Ethema Health Corporation released its Q1 2025 financial results showing substantial revenue growth primarily driven by the recent acquisition of Aria Kentucky operations while facing increased operating expenses that resulted in higher operating losses. The company reported overall revenue growth from $1.300 million to $3.518 million, with $2.802 million coming from the newly acquired Aria Kentucky operations and existing Florida operations revenue growing by 10.5% to $1.437 million.
The company's operating expenses increased significantly from $1.529 million to $4.165 million, with personnel costs representing the largest component of this increase, rising from $0.727 million to $2.063 million. Rental expense also saw substantial growth from $0.265 million to $0.740 million, primarily due to the addition of Kentucky facilities. These increased expenses resulted in an operating loss increasing from $0.229 million to $0.647 million for the quarter.
Despite the increased operating losses, the company reported encouraging cash flow improvements, with cash utilized in operations decreasing from $0.106 million to $0.073 million. This reduction occurred despite the significant acquisition and launch of the Boca Raton facility, indicating improved operational management during the expansion phase. Interest expense and debt discount expense increased from a combined $0.156 million to $0.428 million, primarily due to interest-bearing assumed liabilities and debt funding used for the Aria Kentucky acquisition.
CEO Shawn Leon reported that Florida facilities operated at near capacity in July, while Kentucky facilities reached maximum capacity in their currently online residential facilities in August. The company brought an additional facility in Paducah, Kentucky online in August and expects to bring another dormant residential facility in Morehead, Kentucky online in November. Construction is underway on the ARIA Kentucky new head office in Morehead, with completion expected in December 2025.
The company experienced significant audit review delays but expects to complete Q2 2025 and Q3 2025 reviews within the next 30 to 45 days. Once these reviews are completed and filed, Ethema will restore its trading status on the OTC-ID market. The company anticipates showing very significant revenue increases in upcoming quarters, with approximately 40% growth from Q1 to Q2 and another approximately 10% increase from Q2 to Q3.
Leon emphasized the successful integration of Kentucky operations, attributing the smooth transition to dedicated teams in both Florida and Kentucky. The company received excellent results from its Joint Commission audit in Florida, while the new Kentucky entity will undergo its first CARF accreditation audit at the end of October. The company continues to optimize both Florida and Kentucky assets while increasing patient count across facilities to improve profitability prospects.
