0001142790 false Q2 2022 --03-31 400514 0001142790 2021-04-01 2021-09-30 0001142790 2021-11-15 0001142790 2021-09-30 0001142790 2021-03-31 0001142790 2021-07-01 2021-09-30 0001142790 2020-07-01 2020-09-30 0001142790 2020-04-01 2020-09-30 0001142790 us-gaap:CommonStockMember 2020-06-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0001142790 us-gaap:RetainedEarningsMember 2020-06-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0001142790 TAUG:SubscriptionReceivableMember 2020-06-30 0001142790 2020-06-30 0001142790 us-gaap:CommonStockMember 2020-07-01 2020-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2020-07-01 2020-09-30 0001142790 us-gaap:RetainedEarningsMember 2020-07-01 2020-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-07-01 2020-09-30 0001142790 TAUG:SubscriptionReceivableMember 2020-07-01 2020-09-30 0001142790 srt:ChiefExecutiveOfficerMember 2020-07-01 2020-09-30 0001142790 srt:MinimumMember 2020-07-01 2020-09-30 0001142790 srt:MaximumMember 2020-07-01 2020-09-30 0001142790 us-gaap:CommonStockMember 2020-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2020-09-30 0001142790 us-gaap:RetainedEarningsMember 2020-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-09-30 0001142790 TAUG:SubscriptionReceivableMember 2020-09-30 0001142790 2020-09-30 0001142790 us-gaap:CommonStockMember 2021-06-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2021-06-30 0001142790 us-gaap:RetainedEarningsMember 2021-06-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-06-30 0001142790 TAUG:SubscriptionReceivableMember 2021-06-30 0001142790 2021-06-30 0001142790 us-gaap:CommonStockMember 2021-07-01 2021-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2021-07-01 2021-09-30 0001142790 us-gaap:RetainedEarningsMember 2021-07-01 2021-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-07-01 2021-09-30 0001142790 TAUG:SubscriptionReceivableMember 2021-07-01 2021-09-30 0001142790 srt:MinimumMember 2021-07-01 2021-09-30 0001142790 srt:MaximumMember 2021-07-01 2021-09-30 0001142790 us-gaap:CommonStockMember 2021-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2021-09-30 0001142790 us-gaap:RetainedEarningsMember 2021-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-09-30 0001142790 TAUG:SubscriptionReceivableMember 2021-09-30 0001142790 us-gaap:CommonStockMember 2021-03-31 0001142790 us-gaap:AdditionalPaidInCapitalMember 2021-03-31 0001142790 us-gaap:RetainedEarningsMember 2021-03-31 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-03-31 0001142790 TAUG:SubscriptionReceivableMember 2021-03-31 0001142790 us-gaap:CommonStockMember 2021-04-01 2021-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2021-04-01 2021-09-30 0001142790 us-gaap:RetainedEarningsMember 2021-04-01 2021-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2021-04-01 2021-09-30 0001142790 TAUG:SubscriptionReceivableMember 2021-04-01 2021-09-30 0001142790 srt:MinimumMember 2021-04-01 2021-09-30 0001142790 srt:MaximumMember 2021-04-01 2021-09-30 0001142790 us-gaap:CommonStockMember 2020-03-31 0001142790 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001142790 us-gaap:RetainedEarningsMember 2020-03-31 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001142790 TAUG:SubscriptionReceivableMember 2020-03-31 0001142790 2020-03-31 0001142790 us-gaap:CommonStockMember 2020-04-01 2020-09-30 0001142790 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-09-30 0001142790 us-gaap:RetainedEarningsMember 2020-04-01 2020-09-30 0001142790 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-04-01 2020-09-30 0001142790 TAUG:SubscriptionReceivableMember 2020-04-01 2020-09-30 0001142790 srt:MinimumMember 2020-04-01 2020-09-30 0001142790 srt:MaximumMember 2020-04-01 2020-09-30 0001142790 srt:MaximumMember 2020-04-01 2020-06-30 0001142790 srt:MinimumMember 2020-04-01 2020-06-30 0001142790 TAUG:DrKeithAquaMember TAUG:AgreementMember 2020-07-14 2020-07-15 0001142790 TAUG:DrKeithAquaMember TAUG:AgreementMember 2020-07-15 0001142790 TAUG:DrKeithAquaMember TAUG:AgreementMember 2021-04-01 2021-09-30 0001142790 TAUG:DrKeithAquaMember TAUG:AgreementMember 2021-09-30 0001142790 TAUG:NFTaurigaCorpMember 2021-04-14 0001142790 TAUG:MasterServicesAgreementMember 2020-12-15 2020-12-23 0001142790 TAUG:MasterServicesAgreementMember 2020-12-15 2020-12-16 0001142790 TAUG:MasterServicesAgreementMember 2021-09-30 0001142790 TAUG:ThinkBIGLLCLicenseAgreementMember TAUG:ThinkBIGLLCMember 2020-09-23 2020-09-24 0001142790 TAUG:EachBrandsAmbassadorsMember TAUG:ProfessionalServicesAgreementMember 2021-04-01 2021-09-30 0001142790 TAUG:EachBrandAmbassadorsMember TAUG:ProfessionalServicesAgreementMember 2021-04-01 2021-09-30 0001142790 TAUG:EachBrandsAmbassadorsMember TAUG:ProfessionalServicesAgreementsMember 2021-04-01 2021-09-30 0001142790 TAUG:StockUpExpressAgreementMember 2021-01-29 2021-02-01 0001142790 TAUG:RestrictedCommonStockMember TAUG:StrategicMarketingandConsultingAgreementMember TAUG:MayerandAssociatesMember 2021-06-13 2021-06-14 0001142790 TAUG:RestrictedCommonStockMember TAUG:StrategicMarketingandConsultingAgreementsMember TAUG:MayerandAssociatesMember 2021-06-13 2021-06-14 0001142790 2020-04-01 2021-03-31 0001142790 TAUG:TaurigumMember 2021-07-01 2021-09-30 0001142790 TAUG:TaurigumMember 2020-07-01 2020-09-30 0001142790 TAUG:TaurigumMember 2021-04-01 2021-09-30 0001142790 TAUG:TaurigumMember 2020-04-01 2020-09-30 0001142790 TAUG:PharmaMember 2021-07-01 2021-09-30 0001142790 TAUG:PharmaMember 2020-07-01 2020-09-30 0001142790 TAUG:PharmaMember 2021-04-01 2021-09-30 0001142790 TAUG:PharmaMember 2020-04-01 2020-09-30 0001142790 TAUG:AdjustmentsEliminationsAndUnallocatedItemsMember 2021-07-01 2021-09-30 0001142790 TAUG:AdjustmentsEliminationsAndUnallocatedItemsMember 2020-07-01 2020-09-30 0001142790 TAUG:AdjustmentsEliminationsAndUnallocatedItemsMember 2021-04-01 2021-09-30 0001142790 TAUG:AdjustmentsEliminationsAndUnallocatedItemsMember 2020-04-01 2020-09-30 0001142790 srt:MaximumMember 2021-09-30 0001142790 TAUG:EvaluatingProductsAndTechnologiesMember 2021-07-01 2021-09-30 0001142790 TAUG:EvaluatingProductsAndTechnologiesMember 2021-04-01 2021-09-30 0001142790 TAUG:EvaluatingProductsAndTechnologiesMember 2020-07-01 2020-09-30 0001142790 TAUG:EvaluatingProductsAndTechnologiesMember 2020-04-01 2020-09-30 0001142790 TAUG:DistributorMember 2021-07-01 2021-09-30 0001142790 TAUG:DistributorMember 2020-07-01 2020-09-30 0001142790 TAUG:DistributorMember 2021-04-01 2021-09-30 0001142790 TAUG:DistributorMember 2020-04-01 2020-09-30 0001142790 TAUG:ECommerceMember 2021-07-01 2021-09-30 0001142790 TAUG:ECommerceMember 2020-07-01 2020-09-30 0001142790 TAUG:ECommerceMember 2021-04-01 2021-09-30 0001142790 TAUG:ECommerceMember 2020-04-01 2020-09-30 0001142790 TAUG:WholesaleMember 2021-07-01 2021-09-30 0001142790 TAUG:WholesaleMember 2020-07-01 2020-09-30 0001142790 TAUG:WholesaleMember 2021-04-01 2021-09-30 0001142790 TAUG:WholesaleMember 2020-04-01 2020-09-30 0001142790 TAUG:EcommerceChannelMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2021-04-01 2021-09-30 0001142790 TAUG:EcommerceChannelMember us-gaap:SalesRevenueNetMember us-gaap:ProductConcentrationRiskMember 2020-04-01 2020-09-30 0001142790 TAUG:TauriGumTMMember 2021-09-30 0001142790 TAUG:TauriGumTMMember 2021-03-31 0001142790 TAUG:TauriGummiesTMMember 2021-09-30 0001142790 TAUG:TauriGummiesTMMember 2021-03-31 0001142790 TAUG:OtherMember 2021-09-30 0001142790 TAUG:OtherMember 2021-03-31 0001142790 TAUG:ComputersOfficeFurnitureAndOtherEquipmentMember 2021-09-30 0001142790 TAUG:ComputersOfficeFurnitureAndOtherEquipmentMember 2021-03-31 0001142790 srt:MinimumMember TAUG:ComputersOfficeFurnitureAndOtherEquipmentMember 2021-04-01 2021-09-30 0001142790 srt:MaximumMember TAUG:ComputersOfficeFurnitureAndOtherEquipmentMember 2021-04-01 2021-09-30 0001142790 TAUG:OfficeFurnitureMember 2020-04-01 2021-03-31 0001142790 us-gaap:ComputerEquipmentMember 2021-04-01 2021-09-30 0001142790 us-gaap:LeaseholdImprovementsMember 2021-09-30 0001142790 us-gaap:LeaseholdImprovementsMember 2021-04-01 2021-09-30 0001142790 us-gaap:LeaseholdImprovementsMember 2021-03-31 0001142790 us-gaap:AccountingStandardsUpdate201602Member 2021-01-06 0001142790 us-gaap:AccountingStandardsUpdate201602Member 2019-04-02 0001142790 us-gaap:LeaseAgreementsMember 2021-01-04 2021-01-06 0001142790 us-gaap:LeaseAgreementsMember 2021-01-06 0001142790 TAUG:OptionTermMember 2021-01-04 2021-01-06 0001142790 TAUG:JeffersonStreetCapitalLLCOctoberTwoThousandAndTwentyMember 2021-09-30 0001142790 TAUG:JeffersonStreetCapitalLLCOctoberTwoThousandAndTwentyMember 2021-03-31 0001142790 TAUG:SEHoldingsLLCNovemberTwoThousandAndTwentyMember 2021-09-30 0001142790 TAUG:SEHoldingsLLCNovemberTwoThousandAndTwentyMember 2021-03-31 0001142790 TAUG:GSCapitalHoldingsLLCMarchTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:GSCapitalHoldingsLLCMarchTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:GSCapitalHoldingsLLCAprilTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:GSCapitalHoldingsLLCAprilTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:SEHoldingsLLCAugustTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:SEHoldingsLLCAugustTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:JeffersonStreetCapitalLLCSeptemberTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:JeffersonStreetCapitalLLCSeptemberTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:GSCapitalHoldingsLLCAugustTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:GSCapitalHoldingsLLCAugustTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:TangiersGlobalLLCAprilTwoThousandAndTwentyOneMember 2021-09-30 0001142790 TAUG:TangiersGlobalLLCAprilTwoThousandAndTwentyOneMember 2021-03-31 0001142790 TAUG:NotesPayableAndConvertibleNotesMember 2021-09-30 0001142790 TAUG:NotesPayableAndConvertibleNotesMember 2021-03-31 0001142790 TAUG:JeffersonStreetCapitalLLCMember TAUG:InventoryFinancingPromissoryNoteMember 2020-10-05 0001142790 TAUG:MoodyCapitalSolutionsIncMember TAUG:SecuritiesPurchaseAgreementMember 2020-10-04 2020-10-05 0001142790 TAUG:JeffersonStreetCapitalLLCMember 2020-10-21 2020-10-22 0001142790 TAUG:JeffersonStreetCapitalLLCMember 2020-10-22 0001142790 TAUG:PromissoryNoteMember TAUG:SEHoldingsLLCMember 2020-11-18 0001142790 TAUG:PromissoryNoteMember TAUG:SEHoldingsLLCMember 2020-11-17 2020-11-18 0001142790 TAUG:NonConvertibleRedeemableNoteMember TAUG:GSPartnersCapitalLLCMember 2021-03-05 0001142790 TAUG:NonConvertibleRedeemableNoteMember TAUG:GSPartnersCapitalLLCMember 2021-03-03 2021-03-05 0001142790 TAUG:NonConvertibleRedeemableNoteMember TAUG:GSPartnersCapitalLLCMember 2021-09-30 0001142790 TAUG:NonConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-04-30 0001142790 TAUG:NonConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-04-01 2021-04-30 0001142790 TAUG:NonConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-09-30 0001142790 TAUG:SecurityPurchaseAgreementMember TAUG:PromissoryNotesMember 2021-08-06 0001142790 TAUG:SecurityPurchaseAgreementMember TAUG:PromissoryNotesMember 2021-08-05 2021-08-06 0001142790 TAUG:SecurityPurchaseAgreementMember 2021-08-05 2021-08-06 0001142790 TAUG:GSPartnersCapitalLLCMember 2021-09-30 0001142790 TAUG:JeffersonStreetCapitalLLCMember TAUG:InventoryFinancingPromissoryNoteMember 2021-09-20 0001142790 TAUG:MoodyCapitalSolutionsIncMember TAUG:SecuritiesPurchaseAgreementMember 2021-09-17 2021-09-20 0001142790 TAUG:JeffersonStreetCapitalLLCMember 2021-09-17 2021-09-20 0001142790 TAUG:JeffersonStreetCapitalLLCMember 2021-09-20 0001142790 TAUG:JeffersonStreetCapitalLLCMember 2021-09-30 0001142790 TAUG:ConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-08-25 0001142790 TAUG:NonConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-08-24 2021-08-25 0001142790 TAUG:NonConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-08-25 0001142790 TAUG:ConvertiblePromissoryNoteMember TAUG:TangiersGlobalLLCMember 2021-09-24 2021-09-25 0001142790 TAUG:ConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-09-24 2021-09-25 0001142790 TAUG:ConvertibleRedeemableNoteTwoMember TAUG:GSPartnersCapitalLLCMember 2021-09-30 0001142790 TAUG:ConvertiblePromissoryNoteMember TAUG:TangiersGlobalLLCMember 2021-04-05 0001142790 TAUG:ConvertiblePromissoryNoteMember TAUG:TangiersGlobalLLCMember 2021-05-01 2021-05-05 0001142790 TAUG:ConvertiblePromissoryNoteMember TAUG:TangiersGlobalLLCMember 2021-04-04 2021-04-05 0001142790 TAUG:ConvertiblePromissoryNoteMember TAUG:TangiersGlobalLLCMember 2021-09-30 0001142790 TAUG:ConvertibleNotesMember 2021-01-01 2021-03-31 0001142790 TAUG:ConvertibleNotesMember 2021-03-31 0001142790 us-gaap:SubsequentEventMember 2021-11-15 0001142790 2021-09-18 0001142790 2021-09-19 0001142790 TAUG:InvestmentAgreementMember TAUG:TangiersGlobalLLCMember 2020-03-04 2020-03-05 0001142790 TAUG:TangiersGlobalLLCMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:TangiersGlobalLLCMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:TangiersGlobalLLCMember srt:MinimumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:TangiersGlobalLLCMember srt:MaximumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:MinimumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:MaximumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:MinimumMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:MaximumMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:StockPurchaseAgreementsMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:StockPurchaseAgreementsMember srt:MinimumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember TAUG:StockPurchaseAgreementsMember srt:MaximumMember 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:DirectorMember 2020-04-01 2021-03-31 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:ChiefExecutiveOfficerMember 2020-07-09 2020-07-10 0001142790 TAUG:FiscalYearTwoThousandTwentyOneMember srt:ChiefExecutiveOfficerMember 2020-07-10 0001142790 TAUG:AegeaBiotechnologiesIncMember TAUG:UnregisteredCommonStockMember 2020-04-02 2020-04-03 0001142790 TAUG:AegeaBiotechnologiesIncMember TAUG:UnregisteredCommonStockMember 2020-04-03 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember TAUG:StockPurchaseAgreementsMember 2021-04-01 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember TAUG:StockPurchaseAgreementsMember srt:MinimumMember 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember TAUG:StockPurchaseAgreementsMember srt:MaximumMember 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember 2021-04-01 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember srt:MinimumMember 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember srt:MaximumMember 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember srt:MinimumMember 2021-04-01 2021-09-30 0001142790 TAUG:FiscalYearTwoThousandTwentyTwoMember srt:MaximumMember 2021-04-01 2021-09-30 0001142790 country:US 2021-09-30 0001142790 country:US 2021-04-01 2021-09-30 0001142790 TAUG:VistaGenTherapeuticsIncMember 2020-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember 2020-04-01 2021-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember 2021-03-31 0001142790 TAUG:SciSparcLtdMember 2020-03-31 0001142790 TAUG:SciSparcLtdMember 2020-04-01 2021-03-31 0001142790 TAUG:SciSparcLtdMember 2021-03-31 0001142790 2019-04-01 2020-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember 2021-04-01 2021-09-30 0001142790 TAUG:VistaGenTherapeuticsIncMember 2021-09-30 0001142790 TAUG:SciSparcLtdMember 2021-04-01 2021-09-30 0001142790 TAUG:SciSparcLtdMember 2021-09-30 0001142790 TAUG:NeptuneWellnessSolutionsMember 2021-03-31 0001142790 TAUG:NeptuneWellnessSolutionsMember 2021-04-01 2021-09-30 0001142790 TAUG:NeptuneWellnessSolutionsMember 2021-09-30 0001142790 TAUG:BLNKCALLSMember 2021-03-31 0001142790 TAUG:BLNKCALLSMember 2021-04-01 2021-09-30 0001142790 TAUG:BLNKCALLSMember 2021-09-30 0001142790 TAUG:BeyondMeatMember 2021-03-31 0001142790 TAUG:BeyondMeatMember 2021-04-01 2021-09-30 0001142790 TAUG:BeyondMeatMember 2021-09-30 0001142790 TAUG:BYNDCALLSMember 2021-03-31 0001142790 TAUG:BYNDCALLSMember 2021-04-01 2021-09-30 0001142790 TAUG:BYNDCALLSMember 2021-09-30 0001142790 TAUG:JupiterWellnessMember 2021-03-31 0001142790 TAUG:JupiterWellnessMember 2021-04-01 2021-09-30 0001142790 TAUG:JupiterWellnessMember 2021-09-30 0001142790 TAUG:CanooIncMember 2021-03-31 0001142790 TAUG:CanooIncMember 2021-04-01 2021-09-30 0001142790 TAUG:CanooIncMember 2021-09-30 0001142790 TAUG:MindMedIncMember 2021-03-31 0001142790 TAUG:MindMedIncMember 2021-04-01 2021-09-30 0001142790 TAUG:MindMedIncMember 2021-09-30 0001142790 TAUG:OdysseySemiconductorTechnologiesIncMember 2021-03-31 0001142790 TAUG:OdysseySemiconductorTechnologiesIncMember 2021-04-01 2021-09-30 0001142790 TAUG:OdysseySemiconductorTechnologiesIncMember 2021-09-30 0001142790 TAUG:TLRYCALLMember 2021-03-31 0001142790 TAUG:TLRYCALLMember 2021-04-01 2021-09-30 0001142790 TAUG:TLRYCALLMember 2021-09-30 0001142790 TAUG:AxsomeTherapeuticsIncMember 2021-03-31 0001142790 TAUG:AxsomeTherapeuticsIncMember 2021-04-01 2021-09-30 0001142790 TAUG:AxsomeTherapeuticsIncMember 2021-09-30 0001142790 TAUG:BiosigTechnologiesIncMember 2021-03-31 0001142790 TAUG:BiosigTechnologiesIncMember 2021-04-01 2021-09-30 0001142790 TAUG:BiosigTechnologiesIncMember 2021-09-30 0001142790 TAUG:VistaGenTherapeuticsIncMember us-gaap:WarrantMember 2020-04-01 2021-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember us-gaap:WarrantMember 2021-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember us-gaap:WarrantMember TAUG:StockPurchaseAgreementsMember 2020-04-01 2021-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember us-gaap:WarrantMember TAUG:StockPurchaseAgreementsMember 2021-03-31 0001142790 TAUG:VistaGenTherapeuticsIncMember 2020-05-01 2021-05-18 0001142790 TAUG:VistaGenTherapeuticsIncMember 2020-05-18 0001142790 TAUG:SciSparcLtdMember 2021-03-02 0001142790 TAUG:SciSparcLtdMember 2021-03-01 2021-03-02 0001142790 TAUG:SciSparcLtdMember TAUG:WarrantAMember 2021-03-02 0001142790 TAUG:SciSparcLtdMember TAUG:WarrantBMember 2021-03-02 0001142790 TAUG:SciSparcLtdMember TAUG:PreFundedWarrantMember 2021-03-02 0001142790 TAUG:BLNKCALLSMember TAUG:CallOptionsMember 2021-09-30 0001142790 TAUG:BLNKCALLSMember TAUG:CallOptionsMember 2021-04-01 2021-09-30 0001142790 TAUG:BYNDCALLSMember TAUG:CallOptionsMember 2021-09-30 0001142790 TAUG:BYNDCALLSMember TAUG:CallOptionsMember 2021-04-01 2021-09-30 0001142790 TAUG:CanooIncMember us-gaap:WarrantMember 2021-09-30 0001142790 TAUG:CallOptionsMember TAUG:TLRYCALLMember 2021-09-30 0001142790 TAUG:CallOptionsMember TAUG:TLRYCALLMember 2021-04-01 2021-09-30 0001142790 us-gaap:CommonStockMember TAUG:AYTUBioscienceMember 2021-09-30 0001142790 us-gaap:CommonStockMember TAUG:AYTUBioscienceMember 2018-08-09 2018-08-10 0001142790 us-gaap:CommonStockMember TAUG:AYTUBioscienceMember 2020-12-07 2020-12-08 0001142790 us-gaap:WarrantMember TAUG:AYTUBioscienceMember 2021-09-30 0001142790 TAUG:SeriesAWarrantsMember us-gaap:PrivatePlacementMember TAUG:SciSparcLtdMember 2021-03-02 0001142790 TAUG:SeriesBWarrantsMember us-gaap:PrivatePlacementMember TAUG:SciSparcLtdMember 2021-03-02 0001142790 TAUG:PazGumLLCMember TAUG:MembershipUnitPurchaseAgreementMember 2021-02-05 0001142790 TAUG:CollaborationAgreementMember TAUG:AegeaBiotechnologiesIncMember 2021-03-31 0001142790 TAUG:CollaborationAgreementMember TAUG:AegeaBiotechnologiesIncMember 2020-04-01 2021-03-31 0001142790 TAUG:AegeaBiotechnologiesIncMember 2021-02-25 2021-02-26 0001142790 TAUG:AegeaBiotechnologiesIncMember 2021-02-26 0001142790 TAUG:AegeaBiotechnologiesIncMember 2021-09-30 0001142790 TAUG:OwnershipMember TAUG:SerendipityBrandsLLCMember 2018-10-31 0001142790 TAUG:SerendipityBrandsLLCMember 2018-10-28 2018-10-31 0001142790 TAUG:SerendipityBrandsLLCMember 2020-04-01 2021-03-31 0001142790 us-gaap:FairValueInputsLevel1Member 2021-09-30 0001142790 us-gaap:FairValueInputsLevel2Member 2021-09-30 0001142790 us-gaap:FairValueInputsLevel3Member 2021-09-30 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:SerendipityBrandsMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:SerendipityBrandsMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:SerendipityBrandsMember 2021-09-30 0001142790 TAUG:SerendipityBrandsMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:AegeaBiotechnologiesIncMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:AegeaBiotechnologiesIncMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:AegeaBiotechnologiesIncMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:PazGumLLCMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:PazGumLLCMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:PazGumLLCMember 2021-09-30 0001142790 TAUG:PazGumLLCMember 2021-09-30 0001142790 us-gaap:FairValueInputsLevel1Member 2021-03-31 0001142790 us-gaap:FairValueInputsLevel2Member 2021-03-31 0001142790 us-gaap:FairValueInputsLevel3Member 2021-03-31 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:SerendipityBrandsMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:SerendipityBrandsMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:SerendipityBrandsMember 2021-03-31 0001142790 TAUG:SerendipityBrandsMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:AegeaBiotechnologiesIncMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:AegeaBiotechnologiesIncMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:AegeaBiotechnologiesIncMember 2021-03-31 0001142790 TAUG:AegeaBiotechnologiesIncMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel1Member TAUG:PazGumLLCMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel2Member TAUG:PazGumLLCMember 2021-03-31 0001142790 us-gaap:FairValueInputsLevel3Member TAUG:PazGumLLCMember 2021-03-31 0001142790 TAUG:PazGumLLCMember 2021-03-31 0001142790 TAUG:OneSupplierMember us-gaap:AccountsPayableMember us-gaap:SupplierConcentrationRiskMember 2021-04-01 2021-09-30 0001142790 us-gaap:SubsequentEventMember TAUG:ConsultingAgreementMember 2021-10-01 2021-11-14 0001142790 TAUG:DrDavidWolizkyMember us-gaap:SubsequentEventMember 2021-10-01 2021-11-14 0001142790 us-gaap:SubsequentEventMember 2021-10-01 2021-11-14 0001142790 TAUG:InvestorsMember us-gaap:SubsequentEventMember 2021-10-01 2021-11-14 0001142790 TAUG:InvestorsMember us-gaap:SubsequentEventMember 2021-11-14 0001142790 TAUG:PromissoryNotesMember us-gaap:SubsequentEventMember TAUG:SecurityPurchaseAgreementMember 2021-10-11 0001142790 us-gaap:SubsequentEventMember 2021-10-01 2021-10-11 0001142790 TAUG:PromissoryNotesMember us-gaap:SubsequentEventMember TAUG:SecurityPurchaseAgreementMember 2021-10-01 2021-10-11 iso4217:USD xbrli:shares iso4217:USD xbrli:shares xbrli:pure

