ZERO GRAVITY SOLUTIONS, INC.

FORM 10-K ANNUAL REPORT

DECEMBER 31, 20152018

TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS

Statements in this report may be "forward-looking“forward-looking statements."” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, strategies, predictions or any other statements relating to our future activities or other future events or conditions. These statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors, including those described above and those risks discussed from time to time in this report, including the risks described under "Risk Factors" and any risks described in any other filings we make with the SEC.U.S Securities and Exchange Commission (“SEC”). Any forward-looking statements speak only as of the date on which they are made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this report.

Management’s discussion and analysis of financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, we evaluate these estimates, including those related to useful lives of property and equipment, the allowance for doubtful accounts and stock based compensation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates.

PART I

Company Overview

Organizational structure

Zero Gravity Solutions, Inc. (“we”a Nevada corporation (including its predecessors, “we”, “us”, “our”, the "Company"“ Company”, “ZGSI” or the "Registrant"“ Registrant”), a Nevada corporation, is aan agricultural based biotechnology company focused on commercializing technology derived from, and designed for long term spaceflight and planetary colonization with significant applications to agriculture on Earth.earth. These technologies are focused on improving world agriculture by providing valuable solutions to challenges facing humanity, including climate change stress and soil degradation threats to world agricultureagricultural production and the abilityincreasing inability to feed the world’s rapidly growing population. The Company’s business model is currently focused on its two primary business segments: 1) BAM-FX™,technology application, BAM-FX^® which is a cost effective, ionic nutrient delivery systemplatform and stimulant for plants that can deliverpromotes the delivery of minerals and micronutrients systemically at the cellular level of a plant, and 2) Directed Selection™, which relates to the production and alteration of new varieties of novel stem cells with unique and beneficial characteristics in the prolonged zero/micro gravity environment of the International Space Station. These novel stem cells, if developed, could be patented for commercial sale to third parties in the agricultural and human regenerative medical markets.systemically. ZGSI is headquartered in Boca Raton, Florida.

Our business activities are separated between two primaryconducted in our wholly owned subsidiaries.subsidiary, BAM Agricultural Solutions, Inc., (“BAM.”) and our 98% owned subsidiary, Specialty Agricultural Solutions, Inc. (“SASI”). BAM Inc.”), oversees productBAM-FX^®’s commercial introduction and business development through in-fieldproduct trials and data validation with crop growers and distributors that have established business networks in agricultural markets, manufacturing, sales and salesagronomy support. In addition, BAM manages the introduction of our BAM-FX™Gardener’s Choice^®, a ready to use product for the home and garden retail markets. SASI, which was incorporated in house or through our domestic2018, is introducing a commercial product for sale by hydroponic legal cannabis and international independent distributors.hemp grow operations. Zero Gravity Life Sciences Inc. (“ZGLS”) is responsiblewas originally formed for any space research projects, life science applications of our technology and conducting research on future BAM Inc. product lines. We believe that the separationZGLS is currently inactive.

Operating Activity Overview

A separate wholly owned subsidiary, Zero Gravity Solutions, LTD (ZGS Ltd.), domiciled

The Company is focused on near-term revenue generation through:

BAM-FX^® is an enabling technology platform, registered as a fertilizer application in England, was engagedfifty (50) domestic states and approved for commercial import and sale in European marketChile, Colombia, China, Paraguay, India and business development. Brazil.  Gardener’s Choice^® is a product derived from the core BAM-FX^® technology registered as a fertilizer application and approved for sale in all fifty (50) domestic states.

During the first quarter of 2015,2018, the Company conducted a reviewprudently devoted resources to domestic and international trials with growers and independent third parties for both commercial and retail, ready to use, products.

Commercial agricultural markets generally adopt new products after multiple years of its operating expensessuccessful trials showing consistent results. The Company believes that BAM-FX^® will gain market recognition and use of resources and determined that certain administrativeacceptance as it continues technical product development and support costs were outside the scopefor application timing and dosage rates, validation of the 2015 business plan. Accordingly,technology attributes and proper product pricing providing growers an appropriate return on their investment. The Company conducted commercial trials on high value crops domestically and internationally during 2018.

The Company, through its affiliation with Nurture Earth, a technology development and outsource research and development company headquartered in Aurangabad, India, conducted extensive product development trials on claims and efficacy of Gardener’s Choice^® in 2018. In addition, research and trial work performed on pigeon pea and pomegranate showed BAM-FX^® applications activated natural latent plant defenses to limit or eliminate the impact of biotic pathogens. The pathogens include aspergillus or collar rot on newly germinated pigeon pea and Telya disease or bacterial blight in pomegranate.

The Company made reductionsalso conducted significant domestic trials on avocado and wine grape during 2018. The avocado trials are conducted in personnelcooperation with the California Avocado Commission and curtailed operationswith our distribution partner in Mexico. Early trial results have shown improvement in micronutrient and chlorophyll levels. Yield and quality results from these trials are expected in 2019. Wine grape trials in California commenced in May 2018 treating 40 acres of ZGS Ltd. during April 2015. ZGS Ltd. was liquidatedPinot Noir grapes against 40 acres of control and concluded during the fourth quarter of 2015.2018. Yield and quality results in treated vines, which were under pressure from a viral disease, red blotch, matched the quality and yield of the untreated control without pressure from red blotch. The wine grape trial reinforced the Company’s claim that BAM-FX^® causes a latent plant defense response to enable a plant to withstand biotic stresses.

Business development in China, India and the Philippines continued through the efforts of consultants and distributors during 2018. The efforts included, but were not limited to, trials on wine grape, vegetables, cotton and flowers. The Company redirected those financial resourceshas distribution partners in China and Philippines and has identified potential distribution partners in China. We expect to BAM-FX™generate orders and product sale revenue through the distributors’ networks in each of these countries during 2019.

We engaged with a potential distributor in Brazil, DallGree Comercio de Productos Agricola, EIRELI, (“Dallgree”) beginning in 2017 and continued developing the business relationship through 2018. Dallgree ordered 250 gallons of product during 2018 for sale and market development trials with growers on soybean, corn, vegetable and commercializationsugar cane crops, the majority of which showed crop benefits during the year. We expect to execute a business development and distribution agreement with Dallgree during the second half of 2019.

BAM, entered into a License and Distribution Agreement during 2018 with a group of Mexican businessmen having longstanding relationships within the Mexican agricultural markets and a successful history in Northbuilding companies in Mexico and South American marketsin the U.S. The initial crop introduced to growers under this agreement for trial and registration for import and sale was avocado.

Throughout 2018, the Company continued product and market development of Gardener’s Choice^® and received initial purchase orders from certain big box home and garden retailers during the fourth quarter 2015 continuing throughout 2016. of 2018 which were fulfilled in 2019. In order to produce and deliver upon expected demand, the Company engaged Assemblies Unlimited, a national full turnkey contract packaging, contract filing and fulfillment services provider for the Gardener’s Choice^® product line.

The Company expects international distributors to address European markets for BAM-FX™ at a future time when adequate resources are availablepurchase commercial quantities of BAM-FX^® and domestic retail entities to pursueorder or purchase the European marketsCompany’s home and all local regulatory and import requirements are satisfied for import of BAM-FX™.garden, ready to use product, Gardener’s Choice^® during 2019.

Domestic commercial activity:

The Company is focused on implementing a near-term revenue generation plan through the introduction of the Company’s first commercialbegan conducting domestic product BAM-FX™, to the world’s agricultural markets. BAM-FX™ is an ionic micro-nutrient delivery system for agriculture. The Company conducted field trials on a variety of crops in laboratory and academic settings as well as in fieldin-field applications on grower/end-user crops during 2014 and expanded field applications with those and additional trial participants during 2015. During 2015, the Company initiated2014. Trials continued in excess of sixty (60) trialssubsequent years on a variety of field crops, vegetables and fruits, with first year participants and additional trials commenced with initial participants. Manya number of our second season trials have completedwhich were validated by independent accredited third-party laboratories or are near completion. The final tabulated results for these trials are expected to be available during the first or second quarter of 2016, however, initial observations showacademic institutions, showed significant yield, nutrient and biomass improvements for crops treated.

In excess of one hundred and fifty trials were conducted during 2017. The trials included grower experience, universities and independent third-party laboratories on crops including, but not limited to, tomato, grape, berry, onion, soybean, wheat, cotton, melon, stone fruit, corn, tobacco and cannabis. For commercial markets to develop, multi-year third-party validation trials are necessary. A number of third-party validation trials planned for 2017 were not funded due to lack of financial resources. As a result, our agronomists and certified crop advisors confined their 2017 efforts to identifying appropriate product application timing in crop growth cycles and dosage rates to maximize yield, quality and plant health.

In 2018, the Company targeted a limited number of crops that have high market value for the grower and have shown significant yield and quality improvement from prior tests. We believe BAM-FX^® can produce a significant return on grower/end-userinvestment for growers of high value crops, expandedwhich will then provide the Company an opportunity to penetrate agricultural input markets with a shorter market acceptance period.

The Company targeted grape, avocado, berries, soybean, tobacco and certain vegetable crops during 20152018. Based on significant improvements in yield and quality on medicinal cannabis from testing with growers in Mendocino and Humboldt Counties in California, the Company added legal cannabis to its list of target crops for 2018. Revenue focused trials which continue in progress, are conducted in cooperation with the California Avocado Commission. Early trial results have shown improvement in micronutrient and chlorophyll levels and appear to have increased the tree canopy, which allowed the tree to shield most of its emerging fruits from a frost in early 2019. The control did not express an increase in canopy and showed significant loss. A positive revenue focused trial on wine grape concluded in December 2018 showing BAM-FX^®’s ability to control the spread of virus in the Midwest United States, Rocky Mountain States, California, Florida, Pakistan, Chile, Mexicoplant. We believe, based on the results of our work in avocado and Guatemala. To support its commercialwine grape, both participants and field trial efforts,grower observers will begin incorporating BAM-FX^® into their nutrition programs in 2019.

The Company’s market strategy is to develop relationships with potential channel partners. In general, a channel partner is an established agricultural input distributor and/or service provider with which the Company has hiredexecuted a distribution agreement. Three domestic distribution agreements were signed during 2016 and two domestic distribution agreements were signed in 2017. No domestic distribution agreements were signed in 2018. Although we expected our domestic channel partner strategy would begin generating product revenue during the 2018 growing season, the Company did not have sufficient financial resources to provide sustained technical support for the product introduction process with the distributors’ customers.

During 2018 while continuing to pursue a channel partner strategy and our technical product development fieldwork, the Company expanded its approach and began discussions with three large prospective domestic agricultural industry leaders and a number of regional agricultural input distributors. The objective was to explore technological synergies and product integration strategies incorporating BAM-FX^® into existing product lines to enhance the effectiveness of these products. We believe the Company’s technology is a delivery platform or contractedproduct enhancement that, when incorporated into other agricultural products, such as fertilizer, the resulting product's effectiveness and grower return on investment is improved. The Company plans to continue its 2018 product integration discussions and technology development with these agricultural industry leaders recognizing that the benefit of these efforts will not result in near term revenues, instead are a part of a longer term product integration and licensing strategy.

         During 2018, we were introduced to a potential strategic partner with an interest to incorporate BAM-FX^® into an existing commercial product. The potential strategic partner is a company owning a large portfolio of agricultural and outdoor product brands and has annual net revenue in excess of two billion dollars. We participated in a competitive trial conducted by a third party laboratory.  The trial compared BAM-FX^® performance results with the results of another name brand plant food supplement product on tomato, vinca and turf. Overall, BAM-FX^® results showed favorably. We are continuing product development integration by testing the dry formulation in conjunction with the potential strategic partner’s brand fertilizer.

International commercial activity:

International business development efforts begun in 2015 continued throughout 2018. The Company’s international business strategy, in general, is to engage existing agricultural entities, which have strong distribution channels within a country, that are financially able to introduce new products into local agricultural markets. We have initiated business development activities through existing management relationships or trusted referrals. The Company undertakes the cost of developing the relationship, provides technical product support including research, trial data and product application protocols. The local entity contracts directly with the Company and incurs the cost of business development efforts within the country. By the end of 2018, we completed three years of product efficacy and business development work in India, and two years of product efficacy and business development work in China, Philippines and Brazil. We have found that the product acceptance cycle internationally, although subject to replication of results, is shorter than the domestic acceptance cycle. BAM-FX^® is approved for commercial import and sale in Chile, Colombia, China, Paraguay, India and Brazil.  We expect to obtain government approval for import and sale in Philippines and Mexico during 2019.

           We employ the technical talents of certified crop advisors and qualified personnelagronomists, both domestically and internationally, to support our commercialization and revenue generation efforts. During the second half of 2017, the Company began to focus on crops with high market value for salesgrowers enabling the grower to realize a return on the cost of purchasing and marketing support,applying BAM-FX^® As a result of the change in field test researchfocus, the Company began and toxicology services.continued through 2018 to reduce the number of technical consultants and advisors employed domestically. In India and China, the Company has maintained or increased the use of contracted technical and business development talent to introduce BAM-FX^® into those markets.

During the fourththird quarter of 2015,2016, the Company expanded its commercial marketingformed an agronomy and science team to integrate agronomy and crop advisor personnel and centralize technical product introductionknow-how in Asia and North and South America. The domestic agronomy and science team provided technical support to growers and channel partners in domestic and international markets during 2018.The team maintains the Company’s relationships with science advisors at the NASA-Ames Research Center (“ NASA ARC”), which were developed pursuant to a numberReimbursable Space Act Agreement (“ RSAA”) executed in January 2016. Due to lack of countriesadequate resources, we were unable to continue our research work pursuant to the RSAA during 2018.

           The Company expects to increase its agronomy support to international markets in the Asia Pacific region. 2019 as those changes are necessitated by business development efforts with expectation of product revenue.

Paraguay

The work has been undertaken byCompany executed an exclusive distribution agreement with a distributor in Paraguay during 2016. In collaboration with that distributor, the Company completed Paraguay’s government product testing requirements for commercial import and obtained import approval from Servicio Nacional de Calidad y Sanidad Vegetal y de Semillas (“SENAVE”), the government agency overseeing agricultural imports. BAM-FX^® tests were successfully completed by the Paraguay Agricultural and Technological Center in January 2017 and submitted to SENAVE. BAM-FX^® was registered and approved for commercial sale in Paraguay during the second quarter of 2017.

The distributor in Paraguay completed commercial soybean trials and compiled results from trials begun in 2017 during the first quarter of 2018, which showed grower benefits resulting in an increased return on their investment. Due to the distributor’s complete shift of resources to other endeavors, we are currently evaluating and exploring other distributors to exploit this market. Although we recognize the significant market potential in Paraguay, the Company expects to cautiously approach business development efforts when sufficient resources permit.

Brazil

BAM-FX^® was introduced to Brazil during 2016. The Company contracted with Fundacao de Apoio A Pesquisa Agricola, a private nonprofit entity established under the laws and registered with the Brazilian government, which provided positive product test results for the Brazilian government’s product registration and import approval process. A Brazilian channel partner, DallGree, was identified during 2017 and introduced to the Company by one of the Company’s agronomy and science consultants affiliated with the University of Florida, familiar with agricultural markets and distributors in Brazil. During the first and second quarters of 2019, one of our agronomy team provided technical support and business development assistance to DallGree, in meetings with multiple Brazilian growers applying BAM-FX^®. We expect to finalize a distribution agreement with DallGree during the second half of 2019.

