TORONTO,
Jan. 19,
2024 /CNW/ - Greenbrook TMS Inc. (NASDAQ: GBNH)
("Greenbrook" or the "Company") today announced that
it has entered into the twenty-third 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$1,522,843 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$83 million
outstanding under the Credit Facility (collectively, the
"Loans").
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.
The Company also announces that Madryn has
agreed to extend the period during which the Company's minimum
liquidity covenant under the Credit Facility is reduced from
US$3,000,000 to US$300,000 to February 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"). The foregoing transactions were reviewed and
unanimously approved by the independent members of the board of
directors of the Company. The New Loan, which is not convertible
into securities of Greenbrook, is exempt from the minority approval
requirements under section 5.7(1)(f) of MI 61-101 because the New
Loan is on reasonable commercial terms that are not less
advantageous to the Company than alternative financings that may
have been available at the time that terms were agreed with Madryn.
Furthermore, a formal valuation is not required under MI 61-101 as
the foregoing transactions are not the type of related party
transaction that requires a formal valuation.
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 Company's common shares (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.ca 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.