TORONTO, Aug. 1, 2023
/PRNewswire/ - Greenbrook TMS Inc. (NASDAQ: GBNH)
("Greenbrook" or the "Company") today announced that
it has received US$2.0 million in
debt financing under its Credit Facility (as defined below) agented
by Madryn Fund Administration, LLC ("Madryn"), and
US$1.0 million in debt financing from
Greybrook Health Inc. ("Greybrook Health"), one of the
Company's existing significant shareholders (collectively, the
"Debt Financing"), in order to manage the company's current
liquidity requirements.
Madryn Debt Financing
The Company announces that it has entered into an amendment (the
"Credit Facility Amendment") to its previously-announced
credit facility with Madryn (the "Credit Facility"), whereby
certain affiliates of Madryn have extended an additional tranche of
debt financing to the Company in an aggregate principal amount of
US$2.0 million, which was
fully-funded at closing (the "New Loan"). The terms and
conditions of the New Loan are consistent with the terms and
conditions of the Company's existing aggregate US$61 million loan (plus fees and accrued
interest) under the Credit Facility (the "Existing Loan"
and, together with the New Loan, the "Madryn Loans") in all
material respects.
The New Loan also provides Madryn with the option to convert up
to approximately US$182,000 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 its Existing
Loan, which provide Madryn with the option to convert a portion of
the outstanding principal amount of the Existing Loan into Common
Shares at the Conversion Price.
The Credit Facility Amendment also provides that the entire
amount of the interest payment due on June
30, 2023, which was previously deferred under prior
amendments to the Credit Facility, will be paid in-kind and be
added to the outstanding principal amount of the Existing Loan. The
Credit Facility 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 August 15,
2023.
Greybrook Debt Financing
The Company also announces that, alongside the New Loan, it has
entered into a note purchase agreement (the "Note Purchase
Agreement") with Greybrook Health whereby the Company has
issued and sold US$1.0 million
aggregate principal amount of an unsecured note (the "Note")
to Greybrook Health (the "Note Purchase"). The Note bears
interest at a rate consistent with the Credit Facility and matures
on September 30, 2027. The Note is
subordinated to the Madryn Loans.
As additional consideration for the Note Purchase, Greenbrook
has issued 250,000 common share purchase warrants to Greybrook
Health (the "Warrants"). Each Warrant will be exercisable
for one Common Share at an exercise price equal to (a) if the
Common Shares are listed on the Nasdaq or any other
trading market at the time of exercise, 85.0% of the
volume-weighted average trading price of the Common Shares on
the Nasdaq (or, if not listed on Nasdaq, then such other trading
market on which the Common Shares are principally traded,
based upon daily share volume) for the five trading days
immediately preceding the exercise date, or (b) if the Common
Shares are not listed on any trading market at the time of
exercise, a per share price based on fair market value, as
determined by the board of directors of the Company, in each
case subject to customary anti-dilution adjustments. The
Warrants will expire five years from the date of issuance.
The proceeds of the New Loan, the Note, the Conversion
Instrument and the Warrants (collectively, together with the
underlying Common Shares, the "Securities") 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.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of any
of the Securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The Securities have not
been and will not be registered under the U.S. Securities Act of
1933, as amended (the "U.S. Securities Act") or any state
securities laws and may not be offered or sold within the United States or to, or for account or
benefit of, U.S. persons (as defined in Regulation S under the U.S.
Securities Act) except pursuant to an available exemption under the
U.S. Securities Act and compliance with, or exemption from,
applicable U.S. state securities laws.
MI 61-101 Disclosure
Mardyn and Greybrook Health are insiders of the Company.
Accordingly, the Debt Financing is considered a "related party
transaction" 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 one million treatments
to over 32,000 patients struggling with depression.
Cautionary Note Regarding
Forward-Looking Information
Certain statements contained in this press release, including
statements regarding the Debt Financing and the Securities, and the
expected use of proceeds therefrom, as well as the ability to
obtain future financing to satisfy its near-term liquidity needs,
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
transactions described herein, 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. 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, estimates and assumptions that the Company considered
appropriate and reasonable as of the date such statements were
made. It is also 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, challenges related to
raising additional financing, risks relating to our ability to
satisfy cash requirements necessary to operate our business and
remain in compliance with the Credit Facility, macroeconomic
factors such as inflation and recessionary conditions, as well as
the 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, 2022, in the
"Risks and Uncertainties" section of the Company's management's
discussion and analysis for the three months ended March 31, 2023 and 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.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.