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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number 000-53723

TAURIGA SCIENCES, INC.

(Exact name of registrant as specified in its charter)

Florida

30-0791746

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

4 Nancy Court, Suite 4

Wappingers Falls, NY 12590

(Address of principal executive offices) (Zip Code)

(917) 796-9926

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Exchange Act:

None

Securities registered under Section 12(g) of the Exchange Act:

Common Stock, $.00001 Par Value

(Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or, an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company”, in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☐		Smaller reporting company ☒
(Do not check if smaller reporting company)		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2021, the registrant had 287,871,214 shares of its Common Stock, $0.00001 par value, outstanding.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		TAUG		OTCQB

TABLE OF CONTENTS

		Pages

PART I. FINANCIAL STATEMENTS

Item 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:	F-1

	Condensed Consolidated Balance Sheets as of June 30, 2021 (unaudited) and March 31, 2021	F-1

	Condensed Consolidated Statements of Operations for the three ended June 30, 2021 and 2020 (unaudited)	F-2

	Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the three months ended June 30, 2021 and 2020 (unaudited)	F-3

	Condensed Consolidated Statements of Cash Flows for the three months ended June 30, 2021 and 2020 (unaudited)	F-4

	Notes to Condensed Consolidated Financial Statements (unaudited)	F-5

Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3

Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	13

Item 4.	CONTROLS AND PROCEDURES	13

PART II. OTHER INFORMATION

Item 1.	LEGAL PROCEEDINGS	14

Item 1A.	RISK FACTORS	14

Item 2.	UNREGISTERED SALE OF EQUITY SECURITIES AND USE OF PROCEEDS	16

Item 3.	DEFAULTS UPON SENIOR SECURITIES	16

Item 4.	MINE SAFETY DISCLOSURES	16

Item 5.	OTHER INFORMATION	16

Item 6.	EXHIBITS	17

PART I. FINANCIAL STATEMENTS

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN US$)

	June 30, 2021			March 31, 2021
	(UNAUDITED)
ASSETS
Current assets:
Cash	$	66,894		$	49,826
Accounts receivable, net allowance for doubtful accounts		5,403			32,227
Investment - trading securities		1,557,222			1,334,425
Investment - other		224,106			224,106
Inventory asset		222,901			201,372
Prepaid inventory		417,710			423,200
Prepaid expenses and other current assets		174,367			131,411
Total current assets		2,668,603			2,396,567

Lease right of use asset		60,588			64,301
Assets held for resale		11,084			11,084
Property and equipment, net		13,076			12,063
Leasehold improvements, net of amortization		4,375			4,688

Total assets	$	2,757,726		$	2,488,703

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Notes payable, net of discounts	$	1,004,615		$	504,819
Accounts payable		164,982			390,947
Accrued interest		30,587			14,722
Accrued expenses		28,678			68,442
Liability for common stock to be issued		100,000			174,000
Lease liability - current portion		14,747			14,426
Deferred revenue		38,556			-
Total current liabilities		1,382,165			1,167,356

Lease liability - net of current portion		46,291			50,100
Contingent liability		75,000			-
Total liabilities		1,503,456			1,271,247

Stockholders’ equity (deficit):
Common stock, par value $0.00001; 400,000,000 shares authorized, 285,696,214 and 275,858,714 outstanding at June 30, 2021 and March 31, 2021, respectively		2,858			2,760
Additional paid-in capital		64,232,854			63,417,565
Accumulated deficit		(62,981,442	)		(62,149,078	)
Accumulated other comprehensive income		-			-
Total stockholders’ equity (deficit)		1,254,270			1,271,247

Total liabilities and stockholders’ equity (deficit)	$	2,757,726		$	2,488,703

The accompanying notes are an integral part of the condensed consolidated financial statements.

F-1

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(IN US$)

	2021			2020
	For the Three Months Ended
	June 30,
	2021			2020

Gross revenue	$	45,940		$	84,501
Sales Discounts		(12,207	)		(19,434	)
Sales returns		(366	)		(263	)
Net Revenue		33,367			64,804

Cost of goods sold		15,203			45,531

Gross profit		18,164			19,273

Operating expenses
Marketing and advertising		96,279			33,066
Research and development		13,439			1,817
Fulfilment services		40,458			20,450
General and administrative		842,808			564,023
Depreciation and amortization expense		1,245			219
Total operating expenses		994,229			619,575

Loss from operations		(976,065	)		(600,302	)

Other income (expense)
Interest expense		(435,811	)		(319,622	)
Unrealized gain (loss) on trading securities		(246,166	)		20,033
Gain (Loss) on conversion of debt		-			(45,770	)
Gain on sale of trading securities		825,678			-
Total other income (expense)		143,701			(345,359	)

LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(832,364	)		(945,661	)

PROVISION FOR INCOME TAXES		-

Net loss		(832,364	)		(945,661	)

Net loss attributable to common shareholders	$	(832,364	)	$	(945,661	)
Loss per share - basic and diluted - Continuing operations	$	(0.003	)	$	(0.007	)
Weighted average number of shares outstanding - basic and fully diluted		277,978,907			128,867,481

The accompanying notes are an integral part of the condensed consolidated financial statements.

F-2

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2021

(UNAUDITED)

	shares		Amount		capital			deficit			deficit
					Additional						Total
	Number of				paid-in			Accumulated			stockholders’
	shares		Amount		capital			deficit			deficit
Balance at March 31, 2021		275,858,714	$	2,760	$	63,417,565		$	(62,149,078	)	$	1,271,247

Issuance of shares via private placement at $0.024 to $0.09 per share		2,300,000		23		173,977			-			174,000
Issuance of commitment shares - debt financing at $0.028 to $0.092 per share		1,800,000		18		200,982			-			201,000
Shares issued for note conversion at $0.01869 to $0.02128 per share
Shares issued for note conversion at $0.01869 to $0.02128 per share, shares
Stock-based compensation vesting		-		-		62,387			-			62,387
Stock issued for services at $0.0306 to $0.05		5,737,500		57		(57.00	)		-			-
Issuanance of unrestricted shares - Tangiers Investment agreement at $0.02614 to $0.02754
Issuance of unrestricted shares - Tangiers Investment agreement at $0.02614 to $0.02754, shares
Recognition of beneficial conversion feature of convertible notes		-		-		378,000			-			378,000
Net loss for the year ended June 30, 2021		-		-		-			(832,364	)		(832,364	)
Balance at June 30, 2021		285,696,214		2,858		64,232,854			(62,981,442	)		1,254,270

The accompanying notes are an integral part of the condensed consolidated financial statements.

TAURIGA SCIENCES, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED JUNE 30, 2020

(UNAUDITED)

	shares		Amount		capital			deficit			deficit
Balance at March 31, 2020		107,039,107		1,070		58,213,365			(58,522,632	)		(308,197	)
Issuance of shares via private placement at $0.025 to $0.035 per share		6,000,000		60		190,940			-			191,000
Issuance of shares via private placement		6,000,000		60		190,940			-			191,000
Issuances of commitment shares - debt financing at $0.03 to $0.0322 per share		525,000		5		16,570			-			16,575
Issuances of commitment shares - debt financing		525,000		5		16,570			-			16,575
Shares issued for note conversion at $0.01869 to $0.02128 per share		20,009,621		200		397,863			-			398,063
Stock-based compensation vesting		-		-		245,849			-			245,849
Stock issued for services at $0.31 to $0.32		6,000,000		60		(60	)		-			-
Stock issued for services		6,000,000		60		(60	)		-			-
Issuance of unrestricted shares - Tangiers Investment agreement at $0.02614 to $0.02754		5,750,000		58		154,360			-			154,418
Recognition of beneficial conversion feature of convertible notes		-		-		182,206			-			182,206
Net loss for the three months ended June 30, 2020		-		-		-			(945,661	)		(945,661	)

Balance at June 30, 2020		145,323,728	$	1,453	$	59,401,093		$	(59,468,293	)	$	(65,747	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

F-3

TAURIGA SCIENCES, INC. AND SUBSDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US$)

	2021			2020
	For the Three Months Ended
	June 30,
	2021			2020
Cash flows from operating activities
Net loss attributable to controlling interest	$	(832,364	)	$	(945,661	)
Adjustments to reconcile net loss to cash used in operating activities:
Bad debt expense		1,109			18,008
Amortization of original issue discount		22,456			26,183
Non-cash lease operating lease expense		225			92
Depreciation and amortization		1,245			219
Non-cash interest		201,000			16,574
Amortization of debt discount		177,639			253,201
Common stock issued and issuable for services (including stock-based compensation)		62,387			245,851
Gain on disposal of discontinued operation		-			-
Legal fees deducted from proceeds of notes payable		-			6,700
(Gain) loss on the sale of trading securities		(825,678	)		-
Unrealized loss (gain) on trading securities		246,166			(20,033	)
(Increase) decrease in assets					-
Prepaid expenses		(42,956	)		4,025
Inventory (including inventory not received)		(16,039	)		(103,697	)
Investments in trading securities		(1,079,961	)		-
Proceeds from sale of trading securities		1,436,676			-
Accounts receivable		25,715			(15,952	)
Increase (decrease) in liabilities					-
Accounts payable		(225,965	)		44,717
Deferred revenue		38,556			292
Accrued expenses		35,236			5,353
Accrued interest		15,865			20,653
Cash used in operating activities		(758,688	)		(443,475	)

Cash flows from investing activities
Investment - other		-			(183,443	)
Purchase of property and equipment		(1,945	)		-
Cash used in investing activities		(1,945	)		(183,443	)

Cash flows from financing activities
Repayment of principal on notes payable to individuals and companies		(112,299	)		(100,000	)
Proceeds from the sale of common stock (including to be issued)		100,000			75,000
Proceeds from notes payable to individuals and companies		790,000			-
Proceeds from sale of registered shares - Tangiers Investment Agreement		-			154,418
Proceeds from convertible notes		-			492,800
Cash provided by financing activities		777,701			622,218
Net decrease in cash		17,068			(4,700	)

Cash, beginning of year		49,826			5,348
Cash, end of year	$	66,894		$	648

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid	$	18,843		$	50,000
Taxes Paid	$	-		$	-

NON-CASH ITEMS
Conversion of notes payable and accrued interest for common stock	$	-		$	398,062
Original issue discount on notes payable and debentures	$	48,000		$	-
Recognition of debt discount	$	378,000		$	182,206

F-4

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN AND GOING CONCERN

NATURE OF BUSINESS

The unaudited condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The condensed consolidated financial statements and notes are presented as permitted on Form 10-Q and do not contain certain information included in the Company’s annual statements and notes. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these condensed consolidated financial statements be read in conjunction with the March 31, 2021 Form 10-K filed with the SEC, including the audited consolidated financial statements and the accompanying notes thereto. While management believes the procedures followed in preparing these condensed consolidated financial statements are reasonable, the accuracy of the amounts is in some respects dependent upon the facts that will exist, and procedures that will be accomplished by the Company later in the year.

These condensed consolidated financial statements reflect all adjustments, including normal recurring adjustments which, in the opinion of management, are necessary to present fairly the operations and cash flows for the periods presented.

Tauriga Sciences, Inc. (the “Company”) is a Florida corporation, with its principal place of business located at 4 Nancy Court, Suite 4, Wappingers Falls, NY 12590. The Company has, over time, moved into a diversified life sciences technology and consumer products company, with its mission to operate a revenue generating business, while continuing to evaluate potential acquisition candidates operating in the life sciences technology and consumer products spaces.

Tauriga Pharma Corp.

On January 4, 2018, the Company announced the formation of a wholly owned subsidiary in Delaware initially named Tauriga IP Acquisition Corp., which changed its name to Tauriga Biz Dev Corp. on March 25, 2018.

Effective January 2020, the Company amended the certificate of incorporation of Tauriga Business Development Corp. in relevant part to effectuate a name change of this subsidiary to Tauriga Pharma Corp. The principal reason for the name change is to concentrate this subsidiary’s focus on the development of a pharmaceutical product line that is synergistic with the Company’s primary CBD product line. Currently, the plan is to initially create a pharmaceutical line of products to address nausea symptoms related to chemotherapy treatment in patients, which we will submit for clinical trials and to regulatory agencies for approval.

On March 18, 2020, the Company filed a Provisional U.S. Patent Application covering its pharmaceutical grade version of Tauri-Gum™. This patent application, filed with the United States Patent & Trademark Office (“U.S.P.T.O.”), titled: “MEDICATED CBD COMPOSITIONS, METHODS OF MANUFACTURING, AND METHODS OF TREATMENT.” The Company’s proposed pharmaceutical grade version of Tauri-Gum™ is being developed for nausea regulation, intended specifically to target patients subjected to ongoing chemotherapy treatment(s) (the “Indication”). The delivery system for this pharmaceutical product is an improved version of the existing “Tauri-Gum™” chewing gum formulation based on continued research and development. The Company converted this provisional patent application into a U.S. Non-Provisional Patent Application March 17, 2021.

On March 17, 2021, the Company converted its U.S. Provisional Patent Application (filed on March 17, 2020) to a U.S. Non-Provisional Patent Application. This non-provisional patent application relates to the Company’s proposed pharmaceutical cannabinoid chewing gum delivery system for treatment of nausea derived from active chemotherapy treatment.

Also on March 17, 2021, the Company filed an additional U.S. Provisional Patent Application relating to alternative pharmaceutical cannabinoid delivery systems.

On March 17, 2021, the Company filed an International Patent Application under the Patent Cooperation Treaty (“PCT”), a cooperative agreement entered into by more than 130 countries with the purpose of bringing international conformity to the filing and preliminary evaluation of patent applications. This application relates to the Company’s proposed pharmaceutical cannabinoid chewing gum delivery system being developed to treat nausea derived from active chemotherapy treatment.

The PCT application is published by the International Bureau at the World Intellectual Property Organization (“WIPO”), based in Geneva, Switzerland, in one of the ten “languages of publication”: Arabic, Chinese, English, French, German, Japanese, Korean, Portuguese, Russian, and Spanish.

F-5

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

NATURE OF BUSINESS (CONTINUED)

Tauriga Pharma Corp. (Continued)

Currently, the pharmaceutical grade version of Tauri-Gum^TM is in the pre-IND stage of development. The development team is working on several parallel workstreams, including:

●	formulation development;

●	non-clinical in vivo and in vitro studies to inform the effective clinical dose and safety margin;

●	regulatory strategy and regulatory documentation preparation;

●	confirmation of the active pharmaceutical ingredient (API); and

●	Identifying pharma-grade API suppliers.

Tauriga Sciences Limited

On June 10, 2019, the Company formed a wholly owned subsidiary, Tauriga Sciences Limited, with the Registrar of Companies for Northern Ireland. Tauriga Sciences Limited is a private limited Company. The entity was established in conjunction with e-commerce merchant services. In conjunction to this new entity the Company entered into a two-year lease commencing on June 11, 2019. The office is located at Regus World Trade Centre Muelle de Barcelona, edif. Sur, 2a Planta Barcelona Cataluña 08039 Spain. The Company terminated this lease during October 2020. The Company no longer maintains an office in this region.

Chief Medical Officer

On July 15, 2020, the Company appointed Dr. Keith Aqua (“Dr. Aqua”) as an independent contractor to the position of Chief Medical Officer (“CMO”) and entered into a consulting agreement with Dr. Aqua which carries a term of 12 months from inception, expiring on July 15, 2021. In his CMO capacity, Dr. Aqua assisted the Company in the development of the Company’s proposed pharmaceutical grade version of Tauri-Gum™. In addition, Dr. Aqua helped to establish a distribution network for the Company to market its Tauri-Gum™ brand to a variety of physicians and medical practices in southern Florida. In consideration of the services provided by Dr. Aqua, and pursuant to the terms of the Agreement, the Company issued Dr. Aqua (i) upon entry into the Agreement 750,000 shares of restricted common stock, (ii) 750,000 shares of restricted common stock which were issued in equal monthly instalments of 62,500 shares beginning August 15, 2020 thru the expiration date, and (iii) agreed to $4,000 cash per quarter during the term of the Agreement, payable following the completion of each such quarter. As of June 30, 2021, the Company issued 1,375,000 restricted shares of its common stock to Dr. Aqua valued at $54,313 ($0.0395 per share). Subsequent to June 30, 2021, Dr. Aqua was issued 125,000 restricted shares of its common stock valued at $4,938 ($0.0395 per share). As of this report date, the Company is current negotiating the renewal of this agreement.

NFTauriga Corp.

Effective April 14, 2021, the Company formed NFTauriga Corp. in the State of Nevada, as a wholly owned subsidiary. The Company is the sole holder of total authorized 100 shares having a par value of $0.00001. The Company’s Chief Executive Officer, Seth M. Shaw is the initial sole member of the board of directors, to serve until a qualified successor is duly elected. Mr. Shaw will also serve as the Chief Executive Officer and Secretary. The registered office of NFTauriga Corp. in the State of Delaware shall be at 1013 Centre Road, Suite 403-B, Wilmington, DE 19805 in the County of New Castle. The name of its registered agent at such address is Vcorp Services, LLC. NFTauriga Corp. will have the same fiscal year and principal executive office and the Company.

