Greenbrook Announces $1.2 Million Registered Direct Offering
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The direct offering by Greenbrook TMS Inc. indicates a strategic move to raise capital, likely aimed at funding operational costs or growth initiatives. The offering of 6 million common shares at $0.20 each is a significant event, as it dilutes current shareholders' equity but provides the company with much-needed liquidity. The relatively low share price could suggest that the market may have concerns about the company's future prospects or current financial health.
Investors should be mindful of the potential for short-term stock price volatility following such announcements, as markets react to the dilution effect and reassess the company's valuation. Long-term implications would depend on how effectively Greenbrook utilizes the raised funds. If invested wisely in high-return projects or in shoring up the balance sheet, it could lead to positive outcomes. However, if the capital does not yield expected results, it could further strain the company's financial position.
Greenbrook's decision to raise capital through a registered direct offering can be indicative of its inability to secure more favorable financing options, such as bank loans or private equity investments. This method of capital raising is often quicker and involves fewer regulatory hurdles than a public offering, but it can also reflect a degree of urgency or a lack of alternatives.
Analyzing the industry landscape, if Greenbrook operates within a competitive or rapidly evolving sector, the infusion of capital might be crucial for maintaining its market position or for investing in new technologies. The success of such a strategy would be contingent on the company's ability to execute its business plan effectively and improve its operational efficiencies or market share.
From a legal standpoint, the structured securities purchase agreements must comply with securities regulations, ensuring full disclosure and fair dealing with the investors. The terms of the offering, such as the purchase price and number of shares, have been predetermined, which provides transparency. However, the legal intricacies of such agreements often require careful navigation to avoid future disputes, particularly regarding representations and warranties made by the company.
Investors and stakeholders should be aware that any material misrepresentation or omission in the offering documents could lead to legal liabilities for the company. Therefore, the disclosure documents associated with this offering will be scrutinized by both regulators and investors to safeguard against potential legal issues.
The closing of the offering is expected to occur on or about February 26, 2024, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds for working capital as well as for general corporate purposes.
A.G.P./Alliance Global Partners is acting as the sole placement agent for the offering.
This offering is being made pursuant to an effective shelf registration statement on Form F-3 (File No 333-264067) previously filed with the
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
Operating through 130 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
Certain statements contained in this press release, including statements relating to the expected use of proceeds from the offering, may constitute "forward-looking information" within the meaning of applicable securities laws in
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 Credit Facility and the potential acceleration of indebtedness; risks related to the resolution of the Company's ongoing litigation with Benjamin Klein and compliance with the terms of their 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.ca 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.
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