TORONTO, April 3,
2023 /CNW/ - Greenbrook TMS Inc. (NASDAQ: GBNH)
("Greenbrook" or the "Company") today announced that
the Company has amended its amended and restated master sales
agreement (the "Master Agreement") between the Company and
Neuronetics, Inc. ("Neuronetics"), pursuant to which the
Company and Neuronetics have agreed to convert the Company's
outstanding account balance payable to Neuronetics for the supply
of TMS devices and treatment sessions to the Company from
Neuronetics in the amount of approximately US$5.7 million (as of December 7, 2022) (the "December Outstanding
Balance"), together with Neuronetics' out-of-pocket transaction
costs, into a US$6.0 million secured
promissory note (the "Neuronetics Note"). The Neuronetics
Note, together with the Company's recently-announced restructuring
plan (the "Restructuring Plan") and US$8.25 million equity and debt financings, is
expected to provide additional cash flow relief to the Company.
All amounts borrowed under the Neuronetics Note will bear
interest at a rate equal to the sum of (a) the floating interest
rate of daily secured overnight financing rate as administered by
the Federal Reserve Bank of New
York on its website, plus (b) 7.65%. The Neuronetics Note
matures on March 31, 2027.
Pursuant to the terms of the Neuronetics Note, in the event of
an event of default under the Neuronetics Note, Greenbrook will be
required to issue common share purchase warrants
("Warrants") to Neuronetics equal to (i) 200% of the unpaid
amount of any delinquent amount or payment due and payable under
the Neuronetics Note, together with all outstanding and unpaid
accrued interest, fees, charges and costs, divided by (ii) the
exercise price of the Warrants, which will represent a 20% discount
to the 30-day volume-weighted average closing price of the
Company's common shares traded on the Nasdaq Stock Market
("Nasdaq") prior to the date of issuance (subject to any
limitations that may be required by Nasdaq).
Under the Master Agreement and the Neuronetics Note, the Company
has granted Neuronetics a security interest in all of the Company's
assets.
Additionally, under the Master Agreement, the Company is
required to pay all costs to relocate the TMS devices supplied by
Neuronetics from the treatment centers that are closed in
connection with the Restructuring Plan and install such TMS devices
in the Company's treatment centers that remain open; and the
Company will be required to purchase monthly treatment sessions
from Neuronetics at an aggregate purchase price of approximately
US$450,000 per month.
About Greenbrook TMS
Inc.
Operating through 133 Company-operated treatment centers
(following completion of the Restructuring Plan), Greenbrook is a
leading provider of Transcranial Magnetic Stimulation
("TMS") 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 one million
treatments to over 27,000 patients struggling with depression.
Cautionary Note Regarding Forward-Looking Information
Certain information in this press release, including statements
with respect to the statements with respect to the Master
Agreement, the Neuronetics Note, including the cash flow relief
expected to result from the Neuronetics Note and the potential
issuance of Warrants under the Neuronetics Note, constitutes
forward-looking information within the meaning of applicable
securities laws in Canada and
the United States, including the
United States Private Securities Litigation Reform Act of 1995. In
some cases, but not necessarily in all 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", "is positioned",
"estimates", "intends", "assumes", "anticipates" or "does not
anticipate" or "believes", or variations of such words and phrases
or state that certain actions, events or results "may", "could",
"would", "might", "will" or "will be taken", "occur" or "be
achieved". In addition, any statements that refer to expectations,
projections or other characterizations of future events or
circumstances contain forward-looking information. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events.
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 to be materially different from those
expressed or implied by such forward-looking information,
including, but not limited to, 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 our operating activities
and fund our cash obligations, repay our indebtedness and satisfy
our working capital needs; inability to satisfy debt covenants
under our credit facility or the Neuronetics Note and the potential
acceleration of indebtedness; the possible failure to complete the
Restructuring Plan on terms acceptable to us or our suppliers
(including Neuronetics), or at all; risks relating to our 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; risks relating to our dependence on
Neuronetics as our exclusive supplier of TMS devices; and the other
factors described in greater detail in the "Risk Factors" section
of the Company's annual report on Form 20-F for the fiscal year
ended December 31, 2021, in the
"Risks and Uncertainties" section of the Company's management's
discussion and analysis for the three and nine months ended
September 30, 2022, and in the
Company's other materials filed with the Canadian securities
regulatory authorities and the United States Securities and
Exchange Commission from time to time, available at www.sedar.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.