ITEM
1.01 Entry into a Material Definitive Agreement
E&M
Distribution Agreement
On
April 1, 2019, Tauriga Sciences, Inc. (OTCQB stock symbol: TAUG, the “Company”) entered into a comprehensive distribution
agreement (the “Agreement”) with E&M Ice Cream Co. (“E&M”), an established direct store delivery
food distribution company with thousands of end-use buyers through its chain of customers to which it distributes, including supermarkets,
chain convenience stores, delis, pharmacies, specialty stores and the like in the New York City (“NYC”) metropolitan
area marketplace (the “NYC Market”).
The
thrust of the Agreement is to establish the Company’s Tauri-Gum
TM
CBD (or cannabidiol) infused chewing gum brand
in the NYC Market, with an initial penetration into 300-500 NYC based retail store locations beginning in April-May of 2019 (period:
April 1, 2019 thru May 31, 2019). The Company has recently established an internal Projection, such that the expectation is that
Tauri-Gum™ NYC Distribution will range between 200-250 Distinct Retail Locations by May 1, 2019. The Company has made the
strategic decision to focus its initial commercialization efforts on the NYC Market because of: (a) its large population of health-conscious
potential customers positioned squarely in Taur-Gum
TM
prime target demographic, and (b) its excellent distribution
relationship which, together, the Company believes will maximize its efforts to achieve a successful launch of its Tauri-Gum
TM
brand in an efficient and cost-effective manner.
In
connection with the E&M Agreement, the Company has agreed to issue a one-time issuance of 1,000,000 restricted shares the
Company’s common stock, and to tender a one-time cash payment of $125,000 to E&M. This $125,000 cash component was paid
in full to E&M on April 1, 2019. The foregoing equity issuance to E&M shall be completed in a prompt manner upon receipt
by the Company of issuance instructions from E&M.
South
Florida Region Distribution Agreement
On
April 8, 2019, the Company entered into a non-exclusive distribution agreement with IRM Management Corporation (“IRM”),
an established medical practice management firm (the “IRM Distribution Agreement”). The purpose of the IRM Distribution
Agreement is to target our Tauri-Gum™ product to the South Florida based medical market, including chiropractors, orthopedists,
as well as prospective retail customers in this geographic area.
Under
terms of this IRM Distribution Agreement, the Company will work closely with IRM to promote Tauri-Gum™. In connection with
this IRM Distribution Agreement, the Company has also agreed to a one-time issuance of 450,000 shares of the Company’s restricted
common stock and a cash stipend of $10,000 to IRM. As of the date of this Current Report, this $10,000 cash stipend has not yet
been paid.
2019
GS Capital Debenture
On
March 14, 2019, the Company entered into a 12-month $300,000 principal face value 8.0% (per annum) convertible debenture (“GS
Capital Note”) with GS Capital Partners, LLC (the “Holder”), with a maturity date of March 13, 2020. The GS
Capital Note carries $20,000 original issue discount (OID) and, as such, the initial net proceeds to the Company was $280,000.
The Holder is entitled, at its option, 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 for each share of Common Stock equal to 68% of the lowest daily VWAP
of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange for the fifteen (15) prior trading days.
The GS Capital Note may be redeemed by the Company during the first six months from execution, as follows: (i) if the redemption
is within the first 90 days, then for an amount equal to 120% of the unpaid principal amount, with any accrued interest; (ii)
if the redemption is after the 91st day, but less than the 180th day, then for an amount equal to 133% of the unpaid principal
amount, with any accrued interest. The GS Capital Note may not be redeemed after 180 days from the date of execution.
The
Company entered into the GS Capital Note in lieu of accepting additional private placement capital at lower valuations. In addition,
the Company believes that this debt transaction has the potential to be less dilutive to shareholders in the long term than accepting
additional equity private placement capital at the time of execution.
The
foregoing descriptions of the E&M Agreement, the IRM Distribution Agreement and the GS Capital Note and the Securities Purchase
Agreement (under which the GS Capital Note was issued) are not complete and are qualified in their entirety by reference to the
provisions of the E&M Agreement, the IRM Distribution Agreement and the GS Capital Note and the Securities Purchase Agreement,
filed as Exhibits 4.1, 4.2, 4.3 and 4.4, respectively, to this Current Report on Form 8-K, which are incorporated herein by reference.
Item
1.02 Termination of a Material Definitive Agreement.
As
previously disclosed on the Company’s Quarterly Report on Form 10-Q (filed on January 29, 2019), on January 23, 2019, the
Company and Eagle Equities, LLC (“Eagle Equities”) consummated entry into a securities purchase agreement whereby
the Company borrowed $62,000 under a one-year term convertible note (“Note”). The Note was convertible into restricted
stock of the Company by Eagle Equities at a conversion price for each share of Common Stock equal to 65% of the average of the
two lowest closing bid prices of the Common Stock as reported on the National Quotations Bureau OTC Markets exchange. The Company
was also permitted to repay the Note in cash, plus interest and a prepayment premium, at any time within the first 180 days of
entry into the Note. On March 25, 2019, the Company attempted to prepay the Note in cash (with a 25% premium and interest - as
required under the Note – for a total of $78,550.55); however, Eagle Equities declined the offer and converted its entire
Note into an aggregate of 1,391,045 shares of restricted common stock of the Company (which shall remain restricted under Rule
144 for six months from January 23, 2019). As a result, the Note is now fully repaid and retired and no further obligations or
remuneration is due and owing thereunder.