Asfiled with the Securities and Exchange Commission on January 30, 2017

RegistrationNo. 333-

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORMS-1

REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT OF 1933

POLARITYTE,INC.

(Exactname of registrant as specified in its charter)

4041-THadley Road

S.Plainfield, New Jersey 07080

Telephone:(732) 225-8910

(Address,including zip code, and telephone number, including area code, of registrant’s principal executive offices)

DenverLough

ChiefExecutive Officer

PolarityTE,Inc.

4041-THadley Road

S.Plainfield, New Jersey 07080

Telephone:(732) 225-8910

(Name,address, including zip code, and telephone number, including area code, of agent for service)

Witha copy to:

HarveyKesner, Esq.

SichenziaRoss Ference Kesner LLP

61Broadway, 32^nd Floor

NewYork, NY 10006

(212)930-9700

Approximatedate of commencement of proposed sale to the public:

Assoon as practicable after this Registration Statement is declared effective.

Ifany of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933, check the following box: [X]

Ifthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, pleasecheck the following box and list the Securities Act registration statement number of the earlier effective registration statementfor the same offering.[  ]

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.[  ]

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering.[  ]

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smallerreporting company” in Rule 12b-2 of the Exchange Act.

CALCULATIONOF REGISTRATION FEE

TheRegistrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date untilthe Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter becomeeffective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shallbecome effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

Theinformation in this prospectus is not complete and may be changed. These securities may not be sold until the registration statementfiled with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell and is not solicitingan offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

759,333Shares of Common Stock

Weare registering an aggregate of 759,333 shares (the “Resale Shares”) of common stock, $0.001 par value per share (the“Common Stock”) of PolarityTE, Inc. (referred to herein as “we”, “us”, “our”,“Polarity”, “Registrant”, or the “Company”) for resale by certain of our stockholders identifiedin this prospectus (the “Selling Stockholders”). Please see “Selling Stockholders” beginning at page *.

TheResale Shares may be sold by the Selling Stockholders to or through underwriters or dealers, directly to purchasers or throughagents designated from time to time. For additional information regarding the methods of sale you should refer to the sectionentitled “Plan of Distribution” in this Prospectus.

OurCommon Stock is presently quoted on The NASDAQ Capital Market (“NASDAQ”) under the symbol “COOL”. On January23, 2017, the last reported sale price of our Common Stock as reported on NASDAQ was $3.50 per share.

Ourbusiness and an investment in our securities involve a high degree of risk. See “Risk Factors” beginning on page *of this prospectus for a discussion of information that you should consider before investing in our securities.

Neitherthe Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities ordetermined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Thedate of this prospectus is                       ,2017

TABLEOF CONTENTS

Youshould rely only on the information contained in this prospectus or in any free writing prospectus that we may specifically authorizeto be delivered or made available to you. We have not authorized anyone to provide you with any information other than that containedin this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. We take no responsibilityfor, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus mayonly be used where it is legal to offer and sell our securities. The information in this prospectus is accurate only as of thedate of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financialcondition, results of operations and prospects may have changed since that date. We are not making an offer of these securitiesin any jurisdiction where the offer is not permitted.

PROSPECTUSSUMMARY

Thissummary highlights information contained elsewhere in this prospectus and does not contain all of the information that you shouldconsider in making your investment decision. Before investing in our Common Stock, you should carefully read this entire prospectus,including our financial statements and the related notes and the information set forth under the headings “Risk Factors”and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in each case includedelsewhere in this prospectus.

Unlessthe context otherwise requires, references to “we,” “our,” “us,” “Polarity” orthe “Company” in this prospectus mean PolarityTE, Inc., f/k/a Majesco Entertainment Company, a Delaware corporation,on a consolidated basis with its wholly-owned subsidiaries, as applicable.

POLARITYTE,INC.

CorporateBackground

TheCompany was incorporated in 2004 in the state of Delaware under the name Majesco Holdings Inc. (formerly ConnectivCorp). As aresult of a merger, Majesco Sales Inc. became a wholly-owned subsidiary and the sole operating business of the Company, whichchanged its name to Majesco Entertainment Company. Effective January 11, 2017, the Company changed its name to “PolarityTE,Inc.” from “Majesco Entertainment Company.”

Ourprincipal executive offices are located at 4041-T Hadley Road, South Plainfield, NJ 07080 and our telephone number is (732) 225-8910.Our web site address is http://www.majescoent.com/.

RecentDevelopments

Thefollowing presents an overview of our recent announcement of an Agreement and Plan of Reorganization to which we are a party.These items are subject to the risks and uncertainties relating to our business described under “Risk Factors” andelsewhere in this prospectus.

Agreementand Plan of Reorganization

OnDecember 1, 2016 we entered into an Agreement and Plan of Reorganization (the “Agreement”), as amended on December16, 2016, with Majesco Acquisition Corp., a Nevada corporation and our wholly-owned subsidiary, PolarityTE, Inc., a Nevada corporation(“PolarityTE NV”) and Dr. Denver Lough, the owner of 100% of the issued and outstanding shares of capital stock ofPolarityTE NV (the “Seller”).

Uponclosing of the Merger, the Seller will be issued shares of our newly authorized Series E Preferred Stock convertible into an aggregateof 7,050,000 shares of our Common Stock (the “Merger Consideration” and such transaction, the “Merger”),expected to constitute approximately 50% of the issued and outstanding Common Stock on a fully diluted basis, at closing. Theclosing of the Merger is subject to the satisfaction of certain closing conditions, including approval of the stockholders ofthe Company in accordance the Delaware General Corporation Law and NASDAQ Listing Rules and a minimum cash balance available tothe Company. Until converted, each share of Series E Preferred Stock is entitled to two votes for every share of Common Stockinto which it is convertible on any matter submitted for a vote of stockholders.

NameChange

OnJanuary 9, 2017, we filed a Certificate of Amendment to our Restated Certificate of Incorporation with the Secretary of Stateof the State of Delaware in order to change our name to “PolarityTE, Inc.” from “Majesco Entertainment Company”effective on January 10, 2017. The name change became effective with The NASDAQ Capital Market, or NASDAQ, at the open of businesson January 11, 2017.

Overview

Weare a technology company which has developed, marketed, published and distributed software through online platforms. We developapplications for gaming on computers, handheld devices and game consoles. We have had commercial successes (Zumba Fitness) whichhave not been replicated and in furtherance of seeking to diversify, on December 1, 2016 we entered into the Agreement to acquirethe patents, know-how and trade secrets of PolarityTE NV. PolarityTE NV is the owner of patent applications and know-how relatedto regenerative medicine and tissue engineering, as well as software applications used in diagnosis and treatment related to regenerativemedicine. PolarityTE NV seeks to develop and obtain regulatory approval for technology that will utilize a patient’s owntissue substrates for the regeneration of skin, bone, muscle, cartilage, fat, blood vessels and nerves.

ReverseStock-Split

OnJuly 27, 2016, the Company filed a certificate of amendment to its Restated Certificate of Incorporation with the Secretary ofState of the State of Delaware to effectuate a reverse stock split of the Company’s issued and outstanding Common Stockon a one for six basis. The reverse stock split became effective with NASDAQ at the open of business on August 1, 2016.

AllCommon Stock and per share amounts have been retroactively restated to give effect to the reverse stock split.

Summaryof the Offering

DecemberPrivate Placement

OnDecember 16, 2016, we completed a private placement (the “Private Placement”) of securities pursuant to which we soldthe Resale Shares to the Selling Stockholders at a price of $3.00 per share for total gross proceeds to us of $2,278,001.

Inconnection with the Private Placement, we entered into a Registration Rights Agreement with the Selling Stockholders pursuantto which we have agreed to file a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”)covering the Resale Shares no later than 45 calendar days from the date of the final closing of the Private Placement. We haveagreed to use commercially reasonable efforts to ensure that such registration statement is declared effective within 120 calendardays after the final closing of the Private Placement.

Throughoutthis Prospectus, when we refer to the shares of our Common Stock, the offer and sale of which are being registered on behalf ofthe Selling Stockholders, we are referring to the Resale Shares that we agreed to register pursuant to the Registration RightsAgreement. When we refer to the Selling Stockholders in this Prospectus, we are referring to the holders of the Resale Sharesand, as applicable, any donees, pledgees, transferees or other successors-in-interest selling shares received after the date ofthis Prospectus from the holders of the Resale Securities as a gift or other transfer for no consideration.

RISKFACTORS

Anyinvestment in our Common Stock involves a high degree of risk. Investors should carefully consider the risks described below andall of the information contained in this prospectus before deciding whether to purchase our Common Stock. Our business, financialcondition and results of operations could be materially adversely affected by these risks if any of them actually occur. Thisprospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materiallyfrom those anticipated in these forward-looking statements as a result of certain factors, including the risks we face as describedbelow and elsewhere in this prospectus.

RiskRelated to Our Business

Ourfinancial resources are limited and we will need to raise additional capital in the future to continue our business.

Wedo not expect to generate the level of revenues going forward that we have achieved in prior years from our video game business.This significantly reduced revenue will impact our needs for future capital. We cannot ensure that additional funding will beavailable or, if it is available, that it can be obtained on terms and conditions we will deem acceptable. Any additional fundingderived from the sale of equity securities is likely to result in significant dilution to our existing stockholders. These mattersinvolve risks and uncertainties that may prevent us from raising additional capital or may cause the terms upon which we raiseadditional capital, if additional capital is available, to be less favorable to us than would otherwise be the case. If we reacha point where we are unable to raise needed additional funds to continue as a going concern, we will be forced to cease our businessactivities and dissolve the Company. In such an event, we will need to satisfy various severances, contract termination, and otherdissolution-related obligations.

Wehave experienced recent net losses and we may incur future net losses, which may cause a decrease in our stock price.

Weincurred net losses of $4.6 million in fiscal 2016 and $3.8 million in fiscal 2015. We may not be able to generate revenues sufficientto offset our costs and may sustain net losses in future periods. Any such losses may have an adverse effect on our future operatingprospects, liquidity and stock price.

Adecrease in the popularity of our licensed brands and, correspondingly, the video games we publish based on those brands couldnegatively impact our revenues and financial position.

Certaingames released in 2014 and 2015 were based upon popular licensed brands. A decrease in the popularity of our licensed propertieswould negatively impact our ability to sell games based upon such licenses and could lead to lower net sales, profitability, and/oran impairment of our licenses, which would negatively impact our profitability.

Aweak global economic environment could result in increased volatility in our stock price.

Currentuncertainty in global economic conditions poses a risk to the overall economy as consumers and retailers may defer or choose notto make purchases in response to tighter credit and negative financial news, which could negatively affect demand for our products.Additionally, due to the weak economic conditions and tightened credit environment, some of our retailers and customers may nothave the same purchasing power, leading to lower purchases of our games for placement into distribution channels. Reduced consumerdemand for our products could materially impact our operating results.

Terminationor modification of our agreements with platform hardware manufacturers may adversely affect our business.

Weare required to obtain a license in order to develop and distribute software for each of the manufacturers of video game hardware.We currently have licenses from: (i) Sony to develop products for PlayStation, PlayStation 2, PlayStation 3 and PlayStation 4;(ii) from Nintendo to develop products for the DS, DSi, 3DS, Wii and WiiU; and (iii) from Microsoft to develop products for theXbox, Xbox 360 and Xbox One. These licenses must be periodically renewed, and if they are not, or if any of our licenses are terminatedor adversely modified, we may not be able to distribute any of our games on that platform or we may be required to do so on lessattractive terms.

Ourplatform licensors control the fee structures for online distribution of our games on their platforms.

Pursuantto the terms of certain publisher license agreements, platform licensors retain sole discretion to determine the fees to be chargedfor both base level and premium online services available via their online platforms. Each licensor’s ability to set royaltyrates makes it challenging for us to predict our costs, and increased costs may negatively impact our operating margins. As aresult of such varying fee structures, we may be unable to distribute our games in a cost-effective manner through such distributionchannels.

Intellectualproperty claims may increase our costs or require us to cease selling affected products, which could adversely affect our financialcondition and results of operations.

Developmentof original content, including publication and distribution, sometimes results in claims of intellectual property infringement.Although we make efforts to ensure our products do not violate the intellectual property rights of others, it is possible thatthird parties may still allege infringement. These claims and any litigation resulting from these claims may result in damageawards payable by us; could prevent us from selling the affected product; or require us to redesign the affected product to avoidinfringement or obtain a license for future sales of the affected product.

Anyof the foregoing could have an adverse effect on our financial condition and results of operations. Any litigation resulting fromthese claims could require us to incur substantial costs.

Areduced workforce presents additional risk to the effectiveness of our internal controls.

Wehave significantly reduced our workforce. A smaller workforce impacts our ability to continue to undertake our historic businesswhich could have an impact on our ability to maintain internal controls including over financial reporting, and can affect theadequacy of our controls. We cannot be certain that our internal controls over financial reporting are or will remain effective.If we cannot adequately maintain the effectiveness of our internal controls over financial reporting, we may be subject to liabilityand/or sanctions or investigation by regulatory authorities, such as the SEC. Any such action could adversely affect our financialresults and the market price of Common Stock.

Ourreputation with consumers is critical to our success. Negative consumer perceptions about our brands, games, services and/or businesspractices may damage our business and any costs incurred in addressing consumer concerns may increase our operating expenses.

Individualconsumers form our ultimate customer base, and consumer expectations regarding the quality, performance and integrity of our productsand services are high. Consumers may be critical of our brands, games, services and/or business practices for a wide variety ofreasons. These negative consumer reactions may not be foreseeable or within our control to manage effectively. Actions we taketo address consumer concerns may be costly and, in any case, may not be successful. In addition, negative consumer sentiment aboutour business practices may result in inquiries or investigations from regulatory agencies and consumer groups, as well as litigation,which, regardless of their outcome, may be damaging to our reputation. Any of these may have a negative impact on our business.

Ifour games and services do not function as consumers expect, it may have a negative impact on our business.

Ifour games and services do not function as consumers expect, whether because they fail to function as advertised or otherwise,our sales may suffer. If our games and services do not function as consumers expect, it may negatively impact our business.

Ifwe are unable to sustain traditional pricing levels for our titles, our business, financial condition, results of operations,profitability, cash flows or liquidity could suffer materially.

Ifwe are unable to sustain traditional pricing levels for our titles, whether due to competitive pressure, because retailers electto price these products at a lower price or otherwise, it could have a negative impact on our business. Further, we make provisionsfor retail inventory price protection based upon certain assumed lowest prices and if competitive pressures force us to lowerour prices below those levels, it could similarly have a negative impact on our business.

Ourindustry is subject to rapid technological change, and if we do not adapt to, and appropriately allocate our new resources among,emerging technologies and business models, our business may be negatively impacted.

