TORONTO, Nov. 2, 2023
/PRNewswire/ - Greenbrook TMS Inc. (NASDAQ: GBNH)
("Greenbrook" or the "Company") today announced that
it has entered into the eighteenth amendment (the
"Amendment") to the Company's credit facility (the
"Credit Facility") with affiliates of Madryn Asset
Management, LP ("Madryn"). As part of the Amendment, the
Company secured an additional $2,045,685.28 in senior secured term loans from
Madryn under the Credit Facility (the "New Loan"). After
giving effect to the New Loan, the Company has an aggregate amount
of approximately $67.5 million
outstanding under the Credit Facility (collectively, the
"Loans").
The New Loan also provides Madryn with the option to convert up
to approximately US$185,971 of the
outstanding principal amount of the New Loan into common shares of
the Company ("Common Shares") at a conversion price per
share equal to US$1.90 (the
"Conversion Price"), subject to customary anti-dilution
adjustments (the "Conversion Instrument"). This conversion
feature corresponds to the conversion provisions for the Loans
previously issued under the Credit Facility, which provide Madryn
with the option to convert a portion of the outstanding principal
amount of the Loans into Common Shares at the Conversion Price.
After giving effect to the issuance of the Conversion Instrument,
Madryn has the option to convert up to an aggregate of
approximately US$6.1 million of the
outstanding principal amount of the Loans into Common Shares at the
Conversion Price.
The proceeds of the New Loan are expected to be used by the
Company for general corporate and working capital purposes. The
Company is also currently considering additional near-term
financing options to address its future liquidity needs.
MI 61-101 Disclosure
Madryn is an insider of the Company. Accordingly, the foregoing
transactions are considered "related party transactions" for
purposes of Multilateral Instrument 61-101 – Protection of
Minority Security Holders in Special Transactions ("MI
61-101"). The Company is relying on exemptions from the formal
valuation and minority shareholder approval requirements available
under MI 61-101. The Company is exempt from the formal valuation
requirement in section 5.4 of MI 61-101 in reliance on section
5.5(a) of MI 61-101 as the fair market value of the transaction,
insofar as it involves interested parties, is not more than 25% of
the Company's market capitalization. Additionally, the Company is
exempt from the minority shareholder approval requirement in
section 5.6 of MI 61-101 in reliance on section 5.7(1)(a) as the
fair market value of the transaction, insofar as it involves
interested parties, is not more than 25% of the Company's market
capitalization.
About Greenbrook TMS
Inc.
Operating through 133 Company-operated treatment centers,
Greenbrook is a leading provider of Transcranial Magnetic
Stimulation ("TMS") therapy and Spravato® (esketamine nasal
spray), FDA-cleared, non-invasive therapies for the treatment of
Major Depressive Disorder ("MDD") and other mental health
disorders, in the United States.
TMS therapy provides local electromagnetic stimulation to specific
brain regions known to be directly associated with mood regulation.
Spravato® is offered to treat adults with treatment-resistant
depression and depressive symptoms in adults with MDD with suicidal
thoughts or actions. Greenbrook has provided more than 1.2 million
treatments to over 38,000 patients struggling with depression.
Cautionary Note Regarding
Forward-Looking Information
Certain statements contained in this press release, including
statements relating to the New Loan and the expected use of
proceeds therefrom, may constitute "forward-looking information"
within the meaning of applicable securities laws in Canada and "forward-looking statements" within
the meaning of the United States Private Securities Litigation
Reform Act of 1995 (collectively, "forward-looking
information"). Forward-looking information may relate to the
Company's future financial and liquidity outlook and anticipated
events or results and may include information regarding the
Company's business, financial position, results of operations,
business strategy, growth plans and strategies, technological
development and implementation, budgets, operations, financial
results, taxes, dividend policy, plans and objectives.
Particularly, information regarding the New Loan and the expected
use of proceeds therefrom may be forward-looking information. In
some cases, forward-looking information can be identified by the
use of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "is expected", "an opportunity
exists", "budget", "scheduled", "estimates", "outlook",
"forecasts", "projection", "prospects", "strategy", "intends",
"anticipates", "does not anticipate", "believes", or variations of
such words and phrases or statements that certain actions, events
or results "may", "should", "could", "would", "might", "will",
"will be taken", "occur" or "be achieved". In addition, any
statements that refer to expectations, intentions, projections or
other characterizations of future events or circumstances contain
forward-looking information. Statements containing forward-looking
information are not facts but instead represent management's
expectations, estimates and projections regarding future events or
circumstances.
Forward-looking information is necessarily based on a number of
opinions, assumptions and estimates that, while considered
reasonable by the Company as of the date of this press release, are
subject to known and unknown risks, uncertainties, assumptions and
other factors that may cause the actual results, level of activity,
performance or achievements or future events or developments to
differ materially from those expressed or implied by the
forward-looking statements, including, without
limitation: macroeconomic factors such as inflation and
recessionary conditions, substantial doubt regarding the Company's
ability to continue as a going concern due to recurring losses from
operations; inability to increase cash flow and/or raise sufficient
capital to support the Company's operating activities and fund its
cash obligations, repay indebtedness and satisfy the Company's
working capital needs and debt obligations; prolonged decline in
the price of the Common Shares reducing the Company's ability to
raise capital; inability to satisfy debt covenants under the Credit
Facility and the potential acceleration of indebtedness; including
as a result of an unfavorable decision in respect of the litigation
with Benjamin Klein; risks related
to the ability to continue to negotiate amendments to the Credit
Facility to prevent a default; risks relating to the Company's
ability to deliver and execute on the previously-announced
restructuring plan (the "Restructuring Plan") and the
possible failure to complete the Restructuring Plan on terms
acceptable to the Company or its suppliers (including Neuronetics,
Inc.), or at all; risks relating to maintaining an active, liquid
and orderly trading market for Common Shares as a result of the
Company's potential inability to regain compliance with the Nasdaq
Stock Market's listing rules; risks relating to the Company's
ability to realize expected cost-savings and other anticipated
benefits from the Restructuring Plan; risks related to the
Company's negative cash flows, liquidity and its ability to secure
additional financing; increases in indebtedness levels causing a
reduction in financial flexibility; inability to achieve or sustain
profitability in the future; inability to secure additional
financing to fund losses from operations and satisfy the Company's
debt obligations; risks relating to strategic alternatives,
including restructuring or refinancing of the Company's debt,
seeking additional debt or equity capital, reducing or delaying the
Company's business activities and strategic initiatives, or selling
assets, other strategic transactions and/or other measures,
including obtaining bankruptcy protection, and the terms, value and
timing of any transaction resulting from that process; claims made
by or against the Company, which may be resolved unfavorably to us;
risks relating to the Company's dependence on Neuronetics, Inc. as
its exclusive supplier of TMS devices. Additional risks and
uncertainties are discussed in the Company's materials filed with
the Canadian securities regulatory authorities and the United
States Securities and Exchange Commission from time to time,
available at www.sedarplus.com and www.sec.gov, respectively. These
factors are not intended to represent a complete list of the
factors that could affect the Company; however, these factors
should be considered carefully. There can be no assurance that such
estimates and assumptions will prove to be correct. The
forward-looking statements contained in this press release are made
as of the date of this press release, and the Company expressly
disclaims any obligation to update or alter statements containing
any forward-looking information, or the factors or assumptions
underlying them, whether as a result of new information, future
events or otherwise, except as required by law.
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SOURCE Greenbrook TMS Inc.