(State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class |
Trading Symbol (s) |
Name on each exchange on which registered | ||
NEURONETICS, INC. | ||||||
| (Registrant) | ||||||
| Date: February 6, 2025 | By: | /s/ Stephen Furlong | ||||
| Name: | Stephen Furlong | |||||
| Title: | EVP, Chief Financial Officer and Treasurer | |||||
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Neuronetics, Inc.
We consent to the use of our report dated April 25, 2024, on the consolidated financial statements of Greenbrook TMS Inc. (and subsidiaries), which comprise the consolidated balance sheets as at December 31, 2023 and December 31, 2022, the related consolidated statements of comprehensive loss, changes in equity (deficit) and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes, which is included in this Form 8-K/A of Neuronetics, Inc. (the Company).
We also consent to the incorporation by reference of such report in the Registration Statement (No. 333-266617) on Form S-3 and the Registration Statements (Nos. 333226343, 333-252233, 333-266606 and 333-284691) on Form S-8 of the Company.
/s/ KPMG LLP
Chartered Professional Accountants, Licensed Public Accountants
February 6, 2025
Vaughan, Canada
| September 30, 2024 |
December 31, 2023 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash |
$ | $ | ||||||
| Restricted cash |
||||||||
| Accounts receivable, net (note 19(b)) |
||||||||
| Prepaid expenses and other |
||||||||
| |
|
|
|
|||||
| Total current assets |
||||||||
| Property, plant and equipment (note 5) |
||||||||
| Intangible assets (note 6) |
||||||||
| Finance right-of-use |
||||||||
| Operating right-of-use |
||||||||
| |
|
|
|
|||||
| Total assets |
$ | $ | ||||||
| |
|
|
|
|||||
| Liabilities and Shareholders’ Deficit |
||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued liabilities (note 8) |
$ | $ | ||||||
| Current portion of loans payable (note 9(a)) |
||||||||
| Current portion of finance lease liabilities (note 7(a)) |
||||||||
| Current portion of operating lease liabilities (note 7(b)) |
||||||||
| Current portion of shareholder loans (note 10) |
||||||||
| Other payables (note 11) |
||||||||
| Non-controlling interest loans (note 9(b)) |
||||||||
| Deferred and contingent consideration (note 12) |
||||||||
| Advance for research collaboration (note 13) |
— | |||||||
| |
|
|
|
|||||
| Total current liabilities |
||||||||
| Loans payable (note 9(a)) |
||||||||
| Finance lease liabilities (note 7(a)) |
||||||||
| Operating lease liabilities (note 7(b)) |
||||||||
| Shareholder loans (note 10) |
— | |||||||
| |
|
|
|
|||||
| Total liabilities |
||||||||
| Shareholders’ deficit: |
||||||||
| Common shares (note 14) |
||||||||
| Contributed surplus (note 15) |
||||||||
| Deficit |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total shareholders’ deficit excluding non-controlling interest |
( |
) | ( |
) | ||||
| Non-controlling interest (note 23) |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total shareholders’ deficit |
( |
) | ( |
) | ||||
| Basis of preparation and going concern (note 2(a)) |
||||||||
| Contingencies (note 16) |
||||||||
| Subsequent events (notes 2(a) and 25) |
||||||||
| Related party transactions (note 21) |
||||||||
| |
|
|
|
|||||
| Total liabilities and shareholders’ deficit |
$ | $ | ||||||
| |
|
|
|
|||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|||||||||||||
| Revenue: |
||||||||||||||||
| Service revenue |
$ | $ | $ | $ | ||||||||||||
| Other revenue |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Expenses: |
||||||||||||||||
| Direct center and patient care costs |
||||||||||||||||
| Other regional and center support costs (note 24) |
||||||||||||||||
| Depreciation (notes 5 and 7) |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Regional operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Center development costs |
||||||||||||||||
| Corporate, general and administrative expenses (note 24) |
||||||||||||||||
| Share-based compensation (note 15) |
||||||||||||||||
| Amortization (note 6) |
||||||||||||||||
| Interest expense |
||||||||||||||||
| Interest income |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Loss on extinguishment of loans (note 10(a)) |
— | — | ||||||||||||||