Technologychanges rapidly in the interactive entertainment industry. We must continually anticipate and adapt our products to emerging technologies,delivery platforms and business models in order to stay competitive. When we choose to incorporate a new technology into a productor to develop a product for a new platform, operating system or media format, we often are required to make a substantial investmentprior to the introduction of the product. If we invest in the development of interactive entertainment products incorporatinga new technology or for a new platform that does not achieve significant commercial success, our revenues from those productslikely will be lower than we anticipated and may not cover our development costs. Further, our competitors may adapt to an emergingtechnology or business model more quickly or effectively than we do, creating products that are technologically superior to ours,more appealing to consumers, or both. If, on the other hand, we elect not to pursue the development of products incorporatinga new technology or for new platforms, or otherwise elect not to pursue a new business model, that achieves significant commercialsuccess, it may have adverse consequences. It may take significant time and resources to shift product development resources tothat technology, platform or business model, as the case may be, and may be more difficult to compete against existing productsincorporating that technology or for that platform or against companies using that business model. Any failure to successfullyadapt to, and appropriately allocate resources among, emerging technologies could negatively impact our business.

Competitionwithin, and to, the interactive entertainment industry is intense, and competitors may succeed in reducing our sales.

Withinthe interactive entertainment industry, we compete with other publishers of interactive entertainment software developed for useon the PC, video game consoles and handheld, mobile and tablet devices or social networking sites, both within the United Statesand, increasingly, in international jurisdictions. Our competitors include very large corporations with significantly greaterfinancial, marketing and product development resources than we have. A relatively small number of titles account for a significantportion of net revenues, and an even greater portion of net profit, in the interactive entertainment industry, and the availabilityof significant financial resources is a major competitive factor in the production of high-quality products and in the marketingof products that are ultimately well-received. Our larger competitors may be able to leverage their greater financial, technical,personnel and other resources to finance larger budgets for development and marketing and make higher offers to licensors anddevelopers for commercially desirable properties as well as adopt more aggressive pricing policies to develop more commerciallysuccessful products for the PC or video game platforms than we do. In addition, competitors with large product lines and populartitles typically have greater leverage with retailers, distributors and other customers, who may be willing to promote titleswith less consumer appeal in return for access to those competitors’ more popular titles.

Increasedconsumer acceptance and availability of interactive entertainment developed for use by consumers on handheld, mobile and tabletdevices or social networking sites or other online games, consumer acceptance and availability of technology which allows usersto play games on televisions without consoles, or technological advances in online game software or the Internet could resultin a decline in sales of our platform-based software.

Additionally,we compete with other forms of entertainment and leisure activities. For example, the overall growth in the use of the Internetand online services such as social networking sites by consumers may pose a competitive threat if consumers and potential consumersspend less of their available time using interactive entertainment software and more using the Internet, including those onlineservices. Further, it is difficult to predict and prepare for rapid changes in consumer demand that could materially alter publicpreferences for different forms of entertainment and leisure activities. Failure to adequately identify and adapt to the competitivepressures described herein could negatively impact our business.

Wemay be involved in legal proceedings that may result in material adverse outcomes.

Fromtime to time, we may be involved in claims, suits, government investigations, audits and proceedings arising from the ordinarycourse of our business, including actions with respect to intellectual property, competition and antitrust matters, privacy matters,tax matters, labor and employment matters, unclaimed property matters, compliance and commercial claims. Such claims, suits, governmentinvestigations, audits and proceedings are inherently uncertain and their results cannot be predicted with certainty. Regardlessof the outcome, such legal proceedings can have an adverse impact on us because of legal costs, diversion of management resourcesand other factors. In addition, it is possible that a resolution of one or more such proceedings could result in substantial finesand penalties, criminal sanctions, consent decrees or orders preventing us from offering certain features, functionalities, productsor services, requiring us to change our development process or other business practices.

Ourproducts are subject to ratings by the Entertainment Software Rating Board in the U.S. and similar agencies in international jurisdictions.Our failure to obtain our target ratings for our products could negatively impact our business.

TheEntertainment Software Rating Board (the “ESRB”) is a self-regulatory body based in the United States that providesconsumers of interactive entertainment software with ratings information, including information on the content in such software,such as violence, nudity or sexual content contained in software titles. The ESRB rating categories are “Early Childhood”(i.e., content is intended for young children), “Everyone” (i.e., content is generally suitable for all ages), “Everyone10+” (i.e., content is generally suitable for ages 10 and up), “Teen” (i.e., content is generally suitable forages 13 and up), “Mature” (i.e., content is generally suitable for ages 17 and up) and “Adults Only” (i.e.,content is suitable for adults ages 18 and up). Certain countries other than the United States have also established content ratingsystems as prerequisites for product sales in those countries. In some countries, a company may be required to modify its productsto comply with the requirements of the rating systems, which could delay or disrupt the release of any given product, or may preventits sale altogether in certain territories. Further, if an agency re-rates one of our games for any reason, retailers could refuseto sell it and demand that we accept the return of any unsold or returned copies or consumers could demand a refund for copiespurchased. If we are unable to obtain the ratings we have targeted for our products as a result of changes in a content ratingorganization’s ratings standards or for other reasons, it could have a negative impact on our business.

Ourbusiness, products, and distribution are subject to increasing regulation of content in key territories. If we do not successfullyrespond to these regulations, our business, financial condition, results of operations, profitability, cash flows or liquiditycould be materially adversely affected.

Legislationis continually being introduced, and litigation and regulatory enforcement actions are taking place, that may affect the way inwhich we, and other industry participants, may offer content and features, and distribute and advertise our products. For example,privacy laws and regulatory guidance in many countries impose various restrictions on online and mobile advertising, as well asthe collection, storage and use of personally identifiable information. We may be required to modify certain of our product developmentprocesses or alter our marketing strategies to comply with such regulations, which could be costly or delay the release of ourproducts. In addition, many foreign countries, such as China and Germany, have laws that permit governmental entities to restrictthe content and/or advertising of interactive entertainment software or prohibit certain types of content. Further, legislationwhich attempts to restrict marketing or distribution of such products because of the content therein has been introduced at onetime or another at the federal and state levels in the United States. There is on-going risk of enhanced regulation of interactiveentertainment marketing, content or sales. These laws and regulations vary by territory and may be inconsistent with one another,imposing conflicting or uncertain restrictions. The adoption and enforcement of legislation which restricts the marketing, contentor sales of our products in countries in which we do business may harm the sales of our products, as the products we are ableto offer to our customers and the size of the potential market for our products may be limited. Failure to comply with any applicablelegislation may also result in government-imposed fines or other penalties. Moreover, the increased public dialogue concerninginteractive entertainment may have an adverse impact on our reputation and consumers’ willingness to purchase our products.

RisksRelated to our Common Stock

OurRestated Certificate of Incorporation, our Restated Bylaws and Delaware law could deter a change of our management which coulddiscourage or delay offers to acquire us.

Certainprovisions of Delaware law and of our Restated Certificate of Incorporation, as amended, and Restated by-laws, could discourageor make it more difficult to accomplish a proxy contest or other change in our management or the acquisition of control by a holderof a substantial amount of our voting stock. It is possible that these provisions could make it more difficult to accomplish,or could deter, transactions that stockholders may otherwise consider to be in their best interests or in our best interests.These provisions include:

Wehave experienced volatility in the price of our stock and are subject to volatility in the future.

Theprice of our Common Stock has experienced significant volatility. The high and low bid quotations for our Common Stock, as reportedby The NASDAQ Capital Market, ranged between a high of $14.22 and a low of $2.61 during the past 24 months. The historic marketprice of our Common Stock may be higher or lower than the price paid for our shares and may not be indicative of future marketprices, depending on many factors, some of which are beyond our control. In addition, as we have significantly reduced our videogame operations, and are seeking strategic alternatives, we cannot predict the performance of our stock. The price of our stockmay change dramatically in response to our success or failure to consummate a strategic transaction.

Substantialfuture sales of our Common Stock by us or by our existing stockholders could cause our stock price to fall.

Additionalequity financings or other share issuances by us, including shares issued in connection with strategic alliances and corporatepartnering transactions, could adversely affect the market price of our common stock. Sales by existing stockholders of a largenumber of shares of our Common Stock in the public market or the perception that additional sales could occur could cause themarket price of our Common Stock to drop.

Wemay not be able to maintain our listing on The NASDAQ Capital Market.

OurCommon Stock currently trades on The NASDAQ Capital Market. This market has continued listing requirements that we must continueto maintain to avoid delisting. The standards include, among others, a minimum bid price requirement of $1.00 per share and anyof: (i) a minimum stockholders’ equity of $2.5 million; (ii) a market value of listed securities of $35 million; or (iii)net income from continuing operations of $500,000 in the most recently completed fiscal year or in the two of the last three fiscalyears. Our results of operations and our fluctuating stock price directly impact our ability to satisfy these listing standards.In the event we are unable to maintain these listing standards, we may be subject to delisting.

Adelisting from NASDAQ would result in our Common Stock being eligible for quotation on the Over-The-Counter market which is generallyconsidered to be a less efficient system than listing on markets such as NASDAQ or other national exchanges because of lower tradingvolumes, transaction delays and reduced security analyst and news media coverage. These factors could contribute to lower pricesand larger spreads in the bid and ask prices for our Common Stock. Additionally, trading of our Common Stock on the OTCBB maymake us less desirable to institutional investors and may, therefore, limit our future equity funding options and could negativelyaffect the liquidity of our stock.

Therights of our common stockholders are limited by and subordinate to the rights of the holders of Series A Convertible PreferredStock, Series B Convertible Preferred Stock, Series C Convertible Preferred Stock and Series D Convertible Preferred Stock; theserights may have a negative effect on the value of shares of our Common Stock.

Theholders of our outstanding shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series DPreferred Stock have rights and preferences generally superior to those of the holders of Common Stock. The existence of thesesuperior rights and preferences may have a negative effect on the value of shares of our Common Stock. These rights are more fullyset forth in the certificates of designations governing these instruments, and include, but are not limited to:

Thenumber of shares of issued and outstanding Common Stock represents approximately 43.6% of our fully diluted shares of Common Stock.Additional issuances of shares of Common Stock upon conversion and/or exercise of preferred stock, options to purchase CommonStock and warrants to purchase Common Stock will cause substantial dilution to existing stockholders.

AtJanuary 17, 2017, we had 4,250,617 shares of Common Stock issued and outstanding. Up to an additional 2,357,227 shares may beissued upon conversion of our Series A, Series B, Series C and Series D Convertible Preferred Stock; 487,733 shares upon exerciseof all outstanding vested options to purchase our Common Stock at an weighted average price of $5.46; 2,235,792 shares upon exerciseof all outstanding unvested options to purchase our Common Stock at an weighted average price of $3.20; and 123,000 shares issuableupon vesting of restricted stock units granted, which amounts includes all reserves, resulting in a total of up to 9,231,369 sharesthat may be issued and outstanding, assuming conversion of all outstanding convertible preferred stock, and exercise of all outstandingoption and warrants to purchase our Common Stock. The issuance of any and all of the 5,203,752 shares issuable upon exercise orconversion of our outstanding convertible securities will cause substantial dilution to existing stockholders and may depressthe market price of our Common Stock.

Youwill experience future dilution as a result of future equity offerings

Wemay in the future offer additional shares of our Common Stock or other securities convertible into or exchangeable for our CommonStock. Although no assurances can be given that we will consummate a financing, in the event we do, or in the event we sell sharesof Common Stock or other securities convertible into shares of our Common Stock in the future, additional and substantial dilutionwill occur. In addition, investors purchasing shares or other securities in the future could have rights superior to investorsin this offering.

CertainRisk Factors Relating to PolarityTE NV

Rapidtechnological change could cause PolarityTE NV’s platform, PolarityTE, to become obsolete.

Thetechnologies underlying PolarityTE NV’s platform, PolarityTE, are subject to rapid and profound technological change. Competitionintensifies as technical advances in each field are made and become more widely known. PolarityTE NV can give no assurance thatothers will not develop processes with significant advantages over the processes that PolarityTE NV offers or is seeking to develop.Any such occurrence could have a material and adverse effect on PolarityTE NV’s business, results of operations and financialcondition.

PolarityTENV’s revenues will depend upon adequate reimbursement from public and private insurers and health systems.

PolarityTENV’s success will depend on the extent to which reimbursement for the costs of its treatments will be available from thirdparty payers, such as public and private insurers and health systems. Government and other third party payers attempt to containhealthcare costs by limiting both coverage and the level of reimbursement of new treatments. Therefore, significant uncertaintyusually exists as to the reimbursement status of new healthcare treatments. If PolarityTE NV is not successful in obtaining adequatereimbursement for its treatment from these third party payers, the market’s acceptance of PolarityTE NV’s treatmentcould be adversely affected. Inadequate reimbursement levels also likely would create downward price pressure on PolarityTE NV’streatment. Even if PolarityTE NV does succeed in obtaining widespread reimbursement for its treatment, future changes in reimbursementpolicies could have a negative impact on PolarityTE NV’s business, financial condition and results of operations.

Tobe commercially successful, PolarityTE NV must convince physicians that its treatments are safe and effective alternatives toexisting treatments and that PolarityTE NV’s treatments should be used.

PolarityTENV believes physicians will only adopt its treatment if they determine, based on experience, clinical data and published peerreviewed journal articles, that the use of PolarityTE NV’s treatment is a favorable alternative to conventional methods,including skin grafting. Physicians may be slow to change their medical treatment practices for the following reasons, among others:

Inaddition, PolarityTE NV believes that recommendations for and support of its treatments by influential physicians are essentialfor market acceptance and adoption. If PolarityTE NV does not receive this support or is unable to demonstrate favorable long-termclinical data, physicians and hospitals may not use PolarityTE NV’s treatment, which would significantly reduce PolarityTENV’s ability to achieve revenue and would prevent PolarityTE NV from sustaining profitability.

PolarityTENV’s ability to protect its intellectual property and proprietary technology through patents and other means is uncertainand may be inadequate, which could have a material and adverse effect on PolarityTE NV.

PolarityTENV’s success depends significantly on its ability to protect its proprietary rights to the technologies used in it treatmentand PolarityTE platform. PolarityTE NV relies on patent protection, as well as a combination of copyright, trade secret and trademarklaws and nondisclosure, confidentiality and other contractual restrictions to protect its proprietary technology. These legalmeans afford only limited protection and may not adequately protect PolarityTE NV’s rights or permit PolarityTE NV to gainor keep any competitive advantage. In addition, PolarityTE NV’s pending patent applications include claims to material aspectsof PolarityTE NV’s procedures that are not currently protected by issued patents. The patent application process can betime consuming and expensive. PolarityTE NV cannot ensure that any of its pending patent applications will result in issued patents.Competitors may be able to design around PolarityTE NV’s patents or develop procedures that provide outcomes that are comparableor even superior to PolarityTE NV’s. Furthermore, the laws of foreign countries may not protect PolarityTE NV’s intellectualproperty rights to the same extent as do the laws of the United States.

