Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
NOTE 1 – ORGANIZATION AND SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Zero Gravity Solutions, Inc. (the “Company”)
is a biotechnology company focused on commercializing scientific breakthroughs in the area of patentable stem cell technologies
designed for and derived from multiple experiments on the International Space Station (“ISS”). These technologies
are focused on improving world agriculture by providing valuable solutions to challenges facing humanity. The Company is
currently focused on a cost effective, ionic nutrient delivery system for plants that can delivery minerals and micronutrients
systemically at the cellular level of a plant (BAM-FX™) and the production and alteration of new varieties of novel stem
cells with unique and beneficial characteristics in the prolonged zero/micro gravity environment (Directed Selection). The
Company owns proprietary technology for its first commercial product, BAM-FX™ that can boost nutritional value and enhance
the immune system of food crops without the use of genetic modification.
The Company was organized on August 19,
1983 in the State of Delaware, under the name Monolith Ventures, Inc. to acquire and develop mineral properties. On January 12,
2012, the Company amended its Articles of Incorporation to change its name to ElectroHealing Technologies, Inc. under the laws
of the State of Nevada, in anticipation of a merger which did not occur. On January 11, 2013, the Company amended its Articles
of Incorporation to change its name to Zero Gravity Solutions, Inc. pursuant to the acquisition of intellectual property on December
3, 2012. On September 13, 2014, the Company formed BAM Agricultural Solutions, Inc. (BAM Inc.) as a wholly-owned subsidiary in
the State of Florida. On December 17, 2014, the Company formed Zero Gravity Life Sciences, Inc., (ZGLS) as a wholly-owned subsidiary
in the State of Florida.
Going Concern and Management Plans
The Company has experienced recurring losses and negative cash
flows from operations. At June 30, 2016, the Company had approximate cash balances of $2,101,000, working capital of $2,081,000,
total stockholders’ equity of $1,905,000 and an accumulated deficit of $14,519,000. These factors raise doubt about its ability
to continue as a going concern. To date, the Company has in large part relied on equity financing to fund its operations.
The Company expects to continue to incur losses from operations for the near-term and these losses could be significant as product
development, regulatory activities, contract consulting and sales and marketing related expenses are incurred. The Company believes
that its current working capital position will be sufficient to meet its estimated cash needs for the remainder of 2016.
If the Company does not obtain additional capital, the Company would potentially be required to reduce the scope of its research
and business development activities or cease operations. The Company continues to explore obtaining additional financing.
The Company closely monitors its cash balances, cash needs and expense levels. The accompanying consolidated financial statements
do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
Management’s strategic plans include the following:
- continuing to advance development and sale of the Company’s
principal product, BAM-FX™;
- pursuing additional capital raising opportunities; and
- continuing to develop prospective partnering or distribution
opportunities.
Basis of Presentation
Certain information or footnote disclosures
normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States
of America have been omitted, pursuant to the rules and regulations of the Securities and Exchange Commission for interim financial
reporting. Accordingly, they do not include all the information and footnotes necessary for a comprehensive presentation of financial
position, results of operations, or cash flows. It is management's opinion, however, that all material adjustments (consisting
of normal recurring adjustments) have been made which are necessary for a fair financial statement presentation. The interim results
for the period ended June 30, 2016, are not necessarily indicative of results for the full fiscal year. These unaudited financial
statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December
31, 2015.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
Cash and Cash Equivalents
For the purposes of the statement of
cash flows, the Company considers all highly liquid investments purchased with an original maturity of three months or less
to be cash equivalents. The Company had no cash equivalents at June 30, 2016 and December 31, 2015.
Principles of Consolidation
The accompanying unaudited interim consolidated
financial statements include the accounts of Zero Gravity Solutions, Inc. and its subsidiaries. All significant intercompany balances
and transactions have been eliminated in consolidation.
Inventory
Inventory is valued on a lower of first-in,
first out (FIFO) cost or market basis. Inventory consisted of:
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
Raw materials
|
|
$
|
5,510
|
|
|
$
|
8,163
|
|
Finished product
|
|
|
13,662
|
|
|
|
13,771
|
|
Consignment Inventory
|
|
|
10,602
|
|
|
|
-
|
|
Total Inventory
|
|
$
|
29,774
|
|
|
$
|
21,934
|
|
Property and Equipment
Property and equipment is stated at cost, less accumulated depreciation.
Expenditures for maintenance and repairs are charged to expense as incurred.
