|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) | 
|- | --------------------------------------------- | 
|  | OF THE SECURITIES ACT OF 1934                 | 



For the fiscal year ended December 31, 2014



OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) | 
|- | ------------------------------------------------- | 
|  | OF THE SECURITIES ACT OF 1934                     | 



Commission File Number: 000-55345



ZERO GRAVITY
SOLUTIONS, INC.



(Exact name of registrant as specified in its
charter)



|Nevada                                                        |  | 46-1779352                       
|------------------------------------------------------------- |  | ---------------------------------
|(State or other jurisdiction ofIncorporation or organization) |  | (IRS Employer Identification No.)



190 NW Spanish River Boulevard, Boca Raton,
Florida 33431
Address, including zip code, of principal executive offices)



(561) 416-0400
(Registrant's telephone number, including area code)



Securities registered pursuant to Section
12(b) of the Act: None.



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



|Title
        of Each Class              |  | Name
        of Each Exchange on Which Registered
|---------------------------------------- |  | -------------------------------------------------
|Common Stock, $0.001 par value per share |  | N/A                                              





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

Yes  ̈     Noþ



Indicate by check mark if the registrant is
not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

Yes  ̈     Noþ



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 preceding 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  ̈  Noþ





Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K isnot 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. (Check
one):



|Large accelerated filer  ̈                                            | Accelerated filer  ̈        
|-------------------------------------------------------------------- | ---------------------------
|Non-accelerated filer  ̈(Do not check if a smaller reporting company) | Smaller reporting company þ



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





As of June 30, 2014, the aggregate market value of the registrant's
common stock held by non-affiliates of the registrant was $25,652,919 based on the price at which stock was last sold on OTC Pink
($2.75) on June 17, 2014.





As of March 20, 2015, the registrant had 33,476,597 shares of common
stock outstanding.



Documents incorporated by reference: [None.]











ZERO GRAVITY SOLUTIONS, INC.

FORM 10-K ANNUAL REPORT

DECEMBER 31, 2014

TABLE OF CONTENTS



|         |                                                                                                | Page
|-------- | ---------------------------------------------------------------------------------------------- | ----
|PART I   |                                                                                                |     
|Item 1.  | Business                                                                                       | 1   
|Item 1A. | Risk Factors                                                                                   | 21  
|Item 1B. | Unresolved Staff Comments                                                                      | 21  
|Item 2.  | Properties                                                                                     | 21  
|Item 3.  | Legal Proceedings                                                                              | 21  
|Item 4.  | Mine Safety Disclosures                                                                        | 21  
|         |                                                                                                |     
|PART II  |                                                                                                |     
|Item 5.  | Market for the Registrant’s Common Stock and Related Stockholder Matters                       | 21  
|Item 6.  | Selected Financial Data                                                                        | 22  
|Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations          | 23  
|Item 7A. | Quantitative and Qualitative Disclosures About Market Risk                                     | 26  
|Item 8.  | Financial Statements and Supplementary Data                                                    | 26  
|Item 9.  | Changes in and/or Disagreements with Accountants on Accounting and Financial Disclosure        | 26  
|Item 9A. | Controls and Procedures                                                                        | 26  
|Item 9B. | Other Information                                                                              | 27  
|         |                                                                                                |     
|PART III |                                                                                                |     
|Item 10. | Directors, Executive Officers and Corporate Governance                                         | 28  
|Item 11. | Executive Compensation                                                                         | 32  
|Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 34  
|Item 13. | Certain Relationships and Related Transactions and Director Independence                       | 36  
|Item 14. | Principal Accountant Fees and Services                                                         | 37  
|         |                                                                                                |     
|PART IV  |                                                                                                |     
|Item 15. | Exhibits and Financial Statement Schedule                                                      | 38  



i







FORWARD-LOOKING STATEMENTS



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



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



PART I



| | ITEM 1. | BUSINESS
| | ------- | --------



Company Overview



Zero Gravity Solutions,
Inc. (“we”, “us”, “our”, the "Company", “ZGSI” or the "Registrant"),
a Nevada corporation, is a biotechnology company focused on commercializing technology derived from, and designed for, space with
significant applications on Earth. These technologies seek to improve world agriculture by providing valuable solutions to challenges
facing humanity, including threats to world agriculture and the ability to feed the world’s rapidly growing population.
The Company’s business model is currently focused on its two primary business segments: 1) BAM-FX, which is a cost effective,
ionic nutrient delivery system for plants that can deliver minerals and micronutrients systemically at the cellular level of a
plant, and 2) Directed Selection, which relates to the production and alteration of new varieties of novel stem cells with
unique and beneficial characteristics in the prolonged zero/micro gravity environment of the International Space Station. These
can be patented for commercial sale to third parties in the agricultural and human regenerative medical markets. ZGSI
is headquartered in Boca Raton, Florida.



The Company is focused
on implementing a near-term revenue generation plan through the introduction of the Company’s first commercial product,
BAM-FX, to the world’s agricultural markets. BAM-FX is an ionic nutrient delivery system for agriculture. The Company conducted
field trials on a variety of crops in laboratory and academic settings as well as in field applications on grower/end-user crops
during 2014. These trials showed exceedingly positive results including a significant increase in yield, quality and nutritional
value in a variety of crops. As a result of the successful trials, the Company opened a manufacturing facility during the third
quarter of 2014 to supply expected product demand and began the commercial roll out of BAM-FX. To support its commercial efforts,
the Company has hired or contracted with qualified personnel for sales and marketing support, in field test research and toxicology
services.



1







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



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



The Company has incurred
a net loss and has only minimal revenues since its inception under our current name and business plan on January 11, 2013. As
such, our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an
on-going business unless we obtain additional capital to pay our ongoing operational costs. Management is currently assessing
numerous financing options; however, the Company believes that it will have to raise an additional $3-4,000,000 to fund our operations
through the end of 2015.



We believe the Company’s
proprietary technologies enables the development of a diverse product line with unique solutions to big problems, representing
significant potential revenue and profit opportunities. Due to the market scope and associated regulatory needs to reach full
profit potential, ZGSI’s strategy is to partner and license with industry-leading companies to supplement necessary resources
and expedite revenue generation.



Corporate History and Structure



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



2







The Company’s
Prior History and Timeline



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



Formation of ZGSI and
the Company’s Current Structure



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



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



The Company currently
has four wholly owned subsidiaries: BAM Agricultural Solutions, Inc., (“BAM Inc.”), Zero Gravity Life Sciences, Inc.
(“ZGLS”), Zero Gravity Solutions, Ltd. (“ZGS UK”), BAM Agricultural Solutions, Ltd.(BAM UK) BAM Inc. is
a Florida Corporation, which holds and controls the manufacturing, sales and revenue generation of the Company's agricultural
product, BAM-FX. ZGLS is a Florida Corporation, which holds and controls the Company’s Directed Selection business segment
and the related research and development work. ZGS UK is a private United Kingdom limited company based in the United Kingdom
created to service the Company's operations and interests in the European Union (EU) and other international markets. BAM UK was
formed to reserve the name in the European Market.



The Company currently
has 17 employees, of which 15 are full time employees. The Company has selected December 31st as its fiscal year end.



