|
[ ] Confidential, for Use of the Commission Only (as permitted by
|
|
Rule 14a-6(e)(2))
|
|
(3) Per unit price or other underlying value of transaction computed pursuant to
|
|
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
|
|
calculated and state how it is determined):
|
|
[
|
] Check box if any part of the fee is offset as provided by Exchange Act
|
|
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
|
|
1.
|
To elect two Class III directors, including Platinum’s director nominee, Shepard M. Goldberg, to the Board;
|
|
2.
|
To approve, on an advisory basis, the Company’s named executive officer compensation;
|
|
3.
|
To ratify the appointment of Wolf & Company, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014; and
|
|
4.
|
To transact such other business, if any, as may properly come before the Annual Meeting or any adjournments thereof.
|
Your Vote Is Important, No Matter How Many Or How Few Shares You Own
If you have any questions, require assistance in voting your GOLD proxy card, or need additional copies of our proxy materials, please contact
Morrow & Co. at the phone numbers or the email address listed below.
Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
Stockholders call toll free: (800) 662-5200
Banks and brokers call: (203) 658-9400
|
|
1.
|
To elect two Class III directors, including Platinum’s director nominee, Shepard M. Goldberg (our “Nominee”), to the Company’s Board of Directors (the “Board”);
|
|
2.
|
To approve, on an advisory basis, the Company’s named executive officer compensation;
|
|
3.
|
To ratify the appointment of Wolf & Company, P.C. as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2014; and
|
|
4.
|
To transact such other business, if any, as may properly come before the meeting or any adjournments thereof.
|
If you have any questions, require assistance in voting your GOLD proxy card, or need additional copies of our proxy materials, please contact
Morrow & Co. at the phone numbers or the email address listed below.
Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
Stockholders call toll free: (800) 662-5200
Banks and brokers call: (203) 658-9400
|
|
·
|
Platinum made its first investment in the Company in 2007.
|
|
·
|
On August 31, 2012, the Company and Platinum-Montaur Life Sciences, LLC, a subsidiary of PPVA (“Platinum-Montaur”), entered into a Loan Agreement (the “Loan Agreement”) pursuant to which Platinum-Montaur made a non-revolving draw credit facility (the “Credit Facility”) available to the Company in an initial aggregate principal amount of $5,000,000 (the “Maximum Draw Amount”). Contemporaneously with the execution of the Loan Agreement, the Company delivered to Platinum-Montaur a Promissory Note dated August 31, 2012 (the “Note”), with a maturity date of five years from the date of closing (the “Maturity Date”). The Company’s subsidiary, then known as Sontra Medical, Inc. (“Sontra”), agreed to guarantee the obligations of the Company under the Note pursuant to a guaranty agreement entered into on August 31, 2012 (the “Guaranty”). Additionally, the Note was secured by the Pledged Revenue (as defined in the Loan Agreement) of the Company and the Company’s subsidiaries pursuant to a Security Agreement dated as of August 31, 2012 by and among the Company, Sontra and Platinum-Montaur. Pursuant to the Loan Agreement, the Company issued Platinum-Montaur a warrant to purchase 4,000,000 shares of its Common Stock with an exercise price of $2.00 per share and a term of five years (the “Commitment Warrant”). In addition, for each $1,000,000 of funds borrowed pursuant to the Credit Facility, the Company agreed to issue to Platinum-Montaur a warrant to purchase 1,000,000 shares of Common Stock, with a term of five years and an exercise price equal to 150% of the market price of the Common Stock at the time of the draw, but in no event less than $2.00 or more than $4.00 per share (together with the Commitment Warrant, the “Warrants”). All of the Warrants are immediately exercisable and have a term of five years from the issue date. The exercise price of the Warrants is subject to adjustment for stock splits, combinations or similar events. An exercise under the Warrants may not result in the holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at the time; provided, however, that a holder may waive the 4.99% ownership limitation upon sixty-one (61) days’ advance written notice to the Company. |
|
·
|
On September 14, 2012, the Company submitted a draw request to Platinum-Montaur in the amount of $3,000,000 in the form required by the Loan Agreement (the “September Request”). The Company ultimately received the $3,000,000 of draws in the following increments: $1,000,000 on September 20, 2012, $500,000 on October 17, 2012, and $1,500,000 on November 6, 2012. In accordance with the Loan Agreement and as a result of funding received from Platinum-Montaur, the Company issued to Platinum-Montaur separate warrants concurrent with the three draws above to purchase 1,000,000, 500,000 and 1,500,000 shares of Common Stock each with a term of five years, and exercise prices of $2.13, $2.27 and $2.11 per share, respectively.
