Delaware
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001-35218
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41-1649949
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(State or other jurisdiction
of Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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99 Wood Avenue South, Suite 302
Iselin, NJ
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08830
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(Address of principal executive offices)
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(Zip Code)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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ECHO THERAPEUTICS, INC.
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Dated: April 15, 2015
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By: /s/ Alan W. Schoenbart
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Alan W. Schoenbart
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Chief Financial Officer
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·
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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. The achievement marked the first key step in the strategic transformation of the Company’s technology from a hospital-based medical system to a consumer product in both the wearable-health and diabetes segments.
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·
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In January 2015, Echo re-established its operational and strategic collaboration agreement with Medical Technologies Innovation Asia (MTIA), Ltd., Hong Kong. The partnership agreement includes a licensing and technology transfer under which MTIA will manufacture Echo's proprietary skin permeation and analyte measurement technology. Echo granted MTIA rights to develop, manufacture, market, and distribute Echo's technology on an exclusive basis for the Chinese market, including the Peoples' Republic of China, Hong Kong, Macau and Taiwan.
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In January 2015, Echo rehired key members of its Research & Development team, led by Tom Bishop, Vice President of Operations and Product Development, to refine and adapt Echo's core technology for wearable technology and diabetes applications.
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In December 2014, Scott W. Hollander was appointed Chief Executive Officer. Mr. Hollander has more than 20 years of experience in the medical device, pharmaceutical and capital equipment industries, and most recently served as Vice President, Business Development, Otsuka Pharmaceuticals as well as President and Chief Executive Officer of Interpharma-Praha, an Otsuka subsidiary company.
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In December 2014, Alan W. Schoenbart, CPA, a senior executive with more than thirty years of financial management experience, joined the Company as Chief Financial Officer (CFO) from Hudson News Distributors, where he most recently served as the CFO. Mr. Schoenbart’s prior experience included CFO for Forticell Bioscience, Inc., a publicly traded medical device company, and Audit Manager at KPMG.
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In December 2014, pursuant to a Securities Purchase Agreement, Platinum Value Arbitrage Fund L.P. and certain other investors agreed to purchase shares of the Company's stock for an aggregate purchase price of $4 million. The agreement includes an upfront investment of $1 million, with the remaining portion of the investment to be made in monthly installments.
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Condensed Consolidated Balance Sheets
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December 31,
2014
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December 31,
2013
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ASSETS
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Current Assets:
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Cash and cash equivalents | $ | 1,278,941 | $ | 8,055,385 | ||||
Other current assets
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543,312 | 1,319,713 | ||||||
Total current assets
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1,822,253 | 9,375,098 | ||||||
Net property and equipment (including assets under capitalized leases)
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1,138,593 | 1,495,807 | ||||||
Other Assets:
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Intangible assets, net of accumulated amortization
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9,625,000 | 9,625,000 | ||||||
Deferred financing costs
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- | 2,581,324 | ||||||
Other assets
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9,990 | 12,066 | ||||||
Total other assets
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9,634,990 | 12,218,390 | ||||||
Total assets
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$ | 12,595,836 | $ | 23,089,295 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
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Accounts payable
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$ | 1,801,469 | $ | 1,036,320 | ||||
Deferred revenue from licensing agreements
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- | 76,428 | ||||||
Derivative warrant liability
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208,155 | 1,119,155 | ||||||
Accrued expenses and other liabilities
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968,392 | 1,412,468 | ||||||
Total current liabilities
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2,978,016 | 3,644,371 | ||||||
Deferred revenue from licensing arrangements, net of current portion
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95,535 | 76,428 | ||||||
Total liabilities
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3,073,551 | 3,720,799 | ||||||
Commitments and Contingencies
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Stockholders' Equity:
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Convertible preferred stock, Series C, D, E & F
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35,899 | 27,496 | ||||||
Common stock
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126,295 | 117,764 | ||||||
Additional paid-in capital
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137,292,157 | 132,192,648 | ||||||
Accumulated deficit
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(127,932,066 | ) | (112,969,412 | ) | ||||
Total stockholders' equity
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9,522,285 | 19,368,496 | ||||||
Total liabilities and stockholders' equity
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$ | 12,595,836 | $ | 23,089,295 |
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Year Ended
December 31,
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2014
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2013
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$ | 57,321 | $ | 27,600 | |||||
Operating Expenses:
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Research and development
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4,962,196 | 12,991,502 | ||||||
Selling, general and administrative
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7,415,049 | 6,680,983 | ||||||
Total operating expenses
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12,377,245 | 19,672,485 | ||||||
Loss from operations
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(12,319,924 | ) | (19,644,885 | ) | ||||
Other Income (Expense):
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Interest expense, net
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(3,550,504 | ) | (3,900,064 | ) | ||||
Other income
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1,888 | 11,566 | ||||||
Loss on disposals of assets
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(1,114 | ) | - | |||||
Gain on revaluation of derivative warrant liability
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911,000 | 4,465,986 | ||||||
Other income (expense), net
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(2,638,730 | ) | 577,488 | |||||
Net loss before taxes
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(14,958,654 | ) | (19,067,397 | ) | ||||
State income taxes
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4,000 | ) | - | |||||
Net loss
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(14,962,654 | ) | (19,067,397 | ) | ||||
Deemed dividend on beneficial conversion feature of convertible preferred stock
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(350,000 | ) | (371,140 | ) | ||||
Net loss applicable to common shareholders
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$ | (15,312,654 | ) | $ | (19,438,537 | ) | ||
Net loss per common share, basic and diluted
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$ | (1.24 | ) | $ | (2.33 | ) | ||
Basic and diluted weighted average common shares outstanding
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12,308,254 | 8,359,837 |