MTIA absence for additional funding does not bode very well for ECTE. It may very well sink the ship. Based on SEC filings and what actual work MTIA has performed in their labs they have invested in the vicinity of $10M. One has to ask themselves why would they walk away from the funding they were going give ECTE just last month.
One would be trust and and an open business relationship from the board members and acting CEO of ECTE. It could be very well that MTIA felt they were deceived by ECTE and rightfully so when MTIA(or Affliate) gave ECTE a substantial bridge loan so as ECTE can go forward until financing can be completed. However within a day or two after they received the funds from MTIA (or affiliate)the Besser group filed a suit against ECTE. Was ECTE aware of a claim that was going to be filed and did not inform MTIA? Was it just a coincident? Only ECTE knows, however if MTIA has a reason to second guess and not trust ECTE they have a very good cause. A good portion of that money had to pay for the legal fees which were in the six figures instead of working capital. If it was me I sure would have some doubts in trust going forward.
Second possible reason that MTIA which is speculation on my part is that possibly after getting second opinions MTIA now believes that under the current ECTE management they do not have the knowledge or expertise to develop a CGM that will meet the required standards and cutting their losses. On the flip side is that MTIA wants to have more control, have a major presence on the board,and be the lead on the technology and ECTE rejected such an overture knowing they would be all dismissed from ECTE.
What is not speculation and should be shocking to all shareholders is that ECTE held back material information that should have been reported to the shareholders as to why MTIA had not gone forward with the clinical trials. I have been told that one of the reasons MTIA had not gone to clinical trials with the CGM is because the CGM was not giving consistent 24 hour readings.It was under my impression that on one of Scott's presentation that he stated that they were getting consistent readings and showed charts to that effect which were consistent with DXCM readings.Was those readings a fair sample size? Several shareholders had asked the previous CEO Scott Hollander as to why their was no announcement as to why the clinical trials did not start and as everyone knows the company never released any news regarding that matter. The results of the internal testing was obviously hidden to the shareholders which as of today even the new management still has not disclosed to all the shareholders these findings. It is also hard to believe that no other shareholder as for example another group who was willing to go forward with a funding package to Echo was not made aware of the testing results. Now is that leveling the playing field for everyone?
The sad part is that ECTE may have the technology for a non evasive CGM however under previous management it failed and the present management does not have any expertise or experience to have that technology result in a workable CGM that will meet the required standards.
Echo is fighting for their lives to keep the doors open perhaps they will also be more open to the shareholders if they do succeed in raising sufficient capital to go forward. Yes, its a big IF but anything is possible.
Honestly, I wish ECTE all the success because it will be a great comfort to millions of people in need if they do succeed with a non evasive CGM.