|
|
·
|
On March 1, 2013, the Company elected to prepay all outstanding draws under the Platinum-Montaur Credit Facility totaling $3,113,366, which included interest accrued and unpaid to that date of $113,366. No principal amount is currently outstanding under the Credit Facility.
|
|
·
|
On June 17, 2013, we contacted the Corporate Secretary of the Company in order to set up a call to speak with members of the Board to discuss the Company’s performance and the Board’s and management’s strategic plans.
|
|
·
|
On June 26, 2013, we had a meeting with representatives of the Company including, Patrick T. Mooney, M.D., the former Chairman and Chief Executive Officer of the Company, to discuss the Company’s performance and the Board’s and management’s strategic plans.
|
|
·
|
On June 30, 2013 we delivered a letter to the Company expressing our disappointment in the Company’s unwillingness to allow us, as the Company's largest stockholder, to communicate directly with the independent members of the Board.
|
|
·
|
On August 6, 2013, we received a letter from the Company soliciting a term-sheet from Platinum regarding a potential investment in the Company.
|
|
·
|
On August 15, 2013, we responded to the Company's solicitation by delivering a letter to the Company suggesting that the Company consider a deal with a potential Chinese development partner and other actions we believed were advisable for the Company to unlock stockholder value.
|
|
·
|
On August 30, 2013, Platinum-Montaur delivered a letter to the Board outlining Platinum-Montaur’s opinion regarding certain actions taken by the Company and the rationale for such opinions. In the letter Platinum-Montaur presented certain steps the Company might take to unlock value for stockholders.
|
|
·
|
On September 4, 2013, we received a letter from the Company rejecting our suggestions.
|
|
·
|
On November 20, 2013, we reached out to the Company to set up a call to discuss a potential Chinese development partner and an investment in the Company by Platinum.
|
|
·
|
On November 25, 2013, we delivered a confidential term sheet to the Company proposing, among other things, (i) a $10 million simultaneous investment in the Company by Platinum and Medical Technologies Innovation Asia, Ltd. (“MTI”) at a price per share of $2.40, a premium to the closing price of the Common Stock in the period leading up to our offer, and (ii) a partnership between the Company and MTI.
|
|
·
|
On November 26, 2013, we had a call with members of the Board and the Company’s outside legal counsel to further discuss our ideas. Additional negotiations ensued. Following our November 26 call, we continued to negotiate a potential transaction with the Company.
|
|
·
|
On November 28, 2013, we received word that the Company had rejected our proposal because our proposed investment price of $2.40 per share, despite being a premium to the closing price of the Common Stock in the period leading up to our offer, was not to the Board's liking.
|
|
·
|
Between November 28, 2013 and December 10, 2013, we continued to negotiate a potential transaction with the Company and its representatives. During negotiations, the Company made it clear that it was not interested in having Dr. Goldberg join the Board.
|
|
·
|
On December 10, 2013, PPVA and PPLO (each a “Holder” and, together, the “Holders”) entered into a Securities Purchase Agreement (the “SPA”) with the Issuer. Pursuant to the terms of the SPA, PPVA and PPLO acquired from the Company an aggregate of 69,569 shares of Common Stock and 1,748,613 shares of Series E Preferred Stock of the Company (the “Series E Preferred Stock”) convertible into 1,748,613 shares of Common Stock for a purchase price of $2.75 per share. In addition, PPVA and PPLO acquired five year warrants to purchase up to 181,818 shares of Common Stock at an exercise price equal to $2.75 per share (the “Warrants”). The Warrants and Series E Preferred Stock each contain restrictions on exercise and conversion, respectively, such that a Holder may not exercise or convert, as the case may be, the Warrants or Series E Preferred Stock if the number of shares of Common Stock to be issued pursuant to such exercise or conversion would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules thereunder (“Section 13(d)”)) in excess of 19.99% of all of the Common Stock outstanding at such time (the “19.99% Blocker”). The Warrants and Series E Preferred Stock each also contain restrictions on exercise and conversion, respectively, such that a Holder may not exercise or convert, as the case may be, the Warrants or Series E Preferred Stock if the number of shares of Common Stock to be issued pursuant to such exercise or conversion would result in the