Item
1.01
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Entry into a Material Definitive
Agreement
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On
September 11, 2017, Tauriga Sciences, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase
Agreement”) with Adar Bays, LLC (“Adar Bays”) whereby the Company issued to Adar Bays seven 8% Convertible Redeemable
Notes each in the principal amount of $30,000, or in the aggregate principal amount of $210,000.
The
first 8% Convertible Redeemable Note (the “First Note”) was funded with gross cash proceeds of $28,000 to the Company
by September 12, 2017. The remaining six 8% Convertible Redeemable Note (collectively, the “Back-End Notes”) were
each initially paid for by a corresponding offsetting promissory note issued by Adar Bays to the Company (collectively, the “Note
Receivables”).
The
terms of the Back-End Notes require cash funding prior to any conversion thereunder. Upon the request of the Company, the Back-End
Notes may be funded at any time from March 11, 2018 until September 11, 2018. The Company may cancel the Back-End Notes and the
Note Receivables prior to funding by giving written notice to Adar Bays by February 11, 2018 that the Company does not wish to
close on the funding of the Back-End Notes. Each of the First Note, the Back-End Notes and the Notes Receivable has a maturity
date of September 11, 2018 upon which any outstanding principal and interest is due and payable.
The
amounts of cash actually funded plus accrued interest under both the First Note and the Back-End Notes are convertible into to
convert into shares of the Company's common stock at a price for each share of common stock equal to 60% of the lowest daily trading
price of the common stock as reported on the National Quotations Bureau OTC Markets exchange which the Company’s shares
are traded or any exchange upon which the common stock may be traded in the future, for the twenty (20) prior trading days including
the day upon which a notice of conversion is received by the Company or its transfer agent. In the event the Company experiences
a DTC “Chill” on its shares, the conversion price shall be decreased to 50% instead of 60% while that “Chill”
is in effect.
Upon
an event of default, principal and accrued interest will become immediately due and payable under the notes. Additionally, upon
an event of default, both notes will accrue interest at a default interest rate of 24% per annum or the highest rate of interest
permitted by law. Further, certain events of default may trigger penalty and liquidated damage provisions.
During
the first six months First Note is outstanding, the Company may redeem the First Note in cash pursuant to the terms of Section
4(c) of the First Note. The Back-End Notes may not be prepaid. However, in the event the First Note is redeemed prior to its six
month anniversary, each of the Back-End Notes and each of the Note Receivables shall be automatically cancelled in their entirety
and have no further force or effect.
The
foregoing descriptions of the Purchase Agreement, the First Note, the Note Receivables and the Back-End Notes are qualified in
their entirety by reference to the provisions of the Purchase Agreement, the First Note, the form of Note Receivables and the
form Back-End Notes, included in Exhibits 10.1, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K, which are
incorporated herein by reference.