Filing Details
- Accession Number:
- 0001654954-20-005827
- Form Type:
- 13D Filing
- Publication Date:
- 2020-05-20 15:08:44
- Filed By:
- Brauser Michael
- Company:
- Polarityte Inc. (NASDAQ:PTE)
- Filing Date:
- 2020-05-20
- SEC Url:
- 13D Filing
Ownership Summary
Please notice the below summary table is generated without human intervention and may contain errors. Please refer to the complete filing displayed below for exact figures.
Name | Sole Voting Power | Shared Voting Power | Sole Dispositive Power | Shared Dispositive Power | Aggregate Amount Owned Power | Percent of Class |
---|---|---|---|---|---|---|
Michael Brauser | 464,005 | 1,242,742 | 464,005 | 1,242,742 | 1,706,747 | 4.4% |
Michael Betsy Brauser Tenants by Entirety | 0 | 595,996 | 0 | 595,996 | 595,996 | 1.6% |
Grander Holdings, Inc. 401K | 0 | 591,945 | 0 | 591,945 | 591,945 | 1.5% |
Betsy Michael Brauser Charitable Family Foundation | 0 | 14,533 | 0 | 14,533 | 14,533 | 0.04% |
BSIG | 0 | 30,268 | 0 | 30,268 | 30,268 | 0.1% |
Greenstone Capital | 0 | 10,000 | 0 | 10,000 | 10,000 | 0.03% |
Peter T. Benz | 85,500 | 132,499 | 85,500 | 132,499 | 217,999 | 0.6 % |
BiCoastal Consulting Corp. Defined Benefit Plan | 0 | 125,499 | 0 | 125,499 | 125,499 | 0.3% |
BiCoastal Consulting Corp 401-K | 0 | 7,000 | 0 | 7,000 | 7,000 | 0.02% |
Filing
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE 13D
Under
the Securities Exchange Act of 1934
(Amendment
No. 1) *
POLARITYTE, INC. |
(Name
of Issuer) |
COMMON
STOCK, PAR VALUE $0.001 PER SHARE |
(Title
of Class of Securities) |
731094108 |
(CUSIP
Number) |
Michael
Brauser 3164 NE
31 Avenue Lighthouse
Point, FL 33064 561.757.4098
With a Copy to: Michael
K. Coran, Esq. Matthew
M. McDonald, Esq. Klehr
Harrison Harvey Branzburg LLP 1835
Market Street, Suite 1400 Philadelphia,
PA 19103 215.569.2700 |
(Name,
Address and Telephone Number of Person Authorized to Receive
Notices and Communications) |
May 18,
2020 |
(Date
of Event which Requires Filing of this Statement) |
If the
filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D,
and is filing this schedule because of 240.13d-1(e), 240.13d-1(f)
or 240.13d-1(g), check the following box X.
Note:
Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See
240.13d-7(b) for other parties to whom copies are to be
sent.
*The
remainder of this cover page shall be filled out for a reporting
person’s initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The
information required on the remainder of this cover page shall not
be deemed to be “filed” for the purpose of Section 18
of the Securities Exchange Act of 1934 (“Act”) or
otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Michael
Brauser | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
PF | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
X | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
United
States | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
464,005 | | |||
8 | SHARED
VOTING POWER | | ||
1,242,742 | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
464,005 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
1,242,742 | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
1,706,747(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[X] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
4.4%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
IN |
(1)
Includes 464,005
shares of common stock of the Issuer held by Michael Brauser, (ii)
591,945 shares of common stock held by Grander Holdings, Inc. 401K,
(iii) 595,996 shares of common stock held by Michael & Betsy
Brauser Tenants by Entirety (“TBE”), (iv) 14,533 shares
of common stock held by Betsy & Michael Brauser Charitable
Family Foundation, (v) 30,268 shares held by BSIG, LLC and (vi)
10,000 held by Greenstone Capital, LLC. Mr. Brauser is the trustee
of Grander Holdings, Inc. 401K and Chairman of Betsy & Michael
Brauser Charitable Family Foundation and in such capacities is
deemed to hold voting and dispositive power over the securities
held by such entities. Mr. Brauser is manager of BSIG, LLC and in
such capacity is deemed to hold voting and dispositive power over
the securities held by such entity. Mr. Brauser owns 90% of the
membership interests in Greenstone Capital, LLC and in such
capacity is deemed to hold indirect voting and dispositive power
over the securities held by such entity. Mr. Brauser and his wife,
Betsy Brauser, jointly hold the securities held by TBE. As a tenant
by entirety with Mrs. Brauser, Mr. Brauser holds voting and
dispositive power over the securities jointly held.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Michael
& Betsy Brauser Tenants by Entirety | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
PF | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
| ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
United
States | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
595,996 | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
595,996 | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
595,996
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
| ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
1.6%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
IN |
(1)
Mr. Brauser and his
wife, Betsy Brauser, jointly hold the securities held by Michael
& Betsy Brauser Tenants by Entirety. As a tenant by entirety
with Mrs. Brauser, Mr. Brauser holds voting and dispositive power
over the securities jointly held.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Grander
Holdings, Inc. 401K | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
WC | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
Florida | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
591,945(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