Holder beneficially owning (as determined in accordance with Section 13(d)) in excess of 9.99% of all of the Common Stock outstanding at such time (the “9.99% Blocker”). The 9.99% Blocker may be waived upon the Holder providing the Issuer with 61 days’ notice that such Holder would like to waive the 9.99% Blocker and does not require stockholder approval. As of the date hereof, neither PPVA nor PPLO has requested waiver of the 19.99% Blocker or 9.99% Blocker with respect to the Series E Preferred Stock or Warrants, although they retain the right to do so at a future date. Pursuant to the terms of the SPA, the Company agreed to appoint an individual identified by the Holders (the “Investor Designee”) to the Board immediately upon approval of the Investor Designee by the Board pursuant to the terms specified in the SPA. The Company further agreed to nominate and solicit for the election of the Investor Designee at the Annual Meeting in the same manner as the other individuals up for election at the Annual Meeting. The Company also agreed not to enter into any equity or debt financing (except as contemplated under the SPA) or agreement relating to business development until the later of: (i) the date 45 days following December 10, 2013, and (ii) the date of the election of the Investor Designee to the Board. The Company further agreed to, no later than five business days following December 10, 2013, promptly withdrawal the Registration Statement on Form S-1 that was filed by the Issuer with the Securities and Exchange Commission on December 2, 2013. Additionally, as long as the Holders and their affiliates hold at least 10% of the outstanding Common Stock, they have a right, subject to certain conditions, to purchase debt or equity securities of any kind that the Company may determine to issue in the future. |
|
·
|
On December 12 , 2013, Platinum submitted Shepard M. Goldberg as Platinum’s Investor Designee.
|
|
·
|
On December 16, 2013, the Company reached out to Mr. Goldberg regarding his submission as Platinum’s Investor Designee.
|
|
·
|
On December 18, 2013, the Company contacted Mr. Goldberg to claim that it would not meet with him to discuss his appointment to the Board as Platinum's Investor Designee until January 3, 2014.
|
|
·
|
On January 8, 2014 and January 13, 2014, despite the Company’s commitment under the SPA to evaluate any proposed investor designee within three weeks of receiving notice of Platinum's Investor Designee, members of the Board finally met with Mr. Goldberg to discuss his appointment as Platinum’s Investor Designee.
|
|
·
|
On January 17, 2014, over a month after Platinum submitted Mr. Groldberg as its Investor Designee, William Grieco informed Mr. Goldberg that the Board still had not yet met to discuss his qualifications.
|
|
·
|
On or about January 20, 2014, the Board informed Mr. Goldberg that it needed additional information from him regarding his appointment to the Board.
|
|
·
|
On January 31, 2014, in order to enforce their rights under the SPA, PPVA and PPLO filed a verified complaint (the “Complaint”) with the Court of Chancery of the State of Delaware (the “Court of Chancery”) against the Company and the members of the Board (collectively, the “Defendants”) as a result of the Company’s extended and continuing failure to elect Platinum’s nominee to the Board in accordance with Section 5.2 of the SPA.
|
|
·
|
On January 31, 2014, more than six weeks after receiving notification of his appointment as Platinum’s Investor Designee, the Company finally informed Platinum of the Board's belief that Mr. Goldberg allegedly did not meet the Company’s Board Nomination Policy and that it would not be appointing Mr. Goldberg as the Investor Designee. We believed the Company's rejection of Mr. Goldberg to be unjustified.
|
|
·
|
On February 4, 2014, PPVA delivered to the Company a letter demanding, pursuant to Section 220 of the Delaware General Corporation Law, inspection of certain of the Company’s books and records (the "220 Demand") .
|
|
·
|
On February 7, 2014, the Court of Chancery set trial for April 16 and 17 on the allegations in the Complaint.
|
|
·
|
On February 14, 2014, the Defendants filed an answer and affirmative defenses to the allegations in the Complaint.
|
|
·
|
On February 27, 2014, in exchange for the appointment of Michael M. Goldberg M.D. to the Board as Platinum’s Investor Designee, PPVA and PPLO agreed to dismissed the Complaint and withdraw the 220 Demand. Dr. Goldberg currently serves as a member of the Board and is one of the individuals the Company is endorsing for election to the Board at the Annual Meeting.
|
|
·
|
On April 3, 2014, Platinum nominated Shepard M. Goldberg for election to the Board.