Thefailure to obtain and maintain patents and/or protect PolarityTE NV’s intellectual property rights could have a materialand adverse effect on PolarityTE NV’s business, results of operations, and financial condition. Whether a patent is validis a complex matter of science and law, and therefore PolarityTE NV cannot be certain that, if challenged, its patents would beupheld. If one or more of those patents are invalidated, that could reduce or eliminate any competitive advantage PolarityTE NVmight otherwise have had.

Inthe event a competitor infringes upon PolarityTE NV’s pending patent or other intellectual property rights, enforcing thoserights may be costly, uncertain, difficult and time consuming. Even if successful, litigation to enforce or defend PolarityTENV’s intellectual property rights could be expensive and time consuming and could divert PolarityTE NV’s management’sattention. Further, bringing litigation to enforce PolarityTE NV’s patents subjects PolarityTE NV to the potential for counterclaims.In the event that one or more of our patents are challenged, a court or the United States Patent and Trademark Office (“USPTO”)may invalidate the patent(s) or determine that the patent(s) is not enforceable, which could harm PolarityTE NV’s competitiveposition. If the USPTO ultimately cancels or narrows the claim in any of PolarityTE NV’s patents through these proceedings,it could prevent or hinder PolarityTE NV from being able to enforce them against competitors. Such adverse decisions could negativelyPolarityTE NV’s future, expected revenue.

PolarityTENV may become subject to claims of infringement of the intellectual property rights of others, which could prohibit PolarityTENV from developing its treatment, require PolarityTE NV to obtain licenses from third parties or to develop non-infringing alternatives,and subject PolarityTE NV to substantial monetary damages.

Thirdparties could assert that PolarityTE NV’s procedures infringe their patents or other intellectual property rights. Whethera product infringes a patent or other intellectual property involves complex legal and factual issues, the determination of whichis often uncertain. Therefore, PolarityTE NV cannot be certain that it has not infringed the intellectual property rights of others.Because patent applications may take years to issue, there also may be applications now pending of which PolarityTE NV is unawarethat may later result in issued patents that PolarityTE NV’s procedure or processes infringe. There also may be existingpatents or pending patent applications of which PolarityTE NV is unaware that its procedures or processes may inadvertently infringe.

Anyinfringement claim could cause PolarityTE NV to incur significant costs, place significant strain on PolarityTE NV’s financialresources, divert management’s attention from PolarityTE NV’s business and harm PolarityTE’s reputation. Ifthe relevant patents in such claim were upheld as valid and enforceable and PolarityTE NV was found to infringe, PolarityTE NVcould be prohibited from utilizing any procedure that is found to infringe PolarityTE NV obtains licenses to use the technologycovered by the patent or other intellectual property or is able to design around the patent or other intellectual property. PolarityTENV may be unable to obtain such a license on terms acceptable to it, if at all, and PolarityTE NV may not be able to redesignits processes to avoid infringement. A court could also order PolarityTE NV to pay compensatory damages for such infringement,plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages couldbe substantial and could harm PolarityTE NV’s reputation, business, financial condition and operating results.

PolarityTENV’s business is subject to continuing regulatory compliance by the U.S. Food and Drug Administration (the “FDA”)and other authorities, which is costly and PolarityTE NV’s failure to comply could result in negative effects on its business.

TheFDA has specific regulations governing tissue-based products, or HCT/Ps. The FDA has broad post-market and regulatory and enforcementpowers. The FDA’s regulation of HCT/Ps includes requirements for registration and listing of products, donor screening andtesting, processing and distribution (“Current Good Tissue Practices”), labeling, record keeping and adverse-reactionreporting, and inspection and enforcement.

Evenif pre-market clearance or approval is obtained, the approval or clearance may place substantial restrictions on the indicationsfor which the product may be marketed or to whom it may be marketed, may require warnings to accompany the product or impose additionalrestrictions on the sale and/or use of the product. In addition, regulatory approval is subject to continuing compliance withregulatory standards, including the FDA’s quality system regulations.

IfPolarityTE NV fails to comply with the FDA regulations regarding its tissue regeneration processes, the FDA could take enforcementaction, including, without limitation, any of the following sanctions:

Itis likely that the FDA’s regulation of HCT/Ps will continue to evolve in the future. Complying with any such new regulatoryrequirements may entail significant time delays and expense, which could have a material adverse effect on PolarityTE NV’sbusiness.

PolarityTENV faces significant uncertainty in the industry due to government healthcare reform.

Therehave been and continue to be proposals by the Federal Government, State Governments, regulators and third party payers to controlhealthcare costs, and generally, to reform the healthcare system in the United States. There are many programs and requirementsfor which the details have not yet been fully established or the consequences are not fully understood. These proposals may affectaspects of PolarityTE NV’s business. PolarityTE NV also cannot predict what further reform proposals, if any, will be adopted,when they will be adopted, or what impact they may have on PolarityTE NV.

Oversightin the industry might affect the manner in which PolarityTE NV may compete in the marketplace.

Thereare laws and regulations that govern the means by which companies in the healthcare industry may market their treatments to healthcareprofessionals and may compete by discounting the prices of their treatments, including for example, the federal Anti-KickbackStatute, the federal False Claims Act, the federal Health Insurance Portability and Accountability Act of 1996, state law equivalentsto these federal laws that are meant to protect against fraud and abuse and analogous laws in foreign countries. Violations ofthese laws are punishable by criminal and civil sanctions, including, but not limited to, in some instances civil and criminalpenalties, damages, fines, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid.In addition, federal and state laws are also sometimes open to interpretation, and from time to time PolarityTE NV may find itselfat a competitive disadvantage if PolarityTE NV’s interpretation differs from that of our competitors.

PolarityTENV may have significant liability exposure and its insurance may not cover all potential claims.

PolarityTENV is exposed to liability and other claims in the event that its treatment is alleged to have caused harm. PolarityTE NV maynot be able to obtain insurance for the potential liability on acceptable terms with adequate coverage or at reasonable costs.Any potential product liability claims could exceed the amount of PolarityTE NV’s insurance coverage or may be excludedfrom coverage under the terms of the policy. PolarityTE NV’s insurance may not be renewed at a cost and level of coveragecomparable to that then in effect.

IfNASDAQ determines that the Merger with PolarityTE NV and the issuance of the Merger Consideration results in a change of controlof the Company, the Company may be required to submit a new application under NASDAQ’s original listing standards and ifsuch application is not approved, the Company’s Common Stock may be delisted from NASDAQ.

Inconnection with the Merger, the Company will issue 7,050 shares of Series E Preferred Stock convertible into an aggregate of 7,050,000shares of the Company’s Common Stock. NASDAQ Rule 5110(a) provides that a Company must apply for initial listing in connectionwith a transaction whereby a company combines with a non-NASDAQ entity, resulting in a change of control of such company and potentiallyallowing the non-NASDAQ entity to effectively obtain NASDAQ listing. In determining whether a change of control has occurred,NASDAQ considers all relevant factors including, changes in management, board of directors, voting power, ownership and financialstructure of the Company. If The NASDAQ Stock Market determines that a change of control does in fact result from the consummationof the Merger and the issuance of the Merger Consideration and an original listing application has not been approved prior tothe consummation of Merger, the Company will be in violation of NASDAQ Rule 5110(a) and the Company’s Common Stock couldbe delisted from The NASDAQ Capital Market.

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA

Thisprospectus contains forward-looking statements. Such forward-looking statements include those that express plans, anticipation,intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-lookingstatements are based on our current expectations and projections about future events and they are subject to risks and uncertaintiesknown and unknown that could cause actual results and developments to differ materially from those expressed or implied in suchstatements.

Insome cases, you can identify forward-looking statements by terminology, such as “expects”, “anticipates”,“intends”, “estimates”, “plans”, “potential”, “possible”, “probable”,“believes”, “seeks”, “may”, “will”, “should”, “could”or the negative of such terms or other similar expressions. Accordingly, these statements involve estimates, assumptions and uncertaintiesthat could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualifiedin their entirety by reference to the factors discussed throughout this prospectus.

Youshould read this prospectus and the documents that we reference herein and therein and have filed as exhibits to the registrationstatement, of which this prospectus is part, completely and with the understanding that our actual future results may be materiallydifferent from what we expect. You should assume that the information appearing in this prospectus is accurate as of the dateon the front cover of this prospectus only. Because the risk factors referred to above could cause actual results or outcomesto differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not placeundue reliance on any forward-looking statements. These risks and uncertainties, along with others, are described above underthe heading “Risk Factors” beginning on page * of this prospectus. Further, any forward-looking statement speaks onlyas of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events orcircumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factorsemerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess theimpact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results todiffer materially from those contained in any forward-looking statements. We qualify all of the information presented in thisprospectus, and particularly our forward-looking statements, by these cautionary statements.

Thisprospectus also includes estimates of market size and industry data that we obtained from industry publications and surveys andinternal company sources. The industry publications and surveys used by management to determine market size and industry datacontained in this prospectus have been obtained from sources believed to be reliable.

PRICERANGE OF COMMON STOCK

Ourcommon stock trades on The NASDAQ Capital Market under the symbol “COOL”. The following table sets forth the highand low sales prices for our Common Stock for each quarterly period within the two most recent fiscal years. All stock pricesincluded in the following table are retroactively adjusted for the 1 for 6 reverse stock split effective as of the open of businesson August 1, 2016.

Asof January 17, 2017, there were 143 stockholders of record of our Common Stock, one of which is Cede & Co., a nominee forDepository Trust Company, or DTC. Shares of Common Stock that are held by financial institutions as nominees for beneficial ownersare deposited into participant accounts at DTC, and are considered to be held of record by Cede & Co. as one stockholder.

DIVIDENDPOLICY

Priorto October 31, 2015, we had never declared or paid any dividends on our Common Stock.

OnJanuary 4, 2016, we declared a special cash dividend of an aggregate of $10,000,000 to be paid to holders of record on January14, 2016 of our outstanding shares of: (i) Common Stock (ii) Series A Convertible Preferred Stock; (iii) Series B ConvertiblePreferred Stock; (iv) Series C Convertible Preferred Stock and (v) Series D Convertible Preferred Stock. The holders of recordof our outstanding preferred stock participated in receiving their pro rata portion of the dividend on an “as converted”basis. The dividend was paid January 15, 2016.

Wedo not anticipate paying future dividends at the present time. We currently intend to retain earnings, if any, for use in ourbusiness.

SECURITIESAUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

Thefollowing table provides certain information with respect to all of the Company’s equity compensation plans in effect asof October 31, 2016.

2017Equity Incentive Plan

OnDecember 1, 2016, the Board of Directors (the “Board”) approved our 2017 Equity Incentive Plan (the “2017 Plan”),subject to stockholder approval. The purpose of the 2017 Plan is to promote the success of the Company and to increase stockholdervalue by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees,consultants and other eligible persons. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options,restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the our employees,officers, directors and consultants. The 2017 Plan will be administered by the Board or by one or more committees of directorsappointed by the Board or another committee, including determining which eligible participants will receive awards, the numberof shares of common stock subject to the awards and the terms and conditions of such awards. Up to 3,450,000 shares of CommonStock are issuable pursuant to awards under the 2017 Plan, subject to stockholder approval. Unless earlier terminated by the Board,the 2017 Plan shall terminate at the close of business on December 1, 2026.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

Thefollowing discussion and analysis of financial condition and results of operations should be read together with our financialstatements and accompanying notes appearing elsewhere in this Prospectus. This Management’s Discussion and Analysis containsforward-looking statements that involve risks and uncertainties. Please see “Forward-Looking Statements” set forthin the beginning of this Prospectus, and see “Risk Factors” beginning on page * for a discussion of certain risk factorsapplicable to our business, financial condition, and results of operations. Operating results are not necessarily indicative ofresults that may occur in future periods.

Overview

TheCompany is an innovative developer, marketer, publisher and distributor of interactive entertainment for consumers around theworld. Building on more than 25 years of operating history, the Company develops and publishes a wide range of video games ondigital networks through its Midnight City label, including Nintendo’s DS, 3DS, Wii and WiiU, Sony’s PlayStation 3and 4, or PS3 and PS4, Microsoft’s Xbox 360 and Xbox One and the personal computer, or PC. Although, historically, we havesold packaged software to large retail chains, specialty retail stores, video game rental outlets and distributors and throughdigital distribution for platforms such as Xbox Live Arcade, PlayStation Network, or PSN, and Steam, and for mobile devices andonline platforms, we are now purposed to operate, almost exclusively, in our digital software business unit.

OnDecember 1, 2016, we entered into an Agreement and Plan of Reorganization (the “Agreement”) with Majesco AcquisitionCorp., a Nevada corporation and wholly-owned subsidiary of the Company, PolarityTE, Inc., a Nevada corporation (“PolarityTENV”) and Dr. Denver Lough, the owner of 100% of the issued and outstanding shares of capital stock of PolarityTE NV (the“Seller”). The closing is subject to various closing conditions.

VideoGame Products

NetRevenues. Our revenues are principally derived from sales of our video games.

Costof Sales. Cost of sales includes amortization and impairment of capitalized software development costs and license fees. Commencingupon the related product’s release, capitalized software development and intellectual property license costs are amortizedto cost of sales.

GrossProfit. Gross profit is the excess of net revenues over product costs and amortization and impairment of software developmentand license fees. Development and license fees incurred to produce video games are generally incurred up front and amortized tocost of sales. The recovery of these costs and total gross profit is dependent upon achieving a certain sales volume, which variesby title.

ProductResearch and Development Expenses. Ongoing research and development activities have been substantially reduced since fiscal2014.

Sellingand Marketing Expenses. Since July 2015, these activities are now limited to online and in social media.

Generaland Administrative Expenses. General and administrative expenses primarily represent employee related costs, including stockcompensation, for corporate executive and support staff, general office expenses, professional fees and various other overheadcharges. Professional fees, including legal and accounting expenses, typically represent one of the largest components of ourgeneral and administrative expenses. These fees are partially attributable to our required activities as a publicly traded company,such as SEC filings, and corporate- and business-development initiatives.

Interestand Financing Costs. Interest and financing costs were directly attributable to our factoring and our purchase-order financingarrangements. Such costs included commitment fees and fees based upon the value of customer invoices factored.

