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
. . .
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 is incorporated herein by reference.
Item 8.01 Other Events.
Formulation for 25mg Vegan CBD Infused Gummies - Tauri-Gummies™
On November 25, 2019, the Company announced that it has finalized the
formulation for its Vegan 15mg CBD (Isolate) Infused Gummies product to be
branded Tauri-Gummies™ for which a trademark was filed on April 16, 2019.This
product contains no gelatin in the formulation, as the Company has utilized
plant-based alternatives in completion of this product. There will be 4 flavors
offered - cherry, orange, lemon and lime. The Company's press release relating
to the production of our Vegan gummies is attached hereto as Exhibit 99.1
The current expectation is that each gummy package will contain 24 gummies in a
jar, 6 of each flavor, containing 25mg of CBD isolate per individual gummy, or
600 mg of CBD isolate per jar. The Company plans to obtain a Kosher
Certification for this product line from the prestigious Kosher authority -
STAR-K.
Development of Cannabigerol "CBG" Isolate Infused Version of Tauri-Gum™
On December 30, 2019, the Company announced it has commenced development of a
Cannabigerol ("CBG") Isolate Infused version of its Tauri-Gum™ brand. The
company expects that each tablet of chewing gum will contain 10mg of CBG
isolate. The flavor (all natural) selected for this CBG product will be
Starfruit/Peach. This product will also be Kosher Certified (Star K, Vegan and
100% made in the USA). The Company's press release relating to the development
of its CBG product brand is attached hereto as Exhibit 99.2
The Company has already secured distinct GS1 barcodes for both: The
Starfruit/Peach CBG infused Tauri-Gum™ blister pack and retail display box.
Certified By Wal-Mart, Inc. to Become a Domestic Supplier
On December 23, 2019, the Company announced that is has been certified by
Wal-Mart, Inc. (Walmart) to become a Domestic Supplier ("Vendor"). This
certification from Walmart was obtained by the Company on December 19, 2019. The
Company's press release relating to its certification by Wal-Mart to become a
domestic supplier is attached hereto as Exhibit 99.3.
The Company's product liability insurance policy is underwritten by Evanston
Insurance Company and provides coverage of $5,000,000.
Approval to Operate Global Seller Account by Alibaba Group
On January 6 , 2020, the Company announced that is has been approved by Chinese
multinational conglomerate, Alibaba Group ("Alibaba"), to operate a Global
Seller Account. In addition, the company has been designated as a Gold Supplier
(Gold Tier Level Supplier). This Alibaba approval, opens up the global
marketplace to the Company, its products, its product lines, as well as future
business opportunities. The Company is working diligently towards establishing a
partnership with a China based fulfillment and distribution network. The
Company's press release relating to the approval by Alibaba to become a global
seller to Alibaba is attached hereto as Exhibit 99.4.
Certified as Affiliate Vendor by The National Association of College Stores
On January 7, 2020, the Company announced that is has been certified by the
National Association of College Stores ("NACS") as an affiliate vendor. As a
vendor of NACS, the Company has joined the most comprehensive group of campus
retailers working to provide the best services and selections to college
students across the United States. The Company's press release relating to the
certification by NACS as an affiliate vendor is attached hereto as Exhibit 99.5.
Trade Shows
The Company will be an exhibitor at The Hemp World Expo, which will take place
on January 18-19, 2020 in the Atlanta Expo Center North in Atlanta, Georgia. The
Company will operate this booth on the main floor, from which it will be able to
sell their products direct to potential industry customers, distributors,
dispensaries, and retail chains as well as provide samples to attendees.
From there, the Company will be an exhibitor at the PGA merchandise Show in
Orlando, Florida from January 21-24, 2020.
The Company will be exhibiting at these shows to continue its efforts in the
expansion of its brand from its earlier successful exhibition at Kosher Fest.
The information set forth in the press releases referenced in Item 8.01 of this
Current Report on Form 8-K, and annexed as exhibits 99.1-99.5 hereto is, in each
case, being 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 any such information contained in such press releases be incorporated by
reference in any filing under the Securities Act of 1933, as amended, or the
Exchange Act, except as shall be expressly set forth by specific reference in
such a filing.
Item 9.01 Exhibits Statements and Exhibits
(d) Exhibits
Exhibit
Number Description
4.1 Securities Purchase Agreement between Odyssey Capital, LLC and
the Company, dated December 18, 2019
4.2 Convertible Redeemable Note issued to Odyssey Capital, LLC,
dated December 18, 2019
4.3 Securities Purchase Agreement between Jefferson Street Capital
LLC and the Company, dated December 26, 2019
4.4 Convertible Redeemable Note issued to Jefferson Street Capital
LLC, dated December 26, 2019
4.5 Securities Purchase Agreement, December 2019 private placement
4.6 Convertible Promissory Note issued to BHP Capital NY Inc., dated
January 3, 2020
4.7 Securities Purchase Agreement between BHP Capital NY INC and the
Company, dated January 3, 2020
99.1 Press release, dated November 25, 2019
99.2 Press release, dated December 30, 2019
99.3 Press release, dated December 23, 2019
99.4 Press release, dated January 6, 2020
99.5 Press release, dated January 7, 2020
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