| Loss on device contract termination (note 11 (d)) |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Loss before income taxes |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Income tax expense (note 18) |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Loss for the period and comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Non-controlling interest (note 23) |
( |
) | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Loss for the period and comprehensive loss attributable to Greenbrook |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Net loss per share (note 22): |
||||||||||||||||
| Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Diluted |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Common shares | Contributed surplus |
Deficit | Non- controlling interest |
Total equity (deficit) |
||||||||||||||||||||
| Nine months ended September 30, 2023 |
Number | Amount | ||||||||||||||||||||||
| Balance, December 31, 2022 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| Issuance of common shares (note 14) |
— | — | — | |||||||||||||||||||||
| Issuance of lender warrants |
— | — | — | — | ||||||||||||||||||||
| Acquisition of subsidiary non-controlling interest (note 23) |
— | — | — | ( |
) | — | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, March 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, June 30, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| Issuance of common shares (note 14) |
— | — | — | |||||||||||||||||||||
| Issuance of lender warrants |
— | — | — | — | ||||||||||||||||||||
| Gain on extinguishment of shareholder loan |
— | — | — | — | ||||||||||||||||||||
| Acquisition of subsidiary non-controlling interest (note 23) |
— | — | — | ( |
) | ( |
) | |||||||||||||||||
| Distribution to non-controlling interest |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, September 30, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Common shares | Contributed surplus |
Deficit | Non- controlling interest |
Total equity (deficit) |
||||||||||||||||||||
| Nine months ended September 30, 2024 |
Number | Amount | ||||||||||||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| Issuance of common shares (note 14) |
— | — | — | |||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, March 31, 2024 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | ( |
) | |||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| Distribution to non-controlling interest |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
| Acquisition of subsidiary non-controlling interest (note 23) |
— | — | — | ( |
) | ( |
) | |||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, June 30, 2024 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||||||||
| Net comprehensive loss for the period |
— | — | — | ( |
) | ( |
) | |||||||||||||||||
| Share-based compensation (note 15) |
— | — | — | — | ||||||||||||||||||||
| Surrender and cancellation of common shares – PA Settlement Agreement (note 14) |
( |
) | — | — | — | — | — | |||||||||||||||||
| Distributions to non-controlling interests |
— | — | — | — | ( |
) | ( |
) | ||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Balance, September 30, 2024 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Nine months ended | ||||||||
| September 30, 2024 |
September 30, 2023 |
|||||||
| Cash provided by (used in) |
||||||||
| Operating activities: |
||||||||
| Loss for the period |
$ | ( |
) | $ | ( |
) | ||
| Adjusted for: |
||||||||
| Amortization |
||||||||
| Depreciation |
||||||||
| Operating lease expense |
||||||||
| Interest expense |
||||||||
| Interest income |
( |
) | ( |
) | ||||
| Share-based compensation |
||||||||
| Loss on extinguishment of loan |
— | |||||||
| Loss on device contract termination (note 11(d)) |
— | |||||||
| Credit facility amendment fee (note 9(a)) |
— | |||||||
| Neuronetics Note non-cash transaction costs (note 9(a)) |
— | |||||||
| Gain on lender warrants |
— | ( |
) | |||||
| Gain on deferred share units (note 11(b)) |
( |
) | ( |
) | ||||
| Gain on performance share units |
— | ( |
) | |||||
| Change in non-cash operating working capital: |
||||||||
| Accounts receivable |
( |
) | ||||||
| Prepaid expenses and other |
( |
) | ( |
) | ||||
| Accounts payable and accrued liabilities |
||||||||
| Other payables |
( |
) | ( |
) | ||||
| Advance for research collaboration |
( |
) | — | |||||
| Interest paid |
( |
) | ( |
) | ||||
| Interest received |
||||||||
| Repayment of operating lease liabilities |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| ( |
) | ( |
) | |||||
