UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C.  20549



Form
10-K



☒ANNUAL
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the fiscal year ended December 31, 2016



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



For
the transition period from _______ to _______.



Commission
file number:   001-32134



Agritech
Worldwide, Inc.



(Exact
name of registrant as specified in its charter)



|Nevada                                                             |  | 36-4197173                              
|------------------------------------------------------------------ |  | ----------------------------------------
|(State
    or other jurisdiction of incorporation or organization) |  | (I.R.S.
    Employer Identification No.)





|1011 Campus Drive, Mundelein, Illinois   |  | 60060     
|---------------------------------------- |  | ----------
|(Address of principal executive offices) |  | (Zip Code)



|Registrant’s telephone, including area code:   
        (847) 549-6002
|----------------------------------------------------------------------





Securities
registered under Section 12(b) of the Exchange Act:  None.



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



|Common
Stock, $0.00005 par value |  | Not
    Applicable                         
|-------------------------------- |  | -------------------------------------------
|(Title
of class)                 |  | (Name
of each exchange on which registered)







Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.



Yes  ☐
  No ☒



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☐
  No ☒



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No
☐



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



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ☐



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





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



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





Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes  ☐
  No ☒



The
aggregate market value of the Company’s common equity held by non-affiliates computed by reference to the closing price of
$0.0126 as of the last business day of the registrant’s most recently completed second quarter was:   $292,219.



The
number of shares of our common stock outstanding as of April 14, 2017 was 154,976,459.



Documents
Incorporated by Reference:  None.




















Table
of Contents





|                  |                                                                                                                   | Page
|----------------- | ----------------------------------------------------------------------------------------------------------------- | ----
|                  |                                                                                                                   |     
|PART
    I        |                                                                                                                   |     
|                  |                                                                                                                   |     
|Item
    1.       | Business.                                                                                                         | 1   
|Item
    1A.      | Risk
    Factors.                                                                                                 | 4   
|Item
    1B.      | Unresolved
    Staff Comments.                                                                                    | 4   
|Item
    2.       | Properties.                                                                                                       | 4   
|Item
    3.       | Legal
    Proceedings.                                                                                            | 4   
|Item
    4.       | Mine
    Safety Disclosures.                                                                                      | 4   
|                  |                                                                                                                   |     
|PART
    II       |                                                                                                                   |     
|                  |                                                                                                                   |     
|Item
    5.       | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 5   
|Item
    6.       | Selected
    Financial Data.                                                                                      | 6   
|Item
    7.       | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations.                        | 6   
|Item
    7A.      | Quantitative
    and Qualitative Disclosures About Market Risk.                                                   | 11  
|Item
    8.       | Financial
    Statements and Supplementary Data.                                                                  | 11  
|Item
    9.       | Changes
    In and Disagreements With Accountants on Accounting and Financial Disclosure.                         | 11  
|Item
    9A.      | Controls
    and Procedures.                                                                                      | 11  
|Item
    9B.      | Other
    Information.                                                                                            | 13  
|                  |                                                                                                                   |     
|PART
    III     
|                  |                                                                                                                   |     
|Item
    10.      | Directors,
    Executive Officers and Corporate Governance.                                                       | 14  
|Item
    11.      | Executive
    Compensation.                                                                                       | 17  
|Item
    12.      | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.               | 22  
|Item
    13.      | Certain
    Relationships and Related Transactions, and Director Independence.                                    | 24  
|Item
    14.      | Principal
    Accounting Fees and Services.                                                                       | 29  
|                  |                                                                                                                   |     
|PART
    IV       |                                                                                                                  
|                  |                                                                                                                   |     
|Item
    15.      | Exhibits,
    Financial Statement Schedules.                                                                      | 30  
|Item
    16       | 10-K
    Form 10-K Summary                                                                                        |     
|Signatures        | 31                                                                                                               
|Exhibit
    Index | 32                                                                                                               
|Certifications    |                                                                                                                  













Cautionary
Note Regarding Forward-Looking Statements



This Annual Report on Form 10-K (this
“Annual Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), that involve substantial risks and uncertainties. The forward-looking
statements are contained principally in Part I, Item 1. “Business,” Part I, and Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this Annual
Report. In some cases you can identify forward-looking statements by terminology such as “may,” “should,”
“potential,” “continue,” “expects,” “anticipates,” “intends,” “plans,”
“believes,” “estimates,” and similar expressions.





These
statements are based on our current beliefs, expectations, and assumptions and are subject to a number of risks and uncertainties,
many of which are difficult to predict and generally beyond our control, that could cause actual results to differ materially
from those expressed, projected or implied in or by the forward-looking statements. We cannot assure you that the forward-looking
statements in this Annual Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate,
the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not
regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans
in any specified time frame, or at all. We do not undertake any obligation to update any forward-looking statements.



Unless
the context requires otherwise, references to “we,” “us,” “our,” and “Agritech”
refer to Agritech Worldwide, Inc. We currently have no operating subsidiaries.













PART
I



|ITEM1. | BUSINESS.
|------ | ---------



Overview



On
April 5, 2017, we and GKS Funding LLC, as administrative agent under the Loan Agreement (as defined below) (“GKS Funding”)
entered into a Cooperation Agreement (the “Cooperation Agreement”) in connection with a loan (the “Loan”)
made to us pursuant to that certain Loan and Security Agreement, dated as of February 1, 2017 (as amended and in effect from time
to time, the “Loan Agreement”), between us, the Lenders party thereto and GKS Funding. On March 31, 2017, we received
a notice of default from GKS Funding stating that we were in default of the Loan for failure to make a scheduled interest payment
on the Loan that was due on March 31, 2017. If such failure described above was not cured within the 15-day cure period, which
was April 15, 2017, the Lenders (through GKS Funding, as administrative agent under the Loan Agreement) intended to exercise all
rights and remedies available to them under the Loan Agreement, related note and applicable law, which included foreclosing on
the collateral under the Loan Agreement.



As
of the date of the Cooperation Agreement, the outstanding balance of our obligations under the Loan Agreement was approximately
$1,011,800, plus accrued and accruing legal fees and expenses. Over the past several months, we have experienced significant operating
losses and have been unable to raise additional capital in order to pay the expenses necessary to continue to operate its business.
For the same reason, we were unable to pay interest on the Loan on March 31, 2017 (the “Existing Default”).



As
a result of the foregoing, and after considering all options, our Board of Directors determined that we would not have sufficient
funds to cure the Existing Default on or before April 15, 2017. In addition, given our inability to raise additional capital to
fund ongoing operations, we also determined that we would be unable to continue to operate as a going concern. Thus, we determined
that it was in the best interests of all constituents that we cooperate with GKS Funding and its exercise of remedies.



Pursuant
to the Cooperation Agreement, we and GKS Funding agreed as follows: (i) we waived the 15-day cure period with respect to the Existing
Default immediately upon execution of the Cooperation Letter and GKS Funding has the right to exercise its remedies under the
Loan Agreement and applicable law with respect to such event of default, including, without limitation, by scheduling and conducting
a sale of all of the collateral under the Loan Agreement on or about April 17, 2017 (the “UCC Sale”); (ii) GKS Funding
agreed to fund loans to us up to the date of the UCC Sale to permit us to pay the Budgeted Expenses (as defined in the Cooperation
Agreement) as and when due with this new loan, which is (a) secured by a first priority security interest in all of our real and
personal assets, property, fixtures, rights and interests, (b) shall have priority in payment over the Loan made pursuant to the
Loan Agreement; and (c) shall be repaid, before any other payments are made by us, out of the first cash proceeds of the collateral
received by us; and (iii) we consented to fully cooperate with GKS Funding in connection with the UCC Sale, as well as the exercise
by GKS Funding of any of its other right and remedies in connection therewith.



In
light of the foregoing, we do not anticipate that we will be able to continue in our current line of business. At this point,
the Board is reevaluating its business plan and strategy and has not made any determination as to whether or not it will seek
to engage in a new line of business.



During
the past year, our sole operations were as an agricultural technology company. The products and processes that we owned and are
being foreclosed upon by GKS Funding convert generally available agricultural by-products into multi-functional all-natural ingredients
that can be used in food manufacturing and other industries. Our primary focus and the source of substantially all of our revenue
during the past several years has been from the sale of our all-natural products, Z Trim®, to the food industry. Our business
involved the sale of a line of all-natural products to the food industry designed to help manufacturers reduce their costs, improve
the quality of finished goods, and solve many production problems.



Products



During
the year ended December 31, 2016, our core product portfolio was comprised of multifunctional food ingredients that included Corn
Z Trim® (both GMO and non-GMO) and Oat Z Trim®. The superior water-holding capacity and amorphous structure of Z Trim
ingredients are key to the exclusive multifunctional attributes they contribute to food product design, including moisture management,
oil deflection, texture and appearance quality, fat and calorie reduction. These attributes allow manufacturers using such products
to reduce costs of finished products by replacing more expensive ingredients with our fiber and water.  Z Trim®
is now being used by food manufacturers world-wide, across a multitude of food categories, such as meats, sauces, soups, dressings,
baked goods, fillings, toppings, prepared meals, dairy products, frozen handheld snacks, and pizza dough. Food formulators are
seeking greater functionality and product performance than they can get from starches, gums, fats, and other fibers – for
both standard and lower fat content foods - and Z Trim® multifunctional ingredients can help to satisfy their consumers with
finished products that we believe have enhanced eating quality, outstanding product performance, and frequently, improved nutritional
profiles.



1







Product
Distribution



Our
food ingredients had been marketed through (i) direct and brokered sales to major food manufacturers, as well as small and midsize
companies for packaged retail foods, and (ii) direct and brokered sales to large and small foodservice manufacturers that supply
to restaurants, hospitals, schools and cafeterias. In addition to direct sales, we used a network of ingredient distributors,
both domestic and international, to distribute our products.



Competition



Z
Trim® ingredients have competed with a wide variety of hydrocolloids and other fiber ingredients.  Within the food
industry, depending on the food application, required functional properties and product development objectives, competitive ingredients
included gums (e.g., guar, xanthan, locust bean, and Arabic), seaweed extracts (e.g., alginates, carrageenan), starches (native,
modified and resistant), and fibers (e.g., oat bran, corn bran, pea fiber, potato fiber).  Most of these competitive
ingredients are well-established in the food industry, and many of the companies that supply them have substantially greater resources
than we do.  However, we believe that the unique properties of our multifunctional fiber ingredients provide differentiation
and growth opportunities for food companies.  We believe that no other single hydrocolloid or fiber has the combined
water holding and binding capacity that is effective across as wide a pH and temperature range as Z Trim®, and that Z Trim®
ingredients can have synergistic effects with other hydrocolloids and fibers, allowing food manufacturers to achieve greater processing
improvements, cost efficiencies, and finished product performance.  Many of the same ingredients used in foods are also
used for industrial applications, where they compete with a similar complement of ingredients.



Sources
and Availability of Raw Materials and the Names of Principal Suppliers



Raw
materials used in Z Trim® products are sourced principally in the United States.  Approximately 70% of the raw materials
consist of corn bran and oat hulls, which are generally available from a variety of suppliers.  Our major suppliers
included Agricor, Inc. and Brenntag, Inc.



Dependence
on a Few Major Customers



Our
customers have been predominantly food manufacturers.  There were three significant customers who accounted for 34%,
12% and 7%, respectively, of total sales for the year ended December 31, 2016. There were three significant customers who accounted
for 45%, 10% and 6%, respectively, of total sales for the year ended December 31, 2015. The loss of any of these three customers
we believe would have a material adverse effect on our revenue.



Intellectual
Property



Our
intangible assets included patents pending and issued, as well as trade secrets and know how. Through the process of development
and commercialization of our technology, we had identified and sought patent protection for improvements to the manufacturing
process and product applications.



All of our intellectual property has been
pledged as collateral to GKS Funding and we expect will be sold by GKS Funding when they sell the collateral on April 17, 2017.





On
December 1, 2009, we were issued U.S. Patent No. 7,625,591 B2; which expires in 2026 subject to the payment of maintenance fees.  On
July 27, 2010, we were issued U.S. Patent No. 7,763,301; which will expire in 2027 subject to payment of maintenance fees.  These
patents expanded the raw material sources for the creation of Z Trim products as well as incorporate blends of ingredients combined
with Z Trim.



In
March 2013 we, jointly with the USDA, filed a utility patent for our BioFiber Gum line of products, seeking patent protection
for the composition of matter, process for making, as well as applications for, our proprietary soluble fibers (application number:
PCT/US2014/0017376). In January 2015 the USDA commended global filings outside of the United States. On September 6, 2016, U.S.
Patent No. 9,434,788 B2 was issued which expired in 2032 subject to the payment of maintenance fees.



We
have four additional utility patents on file that cover composition, process and various applications of Z Trim and BioFiber Gum,
each filed jointly with the USDA and pledged as collateral to GKS.



2









Government
Regulation



As
an agricultural technology company, we have been subject to a broad range of federal, state, local and foreign laws and regulations
intended to protect public health and the environment. Food production and marketing are highly regulated by a variety of federal,
state, local, and foreign agencies.  However, as ingredients are made from natural raw material sources (corn and oat),
they are considered Generally Recognized As Safe or “GRAS” and therefore not subject to many of the regulations
applicable to foods.



In
October 2012, the FDA approved the labeling of the products that we have sold in meat applications. Specifically, the FDA has
approved the use of the ingredients in ground, emulsified, and processed meats and poultry.



Research
and Development



Our R&D team, in conjunction with
our customers and strategic industry partners, including the USDA, has worked on the development of additional products and applications.  In
June 2011, we entered into a 3-year agreement with the USDA to conduct joint research for the development of additional products
and processes relating to our current patented products. This agreement was amended and the duration extended through May 31,
2016.  In January 2017, we entered into a new 3-year agreement with the USDA to conduct joint research for the development
of additional products and processes relating to our current patented products. We require all employees and visitors to our plant
to execute a non-disclosure agreement.  Research and Development expense was $10,817 in the year ended December 31,
2016 and $181,713 in the year ended December 31, 2015.





Environmental
Compliance





We have not faced any material
environmental compliance issues as a result of our manufacturing process, however there can be no assurances that we will continue
to comply in the future or that any future business we enter into will comply.



Employees



Presently, we have 14 full-time employees; however, that
is expected to change after GSK Funding forecloses on our assets.



Our
History



We
were originally incorporated in the State of Illinois on May 5, 1994 under the original name Circle Group Entertainment Ltd.  On
June 21, 2006, we filed a certificate of amendment to our certificate of incorporation and changed our name to Z Trim Holdings
Inc. On March 23, 2016, we changed our state of incorporation by engaging in a merger (the “Reincorporation”) with
and into our newly formed wholly owned subsidiary, Agritech Worldwide, Inc., a Nevada corporation, pursuant to the terms and conditions
of an Agreement and Plan of Merger entered into by Z Trim and Agritech on March 18, 2016 (the “Merger Agreement”). 
The Reincorporation was consummated on March 23, 2016 and was effectuated by the filing of (i) articles of merger with the Secretary
of State of the State of Nevada, and (ii) articles of merger with the Secretary of State of the State of Illinois. The Reincorporation
effected a change in our legal domicile form Illinois to Nevada. Upon the effectiveness of the Reincorporation our affairs of
ceased to be governed by (i) Illinois corporation laws, (ii) our Articles of Incorporation, and (iii) our Bylaws, and our affairs
became subject to (a) Nevada corporation laws, (b) Agritech’s Articles of Incorporation of and (c) Agritech’s Bylaws.
The resulting Nevada corporation is (i) be deemed to be the same entity as the Illinois corporation for all purposes under the
laws of Nevada, (ii) continue to have all of the rights, privileges and powers of the Illinois corporation, (iii) continue to
possess all properties of the Illinois corporation, and (iv) continues to have all of the debts, liabilities and obligations of
the Illinois corporation.



Properties



Our principal offices are located at 1011
Campus Drive, Mundelein, Illinois 60060; however that is expected to change after GSK Funding forecloses on our assets.





Available
Information



Additional
information about us is contained at our website, www.agrtch.com. Information contained on our website is not incorporated by
reference into, and does not form any part of, this Annual Report on Form 10-K. We have included our website address as a factual
reference and do not intend it to be an active link to our website.



3









We make available on our website our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K as soon as reasonably practicable after those
reports are filed with the SEC. Our phone number is (847) 549-6002 and our facsimile number is (847) 549-6146. Our filings may
also be read and copied at the SEC's Public Reference Room at 100 F Street NE, Room 1580 Washington, DC 20549. Information on
the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet
site that contains reports, proxy and information statements, and other information regarding issuers that file electronically
with the SEC. The address of that website is www.sec.gov.



| | ITEM1A. | Risk
                                         Factors.
| | ------- | ------------------------------------------------------



Not
required as we are a smaller reporting company.



| | ITEM1B. | Unresolved
Staff Comments.
| | ------- | --------------------------



None.



| | ITEM
                                                                    2. | Properties.
| | --------------------------------------------------------------------------- | -----------





We occupy approximately 44,000 square
feet of leased space at 1011 Campus Drive, Mundelein, Illinois. This space is leased for $17,972 per month, including property
taxes.  The current lease term is on a month to month basis. Upon foreclosure of our assets, we anticipate that we will
no longer continue to occupy the currently leased premises.



We do not own any real property.



| | ITEM
                          3. | Legal
                                         Proceedings.
| | --------------------------------- | -----------------------------------------------------------



In
July 2007, we were sued in the 20th Judicial Circuit Court, St. Clair County, Illinois by Joseph Sanfilippo and James Cluck for
violation of the Consumer Fraud Act and they are seeking damages in excess of $200,000.  The trial court has issued
a default order against us, and has denied our motion to reconsider.  Management believes that the trial court’s
rulings were erroneous and that it has grounds for appeal, and that the underlying allegations are frivolous and wholly without
merit. We intend to vigorously defend the claim. The outcome of this matter is unknown as of the report date.  However,
we have conservatively allocated a reserve of $102,000 to satisfy any liability it may incur as a result of this proceeding. The
status at December 31, 2016 has remained the same.



Although
there can be no assurances, based on the information currently available, management believes that it is probable that the ultimate
outcome of this action will not have a material adverse effect on our financial statements.  However, an adverse outcome
could have a material adverse effect on our financial results in the period in which it is recorded.



| | ITEM4. | Mine
Safety Disclosures.
| | ------ | ------------------------



Not
Applicable.



4









PART
II



|ITEM
    5. | Market
    for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|----------- | -----------------------------------------------------------------------------------------------------------------



Since
October 6, 2010 our common stock has been quoted on the “OTCQB” electronic quotation system.



The
market for our common stock is limited, volatile and sporadic.  The following table sets forth the range of high and
low bid quotations for our common stock for each of the periods indicated as reported by the OTCQB.  Where such information
is not available, the high and low closing bid quotations as reported by the OTCQB have been provided.  These quotations
below reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.
The closing price of our common stock on April 13, 2017 was $0.0071.



|                                        |  | High |       |  | Low |  
|--------------------------------------- |  | ---- | ----- |  | --- | -
|                                        |  |      |       |  |     |  
|Fiscal
    Year Ended December 31, 2016 |  |      |       |  |     |  
|                                        |  |      |       |  |     |  
|Fiscal
    Quarter Ended:               |  |      |       |  |     |  
|March
    31, 2016                      |  | $    | 0.080 |  |     | $
|June
    30, 2016                       |  | $    | 0.055 |  |     | $
|September
    30, 2016                  |  | $    | 0.065 |  |     | $
|December
    31, 2016                   |  | $    | 0.020 |  |     | $
|                                        |  |      |       |  |     |  
|Fiscal
    Year Ended December 31, 2015 |  |      |       |  |     |  
|                                        |  |      |       |  |     |  
|Fiscal
    Quarter Ended:               |  |      |       |  |     |  
|March
    31, 2015                      |  | $    | 0.51  |  |     | $
|June
    30, 2015                       |  | $    | 0.35  |  |     | $
|September
    30, 2015                  |  | $    | 0.37  |  |     | $
|December
    31, 2015                   |  | $    | 0.20  |  |     | $







5









Holders



As
of January 27, 2017, there were approximately 2,508 record holders of the common stock.



Dividends



To
date, we have not declared or paid cash dividends on our shares of common stock.  We do not anticipate paying cash dividends
to the holders of common stock at any time.



Securities
Authorized for Issuance Under Equity Compensation Plans



The
following table sets forth certain information regarding grants under our equity compensation plan as of December 31, 2016:







|Plan Category                                          |  | Number of  securities to be  issued upon  exercise of  outstanding  options,  warrants and  rights |            |  | Weighted- average exercise price of outstanding options, warrants and rights |   |      | Number of securities remaining available for future issuance under equity compensation plans | 
|------------------------------------------------------ |  | -------------------------------------------------------------------------------------------------- | ---------- |  | ---------------------------------------------------------------------------- | - | ---- | -------------------------------------------------------------------------------------------- | 
|Equity compensation plans approved by stockholders (1) |  |                                                                                                    | 10,111,023 |  |                                                                              | $ | 0.52 |                                                                                              | 





(1)  All options or shares relate
to our Incentive Compensation Plan, which was approved by stockholders in 2012. In November 2015 we increased the number of shares
of common stock available for grant under the Plan to 40,000,000 shares of common stock.



Issuer
Purchases of Equity Securities



We
have never repurchased any shares of our common stock.



Recent
Issuances of Unregistered Securities



We did not sell any equity securities
during the fiscal year ended December 31, 2016 in transactions that were not registered under the Securities Act, other than as
previously disclosed in our filings with the Securities and Exchange Commission.





|ITEM
    6. | Selected
    Financial Data.
|----------- | ----------------------------



Not
Applicable.



|ITEM
    7. | Management’s
    Discussion and Analysis of Financial Condition and Results of Operations.
|----------- | ------------------------------------------------------------------------------------------



This Management’s Discussion
and Analysis of Financial Condition and Results of Operations contains forward-looking statements.  Forward-looking
statements are subject to risks, uncertainties and assumptions which could cause actual results to differ materially from those
projected.





The
following discussion should be read in conjunction with our consolidated financial statements and the related notes to the consolidated
financial statements in Item 8, “Financial Statements and Supplementary Data,” in Part II of this report.



Overview



During the year ended December 31, 2016,
our revenue was derived from the sale of products and processes that convert generally available agricultural by-products into
multi-functional all-natural ingredients that can be used in food manufacturing and other industries. GKS Funding has stated that
it intends to sell the collateral securing its loan, which includes all of our assets, on April 17, 2017. The results of operations
set forth below will not be meaningful in evaluating our company’s future operations since we do not anticipate being able
to remain in our current line of business after the foreclosure.





6







Going
Concern



We
incurred a net loss of $3,155,361 for the twelve months ended December 31, 2016, and had an accumulated deficit of $159,584,991.  As
of December 31, 2016, we had cash in the amount of $20,773 and total liabilities in the amount of $6,769,089. We also had a working
capital deficit of $6,614,632 as of December 31, 2016. Over the last several years, our operations have been funded primarily
through the sale of both equity and debt securities. Inasmuch as we are still evaluating our future strategy, it is difficult
for us to estimate our future operating needs.   As of the date of our most recent audit, for the fiscal year ended
December 31, 2016, we had not generated sufficient revenues to meet our cash flow needs.  Our current cash on hand is
insufficient for us to be able to maintain our operations at the current level through May 2017 and due to the outstanding debt
owed, we do not anticipate that we have the assets from which to continue our current operations. As a result, our auditors have
expressed substantial doubt about our ability to continue as a going concern.  Although we have generated revenue, we
are still operating at a net loss, and may continue to incur losses for a period of time.  We cannot assure you that
we will be able to obtain sufficient funds from our operating or financing activities to support our continued operations especially
since our continued operations have not yet been determined.  If we cannot continue as a going concern, and cannot successfully
revise our business plan we will need to cease operations, which will reduce or completely eliminate the value of your investment.



Reincorporation



We
were originally incorporated in the State of Illinois on May 5, 1994 under the name Circle Group Entertainment Ltd. On June 21,
2006, we filed a certificate of amendment to our certificate of incorporation and changed our name to Z Trim Holdings Inc. On
March 23, 2016, we changed our state of incorporation by engaging in a merger (the “Reincorporation”) with and into
our newly formed wholly owned subsidiary, Agritech Worldwide, Inc., a Nevada corporation, pursuant to the terms and conditions
of an Agreement and Plan of Merger entered into by Z Trim and Agritech on March 18, 2016 (the “Merger Agreement”).
The Reincorporation was consummated on March 23, 2016 and was effectuated by the filing of (i) articles of merger with the Secretary
of State of the State of Nevada, and (ii) articles of merger with the Secretary of State of the State of Illinois. The Reincorporation
effected a change in our legal domicile from Illinois to Nevada. Upon the effectiveness of the Reincorporation our affairs of
ceased to be governed by (i) Illinois corporation laws, (ii) our Illinois Articles of Incorporation, and (iii) our Illinois Bylaws,
and our affairs became subject to (a) Nevada corporation laws, (b) Agritech’s Articles of Incorporation of and (c) Agritech’s
Bylaws. The resulting Nevada corporation is (i) be deemed to be the same entity as the Illinois corporation for all purposes under
the laws of Nevada, (ii) continue to have all of the rights, privileges and powers of the Illinois corporation, (iii) continue
to possess all properties of the Illinois corporation, and (iv) continues to have all of the debts, liabilities and obligations
of the Illinois corporation.



Sales
and Manufacturing



Revenues
for the year ended December 31, 2016 increased by 2.3% as compared to revenues for the year ended December 31, 2015.



Equipment
Sale and Leaseback



On July 17, 2015, we entered into an equipment
purchase agreement (the “Purchase Agreement”) with Fordham Capital Partners, LLC (“Fordham”) pursuant
to which we sold all of our right, title and interest in production equipment utilized by the Company to Fordham for a purchase
price of $500,000. Concurrently with entering into the Purchase Agreement, on July 17, 2015, we entered into an equipment lease
agreement (the “Equipment Lease Agreement”) with Fordham pursuant to which we leased the production equipment from
Fordham on terms that included the following: a lease term of 24 months, monthly lease payments by the Company of $15,800 and
the option (at the election of the Company) to purchase the equipment on or after July 8, 2016 on the following terms: (i) if
the purchase date is between 12- 18 months $425,000; (ii) if the purchase date is between 19- 23 months: $360,000; and (iii) if
the purchase date is during the 24th month (but no later than July 8, 2017): $325,000. We received net proceeds of $172,911 from
the Purchase Agreement. The net proceeds were used for general corporate purposes.





In
connection with the Purchase Agreement, the Company’s Factoring Agreement with Fordham effective May 28, 2015, as amended
by an amendment dated June 25, 2015, was further amended to grant to Fordham a security interest in all of the collateral under
such agreement to secure the payment to Fordham of all rent payments and all other amounts owed by the Company to Fordham under
the Equipment Lease Agreement.



7









On
February 1, 2017, we used a portion of the proceeds of a loan from GKS Funding to exercise our purchase option under the Equipment
Lease Agreement. The production equipment has been pledged to GKS Funding as collateral and we anticipate it will be sold when
GKS Funding exercises its remedies under the Loan Agreement.



Results
of Operations



Revenues



Revenue
for the year ended December 31, 2016 was $1,177,344, as compared to revenue of $1,151,190 for the year ended December 31, 2015,
an increase of 2%.  Our revenue for both years was entirely attributable to product sales.  The increase in
sales was due to an increase in product volume shipped to customers. We cannot provide any assurance that we will be able to generate
any revenue once GKS forecloses on our assets.



Our
revenues, by quarter, for 2016, were as follows:



|Quarter |  | Revenues
|------- |  | --------
|Q1      |  | $269,018
|Q2      |  | $283,411
|Q3      |  | $371,085
|Q4      |  | $253,830







Cost
of Revenues



Cost
of revenues for products sold for the year ended December 31, 2016 and 2015 was $1,803,509 and $2,055,825, respectively.  The
decrease in costs of goods sold in 2016 of approximately 12% was attributable to production improvements in our own pilot facility.



Gross
Margin Income (Loss)



Gross
margin loss for the year ended December 31, 2016 was $626,165 compared to a gross margin loss of $904,635 for the prior year.
The decreased loss for 2016 was a result of production improvements in our manufacturing facility in Mundelein, Illinois.



Operating
Expenses



Total
operating expenses for the year ended December 31, 2016 were $2,027,493 a decrease of $1,649,020 or approximately 45% lower than
the comparable period ended December 31, 2015 of $3,676,513.