Master Services Agreement

On December 16, 2020, the Company entered into a Master Services Agreement with North Carolina based Clinical Strategies & Tactics, Inc. (“CSTI”) to resume the clinical development of its proposed anti-nausea pharmaceutical grade version of Tauri-Gum™. CSTI will primarily focus its efforts on (i) Pharmaceutical Development Strategy, (ii) Commercialization Strategy, and (iii) Funding Strategy. The Company will with work with CSTI’s founder and chief executive officer, JoAnn C. Giannone. Ms. Giannone has over 25 years’ experience effectively leading companies through the drug and medical device development process. On December 23, 2020, the Company funded the initial consulting fees associated with this Agreement, in the amount of $67,500, exclusive of out-of-pocket reimbursable expenses. The Company has paid additional fees, effected through change orders to the original contract, in the amount of $85,000. These additional fees were for pharmaceutical testing and market research. Under the terms of the Agreement and related statement of work, CTSI will provide a high-level assessment and documentation of the development efforts required to commercialize the proposed pharmaceutical product globally, a commercial assessment, and a review of potential funding strategies and funding sources and potential business partners. The delivery system for this proposed pharmaceutical version is a modified version (with higher concentration of CBD) of the existing Tauri-Gum™” chewing gum formulation based on continued research and development. As of June 30, 2021, $31,059 of contract payments were recorded as prepaid expense for services yet to be rendered.

F-6

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

COMPANY PRODUCTS

Tauri-Gum^TM

In late December 2018, the Company entered into a “Manufacturing Agreement” with Maryland based chewing gum manufacturer, Per Os Biosciences LLC (“Per Os Bio”) to launch a white label line of CBD infused chewing gum under the brand name Tauri-Gum^TM.

The Manufacturing Agreement with Per Os Bio to produce Tauri-Gum^TM initially consisted of 10mg of CBD isolate for its inaugural mint flavor. This proprietary CBD Gum will be manufactured under U.S. Patent # 9,744,128 (“Method for manufacturing medicated chewing gum without cooling”). Each production batch is tested by a 3rd Party for CBD label content, THC content (0%), and clear for microbiology. The retail packaging consists of an 8-piece blister card labeled with lot number and expiration date.

In October 2019, we also filed trademark applications for the above-referenced marks in each of the European Union and Canada. The Company received notice of allowance from the European Union Intellectual Property Office granting the Company its trademark registration for Tauri-Gum™ (E.U. Trademark # 018138334) on February 18, 2020.

During fiscal year 2020, the Company commenced development of a cannabigerol “CBG” isolate infused version of Tauri-Gum™ introducing Peach-Lemon flavor (containing 10mg CBG per piece) and Black Currant Flavor (containing 15mg of CBG per piece).

During fiscal year 2021, the Company developed an Immune Booster version of Tauri-Gum™ chewing gum. This product contains 60mg of Vitamin C and 10mg of Elemental Zinc per piece. This product does not contain any phytocannabinoids (i.e., CBD or CBG).

During late fiscal year 2021, the Company enhanced its original Tauri-Gum™ formulation by increasing the infusion concentrations of both its Cannabidiol (“CBD”) and Cannabigerol (“CBG”) Tauri-Gum™ products to 25mg per piece of chewing gum (previous concentration was 10mg for the Pomegranate, Blood Orange, Mint, and Peach-Lemon flavors and 15mg for the Black Currant flavor). Additionally, the Company increased its Tauri-Gum™ product offerings to 9 SKUs. The new offerings being introduced are Cherry-Lime Rickey flavored Caffeine infused chewing gum, an 8-piece blister pack of containing 50mg of caffeine per piece and Golden Raspberry flavored Vitamin D3 infused chewing gum, containing 2,000 IU (50 micrograms) of Vitamin D3 per piece. Through its October 2020 partnership with Think Big LLC (the Company founded by the son of late iconic U.S. rap artist, NOTORIOUS BIG aka “Frank White”), the Company is also offering 2 limited edition Licensed Tauri-Gum™/Frank White products: Honey-Lemon flavored chewing gum (containing: 15mg CBD, 15mg CBG, 5mg Vitamin C, 10mg Zinc per piece) and Mint flavor (25mg CBD per piece).

Delta 8 Version of Tauri-Gum™

During March 2021, the Company developed a Delta-8-Tetrahydrocannabinol (“Delta-8-THC” or “Delta-8”) infused version of Tauri-Gum™. The Company is focused on expanding both its product offerings and revenue opportunities, in a manner that is ethical, innovative, and fully compliant with Federal laws & regulations. Due to strong indications of demand, the Company has completed a double production run of its Evergreen Mint flavor, Delta 8 THC infused (10mg per piece of chewing gum), Version of Tauri-Gum™.

All of the CBD/CBG Tauri-Gum^TM skus are made in the USA, formulations are allergen free, gluten free, vegan, kosher certified (K-Star), Halal certified (Etimad), non-GMO, vegan incorporated by a proprietary lab-tested manufacturing process.

See our “Risk Factors” contained in our Annual Report dated March 31, 2021 filed with the Securities and Exchange Commission on June 29, 2021, including with respect, but not limited, to Federal laws and regulations that govern CBD and cannabis.

F-7

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

COMPANY PRODUCTS (CONTINUED)

Tauri-Gummies™

On November 25, 2019, the Company announced that it has finalized the formulation for its Vegan 25 mg CBD (Isolate) Infused Gummies product to be branded Tauri-Gummies™ for which a trademark was filed in Switzerland and the European Union. The company has received a Notice of Allowance from the European Union Intellectual Property Office (“E.U.I.P.O.”) granting the Company its trademark Registration for: Tauri-Gummies™ (E.U. Trademark # 018138348), effective June 24, 2020. This Notice of Allowance extends our protective period for this mark until October 2029 and may be extended thereafter for ten-year intervals.

This gelatin free, plant-based, Vegan and Kosher certified formulation contains 24 gummies per jar, 6 of each flavor (cherry, orange, lemon and lime). Each gummy contains 25mg of CBD isolate (600 mg of CBD isolate per jar). These gum drops have been manufactured in the “Nostalgic” 1950s confectionary style. The Company commenced sales of Tauri-Gummies™ in January 2020.

Other Products

The Company, from time to time, will offer various formats of CBD product through its e-commerce website. As of this report date the Company is currently offering a 70% dark chocolate 30mg CBD non-GMO dietary supplement and 100mg CBD scented bath bombs (Mint, Pomegranate, Blood Orange, Black Currant). The Company also offers 100mg CDG infused Peach/Lemon bath bombs as well as a D3 infused Golden Raspberry and Cherry Lime Rickey caffeine infused bath bombs. The Company’s current offering includes a line of skin care products sold on its ecommerce website under the product line name of Uncle Bud’s. The skin care products include three different 4.2mg CBD facemasks (collagen, detoxifying and tightening masks), 100mg CBD daily moisturizer, 30mg CBD anti-wrinkle dream, hand and foot cream with hemp seed oil, 120mg CBD massage and body oil, 240mg CBD body revive roll-on, 35mg CBD transdermal patch and 120mg CBD body spray. The Company also offers Tauri-Pet dog food in three flavors (peanut butter, butternut squash and crispy apple. Additionally, on December 1, 2020, the Company announced the commencement of development of a Caffeine infused version of Tauri-Gum™. When production run is complete, this will represent the 7th SKU of the Tauri-Gum™ product line.

For a full list of our currently available products please visit our e-Commerce website at https://taurigum.com/.

DISTRIBUTION OF THE COMPANY’S PRODUCTS

Think BIG, LLC License Agreement

On September 24, 2020, we entered into (i) a License Agreement (“License”) with Think BIG, LLC, a Los Angeles based company (“Think BIG”), (ii) a Professional Services Agreement (the “PSA”) with Willie C. Mack, Jr., CEO of Think BIG and (iii) a Professional Services Agreement (“PSA 2”) with Christopher J. Wallace, a co-founder of Think BIG (each of Willie C. Mack, Jr. and Christopher J. Wallace referred to herein as a “Brand Ambassador”), with the collective intent to enhance sales and marketing of the Company’s product lines, including its proprietary Rainbow Deluxe Sampler Pack (“Rainbow Pack”), and any co-branded products created by the parties to the License and each of the PSAs (the “Co-Branded Products”).

The term of this license is for a period of two years from September 24, 2020 (the “Effective Date”), unless earlier terminated by either party pursuant to the terms thereunder. The term of each of the PSA and the PSA 2 shall commence on the Effective Date and end on the earlier of (i) the two-year anniversary thereof; (ii) the termination for any reason of the License; or (iii) the earlier termination of the PSA Agreement pursuant to the terms thereunder.

The licensing arrangement permits for cross licensing, brand building, e-commerce customer acquisition efforts, retail customer acquisition efforts, enhanced social media presence, public relations & visibility strategies, as well as potential outreach to celebrities, and various other types of in-kind services in order to increase both Company revenue and customer acquisition efforts. The License will also allow for future joint development projects that will leverage the iconic “Frank White” brand and likeness/intellectual property (to which Think Big has the intellectual property rights). The Companies further agreed to a 50/50 gross profit split on sales of specially branded product, payable on or before the 15th day of each calendar month for the immediately preceding calendar month. In addition, the Company originally agreed to pay Think BIG, via a quarterly marketing fee for a period of twelve months in the amount $15,000 per quarter (for an aggregate total of $60,000), the first payment of which was paid by the Company within 10 days of the entry into the License. Subsequently, the parties agreed that the remaining payments would no longer be paid to Think BIG in exchange for the Company funding specially branded inventory printing and product as well as other marketing initiatives.

F-8

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

DISTRIBUTION OF THE COMPANY’S PRODUCTS (CONTINUED)

Think BIG, LLC License Agreement (Continued)

Under each of the PSA and the PSA 2, each Brand Ambassador shall provide promotional and marketing services (“Services”) to the Company during the term of the respective PSAs, subject to the terms and conditions set forth therein, in connection with the Co-Branded Products and any co-developed products; and perform their individual marketing and promotional services set forth under the PSA and the PSA 2, respectively, and each of the exhibits annexed thereto.

As consideration for each Brand Ambassador’s Services set forth under their respective PSAs, the Company agreed to issue each Brand Ambassador 1,500,000 restricted shares of the Company’s common stock, upon execution of the PSA and PSA 2. These shares were issued on December 17,2020. In the event that the applicable PSA has not previously been terminated, following the one-year anniversary of the Effective Date, an additional 1,500,000 restricted shares of Company’s common stock shall be issued to each Brand Ambassador, subject to the satisfaction of the terms of such additional services and/or criteria to be mutually agreed upon by the parties to the PSA and/or the PSA 2, as the case may be. In total, all shares issued and to be issued had a value of $183,600 that will be recognized over the term of the contract. As of this report date, the Company has taken delivery on the initial production run for the co-branded gum.

Stock Up Express Agreement

Effective February 1, 2021, the Company entered into a distribution agreement with Connecticut based Stock Up Express, a division of Bozzuto’s Inc., a distributor that generates more than $3 Billion in annual sales. The agreement shall remain in effect for a period of two (2) years, with automatic renewal for additional successive one (1) year terms. Under terms of this distribution agreement, Stock Up Express will market and resell the Company’s flagship brand, Tauri-Gum™, to its customer base of wholesale and retail customers in the mainland United States. The two companies will jointly market Tauri-Gum™ to Stock Up Express’ customer base. The Agreement allows for modification of product offerings, and the Company expects to offer additional product items over the course of calendar year 2021. Either party may terminate this Agreement for convenience by giving a sixty (60) day written notice to the other party or either party has the right to terminate this agreement if the other party breaches or is in default of any obligation hereunder, including the failure to make any payment when due, which default is incapable of cure or which, being capable of cure, has not been cured within thirty (30) days after receipt of written notice from the non-defaulting party or within such additional cure period as the non-defaulting party may authorize in writing. As of June 30, 2021, the Company has recognized no sales under this agreement.

The Company has entered into multiple other arrangements that are more fully described in our periodic and current reports that we have filed with the Securities and Exchange Commission and included in those agreements filed by reference as exhibits thereto.

REGULATORY MATTERS

Food and Drug Administration (“FDA”)

On May 31, 2019, the U. S. Food and Drug Administration (“FDA”) held public hearings to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds, including CBD. The hearing came approximately five months after the Agricultural Improvement Act of 2018 (more commonly known as the Farm Bill), went into effect and removed industrial hemp from the Schedule I prohibition under the Controlled Substances Act (CSA) (industrial hemp means cannabis plants and derivatives that contain no more than 0.3 percent tetrahydrocannabinol, or THC, on a dry weight basis).

Though the Farm Bill removed industrial hemp from the Schedule I list, the Farm Bill preserved the regulatory authority of the FDA over cannabis and cannabis-derived compounds used in food and pharmaceutical products under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. The FDA has been clear that it intends to use this authority to regulate cannabis and cannabis-derived products, including CBD, in the same manner as any other food or drug ingredient. In addition to holding the hearing, the agency had requested comments by July 2, 2019 regarding any health and safety risks of CBD use, and how products containing CBD are currently produced and marketed, which comment period was concluded on July 16, 2019. As of the date hereof, the FDA has taken the position that it is unlawful to put into interstate commerce food products containing hemp derived CBD, or to market CBD as, or in, a dietary supplement. Furthermore, since the closure of the FDA hearings on this issue, some state and local agencies have issued a ban on the sale of any food or beverages containing CBD. There have been legislative efforts at the federal level, which seek to provide clear guidance to industry stakeholders regarding how to comply with applicable FDA law with respect to CBD and other hemp derived cannabinoids. However, such legislative efforts have been limited and as of this date, these legislative efforts require extensive further approvals, including approval from both houses of Congress and the President of the United States, before being enacted into law, if at all.

F-9

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

REGULATORY MATTERS (CONTINUED)

Food and Drug Administration (“FDA”) (Continued)

FDA Clinical Trial Process – United States Drug Development

Furthermore, with respect to Company’s developing CBG and additional cannabinoid product lines, the FDA has provided no guidance as to how cannabinoids other than CBD (such as CBG) shall be regulated under the FD&C Act, and it is unclear at this time how such potential regulation could affect the results of the operations or prospects of the Company or this product line.

In the United States, the FDA regulates drugs, medical devices and combinations of drugs and devices, or combination products, under the FDCA and its implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. These sanctions could include, among other actions, the FDA’s refusal to approve pending applications, withdrawal of an approval, a clinical hold, untitled or warning letters, requests for voluntary product recalls or withdrawals from the market, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement, or civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

● completion of extensive pre-clinical in vitro and animal studies to evaluate safety and pharmacodynamic effects, formulation development, analytical method development, and manufacturing of the active pharmaceutical ingredient (API) and drug product for clinical trials in accordance with applicable regulations, including the FDA’s Current Good Laboratory Practice (cGLP) regulations and Current Good Manufacturing Practice (cGMP) regulations;

● submission to the FDA of an Investigational New Drug (IND) application, which must become effective before human clinical trials may begin;

● performance of adequate and well-controlled human clinical trials in accordance with an applicable IND and other clinical study related regulations, sometimes referred to as Current Good Clinical Practice (cGCPs), to establish the safety and efficacy of the proposed drug for its proposed indication, and API and drug product scale-up for registration batch production and stability;

● submission to the FDA of a New Drug Application (NDA);

● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with the FDA’s cGMP requirements;

● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and

● FDA review and approval of the NDA prior to any commercial marketing or sale.

Once a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests include laboratory evaluations of product characterization, drug product formulation development and stability, as well as pharmacology and toxicology animal studies. An IND Sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose.

F-10

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

REGULATORY MATTERS (CONTINUED)

FDA Clinical Trial Process – United States Drug Development (Continued)

All clinical trials must be conducted under the supervision of one or more qualified investigators in accordance with GCP regulations. These regulations include the requirement that all research subjects provide informed consent in writing before their participation in any clinical trial. Further, an IRB must review and approve the plan for any clinical trial before it commences at any institution, and the IRB must conduct continuing review and reapprove the study at least annually. An IRB considers, among other things, whether the risks to individuals participating in the clinical trial are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the information regarding the clinical trial and the consent form that must be provided to each clinical trial subject or his or her legal Representative and must monitor the clinical trial until completed.

Each new clinical protocol and any amendments to the protocol must be submitted for FDA review, and to the IRBs for approval. Protocols detail, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined. The phases are described below. For the TAUG Pharma product, however, the safety profile of the API is known, and a Phase 1 program is not expected. Therefore, it is anticipated that that the first-time-in-human (FTIH) study will be a Phase 2 study.