3







Principal Product Lines



BAM-FX



BAM-FX is an ionic nutrient
delivery system for food crops. BAM-FX was originally developed by John Wayne Kennedy, our Chief Science Officer and Director,
to grow food crops in space vehicles designed for deep space human missions, but has been found to have potentially far reaching
applications for agriculture on Earth. BAM-FX is a formulation of copper and zinc used to treat plant mineral deficiencies by
providing a delivery system to move mineral ions to the mineral deficient areas in plants. The benefits of BAM-FX are accomplished
without the use of genetic modification or traditional fertilizers, soil amendments or supplements. Instead, the BAM-FX formula
transports highly bio-available, balanced, ionic minerals systemically into the biological system of a plant using a mineral complex
carrier in an ionic form, which penetrates and distributes nutrients throughout the plant's cellular structure. BAM-FX delivers
a diversity of nutrients, in measurably larger quantities than can be achieved through standard and traditional methods, and it
is capable of substantially cutting costs with its versatile application possibilities and its replacement of multiple products.
The BAM-FX formula can be applied either by soaking seeds or direct application at time of planting and foliar treatment of the
plant at later stages of development. Further, the benefits to crops are accomplished without the use of additive or subtractive
genetic modification techniques and therefore, crops treated with BAM-FX are not categorized as GMOs. As major agricultural markets
throughout the world (such as Europe) are concerned about the long-term effects of genetically modified plants and crops that
are ingested by humans, we believe that the fact that crops treated with BAM-FX are not categorized as GMOs creates a competitive
market advantage and provides a wider potential customer base in these areas.



As noted in the “BAM-FX
Trials” section below, in tests with commercial farmers, BAM-FX treated plants have shown higher yields, increased plant
resistance to harmful environmental factors and higher quality fruit and vegetables. Trials have shown that applications of BAM-FX
to various crops reduces the necessity for multiple applications of other products, which we believe will save agriculture a considerable
amount of time and money while creating faster growing, healthier, more robust plants. Additionally, we believe BAM-FX may provide
significant value for farmers, growers, and world agriculture through:



| | · | Faster
                                         time to maturity and harvest, with higher farm yields for food crops;
| | - | ---------------------------------------------------------------------------------------------------------------------



| | · | Systemic
                                         delivery of targeted nutrients and minerals to crops to create more robust plants and
                                         more nutritious crops;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Increased
                                         nutritional quality of grains and produce, including the potential to engineer nutrition
                                         into our food (e.g. bio-fortifying lettuce and grapes with zinc, potassium and calcium);
                                         and
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | Reduced
                                         ecologic and other concerns associated with agricultural runoff pollution into water
                                         sources; as large amounts of phosphates or nitrates are not used.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



BAM-FX Trials



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



4







Through this body of work,
product application parameters have been established to engage with candidate early adopter customers, sales representatives,
distributors, and key opinion leaders in academia for on-site product evaluation. Essential knowledge gained for a variety of
economically important crops includes the following: acceptable BAM-FX concentration ranges and delivery rates, treatment methods,
successful integration with a variety of commercial farming practices (e.g. soil application in furrow, drip irrigation, foliar
spray, helicopter spray), and a series of evaluation criteria for demonstration of product success. Preliminary internal testing
was validated by small-scale field trials using test plots, which found faster plant establishment (increased root growth, stronger
plant crowns, greater leaf growth), faster crop maturation, and overall greater yields. BAM-FX also showed the potential to support
a reduction in fertilizer application rates, as evidenced by early internal research and later results from two field trials.



Internal Studies



Seed Germination Studies



A series of experiments
tested the impact of BAM-FX on seed germination under normal conditions and under conditions of abiotic (heat) stress. A variety
of seeds were soaked in diluted BAM-FX for up to thirty minutes, and then seeds were allowed to germinate in a moist environment.
For bush bean, squash, tomato, cantaloupe, and wheat seeds soaked with BAM-FX showed a thicker radicle (early root), greater root
hair development and/or greater root branching after 7 - 13 days of growth. Under optimal growing conditions, germination rates
for seeds treated with BAM-FX were comparable to or better than control (above, lettuce and sweet corn). Under non-optimal conditions
of abiotic stress (overly warm temperatures for a cool season crop) lettuce showed improved germination and viability after a
one-time soak with BAM-FX. For seed soaking methods, a maximum of 1 oz/gal dilution rate of BAM-FX was determined to be the upper
limit, with higher doses leading to deleterious effects.



This was evidenced by
improved lettuce seed germination after the seed was soaked with BAM-FX (8 or 9 out of 10 seeds per group), compared to control
(4 or 6 out of 10 seeds germinated). After 13 days, newly emerged lettuce seedlings from BAM-FX-treated seeds were green with
sturdy leaves and better turgor in the young plant tissue (not wilted). In comparison, control seeds that had received a water
soak only either failed to germinate or emerging leaves and roots were brown and unhealthy in appearance.



These studies established
the fundamental effects of BAM-FX on seed germination, radicle emergence, and early root activity in very young seedlings. The
utility of BAM-FX for supporting plant growth warranted further testing, since seed germination and the growth of young seedlings
are an extremely vulnerable period of agricultural crop growth. For later yield production, it is vital to support development
of robust plant seedlings, even under non-ideal climatic conditions, with abundant rootstock and good plant vigor.



Fertilizer Reduction
Testing



The ability of BAM-FX
to support plant growth with decreased fertilizer application was tested under controlled conditions using corn and sunflower
seeds in coir plugs. Study results were consistent with improved plant nutrient status for BAM-FX-treated seedlings. Seeds treated
with BAM-FX developed significantly greater roots and root hairs (capillary roots), compared to fertilizer or water-only controls.
In comparison, seedlings receiving fertilizer developed much less capillary (tiny hair) roots, possibly creating a dependency
on the continuous addition of nutrients. Seeds and plants treated with BAM-FX developed larger root balls and a much higher volume
of very tiny (capillary) hair roots, which are the key roots which uptake most of the micronutrients from the soil. The more small
capillary roots there are on the plant, the more efficient the plant becomes in micronutrient uptake. See Figure 1. Results of
this test were qualitative observations, since the growth media selected for this test did not allow measuring root biomass.



5











Figure 1: Photographic
comparisons of the root structure between seeds treated with BAM-FX compared to fertilizer or water-only controls.



Also, BAM-FX seedling
growth phenology suggested a shift toward greater root production before vegetative growth of leaves commenced, followed by more
vigorous leaf growth. Emergence of seedlings from soil had some evidence of delay, however resulting seedlings had greater leaf
surface area compared to height for BAM-FX group, compared to control plants receiving NPK fertilizer or water only which were
relatively taller with less leaf area. See Figure 2. Follow-up testing examined a range of fertilizer rates in combination with
BAM-FX. Optimal BAM-FX concentrations for use appeared to be 0.5 or 1 oz/gal for this study. The most favorable results occurred
for BAM-FX with reduced fertilizer at 75% or 50% rate. Plants receiving BAM-FX with full fertilizer rate tended toward less leaf
width and overly tall, weaker plants, suggesting overly abundant nutrients for the optimal plant growth habit. The greatest boost
in plant growth occurred over the first two weeks after BAM-FX treatment.





Figure 2: Photographic
comparisons of the leaf growth between seeds treated with BAM-FX compared to fertilizer controls.



Improved plant nutrient
status for BAM-FX-treated seedlings was determined as, through previous study, BAM-FX already had a demonstrated impact on plant
root systems, particularly the growth of increased capillary roots (tiny, single-celled root hairs), allowing the plant to extract
more micronutrients from the soil and translating to a much improved plant. Improved growth of BAM-FX seedlings is consistent
with improved nutrient access from the soil and/or provision of nutrients by BAM-FX, either of which would augment the available
nutrients inside of the plant.



6







In addition to confirming
earlier root production results, this set of studies provided the first indication that BAM-FX had the potential to support optimal
plant growth with reduced fertilizer application.



