Protagenic Therapeutics Inc. (PTIX)

[Wakinyan_Pale_Raptor]

Item 2.06 Material Impairments.



The officers of the Company
have concluded that a charge for impairment of approximately $1,200,000 is required under generally accepted accounting principles
applicable to the Company, which charge will be reflected in the Company’s financial statements for the fiscal year ended
December 31, 2011. The impairment charge will not result in any cash expenditures by the Company. The charge is being incurred
in connection with the termination of that certain Master Services Agreement by and between the Company and Brilliant Digital Entertainment,
Inc., dated March 26, 2010, as amended, and the termination of that certain Marketing Services Agreement by and between the Company
and Brilliant Digital Entertainment, Inc., dated March 26, 2010, as amended, which terminations were previously reported on the
Company’s Current report on Form 8-K filed with the Securities and Exchange Commission on December 29, 2011. The
agreements were previously recorded as intangible assets on the Company’s balance sheet and the Company has determined that
the assets have no further value

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