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2021

 

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from _________to _________

 

Commission file number 000-53723

 

 

TAURIGA SCIENCES, INC.

(Exact name of registrant as specified in its charter)

 

Florida   30-0791746

(State or other jurisdiction of

incorporation or organization)

  (I.R.S. Employer
Identification No.)

 

4 Nancy Court, Suite 4

Wappingers Falls, NY 12590

(Address of principal executive offices) (Zip Code)

 

(917) 796-9926

(Registrant’s telephone number, including area code)

 

Securities registered under Section 12(b) of the Exchange Act:

None

 

Securities registered under Section 12(g) of the Exchange Act:

 

Common Stock, $.00001 Par Value

(Title of class)

 

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐   Accelerated filer ☐
Non-accelerated filer   Smaller reporting company
(Do not check if smaller reporting company) Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

 

As of November 15, 2021, the registrant had 299,908,214 shares of its Common Stock, $0.00001 par value, outstanding.

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol   Name of each exchange on which registered
Common Stock, par value $0.0001 per share   TAUG   OTCQB

 

 

 

 
 

 

TABLE OF CONTENTS

 

      Pages
       
PART I. FINANCIAL STATEMENTS    
       
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:   F-1
       
  Condensed Consolidated Balance Sheets as of September 30, 2021 (unaudited) and March 31, 2021   F-1
       
  Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2021 and 2020 (unaudited)   F-2
       
  Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three and six months ended September 30, 2021 and 2020 (unaudited)   F-3
       
  Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2021 and 2020 (unaudited)   F-4
       
  Notes to Condensed Consolidated Financial Statements (unaudited)   F-5
       
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   3
       
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK   14
       
Item 4. CONTROLS AND PROCEDURES   14
       
PART II. OTHER INFORMATION    
       
Item 1. LEGAL PROCEEDINGS   15
       
Item 1A. RISK FACTORS   15
       
Item 2. UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS   18
       
Item 3. DEFAULTS UPON SENIOR SECURITIES   18
       
Item 4. MINE SAFETY DISCLOSURES   18
       
Item 5. OTHER INFORMATION   18
       
Item 6. EXHIBITS   19

 

2
 

 

PART I. FINANCIAL STATEMENTS

 

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN US$)

 

    September 30, 2021     March 31, 2021  
  (UNAUDITED)        
ASSETS            
Current assets:            
Cash   $ 28,698     $ 49,826  
Accounts receivable, net allowance for doubtful accounts     9,861       32,227  
Investment - trading securities     1,035,511       1,334,425  
Investment - other     224,106       224,106  
Inventory asset     379,989       201,372  
Prepaid inventory     49,726       423,200  
Prepaid expenses and other current assets     165,694       131,411  
Total current assets     1,893,585       2,396,567  
                 
Lease right of use asset     56,797       64,301  
Assets held for resale     11,084       11,084  
Property and equipment, net     12,062       12,063  
Leasehold improvements, net of amortization     4,063       4,688  
                 
Total assets   $ 1,977,591     $ 2,488,703  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                
Current liabilities:                
Notes payable, net of discounts   $ 1,383,574     $ 504,819  
Accounts payable     148,310       390,947  
Accrued interest     60,728       14,722  
Accrued expenses     54,827       68,442  
Liability for common stock to be issued     219,000       174,000  
Lease liability - current portion     15,075       14,426  
Deferred revenue     5,997       -  
Total current liabilities     1,887,511       1,167,356  
                 
Lease liability - net of current portion     42,398       50,100  
Contingent liability     75,000       -  
Total liabilities     2,004,909       1,217,456  
                 
Stockholders’ equity (deficit):                
Common stock, par value $0.00001; 400,000,000 shares authorized, 290,421,214 and 275,858,714 outstanding at September 30, 2021 and March 31, 2021, respectively     2,905       2,760  
Additional paid-in capital     64,687,499       63,417,565  
Accumulated deficit     (64,717,722 )     (62,149,078 )
Accumulated other comprehensive income     -       -  
Total stockholders’ equity (deficit)     (27,318 )     1,271,247  
                 
Total liabilities and stockholders’ equity (deficit)   $ 1,977,591     $ 2,488,703  

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

F- 1
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN US$)

 

                         
    For the Three Months Ended     For the Six Months Ended  
    September 30,     September 30,  
    2021     2020     2021     2020  
                         
Gross revenue   $ 122,127     $ 87,185     $ 168,067     $ 171,686  
Sales Discounts     (12,755 )     (10,996 )     (24,962 )     (30,430 )
Sales returns     (2,026 )     (830 )     (2,392 )     (1,093 )
Net Revenue     107,346       75,360       140,713       140,164  
                                 
Cost of goods sold     59,224       60,032       74,427       87,063  
                                 
Gross profit     48,122       15,328       66,286       53,101  
                                 
Operating expenses                                
Marketing and advertising     310,457       41,836       406,736       74,902  
Research and development     94,624       25,488       108,063       27,305  
Fulfilment services     20,059       16,700       60,517       38,950  
General and administrative     817,810       320,246       1,660,618       904,719  
Depreciation and amortization expense     1,326       216       2,571       435  
Total operating expenses     1,244,276       404,486       2,238,505       1,046,311  
                                 
Loss from operations     (1,196,154 )     (389,158 )     (2,172,219 )     (993,210 )
                                 
Other income (expense)                                
Interest expense     (418,982 )     (292,788 )     (854,793 )     (612,410 )
Unrealized gain (loss) on trading securities     (671,875 )     39,077       (918,041 )     59,110  
Gain (Loss) on conversion of debt     -       -       -       (45,770 )
Gain on sale of trading securities     550,731       -       1,376,409       -  
Total other income (expense)     (540,126 )     (253,711 )     (396,425 )     (599,070 )
                                 
LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES     (1,736,280 )     (642,869 )     (2,568,644 )     (1,592,280 )
                                 
PROVISION FOR INCOME TAXES                     -          
                                 
Net loss     (1,736,280 )     (642,869 )     (2,568,644 )     (1,592,280 )
                                 
Net loss attributable to common shareholders   $ (1,736,280 )   $ (642,869 )   $ (2,568,644 )   $ (1,592,280 )
Loss per share - basic and diluted - Continuing operations   $ (0.006 )   $ (0.004 )   $ (0.009 )   $ (0.010 )
Weighted average number of shares outstanding - basic and fully diluted     282,675,039       146,966,946       282,675,039       164,869,672  

 

F- 2
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2020 AND 2021

 

                                           
                            Accumulated              
                Additional           other           Total  
    Number of           paid-in     Accumulated     comprehensive     Subscription     stockholders’  
    shares     Amount     capital     deficit     income (loss)     Receivable     deficit  
                                           
Balance at June 30, 2020   145,323,728     $ 1,453     $ 59,401,093     $ (59,472,043 )   $                    -     $ -     $ (69,497 )
Issuance of shares to CEO for cash at $0.05 per share     700,000     7     34,993     -     -     -     35,000  
Issuance of shares via private placement at $0.025 to $0.035 per share     7,850,000       79       214,296       -       -       (60,000 )     154,375  
Issuance of commitment shares - debt financing at $0.027808 to $0.0344 per share     215,000       2       7,541       -       -       -       7,543  
Shares issued for note conversion at $0.01869 to $0.02128 per share     18,497,751       185       348,462       -       -       -       348,647  
Stock-based compensation vesting     -       -       31,221       -       -       -       31,221  
Stock issued for services at $0.31 to $0.32     -       -       -       -       -       -       -  
Issuance of unrestricted shares - Tangiers Investment agreement at $0.02614 to $0.02754     7,000,000       70       214,994       -       -       -       215,064  
Recognition of beneficial conversion feature of convertible notes     -       -       -       -       -       -       -  
Cumulative effect of adoption of Lease standard ASC 842     -       -       -       -       -       -       -  
Net loss for the three months ended September 30, 2020     -       -       -       (642,869 )     -       -       (642,869 )
                                                         
Balance at September 30, 2020     179,586,479     $ 1,796     $ 60,252,600     $ (60,114,912 )   $ -     $ (60,000 )   $ 79,484  
                                                         
Balance at June 30, 2021     285,696,214     $ 2,858     $ 64,232,854     $ (62,981,442 )   $ -     $ -     $ (1,254,270 )
Issuance of shares via private placement at $0.024 to $0.09 per share     1,700,000     $ 17     $ 67,983     $ -     $ -     $ -     $ 68,000  
Issuance of commitment shares - debt financing at $0.028 to $0.092 per share     1,250,000       12       55,987       -       -       -       55,999  
Stock-based compensation vesting     -       -       295,693       -       -       -       295,693  
Stock issued for services at $0.0306 to $0.05     1,775,000       18       (18 )     -       -       -       -  
Recognition of beneficial conversion feature of convertible notes     -       -      

35,000

      -       -       -       -  
Net loss for the three months ended September 30, 2021     -       -       -       (1,736,280 )     -       -       (1,736,280 )
Balance at September 30, 2021     290,421,214     $ 2,905     $ 64,687,499     $ (64,717,722 )     -       -     $ (27,318 )

 

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(UNAUDITED)

 

                            Accumulated              
                Additional           other           Total  
    Number of           paid-in     Accumulated     comprehensive     Subscription     stockholders’  
    shares     Amount     capital     deficit     income (loss)     Receivable     deficit  
                                           