Colombia

           BAM-FX^® was introduced into Colombia during 2016.  The Company contracted with an independent Colombian laboratory during 2016 to test and provide evidence of effectiveness of BAM-FX^® for the Colombian government’s registration and approval to commercially import product, which we received during 2017. The Company engaged an import-export company in Colombia during 2016 to introduce BAM-FX^® to commercial agricultural markets in Colombia, pursuant to a foreign business development consulting agreement. The Company terminated the agreement in 2018 and we are working with a business development consultant to identify a Colombian distributor to sell, market and distribute BAM-FX^® within Colombia.

India

Pursuant to a non-exclusive distribution agreement executed in 2015. The2015 for certain countries in the Asia-Pacific markets, a distributor engaged a potential sub-distributor in India during 2016, Nurture Earth. During 2018 the Company terminated the non-exclusive distribution agreement and continued business development effort focuses on farming operations managed by entities within the distributor’s existing business networkefforts in Taiwan, Indonesia, Vietnam, India Thailand, Malaysiadirectly through Nurture Earth.

Nurture Earth, in addition to providing technical support for product development of BAM-FX^® and Singapore. Based on the distributor’s meetingsGardener’s Choice^® during 2017 and 2018, conducted trials with growers in a number of those countriestarget customers, both large agricultural users and distributors. Foliar applications and seed treat trial work showed yield improvements on vegetables of approximately fifty percent (50%), cotton approximately twenty-eight percent (28%) and tomato approximately forty eight percent (48%) of harvested fruit weight and approximately eighty three percent (83%) in seeds. Seed treat results on pigeon pea showed positive germination and in excess of a ninety percent (90%) survival rate when exposed to a fungus, aspergillus, against a control survival rate of less than ten percent (10%).

During the first quarter of 2019, Nurture Earth began treating fifteen (15) plants infected with bacterial blight, Telya disease, out of a total population of five hundred and fifty (550) pomegranate plants. Telya has no known cure, reduces fruit yield by up to 90% and is widely spread in India. Although subject to additional observation and testing, it appears that the BAM-FX^® treatment arrested the spread of the bacterial blight and promoted plant regeneration.

The Company, with the assistance of Nurture Earth, obtained approval from the Indian government to import BAM-FX^® for commercial sale during the first quarter of 2019. We believe growers and sub-distributors in India identified by Nurture Earth will begin purchasing and applying our product in 2019. We received a product purchase order from Nurture Earth and expect to fulfill that order in the fourth quarter of 2019.

China

The Company contracted a business development entity with offices in the U.S. and China, Asia 21 Communications, LLC (“Asia 21”), as its project manager for marketing and product testing in China during 2017. The results of the trials during 2017 in China were positive in certain crops and have encouraged growers to replicate the trials in 2018, the second year of tests in grapes, rice and tobacco. Trials in wheat, soybean, berries, tomato and stone fruit showed either marginally improved crop yield or yield less than ten percent (10%), which growers consider statistically insignificant. We believe these marginal results are due to application protocols, which were not optimized. Trials with wine grape, conducted successfully in 2017, were replicated in 2018, showing marginal improvement primarily due to growers’ limited use of nutrient programs in one out of five years of which 2018 was a permitted year. Although trial results were positive, we have been asked to conduct one additional trial in 2019, a year, in which, nutrient programs are not permitted.

On February 12, 2018, the Company was notified that BAM-FX^® was approved for import and commercial sale within China.

A number of potential distributors have been identified in China, however, the Company has no formal distribution agreements with distributors in China, at this time. Although we hope to generate nominal revenue from sales to growers through Asia 21 during 2019, we do not expect to generate significant revenue through distributors in China during 2019. 

Chile

After a review of ongoing costs associated with the Company’s operations in Chile and potential for near term commercial sales and collection of accounts receivable, the Company determined during the fourth quarter of 20152017 that the cost associated with penetrating and firstmaintaining the Chilean market would require significant additional resource commitments during 2018, which we determined would be better utilized in markets with shorter term sales prospects. The Company began supporting the Chilean operations financially during 2015. Initially the Company expected the Chilean operation would obtain and provide its own financing to support operating as a distributor in the country. Despite successful trials conducted in Chile, the expected funding was not secured by the potential Chilean distributor. We believe it is necessary to engage an established and financially stable distributor to continue developing the market for BAM-FX^® in Chile. The Company expects to resume business development efforts when financial resources are available to identify, engage and support a distributor.

Mexico

On February 20, 2018, BAM and a group of Mexican businessmen (the “Lichtinger Group”) entered into a License and Business Development Agreement Mexico, effective as of February 13, 2018 (the “Business Development Agreement”). Following consummation of the Agreement, the Lichtinger Group formed Agro Space Tech SA de CV de RV (“Agro Space”), a Mexican company, to which BAM received a twenty percent (20%) equity ownership interest. This interest was recorded with the formation of the Company, but we did not receive certificates. The Business Development Agreement provides Agro Space with the exclusive right to import, package, sell and distribute BAM’s product lines and promote its brand, as well as other “white label” brands as they are introduced, in the Mexican markets, and a limited manufacturing right to modify the presentation of BAM’s products and dilute such products, all during the term of the Business Development Agreement. Trials with avocado growers began in the fourth quarter of 2016, test quantities of BAM-FX™ have been provided to validate trial2018 with final results obtained during 2015. We expect, based on successful validation, growers in these countries will commence commercial application of BAM-FX™ during the endfourth quarter of 2019.  During the second quarter 2016.of 2019, Agro Space began trials on berry crops. We expect our agronomy team will continue to work with Agro Space’s agronomy expert in Mexico during 2019 to develop protocols through numerous tests of BAM-FX® in diverse geographies and soils. We believe Agro Space will obtain approval for import and sale of product in Mexico during 2019. Assuming the success of the trials and receipt of import approval, we anticipate commercial product introduction efforts could begin in 2019.

TheHaiti

             During the fourth quarter of 2017, the Company openedentered into a manufacturing facilitydistribution agreement with a group for product sale and distribution to the government of Haiti. Although we expected an initial order of 50,000 gallons of BAM-FX^® during 2018, due in part to political problems within the country, we do not expect orders will be forthcoming in 2019, if at all.

Domestic Retail Market Activity 

During 2016, the Company investigated entering the home and garden retail market with a specially formulated ready to use offering of BAM-FX^®. During 2017, the Company applied for the trademark, Gardener’s Choice^®, the name of the retail product and on January 10, 2018 received notice of allowance from the USPTO.

Although we expected to test market acceptance using pilot programs in certain big box stores during 2017, the Company determined that additional product development work was needed. During 2017, product efficacy, stability and safety validation work, including corrosivity, was expanded with the assistance of Nurture Earth and completed during the third quarter of 20142018. Product formulation was refined for the ready to supplyuse markets during 2018. Efficacy testing was successfully performed on a wide range of home and garden flowers and vegetables. Product configuration and artwork were finalized during the fourth quarter of 2018. The Gardener’s Choice^® label was registered with and the product approved for trial and expected future product demand and began the commercial roll out of BAM-FX™ into the world’s agricultural markets. The Company conducted a completesale by all state regulatory review of the manufacturing operationsagencies during the first quarter of 20152019. Product artwork was finalized for production during the first quarter of 2019.

As part of Gardener’s Choice^® product introduction strategy, the Company displayed product at and during 2015 made certain policystaffed a booth at the GIE Expo 2017 and procedural changes2018 and the Ace Hardware 2018 Spring and Fall Conventions to ensure compliance with good manufacturing processes and regulatory requirements.showcase the product. During the thirdfourth quarter of 2015,2018, our representatives also attended the Great Lakes Expo and PLMA, Private Label Trade Show. We delivered orders for Gardener’s Choice^® counter displays and aisle displays in the first and second quarter of 2019. Our response from attending industry trade shows, including the Ace Hardware 2018 Fall Convention and the GIE Expo 2018 during October 2018, and initial marketing efforts to several co-op and big box buyers at both regional and national levels has been positive and generated interest in 2019 product placement.

             We have developed an overall marketing strategy for introduction and promotion of Gardener’s Choice^® including print and social media. One component of our strategy incorporates educational programming on certain internet platforms. Sales and presentation materials for retail consumers and buyers and retail point-of-sale displays are being developed to deploy during 2019.

The Company engaged two senior level retail sales and marketing consultants during 2018 with existing sales representative networks to introduce and place product in regional and national big box retail outlets, including Ace Hardware. We also engaged a senior level retail marketing professional to introduce and place product in national lower cost retail and health care retail stores to broaden product exposure and customer experience.

We have engaged a product contract packaging company, Assemblies Unlimited, for product bottling, packaging and logistics assistance. Assemblies Unlimited has production capacity to handle our requirements, based on expected product orders, in the foreseeable future.

Specialty Crop Activity

In 2016, a licensed grower in Mendocino Country provided the Company anecdotal information on significant yield improvement the grower realized by applying BAM-FX^® to cannabis plants. The grower conducted the work without the Company’s participation. As a result of yield improvement reported, the Company participated in two independent trials during 2017 on medical cannabis in California with growers licensed with the State of California. A trial in Mendocino County resulted in an increase in cannabinoid levels from 15% in the control crop to approximately 23% for the crop treated with BAM-FX^®. Complete yield results were not available for this trial as wildfires caused partial crop damage. A second trial in Humboldt County, California, with a licensed grower, showed an approximate forty four percent (44%) yield increase using BAM-FX^® over the control group.

With the positive trial results obtained and the number of inquiries the Company received about the use of BAM-FX^® on cannabis crops during the fourth quarter of 2017, the Company added cannabis and hemp as target crops for 2018. The Company restricted its business activities to sale and distribution of product to stores catering to cannabis growers, providing the picks and shovels to growers.

During the second quarter of 2018, the Company engaged a chemical process engineermaster cannabis grower as a subject matter expert consultant to analyze plant operationsassist with understanding the market and audit adherencedeveloping retail markets in Michigan, Colorado, California and Oklahoma. Product was introduced to regulatory requirements.Michigan grow stores using one ounce samples for counter display and product advertising in the Michigan Medical Marijuana Report. Due to positive response from growers’ tests of the one-ounce samples, during the fourth quarter of 2018 we began selling product to grow stores. Customers began purchasing product resulting in store reorders in the first quarter of 2019. We began product marketing in Oklahoma during the first quarter of 2019.

Manufacturing Operations

We operate a manufacturing facility in Okeechobee, Florida, managed by an experienced biochemical engineer. Manufacturing is conducted on an as needed batch process. The Company continues to make process improvements and modifications to existing equipment and facilities to enhance efficiencies resulting fromefficiency, comply with regulatory requirements, control the recommendations made which will enable it toquality of raw materials used in production and consistently provide stable andcustomers a quality consistent product. The Company expects to add a second manufacturing facility during 2016, to meet anticipatedhas two product mixing lines, which increase production capability for expected product demand.

During the second quarter of 2015, our chief scientist began developing new formulations of BAM-FX™ to address nutritional needs of plants that are additive to our product’s current zinc and copper formulation. The new formulations address known plant deficiencies of boron, manganese, magnesium and iron and can be manufactured to include all or numerous combinations of these elements. The new formulations have been tested by an independent laboratory, which verified the existence of and the ability to combine those elements in solution. We expect to commence stability testing and limited trials of new formulations during 2016. We also expect to obtain licenses to sell those products once all regulatory and labeling requirements are met.

The Company’s long term objectives include the commercialization of ZGSI’s space derived Directed Selection™ technology, which predicts that plant and animal stem cells exposed to prolonged microgravity in space can be endowed with new characteristics beneficial to society. In conjunction with our collaborators, National Aeronautics and Space Administration (“NASA”), the United States Department of Agriculture (“USDA”) and the University of Florida, over the past three years, we conducted scientific studies on six NASA sponsored flights to the International Space Station (“ISS”). These experiments demonstrated that the gene expression of plant cells in zero/microgravity changes substantially, and furthermore, provided us with strong evidence that these changes can be directed toward beneficial attributes.

Our Directed Selection™ research aims to produce new varieties of proprietary, patentable stem cells for plants with desirable traits, such as the ability to better survive environmental challenges (i.e. temperature or climate change) or to resist disease. Adaptive changes in the plant will be accomplished without the need for additive or subtractive genetic engineering, thus eliminating public concerns about genetically modified organisms (“GMO”). The plant still uses the capabilities that are a natural part of its genetic potential, through altered gene expression that enables adaptation toward valuable traits. Another important aspect of our space derived IP capitalizes on space flight experiments showing the unique effects of zero/microgravity on mammalian cells. Space-based technology imparts the likely ability to reproduce undifferentiated multi-potent human stem cells in substantially larger quantities and more rapidly than is possible on Earth. Long-term goals include revolutionary advancements in stem cell differentiation, cellular macrostructure assembly, vascularization and wound healing. Because both humans and animals use very similar metabolic pathways, we also expect to produce patented stem cells that can provide beneficial treatments to commercial livestock. We believe that this area may lead to significant future business opportunities for the Company.

The Company continues to develop technical relationships to validate the science incorporated in BAM-FX™ and identify additional commercial markets. During January 2016, the Company executed a new five-year Reimbursable Space Act Agreement, (“RSAA”), with NASA Ames Research Center (“NASA ARC”) and an existing investor and contractor, Intrinsyx Technologies Corporation (“Intrinsyx”). The RSAA will give the Company access to NASA scientists and laboratories, which when engaged, may assist in identifying and documenting additional attributes of the Company’s science and potential applications in other segments of agricultural markets. Because the RSAA is reimbursable, in which the Company reimburses NASA for their technical services, ownership of intellectual property resulting from the research work performed, is retained by the Company.

The primary objectives of the RSAA are:

a. To establish the scientific basis for action of ZGSI products,

b. To quantify the impact of ZGSI products on plant growth and productivity,

c. To evaluate and test the impact of ZGSI products on yield physiology of selected crops important to commercial agriculture and NASA applications, and

d. To evaluate and test the potential utility of ZGSI products to NASA space biology and life support applications.

NASA ARC will utilize its unique, ground-based, controlled environment facilities and research personnel to address a series of science-based questions relevant to both ZGSI and NASA. The scientific data will be jointly evaluated by ZGSI and NASA ARC to determine utility of the ZGSI products to commercial agriculture and NASA applications. If jointly agreed and based on evaluation of the scientific data, space flight and other opportunities could be developed to test a potential role in achieving NASA goals in plant-based space biology and life support pursuits.

The RSAA lays out a four-phase plan of work (each a “Phase”). Phases Two through Four will depend both on the successful execution of the previous Phase and joint agreement between NASA ARC and ZGSI.

