Greenbrook TMS : Q4 2023

Table of Contents

Disposition of Common Shares

A U.S. Resident Holder generally will not be subject to tax under the Tax Act in respect of a disposition or deemed disposition of a Common Share unless the Common Share constitutes "taxable Canadian property" (as defined in the Tax Act) of the U.S. Resident Holder at the time of disposition and the U.S. Resident Holder is not entitled to relief under the Treaty. Generally, a Common Share will not constitute "taxable Canadian property" of a U.S. Resident Holder at a particular time provided that the Common Share is listed on a "designated stock exchange" (as defined in the Tax Act, which currently includes the TSX and the Nasdaq) at that time, unless, at any time during the 60-month period that ends at that time, both: (i) one or any combination of (a) the U.S. Resident Holder, (b) persons with whom the U.S. Resident Holder does not deal at arm's length for purposes of the Tax Act and (c) partnerships in which the U.S. Resident Holder or a person described in

1. holds a membership interest (directly or indirectly through one or more partnerships), own 25% or more of the issued shares of any class or series of our Company, and (ii) more than 50% of the fair market value of the Common Share was derived directly or indirectly from one or any combination of: (a) real or immovable property situated in Canada, (b) "timber resource properties" (as defined in the Tax Act), (c) "Canadian resource properties" (as defined in the Tax Act) or (d) options in respect of, or interests in, or for civil law rights in, any of the foregoing, whether or not the property exists. If the Common Shares are not listed on any designated stock exchange, the Common Shares would generally be "taxable Canadian property" of a U.S. Resident Holder at any time if, at any particular time during the 60-month period that ends at that time, the condition described in (ii) above is met. Notwithstanding the foregoing, in certain circumstances set out in the Tax Act, a Common Share may be deemed to be "taxable Canadian property".

In the case of a U.S. Resident Holder for whom our Common Shares constitute "taxable Canadian property", no Canadian taxes will generally be payable on a capital gain realized on the disposition or deemed disposition of such shares by reason of the Treaty, unless the value of such shares is derived principally from "real property situated in Canada" for purposes of the Treaty at the time of the disposition. U.S. Resident Holders for whom Common Shares may constitute "taxable Canadian property" should consult their own tax advisor as to the Canadian federal income tax consequences of the disposition, including potential compliance requirements and withholding under section 116 of the Tax Act.

Securities Authorized for Issuance under Equity Compensation Plans

Information about our equity compensation plan is incorporated herein by reference to Item 12 of Part III of this Annual Report on Form 10-K.

Recent Sales of Unregistered Securities

For the three months ended December 31, 2023, the Company issued an aggregate amount of approximately $3.4 million aggregate principal amount of Subordinated Convertible Notes, see "Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Indebtedness and Capital Raising-Subordinated Convertible Notes". The Subordinated Convertible Notes were issued to certain significant shareholders and accredited investors and in each case the Company relied upon Section 4(a)(2) of the Securities Act to complete the private placements. The proceeds of these sales have been used by the Company for general corporate and working capital purposes.

Repurchases of Equity Securities

The Company did not repurchase any of its Common Shares during the three months ended December 31, 2023.

ITEM 6. [RESERVED]

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management's discussion and analysis ("MD&A") provides information concerning the financial condition and results of operations of the Company and should be read in conjunction with our audited consolidated financial statements as at and for the fiscal years ended December 31, 2023 and 2022, in each case, together with the notes thereto. The financial information contained in this MD&A is derived from the financial statements prepared in accordance with generally accepted accounting principles in the United States ("US GAAP") as issued by the Financial Accounting Standards Board ("FASB").

- 60 -

Table of Contents

We have restated our previously issued consolidated financial statements for Fiscal 2022 contained in this Annual Report. In addition, we intend to restate the quarterly condensed interim consolidated financial statements for Fiscal 2023 and 2022. Refer to the "Explanatory Note" preceding Item 1, Business, for background on the restatement, the fiscal periods impacted, and other information.

Basis of Presentation

As of June 30, 2023, the Company lost its "foreign private issuer" status because a majority of the Common Shares were held in the United States and the Company does not meet the additional requirements under the "business contacts" test. As a result, beginning on January 1, 2024, the Company is required to follow SEC reporting standards of a U.S. domestic issuer, convert its financial statements to U.S. GAAP and will no longer be able to rely on foreign private issuer exemptions from U.S. proxy rules and Section 16 insider reporting.