The
significant components of selling, general and administrative expenses in the years indicated were as follows:





|                                  |  | Year Ended December 31, |          
|--------------------------------- |  | ----------------------- | ---------
|                                  |  | 2016                    |          
|Stock based compensation expenses |  | $                       | 341,745  
|Salary expenses                   |  |                         | 426,150  
|Professional fees                 |  |                         | 223,631  
|Directors fees                    |  |                         | 25,369   
|Consultant Fees                   |  |                         | 211,791  
|Other                             |  |                         | 798,807  
|                                  |  |                         |          
|                                  |  | $                       | 2,027,493





The
decrease in salary and employee benefits for the year ended December 31, 2016 is attributable to fewer employees. Stock based
compensation was higher than a year ago as a result of additional grants including to our Chief Executive Officer.



8









Operating
Loss



Operating loss for the year ended December
31, 2016 was $2,653,658 compared to $4,581,148 for the year ended December 31, 2015 due to the reasons described above.



Other
Expense



Other
expenses were $501,703 for the year ended December 31, 2016 compared to $19,395,283 in the year ended December 31, 2015. The primary
reason for the change was due to the higher warrant-related expenses in 2015.



Net
Loss



As
a result of the foregoing, we incurred a net loss of $3,155,361 for the year ended December 31, 2016, or $0.03 per share, compared
to $23,976,431 for the year ended December 31, 2015, or $0.41 per share.



The
decrease in the net loss per share for the year ended December 31, 2015, as compared to the year ended December 31, 2014 was due
to the effect of the results described above partially offset by the number of the additional shares outstanding in 2015.



Liquidity
and Capital Resources



As of December 31, 2016, we had a cash
balance of $20,773, a decrease of $289,078 from the cash balance of $309,851 at December 31, 2015.  At December 31,
2016, we had a working capital deficit of $6,614,632, an increase in deficit from the working capital deficit of $3,801,651 as
of December 31, 2015.  The difference in working capital was primarily because of an increase in accounts payable, an
increase in short term borrowings and notes payable and an increase in accrued liabilities during 2016.  As of April
11, 2017, we had a cash balance of $41,821.







Over the last several years, our
operations have been funded primarily through revenue generated from operations and the sale of both equity and debt
securities. We continue to explore additional lines of business to enter into and equity and debt funding however, there can
be no assurance that we will be successful in raising all of the additional funding that we are seeking or that such amount
will be sufficient for our needs. As of the date of our most recent audit, for the fiscal year ended December 31, 2016, we
had not generated sufficient revenues to meet our cash flow needs.  Our current cash on hand is insufficient for us
to be able to maintain our operations at the current level through May 2017. As a result, our auditors have expressed
substantial doubt about our ability to continue as a going concern.  Although we have generated revenue, we are
still operating at a net loss, and may continue to incur losses for a period of time.  We cannot assure you that we
will be able to obtain sufficient funds from our operating or financing activities to support our continued
operations.  If we cannot continue as a going concern, we will need to substantially revise our business plan or
cease operations, which will reduce or completely eliminate the value of your investment.



On April 5, 2017, we and GKS Funding
entered into the Cooperation Agreement in connection with the Loan made to us pursuant to that certain Loan Agreement, between
us, the Lenders party thereto and GKS Funding. On March 31, 2017, we received a notice of default from GKS Funding stating that
we were in default of the Loan for failure to make a scheduled interest payment on the Loan that was due on March 31, 2017. If
such failure described above was not cured within the 15-day cure period, which was April 15, 2017, the Lenders (through GKS Funding,
as administrative agent under the Loan Agreement) intended to exercise all rights and remedies available to them under the Loan
Agreement, related note and applicable law, which included foreclosing on the collateral under the Loan Agreement.



As of the date of the Cooperation Agreement,
the outstanding balance of our obligations under the Loan Agreement was approximately $1,011,800, plus accrued and accruing legal
fees and expenses. Over the past several months, we have experienced significant operating losses and have been unable to raise
additional capital in order to pay the expenses necessary to continue to operate its business. For the same reason, we were unable
to pay interest on the Loan on March 31, 2017 (the “Existing Default”).



As a result of the foregoing, and after
considering all options, our Board of Directors determined that we would not have sufficient funds to cure the Existing Default
on or before April 15, 2017. In addition, given our inability to raise additional capital to fund ongoing operations, we also
determined that we would be unable to continue to operate as a going concern. Thus, we determined that it was in the best interests
of all constituents that we cooperate with GKS Funding and its exercise of remedies.



9









Pursuant
to the Cooperation Agreement, we and GKS Funding agreed as follows: (i) we waived the 15-day cure period with respect to the Existing
Default immediately upon execution of the Cooperation Letter and GKS Funding has the right to exercise its remedies under the
Loan Agreement and applicable law with respect to such event of default, including, without limitation, by scheduling and conducting
a sale of all of the collateral under the Loan Agreement on or about April 17, 2017 (the “UCC Sale”); (ii) GKS Funding
agreed to fund loans to us up to the date of the UCC Sale to permit us to pay the Budgeted Expenses (as defined in the Cooperation
Agreement) as and when due with this new loan, which is (a) secured by a first priority security interest in all of our real and
personal assets, property, fixtures, rights and interests, (b) shall have priority in payment over the Loan made pursuant to the
Loan Agreement; and (c) shall be repaid, before any other payments are made by us, out of the first cash proceeds of the collateral
received by us; and (iii) we consented to fully cooperate with GKS Funding in connection with the UCC Sale, as well as the exercise
by GKS Funding of any of its other right and remedies in connection therewith.



In
light of the foregoing, we do not anticipate that we will be able to continue in our current line of business. At this point,
the Board is reevaluating its business plan and strategy and has not made any determination as to whether or not it will seek
to engage in a new line of business.



Certain of our preferred stock has reset
provisions to the conversion price if we issue equity or other derivatives at a price less than the exercise price set forth in
such preferred stock and warrants. These reset provisions result in a derivative liability in our financial statements. Our derivative
liabilities decreased to $131,043 at December 31, 2016 from $742,833 at December 31, 2015 due to a decrease in our stock price.
Fair values for exchange traded securities and derivatives are based on quoted market prices. Where market prices are not readily
available, fair values are determined using market based pricing models incorporating readily observable market data and requiring
judgment and estimates.





The
following discussion focuses on information in more detail on the main elements of the net decrease in cash during the year ended
December 31, 2016 included in the accompanying Statements of Cash Flow. The table below sets forth a summary of the significant
sources and uses of cash for the years ended December 31:



|                                      |  | 2016 |            |   | 2015 |  
|------------------------------------- |  | ---- | ---------- | - | ---- | -
|Cash used in operating activities     |  | $    | (2,052,889 | ) |      | $
|Cash provided by investing activities |  |      | -          |   |      |  
|Cash provided by financing activities |  |      | 1,763,811  |   |      |  
|                                      |  |      |            |   |      |  
|Decrease in cash                      |  | $    | (289,078   | ) |      | $





Net
cash used by operating activities decreased by $613,225 for the year ended December 31, 2016, primarily due to a decreased net
loss and changes in operating assets and liabilities. Net cash provided by investing activities decreased by $169,463 for the
year ended December 31, 2016, primarily due to sales of fixed assets in 2015. Net cash used by financing activities decreased
by $14,978 for the year ended December 31, 2016, primarily due to decreased borrowing.



Commitments/Contingencies:



Outstanding
Notes



As of the date hereof, the outstanding
balance of our obligations under the Loan Agreement was approximately $1,011,800, plus accrued and accruing legal fees and expenses.
The Loan is secured by a lien on all of our assets. As previously stated, we were unable to pay the interest under the Loan Agreement
and GKS Funding has indicated that it intends to exercise its remedies under the Loan Agreement and applicable law with respect
to such event of default, including, without limitation, by scheduling and conducting a sale of all of the collateral under the
Loan Agreement on or about April 17, 2017.



As
of December 31, 2016, we had outstanding non-convertible notes in the aggregate principal amount of $1,257,000 due to related
parties that mature within one year.



We
also have non-convertible notes in the aggregate principal amount of $1,850,000 payable to unrelated parties that mature within
one year.



In
addition, we have outstanding convertible notes payable to related parties in the principal amount of $624,866 at December 31
2016.



The
amount of accrued and unpaid interest was $627,937 on the same date.



10









Capital
expenditures.   At December 31, 2016, we had no material commitments for capital expenditures. On July 17, 2015,
we entered into an equipment purchase agreement (the “Purchase Agreement”) with Fordham Capital Partners, LLC (“Fordham”)
pursuant to which we sold all of our right, title and interest in production equipment utilized by the Company to Fordham for
a purchase price of $500,000. Concurrently with entering into the Purchase Agreement, on July 17, 2015, we entered into an equipment
lease agreement (the “Equipment Lease Agreement”) with Fordham pursuant to which we leased the production equipment
from Fordham on terms that included the following: a lease term of 24 months, monthly lease payments by us of $15,800 and the
option (at the election of the Company) to purchase the equipment on or after July 8, 2016 on the following terms: (i) if the
purchase date is between 12- 18 months $425,000; (ii) if the purchase date is between 19- 23 months: $360,000; and (iii) if the
purchase date is during the 24th month (but no later than July 8, 2017): $325,000. On February 1, 2017, we used a portion of the
proceeds of a loan to exercise our purchase option under the Equipment Lease Agreement. The production equipment has been pledged
to GKS Funding as collateral and we anticipate it will be sold when GKS Funding exercises its remedies under the Loan Agreement.



Lease
commitments.   We lease a combined production and office facility located in Mundelein, Illinois.  The
lease is on a month to month basis. Monthly rental payments are $17,972, inclusive of property taxes.



Litigation.  In
July 2007, we were sued in the 20th Judicial Circuit Court, St. Clair County, Illinois by Joseph Sanfilippo and James Cluck for
violation of the Consumer Fraud Act and is seeking damages in excess of $200,000.  The trial court has issued a default
order against us, and has denied our motion to reconsider.  Management believes that the trial court’s rulings
were erroneous and that it has grounds for appeal, and that the underlying allegations are frivolous and wholly without merit
and we will vigorously defend the claim. The outcome of this matter is unknown as of the report date.  However, we have
conservatively allocated a reserve of $102,000 to satisfy any liability it may incur as a result of this proceeding.



Although
there can be no assurances, based on the information currently available, management believes that it is probable that our ultimate
outcome of this litigation will not have a material adverse effect on the consolidated financial statements of.  However,
an adverse outcome could have a material adverse effect on our financial results of in the period in which it is recorded.



Off-Balance
Sheet Arrangements



As
of December 31, 2016 and December 31, 2015, we had no off-balance sheet arrangements.



Critical
Accounting Policies



The
Financial Statements and related notes contain information that is pertinent to management’s discussion and analysis. The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses
during the reporting period. These estimates are generally based on historical experience, current conditions 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 available from other sources, as well as identifying
and assessing our accounting treatment with respect to commitments and contingencies. Actual results could differ from those estimates.



New
Accounting Pronouncements



See
Note 3 in Notes to Financial Statements regarding recent accounting pronouncements.



| | ITEM
                          7A. | Quantitative
                                         and Qualitative Disclosures About Market Risk.
| | ---------------------------------- | ----------------------------------------------------------------------------------------------------



Not
Applicable.



| | ITEM
                          8. | Financial
                                         Statements and Supplementary Data.
| | --------------------------------- | -------------------------------------------------------------------------------------



See
the F-Pages contained herein, which include our audited financial statements and are incorporated by reference..



| | ITEM
                          9. | Changes
                                         In and Disagreements With Accountants on Accounting and Financial Disclosure.
| | --------------------------------- | ------------------------------------------------------------------------------------------------------------------------------



None.



| | ITEM
                          9A. | Controls
                                         and Procedures.
| | ---------------------------------- | -----------------------------------------------------------------



Evaluation
of Disclosure Controls and Procedures.



11









The Company’s management, with the
participation of the Company’s interim Chief Executive Officer, who also serves as the Company’s interim Chief Financial
Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end
of the period covered by this report. Based on such evaluation, the Company’s interim Chief Executive Officer who is also
the interim Chief Financial Officer concluded that, as of December 31, 2016, the Company’s disclosure controls and procedures
were not effective (1) to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and
(2) to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is
accumulated and communicated to us, including our Chief Executive Officer and interim Chief Financial Officer, as appropriate
to allow timely decisions regarding required disclosure. This conclusion is based primarily on the material weaknesses in internal
control over financial reporting that were identified and disclosed previously, where management identified material weaknesses
consisting of ineffective controls over (i) the control environment, (ii) financial statement disclosure; and (iii) financial
reporting, and our failure to complete the process of remediating these weaknesses by the end of the period covered by this Quarterly
Report.





Changes
in Internal Control Over Financial Reporting



The consultant who served as Interim Financial
Officer resigned at the end of his contract and was replaced by our former Chief Executive Officer. The Company also did not renew
the contract of a temporary employee who served as staff accountant whose duties were assumed by another existing full-time employee.
Despite the changes during the year ended December 31, 2016, the changes did not materially affect, nor are they reasonably likely
to materially affect, the Company’s internal control over financial reporting. The Company continues to develop internal
processes and segregations to mitigate the internal control deficiencies but that is still a work in process.





Limitations
on the Effectiveness of Controls



Our
Principal Executive Officer who is also our Principal Financial Officer does not expect that our disclosure controls or internal
controls will prevent all error and all fraud. Although our disclosure controls and procedures were designed to provide reasonable
assurance of achieving their objectives, a control system, no matter how well conceived and operated, can provide only reasonable,
not absolute assurance that the objectives of the system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent
limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making
can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented
if there exists in an individual a desire to do so. There can be no assurance that any design will succeed in achieving its stated
goals under all potential future conditions.



Furthermore,
smaller reporting companies face additional limitations. Smaller reporting companies employ fewer individuals and find it difficult
to properly segregate duties. Often, one or two individuals control every aspect of the Company’s operation and are in a
position to override any system of internal control. Additionally, smaller reporting companies tend to utilize general accounting
software packages that lack a rigorous set of software controls.



Management’s
Annual Report on Internal Control over Financial Reporting.



Our management is responsible for establishing
and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined
in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under
the supervision of, our interim Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management
and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles in the United States and includes
those policies and procedures that:





| | ● | Pertain to the maintenance of records that in reasonable
detail accurately and fairly reflect our transactions and any disposition of our assets;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Provide reasonable assurance regarding prevention or
timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial
statements.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



12









A
material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there
is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not
be prevented or detected on a timely basis. Our management assessed the effectiveness of our internal control over financial reporting
as of December 31, 2016. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework 2013.  Based on this assessment,
management has identified the following three material weaknesses that have caused management to conclude that, as of December
31, 2016, our disclosure controls and procedures, and our internal control over financial reporting, were not effective at the
reasonable assurance level:



|1. | As
    of December 31, 2016, we did not maintain effective controls over the control environment.  Specifically we have
    not developed and effectively communicated to our employees our accounting policies and procedures.  This has resulted
    in inconsistent practices.   Since these entity level programs have a pervasive effect across the organization,
    management has determined that these circumstances constitute a material weakness.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|2. | As
    of December 31, 2016, we did not maintain effective controls over financial statement disclosure. Specifically, controls were
    not designed and in place to ensure that all disclosures required were addressed in our financial statements.   Accordingly,
    management has determined that this control deficiency constitutes a material weakness.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|3. | As
    of December 31, 2016, we did not maintain effective controls over financial reporting. Specifically controls were not designed
    and in place to ensure that the financial impact of certain complex equity and derivative liability transactions were appropriately
    and correctly reported. The transactions were identified by the auditors and calculated and reported correctly as of December
    31, 2016.
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Remediation
of Material Weaknesses



As discussed above, as of December 31,
2016, we identified material weaknesses in our internal control over financial reporting primarily due to us not having developed
accounting policies and procedures and effectively communicating the same to our employees. Management plans to address these
weaknesses based on future business plans if it is able to generate revenue to retain additional employees.





If
the remedial measures described above are insufficient to address any of the identified material weaknesses or are not implemented
effectively, or if additional deficiencies arise in the future, material misstatements in our interim or annual financial statements
may occur in the future. Among other things, any unremediated material weaknesses could result in material post-closing adjustments
in future financial statements.



|ITEM9B. | Other Information.
|------- | ------------------



On April 14, 2017, Mr. Smith was appointed
as the Company’s interim Chief Executive Officer and interim Chief Financial Officer.



13









PART
III



|ITEM10. | Directors, Executive Officers and Corporate Governance.
|------- | -------------------------------------------------------



Below
is certain information regarding our directors and executive officers:





|Name                |  | Age |    |  | Position |                                                                            | Served as an Officeror Director Since | 
|------------------- |  | --- | -- |  | -------- | -------------------------------------------------------------------------- | ------------------------------------- | 
|Edward B. Smith III |  |     | 41 |  |          | Director, interim Chief Executive Officer, interim Chief Financial Officer |                                       | 



The
term of office of each director expires at each annual meeting of stockholders and upon the election and qualification of his
successor.



14









The
following information sets forth the names of our current executive officers and directors, their ages, period of service and
description of their business experience:



Edward
B. Smith III, Director, interim Chief Executive Officer, interim Chief Financial Officer



Mr.
Smith was appointed as our Chief Executive Officer on January 7, 2015 and resigned on May 17, 2016. On April 14, 2017 Mr. Smith
was appointed our interim Chief Executive Officer and interim Chief Financial Officer. Since January 1, 2015 he has served as
the Managing Member of Aristar Capital Management, LLC, (“ACM”) a New York-based investment firm and the Company’s
controlling stockholder. ACM is the investment manager of Aristar Ventures I, LLC, Aristar Ventures I-B, LLC and Aristar Ventures
I-C, LLC (collectively, “Aristar”). From April 2005 through December 2014, Mr. Smith was the Managing Partner of Brightline
Capital Management, LLC (“BCM”), a New York-based investment firm founded in 2005. BCM was the investment manager
of Brightline Ventures I, LLC, Brightline Ventures I-B, LLC and Brightline Ventures I-C, LLC (collectively, “Brightline”).
Prior to founding BCM, Mr. Smith worked at Gracie Capital, GTCR Golder Rauner and Credit Suisse First Boston.  Mr. Smith
holds a Bachelor of Arts in Social Studies from Harvard College and a Master’s in Business Administration from Harvard Business
School. He is currently a Director of Heat Biologics, Inc. (Nasdaq:HTBX), a North Carolina based company focused on the development
of novel therapeutics to prime the immune system against a variety of disorders.



We
believe that, as a result of his past experience, including managing an investment fund, and his many contacts in the food industry,
Mr. Smith adds valuable managerial experience and an understanding of investor expectations, both of which are important to the
Board’s strategic planning and risk management responsibilities.



Section
16(a) Beneficial Ownership Reporting





Pursuant to Section 16(a) of the Exchange
Act and the rules promulgated there under, officers and directors of the company and persons who beneficially own more than 10%
of our common shares are required to file with the SEC and furnish to our reports of ownership and change in ownership with respect
to all equity securities of the company.  Based solely on our review of the copies of such reports received by us during
or with respect to the fiscal year ended December 31, 2016 and all prior years, and written representations from such reporting
persons, we believe that those persons who were our officers, directors and 10% shareholders during any portion of the fiscal year
ended December 31, 2016, complied with all Section 16(a) filing requirements applicable to such individuals other than a failure
by our former Chief Executive Officer Mr. Kahn and our former Chairman Mr. Garfinkle to file one Form 4 with respect to one transaction.



Code of Ethics and Business Conduct



We have adopted a Code of Ethics and
Business Conduct (the “Code”).  The Code applies to all of our directors, officers, and employees.  Among
other things, the Code is intended to focus the board of directors and the individual directors on areas of ethical risk, help
directors recognize and deal with ethical issues, provide mechanisms to report unethical conduct, and foster a culture of honesty
and accountability. The Code covers all areas of professional conduct relating to service on the Agritech Board, including conflicts
of interest, unfair or unethical use of corporate opportunities, strict protection of confidential information, compliance with
all applicable laws and regulations and oversight of ethics and compliance by our employees.



Selection Criteria for Directors



The Company’s Board of Directors
established a Nominating Committee in 2008; however we currently do not have anyone serving on the Nominating Committee. The related
provisions set forth in the Bylaws serve as the charter for the Nominating Committee.  The Board Nominating Committee,
which is to be composed of two directors of our Company, identifies candidates for director nominees through recommendations solicited
from other directors, our executive officers, search firms or other advisors, shareholders pursuant to the procedures set forth
below, and through such other methods as the independent directors deem to be helpful.  Based upon an evaluation of
the candidates by the Board Nominating Committee, it recommends to the full Board candidates it has determined to be qualified
for serving on the Board.  Effective in 2015, Dan Jeffery was appointed a member of the Nominating Committee, with Morris
Garfinkle serving as chairman. Mr. Jeffrey and Mr. Garfinkle no longer serve as directors and we currently do not have an
active Nominating Committee. The Nominating Committee did not meet during 2016.



Our
Bylaws provide that shareholders, in submitting recommendations to the Nominating Committee for director candidates, shall follow
the following procedures:



| | ● | Recommendations for
    nomination must be received by a date not later than the close of business on the 120th calendar day prior to the calendar
    date our proxy statement was filed with the Securities and Exchange Commission in connection with the previous year’s
    annual meeting of shareholders or special meeting in lieu of annual meeting of shareholders.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



15









| | ● | Such recommendation for nomination shall be made in
writing and shall include the following information: (A) name of the shareholder making the recommendation; (B) a written statement
disclosing such shareholder’s beneficial ownership of our securities; (C) name of the individual recommended for consideration
as a director nominee; (D) a written statement as to why such recommended candidate would be able to fulfill the duties of a director;
(E) a written statement describing how the recommended candidate meets the independence requirements established by the NYSE Amex
(now known as NYSE MKT) or any other requirements adopted by us; (F) a written statement disclosing the recommended candidate’s
beneficial ownership of our securities; (G) a written statement disclosing relationships between the recommended candidate and
us which may constitute a conflict of interest; and (H) a written statement by the recommended candidate that the candidate is
willing and able to serve on the Board of Directors.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our
Bylaws provide that the composition of the Board of Directors must meet the independence requirements promulgated by the NYSE
Amex (now known as NYSE MKT) or such other requirements as may be adopted by us.



The
Company requires its directors to possess certain minimum qualifications, including the following:



| | ● | Adequate Experience. Nominees should have demonstrated
business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives
of the corporation and should be willing and able to contribute positively to the decision-making process of the corporation.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | No Conflicts of Interest. Nominees must be free
from any relationship that, in the opinion of the Board, would interfere with, or have the appearance of interfering with, the
exercise of his or her independent judgment as a member of the Board, including any conflicts of interest stemming from his or
her institutional or other affiliations, and candidates should be able to act in the interests of all shareholders.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | No Prior Bad Acts. Nominees shall not have been
convicted of any criminal offense or been subject to any adverse civil judgment in any jurisdiction involving financial crimes,
acts involving monies or breach of trust, moral turpitude, misfeasance or malfeasance, or been convicted in any jurisdiction of
a crime that is a felony, or been deemed by the Board to have violated company policy
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company also considers the following qualities and skills in selecting its directors:



| | ● | knowledge of the corporation’s business and industry;                                                            
| | - | -----------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                  
| | ● | prior education;                                                                                                 
| |   |                                                                                                                  
| | ● | demonstrated ability to exercise sound business judgment;                                                        
| |   |                                                                                                                  
| | ● | reputation for integrity and high moral and ethical
character;                                                   
| |   |                                                                                                                  
| | ● | potential to contribute to  the diversity
of viewpoints, backgrounds, or experiences of the Board as a whole; and
| |   |                                                                                                                  
| | ● | diligence and dedication to the success of the corporation.                                                      



A
director candidate recommended by our stockholders will be considered in the same manner as a nominee recommended by a Board member,
management or other sources.



While
the Board does not have a separate formal diversity policy, it is our and the Board’s policy to identify qualified potential
candidates without regard to any candidate’s race, color, disability, gender, national origin, religion or creed, and we
seek to ensure the fair representation of shareholder interests on the Board of Directors through the criteria set forth above.
In selecting our directors, we consider the potential to contribute to the diversity of viewpoints, backgrounds, or experiences
of the Board of Directors as a whole.  The Board of Directors believes that the use of the Nominating Committee’s
general criteria, along with non-discriminatory policies, will best result in a Board of Directors that shows diversity in many
respects. The Board of Directors believes that it currently maintains that diversity.



Audit
Committee



Until
April 2017, the Company had a separate Audit Committee. The Company no longer has a separate Audit Committee.



Audit
Committee Financial Expert



The Board of Directors has determined
that Mr. Smith qualifies as an “audit committee financial expert” based on a review of his educational background
and business experience although he is not considered an independent director.



Other
Information



In
connection with the Reincorporation, our bylaws are now governed by new bylaws under Nevada law.



16







| | ITEM
                          11. | Executive
                                         Compensation.
| | ---------------------------------- | ----------------------------------------------------------------



Our
compensation philosophy has been, and continues to be, that compensation should drive long-term value creation for our stockholders.
Total compensation for each employee should be based on individual our performance, market practice, and the value of our employee’s
position. Our compensation programs should not encourage unnecessary or excessive risk taking.



Compensation
consists solely of cash compensation and the issuance of stock options pursuant to our Incentive Compensation Plan.  We
pay base salary in order to provide a predictable level of compensation that is competitive in the marketplace for the position
responsibilities and individual skills, knowledge, and experience of each executive.  We provide stock options that
are generally available to all of our employees in order to further our goal of attracting and retaining senior executives of
outstanding ability.  We do not believe that our employee compensation policies are reasonably likely to have a material
adverse effect on our company.



17











SUMMARY
COMPENSATION TABLE



Set
forth below is the compensation paid or accrued to our executive officers during the years ended December 31, 2016 and December 31,
2015 that exceeded $100,000.



Summary
Compensation Table





|Name and Principal Position                                           |  | Year |      |  | Salary ($) |  |         | Bonus ($) |  |  | Option Awards ($) |  |  | Other ($) |   |  | Total ($) | 
|--------------------------------------------------------------------- |  | ---- | ---- |  | ---------- |  | ------- | --------- |  |  | ----------------- |  |  | --------- | - |  | --------- | 
|Jonathan Kahn (1)                                                     |  |      | 2016 |  |            |  | 124,932 |           |  |  | -                 |  |  |           | - |  |           | 
|Former Chief Executive Officer, Former Acting Chief Financial Officer |  |      | 2015 |  |            |  | -       |           |  |  | -                 |  |  |           | - |  |           | 
|                                                                      |  |      |      |  |            |  |         |           |  |  |                   |  |  |           |   |  |           | 
|Edward B. Smith III (2)                                               |  |      | 2016 |  |            |  | -       |           |  |  | -                 |  |  |           | - |  |           | 
|Former Chief Executive Officer                                        |  |      | 2015 |  |            |  | -       |           |  |  |                   |  |  |           | - |  |           | 



(1) Mr. Kahn was appointed Chief Executive
Officer and Acting Chief Financial Officer in May 2016 and resigned from such positions on April 3, 2017. Pursuant to the Kahn
Employment Agreement, Mr. Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock, par value $0.00005
per share (the “Common Stock”), such amount representing 3.5% of the Company’s shares of Common Stock on a fully
diluted basis as of the date of the grant.



(2) Mr. Smith was appointed interim
Chief Executive Officer and Chief Financial Officer on April 14, 2017 and had served as our Chief Executive Officer from January
2015 until May 2016. On February 9, 2015, Mr. Smith was issued warrants exercisable for 31,000,000 shares of common stock, in
consideration of the services to be provided to the Company as Chief Executive Officer. The exercise price of these warrants is
$0.45 per share. The fair value of the warrants issued is estimated on the date of grant using the Black- Scholes valuation model.
The assumptions used in the model included the historical volatility of the Company’s stock of 81.99%, and the risk- free
rate for periods within the expected life of the warrant based on the U.S. Treasury yield curve in effect of 0.85%.



18







OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END

December
31, 2016



The named executive officers did not have
any outstanding stock option equity awards for the year ended December 31, 2016 except for the May 2016 option award granted to
Mr. Smith for his services as a non-employee director that is detailed below. Pursuant to the Kahn Employment Agreement, Mr. Kahn
was granted 6,067,931 fully-vested shares of the Company’s common stock, par value $0.00005 per share (the “Common
Stock”), such amount representing 3.5% of the Company’s shares of Common Stock on a fully diluted basis as of the
date of the grant.







19









OPTION
EXERCISES AND STOCK VESTED

2016



There
were no stock options that were exercised by the named executive officers in fiscal 2016.



2016
Directors’ Compensation



Employee
directors do not receive any separate compensation for their activities on the board of directors.  Non-employee directors
received 1,006,711 options with a strike price of $0.0298 as an annual retainer.



