(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e),
240.13d-1(f) or 240.13d-1(g), check the following box.
¨
*The remainder of this cover page shall be filled out for a
reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder
of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of
1934 (“Act”) or otherwise subject to the liabilities of that section of the Act, but shall be subject to all other
provisions of the Act (however, see the Notes).
CUSIP No. 30233M 107
|
13D
|
Page 1 of 9
|
1
|
NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
DST Capital LLC
|
2
|
CHECK THE APPROPRIATE
BOX IF A MEMBER OF A GROUP
(a)
¨
(b)
x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
WC
|
5
|
CHECK IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e)
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
|
NUMBER OF
SHARES
BENEFICIALLY OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
0 shares
|
8
|
SHARED VOTING POWER
500,000 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
9
|
SOLE DISPOSITIVE POWER
0 shares
|
10
|
SHARED DISPOSITIVE POWER
500,000 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
500,000 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.99%*
|
14
|
TYPE OF REPORTING PERSON
OO
|
*As more fully described in Item 3, the preferred stock and
the warrants are subject to a 49.99% ownership limitation, and the percentage set forth in row (13) gives effect to such limitation.
However, as more fully described in Item 5, the securities reported in rows (8), (10) and (11) show the number of shares of common
stock that would be issuable upon full exercise of such reported securities and do not give effect to such limitation. Therefore,
the actual number of shares of common stock beneficially owned by such Reporting Person, after giving effect to such limitation,
is less than the number of securities reported in rows (8), (10) and (11).
CUSIP No. 30233M 107
|
13D
|
Page 2 of 9
|
1
|
NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Polyvia LLC
|
2
|
CHECK THE APPROPRIATE
BOX IF A MEMBER OF A GROUP
(a)
¨
(b)
x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
WC
|
5
|
CHECK IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e)
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
Massachusetts
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
2,500 shares of common stock
7,500 shares of common stock issuable upon conversion
of preferred stock
15,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
8
|
SHARED VOTING POWER
0
shares
|
9
|
SOLE DISPOSITIVE POWER
2,500 shares of common stock
7,500 shares of common stock issuable upon conversion
of preferred stock
15,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
10
|
SHARED DISPOSITIVE POWER
0 shares
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
2,500 shares of common stock
7,500 shares of common stock issuable upon conversion
of preferred stock
15,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.97%*
|
14
|
TYPE OF REPORTING PERSON
OO
|
*As more fully described in Item 3, the preferred stock and
the warrants are subject to a 49.99% ownership limitation.
CUSIP No. 30233M 107
|
13D
|
Page 3 of 9
|
1
|
NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Jing Chen
|
2
|
CHECK THE APPROPRIATE
BOX IF A MEMBER OF A GROUP
(a)
¨
(b)
x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e)
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
China
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
9,000 shares of common stock
27,000 shares of common stock issuable upon conversion
of preferred stock
174,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
8
|
SHARED VOTING POWER
0
shares
|
9
|
SOLE DISPOSITIVE POWER
9,000 shares of common stock
27,000 shares of common stock issuable upon conversion
of preferred stock
174,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
10
|
SHARED DISPOSITIVE POWER
0 shares
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
9,000 shares of common stock
27,000 shares of common stock issuable upon conversion
of preferred stock
174,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.61%*
|
14
|
TYPE OF REPORTING PERSON
IN
|
*As more fully described in Item 3, the preferred stock and
the warrants are subject to a 49.99% ownership limitation.
CUSIP No. 30233M 107
|
13D
|
Page 4 of 9
|
1
|
NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Jiong Shao
|
2
|
CHECK THE APPROPRIATE
BOX IF A MEMBER OF A GROUP
(a)
¨
(b)
x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e)
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
United States
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
6,500 shares of common stock
19,500 shares of common stock issuable upon conversion
of preferred stock
39,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
8
|
SHARED VOTING POWER
0 shares
|
9
|
SOLE DISPOSITIVE POWER
6,500 shares of common stock
19,500 shares of common stock issuable upon conversion
of preferred stock
39,000 shares of common stock issuable upon exercise
of warrants (See Item 3)*
|
10
|
SHARED DISPOSITIVE POWER
0 shares
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
6,500 shares of common stock
19,500 shares of common stock issuable upon conversion
of preferred stock
39,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
2.48%*
|
14
|
TYPE OF REPORTING PERSON
IN
|
*As more fully described in Item 3, the preferred stock and
the warrants are subject to a 49.99% ownership limitation.
