GREENBROOK TMS ANNOUNCES DELISTING FROM NASDAQ
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- Greenbrook TMS Inc. faces delisting from Nasdaq due to non-compliance with listing requirements, potentially impacting investor confidence and liquidity of common shares.
Insights
The delisting of Greenbrook TMS Inc. from the Nasdaq Stock Market is a significant financial event with material implications for the company's stock liquidity and investor perception. Typically, when a company is delisted due to non-compliance with listing standards, such as minimum bid price or stockholders' equity, it reflects underlying financial distress or operational challenges. Delisting can lead to reduced visibility among investors and analysts, which often results in lower trading volumes and potentially higher volatility due to a thinner market for the shares.
For current shareholders, the transition to the OTC Markets could mean a change in the trading environment. OTC Markets are generally considered less prestigious and less regulated than major exchanges like Nasdaq, which can affect investor confidence. Furthermore, institutional investors may have mandates that prevent them from holding stocks not listed on major exchanges, potentially leading to a sell-off. This event could also impact the company's ability to raise capital in the future, as being listed on a major exchange is often a prerequisite for certain types of financing deals.
The delisting notice received by Greenbrook TMS Inc. indicates a period of underperformance in terms of stock price and possibly the company's financial health. A stock's failure to meet Nasdaq's minimum bid price requirement suggests that investor interest and confidence might be waning. This could be due to various factors such as unsatisfactory financial performance, competitive disadvantages, or broader market trends affecting the sector.
Moreover, the decision not to appeal the delisting notice suggests that the company's management is either confident in their ability to operate and raise capital outside of the major exchanges or possibly that they acknowledge the challenges in reversing the current stock price trajectory. Transitioning to OTC Markets can sometimes be a strategic move to reduce regulatory costs and complexities associated with major exchange listings, but it also raises questions about the company's growth prospects and long-term strategy.
Greenbrook TMS Inc.'s delisting and the subsequent filing of a Form 25-NSE with the SEC is a legal process that formalizes the removal of the company's common shares from Nasdaq and their registration under Section 12(b) of the U.S. Securities Exchange Act of 1934. This step is the culmination of a regulatory pathway outlined by Nasdaq for companies that fail to meet listing requirements. The legal implications for the company include a shift in reporting requirements and compliance obligations, as the regulatory framework for OTC Markets is different from that of Nasdaq.
Shareholders should be aware that while the OTC Markets provide an alternative platform for trading, the oversight and investor protections are not as stringent as those on Nasdaq. This could potentially expose investors to higher risks. Companies trading on OTC Markets still have to comply with SEC regulations, but the frequency and detail of financial reporting may differ, which could impact the transparency and information available to investors for making informed decisions.
The Company intends to quote the Common Shares on OTC Markets as soon as practicable following the suspension of its Common Shares on Nasdaq.
Nasdaq has informed the Company that it will file a Form 25-NSE with the
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 Company's intention to quote the Common Shares on OTC Markets, 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 Common Shares reducing the Company's ability to raise capital; inability to satisfy debt covenants under the Company's credit facility with affiliates of Madryn Asset Management, LP (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 forthcoming delisting from Nasdaq; 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 SEC 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.
FAQ
Why did Greenbrook TMS Inc. receive a delisting notice from Nasdaq?
When will the trading of Greenbrook TMS Inc. common shares be suspended?
What is Greenbrook TMS Inc.'s plan after the suspension of its common shares on Nasdaq?
Is Greenbrook TMS Inc. appealing Nasdaq's decision?
