ISELIN, N.J., Nov. 16, 2015 /PRNewswire/ -- Echo Therapeutics, Inc. (NASDAQ: ECTE), a medical device company focused on non-invasive continuous glucose monitoring (CGM) and associated technologies, today announced its financial results for the quarter ended September 30, 2015. Echo's Quarterly Report on Form 10-Q, as filed with the SEC, is available by visiting the Investors section of Echo's website at www.echotx.com.
Third Quarter 2015 Financial Results
Echo's net loss for the third quarter of 2015 was $1.8 million, or ($0.16) per share, compared to $2.7 million, or ($0.21) per share, for the same period in 2014. The $900,000 decrease in net loss was a result of decreases in research and development (R&D) and selling, general and administrative (S,G&A) expenses. Research and development expenses were $0.6 million for the third quarter of 2015 compared to $1.2 million for the third quarter of 2014. The decrease in research and development expenses was solely a function of the funding available to the Company. S,G&A expenses were $0.7 million during the third quarter of 2015 compared to $1.6 million during the third quarter of 2014. The decrease in S,G&A expenses was due to decreases in salaries and board, consultant and legal fees.
During the third quarter, investors Platinum Partners, Bejing Yi Tang Bio Science & Technology, Ltd. (BYT), an affiliate of our Chinese partner Medical Technologies Innovation Asia, Ltd. (MTIA) and RPSMSS, LLC provided gross proceeds and subscriptions of $481,500 in exchange for shares of Series F Preferred Stock with 5-year warrants to fund Echo's operations.
On August 20, 2015, Echo received a letter from The Nasdaq Stock Market informing the Company that it was no longer in compliance with the minimum stockholders' equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders' equity of at least $2.5 million. Further, as of that date, the Company did not meet the alternative compliance standards relating to the $35,000,000 market value of listed securities or $500,000 net income from continuing operations. This notification had no immediate effect on the Company's listing on the Nasdaq Capital Market. Nasdaq provided the Company with 45 calendar days from the receipt of the Nasdaq letter to submit a plan to regain compliance with the minimum stockholders' equity standard.
On October 5, 2015, the Company submitted its plan to Nasdaq to regain compliance with the minimum stockholders' equity standard. Based on the Company's submission, Nasdaq granted the Company the maximum allowable 180 day extension to February 16, 2016 to evidence compliance with the listing standards.
Product Development Update:
In a continued effort to better adapt Echo's CGM system to its targeted outpatient diabetes and wearable health markets, the Company's development team improved the system's key components as follows:
- Application Programming Interface (API): Completed the first version of its API that streamlines the development of software applications, or apps, that utilize Echo's non-invasive continuous glucose system. Echo released its API to MTIA for use in developing its Chinese CGM app. This standardized interface will enable a wide range of apps to use Echo's glucose data to serve consumers in diabetes, weight loss, athletics and other markets.
- Skin Preparation Device: Completed a working prototype of its next generation exfoliating device. The new self-exfoliating, ergonomic device and tip will be low-cost and easier to use than the previous model and will be compatible with the new sensor.
- Sensor: Developed an advanced prototype of a new flexible glucose sensor, which will be higher performing, lower-cost, and smaller than earlier generations, and will have a reusable Bluetooth transmitter.
Medical Technologies Innovation Asia (MTIA) Partnership Update:
MTIA is in the process of finalizing its new manufacturing assets in China for Echo's full product line and internal testing in support of a CFDA clinical trial is ongoing. CFDA file submission will follow completion of the CFDA clinical trial. As previously announced, after consultations with the Chinese government, MTIA believes that Echo's locally produced needle-free CGM products will be designated as a Class 2 medical device. Class 2 medical devices have a CFDA review period of 90 working days after filing submission. A formal and final designation from the CFDA is determined only at the time of submission.
"Our development team continues to advance the development of the improved key components of our technology, including the completion of the API milestone to foster and leverage external innovative apps that utilize data from our CGM," said Scott W. Hollander, Echo's President and CEO. "Recent funding by our lead investors, Platinum Partners, MTIA and their affiliates, demonstrates their confidence in Echo's strategy and product potential. While our current cash position has no effect on MTIA's progress in China, we expect to secure additional capital to fund the product development finalization and clinical validation necessary for domestic commercialization of our CGM technology."
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) 549-0128
SOURCE Echo Therapeutics, Inc.