TORONTO, Dec. 15,
2023 /PRNewswire/ - Greenbrook TMS Inc. (NASDAQ:
GBNH) ("Greenbrook" or the "Company") today announced
that it has entered into the twenty-first 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 US$4,015,548.22 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 US$76 million
outstanding under the Credit Facility (collectively, the
"Loans").
The proceeds of the New Loan is expected to be used by the
Company to fund certain debt service obligations of the Company and
for general corporate and working capital purposes. The Company is
also currently considering additional near-term financing options
to address its future liquidity needs.
The Amendment also provides Madryn with the option to convert up
to approximately US$365,050 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$7.0 million of the
outstanding principal amount of the Loans into Common Shares at the
Conversion Price.
The Amendment also extends the period during which the Company's
minimum liquidity covenant is reduced from US$3,000,000 to US$300,000 to January 15,
2024.
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") which, absent any
available exemption, would require a formal valuation and
minority approval under MI 61-101. The board of directors of
the Company (including all independent directors) unanimously
determined in good faith that the Company may rely on
the "financial hardship" exemption from the formal valuation
and minority approval requirements set out in Section 5.5(g)
and Section 5.7(e) of MI 61-101 with respect to such
transactions, given that the Company is in serious financial
difficulty, the transactions are designed to improve the
financial position of the Company, and the exemption provided for
in Section 5.5(f) of MI 61-101 is not available, as the
transactions contemplated are not subject to court approval under
bankruptcy or insolvency law. In addition, the Company has one
or more independent directors who have determined that the terms
and conditions of the transactions are reasonable for
the Company in the circumstances and are in its best
interests. Further information required by MI 61-101 in
connection with the foregoing transactions will be set forth in the
Company's material change report to be filed under the Company's
issuer profile on SEDAR+ at www.sedarplus.com if and as required by
MI 61-101. The material change report will be filed less than 21
days before the closing of the foregoing transactions, as the
shorter period was necessary in order to permit the Company to
complete the transactions in a timeframe consistent with usual
market practice for transactions of this nature and in order to
expeditiously address the Company's immediate liquidity needs.
About Greenbrook TMS Inc.
Operating through 130 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 1.3 million
treatments to over 40,000 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; risks
related to the resolution of the Company's ongoing litigation with
Benjamin Klein and compliance with
the terms of their settlement agreement; 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 recent
delisting notification and 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.
View original
content:https://www.prnewswire.com/news-releases/greenbrook-tms-raises-us4-0-million-in-debt-financing-302017095.html
SOURCE Greenbrook TMS Inc.