● Phase 1. The product is initially introduced into a small number of healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain early evidence on effectiveness. In the case of some products for severe or life-threatening diseases, especially when the product is suspected or known to be unavoidably toxic, the initial human testing may be conducted in patients.

● Phase 2. Involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage and schedule.

● Phase 3. Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit relationship of the product and provide an adequate basis for product labeling.

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 trials. Companies that conduct certain clinical trials also are required to register them and post the results of completed clinical trials on a government-sponsored database, such as ClinicalTrials.gov in the United States, within certain timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.

Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events, findings from other studies that suggest a significant risk to humans exposed to the product, findings from animal or in vitro testing that suggest a significant risk to human subjects, and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or Investigator Brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the clinical trial Sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated check points based on access to certain data from the study. The clinical trial Sponsor may also suspend or terminate a clinical trial based on evolving business objectives and/or competitive climate.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested. Stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

F-11

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

REGULATORY MATTERS (CONTINUED)

NDA and FDA Review Process

The results of product development, pre-clinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug, proposed labeling and other relevant information, are submitted to the FDA as part of an NDA for a new drug, requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial user fee, and the sponsor of an approved NDA is also subject to an annual program user fee; although a waiver of such fee may be obtained under certain limited circumstances. For example, the agency will waive the application fee for the first human drug application that a small business or its affiliate submits for review.

The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA typically decides on accepting an NDA for filing within 60 days of receipt. The decision to accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and may go through multiple review cycles.

After the NDA submission is accepted for filing, the FDA reviews the NDA to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMPs to assure and preserve the product’s identity, strength, quality and purity. The FDA may refer applications for novel drug products or drug products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of an NDA by the FDA is extensive and time consuming and may take longer than originally planned to complete, and we may not receive a timely approval, if at all.

Before approving an NDA, the FDA will conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMPs. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. In addition, before approving an NDA, the FDA may also audit data from clinical trials to ensure compliance with GCP requirements. After the FDA evaluates the application, manufacturing process and manufacturing facilities, it may issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter usually describes all the specific deficiencies in the NDA identified by the FDA. The Complete Response Letter may require additional clinical data and/or an additional pivotal Phase 3 clinical trial(s), and/or other significant and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant may either resubmit the NDA, addressing all the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive, and the FDA may interpret data differently than the Sponsor interprets the same data.

New York State Department of Health

The New York State Department of Health (NYDPH) has begun implementing regulations concerning the processing and retail sale of hemp derived cannabinoids. Under the regulations, “cannabinoid” is broadly defined as “any phytocannabinoid found in hemp, including but not limited to, Tetrahydrocannabinol (THC), tetrahydrocannabinolic acid (THCA), cannabidiol (CBD), cannabidiolic acid (CBDA), cannabinol (CBN), cannabigerol (CBG), cannabichromene (CBC), cannabicyclol (CBL), cannabivarin (CBV), tetrahydrocannabivarin (THCV), cannabidivarin (CBDV), cannabichromevarin (CBCV), cannabigerovarin (CBGV), cannabigerol monomethyl ether (CBGM), cannabielsoin (CBE), cannabicitran (CBT). Cannabinoids do not include synthetic cannabinoids as that term is defined [under New York law].”

F-12

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

REGULATORY MATTERS

New York State Department of Health (Continued)

These regulations came into effect on January 1, 2021, and all “cannabinoid hemp processors” and “cannabinoid hemp retailers” operating within the state of New York must be licensed by the NYDPH. The regulations expressly allow for food and beverages to contain “cannabinoids”, so long as such products meet certain requirements. To this end, the Company has submitted its license application with the NYDPH in compliance with this legislation. These regulations are evolving and the NYDPH recently issued a set of regulations to address the use of industrial hemp derived Δ8- Tetrahydrocannabinol (Δ8 THC) and Δ10- Tetrahydrocannabinol (Δ10 THC) in cannabinoid hemp products manufactured and sold in New York.

The product requirements under the current regulations, include but are not limited to: the product must not contain more than 0.3% total Δ9- Tetrahydrocannabinol concentration; the product must not contain tobacco or alcohol; the product must not be in the form of an injectable, transdermal patch, inhaler, suppository, flower product including cigarette, cigar or pre-roll, or any other disallowed form as determined by the NYDPH; if the product is sold as a food or beverage product, it must not have more than 25mg of cannabinoids per product; and, if sold as an inhalable cannabinoid hemp product, the product will be subject to a number of additional safety measures.

Furthermore, all cannabinoid products sold at retail are subject to a series of labeling requirements. All such products must be labeled with the amount of cannabinoids in the product and the amount of milligrams per serving. If the product contains THC, the amount of THC in the product needs to be stated on the label in milligrams on a per serving and per package basis. In addition, all products are required to have a scannable bar code or QR code which links to a certificate of analysis and the packaging is prohibited from being attractive to consumers under 18 years of age. Products are also required to list appropriate warnings for consumer awareness. The Company’s entire product line will comply with the above standards.

See our Risk Factors and going concern opinion in this report for more information about these items, as well as certain related disclosures included our Results of Operations under the heading “Going Concern”.

The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding, success in developing and marketing its products and the level of competition and potential regulatory enforcement actions. These risks and others are described in greater detail in the Risk Factors set forth in this periodic report and our annual reports that we have filed and will also file in the future.

OTHER BUSINESS ITEMS

Strategic Marketing and Consulting Agreement with Mayer & Associates

On June 14, 2021, the Company entered into a 12-month Strategic Marketing and Consulting Agreement with Mayer & Associates. Under this agreement the Company will pay $150,000 along with the issuance of 3,500,000 shares of restricted common shares of Company stock. Half of the cash payment ($75,000) was paid upon execution of this agreement and the other half will be paid 90 days thereafter. Upon execution, the Company issued 2,200,000 of the above-mentioned shares. The remaining 1,300,000 above-mentioned shares will be issued 90 days after this contract was executed. Mayer and Associates will provide the Company with opportunities relating to the world of professional sports, with respect to its products and product lines. This includes, but is not limited to, introductions to professional sports leagues, celebrity (professional athletes) influencers/brand ambassadors/brand liaison(s), research and development opportunities, hosting of small periodic events for the Company and a diversified group of high-profile contacts and relationships, use social media exposure, podcasts backing of various elements from professional sports as well as assist the Company in advising of potential merger partners and developing corporate partnering relationships. The Company, at the sole discretion of its board, may pay an additional payment of $75,000 as permitted under this agreement based on performance. This additional payment will be recorded as a contingent liability on the Company condensed consolidated balance sheet until formally authorized by the Company’s board of directors. This agreement is terminable after six months. As of the date of this quarterly report date, the aforementioned shares have been issued.

F-13

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 1 – BASIS OF OPERATIONS AND GOING CONCERN (CONTINUED)

GOING CONCERN

During the fourth quarter of the year ended March 31, 2019, the Company began sales and marketing efforts for its Mint flavored Tauri-Gum^TMproduct. During the year ended March 31, 2021, the Company recognized net sales of $285,319 and a gross profit of $122,692. During the three months ended June 30, 2021, the Company recognized net sales of $45,940 and a gross profit of $18,164. At June 30, 2021, the Company had a working capital surplus of $1,286,438 compared to a working capital surplus $1,229,211 for the year ended March 31, 2021. The current position is largely resultant from increased inventory levels and an increase in value of trading securities. Although the Company has a working capital surplus, there is no guarantee that this will continue therefore it still believes that there is uncertainty with respect to continuing as a going concern.

On July 1, 2019, months after the NYC Department of Heath announced a ban on cannabidiol in foods and beverages (mainly focused on restaurants and baked goods), the result of which was that the updated New York City Health Code now includes an embargoing of CBD-infused Edible(s) Products (including packaged products). The Company is hopeful that due to the recent regulatory regime for cannabinoid products implemented by the NYDPH, the New York City Council will remove the current CBD ban and implement regulations surrounding CBD products in a logical and prompt manner. The Company believes it is well positioned under the current regulatory structure, and has taken a conservative approach towards its products, including, for example, ensuring that its product manufacturer periodically tests for compliance with the Agricultural Improvement Act of 2018, such as utilizing CBD oils from hemp plants which contain 0.3% or less THC content. Subsequent to the balance sheet date, the State of New York has determined that it is allowable to sell CBD Infused Edible products in the forms of both food and drink (inclusive of chewing gum). It was also determined that no time can CBD be sold in products that contain either alcohol or tobacco. Additionally, the State of New York also said that NO CBD product may be sold if it contains more than 0.3% (1/333rd by Composition) THC. No Individual food or beverage product may contain more than 25mg of Hemp-Extracted Cannabinoids (“CBD” or “CBG”) per serving. Food and drink infused with CBD and Other Hemp Extracts must be packaged by the manufacturer and extracts cannot be added at the retail level. The Company’s entire product line will comply with these standards.

The Company, in the short term, intends to continue funding its operations either through cash-on-hand or through financing alternatives. Management’s plans with respect to this include raising capital through equity markets to fund future operations as well as the possible sale of its remaining marketable securities which had a market value of $1,557,222 at June 30, 2021. In the event the Company cannot raise additional capital to fund and/or expand operations or fails to raise adequate capital and generate adequate sales revenue, or if the regulatory landscape were to become more difficult or result in regulatory enforcement, it could result in the Company having to curtail or cease operations.

Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues in the short term, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations to achieve profitability thereby eliminating its reliance on alternative sources of funding. Although management believes that the Company continues to strengthen its financial position over time, there is still no guarantee that profitable operations with sufficient cashflow to sustain operations can or will be achieved without the need of alternative financing, which is limited. These matters still raise significant doubt about the Company’s ability to continue as a going concern as determined by management. The Company believes that there is uncertainty with respect to continuing as a going concern until the operating business can achieve sufficient sales to maintain profitable operations and sustain cash flow to operate the Company for a period of twelve months. In the event the Company does need to raise additional capital to fund operations or engage in a transaction, failure to raise adequate capital and generate adequate sales revenues could result in the Company having to curtail or cease operations.

Even if the Company does raise sufficient capital to support its operating expenses, acquire new license agreements or ownership interests in life science companies and generate adequate revenues, or the agreements entered into recently are successful, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern as determined by management. However, the accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

F-14

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

These condensed consolidated financial statements include the accounts and activities of Tauriga Sciences, Inc., its wholly-owned Canadian subsidiary, its wholly-owned subsidiary Tauriga Pharma Corp. (f/k/a Tauriga Biz Dev Corp – or “Tauriga BDC” and referenced herein as Tauriga BDC for contextual purposes only in describing the Blink contractual arrangement), NFTauriga Corp. and Tauriga Sciences Limited. All intercompany transactions have been eliminated in consolidation. As of June 30, 2021, there is no activity in any of the Company’s subsidiaries other than Tauriga Pharma Corp.

SEGMENT INFORMATION

The Company has adopted provisions of ASC 280-10 Segment Reporting for the three months ended June 30, 2021 and 2020. This standard requires that companies disclose operating segments based on the manner in which management disaggregates the Company in making internal operating decisions. The Company and its Chief Operating Decision Makers determined that the Company’s operations consist of two segments: (i) The first division consists of all retail, wholesale and e-commerce product sales of CBD/CBG Tauri-Gum^TM, Tauri-Gummies^TM, and other CBD/CBG products, and (ii) the second segment will be a research and development division that consist of liabilities and results from any activity relative to the progress in the development of the Company’s FDA IND application for Phase II Trial of its proposed pharmaceutical grade version of Tauri-Gum™. The cost basis investment in Aegea has been treated as a non-operating asset and will therefore not be reported as a part of the research and development division.

Results for the three months ended June 30,

SCHEDULE OF SEGMENT INFORMATION

	2021			2020
Revenue, net:
Tauri-gum	$	33,367		$	64,804
Pharma		-			-
Adjustments, eliminations and unallocated items		-			-
Total revenue, net	$	33,367		$	64,804

Cost of Sales					-
Tauri-gum		(15,203	)		(45,531	)
Pharma		-			-
Adjustments, eliminations and unallocated items		-			-
Total cost of sales	$	(15,203	)	$	(45,531	)

General and Administrative expense
Tauri-gum	$	443,696			74,788
Pharma		34,304			-
Adjustments, eliminations and unallocated items		364,808			489,235
Total General and Administrative expense	$	842,808		$	564,023

Research and development
Tauri-gum	$	13,439		$	1,817
Pharma		-			-
Adjustments, eliminations and unallocated items		-			-
Total Research and Development	$	13,439		$	1,817

Marketing and fulfillment expense
Tauri-gum	$	136,737		$	53,516
Pharma		-			-
Adjustments, eliminations and unallocated items		-			-
Total Marketing and fulfillment expense	$	136,737		$	53,516

Depreciation and Amortization expense
Tauri-gum	$	1,245		$	219
Pharma		-			-
Adjustments, eliminations and unallocated items		-			-
Total depreciation expense	$	1,245		$	219
Total depreciation and amortization expense	$	1,245		$	219

Operating Loss
Tauri-gum	$	(576,953	)	$	(111,067	)
Pharma		(34,304	)		-
Adjustments, eliminations and unallocated items		(364,808	)		(489,235	)
Total operating loss	$	(976,065	)	$	(600,302	)

		June 30, 2021		March 31, 2021
Total Assets
Tauri-gum	$	801,360	$	736,044
Pharma		200,189		200,440
Unallocated		1,756,177		1,552,219
Total Assets	$	2,757,726	$	2,488,703

Total Liabilities
Tauri-gum	$	348,161	$	186,568
Pharma		1,008		188,210
Unallocated		1,154,287		842,678
Total liabilities	$	1,503,456	$	1,217,456

F-15

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE RECOGNITION

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principle of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective October 1, 2017, using the full retrospective method. The new standard did not have a material impact on its financial position and results of operations, as it did not change the manner or timing of recognizing revenue.

Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows.

On March 29, 2018 the Company, through Tauriga BDC, entered into an independent sales representative agreement with Blink to be a non-exclusive independent sales representative. Under the agreement with Blink, the Company may solicit orders from potential customers for EV charging station placement. On June 29, 2018, the Company purchased four Blink Level 2 - 40” pedestal chargers for permanent placement in a retail location or locations whereby the Company will pay a variable annual fee based on 7% of total revenue per charging unit. The remainder of the proceeds will be split 80/20 between the Company and the host location owner or its assignee. The host location owner will pay for the cost of providing power to these unit as well as installation costs. As of June 30, 2021, we have not installed any of these machines in any locations, and no revenue has been generated through the Blink contract. The Company has decided to abandon this business line, and therefore, we have reclassified these assets as held for sale.

The Company recognizes revenue upon the satisfaction of the performance obligation. The Company considers the performance obligation met upon shipment of the product or delivery of the product. For ecommerce orders, the Company’s products are shipped by a fulfillment company and payment is made in advance of shipment either through credit card or PayPal. The Company also delivers the product to its customers that they market to in the metropolitan New York Tri-State area that are not covered under any existing distribution agreements. The Company generally collects payment within 30 to 60 days of completion of its performance obligation, and the Company has no agency relationships. The Company recognized net revenue from operations in the amount of $33,367 during the three months ended June 30, 2021 and $285,319 during the year ended March 31, 2021. All revenue is from the sale of the Company’s Tauri-Gum^TMproduct line and there were accounts receivable, net of allowance for doubtful accounts in the amount of $5,403 outstanding for these sales, as of June 30, 2021.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

The Company maintains an allowance for doubtful accounts, which includes sales returns, sales allowances and bad debts. The allowance adjusts the carrying value of trade receivables for the estimate of accounts that will ultimately not be collected. An allowance for doubtful accounts is generally established as trade receivables age beyond their due dates, whether as bad debts or as sales returns and allowances. As past due balances age, higher valuation allowances are established, thereby lowering the net carrying value of receivables. The amount of valuation allowance established for each past-due period reflects the Company’s historical collections experience, including that related to sales returns and allowances, as well as current economic conditions and trends. The Company also qualitatively establishes valuation allowances for specific problem accounts and bankruptcies, and other accounts that the Company deems relevant for specifically identified allowances. The amounts ultimately collected on past-due trade receivables are subject to numerous factors including general economic conditions, the financial condition of individual customers and the terms of reorganization for accounts exiting bankruptcy. Changes in these conditions impact the Company’s collection experience and may result in the recognition of higher or lower valuation allowances. At June 30, 2021, the Company has established an allowance for doubtful accounts in the amount of $94,659.

SALES REFUNDS

The Company’s refund policy allows customers to return product for any reason except where the customer does not like the taste of the product. The customer has 30 days from the date of purchase to initiate the process. Returns are limited to one return or exchange per customer. Only purchases up to $100 qualify for a refund. Approved return/refund requests are typically processed within 1-2 business days. For product purchases made through a Tauri-Gum^TM distributor or retailer, the customer is required to work with original purchase location for any return or exchange. The Company has not established a reserve for returns as of June 30, 2021 however will monitor the refunds to estimate whether a reserve will be required.

