modification – Related parties	$	(165,975	)	$	—
Promissory note issued to acquire minority stockholders interest	$	475,000		$	—
Common shares cancelled	$	27,700		$	—
Exchange of Series N convertible notes for Series R promissory notes	$	450,000		$	—
Bank loan proceeds applied directly to sellers’ debt in connection with acquisition	$	4,250,000		$	—
Conversion of related party payables to common shares	$	2,000,000		$	—
Related party loan proceeds applied directly to sellers’ debt in connection with acquisition	$	66,741		$	—
Conversion of related party payable to Series A preferred stock	$	6,000		$	—
Promissory note issued to acquire minority stockholders interest	$	—		$	475,000
Present value of operating lease liability and operating lease right-of-use asset recognized in connection with lease commencement	$	744,256		$	—
Exchange of Series N convertible notes for Series R promissory notes	$	—		$	450,000
Conversion of related party payables to common shares	$	—		$	2,000,000
Conversion of related party payable to Series A preferred stock	$	—		$	6,000
Present value of operating lease liability and operating lease right-of-use asset recognized in connection with lease commencement	$	—		$	744,256

The accompanying notes are an integral part of the consolidated financial statements

F-5

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Nature of business

Since 2010, the Company has operated addiction treatment centers. Initially the Company operated an addiction treatment center in Ontario Canada under its Greenestone Muskoka clinic, which was sold on February 14, 2017. Simultaneously with this sale the Company purchased buildings and operated an addiction treatment center in Delray Beach Florida under its Addiction recovery Institute of America subsidiary with a license obtained in December 2016, initially though owned properties in Delray Beach and subsequently though leased properties in West Palm Beach, Florida. Since June 30, 2020, the Company has been actively involved in the management of a treatment center operated by Evernia in West Palm Beach Florida. On July 1, 2021, the Company closed on the acquisition of 75% of ATHI, which owns 100% of Evernia, once the probationary approval of a license was obtained from the Department of Children and Family Services of Florida.

The Company sold its real estate on which its Greenstone Muskoka clinic operated during ~~the prior year~~2023.

Acquisition of minority stockholders interest in ATHI

On May 15, 2024, the Company entered into a Stock Purchase Agreement whereby it acquired the remaining 25% of ATHI representing 5,000,000 shares from the minority stockholder for gross proceeds of $1,100,000. The Company paid an initial deposit of $25,000 and on closing an additional $600,000. The Company issued a non-interest-bearing promissory note for the remaining balance of $475,000, which promissory note is repayable in installments of $10,000 a month on each monthly anniversary date of the agreement for months one to eight (eight installments) and months ten through seventeen (eight installments), and payments of $157,500 on month nine and month eighteen, for a total of $475,000.

Acquisition of assets and assignment of lease and sub-lease for Boca ~~cove~~Cove Detox Center

On March 22, 2024, the Company executed a LOI to acquire certain assets, including furniture, equipment inventory and supplies of Boca Cove Detox, LLC, along with the assignment of lease and sub-lease for premises located at 899 Meadow Avenue, Boca Raton, Florida. On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company would assume the lease for suites 100, 101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement.

The purchase price was $240,000 which was settled by a deposit of $20,000 and a cash payment of $220,000 and the payment to the Seller of $83,393 for the assumption of the security deposit held by the landlord of the Leased Premises located at 899 Meadows Road.

Acquisition of Edgewater Recovery Centers, LLC

On October 22, 2024, ARIA Kentucky LLC (ARIA Kentucky”), a wholly owned subsidiary of the Company, Edgewater Recovery Centers, LLC (“ERC”) and John Elam (the ”Seller”), entered into an Asset Purchase Agreement (”APA”) pursuant to which ARIA Kentucky agreed to acquire and ERC agreed to sell to ARIA Kentucky on the closing date (the “Acquisition”) , the addiction treatment operations owned by ERC and located in Morehead and Paducah, Kentucky through a purchase of the assets of ERC (the “Acquired Assets”), including; all assets of ERC used in the business of ERC (except for certain specified assets), including but not limited to all current assets existing at the time of closing, all cash balances and rights to receive cash, all equipment, machinery, all warranties related to the business and acquired assets, all intangible personal property, intellectual property, all business inventories, all property leases associated with the business, all assumed contracts, 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 ERC (the “Real Property”) is fully leveraged and requires credit and personal guarantees which the Company is unable to provide. The entities owning the real property were acquired in a separate transaction by BH Properties Fund LLC (“BH Properties”), a company controlled by Mr. Shawn Leon, the Company’s CEO and therefore a related party. BH Properties through its acquired subsidiaries then entered into lease agreements with ARIA Kentucky on an arms-length basis, at market related rates.

On January 9, 2025, ARIA Kentucky consummated the Acquisition of the Acquired Assets of ERC. Pursuant to the terms of the APA, at closing ARIA Kentucky paid the Seller $250,000 and assumed certain liabilities related to the Acquired Assets, including trade payables and liabilities under assumed contracts and certain specifically identified liabilities, including a settlement agreement with the United States government and the State of Kentucky and certain obligations as a borrower or guarantor related to banking obligations.

On January 9, 2025, in a separate transaction, BH Properties acquired ERC Investments, LLC (”ERCI”), New Journey LLC (“NJ”) and JDE Properties, LLC (“JDE”) which separately own certain Real Property on which ARIA Kentucky operates and which was subsequently leased to ARIA Kentucky.

F-6

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies

Financial Reporting

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”).

Management further acknowledges that it is solely responsible for adopting sound accounting practices, establishing and maintaining a system of internal accounting control and preventing and detecting fraud. The Company’s system of internal accounting control is designed to assure, among other items, that i) recorded transactions are valid; ii) valid transactions are recorded; and iii) transactions are recorded in the proper period in a timely manner to produce financial statements which present fairly the financial condition, results of operations and cash flows of the Company for the respective periods being presented.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions, which are evaluated on an ongoing basis, that affect the amounts reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates and judgments. In particular, significant estimates and judgments include those related to, the estimated useful lives of long lived assets and goodwill, the fair value of long-lived assets and goodwill, including impairment analysis, estimates in revenue recognition, allowance for credit losses, estimates in the fair value of warrants and stock options granted for services or compensation, estimates in convertible debt, borrowing rate consideration for right-of-use (ROU) lease assets including related lease liability, and the valuation allowance for deferred tax assets due to continuing operating losses.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from our estimates.

~~F-6~~In Terms of ASC 805, Business Combinations, the Company allocated the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed for the acquisition of Edgewater Recovery Center on January 9, 2025 for gross proceeds of $250,000 and bank loan proceeds and related party proceeds, paid directly to settle the sellers debt in connection with the acquisition of $4,250,000 and $66,741, respectively. The fair value of the intangible assets acquired was estimated at $2,996,000 and the excess of the fair value of purchase consideration over the fair values of the identified assets and liabilities, recorded as goodwill amounted to $3,427,847.

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued)

Principals of consolidation and foreign currency translation

The accompanying consolidated financial statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.

Certain of the Company’s previous subsidiaries functional currency was the Canadian dollar, while the Company’s reporting currency is the U.S. dollar. All transactions initiated in Canadian dollars are translated into US dollars in accordance with ASC 830, “Foreign Currency Translation” as follows:

● Monetary assets and liabilities at the rate of exchange in effect at the balance sheet date. ● Certain non-monetary assets and liabilities and equity at historical rates. ● Revenue and expense items and cash flows at the average rate of exchange prevailing during the year.

Adjustments arising from such translations were deferred until realization and were included as a separate component of stockholders’ deficit as a component of accumulated other comprehensive income or loss. Therefore, translation adjustments were not included in determining net income (loss) but reported as other comprehensive income (loss).

For foreign currency transactions, the Company translates these amounts to the Company’s functional currency at the exchange rate effective on the invoice date. If the exchange rate changes between the time of purchase and the time actual payment is made, a foreign exchange transaction gain or loss results which is included in determining net income for the year.

On June 30, 2023, the Company disposed on Cranberry Cove Holdings whose functional currency was Canadian Dollars, all remaining subsidiaries have the U.S. dollar as a functional currency.

The relevant translation rates are as follows: For the year ended December 31, 2023, a closing rate of CDN$1 equals US$0.7561 and an average exchange rate of CDN$1 equals US$0.7409.

Business Combinations

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed for business combinations with third parties based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired users, acquired technology, and trade names from a market participant perspective, useful lives and discount rates. Management's estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Cash and cash equivalents

For ~~purposes~~ purposes of the statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less and money market accounts to be cash equivalents. The Company maintains cash and cash equivalents with several financial institution in the USA and Canada. There were no cash equivalents at December 31, ~~2024~~2025 and ~~2023~~2024.

The Company primarily places cash balances in the USA with high-credit quality financial institutions located in the United States which are insured by the Federal Deposit Insurance Corporation up to a limit of $250,000 per institution.

F-7

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies (continued)

Accounts receivable

Accounts receivable primarily consists of amounts due from third-party payors (non-governmental) and private pay patients and is recorded net of allowances for doubtful accounts and contractual discounts. The Company’s ability to collect outstanding receivables is critical to its results of operations and cash flows. Accordingly, accounts receivable reported in the Company’s consolidated financial statements is recorded at the net amount expected to be received. The Company’s primary collection risks are (i) the risk of overestimating net revenues at the time of billing that may result in the Company receiving less than the recorded receivable, (ii) the risk of non-payment as a result of commercial insurance companies denying claims, (iii) the risk that patients will fail to remit insurance payments to the Company when the commercial insurance company pays out-of-network claims directly to the patient, (iv) resource and capacity constraints that may prevent the Company from handling the volume of billing and collection issues in a timely manner, (v) the risk that patients do not pay the Company for their self-pay balances (including co-pays, deductibles and any portion of the claim not covered by insurance) and (vi) the risk of non-payment from uninsured patients.

Allowance for Doubtful Accounts

The Company derives the majority of its revenues from commercial payors at in-network rates. The Company recognizes revenue based on historical collections received from ~~healthcare~~health care providers, recognizing only a percentage of revenues actually billed. Effectively recognizing revenue net of any expected billing differentials. Based on the Company’s collection experience, the percentage of revenue recognized is adjusted on a periodic basis, thereby taking into account expected credit losses in the revenue recognition process. The revenue we recognize is already net of expected credit losses, therefore management does not maintain a separate allowance for doubtful accounts, contractual and other discounts.

Management also takes into consideration the age of accounts, creditworthiness and current economic trends when evaluating the percentage of revenue to be recognized.

Leases

The Company accounts for leases in terms of ASC 842. In terms of ASC 842, the Company assesses whether any asset based leases entered into for periods longer than twelve months meet the definition of financial leases or ~~operation~~operating leases, by evaluating the terms of the lease, ~~including~~ including the following; the duration of the lease; the implied interest rate in the lease; the cash flows of the lease; and whether the ~~Company~~ Company intends to retain ownership of the asset at the end of the lease term.

Leases which imply that the Company will retain ownership at the end of the lease term are classified as financial leases, are included in property and equipment with a corresponding financial liability raised at the date of lease inception. Interest incurred on financial leases are expensed using the effective interest rate method.

Leases which imply that the Company will not acquire the asset at the end of the lease term are classified as operating leases, the Company’s right to use the asset is reflected as a non-current right of use asset with a corresponding ~~operational~~operating lease liability raised at the date of lease inception. The right of use asset and the ~~operational~~operating lease liability are amortized over the right of use period using the ~~effective~~ effective interest rate implied in the operating lease agreement.

Property and equipment

Property and equipment is recorded at cost. Depreciation is calculated on the straight -line basis over the estimated life of the asset.

Long Lived Assets

F-8

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued)

Intangible assets

Intangible assets are stated at acquisition cost less accumulated amortization, if applicable, less any adjustments for impairment losses.

Amortization is charged on a straight-line basis over the estimated remaining useful lives of the individual intangibles. Where intangibles are deemed to be impaired the Company recognizes an impairment loss measured as the difference between the estimated fair value of the intangible and its book value.

Licenses to provide substance abuse rehabilitation services are amortized over the expected life of the contract, including any anticipated renewals. The Company expects its licenses to remain in operation for a period of five years.

~~k) Derivatives~~F-8

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies (continued)

Goodwill

The Company allocates the fair value of purchase consideration to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill.

The Company annually assesses whether the carrying value of its reporting unit exceeds its fair value and, if necessary, records an impairment loss equal to any such excess. Each interim reporting period, the Company assesses whether events or circumstances have occurred which indicate that the carrying amount of the reporting unit exceeds its fair value. If the carrying amount of the reporting unit exceeds its fair value, an asset impairment charge will be recognized in an amount equal to that excess.

Goodwill was recently acquired and is assessed annually on December 31, 2025 to see if there are any qualitative or quantitative indications that impairment of goodwill may be appropriate. At each quarter end a qualitative analysis is performed, to determine if any impairment should be considered. As of September 30, 2025, there were no indications that an impairment of goodwill may be required.

Derivatives

The Company evaluates embedded conversion features within convertible debt under ASC 815 “Derivatives and Hedging” to determine whether the embedded conversion feature should be bifurcated from the host instrument and accounted for as a derivative at fair value with changes in fair value recorded in earnings. The Company previously used a Black Scholes Option Pricing model to estimate the fair value of convertible debt conversion features at the end of each applicable reporting period. Changes in the fair value of these derivatives during each reporting period were included in the statements of operations. Inputs into the Black Scholes Option Pricing model require estimates, including such items as estimated volatility of the Company’s stock, risk free interest rate and the estimated life of the financial instruments being fair valued.

If the conversion feature does not require derivative treatment under ASC 815, the instrument is evaluated under ASC 470-20 “Debt with Conversion and Other Options” for consideration of any beneficial conversion feature.

lm) Financial instruments

The Company initially measures its financial assets and liabilities at fair value, except for certain non-arm’s length transactions. The Company subsequently measures all its financial assets and financial liabilities at amortized cost.

Financial assets measured at amortized cost include cash and accounts receivable.

Financial liabilities measured at amortized cost include bank indebtedness, accounts payable and accrued liabilities, taxes payable, convertible notes payable, promissory notes, receivables funding, loans payable and related party notes.

Financial assets measured at cost are tested for impairment when there are indicators of impairment. The amount of the write-down is recognized in net income. The previously recognized impairment loss may be reversed to the extent of the improvement, directly or by adjusting the allowance account, provided it is no greater than the amount that would have been reported at the date of the reversal had the impairment not been recognized previously. The amount of the reversal is recognized in net income. The Company recognizes its transaction costs in net income in the period incurred. However, financial instruments that will not be subsequently measured at fair value are adjusted by the transaction costs that are directly attributable to their origination, issuance or assumption.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 establishes a three -tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

	●	Level 1. Observable inputs such as quoted prices in active markets;
	●	Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
	●	Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company measures its convertible debt and any derivative liabilities associated therewith at fair value. These liabilities are revalued periodically and the resultant gain or loss is realized through the consolidated Statement of Operations and Comprehensive Loss.

Related parties

Parties are considered to be related to the Company if the parties directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all related party transactions. All transactions are recorded at fair value of the goods or services exchanged.

F-9

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies (continued)

mo) ~~Related~~ ~~parties~~Revenue recognition

n) Revenue recognition

ASC 606 requires companies to exercise more judgment and recognize revenue using a five-step process.

The Company’s provision for doubtful accounts are recorded as a direct reduction to revenue instead of being presented as a separate line item on the consolidated statements of operations and comprehensive loss.

As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities.

The Company receives payments from the following sources for services rendered in our U.S. Facility: (i) commercial insurers; and (ii) individual patients and clients. As the period between the time of service and time of payment is typically one year or less, the Company elected the practical expedient under ASC 606-10-32-18 and does not adjust for the effects of a significant financing component.

The Company derives a significant portion of its revenue from payors that receive discounts from established billing rates. The various managed care contracts under which these discounts must be calculated are complex, subject to interpretation and adjustment, and may include multiple reimbursement mechanisms for different types of services provided in the Company’s inpatient facilities and cost settlement provisions. Management estimates the transaction price on a payor-specific basis given its interpretation of the applicable regulations or contract terms. The services authorized and provided and related reimbursement are often subject to interpretation that could result in payments that differ from the Company’s estimates. Additionally, updated regulations and contract renegotiations occur frequently, necessitating regular review and assessment of the estimation process by management.

Settlements with third-party payors are estimated and recorded in the period in which the related services are rendered and are adjusted in future periods as final settlements are determined. In the opinion of management, adequate provision has been made for any adjustments and final settlements. However, there can be no assurance that any such adjustments and final settlements will not have a material effect on the Company’s financial condition or results of operations. The Company’s receivables, ~~were~~net of credit losses of $~~260~~460,~~841~~760 and $0, were $~~313~~1,~~338~~446,366 and $260,841 at ~~December~~ December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively. Management believes that these receivables are properly stated and are not likely to be settled for a significantly different amount.

The Company’s revenues are recognized when control of the promised goods or services are transferred to a customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those services. The Company derives its revenues from the sale of its services. The Company applies the following five steps in order to determine the appropriate amount of revenue to be recognized as it fulfills its obligations under each of its revenue transactions:

i. identify the contract with a customer; ii. identify the performance obligations in the contract; iii. determine the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied.

~~iii.~~p) ~~determine~~Income ~~the transaction price; iv. allocate the transaction price to performance obligations in the contract; and v. recognize revenue as the performance obligation is satisfied.~~taxes

The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax basis of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of, the deferred tax assets will not be realized.

ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. The tax returns for fiscal 2020, through 2024 are subject to audit or review by the US tax authorities, whereas fiscal 2011 through 2024 are subject to audit or review by the Canadian tax authority.

F-10

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies (continued)

oq) ~~Income~~ ~~taxes~~Net (loss) income per Share

The Company accounts for income taxes under the provisions of ASC Topic 740, “Income Taxes”. Under ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income taxes are provided using the liability method. Under this method, deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of existing assets and liabilities. The tax basis of an asset or liability is the amount attributed to that asset or liability for tax purposes. The effect on deferred taxes of a change in tax rates is recognized in income in the period of change. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of, the deferred tax assets will not be realized.

ASC Topic 740 contains a two-step approach to recognizing and measuring uncertain tax positions taken or expected to be taken in a tax return. The first step is to determine if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained in an audit, including resolution of any related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. The Company recognizes interest and penalties accrued on unrecognized tax benefits within general and administrative expense. To the extent that accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction in general and administrative expenses in the period that such determination is made. The tax returns for fiscal 2020, through 2023 are subject to audit or review by the US tax authorities, whereas fiscal 2011 through 2023 are subject to audit or review by the Canadian tax authority.

p) Net (loss) income per Share

Basic net (loss) income per share is computed on the basis of the weighted average number of common stock outstanding during the year.

Diluted net (loss) income per share is computed on the basis of the weighted average number of common stock and common stock equivalents outstanding. Dilutive securities having an anti-dilutive effect on diluted net (loss) income per share are excluded from the calculation.

Dilution is computed by applying the treasury stock method for options and warrants. Under this method, “in-the money” options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Dilution is computed by applying the if-converted method for convertible preferred stocks. Under this method, convertible preferred stock is assumed to be converted at the beginning of the period (or at the time of issuance, if later), and preferred dividends (if any) will be added back to determine income applicable to common stock. The shares issuable upon conversion will be added to weighted average number of common stock outstanding. Conversion will be assumed only if it reduces earnings per share (or increases loss per share).

qr) Stock based compensation

Stock based compensation cost is measured at the grant date, based on the estimated fair value of the award and is recognized as expense over the employee’s requisite service period or vesting period on a straight-line basis. Share-based compensation expense recognized in the consolidated statements of operations for the year ended December 31, ~~2024~~2025 and ~~2023~~2024 is based on awards ultimately expected to vest and has been reduced for estimated forfeitures. This estimate will be revised in subsequent periods if actual forfeitures differ from those estimates. We have no awards with performance conditions and no awards dependent on market conditions.

~~F-11~~s) Financial instruments Risks

~~ETHEMA~~The Company ~~HEALTH~~is ~~CORPORATION~~exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, December 31, 2025 and 2024.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. Summary of significant accounting policies (continued)

r) Financial instruments Risks

The Company is exposed to various risks through its financial instruments. The following analysis provides a measure of the Company’s risk exposure and concentrations at the balance sheet date, December 31, 2024 and 2023.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Financial instruments that subject the Company to credit risk consist primarily of accounts receivable.

Credit risk associated with accounts receivable is mitigated as only a percentage of the revenue billed to health insurance companies is recognized as income until such time as the actual funds are collected. The revenue is concentrated amongst several health insurance companies located in the US.

In the opinion of management, credit risk with respect to accounts receivable is assessed as low.

ii.

Liquidity risk

Liquidity risk is the risk the Company will not be able to meet its financial obligations as they fall due. The Company is exposed to liquidity risk through its working capital deficiency of approximately $913.1 8 million, and an accumulated deficit of approximately $4446.4 6 million. The Company is dependent upon the raising of additional capital in order to implement its business plan. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. ~~In the opinion of management, liquidity risk is assessed as high, material and remains unchanged from that of the prior year.~~

iii.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of three types of risk: interest rate risk, currency risk, ~~and~~ other price risk and concentration risk. The Company is exposed to interest rate risk, currency risk and ~~currency~~concentration risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market ~~interest~~ interest rates. The Company is exposed to interest rate risk on its convertible debt, promissory notes, short term loans, receivables funding third party loans and government assistance loans as of December 31, ~~2024~~2025. ~~In the opinion of management, interest rate risk is assessed as moderate.~~

Currency risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has limited exposure to assets and liabilities denominated in foreign currencies. The Company has not entered into any hedging agreements to mitigate this risk. ~~In the opinion of management, currency risk is assessed as low, immaterial and remains unchanged from that of the prior year.~~

F-11

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Summary of significant accounting policies (continued)

Financial instruments Risks (continued)

iii.

