Additionally, the Amendment gives Madryn the option to convert common shares of the company (“Common Shares”) at a conversion price per share of US$1.90 (the “Conversion Price”), subject to customary anti-dilution adjustments (the “Conversion Instrument”), into up to approximately US$231,656 of the outstanding principal amount of the New Loan. This conversion feature is equivalent to the conversion clauses in the Loans that were previously made available under the Credit Facility. These clauses provide Madryn the choice to convert some of the Loans’ outstanding principal into Common Shares at the Conversion Price. Madryn may elect to convert up to a total of about US$6.3 million of the Loans’ outstanding principal amount upon the issuing of the Conversion Instrument.
The Amendment further postpones the interest payment deadline of September 30, 2023, and also extends until December 8, 2023, the time during which the Company’s minimum liquidity covenant will be lowered from US$3,000,000 to US$300,000.
The Company anticipates using the New Loan proceeds for working capital and other business purposes. Additionally, the company is now thinking about other short-term financing solutions to meet its demands for liquidity in the future.
Madryn works for the company as an insider. For the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions, the aforementioned transactions are thus regarded as “related party transactions” (“MI 61-101”). The business is depending on MI 61-101’s exemptions from the formal valuation and minority shareholder approval procedures. By virtue of section 5.5(a) of MI 61-101, the Company is exempt from the formal valuation requirement in section 5.4 of MI 61-101, provided that the fair market value of the transaction, to the extent that it includes interested parties, does not exceed 25% of the Company’s market capitalization. Furthermore, because the Company relies on section 5.7(1)(a) as the fair market value, it is immune from the minority shareholder approval requirement in section 5.6 of MI 61-101.
With 133 treatment facilities run by the Company, Greenbrook is a top US supplier of FDA-approved, non-invasive treatments for Major Depressive Disorder (“MDD”) and other mental health conditions, including Spravato® (esketamine nasal spray) and Transcranial Magnetic Stimulation (“TMS”) therapy. With TMS treatment, some brain areas that are intimately linked to mood control get local electromagnetic stimulation. Adults with MDD who exhibit suicidal thoughts or behaviours and depressed symptoms who are resistant to therapy can be treated with Spravato®. Greenbrook has treated over 40,000 individuals with depression with over 1.3 million treatments.
Some of the statements in this press release, such as those about the New Loan and how the proceeds are expected to be used, might be considered “forward-looking information” under Canadian securities laws and “forward-looking statements” under the US Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking information”). Information about the Company’s operations, financial condition, business strategy, development goals, and strategies, as well as information about expected events or outcomes, may be considered forward-looking information. It may also pertain to the Company’s future financial and liquidity prospects.
technology advancement and application, financial outcomes, operations, taxes, dividend policy, plans, and goals. Information on the New Loan in particular, as well as how the proceeds are anticipated to be used, may be forward-looking. Certain terms, like “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 statements that certain actions, events, or results “may”, “should”, “could”, “might”, “will”, “will”, “will be taken”, “occur” or “be achieved” can be used to identify forward-looking information in certain situations.
The Company’s assessment of the reasonableness of the opinions, assumptions, and estimates used in the preparation of this press release does not exempt it from known and unknown risks, uncertainties, and other factors that could materially differ from those expressed or implied in the forward-looking statements the actual results, level of activity, performance, or achievements, or future events or developments, from being materially different. These factors include, but are not limited to,
a protracted decline in the price of the common shares, which would have reduced the company’s ability to raise capital; an inability to comply with the terms of the credit facility’s debt covenants and the potential acceleration of the company’s debt, including as a result of an unfavourable ruling in the lawsuit with Benjamin Klein; Risks associated with the Company’s ability to deliver and carry out the previously announced restructuring plan (the “Restructuring Plan”) and the potential failure to complete the Restructuring Plan on terms acceptable to the Company or its suppliers (including Neuronetics, Inc.); risks associated with the ability to continue negotiating amendments to the Credit Facility to prevent a default; risks associated with maintaining an active,