SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action case was filed on behalf of purchasers of PolarityTE, Inc. (NASDAQ:COOL) securities between March 31, 2017 and June 22, 2018 (the “Class Period”). This action was filed in the U.S. District Court for the District of Utah, is captioned Moreno v. PolarityTE, Inc., No. 2:18-cv-00510, and is assigned to Judge Parrish.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased PolarityTE securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff or have questions concerning your rights, please contact Dave Walton of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions must be filed with the court no later than 60 days from June 27, 2018.
The complaint charges PolarityTE and certain of its officers and directors with violations of the Securities Exchange Act of 1934 by issuing materially false and misleading statements and/or failing to disclose adverse facts about the Company’s business, operations, and prospects, including information about the status of patent application 14/954,335 at the time it was acquired by the Company on April 7, 2017 and the months following, and the updated status of patent application 14/954,335 after its June 4, 2018 final rejection by the U.S. Patent & Trademark Office (“USPTO”). On April 7, 2017, the Company announced the closing of a transaction pursuant to which Polarity NV became a wholly owned subsidiary of PolarityTE. Polarity NV was the owner of a novel regenerative medicine and tissue engineering platform developed by defendant Denver Lough, the Company’s CEO, Chief Scientific Officer and Chairman of the Board, under patent application 14/954,335, “Methods for Development and Use of Minimally Polarized Function Cell Micro-Aggregate Units in Tissue Applications Using LGR4, LGR5 and LGR6 Expressing Epithelial Stem Cells.” In connection with the transaction, the Company issued Lough 7,050 shares of Series E Convertible Preferred Stock convertible into 7,050,000 shares of the Company’s common stock, or 40.95% of the Company’s issued and outstanding shares. As a result of this adverse material information being concealed from the market, the price of PolarityTE shares was artificially inflated during the Class Period to an intraday high of more than $40 per share.
On June 25, 2018, Citron Research issued a report detailing the Company’s track record of material misrepresentations, misstatements and omissions pertaining to the status of patent application 14/954,335. The Citron report noted that as far back as March 31, 2017, the USPTO had notified the Company of its non-final rejection of patent application 14/954,335. The Citron report highlighted the Company's subsequent failure to disclose the patent’s non-final rejection status and its continued representation of the technology linked to the patent in a positive light. The report also disclosed that the USPTO had issued a final rejection of the patent on June 4, 2018, which the Company also failed to disclose. On this news, the price of PolarityTE stock fell over 31% to close at $26.41 per share on June 26, 2018.
Robbins Geller is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.