Non-employee
directors are reimbursed for travel expenses incurred in conjunction with their duties as directors. Furthermore, we will provide
the broadest form of indemnification under Nevada law under which liabilities may arise as a result of their role on the board
of directors and payments for reimbursements for expenses incurred by a director in defending against claims in connection with
their role, and the director satisfies the statutory standard of care.



The
following table provides compensation for non-employee directors who served during fiscal 2016:







|Name                 |  | Fees Earned or Paid in Cash  ($) |   |  | Stock Awards ($)(1) |  |        | All Other Compensation ($)(2) |  |  | Total ($) | 
|-------------------- |  | -------------------------------- | - |  | ------------------- |  | ------ | ----------------------------- |  |  | --------- | 
|Morris Garfinkle (3) |  |                                  | 0 |  |                     |  | 30,000 |                               |  |  | 25,369    | 
|Dan Jeffery (3)      |  |                                  | 0 |  |                     |  | 30,000 |                               |  |  | 0         | 
|Edward Smith, III    |  |                                  | 0 |  |                     |  | 30,000 |                               |  |  | 0         | 



(1)
On May 17, 2016, each non-executive member of the Board (Morris Garfinkle, Dan Jeffery and Edward B. Smith III) was granted
pursuant to the Plan an option to purchase an aggregate 1,006,711 shares of common stock (the equivalent of $30,000 based on
the common stock’s closing price of $0.0298 on the grant date) for a total of 3,020,134 shares of common stock at an
exercise price of $0.0298 per share. These stock options vest 25% on date of grant and 25% every 90, 180 and 270 days
subsequent to the grant date and expire ten years after the date of the grant. As of December 31, 2016, the unrecognized
compensation cost related to all non- vested share- based compensation arrangements granted under the Plan was
$40,440.  The amounts in the table reflect the grant date fair value of stock awards to the named directors in
accordance with Accounting Standards Codification Topic 718, which was $0.0298 per share.  The ultimate values of
the stock awards to the directors generally will depend on the future market price of our common stock, which cannot be
forecasted with reasonable accuracy.



(2)
On June 21, 2016, the Company issued 2,013,423 shares of common stock to its Chairman Morris Garfinkle pursuant to the Plan. The
Company recognized a total expense of $25,369 related to this issuance. These shares were valued based on the closing price on
the grant date.



(3) Mr. Jeffery resigned
as a director on March 24, 2017 and Mr. Garfinkle resigned as a director on April 3, 2017.



On
May 17, 2016 (the “Effective Date”), the Company” entered into an employment agreement with Jonathan Kahn (the
“Kahn Employment Agreement”) in connection with the appointment of Mr. Kahn as the Company’s new Chief Executive
Officer. The Kahn Employment Agreement will continue until June 30, 2019 (subject to automatic one year extensions), unless earlier
terminated pursuant to its terms. Pursuant to the Kahn Employment Agreement, Mr. Kahn’s annual base salary was $200,000
per year from the Effective Date through December 31, 2016 and $225,000 beginning January 1, 2017. Mr. Kahn was also eligible
to participate in Company’s annual incentive compensation program (the “Annual Incentive Program”), with a target
annual bonus equal to 100% of his annual base salary and a maximum annual bonus each year equal to 200% of his base salary. Mr.
Kahn’s annual bonus for the 2016 calendar year was prorated based on the number of days served during 2016. The actual amount
of the annual bonus earned by and payable to Mr. Kahn in any year will be determined upon the satisfaction of goals and objectives
established by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of Directors
(the “Board”) and will be subject to such other terms and conditions of the Company’s Annual Incentive Program
as in effect from time to time.



Pursuant
to the Kahn Employment Agreement, Mr. Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock, par
value $0.00005 per share (the “Common Stock”), such amount representing 3.5% of the Company’s shares of Common
Stock on a fully diluted basis as of the Effective Date. In addition, on each of May 1, 2017 and May 1, 2018, respectively, Mr.
Kahn was to receive an additional grant of fully-vested Company Common Stock, such additional grants each representing 0.75% of
the Company’s shares of Common Stock on a fully diluted basis as of May 1, 2017 and May 1, 2018, respectively (together
with the 6,067,931 shares granted on the Effective Date, the “Equity Award”).



20









The
Kahn Employment Agreement provided that commencing in calendar year 2017, and each year thereafter, Mr. Kahn will be eligible
to participate in the Company’s annual equity incentive compensation program, with an annual target equity grant for each
year in which Mr. Kahn participates in the equity incentive compensation program having a grant date fair value equal to 100%
of Mr. Kahn’s base salary and a maximum annual equity award for each year in which Mr. Kahn participates in the equity incentive
compensation program equal to 250% of Mr. Kahn’s base salary. In determining the amount of Mr. Kahn’s equity grant
for any year, the Compensation Committee will consider the Company’s performance over the immediately preceding fiscal year.



On each anniversary
of the Effective Date and each Equity Issuance Date (as defined below), until such time as Mr. Kahn terminates employment with
the Company, the Kahn Employment Agreement provided that Mr. Kahn will receive an additional grant of unrestricted Common Stock
(which additional grant will be deemed to be a part of the initial Equity Award), if necessary, so that on each such anniversary
and each such Equity Issuance Date, the total number of shares received by Mr. Kahn pursuant to the Equity Award will equal at
least 3.5% of the Company’s shares of Common Stock on a fully diluted basis until April 30, 2016, 4.25% until April 30,
2018, and 5.0% thereafter. Under this provision, Mr. Kahn is owed 416,695 shares at December 31, 2016. For purposes of the Kahn
Employment Agreement, an “Equity Issuance Date” is any date on which the Company consummates the sale of or issuance
of (i) more than 1% of the Company’s shares of Common Stock on a fully diluted basis; or (ii) any instrument that is convertible
into more than 1% of the Company’s shares of Common Stock on a fully diluted basis. For the sake of clarity, in calculating
the total number of shares held by Mr. Kahn pursuant to the Equity Award, only the initial shares granted and any additional shares
granted in accordance with this paragraph will be considered and any shares (A) held by Mr. Kahn on or prior to the Effective
Date or (B) granted to or acquired by Mr. Kahn in any other manner following the grant to Mr. Kahn of the Equity Award (including
any annual equity award grant or otherwise) will be disregarded.



The Kahn Employment
Agreement provided that for certain specified payments in the event that Mr. Kahn’s employment contract is terminated for
death or Cause (as such terms are defined in the Kahn Employment Agreement), by the Company without Cause or terminated by him
for Good Reason, upon a Change of Control (as defined in the Kahn Employment Agreement), and due to Disability (as defined in
the Kahn Employment Agreement).



Mr. Kahn resigned
as our Chief Executive Officer on April 3, 2017.



21







|ITEM12. | Security
    Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|------- | ---------------------------------------------------------------------------------------------------



The following table presents certain
information as of April 14, 2017, regarding the beneficial ownership of the our common stock held by each director or nominee
for director, each executive officer appearing in the “Summary Compensation Table” included in “Executive Compensation”
and all directors and executive officers as a group.  As of April 14, 2017, we had 154,976,459 shares of common stock
outstanding.







|Name
    and Address (1)                                                                                   |  | Shares
    Beneficially Owned (2) |             |     | Percentage
    of Shares Outstanding | 
|---------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ----------- | --- | ------------------------------------ | 
|Named Executive Officers                                                                                   |  |                                   |             |     |                                      | 
|Edward
    B. Smith III (Director and interim Chief Executive Officer and interim Chief Financial Officer) |  |                                   | 103,400,360 | (3) |                                      | 
|                                                                                                           |  |                                   |             |     |                                      | 
|All
    named executive officers and directors as a group (1 persons)                                      |  |                                   | 103,400,360 |     |                                      | 








*Less than 1% of our common stock outstanding.





|(1) | The address for Mr. Smith is c/o Agritech Worldwide, Inc., 1011 Campus Drive, Mundelein, Illinois 60060.
|--- | --------------------------------------------------------------------------------------------------------





|(2) | The specified persons have sole voting and sole dispositive powers as to all shares, except as otherwise indicated.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | Consists of: (i) 33,741,758 shares of common stock beneficially owned by Mr. Smith (consisting of:  (a) 32,218,938 Shares (consisting of 350,164 Shares previously held and the acquisition of 31,868,774 Shares upon the Exchange of 31,868,774 Warrants); (b) convertible notes and interest on the notes that are currently convertible into 403,791 Shares; (c) shares of Series B Preferred Stock and dividends thereon that are currently convertible into 1,119,029 Shares) and (d) 1,006,711 shares of common stock subject to options exercisable within 60 days of April 14, 2016; and (ii) 68,651,891 shares of common stock beneficially owned by Aristar Capital Management, LLC (“Aristar Capital”), together with Aristar Ventures I, LLC (“Aristar Ventures I”), Aristar Ventures I-B, LLC (“Aristar Ventures I-B”) and Aristar Ventures I-C, LLC (“Aristar Ventures I-C”), which is further described in the table below setting forth persons known to us to be owners of more than 5% of our common stock.  Mr. Smith is the managing member of Aristar Capital, an investment management firm that serves as the investment manager of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  Mr. Smith is also the managing member of Aristar Capital Management GP, LLC (“Aristar GP”), which serves as the managing member of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  As a result of the foregoing, the shares of common stock deemed to be beneficially owned by each of (i) Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C are deemed to be beneficially owned by each of Aristar Capital and Aristar Capital GP and (ii) Aristar Capital and Aristar Capital GP are deemed to be beneficially owned by Mr. Smith. Aristar Capital and Aristar GP filed an Amended Form 13D on March 2, 2017  that reported shared beneficial ownership with respect to an aggregate of 68,651,891 shares of common stock held by Aristar Ventures (as defined below).  The 68,651,891 shares of common stock consist of: (i) 65,587,628 shares of common stock held directly by Aristar Ventures I; (ii) 1,985,448 shares of common stock held directly by Aristar Ventures I-B; and (iii) 1,078,815 shares of common stock held directly by Aristar Ventures I-C. Mr. Smith is the managing member of Aristar Capital, an investment management firm that serves as the investment manager of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  Mr. Smith is also the managing member of Aristar GP, which serves as the managing member of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  As a result of the foregoing, the shares of common stock deemed to be beneficially owned by each of (i) Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C are deemed to be beneficially owned by each of Aristar Capital and Aristar Capital GP and (ii) Aristar Capital and Aristar Capital GP are deemed to be beneficially owned by Mr. Smith.





22









The following table presents certain information as of April 14, 2017
regarding the beneficial ownership of our common stock held by each known 5%-or-greater shareholder of Agritech Worldwide.





|Name and Address                                                                                                                                                        |  | Shares Beneficially Owned |             |  | Percentage of Shares Outstanding | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ----------- |  | -------------------------------- | 
|Edward B. Smith III, Aristar Ventures I, LLC and Aristar Ventures I-B, LLC and Aristar Ventures I-C, LLC (1) 1120 Avenue of the Americas, Suite 1514 New York, NY 10036 |  |                           | 103,400,360 |  |                                  | 
|Morris Garfinkle (2) c/o Agritech Worldwide, Inc. 1011 Campus Drive Mundelein, IL 60060                                                                                 |  |                           | 10,320,648  |  |                                  | 
|Jonathan Kahn (3) c/o Agritech Worldwide, Inc. 1011 Campus Drive Mundelein, IL 60060                                                                                    |  |                           | 7,783,663   |  |                                  | 











|(1) | Consists of: (i) 33,741,758 shares of common stock beneficially owned by Mr. Smith (consisting of:  (a) 32,218,938 Shares (consisting of 350,164 Shares previously held and the acquisition of 31,868,774 Shares upon the Exchange of 31,868,774 Warrants); (b) convertible notes and interest on the notes that are currently convertible into 403,791 Shares; (c) shares of Series B Preferred Stock and dividends thereon that are currently convertible into 1,119,029 Shares) and (d) 1,006,711 shares of common stock subject to options exercisable within 60 days of April 14, 2016; and (ii) 68,651,891 shares of common stock beneficially owned by Aristar Capital Management, LLC (“Aristar Capital”), together with Aristar Ventures I, LLC (“Aristar Ventures I”), Aristar Ventures I-B, LLC (“Aristar Ventures I-B”) and Aristar Ventures I-C, LLC (“Aristar Ventures I-C”), which is further described in the table below setting forth persons known to us to be owners of more than 5% of our common stock.  Mr. Smith is the managing member of Aristar Capital, an investment management firm that serves as the investment manager of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  Mr. Smith is also the managing member of Aristar Capital Management GP, LLC (“Aristar GP”), which serves as the managing member of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  As a result of the foregoing, the shares of common stock deemed to be beneficially owned by each of (i) Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C are deemed to be beneficially owned by each of Aristar Capital and Aristar Capital GP and (ii) Aristar Capital and Aristar Capital GP are deemed to be beneficially owned by Mr. Smith. Aristar Capital and Aristar GP filed an Amended Form 13D on March 2, 2017  that reported shared beneficial ownership with respect to an aggregate of 68,651,891 shares of common stock held by Aristar Ventures (as defined below).  The 68,651,891 shares of common stock consist of: (i) 65,587,628 shares of common stock held directly by Aristar Ventures I; (ii) 1,985,448 shares of common stock held directly by Aristar Ventures I-B; and (iii) 1,078,815 shares of common stock held directly by Aristar Ventures I-C. Mr. Smith is the managing member of Aristar Capital, an investment management firm that serves as the investment manager of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  Mr. Smith is also the managing member of Aristar GP, which serves as the managing member of Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C.  As a result of the foregoing, the shares of common stock deemed to be beneficially owned by each of (i) Aristar Ventures I, Aristar Ventures I-B and Aristar Ventures I-C are deemed to be beneficially owned by each of Aristar Capital and Aristar Capital GP and (ii) Aristar Capital and Aristar Capital GP are deemed to be beneficially owned by Mr. Smith.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | Mr. Garfinkle may have been deemed to have beneficial ownership of 10,320,648 shares of Common Stock, consisting of (i) 3,024,608 shares of Common Stock held by Mr. Garfinkle, (ii) the 5,563,574 shares of Common Stock issued to Mr. Garfinkle in exchange for warrants held by Mr. Garfinkle, (iii) the 459,449 shares of Common Stock issued to the Revocable Trust in exchange for warrants held by the Revocable Trust, (iv) 96,051 shares of Common Stock issuable upon conversion of 5,210 shares of Series B Preferred Stock of the Company held by Mr. Garfinkle (v) 89,858 shares of Common Stock issuable upon conversion of 4,874 shares of Series B Preferred Stock of the Company held by the Revocable Trust, (vi) 80,397 shares of Common Stock issuable upon conversion of a convertible note held by the Revocable Trust and (vii) 1,006,711 shares of Common Stock issuable upon exercise of options that were issued to Mr. Garfinkle that fully vest on May 17, 2017. The information contained herein was obtained from the Schedule 13D/A that Mr. Garfinkle filed with the Securities and Exchange Commission on April 7, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | Mr. Kahn may have been deemed to have the sole power to vote and direct the disposition of 7,783,663 shares of Common Stock, consisting of (x) 6,467,931 shares of Common Stock held by Mr. Kahn, (y) the 900,000 shares of Common Stock issued to Mr. Kahn in exchange for Mr. Kahn’s warrants and (z) 416,965 shares of Common Stock that were required to be issued to Mr. Kahn prior to the date hereof pursuant to Section 3(c)(iv) of the Kahn Employment Agreement. The information contained herein was obtained from the Schedule 13D/A that Mr. Kahn filed with the Securities and Exchange Commission on April 7, 2017.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





23









|ITEM13. | Certain
    Relationships and Related Transactions, and Director Independence.
|------- | ------------------------------------------------------------------------------



Transactions
with Certain Related Parties



On May 14, 2015 the Company entered into
a consulting agreement with E.B. Smith Jr. (father of the Company’s CEO and largest shareholder, Edward B. Smith III) pursuant
to which E.B. Smith Jr. agreed to provide advice with respect to the Company’s marketing initiatives, provide customer introductions
and investigating strategic transactions. In consideration of services rendered by E.B. Smith Jr., the Company issued warrants
to purchase 750,000 shares of common stock at $0.35 per share. The warrants vested 450,000 shares upon the mutual execution of
this agreement and then in 150,000 share increments at the three month and six month anniversaries of this agreement. The fair
value of the warrants issued is estimated on the date of grant using the Black- Scholes valuation model. The assumptions used
in the model included the historical volatility of the Company’s stock of 104.65%, and the risk- free rate for periods within
the expected life of the warrant based on the U.S. Treasury yield curve in effect of 1.6%. In 2015 the Company recognized an expense
of $117,642.





On
November 18, 2015, the Company entered into a consulting agreement (the “Consulting Agreement”) with ACT Financial
Services Inc. (“ACT Financial”), pursuant to which ACT Financial will provide to the Company finance, accounting and
administrative functions, including acting chief financial officer (and principal financial officer) services to be provided by
Donald G. Wittmer. The Company will pay an agreed upon weekly rate for such services and will reimburse ACT Financial for certain
travel expenses. The Consulting Agreement will continue for six months and may be extended by mutual agreement of the parties.
This agreement terminated upon the resignation of Mr. Wittmer as Chief Financial Officer on May 17, 2017. ACT Financial received
$48,040 in the year ended December 31, 2016.



Transactions
with Members of the Board of Directors



Effective January 1, 2015 the Company
entered into a consulting agreement with Jeffery Consulting Group, LLC , a company owned by our former director Dan Jeffery, pursuant
to which Jeffery Consulting will provide assistance with operational improvements including manufacturing processes, strategic
and tactical advice with respect to the Company’s sales and marketing initiatives, and provide customer introductions and
strategic sales opportunities. In consideration of services rendered by Jeffery Consulting, the Company issued a warrant to purchase
1,250,000 shares of common stock at $0.35 per share. The warrant vested 500,000 shares upon the mutual execution of this agreement,
and 250,000 shares each at the three month, six month, and nine month anniversaries of this agreement. The fair value of the warrants
issued is estimated on the date of grant using the Black- Scholes valuation model. The assumptions used in the model included
the historical volatility of the Company’s stock of 84.52%, and the risk- free rate for periods within the expected life
of the warrant based on the U.S. Treasury yield curve in effect of 1.07%. In 2015 the Company recognized compensation expense
of $249,635. The Company also agreed to accrue $5,000 per month which becomes payable to Jeffery Consulting once the Company has
raised $3 million in additional capital. The consulting agreement terminated in February 2016 and $65,000 due to Jeffery Consulting
Group is included in accounts payable for the year ended December 31, 2016.





On
May 29, 2015, we executed an amendment to the 14% nonconvertible subordinated secured notes issued to Edward B. Smith III, (dated
September 29, 2014, October 23, 2014, October 30, 2014 and December 3, 2014 respectively) whereby the maturity date for each note
was extended from May 29, 2015 to December 31, 2015.



On
June 12, 2015, we issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount of $12,000.
The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest is payable
at maturity in cash. The note is secured by our assets, which security interest is subordinate to the security interest granted
to Fordham in connection with the Equipment Loan and the Factoring Agreement.



On
August 13, 2015, we issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount of $25,000.
The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest is payable
at maturity in cash. The note is secured by our assets, which security interest is subordinate to the security interest granted
to Fordham in connection with the Equipment Lease Agreement and the Factoring Agreement.



On
August 21, 2015, we issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount of $150,000.
The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest is payable
at maturity in cash. The note is secured by our assets, which security interest is subordinate to the security interest granted
to Fordham in connection with the Equipment Loan and the Factoring Agreement.



24









On
December 23, 2015, we executed an amendment to the 14% nonconvertible subordinated secured notes issued to Edward B. Smith III
(dated September 29, 2014, October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13,2015, and August 21,
2015 respectively) whereby the maturity date for each note was extended to July 1, 2016.



The
outstanding amount of nonconvertible notes payable to Edward B. Smith III was $457,000 at December 31, 2015. The amount of accrued
and unpaid interest was $54,935 on the same date.



On
December 23, 2015, we executed an amendment to the $200,000 12.5% convertible subordinated secured note dated February 11, 2014,
the $300,000 14% convertible subordinated secured notes (dated April 25, 2014, and the note issued to Mr. Garfinkle dated May
12, 2014) whereby the maturity date for each note was extended to July 1, 2016.



On
December 23, 2015, the Company issued a 14% senior unsecured note to Jonathan Kahn, the Company’s current Chief Executive
Officer, interim Chief Financial Officer and member of the Board of Directors in the principal amount of $500,000. The note matures
in one year December 23, 2016) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity
in cash. In addition, the Company issued a warrant to acquire 500,000 shares of the Company’s common stock, at an exercise
price of $0.64 per share to the accredited investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised
on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights. 2016
this note was reclassified from a short-term borrowing to unrelated parties as a short-term non-convertible note to related parties.



On
March 2, 2016, the Company issued a 14% senior unsecured note to Jonathan Kahn, the Company’s current Chief Executive Officer,
interim Chief Financial Officer and member of the Board of Directors in the principal amount of $100,000. The Company recognized
$3,791and amortized $247 of discount as of September 30, 2016. The note matures in one year (March 2, 2017) and bears interest
at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition, the Company issued a
warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price of $0.64 per share to the accredited
investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to
full ratchet price anti- dilution protection and entitled to registration rights.



On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Morris Garfinkle in the principal amount
of $100,000. The Company recognized $3,094 and amortized $178 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price
of $0.64 per share to the entity controlled by Mr. Garfinkle. The Warrants expire on the fifth anniversary of their issuance,
may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration
rights.



On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Dan Jeffery in the principal amount
of $50,000. The Company recognized $1,824 and amortized $105 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 200,000 shares of the Company’s common stock at an exercise price of
$0.64 per share to the entity controlled by Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may be
exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
April 28, 2016, the Company issued a 14% senior unsecured note to an entity related to Dan Jeffery in the principal amount of
$50,000. The Company recognized $1,562 and amortized $55 of discount as of September 30, 2016. The note matures in one year (April
28, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 150,000 shares of the Common Stock at an exercise price of $0.64 per share to the entity
related to Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis,
are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On May 17, 2016, each non-executive member
of the Board at that time (Morris Garfinkle, Dan Jeffery and Edward B. Smith III) was granted pursuant to the Company’s
Amended and Restated Incentive Compensation Plan an option to purchase 1,006,711 shares of Common Stock (the equivalent of $30,000
based on the Common Stock’s closing price of $0.0298 on the grant date) for a total of 3,020,133 shares of Common Stock
at an exercise price of $0.0298 per share. These stock options vest 25% on date of grant and 25% every 90, 180 and 270 days subsequent
to the grant date and expire ten years after the date of the grant.





25









On
May 17, 2016 (the “Effective Date”), the Company” entered into an employment agreement with Jonathan Kahn (the
“Kahn Employment Agreement”) in connection with the appointment of Mr. Kahn as the Company’s new Chief Executive
Officer. The Kahn Employment Agreement will continue until June 30, 2019 (subject to automatic one year extensions), unless earlier
terminated pursuant to its terms. Pursuant to the Kahn Employment Agreement, Mr. Kahn’s annual base salary will be $200,000
per year from the Effective Date through December 31, 2016 and $225,000 beginning January 1, 2017. Mr. Kahn will also be eligible
to participate in Company’s annual incentive compensation program (the “Annual Incentive Program”), with a target
annual bonus equal to 100% of his annual base salary and a maximum annual bonus each year equal to 200% of his base salary. Mr.
Kahn’s annual bonus for the 2016 calendar year will be prorated based on the number of days served during 2016. The actual
amount of the annual bonus earned by and payable to Mr. Kahn in any year will be determined upon the satisfaction of goals and
objectives established by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of
Directors (the “Board”) and will be subject to such other terms and conditions of the Company’s Annual Incentive
Program as in effect from time to time.



Pursuant
to the Kahn Employment Agreement, Mr. Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock, par
value $0.00005 per share (the “Common Stock”), such amount representing 3.5% of the Company’s shares of Common
Stock on a fully diluted basis as of the Effective Date. In addition, on each of May 1, 2017 and May 1, 2018, respectively, Mr.
Kahn will receive an additional grant of fully-vested Company Common Stock, such additional grants each representing 0.75% of
the Company’s shares of Common Stock on a fully diluted basis as of May 1, 2017 and May 1, 2018, respectively (together
with the 6,067,931 shares granted on the Effective Date, the “Equity Award”).



On
June 21, 2016, the Company issued 2,013,423 shares of common stock to its Chairman Morris Garfinkle pursuant to the Plan. The
Company recognized a total expense of 25,369 related to this issuance. These shares were valued based on the closing price on
the grant date.



On
June 29, 2016, we executed an amendment to the 14% nonconvertible subordinated secured notes issued to Edward B. Smith III (dated
September 29, 2014, October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13,2015, and August 21, 2015 respectively)
whereby the maturity date for each note was extended to October 1, 2016.



On
June 29, 2016, we executed an amendment to the $200,000 12.5% convertible subordinated secured note dated February 11, 2014, the
$300,000 14% convertible subordinated secured notes (dated April 25, 2014, and the note issued to Mr. Garfinkle dated May 12,
2014) whereby the maturity date for each note was extended to October 1, 2016.



On
September 30, 2016, we executed an amendment to the 14% nonconvertible subordinated secured notes issued to Edward B. Smith III
(dated September 29, 2014, October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13,2015, and August 21,
2015 respectively) whereby the maturity date for each note was extended to April 3, 2017.



On
September 30 2016, we executed an amendment to the $200,000 12.5% convertible subordinated secured note dated February 11, 2014,
the $300,000 14% convertible subordinated secured notes (dated April 25, 2014, and the note issued to Mr. Garfinkle dated May
12, 2014) whereby the maturity date for each note was extended to April 3, 2017.



On
November 18, 2016, November 22, 2016 and December 7, 2016, respectively, Mr. Smith advanced the Company $16,230, $23,000 and $20,000.



On
December 7, 2016, Mr. Kahn advanced the Company $20,000.



On
December 12, 2016, as part of the Company’s warrant exchange, Mr. Smith exchanged 31,868,774 warrants for 31,868,774 common
shares, Mr. Garfinkle and entities affiliated with Mr. Garfinkle exchanged 6,023,022 warrants for 6,023,022 common shares, Mr.
Jeffrey and entities affiliated with Mr. Jeffery exchanged 1,600,000 warrants for 1,600,000 common shares and Mr. Kahn exchanged
900,000 warrants for 900,000 common shares.



On
December 15, 2016, we executed an amendment to the 14% nonconvertible subordinated secured notes issued to Jonathan Kahn (dated
December 23, 2016) whereby the maturity date was extended to April 3, 2017.



On
February 1, 2017, the Company entered into a loan and security agreement (the “Loan Agreement”) with various lenders,
including GKS Funding, an entity controlled by its chief executive officer, Jonathan Kahn, and a director, Morris Garfinkle, and
issued a note in connection therewith (the “Note”). The principal amount of the loan is $996,000. The Loan accrues
interest at a rate per annum equal to the prime rate plus 18.9%. Interest is payable monthly and the principal is payable on the
maturity date of the loan, which is 2.5 years from the issuance date. The loan is secured by all of the assets of the Corporation.
The Loan Agreement contains certain covenants regarding financial reporting, limits on the Corporation’s incurrence of indebtedness,
permitted investments, encumbrances, restricted payments, and mergers and acquisitions.



The
Loan Agreement includes customary events of default, including non-payment by the Corporation of the monthly interest payments
and the payment of penalties upon such late payments.  The Corporation used a portion of the proceeds of the loan to exercise
its purchase option under its Equipment Lease Agreement with Fordham that it entered into on July 17, 2015 (the “Equipment
Lease Agreement”).



26









Due to the ongoing liquidity needs of
the Company, on March 28, 2017, the Company entered into a promissory note with Mr. Kahn and Mr. Garfinkle as the lenders in the
original principal amount of $35,000 (the “Promissory Note”). The Promissory Note accrues interest at a rate per annum
equal to 5%. Accrued and unpaid interest on the outstanding principal is payable monthly in arrears on the last business day of
each month in which any amount remains outstanding under the Promissory Note. The principal amount, together with all accrued
and unpaid interest thereon, is required to be repaid to the lenders out of the proceeds received from the accounts receivable
of the Company collected after March 28, 2017, immediately upon such receipt. The loan under the Promissory Note is secured by
all of the assets of the Company pursuant to a Security Agreement and a Patent Security Agreement.



On
April 5, 2017, the Company and GKS Funding entered into a Cooperation Agreement (the “Cooperation Agreement”) in connection
with a loan (the “Loan”) made to the Company pursuant to that certain Loan and Security Agreement, dated as of February
1, 2017 (as amended and in effect from time to time, the “Loan Agreement”), between the Company, the Lenders party
thereto and GKS Funding. As previously reported, on March 31, 2017, the Company received a notice of default from GKS Funding
stating that the Company was in default of the Loan for failure to make a scheduled interest payment on the Loan that was due
on March 31, 2017. If such failure described above was not cured within the 15-day cure period, which was April 15, 2017, the
Lenders (through GKS Funding, as administrative agent under the Loan Agreement) intended to exercise all rights and remedies available
to them under the Loan Agreement, related note and applicable law, which included foreclosing on the collateral under the Loan
Agreement.



