EnteroMedics closes $19m offering

EnteroMedics (NSDQ:ETRM) said today it closed an underwritten public offering of Class A units, raising $19 million, including a fully-exercised underwriters over-allotment option.

The St. Paul, Minn.-based company floated a total 751,412 units of common stock, 12,531 units of preferred stock convertible into 2.4 million shares of common stock, and warrants to purchase an additional 3.1 million shares.

In addition, underwriters fully exercised the over-allotment option in the round, purchasing an additional 466,695 shares of common stock with warrants to purchase an additional amount equal to the initial amount.

Each class A unit consists of 1 share of common stock and a 5-year warrant to purchase 1 share of common stock with an exercise price of $5.84 per share. Each class B unit consists of 1 share of preferred stock, which is convertible into 188 shares of common stock, and warrants to purchase 188 shares of common stock according to a press release.

Ladenburg Thalmann & Co. acted as sole book-runner for the offering, the company said.

Last month, the company said that its board declared a 1-for-70 reverse stock split as part of the company’s efforts to regain compliance with the NASDAQ exchange’s $1.00 minimum bid price.

EnteroMedics also said last month that it planned to convert all of the nearly $18.8 million it’s carrying in senior amortizing convertible notes as of Dec. 27. Net proceeds are earmarked for commercialization of the vBloc neuromodulation treatment for weight loss “and for other working capital and general corporate purposes,” the company said.

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