Filing Details

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 1)*

Greenbrook TMS Inc.

(Name of Issuer)

Common Stock, no par value

(Title of Class of Securities)

3937043309

(CUSIP Number)

Matthew Girandola

330 Madison Avenue Floor 33

New York, NY 10017

(646) 560-5490

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

August 15, 2023

(Date of Event Which Requires Filing of This Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

Explanatory Note

This Amendment No. 1 (this Amendment No. 1) amends and supplements the Schedule 13D originally filed by the Reporting Persons (as defined below) with the Securities and Exchange Commission on April 3, 2023 (the Original Schedule 13D and, as amended by this Amendment No. 1, this Schedule 13D).

This Schedule 13D (the Statement) relates to the common stock, no par value (the Common Stock), of Greenbrook TMS Inc., an Ontario corporation (the Company). The Companys principal executive offices are located at 890 Yonge Street, 7th Floor, Toronto, Ontario, Canada M4W 3P4.

(a) This Statement is filed by the following persons (the Reporting Persons):

(b) The principal business and principal office address for each of the Reporting Persons is 330 Madison Avenue Floor 33, New York, NY 10017.

(c)(f) The principal business or occupation of each Reporting Person is as follows:

A list of Madryns directors, executive officers and managers (collectively, the Covered Persons) is set forth below. To the knowledge of the Reporting Persons, each of the Covered Persons that is a natural person is a United States citizen. Other than as set forth below, none of the Reporting Persons have appointed any executive officers or directors:

(d) During the last five years, none of the Reporting Persons or, to their knowledge, none of the Covered Persons, has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

(e) During the last five years, none of the Reporting Persons or, to their knowledge, none of the Covered Persons, has been a party to a civil proceeding of any judicial or administrative body of competent jurisdiction and, as a result of which they were or are subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

On July 14, 2022, the Company entered into a credit agreement in connection with a $75.0 million secured credit facility (the Credit Facility) with Madryn and its affiliates. The Credit Facility permitted the Company to draw $55.0 million in combined Term A and Term B tranches up front and further provided the Funds with the option to convert up to $5.0 million of the outstanding principal amount of the loan into Common Stock at a price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange prior to each such issuance.

On February 1, 2023, the Company entered into an amendment to the Credit Facility whereby Madryn and its affiliates extended an additional tranche of debt financing to the Company in an aggregate principal amount of $2.0 million (the Term D Loan). The Term D Loan further provided MHP II and MHP II Cayman with the option to convert up to approximately $182,000 of the outstanding principal amount of the Term D Loan into Common Stock at a conversion price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange.

On February 21, 2023, the Company entered into an amendment to the Credit Facility whereby Madryn and its affiliates extended an additional tranche of debt financing to the Company in an aggregate principal amount of $2.0 million (the Term E Loan). The Term E Loan further provided MHP II and MHP II Cayman with the option to convert up to approximately $182,000 of the outstanding principal amount of the Term E Loan into Common Stock at a conversion price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange.

On March 20, 2023, the Company entered into an amendment to the Credit Facility whereby Madryn and its affiliates extended an additional tranche of debt financing to the Company in an aggregate principal amount of $1.0 million (the Term F Loan). The Term F Loan further provided MHP II and MHP II Cayman with the option to convert up to approximately $91,000 of the outstanding principal amount of the Term F Loan into Common Stock at a conversion price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange.

On March 23, 2023, the Company completed a non-brokered private placement (the Private Placement) of 11,363,635 shares of Common Stock, at a price of $0.55 per share, for aggregate gross proceeds of approximately $6.25 million. In connection with the Private Placement, MHP II and MHP II Cayman acquired 6,363,636 shares of Common Stock.

On March 24, 2023, the Company entered into an amendment to the Credit Facility whereby Madryn and its affiliates extended an additional tranche of debt financing to the Company in an aggregate principal amount of $1.0 million (the Term G Loan). The Term G Loan further provided MHP II and MHP II Cayman with the option to convert up to approximately $91,000 of the outstanding principal amount of the Term G Loan into Common Stock at a conversion price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange.