Our audited consolidated financial statements have been prepared in accordance with US GAAP as a result of the above. Our fiscal year is the 12-month period ending December 31.

All references to "Fiscal 2024","Fiscal 2023", and "Fiscal 2022" are to the fiscal years ending December 31, 2024, December 31, 2023 and December 31, 2022, respectively. All references to "Q4 2022" are to our fiscal quarter for the three-month period ended December 31, 2022.

Amounts stated in this MD&A are in United States dollars, unless otherwise indicated.

Key Highlights and Recent Developments

During Fiscal 2023, our commitment to the execution of the Restructuring Plan has established a path forward for the Company to achieve sustainable profitability and long-term growth. The reduction in headcount, rationalization of marketing spend, extinguishment of lease liabilities and a reduction of other recurring corporate, general and administrative expenses has effectively removed $23 million in annualized costs from the Company as compared to Q4 2022, achieving our targeted range of $22 to $25 million in cost reductions. We remain optimistic about our future as we execute on the remaining components of the Restructuring Plan in early Fiscal 2024.

Revenue in Fiscal 2023 increased by 10% to a record $73.8 million, as compared to Fiscal 2022 (Fiscal 2022: $66.8 million), despite the closure of 53 Treatment Centers in connection with the Restructuring Plan (approximately 29% of active Treatment Centers as at the end of Fiscal 2022). Furthermore, we believe Fiscal 2023 revenue proved resilient at approximately 90% of the annualized total quarterly revenue achieved in Q4 2022 (with Q4 2023 generating above 95% of Q4 2022 revenue), despite these closures and a significantly reduced marketing spend (marketing spend in Fiscal 2023 represented 12% of annualized marketing spend in Q4 2022).

Although the cost reductions associated with the Restructuring Plan have been substantially executed, we expect our new operating structure will continue to allow us to rationalize costs, while further reducing business complexity, streamline our operating model and drive operational efficiencies. We believe that these structural changes, paired with continued support from our significant shareholders, Madryn and Neuronetics, will improve our near-term cash flows and ultimately lead to profitability in the future. Treatment volumes in Fiscal 2023 were 343,790, a 10% increase compared to Fiscal 2022 (Fiscal 2022: 312,940), and new patient starts increased in Fiscal 2023 by 12% to 10,401, as compared to Fiscal 2022 (Fiscal 2022: 9,253), despite the closure of 53 Treatment Centers in connection with the Restructuring Plan as compared to Fiscal 2022.

We believe that mental health remains a key focus in the United States, and the unmet demand for Treatment remains at an all-time high, with our network of Treatment Centers well-positioned to serve this unmet demand. We believe our business fundamentals are stronger than ever with the growth of the Spravato® Program, the opportunity to increase marketing investment in our streamlined business, the introduction of Medication Management (see "Key Highlights and Recent Developments-Medication Management Program" below) and potential future treatment opportunities.

- 61 -

Table of Contents

Restructuring Plan

As intended, the Restructuring Plan established a path forward for the Company to achieve sustainable profitability and long-term growth. As of the end of Fiscal 2023, we have realized approximately $23 million in annualized recurring cost reductions through a significant reduction in headcount, optimizing marketing spend through key learnings from our Q4 2022 marketing efforts as well as a reduction in recurring corporate, general and administrative expenses. As of the date of this Annual Report, the Restructuring Plan is substantially complete, but the Company expects to achieve additional operating expense savings from the final components of the Restructuring Plan in the first half of Fiscal 2024. We expect to be within the disclosed estimated range of restructuring and related charges of $1 million to $2 million upon completion of the Restructuring Plan, of which approximately $1.0 million were recorded in Fiscal 2023 with the balance to be recorded in Fiscal 2024. See "Item 1 Business - Recent Developments in our Business - Restructuring Plan".

Spravato® Program

The roll-out of our Spravato® Program at select Treatment Centers continued throughout Fiscal 2023, building on our long-term business plan of utilizing our Treatment Centers as platforms for the delivery of innovative treatments to patients suffering from MDD and other mental health disorders. We also rolled-out our first Spravato® "buy & bill" program which will allow us to further enhance our access to patients in specific markets that require this program offering as compared to our current "administer and observe" programs. As at the date of this Annual Report, we had a total 81 Treatment Centers offering Spravato®.