Market risk (continued)

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. ~~In the opinion of management, the Company is not exposed to this risk and remains unchanged from the prior year.~~

Concentration of customers

During the years ended December 31, ~~2024~~2025 and ~~2023~~2024, the Company derived approximately 100% of its in-patient revenues from a group of commercial ~~healthcare~~ health care insurers. Any adverse change in policy towards the treatment of substance abuse patients adopted by a majority of the group of commercial ~~healthcare~~health care insurers will have a significant impact on the Company.

st) Recent accounting pronouncements

The Financial Accounting Standards Board (“FASB”) issued additional updates during the year ended December 31, ~~2024~~2025. None of these standards are either applicable to the Company or require adoption at a future date and none are expected to have a material impact on the Company’s consolidated financial statements upon adoption.

tu) Comprehensive income (loss)

Comprehensive income is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. The Company does not have any comprehensive income (loss) for the periods presented.

uv) Segment ~~information~~ information

The Company’s Chief Executive Officer and President (“CEO”) is our chief operating decision maker (“CODM”) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because our CODM evaluates financial performance on a consolidated basis, the Company has determined that it operates as a single reportable segment composed of the financial results of Ethema Health Corporation.

F-12

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Going concern

The accompanying consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. For the year ended December 31, ~~2024~~2025, the Company incurred ~~operating~~a net ~~losses~~loss of $12.32 million and had a negative cash flow from operating activities of 0.5 1 million. As of December 31, ~~2024~~2025, the Company had an accumulated deficit of $4446.4 6 million, working capital deficiency of $913.18 million and total liabilities in excess of total assets of $79.56 million. These matters raise substantial doubt about Company’s ability to continue as a going concern.

Management believes that current available resources will not be sufficient to fund the Company’s planned expenditures over the next 12 months. Accordingly, the Company will be dependent upon the raising of additional capital through placement of common shares, and/or debt financing in order to implement its business plan and generating sufficient revenue in excess of costs. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. If the Company obtains additional funds through arrangements with collaborators or strategic partners, the Company may be required to relinquish its rights to certain geographical areas, or techniques that it might otherwise seek to retain. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition.

Based on the uncertainties described above, the Company believes its business plan does not alleviate the existence of substantial doubt about its ability to continue as a going concern within one year from the date of the issuance of these consolidated financial statements. The accompanying consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

4. ~~Disposal~~Acquisition of ~~subsidiary~~the business of Edgewater Recovery Center

On ~~June~~October 3022, ~~2023~~2024, ARIA Kentucky LLC (ARIA Kentucky”), a wholly owned subsidiary of the Company, Edgewater Recovery Centers, LLC (“ERC”) and John Elam (the ”Seller”), entered into an ~~exchange~~Asset ~~agreement~~Purchase ~~with~~Agreement ~~Leonite~~(”APA”) ~~Capital~~pursuant to which ARIA Kentucky agreed to acquire and ERC agreed to sell to ARIA Kentucky on the closing date (the “Acquisition”), ~~LLC~~the addiction treatment operations owned by ERC and located in Morehead and Paducah, ~~whereby~~Kentucky itthrough ~~exchanged~~a purchase of the ~~400,000~~assets ~~Series~~of BERC ~~shares~~(the ~~with~~“Acquired aAssets”), ~~value~~including; all assets of ~~$400~~ERC used in the business of ERC (except for certain specified assets),~~000~~ ~~plus~~including but ~~accrued~~not ~~dividends~~limited ~~thereon~~to all current assets existing at the time of ~~$61~~closing,~~184~~ ~~for~~all ~~its~~cash ~~entire~~balances ~~shareholding~~and inrights ~~its~~to receive cash, all equipment, machinery, all warranties related to the business and acquired assets, all intangible personal property, ~~owning~~intellectual ~~subsidiary~~property, ~~Cranberry~~all business inventories, ~~Cove~~all ~~Holdings~~property leases associated with the business, all assumed contracts, all governmental authorizations; and all information and records, including patient records, as defined in the APA. ~~The~~Certain ~~Series~~of Bthe ~~shares~~real ~~were~~property ~~cancelled~~associated ~~upon~~with ~~consummation~~the operations of ERC (the “Real Property”) is fully leveraged and requires credit and personal guarantees which the Company is unable to provide. The entities owning the real property were acquired in a separate transaction by BH Properties Fund LLC (“BH Properties”), a company controlled by Mr. Shawn Leon, the Company’s CEO and therefore a related party. BH Properties through its acquired subsidiaries then entered into lease agreements with ARIA Kentucky on an arms-length basis, at market related rates.

~~Immediately~~On ~~prior~~January to9, 2025, ARIA Kentucky consummated the ~~disposal~~Acquisition of ~~Cranberry~~the ~~Cove~~Acquired ~~Holdings,~~Assets of ERC. Pursuant to the ~~Company~~terms ~~assumed~~of the ~~loan~~APA, ~~owed~~at toclosing ARIA aKentucky ~~third~~paid ~~party~~the ofSeller $~~779~~250,~~005~~ 000 and ~~the~~assumed ~~loan~~certain ~~owing~~liabilities related to ~~Leon~~ ~~Developments~~the ofAcquired $1Assets,~~973,837,~~ ~~Leon~~including ~~developments,~~trade apayables and liabilities ~~related~~under ~~party,~~assumed ~~owned~~contracts byand ~~the~~certain ~~Company’s~~specifically ~~CEO~~identified liabilities, ~~Shawn~~including ~~Leon.~~a Insettlement ~~addition,~~agreement ~~the~~with ~~Company~~the ~~forgave~~United States government and the ~~intercompany~~State ~~debt~~of ~~owing~~Kentucky byand ~~Cranberry~~certain ~~Cove~~obligations ~~Holdings~~as ofa ~~$4,566,848~~borrower or guarantor related to banking obligations.

The assets and liabilities disposed of were as follows:

Schedule of assets and liabilities Disposal	Net book value
Assets
Other receivable	$	12,015
Property and equipment		2,420,499
		2,432,514
Liabilities
Accounts payable and accrued liabilities		(196,859	)
Government assistance loans		(45,317	)
Mortgage loan		(3,525,223	)
		(3,767,399	)
Disposal of subsidiary to related party – recorded as additional paid in capital	$	(1,334,885	)

The minority stockholders interest related to the Series A preferred stock in Cranberry Cove Holdings of $700,000 was recorded as a deemed contribution to the Company and credited to additional paid in capital, resulting in a total credit to additional paid in capital of $2,034,885.

The cancellation of the Series B shares, which were owned by Leonite Capital, a related party, was deemed to be an extinguishment of debt by a related party and recorded as a credit to additional paid in capital of $461,184.

F-13

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Acquisition of the business of Edgewater Recovery Center (continued)

The final allocation of assets acquired and liabilities assumed as of December 31, 2025, is as follows:


	Amount
Purchase price
Cash	$	250,000
Allocation of purchase price
Current assets
Cash	$	299,492
Accounts receivable		723,181
Other current assets		61,109
		1,083,782
Non-current assets
Property and equipment		651,752
Customer relationships		2,944,000
Non-compete agreements		52,000
Goodwill		3,427,847
Deposits		15,000
		7,090,599
Total Assets acquired	$	8,174,381

Current liabilities
Accrued liabilities	$	253,958
Related party payables		804,372
		1,058,330

Non-current liabilities
Bank loans		4,354,044
Note payable – related party		66,741
Assumed liability		1,666,306
Deferred taxation		778,960
		6,866,051
Total liabilities assumed	$	7,924,381

Net assets acquired	$	250,000

Goodwill includes the value of an assembled workforce of $1,358,000. The assembled workforce produced operational synergies for the Company in the Kentucky addiction treatment market. The assembled workforce does not meet the criteria for recognition as a separate identifiable intangible asset.

The adjustments made from the provisional purchase price allocation to the final purchase price allocation during the measurement period (January 9, 2025 to January 9, 2026) were; (i) a reduction in accounts receivable acquired of $63,491; (ii) an increase in other current assets of $27,630 related to short-term investments; and (iii) a reduction in related party payables of $183,409, resulting in a net decrease in goodwill initially measured at $3,573,396 and finally recognized as $3,427,847, a reduction of $147,549.

The amount of pro forma revenue and earnings which would have been included in the Company’s consolidated statement of operations for the year ended December 31, 2025, and the revenue and earnings of the combined entity had the acquisition date been January 1, 2024, is presented as follows:


	Revenue		Net income (loss)
Actual for the period from acquisition to December 31, 2025	$	10,846,266	$	39,646

2025 supplemental pro-forma from January 1, 2025 to December 31, 2025	$	18,940,509	$	(2,176,566	)

2024 supplemental pro-forma from January 1, 2024 to December 31, 2024	$	16,268,343	$	(2,814,928	)

The supplemental pro forma information for the year ended December 31, 2025 was adjusted to exclude (i) non-recurring legal fees of $35,000 incurred on the acquisition of the business of Edgewater and (ii) amortization of intangibles of $4,530 and the tax effect thereon of $1,178.

The supplemental pro forma information for the year ended December 31, 2024 was adjusted to exclude (i) $2,249,633 related to a settlement reached with the Department of Justice by Edgewater and is unrelated to current and future operations and (ii) amortization of intangibles of $206,667 and the tax effect thereon of $53,733.

F-14

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Acquisition of minority stockholders interest in ATHI

On May 15, 2024, the Company entered into a Stock Purchase Agreement whereby it acquired the remaining 25% of ATHI representing 5,000,000 shares from the minority stockholder for gross proceeds of $1,100,000. The Company paid an initial deposit of $25,000 and on closing an additional $600,000. The Company issued a non-interest-bearing promissory note for the remaining balance of $475,000, which promissory note is repayable in installments of $10,000 a month on each monthly anniversary date of the agreement for months one to eight (eight installments) and months ten through seventeen (eight ~~instalments~~installments), and payments of $157,500 on month nine and month eighteen, for a total of $475,000.

The acquisition of the minority stockholders interest was accounted for in terms of ASC 810, Consolidation.

Schedule of acquisition
	Amount
Purchase price
Cash	$	625,000
Promissory note		475,000
Total		1,100,000
Allocation of purchase price
Minority stockholders interest		101,842
Additional paid in capital		(1,201,842	)
Total	$	(1,100,000	)

Acquisition of Boca Cove Detox

On March 22, 2024, the Company executed a LOI to acquire certain assets, including furniture, equipment inventory and supplies of Boca Cove Detox, LLC, along with the assignment of lease and sub-lease for premises located at 899 Meadow Avenue, Boca Raton, Florida. On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company would assume the lease for suites 100,101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement.

Schedule of acquisition of boca cove detox
	Amount
Purchase price
Cash	$	323,393
Allocation of purchase price
Property and equipment		240,000
Deposit assumed on leased premises		83,393
Total	$	323,393

Property and equipment

Acquisition and simultaneous disposition of property

On October 3, 2022 the Company entered into a purchase and sale agreement with Evernia Station Limited Partnership for the purchase of 950 Evernia Street, West Palm Beach, Florida (“950”), the property in which it operates its treatment center, for gross proceeds of $5,500,000. (“Purchase Agreement”). The closing was originally scheduled for February 1, 2023, however through a series of 6 addendums to the Purchase Agreement requiring the payment of a total $180,000 in extension fees, the Closing was extended to August 3, 2023.

On February 27, 2023 the Company signed a listing agreement with Stream Capital Partners listing 950 for sale at a price of $9,568,000 with the intention of identifying a buyer that would purchase and then potentially enter into a lease agreement with the Company.

F-14

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

7. Property and equipment (continued)

Acquisition and simultaneous disposition of property (continued)

On May 4, 2023 the Company signed a Letter of Intent with Pontus Net Lease Advisers, LLC to sell 950 for $8,500,000 and lease the property to the Company for a term of twenty years with two ten year extensions. On May 19, 2023, the Company signed a purchase and sale agreement with Pontus Net Lease Advisors to sell 950 for $8,500,000. On August 4, 2023, the Company completed both the purchase of 950 from Evernia Station Limited Partnership and the subsequent sale of 950 to Pontus Net Lease Advisors, LLC.

Simultaneously with the closing of the purchase and sale agreements, on August 4, 2023, the Company entered into a long term lease for 950 with an initial term of twenty years, and two ten year extension options. The lessor is Pontus EHC Palm Beach, LLC, a Delaware limited liability company and a portfolio company of Pontus Net Lease Advisors, LLC. The lease is absolutely net and the lease cost for the initial year is $748,000 paid monthly. The lease increases at a rate of 2.75% per year for a total term lease obligation of $19,595,653 over the initial twenty-year term. The Lease is personally guaranteed by the Company President and the guarantee may be released after 5 years based on certain financial and performance metrics being met.

The Company paid gross proceeds of $1,449,000 to Leonite Capital and Leonite Fund I, LP in settlement of all amounts outstanding to both entities. In addition, $65,450 was paid to Ed Blasiak to settle the convertible promissory note owing to him, $179,474 was paid to Joshua Bauman to settle a convertible promissory note owing to him and $260,548 was paid to Mirage Realty, LLC to settle the senior secured promissory note owing to them.

The details of the property purchase and subsequent sale are as follows:

Schedule of property purchase and subsequent sale
	Amount
Purchase of 950 Evernia Street property
Purchase price	$	5,500,000
Fees and expenses related to property purchase		109,276
Total acquisition cost		5,609,276
Proceeds on sale		8,500,000
Fees and expenses related to disposal of the property		(406,552	)
Net proceeds on disposal of property		8,093,448
Gain on sale of property	$	2,484,172

Acquisition of Boca Cove Detox

On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company would assume the lease for suites 100,101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement. The purchase price of the assets was $240,000.

Property and equipment consists of the following:

Schedule of property and equipment
		December 31, 2024							December 31, 2023
		December 31, 2025							December 31, 2024
	Useful lives	Cost		Accumulated depreciation			Net book value		Net book value
Leasehold improvements	Life of lease	$	~~513~~609,~~375~~514	$	(~~137~~194,~~330~~116	)	$	~~376~~415,~~045~~398	$	~~371~~376,~~308~~045
Furniture and fittings	6 years		~~396~~911,~~711~~975		(93240,~~282~~489	)		~~303~~671,~~429~~486		~~104~~303,~~715~~429
Vehicles	5 years		55224,~~949~~507		(4084,~~250~~532	)		15139,~~699~~975		2615,~~889~~699
Computer equipment	3 years		913,~~372~~389		(48,~~857~~404	)		4,~~515~~985		54,~~489~~515
		$	975,407	$	(275,719	)	$	699,688	$	508,401
Capital work in progress			145,514		—			145,514		—
		$	1,904,899	$	(527,541	)	$	1,377,358	$	699,688

Depreciation expense for the year ended December 31, ~~2024~~2025 and ~~2023~~2024 was $~~108~~251,~~971~~ 823 and $~~140~~108,~~938~~971, respectively.

F-15

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Intangibles

~~Intangible~~As ~~assets~~disclosed ~~consist~~in ofnote ~~the~~4 ~~Company’s~~above, ~~estimate~~in terms of ~~the~~an ~~fair~~APA ~~value~~agreement ofentered ~~intangibles~~into ~~acquired~~on ~~with~~October ~~the~~22, ~~acquisition~~2024, ofon ~~ATHI.~~January ~~The~~9, 2025, the Company ~~allocated~~consummated the ~~excess~~acquisition ~~over~~of the ~~tangible~~Acquired ~~assets~~Assets ~~acquired~~of ERC, ~~less~~which ~~the~~included ~~liabilities~~a ~~assumed~~provisional tovaluation ~~the~~of ~~contract~~customer ~~provided~~relationships toof ~~the~~$2,944,000 and non-compete ~~Company~~agreements byof ~~a health care service provider~~$52,000.

Health care provider license consists of the Company’s estimate of the fair value of intangibles acquired with the acquisition of ATHI. The Company allocated the excess over the tangible assets acquired, less the liabilities assumed to the contract provided to the Company by a health care service provider.

Intangible assets consist of the following:

Schedule of intangible assets
		December 31, 2024							December 31, 2023
	Useful lives	December 31, 2025							December 31, 2024
	Useful lives	Cost		Accumulated amortization			Net book value		Net book value
		Cost		Accumulated amortization			Net book value		Net book value
Health care Provider license	5 Years	$	1,789,903	$	(1,252,932	)	$	536,971	$	894,952
Customer relationships	15 years	$	2,944,000	$	(192,283	)	$	2,751,717	$	—
Non-compete agreement	5 years		52,000		(10,192	)		41,808		—
Health care Provider license	5 years		1,789,903		(1,610,912	)		178,991		536,971
		$	4,785,903	$	(1,813,387	)	$	2,972,516	$	536,971

The Company evaluates intangible assets for impairment on an annual basis during the last month of each year and at an interim date if indications of impairment exist. Intangible asset impairment is determined by comparing the fair value of the asset to its carrying amount with an impairment being recognized only when the fair value is less than carrying value and the impairment is deemed to be permanent in nature.

The Company recorded $560,456 and $357,981 in amortization expense for finite-lived assets for the years ended December 31, ~~2024~~2025 and ~~2023~~ 2024.

Estimated future amortization expense is as follows:

Schedule of future amortization expense
Schedule of estimated future amortization
		Amount
2025	$	357,981
2026	$	385,667
2026		178,990
2027		206,676
Total estimated amortization expense	$	536,971
2028		206,676
2029		206,676
2030		196,464
2031 and thereafter		1,770,357
Total estimated amortization expense	$	2,972,516

9. ~~Leases~~Goodwill

Goodwill ~~The~~represents ~~Company~~the ~~acquired~~excess ~~ATHI~~purchase onprice ~~July~~paid 1,over ~~2021,~~the ~~ATHI’s~~fair ~~wholly~~value ~~owned subsidiary had entered into an operating lease agreement for certain real property located at 950 Evernia Street, West Palm Beach, Florida, with effect from February 1, 2019 for a period~~ of ~~three years,~~assets ~~expiring on 1 February 2022. Under the terms of the lease agreement~~acquired, ~~the~~including ~~lease~~any ~~was~~other ~~extended~~identifiable ~~during~~intangible ~~October 2021 for a further 5-year period until February 1, 2027~~assets.

OnAs ~~October~~disclosed 3,in ~~2022~~note ~~the~~4 ~~Company~~above, ~~entered~~in ~~into~~terms aof ~~purchase~~an ~~and~~APA ~~sale~~ agreement ~~with~~entered ~~Evernia~~into ~~Station~~on ~~Limited~~October ~~Partnership for the purchase of 950 Evernia Street~~22, ~~West Palm Beach~~2024, ~~Florida,~~on ~~the~~January ~~property in which it operates its treatment center~~9, ~~for gross proceeds of $5~~2025,~~500,000.~~ ~~On August 3, 2023, after 6 addendums to~~ the ~~agreement, the~~ Company ~~closed on~~ consummated the acquisition of the ~~property.~~Acquired ~~This~~Assets ~~resulted in the termination~~ of ~~the lease with Evernia station~~ERC, ~~resulting in the reversal of the remaining right-of-use asset of $1,226,080 and the associated operating lease liability of $1,328,803,~~ which ~~liability~~ included ~~$102,723~~goodwill ofestimated ~~accrued~~at ~~rental~~$3, ~~which was offset against the rental expense~~427,847.

On August 4, 2023, the Company entered into a long-term lease for 950 Evernia Street, West Palm Beach, Florida with an initial term of twenty years, and two ten-year extension options. The lessor is Pontus EHC Palm Beach, LLC, a Delaware limited liability company and a portfolio company of Pontus Net Lease Advisors, LLC. The lease is absolutely net and the lease cost for the initial year is $748,000 paid monthly. The lease increases at a rate of 2.75% per year for a total term lease obligation of $19,595,653 over the initial twenty-year term. The Lease is personally guaranteed by the Company President and the guarantee may be released after 5 years based on certain financial and performance metrics being met. Due to the initial lease term of twenty years, the Company is not certain that the extension periods will be exercised at this point in time and accordingly, these have been excluded from the present value of the minimum future lease payments.

Schedule of goodwill
	Amount
Opening balance as of January 1, 2025	$	—
Acquisition of the assets and liabilities assumed of Edgewater Recovery Center		3,427,847
Closing balance as of December 31, 2025	$	3,427,847

ToThe ~~determine~~Company evaluates goodwill for impairment on an annual basis during the ~~present~~last ~~value~~month of ~~minimum~~each ~~future~~year ~~lease~~and ~~payments~~at ~~for~~an ~~operating~~interim ~~leases~~date atif ~~August~~indications of 4,impairment ~~2023,~~exist. ~~the~~Goodwill ~~Company~~impairment ~~was~~is ~~required~~determined toby ~~estimate a~~comparing ~~rate~~the offair ~~interest~~value ~~that~~of itthe ~~would~~reporting ~~have~~unit to ~~pay~~its tocarrying ~~borrow~~amount onwith an aimpairment ~~collateralized~~being ~~basis~~recognized ~~over~~only awhen ~~similar~~the ~~term~~fair invalue ais ~~similar~~less ~~economic~~than ~~environment (~~carrying value and the ~~"incremental~~impairment ~~borrowing~~is ~~rate"~~deemed orto ~~"IBR")~~be permanent in nature.

