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Dear Fellow Echo Therapeutics Stockholders:
The June 19^th Annual Meeting of Echo Therapeutics, Inc. is fast approaching,
as is your opportunity to vote for real change at the Board level. As Echo's
stock price has hit all-time lows, we believe Echo's Board has as well. The
Board, currently led by the long-term and highly compensated interim CEO
Robert F. Doman, has unfortunately resorted to smear tactics and outrageous
claims in an attempt to preserve the status quo—and Bob Doman's position as
Executive Chairman of your Board.
DO NOT BE MISLED!
Platinum Management is the largest stockholder of Echo Therapeutics, owning
almost 20% of the outstanding shares; with so much invested in the company,
our only goal is to maximize the value of Echo stock, which will benefit ALL
stockholders. Echo's latest claim that we, as the largest stockholder in the
Company, are not interested in maximizing the value of Echo stock is baseless,
ridiculous and, in our view, reflects poorly on the Board's judgment in its
communications to stockholders. Please vote the enclosed GOLD proxy card or
GOLD voting instruction form. Do not vote Echo's white card to withhold on Bob
Doman, even as a protest vote, since that is not the same as voting for our
nominee on the GOLD card. Only your latest dated card counts and will revoke
any previously cast vote.
THE ECHO BOARD'S INTERESTS ARE CLEARLY NOT ALIGNED WITH STOCKHOLDERS
Director Stock Owned* Pct. of Purchases** 2013 Investment in
Echo Compensation Echo
Robert Doman 4,700 0.04% 1,500 $204,403 $
11,961
Vincent 28,200 0.24% 0 $85,399 $
Enright -
James Smith 22,900 0.19% 2,000 $86,299 $
29,400
William Grieco 38,200 0.32% 3,000 $88,382 $
22,779
Echo Total 94,000 0.79% 6,500 $464,483 $
64,140
Platinum 2,183,876 18.31% 1,016,288 $0 $18,600,000
Management
*exclusive of options **split adjusted basis
WHOSE NOMINEE DO YOU THINK WILL BEST REPRESENT THE INTERESTS OF ECHO
STOCKHOLDERS?
As the largest stockholder of Echo, owning almost 20% of the outstanding
shares, we are in the same position as all of you: we want to stop the
destruction of stockholder value that has occurred under this Board's
stewardship. Given the Board's misalignment of interests, we are not
surprised the current directors of Echo have presided over this massive and
continuing decline of stockholder value with a track record of highly dilutive
financings and wasteful spending. It took public action on our part to get
this Board to take even small steps to move this company forward. This Board,
including Bob Doman, seemingly never took any demonstrably positive actions to
protect stockholder interests without being prompted by Platinum, including
our August 30, 2013 letter outlining ways to unlock stockholder value. Echo's
misaligned Board, in our view, has impaired the Company's valuation and has
directly contributed to its underperformance in recent years.
ECHO IS TAKING CREDIT FOR PLATINUM'S PLAN AND IDEAS TO ENHANCE VALUE
In one of their latest letters to stockholders, Echo points to a number of
accomplishments as reasons to elect Doman to another term. But they are not
Doman's ideas. After first rejecting our August 30^th plan to stop the massive
value destruction at Echo, the Board belatedly adopted a number of our
suggested ideas and is now trying to use them as justification for
stockholders to vote for Doman! Do not be misled.
o Cutting costs – that was a Platinum idea that we think all stockholders
will agree was long overdue at Echo.
o Reaching an agreement with a Chinese Partner – that was a Platinum idea
too. In fact, we even made the introduction.
Platinum provided Echo a lifeline at a time when the Board had filed for yet
another poorly conceived financing that would have massively diluted existing
stockholders. After the prior six financings, we think stockholders have had
enough. We made a $5M investment into Echo in December 2013 at ABOVE MARKET
PRICES and, as stated above, made an important introduction to Echo in finding
them an unaffiliated, independent offshore development and investment partner,
Medical Technologies Innovation Asia, Ltd., who was also prepared to invest
$5M into Echo. Do not be misled. We ask that you reject Echo's false claims
and vote for our nominee, Shepard M. Goldberg, on the enclosed GOLD proxy card
or GOLD voting instruction form. By returning the enclosed GOLD proxy card or
GOLD voting instruction form, you will be voting for Shepard M. Goldberg and
ALL of the Company's nominees OTHER THAN Bob Doman. Do not vote Echo's white
card to withhold on Bob Doman, even as a protest vote, since that is not the
same as voting for our nominee on the GOLD card.