Balance at March 31, 2021     275,858,714     $ 2,760     $ 63,417,565     $ 62,149,078     $          -     $        -     $ 1,271,247  
                              -                       -  
Issuance of shares via private placement at $0.024 to $0.09 per share     4,000,000       40       241,960       -       -       -       242,000  
Issuance of commitment shares - debt financing at $0.028 to $0.092 per share     3,050,000       30       256,969       -       -       -       256,999  
Stock-based compensation vesting     -       -       358,080       -       -       -       358,080  
Stock issued for services at $0.0306 to $0.05     7,512,500       75       (75 )     -       -       -       -  
Recognition of beneficial conversion feature of convertible notes     -       -       413,000       -       -       -       413,000  
Net loss for the six months ended September 30, 2021     -       -       -       (2,568,644 )     -       -       (2,568,644 )
Balance at September 30, 2021     290,421,214     $ 2,905     $ 64,687,499     $ (64,717,722 )   $ -     $ -     $ (27,318 )
                                                         
Balance at March 31, 2020     107,039,107     $ 1,070     $ 58,213,365     $ (58,522,632 )   $ -     $ -     $ (308,197 )
Issuance of shares to CEO for cash at $0.05 per share     700,000       7       34,993       -       -       -     $ 35,000  
Issuance of shares via private placement at $0.025 to $0.035 per share     13,850,000       139       405,236       -       -       (60,000 )      345,375  
Issuances of commitment shares - debt financing at $0.03 to $0.0322 per share     740,000       7       24,111       -       -       -       24,118  
Shares issued for note conversion at $0.01869 to $0.02128 per share     38,507,372       385       746,325       -       -       -       746,710  
Stock-based compensation vesting     -       -       277,070       -       -       -       277,070  
Stock issued for services at $0.31 to $0.32     6,000,000       60       (60 )     -       -       -       -  
Issuance of unrestricted shares - Tangiers Investment agreement at $0.02614 to $0.02754     12,750,000       128       369,354       -       -       -       369,482  
Recognition of beneficial conversion feature of convertible notes     -       -       182,206       -       -       -       182,206  
Net loss for the six months ended September 30, 2020     -       -       -       (1,592,280 )     -       -       (1,592,280 )
                                                         
Balance at September 30, 2020     179,586,479     $ 1,796     $ 60,252,600     $ (60,114,912 )    $ -     $ (60,000 )    $ 79,484  

 

F- 3
 

 

TAURIGA SCIENCES, INC. AND SUBSDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US$)

 

    2021     2020  
    For the Six Months Ended  
    September 30,  
    2021     2020  
Cash flows from operating activities                
Net loss attributable to controlling interest   $ (2,568,644 )   $ (1,592,280 )
Adjustments to reconcile net loss to cash used in operating activities:                
Bad debt expense     5,851       29,404  
Amortization of original issue discount     49,083       57,165  
Non-cash lease operating lease expense     451       3,546  
Depreciation and amortization     2,571       435  
Non-cash interest     257,000       24,119  
Amortization of debt discount     367,672       483,734  
Common stock issued and issuable for services (including stock-based compensation)     358,079       277,071  
Gain on disposal of discontinued operation     -       -  
Legal fees deducted from proceeds of notes payable     -       6,700  
(Gain) loss on the sale of trading securities     (1,376,409 )     -  
Unrealized loss (gain) on trading securities     918,042       (59,110 )
(Increase) decrease in assets                
Prepaid expenses     (34,283 )     54,209  
Inventory (including inventory not received)     194,857       (125,089 )
Investments in trading securities     (1,579,632 )     -  
Proceeds from sale of trading securities     2,336,914       -  
Accounts receivable     16,515       (16,175 )
Increase (decrease) in liabilities             -  
Accounts payable     (242,637 )     21,242  
Deferred revenue     5,997       (384 )
Accrued expenses     61,385       2,092  
Accrued interest     46,006       46,745  
Cash used in operating activities     (1,181,183 )     (786,576 )
                 
Cash flows from investing activities                
Investment - other     -       (278,212 )
Purchase of property and equipment     (1,945 )     -  
Cash used in investing activities     (1,945 )     (278,212 )
                 
Cash flows from financing activities                
Repayment of principal on notes payable to individuals and companies     (245,000 )     (100,000 )
Proceeds from the sale of common stock (including to be issued)     287,000       359,313  
Proceeds from notes payable to individuals and companies     1,120,000       -  
Proceeds from sale of registered shares - Tangiers Investment Agreement     -       369,482  
Proceeds from convertible notes     -       432,800  
Cash provided by financing activities     1,162,000       1,061,595  
Net decrease in cash     (21,128 )     (3,193 )
                 
Cash, beginning of year     49,826       5,348  
Cash, end of year   $ 28,698     $ 2,155  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW                
INFORMATION:                
Interest Paid   $ 16,721     $ 50,000  
Taxes Paid   $ -     $ -  
                 
NON-CASH ITEMS                
Conversion of notes payable and accrued interest for common stock   $ -     $ 746,708  
Original issue discount on notes payable and debentures   $ 73,500     $ -  
Recognition of debt discount   $ 413,000     $ 182,206  

 

The accompanying notes are an integral part of the consolidated financial statements.

 

F- 4
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN

 

NATURE OF BUSINESS

 

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain certain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the March 31, 2021 Form 10-K filed with the SEC, including the audited consolidated financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts is in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

 

These condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

 

Tauriga Sciences, Inc. (the “Company”) is a Florida corporation, with its principal place of business located at 4 Nancy Court, Suite 4, Wappingers Falls, NY 12590. The Company has, over time, moved into a diversified life sciences technology and consumer products company, with its mission to operate a revenue generating business, while continuing to evaluate potential acquisition candidates operating in the life sciences technology and consumer products spaces.

 

Tauriga Pharma Corp.

 

On January 4, 2018, the Company announced the formation of a wholly owned subsidiary in Delaware, now known as Tauriga Pharma Corp. This subsidary’s focus is on the development of a pharmaceutical product line that is synergistic with the Company’s primary CBD product line. Currently, the plan is to initially create a pharmaceutical line of products to address nausea symptoms related to chemotherapy treatment in patients, which we will submit for clinical trials and to regulatory agencies for approval.

 

On March 18, 2020, the Company filed a Provisional U.S. Patent Application covering its pharmaceutical grade version of Tauri-Gum™. This patent application, filed with the United States Patent & Trademark Office (“U.S.P.T.O.”), titled: “MEDICATED CBD COMPOSITIONS, METHODS OF MANUFACTURING, AND METHODS OF TREATMENT.” The Company’s proposed pharmaceutical grade version of Tauri-Gum™ is being developed for nausea regulation, intended specifically to target patients subjected to ongoing chemotherapy treatment(s) (the “Indication”). The delivery system for this pharmaceutical product is an improved version of the existing “Tauri-Gum™” chewing gum formulation based on continued research and development. The Company converted this provisional patent application into a U.S. Non-Provisional Patent Application March 17, 2021.

 

On March 17, 2021, the Company converted its U.S. Provisional Patent Application (filed on March 17, 2020) to a U.S. Non-Provisional Patent Application. This non-provisional patent application relates to the Company’s proposed pharmaceutical cannabinoid chewing gum delivery system for treatment of nausea derived from active chemotherapy treatment.

 

Also on March 17, 2021, the Company filed an additional U.S. Provisional Patent Application relating to alternative pharmaceutical cannabinoid delivery systems.

 

On March 17, 2021, the Company filed an International Patent Application under the Patent Cooperation Treaty (“PCT”), a cooperative agreement entered into by more than 130 countries with the purpose of bringing international conformity to the filing and preliminary evaluation of patent applications. This application relates to the Company’s proposed pharmaceutical cannabinoid chewing gum delivery system being developed to treat nausea derived from active chemotherapy treatment.

 

The PCT application is published by the International Bureau at the World Intellectual Property Organization (“WIPO”), based in Geneva, Switzerland, in one of the ten “languages of publication”: Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, and Spanish.

 

F- 5
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

NATURE OF BUSINESS (CONTINUED)

 

Tauriga Pharma Corp. (Continued)

 

Currently, the pharmaceutical grade version of Tauri-GumTM is in the pre-IND stage of development. The development team is working on several parallel workstreams, including:

 

formulation development;

 

non-clinical in vivo and in vitro studies to inform the effective clinical dose and safety margin;

 

regulatory strategy and regulatory documentation preparation;

 

confirmation of the active pharmaceutical ingredient (API); and

 

Identifying pharma-grade API suppliers.

 

Tauriga Sciences Limited

 

On June 10, 2019, the Company formed a wholly owned subsidiary, Tauriga Sciences Limited, with the Registrar of Companies for Northern Ireland. Tauriga Sciences Limited is a private limited Company. The entity was established in conjunction with e-commerce merchant services. In conjunction to this new entity the Company entered into a two-year lease commencing on June 11, 2019. The office is located at Regus World Trade Centre Muelle de Barcelona, edif. Sur, 2a Planta Barcelona Cataluña 08039 Spain. The Company terminated this lease during October 2020. The Company no longer maintains an office in this region.

 

Chief Medical Officer

 

On July 15, 2020, the Company appointed Dr. Keith Aqua (“Dr. Aqua”) as an independent contractor to the position of Chief Medical Officer (“CMO”) and entered into a consulting agreement with Dr. Aqua carrying a term of 12 months from inception, expiring on July 15, 2021. In his CMO capacity, Dr. Aqua assisted the Company in the development of the Company’s proposed pharmaceutical grade version of Tauri-Gum™. In addition, Dr. Aqua helped to establish a distribution network for the Company to market its Tauri-Gum™ brand to a variety of physicians and medical practices in southern Florida. In consideration of the services provided by Dr. Aqua, and pursuant to the terms of the Agreement, the Company issued Dr. Aqua (i) upon entry into the Agreement 750,000 shares of restricted common stock, (ii) 750,000 shares of restricted common stock which were issued in equal monthly instalments of 62,500 shares beginning August 15, 2020 thru the expiration date, and (iii) agreed to $4,000 cash per quarter during the term of the Agreement, payable following the completion of each such quarter. As of September 30, 2021, the Company issued 1,500,000 restricted shares of its common stock to Dr. Aqua valued at $59,250 ($0.0395 per share). As of this report date, the Company is negotiating the renewal of this agreement.

 

NFTauriga Corp.

 

Effective April 14, 2021, the Company formed NFTauriga Corp. in the State of Deleware, as a wholly owned subsidiary. The Company is the sole holder of total authorized 100 shares having a par value of $0.00001. The Company’s Chief Executive Officer, Seth M. Shaw is the initial sole member of the board of directors, to serve until a qualified successor is duly elected. Mr. Shaw will also serve as the Chief Executive Officer and Secretary. The registered office of NFTauriga Corp. in the State of Delaware shall be at 1013 Centre Road, Suite 403-B, Wilmington, DE 19805 in the County of New Castle. The name of its registered agent at such address is Vcorp Services, LLC. NFTauriga Corp. will have the same fiscal year and principal executive office and the Company.

 

F- 6
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

Master Services Agreement

 

On December 16, 2020, the Company entered into a Master Services Agreement with North Carolina based Clinical Strategies & Tactics, Inc. (“CSTI”) to resume the clinical development of its proposed anti-nausea pharmaceutical grade version of Tauri-Gum™. CSTI will primarily focus its efforts on (i) Pharmaceutical Development Strategy, (ii) Commercialization Strategy, and (iii) Funding Strategy. The Company will with work with CSTI’s founder and chief executive officer, JoAnn C. Giannone. Ms. Giannone has over 25 years’ experience effectively leading companies through the drug and medical device development process. On December 23, 2020, the Company funded the initial consulting fees associated with this Agreement, in the amount of $67,500, exclusive of out-of-pocket reimbursable expenses. The Company has paid additional fees, effected through change orders to the original contract, in the amount of $85,000. These additional fees were for pharmaceutical testing and market research. Under the terms of the Agreement and related statement of work, CTSI will provide a high-level assessment and documentation of the development efforts required to commercialize the proposed pharmaceutical product globally, a commercial assessment, and a review of potential funding strategies and funding sources and potential business partners. The delivery system for this proposed pharmaceutical version is a modified version (with higher concentration of CBD) of the existing Tauri-Gum™” chewing gum formulation based on continued research and development. As of September 30, 2021, $2,536 of contract payments were recorded as prepaid expense for services yet to be rendered.

 

COMPANY PRODUCTS

 

Tauri-GumTM

 

In late December 2018, the Company entered into a “Manufacturing Agreement” with Maryland based chewing gum manufacturer, Per Os Biosciences LLC (“Per Os Bio”) to launch a white label line of CBD infused chewing gum under the brand name Tauri-GumTM.

 

The Manufacturing Agreement with Per Os Bio to produce Tauri-GumTM initially consisted of 10mg of CBD isolate for its inaugural mint flavor. This proprietary CBD Gum will be manufactured under U.S. Patent # 9,744,128 (“Method for manufacturing medicated chewing gum without cooling”). Each production batch is tested by a 3rd Party for CBD label content, THC content (0%), and clear for microbiology. The retail packaging consists of an 8-piece blister card labeled with lot number and expiration date.

 

In October 2019, we also filed trademark applications for the above-referenced marks in each of the European Union and Canada. The Company received notice of allowance from the European Union Intellectual Property Office granting the Company its trademark registration for Tauri-Gum™ (E.U. Trademark # 018138334) on February 18, 2020.

 

During fiscal year 2020, the Company commenced development of a cannabigerol “CBG” isolate infused version of Tauri-Gum™ introducing Peach-Lemon flavor (containing 10mg CBG per piece) and Black Currant Flavor (containing 15mg of CBG per piece).

 

During fiscal year 2021, the Company developed an Immune Booster version of Tauri-Gum™ chewing gum. This product contains 60mg of Vitamin C and 10mg of Elemental Zinc per piece. This product does not contain any phytocannabinoids (i.e., CBD or CBG).

 

During late fiscal year 2021, the Company enhanced its original Tauri-Gum™ formulation by increasing the infusion concentrations of both its Cannabidiol (“CBD”) and Cannabigerol (“CBG”) Tauri-Gum™ products to 25mg per piece of chewing gum (previous concentration was 10mg for the Pomegranate, Blood Orange, Mint, and Peach-Lemon flavors and 15mg for the Black Currant flavor). Additionally, the Company increased its Tauri-Gum™ product offerings to 9 SKUs. The new offerings being introduced are Cherry-Lime Rickey flavored Caffeine infused chewing gum, an 8-piece blister pack of containing 50mg of caffeine per piece and Golden Raspberry flavored Vitamin D3 infused chewing gum, containing 2,000 IU (50 micrograms) of Vitamin D3 per piece. Through its October 2020 partnership with Think Big LLC (the Company founded by the son of late iconic U.S. rap artist, NOTORIOUS BIG aka “Frank White”), the Company is also offering 2 limited edition Licensed Tauri-Gum™/Frank White products: Honey-Lemon flavored chewing gum (containing: 15mg CBD, 15mg CBG, 5mg Vitamin C, 10mg Zinc per piece) and Mint flavor (25mg CBD per piece).

 

Delta 8 Version of Tauri-Gum™

 

During March 2021, the Company developed a Delta-8-Tetrahydrocannabinol (“Delta-8-THC” or “Delta-8”) infused version of Tauri-Gum™. The Company is focused on expanding both its product offerings and revenue opportunities, in a manner that is ethical, innovative, and fully compliant with Federal laws & regulations. Due to strong indications of demand, the Company has completed a double production run of its Evergreen Mint flavor, Delta 8 THC infused (10mg per piece of chewing gum), Version of Tauri-Gum™.

 

All of the CBD/CBG Tauri-GumTM skus are made in the USA, formulations are allergen free, gluten free, vegan, kosher certified (K-Star), Halal certified (Etimad), non-GMO, vegan incorporated by a proprietary lab-tested manufacturing process.

 

F- 7
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

COMPANY PRODUCTS (CONTINUED)

 

Tauri-Gummies

 

On November 25, 2019, the Company announced that it has finalized the formulation for its Vegan 25 mg CBD (Isolate) Infused Gummies product to be branded Tauri-Gummies™ for which a trademark was filed in Switzerland and the European Union. The company has received a Notice of Allowance from the European Union Intellectual Property Office (“E.U.I.P.O.”) granting the Company its trademark Registration for: Tauri-Gummies™ (E.U. Trademark # 018138348), effective June 24, 2020. This Notice of Allowance extends our protective period for this mark until October 2029 and may be extended thereafter for ten-year intervals.

 

This gelatin free, plant-based, Vegan and Kosher certified formulation contains 24 gummies per jar, 6 of each flavor (cherry, orange, lemon and lime). Each gummy contains 25mg of CBD isolate (600 mg of CBD isolate per jar). These gum drops have been manufactured in the “Nostalgic” 1950s confectionary style. The Company commenced sales of Tauri-Gummies™ in January 2020.

 

Other Products

 

The Company, from time to time, will offer various formats of CBD product through its e-commerce website. As of this report date the Company is currently offering a 70% dark chocolate 30mg CBD non-GMO dietary supplement and 100mg CBD scented bath bombs (Mint, Pomegranate, Blood Orange, Black Currant). The Company also offers 100mg CDG infused Peach/Lemon bath bombs as well as a D3 infused Golden Raspberry and Cherry Lime Rickey caffeine infused bath bombs. The Company’s current offering includes a line of skin care products sold on its ecommerce website under the product line name of Uncle Bud’s. The skin care products include three different 4.2mg CBD facemasks (collagen, detoxifying and tightening masks), 100mg CBD daily moisturizer, 30mg CBD anti-wrinkle dream, hand and foot cream with hemp seed oil, 120mg CBD massage and body oil, 240mg CBD body revive roll-on, 35mg CBD transdermal patch and 120mg CBD body spray. The Company also offers Tauri-Pet dog food in three flavors (peanut butter, butternut squash and crispy apple.