The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the Fannie Mae, in excess of $3,000,000 rate based on an 80% value to loan ratio, averaging the 15- and 30-year indicative rates, resulting in a rate of 7.70%. The Company determined that 7.70% per annum was an appropriate incremental borrowing rate to apply to its real estate operating lease.

The present value of the future minimum lease payments was valued at $9,333,953 on August 4, 2023.

F-16

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

910. Leases ~~(continued)~~

The Company acquired ATHI on July 1, 2021, ATHI’s wholly owned subsidiary, Evernia Health Center, LLC (“Evernia”) had entered into an operating lease agreement for certain real property located at 950 Evernia Street, West Palm Beach, Florida (“Evernia Street”), with effect from February 1, 2019 for a period of three years, expiring on February 1, 2022. Under the terms of the lease agreement, the lease was extended during October 2021 for a further 5-year period until February 1, 2027.

On October 3, 2022, the Company entered into a purchase and sale agreement with Evernia Station Limited Partnership for the purchase of Evernia Street, the property in which it operates its treatment center, for gross proceeds of $5,500,000. On August 3, 2023, after 6 addendums to the agreement, the Company closed on the acquisition of Evernia Street. This resulted in the termination of the lease with Evernia station, resulting in the reversal of the remaining right-of-use asset of $1,226,080 and the associated operating lease liability of $1,328,803, which liability included $102,723 of accrued rental, which was offset against the rental expense.

On August 4, 2023, the Company immediately sold Evernia Street to Pontus EHC Palm Beach, LLC, a Delaware limited liability company and a portfolio company of Pontus Net Lease Advisors, LLC, and entered into a long-term lease for Evernia Street with an initial term of twenty years, and two ten-year extension options. The lessor is Pontus EHC Palm Beach, LLC, The lease is absolutely net and the lease cost for the initial year is $748,000 paid monthly. The lease increases at a rate of 2.75% per year for a total term lease obligation of $19,655,717 over the initial twenty-year term. The Lease is personally guaranteed by the Company President and the guarantee may be released after 5 years based on certain financial and performance metrics being met. Due to the initial lease term of twenty years, the Company is not certain that the extension periods will be exercised at this point in time and accordingly, these have been excluded from the present value of the minimum future lease payments.

To determine the present value of minimum future lease payments for operating leases at August 4, 2023, the Company was required to estimate a rate of interest that it would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment (the "incremental borrowing rate" or "IBR").

The Company determined the appropriate IBR by identifying a reference rate and making adjustments that take into consideration financing options and certain lease-specific circumstances. For the reference rate, the Company used the Fannie Mae, in excess of $3,000,000 rate based on an 80% value to loan ratio, averaging the 15- and 30-year indicative rates, resulting in a rate of 7.70%. The Company determined that 7.70% per annum was an appropriate incremental borrowing rate to apply to its real estate operating lease.

The present value of the future minimum lease payments was valued at $9,333,953 on August 4, 2023.

On May 1, 2024 the Company, through its subsidiary Evernia Health Center LLC, entered into a Definitive Agreement whereby the Company would assume the lease for suites 100, 101, 201, 202 and 203 located at 899 Meadows Road, Boca Raton, Florida (the “Leased Premises”) and the furniture, fixtures and equipment located therein, upon the assignment of the lease from the property owner. The lease was assigned on June 10, 2024 and the Company entered into a Bill of Sale to give effect to the Definitive Agreement.

The present value of the future minimum lease payments was valued at $744,256 on June 10, 2024.

~~Right~~As disclosed in note 4 above, in terms of ~~use~~an APA agreement entered into on October 22, 2024, on January 9, 2025, the Company consummated the acquisition of the Acquired Assets of ERC. Simultaneously, with the acquisition of the assets ~~are~~of ~~included~~ERC, inBH Properties, a company controlled by Mr. Shawn Leon, the ~~consolidated~~Company’s ~~balance~~CEO and ~~sheet~~a ~~are~~related asparty, acquired ~~follows:~~certain of the real property associated with the operations of ERC.

Schedule of right of use assets are included in the consolidated balance
	December 31, 2024		December 31, 2023
Non-current assets
Right-of-use assets – finance leases, net of depreciation, included in Property and equipment	$	15,699	$	26,889
Right-of-use assets - operating leases, net of amortization	$	9,920,592	$	9,323,723

Lease costs consists of the following:

Schedule of lease costs
	Year ended December 31,
	2024		2023
Finance lease cost:
Amortization of right-of-use assets	$	11,190	$	11,190
Interest expense on finance lease liabilities		1,402		1,938
Total finance lease cost		12,592		13,128
Operating lease cost	$	1,304,127	$	598,336
LeaLease costse cost	$	1,316,719	$	611,464

Other lease information:

Schedule of other lease
	Year ended December 31,
	2024			2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(1,402	)	$	(1,938	)
Operating cash flows from operating leases		(999,883	)		(600,299	)
Financing cash flows from finance leases		(8,478	)		(7,943	)
Cash paid for amounts included in the measurement of lease liabilities	$	(1,009,763	)	$	(610,180	)
Weighted average lease term – finance leases		1 years and ten months			2 years and ten months
Weighted average remaining lease term – operating leases		17 years and 8 months			19 years and 8 months
Discount rate – finance leases		6.60	%		6.60	%
Discount rate – operating leases		7.61	%		7.70	%

F-17

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

910. Leases (continued)

The Company entered into 7 lease agreements, effective January 1, 2025, with its related party, BH Properties, all of which were for an initial period of five years with an option to extend for an additional five years, since the transaction is between related parties the option is likely to be exercised, the lease agreements all include an annual escalation of 1.5% of the base rent and the lessee is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

The Company also entered into a third-party lease agreement with Trent Developments, LLC for a property located at 141, 141.5 and 143 East Main Street, Morehead Kentucky. The lease is for a period of 6 years commencing on January 1, 2025, with a base annual rental of $138,000, escalating by 1.5% on the second anniversary of the lease term and each anniversary thereafter.

In addition, the Company entered into an assignment of lease agreement with MAT Properties, LLC for a property located at 154 S Owens Road, Morehead Kentucky. The original lease was modified and the term of the lease was extended to 3 years commencing on January 1, 2025, ending on December 31, 2027. The base rental of the lease is $180,000 per annum with no escalations.

The Company, through its subsidiary ARIA Kentucky, entered into 2 lease agreements, effective July 1, 2025, with its related party, BH Properties and its subsidiary, Viking Assets, LLC. The first lease is for property situated at 417 South 4^th Street, Paducah, Kentucky, with an annual base rent of $96,000 and the second lease is for property situated at 425 South 6^th Street, Paducah Kentucky, with an annual base rent of $72,000. Each lease is for an initial period of four years and six months with an option to extend for an additional five years, since the transaction is between related parties the option is likely to be exercised. Each lease agreement includes an escalation of 1.5% of the base rent, commencing on January 1, 2026, and annually thereafter. The Company is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

Effective October 1, 2025, the Company enter into rental abatement agreements with its related party, ERC Investments, LLC, whereby cash rental on the 425 Clinic Drive and the 1111 US 60 W properties was abated for the three months ended December 31, 2025 by $60,000 and $90,000, respectively. This abatement was evaluated under ASC 842 and determined to be a lease modification. The Company re-evaluated the IBR rate at the date of modification and determined that the rate was 7.8% which was used to calculate the present value of future minimal lease payments of the 425 Clinic Drive and 1111 US 60 W properties at $5,409,062, a net reduction of $165,975, on the date of modification. The modification also resulted in a decrease in the rental smoothing liability of $45,761 on the date of modification, and an increase in the smoothing expense of $147,183 over the three-month period ended December 31, 2025, a net impact of $101,422 increase in rental smoothing liability for the year ended December 31, 2025. The net impact of the rental abatement on the statement of operations was a credit of $48,578.

The details of the related party property leases are as follows:


Description	Base Rental (annual)
425 Clinic Drive, Morehead, Kentucky*	$	312,000
445 Clinic Drive, Morehead, Kentucky		120,000
1111 US 60 W, Morehead, Kentucky*		480,000
2180 US 60 W, Morehead, Kentucky		36,000
721 White Street, Morehead Kentucky		30,000
214 Jackson Drive, Morehead, Kentucky		30,000
1135 Rodburn Hollow Drive, Morehead, Kentucky		30,000
417 South 4^th Street, Paducah, Kentucky		96,000
425 South 6^th Street, Paducah, Kentucky		72,000
Total	$	1,206,000

* During 2025, a once off rental abatement of $60,000 and $90,000 was granted to ARIA Kentucky by ERC Investments on the 425 Clinic Drive property and the 1111 US60W property, respectively.

Right of use assets are included in the consolidated balance sheet are as follows:


	December 31, 2025		December 31, 2024
Non-current assets
Right-of-use assets – finance leases, net of depreciation, included in Property and equipment	$	4,509	$	15,699
Right-of-use assets – operating leases, net of amortization		10,540,982		9,920,592
Right-of-use assets – operating leases, related party, net of amortization		8,378,005		—
	$	18,923,496	$	9,936,291

F-18

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10.

Leases (continued)

Lease costs consists of the following:

Schedule of lease costs
	Year ended December 31,
	2025		2024
Finance lease cost:
Depreciation of right-of-use assets	$	8,392	$	11,190
Interest expense on finance lease liabilities		672		1,402
		9,064		12,592
Operating lease costs
Third parties		1,884,738		1,304,127
Related parties		1,128,568		—
		3,013,306		1,304,127
Lease cost	$	3,022,370	$	1,316,719

Other lease information:

Schedule of other lease
	Year ended December 31,
	2025			2024
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from finance leases	$	(821	)	$	(1,402	)
Operating cash flows from operating leases – third parties		(1,712,246	)		(999,883	)
Operating cash flows from operating leases – related parties		(1,363,724	)		—
Financing cash flows from finance leases		(9,008	)		(8,478	)
Cash paid for amounts included in the measurement of lease liabilities	$	(3,085,799	)	$	(1,009,763	)

Weighted average lease term – finance leases		1 years and 1 months			2 years and 2 months
Weighted average remaining lease term – operating leases		12 years and 10 months			17 years and 10 months

Discount rate – finance leases		6.50	%		6.58	%
Discount rate – operating leases		7.71	%		7.60	%

Maturity of Leases

Finance lease liability

The ~~amount~~ amount of future minimum lease payments under finance leases asat of December 31, ~~2023~~2025 is as follows:

Schedule of future minimum lease payments under finance leases
	Amount
2025	$	9,829
2026	$	6,195
2026		6,195
2027		1,707
Total finance lease		17,731
Total		7,902
Imputed interest		(~~1,309~~539	)
Total finance lease liability	$	167,~~422~~363
Disclosed as:
Current portion	$	96,~~829~~195
Non-Current portion		61,~~593~~168
Lease liability	$	167,~~422~~363

Operating lease liability

The amount of future minimum lease payments under operating leases are as follows:

Schedule of future minimum lease payments under operating leases
	Amount
2025	$	1,045,192
2026	$	2,854,105
2026		1,074,288
2027		2,717,331
2027		961,526
2028		2,400,557
2028		841,379
2029		2,400,557
2029 and thereafter		15,358,663
2030		2,400,557
Total undiscounted minimum future lease payments		19,281,048
2031 and thereafter		16,630,172
Imputed interest		(9,032,492	)
Total undiscounted minimum future lease payments		29,403,279
Total operating lease liability	$	10,248,556
Imputed interest		(9,760,441	)
Total operating lease liability	$	19,642,838
Disclosed as:
Current portion	$	299,102
Current portion – third parties	$	537,884
Non-Current portion		9,949,454
Current portion – related parties		540,304
Lease liability	$	10,248,556
Non-current portion – third parties		10,541,565
Non-current portion – related parties		8,023,085
Lease liability	$	19,642,838

~~10. Short~~F-~~term Convertible Notes~~19

The short-term convertible notes consist of the following:

Schedule of short-term convertible notes
	Interest rate			Maturity Date	Principal		Interest		December 31, 2024		December 31, 2023
Auctus Fund, LLC		0.0	%	On Demand	$	70,000	$	—	$	70,000	$	70,000
Joshua Bauman		10.0	%	August 9, 2024		120,776		13,068		133,844		121,766
Series N convertible notes		6.0	%	December 31, 2024 to December 31, 2025		2,779,000		990,401		3,769,401		4,228,161
					$	2,969,776	$	1,003,469	$	3,973,245	$	4,419,927

F-18

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1011. ~~Short-term~~Bank ~~Convertible Notes (continued)~~loans

As disclosed in note 4 above, in terms of an APA agreement entered into on October 22, 2024, on January 9, 2025, the Company consummated the acquisition of the Acquired Assets of ERC ad certain assumed liabilities. In order to secure the acquisition of the assets, the Company raised commercial loans from Peoples Bank to settle other bank debt related to Edgewater and its founder.

The bank loans are disclosed as follows:

Schedule of bank loans
	Interest rate			Maturity Date	Principal		Interest		December 31, 2025		December 31, 2024
Peoples Bank
Promissory note		7.50	%	February 27, 2028	$	4,180,280	$	21,739	$	4,202,019	$	—
Commercial loan		7.75	%	December 22, 2026		48,423		22		48,445		—
Commercial promissory note		7.50	%	July 1, 2026		300,000		1,833		301,833
					$	4,528,703	$	23,594	$	4,552,297	$	—
Disclosed as follows
Bank loans - current portion									$	888,315	$	—
Bank loans – long term portion										3,663,982		—
									$	4,552,297	$	—

On January 6, 2025, the Company entered into a Loan and Security Agreement (“LSA”) with Peoples Bank of Hazard (“Peoples”), whereby Peoples advanced the Company the following funds:

Promissory note

$4,250,000 to settle existing debt owed by the founder of Edgewater Recover Center to Peoples. The promissory note bears interest at 7.5% per annum calculated on a 360-day year and matures on February 27, 2028. The Company is required to make monthly interest payments only for the first six months of the promissory note, commencing on February 6, 2025 until July 6, 2025, for the next twelve months, monthly repayments of $50,000 of principal and interest, commencing on August 6, 2025 to July 6, 2026, for the following twelve months, monthly repayments of $100,000 of principal and interest, commencing on August 6, 2026 to July 6, 2027, for the following six months, monthly repayment of $125,000 of principal and interest, commencing on August 6, 2027 to January 6, 2028, and a final payment of the remaining principal and interest on February 27, 2028. The loan is secured by properties belonging to BH Properties, LLC, and personal guarantees by Shawn Leon, the Company’s CEO.

The Company repaid principal of $69,720 and interest of $292,780 during the year ended December 31, 2025.

Commercial loan

The Company originally assumed the obligations of an auto loan from Edgewater with a principal balance owing of $100,000 and accrued interest thereon of $4,044, bearing interest at 8.5% per annum. On March 20, 2025, the Company repaid $30,720 of principal and interest outstanding on the loan and entered into a new commercial loan agreement of $75,000 bearing interest at 7.75% per annum, with monthly repayments of $3,392.

The Company repaid principal of $51,656 and interest of $9,588, during the year ended December 31, 2025.

Commercial promissory note

On June 30, 2025, the Company entered into a commercial promissory note, whereby the Company was advanced $300,000, net of loan origination and documentation fees of $3,500, for net proceeds of $296,500. The loan bears interest at a variable interest rate of the New York prime rate plus 0.5%, currently the interest rate is 7.5% and is calculated on an actual over 360-day basis. The interest rate will never exceed 10% per annum or fall below 6% per annum. The loan matures on July 1 2026, or on demand by the lender. Monthly interest only payments are to be made. The loan may be prepaid without penalty and any funds prepaid may be re-borrowed by the Company until the maturity date, unless precluded from doing so by the lender. The loan is secured by a pledge of the membership interest in ARIA Kentucky, LLC and blanket liens on all of the assets of ARIA Kentucky, LLC, including accounts receivable and all other business assets. In addition, the lender holds guarantees from Ethema Health Corporation and Shawn Leon.

The Company paid interest of $10,048 during the year ended December 31, 2025.

F-20

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12.

Assumed liability

Edgewater Recovery Center had entered into a settlement agreement with the Department of Justice and the Department of Health and Human Services and the State of Kentucky and the Department of Medicaid Services in Kentucky, relating to false claims submitted to Medicare. The balance of the liability assumed by the Company amounted to a principal of $1,658,105 and accrued interest thereon of $44,614. The balance accrued interest at 4.75% per annum and is repayable in thirteen installments, the first installment of $44,614 was paid prior to the consummation of the acquisition transaction and a further twelve installments commencing on February 1, 2025 to December 1, 2026.

The settlement agreement with the Department of Justice provided for default interest at a rate of 12% per annum, compounded daily upon any event of default, including any missed instalments. On June 1, 2025, the Company was unable to repay the scheduled instalment and thereby triggered the default interest clause. Default interest has been calculated from April 30, 2025, the date the last instalment was paid.

The Company repaid principal of $159,085 and accrued interest of $31,329 during the year ended December 31, 2025.

Schedule of assumed liability
	Interest rate			Maturity Date	Principal		Interest		December 31, 2025		December 31, 2024
Assumed liability		12.0	%	December 1, 2026	$	1,499,021	$	125,184	$	1,624,205	$	—
Disclosed as follows
Assumed liability - current portion										1,624,205		—

13.

Short-term Convertible Notes

The short-term convertible notes consist of the following:


	Interest rate			Maturity Date	Principal		Interest		December 31, 2025		December 31, 2024
Auctus Fund, LLC		0.0	%	On Demand	$	60,000	$	5,000	$	65,000	$	70,000

Joshua Bauman		10.0	%	On Demand		77,576		4,048		81,624		133,844

Series N convertible notes		6.0	%	December 31, 2025		2,779,000		1,092,338		3,871,338		3,769,401

					$	2,916,576	$	1,101,386	$	4,017,962	$	3,973,245

Auctus Fund, LLC

On August 7, 2019, the Company, entered into a Securities Purchase Agreement with Auctus Fund, LLC, pursuant to which the Company issued a Convertible Promissory Note in the aggregate principal amount of $225,000. The Note had a maturity date of May 7, 2020 and bore interest at the rate of ten percent per annum from the date on which the Note was issued until the same became due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. The Company had the right to prepay the Note in terms of agreement. The outstanding principal amount of the Note is convertible at any time and from time to time at the election of Auctus Fund, LLC during the period beginning on the date that is 180 days following the issue date into shares of the Company’s common stock at a conversion price equal to 60% of the lowest closing bid price of the Company’s common stock for the thirty trading days prior to conversion.

On June 15, 2020, The Company entered into an amended agreement with Auctus whereby the conversion feature of the note was removed and the Company agreed to discharge the principal amount of the note by nine equal monthly installments of $25,000 commencing in October 2020. During the year ended December 31, 2021, the Company repaid Auctus the principal sum of $50,000.

During March 2022, the Company paid $20,000 of principal on the convertible note, thereby reducing the principal outstanding to $80,000.

During February 2023, the Company paid $10,000 of principal on the convertible note, thereby reducing the principal outstanding to $70,000. The note matured May 7, 2020, Auctus Fund LLC has not declared a default and we are in constant discussion with the lender on settling the note.

On May 13, 2025, the Company entered into an Amendment #2 to the convertible promissory note, whereby the Company will repay the balance outstanding as follows; $10,000 on June 1, 2025, $15,000 on July 1, 2025 and three installments of $20,000 monthly thereafter.

The Company repaid $10,000 of principal and interest during the year ended December 31, 2025.

F-21

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

13.

Short-term Convertible Notes (continued)

Joshua Bauman

On August 9, 2023, the Company issued a convertible promissory note to Mr. Bauman, in the aggregate principal amount of $150,000. The note bears interest at 10.0% per annum and matures on August 9, 2024. The note is convertible into shares of common stock at a conversion price at the option of the holder at $0.001 per share, adjusted for anti-dilution provisions. The note is convertible into common stock at the option of the holder after the expiration of six months from the issuance date, in addition, should the note reach its maturity date, August 9, 2024, the note will automatically convert into shares of common stock at the conversion price, subject to anti-dilution provisions. The note was not automatically converted into shares of common stock upon maturity and remains outstanding, although the note is in technical default, a default has not been declared and we are negotiating with the note holder on amending the terms or repaying the note.

During November 2023 and December 2023, the ~~company~~Company repaid $29,224 and $4,597 in principal and interest, respectively. No ~~repayments~~ repayments were made during the year ended December 31, 2024.

During the year ended December 31, 2025, the Company repaid principal of $43,200 and interest of $18,800 totaling $62,000.

Series N convertible notes

Between January 28, 2019 and June 11, 2020, the Company closed several tranches of Series N Convertible notes in which it raised $3,229,000 in principal from accredited investors through the issuance to the investors of the Company’s Series N convertible notes, in the total original principal amount of $3,229,000, which Notes are convertible into the Company’s common stock at a conversion price of $0.08 per share together with three year warrants to purchase up to a total of 52,237,500 shares of the Company’s common stock at an exercise price of $0.12 per share. Both the conversion price under the Notes and the exercise price under the warrants are subject to standard adjustment mechanisms. The notes matured one year from the date of issuance.

The maturity dates of the Series N convertible notes were extended to December 31, 2024, with the exception of 5 series N convertible notes issued to one investor with an aggregate principal outstanding of $1,273,000, which was extended to December 31, 2025. No consideration was provided to the investors for the maturity date extensions. These Series N convertible notes are past due and are technically in default as of December 31, 2025.