Potato Plant Development
Testing



Potato testing was conducted
to assess the effects of BAM-FX on the development and maturation of a root crop. Potato plants that received BAM-FX had earlier
sprout emergence and greater vegetative growth, as measured by leaf and stem biomass, compared to control. For potatoes planted
at the same time and grown in the same conditions, those receiving BAM-FX visibly emerged from the soil sooner than control groups
receiving water only. At 17 days after planting, 11 out of 12 BAM-FX-treated plants had emerged from soil, ranging from 2 - 14
cm tall. In comparison, only 50% of control plants had emerged from the soil, with heights of 0.5 – 3 cm. After two months
of growth, potato plants were weighted to determine total amount of plant (biomass), as a measure of how much vegetative growth
had occurred for BAM-FX and control plants. BAM-FX plants had significantly greater mass of leaves and stems, for example averaging
39.0 ± 23.1 for the 1 oz/gal BAM-FX soil drench with foliar spray, compared to an average leaf/stem mass of 12.2 ±
6.0 for control group (± standard deviation indicated).



The greatest improvement
in vegetative growth occurred for the group that received BAM-FX as both a soil drench and a foliar spray. In this test, BAM-FX
was found to accelerate plant development of a starchy root crop, and further testing was warranted to pursue treatment options
in the field to avoid phytotoxicity and to capture yield data. In the potato test, plants receiving BAM-FX reached a larger size
in the same time span, compared to control (i.e. average potato plant mass of leaves and stems for BAM-FX test groups was at least
two-times that of control). Plant maturity stages also occurred sooner, since stolon counts (described below) were higher for
BAM-FX-treated plants (i.e. 10.3 ± 4.1 for BAM-FX soil drench with foliar spray group, versus 3.5 ± 1.7 for control
group), and tuber initiation (described below) only occurred in plants receiving BAM-FX but not for control group (Figure 3).



In potato plants, a seed
potato is planted with “eyes”, from which stems emerge. Once the stems are above the soil, leaves emerge. Later in
the potato plant life cycle at a certain maturity point, lateral shoots, called stolons, emerge from the base of the potato plant.
Stolons can turn and grow up to become more stems with leaves or, particularly if located below the soil, form small, baby potatoes
in a process called tuber initiation. The early stages of tuber initiation are visible as a very small rounded area near the end
of a stolon. In this test, stolon development showed significantly increased growth and potential tuber initiation for BAM-FX
treated plants. Stolons were very small or absent on control group plants, and tuber initiation had not occurred. (See Figure
3.)



7











Figure 3: After allowing a
2-month period of vegetative growth, potato plants were removed from soil, photographed, and stems/leaves retained for a fresh-weight
biomass measurement.



LEFT: Potato plants that received
BAM-FX had higher biomass for stems and leaves. A double treatment of BAM-FX – soil drench at planting followed by post-emergence
foliar spray – was most effective at producing biomass.



RIGHT: Under the soil, plants that
received BAM-FX showed greater stolen growth and early tuber initiation. Control plants had minimal to no stolon’s visible,
and tuber initiation had not occurred.



Plant Application Limits
(Phytotoxicity) Studies



A series of tests were
conducted to identify a workable concentration range and feasible application methods or limitations for BAM-FX usage. Tender,
young seedlings of multiple plant types were evaluated for the ability to tolerate a range of concentrations, treatment amounts,
and application methods of BAM-FX. The test was designed to push the product to failure points, in order to identify a safe range
for usage without phytotoxicity or other deleterious effects.



In this test, BAM-FX application
was found to be safe for use at a working concentration of 0.5 oz/gal, delivered as a soil drench, fine mist or heavy foliar spray,
and 1.0 oz/gal was safe, as long as contact with plant tissues was avoided. Due to this testing, BAM-FX application in future
field tests focused on a maximum working concentration of 0.5 oz/gal for foliar sprays (including drip or spray irrigation) and
1 oz/gal for an initial soil drench or in-furrow treatment at time of planting. Additional testing found that product concentrations
should be dramatically reduced for continuous or prolonged exposure to BAM-FX, as in the cases of hydroponics, aquaponics or other
pure-systems.



8







Early Seedling Starts
Tests



Starting seedlings from
seed represents a substantial potential customer base for BAM-FX, which would benefit from positive impacts on seed germination,
root development, and vegetative growth to generate vigorous seedlings. BAM-FX was evaluated for the ability to impact germination,
growth or biomass of tomato, broccoli and pepper in a variety of soil types, including commercially available garden soil, potting
mix, and potting mix with a commercially available soluble fertilizer, Miracle Gro.



For all three soil types,
BAM-FX-treated broccoli sprouts were the first to emerge. Broccoli showed the clearest advantage with BAM-FX, including failure
to germinate without BAM-FX in two of the tested soil types. For the three tested soil types, including broccoli, tomato, and
pepper seeds, broccoli sprouts were the first to emerge – only with BAM-FX – on day 2 after planting. The largest
tomato and pepper seedlings were observed in the BAM-FX-treated groups for two potting mixes, and pepper seedlings had significantly
greater biomass with BAM-FX in an organic garden soil. Although not all soil and plant combinations showed statistically significant
differences, this test showed that BAM-FX could have a surprising impact on the germination and growth of young seedlings. Further
work was warranted to explore the full life-cycle effect on plants receiving BAM-FX, as well as to gauge commercial seedling company
interest in BAM-FX testing.



Produce & Greens
in Small Test Plots (Illinois, Iowa, California, Florida, Utah)



A series of outdoor studies
were conducted to evaluate the effects of BAM-FX on growth of a variety of agricultural crop plants using various controlled-access
test sites (California, Florida, Illinois). Produce crops, including lettuce, tomato, pepper, cabbage, brussels sprouts, and blue
kale, as well as one herb crop, basil, were evaluated for the impact of BAM-FX on growth habit, survival, biomass and other visible
traits. BAM-FX was delivered as a soil drench and/or foliar spray, and one test site included a comparison with Miracle Gro as
a competing control. In general, prior BAM-FX results from laboratory conditions were borne out in these full-season test plots.
This series of internally directed test plot studies served a critical need to follow plant growth over a full season following
BAM-FX treatment. The work verified safe treatment concentrations for BAM-FX usage on several produce crops and validated results
for increased plant productivity in response to BAM-FX.



Commercial / External
Studies



Raspberry Field Trials



Two raspberry studies
were conducted at commercial grower sites to determine application rates and to assess the impact of BAM-FX on raspberry plants
during early season vegetative growth stage and during blooming and fruit production. Studies were conducted at commercial sites,
and BAM-FX was integrated into the commercial product application regimens (e.g. by drip irrigation). Farm management noted that
raspberry plant growth was visibly increased after BAM-FX foliar spray, as evidenced by greater early season row closure, compared
to control using standard farm practices. Raspberry plants were grown in rows with adequate room for worker use, even as the plants
become larger during the growing season and begin to “close” the gap between rows. Although it was difficult to capture
an accurate measurement of individual raspberry plant size, due to overlapping stems (dense planting rows are used for commercial
production), it was observed that the row gap between raspberry plants receiving BAM-FX was much smaller than for the control
group receiving standard treatment for the farm. This means that the tall raspberry plants treated with BAM-FX had more vegetative
growth of new stems and leaves to develop larger plants. Due to greater growth, the rows of BAM treated plants started to lean
in towards each other thus closing the walking space rows between them, in comparison to control.



Later season yield increases
at this test site showed a cumulative yield increase for the season of ~150 crates/acre with a significant estimated return on
investment for the grower. A second test site found an estimated 16.9% yield increase in total marketable fruits for BAM-FX vs
control, or 9.9% for adding BAM-FX to their standard program. BRIX levels, a measure of sugar content, also exceeded 10.00 on
average for the BAM-FX fruit on 7 pick days; control fruit BRIX score average remained below 10.



