Neuronetics , Inc. (NASDAQ:STIM), a medical technology company based in Malvern, Pennsylvania, announced today an amendment to a Registration Rights Agreement with Madryn Asset Management LP, extending the period in which Madryn can demand registration of their shares. The adjustment shifts the Demand Registration Period from 180 days to 365 days following the consummation of an Arrangement Agreement with Greenbrook TMS Inc.
This modification, effective today, grants Madryn additional time to register the Consideration Shares received upon the closing of the Arrangement Agreement. The original Registration Rights Agreement was part of a transaction disclosed on August 13, 2024, when Neuronetics entered into an Arrangement Agreement with Greenbrook TMS Inc. and simultaneously with Madryn Asset Management LP and its affiliates.
The extended Demand Registration Period allows Madryn Parties the right to demand registration of their shares, which is subject to specific limitations. The amended agreement is detailed in Exhibit 10.1 attached to the current report.
Neuronetics' management has not provided any further commentary on the reasons for the amendment or its potential implications for the company's stockholders. The company has also reminded investors of the forward-looking nature of statements regarding the anticipated benefits and timing of the Arrangement with Greenbrook TMS Inc., cautioning that actual results may differ due to various risks and uncertainties.
This news follows Neuronetics' definitive proxy statement filed on October 4, 2024, which outlined the proposed transaction and solicited stockholder votes. The press release statement is based on a SEC filing and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Neuronetics, a medical technology company, experienced a dip in its second-quarter revenue, reporting $16.5 million, attributed to altered purchasing patterns influenced by the Change Health cyberattack. Despite the revenue shortfall, the company observed an 18% growth in the utilization of local consumables, indicating robust demand for its treatments. In response to these financial results, William Blair downgraded Neuronetics' stock rating from Outperform to Market Perform.
Simultaneously, Neuronetics is preparing for a merger with Greenbrook TMS, which is expected to generate revenue and cost synergies, pushing the company towards sustained profitability from 2025. This merger is anticipated to streamline operations, potentially extend insurance payor contracts to other customers, and boost brand recognition for NeuroStar TMS therapy.
Neuronetics also presented data at the American Academy of Child and Adolescent Psychiatry (AACAP) Annual Meeting, showcasing the benefits of its NeuroStar Transcranial Magnetic Stimulation (TMS) System for treating major depressive disorder in adolescents and young adults. The treatment demonstrated a 78% response rate and a 48% remission rate among the analyzed adolescent patients.
In an effort to increase awareness of its therapies, Neuronetics is investing in its Better Me Guarantee Program and launching a television advertising campaign in Tampa Bay, Florida. Despite recent challenges, the company reaffirmed its full-year 2024 revenue guidance, set between $78 million and $80 million, reflecting its strategic steps to navigate current challenges, with a goal of achieving positive cash flow in 2025.
InvestingPro Insights
Recent InvestingPro data provides additional context to Neuronetics' (NASDAQ:STIM) current financial situation and market performance. The company's market capitalization stands at $31.36 million, reflecting its relatively small size in the medical technology sector. Despite a strong return over the last month, with a 37.33% price increase, STIM's stock has experienced significant volatility, having fallen 71.03% over the past six months.
InvestingPro Tips highlight that Neuronetics is quickly burning through cash and is not profitable over the last twelve months. This aligns with the company's negative operating income of $26.66 million for the last twelve months as of Q2 2024. However, it's worth noting that liquid assets exceed short-term obligations, which could provide some financial flexibility as the company navigates its current challenges and pursues strategic moves like the arrangement with Greenbrook TMS Inc.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for STIM, providing deeper insights into the company's financial health and market position.
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