UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008.
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to .
 Commission File Number: 000-23017
 
 ECHO THERAPEUTICS, INC.
  
 Delaware
    
    41-1649949(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)
 10 Forge Parkway, Franklin, MA
    
    02038(Address of principal executive offices)
    
    (Zip code)
 (508) 553-8850
  
 þ o
  Large accelerated filer o
    
    Accelerated filer
o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
 o þ




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##### 



FORM 10-Q INDEX
 PageNumberPART I. FINANCIAL INFORMATION
    
    
    3Item 1. Consolidated Financial Statements
    
    
    3Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007
    
    
    3Consolidated Statements of Operations for three and nine months ended September 30, 2008 and 2007
    
    
    4Consolidated Statements of Cash Flows for nine months ended September 30, 2008 and 2007
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    19Item 4T. Controls and Procedures
    
    
    26PART II. OTHER INFORMATION
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 6. Exhibits
    
    
    27SIGNATURES
    
    
    27




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##### 



PART IFINANCIAL INFORMATION
 
 Item 1. Consolidated Financial Statements.
 Echo Therapeutics, Inc.
(Formerly Sontra Medical Corporation)
 
 Consolidated Balance Sheets
 As of,September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)
    
    
    (Audited)ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    399,680
    
    
    $
    1,193,163Prepaid expenses and other current assets
    
    
    60,900
    
    
    
    25,263Total current assets
    
    
    460,580
    
    
    
    1,218,426Property and Equipment, at cost:Computer equipment
    
    
    242,495
    
    
    
    233,946Office and laboratory equipment
    
    
    609,029
    
    
    
    588,498Furniture and fixtures
    
    
    14,288
    
    
    
    14,288Manufacturing equipment
    
    
    129,320
    
    
    
    197,888Leasehold improvements
    
    
    177,768
    
    
    
    177,7681,172,900
    
    
    
    1,212,388Less-Accumulated depreciation and amortization
    
    
    (1,090,542
    )
    
    
    (1,100,507
    )Net property and equipment
    
    
    82,358
    
    
    
    111,881Other Assets:Restricted cash
    
    
    10,250
    
    
    
    10,250Intangible assets, net of accumulated amortization
    
    
    9,856,737
    
    
    
    9,945,486Deferred financing costs, net of amortization
    
    
    117,244
    
    
    
    Deposits and other assets
    
    
    2,000
    
    
    
    2,000Total other assets
    
    
    9,986,231
    
    
    
    9,957,736Total assets
    
    $
    10,529,169
    
    
    $
    11,288,043LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    685,211
    
    
    $
    382,308Current portion of notes payable, net of discounts
    
    
    1,918,443
    
    
    
    386,458Accrued expenses
    
    
    703,453
    
    
    
    451,136Total current liabilities
    
    
    3,307,107
    
    
    
    1,219,902Notes Payable, net of current portion and discounts
    
    
    283,832
    
    
    
    CommitmentsStockholders Equity:Series A Convertible Preferred Stock, $0.01 par value, authorized 2,636,363 and
7,000,000 shares, issued and outstanding 1,539,161 shares and none
at September 30, 2008 and December 31, 2007, respectively
    
    
    15,392
    
    
    
    Common stock, $0.01 par value, authorized 60,000,000 shares, issued and outstanding
18,801,933 shares and 17,870,804 shares at September 30, 2008 and December 31, 2007,
respectively
    
    
    188,021
    
    
    
    178,710Additional paid-in capital
    
    
    63,609,929
    
    
    
    57,575,593Accumulated deficit
    
    
    (56,875,112
    )
    
    
    (47,686,162
    )Total stockholders equity
    
    
    6,938,230
    
    
    
    10,068,141Total liabilities and stockholders equity
    
    $
    10,529,169
    
    
    $
    11,288,043




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##### 



Echo Therapeutics, Inc.
(Formerly Sontra Medical Corporation)
 
 Consolidated Statements of Operations
 (Unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenue:Product revenue
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    12,120Licensing revenue
    
    
    
    
    
    
    12,500
    
    
    
    
    
    
    
    37,500Total revenue
    
    
    
    
    
    
    12,500
    
    
    
    
    
    
    
    49,620Operating Expenses:Cost of product revenue
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,556Research and development
    
    
    883,916
    
    
    
    323,078
    
    
    
    2,425,822
    
    
    
    923,172Purchased research and development
    
    
    
