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 ¨
*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/A
CUSIP No.
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731094108
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Page 2 of 5 Pages
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1
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NAME OF REPORTING
PERSON
I.R.S.
IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
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Denver Lough
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2
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CHECK THE APPROPRIATE BOX IF
A MEMBER OF A GROUP (SEE INSTRUCTIONS)
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(a)
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o
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(b)
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o
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3
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SEC USE ONLY
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4
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SOURCE OF FUNDS (SEE INSTRUCTIONS)
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OO
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5
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e)
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o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION
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United States
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NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
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7
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SOLE VOTING POWER
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8,936,719(1)
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8
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SHARED VOTING POWER
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9
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SOLE DISPOSITIVE POWER
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8,936,719(1)
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10
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SHARED DISPOSITIVE POWER
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11
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AGGREGATE AMOUNT BENEFICIALLY
OWNED BY EACH REPORTING PERSON
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8,936,719(1)
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12
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CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (11) EXCLUDES CERTAIN SHARES (see(see INSTRUCTIONS)
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x
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(SEE
INSTRUCTIONS) See footnote (2)
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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34.6%(3)
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14
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TYPE OF REPORTING PERSON
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IN
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Page 3 of 7
Footnotes to Schedule 13D/A Amendment No.
3 Table
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(1)
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This figure includes: (i)
7,050,000 shares of common stock; (ii) 1,000,000 shares of common stock issuable upon
exercise of a stock option issued under the Issuer’s 2017 Equity Incentive Plan;
(iii) 400,000 shares of common stock issuable upon exercise of a stock option issued
under the Issuer’s 2017 Equity Incentive Plan; (iv) 195,000 shares of common stock
issuable upon exercise of a stock option issued under the Issuer’s 2017 Equity
Incentive Plan (v) 105,000 shares of common stock from a restricted share award granted
September 20, 2018; and (vi) 200,000 shares of common stock from a restricted share award
granted August 26, 2019; and (vii) with consideration of those shares withheld for tax
withholding purposes to date which include 13,281 shares. The Reporting Person is currently
in dispute with the Issuer related to his share awards which include RSUs (Common Stock)
and stock options previously awarded to the Reporting Person during his activities as
a Director and Officer of the Company.
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(2)
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The
figure 8,936,719 does not include the 536,954 shares of common stock held by certain
other stockholders of the Issuer who granted an irrevocable proxy to the Reporting Person
to vote such shares subject to certain limitations, pursuant to exchange agreements between
the Issuer and such stockholders. Addition of the 536,954 irrevocable proxy shares
to the Reporting Person’s sole voting power would result in voting power of 9,473,673
shares of the Issuer’s common stock, or 37% of the Issuer’s issued and outstanding
shares of common stock
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(3)
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This calculation is based
on 25,824,862 shares of common stock of the Issuer outstanding as of August 2, 2019,
as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2019, filed with the SEC on August 8, 2019.
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Item 1.
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Security and Issuer.
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This Amendment No.3
to Schedule 13D/A (“Schedule 13D”) relates to common stock, $.001 par value per share (the “Common Stock”),
of PolarityTE, Inc., a Delaware corporation (the “Issuer”), whose principal executive offices are located at: 123
Wright Brothers Drive, Salt Lake City, UT 84116.
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Item 2.
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Identity and Background.
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(a)
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This Schedule 13D is filed by
Denver Lough who is referred to herein as the “Reporting Person.”
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(b)
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The Reporting Person’s
business address is 8 East Broadway Suite 320, Salt Lake City, UT 84111.
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(c)
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Denver Lough was the Chairman
of the Board, President, Chief Executive Officer and Chief R&D Officer of the Issuer
until August 26, 2019 but is no longer with the Company/Issuer at this time.
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(d)
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During the last five years,
the Reporting Person has not been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors).
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(e)
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During the last five years, the Reporting Persons have not been a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violations with respect to such laws.
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(f)
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United States of America/Utah.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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On August 26, 2019,
the Reporting Person was granted a restricted share award covering 200,000 shares of common stock, which were awarded under the
Company’s 2019 Equity Incentive Plan. The restricted share award vests in monthly installments for eighteen (18) months
beginning on October 1, 2019.
On September 20,
2018, the Reporting Person was granted a restricted share award covering 105,000 shares of common stock and a stock option to
acquire 195,000 shares of common stock, which were awarded under the Company’s 2017 Equity Incentive Plan. The restricted
share award vests in four equal installments every six months beginning on the date six months following the grant date. On March
20, 2019, 26,250 shares of common stock vested under the restricted share award, of which 8,206 shares were retained by the issuer
to cover withholding taxes associated with the vesting of the restricted share award. The aforementioned stock option award vests
monthly over twenty-four (24) months.