IncomeTaxes. Income taxes consist of our provisions for income taxes, as affected by our net operating loss carryforwards. Futureutilization of our net operating loss, or NOL, carryforwards may be subject to a substantial annual limitation due to the “changein ownership” provisions of the Internal Revenue Code. The annual limitation may result in the expiration of NOL carryforwardsbefore utilization. Due to our history of losses, a valuation allowance sufficient to fully offset our NOL and other deferredtax assets has been established under current accounting pronouncements, and this valuation allowance will be maintained unlesssufficient positive evidence develops to support its reversal.

CriticalAccounting Estimates

Ourdiscussion and analysis of the financial condition and results of operations is based upon our consolidated financial statements,which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP.

Thepreparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amountsof assets, liabilities, revenues, and expenses, and related disclosure of contingent assets and liabilities. We base our estimateson historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the resultsof which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results could differ materially from these estimates under different assumptions or conditions.

Wehave identified the policies below as critical to our business operations and to the understanding of our financial results. Theimpact and any associated risks related to these policies on our business operations is discussed throughout management’sdiscussion and analysis of financial condition and results of operations when such policies affect our reported and expected financialresults.

RevenueRecognition. Our software products are sold exclusively as downloads of digital content for which the consumer takes possessionof the digital content for a fee. Revenue from product downloads is generally recognized when the download is made available (assumingall other recognition criteria are met).

Whenwe enter into license or distribution agreements that provide for multiple copies of games in exchange for guaranteed amounts,revenue is recognized in accordance with the terms of the agreements, generally upon delivery of a master copy, assuming our performanceobligations are complete and all other recognition criteria are met, or as per-copy royalties are earned on sales of games.

CapitalizedSoftware Development Costs and License Fees. Software development costs include development fees, primarily in the form ofmilestone payments made to independent software developers. Software development costs are capitalized once technological feasibilityof a product is established and management expects such costs to be recoverable against future revenues. For products where provengame engine technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a product-by-productbasis. Amounts related to software development that are not capitalized are charged immediately to product research and developmentcosts. Commencing upon a related product’s release, capitalized software development costs are amortized to cost of salesbased upon the higher of (i) the ratio of current revenue to total projected revenue or (ii) straight-line charges over the expectedmarketable life of the product.

Prepaidlicense fees represent license fees to holders for the use of their intellectual property rights in the development of our products.Minimum guaranteed royalty payments for intellectual property licenses are initially recorded as an asset (capitalized licensefees) and a current liability (accrued royalties payable) at the contractual amount upon execution of the contract or when specifiedmilestones or events occur and when no significant performance commitment remains with the licensor. Licenses are expensed tocost of sales at the higher of (i) the contractual royalty rate based on actual sales or (ii) an effective rate based upon totalprojected revenue related to such license. Capitalized software development costs are classified as non-current if they relateto titles for which we estimate the release date to be more than one year from the balance sheet date.

Theamortization period for capitalized software development costs and license fees is usually no longer than one year from the initialrelease of the product. If actual revenues or revised forecasted revenues fall below the initial forecasted revenue for a particularlicense, the charge to cost of sales may be larger than anticipated in any given quarter. The recoverability of capitalized softwaredevelopment costs and license fees is evaluated quarterly based on the expected performance of the specific products to whichthe costs relate.

When,in management’s estimate, future cash flows will not be sufficient to recover previously capitalized costs, we expense thesecapitalized costs to cost of sales - loss on impairment of capitalized software development costs and license fees - future releases,in the period such a determination is made. These expenses may be incurred prior to a game’s release. If a game is cancelledand never released to market, the amount is expensed to operating costs and expenses - loss on impairment of capitalized softwaredevelopment costs and license fees - cancelled games. If we were required to write off licenses or capitalized software developmentcosts, due to changes in market conditions or product acceptance, our results of operations could be materially adversely affected.

Licensefees and milestone payments made to our third party developers are typically considered non-refundable advances against the totalcompensation they can earn based upon the sales performance of the products. Any additional royalty or other compensation earnedbeyond the milestone payments is expensed to cost of sales as incurred.

Weexpense as research and development costs associated with the development of mobile and social games when we cannot reliably projectthat future net cash flows from developed games will exceed related development costs. These games have not earned significantrevenues to date and we are continuing to evaluate alternatives for future development and monetization.

Accountingfor Stock-Based Compensation. Stock-based compensation expense is measured at the grant date based on the fair value of theaward and is recognized as expense over the vesting period. Determining the fair value of stock-based awards at the grant daterequires judgment, including, in the case of stock option awards, estimating expected stock volatility. In addition, judgmentis also required in estimating the amount of stock-based awards that are expected to be forfeited. If actual results differ significantlyfrom these estimates, stock-based compensation expense and our results of operations could be materially impacted.

Accountingfor Preferred Stock and Warrant transactions. We issued units consisting of preferred shares and warrants and common stockand warrants and subsequently remeasured certain of those warrants. Determining the fair value of the securities in these transactionsrequires significant judgment, including adjustments to quoted share prices and expected stock volatility. Such estimates maysignificantly impact our results of operations and losses applicable to common stockholders.

Commitmentsand Contingencies. We record a liability for commitments and contingencies when the amount is both probable and reasonablyestimable. We record associated legal fees as incurred. We accrued contingent liabilities for certain potential licensor and customerliabilities and claims that were transferred to Zift but may not be extinguished by such transaction.

Resultsof Operations

Yearended October 31, 2016 versus the year ended October 31, 2015

NetRevenues. Net revenues for the year ended October 31, 2016 decreased 77% to approximately $1.5 million from $6.7 million forthe year ended October 31, 2015. The decrease was due to lower sales of Zumba titles. Additionally, there were no retail salesdue to the transfer of the retail distribution channel to Zift in July 2015.

GrossProfit. Gross profit for the year ended October 30, 2016 decreased 62% to approximately $1.3 million compared to a gross profitof approximately $3.3 million for the year ended October 31, 2015. The decrease in gross profit reflects lower Zumba and othersales as discussed above, as well as the Company’s withdrawal from the packaged software business. Gross profit as a percentageof net revenues was 81% for the year ended October 31, 2016, compared to 49% for the year ended October 31, 2015. The increasein gross profit is due to the dramatically lower cost of sales associated with a digitally sold product.

ProductResearch and Development Expenses. Product research and development expenses for the year ended October 31, 2016 was approximately$90,000 compared to $174,000 for the year ended October 31, 2015. The decrease reflects the general reduction in this activity.

Sellingand Marketing Expenses. Total selling and marketing expenses for the year ended October 31, 2016 decreased 98% to approximately$14,000 compared to approximately $771,000 for the year ended October 31, 2015. The decrease is primarily due to lower personnelcosts and other marketing and distribution activities related to our switch to digital.

Generaland Administrative Expenses. For the year ended October 31, 2016, general and administrative expenses increased 13% to approximately$6.0 million compared to $5.4 million for the year ended October 31, 2015. The increase reflects a $1.7 million increase in stockbased compensation partially offset by lower non-stock based compensation costs, consulting and professional fees and relatedsupport expenses. Stock based compensation increased, because during the third quarter of fiscal 2016, a total of 356,666 restrictedshares and 347,010 stock options were granted, of which 177,084 restricted stock shares were granted with immediate vesting.

WorkforceReduction. For the year ended October 31, 2015, we incurred workforce reduction costs of $0.8 million pertaining to severancecosts, including primarily severance costs for finance and legal executives and other personnel.

Operatingloss. Operating loss for the year ended October 31, 2016 increased 26% to approximately $4.9 million, compared to an operatingloss of approximately $3.9 million for the year ended October 31, 2015, primarily reflecting a greater decrease in net revenuesand gross profit than the expense reductions in development and marketing activities plus an increase in stock based compensation.

Extinguishmentof liabilities. During the year ended October 31, 2015, we recognized a gain on extinguishment of liabilities of approximately$1.5 million. We determined that certain accounts payable balances and claims for license fees and services would never be paidbecause they were no longer being pursued for payment and had passed the statute of limitations.

Netgains on asset sales and other nonoperating gains. During the year ended October 31, 2015, we recognized approximately $198,000in net gain from the sale of certain game rights and from the sale of office furniture and equipment upon the move to a smalleroffice. Additionally, we recognized $50,000 from the transfer of retail distribution activities to Zift, a company owned by ourformer chief executive officer.

Changein fair value of warrant liability. In our December 2014 private placement of units consisting of preferred stock and warrants,we issued warrants containing certain contingent settlement terms not indexed to our own stock. We accounted for the warrantsas derivative liabilities and measured their fair value on a quarterly basis and recognized on a current basis any gains or losses.In the year ended October 31, 2015, we recognized a loss of approximately $1.5 million reflecting an increase in our stock pricefrom the previous measurement date. In our April 19, 2016, equity offering, we issued warrants. We accounted for the warrantsas derivative liabilities and measure their fair value on a quarterly basis and recognize on a current basis any gains or losses.In the year ended October 31, 2016, we recognized a gain of approximately $248,000 reflecting a decrease in our stock price fromthe previous measurement date.

IncomeTaxes. In the year ended October 31, 2016, our income tax expense was not significant, representing primarily minimum stateincome taxes.

Liquidityand Capital Resources

Asof October 31, 2016, our cash and cash equivalents balance was $6.5 million and our working capital was approximately $5.4 million,compared to cash and equivalents of $17.1 million and working capital of $15.6 million at October 31, 2015.

Fromfiscal 2013 through the present, we have experienced net cash outflows from operations, generally to fund operating losses dueto declining revenues which we attribute to three factors: 1) the introduction of competing “freemium” games on competinghandheld devices such as the Apple iPhone or iTouch, and Android powered devices; 2) a shift in game distribution from retailto digital downloads; and 3) a decline in the popularity of motion based fitness games including games we publish under the Zumbafitness brand. As a result of these factors we have reduced our operating expenses, including the reduction of game productionand marketing personnel, and have eliminated substantially all of our new game development activities. In 2015, we transferredour retail distribution activities to Zift and transferred related assets and liabilities, including accounts receivable, inventory,customer credits and certain other liabilities.

OnDecember 1, 2016, we entered into the Agreement with Majesco Acquisition Corp., a Nevada corporation and wholly-owned subsidiaryof the Company, PolarityTE NV, a Nevada corporation and the Seller, the owner of 100% of the issued and outstanding shares ofcapital stock of PolarityTE NV. The closing is subject to various closing conditions. We believe we have sufficient cash on handto fund operations though the next year.

PrivatePlacements

Theprivate placements described below were completed in December 2014 and May 2015. A substantial portion of the proceeds of theseofferings remained subject to escrow agreements until September 2015, pending the satisfaction of release conditions.

December2014

OnDecember 17, 2014, pursuant to subscription agreements (the “December Subscription Agreements”) entered into withcertain accredited investors (the “December Investors”) the Company completed a private placement of $6.0 millionof units (the “December Units”) at a purchase price of $0.68 per December Unit, with each December Unit consisting of one shareof the Company’s 0% Series A Convertible Preferred Stock (each a “Series A Preferred Share”) and a five-yearwarrant (each a “December Warrant”) to purchase one sixth of a share of the Company’s common stock at an initialexercise price of $4.08 per share (such issuance and sale, the “December Private Placement”). The December Warrants were subsequentlyexchanged for shares of the Company’s 0% Series B Convertible Preferred Stock (the “Series B Preferred Shares”)and shares of the Company’s common stock (see below). The offering was made in reliance upon an exemption from registrationunder Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

TheSeries A Preferred Shares are convertible into shares of common stock based on a conversion calculation equal to the stated valueof such Series A Preferred Share, plus all accrued and unpaid dividends, if any, on such Series A Preferred Share, as of suchdate of determination, divided by the conversion price. The stated value of each Preferred Share is $0.68 and the initial conversionprice is $4.08 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions orother similar events. In addition, in the event the Company issues or sells, or is deemed to issue or sell, shares of its commonstock at a per share price that is less than the conversion price then in effect, the conversion price shall be reduced to suchlower price, subject to certain exceptions. Pursuant to the Certificate of Designations, Preferences and Rights of the 0% SeriesA Convertible Preferred Stock of Majesco Entertainment Company, the Company is prohibited from incurring debt or liens, or enteringinto new financing transactions without the consent of the lead investor (as defined in the December Subscription Agreements)as long as any of the Series A Preferred Shares are outstanding. The Series A Preferred Shares bear no dividends.

Theholders of Series A Preferred Shares shall vote together with the holders of common stock on all matters on an as if convertedbasis, subject to certain conversion and ownership limitations, and shall not vote as a separate class. Notwithstanding the foregoing,the conversion price for purposes of calculating voting power shall in no event be lower than $3.54 per share. At no time mayall or a portion of the Series A Preferred Shares be converted if the number of shares of common stock to be issued pursuant tosuch conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the numberof shares of common stock which would result in such Holder beneficially owning (as determined in accordance with Section 13(d)of the 1934 Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time; provided, however,that the holder may waive the 4.99% limitation at which time he may not own beneficially own more than 9.99% of all the commonstock outstanding at such time.

Theproceeds of the offering and certificates representing the Series A Preferred Shares and December Warrants were deposited intoescrow accounts. Upon the closing of the December Private Placement, $1.0 million of the proceeds was released to us and $1.0million of Series A Preferred Shares and December Warrants, on a pro rata basis, was released to the investors. The remaining$5.0 million was released by the escrow agent to us and the corresponding $5.0 million of Series A Preferred Shares and DecemberWarrants were released to the investors in September 2015, in connection with amendments to the December Subscription Agreements.

OnApril 30, 2015, pursuant to warrant exchange agreements, the holders exchanged for cancellation 1,470,590 December Warrants, includingthose then held in escrow, for shares of common stock or Series B Preferred Shares. An aggregate of 1,050,421 shares of commonstock, which amount includes the shares of common stock issuable upon conversion of the Series B Preferred Shares, were issuedor issuable in connection with the exchange agreements.

TheSeries B Preferred Shares are convertible into shares of common stock based on a conversion calculation equal to the stated value($140.00 per share) of the Series B Preferred Shares, plus all accrued and unpaid dividends, if any, divided by the conversionprice (initially $8.40 per share, subject to adjustment). We are prohibited from effecting a conversion of the Series B PreferredShares to the extent that, as a result of such conversion, such holder would beneficially own more than 4.99% of the number ofshares of common stock outstanding, subject to increase, up to 9.99%. Each holder is entitled to vote on all matters submittedto our stockholders on an “as converted basis”, subject to beneficial ownership limitations, based on a conversionprice of $8.40 per share.

May2015

OnMay 15, 2015 (the “May Closing Date”), we closed the sale of $5.05 million of units (the “May Units”),pursuant to separate subscription agreements (the “May Subscription Agreements”) with accredited investors enteredinto on April 29, 2015, at a purchase price of $7.20 per May Unit. Each May Unit consists of one share of the our common stock,provided that, if the issuance of any such shares would have resulted in the investor owning in excess of 4.99% of our issuedand outstanding common stock, then such investor could elect to receive shares of our 0% Series C Convertible Preferred Stock(the “Series C Preferred Shares”), and a three-year warrant (the “May Warrants”) to purchase one shareof the our common stock at an exercise price of $8.40 per share (such sale and issuance, the “May Private Placement”).