|
|
·
|
Poor Stock Price Performance and Significant Value Destruction;
|
|
·
|
Questionable Strategic Decisions By The Board And Management;
|
|
·
|
Poor Operating Performance; and
|
|
·
|
Lack of Alignment .
|
Cumulative Total Return (assuming reinvestment of dividends)
|
|||
For the Period ended December 10, 20131
|
|||
One Year (%)
|
Three Year (%)
|
Five Year (%)
|
|
Echo Therapeutics, Inc.
|
-(70.64)
|
-(73.84)
|
-(26.75)
|
The NASDAQ Stock Market Index
|
35.94
|
53.95
|
159.38
|
Director
|
Total
|
Shares Underlying Derivative Securities 2
|
Shares Held Outright
|
Robert F. Doman
|
6,200
|
1,500
|
4,700
|
Vincent D. Enright
|
53,700
|
25,500
|
28,200
|
James F. Smith
|
38,400
|
15,500
|
22,900
|
William F. Grieco
|
53,700
|
15,500
|
38,200
|
Total:
|
152,000
|
58,000
|
94,000
|
Ownership Percentage
|
1.26%
|
0.48%
|
0.79%
|
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the compensation tables and narrative discussion [in the Company’s proxy statement], is hereby APPROVED.”
|
Amount of Common Stock
Purchased/(Sold)
|
Date of
Purchase/Sale
|
Platinum Partners Value Arbitrage Fund L.P.
|
|
100
|
09/12/12
|
150
|
09/12/12
|
3,171
|
09/14/12
|
200
|
09/17/12
|
16,802
|
09/18/12
|
200
|
09/19/12
|
13,504
|
09/21/12
|
5,500
|
10/25/12
|
35,855
|
10/26/12
|
92,100
|
10/31/12
|
4,286
|
11/02/12
|
61
|
11/05/12
|
44,922
|
11/06/12
|
34,495
|
11/07/12
|
50,800
|
11/08/12
|
100
|
11/09/12
|
4,668
|
11/13/12
|
2,352
|
11/14/12
|
19,753
|
11/15/12
|
9,871
|
11/16/12
|
18,393
|
11/19/12
|
12,270
|
11/20/12
|
7,067
|
11/21/12
|
6,800
|
11/23/12
|
25,557
|
11/26/12
|
95,659
|
11/27/12
|
100,100
|
11/28/12
|
20,000
|
11/30/12
|
49,096
|
12/04/12
|
525,000
|
12/21/12
|
200
|
02/25/13
|
25,023
|
02/26/13
|
(6,800)
|
03/11/13
|
(10,000)
|
03/11/13
|
(2,181)
|
03/11/13
|
(17)
|
03/12/13
|
(419)
|
03/11/13
|
(10,000)
|
03/11/13
|
(16,600)
|
06/09/13
|
(350)
|
06/10/13
|
(423)
|
06/10/13
|
(1,965)
|
06/10/13
|
(6,167)
|
06/10/13
|
(1,650)
|
06/10/13
|
(720)
|
06/10/13
|
(1,150)
|
06/10/13
|
(2,000)
|
06/10/13
|
(355)
|
06/10/13
|
(865)
|
06/10/13
|
(1,000)
|
06/10/13
|
(1,227)
|
06/10/13
|
(707)
|
06/10/13
|
(680)
|
06/10/13
|
(2,556)
|
06/10/13
|
(3,766)
|
06/10/13
|
(15)
|
06/10/13
|
(10)
|
06/10/13
|
(317)
|
06/10/13
|
(20)
|
06/10/13
|
(1,680)
|
06/10/13
|
(20)
|
06/10/13
|
(1,350)
|
06/10/13
|
(550)
|
06/10/13
|
(3,586)
|
06/10/13
|
(9,210)
|
06/10/13
|
(429)
|
06/10/13
|
(560)
|
06/10/13
|
(1,000)
|
06/10/13
|
(100)
|
06/10/13
|
(1,000)
|
06/10/13
|
(582)
|
06/10/13
|
(28,878)
|
06/10/13
|
(7,012)
|
06/10/13
|
(350)
|
06/10/13
|
(1,000)
|
06/10/13
|
(599)
|
06/10/13
|
(250)
|
06/10/13
|
(276)
|
06/10/13
|
(6)
|
06/10/13
|
(4,492)
|
06/10/13
|
(3,450)
|
06/10/13
|
(5,080)
|
06/10/13
|
(10)
|
06/10/13
|
(467)
|
06/10/13
|
(235)
|
06/10/13
|
(1,975)
|
06/10/13
|
(987)
|
06/10/13
|
(1,839)
|
06/10/13
|
(1,800)
|
06/10/13
|
(1,000)
|
06/10/13
|
(470)
|
06/10/13
|
(1,000)
|
06/10/13
|
(2,500)
|
06/10/13
|
(1,100)
|
06/10/13
|
(1,400)
|
06/10/13
|
(1,170)
|
06/10/13
|
(610)
|
06/10/13
|
(5,000)
|
06/10/13
|
(585)
|
06/10/13
|
(1,950)
|
06/11/13
|
(3,850)
|
06/13/13
|
(10,010)
|
06/13/13
|
(2,000)
|
06/13/13
|
(4,910)
|
06/13/13
|
(52,500)
|
06/13/13
|
(20)
|
06/13/13
|
(2,502)
|
06/13/13
|
138,750
|
06/14/13
|
200,000
|
06/14/13
|
76,100
|
06/19/13
|
37,000
|
06/20/13
|
(100)
|
07/11/13
|
Platinum Partners Liquid Opportunity Master Fund L.P.