F-16

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES

The preparation of these condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

CASH EQUIVALENTS

For purposes of reporting cash flows, cash equivalents include investment instruments purchased with an original maturity of three months or less. At June 30, 2021, the Company’s cash on deposit with financial institutions did not exceed the total FDIC insurance limit of $250,000. At June 30, 2021 and March 31, 2021, the Company had a cash balance of $66,894 and $49,826, respectively. The Company’s does not expect, in the near term, for its cash balance to exceed the total FDIC insurance limit of $250,000 for other than very short periods of time where the Company would use such cash in excess of insurance in the very short-term in operating activities. To reduce its risk associated with the failure of such financial institution, the Company holds its cash deposits in more than one financial institution and evaluates at least annually the rating of the financial institution in which it holds its deposits. The Company had no cash equivalents as of June 30, 2021 and March 31, 2021.

INVESTMENT IN TRADING SECURITIES

Investment in trading securities consist of investments in shares of common stock of companies traded on public markets as well as publicly traded warrants of these companies should there be a market for them. These securities are carried on the Company’s balance sheet at fair value based on the closing price of the shares owned on the last trading day before the balance sheet date of this report. Fluctuations in the underlying bid price of the stocks result in unrealized gains or losses. The Company recognizes these fluctuations in value as other income or loss. For investments sold, the Company recognizes the gains and losses attributable to these investments as realized gains or losses in other income or loss.

INVESTMENT – COST METHOD

Investment in other companies that are not currently trading, are valued based on the cost method as the Company holds less than 20% ownership in these companies and has no influence over operational and financial decisions of the companies. The Company will evaluate, at least annually, whether impairment of these investments is necessary under ASC 320. During the year ended March 31, 2021, the Company has recorded a loss on the impairment on two of its cost method investments in the amount of $244,706. The Company did not record a loss on the impairment on investments for the three months ended June 30, 2021.

INVENTORY

Inventory consists of finished goods in salable condition stated at the lower of cost or market determined by the first-in, first-out method. The inventory consists of packaged and labeled salable inventory. Shipping of product to finished good inventory fulfilment center is also included in the total inventory cost. Shipping of product upon sale for e-commerce sales is paid by the customer upon ordering for orders of single packs of Tauri-Gum^TM. For multiple pack or wholesale product orders shipping cost is paid by the Company. As of June 30, 2021, the Company’s inventory on hand had a value of $222,901 compared to $201,372 at March 31, 2021. The Company has not established any inventory reserve on the Tauri-Gum^TMas of June 30, 2021. As of June 30, 2021, the Company had $423,200 in funds paid for inventory not received. The Company experienced Covid-19 related delays in the current production of Tauri-Gum^TM involving a shortage in packaging materials. As of this report date, the Company has taken delivery on $404,250 of gum inventory.

SHIPPING AND HANDLING COSTS

The Company’s fulfillment handling costs are provided by independent contractors through fixed fee arrangements which may also include incentives. These fees also contain a large degree of consultative, administrative and warehousing services as part of the fixed fee. Management believes that due to these factors it is more representative to include these amounts as general and administrative costs instead of cost of goods sold. For the three months ended June 30, 2021 and 2020, the Company incurred fulfillment costs in the amount of $40,458 and $20,450, respectively.

Shipping cost for the Company consists of product movement to and from trade shows, between office locations, mailing of samples and product shipments. The cost of shipping is typically not charged to the customer when they order more than one product from on the website. Customer shipping of large customers wholesale orders are done on a reimbursement basis therefore any shipping revenue and shipping expense are largely recorded as offsetting gross revenues and cost of goods sold.

F-17

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SHIPPING AND HANDLING COSTS

The Company had net shipping expense:

SCHEDULE OF SHIPPING EXPENSE

	2021			2020
	Three Months Ended June 30,
	2021			2020
Shipping revenue	$	1,010		$	752
Shipping expense		(3,612	)		(6,547	)
Net shipping expense	$	(2,602	)	$	(5,795	)

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost and is depreciated using the straight-line method over the estimated useful lives of the respective assets. Routine maintenance, repairs and replacement costs are expensed as incurred and improvements that extend the useful life of the assets are capitalized. When property and equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is recognized in operations.

NET LOSS PER COMMON SHARE

The Company computes per share amounts in accordance with FASB ASC Topic 260 “Earnings per Share” (“EPS”), which requires presentation of basic and diluted EPS. Basic EPS is computed by dividing the income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods; however, potential common shares are excluded for period in which the Company incurs losses, as their effect is anti-dilutive. For the three months ended June 30, 2021 and 2020, basic and fully diluted earnings per share were the same as the Company had losses in this period.

STOCK-BASED COMPENSATION

The Company accounts for Stock-Based Compensation under ASC 718 “Compensation-Stock Compensation,” which addresses the accounting for transactions in which an entity exchanges its equity instruments for goods or services, with a primary focus on transactions in which an entity obtains employee services in share-based payment transactions. ASC 718-10 requires measurement of cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (with limited exceptions). Incremental compensation costs arising from subsequent modifications of awards after the grant date must be recognized.

The Company accounts for stock-based compensation awards to non-employees in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” Under ASC 505-50, the Company determines the fair value of the warrants or stock-based compensation awards granted on the grant date as either the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. Any stock options or warrants issued to non-employees are recorded in expense and an offset to additional paid-in capital in stockholders’ equity over the applicable service periods using variable accounting through the vesting dates based on the fair value of the options or warrants at the end of each period.

The Company issues stock to consultants for various services. The costs for these transactions are measured at the fair value on the grant date of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The Company recognized consulting expense and a corresponding increase to additional paid-in-capital related to stock issued for services over the term of the related services.

IMPAIRMENT OF LONG-LIVED ASSETS

Long-lived assets, primarily fixed assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. The Company will perform a periodic assessment of assets for impairment in the absence of such information or indicators. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. For long-lived assets to be held and used, the Company would recognize an impairment loss only if its carrying amount is not recoverable through its undiscounted cash flows and measures the impairment loss based on the difference between the carrying amount and estimated fair value.

F-18

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RESEARCH AND DEVELOPMENT

The Company expenses research and development costs as incurred. Research and development costs were $13,439 and $1,817 for the three months ended June 30, 2021 and 2020, respectively. The Company is continually evaluating products and technologies, and incurs expenses relative to these evaluations, including in the natural wellness space, such as Tauri-Gum™ product development of new flavor formulations and other CBD delivery products, as well as development of a Cannabigerol (“CBG”) Isolate Infused version of its Tauri-Gum™ brand. We also incur expenses relative to collaboration agreements and any activity relative to the progress in the development of the Company’s FDA IND application for Phase II Trial of its proposed pharmaceutical grade version of Tauri-Gum™, as well as intellectual property or other related technologies. As the Company investigates and develops relationships in these areas, resultant expenses for trademark filings, license agreements, website and product development and design materials will be expensed as research and development. Some costs will be accumulated for subsidiaries prior to formation of any new entities.

FAIR VALUE MEASUREMENTS

ASC 820 “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosure about fair value measurements.

The following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which fair value is observable:

Level 1- fair value measurements are those derived from quoted prices (unadjusted in active markets for identical assets or liabilities);

Level 2- fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3- fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Financial instruments classified as Level 1 – quoted prices in active markets include cash.

These condensed consolidated financial instruments are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment to estimation. Valuations based on unobservable inputs are highly subjective and require significant judgments. Changes in such judgments could have a material impact on fair value estimates. In addition, since estimates are as of a specific point in time, they are susceptible to material near-term changes. Changes in economic conditions may also dramatically affect the estimated fair values.

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management for the respective periods. The respective carrying value of certain financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments include cash, investments, short-term notes payable, accounts payable and accrued expenses.

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform to the current period presentation. The reclassifications had no effect on the net loss or cash flows of the Company.

SHARE SETTLED DEBT

The general measurement guidance in ASC 480 requires obligations that can be settled in shares with a fixed monetary value at settlement to be carried at fair value unless other accounting guidance specifies another measurement attribute. The Company has determined that ASC 835-30 is the appropriate accounting guidance for the share-settled debt, which is what was done by setting up the debt discount which is to be amortized to interest expense over the term of the instrument. Amortization of discounts are to be amortized using the effective interest method over the term of the note.

F-19

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SHARE SETTLED DEBT (CONTINUED)

ASC 480-10-25-14 requires liability accounting for (1) any financial instrument that embodies and unconditional obligation to transfer a variable number of shares or (2) a financial instrument other than an outstanding share that embodies a conditional obligation to transfer a variable number of shares, provided that the monetary value of the obligation is based solely or predominantly on any of the following: 1. A fixed monetary amount known at inception (e.g. stock settled debt); 2. Variations in something other than the fair value of the issuer’s equity shares (e.g. a preferred share that will be settled in a variable number of common shares with tits monetary value tied to a commodity price); and 3. Variations in the fair value of the issuer’s equity shares, but the monetary value to the counterparty moves inversely to the value of the issuer’s shares (e.g. net share settled written put options, net share settled forward purchase contracts).

Notwithstanding the fact that the above instruments can be settled in shares, FASB concluded that equity classification is not appropriate because instruments with those characteristics do not expose the counterparty to risks and rewards similar to those of an owner and, therefore do not create a shareholder relationship. The issuer is instead using its shares as the currency to settle its obligation.

INCOME TAXES

Income taxes are accounted for under the liability method of accounting for income taxes. Under the liability method, future tax liabilities and assets are recognized for the estimated future tax consequences attributable to differences between the amounts reported in the financial statement carrying amounts of assets and liabilities and their respective tax bases.

Future tax assets and liabilities are measured using enacted or substantially enacted income tax rates expected to apply when the asset is realized, or the liability settled. The effect of a change in income tax rates on future income tax liabilities and assets is recognized in income in the period that the change occurs. Future income tax assets are recognized to the extent that they are considered more likely than not to be realized.

ASC 740 “Income Taxes” clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by ASC 740 and concluded that the tax position of the Company does not meet the more-likely-than-not threshold as of June 30, 2021.

RECENT ACCOUNTING PRONOUNCEMENTS

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contract’s in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU simplifies the diluted net income per share calculation in certain areas. The ASU is effective for annual and interim periods beginning after December 31, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company is currently evaluating the impact that this new guidance will have on its condensed consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” which addresses accounting for issuance of all share-based payments on the same accounting model. Previously, accounting for share-based payments to employees was covered by ASC Topic 718 while accounting for such payments to non-employees was covered by ASC Subtopic 505-50. As it considered recently issued updates to ASC 718, the FASB, as part of its simplification initiatives, decided to replace ASC Subtopic 505-50 with Topic 718 as the guidance for non-employee share based awards. Under this new guidance, both sets of awards, for employees and non-employees, will essentially follow the same model, with small variations related to determining the term assumption when valuing a non-employee award as well as a different expense attribution model for non-employee awards as opposed to employee awards. The ASU is effective for public business entities beginning in 2019 calendar years and one year later for non-public business entities. The Company has determined that there is not a material impact on their condensed consolidated financial position and results of operations as a result of this standard.

F-20

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

RECENT ACCOUNTING PRONOUNCEMENTS

In February 2016, FASB issued ASU 2016-02, “Leases (Topic 842).” The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period and is applied retrospectively. The Company has adopted this standard as of April 1, 2019 (See Note 7).

There are several other new accounting pronouncements issued or proposed by the FASB. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe any of these accounting pronouncements has had or will have a material impact on the Company’s condensed consolidated financial position or operating results.

SUBSEQUENT EVENTS

In accordance with ASC 855 “Subsequent Events” the Company evaluated subsequent events after the balance sheet date through the date of issuance of this report.

NOTE 3 - REVENUE

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which the Company adopted simultaneous with the commencement of sales in March 2019. No cumulative adjustment to accumulated deficit was done, and the adoption did not have an impact on our condensed consolidated financial statements, as no material arrangements prior to the adoption were impacted by the new pronouncement.

The following table disaggregates the Company’s net revenue by sales channel for the three months ended June 30:

SCHEDULE OF DISAGGREGATION REVENUE

	2021		2020
Revenue:
Distributor	$	-	$	-
E-Commerce		33,257		60,094
Wholesale		110		4,710
	$	33,367	$	64,804

Revenues from the Company’s E-Commerce channel represented 99.7% of total net sales for the three months ended June 30, 2021 compared to 92.7% for the prior year. As of June 30, 2021, the Company’s had an allowance for doubtful account collectability in the amount of $94,659 which was wholly attributable to the Wholesale channel. There were no significant contract asset or contract liability balances for periods presented. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed. Collections of the amounts billed are typically paid by the customers within 30 to 60 days.

NOTE 4– INVENTORY

The following chart is the inventory value by product as of:

SCHEDULE OF INVENTORY

	March 31, 2021		March 31, 2020
CBD/CBG Tauri-Gum^TM	$	163,545	$	173,207
Tauri-Gummies^TM		10,621		13,973
Other (1)		48,735		14,192
Total Inventory	$	222,901	$	201,372

(1)

Other inventory consists of holiday pouches sold as a bundled of Tauri-Gum^TM, chocolate coins, dog treats, other CBD products, bath bombs, honey, mints and skin care.

F-21

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 4– INVENTORY (CONTINUED)

At June 30, 2021, there were $417,710 of prepayments on deposit with manufactures of Company products.

NOTE 5– PROPERTY AND EQUIPMENT

The Company’s property and equipment is as follows:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30, 2021			March 31, 2021			Estimated Life
Computers, office furniture and other equipment	$	15,651		$	13,705		3-5 years
Less: accumulated depreciation		(2,575	)		(1,642	)

Net	$	13,076			12,063

During the year ended March 31, 2021, the Company purchased office furniture in the amount of $8,722 for its new company headquarters in Wappingers Falls, New York. The furniture will be depreciated over 60 months commencing upon occupation of its new Company headquarters on January 6, 2021.

During the three months ended June 30, 2021, the Company purchased computer equipment in the amount of $1,945. This equipment will be depreciated of 36 months.

On June 29, 2018, the Company purchased four Blink Level 2 – 40” pedestal chargers for permanent placement in one or more retail locations whereby the Company would share revenue from these electric car vehicles charging units with such location owner. No depreciation expense has been recorded for the charging units as of June 30, 2021 due to the fact that they have not been placed in service. As of April 1, 2020, these charging units were reclassified as assets held for resale.

Depreciation expense for the three months ended June 30, 2021 and 2020 was $932 and $219, respectively.

NOTE 6 –LEASEHOLD IMPROVEMENTS

Associated with the Company’s January 6, 2021, relocation of its headquarters to Wappingers Falls the Company implemented certain leasehold improvements including signage and a sales display buildout at a total cost of $5,000. The Company has entered a two-year lease with a two-year extension option. The Company expects that it will exercise these two extension options and has chosen to amortize these leasehold improvements over 48 months.

SCHEDULE OF LEASEHOLD IMPROVEMENTS

	June 30, 2021			March 31, 2021			Expected Usage
Wappingers Falls office signage and sales display	$	5,000		$	5,000		48 months
Less: amortization		(625	)		(313	)

Net	$	4,375			4,687

NOTE 7 – OPERATING LEASE

The Company has adopted ASU No. 2016-02, Leases (Topic 842), as of April 1, 2019 and will account for new leases in terms of the right of use assets and offsetting lease liability obligations for this new lease under this pronouncement. In accordance with ASC 842 – Leases, effective January 6, 2021, the Company recorded a net lease right of use asset and a lease liability at present value of approximately $67,938. The Company recorded these amounts at present value, in accordance with the standard, using a discount rate of 8.32% which is representative of the average borrowing rates for outstanding notes issued to non-related parties at the time of the entrance into the lease. The right of use asset is composed of the sum of all lease payments, at present value, and is amortized over the life of the expected lease term. For the expected term of the lease the Company used the initial term of the two-year lease. Upon the election by the Company to extend the lease for additional years, that election will be treated as a lease modification and the lease will be reviewed for remeasurement. This lease will be treated as an operating lease under the new standard.

F-22

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 7 – OPERATING LEASE (CONTINUED)

Wappingers Falls, New York – Corporate headquarters

Effective January 6, 2021, the Company moved its corporate headquarters to 4 Nancy Court, Suite 4, Wappingers Falls, New York 12590. The Company’s telephone number remains the same, phone: 917-796-9926. The Company entered into a two-year lease, expiring January 31, 2023. Tenant will pay $19,200 annually ($1,600 per month) during the term of the lease. The Company paid $1,600 as a security deposit as part of this lease. The Company has the option to one two-year extension. The Company expects it will exercise this option. Tenant will pay $21,000 annually ($1,750 per month) during the option term.

