Echo Therapeutics, Inc. Announces Second Quarter 2014 Financial Results and Provides Business Update

 Echo Therapeutics, Inc. Announces Second Quarter 2014 Financial Results and
                           Provides Business Update

40%-50% Monthly Cash Burn Reduction Initiatives Implemented

Increased Focus on Key Symphony CGM System Enhancements

PR Newswire

PHILADELPHIA, Aug. 14, 2014

PHILADELPHIA, Aug. 14, 2014 /PRNewswire/ -- Echo Therapeutics, Inc. (Nasdaq:
ECTE), a medical device company developing its Symphony^® CGM System as a
non-invasive, wireless continuous glucose monitoring system, today announced
its financial results for the quarter ended June 30, 2014 and provided a
business update. Echo's Quarterly Report on Form 10-Q, as filed with the SEC,
is available by visiting the Investors section of Echo's website at

Echo also announced today that it has taken steps to substantially reduce
operating costs and preserve cash while furtherfocusing its development
efforts and resources on implementing key product performance enhancements to
its Symphony CGM System. The Company has implemented significant cost
reductions across all aspects of its operations in both external spend and
workforce, including reductions in general and administrative expenditures,
manufacturing, clinical and product development expenditures. At the same
time, the Company is exploring a variety of funding alternatives which it
believes, together with the cost reduction initiatives, is necessary to permit
the Company to ultimately achieve its clinical trial and regulatory approval
objectives. In the absence of a financing or strategic transaction, Echo's
ability to achieve itspreviously stated product development timelines will be
negatively impacted by the Company's effort to preserve cash and reduce

Cost reduction measures that were successfully implemented in September 2013
resulted in a 36% decrease in second quarter of 2014 operating expenses
compared to the second quarter of 2013. The Company anticipates an additional
meaningful decrease in expenses as a result of the most recent cost reduction
efforts. As a result of these new initiatives, that include a 35% employee
reduction, the monthly burn rate is projected to decrease by 40%-50% as
compared to the average monthly burn rate experienced during the first six
months of 2014.

"Our management team and Board of Directors believe more than ever in the
viability of Symphony and in the positive product development progress made in
the past few months; however, it is in the best interests of Echo and its
shareholders to take immediate and significant action to adjust our business
and operating structure in order to achieve cost savings, preserve cash and
deploy capital more efficiently as we continue to make progress toward
commercialization. Our focus continues to be prudent with our spending while
implementing and testing the key product enhancements for the next generation
Symphony CGM System," said Kimberly A. Burke, Echo's Interim CEO, General
Counsel and Chief Compliance Officer. "We remain excited about the potential
for Symphony as an important tool to improve glycemic control in the critical
care setting and we believe that additional market segment and partnership
opportunities exist for various demographics. Our SkinPrep technology also
offers multi-product opportunities for use as a drug delivery device or in
combination with other biosensors to monitor additional analytes."

Other Recent Corporate Updates:

  oIn June 2014, Echo's clinical study of Symphony was presented during
    poster sessions at the 74^th Scientific Sessions of the American Diabetes
    Association (ADA) in San Francisco, California.
  oStockholders elected Shepard M. Goldberg to the Echo Board of Directors at
    the 2014 Annual Meeting of Stockholders held on June 19, 2014.
  oKimberly A. Burke was appointed as Interim Chief Executive Officer (CEO)
    of Echo effective July 1, 2014. The Board continues to work with a
    retained executive search firm to hire a well-qualified permanent CEO.
  oCharles T. Bernhardt was appointed by the Echo Board of Directors to serve
    as Interim Chief Financial Officer (CFO) on July 16, 2014.

