Replies to post #36393 on Tauriga Sciences Inc (fka TAUG)

[Johnny_C]

While those type of notes are almost predatory they are common in this type of market. These type of lenders want harsh guarantees. The last thing one of the lending specialists wants to explain to his boss is why he lost money on what seemed to be a very very risk investment.

Flashback to July 2015 when Seth stepped back in as CEO, there was about to be a Pilus deal consummated. Of course no matter you do you will be criticized, some dopey disgruntled shareholders actually wrote Seth emails stating that Pilus was a scam. This despite Cowan Gutenski sending 2 people to Pilus for 3 days doing a valuation of the patents.

Flashback to 2015 Seth was in talks to merge with a 3D printing company that wanted to go public. That company had diverse range products including medical devices that would be great for big Pharma. A private company at the time, looking for seed company and a partner from a few big Pharma. That merge died because of Cowan. Seth would have stepped down as CEO and shareholders most likely would have been very happy as that companies revenues exploded.

Most people do not have any idea of the number of rules and negligence claims wrapped up in this suit, and every one that is directly attributable to Meyler is duplicated to the managing partner and Partners of Cowan.

The following statements could be attributed to Cowan's silly defense;

Some people think that's TAUG's new auditor had to redo the 2014 audit before the SEC ruled that audit determined the audit unlawful, they are wrong.

Some people don't realize that Cowan had a duty notify TAUG immediately once the PCAOB notified them of the discovery of the independence breach, that was not a breach that could be cured.

Some people don't realize that After TAUG switched auditors they had a duty to notify the new auditor, after the new auditor contacted them, of the independence breach and that they agreed to the finding of the independence breach by Cowan. Cowan's own internal rotation sheet shows Meyler violated the rule. Meyler's email to Seth stated he violated the rule. Meyler is going into court with a document he wrote admitting the violation. Meyler didn't think it was a violation until the censure came out though.

Some people don't realize that Meyler worked on 2015 despite knowing he was in violation of 2014, and lied about it under oath several times.

Some people thought that by Cowan throwing another auditor on the case they could reissue 2014 despite clear rules prohibiting it.

Some people think that by Cowan throwing another auditor on the rotation sheet for 2015 they could perform work for 2015

Some people think that Cowan was owed money and that is why they initially withheld the work papers from Cowan before the censure came out, how could you owe money for unlawful billing?

Next, how could Cowan accept the 25k and state they were independent and reissue the 2014 if they were owed a significant amount of money? Can't have it both ways.

Next, after the censure, Meyler changed his tune as to why he was not transferring the work papers to KBL.

Some think that the mediator did not threaten Cowan to return the work papers.....

Some think maybe a website created after the workmpapers were returned and exposing what scumbags mitigates the damages Cowan did, good luck with that LOL

Some think a letter to the court exposing Meyler and Cowan lying in their affidavits will mitigate the damages.

And here is the funniest one, that the BOD of TAUG was responsible in part for the damages, watch that one get laughed out of court. That will be one of the defenses dumbest moves to a jury, almost as dumb as stating the lawsuit against Cowan shouldn't fly.

UMMMM. Lost in all these boilerplate defenses is the fact that didn't the insurance company already admit to liability way back, the only hope they have is mitigate. How do they mitigate punitive damages? HOw do they mitigate The insurance company's involvement in not transferring the working papers.

I saw a good slogan the other day, it went something like this -

There are none so blind as those that don't can't see the facts in front of them.

I will be at jury selection, will you

[loanranger]

"Seth also has a strong personal relationship with Group 10, so Seth did what he thought was best in response to an impossible situation."

What more can you tell us about this "strong personal relationship"?



"The Group 10 Notes are dilutive to an extent, but not toxic at all."
There are a number of definitions of "toxic" in use as it relates to various kinds of debt. The Financial Dictionary, instead of providing a definition for "toxic convertible", provides a definition of "death spiral financing". I've linked to it so you can decide for itself whether it applies here:
http://encyclopedia.thefreedictionary.com/Toxic+Convertible


"what would you have differently since July 31, 2015?"
Fortunately I don't have to answer that question, but I can tell you what I personally wouldn't do...and haven't done. I'll bet you can guess, though, and I'd rather not say.

[ksviking12]

Again, if you want to call raising a small amount of highly dilutive capital an accomplishment, go ahead. The rest of what you have outlined does not take skill at all. It takes a warm body to make phone calls and pay bills. Many see the lack of focus and train wreck of TAUG based on this fairy tale lawsuit ending. If all goes well and TAUG wins a few hundred thousand dollars then the shareholders are in worse shape. So why not bring the company public and merge with a legitimate company that can bring shareholder value? The lawsuit is a distraction to keep the stock bank open for Seth and his buddies or "personal relationships".

A stock trading up or down a few hundredths of a penny is not making any shareholders feel better.