 

On July 12, 2021, the Company announced two new topical products; CBD infused Sunscreen Spray and Acai Fragrance Moisturizing Lip Balm. These two products will be manufactured, under Tauri-Sun™ brand name. Tauri-Sun™ Sunscreen Spray has a 30 SPF (sun protection factor) and is infused 200mg of CBD isolate per 3-ounce container. The easy to use “Spray On” delivery system is hypoallergenic and environmentally responsible (Reef Friendly). The Tauri-Sun™ Acai Fragrance Moisturizing Lip Balm has a 30 Sun Protection Factor (“SPF”) is dermatologist tested and CBD infused.

 

For a full list of our currently available products please visit our e-Commerce website at https://taurigum.com/.

 

See our “Risk Factors” contained in our Annual Report dated March 31, 2021 filed with the Securities and Exchange Commission on June 29, 2021, as amended August 16, 2021including with respect, but not limited, to Federal laws and regulations that govern CBD and cannabis.

 

DISTRIBUTION OF THE COMPANY’S PRODUCTS

 

Think BIG, LLC License Agreement

 

On September 24, 2020, we entered into (i) a License Agreement (“License”) with Think BIG, LLC, a Los Angeles based company (“Think BIG”), (ii) a Professional Services Agreement (the “PSA”) with Willie C. Mack, Jr., CEO of Think BIG and (iii) a Professional Services Agreement (“PSA 2”) with Christopher J. Wallace, a co-founder of Think BIG (each of Willie C. Mack, Jr. and Christopher J. Wallace referred to herein as a “Brand Ambassador”), with the collective intent to enhance sales and marketing of the Company’s product lines, including its proprietary Rainbow Deluxe Sampler Pack (“Rainbow Pack”), and any co-branded products created by the parties to the License and each of the PSAs (the “Co-Branded Products”).

 

F- 8
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

DISTRIBUTION OF THE COMPANY’S PRODUCTS (CONTINUED)

 

Think BIG, LLC License Agreement (Continued)

 

The term of this license is for a period of two years from September 24, 2020 (the “Effective Date”), unless earlier terminated by either party pursuant to the terms thereunder. The term of each of the PSA and the PSA 2 shall commence on the Effective Date and end on the earlier of (i) the two-year anniversary thereof; (ii) the termination for any reason of the License; or (iii) the earlier termination of the PSA Agreement pursuant to the terms thereunder.

 

The licensing arrangement permits for cross licensing, brand building, e-commerce customer acquisition efforts, retail customer acquisition efforts, enhanced social media presence, public relations & visibility strategies, as well as potential outreach to celebrities, and various other types of in-kind services in order to increase both Company revenue and customer acquisition efforts. The License will also allow for future joint development projects that will leverage the iconic “Frank White” brand and likeness/intellectual property (to which Think Big has the intellectual property rights). The Companies further agreed to a 50/50 gross profit split on sales of specially branded product, payable on or before the 15th day of each calendar month for the immediately preceding calendar month. In addition, the Company originally agreed to pay Think BIG, via a quarterly marketing fee for a period of twelve months in the amount $15,000 per quarter (for an aggregate total of $60,000), the first payment of which was paid by the Company within 10 days of the entry into the License. Subsequently, the parties agreed that the remaining payments would no longer be paid to Think BIG in exchange for the Company funding specially branded inventory printing and product as well as other marketing initiatives.

 

Under each of the PSA and the PSA 2, each Brand Ambassador shall provide promotional and marketing services (“Services”) to the Company during the term of the respective PSAs, subject to the terms and conditions set forth therein, in connection with the Co-Branded Products and any co-developed products; and perform their individual marketing and promotional services set forth under the PSA and the PSA 2, respectively, and each of the exhibits annexed thereto.

 

As consideration for each Brand Ambassador’s Services set forth under their respective PSAs, the Company agreed to issue each Brand Ambassador 1,500,000 restricted shares of the Company’s common stock, upon execution of the PSA and PSA 2. These shares were issued on December 17,2020. Under the PSA’s, the Company had initially agreed, following the one-year anniversary of the Effective Date, an additional 1,500,000 restricted shares of Company’s common stock could be issued to each Brand Ambassador, subject to the satisfaction of the terms of such additional services and/or criteria to be mutually agreed upon by the parties to the PSA and/or the PSA 2. The Company has determined that these additional shares will not be paid. The value of all shares issued and to be issued had a value of $183,600 that will be recognized over the term of the contract.

 

Stock Up Express Agreement

 

Effective February 1, 2021, the Company entered into a distribution agreement with Connecticut based Stock Up Express, a division of Bozzuto’s Inc., a distributor that generates more than $3 Billion in annual sales. The agreement shall remain in effect for a period of two (2) years, with automatic renewal for additional successive one (1) year terms. Under terms of this distribution agreement, Stock Up Express will market and resell the Company’s flagship brand, Tauri-Gum, to its customer base of wholesale and retail customers in the mainland United States. The two companies will jointly market Tauri-Gum™ to Stock Up Express’ customer base. The Agreement allows for modification of product offerings, and the Company expects to offer additional product items over the course of calendar year 2021. Either party may terminate this Agreement for convenience by giving a sixty (60) day written notice to the other party or either party has the right to terminate this agreement if the other party breaches or is in default of any obligation hereunder, including the failure to make any payment when due, which default is incapable of cure or which, being capable of cure, has not been cured within thirty (30) days after receipt of written notice from the non-defaulting party or within such additional cure period as the non-defaulting party may authorize in writing. As of September 30, 2021, the Company has recognized no sales under this agreement.

 

The Company has entered into multiple other arrangements that are more fully described in our periodic and current reports that we have filed with the Securities and Exchange Commission and included in those agreements filed by reference as exhibits thereto.

 

F- 9
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

REGULATORY MATTERS

 

Food and Drug Administration (“FDA”)

 

On May 31, 2019, the U. S. Food and Drug Administration (“FDA”) held public hearings to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds, including CBD. The hearing came approximately five months after the Agricultural Improvement Act of 2018 (more commonly known as the Farm Bill), went into effect and removed industrial hemp from the Schedule I prohibition under the Controlled Substances Act (CSA) (industrial hemp means cannabis plants and derivatives that contain no more than 0.3 percent tetrahydrocannabinol, or THC, on a dry weight basis).

 

Though the Farm Bill removed industrial hemp from the Schedule I list, the Farm Bill preserved the regulatory authority of the FDA over cannabis and cannabis-derived compounds used in food and pharmaceutical products under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. The FDA has been clear that it intends to use this authority to regulate cannabis and cannabis-derived products, including CBD, in the same manner as any other food or drug ingredient. In addition to holding the hearing, the agency had requested comments by July 2, 2019 regarding any health and safety risks of CBD use, and how products containing CBD are currently produced and marketed, which comment period was concluded on July 16, 2019. As of the date hereof, the FDA has taken the position that it is unlawful to put into interstate commerce food products containing hemp derived CBD, or to market CBD as, or in, a dietary supplement. Furthermore, since the closure of the FDA hearings on this issue, some state and local agencies have issued a ban on the sale of any food or beverages containing CBD. There have been legislative efforts at the federal level, which seek to provide clear guidance to industry stakeholders regarding how to comply with applicable FDA law with respect to CBD and other hemp derived cannabinoids. However, such legislative efforts have been limited and as of this date, these legislative efforts require extensive further approvals, including approval from both houses of Congress and the President of the United States, before being enacted into law, if at all.

 

FDA Clinical Trial Process – United States Drug Development

 

Furthermore, with respect to Company’s developing CBG and additional cannabinoid product lines, the FDA has provided no guidance as to how cannabinoids other than CBD (such as CBG) shall be regulated under the FD&C Act, and it is unclear at this time how such potential regulation could affect the results of the operations or prospects of the Company or this product line.

 

In the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under the FDCA and its implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.

 

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

 

● completion of extensive pre-clinical in vitro and animal studies to evaluate safety and pharmacodynamic effects, formulation development, analytical method development, and manufacturing of the active pharmaceutical ingredient (API) and drug product for clinical trials in accordance with applicable regulations, including the FDA’s Current Good Laboratory Practice (cGLP) regulations and Current Good Manufacturing Practice (cGMP) regulations;

 

● submission to the FDA of an Investigational New Drug (IND) application, which must become effective before human clinical trials may begin;

 

● performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related regulations, sometimes referred to as Current Good Clinical Practice (cGCPs), to establish the safety and efficacy of the proposed drug for its proposed indication, and API and drug product scale-up for registration batch production and stability;

 

● submission to the FDA of a New Drug Application (NDA);

 

F- 10
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

REGULATORY MATTERS (CONTINUED)

 

FDA Clinical Trial Process – United States Drug Development (Continued)

 

● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with the FDA’s cGMP requirements;

 

● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and

 

● FDA review and approval of the NDA prior to any commercial marketing or sale.

 

Once a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests include laboratory evaluations of product characterization, drug product formulation development and stability, as well as pharmacology and toxicology animal studies. An IND Sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose.

 

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal Representative and must monitor the clinical trial until completed.

 

Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety.

 

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined. The phases are described below. For the TAUG Pharma product, however, the safety profile of the API is known, and a Phase 1 program is not expected. Therefore, it is anticipated that that the first-time-in-human (FTIH) study will be a Phase 2 study.

 

● Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients.

 

● Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.

 

● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling.

 

F- 11
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

REGULATORY MATTERS (CONTINUED)

 

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

 

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or Investigator Brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the clinical trial Sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated check points based on access to certain data from the study. The clinical trial Sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

 

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested. Stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

 

NDA and FDA Review Process

 

The results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug, requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial user fee, and the sponsor of an approved NDA is also subject to an annual program user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review.

 

The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA typically decides on accepting an NDA for filing within 60 days of receipt. The decision to accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and may go through multiple review cycles.

 

After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMPs to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel drug products or drug products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of an NDA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.

 

F- 12
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

REGULATORY MATTERS (CONTINUED)

 

Before approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMPs. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter usually describes all the specific deficiencies in the NDA identified by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than the Sponsor interprets the same data.

 

New York State Department of Health

 

The New York State Department of Health (NYDPH) has begun implementing regulations concerning the processing and retail sale of hemp derived cannabinoids. Under the regulations, “cannabinoid” is broadly defined as “any phytocannabinoid found in hemp, including but not limited to, Tetrahydrocannabinol (THC), tetrahydrocannabinolic acid (THCA), cannabidiol (CBD), cannabidiolic acid (CBDA), cannabinol (CBN), cannabigerol (CBG), cannabichromene (CBC), cannabicyclol (CBL), cannabivarin (CBV), tetrahydrocannabivarin (THCV), cannabidivarin (CBDV), cannabichromevarin (CBCV), cannabigerovarin (CBGV), cannabigerol monomethyl ether (CBGM), cannabielsoin (CBE), cannabicitran (CBT).

 

These regulations came into effect on January 1, 2021, and all “cannabinoid hemp processors” and “cannabinoid hemp retailers” operating within the state of New York must be licensed by the NYDPH. The regulations expressly allow for food and beverages to contain “cannabinoids”, so long as such products meet certain requirements. To this end, the Company has submitted its license application with the NYDPH in compliance with this legislation. These regulations are evolving and the NYDPH recently issued a set of regulations to address the use of industrial hemp derived Δ8- Tetrahydrocannabinol (Δ8 THC) and Δ10- Tetrahydrocannabinol (Δ10 THC) in cannabinoid hemp products manufactured and sold in New York.

 

The product requirements under the current regulations, include but are not limited to: the product must not contain more than 0.3% total Δ9- Tetrahydrocannabinol concentration; the product must not contain tobacco or alcohol; the product must not be in the form of an injectable, transdermal patch, inhaler, suppository, flower product including cigarette, cigar or pre-roll, or any other disallowed form as determined by the NYDPH; if the product is sold as a food or beverage product, it must not have more than 25mg of cannabinoids per product; and, if sold as an inhalable cannabinoid hemp product, the product will be subject to a number of additional safety measures.

 

Furthermore, all cannabinoid products sold at retail are subject to a series of labeling requirements. All such products must be labeled with the amount of cannabinoids in the product and the amount of milligrams per serving. If the product contains THC, the amount of THC in the product needs to be stated on the label in milligrams on a per serving and per package basis. In addition, all products are required to have a scannable bar code or QR code which links to a certificate of analysis and the packaging is prohibited from being attractive to consumers under 18 years of age. Products are also required to list appropriate warnings for consumer awareness. The Company’s entire product line will comply with the above standards.

 

See our Risk Factors and going concern opinion in this report for more information about these items, as well as certain related disclosures included our Results of Operations under the heading “Going Concern”.

 

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding, success in developing and marketing its products and the level of competition and potential regulatory enforcement actions. These risks and others are described in greater detail in the Risk Factors set forth in this periodic report and our annual reports that we have filed and will also file in the future.

 

F- 13
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

OTHER BUSINESS ITEMS

 

Nausea Derived from Active Chemotherapy Treatment

 

The Company announced that it has progressed development efforts on its ongoing Pharmaceutical development project to deliver an Rx product (TAU 413) to treat Nausea Derived from Active Chemotherapy Treatment. The Company plans to perform in vitro studies with TAU 413 during the next quarter. In vivo testing and product formulation development will follow. If these efforts are successful, and funding is secured, the company intends to submit an IND during the 2022.

 

Strategic Marketing and Consulting Agreement with Mayer & Associates

 

On June 14, 2021, the Company entered into a 12-month Strategic Marketing and Consulting Agreement with Mayer & Associates. Under this agreement the Company paid $150,000 as well as the issuance of 3,500,000 shares of restricted common shares of Company stock. Half of the cash payment ($75,000) was paid upon execution of this agreement and the other half was paid approximately 90 days thereafter. Upon execution, the Company issued 2,200,000 of the above-mentioned shares. The remaining 1,300,000 above-mentioned shares were issued approximately 90 days after this contract was executed. Mayer and Associates will provide the Company with opportunities relating to the world of professional sports, with respect to its products and product lines. This includes, but is not limited to, introductions to professional sports leagues, celebrity (professional athletes) influencers/brand ambassadors/brand liaison(s), research and development opportunities, hosting of small periodic events for the Company and a diversified group of high-profile contacts and relationships, use social media exposure, podcasts backing of various elements from professional sports as well as assist the Company in advising of potential merger partners and developing corporate partnering relationships. The Company, at the sole discretion of its board, may pay an additional payment of $75,000 as permitted under this agreement based on performance. This additional payment will be recorded as a contingent liability on the Company condensed consolidated balance sheet until formally authorized by the Company’s board of directors. This agreement is terminable after six months. As of the date of this quarterly report date, the aforementioned shares have been issued.

 

GOING CONCERN

 

During the fourth quarter of the year ended March 31, 2019, the Company began sales and marketing efforts for its Mint flavored Tauri-GumTM product. During the year ended March 31, 2021, the Company recognized net sales of $285,319 and a gross profit of $122,692. During the six months ended September 30, 2021, the Company recognized net sales of $140,713 and a gross profit of $66,286. At September 30, 2021, the Company had a working capital surplus of $6,074 compared to $1,229,211 for the year ended March 31, 2021. The current lower surplus is largely resultant from increased debt levels. Although the Company has a working capital surplus, there is no guarantee that this will continue therefore it still believes that there is uncertainty with respect to continuing as a going concern.

 

On July 1, 2019, months after the NYC Department of Heath announced a ban on cannabidiol in foods and beverages (mainly focused on restaurants and baked goods), the result of which was that the updated New York City Health Code now includes an embargoing of CBD-infused Edible(s) Products (including packaged products). The Company is hopeful that due to the recent regulatory regime for cannabinoid products implemented by the NYDPH, the New York City Council will remove the current CBD ban and implement regulations surrounding CBD products in a logical and prompt manner. The Company believes it is well positioned under the current regulatory structure, and has taken a conservative approach towards its products, including, for example, ensuring that its product manufacturer periodically tests for compliance with the Agricultural Improvement Act of 2018, such as utilizing CBD oils from hemp plants which contain 0.3% or less THC content. Subsequent to the balance sheet date, the State of New York has determined that it is allowable to sell CBD Infused Edible products in the forms of both food and drink (inclusive of chewing gum). It was also determined that no time can CBD be sold in products that contain either alcohol or tobacco. Additionally, the State of New York also said that NO CBD product may be sold if it contains more than 0.3% (1/333rd by Composition) THC. No Individual food or beverage product may contain more than 25mg of Hemp-Extracted Cannabinoids (“CBD” or “CBG”) per serving. Food and drink infused with CBD and Other Hemp Extracts must be packaged by the manufacturer and extracts cannot be added at the retail level. The Company’s entire product line will comply with these standards.

 

The Company, in the short term, intends to continue funding its operations either through cash-on-hand or through financing alternatives. Management’s plans with respect to this include raising capital through equity markets to fund future operations as well as the possible sale of its remaining marketable securities which had a market value of $1,035,511 at September 30, 2021. In the event the Company cannot raise additional capital to fund and/or expand operations or fails to raise adequate capital and generate adequate sales revenue, or if the regulatory landscape were to become more difficult or result in regulatory enforcement, it could result in the Company having to curtail or cease operations.

 

F- 14
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

 

GOING CONCERN (CONTINUED)

 

Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues in the short term, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations to achieve profitability thereby eliminating its reliance on alternative sources of funding. Although management believes that the Company continues to strengthen its financial position over time, there is still no guarantee that profitable operations with sufficient cashflow to sustain operations can or will be achieved without the need of alternative financing, which is limited. These matters still raise significant doubt about the Company’s ability to continue as a going concern as determined by management. The Company believes that there is uncertainty with respect to continuing as a going concern until the operating business can achieve sufficient sales to maintain profitable operations and sustain cash flow to operate the Company for a period of twelve months. In the event the Company does need to raise additional capital to fund operations or engage in a transaction, failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations.

