Echo Therapeutics exchanges preferreds for 8% notes

By Devika Patel

Knoxville, Tenn., Oct. 6 - Echo Therapeutics, Inc. entered into an exchange agreement with the holders of $2.08 million of its 8% unsecured senior convertible promissory notes due Feb. 12, 2011 on Sept. 30, according to an 8-K filed Monday with the Securities and Exchange Commission.

The company issued 1,539,161 series A preferred shares, 14 fractional shares to be settled in cash at $1.00 per share and five-year warrants (for the notes.

The warrants are exercisable for a number of common shares equal to 10% of the number of preferred shares issuable to each investor, or 153,912 shares total. They have an exercise price of $1.00, subject to adjustment.

Each preferred is initially convertible into one common share.

The preferred stock will pay a quarterly dividend at an annual rate of 8%, which is payable in cash or in kind at the company's option.

Franklin, Mass.-based Echo Therapeutics is a dual platform-enabled, specialty therapeutics and diagnostics company.

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