For the three months ended June 30, 2021 and 2020, the Company recorded lease expense of $5,025 and $ 3,457, respectively. As of June 30, 2021, the value of the unamortized lease right of use asset is $60,588. As of June 30, 2021, the Company’s lease liability was $61,038.

The following chart shows the Company’s operating lease cost for the three months ended June 30, 2021 and 2020:

SCHEDULE OF OPERATING LEASE COST


	For the three months ended June 30,
	2021		2020
Amortization of right of lease asset	$	3,713	$	3,457
Lease interest cost		1,312		451
Total Lease cost	$	5,025	$	3,908

Maturity of Operating Lease Liability for fiscal year ended March 31,


2022	$	10,938
2023		16,201
2024		18,990
2025		14,909
Total lease payments	$	61,038

	June 30, 2021		March 31, 2021
Right of Use (ROU) asset	$	60,588	$	64,301

	June 30, 2021		March 31, 2021
Operating lease liability:
Current	$	14,747	$	14,426
Non-Current		46,291		50,100
Total	$	61,038	$	64,526

F-23

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 8 – NOTES PAYABLE

CONVERTIBLE NOTE

On April 5, 2021, the Company effectuated a $525,000 six-month fixed convertible promissory note with Tangiers Global, LLC containing an original issue discount of $25,000. This note matures on October 5, 2021 and bears an interest rate of 8%, guaranteed. This note has a fixed conversion price of $0.075 per share. The Company recognized a beneficial conversion feature (“BCF”) on this note in the amount of $378,000. This BCF will be recognized as interest expense pro-rata over the life of the note. The Company may redeem the note by paying to Tangiers an amount as follows: (i) if within the first 90 days of the issuance date, then for an amount equal to 110% of the unpaid principal amount so paid of this Note along with any interest that has accrued during that period, and (ii) if after the 91st day, but by the 180^th day of the issuance date, then for an amount equal to 120%. After 180 days from the effective date, the Company may not pay this note in cash, in whole or in part without prior written consent by Holder. The Company covenants that it will at all times reserve out of its authorized and unissued Common Stock the number of shares of Common Stock as shall be issuable upon the conversion of this note. Tangiers may not engage in any “shorting” or “hedging” transaction(s) in the Common Stock of the Company prior to conversion. The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, restrictions on note proceeds, maintain exchange and SEC requirements, delivery of shares, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA. If an Event of Default occurs, the outstanding Principal Amount of this Note owing in respect thereof through the date of acceleration, shall become, at the Tangiers’s election, immediately due and payable in cash at the “Mandatory Default Amount”. The Mandatory Default Amount means 20% of the outstanding Principal Amount of this Note will be automatically added to the Principal Sum of the Note and tack back to the Effective Date for purposes of Rule 144. Commencing 5 days after the occurrence of any Event of Default that results in the eventual acceleration of this Note, this Note shall accrue additional interest, at a rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. The Company has issued 1,000,000 of its restricted common debt incentive shares having a value of $129,000 ($.0129/share). As of June 30, 2021, this note had accrued interest of $19,738.

OTHER NOTES

On October 5, 2020, the Company entered into (i) an Inventory Financing Promissory Note in the aggregate principal amount of $135,000 with Jefferson Street Capital LLC, and (ii) a Securities Purchase Agreement. The note has a maturity date of October 5, 2021, carries $10,000 original issue discount (and a $3,000 due diligence fee paid to Moody Capital Solutions, Inc., the placement agent on behalf of Jefferson Street), and carries interest on the unpaid principal balance hereof at the rate of ten percent (10%) per annum beginning on the issuance date of October 5, 2020. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of eighteen percent (18%) per annum from the due date thereof until the same is paid or converted in accordance with the terms of the note. The repayment of this note shall be in seven equal cash monthly installments beginning on April 5, 2021 and ending on October 5, 2021, for an aggregate amount of $148,500 (assuming no defaults). This note may not be converted by noteholder into shares of our Common Stock unless we default in our monthly repayment obligation pursuant to the cash repayment schedule noted above. In the event of a default of the note, noteholder shall have the right to convert all or any part of the outstanding and unpaid amounts into fully paid and non-assessable shares of Common Stock; provided, however, that in no event shall the holder be entitled to convert any portion of the note in excess of that portion of the note upon the conversion of which would result in beneficial ownership by noteholder and its affiliates of more than 4.99% of the outstanding shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder. The beneficial ownership limitations noted above may not be waived by noteholder. The conversion price shall equal (subject to customary adjustments for stock splits, stock dividends or rights offerings, recapitalization, reclassifications, extraordinary distributions and similar events) 75% multiplied by the market price, which is defined to mean the lowest one-day volume weighted average price of our Common Stock during the ten (10) trading day period ending on the latest complete trading day prior to the conversion date. The note contains a number of default or penalty provisions, including, but not limited to, the following: (a) at any time after October 5, 2020, if in the case that the Company’s Common Stock is not deliverable by DWAC for any reason, an additional 10% discount will apply for all future conversions under all notes. If in the case that the Company’s Common Stock is “chilled” for deposit into the DTC system and only eligible for clearing deposit, an additional 15% discount shall apply for all future conversions under the Note while the “chill” is in effect; (ii) if both the events noted in (i) above were to occur, an additional cumulative 25% discount shall apply; (iii) if the Company ceases to be a reporting company pursuant to the 1934 Act or if the Note cannot be converted into free trading shares after one hundred eighty-one (181) days from the issuance date, an additional 15% discount will be attributed to the conversion price; if the Company ceases to be a reporting company under the 1934 Act, (iv) if, at any time the Borrower does not maintain the Share Reserve (defined below); (v) the Company fails to pay the principal or interest under the Note when due under the terms thereof (including the five (5) calendar day cure period); (vi) a cross-default by the Company of another of its outstanding notes; or (vii) the completion of a reverse stock split while this Note is outstanding (and without consent). Subject to certain exempt issuances by the Company, during the period where any portion of the Note remains outstanding to Jefferson Street, if the Company engages in any future financing transactions with a third party investor, the Company will provide Jefferson Street with written notice thereof promptly but in no event less than 10 days prior to closing any financing transactions, and if applicable, the Company shall adjust the terms of the note to such more favorable terms of a subsequent financing, if any. In connection with the note, the Company issued irrevocable transfer agent instructions reserving 21,000,000 shares of the Company’s Common Stock (“Share Reserve”) for the amount then outstanding.

F-24

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 8 – NOTES PAYABLE (CONTINUED)

OTHER NOTES (CONTINUED)

On October 22, 2020, the Company issued to Jefferson Street 1,250,000 shares of its restricted common stock as debt commitment shares valued at $40,000 ($0.032 per share). Upon full conversion or repayment of this note, any shares remaining in such share reserve shall be cancelled and placed back into the treasury of the Company and available for issuance at a future date. As of June 30, 2021, this note had remaining unpaid principal of $80,335 and accrued interest of $938. As of this report date, the Company has made all scheduled payments under this note.

On November 18, 2020, we consummated an inventory financing transaction and entered into (i) a Promissory Note in the aggregate principal amount of $110,000 with SE Holdings, LLC, a Nevada limited liability company (“SE”), and (ii) a Securities Purchase Agreement (“SPA”). The note has a maturity date of September 11, 2021, and carried $10,000 original issue discount, and guaranteed interest of 12%. Any amount of principal or interest on the note which is not paid when due shall bear interest at the rate of twenty four percent per annum from the due date thereof until the same is paid or converted in accordance with the terms of the note. Principal payments shall be made in five (5) installments, each in the amount of US$22,500 commencing one the fifth monthly anniversary following the issue date and continuing thereafter each thirty (30) days for five (5) months (assuming no defaults or partial or complete conversions of our Common Stock as a form of repayment). This note may not be converted by SE into shares of our Common Stock unless we default in our monthly repayment obligation pursuant to the cash repayment schedule noted above. In the event of a default of the note, SE shall have the right to convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of Common Stock at the lowest market price for the preceding five trading days; provided, however, that in no event shall SE be entitled to convert any portion of the note in excess of that portion of the note upon the conversion of which would result in beneficial ownership by SE and its affiliates of more than 4.99% of the outstanding shares of Common Stock (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder.

The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, right to proceeds from other financings, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA. At June 30, 2021, the note had remaining unpaid principal of $52,365 and accrued interest of $477. As of this report date, the Company has made all scheduled payments under this note.

On March 5, 2021, the Company entered into a Securities Purchase Agreement and a non-convertible redeemable note with GS Partners Capital, LLC. The $273,000 aggregate principal note has a maturity date of December 5, 2021 and carries $5,000 original issue discount with an interest rate of 6%. This note may be prepaid without penalty, provided that an event of default has not occurred. Upon an event of 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. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default and other such provisions, each as set forth in more detail in the note and SPA. At June 30, 2021, the note had accrued interest of $5,251 with the full principal balance due.

On April 30, 2021, the Company entered into a Securities Purchase Agreement and a non-convertible redeemable note with GS Capital Partners, LLC. The $313,000 aggregate principal note has a maturity date of June 1, 2022 and carries $23,000 Original Issue Discount with an interest rate of 8%. This note may be prepaid without penalty, provided that an event of default has not occurred. Upon an event of 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. This note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default and other such provisions, each as set forth in more detail in the note and SPA. At June 30, 2021, the note had accrued interest of $4,185 with the full principal balance due.

The Company did not issue any shares to noteholders to convert outstanding notes during the three months ended June 30, 2021.

During the year ended March 31, 2021, the Company issued 93,197,109 shares of common stock to holders of convertible notes to retire $1,588,926 in principal and $111,749 of accrued interest (at an average conversion price of $0.01825 per share) under the convertible notes.

Interest expense for the three months ended June 30, 2021 was $435,811 compared to $ 317,434 during the prior year. Accrued interest at June 30, 2021 and March 31, 2021 and 2020 was $30,587 and $14,722, respectively.

F-25

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT)

COMMON STOCK

As of June 30, 2021, the Company was authorized to issue 400,000,000 shares of its common stock. As of June 30, 2021 and August 16, 2021 there were 285,696,214 and 290,371,214 and 287,871,214 shares, respectively of common stock issued and outstanding.

S-1 Registration Statement and Investment Agreement with Tangiers Global, LLC.

On March 5, 2020, the Company filed an S-1 Registration Statement pursuant to the January 21, 2020, Investment Agreement and Registration Rights Agreement entered into Tangiers in order to establish a source of funding for our operations. Under the Investment Agreement, Tangiers agreed to provide us with a maximum of up to $5,000,000 of funding during the period ending three years from the date of effectiveness of the S-1 Registration Statement, under which we registered a maximum of 76,000,000 million shares for sale under the terms of the Investment Agreement. We were, in our sole discretion, allowed to deliver a Put Notice to Tangiers under this facility. The Put Notice would specify the number of shares of common stock which we intended to sell to Tangiers on a closing date. The closing of a purchase by Tangiers of the shares specified by us in the Put Notice would occur on the date which is no earlier than five and no later than seven trading days following the date Tangiers receives the Put Notice. On the closing date we would sell to Tangiers the shares specified in the Put Notice, and Tangiers would pay us an amount equal to the Purchase Price multiplied by the number of shares specified in the Put Notice.

The S-1 Registration statement became effective March 16, 2020. As of March 31, 2021, the Company has initiated put notices to Tangiers for a total of 13,910,000 shares receiving net proceeds in the amount of $400,514.

On January 6, 2021, the Company’s board of directors voted unanimously determined to terminate this equity line of credit facility by terminating each of the Investment Agreement and Registration Rights Agreement, and on January 8, 2021 filed a Post-Effective Amendment to its Form S-1 Registration Statement (333-236923) removing from registration all shares of common stock not previously sold thereunder.

Fiscal Year 2021

During the year ended March 31, 2021, the Company issued 13,910,000 shares pursuant to put notices issued to Tangiers under the equity line of credit facility, with the Company receiving proceeds in the amount of $369,482 ($0.02614 to $0.03344 per share).

During the year ended March 31, 2021, the Company issued 7,687,500 shares for services rendered ($0.0306 to $0.050 per share).

During the year ended March 31, 2021, the Company issued 5,740,000 shares for debt commitments valued at $253,869 ($0.028 to $0.092 per share).

During the year ended March 31, 2021, the Company recognized $208,806 in beneficial conversion feature for convertible notes whereby the holder can exercise conversion rights at a discount to the market price.

During the year ended March 31, 2021, the Company issued 40,084,998 shares under stock purchase agreements in consideration for $1,587,214 ($0.024 to $0.09 per share) to accredited investors that are unrelated third parties.

During the year ended March 31, 2021, the Company issued 2,500,000 shares to two directors at a value of $0.092 per share.

On July 10, 2020, the Company’s Chief Executive Officer purchased 700,000 shares of the Company’s Common Stock for an aggregate purchase price of $35,000, at $0.05 per share.

Pursuant to the April 3, 2020, collaboration agreement the Company entered into with Aegea Biotechnologies Inc. (“Aegea”) the Company issued to Aegea 5,000,000 unregistered common shares of Tauriga common stock. The shares were valued at $155,000 ($0.031 per share).

F-26

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 9 – STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)

COMMON STOCK (CONTINUED)

Fiscal Year 2021 (Continued)

For a more complete description of this arrangement please refer to Note 1 to the financial statements under the subheading “Collaboration Agreement with Aegea Biotechnologies Inc.” as well as the agreement exhibits related thereto.

Fiscal Year 2022

During the three months ended June 30, 2021, the Company issued 2,300,000 shares under stock purchase agreements in consideration for $174,000 ($0.075 to $0.08 per share) to accredited investors that are unrelated third parties.

During the three months ended June 30, 2021, the Company issued 5,737,500 shares for services rendered ($0.0395 to $0.129 per share).

During the three months ended June 30, 2021, the Company issued 1,800,000 shares for debt commitments valued at $201,000 ($0.09 to $0.0129 per share).

During the three months ended June 30, 2021, the Company received $100,000 for 2,500,000 shares of stock. The Company recorded these funds as a liability to issue stock as of June 30, 2021.

In connection with some of the consulting agreements and board advisory agreements the Company has entered into, as the following clauses are part of the compensation arrangements: (a) the consultant will be reimbursed for all reasonable out of pocket expenses and (b) the Company, in its sole discretion, may make additional cash payments and/or issue additional shares of common stock to the consultant based upon the consultant’s performance. The Company recognized $62,388 and $245,851 in stock-based compensation expense related to these agreements in the three months ended June 30, 2021 and 2020.

STOCK OPTIONS

On February 1, 2012, the Company awarded to each of two executives’, one current and one former, options to purchase 66,667 common shares, an aggregate of 133,334 shares. These options vested immediately and were for services performed.

The following table summarizes option activity for the three months and year ended June 30, 2021 and March 31, 2021.

SCHEDULE OF STOCK OPTIONS ACTIVITY

					Weighted
			Weighted-		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value

Outstanding at March 31, 2020		133,334	$	7.50		1.85 Years	$	—

Granted		—		—
Expired		—		—
Exercised		—		—

Outstanding at March 31, 2021		133,334	$	7.50		0.85 Years	$	—

Granted		—		—
Expired		—		—
Exercised		—		—

Outstanding and exercisable June 30, 2021		133,334	$	7.50		0.60 Years	$	—

F-27

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 10 – PROVISION FOR INCOME TAXES

Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for year and three months ended June 30, 2021 and March 31, 2021:

SCHEDULE OF EFFECTIVE INCOME TAX RATE

	June 30, 2021			March 31,2021
Federal income taxes at statutory rate		21.00	%		21.00	%
State income taxes at statutory rate		0.00	%		0.00	%
Temporary differences		(4.64	)%		11.83	%
Permanent differences		0.00	%		0.03	%
Impact of Tax Reform Act		0.00	%		0.00	%
Change in valuation allowance		(16.36	)%		(32.86	)%
Totals		0.00	%		0.00	%

Realization of deferred tax assets is dependent upon sufficient future taxable income during the period that deductible temporary differences and carry-forwards are expected to be available to reduce taxable income. As the achievement of required future taxable income is uncertain, the Company recorded a valuation allowance.

SCHEDULE OF DEFERRED TAX ASSETS

	As of			As of
	June 30, 2021			March 31, 2021
Deferred tax assets:
Net operating losses before non-deductible items	$	4,799,916		$	4,599,765
Stock-based compensation		556,477			543,375
Unrealized gains (losses) on investments		112,971			164,666
Total deferred tax assets		5,469,364			5,307,806
Less: Valuation allowance		(5,469,364	)		(5,307,806	)

Net deferred tax assets	$	0		$	0

At June 30, 2021, the Company had a U.S. net operating loss carry-forward in the approximate amount of $26 million available to offset future taxable income through 2038. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. The valuation allowance increased by $161,558 in the three months ended June 30, 2021 and increased by $690,392 in the year ended March 31, 2021. The net decreases were the result of the tax effects of the Tax Cuts and Jobs Act (the “TCJA”) offset by taxable losses net of timing differences in each of the years.