CUSIP No. 30233M 107
|
13D
|
Page 5 of 9
|
1
|
NAMES OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY).
Bin Zhao
|
2
|
CHECK THE APPROPRIATE
BOX IF A MEMBER OF A GROUP
(a)
¨
(b)
x
|
3
|
SEC USE ONLY
|
4
|
SOURCE OF FUNDS
PF
|
5
|
CHECK IF DISCLOSURE OF LEGAL
PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2 (e)
¨
|
6
|
CITIZENSHIP OR PLACE OF ORGANIZATION
China
|
NUMBER OF
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE VOTING POWER
250 shares of common stock
|
8
|
SHARED VOTING POWER
500,000 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
9
|
SOLE DISPOSITIVE POWER
250 shares of common stock
|
10
|
SHARED DISPOSITIVE POWER
500,000 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
11
|
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
500,250 shares of common stock
1,500,000 shares of common stock issuable upon conversion
of preferred stock
2,340,000 shares of common stock issuable upon exercise of warrants (See Item 3)*
|
12
|
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES
¨
|
13
|
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
49.99%*
|
14
|
TYPE OF REPORTING PERSON
IN
|
* As more fully described in Item 3, the preferred stock and
the warrants are subject to a 49.99% ownership limitation, and the percentage set forth in row (13) gives effect to such limitation.
However, as more fully described in Item 5, the securities reported in rows (8), (10) and (11) show the number of shares of common
stock that would be issuable upon full exercise of such reported securities and do not give effect to such limitation. Therefore,
the actual number of shares of common stock beneficially owned by such Reporting Person, after giving effect to such limitation,
is less than the number of securities reported in rows (8), (10) and (11).
CUSIP No. 30233M 107
|
13D
|
Page 6 of 9
|
Item 1.
Security and Issuer.
This statement relates to the common stock,
$0.01 par value (the “Common Stock”) of Biostage, Inc. (the “Issuer”), having its principal executive office
at 84 October Hill Road, Suite 11, Holliston, MA 01746.
Item 2.
Identity and Background.
|
(a)
|
This statement is being filed by:
|
|
(i)
|
DST Capital, LLC, a Massachusetts limited liability company;
|
|
(ii)
|
Polyvia LLC, a Massachusetts limited liability company;
|
|
(iii)
|
Jing Chen, an individual;
|
|
(iv)
|
Jiong Shao, an individual; and
|
|
(v)
|
Bin Zhao, an individual and the owner of DST Capital, LLC with voting and investment power with respect to that entity.
|
The persons named in this Item 2(a) are
referred to individually herein as a “Reporting Person” and collectively as the “Reporting Persons.”
|
(b)
|
The address of the principal business office of each Reporting Person is c/o Biostage, Inc., 84 October Hill Road, Suite 11,
Holliston, MA 01746.
|
|
(c)
|
The principal business of DST Capital LLC and Polyvia LLC is to make, hold, and dispose of equity and equity related investments.
The present principal occupation of Jing Chen, Jiong Shao and Bin Zhao is to make, hold, and dispose of equity and equity related
investments.
|
|
(d)
|
During the five years prior to the date hereof, none of the Reporting Persons has been convicted in a criminal proceeding.
|
|
(e)
|
During the five years prior to the date hereof, none of the Reporting Persons has been a party to a civil proceeding ending
in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
|
|
(f)
|
DST Capital LLC and Polyvia LLC are limited liability companies formed in Massachusetts. Jing Chen and Bin Zhao are Chinese
citizens. Jiong Shao is a United States citizen.
|
Item 3.
