PTE: Warrant Price/Patent Allowed/Litigation Dismissed
Nov 23, 2020 14:38:41 GMT
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Post by icemandios on Nov 23, 2020 14:38:41 GMT
Item 8.01. Other Information.
Warrant Repricing and Exercise
On February 14, 2020, PolarityTE, Inc. (the “Company”), issued in a public offering warrants to purchase 10,638,298 shares of its common stock (the “Warrants”). On November 19, 2020, the Company reduced the exercise price of the Warrants from $2.80 per share to $0.10 per share effective November 20, 2020.
Concurrently with the reduction of the Warrant exercise price the Company entered into a repricing letter agreement with the holders of 10,063,298 Warrants pursuant to which the Company agreed that it will not sell equity securities for a period of 30 days, except for equity securities issued under the Company’s equity incentive plans established for employees, directors, and consultants and equity securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company. The foregoing description of the repricing letter agreement is qualified in its entirety by the full text of the form of that agreement attached hereto as Exhibit 99.1.
Patent Allowance
On November 18, 2020, the US Patent and Trademark Office updated the status of the Company’s patent application 14/954,335 to “allowed – notice of allowance not yet mailed.” This patent application is related to methods of making compositions for regenerating functional skin tissue.
Litigation Update
On June 26, 2018, a class action complaint alleging violations of the Federal securities laws was filed in the United States District Court, District of Utah, by Jose Moreno against the Company and two directors of the Company, Case No. 2:18-cv-00510-JNP (the “Moreno Complaint”). On July 6, 2018, a similar complaint was filed in the same court against the same defendants by Yedid Lawi, Case No. 2:18-cv-00541-PMW (the “Lawi Complaint”). On November 28, 2018, the Court consolidated the Moreno and Lawi cases under the caption In re PolarityTE, Inc. Securities Litigation with Case No. 2:18-cv-00510 (the “Consolidated Securities Litigation”). The gravamen of the consolidated complaint in the Consolidated Securities Litigation was that defendants made statements or disseminated information to the public through reports filed with the Securities and Exchange Commission and other channels that contained material misstatements or omissions in violation of Sections 10 and 20(a) of the Exchange Act and Rule 10b-5 adopted thereunder, specifically that the defendants misrepresented the status of one of the Company’s patent applications while touting the unique nature of the Company’s technology and its effectiveness. The Company filed a motion to dismiss the consolidated complaint on June 3, 2019. Plaintiffs’ opposition to the Company’s motion to dismiss was filed on August 2, 2019, and the Company filed a reply to the opposition on September 13, 2019. Following a hearing on the Company’s motion to dismiss the Court issued an order on November 22, 2020, dismissing the complaint in the Consolidated Securities Litigation with prejudice.
In November 2018, a shareholder derivative lawsuit was filed in the United States District Court, District of Utah, with the caption Monther v. Lough, et al ., case no. 2:18-cv-00791-TC, alleging violations of the Exchange Act, breach of fiduciary duty, and unjust enrichment on the part of certain officers and directors based on the facts and circumstances recited in the Consolidated Securities Litigation. On November 26, 2018, the court issued an order staying all proceedings until after the disposition of motions to dismiss the Consolidated Securities Litigation. The shareholder derivative lawsuit remains pending and the Company intends to file a motion dismiss on the basis of the disposition of the Consolidated Securities Litigation described above.
Warrant Repricing and Exercise
On February 14, 2020, PolarityTE, Inc. (the “Company”), issued in a public offering warrants to purchase 10,638,298 shares of its common stock (the “Warrants”). On November 19, 2020, the Company reduced the exercise price of the Warrants from $2.80 per share to $0.10 per share effective November 20, 2020.
Concurrently with the reduction of the Warrant exercise price the Company entered into a repricing letter agreement with the holders of 10,063,298 Warrants pursuant to which the Company agreed that it will not sell equity securities for a period of 30 days, except for equity securities issued under the Company’s equity incentive plans established for employees, directors, and consultants and equity securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company. The foregoing description of the repricing letter agreement is qualified in its entirety by the full text of the form of that agreement attached hereto as Exhibit 99.1.
Patent Allowance
On November 18, 2020, the US Patent and Trademark Office updated the status of the Company’s patent application 14/954,335 to “allowed – notice of allowance not yet mailed.” This patent application is related to methods of making compositions for regenerating functional skin tissue.
Litigation Update
On June 26, 2018, a class action complaint alleging violations of the Federal securities laws was filed in the United States District Court, District of Utah, by Jose Moreno against the Company and two directors of the Company, Case No. 2:18-cv-00510-JNP (the “Moreno Complaint”). On July 6, 2018, a similar complaint was filed in the same court against the same defendants by Yedid Lawi, Case No. 2:18-cv-00541-PMW (the “Lawi Complaint”). On November 28, 2018, the Court consolidated the Moreno and Lawi cases under the caption In re PolarityTE, Inc. Securities Litigation with Case No. 2:18-cv-00510 (the “Consolidated Securities Litigation”). The gravamen of the consolidated complaint in the Consolidated Securities Litigation was that defendants made statements or disseminated information to the public through reports filed with the Securities and Exchange Commission and other channels that contained material misstatements or omissions in violation of Sections 10 and 20(a) of the Exchange Act and Rule 10b-5 adopted thereunder, specifically that the defendants misrepresented the status of one of the Company’s patent applications while touting the unique nature of the Company’s technology and its effectiveness. The Company filed a motion to dismiss the consolidated complaint on June 3, 2019. Plaintiffs’ opposition to the Company’s motion to dismiss was filed on August 2, 2019, and the Company filed a reply to the opposition on September 13, 2019. Following a hearing on the Company’s motion to dismiss the Court issued an order on November 22, 2020, dismissing the complaint in the Consolidated Securities Litigation with prejudice.
In November 2018, a shareholder derivative lawsuit was filed in the United States District Court, District of Utah, with the caption Monther v. Lough, et al ., case no. 2:18-cv-00791-TC, alleging violations of the Exchange Act, breach of fiduciary duty, and unjust enrichment on the part of certain officers and directors based on the facts and circumstances recited in the Consolidated Securities Litigation. On November 26, 2018, the court issued an order staying all proceedings until after the disposition of motions to dismiss the Consolidated Securities Litigation. The shareholder derivative lawsuit remains pending and the Company intends to file a motion dismiss on the basis of the disposition of the Consolidated Securities Litigation described above.