|
|
400,000
|
06/14/13
|
50,238
|
06/17/13
|
1,200
|
06/18/13
|
76,100
|
06/19/13
|
37,000
|
06/20/13
|
* On June 7, 2013, the Company effected a 1-for-10 reverse stock split of the Common Stock. All transactions prior to June 7, 2013 reflect pre-split values.
|
|
|
Amount and Nature of Beneficial Ownership of Common Stock as of April 3, 2014
|
|
|||||
Name and Address of Beneficial Owner
|
|
Number of Shares (2)
|
|
|
Percentage of Class
|
|
||
|
|
|
|
|
|
|
||
Platinum Partners Liquid Opportunity Master Fund L.P.
c/o Platinum Management (NY) LLC
152 West 57th Street, 4th Floor
New York, NY 10019
|
|
|
778,452
|
(3)
|
|
|
6.1
|
%
|
Platinum Partners Value Arbitrage Fund L.P.
c/o Platinum Management (NY) LLC
152 West 57th Street, 4th Floor
New York, NY 10019
|
|
|
1,605,424
|
(4)
|
|
|
11.8
|
%
|
Platinum Management (NY) LLC
|
|
|
1,605,424
|
(5)
|
|
|
11.8
|
%
|
Platinum Liquid Opportunity Management (NY) LLC
|
|
|
778,452
|
(6)
|
|
|
6.1
|
%
|
Mark Nordlict
|
|
|
2,383,876
|
(7)
|
|
|
19.9
|
%
|
Uri Landesman
|
|
|
2,383,876
|
(8)
|
|
|
19.9
|
%
|
Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
Kimberly A. Burke.
|
|
|
47,000
|
(9)
|
|
|
*
|
|
Robert F. Doman
|
|
|
6,200
|
(10)
|
|
|
*
|
|
Vincent D. Enright
|
|
|
53,700
|
(11)
|
|
|
*
|
|
Michael M. Goldberg, M.D.
|
|
|
28,500
|
(12)
|
|
|
*
|
|
William F. Grieco
|
|
|
53,700
|
(13)
|
|
|
*
|
|
Patrick T. Mooney, M.D.
|
|
|
11,250
|
(14)
|
|
|
*
|
|
Christopher P. Schnittker
|
|
|
27,500
|
(15)
|
|
|
*
|
|
James F. Smith
|
|
|
38,400
|
(16)
|
|
|
*
|
|
All directors and executive officers as a group (7 persons)
|
|
|
255,000
|
|
|
|
2.1
|
%
|
(1)
|
Unless otherwise noted, the address for each stockholder known to us to beneficially own more than 5% of the outstanding shares of our Common Stock is 152 West 57th Street, 4th Floor, New York, NY 10019. The address for each director and executive officer is c/o Echo Therapeutics, Inc., 8 Penn Center, 1628 JFK Blvd., Suite 300, Philadelphia, PA 19103.
|
(2)
|
The individuals named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them, except as noted in the footnotes below. The entities named in the table, together with Mr. Nordlict and Mr. Landesman, have shared voting and investment power with respect to all shares shown as beneficially owned by them, as further described in the footnotes below.