Depreciation is computed on a straight-line
basis over estimated useful lives. Property and equipment is reviewed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges taken during the six months
ended June 30, 2016 and 2015.
Concentration of Credit Risk
The Company at June 30, 2016 maintained
its cash balance with two major national financial institutions. The bank balance at June 30, 2016 exceeded the FDIC limits by
$132,205. The Company believes that its credit risk exposure is limited. The Company has never suffered a loss due to such excess
balances.
Fair Value of Financial Instruments
The Company accounts for financial instruments
under Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic (ASC) 820,
Fair Value Measurements
.
This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements,
ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into
three levels as follows:
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
Level 1 — quoted prices
(unadjusted) in active markets for identical assets or liabilities;
Level 2 — observable inputs
other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets
and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value
drivers are observable; and
Level 3 — assets and liabilities
whose significant value drivers are unobservable.
Observable inputs are based on market data
obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable
inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability
may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to
be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires
significant management judgment. There were no financial assets or liabilities measured at fair value, with the exception of cash
(Level 1) as of June 30, 2016 and December 31, 2015.
The carrying amounts of the Company’s
accounts receivable and accounts payable approximate fair value due to the relatively short period to maturity for these instruments.
The carrying value of the Company’s notes payable approximates fair value due to its short period to maturity and its stated
interest rates, combined with historic interest rate levels. The carrying value of the Company’s accounts payable and notes
payable related party are not practical to estimate due to the related party nature of the underlying transaction.
Revenue Recognition and Accounts Receivable:
Revenue is recognized when the following
four basic criteria have been met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred and risk of loss
has passed; (iii) the seller's price to the buyer is fixed or determinable; and (iv) collectability is reasonably assured.
Revenues are recorded less a reserve for
estimated product returns and allowances, which to date has not been significant. Determination of the reserve for estimated product
returns and allowances is based on management's analyses and judgments regarding certain conditions. Should future changes in conditions
prove management's conclusions and judgments on previous analyses to be incorrect, revenue recognized for any reporting period
could be adversely affected.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
At June 30, 2016, two customers accounted
for 89.9% of total accounts receivable- trade, each representing 72.9% and 13.9%, respectively. During the six months ended June
30, 2016, four customers accounted for 73.1% of net sales, each representing 32.8%, 16.4%, 14.5% and 9.4%, respectively. At December
31, 2015, four customer accounted for 100% of total accounts receivable - trade. The Company’s sales in calendar year 2015,
included sales to international customers located in Central and South America. During the six months ended June 30, 2016 there
were no international sales. At June 30, 2016, 72.9% of the account receivable - trade balance was due from the customer in Chile.
The Company extends credit to customers
generally without requiring collateral. The Company monitors its exposure for credit losses and maintains allowances for anticipated
losses. The Company records an allowance for doubtful accounts when it is probable that the accounts receivable balance will
not be collected. When estimating the allowance, the Company takes into consideration such factors as its day-to-day knowledge
of the financial position of specific clients, the industry and size of its clients. No allowance for doubtful accounts was recorded
at June 30, 2016 or December 31, 2015.
Stock Based Compensation
The Company recognizes the cost of employee
services received in exchange for an award of equity instruments in the financial statements and is measured based on the grant
date fair value of the award. Stock based compensation expense is recognized over the period during which an employee is required
to provide service in exchange for the award (generally the vesting period). The Company estimates the fair value of each stock
award at the grant date by using the Black-Scholes option pricing model.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
Costs equal to these fair values are recognized
ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for
awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later
periods are recorded to the extent actual forfeitures differ from our initial estimates: previously recognized compensation cost
is reversed if the service or performance conditions are not satisfied and the award is forfeited. The expense resulting from share-based
payments is recorded in general and administrative expense.
Loss per Common Share
Loss per share is calculated by dividing
the Company’s net loss applicable to common shareholders by the weighted average number of common shares outstanding during
the period. Diluted loss per share is calculated by dividing the Company’s net income available to common shareholders by
the diluted weighted average number of shares outstanding during the period. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. The effect of the inclusion of the
dilutive shares would have resulted in a decrease in loss per share. Accordingly, the weighted average shares outstanding have
not been adjusted for dilutive shares. Outstanding warrants and stock options are not considered in the calculation as the impact
of the potential common shares (totaling approximately 12,258,000 shares for the three and six months ended June 30, 2016), would
be to decrease the net loss per share.
Research and Development
Research and development costs are charged
to expenses as incurred.
