Company Update (NASDAQ:ETRM): EnteroMedics Inc Announces Closing of $19.0 Million Underwritten Public Offering and Full Exercise of Over-allotment Option

EnteroMedics Inc (NASDAQ:ETRM) announced the closing of an underwritten public offering of units for gross proceeds of $19.0 million, which includes the full exercise of the underwriters’ over-allotment option to purchase additional shares and warrants, prior to deducting underwriting discounts and commissions and offering expenses payable by EnteroMedics.

The offering comprised of Class A Units, priced at a public offering price of $5.31 per unit, with each unit consisting of one share of common stock and one five-year warrant (each, a “warrant”) to purchase one share of common stock with an exercise price of $5.84 per share, and Class B Units, priced at a public offering price of $1,000 per unit, with each unit comprised of one share of preferred stock, which is convertible into 188 shares of common stock, and warrants to purchase 188 shares of common stock. The conversion price of the preferred stock issued in the transaction as well as the exercise price of the warrants are fixed priced and do not contain any variable pricing features nor any price based anti-dilutive features. The preferred stock issued in this transaction includes a beneficial ownership blocker but has no dividend rights (except to extent dividends are also paid on the common stock), liquidation preference or other preferences over common stock. The securities comprising the units are immediately separable and will be issued separately.

Shares of Enteromedics are currently trading at $7.62, down $0.34 or -4.31%. ETRM has a 1-year high of $132.30 and a 1-year low of $1.75. The stock’s 50-day moving average is $4.44 and its 200-day moving average is $1.15.

EnteroMedics, Inc. is a clinical development stage medical device company that engages in the design and development of devices that use neuroblocking technology to treat obesity, metabolic diseases and other gastrointestinal disorders. Its proprietary neuroblocking technology is designed to intermittently block the vagus nerve using high frequency, low energy, electrical impulses. Its initial product Maestro System, which uses VBLOC therapy to affect metabolic regulatory control, limit the expansion of the stomach, help control hunger sensations between meals, reduce the frequency and intensity of stomach contractions and produce a feeling of early and prolonged fullness. 

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