Platinum-Montaur Announces Proposal To Reverse The Destruction Of Shareholder Value At Echo Therapeutics, Inc.

Platinum-Montaur Announces Proposal To Reverse The Destruction Of Shareholder
                       Value At Echo Therapeutics, Inc.

PR Newswire

NEW YORK, Aug. 30, 2013

NEW YORK, Aug. 30, 2013 /PRNewswire/ --Platinum-Montaur Life Sciences, LLC
("Platinum"), the largest shareholder of Echo Therapeutics, Inc. (Nasdaq:
ECTE) ("Echo" or the "Company") with approximately 20% of the outstanding
common stock of the Company, today sent a letter to the Board of Directors of
Echo (the "Board") outlining Platinum's proposals to stop the destruction of
shareholder value.

Echo's share price has collapsed over 95% in the last two years.

"We have diligently attempted on numerous occasions to work constructively
with the Board," stated Michael Goldberg, M.D., Portfolio Manager at
Platinum. "Regrettably, endless months of Board inaction force us to publicly
announce a multi-point plan carefully targeted to address the shortfalls in
leadership, strategy, product partnering and financing that have plagued Echo
and punished its shareholders through dilution and rampant loss of market
value."

Platinum's letter to the Board, reproduced below, proposes an immediate plan
that:

  oRemoves ineffective directors and replaces them with professionals who
    bring key industry experience and informed investor community insight to a
    Board that has proven incapable of developing Echo's potentially
    groundbreaking CGM Technology and in communicating with the shareholder
    base
  oPresents a uniquely valuable opportunity to team with an offshore partner
    who will bear the burden of developing and marketing the CGM Technology on
    economically favorable terms
  oEngages a premier consulting firm to help the new Board establish and
    implement a sorely needed strategic vision
  oRetains a leading recruiting firm to hire a gifted permanent CEO with bona
    fide medical device development credentials who is not tainted by service
    on the current underperforming Board
  oOffers financing at a premium to share price that will halt the dilution
    that has battered the shareholder owners of Echo

Shareholders are strongly urged to read Platinum's letter to the Board in its
entirety and draw their own conclusions about whether this proposal is right
for the Company.

Platinum urges the Board to quickly work through the proposal and stands ready
to assist in any way it can. It believes that the Company has a potentially
transformative product in the CGM Technology that needs to be developed
without further waste of time and money. The Board must show the market that
it is no longer business as usual at Echo. As the letter to the Board makes
clear, Platinum's proposal expires at 5 PM on Wednesday, September 4, 2013
unless accepted by the Board before then. If the Board once again lets
another prime opportunity go by, Platinum reserves all it rights to take
further action.

Letter to the Board

August 30, 2013

Board of Directors
Echo Therapeutics, Inc.
8 Penn Center
1628 JFK Boulevard, Suite 300
Philadelphia, PA 19103

Gentlemen:

I write to you on behalf of Platinum-Montaur Life Sciences, LLC and our
affiliated funds, beneficial holders of approximately 20% percent of the
common stock of Echo Therapeutics, Inc. (the "Company" or "Echo"). For many
months now we have attempted to have a constructive dialog with the Board of
Directors of Echo (the "Board") and its former CEO who was recently and
summarily terminated. Not once in our numerous discussions has a director or
executive of Echo acknowledged the Company's free-fall and their role in it.
Do the people in Echo's c-suite and Board room not recognize the judgment that
the investing public is rendering on their leadership and oversight when the
stock price plummets approximately 95% in the past two years while the NASDAQ
has increased approximately 40%? To this day we are still waiting for the
Company's leadership to assuage the market's deepest concerns and publicly
announce a plausible and immediate strategy for turning Echo around and
unlocking its awesome potential.

Frankly, we would have thought you would be reaching out to shareholders and
welcoming and acting on the positive ideas suggested by Platinum and others.
However, the Board's terminal inaction convinces us that you cannot or will
not right this ship without outside pressure and leadership. We cannot wait
any more, and we sense that other shareholders feel the same way. We must now
publicly advance a proposal that we believe provides a real lifeline to this
troubled but potentially fantastic Public Company.