 

Even if the Company does raise sufficient capital to support its operating expenses, acquire new license agreements or ownership interests in life science companies and generate adequate revenues, or the agreements entered into recently are successful, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern as determined by management. However, the accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

These condensed consolidated financial statements include the accounts and activities of Tauriga Sciences, Inc., its wholly-owned Canadian subsidiary, its wholly-owned subsidiary Tauriga Pharma Corp. (f/k/a Tauriga Biz Dev Corp – or “Tauriga BDC” and referenced herein as Tauriga BDC for contextual purposes only in describing the Blink contractual arrangement), NFTauriga Corp. and Tauriga Sciences Limited. All intercompany transactions have been eliminated in consolidation. As of September 30, 2021, there is no activity in any of the Company’s subsidiaries other than Tauriga Pharma Corp.

 

SEGMENT INFORMATION

 

The Company has adopted provisions of ASC 280-10 Segment Reporting for the three and six months ended September 30, 2021 and 2020. This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions. The Company and its Chief Operating Decision Makers determined that the Company’s operations consist of two segments: (i) The first division consists of all retail, wholesale and e-commerce product sales of CBD/CBG Tauri-GumTM, Tauri-GummiesTM, and other CBD/CBG products, and (ii) the second segment will be a research and development division that consist of liabilities and results from any activity relative to the progress in the development of the Company’s FDA IND application for Phase II Trial of its proposed pharmaceutical grade version of Tauri-Gum™. The cost basis investment in Aegea has been treated as a non-operating asset and will therefore not be reported as a part of the research and development division.

 

F- 15
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

SEGMENT INFORMATION (CONTINUED)

 

Results for the three and six months ended September 30,

 

 SCHEDULE OF SEGMENT INFORMATION

    Three months ended September 30,     Six months ended September 30,  
    2021     2020     2021     2020  
Revenue, net:                                
Tauri-gum   $ 107,346     $ 75,360     $ 140,713     $ 140,164  
Pharma     -       -       -       -  
Adjustments, eliminations and unallocated items     -       -       -       -  
Total revenue, net     107,346       75,360       140,713     $ 140,164  
                                 
Cost of Sales                             -  
Tauri-gum     (59,224 )     (60,032 )     (74,427 )     (87,063 )
Pharma     -       -       -       -  
Adjustments, eliminations and unallocated items     -       -       -       -  
Total cost of sales   $ (59,224 )   $ (60,032 )   $ (74,427 )   $ (87,063 )
                                 
General and Administrative expense                                
Tauri-gum   $ 133,274     $ 31,812     $ 576,970       106,600  
Pharma     (21,464 )     -       12,840       -  
Adjustments, eliminations and unallocated items     706,000       288,434       1,070,808       798,119  
Total General and Administrative expense   $ 817,810     $ 320,246     $ 1,660,618     $ 904,719  
      -       -       -          
Research and development                                
Tauri-gum   $ 14,597     $ 25,488     $ 28,036     $ 27,305  
Pharma     80,027       -       80,027       -  
Adjustments, eliminations and unallocated items     -       -       -       -  
Total Research and Development   $ 94,624     $ 25,488     $ 108,063     $ 27,305  
              -                  
Marketing and fulfillment expense                                
Tauri-gum   $ 330,516     $ 58,536     $ 467,253     $ 113,852  
Pharma     -       -       -       -  
Adjustments, eliminations and unallocated items     -       -       -       -  
Total Marketing and fulfillment expense   $ 330,516     $ 58,536     $ 467,253     $ 113,852  
              -                  
Depreciation expense                                
Tauri-gum   $ 1,326     $ 216     $ 2,571     $ 435  
Pharma     -       -       -       -  
Adjustments, eliminations and unallocated items     -       -       -       -  
Total depreciation expense   $ 1,326     $ 216     $ 2,571     $ 435  
                                 
Operating Loss                                
Tauri-gum   $ (431,591 )   $ (84,024 )   $ (1,008,544 )   $ (195,091 )
Pharma     (58,563 )     -       (92,867 )     -  
Adjustments, eliminations and unallocated items     (706,000 )     (308,884 )     (1,070,808 )     (798,119 )
Total operating loss   $ (1,196,154 )   $ (389,158 )   $ (2,172,219 )   $ (993,210 )

 

F- 16
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

REVENUE RECOGNITION

 

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principle of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective October 1, 2017, using the full retrospective method. The new standard did not have a material impact on its financial position and results of operations, as it did not change the manner or timing of recognizing revenue.

 

Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.

 

On March 29, 2018 the Company, through Tauriga BDC, entered into an independent sales representative agreement with Blink to be a non-exclusive independent sales representative. Under the agreement with Blink, the Company may solicit orders from potential customers for EV charging station placement. On June 29, 2018, the Company purchased four Blink Level 2 - 40” pedestal chargers for permanent placement in a retail location or locations whereby the Company will pay a variable annual fee based on 7% of total revenue per charging unit. The remainder of the proceeds will be split 80/20 between the Company and the host location owner or its assignee. The host location owner will pay for the cost of providing power to these unit as well as installation costs. As of September 30, 2021, we have not installed any of these machines in any locations, and no revenue has been generated through the Blink contract. The Company has decided to abandon this business line, and therefore, we have reclassified these assets as held for sale.

 

The Company recognizes revenue upon the satisfaction of the performance obligation. The Company considers the performance obligation met upon shipment of the product or delivery of the product. For ecommerce orders, the Company’s products are shipped by a fulfillment company and payment is made in advance of shipment either through credit card or PayPal. The Company also delivers the product to its customers that they market to in the metropolitan New York Tri-State area that are not covered under any existing distribution agreements. The Company generally collects payment within 30 to 60 days of completion of its performance obligation, and the Company has no agency relationships. The Company recognized net revenue from operations in the amount of $140,713 during the six months ended September 30, 2021 and $285,319 during the year ended March 31, 2021. All revenue is from the sale of the Company’s Tauri-GumTM product line and there were trade receivables, net of allowance for doubtful accounts in the amount of $4,404 outstanding for these sales, as of September 30, 2021.

 

ALLOWANCE FOR DOUBTFUL ACCOUNTS

 

The Company maintains an allowance for doubtful accounts, which includes sales returns, sales allowances and bad debts. The allowance adjusts the carrying value of trade receivables for the estimate of accounts that will ultimately not be collected. An allowance for doubtful accounts is generally established as trade receivables age beyond their due dates, whether as bad debts or as sales returns and allowances. As past due balances age, higher valuation allowances are established, thereby lowering the net carrying value of receivables. The amount of valuation allowance established for each past-due period reflects the Company’s historical collections experience, including that related to sales returns and allowances, as well as current economic conditions and trends. The Company also qualitatively establishes valuation allowances for specific problem accounts and bankruptcies, and other accounts that the Company deems relevant for specifically identified allowances. The amounts ultimately collected on past-due trade receivables are subject to numerous factors including general economic conditions, the financial condition of individual customers and the terms of reorganization for accounts exiting bankruptcy. Changes in these conditions impact the Company’s collection experience and may result in the recognition of higher or lower valuation allowances. At September 30, 2021, the Company has established an allowance for doubtful accounts in the amount of $99,401.

 

F- 17
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

SALES REFUNDS

 

The Company’s refund policy allows customers to return product for any reason except where the customer does not like the taste of the product. The customer has 30 days from the date of purchase to initiate the process. Returns are limited to one return or exchange per customer. Only purchases up to $100 qualify for a refund. Approved return/refund requests are typically processed within 1-2 business days. For product purchases made through a Tauri-GumTM distributor or retailer, the customer is required to work with original purchase location for any return or exchange. The Company has not established a reserve for returns as of September 30, 2021 however will monitor the refunds to estimate whether a reserve will be required.

 

USE OF ESTIMATES

 

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 

CASH EQUIVALENTS

 

For purposes of reporting cash flows, cash equivalents include investment instruments purchased with an original maturity of three months or less. At September 30, 2021, the Company’s cash on deposit with financial institutions did not exceed the total FDIC insurance limit of $250,000. At September 30, 2021 and March 31, 2021, the Company had a cash balance of $28,698 and $49,826, respectively. The Company’s does not expect, in the near term, for its cash balance to exceed the total FDIC insurance limit of $250,000 for other than very short periods of time where the Company would use such cash in excess of insurance in the very short-term in operating activities. To reduce its risk associated with the failure of such financial institution, the Company holds its cash deposits in more than one financial institution and evaluates at least annually the rating of the financial institution in which it holds its deposits. The Company had no cash equivalents as of September 30, 2021 and March 31, 2021.

 

INVESTMENT IN TRADING SECURITIES

 

Investment in trading securities consist of investments in shares of common stock of companies traded on public markets as well as publicly traded warrants of these companies should there be a market for them. These securities are carried on the Company’s balance sheet at fair value based on the closing price of the shares owned on the last trading day before the balance sheet date of this report. Fluctuations in the underlying bid price of the stocks result in unrealized gains or losses. The Company recognizes these fluctuations in value as other income or loss. For investments sold, the Company recognizes the gains and losses attributable to these investments as realized gains or losses in other income or loss.

 

INVESTMENT – COST METHOD

 

Investment in other companies that are not currently trading, are valued based on the cost method as the Company holds less than 20% ownership in these companies and has no influence over operational and financial decisions of the companies. The Company will evaluate, at least annually, whether impairment of these investments is necessary under ASC 320. During the year ended March 31, 2021, the Company has recorded a loss on the impairment on two of its cost method investments in the amount of $24,406. The Company did not record a loss on the impairment on investments for the six months ended September 30, 2021.

 

INVENTORY

 

Inventory consists of finished goods in salable condition stated at the lower of cost or market determined by the first-in, first-out method. The inventory consists of packaged and labeled salable inventory. Shipping of product to finished good inventory fulfilment center is also included in the total inventory cost. Shipping of product upon sale for e-commerce sales is paid by the customer upon ordering for orders of single packs of Tauri-GumTM. For multiple pack or wholesale product orders shipping cost is paid by the Company. As of September 30, 2021, the Company’s inventory on hand had a value of $379,989 compared to $201,372 at March 31, 2021. As of September 30, 2021, the Company wrote down all CBD infused chewing gum to a value of zero. During the six months ended September 30, 2021, the Company recorded a one-time charge of $123,826 as a write down of 10mg CBD infused chewing gum inventory. The Company does not intend or expect to sell this inventory and will use as marketing samples and other promotions.

 

F- 18
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

SHIPPING AND HANDLING COSTS

 

The Company’s fulfillment handling costs are provided by independent contractors through fixed fee arrangements which may also include incentives. These fees also contain a large degree of consultative, administrative and warehousing services as part of the fixed fee. Management believes that due to these factors it is more representative to include these amounts as general and administrative costs instead of cost of goods sold. For the three and six months ended September 30, 2021 the Company incurred fulfillment costs in the amount of $20,059 and $60,517, respectively compared to $16,700 and $38,950 for the same periods in the prior year.

 

Shipping cost for the Company consists of product movement to and from trade shows, between office locations, mailing of samples and product shipments. The cost of shipping is typically not charged to the customer when they order more than one product from on the website. Customer shipping of large customers wholesale orders are done on a reimbursement basis therefore any shipping revenue and shipping expense are largely recorded as offsetting gross revenues and cost of goods sold.

 

The Company had net shipping expense:

 

 SCHEDULE OF SHIPPING EXPENSE

    2021     2020     2021     2020  
    Three Months Ended September 30,     Six Months Ended September 30,  
    2021     2020     2021     2020  
Shipping revenue   $ 1,728     $ 1,054     $ 2,738     $ 752  
Shipping expense     (8,171 )     (5,483 )     (11,783 )     (12,030 )
Net shipping expense   $ (6,443 )   $ (4,429 )   $ (9,045 )   $ (11,278 )

 

Property and equipment are stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations.

 

NET LOSS PER COMMON SHARE

 

The Company computes per share amounts in accordance with FASB ASC Topic 260 “Earnings per Share” (“EPS”), which requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods; however, potential common shares are excluded for period in which the Company incurs losses, as their effect is anti-dilutive. For the three and six months ended September 30, 2021 and 2020, basic and fully diluted earnings per share were the same as the Company had losses in this period.

 

STOCK-BASED COMPENSATION

 

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation-Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

 

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted on the grant date as either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and an offset to additional paid-in capital in stockholders’ equity over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

 

F- 19
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value on the grant date of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services over the term of the related services.

 

IMPAIRMENT OF LONG-LIVED ASSETS

 

Long-lived assets, primarily fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company will perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company would recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

 

RESEARCH AND DEVELOPMENT

 

The Company expenses research and development costs as incurred. Research and development costs were $96,624 and $25,063 for the three and six months ended September 30, 2021, respectively compared to $25,488 and $27,305. The Company is continually evaluating products and technologies, and incurs expenses relative to these evaluations, including in the natural wellness space, such as Tauri-Gum™ product development of new flavor formulations and other CBD delivery products, as well as development of a Cannabigerol (“CBG”) Isolate Infused version of its Tauri-Gum™ brand. We also incur expenses relative to collaboration agreements and any activity relative to the progress in the development of the Company’s FDA IND application for Phase II Trial of its proposed pharmaceutical grade version of Tauri-Gum™, as well as intellectual property or other related technologies. As the Company investigates and develops relationships in these areas, resultant expenses for trademark filings, license agreements, website and product development and design materials will be expensed as research and development. Some costs will be accumulated for subsidiaries prior to formation of any new entities.

 

FAIR VALUE MEASUREMENTS

 

ASC 820 “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements.

 

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

 

Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);

 

Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

 

Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

 

Financial instruments classified as Level 1 – quoted prices in active markets include cash.

 

These condensed consolidated financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

 

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, investments, short-term notes payable, accounts payable and accrued expenses.

 

F- 20
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

RECLASSIFICATIONS

 

Certain prior year amounts have been reclassified to conform to the current period presentation. The reclassifications had no effect on the net loss or cash flows of the Company.

 

SHARE SETTLED DEBT

 

The general measurement guidance in ASC 480 requires obligations that can be settled in shares with a fixed monetary value at settlement to be carried at fair value unless other accounting guidance specifies another measurement attribute. The Company has determined that ASC 835-30 is the appropriate accounting guidance for the share-settled debt, which is what was done by setting up the debt discount which is to be amortized to interest expense over the term of the instrument. Amortization of discounts are to be amortized using the effective interest method over the term of the note.

 

ASC 480-10-25-14 requires liability accounting for (1) any financial instrument that embodies and unconditional obligation to transfer a variable number of shares or (2) a financial instrument other than an outstanding share that embodies a conditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on any of the following: 1. A fixed monetary amount known at inception (e.g. stock settled debt); 2. Variations in something other than the fair value of the issuer’s equity shares (e.g. a preferred share that will be settled in a variable number of common shares with tits monetary value tied to a commodity price); and 3. Variations in the fair value of the issuer’s equity shares, but the monetary value to the counterparty moves inversely to the value of the issuer’s shares (e.g. net share settled written put options, net share settled forward purchase contracts).

 

Notwithstanding the fact that the above instruments can be settled in shares, FASB concluded that equity classification is not appropriate because instruments with those characteristics do not expose the counterparty to risks and rewards similar to those of an owner and, therefore do not create a shareholder relationship. The issuer is instead using its shares as the currency to settle its obligation.

 

INCOME TAXES

 

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases.

 

Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized, or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

 

ASC 740 “Income Taxes” clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

 

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company does not meet the more-likely-than-not threshold as of September 30, 2021.

 

F- 21
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

RECENT ACCOUNTING PRONOUNCEMENTS

 

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contract’s in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU simplifies the diluted net income per share calculation in certain areas. The ASU is effective for annual and interim periods beginning after December 31, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements.

 

In June 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” which addresses accounting for issuance of all share-based payments on the same accounting model. Previously, accounting for share-based payments to employees was covered by ASC Topic 718 while accounting for such payments to non-employees was covered by ASC Subtopic 505-50. As it considered recently issued updates to ASC 718, the FASB, as part of its simplification initiatives, decided to replace ASC Subtopic 505-50 with Topic 718 as the guidance for non-employee share based awards. Under this new guidance, both sets of awards, for employees and non-employees, will essentially follow the same model, with small variations related to determining the term assumption when valuing a non-employee award as well as a different expense attribution model for non-employee awards as opposed to employee awards. The ASU is effective for public business entities beginning in 2019 calendar years and one year later for non-public business entities. The Company has determined that there is not a material impact on their condensed consolidated financial position and results of operations as a result of this standard.

 

In February 2016, FASB issued ASU 2016-02, “Leases (Topic 842).” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and is applied retrospectively. The Company has adopted this standard as of April 1, 2019 (See Note 7).

 

There are several other new accounting pronouncements issued or proposed by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial position or operating results.

 

SUBSEQUENT EVENTS

 

In accordance with ASC 855 “Subsequent Events” the Company evaluated subsequent events after the balance sheet date through the date of issuance of this report.

 

F- 22
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 3 - REVENUE

 

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which the Company adopted simultaneous with the commencement of sales in March 2019. No cumulative adjustment to accumulated deficit was done, and the adoption did not have an impact on our condensed consolidated financial statements, as no material arrangements prior to the adoption were impacted by the new pronouncement.

 

The following table disaggregates the Company’s net revenue by sales channel for the three and six months ended September 30:

 

 SCHEDULE OF DISAGGREGATION REVENUE

    For the three months ended September 30,     For the six months ended September 30,  
    2021     2020     2021     2020  
Revenue:                                
Distributor   $ -     $ -     $ -     $ -  
E-Commerce     65,205       36,395       98,462       96,489  
Wholesale     42,141       38,965       42,251       43,675  
    $ 107,346     $ 75,360     $ 140,713     $ 140,164  

 

Revenues from the Company’s E-Commerce channel represented 70.0% of total net sales for the three and six months ended September 30, 2021 compared to 68.8% for the prior year. As of September 30, 2021, the Company’s had an allowance for doubtful account collectability in the amount of $99,401 which was wholly attributable to the Wholesale channel. There were no significant contract asset or contract liability balances for periods presented. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Collections of the amounts billed are typically paid by the customers within 30 to 60 days.