Foreign Currency Transactions
The unaudited interim consolidated financial
statements are presented in United States Dollars. As of June 30, 2015, the Company had a bank account in a foreign currency. The
balance of this bank account was translated from its local currency (British Pounds) into the reporting currency, U.S. dollars,
using period end exchange rates. The resulting translation adjustments were recorded as a separate component of accumulated other
comprehensive loss. Revenues and expenses were translated using the weighted average exchange rate for the period. As of June 30,
2016, no such account existed.
Transaction gains and losses resulting
from foreign currency transactions were immaterial and recorded as foreign exchange gains or losses in the consolidated statement
of operations. The Company did not enter into any financial instruments to offset the impact of foreign currency fluctuations.
During 2015, upon the termination of the United Kingdom subsidiary, the Company transferred the remaining balance of accumulated
other comprehensive loss to operations. No balance exists at June 30, 2016.
Income Taxes
The Company accounts for income taxes under
the asset and liability method, in which deferred tax assets and liabilities are recognized for the future tax consequences attributable
to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis
and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected
to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment
date. A valuation allowance is required to the extent any deferred tax assets may not be realizable.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
The Company does not have an accrual for
uncertain tax positions as of June 30, 2016 and December 31, 2015. The Company files corporate income tax returns with
the Internal Revenue Service and the states where the Company determines it is required to do so. The Company’s policy
is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. At June 30,
2016, the Company did not have any accrued interest or penalties associated with any unrecognized tax benefits, nor was any interest
expense recognized during the six months ended June 30, 2016 or 2015.
Reclassifications
Certain
reclassifications have been made to prior year information to conform with the current year presentation.
Recently Issued Accounting Pronouncements
The
Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new
accounting pronouncement affects the Company's financial reporting, the Company undertakes a study to determine the consequences
of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the
Company's consolidated financial statements properly reflect the change.
In
May 2014, FASB issued Accounting Standards Update ("ASU") No. 2014-09
Revenue from Contracts from Customers
, which
supersedes the revenue recognition requirements in "Revenue Recognition (Topic 605)," and requires entities to recognize
revenue in a way that depicts the transfer of potential goods or services to customers in an amount that reflects the consideration
to which the entity expects to be entitled to the exchange for those goods or services. In July 2015, the FASB extended the effective
date of ASU 2014-09 by one year, to now be effective for fiscal years, and interim periods beginning after December 15, 2017, and
is to be applied retrospectively, with early adoption now permitted for fiscal years, and interim periods beginning after June
30, 2016. The Company is currently evaluating the new standard and assessing the potential impact on its operations and financial
statements.
In August 2014, the FASB issued ASU No.
2014-15,
Presentation of Financial Statements – Going Concern:
Disclosures of Uncertainties about an Entity’s
Ability to continue as a Going Concern. The new standard requires management to perform interim and annual assessments of an entity’s
ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide
certain disclosures if conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.
The guidance is effective for annual periods ending after December 15, 2016, and interim periods thereafter, early application
is permitted. The Company is currently evaluating the new standard and assessing the potential impact on its operations
and financial statements.
NOTE 2 – PROPERTY AND EQUIPMENT
Property and equipment are summarized as
follows:
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
June 30, 2016
|
|
|
December 31, 2015
|
|
Computer Equipment
|
|
$
|
15,332
|
|
|
$
|
7,082
|
|
Equipment and Furniture
|
|
|
74,529
|
|
|
|
53,944
|
|
Leasehold Improvements
|
|
|
17,557
|
|
|
|
-
|
|
Accumulated Depreciation
|
|
|
(15,929
|
)
|
|
|
(9,290
|
)
|
Property and Equipment - Net
|
|
$
|
91,489
|
|
|
$
|
51,736
|
|
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
NOTE 3 – RELATED PARTY TRANSACTIONS
Notes Payable
In July 2015, a director advanced the Company
$500,000 under a note payable for working capital purposes. The unsecured note payable bears interest at 8.5% per annum, is payable
quarterly, and was originally due in July 2016. In connection with the note, the Company issued warrants to purchase 350,000 shares
of the Company’s common stock at an exercise price of $2 per share. The Company calculated the fair value of the warrants
at $416,618 utilizing the Black-Scholes Model with the following assumptions: expected dividends of 0%, volatility of 184.2%, risk
free interest rate of 1.66% and expected life of 5 years. The relative fair value of the debt and warrants was recorded resulting
in a debt discount of $227,258 upon execution of the agreement. For the six months ended June 30, 2016, accretion of the debt discount
of $113,292 was recorded in other expenses on the statement of operations. Subsequent to the quarter the maturity date of the note
was extended to July 2017, as discussed further in Note 7.
