TORONTO, Nov. 21,
2023 /CNW/ - Greenbrook TMS Inc. (NASDAQ: GBNH)
("Greenbrook" or the "Company") announced today that
the Company has entered into a settlement agreement with the
plaintiff regarding the previously-announced breach of contract
claim in connection with an approximately $2
million promissory note that was issued to a lender
associated with Mr. Benjamin Klein,
a seller of Check Five LLC (doing business as "Success TMS"), that
the Company acquired in July 2022 (the "Klein Note
Action"). Under the terms of the settlement agreement, the
Company will make payments to the plaintiff in the total amount of
approximately $2.2 million,
structured as an initial immediate payment of $250,000, weekly payments of $75,000 thereafter up to and until the
May 1, 2024 maturity date of the
promissory note, upon which the balance owing will be due. In
exchange for entry into the settlement agreement, the plaintiffs
will immediately dismiss, with prejudice, the Klein Note Action and
both parties will provide a mutual release of claims.
Contemporaneous with, but not included in the settlement
agreement, the parties have also agreed to stay the separate
complaint concerning alleged disputes arising out of
the purchase agreement for the acquisition of Success TMS and other
related matters (the "Purchase Agreement Claims" and,
collectively with the Klein Note Action, the "Klein
Matters") for up to six months, subject to court approval.
Mr. Benjamin Klein, a seller of
Success TMS and a plaintiff in the Klein Matters, is a former
director and a significant shareholder of Greenbrook. Mr. Klein was
also the Chief Operating Officer of Greenbrook from July 2022 until his termination by the Company
effective May 4, 2023.
About Greenbrook TMS
Inc.
Operating through 130 Company-operated treatment centers,
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 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 Klein Matters and the Settlement
Agreement, 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 status of the Klein Matters
and compliance with the terms of the settlement agreement, 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 Company's credit
facility with Madryn Asset Management, LP (the "Credit
Facility") and the potential acceleration of indebtedness;
risks related to resolution of the Purchase Agreement Claims and
compliance with the terms of the 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.
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SOURCE Greenbrook TMS Inc.