Between April 30, 2024 and May 10, 2024, three series N convertible note holders, converted principal of $450,000 into Series R promissory notes after the repayment of $151,475 of accrued interest.

During the ~~current~~ year ended December 31, 2025, the Company repaid ~~$33,750~~interest of ~~accrued~~$64,804 ~~interest~~on tothe ~~certain~~ Series N convertible ~~note holders~~notes.

F14. Short-19term Notes

The short-term notes consist of the following:

Schedule of short-term notes
Description	Interest Rate			Maturity date	Principal		Accrued Interest		Unamortized debt discount		December 31, 2025 Amount		December 31, 2024 Amount
LXR Biotech		6.0	%	On Demand	$	97,133	$	39,199	$	—	$	136,332	$	124,309

Mirage Realty		18.0	%	May 15, 2025		600,000		7,500		—		607,500		613,500

Third Party		12.0	%	On demand		251,408		35,916		—		287,324		251,899

Revolving line of credit		120.0	%	August 13, 2024		64,423		42,519		—		106,942		162,576
		120.0	%	September 30, 2024		199,100		300,219		—		499,319		258,589

M. Baldassara		10.0	%	December 31, 2025		120,000		7,331		—		127,331		—

R. Baldassara		10.0	%	December 31, 2025		120,000		7,332		—		127,332		—

Series R Promissory notes		7.5	%	March 31, 2025		1,155,000		206,647		—		1,361,647		1,164,250

Total notes payable					$	2,607,064	$	646,663	$	—	$	3,253,727	$	2,575,123

F-22

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1114. Short-term Notes (continued)

The short term notes consist of the following:

Schedule of short-term notes
Description	Interest Rate			Maturity date	Principal		Accrued Interest		Unamortized debt discount			December 31, 2024 Amount		December 31, 2023 Amount
LXR Biotech		6.0	%	On Demand	$	92,522	$	31,787	$	—		$	124,309	$	129,184
Mirage Realty		10.0	%	March 15, 2024		—		—		—			—		236,421
		6.0 to 18.0	%	November 15, 2024		600,000		13,500		—			613,500		—
Third Party		12.0	%	On demand		239,474		12,425		—			251,899		315,067
Revolving line of credit		60.0	%	May 1,2024		—		—		—			—		—
		60.0	%	May 14, 2024		—		—		—			—		—
		60.0	%	May 12, 2024		—		—		—			—		—
		60.0	%	July 14, 2024		—		—		—			—		—
		120.0	%	August 13, 2024		101,000		61,576		—			162,576		—
		120.0	%	September 30, 2024		181,000		77,589		—			258,589		—
Series R Promissory notes		7.5	%	March 31, 2025		1,155,000		38,447		(29,197	)		1,164,250		—
Total convertible notes payable					$	2,368,996	$	235,324	$	(29,197	)	$	2,575,123	$	680,672

LXR Biotech

On April 12, 2019, the Company, entered into a secured promissory note in the aggregate principal amount of CDN$133,130. The Note had a maturity date of April 11, 2020 and bears interest at the rate of six percent per annum from the date on which the Note was issued.

This note has not been repaid, is in default and remains outstanding.

Mirage Realty, LLC

On ~~November~~ May 15, ~~2023~~2024, the Company, entered into a senior secured promissory note in the aggregate principal amount of $~~250~~600,000 ~~for net proceeds of $223,500 after an original issue discount and fees of $26,500~~. The note ~~earned~~earns interest at 106% per annum ~~and~~for ~~originally~~the ~~matured~~first ontwo ~~March~~months ~~15,~~and ~~2024.~~9% ~~The~~per ~~maturity~~annum ~~date was~~for ~~extended~~the tofollowing ~~April~~two ~~15,~~months ~~2024,~~and ~~with~~18% nofor ~~change to~~ the ~~terms~~next oftwo ~~the~~months. The note ormatured on ~~any~~November ~~additional~~15, ~~consideration paid to the noteholder~~2024.

On ~~May~~October 1329, 2024, the ~~Company~~maturity ~~repaid principal~~date of ~~$250,000~~the ~~and~~note ~~accrued~~was extended to January 2025 with interest accruing thereon ofat $18% per annum. On February 13, 2025, we received a further extension on this note to May 15,~~000~~ 2025 with interest thereon remaining at 18% per annum. No further extensions on the note were granted which is past due and in default, ~~thereby~~with ~~extinguishing~~interest accruing at the ~~debt~~default rate of 18% per annum.

OnDuring ~~May~~the ~~15,~~year ~~2024,~~ended ~~the~~December ~~Company~~31, ~~entered~~2025, ~~into a senior secured promissory note in~~ the ~~aggregate~~Company ~~principal~~paid ~~amount~~interest of $~~600~~114,000. ~~The note earns interest at 6% per annum for the first two months and 9% per annum for the following two months and 18% for the next two months. The note matured~~ on ~~November 15, 2024. The proceeds of~~ the note ~~were used to acquire the minority stockholder interest in ATHI, refer note 5 above~~.

On October 29, 2024, the maturity date of the note was extended to January 2025 with interest accruing thereon at 18% per annum. On February 13, 2025, we received a further extension on this note to May 15, 2025 with interest thereon remaining at 18% per annum.

Third party note

On April 12, 2019, Eileen Greene, a related party, assigned CDN$1,000,000 of the amount owed by the Company to her, to a third party. The loan bears interest at 12% per annum which the Company agreed to pay.

~~During~~The ~~April~~balance ~~and~~outstanding ~~May~~on ~~2023,~~ the ~~Company~~note consists ~~made~~of ~~interest~~principal ~~repayments~~ of CDN$35344,~~000~~580 (~~approximately~~ $25251,~~970~~408) ~~on the third-party loan. Between August 9~~ and ~~August~~interest ~~10,~~accrued ~~2023,~~thereon ~~the Company made principal repayments~~ of CDN$~~345~~49,~~890~~227 ($~~257~~35,~~775~~915) ~~and~~totaling ~~interest repayments of~~ CDN$~~104~~393,~~110~~806 (~~approximately~~ $77287,~~515~~324). ~~On August 1, 2024,~~During the ~~Company~~year ~~repaid~~ended ~~CDN$100,000~~December ~~($72~~31,~~223)~~ ~~of which CDN$53~~2025,~~418~~ ~~($38,580)~~the ~~was~~Company ~~allocated~~paid tointerest ~~principal~~of ~~and~~ CDN$4610,~~582~~000 ($337,~~643~~305) ~~was allocated to interest repayment~~.

F-20

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. Short-term Notes (continued)

Revolving line of credit

On ~~February~~ February 1, 2024 Ethema Health Corporation, American Treatment Holdings Inc, and Evernia Health Center LLC entered into a secured revolving ~~line~~ line of credit agreement (“Agreement”) with Testing 123, LLC. The draw under the Agreement is limited to a maximum of 80% of ~~the~~ the Receivables balance as provided to the Lender, subject to the maximum borrowing under the Term Loan Agreement of $1,000,000. The ~~interest~~ interest on the term loan is 5% per month and the default interest rate is 10% per month. The revolving credit line is valid for a period of two years and each draw will have a maturity date that is two months from the draw date, with an origination fee of $1,000 per draw. ~~Each~~ Each loan may be prepaid at any time without penalty. The Company will pay a commitment fee of $40,000 to the borrower in common shares on on the completion of a public offering, unless no such offering takes place within a year, whereby the outstanding principal will be ~~increased~~ increased by $40,000. The revolving credit line is secured by all assets, tangible and intangible of the Company and its direct and indirect subsidiaries, American Treatment Holdings, Inc. and Evernia Health Center, LLC.

On September 4, 2025, the Company received proceeds of $70,000 on a line of credit advance of $73,500, repayable on September 15, 2025. This amount was repaid and the additional $3,500 was recorded as an amortization of debt discount.

During the year ended December 31, 2025, the Company repaid principal of $120,177 and interest of $103,323.

M. Baldassara and R. Baldassara

On May 22, 2025, the Company entered into promissory note agreements with each of M. Baldassara and R. Baldassara for an aggregate principal amount of $120,000 each, bearing interest at 10% per annum and repayable on December 31, 2025. The promissory notes are unsecured. The promissory notes were not repaid at December 31, 2025 and are in default.

Series R senior secured promissory notes

Between April 15, 2024 and May 10, 2024, the Company entered into securities purchase agreements with accredited investors whereby the ~~Company~~ Company issued 6 senior secured promissory notes with an aggregate issue price of $660,000 for gross proceeds of $600,000. The promissory notes bear interest at 7.5% per annum, interest is payable quarterly at an increasing rate of 3%, 6%, 9% and 12% of the principal outstanding. The notes ~~mature~~matured on March 31, 2025 and have not been repaid as yet, the Company is negotiating with the noteholders on extension and settlement options.

Between May 2, 2024 and May 10, 2024, the ~~company~~Company entered into exchange agreements with three investors, whereby the investors exchanged three series N notes with a principal amount outstanding of $450,000 for senior secured Series R promissory notes with an aggregate issue price of $495,000. The promissory notes bear interest at 7.5% per annum, interest is payable quarterly at an increasing rate of 3%, 6%, 9% and 12% of the principal outstanding. The notes ~~mature~~matured on March 31, 2025 and are in default and accruing interest at the default rate of 24% per annum. The Company is currently negotiating with the note holders.

~~12.~~During the ~~Promissory~~year ~~Note~~ended December 31, 2025, the Company paid interest of $43,896 on the Series R senior secured promissory notes.

On May 15, 2024, the Company entered into a Stock Purchase Agreement whereby it acquired the remaining 25% of ATHI representing 5,000,000 shares from the minority stockholder for gross proceeds of $1,100,000. The Company paid an initial deposit of $25,000 and on closing an additional $600,000. The Company issued a nonF-~~interest bearing promissory note for the remaining balance of $475,000, which promissory note is repayable in instalments of $10,000~~23 a month on each monthly anniversary date of the agreement for months one to eight (eight instalments) and months ten through seventeen (eight instalments), and payments of $157,500 on month nine and month eighteen, for a total of $475,000.

Schedule of promissory note
	December 31, 2024			December 31, 2023
Promissory note issued	$	475,000		$	—
Repayments		(70,000	)		—
	$	405,000		$	—
Disclosed as:
Current portion	$	405,000		$	—

13. Receivables funding

June 2, 2023 Funding

On June 2, 2023, the Company through its subsidiary, Evernia Health Center, LLC entered into a Receivables Sale Agreement with Bizfund.com (“Bizfund”), whereby $198,000 of the Receivables of Evernia were sold to Bizfund, for gross proceeds of $150,000, made up of a cash payment to the Company of $75,750 and the transfer of $74,250 of the January 19, 2023, outstanding principal to the June 2, 2023 funding agreement. The Company is obliged to pay 15.0% of the receivables until the amount of $198,000 is paid in full, with periodic repayments of $4,950 per week. The guarantor of the funding was the previous minority stockholder in ATHI.

The Company made weekly cash payments of $4,950 totaling $198,000 by March 12, 2024, thereby extinguishing the debt.

F-21

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1315. ~~Receivables~~Promissory ~~funding (continued)~~Note

~~September~~On May 15, ~~2023~~2024, ~~Funding~~the Company entered into a Stock Purchase Agreement whereby it acquired the remaining 25% of ATHI representing 5,000,000 shares from the minority stockholder for gross proceeds of $1,100,000. The Company paid an initial deposit of $25,000 and on closing an additional $600,000. The Company issued a non-interest bearing promissory note for the remaining balance of $475,000, maturing on November 15, 2025, which promissory note is repayable in instalments of $10,000 a month on each monthly anniversary date of the agreement for months one to eight (eight instalments) and months ten through seventeen (eight instalments), and payments of $157,500 on month nine and month eighteen, for a total of $475,000.

On September 15, 2023, the Company, through its subsidiary, Evernia Health Center, LLC entered into a Receivables Sale Agreement with Itria Ventures LLC (“Itria”), whereby $320,000 of the Receivables of Evernia were sold to Itria, for gross proceeds of $250,000. The Company also incurred fees of $3,000, resulting in net proceeds of $247,500. The Company was obliged to pay $6,667 per week until the amount of $320,000 was paid in full. The guarantor of the funding was the previous minority stockholder in ATHI.

Schedule of promissory note
	December 31, 2025			December 31, 2024
Opening balance	$	405,000		$	—
Promissory note issued		—			475,000
Repayments		(140,000	)		(70,000	)
	$	265,000		$	405,000

~~The~~During ~~Company~~the ~~made~~year ~~weekly~~ended ~~cash~~December 31, ~~payments~~2025, ofthe Company repaid $6140,~~667 totaling $320,~~000 by ~~August~~of ~~10,~~the ~~2024,~~principal ~~thereby~~outstanding ~~extinguishing~~on the ~~debt~~promissory note.

~~May 30, 2024 Funding~~F-24

~~On May 30, 2024, the Company, through its subsidiary, Evernia~~ETHEMA ~~Health~~HEALTH Center, LLC entered into a Receivables Sale Agreement with Fortunate Sons (“Fortunate”), whereby $375,000 of the Receivables of Evernia were sold to Fortunate for gross proceeds of $300,000. The Company also incurred fees of $5,000, resulting in net proceeds of $295,000. The Company is obliged to pay $10,750 per week commencing 4 weeks after the agreement was entered into until the amount of $375,000 is paid in full.CORPORATION

~~The proceeds of the receivables funding was used to acquire~~NOTES ~~the~~TO ~~assets~~THE ofCONSOLIDATED ~~Boca~~FINANCIAL ~~Cove Detox.~~STATEMENTS

~~The~~16. ~~Company~~Funding ~~has repaid $118~~arrangements,~~250 and~~ ~~the balance outstanding as of December 31, 2024 was $247,998,~~ net ~~of unamortized debt discount of $8,752.~~

~~August~~ May 30, 2024 ~~Funding~~ funding

On ~~August~~ May 30, 2024, the Company, through its subsidiary, Evernia Health Center, LLC (“Evernia”), entered into a ~~Receivables~~financing ~~Sale Agreement~~ arrangement with ~~Itria~~Fortunate ~~Ventures~~Sons ~~LLC~~ (“~~Itria~~Fortunate”), whereby it received proceeds of $~~312~~300,~~500 of~~000. ~~the Receivables~~The ofCompany ~~Evernia~~also ~~were~~incurred ~~sold~~fees toof ~~Itria~~$5,000, ~~for~~resulting in ~~gross~~net proceeds of $~~150~~295,000., ~~The~~in ~~Company~~addition ~~also~~the Company incurred ~~fees~~an additional fee of $275,000 related to this funding, resulting in ~~net~~total ~~proceeds~~fees and discount of $~~148~~155,000 which was amortized over the original term of the funding. The Company is obliged to pay $410,~~808~~750 per week commencing 4 weeks after the agreement was entered into until the amount of $~~187~~375,~~500~~000 is paid in full. The maturity date of this funding was February 24, 2025, however the original payment schedule was not adhered to, and we are in constant communication with Fortunate regarding repayment of the balance.

The ~~Company~~discount ~~made~~and ~~weekly~~fees ~~cash~~totaling ~~payments of~~ $8155,~~013 totaling~~000 associated with this funding was capitalized and was being amortized using the effective interest method over the initial repayment period. The Company has repaid $~~136~~225,~~218~~750 since issuance and the balance outstanding as of December 31, ~~2024~~2025 was $~~153~~149,~~877, net of unamortized debt discount of $22,405~~250.

~~October 9~~August 30, 2024 ~~Funding~~funding

On ~~October 9~~August 30, 2024, the Company, through its subsidiary, Evernia ~~Health Center~~, ~~LLC~~ entered into a ~~Receivables~~financing ~~Sale~~arrangement ~~Agreement~~ with Itria Ventures LLC (“Itria”), whereby ~~$187,500 of~~it ~~the Receivables~~received ~~of Evernia were sold to Itria, for gross~~ proceeds of $~~150~~247,000., ~~The~~net ~~Company~~of ~~also~~discount ~~incurred~~and fees of $265,~~000, resulting in net proceeds of $148,000~~500. The Company iswas obliged to pay $48,~~808~~ 013 per week until the amount of $~~187~~312,500 iswas paid in full, the maturity date of this funding was June 3, 2025.

The discount and fees totaling $65,500 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $48,~~808~~013 totaling $52232,~~885~~ 372 since issuance and settled the ~~balance~~ outstanding asbalance of ~~December~~$88,141 on 31March 25, ~~2024~~2025, ~~was~~partially ~~$114~~out of the proceeds of an additional financing arrangement entered into on March 25,~~372~~ 2025, ~~net~~thereby extinguishing the debt and accelerating the amortization of ~~unamortized~~the ~~debt~~remaining discount ofand ~~$20,243~~fees.

~~14.~~October 9, ~~Government~~2024 ~~assistance loans~~funding

On October 9, 2024, the Company, through its subsidiary Evernia, entered into a financing arrangement with Itria, whereby it received proceeds of $148,000, net of discount and fees of $39,500. The Company was obliged to pay $4,808 per week until the amount of $187,500 was paid in full. The maturity date of this funding was July 10, 2025.

The discount and fees totaling $39,500 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $4,808 totaling $57,692 and settled the outstanding balance of $119,308, net of an early settlement discount of $10,500, thereby extinguishing the debt.

January 6, 2025 funding

On January 6, 2025, the Company, through its subsidiary Evernia, entered into a financing arrangement with Itria, whereby it received proceeds of $247,000, net of discount and fees of $60,500. The Company was obliged to pay $7,885 per week until the amount of $307,500 was paid in full. The maturity date of this funding was October 6, 2025.

The discount and fees totaling $60,500 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $7,885 totaling $157,692 and settled the outstanding balance with a payment of $157,692 out of the proceeds of the May 28, 2025 funding, resulting in an overpayment of $7,885, which was refunded on August 12, 2025. The settlement resulted in the extinguishment of the debt and the full amortization of the $60,500 debt discount.

February 13, 2025 funding

On February 13, 2025, the Company, through its subsidiary Evernia, entered into financing arrangement with CFG Merchant Solutions, LLC (“CFG”), whereby it received proceeds of $124,375, net of discount and fees of $41,875. The Company was obliged to pay $3,778 per week until the amount of $166,250 was paid in full. The maturity date of this funding is December 19, 2025.

The discount and fees totaling $41,875 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $3,778 totaling $166,250, thereby extinguishing the debt and the full amortization of the debt discount.

February 18, 2025 funding

On February 18, 2025, the Company, through its subsidiary Evernia, entered into a financing arrangement with Purpletree Funding, LLC (“Purpletree”), whereby it received proceeds of $74,250, net of discount and fees of $25,500. The Company was obliged to pay $3,563 per week until the amount of $99,750 was paid in full. The maturity date of this funding was September 2, 2025.

The discount and fees totaling $25,500 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $3,563 totaling $99,750, thereby extinguishing the debt and the full amortization of the debt discount.

March 25, 2025 funding

On March 25, 2025, the Company, through its subsidiary Evernia, entered into a financing arrangement with Itria, whereby it received proceeds of $222,250, net of discount and fees of $70,250. The Company was obliged to pay $7,500 per week until the amount of $292,500 was paid in full. The Company used $88,141 of the proceeds to settle the August 30, 2024 funding. The maturity date of this funding was December 24, 2025.

The discount and fees totaling $70,250 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $7,500, totaling $157,500 and settled the outstanding balance with a payment of $147,169 out of the proceeds of the August 20, 2025, resulting in an overpayment of $12,869. This refund was received in the first quarter of 2026.

F-25

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16.

Funding arrangements, net (continued)

April 9, 2025 funding

On April 9, 2025, the Company, through its subsidiary ARIA Kentucky entered into a financing arrangement with Itria, whereby it received proceeds of $494,500, net of discount and fees of $130,500. The Company is obliged to pay $12,019 per week until the amount of $625,000 is paid in full. The maturity date of this funding is April 14, 2026.

The discount and fees totaling $130,500 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $12,019, totaling $204,327 and settled the outstanding balance with a payment of $252,404, out of the proceeds of the November 25, 2025 funding, resulting in an overpayment of $12,019. The refund is being discussed with Itria and may be incorporated into the November 25, 2025 funding.

May 28, 2025 funding

On May 28, 2025, the Company, through its subsidiary Evernia, entered into a financing arrangement with Itria, whereby it received proceeds of $296,500, net of discount and fees of $81,500. The Company used $157,692 of the proceeds to settle the January 6, 2025 funding. The Company is obliged to make weekly cash payments of $7,269 until the amount of $378,000 is paid in full. The maturity date of this funding is May 28, 2026.

The discount and fees totaling $81,500 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $7,269, totaling $218,077 and the balance outstanding at December 31, 2025 was $145,011, net of debt discount of $14,913.

June 19, 2025 funding

On June 19, 2025, the Company, through its subsidiary ARIA Kentucky, entered into a financing arrangement with Itria, whereby it received proceeds of $97,500, net of discount and fees of $27,500. The Company was obliged to pay $3,205 per week until the amount of $125,000 was paid in full. The maturity date of this funding is March 19, 2026.

The discount and fees totaling $27,500 associated with this funding was capitalized and was being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $3,205, totaling $44,872 and settled the outstanding balance of $83,333 out of the proceeds of the September 30, 2025 funding, resulting in an overpayment of $3,205 which was refunded to the company on November 24, 2025, thereby extinguishing the debt.

