A 10-Q can make for some very interesting reading! Prior to March 31, 2019, the TAUG Investment Company had dumped ALL
its VTGN common shares
for a realized loss of $34,630
. The TAUG investment Company continued to hold warrants to purchase 320,000 at a strike price of $1.50 or a total of $480,000. During Fiscal Q1 2020, i.e. April 1, 2019 thru June 30, 2019, the TAUG Investment Company purchased 230,000 restricted VTGN shares at a price of $1.25 per share, however the "author" of the 10-Q appears to be confused. Per the June 30, 2019 10-Q:
On December 11, 2017 the Company invested $480,000 in the common stock of VistaGen Therapeutics, Inc. (VTGN). The Company purchased 320,000 common shares along with 320,000 five-year warrants with a strike price of $1.50. On March 26, 2018, the Company purchased an additional 10,000 common shares. The investment in the common shares is recorded at fair valve with unrealized gains and losses, reflected in other operating income. The Company’s investment in VTGN has a cost of $490,117, unrealized loss of $183,910 and a fair value of $306,207 at March 31, 2018. During the year ended March 31, 2019, the Company purchased 59,380 shares of VTGN for $61,998 (average price per share of $1.04 per share) in the open market. The Company sold 389,380 shares of VTGN for $517,485 ($1.33 per share) for a realized loss of $34,630. The Company also purchased in a direct offering 230,000 restricted common shares directly from VTGN during the year ended March 31, 2019 for a cost of $287,500. As of June 30, 2019, the Company has an unrealized loss on these shares in the amount of $120,635, and for the year ended March 31, 2019 has recorded a total realized loss of $34,630 in VTGN.
Note there is no mention of the direct buy for 230,000 restricted shares, also including warrants to purchase an additional 230,000 @ $1.50, but the 10-Q includes the following:
Quote: "Out of the money by .25 per share" is complete BS!
At June 30, 2019, the Company currently holds warrants for VTGN to purchase 320,000 shares of common stock at a strike price of $1.50 per share with an expiration of December 13, 2022 and warrants for VTGN to purchase 230,000 shares of common stock at a strike price of $1.50 per share with an expiration of February 28, 2022. At June 30, 2019, these warrants were out of the money by $0.25 per share. Since these warrants are not publicly traded, the Company has not recognized the value of these warrants as they are not liquid.
The warrants were out of the money by .80 per share
, as the VTGN closing price on June 30, 2019 was .70 per share.
Without any further information, it appears the TAUG Investment Company is currently holding 230,000 VTGN common shares, showing an unrealized loss of $126,500, and warrants to purchase another 550,000 VTGN shares at a strike price of $1.50, or a total outlay of $825,000. The warrants are out of the money and not publicly traded, so the Asset value of the warrants is deemed to be zero.
Anything beyond what was disclosed in the June 30 10-Q is pure conjecture. It would hard to rationalize buying more VTGN shares, when the cash is needed to support the chewing gum startup. We know for a fact the TAUG Investment Company dumped its initial VTGN common holding to generate cash, even at a loss, to finance the chewing gum venture. Has the Investment Manager, CONSULTANT CEO
Seth Shaw, dumped more VTGN for a loss? The investors will only know the details, when the next 10-Q is filed in mid-November.