TAURIGA SCIENCES, INC. (OTCMKTS:TAUG) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The disclosure set forth under Item 3.02 of this Report is
incorporated by reference into this Item.
| Item 3.02 | Unregistered Sales of Equity Securities |
Eagle Equities, LLC
On January 27, 2017, Tauriga Sciences, Inc. (the Company) entered
into a one year 8% convertible note in the amount of $18,000 with
Eagle Equities, LLC (the January Eagle Note). The January Eagle
Note bears a default interest rate of 24%. The holder of the
January Eagle Note is entitled, at its option, at any time, to
convert all or any amount of the principal face amount of the
January Eagle Note then outstanding into shares of the Companys
common stock at a conversion price for each share equal to 75% of
the lowest closing bid price as reported on the National
Quotations Bureau OTC Market Exchange which the Companys shares
are traded or any exchange upon which the common stock may be
traded in the future for the ten (10) prior trading days
including the day upon which a Notice of Conversion is received
by the Company.
As additional consideration for the purchase of the January Eagle
Note, the Company shall issue the holder 3,500,000 shares of
restricted common stock valued.
In the event the Company experiences a DTC Chill on its shares,
the conversion price shall be decreased to 65% instead of 75%
while that Chill is in effect. If the Company fails to maintain
the share reserve at the four time discount 60 days after the
issuance of the January Eagle Note, the conversion discount shall
be decreased further to 55%.
During the first one hundred eighty (180) days, the Company may
prepay the principal amount of the January Eagle Note and accrued
interest thereon, with a premium, as set forth below, such
redemption must be closed and funded within three (3) days. The
amount of each prepayment premium shall be as follows: (a) there
will be no payment penalty for redemptions in the first 30 days
after the January Eagle Note issuance; (b) one hundred ten
percent (110%) of the prepayment amount if such prepayment is
made at any time from thirty-one (31) days after the issuance
date until sixty (60) days after the issuance date; (c) one
hundred fifteen percent (115%) of the prepayment amount if such
prepayment is made at any time from sixty-one (61) days after the
issuance date until ninety (90) days after the issuance date
made; (d) one hundred twenty percent (120%) of the prepayment
amount if such prepayment is made at any time from ninety-one
(91) days after the issuance date until one hundred twenty (120)
days after the issuance date made; and (e) one hundred twenty
five percent (125%) of the prepayment amount if such prepayment
is made at any time from one hundred twenty (120) days after the
issuance date until one hundred eighty (180) days after the
issuance date made. The January Eagle Note may not be prepaid
after one hundred (180) eighty days.
In the event of default whereby the Company shall have its common
stock delisted from an exchange the outstanding principal due
under the January Eagle Note shall increase by 50%. If the
January Eagle Note is not paid at maturity, the outstanding
principal shall increase by 10%. Further, if a breach of Company
becoming delinquent in its periodic report filings with the
Securities and Exchange Commission occurs or is continuing after
the six month anniversary of the January Eagle Note, then the
holder shall be entitled to use the lowest closing bid price
during the delinquency period as a base price for the conversion.
The Company shall issue irrevocable transfer agent instructions
reserving 21,333,000 shares of its common stock for conversions
under the January Eagle Note. Upon full conversion of the Eagle,
any shares remaining in the hare reserve shall be cancelled. The
Company is required at all times reserve a minimum of four (4)
times the amount of shares required if the January Eagle Note
should be fully converted.
The foregoing description of the January Eagle Note is qualified
in its entirety by reference to the provisions of the January
Eagle Note filed as Exhibit 4.1 to this Current Report on Form
8-K, which is incorporated herein by reference.
Adar Bays, LLC
On February 8, 2017, the Company entered into a $27,500
convertible debenture with 10% original issue discount in the
amount of $2,500 with Adar Bays, LLC (the Adar Note). The Adar
Note has a face value of $27,500 with a maturity date of February
8, 2017. The Adar Note bears an interest rate of 8%.
