Tue, 22 Oct 2019

SAN CLEMENTE, CA / ACCESSWIRE / June 14, 2019 / ReShape Lifesciences Inc. (OTCQB: RSLS), a developer of minimally invasive medical devices to treat obesity and metabolic diseases, today announced that it has entered into definitive agreements with certain healthcare focused institutional investors for the sale of 400,000,000 shares of common stock (or common stock equivalents), series A warrants to purchase up to 400,000,000 shares of common stock and series B warrants to purchase up to 400,000,000 shares of common stock in a private placement at a price of $0.02 per share and associated warrants for gross proceeds of approximately $8 million. The number of shares of common stock (and common stock equivalents) issuable to the investors is subject to adjustment following the effectuation of a reverse stock split by the Company, as set forth in the definitive agreements. The transaction is anticipated to close on or about June 18, 2019, subject to customary closing conditions.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The Series A Warrants are exercisable immediately with a term of five years following the effectuation of a reverse stock split by the Company and an exercise price of $0.022 per share and the Series B Warrants are exercisable immediately with a term of one year following the effectuation of a reverse stock split by the Company and an exercise price of $0.02 per share. The exercise prices of the warrants are subject to adjustment following the effectuation of a reverse stock split by the Company, as set forth in the warrants.

The net proceeds from the offering are anticipated to be approximately $7.2 million. The Company intends to use the net proceeds for the repayment of indebtedness, working capital and general corporate purposes. The Company has agreed to file a resale registration statement for the shares of common stock and the shares of common stock underlying the warrants issued in the offering within 60 days pursuant to a registration rights agreement and to use its best efforts to cause such registration statement to be declared effective within 90 days, or, in the event of a 'full review' by the SEC, within 120 days.

The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.

Further information regarding the private placement can be found in the Current Report on Form 8-K that will be filed by the Company with the SEC.

About ReShape Lifesciences Inc.

ReShape Lifesciences™ is a medical device company focused on technologies to treat obesity and metabolic diseases. The FDA-approved Lap-Band® Adjustable Gastric Banding System is designed to provide minimally invasive long-term treatment of severe obesity and is an alternative to more invasive surgical stapling procedures such as the gastric bypass or sleeve gastrectomy. The ReShape Vest™ System is an investigational, minimally invasive, laparoscopically implanted medical device that wraps around the stomach, emulating the gastric volume reduction effect of conventional weight-loss surgery, and is intended to enable rapid weight loss in obese and morbidly obese patients without permanently changing patient anatomy.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this release include statements regarding the satisfaction of customary closing conditions in connection with the private placement and the anticipated use of proceeds therefrom. These forward-looking statements generally can be identified by the use of words such as 'expect,' 'plan,' 'anticipate,' 'could,' 'may,' 'intend,' 'will,' 'continue,' 'future,' other words of similar meaning and the use of future dates. These forward-looking statements are based on the current expectations of the Company's management and involve known and unknown risks and uncertainties that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, among others: statements relating to the completion, size and use of proceeds of the private placement that involve risks and uncertainties, including, without limitation, risks and uncertainties related to market conditions and the satisfaction of closing conditions related to the private placement, the ability of the Company to effect a reverse stock split, risks and uncertainties related to the Company's acquisition of the Lap-Band system, including the risk of default under its security agreement with Apollo Endosurgery entered into in connection with the transaction; the risk of default under the Company's secured subordinated convertible debentures due June 28, 2019 that it issued in March 2019; the Company's ability to continue as a going concern if it is unable to improve its operating results or obtain additional financing; risks related to ownership of the Company's securities as a result of its delisting from the Nasdaq Capital Market; the Company's proposed ReShape Vest product may not be successfully developed and commercialized; the Company's limited history of operations; the Company's losses since inception and for the foreseeable future; the Company's limited commercial sales experience; the competitive industry in which the Company operates; the Company's dependence on third parties to initiate and perform clinical trials; the need to obtain regulatory approval for the Company's ReShape Vest and any modifications to the Company's vBloc system and Lap-Band system; physician adoption of the Company's products; the Company's ability to obtain third party coding, coverage or payment levels; ongoing regulatory compliance; the Company's dependence on third party manufacturers and suppliers; the successful development of the Company's sales and marketing capabilities; the Company's ability to raise additional capital when needed; international commercialization and operation; the Company's ability to attract and retain management and other personnel and to manage growth effectively; potential product liability claims; the cost and management time of operating a public company; potential healthcare fraud and abuse claims; healthcare legislative reform; and the Company's ability to obtain and maintain intellectual property protection for the Company's 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 Company's annual report on Form 10-K filed May 16, 2019 and subsequent quarterly reports on Form 10-Q. 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 otherwise, except as required by law.

SOURCE: ReShape Lifesciences Inc.

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