MALVERN, PA — Neuronetics, Inc. (NASDAQ: STIM) this week provided a corporate update which includes entering into a new credit facility with investment affiliates managed by SLR Capital Partners, LLC (“SLR”) and providing Greenbrook TMS (“Greenbrook”) with a promissory note as part of an updated TMS device supply agreement.
New Credit Facility with SLR
The Company announced that it has entered into an amendment to its senior secured credit facilities with SLR, which collectively provide for borrowings of up to $60.0 million, comprised of $37.5 million in three tranches of term loans, a “Term A Loan” in an aggregate amount of $35.0 million, a “Term B Loan” in an aggregate amount of $2.5 million, and a “Term C Loan” in an aggregate amount of $22.5 million. The Term A Loans were fully drawn prior to the effectiveness of the Amendment. On March 29, 2023, the Company borrowed an aggregate amount of $2.5 million under the Term B Loan. The maturity date of the $60 million facility is March 29, 2028. Prior to the amendment, the maturity date of the Term A Loans was February 28, 2025.
“We are delighted to complete this successful, non-dilutive debt financing. The incremental capital will further strengthen our balance sheet, allowing the company to drive the continued commercial adoption of NeuroStar Advanced Therapy for Mental Health and with the continued goal of achieving cash flow breakeven in 2024,” said Keith J. Sullivan, President and Chief Executive Officer of Neuronetics. “We would like to express our appreciation for SLR’s ongoing support, and we look forward to continuing our long-term partnership.”
The maturity date of the credit facilities is March 29, 2028. The annual interest rate is equal to SOFR plus 5.65%, payable monthly in arrears. SOFR shall mean the greater of 1) SOFR for a term of one month and 2) 3.95% per annum. Rate shall reset monthly. The term loan facility provides for at least 36 months of interest-only payments at closing.
Updated TMS Device Supply Agreement with Greenbrook
The Company also announced that it has converted approximately $5.9 million of Greenbrook’s outstanding accounts payable balance to the Company and related transaction expenses into a $6.0M senior secured promissory note.
“Greenbrook has been a strong partner for us for many years and has been instrumental in growing the adoption of TMS as a therapy for mental illness,” said Mr. Sullivan. “We are happy to provide the additional cash flow buffer, which will help Greenbrook execute on its growth strategy moving forward.”
All amounts borrowed under the Note will bear interest at a rate equal to the sum of (a) the floating interest rate of daily secured overnight financing rate as administered by the Federal Reserve Bank of New York on its website, plus (b) 7.65%. The Note matures on March 31, 2027. The Company has taken a security interest in all Greenbrook’s assets on a pari passu with Greenbrook’s lender and, under certain circumstances, will receive warrants to purchase Greenbrook shares at a discount to market.
Additionally, Greenbrook has agreed to relocate the NeuroStar systems from the treatment centers that will be closed in connection with Greenbrook’s recently announced Restructuring Plan, to be installed and utilized in Greenbrook’s treatment centers that will remain open.
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