EnteroMedics Strengthens Financial Position With $20 Million Debt Agreement and $5.0 Million Equity Offering

EnteroMedics Inc.

today announced that it has closed on a growth capital term loan for $20 million, amending its existing debt agreement with Silicon Valley Bank, and entered into a purchase agreement for a $5 million equity offering. The new growth capital loan is structured such that $10 million will be funded immediately, a portion of which will be used to repay in full the Company's outstanding debt of approximately $4.7 million. An additional $10 million will become available assuming the Company meets the primary endpoints of the ReCharge Study as well as certain financial objectives for 2012. Proceeds from the loan will supplement the Company's cash, cash equivalents and short-term investments, which totaled $29.7 million as of December 31, 2011. The loan facility is structured with an interest-only period until March 2013, followed by a 30-month amortization period. The Company also entered into a definitive agreement with a current significant stockholder of the Company, to sell 2,271,705 shares of the Company's common stock in a registered direct equity offering, at a price of $2.22 per share, for gross proceeds of approximately $5,050,000, before deducting placement agent fees and estimated offering expenses. Craig-Hallum Capital Group LLC acted as the sole placement agent for the offering. The offering is expected to close on or about April 20, 2012, subject to satisfaction of customary closing conditions.