Source and Amount of Funds
or Other Consideration.
On December 14, 2017, the Issuer entered
into a binding Memorandum of Understanding (the “MOU”) with Bin Zhao, pursuant to which the Issuer was bound to issue
to the Reporting Persons in a private placement (the “Private Placement”) shares of its common stock at a purchase
price of $2.00 per share or, to the extent the Reporting Persons, following the transaction, would collectively own more than 49.99%
of the Issuer’s common stock, shares of Series D Convertible Preferred Stock of the Issuer (the “Preferred Stock”)
with a per-share purchase price of $1,000. Additionally, in accordance with the binding MOU, the Reporting Persons would receive
warrants to purchase shares of the Issuer’s common stock (or, to the extent the Reporting Persons would own more than 49.99%
of the Issuer’s common stock, shares of Preferred Stock).
To further evidence the binding obligations
of the MOU and effectuate the Private Placement thereunder, the Issuer entered into a Securities Purchase Agreement effective as
of December 27, 2017 (the “Purchase Agreement”) with the Reporting Persons, and closed the Private Placement simultaneously
with the effectiveness of the Purchase Agreement. In accordance with the MOU and the Purchase Agreement, the Issuer issued to the
Reporting Persons (i) 518,000 shares (the “Common Shares”) of the Issuer’s common stock, par value $0.01 per
share (the “Common Stock”), (ii) 3,108 shares of Series D Convertible Preferred Stock (the “Series D Preferred
Stock”), and (ii) warrants to purchase 3,108,000 shares of Common Stock (the “Warrants”), of which Bin Zhao concurrently
assigned warrants to purchase 540,000 shares of Common Stock to persons who are not Reporting Persons or parties to the Purchase
Agreement.
CUSIP No. 30233M 107
|
13D
|
Page 7 of 9
|
The Warrants have an exercise price of
$2.00 per share, subject to adjustments as provided under the terms of the Warrants, and are immediately exercisable. The Warrants
are exercisable for five years from the issuance date.
The Preferred Stock ranks on parity to
the Common Stock, and is entitled to vote on any matters to which shares of the Common Stock are entitled to vote, on an as-if-converted
basis. The Preferred Stock includes an ownership limitation that limits the Reporting Persons and their affiliates to owning no
more than 49.99% of the Common Stock.
In connection with the Private Placement,
the Issuer agreed to grant board representation and nomination rights to the Reporting Persons and their affiliates, such that
the director nominees of the Reporting Persons shall constitute a majority of the Issuer’s board of directors, but no more
than is necessary to constitute such a majority.
The working capital of DST Capital LLC and Polyvia LLC and the
personal funds of Jing Chen and Jiong Shao was the source of the funds for the purchase of the Common Stock, Preferred Stock and
Warrants. No part of the purchase price of the securities was represented by funds or other consideration borrowed or otherwise
obtained for the purpose of acquiring, holding, trading, or voting the securities.
Item 4.
Purpose of Transaction.
Pursuant to the Private Placement described in Item 3 above,
the Reporting Persons acquired a majority of the voting power of the Issuer, and have the right to nominate a majority of the members
of the Issuer’s board of directors. The Reporting Persons, together with the Issuer, intend to establish a Chinese subsidiary
of the Issuer to potentially access the Chinese market for the Issuer’s product candidates. The Reporting Persons acquired
the securities for strategic investment purposes. Depending on market conditions, their continuing evaluation of the business and
prospects of the Issuer and other factors, the Reporting Persons may dispose of or acquire additional shares of the Issuer.