The holder of the Adar Note is entitled, at its option, at any
time after the date of funding to the Company by the holder, to
convert all or any amount of the principal face amount of the
Adar Note then outstanding into shares of the Companys common
stock at a conversion price for each share of common stock equal
to 60% of the lowest trading price of the common stock as
reported on the National Quotations Bureau OTC Market exchange
which the Companys 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.
In the event the Company experiences a DTC Chill on its shares,
the conversion price shall be decreased to 50% instead of 60%
while that Chill is in effect. In no event shall the holder be
allowed to effect a conversion if such conversion, along with all
other shares of Company common stock beneficially owned by the
holder and its affiliates would exceed 9.9% of the outstanding
shares of the common stock of the Company. The Company shall
reserve 39,855,000 shares of its common stock for conversions
under the Adar Note.
Interest on any unpaid principal balance of the Adar Note shall
be paid at the rate of 8% per annum. Interest shall be paid by
the Company in common stock. Holder may, at any time, send in a
notice of conversion to the Company for Interest Shares based on
the formula provided above. The dollar amount converted into
interest shares shall be all or a portion of the accrued interest
calculated on the unpaid principal balance of the Adar Note to
the date of such notice.
During the first one hundred eighty (180) days, the Company may
prepay the principal amount of the Adar Note and accrued interest
thereon, with a premium, as set forth below, such redemption must
be closed and funded within three (3) days. The amount of each
prepayment premium shall be as follows: (a) one hundred fifteen
percent (115%) for redemptions in the first 30 days after the
Adar Note issuance; (b) one hundred twenty percent (120%) of the
prepayment amount if such prepayment is made at any time from
thirty-one (31) days after the issuance date until sixty (60)
days after the issuance date; (c) one hundred twenty-five percent
(125%) of the prepayment amount if such prepayment is made at any
time from sixty-one (61) days after the issuance date until
ninety (90) days after the issuance date made; (d) one hundred
thirty percent (130%) of the prepayment amount if such prepayment
is made at any time from ninety-one (91) days after the issuance
date until one hundred twenty (120) days after the issuance date
made; and (e) one hundred thirty five percent (135%) of the
prepayment amount if such prepayment is made at any time from one
hundred twenty (121) days after the issuance date until one
hundred fifty (150) days after the issuance (f) one hundred forty
percent (140%) of the prepayment amount if such prepayment is
made at any time from one hundred twenty (151) days after the
issuance date until one hundred eighty (180) days after the
issuance date made. The Adar Note may not be prepaid after one
hundred (180) eighty days.
Upon (i) a transfer of all or substantially all of the assets of
the Company to any person in a single transaction or series of
related transactions, (ii) a reclassification, capital
reorganization (excluding an increase in authorized capital) or
other change or exchange of out-standing shares of the common
stock, other than a forward or reverse stock split or stock
dividend, or (iii) any consolidation or merger of the Company
with or into another person or entity in which the Company is not
the surviving entity (other than a merger which is effected
solely to change the jurisdiction of incorporation of the Company
and results in a reclassification, conversion or exchange of
outstanding shares of common stock solely into shares of common
stock) (each of items (i), (ii) and (iii) being referred to as a
Sale Event), then, in each case, the Company shall, upon request
of the holder, redeem the Adar Note in cash for 150% of the
principal amount, plus accrued but unpaid interest through the
date of redemption, or at the election of the holder, such holder
may convert the unpaid principal amount of the Adar Note
(together with the amount of accrued but unpaid interest) into
shares of common stock immediately prior to such Sale Event at
the conversion price.
Upon an Event of Default, or at any time thereafter, unless cured
within 5 days, at the option of the holder and in the holders
sole discretion, the holder may consider the Adar Note
immediately due and payable. Default interest shall accrue at a
default interest rate of lesser of 24% per annum or at the
highest rate permitted by law. In the event of a breach whereby
the company does not deliver to the holder, common stock without
restrictive legend within 3 business days of its receipt of a
notice of conversion (including an opinion of counsel expressing
support of the removal of a restrictive legend) penalty shall be
$250 per day the shares are not issued beginning on the 4th day
after the conversion notice was delivered to the Company. This
penalty shall increase to $500 per day beginning on the 10th day.