    
    
    
    6,556,048
    
    
    
    
    
    
    
    6,556,048Selling, general and administrative
    
    
    875,138
    
    
    
    1,767,587
    
    
    
    3,279,522
    
    
    
    2,812,002Total operating expenses
    
    
    1,759,054
    
    
    
    8,646,713
    
    
    
    5,705,344
    
    
    
    10,292,778Loss from operations
    
    
    (1,759,054
    )
    
    
    (8,634,213
    )
    
    
    (5,705,344
    )
    
    
    (10,243,158
    )Other Income (Expense):Interest income
    
    
    4,671
    
    
    
    21,657
    
    
    
    21,746
    
    
    
    35,563Interest expense
    
    
    (303,473
    )
    
    
    (64,131
    )
    
    
    (861,863
    )
    
    
    (70,289
    )Loss on extinguishment of debt
    
    
    (844,760
    )
    
    
    
    
    
    
    (2,056,773
    )
    
    
    Derivatives loss
    
    
    
    
    
    
    
    
    
    
    (586,716
    )
    
    
    Other income (expense), net
    
    
    (1,143,562
    )
    
    
    (42,474
    )
    
    
    (3,483,606
    )
    
    
    (34,726
    )Net loss
    
    
    (2,902,616
    )
    
    
    (8,676,687
    )
    
    
    (9,188,950
    )
    
    
    (10,277,884
    )Accretion of dividend on Series A Convertible
Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (483
    )Net loss applicable to common shareholders
    
    $
    (2,902,616
    )
    
    $
    (8,676,687
    )
    
    $
    (9,188,950
    )
    
    $
    (10,278,367
    )Net loss per common share, basic and diluted
    
    $
    (0.15
    )
    
    $
    (0.70
    )
    
    $
    (0.50
    )
    
    $
    (1.05
    )Basic and diluted weighted
average common shares
outstanding
    
    
    18,771,460
    
    
    
    12,438,201
    
    
    
    18,544,093
    
    
    
    9,771,183




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##### 



Echo Therapeutics, Inc.
(Formerly Sontra Medical Corporation)
 
 Consolidated Statements of Cash Flows
 (Unaudited)
 Nine Months Ended September 30,2008
    
    
    2007Cash Flows From Operating Activities:Net loss
    
    $
    (9,188,950
    )
    
    $
    (10,277,884
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    147,352
    
    
    
    88,390Share-based compensation
    
    
    1,429,688
    
    
    
    1,677,374Purchased research and development
    
    
    
    
    
    
    6,556,048Fair value of common stock and warrants issued for services
    
    
    418,610
    
    
    
    Derivative loss
    
    
    586,716
    
    
    
    Loss on extinguishment of debt
    
    
    2,056,773
    
    
    
    Non-cash interest expense
    
    
    845,225
    
    
    
    55,208Changes in assets and liabilities:Inventory
    
    
    
    
    
    
    1,556Prepaid expenses and other current assets
    
    
    (35,637
    )
    
    
    (61,490
    )Accounts payable
    
    
    302,903
    
    
    
    282,065Deferred revenue
    
    
    
    
    
    
    (37,500
    )Accrued expenses
    
    
    291,147
    
    
    
    56,128Net cash used in operating activities
    
    
    (3,146,173
    )
    
    
    (1,660,105
    )Cash Flows from Investing Activities:Cash paid for acquisition of Durham
    
    
    
    
    
    
    (60,000
    )Purchase of property and equipment
    
    
    (29,080
    )
    
    
    (2,578
    )Decrease (Increase) in restricted cash
    
    
    
    
    
    
    9,699Net cash used in investing activities
    
    
    (29,080
    )
    
    
    (52,879
    )Cash Flows From Financing ActivitiesRepurchase of Series A preferred stock
    
    
    
    
    
    
    (73,334
    )Proceeds from the sale of common stock, net of expenses
    
    
    
    
    
    
    2,233,326Proceeds from Senior Convertible Notes and Warrants
    
    
    700,000
    
    
    
    Proceeds from Senior Promissory Notes
    
    
    
    
    
    
    1,325,000Proceeds from Secured Notes and Warrants
    
    
    2,000,000
    
    
    
    Deferred financing costs
    
    
    (432,309
    )
    
    
    Payments on equipment note payable
    
    
    
    
    
    
    (144,316
    )Proceeds from exercise of stock options
    
    
    
    
    
    
    1,350Proceeds from the exercise of warrants
    
    
    114,079
    
    
    
    30,187Net cash provided by financing activities
    
    
    2,381,770
    
    
    
    3,372,213Net (Decrease) Increase in Cash and Cash Equivalents
    
    
    (793,483
    )
    
    
    1,659,229Cash and Cash Equivalents, beginning of period
    
    
    1,193,163
    
    
    
    559,017Cash and Cash Equivalents, end of period
    
    $
    399,680
    
    
    $
    2,218,246
 The accompanying notes are an integral part of these consolidated financial statements.