The following is a summary of our proposal:

1. Board Composition:

a. Vincent D. Enright and James F. Smith must resign immediately from
the Board.

b. Michael M. Goldberg, M.D. and Gary Saxton (an experienced medical
device executive who has negotiated deals with many medical device companies)
should be immediately appointed to the Board.

2. Development of CGM Technology: We have identified a potential
partner ("China Partner") for the Company for the development and manufacture
of the CGM Product in China. The Board should begin discussions with China
Partner without delay. It is anticipated that an agreement with China Partner
would include:

a. Fast Track CFDA approval of the Product;

b. China Partner covering the entire development cost and taking
responsibility for manufacturing, marketing and selling the approved Product
in China;

c. China Partner would have exclusivity for the Product in mainland
China;

d. China Partner and the Company would split sales of the Product in
China based on a high double-digit royalty arrangement; China Partner will pay
all manufacturing, sales and marketing, and distribution costs from its share
after the payment of royalties to Echo;

e. The Company will retain all intellectual property; and

f. Upon earlier of (i) approval of the Product by CFDA, or (ii)
termination of the agreement with China Partner, the Company will reimburse
China Partner for $1.5 million of expenses in the form of common stock of the
Company (valued at a mutually acceptable price to be determined).

3. Engagement of Consultant: The Company will engage a consulting
firm, to be unanimously approved by the Board, to provide strategic consulting
to the Company, including an independent, high-quality review of the Company's
product and business development positioning. We have a candidate we would
like to suggest for this role.

4. Engagement of a Recruiting Firm. Immediately hire a top quality
executive recruiting firm with recent relevant exposure to executives with
current experience in medical device business development.

5. Future Investment: The Company will not enter into any further
equity or debt financing or business development opportunities without the
unanimous approval of the newly constituted Board. Upon closing of the
transaction with China Partner, we (and potentially other co-investors
approved by the Board) will purchase $10 million of common stock of the
Company (valued at a mutually acceptable price to be determined). Continued
depletion of cash through an uncorrected burn rate will of course negatively
impact price.

Now is the time to act. Surely the Board sees that each day it looks at the
stock price and the burn rate. Yes, you were elected by the shareholders.
Now show that their trust was justified by forcefully and publicly acting in
their best interests. Reach out to your largest shareholders and ask them
what they think of this Proposal. We stand ready to speak or meet with you to
help in any way we can, and will make necessary introductions to China
Partner. However, we do expressly want a public response to this entirely
sound proposal, and call upon the Board to provide that response no later than
5 PM on Wednesday, September 4, 2013 (the "Deadline"). If the Board fails to
accept our Proposal by the Deadline, then Platinum's willingness to
participate in the Proposal will expire and we expressly reserve all our
rights, including by taking our case directly to our fellow shareholders. As
we have publicly expressed in the past, we reserve all rights.

Best regards,

Michael M. Goldberg, M.D.
Portfolio Manager

About Platinum-Montaur Life Sciences, LLC

Platinum-Montaur Life Sciences, LLC is the healthcare division of Platinum
Partners, a New York-based investment management group with more than $1
billion in assets under management. Platinum-Montaur Life Sciences, LLC
employs a growth equity investment strategy, taking large early-stage
positions in public and private companies with promising healthcare
technologies.

Safe Harbor

Cautionary Statement Regarding Forward-Looking Statements

The information herein contains "forward-looking statements." Specific
forward-looking statements can be identified by the fact that they do not
relate strictly to historical or current facts and include, without
limitation, words such as "may," "will," "expects," "believes," "anticipates,"
"plans," "estimates," "projects," "targets," "forecasts," "seeks," "could" or
the negative of such terms or other variations on such terms or comparable
terminology. Similarly, statements that describe our objectives, plans or
goals are forward-looking. Our forward-looking statements are based on our
current intent, belief, expectations, estimates and projections regarding the
Company and projections regarding the industry in which it operates. These
statements are not guarantees of future performance and involve risks,
uncertainties, assumptions and other factors that are difficult to predict and
that could cause actual results to differ materially. Accordingly, you should
not rely upon forward-looking statements as a prediction of actual results.

CONTACT: Alan Oshiki, Broadgate Consultants, 212-232-2354,
aoshiki@broadgate.com

SOURCE Platinum-Montaur Life Sciences, LLC
 
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