On
April 5, 2017, the Company and GKS Funding entered into a letter agreement, a copy of which is attached to a Schedule 13D
and is incorporated by reference herein (the “Letter Agreement”), pursuant to which (i) the Company informed
GKS Funding that the Company has determined (1) it will not have sufficient funds to cure the interest payment default that
occurred on March 31, 2017, under the Loan Agreement and the Note as previously described in Amendment No. 2 and (2) it
cannot continue to operate as a going concern and (ii) the Company and GKS Funding agreed as follows:



(1)
The Company waived the cure period with respect to the Existing Default (as defined in the Letter Agreement). As a result, the
Company agreed, immediately upon execution of the Letter Agreement, the Existing Default became an Event of Default (as defined
in the Loan Agreement) (with, for avoidance of doubt, no further right to cure or grace period), and GKS Funding shall have the
right to exercise its remedies under the Loan Agreement and applicable law with respect to such Event of Default, including, without
limitation, by scheduling and conducting a UCC sale of all of the Collateral (as defined in the Loan Agreement) on or about April 17,
2017 (the “UCC Sale”).



(2)
GKS Funding agreed to fund loans to the Company up to the date of the UCC Sale to permit the Company to pay the Budgeted Expenses
(as defined in the Letter Agreement) as and when due and payable in accordance with Exhibit A to the Letter Agreement,
pursuant to documentation in form and substance acceptable to GKS Funding and Company (the “New Loans”). The New Loans:
(a) shall be secured by a first priority security interest in all of the real and personal assets, property, fixtures, rights
and interests of the Company, whether now existing or owned and hereafter arising or acquired and wherever located; (b) shall
have priority in payment over the Loans (as defined in the Loan Agreement) made by GKS Funding pursuant to the Loan Agreement;
and (c) shall be repaid, before any other payments are made by the Company, out of the first cash proceeds of the Collateral
received by the Company.



(3)
The Company consents to, and shall fully cooperate with GKS Funding in connection with, the UCC Sale and the disposition of the
Collateral in connection therewith, as well as the exercise by GKS Funding of any of its other right and remedies in connection
therewith.



GKS
Funding intends to try to acquire all of the Collateral at the UCC Sale. GKS Funding also intends to credit bid the amounts due
under the Loan Agreement and the Note at the UCC Sale.





The New Loans
are evidenced by a promissory note (the “New Note”). The New Notes accrue interest at a rate per annum equal to
5%. Accrued and unpaid interest on the outstanding principal is payable monthly in arrears on the last business day of each month
in which any amount remains outstanding under the New Note. The principal amount, together with all accrued and unpaid interest
thereon, is required to be repaid to GKS Funding out of the proceeds received from the accounts receivable of the Company collected
after April 7, 2017, immediately upon such receipt.



The proceeds
of the $60,000 New Loans that were made on April 7, 2017, have been used by the Company to pay critical vendors of the Company
and for the Company to fund payroll.



As a condition
to the making of the loan under the New Note, GKS Funding required the lenders under the Loan Agreement (which include GKS Funding)
to enter into a subordination agreement with the Company and GKS Funding (the “New Subordination Agreement”). The
New Subordination Agreement will make the New Note the senior secured debt of the Company, provided that the balance of the Second
Promissory Note, which is less than $300, will be senior to the New Note until paid in full.



27







All
additional New Loans made to the Company by GKS Funding after April 7, 2017, pursuant to the Letter Agreement will be made
on the same terms and conditions as set forth in the New Note, the Security Agreement, the Patent Security Agreement and the New
Subordination Agreement.



The
proceeds of the $60,000 New Loans made on April 7, 2017, was used by the Company to pay critical vendors of the Company and
for the Company to fund payroll.$30,000 was contributed by Mr. Kahn from his personal funds to GKS Funding on April 7,
2017, and was used by GKS Funding to fund $60,000 of New Loans on April 7, 2017. Mr. Kahn intends to use personal funds
for additional contributions to GKS Funding in the event GKS Funding funds additional New Loans pursuant to the Letter Agreement.
$30,000 was contributed by Mr. Garfinkle from his personal funds to GKS Funding on April 7, 2017, and was used by GKS
Funding to fund $60,000 of New Loans on April 7, 2017. Mr. Garfinkle intends to use personal funds for additional contributions
to GKS Funding in the event GKS Funding funds additional New Loans pursuant to the Letter Agreement.





We
do not have a written policy with respect to related party transactions. However, all such transactions are reviewed and approved
by the Board of Directors prior to finalization.



Director
Independence



Under
our bylaws, the composition of the Board of Directors must meet the independence requirements promulgated by the NYSE MKT or such
other requirements as may be adopted by us.  Based on these standards, the Board of Directors has determined that Mr. Smith,
as our interim Chief Executive and Managing Partner of Aristar Capital Management, LLC (our controlling shareholder), is not considered
to be “independent.”



28









|ITEM14. | Principal
    Accounting Fees and Services.
|------- | -------------------------------------------



The following table is a summary of the
fees billed to us by and by Sassetti, LLC (audit and tax) and M&K CPAS, LLC (audit) for professional services during the fiscal
years ended December 31, 2016 and December 31, 2015, respectively:







|Fee Category       |  |      |        |  |      |  
|------------------ |  | ---- | ------ |  | ---- | -
|                   |  | 2016 |        |  | 2015 |  
|Total Audit Fees   |  | $    | 71,449 |  |      | $
|                   |  |      |        |  |      |  
|Total Tax Services |  | $    | 8,000  |  |      | $







No
other fees were billed in either 2015 or 2016.





Audit Fees. Consists of fees billed for professional
services rendered for the audit of our financial statements and review of the interim financial statements included in quarterly
reports and services that are normally provided by our independent registered public accounting firms in connection with statutory
and regulatory filings or engagements. In 2016, the Company paid Sassetti, LLC $24,000 for review of the prior auditor’s
workpapers and reviews of the 2016 interim financial statements are also included in the total. All other audit fees noted were
paid to M&K CPAS, LLC.



Tax Services. Consists of fees billed for professional
services rendered for preparation of tax returns. Sassetti prepared the 2015 tax returns for the Company.



Audit
Committee Pre-Approval Policy



Our
Audit Committee Charter provides that the Audit Committee shall pre-approve all auditing services, internal control-related services
and permitted non-audit services (including the terms thereof) to be performed for us by our independent auditor, subject to the
de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act, which are approved by the
Audit Committee prior to the completion of the service. The Audit Committee may also form and delegate authority to sub-committees
consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit
services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Committee at its
next scheduled meeting. In accordance with the pre-approval policy, the Audit Committee has approved certain specified audit and
non-audit services to be provided by Sassetti, LLC for up to twelve (12) months from the date of the pre-approval. Any additional
services to be provided by our independent auditors following such pre-approval require the additional pre-approval of the Audit
Committee.



There
were no services in fiscal 2016 or 2015 that were not approved in advance by the Audit Committee under this policy.



29









PART IV



ITEM 15. Exhibits, Financial Statement Schedules.



|Index to Financial Statements                                                                           | Page    
|------------------------------------------------------------------------------------------------------- | --------
|Reports of Independent Registered Public Accounting Firms                                               | F-1, F-2
|                                                                                                        |         
|Financial Statements:                                                                                   |         
|                                                                                                        |         
|Balance Sheets as of December 31, 2016 and 2015                                                         | F-3     
|                                                                                                        |         
|Statements of Operations for the Years Ended December 31, 2016 and December 31, 2015                    | F-4     
|                                                                                                        |         
|Statement of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2016 and December 31, 2015 | F-5     
|                                                                                                        |         
|Statements of Cash Flows for the Years Ended December 31, 2016 and December 31, 2015                    | F-6     
|                                                                                                        |         
|Notes to Financial Statements                                                                           | F-7     





30







SIGNATURES



Pursuant to the requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-K to be signed on its behalf
by the undersigned, thereunto duly authorized.



AGRITECH WORLDWIDE INC. 
(FORMERLY Z TRIM
HOLDINGS, INC.)



|By: | /s/ Edward B. Smith III                       |  | Date: April 17, 2017
|--- | --------------------------------------------- |  | --------------------
|    | Edward B. Smith III, 
Chief Executive Officer |  |                     



Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, this report has been signed below by following persons on behalf of the Registrant and in the
capacities and on the dates indicated.



|/s/ Edward B. Smith III                                                                       |  | Date: April 17, 2017
|--------------------------------------------------------------------------------------------- |  | --------------------
|Edward
    B. Smith III, 
Chief Executive Officer and Director 
(Principal Executive Officer) |  |                     



31







AGRITECH WORLDWIDE, INC. (FORMERLY Z TRIM
HOLDINGS, INC.)



EXHIBIT INDEX

TO

Form 10-K for Fiscal Year Ended December
31, 2016



|Exhibit
        Number |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|---------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|2.1                    |  | Form of Agreement and Plan of Merger, dated March 18, 2016, by and between Z Trim Holdings, Inc. and Agritech Worldwide, Inc. (incorporated herein by reference to Exhibit B to the definitive proxy statement on Schedule 14C, File No. 001-32134, filed by Z Trim Holdings, Inc. on November 30, 2015)                                                                                                                                                                                                                           
|3.1                    |  | Restated Articles of Incorporation (Filed as Exhibit 3.1 to the Annual Report on form 10-K for the fiscal year ended December 31, 2009, File No. 001-32134; Illinois Statement of Resolution Establishing the Series I Preferred Stock filed as Exhibit 3.1 (a) in the Current Report on Form 8-K filed June 7, 2010; and Illinois Statement of Resolution Establishing the Series II Preferred Stock filed as Exhibit 3.1 (a) in the Current Report on Form 8-K filed March 21, 2011, and incorporated herein by reference herein)
|3.2                    |  | Bylaws, as amended, of Z Trim Holdings, Inc. (filed as Exhibit 3.2 to the Company’s registration statement on Form S-8 filed on December 17, 2012 (File No. 333-185517), and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                     
|3.3                    |  | Statement of Resolution Establishing the Preferred Shares (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on January 14, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                  
|3.4                    |  | Amendment to Bylaws of Z Trim Holdings, Inc. effective as of March 10, 2015 (filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q, filed on November 19, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                            
|3.5                    |  | Articles of Incorporation of Agritech Worldwide, Inc., a Nevada corporation (incorporated herein by reference to Exhibit C to the definitive proxy statement on Schedule 14C, File No. 001-32134, filed by Z Trim Holdings, Inc. on November 30, 2015)                                                                                                                                                                                                                                                                             
|3.6                    |  | Bylaws of Agritech Worldwide, Inc., a Nevada corporation (incorporated herein by reference to Exhibit D to the definitive proxy statement on Schedule 14C, File No. 001-32134, filed by Z Trim Holdings, Inc. on November 30, 2015)                                                                                                                                                                                                                                                                                                
|4.1                    |  | Form of Amended and Restated Warrant to Purchase common stock (filed as Exhibit 4.3 to the Company’s Form 8-K dated October 19, 2009 and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                         
|4.2                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.3 to the Company’s Form 8-K dated April 21, 2009, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                           
|4.3                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.3 to the Company’s Form 8-K dated November 18, 2008, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                        
|4.4                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.3 to the Company’s Form 8-K dated September 3, 2008, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                        
|4.5                    |  | Form of Amendment to the Warrant (filed as Exhibit 4.32 to the Company’s Form S-3, File No. 333-163708, dated December 14, 2009, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                             
|4.6                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.3 to the Company’s Form 8-K dated June 24, 2008, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                            
|4.7                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.33 to the Company’s Form S-1, File No. 333-167059, dated May 25, 2010, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                          
|4.8                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.2 to the Company’s Form 8-K dated June 7, 2010, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                             
|4.9                    |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.2 to the Company’s Form 8-K dated March 21, 2011, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                           
|4.10                   |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.2 to the Company’s Form 8-K dated February 17, 2012, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                                        
|4.11                   |  | Form of Placement Agent Warrant (filed as Exhibit 4.12 to the Company’s Registration Statement on Form S-1 filed on May 23, 2013, File No. 333-186577, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                                       
|4.12                   |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.13 to the Company’s Registration Statement on Form S-1 filed on May 23, 2013, File No. 333-186577, and incorporated herein by reference)                                                                                                                                                                                                                                                                                                                              





32







|4.13  |  | Form of Warrant to Purchase common stock (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on September 18, 2013, File No. 001-32134, and incorporated herein by reference)                                                                                                   
|----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.14  |  | Form of Amendment to $1.50 Warrant (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on September 18, 2013, File No. 001-32134, and incorporated herein by reference)                                                                                                         
|4.15  |  | Securities Purchase Agreement (filed as Exhibit 4.14 to the Company’s Registration Statement on Form S-1, File No. 333-186577 filed on November 4, 2013, and incorporated herein by reference)                                                                                                       
|4.16  |  | Form of Equipment Revolving Note, dated March 24, 2014 (filed as Exhibit 10.1 to the Company’s Form 8-K dated March 28, 2014, File No. 001-32134, and incorporated herein by reference)                                                                                                              
|4.17  |  | Form of Security Agreement, dated March 24, 2014 (filed as Exhibit 10.2 to the Company’s Form 8-K dated March 28, 2014, File No. 001-32134, and incorporated herein by reference)                                                                                                                    
|4.18  |  | Form of Factoring Agreement, dated March 24, 2014 (filed as Exhibit 10.3 to the Company’s Form 8-K dated March 28, 2014, File No. 001-32134, and incorporated herein by reference)                                                                                                                   
|4.19  |  | Form of Initial Warrant (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on January 14, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                      
|4.20  |  | Form of Additional Warrant (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on January 14, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                   
|4.21  |  | Form of Warrant issued to Edward B. Smith III and Morris Garfinkle (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on February 9, 2015, File No. 001-32134, and incorporated herein by reference)                                                                           
|4.22  |  | Form of Warrant Amendment (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on July 6, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                        
|4.23  |  | Form of Senior Unsecured Note, issued December 23, 2015 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on May 19, 2016, File No. 001-32134, and incorporated herein by reference)                                                                                          
|4.24  |  | Form of Common Stock Purchase Warrant, dated December 23, 2015 (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on May 19, 2016, File No. 001-32134, and incorporated herein by reference)                                                                                   
|4.25  |  | Form of Senior Unsecured Note, issued March 2, 2017 (filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on May 19, 2016, File No. 001-32134, and incorporated herein by reference)                                                                                              
|4.26  |  | Form of Common Stock Purchase Warrant, dated March 2, 2016 (filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K, filed on May 19, 2016, File No. 001-32134, and incorporated herein by reference)                                                                                       
|      |  |                                                                                                                                                                                                                                                                                                      
|10.1  |  | Steven J. Cohen Employment Agreement (filed as Exhibit 10.12 to the Company’s Form 10-QSB for the quarter ended June 20, 2006, File No. 001-32134 and incorporated herein by reference)*                                                                                                             
|10.2  |  | Brian Chaiken Employment Agreement, dated October 17, 2007 (filed as Exhibit 10.2 to the Company’s Form 10-KSB filed on April 14, 2008 and incorporated herein by reference)*                                                                                                                        
|10.3  |  | Cooperative Research and Development Agreement with the United States Department of Agriculture’s Agricultural Research Service, dated June 14, 2011 (filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended June 30, 2011, File No. 001-32134, and incorporated herein by reference)
|10.4  |  | Custom Processing Agreement dated as of October 17, 2011, by and between Z Trim Holdings, Inc. and AVEKA Nutra Processing, LLC (filed as Exhibit 10.1 to the Company’s Form 8-K/A dated October 17, 2011, File No. 001-32134, and incorporated herein by reference)                                  
|10.5  |  | Form of Subscription Agreement (filed as Exhibit 10.1 to the Company’s Form 8-K dated February 17, 2012, File No. 001-32134, and incorporated herein by reference)                                                                                                                                   
|10.6  |  | Investment Banking Agreement with Legend Securities, Inc. (filed as Exhibit 10.2 to the Company’s Form 8-K dated February 17, 2012, File No. 001-32134, and incorporated herein by reference)                                                                                                        
|10.7  |  | Z Trim Holdings, Inc. Incentive Compensation Plan (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K dated December 5, 2012, and incorporated herein by reference)*                                                                                                                  
|10.8  |  | Form of Subscription Agreement dated August 20, 2013 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on September 18, 2013, File No. 001-32134, and incorporated herein by reference)                                                                                      
|10.9  |  | Form of Subscription Agreement dated September 17, 2013 (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on September 18, 2013, File No. 001-32134, and incorporated herein by reference)                                                                                   
|10.10 |  | Form of Placement Agent Agreement (filed as Exhibit 10.9 to the Company’s Registration Statement on Form S-1 filed on November 4, 2013, File No. 333-186577, and incorporated herein by reference)                                                                                                   
|10.11 |  | Form of Escrow Agreement (filed as Exhibit 10.10 to the Company’s Registration Statement on Form S-1 filed on November 4, 2013, File No. 333-186577, and incorporated herein by reference)                                                                                                           
|10.12 |  | Amended and Restated Equipment Revolving Note, dated July 16, 2014, issued by Z Trim Holdings, Inc. in favor of Fordham Capital Partners, LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 21, 2014, File No. 001-32134, and incorporated herein by reference)   





33







|10.13   |  | First
    Amendment to Security Agreement, dated July 16, 2014, between Z Trim Holdings, Inc. and Fordham Capital Partners, LLC (filed
    as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 21, 2014, File No. 001-32134, and incorporated
    herein by reference)                                                                                                         
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.14   |  | Loan
    Agreement dated July 15, 2014 by and between the Company and Edward B. Smith III (filed as Exhibit 10.3 to the Company’s
    Current Report on Form 8-K filed on July 21, 2014, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                   
|10.15   |  | Amended
    and Restated Equipment Revolving Note, dated July 25, 2014, issued by Z Trim Holdings, Inc. in favor of Fordham Capital Partners,
    LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 28, 2014, File No. 001-32134, and
    incorporated herein by reference)                                                                                       
|10.16   |  | Second
    Amendment to Security Agreement, dated July 25, 2014, between Z Trim Holdings, Inc. and Fordham Capital Partners, LLC (filed
    as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on July 28, 2014, File No. 001-32134, and incorporated
    herein by reference)                                                                                                       
|10.17   |  | Form
    of Securities Purchase Agreement between the Company and the Investors (filed as Exhibit 10.1 to the Company’s Current
    Report on Form 8-K, filed on January 14, 2015, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                         
|10.18   |  | Consulting
    Agreement between Z Trim Holdings, Inc. and Jeffery Consulting Group, LLC, entered into with effect as January 1, 2015 (filed
    as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on April 16, 2015, File No. 001-32134, and incorporated
    herein by reference)*                                                                                                
|10.19   |  | Employment
    Agreement, dated May 6, 2015, by and between Z Trim Holdings, Inc. and Anthony Saguto (filed as Exhibit 10.1 to the Company’s
    Current Report on Form 8-K, filed on May 8, 2015, File No. 001-32134, and incorporated herein by reference)*                                                                                                                                        
|10.20   |  | Form
    of Warrant Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on July 6, 2015, File
    No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                               
|10.21   |  | Equipment
    Purchase Agreement between Z Trim Holdings, Inc. and Fordham Capital Partners, LLC, dated July 17, 2015 (filed as Exhibit
    10.1 to the Company’s Current Report on Form 8-K, filed on July 22, 2015, File No. 001-32134, and incorporated herein
    by reference)                                                                                                                  
|10.22   |  | Equipment
    Lease Agreement between Z Trim Holdings, Inc. and Fordham Capital Partners, LLC, dated July 17, 2015 (filed as Exhibit 10.1
    to the Company’s Current Report on Form 8-K, filed on July 22, 2015, File No. 001-32134, and incorporated herein by
    reference)                                                                                                                     
|10.23   |  | Amended
    and Restated Incentive Compensation Plan, as amended (incorporated herein by reference to Exhibit F to the definitive proxy
    statement on Schedule 14C, File No. 001-32134, filed by Z Trim Holdings, Inc. on November 30, 2015)*                                                                                                                                                     
|10.24   |  | Employment
    Agreement, dated May 17, 2016, by and between the Company and Jonathan Kahn (filed as Exhibit 10.1 to the Company’s
    Current Report on Form 8-K, filed on May 19, 2016, File No. 001-32134, and incorporated herein by reference)*                                                                                                                                                 
|10.25   |  | Form
    of Exchange Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on December 14, 2016,
    File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                                         
|10.26** |  | Security
                                         and Loan Agreement, dated February 1, 2017, by and between Company, various lenders and
                                         GKS Funding LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form
                                         8-K, filed on February 6, 2017, File No. 001-32134, and incorporated herein by reference) 
|10.27   |  | Note
    in the principal amount of $996,000 issued February 1, 2017 (filed as Exhibit 10.2 to the Company’s Form 8-K, filed
    on February 6, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                      
|10.28   |  | Subordination
                                         Agreement, dated February 1, 2017, by and between Company, subordinated lenders and GKS
                                         Funding LLC (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K,
                                         filed on February 6, 2017, File No. 001-32134, and incorporated herein by reference)
|10.29   |  | Promissory
    Note in the principal amount of $56,000 issued March 15, 2017 (filed as Exhibit 10.1 to the Company’s Form 8-K, filed
    on March 17, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                
|10.30   |  | Security
    Agreement, dated March 15, 2017, by and between Company and Jonathan Kahn (filed as Exhibit 10.2 to the Company’s Current
    Report on Form 8-K, filed on March 17, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                    
|10.31   |  | Patent
    Security Agreement, dated March 15, 2017, by and between Company, Grantor and Jonathan Kahn, as agent (filed as Exhibit 10.3
    to the Company’s Current Report on Form 8-K, filed on March 17, 2017, File No. 001-32134, and incorporated herein by
    reference)                                                                                                                      
|10.32   |  | Subordination
    Agreement, dated March 15, 2017, by and between Company, Jonathan Kahn and Mo Garfinkle, as Senior Lenders, and Jonathan Kahn,
    as Agent for the Senior Lenders (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on March 17,
    2017, File No. 001-32134, and incorporated herein by reference)                                                      
|10.33   |  | Promissory
    Note in the principal amount of $56,000 issued March 15, 2017 (filed as Exhibit 10.1 to the Company’s Form 8-K, filed
    on March 17, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                





34









|10.34   |  | Security Agreement, dated March 15, 2017, by and between Company and Jonathan Kahn (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on March 17, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                                
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.35   |  | Patent Security Agreement, dated March 15, 2017, by and between Company, Grantor and Jonathan Kahn, as agent (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on March 17, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                      
|10.36   |  | Subordination Agreement, dated March 28, 2017, by and between Company, Jonathan Kahn and Mo Garfinkle, as Senior Lenders, and Jonathan Kahn, as Agent for the Senior Lenders (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K, filed on March 29, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                      
|10.37   |  | Cooperation Agreement, dated April 5, 2017, by and between Company and GKS Funding LLC (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on April 7, 2017, File No. 001-32134, and incorporated herein by reference)                                                                                                                                                                             
|14.1    |  | Code of Ethics and Business Conduct (filed as Exhibit 14.1 to the Company’s Form 10-K for the year ended December 31, 2011, and incorporated herein by reference)                                                                                                                                                                                                                                                        
|23.1    |  | Consent of M&K CPAS, PLLC, independent auditors                                                                                                                                                                                                                                                                                                                                                                          
|31.1    |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                       
|31.2    |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                       
|32.1    |  | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                    
|32.2    |  | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                    
|101     |  | The following materials from Agritech Worldwide, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) the Statements of Stockholders Equity, (iv) the Statements of Cash Flows and (v) the Notes to Financial Statements, tagged as blocks of text, furnished herewith.**
|101.INS |  | XBRL Instance Document                                                                                                                                                                                                                                                                                                                                                                                                   
|101.SCH |  | XBRL Taxonomy Extension Schema Document                                                                                                                                                                                                                                                                                                                                                                                  
|101.CAL |  | XBRL Taxonomy Extension Calculation Linkbase Document                                                                                                                                                                                                                                                                                                                                                                    
|101.LAB |  | XBRL Taxonomy Extension Label Linkbase Document                                                                                                                                                                                                                                                                                                                                                                          
|101.PRE |  | XBRL Taxonomy Extension Presentation Linkbase Document                                                                                                                                                                                                                                                                                                                                                                   
|101.DEF |  | XBRL Taxonomy Extension Definition Linkbase Document                                                                                                                                                                                                                                                                                                                                                                     



* Denotes management compensatory plan or arrangement.

**Confidential treatment has been requested
as to certain portions of this exhibit pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Item 16—10-K Summary Information



Not Applicable



35







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Board of Directors and

Stockholders
of Agritech Worldwide, Inc. (Formerly Z Trim Holdings Inc.)



We
have audited the accompanying balance sheets of Agritech Worldwide, Inc. (Formerly Z Trim Holdings Inc.) as of December 31, 2016,
and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.



We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Agritech
Worldwide, Inc. as of December 31, 2016, and the results of its operations and its cash flows for the years then ended in conformity
with accounting principles generally accepted in the Unites States of America.



The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company does not have enough cash on hand to meet its current liabilities and has had
reoccurring losses as of December 31, 2016. These conditions raise substantial doubt about its ability to continue as a going
concern. Management’s plans regarding those matters also are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



|/s/
    Sassetti, LLC | 
|--------------------- | 
|Oak
    Park, IL      | 
|April
    17, 2017    | 



F-1







REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To
the Board of Directors and

Stockholders
of Agritech Worldwide, Inc. (Formerly Z Trim Holdings Inc.)



We
have audited the accompanying balance sheets of Agritech Worldwide, Inc. (Formerly Z Trim Holdings Inc.) as of December 31, 2015,
and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for the year then ended.
These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion
on these financial statements based on our audit.



We
conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s
internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.



In
our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Agritech
Worldwide, Inc. as of December 31, 2015, and the results of its operations and its cash flows for the year then ended in conformity
with accounting principles generally accepted in the Unites States of America.



The
accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed
in Note 2 to the financial statements, the Company does not have enough cash on hand to meet its current liabilities and has had
reoccurring losses as of December 31, 2015. These conditions raise substantial doubt about its ability to continue as a going
concern. Management’s plans regarding those matters also are described in Note 2. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



|/s/
    M&K CPAS, PLLC | 
|---------------------- | 
|Houston,
    Texas     | 
|April
    14, 2016     | 



F-2







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS, INC.)

BALANCE
SHEETS



|                                                                                                                                                                     |  | 12/31/2016 |              |   | 12/31/2015 |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | ------------ | - | ---------- | -
|                                                                                                                                                                     |  |            |              |   |            |  
|ASSETS                                                                                                                                                              
|                                                                                                                                                                     |  |            |              |   |            |  
|Current Assets                                                                                                                                                       |  |            |              |   |            |  
|Cash and cash equivalents                                                                                                                                            |  | $          | 20,773       |   |            | $
|Accounts receivable                                                                                                                                                  |  |            | 32,613       |   |            |  
|Inventory                                                                                                                                                            |  |            | 91,085       |   |            |  
|Prepaid expenses and other assets                                                                                                                                    |  |            | 9,986        |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Total current assets                                                                                                                                                 |  |            | 154,457      |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Long Term Assets                                                                                                                                                     |  |            |              |   |            |  
|Property and equipment, net of depreciation                                                                                                                          |  |            | 366,865      |   |            |  
|Other assets                                                                                                                                                         |  |            | 27,886       |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Total long term assets                                                                                                                                               |  |            | 394,751      |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|TOTAL ASSETS                                                                                                                                                         |  | $          | 549,208      |   |            | $
|                                                                                                                                                                     |  |            |              |   |            |  
|LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                        
|                                                                                                                                                                     |  |            |              |   |            |  
|Current Liabilities                                                                                                                                                  |  |            |              |   |            |  
|Accounts payable                                                                                                                                                     |  | $          | 833,452      |   |            | $
|Preferred dividends payable                                                                                                                                          |  |            | 628,012      |   |            |  
|Short-term notes payable to unrelated parties                                                                                                                        |  |            | 1,850,000    |   |            |  
|Short-term non-convertible notes payable to related parties                                                                                                          |  |            | 1,257,000    |   |            |  
|Short-term convertible notes payable to related parties                                                                                                              |  |            | 624,866      |   |            |  
|Accrued expenses and other                                                                                                                                           |  |            | 940,040      |   |            |  
|Accrued liquidated damages                                                                                                                                           |  |            | 36,178       |   |            |  
|Capital lease payable, short term                                                                                                                                    |  |            | 389,268      |   |            |  
|Derivative liabilities                                                                                                                                               |  |            | 131,043      |   |            |  
|Related Parties Line of Credit                                                                                                                                       |  |            | 79,230       |   |            |  
|Total Current Liabilities                                                                                                                                            |  |            | 6,769,089    |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Long Term Portion of Capital Lease Payable                                                                                                                           |  |            | -            |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Total Liabilities                                                                                                                                                    |  |            | 6,769,089    |   |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Stockholders' Equity (Deficit)                                                                                                                                       |  |            |              |   |            |  
|Common Stock, $0.00005; authorized 500,000,000; shares issued and outstanding is 154,976,459 and 93,797,504 at December 31, 2016 and December 31, 2015, respectively |  |            | 7,770        |   |            |  
|Convertible preferred stock, Series B, $0.01 par value authorized 3,000,000 shares; issued and outstanding 709,625 at both December 31, 2016 and December 31, 2015.  |  |            | 7,096        |   |            |  
|Common Stock Payable, 416,695 shares                                                                                                                                 |  |            | 4,573        |   |            |  
|Additional paid-in capital                                                                                                                                           |  |            | 153,345,670  |   |            |  
|Accumulated deficit                                                                                                                                                  |  |            | (159,584,991 | ) |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|Total Stockholders' Equity (Deficit)                                                                                                                                 |  |            | (6,219,882   | ) |            |  
|                                                                                                                                                                     |  |            |              |   |            |  
|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)                                                                                                                   |  | $          | 549,208      |   |            | $



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



F-3







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS, INC.)