August 20, 2025 funding

On August 20, 2025, the Company, through its subsidiary Evernia, entered into a funding arrangement with Itria, whereby it received proceeds of $346,000, net of discount and fees of $105,500, The Company used $147,869 of the proceeds to repay the March 25, 2025 funding. The Company is obliged to pay $8,683 per week until the amount of $451,500 is paid in full. The maturity date of this funding is August 20, 2026.

The discount and fees totaling $105,500 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $8,683, totaling $164,971 and the balance outstanding at December 31, 2025 was $241,083, net of debt discount of $45,445.

September 30, 2025 funding

On September 30, 2025, the Company, through its subsidiary ARIA Kentucky, entered into a financing arrangement with Itria, whereby it received proceeds of $247,000, net of discount and fees of $65,500. The Company used $83,333 of the proceeds to settle the June 19, 2025 funding. The Company is obliged to pay $6,010 per week until the amount of $312,500 was paid in full. The maturity date of this funding is October 1, 2026.

The discount and fees totaling $65,500 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $6,010, totaling $72,115 and the balance outstanding at December 31, 2025 was $201,901, net of discount of $38,484.

November 25, 2025 funding

On November 25, 2025, the Company, through its subsidiary ARIA Kentucky, entered into a financing arrangement with Itria, whereby it received proceeds of $489,375, net of discount and fees of $135,625. The Company used $252,404 of the proceeds to settle the April 9, 2025 funding. The Company is obliged to pay $12,019 per week until the amount of $625,000 is paid in full. The maturity date of this funding is November 24, 2026.

The discount and fees totaling $135,625 associated with this funding was capitalized and is being amortized using the effective interest method over the repayment period. The Company made weekly cash payments of $12,019, totaling $60,096 and the balance outstanding at December 31, 2025 was $453,475, net of discount of $111,429.

F-26

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17.

Government assistance loans

On May 3, 2021, ARIA was granted a government assistance loan in the aggregate principal amount of $157,367. The loan is forgivable if the Company demonstrates that the proceeds were used for expenses such as employee costs during the pandemic. Should the loan not be forgiven, interest is payable on the loan at the rate of 1% per annum and the principal is repayable and interest is payable over an 18-month period.

On September 21, 2022, ARIA received partial forgiveness of the government assistance loan of $104,368, the balance of the loan plus accrued interest is due and payable. The maturity date of PPP loans was changed to five years from issuance on June 5, 2020 by the federal government. The maturity date of the loan is May 3, 2026, which is in line with the repayment schedule on the loan. On December 30, 2022, the ~~Company~~ Company sold ARIA to its Chairman and CEO and agreed to assume the repayment of the government assistance loan. As of December 31, ~~2024~~2025, ~~the~~ the balance outstanding, including interest thereon was $21,~~237~~448.

~~F-22~~18. Related party payables

Schedule of related party payable
	December 31,			December 31,
	2025			2024
Advance from related party
Eileen Greene
Principal opening balance	$	273,461		$	—
Principal advance made		—			285,000
Repayments		—			(11,539	)
		273,461			273,461
Debt discount opening balance		(8,495	)		—
Debt discount at inception		—			(35,000	)
Amortization of debt discount		8,495			26,505
		—			(8,495	)
Total Related party advance	$	273,461		$	264,966

Related party payables
Shawn E. Leon	$	97,283		$	144,353
Eileen Greene		610,656			488,965
ERC Investments, LLC		334,629			—
New Journey, LLC		61,890			—
JDE Properties, LLC		50,646			—
Viking Assets, LLC		113			—
Total related party payables	$	1,155,217		$	633,318

Note payable – related parties
Loan advanced by ERC Investments, LLC	$	33,767		$	—
Accrued interest		2,504			—
	$	36,271		$	—

Loan advanced by New Journey, LLC	$	47,974		$	—
Accrued interest		3,262			—
	$	51,236		$	—

Total notes payable – Related party	$	87,507		$	—

Related party advance – Eileen Greene

On July 4, 2024, Ms. Greene advanced the Company $250,000 with an original issue discount of $35,000, totaling $285,000. The amount was being repaid in instalments of $5,769, however the Company paused repayment of this advance until the Company has the cash flow to make future payments. The advance is not expected to be repaid during the current financial year.

At December 31, 2025 and December 31, 2024, the Company owed Eileen Greene, the spouse of its CEO, Shawn Leon, related party advances of $273,461 and $264,966, net of unamortized discount, respectively.

F-27

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1518. Related party payables (continued)

Schedule of related party payable
	December 31,			December 31,
	2024			2023
Related party payables
Shawn E. Leon	$	144,353		$	61,267
Leon Developments Ltd.		—			1,092,701
Eileen Greene		488,965			1,418,324
Total related party payables	$	633,318		$	2,572,292
Related party advance
Eileen Greene
Principal outstanding	$	285,000		$	—
Repayments		(11,539	)		—
		273,461			—
Debt discount at inception		(35,000	)		—
Amortization of debt discount		26,505			—
		(8,495	)		—
Total Related party advances	$	264,966		$	—

Related party payables

Shawn E. Leon

At December 31, 2024 and December 31, 2023, the Company had a payable to Shawn Leon of $144,353 and $61,267, respectively. Mr. Leon is a director and CEO of the Company. The balances receivable and payable are non-interest bearing and have no fixed repayment terms.

During the years ended December 31, 2024 and 2023, Mr. Leon forfeited management fees due to him.

During July 2024, the related party payable of $1,092,701 owing to Leon Developments and $500,000 of the related party payable to Eileen Greene was assigned by the respective parties to Mr. Leon.

On July 12, 2024, Mr. Leon converted $1,500,000 of the related party payable into 3,000,000,000 shares of common stock at a conversion price of $0.0005 per share.

On September 27, 2024, Mr. Leon converted $6,000 of the related party payable into 600,000 shares of Series A Preferred stock at a conversion price of $0.01 per share.

During the year ended December 31, 2025, Mr. Leon earned management fees of $120,000, forfeiting 50% of the fee due to him. In 2024 Mr. Leon forfeited ~~Developments~~the $240,000 ~~Ltd~~management fees due to him.

~~Leon~~At ~~Developments~~December is31, ~~owned~~2025 byand ~~Shawn~~December ~~Leon~~31, 2024, the Company’s ~~CEO~~had ~~and~~a ~~director.~~payable Asto Shawn Leon of ~~December~~$97,283 31and $144,353, ~~2024~~respectively. ~~and~~Mr. ~~December~~Leon ~~31,~~is ~~2023,~~a director and CEO of the Company ~~owed~~. ~~Leon~~The ~~Developments,~~balances ~~Ltd~~owing to Mr., $0 Leon are repayable on demand and ~~$1,092,701, respectively~~ the repayment date is uncertain.

During July 2024, the related party payable of $1,092,701 owing to Leon Developments was assigned by Leon Developments to Mr. Leon.

Eileen Greene

During July 2024, Ms. Greene assigned $500,000 of the Related party payable to her to Mr. Leon.

On July 12, 2024, Ms. Greene converted $500,000 of the related party payable into 1,000,000,000 shares of common stock at a conversion price of $0.0005 per share.

OnThe ~~July~~amounts 4,owing ~~2024,~~to Ms. Greene ~~advanced~~are ~~the~~repayable ~~Company~~on ~~$250,000~~demand ~~with an original issue discount of $35,000, totaling $285,000. The amount is being repaid in instalments of $5,769 as~~ and ~~when~~ the ~~Company~~repayment ~~has~~date ~~the cash flow to make the payments, the loan~~ is ~~expected to be fully repaid in June 2025 or earlier depending on cash flow~~uncertain.

At December 31, 2025 and December 31, 2024, the Company owed Eileen Greene, the spouse of its CEO, Shawn Leon, related party payables of $~~488~~610,~~965~~ 656 and ~~related~~ ~~party advances of~~ $~~264~~488,~~966~~965, ~~net of unamortized debt discount of $8,495~~respectively.

AtERC ~~December 31~~Investments, ~~2023, The Company owed Eileen Greene, related party payables of $1,418,324.~~LLC

~~The~~As ~~amounts~~disclosed ~~owing~~in note 4 above, a liability owed to ~~Ms.~~ERC, ~~Greene~~from ~~are~~Edgewater ~~non-interest~~was ~~bearing~~assumed ~~and~~by ~~has~~the noCompany, ~~fixed~~the ~~repayment~~aggregate ~~terms~~liability assumed by the Company on January 9, 2025 was $720,231.

~~F-23~~The Company pays base rent of $76,000 per month to ERC for three properties located in Morehead Kentucky.

Effective October 1, 2025, the Company and ERC entered into a rental abatement agreement, whereby the rental for 425 Clinic Drive and 1111 US 60 W was abated for the three months ended December 31, 2025 by $60,000 and $90,000, respectively. The rental abatement is a once off concession granted to the Company during its first year of operations in Kentucky, while it concentrated on increasing its patient census numbers and to reduce the amount of unpaid rent due to ERC at year end.

At December 31, 2025, the balance owing to ERC was $334,629.

New Journey, LLC

As disclosed in note 4 above, a liability owed to New Journey, LLC from Edgewater was assumed by the Company, the aggregate liability assumed by the Company on January 9, 2025 was $46,615.

The Company pays rent of $5,500 per month to New Journey for two properties located in Morehead Kentucky.

At December 31, 2025, the balance owing to New Journey was $61,890.

JDE Properties, LLC

As disclosed in note 4 above, a liability owed to JDE from Edgewater was assumed by the Company, the aggregate liability assumed by the Company on January 9, 2025 was $37,525.

The Company pays rent of $5,000 per month to JDE for two properties located in Morehead Kentucky.

At December 31, 2025, the balance owing to JDE was $50,646.

Viking Assets, LLC

Viking Assets is owned by BH Properties, LLC and currently owns three properties, two of which are located in Paducah, Kentucky and a third in Morehead, Kentucky.

The Company pays rent of $14,000 per month to Viking Assets for two properties located in Paducah, Kentucky.

At December 31, 2025, the balance owing to Viking Assets was $113.

F-28

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1518. Related party payables (continued)

~~Leonite~~Note ~~Capital,~~payable ~~LLC~~– ~~and~~Related ~~Leonite Fund I, LLP~~party

~~Leonite~~ERC ~~Capital is considered a related party due to its previous investment of $700~~Investments,~~000~~ in Series A Preferred stock interest in CCH, which was previously a wholly owned subsidiary of the Company, and its previous investment of $400,000 in Series B Preferred stock of the Company, as of December 31, 2022.LLC

~~Prior~~BH Properties, through its subsidiaries, toERCI, ~~the~~NJ ~~disposal~~and JDE, secured funding of ~~CCH~~$2,300,000 to ~~Leonite~~settle ~~Capital~~certain onobligations ~~June~~in ~~30,~~those ~~2023,~~subsidiaries ~~and~~as ~~the~~well ~~simultaneous~~as ~~cancellation~~obligations related to the acquisition of the ~~Series~~assets Bof ~~Preferred~~Edgewater ~~stock~~by asARIA ~~discussed below,~~Kentucky. ~~the~~The ~~accrued~~obligations ~~dividends~~related onto the ~~CCH~~acquisition ~~Series~~of Athe ~~Preferred~~assets ~~shares~~of ~~was~~Edgewater amounted to $~~184~~33,~~545~~767 and ~~the~~bears ~~accrued~~interest ~~dividends~~at 7.5% per annum calculated on a 360-day year and is secured by the ~~Series~~properties Bowned ~~Preferred~~by ~~shares~~BH Properties ~~was~~and ~~$61,184~~its subsidiaries.

OnAt ~~June 30~~December 31, ~~2023~~2025, the ~~Company~~balance ~~entered into~~owing anto ~~exchange~~ERCI ~~agreement~~was ~~with Leonite Capital whereby it exchanged the 400,000 Series B shares with a value of~~ $~~400~~36,~~000 plus accrued dividends thereon of $61,184 for its entire stockholding in its property owning subsidiary, Cranberry Cove Holdings~~271. ~~The Series B shares and the accrued dividends thereon were extinguished and cancelled upon consummation of the transaction.~~

~~Due~~New toJourney ~~the related party nature of the transaction~~Investments, ~~the net result of the disposal of $1,334,885 and the $700,000 of the CCH Series A Preferred shares, totaling $2,034,885, was recorded as a credit to additional paid-in-capital.~~LLC

InBH Properties, through its subsidiaries, ~~addition~~ERCI, ~~due~~NJ and JDE, secured funding of $500,000 to ~~the~~settle obligations related ~~party~~to ~~nature~~the acquisition of ~~the~~certain ~~transaction,~~properties ~~the~~into ~~cancellation~~NJ and certain assets of ~~the~~Edgewater ~~Series~~by BARIA ~~Preferred~~Kentucky. ~~stock,~~The ofobligations ~~$400,000~~related ~~and~~to the ~~dividends thereon~~acquisition of ~~$61,184,~~the ~~totaling~~assets of Edgewater amounted to $~~461~~47,~~184,~~974 and ~~was~~bears ~~recorded~~interest asat an6.875% ~~extinguishment~~per ofannum ~~debt~~calculated ~~reflected~~on ina ~~additional paid~~360-~~in-capital~~day year and is secured by the properties owned by BH Properties and its subsidiaries.

~~On August~~At 4December 31, ~~2023~~2025, the ~~company~~balance ~~repaid~~owing ~~Leonite Capital $1,449,000 consisting of repayments of short-term convertible notes of $995,257, promissory notes of $420,069, additional penalty on settlement of $5,236 and a personal loan by Leonite~~ to ~~Shawn~~NJ ~~Leon~~was of $2851,~~438, which repayment reduced the related party payable to Shawn Leon, as disclosed above~~236.

All related party transactions occur in the normal course of operations and in terms of agreements entered into between the parties.

1619. Stockholder’s deficit

Common shares

Authorized and outstanding

The Company has authorized 10,000,000,000 shares with a par value of $0.01 per share. The company has issued 7,~~729~~726,~~053~~283,805 and 37,729,053,805 shares of common stock at December 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

On July 12, 2024, the Company issued 4,000,000,000 shares of common stock to Mr. Shawn Leon, the company CEO and his spouse, Ms. Eileen Greene, both related parties, for the conversion of $2,000,000 of related party payables, see note 1518 above.

On November 17, 2024, the Company entered into a subscription agreement with a party related to Shawn Leon, whereby 165,000,000 shares of common stock were subscribed for at $0.0012 per share, for gross proceeds of $198,000. These shares have not been issued yet and the proceeds of $198,000 is recorded as a Share subscription liability until such time as the common shares are issued.

bOn February 18, 2025, the Company cancelled 2,770,000 shares which were acquired by Mr. ~~Series~~Leon, Athe ~~Preferred~~Company’s CEO from several individuals. Mr. Leon cancelled these shares.

Series A preferred shares

Authorized, issued and outstanding

The Company has authorized 10,000,000 Series A preferred shares with a par value of $0.01 per share. The company ~~has~~ has issued and outstanding 4,765,000 ~~and 4,000,000~~ Series A Preferred shares at December 31, ~~2024~~2025 and December 31, ~~2023~~ 2024, respectively.

On September 27, 2024, the Company issued 600,000 shares of Series A Preferred stock to Mr. Shawn Leon for the conversion of $6,000 of related party payables, see note 1518 above.

On November 17, 2024, 165,000 shares of Series A Preferred stock was sold to a relative of Mr. Leon for gross proceeds of $1,650.

c. Series B ~~Preferred~~preferred shares

Authorized and outstanding

The Company has authorized 400,000 Series B preferred shares with a par value of $1.00 per share. The company has no issued and outstanding Series B Preferred shares at December 31, ~~2024~~2025 and December 31, ~~2023~~2024.

~~The Series B preferred shares were senior secured and were mandatorily redeemable by the Company on July 1, 2021, and were originally classified as mezzanine debt~~d. ~~These~~Stock ~~Series B preferred shares meet the definition of liabilities in terms of ASC 480- debt and are no longer contingently convertible, due to the fact that the redemption date has passed.~~options

OnOur ~~June~~board ~~30,~~of ~~2023,~~directors adopted the ~~Company~~Greenstone ~~entered~~Healthcare ~~into~~Corporation an2013 ~~exchange~~Stock ~~agreement~~Option Plan (the “Plan”) to promote our long-term growth and profitability by (i) providing our key directors, officers and employees with ~~Leonite~~incentives ~~Capital~~to ~~whereby~~improve itstockholder ~~exchanged~~value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the ~~shares~~best inavailable ~~its~~persons ~~wholly~~for ~~owned~~positions ~~subsidiary~~of substantial responsibility. A total of 10,000,000 shares ~~CCH~~of our common stock have been reserved for issuance upon exercise of options granted pursuant to the ~~return~~Plan. The Plan allows us to grant options to our employees, officers and ~~cancellation~~directors and those of ~~the~~our subsidiaries, ~~Series~~provided Bthat ~~preferred~~only ~~shares,~~our ~~together~~employees ~~with~~and ~~the~~those ~~dividends~~of ~~accrued~~our ~~thereon.~~subsidiaries ~~Refer~~may receive incentive stock options under the Plan. We have tono ~~note~~outstanding 4options ~~above~~at December 31, 2025 under the Plan.

F-2429

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1619. Stockholder’s deficit (continued)

d. Stock options

Our board of directors adopted the Greenstone Healthcare Corporation 2013 Stock Option Plan (the “Plan”) to promote our long-term growth and profitability by (i) providing our key directors, officers and employees with incentives to improve stockholder value and contribute to our growth and financial success and (ii) enable us to attract, retain and reward the best available persons for positions of substantial responsibility. A total of 10,000,000 shares of our common stock have been reserved for issuance upon exercise of options granted pursuant to the Plan. The Plan allows us to grant options to our employees, officers and directors and those of our subsidiaries, provided that only our employees and those of our subsidiaries may receive incentive stock options under the Plan. We have no issued options at December 31, 2024 under the Plan.

Warrants

All of the warrants have cashless exercise terms whereby in-the-money warrants may be exercised by reducing the number of shares issued in terms of the warrant exercise to offset the proceeds due on the exercise.

All of the warrants have price protection features whereby any securities issued subsequent to the date of the warrant issuance date, were issued at a lower price, or have conversion features that are lower than the current exercise price, or were converted at a lower price, or are exercisable at a lower price, to the current warrant exercise price, will result in the exercise price of the warrant being set to the lower issue, conversion or exercise price.

~~Warrant~~ A ~~exchange~~summary ~~agreement~~of the Company’s warrant activity during the period from January 1, 2024 to December 31, 2025 is as follows:

On June 28, 2023 the Company entered into a Warrant Exchange Agreement with Leonite that exchanged a Warrant outstanding to Leonite originally issued on June 12, 2020 for a new Warrant dated June 30, 2023. The substantial changes to the warrant affect the number of shares in the warrant, the exercise price and the term. The original warrant provided for Leonite to have a continuing right to purchase a 20% share of the outstanding common shares until it expired on June 12, 2025 which was originally set at 326,286,847 shares. The new warrant is exercisable for 745,810,761 shares, 20% of the current number of common shares outstanding, with no allowance for adjustment, except normal adjustments due to splits or consolidations, until the new expiry date of June 30, 2027. The exercise price in the original warrant was $0.10, with allowance for adjustments, which when applied resulted in an exercise price of $0.0004 per share. The exercise price on the new warrant is $0.001 and is only adjustable if the Company issues any shares at a price less than the exercise price during the warrant period except for any issuance of shares to the Company’s president or related parties on any debt outstanding to those parties as of June 30, 2023, and limited to a conversion price of $0.0005 per share. The Warrant Exchange agreement was conditional on Leonite receiving a full payment of all of its outstanding loans originally set as by July 20, 2023. This date was extended and all of the notes were repaid on August 4, 2023. Leonite held several notes at June 30, 2023, some of which were convertible into shares at variable rates, see notes 9 and 10 above. The total amount repaid to settle all of the outstanding liabilities was $1,449,000.

No. of shares

Exercise price
per share

Weighted
average exercise
price

Outstanding as of January 1, 2024

1,022,376,420

$0.001 to $0.00205

0.001284

Granted

–

Forfeited/cancelled

–

Exercised

–

Outstanding as of December 31, 2024

1,022,376,420

$0.001 to $0.00205

0.001284

Granted

–

Forfeited/cancelled

(145,454,547

)

(0.00205

)

0.00205

Exercised

–

Outstanding as of December 31, 2025

876,921,873

$0.001 to $0.00205

0.001157

The ~~replacement~~following ~~warrants~~table ~~were~~summarizes ~~valued~~information ~~effective~~about ~~June 30, 2023, the effective date of issuance of the~~ warrants, asoutstanding ~~the~~at ~~difference~~December ~~between the fair value of the original warrant exercisable for 326~~31,~~286,847~~ ~~shares of common stock and the fair value of the replacement four-year warrant exercisable for 745,810,861 shares of common stock at an exercise price of $0.001 per share.~~2025:

The warrants were valued using a Black-Scholes valuation model. The following assumptions were used in the valuation model:

Schedule of warrants outstanding
	Warrants outstanding						Warrants exercisable
Exercise price	No. of shares		Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price
$0.001000		745,810,761		1.50	$	0.001000		745,810,761	$	0.001000
$0.002050		131,111,112		0.10		0.002050		131,111,112		0.002050
		876,921,873		1.29	$	0.001157		876,921,873	$	0.001157

Schedule of assumptions
	Year ended December 31, 2023
Exercise price	$	0.001
Risk free interest rate		4.31 to 4.87	%
Expected life of options		2 to 4 years
Expected volatility of underlying stock		205.5 to 243.0	%
Expected dividend rate		0	%

All of the warrants outstanding at December 31, 2025 are vested. The warrants outstanding at December 31, 2025 have an intrinsic value of $0.