[loanranger]

"Seth also has a strong personal relationship with Group 10"

That hasn't been explained further in spite of my request, but it's the business relationship with Tauriga that I find interesting.
Here's what's on the record, per Tauriga's own filings and press releases:

"MIAMI, March 31, 2014 (GLOBE NEWSWIRE) -- Tauriga Sciences Inc. (OTCQB:TAUG) or ("Tauriga" or "the Company"), a diversified life sciences company with key assets that include active license agreements, topical medicinal cannabis lotions, and a proprietary microbial fuel cell technology, today announced that it has fully repaid a convertible note ("the note") held by Group 10 Holdings, LLC ("Group 10 Holdings") for the principal amount of $157,500 USD. On September 30, 2013, Tauriga borrowed $157,500 USD from Group 10 while the Company was negotiating with Bacterial Robotics LLC ("Bacterial Robotics") to acquire synthetic biology pioneer Pilus Energy LLC ("Pilus Energy")."
https://globenewswire.com/news-release/2014/03/31/622982/10074680/en/Tauriga-Sciences-Inc-Fully-Repays-and-Retires-the-Convertible-Note-Held-by-Group-10-Holdings-LLC-for-Principal-Amount-of-157-500-USD.html
The actual issuance of the note on September 30, 2013 was never identified in any press release or filing at the time of its issuance. or at any time prior to its repayment. The release went on to say "Including accrued interest and contractual buyout premiums, the note was fully repaid and retired for a cash payment of $225,487.36 USD.", which represented a 43% return to Group 10 for their 6 month loan. There is no mention of an original issue discount as there was in subsequent loans, so we are left to assume that the loaned cash was for the full principal amount.

Group 10 wasn't mentioned in a filing until the 10-K filed on July 15, 2014:
"On April 7, 2014, an institutional investor Group 10 Holdings LLC invested $150,000 USD into the Company’s 6 cent private placement for a total of 2,500,000 Restricted TAUG shares."

The next reference to Group 10 appeared in a July 17, 2015 Proxy Statement signed by Shaw:
"On July 14, 2015, the Company entered into a Convertible Debenture with Group 10 Holdings, LLC (“Group 10”) in the principal amount of $96,000 with a maturity date of July 14, 2016 (the “Group 10 Note”). The Company received gross proceeds of $80,000 under the Group Note. The proceeds from the Group 10 Note were used for the payment under the Final Settlement Agreement. The Company granted Group 10 15,000,000 commitment shares of common stock in consideration of the Group 10 Note."
So in this note the company received $80,000 and gave $70,500 worth of shares to make the deal. The interest rate doesn't appear in the filing, but it does go on to say:
"Based on the Company’s closing stock price of $0.0047 on July 13, 2015 and the 40% discount, the Company would be required to issue an additional 34,042,553 shares of its common stock under the Group 10 Note. If the Company’s stock price continues to fall, this amount will increase, perhaps substantially and cause additional significant dilution."
They didn't show the math, but I expect that it's not a coincidence that those shares would have been worth exactly $160,000 if converted as per the example.

The next time we heard about that note was in an 8-K filed 9 months later (April 2016):
"The Proxy Statement further indicated the proceeds of the Group 10 Note were used for payment under the Settlement Agreement dated June 1, 2015 between the Company and Typenex Co-Investment, LLC, as further discussed in the Current Report on Form 8-K filed with the Commission on June 8, 2015. However, this was an inadvertent and incorrect disclosure by the Company. The Company used the proceeds from the Group 10 Note to fund the expenses related to the Proxy Statement, to make the $41,500 cash payment to the Company’s former Chief Executive Officer and Chief Financial Officer related to her departure, as further discussed in the Current Report on Form 8-K filed with the Commission on July 17, 2015, and to make the $7,000 cash payment to the Company’s from Chief Medical Officer related to his departure."

In the most recent 10Q filing it says this:
"As of July 15, 2015 with the Company’s delisting from the OTCQB Exchange resulting for failure to timely file the Company’s annual report with the Securities and Exchange Commission (“SEC”) violating Regulation SX, Rule 2-01 as a direct result of the Company not being able to obtain properly audited financial statements.
Due to the breach under common stock delisting from market the outstanding principal due under this note shall be increased by 18%. The new principal balance of the note increased to $113,280 with current accrued interest of $24,724."
The originally unrevealed interest rate of 12% has been increased to 18% and the note remains unpaid as of the latest filing.
If converted today ("40% discount to the lowest closing bid price of the common stock for the twenty trading days prior to the conversion notice" = $.00267) and if the total due under the note plus interest was $140,000 (I believe it is more), the company would be required to issue Group 10 52+ million shares. Those shares plus the commitment shares at today's share price would be worth $335,000….for which they received $80,000 in cash 18 months ago.


As you know there have been other notes entered into with Group 10 on similar terms. They have obviously been, and are likely to be, very expensive to shareholders in terms of the book value per share of their holdings and that's true even if the funds borrowed were needed to " Keep the Company alive".
Were funds not available to the company at more favorable terms?
If so, why were the loans made with an entity with whom "Seth has a strong personal relationship"?
If not, what does that say about the quality of a Tauriga investment?