| Financing activities: |
||||||||
| Net proceeds on issuance of common shares (note 14) |
||||||||
| Financing costs incurred |
( |
) | ( |
) | ||||
| Loans payable advanced (note 9(a)) |
||||||||
| Loans payable and promissory notes repaid (note 9(a)) |
( |
) | ( |
) | ||||
| Promissory notes advanced (note 9(a) and note 10) |
— | |||||||
| Principal repayment of finance lease liabilities |
( |
) | ( |
) | ||||
| Net non-controlling interest loans repaid |
( |
) | ( |
) | ||||
| Distribution to non-controlling interest |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Investing activities: |
||||||||
| Purchase of property, plant and equipment |
— | ( |
) | |||||
| Acquisition of subsidiary non-controlling interest (note 23) |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| ( |
) | ( |
) | |||||
| |
|
|
|
|||||
| Decrease in cash |
( |
) | ( |
) | ||||
| Cash, beginning of period |
||||||||
| |
|
|
|
|||||
| Cash, end of period |
$ | $ | ||||||
| |
|
|
|
|||||
1. |
Reporting entity: |
2. |
Basis of presentation: |
| (a) | Going concern: |
2. |
Basis of presentation (continued): |
2. |
Basis of presentation (continued): |
2. |
Basis of presentation (continued): |
| (b) | Basis of measurement: |
2. |
Basis of presentation (continued): |
3. |
Significant accounting policies: |
| (a) | Revenue recognition: |
4. |
Recent accounting pronouncements: |
| (i) | Accounting Standards Update 2023-09—Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This standard introduces improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. |
5. |
Property, plant and equipment: |
| Leasehold improvements |
TMS devices | Total | ||||||||||
| Cost |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Additions |
— | |||||||||||
| Asset Disposal |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Balance, September 30, 2024 |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Accumulated depreciation |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Depreciation |
||||||||||||
| Asset Disposal |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Balance, September 30, 2024 |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Net book value |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Balance, September 30, 2024 |
||||||||||||
6. |
Intangible assets: |
| Management service agreement |
Covenant not to compete |
Total | ||||||||||
| Cost |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Additions |
— | — | — | |||||||||
| Asset Disposal |
— | ( |
) | ( |
) | |||||||
| |
|
|
|
|
|
|||||||
| Balance, September 30, 2024 |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Accumulated amortization |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Amortization |
||||||||||||
| Asset Disposal |
— | ( |
) | ( |
) | |||||||
| |
|
|
|
|
|
|||||||
| Balance, September 30, 2024 |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| Net book value |
||||||||||||
| Balance, December 31, 2023 |
$ | $ | $ | |||||||||
| Balance, September 30, 2024 |
||||||||||||
7. |
Right-of-use |
| (a) | Finance leases: |
| September 30, 2024 |
||||
| Finance right-of-use |
$ | |||
| Impact of lease additions, disposals and/or modifications |
— | |||
| Exercise of buy-out options into property, plant and equipment |
( |
) | ||
| Depreciation on right-of-use |
( |
) | ||
| |
|
|||
| Finance right-of-use |
$ | |||
| |
|
|||
| September 30, 2024 |
||||
| Finance lease liabilities, beginning of the period |
$ | |||
| Impact of lease additions, disposals and/or modifications |
||||
| Interest expense on lease liabilities |
||||
| Payments of lease liabilities |
( |
) | ||
| |
|
|||
| Finance lease liabilities, end of the period |
$ | |||
| |
|
|||
| Less current portion of finance lease liabilities |
||||
| |
|
|||
| Long term portion of finance lease liabilities |
$ | |||
| |
|
|||
7. |
Right-of-use |
| (b) | Operating leases: |
| September 30, 2024 |
||||
| Operating right-of-use |
$ | |||
| Impact of lease additions, disposals and/or modifications |
( |
) | ||
| Right-of-use |
( |
) | ||
| |
|
|||
| Operating right-of-use |
$ | |||
| |
|
|||
| September 30, 2024 |
||||
| Operating lease liabilities, beginning of the period |
$ | |||
| Impact of lease additions, disposals and/or modifications |
( |
) | ||
| Lease liability expense |
||||
| Payments of lease liabilities |
( |
) | ||
| |
|
|||
| Operating lease liabilities, end of the period |
||||
| |
|
|||