ECHO STOCK HAS DROPPED TO AN ALL-TIME LOW UNDER DOMAN'S LEADERSHIP AS INTERIM
CEO
On May 27, 2014, Echo stock closed at $1.58 a share—its lowest stock price
ever. The market has lost confidence in Echo and its leadership and we
believe the litany of destabilizing sell recommendations from industry
analysts that followed the last earnings call unfortunately demonstrates
this. Let's review Doman's real accomplishments since joining your Board:
o Poor Performance. Since Doman joined the Echo Board, he has presided over
a stock price decline of approximately 80%. Further, since Doman was
named interim CEO in August 2013 he has presided over a stock price
decline of approximately 34%, including a recent drop of 23% the day of
the last earnings call.
o Pay for failure. Doman and the rest of the Board were paid for the mere
filing of a CE Mark. That is neither customary nor right, especially
since the Company failed to obtain the Marking. Will they pay themselves
for the re-filing also? Doman paid himself for each extra Board meeting
in which he and the other directors participated. What did you as a
stockholder get for your money? According to management's own proxy
statement, at least 28 meetings were held in 2013.
o A failed search for a permanent CEO and failure to make the crucial
disclosure to the market that the search had been suspended. We believe
the March 27, 2014 revelation that the incredibly important search for a
CEO had been secretly suspended and was only just being restarted was a
fundamental failure by the Board in one of their most important duties as
Directors. Why was the CEO search suspended? And for how long? Why was
the truth hidden from Echo's real owners--the public shareholders—for
approximately seven months?
o Breach of contract. Doman flagrantly and repeatedly caused Echo to breach
its contractual obligations to evaluate Platinum's nominee within 3 weeks
of the candidate being nominated, forcing Platinum to initiate a law suit
to enforce the terms Doman used to induce long-time stockholder Platinum
to make a $5 million, above-market investment that kept Echo afloat.
Platinum threw Echo a lifeline, and Doman chose to burn the rope!
ECHO ISN'T TELLING YOU THE REAL STORY ABOUT OUR NOMINEE
Platinum has nominated Shepard M. Goldberg, a proven, quality director who it
has nominated before. Echo is spending a lot of money and spilling a lot of
ink trying to discredit Shepard M. Goldberg. Doman and his hired guns are
slinging a lot of mud in order to preserve the status quo at Echo. Shepard M.
Goldberg has the full confidence of Platinum, Echo's largest stockholder; and
for good reason. Our nominee has had success at human health companies
significantly larger than Echo and we are confident he will bring the same
level of commitment to the Echo Board while representing the interests of
stockholders. We urge our fellow stockholders to understand the facts as they
truly are:
o Shepard M. Goldberg has a BS in engineering from Polytechnic Institute of
NY (now NYU Polytechnic School of Engineering) and has an MBA from Adelphi
University.
o Shepard M. Goldberg has served as an independent director of two public
companies.
o We think the Echo's Board misstatements regarding Shepard M. Goldberg's
tenure at Emisphere Technologies reflect poorly on their judgment. Do not
be misled.
o Shepard M. Goldberg had many responsibilities while at Emisphere,
including the supervision of the construction and management of a
state of the art pharmaceutical laboratory. He was also in charge of
all clinical trials.
o He has relationships with and has worked with major pharmaceutical
companies, such as Lilly, Novartis and Novo Nordisk, a group that
includes some of the leading diabetes pharma companies in the world.
THE REAL FACTS ABOUT SHEPARD M. GOLDBERG
As the company's largest stockholder we've nominated a highly qualified
individual that we are confident will add significant value to the board and
will represent the interests of all stockholders. Our nominee, Shepard M.
Goldberg, has had success at human health companies significantly larger than
Echo and we are confident he will bring the same level of success to the Echo
Board. Consider:
o Shepard M. Goldberg is an accomplished businessman with a broad range of
business experiences and insights.
o Shepard M. Goldberg is an advocate for the interests of all stockholders,
and will forcefully advocate for you.
o Shepard M. Goldberg is open-minded, and will be fearless and tireless in
pursuing all options that could improve value for you as a stockholder.
o Shepard M. Goldberg intends to vote against poorly conceived dilutive
financings.
o Shepard M. Goldberg will stand against excessive compensation and
unnecessary executive perquisites.
Echo's cynical attempt to try to confuse the results are just smoke and
mirrors by the Company, which is desperate to avoid having you hold Bob Doman
accountable for his own record of failure.
PLATINUM STRONGLY RECOMMENDS THAT YOU VOTE TO ELECT ITS HIGHLY QUALIFIED
CANDIDATE, SHEPARD M. GOLDBERG, USING THE GOLD PROXY CARD. PLEASE RETURN THE
GOLD CARD TODAY!
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN!
If you have any questions or need assistance voting your shares,
please call the firm assisting us:
Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
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