Medication Management Program

During Fiscal 2023, the Company commenced a pilot to roll-out our facilitation of Medication Management to select Treatment Centers across our footprint, building on our long-term business plan of utilizing our Treatment Centers as platforms for the delivery of innovative treatments to patients suffering from MDD and other mental health disorders. Although Medication Management is a lower margin business, we believe this program will allow us to reach patients earlier in their treatment journey, develop an internal patient pipeline for TMS and Spravato®, while also further optimizing marketing costs. We also believe that becoming a more comprehensive mental health care provider will allow us to provide greater access to those suffering from MDD and other mental health disorders. As at the date of this Annual Report, we had a total of nine Treatment Centers offering Medication Management.

Talk Therapy Program

During the first quarter of Fiscal 2024, the Company commenced a pilot to roll-out talk therapy at select Treatment Centers across our footprint. Consistent with Medication Management, we believe this program will allow us to reach patients earlier in their treatment journey, develop an internal patient pipeline for TMS and Spravato®, while also further optimizing marketing costs. We believe that expanding our continuum of care and becoming a more comprehensive mental health care provider will allow us to provide greater access and quality of care to those suffering from MDD and other mental health disorders. As at the date of this Annual Report, we offer talk therapy at Treatment Centers in Florida and Missouri.

Debt Financings and Equity Financings

For more information on our recent debt and equity financings and see "Liquidity and Capital Resources - Indebtedness and Capital Raising" below.

Stock Exchange Matters

On February 23, 2024, the Company received the final delisting notice from the Listing Qualifications Department of the Nasdaq. As per the procedures set forth in the final delisting notice, the Common Shares were suspended from trading on Nasdaq on February 26, 2024. The Company filed its own Form 25 with the SEC on April 1, 2024, which completed the process for delisting its Common Shares from Nasdaq when the Form 25 became effective on April 11, 2024. Following the suspension of trading of the Common Shares on Nasdaq, the Common Shares began trading on the OTC Pink Market, under the symbol "GBNHF". On March 22, 2024, the Common Shares became quoted on the OTCQB Market, under the symbol "GBNHF". See "Item 1 Business-Recent Developments in our Business-Stock Exchange Matters".

- 62 -

Table of Contents

Director and Officer Appointments

During Fiscal 2023 and in early Fiscal 2024, the Company has had a number of appointments and resignations of directors and officers. See "Item 1 Business-Recent Developments in our Business-Corporate and Other Developments-Director Appointments".

Factors Affecting Our Performance

We believe that our performance and future success depend on a number of factors that present significant opportunities for us. These factors are also subject to a number of inherent risks and challenges, some of which are discussed below. See also "Item 1A-Risk Factors".

Number of Treatment Centers

Following the completion of the Restructuring Plan, we believe we will continue to have a meaningful opportunity to selectively increase the number of our Treatment Centers and the number of Treatment Centers offering Spravato® and Medication Management. The opening and success of new Treatment Centers or offering ancillary products in those Treatment Centers is subject to numerous factors, including our ability to locate the appropriate space, finance the operations, build relationships with clinicians, negotiate suitable lease terms and local payor arrangements, and other factors, some of which are beyond our control. At the same time, we have selectively closed certain Treatment Centers to maximize our profitability, which may temporarily reduce our number of active Treatment Centers from quarter to quarter as we continue to aim for overall expansion of the business.

Capital Management

Our objective is to maintain a capital structure that supports our long-term business strategy, maintain creditor and customer confidence, and maximize shareholder value. Our primary uses of capital are to finance operations, finance new center start-up costs, increase non-cash working capital and capital expenditures, as well as to service debt obligations. We have experienced losses since inception and, although we secured $55 million pursuant to the Original Term Loan (as defined below), $48.9 million pursuant to the Note Financings (as defined below), $6.25 million pursuant to the 2023 Private Placement (as defined below), $0.5 million pursuant to the Alumni Purchase Agreement, and $0.6 million pursuant to the February 2024 Public Offering, we expect that we will require additional financing to fund our operating activities and to repay our debt obligations and satisfy our cash requirements, including our near-term obligations under the Klein Note and the TMS Device Settlement. We have historically been able to obtain financing from Madryn, supportive shareholders and other sources when required; however, there can be no assurance that we will continue to receive financing support from Madryn and our shareholders in the future. In addition, we are constrained in our ability to raise capital as a result of the suspension of trading of our Common Shares by Nasdaq. See Item 1 "Business-Recent Developments in Our Business-Stock Exchange Matters". See also "Liquidity and Capital Resources" below and "Risk Factors" in Item 1A of this Annual Report.

