Good morning ladies and gentlemen and welcome to EnteroMedics Third Quarter 2013 Financial Results Conference Call. At this all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instruction will follow at that time. (Operator Instructions) As a reminder, this call is being recorded. I would now like to turn the call over to Greg Lea, Senior Vice President, Chief Financial Officer and Chief Operating Officer to start the call. Mr. Lea.

Thank you for joining us this morning to discuss our third quarter financial results and business update. As a reminder, this conference call, as well as EnteroMedics’ SEC filings and website at enteromedics.com contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Our results could differ materially from those discussed due to known and unknown risks, uncertainties and other factors. These 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 10-K filed March 7, 2013. With me on the call from EnteroMedics is Dr. Mark Knudson, our President and Chief Executive Officer. We will begin with prepared remarks when these are concluded, we’ll open the call for questions. I will now turn the call over to Mark.

Thank you, Greg. Good morning everyone. Our efforts over the past several months have been squarely focused on the PMA process for approval of the Maestro Rechargeable System in the U.S. We believe that the Maestro System holds potential to fill significant gap in the obesity treatment landscape as a unique patient friendly option for addressing this long-term public health challenge. The need for new treatment options is an issue of which the medical community, law makers and regulators are acutely aware. The FDA has outlined its evolving view of evaluation criteria when it comes to obesity treatment, a view that realized not just on study end points, but on real benefit risk as central to the assessment. We believe that the Maestro System, which is demonstrated significant and clinically meaningful efficacy when compared to control and exceeded all safety end points and clinical trials has an excellent benefit risk profile, which we believe will satisfy current FDA standards for medical device approval. This is why we are confident in moving forward with our PMA application. In that regard, we achieved several key U.S. regulatory milestones during the past quarter including acceptance of the PMA, pre-market approval application in July and timely feedback from the agency and their formal response. This response is a standard component of the PMA process was encouraging both in its timeliness and charm. With questions directed primarily at device testing and clinical data including training programs for users and a post approval study, we receive the response in late September, approximately 85 days after FDA’s acceptance of our PMA for filing. Since the end of the quarter, we have had a positive and productive meeting with the FDA and we are now finalizing our response for their questions which will be submitted shortly. In parallel…

Thank you, Mark. For the three months ended September 30, 2013, the company reported a net loss of $6.3 million, or a negative $0.11 per share including research and development expenses of $2.8 million and general administrative expenses of $3.2 million. For the nine months ended September 30, 2013, the company reported a net loss of $19.2 million, or a negative $0.36 per share. Our cash burn from operations for the nine months ended September 30, 2013 was $14.1 million. Operating expenses were primarily associated with support of our multiple ongoing clinical trials, including the ReCharge Study, international commercialization efforts and the company’s pre-market approval application process and the continued development of the Maestro System. On September 30, 2013, the company’s cash, cash equivalents, restricted cash and short-term cash investment totaled $21.3 million, which includes $3.6 million added to our cash position through the use of our ATM facility with Canaccord Genuity. In addition subsequent to the quarter end through October 28, 2013, we have brought in a further $2.7 million using the ATM. Utilizing this facility has allowed us to maintain our cash position quarter-over-quarter, extend our cash burn rate and satisfy requirement, any requirement under our current debt agreement. We believe our cash available resources along with diligent cash management policy should allow us to continue executing our pivotal regulatory strategy and commercialization activities well into 2014. With that I will turn the call back to Dr. Knudson. Mark?

Thank you, Greg. To conclude, we are pleased with the progress so far with our PMA application and with FDA’s responsiveness. We remain focused on preparing for an anticipated Advisory Committee panel and on working with the agency toward an approval decision next year. As these efforts progress, we will continue to develop our global commercialization strategy with a goal of delivering VBLOC therapy to the millions of individuals suffering with obesity and its related co-morbidities. We look forward to updating you on our progress in the upcoming months and quarters. With that I will open the line for questions. Operator?

Thank you. (Operator Instructions) We have a question come from Bill Plovanic of Canaccord. Your line is open sir. Bill J. Plovanic – Canaccord Genuity, Inc.: Hello, can you hear me?

