Protagenic Therapeutics Inc. (PTIX)

[soupoftheday]

We are required to repay the Notes in six equal monthly installments commencing on December 31, 2011 and ending on May 31, 2012, either in cash or in shares of our common stock. With respect to the payment installment due on December 31, 2011, we were required to deliver a notice on November 30, 2011, stating the amount of principal that will be repaid in cash and the amount that will be repaid by delivery of shares of our common stock. We did not deliver such notice, and thus, pursuant to the terms of the Notes, we have been deemed to elect to pay the applicable installment by delivery of shares of our common stock. As to the repayment of the installment by delivery of shares, the Notes include a condition relating to the minimum dollar trading volume that must be maintained in our common stock during the twenty day period preceding the required installment date notice. Failure of our common stock to maintain this trading volume is referred to in the Notes as a “Dollar Failure.” A Dollar Failure has occurred and the Company is now in default under the Notes.

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