| Less current portion of operating lease liabilities |
||||
| |
|
|||
| Long term portion of operating lease liabilities |
$ | |||
| |
|
|||
8. |
Accounts payable and accrued liabilities: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Accounts payable |
$ | $ | ||||||
| Accrued liabilities |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
9. |
Loans payable: |
| (a) | Borrowings: |
| TMS device loans (i) |
Credit Facility (ii) |
Promissory notes (iii) |
Neuronetics Note (iv) |
Total | ||||||||||||||||
| Short Term |
$ | $ | $ | $ | ||||||||||||||||
| Long Term |
— | |||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total, net |
$ | $ | $ | $ | $ | |||||||||||||||
| Unamortized capitalized financing costs |
— | — | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total, September 30, 2024 |
$ | $ | $ | $ | $ | |||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| (i) | TMS Device loans: |
| (ii) | Credit Facility: |
9. |
Loans payable (continued): |
9. |
Loans payable (continued): |
9. |
Loans payable (continued): |
| (iii) | Promissory notes: |
9. |
Loans payable (continued): |
9. |
Loans payable (continued): |
| (iv) | Neuronetics Note: |
9. |
Loans payable (continued): |
| (b) | Non-controlling interest loans: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Non-controlling interest loans |
$ | $ | ||||||
10. |
Shareholder loans: |
| (a) | February 2023 Notes, February 2023 Greybrook Note and August 2023 Greybrook Note: |
10. |
Shareholder loans (continued): |
10. |
Shareholder loans (continued): |
| (b) | Subordinated Convertible Notes: |
10. |
Shareholder loans (continued): |
11. |
Other payables: |
| (a) | Lender warrants: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Lender warrants |
$ | $ | ||||||
11. |
Other payables (continued): |
| (b) | Deferred share units: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Deferred share units |
$ | $ | ||||||
11. |
Other payables (continued): |
| (c) | Performance share units: |
September 30, 2024 |
December 31, 2023 |
|||||||
| Performance share units |
$ | $ | ||||||
11. |
Other payables (continued): |
| (d) | Device contract termination: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Device contract termination |
$ | $ | ||||||
11. |
Other payables (continued): |
| (e) | Klein Note settlement: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Klein Note settlement |
$ | $ | ||||||
| (f) | PA Settlement Agreement: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| PA Settlement Agreement |
$ | $ | ||||||
11. |
Other payables (continued): |
| (g) | Neuronetics Transaction Costs: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Neuronetics Transaction Costs |
$ | $ | ||||||
12. |
Deferred and contingent consideration: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Deferred and contingent consideration |
$ | $ | ||||||
13. |
Advance for research collaboration: |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Advance for research collaboration |
$ | $ | ||||||
14. |
Common shares: |
| Number | Total amount |
|||||||
| December 31, 2023 |
$ | |||||||
| Issuance of Common Shares – February 2024 Direct Offering |
||||||||
| Surrender and Cancellation of Common Shares – PA Settlement Agreement |
( |
) | — | |||||
| |
|
|
|
|||||
| September 30, 2024 |
$ | |||||||
| |
|
|
|
|||||
| (a) | February 2024 Direct Offering: |
| (b) | PA Settlement Agreement: |
| (c) | Arrangement Agreement: |
14. |
Common shares (continued): |
14. |
Common shares (continued): |
14. |
Common shares (continued): |
15. |
Contributed surplus: |
| (a) | Share-based compensation - stock options |
15. |
Contributed surplus (continued): |
| September 30, 2024 | December 31, 2023 | |||||||||||||||
| Number of stock options |
Weighted average exercise price |
Number of stock options |
Weighted average exercise price |
|||||||||||||
| Outstanding, beginning of period |
$ | $ | ||||||||||||||
| Granted |
||||||||||||||||
| Forfeited |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Expired |
( |
) | ( |
) | — | — | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Outstanding, end of period |
$ | $ | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
15. |
Contributed surplus (continued): |
| (b) | Greybrook Warrants |
15. |
Contributed surplus (continued): |
16. |
Contingencies: |
17. |
Pensions: |
18. |
Income taxes: |
19. |
Risk management arising from financial instruments: |