The penalty for a breach of the Company causing to lose the bid
price for its stock shall be an increase of the outstanding
principal amounts by 20%. In case of a breach of the Company
having its common stock delisted from an exchange or, if the
common stock is suspended for more than 10 consecutive days or
ceases to file its periodic reports with the SEC, the outstanding
principal due under the Adar Note shall increase by 50%. If the
Adar Note is not paid at maturity, the outstanding principal due
under the Adar Note shall increase by 10%. Further, if a breach
occurs from the Company becoming delinquent in its periodic
report filings with the Securities and Exchange Commission occurs
or continues after the 6-month anniversary of the Adar Note, then
the holder shall be entitled to use the lowest closing bid price
during the delinquency period as a base price for the conversion.
The Company shall reserve, with transfer agent, 39,855,000 shares
of its common stock for conversions under the Adar Note. Upon
full conversion of the Adar Note, any shares remaining in the
share reserve shall be cancelled. The Company should at all times
reserve a minimum of four (4) times the amount of shares required
if the Adar Note would be fully converted. The holder may
reasonably request increases from time to time to reserve such
amounts. The Company will instruct its transfer agent to provide
the outstanding share information to the holder in connection
with its conversions.
The foregoing description of the Adar Note is qualified in its
entirety by reference to the provisions of the January Adar Note
filed as Exhibit 4.2 to this Current Report on Form 8-K, which is
incorporated herein by reference.
Eagle Equities, LLC
On March 20, 2017, the Company issued two one year 8% convertible
note in the amount of $70,000 ($35,000 each) with Eagle Equities,
LLC (the March Eagle Notes).
On March 22, 2017, Eagle Equities, LLC funded the first March
Eagle Note through the direct payment of cash in the amount of
$7,000 and direct payments to designees of the Company in the
amount of $26,000. The remaining $2,000 was deducted as applied
legal fees incurred by the holder.
The holder of the first March Eagle Note is entitled, at its
option, at any time, to convert all or any amount of the
principal face amount of first March Eagle Note then outstanding
into shares of the Companys common stock at a conversion price
for each share equal to 75% of the lowest closing bid price as
reported on the National Quotations Bureau OTC Market Exchange
which the Companys shares are traded or any exchange upon which
the common stock may be traded in the future for the ten (10)
prior trading days including the day upon which a Notice of
Conversion is received by the Company.
As additional consideration for the purchase of first March Eagle
Note, the Company shall issue the holder 16,000,000 shares of
restricted common stock.
In the event the Company experiences a DTC Chill on its shares,
the conversion price shall be decreased to 65% instead of 75%
while that Chill is in effect. If the Company fails to maintain
the share reserve at the 4x discount 60 days after the issuance
of first March Eagle Note, the conversion price shall be
decreased further to 55%.
During the first one hundred eighty (180) days, the Company may
prepay the principal amount of first March Eagle Note and accrued
interest thereon, with a premium, as set forth below (prepayment
premium), such redemption must be closed and funded within three
(3) days. The amount of each prepayment premium shall be as
follows: (a) there will be no payment penalty for redemptions in
the first 30 days after the first March Eagle Note issuance; (b)
one hundred ten percent (110%) of the prepayment amount if such
prepayment is made at any time from thirty-one (31) days after
the issuance date until sixty (60) days after the issuance date;
(c) one hundred fifteen percent (115%) of the prepayment amount
if such prepayment is made at any time from sixty-one (61) days
after the issuance date until ninety (90) days after the issuance
date made; (d) one hundred twenty percent (120%) of the
prepayment amount if such prepayment is made at any time from
ninety-one (91) days after the issuance date until one hundred
twenty (120) days after the issuance date made; and (e) one
hundred twenty five percent (125%) of the prepayment amount if
such prepayment is made at any time from one hundred twenty (120)
days after the issuance date until one hundred eighty (180) days
after the issuance date made. The first March Eagle Note may not
be prepaid after one hundred (180) eighty days.
