Current Report Filing (8-k)

Date : 11/21/2019 @ 9:23PM
Source : Edgar (US Regulatory)
Stock : Protagenic Therapeutics, Inc. (QB) (PTIX)
Quote : 1.4101  0.0 (0.00%) @ 12:56PM

Current Report Filing (8-k)






Washington, D.C. 20549









Date of Report (Date of Earliest Event Reported): November 5, 2019  


(Exact name of Company as specified in its charter)


Delaware   000-51353   06-1390025

(State or other jurisdiction

of incorporation)



File Number)


(I.R.S. Employer

Identification No.)


149 Fifth Avenue, Suite 500, New York, NY   10010
(Address of principal executive offices)   (Zip Code)


  (Company’s telephone number, including area code)  



(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:


[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)


[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)


[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))


[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Securities registered pursuant to Section 12(b) of the Act:


Title of each class   Ticker symbol(s)   Name of each exchange on which registered
N/A   N/A   N/A


Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.


Emerging growth company [  ]


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]







Item 1.01 Entry into a Material Definitive Agreement.


Convertible Promissory Notes


From November 5, 2019 through November 20, 2019 (collectively, the “First Closing”), Protagenic Therapeutics, Inc. (the “Company”) entered into three Convertible Note Purchase Agreements (each, a “Purchase Agreement”) with three accredited investors, two of whom were current members of the Board of Directors of the Company (collectively the “Investors”), pursuant to which the Company issued and sold unsecured convertible promissory notes (the “Notes”) to the Investors in the aggregate principal amount of $350,000. The Company may issue additional Notes in the future, up to an aggregate of $2,500,000 principal amount of Notes (the “Private Offering”).


The Notes are due on November 6, 2023 (the “Maturity Date”) and accrue simple interest at an annual rate of 6% on the aggregate unconverted and outstanding principal amount, payable annually, beginning October 31, 2020. The Company will pay (a “PIK Payment”) the interest due by adding such interest (including interest at the Default Rate, as defined below, if any) to the then-outstanding principal amount of the Notes on each interest payment date and on the Maturity Date. Each PIK Payment will be preceded by written notice from the Company to the Note holder setting forth in reasonable detail the amount of such PIK Payment and the principal amount of the Note following such PIK Payment. The Notes will bear interest at the rate of 12% per year (the “Default Rate”) following a default.


Holders may convert their Notes (including accrued interest) at their option, in whole or in part, at any time prior to the Maturity Date, at a conversion price (the “Conversion Price”) of $1.25 per share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”). The Conversion Price is subject to adjustment for any stock dividend, stock split, combination or other similar recapitalization event. On the Maturity Date, the Company will repay the Notes (including accrued interest) in their entirety in cash or, at its option, in shares of Common Stock at the Conversion Price.


The Company may redeem for cash or Common Stock all or any portion of the Notes, at its option, on or after November 5, 2021 if the last reported sale price of its Common Stock has been at least 120% of the Conversion Price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which it provides notice of redemption. The redemption will be effected at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Any such redemption must be applied ratably among all Convertible Notes in proportion to their respective outstanding principal balances, plus accrued and unpaid interest. Other than pursuant to this redemption right, the Company may not pre-pay the Notes.





The following events, among others, constitute an event of default under the Notes: (i) failure to pay when due any obligations under the Notes, (ii) any representation or warranty of the Company under the Purchase Agreements and the other documents contemplated by the Purchase Agreement, including the Notes (collectively, the “Loan Documents”) being untrue in any material respect as of the date made, (iii) any breach by the Company of any covenant in the Loan Documents, after a cure period, (iv) a material judgment or judgments are rendered against the Company, (v) the Company makes an assignment for the benefit of creditors or (vi) an involuntary proceeding in bankruptcy (or similar proceeding) is filed against the Company. Defaults may only be declared by the holders of a majority of the principal amount of the Notes then outstanding (a “Holder Majority”).


If stockholder approval of the issuance of the Notes is required under applicable NASDAQ or other stock exchange listing rules in order for the Company to issue shares of Common Stock upon conversion of the Notes, the Company is obligated to call one or more meetings of the stockholders for purposes of such approval.


The Notes and the shares of Common Stock underlying the Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.


No Placement Agent participated in the First Closing, so no commissions or other similar payments were made with respect to Investors who participated in the First Closing. We have engaged a Placement Agent (the name of which will be disclosed on a subsequent Current Report on Form 8-K) to participate in subsequent closings of the Private Offering. The Placement Agent will be paid at closing a cash commission of 8% of funds raised from the investors in the Offering introduced by it (the “Cash Fee”) and will receive warrants (the “Placement Agent Warrants”) to purchase such number of shares of the Issuer’s Common Stock equal to 10% of the number of shares of Common Stock issuable upon conversion of Convertible Notes sold to investors introduced by it. The Placement Agent Warrants, which contain a “cashless exercise” provision, will be exercisable for a term of five years from the first closing in which investors introduced by the Placement Agent participate at an exercise price of $1.25 per shares of Common Stock.


The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the forms of Purchase Agreement and Note filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K, which are incorporated by reference herein.




The Company’s wholly-owned subsidiary, Protagenic Therapeutics Canada (2006) Inc., a corporation formed under the laws of the Province of Ontario, Canada, has guaranteed (the “Guaranty”) the full and prompt payment of all obligations when due under the Notes. All actions by the Note holders under the Guaranty may only be taken upon the written consent of a Holder Majority.


The summary set forth above does not purport to be complete and is qualified in its entirety by reference to the Guaranty filed as Exhibit 10.3 to this Current Report on Form 8-K, which is incorporated by reference herein.





Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.


The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.


Item 3.02 Unregistered Sales of Equity Securities.


The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The sale and issuance of the Notes, and the issuance of shares of Common Stock upon conversion thereof, have been determined to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The Investors have represented that they are accredited investors, as that term is defined in Regulation D, and that they are acquiring the securities for investment purposes only and not with a view to or for sale in connection with any distribution thereof.


Item 3.03 Material Modification of Rights of Security Holders.


The information disclosed in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.


Item 9.01 Financial Statements and Exhibits.


(d) Exhibits




10.1   Form of Convertible Note Purchase Agreement.
10.2   Form of Convertible Promissory Note.
10.3   Form of Guaranty.







Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized.


Date: November 21, 2019 By: /s/ Alexander K. Arrow
  Name: Alexander K. Arrow
  Title: Chief Financial Officer





Protagenic Therapeutics, Inc. (USOTC:PTIX)
Historical Stock Chart

1 Year : From Jan 2019 to Jan 2020

Click Here for more Protagenic Therapeutics, Inc. Charts.

Protagenic Therapeutics, Inc. (USOTC:PTIX)
Intraday Stock Chart

Today : Wednesday 22 January 2020

Click Here for more Protagenic Therapeutics, Inc. Charts.

Latest PTIX Messages

{{bbMessage.M_Alias}} {{bbMessage.MSG_Date}} {{bbMessage.HowLongAgo}} {{bbMessage.MSG_ID}} {{bbMessage.MSG_Subject}}

Loading Messages....

No posts yet, be the first! No {{symbol}} Message Board. Create One! See More Posts on {{symbol}} Message Board See More Message Board Posts

Your Recent History
Gulf Keyst..
FTSE 100
UK Sterlin..
Stocks you've viewed will appear in this box, letting you easily return to quotes you've seen previously.

Register now to create your own custom streaming stock watchlist.

NYSE, AMEX, and ASX quotes are delayed by at least 20 minutes.
All other quotes are delayed by at least 15 minutes unless otherwise stated.