Second Quarter 2014 Financial Results

Echo's net loss for the second quarter of 2014 was $3.8 million, or ($0.31)
per share, compared to $3.3 million, or ($0.51) per share, for the second
quarter of 2013. Operating loss for the second quarter of 2014 was $3.9
million compared to $6.1 million for the second quarter of 2013. Research and
development expenses were $1.7 million for the second quarter of 2014 compared
to $4.0 million in the prior year. The decrease in research and development
expenses is primarily related to decreased development and clinical expenses.
General and administrative expenses were $2.2 million for the second quarter
of 2014 versus $2.1 million in the prior year. A decrease in general and
administrative expenses was offset by unanticipated expenses that included
costs associated with the proxy contest and annual shareholder meeting and
legal expenses. Echo reported a cash balance of approximately $4.1 million as
of June 30, 2014.

About Echo Therapeutics

Echo Therapeutics is developing the 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 patients with diabetes in the outpatient setting.Echo has also
developed its needle-free skin preparation device as a platform technology to
allow for enhanced skin permeation that enables 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, including
the statements about future decreases in expense, corporate objectives, a
European product launch and initiation of the FDA pivotal trial, 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 Symphony CGM System, the failure of
future development and preliminary marketing efforts related to Echo's
Symphony 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 the Symphony 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 Symphony
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, 2013, 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
(215) 717-4104

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Echo Therapeutics, Inc

Condensed Consolidated Balance Sheets

                                           June 30,         December 31,

                                          2014               2013
Current Assets:
Cash and cash equivalents                 $   4,105,954   $   8,055,385
Other current assets                      1,228,991          1,319,713
Total current assets                      5,334,945          9,375,098
Net property and equipment (including     1,329,539          1,495,807
assets under capitalized leases)
Other Assets:
Intangible assets, net of accumulated     9,625,000          9,625,000
Deferred financing costs, net of current  2,097,322          2,581,324
Restricted cash and other assets          11,490             12,066
Total other assets                        11,733,812         12,218,390
Total assets                              $  18,398,296    $  23,089,295
Current Liabilities:
Accounts payable                          $   1,032,360   $   1,036,320
Current portion of deferred revenue from  76,428             76,428
licensing agreements
Derivative warrant liability              586,155            1,119,155
Accrued expenses and other liabilities    884,201            1,412,468
Total current liabilities                 2,579,144          3,644,371
Deferred revenue from licensing           38,214             76,428
arrangements, net of current portion
Total liabilities                         2,617,358          3,720,799
Commitments and contingencies
Stockholders' Equity:
Convertible preferred stock, Series C, D  27,496             27,496
& E
Common stock                              126,654            117,764
Additional paid-in capital                135,133,217        132,192,648
Accumulated deficit                       (119,506,429)      (112,969,412)
Total stockholders' equity                15,780,938         19,368,496
Total liabilities and stockholders'       $  18,398,296    $  23,089,295

Condensed Consolidated Statements of Operations

                   Three Months Ended           Six Months Ended

                   June 30,                     June 30,
                   2014           2013          2014            2013
Licensing revenue  $ 19,107       $ 22,557      $ 38,214        $ 45,114
Total revenues     19,107         22,557        38,214          45,114
Research and       1,747,254      4,019,149     3,148,162       7,238,872
Selling, general   2,187,335      2,098,347     3,475,235       4,397,794
and administrative
Total operating    3,934,589      6,117,496     6,623,397       11,636,666
Loss from          (3,915,482)    (6,094,939)   (6,585,183)     (11,591,552)
Other Income
Interest income    (242,994)      (241,458)     (486,334)       (3,414,156)
(expense), net
Gain on disposals  1500           -             1500            -
of assets
Gain on
revaluation of     393,000        2,995,000     533,000         4,675,986
derivative warrant
Other income       151,506        2,753,542     48,166          1,261,830
(expense), net
Net loss           $ (3,763,976)  $             $ (6,537,017)   $ (10,329,722)
Net loss per
common share,      $ (0.31)       $ (0.51)      $ (0.55)        $ (1.73)
basic and diluted
Basic and diluted
weighted average   12,070,548     6,594,530     11,965,306      5,987,376
common shares

(Reflects 1-for-10 reverse stock split effective June 7, 2013)

SOURCE Echo Therapeutics, Inc.

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