STATEMENTS
OF OPERATIONS



|                                                    |  | Years Ended  |            
|--------------------------------------------------- |  | ------------ | -----------
|                                                    |  | December 31, |            
|                                                    |  | 2016         |            
|REVENUES:                                           |  |              |            
|Products                                            |  | $            | 1,177,344  
|Total revenues                                      |  |              | 1,177,344  
|                                                    |  |              |            
|COST OF REVENUES:                                   |  |              |            
|Products                                            |  |              | 1,803,509  
|Total cost of revenues                              |  |              | 1,803,509  
|                                                    |  |              |            
|GROSS MARGIN (LOSS)                                 |  |              | (626,165   
|                                                    |  |              |            
|OPERATING EXPENSES:                                 |  |              |            
|Selling, general and administrative                 |  |              | 2,027,493  
|Total operating expenses                            |  |              | 2,027,493  
|                                                    |  |              |            
|OPERATING LOSS                                      |  |              | (2,653,658 
|                                                    |  |              |            
|OTHER INCOME (EXPENSES):                            |  |              |            
|Interest income                                     |  |              | -          
|Interest expense - debt                             |  |              | (551,824   
|Change in fair value - derivatives                  |  |              | 567,139    
|Loss on sale and leaseback transaction              |  |              | -          
|Loss on settlement with vendor                      |  |              | -          
|Loss on debt conversion                             |  |              | -          
|Loss on exchange of warrants                        |  |              | (517,018   
|Loss on modification of warrants                    |  |              | -          
|Total other income (expenses)                       |  |              | (501,703   
|                                                    |  |              |            
|NET LOSS                                            |  | $            | (3,155,361 
|                                                    |  |              |            
|Less Preferred Dividends                            |  |              | 355,756    
|                                                    |  |              |            
|NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS        |  | $            | (3,511,117 
|NET LOSS PER SHARE - BASIC AND DILUTED              |  | $            | (0.03      
|                                                    |  |              |            
|Weighted Average Number of Shares Basic and Diluted |  |              | 101,320,375



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



F-4







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS INC.)

STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT)



|                                                                                      |  |           |             |  |        |   |       | Shares of   |  |  |             |  |  |            |       |  |         |   |             |           |  |   |             |  |  |       |           
|------------------------------------------------------------------------------------- |  | --------- | ----------- |  | ------ | - | ----- | ----------- |  |  | ----------- |  |  | ---------- | ----- |  | ------- | - | ----------- | --------- |  | - | ----------- |  |  | ----- | ----------
|                                                                                      |  | Shares of |             |  |        |   |       | Convertible |  |  | Convertible |  |  | Additional |       |  | Common  |   |             | Preferred |  |   |             |  |  |       |           
|                                                                                      |  | Common    |             |  | Common |   |       | Preferred   |  |  | Preferred   |  |  | Paid-In    |       |  | Stock   |   |             | Stock     |  |   | Accumulated |  |  |       |           
|                                                                                      |  | Stock     |             |  | Stock  |   |       | Stock       |  |  | Stock       |  |  | Capital    |       |  | Payable |   |             | Payable   |  |   | Deficit     |  |  | Total |           
|                                                                                      |  |           |             |  |        |   |       |             |  |  |             |  |  |            |       |  |         |   |             |           |  |   |             |  |  |       |           
|Balance
    at December 31, 2014                                                      |  |           | 39,734,854  |  |        | $ | 1,987 |             |  |  | -           |  |  | $          | -     |  |         | $ | 131,134,645 |           |  | $ | -           |  |  | $     | 1,010,000 
|                                                                                      |  |           |             |  |        |   |       |             |  |  |             |  |  |            |       |  |         |   |             |           |  |   |             |  |  |       |           
|Stock issued for directors
    compensation                                           |  |           | 576,924     |  |        |   | 30    |             |  |  | -           |  |  |            | -     |  |         |   | 149,970     |           |  |   | -           |  |  |       | -         
|Consulting Agreements                                                                 |  |           | 400,000     |  |        |   | 20    |             |  |  | -           |  |  |            | -     |  |         |   | 103,980     |           |  |   | -           |  |  |       | -         
|Shares issued in warrant
    exchange                                                 |  |           | 53,085,726  |  |        |   | 2,653 |             |  |  | -           |  |  |            | -     |  |         |   | 13,759,606  |           |  |   | -           |  |  |       | -         
|Conversion of notes to preferred
    stock-Directors                                  |  |           | -           |  |        |   | -     |             |  |  | 96,590      |  |  |            | 966   |  |         |   | 736,723     |           |  |   | -           |  |  |       | -         
|Conversion of notes to preferred
    stock-Other                                      |  |           | -           |  |        |   | -     |             |  |  | 40,535      |  |  |            | 405   |  |         |   | 272,317     |           |  |   | -           |  |  |       | -         
|Convertible preferred stock
    issued                                                |  |           | -           |  |        |   | -     |             |  |  | 572,500     |  |  |            | 5,725 |  |         |   | 2,284,275   |           |  |   | -           |  |  |       | (1,010,000
|Preferred Dividend Payable                                                            |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | (280,675    | )         |  |   | -           |  |  |       | -         
|Options and warrants issued
    for compensation                                      |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | 4,696,121   |           |  |   | -           |  |  |       | -         
|Cost associated with preferred
    shares                                             |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | (3,323      | )         |  |   | -           |  |  |       | -         
|Net
    loss                                                                          |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | -           |           |  |   | -           |  |  |       | -         
|Balance
    at December 31, 2015                                                      |  |           | 93,797,504  |  |        |   | 4,690 |             |  |  | 709,625     |  |  |            | 7,096 |  |         |   | 152,853,639 |           |  |   | -           |  |  |       | -         
|                                                                                      |  |           |             |  |        |   |       |             |  |  |             |  |  |            |       |  |         |   |             |           |  |   |             |  |  |       |           
|Stock issued for officer
    compensation                                             |  |           | 6,067,931   |  |        |   | 303   |             |  |  | -           |  |  |            | -     |  |         |   | 180,521     |           |  |   | -           |  |  |       | -         
|Stock issued for directors
    compensation                                           |  |           | 2,013,423   |  |        |   | 101   |             |  |  | -           |  |  |            | -     |  |         |   | 25,268      |           |  |   | -           |  |  |       | -         
|Warrants repurchased                                                                  |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | (122,986    | )         |  |   | -           |  |  |       | -         
|Reclassification  of
    derivative     liability to APIC upon repurchase of warrants |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | 18,769      |           |  |   | -           |  |  |       | -         
|Preferred dividend payable                                                            |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | (355,756    | )         |  |   | -           |  |  |       | -         
|Common Stock Payable                                                                  |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | -           |           |  |   | 4,573       |  |  |       | -         
|Shares issued in warrant
    exchange                                                 |  |           | 53,097,601  |  |        |   | 2,676 |             |  |  | -           |  |  |            | -     |  |         |   | 581,471     |           |  |   | -           |  |  |       | -         
|Options issued for compensation                                                       |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | 164,744     |           |  |   | -           |  |  |       | -         
|Net
    Loss                                                                          |  |           | -           |  |        |   | -     |             |  |  | -           |  |  |            | -     |  |         |   | -           |           |  |   | -           |  |  |       | -         
|Balance
    at December 31, 2016                                                      |  |           | 154,976,459 |  |        | $ | 7,770 |             |  |  | 709,625     |  |  | $          | 7,096 |  |         | $ | 153,345,670 |           |  | $ | 4,573       |  |  | $     | -         



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



F-5







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS, INC.)

STATEMENTS
OF CASH FLOWS





|FOR THE YEARS ENDED DECEMBER 31                                                                    |  | 2016 |            |   | 2015 |  
|-------------------------------------------------------------------------------------------------- |  | ---- | ---------- | - | ---- | -
|                                                                                                   |  |      |            |   |      |  
|CASH FLOWS FROM OPERATING ACTIVITIES                                                               |  |      |            |   |      |  
|Net loss                                                                                           |  | $    | (3,155,361 | ) |      | $
|Adjustments to reconcile loss from continuing operations to net cash used in operating activities: |  |      |            |   |      |  
|                                                                                                   |  |      |            |   |      |  
|Stock based compensation -common shares, stock options and warrants vested                         |  |      | 367,114    |   |      |  
|Common shares issued for director fees                                                             |  |      | -          |   |      |  
|Amortization of debt discount                                                                      |  |      | 41,226     |   |      |  
|Shares & warrants issued for services                                                              |  |      | -          |   |      |  
|Preferred stock payable for services                                                               |  |      | -          |   |      |  
|Disposal of equipment                                                                              |  |      | 3,449      |   |      |  
|Warrants issued expense                                                                            |  |      | -          |   |      |  
|Depreciation                                                                                       |  |      | 100,920    |   |      |  
|Change in fair value of derivative liability                                                       |  |      | (567,139   | ) |      |  
|Loss on exchange of warrants                                                                       |  |      | 517,018    |   |      |  
|Loss on debt conversion                                                                            |  |      | -          |   |      |  
|Loss on sale and leaseback transaction                                                             |  |      | -          |   |      |  
|Loss on settlement with vendor                                                                     |  |      | -          |   |      |  
|                                                                                                   |  |      |            |   |      |  
|Changes in operating assets and liabilities:                                                       |  |      |            |   |      |  
|Accounts receivable                                                                                |  |      | 215,735    |   |      |  
|Inventory                                                                                          |  |      | 147,179    |   |      |  
|Prepaid expenses and other assets                                                                  |  |      | 48,879     |   |      |  
|Accounts payable and accrued expenses                                                              |  |      | 228,092    |   |      |  
|CASH USED IN OPERATING ACTIVITIES                                                                  |  |      | (2,052,889 | ) |      |  
|                                                                                                   |  |      |            |   |      |  
|CASH FLOWS FROM INVESTING ACTIVITIES                                                               |  |      |            |   |      |  
|Net cash received from the sale of fixed assets                                                    |  |      | -          |   |      |  
|CASH PROVIDED BY INVESTING ACTIVITIES                                                              |  |      | -          |   |      |  
|                                                                                                   |  |      |            |   |      |  
|CASH FLOWS FROM FINANCING ACTIVITIES                                                               |  |      |            |   |      |  
|Principal payments on capital lease                                                                |  |      | (92,433    | ) |      |  
|Purchase of warrants                                                                               |  |      | (122,986   | ) |      |  
|Proceeds for the purchase of convertible preferred stock                                           |  |      | -          |   |      |  
|Borrowing on short term debt to unrelated parties                                                  |  |      | 1,100,000  |   |      |  
|Borrowing on short term debt to related parties                                                    |  |      | 800,000    |   |      |  
|Borrowing on short term non-convertible notes payable to related parties                           |  |      | 79,230     |   |      |  
|Principal payments on debt                                                                         |  |      | -          |   |      |  
|CASH PROVIDED BY FINANCING ACTIVITIES                                                              |  |      | 1,763,811  |   |      |  
|NET DECREASE IN CASH                                                                               |  |      | (289,078   | ) |      |  
|                                                                                                   |  |      |            |   |      |  
|CASH AT BEGINNING OF YEAR                                                                          |  |      | 309,851    |   |      |  
|CASH AT THE END OF THE YEAR                                                                        |  | $    | 20,773     |   |      | $
|                                                                                                   |  |      |            |   |      |  
|Supplemental Disclosures of Cash Flow Information:                                                 |  |      |            |   |      |  
|Cash paid during the year for interest                                                             |  | $    | 99,710     |   |      | $
|Discount on debt due to derivatives                                                                |  | $    | 37,566     |   |      | $
|Preferred dividends payable declared                                                               |  | $    | 355,756    |   |      | $
|Preferred stock issued for preferred stock payable                                                 |  | $    | -          |   |      | $
|Conversion of debt and interest into preferred stock                                               |  | $    | -          |   |      | $
|Reclassification of notes from unrelated to related                                                |  | $    | 600,000    |   |      | $
|Warrants to be exchanged for common stock                                                          |  | $    | -          |   |      | $
|Capital lease for fixed assets                                                                     |  | $    | -          |   |      | $



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



F-6







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS, INC.)

NOTES TO FINANCIAL STATEMENTS



NOTE
1 – NATURE OF BUSINESS



Agritech
Worldwide, Inc. (the “Company”) is an agritech company that owns existing, and has developed new products and processes
to make use of biomass for uses in the food and industrial markets. The Company’s food division currently sells a line of
products to the food industry that can help food manufacturers reduce their costs and help them solve many production problems.
The Company’s technology provides value-added ingredients across virtually all food industry categories. The Company’s
all-natural products, among other things, help to reduce fat and calories, add fiber, provide shelf-stability, prevent oil migration,
and add binding capacity – all without degrading the taste and texture of the final food products. Perhaps most significantly,
Z Trim’s products can help extend finished products, and thereby increase its customers’ gross margins. The Company’s
industrial division, opened in 2012, plans to sell eco-friendly ingredients to oil drilling, hydraulic fracturing, petroleum coke,
steel/aluminum, paper and other industries. The Company’s industrial ingredients are highly functional in applications for
adhesives, binders, viscofiers and emulsifiers.



NOTE
2 –GOING CONCERN



The financial statements have been prepared
assuming that the Company will continue as a going concern. As of April 14, 2017, the date that the independent registered public
accountant issued its report on the audited financial statements as of and for the year ended December 31, 2016, the Company did
not have enough cash on hand to meet its current liabilities. In addition, based on the proposed UCC sale of its assets, the Company
will no longer have operations and may be seeking other opportunities. The Company had recurring losses as of December 31, 2016.
As a result, the independent registered public accountant’s audit report included an explanatory paragraph in respect to
our ability to continue as a going concern. The Company may attempt to secure additional funding through debt or equity financing
arrangements and may seek other business opportunities.



NOTE
3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Use
of Estimates



The
preparation of the accompanying financial statements in conformity with accounting principles generally accepted in the United
States (U.S. GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.



Revenue
Recognition



The
Company generally recognizes product revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee
is fixed or determinable, and collectability is probable. In instances where the final acceptance of the product is specified
by the customer, revenue is deferred until all acceptance criteria have been met. No provisions were established for estimated
product returns and allowances based on the Company’s historical experience.



Allowance
for Doubtful Accounts



Management
of the Company makes judgments as to its ability to collect outstanding receivables and provide allowances for the portion of
receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding
invoices. For those invoices not specifically reviewed, provisions are provided at differing rates, based upon the age of the
receivable. In determining these percentages, management analyzes its historical collection experience and current economic trends.
If the historical data the Company uses to calculate the allowance for doubtful accounts does not reflect the future ability to
collect outstanding receivables, additional provisions for doubtful accounts may be needed and the future results of operations
could be materially affected. As of December 31, 2016 and 2015, management concluded that no reserve was necessary.





F-7







Cash
and cash equivalents



For
purposes of the statement of cash flows, the Company considers all highly liquid investments with a maturity of three months or
less to be cash equivalents. There were no cash equivalents as of December 31, 2016 and 2015.



Inventory



Inventory
is stated at the lower of cost or market, using the first-in, first-out method. The Company follows standard costing methods for
manufactured products.



Property
and Equipment



Property
and equipment are stated at cost less accumulated depreciation and amortization. Maintenance and repair costs are expensed as
incurred. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Estimated useful
lives of five to ten years are used for machinery and equipment, office equipment and furniture, and automobile. Estimated useful
lives of up to five years are used for computer equipment and related software. Depreciation and amortization of leasehold improvements
are computed using the term of the lease.



Income
Taxes



The
amount of current and deferred taxes payable or refundable is recognized as of the date of the financial statements, utilizing
currently enacted tax laws and rates. Deferred tax expenses or benefits are recognized in the financial statements for the changes
in deferred tax liabilities or assets between years.



Accounting
for Derivative Instruments



All
derivatives have been recorded on the balance sheet at fair value based on the lattice model calculation. These derivatives, including
embedded derivatives in the Company’s warrants which have reset provisions to the exercise price and conversion price if
the Company issues equity or other derivatives at a price less than the exercise price set forth in such warrants, are separately
valued and accounted for on the Company’s balance sheet. Fair values for exchange traded securities and derivatives are
based on quoted market prices. Where market prices are not readily available, fair values are determined using market based pricing
models incorporating readily observable market data and requiring judgment and estimates.



Lattice
Valuation Model



The
Company valued the warrants and the conversion features in its outstanding convertible notes and preferred stock using a lattice
valuation model, with the assistance of a valuation consultant. The lattice model values these instruments based on a probability
weighted discounted cash flow model. The Company uses the model to develop a set of potential scenarios. Probabilities of each
scenario occurring during the remaining term of the instruments are determined based on management’s projections and the
expert’s calculations. These probabilities are used to create a cash flow projection over the term of the instruments and
determine the probability that the projected cash flow will be achieved. A discounted weighted average cash flow for each scenario
is then calculated and compared to the discounted cash flow of the instruments without the compound embedded derivative in order
to determine a value for the compound embedded derivative.



Fair
Value of Financial Instruments



The
Company’s financial instruments consist of cash and cash equivalents, accounts receivable, inventory, accounts payable and
accrued liabilities. The estimated fair value of cash, accounts receivable, accounts payable and accrued liabilities approximate
their carrying amounts due to the short-term nature of these instruments. None of these instruments are held for trading purposes.



The
Company utilizes various types of financing to fund its business needs, including convertible debt with warrants attached. The
Company reviews its warrants and conversion features of securities issued as to whether they are freestanding or contain an embedded
derivative and, if so, whether they are classified as a liability at each reporting period until the amount is settled and reclassified
into equity with changes in fair value recognized in current earnings. At December 31, 2015, the Company had warrants to purchase
common stock, the fair values of which are classified as a liability.





F-8







Inputs
used in the valuation to derive fair value are classified based on a fair value hierarchy which distinguishes between assumptions
based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of
three levels:



Level
one — Quoted market prices in active markets for identical assets or liabilities;



Level
two — Inputs other than level one inputs that are either directly or indirectly observable; and



Level
three — Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect
those assumptions that a market participant would use.



Determining
which category an asset or liability falls within the hierarchy requires significant judgment. The Company evaluates its hierarchy
disclosures each quarter. The Company’s only asset or liability measured at fair value on a recurring basis is its derivative
liability associated with warrants to purchase common stock and preferred stock. The fair value of the derivative liabilities
at December 31, 2016 and 2015 was $131,042 and $742,833, respectively. The decrease in the derivative liability for the twelve
months ended December 31, 2015 was $611,790.



|                                           |  | Carrying |           |   | Fair Value Measurements Using |   |   |         | 
|------------------------------------------ |  | -------- | --------- | - | ----------------------------- | - | - | ------- | 
|                                           |  | Value    |           |   | Level 1                       |   |   | Level 2 | 
|                                           |  |          |           |   |                               |   |   |         | 
|Derivative Liabilities 12/31/2014          |  | $        | 20,166    |   |                               |   |   |         | 
|                                           |  |          |           |   |                               |   |   |         | 
|Change in derivative liabilities due to:   |  |          |           |   |                               |   |   |         | 
|Settlements                                |  |          | (542,944  | ) |                               |   |   |         | 
|Change in derivative liabilities valuation |  |          | 1,265,611 |   |                               |   | - |         | 
|                                           |  |          | 722,667   |   |                               |   |   |         | 
|                                           |  |          |           |   |                               |   |   |         | 
|Derivative Liabilities 12/31/2015          |  | $        | 742,833   |   |                               |   |   |         | 
|                                           |  |          |           |   |                               |   |   |         | 
|Change in derivative liabilities due to:   |  |          |           |   |                               |   |   |         | 
|Issuance of warrants                       |  |          | 41,226    |   |                               |   | - |         | 
|Settlements                                |  |          | (85,877   | ) |                               |   |   |         | 
|Change in derivative liabilities valuation |  |          | (567,139  | ) |                               |   | - |         | 
|                                           |  |          | (611,790  | ) |                               |   |   |         | 
|                                           |  |          |           |   |                               |   |   |         | 
|Derivative Liabilities 12/31/2016          |  | $        | 131,043   |   |                               | $ | - |         | 



Income
(Loss) Per Common Share



Basic
net income (loss) per share includes no dilution and is computed by dividing net income (loss) available to common stockholders
by the weighted average number of common stock outstanding for the period. Diluted earnings per share is computed by dividing
net income by the weighted average number of shares outstanding and, when diluted, potential shares from options and warrants
to purchase common stock using the treasury stock method. Diluted net loss per common share does not differ from basic net loss
per common share since potential shares of common stock are anti-dilutive for all periods presented.



Cashless
Exercise of Warrants/Options



The
Company has issued warrants and options to purchase common stock where the holder is entitled to exercise via a cashless exercise.
The Company accounts for the issuance of common stock on the cashless exercise of warrants and options on a net basis.



Stock-Based
Compensation



The Company estimates the fair value of share-based
payment awards made to employees and directors, including stock options, restricted stock and employee stock purchases related
to employee stock purchase plans, on the date of grant using an option-pricing model. The value of the portion of the award that
is ultimately expected to vest is recognized as an expense ratably over the requisite service periods. We estimate the fair value
of each share-based award using the Black-Scholes option pricing model. The Black-Scholes model is highly complex and dependent
on key estimates by management. The estimates with the greatest degree of subjective judgment are the estimated lives of the stock-based
awards and the estimated volatility of our stock price.





F-9







Recent
Accounting Pronouncements



In
April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
No. 2015-03, Interest–Imputation of Interest (Subtopic 835-30)(“ASU 2015-03”), which changes the presentation
of debt issuance costs in financial statements. ASU 2015-03 requires an entity to present such costs in the balance sheet as a
direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported
as interest expense. It is effective for annual reporting periods beginning after December 15, 2016. Early adoption is permitted.
The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating
the impact of adoption of ASU 2015-03 on its balance sheets.



In
August, 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date
(“ASU 2015-14”). The amendment in this ASU defers the effective date of ASU No. 2014-09 for all entities for one year.
Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU
2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting
period. Earlier application is permitted only as of annual reporting periods beginning after December 31, 2016, including interim
reporting periods within that reporting period. The Company is currently evaluating the impact of the adoption of this standard.



On
February 25, 2016, the FASB issued Topic 842, its highly-anticipated leasing standard for both lessees and lessors. Under its
core principle, a lessee will recognize lease assets and liabilities on the balance sheet for all arrangements with terms longer
than 12 months. Lessor accounting remains largely consistent with existing U.S. GAAP. The amendments are effective for public
companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. At inception,
a lessee must classify all leases as either finance or operating. The Company intends to adopt Topic 842 upon extension of the
current lease or upon entering into a new lease agreement for alternative facilities. The Company is investigating the effect
of adoption of Topic 842 on its results of operations and financial condition. However, it is not anticipated that adoption of
Topic 842 will have a material impact on the results of operations or financial condition of the Company.



NOTE
4 – INVENTORY



At
December 31, 2016 and 2015 inventory consists of the following:



|               |  | 12/31/2016 |        |  | 12/31/2015 |  
|-------------- |  | ---------- | ------ |  | ---------- | -
|Raw materials  |  | $          | 23,163 |  |            | $
|Packaging      |  |            | 5,516  |  |            |  
|Finished goods |  |            | 62,406 |  |            |  
|               |  | $          | 91,085 |  |            | $



NOTE
5 – PROPERTY AND EQUIPMENT, NET



At
December 31, 2016 and 2015 property and equipment, net consists of the following:



|                                         |  | 2016 |          |   | 2015 |  
|---------------------------------------- |  | ---- | -------- | - | ---- | -
|Leasehold improvements                   |  | $    | -        |   |      | $
|Production equipment under capital lease |  |      | 514,707  |   |      |  
|                                         |  |      | 514,707  |   |      |  
|Accumulated depreciation                 |  |      | (147,842 | ) |      |  
|Property and equipment, net              |  | $    | 366,865  |   |      | $



Depreciation
expense was $100,920 and $180,567 for the years ended December 31, 2016 and 2015, respectively.



On
July 17, 2015, the Company entered into an equipment purchase agreement (the “Purchase Agreement”) with Fordham Capital
Partners, LLC (“Fordham”) pursuant to which the Company sold all of its right, title and interest in production equipment
utilized by the Company to Fordham for a purchase price of $500,000. From the proceeds of the sale, the company repaid outstanding
borrowings of $200,000 due to Fordham Capital under a previous equipment note plus accrued interest of $3,112, 2014 franchise
taxes of $96,542 and a security deposit of $15,800 related to the equipment lease. The Company recognized a loss on the sale of
574,331.Concurrently with entering into the Purchase Agreement, on July 17, 2015, the Company entered into an equipment lease
agreement (the “Equipment Lease Agreement”) with Fordham pursuant to which the Company leased the production equipment
from Fordham on terms that included the following: a lease term of 24 months, monthly lease payments by the Company of $15,800
and the option (at the election of the Company) to purchase the equipment on or after July 8, 2016 on the following terms: (i)
if the purchase date is between 12- 18 months $425,000; (ii) if the purchase date is between 19- 23 months: $360,000; and (iii)
if the purchase date is during the 24th month (but no later than July 8, 2017): $325,000. The Equipment Lease Agreement includes
customary events of default, including non- payment by the Company of the monthly lease payments and the payment of penalties
upon such late payments. The Company received cash proceeds of $172,911 from the Purchase Agreement after paying off the obligations
described above. These proceeds were used for general corporate purposes.





F-10







On
February 1, 2017, the Company exercised its option under the Equipment Lease Agreement that it had entered into with Fordham on
July 17, 2015 and paid Fordham $360,000 plus additional expenses for purchase of the Equipment that was subject to the Equipment
Lease Agreement. In connection with the payment, the Equipment Lease Agreement was terminated, which was a lease for 24 months
with monthly lease payments of $15,800.



NOTE
6 – ACCRUED EXPENSES AND OTHER



At
December 31, 2016 and 2015 accrued expenses consist of the following:



|                           |  | 2016 |         |  | 2015 |  
|-------------------------- |  | ---- | ------- |  | ---- | -
|Accrued payroll and taxes  |  | $    | 59,490  |  |      | $
|Accrued settlements        |  |      | 102,000 |  |      |  
|Accrued interest           |  |      | 627,937 |  |      |  
|Accrued expenses and other |  |      | 150,613 |  |      |  
|                           |  | $    | 940,040 |  |      | $



NOTE
7 – SHORT-TERM NOTES PAYABLE TO UNRELATED PARTIES



Note
5 discusses notes to Fordham that were repaid in 2015.



On
September 29, 2015, the Company issued a 14% nonconvertible senior unsecured note to an accredited investor in the principal amount
of $250,000. The note matures in six months (March 26, 2016) and bears interest at 14% computed based on a 365- day year. Accrued
interest is payable at maturity in cash. On December 23, 2015, the company executed an amendment whereby the maturity date was
extended to July 1, 2016. On June 29, 2016, the company executed an amendment whereby the maturity date was extended to October
1, 2016. On September 30, 2016, the company executed an amendment whereby the maturity date was extended to April 3, 2017.



On
December 23, 2015, the Company issued a 14% nonconvertible senior unsecured note to Johnathan Kahn in the principal amount of
$500,000. The note matures in twelve months (December 23, 2016) and bears interest at 14% computed based on a 365- day year. Accrued
interest is payable at maturity in cash. This note was reclassified from unrelated to related in the quarter ended June 30, 2016.
On December 15, 2016, the company executed an amendment whereby the maturity date was extended to April 3, 2017.