ZGSI, working with NASA ARC, expects to understand the mode of action and physiological effects leading to increased yields currently observed on earth in commercial agricultural systems. ZGSI will gain access to NASA ARC’s unique facilities designed specifically to conduct ecophysiological studies of the type necessary to address the science questions of interest to ZGSI. Additionally, ZGSI will discover if BAM-FX™ truly has applications for growing plants in the controlled conditions of spaceflight and for human colonization of other worlds. ZGSI expects to optimize BAM-FX™ application methods in controlled environment agriculture on earth and for use in space flight applications.

During October 2015, the Company entered into an agreement with Intrinsyx to undertake a plant growth experiment on broccoli aboard the ISS utilizing hardware developed by Intrinsyx to house the experiment and following protocols designed by the Company. The Company expects its experimental payload to be carried to the ISS aboard a Space-X flight to occur A reverse osmosis water treatment system provides consistent water quality. Manufacturing operations during the second half of 2017 concentrated on process and procedure documentation, quality control and production precision. During 2018, we completed documentation of our standard operating procedures. During the third and fourth quarter of 2016.2018, we integrated inventory control and product delivery systems to coordinate product deliveries to TF Fulfillment, our Gardener’s Choice^® fulfillment vendor. We believe our plant capacity will be adequate for expected future product requirements. 

In 2016, the Company plans, in conjunction with NASA ARC, the University of Florida, Space FloridaResearch and the USDA, as well as other state and federal governmental agencies and agricultural co-ops and consortiums to apply and obtain research grants, which would, if obtained, increase the resources for and accelerate the advancement of the Company’s initiatives, previously noted.Development Activity

We believe the Company’s proprietary technologies enable the development of a diverse product line with unique solutions to big problems, representing significant potential revenue and profit opportunities. Due to the market scope and the associated regulatory needsrequirements to reach full profit potential, ZGSI’s strategy is to enter into partnership agreements and execute non-exclusivebusiness affiliations by executing distribution agreements, domestically and internationally, with industry-leading companies to supplement necessaryagriculture product distributors which could leverage our collective resources and expedite revenue generation. In addition, we believe our proprietary technologies represent a delivery platform or enabling system that could enhance the performance of agricultural inputs for other agricultural companies’ products. We believe product integration and associated research will be a component of our business activity in 2019.

The Company developed scientific relationships with NASA ARC, Ohio State University. UC Davis, Utah State, University of Iowa and Penn State University during 2016 to understand and validate the science incorporated in BAM-FX^® and identify additional commercial attributes. The Company did not have the financial resources to fully exploit these relationships during 2018 due to financial constraints. We engaged Texas A&M on cotton trials during 2018, which although successful, were not conclusive due to widespread adverse weather conditions on Texas cotton fields during the year. We expect to collaborate with Iowa State University during 2019 to show the efficacy of certain new products including a dry formulation.

Pursuant to the RSAA with NASA ARC, the Company has access to NASA scientists and laboratories. Because the RSAA is reimbursable agreement, whereby the Company reimburses NASA for technical services, the Company retains ownership of intellectual property resulting from the research work performed.

NASA ARC used its unique, ground-based, controlled environment facilities and research personnel to address a series of questions relevant to both ZGSI and NASA during 2016 through the first half of 2017. The scientific data is jointly evaluated by ZGSI and NASA ARC to determine utility of the ZGSI products to commercial agriculture and NASA applications. First year research pursuant to the RSAA was completed during the first half of 2017. The studies were conducted in both soil pots and hydroponic systems with near optimal nutrient supply. The results, which showed a significant improvement in plant productivity, suggest that the effects of BAM-FX^® include improvement in nutrient use efficiency and enhancement of photosynthetic efficiency which causes an increase in the amount of biomass produced per unit of light energy absorbed by the plant.

As jointly agreed and based on evaluation of the scientific data, space flight opportunities have been identified to test our potential role in achieving NASA goals in plant-based space biology and life support pursuits. On February 21, 2017, the Company’s research experiment using BAM-FX^® was successfully delivered to the ISS, launched from the Kennedy Space Center on February 18, 2017. In collaboration with NASA and Inrinsyx Technologies Corporation (“Intrinsyx”), the experiments studied the growth and nutritional effects of BAM-FX^® in broccoli seedlings in microgravity, advancing scientific knowledge to promote the growth of fresh, nutrient-dense food for astronauts on long duration space missions. In a report issued by Intrinsyx, the space flight experiment test was successful as the results obtained during space flight supported the initial hypothesis that using BAM-FX^® in plant growth media enhanced broccoli growth for both roots and shoots over untreated controls with an approximate doubling of growth size and fivefold greater dry weights obtained on orbit. The Company additionally participated in launched research experiments on June 3, 2017 and April 3, 2018 in collaboration with Intrinsyx.

From the scientific work of NASA ARC, ZGSI expects to understand BAM-FX^®’s mode of action and physiological effects leading to increased yields currently observed on earth in commercial agricultural systems and address the science questions of interest to ZGSI and queries from channel partners. Additionally, ZGSI expects to discover how to utilize BAM-FX^® for applications for growing plants in the controlled conditions of spaceflight and for human colonization of other worlds. ZGSI plans to optimize BAM-FX^® application methods in both controlled environment agricultures on earth and in space flight applications.

We have maintained our relationship with and provided trial data and product development information to NASA ARC personnel with the hope of continuing our relationship under the RSAA. Pending adequate financial resources, we hope to fund additional research and continue working with NASA ARC in 2019 to finalize: the preliminary results of our 2016 and 2017 studies and, identify the scientific evidence of the action of BAM-FX^® within the plant structure. 

In collaboration with Nurture Earth and based on research performed on our behalf, certain proteins found to express after application of BAM-FX^®, were identified in 2018. These findings provide the basis for additional research to understand how and if BAM-FX^® acts as a primer. A primer evokes a plant’s defense responses against biological and environmental stress. We expect to utilize the date from this research to file certain patent applications during 2019.

Corporate History and Structure

The Company engaged in various business activities and enacted a series of name changes from 2003 to 2013 until we adopted our current name and business plan of Zero Gravity Solutions, Inc. on January 11, 2013.

The Company’s Prior History and Timeline

Zero Gravity Solutions, Inc. was initially incorporated in the State of Idaho as Hazelwood-Gable, Inc. on August 19, 1983 to engage in the business of developing mineral resources. The Company engaged in limited operations until 2003. On June 19, 2002, the Company changed its corporate domicile to the State of Nevada and, on November 25, 2003, changed its name to American Thorium, Inc. On December 10, 2003, the Company entered into an agreement to acquire certain mining claims and changed its name to Thorium Nuclear Energy, Inc. on March 5, 2004. On March 8, 2006, the Company changed its name to Hazelwood Ventures, Inc. and began looking for new business ventures. On June 14, 2006, the Company changed its name to Monarch Molybdenum & Resources, Inc. and on November 27, 2007 entered into a merger agreement, whereby it was to acquire certain mining claims from Thorium Energy, Inc. and changed the Company's name to Thorium Energy, Inc. The merger agreement was rescinded on March 19, 2008 and the Company changed its name to Monolith Ventures Inc. on April 2, 2008 and with the intent to acquire or merge with one or more businesses. On December 30, 2011, the Company acquired ElectroHealing Holdings, Inc., which held certain patents, patent applications and other technologies and/or licenses pertaining to medical device technology and changed its name to ElectroHealing Technologies, Inc. on January 12, 2012. Subsequent to the transaction, management re-evaluated the merits and benefits of the ElectroHealing Holdings, Inc. acquisition and began to explore possible alternatives. Accordingly, we executed a rescission agreement on December 20, 2012 that returned the previously acquired patents and technologies in exchange for the cancellation of the shares of our common stock previously issued in the acquisition.

Formation of ZGSI and the Company’s Current Structure

On December 3, 2012, we entered into a Patent Acquisition Agreement with John W. Kennedy whereby we acquired certain patents applications and technologies related to the Company’s current Directed Selection™ business segment. In connection with the acquisition of this technology, we changed our name to Zero Gravity Solutions, Inc. on January 11, 2013 to better reflect our new business endeavors, and issued 11,500,000 shares of our authorized, but previously unissued common stock. In connection with this acquisition, we moved our corporate headquarters from Salt Lake City, Utah to its current location at 190 NW Spanish River Boulevard, Suite 101, Boca Raton, FL 33431. Our website address is www.zerogsi.com.

On July 30, 2013, John W. Kennedy assigned to the Company the entire right, title and interest in, to and under the invention and provisional patent application for Bioavailable Minerals for Plant Health which became the basis for the Company’s BAM-FX™BAM-FX^® business segment.

The Company currently has two wholly owned subsidiaries: BAM Agricultural Solutions, Inc. (“BAM Inc.”) and Zero Gravity Life Sciences, Inc. (“ZGLS”).ZGLS.  BAM Inc. is a Florida Corporation, whichcorporation that holds and controls the manufacturing, sales and revenue generation of the Company's agricultural product, BAM-FX™BAM-FX^®.  ZGLSZGSL is a Florida Corporation, which holds and controls the Company’s Directed Selection™ business segment and the related research and development work.corporation that is currently inactive. The Company had previously wholly owned Zero Gravity Solutions, LTD, (ZGS Ltd.), and BAM Agricultural Solutions, LTD. both(both private United Kingdom limited companies based in the United Kingdom,Kingdom) which had been created to service the Company's expected operations and interests in the European Union (EU).Union. During the fourth quarter 2015, both UK companies were liquidated,liquidated.

On September 25, 2018, the Company incorporated SASI. As of December 31, 2018, the Company owns 98% of SASI. The remaining 2% is owned by outside investors.  The Company’s cannabis and the financial resources redeployed and focused on marketshemp business initiatives will be conducted through SASI. Activity for SASI began in the United States and Chile.2019.

The Company currently has 17 employees, of which 17all are full timefull-time employees. The Company has selected December 31st as its fiscal year end.

          On April 29, 2019, we entered into a Settlement Agreement with John W. Kennedy, the Company’s former Chief Science Officer and a former member of the Board of Directors, pursuant to which, among other things, the Company assigned USPN 9,816,071, Patent Application No. 15/729,038, Patent Application No. 14/244,084 and International Patent Serial No. PCT/US 15/24045 (collectively, the “Intellectual Property”) to Mr. Kennedy, and Mr. Kennedy agreed to effectuate the transfer of two million shares of common stock of the Company back to the Company (the “Settlement Agreement”). The Intellectual Property relates to technologies that the Company does not intend to pursue. The Settlement Agreement was entered into in order to resolve certain disputes between the Company and Mr. Kennedy concerning various licensing and royalty agreements entered into between the parties covering the Intellectual Property.

Principal Product Lines

BAM-FX™BAM-FX^®

BAM-FX™BAM-FX^® is an ionic micro-nutrientmicronutrient delivery system for food crops. BAM-FX™plants. BAM-FX^® was originally developed by John W. Kennedy, our former Chief Science Officer and former director, to grow food crops in space vehicles designed for deep space human missions, but has been found to have potentially far reaching applications for agriculture on Earth. BAM-FX™earth. BAM-FX^® is a proprietary formulation, ofcurrently including micronutrients zinc and copper, in a precise ratio used to treatimprove plant mineral deficienciesperformance by providing a delivery system that allows plants to move mineral ions tomore efficiently uptake nutrients. BAM-FX^® is not classified as a genetically modified organism.  The BAM-FX^® formula, works as an enhancement of or bio-stimulant for other agricultural plant treatment regiments. BAM-FX^® enhances the mineral deficient areas in plants. The benefits of BAM-FX™ are accomplished without the use of genetic modification (“GMO”) or traditional fertilizers, soil amendments or supplements. Instead, the BAM-FX™ formula transports highly bio-available, balanced, ionic minerals systemically into the biological system of a plant using a mineral complex carrier in an ionic form, which penetrates and distributes nutrients throughout the plant's cellular structure. BAM-FX™ delivers a diversityuptake of nutrients in measurably larger quantities than can be achieved through standard and traditional methods, and it is capable of substantially cutting costs with its versatile application possibilitiesimproving crop yields and its enhancement of multiple products.potentially reducing input costs.

BAM-FX™BAM-FX^® can be applied either by soaking seedsseed treat or directsoak, soil application at time of planting andusing drip irrigation systems or as a foliar treatment of the plant at latercertain stages of the plant’s development. Further, the benefits to crops are accomplished without the use of additive or subtractive genetic modification techniquesOur product development work during 2018 indicates that seed and therefore, crops treated with BAM-FX™ are not categorized as GMOs. As major agricultural markets throughout the world are concerned about the long-term effects of genetically modified plants and crops that are ingested by humans, we believe that the fact that crops treated with BAM-FX™ are not categorized as GMOs creates a competitive market advantage and provides a wider potential customer basefoliar treatments result in these areas.optimal plant response.

Noted in the “BAM-FX™ Trials” section below, BAM-FX™Academic and grower product trials, validated by independent laboratories and academic institutions, showed BAM-FX^® treated plants have shownexhibit faster germination, higher yields, increased plant resistance to harmful environmental factors and higher quality fruit and vegetables in tests with commercial farmers.vegetables. Trials have shown that applications of BAM-FX™BAM-FX^® on various crops reduces the need for multiple applications of other products, which we believe will save agriculture a considerable amount ofgrowers time and money while creating faster growing, healthier, and more robust plants. Additionally, we believe BAM-FX™BAM-FX^® may provide significant value for farmers, growers, and world agriculture through: 

Food crops offer the best source of nutrition for humans since many supporting nutrients require organic carriers and are not normally absorbed by using vitamin and mineral supplements alone. As BAM-FX™BAM-FX^® can be applied to any plant, we anticipate a substantial demand for BAM-FX™BAM-FX^® to support improved crop health and nutrition.

BAM-FX™ Trials

In 2014, BAM-FX™ product development and commercialization activities spanned a wide range of studies, in terms of crop plants, test parameters, geographic region, and potential customer base. Early product testing used controlled conditions of indoor facilities to study BAM-FX™’s impact on seed germination, early seedling growth, and impact to young plants. Later testing progressed to small-scale outdoor test plots, conducted both internally and in the hands of commercial field application specialists, farm managers and candidate early adopter customers. In total, BAM-FX™ product testing to date has found that the product provides significant benefits to plant growth and yield, such as rooting activity, plant biomass, maturation time, BRIX (sugar content), and – most importantly – overall crop yield and improved nutrient access by the plant, as demonstrated by the ability to reduce fertilizer application.

In 2015, we conducted second season tests with a number of growers from 2014. These trial applications were primarily foliar applications during the growth cycle of the crops. These tests included but were not limited to wine grapes, table grapes, avocado, beans, tomatoes, rice, berries, stone fruit, grape, corn, onions, barley, wheat, and leafy greens. We also initiated a number ofThe Company completed trials with new growers, their first season of testing, independent agricultural laboratories and consultants and undertook a collaborative research effort utilizing BAM-FX™ to increase sugar or Brix content of tobacco for use as a biofuel.

A sample of our 2015 trials and results, including a detail discussion of our wine grape trial to provide an understanding of trial methodology and specificity and two trial summaries, are as follows:

High Value Crop: Detail of Wine Grape Trial

The field trial, analyses and harvest was conducted jointly by Intrinsyx and Guglielmo Winery staff.

