December 8, 2019

Ms. Minnie Baylor-Henry

Director at PolarityTE (PTE)
c/o Ms. Maggie Dalton
Stoel Rives LLC

Re: Observations and Opinions about PTE

Dear Ms. Baylor-Henry,

This is my 23rd letter to you over the course of this past year. As always, I
share my observations and opinions regarding PTE.

A. Phillip Frost and the Frost gang specialize in market manipulation and
securities fraud. No company that has been used for a Frost gang P&D
securities fraud has ever become a profitable operating company.

1. There are fundamental reasons for this:

a. The Frost gang P&D companies never had a viable business model to begin
with. The “story” behind each of the companies was fabricated and used to
promote and sell the stock.
b. The stock structure and the company organization (including the placement
of key company insiders) were designed for a P&D securities fraud,
typically resulting in a byzantine mess in the wake of the initial fraud after
Frost, Honig and others took their initial profits.
c. Frost gang members typically retain ownership, control and influence at the
company after the P&D.
d. Company insiders are typically involved in the P&D, and after the P&D
their primary motives at the company are to collect their salaries and conceal
the past frauds. This greatly hampers any effort to move the company
forward in a positive direction. Litigation and federal investigations are
often involved, providing further distraction.
e. These companies can never be completely honest and transparent about their
motives and business prospects.
f. These irreparably damaged companies are often allowed to linger on as
money-losing entities because the SEC allows them to continue to sell new
shares to investors, frequently by giving effect to new registration statements
after the initial P&D is over.

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 g. The companies’ assets are often looted by Frost gang members and company
insiders (e.g., OPK paying Frost’s legal fees, OPK paying rent to Frost, Frost
using COCP’s assets to buy Dan Fisher’s silence as described in ​Pederson v
Frost II​, RDVT paying Brauser exorbitant fees to run the company from
behind the scenes, etc…).

2. Examples of Frost gang P&D companies include:

a. BZNE/COCP - market cap down from over $1B to about $50M
b. MGTI
c. MBVX - now in bankruptcy
d. VPCO/HCMC
e. TWER
f. RIOT
g. AWSM

B. It is 100% clear that COOL/PTE was used for a Frost gang P&D securities
fraud.
1. Many people, including me, have previously described the COOL/PTE
P&D securities fraud in intricate detail.
2. Chris Carey (aka Sharesleuth) has detailed some of the illegal profits by
Frost and Honig at COOL/PTE.
3. The SEC is investigating, and has issued numerous subpoenas.
4. PTE fits all the criteria detailed in section A.1. above.

C. PolarityTE's SkinTE(TM) product has been used on human patients for two
years (since December of 2017), but PTE continues to evade fundamental
questions about the SkinTE product.

1. PTE has not disclosed the materials and methods behind SkinTE. In fact,
PTE’s disclosures on this topic have been wildly inconsistent.
2. There has not been a single quality peer-reviewed publication about SkinTE.
Such a publication would have to include a materials and methods section,
thereby exposing PTE’s frauds related to SkinTE.
3. PTE’s patent portfolio (8 published U.S. applications, no issued U.S.
patents) indicates that:
a. SkinTE almost certainly included enzymes in December 2017.
b. Patent filings after December 2017 indicate that the composition and
methods of SkinTE may have changed, without any public disclosure.

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D. There are ongoing efforts to pump the PTE stock price.
1. I wrote to you earlier (September 25) about the “mini P&D” at PTE.
2. Here is an example of an even more recent PTE pump:
https://seekingalpha.com/article/4309972-polarityte-turning-ship-around
3. This SA story contains numerous misrepresentations and distortions.
a. SA article: “if this was a pump and dump, it is very, very bad at it.”
My response: See section B above, especially the Sharesleuth article
about the tens of million of profits by Honig and Frost from selling
PTE shares in the initial P&D. In fact, COOL/PTE is Barry Honig’s
magnum opus of P&D securities frauds.
b. SA article: “the one sale you see is Steve Gorlin” My response:
Take a look at recent SEC filings showing insider sales by Hoyler,
Lough and others.
c. SA article: “there is nothing else in the exact category of SkinTE.”
My response: This is a literally true statement, but only because
SkinTE is mostly a fraud. However, Avita’s Recell(R) product is very
similar, and Recell has issued patents and an FDA approval. Also,
unlike PolarityTE, Avita is in the position to be honest and transparent
with the investing public.
d. The SA article avoids addressing the real issues at PTE, while
distracting readers with:
I. misleading business metrics like gross margins
II. the recent shareholders’ right plan
III. the idea that your personal presence is going to solve the 361
pathway issue with the FDA

E. Insiders continue to dump PTE shares. (see SEC filings)

F. PTE’s new focus of using SkinTE on diabetic foot ulcers (DFUs) provides
further opportunity for PTE to mislead the public.
1. It is well known that diabetics may have problems with wound healing,
especially if they have poor blood sugar control.
2. Controlling blood sugar may be far more important to wound healing in
DFUs than the use of SkinTE.
3. PTE has presented only anecdotal evidence of treating DFUs with SkinTE.
4. Without controlled clinical trials, there is no real evidence that SkinTE is
beneficial for treating DFUs.

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 Ms. Baylor-Henry, I hope that you find this information to be useful as you
carry out your duties as a director at PTE. As usual, I am posting this letter on
ScribD with a link from Twitter.

Regards,
Lee Pederson

Cc:
SEC OIG
Joe Dixon (attorney for Phillip Frost)

Bcc:
Federal law enforcement agents
Journalists and business writers
Other interested parties