On
March 2, 2016, the Company issued a 14% senior unsecured note to Jonathan Kahn in the principal amount of $100,000. The Company
recognized $3,791 and amortized $438 of discount as of September 30, 2016. The note matures in one year (March 2, 2017) and bears
interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition, the Company
issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price of $0.64 per share to Mr.
Kahn. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full
ratchet price anti- dilution protection and entitled to registration rights. During
the three months ended June 30, 2016 this note was reclassified from a short-term borrowing to unrelated parties to a short-term
non-convertible note to related parties.



On
March 11, 2016, the Company issued a 14% senior unsecured note to an accredited investor in the principal amount of $100,000.
The Company recognized $3,189 and amortized $355 of discount as of September 30, 2016. The note matures in one year (March 11,
2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price of $0.64 per
share to the accredited investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless
basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.





F-11







On
April 7, 2016, the Company issued 14% senior unsecured notes to two accredited investors in the total principal amount of $100,000.
The Company recognized $3,924 and amortized $378 of discount as of September 30, 2016.The
notes mature in one year (April 7, 2017) and bear interest at 14% compounded based on a 365-day year. Accrued interest is payable
at maturity in cash. In addition, the Company issued warrants to acquire a total of 400,000 shares of the Company’s common
stock at an exercise price of $0.64 per share to the two accredited investors. The Warrants expire on the fifth anniversary of
their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
April 8, 2016, the Company issued a 14% senior unsecured note to an accredited investor in the principal amount of $500,000. The
Company recognized $15,342 and amortized $1,470 of discount as of September 30, 2016.The note matures in one year (April
8, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 2,000,000 shares of the Common Stock, at an exercise price of $0.64 per share to the accredited
investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to
full ratchet price anti- dilution protection and entitled to registration rights.



On
July 14, 2016, the Company issued a 14% senior unsecured note to an accredited investor in the principal amount of $500,000. The
Company recognized $6,383 and amortized $273 of discount as of September 30, 2016.The note matures in one year (July 14,
2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 2,000,000 shares of the Company’s common stock, at an exercise price of $0.64 per
share to the accredited investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless
basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
July 21, 2016, the Company issued a 14% senior unsecured note to an accredited investor in the principal amount of $300,000. The
Company recognized $2,117 and amortized $82 of discount as of September 30, 2016.The note matures in one year (July 21,
2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 600,000 shares of the Company’s common stock, at an exercise price of $0.64 per
share to the accredited investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless
basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
November 4, 2016, the Company issued a 14% senior unsecured note to an accredited investor in the principal amount of $100,000.
The Company recognized $2,117 and amortized $82 of discount as of September 30, 2016.The
note matures in one year (November 4, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is
payable at maturity in cash. In addition, the Company issued a warrant to acquire 200,000 shares of the Company’s common
stock, at an exercise price of $0.64 per share to the accredited investor. The Warrants expire on the fifth anniversary of their
issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration
rights.



Below
is a summary of the principal and interest activity for the year ended December 31, 2016:



|                                        |  | Principal |           |   | Interest |  
|--------------------------------------- |  | --------- | --------- | - | -------- | -
|Balance at December 31, 2015            |  | $         | 750,000   |   |          | $
|Principal advances and accrued interest |  |           | 1,700,000 |   |          |  
|Reclassification of Notes to Related    |  |           | (600,000  | ) |          |  
|Principal payments and interest         |  |           | -         |   |          |  
|                                        |  |           |           |   |          |  
|Balance at December 31, 2016            |  | $         | 1,850,000 |   |          | $





F-12







NOTE
8 – SHORT-TERM NONCONVERTIBLE NOTES PAYABLE TO RELATED PARTIES



On
September 29, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal
amount of $85,000. The note matures in two months (November 29, 2014) and bears interest at 14% computed based on a 365-day year.
Accrued interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is
subordinate to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
October 23, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $85,000. The note matures in two months (December 23, 2014) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
October 30, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $70,000. The note matures in two months (December 30, 2014) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
December 3, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $30,000. The note matures in two months (February 3, 2015) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
May 29, 2015, the Company executed an amendment number 3 to the 14% nonconvertible subordinated secured notes (dated September
29, 2014, October 23, 2014, October 30, 2014 and December 3, 2014, respectively) whereby the maturity date for each note was extended
from May 29, 2015 to December 31, 2015.



On
June 12, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $12,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Loan and the Factoring Agreement.



On
August 13, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $25,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Lease Agreement and the Factoring Agreement.



On
August 21, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $150,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Loan and the Factoring Agreement.



On
September 29, 2015, the Company issued a 14% nonconvertible senior unsecured note to an accredited investor in the principal amount
of $250,000. The note matures in six months (March 26, 2016) and bears interest at 14% computed based on a 365- day year. Accrued
interest is payable at maturity in cash.



On
December 23, 2015, the Company issued a 14% nonconvertible senior unsecured note to Johnathan Kahn in the principal amount of
$500,000. The note matures in twelve months (December 23, 2016) and bears interest at 14% computed based on a 365- day year. Accrued
interest is payable at maturity in cash. This note was reclassified from unrelated to related in the quarter ended June 30, 2016.



On
December 23, 2015, the company executed an amendment to the 14% nonconvertible subordinated secured notes (dated September 29,
2014, October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13,2015, and August 21, 2015 respectively) whereby
the maturity date for each note was extended to July 1, 2016.



On
February 26, 2016, the company executed an amendment to the 14% nonconvertible note (dated September 29, 2015) whereby the maturity
date was extended to July 1, 2016.



On
March 2, 2016, the Company issued a 14% senior unsecured note to Jonathan Kahn in the principal amount of $100,000. The Company
recognized $3,791 and amortized $247 of discount as of September 30, 2016. The note matures in one year (March 2, 2017) and bears
interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition, the Company
issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price of $0.64 per share to the
accredited investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are
subject to full ratchet price anti- dilution protection and entitled to registration rights. During
the three months ended September 30, 2016 this note was reclassified from a short-term borrowing to unrelated parties to a short-term
non-convertible note to related parties.





F-13







On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Morris Garfinkle in the principal amount
of $100,000. The Company recognized $3,094 and amortized $178 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price
of $0.64 per share to the entity controlled by Mr. Garfinkle. The Warrants expire on the fifth anniversary of their issuance,
may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration
rights.



On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Dan Jeffery in the principal amount
of $50,000. The Company recognized $1,824 and amortized $105 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 200,000 shares of the Company’s common stock, at an exercise price
of $0.64 per share to the entity controlled by Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may
be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
April 28, 2016, the Company issued a 14% senior unsecured note to an entity related to Dan Jeffery in the principal amount of
$50,000. The Company recognized $1,562 and amortized $55 of discount as of September 30, 2016. The note matures in one year (April
28, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 150,000 shares of the Common Stock at an exercise price of $0.64 per share to the entity
related to Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis,
are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
June 29, 2016, the Company executed an amendment to the 14% nonconvertible subordinated secured notes (September 29, 2014, October
23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13, 2015, and August 21, 2015 respectively) whereby the maturity
date for each note was extended to October 1, 2016.



On
September 30, 2016, the Company executed an amendment to the 14% nonconvertible subordinated secured notes (September 29, 2014,
October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13, 2015, and August 21, 2015 respectively) whereby
the maturity date for each note was extended to April 3, 2017.



On
December 15, 2016, the company executed an amendment to the 14% nonconvertible subordinated secured notes due December 23, 2016
whereby the maturity date was extended to April 3, 2017.



The
outstanding amount of nonconvertible notes payable to related parties was $457,000 at December 31, 2015 and $1,257,000 at December
31, 2016. The amount of accrued and unpaid interest was $54,935 on December 31, 2015 and $197,006 on December 31, 2016.



NOTE
9 – SHORT-TERM CONVERTIBLE NOTES PAYABLE TO RELATED PARTIES



On
February 11, 2014 the Company entered into an agreement with Edward B. Smith III, a Director and Shareholder of the Company, pursuant
to which Mr. Smith agreed to lend the Company $200,000 in a convertible senior secured note. The note matures in two years (February
11, 2016) and bears interest at 12.5% computed based on a 365-day year. Accrued interest is payable either at maturity or quarterly
at the option of Mr. Smith in shares of the Company’s common stock. At any time on or after the date that is 90 days after
the date of issuance of the note, Mr. Smith may elect to convert the aggregate principal balance and accrued interest into shares
of common stock of the Company. The conversion price under the note is $2.25, subject to adjustment as provided in the note. If
on the maturity date of the note, the thirty day trailing average closing price of the Company’s common stock (the “Trailing
Average Price”) is below $2.25, the Conversion Price on the maturity date will be reduced to the Trailing Average Price,
but to not less than $1.25. The Conversion Price was greater than the closing stock price on the agreement date; therefore no
beneficial conversion feature was recorded on this note.



On
April 25, 2014, the Company entered into an agreement with Edward B. Smith III, a Director and Shareholder of the Company, pursuant
to which Mr. Smith agreed to lend the Company $300,000 in a convertible subordinated secured note. The note matures in two years
(April 25, 2016) and bears interest at 14% computed based on a 365-day year. Accrued interest is payable at maturity in shares
of the Company’s common stock. At any time on or after the date that is 90 days after the date of issuance of the note,
Mr. Smith may elect to convert the aggregate principal balance and accrued interest into shares of common stock of the Company.
The conversion price under the note is $1.00. The conversion price was greater than the closing stock price on the agreement date;
therefore no beneficial conversion feature was recorded on this note.



On
May 12, 2014, the Company issued 14% convertible subordinated secured notes to both Mo Garfinkle and CKS Warehouse in the principal
amount of $75,000 each. Both notes mature in two years (May 12, 2016) and bear interest at 14% computed on a 365-day year. Accrued
interest is payable at maturity in shares of the Company’s common stock. At any time on or after the date that is 90 days
after the date of issuance of each note, Mr. Garfinkle and CKS Warehouse may elect to convert the aggregate principal balance
and accrued interest into shares of common stock of the Company. The conversion price under each note is $1.00. The conversion
price was greater than the closing stock price on the agreement date; therefore no beneficial conversion feature was recorded
on this note. Each note is secured by the assets of the Company, which security interest is subordinate to the security interest
granted to Fordham in connection with the Equipment Lease Agreement.





F-14







Notes
for $19,000 issued to each of the then four directors, $12,567 of each $75,000 note issued to Morris Garfinkle and CKS Warehouse
on May 12, 2014, the $264,000 note issued to Edward B. Smith III on August 6, 2014 and the $21,266 accrued interest related to
these notes as of December 31, 2014 were converted into 96,590 units in connection with January 2015 private placement offering
which is described in detail in Note #10.



On
December 23, 2015, the company executed an amendment to the 200,000 12.5% convertible subordinated secured note dated February
11, 2014, the 300,000 14% convertible subordinated secured notes (dated April 25, 2014, and the note issued to Mr. Garfinkle dated
May 12, 2014) whereby the maturity date for each note was extended to July 1, 2016.



On
May 22, 2016 the Company executed an amendment to the note issued to CKS Warehouse dated May 12, 2014 whereby the maturity date
was extended to October 1, 2016.



On
June 29, 2016, the Company executed an amendment to the $200,000 12.5% convertible subordinated secured note dated February 11,
2014, the $300,000 14% convertible subordinated secured notes dated April 25, 2014, and the note issued to Mr. Garfinkle dated
May 12, 2014) whereby the maturity date for each note was extended to October 1, 2016.



On
September 30, 2016 the Company executed an amendment to the note issued to CKS Warehouse dated May 12, 2014 whereby the maturity
date was extended to April 3, 2017.



On
September 30, 2016, the Company executed an amendment to the $200,000 12.5% convertible subordinated secured note dated February
11, 2014, the $300,000 14% convertible subordinated secured notes dated April 25, 2014, and the note issued to Mr. Garfinkle dated
May 12, 2014 whereby the maturity date for each note was extended to April 3, 2017.



The outstanding amount of convertible notes
payable to related parties was $624,866 at December 31, 2016 and December 31, 2015. The amount of accrued and unpaid interest
was $235,396 at December 31, 2016 and $150,684 at December 31, 2015.



NOTE
10 – PREFERRED STOCK



Preferred
Stock Issued to Investors



Between
December 29 and 31, 2014, the Company as part of a Private Placement Offering (the Offering) in which the company offered for
sale a maximum of 5,000,000 units (gross proceeds of $20,000,000), received cash deposits of $1,010,000 towards the purchase of
the equity securities being offered. On January, 2015 the company entered into agreements to sell an aggregate of 260,000 Units
to eight (8) accredited investors at a price per unit of $4.00 (the “Units”). Each unit consisted of (i) one (1) share
of 12.5% Redeemable Convertible Preferred Stock and (ii) one (1) warrant (the “Initial Warrant”), to acquire 8.64
shares of the company’s common stock, par value $0.00005 per share, at an exercise price of $0.64 per share for aggregate
cash proceeds of $1,040,000 pursuant to separate purchase agreements entered into with each investor. As a result 260,000 shares
of Preferred Stock and Initial Warrants to acquire 2,225,600 shares of common stock were issued. In addition, the Company agreed
to issue to each of the investors in the first round of financing an additional warrant (the “Additional Warrant”)
for each Unit acquired. The Additional Warrant entitles the investor in the first round of financing to acquire an additional
3.64 shares of the Company’s common also at the exercise price of $0.64 per share. The Additional Warrants issued in the
initial closing of the 260,000 units are exercisable for an aggregate of 946,400 shares of the company’s common stock. The
Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet
price anti-dilution and entitled to registration rights.



In
connection with the private placement offering that was consummated in January 2015, the members of the Company’s Board
of Directors agreed to receive an aggregate of 96,590 Units (representing one (1) Unit for every $4.00 of debt exchanged), 826,806
Initial Warrants and 351,586 Additional Warrants in exchange for previously issued convertible notes (including principal and
accrued and unpaid interest) (the “Notes”) held by the directors or affiliated entities as follows: (i) 71,211 Units,
609,566 Initial Warrants and 259,208 Additional Warrants were issued to Edward B. Smith III, the Company’s Chief Executive
Officer, in exchange for an aggregate of $284,844 of notes and accrued interest, (ii) 10,084 Units, 86,317 Initial Warrants and
36,705 Additional Warrants were issued to Morris Garfinkle in exchange for $40,335 of notes and accrued interest; (iii) 5,211
Units, 44,606 Initial Warrants and 18,968 Additional Warrants were issued to each of Mark Hershhorn and Brian Israel in exchange
for an aggregate of $20,844 of notes and accrued interest, respectively; and (v) 4,873 Units, 41,712 Initial Warrants and 17,737
Additional Warrants were issued to CKS Warehouse, an entity in which Mr. Hershhorn owns a controlling interest, in exchange for
an aggregate of $19,491 of principal and interest on notes and accrued interest.





F-15









The fair value of the preferred stock issued with the
units above was calculated using multinomial lattice models that valued the preferred stock based on a probability weighted discounted
cash flow model. The assumptions used to determine the fair value included the holder of the preferred stock would convert the
preferred stock once the stock price exceeded the exercise price, the historical annual volatility of the Company’s stock
price was 119% and the weighted cost of capital for the Company was 16.93%. As a result of the conversion of convertible debt into
units, the Company recorded a loss on debt conversion of $351,314.



On February 9, 2015, the Company closed a second round
of its private placement offering with four (4) accredited investors in which it raised gross proceeds of $500,000 and sold 125,000
units, with each unit consisting of (i) one (1) share of 12.5% Redeemable Convertible Preferred Stock (the “Preferred Shares”)
and (ii) one (1) warrant (the “Initial Warrant”), to acquire 8.56 shares of the Company’s common stock, par value,
$0.00005 per share (“common stock”), at an exercise price of $0.64 per share all pursuant to separate Securities Purchase
Agreements entered into with each investor (the “Securities Purchase Agreements”). In addition, the Company issued
to each of the investors in the first and second rounds of financing an additional warrant for each Unit acquired (the “Additional
Warrant” and together with the Initial Warrant, the “Warrants”) to acquire 3.64 shares of the Company’s
common stock at an exercise price of $0.64 per share. The Initial Warrants issued in the second closing are exercisable for 1,070,000
shares of the Company’s common stock and the Additional Warrants issued in the second closing are exercisable for an aggregate
of 455,000 shares of the Company’s common stock.



The Preferred Shares are nonvoting, accrue dividends
at the rate per annum equal to 12.5% of the sum of (i) the Stated Value (which initially is $4.00) until the Maturity Date as defined
in the Statement of Resolution Establishing Preferred Shares and (ii) the amount of accrued and unpaid dividends payable, are convertible
into shares of common stock at the option of the holder as described in the Statement of Resolution Establishing Preferred Shares,
have anti- dilution protection, registration rights, may be redeemed under certain circumstances, liquidation preference, protective
provisions and board rights under certain circumstances.



On March 18, 2015, the Company received $75,000 from
an accredited investor towards the purchase of 18,750 units in a private placement offering. Each unit consists of (i) one (1)
share of 12.5% Convertible Preferred Stock and (ii) one (1) warrant, to acquire 8.56 shares of the Company’s common stock,
par value, $0.00005 per share, at an exercise price of $0.64 per share all pursuant to a separate Securities Purchase Agreement
entered into with the investor.



On June 1, 2015, the Company received $25,000 from
an accredited investor towards the purchase of 6,250 units in a private placement offering. Each unit consists of (i) one (1) share
of 12.5% Convertible Preferred Stock and (ii) one (1) warrant, to acquire 8.56 shares of the Company’s common stock, par
value, $0.00005 per share, at an exercise price of $0.64 per share all pursuant to separate Securities Purchase Agreement entered
into with the investor.



On August 26, 2015, the Company received $250,000 from
accredited investors towards the purchase of 62,500 units in a private placement offering. Each unit consists of (i) one (1) share
of 12.5% Convertible Preferred Stock and (ii) one (1) warrant, to acquire 8.56 shares of the Company’s common stock, par
value, $0.00005 per share, at an exercise price of $0.64 per share all pursuant to separate Securities Purchase Agreements entered
into with the investors.



On October 20, 2015, the Company received $200,000
from an accredited investor towards the purchase of 50,000 units in a private placement offering. Each unit consists of (i) one
(1) share of 12.5% Convertible Preferred Stock and (ii) one (1) warrant, to acquire 8.56 shares of the Company’s common stock,
par value, $0.00005 per share, at an exercise price of $0.64 per share all pursuant to a separate Securities Purchase Agreement
entered into with the investor.



On November 4, 2015, the Company received $200,000
from an accredited investor towards the purchase of 50,000 units in a private placement offering. Each unit consists of (i) one
(1) share of 12.5% Convertible Preferred Stock and (ii) one (1) warrant, to acquire 8.56 shares of the Company’s common stock,
par value, $0.00005 per share, at an exercise price of $0.64 per share all pursuant to a separate Securities Purchase Agreement
entered into with the investor.



Preferred
Stock Issued to Vendors



Effective
January 1, 2015, the Company and its landlord executed an amendment to the lease extending the lease until July 14, 2015. Commencing
on May 1, 2015, the parties agreed to a monthly base rent of $10,681 plus property taxes. The Company also agreed to pay $71,125
in rental arrears on April 30, 2015 and another $71,125 in rental arrears on July 1, 2015. Finally, the parties agreed that the
Company will deliver to the landlord 20,025 shares of its 12.5% Convertible Preferred Stock. As a result of the preferred stock
issued, the Company recorded an expense of $48,060 for the three months ended June 30, 2015 with an offset to preferred stock
and additional paid in capital. Also, the Company issued a five year warrant to the landlord to purchase 171,414 shares of common
stock at $0.64 per share.



On
May 1, 2015, the Company and its landlord executed an amendment to the current lease extending the lease until October 14, 2015.
The parties agreed and the Company delivered to the landlord 8,010 shares of its 12.5% Convertible Preferred Stock and agreed
to issue 68,566 warrants to acquire the Company’s Common Stock at an exercise price of $0.64 per share. The Company recorded
additional rent expense of $48,060.





F-16







On
May 12, 2015, the Company agreed to issue 12,500 shares of 12.5% Convertible Preferred Stock and 107,000 warrants to acquire the
Company’s Common Stock at an exercise price of $0.64 per share in satisfaction of outstanding accounts payable due to a
vendor. The outstanding balance due to this vendor was $60,885. The Company recognized a loss of $13,990 as a result of the conversion.



Preferred
Dividends Accrued



As
of December 31, 2016, the Company had accrued dividends of $628,012.



As
of December 31, 2015, the Company had accrued dividends of $280,675.



NOTE
11 – LIQUIDATED DAMAGES



In
connection with certain private placements of the Company’s securities (the “Registrable Securities”) in 2008,
the Company entered into registration rights agreements (the “RRA”) that required the Company to file a registration
statement covering the Registrable Securities with the Securities and Exchange Commission no later than thirty days after the
final closing as contemplated in the Private Placement Memorandum for the 2008 offering (the “Filing Deadline”), which
the Company did not meet. Under the terms of the RRA, as partial compensation, the Company was required to make pro rata payments
to each Investor in an amount equal to 1.5% of the aggregate amount invested by such Investor for each 30-day period or pro rata
for any portion thereof following the Filing Deadline for which no registration statement was filed. We obtained a release and
waiver of the amounts due from almost all of the 2008 investors. Under the terms of the RRA, we potentially owe, and have recognized
as liquidated damages, $36,178 relating to holders from whom we did not receive waivers.



NOTE
12 – DERIVATIVE LIABILITIES



Certain
of the Company’s convertible preferred stock and warrants have reset provisions to the exercise price if the Company issues
equity or other derivatives at a price less than the exercise price set forth in such warrants. This ratchet provision results
in a derivative liability in our financial statements.



Our
derivative liabilities decreased to $131,043 at December 31, 2016 from $742,833 at December 31, 2015. The gain recognized during
the twelve months ended December 31, 2016 was $567,139 as compared to a loss of $1,265,611 for the twelve months ended December
31, 2015. During the year ended December 31, 2016, a portion of the derivative liability was written off to additional paid in
capital due to the purchase of the warrants utilizing common stock.



The
assumptions used to value the derivative liabilities in the lattice model for the year ended December 31, 2016 included the closing
stock price of $.0101 per share, and the projected volatility based on a historical value used of 275% and assuming the probability
for an event of default occurring 0% of the time and increasing by 0.0% per month. The assumptions used to value the derivative
liabilities in the lattice model for the year ended December 31, 2015 included the closing stock price of $0.42 per share, and
the projected volatility based on a historical value used of 165% and assuming the probability for an event of default occurring
5% of the time and increasing by 0.10% per month.





F-17







The
following tabular presentation reflects the components of derivative financial instruments on the Company’s balance sheet
at December 31, 2016 and 2015:



Components
of derivative financial instruments



|                                                                          |  | 12/31/2016 |          |   | 12/31/2015 |  
|------------------------------------------------------------------------- |  | ---------- | -------- | - | ---------- | -
|Common stock warrants                                                     |  | $          | -        |   |            | $
|Embedded conversion features for convertible debt or preferred
    shares |  |            | 131,043  |   |            |  
|                                                                          |  |            |          |   |            |  
|Total                                                                     |  | $          | 131,043  |   |            | $
|                                                                          |  |            |          |   |            |  
|Beginning balance                                                         |  | $          | 742,833  |   |            | $
|Change in derivative liability valuation                                  |  |            | (567,139 | ) |            |  
|Change in derivative liability - settlements                              |  |            | (85,877  | ) |            |  
|Change in derivative liability - warrant issuance                         |  |            | 41,226   |   |            |  
|                                                                          |  |            |          |   |            |  
|Total                                                                     |  | $          | 131,043  |   |            | $



NOTE
13 – COMMON STOCK



COMMON
STOCK ISSUED TO EMPLOYEES



On May 17, 2016, pursuant to the Kahn Employment
Agreement, Jonathan Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock. The Company recognized
a total expense of $180,824 related to this issuance. These shares were valued based on the closing price on the grant date and
were issued pursuant to the Company’s Amended and Restated Incentive Compensation Plan as amended (the “Plan”).



In
addition, on each of May 1, 2017 and May 1, 2018, respectively, pursuant to the Kahn Employment Agreement, Mr. Kahn will receive
an additional grant of fully-vested common stock, such additional grants each representing 0.75% of the Company’s shares
of common stock on a fully diluted basis as of May 1, 2017 and May 1, 2018, respectively. The Company expensed $23,268 in the
year ended December 31, 2016 for the stock compensation grant related to the May 1, 2017 and May 1, 2018 additional grants. The
Company will expense a portion of this compensation quarterly until the grants are made at their respective due dates.



COMMON
STOCK ISSUED TO DIRECTORS



On
February 24, 2015 the Company issued 576,924 shares of common stock to its three non- executive directors at such time (192,308
shares each) to Brian Israel, Morris Garfinkle and Dan Jeffery. The Company recognized a total expense of $150,000 related to
these issuances. These shares were valued based on the closing price on the grant date.



On
May 17, 2016, each non-executive member of the Board (Morris Garfinkle, Dan Jeffery and Edward B. Smith III) was granted pursuant
to the Incentive Compensation Plan an option to purchase an aggregate 1,006,711 shares of common stock (the equivalent of $30,000
based on the common stock’s closing price of $0.0298 on the grant date) for a total of 3,020,134 shares of common stock
at an exercise price of $0.0298 per share. These stock options vest 25% on date of grant and 25% every 90, 180 and 270 days subsequent
to the grant date and expire ten years after the date of the grant



On
June 21, 2016, the Company issued 2,013,423 shares of common stock to its Chairman Morris Garfinkle pursuant to the Incentive
Compensation Plan. The Company recognized a total expense of $25,369 related to this issuance. These shares were valued based
on the closing price on the grant date.



COMMON
STOCK ISSUED FOR SERVICES



There
were no shares issued for services during the year ended December 31, 2016.



On
March 1, 2015, the Company entered into a Business Development Agreement with Steeltown Consulting Group, LLC, pursuant to which
Steeltown will assist in evaluating various business and financial matters. The Company issued 400,000 restricted shares of common
stock as consideration for the services being rendered in this agreement. The common stock was valued at $104,000 based on the
closing prices of the stock on the date the agreement was executed. This agreement terminated on March 1, 2016.





F-18







COMMON
STOCK ISSUED ON THE EXERCISE OF WARRANTS FOR CASH



During
the years ended December 31, 2016 and December 31, 2015 there were no warrants exercised for cash.



COMMON
STOCK ISSUED ON THE CASHLESS EXERCISE OF WARRANTS



On
April 29, 2015, the Company sent a proposal to all warrant holders (as of September 30, 2014) to participate in a warrant exchange
program whereby each warrant holder will be able to 1) exchange their warrants for common stock, on a cashless basis, at a reduced
exercise price of $0.00005 per share, 2) if applicable, receive the right to 17.5% more warrants and a two year extension on all
of their warrants in return for waiving their anti- dilution rights on a one- time basis for the exchange, or 3) elect to take
advantage of (1) and (2) by (i) exchanging a portion of their Warrants that they so designate for shares of Common Stock in accordance
with the applicable terms in (1) and (ii) the remainder of the Warrant not exchanged will be retained and amended pursuant to
the applicable provisions of (2). As of April 29, 2015 there were 55,334,490 warrants outstanding that were eligible to participate
in the proposal inclusive of 38,888,147 warrants associated with anti- dilution provisions resulting from the January 8, 2015
private placement.



The
results of this exchange were warrant holders elected to receive 52,110,896 shares of Common Stock under alternative (1), 318,750
additional warrants were issued under alternative (2) and a combination of 974,826 shares of Common Stock and 73,125 warrants
were issued from elections made under alternative (3). The Company recorded a loss on exchange of warrants of $12,959,660 for
the twelve months ended December 31, 2015.



On
April 22, 2016, the Company purchased 4,610,179 warrants from their holders for an aggregate price of $122,986.



The Company and the holders of all of the
Company’s issued and outstanding warrants (the “Warrants”) as of December 12, 2016 entered into agreements effective
December 12, 2016 (the “Exchange Agreements”) pursuant to which they exchanged (the “Exchange”) their
Warrants (which were initially exercisable for an aggregate of 52,752,869 shares of the Company’s common stock, par value
$0.00005 per share (the “Common Stock”)) for an aggregate of 53,097,601 shares of Common Stock (which is the equivalent
to the issuance of approximately one share of Common Stock for each Warrant exchanged). The holders of the shares of Common Stock
received in exchange for the Warrants are prohibited from selling or otherwise transferring the shares of Common Stock until March
11, 2017. The foregoing description of the Exchange Agreements is qualified in its entirety by reference to the full text of the
form of the Exchange Agreement, a copy of which is filed as Exhibit 10.1 to the Form 8-K Filed on December 12, 2016 and is incorporated
by reference herein. An expense of $517,018 was recorded with this transaction.