TheSeries C Preferred Shares are convertible into shares of common stock based on a conversion calculation equal to the stated valueof such Series C Preferred Shares ($120.00 per share), plus all accrued and unpaid dividends, if any, divided by the conversionprice ($7.20 per share, subject to adjustment). In addition, in the event the we issue or sell, or are deemed to issue or sell,shares of our common stock at a per share price that is less than the conversion price then in effect, the conversion price shallbe reduced to such lower price, subject to certain exceptions. Notwithstanding the foregoing, until such time as we obtain therequired shareholder approval pursuant to the rules of The NASDAQ Stock Market, LLC, the conversion price of the Series C PreferredShares shall not be adjusted to a per share price below $5.16. We are prohibited from effecting a conversion of the Series C PreferredShares to the extent that, as a result of such conversion, such holder would beneficially own more than 4.99% of the number ofshares of common stock subject to increase, up to 9.99%. Each holder is entitled to vote on all matters submitted to our stockholderson an “as converted basis”, subject to the beneficial ownership limitation, based on a conversion price of $7.20 pershare. The Series C Preferred Shares bear no interest and shall rank junior to our Series A Preferred Shares but senior to theCompany’s Series B Preferred Shares.

TheMay Warrants are exercisable, at any time, following the date the May Warrants are issued, at a price of $8.40 per share, subjectto adjustment, and expire three years from the date of issuance. The holders may, subject to certain limitations, exercise theMay Warrants on a cashless basis. The Company is prohibited from effecting an exercise of any May Warrant to the extent that,as a result of any such exercise, the holder would beneficially own more than 4.99% of the number of shares of common stock outstandingimmediately after giving effect to the issuance of shares of common stock upon exercise of such May Warrant, which beneficialownership limitation may be increased by the holder up to, but not exceeding, 9.99%.

Theproceeds of the May Private Placement along with certificates evidencing the Series C Preferred Shares and Series C Warrants weredeposited into an escrow accounts. On the May Closing Date, twenty percent (20%) of the proceeds of the May Private Placement($1.01 million) and a corresponding number of Series C Preferred Shares and Series C Warrants were released to us and the investors,respectively. The remaining eighty percent (80%) of the proceeds from the May Private Placement ($4.04 million) and the correspondingpercentage of Series C Preferred Shares and Series C Warrants were released to us and the investors, respectively, in September2015 in connection with amendments to the May Subscription Agreements.

September2015

OnSeptember 25, 2015, we entered into amendment agreements to amend the terms of our subscription agreements for the private offeringsclosed December 17, 2014 and May 15, 2015 to provide for the consent of the lead investor in such offerings to release of allremaining escrowed funds to us ($5.0 million under the December Private Placement and $4.04 under the May Private Placement) uponthe satisfaction of certain obligations, which we satisfied. Pursuant to the amendment agreements, we were, among other things,required to increase the size of its Board of Directors and appoint thereto, individuals deemed acceptable to the lead investorand approved by The NASDAQ Stock Market, LLC; appoint a new Chief Executive Officer and a new Chief Financial Officer and exchangethe Series C Warrants, as described further below. On September 30, 2015 we received $9.04 million in proceeds from the foregoingrelease of escrowed funds and the corresponding securities were released to the investors.

Inaccordance with the aforementioned escrow release conditions, we entered into exchange agreements with holders of our outstandingSeries C Warrants pursuant to which each holder received .4 shares of our common stock for each 1 warrant share exchanged forcancellation. At the election of any holder who would, as a result of receipt of the common stock hold in excess of certain beneficialownership thresholds of our issued and outstanding common stock, such holder could receive shares of our newly designated 0% SeriesD Convertible Preferred Stock (the “Series D Preferred Shares”). Pursuant to the foregoing exchanges, on September25, 2015, we issued 0 shares of common stock and 168,333 Series D Preferred Shares convertible into 280,555 shares of common stockin exchange for the cancellation of Series C Warrants to purchase 701,390 shares of common stock. Certain of our officers anddirectors who held Series C Warrants participated in the exchange.

TheSeries D Preferred Shares are convertible into shares of common stock based on a conversion ratio equal to the stated value ($1,000.00per share) of such Series D Preferred Shares to be converted, plus all accrued and unpaid dividends, if any, divided by the conversionprice ($600.00 per share, subject to adjustment). We are prohibited from effecting a conversion of the Series D Preferred Sharesto the extent that, as a result of such conversion, such holder would beneficially own more than 4.99% of the number of sharesof Common Stock outstanding, subject to increase, up to, 9.99%. The Series D Preferred Shares bear no interest and rank seniorto our common stock but junior to Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares.

OnOctober 15, 2015, our Board of Directors approved a revised version of the Certificate of Designations, Preferences and Rightsof our 0% Series D Convertible Preferred Stock in order to remove any voting rights of the Series D Preferred Shares, except asotherwise required by law.

Dividends

OnJanuary 4, 2016, we declared a special cash dividend of an aggregate of $10.0 million to holders of record on January 14, 2016of its outstanding shares of: (i) common stock (ii) Series A Preferred Shares; (iii) Series B Preferred Shares; (iv) Series CPreferred Shares and (v) Series D Preferred Shares. The holders of record of the Company’s outstanding preferred stock participatedin the dividend on an “as converted” basis.

April2016 Registered Common Stock and Warrant Offering

OnApril 13, 2016, the Company entered into a Securities Purchase Agreement with certain institutional investors providing for theissuance and sale by the Company of 250,000 shares of the Company’s common stock, par value $0.001 per share at an offeringprice of $6.00 per share, for net proceeds of $1.4 million after deducting placement agent fees and expenses. In addition, theCompany sold to purchasers of common stock in this offering, warrants to purchase 187,500 shares of its common stock. The commonshares and the Warrant Shares were offered by the Company pursuant to an effective shelf registration statement on Form S-3, whichwas initially filed with the Securities and Exchange Commission on October 22, 2015 and declared effective on December 7, 2015.The closing of the offering occurred on April 19, 2016.

EachWarrant is immediately exercisable for two years, but not thereafter, at an exercise price of $6.90 per share. Subject to limitedexceptions, a holder of warrants will not have the right to exercise any portion of its warrants if the holder, together withits affiliates, would beneficially own in excess of 4.99% of the number of shares of our common stock outstanding immediatelyafter giving effect to such exercise. The exercise price and number of warrants are subject to adjustment in the event of anystock dividends and splits, reverse stock split, stock dividend, recapitalization, reorganization or similar transaction.

Off-BalanceSheet Arrangements

Asof October 31, 2016, we had no off-balance sheet arrangements.

Inflation

Ourmanagement currently believes that inflation has not had, and does not currently have, a material impact on continuing operations.

CashFlows

Cashand cash equivalents were $6.5 million as of October 31, 2016 compared to $17.1 million at October 31, 2015 and working capitalas of October 31, 2016 was $5.4 million compared to $15.6 million at October 31, 2015.

OperatingCash Flows. Our principal operating source of cash is revenue from distribution of our interactive entertainment products,net of royalty and revenue-share payments to licensors, developers and publishers. During fiscal 2015, we reduced our developmentand marketing activities and distributed a greater number of games published by others, compared to prior years. Accordingly,the portion of operating cash flows used for associated working capital requirements, including pre-release development and costsincurred to manufacture, sell and market our games has generally been reduced. We incurred $1.6 million of cash outflows fromoperations during the year ended October 31, 2015, primarily reflecting operating losses and the settlement in cash of certainoutstanding royalty and customer-credit liabilities, partially offset by the liquidation of prior inventory balances and collectionof accounts receivable. We incurred $1.8 million of cash outflows from operations during the year ended October 31, 2016, primarilyreflecting current operating losses, partially offset by non-cash compensation expense.

InvestingCash Flows. Cash provided by investing activities in the year ended October 31, 2015 amounted to approximately $540,000, primarilyreflecting proceeds from the sale of certain game rights and the collection of certain outstanding advances to GMS.

FinancingCash Flows. Net cash used in financing activities for the year ended October 31, 2016 amounted to approximately $8.8 million,mainly related to a payment of a $10.0 million special cash dividend, partially offset by an equity capital raise of approximately$1.4 million. Net cash provided by financing activities for the year ended October 31, 2015 reflects $10.9 million of net proceedsfrom private placements.

Changesin and Disagreements with Accountants on Accounting and Financial Disclosure

None.

BUSINESS

Introduction

Weare a technology company which has developed, marketed, published and distributed software through online platforms. We developapplications for gaming on computers, handheld devices and game consoles. We have had commercial successes (Zumba Fitness) whichhave not been replicated and in furtherance of seeking to diversify, on December 1, 2016 we entered into the Agreement (definedbelow) to acquire the patents, know-how and trade secrets of PolarityTE NV. PolarityTE NV is the owner of patent applicationsand know-how related to regenerative medicine and tissue engineering, as well as software applications used in diagnosis and treatmentrelated to regenerative medicine. PolarityTE NV seeks to develop and obtain regulatory approval for technology that will utilizea patient’s own tissue substrates for the regeneration of skin, bone, muscle, cartilage, fat, blood vessels and nerves.

Agreementand Plan of Reorganization

OnDecember 1, 2016 we entered into the Agreement, as amended on December 16, 2016, with Majesco Acquisition Corp., a Nevada corporationand our wholly-owned subsidiary, PolarityTE NV and Dr. Denver Lough as the “Seller”.

Ifconsummated in accordance with the terms and conditions of the Agreement, the Seller will be issued 7,050 of the Company’snewly authorized Series E Preferred Stock convertible into an aggregate of 7,050,000 shares of the Company’s Common Stock(the “Merger Consideration” and such transaction, the “Merger”), expected to constitute approximately50% of the issued and outstanding Common Stock of the Company on a fully diluted basis, at closing. The closing of the Mergeris subject to the satisfaction of certain closing conditions, including approval of stockholders of the Company in accordancewith the Delaware General Corporation Law and NASDAQ Listing Rules and a minimum cash balance available to the Company. Untilconverted, each share of Series E Preferred Stock is entitled to two votes for every share of Common Stock into which it is convertibleon any matter submitted for a vote of stockholders.

CorporateBackground

TheCompany was incorporated in 2004 in the state of Delaware under the name Majesco Holdings Inc. (formerly ConnectivCorp). As aresult of a merger, Majesco Sales Inc. became a wholly-owned subsidiary and the sole operating business of the Company, whichchanged its name to Majesco Entertainment Company. Effective January 11, 2017, the Company changed its name to “PolarityTE,Inc.” from “Majesco Entertainment Company.”

Ourprincipal executive offices are located at 4041-T Hadley Road, South Plainfield, NJ 07080 and our telephone number is (732) 225-8910.Our web site address is http://www.majescoent.com/.

ReverseStock-Split

OnJuly 27, 2016 the Company filed a certificate of amendment to its Restated Certificate of Incorporation with the Secretary ofState of the State of Delaware in order to effectuate a reverse stock split of the Company’s issued and outstanding CommonStock on a one for six basis. The reverse stock split became effective with NASDAQ at the open of business on August 1, 2016.The par value and other terms of the Company’s Common Stock were not affected by the reverse stock split. The Company’spost-reverse stock split Common Stock has a new CUSIP number, 560690 406. The Company’s transfer agent, Equity Stock TransferLLC, acted as exchange agent for the reverse stock split.

Asa result of the reverse stock split, every six shares of the Company’s pre-reverse stock split Common Stock were combinedand reclassified into one share of the Company’s Common Stock. No fractional shares of Common Stock were issued as a resultof the reverse stock split.

AllCommon stock and per share amounts have been retroactively restated to give effect to the reverse stock split.

IndustryOverview

Thevideo game software market is comprised of the following two primary sectors: (i) dedicated console software for systems suchas the Xbox, PlayStation, Wii, and handheld gaming systems, such as the Nintendo DS and Nintendo 3DS. The majority of softwarefor these platforms has historically been purchased in packaged form through retail outlets. However, in recent years, an increasingamount of software has been made available digitally through online networks such as Microsoft’s Xbox Live Arcade (“XBLA”),and Sony’s PlayStation Network (“PSN”); and (ii) software for multipurpose devices such as personal computersand mobile devices such as smartphones and tablets.

Onlineand mobile digital games

Wehave released numerous games for digital distribution over various third party networks for dedicated game consoles or PC, suchas XBLA, PSN and Steam. We have released titles for various mobile platforms, including Apple’s iOS and Google’s Android.We have published our own digital games and served as a distributor for other developer’s products in return for a percentageof net revenues generated by the game. Some of the games are distributed under the label “Midnight City” which weestablished to provide services to the indie game development community.

Selecteddigital titles, their compatible platforms and launch dates included:

Retaildistribution

Priorto July 2015, we derived the majority of revenues from the sale of games for dedicated game consoles through retail distribution.Specifically, we have generated a substantial amount of our revenues in this channel from two “hit” franchises, CookingMama and Zumba Fitness. These titles are late in their life cycle, and as a result, generated significantly reducedsales than early in their life cycle. We have also released a number of other titles, primarily for the casual game consumer onthe Nintendo DS, Nintendo WII and Microsoft 360 Kinect. Retail distribution no longer constitutes any focus of our business.

Retaildistribution

Priorto July 2015, we derived the majority of revenues from the sale of games for dedicated game consoles through retail distribution.Specifically, we have generated a substantial amount of our revenues in this channel from two “hit” franchises, CookingMama and Zumba Fitness. These titles are late in their life cycle, and as a result, generated significantlyreduced sales than early in their life cycle. We have also released a number of other titles, primarily for the casual game consumeron the Nintendo DS, Nintendo WII and Microsoft 360 Kinect. Retail distribution no longer constitutes any focus of our business.

ProductDevelopment

Weprimarily use third party development studios to develop our games. However, we may employ game-production and quality-assurancepersonnel to manage the creation of the game and its ultimate approval by the first party hardware manufacturer. We carefullyselect third parties to develop video games based on their capabilities, suitability, availability and cost. We typically havebroad rights to commercially utilize products created by the third party developers we work with. Development contracts are structuredto provide developers with incentives to provide timely and satisfactory performance by associating payments with the achievementof substantive development milestones, and by providing for the payment of royalties to them based on sales of the developed product,only after we recoup development costs.

Theprocess for producing video games also involves working with platform manufacturers from the initial game concept phase throughapproval of the final product. During this process, we work closely with the developers and manufacturers to ensure that the titleundergoes careful quality assurance testing. Each platform manufacturer requires that the software and a prototype of each title,together with all related artwork and documentation, be submitted for its pre-publication approval. This approval is generallydiscretionary.