Industry and Reimbursement Trends

Our revenue is impacted by changes to United States healthcare laws, our clinical partners' and contractors' healthcare costs, the ability to secure favorable pricing structures with device manufacturers and payors' reimbursement criteria and associated rates. In addition, the geographic distribution of our Treatment Centers can impact our revenues per Treatment because reimbursement rates vary from state to state. See "Risk Factors-Legal and Regulatory Risk Factors" and "Risk Factors-Industry Risk Factors" in Item 1A of this Annual Report.

Technology

Our revenues are affected by the availability of, and reimbursement for, new TMS indications, new technology or other novel treatment modalities (including Spravato®) and our ability to incorporate the new technology into our Treatment Centers.

Components of Our Results of Operations

Segments

We evaluate our business and report our results based on organizational units used by management to monitor performance and make operating decisions on the basis of one operating and reportable segment: Outpatient Mental Health Service Centers. We currently measure this reportable operating segment's performance based on total revenues and entity-wide regional operating income.

- 63 -

Table of Contents

Total Revenue

Total revenue consists of service revenue attributable to the performance of treatments. In circumstances where the net patient fees have not yet been received, the amount of revenue recognized is estimated based on an expected value approach. Due to the nature of the industry and complexity of our revenue arrangements, where price lists are subject to the discretion of payors, variable consideration exists that may result in price concessions and constraints to the transaction price for the services rendered.

In estimating this variable consideration, we consider various factors including, but not limited to, the following:

• commercial payors and the administrators of federally funded healthcare programs exercise discretion over pricing and may establish a base fee schedule for our services (which is subject to change prior to final settlement) or negotiate a specific reimbursement rate with an individual provider;
• average of previous net service fees received by the applicable payor and fees received by other patients for similar services;
• management's best estimate, leveraging industry knowledge and expectations of third-party payors' fee schedules;
• factors that would influence the contractual rate and the related benefit coverage, such as obtaining pre-authorization of services and determining whether the procedure is medically necessary;
• probability of failure in obtaining timely proper provider credentialing (including re-credentialling) and documentation, in order to bill various payors which may result in enhanced price concessions; and
• variation in coverage for similar services among various payors and various payor benefit plans.

We update the estimated transaction price (including updating our assessment of whether an estimate of variable consideration is constrained) to represent faithfully the circumstances present at the end of the reporting period and the changes in circumstances during the reporting period in which such variances become known.

Third-party payors include federal and state agencies (under the Medicare programs), managed care health plans and commercial insurance companies. Variable consideration also exists in the form of settlements with these third-party payors as a result of retroactive adjustments due to audits and reviews. We apply constraint to the transaction price, such that net revenues are recorded only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in the future.

Entity-Wide Regional Operating Income (Loss) and Direct Center and Regional Costs

Regional operating income presents regional operating income on an entity-wide basis and is calculated as total revenue less direct center and regional costs. Direct center and regional costs consist of direct center and patient care costs, regional employee compensation, regional marketing expenses, and depreciation. These costs encapsulate all costs (other than incentive compensation such as share-based compensation granted to senior regional employees) associated with the center and regional management infrastructure, including the cost of the delivery of treatments to patients and the cost of our regional patient acquisition strategy.

Center Development Costs

Center development costs represent direct expenses associated with developing new Treatment Centers, including small furnishings and fittings, wiring and electrical and, in some cases, the cost of minor space alterations.

Corporate Employee Compensation

Corporate employee compensation represents compensation incurred to manage the centralized business infrastructure of the Company, including annual base salary, annual cash bonuses and other non-equity incentives.

- 64 -

Table of Contents

Corporate Marketing Expenses

Corporate marketing expenses represent costs incurred that impact the Company on an overall basis including investments in website functionality and brand management activities.

