Tauriga Sciences Inc (fka TAUG)

[loanranger]

"Open Therapeutics agreed to pay to the Company 20% of the net profit generated Pilus Energy from its previous year’s earnings, if any. The first $75,000 of such payments would be retained by Pilus Energy as additional consideration for the sale, which is reflected as a contingent liability on the Company’s condensed consolidated balance sheet."

Funny stuff.
You sure this Company is audited?

Tauriga "sold 80% of its membership interest in Pilus back to Open Therapeutics".
"Open Therapeutics agreed to pay to the Company 20% of the net profit generated Pilus Energy from its previous year’s earnings, if any."

BUT the deal was that the first $75,000 that would be due to TAUG based on Pilus profits wouldn't be paid to TAUG because it was considered "additional consideration for the sale".

SOMEHOW that ended up on the books of TAUG as a liability.

Yesterday TAUG gave Open therapeutics $18,000 worth of restricted TAUG stock in return for canceling that $75,000 "contingent liability".

Why?

It wasn't a real liability. If Pilus made a boatload of money ($375,000) in profits TAUG wouldn't get any of it. If Pilus made more than that, TAUG would get 20% of the excess.

There was no risk that any circumstances would require the PAYMENT of $75,000 by TAUG. The worst thing that could happen is that Pilus could generate $350,000 in profits (and I don't think that there's a person on the planet that expects that to happen) and TAUG wouldn't get any of it.

So why, out of the clear blue sky, did Seth Shaw decide to give away 500,000 TAUG shares?


Anybody?



https://www.sec.gov/Archives/edgar/data/1142790/000149315218015049/form10-q.htm
https://www.sec.gov/Archives/edgar/data/1142790/000149315219000769/form8-k.htm


ps. How will TAUG record the "gain" resulting from what they are referring to as the "extinguishment"
of the $75,000 contingent liability in return for the issuance of $18,000 worth of shares (at the current price)?



JC, you still have your auditor buddies on speed dial? This should be a piece of cake for them.