Page 4
of 7
On March 6, 2018, Reporting
Person was granted an irrevocable proxy to vote 797,296 shares of common stock which were held by other stockholders of the Issuer
subject to certain limitations, pursuant to exchange agreements between the Issuer and such stockholders. The irrevocable proxy
terminates upon assignment or transfer of the underlying shares. As of March 20, 2019, the proxy right has terminated with respect
to 260,342 shares, so that 536,954 shares remain subject to the proxy right.
400,000 shares
of the Reporting Person’s common stock represent shares issuable pursuant to option grants in November 2017, under the Issuer’s
2017 Equity Incentive Plan. 1,000,000 shares of the Reporting Person’s common stock represent shares issuable pursuant to
option grants in November 2016, under the Issuer’s 2017 Equity Incentive Plan. The Awards were granted to the Reporting
Person in connection with his appointment and service as an executive officer of the Issuer, and vest monthly over twenty-four
(24) months. 7,050,000 shares of the Reporting Person’s common stock were issued following conversion by the Reporting Person
of the Issuer’s Series E Convertible Preferred Stock, which shares of Series E Convertible Preferred Stock were issued pursuant
to that certain Agreement and Plan of Reorganization, dated December 1, 2016, by and between the Issuer, the Reporting Person,
Majesco Acquisition Corp., a Nevada corporation and wholly owned subsidiary of Issuer, and PolarityTE, Inc., a Nevada Corporation,
pursuant to which Issuer acquired PolarityTE, Inc., a Nevada Corporation, which was 100% owned by the Reporting Person prior to
the merger.
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Item 4.
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Purpose of Transaction.
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All the Issuer’s securities owned
by the Reporting Person have been acquired for investment purposes only. Except as set forth above, the Reporting Person has no
present plans or proposals that relate to or would result in any of the actions required to be described in subsections (a) through
(j) of Item 4 of Schedule 13D. The Reporting Person may, at any time, review or reconsider their positions with respect to the
Issuer and formulate plans or proposals with respect to any of such matters.
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Item 5.
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Interest in Securities of the Issuer.
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(a) Denver
Lough beneficially owns an aggregate of 8,936,719 shares of the Issuer’s common stock, or 34.6% of the Issuer’s issued
and outstanding shares of common stock. This calculation is based on 25,824,862 shares of common stock of the Issuer outstanding
as of August 2, 2019, as reported in the Issuer’s Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2019, filed with the SEC on August 8, 2019. This beneficial ownership represents: (i) 7,050,000 shares of common stock; (ii) 1,000,000
shares of common stock issuable upon exercise of a stock option issued under the Issuer’s 2017 Equity Incentive Plan; (iii)
400,000 shares of common stock issuable upon exercise of a stock option issued under the Issuer’s 2017 Equity Incentive
Plan; (iv) 195,000 shares of common stock issuable upon exercise of a stock option issued under the Issuer’s 2017 Equity
Incentive Plan (v) 105,000 shares of common stock from a restricted share award granted September 20, 2018; and (vi) 200,000 shares
of common stock from a restricted share award granted August 26, 2019; and (vii) with consideration of those shares withheld for
tax withholding purposes to date which include 13,281 shares. Not included in this figure are the 536,954 shares of common stock
held by certain other stockholders of the Issuer who granted an irrevocable proxy to the Reporting Person to vote such shares
subject to certain limitations, pursuant to exchange agreements between the Issuer and such stockholders. The Reporting Person
disclaims any pecuniary interest in the 536,954 shares of common stock held by certain other stockholders of the Issuer who granted
an irrevocable proxy to the Reporting Person to vote such shares.
(b) Denver
Lough may be deemed to hold sole voting power over 8,936,719 shares of the Issuer’s common stock, or 34.6% of the Issuer’s
issued and outstanding shares of common stock, sole dispositive power over 8,936,719 shares of common stock (2) and shared voting
and dispositive power over 0 shares of common stock. Not included in these figures are the 536,954 shares of common stock held
by certain other stockholders of the Issuer who granted an irrevocable proxy to the Reporting Person to vote such shares subject
to certain limitations, pursuant to exchange agreements between the Issuer and such stockholders. The Reporting Person disclaims
any pecuniary interest in the 536,954 shares of common stock held by certain other stockholders of the Issuer who granted an irrevocable
proxy to the Reporting Person to vote such shares. Addition of the 536,954 irrevocable proxy shares to the Reporting Person’s
solve voting power results in voting power of 9,473,673 shares of the Issuer’s common stock, or 37% of the Issuer’s
issued and outstanding shares of common stock
Page 5 of 7
(c) On
August 26, 2019, the Reporting Person was granted a restricted share award covering 200,000 shares of common stock, which were
awarded under the Company’s 2019 Equity Incentive Plan. The restricted share award vests in monthly installments for eighteen
(18) months beginning on October 1, 2019.