| (a) | Fair value: |
| (b) | Credit risk: |
19. |
Risk management arising from financial instruments (continued): |
| Days since service delivered |
September 30, 2024 |
December 31, 2023 |
||||||
| 0 – 90 |
$ | $ | ||||||
| 91 – 180 |
||||||||
| 181 – 270 |
||||||||
| 270+ |
||||||||
| |
|
|
|
|||||
| Total accounts receivable |
$ | $ | ||||||
| |
|
|
|
|||||
| (c) | Liquidity risk: |
| (d) | Currency risk: |
19. |
Risk management arising from financial instruments (continued): |
| (e) | Interest rate risk: |
20. |
Capital management: |
21. |
Related party transactions: |
| (a) | Transactions with significant shareholder – Greybrook Health |
21. |
Related party transactions (continued): |
| (b) | Loans from shareholder – Greybrook Health |
21. |
Related party transactions (continued): |
| (c) | Transactions with the former significant shareholder, former officer and former director – Benjamin Klein |
| (d) | Loan from former significant shareholder, former officer and former director – Benjamin Klein |
| (e) | Loans from shareholders and officers |
21. |
Related party transactions (continued): |
| (f) | Loan from significant shareholder – Madryn |
21. |
Related party transactions (continued): |
22. |
Basic and diluted loss per share: |
Three months ended |
Nine months ended |
|||||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net loss attributable to the shareholders of Greenbrook TMS |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Weighted average common shares outstanding: Basic and diluted |
||||||||||||||||
| Loss per share: Basic and diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
23. |
Non-controlling interest: |
| (a) | On February 27, 2023, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Connecticut LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (b) | On September 29, 2023, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Arlington LLC for $non-controlling interest loan with the former minority party in an amount of $ |
| (c) | On April 18, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Fairfax LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (d) | On April 18, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Greenbelt LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (e) | On May 17, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Christiansburg LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (f) | On May 17, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Lynchburg LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
23. |
Non-controlling interest (continued): |
| (g) | On May 17, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Roanoke LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (h) | On May 17, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS St. Petersburg LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (i) | On June 3, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Mooresville LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (j) | On June 3, 2024, the Company acquired a portion of the non-controlling ownership interest in TMS NeuroHealth Centers Woodbridge LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
| (k) | On June 3, 2024, the Company acquired a portion of the non-controlling ownership interest in Greenbrook TMS Wilmington LLC for the release of liabilities and losses. As at September 30, 2024, the Company has an ownership interest of |
23. |
Non-controlling interest (continued): |
| September 30, 2024 |
December 31, 2023 |
|||||||
| Cash |
$ | $ | ||||||
| Accounts receivable, net |
||||||||
| Prepaid expenses and other |
||||||||
| Property, plant and equipment |
||||||||
| Finance right-of-use |
— | |||||||
| Operating right-of-use |
||||||||
| Accounts payable and accrued liabilities |
||||||||
| Finance lease liabilities |
— | |||||||
| Operating lease liabilities |
||||||||
| Loans payable, net |
||||||||
| Shareholder’s deficit attributable to the shareholders of Greenbrook TMS |
( |
) | ( |
) | ||||
| Shareholder’s deficit attributable to non-controlling interest |
( |
) | ( |
) | ||||
| Distributions paid to non-controlling interests |
( |
) | ( |
) | ||||
| Partnership buyout |
( |
) | ||||||
| Historical subsidiary investment by non-controlling interest |
||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|||||||||||||
| Revenue |
$ | $ | $ | $ | ||||||||||||
