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Replies to post #82276 on Protagenic Therapeutics Inc. (PTIX)
03/31/12 12:50 PM
Atrinsic gave the entirety of their Authorized shares to Brilliant Digital. Brilliant Digital was permitted to make vast profits on their 90 million shares, profits that would not necessarily pay down the total $5.4 million debt that Atrinsic owed other than the first few installments. Possibly Brilliant Digital is now paid off, but possibly there are still 3 more payments due as well. There are NO MORE Authorized Shares to give to Brilliant Digital or any other creditor, or for any other reasons.
Atrinsic has NO MORE Authorized Shares to use as currency.
Atrinsic makes a lot of money per quarter but their operating expenses and likely remaining debt is burdensome and combined are likely greater than their revenues....can't prove that without the 10K that will no longer be filed....but that is my best guess.
As an SEC reporting company it would have required Atrinsic to file another S-2 or S-3 to raise their Authorized Shares to be able to use newly Authorized Shares to convert to Outstanding Shares. An S-2 / S-3 filing takes months to get approved by the SEC and Finra. Apparently Atrinsic doesn't have months to wait for an S-2 or S-3 to become effective.
By filing to become a NON-SEC reporting Security and by deregistering their stock it means that ATRN will now trade on the middle Pink Sheets tiers.
Of course this is purely speculation but it suggests that Atrinsic may want to increase their Authorized Shares for the purposes of dilution into Outstanding Shares to satisfy any remaining debts and for cash to meet their operating expenses. On the Pink Sheets and by no longer being required to file to the SEC any Pink Sheet company can raise their Authorized Shares at their whim and can thereafter sell those shares to Accredited Investors, which could be Brilliant Digital, or PIPE Funders, and any other lawful entity with cash to trade for shares.
Nowhere in the 8-K filings does it even remotely suggest that a buyout could happen or that a Bankruptcy is being considered. A public buyout contender would absolutely want Atrinsic to remain SEC reporting for legal reasons. A private buyer wouldn't care about ATRN the stock and since Atrinsic gave all their Authorized Shares to Brilliant Digital which are now most likely owned by retail shareholders the stock is also irrelevant to Atrinisic if a private company wanted to buy Atrinsic.
And Bankruptcy would only require a filing regardless to being SEC reporting or not. If BK was being considered Atrinsic would have just done it.
To the arguments that Atrinsic may be considering going private keep in mind that the company still has operating expenses and possible debt that they may have difficulty paying IF they no longer had share equity to use. As a non-reporting Pink the company can also arbitrarily give restricted shares as compensation to employees and insiders, but they have to raise their Authorized Shares first.
Unless I am incorrectly reading the filings and the implications of those filings it is more likely, IMO, that Atrinsic wanted to remove their SEC / Sarbanes Oxley costs, to remove the restrictions required to file an S-2 or S-3, and to be able to raise their Authorized Shares and convert to Outstanding Shares to Accredited Lenders as needed and at their discretion and whim.
ATRN's PPS will remain volatile but I think the PPS is presently irrelevant to Atrinsic because they have NO SHARES themselves to benefit from any ATRN PPS valuations, and the primary beneficiary has been Brilliant Digital.
If Atrinsic has intentions to raise the A/S the company could then benefit from ATRN PPS valuations by having new shares in their possession.
03/31/12 12:52 PM
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03/31/12 3:04 PM