For the 2014 first season trial, a total of 300 mature Carignan vines were selected with 150 vines in three separate adjacent rows marked for BAM-FX™ treatment and 150 marked in three separate adjacent rows as untreated controls. Additionally, 150 mature Zinfandel vines were selected with 75 marked for the BAM-FX™ treatment and 75 marked as control untreated vines. The vines were chosen because all vines were of similar age, health, size and spacing.

These wine grapes are normally dry farmed but due to the local drought conditions, one quarter of an acre foot of water was applied by sprinkler sets during July 2014. This was the only water manually applied all year. Additionally, micronized wettable sulfur was applied as a fungicide, following manufacturer recommendations for wine grapes.

The first foliar spray was applied to both test plots during June 2014 when grape bunches or clusters were just starting to form at a rate of 50 oz. of BAM-FX™ stock per acre at a concentration of 0.33 oz. BAM-FX™ stock per gallon of water. The second application was applied seven days later during July at a rate of 50 oz. of BAM-FX™ stock per acre at a concentration of 0.50 oz. BAM-FX™ stock per gallon of water. At this time the green grapes on the BAM-FX™ treated appeared slightly larger than the control and new growth was noticedeffects of BAM-FX^® on medicinal cannabis with young leaves and tendrils being more pronouncedcertified licensed growers on the BAM-FX™ treated vines.

The third and final foliar spray of BAM-FX™ was applied during late July when the grapes start to ripen and turn purple. The application rate was 50 oz. BAM-FX™ stock per acre at a concentration of 1 oz. BAM-FX™ stock per gallon of water.

During September 2014, bunches of grapes were randomly harvested from ten vines from both BAM-FX™ treated vines, and control vines, and taken to an onsite analytical lab for direct comparisons. Guglielmo personnel crushed and juiced the bunches to analyze the juice for sugar content or degrees Brix (one degree Brix is 1 gram of sucrose in 100 grams of solution and represents the strength of the solution as percentage by mass). Each gram of sucrose will turn into about a one half gram of alcohol when fermented. Both the Carignan and Zinfandel grapes tested from vines treated with BAM-FX™ had increased sugar content.

The juice was also measured for titratable acidity or “total acidity.” Acids in wine are an important component in both winemaking and the finished product, having a direct influence on the color, balance and taste of the wineoutdoor crops as well as crops in a highly controlled internal environment during 2017 and 2018. The same positive results we have seen with commercial agriculture crops were also evidenced with cannabis. During the growthfourth quarter of 2018, the Company introduced a sixteen (16) ounce liquid concentrated product into hydroponic retail stores in Michigan with 2019 introductions planned for Colorado and vitality of yeast during fermentation and protecting the wine from bacteria. The measure of the amount of acidity in wine is the total of all acids present, while strength of acidity is measured according to pH. Most wines have a pH between 2.9 and 3.9. Generally, the lower the pH, the higher the acidity in the wine.Oklahoma.

There are three primary acids found in wine grapes: tartaric, malic and citric acids. Acids play significant roles in winemaking and finished wines. In wine tasting, the term “acidity” refers to the fresh, tart and sour attributes of the wine which are evaluated in relation to how well the acidity balances out the sweetness and bitter components of the wine. The BAM-FX™ treated Carignan vines yielded grapes that had a slightly lower acid content, and the Zinfandel grapes had a slightly higher acid content. Conversely, the Carignan grapes treated with BAM-FX™ had a slightly higher pH and the Zinfandel grapes treated with BAM-FX™ had a slightly lower pH.Gardener’s Choice^®

Gardener’s Choice^® is a ready to use, home and garden product developed for consumer retail markets. Gardener’s Choice^® is a derivative of BAM-FX^®, a liquid product packaged in a six ounce and a thirty-two (32) ounce hand held trigger spray bottle. During harvest it was visually obvious that2018, the BAM-FX™ treated vines had larger bunch, berry sizesCompany completed product development of and greater yields.registered Gardener’s Choice^® for sale in all domestic states. The quantitative results obtained from the 2014 fall harvest showed that BAM-FX™ treated vines had an approximate two-fold increase in both bunchproduct is intended for use on household and berry weights for Carignangarden flowers, herbs and Zinfandel vines.vegetables.

The trial results demonstrated that in addition to increasing overall wine grape production, BAM-FX™ increased the sugar content and overall quality

For the 2015 second season field trial, a different area of the Guglielmo vineyard was chosen with new vines. The focus shifted to applications made only on Zinfandel wine grapes. After making many other field trial observations in orchard crops, and based on the 2014 season trial results, a different application rate and timing protocol was chosen for the 2015 field trial.Revenue Cycle

A total of 300 mature Zinfandel vines were surveyed and marked off in a block having 150 vines in three separate adjacent rows for BAM-FX™ treatment, and 150 vines in three separate adjacent rows as untreated controls. These vines were chosen because all vines were of similar age, health, size and spacing with a total of 907 vines per acre. These wine grapes are normally dry farmed in the Santa Clara Valley of California, but due to the drought conditions, one quarter of an acre foot of water, was applied by sprinkler sets during July 2015. This was the only water manually applied during the growing season. A micronized wettable sulfur was applied as a fungicide starting in early April with an additional application during each of the three following months (May-July), following manufacturer recommendations for wine grapes.

At first sign of early bud break in March 2015, 50 oz. of BAM-FX™ stock per acre was applied in a spray, at a concentration of 0.75 oz. BAM-FX™ per gallon of water in the early morning, targeting the top woody area, new small leaves and emerging swollen buds around vine knobs and the branch starts. Secondarily, BAM-FX™ was also soil applied by slightly wetting the surrounding soil directly underneath vines above roots through an intentional overspray on the same pass.

A second evening fine mist spray was then applied as a foliar to leaves only at a concentration of 0.5 oz. BAM-FX™ per gallon of water at a rate of 50 oz. BAM-FX™ stock per acre onto leaves. This was applied strategically in May 2015, during the early to mid-vegetative phase.

Finally, at the onset of grape berry ripening, a third foliar fine mist evening spray was applied at a concentration of 0.5 oz. BAM-FX™ stock per gallon of water at a rate of 50 oz. per acre onto leaves and grape bunches during July 2015. Due to warm temperatures and an early spring, the 2015 growing season started and ended early with an August2015 harvest date for the Zinfandel grapes.

At harvest time it was visibly apparent that the BAM-FX™ treated vines had a significantly greater yield. Guglielmo personnel harvested each row in this trial directly into forklift bins and then weighed the subsequent harvest from each of the six rows of 50 vines, three rows treated with BAM-FX™ and three un-treated control rows. The yield results from the 2015 trial showed an approximate doubling of yields obtained from the BAM-FX™ treated vines. Generally, the treated vines appeared greener and had visibly more leaves and vine biomass.

In addition to collecting weights at harvest, due to the visibly apparent shoot growth differences and leaf biomass, immediately prior to harvest the vines in each row were measured for a variety of growth parameters. The summarized results showed that the BAM-FX™ treated vines compared to the control had: greater average number of grape bunches per each vine (28 BAM-FX™ vs. 23 control); larger average bunch area per each vine (10 in² BAM-FX™ vs. 8.5 in² control); greater total bunch area per vine (296 in² BAM-FX™ vs. 212 in² control); ten inch longer average branch length (38 in BAM-FX™ vs. 28 in control); a longer total vine branch length (610 inches BAM-FX™ vs. 448 inches control); and the same average number of branches per each vine.

At the time of the 2015 harvest, crush-juice quality parameters were again measured, showing only a slight average increase for sugar content (Brix) without any statistical differences, and with little or no difference in titratable acidity or pH.

A Juice Quality panel including zinc and copper analyses, and a Berry Phenolic profile was completed on samples that had been shipped overnight after the day of harvest to Enartis Vinquiry Laboratories in California. The Juice Quality panel revealed results consistent with the findings from Guglielmo Winery laboratory, that in BAM-FX™ treated berries there was no difference in the sugar content (“^oBrix”) or the pH. There was however an apparent 15% average decrease in the titratable acidity compared to results received at harvest at Guglielmo which showed little or no difference in titratable acidity. The Enartis analysis showed an 8% average decrease in the malic acid content of BAM-FX™ treated vines. It appears that BAM-FX™ advanced the maturity of these vines compared to controls because malic acid is known to decline in grape berries starting at veraison, the onset of ripening.

The Juice Quality panel also demonstrated no difference in ammonia content of juice from BAM-FX™ treated vines compared with the control but did find a 7% average increase in assimilable amino nitrogen in juice from BAM-FX™ treated vines.This is important because specific forms of nitrogen in grape juice (ammonia and nitrogen containing amino acids) arenecessary for the successful fermentation ofgrape juice intowine. Results suggest that BAM-FX™ can potentially decrease the nitrogen fertilizer requirements for crops by increasing the nitrogen use efficiency of plants. A 7% average increase in amino nitrogen may be an indicator of this resulting from enhanced nitrogen uptake and amino acid assimilation processes stimulated perhaps by vines having adequate zinc and copper content.

Analyses also showed a 45% average higher zinc and 14% average higher copper content in the juice from the BAM-FX™ treated vines. This demonstrates that BAM-FX™ bioavailable ionic forms of zinc and copper enter vines through the shoots and at least in part are transported into berries and the resulting juice. The copper values in grape juice from BAM-FX™ treated vines are well below the mark where negative impacts on wine quality have been reported. These results help confirm suggested protocols are valid and use of the product as tested does not result in any entry barriers to the wine grape production market.

Lastly the grape Berry Phenolic profile results are of major importance because the suite of phenolic compounds in grapes include several hundred molecules and the ratios are responsible for the taste, color, mouthfeel and overall quality of wine. These phenolic compounds include anthocyanins, proanthocyanidins, tannins, or catechins, phenolic acids, stilbenoids, flavonols, and dihydroflavonols. The results from these tests demonstrated that berries harvested from BAM-FX™ treated vines had no average difference in their tannin content when compared to untreated controls. However, the results in BAM-FX™ treated grape berries compared to controls do show an important 19% average increase in total anthocyanins and also a 5% average increase in the total phenolic content. The results are very positive because an increase in total anthocyanins and total phenolics demonstrates a clear positive effect of BAM-FX™ treatments on the quality of these Zinfandel wine grape berries.

Our first season results demonstrated the ability to increase both the yields and quality sugar content/Brix in both Zinfandel and Carignan varieties, and total acids in Zinfandel. The second season results demonstrated in Zinfandel grapes the ability to increase yields, zinc content and quality in the multiple parameters measured.

Based on these findings, we expect BAM-FX™ will be used in larger scale applications in early spring 2016 and within the next few years, that BAM-FX™ will become a standard micronutrient ionic zinc and copper application in the wine grape industry.

Row Crop: Corn Trials Summary

Corn is the largest crop in total acreage in the United States, with an estimated 88.9 million acres planted in 2015 reported by the United States Department of Agriculture in their release dated June 30, 2015. We believe the size of this market provides a significant opportunity for future revenue streams in addition to soybeans and wheat, which are the second and third largest row crops in the United States, by acreage.

During 2015, in a second year corn trial, BAM-FX™ was evaluated on two farms in Iowa, one on twenty acres and the second on fifteen acres. The protocols in both trials applied thirty-two ounces of BAM-FX™ per acre with a reduction of nitrogen based fertilizer: a 25% reduction of nitrogen, phosphorous and potassium on the twenty acre trial and a 25% reduction of nitrogen with no reduction in phosphorus and potassium on the fifteen acre trial. The control acreage followed normal grower fertilizer application.

The trial results showed a 4% improvement in bushels per acre on the twenty-acre trial and a 1% improvement on the fifteen-acre trial. In both trails, the root ball on BAM-FX™ treated corn showed increased size, improved nutrient uptake and strengthening of the plant’s anchor structure to withstand damage from wind, thereby reducing the grower’s crop loss.

We believe the use of BAM-FX™ provides growers a strong return on investment, in addition to improvement in crop yields, by reducing fertilizer which saves growers both fertilizer cost and reduction of fertilizer run off into waterways, thereby reducing the grower’s exposure to fines and penalties currently being imposed by numerous municipalities on growers for nitrogen and phosphorus intrusion into water sources that feed drinking water processing facilities. We expect that our focus on Mid-Western and Rocky Mountain region states, marketing these benefits to corn growers, distributors and grower co-operatives in 2016, will result in sustainable revenue streams as growers incorporate BAM-FX™ into their fertilizer operating practices during second quarter of 2016.

Specialty Crops: Kishu Mandarin Trial Summary

Kishu Mandarin, originated in China, has been gaining interest from growers in the United States. The Kishu is very profitable for growers due to its small size, superb flavor and ease to peel. The Company conducted a ten-month trial on forty Kishu trees for a grower in California during 2015. The trees selected for trial with BAM-FX™ had been producing poorly compared with other trees on the grower’s property. The objective of the trial was to determine if use of BAM-FX™ would improve the tree’s health, boost new leaf growth, fruit production and increase the quantity and size of the fruit.

All trees selected were three years old and in the same area of the grower’s property. The control consisted of ten trees and the trial consisted of forty trees. The grower’s watering protocols for both control and trial were followed. The forty trial trees were treated with three applications of BAM-FX™, as a root drench and a foliar spray application, with two applications prior to budding and flowering and a subsequent foliar application seven weeks later.

The results were significant. The BAM-FX™ treated trees produced an average fruit count approximately double compared with the control and average fruit size was approximately one third larger than the control. The fruit analysis results conducted and provided by an independent laboratory were as significant as the yield results. The BAM-FX™ treated trees produced fruit showing significant improvement in the nutritional quality of the fruit. Calcium content increased by 37%, copper by 62% and zinc by 15%.

The sodium or salt content of the fruit decreased by 24%, an important finding not only from a human nutritional standpoint but for the health of the Kishu tree. Given that the trees selected were producing poorly, it can be inferred from the results that the soil in which they were planted contained high levels of sodium and BAM-FX™ assisted in reducing the sodium uptake by the tree, improving its overall health.

We believe the results show multiple benefits to growers including an improvement in crop yield and quality and quantifiable increase in operating profit, which we expect will extend to citrus growers in Florida. We are currently marketing BAM-FX™ to citrus growers in both states and expect to begin generating revenue from product sales during the latter part of the second quarter of 2016.

Our trials have provided us the data to establish product application parameters crucial to engage early adopter customers and to provide sales representatives, distributors, and key industry opinion leaders the tools for on-site product evaluation. For a variety of economically important crops, these tools include: acceptable BAM-FX™ concentration ranges and delivery rates, treatment methods, successful integration with a variety of commercial farming practices (e.g. soil application in furrow, drip irrigation, foliar spray, helicopter spray), and a series of evaluation criteria for demonstration of product success. Our 2015 testing was conducted on multiple crop acres for most crops tested which showed results similar to those in 2014: faster plant establishment (increased root growth, stronger plant crowns and greater leaf growth), faster crop maturation, tolerance to stress, improvement in nutritional value and overall increased yields. BAM-FX™ also showed the potential to support a reduction in fertilizer application rates.