9







Overall, the raspberry
field trials validated BAM-FX usage for yield improvements and also found an effect on BRIX levels. Product usage rates also were
confirmed in this field test, including BAM-FX application integration into the standard practices at two commercial farms.



Commercial Strawberry
Field Trials (California)



Two field trials were
conducted at commercial grower sites to determine application rates and to assess the impact of BAM-FX on strawberry plants during
early season vegetative growth stage and during blooming and fruit production. Particular attention was paid to rooting activity,
since strawberry plants are transplanted bare root, and early establishment is important for not only productivity, but also for
physically holding the small plants in the loose soil of these California sites.



The first field trial
established safe application rates using spray and/or drip irrigation. Early testing showed signs of phytotoxicity (damaging,
toxic effects on a plant, which may include yellowing of plant tissue, wilting, visibly damaged plant tissue in the form of holes,
spots, lesions or other dying tissue) due to over-treatment, however plants recovered with fresh vegetative growth and went on
to fruit. The study was repeated with acceptable BAM-FX application rates, and positive results were achieved for plant establishment
– root growth was increased, crown junctions between roots and stems/leaves were thicker, and plants generated more leaves,
sooner with BAM-FX treatment. Strawberry plants receiving BAM-FX developed visibly more root mass, thus anchoring them better
in the soil (which, in this area, is important due to the wind from the ocean which tends to rip up and blow away plants that
lack solid roots). Plant junction (crowns) that run from the root system to the flowers were also thicker for BAM-FX group, enabling
the plant to carry more weight from fruit development. With BAM-FX, strawberry plants developed more flower bud clusters than
control group.



Strawberry plants receiving
BAM-FX had increased early growth, with an average of 6 crowns/plant, compared to 4 crowns/plant for control (a 50% increase).
The number of crowns leads directly to blooming and fruit production. BAM-FX product evaluation continues at these test sites,
expanding to larger acre plots for the next season.



Spinach Field Trials



A field trial at a commercial
spinach grower site was conducted to test the ability of BAM-FX to support increased crop yield with reduced fertilizer usage,
while also verifying safe and effective application rates for BAM-FX. BAM-FX was applied at time of planting and as a series of
foliar sprays. From the first week, spinach that received BAM-FX had longer, thicker roots, and larger leaves (see Figure 4).
Biomass was increased, despite a reduction in fertilizer application for the BAM-FX test rows (ranged from 17-34% reduction, depending
on fertilizer application/timing). The spinach roots were visibly greater in length and width with BAM-FX, thus enabling the plant
above ground to develop bigger stalks and leaves. Plant biomass was captured qualitatively by randomly sampling spinach plants
from treated and control groups, with BAM-FX plants being consistently larger in size, with bigger root systems and a stronger
(larger/thicker) root to stem junction at the base of the plant. The size advantage of spinach plants that received BAM-FX was
such that treated test rows appeared to be more mature plants to a neutral third-party (neighboring farm manager). For spinach,
additional biomass results in more spinach per acre harvested as the crop is the whole plant.



The spinach field trial
also aimed to test cadmium uptake in the plants for BAM-FX-treated vs control groups, since the farm was located in a high-cadmium
area (Monterey County, CA). Results were inconclusive, and further testing is required to determine any effect.



10











Figure 4: Spinach growth improved
with BAM-FX using reduced fertilizer, compared to 100% fertilizer control. Spinach receiving BAM-FX showed greater root growth
and thickness, stronger leaf-root junction at crowns, and increased leaf production, despite reduced fertilizer application compared
to control. For BAM-FX test rows, fertilizer rates were reduced as follows: 17% reduction for Pre-plant 3.5-12-14, 25% reduction
for Transplant 9-9-3-1% S, 33% reduction for two CAN-17 applications. Control group received full (100%) standard fertilization.



The spinach trial identified
BAM-FX benefits of treatment for an important, short-season crop that is planted repeatedly during the year. BAM-FX had a positive
effect on plant biomass and crop yield, even with the reduction in fertilizer rates. BAM-FX’s ability to impact yield while
allowing economic and environmental savings through fertilizer reduction – and presumably improved nutrient usage by the
plants – is the subject of upcoming grant proposals for BAM-FX agricultural applications in the UK and US.



11







DIRECTED
SELECTION



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



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



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



The Company is using the
Directed Selection platform technology to create more robust plant varieties adapted toward desirable characteristics. Our Directed
Selection research aims to produce new varieties of proprietary, patentable stem cells for plants with desirable traits like the
ability to better survive environmental challenges (i.e. temperature or climate change) or to resist disease. Adaptive
changes in the plant will be accomplished without the need for additive or subtractive genetic engineering, thus eliminating public
concerns about GMOs. The plant still uses the capabilities that are a natural part of its genetic potential, through altered gene
expression that enables adaptation toward valuable traits.



A key part of our ongoing
operations is the expansion of these patents to cover additional crops, animals and humans, and the specific methods and tools
that are developed from our research and development. The Company possesses patent applications that contain claims covering biological
processes in microgravity, including the growth of cellular plant and animal tissues in orbit, the 3-dimensional growth of biologics
on-orbit, the enhanced gene expression of biologics in extended microgravity, stem cell replication and related processes.



The second part of the
Directed Selection technology pertains to the mass replication or propagation of stem cells in space, something that can be done
on Earth but at much slower rates. Although stem cells can be produced on Earth, current methods are inadequate to create large
quantities of healthy cells in short periods of time. Our technology would allow for the increased production of healthy stem
cells. Tests which occurred over six space missions have provided initial proof-of-concept that the Directed Selection technology
allows stem cells to replicate en masse. We believe it will eventually allow us to produce large quantities of undifferentiated
pluripotent stem cells in the same environment for commercial sale to third parties.



Directed Selection
Research



A series of space microgravity
experiments were executed by means of six Shuttle flights to the ISS spanning from 2007 through 2011, linked to and supported
by the NASA Space Act Agreement entered into by ZGSI’s founder, Mr. John Wayne Kennedy. While the Space Act Agreement with
Mr. Kennedy has expired, the Company is currently in negotiations of a new Space Act Agreement with NASA on terms relevant to
the Company’s current research needs. While we do believe that we will be able to come to mutually agreeable terms with
NASA for a new Space Act Agreement, there can be no assurance that we will be able to come to an agreement or that any agreement
will be on favorable terms to the Company. Tests of chemical compounds, plant cells, and mammalian stem cells in microgravity
were conducted in conjunction with the USDA, Agricultural Research Service Labs (Beltsville, MD) and the Tropical Research and
Education Center (TREC), a division of the University of Florida.



12







Proof Of Concept Plant
Research To Develop Jatropha Biofuel Strains.



The ZGSI space research
program in-part focused on directed selection of traits in plants, using microgravity. Initial research focused on in vitro cell
culture methods for plants of interest for biofuels or valuable ornamentals. The tropical and sub-tropical plant, Jatropha curcas
(physic nut), produces an easily purified biodiesel or jet fuel, but Jatropha is intolerant of frost and subject to diseases like
root rot, leaf spot, and rust. A Jatropha cultivar with a broader climate range, improved frost tolerance, and greater disease
resistance, would be a valuable improvement to biofuel production. A parallel study of ornamentals tested an endangered orchid
species, two types of tropical flowering tree, and a common plant model organism (Figure 5). Research encompassed a series of
five flights, from 2007 through 2011, and was completed by Dr. Wagner Vendrame at TREC. Research support was provided by NASA,
BioServe Space Technologies, The Vecellio Group, and Vecenergy Corporation.