 

NOTE 4– INVENTORY

 

The following chart is the inventory value by product as of:

 

 SCHEDULE OF INVENTORY

    September 30, 2021     March 31, 2020  
CBD/CBG Tauri-GumTM   $ 322,213     $ 173,207  
Tauri-GummiesTM     7,817       13,973  
Other (1)     49,959       14,192  
Total Inventory   $ 379,989     $ 201,372  

 

  (1) Other inventory consists of holiday pouches sold as a bundled of Tauri-GumTM, chocolate coins, dog treats, other CBD products, bath bombs, honey, mints and skin care.

 

At September 30, 2021, there were $43,476 of prepayments on deposit with manufactures of Company products.

 

NOTE 5– PROPERTY AND EQUIPMENT

 

The Company’s property and equipment is as follows:

 

 SCHEDULE OF PROPERTY AND EQUIPMENT

    September 30, 2021     March 31, 2021     Estimated Life
Computers, office furniture and other equipment   $ 15,651     $ 13,705     3-5 years
Less: accumulated depreciation     (3,589 )     (1,642 )    
                     
Net   $ 12,062       12,063      

 

During the year ended March 31, 2021, the Company purchased office furniture in the amount of $8,722 for its new company headquarters in Wappingers Falls, New York. The furniture will be depreciated over 60 months commencing upon occupation of its new Company headquarters on January 6, 2021.

 

During the six months ended September 30, 2021, the Company purchased computer equipment in the amount of $1,945. This equipment will be depreciated of 36 months.

 

F- 23
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 5– PROPERTY AND EQUIPMENT (CONTINUED)

 

On June 29, 2018, the Company purchased four Blink Level 2 – 40” pedestal chargers for permanent placement in one or more retail locations whereby the Company would share revenue from these electric car vehicles charging units with such location owner. No depreciation expense has been recorded for the charging units as of September 30, 2021 due to the fact that they have not been placed in service. As of April 1, 2020, these charging units were reclassified as assets held for resale.

 

Depreciation expense for the six months ended September 30, 2021 was $932 and $1,946, respectively compared to $218 and $435 for the same periods in the prior year.

 

NOTE 6 –LEASEHOLD IMPROVEMENTS

 

Associated with the Company’s January 6, 2021, relocation of its headquarters to Wappingers Falls the Company implemented certain leasehold improvements including signage and a sales display buildout at a total cost of $5,000. The Company has entered a two-year lease with a two-year extension option. The Company expects that it will exercise these two extension options and has chosen to amortize these leasehold improvements over 48 months.

 SCHEDULE OF LEASEHOLD IMPROVEMENTS

 

    September 30, 2021     March 31, 2021     Expected Usage
Wappingers Falls office signage and sales display   $ 5,000     $ 5,000     48 months
Less: amortization     (937 )     (313 )    
                     
Net   $ 4,063       4,687      

 

NOTE 7 – OPERATING LEASE

 

The Company has adopted ASU No. 2016-02, Leases (Topic 842), as of April 1, 2019 and will account for new leases in terms of the right of use assets and offsetting lease liability obligations for this new lease under this pronouncement. In accordance with ASC 842 – Leases, effective January 6, 2021, the Company recorded a net lease right of use asset and a lease liability at present value of approximately $67,938. The Company recorded these amounts at present value, in accordance with the standard, using a discount rate of 8.32% which is representative of the average borrowing rates for outstanding notes issued to non-related parties at the time of the entrance into the lease. The right of use asset is composed of the sum of all lease payments, at present value, and is amortized over the life of the expected lease term. For the expected term of the lease the Company used the initial term of the two-year lease. Upon the election by the Company to extend the lease for additional years, that election will be treated as a lease modification and the lease will be reviewed for remeasurement. This lease will be treated as an operating lease under the new standard.

 

Wappingers Falls, New York – Corporate headquarters

 

Effective January 6, 2021, the Company moved its corporate headquarters to 4 Nancy Court, Suite 4, Wappingers Falls, New York 12590. The Company’s telephone number remains the same, phone: 917-796-9926. The Company entered into a two-year lease, expiring January 31, 2023. Tenant will pay $19,200 annually ($1,600 per month) during the term of the lease. The Company paid $1,600 as a security deposit as part of this lease. The Company has the option to one two-year extension. The Company expects it will exercise this option. Tenant will pay $21,000 annually ($1,750 per month) during the option term.

 

For the three and six months ended September 30, 2021 and 2020, the Company recorded lease expense of $5,025 and $10,050, respectively compared to $3,542 and $6,999 for the same period in the prior year. As of September 30, 2021, the value of the unamortized lease right of use asset is $56,797. As of September 30, 2021, the Company’s lease liability was $57,472.

 

The following chart shows the Company’s operating lease cost for the three and six months ended September 30, 2021 and 2020:

 

 SCHEDULE OF OPERATING LEASE COST

    2021     2020     2021     2020  
    For the three months ended September 30,     For the six months ended September 30,  
    2021     2020     2021     2020  
Amortization of right of lease asset   $ 3,791     $ 3,082     $ 7,504     $ 6,999  
Lease interest cost     1,234       376       2,546       1,057  
Total Lease cost   $ 5,025     $ 3,458     $ 10,050     $ 8,056  

 

F- 24
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 7 – OPERATING LEASE (CONTINUED)

 

Maturity of Operating Lease Liability for fiscal year ended March 31,

 

 SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITY

       
2022   $ 7,372  
2023     16,201  
2024     18,990  
2025     14,909  
Total lease payments   $ 57,472  

 

 SCHEDULE OF RIGHT OF USE ASSET AND OPERATING LEASE LIABILITY

    September 30, 2021     March 31, 2021  
Right of Use (ROU) asset   $ 56,797     $ 64,301  

 

    September 30, 2021     March 31, 2021  
Operating lease liability:                
Current   $ 15,075     $ 14,426  
Non-Current     42,398       50,100  
Total   $ 57,472     $ 64,526  

 

NOTE 8 – NOTES PAYABLE AND CONVERTIBLE NOTES

 

      September 30, 2021     March 31, 2021  
Jefferson Street Capital LLC (Oct-20) (a)   $ -     $ 135,000  
SE Holdings, LLC (Nov-20) (b)     -       110,000  
GS Capital Holdings, LLC (Mar-21) (c)     273,000       273,000  
GS Capital Holdings, LLC (Apr-21) (d)     313,000       -  
SE Holdings, LLC (Aug-21) (e)     115,500       -  
Jefferson Street Capital LLC (Sep-21) (f)     135,000       -  
GS Capital Holdings, LLC (Aug-21) (g)     105,000       -  
Tangiers Global, LLC (Apr-21) (h)     525,000       -  
Total notes payable and convertible notes     $ 1,466,500     $ 518,000  
Less note discounts       (88,597 )     (13,181 )
Less current portion of these notes       (1,382,903 )     (504,819 )
Total notes payable and convertible, net discounts     $ -     $ -  

 

F- 25
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 8 – NOTES PAYABLE AND CONVERTIBLE NOTES (CONTINUED)

 

  (a) On October 5, 2020, the Company entered into (i) an Inventory Financing Promissory Note in the aggregate principal amount of $135,000 with Jefferson Street Capital LLC, and (ii) a Securities Purchase Agreement. The note has a maturity date of October 5, 2021, carries $10,000 original issue discount (and a $3,000 due diligence fee paid to Moody Capital Solutions, Inc., the placement agent on behalf of Jefferson Street), and carries interest on the unpaid principal balance hereof at the rate of ten percent (10%) per annum beginning on the issuance date of October 5, 2020. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid or converted in accordance with the terms of the note. The repayment of this note shall be in seven equal cash monthly installments beginning on April 5, 2021 and ending on October 5, 2021, for an aggregate amount of $148,500 (assuming no defaults). This note may not be converted by noteholder into shares of our Common Stock unless we default in our monthly repayment obligation pursuant to the cash repayment schedule noted above. In the event of a default of the note, noteholder shall have the right to convert all or any part of the outstanding and unpaid amounts into fully paid and non-assessable shares of Common Stock; provided, however, that in no event shall the holder be entitled to convert any portion of the note in excess of that portion of the note upon the conversion of which would result in beneficial ownership by noteholder and its affiliates of more than 4.99% of the outstanding shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder. The beneficial ownership limitations noted above may not be waived by noteholder. The conversion price shall equal (subject to customary adjustments for stock splits, stock dividends or rights offerings, recapitalization, reclassifications, extraordinary distributions and similar events) 75% multiplied by the market price, which is defined to mean the lowest one-day volume weighted average price of our Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. The note contains a number of default or penalty provisions, including, but not limited to, the following: (a) at any time after October 5, 2020, if in the case that the Company’s Common Stock is not deliverable by DWAC for any reason, an additional 10% discount will apply for all future conversions under all notes. If in the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under the Note while the “chill” is in effect; (ii) if both the events noted in (i) above were to occur, an additional cumulative 25% discount shall apply; (iii) if the Company ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the issuance date, an additional 15% discount will be attributed to the conversion price; if the Company ceases to be a reporting company under the 1934 Act, (iv) if, at any time the Borrower does not maintain the Share Reserve (defined below); (v) the Company fails to pay the principal or interest under the Note when due under the terms thereof (including the five (5) calendar day cure period); (vi) a cross-default by the Company of another of its outstanding notes; or (vii) the completion of a reverse stock split while this Note is outstanding (and without consent). Subject to certain exempt issuances by the Company, during the period where any portion of the Note remains outstanding to Jefferson Street, if the Company engages in any future financing transactions with a third party investor, the Company will provide Jefferson Street with written notice thereof promptly but in no event less than 10 days prior to closing any financing transactions, and if applicable, the Company shall adjust the terms of the note to such more favorable terms of a subsequent financing, if any. In connection with the note, the Company issued irrevocable transfer agent instructions reserving 21,000,000 shares of the Company’s Common Stock (“Share Reserve”) for the amount then outstanding. On October 22, 2020, the Company issued to Jefferson Street 1,250,000 shares of its restricted common stock as debt commitment shares valued at $40,000 ($0.032 per share). Upon full conversion or repayment of this note, any shares remaining in such share reserve shall be cancelled and placed back into the treasury of the Company and available for issuance at a future date. As of September 30, 2021, all scheduled payments have been made under this note.

 

F- 26
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 8 – NOTES PAYABLE AND CONVERTIBLE NOTES (CONTINUED)

 

  (b) On November 18, 2020, we consummated an inventory financing transaction and entered into (i) a Promissory Note in the aggregate principal amount of $110,000 with SE Holdings, LLC, a Nevada limited liability company (“SE”), and (ii) a Securities Purchase Agreement (“SPA”). The note has a maturity date of September 11, 2021, and carried $10,000 original issue discount, and guaranteed interest of 12%. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty four percent per annum from the due date thereof until the same is paid or converted in accordance with the terms of the note. Principal payments shall be made in five (5) installments, each in the amount of US$22,500 commencing one the fifth monthly anniversary following the issue date and continuing thereafter each thirty (30) days for five (5) months (assuming no defaults or partial or complete conversions of our Common Stock as a form of repayment). This note may not be converted by SE into shares of our Common Stock unless we default in our monthly repayment obligation pursuant to the cash repayment schedule noted above. In the event of a default of the note, SE shall have the right to convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of Common Stock at the lowest market price for the preceding five trading days; provided, however, that in no event shall SE be entitled to convert any portion of the note in excess of that portion of the note upon the conversion of which would result in beneficial ownership by SE and its affiliates of more than 4.99% of the outstanding shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder. The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, right to proceeds from other financings, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA. At September 30, 2021 the Company has made all scheduled payments under this note.
     
  (c) On March 5, 2021, the Company entered into a Securities Purchase Agreement and a non-convertible redeemable note with GS Partners Capital, LLC. The $273,000 aggregate principal note has a maturity date of December 5, 2021 and carries $5,000 original issue discount with an interest rate of 6%. This note may be prepaid without penalty, provided that an event of default has not occurred. Upon an event of default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default and other such provisions, each as set forth in more detail in the note and SPA. At September 30, 2021, the note had accrued interest of $9,379 with the full principal balance due.
     
  (d) On April 30, 2021, the Company entered into a Securities Purchase Agreement and a non-convertible redeemable note with GS Capital Partners, LLC. The $313,000 aggregate principal note has a maturity date of June 1, 2022 and carries $23,000 Original Issue Discount with an interest rate of 8%. This note may be prepaid without penalty, provided that an event of default has not occurred. Upon an event of default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default and other such provisions, each as set forth in more detail in the note and SPA. At September 30, 2021, the note had accrued interest of $10,496 with the full principal balance due.
     
  (e) On August 6, 2021, the Company entered into a Security Purchase Agreement and Promissory Note in the amount of $115,500. This note bears a 12% interest rate with a maturity date of June 6, 2022. A lump-sum interest payment for ten (10) months shall be immediately due on the issue date and shall be added to the principal balance and payable on the maturity date or upon acceleration or by prepayment or otherwise, notwithstanding the number of days which the principal is outstanding. This note shall contain an original issue discount of $10,500 resulting in a purchase price of $105,000. Principal payments shall be made in five (5) installments each in the amount of $25,872 commencing one the fifth monthly anniversary following the issue date and continuing thereafter each thirty (30) days for five (5) months. The holder shall have the right from time to time, and at any time following an event of default, and ending on the date of payment of the default amount shall equal 100% multiplied by the lowest closing price for the common stock during the five-trading day period ending on the latest complete trading day prior to the conversion date. The Borrower is required at all times to have authorized and reserved four (4) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time). The Company has set up an initial reserve of 9,625,000 shares. The Company will also issue 1,000,000 commitment shares as additional consideration for the purchase of this note. These shares will be valued at $51,000 ($0.051 per share) based on the closing price of the Company’s stock on the day this note was entered into. The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, right to proceeds from other financings, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA. As of September 30, 2021, the note had accrued interest of $2,088 with full principal due under this note.

 

F- 27
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 8 – NOTES PAYABLE AND CONVERTIBLE NOTES (CONTINUED)

 

Convertible Notes

 

  (f) On September 20, 2021, the Company entered into (i) an Inventory Financing Promissory Note in the aggregate principal amount of $135,000 with Jefferson Street Capital LLC, and (ii) a Securities Purchase Agreement. The note has a maturity date of September 20, 2022, carries $10,000 original issue discount (and a $3,000 due diligence fee paid to Moody Capital Solutions, Inc., the placement agent on behalf of Jefferson Street), and carries interest on the unpaid principal balance hereof at the rate of ten percent (10%) per annum. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid or converted in accordance with the terms of the note. The repayment of this note shall be in seven equal cash monthly installments beginning on February 19, 2022 and ending on August 19, 2022, for an aggregate amount of $148,500 (assuming no defaults). This note may not be converted by noteholder into shares of our Common Stock unless we default in our monthly repayment obligation pursuant to the cash repayment schedule noted above. In the event of a default of the note, noteholder shall have the right to convert all or any part of the outstanding and unpaid amounts into fully paid and non-assessable shares of Common Stock; provided, however, that in no event shall the holder be entitled to convert any portion of the note in excess of that portion of the note upon the conversion of which would result in beneficial ownership by noteholder and its affiliates of more than 4.99% of the outstanding shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder. The beneficial ownership limitations noted above may not be waived by noteholder. The conversion price shall equal (subject to customary adjustments for stock splits, stock dividends or rights offerings, recapitalization, reclassifications, extraordinary distributions and similar events) 75% multiplied by the market price, which is defined to mean the lowest one-day volume weighted average price of our Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. The note contains a number of default or penalty provisions, including, but not limited to, the following: (a) at any time after September 20, 2021, if in the case that the Company’s Common Stock is not deliverable by DWAC for any reason, an additional 10% discount will apply for all future conversions under all notes. If in the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under the Note while the “chill” is in effect; (ii) if both the events noted in (i) above were to occur, an additional cumulative 25% discount shall apply; (iii) if the Company ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the issuance date, an additional 15% discount will be attributed to the conversion price; if the Company ceases to be a reporting company under the 1934 Act, (iv) if, at any time the Borrower does not maintain the Share Reserve (defined below); (v) the Company fails to pay the principal or interest under the Note when due under the terms thereof (including the five (5) calendar day cure period); (vi) a cross-default by the Company of another of its outstanding notes; or (vii) the completion of a reverse stock split while this Note is outstanding (and without consent). Subject to certain exempt issuances by the Company, during the period where any portion of the Note remains outstanding to Jefferson Street, if the Company engages in any future financing transactions with a third party investor, the Company will provide Jefferson Street with written notice thereof promptly but in no event less than 10 days prior to closing any financing transactions, and if applicable, the Company shall adjust the terms of the note to such more favorable terms of a subsequent financing, if any. In connection with the note, the Company issued irrevocable transfer agent instructions reserving 21,000,000 shares of the Company’s Common Stock (“Share Reserve”) for the amount then outstanding. The Company issued to Jefferson Street 1,250,000 shares of its restricted common stock as debt commitment shares valued at $56,000 ($0.0448 per share). Upon full conversion or repayment of this note, any shares remaining in such share reserve shall be cancelled and placed back into the treasury of the Company and available for issuance at a future date. As of September 30, 2021, this note had remaining unpaid principal of $135,000 and accrued interest of $370. As of this report date, the Company has not made any payments under this note.

