As a result of the split, every 15 shares of stock in the St. Paul, Minn.-based company will be consolidated into a single share.
Shares in EnteroMedics dipped today in mid-day trading in response, down 4.7% at 12.7¢ as of 12:47 EST.
“Shareholder approval of these proposals gives us the tools to execute the financial strategy underlying our commercial strategy for vBloc Therapy. We continue to execute on a number of initiatives for providing patient access to this groundbreaking new treatment for obesity, including public and private payer reimbursement. This process, while time consuming, is a cornerstone of our product launch strategy, and we now have the financial resources in place to reach a number of important commercial goals,” CEO Dan Gladney said in a press release.
Any fractional shares of common stock from the reverse split will be rounded to the nearest whole share while fractional shares of common stock pursuant to stock options or warrants will be rounded down.
The company said it issued common stock underlying convertible notes and warrants from a securities purchase on November 4, distributing $25 million in senior amortizing convertible notes and warrants to 5 institutional investors.
EnteroMedics said $1.5 million of notes and warrants were issued at closing, and the remainder will be issued in tranches of $11 million and $12.5 million.
Proceeds from the offering will support the company’s vBloc Neurometabolic therapy and its Maestro device.
The Maestro device functions by stimulating the vagal nerve, which is associated with hunger and satiety, in a specific manner that St. Paul, Minn.-based Enteromedics says helps patients lose weight. To control for differences between groups, the sham devices contained a similar neuroregulator that dissipated charge into a resistor at a rate similar to the active device.