NOTE
14 – STOCK OPTION PLAN AND WARRANTS



STOCK
OPTION PLAN



The
Company’s Incentive Compensation Plan (the “Plan”) provides for the issuance of qualified options to all employees
and non-qualified options to directors, consultants and other service providers.



A
summary of the status of stock options outstanding under the Plan as of December 31, 2016 and 2015 is as follows:



|                                 |  | 12/31/2016       |            |   | 12/31/2015                      |  
|-------------------------------- |  | ---------------- | ---------- | - | ------------------------------- | -
|                                 |  | Number of Shares |            |   | Weighted Average Exercise Price |  
|Outstanding at beginning of year |  |                  | 11,103,275 |   |                                 | $
|Granted                          |  |                  | 3,020,134  |   |                                 | $
|Exercised                        |  |                  | -          |   |                                 |  
|Expired and Cancelled            |  |                  | (4,012,386 | ) |                                 | $
|Outstanding, end of period       |  |                  | 10,111,023 |   |                                 | $
|                                 |  |                  |            |   |                                 |  
|Exercisable at end of period     |  |                  | 8,600,956  |   |                                 | $





F-19







At
December 31, 2016 the aggregate intrinsic value of all outstanding options was $0 of which 8,600,956 outstanding options are currently
exercisable at a weighted average exercise price of $0.61. At December 31, 2015 the aggregate intrinsic value of all outstanding
options was $0 of which 10,328,925 outstanding options were exercisable at a weighted average exercise price of $0.82.



The fair value of each stock option granted
is estimated on the date of grant using the Black-Scholes option valuation model. This model uses the assumptions listed in the
table below for stock options granted in 2016 and 2015. Expected volatilities are based on the historical volatility of the Company’s
stock. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect
at the time of grant. Compensation expense recorded in 2016 and 2015 was $160,906 and $414,882, respectively.



|                                               |  | 2016 |         |  | 2015 | 
|---------------------------------------------- |  | ---- | ------- |  | ---- | 
|Weighted average fair value per option granted |  |      | $0.0298 |  |      | 
|Risk-free interest rate                        |  |      | 1.20%   |  |      | 
|Expected dividend yield                        |  |      | 0.00%   |  |      | 
|Expected lives                                 |  |      | 2.7     |  |      | 
|Expected volatility                            |  |      | 201.10% |  |      | 



On
May 17, 2016, each non-executive member of the Board (Morris Garfinkle, Dan Jeffery and Edward B. Smith III) was granted pursuant
to the Plan an option to purchase an aggregate 1,006,711 shares of common stock (the equivalent of $30,000 based on the common
stock’s closing price of $0.0298 on the grant date) for a total of 3,020,134 shares of common stock at an exercise price
of $0.0298 per share. These stock options vest 25% on date of grant and 25% every 90, 180 and 270 days subsequent to the grant
date and expire ten years after the date of the grant. As of December 31, 2016, the unrecognized compensation cost related to
all non- vested share- based compensation arrangements granted under the Plan was $40,440.



During
the year ended December 31, 2015, the Company granted 6,299,600 options to employees at a weighted average exercise price of $0.29
per share. Stock- based compensation expense from options for the year ended December 31, 2015 was $570,560. The options granted
to employees are 25% vested on the date of grant and 25% every 90, 180 and 270 days subsequent to the grant date The expiration
date of the options granted in 2015 is five years from the grant date.



During
the years ended December 31, 2016 and December 31, 2015, there were no stock options exercised for cash or on a cashless basis.



As
of December 31, 2016, the Company had reserved 29,888,977 shares of common stock to be issued upon the exercise of qualified options
issued under the Plan.



WARRANTS



The Company and the holders of all of the
Company’s issued and outstanding warrants (the “Warrants”) as of December 12, 2016 entered into agreements effective
December 12, 2016 (the “Exchange Agreements”) pursuant to which they exchanged (the “Exchange”) their
Warrants (which were initially exercisable for an aggregate of 52,752,869 shares of the Company’s common stock, par value
$0.00005 per share (the “Common Stock”)) for an aggregate of 53,097,601 shares of Common Stock (which is the equivalent
to the issuance of approximately one share of Common Stock for each Warrant exchanged). The holders of the shares of Common Stock
received in exchange for the Warrants are prohibited from selling or otherwise transferring the shares of Common Stock until March
11, 2017. The foregoing description of the Exchange Agreements is qualified in its entirety by reference to the full text of the
form of the Exchange Agreement, a copy of which is filed as Exhibit 10.1 to the Form 8-K Filed on December 12, 2016 and is incorporated
by reference herein.



As
of December 31, 2015, the Company had warrants outstanding to purchase 50,957,780 shares of the Company’s common stock,
at prices ranging from $0.35 to $0.64 per share. These warrants expire at various dates through December 2020. The summary of
the status of the warrants issued by the Company as of December 31, 2016 and 2015 are as follows:





F-20







AGRITECH
WORLDWIDE, INC. (FORMERLY Z TRIM HOLDINGS, INC.)

SUMMARY
OF WARRANTS



|                                         |  | 12/31/2016         |             |   | 12/31/2015                      |  
|---------------------------------------- |  | ------------------ | ----------- | - | ------------------------------- | -
|                                         |  | Number of Warrants |             |   | Weighted Average Exercise Price |  
|Outstanding at beginning of year         |  |                    | 50,957,780  |   |                                 | $
|Granted                                  |  |                    | 6,750,000   |   |                                 | $
|Exercised or Exchanged for Common Shares |  |                    | (57,707,780 | ) |                                 | $
|Cashless Exercises                       |  |                    | -           |   |                                 | $
|Expired and Cancelled                    |  |                    | -           |   |                                 | $
|Outstanding, end of period               |  |                    | -           |   |                                 | $
|                                         |  |                    |             |   |                                 |  
|Exercisable at end of period             |  |                    | -           |   |                                 | $



Due
to the anti- dilution provisions of some of the warrants outstanding before the January 8, 2015 transaction, the exercise price
on 15,512,057 warrants was reduced to $0.35 and the number of shares of common stock into which the warrants became exercisable
was adjusted such that the warrants were then exercisable into 54,400,204 shares of common stock.



The
fair values for the Company’s derivative liabilities related to the Warrants (5 year warrants at $0.35, $0.45, and $0.64,
with a full reset feature) issued is $130,028. The derivative instruments were valued as of December 31, 2015 with the following
assumptions:



| | ● | The Holder would automatically exercise the warrants
at a stock price above the exercise price with the target exercise price dropping as expiration approaches,
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | The projected annual volatility was based on the Company’s
historical volatility between 148% and 193%,
| | - | -------------------------------------------------------------------------------------------------------



| | ● | An event of default would occurred 5% of the time, increasing
to 0.10% per month,
| | - | ---------------------------------------------------------------------------------



| | ● | Dilutive/Full Reset events projected to occur based
on future projected capital needs (future financings are projected going forward as of December 2015) resulting in the weighted
conversion price dropping from the initial conversion price (no reset events have occurred).
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Effective
January 1, 2015 the Company entered into a consulting agreement with Jeffery Consulting Group, LLC pursuant to which Jeffery Consulting
will provide assistance with operational improvements including manufacturing processes, strategic and tactical advice with respect
to the Company’s sales and marketing initiatives, and provide customer introductions and strategic sales opportunities.
In consideration of services rendered by Jeffery Consulting, the Company issued a warrant to purchase 1,250,000 shares of common
stock at $0.35 per share. The warrant vested 500,000 shares upon the mutual execution of this agreement, and 250,000 shares each
at the three month, six month, and nine month anniversaries of this agreement. The fair value of the warrants issued is estimated
on the date of grant using the Black- Scholes valuation model. The assumptions used in the model included the historical volatility
of the Company’s stock of 84.52%, and the risk- free rate for periods within the expected life of the warrant based on the
U.S. Treasury yield curve in effect of 1.07%. In 2015 the Company recognized compensation expense of $249,635. The Company also
agreed to accrue $5,000 per month which becomes payable to Jeffery Consulting once the Company has raised $3 million in additional
capital.



On
February 9, 2015, Edward B. Smith III and Morris Garfinkle were issued warrants exercisable for 31,000,000 and 5,500,000 shares
of common stock, respectively, in consideration of the services to be provided to the Company as Chief Executive Officer of the
Company and Chairman of the Board, respectively. The exercise price of these warrants is $0.45 per share. The fair value of the
warrants issued is estimated on the date of grant using the Black- Scholes valuation model. The assumptions used in the model
included the historical volatility of the Company’s stock of 81.99%, and the risk- free rate for periods within the expected
life of the warrant based on the U.S. Treasury yield curve in effect of 0.85%. In 2015 the Company recognized compensation expense
of $3,749,259.





F-21







On
April 29, 2015, the Company sent a proposal to all warrant holders (as of September 30, 2014) an offer to participate in a warrant
exchange program whereby each warrant holder will be able to 1) exchange their warrants for common stock, on a cashless basis,
at a reduced exercise price of $0.00005 per share, 2) if applicable, receive the right to 17.5% more warrants and a two year extension
on all of their warrants in return for waiving their anti- dilution rights on a one- time basis for the exchange, or 3) elect
to take advantage of (1) and (2) by (i) exchanging a portion of their Warrants that they so designate for shares of Common Stock
in accordance with the applicable terms in (1) and (ii) the remainder of the Warrant not exchanged will be retained and amended
pursuant to the applicable provisions of (2). As of April 29, 2015 there were 55,334,490 warrants outstanding that were eligible
to participate in the proposal inclusive of 38,888,147 warrants associated with anti- dilution provisions resulting from the January
8, 2015 private placement.



The
results of this exchange were warrant holders elected to receive 52,110,896 shares of Common Stock under alternative (1). The
Company recorded a loss on exchange of warrants in the amount of $12,959,654. Warrant holders elected to receive 318,750 additional
warrants under alternative (2). Finally, warrant holders elected to receive a combination of 974,826 shares of Common Stock and
73,125 warrants under alternative (3). The Company recognized a warrant expense of $259,662.



On
May 14, 2015 the Company entered into a consulting agreement with E.B. Smith Jr. (father of the Company’s CEO and largest
shareholder, Edward B. Smith III) pursuant to which E.B. Smith Jr. will provide advice with respect to the Company’s marketing
initiatives, provide customer introductions and investigating strategic transactions. In consideration of services rendered by
E.B. Smith Jr., the Company issued warrants to purchase 750,000 shares of common stock at $0.35 per share. The warrants vested
450,000 shares upon the mutual execution of this agreement and then in 150,000 share increments at the three month and six month
anniversaries of this agreement. The fair value of the warrants issued is estimated on the date of grant using the Black- Scholes
valuation model. The assumptions used in the model included the historical volatility of the Company’s stock of 104.65%,
and the risk- free rate for periods within the expected life of the warrant based on the U.S. Treasury yield curve in effect of
1.6%. In 2015 the Company recognized an expense of $117,642.



On
May 14, 2015 the Company entered into a consulting agreement with Terme Bancorp pursuant to which Terme Bancorp will provide advice
with respect to the Company’s marketing initiatives, provide customer introductions and investigating strategic transactions.
In consideration of services rendered by Terme Bancorp, the Company issued warrants to purchase 1,250,000 shares of common stock
at $0.35 per share. The warrants vested 750,000 shares upon the mutual execution of this agreement and then in 250,000 share increments
at the three month and six month anniversaries of this agreement. The fair value of the warrants issued is estimated on the date
of grant using the Black- Scholes valuation model. The assumptions used in the model included the historical volatility of the
Company’s stock of 104.65%, and the risk- free rate for periods within the expected life of the warrant based on the U.S.
Treasury yield curve in effect of 1.60%. In 2015 the Company recognized an expense of $197,075.



On
October 2, 2015, the Company issued a warrant to acquire 250,000 shares of the Company’s common stock, par value, $0.00005
per share, at an exercise price of $0.64 per share to an accredited investor in conjunction with their $250,000 note investment.
The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet
price anti- dilution protection and entitled to registration rights.



On
December 23, 2015, the Company issued a warrant to acquire 500,000 shares of the Company’s common stock, par value, $0.00005
per share, at an exercise price of $0.64 per share to an accredited investor in conjunction with their $500,000 note investment.
The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet
price anti- dilution protection and entitled to registration rights.



On
March 2 2016, the Company issued a warrant to acquire 400,000 shares of the Common Stock, at an exercise price of $0.64 per share
to Jonathan Kahn in conjunction with his $100,000 note investment. The Warrants expire on the fifth anniversary of their issuance,
may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration
rights.



On
March 11, 2016, the Company issued a warrant to acquire 400,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an accredited investor in conjunction with their $100,000 note investment. The Warrants expire on the fifth anniversary
of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
March 17, 2016, the Company issued a warrant to acquire 400,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an entity controlled by Morris Garfinkle in conjunction with its $100,000 note investment. The Warrants expire on the
fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection
and entitled to registration rights.





F-22







On
March 17, 2016, the Company issued a warrant to acquire 200,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an entity controlled by Dan Jeffery in conjunction with its $50,000 note investment. The Warrants expire on the fifth
anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection
and entitled to registration rights.



On
April 7, 2016, the Company issued two warrants to acquire a total of 400,000 shares of the Common Stock, at an exercise price
of $0.64 per share to two accredited investors in conjunction with their total of $100,000 note investments. The Warrants expire
on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution
protection and entitled to registration rights.



On
April 8, 2016, the Company issued a warrant to acquire 2,000,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an accredited investor in conjunction with their $500,000 note investment. The Warrants expire on the fifth anniversary
of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
April 22, 2016, the Company purchased 4,610,178 warrants from their holders for an aggregate price of $122,805.



On
April 28, 2016 the Company issued a warrant to acquire 150,000 shares of the Common Stock, at an exercise price of $0.64 per share
to an entity controlled by Dan Jeffery in conjunction with its $50,000 note investment. The Warrants expire on the fifth anniversary
of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
July 14, 2016, the Company issued a warrant to acquire 2,000,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an accredited investor in conjunction with their $500,000 note investment. The Warrants expire on the fifth anniversary
of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
July 21, 2016, the Company issued a warrant to acquire 600,000 shares of the Common Stock, at an exercise price of $0.64 per share
to an accredited investor in conjunction with their $300,000 note investment. The Warrants expire on the fifth anniversary of
their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights.



On
November 4, 2016, the Company issued a warrant to acquire 200,000 shares of the Common Stock, at an exercise price of $0.64 per
share to an accredited investor in conjunction with their $100,000 note investment. The Warrants expire on the fifth anniversary
of their issuance, may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled
to registration rights



Details
of other warrants issued during 2015 are included in footnote #10 (Preferred Stock) and #13 (Common Stock).



During
the year ended December 31, 2015, there were no warrants exercised for cash.



NOTE
15 – INCOME TAXES



The
Company has incurred losses since its inception and, therefore, has not been subject to federal income taxes. As of December 31,
2016, the Company has net operating loss (“NOL”) carryforwards for income tax purposes of approximately $64,700,000
which expire in 2029 through 2036. Losses prior to 2009 have been lost due to mergers, dissolution of entities, etc. Under the
provisions of Section 382 of the Internal Revenue Code greater than 50% ownership changes that occurred in the Company may significantly
limit the Company’s ability to utilize its NOL carry forwards to reduce future taxable income and related tax liabilities.



Section
382 considers an owner shift any time there is a transfer of stock by a person who directly, or indirectly, owns more than 5%
of the corporation and the percentage of stock of the corporation owned by one or more five percent shareholders has increased,
in the aggregate, by more than 50 percentage points over the lowest percentage of stock owned by such shareholders at any time
during the “testing period.” The “testing period” is generally a three-year period ending on the date
of any owner or equity structure shift.



The
amount of post-change income that may be offset by pre-change losses is limited each year by the “Section 382 Limitation.”
Generally, the Section 382 Limitation is an amount equal to the market capitalization of the old loss corporation multiplied by
a long-term interest rate established monthly by the Internal Revenue Service, which could significantly reduce or limit the annual
amount of NOL utilization. The Company has not yet determined the qualifying events and resulting limitation that may impact utilization
of net operating losses against future periods.





F-23







At
December 31, 2016 and 2015, the net deferred tax asset based on a 34% tax rate consisted of the following:



|                          |  | 2016 |             |   | 2015 |  
|------------------------- |  | ---- | ----------- | - | ---- | -
|                          |  |      |             |   |      |  
|Net operating loss        |  | $    | 22,000,000  |   |      | $
|                          |  |      |             |   |      |  
|Less: Valuation allowance |  |      | (22,000,000 | ) |      |  
|                          |  |      |             |   |      |  
|Net deferred tax asset    |  | $    | -           |   |      | $



After evaluating our own potential tax uncertainties,
the Company has determined that there are no material uncertain tax positions that have a greater than 50% likelihood of reversal
if the Company were to be audited. Our tax returns for the years ended December 2013 - 2015 are subject to IRS audit.



NOTE
16 – MAJOR CUSTOMERS AND CREDIT CONCENTRATION



Our customers are predominantly food manufacturers. There
were three significant customers who accounted for 34%, 12% and 7%, respectively, of total sales for the year ended December 31,
2016. There were three significant customers who accounted for 45%, 10% and 6%, respectively, of total sales for the year
ended December 31, 2015. Further, three customers accounted for 42%, 24% and 24% of the total accounts receivable at December
31, 2016. Two customers accounted for 68% and 11% of the total accounts receivable at December 31, 2015.



The
Company maintains cash deposits with major banks, which from time to time may exceed federally insured limits. At December 31,
2016 and 2015, $0 and $59,851, respectively, were in excess of federally insured limits. The Company periodically assesses the
financial condition of the institutions and believes that the risk of loss is minimal.



NOTE
17 – COMMITMENTS



Building
Lease



The
Company leases a combined research and development and office facility located in Mundelein, Illinois. The facility is approximately
44,000 square feet.



Effective
January 1, 2015, the Company and its landlord executed an amendment to the lease extending the lease until July 14, 2015. Commencing
on May 1, 2015, the parties agreed to a monthly base rent of $10,681 plus property taxes. The Company also agreed to pay $71,125
in rental arrears on April 30, 2015 and another $71,125 in rental arrears on July 1, 2015. Finally, the Company delivered to the
landlord 20,025 shares of its 12.5% convertible preferred stock which shares are convertible to common stock at the landlord’s
option at .088 per preferred share. Also the Company issued a five year warrant to the landlord to purchase 171,454 shares of
common stock at $0.64 per share.



On
May 1, 2015, the Company and its landlord executed an amendment to the then current lease extending the lease until October 14,
2015. The parties agreed and the Company delivered to the landlord 8,010 Preferred Shares and agreed to issue 68,566 warrants
to acquire the Company’s Common Stock at an exercise price of $0.64 per share. The Company recorded additional rent expense
of $48,060.



On
October 14, 2015 the lease converted to a month to month basis. Monthly rental payments are currently $17,972, inclusive of property
taxes. We believe we will be successful in negotiating a new lease with the landlord.



For
the years ended December 31, 2016 and 2015, the Company recognized rent expense of $229,220 and $189,120 respectively.





F-24







Equipment
Sale and Leaseback



On
July 17, 2015, the Company entered into an equipment purchase agreement (the “Purchase Agreement”) with Fordham Capital
Partners, LLC (“Fordham”) pursuant to which the Company sold all of its right, title and interest in production equipment
utilized by the Company to Fordham for a purchase price of $500,000. Concurrently with entering into the Purchase Agreement, on
July 17, 2015, the Company entered into an equipment lease agreement (the “Equipment Lease Agreement”) with Fordham
pursuant to which the Company leased the production equipment from Fordham on terms that included the following: a lease term
of 24 months, monthly lease payments by the Company of $15,800 and the option (at the election of the Company) to purchase the
equipment on or after July 8, 2016 on the following terms: (i) if the purchase date is between 12- 18 months $425,000; (ii) if
the purchase date is between 19- 23 months: $360,000; and (iii) if the purchase date is during the 24th month (but no later than
July 8, 2017): $325,000. The Company is accounting for the transaction as a capital lease. The future minimum lease payments under
the lease are as follows:



2017
- $110,600



NOTE
18 – PENDING LITIGATION/CONTINGENT LIABILITY



On
July 7, 2007, the Company and Greg Halpern, its former Chief Executive Officer in his individual capacity, were served with a
complaint by Joseph Sanfilippo and James Cluck for violation of the Consumer Fraud Act and the plaintiffs are seeking damages
in excess of $200,000. The trial court has issued a default order against the Company, and has denied the Company’s Motion
to reconsider. Management believes that the trial court’s rulings were erroneous and that it has grounds for appeal, and
that the underlying allegations are frivolous and wholly without merit and will vigorously defends the claim. The outcome of this
matter is unknown as of the report date. However, the Company has accrued a liability in the amount of $102,000 in respect to
this litigation.



NOTE
19 – RELATED PARTY TRANSACTIONS



On
February 11, 2014 the Company entered into an agreement with Edward B. Smith III, a Director and Shareholder of the Company, pursuant
to which Mr. Smith agreed to lend the Company $200,000 in a convertible senior secured note. The note matures in two years (February
11, 2016) and bears interest at 12.5% computed based on a 365-day year. Accrued interest is payable either at maturity or quarterly
at the option of Mr. Smith in shares of the Company’s common stock. At any time on or after the date that is 90 days after
the date of issuance of the note, Mr. Smith may elect to convert the aggregate principal balance and accrued interest into shares
of common stock of the Company. The conversion price under the note is $2.25, subject to adjustment as provided in the note. If
on the maturity date of the note, the thirty day trailing average closing price of the Company’s common stock (the “Trailing
Average Price”) is below $2.25, the Conversion Price on the maturity date will be reduced to the Trailing Average Price,
but to not less than $1.25. The Conversion Price was greater than the closing stock price on the agreement date; therefore no
beneficial conversion feature was recorded on this note.



On
April 25, 2014, the Company entered into an agreement with Edward B. Smith III, a Director and Shareholder of the Company, pursuant
to which Mr. Smith agreed to lend the Company $300,000 in a convertible subordinated secured note. The note matures in two years
(April 25, 2016) and bears interest at 14% computed based on a 365-day year. Accrued interest is payable at maturity in shares
of the Company’s common stock. At any time on or after the date that is 90 days after the date of issuance of the note,
Mr. Smith may elect to convert the aggregate principal balance and accrued interest into shares of common stock of the Company.
The conversion price under the note is $1.00. The conversion price was greater than the closing stock price on the agreement date;
therefore no beneficial conversion feature was recorded on this note.



On
April 30, 2014, the Company issued a 14% convertible subordinated secured note to each of Morris Garfinkle, Mark Hershhorn, Brian
Israel and Edward B. Smith III, Directors of the Company, in the principal amount of $19,000, for director fees due and payable
to them (the “Director Notes”). Each Director Note matures in two years (April 30, 2016) and bears interest at 14%
computed on a 365-day year. Accrued interest is payable at maturity in shares of the Company’s common stock. At any time
on or after the date that is 90 days after the date of issuance of the Director Note, the director may elect to convert the aggregate
principal balance and accrued interest into shares of common stock of the Company. The conversion price under each Director Note
is $1.00. The conversion price was greater than the closing stock price on the agreement date; therefore no beneficial conversion
feature was recorded on this note. Each Director Note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
May 12, 2014, the Company issued 14% convertible subordinated secured notes to both Mo Garfinkle and CKS Warehouse in the principal
amount of $75,000 each. Both notes mature in two years (May 12, 2016) and bear interest at 14% computed on a 365-day year. Accrued
interest is payable at maturity in shares of the Company’s common stock. At any time on or after the date that is 90 days
after the date of issuance of each note, Mr. Garfinkle and CKS Warehouse may elect to convert the aggregate principal balance
and accrued interest into shares of common stock of the Company. The conversion price under each note is $1.00. The conversion
price was greater than the closing stock price on the agreement date; therefore no beneficial conversion feature was recorded
on this note. Each note is secured by the assets of the Company, which security interest is subordinate to the security interest
granted to Fordham in connection with the Equipment Lease Agreement.





F-25







On
July 15, 2014, the Company entered into an agreement with Edward B. Smith III, pursuant to which Mr. Smith agreed to lend the
Company $64,000 in an unsecured note payable. The note matures in 90 days (October 15, 2014) without interest payable on the unpaid
principal and subject to the terms of the Company’s agreements with its secured creditors. On August 6, 2014 this note was
rolled into the $264,000 convertible subordinated secured note indicated below.



On
August 6, 2014, the Company issued a 14% convertible subordinated secured note to Edward B. Smith III in the principal amount
of $264,000. The note matures in two years (August 6, 2016) and bears interest at 14% computed on a 365-day year. Under this note
Mr. Smith has provided $200,000 of cash as of August 6, 2014 and the parties agreed to include the unsecured funds in the amount
of $64,000 provided by Mr. Smith on July 15, 2014 and include those amounts as part of this subordinated secured transaction.
The loan agreement executed by the parties on July 15, 2014 is now null and void. Accrued interest is payable at maturity in shares
of the Company’s common stock. At any time on or after the date that is 90 days after the date of issuance of the note,
Mr. Smith may elect to convert the aggregate principal balance and accrued interest into shares of common stock of the Company.
The conversion price under this note is $1.00. The conversion price was greater than the closing stock price on the agreement
date; therefore, no beneficial conversion feature was recorded on this note. The note is secured by the assets of the Company,
which security interest is subordinate to the security interest granted to Fordham in connection with the Equipment Loan and the
Factoring Agreement.



The
April 30, 2014 Notes for $19,000 issued to each of the then four directors, $12,567 of each $75,000 note issued to Morris Garfinkle
and CKS Warehouse on May 12, 2014, the $264,000 note issued to Edward B. Smith III on August 6, 2014 and the $21,266 accrued interest
related to these notes were converted into 96,590 units in connection with January 2015 private placement which is described in
detail in Note #10.



On
December 23, 2015, the company executed an amendment to the 200,000 12.5% convertible subordinated secured note dated February
11, 2014, the 300,000 14% convertible subordinated secured notes (dated April 25, 2014, and the note issued to Mr. Garfinkle dated
May 12, 2014) whereby the maturity date for each note was extended to July 1, 2016.



In
connection with the private placement offering that was consummated in January 2015, the members of the Company’s Board
of Directors agreed to receive an aggregate of 96,590 Units (representing one (1) Unit for every $4.00 of debt exchanged), 826,806
Initial Warrants and 351,586 Additional Warrants in exchange for previously issued convertible notes (including principal and
accrued and unpaid interest) (the “Notes”) held by the directors or affiliated entities as follows: (i) 71,211 Units,
609,566 Initial Warrants and 259,208 Additional Warrants were issued to Edward B. Smith III, the Company’s Chief Executive
Officer, in exchange for an aggregate of $284,844 of notes and accrued interest, (ii) 10,084 Units, 86,317 Initial Warrants and
36,705 Additional Warrants were issued to Morris Garfinkle in exchange for $40,335 of notes and accrued interest; (iii) 5,211
Units, 44,606 Initial Warrants and 18,968 Additional Warrants were issued to each of Mark Hershhorn and Brian Israel in exchange
for an aggregate of $20,844 of notes and accrued interest, respectively; and (v) 4,873 Units, 41,712 Initial Warrants and 17,737
Additional Warrants were issued to CKS Warehouse, an entity in which Mr. Hershhorn owns a controlling interest, in exchange for
an aggregate of $19,491 of principal and interest on notes and accrued interest.



On
January 2, 2014 the Company issued 285,716 shares of common stock to the then four non-executive directors (71,429 shares each)
Mark Hershhorn, Brian Israel, Morris Garfinkle and Edward B. Smith III. The Company recognized a total expense of $160,001 related
to these issuances. These shares were valued based on the closing price on the grant date.



On
February 24, 2015 the Company issued 576,924 shares of common stock to its three non- executive directors at such time (192,308
shares each) to Brian Israel, Morris Garfinkle and Dan Jeffery. The Company recognized a total expense of $150,000 related to
these issuances. These shares were valued based on the closing price on the grant date.



