ENTEROMEDICS INC. (NASDAQ:ETRM) Files An 8-K Other Events

Item8.01

Reverse Split

On December23, 2016, EnteroMedics Inc. (the Company) issued a
press release announcing that the Companys Board of Directors had
approved a one (1)for seventy (70)reverse split of the Companys
outstanding common stock, $0.01 par value per share (the Reverse
Stock Split). The Company expects that the Reverse Stock Split
will be effective for trading purposes upon the commencement of
trading on December28, 2016, at which point the Companys common
stock will begin trading on a split adjusted basis on the NASDAQ
Capital Market. Additionally, as part of the Reverse Stock Split,
proportional adjustments will be made to the Companys outstanding
stock options and warrants. The Reverse Stock Split was approved
by the Companys stockholders at a special meeting of stockholders
held on December12, 2016.

The Reverse Stock Split will not affect the number of shares of
common stock or preferred stock authorized by the Companys
certificate of incorporation, or the par value of the Companys
stock. The Company will not issue any fractional shares as a
result of the Reverse Stock Split. Instead, fractional shares of
common stock will be rounded up to the nearest whole share and
any fractional shares issuable to stock options or warrants will
be rounded down to the nearest whole share. After the
effectiveness of the Reverse Stock Split, the stockholders will
receive information from Wells Fargo Shareowner Services, the
Companys transfer agent, regarding the process for exchanging
their shares.

The Reverse Stock Split is being effected as part of the Companys
plan to regain compliance with the $1.00 minimum bid price
continued listing requirement of the NASDAQ Capital Market. As
previously disclosed, the Company received a letter from the
NASDAQ Listing Qualifications Staff in May 2016 indicating that
the bid price of the Companys common stock for the last 30
consecutive trading days had closed below the minimum of $1.00
per share required for continued listing. Additionally, on
November9, 2016, the Company received a notice of delisting
related to its failure to comply with the Minimum Bid rule. The
Company has appealed to Nasdaq for a hearing before a Listing
Qualification Panel prior to being delisted, which is currently
scheduled for January12, 2017.

A copy of the press release is filed as Exhibit99.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.

Retirement of Senior Amortizing Convertible Notes

On December23, 2016, the Company announced that all $18.75
million of its Senior Amortizing Convertible Notes (the Notes)
will be converted as of Tuesday, December27, 2016 into shares of
common stock or amortized through issuances of stock and so will
no longer be outstanding as of that date. The Notes were issued
to four institutional investors to a securities purchase
agreement dated as of November4, 2015. Under the terms of the
securities purchase agreement, the Company issued $1.5 million of
the Notes at the initial closing, with the balance issued in two
tranches of $11.0 million and $6.25 million. In connection with
the issuance of the Notes, the Company issued warrants to each
holder, which remain outstanding. The Company used the net
proceeds from this offering to continue its commercialization
efforts for vBloc Neurometabolic Therapy, clinical and product
development activities, and for other working capital and general
corporate purposes.

A copy of the press release is filed as Exhibit 99.1 to this
Current Report on Form 8-K and is incorporated herein by
reference.

(d) Exhibits

About ENTEROMEDICS INC. (NASDAQ:ETRM)