Item
1.01 Entry into a Material Definitive Agreement.
Tauriga
Sciences, Inc. (OTCQB stock symbol: TAUG, the “Company”) has opted to enter into several additional Convertible Note
agreements and private placements for strategic purposes. The Company has principally concentrated its efforts
on revenue generation by increasing the number of products for resale, attending several trade shows to provide
product exposure in achieving the goal of expanding the Tauri-Gum™ brand, manufacturing, production and delivery
of new flavors and by working with significant customers to increase product sales (as noted in more detail herein). In order
to accomplish these operating goals, additional capital was required, and the Company opted to enter into both convertible
debt and equity arrangements to finance these operations in order to enhance shareholder value and reach these operational
milestones.
These arrangements noted in this current report reflect the Company’s belief that, through hard work
and execution, additional value can be created over the next six months and beyond. The Company was offered and ultimately declined
certain additional private placements after careful consideration and opted to borrow additional capital through the convertible
notes discussed herein. Private placements accepted by the Company were completed prior to December 15, 2019 prior to some of the recent important catalysts being completed.
The
following represents the most recently executed arrangements:
Odyssey
Capital, LLC – Convertible Note – December 18, 2019
On
December 18, 2019, the Company entered into a one year 8% $100,000 Convertible Note with Odyssey Capital, LLC (“Odyssey”)
pursuant to the terms of a Securities Purchase Agreement (the “Odyssey Note”). The Odyssey Note has a maturity date
of December 18, 2020 and carried a $5,000 original issue discount (such that $95,000 was funded to the Company at closing). The
Investor is entitled, at its option, at any time after cash payment, to convert all or any amount of the principal face amount
of the Odyssey Note then outstanding into shares of the Company’s common stock at a price for each share of common stock
equal to 64% of the lowest daily volume weighted average price (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, for the fifteen (15) prior trading days including the day upon which a notice of conversion is received by the
Company or its transfer agent. Such conversion shall be effectuated by the Company delivering the shares of common stock to Odyssey
within 3 business days of receipt by the Company of the notice of conversion. Accrued but unpaid interest shall be subject to
conversion. To the extent the conversion price of the Company’s common stock closes below the par value per share, the Company
will take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible
under law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a
DTC “Chill” on its shares, the conversion price shall be decreased to 54% instead of 64% while that “Chill”
is in effect. In no event shall the Investor be allowed to effect a conversion if such conversion, along with all other shares
of Company Common Stock beneficially owned by Odyssey and its affiliates would exceed 4.99% of the outstanding shares of the Common
Stock of the Company (which may be increased up to 9.9% upon 60 days’ prior written notice by Odyssey). During the first
180 calendar days that the Odyssey Note is in effect, the Company may redeem the Odyssey Note by paying to Odyssey an amount as
follows: (i) if the redemption is within the first 60 days of the issuance date, then for an amount equal to 125% of the unpaid
principal amount of this Odyssey Note along with any interest that has accrued during that period, (ii) if the redemption is after
the 61st day, but by the 120th day of the issuance date, then for an amount equal to 135% of the unpaid principal amount of this
Odyssey Note along with any accrued interest, and (iii) if the redemption is after the 120th day, but less than the
180th day of the issuance date, then for an amount equal to 140% of the unpaid principal amount of this Note along
with any accrued interest. The Company may not redeem the Odyssey Note after the 180th day from entering into it. Upon an event
of default, among other default provisions set forth in the Odyssey Note, (i) 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. (ii) if the Company shall fail to deliver to the Investor the shares of common stock without restrictive legend (when
permissible in accordance with applicable law) within three (3) business days of its receipt of a notice of conversion, then the
Company shall pay a penalty of $250 per day the shares are not issued beginning on the 4th day after the conversion notice was
delivered to the Company (which shall be increased to $500 per day beginning on the 10th day); (iii) if the Company’s stock
ceases to be listed on an exchange, its stock is suspended from trading for more than 10 consecutive trading days or the Company
ceases to file its reports with the SEC under the Securities Exchange Act of 1934, as amended, then the outstanding principal
due under the Odyssey Note shall increase by 50%; or (iv) if the Odyssey Note is not paid at maturity, the outstanding principal
due under this Odyssey Note shall increase by 10%.
In
connection with the Odyssey Note, the Company issued irrevocable transfer agent instructions reserving 22,084,000 shares (the
“Share Reserve”) of its Common Stock for conversions under this Odyssey Note. Odyssey shall have the right to periodically
request that the number of reserved shares be increased so that the number of reserved shares at least equals four hundred percent
of the number of shares of Company common stock issuable upon conversion of the Odyssey Note so long as there are sufficient authorized
and unissued shares of the Company not otherwise reserved available to do so. Upon full conversion or repayment of this Odyssey
Note, any shares remaining in the Share Reserve shall be cancelled.
The
foregoing description of the above referenced transaction is not complete and is qualified in its entirety by reference to the
text of the Securities Purchase Agreement and the Odyssey Note, which are attached as Exhibits 4.1 and 4.2, respectively, to this
Current Report on Form 8-K and are incorporated herein by reference.