On October 1, 2019,
11,111 shares vested and the Issuer retained 839 shares for tax withholdings. The Reporting Person recognized an insufficient
withholding and subsequently contacted the Issuer’s broker in order to correct the withholding error. On October 4, 2019
4,236 shares were retained for appropriate tax withholdings, for a total of 5,075 shares withheld from the 11,111 RSU shares vested.
The Reporting Person
is currently in a dispute with the Issuer (The Company) over the RSUs (Common Stock) and stock options previously awarded to the
Reporting Person, during his activities as a Director and Officer of the Company.
To date, the Reporting
Person has not sold any of the Issuer’s securities provided and/or awarded since the Company’s inception except for
the 13,281 shares which were retained by the Issuer for tax withholdings and sold by the Issuer’s broker and subsequently
disclosed via public SEC Form-4 filings.
(d) To
the best knowledge of the Reporting Person, no person other than the Reporting Person has the right to receive, or the power to
direct the receipt of, dividends from, or proceeds from the sale of, the 8,936,719 shares of common stock for which Reporting
Person has sole dispositive power. Reporting Person does not have the right to receive, or the power to direct the receipt of,
dividends from, or proceeds from the sale of, the 536,954 shares of common stock which are held by certain other stockholders
of the Issuer that granted an irrevocable proxy to the Reporting Person to vote such shares subject to certain limitations, pursuant
to exchange agreements between the Issuer and such stockholders.
(e) Not
applicable.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
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On March 6, 2018, Reporting Person
was granted an irrevocable proxy to vote 797,296 shares of common stock which were held by other stockholders of the Issuer subject
to certain limitations, pursuant to exchange agreements between the Issuer and such stockholders. As of March 20, 2019, the proxy
right has terminated with respect to 260,342 shares, so that 536,954 shares remain subject to the proxy right as to the best of
the knowledge of Reporting Person at this time.
On August 21, 2019, the Reporting Person
was presented with “Settlement Terms” by acting agents of the Issuer (the Company) as to which a handwritten set of
terms were presented including:
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(i)
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Voting Agreement—which
states, “Lough agrees that for the period payments are made under paragraph 1,
he will not vote his shares against any proposal or matter submitted to the shareholders
for approval that is recommended by a majority of the board for approval of the shareholders,
or vote his shares for any approval or matter that a majority of the board recommends
that the shareholders not approve, except to the extent that the action in question would
disproportionally negatively effect Lough.”
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(ii)
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Lock-up—which states,
“In connection with any future financing by Polarity connected with or through
an investment banking firm, Lough will sign and deliver any lock-up agreement requested
by the investment banking firm that is the same lock-up agreement signed and delivered
by the other directors of Polarity. There will otherwise be no restraint on Lough’s
ability to leverage, margin, or loan his shares.”
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Page 6 of 7
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(iii)
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Shareholder Rights Plan—which
states, “Under any shareholder rights plan Lough will not be subject to any triggering
event that is different from its application to any other shareholders. To the extent
that any additional shares are issued, Lough will receive equal rights on a pro-rata
basis.”
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As previously stated, the Reporting
Person is currently in dispute with the Issuer over the RSUs (Common Stock) and stock options awarded to the Reporting Person
during his activities as a Director and Officer of the Company. Efforts to amicably resolve this dispute are ongoing.
The Reporting Person also understands
that the Issuer is in the process of registering and removing any restrictions on the prior shares awarded to him, which are herein
referenced within this Schedule 13D/A (Amendment #3).
Except as disclosed herein, the Reporting
Person is not aware of any contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting
Person and any other person with respect to the shares.
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Item 7.
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Material to be Filed as Exhibits.
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Exhibit No. 99.1
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Reporting Person’s SC 13D (Initial Schedule
13D) February 14, 2018 (Incorporated by Reference)
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Exhibit No. 99.2
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Reporting Person’s SC 13D/A (Amendment No. 1) March
19, 2018 (Incorporated by Reference)
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Exhibit No. 99.3
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Reporting Person’s SC 13D/A (Amendment No. 2) March
21, 2019 (Incorporated by Reference)
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Page 7 of 7
Signatures
After reasonable inquiry and to the
best of the knowledge and belief of the undersigned, each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: 10/15/2019
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By:
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/s/
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Name
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Denver Lough
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Title
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Individual
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