Figure 5. Plant species selected
for early microgravity research. A) Endangered orchid Encyclia plicata, B) tropical flowering tree Caesalpinia pulcherrima, C)
tropical flowering tree Tabebuia aurea, D) plant biology model organism Arabidopsis thaliana.



Plant cells from test
species were grown in microgravity aboard the ISS and returned to ground for follow-up testing. The series of experiments produced
several important results. First, the research team discovered the means to produce and propagate plant stem cells using microgravity.
Second, methods were developed to out-grow plants from microgravity stem cells. Plant cells in microgravity were able to form
pro-embryonic masses, which would enable quick regeneration of clonal plant material, in order to grow new, whole plants. Plant
cells also had increased growth, and cell cultures acquired a high stress tolerance in microgravity, based upon the ability to
recover viable cells after long-term (290 days) culture under very limited nutrient conditions. As predicted, plant cells grown
in microgravity acquired different growth characteristics and differential gene expression, compared to growth in normal gravity
conditions. Currently, proprietary Jatropha strains are in keeping at TREC.



Mammalian Stem Cell
Research In Space



Mammalian stem cell research
offers an immeasurable promise for human health, through potential means of disease treatment or cure and for tissue or organ
regeneration or repair. ZGSI scientists and collaborators recognized this valuable application of space research early on, in
2008, and used the STS-126 flight mission to attempt to grow porcine liver stem cells (PICM-19) in microgravity (1). The experiment
verified that mammalian stem cells would propagate, differentiate, and even form biliary liver structures in microgravity. Cell
viability was maintained and cell activity assays indicated that cells maintained hepatocyte detoxification function over the
test period. An early stem cell experiment, the PICM-19 work was an essential first step toward using microgravity to mass-propagate
human differentiated or undifferentiated stem cells, to accomplish a myriad of research goals.



13







Timeline and Plan of Operations



The Company’s plan
of operations for fiscal 2015 includes the production and sale of BAM-FX with ongoing technical support and product research and
development conducted through ZGLS. While we believe we can reach our goals, we cannot guarantee we will be successful. Our business
is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with
the limited capital resources currently available to us for the implementation of our business strategies. There can be no guarantee
that we will be able to obtain the necessary levels of profitability or fundraising needed to remain operational on a long-term
basis. Adequate additional financing may not be available to us on acceptable terms, or at all. If we are unable to raise capital
when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs or
any future commercialization efforts. We will need to generate significant revenues to achieve profitability and we may never
do so.



Zero Gravity Solutions, Inc.



The Company provides
general and financial administration, marketing support and strategic planning to BAM Inc. and ZGLS. In February 2015, the Company
hired a chief financial officer who will assist the Company with financial management and reporting, strategic planning and internal
control improvement. The Company also expects to hire marketing and field administration services personnel to support BAM Inc.’s
strategic operating plan during the fiscal year. Management is currently engaged in equity capital fundraising activities and
estimates the Company will require additional capital of $3,000,000-4,000,000 to fund operations through the end of 2015.



BAM Agricultural Solutions, Inc.



BAM Inc.’s focus
for 2015 is to continue in field testing and analysis of BAM-FX, develop a holistic or whole farm sales and marketing approach
to sales and service for product end users, obtain approval for product sale in additional target states, complete certain state
regulatory requirements for sales of product and generate revenue from the sale of BAM-FX.. BAM Inc. is hiring and training experienced
agricultural personnel required to introduce and sell BAM-FX to growers, end-users and distributors in their respective markets,
which currently consist primarily of independent commission based contractors



In addition, BAM Inc.
is finalizing the full-scale start-up of its principal manufacturing facility which is expected to have the capacity to fulfill
anticipated demand in fiscal 2015. We expect this facility to be at full capacity in 2015.



Zero Gravity Life Sciences, Inc.



ZGLS will execute a multi-track
research and development program related to BAM-FX, both for our space program and developing and testing new BAM-FX-based formulations
for specific crops and varying geographic soils and weather conditions.



During 2015, ZGLS expects to identify and
compete for significant grants available for agriculture as well as specific crops and food sustainability, both at the federal
and state level. Further ZGLS intends to continue to strengthen its relationships with various space agencies and space grant
related opportunities. We expect to have a new Space Act Agreement in place during the second quarter of 2015, however, there
can be no assurance that we will be able to come to an agreement or that any agreement will be on favorable terms to the Company.



Strategy for Growth



BAM Agricultural Solutions,
Inc.



The Company’s subsidiary,
BAM Inc., has been executing the commercial roll out plan for BAM-FX into the world’s agricultural markets. Following a
year of initial product testing with several universities, end product users and laboratory work, the product has now been licensed
and approved for sale in ten US states: Utah, Idaho, Iowa, Maryland, Delaware, Nevada, Arizona, Californian, Texas, and Florida.
We expect to receive approval in Georgia in 2015. The Company has focused on building a solid foundation, addressing regulatory
and compliance issues while developing “BAM Field Teams” in targeted geographic areas. The Company has received initial
commercial orders from end users (growers) and distributors, which have been manufactured, invoiced and shipped.



14







The Company is currently
establishing a strategic partner, distributor and manufacturer’s representative organization to support sales and service
of its customers. The Company’s strategic growth plans include growing the Company organically through product sales, strategic
partnerships, licensing and joint ventures. BAM-FX is initially focusing sales, marketing and distributor acquisition activities
in those states where we have satisfied the regulatory requirements for sales and whose climate allows for year round agricultural
production.



Additionally, we have
identified several crops, based upon our testing, where BAM-FX has shown a significant increase in crop yield, quality and nutritional
value. Such crops include strawberries, raspberries, alfalfa, spinach (leafy vegetables) and tomatoes, among others. We further
track the amount of acreage dedicated to a specific crop in order to prioritize our marketing and sales efforts.



Zero Gravity Life Sciences,
Inc.



ZGLS’s short to
mid-term plans includes the utilization of NASA, European, Russian and Japanese space agencies relationships to focus research
on BAM-FX as it relates to our space program applications, as well as to engage in research based upon the Company’s zero/micro
gravity intellectual property leading toward the development and patenting of unique stem cells developed on the ISS. These patentable
plant stem cell lines could lead to new global food cash crops such as rice that can grow in salt water or in drought conditions.
ZGLS will also be heavily engaged in the human regenerative medical field developing cell growth types and capabilities not possible
on the ground. This subsidiary will continue to use the physics of zero gravity, as exists on the ISS, to continue to perform
research that is not possible on Earth. We believe this may lead to positive commercial outcomes.



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



Zero Gravity Solutions,
Ltd.



ZGS UK is actively involved
in pursuing field and lab trials of BAM-FX with premier private and government research establishments. ZGS UK is also involved
in engaging lead distributors for BAM-FX throughout the EU, the largest developed agriculture market in the world. ZGS UK is enhancing
our dealings and relationships with the European and UK Space Agencies who are both actively increasing their budgets substantially
for commercial space projects. Substantial funded R&D projects and the grants associated with them are actively being pursued
and are in final stages of consideration. Our UK subsidiary is enabling our partnership with the Gates Foundation funded International
Institute for Tropical Agriculture (IITA) in Africa for testing of BAM-FX.



Sales and Distribution
Strategy



The Company is implementing
sales, marketing and distribution strategies in the United States and in selected global markets to provide effective market penetration,
sales and customer support through an internal sales and marketing organization and a network of selected, well qualified and
highly respected strategic partners.