NOTE 11 – INVESTMENTS

TRADING SECURITIES

For investments in securities of other companies that are owned, the Company records them at fair value with unrealized gains and losses reflected in other operating income or loss. For investments in these securities that are sold by us, the Company recognizes the gains and losses attributable to these securities investments as realized gains or losses in other operating income or loss on a first in first out basis.

Investment in Trading Securities:

At March 31, 2021

Company		Beginning of Period Cost		Purchases		Sales Proceeds		End of Period Cost		Fair Value		Realized Gain(Loss)		Unrealized Gain(Loss)
VistaGenTherapeutics Inc (VTGN)	(a)	$	287,500	$	277,500	$	302,827	$	408,750	$	1,246,050	$	-	$	837,300
SciSparc Ltd.(SPRCY)	(b)	$	-	$	88,375	$	-	$	88,375	$	88,375	$	-	$	-
Totals		$	287,500	$	365,875	$	302,827	$	497,125	$	1,334,425	$	-	$	837,300

F-28

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 11 – INVESTMENTS (CONTINUED)

TRADING SECURITIES (CONTINUED)

Investment in Trading Securities (Continued):

At June 30, 2021

Company		Beginning of Period Cost		Purchases		Sales Proceeds		End of Period Cost		Fair Value		Realized Gain (Loss)			Unrealized Gain(Loss)
VistaGen Therapeutics Inc (VTGN)	(a)	$	408,750	$	270,000	$	1,198,896	$	325,250	$	834,750	$	845,396		$	(327,800	)
SciSparc Ltd. (SPRCY)	(b)		88,375		-		-		88,375		99,750		-			11,375
Neptune Wellness Solutions (NEPT)	(c)		-		102,201		89,200		-		-		(13,002	)		-
BLNK CALLS - 01/21/22 $75	(d)		-		31,421		-		31,421		31,320		-			(101	)
Beyond Meat (BYND)	(e)		-		60,530		72,749		-		-		12,219			-
BYND CALLS 11/19/21 $150	(f)		-		67,182		-		67,182		89,820		-			22,638
Jupiter Wellness (JUPW)	(g)		-		75,701		64,362		-		-		(11,339	)		-
Canoo, Inc. (GOEVW)	(h)		-		237,790		-		237,790		307,932		-			70,142
Mind Medicine MindMed Inc. (MNMD)	(i)		-		123,222		-		123,222		113,850		-			(9,372	)
Odyssey Semiconductor Technologies Inc.(ODII)	(j)		-		40,250		11,470		21,206		12,700		(7,596	)		(8,484	)
TLRY - CALL 12/17/21 $25	(k)		-		71,663		-		71,663		67,100		-			(4,563	)
Totals		$	497,125	$	1,079,961	$	1,436,676	$	966,110	$	1,557,222	$	825,678		$	(246,166	)

*This amount represents the cumulative unrealized loss as of June 30, 2021.

(a)	During the year ended March 31, 2021, the Company had exercised 230,000 warrant shares of VistaGen Therapeutics Inc. (VTGN) with a $0.50 strike acquired as part of a stock purchase agreement in addition to an additional 250,000 warrant shares with a strike price of $0.50 per share purchased for $0.15 per share. During the year ended March 31, 2021, the Company sold 125,000 shares for proceeds of $302,827 realizing a gain of $146,577. At March 31, 2021, the Company had 320,000 unexercised warrant shares with a strike price of $1.50 per share. These shares were in the money $0.63 per share in the money. On May 18, 2021, the Company exercised 180,000 of its Vistagen Therapeutics, Inc. five-year $1.50 registered warrants for $270,000 cash. During the three months ended June 30, 2021, the Company sold 500,000 shares for proceeds $1,198,896 and a realized gain of $845,396. As of June 30, 2021, the Company had an unrealized loss of $327,800 for the shares held.

(b)	On March 1, 2021, the Company invested $88,375 for 12,500 units of SciSparc Ltd. (formerly known as Therapix Biosciences Ltd.) (OTCQB: SPRCY), a specialty, clinical-stage pharmaceutical company focusing on the development of cannabinoid-based treatments. The Company’s investment (acquisition of an equity stake with warrants) into SciSparc Ltd., was pursuant to an $8,150,000 private placement offering, comprised 1,152,628 Units to certain institutional and accredited investors in a private placement at an offering price of $7.07 per Unit. Each Unit consists of 1 American Depositary Share (“ADS”), 1 Series A Warrant and ½ Series B Warrant. The Series A Warrants have an exercise price of $7.07, subject to adjustments therein. The Series B Warrants have an exercise price equal to $10.60, subject to adjustments therein. The Series A Warrants and the Series B Warrants are exercisable six months from the date of issuance and have a term of exercise equal to five years from the initial exercise date. 278,744 of the Units included a Pre-Funded Warrant instead of an ADS. The Pre-Funded Warrants have an exercise price of $0.001 per full ADS.

(c)	During the three months ended June 30, 2021, the Company purchased 75,000 shares of Neptune Wellness Solutions (NEPT) at a cost of $102,201 (average of $1.36 per share). During the three months ended June 30, 2021, the Company sold all 75,000 shares for proceeds of $89,200 and a realized loss of $13,002 (average $1.19 per share).

(d)	During the three months ended June 30, 2021, the Company purchased 180 CALL option contracts of Blink Charging Co with a strike price of $75 and an expiration of January 21, 2022. These CALL options were purchased for $31,421 ($174.56 per contract). As of June 30, 2021, the Company had an unrealized loss of $101.

(e)	During the three months ended June 30, 2021, the Company purchased 500 shares of Beyond Meat, Inc. (BYND) at a cost of $60,530 ($121.06 per share). During the three months ended June 30, 2021, the Company sold all 500 shares for proceeds of $72,749 and a realized gain of $12,219 (average $121.06 per share).

(f)	During the three months ended June 30, 2021, the Company purchased 36 CALL option contracts of Beyond Meat, Inc. with a strike price of $150 and an expiration of November 19, 2021. These CALL options were purchased for $67,182 ($1,866.18 per contract). As of June 30, 2021, the Company had an unrealized gain of $22,638.

F-29

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 11 – INVESTMENTS (CONTINUED)

TRADING SECURITIES (CONTINUED)

Investment in Trading Securities (Continued):

(g)	During the three months ended June 30, 2021, the Company purchased 15,000 shares of Jupiter Wellness (JUPW) at a cost of $75,701 ($5.05 per share). During the three months ended June 30, 2021, the Company sold all 15,000 shares for proceeds of $64,362 and a realized loss of $11,339 (average $4.29 per share).

(h)	During the three months ended June 30, 2021, the Company purchased 103,333 warrants of Canoo, Inc. (GOEVW) at a cost of $237,790 (average $2.30 per share). As of June 30, 2021, the Company had an unrealized gain of $70,142.

(i)	During the three months ended June 30, 2021, the Company purchased 33,000 shares of Mind Medicine Mindmed Inc. (MNMD) at a cost of $123,222 (average $3.73 per share). As of June 30, 2021, the Company had an unrealized loss of $9,372.

(j)	During the three months ended June 30, 2021, the Company purchased 9,500 shares of Odyssey Semiconductor Technologies Inc. (ODII) at a cost of $40,250 (average $4.23 per share). During the three months ended June 30, 2021, the Company sold 4,500 shares for proceeds of $11,470 and a realized loss of $7,596. The Company had an unrealized loss of $8,484 for the three months ended June 30, 2021.

(k)	During the three months ended June 30, 2021, the Company purchased 220 CALL option contracts of Tilray, Inc. with a strike price of $25 and an expiration of December 17, 2021. These CALL options were purchased for $71,663 ($325.74 per contract). As of June 30, 2021, the Company had an unrealized gain of $4,563.

At June 30, 2021, the Company held warrants for AYTU to purchase 5,555 common shares at a strike price of $10.80 with an expiration of March 6, 2023. The strike price and number of shares were adjusted for the August 10, 2018, 1 for 20 reverse stock-split and again on December 8, 2020, as a result of a 1 for 10 shares held (herein referred to collectively as the “Reverse Stock Split”). All share and per share amounts in this report have been adjusted to reflect the effect of the Reverse Stock Split. At June 30, 2021, these warrants were out of the money by $102.99 per share and are not publicly traded, and the Company has not recognized the value of these warrants as they are not liquid.

At June 30, 2021, the Company also held Series A Warrants and the Series B Warrants of SciSparc Ltd. (SPRCY). With each of the 12,500 Units, purchased by the Company, consisting of 1 ADS, 1 Series A Warrant and ½ Series B Warrant. The Series A Warrants have an exercise price of $7.07, subject to adjustments therein. The Series B Warrants have an exercise price equal to $10.60, subject to adjustments therein. The Series A Warrants and the Series B Warrants are exercisable six months from the date of issuance and have a term of exercise equal to five years from the initial exercise date. These warrants are not publicly traded, and the Company has not recognized the value of these warrants as they are not liquid.

COST BASED INVESTMENTS

Paz Gum LLC

Effective February 5, 2021, the Company purchased five percent of the membership units in Paz Gum LLC, a Nevada limited liability company under the terms of a Membership Unit Purchase Agreement for an aggregate purchase price of $50,000. The Company and Paz will endeavor to cross market and increase sales of our products, along with such other products that Paz Gum undertakes in their discretion. This investment was recorded at cost on the Company’s Condensed Consolidated Balance Sheet. The Company will test this investment annually for impairment.

F-30

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

Aegea Biotechnologies Inc.

On April 3, 2020, Tauriga Sciences, Inc. entered into a collaboration agreement (“Collaboration Agreement”) with Aegea Biotechnologies Inc. (“Aegea”), for the purpose of developing a Rapid, Multiplexed Novel Coronavirus (COVID-19) Point of Care Test with Superior Sensitivity and Selectivity (the “SARS-Col 2 Test”). The parties believed that the benefits of the SARS-CoV-2 Test were the following: a Rapid SARS-CoV-2 test with the sensitivity and specificity to eliminate false negatives and false positives, and with the ability to detect and measure viral shed, even in patients who are asymptomatic. This SARS-CoV-2 test would use Aegea’s patented technologies, to take coronavirus testing to the next level by differentiating different strains of SARS-CoV-2. The test, if successful, would be adaptable to additional SARS-CoV-2 strain types as necessary and as the virus mutates. It also has the possibility to rapidly be customized to provide similarly sensitive and specific assays for other viruses.

COST BASED INVESTMENTS (CONTINUED)

Aegea Biotechnologies Inc. (Continued)

The Company committed to raise funding for the purposes set forth in under the Collaboration Agreement from its $5,000,000 Equity Line of Credit (“ELOC”) with Tangiers Global, LLC, which became effective on March 16, 2020. Seventy percent (70%) of the net proceeds from the sale of the initial 10,000,000 shares of stock of Tauriga under the ELOC were invested in Aegea for the development of the Covid Test and used to purchase shares of common stock of Aegea, at a purchase price of $4.00 per share. The $4.00 stock price corresponds to a current pre-money valuation of Aegea of $25,000,000 for each tranche of cash, up to the first $2,000,000 of our investment in Aegea. Additionally, as part of our agreement with Aegea, on May 26, 2020, Tauriga issued to Aegea 5,000,000 unregistered common shares of Tauriga common stock. On August 10, 2020, the Company and Aegea amended their Collaboration Agreement. Under the terms of the amendment, having invested 70% of the proceeds from the sale of the initial 10,000,000 shares of Tauriga stock under the ELOC with Tangiers, the Company increased the percentage of proceeds it invested in Aegea on the sale of the remaining shares available under the ELOC agreement from 20% to 40%.

On January 6, 2021, however, the Company determined to terminate its ELOC by terminating each of the Investment Agreement and Registration Rights Agreement, and on January 8, 2021 filed a Post-Effective Amendment to its Form S-1 Registration Statement (333-236923) which removed from registration all shares not previously sold thereunder. This effectively eliminated our obligation to any additional funding to Aegea under the Collaboration Agreement. As of March 31, 2021, the Company had invested $278,212 in Aegea for 69,553 shares, representing an ownership percentage of 1.02%. As of March 31, 2021, resultant delays of project milestones have led the Company to determined that full recovery of its investment in Aegea is in doubt and has recorded a 50% impairment loss on its Condensed Consolidated Statement of Operations in the amount of $139,106. Aegea is still moving forward on this project and the Company will continue to monitor the progress. There was no further activity or investment in Aegea by us in the period ended June 30, 2021.

On February 26, 2021, as part of a settlement agreement concluding the Collaboration Agreement, the Company acquired an additional 69,552 common shares of Aegea, increasing the Company’s total holdings to 139,104 Aegea shares (representing a 2.04% stake in Aegea as of June 30, 2021).

Serendipity

On October 31, 2018, the Company invested $35,000 in Serendipity Brands LLC (dba Serendipity Ice Cream Co.) (“Serendipity”), a privately held Company. Serendipity is an ice cream distribution company providing wholesale distribution to retail customers. The investment was recorded at cost and represented 0.24% of the value of Serendipity based on a pre-money valuation of approximately $14 million. The Company tested the investment value in Serendipity as of March 31, 2021 for impairment. It was evidenced that Serendipity had raised significant capital during the year ended March 31, 2021 utilizing a pre-money valuation of $35 million, far exceeding the basis of Tauriga’s investment, therefore, the Company did not believe there was any impairment of this investment as of March 31, 2021.

NOTE 12 – FAIR VALUE MEASUREMENTS

The following summarizes the Company’s financial assets and liabilities that are measured at fair value on a recurring basis at June 30, 2021 and March 31, 2021:

	June 30, 2021
	Level 1		Level 2		Level 3		Total
Assets
Investment-trading securities	$	1,557,222	$	-	$	-	$	1,557,222
Cost method investment – Serendipity Brands		-		-		35,000	$	35,000
Cost method investment - Aegea Biotechnologies, Inc.		-		-		139,106	$	139,106
Cost method investment - Paz Gum LLC		-		-		50,000	$	50,000

	March 31, 2021
	Level 1		Level 2		Level 3		Total
Assets
Investment-trading securities	$	1,334,425	$	-	$	-	$	1,334,425
Cost method investment – Serendipity Brands		-		-		35,000	$	35,000
Cost method investment - Aegea Biotechnologies, Inc.		-		-		139,106	$	139,106
Cost method investment - Paz Gum LLC		-		-		50,000	$	50,000

F-31

TAURIGA SCIENCES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTH ENDED JUNE 30, 2021 AND 2020

(US$)

(UNAUDITED)

NOTE 13 – CONCENTRATIONS

During the three months ended June 30, 2021, we had one supplier for our product CBD/CBG Tauri-Gum^TM. The Tauri-Gum^TMproduct line represents approximately 85.2% of net sales.

NOTE 14 – SUBSEQUENT EVENTS

Subsequent to June 30, 2021, the Company issued additional shares of common stock as follows: (i); 475,000 shares under consulting agreements and (ii) 1,700,000 shares of restricted common stock to accredited investors for proceeds totalling $168,000 ($0.04/per share).

On July 9, 2021, the Company announced that Amazon Brand Registry had approved the application for its flagship brand: Tauri-Gum™ whereby various Company products will be immediately available for sale on Amazon.com.

On July 12, 2021, the Company announces two new topical products; CBD infused Sunscreen Spray and Acai Fragrance Moisturizing Lip Balm. These two products will be manufactured, under Tauri-Sun™ brand name. Tauri-Sun™ Sunscreen Spray has a 30 SPF (sun protection factor) and is infused 200mg of CBD isolate per 3-ounce container. The easy to use “Spray On” delivery system is hypoallergenic and environmentally responsible (Reef Friendly). The Tauri-Sun™ Acai Fragrance Moisturizing Lip Balm has a 30 Sun Protection Factor (“SPF”) is dermatologist tested and CBD infused.

The Company experienced Covid-19 related delays in the current production of Tauri-Gum^TM involving a shortage in packaging materials. As of this report date, the Company has taken delivery on $404,250 of gum inventory.

On August 6, 2021, the Company entered into a Security Purchase Agreement and Promissory Note in the amount of $115,500. This note bears a 12% interest rate with a maturity date of June 6, 2022. A lump-sum interest payment for ten (10) months shall be immediately due on the issue date and shall be added to the principal balance and payable on the maturity date or upon acceleration or by prepayment or otherwise, notwithstanding the number of days which the principal is outstanding. This note shall contain an original issue discount of $10,500 resulting in a purchase price of $105,000. Principal payments shall be made in five (5) installments each in the amount of US$25,872 commencing one the fifth monthly anniversary following the issue date and continuing thereafter each thirty (30) days for five (5) months. The holder shall have the right from time to time, and at any time following an event of default, and ending on the date of payment of the default amount shall equal 100% multiplied by the lowest closing price for the common stock during the five trading day period ending on the latest complete trading day prior to the conversion date. The Borrower is required at all times to have authorized and reserved four (4) times the number of shares that is actually issuable upon full conversion of the Note (based on the Conversion Price of the Notes in effect from time to time). The Company has set up an initial reserve of 9,625,000 shares. The Company will also issue 1,000,000 commitment shares as additional consideration for the purchase of this note. These shares will be valued at $51,000 ($0.051 per share) based on the closing price of the Company’s stock on the day this note was entered into. The note contains a number of additional covenants and other provisions, including default or penalty clauses, cross-default, right to proceeds from other financings, reservation of share requirements and other such provisions, each as set forth in more detail in the note and SPA.