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##### 



Echo Therapeutics, Inc.
(Formerly Sontra Medical Corporation)
Consolidated Statements of Cash Flows  Concluded
(Unaudited)
 Nine Months Ended September 30,2008
    
    
    2007Supplemental Disclosure of Cash Flow Information and Non Cash Financing Transactions:Cash paid for interest
    
    $
    9,459
    
    
    $
    Common stock issued for conversion of Senior Convertible Notes and accrued interest
    
    $
    52,041
    
    
    $
    Fair value of common stock issued for equity financing costs
    
    $
    
    
    
    $
    241,539Fair value of common stock issued for Durham acquisition
    
    $
    
    
    
    $
    15,562,500Beneficial conversion feature on Senior Convertible Notes
    
    $
    121,320
    
    
    $
    1,325,000Fair value of warrants issued for costs of Durham acquisition
    
    $
    
    
    
    $
    989,215Fair value of warrants issued in connection with Senior Convertible Notes included in extinguishment loss
    
    $
    626,480
    
    
    $
    Adjustment to fair value of Bridge Notes exchanged for Senior Convertible notes included in extinguishment loss
    
    $
    585,533
    
    
    $
    Intrinsic value of the conversion feature of the Bridge Notes when converted to Senior Convertible Notes recorded
as a reduction of additional paid-in capital
    
    $
    212,328
    
    
    $
    Relative fair value of warrants issued with Secured Notes
    
    $
    219,838
    
    
    $
    Reclassification of derivative liability to additional paid in capital
    
    $
    919,593
    
    
    $
    Fair value of warrants issued in connection with exchange of Senior Convertible Notes for preferred
stock included in extinguishment loss
    
    $
    106,182
    
    
    $
    Senior Convertible Notes issued for accrued interest
    
    $
    103,902
    
    
    $
    Accretion of dividend on preferred stock
    
    $
    
    
    
    $
    483Fair value of common stock issued for deferred financing costs
    
    $
    185,668
    
    
    $
    Conversion of Senior Convertible Notes to preferred stock
    
    $
    2,077,886
    
    
    $
    
 The accompanying notes are an integral part of these consolidated financial statements.




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##### 



Echo Therapeutics, Inc.
(Formerly Sontra Medical Corporation)
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Period Ended September 30, 2008 (Unaudited)
 (1) ORGANIZATION, BASIS OF PRESENTATION AND GOING CONCERN
 Organization and Basis of Presentation




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(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  Use of Estimates
  Intangible Assets and Other Long-Lived Assets
  Accounting for the Impairment and Disposal of Long-Lived
Assets
   Share-Based Payments
   Derivative Instruments




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Reclassifications
  Recent Accounting Pronouncements
 Business
Combinations
 Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133.
 (3) ACQUISITION OF DURHAM PHARMACEUTICALS LTD.
 , 




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##### 



(4) INTANGIBLE ASSETS
  Estimated
    
    
    
    
    
    
    AccumulatedLife
    
    
    Cost
    
    
    Amortization
    
    
    NetContract related intangible asset:Cato Research discounted contract
    
    3  years
    
    $
    355,000
    
    
    $
    123,263
    
    
    $
    231,737Technology related intangible assets:Patent for the AzoneTS-based product
candidates and formulation
    
    9  years
    
    
    1,305,000
    
    
    
    
    
    
    
    1,305,000Drug Master Files containing formulation,
clinical and safety documentation used
by the FDA
    
    9  years
    
    
    1,500,000
    
    
    
    
    
    
    
    1,500,000Two (2) in-process Durhalieve-related
pharmaceutical products
    
    9  years
    
    
    6,820,000
    
    
    
    
    
    
    
    6,820,000Total technology related intangible assets
    
    
    
    
    
    
    9,625,000
    
    
    
    
    
    
    
    9,625,000Total
    
    
    