In the event of default whereby the Company shall have its common
stock delisted from an exchange the outstanding principal due
under the first March Eagle Note shall increase by 50%. If the
first March Eagle Note is not paid at maturity, the outstanding
principal due under the First March Eagle Note will increase by
10%. Further, if a breach of Company becoming delinquent in its
periodic report filings with the Securities and Exchange
Commission occurs or is continuing after the six month
anniversary of the Note, then the holder shall be entitled to use
the lowest closing bid price during the delinquency period as a
base price for the conversion.
The Company shall issue irrevocable transfer agent instructions
reserving 50,000,000 shares of its common stock for conversions
under the first March Eagle Note. Upon full conversion of the
first March Eagle Note, any shares remaining in the share reserve
shall be cancelled. The Company should at all times reserve a
minimum of four times the amount of shares required if the March
Eagle Note would be fully converted.
The foregoing description of the March Eagle Notes are qualified
in their entirety by reference to the provisions of the March
Eagle Notes filed as Exhibits 4.3 and 4.4, respectively, to this
Current Report on Form 8-K, which is incorporated herein by
reference.
Group 10 Holdings LLC
On March 31, 2016, the Company entered into a $40,000 convertible
debenture with OID in the amount of $5,000 with Group 10 Holdings
LLC (the Group 10 Note). The Group 10 Note was amended on May 11,
2017. The terms set forth below reflect all such amendments.
Along with the Group 10 Note, 15,000,000 commitment shares of
common stock must be issued to the holder within 15 days or an
event of default will have occurred, earned in full upon purchase
of the Group 10 Note. The Group 10 Note bears 12% interest per
annum with a default interest rate of the lesser of 18% or the
maximum rate permitted under applicable law, effective as of the
issuance date of the Group 10 Note. If any event of default
occurs, the outstanding principal amount of this the Group 10
Note, plus accrued but unpaid interest, liquidated damages and
other amounts owing in respect thereof through the date of
acceleration, shall become, at holders election, immediately due
and payable in cash in the sum of (a) one hundred eighteen
percent (118%) of the outstanding principal amount of the Group
10 Note plus one hundred percent (100%) of accrued and unpaid
interest thereon and (b) all other amounts, costs, expenses and
liquidated damages due in respect of the Group 10 Note. After the
occurrence of any event of default, the interest rate on the
Group 10 Note shall accrue at an interest rate equal the default
interest rate.
Subject to the approval of holder for prepayments after one
hundred eighty (180) days, the Company may prepay in cash all or
any portion of the principal amount of the Group 10 Note and
accrued interest thereon, with a premium, as set forth below,
upon ten (10) business days prior written notice to holder. The
holder shall have the right to convert all or any portion of the
principal amount and accrued interest thereon during such ten
(10) business day notice period. The amount of each prepayment
premium shall be as follows: (a) one hundred forty-five percent
(145%) of the prepayment amount if such prepayment is made at any
time from the issuance date until the maturity date.
The holder shall have the right, but not the obligation, at any
time after the issuance date and until the maturity date, or
thereafter during an event of default, to convert all or any
portion of the outstanding principal amount, accrued interest and
fees due and payable thereon into fully paid and non-assessable
shares of common stock of the Company at the conversion price,
which shall mean the lesser of (a) fifty percent (50%) multiplied
by the lowest closing price during the thirty-five (35) trading
days prior to the notice of conversion is given (which represents
a discount rate of fifty percent (50%)) or (b) two-tenths of a
penny ($0.002).
If the market capitalization of the Company is less than one
million dollars ($1,000,000) on the day immediately prior to the
date of the notice of conversion, then the conversion price shall
be twenty-five percent (25%) multiplied by the lowest closing
price during the thirty-five (35) trading days prior to the date
a notice of conversion is given (which represents a discount rate
of seventy-five percent (75%)). Additionally, if the closing
price of the Companys common stock on the day immediately prior
to the date of the notice of conversion is less than one-tenth of
a penny ($0.001) then the conversion price shall be twenty
percent (25%) multiplied by the lowest closing price during the
thirty-five (35) trading days prior to a notice of conversion is
given (which represents a discount rate of twenty-five percent
(25%)).
