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Print Edition StoriesWednesday, June 10, 2009
Echo Therapeutics seeks $2M cash infusion
By Mass High Tech staff
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The up and down fortunes of Echo Therapeutics Inc. continue with the latest news being that while the cash-strapped company took in a $2 million short-term loan, it still needs more money to keep operating, according to a report by the Boston Business Journal.
The report, based on regulatory filings, came just two weeks after Echo said it could bring in up to $14 million from a licensing agreement with Ferndale Pharma Group, giving Ferndale the right to develop and sell a lidocaine application using Echo’s needle-free skin preparation system.
Echo (OTC: ECTE) said it has received a $1.99 million loan from Platinum Montaur Life Sciences LLC. The loan, which comes with 10 percent annual interest, is due June 29. The net proceeds from the loan were used to pay off debt with Imperium Master Fund Ltd. After getting loan extensions, the company paid off $2.25 million of debt held by Imperium, according to a filing with the U.S. Securities and Exchange Commission. Nevertheless, Imperium reportedly told Echo the payments were late, saying the company was in default. Echo said it believes it was not in default.
At the end of March, Echo Therapeutics had only $56,000 in cash and a working capital deficit of nearly $5 million. It also has a “going concern” opinion hanging over its head, meaning the company may not have the financial resources to continue operating. The company posted a net loss of $1.3 million in the first quarter.
Echo, originally known as Sontra Medical Corp., is led by chairman and CEO Patrick T. Mooney, who joined Echo in September 2007 as a result of the merger of Sontra and then privately-held Echo Therapeutics Inc. of North Carolina. Its board includes MIT professor and entrepreneur Robert S. Langer.
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