The commercialization cycle for new agricultural products is generallyminimally two to three growing seasons. Our 2015 trials included a mix of independent laboratory tests, first year small-scale trials with growers and second season multiple acre trials with growers. Demonstrating consistent product performance is aone key to obtainingobtain product orders from growers in the United States. During 2016, in connection with NASA ARC, we began developing product application dose rates and response curves scientifically to enable us to predict outcomes and support consistent performance. We believehave undertaken trials with growers of grape, avocado, tobacco, berries, cotton, soybean and stone fruit during 2017 and 2018 with positive result. Many of these trials are in the second and third year with the same growers. Although we will continue our trial results support consistent performance, growing season over growing season, and expectefforts in 2019, we hope growers will begin to realize significant future orders from our second season growers and industry thought leaders who have seen improvements in yield, quality, stress relief and decrease in fertilizer application rates.incorporate BAM-FX^® into their standard operating procedures during 2019.

Although the United States agricultural market is cautious, requiringgrowers have not historically been innovators and have required multiple growing season trials before adopting new products and technologies, our domestic trial results have beenwere instrumental in opening commercial markets in ChileAsia, Mexico and other South American countries. Having completed a number of first year trials in Chile coupled with successful domestic trial data, we have seen a significant interest from Chilean growers, now placing orders for BAM-FX™ for commercial application in

During the first quarter of 2016. We believe there are numerous growers open to early adoption of BAM-FX™ in Chile and South America. Although the current number of those growers we have identified and contacted is small, we expect that number to increase significantly by word of mouth from the combination of sales and technical agricultural service conducted in Chile during the first quarter of 2016. Growers from Brazil, Bolivia, Guatemala and Peru have expressed interest in BAM-FX™ as a result of these efforts.

The Company initially engaged a distributor in Chile to develop the Chilean commercial market. During 2015 and the firstfourth quarter of 2016, the Company provided ourentered into an agreement with Global Biotech, S.A.S. a Colombian agricultural testing and analytic laboratory, to evaluate BAM-FX^® through a series of product application tests to obtain approval for commercial import. We received registration approval through the Colombia Institute of Agriculture during 2017 for commercial import. The Company terminated the agreement in 2018. We are working with a business development consultant to identify a Colombian distributor credit terms and financial resources to assure the ability to carry, repackage and distribute BAM-FX™ in Chile, pursuant to a non-exclusive marketing and distribution agreement. Based on the size of the markets in Chile and South America, successful initial sales results and the Company’s belief that those markets will require additional investment to penetrate and service, the Company expects to form a wholly owned subsidiary in Chile, which will, in cooperation with our current distributor warehouse,sell, market and distribute BAM-FX™BAM-FX^® within Colombia.

Having been approved for import and sale in Brazil, we provided on-site technical assistance and business development support with growers for our prospective distributor, DallGree during the first and second quarter of 2019. Based on successful trials conducted on a number of crops, growers have begun purchasing our product through DallGree. We expect DallGree will place additional purchase orders with us during the second quarterhalf of 2016.

DIRECTED SELECTION™

Directed Selection™ is a proprietary technological method designed2019 to use the unique conditions of near-zero gravity in low earth orbit to create plants and animal cells that have beneficial traits that we believe would have value to society. This technology predicts that plant and animal stem cells exposed to prolonged microgravity in space can be endowed with new characteristics.

Life on Earth has always developed within the confines of gravity. About 50% of the energy expended by terrestrial-bound plants is dedicated to structural support in order to overcome gravity. By removing gravity from the equation, plant cells in a weightless environment have an excess of energy. This relatively benign environmental change causes the plant to engage its survival mechanisms, thereby enabling differential gene expression. The plant is able to adapt quickly to changing environments or disease causing organisms, stressors that we introduce artificially while the plant is in microgravity, thereby directing gene expression. This indicates that we can produce new varieties of plants, with required new attributes, faster than traditional methods.

All aspects of our Directed Selection™ technology must be conducted in a long-term microgravity environment, currently only available in space. We partnered with the University of Florida to conduct the initial experiments in order to validate the efficacy of this technology in space. Preliminary results showed that the Directed Selection™ technology was able to identify frost resistance capabilities in the Jatropha Curcas plant. This capability could allow cultivation in areas previously impossible.replenish their inventory.

The Company is usingconducted initial market analysis in China with the Directed Selection™ platform technology to create more robust plant varieties adapted toward desirable characteristics. Our Directed Selection™ research aims to produce new varietiesassistance of proprietary, patentable stem cells for plants with desirable traits likea contractor, Asia 21, focusing on the ability to better survive environmental challenges (i.e. temperature or climate change) or to resist disease. Adaptive changessale and distribution of products and solutions into China and providing local operational support, management and services. Asia 21 has offices in the plant will be accomplished withoutUnited States and China. Registration with the needChina Ministry of Agriculture for additive or subtractive genetic engineering, thus eliminating public concerns about GMOs. The plant still usesapproval to import and sell BAM-FX^®, which began during the capabilities that are a natural partfourth quarter of its genetic potential, through altered gene expression that enables adaptation toward valuable traits.

A key part2016, was received in February 2018. We plan to continue our business development efforts in China during 2019 and hope to generate initial orders from purchasers during the second half of our ongoing operations is the expansion of these patents to cover additional crops, animals and humans, and the specific methods and tools that are developed from our research and development. The Company possesses patent applications that contain claims covering biological processes in microgravity, including the growth of cellular plant and animal tissues in orbit, stem cell replication and related processes.2019.

The second partCompany began introducing BAM-FX^® to Asia-Pacific markets in 2016, targeting potential distributors through existing business relationships. High-value crop and row crop product evaluation is currently in process in a number of the Directed Selection™ technology pertainsAsia-Pacific countries including India and Philippines. In India, Nurture Earth has completed three years of trial work with growers and seed companies. We received a product order from Nurture Earth and expect to the mass replication or propagation of stem cells in space, somethingfulfill that can be done on Earth but at much slower rates. Although stem cells can be produced on Earth, current methods are inadequate to create large quantities of healthy cells in short periods of time. Our technology would allow for the increased production of healthy stem cells. Tests, which occurred over six space missions, have provided initial proof-of-concept that the Directed Selection™ technology allows stem cells to replicate in masse. We believe it may eventually allow us to produce large quantities of undifferentiated pluripotent stem cellsorder in the same environment for commercial sale to third parties.fourth quarter of 2019.

Directed Selection™ ResearchRetail markets are driven by innovation, performance and brand recognition. During the fourth quarter of 2017, we introduced the Gardener’s Choice^® brand by attending and manning a booth at the Ace and GIE trade shows and attended both again during 2018. The product generated interest at Ace and GIE trade shows and purchase orders at the Ace Hardware 2018 Fall Convention. During the fourth quarter of 2018, our representatives also attended and manned a booth at the Great Lakes Expo. We hope, once Gardener’s Choice^® is on retail store shelves, our product packaging, benefits and promotional material, will encourage consumer purchases and repeat orders. During November 2018, we attended and explored private label opportunities at the PLMA, Private Label Trade Show. Revenue is expected to follow the home lawn and garden spring, summer and fall planting season cycles.

A seriesCannabis growers tend to be innovators and rapid adopters of space microgravity experiments were executed by meansnew products. Grower opinion on products travels quickly via social media. Sale of six Shuttle flightsproduct to outdoor growers follows a cycle similar to home and garden retail sales. Indoor growers purchase products throughout the ISS spanning from 2007 through 2011, linked toyear, having multiple grow cycles and supported by the NASA Space Act Agreement entered into by ZGSI’s founder, Mr. John W. Kennedy. A new five year RSAA, signed during January 2016, with NASA ARC, provides us access to NASA scientistscrops. Our product introduction and laboratories to continue researchits short-term success will depend on earth. In addition, we expect that there are opportunities through a collaboration with Space Florida to continue research on the ISS. In prior years, tests of chemical compounds, plant cells, and mammalian stem cells in microgravity were conducted in conjunction with the USDA, Agricultural Research Service Labs (Beltsville, MD)those early adopters and the Tropical Researchresults they realize which, we believe, will spread quickly by word of mouth and Education Center (TREC), a division of the University of Florida.

Proof Of Concept Plant Research To Develop Jatropha Biofuel Strains.social media exchanges. We have seen positive product response.  The Company is currently focused on developing relationships with national distributors.

The ZGSI space research program in-part focused on Directed Selection™

Timeline and Plan of Operations

While we believe we can reachrealize sustainable revenue executing our goals,plan to leverage our technology and resources by developing strong business relationships with our channel partners in domestic and international commercial markets; integrating our technology into other agricultural companies’ products; introducing our ready to use lawn and garden retail product, Gardener’s Choice^®; and developing markets through sales to hydroponic grow stores and national distributors. However, we cannot guarantee we will be successful. Our business is subject to risks inherent in the establishment of a new business enterprise including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. There can be no guarantee that we will be able to obtain the necessary levels of profitability or fundraising needed to remain operational on a long-term basis. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and product development programs or any future commercialization efforts. We will need to generate significant revenues to achieve profitability, and we may never do so.

Zero Gravity Solutions, Inc.

The Company is subject to the reporting requirements of the Securities Exchange Act of 1934, as amended and provides general and financial administration, marketing support and strategic planning to BAM Inc. and ZGLS. In February 2015, the Company hired a chief financial officer to assist the Company with financial management and reporting, strategic planning and internal control improvement.SASI. The Company has developed the salesalso develops product marketing material, investor oriented materials and marketing tools as well as developing methods for marketingprovides systems support and market reach on our websitewebsites and through social media.media programs.

In the second quarter            During August 2016, the Company expectsidentified a need to concluderaise additional funds to execute its business plan for the remainder of 2016 and future periods. In October 2016, the Company began addressing those requirements through a private placement offering of its securities, having raising approximately $6,000,000 in equity capital since the commencementcommon stock of the Offering in the fourth quarter of 2015. The offering consisted of a unit comprised of oneup to $10,000,000 at $3.00 per share of common stock issued (the “ 2016 Private Placement”).  For the Company’sfiscal year ended December 31, 2018, the Company issued approximately 304,000 shares of common stock and received gross proceeds of $911,154 pursuant to the 2016 Private Placement. 

 During the first quarter of 2019, the Company redirected its corporate finance strategy by withdrawing a five year warrant to purchase one shareprivate placement and restructuring its debt with the cooperation of certain of its noteholders, more fully detailed in the Company’s common stock at $2.00 for $1.25 per unit.Current Report on Form 8-K, filed with the SEC on June 13, 2019. The restructuring consolidates the Company’s existing notes and provides more favorable payment terms. In addition, the Company raised an additional $3,400,000 as a result of this restructuring.

               The Company expects to continue providing strategic directives, management and financial support to BAM, including working with NASA and Intrinsyx on future BAM-FX^® related research missions to the ISS and the roll out of Gardener’s Choice^® to big box and other retail outlets during 2019. The Company also expects to provide business development and financial support to SASI in 2019. 

BAM Agricultural Solutions, Inc.

BAM Inc.’s focusBAM’s ability to execute its 2019 business strategy depends on the Company obtaining sufficient operating capital. BAM. expects to build commercial agricultural product demand and brand recognition for 2016 is to commercialize BAM-FX™BAM-FX^® by generating sales and revenue in both domestic and international markets. BAM Inc. expectsmarkets through distributors and direct sales, pursuing technology integration or licensing opportunities with large agricultural companies, and launching its lawn and garden retail product, Gardener’s Choice^® and hydroponic grow store retail product during 2019. For the 2019 business strategy to develop its precision agricultural approach in the market, expand domestic sales in states not currently addressed,be successful, we will need to directly provide business development and prove its value proposition with grower return on investment statistics and replication of sales. BAM Inc. is hiring and training experienced agricultural personnel required to introduce and sell BAM-FX™ to growers, end-users and distributors in their respective markets, which currently consist primarily of independent commission based contractors.technical agronomy support.

The Company’s core product, BAM-FX^®, is an aqueous solution containing ionic zinc and copper micronutrients, in addition to sulfur. Currently, the product is sold in a concentrated form with pre-application dilution in rates ranging from 1:100 to 1:2,000. BAM-FX^® can be used in irrigation or hydroponic, seed treat and foliar applications. Zinc and sulfur promote plant growth and yield. Copper promotes enzyme activities in plants and is essential for chlorophyll and seed production. We believe the combination of micronutrients with other product attributes enables the product to improve crop yields, promote growth and withstand environmental stress by improving the plant’s ability to more efficiently uptake nutrients either available or latent in soils. The composition of micronutrient contained in BAM-FX^® is a contributor to its performance as a growth stimulator. We plan to focus our 2019 sales, agronomy and research efforts on - foliar and seed treat applications, introduce a granular product and refine application protocols on our targeted crops. 

Domestic target crops for fiscal 2016 includes adding field2019 commercial markets are primarily those crops with high farm value to growers including grape, berry, soybean, cotton, tobacco, vegetable, hemp, cannabis and avocado.

Business development efforts, including additional product performance trials, are expected to continue in India and China. The Company received approval to import and sell BAM-FX^® in China during February 2018 and in India during the first quarter of 2019. We plan to continue our business development engagement with Asia 21 to place product with local distributors in China. Our target crops for China 2019 commercial sales include grape, rice and flowers.

We are negotiating the terms of a distribution agreement with Nurture Earth for commercial sales in India. Nurture Earth has introduced and successfully trialed our product with a major seed company over the past three years who has expressed interest in purchasing product in 2019. In addition, Nurture Earth has introduced our product to hundreds of local distributors, also expressing interest in purchasing for resale. We received approval for import and sale in India during the first quarter of 2019. We received and expect to fulfill an initial order from Nurture Earth for approximately 2,500 gallons of BAM-FX^® during the fourth quarter of 2019.

The Company expects to begin initial product sales within Brazil during 2019. We worked with an agricultural product distributor during 2017 and 2018, Dallgree. Dallgree purchased product to trial in a number of crops including corn, bean and sugar cane. During the first and second quarters of 2019, we provided onsite technical support personnelfor meetings with growers trialing BAM-FX^® and believe these efforts will result in an additional field sales and marketing management. The Company also expectsorder in 2019 from Dallgree. We expect to expand its brand recognition and market penetration by developingfinalize a non-exclusive distributor network including independent sales representatives.distribution agreement with Dallgree during the second half of 2019.

On February 13, 2018, the Company signed an exclusive business development and distribution agreement with Agro Space to introduce BAM-FX^® into agricultural markets in Mexico. The primary domestic markets for saleinitial collaboration in the business development process is in avocado with secondary attention to berries. Trials with avocado growers began in the fourth quarter of product are those in which2018 with final results expected during the fourth quarter of 2019. During the second quarter 2019, Agro Space began trials have been performed, including California, Florida, Idaho, Iowa, North and South Dakota and Texas.on berry crops. We expect that researchour agronomy team will continue to work with Agro Space’s agronomy expert in Mexico during 2019 to develop protocols through numerous tests of BAM-FX^® in diverse geographies and new formulations of BAM-FX™soils.  We believe Agro Space will obtain approval for import and product research and development conducted through ZGLS will allow us to expand the sale of product in our target agricultural markets.Mexico during 2019. Assuming the success of the trials and receipt of import approval, we believe commercial product introduction efforts could begin in 2019.