At all times during which the Group 10 Note is outstanding, the
Company shall reserve and keep available from its authorized and
unissued shares of common stock for the sole purpose of issuance
upon conversion of the Group 10 Note and payment of interest,
free from preemptive rights or any other actual or contingent
purchase rights of persons other than holder, not less than five
times the aggregate number of shares of the commons stock that
shall be issuable the conversion of the outstanding principal
amount of the Group 10 Note and payment of interest hereunder.
Initially, the share reserve shall be equal to three hundred
fifty million (350,000,000) shares. The holder may request
bi-monthly increases to reserve such amounts based on a
conversion price equal to the lowest closing price during the
preceding thirty-five (35) day. The Company agrees that it will
take all such reasonable actions as may be necessary to assure
that the conversion shares may be issued. The Company agrees to
provide holder with confirmation evidencing the execution of such
share reservation within fifteen (15) business days from the
issuance date.
The foregoing description of the Group 10 Note is qualified in
its entirety by reference to the provisions of the Group 10 Note
and the First Amendment to Convertible Debenture filed as
Exhibits 4.5 and 4.7, respectively, to this Current Report on
Form 8-K, which are incorporated herein by reference.
GS Capital Partners LLC
On April 27, 2017, the Company entered into a one year 8% $45,000
Convertible Note with GS Capital Partners, LLC (the GS Note). The
GS Note has a maturity date of April 27, 2018 and was funded on
May 2, 2017.
The holder is entitled, at its option, at any time after cash
payment, to convert all or any amount of the principal face
amount of the GS Note then outstanding into shares of the
Companys common stock at a price for each share of common stock
equal to 70% 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 Companys 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 the holder 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 Companys 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 60% instead of 70%
while that Chill is in effect. In no event shall the holder be
allowed to effect a conversion if such conversion, along with all
other shares of the Company common stock beneficially owned by
the holder and its affiliates would exceed 9.9% of the
outstanding shares of the common stock of the Company.
During the first six months th GS Note is in effect, the Company
may redeem the GS Note by paying to the holder 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 Note along with any interest that has
accrued during that period, (ii) if the redemption is after the
91st day, but less than 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 GS Note may not be
redeemed after 180 days. The redemption must be closed and paid
for within 3 business days of the Company sending the redemption
demand or the redemption will be invalid and the Company may not
redeem the GS Note.
Upon an event of default, the holder may consider the GS Note
immediately due and payable. 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. If this note is not paid at
maturity, the outstanding principal due under the Note shall
increase by 10%.
The Company shall issue irrevocable transfer agent instructions
reserving shares of its common stock for conversions under the GS
Note equal to four (4) times the discounted value of the note.
Upon full conversion of the Note, any shares remaining in the
share reserve shall be cancelled. The Company should at all times
reserve a minimum of four (4) times the amount of shares required
if the note would be fully converted. The holder may reasonably
request increases from time to time to reserve such amounts. The
Company will instruct its transfer agent to provide the
outstanding share information to the holder in connection with
its conversions. The holder has agreed to waive this provision
until sufficient shares are available for reserve.
The foregoing description of the GS Note is qualified in its
entirety by reference to the provisions of the GS Note filed as
Exhibit 4.6, respectively, to this Current Report on Form 8-K,
which is incorporated herein by reference.
The shares of common stock underlying the January Eagle Note, the
Adar Note, the March Eagle Notes, the Group 10 Note and the GS
Note will be issued in reliance upon an exemption from
registration provided by Section 4(2) of the Securities Act of
1933, as amended. This Current Report on Form 8-K is not and
shall not be deemed to be an offer to sell or the solicitation of
an offer to buy common stock.