591,945(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
591,945(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[
] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
1.5%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
EP |
(1)
Mr. Brauser is the
trustee of Grander Holdings, Inc. 401K and in such capacity is
deemed to hold voting and dispositive power over the securities
held by such entity.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Betsy
& Michael Brauser Charitable Family Foundation | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
WC | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
Florida | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
14,533
(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
14,533
(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
14,533
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[ ] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.04%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
OO |
(1)
Mr. Brauser is the
Chairman of Betsy & Michael Brauser Charitable Family
Foundation and in such capacity is deemed to hold voting and
dispositive power over the securities held by such
entity.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
BSIG,
LLC | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
WC | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
Florida | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
30,268
(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
30,268
(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
30,268
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[ ] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.1%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
IV |
(1)
Michael Brauser is
the manager of BSIG, LLC and in such capacity is deemed to hold
voting and dispositive power over the securities held by such
entity.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Greenstone
Capital, LLC | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
WC | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
Florida | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
10,000
(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
10,000
(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
10,000
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[ ] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.03%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
IV |
(2)
Michael Brauser
owns 90% of the membership interests in Greenstone Capital, LLC and
in such capacity is deemed to hold indirect voting and dispositive
power over the securities held by such entity.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
Peter
T. Benz | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
PF | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
United
States | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
85,500 | | |||
8 | SHARED
VOTING POWER | | ||
132,499
(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
85,500 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
132,499
(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
217,999
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[ ] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.6 %
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
IN |
(1)
Includes (i)
125,499 shares of common stock of the Issuer held by BiCoastal
Consulting Corp. Defined Benefit Plan and (ii) 7,000 shares of
common stock held by BiCoastal Consulting Corp 401-K. Mr. Benz is
the trustee of both BiCoastal Consulting Corp. Defined Benefit Plan
and BiCoastal Consulting Corp 401-K and is deemed to hold voting
and dispositive power over the securities held by such
entities.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
BiCoastal
Consulting Corp. Defined Benefit Plan | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
PF | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
New
Jersey | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
125,499(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
125,499(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
125,499(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[ ] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.3%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
EP |
(1)
Mr. Benz is the
trustee of BiCoastal Consulting Corp. Defined Benefit Plan and in
such capacity is deemed to hold voting and dispositive power over
the securities held by such entity.
SCHEDULE 13D
CUSIP No. |
731094108 |
1 | NAMES
OF REPORTING PERSONSI.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY) | |||
BiCoastal
Consulting Corp 401-K | ||||
2 | CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP* | |||
(a) X (b) [
] | ||||
3 | SEC USE
ONLY | |||
| ||||
4 | SOURCE
OF FUNDS (See Instructions) | |||
PF | ||||
5 | CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) | |||
[
] | ||||
6 | CITIZENSHIP
OR PLACE OF ORGANIZATION | |||
New
Jersey | ||||
NUMBER
OF SHARES BENEFICIALLY OWNED
BY EACH REPORTING PERSON WITH |
7 | SOLE
VOTING POWER | | |
0 | | |||
8 | SHARED
VOTING POWER | | ||
7,000
(1) | | |||
9 | SOLE
DISPOSITIVE POWER | | ||
0 | | |||
10 | SHARED
DISPOSITIVE POWER | | ||
7,000
(1) | | |||
11 | AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON | |||
7,000
(1) | ||||
12 | CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See Instructions) | |||
[
] | ||||
13 | PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11) | |||
0.02%
(based on 38,393,289 shares issued and outstanding as of March 31,
2020) | ||||
14 | TYPE OF
REPORTING PERSON (See Instructions) | |||
OO |
(1)
Mr. Benz is the
trustee of BiCoastal Consulting Corp 401-K and in such capacity is
deemed to hold voting and dispositive power over the securities
held by such entity.
