Neuronetics, Inc. Adopts Limited Duration Shareholder Rights Plan

Neuronetics, Inc

MALVERN, PA — Neuronetics, Inc. (NASDAQ: STIM), a commercial-stage medical technology company focused on designing, developing and marketing products that improve the quality of life for patients who suffer from psychiatric disorders, announced that its Board of Directors authorized the adoption of a limited duration rights plan (“Rights Plan”). The rights will be issued to shareholders of record on April 20, 2020 and will expire on April 8, 2021.

The Board has adopted this Rights Plan following careful consideration, among other factors, of the COVID-19 pandemic’s disruptive impact on market stability and its effect on equity market valuations, including the recent dislocation of the Company’s stock price.

The Board believes that the Company’s current trading level does not reflect Neuronetics’ inherent value or the potential of its products and strategy execution.

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Given the share price dislocation created by an extremely turbulent market, the Board of Directors has adopted the Rights Plan to protect all shareholders’ best interests and preserve their long-term investment.

The Rights Plan is designed to assure that all of the Company’s shareholders receive fair and equal treatment in the event of any proposed takeover of the Company, to guard against opportunistic tactics to exert control over the Company during this period of economic uncertainty and market volatility and protect long-term shareholder value.

The Rights Plan is intended to encourage anyone seeking to acquire the Company to negotiate with the Board prior to attempting a takeover and to provide the Board of Directors sufficient time to make informed judgements and exercise its fiduciary duties.

The issuance of the rights will not interfere with the other operational changes announced by the Company today.

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The rights plan is similar to many plans adopted by other publicly held companies. The plan provides for the issuance of one right for each outstanding share of the Company’s common stock, par value $0.01 per share (“Common Stock”) at the close of business on April 20, 2020.

Generally, the rights will become exercisable or exchangeable only if a person or group acquires beneficial ownership of 10% (15% in the case of passive investors) or more of the Company’s outstanding Common Stock or announces a tender or exchange offer that would result in beneficial ownership of 10% or more of the Company’s Common Stock.

If a shareholder beneficially owns 10% or more of the Company’s Common Stock at the time of the adoption of the plan, such shareholder’s ownership will be grandfathered, but the rights would become exercisable if such shareholder subsequently increases its ownership.

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Further details regarding the Rights Plan is available in a Form 8-K to be filed by the Company with the U.S. Securities and Exchange Commission.

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