F-32

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations describes the principal factors affecting the results of operations, liquidity and capital resources of the Company and critical accounting estimates. This discussion should be read in conjunction with the accompanying quarterly unaudited Condensed Consolidated Financial Statements contained in this Form 10-Q and our Annual Report on Form 10-K, for the year ended March 31, 2021 (“Annual Report”). Our Annual Report includes additional information about our significant accounting policies, practices and the transactions that underlie our financial results, as well as a detailed discussion of the most significant risks and uncertainties associated with our financial and operating results.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified herein, and those discussed in the section titled “Risk Factors”, set forth in Part II, Item 1A of this Form 10-Q and in our other SEC filings. We disclaim any obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

Business Overview

Tauriga Sciences, Inc. (the “Company”) is a Florida corporation, with its principal place of business being located at 4 Nancy Court, Suite 4, Wappingers Falls, NY 12590. The Company has, over time, moved into a diversified life sciences technology company, with its mission to operate a revenue generating business, while continuing to evaluate potential acquisition candidates operating in the life sciences technology space.

Tauriga Pharma Corp.

On March 17, 2021, the Company filed an additional U.S. Provisional Patent Application relating to alternative pharmaceutical cannabinoid delivery systems.

Currently, the pharmaceutical grade version of Tauri-Gum^TM is in the pre-IND stage of development. The development team is working on several parallel workstreams, including:

●	formulation development;

●	non-clinical in vivo and in vitro studies to inform the effective clinical dose and safety margin;

●	regulatory strategy and regulatory documentation preparation;

●	confirmation of the active pharmaceutical ingredient (API); and

●	Identifying pharma-grade API suppliers.

Tauriga Sciences Limited

NFTauriga Corp.

Effective April 14, 2021, the Company formed NFTauriga Corp. in the State of Nevada, and wholly owned subsidiary. The Company is the sole holder of total authorized 100 shares having a par value of $0.00001. The Company’s Chief Executive Officer, Seth M. Shaw is the initial sole member of the board of directors, to serve until a qualified successor is duly elected. Mr. Shaw will also serve as the Chief Executive Officer and Secretary. The registered office of NFTauriga Corp. in the State of Delaware shall be at 1013 Centre Road, Suite 403-B, Wilmington, DE 19805 in the County of New Castle. The name of its registered agent at such address is Vcorp Services, LLC. NFTauriga Corp. will have the same fiscal year and principal executive office and the Company.

Master Services Agreement

COMPANY PRODUCTS

Tauri-Gum^TM

During fiscal year 2021, the Company enhanced its original Tauri-Gum™ formulation by increasing the infusion concentrations of both its Cannabidiol (“CBD”) and Cannabigerol (“CBG”) Tauri-Gum™ products to 25mg per piece of chewing gum (previous concentration was 10mg for the Pomegranate, Blood Orange, Mint, and Peach-Lemon flavors and 15mg for the Black Currant flavor). Additionally, the Company increased its Tauri-Gum™ product offerings to 9 SKUs. The new offerings being introduced are Cherry-Lime Rickey flavored Caffeine infused chewing gum, an 8-piece blister pack of containing 50mg of caffeine per piece and Golden Raspberry flavored Vitamin D3 infused chewing gum, containing 2,000 IU (50 micrograms) of Vitamin D3 per piece. Through its October 2020 partnership with Think Big LLC (the Company founded by the son of late iconic U.S. rap artist, NOTORIOUS BIG aka “Frank White”), the Company is also offering 2 limited edition Licensed Tauri-Gum™/Frank White products: Honey-Lemon flavored chewing gum (containing: 15mg CBD, 15mg CBG, 5mg Vitamin C, 10mg Zinc per piece) and Mint flavor (25mg CBD per piece).

Delta 8 Version of Tauri-Gum™

During March 2021, the Company developed a Delta-8-Tetrahydrocannabinol (“Delta-8-THC” or “Delta-8”) infused version of Tauri-Gum™. Delta-8-THC infused products are legal when the ingredient has been derived from the industrial hemp plant (“Cannabis Sativa”) and does not contain more than 0.3% (1/333^rd by dry weight composition) THC. The Company is focused on expanding both its product offerings and revenue opportunities, in a manner that is ethical, innovative, and fully compliant with Federal laws & regulations. Due to strong indications of demand, the Company has completed a double production run of its Evergreen Mint flavor, Delta 8 THC infused (10mg per piece of chewing gum), Version of Tauri-Gum™.

Tauri-Gummies™

Other Products

For a full list of our currently available products please visit our e-Commerce website at https://taurigum.com/.

DISTRIBUTION OF THE COMPANY’S PRODUCTS

Think BIG, LLC License Agreement

As consideration for each Brand Ambassador’s Services set forth under their respective PSAs, the Company agreed to issue each Brand Ambassador 1,500,000 restricted shares of the Company’s common stock, upon execution of the PSA and PSA 2. These shares were issued on December 17, 2020. In the event that the applicable PSA has not previously been terminated, following the one-year anniversary of the Effective Date, an additional 1,500,000 restricted shares of Company’s common stock shall be issued to each Brand Ambassador, subject to the satisfaction of the terms of such additional services and/or criteria to be mutually agreed upon by the parties to the PSA and/or the PSA 2, as the case may be. In total, all shares issued and to be issued had a value of $183,600 that will be recognized over the term of the contract. As of this report date, the Company has taken delivery on the initial production run for the co-branded gum.

Stock Up Express Agreement

REGULATORY MATTERS

Food and Drug Administration (“FDA”)

Furthermore, since the closure of the FDA hearings on this issue, some state and local agencies have issued a ban on the sale of any food or beverages containing CBD. There have been legislative efforts at the federal level, which seek to provide clear guidance to industry stakeholders regarding how to comply with applicable FDA law with respect to CBD and other hemp derived cannabinoids. However, such legislative efforts have been limited and as of this date, these legislative efforts require extensive further approvals, including approval from both houses of Congress and the President of the United States, before being enacted into law, if at all.

FDA Clinical Trial Process – United States Drug Development

The process required by the FDA before a drug may be marketed in the United States generally involves the following:

● completion of extensive pre-clinical in vitro and animal studies to evaluate safety and pharmacodynamic effects , formulation development, analytical method development, and manufacturing of the active pharmaceutical ingredient (API) and drug product for clinical trials in accordance with applicable regulations, including the FDA’s Current Good Laboratory Practice (cGLP) regulations and Current Good Manufacturing Practice (cGMP) regulations;

● submission to the FDA of an Investigational New Drug (IND) application, which must become effective before human clinical trials may begin;

● submission to the FDA of a New Drug Application (NDA);

● potential FDA audit of the clinical trial sites that generated the data in support of the NDA; and

● FDA review and approval of the NDA prior to any commercial marketing or sale.

Once a pharmaceutical product candidate is identified for development, it enters the pre-clinical testing stage. Pre-clinical tests include laboratory evaluations of product characterization, drug product formulation development and stability, as well as pharmacology and toxicology animal studies. An IND Sponsor must submit the results of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data or literature, to the FDA as part of the IND. The sponsor must also include a protocol detailing, among other things, the objectives of the initial clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated if the initial clinical trial lends itself to an efficacy evaluation. Some pre-clinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA raises concerns or questions related to a proposed clinical trial and places the trial on a clinical hold within that 30-day period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Clinical holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns or non-compliance, and may be imposed on all drug products within a certain class of drugs. The FDA also can impose partial clinical holds, for example, prohibiting the initiation of clinical trials of a certain duration or for a certain dose.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final product. Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

NDA and FDA Review Process

The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing. The FDA typically makes a decision on accepting an NDA for filing within 60 days of receipt. The decision to accept the NDA for filing means that the FDA has made a threshold determination that the application is sufficiently complete to permit a substantive review. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the FDA’s goal to complete its substantive review of a standard NDA and respond to the applicant is ten months from the receipt of the NDA. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and may go through multiple review cycles.

New York State Department of Health

OTHER BUSINESS ITEMS

Strategic Marketing and Consulting Agreement with

On June 14, 2021, the Company entered into a 12-month Strategic Marketing and Consulting Agreement with Mayer & Associates. Under this agreement the Company agreed to pay $150,000 along with the issuance of 3,500,000 shares of restricted common shares of Company stock. Half of the cash payment ($75,000) was paid upon execution of the agreement and the other half will be paid 90 days later. Upon execution, the Company issued 2,200,000 of the above-mentioned shares. The remaining 1,300,000 above-mentioned shares will be issued 90 days after this contract was executed. Mayer and Associates agreed to provide the Company with opportunities relating to the world of professional sports, with respect to its products and product lines. This includes but is not limited to: introductions to professional sports leagues, celebrity (professional athletes) influencers/brand ambassadors/brand liaison(s), research and development opportunities, hosting of small periodic events for the Company and a diversified group of high-profile contacts and relationships, use social media exposure, podcasts backing of various elements from professional sports as well as assist the Company in advising of potential merger partners and developing corporate partnering relationships. The Company, at the sole discretion of its board, may (in its discretion) pay an additional payment of $75,000 as permitted under this agreement based on performance. This additional payment will be recorded as a contingent liability on the Company condensed consolidated balance sheet until formally authorized by the Company’s board of directors. This agreement is terminable after six months. As of the date of this quarterly report, date, the aforementioned shares have been issued.

RESULTS OF OPERATIONS

For the three months ended June 30, 2021 compared to the three months ended June 30, 2020

The results of operations included herein contain only those operations that are part of our continuing operations. For discussion regarding our past operations which have since been disposed of, please refer to our Annual Report.

Net Revenue

During the three months ended June 30, 2021, the Company recognized net revenue of $33,367. Net revenues for the three months ended June 30, 2020 were $64,804. The Company’s sales came from online, distributors and wholesale clients. For the purposes of sales by sales channel segmentation, distributor sales include sales to customers that were distributors.

Sales by sales channel for the three months ended June 30,

	2021		2020
Distributors	$	-	$	-
Online	$	33,257		60,094
Wholesale	$	110		4,710
	$	33,367	$	64,804

Cost of Goods Sold

For the three months ended June 30, 2021, the Company had cost of goods sold in the amount of $15,203 for online and wholesale customers. For the three months ended June 30, 2020 was $45,531 as a result of sales of Tauri-Gum^TMto online customers and wholesale clients. For the purposes of cost of goods sold segmentation distributor cost of goods sold includes sales to customers that were distributors.

Cost of Goods Sold by sales channel for Tauri-Gum^TM for the three months ended June 30, 2021 and 2020 were:

	2021		2020
Distributor	$	-	$	-
Online	$	15,119		42,021
Wholesale	$	84		3,510
	$	15,203	$	45,531

Operating Expenses

Marketing and advertising expense

For the three months ended June 30, 2021, marketing and advertising expense from continuing operations was $96,279 compared to $33,066 for the same period in the prior year, respectively. The difference of $63,213 was primarily due to social media campaigns, SEO consulting work, sales territory development and website maintenance during the three months ended June 30, 2021.

Research and development

For the three months ended June 30, 2021, research and development expense was $13,439 compared to $1,817 for the same period in the prior year. The current year increased expense was largely due to the Kosher certification of the Tauri-Gum^TM product line in the three months ended June 30, 2021.

Fulfillment services

For the three months ended June 30, 2021, fulfillment services were $40,458 compared $20,450 for the same period in the prior year. The increase in current year expense was largely due to additional activity and increased e-commerce sales activity and product offering as well as the establishment of a new product warehouse in Brooklyn, NY.

General and Administrative Expense

For the three months ended June 30, 2021 and 2020, general and administrative expenses were $842,808 and $564,023, respectively. This increase of $278,785 was primarily attributable to a larger consulting fees of $316,922, increased legal fees of $48,674 and increased directors compensation, salary and bonus payments of $123,050 offset decrease in stock-based compensation of $183,463.

Depreciation and amortization

For the three months ended June 30, 2021 and 2020, depreciation and amortization expense was $1,245 and $219, respectively. Depreciation expense increase of $715 was due to depreciation expense on new computer, presentation equipment and furniture for the new office. Additionally, the Company had amortization expense of $313 for sales display in the new corporate office.

Interest Expense

For the three months ended June 30, 2021 and 2020, interest expense was $435,811 and $319,622, respectively. Interest expense increase of $116,189 was due to the increase of $184,425 for the issuance of commitment shares recorded as interest expense offset of lower recognition of debt discount of $75,562.

Net Income (Loss)

The Company generated a net loss from continuing operations of $825,678 for the three months ended June 30, 2021 in line with a net loss of $945,661 during the three months ended June 30, 2019. The reduced net loss in the three months ended June 30, 2021 was primarily due to Other Income of $143,701 compared to Other Expense of $345,359 offset by higher Operating Expense of $374,654 during the three months ended June 30, 2021.

Liquidity and Capital Resources

At June 30, 2021, we had cash of $66,894 and 1,557,222 of securities compared to March 31, 2021 of $49,826 and $1,334,425 of trading securities. We have historically met our cash needs through a combination of proceeds from private placements of our securities, loans and convertible notes. Our cash requirements are generally for purchases of inventory as well as selling, general and administrative activities. We believe that our cash balance is not sufficient to finance our cash requirements for expected operational activities, capital improvements, and partial repayment of debt through the next 12 months.

Net Cash provided by in financing activities during the three months ended June 30, 2021 and 2020 was $771,701 and $622,218, respectively. During the three months ended June 30, 2021, the Company received $790,000 proceed from notes payable, $100,000 from the sale of common stock offset by the repayment of note principal of $112,299. During 2020, the Company had proceeds from the sale of registered shares under the Tangiers Investment Agreement in the amount of $154,418, proceeds from the sale of common stock in the amount of $75,000 and $492,800 proceeds from notes payable.

As of June 30, 2021, current assets exceeded our current liabilities by $1,286,438 compared to current assets exceeding current liabilities by $1,229,211 at March 31,2021. At June 30, 2021, current assets were $2,668,603 compared to $2,396,567 at March 31, 2021. During fiscal year 2021, the Company’s increase in net assets was due to a $22,797 increase in the investment in trading securities. At June 30, 2021, current liabilities were $1,382,165 compared to $1,167,356 at March 31, 2021. The Company’s increase in current liabilities was mainly due to increased notes payable of $499,796 offset by lower accounts payable of $225,965.

Going Concern

During the fourth quarter of the year ended March 31, 2019, the Company began sales and marketing efforts for its Tauri-GumTM product line. During the three months ended June 30, 2021, the Company recognized net sales of $33,367 and a gross profit of $18,164, compared to net sales of $64,804 and a gross profit of $19,273 for the same period during the same period in the prior year. During the year ended March 31, 2021, the Company has in place multiple distribution agreements, was approved and provisioned to sell to many large retailers and ecommerce platforms. At June 30, 2021, the Company had a working capital surplus of $1,286,438 compared to $1,229,211 for the year ended March 31, 2021. Although the Company has a working capital surplus, there is no guarantee that this will continue therefore it still believes that there is uncertainty with respect to continuing as a going concern.

On July 1, 2019, months after the NYC Department of Heath announced a ban on cannabidiol in foods and beverages (mainly focused on restaurants and baked goods), the updated New York City Health Code was revised to include an embargoing of CBD-infused Edible(s) Products (including packaged products). The Company is hopeful that due to the recent regulatory regime for cannabinoid products implemented by the NYDPH, the New York City Council will remove the current CBD ban and implement regulations surrounding CBD products in a logical and prompt manner. The Company believes it is well positioned under the current regulatory structure and has taken a conservative approach towards its products, including, for example, ensuring that its product manufacturer periodically tests for compliance with the Agricultural Improvement Act of 2018, such as utilizing CBD oils from hemp plants which contain 0.3% or less THC content. Subsequent to the balance sheet date, the State of New York has determined that it is allowable to sell CBD Infused Edible products in the forms of both food and drink (inclusive of chewing gum). It was also determined that at no time can CBD be sold in products that contain either alcohol or tobacco. Additionally, the State of New York also said that NO CBD product may be sold if it contains more than 0.3% (1/333rd by Composition) THC. No Individual food or beverage product may contain more than 25mg of Hemp-Extracted Cannabinoids (“CBD” or “CBG”) per serving. Food and drink infused with CBD and Other Hemp Extracts must be packaged by the manufacturer and extracts cannot be added at the retail level. The Company’s entire product line will comply with these standards.