This
Amendment No. 1 amends the Schedule 13D filed on May 18, 2020 (the
“Schedule
13D”) and relates to the common stock, par value
$0.001 per share of PolarityTE, Inc., a Delaware corporation (the
“Issuer”). The address of
the principal executive office of the Issuer is 123 Wright Brothers
Drive, Salt Lake City, Utah 84116. The Schedule 13D remains in full
force and effect, except as specifically amended by this Amendment
No. 1. Capitalized terms used but not otherwise defined shall have
the respective meanings ascribed to such terms in the Schedule
13D.
Item
4.
Purpose
of Transaction
On May
18, 2020, counsel for Michael Brauser and Peter Benz (the
“Stockholders”) delivered
a letter to the board of directors (the “Board”) of the Issuer,
pursuant to Section 220 of the General Corporation Law of the State
of Delaware (the “Demand Letter”). The
purpose of the demand is to enable the Stockholders to (i)
investigate mismanagement and/or improper conduct by the Board and
officers of the Issuer; (ii) investigate whether the Board and
officers of the Issuer engaged in self-dealing, breaches of
applicable duties imposed by law and the certificate of
incorporation and bylaws of the Issuer; (iii) secure information
related to the Issuer’s financial condition and the value of
the shares of common stock of the Issuer; (iv) enable the
Stockholders to communicate with other stockholders of the Issuer;
(v) assess the suitability of the current directors to serve on the
Board; and (vi) enable the Stockholders to communicate with the
Issuer’s other stockholders on matters relating to their
interests as stockholders.
The
Demand Letter was sent by the Stockholders following notification
by the nominating and governance committee (the “Committee”) of the Board
to Mr. Brauser that the Committee would be unable to recommend Mr.
Brauser as a nominee to the Board in response to a request made by
Mr. Brauser. The Stockholders explained that, in the event that the
Committee continues to have reservations regarding the suggested
nomination of Mr. Brauser to the Board, the Stockholders
respectfully request that the Committee nominate three qualified
independent candidates mutually selected by the Committee and the
Stockholders. Such individuals would be nominated to fill the
current vacancies in Class II and Class III of the
Board.
As the
Stockholders explained in the Demand Letter, their decision to make
this request and send the Demand Letter was driven by, among other
things, the following concerns (based on the Issuer’s Form
10-K, filed March 12, 2020, and other applicable public
filings):
(1)
The decline in
trading value of the shares of common stock of the Issuer over the
past two years from a high of $38 per share in June 2018 to $0.82
per share as of May 15, 2020.
(2)
In the over eleven
months since the formation of the new management team including
David Seaburg and Richard Hague, the Stockholders have seen little
effort from the Board to cut costs and improve the value of the
shares of common stock of the Issuer. In 2019 alone, the Board
depleted Company’s cash reserves by over $45 million, from
$55,673,000 as of December 31, 2018 to $10,218,000 as of December
31, 2019.
(3)
While the Issuer
was continuing to burn cash throughout 2019, the Board did not act
to improve costs associated with its workforce and management. For
example, the Issuer had 156 full time employees as of December 31,
2018 and 153 full time employees and 4 part time employees as of
December 31, 2019. Furthermore, Messrs. Seaburg and Hague were
awarded over $7.6 million in compensation during 2019, constituting
over 10% of the Issuer’s market capitalization at year
end.