Effective
January 1, 2015 the Company entered into a consulting agreement with Jeffery Consulting Group, LLC pursuant to which Jeffery Consulting
will provide assistance with operational improvements including manufacturing processes, strategic and tactical advice with respect
to the Company’s sales and marketing initiatives, and provide customer introductions and strategic sales opportunities.
In consideration of services rendered by Jeffery Consulting, the Company issued a warrant to purchase 1,250,000 shares of common
stock at $0.35 per share. The warrant vested 500,000 shares upon the mutual execution of this agreement, and 250,000 shares each
at the three month, six month, and nine month anniversaries of this agreement. The fair value of the warrants issued is estimated
on the date of grant using the Black- Scholes valuation model. The assumptions used in the model included the historical volatility
of the Company’s stock of 84.52%, and the risk- free rate for periods within the expected life of the warrant based on the
U.S. Treasury yield curve in effect of 1.07%. In 2015 the Company recognized compensation expense of $249,635.The Company also
agreed to accrue $5,000 per month which becomes payable to Jeffery Consulting once the Company has raised $3 million in additional
capital.





F-26







On
February 9, 2015, Edward B. Smith III and Morris Garfinkle were issued warrants exercisable for 31,000,000 and 5,500,000 shares
of common stock, respectively, in consideration of the services to be provided to the Company as Chief Executive Officer of the
Company and Chairman of the Board, respectively. The exercise price of these warrants is $0.45 per share. The fair value of the
warrants issued is estimated on the date of grant using the Black- Scholes valuation model. The assumptions used in the model
included the historical volatility of the Company’s stock of 81.99%, and the risk- free rate for periods within the expected
life of the warrant based on the U.S. Treasury yield curve in effect of 0.85%. In 2015 the Company recognized compensation expense
of $3,749,259.



On
May 14, 2015 the Company entered into a consulting agreement with E.B. Smith Jr. (father of the Company’s CEO and largest
shareholder, Edward B. Smith III) pursuant to which E.B. Smith Jr. will provide advice with respect to the Company’s marketing
initiatives, provide customer introductions and investigating strategic transactions. In consideration of services rendered by
E.B. Smith Jr., the Company issued warrants to purchase 750,000 shares of common stock at $0.35 per share. The warrants vested
450,000 shares upon the mutual execution of this agreement and then in 150,000 share increments at the three month and six month
anniversaries of this agreement. The fair value of the warrants issued is estimated on the date of grant using the Black- Scholes
valuation model. The assumptions used in the model included the historical volatility of the Company’s stock of 104.65%,
and the risk- free rate for periods within the expected life of the warrant based on the U.S. Treasury yield curve in effect of
1.6%. In 2015 the Company recognized an expense of $117,642.



On
September 29, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal
amount of $85,000. The note matures in two months (November 29, 2014) and bears interest at 14% computed based on a 365-day year.
Accrued interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is
subordinate to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
October 23, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $85,000. The note matures in two months (December 23, 2014) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
October 30, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $70,000. The note matures in two months (December 30, 2014) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
December 3, 2014, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $30,000. The note matures in two months (February 3, 2015) and bears interest at 14% computed based on a 365-day year. Accrued
interest is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate
to the security interest granted to Fordham in connection with the Equipment Lease Agreement.



On
May 29, 2015, the Company executed an amendment number 3 to the 14% nonconvertible subordinated secured notes (dated September
29, 2014, October 23, 2014, October 30, 2014 and December 3, 2014, respectively) whereby the maturity date for each note was extended
from May 29, 2015 to December 31, 2015.



On
June 12, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $12,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Loan and the Factoring Agreement.



On
August 13, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $25,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Lease Agreement and the Factoring Agreement.



On
August 21, 2015, the Company issued a 14% nonconvertible subordinated secured note to Edward B. Smith III in the principal amount
of $150,000. The note matures on December 31, 2015 and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. The note is secured by the assets of the Company, which security interest is subordinate to the
security interest granted to Fordham in connection with the Equipment Loan and the Factoring Agreement.



On
November 18, 2015, the Company entered into a consulting agreement (the “Consulting Agreement”) with ACT Financial
Services Inc. (“ACT Financial”), pursuant to which ACT Financial will provide to the Company finance, accounting and
administrative functions, including acting chief financial officer (and principal financial officer) services to be provided by
Donald G. Wittmer. The Company will pay an agreed upon weekly rate for such services and will reimburse ACT Financial for certain
travel expenses. The Consulting Agreement will continue for six months and may be extended by mutual agreement of the parties.
This agreement terminated upon the resignation of Mr. Wittmer as Chief Financial Officer on May 17, 2017. ACT Financial received
$48,040 in the year ended December 31, 2016.





F-27







On
December 23, 2015, the Company issued a 14% nonconvertible senior unsecured note to Jonathan Kahn in the principal amount of $500,000.
The note matures in twelve months (December 23, 2016) and bears interest at 14% computed based on a 365- day year. Accrued interest
is payable at maturity in cash. During the three months ended September 30, 2016 this note was reclassified from a short-term
borrowing to unrelated parties as a short-term non-convertible note to related parties.



On
December 23, 2015, the company executed an amendment to the 14% nonconvertible subordinated secured notes (dated September 29,
2014, October 23, 2014, October 30, 2014, December 3, 2014, June 12, 2015, August 13,2015, and August 21, 2015 respectively) whereby
the maturity date for each note was extended to July 1, 2016.



On
March 2, 2016, the Company issued a 14% senior unsecured note to Jonathan Kahn, the Company’s current Chief Executive Officer,
interim Chief Financial Officer and member of the Board of Directors in the principal amount of $100,000. The Company recognized
$3,791and amortized $247 of discount as of September 30, 2016. The note matures in one year (March 2, 2017) and bears interest
at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition, the Company issued a
warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price of $0.64 per share to the accredited
investor. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis, are subject to
full ratchet price anti- dilution protection and entitled to registration rights. During
the three months ended September 30, 2016 this note was reclassified from a short-term borrowing to unrelated parties as a short-term
non-convertible note to related parties.



On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Morris Garfinkle in the principal amount
of $100,000. The Company recognized $3,094 and amortized $178 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 400,000 shares of the Company’s common stock, at an exercise price
of $0.64 per share to the entity controlled by Mr. Garfinkle. The Warrants expire on the fifth anniversary of their issuance,
may be exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration
rights.



On
March 17, 2016, the Company issued a 14% senior unsecured note to an entity controlled by Dan Jeffery in the principal amount
of $50,000. The Company recognized $1,824 and amortized $105 of discount as of September 30, 2016. The note matures in one year
(March 17, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash.
In addition, the Company issued a warrant to acquire 200,000 shares of the Company’s common stock at an exercise price of
$0.64 per share to the entity controlled by Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may be
exercised on a cashless basis, are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
April 28, 2016, the Company issued a 14% senior unsecured note to an entity related to Dan Jeffery in the principal amount of
$50,000. The Company recognized $1,562 and amortized $55 of discount as of September 30, 2016. The note matures in one year (April
28, 2017) and bears interest at 14% compounded based on a 365-day year. Accrued interest is payable at maturity in cash. In addition,
the Company issued a warrant to acquire 150,000 shares of the Common Stock at an exercise price of $0.64 per share to the entity
related to Dan Jeffery. The Warrants expire on the fifth anniversary of their issuance, may be exercised on a cashless basis,
are subject to full ratchet price anti- dilution protection and entitled to registration rights.



On
May 17, 2016, each non-executive member of the Board (Morris Garfinkle, Dan Jeffery and Edward B. Smith III) was granted pursuant
to the Company’s Amended and Restated Incentive Compensation Plan an option to purchase 1,006,711 shares of Common Stock
(the equivalent of $30,000 based on the Common Stock’s closing price of $0.0298 on the grant date) for a total of 3,020,133
shares of Common Stock at an exercise price of $0.0298 per share. These stock options vest 25% on date of grant and 25% every
90, 180 and 270 days subsequent to the grant date and expire ten years after the date of the grant.



On
May 17, 2016 (the “Effective Date”), the Company” entered into an employment agreement with Jonathan Kahn (the
“Kahn Employment Agreement”) in connection with the appointment of Mr. Kahn as the Company’s new Chief Executive
Officer. The Kahn Employment Agreement will continue until June 30, 2019 (subject to automatic one year extensions), unless earlier
terminated pursuant to its terms. Pursuant to the Kahn Employment Agreement, Mr. Kahn’s annual base salary will be $200,000
per year from the Effective Date through December 31, 2016 and $225,000 beginning January 1, 2017. Mr. Kahn will also be eligible
to participate in Company’s annual incentive compensation program (the “Annual Incentive Program”), with a target
annual bonus equal to 100% of his annual base salary and a maximum annual bonus each year equal to 200% of his base salary. Mr.
Kahn’s annual bonus for the 2016 calendar year will be prorated based on the number of days served during 2016. The actual
amount of the annual bonus earned by and payable to Mr. Kahn in any year will be determined upon the satisfaction of goals and
objectives established by the Compensation Committee (the “Compensation Committee”) of the Company’s Board of
Directors (the “Board”) and will be subject to such other terms and conditions of the Company’s Annual Incentive
Program as in effect from time to time.





F-28







Pursuant
to the Kahn Employment Agreement, Mr. Kahn was granted 6,067,931 fully-vested shares of the Company’s common stock, par
value $0.00005 per share (the “Common Stock”), such amount representing 3.5% of the Company’s shares of Common
Stock on a fully diluted basis as of the Effective Date. In addition, on each of May 1, 2017 and May 1, 2018, respectively, Mr.
Kahn will receive an additional grant of fully-vested Company Common Stock, such additional grants each representing 0.75% of
the Company’s shares of Common Stock on a fully diluted basis as of May 1, 2017 and May 1, 2018, respectively (together
with the 6,067,931 shares granted on the Effective Date, the “Equity Award”).



Commencing
in calendar year 2017, and each year thereafter, Mr. Kahn will be eligible to participate in the Company’s annual equity
incentive compensation program, with an annual target equity grant for each year in which Mr. Kahn participates in the equity
incentive compensation program having a grant date fair value equal to 100% of Mr. Kahn’s base salary and a maximum annual
equity award for each year in which Mr. Kahn participates in the equity incentive compensation program equal to 250% of Mr. Kahn’s
base salary. In determining the amount of Mr. Kahn’s equity grant for any year, the Compensation Committee will consider
the Company’s performance over the immediately preceding fiscal year.



On each anniversary
of the Effective Date and each Equity Issuance Date (as defined below), until such time as Mr. Kahn terminates employment with
the Company, Mr. Kahn will receive an additional grant of unrestricted Common Stock (which additional grant will be deemed to
be a part of the initial Equity Award), if necessary, so that on each such anniversary and each such Equity Issuance Date, the
total number of shares received by Mr. Kahn pursuant to the Equity Award will equal at least 3.5% of the Company’s shares
of Common Stock on a fully diluted basis until April 30, 2016, 4.25% until April 30, 2018, and 5.0% thereafter. Under this provision,
Mr. Kahn is owed 416,695 shares valued at $4,573, as of December 31, 2016 and included in common stock payable. For purposes of
the Kahn Employment Agreement, an “Equity Issuance Date” is any date on which the Company consummates the sale of
or issuance of (i) more than 1% of the Company’s shares of Common Stock on a fully diluted basis; or (ii) any instrument
that is convertible into more than 1% of the Company’s shares of Common Stock on a fully diluted basis. For the sake of
clarity, in calculating the total number of shares held by Mr. Kahn pursuant to the Equity Award, only the initial shares granted
and any additional shares granted in accordance with this paragraph will be considered and any shares (A) held by Mr. Kahn on
or prior to the Effective Date or (B) granted to or acquired by Mr. Kahn in any other manner following the grant to Mr. Kahn of
the Equity Award (including any annual equity award grant or otherwise) will be disregarded.



If
Mr. Kahn’s employment is terminated due to Disability (as defined in the Kahn Employment Agreement), he will receive an
annual bonus for the year in which the termination occurs, determined based on actual performance during such year and prorated
for the period during the year in which Mr. Kahn was employed by the Company.



Pursuant
to the Kahn Employment Agreement, Mr. Kahn was granted 6,067,931 fully-vested shares of Common Stock pursuant to the Company’s
Amended and Restated Incentive Compensation Plan.



The
foregoing summary description of the Kahn Employment Agreement does not purport to be complete and is subject to, and qualified
in its entirety by reference to the Kahn Employment Agreement, a copy of which is attached as Exhibit 10.1 to the Form 8-K filed
on May 17, 2016 and is incorporated herein by reference



There
are no family relationships between Mr. Kahn and any former director, officer or person nominated or chosen by the Company to
become director.



On
June 21, 2016, the Company issued 2,013,423 shares of common stock to its Chairman Morris Garfinkle pursuant to the Plan.



On
November 18, 2016, November 22, 2016 and December 7, 2016, respectively, Mr. Smith advanced the Company $16,230, $23,000 and $20,000.



On
December 7, 2016, Mr. Kahn advanced the Company $20,000.



On
December 12, 2016, as part of the Company’s warrant exchange, Mr. Smith exchanged 31,868,774 warrants for 31,868,774 common
shares, Mr. Garfinkle and entities affiliated with Mr. Garfinkle exchanged 6,023,022 warrants for 6,023,022 common shares, Mr.
Jeffrey and entities affiliated with Mr. Jeffery exchanged 1,600,000 warrants for 1,600,000 common shares and Mr. Kahn exchanged
900,000 warrants for 900,000 common shares.



NOTE
20 – GUARANTEES



The
Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against
third party claims. These contracts primarily relate to: (i) divestiture agreements, under which the Company may provide customary
indemnifications to purchasers of the Company’s businesses or assets; (ii) certain real estate leases, under which the Company
may be required to indemnify property owners for environmental and other liabilities, and other claims arising from the Company’s
use of the applicable premises; and (iii) certain agreements with the Company’s officers, directors and employees, under
which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship. The
terms of such obligations vary. Generally, a maximum obligation is not explicitly stated. Because the obligated amounts of these
types of agreements often are not explicitly stated, the overall maximum amount of the obligations cannot be reasonably estimated.
Historically, the Company has not been obligated to make significant payments for these obligations, and no liabilities have been
recorded for these obligations on its balance sheet as of December 31, 2016.





F-29







In
general, the Company offers a one-year warranty for most of the products it sells. To date, the Company has not incurred any material
costs associated with these warranties.



NOTE
21 – SUBSEQUENT EVENTS



On
February 1, 2017, the Company entered into a loan and security agreement (the “Loan Agreement”) with various lenders,
including an entity controlled by its chief executive officer, Jonathan Kahn, and a director, Morris Garfinkle, and issued a note
in connection therewith (the “Note”). The principal amount of the loan is $996,000. The Loan accrues interest at a
rate per annum equal to the prime rate plus 18.9%. Interest is payable monthly and the principal is payable on the maturity date
of the loan, which is 2.5 years from the issuance date. The loan is secured by all of the assets of the Company. The Loan Agreement
contains certain covenants regarding financial reporting, limits on the Company’s incurrence of indebtedness, permitted
investments, encumbrances, restricted payments, and mergers and acquisitions.



The
Loan Agreement includes customary events of default, including non-payment by the Company of the monthly interest payments and
the payment of penalties upon such late payments. The Company used a portion of the proceeds of the loan to exercise its purchase
option under its Equipment Lease Agreement with Fordham Capital Partners, LLC (“Fordham”) that it entered into on
July 17, 2015 (the “Equipment Lease Agreement”). The Company intends to utilize the proceeds from the loan for working
capital purposes.



As
a condition to the Loan Agreement, two directors of the Company that held senior secured debt of the Company entered into a subordination
agreement with the Company and the administrative agent for the lenders (the “Subordination Agreement”).



The
foregoing description of the Loan Agreement, the Note and the Subordination Agreement do not purport to be complete and are qualified
in their entirety by reference to the full text of such agreements, which are attached as Exhibits 10.1, 10.2 and 10.1 to
the Form 8-K filed on February 1, 2017and incorporated by reference herein.



On
February 1, 2017, the Company exercised its option under the Equipment Lease Agreement that it had entered into with Fordham on
July 17, 2015 and paid Fordham $360,000 plus additional expenses for purchase of the Equipment that was subject to the Equipment
Lease Agreement. In connection with the payment, the Equipment Lease Agreement was terminated, which was a lease for 24 months
with monthly lease payments of $15,800.



On
February 17, 2017, Jonathan Kahn, the Chief Executive Officer of the Company, and Morris Garfinkle, the Chairman of the Board
of Directors of the Company (the “Board”), and the Garfinkle Revocable Trust filed a Schedule 13D with the Securities
and Exchange Commission, which, among other things, described a term sheet (the “Term Sheet”), which was annexed to
the Schedule 13D, that they had presented to the Company’s Special Committee of the Board. The Term Sheet is for a proposed
convertible preferred stock financing relating to the potential issuance by the Company of shares of up to $6,000,000 but not
less than $4,000,000 of a newly-created series of preferred stock of the Company. As proposed, such newly-created preferred stock
would be convertible into up to a maximum of 75% of the Company’s equity (on a fully-diluted basis) and would be entitled,
as a class, to designate three of the five directors of the Company.



On
March 14, 2017, Messrs. Kahn and Garfinkle and the Garfinkle Revocable Trust determined to terminate discussions with the Company
with respect to the Term Sheet and the potential investment contemplated thereby, and the Company was notified of such determination.



Due
to the Company’s ongoing liquidity needs, on March 15, 2017, the Company entered into a promissory note with Mr. Kahn and
Mr. Garfinkle as the lenders in the original principal amount of $56,000 (the “Promissory Note”). The Promissory Note
accrues interest at a rate per annum equal to 5%. Accrued and unpaid interest on the outstanding principal is payable monthly
in arrears on the last business day of each month in which any amount remains outstanding under the Promissory Note. The principal
amount, together with all accrued and unpaid interest thereon, is required to be repaid to the lenders out of the proceeds received
from the accounts receivable of the Company collected after March 15, 2017, immediately upon such receipt. The loan under the
Promissory Note is secured by all of the assets of the Company pursuant to a Security Agreement and a Patent Security Agreement.



The
proceeds of the Promissory Note were used by the Company to primarily fund payroll and to pay employee health insurance premiums
and a critical vendor of the Company.





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As
a condition to the making of the loan under the Promissory Note, the lenders under a loan agreement entered into by the Company
on February 1, 2017 (which lenders included Mr. Kahn and Mr. Garfinkle through GKS Funding), which is the senior secured debt
of the Company, were required to enter into a subordination agreement with the Company and Mr. Kahn and Mr. Garfinkle (the “Subordination
Agreement”). The Subordination Agreement made the Promissory Note the senior secured debt of the Company.



On
March 24, 2017, Dan Jeffery provided the Company with notice of his resignation from the Company’s Board of Directors (the
“Board”), effective immediately. Mr. Jeffery’s resignation from the Board was not the result of any dispute
or disagreement with the Company. Mr. Jeffery has served on the Board since 2015.



Due
to the ongoing liquidity needs of the Company, on March 28, 2017, the Company entered into a promissory note with Mr. Kahn and
Mr. Garfinkle as the lenders in the original principal amount of $35,000 (the “Promissory Note”). The Promissory Note
accrues interest at a rate per annum equal to 5%. Accrued and unpaid interest on the outstanding principal is payable monthly
in arrears on the last business day of each month in which any amount remains outstanding under the Promissory Note. The principal
amount, together with all accrued and unpaid interest thereon, is required to be repaid to the lenders out of the proceeds received
from the accounts receivable of the Company collected after March 28, 2017, immediately upon such receipt. The loan under the
Promissory Note is secured by all of the assets of the Company pursuant to a Security Agreement and a Patent Security Agreement.



The
proceeds of the Promissory Note were used by the Company to primarily fund payroll and to pay certain critical vendors of the
Company.



As
a condition to the making of the loan under the Promissory Note, the lenders under a loan agreement entered into by the Company
on February 1, 2017 (which lenders included Mr. Kahn and Mr. Garfinkle through GKS Funding), which is the senior secured debt
of the Company, were required to enter into a subordination agreement with the Company and Mr. Kahn and Mr. Garfinkle (the “Subordination
Agreement”). The Subordination Agreement made the Promissory Note the senior secured debt of the Company.



On
March 31, 2017, Jonathan Kahn and Morris Garfinkle provided Agritech Worldwide, Inc. (the “Company”) with notices
of their resignation from the Company’s Board of Directors (the “Board”) and Jonathan Kahn’s resignation
as the Company’s Chief Executive Officer, effective immediately. Messrs. Garfinkle and Kahn’s resignations were not
the result of any dispute or disagreement with the Company.



On
March 31, 2017, the Company received a notice of default from GKS Funding LLC, as administrative agent under the Loan Agreement
(as defined below) (“GKS Funding”) stating that the Company is in default of a loan (the “Loan”) made
pursuant to that certain Loan and Security Agreement by and among the Company, GKS Funding and the lenders named therein, which
include Messrs. Garfinkle and Kahn (the “Lenders”), dated as of February 1, 2017 (the “Loan Agreement”),
for failure to make a scheduled interest payment on the Loan that was due on March 31, 2017. If such failure described above is
not cured within the 15-day cure period, which is April 15, 2017, the Lenders (through GKS Funding, as administrative agent under
the Loan Agreement) intend to exercise all rights and remedies available to them under the Loan Agreement, related note and applicable
law, which will include foreclosing on the collateral under the Loan Agreement.



On April 5, 2017, the Company and GKS Funding,
as administrative agent under the Loan Agreement (as defined above) entered into a Cooperation Agreement (the “Cooperation
Agreement”) in connection with a loan (the “Loan”) made to the Company pursuant to that certain Loan and Security
Agreement, dated as of February 1, 2017 (as amended and in effect from time to time, the “Loan Agreement”), between
the Company, the Lenders party thereto and GKS Funding. As previously reported, on March 31, 2017, the Company received a notice
of default from GKS Funding stating that the Company was in default of the Loan for failure to make a scheduled interest payment
on the Loan that was due on March 31, 2017. If such failure described above was not cured within the 15-day cure period, which
was April 15, 2017, the Lenders (through GKS Funding, as administrative agent under the Loan Agreement) intended to exercise all
rights and remedies available to them under the Loan Agreement, related note and applicable law, which included foreclosing on
the collateral under the Loan Agreement.



As
of the date of the Cooperation Agreement, the outstanding balance of the Company’s obligations under the Loan Agreement
was approximately $1,011,800, plus accrued and accruing legal fees and expenses. Over the past several months, the Company has
experienced significant operating losses and has been unable to raise additional capital in order to pay the expenses necessary
to continue to operate its business. For the same reason, the Company was unable to pay interest on the Loan on March 31, 2017
(the “Existing Default”).



As
a result of the foregoing, and after considering all options, the Board of Directors of the Company determined that the Company
will not have sufficient funds to cure the Existing Default on or before April 15, 2017. In addition, given the inability to raise
additional capital to fund ongoing operations, the Company also determined that it would be unable continue to operate as a going
concern. Thus, the Company determined that it was in the best interests of all constituents and the Company to cooperate with
GKS Funding and its exercise of remedies.



Pursuant
to the Cooperation Agreement, the Company and GKS Funding agreed as follows: (i) the Company waived the 15-day cure period with
respect to the Existing Default immediately upon execution of the Cooperation Letter and GKS Funding has the right to exercise
its remedies under the Loan Agreement and applicable law with respect to such event of default, including, without limitation,
by scheduling and conducting a sale of all of the collateral under the Loan Agreement on or about April 17, 2017 (the “UCC
Sale”); (ii) GKS Funding agreed to fund loans to the Company up to the date of the UCC Sale to permit the Company to pay
the Budgeted Expenses (as defined in the Cooperation Agreement) as and when due with this new loan, which is (a) secured by a
first priority security interest in all of the real and personal assets, property, fixtures, rights and interests of the Company,
(b) shall have priority in payment over the Loan made pursuant to the Loan Agreement; and (c) shall be repaid, before any other
payments are made by the Company, out of the first cash proceeds of the collateral received by the Company; and (iii) the Company
consented to fully cooperate with GKS Funding in connection with the UCC Sale, as well as the exercise by GKS Funding of any of
its other right and remedies in connection therewith.





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On
April 5, 2017, the Company and GKS Funding entered into a letter agreement, a copy of which is attached to a Schedule 13D
and is incorporated by reference herein (the “Letter Agreement”), pursuant to which (i) the Company informed
GKS Funding that the Company has determined (1) it will not have sufficient funds to cure the interest payment default that
occurred on March 31, 2017, under the Loan Agreement and the Note as previously described in Amendment No. 2 and (2) it
cannot continue to operate as a going concern and (ii) the Company and GKS Funding agreed as follows:



(1)
The Company waived the cure period with respect to the Existing Default (as defined in the Letter Agreement). As a result, the
Company agreed, immediately upon execution of the Letter Agreement, the Existing Default became an Event of Default (as defined
in the Loan Agreement) (with, for avoidance of doubt, no further right to cure or grace period), and GKS Funding shall have the
right to exercise its remedies under the Loan Agreement and applicable law with respect to such Event of Default, including, without
limitation, by scheduling and conducting a UCC sale of all of the Collateral (as defined in the Loan Agreement) on or about April 17,
2017 (the “UCC Sale”).



(2)
GKS Funding agreed to fund loans to the Company up to the date of the UCC Sale to permit the Company to pay the Budgeted Expenses
(as defined in the Letter Agreement) as and when due and payable in accordance with Exhibit A to the Letter Agreement,
pursuant to documentation in form and substance acceptable to GKS Funding and Company (the “New Loans”). The New Loans:
(a) shall be secured by a first priority security interest in all of the real and personal assets, property, fixtures, rights
and interests of the Company, whether now existing or owned and hereafter arising or acquired and wherever located; (b) shall
have priority in payment over the Loans (as defined in the Loan Agreement) made by GKS Funding pursuant to the Loan Agreement;
and (c) shall be repaid, before any other payments are made by the Company, out of the first cash proceeds of the Collateral
received by the Company.



(3)
The Company consents to, and shall fully cooperate with GKS Funding in connection with, the UCC Sale and the disposition of the
Collateral in connection therewith, as well as the exercise by GKS Funding of any of its other right and remedies in connection
therewith.



GKS Funding intends
to try to acquire all of the Collateral at the UCC Sale. GKS Funding also intends to credit bid the amounts due under the Loan
Agreement and the Note at the UCC Sale. The effects of the contemplated transaction have not been reflected in the financial statements.



The
New Loans will be evidenced by a promissory note in the form attached hereto to a Schedule 13D and is incorporated by reference
herein (the “New Note”). The New Note will accrue interest at a rate per annum equal to 5%. Accrued and unpaid
interest on the outstanding principal is payable monthly in arrears on the last business day of each month in which any amount
remains outstanding under the New Note. The principal amount, together with all accrued and unpaid interest thereon, is required
to be repaid to GKS Funding out of the proceeds received from the accounts receivable of the Company collected after April 7,
2017, immediately upon such receipt. The New Note will be secured by all of the assets of the Company pursuant to a Security Agreement
and a Patent Security Agreement in the forms attached to a Schedule 13D and are incorporated by reference herein.



The
proceeds of the $60,000 New Loans that will be made on April 7, 2017, will be used by the Company to pay critical vendors
of the Company and for the Company to fund payroll.



As
a condition to the making of the loan under the New Note, GKS Funding will require the lenders under the Loan Agreement (which
include GKS Funding) to enter into a subordination agreement with the Company and GKS Funding (the “New Subordination Agreement”).
The New Subordination Agreement will make the New Note the senior secured debt of the Company, provided that the balance of the
Second Promissory Note, which is less than $300, will be senior to the New Note until paid in full. The form of the New Subordination
Agreement is attached to a Schedule 13D and is incorporated by reference herein.



The
foregoing descriptions of the New Note, the Security Agreement, the Patent Security Agreement and the New Subordination Agreement
are qualified in their entirety by reference to the New Note, the Security Agreement, the Patent Security Agreement and the New
Subordination Agreement, which are attached to a Schedule 13D and is incorporated by reference herein.



All
additional New Loans made to the Company by GKS Funding after April 7, 2017, pursuant to the Letter Agreement will be made
on the same terms and conditions as set forth in the New Note, the Security Agreement, the Patent Security Agreement and the New
Subordination Agreement.



The
proceeds of the $60,000 New Loans made on April 7, 2017, will be used by the Company to pay critical vendors of the Company
and for the Company to fund payroll.$30,000
was contributed by Mr. Kahn from his personal funds to GKS Funding on April 7, 2017, and was used by GKS Funding to
fund $60,000 of New Loans on April 7, 2017. Mr. Kahn intends to use personal funds for additional contributions to GKS
Funding in the event GKS Funding funds additional New Loans pursuant to the Letter Agreement. $30,000 was contributed by Mr. Garfinkle
from his personal funds to GKS Funding on April 7, 2017, and was used by GKS Funding to fund $60,000 of New Loans on April 7,
2017. Mr. Garfinkle intends to use personal funds for additional contributions to GKS Funding in the event GKS Funding funds
additional New Loans pursuant to the Letter Agreement.



On
April 14, 2017, Edward B. Smith, III was appointed interim Chief Executive Officer and interim Chief Financial Officer.



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