BAM Inc. also expectsinvestigated the retail markets for ready-to-use home and garden applications in 2016 and developed a ready to commence commercial salesuse product, Gardener’s Choice^®, during 2017 and 2018. BAM attended a number of trade shows in 2017 and 2018, showcasing the product at a Company booth, and received both wholesaler interest and initial orders for delivery in the first and second quarter of 20162019. During the first quarter of 2019, BAM was approved as a vendor with Ace Hardware and Mid-States Distributing LLC, a distributor in the farm store channel with thirty nine (39) members having over seven hundred (700) store locations in thirty three (33) states and five (5) in Canada. The Company engages three independent retail experts who have access to an independent sales rep group of over thirty professionals. This team introduced product to major big box and regional retail companies during 2018, which we expect will continue and expand throughout 2019. The Company identified and works with a third-party vendor for product packaging, labeling and fulfillment services. During 2019 the Company hopes to build its sales representative network to generate sales of Gardener’s Choice^®.

Specialty Agricultural Solutions, Inc.

During the fourth quarter of 2018, BAM delivered and sold introductory quantities of product to grow stores in Michigan, utilizing sample counter displays and targeted magazine advertising. SASI, the entity formed to address cannabis markets and began operations on January 1, 2019, introduced product to grow stores in Oklahoma and Colorado during the first quarter of 2019, generating consumer interest and initial sales to grow stores in Oklahoma. The Company plans to generate sufficient interest in retail outlets to attract the attention of regional and national wholesale distributors in cannabis channel markets with the hope that they will incorporate our product into their distribution channels.

In addition, SASI hopes to work with commercial indoor grow operations and develop product application protocols that fit within their standard operating processes. We are developing the expertise and operational understanding of indoor grow operations, which we hope, will benefit our business development efforts during 2019. In addition to improved yield and quality, we have identified early sexing of plants as a return on investment for growers. Early sexing is of particular importance to a grower as only female plants are used for extraction and production of cannabis products. The earlier a plant’s sex is determined in a numbergrowing cycle, the less resource is used to nurture plants that will eventually be discarded. We expect to continue trial work to validate our product claims during 2019.

SASI believes domestic hemp markets represent a significant revenue opportunity for 2019. By integrating BAM-FX^® into hemp agricultural input programs we believe we can establish a foothold in this anticipated rapid growth market. Inclusion of South American countries, certain countrieshemp in the Asia Pacific region2018 US Farm Bill legalizes hemp and Pakistan.

makes hemp a viable crop for domestic growers, most of which have no prior experience with this crop. We plan to conduct trials with our product to develop an application protocol to maximize either fiber production or quality of oils extracted. Based on our prior trials in the cannabis grow markets, we believe improved return on investment could be realized by hemp growers and plan to introduce BAM-FX^®, based upon successful trials, to hemp growers in 2019.

BAM Inc. has finalizedWe believe the scale up of its principalCompany’s manufacturing facility which is expected to have thein Okeechobee, Florida, has sufficient capacity to fulfill anticipateddomestic and international orders for product demand in fiscal 2016. 2019. We continually improve our manufacturing process to simplify production and become more efficient while consistently producing a high quality product.

Zero Gravity Life Sciences, Inc.

We expect ZGLS will execute a multi-track research and development program related to BAM-FX™, bothremain inactive during 2019.

Strategy for our space program and developing and testing new BAM-FX™-based formulations for specific crops and varying geographic soils and weather conditions. In addition, ZGLS will manage our intellectual property portfolio and assist BAM Inc. with patent strategies related to commercialization of new products. Growth

The Company expects ZGLS to assume managingbuild upon its existing relationships with large-scale growers, co-operative groups and provide focusagricultural input distributors and generate revenue through direct product sales and product integration opportunities. We plan to conduct limited commercial grower experience trials in targeted high value domestic crops utilizing a small but talented technical and sales group including two agronomist employees, sales management and subject matter expert consultants in avocado and specialty crops including cannabis and hemp. Our plan includes adding sales management and agronomists, which will be dependent upon our performance and financial resources. Given our current staffing, we believe our commercial product sales efforts will be limited to Texas, California and the Mid-west. We expect to continue to develop data for crop sheets and product line extensions with a few independent third parties including Iowa State University and Nurture Earth.

The Company’s international sales efforts and revenue production will depend on the Company’s researchrelationships it has built in prior years with distributors in India, Brazil, China, Mexico and intellectual property initiatives with NASA ARC, TREC, Space Florida to commence when a new CEO is hired, planned to be during the second quarter of 2016. These initiatives include newPhilippines. We expect that we will generate product formulation research and developmentsales in addition to developing a center for agricultural innovation in cooperation with Space Florida.

During 2016, ZGLS expects to identify and compete for significant grants available for agriculturethese countries by providing technical as well as specific cropsmarketing support to distributors who have committed their time and food sustainability, bothresources to develop their local commercial markets through a number of years of studies with end users. Although our product has been approved for import and sale in a number of other countries and we have identified potential distributors in those countries, we plan to enter those markets when definitive customer purchases are clear and our financial resources are sufficient to provide proper support for our local partner.

The second phase of the Company’s 2019 commercial sales and marketing strategy is to pursue alliances with large agricultural and chemical manufacturers to incorporate our core technology within their product lines to improve the performance and profitability of existing product lines. We have discussed opportunities with three large-scale integrated agricultural input distributors. We expect each opportunity will involve significant technical analysis including product efficacy testing, which if successful, could represent potentially sizable product sales or licensing revenue.

Our strategic plan will focus on sales of Gardener’s Choice^®, our ready to use home and garden product, which was introduced at the federalAce Hardware 2018 Spring and state level. Further ZGLS intends to continue to strengthen its relationships with various space agenciesFall Conventions and space grant related opportunities, for example, Space Florida.GIE Expo 2017 and 2018. We executedreceived stocking orders from purchasers during the new RSAA with NASAthird and fourth quarters of 2018 and expect additional orders during the first and second quarters of 2019. Gardener’s Choice^® was approved as a qualified product and BAM as a qualified vendor of Ace Hardware and Mid-States Distributing during the first quarter of 2016 and intend to utilize the association with NASA ARC research scientists to assist in both research and grant related activity in 2016.

Strategy for Growth

BAM Agricultural Solutions, Inc.

The Company’s subsidiary, BAM Inc., has been executing the commercial roll out of BAM-FX™ into the world’s agricultural markets. Following two years of initial product testing with several universities, end product users and laboratory work, BAM-FX™ has now been licensed and approved for sale in sixteen states in the United States: Utah, Idaho, Iowa, Maryland, Delaware, Nevada, Arizona, Alabama, Californian, Texas, New Mexico, North Carolina, Oregon, South Dakota, Virginia and Florida.2019. The Company has focused on building a solid foundation, addressing regulatoryhopes to expand its independent sales representative organization during 2019 with the assistance of retail subject matter expert consultants, currently engaged, to place Gardener’s Choice^® in regional and compliance issues while developing sales and technical teams in targeted geographic areas.national retail outlets. The Company has received initialplans social media, digital media and second season commercial orders from end users (growers)television campaigns to support marketing and distributors, which have been manufactured, invoicedgenerate awareness and shipped.product sale through for our retail customers.

The Company, through SASI, plans to continue expanding upon its favorable product reception from placement in grow stores in Michigan and Oklahoma catering to legal cannabis growers and move into larger distributor channels to expand product reach. Recent changes in laws now make the possession of cannabis for medicinal or recreational uses legal in many countries throughout the world. The global legal market for such products in 2016 was $14.3 billion and is currently increasing its internal sales and technical team and establishing non-exclusive distribution relationships with national and regional agricultural product distributorsexpected to promote brand awareness and increase domestic and international sales. The Company’s strategic growth plan includes organic growth through product sales, strategic alliances and distributors. In development are sales and marketing tools highlightingreach $140 billion by 2027. These numbers anticipate approval of pending legislation in many countries that would once again allow for the benefitslarge-scale farming of applying BAM-FX™hemp, a variety of cannabis, which include: improved plant health, increased nutritional value, reduction of fertilizer applications, stress relief and positive electronic charge which infuses zinc and copper into plant leaf cells. Tools to enable field sales personnel to compute the product’s value proposition or return on a grower’s investment are also in development and expect to be deployed during the endcontains very low levels of the first quarterpsychoactive agent known as THC. Twenty-five of 2016.

In addition, wethe largest producers of cannabis in North America are reported to have identified several cropsunder operation and construction more than seven million square feet of high market valueindoor capacity. Preliminary data has shown that based upon our testing, have shown BAM-FX™ significantly increases crop yield, quality and nutritional value. Such crops include grapes, avocados, strawberries, raspberries, alfalfa, spinach (leafy vegetables) and tomatoes, among others. We track the amount of acreage dedicatedBAM-FX^®, added to a specific crop and the market valuegrower's protocol, has produced up to a 44.79% increase in vegetative growth, in weight of the crop in order to prioritize our marketing and sales efforts.

Our distributor in Chile commenced commercial product sales to growers in Chile during the first quarter of 2016. Crops include wine and table grapes, avocado, blueberries, walnuts, cherries and pears. Our distributor is also in the process of establishing warehouse operations and obtaining regulatory approvals to break down BAM-FX™ bulk receipts into container sizes acceptable to growers and then repackage and re-label the containers for sale within Chile and to export to other South American countries. Based upon the initial product launch in Chile and the commercial acceptance of BAM-FX™ in the Chilean market, we expect the second quarter 2016 revenue from sales to contribute significantly to our 2016 results. As part of our expansion plan in South America, product validation has been initiated on fruit trees in Peru and Paraguay.

Zero Gravity Life Sciences, Inc.

ZGLS’s short to mid-term plans includes the utilization of NASA and European space agencies relationships to focus research on BAM-FX™ as it relates to our space program applications,processed buds per plant, as well as a significant improvement in quality, as measured by THC, terpene and cannabinoid levels. Through SASI, we will continue to engage in research based uponpursue additional field studies to demonstrate the Company’s zero/micro gravity intellectual property leading towardvalue of BAM-FX^® to the cannabis industry while expanding product development and patenting of unique stem cells developed on the ISS. These patentable plant stem cell lines could lead to new global food cash crops such as rice that may be resistant to climate change and other adverse factors. ZGLS will also be engagedsales efforts in the human regenerative medical field developing cell growth types and capabilities not possible on the ground. We believe this may lead to positive commercial outcomes.emerging domestic, hemp industry.

ZGLS is also continuing ground-based research on a pipeline of additional derivative BAM-FX™ products utilizing other minerals and micronutrients other than our original Zinc-Copper compound. The Company intends to build a family of “BAM” related products for different crops, soil conditions and nutritional outcomes.

Sales and Distribution Strategy

The Company is implementing sales, marketing and distribution strategiesWe are currently in discussions with groups that are pursuing fully integrated hemp growing operations in the United States and in selected global markets to provide effective market penetration, sales and customer support through an internal sales and marketing organization and a network of selected, well qualified and highly respected strategic partners and distributors.

During 2014 the Company began building its internal sales and marketing organization by adding employees, sales representatives, commissioned agents and contractors with experience in sales and marketing management, in field research and toxicology. Further, the Company has developed appropriate sales and marketing materials and policies and procedure to administer a rapidly growing sales force. During 2015 we contracted with a certified crop advisor for sales and technical support in California and a regional sales manager for the southeastern United States. We also began commercial sales in Chile through a local non-exclusive distributor. Sales efforts through the third quarterintend to collaborate with one or more of 2015 were focused primarily on proving the agricultural benefits to growers and distributors, conducting in excess of sixty trials in numerous crops. During most of 2015, the Company trained its sales and marketing personnel on the unique benefits of applying BAM-FX™ to crops, refined protocols to optimize product performance and educated and proved BAM-FX™ benefits and claims to growers and distributors with in field testing supported by third party results analysis.

During the fourth quarter of 2015, the Company began leveraging its experience, directing its efforts to agricultural distributors and thought leaders.these groups during 2019. Our sales representatives and managers were now armed with independent third party laboratory results, which proved technically, BAM-FX™ benefit claims and could approach agricultural thought leaders with scientific data. Our sales efforts focused on those growers with whom we developed working relationships during 2014 and 2015 with emphasis on making inroads with growers and crops on which we had proven scientific data. The targets included row crop growers (corn) and specialty growers (wine grapes, avocados, citrus and stone fruit). We believe our market reach will expand rapidly as industry thought leaders purchase and adopt BAM-FX™ in their crop protocols.

We expect to continue to add independent sales representatives to our sales team in 2016 while converting key independent sales representatives to employees. Our 2016 strategic plan includes building a network of domestic and international distributors that have existing sales teams. We plan that each of BAM’s distributors will have an existing customer base and the capabilities and infrastructure to provide BAM-FX™ packaging, distribution and customer support. We believe this approachobjective will be successful in California with wine grape growers and avocado growers and corn growersto integrate BAM-FX^® as, a preferred input in the Midwest through agricultural co-operatives that servicegrowing process to improve yield and provide growers since our trials have shown that BAM-FX™ reduces plant stress brought about by poor climate, soil or water conditions and increases crop yield.

We believe that the revenue opportunities in Chile and South America require our direct involvement to develop the BAM-FX™ brand name recognition, warehousing, packaging and distribution to properly service the potential market.a higher return on investment.

Currently, weour sales and agronomy personnel are validating BAM-FX™ product benefits with a number of large growers in the Asia Pacific region. Product validationsufficient to support our domestic commercial and retail business strategies. As sale and distribution expands domestically and internationally, additional technical personnel will be managed by a distributor, contracted with us under a nonexclusive distribution contract. Upon successful completionrequired and added, on an as needed basis.

Intellectual Property

We have made protection of our intellectual property a strategic priority. We rely on a combination of patent applications, trademark,trademarks, trade secretsecrets and other intellectual property laws to protect our proprietary rights.

Patent Applications

We are the owners of severala U.S. patent and foreign pending patent applications that form an important part of our immediate and future business plans. We have been assigned or licensed the rights to these patent applications through agreements with our chief science officerformer Chief Science Officer and former director, John W. Kennedy.

We are the assignee of a portfolio of patent applications that pertain to the second-generation bioavailable mineral compositions (“BAM-FX™”)BAM-FX^®. The BAM-FX™BAM-FX^® composition is highly useful as a nutrient additive that enhances a plant’s immune system, may fortify against disease or environmental stresses and promotes growth. The basis of which is the ability of the ionized ligand systemmicro nutrient platform to deliver selected minerals into a plant or other complex organism systemically at the cellular level. Our first field trials have utilized the primary ligand formulation of zinc and copper to deliver those molecules into several crops in both the laboratory and at large in the field. These crops have included strawberries, raspberries, corn, potatoes, tomatoes and others crops in a variety of locations. The U.S. Patent and Trademark Office issued U.S. Patent No. #9,266,785,9,266,785, titled Bioavailable Minerals for Plant Health, on February 23, 2016. The patent will expire on December 27, 2026. Related applications are pending in Chile, Thailand, and Malaysia.Malaysia as well as a child U.S. application. 