IntellectualProperty

Ourbusiness is dependent upon intellectual property rights in numerous respects. We typically own the copyright to our software codeand content and register copyrights and trademarks in the United States as appropriate.

PlatformLicenses

Hardwareplatform manufacturers require that publishers obtain a license from them to publish titles for their platforms. We currentlyhave non-exclusive licenses from Nintendo, Microsoft and Sony for each of the popular console and handheld platforms. Each licensegenerally extends for a term of between two to four years and is terminable under a variety of circumstances. Each license allowsus to create one or more products for the applicable system, and requires us to pay a per-unit license fee and/or royalty paymentfrom the title produced and may include other compensation or payment terms. All of the hardware manufacturers approve each ofthe titles we submit for approval on a title-by-title basis, at their discretion. We are also dependent on approvals from distributorsfor our video game software for PCs and mobile devices.

Licensesfrom Third Parties

Whilewe develop original titles, most of our titles are based on rights, licenses and properties, including copyrights and trademarks,owned by third parties. Even our original titles may require rights to properties from third parties, such as rights to musicor content. License agreements with third parties generally extend for a term of between two to four years, are limited to specificterritories or platforms and are terminable under a variety of circumstances. Several of our licenses are exclusive within particularterritories or platforms. The licensors often have strict approval and quality control rights. Typically, we are obligated tomake minimum guaranteed royalty payments over the term of these licenses and advance payments against these guarantees, but othercompensation or payment terms, such as milestone payments, are also common. From time to time, we may also license other technologiesfrom third party developers for use in our products, which also are subject to royalties and other types of payment.

Customers

Customersof our packaged software have historically been national and regional retailers, specialty retailers and video game rental outlets.Sony, Microsoft and Valve accounted for 47%, 37%, and 13%, respectively, of sales for the fiscal year ended October 31, 2016.For the fiscal year ended 2015, our top three accounts were Microsoft (digital), GameStop and Alliance Distributors, which accountedfor approximately 13%, 10% and 10% of our revenue, respectively. In fiscal 2015, we transferred our distribution activities relatedto packaged software and reduced our headcount and working capital requirements dramatically in order to focus on the downloadbusiness, where games are downloaded from servers maintained by game companies, such as Valve, Microsoft, Sony and Nintendo. Accordingly,currently our customers are substantially users of games on those platforms. We continue to explore new distribution channelsfor our games.

Competition

Wecompete with many other first and third party publishers and developers within the video game industry.

Seasonality

Theinteractive entertainment business is highly seasonal, with sales typically higher during the peak holiday selling season duringthe fourth quarter of the calendar year. Traditionally, the majority of sales of our packaged software for this key selling periodship in our fiscal fourth and first quarters, which end on October 31 and January 31, respectively. Significant working capitalwas required to finance the manufacturing of inventory of products that shipped during these quarters. By contrast, our digitaldistribution activities are less subject to seasonality and do not require significant investments in inventory or accounts receivableduring the holiday seasons.

Researchand Development

Forthe fiscal year ended October 31, 2016, the Company spent $30,000 on research and development which comprised of funds used forgame development with Dinosaur Games, LLC. For the fiscal year ended October 31, 2015, the Company did not spend any funds onresearch and development.

GovernmentRegulation

Ourbusiness is subject to foreign and domestic government regulations including, but not limited to, user privacy, data collectionand retention, content, advertising and information security. For example, the video game industry requires interactive entertainmentsoftware publishers to provide consumers with information about graphic violence and sexually explicit material contained in theirinteractive entertainment software products. This system requires publishers to identify particular products within defined ratingcategories and communicate such ratings to consumers through appropriate package labeling and through advertising and marketingpresentations consistent with each product’s rating.

Properties

TheCompany currently leases office space at 4041 T Hadley Road, South Plainfield, New Jersey at a cost of approximately $1,613 permonth under a lease agreement that expires in March 2017.

OnDecember 1, 2016, the Company entered into a lease with Paradigm Resources, L.C. pursuant to which the Company will lease 5,331square feet of office and lab space in Salt Lake City, Utah at a monthly lease rate of $12,439. The lease will commence on January1, 2017 and terminate on December 31, 2017.

LegalProceedings

OnFebruary 26, 2015, a complaint for patent infringement was filed in the United States District Court for the Eastern Districtof Texas by Richard Baker, an individual residing in Australia, against Microsoft, Nintendo, the Company and a number of othergame publisher defendants. The complaint alleged that the Company’s Zumba Fitness Kinect game infringed plaintiff’spatents in motion tracking technology and the plaintiff sought damages in the amount of $1.3 million. In August 2015, the defendantsjointly moved to transfer the case to the Western District of Washington. On May 17, 2016, the Washington Court issued a schedulingorder that provides that defendants leave to jointly file an early motion for summary judgement in June 2016. On June 17, 2016,the defendants jointly filed a motion for summary judgment that stated that none of the defendants, including the Company, infringedupon the asserted patent. On July 9, 2016, Mr. Baker opposed the motion. On January 3, 2017, the Court granted the defendants’motion for summary judgment and the case was dismissed.

Inaddition to the item above, the Company at times may be a party to claims and suits in the ordinary course of business. We recorda liability when it is both probable that a liability has been incurred and the amount of the loss or range of loss can be reasonablyestimated. The Company has not recorded a liability with respect to the matter above. While the Company believes that it has validdefenses with respect to the legal matter pending and intends to vigorously defend the matter above, given the uncertainty surroundinglitigation and our inability to assess the likelihood of a favorable or unfavorable outcome, it is possible that the resolutionof the matter could have a material adverse effect on our consolidated financial position, cash flows or results of operations.

Employees

Wehad four full-time employees as of October 31, 2016.

PolarityTENV

PolarityTENV is the owner of a novel regenerative medicine and tissue engineering platform developed and patented by Dr. Denver Lough. Thisradical and proprietary technology employs a patient’s own cells for the healing of full-thickness, functionally-polarizedtissues. If clinically successful, the PolarityTE NV platform will be able to provide medical professionals with a truly new paradigmin wound healing and reconstructive surgery by utilizing a patient’s own tissue substrates for the regeneration of skin,bone, muscle, cartilage, fat, blood vessels and nerves. It is because PolarityTE NV uses a natural and biologically sound platformtechnology, which is readily adaptable to a wide spectrum of organ and tissue systems that PolarityTE NV and its world-renownedclinical advisory board are poised to drastically change the field and future of translational regenerative medicine.

PolarityTENV’s launch product which is being prepared for clinical trials is the first ever truly autologous skin regeneration constructof its kind, which can regrow full-thickness and functional polarized skin, including all layers (dermis & epidermis), hair,and skin appendages. The PolarityTE NV constructs will offer patients a new option for wound healing—”where self regeneratesself”. In parallel with the clinical development of the functionally-polarized skin regenerative product, the PolarityTENV platform provides a new and radical pipeline for expansion into numerous other tissues, including bone, muscle, cartilage,fat, blood vessels, nerves, solid organs and vascularized composite structures under a direct interface with practicing medicalleaders, in order to provide patients and the market with truly practical answers to difficult wound and tissue voids.

MANAGEMENT

EXECUTIVE OFFICERS

Thefollowing table sets forth information regarding the Company’s executive officers and key personnel.

ExecutiveOfficers:

Thefollowing is a brief summary of the background of each of our executive officers.

Dr.Denver Lough, 35, was appointed our Chairman, Chief Executive Officer and Chief Scientific Officer on December1, 2016. From August 2009, Dr. Lough has served as Department of Surgery Faculty and Translational Research Director at Laboratoryfor Regenerative Medicine and Applied Sciences, Institute for Plastic Surgery Southern Illinois University School of Medicine,and from June 2013, he has served as Director of Biomedical Applications for Laboratory for Craniofacial Regenerative MedicineJohns Hopkins Hospital Department of Plastic and Reconstructive Surgery. In addition, Dr. Lough was a lead research associatein the Vascularized Composite Allotransplantation Laboratory at the Johns Hopkins Hospital Department of Plastic and ReconstructiveSurgery and has been a research consultant to the Johns Hopkins Hendrix Burn Research Center. Dr. Lough was assembled as a memberamong other burn experts as a Taiwanese presidential disaster response team following the largest civilian burn disaster in 2015.

Since2012 Dr. Lough has been a Plastic & Reconstructive Surgery House Staff Officer at Johns Hopkins University School ofMedicine, Department of Plastic & Reconstructive Surgery. Dr. Lough also founded PolarityTE, LLC, PolarityTE NV and Lough& Associates LLC which are engaged in the business of developing intellectual property related to regenerative medicine andrelated fields. Dr. Lough has received numerous accolades and awards by national societies related to basic and translationalscience applications in tissue engineering, regenerative medicine, and immunology as well as within solid organ and reconstructivetransplantation. We believe that Dr. Lough is qualified to serve as a member of our Board because of his experience in clinicalmedicine and surgery as well as the development and innovation of technologies related to regenerative medicine and related patentsand intellectual property which the Company has reviewed for potential development. Dr. Lough holds an M.D. and PhD in Biochemistry,Molecular and Cell Biology from Georgetown University which he earned in 2012.

JohnStetson, 31, was appointed to our Board of Directors on December 1, 2016 and has served as our Chief Financial Officer,Executive Vice President and Secretary since September 25, 2015. Mr. Stetson has been the Managing Member of HS Contrarian InvestmentsLLC, a private investment firm with a focus on early stage companies since 2010. In addition, Mr. Stetson served as ExecutiveVice President, Chief Financial Officer, and Director of Marathon Patent Group, Inc. (MARA), a NASDAQ listed patent monetizationcompany from June 2012 to February 2015. Mr. Stetson was President & Co-Founder of Fidelity Property Group, Inc. from April2010 to July 2014, a real estate development group focused on acquisition, rehabilitation, and short-term disposition of singlefamily homes that completed 190 transactions, and generated over $46 million in sales. Mr. Stetson was an Investment Analyst from2008 to 2009 for Heritage Investment Group and worked in the division of Corporate Finance of Toll Brothers from 2007 to 2008.Mr. Stetson received his BA in Economics from the University of Pennsylvania. We believe that Mr. Stetson is qualified to serveas a member of our Board because of his skills in finance and public company management and administration.

Dr.Edward Swanson, 31, was appointed as Chief Operating Officer and Director of the Company on December 1, 2016. Followingcompletion of his undergraduate degree in Applied Sciences in Biomedical Sciences at the School of Engineering and Applied Sciencesat the University of Pennsylvania, Dr. Swanson received his medical degree from Harvard Medical School, where he attended as astudent from August 2008 to May 2012, graduating with honors for his thesis researching surgical outcomes within craniofacialand plastic surgery. From July 2012 until December 2016, Dr. Edward Swanson was a Surgical Resident in Plastic &Reconstructive Surgery in the Department of Plastic and Reconstructive Surgery at The Johns Hopkins University School of Medicine.During his time at Johns Hopkins, he served in a leadership role within the residency, sitting on the Program Evaluation Committeefrom July 2015 to December 2016 and The Johns Hopkins Hospital Housestaff Patient Safety and Quality Council from July 2014 toJune 2015. Dr. Swanson has extensive experience in basic and translational biomedical research, including as a research associatein Wound Healing in the Division of Plastic Surgery at the Brigham and Women’s Hospital and Harvard Medical School fromMay 2004 to August 2004, thesis student in Traumatic Brain Injury at the University of Pennsylvania from August 2006 to May 2007,research fellow in Pancreatic Cancer Cellular Biology at the Brigham and Women’s Hospital and Harvard Medical School fromJuly 2007 to July 2008, research fellow in Nanomedicine at Harvard Medical School and MIT from May 2008 to August 2008, and researchfellow in Vascularized Composite Allotransplantation at the Massachusetts General Hospital and Harvard Medical School during hisfinal year of medical school. In addition, Dr. Swanson directed the large animal translational research as a lead research associatein the Vascularized Composite Allotransplantation Laboratory in the Department of Plastic and Reconstructive Surgery at The JohnsHopkins University School of Medicine from July 2014 to June 2015, overseeing experimental projects funded by multimillion dollargrants. Furthermore, Dr. Swanson has demonstrated national and international leadership throughout the field of plastic and reconstructivesurgery at a young age, with greater than 40 peer-reviewed publications, five book chapters, and 30 national/international conferencepresentations. We believe that Dr. Swanson is qualified to serve as a member of our Board because of his experience in technologyrelated to regenerative medicine and related patents and technology and their clinical applications, which the Company has reviewedfor potential development.

Dr.Michael Neumeister, 55, was appointed Chief Medical Officer in December 2016. Dr. Neumeister has been associatedwith the Southern Illinois University School of Medicine in various positions since 1997, to wit: Chairman of Department of Surgery(2012-present); Chairman of the Institute of Plastic Surgery (2006-present); Professor at the Institute of Plastic Surgery (2005-present);Elvin G. Zook Endowed Chair of the Institute of Plastic Surgery (2008-present); Director-Hand/Micro Surgery Fellowship Programat Institute of Plastic Surgery (2007-present); Chief, Microsurgery and Research at Institute of Plastic Surgery (1999-present);Director-Plastic Surgery Residency Program at Institute of Plastic Surgery (1998-2008); Associate Professor at Institute of PlasticSurgery (2000-2005); and Assistant Professor at Institute of Plastic Surgery (1997-2000). Dr. Neumeister began his residency atDalhousie University in Halifax, Nova Scotia in general surgery and went on to complete his plastic surgery residency at the Universityof Manitoba. He continued his training as a microsurgery fellow at Harvard University’s Brigham & Women’s Hospitalin Boston and completed a one year hand and microsurgery fellowship at Southern Illinois University School of Medicine. Dr. Neumeisteris board certified in plastic surgery by the Royal College of Surgeons of Canada and the American Board of Plastic Surgery. Hehas also received his Certificate in (SOTH) Surgery of The Hand. Dr. Neumeister has received awards for presentations given regionally,nationally and internationally, has over 150 book chapters and articles, and has multiple research interests in tissue engineeringand regenerative medicine. Dr. Neumeister is the Editor in Chief of the official AAHS journal HAND. He is the past President ofthe American Society of Reconstructive Microsurgery, American Association for Hand Surgery, The Plastic Surgery Foundation (TheResearch Body of The American Society of Plastic Surgeons), Plastic Surgery Research Council, and the Midwest Association of PlasticSurgeons. Dr. Neumeister received his Doctor of Medicine from the University of Toronto in 1988 and his Bachelor of Science (Physiology/Pharmacology)from the University of Western Ontario in 1984.

