PHILADELPHIA, Nov. 2, 2011 /PRNewswire/ -- Echo Therapeutics, Inc. (Nasdaq: ECTE), a company developing the Symphony® tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring (tCGM) system and the Prelude® SkinPrep System for transdermal drug delivery, announced that the Company entered into an agreement with its largest shareholder, Platinum Partners, in which Platinum exercised warrants with an exercise price of $1.7 million. In lieu of delivering cash for the warrant exercises, Platinum surrendered all of the outstanding Series B Perpetual Preferred Stock as full payment for the warrant exercise.
After this transaction, the Company no longer has any Series B redemption obligation and has no outstanding Series B stock.
The terms of the Series B stock required the Company to use proceeds from certain licensing and financing transactions to redeem outstanding Series B stock. As the sole holder of the Series B stock, Platinum on several occasions waived the redemption requirement in order to allow the Company to conserve cash from its financing activities and continue to advance its product development.
“This transaction is a very positive event for the Company and its shareholders. We have now accomplished two additional major goals of our capital structure clean up efforts. First, we have eliminated numerous warrants which represented both complexity and overhang. Second, a major driver in our decision to eliminate the Series B stock at this time was to extinguish the requirement that proceeds from financing transactions be used to pay down preferred stock obligations,” said Patrick T. Mooney, M.D., Chairman and CEO of Echo Therapeutics. “This transaction affords us greater financial control and flexibility to invest future cash flows solely to support our growth. We are very pleased that Platinum has shown the leadership that is necessary for Echo to achieve long term shareholder value.”
About Echo Therapeutics
Echo Therapeutics is developing the Symphony tCGM System as a non-invasive, wireless, transdermal continuous glucose monitoring system for patients with diabetes and for use in hospital critical care units. Echo is also developing its needle-free Prelude SkinPrep System as a platform technology for enhanced skin permeation for 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 and its partners’ ongoing studies, including the safety and efficacy of Echo’s Symphony tCGM and Prelude SkinPrep Systems, the failure of future development and preliminary marketing efforts related to Echo’s Symphony tCGM and Prelude SkinPrep Systems, 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 diagnostic and transdermal drug delivery products based on its skin permeation platform technologies, including the Symphony tCGM and Prelude SkinPrep Systems, 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 Symphony tCGM and Prelude SkinPrep Systems. 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, 2010, 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
(215) 717-4104
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SOURCE Echo Therapeutics, Inc.