| Net gain (loss) attributable to the shareholders of Greenbrook TMS |
( |
) | ( |
) | ( |
) | ||||||||||
| Net gain (loss) attributable to non-controlling interest |
( |
) | ( |
) | ( |
) | ||||||||||
24. |
Expenses by nature: |
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|||||||||||||
| Salaries and bonuses |
$ | $ | $ | $ | ||||||||||||
| Marketing expenses |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Three months ended | Nine months ended | |||||||||||||||
| September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|||||||||||||
| Salaries and bonuses |
$ | $ | $ | $ | ||||||||||||
| Marketing expenses |
||||||||||||||||
| Professional and legal fees |
||||||||||||||||
| Computer supplies and software |
||||||||||||||||
| Financing and transaction costs |
||||||||||||||||
| Travel, meals and entertainment |
||||||||||||||||
| Restructuring expense |
— | |||||||||||||||
| Insurance |
||||||||||||||||
| Credit facility amendment fee (note 9(a)) |
— | — | ||||||||||||||
| PA Settlement Agreement (note 11(f)) |
— | — | ||||||||||||||
| Other |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
25. |
Subsequent events: |
| (a) | Additional loans under Madryn Credit Facility: |
| (b) | Subordinated Convertible Notes Conversion: |
| (c) | Neuronetics Transaction: |
25. |
Subsequent events (continued): |
| (d) | Supplement Restructuring Plan: |
| • | The Company’s audited financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 |
| • | The Company’s unaudited financial statements and related notes included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 |
| • | Greenbrooks’s audited consolidated financial statements and related notes for the year ended December 31, 2023, December 31, 2022 and unaudited condensed financial statements and related notes for the nine months ended September 30, 2024 within this Current Report on From 8-K |
| • | The notes to the unaudited pro forma condensed combined statements of operations |
Neuronetics |
Greenbook |
Transaction Accounting Adjustments |
Note |
Pro Forma Combined |
||||||||||||||||
Assets |
||||||||||||||||||||
Current assets: |
||||||||||||||||||||
Cash and cash equivalents |
$ | $ | $ | $ | ||||||||||||||||
Restricted cash |
||||||||||||||||||||
Accounts receivable, net |
( |
) | c | |||||||||||||||||
Inventory |
||||||||||||||||||||
Current portion of net investments in sales-type leases |
( |
) | g | |||||||||||||||||
Current portion of prepaid commission expense |
||||||||||||||||||||
Current portion of notes receivable |
( |
) | f | |||||||||||||||||
Prepaid expenses and other current assets |
( |
) | h | |||||||||||||||||
Total current assets |
( |
) | ||||||||||||||||||
Property and equipment, net |
g | |||||||||||||||||||
Operating lease right-of-use |
||||||||||||||||||||
Finance lease right-of-use |
( |
) | i | |||||||||||||||||
Net investments in sales-type leases |
( |
) | g | |||||||||||||||||
Prepaid commission expense |
||||||||||||||||||||
Long-term notes receivable |
( |
) | f | |||||||||||||||||
Intangible assets |
( |
) | ||||||||||||||||||
Goodwill |
3 | |||||||||||||||||||
Other assets |
||||||||||||||||||||
Total assets |
$ | $ | $ | $ | ||||||||||||||||
Liabilities and Stockholders’ Equity |
||||||||||||||||||||
Current liabilities: |
||||||||||||||||||||
Accounts payable |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Accrued expenses |
||||||||||||||||||||
Deferred revenue |
( |
) | ||||||||||||||||||
Deferred and contingent consideration |
||||||||||||||||||||
Current portion of shareholder note |
||||||||||||||||||||
Current portion of finance lease liabilities |
( |
) | i | |||||||||||||||||
Current portion of operating lease liabilities |
d | |||||||||||||||||||
Non-controlling Interest Loans |
||||||||||||||||||||
Current portion of Shareholder Loans |
( |
) | ||||||||||||||||||
Current portion of long-term debt, net: |
( |
) | e | |||||||||||||||||
Other payable: |
— | ( |
) | e | ||||||||||||||||
Total current liabilities |
( |
) | ||||||||||||||||||
Long-term debt, net |
( |
) | ||||||||||||||||||
Deferred revenue |
— | |||||||||||||||||||
Neuronetics |
Greenbook |
Transaction Accounting Adjustments |
Note |
Pro Forma Combined |
||||||||||||||
Finance lease Liabilities |
( |
) | i | |||||||||||||||
Operating lease liabilities |
d | |||||||||||||||||
Total liabilities |
( |
) | ||||||||||||||||
Commitments and contingencies (Note 18) |
||||||||||||||||||