    
    
    $
    9,980,000
    
    
    $
    123,263
    
    
    $
    9,856,737
  (5) NOTES PAYABLE
  September 30,
    
    
    December 31,2008
    
    
    2007Senior Secured Notes
    
    $
    2,209,426
    
    
    $
    Unamortized discounts
    
    
    (290,983
    )
    
    
    1,918,443
    
    
    
    Senior Convertible Notes
    
    
    318,475
    
    
    
    Unamortized discount
    
    
    (34,643
    )
    
    
    283,832
    
    
    
    Senior Promissory Bridge Notes
    
    
    
    
    
    
    1,325,000Unamortized discount
    
    
    
    
    
    
    (938,542
    )
    
    
    
    386,458Total notes payable
    
    
    2,202,275
    
    
    
    386,458Less current portion of notes payable
    
    
    1,918,443
    
    
    
    386,458Notes payable, net of current portion
    
    $
    283,832
    
    
    $
    
 2008 Senior Secured Note and Warrant Financing




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##### 








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##### 



2007 and 2008 Senior Promissory Bridge Notes and Senior Convertible Notes
      Debtors Accounting for a
Modification or Exchange of Debt Instruments




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##### 



2008 Exchange Agreement
    (6) FAIR VALUES OF ASSETS AND LIABILITIES
 Fair Value Measurements




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##### 



Nine MonthsendedSeptember 30,2008Balance as of January 1, 2008
    
    $
    Total unrealized gain included
in net loss
    
    
    17,349
    (1)Purchases, sales, issuances
and settlements
    
    
    902,244Reclassification to equity
    
    
    (919,593
    )Balance as of September 30, 2008
    
    $
    Change in unrealized gains/(losses)
relating to instruments
at the reporting date
    
    $
    
 
 (1)
    
    Included in derivative loss on the statement of operations
for the nine months ended September 30, 2008.  (7) SERIES A CONVERTIBLE PREFERRED STOCK
     (8) COMMON STOCK




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Exercise of Warrants
  Exercise of Stock Options
  Restricted Common Stock issued for Services
  (9) STOCK OPTION PLANS
     Share-Based Compensation




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##### 



2008

    
    2007Risk-free interest rate
    
    
    3.85
    %
    
    
    4.72
    %Expected dividend yield
    
    
    
    
    
    
    Expected term (employee / director grants)
    
    
    6.75 years
    
    
    6.75 yearsForfeiture rate (excluding fully vested options)
    
    
    33
    %
    
    
    38
    %Expected volatility
    
    
    152% - 157
    %
    
    
    118% - 163
    %
  Weighted-Weighted-
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateExercise
    
    
    Contractual
    
    
    IntrinsicOptions
    
    Shares
    
    
    Price
    
    
    Term
    
    
    ValueOutstanding at January 1, 2008
    
    
    4,066,271
    
    
    $
    1.99Granted
    
    
    265,000
    
    
    
    1.52Exercised
    
    
    (66,666
    )
    
    
    (1.39
    )Forfeited or expired
    
    
    (320,075
    )
    
    
    3.27Outstanding at September 30, 2008
    
    
    3,944,530
    
    
    $
    1.87
    
    
    9.01 years
    
    $
    114,750Exercisable at September 30, 2008
    
    
    2,091,609
    
    
    $
    2.05
    
    
    8.85 years
    
    $
    96,323
  Restricted Stock Grants
  Weighted-AverageGrant-DateNonvested Shares
    
    Shares
    
    
    Fair ValueNonvested at January 1, 2008
    
    
    16,875
    
    
    $
    1.77Granted
    
    
    175,000
    
    
    
    1.63Vested
    
    
    (176,875
    )
    
    
    1.63Forfeited
    
    
    (11,250
    )
    
    
    1.77Nonvested at September 30, 2008
    
    
    3,750
    
    
    $
    1.77




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##### 



(10) WARRANTS
  Number ofShares
    
    
    Exercise
    
    
    Date ofExercisable
    
    
    Price
    
    
    ExpirationIssued to investors in private placement
    
    
    212,083
    
    
    $
    15.00
    
    
    
    10/15/2008Issued to placement agent in private placement
    
    
    33,258
    
    
    $
    12.00
    
    
    
    10/15/2008Issued to investors and placement agent in private placement
    
    
    118,620
    
    
    $
    24.50
    
    
    