15







During 2014 the Company began building its
internal sales and marketing organization by adding employees, sales representatives, commissioned agents and contractors with
experience in sales and marketing management, in field research and toxicology. The Company is focusing its sales and marketing
approach on whole farm planning solutions that help farmers, ranchers and land stewards better manage agricultural resources in
order to reap sustainable environmental, economic and social benefits. These solutions start with an analysis of water and soil
conditions, crop, weather and growing season, geography and other factors that affect grower and farming operations. Challenges
such as drought, soil salinity and other factors are considered, allowing BAM Inc. to deliver a directed and comprehensive BAM-FX
solution/ formulation and application methodology to the grower. We expect that our sales and marketing organization will make
significant progress introducing BAM-FX to our target markets generating sales and resultant revenue during the second half of
2015





Building a network
of strategic partners is the second portion of the Company’s 2015 sales, marketing and distribution strategy. Each of BAM
Inc.’s strategic partners will be considered a “thought leader” in the agricultural industry, have an existing
customer base and the capabilities and infrastructure to provide BAM-FX packaging, distribution and customer support. Currently,
strategic partners are operating through terms of individual purchase orders for product. Long-term strategic partner agreements
are currently being considered and negotiated. The following is the first strategic partner with which we have initiated our business
relationships.





AgriBioTech México,
S.A. de C.V



AgriBioTech México
(“ABT”) has been selected as a strategic partner to service Mexico, Guatemala and Central America. ABT is a multi-generational
Agriculture Services Company with its headquarters located in Torreón, Coahuila, Mexico. ABT offers high quality seeds
and specialized technical assistance to its agricultural customers. Among its seed offerings, ABT supplies alfalfa, corn/maize,
sorghum, grasses and oats while also providing fertilizers and soil amendment products.



ABT engaged in BAM-FX
field trials of alfalfa, cantaloupes/melons, strawberries, cauliflower, peppers, tomatoes, garlic and asparagus with very positive
and beneficial results. BAM Inc. has been working with ABT to provide collateral marketing materials and creating presentations
for ABT customers. In a joint marketing effort, BAM Inc. and ABT addressed alfalfa growers at the Alfalfa and Forage Trade Show
in December 2014 and 15 of the largest sugarcane growers from Guatemala and Central America in January 2015.



ABT and BAM Inc. are developing
a 2015 strategic plan for promotional activities, sales and marketing, order volumes and delivery dates.



In addition to establishing
strategic partners with ABT, the Company is aggressively developing additional strategic partnerships and sales opportunities
in states where the Company has been approved for sales. During December 2014, the Company commenced the process of instituting
field trials of BAM-FX in Chile and discussions with other organizations desiring to develop strategic partner relationships in
other, selected countries.



Intellectual Property



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



Patent Applications



We are the owners of several patent applications that form an important part of our immediate and future
business plans. We have been assigned or licensed the rights to these patent applications through agreements with our Director,
John W. Kennedy.



16







We are the assignee of
a portfolio of patent applications that pertain to the second-generation bioavailable mineral compositions (“BAM-FX”).
The BAM-FX composition is highly useful as a nutrient additive that enhances a plant’s immune system, may fortify against
disease and promotes growth. The basis of which is the ability of the ionized ligand system to deliver selected minerals into
a plant or other complex organism systemically at the cellular level. Our first field trials have utilized the primary ligand
formulation of copper and zinc to deliver those molecules into several crops in both the laboratory and at large in the field.
These crops have included strawberries, raspberries, corn, potatoes, tomatoes and others crops in a variety of locations. There
is a pending patent application in the United States and an international patent application filed with the World Intellectual
Property Organization. If the U.S. application is granted, the resulting patent will expire on January 15, 2024. If the foreign
applications are granted, the resulting patents will expire on May 29, 2034.





We are also the
licensee of a patent application that pertains to the use of an artificial Superoxide Dismutase (“SOD”)
compositions for the treatment of several plant and animal diseases, including amyotrophic lateral sclerosis (also known as
ALS disease). Superoxide is naturally produced by plants and animals, including humans, and its production is accelerated in
times of trauma or stress. SOD is produced by the cells to counteract the effects of an over-production of superoxide.
Adequate amounts of SOD may increase life-span in humans and may be capable of remediating (and saving) severely stressed
plants. This patent application discusses an artificial SOD that can be easily applied and used for treating over-production
of superoxide, particularly ALS and other neural disorders. The artificial SOD at issue here is less expensive to manufacture
than other artificial SODs and has a significantly lighter molecular weight. Animal and human studies of the SOD are being
discussed on an ongoing basis with NASA and academic entities. If the U.S. application is granted, the resulting patent will
expire on January 15, 2024. The plant and space radiation applications of the patent applications are being licensed to ZGSI
exclusively from Mr. John Wayne Kennedy for specialized testing and research.





ZGSI is the exclusive
assignee of a patent application directed to the replication of stems cells in a weightless environment. This patent application
contains claims covering biological processes in microgravity, including the growth of cellular plant and animal tissues on-orbit,
the three-dimensional growth of biologics on-orbit, enhanced gene expression of biologics in extended microgravity, stem cell
replication and related processes. The technology accelerates the evolution of organisms, particularly plants, to adapt the organism
to thrive in a hostile environment including cold and/or arid climates. Plants adapted using the technology show increased tolerance
for the selected hostile environment relative to traditional plants. Specific applications include the development of food crops
that are tolerant of cold climates (e.g. frost resistant crops) and arid environments (drought resistant crops). A key part of
our ongoing operations is the expansion of this technology to cover additional crops, animals and eventually humans, and the specific
methodologies and tools that are developed from our R&D. If granted, the patent will likely expire in November 2026 plus any
applicable term adjustment. It is therefore a part of our technology that holds much promise and, from a commercial standpoint,
falls into the medium to longer term plans of the Company.



Trade Secrets



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

Trademarks



In 2014, we filed trademark
applications to protect “BAM-FX” and “Unlocking Nutrition for the World” which are currently pending.
We also hold a number of other common law trademarks that we may register in the future.



Strategic Relationships



| | 1. | UC Davis, Department of Land,
                                         Air & Water Resources: The Company is currently conducting field trials of BAM-FX
                                         initially with walnut trees in conjunction with the Department of Land, Air & Water
                                         Resources at the University of California, Davis.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



17







| | 2. | In April 2014, a Memorandum of
                                         Understanding (“MoU”) was signed between ZGS UK and the International Institute
                                         of Tropical Agriculture (“IITA”). The IITA is an African international not-for-profit
                                         research organization organized in 1967. It is considered one of the world's leading
                                         research partners in finding solutions for hunger, malnutrition, and poverty. Their research
                                         and development addresses the economic development needs of tropical countries by working
                                         with partners to enhance crop quality and productivity, reduce producer and consumer
                                         risks, and generate wealth from agriculture. Notable investors in the organization include
                                         the Bill & Melinda Gates Foundation, the Rockefeller Foundation, the World Bank and
                                         the United States Agency for International Development (“USAID”). We believe
                                         that this relationship could lead to significant business opportunities as we execute
                                         our business plan.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The MoU summarizes IITA and ZGS
UK’s present vision of collaboration between the parties and is intended to facilitate discussions regarding key objectives
to be described in future agreements. No financial commitment is detailed under the MoU, but the parties agree to encourage the
existing exchange of scientific information, research, and personnel between the parties, and the development of specific cooperative
programs and projects, from which any publications would give credit to the contributions of parties, among other items. The MoU
was dated April 17, 2014 and continues for a term of five years.