Royalty Agreement
In 2013, the Company entered into a royalty
agreement, which was amended in 2015, with a key employee and principal stockholder of the Company and a current director of the
Company. The agreement has a term of 25 years, requires payments of royalties equal to 5% of gross sales of products derived from
certain patents held or licensed by the Company, including the BAM-FX™ product, and also a minimum monthly payment of $2,500
to be offset against future royalty obligations of the Company. Certain other payments made by the Company in relation to the maintenance
and protection of the Company’s rights in related patents to those held by the Company are to be applied against future royalty
obligations of the Company.
Sales subject to the royalty agreement
were $20,314 for the six months ended June 30, 2016. Sales subject to the royalty agreement were $82,965 for the six months ended
June 30, 2015. As of June 30, 2016 and December 31, 2015, $220,010 and $193,282 respectively, prepaid royalties is available to
be offset against future royalty obligations.
Consulting Agreement
During March 2015, the Company entered
into a consulting agreement with a director. The agreement had a term of 6 months, required payments of $200,000. $121,858 was
recorded as a component of general and administrative expense on the statement of operations for the six months ended June 30,
2015. At June 30, 2016, $75,000 was payable and at December 31, 2015, $90,000 was payable and included in accounts payable related
party on the balance sheet.
NOTE 4 – COMMITMENTS
Lease Commitments
The Company leases its offices and building
space under short term leases. These leases are renewable either monthly or annually. Lease expense was $19,097 and $25,478 for
the three months ended June 30, 2016 and 2015, and $37,433 and $43,193 for the six months respectively.
Research Commitment
In January 2016, the Company entered into
a Reimbursable Space Act Agreement (the “SAA”) with the National Aeronautics and Space Administration Ames Research
Center (“NASA ARC”). Pursuant to the SAA, NASA ARC will evaluate the Company’s nutrient delivery system
for commercial agriculture and NASA applications and the potential development of new agricultural technologies and products.
The Company provides funding and reimbursement for the costs incurred by NASA ARC under the SAA, but owns any resulting intellectual
property created pursuant to the SAA. The Company paid NASA ARC a total of $373,750 in the first quarter of 2016, which serves
as reimbursement for NASA ARC’s estimated expenses to carry out it responsibilities pursuant to the SAA. As of June
30, 2016 $155,750 has been recorded in R & D expense and approximately $218,000 is recorded in prepaid expense. The remainder
of the prepaid expense is expected to be charged to R & D expense by the end of 2016. The SAA remains in effect until the earlier
of completion of all obligations contemplated in the SAA or five years from the date of agreement.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
NOTE 5 – NOTES PAYABLE
The Company has two outstanding notes payable
utilized for financing corporate insurance premiums. The total outstanding was $66,769 and $142,756 as of June 30, 2016 and December
31, 2015 respectively. Both notes carry a rate of interest of 8% and are due in 2016.
NOTE 6 – EQUITY
Common Stock
Private placement offerings
During the six months ended June 30, 2016,
the Company issued 1,374,000 shares of common stock and warrants to purchase 1,374,000 shares of common stock pursuant to its
October 2015 private offering. Each unit consisting of one share of the Company’s common stock and a five-year warrant to
purchase an additional share of the Company’s common stock at $2.00 per share was sold for $1.25. Gross proceeds from the
offering were $1,717,500 with offering costs of $151,500. In connection with the offering, the Company issued fully vested, non-forfeitable
warrants to purchase 152,575 shares of common stock with an exercise price of $2.00 per share to the Company’s placement
agent.
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
Common stock issued for services
During the six months ended June 30, 2016,
the Company issued for services, 20,000 shares of common stock with a value of $25,000. The value of the common stock issued was
recorded in general and administrative expense for the six months ended June 30, 2016.
During the six months ended June 30, 2015,
the Company issued for services, 351,000 shares of common stock with a value of $452,000. The value of the common stock issued
was recorded in general and administrative expense for the six months ended June 30, 2015.
Warrants
Warrants issued for services
During the six months ended June 30, 2016,
the Company issued fully vested, non-forfeitable warrants to purchase 10,000 shares of common stock at an exercise price of $2.00
per share to employees and consultants for services rendered. The estimated fair value of $11,899 was based upon the following
management assumptions: expected dividends of 0, volatility of 184.2%, risk free interest rate of 1.38%, and expected life of the
warrants of 5 years.
