The ECTE placement in early January 2011 was made at an enormous discount to market and included tons of warrants. Your author wondered, who were the lucky folks who were offered the units, and by whom?

Echo is headquartered in historic Franklin, MA. Franklin is best known as the birthplace of Horace Mann, the home of the famous Red Brick School, and the home of the very first public library in these United States.

The money came from 1444 miles away. A place known for retirees, sunny weather, and lots and lots of fraud. Boca Raton.

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Echo Therapeutics (ECTE):

Market Cap as of February 10, 2011:                 $190mm*
Sales for first three reported quarters of 2010:    $0.3mm
Cash at the end of the last reported Q:             $0.2mm
Debt at the end of the last reported Q:             $0.2mm
Financings since end of last reported Q:            $5.5mm
*Fully diluted taking into account the latest financings.

Humble Beginnings.

ECTE started life as lowly ChoiceTel, which IPO’d in 1997 through a bucket shop. ChoiceTel was a provider of payphones. Yes, with the explosion of cell phones, these hotshots thought payphones would be a great business.

Plymouth, Minnesota, Nov. 11 (Bloomberg) — ChoiceTel Communications Inc. sold 800,000 units at 7 in a $5.6 million initial public offering. Each unit consists of one common share and one warrant. The Plymouth, Minnesota-based provider of payphone service had expected to sell the units at 7, according to its registration statement filed with the Securities and Exchange Commission. The sale, led by Equity Securities Investments Inc, raised a total of $5.1 million after fees.

By 2002 what was left of ChoiceTel (not much) merged with a struggling Massachusetts outfit called Sontra Medical.

Sontra was founded in 1996, and licensed some ultrasonic skin permeation technology from MIT.  They manged to raise 10mm in venture funding during the boom years. Essex Woodlands Health Ventures, Vanguard Venture Partners, H & Q Healthcare Investors and H & Q Life Sciences Investors were all investors in Sontra.

But, by 2002, the company was left for dead, and instead of the big IPO dreams of all venture backed companies, Sontra ended up in the cesspool of reverse mergers. Sontra merged with the carcass of ChoiceTel, becoming SONT.

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