| | 3. | NASA – The Company, through
                                         its relationship with John Wayne Kennedy, was a party to a Space Act Agreement (“SAA”)
                                         between Mr. JW Kennedy’s wholly owned entity, Zero Gravity, Inc., and NASA Ames
                                         Research Center (“ARC”) that recently expired, and is currently in negotiation
                                         of a new SAA between ARC and the Company, updated for the Company’s current research
                                         needs. These SAAs are of importance to both supporting NASA’s missions and to the
                                         business of ZGSI. The goals of this partnership are as follows:
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a. | Establish the physiological basis
                                         for the action of BAM-FX on plant performance, evaluate the potential utility to commercial
                                         agriculture, space biology, and study the effects on plant growth in sealed Advanced
                                         Life Support Incubators at NASA ARC. In addition, on orbit research will be conducted
                                         aboard the ISS for controlled tests in microgravity;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b. | Investigate how ingested ZGSI’s
                                         BAM-FX treated bio-fortified crops and Zn/Cu skin salve cream may serve as immune system
                                         boosting and antioxidant counter measures for inhibiting space radiation induced cancers;
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c. | Conduct small satellite plant growth
                                         experiments to investigate the effects that the Company’s products have on enhancing
                                         seedling germination and plant growth on the moon; and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d. | Conduct ground and space experiments
                                         using the Company’s Directed Selection technology to study the resulting changes
                                         in the cell lines and any resulting new unique plant cultivars.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The Company expects to be the primary
party to the new SAA. While we do believe that we will be able to come to mutually agreeable terms with NASA for a new SAA, there
can be no assurance that we will be able to come to an agreement or that any agreement will be on favorable terms to the Company.



| | 4. | Intrinsyx Technologies Corporation
                                         (“Intrinsyx”) is an engineering and information technology services company
                                         that has delivered innovative, high-performance IT solutions for space systems and payloads
                                         to NASA for over 11 years. Intrinsyx is an important collaborator in our third-party
                                         funded field trials of our BAM-FX formulation. We expect that Inrinsyx will also liaise
                                         locally with NASA in order to support our continued access to NASA-funded research and
                                         development on the ISS.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | The Tropical Research and Education
                                         Center of the University of Florida Institute of Food and Agricultural Sciences located
                                         in Homestead (“IFAS/TREC”) has conducted field trials on BAM-FX on multiple
                                         crops. TREC was the primary investigator during five trails of our Directed Selection
                                         technology on flights to the ISS.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18







| | 6. | The Center for the Advancement
                                         of Science in Space (“CASIS”) is the new NGO responsible for the management
                                         of the United States’ portion of the ISS, which has been designated as a national
                                         laboratory. CASIS’ mandate from Congress is to commercialize and fully utilize
                                         the unique capabilities of the ISS. The Company is currently negotiating two agreements
                                         with CASIS. The non-funded agreement provides the Company laboratory space, transport
                                         to and from the ISS, access to all modules of the ISS and astronaut time. These services
                                         would be provided to ZGSI free of charge. The funded agreement would provide all services
                                         of the non-funded agreement and in addition, will provide specific non-dilutive financing
                                         on a project-by-project basis.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 7. | In mid-2014, ZGSI and Utah State
                                         University/Space Dynamics Laboratory (“USU”) formed a research and development
                                         partnership to test and evaluate the ground-based and space-based application of BAM-FX
                                         on a variety of high value agricultural crops. The ground-based investigations are being
                                         conducted in the USU greenhouse and field laboratories by faculty and staff from the
                                         USU Department of Plants, Soils and Climate. The space-based investigations will involve
                                         key researchers and facilities from SDL and will be conducted on planned space flights
                                         (2015 and 2016) to the ISS.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | 8. | AgriBioTech México – The relationships between
BAM Inc. and our master-dealer is described above.
| | -- | -------------------------------------------------------------------------------------------------





Government Regulations



Although BAM-FX product is different than most fertilizers available, we believe that most state regulatory
agencies will require us to register as a fertilizer. The BAM-FX product has recently been registered and issued a license as a
liquid fertilizer by the State of California. California is considered one of the most difficult states to gain such registration,
and may establish strong precedent for other states to allow such registration of BAM-FX’s product. The Company also intends
to pursue registration of the BAM-FX product as an organic fertilizer. The Company does not make any claims that BAM-FX is a fungicide,
bactericide or pesticide, including the related patent applications, thus alleviating most regulatory oversight. All ingredients
in the formulation are categorized as Generally Regarded as Safe (“GRAS”) by the United States Food and Drug Administration
(“USFDA”).



With our Directed Selection
technology utilized in the creation of new varieties of an existing plant’s stem cell with unique characteristics, the resulting
plant is developed exclusively through differential gene expression by exposure of the indigenous genome of the original plant
to microgravity. No foreign DNA or genetic material is added or introduced to the genome, thus it is not considered to be a GMO
and the Company believes that it would likely not fall under regulations that GMOs face. We believe that plants developed with
Directed Selection technology would be regulated by the USFDA as are other non-genetically modified plants and we do not expect
regulation to significantly impact our business plan.



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



We expect that any products
utilizing our Superoxide Dismutase (SOD) patent license will be subject to regulatory control. At this time we have not completed
research or development efforts to identify a product subject to regulatory control.



Competition



There are more than 700
major fertilizer manufactures worldwide. Of those , approximately 80% manufacture a fertilizer including nitrogen. As a standalone
product, BAM-FX will compete with these fertilizers or become a supplemental treatment with an additional application. We believe
that our product can create improved end product value exceeding the cost of BAM-FX. BAM-FX is engaged in laboratory and agricultural
field testing. Preliminary data suggest that the positive effects of BAM-FX applications to all plants tested has made them healthier
and more robust and productive.



19







The BAM-FX formula can
be integrated into existing formulated, liquid fertilizers as an additional ingredient. Lab and field research indicates that,
by blending BAM-FX with existing, widely distributed, “branded” products, we could become a major supplier to nitrogen
based fertilizer producers as well as organic fertilizer producers making their way into the marketplace. BAM-FX works synergistically
with and greatly improves other fertilizer products and therefore we could become a significant ingredient supplier to major companies
with existing wide distribution. We are not aware of a direct competitor utilizing this business strategy.



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



Competitive Advantage/Barriers
to Entry:



The Company believes
that ZGSI has adequately protected its intellectual property and has developed strong, professional and industry recognition and
relationships which provide it a positive competitive position



| | · | Manufacturing
                                         methods for BAM-FX ionic mineral delivery system are trade secrets which would be cost
                                         prohibitive and time consuming to reverse engineer. This proprietary and confidential
                                         method of manufacturing has been developed and refined over two decades of trial and
                                         error. Additionally, attempting to manufacture BAM-FX without the customized manufacturing
                                         machinery and methodology could pose a physical safety hazard.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | Through
                                         our officers and scientists, we have access to the International Space Station as and
                                         when needed.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | ZGSI
                                         has a world-class science team working in conjunction with IFAS/TREC that accomplished
                                         several space shuttle flights and subsequent space flights that continued to study stem
                                         cell science on the Shuttle, ISS-National Lab missions.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | We
                                         enjoy a close working relationship with the USDA Agriculture Research Services Labs,
                                         UC Davis, Utah State University, IFAS/TREC and other recognized agricultural industry
                                         leaders and academic institutions.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The Company has
an experienced management team with many years in industry, business operations, corporate finance, intellectual property development
and protection as well as a world-class scientific and senior advisory boards.