Boardof Directors

Wecurrently have a staggered Board comprised of three classes and each director serves until the annual meeting associated withtheir class. Class I Board members, or Denver Lough and Edward Swanson, will serve until our 2018 annual meeting, Class II Directors,or John Stetson and Michael Brauser, will serve until our 2019 annual meeting and Class III Directors, or Mohit Bhansali, MichaelBeeghley and Barry Honig, will serve until our 2017 annual meeting.

Boardof Directors

(1)Member of our audit committee

(2)Member of our compensation committee

(3)Member of our nominating and corporate governance committee

BackgroundInformation

Thefollowing is a brief summary of the background of each of our directors.

Dr.Denver Lough – Chairman, Chief Executive Officer and Chief Scientific Officer

Biographicalinformation regarding Dr. Lough is provided above under Executive Officers.

JohnStetson – Chief Financial Officer, Executive Vice President, Secretary and Director

Biographicalinformation regarding Mr. Stetson is provided above under Executive Officers.

Dr.Edward Swanson – Chief Operating Officer and Director

Biographicalinformation regarding Dr. Swanson is provided above under Executive Officers.

MichaelBrauser – Director

MichaelBrauser has served as a member of our Board of Directors since September 25, 2015 and served as our Co-Chairman from September25, 2015 until December 1, 2016. Mr. Brauser has been a self-employed investor/venture capitalist since 2003 investing in bothpublic and private companies. He has been the manager of, and an investor with, Marlin Capital Partners, LLC, a private investmentcompany, since 2003. From 1999 through 2002, he served as President and Chief Executive Officer of Naviant, Inc. (eDirect, Inc.),an Internet marketing company. He was also the founder of Seisant Inc. (eData.com, Inc.). Between October 2005 and November 2006,he served as Chairman of the Board of Directors of SendTec, Inc. (SNDN), a publicly-traded customer acquisition ad agency. Heserved as the Chairman of the Board of Directors of Chromadex Corp. (CDXC) from October 2011 to March 2015 and served as the Chairmanof the Board of Directors of Interclick, Inc. (ICLK) from 2007 until its acquisition by Yahoo!. Mr. Brauser is currently the Chairmanof IDI, Inc. (IDI). The Company believes Mr. Brauser is qualified to serve as a director due to his extensive business and managementexpertise from his background as an executive officer of a number of public companies and his knowledge of accounting and finance.

MohitBhansali – Director

MohitBhansali has served as one of our directors since December 17, 2014. He served as an executive officer and a director of SpiralEnergy Tech Inc. from December 2011 through September 2014. In addition, Mr. Bhansali has served as the President, Secretary anda director of Northern Wind Energy Corp. (formerly Icarus Wind Energy, Inc.) since December 2011 and as the Chief Executive Officer,Chief Financial Officer and Treasurer of Northern Wind Energy Corp. from December 2011 through October 2013, as a director ofSilver Horn Mining Ltd. since November 2013, as a co-founder and the Chief Executive Officer of Equity Stock Transfer since November2011, as a partner of Deadbeat Records LLC since 2010, as a securities specialist at Sichenzia Ross Friedman Ference LLP from2009 through 2011 and as a securities specialist at Haynes and Boone, LLP from 2006 through 2009. Mr. Bhansali worked as an equitytrader with Tradescape and Etrade Securities from 1999 through 2002. In considering Mr. Bhansali as a director of the Company,the Board considered his entrepreneurial experience, his knowledge of capital markets and his experience in a variety of executiveroles and his management experience.

MichaelBeeghley – Director

MichaelBeeghley was appointed to our Board of Directors on December 18, 2015. Mr. Beeghley has 25 years of financial industry experience,including 23 years specifically in corporate finance and financial advisory services. Mr. Beeghley has been serving as Presidentof Applied Economics LLC (“Applied Economics”), a national corporate finance and financial advisory services firmfor 18 years. As President of Applied Economics, Mr. Beeghley has initiated managed and closed over $1 billion in corporate financetransactions and has managed, completed and signed over 2,000 financial advisory engagements. Mr. Beeghley is a national experton mergers & acquisitions and securities valuation, and has been quoted or interviewed for the Atlanta Journal-Constitution,Atlanta Business Chronicle, The Georgia Business Report (GPTV), Catalyst Magazine, and Reuters News Service (New York). He hasspoken on financial topics throughout the United States and has been an instructor for the American Institute of Certified PublicAccountants, teaching business valuation to societies in ten states. Additionally, Mr. Beeghley has testified as an expert andprovided expert opinions on numerous economic, financial and securities issues. Prior to forming Applied Economics, Mr. Beeghleywas a Manager in the Corporate Finance Group of Ernst & Young, LLP and a Senior Analyst in the Corporate Finance Group ofPricewaterhouseCoopers. Mr. Beeghley is qualified to serve as a director due to his extensive corporate finance background.

BarryHonig – Director

BarryHonig has served as a member of our Board of Directors since September 25, 2015 and served as our Chairman and Chief ExecutiveOfficer from September 25, 2015 until December 1, 2016. Mr. Honig has been President of GRQ Consultants, Inc., since January 2004,where he is a private investor and consultant to early stage companies. Mr. Honig is a founder and Director of Pershing Gold (PGLC),a Nasdaq listed emerging gold producer, since September 29, 2010. Mr. Honig is currently the Chairman of the Board of Directorsof Levon Resources Ltd. Mr. Honig was the Founder/Co-Chairman of InterCLICK, Inc. (ICLK) from 2007 until its sale to Yahoo! Inc.in December 2011. Mr. Honig served as Co-Chairman of Chromadex Corporation (CDXC), a natural products company, from 2011 to 2015.Mr. Honig graduated from George Washington University in 1993 with a BA in Business Administration. The Company believes Mr. Honigis qualified to serve as a director due to his extensive business and management expertise and his extensive knowledge of capitalmarkets.

Independenceof the Board of Directors

TheBoard has reviewed the materiality of any relationship that each of our directors has with PolarityTE NV, either directly or indirectly.Based upon this review, the Board has determined that the following members of the Board are “independent directors”as defined by the rules of The NASDAQ Stock Market: Michael Beeghley, Mohit Bhansali and Michael Brauser.

Arrangementsbetween Officers and Directors

Toour knowledge, there is no arrangement or understanding between any of our officers and any other person, including Directors,pursuant to which the officer was selected to serve as an officer.

FamilyRelationships

Noneof our Directors are related by blood, marriage, or adoption to any other Director, executive officer, or other key employee

OtherDirectorships

Otherthan as disclosed above, none of the Directors of the Company are also directors of issuers with a class of securities registeredunder Section 12 of the Exchange Act (or which otherwise are required to file periodic reports under the Exchange Act).

LegalProceedings

Weare not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to anymatters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to anyof the items set forth under Item 401(f) of Regulation S-K.

CompensationCommittee Interlocks and Insider Participation

TheCompensation Committee has no interlocks with other companies.

EXECUTIVECOMPENSATION

SummaryCompensation Table

Thefollowing Summary Compensation Table sets forth summary information as to compensation paid or accrued during the last two fiscalyears ended October 31, 2016 and October 31, 2015. During the last two fiscal years ended October 31, 2016 and October 31, 2015,none of our other executive officers earned compensation in excess of $100,000.

(1)Represents the aggregate grant date fair value for restricted stock awards granted during fiscal years 2015 and 2016, respectively,computed in accordance with FASB ASC Topic 718. See Note 9 to our consolidated financial statements reported in our Annual Reporton Form 10-K for our fiscal year ended October 31, 2016 for details as to the assumptions used to determine the grant date fairvalue of the restricted stock awards.

(2)Represents the aggregate grant date fair value for option awards granted during fiscal years 2015 and 2016, respectively, computedin accordance with FASB ASC Topic 718. See Note 9 to our consolidated financial statements reported in our Annual Report on Form10-K for our fiscal year ended October 31, 2016 for details as to the assumptions used to determine the grant date fair valueof the option awards.

(3)Represents amounts paid to named executive officers in the applicable year pursuant to the Company’s STI Plan.

(4)Represents health and dental insurance premiums in excess of coverage provided to other employees.

(5)Appointed on September 25, 2015. Resigned as Chief Executive Officer and Chairman on December 1, 2016.

(6)Appointed on September 25, 2015.

(7)Served as Chief Executive Officer from July 27, 2015 until September 25, 2015.

(8)Resigned on July 27, 2015.

(9)Resigned on March 17, 2015.

(10)Served as Chief Accounting Officer from April 1, 2015 to September 25, 2015, prior to this beginning May 2011, he served as theCompany’s Corporate Controller.

(11)Represents 87,500 shares at a grant date fair value of $5.16 per common share.

(12)Represents 66,666 shares at a grant date fair value of $7.44 per common share.

(13)Represents 50,000 shares at a grant date fair value of $7.44 per common share.

(14)Represents 8,333 shares at a grant date fair value of $5.16 per common share.

(15)Represents 16,667 shares at a grant date fair value of $6.96 per common share.

(16)Represents 3,882 shares at a grant date fair date value of $4.08 per common share.

(17)Represents 2,588 shares at a grant date fair value of $4.08 per common share and 5,000 shares at a grant date fair value of $7.20per common share.

(18)Represents 3,333 shares at a grant date fair value of $8.04 per common share.

(19)Represents stock options to purchase 87,500 common shares at an exercise price of $4.80 per common share.

(20)Represents stock options to purchase 8,333 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(21)Represents stock options to purchase 1,166 common shares at an exercise price of $8.58 per common share.

(22)Represents stock options to purchase 11,958 shares of common stock at an exercise price of $4.08 per common share.

(23)Represents stock options to purchase 5,745 common shares at an exercise price of $4.08 per common share.

(24)Represents $13,859 paid for health and dental insurance premiums in excess of coverage provided to other employees as well as$500,000 paid in severance payments paid to Zift Interactive, LLC.

(25)Represents $5,900 paid for health and dental insurance premiums in excess of coverage provided to other employees and $300,000in severance payments.

NarrativeDisclosure to Summary Compensation Table

IncentiveBonus Opportunity

TheCompensation Committee has the authority to award incentive bonuses to our executives. The incentive bonus program is based onthe Company’s fiscal year performance.

Theincentive bonus program is an important component of total cash compensation because it rewards our executives for achieving annualfinancial and operational goals and emphasizes variable or “at risk” compensation.

OnApril 19, 2013, the Compensation Committee approved the adoption of a new annual short-term incentive plan for fiscal year 2013and subsequent years (the “STI Plan”). In 2013, under the STI Plan, each of the named executive officers was eligibleto receive an incentive bonus based upon a targeted percentage of his base salary, which was 100% for the Chief Executive Officerand 50% for the Chief Financial Officer. The incentives could be earned based on our performance relative to a mix of strategicobjectives, such as (i) growing cash flow from our console business, (ii) expanding our digital games business, measured in termsof revenue, infrastructure and talent acquisitions, business acquisitions, and product pipeline, and (iii) managing to adjustedoperating income, cash flow and liquidity goals, eliminating operating losses on certain platforms, and repositioning the Companyto invest in growth areas. In addition, in determining the eligibility for bonuses under the plan, the payout level for thestrategic objectives was based on the Committee’s discretionary assessment of each officer’s performance relativeto the overall mix of objectives. Based on its review of overall performance, the Compensation Committee approved an incentivepayout of $150,000 for the Chief Executive Officer and $84,000 for the Chief Financial Officer.

Noincentive plan was offered for fiscal year 2016.

Long-TermIncentives

Webelieve that long-term performance will be enhanced through equity awards that reward our executives and other employees for maximizingstockholder value over time and that align the interests of our executives and other employees with those of stockholders. TheCompensation Committee believes that the use of equity awards offers the best approach to achieving our compensation goals becauseequity ownership ties a significant portion of an individual’s compensation to the performance of our stock.

OnMarch 30, 2015, at our 2015 annual meeting, our stockholders approved the Company’s 2014 Equity Incentive Plan (the “2014Plan”) and the reservation of 2,250,000 shares of our Common Stock thereunder. On May 10, 2016, at our 2016 annualmeeting, our stockholders approved the Company’s 2016 Equity Incentive Plan (the “2016 Plan” and together withthe 2014 Plan, the “Plans”) and the reservation of 4,000,000 shares of our Common Stock thereunder. Awards underthe Plans may be granted pursuant to the Plans only to persons who are eligible persons. Under the Plans, “Eligible Person”means any person who is either: (a) an officer (whether or not a director) or employee of the Company or one of its subsidiaries;(b) a director of the Company or one of its subsidiaries; or (c) an individual consultant who renders bona fide services (otherthan services in connection with the offering or sale of securities of the Company or one of its subsidiaries in a capital-raisingtransaction or as a market maker or promoter of securities of the Company or one of its subsidiaries) to the Company or one ofits subsidiaries and who is selected to participate in the Plans by the Plan administrator; provided, however, that an EligiblePerson may only participate in the Plans if such participation would not adversely affect either the Company’s eligibilityto use Form S-8 to register, under the Securities Act, the offering and sale of shares issuable under the Plans by the Companyor the Company’s compliance with any other applicable laws.

OnDecember 17, 2014, the Company granted restricted stock shares to certain of its executive officers and directors in considerationfor their respective roles in the Company. These restricted stock awards, were granted under the Company’s Amendedand Restated 2004 Employee, Director and Consultant Incentive plan and were subject to a trigger event that occurred on September30, 2015, which vested the shares in full.

Theshares granted to our officers and directors under these stock awards are as follows:

OnDecember 17, 2014, the Company granted options to purchase Common Stock to certain of its executive officers and directors inconsideration for their respective roles in the Company. The stock options were granted with an exercise price of $4.08per share and would fully vest upon a trigger event, which occurred on September 30, 2015, and are exercisable until December17, 2019. They were granted under the 2014 Plan.

Theshares granted to our officers and directors under these stock awards are as follows:

9,339

OnApril 23, 2015, Laurence Aronson, Mohit Bhansali and Trent Davis were each granted options to purchase 1,191 shares of CommonStock with an exercise price of $8.40 per share. These awards were granted pursuant to the 2014 Plan. The options fully vestedon October 23, 2015, and they are exercisable until April 23, 2020.

OnJune 27, 2015, David Rector was granted 16,667 restricted stock units. The vesting on this grant was accelerated on January 12,2016. These awards were granted under the 2014 Plan.

OnJuly 27, 2015, David Rector was granted options to purchase 1,166 shares of Common Stock with an exercise price of $8.58per share. These awards were granted under the 2014 Plan.

OnSeptember 30, 2015, we entered into Restricted Stock Agreements with certain of our executive officers and directors. The stockawards provide for grants of Common Stock to our officers and directors under the 2014 Plan. The stock awards all vested on December1, 2016.

Theshares of Common Stock granted to our officers and directors under these stock awards are as follows:

OnDecember 18, 2015, we entered into Restricted Stock Agreements with certain of our executive officers and directors. The stockawards provide for grants of common stock to our officers and directors under the 2014 Plan. The stock awards all vested on December1, 2016.