Jefferson
Street Capital LLC – Convertible Note – December 26, 2019
On
December 26, 2019, the Company entered into a one year 10% $55,000 Convertible Note with Jefferson Street Capital LLC (“Jefferson
Street”) pursuant to the terms of a Securities Purchase Agreement (the “Jefferson Street Note”). The Jefferson
Street Note has a maturity date of December 26, 2020 and carried a $5,000 original issue discount (such that $50,000 was funded
to the Company at closing). The Investor is entitled, at its option, at any time after cash payment, to convert all or any amount
of the principal face amount of the Jefferson Street Note then outstanding into shares of the Company’s common stock at
a price for each share of common stock equal to 65% of the lowest daily volume weighted average price (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, for the fifteen (15) prior trading days including the day upon which
a notice of conversion is received by the Company or its transfer agent. Commencing on the date which is 180 days following the
date of this Jefferson Street Note and ending on the later of: (i) the Maturity Date and (ii) the date of payment of the Default
Amount, this Jefferson Street Note may be converted by Jefferson Street in whole or in part at any time from time to time after
the Issue Date as noted in the Jefferson Street Note. During the first 180 calendar days that the Jefferson Street Note is in
effect, the Company may redeem the Jefferson Street Note by paying Jefferson Street an amount as follows: (i) if the redemption
is within the first 90 days of the issuance date, then for an amount equal to 120% of the unpaid principal amount of this Jefferson
Street Note along with any interest that has accrued during that period, and (ii) if the redemption is after the 91st day, but
by the 180th day of the issuance date, then for an amount equal to 133% of the unpaid principal amount of this Jefferson Street
Note along with any accrued interest. The Company may not redeem the Jefferson Street Note after the 180th day from entering into
it. Upon an event of default, among other default provisions set forth in the Jefferson Street Note 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.
In
connection with the Jefferson Street Note, the Company is required at all times to have authorized and reserved six times the
number of common shares that would be issuable upon full conversion of the Jefferson Street Note in effect (assuming that the
4.99% limitation set forth in the Jefferson Street Note is not in effect) which shall initially be reserved at 20,000,000
common shares (the “Share Reserve”) of its Common Stock for conversions under this Jefferson Street Note. Upon full
conversion or repayment of this Jefferson Street Note, any shares remaining in the Share Reserve shall be cancelled.
The
foregoing description of the above referenced transaction is not complete and is qualified in its entirety by reference to the
text of the Securities Purchase Agreement and the Jefferson Note, which are attached as Exhibits 4.3 and 4.4, respectively, to
this Current Report on Form 8-K and are incorporated herein by reference.
Tangiers
Global, LLC – Term Sheet – January 4, 2020
On
January 4, 2020, the Company entered into a $5,000,000 Fixed Funding Commitment Term Sheet (“Term Sheet”) with Tangiers
Global, LLC (“Tangiers”). In accordance with the terms of the Term Sheet, the Company shall have the right to put
shares to Tangiers of the Company’s common stock from time to time following effectiveness of a Form S-1
Registration Statement (“S-1”) by the Company. If upon the completion of 90 days, the Company has not filed
its S-1, the Company shall issue to Tangiers a 250,000 common share break-up fee.
The
Company may request equity investments (“Puts”) by Tangiers pursuant to which the Company will issue common stock
to Tangiers subject to the lowest VWAP of the common stock during the 5 trading days including and immediately following the date
of which a Put notice is delivered to Tangiers (“Pricing Period”) which is defined as the Market Price (“Market
Price”). The Put Price is 88% of the Market Price.
There
will be a minimum of eight (8) trading days between Puts, however, this restriction may be temporarily removed with written
approval from Tangiers. The timing and amounts of the Puts shall be at the sole discretion of the Company. The maximum amount
of each Put shall not exceed two times the average daily trading volume for the common stock during the 10 trading days proceeding
the Put date. No Put shall be made in an amount lower than $5,000 or higher than $350,000 without prior written approval of Tangiers.
Tangiers may not hold more than 9.99% of the Company’s common stock at any time.
The Company and Tangiers
intend to enter into definitive agreements setting forth the more complete terms of this fixed funding arrangement and, upon completion,
shall file such agreement(s) with our future applicable SEC reports.
BHP Capital NY Inc. – Convertible
Promissory Note – January 3, 2020
On January 3, 2020,
the Company entered into a one year 2% $44,000 Convertible Promissory Note with BHP Capital NY Inc. (“BHP Capital”)
pursuant to the terms of a Securities Purchase Agreement (the “BHP Capital Note”). The BHP Capital Note has a maturity
date of January 3, 2021 and carries a $4,000 original issue discount (such that $40,000 was funded to the Company at closing).