(4)
Despite incurring
research and development expenses of approximately $40 million
since November 1, 2017, the Issuer has not reported meaningful
progress with research and development projects. OsteoTE has not
advanced per the Issuer’s original guidance from 2018 and
other pipeline assets advertised during 2018 and 2019 have been
removed from the pipeline chart, indicating a deficiency of
meaningful progress. Meanwhile, during the same period, the
Issuer’s general and administrative expenses were
approximately $125 million, vastly outstripping the amount spent on
research and development.
(5)
The Issuer’s
lead asset, SkinTE, generated less than $2.5 million in revenue
during 2019 despite the Issuer’s expenditures of
approximately $17 million in sales and marketing, an increase of
over $10 million from 2018.
(6)
In February 2020,
the Board approved a highly dilutive financing at over a 25%
discount to the previous closing price of the shares of common
stock of the Issuer, an underwritten offering of 10,638,298 shares
and warrants to purchase an additional 10,638,298 shares. Following
the dilutive February 2020 share issuance, trading value of the
shares continued to fall from over $4.00 per share in January 2020
to their current value of below $1.00 per share. Share count, and
the attendant dilution, has nearly doubled in the past two years
from 21.5 million on July 31, 2018 to 38.4 million per the
Issuer’s 10-Q filed on May 11, 2020.
(7)
Following the
dilutive February 2020 share issuance, in April 2020 (in the middle
of the Covid-19 pandemic and associated economic downturn) the
Board awarded current management with approximately 1.4 million
additional shares of common stock of the Issuer as bonus
compensation and equity incentives as well as cash bonuses to Mr.
Hague and Cameron Hoyler.
(8)
It is not evident
that the Board investigated and evaluated strategic alternatives to
maximize value for all stockholders in lieu of the dilutive
February 2020 share issuance, including the possibility of a merger
or acquisition involving the Issuer.
(9)
It is unclear what
Chief Executive Officer search, if any, was conducted by the Board
prior to Mr. Seaburg’s appointment to the position. Mr.
Seaburg has a sales and trading background, which is not the
typical science-based background for an executive running a public
biotechnology company moving toward commercialization. The
Stockholders note that Mr. Seaburg spent over 20 years working at a
company affiliated with the Chairman of the Board, which may
account for his appointment as Chief Executive Officer as opposed
to a more qualified candidate with knowledge of the Issuer’s
business and industry.
The
Stockholders believe they have the right to obtain additional facts
to evaluate the Board’s actions and strategic direction of
the Issuer relating to the above concerns. The Stockholders
therefore requested that the books and records identified in the
Demand Letter be made available to certain of its
advisors.
[Signatures
on following page]
Signature
After
reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true,
complete and correct.
Dated:
May 20, 2020
| /s/ Michael
Brauser Michael
Brauser, individually BETSY
& MICHAEL BRAUSER TENANTS BY ENTIRETY By: /s/ Michael
Brauser Name:
Michael Brauser By: /s/ Betsy
Brauser Name:
Betsy Brauser GRANDER
HOLDINGS, INC. 401K By: /s/ Michael
Brauser Name:
Michael Brauser Title:
Trustee BETSY
& MICHAEL BRAUSER CHARITABLE FAMILY FOUNDATION By:
/s/ Michael
Brauser Name:
Michael Brauser Title:
Director BSIG,
LLC By:
/s/ Michael
Brauser Name:
Michael Brauser Title:
Manager GREENSTONE CAPITAL,
LLC By:
/s/ Benjamin
Brauser Name:
Benjamin Brauser Title:
Manager /s/ Peter T.
Benz Peter
T. Benz, individually BICOASTAL
CONSULTING CORP. DEFINED BENEFIT PLAN By: /s/ Peter T.
Benz Name:
Peter T. Benz Title:
Trustee BICOASTAL
CONSULTING CORP 401-K By: /s/ Peter T.
Benz Name:
Peter T. Benz Title:
Trustee |
The
original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the
statement is signed on behalf of a person by his authorized
representative (other than an executive officer or general partner
of this filing person), evidence of the representative’s
authority to sign on behalf of such person shall be filed with the
statement, provided, however, that a power of attorney for this
purpose which is already on file with the Commission may be
incorporated by reference. The name and any title of each person
who signs the statement shall be typed or printed beneath his
signature.
Attention: Intentional misstatements or omissions of fact
constitute Federal criminal violations (See 18 U.S.C.
1001).