Greenbrook TMS announces settlement agreement of ongoing litigation

Greenbrook TMS announced that the Company has entered into a settlement agreement with the plaintiff regarding the previously-announced breach of contract claim in connection with an approximately $2M promissory note that was issued to a lender associated with Benjamin Klein, a seller of Check Five, doing business as “Success TMS”, that the Company acquired in July 2022. Under the terms of the settlement agreement, the Company will make payments to the plaintiff in the total amount of approximately $2.2M, structured as an initial immediate payment of $250,000, weekly payments of $75,000 thereafter up to and until the May 1, 2024 maturity date of the promissory note, upon which the balance owing will be due. In exchange for entry into the settlement agreement, the plaintiffs will immediately dismiss, with prejudice, the Klein Note Action and both parties will provide a mutual release of claims. Contemporaneous with, but not included in the settlement agreement, the parties have also agreed to stay the separate complaint concerning alleged disputes arising out of the purchase agreement for the acquisition of Success TMS and other related matters for up to six months, subject to court approval. Benjamin Klein, a seller of Success TMS and a plaintiff in the Klein Matters, is a former director and a significant shareholder of Greenbrook. Klein was also the COO of Greenbrook from July 2022 until his termination by the Company effective May 4, 2023.