Other Corporate, General and Administrative Expenses

Other corporate, general and administrative expenses represent expenses related to the corporate infrastructure required to support our ongoing business including insurance costs, professional and legal costs and costs incurred related to our corporate offices. Costs related to the Restructuring Plan and the Amendment Fee (as defined below) are also included within other corporate, general and administrative expenses.

Financing Costs

Financing costs represent accounting, legal and professional fees incurred as part of significant transactions, including the Success TMS Acquisition in Fiscal 2022. See "-Factors Affecting the Comparability of Our Results-Acquisition of Success TMS" below.

Share-Based Compensation

Share-based compensation represents stock options, restricted share units and performance share units granted as consideration in exchange for employee and similar services to align personnel performance with the Company's long-term goals.

Amortization

Amortization relates to the reduction in useful life of the Company's intangible assets.

Interest

Interest expense relates to interest incurred on loans and lease liabilities. Interest income relates to income realized as a result of investing excess funds into investment accounts.

Loss (Gain) on Extinguishment of Loans

Loss (gain) on extinguishment of loans represents costs related to the exchange of the Insider Notes for Subordinated Convertible Notes (each as defined below) for all Insider Notes held by individuals who are not shareholders. It also represents costs related to the extinguishment of the Oxford Credit Facility (as defined below), as well as the extinguishment of a loan previously held by Success TMS (as defined below) incurred during Fiscal 2022. See "Liquidity and Capital Resources-Indebtedness and Capital Raising" below.

Loss on Settlements

Loss on settlements represents costs related to legal settlements reached. This includes the loss incurred on the settlement and mutual release agreement with a TMS Device manufacturer for the termination of TMS Device contracts with such manufacturer, as required by the Neuronetics Agreement (as defined below). In accordance with the terms of the settlement, the Company recognized an amount payable of $6,600,000, due in equal instalments over 44 weeks beginning in August 2023 (of which we have $1,200,000 outstanding as of the date of this Annual Report). Pursuant to the terms of the mutual release, in the event of default, interest will accrue at a rate of 6% per annum on any unpaid portion. Loss on settlements also includes the loss incurred on the settlement of the Klein Note. In accordance with the terms of the settlement, the Company will make payment in total of $2.2 million, 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 (of which we have $328,169 outstanding as of the date of this Annual Report).

- 65 -

Table of Contents

Impairment Loss

Impairment loss represents the impairment of assets as part of our annual impairment of goodwill and long-lived assets. Goodwill impairment charge is recognized to the extent that the carrying value exceeds the fair value of the Company's reporting unit. Long-lived asset impairment charge is recognized to the extent that the carrying value exceeds the fair value of the respective asset. The Company recognized impairment losses in both Fiscal 2022 and Fiscal 2023 relating to the Restructuring Plan. See Note 7(b) and Note 7(c) and Note 8(b) within Company's audited consolidated financial statements as at and for the year ended December 31, 2023.

Adjusted EBITDA

Adjusted EBITDA is a non-GAAP measure that deducts from EBITDA share-based compensation expenses and certain other expenses that represent one-time costs or costs that otherwise do not reflect our underlying business performance. See "Reconciliation of Non-GAAP Measures" below.

Factors Affecting the Comparability of Our Results

Acquisition of Success TMS

On July 14, 2022, we, through our wholly owned U.S. subsidiary, TMS US, completed the Success TMS Acquisition pursuant to the Purchase Agreement by and the Seller Parties. The purchase price consideration was determined based on the pro forma revenue contribution of the two companies and was fixed at an amount equal to approximately 40% of the total issued and outstanding Common Shares on a post- acquisition basis and subject to adjustments. See "Item 1 Business-Recent Developments in our Business-Corporate and Other Developments -Acquisition of Success TMS".

Regional Development Activity

Our regional model seeks to develop leading positions in key markets, and to leverage operational efficiencies by combining smaller local Treatment Centers within a region under a single shared regional management infrastructure. Part of our core strategy is to continue to develop new Treatment Centers within our existing regions as well as in new management regions, in each case, organically or through acquisitions of existing centers or businesses, which may affect comparability of results. Although we are currently focusing on a more condensed footprint due to the execution of our Restructuring Plan, our long-term growth strategy remains. See "Item 1 Business-Our TMS Business Model-Regional Development Activity".