Yes we can. Bill J. Plovanic – Canaccord Genuity, Inc.: Great, thank you. So you’ve given us basically the milestones that are coming up in the panel meeting. I guess as we get to the panel meeting, I’m just wondering if you could frame it for us, what type of physicians will be on the panel, what will be the make-up of the panel do you expect?

We anticipate that it will be somewhere between 9 and 13 individuals. We anticipate that there will be at least two or three bariatric surgeons. We also know that there will be at least two gastroenterologists and there are a couple of physicians that are permanent members of the panel as well as a statistician and a consumer advocate. So we have a reasonable idea of who will be on the panel and during our process of planning and practicing for preparation for panel based on those assumptions. Bill J. Plovanic – Canaccord Genuity, Inc.: Okay. And that’s when you say the first half; do you expect your early 2014, is that more of a Q1 event or Q2 or at this time you just don’t know?

Well, we just – we don’t know for sure. We would anticipate that it would be a Q1 event. If it did trickle over it would not trickle very far over, but we anticipate it will be a Q1 event. Bill J. Plovanic – Canaccord Genuity, Inc.: Okay. And just for clarity Greg just on the cash position, I think you said your net cash at the end of the quarter was $13.3 million and then you said you raised another $2.6 million, you’re sitting roughly $16 million. Did I get that right?

Bill, our net cash at the end of the quarter was $21.3 million. Bill J. Plovanic – Canaccord Genuity, Inc.: Just from debt as well…

Correct, correct. Yes the debt approximately, you’re right. Your calculation is correct, if we include the reduction for debt. Bill J. Plovanic – Canaccord Genuity, Inc.: Okay. And then okay, I just wanted to make sure, so roughly you have three quarters little over three quarters worth of cash. So definitely get us through the panel date.

That would be our expectation.

Yes. Bill J. Plovanic – Canaccord Genuity, Inc.: And then lastly, just I think your commentary when you started out with and I’m kind of phrasing here, but the FDA is maybe had some changing ways that they are viewing the data. I just wondered if you could expand upon that in terms of the end points and what have you? That’s all I have, thanks.

Sure. Based on the publication that FDA put on a Surgical Endoscopy as well as an Advisory Committee meeting they had last year on evaluating obesity devices. They have moved away from some of the end points that they originally had put in their plans or first our head companies worked for. So that now they tried it to a abroad look at benefit risk. So I want to look at what the benefit for to patient is versus the safety profile. And both in our pre-PMA meeting and in our 100-day meeting with FDA, they reiterated their commitment to that approach to evaluating products and to their plan to take us to panel based on that. Bill J. Plovanic – Canaccord Genuity, Inc.: Great, thank you.

Our next question is from Matt Hewitt of Craig-Hallum Capital. Your line is open. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Good morning and thanks for taking our questions. First one, have dates been suggested either by you or the FDA for that panel. Have you got some dates kind of held in your calendars?

Right now until they actually lock in a date, we just do not – we are not even putting anything in our calendars. When they give us a date, we will have a place in our calendar for it. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Okay. Secondly, on the commercialization side, which you talked about, it’s your plan to seek partners either on the manufacturing and/or on the sales and marketing side or are you going to be doing this alone once you hopefully have approval next year?

Matt, this is Greg. I would say, our plans are always in the U.S. We’ll look at all alternatives there, but our plan is to commercialize in the U.S., utilizing our own resources. We’ve been pretty focused on outside the U.S. establishing appropriate partners that would help us with for sure the sales and marketing side of commercialization and we think that will still be our pathway. From a manufacturing standpoint, at this point, we have no plan to partner with anybody that we use our contract manufacturers as you know and we are very pleased with the support that they are giving us at this point. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Okay. As far as outside of the U.S. have you been having those discussions and its simply a matter of waiting for the FDA decision or is there a possibility that you could have some type of announcement between now and then?

