MALVERN, PA — Neuronetics, Inc. (NASDAQ: STIM) reached an understanding with its second-largest shareholder, Jorey Chernett, that could give him a role in shaping the medical technology company’s board while easing concerns over its capital position and management strategy.
Under the agreement, Chernett will have an opportunity to recommend a new director for the Neuronetics board, subject to customary approvals and governance procedures.
The arrangement follows discussions between Chernett and management about Neuronetics’ balance sheet and capital optimization strategies. Following those discussions, Chernett expressed confidence in the company’s financial position and management’s stewardship of the business.
“Management has engaged with us thoughtfully and in good faith, and I’ve come away with real confidence in the path forward,” Chernett said.
The understanding also calls for Neuronetics’ board to continue evaluating strategic, operational and financial opportunities as it seeks to increase long-term shareholder value. The company did not identify specific alternatives under consideration.
Madryn Asset Management LP, Neuronetics’ largest shareholder, also reaffirmed its support for the company’s current direction.
“As the Company’s largest shareholder, we have deep conviction in the long-term value of the business,” Avi Amin, managing partner of Madryn and a Neuronetics director, said.
The agreement creates a potential avenue for greater direct shareholder representation on the board without guaranteeing Chernett’s nominee a seat. Any appointment remains subject to the company’s existing board approval and governance processes.
Neuronetics did not identify a prospective director or provide a timetable for a recommendation or potential appointment.
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