Echo Therapeutics, Inc. Announces First Quarter 2015 Financial Results

May 15, 2015, 15:52 ET from Echo Therapeutics, Inc.

ISELIN, N.J., May 15, 2015 /PRNewswire/ -- Echo Therapeutics, Inc. (NASDAQ: ECTE), a medical device company focused on non-invasive continuous glucose monitoring and associated technologies, today announced its financial results for the quarter ended March 31, 2015.  Echo's Quarterly Report on Form 10-K, as filed with the SEC, is available by visiting the Investors section of Echo's website at www.echotx.com.

First Quarter 2015 Financial Results

For the quarter ended March 31, 2015, the Company was principally involved with the product development of its continuous glucose monitoring system. Echo's net loss for the first quarter of 2015 was $8.3 million, or ($0.72) per share, compared to $2.8 million, or ($0.23) per share, for the same period in 2014. The $5.5 million dollar increase in net loss was a result of a non-cash financing charge in the first quarter for the approximate same amount. The finance charge was based on the price of our common stock, or the anticipated price of our common stock in subsequent periods when funding is expected to occur, being higher than the original deal price of $1.50 per common share on the dates of funding. The charge consisted of two parts, a charge for financing that occurred in the first quarter, and a charge for funding committed to, but not yet funded. Such anticipated funding was priced based on our $2.13 per share close price for our Common Stock on March 31, 2015. There is also the potential that a certain portion of this charge will reverse in the second quarter should the deal be funded at an amount at, or lower, than the original $1.50 deal price. The operating loss for the first quarter of 2015 was $2.5 million compared to $2.7 million for the first quarter of 2014. Research and development expenses were $0.8 million for the first quarter of 2015 compared to $1.3 million for the first quarter of 2014. The decrease in research and development expenses was primarily related to the need to rehire key employees in January 2015 and the customary start-up time. Selling, general and administrative expenses were $1.5 million during the first quarter of 2015 compared to $1.3 million during the first quarter of 2014. The increase in selling, general and administrative expenses was primarily due to a non-cash reimbursement of legal expenditures from the 2014 proxy battle. Echo reported a cash balance of approximately $0.5 million as of March 31, 2015. $0.5 million was received in April 2015, and additional funding of $1.0 million is expected in the second quarter, in connection with the December 2014 installment financing. 

Recent Corporate Highlights:

  • In April 2015, Echo's strategic partner, Medical Technologies Innovation Asia (MTIA), Ltd., Hong Kong, held a meeting with the Medical Device Evaluation Center of the China Food and Drug Administration (CFDA), Bejing Branch to define its strategy and clinical pathway for CFDA regulatory approval of Echo's CGM system. MTIA expects to commence the CFDA clinical trial and safety testing in the second half of 2015 following completion of product manufacturing and internal testing. Clinical sites for the approximately 120-patient trial have been identified and secured. Echo and MTIA are in the process of finalizing manufacturing assets in China in support of the clinical trial and commercialization.
  • In March 2015, Echo achieved its wireless mobile communication milestone, making it possible for its continuous glucose sensor to transmit data to any mobile platform. At the Marcum MicroCap Conference on May 28, 2015, management plans to provide a live demonstration of the mobile application that displays glucose data from Echo's glucose sensor via Bluetooth LE (BLE).
  • In January 2015, Echo moved its corporate headquarters to a 2,800 square foot office space in Iselin, New Jersey from its 7,900 square foot office in Philadelphia, Pennsylvania. In May 2015, Echo signed a lease for approximately 10,000 square feet for a research and development facility in Littleton, Massachusetts. The Company expects to move to the new facility from its 37,000 square foot facility in Franklin, Massachusetts on or about July 1, 2015.

"We continue to focus our efforts and resources on our product and business development objectives, in addition to supporting our strategic partner MTIA in China, to bring our innovative technology to market. We have made substantial progress this year and we are on target to continue to achieve our strategic milestones in the near-term," said Scott W. Hollander, Echo's President and CEO. "Importantly, we have implemented a number of cost reduction measures, including moving our offices to right-sized and less expensive facilities, that don't diminish our ability to execute on these short-term and long-term development objectives. Our new research and development facility in Littleton, Massachusetts will ensure sufficient capacity to meet our current and future needs."

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 fitness, weight loss and personal lifestyle wearable-health space. A longer-term opportunity also exists in the outpatient diabetes and 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                                                                      

Connect With Us: - Visit our website at www.echotx.com  - Follow us on Twitter at www.twitter.com/echotx  - Join us on Facebook at www.facebook.com/echotx

 

Echo Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

  March 31,

2015

December 31, 2014

ASSETS

Current Assets:

Cash and cash equivalents

$        469,493

$     1,278,941

Prepaid and other

447,386

490,824

Total current assets

916,879

1,769,765

Property and equipment, net

930,570

1,138,593

Other Assets:

Intangible assets, net

9,625,000

9,625,000

Other

129,705

62,478

Total other assets

9,754,705

9,687,478

Total assets

$    11,602,154

$    12,595,836

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$      1,368,775

$      1,801,469

Accrued and other

365,282

968,392

Premium financing payable

212,829

-

Derivative warrant liability

3,309,000

208,155

Total current liabilities

5,255,886

2,978,016

Deferred revenue, net

95,535

95,535

Total liabilities

5,351,421

3,073,551

Commitments and Contingencies

Stockholders' Equity:

Convertible preferred stock, Series C, D, E & F

63,048

35,899

Common stock

111,281

126,295

Additional paid-in capital

142,312,182

137,292,157

Accumulated deficit

(136,235,778)

(127,932,066)

Total stockholders' equity

6,250,733

9,522,285

Total liabilities and stockholders' equity

$    11,602,154

$    12,595,836

Condensed Consolidated Statements of Operations

(Unaudited)

Three Months Ended

March 31,

2015

2014

Licensing revenue

$                     -

$           19,107

Total revenues

-

19,107

Operating Expenses:

Research and development

831,333

1,266,202

Selling, general and administrative

1,482,265

1,323,162

Loss on disposal of property and equipment

108,840

-

Depreciation and amortization

86,704

99,900

Total operating expenses

2,509,142

2,689,264

Loss from operations

(2,509,142)

(2,670,157)

Other Income (Expense):

Gain (loss) on revaluation of derivative warrant liability

(257,845)

140,000

Financing expense

(5,534,000)

-

Interest expense

(2,725)

(242,884)

Other expense, net

(5,794,570)

(102,884)

Net loss

$     (8,303,712)

$     (2,773,041)

Net loss per common share, basic and diluted

$              (0.72)

$              (0.23)

Basic and diluted weighted average common shares outstanding

11,548,590

11,858,894

 

SOURCE Echo Therapeutics, Inc.



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