|
(3)
|
Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. As of the close of business on April 7, 2014, Platinum Partners Liquid Opportunity Master Fund L.P. (“PPLO”) directly owned (i) 578,452 shares of Common Stock, (ii) beneficially owned 100,000 shares of Common Stock underlying currently convertible Series C Preferred Stock, (iii) beneficially owned 100,000 shares of Common Stock underlying currently convertible Series D Preferred Stock, (iv) directly owned 349,723 shares of Series E Preferred Stock (“Series E Stock”), and (v) directly owned 36,363 Warrants. The Warrants provide that at no time may a holder of any of the Warrants exercise such warrants if the number of shares of Common Stock to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number of shares of Common Stock which would result in such holder beneficially owning more than 4.99% or 9.99%, as applicable, of all of the Common Stock outstanding at such time (the “9.99% Blocker”); provided, however, that upon a holder of any of the warrants providing the issuer with sixty one (61) days' notice that such holder would like to waive either or both such restrictions with regard to any or all shares of Common Stock issuable upon exercise of any of the Warrants, then such restriction shall be of no force or effect with regard to those Warrants referenced in such notice. The Series E Stock provides that at no time may a holder of any of the Series E Stock convert such stock if the number of shares of Common Stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number of shares of Common Stock which would result in such holder beneficially owning more than 9.99% or 19.99%, as applicable, of all of the Common Stock outstanding at such time (the “19.99% Blocker”); provided, however, that upon both (A) a holder of Series E Stock providing Echo with a Waiver Notice that such holder would like to waive either or both such restrictions with regard to any or all shares of Common Stock issuable upon conversion of Series E Stock, and (B) the stockholders of Echo approving the waiver of such restrictions with regard to any or all shares of Common Stock issuable upon conversion of Series E Stock and the ownership by any holder of the Series E Stock of greater than 20% of the outstanding shares of Common Stock in accordance with the applicable NASDAQ listing standards, the applicable restrictions shall be of no force or effect. As of the date hereof, PPLO had not requested waiver of the 19.99% Blocker or 9.99% Blocker with respect to the Series E Stock or Warrants, respectively. |
(4)
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Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. As of the close of business on April 7, 2014, Platinum Partners Value Arbitrage Fund L.P. (“PPVA”) directly owned (i) 1,605,424 shares of Common Stock and (ii) 1,398,890 shares of Series E Stock, and (iii) 145,454 Warrants. The Series E Stock and the Warrants are currently subject to the 19.99% Blocker and 9.99% Blocker, respectively. As of the date hereof, PPVA had not requested waiver of the 19.99% Blocker or 9.99% Blocker with respect to the Series E Stock or Warrants, respectively.
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(5)
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Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. Platinum Management (NY) LLC (“Platinum Management”), as the Investment Manager of PPVA, may be deemed to beneficially own the securities directly owned by PPVA.
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(6)
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Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. Platinum Liquid Opportunity Management (NY) LLC (“Platinum Liquid Management”), as the Investment Manager of PPLO, may be deemed to beneficially own the securities directly owned by PPLO. Includes 100,000 shares of Common Stock underlying currently convertible Series C Preferred Stock and 100,000 shares of Common Stock underlying currently convertible Series D Preferred Stock.
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(7)
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Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. Mr. Nordlicht, as the Chief Investment Officer of Platinum Management, the Investment Manager of PPVA, and Chief Investment Manager of Platinum Liquid Management, the Investment Manager of PPLO, may be deemed to beneficially own the securities directly owned by PPVA and PPLO, respectively. Includes 100,000 shares of Common Stock underlying currently convertible Series C Preferred Stock and 100,000 shares of Common Stock underlying currently convertible Series D Preferred Stock.
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(8)
|
Based on information provided in a Schedule 13D/A filed with the SEC on April 8, 2014. Mr. Landesman, as the President of Platinum Management, the Investment Manager of PPVA, and the President of Platinum Liquid Management, the Investment Manager of PPLO, may be deemed to beneficially own the securities directly owned by PPVA and PPLO, respectively. Includes 100,000 shares of Common Stock underlying currently convertible Series C Preferred Stock and 100,000 shares of Common Stock underlying currently convertible Series D Preferred Stock.
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(9)
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Includes 14,500 shares that may be acquired by Ms. Burke within 60 days upon the exercise of stock options.
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(10)
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Includes 1,500 shares that may be acquired by Mr. Doman within 60 day upon the exercise of stock options .
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(11)
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Includes 25,500 shares that may be acquired by Mr. Enright within 60 days upon the exercise of stock options.
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(12)
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Includes 14,000 shares that may be acquired by Dr. Goldberg within 60 days upon the exercise of stock options.