 

F- 28
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 8 – NOTES PAYABLE AND CONVERTIBLE NOTES (CONTINUED)

 

Convertible Notes

 

  (g) On August 25, 2021, the Company entered into a Securities Purchase Agreement and a convertible redeemable note with GS Capital Partners, LLC. The $105,000 aggregate principal note has a maturity date of August 25, 2022 and carries $5,000 Original Issue Discount with an interest rate of 8%. During the first six months this Note is in effect, the Company may redeem this Note by paying to the Holder an amount as follows: (i) if the redemption is within the first 90 days this Note is in effect, then for an amount equal to 120% of the unpaid principal amount of this Note along with any interest that has accrued during that period, (ii) if the redemption is after the 91st day this Note is in effect, but less than the 180th day this Note is in effect, then for an amount equal to 133% of the unpaid principal amount of this Note along with any accrued interest. This Note may not be redeemed after 180 days. Upon an event of default, interest shall accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then at the highest rate of interest permitted by law. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default and other such provisions, each as set forth in more detail in the note and SPA. The Holder of this Note is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s common stock at a price (“Conversion Price”) for each share of Common Stock equal to 65% of the lowest daily VWAP 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 (“Exchange”), for the twenty prior trading days including the day upon which a Notice of Conversion is received by the Company or its transfer agent. The Company recognized a beneficial conversion feature on this note in the amount of $35,000 which was recorded as debt discount and will be amortized over the life of the note using the effective interest method. At September 30, 2021, the note had accrued interest of $828 with the full principal balance due.
     
  (h) On April 5, 2021, the Company effectuated a $525,000 six-month fixed convertible promissory note with Tangiers Global, LLC containing an original issue discount of $25,000. This note matures on October 5, 2021 and bears an interest rate of 8%, guaranteed. This note has a fixed conversion price of $0.075 per share. The Company recognized a beneficial conversion feature (“BCF”) on this note in the amount of $378,000. This BCF will be recognized as interest expense pro-rata over the life of the note. The Company may redeem the note by paying to Tangiers an amount as follows: (i) if within the first 90 days of the issuance date, then for an amount equal to 110% of the unpaid principal amount so paid of this Note along with any interest that has accrued during that period, and (ii) if after the 91st day, but by the 180th day of the issuance date, then for an amount equal to 120%. After 180 days from the effective date, the Company may not pay this note in cash, in whole or in part without prior written consent by Holder. The Company covenants that it will at all times reserve out of its authorized and unissued Common Stock the number of shares of Common Stock as shall be issuable upon the conversion of this note. Tangiers may not engage in any “shorting” or “hedging” transaction(s) in the Common Stock of the Company prior to conversion. The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, restrictions on note proceeds, maintain exchange and SEC requirements, delivery of shares, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA. If an Event of Default occurs, the outstanding Principal Amount of this Note owing in respect thereof through the date of acceleration, shall become, at the Tangiers’s election, immediately due and payable in cash at the “Mandatory Default Amount”. The Mandatory Default Amount means 20% of the outstanding Principal Amount of this Note will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, this Note shall accrue additional interest, at a rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. The Company issued 1,000,000 of its restricted common debt incentive shares having a value of $129,000 ($.0129/share). As of September 30, 2021, this note had accrued interest of $40,852. As of this report date, this note has not been repaid or fully converted and the Company is in discussions with the holder as how to settle this note. There is no declared or claimed Event of Default.

 

The Company did not issue any shares to noteholders to convert outstanding notes during the six months ended September 30, 2021.

 

During the year ended March 31, 2021, the Company issued 93,197,109 shares of common stock to holders of convertible notes to retire $1,588,926 in principal and $111,749 of accrued interest (at an average conversion price of $0.01825 per share) under the convertible notes.

 

Interest expense for the three and six months ended September 30, 2021 was $418,982 compared to $854,793, respectively compared to $292,788 and $612,410 during the prior year. Accrued interest at September 30, 2021 and March 31, 2021 was $60,728 and $14,722, respectively.

 

F- 29
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

 

COMMON STOCK

 

As of September 30, 2021, the Company was authorized to issue 400,000,000 shares of its common stock. As of September 30, 2021 and November 15, 2021 there were 290,421,214 and 299,908,214 shares, respectively of common stock issued and outstanding.

 

On September 19, 2021, the Company’s Board of Directors (“BOD”) approved an amendment to the Company’s Articles of Incorporation to increase the Company’s authorized common stock from 4,000,000,000 to 7,500,000,000 shares, which is subject to shareholder approval under applicable laws of the Florida Business Corporations Act. To obtain this shareholder approval, on October 12, 2021, the Company filed Schedule 14A with the Securities and Exchange Commission calling for a special meeting of the stockholders, which is scheduled to be held on November 22, 2021.

 

S-1 Registration Statement and Investment Agreement with Tangiers Global, LLC.

 

On March 5, 2020, the Company filed an S-1 Registration Statement pursuant to the January 21, 2020, Investment Agreement and Registration Rights Agreement entered into Tangiers in order to establish a source of funding for our operations. Under the Investment Agreement, Tangiers agreed to provide us with a maximum of up to $5,000,000 of funding during the period ending three years from the date of effectiveness of the S-1 Registration Statement, under which we registered a maximum of 76,000,000 million shares for sale under the terms of the Investment Agreement. We were, in our sole discretion, allowed to deliver a Put Notice to Tangiers under this facility. The Put Notice would specify the number of shares of common stock which we intended to sell to Tangiers on a closing date. The closing of a purchase by Tangiers of the shares specified by us in the Put Notice would occur on the date which is no earlier than five and no later than seven trading days following the date Tangiers receives the Put Notice. On the closing date we would sell to Tangiers the shares specified in the Put Notice, and Tangiers would pay us an amount equal to the Purchase Price multiplied by the number of shares specified in the Put Notice.

 

The S-1 Registration statement became effective March 16, 2020. As of March 31, 2021, the Company has initiated put notices to Tangiers for a total of 13,910,000 shares receiving net proceeds in the amount of $400,514.

 

On January 6, 2021, the Company’s board of directors voted unanimously determined to terminate this equity line of credit facility by terminating each of the Investment Agreement and Registration Rights Agreement, and on January 8, 2021 filed a Post-Effective Amendment to its Form S-1 Registration Statement (333-236923) removing from registration all shares of common stock not previously sold thereunder.

 

Fiscal Year 2021

 

During the year ended March 31, 2021, the Company issued 13,910,000 shares pursuant to put notices issued to Tangiers under the equity line of credit facility, with the Company receiving proceeds in the amount of $369,482 ($0.02614 to $0.03344 per share).

 

During the year ended March 31, 2021, the Company issued 93,197,109 shares of common stock to holders of convertible notes to retire $1,588,926 in principal and $111,749 of accrued interest (at an average conversion price of $0.01825 per share) under the convertible notes.

 

During the year ended March 31, 2021, the Company issued 7,687,500 shares for services rendered ($0.0306 to $0.050 per share).

 

During the year ended March 31, 2021, the Company issued 5,740,000 shares for debt commitments valued at $253,869 ($0.028 to $0.092 per share).

 

During the year ended March 31, 2021, the Company recognized $208,806 in beneficial conversion feature for convertible notes whereby the holder can exercise conversion rights at a discount to the market price.

 

During the year ended March 31, 2021, the Company issued 40,084,998 shares under stock purchase agreements in consideration for $1,587,214 ($0.024 to $0.09 per share) to accredited investors that are unrelated third parties.

 

During the year ended March 31, 2021, the Company issued 2,500,000 shares to two directors at a value of $0.092 per share.

 

F- 30
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

 

COMMON STOCK (CONTINUED)

 

Fiscal Year 2021 (Continued)

 

On July 10, 2020, the Company’s Chief Executive Officer purchased 700,000 shares of the Company’s Common Stock for an aggregate purchase price of $35,000, at $0.05 per share.

 

Pursuant to the April 3, 2020, collaboration agreement the Company entered into with Aegea Biotechnologies Inc. (“Aegea”) the Company issued to Aegea 5,000,000 unregistered common shares of Tauriga common stock. The shares were valued at $155,000 ($0.031 per share).

 

Fiscal Year 2022

 

During the six months ended September 30, 2021, the Company issued 4,000,000 shares under stock purchase agreements in consideration for $242,000 ($0.04 to $0.08 per share) to accredited investors that are unrelated third parties.

 

During the six months ended September 30, 2021, the Company issued 7,512,500 shares for services rendered ($0.0395 to $0.129 per share).

 

During the six months ended September 30, 2021, the Company issued 3,050,000 shares for debt commitments valued at $257,000 ($0.0448 to $0.0129 per share).

 

During the three months ended September 30, 2021, the Company received $100,000 for 2,500,000 shares of stock. The Company recorded these funds as a liability to issue stock as of September 30, 2021.

 

In connection with some of the consulting agreements and board advisory agreements the Company has entered into, as the following clauses are part of the compensation arrangements: (a) the consultant will be reimbursed for all reasonable out of pocket expenses and (b) the Company, in its sole discretion, may make additional cash payments and/or issue additional shares of common stock to the consultant based upon the consultant’s performance. The Company recognized $358,079 and $277,072 in stock-based compensation expense related to these agreements in the three months ended September 30, 2021 and 2020.

 

F- 31
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

 

STOCK OPTIONS

 

On February 1, 2012, the Company awarded to each of two executives’, one current and one former, options to purchase 66,667 common shares, an aggregate of 133,334 shares. These options vested immediately and were for services performed.

 

The following table summarizes option activity for the six months ended March 31, 2021 and year ended September 30, 2021.

                Weighted      
          Weighted-     Average      
          Average     Remaining   Aggregate  
          Exercise     Contractual   Intrinsic  
    Shares     Price     Term   Value  
                       
Outstanding at March 31, 2020     133,334     $ 7.50     1.85 Years   $  
                                 
Granted                      
Expired                              
Exercised                        
                             
Outstanding at March 31, 2021     133,334     $ 7.50     0.85 Years   $  
                             
Granted                        
Expired                        
Exercised                        
                             
Outstanding and exercisable September 30, 2021     133,334     $ 7.50     0.35 Years   $  

 

NOTE 10 – PROVISION FOR INCOME TAXES

 

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

 

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for year and three months ended September 30, 2021 and March 31, 2021:

 

    September 30, 2021     March 31,2021  
Federal income taxes at statutory rate     21.00 %     21.00 %
State income taxes at statutory rate     0.00 %     0.00 %
Temporary differences     (4.578 )%     11.83 %
Permanent differences     0.00 %     0.03 %
Impact of Tax Reform Act     0.00 %     0.00 %
Change in valuation allowance     (16.422 )%     (32.86 )%
Totals     0.00 %     0.00 %

 

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.

 

F- 32
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 10 – PROVISION FOR INCOME TAXES (CONTINUED)

 

    As of     As of  
    September 30, 2021     March 31, 2021  
Deferred tax assets:                
Net operating losses before non-deductible items   $ 5,243,533     $ 4,599,765  
Stock-based compensation     618,572       543,375  
Unrealized gains (losses) on investments     (28,123 )     164,666  
Total deferred tax assets    

5,833,982

      5,307,806  
Less: Valuation allowance     (5,833,982 )     (5,307,806 )
                 
Net deferred tax assets   $ -     $ -  

 

At September 30, 2021, the Company had a U.S. net operating loss carry-forward in the approximate amount of $26 million available to offset future taxable income through 2038. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. The valuation allowance increased by $526,176 in the three months ended September 30, 2021 and increased by $690,392 in the year ended March 31, 2021. The net decreases were the result of the tax effects of the Tax Cuts and Jobs Act (the “TCJA”) offset by taxable losses net of timing differences in each of the years.

 

NOTE 11 – INVESTMENTS

 

TRADING SECURITIES

 

For investments in securities of other companies that are owned, the Company records them at fair value with unrealized gains and losses reflected in other operating income or loss. For investments in these securities that are sold by us, the Company recognizes the gains and losses attributable to these securities investments as realized gains or losses in other operating income or loss on a first in first out basis.

 

Investment in Trading Securities:

 

 

At March 31, 2021

 

Company       Beginning of Period Cost     Purchases     Sales Proceeds     End of Period Cost     Fair Value     Realized Gain(Loss)     Unrealized Gain(Loss)  
VistaGenTherapeutics Inc (VTGN)   (a)   $ 287,500     $ 277,500     $ 302,827     $ 408,750     $ 1,246,050     $ -     $ 837,300  
SciSparc Ltd.(SPRCY)   (b)   $ -     $ 88,375     $ -     $ 88,375     $ 88,375     $ -     $ -  
Totals       $ 287,500     $ 365,875     $ 302,827     $ 497,125     $ 1,334,425     $ -     $ 837,300  

 

F- 33
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 11 – INVESTMENTS (CONTINUED)

 

TRADING SECURITIES (CONTINUED)

 

Investment in Trading Securities:

 

At September 30, 2021

 

Company       Beginning of Period Cost     Purchases     Sales Proceeds     End of Period Cost     Fair Value     Realized Gain (Loss)     Unrealized Gain (Loss)  
VistaGen Therapeutics Inc (VTGN)   (a)     408,750       480,000       1,941,707       363,000       441,000       1,415,957       (759,300 )
SciSparc Ltd. (SPRCY)   (b)     60,597       -       18,140       60,597       46,283       (9,638 )     (14,314 )
Neptune Wellness Solutions (NEPT)   (c)     -       102,201       89,200       -       -       (13,002 )     -  
BLNK CALLS - 01/21/22 $75   (d)     -       31,421       -       31,421       2,700       -       (28,721 )
Beyond Meat (BYND)   (e)     -       60,530       72,749       -       -       12,219       -  
BYND CALLS 11/19/21 $150   (f)     -       67,182       -       67,182       2,412       -       (64,770 )
Jupiter Wellness (JUPW)   (g)     -       75,701       64,362       -       -       (11,339 )     -  
Canoo, Inc. (GOEVW)   (h)     -       237,790       -       237,790       195,310       -       (42,481 )
MIND MEDICINE MINDMED INC. (MNMD)   (i)     -       123,067       110,179       -       -       (12,887 )     -  
Odyssey Semiconductor Technologies Inc.(ODII)   (j)     -       40,228       11,740       20,761       9,408       (7,727 )     (11,353 )
TLRY - CALL 12/17/21 $25   (k)     -       71,663       -       71,663       5,500       -       (66,163 )
Axsome Therapeutics, Inc.   (l)     -       173,441       28,838       147,431       224,128       2,828       76,697  
Biosig Technologies Inc.   (m)     -       116,409       -       116,409       108,770       -       (7,639 )
Totals       $ 469,347     $ 1,579,632     $ 2,336,914     $ 1,116,253     $ 1,035,511     $ 1,376,409     $ (918,042 )

 

*This amount represents the cumulative unrealized loss as of September 30, 2021.

 

(a) During the year ended March 31, 2021, the Company had exercised 230,000 warrant shares of VistaGen Therapeutics Inc. (VTGN) with a $0.50 strike acquired as part of a stock purchase agreement in addition to an additional 250,000 warrant shares with a strike price of $0.50 per share purchased for $0.15 per share. During the year ended March 31, 2021, the Company sold 125,000 shares for proceeds of $302,827 realizing a gain of $146,577. At March 31, 2021, the Company had 320,000 unexercised warrant shares with a strike price of $1.50 per share. These shares were in the money $0.63 per share in the money. On May 18, 2021, the Company exercised 180,000 of its Vistagen Therapeutics, Inc. five-year $1.50 registered warrants for $270,000 cash. On September 3, 2021 the Company exercised its remaining 140,000 warrants at $1.50 for a cost of $210,000. During the six months ended September 30, 2021, the Company sold 765,000 shares for proceeds $1,941,707 and a realized gain of $1,415,957. During the six months ended September 30, 2021, the Company had an unrealized loss of $759,300 for the shares held.
   
(b) On March 1, 2021, the Company invested $88,375 for 12,500 units of SciSparc Ltd. (formerly known as Therapix Biosciences Ltd.) (OTCQB: SPRCY), a specialty, clinical-stage pharmaceutical company focusing on the development of cannabinoid-based treatments. The Company’s investment (acquisition of an equity stake with warrants) into SciSparc Ltd., was pursuant to an $8,150,000 private placement offering, comprised 1,152,628 Units to certain institutional and accredited investors in a private placement at an offering price of $7.07 per Unit. Each Unit consists of 1 American Depositary Share (“ADS”), 1 Series A Warrant and ½ Series B Warrant. The Series A Warrants have an exercise price of $7.07, subject to adjustments therein. The Series B Warrants have an exercise price equal to $10.60, subject to adjustments therein. The Series A Warrants and the Series B Warrants are exercisable six months from the date of issuance and have a term of exercise equal to five years from the initial exercise date. 278,744 of the Units included a Pre-Funded Warrant instead of an ADS. The Pre-Funded Warrants have an exercise price of $0.001 per full ADS. During the six months ended September 30, 2021, the Company sold 3,929 shares for proceeds of $18,140, realizing a loss of $9,638. During the six months ended September 30, 2021, the Company had an unrealized loss of $14,314.

 

F- 34
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 11 – INVESTMENTS (CONTINUED)

 

TRADING SECURITIES (CONTINUED)

 

Investment in Trading Securities (Continued):

 

(c) During the six months ended September 30, 2021, the Company purchased 75,000 shares of Neptune Wellness Solutions (NEPT) at a cost of $102,201 (average of $1.36 per share). During the three months ended September 30, 2021, the Company sold all 75,000 shares for proceeds of $89,200 and a realized loss of $13,002 (average $1.19 per share).
   
(d) During the six months ended September 30, 2021, the Company purchased 180 CALL option contracts of Blink Charging Co with a strike price of $75 and an expiration of January 21, 2022. These CALL options were purchased for $31,421 ($174.56 per contract). During the six months ended September 30, 2021, the Company had an unrealized loss of $28,721.
   
(e) During the six months ended September 30, 2021, the Company purchased 500 shares of Beyond Meat, Inc. (BYND) at a cost of $60,530 ($121.06 per share). During the six months ended September 30, 2021, the Company sold all 500 shares for proceeds of $72,749 and a realized gain of $12,219 (average $121.06 per share).
   
(f) During the six months ended September 30, 2021, the Company purchased 36 CALL option contracts of Beyond Meat, Inc. with a strike price of $150 and an expiration of November 19, 2021. These CALL options were purchased for $67,182 ($1,866.18 per contract). During the six months ended September 30, 2021, the Company had an unrealized loss of $64,770.