~~F-25~~20. Segment information

~~ETHEMA~~The ~~HEALTH~~Company ~~CORPORATION~~provides rehabilitation services to customers in the U.S. These services are provided to customers at its Evernia, Addiction Recovery Institute of America facility located in Florida and its Addiction Recovery Institute of America, located in Kentucky. These facilities are regarded as one reporting segment.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

16. Stockholder’s deficit (continued)

e. Warrants (continued)

A summary of the Company’s warrant activity during the period from January 1, 2023 to December 31, 2024 is as follows:

Schedule of warrant activity

No. of shares

Exercise price per share

Weighted average exercise price

Outstanding as of January 1, 2023

602,852,506

$0.000675 to $0.00205

0.001306

Granted

745,810,761

0.001

Forfeited/cancelled

(326,286,847

)

0.000675

Exercised

–

Outstanding as of December 31, 2023

1,022,376,420

$0.001 to $0.00205

0.0012840

Granted

–

Forfeited/cancelled

–

Exercised

–

Outstanding as of December 31, 2024

1,022,376,420

$0.001 to $0.00205

0.0012840

The following table summarizes information about warrants outstanding at December 31, 2024:

Schedule of warrants outstanding	Schedule of warrants outstanding
		Warrants outstanding						Warrants exercisable
Exercise price		No. of shares		Weighted average remaining years		Weighted average exercise price		No. of shares		Weighted average exercise price
$0.001			745,810,761		2.50	$	0.001000		745,810,761	$	0.001000
$0.002050			276,565,659		1.01		0.002050		276,565,659		0.002050
			1,022,376,420		2.09	$	0.001284		1,022,376,420	$	0.001284

All of the warrants outstanding at December 31, 2024 are vested. The warrants outstanding at December 31, 2024 have an intrinsic value of $0.

17. Segment information

The Company operates and manages its business as one reportable and operating segment, since the disposal of CCH on June 30, 2023, the Company only provides rehabilitation services to customers, these services are provided to customers at its Evernia, Addiction Recovery Institute of America facility.

Prior to that date, the Company had two reportable segments and also derived rental income from the property owned by its CCH subsidiary.

The Company’s CODM reviews financial information presented and decides how to allocate resources based on net operating income (loss). Net income (loss) is used for evaluating financial performance.

Significant segment expenses include Salaries and wages, rent expense, professional fees, management fees, food expenses, marketing and advertising expenses, insurance expenses and depreciation and amortization expenses. Other operating expenses include all remaining costs ~~necessary~~ necessary to operate our business, which primarily include other administrative expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:.

F-2630

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1720. Segment information (continued)

The segment operating results of the one reportable segment for the year ended December 31, 2025 and 2024 is disclosed as follows:

Schedule of segment information
		Year ended December 31, 2024
		In Patient Services
Revenue	$		6,017,204
Salaries and wages			3,072,654
Rent expense			1,304,127
Professional fees			955,801
Management fees			—
Food expenses			308,660
Marketing and advertising expenses			371,229
Insurance expenses			146,357
Depreciation and amortization expense			466,952
Other operating expenses			724,553
Operating loss			(1,333,129	)
Other (expense) income
Other income			110,000
Other expense			(1,160	)
Interest income			2,292
Interest expense			(565,343	)
Amortization of debt discount			(416,120	)
Foreign exchange movements			37,523
Net (loss) before income taxes	$		(2,165,937	)

Detox and rehab Services

The segment operating results of the reportable segments for the year ended December 31, 2023 is disclosed as follows:

Schedule of segment information
	Year ended December 31, 2025			Year ended December 31, 2024

Revenues	$	18,764,817		$	6,017,204

Salaries and wages		9,547,395			3,072,654
Rent expense		3,013,306			1,304,127
Professional fees		1,597,072			955,801
Client related expenses		1,452,637			499,430
Marketing and advertising expenses		596,993			371,229
Insurance expenses		470,235			146,357
Property expenses		928,167			238,422
Management fees		120,000			—
Other operating expenses		486,868			295,361
Depreciation and amortization		812,279			466,952
Total operating expenses		19,024,952			7,350,333

Operating income (loss)		(260,135	)		(1,333,129	)

Other Income (expense)
Other income		66,107			110,000
Other expense		—			(1,160	)
Interest income		3,884			2,292
Interest expense		(1,388,074	)		(565,343	)
Amortization of debt discount		(616,072	)		(416,120	)
Foreign exchange movements		(36,023	)		37,523
Net loss before income taxes	$	(2,230,313	)	$	(2,165,937	)

	Year ended December 31, 2023
	Rental Operations			In-Patient services			Total
Revenue	$	180,522		$	5,164,454		$	5,344,976
Salaries and wages		—			2,656,267			2,656,267
Rent expense		—			614,793			614,793
Professional fees		—			707,413			707,413
Management fees		185,503			182,500			368,003
Food expenses		—			260,921			260,921
Marketing and advertising expenses		—			142,462			142,462
Insurance expenses		—			150,478			150,478
Depreciation and amortization expense		59,921			438,998			498,919
Other operating expenses		103			487,537			487,640
Operating loss		(65,005	)		(476,915	)		(541,920	)
Other (expense) income
Intercompany gain (loss) on debt forgiveness		3,481,332			(3,481,332	)		—
Gain on disposal of property		—			2,484,172			2,484,172
Loss on debt extinguishment		—			(277,175	)		(277,175	)
Extension fee on property purchase		—			(140,000	)		(140,000	)
Penalty on convertible notes		—			(34,688	)		(34,688	)
Interest income		—			676			676
Interest expense		(95,464	)		(404,762	)		(500,226	)
Amortization of debt discount		—			(281,354	)		(281,354	)
Foreign exchange movements		(81,033	)		(13,999	)		(95,032	)
Net income (loss) before taxes	$	3,239,830		$	(2,625,377	)	$	614,453

21.

Net (loss) income per common share

FFor the years ended December 31, 2025 and 2024, the following warrants exercisable for shares and convertible securities convertible into a number of shares were excluded from the computation of diluted net loss per share as the results would have been anti-27dilutive.

Schedule of diluted net income (loss) per common share
	Year ended December 31, 2025		Year ended December 31, 2024
Shares issuable upon exercise of warrants		876,921,873		1,022,376,420
Shares issuable on conversion of convertible notes		130,016,092		180,960,977
		1,006,937,965		1,203,337,397

F-31

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1822. ~~Net~~Commitments ~~(loss)~~and ~~income per common share~~contingencies

For the year ended December 31, 2024, the following warrants exercisable for shares and convertible securities convertible into a number of shares were excluded from the computation of diluted net loss per share as the results would have been anti-dilutive.

Schedule of diluted net loss per share
	Year ended December 31, 2024
Shares issuable upon exercise of warrants		1,022,376,420
Shares issuable on conversion of convertible notes		180,960,977
		1,203,337,397

For the year ended December 31, 2023, the computation of basic and diluted earnings per share is calculated as follows:

Schedule of earnings per share basic and diluted			Number of		Per share
	Amount		shares		amount
Basic earnings per share
Net income per share available for common stockholders	$	1,129,374		3,729,053,805	$	0.00
Effect of dilutive securities
Warrants		—		—		—
Convertible debt		198,684		174,617,879		0.00
Diluted earnings per share
Net income per share available for common stockholders	$	1,328,058		3,903,671,684	$	0.00

F-28

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. Commitments and contingencies

Options granted to purchase shares in ATHI

On ~~July~~ July 12, 2020, the Company entered into a five -year option agreement with Leonite Capital LLC (“Leonite”) and other investors (collectively the “Transferees”). The Company agreed to sell to Leonite a portion of the total outstanding shares of ATHI from the shares of ATHI held by the company. The Company provided Leonite an option to purchase 4,000,000 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $400), based on the advances that Leonite made to the Company totaling $396,000. Leonite shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Leonite to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.

On ~~September~~ September 14, 2020, the Company entered into a five -year option agreement with Ed Blasiak (“Blasiak”) whereby the Company agreed to sell to Blasiak a portion of the total outstanding shares of ATHI. The Company provided Blasiak an option to purchase 571,428 ~~shares~~ shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $57), based on the advances ~~that~~ that Blasiak made to the Company totaling $50,000. Blasiak shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Blasiak to the Company, thereafter the option will be reduced to 50% of the shares exercisable under ~~the~~ the option.

On ~~October~~ October 29, 2020, the Company entered into a five -year option agreement with First Fire whereby the Company agreed to sell to First Fire a portion of the total outstanding shares of ATHI. The Company provided First Fire an option to purchase 1,428,571 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $143), based on the advances that First Fire made to the Company totaling $120,000. First Fire shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by First Fire to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.

On ~~October~~ October 29, 2020, the Company entered into a five -year option agreement entered into with Bauman, so that the Company agreed to sell to Bauman a portion of the total outstanding shares of ATHI. The Company provided Bauman an option to purchase 1,428,571 shares of ATHI from the Company for a purchase consideration of $0.0001 per share (a total consideration of $143), based on the advances that Bauman made to the Company totaling $120,000. Bauman shall share in all distributions by ATHI to the Company, on an as exercised basis, equal to the advances made by Bauman to the Company, thereafter the option will be reduced to 50% of the shares exercisable under the option.

Other

The ~~Company~~ Company has principal and interest payment commitments under the Convertible notes disclosed under Note 1013 above. Conversion of these notes are at the option of the investor, if not converted these notes may need to be repaid.

From time to time, the Company and its subsidiaries enter into legal disputes in the ordinary course of business. The Company believes there are no material legal or administrative matters pending that are likely to have, individually or in the aggregate, a material adverse effect on its business or results of operations.

2023. Income taxes

The Company is current inwith its USU.S. and Canadian income tax filings asthrough of December 31, ~~2022,~~2021. ~~tax~~Tax ~~filings~~returns ~~are due~~ for the ~~Company~~years asended of December 31, 2022, 2023, 2024, and ~~2024~~2025 have not yet been filed.

The Company’s operations are based in the US and currently enacted tax laws in the US are used in the calculation of income taxes.

F-29

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

20. Income taxes (continued)

Federal Income Tax - United States

On December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S. corporate income tax law, was signed into law by President Trump. The TCJA contains significant changes to corporate income taxes, including but not limited to the reduction of the corporate income tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and generally eliminating net operating loss carrybacks, allowing net operating losses to carryforward without expiration, one-time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certain important exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including changes to the orphan drug tax credit and changes to the deductibility of research and experimental expenditures that will be effective in the future). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain, including to what extent various states will conform to the newly enacted federal tax law.

Income taxes are computed using the asset and liability method. Under the asset and liability method, deferred income tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently enacted tax rates and laws. A full valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. It is the Company’s policy to classify interest and penalties on income taxes as interest expense or penalties expense. As of December 31, ~~2024~~2025 and ~~2023~~2024, there have been no interest or penalties incurred on income taxes.

~~The provision for income taxes consists of the following:~~F-32

Schedule of provision for income taxes
	Year ended December 31, 2024		Year ended December 31, 2023
Current
Federal	$	—	$	174,511
State		—		—
Foreign		—		—
Current, Total	$	—	$	174,511
Deferred
Federal	$	—	$	217,451
State		—		—
Foreign		—		—
Deferred, Total	$	—	$	217,451
Tax Benefit	$	—	$	391,962

The income tax provision/ (benefit) is different from that which would be obtained by applying the statutory Federal income tax rate of 21% and applicable state tax rates of 5.5% to income before income tax expense. The items causing this difference for the years ended December 31, 2024 and 2023 are as follows:

Schedule of items causing deference
	Year ended December 31, 2024			Year ended December 31, 2023
Taxation credit (charge) at the federal and state statutory rate	$	454,847		$	(129,035	)
State taxation		79,277			55,679
Prior year over provision		—			174,511
Permanent differences		—			(257,015	)
Foreign tax rate differential		—			(181,036	)
Prior year net operating loss true up		—			571,391
Forfeiture of net operating loss on disposal of subsidiary		—			(178,608	)
Valuation allowance		(534,124	)		336,075
Net tax benefit (expense)	$	—		$	391,962

F-30

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2023. Income taxes (continued)

~~Deferred~~The ~~income~~provision ~~taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities~~ for ~~financial reporting purposes and the amounts used for~~ income ~~tax~~taxes ~~purposes.~~consists ~~Significant components~~ of ~~deferred~~the ~~tax assets and liabilities at December 31, 2024 and 2023 are as follows~~following:

Schedule of components of deferred tax assets and liabilities
Schedule of provision for income taxes
	December 31, 2024			December 31, 2023
	Year ended December 31, 2025			Year ended December 31, 2024
Property and equipment	$	(121,881	)	$	(105,801	)
Current
Intangible assets		221,352			158,108
Federal	$	—		$	—
Net operating losses		6,620,694			6,192,106
State		—			—
Other		83,365			24,993
Current, Total	$	—		$	—
Gross deferred income tax assets (liabilities)		6,803,530			6,269,406
Deferred
Valuation allowance		(6,803,530	)		(6,269,406	)
Federal	$	42,520		$	—
Net deferred income tax assets (liabilities)	$	—		$	—
State		10,124			—
Deferred, Total	$	52,644		$	—
Tax Benefit	$	52,644		$	—

The income ~~Company~~tax ~~has~~provision/ ~~established~~(benefit) ais ~~valuation~~different ~~allowance~~from ~~against~~that ~~its~~which ~~gross~~would ~~deferred~~be ~~tax~~obtained ~~assets~~by ~~sufficient~~applying tothe ~~bring~~statutory ~~its~~Federal ~~net~~income ~~deferred~~ tax ~~assets~~rate toof 21% ~~zero~~and ~~due~~applicable tostate ~~the~~tax ~~uncertainty~~rates ~~surrounding the realization~~ of ~~such assets~~ 5.5% ~~Management~~for ~~has~~Florida ~~determined~~and it5.0% isfor ~~more~~Kentucky, ~~likely~~to ~~than~~income ~~not~~before ~~that~~income ~~the net deferred~~ tax ~~assets are not realizable due to the Company’s historical loss position~~expense. The ~~valuation~~items ~~allowance~~causing this difference for the ~~year~~ years ended December 31, ~~2024~~2025 ~~increased~~and by2024 aare ~~total~~as ~~of $534,124.~~follows:

As of December 31, 2024, the prior four tax years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.


	Year ended December 31, 2025			Year ended December 31, 2024

Taxation credit (charge) at the federal and state statutory rate	$	468,366		$	454,847
State taxation		141,564			79,277
Prior year over provision		—			—
Deferred tax liability on purchase price accounting		52,644			—
Prior year net operating loss true up		16,940			—
Valuation allowance		(626,870	)		(534,124	)
Net tax benefit (expense)	$	52,644		$	—

AsDeferred ofincome ~~December~~taxes ~~31,~~reflect ~~2024,~~ the ~~Company~~net ~~had available for income~~ tax ~~purposes~~effect ~~approximately~~of ~~$31.2 million~~temporary indifferences ~~federal~~between ~~and~~the ~~$2.3~~carrying ~~million in~~amount ~~state net operating loss carry forwards, which may be available to offset future taxable income. $8.1 million~~ of ~~the~~assets ~~net operating losses will begin to expire in 2034~~ and ~~$23.1 million~~liabilities ~~has~~for ~~an indefinite life. Due~~financial toreporting ~~the~~purposes ~~uncertainty of the utilization~~ and ~~recoverability of~~ the ~~loss~~amounts ~~carryforwards~~used ~~and~~for ~~other~~income ~~deferred~~ tax ~~assets,~~purposes. ~~Management~~Significant ~~has~~components ~~determined a~~of ~~full valuation allowance for the~~ deferred tax assets ~~since~~and itliabilities isat ~~more~~December 31, ~~likely~~2025 ~~than~~and ~~not~~2024 ~~that~~are ~~the~~as ~~deferred tax assets will not be realizable.~~follows:


	December 31, 2025			December 31, 2024

Property and equipment	$	(240,506	)	$	(121,881	)
Intangible assets		286,713			221,352
Net operating losses		7,158,362			6,620,694
Other		225,831			83,365
		7,430,400			6,803,530
Valuation allowance		(7,430,400	)		(6,803,530	)
Deferred tax assets, net	$	—		$	—

Deferred tax liability on acquired intangible assets		726,317			—
Deferred tax liabilities	$	726,317		$	—

The Company has established a valuation allowance against its gross deferred tax assets sufficient to bring its net deferred tax assets to zero due to the uncertainty surrounding the realization of such assets. Management has determined it is more likely than not that the net deferred tax assets are not realizable due to the Company’s historical loss position. The valuation allowance for the year ended December 31, 2025 increased by a total of $626,870.

As of December 31, 2025, the prior four tax years remain open for examination by the federal or state regulatory agencies for purposes of an audit for tax purposes.

As of December 31, 2025, the Company had available for income tax purposes approximately $33.3 million in federal and $4.6 million in state net operating loss carry forwards, which may be available to offset future taxable income. $8.1 million of the net operating losses will begin to expire in 2034 and $25.2 million has an indefinite life. Due to the uncertainty of the utilization and recoverability of the loss carryforwards and other deferred tax assets, Management has determined a full valuation allowance for the deferred tax assets since it is more likely than not that the deferred tax assets will not be realizable.

Pursuant to the Internal Revenue Code of 1986, as amended (“IRC”), §382, the Company’s ability to use its net operating loss carry forwards to offset future taxable income is limited if the Company experiences a cumulative change in ownership of more than 50% within a three-year period.

~~21. Subsequent events~~F-33

Acquisition of Edgewater Recovery Centers, LLC

As previously disclosed, on October 22, 2024, ARIA Kentucky LLC (ARIA Kentucky”), a wholly owned subsidiary of the Company, Edgewater Recovery Centers, LLC (“ERC”) and John Elam (the ”Seller”), entered into an Asset Purchase Agreement (”APA”) pursuant to which ARIA Kentucky agreed to acquire and ERC agreed to sell to ARIA Kentucky on the closing date (the “Acquisition”) , the addiction treatment operations owned by ERC and located in Morehead and Paducah, Kentucky through a purchase of the assets of ERC (the “Acquired Assets”), including; all assets of ERC used in the business of ERC (except for certain specified assets), including but not limited to all current assets existing at the time of closing, all cash balances and rights to receive cash, all equipment, machinery, all warranties related to the business and acquired assets, all intangible personal property, intellectual property, all business inventories, all property leases associated with the business, all assumed contracts, 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 ERC (the “Real Property”) is fully leveraged and requires credit and personal guarantees which the Company is unable to provide. The entities owning the real property were acquired in a separate transaction by BH Properties Fund LLC (“BH Properties”), a company controlled by Mr. Shawn Leon, the Company’s CEO and therefore a related party. BH Properties through its acquired subsidiaries then entered into lease agreements with ARIA Kentucky on an arms-length basis, at market related rates.

On January 9, 2025, in. a separate transaction, BH Properties acquired ERC Investments, LLC (”ERCI”), New Journey LLC (“NJ”) and, JDE Properties, LLC (“JDE”) which separately own certain Real Property on which ARIA Kentucky operates and which was subsequently leased to ARIA Kentucky.

F-31

ETHEMA HEALTH CORPORATION

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2124. Subsequent events ~~(continued)~~

~~Lease~~Bank ~~agreements entered into by ARIA Kentucky.~~funding

~~All~~On January 8, 2026, the Company, through ~~lease~~its ~~agreements~~subsidiary ~~are~~Evernia, ~~effective~~entered into a $1,600,000 loan and security agreement with a bank to repay certain liabilities of the Company, the loan is guaranteed by the Company and the Company’s CEO, Mr. Leon. The maturity date of the loan is January 8, 2031and bears interest at a fixed rate of 7.75%, unless the loan is in default whereby the default rate of prime plus 6% or 12%, whichever is the greater, will apply. The loan is repayable in monthly instalment of $24,750 commencing on February 8, 2026, with a balloon payment at maturity of the remaining principal and interest thereon. Certain expenses were deducted off the proceeds resulting in a net proceeds of $1,583,404. The ~~2025:~~proceeds were used to repay the Mirage Realty, LLC, short term note, related party balances to Shawn Leon and Eileen Greene and for general working capital purposes.

~~ERC~~Replacement ~~Investments~~of ~~LLC~~promissory ~~– Related Party, wholly owned by BH Properties~~note

·Effective February ~~Five~~1, ~~year~~2026, ~~real~~the ~~property~~company ~~lease~~entered ~~for~~into ~~property~~a ~~located~~new atpromissory ~~425~~note ~~Clinic~~agreement ~~Drive,~~replacing ~~Morehead~~the previous promissory note due on the acquisition of the minority interest of ATHI. The promissory note is for $220,000, ~~Kentucky~~resulting in a reduction in the liability of $15,000 ~~for~~and anis ~~initial~~repayable in ~~annual~~monthly ~~rental~~instalment of $~~312~~20,000 commencing on February 16, ~~with~~2026 ~~annual~~and ~~escalations~~for ofthe 1ten months thereafter.5% ~~for~~The apromissory ~~total~~note ~~lease~~bears ~~obligation~~no interest unless the note is not repaid by the due date of $1January 16,~~607~~ 2027,~~507~~ then interest will accrue at a maximum rate allowed in Florida or 18% per annum. The original promissory note holder agreed that all obligations due to him under the original promissory note are fully discharged and replaced by the new promissory note.

