EnteroMedics Announces Pricing of $13 Million Public Offering of Common Stock and Warrants

EnteroMedics Announces Pricing of $13 Million Public Offering of Common Stock 
and Warrants 
ST. PAUL, MN -- (Marketwire) -- 02/22/13 --  EnteroMedics Inc.,
(NASDAQ: ETRM), the developer of medical devices using neuroblocking
technology to treat obesity, metabolic diseases and other
gastrointestinal disorders, today announced that it has priced an
underwritten public offering of 13,770,000 shares of its common stock
and warrants to purchase 5,508,000 shares of its common stock. Each
share of common stock sold in this offering will be sold with a
warrant to purchase 0.40 of a share of common stock. Each share and
corresponding warrant will be sold at an aggregate price to the
public of $0.95, for gross proceeds of $13,081,500. The net proceeds
from the sale of the shares and corresponding warrants, after
deducting the underwriter's discounts and other estimated offering
expenses payable by the Company, will be approximately $12.0 million.
The warrants are exercisable for a period of five years beginning on
the closing date of the offering at an exercise price of $1.14 per
share (120% of the aggregate offering price for a share of common
stock and corresponding warrant). 
The Company currently intends to use the net proceeds from this
offering to continue work toward regulatory approval of the
Maestro(R) RC System in the United States, for international
commercialization efforts, for clinical and product development
activities and for other working capital and general corporate
purposes. The offering is expected to close on or about February 27,
2013, subject to the satisfaction of customary closing conditions. 
Craig-Hallum Capital Group LLC is acting as the sole book-running
manager for the offering. 
A shelf registration statement (File No. 333-183313) relating to
these securities was declared effective by the Securities and
Exchange Commission on August 29, 2012. A preliminary prospectus
supplement related to the offering was filed with the Securities and
Exchange Commission. The securities may be offered only by means of a
prospectus, including a prospectus supplement, forming a part of the
effective registration statement. When available, copies of the final
prospectus supplement and accompanying base prospectus related to
this offering may be obtained from the Securities and Exchange
Commission's website at http://www.sec.gov or by contacting
Craig-Hallum Capital Group LLC, 222 South Ninth Street, Suite 350,
Minneapolis, MN 55402, by calling 612-334-6300, or by emailing
This press release does not constitute an offer to sell or the
solicitation of offers to buy any securities of the Company, and
shall not constitute an offer, solicitation or sale of any security
in any state or jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under
the securities laws of any such state or jurisdiction. 
About VBLOC(R) Therapy
 EnteroMedics developed VBLOC(R) vagal
blocking therapy to offer bariatric surgeons and their patients a
less invasive alternative to existing surgical weight loss procedures
that may present significant risks and alter digestive system
anatomy, lifestyle and food choices. VBLOC(R) Therapy is delivered
via the Maestro(R) System through laparoscopically implanted leads to
intermittently block the vagus nerves using high-frequency,
low-energy electrical impulses. VBLOC(R) Therapy is designed to
target the multiple digestive functions under control of the vagus
nerves and to affect the perception of hunger and fullness. 
About EnteroMedics Inc.  
EnteroMedics is a medical device company focused on the development
and commercialization of its neuroscience based technology to treat
obesity and metabolic diseases. EnteroMedics' proprietary technology,
VBLOC(R) vagal blocking therapy, delivered by a pacemaker-like device
called the Maestro(R) Rechargeable System, is designed to
intermittently block the vagus nerves using high-frequency,
low-energy, electrical impulses. VBLOC allows people with obesity to
take a positive path towards weight loss, addressing the lifelong
challenge of obesity and its comorbidities without sacrificing
wellbeing or comfort. EnteroMedics' Maestro Rechargeable System has
received CE Mark and is listed on the Australian Register of
Therapeutic Goods.  
Forward-Looking Safe Harbor Statement:  
This press release contains forward-looking statements about
EnteroMedics Inc. Our actual results could differ materially from
those discussed due to known and unknown risks, uncertainties and
other factors including our limited history of operations; our losses
since inception and for the foreseeable future; our lack of
commercial regulatory approval for our Maestro(R) System for the
treatment of obesity in the United States or in any foreign market
other than Australia and the European Community; our preliminary
findings from our EMPOWER(TM) and ReCharge pivotal trials; our
ability to comply with the Nasdaq continued listing requirements; our
ability to commercialize our Maestro System; our dependence on third
parties to initiate and perform our clinical trials; the need to
obtain regulatory approval for any modifications to our Maestro
System; physician adoption of our Maestro System and VBLOC(R) vagal
blocking therapy; our ability to obtain third party coding, coverage
or payment levels; ongoing regulatory compliance; our dependence on
third party manufacturers and suppliers; the successful development
of our sales and marketing capabilities; our ability to raise
additional capital when needed; international commercialization and
operation; our ability to attract and retain management and other
personnel and to manage our growth effectively; potential product
liability claims; potential healthcare fraud and abuse claims;
healthcare legislative reform; and our ability to obtain and maintain
intellectual property protection for our technology and products.
These and additional risks and uncertainties are described more fully
in the Company's filings with the Securities and Exchange Commission,
particularly those factors identified as "risk factors" in the annual
report on Form 10-K filed March 15, 2012. We are providing this
information as of the date of this press release and do not undertake
any obligation to update any forward-looking statements contained in
this document as a result of new information, future events or
Caution - Investigational device. Limited by Federal (United States)
law to investigational use.  
The implantation procedure and usage of the Maestro(R) System carry
some risks, such as the risks generally associated with laparoscopic
procedures and those related to treatment as described in the
ReCharge clinical trial informed consent.  
Company Contact:
EnteroMedics Inc.
Greg S. Lea
(651) 789-2860 
Media Contact:
Sam Brown Inc.
Mike Beyer
(312) 961-2502
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