Well, I’ll comment in two ways on that Matt. One, we already have a distribution partner in Australia. We continue to have discussions with others. Most likely we wouldn’t see any form of formal announcement of any partners until after we have more directional with where we’re at on the U.S. regulatory path. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Okay. And you may have kind of hinted at this, but as far as right now on the ATM was that simply a function of the debt convents or what are the reason would you have to do it now versus maybe waiting until you’ve got a panel dates, just try to help me to understand that a little bit better.

With the uncertainty of the process to a certain extent and frankly with the shutdown a little bit, we didn’t know how that would affect us. We just felt that to give us more cash burn run rate, it was important for us to focus on that and as well as to satisfy the requirement, the one requirement under our debt agreement. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Okay, last one for me and then I’ll jump back in the queue. You kind of walked through the timeline with Australia reimbursement, the hospital and physician component of that reimbursement, seems to have stretched. I think last year, when you had kind of launched there and done your initial shipment, expectation was that it would take about a year to garner that reimbursement. It sounds like it potentially could end up being two years. Did I hear that correctly? Or is something gone kind of gotten underway?

Yes, something has gotten in the way and that is that we felt that we needed to put all of our resources on getting through the U.S. regulatory process and conserve cash. There was – the time as you know we pulled back from a lot of our OUS activities back in February of this year. And one of the things that we did was you can only, just in some ways it’s like the CMS process here. There are only one or two openings a year where you can make these applications. And we’ve chosen to work Australia, that Australian application on this timing rather than the earlier timing that we had earlier talked about. Matt G. Hewitt – Craig-Hallum Capital Group LLC: Okay, all right. Fair enough. Thank you.

(Operator Instructions) Next question is from Bruce Jackson of Lake Street Capital. Your line is open. Bruce D. Jackson – Lake Street Capital Markets, LLC: Thanks. Just a follow-up on Australia. Can you talk to us about what the next steps are for the reimbursement applications, and is it in anyway linked to the FDA process?

Bruce, this is Mark. It is not directly linked to the process, but it’s certainly it in every place in the world, it’s linked to that process indirectly. So there they will definitely have an influence on their activity there. But because of the timing, we think that that both the same time. We are preparing that application now, getting it ready and then we will submit it and it will go through the process there in Australia. Bruce D. Jackson – Lake Street Capital Markets, LLC: Okay. And then just be a little bit more specific is – are you waiting on the Australian application because you want to get the FDA approval first and are you using the same data for the Australian application?

We will use the Australian ReCharge centers data and to beef up the application. Our application already had enough information in it, but we will add that just for the sake of completeness, but we do have those data now and they are not tied together directly, they are only tied together based on resource allocation. Bruce D. Jackson – Lake Street Capital Markets, LLC: Okay. And then based on the resource allocation, do you have a kind of an anticipated target date for submitting that Australian reimbursement application?

We do but we’re not disclosing that at this point. Bruce D. Jackson – Lake Street Capital Markets, LLC: Okay. Then moving over to the FDA, do you know have they started a contact the potential panel members to find out the availability of their counters and those sorts of pre-scheduling activities?

It’s an understanding that they have. Bruce D. Jackson – Lake Street Capital Markets, LLC: Okay, that’s it for me. Thank you.

(Operator Instructions) The question is from Suraj Kalia of Northland Securities. Your line is open. Suraj A. Kalia – Northland Securities, Inc.: Good morning gentlemen.

Good morning. Suraj A. Kalia – Northland Securities, Inc.: So, Mark, in terms of 18 month data, forgive me I hopped in about a few minutes late into the call, if you talk about the 18 months data for ReCharge whether you all have locked it down, any color would be great.

Sure. 18 month data will be submitted with our response to FDA. It is our intention that FDA see those data before we publicly release them. Once the FDA has seen those data, it is our intention to release the 18 month data. Suraj A. Kalia – Northland Securities, Inc.: So would you release the 18 month data pre-panelled in?

Yes we would. Suraj A. Kalia – Northland Securities, Inc.: And briefing documents being published, you would announce it in the press release or something?

Yes we would. Suraj A. Kalia – Northland Securities, Inc.: Fair enough. And Mark, a conjunctional question, how do you view the market landscape currently, have they’re again recently [Indiscernible] I’m curious how your view of the marketplace specifically for device related therapies?

