|
Item 1.01.
|
Entry into a Material Definitive Agreement.
|
On April 15, 2016, Atrinsic, Inc., a Delaware
corporation (the “Company”), completed the final closing (the “
Final Closing
”) of its previously
announced private placement (the “
Offering
”) of equity securities. At the Final Closing, the Company
offered and sold an aggregate of 420,260 shares (“
Shares
”) of its Series B Preferred Stock, par value $0.000001
per share (“
Series B Preferred Stock
”), at a price of $1.25 per Share, to accredited investors (as defined under
Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “
1933 Act
”)), for
total gross proceeds of $525,325. Each investor entered into a Subscription Agreement (each, a “
Subscription Agreement
”)
and a Registration Rights Agreement (each, a “
Registration Rights Agreement
”) with the Company in connection
with each investor’s investment at the Final Closing.
The Company intends to use the net proceeds
of approximately $505,187.50 from the Final Closing for working capital and general corporate purposes.
As was previously announced, on February
12, 2016, the Company completed the first closing of the Offering, at which 2,775,000 shares at a price of $1.25 per Share were
sold to accredited investors for total gross proceeds of $3,468,750, which included the conversion of $500,000 of principal and
accrued interest owed by the Company and Protagenic Therapeutics, Inc. (“
Protagenic
”). The first
closing was conducted simultaneously with the completion of the Company’s merger (the “
Merger
”) with Protagenic. On
March 2, 2016 the Company completed the second closing of the Offering, at which the Company issued an additional 913,200 Shares
to accredited investors, for total gross proceeds of $1,141,500.
The offer, sale and issuance to the investors
of the Shares at the Final Closing have been made in reliance on the statutory exemption from registration in Section 4(a)(2)
of the 1933 Act and/or Rule 506 of Regulation D promulgated thereunder, have not been registered under the 1933 Act, and, unless
so registered, may not be offered or sold, except pursuant to an applicable exemption from the registration requirements of the
1933 Act and applicable state securities laws.
The Company paid Katalyst Securities LLC,
its placement agent (the “
Placement Agent
”), and its selected dealers a cash commission of 10% of the funds
raised from the investors participating in the Final Closing who were introduced by the Placement Agent or its selected dealers. In
addition, the Placement Agent and its selected dealers received warrants (the “
Placement Agent Warrants
”) to
purchase a number of shares of Series B Preferred Stock equal to 10% of the Shares sold to investors at the Final Closing
who were introduced by the Placement Agent or its selected dealers. As a result of the foregoing arrangement, at the
Final Closing, the Placement Agent and its selected dealers were paid commissions of $20,032.50, and the Placement Agent and its
selected dealers were issued Placement Agent Warrants to purchase 16,026 shares of Series B Preferred Stock at an exercise price
of $1.25 per share. The Placement Agent Warrants have registration rights pursuant to the Registration Rights Agreement discussed
below.
For all three closings, the Company raised
total gross proceeds of $4,635,575 and total net proceeds of $4,283,437.50 (or total gross proceeds of $5,135,575 and total net
proceeds of $4,783,437.50, including the conversion of the $500,000 in principal and interest referred to above). The Company issued
4,108,460 Shares to investors in the Offering. The Placement Agent and its selected dealers were paid total cash commissions of
$159,182.50 and the Placement Agent was paid an expense allowance of $15,000 and was issued (together with its selected dealers)
Placement Agent Warrants to purchase 127,346 shares of Series B Preferred Stock at an exercise price of $1.25 per share.
The Company entered into a Registration
Rights Agreement with the investors in the Offering. Under the terms of the Registration Rights Agreement, the Company agreed
to file a registration statement covering the resale of the shares of the Company’s common stock (the “
Registrable
Securities
”) underlying the Series B Preferred Stock and that are issuable on exercise of the Placement Agent Warrants
within 120 days from the Final Closing of the Offering, and to use commercially reasonable efforts to cause the registration statement
to become effective no later than 90 days after it is filed.
The Company agreed to use reasonable efforts
to maintain the effectiveness of the registration statement through the one year anniversary of the date the registration statement
is declared effective by the Securities and Exchange Commission (the “
SEC
”), or for such shorter period ending
on the earlier to occur of (i) the date as of which all of the Offering investors may sell all of their Registrable Securities
without restriction pursuant to Rule 144 promulgated under the 1933 Act or (ii) the date when all of the Registrable Securities
shall have been sold.
The foregoing descriptions of the Registration
Rights Agreement, Subscription Agreement and Placement Agent Warrants and the transactions contemplated therein and thereby, do
not purport to be complete and are qualified in their entirety by reference to the full text of such agreements, instruments and
documents, which are filed herewith, each of which is incorporated
herein by reference.
This Current Report on Form 8-K is neither
an offer to sell nor a solicitation of an offer to buy any of the securities described herein. This Current Report on Form 8-K
is being filed pursuant to and in accordance with Rule 135c of the 1933 Act.