Greenbrook TMS Inc. (TSX: GTMS) (NASDAQ: GBNH) (“Greenbrook” or the “Company”), announces today that it has received an aggregate of US$2.75 million in debt financing from its existing lender, Madryn Asset Management, LP (“Madryn”), alongside certain of the Company’s existing significant shareholders and management.
Madryn Debt Financing
The Company announces that it has entered into an amendment to its previously-announced credit facility with Madryn (the “Credit Facility”), whereby Madryn and its affiliated entities 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$55.0 million loan under the Credit Facility (the “Existing Loan”) 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 at a conversion price per share equal to US$1.90 (the “Conversion Price”), subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange (“TSX”). This conversion feature corresponds to the conversion provisions for its Existing Loan, which provide Madryn with the option to convert the outstanding principal amount of the Existing Loan into common shares of the Company at the Conversion Price.
Shareholder Loans
The Company also announces that, alongside the New Loan, it has entered into a note purchase agreement (the “Note Purchase Agreement”) with certain significant shareholders and management of the Company (the “Noteholders”) whereby the Company has issued US$750,000 aggregate principal amount of unsecured notes (the “Notes”) to the Noteholders. The Notes bear interest at a rate consistent with the Credit Facility and mature on September 30, 2027.
Under the terms of the Note Purchase Agreement, the Company has the option to issue and sell to the Noteholders during the next six months up to an additional US$1.0 million aggregate principal amount of additional Notes on the same terms, subject to the prior consent of the Noteholders.
The proceeds of the New Loan and the Notes are expected to be used by the Company for general corporate and working capital purposes.
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 Notes 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.