On August 1, 2023, the Company entered into an amendment to the Credit Facility whereby Madryn and its affiliates extended an additional tranche of debt financing to the Company in an aggregate principal amount of $2.0 million (the Term H Loan). The Term H Loan further provided MHP II and MHP II Cayman with the option to convert up to approximately $182,000 of the outstanding principal amount of the Term H Loan into Common Stock at a conversion price per share equal to $1.90, subject to customary anti-dilution adjustments and approval of the Toronto Stock Exchange.

On August 15, 2023, the Company entered into a note purchase agreement with Greybrook Health Inc., MHP II and MHP II Cayman whereby the Company issued and sold $2.0 million aggregate principal amount of unsecured subordinated convertible promissory notes (the Subordinated Convertible Notes). The Subordinated Convertible Notes are convertible into Common Stock at any time at the election of holders of the Subordinated Convertible Notes, or on a mandatory basis by all noteholders at the request of certain affiliates of Madryn, at a conversion price equal to the lesser of (a) 85% of the closing price per share of Common Stock as of the date of issuance of the Subordinated Convertible Notes and (b)(i) 85% of the 30-day volume weighted average trading price per share of Common Stock immediately prior to the date of exercise, or (ii) if the shares of Common Stock are not listed on Nasdaq or another national exchange at the time of conversion, a per share price equal to 85% of the fair market value per share of Common Stock as of such date (determined in good faith for such purposes by the Companys board of directors, acting reasonably); provided, that, in any event, the conversion price shall not be lower than $0.078. The conversion price is also subject to customary anti-dilution adjustments, with the conversion price in effect as of August 15, 2023 being $0.3315.

The funds used to make such loans and acquire beneficial ownership of the shares reported herein were composed of the investment capital of the applicable Funds.

The information set forth in Items 3 and 6 of this Statement is hereby incorporated by reference into this Item 4.

The Reporting Persons acquired the securities reported herein for investment purposes and intend to review their investments in the Company on a continuing basis. Depending on various factors, including but not limited to the Companys financial position and strategic direction, price levels of the Common Stock, conditions in the securities markets, various laws and regulations applicable to the Company and companies in its industry and the Reporting Persons ownership in the Company and position as lender to the Company, and general economic and industry conditions, the Reporting Persons may in the future take actions with respect to their investment in the Company as they deem appropriate, including changing their current intentions, with respect to any or all matters required to be disclosed herein. Without limiting the foregoing, and subject to any applicable limitations described in Item 6 below, the Reporting Persons may, from time to time, acquire or cause affiliates to acquire additional shares of Common Stock or other securities of the Company (including any combination or derivative thereof), dispose, or cause affiliates to dispose, of some or all of their Common Stock or other securities of the Company or continue to hold, or cause affiliates to hold, Common Stock or other securities of the Company.

In addition, the Reporting Persons have had and intend to continue having discussions, from time to time, with management and the board of directors of the Company, and may engage with other stockholders or securityholders of the Company and other relevant parties, or take other actions concerning, the Companys business, lines of business, operations, strategy, previously announced restructuring, plans and prospects; any extraordinary corporate transactions (including, but not limited to, a merger, reorganization or liquidation); sales of a material amount of assets or divestitures; a change in the board of directors or management; a material change in the capitalization or dividend policies; other material changes in the Companys business, lines of business, or corporate structure; or similar actions.

Except as set forth herein, or as would occur upon completion of any of the matters discussed herein, the Reporting Persons have no present plans, proposals or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Although the foregoing reflects activities presently contemplated by the Reporting Persons and each other individuals named in Item 2 with respect to the Company, the foregoing is subject to change at any time.

(a)-(b)    The information contained on the cover pages of this Schedule 13D is incorporated herein by reference.

The Reporting Persons beneficially own in the aggregate 13,902,877 shares of Common Stock, which represents approximately 27.8% of the outstanding shares of Common Stock. All calculations of percentage ownership in this Schedule 13D are based on 50,013,252 shares of Common Stock outstanding. This is composed of i) 42,474,011 shares of Common Stock outstanding as of August 14, 2023, as reported by the Issuer in its Form 6-K filed on August 15, 2023; ii) 3,014,354 shares issuable to the Reporting Persons upon the exercise of conversion instruments; and iii) 4,524,887 shares issuable to the Reporting Persons upon the conversion of the Subordinated Convertible Notes.