 

(g) During the six months ended September 30, 2021, the Company purchased 15,000 shares of Jupiter Wellness (JUPW) at a cost of $75,701 ($5.05 per share). During the six months ended September 30, 2021, the Company sold all 15,000 shares for proceeds of $64,362 and a realized loss of $11,339 (average $4.29 per share).
   
(h) During the six months ended September 30, 2021, the Company purchased 103,333 warrants of Canoo, Inc. (GOEVW) at a cost of $237,790 (average $2.30 per share). During the six months ended September 30, 2021, the Company had an unrealized loss of $42,481.
   
(i) During the six months ended September 30, 2021, the Company purchased 33,000 shares of Mind Medicine Mindmed Inc. (MNMD) at a cost of $123,222 (average $3.73 per share). During the six months ended September 30, 2021, the Company sold all 33,000 shares realizing a loss of $12,887.
   
(j) During the six months ended September 30, 2021, the Company purchased 9,500 shares of Odyssey Semiconductor Technologies Inc. (ODII) at a cost of $40,250 (average $4.23 per share). During the six months ended September 30, 2021, the Company sold 4,600 shares for proceeds of $11,740 and a realized loss of $7,727. The Company had an unrealized loss of $11,352 during the six months ended September 30, 2021.
   
(k) During the six months ended September 30, 2021, the Company purchased 220 CALL option contracts of Tilray, Inc. with a strike price of $25 and an expiration of December 17, 2021. These CALL options were purchased for $71,663 ($325.74 per contract). During the six months ended September 30, 2021, the Company had an unrealized loss of $66,163.
   
(l)

During the six months ended September 30, 2021, the Company purchased 8,000 shares of Axsome Therapeutics, Inc. (AXSM) for $147,431 (average $18.43 per share). During the six months ended September 30, 2021, the Company sold 1,200 shares for proceeds of $28,837. During the six months ended September 30, 2021, the Company had an unrealized gain of $76,697.

   
(m) 

During the six months ended September 30, 2021, the Company purchased 36,500 shares of Biosig Technologies Inc. (BSGM) for $116,409 (average $3.189 per share). During the six months ended September 30, 2021, the Company had an unrealized loss of $7,639.

 

At September 30, 2021, the Company held warrants for AYTU to purchase 5,555 common shares at a strike price of $10.80 with an expiration of March 6, 2023. The strike price and number of shares were adjusted for the August 10, 2018, 1 for 20 reverse stock-split and again on December 8, 2020, as a result of a 1 for 10 shares held (herein referred to collectively as the “Reverse Stock Split”). All share and per share amounts in this report have been adjusted to reflect the effect of the Reverse Stock Split. At September 30, 2021, these warrants were out of the money by $105.12 per share and are not publicly traded, and the Company has not recognized the value of these warrants as they are not liquid.

 

F- 35
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 11 – INVESTMENTS (CONTINUED)

 

At September 30, 2021, the Company also held Series A Warrants and the Series B Warrants of SciSparc Ltd. (SPRCY). With each of the 12,500 Units, purchased by the Company, consisting of 1 ADS, 1 Series A Warrant and ½ Series B Warrant. The Series A Warrants have an exercise price of $7.07, subject to adjustments therein. The Series B Warrants have an exercise price equal to $10.60, subject to adjustments therein. The Series A Warrants and the Series B Warrants are exercisable six months from the date of issuance and have a term of exercise equal to five years from the initial exercise date. These warrants are not publicly traded, and the Company has not recognized the value of these warrants as they are not liquid.

 

COST BASED INVESTMENTS

 

Paz Gum LLC

 

Effective February 5, 2021, the Company purchased five percent of the membership units in Paz Gum LLC, a Nevada limited liability company under the terms of a Membership Unit Purchase Agreement for an aggregate purchase price of $50,000. The Company and Paz will endeavor to cross market and increase sales of our products, along with such other products that Paz Gum undertakes in their discretion. This investment was recorded at cost on the Company’s Condensed Consolidated Balance Sheet. The Company will test this investment annually for impairment.

 

Aegea Biotechnologies Inc.

 

On April 3, 2020, Tauriga Sciences, Inc. entered into a collaboration agreement (“Collaboration Agreement”) with Aegea Biotechnologies Inc. (“Aegea”), for the purpose of developing a Rapid, Multiplexed Novel Coronavirus (COVID-19) Point of Care Test with Superior Sensitivity and Selectivity (the “SARS-Col 2 Test”).

 

On January 6, 2021, however, the Company determined to terminate its equity line of credit agreement, which was the primary source of funding for this collaboration agreement. This effectively eliminated our obligation to any additional funding to Aegea under the Collaboration Agreement. As of March 31, 2021, the Company had invested $278,212 in Aegea for 69,553 shares, representing an ownership percentage of 1.02%. As of March 31, 2021, resultant delays of project milestones have led the Company to determined that full recovery of its investment in Aegea is in doubt and has recorded a 50% impairment loss on its Condensed Consolidated Statement of Operations in the amount of $139,106. Aegea is still moving forward on this project and the Company will continue to monitor the progress. There was no further activity or investment in Aegea by us in the period ended September 30, 2021.

 

On February 26, 2021, as part of a settlement agreement concluding the Collaboration Agreement, the Company acquired an additional 69,552 common shares of Aegea, increasing the Company’s total holdings to 139,104 Aegea shares (representing a 2.01% stake in Aegea as of September 30, 2021).

 

F- 36
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 11 – INVESTMENTS (CONTINUED)

 

COST BASED INVESTMENTS

 

Serendipity

 

On October 31, 2018, the Company invested $35,000 in Serendipity Brands LLC (dba Serendipity Ice Cream Co.) (“Serendipity”), a privately held Company. Serendipity is an ice cream distribution company providing wholesale distribution to retail customers. The investment was recorded at cost and represented 0.24% of the value of Serendipity based on a pre-money valuation of approximately $14 million. The Company tested the investment value in Serendipity as of March 31, 2021 for impairment. It was evidenced that Serendipity had raised significant capital during the year ended March 31, 2021 utilizing a pre-money valuation of $35 million, far exceeding the basis of Tauriga’s investment, therefore, the Company did not believe there was any impairment of this investment as of March 31, 2021.

 

NOTE 12 – FAIR VALUE MEASUREMENTS

 

The following summarizes the Company’s financial assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021 and March 31, 2021:

 

    September 30, 2021  
    Level 1     Level 2     Level 3     Total  
Assets                        
Investment-trading securities   $ 1,035,511     $ -     $ -     $ 1,035,511  
Cost method investment – Serendipity Brands     -       -       35,000     $ 35,000  
Cost method investment - Aegea Biotechnologies, Inc.     -       -       139,106     $ 139,106  
Cost method investment - Paz Gum LLC     -       -       50,000     $ 50,000  

 

    March 31, 2021  
    Level 1     Level 2     Level 3     Total  
Assets                        
Investment-trading securities   $ 1,334,425     $ -     $ -     $ 1,334,425  
Cost method investment – Serendipity Brands     -       -       35,000     $ 35,000  
Cost method investment - Aegea Biotechnologies, Inc.     -       -       139,106     $ 139,106  
Cost method investment - Paz Gum LLC     -       -       50,000     $ 50,000  

 

NOTE 13 – CONCENTRATIONS

 

During the three months ended September 30, 2021, we had one supplier for our product CBD/CBG Tauri-GumTM. The Tauri-GumTM product line represents approximately 39.8% of net sales.

 

NOTE 14 – SUBSEQUENT EVENTS

 

Subsequent to September 30, 2021, the Company issued additional shares of common stock as follows: (i) 52,000,000 shares under consulting agreements and (ii) 2,500,000 shares of restricted common stock to Dr. David Wolizky, Director for services rendered upon his resignation from the board of directors; and (iii) 3,487,000 commitment shares associated with the issuance of notes payable. credited investors for proceeds totaling $168,000 ($0.04/per share).

 

On October 6, 2021, the Company announced that it has received notification from the Patent Cooperation Treaty (“PCT”) that its International Patent Application (App No. PCT/US21/22668) was Published (Publication No. WO2021/188612) on September 23, 2021. This International Patent Application was filed by the Company on March 17, 2021 as is Titled: MEDICATED CANNABINOID COMPOSITIONS, METHODS OF MANUFACTURING, AND METHODS OF TREATMENT. This International Patent Application relates to the Company’s proposed Pharmaceutical, Cannabinoid based, Chewing Gum product (Sublingual Absorption - Delivery System) under development for the treatment of: Nausea Derived from Active Chemotherapy Treatment.

 

F- 37
 

 

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2021 AND 2020

(US$)

(UNAUDITED)

 

NOTE 14 – SUBSEQUENT EVENTS

 

On October 11, 2021, the Company entered into a SPA and a one-year inventory financing promissory note with MBS GLOEQ CORP. in the amount of $85,000. The note has a maturity date of October 11, 2022 and an interest rate of 10% per annum. Any amount of principal or interest on this note which is not paid when due shall bear an interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid or converted. The holder shall have the right upon any Event of Default, to convert all or any part of the outstanding and unpaid amount of this note into fully paid and non-assessable shares of common stock, as such common stock exists on the issue date. The variable conversion price shall mean seventy-five percent (75%) multiplied by the lowest one-day VWAP (representing a discount rate of twenty-five percent (25%)) during the ten (10) Trading Day period ending on the latest complete trading day prior to the conversion date. The borrower covenants that during the period the conversion right exists, the borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of common stock upon the full conversion of this note. The Company has established an initial reserve of 13,500,000. The Company shall make six payments in the amount of $15,583, commencing on March 11, 2022 and ending on August 11, 2022. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, right to proceeds from other financings, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA.

 

On November 1, 2021 the Company received Notice of Publication from U.S. Patent and Trademark Office (“USPTO”), for its U.S. Patent Application No. 17/204,106. The Company filed this U.S. Patent Application on March 17, 2021 and it related to its ongoing Pharmaceutical development efforts.

 

On November 2, 2021, the Company announced that it will proceed with the production of its proprietary, Green Vein Kratom (“Kratom”) infused, supplement chewing gum. Each piece of Kratom infused Tauri-Gum™ will be infused with 20mg of “Green Vein” Kratom extract. The proposed flavor for this product: Granny Smith Green Apple. Anticipated MSRP: $18.99 per pack. The Company will procure both a standard Certificate of Analysis (“COA”) as well as a much more detailed lab analysis report, from North Hollywood, California based CALIGREEN Laboratory. The Company will also commercialize this product with Kosher and Halal Certifications. Mitragyna Speciosa, also known as Kratom, is a tropical Evergreen tree in the coffee family, native to Southeast Asia. It is indigenous to Thailand, Indonesia, Malaysia, Myanmar, and Papua New Guinea, where it has been used as herbal medicine since at least the 19th century. Commercially, the 3 main strains of Kratom are: White Vein, Green Vein, and Red Vein.

 

F- 38
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations describes the principal factors affecting the results of operations, liquidity and capital resources of the Company and critical accounting estimates. This discussion should be read in conjunction with the accompanying quarterly unaudited Condensed Consolidated Financial Statements contained in this Form 10-Q and our Annual Report on Form 10-K, for the year ended March 31, 2021 (“Annual Report”). Our Annual Report includes additional information about our significant accounting policies, practices and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial and operating results.

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors”, set forth in Part II, Item 1A of this Form 10-Q and in our other SEC filings. We disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

 

Business Overview

 

Tauriga Sciences, Inc. (the “Company”) is a Florida corporation, with its principal place of business being located at 4 Nancy Court, Suite 4, Wappingers Falls, NY 12590. The Company has, over time, moved into a diversified life sciences technology company, with its mission to operate a revenue generating business, while continuing to evaluate potential acquisition candidates operating in the life sciences technology space.

 

Tauriga Pharma Corp.

 

On January 4, 2018, the Company announced the formation of a wholly owned subsidiary in Delaware, now known as Tauriga Pharma Corp. This subsidary’s focus is on the development of a pharmaceutical product line that is synergistic with the Company’s primary CBD product line. Currently, the plan is to initially create a pharmaceutical line of products to address nausea symptoms related to chemotherapy treatment in patients, which we will submit for clinical trials and to regulatory agencies for approval.

 

On March 18, 2020, the Company filed a Provisional U.S. Patent Application covering its pharmaceutical grade version of Tauri-Gum™. This patent application, filed with the United States Patent & Trademark Office (“U.S.P.T.O.”), titled: “MEDICATED CBD COMPOSITIONS, METHODS OF MANUFACTURING, AND METHODS OF TREATMENT.” The Company’s proposed pharmaceutical grade version of Tauri-Gum™ is being developed for nausea regulation, intended specifically to target patients subjected to ongoing chemotherapy treatment(s) (the “Indication”). The delivery system for this pharmaceutical product is an improved version of the existing “Tauri-Gum™” chewing gum formulation based on continued research and development. The Company converted this provisional patent application into a U.S. Non-Provisional Patent Application March 17, 2021.

 

On March 17, 2021, the Company filed an additional U.S. Provisional Patent Application relating to alternative pharmaceutical cannabinoid delivery systems.

 

On March 17, 2021, the Company filed an International Patent Application under the Patent Cooperation Treaty (“PCT”), a cooperative agreement entered into by more than 130 countries with the purpose of bringing international conformity to the filing and preliminary evaluation of patent applications. This application relates to the Company’s proposed pharmaceutical cannabinoid chewing gum delivery system being developed to treat nausea derived from active chemotherapy treatment.

 

The PCT application is published by the International Bureau at the World Intellectual Property Organization (“WIPO”), based in Geneva, Switzerland, in one of the ten “languages of publication”: Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, and Spanish.

 

3
 

 

Currently, the pharmaceutical grade version of Tauri-GumTM is in the pre-IND stage of development. The development team is working on several parallel workstreams, including:

 

formulation development;
   
non-clinical in vivo and in vitro studies to inform the effective clinical dose and safety margin;
   
regulatory strategy and regulatory documentation preparation;
   
confirmation of the active pharmaceutical ingredient (API); and
   
Identifying pharma-grade API suppliers.

 

Tauriga Sciences Limited

 

On June 10, 2019, the Company formed a wholly owned subsidiary, Tauriga Sciences Limited, with the Registrar of Companies for Northern Ireland. Tauriga Sciences Limited is a private limited Company. The entity was established in conjunction with e-commerce merchant services. In conjunction to this new entity the Company entered into a two-year lease commencing on June 11, 2019. The office is located at Regus World Trade Centre Muelle de Barcelona, edif. Sur, 2a Planta Barcelona Cataluña 08039 Spain. The Company terminated this lease during October 2020. The Company no longer maintains an office in this region.

 

NFTauriga Corp.

 

Effective April 14, 2021, the Company formed NFTauriga Corp. in the State of Deleware, as a wholly owned subsidiary. The Company is the sole holder of total authorized 100 shares having a par value of $0.00001. The Company’s Chief Executive Officer, Seth M. Shaw is the initial sole member of the board of directors, to serve until a qualified successor is duly elected. Mr. Shaw will also serve as the Chief Executive Officer and Secretary. The registered office of NFTauriga Corp. in the State of Delaware shall be at 1013 Centre Road, Suite 403-B, Wilmington, DE 19805 in the County of New Castle. The name of its registered agent at such address is Vcorp Services, LLC. NFTauriga Corp. will have the same fiscal year and principal executive office and the Company.

 

Master Services Agreement

 

On December 16, 2020, the Company entered into a Master Services Agreement with North Carolina based Clinical Strategies & Tactics, Inc. (“CSTI”) to resume the clinical development of its proposed anti-nausea pharmaceutical grade version of Tauri-Gum™. CSTI will primarily focus its efforts on (i) Pharmaceutical Development Strategy, (ii) Commercialization Strategy, and (iii) Funding Strategy. The Company will with work with CSTI’s founder and chief executive officer, JoAnn C. Giannone. Ms. Giannone has over 25 years’ experience effectively leading companies through the drug and medical device development process. On December 23, 2020, the Company funded the initial consulting fees associated with this Agreement, in the amount of $67,500, exclusive of out-of-pocket reimbursable expenses. The Company has paid additional fees, effected through change orders to the original contract, in the amount of $85,000. These additional fees were for pharmaceutical testing and market research. Under the terms of the Agreement and related statement of work, CTSI will provide a high-level assessment and documentation of the development efforts required to commercialize the proposed pharmaceutical product globally, a commercial assessment, and a review of potential funding strategies and funding sources and potential business partners. The delivery system for this proposed pharmaceutical version is a modified version (with higher concentration of CBD) of the existing Tauri-Gum™” chewing gum formulation based on continued research and development. As of September 30, 2021, $2,536 of contract payments were recorded as prepaid expense for services yet to be rendered.

 

COMPANY PRODUCTS

 

Tauri-GumTM

 

In late December 2018, the Company entered into a “Manufacturing Agreement” with Maryland based chewing gum manufacturer, Per Os Biosciences LLC (“Per Os Bio”) to launch a white label line of CBD infused chewing gum under the brand name Tauri-GumTM.

 

The Manufacturing Agreement with Per Os Bio to produce Tauri-GumTM initially consisted of 10mg of CBD isolate for its inaugural mint flavor. This proprietary CBD Gum will be manufactured under U.S. Patent # 9,744,128 (“Method for manufacturing medicated chewing gum without cooling”). Each production batch is tested by a 3rd Party for CBD label content, THC content (0%), and clear for microbiology. The retail packaging consists of an 8-piece blister card labeled with lot number and expiration date.

 

In October 2019, we also filed trademark applications for the above-referenced marks in each of the European Union and Canada. The Company received notice of allowance from the European Union Intellectual Property Office granting the Company its trademark registration for Tauri-Gum™ (E.U. Trademark # 018138334) on February 18, 2020.

 

During fiscal year 2020, the Company commenced development of a cannabigerol “CBG” isolate infused version of Tauri-Gum™ introducing Peach-Lemon flavor (containing 10mg CBG per piece) and Black Currant Flavor (containing 15mg of CBG per piece).

 

4
 

 

During fiscal year 2021, the Company developed an Immune Booster version of Tauri-Gum™ chewin