On December the 8th, Majesco Entertainment (NASDAQ: COOL) announced their intention to merge with the regenerative medicine business, PolarityTE Inc. When the transaction closes, Polarity will become a subsidiary of Majesco and the company will be renamed PolarityTE, Inc. CEO of Majesco, Berry Honig, will step aside, while Dr. Denver Lough will take his place. Also, Dr. Edward Swanson has been appointed as the company’s Chief Operating Officer and Director. Both doctors have spend time working in plastic and reconstructive surgery at Johns Hopkins University School of Medicine.
The company is also expected to be headquartered in Salt Lake City, Utah. The company will establish its biomedical research and development facilities and tissue manufacturing center in Salt Lake City. The change is dramatic for Majesco Entertainment, which is primarily known as a video game developer. Nonetheless, the company has experienced grave turmoil over the past few years. In August of 2015, the company downsized to just 5 employees and found a new CEO. They also became solely dedicated to mobile and downloadable titles. At the time, two new titles were announced. A Boy and His Blob was released earlier this year.
The company’s other new title, Glue, was expected to be released sometime during the summer of 2016. Obviously, that didn’t happen. Instead, Majesco will seemingly become a whole new company and one that delves into a completely different industry. Majesco has agreed to purchase 750,000 shares of common stock for $3.00 per share to accredited investors for gross proceeds of 2,250,000 dollars. While the shift is definitely drastic for Majesco, investors have reacted with glee. At the time of this writing, the stock has shifted up over 60%. With Majesco sitting dormant for quite some time, investors will likely see the shift as a new ray of hope.
As for PolarityTE, the company intends to revolutionize regenerative medicine. According to the company’s recent presentation, the PolarityTE Platform technology has proven its regenerative capacity for bone, muscle, fat, cartilage, skin, nerve, and even blood vessels. The company’s latest product is SkinTE. PolarityTE insists the technology is capable of regenerating the skin at full-thickness and with full functionality. The concept allows the patient’s skin to be fully expanded with a small biopsy. Finally, PolarityTE insists their SkinTE technology is capable of regenerating all layers of the skin, as well as hair and appendages.
According to PolarityTE, their technology has been pursued by BARDA and the DoD. At the same time, the global market for tissue regeneration and engineering is expected to grow to 56.9 billion by the year 2019. There is a market for the technology should PolarityTE be able to excel.
The merger has already been approved by the board of directors for both companies. However, it is subject to certain closing conditions, including minimum cash balance at closing, approval from Majesco stockholders, NASDAQ approval, and customary closing conditions. For additional information, be sure to check out PolarityTE’s investor presentation here.