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(13)
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Includes 15,500 shares that may be acquired by Mr. Grieco within 60 days upon the exercise of stock options.
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(14)
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Based on shares held by Dr. Mooney as of September 27, 2013, his last day of employment with Echo .
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(15)
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Includes 15,000 shares that may be acquired by Mr. Schnittker within 60 days upon the exercise of stock options
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(16)
|
Includes 15,500 shares that may be acquired by Mr. Smith within 60 days upon the exercise of stock options.
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1.Election of Directors to be Chosen by the Holders of Common Stock:
|
|||||
Nominees:
|
For Nominee
|
Withhold
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For all
Except
|
||
(01) Shepard M. Goldberg
|
[ ]
|
[ ]
|
[ ]
|
||
NOTE:
PLATINUM INTENDS TO USE THIS PROXY TO VOTE (I) “FOR” SHEPARD M. GOLDBERG AND (II) “FOR” THE CANDIDATE WHO HAS BEEN NOMINATED BY THE COMPANY TO SERVE AS A DIRECTOR, OTHER THAN ROBERT F. DOMAN, FOR WHOM PLATINUM IS NOT SEEKING AUTHORITY TO VOTE FOR AND WILL NOT EXERCISE ANY SUCH AUTHORITY. THE NAMES, BACKGROUNDS AND QUALIFICATIONS OF THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY, AND OTHER INFORMATION ABOUT THEM, CAN BE FOUND IN THE COMPANY’S PROXY STATEMENT.
THERE IS NO ASSURANCE THAT ANY OF THE CANDIDATES WHO HAVE BEEN NOMINATED BY THE COMPANY WILL SERVE AS DIRECTORS IF OUR NOMINEE IS ELECTED.
|
In their discretion, the proxy holders are authorized to vote upon such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
Dated: ___________________________________, 2014
(Signature)_________________________________
(Signature if held Jointly)______________________
Title or Authority:____________________________
Please sign exactly as your name appears on this proxy. Joint owners should each sign personally. If signing as attorney, executor, administrator, trustee or guardian, please include your full title. Corporate proxies should be signed by an authorized officer. If a partnership, please sign in Partnership name by an authorized person.
|
||||
2. Proposal: To approve, on an advisory basis, the Company’s named executive officer
compensation.
¨FOR ¨AGAINST ¨ABSTAIN
3. Proposal: Ratification of Wolf & Company, P.C. to serve as the Company’s independent
registered public accounting firm for the fiscal year ending December 31, 2014.
¨FOR ¨AGAINST ¨ABSTAIN
|
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|
Re:
|
Echo Therapeutics, Inc.
|
|
Preliminary Proxy Statement filed by Platinum Partners Value Arbitrage
|
|
Fund, L.P., Platinum Long Term Growth VII, LLC, Platinum Partners
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Liquid Opportunity Master Fund L.P., Platinum-Montaur Life Sciences,
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LLC, Platinum Management (NY) LLC, Platinum Liquid Opportunity
|
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Management (NY) LLC, Mark Nordlicht, Uri Landesman and
|
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Shepard M. Goldberg
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Filed on April 17, 2014
|
|
File No. 001-35218
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1.
|
Revise your disclosure to explain what you mean when you state that you are soliciting proxies to ensure that the interests of the company’s security holders are “appropriately represented in the boardroom.” Are those interests not currently represented? Are your interests not currently represented through Dr. Goldberg’s membership on the board as your designee?
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2.
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We note that you intend to use proxies you obtain to vote for the Company nominee other than Robert Doman. Please revise to identify this other nominee and his relationship to you and your current nominee.
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3.
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While we note the disclosure that election of your nominee will result in a minority position of the Board, it appears from your disclosure about seeking to “reconstitute the Board beginning with” the replacement of Mr. Doman that you are attempting to obtain control. If so, please revise accordingly. Please also reconcile with your disclosure here that “We are not seeking control of the Board.”
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4.
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We note the disclosure regarding the aggregate number of shares beneficially owned by the participants. Given the conversion and exercise limits noted in your disclosure, please revise to clarify how many votes the participants are entitled to cast with respect to the shares they own.
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5.
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Please revise to clarify the “certain” actions, steps, representatives and members referenced throughout this section.
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6.
|
We note your description of the 9.99% Blocker and that you currently are the beneficial owner of 19.99% of the company’s shares. Revise this section, as necessary, to describe your request for a waiver of the 9.99% Blocker.
