UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 13, 2015
Echo Therapeutics, Inc.
(Exact name of Company as specified in its charter)
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Delaware
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000-23017
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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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Company’s telephone number, including area code: (732) 549-0919
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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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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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 4.02 (a)
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Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
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On April 13, 2015, the management of Echo Therapeutics, Inc. (the “Company”) determined that the Company’s financial statements issued for the quarterly period ended September 30, 2014 could no longer be relied upon as a result of the write-off of deferred financing costs in the third quarter of 2014 that should have been written-off in the fourth quarter of 2014.
In its quarterly report for the period ended September 30, 2014, the Company stated that due to its inability to cause Platinum Montaur (“PM”) to advance funds pursuant to the 2012 Credit Facility (“CF”), since draws were made at PM’s discretion in accordance with the Loan Agreement, the Company elected to terminate the CF it had with PM. Accordingly, on October 28, 2014, the Company notified PM that it was irrevocably canceling and terminating the CF effective as of October 30, 2014. In the third quarter of 2014 the Company fully amortized the remaining $2,823,325 of deferred financing costs related to the CF that the Company had with PM stating that since the Company was not able to borrow against the CF, it was terminating the CF shortly, and therefore expensing all the related deferred financing costs. While examining the underlying transaction related to the write-off of debt issuance costs, the Company determined that the deferred financing costs should not have been written-off until the date the facility was actually extinguished, which occurred in October 2014, when the Company notified PM in writing of its intent to terminate, or the fourth quarter of 2014. Below follows the revision necessary to be made to the Company’s financial statements for the third quarter of 2014.
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Three Months Ended
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Nine Months Ended
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As Previously Recorded
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Adjustment
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As Revised
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As Previously Recorded
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Adjustment
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As Revised
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Licensing revenue
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$ | 19,107 | $ | − | $ | 19,107 | $ | 57,321 | $ | − | $ | 57,321 | ||||||||||||
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Total revenues
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19,107 | − | 19,107 | 57,321 | − | 57,321 | ||||||||||||||||||
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Operating Expenses:
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Research and development
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1,200,590 | − | 1,200,590 | 4,348,752 | − | 4,348,752 | ||||||||||||||||||
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Selling, general and administrative
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1,731,868 | − | 1,731,868 | 5,207,103 | − | 5,207,103 | ||||||||||||||||||
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Total operating expenses
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2,932,458 | − | 2,932,458 | 9,555,855 | − | 9,555,855 | ||||||||||||||||||
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Loss from operations
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(2,913,351 | ) | − | (2,913,351 | ) | (9,498,534 | ) | − | (9,498,534 | ) | ||||||||||||||
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Other Income (Expense):
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Interest income
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181 | − | 181 | 915 | − | 915 | ||||||||||||||||||
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Interest expense
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(3,064,414 | ) | 2,823,325 | (241,089 | ) | (3,551,482 | ) | 2,823,325 | (728,157 | ) | ||||||||||||||
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Gain on disposals of assets
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− | − | − | 1,500 | − | 1,500 | ||||||||||||||||||
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Gain (loss) on revaluation of derivative warrant liability
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473,000 | − | 473,000 | 1,006,000 | − | 1,006,000 | ||||||||||||||||||
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Other income (expense), net
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(2,591,233 | ) | 2,823,325 | 232,092 | (2,543,067 | ) | 2,823,325 | 280,258 | ||||||||||||||||
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Net loss
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$ | (5,504,584 | ) | $ | 2,823,325 | $ | (2,681,259 | ) | $ | (12,041,601 | ) | $ | 2,823,325 | $ | (9,218,276 | ) | ||||||||
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Net loss per common share, basic and diluted
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$ | (0.43 | ) | $ | 0.22 | $ | (0.21 | ) | $ | (0.99 | ) | $ | 0.23 | $ | (0.76 | ) | ||||||||
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Basic and diluted weighted average common shares outstanding
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12,660,182 | 12,660,182 | 12,660,182 | 12,199,476 | 12,199,476 | 12,199,476 | ||||||||||||||||||
The charge of $2,823,325 was then properly recorded in the October 2014 reporting period.
The Company’s Chief Financial Officer, Alan W. Schoenbart, was hired on December 29, 2014 and accordingly, Mr. Schoenbart was not a party to the original transaction referred to above.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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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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