Each of the Funds directly holds the number and percentage of shares of Common Stock disclosed as beneficially owned by it in the applicable table set forth on the cover page to this Statement. Madryn, as the investment manager for each of the Funds, and the Advisors, as the general partners for each of the Funds, may be deemed to have the shared power to direct the voting and disposition of shares of Common Stock beneficially owned by the Funds and, consequently, Madryn and the Advisors may be deemed to possess indirect beneficial ownership of such shares. Madryn and the Advisors disclaim beneficial ownership of such shares for all other purposes.

The responses of the Reporting Persons to rows 7, 8, 9, 10, 11 and 13 on the cover pages of this Statement are incorporated herein by reference.

To the knowledge of the Reporting Persons, none of the Covered Persons directly owns any shares of Common Stock; provided, however, that because of each Covered Persons status as a director, executive officer, manager, member or partner of a Reporting Person, a Covered Person may be deemed to be the beneficial owner of the shares of Common Stock beneficially owned by such Reporting Person. Except to the extent of their pecuniary interest, each of the Covered Persons disclaims beneficial ownership of the shares of the Common Stock reported herein and the filing of this Schedule 13D shall not be construed as an admission that any such Covered Person is the beneficial owner of any securities covered by this statement.

(c) Except as described herein, none of the Reporting Persons or, to their knowledge, none of the Covered Persons, has had any transactions in the Common Stock during the past 60 days.

(d) Except as set forth herein, to the knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, any shares of Common Stock.

(e) Not applicable.

Resale Registration Rights Agreement

In connection with the Private Placement described in Item 3 hereto, MHP II and MHP II Cayman entered into a Resale Registration Rights Agreement, dated as of March 21, 2023, by and among the Company and the Purchasers named therein (the Resale Registration Rights Agreement). The Resale Registration Rights Agreement provides MHP II and MHP II Cayman with certain registration rights related to the shares acquired in connection with the Private Placement. The description of the Resale Registration Rights Agreement is qualified in its entirety by reference to the complete text of such agreement, a copy of which is filed as an exhibit hereto and is incorporated herein by reference.

Common Share Conversion Instrument

On July 14, 2022, MSO entered into a Common Share Conversion Instrument with the Company and the Administrative Agent named therein (the MSO Conversion Instrument). The MSO Conversion Instrument provides MSO with certain registration rights related to the shares issuable upon conversion of the loans under the Credit Facility. The description of the MSO Conversion Instrument is qualified in its entirety by reference to the complete text of such agreement, a copy of which is filed as an exhibit hereto and is incorporated herein by reference.

Fifth Amended and Restated Common Share Conversion Instruments

On August 1, 2023, MHP II and MHP II Cayman each entered into a Fifth Amended and Restated Common Share Conversion Instrument with the Company and the Administrative Agent named therein (the Conversion Instruments). The Conversion Instruments provide MHP II and MHP II Cayman, as applicable, with certain registration rights related to the shares issuable upon conversion of the loans under the Credit Facility. The description of the Conversion Instruments is qualified in its entirety by reference to the complete text of such agreements, copies of which are filed as exhibits hereto and are incorporated herein by reference.

Registration Rights Agreement

In connection with the Subordinated Convertible Notes described in Item 3 hereto, MHP II and MHP II Cayman entered into a Registration Rights Agreement, dated as of August 15, 2023, by and among the Company and the Purchasers named therein (the Registration Rights Agreement). The Registration Rights Agreement provides MHP II and MHP II Cayman with certain registration rights related to the shares issuable upon conversion of the Subordinated Convertible Notes. The description of the Registration Rights Agreement is qualified in its entirety by reference to the complete text of such agreement, a copy of which is filed as an exhibit hereto.

Pursuant to Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the Reporting Persons have entered into an agreement with respect to the joint filing of this Schedule 13D, which agreement is set forth on the signature page to this Schedule 13D.

Except as described above and herein in this Schedule 13D, there are no other contracts, understandings or relationships (legal or otherwise) among the parties named in Item 2 hereto and between such persons and any person with respect to any of the common stock of the Company owned by the Funds.

SIGNATURES

After reasonable inquiry and to the best of each of the undersigneds knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

In accordance with Rule 13d-1(k)(1)(iii) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of this Schedule 13D with respect to the common stock of the Company.