Theshares of Common Stock granted to our officers and directors under these stock awards are as follows:

Additionally,on December 18, 2015, Michael Brauser, Andrew Kaplan, Edward Karr, and Michael Beeghley were granted option to purchase1,587 stock shares of Common Stock with an exercise price of $6.30 per share. These options fully vested six months from the grantdate.

OnJune 1, 2016, Michael Brauser, Michael Beeghley, Andrew Kaplan, Edward Karr, Mohit Bhansali and David Rector were granted optionsto purchase 1,915 shares of Common Stock at an exercise price of $5.22 per share which options vested in full six months fromthe date of grant.

OnDecember 7, 2016, the Company granted options with an exercise price of $3.12 per share to the individuals listed below pursuantto the 2017 Plan. The 2017 Plan and options are subject to stockholder approval.

Employmentand Separation Agreements

During2015 and 2016, we had employment agreements with each of the named executive officers.

DenverLough’s Employment Agreement

OnDecember 1, 2016, the Company entered into an employment agreement with Dr. Denver Lough (the “Lough Employment Agreement”).Pursuant to the terms of the Lough Employment Agreement, Dr. Lough will serve as Chairman of the Board and as Chief ExecutiveOfficer and Chief Scientific Officer of the Company for a term of one year which shall be automatically renewed for successiveone year periods thereafter unless earlier terminated. Pursuant to the Lough Employment Agreement, the Company shall pay Dr. Lough(i) a one-time signing bonus of $100,000, (ii) an annual base salary of $350,000, (iii) an annual discretionary bonus, as determinedby the Board, in an amount up to 100% of Dr. Lough’s then current base salary and (iv) 10 year options (the “LoughOptions”) to purchase up to 1,000,000 shares of the Company’s Common Stock at an exercise price of $3.15 per share(equal to 100% of the market price as defined by NASDAQ (“Fair Market Value”)) which Options shall vest in 24 equalinstallments commencing on the one month anniversary of the Lough Employment Agreement. The Lough Options were granted pursuantto the Company’s 2017 Equity Incentive Plan (the “2017 Plan”) and the exercise of the Lough Options and the2017 Plan are subject to stockholder approval.

EdwardSwanson’s Employment Agreement

OnDecember 1, 2016, the Company entered into an employment agreement with Edward Swanson (the “Swanson Employment Agreement”).Pursuant to the terms of the Swanson Employment Agreement, Dr. Swanson will serve as Chief Operating Officer of the Company fora term of one year which shall be automatically renewed for successive one year periods thereafter unless earlier terminated.Pursuant to the Swanson Agreement, the Company shall pay Dr. Swanson (i) a one-time signing bonus of $100,000, (ii) an annualbase salary of $300,000, (iii) an annual discretionary bonus, as determined by the Board, in an amount up to 100% of Dr. Swanson’sthen current base salary and (iv) 10 year options (the “Swanson Options”) to purchase up to 846,000 shares of theCompany’s Common Stock pursuant to the 2017 Plan at Fair Market Value which Swanson Options shall vest in 24 equal installmentscommencing on the one month anniversary of the Swanson Employment Agreement and are subject to stockholder approval.

JesseSutton’s Employment Agreement and Separation Agreement

Mr.Sutton’s employment agreement provided for an annual base salary of $363,000 and a discretionary bonus of up to 100% ofhis base salary. On July 27, 2015, Mr. Sutton resigned from his position as Chief Executive Officer of the Company and the Companyentered into a separation agreement with Mr. Sutton (the “Sutton Separation Agreement”). Pursuant to the terms ofthe Sutton Separation Agreement, for a period of 24 months following Mr. Sutton’s resignation, Mr. Sutton will provide consultingand support services (the “Services”) to the Company’s Download Business (as defined in the Separation Agreement).In addition, Mr. Sutton is expected to receive a severance payment, which will include 50% of the Net Monthly Revenues (as definedin the Sutton Separation Agreement) generated by the Company from the Download Business (as defined in the Sutton Separation Agreement),but in no event more than $10,000 per month; provided that Mr. Sutton is still providing the Services. In addition,the Company continued its contributions towards Mr. Sutton’s health care benefits until the earlier of (i) 12 months followingMr. Sutton’s resignation or (ii) until Mr. Sutton becomes covered by an equivalent benefit. Lastly, Mr. Sutton shall has18 months from his date of resignation to exercise any previously issued stock options, except that the original expiration dateof any such options shall not be extended.

MichaelVesey’s Employment Agreement and Separation Agreement

Mr.Vesey’s employment agreement provided for an annual base salary of $300,000 and an annual cash bonus to be determined inthe sole discretion of the Company. On February 17, 2015, Mr. Vesey entered into a separation agreement (the “Vesey SeparationAgreement”) with the Company pursuant to which Mr. Vesey resigned as the Company’s Chief Financial Officer effectiveMarch 17, 2015. Pursuant to the Vesey Separation Agreement, Mr. Vesey provided general business and consulting services to theCompany to assist in transitional needs and activities of the Company for a period of six months following his resignation. Inaddition, upon his resignation and in addition to the other benefits as outlined his employment agreement, Mr. Vesey receiveda lump sum payment of $200,000 and an additional payment of $100,000 thereafter payable in six equal monthly installments. Moreover,the Company agreed to vest all of Mr. Vesey’s previously unvested securities, other than securities granted pursuant tothe Company’s 2014 Plan and, in consideration for Mr. Vesey’s consulting services, the Company granted Mr. Vesey 5,000shares of restricted Common Stock under the 2014 Plan.

BarryHonig’s Employment Agreement

Mr.Honig’s employment agreement provides for an annual base salary of $120,000 and a discretionary bonus to be determined bythe Compensation Committee. Pursuant to the terms of the employment agreement, Mr. Honig would be entitled to certain paymentsand benefits if the Company terminated the executive’s employment without “cause” or the executive terminatedhis employment for “good reason”. Benefits are also provided if the executive is terminated in connection with a changein control. The benefit levels under the employment agreement generally include continued payment of base salary, a bonus forthe year of termination, accelerated vesting of equity awards and continued welfare benefits, and are described in more detailunder the “Potential Payments Upon Termination or Change-In-Control” below. Mr. Honig resigned as Chief ExecutiveOfficer on December 1, 2016.

JohnStetson’s Employment Agreement

Mr.Stetson’s employment agreement provides for an annual base salary of $120,000 and a discretionary bonus to be determinedby the Compensation Committee. Pursuant to the terms of the employment agreement, Mr. Stetson would be entitled to certain paymentsand benefits if the Company terminated the executive’s employment without “cause” or the executive terminatedhis employment for “good reason”. Benefits are also provided if the executive is terminated in connection with a changein control. The benefit levels under the employment agreements generally include continued payment of base salary, a bonus forthe year of termination, accelerated vesting of equity awards and continued welfare benefits, and are described in more detailunder the “Potential Payments Upon Termination or Change-In-Control” below.

PotentialPayments Upon Termination or Change-In-Control

Wehave entered into agreements that require us to make payments and/or provide benefits to certain of our executive officers, includingMr. Honig and Mr. Stetson, in the event of a termination of employment or a change of control. The following summarizes the potentialpayments to each named executive officer for which we have entered into such an agreement assuming that one of the events identifiedbelow occurs.

Dr.Denver Lough, Chief Executive Officer and Chief Scientific Officer

IfDr. Lough terminates the Lough Employment Agreement for Good Reason (as defined in the Lough Employment Agreement) or a Changeof Control (as defined in the Lough Employment Agreement) or the Company terminates the Lough Employment Agreement without Cause(as defined in the Lough Employment Agreement), then Dr. Lough shall be entitled to receive (i) the sum of his then base salaryfrom the date of termination, (ii) reasonable expenses incurred by Dr. Lough in connection with the performance of his duties,(iii) accrued but unused vacation time through the date of termination, (iv) the sum of this then annual bonus and (v) all ShareAwards (as defined in the Lough Employment Agreement) earned and vested prior to the date of termination. In addition, Dr. Loughshall have the right to Participation Payments (as defined in the Lough Employment Agreement) from commercial transactions associatedwith the Patents (as defined in the Lough Employment Agreement) and intellectual property rights associated with such Patents.If the Company terminates the Lough Employment Agreement for Cause, the Company will have no further obligations or liabilityto Dr. Lough except for the obligation to (i) pay Dr. Lough his then annual salary through the date of termination, (ii) unpaidannual bonus pursuant to the terms of the Lough Employment Agreement, (iii) reasonable expenses incurred by Dr. Lough in connectionwith the performance of his duties and (v) accrued but unused vacation time through the date of termination.

Dr.Swanson, Chief Operating Officer

IfDr. Swanson terminates the Swanson Employment Agreement for Good Reason (as defined in the Swanson Employment Agreement) or aChange of Control (as defined in the Swanson Employment Agreement) or the Company terminates the Swanson Employment Agreementwithout Cause(as defined in the Swanson Employment Agreement), then Dr. Swanson shall be entitled to receive (i) the sum of histhen base salary from the date of termination, (ii) reasonable expenses incurred by Dr. Swanson in connection with the performanceof his duties, (iii) accrued but unused vacation time through the date of termination, (iv) the sum of this then annual bonusand (v) all Share Awards (as defined in the Swanson Employment Agreement) earned and vested prior to the date of termination.If the Company terminates the Swanson Employment Agreement for Cause, the Company will have no further obligations or liabilityto Dr. Swanson except for the obligation to (i) pay Dr. Swanson his then annual salary through the date of termination, (ii) unpaidannual bonus pursuant to the terms of the Swanson Employment Agreement, (iii) reasonable expenses incurred by Dr. Swanson in connectionwith the performance of his duties and (v) accrued but unused vacation time through the date of termination.

Mr. JohnStetson, Chief Financial Officer

Pursuantto his employment agreement, if the Company terminates Mr. Stetson’s employment without “cause” (as such termis defined Mr. Steton’s employment agreement) or Mr. Stetson resigns for “good reason” or following a “Changeof Control” (as such terms are defined in Mr. Stetson’s employment agreement), he will receive severance benefitsfrom the Company, including a cash amount equal to 100% of Mr. Stetson’s base salary, annual bonus and share awards duringthe preceding year.

Mr.Barry Honig, Former Chief Executive Officer

Pursuantto his employment agreement, if the Company terminates Mr. Honig’s employment without “cause” (as such termis defined in Mr. Honig’s employment agreement) or Mr. Honig resigns for “good reason” or following a “Changeof Control” (as such terms are defined in Mr. Honig’s employment agreement), he will receive severance benefits fromthe Company, including a cash amount equal to 100% of Mr. Honig’s base salary, annual bonus and share awards during thepreceding year. Mr. Honig resigned as Chief Executive Officer on December 1, 2016.

OutstandingEquity Awards at Fiscal Year-End

Thefollowing table shows grants of stock options and grants of unvested stock awards outstanding on the last day of the fiscal yearended October 31, 2016, to each of the executive officers named in the Summary Compensation Table.

DirectorCompensation

Thefollowing table shows the total compensation paid or accrued during the fiscal year ended October 31, 2016 to each of our directors,current and former.

(1)Represents the aggregate grant date fair value for stock awards granted by us in fiscal year 2016 computed in accordance withFASB ASC Topic 718. See Note 9 to our consolidated financial statements reported in our Annual Report on Form 10-K for fiscalyear ended October 31, 2016 for details as to the assumptions used to determine the fair value of the stock awards.

(2)Represents the aggregate grant date fair value for options granted by us in fiscal year 2016 computed in accordance with FASBASC Topic 718. See Note 9 to our consolidated financial statements reported in our Annual Report on Form 10-K for fiscal yearended October 31, 2016 for details as to the assumptions used to determine the fair value of the option awards.

(3)Represents 87,500 shares at a grant date fair value of $5.16 per common share.

(4)Represents 25,000 shares at a grant date fair value of $5.16 per common share.

(5)Represents 16,667 shares at a grant date fair value of $5.16 per common share.

(6)Represents 7,292 shares at a grant date fair value of $5.16 per common share.

(7)Represents 5,208 shares at a grant date fair value of $5.16 per common share.

(8)Represents 8,333 shares at a grant date fair value of $5.16 per common share.

(9)Represents stock options to purchase 87,500 common shares at an exercise price of $4.80 per common share.

(10)Represents stock options to purchase 87,500 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(11)Represents stock options to purchase 50,000 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(12)Represents stock options to purchase 16,667 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(13)Represents stock options to purchase 7,292 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(14)Represents stock options to purchase 5,208 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(15)Represents stock options to purchase 8,333 common shares at an exercise price of $4.80 per common share and to purchase 1,916common shares at an exercise price of $5.22 per common share.

(16)Resigned as Co-Chairman on December 1, 2016 but remained a director of the Company.

(17)Resigned as Co-Chairman on December 1, 2016 but remained a director of the Company.

(18)Resigned on December 1, 2016.

(19)Resigned on December 1, 2016.

(20)Resigned on December 1, 2016.

DirectorCompensation Policy

Duringthe fiscal year ended October 31, 2016, our directors were compensated in accordance with the following terms. Each non-employeedirector received an annual cash retainer of $5,000, other than the Chair of the Company’s Audit Committee, who received$6,000. In addition, the Chairman of the Board received an additional annual cash retainer of $10,000.

Eachnon-employee director was also entitled to receive 5-year options to purchase shares of the Company’s Common Stock valuedat $10,000, calculated by dividing $10,000 by the closing stock price on the date the award was granted. The options vest in fullsix months after the grant date, provided the applicable director is still serving on the Board.

Eachnon-employee director was entitled to a fee of $2,500 for each Board meeting at which the director was present in person, andeach member of our Board committees was entitled to a fee of $800 for each committee meeting at which the director was presentin person. Each non-employee director was entitled to a fee of $300 for each teleconference called by either the Chairman of theBoard, the President of the Company or the Chairman of a Board committee.

SECURITYOWNERSHIP OF CERTAIN

BENEFICIALOWNERS AND MANAGEMENT

Thefollowing table sets forth information known to us concerning the beneficial ownership of the Company’s Common Stock asof January 17, 2017 for:

Beneficialownership is determined in accordance with the rules and regulations of the SEC. In general, a person is deemed to be the beneficialowner of (i) any shares of the Company’s Common Stock over which such person has sole or shared voting power or investmentpower, plus (ii) any shares which such person has the right to acquire beneficial ownership of within 60 days of theabove date, whether through the exercise of options, warrants or otherwise. Applicable percentages are based on 4,250,617 sharesof Common Stock outstanding on the date above, adjusted as required by rules promulgated by the SEC. Except as otherwise indicated,addresses are c/o PolarityTE, Inc., 4041-T Hadley Road, S. Plainfield, New Jersey 07080.