Stockholders’ equity: |
||||||||||||||||||
Preferred stock, $ |
||||||||||||||||||
Common stock, $ |
( |
) | a,b | |||||||||||||||
Additional paid-in capital |
a,b | |||||||||||||||||
Accumulated deficit |
( |
) | ( |
) | a | ( |
) | |||||||||||
Total Stockholders’ equity |
( |
) | ||||||||||||||||
Non-controlling interest |
( |
) | ( |
) | ||||||||||||||
Total liabilities and Stockholders’ equity |
$ | $ | $ | $ | ||||||||||||||
Neuronetics |
Greenbrook |
Transaction Adjustments |
Note |
Pro Forma Combined |
||||||||||||||||
| Revenues |
$ | $ | $ | ( |
) | |
aa | |
$ | |||||||||||
| Cost of revenues |
( |
) | |
bb, cc | |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating expenses: |
|
|
||||||||||||||||||
| Sales and marketing |
|
ff | |
|||||||||||||||||
| General and administrative |
|
|
||||||||||||||||||
| Research and development |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total operating expenses |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Loss from operations |
( |
) | ( |
) | ( |
) | |
|
( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Other (income) expense: |
|
|
||||||||||||||||||
| Interest expense |
( |
) | |
dd | |
|||||||||||||||
| Loss on extinguishment of debt |
|
ee | |
|||||||||||||||||
| Other income, net |
( |
) | |
|
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loss before non-controlling interest |
( |
) | ( |
) | |
|
( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-controlling interest |
( |
) | ( |
) | ||||||||||||||||
| Net Loss |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||
| Net loss per share of common stock outstanding, basic and diluted |
$ | ( |
) | — | |
|
$ | ( |
) | |||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Weighted average common shares outstanding, basic and diluted |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
Neuronetics |
Greenbrook |
Transaction Adjustments |
Pro Forma Combined |
|||||||||||||||||
| Revenues |
$ | $ | $ | ( |
) | |
aa | |
$ | |||||||||||
| Cost of revenues |
( |
) | |
bb, cc | |
|||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating expenses: |
|
|
||||||||||||||||||
| Sales and marketing |
|
ff | |
|||||||||||||||||
| General and administrative |
|
|
||||||||||||||||||
| Research and development |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Total operating expenses |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Loss from operations |
( |
) | ( |
) | |
|
( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Other (income) expense: |
|
|
||||||||||||||||||
| Interest expense |
( |
) | |
dd | |
|||||||||||||||
| Other income, net |
( |
) | |
ee | |
( |
) | |||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loss before non-controlling interest |
( |
) | ( |
) | $ | |
|
$ | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-controlling interest |
( |
) | ( |
) | ||||||||||||||||
| Net Loss |
$ | ( |
) | $ | ( |
) | $ | $ | ( |
) | ||||||||||
| Net loss per share of common stock outstanding, basic and diluted |
$ | ( |
) | |
|
$ | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
| Weighted-average common shares outstanding, basic and diluted |
|
|
||||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||||||
1. |
Description of the Transaction |
2. |
Basis of Presentation |
3. |
Preliminary Purchase Price Allocation |
Purchase Consideration |
(in thousands) | |||
| STIM Shares |
||||
| Price per share |
$ | |||
| |
|
|||
| Fair value of purchase consideration paid at closing |
$ | |||
| |
|
|||
| Settlement of pre- existing relationship |
$ | |||
| |
|
|||
| Total purchase consideration |
$ |
|||
| |
|
|||
Fair Value Adjusted |
||||
Fair value of assets acquired |
||||
Cash and cash equivalents |
$ | |||
Restricted cash |
$ | |||
Accounts receivable, net |
$ | |||
Prepaid expenses and other current assets |
$ | |||
Property and equipment |
$ | |||
Operating lease right-of-use |
$ | |||
Total Assets |
$ | |||
Fair value of liabilities assumed |
||||
Accounts payable |
$ | |||
Accrued expense |
$ | |||
Current portion of loans payable |
$ | |||
Current portion of operating lease liabilities |
$ | |||
Deferred and contingent consideration |
$ | |||
Operating lease liabilities |
$ | |||
Non-controlling interest |
$ | ( |
) | |
Total Liabilities |
$ | |||
Total identifiable net assets acquired |
$ | |||
Goodwill |
$ | |||
Total consideration transferred |
$ | |||
4. |
Proforma Adjustments |