Echo Therapeutics Announces Agreement for $2,000,000 Debt Financing



    FRANKLIN, Mass., March 25 /CNW/ -- Echo Therapeutics (OTC Bulletin Board:  
ECTE) today announced that it has entered into a debt financing agreement
providing for the sale, at the Company's option, of up to $2,000,000 of
original issue discount senior secured notes to Imperium Master Fund, Ltd.,
together with warrants to purchase up to 634,920 shares of the Company's
common stock at an exercise price of $2.00 per share.
    "This strategic debt facility offers us a timely and non-dilutive way to
advance our core product development programs in this challenging equity
capital market," stated Patrick Mooney, M.D., Echo's Chairman and Chief
Executive Officer. "In particular, in the near term, we look forward to
initiating additional studies of our Symphony(TM) tCGM System for glucose
monitoring in the diabetes home use and hospital critical care settings."
    
    Transaction Details
    
    The debt financing agreement provides for, at Echo's option, the sale and
issuance of up to an aggregate $2,000,000 of original issue discount senior
secured notes (Notes) in four equal tranches. Echo is not required to make
monthly cash payments of principal and interest under the Notes. Instead, the
outstanding principal of each Note sold will accrete in value at an annual
rate of 10%, compounded monthly, resulting in a total principal amount of
approximately $552,356 due for each Note at maturity.  Upon Echo's completion
of an equity financing in one or more series of transactions totaling at least
$5,000,000, the aggregate amount due for each Note sold under the agreement
will be reduced from $552,356 to $546,903 and the annual accretion value will
be reduced from 10% to 9%.
    Each Note will mature twelve months after the date of the issuance,
subject to extension to 24 months after the date of issuance if Echo completes
an equity financing in one or more series of transactions totaling at least
$5,000,000 before October 31, 2008. Echo has the right to repay the principal
amount of the Notes in cash, in whole, but not in part, prior to maturity at a
premium of 1.02 times the unpaid principal plus any other amount due under the
Notes.
    Echo issued the initial Note and the warrants concurrently with the
execution of the debt financing agreement in exchange for gross proceeds in
the amount of $500,000. Echo now has the option, exercisable in its sole
discretion, to sell to the holder of the initial Note, an additional Note on
each of April 24, 2008, May 24, 2008 and June 24, 2008 (each, a Drawdown) at a
purchase price of $500,000.  To terminate a scheduled Drawdown, Echo must
notify the Note holder at least ten (10) days prior to the date of such
Drawdown.
    The obligations under the Notes are secured by a security interest in all
of the assets of Echo and its subsidiaries.  Both of Echo's subsidiaries also
guaranteed Echo's obligations under the Notes.
    The warrants issued in connection with the execution of the agreement
have a five year term and contain weighted-average anti-dilution protection. 
Echo agreed to file a registration statement with the Securities and Exchange
Commission covering the resale of the Echo common stock issuable upon
conversion of the warrants.
    The securities issued in the financing have not been registered under the
Securities Act of 1933, as amended, and may not be offered or sold in the
United States in the absence of an effective registration statement or an
exemption from the registration requirements under the Securities Act. This
notice does not constitute an offer to sell or the solicitation of an offer to
buy securities, nor shall there be any sale of the securities in any state in
which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of such state.
    
    About Echo Therapeutics
    
    Echo Therapeutics is focused on transdermal medical devices and specialty
pharmaceuticals. Echo is developing next-generation, non-invasive, wireless,
transdermal continuous glucose monitoring (tCGM) systems for people with
diabetes and for use by healthcare professionals in hospital critical care
units worldwide, and novel topical reformulations of FDA-approved products.
    
    Cautionary Statement Regarding Forward Looking Statements
    
    This press release contains forward-looking information that involves
risks and uncertainties, including statements regarding Echo's plans,
objectives, expectations and intentions. Such statements include, without
limitation, statements regarding Echo's execution of an agreement providing
for $2 million in debt financing.
    Echo's transdermal continuous glucose monitoring systems have not yet
been approved for sale. The regulatory approval process for its tCGM systems
involves, among other things, successfully completing clinical trials and
obtaining a premarket approval, or PMA, from the FDA. The PMA process requires
Echo to prove the safety and efficacy of its tCGM systems to the FDA's
satisfaction. This process can be expensive and uncertain, and there is no
guarantee that Echo will be able to submit a PMA for its tCGM system or that
its tCGM system will be approved by the FDA in any specific timeframe or at
all. In addition, clinical testing of Echo's products and eventual
commercialization of its products are subject to all of the risks and
uncertainties set forth in its periodic reports filed with the Securities and
Exchange Commission.
    Factors that could adversely affect Echo's business and prospects are
described in Echo's filings with the Securities and Exchange Commission.  Echo
expressly disclaims any obligation or undertaking to release publicly any
updates or revisions to any such statements to reflect any change in Echo's
expectations or any change in events, conditions or circumstances on which any
such statement is based.

    Investor Relations Contacts:

    
    Patrick T. Mooney, M.D.
    CEO
    Echo Therapeutics
    508-530-0329
    

    
    Melanie Friedman
    Stern Investor Relations
    212-362-1200
    

    (C) 2002 - 2008 Echo Therapeutics, Inc. All rights reserved worldwide.




For further information:

For further information: Investor Relations, Patrick T. Mooney, M.D.,
CEO  of Echo Therapeutics, +1-508-530-0329, Melanie Friedman of Stern Investor
 Relations, +1-212-362-1200, for Echo Therapeutics

Organization Profile

ECHO THERAPEUTICS

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