~~· Five year real property lease for property located at 445 Clinic Drive, Morehead, Kentucky for an initial annual rental~~ Letter of ~~$120,000,~~intent ~~with~~to ~~annual~~acquire ~~escalations~~certain ofassets ~~1.5%~~and ~~for~~legal ~~a total lease obligation of $618,272.~~entities

· ~~Five~~On ~~year~~October ~~real~~20, ~~property~~2025, ~~lease~~the ~~for~~Company ~~property~~entered ~~located~~into atan ~~1111~~exclusive USletter 60of intent (“LOI”) with Addiction Recovery Care LLC (“Vendor”) to purchase certain of the assets and separate entities operating under the ARC brand name in Kentucky, ~~Morehead~~expiring 90 days from signature thereof. On November 18, ~~Kentucky~~2025, ~~for~~we entered into an ~~initial~~amendment ~~annual~~to ~~rental~~the LOI removing the exclusivity clause, with all other terms remaining the same. The potential assets to be purchased are of ~~$480~~the ARC in-patient facilities in Kentucky operating in Inez,~~000~~ Pikeville, Owensboro and Ashland, along with ~~annual~~out-patient ~~escalations~~facilities ofin 1Kentucky operating in Prestonsburg, Mount Sterling, Louisa, Ashland and Lexington.5% ~~for~~The apotential ~~total~~separate ~~lease~~entities ~~obligation~~to ofbe $2purchased include a Psychiatric Hospital,~~473~~ a Pharmacy,~~088~~ a Medical Laboratory and a Rural Health Clinic. The addiction treatment and psychiatric facilities have a capacity of approximately 900 patients. There are likely to be related real estate transactions involved in the acquisitions which will remain outside of the Company but could be utilized to generate substantial new equity for the Company.

~~New~~The proposed ~~Journey~~funding ~~LLC–~~of ~~Related~~the ~~Party~~purchase price will be approximately 25% in cash, ~~wholly~~25% ~~owned~~in a vendor note and 50% in equity linked funding from the vendor. The cash portion will be raised by BHissuance ~~Properties~~of new equity and the proceeds from sale and subsequent leasing of certain of the ARC facilities.

·The ~~Five~~Company intends ~~year~~on ~~real~~creating ~~property~~a ~~lease~~new ~~for~~entity ~~property~~(“NewcoARIA”) ~~located~~to atacquire ~~189~~the ~~Edgewater~~ARC ~~Road,~~assets ~~Morehead,~~and separate entities and will ultimately also hold the Company’s existing Florida and Kentucky ~~for~~treatment anentities. ~~initial~~NewcoARIA ~~annual~~will ~~rental~~be ofinitially ~~$96,000,~~owned ~~with~~by ~~annual~~Ethema, ~~escalations~~new ofinvestors 1and the Vendor.5% It ~~for~~is alikely ~~total~~that ~~lease~~the ~~obligation~~Company will pursue an Initial Public Offering of ~~$494,618~~NewcoARIA on a senior U.S. exchange.

·The ~~Five~~Company continues ~~year~~to ~~real~~pursue ~~property~~this ~~lease for property located at 795 Cranston Road, Morehead, Kentucky, for an initial annual rental of $96,000, with annual escalations of 1~~acquisition.~~5% for a total lease obligation of $494,618.~~

· ~~Five~~On ~~year~~January ~~real~~7, ~~property~~2026, ~~lease~~the ~~for~~Company ~~property~~entered ~~located~~into atan ~~2180~~exclusive USletter 60of intent (“LOI”) to acquire the total membership interest of Specialist MAT, ~~Morehead~~PSC (“MAT”), A Kentucky ~~for~~professional anlimited ~~initial~~liability ~~annual~~company. ~~rental~~The ofpurchase price is estimated at $~~36,000,~~9.5 million with ~~annual~~$6.5 ~~escalations~~million payable in cash and the balance of 1$3.5%0 million funded by a 24-month Sellers note. The principal of the business will sign an employment agreement for a ~~total~~period ~~lease~~of ~~obligation~~two years and continue as the medical director of ~~$185~~MAT,~~482~~ in addition the Seller will enter into a 5-year non-compete agreement from closing. The parties agreed to conclude the transaction within 75 days, however the closing date had been extended by an additional 15 days and has still not closed. The parties continue to negotiate in good faith and the exclusivity agreement remains in place.

·New ~~Five year real property~~ lease ~~for property located at 721 White Street, Morehead, Kentucky for an initial annual rental of $30,000, with annual escalations of 1.5% for a total lease obligation of $154,568.~~agreements

~~JDE~~The Company, through its subsidiary ARIA ~~Properties~~Kentucky, ~~LLC–~~entered ~~Related~~into ~~Party~~five new lease agreements, ~~wholly~~effective ~~owned~~between byJanuary 1, 2026 and March 1, 2026, with its related party, BH Properties and its subsidiaries, Viking Assets, LLC, JDE Properties and New Journey. The leases are for property situated at:

· ~~Five~~304 ~~year~~Viking ~~real property lease for property located at 166 Maple~~ Drive, Morehead, Kentucky ~~for~~with an ~~initial~~ annual ~~rental~~base rent of $60,000~~, with annual escalations of 1~~.~~5% for a total lease obligation of $309,136.~~

· ~~Five~~164, ~~year~~166 ~~real~~and ~~property~~168 ~~lease~~Maple ~~for property located at 214 Jackson~~ Drive, Morehead, Kentucky ~~for~~with an ~~initial~~ annual ~~rental~~base rent of $3036,000, ~~with~~$60,000 ~~annual~~and ~~escalations of 1.5% for a total lease obligation of~~ $~~154~~36,~~568~~000, respectively.

· ~~Five~~2495 ~~year~~Cranston ~~real property lease for property located at 1135 Rodburn Hollow Drive~~Road, Morehead, Kentucky ~~for~~with an ~~initial~~ annual ~~rental~~base rent of $3096,000~~, with annual escalations of 1~~.~~5% for a total lease obligation of $154,568.~~

~~Trent~~The leases are for an initial period expiring ~~Developments~~on ~~LLC~~December –31, ~~Unrelated~~2029, ~~third~~with ~~party~~an option to extend for an additional five years, since the transaction is between related parties the option is likely to be exercised. Each lease agreement includes an escalation of 1.5% of the base rent, commencing on January 1, 2027, and annually thereafter. The Company is responsible for utilities, property taxes, repairs and maintenance expenditure and insurance costs.

OnFunding January 9, 2025, ARIA Kentucky executed a five year real property lease with Trent Developments for property located at 141, 141.5 and 143 East Main Street, Morehead, Kentucky for an initial annual rental of $138,000 per annum, escalating at 1.5% per annum after the second year, for a total lease obligation of $702,545.Arrangement

~~MAT~~On March ~~Properties~~16, ~~LLC~~2026, –the ~~Unrelated~~Company, ~~third~~through ~~party~~its –subsidiary ~~assignment~~Evernia, entered into a funding arrangement with Itria, whereby it received proceeds of $244,500, ~~lease~~net of discount and fees of $68,000. The Company is obliged to pay $6,010 per week until the amount of $312,500 is paid in full. The maturity date of this funding is March 16, 2027.

~~On January~~The ~~9, 2025, ARIA Kentucky executed a three year real property assignment of lease agreement with ERC~~ discount and ~~MAT~~fees ~~Properties~~totaling ~~for property located at 154 S Owens Road~~$68,000 ~~Morehead,~~associated ~~Kentucky,~~with ~~for~~this anfunding ~~initial~~was ~~annual~~capitalized ~~rental~~and ofis ~~$180,000~~being ~~per~~amortized ~~annum,~~using ~~with~~the noeffective ~~escalations,~~interest ~~for~~method ~~a total~~over ~~lease~~the ~~obligation~~repayment ~~of $540,000~~period.

~~F-32~~Related Party funding

~~ETHEMA~~During March 2026, Mr. Leon the Company’s ~~HEALTH~~CEO ~~CORPORATION~~advanced $300,000 to the Company. The advance bears interest at 6% per annum and is repayable on demand.

~~NOTES~~Other TOthan ~~THE~~the ~~CONSOLIDATED~~above, ~~FINANCIAL~~the ~~STATEMENTS~~Company has evaluated subsequent events through the date the audited consolidated financial statements were issued and did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.

~~22. Subsequent events (continued)~~F-34

Amendment to articles of incorporation

In terms of a resolution of the Company’s board of directors proposing amendments to the articles of incorporation, on January 22, 2025, in term of a Definitive 14C information statement, the company obtained the written consent of the holders of a majority of voting power of the outstanding common stock and a majority of the voting power of the outstanding Series A Preferred stock, to amend and restate the articles of incorporation as follows:

· The number of authorized shares of preferred stock was increased from 10,400,000 shares of preferred stock, with a par value of $0.01 per share, designated as 10,000,000 Series A preferred stock, and 400,000 designated as Series B Preferred stock which are no longer outstanding or authorized to 30,000,000 shares of Preferred Stock.

The effect of the adoption of Authorized Increase is that the Board of Directors has the authority to issue shares of Preferred Stock in one or more series, with such rights, preferences and designations, as it deems necessary or advisable without any additional action by our stockholders, unless otherwise required by law or any quotation system or exchange upon which our securities are listed and trade. With regard to such proposed blank check preferred stock, the Board of Director’s authority to determine the terms of any such shares of Preferred Stock would include, but not be limited to: (i) the designation of each class or series and the number of shares that will constitute each such class or series; (ii) the dividend rate for each class or series; (iii) the price at which, and the terms and conditions on which, the shares of each class or series may be redeemed, if such shares are redeemable; (iv) the terms and conditions, if any, upon which shares of each class or series may be converted into shares of other classes or series of shares, or other securities; and (v) the voting rights for each class or series.

· To effect a reverse stock split of the Company’s issued and outstanding shares of common stock at a ratio between 1 for 1,000 and 1 for 5,000, with the ratio to be determined at the discretion of the board of directors, subject to the authority of the board of directors to abandon the reverse stock split amendment.

The Reverse Stock Split Amendment will have the effect of reducing the outstanding number of shares of Common Stock. If the Board of Directors does not implement an approved Reverse Stock Split prior to the one-year anniversary of the date of approval of the stockholders of the Reverse Stock Split, this vote will be of no further force and effect the Board of Directors will seek stockholder approval before implementing any reverse stock split after that time. The Board of Directors may abandon the proposed amendment to effect the Reverse Stock Split at any time prior to its effectiveness. Fractional shares will be paid in cash.

Our Common Stock is listed on the OTC Markets under the symbol “GRST” and will continue to be listed on the OTC Markets under the same trading symbol following the Reverse Stock Split. New Shares will be fully paid and non-assessable. The New Shares will have the same voting rights and rights to dividends and distributions and will be identical in all other respects to the Old Shares.

· To delete Article XIII, which required the vote or the consent of the holders of a majority of the outstanding shares of the Company to approve any action by the Company’s stockholders.

The effect of the adoption of the Article XIII Amendment is that, instead of requiring the vote or concurrence of the holders of a majority of the outstanding shares of the Company entitled to vote to approve any action by the Company’s stockholders, the vote or concurrence of the holders of a majority of the outstanding shares of the Company cast by the Company’s stockholders at a duly called meeting at which a quorum was present for the transaction of business shall be sufficient to approve any action by the Company’s stockholders,

Receivables Funding

January 6, 2025 Funding

On January 6, 2025, the Company, through its subsidiary, Evernia Health Center, LLC entered into a Receivables Sale Agreement with Itria Ventures, LLC (“Itria”), whereby $307,500 of the Receivables of Evernia were sold to Itria for gross proceeds of $250,000. The Company also incurred fees of $3,000 resulting in net proceeds of $247,000. The Company is obliged to pay $7,885 per week until the amount of $307,500 is paid in full.

February 13, 2025 Funding

On February 13, 2025, the Company, through its subsidiary, Evernia Health Center, LLC entered into a Receivables Sale Agreement with CFG Merchant Solutions, LLC (“CFG”), whereby $166,250 of the Receivables of Evernia were sold to CFG, for gross proceeds of $125,000. The Company also incurred fees of $625 resulting in net proceeds of $124,375. The Company is obliged to pay $3,778 per week until the amount of $166,250 is paid in full.

February 18, 2025 Funding

On February 18, 2025, the Company, through its subsidiary, Evernia Health Center, LLC entered into a Receivables Sale Agreement with Purpletree Funding, LLC (“Purpletree”), whereby $99,750 of the Receivables of Evernia were sold to Purpletree for gross proceeds of $75,000. The Company also incurred fees of $750 resulting in net proceeds of $74,250. The Company is obliged to pay $3,563 per week until the amount of $99,750 is paid in full.

F-33

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures

Annual Evaluation of Disclosure Controls and Procedures

We have adopted and maintain disclosure controls and procedures (as such term is defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Exchange Act), that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC’s rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), to allow for timely decisions regarding required disclosure.

As required by Exchange Act Rule 13a-15, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15 as of the end of the period covered by this report. Based on the foregoing evaluation, our Chief Executive Officer and Chief Financial Officer concluded that due to our limited resources our disclosure controls and procedures are not effective in providing material information required to be included in our periodic SEC filings on a timely basis and to ensure that information required to be disclosed in our periodic SEC filings is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure about our internal control over financial reporting discussed below.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for our company. Our internal control system was designed to, in general, provide reasonable assurance to our management and board regarding the preparation and fair presentation of published financial statements, but because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, ~~2024~~2025. The framework used by management in making that assessment was the criteria set forth in the document entitled “Internal Control – Integrated Framework” ~~issued~~ issued by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission in Internal Control-Integrated Framework (2013). ~~Based~~ Based on that assessment, our management has determined that as of December 31, ~~2024~~2025, our internal control over financial reporting ~~was~~ was not effective due to material weaknesses related to a limited segregation of duties due to our limited resources and the small number of employees. Management has determined that this control deficiency constitutes a material weakness which could result in material misstatements of significant accounts and disclosures that could result in a material misstatement to our interim or annual financial statements that would not be prevented or detected. In addition, due to limited staffing, we are not always able to detect minor errors or omissions in reporting.

This Annual Report does not include an attestation report of our independent registered public accounting firm regarding management’s assessment of our internal control over financial reporting pursuant to temporary rules of the SEC.

Evaluation of Disclosure Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

As required by the SEC Rules 13a-15(b) and 15d-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to material weaknesses in internal controls over financial reporting (as described below).

1216

Deficiencies and Significant Deficiencies

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board (“PCAOB”) Audit Standard No. 5, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that as of December 31, ~~2024~~2025, our internal controls over financial reporting were not effective at the reasonable assurance level:

1. We do not have sufficient written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of the Sarbanes-Oxley Act which is applicable to us for the year ended December 31, ~~2024~~2025. Management evaluated the impact of our failure to have sufficient written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We do not have sufficient resources in our accounting function, which restricts the Company’s ability to gather, analyze and properly review information related to financial reporting in a timely manner. In addition, due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

We have taken steps to remediate some of the weaknesses described above and we are in discussions with the risk advisory departments of reputable accounting firms to assist us in the COSO framework documentation and testing of the internal controls. We intend to continue to address these weaknesses as resources permit, including the employment of new qualified employees.

Remediation of Deficiencies and Significant Deficiencies

To address these material weaknesses, management engaged financial consultants, performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Additionally, we will continue to establish and implement proper processes and systems to remediate the deficiencies we have had, including preventive controls with the segregation of duties on main areas such as payroll, billing, cash recording, and IT control and detective controls involving account reconciliations on a monthly basis.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended December 31, ~~2024~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

1317

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Our current directors and executive officers, their ages and their positions, as of the date of this Annual Report, as follows:

Name		Position
Shawn E. Leon	6566	Chief Executive Officer, ~~Chief Financial Officer,~~ President and Director
Gerald T Miller	67	Director
James Pogue	73	Chief Financial Officer
Gerald T Miller	68	Director

Set forth below is a brief description of the background and business experience of each of our current executive officers and directors.

Shawn E. Leon, Chief Executive Officer, ~~Chief Financial Officer,~~ President and Director

Shawn E. Leon has been an officer and director of the Company since November 2010 and served as the President of the Company’s subsidiaries at all times. In April 2011, Mr. Leon was appointed as the Company’s Chief Executive Officer. Prior to joining the Company, Mr. Leon held the role of President of Greenestone Clinic Inc., Leon Developments Ltd, Port Carling Inn Developments Ltd., 1871 at the Locks Developments Ltd. and Leon Developments Ltd. Mr. Leon graduated with Honors in Business Administration from Wilfrid Laurier University in 1982. Mr. Leon was elected to the Board because of his prior management experience.

James Pogue, Chief Financial Officer

James Pogue was appointed as the Company’s Chief Financial Officer on March 30, 2026. Mr. Poage is a Senior Financial Analyst, based out of the Denver, Colorado. He has over 35 years of experience in corporate accounting and finance, internal audit, tax compliance, investment banking, risk management and business acquisitions. He has a strong background in SEC reporting, risk management, tax planning and business valuation issues, including restructuring for complex acquisition transactions.

Previously, Jim served as CFO and Acquisition Project Manager with several publicly traded oil & gas companies through his own consulting firm. He holds a bachelor’s degree in accounting from the University of Colorado.

Gerald T. Miller, Director

Gerry Miller of Toronto, Ontario, Canada is the Managing Partner of the Law Firm Gardiner Miller Arnold LLP. Mr. Miller’s practice focuses on a comprehensive range of business, finance and real estate issues. In addition to managing the law firm. Mr. Miller’s runs the business law and real estate practice at Gardiner Miller Arnold LLP Law firm. He advises small to medium sized companies in manufacturing, investing and service -related industries. Mr. Miller supervises all merger and acquisition transactions and institutional finance work.

CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

We have adopted a code of conduct that applies to all officers, directors and employees, including those officers responsible for financial reporting. If we make any substantive amendments to the code of conduct or grant any waiver from a provision of the code of conduct to any executive officer or director, we will promptly disclose the nature of the amendment or in a Current Report on Form 8-K to be filed with the SEC.

Our Board of Directors

Our Board currently consists of two members. Our Board judges the independence of its directors by the heightened standards established by the Nasdaq Stock Market. Accordingly, the Board of Directors has determined that our non-employee directors, Mr. Miller, meets the independence standards established by the Nasdaq Stock Market and the applicable independence rules and regulations of the SEC. Our Board considers a director to be independent when the director is not one of our or our subsidiaries’ officers or employees or director of our subsidiaries, does not have any relationship which would, or could reasonably appear to, materially interfere with the independent judgment of such director, and the director otherwise meets the independence requirements under the listing standards of the Nasdaq Stock Market and the rules and regulations of the SEC.

Board Committees

Our Board of Directors act as our Audit Committee, our Compensation Committee and our Nominating and Governance Committees.

Audit Committee

The primary purpose of the audit committee is to oversee the quality and integrity of our accounting and financial reporting processes and the audit of our financial statements. The audit committee is responsible for selecting, compensating, overseeing and terminating our independent registered public accounting firm. Specifically, the audit committee’s duties are to recommend to our Board of Directors the engagement of an independent registered public accounting firm to audit our financial statements and to review our accounting and auditing principles. The audit committee will review the scope, timing and fees for the annual audit and the results of audit examinations performed by the external auditors and independent registered public accounting firm, including their recommendations to improve the system of accounting and internal controls.

Compensation Committee

The compensation committee is responsible for, among other things, reviewing and recommending to our Board the annual salary, bonus, stock compensation and other benefits of our executive officers, including our Chief Executive Officer and Chief Financial Officer; reviewing and providing recommendations regarding compensation and bonus levels of other members of senior management; reviewing and making recommendations to our Board on all new executive compensation programs; reviewing the compensation of our Board; and administering our equity incentive plans. The compensation committee may delegate any or all of its duties or responsibilities to a subcommittee of the compensation committee, to the extent consistent with the Company’s organizational documents and all applicable laws, regulations and rules of markets in which our securities trade, as applicable.

Nominating and Governance Committee

The nominating and governance committee is responsible for, among other things, annually assessing the composition, skills, size and tenure of the Board of Directors in advance of annual meetings and whenever individual directors indicate that their status may change; annually considering new members for nomination to the Board of Directors; causing the Board of Directors to annually review the independence of directors; and developing and monitoring our general approach to corporate governance issues as they may arise.

Compliance with Section 16(A) of the Exchange Act

Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who beneficially own 10% or more of a class of securities registered under Section 12 of the Exchange Act to file reports of beneficial ownership and changes in beneficial ownership with the SEC. Directors, executive officers and greater than 10% stockholders are required by the rules and regulations of the SEC to furnish the Company with copies of all reports filed by them in compliance with Section 16(a).

Based solely on our review of certain reports filed with the SEC pursuant to Section 16(a) of the Securities Exchange Act of 1934, as amended, at December 31, ~~2024~~2025, our officers and directors or 10% stockholders were in compliance with Section 16(a).

Item 11. Executive Compensation.

There has been no annuity, pension or retirement benefits paid to our officers or directors during the past two fiscal years. We currently do not have an employment agreement with the Company’s Chief Executive Officer. There is no compensation committee of the Board. The Board approved the terms of a certain management agreement with Greenestone Clinic, Inc., wholly owned by the Company’s Chief Executive Officer, Shawn Leon, and with Shawn Leon, whereby a management agreement was initially for a term of one year and was for the development of medical clinics in Ontario, Canada. The agreement has been extended from year to year and has been expanded to include overall company management and the development of clinics in the United States. The management agreement allowed for a maximum compensation of $300,000 per year.