    12/8-10/15/2009Issued to investor in former subsidiary
    
    
    15,000
    
    
    $
    50.00
    
    
    
    2/23/2010Issued to investors and placement agent in private placement
    
    
    476,829
    
    
    $
    5.80
    
    
    
    3/16/2016Issued to investors in private placement
    
    
    611,250
    
    
    $
    0.21
    
    
    
    1/30/09Issued to investors and placement agent in private placement
    
    
    599,250
    
    
    $
    1.40
    
    
    
    6/15-7/16/2012Issued to financial advisor
    
    
    60,000
    
    
    $
    1.58
    
    
    
    7/25/2012Issued to financial advisor in connection with an acquisition
    
    
    425,000
    
    
    $
    2.18
    
    
    
    9/14/2012Issued to financial advisor
    
    
    175,013
    
    
    $
    1.48
    
    
    
    2/11/2013Issued to Senior Convertible Note holders
    
    
    849,059
    
    
    $
    1.00
    
    
    
    2/11/2013Issued to Secured Note holders
    
    
    653,728
    
    
    $
    1.94
    
    
    
    3/14/2013Issued to consultant
    
    
    25,000
    
    
    $
    2.50
    
    
    
    3/25/2010Issued to consultant
    
    
    80,000
    
    
    $
    2.50
    
    
    
    3/25/2013Issued to Senior Convertible Note holders
    
    
    153,912
    
    
    $
    1.00
    
    
    
    9/30/2013Total
    
    
    4,488,002Weighted average exercise price
    
    
    
    
    
    $
    3.29Weighted average duration in years
    
    
    
    
    
    
    
    
    
    3.17 years
 Issuances to Consultants
  Issuance of Warrants for Financings
   (11) RIGHT OF FIRST OFFER AGREEMENT




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##### 



(12) SUBSEQUENT EVENT
 Preferred Stock and Warrant Financing




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##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion of our consolidated financial condition and results of operations
should be read in conjunction with the financial statements and the related notes thereto included
in the Companys Form 10-KSB for the year ended December 31, 2007 and elsewhere in this Form 10-Q .
The matters discussed herein contain forward-looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, which involve risks and uncertainties. All statements other than statements of
historical information provided herein may be deemed to be forward-looking statements. Without
limiting the foregoing, the words believes, anticipates, plans, expects and similar
expressions are intended to identify forward-looking statements. The factors that could cause
actual future results to differ materially from current expectations include, but are not limited
to, risks related to regulatory approvals and the success of our ongoing studies, including the
efficacy of our Symphony tCGM System, the failure of future development and preliminary marketing
efforts related to our tCGM system, risks and uncertainties relating to our ability to develop,
market and sell diagnostic products based on our skin permeation platform technologies, including
the Prelude SkinPrep System, the availability of substantial additional equity or debt capital to
support our research, development and product commercialization activities, the success of our
research, development, and regulatory approval, marketing and distribution plans and strategies,
including those plans and strategies related to our tCGM System and those discussed in Risk
Factors in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2007 and
elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are
cautioned not to place undue reliance on these forward-looking statements, which reflect
managements analysis, judgment, belief or expectation only as of the date hereof. We undertake no
obligation to publicly revise these forward-looking statements to reflect events or circumstances
that arise after the date hereof.
 Overview




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##### 



Strategic Acquisition of Durham Pharmaceuticals Ltd.
    Results of Operations
  Comparison of the nine months ended September 30, 2008 and 2007
 Licensing Revenue
 Product Revenue and Cost of Product Revenue
 Research and Development Expenses




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##### 



Purchased Research and Development Expenses
 Selling, General and Administrative Expenses
 Other Income (Expense)
   Derivative Loss Accounting for Derivative Financial Instruments Indexed to, and
Potentially Settled in, a Companys Own Stock.
 Loss on Extinguishment of Debt Debtors Accounting
for a Modification or Exchange of Debt Instruments,




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Net Loss
 Comparison of the three months ended September 30, 2008 and 2007
 Licensing Revenue 
 Research and Development Expenses 
 Purchased Research and Development Expenses
 Selling, General and Administrative Expenses 
 Other Income (Expense) 




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Loss on Extinguishment of Debt
 Net Loss
 Liquidity and Capital Resources
       Preferred Stock and Warrant Financing
 2008 Exchange Agreement




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Senior Convertible Notes
      2008 Secured Note and Warrant Financing