Seasonality

Typically, we experience seasonal factors in the first quarter of each fiscal year that result in reduced revenues in those quarters as compared to the other three quarters of the year. These seasonal factors include cold weather and the reset of deductibles during the first part of the year. We also typically experience a slowdown in new patient starts during the third quarter of each fiscal year as a result of summer holidays.

- 66 -

Table of Contents

Results of Operations

Summary Financial Information

The following table summarizes our results of operations for the periods indicated. The selected consolidated financial information set out below has been derived from our audited consolidated financial statements, and should be read in conjunction with those financial statements and the related notes thereto. In addition, we note that the results presented below may not be indicative of our results in future periods as a result of the recently announced Restructuring Plan (as described above).

(audited) ($)	Fiscal 2023	Fiscal 2022
	Total revenue(1)		73,786,778		66,825,959
Direct center and patient care costs	53,765,678		42,137,465
	Regional employee compensation	18,106,033		16,651,595
	Regional marketing expenses	1,944,745		10,807,453
	Depreciation	2,703,186		3,510,611
	Total direct center and regional costs	76,519,642		73,107,124
	Regional operating loss	(2,732,864)		(6,281,165)
	Center development costs	525,782		660,356
	Corporate employee compensation	15,941,141		16,185,688
	Corporate marketing expenses	170,837		628,145
	Financing costs	678,347		1,265,225
	Other corporate, general and administrative expenses	12,769,567		7,445,166
	Share-based compensation	726,679		347,787
	Amortization	66,192		1,358,212
	Interest expense	12,048,071		5,979,829
	Interest income	(231)		(12,250)
	Loss on extinguishment of loan	14,274		2,331,917
	Loss on settlements	3,295,904		-
	Impairment loss	285,390		45,834,688
	Loss before income taxes	(49,254,817)		(88,305,928)
	Income tax expense	-	-
	Loss for the year and comprehensive loss	(49,254,817)		(88,305,928)
	Income (loss) attributable to non-controlling interest	(340,755)		(634,812)
	Loss attributable to the common shareholders of Greenbrook	(48,914,062)		(87,671,116)
	Net loss per share (basic and diluted)	(1.25)		(3.77)

Note:

1. Revenue for Fiscal 2022 has been restated to correct for errors in the period. For more information, see the Explanatory Note following the cover page of this Annual Report.
2. • 67 -

Table of Contents

Selected Financial Position Data

The following table provides selected financial position data as at the dates indicated:

(audited) ($)	As at December 31,	As at December 31,
2023		2022
Cash and restricted cash		4,323,708		2,623,957
Current assets (excluding cash) (1)	14,973,336		12,493,479
Total assets	51,417,615		71,139,994
Current liabilities	32,654,425		35,366,419
Non-current liabilities	119,710,980		94,885,417
Total liabilities	152,365,405		130,251,836
Non-controlling interests (1)	(2,911,581)	(2,777,127)
Shareholders' equity (deficit) (1)	(98,036,209)	(56,334,715)

Note:

1. Current assets (excluding cash), non-controlling interest and shareholder' equity (deficit) as at December 31, 2022 has been restated to correct for errors in the period. For more information, see the Explanatory Note following the cover page of this Annual Report.

For further information regarding our liquidity and financial position, see "Liquidity and Capital Resources" below. See also Item 1A, "Risk Factors-Business and Operational Risk Factors-We have incurred losses in the past and may be unable to achieve or sustain profitability in the future and may not be able to secure additional financing to fund losses if we fail to achieve or maintain profitability." in this Annual Report.

Selected Operating Data

The following table provides selected operating data as at the dates indicated. As described above, as of the date of this Annual Report, the Company has reduced its operating footprint to 130 Treatment Centers in connection with the Restructuring Plan. See "Cautionary Note Regarding Forward-Looking Information".