Amendments to Previous Group 10 Holdings, LLC
Notes
On May 11, 2017, the Company and Group 10 Holdings LLC (Group 10)
agreed to amend the two other Convertible Debentures Group 10
currently has outstanding with the Company (the Group 10 Prior
Notes). The Group 10 Prior Notes were initially issued on July
14, 2015 and November 7, 2016. Specifically, the Group 10 Prior
Notes were amended with the terms set below.
The conversion price discount of the Group 10 Prior Notes was
increased from forty percent (40%) to fifty percent (50%). If the
market capitalization of the Company is less than $1,000,000 on
the day immediately prior to the date of a notice of conversion
(the market capitalization number was $2,000,000 in the Group 10
Prior Notes), then the conversion price shall be twenty-five
percent (25%) multiplied by the lowest closing price during the
thirty-five (35) trading days prior to the date a notice of
conversion is given (which represents a discount rate of
seventy-five percent (75%)). Additionally, if the closing price
of the Companys common stock on the day immediately prior to the
date of the notice of conversion is less than one-tenth of a
penny ($0.001) (the market capitalization number was two-tenths
of a penny ($0.002) in the Group 10 Prior Notes), then the
conversion price shall be twenty-five percent (25%) multiplied by
the lowest closing price during the thirty-five (35) trading days
prior to a notice of conversion is given (which represents a
discount rate of seventy-five percent (75%)).
Additionally, effective as of the initial issuance dates, the
Group 10 Prior Notes will no longer have the following
provisions: (i) most favored nations status for other
transactions entered into by the Company; (ii) a prohibition
against the Company from entering into additional debt
instruments and (iii) a prohibition against the Company from
entering into a transaction which creates a lien on the Companys
assets.
The foregoing description of the amendments to the Group 10 Prior
Notes is qualified in its entirety by reference to the provisions
of the First Amendment to 2016 Convertible Debenture and First
Amendment to 2015 Convertible Debenture, respectively, filed as
Exhibits 4.8 and 4.9, respectively, to this Current Report on
Form 8-K, which are incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 4.1* |
$18,000 Convertible Debenture issued by Tauriga Sciences, Inc. to Eagles Equities, LLC on January 27, 2017. |
| 4.2* |
$27,500 Convertible Debenture issued by Tauriga Sciences, Inc. to Adar Bays, LLC on February 8, 2017. |
| 4.3* |
$35,000 Convertible Note No. 1 issued by Tauriga Sciences, Inc. to Eagle Equities, LLC on March 20, 2017. |
| 4.4* |
$35,000 Convertible Note No. 2 issued by Tauriga Sciences, Inc. to Eagle Equities, LLC on March 20, 2017. |
| 4.5* |
$40,000 Convertible Debenture issued by Tauriga Sciences, Inc. to Group 10 Holdings, LLC on March 31, 2017. |
| 4.6* |
$45,000 Convertible Debenture issued by Tauriga Sciences, Inc. to GS Capital Partners LLC on April 27, 2017. |
| 4.7* |
First Amendment to 2017 Convertible Debenture dated May 11, 2017 between Tauriga Sciences, Inc. to Group 10 Holdings, LLC. |
| 4.8* |
First Amendment to 2016 Convertible Debenture dated May 11, 2017 between Tauriga Sciences, Inc. to Group 10 Holdings, LLC. |
| 4.9* |
First Amendment to 2015 Convertible Debenture dated May 11, 2017 between Tauriga Sciences, Inc. to Group 10 Holdings, LLC. |
*Filed herewith.
About TAURIGA SCIENCES, INC. (OTCMKTS:TAUG)
Tauriga Sciences, Inc. is a diversified company. The Company is focused on the development of technology platform in the nano-robotics space. The Company is engaged in acquiring and building a portfolio of technology assets. TAURIGA SCIENCES, INC. (OTCMKTS:TAUG) Recent Trading Information
TAURIGA SCIENCES, INC. (OTCMKTS:TAUG) closed its last trading session up +0.00010 at 0.00140 with 4,467,607 shares trading hands.