Even if the Company does raise sufficient capital to support its operating expenses, acquire new license agreements or ownership interests in life science companies and generate adequate revenues, or the agreements entered into recently are successful, there can be no assurances that the revenues will be sufficient to enable it to develop business to a level where it will generate profits and cash flows from operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern as determined by management. However, the accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

Contractual Obligations

Per Os Bio has contracted with the Company as the sole manufacturer of its Tauri-Gum^TM and are under contract to produce our product when ordered at approximately $6 per blister pack. Per OS is also required to have each batch independently tested to ensure that each piece of chewing gum must contain 10 milligrams (“mg”) of CBD Isolate, has 0% THC Content and is clear for all microbiology. Due to the implementation of efficiencies and reduction in market price of the most important “basic factors of production costs” CBD and CBG Isolate, the cost per blister pack (as of 12/31/2020) has been reset to approximately $4 per blister pack.

On July 15, 2020, the Company appointed Dr. Keith Aqua (“Dr. Aqua”) as an independent contractor to the position of Chief Medical Officer (“CMO”) pursuant the terms of an agreement, which carries a term of 12 months that expired on July 15, 2021. Under the terms of this agreement, Dr. Aqua provided a variety of services to the Company, for which the Company agreed to issue certain stock and cash as compensation to Dr. Aqua as previously reported. As of this report date the Company is negotiating the renewal of this contract.

Effective January 6, 2021, the Company moved its corporate headquarters to 4 Nancy Court, Suite 4, Wappingers Falls, New York 12590. The Company’s telephone number remains the same, phone: 917-796-9926. The Company entered into a two-year lease, expiring January 31, 2023. We will pay $19,200 ($1,600 per month) during the first year of the term and $21,000 ($1,750 per month) during the second year of the term. The Company paid $1,600 as a refundable security deposit.

Off-Balance Sheet Arrangements

As of June 30, 2021, the Company had no off-balance sheet arrangement as defined in Item 303(a)(4) of Regulation S-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Securities and Exchange Commission defines the term “disclosure controls and procedures” to mean a company’s controls and other procedures of an issuer that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the issuer’s management, including its chief executive and chief financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. The Company maintains such a system of controls and procedures in an effort to ensure that all information which it is required to disclose in the reports it files under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified under the SEC’s rules and forms and that information required to be disclosed is accumulated and communicated to the chief executive and chief financial officer to allow timely decisions regarding disclosure.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are not effective as of such date. The Chief Executive Officer and Chief Financial Officer have determined that the Company continues to have the following deficiencies which represent a material weakness:

	1.	Lack of oversight by independent directors in the establishment and monitoring of required internal controls and procedures;

	2.	Lack of functioning audit committee, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures;

	3.	Insufficient personnel resources within the accounting function to segregate the duties over financial transaction processing and reporting and to allow for proper monitoring controls over accounting;

	4.	Insufficient written policies and procedures over accounting transaction processing and period end financial disclosure and reporting processes.

To remediate our internal control weaknesses, management would need to implement the following measures:

	●	The Company would need to add sufficient number of independent directors to the board and appoint an audit committee.

	●	The Company would need to add sufficient knowledgeable accounting personnel to properly segregate duties and to affect a timely, accurate preparation of the financial statements.

	●	Upon the hiring of additional accounting personnel, the Company would need to develop and maintain adequate written accounting policies and procedures.

Currently, management does not have the resources nor will it in the near to mid-term future to accomplish all of these goals.

The additional hiring is contingent upon the Company’s efforts to obtain additional funding through equity or debt and the results of its operations, however, has added consultants to assist in the remediation of the weaknesses identified. Management expects to secure funds in the coming fiscal year but provides no assurances that it will be able to do so.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of the control system must reflect that there are resource constraints and that the benefits must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of August 13, 2021, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations.

ITEM 1A. RISK FACTORS.

Investing in our common stock is subject to a number of risks and uncertainties. You should carefully consider the risk factors described under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year ended March 31, 2021 filed on June 29, 2021 and in other reports we file with the SEC, and as set forth in certain updated or additional risk factor below.

The outbreak of the coronavirus may negatively impact our business, results of operations and financial condition.

The outbreak of the coronavirus may negatively impact our business, results of operations and financial condition. In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China, which has and is continuing to spread throughout China and other parts of the world, including the United States. On January 30, 2020, the World Health Organization declared the outbreak of the coronavirus disease (COVID-19) a “Public Health Emergency of International Concern.” On January 31, 2020, U.S. Health and Human Services Secretary Alex M. Azar II declared a public health emergency for the United States to aid the U.S. healthcare community in responding to COVID-19, and on March 11, 2020 the World Health Organization characterized the outbreak as a “pandemic”. The significant outbreak of COVID-19 has resulted in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and could adversely affect our business, results of operations and financial condition, including coordination and completion of financial and operational matters and attendance at our events resulting from social distancing, travel restrictions, movement and large gathering restrictions, the public’s fears associated with the Pandemic, including air travel. More recently in 2021, a “Delta” variant of the Covid-19 virus has reignited concerns of a new or more contagious spread of the virus as a result of this new strain. The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic or other health crisis and actions taken to contain or prevent their further spread, among others. These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition and results of operations.

Risks Related to Our Common Stock

We may need to finance our future cash needs through public or private equity offerings, debt financings or corporate collaboration and licensing arrangements. Any additional funds that we obtain may not be on terms favorable to us or our stockholders and may require us to relinquish valuable rights.

As of March 31, 2021, we had $66,894 of available cash as well as $1,557,222 held in trading securities at fair market value. We will need to raise additional funds or liquidate the remainder of our marketable securities to pay outstanding vendor invoices and execute our business plan. Our future cash flows depend on our ability to market and sell our common stock and to enter into licensing arrangements. There can be no assurance that we will have sufficient funds to execute our business plan or complete a strategic transaction, or that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us.

We cannot guarantee that we will generate significate revenues from our products in the near future. Therefore, for the foreseeable future, we may have to fund all or most of our operations and capital expenditures from cash on hand, public or private equity offerings, debt financings, bank credit facilities, other borrowings (including borrowings from our officers and directors) or corporate collaboration and licensing arrangements. We will need to raise additional funds if we choose to expand our product development efforts more rapidly than we presently anticipate.

If we seek to sell additional equity or debt securities or enter into a corporate collaboration or licensing arrangement, we may not obtain favorable terms for us and/or our stockholders or be able to raise any capital at all, all of which could result in a material adverse effect on our business and results of operations. The sale of additional equity or debt securities, if convertible, could result in dilution to our stockholders. The incurrence of indebtedness would result in increased fixed obligations and could also result in covenants that would restrict our operations. Raising additional funds through collaboration or licensing arrangements with third parties may require us to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us or our stockholders. In addition, we could be forced to discontinue product development, reduce or forego sales and marketing efforts and forego attractive business opportunities, all of which could have an adverse impact on our business and results of operations.

Uncertainty regarding Company’s ability to obtain a ‘cannabinoid hemp retailers” license.

The NYDPH has implemented regulations concerning the processing and retail sale of hemp derived cannabinoids, and pursuant to these regulations, Company is deemed to be operating as a “cannabinoid hemp retailer.” Furthermore, retailers selling cannabinoid hemp products are required to submit a completed Cannabinoid hemp retailer license application to the NYDPH on or before April 1, 2021. The Company has successfully submitted its application; however, the application is still pending full approval. If Company’s Cannabinoid hemp retailer license application is not approved, this could impact Company’s ability to maintain its business operations or subject it to penalties, fees, fines, or other financial consequences.

Legal Uncertainty Surrounding the Use of Industrial Hemp Derived Δ8 THC.

On August 21, 2020, the United States Drug Enforcement Administration’s (DEA) issued its Interim Final Rule for the Implementation of the Agricultural Improvement Act of 2018 (IFR), “to codify in the DEA regulations the statutory amendments to the Controlled Substances Act (CSA) made by the Agriculture Improvement Act of 2018 (AIA [or 2018 Farm Bill]), regarding the scope of regulatory controls over marihuana, tetrahydrocannabinols, and other marihuana-related constituents.” The IFR further stated that the classification of “synthetic tetrahydrocannabinols” was not impacted by the 2018 Farm Bill, and “synthetic cannabinoids” are still to be considered controlled substances under the CSA. The legal definition of “synthetic cannabinoids” is constantly evolving, and some argue that Δ8-THC could be deemed a controlled substance, given that it is produced via a chemical extraction process with hemp-based materials, typically hemp-derived CBD. Given this regulatory uncertainty, Δ8 THC’s potential classification under the CSA will not be fully understood until additional clarifying statements are issued by the DEA, or a judicial decision on these issues has been rendered. Since the implementation of the IFR, several states have issued bans on the use of industrial hemp derived Δ8 THC in consumer products. Furthermore, the NYDPH recently issued a set of regulations to address the use of industrial hemp derived Δ8 THC and Δ10 THC in cannabinoid hemp products manufactured and sold in New York. Future regulatory changes or enforcement actions by the DEA or state regulators, with respect to Δ8 THC, could have a materially adverse impact on the business, financial condition, results of operations or prospects of the Company.

Uncertainty regarding Company’s manufacturing partner’s ability to comply with the NYDPH’s ‘cannabinoid hemp processors” requirements for Δ8 THC production.

Due to recent regulatory changes implemented by the NYDPH, Δ8 THC is only permissible in “cannabinoid hemp products”, if such Δ8 THC was not “created through isomerization”. If Company’s manufacturing partners are unable to produce Δ8 THC pursuant to the NYDPH’s non-isomerization standards, Company’s Δ8 THC product offerings would be deemed to be non-compliant. Such non-compliance could have a materially adverse impact on the business, financial condition, results of operations or prospects of the Company.

Uncertainty regarding the NYDAM’s development of a State Plan.

Pursuant to New York Legislation S.6184/A.7680, the New York State Department of Agriculture and Markets (NYDAM) retains primary regulatory authority over the production and cultivation of industrial hemp within the State of New York. However, pursuant to the 2018 Farm Bill a State Plan must be submitted to the USDA for approval, in order to ensure that the NYDAM’s primary regulatory authority is recognized at the federal level. On October 4, 2020, the United States Senate passed a bipartisan continuing resolution, which included language to extend the deadline for the submission of a State Plan, until December 31, 2021. As of this date, the NYDAM has not yet formally submitted a State Plan and based on public comments issued by the NYDAM it is unclear as to when and how a formal State Plan will be submitted. Until a formal State Plan for New York has been published, submitted and approved by the USDA, it is unclear how the NYDAM will handle any conflicts with federal law which may arise due to New York’s current industrial hemp processors and manufacturers licensing structure. Such uncertainty could disrupt the Company’s business and result in a material adverse effect on its operations.

We may be classified as an inadvertent investment company.

We are not primarily engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities. Under the Investment Company Act of 1940, as amended (the “1940 Act”), however, a company may be deemed an investment company under section 3(a)(1)(C) of the 1940 Act if the value of its investment securities is more than 40% of its total assets (exclusive of government securities and cash items) on a consolidated basis.

As a result of investments the Company has made in public and privately held companies since and including 2017, the investment securities presently held by us exceeds 40% of our total assets, exclusive of cash items and, accordingly, we are currently an inadvertent investment company. As of June 30, 2021, the Company held publicly traded common stock, warrants and CALL options in eleven publicly traded company and warrants exercisable for common stock in three publicly traded companies. The Company also has investments recorded at cost in $224,106 private companies. As of June 30, 2021, the Company had purchased securities, warrants or options in eight different public companies at a cost of $1,079,961, including exercised warrants, and sold shares of five different companies receiving proceeds of $1,436,676.

An inadvertent investment company can avoid being classified as an investment company if it can rely on one of the exclusions under the 1940 Act. One such exclusion, Rule 3a-2 under the 1940 Act, allows an inadvertent investment company a grace period of one year from the earlier of (a) the date on which an issuer owns securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis and (b) the date on which an issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such issuer’s total assets (exclusive of government securities and cash items) on an unconsolidated basis. We have taken actions to cause the investment securities held by us to be less than 40% of our total assets and will continue to evaluate other feasible actions towards this end, which may include acquiring assets with our cash on hand, consummating a significant merger/acquisition transaction, or liquidating our investment securities. We also may seek a no-action letter from the SEC if we are unable to acquire sufficient non-securities assets or liquidate sufficient investment securities in a timely manner.

As Rule 3a-2 is available to a company no more than once every three years, and assuming no other exclusion were available to us, we would have to keep within the 40% limit for at least three years after we cease being an inadvertent investment company. This may limit our ability to make certain investments or enter into joint ventures that could otherwise have a positive impact on our earnings. In any event, we do not intend to become an investment company engaged in the business of investing and trading securities.

Classification as an investment company under the 1940 Act requires registration with the SEC. If an investment company fails to register, it would have to stop doing almost all business, and its contracts would become voidable. Registration is time consuming and restrictive and would require a restructuring of our operations, and we would be very constrained in the kind of business we could do as a registered investment company. Further, we would become subject to substantial regulation concerning management, operations, transactions with affiliated persons and portfolio composition, and would need to file reports under the 1940 Act regime. The cost of such compliance would result in the Company incurring substantial additional expenses and could result in the complete cessation of our operations, and the failure to register if required would have a materially adverse impact to conduct our operations.

Risks relating to our exposure to equity securities of other companies in which we are currently invested.

We are not primarily engaged in the business of investing, reinvesting, or trading in securities, and we do not hold ourselves out as being engaged in those activities; however, the Company has purchased securities of certain publicly traded and privately held companies and continue to hold a number of the securities obtained as part of such transactions, primarily in the form of equity or equity derivative securities. These investments carry risk of partial or total loss, as with any such investment of this kind, and we could lose all or some of the cash we have utilized in making such investments. We generally monitor the Company’s investments to keep abreast of the investments and positions, but do not portend to actively trade in these securities and we do not have broker-dealers daily monitoring our investments to take positions in the event of market swings or fluctuations, whether on the upside or downside; hence, these investments bear certain risks of loss or failure to attain maximum gain.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the three months ended June 30, 2021, the Company issued 5,737,500 shares for services rendered ($0.0395 to $0.129 per share).

During the three months ended June 30, 2021, the Company issued 1,800,000 shares for debt commitments valued at $201,000 ($0.09 to $0.0129 per share).

During the three months ended June 30, 2021, the Company received $100,000 for 2,500,000 shares of stock. The Company recorded these funds as a liability to issue stock as of June 30, 2021.

Subsequent to June 30, 2021, the Company issued additional shares of common stock as follows: (i); 475,000 shares under consulting agreements and (ii) 4,200,000 shares of restricted common stock to accredited investors for proceeds totaling $168,000 ($0.04/per share).

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable

ITEM 5. OTHER INFORMATION.

None

ITEM 6. EXHIBITS.

Exhibit Number		Description

4.1		Securities Purchase Agreement with GS Capital Partners LLC dated April 30, 2021 filed on Form 10-K June 29, 2021
4.2		Form of Tauriga Security Purchase Agreement offered to accredited investors for private placement

4.3		Securities Purchase Agreement with SE Holdings dated August 6, 2021

10.1		Board advisory agreement with Dr. Loucks dated May 15, 2021 filed on Form 10-K June 29, 2021
10.2		Strategic marketing and consulting agreement with Mayer and Associated dated June 14, 2021 filed on Form 10-K June 29, 2021
10.3		Convertible note with Tangiers Global LLC dated April 5, 2021 filed on Form 10-K June 29, 2021

10.4		Non-convertible note with GS Capital Partners LLC dated April 30, 2021 filed on Form 10-K June 29, 2021

10.5		Non-convertible note with GS Capital Partners LLC dated March 5, 2021 filed on Form 10-K June 29, 2021

10.6		Promissory Note with SE Holdings for $115,000 dated August 6, 2021

Exhibit 31.1		Certification of Chief Executive Officer of Tauriga Sciences, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2		Certification of Principal Accounting Officer of Tauriga Sciences, Inc. Required by Rule 13a-14(1) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1		Certification of Principal Executive Officer of Tauriga Sciences, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63

Exhibit 32.2		Certification of Principal Accounting Officer of Tauriga Sciences, Inc. Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and Section 1350 Of 18 U.S.C. 63

Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

Exhibit 101

101.INS		- XBRL Instance Document

101.SCH		- XBRL Taxonomy Extension Schema Document

101.CAL		- XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		- XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		- XBRL Taxonomy Extension Label Linkbase Document

101.PRE		- XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TAURIGA SCIENCES, INC. (Registrant)

Date: August 16, 2021	By:	/s/ Seth M. Shaw
		Seth M. Shaw
		Chief Executive Officer

	By:	/s/ Kevin P. Lacey
		Kevin P. Lacey
		Chief Financial Officer

TAURIGA SCIENCES, INC. 10-Q