(unaudited)			As at December 31,		As at December 31,
		2023			2022
Number of active Treatment Centers(1)			130			183
Number of Treatment Centers-in-development(2)			-		-
Total Treatment Centers			130			183
Number of management regions			17			18
Number of TMS Devices installed			260			345
Number of regional personnel			391			495
Number of shared-services / corporate personnel(3)			98			134
Number of TMS treatment providers(4)			205			225
Number of consultations performed(5)			34,124			27,831
Number of patient starts(5)			10,401			9,253
Number of TMS treatments performed(5)			343,790			312,940
Average revenue per TMS treatment(5)	$	215		$	214

Notes:

1. Active Treatment Centers represent Treatment Centers that have performed billable TMS services during the applicable period.
2. Treatment Centers-in-development represents Treatment Centers that have committed to a space lease agreement and the development process is substantially complete.
3. Shared-services /corporate personnel is disclosed on a full-time equivalent basis. The Company utilizes part-time staff and consultants as a means of managing costs.
4. Represents clinician partners that are involved in the provision of TMS therapy services from our Treatment Centers.
5. Figure calculated for the applicable year ended December 31.
6. • 68 -

Table of Contents

Comparison of Results for the Year Ended December 31, 2023 to the Year Ended December 31, 2022

The following section provides an overview of our financial performance during Fiscal 2023 compared to Fiscal 2022.

Total Revenue

Consolidated revenue increased to $73.8 million in Fiscal 2023, a 10% increase compared to Fiscal 2022 (Fiscal 2022: $66.8 million). This was predominately due to the Success TMS Acquisition which was included in our results for only a portion of Fiscal 2022, partially offset by reduced revenues from the implementation of the Restructuring Plan described above.

New patient starts increased to 10,401 in Fiscal 2023, a 12% increase compared to Fiscal 2022 (Fiscal 2022: 9,253). Treatment volumes in Fiscal 2023 were 343,790, a 10% increase compared to Fiscal 2022 (Fiscal 2022: 312,940). Consultations performed were 34,124 in Fiscal 2023, a 23% increase compared to Fiscal 2022 (Fiscal 2022: 27,831). The increases are predominately due to the Success TMS Acquisition which was included in our results for only a portion of Fiscal 2022, partially offset by our smaller footprint resulting from implementation of the Restructuring Plan.

Average revenue per treatment remained relatively consistent at $215 in Fiscal 2023 (Fiscal 2022: $214). The change in average revenue per Treatment was primarily attributable to changes in payor mix, treatment modalities and the geographical distribution of revenue (including as a result of the Success TMS Acquisition).

Entity-Wide Regional Operating Loss and Direct Center and Regional Costs

Direct center and regional costs increased by 5% to $76.5 million during Fiscal 2023 (Fiscal 2022: $73.1 million). The increase is attributable to the Success TMS Acquisition which was included in our results for only a portion of Fiscal 2022, partially offset by cost savings in relation to the execution of the Restructuring Plan and the reduction in marketing spend described above.

Entity-wide regional operating loss decreased by 56% to $2.7 million during Fiscal 2023 (Fiscal 2022: $6.3 million). The decrease in entity-wide regional operating loss was primarily due to cost savings achieved by the reduction in head count, reduction of marketing spend and a reduction in other direct center expenses resulting from the execution of the Restructuring Plan.

Center Development Costs

Center development costs decreased by 20% to $0.5 million during Fiscal 2023 (Fiscal 2022: $0.7 million). The decrease is predominantly due to a reduction in the number of Treatment Centers developed during 2023 as compared to 2022, partially offset by the minimal incremental costs associated with establishing the Spravato® Program at additional Treatment Centers during 2023.

Corporate Employee Compensation

Corporate employee compensation incurred to manage the centralized business infrastructure of the Company decreased by 2% to $15.9 million during Fiscal 2023 (Fiscal 2022: $16.2 million). This decrease is predominately due to the execution of the Restructuring Plan, partially offset by increases in employee compensation resulting from the Success TMS Acquisition which was completed on July 14, 2022.

Corporate Marketing Expenses

Corporate marketing expenses decreased by 73% to $0.2 million during Fiscal 2023 (Fiscal 2022: $0.6 million). The decrease was primarily due to managing spend as a result of the execution of the Restructuring Plan in addition to limiting expenditures due to liquidity constraints which we are actively seeking to resolve (see "Factors Affecting Our Performance-Capital Management" above).

Financing Costs

Financing costs decreased by 46% to $0.7 million during Fiscal 2023 (Fiscal 2022: $1.3 million). The decrease was due to reduced accounting, legal and professional fees incurred in Fiscal 2023 as compared to Fiscal 2022.

- 69 -