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| EX-99.1 - Protagenic Therapeutics, Inc.\new | v198977_ex99-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): October 13, 2010
ATRINSIC,
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-12555
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06-1390025
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(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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469
7th
Avenue, 10th Floor,
New York, NY 10018
(Address
of Principal Executive Offices/Zip Code)
(212)
716-1977
(Registrant’s
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions ( see
General Instruction A.2. below):
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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þ
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Entry
into a Material Definitive
Agreement.
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The
Marketing Services Agreement and Master Services Agreement govern the operation
of Brilliant Digital’s Kazaa subscription based music service business which is
jointly operated by the Company and BDE. Under the Marketing Services
Agreement, Atrinsic is responsible for marketing, promotional, and advertising
services in respect of the Kazaa business. Pursuant to the Master
Services Agreement, Atrinsic provides services related to the operation of the
Kazaa business, including billing and collection services and the operation of
the Kazaa online storefront. BDE is obligated to provide certain
other services with respect to the Kazaa business, including licensing the
intellectual property underlying the Kazaa business to Atrinsic, obtaining all
licenses to the content offered as part of the Kazaa business and delivering
that content to subscribers. As part of the agreements, Atrinsic is
required to make advance payments and expenditures in respect of certain
expenses incurred in order to operate the Kazaa business. These
advances and expenditures are recoverable on a dollar for dollar basis against
revenues generated by the business.
Among
other things, the amendments extend the term of each of the Marketing Services
Agreement and Master Services Agreement from three years to thirty years,
provide Atrinsic with an exclusive license to the Kazaa trademark in connection
with Atrinsic’s services under the agreements, and modify the Kazaa digital
music service profit share payable to Atrinsic under the agreements from 50% to
80%. In addition, the amendments remove BDE’s obligation to repay up
to $2,500,000 of advances and expenditures which are not otherwise recovered
from Kazaa generated revenues and remove the cap on expenditures that Atrinsic
is required to advance in relation to the operation of the Kazaa
business. As consideration for entering into the amendments, Atrinsic
will issue 4,161,130 shares of its common stock to Brilliant
Digital.
The
amendments to the Marketing Services Agreement and Master Services Agreement are
part of a broader transaction between Atrinsic and BDE pursuant to which
Atrinsic will acquire all of the assets of BDE that relate to its Kazaa digital
music service business in accordance with the terms of an asset purchase
agreement entered into between the parties on October 13, 2010.
The
purchase price for the acquired assets includes the issuance by Atrinsic of an
additional 7,125,665 shares of its common stock at the closing of the
transactions contemplated by the asset purchase agreement as well as the
assumption of certain liabilities related to the Kazaa business. The
closing of the transactions contemplated by the asset purchase agreement will
occur when all of the assets associated with the Kazaa business, including the
Kazaa trademark and associated intellectual property, as well as Brilliant
Digital’s content management, delivery and customer service platforms, and
licenses with third parties, have been transferred to Atrinsic. The
closing of the transactions contemplated by the asset purchase agreement is
subject to approval by the stockholders of Atrinsic and Brilliant Digital,
receipt of all necessary third party consents as well as other customary closing
conditions. At the closing of the transactions contemplated by the
asset purchase agreement, Atrinsic has agreed to appoint two individuals to be
selected by Brilliant Digital to serve on Atrinsic’s Board of
Directors. In addition, at the closing, each of the Marketing
Services Agreement and Master Services Agreement will terminate.
Additional Information About
the Proposed Transaction and Where You Can Find It
This
document may be deemed to be solicitation material in respect of the proposed
acquisition by Atrinsic of all of the assets of BDE that relate to its Kazaa
subscription based music service business. In connection with the proposed
transaction, a proxy statement will be filed by Atrinsic with the SEC.
STOCKHOLDERS OF ATRINSIC ARE ENCOURAGED TO READ THE PROXY STATEMENT AND ANY
OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED ASSET ACQUISITION. The final proxy statement will
be mailed to stockholders of Atrinsic. Investors and security holders will be
able to obtain the documents free of charge at the SEC’s website, www.sec.gov,
or from Atrinsic, at Atrinsic, Inc., Attention: Investor Relations, 469 7th Avenue,
10th
Floor, New York, NY, 10018.
Atrinsic
and its directors and executive officers and other persons may be deemed to be
participants in the solicitation of proxies in respect of the
transaction. Information regarding the identity of the persons who
may, under SEC rules, be deemed to be “participants” in the solicitation of
proxies, and a description of their direct and indirect interests in the
solicitation, by security holdings or otherwise, will be contained in the Proxy
Statement and other relevant materials to be filed with the SEC when they become
available.
On
October 14, 2010, the Company issued a press release announcing the Asset
Purchase Agreement with BDE, as well as the amendments to the Marketing Services
Agreement and Master Services Agreement. A copy of the press release is attached
as Exhibit 99.1 hereto and is incorporated herein by reference.
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Item
9.01.
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Financial
Statements and Exhbits
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(d)
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Exhibits.
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The
following exhibit is filed herewith:
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Exhibit
Number
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Description
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99.1
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Press
release issued by Atrinsic, Inc., dated October 14,
2010.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Atrinsic,
Inc.
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Date:
October 14, 2010
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By:
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/s/ Thomas Plotts | |
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Thomas
Plotts
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Chief
Financial Officer
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