Echo Therapeutics Announces Third Quarter 2014 Financial Results

PHILADELPHIA, Nov. 19, 2014 /PRNewswire/ -- Echo Therapeutics, Inc. (NASDAQ: ECTE), a medical device company, today announced its financial results for the quarter ended September 30, 2014.  Echo's Quarterly Report on Form 10-Q, when filed with the SEC, will be available by visiting the Investors section of Echo's website at www.echotx.com.

Recent Financial Corporate Updates

• On August 14, 2014, the Company announced that it had taken steps to substantially reduce operating costs and preserve cash.  The Company implemented significant cost reductions across all aspects of its operations in both external spend and workforce, including reductions in general and administrative, manufacturing, clinical and product development expenditures.
• On September 23, 2014, Echo announced that it had suspended its product development, research, manufacturing and clinical programs and operations to conserve liquidity and capital resources.  The workforce reduction due to the suspension of operations comprised approximately 70% of Echo's workforce.
• On October 2, 2014, Echo retained PricewaterhouseCoopers LLP's Restructuring and Recovery Services Practice to assist the Company in exploring financial and strategic alternatives that could sufficiently address its liquidity needs and allow it to resume operations.  Such financial and strategic alternatives could include, but are not limited to, a sale or license of intellectual property and other assets, a merger, other business combination, a capital transaction and/or a voluntary petition for reorganization or liquidation pursuant to the U.S. Bankruptcy Code.
• On October 28, 2014, the Company sent a letter to Platinum Montaur Life Sciences, LLC ("Montaur") to notify Montaur that the Company was irrevocably cancelling and terminating the credit facility between Montaur  and the Company effective as of October 30, 2014.  The Company issued to Montaur a Promissory Note dated August 31, 2012, with a maturity date of five years from the date of closing.  On March 1, 2013, the Company elected to prepay all outstanding draws under the Montaur credit facility.  After such date, no principal amount was outstanding under the credit facility. 

Summary of Third Quarter 2014 Financial Results

• Echo's net loss for the third quarter of 2014 was $5.5 million, or $0.43 per share as compared to $5.2 million, or $0.49 per share, for the third quarter of 2013. The net loss calculation includes the third quarter of 2014's non-cash amortization of deferred financing costs related to the write-off of the Montaur credit facility for $3.1 million, as compared to the total interest expense for the third quarter of 2013 for $241,000.
• The operating loss for the third quarter of 2014 was $2.9 million compared to $4.9 million for the third quarter of 2013, a reduction of $2.0 million or 41%. 
• Research and development expenses were $1.2 million, a decrease of $1.6 million or 56% for the third quarter of 2014 as compared to $2.8 million for the third quarter of 2013.  This decrease was primarily related to reductions in engineering and design expenses.
• Due primarily to successful cost reduction measures, general and administrative expenses were $1.7 million, a decrease of $0.5 million or 21%, in the third quarter of 2014 as compared to $2.2 million for the third quarter of 2013.  
• Echo reported a cash balance of approximately $1.5 million as of September 30, 2014.

About Echo Therapeutics

Echo Therapeutics was developing its Symphony^® CGM System as a non-invasive, wireless, continuous glucose monitoring system for use initially in the critical care setting.  A significant longer-term opportunity may also exist for Symphony to be used in the hospital beyond the critical care setting, as well as in the outpatient setting. Echo also developed its needle-free skin preparation device as a platform technology that allowed for enhanced skin permeation enabling extraction of analytes, such as glucose, and enhanced delivery of topical pharmaceuticals.

Cautionary Statement Regarding Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the current expectation and beliefs of Echo's management about the business of Echo, including, but not limited to, expectations regarding Echo's liquidity needs, Echo's ability to continue to fund its operations, Echo's ability to identify strategies to address its liquidity needs, Echo's ability to address its liquidity needs with additional third-party funding and the possibility that Echo may be forced to seek protection under the U.S. Bankruptcy Code. These forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those expressed or implied by such forward-looking statements. Those risks and uncertainties include, but are not limited to, risks related to the actions of Platinum Management (NY) LLC, its affiliates and the other members of its group, including, but not limited to, the lawsuits filed or threatened by the Platinum Group and the actions taken by the Platinum Group to harm Echo's prospects and interfere with Echo's relationships with its vendors and employees, including the amount of related costs and the disruption caused to business and financing activities by these actions, the potential inability of Echo to secure additional funding for its operations, the possibility that Echo may be forced to seek protection under the U.S. Bankruptcy Code, the adverse impact of any such bankruptcy filing by Echo on its business, financial condition and results of operations, including its ability to maintain relationships with vendors and employees, the actions of Echo's creditors and other third parties with interests in any bankruptcy case filed by Echo, and Echo's ability to obtain bankruptcy court approval in connection with any bankruptcy case filed by Echo. Other risks and uncertainties that may cause actual events to differ materially from the statements we have made herein are identified and described in more detail in Echo's filings with the SEC, including, without limitation, its Annual Report on Form 10-K for the year ended December 31, 2013, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The forward-looking statements in this Press Release are made as of the date hereof. Notwithstanding changes that may occur with respect to matters relating to any forward looking statements, Echo does not expect to, and disclaims any obligation to, publicly update, amend or clarify any forward-looking statements whether as a result of new information, future events or otherwise. Echo, however, reserves the right to update such statements or any portion thereof at any time for any reason. 

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SOURCE Echo Therapeutics, Inc.

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