Greenbrook TMS announced that it has (i) completed a non-brokered private placement of common shares of the company for aggregate gross proceeds of approximately $6.25 million, and (ii) entered into amendments to its credit facility with Madryn Asset Management, LP and affiliates thereof whereby Madryn has agreed to extend 2 additional tranches of debt financing to the company in an aggregate principal amount of $2 million (the new loan).
Private Placement
Pursuant to the private placement, an aggregate of 11,363,635 common shares were issued at a price of US$0.55 per share, for aggregate gross proceeds to the company of approximately US$6.25 million. This private placement included investments by Madryn, together with certain of the company’s other major shareholders, including Greybrook Health and affiliates of Masters Special Situations LLC.
The company plans to use the proceeds from the private placement to finance the company’s previously announced ongoing restructuring plan as well as for working capital and general corporate purposes, which could include the repayment of indebtedness. In connection with the private Placement, all investors have received customary registration rights.
Madryn Debt Financing
Madryn has agreed to extend 2 additional tranches of the New Loan to the company, each in the amount of $1 million, representing an aggregate principal amount of $2 million. And $1 million of the new loan was funded prior to closing of the Private Placement, with the balance expected to be funded by the end of the month.
The terms and conditions of the new loan are consistent with the terms and conditions of the company’s existing aggregate $59 million loan under the credit facility in all material respects.
The new loan also provides Madryn with the option to convert up to approximately $182,000 of the outstanding principal amount of the new loan into Common Shares at a conversion price per share equal to US$1.90, subject to customary anti-dilution adjustments.
This conversion feature corresponds to the conversion provisions for the existing loan, which provide Madryn with the option to convert up to approximately $5.4 million of the outstanding principal amount of the existing loan into Common Shares at the Conversion Price.
After giving effect to the new loan, an aggregate of approximately $5.6 million of the Madryn Loan is convertible into common shares at the Conversion Price.
Following the completion of the private placement and the new loan and in conjunction with anticipated cost savings from the restructuring plan, the company plans to continue to explore additional options to enhance and strengthen its liquidity position and enable the company to meet its cash requirements.