I think the marketplace for device related therapy has undergone a significant transformation over the last few years with – maybe with the surgery market and moving really to a self-referral market if you will, a very few patients are actually referred by general practitioners or specialty physicians for therapy. Most of the time, our patients refers themselves based on either having gotten to the point in which they feel they must do something or a co-morbidity that’s out of control and the place for device therapies is in that gap, but right now there isn’t anything between exercised drugs and diets and anatomy-altering surgery, LAP-BAND, the adjustable gastric band is the only thing that’s available and as we are – as the numbers have shown that is really last flavor with both surgeons and patients. So there is really nothing available in that great and large group of people who want to have something that is not as invasive or as life altering as the major surgeries to help them control their comorbidities and can control their weight. So we think in fact that the opportunity for us has in fact gotten stronger as time has progressed. And as people understand, the downside of restricted procedures and band is truly a restricted procedure.

Fair enough. Mark and Greg, I guess those were all the questions I have this morning. Thanks very much for taking my questions.

Sure, sure Bill.

(Operator Instructions) Next question is from Jeffrey Kone of Wall Street Capital. Your line is open.

Good morning. Just one more question on the ATM. You’ve now satisfied the bankers as you said and also got some extra runway on there. Can we conclude that you are not going to do the full $20 million?

I comment this way Jeff, this is Greg. Good morning by the way. We feel that we are adequately capitalized. We are now focused on our regulatory pathway, completing our regulatory pathway. It’s good that we have a number of options should that pathway be extended, which we are not anticipating. So we feel comfortable with where we are at right now.

Thank you.

Thank you. Our next question is from Morgan David. Your line is open.

It’s David Morgan. I have a question on the follow-up data after the 12 and two year data and this part of the call, I don’t know if you commented as far as what is the FDA’s asset [indiscernible] whether it’s available as far as the continuation of the weight loss after the 12?

Yes, those are the 18-month data that I referred to with Suraj and we are – the FDA has requested those data as part of this – our preparation going into the briefing books. We intend to supply that as part of our response here when we send that shortly. After FDA has received those data, we do intend to make those data public.

Okay. And then is at this point, I mean what type of – haven’t really calculated what’s available that you have the complete second year at this point. Is that something you have right now?

We have 18 month.

Okay. And that’s probably what the panel will see or what you also augment the updated by the panel date.

I’m not commenting on what will grow that panel at this point. We know right now that in the information we are sending to FDA, we’ll have a lot and monitored 18 month dataset.

Okay. And then perhaps you said you continued to see holding of the wider or stability after the one-year period, is that still what you are saying or what can you tell us on that?

What I can tell you is that after FDA has seen the 18-month data we will publish it.

Okay, so we should see that rather soon than, you already have a place to publish it or...?

I guess, I should just – by publish I mean, put it out in the press release.

Okay, all right. So when I talked at the scientific meeting where doctors regularly issue it at that point.

Yes.

Okay. And then I have a couple of other things going on, I’ll be back in the fourth quarter. On the ATM did you comment how much you sold after the quarter ended as far as how many shares were issued after the quarter ended or I guess what you sold during the quarter?

Yes, we sold inside the quarter $3.6 million and $3.6 million under the ATM and after the quarter end through October 28 that total was raised to $6.3 million in aggregate. So an addition of $2.7 million.

So basically, you picked up about a quarters worth of cash at this point or two, based on current run rate?

Based on our current run rate that’s correct.

And as far as the bank is concerned, do you have any plans to just completely pay them off or you just going to leave it at this point that you satisfied their requirements?

We haven’t announced any plans, so we enjoy a strong partnership with our Silicon Valley Bank and at this point we haven’t announced any plans do one way or the other.

Okay, all right. Thanks.

Thank you. There are no further questions at this time. I would like to turn the call over to management for closing remarks.

Well, thank you again everyone for joining us on our third quarter call. We look forward to updating you as we continue to meet the milestones that we discussed here and move forward in our FDA approval process. Thank you very much for joining us and goodbye.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the program. You may now disconnect. Have a wonderful day.