BHP has the right from time to time, and at any time after closing, to convert all or any amount of the principal face amount
of the BHP Capital Note then outstanding into shares of the Company’s common stock at a price for each share of common stock
equal to 65% of the lowest one-day volume weighted average price (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, for the twenty (20) prior trading days including the day upon which a notice of conversion is received by the Company
or its transfer agent. Such conversion shall be effectuated by the Company delivering the shares of common stock to BHP Capital
within three (3) business days of receipt by the Company of the notice of conversion. The conversion price may be adjusted downward
if, within three (3) business days of the transmittal of the Notice of Conversion to the Company, the Common Stock has a closing
bid which is 5% or lower than that set forth in the Notice of Conversion. Accrued but unpaid interest shall be subject to conversion.
To the extent the conversion price of the Company’s common stock closes below the par value per share, the Company will
take all steps necessary to solicit the consent of the stockholders to reduce the par value to the lowest value possible under
law. The Company agrees to honor all conversions submitted pending this increase. In the event the Company experiences a DTC “Chill”
on its shares, the conversion price shall be decreased to 50% instead of 65% while that “Chill” is in effect. In no
event shall BHP be allowed to effect a conversion if such conversion, along with all other shares of Company Common Stock beneficially
owned by BHP Capital and its affiliates would exceed 4.99% of the outstanding shares of the Common Stock of the Company.
During the first 180
calendar days that the BHP Capital Note is in effect, the Company may redeem the BHP Capital Note by paying to BHP Capital an
amount as follows: (i) if the redemption is within the first thirty (30) days of the issuance date, then for an amount equal to
110% of the unpaid principal amount of this BHP Capital Note along with any interest that has accrued during that period, (ii)
if the redemption is on or after the 31st day, but by the 60th day of the issuance date, then for an amount equal to 115% of the
unpaid principal amount of this BHP Capital Note along with any accrued interest, (iii) if the redemption is on or after the 61st day
and through the 90th day of the issuance date, then for an amount equal to 120% of the unpaid principal amount of this Note
along with any accrued interest and (iv) if the redemption is on or after the 91st day and through the 180th day of the issuance
date, then for an amount equal to 133% of the unpaid principal amount of this Note along with any accrued interest. The Company
may not redeem the BHP Capital Note after the 180th day from entering into it. Upon an event or continuation of default,
among other penalty provisions, of the BHP Note (1) interest shall accrue at a default interest rate of 24% per annum (“Default
Interest”), and (2) the Note shall become immediately due and payable and the Company shall pay to the BHP, in full satisfaction
of its obligations thereunder, an amount equal to the greater of (i) 150% times the sum of (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the date of payment plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to BHP pursuant to
the BHP Capital Note and all other amounts payable thereunder shall immediately become due and payable. The BHP Capital
Note contains cross-default provisions to other Company agreements which, if triggered after the passage of all applicable notice
and cure or grace periods, shall, at the option of BHP, be considered a default under the BHP Capital Note in which event BHP
shall be entitled (but in no event required) to apply all rights and remedies of BHP under the terms and provisions of the BHP
Capital Note and such other applicable agreements.
In
connection with the BHP Capital Note, the Company issued irrevocable transfer agent instructions pursuant to which the Company
is required at all times to have reserved three times the number of shares that would be issuable upon full conversion of the
Note (assuming that the 4.99% beneficial ownership limitation is not in effect) (based on the respective Conversion Price of the
Note in effect from time to time, initially 14,100,000 shares of its Common Stock (the “Share Reserve”) for conversions
under this BHP Capital Note. Failure to maintain the share Reserve may be an event of default. Upon full conversion or repayment
of this BHP Capital Note, any shares remaining in the Share Reserve shall be cancelled.
The
foregoing description of the above-referenced transaction is not complete and is qualified in its entirety by reference to
the text of the Securities Purchase Agreement and the BHP Capital Note, which are attached as Exhibits 4.6 and 4.7,
respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Private
Placement of Common Stock – December 2019
In
December 2019, the Company entered into a Securities Purchase Agreements with various individual accredited investors
at an average price of $0.02 per share (“Purchase Price”), which consummated on December 13, 2019.
The Company raised an aggregate of $88,520 in exchange for the sale of an aggregate of 4,426,000 shares of our restricted
Common Stock. This private placement was completed prior to December 15, 2019.
The
shares of our restricted common stock were sold pursuant to the terms of a Securities Purchase Agreements and issued
in reliance upon an exemption from securities registration afforded by the provisions of Section 4(2), Section 4(6) and Regulation
D as promulgated by the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.
The
shares of our common stock were offered and sold in a private placement and have not been registered under the Securities Act,
or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration under
or an applicable exemption from such registration requirements. This Current Report on Form 8-K does not constitute an offer to
sell, or a solicitation of an offer to purchase, the shares of our common stock in any jurisdiction in which such offer or solicitation
would be unlawful.
The
foregoing description of the above referenced private placement transaction is not complete and is qualified in its entirety by
reference to the Securities Purchase Agreement, attached as Exhibit 4.5 hereto, the terms of which are incorporated in their entirety
herein by reference.