We are also         On April 29, 2019, we entered into the licensee of a patent application that pertains to the use of an artificial Superoxide Dismutase (“SOD”) compositions for the treatment of several plant and animal diseases, including amyotrophic lateral sclerosis (also known as ALS disease). Superoxide is naturally produced by plants and animals, including humans, and its production is accelerated in times of trauma or stress. SOD is produced by the cells to counteract the effects of an over-production of superoxide. Adequate amounts of SOD may increase life-span in humans and may be capable of remediating (and saving) severely stressed plants. This patent application discusses an artificial SOD that can be easily applied and used for treating over-production of superoxide, particularly ALS and other neural disorders. The artificial SOD at issue here is less expensive to manufacture than other artificial SODs and has a significantly lighter molecular weight. Animal and human studies of the SOD are being discussed on an ongoing basisSettlement Agreement with NASA and academic entities. The plant and space radiation applications of the patent applications are being licensed to ZGSI exclusively from Mr. John W. Kennedy, for specialized testingthe Company’s former Chief Science Officer and research.a former member of the Board, pursuant to which, among other things, Company assigned certain Intellectual Property to Mr. Kennedy, and Mr. Kennedy agreed to effectuate the transfer of two million shares of common stock of the Company back to the Company. The Intellectual Property relates to technologies that the Company does not intend to pursue. The Settlement Agreement was entered into in order to resolve certain disputes between the Company and Mr. Kennedy concerning various licensing and royalty agreements entered into between the parties covering the Intellectual Property. 

ZGSI is the exclusive assignee of a patent application directed        Pursuant to the replication of stems cells inSettlement Agreement, the Company and Mr. Kennedy also entered into a weightless environment. This patent application contains claims covering biological processes in microgravity, includingRoyalty Agreement, providing for, among other things, certain royalty payments to be made to the growth of cellular plant and animal tissues on-orbit, stem cell replication and related processes. The technology acceleratesCompany from the evolution of organisms, particularly plants, to adaptgross revenue generated by the organism to thrive in a hostile environment including cold and/or arid climates. Plants adapted using the technology show increased tolerance for the selected hostile environment relative to traditional plants. Specific applications include the development of food crops that are tolerant of cold climates (e.g. frost resistant crops) and arid environments (drought resistant crops). A key part of our ongoing operations is the expansion of this technology to cover additional crops, animals and eventually humans, and the specific methodologies and tools that are developed from our R&D. It is therefore a part of our technology that holds much promise and, from a commercial standpoint, falls into the medium to longer term plans of the Company.

Intellectual Property.

Trade Secrets

Parts of our stableportfolio of intellectual property resides inincludes trade secrets pertaining to the manufacturing of several of the materials previously mentioned. In particular, BAM-FX™BAM-FX^® compositions and itstheir derivatives are made in a complex and very specific process utilizing purpose-built equipment. These manufacturing processes are a separate technology, distinct from the patent applications, and remain highly secure and confidential. Reverse engineering of a product is always possible with sufficient resources. However, attempting to manufacture BAM-FX™BAM-FX^® compositions without the correct purpose-built equipment requisite to the task may result in a damaging runaway exothermic reaction. We believe that the experience we have honed over several years of manufacturing these products gives us a substantial competitive edge over any potential newcomers.

Trademarks

Our product names, logos and taglines are recognized by consumers and are valuable assets we are committed to protecting.  In 2014,an effort to secure these brands for our exclusive use, we have filed trademark applications to protect “BAM-FX™” which are currently pending. Our patent for “Unlocking Nutrition for the World” was registered on September 8, 2015 We also hold a number of other common law trademarks that we may registerand obtained registrations in the future.US and EU Trademark Offices.  As of July 1, 2019, the Company has the following trademark inventory:

Strategic Relationships

Government Regulations

Although the BAM-FX™ productBAM-FX^® is different than mostcommon fertilizers available, we believe that most state regulatory agencies will require us to register itthe product as a fertilizer. The BAM-FX™BAM-FX^® product has been registered and issued a license as a liquid fertilizer by the State of California. California is considered one of the most difficult states to gain such registration, and may establish strong precedent for other states to allow such registration of the BAM-FX™ product.in all fifty states. The Company does not make any claimsclaim that BAM-FX™BAM-FX^® is a fungicide, bactericide or pesticide, including the related patent applications, thustherefore alleviating most regulatory oversight.oversight associated with those claims. Gardener’s Choice^®, our ready to use home and garden product is also subject to state regulatory agency requirements and has been registered and issued a license as a liquid fertilizer in all fifty states. All ingredients in the formulation are categorized as Generally Regarded as Safe (“GRAS”) by the United States Food and Drug Administration (“USFDA”).

With our Directed Selection™ technology utilized

For all other countries, BAM-FX^® is required to register and obtain approval from the appropriate government agency regulating the import of agricultural products. We have completed governmental requirements of and have received approval for import and commercial sale of BAM-FX^® into China, Brazil, Colombia, Chile, Paraguay, and India.

The 2018 Farm Bill, enacted December 20, 2018, sets forth a definition of a plant biostimulant. The USFDA can modify that definition in the creation of new varieties of an existing plant’s stem cell with unique characteristics, the resulting plant is developed exclusively through differential gene expression by exposure of the indigenous genome of the original plant to microgravity. No foreign DNA or genetic material is added or introduceda report to the genome, thus it is not consideredPresident and Congress due December 19, 2019 identifying any regulatory, non-regulatory and legislative recommendations, including the appropriateness of any definitions for plant biostimulant. We plan to be a GMOactively monitor the USFDA’s actions and the Company believes that it would likely not fall under regulations that GMOs face. We believe that plants developed with Directed Selection™ technology would be regulated by the USFDA as are other non-genetically modified plants and we do not expect regulation to significantly impacteffect of their report recommendations, if any, on our business plan.

Application of the Directed Selection™ technology to develop human stem cells represents a long term goal of the Company and therefore we have not fully investigated the level of regulation the resulting products may face. The Company will complete a full review of the applicable regulations before beginning any product development efforts.

We expect that any products utilizing our Superoxide Dismutase (SOD) patent license will be subject to regulatory control. At this time we have not completed research or development efforts in this area determine how a product may be regulated, if developed, as it relates to our Directed Selection technology.classification.

Competition

ThereDuring 2017, the Company increased its understanding of mode of action of the core technology in BAM-FX^®. Initial research supports our theory that our core technology acts as a bio-stimulant. A plant bio-stimulant is any substance or microorganism applied to plants to enhance nutrition efficiency, abiotic stress tolerance (drought, extreme temperature, mineral toxicity) and/or crop quality traits, without regard of the bio-stimulant’s nutrients content. Plant bio-stimulants are also contained in numerous commercial agricultural products.

Global Market Insights, Inc. estimates the market size for bio-stimulants will exceed $4.0 billion by 2024. It stated that “The necessity for sustainable farming practices coupled with a scarcity of resources including water supply and land availability will propel the bio-stimulants market growth”.

“Acid-based ingredients dominate the industry accounting for over 50% share by 2024. Bio-stimulant sales are attributed to foliar spray segment since foliar feeding serves as a timely measure to prepare the crops for expected abiotic and biotic stress, such as heat stresses, drought or chill. Increased yield, better flavor, extended shelf life, higher test weight on grains and improved animal performance are some of the key factors augmenting the bio-stimulants market growth. Row crops segment is expected to register the highest growth during the forecast timeframe. This growth can be attributed to factors such as high production of oil seeds and food grains coupled with sustainable farming practices prompting the segment growth. High water absorption capacity and increased root length for efficient nutrient uptake along with healthy and strong crop appearance will positively impact the product penetration. Dry form accounted for over 70% industry share in 2017. They are water soluble and contain humic acid, beneficial bacteria, chelated iron, amino acids, soluble sea kelp, vitamins, minerals, and dextrose. The key factors stimulating the product demand include improved plant respiration, increased cell division & photosynthesis, lateral bud development, and delay in aging process of plant tissues.”

The bio-stimulants industry is in an evolving stage and has attracted participants including BASF SE, Bayer, Valagro and Arysta LifeScience. We believe that the proper classification of our product is more than 700 major fertilizer manufactures worldwide. Of those, approximately 80% manufacturealigned as a fertilizer including nitrogen. As a standalone product, BAM-FX™ will compete with these fertilizers orbio-stimulant. Because this is an evolving industry, we believe we have an opportunity to become a supplemental treatmentfirst mover in the industry. Although this is a potential advantage, it also poses significant risk as the competition is well funded with an additional application.resources available that are significantly greater than resources we have available.

Presently, our product is liquid. We are developing a dry formulation, which is currently undergoing efficacy trials and may not be available for commercial production until later in 2019 if at all. Considering approximately 70% of the share of bio-stimulant industry is attributable to dry formulation, at the present time we compete in a potential 2024 market of approximately $1.2 billion according to Global Market Insights, Inc.

A subset of manufacturers and suppliers market zinc and copper foliar products perceived to be similar to BAM-FX^®. The products make beneficial use claims similar to those we make, which in most cases are not substantiated, and are generally sold for less than our BAM-FX^® wholesale price. Buyers often have a difficult task distinguishing BAM-FX^® efficacy from other suppliers of zinc and copper foliar micronutrients. We believe our marketing approach focused on third party field test results and scientific proof of our product claims, allows us to differentiate BAM-FX^® from other competitive products. We believe that our product can createimproves a grower’s return on investment through improved endyield and reduction in agricultural inputs when properly applied to crops under appropriate agricultural conditions.

Government agencies and various organizations across the globe have encouraged farmers to adopt bio-stimulants according to Global Market Insights, Inc. In June 2011, the European Bio-stimulants Industry Consortium was formed to foster bio-stimulants to improve yield with less resources with major goals of sustainable agricultural production, economic growth and green innovation. Although the bio-stimulant market is at a development stage most notable players outside the United States, have established markets and have adequate financial and technical resources, with which, we may not be able to compete. 

 We began product value exceedingintroduction and business development in our specialty crop markets during the costfourth quarter of BAM-FX™. BAM-FX™ is engaged in laboratory2018 at the grow store level and expect, based on realized favorable customer experience, we will gain strong market acceptance and ongoing revenue. The market potential to provide agricultural inputs for legal growing operations has driven a wide range of competitive product introductions. Scott’s Miracle-Gro Company, for example, has acquired and integrated distribution networks and agricultural field testing. Preliminary data suggest thatinput providers offering complete product lines to legal growers. In addition to ongoing new product introductions, we compete against established products already available to growers. Our ability to build and retain revenue in the positive effects of BAM-FX™ applications to all plants tested has made them healthier and more robust and productive.legal cannabis agricultural market will depend significantly on our product’s performance.

The BAM-FX™ formulaOur core technology can be integrated intocombined with existing formulated, liquid fertilizers as an additional ingredient.fertilizer and herbicide formulations and conform to existing application protocols. Lab and field research indicates that, by blending BAM-FX™BAM-FX^® with existing, widely distributed, “branded” products, we could become a major supplier to nitrogen based fertilizer producers making their way intoenhance the marketplace. BAM-FX™ works synergistically with and greatly improvesperformance of those products sold by other fertilizer products and thereforeagricultural input companies, which we could become a significant ingredient supplier to major companies with existing wide distribution. We areconsider as industry collaborators, not aware of a direct competitor utilizing this business strategy.competitors.

Internal formulation research is ongoing as customization will be important to accommodate variations in soil and environmental conditions. New discoveries through earth and space research may result in products capable of growing plants in more formidable climatic conditions, which could give BAM-FX™ an additional future competitive advantage.

Competitive Advantage/Barriers to Entry:

The Company believes that ZGSIit has adequately protected its intellectual property and has developed a strong professional technical team to enter the markets for its products and developed excellent relationships with industry leaders that provide it a positivemaintain those market positions. We believe our competitive position.advantages include:

Reports to Security Holders

We are required to file reports and other information with the U.S. Securities and Exchange Commission (“SEC”).SEC. You may read and copy any document that we file at the SEC's public reference facilities at 100 F. Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-732-0330 for more information about its public reference facilities. Our SEC filings are available to you free of charge at the SEC's web site at www.sec.gov. We are an electronic filerfile electronically with the SEC and, as such,a result, our information is available through the Internet site maintained by the SEC that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. This information may be found at www.sec.gov.

As a “smaller reporting company”, as defined byin Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.None

The Company leaseshas an annual lease for its office space located at 190 N.W. Spanish River Blvd, Suites 101/102, Boca Raton, Florida 33431 for a monthly rate of $4,925.$5,173. BAM Agricultural Solutions, Inc. maintains/leasesholds a two-year lease for its manufacturing facility located at 1461 NW 25^th Drive, and leases a storage facility at 1501 N.W. 25^th Drive, Okeechobee, FL 34972 for $1,017$2,285 per month. BAM also leased full service office space in Western Growers’ Association’s facility at 150 Main Street, Salinas, California 93901 for $500 per month. This lease was cancelled in May 2018. The Company leases office and fully equipped laboratory space in Carlsbad, California for $10,000 per month pursuant to a twelve month letter agreement starting April 1, 2018 through and a warehouse at 9685 New Avenue, Gilroy CA. for $100 per month. All of these leases have annual terms except our warehouse in Gilroy, CA is under a month to month lease.including March 31, 2019.

We believe our facilities are adequate for our current needs and that if required, we will be able to locate suitable new office space and additional manufacturing capacity if needed.

There are presentlyno, and during the fiscal period ended December 31, 2018 there were no, material pending legal proceedings to which the Company, or any of its subsidiaries, is a party or as to which any of its property is subject, and no such proceedings are known to the Registrant to be threatened or contemplated against it.

Not applicable.

PART II

Market Information.

Our common stock is presently quoted on the OTC Pink Market under the symbol “ZGSI”, although there has not been an active trading market for the shares. Accordingly, we are not including a history of reported trades in the public market because of the limited and sporadic trading. There have been 60014,530 shares traded in the past 12 months.months ending August 14, 2019.

Holders

As of March 20, 2016,October 4, 2019, there were 241353 record holders of an aggregate of 38,679,59739,249,863 shares of the Common Stockcommon stock issued and outstanding.

Dividends

The Registrant has not paid any cash dividends to date and does not anticipate or contemplate paying dividends in the foreseeable future. It is the present intention of management to utilize all available funds for the development of the Registrant's business.

Securities Authorized for Issuance under Equity Compensation Plan

On November 30, 2015, the Board of Directors authorized and approved the adoption of the 2015 Equity Incentive Plan (“2015 Plan”), which reserves for issuance 4,000,000 shares of the Company’s common stock, which may be granted from time to time to Directors,directors, employees and certain independent contractors. The 2015 Plan was approved by 51.184% of the shareholdersstockholders on December 2, 2015. No securities had been approved for issuance as of December 31, 2015. Subsequent to December 31, 2015, a total of 4,000,000 shares have been issued or reserved for issuance under the 2015 Plan.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Set forth below is information regarding shares of common stock issued and warrants granted by us since December 31, 2011,2015 that were not registered under the Securities Act.Act of 1933, as amended (the “Securities Act”). Also included is the consideration, if any received by us, for securities and information relating to the Securities Act, or rules of the SEC, under which exemption from registration was claimed.

