Master
Services Agreement
On
December 16, 2020, Tauriga Sciences Inc. (the “Company” or “we” or “us”) entered into a Master
Services Agreement (the “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”),
who has over 25 years’ experience effectively leading companies through the drug and medical device development process.
On December 23, 2020, the Company funded the costs associated with this Agreement, which total consulting fees were
$67,500, exclusive of out-of-pocket reimbursable expenses.
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.
In
regard to the Agreement, the Company issued a Press Release; however, the information set forth in the Press Release attached
hereto as Exhibit 99.1 is hereby furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), nor shall the information in such press release filed an exhibit
herewith be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
Convertible
Financing
On
December 21, 2020, the Company effectuated a six-month fixed convertible promissory note with Tangiers Global, LLC with a total
face value of $210,000 containing an original issue discount of $10,000, resulting in the payment of $200,000 to the Company on
the same date. This note matures on June 22, 2021 and bears an interest rate of 8%, guaranteed. This note has a fixed conversion
price of $0.03 per share. The Company may redeem the note by paying to Tangiers an amount as follows: (i) if the redemption is
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 the redemption is 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 and keep available for Tangiers, out of its authorized and unissued Common Stock a multiple of the number of shares
of Common Stock as shall be issuable upon the full conversion of this Note. If the Note is not retired on or before the Maturity
Date, then at any time and from time to time after the Maturity Date, and subject to the terms hereof and restrictions and limitations
contained herein, the Tangiers shall have the right, at the Tangiers’s sole option, to convert in whole or in part the outstanding
and unpaid Principal Amount under this Note into shares of Common Stock at the Variable Conversion Price which shall be equal
to the lower of: (a) the Fixed Conversion Price or (b) 70% of the lowest volume weighted average price of the Company’s
Common Stock during the 15 consecutive Trading Days prior to the date on which Tangiers elects to convert all or part of the Note.
If the Company is placed on “chilled” status with the DTC, the discount shall be increased by 10%, i.e., from 30%
to 40%, until such chill is remedied. If the Company is not DWAC eligible through their transfer agent and DTC’s FAST system,
the discount will be increased by 5%, i.e., from 30% to 35%. In the case of both, the discount shall be a cumulative increase
of 15%, i.e., from 30% to 45%. Tangiers may not engage in any “shorting” or “hedging” transaction(s) in
the Common Stock of the Company prior to conversion. In the “Event of Default”, defined (i) a default in payment of
any amount due hereunder; (ii) a default in the timely issuance of underlying shares, which default continues for 2 Trading Days
after the Company has failed to issue shares or deliver stock certificates within the 3rd Trading Day following the Conversion
Date; (iii) if the Company does not issue the press release or file the Current Report on Form 8-K; (iv) failure by the Company
for 3 days after notice has been received by the Company to comply with any material provision of this Note; (v) any representation
or warranty of the Company in this Note that is found to have been incorrect in any material respect when made, including, without
limitation, the Exhibits; (vi) failure of the Company to remain compliant with DTC, thus incurring a “chilled” status
with DTC; (vii) any default of any mortgage, indenture or instrument which may be issued, or by which there may be secured or
evidenced any indebtedness, for money borrowed by the Company or for money borrowed the repayment of which is guaranteed by the
Company, whether such indebtedness or guarantee now exists or shall be created hereafter; (viii) if the Company is subject to
any Bankruptcy Event; (ix) any failure of the Company to satisfy its “filing” obligations under the Securities Exchange
Act of 1934, as amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News Service, OTC Markets
Group, Inc. and their affiliates; (x) failure of the Company to remain in good standing under the laws of its state of domicile;
(xi) any failure of the Company to provide the Tangiers with information related to its corporate structure including, but not
limited to, the number of authorized and outstanding shares, public float within 1 Trading Day of request by Tangiers; (xii) failure
by the Company to maintain the Required Reserve; (xiii) failure of Company’s Common Stock to maintain a closing bid price
in its Principal Market for more than 3 consecutive Trading Days; (xiv) any delisting from a Principal Market for any reason;
(xv) failure by Company to pay any of its transfer agent fees in excess of $2,000 or to maintain a transfer agent of record; (xvi)
failure by Company to notify Tangiers of a change in transfer agent within 24 hours of such change; (xvii) any trading suspension
imposed by the United States Securities and Exchange Commission (the “SEC”) under Sections 12(j) or 12(k) of the 1934
Act; (xviii) failure by the Company to meet all requirements necessary to satisfy the availability of Rule 144 to the Tangiers
or its assigns, including but not limited to the timely fulfillment of its filing requirements as a fully- reporting issuer registered
with the SEC, requirements for XBRL filings, and requirements for disclosure of financial statements on its website; or (xix)
failure of the Company to abide by the Use of Proceeds or failure of the Company to inform the Tangiers of a change in the Use
of Proceeds. 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,
in addition to the Note’s “guaranteed” interest, at a rate equal to the lesser of 18% per annum or the maximum
rate permitted under applicable law.
In
connection with this Note, we will issue one million restricted commitment shares of common stock to Tangiers. In addition, in
connection with a recent inventory financing agreement with SE Holdings, LLC, the Company also issued one million restricted commitment
shares of our common stock to SE, which will be more fully described in the Company’s next periodic report.
The
foregoing description of the Note and the Master Services Agreement does not purport to be complete and are qualified in their
entirety by reference to the respective agreements, which are filed as exhibits 4.1 and 10.1 to this Current Report on Form 8-K,
and are incorporated herein by reference.