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7.
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Please revise to disclose any material discussions and negotiations between the participants and the Company between the nomination of Shepard Goldberg in December 2013 and the February 27, 2014 settlement. Currently, it appears that the nomination was made, a complaint was filed and answered and the lawsuit was settled without any communication between the parties. Include in your revised disclosure how and why Michael Goldberg was agreed to be elected to the Board given that Shepard Goldberg was your original nominee.
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8.
|
Revise the February 27, 2014 entry to disclose whether Dr. Goldberg is currently a director of the company.
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9.
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The penultimate sentence of the first paragraph implies that the current Board lacks the “appropriate and relevant skill sets and a shared objective of enhancing value for the benefit of all stockholders.” We also note the disclosure on page 5 regarding the objectivity the current Board lacks. Avoid issuing statements that directly or indirectly impugn the character, integrity or personal reputation or make charges of illegal, improper or immoral conduct without factual foundation. Provide us with the factual support for these assertions. In this regard, please note that the factual foundation offered must be reasonable. See Note b. to Rule 14a-9.
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10.
|
When you note in your disclosure a concern relating to the board or management, please also disclose how that concern should be addressed. For example, under “Poor Stock Price Performance,” you refer to various deficiencies that need to be addressed, but the deficiencies and any plans to remedy the deficiencies are unclear from your disclosure. We also note the disclosure regarding an ineffective CEO search, inability to manage expenses and insufficient stock ownership by the Board, but it is unclear what specific actions you believe should be taken. Please revise.
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11.
|
Please clarify the purpose of note 1 in the table. Also, with a view toward disclosure, tell us why you selected to NASDAQ Stock Market Index as a comparator given the exchange on which the Company’s shares trade.
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12.
|
Revise the last sentence in this section to explain how the election of your nominee is the “only way to stop [the] value destruction.”
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13.
|
Disclose why you are concerned that the company “will conduct another dilutive equity financing.”
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14.
|
Revise the last sentence of this section to explain why you believe that Mr. Doman’s presence on the board prevents the company from “effectively” completing its search for a permanent chief executive officer.
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15.
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Disclose here that neither your nominee nor Dr. Goldberg, who is your board designee and whose election you support, own any shares in the company and explain how their election would add accountability to the board given that the ownership of shares by board members as a group will decrease with the election of Mr. Goldberg and Dr. Goldberg and that both Mr. Goldberg and Dr. Goldberg will have even less “accountability” than the current directors.
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16.
|
We note your inclusion of the text of footnote 2 but are unable to find the language to which this footnote is related. Please advise or revise.
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17.
|
Explain why you do not believe that the family relationship between Mr. Goldberg and Dr. Goldberg “detracts from Mr. Goldberg’s qualifications or his ability to effectively serve stockholders as a director.”
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18.
|
We note your disclosure regarding additional or substitute nominees. Advise us, with a view towards revised disclosure, whether the participants are required to identify or nominate such substitute nominees in order to comply with any applicable Company advance notice bylaw. In addition, please confirm for us that should the participants lawfully identify or nominate substitute nominees before the meeting, the participants will file an amended proxy statement that (1) identifies the substitute nominees, (2) discloses whether such nominees have consented to being named in the revised proxy statement and to serve if elected and (3) includes the disclosure required by Items 5(b) and 7 of Schedule 14A with respect to such nominees.
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19.
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We note the multiple methods by which proxies will be solicited. Please be advised that all written soliciting materials, including any scripts to be uses in soliciting proxies must be filed under the cover of Schedule 14A on the date of first use. Please confirm your understanding.
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20.
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Please tell us how your disclosure regarding attribution of group beneficial ownership is consistent with Question 105.06 of our Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting, Compliance and Disclosure Interpretations, available at http://www.sec.gov/divisions/corpfin/guidance/reg13d-interp.htm
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21.
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We note your intent to rely on Exchange Act Rule 14a-5(c). Please be advised that we believe reliance on Rule 14a-5(c) before the Company distributes the information to security holders would be inappropriate. Alternatively, if you determine to disseminate your proxy statement prior to the distribution of the Company’s proxy statement, you must undertake to provide the omitted information to security holders. Please advise as to your intent in this regard.
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·
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The undersigned is responsible for the adequacy and accuracy of the disclosure in the Proxy Statement;
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·
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The Staff’s comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the Proxy Statement; and
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·
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The undersigned may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
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