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

EnteroMedics Announces Closing of $13 Million Public Offering of Common Stock 
and Warrants 
ST. PAUL, MN -- (Marketwire) -- 02/27/13 --    EnteroMedics Inc.,
(NASDAQ: ETRM), the developer of medical devices using neuroblocking
technology to treat obesity, metabolic diseases and other
gastrointestinal disorders, today announced the closing of its
previously announced 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 the offering was sold with
a warrant to purchase 0.40 of a share of common stock at an aggregate
price to the public of $0.95 per share and corresponding warrant.
Total net proceeds to the Company from the offering are approximately
$12.0 million after deducting underwriting discounts and commissions
and estimated offering expenses. The warrants are exercisable for a
period of five years 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
Craig-Hallum Capital Group LLC acted 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 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. 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 bart.federak@craig-hallum.com.  
This press release does not c
onstitute 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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