Echo Therapeutics, Inc. (NasdaqCM:ECTE) announced that it has entered into a securities purchase agreement for a private placement of senior secured convertible notes and warrants for gross proceeds of up to $4,465,000 on January 29, 2016. The notes carried an interest rate of 10% compounded monthly. The company has the right to redeem the notes under certain circumstances. The transaction will include participation from certain institutional and other accredited investors. The transaction will take place in two tranches. The notes are convertible into shares of the company's common stock at a price of $1.50 per share and will mature at 12 months from the date of issuance. After the payment of the agent fees and other expenses, the net proceeds from the transaction will be $4,850,000. The securities issued are pursuant to Regulation D. The minimum investment accepted from any investor is $50,000. The company will pay $5,000 to the investor as fees and disbursements of legal counsel in connection with registration, filing or qualification.

On the same date, the company received $1,107,000 as part of the first tranche from 15 investors. The second tranche closing of $3,358,000 is subject to shareholder approval. Certain previously issued short-term bridge notes were surrendered as payment of the initial closing purchase price for the transaction. As part of the first tranche closing, the company issued five-year warrants to purchase up to 1,191,333 shares of its common stock at $1.50 per share. In connection with the second closing, warrants, with a one and a half year life, will be issued to purchase up to 2,238,667 shares at $1.50 per share.