During the six months ended June 30, 2015,
the Company issued fully vested, non-forfeitable warrants to purchase 631,000 shares of common stock at an exercise price of $0.50
per share, 195,000 shares of common stock at an exercise price of $3.00 per share and 50,000 shares of common stock at an exercise
price of $6 per share to employees and consultants for services rendered. The estimated fair value of $723,695 was based upon the
following management assumptions: expected dividends of 0, volatility of 157.54%, risk free interest rates of 1.29% - 1.69%, and
expected life of the warrants of 5 years.
Warrants issued with debt – related
party
During July 2015 the Company entered into
a note payable with a related party. In connection with the note the Company issued warrants to purchase 350,000 shares of common
stock at an exercise price of $2.00 per share (Note 3).
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2016
(Unaudited)
The following is a summary of the Company’s
warrant activity for the six months ended June 30, 2016:
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
Contractual
Life
|
|
|
Aggregate
Intrinsic
|
|
|
|
Number of Warrants
|
|
|
Exercise Price
|
|
|
(in Years)
|
|
|
Value
|
|
Outstanding – January 1, 2016
|
|
|
8,117,075
|
|
|
$
|
1.41
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
1,536,575
|
|
|
|
2.00
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancelled/Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding and exercisable - June 30, 2016
|
|
|
9,653,650
|
|
|
$
|
1.53
|
|
|
|
3.7
|
|
|
$
|
1,621,989
|
|
The aggregate intrinsic value in the table
above represents the total intrinsic value (the difference between the estimated stock price on June 30, 2016 and the exercise
price, multiplied by the number of in-the-money options) that would have been received by the warrant holders, had all warrant
holders been able to, and in fact had, exercised their warrants on June 30, 2016.
Stock incentive plan options
During November 2015, the Company adopted
its 2015 Equity Incentive Plan. The Plan provides stock based compensation to employees, directors and consultants, as more fully
described in the Plan. The Company has reserved 4,000,000 shares under the Plan. During the six months ended June 30, 2016, the
Company granted 2,605,000 options to employees and officers of which 1,920,000 were fully vested. The grant date fair value of
$3,131,958 was based upon the following management assumptions: expected dividends of $0, volatility of 184.2%, risk free interest
rates of 1.14%-1.50%, and expected life of the options of 5 years.
|
|
|
|
|
|
|
|
Weighted
Average
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
|
|
|
|
|
|
Weighted Average
|
|
|
Contractual
Life
|
|
|
Aggregate
Intrinsic
|
|
|
|
Number of Options
|
|
|
Exercise Price
|
|
|
(in Years)
|
|
|
Value
|
|
Outstanding – January 1, 2016
|
|
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
Granted
|
|
|
2,605,000
|
|
|
|
1.25
|
|
|
|
|
|
|
|
|
|
Exercised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cancelled/Forfeited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding - June 30, 2016
|
|
|
2,605,000
|
|
|
$
|
1.25
|
|
|
|
9.6
|
|
|
$
|
-
|
|
Excercisable – June 30, 2016
|
|
|
1,920,000
|
|
|
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
Nonvested Shares
|
|
|
Weighted Average
|
|
Nonvested Shares
|
|
Underlying Options
|
|
|
Exercise Price
|
|
Nonvested at January 1, 2016
|
|
-
|
|
|
$
|
-
|
|
Granted
|
|
|
2,605,000
|
|
|
|
1.25
|
|
Vested
|
|
|
(1,920,000
|
)
|
|
|
1.25
|
|
Cancelled/Forfeited
|
|
|
|
|
|
|
|
|
Nonvested at June 30, 2016
|
|
|
685,000
|
|
|
$
|
1.25
|
|
ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial
Statements
June 30, 2016
(Unaudited)
NOTE 7 – SUBSEQUENT EVENTS
On July 19, 2016, Michael T. Smith, a member
of the Company’s Board of Directors, agreed to an amendment of his promissory note in the principal face amount of $500.000
(the “Note”), which matured on July 16, 2016, discussed further in Related Party Transaction - Notes Payable (Note 3).
The amendment retroactively extends the maturity of the Note to July 16, 2017 and provides that the principal and accrued but unpaid
interest under the Note may be converted, in whole or in part, into the Company’s common stock at a conversion price equal
to $1.25 per share. The amendment did not amend any other provision of the Note and it will continue to accrue interest pursuant
to the original terms of the Note.
Subsequent to June 30, 2016, 125,000 options were issued to officers, employees and consultants under
the Plan, exercisable at $1.25 per share.