Echo Therapeutics Announces Entry Into Definitive Agreements for the Sale of up to $5.1 Million of Convertible Notes and Warrants

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ISELIN, N.J., Feb. 1, 2016 /PRNewswire/ -- Echo Therapeutics, Inc. (Nasdaq: ECTE), a medical device company focused on non-invasive continuous glucose monitoring (CGM) and associated technologies, today announced that it entered into a Securities Purchase Agreement with certain institutional and other accredited investors for the sale of up to $5,145,000 of secured convertible notes and warrants to purchase common stock in two tranches. The initial closing of $1,787,000 occurred on January 29, 2016.  The second closing of $3,358,000 is subject to shareholder approval. Certain previously issued short-term bridge notes were surrendered as payment of the initial closing purchase price.

The notes are convertible into shares of the Company's common stock at a price of $1.50 per share and mature twelve months from the date of issuance. In connection with the initial closing, the Company issued five-year warrants to purchase up to 1,191,333 shares of its common stock at $1.50 per share. In connection with the second closing, warrants, with a one and a half year life, will be issued to purchase up to 2,238,667 shares of Echo's common stock at $1.50 per share.

Newbridge Securities Corporation/LifeTech Capital served as the placement agent for the transaction. After the placement agent fees and estimated offering expenses payable by the Company, the Company expects to receive net proceeds of approximately $4.85 million which will be used as working capital for research and development and for other general corporate purposes.

"The completion of this financing signifies a new and exciting chapter for Echo and our game changing technology. This additional capital will allow us to expedite our development efforts and take advantage of important business development initiatives," commented Scott W. Hollander, Echo's President and CEO.

The securities offered and sold in this private placement have not been registered under the Securities Act of 1933, as amended or applicable under state securities laws. Accordingly, the securities may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. As part of the transaction, the Company has agreed to file a resale registration statement with the Securities and Exchange Commission for purposes of registering the resale of the shares of common stock underlying the senior secured convertible notes issued in the private placement.

This notice does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the securities under the resale registration statement will only be by means of a prospectus.

About Echo Therapeutics

Echo Therapeutics is developing its non-invasive, wireless, continuous glucose monitoring (CGM) system. A significant opportunity exists for the Company's CGM to be used in the outpatient diabetes market and in the fitness, weight loss and personal lifestyle wearable-health space. A longer-term opportunity also exists in the hospital settings. Echo developed its needle-free skin preparation device as a platform technology that allows for enhanced skin permeation enabling extraction of analytes, such as glucose, and enhanced delivery of topical pharmaceuticals.

Cautionary Statement Regarding Forward Looking Statements

The statements in this press release that are not historical facts may constitute forward-looking statements that are based on current expectations and are subject to risks and uncertainties that could cause actual future results to differ materially from those expressed or implied by such statements. Those risks and uncertainties include, but are not limited to, risks related to regulatory approvals and the success of Echo's clinical studies, the safety and efficacy of Echo's CGM System, the failure of future development and preliminary marketing efforts related to Echo's CGM System, Echo's ability to secure additional commercial partnering arrangements, risks and uncertainties relating to Echo's and its partners' ability to develop, market and sell Echo's CGM System, the availability of substantial additional equity or debt capital to support its research, development and product commercialization activities, and the success of its research, development, regulatory approval, marketing and distribution plans and strategies, including those plans and strategies related to its CGM System. These and other risks and uncertainties are identified and described in more detail in Echo's filings with the Securities and Exchange Commission, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2014, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. Echo undertakes no obligation to publicly update or revise any forward-looking statements.

For More Information:
Christine H. Olimpio                                         
Director, Investor Relations and Corporate Communications
(732) 201-4189