Summary Compensation Table

Name and Principal Position	Year		Salary ($)			Bonus ($)		Option Awards ($)		Non-Equity Plan Compensation ($)		Non-Qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Shawn E. Leon, President CEO, CFO		2024	$	20,000	(1)	$	—	$	—	$	—	$	—	$	—	$	20,000
Shawn E. Leon,		2025	$	120,000	(1)	$	—	$	—	$	—	$	—	$	—	$	120,000
		2023	$	—		$	—	$	—	$	—	$	—	$	—	$	—
President CEO, CFO		2024	$	20,000	(1)	$	—	$	—	$	—	$	—	$	—	$	20,000

(1) Represents a salary paid to Mr. Leon during the year ended December 31, 2025 and 2024.

Outstanding Equity Awards at Fiscal Year End

There were no equity awards issued to executive officers during the fiscal year ended December 31, ~~2024~~2025 and there are no outstanding equity awards to named officers as of December 31, ~~2024~~2025.

Information regarding equity compensations plans is set forth in the table below:

	Number of securities to be issued upon exercise of outstanding options		Weighted average exercise price of outstanding options		Number of securities remaining for future issuance under equity compensation plans

Equity Compensation plans approved by the stockholders
2013 Equity compensation plan		—	$	—		10,000,000
Equity Compensation plans not approved by the stockholders
None		—		—		—

		—	$	—		10,000,000

Directors Compensation

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to the named directors by us during the year ended December 31, ~~2024~~2025.

Name

Fees earned or paid in cash

($)

Stock awards ($)

Option awards ($)

Non-Equity
Plan Compensation ($)

Non-Qualified Deferred Compensation Earnings

($)

All Other Compensation ($)

Total

($)

Shawn E. Leon

—

Gerald T Miller

—

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Name of beneficial owner	Amount and nature of beneficial ownership, including common stock			Percentage of common stock beneficially owned(1)

Directors and Officers
Shawn E. Leon		4,171,864,342	(2)		54.0	%
Gerald T. Miller		500,000	(3)		*

All officers and directors as a group (2 persons)		4,172,364,342			54.0	%

* Less than 1%

(1)	Based on 7,726,283,805 shares of common stock outstanding as of ~~May~~June 2129, ~~2025~~2026.
(2)	Includes 3,~~000~~063,~~500~~187,~~000~~300 shares held by ~~Mr.~~Ranfurly ~~Leon,~~Holdings ~~a further 2~~LTD,~~687,300~~ ~~shares held by Greenestone Clinic,~~ a ~~company~~Company controlled by Mr. Leon, ~~a further 60~~1,~~000~~008,~~000~~677,042 shares owned by ~~Leon~~EMG ~~Developments~~Holdings LTD, a company controlled by ~~Mr. Leon, 1,008,677,042 shares owned by~~ Eileen Greene, Mr. Leon's spouse and 100,000,000 shares owned by Mr. Leon’s’ son.
(3)	Includes 500,000 shares of common stock.

Item 13. Certain Relationships and Related Party Transactions, and Director Independence

Related Party Transactions

As of December 31, ~~2024~~2025 and ~~2023~~2024, amounts payable to executive officers or their affiliates for related party payables, as detailed in the below table:

	December 31,			December 31,
	2024			2023
	2025			2024
Related party payables
Advance from related party
Shawn E. Leon	$	144,353		$	61,267
Leon Developments Ltd.		—			1,092,701
Eileen Greene		488,965			1,418,324
Total related party payables	$	633,318		$	2,572,292
Related party advance
Eileen Greene
Principal outstanding	$	285,000		$	—
Principal opening balance	$	273,461		$	—
Repayments		(11,539	)		—
Principal advance made		—			285,000
		273,461			—
Repayments		—			(11,539	)
Debt discount at inception		(35,000	)		—
		273,461			273,461
Amortization of debt discount		26,505			—
Debt discount opening balance		(8,495	)		—
		(8,495	)		—
Debt discount at inception		—			(35,000	)
Total Related party advances	$	264,966		$	—
Amortization of debt discount		8,495			26,505
		—			(8,495	)
Total Related party advance	$	273,461		$	264,966
Related party payables
Shawn E. Leon	$	97,283		$	144,353
Eileen Greene		610,656			488,965
ERC Investments, LLC		334,629			—
New Journey, LLC		61,890			—
JDE Properties, LLC		50,646			—
Viking Assets, LLC		113			—
Total related party payables	$	1,155,217		$	633,318
Note payable – related parties
Loan advanced by ERC Investments, LLC	$	33,767		$	—
Accrued interest		2,504			—
	$	36,271		$	—
Loan advanced by New Journey, LLC	$	47,974		$	—
Accrued interest		3,262			—
	$	51,236		$	—
Total notes payable – Related party	$	87,507		$	—

Related party advance – Eileen Greene

Related party payables

Shawn E. Leon

At December 31, 2024 and December 31, 2023, we had a payable to Shawn Leon of $144,353 and $61,267, respectively. Mr. Leon is a director and CEO of our company. The balances receivable and payable are non-interest bearing and have no fixed repayment terms.

During July 2024, the related party payable of $1,092,701 owing to Leon Developments and $500,000 of the related party payable to Eileen Greene was assigned by the respective parties to Mr. Leon.

On July 12, 2024, Mr. Leon converted $1,500,000 of the related party payable into 3,000,000,000 shares of common stock at a conversion price of $0.0005 per share.

On September 27, 2024, Mr. Leon converted $6,000 of the related party payable into 600,000 shares of Series A Preferred stock at a conversion price of $0.01 per share.

~~Leon~~During ~~Developments~~the year ended December 31, ~~Ltd~~2025, Mr. Leon earned management fees of $120,000 and for the year ended December 31, 2024, Mr. forfeited management fees due to him.

~~Leon Developments~~At isDecember ~~owned~~31, by2025 and ~~Shawn~~December ~~Leon~~31, 2024, the Company’s ~~CEO~~had ~~and~~a ~~director.~~payable Asto Shawn Leon of ~~December~~$97,283 31and $144,353, ~~2024~~respectively. ~~and~~Mr. ~~December~~Leon ~~31,~~is ~~2023,~~a director and CEO of the Company ~~owed~~. ~~Leon~~The ~~Developments,~~balances ~~Ltd~~owing to Mr., $0 Leon are repayable on demand and ~~$1,092,701,~~the ~~respectively~~repayment date is uncertain.

During July 2024, the related party payable of $1,092,701 owing to Leon Developments was assigned by Leon Developments to Mr. Leon.

Eileen Greene

During July 2024, Ms. Greene assigned $500,000 of the Related party payable to her to Mr. Leon.

On July 12, 2024, Ms. Greene converted $500,000 of the related party payable into 1,000,000,000 shares of common stock at a conversion price of $0.0005 per share.

OnThe ~~July~~amounts 4,owing ~~2024,~~to Ms. Greene ~~advanced~~are usrepayable ~~$250,000~~on ~~with~~demand ~~an original issue discount of $35,000, totaling $285,000. The amount is being repaid in instalments of $5,769 as~~ and ~~when we have~~ the ~~cash~~repayment ~~flow~~date ~~to make the payments, the loan~~ is ~~expected to be fully repaid in June 2025 or earlier depending on cash flow~~uncertain.

At December 31, 2025 and December 31, 2024, wethe Company owed Eileen Greene, the spouse of its CEO, Shawn Leon, related party payables of $~~488~~610,~~965~~ 656 and ~~related party advances of~~ $~~264~~488,~~966~~965, ~~net of unamortized debt discount of $8,495~~respectively.

AtERC ~~December 31~~Investments, ~~2023, we owed Eileen Greene, related party payables of $1,418,324.~~LLC

~~The~~As ~~amounts~~disclosed ~~owing~~in note 4 above, a liability owed to ~~Ms.~~ERC ~~Greene~~Investments, ~~are~~LLC ~~non-interest~~from ~~bearing~~Edgewater ~~and~~was ~~has~~assumed noby ~~fixed~~the ~~repayment~~Company, ~~terms~~the aggregate liability assumed by the Company on January 9, 2025 was $720,231.

17The Company pays rent of $76,000 per month to ERC for three properties located in Morehead Kentucky.

OnEffective ~~July~~October 41, ~~2024~~2025, ~~Ms.~~the ~~Greene~~Company ~~advanced~~and ~~the~~ERC ~~Company~~entered ~~$250~~into a rental abatement agreement,~~000~~ ~~with~~whereby anthe ~~original~~rental ~~issue~~for ~~discount~~425 ofClinic Drive and 1111 US 60 W was abated for the three months ended December 31, 2025 by $3560,000, ~~totaling~~and $~~285~~90,000, respectively. The ~~amount~~rental abatement is ~~being~~a once off concession ~~repaid~~granted into ~~instalments~~the Company during its first year of $5operations in Kentucky,~~769~~ aswhile ~~and~~it ~~when~~concentrated ~~the~~on ~~Company~~increasing ~~has~~its ~~the~~patient ~~cash~~census ~~flow~~numbers and to ~~make~~reduce the ~~payments,~~amount ~~the~~of ~~loan~~unpaid isrent ~~expected~~due to beERC ~~fully~~at ~~repaid in the fiscal~~ year ~~2025~~end.

~~Leonite~~At ~~Capital~~December 31, ~~LLC~~2025, ~~and~~the ~~Leonite~~balance ~~Fund~~owing I,to ~~LLP~~ERC was $334,629.

~~Leonite~~New ~~Capital is considered a related party due to its previous investment of $700~~Journey,~~000~~ in Series A Preferred stock interest in CCH, which was previously a wholly owned subsidiary of the Company, and its previous investment of $400,000 in Series B Preferred stock of the Company, as of December 31, 2022.LLC

~~Prior~~As todisclosed ~~the~~in ~~disposal~~note of4 ~~CCH~~above, toa ~~Leonite~~liability ~~Capital~~owed onto ~~June~~New 30Journey, ~~2023,~~LLC ~~and~~from ~~the~~Edgewater ~~simultaneous~~was ~~cancellation~~assumed ofby the ~~Series~~Company, Bthe ~~Preferred~~aggregate ~~stock~~liability ~~as discussed~~assumed ~~below,~~by the ~~accrued~~Company ~~dividends~~ on ~~the~~January ~~CCH Series A Preferred shares was $184~~9,~~545~~ ~~and~~2025 ~~the accrued dividends on the Series B Preferred shares~~ was $6146,~~184~~615.

OnThe ~~June 30, 2023, the~~ Company ~~entered~~pays ~~into~~rent ~~an exchange agreement with Leonite Capital whereby it exchanged the 400,000 Series B shares with a value~~ of $~~400~~5,~~000~~500 ~~plus~~per ~~accrued~~month ~~dividends~~to ~~thereon~~New ofJourney ~~$61,184~~ for ~~its~~two ~~entire~~properties ~~shareholding~~located in ~~its~~Morehead ~~property owning subsidiary, Cranberry Cove Holdings~~Kentucky. ~~The Series B shares and the accrued dividends thereon were extinguished and cancelled upon consummation of the transaction.~~

~~Due~~At toDecember ~~the related party nature of the transaction~~31, ~~the net result of the disposal of $1~~2025,~~334,885~~ ~~and~~ the ~~$700,000~~balance ofowing ~~the~~to ~~CCH~~New ~~Series~~Journey Awas ~~Preferred shares, totaling~~ $261,~~034,885, was recorded as a credit to additional paid-in-capital~~890.

InJDE ~~addition~~Properties, due to the related party nature of the transaction, the cancellation of the Series B Preferred stock, of $400,000 and the dividends thereon of $61,184, totaling $461,184, was recorded as an extinguishment of debt reflected in additional paid-in-capital.LLC

OnAs ~~August~~disclosed 4,in ~~2023,~~note ~~the~~4 ~~company repaid Leonite Capital $1~~above,~~449,000~~ ~~consisting~~a ofliability ~~repayments~~owed ofto ~~short-term~~JDE ~~convertible~~from ~~notes~~Edgewater ofwas ~~$995,257,~~assumed ~~promissory notes~~by ofthe ~~$420~~Company,~~069,~~ ~~additional~~the ~~penalty~~aggregate onliability ~~settlement~~assumed ~~of $5,236 and a personal loan~~ by ~~Leonite to Shawn Leon of $28,438, which repayment~~the ~~reduced~~Company ~~the~~on ~~related~~January ~~party payable to Shawn Leon~~9, as2025 ~~disclosed~~was ~~above~~$37,525.

~~All~~The ~~related~~Company ~~party~~pays ~~transactions~~rent ~~occur in the normal course~~ of ~~operations~~$5,000 ~~and~~per inmonth ~~terms~~to ofJDE ~~agreements~~for ~~entered~~two ~~into~~properties ~~between~~located ~~the~~in ~~parties~~Morehead Kentucky.

At December 31, 2025, the balance owing to JDE was $50,646.

Viking Assets, LLC

Viking Assets is owned by BH Properties, LLC and currently owns three properties, two of which are located in Paducah, Kentucky and a third in Morehead, Kentucky.

The Company pays rent of $14,000 per month to Viking Assets for two properties located in Paducah, Kentucky.

At December 31, 2025, the balance owing to Viking Assets was $113.

Note payable – Related party

ERC Investments, LLC

BH Properties, through its subsidiaries, ERCI, NJ and JDE, secured funding of $2,300,000 to settle certain obligations in those subsidiaries as well as obligations related to the acquisition of the assets of Edgewater by ARIA Kentucky. The obligations related to the acquisition of the assets of Edgewater amounted to $33,767 and bears interest at 7.5% per annum calculated on a 360-day year and is secured by the properties owned by BH Properties and its subsidiaries.

At December 31, 2025, the balance owing to ERCI was $36,271.

New Journey Investments, LLC

BH Properties, through its subsidiaries, ERCI, NJ and JDE, secured funding of $500,000 to settle obligations related to the acquisition of certain properties into NJ and certain assets of Edgewater by ARIA Kentucky. The obligations related to the acquisition of the assets of Edgewater amounted to $47,974 and bears interest at 6.875% per annum calculated on a 360-day year and is secured by the properties owned by BH Properties and its subsidiaries.

At December 31, 2025, the balance owing to NJ was $51,236.

Directors Independence

The common stock of the Company is currently quoted on the OTC Pink, a quotation system which currently does not have director independence requirements. On an annual basis, each director and executive officer will be obligated to disclose any transactions with the Company in which a director or executive officer, or any member of his or her immediate family, have a direct or indirect material interest in accordance with Item 407(a) of Regulation S-K. Following completion of these disclosures, the Board will make an annual determination as to the independence of each director using the current standards for “independence” that satisfy the criteria for the NASDAQ Stock Market, Inc.

As of December 31, ~~2024~~2025, the Board determined that Gerald T Miller is independent and that Mr. Leon is not independent under these standards.

Item 14. Principal Accountant Fees and Services.

RBSM LLP serves as our independent registered public accounting firm for the years ended December 31, ~~2024~~2025 and ~~2023~~2024.

The ~~following~~ following is a summary of the fees paid by us to ~~Daszkal Bolton LLP and~~ RBSM LLP the years ended December 31, ~~2024~~2025 and ~~2023~~2024 for professional services rendered:

	Year ended December 31, 2024		Year ended December 31, 2023
	Year ended December 31, 2025		Year ended December 31, 2024
Audit fees and expenses	$	125,~~080~~000	$	86125,~~500~~080
Taxation preparation fees		—		—
Audit related fees		—		—
Other fees		—		—
	$	125,~~080~~000	$	86125,~~500~~080

Audit Fees

Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of interim condensed consolidated financial statements included in quarterly reports and services that are normally provided by RBSM, LLP in connection with statutory and regulatory filings or engagements in fiscal year ended December 31, ~~2024~~2025 and ~~2023~~2024.

Audit Related Fees

Consists of fees billed for accounting, assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees”.

Tax Fees

Tax Fees consist of the aggregate fees billed for professional services rendered by our principal accounts for tax compliance, tax advice, and tax planning. These services include preparation for federal and state income tax returns.

All Other Fees

We did not incur any other fees billed by auditors for services rendered to our Company, other than the services listed above for the fiscal years ended December 31, ~~2024~~2025 and ~~2023~~2024, respectively.

1823

PART IV

Item 15. ~~Exhibits, Financial Statement Item 15.~~ Exhibits and Financial Statement Schedules and Reports on Form 10-K

(a) (1) The following financial statements are included in this Annual Report on Form 10-K for the fiscal year ended December 31, ~~2024~~2025

1. Independent Auditor’s Report 2. Consolidated Balance Sheets as of December 31, ~~2024~~2025 and ~~2023~~2024 3. Consolidated Statements of Operations for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 4. Consolidated Statements of Changes in Stockholders’ Deficit for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 5. Consolidated Statements of Cash Flows for the years ended December 31, ~~2024~~2025 and ~~2023~~2024 6. Notes to Consolidated Financial Statements

(2)

All financial statement schedules have been omitted as the required information is either inapplicable or included in the Consolidated Financial Statements or related notes.

(b)

Exhibits

Exhibit No.	Description	Form	SEC File No.	Date	File Herewith	Filed by Reference

3.1	Articles of Incorporation of NNRC, Inc. (as filed with the Secretary of State of Colorado on April 1, 1993)	10-K	000-15078	March 28, 2013		X

3.2	Articles of Amendment to the Articles of Incorporation of Nova Natural Resources, Inc. (as filed with the Secretary of State of Colorado on May 8, 2012)	10-K	000-15078	March 28, 2013		X

3.3	Articles of Amendment to the Articles of Incorporation of Greenestone Healthcare Corporation (as filed with the Secretary of State of Colorado on March 26, 2013)	8-K	000-15078	March 29, 2013		X

3.4	Amended and Restated Bylaws of Greenestone Healthcare Corporation	8-K	000-15078	March 29, 2013		X

3.5	Articles of Amendment to the Articles of Incorporation re: Name Change	8-K	000-15078	April 10, 2017		X

3.6	First amendment to Amended and Restated Bylaws	8-K	000-15078	April 10, 2017		X

4.1	Form of Series L Convertible Note and Warrant Agreement	8-K	000-15078	42740		X

4.2	Form of LABRYS LP Convertible Note Agreement	8-K	000-15078	February 2, 2017		X

10.1	Stock Purchase Agreement I	8-K	000-15078	March 29, 2013		X

10.2	Form of Warrant I	8-K	000-15078	December 30, 2013		X

10.3	Form of Warrant II	8-K	000-15078	December 30, 2013		X

10.4	Stock Purchase Agreement II	8-K	000-15078	December 30, 2013		X

10.5	Share Purchase Agreement, dated as of December 16, 2014 by and between the Registrant and Jainheel Patekh Medical Professional Corporation	8-K	000-15078	December 23, 2014		X

10.6	Collateral Note, Dated December 16, 2014	8-K	000-15078	December 23, 2014		X

10.7	Seastone of Delray Asset Purchase Agreement, Management Services Agreement and Commercial Real Estate Contract	8-K	000-15078	May 23, 2016		X

10.8	Stock Purchase Agreement re: Cranberry Cove Holdings Ltd.	8-K	000-15078	February 17, 2017		X

1924

Exhibit No.	Description	Form	SEC File No.	Date	Filed Herewith	Filed by Reference
16.1	Letter from Jarvis Ryan Associates, LLP 8-K 000-15078	8-K	000-15078	July 19, 2014		X
10.9	Asset Purchase Agreement re: Sale of Muskoka Clinic	8-K	000-15078	February 17, 2017		X
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934.				X
10.10	Lease of Muskoka Clinic	8-K	000-15078	February 17 2017		X
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14 and Rule 15d 14(a), promulgated under the Securities and Exchange Act of 1934.
16.1	Letter from Jarvis Ryan Associates, LLP	8-K	000-15078	July 19, 2014		X
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 18 U.S.C 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002				X
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 18 U.S.C 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002				X
101.INS	Inline XBRL Instance Document				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
101.CAL	Inline Taxonomy Extension CAL XBRL Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X
101	Cover Page Interactive Data File (embedded within the Inline XBRL Document)

31.1	Certification of the Principal Executive Officer and Principal Financial Officer of the registrant pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (Rule 13(a) -14(a) or Rule 15(d( - 14 (a)	X
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 18 U.S.C 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002	X
32.1	Certification of the Principal Executive Officer and Principal Financial Officer pursuant to Rule 18 U.S.C 1350 as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002	X
101.INS	Inline XBRL Instance Document	X
101.SCH	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	Inline Taxonomy Extension CAL XBRL Calculation Linkbase Document	X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
101	Cover Page Interactive Data File (embedded within the Inline XBRL Document)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ETHEMA HEALTH CORPORATION

Date: ~~May 23,~~June ~~2025~~30, 2026

By: /s/ Shawn E. Leon

Name: Shawn E. Leon

Title: Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Position	Date
/s/Shawn E. Leon	Chief Executive Officer (Principal Executive Officer), President and Director	~~May~~June 2330, ~~2025~~2026
Shawn Leon	~~Chief Financial Officer (Principal Financial Officer), President and Director~~
/s/ Gerald T. Miller	Director	May 23, 2025
/s/ James Poage	Chief Financial Officer (Principal Financial Officer)	June 30, 2026
James Poage
/s/ Gerald T. Miller	Director	June 30, 2026
Gerald T. Miller

2126

Filing Compare · ETHEMA HEALTH Corp