SCHEDULE: Madryn Group Amends Neuronetics Stake, Board Voting Pact

Madryn Asset Management and its affiliates updated their Schedule 13D filing for Neuronetics, Inc., disclosing a 30.3% beneficial ownership and new terms for registration rights and voting agreements.

Summary

• Madryn Asset Management, LP and its affiliated entities collectively beneficially own 20,737,061 shares of Neuronetics, Inc. Common Stock, representing approximately 30.3% of the outstanding shares.
• This percentage is based on 68,485,922 shares outstanding as of October 29, 2025.
• The filing is an Amendment No. 2 to the original Schedule 13D filed on December 17, 2024.
• A Registration Rights Agreement between Neuronetics and the Madryn Parties has been amended twice, most recently on March 2, 2026.
• Under the Second Amendment, Neuronetics must file a Registration Statement for resale of Madryn's shares within five business days after filing its 2025 Annual Report on Form 10-K, if a Shelf Notice is received.
• The Madryn Parties have agreed not to acquire any additional equity or debt convertible into Neuronetics' equity.
• The Madryn Parties will vote all their shares at the 2026 annual meeting in accordance with the Board of Directors' recommendations on certain proposals.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive update, as the voting agreement suggests continued alignment between a major shareholder and the board, though the potential for future share resale introduces some uncertainty.

Positives

• The Madryn Parties' agreement to vote with the Board of Directors at the 2026 annual meeting on certain proposals indicates alignment with current management.
• The commitment by Madryn not to acquire additional equity or convertible debt could reduce concerns about a potential hostile takeover or further dilution from their side.

Negatives

• The requirement for Neuronetics to file a Registration Statement for resale of Madryn's 30.3% stake could signal an intent by Madryn to potentially divest a portion of its holdings in the future, which might create selling pressure.

Risks

• Potential future selling pressure on Neuronetics' stock if Madryn Asset Management decides to exercise its registration rights and divest a significant portion of its 30.3% stake.
• The large block ownership by Madryn Asset Management, while currently aligned with the board, could still represent a concentration risk if their interests diverge from other shareholders in the future.

Future Outlook

The filing indicates a potential future registration and resale of Madryn's shares, contingent on a Shelf Notice and the filing of Neuronetics' 2025 Form 10-K. It also outlines Madryn's commitment to vote with the Board at the 2026 annual meeting, suggesting continued alignment for the near term.

Industry Context

StockSavvy.ai notes that large institutional ownership, particularly with significant voting agreements, can stabilize a company's governance structure, but also introduces the potential for future block sales. In the medical device or healthcare technology sector, such substantial stakes often reflect a long-term investment thesis in the company's core technology or market position.

Comparison to Industry Standards

• A 30.3% beneficial ownership stake by an institutional investor group like Madryn is a substantial position, often indicative of a strategic investment rather than a purely passive one. This level of ownership is higher than typical passive institutional holdings, which usually range from 5-15% for diversified funds.
• The voting agreement with the Board of Directors is a common mechanism in such large strategic investments, ensuring alignment on key corporate governance matters, similar to arrangements seen in other healthcare or biotech companies where a major investor seeks influence without outright control.
• The "piggyback" registration rights are standard for large shareholders, allowing them to sell shares alongside company-initiated offerings, while the commitment not to acquire additional equity limits immediate takeover speculation, differentiating it from more aggressive activist investor stances.

Corporate Governance

Related Party Transactions

• The Registration Rights Agreement and the voting agreement are between Neuronetics, Inc. and the Madryn Parties, a significant shareholder group, which constitutes related party dealings due to their substantial ownership and influence.

Stakeholder Impact

• Shareholders: The voting agreement with Madryn could provide stability but also means a significant block of votes is aligned with the board. The potential for future resale of Madryn's shares could create selling pressure.
• Management/Board: The voting agreement strengthens the board's position on certain proposals at the 2026 annual meeting.

Next Steps

• Neuronetics to file its Annual Report on Form 10-K for the year ended December 31, 2025.
• If a Shelf Notice is received, Neuronetics will prepare and file a Registration Statement covering resale of Madryn's Registrable Securities within five business days after filing its 2025 Form 10-K.
• Madryn Parties to vote all shares in accordance with the Board of Directors' recommendation at the 2026 annual meeting.

Key Dates

Recommendation

The filing indicates a significant institutional investor, Madryn Asset Management, maintains a substantial 30.3% stake in Neuronetics and has formalized a voting agreement to align with the Board's recommendations at the 2026 annual meeting. This suggests a degree of stability and confidence in current governance. However, the updated registration rights, which facilitate the potential resale of Madryn's entire stake, introduce a future overhang risk. While the agreement not to acquire more shares reduces immediate takeover speculation, the potential for a large block sale could create downward pressure on the stock. Therefore, a "hold" recommendation is appropriate, balancing the governance stability with potential future liquidity concerns.

Keywords

Neuronetics, Madryn Asset Management, Schedule 13D, Beneficial Ownership, Registration Rights Agreement, Corporate Governance, Shareholder Agreement, NNI, Institutional Investor, Voting Agreement