In connection with the private offerings noted above, the Company has engaged a broker/dealer, Livingston Securities, LLC, to assist as placement agent for the securities. On November 16, 2018, the Company entered into a Placement Agent’s Agreement in connection with a proposed November 2018 private offering. The Company terminated the Agreement March 26, 2019. No underwriters were involved in the foregoing issuances of securities. Each of the above transactions werewas exempt from the registration requirements of the Securities Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act. The recipient of the securities in each of these transactions represented his, her or its intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates or book-entry positions representing the shares issued in each of these transactions. In each case, the recipient had adequate access, through his, her or its relationship with the Company, to information about the Company.

As a “smaller reporting company”, as defined byin Item 10 of Regulation S-K, the Company is not required to provide the information required by this item.

Overview

Zero Gravity Solutions, Inc., a Nevada corporation,ZGSI is a biotechnology company focused on commercializing technology derived from and designed for spaceflight with significant applications on Earth.earth. These technologies are focused on improving world agriculture by providing valuable solutions to challenges facing humanity including threats to world agriculture and the ability to feed the world’s rapidly growing population. The Company’s business modelobjective is currently focused on its two primary business segments: 1) BAM-FX™the commercialization of BAM-FX^®, which is a cost effective, ionic nutrient delivery systemplatform and bio-stimulant for plants that can deliverprovides efficient delivery of minerals and micronutrients systemically at the cellular level of a plant; and 2) Directed Selection™, which relates to the production and alteration of new varieties of novel stem cells with unique and beneficial characteristics in the prolonged zero/micro gravity environment of the International Space Station. These novel stem cells, if developed, could be patented for commercial sale to third parties in the agricultural and human regenerative medical markets.plants. ZGSI is headquartered in Boca Raton, Florida.

The Company is focused on near-term revenue generation through the introduction of BAM-FX^®, to domestic and international agricultural markets. BAM-FX^® is licensed in and registered for sale as a fertilizer application with fifty (50) domestic states and has been approved for import and commercial sales in Chile, Paraguay, Colombia, Brazil, India and China. Our distributor in Mexico, Agro Space, is in the process of obtaining Mexican government approval for commercial sales. The Company is also pursuing import approval through proper governmental officials and agencies to begin commercial sales in Indonesia and Philippines. International operations are conducted through in-country established businesses with which a distribution agreement has been executed or other strategic business activities are separated between two primary wholly owned subsidiaries. BAM Agricultural Solutions, Inc., (“BAM Inc.”), oversees product introduction and business development through in-field trials with crop growers, produces and sells our BAM-FX™ product. Zero Gravity Life Sciences Inc. (“ZGLS”) is responsible for any space research projects, life science applications of our technology and conducting research on future BAM Inc. product lines. We believe that the separation of these functions and the corresponding allocation of management by expertise will enable us to improve our performance and provide focus on our different business activities.relationship has been established.

A separate wholly owned subsidiary, Zero Gravity Solutions, LTD (ZGS Ltd.), domiciled in England, was engaged in European market and business development. During the first quarter

The Company is currently focused on its near-term revenue generation plan through the introduction of the Company’s first commercialbegan domestic product BAM-FX™, to the world’s agricultural markets. The Company conducted field trials on a variety ofmultiple crops in laboratory and academic settings as well as in-fieldin field applications on grower/end-user crops during 2014. These trials showed very positive results including a significant increase in yield, quality2014 and nutritional value in a variety of crops. Given the success of trials conducted in 2014, the Company expanded field applications with those and additional trial participants during 2015. During 2015, the Company initiated in excess of sixty (60)subsequent years. The initial and subsequent year trials on a variety of field crops, vegetables and fruits with first year participants and additional trials commenced with initial participants. Many of our second season trials have completed or are near completion. The final results for these trials are expect to be available during the first quarter 2016, however, initial observations showshowed significant yield, nutritional value and biomass improvements for crops treated. The numberWe continue to use validation trials with growers to increase our understanding of application rates and protocols for our product and show efficacy. These trials on grower/end-user crops expanded during 2015are critical in both market and product development. During the Midwest United States, Rocky Mountain States, California, Florida, Chile, Pakistan, Mexico and Guatemala. To support its commercial and field trial efforts,past two years, the Company has hired or contractedincreasingly focused on obtaining technical, third-party validated, marketing material, through studies with certified crop advisorsacademic institutions and qualified personnel for sales and marketing support,NASA, in field test research and toxicology services.accordance with the Company’s RSAA.

The Company openedbegan to see limited success penetrating domestic and international markets during 2017. Domestically, the agronomy team conducted in excess of one hundred and fifty grower trials to replicate positive results from prior years using established product protocols and to refine product protocols on a manufacturing facilityvariety of crops in addition to a number of third party validated trials. In 2018, we limited our trials and marketing emphasis to high value crops including grape, tobacco, avocado, soy bean, cotton, berries and cannabis. In addition, we focused on specific geographies in the United States, California and Texas, and internationally, in Brazil, India and China. We believe our efforts in these geographies and crops will open opportunities for future revenue.

We developed a ready to use, home and garden product, Gardener’s Choice^®, during 2017 for retail markets. Independent third parties successfully tested Gardener’s Choice^® for plant performance and consumer safety during the thirdlast half of 2017 into the first quarter of 20142018. During the fourth quarter of 2017, the Company showcased the product at the Ace and GIE home and garden trade shows and generated significant interest from prospective purchasers. During the first and third quarters of 2018, the Company marketed Gardener’s Choice^® directly to supplyAce Hardware retailers at their annual trade shows. We have received positive feedback from retailers and big box home and garden stores and expect to place product for trial and expected future product demand and began the commercial roll outin a number of BAM-FX™ into the world’s agricultural markets. Manufacturing is conducted on an as needed batch process. stores during 2019.

The Company conductedengaged a complete regulatory reviewwell-established distributor in the Mid-west to provide wholesale distribution and assist in marketing Gardener’s Choice^® to a number of the manufacturing operationsbig box retail outlets. We completed state registration for sale, labeling and promotional material in all fifty domestic states for Gardener’s Choice^® during the first quarter of 20152019.

To support commercialization and revenue generation efforts, the Company employs certified crop advisors and agronomists for the technical requirements of product introduction domestically and internationally. Reductions in our consulting agronomy staff occurred during 2015 has made certain policy and procedural changes to ensure compliance with good manufacturing processes and regulatory requirements. During the thirdfourth quarter of 2015, the Company engaged a chemical process engineer2017 due to analyze plantcurtailed operations in Chile and audit adherencedomestically to regulatory requirements. The Company expects to make ongoing process improvementsfocus on specific geographies and equipment modifications to existing equipment to enhance efficiencies resulting from the recommendations made; and also expects to add a second processing line for redundancy on or about the third quarter of 2016.

During the second quarter of 2015, our chief scientist began developing new formulations of BAM-FX™ to address nutritional needs of plants that are additive to our product’s current zinc and copper formulation. The new formulation addresses known plant deficiencies of boron, manganese, magnesium and iron and can be manufactured to include all or numerous combinations of these elements. The new formulation has been tested by an independent laboratory and verified the existence of and ability to combine those elements. We expect to further develop these formulations in a laboratory setting and perform limited trials of new formulations during 2016.crops.

The Company continues to develop technical relationships to validate the science incorporated in BAM-FX™BAM-FX^® and identify additional commercial markets and licensing opportunities for the product. During the first quarter of 2016, the Company executed a new five year Reimbursable Space Act Agreement, (“RSAA”),five-year RSAA with NASA ARC and an existing investor and contractor, Intrinsyx.ARC. The RSAA will givegives the Company access to NASA scientists and laboratories, which when engaged, may assist in identifying and documenting additional attributes of the Company’s science and potential applications in other segments of agricultural markets. We continued working with NASA ARC through the second quarter of 2017 and have not renewed the RSAA due to lack of adequate resources. We maintain our relationship with researchers and specialists at NASA ARC and hope to continue research when sufficient resources are available.

The Company manufactures its product in a manufacturing facility in Okeechobee, Florida. Manufacturing is conducted on an as-needed batch process. The Company continually performs regulatory and process efficiency reviews of manufacturing operations. Our process improvements are intended to closely align production with a continuous flow production process. During 2018, we engaged a contract product packaging company with turnkey fulfillment services in the production of Gardener’s Choice^® and product for the legal cannabis industry.

We began developing new formulations of BAM-FX^® to address nutritional needs of plants that are additive to our product’s current zinc and copper formulation in 2015. New formulations can include boron, manganese, magnesium and iron, which address known plant deficiencies. We believe formulations can be manufactured to include all or numerous combinations of these elements. Certain new formulations were tested to verify the ability to combine those elements during 2017.

We successfully tested a granular formulation, which maintains the attributes of our product, during 2017 and validated the product’s efficacy in 2018. With the granular formulation transportation and handling costs are reduced significantly allowing us to economically address commercial markets. We expect to develop a product suite containing additional nutrients in a dry product during 2019, with the intent of adding a number of new specialized products to our current product offering.

Although we have started and realized nominal product sales, we anticipate that in the near term, ongoing expenses, including product marketing,development, manufacturing process improvement, developing distributor relationships and the expansion of our in field salescorporate administration and technical personnel,product support, will be funded primarily by proceeds from sales of our securities. On February 27, 2015, we closedsecurities or in the form of debt.

During 2016, the Company commenced a private offering that commenced in March 2013 which raised gross proceeds of $4,448,297up to $10,000,000 of which $1,253,800 was received during 2015. Beginning in May 2015, we began an additionalthe Company’s securities consisting of 3,333,333 common shares for $3.00 per common share. Proceeds from the offering from which,were $665,001 with offering costs of $53,200 as of December 31, 2015, we received $4,542,500 in gross proceeds. Direct offering costs relating to these offerings were $536,250 as2016. As of December 31, 2015. Subsequent to year end2017, we received an additional $1,627,500$2,376,000 in gross proceeds.

On July 16, 2015,proceeds from this offering with offering costs of $169,472. For the Company executed a $500,000 Promissory Noteyear ended December 31, 2018, we received $911,154 in gross proceeds from the offering with a Memberoffering costs of the Board of Directors, Michael T. Smith. The Promissory Note carries interest of 8.5% per annum, interest payable quarterly, with a maturity date of July 16, 2016.$25,680. The Company may prepay the obligation without prepayment penalty.

closed this private offering during June 2018.

We have generated nominal revenues from our operations thus far and expect that product sales will increase significantly in 2016. The sale cycle for BAM-FX™ in agricultural markets is generally two years or two2019 primarily from direct sales to end users, domestic and international channel partners’ distribution efforts, initial revenues from our retail product, Gardener’s Choice^® and introduction of product into specialty crop growing seasons with beneficial results. A customer generally will purchase a product after successfully testing over two consecutive crop growing seasons and verifying the product’s consistent performance and benefits on crop yields.markets.

During 2014, we commenced numerous grower trials on numerous crops, which 2015 was second year of testing the benefits of applying BAM-FX™ on those same crops. In 2015, we also initiated a number of trials with new growers, their first season of testing. Although final analysis of results is in process, the initial results of the second season trials have been favorable. We believe the favorable second year test results will result in an increase in revenue from sales in 2016 as growers have replicated crop improvement using BAM-FX™ and will begin to purchase inventory for the 2016 growing season. We cannot, however, guarantee we will be successful in generating significant revenue in 20162019 or in the execution of our business strategy. Our business is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with the limited capital resources currently available to us for the implementation of our business strategies. To become profitable and competitive, we must raise additional capital to execute on our 20162019 business plan and realize revenues expected.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and accompanying notes. Note 1: Organization and Summary of Significant Accounting Policies in our Consolidated Financial Statements contains a description of the accounting policies used in the preparation of our financial statements as well as the consideration of recently issued accounting standards and the estimated impact these standards will have on our financial statements. We evaluate our estimates on an ongoing basis, including those related to revenue recognition and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances. Actual amounts could differ significantly from these estimates under different assumptions and conditions.

We define a critical accounting policy or estimate as one that is both important to our financial condition and results of operations and requires us to make difficult, subjective or complex judgments or estimates about matters that are uncertain. We believe that the following are the critical accounting policies and estimates used in the preparation of our Consolidated Financial Statements. In addition, there are other items within our Consolidated Financial Statements that require estimates but are not deemed critical as defined in this paragraph.

Revenue Recognition

We recognize revenues from the sale of agricultural biotechnology products to distributors and customers pursuant to the provisions of ASC 606, “Revenue Recognition”.

We recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the company expects to be entitled in exchange for those goods or services. The core principle of this Topic is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Revenue is recognized in accordance with the core principle by applying the following five steps: 1) identify the contracts with a customer; 2) identify the performance obligations in the contract; 3) determine the transaction price; 4) allocate the transaction price to the performance obligations; and 5) recognize revenue when (or as) we satisfy a performance obligation.

Revenues for agricultural chemical products are recognized when title to the products is transferred which may be upon shipment to the customer or receipt by the customer of the product. This satisfies the performance obligation on which we earn the transaction price. There was no cumulative effect of adopting ASC 606. Amounts billed to customers for shipping and handling fees are included in net sales, and costs incurred by the company for the delivery of invoiced goods are classified as cost of goods sold in our Statements of Operations.

Going Concern

We adopted FASB ASU No. 2014-15, Presentation of Financial Statements- Going Concern, during the first quarter of 2016.  This standard defines management’s responsibility to evaluate conditions or events as related to uncertainties that raise substantial doubt about our ability to continue as a going concern and to provide related footnote disclosures, as applicable.  Management’s estimates and assumptions, used in the evaluation of our ability to meet our obligations as they become due within one year after the date our financial statements are issued, are based on the facts and circumstances at such date and are subject to a material and high level of subjectivity and uncertainty due to the matters themselves being uncertain and subject to modification. The effect of any individual or aggregate changes in the estimates and assumptions, or the facts and circumstances, could be material to the financial statements. We have concluded that there is substantial doubt about our ability to continue as a going concern. The accompanying financial statements have been prepared assuming we will continue as a going concern, but do not include any adjustments that might result if we were unable to do so.

Employee Stock-Based Compensation and Share-Based payment to non-employees

We measure employee compensation expense for all stock-based awards at fair value on the date of grant and recognize compensation expense over the service period for awards expected to vest.

We use the Black-Scholes option-pricing model to determine the fair value for stock option awards and recognize compensation expense on a straight-line basis over the awards' vesting periods. Determining the fair value of stock-based awards at the grant date requires judgment. The determination of the grant date fair value of options using an option-pricing model is affected by our estimated common stock fair value as well as assumptions regarding a number of other complex and subjective variables. If any of the assumptions used in the Black-Scholes model changes significantly, stock-based compensation for future awards may differ materially compared with the awards granted previously. In valuing our options, we make assumptions about risk-free interest rates, dividend yields, volatility and weighted-average expected lives, including estimated forfeiture rates, of the options.

As the Company's common stock is not traded in an active market, the Company estimates the fair value of its common stock (used in its Black Scholes option pricing model) pursuant to ASC 820. This estimation process maximizes the use of observable inputs, including the quoted price of the Company's common stock in an inactive market, the price of the Company's common stock determined in connection with transactions in the Company's common stock, and an income approach to valuation.

The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, including the expected term and the price volatility of the underlying stock, which determine the fair value of stock-based awards. These assumptions include:

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 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 additional paid-in capital in shareholders' deficit 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.

Results of Operations