Except as set forth above, none of the Reporting Persons has
any present plans which relate to or would result in:
|
(a)
|
The acquisition by any person of additional securities of the Issuer, or the disposition of securities
of the Issuer;
|
|
(b)
|
An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving
the Issuer or any of its subsidiaries;
|
|
(c)
|
A sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries;
|
|
(d)
|
Any change in the present board of directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing vacancies on the board;
|
|
(e)
|
Any material change in the present capitalization or dividend policy of the Issuer;
|
|
(f)
|
Any other material change in the Issuer’s business or corporate structure;
|
|
(g)
|
Changes in the Issuer’s charter, bylaws or instruments corresponding thereto or other actions
which may impede the acquisition of control of the Issuer by any person;
|
|
(h)
|
Causing a class of securities of the Issuer to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;
|
|
(i)
|
A class of equity securities of the Issuer becoming eligible for termination of registration pursuant
to Section 12(g)(4) of the Securities Exchange Act of 1934; or
|
|
(j)
|
Any action similar to any of those enumerated above.
|
CUSIP No. 30233M 107
|
13D
|
Page 8 of 9
|
Item 5.
Interest in Securities of
the Issuer.
|
(a)
|
DST Capital LLC, Polyvia LLC, Jing Chen and Jiong Shao
are the record owners of the securities set forth on each such Reporting Person’s respective cover sheet. Bin Zhao is the
record owner of 250 shares of common stock of the Issuer. As the owner of DST Capital LLC, Bin Zhao may be deemed to beneficially
own the securities owned by that entity.
|
The percentage of outstanding Common Stock which may
be deemed to be beneficially owned by each Reporting Person is set forth on Line 13 of such Reporting Person’s cover sheet.
Such percentage was calculated based on the approximately 1.99 million shares of Common Stock outstanding immediately
prior to the Private Placement, plus the 518,000 shares of Common Stock issued in the Private Placement.
|
(b)
|
Regarding the number of shares as to which such person
has:
|
|
(i)
|
sole power to vote or to direct the vote: See line 7 of
the cover sheets.
|
|
(ii)
|
shared power to vote or to direct the vote: See line 8
of the cover sheets.
|
|
(iii)
|
sole power to dispose or to direct the disposition: See
line 9 of the cover sheets.
|
|
(iv)
|
shared power to dispose or to direct the disposition: See
line 10 of the cover sheets.
|
|
(c)
|
Except as set forth in Item 3 above, none of the Reporting
Persons has effected any transaction in the Common Stock during the last 60 days.
|
|
(d)
|
No other person is known to have the right to receive or
the power to direct the receipt of dividends from, or any proceeds from the sale of, securities beneficially owned by any of the
Reporting Persons.
|
Item 6.
Contracts, Arrangements, Undertakings
or Relationships with Respect to Securities of the Issuer.
As described in Item 3 above, the Reporting Persons entered
into the Purchase Agreement with the Issuer. Pursuant to the Purchase Agreement, the Reporting Persons are entitled to board representation
and nomination rights, such that the director nominees of the Reporting Persons shall constitute a majority of the Issuer’s
board of directors, but no more than is necessary to constitute such a majority.
The Reporting Persons may be deemed to be a “group”
pursuant to Section 13(d)(3) of the Act. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute
an admission that the Reporting Persons or any of their respective affiliates are the beneficial owners of any Common Stock beneficially
owned by any of the Reporting Persons for purposes of Section 13(d) of the Act, the rules promulgated thereunder or for any other
purpose.
Item 7.
Material to be Filed as Exhibits.
Exhibit 1 — Agreement regarding filing of joint Schedule
13D.
CUSIP No. 30233M 107
|
13D
|
Page 9 of 9
|
SIGNATURES
After reasonable inquiry and to the best
of its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete
and correct.
Dated: January 10, 2018
DST CAPITAL LLC
|
|
|
|
|
By:
|
/s/ Bin Zhao
|
|
Bin Zhao, Owner
|
|
|
|
|
POLYVIA LLC
|
|
|
|
|
By:
|
/s/ Wenxiang Huang
|
|
Wenxiang Huang, Manager/Director
|
|
|
|
|
/s/ Jing Chen
|
|
Jing Chen
|
|
|
|
|
/s/ Jiong Shao
|
|
Jiong Shao
|
|
|
|
|
/s/ Bin Zhao
|
|
Bin Zhao
|
|