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
    
    our ability to obtain funding from third parties, including any future collaborative
partners, on reasonable terms;
    
    our progress on research and development programs;




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
    
    the time and costs required to gain regulatory approvals;
    
    the costs of manufacturing, marketing and distributing our products, if successfully
developed and approved;
    
    the costs of filing, prosecuting and enforcing patents, patent applications, patent
claims and trademarks;
    
    the status of competing products; and
    
    the market acceptance and third-party reimbursement of our products, if successfully
developed and approved.
 Strategic Product Development Agreement with Cato Research
 Dermatology Product Candidate Agreement with Cato BioVentures
 
 Item 4T. Controls and Procedures.
 Disclosure Controls and Procedures
  Internal Control over Financial Reporting




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PART IIOTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 6. Exhibits.
  
 SIGNATURES
  ECHO THERAPEUTICS, INC.Date: November 14, 2008
    
    By:
    
    /s/ Patrick T. Mooney, M.D.
 

Patrick T. Mooney, M.D.Chief Executive Officer and Chairman of the BoardBy:
    
    /s/ Harry G. Mitchell, CPAHarry G. Mitchell, CPAChief Operating Officer, Chief Financial Officer and Treasurer




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EXHIBIT INDEX
 Exhibit No.
    
    Item.2.1
    
    Agreement and Plan of Merger, dated June 9, 2008, between Echo Therapeutics, Inc., a Minnesota
corporation, and Echo Therapeutics, Inc., a Delaware corporation, is incorporated herein by reference
to Exhibit 2.1 of the Companys Current Report on Form 8-K dated June 9, 2008.2.2
    
    Certificate of Ownership and Merger merging Echo Therapeutics, Inc., a Minnesota corporation, with and
into Echo Therapeutics, Inc., a Delaware corporation, is incorporated herein by reference to Exhibit
2.2 of the Companys Current Report on Form 8-K dated June 9, 2008.2.3
    
    Articles of Merger merging Echo Therapeutics, Inc., a Minnesota corporation, with and into Echo
Therapeutics, Inc., a Delaware corporation, is incorporated herein by reference to Exhibit 2.3 of the
Companys Current Report on Form 8-K dated June 9, 2008.3.1
    
    Certificate of Incorporation of the Company is incorporated herein by reference to Exhibit 3.1 of the
Companys Current Report on Form 8-K dated June 9, 2008.3.2
    
    Bylaws of the Company is incorporated herein by reference to Exhibit 3.2 of the Companys Current
Report on Form 8-K dated June 9, 2008.4.1
    
    Form of Warrant to Purchase Common Stock is incorporated herein by reference to Exhibit 4.1 of the
Companys Current Report on Form 8-K dated September 30, 2008.4.2
    
    Form of Warrant to Purchase Common Stock is incorporated herein by reference to Exhibit 4.1 of the
Companys Current Report on Form 8-K dated October 28, 2008.10.1
    
    Dermatology Product Candidate Right of First Offer Agreement is incorporated herein by reference to
Exhibit 10.1 of the Companys Current Report on Form 8-K dated April 25, 2008.10.2
    
    Amendment No. 1 to Registration Rights Agreement between the Company and Imperium Master Fund, Ltd. is
incorporated herein by reference to Exhibit 10.1 to the Companys Current Report on Form 8-K dated May
15, 2008.10.3
    
    Exchange Agreement by and among the Company, Platinum Long Term Growth VII, LLC and the other
Investors named therein dated as of September 30, 2008 is incorporated herein by reference to Exhibit
4.1 of the Companys Current Report on Form 8-K dated September 30, 2008.10.4
    
    Stock and Warrant Purchase Agreement by and among the Company and the Investors named therein, dated
as of October 28, 2008 is incorporated herein by reference to Exhibit 10.1 of the Companys Current
Report on Form 8-K dated October 28, 2008.31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Chief Operating Officer, Chief Financial Officer and Treasurer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Chief Operating Officer, Chief Financial Officer and Treasurer pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Certificate of Designation, Rights and Preferences of Series A Preferred Stock is incorporated herein
by reference to Exhibit 99.1 of the Companys Current Report on Form 8-K dated September 30, 2008.99.2
    
    Certificate of Designation, Rights and Preferences of Series A-1 Convertible Preferred Stock is
incorporated herein by reference to Exhibit 99.1 of the Companys Current Report on Form 8-K dated
October 28, 2008.