Neuronetics Announces Proposed Public Offering of Shares Amid Liquidity Pressure and Credit Warning
Key Facts
Neuronetics announced on November 10 that it had launched an underwritten public offering of its common stock, according to the news summary available that day. However, the offering’s terms, including the number of shares, the price and the underwriters’ option to purchase additional shares, could not be verified on an accessible, reliable page. As a result, no confirmed details are available on the proposed financing’s size or timing. The move follows the company’s disclosure that it expects revenue for the 12 months ending March 31, 2027, to fall below the minimum set out in its credit agreement. It also warned that the lender could demand repayment of the facility if the covenant is breached, at a time when the company does not expect to have sufficient liquidity to repay the loan if called.
In its latest reported quarter before the offering news, the company recorded revenue of $42.0 million for the three months ended September 30, 2026, compared with $37.3 million in the same period of 2025, according to its filing with the U.S. Securities and Exchange Commission. The filing said the $4.7 million increase was mainly tied to Greenbrook revenue. Greenbrook revenue rose 20.1% year over year to $26.2 million, while NeuroStar revenue was about $15.8 million, up 1.8%. Gross margin was 52.2%, compared with 45.9% a year earlier. The company reported second-quarter revenue of $41.6 million, up 9.1% year over year, and a gross margin of 51.1%.
Operating and profitability metrics improved in the third quarter, with operating expenses down 13% to $21.3 million and the company recording operating income of $0.5 million, after an operating loss of $7.3 million a year earlier. Adjusted earnings before interest, taxes, depreciation and amortization were $1.9 million, compared with a loss of $4.7 million in the third quarter of 2025. The company nevertheless remained in the red, posting a net loss of $1.7 million, or $0.02 per share, compared with $9.0 million, or $0.13 per share, a year earlier. The operating improvement provides context for business performance before the proposed offering was announced. It does not change the warning the company gave about the revenue covenant in its credit agreement.
Data as of September 30 showed that Neuronetics had $22.1 million in cash and cash equivalents, plus $5.8 million in restricted cash, while outstanding borrowings under the Perceptive credit facility totaled $65.0 million. Management expected revenue for the 12 months through March 31, 2027, to fall below the minimum required under the agreement. According to the filing, a breach of the covenant allows the lender to demand repayment of the facility, while the company does not expect to have sufficient liquidity to repay it if that occurs. The company also reported that 77,728,311 shares of common stock were outstanding on October 28, 2026. The available information does not include the terms of the new offering needed to estimate its potential effect on the share count or shareholders’ stakes.
On its outlook, the company maintained its 2026 revenue range of $160 million to $164 million and raised its gross margin forecast to 49%–50% from 48%–50%. It also lowered its full-year operating expense forecast to $92.5 million–$95.5 million, including $3.5 million in stock-based compensation. It estimated cash flow from operations and investing at a negative range of $10.0 million to $12.0 million. On development, the company said its August submission to the U.S. Food and Drug Administration for an accelerated transcranial magnetic stimulation protocol remained under review. It also said integration of the TrakStar platform with AdvancedMD was expected to become available to NeuroStar providers using the system during the fourth quarter of 2026.