Reports to Security Holders



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



20







| | ITEM 1A. | RISK
                                         FACTORS
| | -------- | -----------------------------------------------------



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



ITEM
1B. UNRESOLVED STAFF COMMENTS



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



| | ITEM 2. | PROPERTIES
| | ------- | ----------



The Company leases office
space located at 190 N.W. Spanish River Blvd, Suites 101/102, Boca Raton, Florida 33431 for a monthly rate of $4,960. ZGSI also
maintains/leases a manufacturing lab located at 3595 N. Dixie Highway, Bay 1, Boca Raton, FL 33431. BAM Agricultural Solutions,
Inc. maintains/leases its manufacturing facility located at 1461 NW 25th Drive, Okeechobee, FL 34972. Additionally,
our wholly owned subsidiary, ZGS UK, leases office space at Electron Building, Fermi Avenue, Harwell Oxford, Oxfordshire, OX11
0QR, UK.



| | ITEM 3. | LEGAL
                                         PROCEEDINGS
| | ------- | ----------------------------------------------------------



There are presently no material pending legal
proceedings to which the Company, or any of its subsidiaries, is a party or as to which any of its property is subject, and no
such proceedings are known to the Registrant to be threatened or contemplated against it.



| | ITEM 4. | MINE
                                         SAFETY DISCLOSURES
| | ------- | ----------------------------------------------------------------



Not applicable.



PART II



| | ITEM 5. | MARKET
                                         FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
                                         SECURITIES
| | ------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Market Information.



Our common stock is presently quoted on the
OTC Pink Market under the symbol “ZGSI”, although there has not been an active trading market for the shares. Accordingly,
we are not including a history of reported trades in the public market because of the limited and sporadic trading. There
have been less than 14,000 shares traded in the past 12 months.



Holders







As of March 20, 2015,
there were 213 record holders of an aggregate of 33,476,597 shares of the Common Stock issued and outstanding.







Dividends



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



(d) Securities Authorized
for Issuance under Equity Compensation Plans.



21







The Company does not have an equity compensation plan.



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



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



| | (1) | From March 2013 until February
                                         27, 2015, the Company has participated in a continuous offering of up to 8,000,000 of
                                         its shares of Common Stock to accredited and non-accredited investors, under which investors
                                         may purchase shares for a purchase price equal to $0.50 per share. Under this offering,
                                         the Company has issued 8,896,594 shares and received a total of $4,448,297.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (2) | During the years ended 2011 through
                                         2013, the Company participated in an offering in which it issued 900,000 shares of Common
                                         Stock to certain employees, officers, consultants and advisors for a purchase price equal
                                         to the shares’ par value ($0.001) for a total received of $900.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





| | (3) | On December 3, 2012, the Company
                                         issued 11,500,000 shares of common stock to John Wayne Kennedy, our director, in connection
                                         to the acquisition of the patents related to our BAM-FX and Directed Selection technology,
                                         having a fair value of $11,500 ($0.001/share) based on the most recent cash offering
                                         price. The Company issued these shares of Common Stock under the exemption from registration
                                         Section 4(a)(2) of the Securities Act.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | During the year ended December
                                         31, 2013, the Company issued 50,000 shares of common stock to Intrinsyx Technologies
                                         Corporation for services at $0.50/share, having a fair value of $25,000 in connection
                                         to the operation of the research trials of our BAM-FX product.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | During the year ended December
                                         31, 2014, the Company issued 555,000 shares of common stock to employees for services
                                         having a fair value of $277,500 at $0.50 per share. The Company also issued 250,000 shares
                                         of common stock to a Robert Carter for services having a fair value of $125,000 at $0.50
                                         per share.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (6) | In February-March 2015, the Company issued 200,000 fully vested, non-forfeitable warrants to Michael Smith
for his service as a director having a fair value of $92,479 and, in connection to his service as the Company’s Chief Financial
Officer, 100,000 shares of the Company’s common stock to Timothy A. Peach, along with cashless warrants to purchase 200,000
shares of the Company’s common stock at an exercise price of $0.50 with a term of five years.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



No underwriters were involved in the
foregoing issuances of securities. Each of the above transactions were exempt from the registration requirements of the Securities
Act in reliance upon Section 4(a)(2) of the Securities Act or Regulation D promulgated under the Securities Act. The recipient
of the securities in each of these transactions represented his, her or its intentions to acquire the securities for investment
only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon
the stock certificates or book-entry positions representing the shares issued in each of these transactions. In each case, the
recipient had adequate access, through his, her or its relationship with the Company, to information about Company.



| | ITEM 6. | SELECTED
                                         FINANCIAL DATA
| | ------- | ----------------------------------------------------------------



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



22







| | ITEM 7. | MANAGEMENT'S
                                         DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
| | ------- | ------------------------------------------------------------------------------------------------------------------------------



You should read the following discussion
of our financial condition and results of operations in conjunction with financial statements and notes thereto included elsewhere
in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the forward-looking statements. You should know that there are
many factors, both within and outside our control that could cause actual results to differ materially from the results described
in or implied by the forward-looking statements contained in the following discussion and analysis. The forward-looking statements
contained in this report are made as of the date of this report, and we do not assume any obligation to update any forward-looking
statements except as required by applicable law.



Overview



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





The Company is focused
on implementing a near-term revenue generation plan through the introduction of the Company’s first commercial product, BAM-FX,
to the world’s agricultural markets. The Company conducted field trials on a variety of crops in laboratory and academic
settings as well as in field applications on grower/end-user crops during 2014. These trials showed exceedingly positive results
including a significant increase in yield, quality and nutritional value in a variety of crops. As a result of the successful trials,
the Company opened a manufacturing facility during the fourth quarter of 2014 to supply expected product demand and began the commercial
roll out of BAM-FX into the world’s agricultural markets. To support its commercial efforts, the Company has hired or contracted
with qualified personnel for sales and marketing support, in field test research and toxicology services.





During 2014, we separated
our business activities between three wholly owned subsidiaries to separate out our business activities. ZGS UK is incorporated
in England and is in charge of our European activities. BAM Inc. produces and sells our BAM-FX product, while ZGLS is responsible
for our space research projects and conducting research on future BAM product lines. We believe that the separation of these functions
and the corresponding allocation of management by expertise will enable us to improve our production and focus on our different
business activities.



Although we have started
product sales we anticipate that in the near term, ongoing expenses, including the costs associated with future preparation and
filing of SEC reports, will be paid for by proceeds from sales of our securities and anticipate the need for an additional offering.



We have generated only
minimal revenues from our operations thus far. We cannot guarantee we will be successful in our business operations. Our business
is subject to risks inherent in the establishment of a new business enterprise, including the financial risks associated with
the limited capital resources currently available to us for the implementation of our business strategies. To become profitable
and competitive, we must execute on our 2015 business plan.



23







Results Of Operations



Revenue for the year
ended December 31, 2014 was $11,218 and no revenue was recognized during the year ended December 31, 2013. In the third quarter
of 2014, the Company recognized revenue on initial sales of its commercial product, BAM-FX. Cost of revenue for the year ended
December 31, 2014 was $2,609, which consists primarily of cost of raw materials.



General and administrative
expense increased by $1,597,003 to $2,741,172 for the year ended December 31, 2014 compared to $1,144,169 for the year ended December
31, 2013, or 140%. The increase in general and administrative expense is due primarily to an increase in headcount and resulting
personnel related costs and an increase in consultant expenses for financial advisory, sales and marketing and technical services.
Noncash equity based compensation paid consultants included in general and administrative expense was $877,841for the year ended
December 31, 2014 compared with $313,940 paid in the prior fiscal year, an increase of $563,901.



Research and development
expense increased by $112,079 to $128,194 for the year ended December 31, 2014 from $16,115 in the prior fiscal year. The primary
reasons for the increase in fiscal 2014 are consulting services paid for test and production of BAM-FX and expenses for research
performed by numerous academic institutions.



Interest expense was
$3,951 for the year ended December 31, 2014, an increase of $2,251 compared with $1,700 in the prior fiscal year due to an average
increase of related party loans provided the Company during the current fiscal year. The loans bear interest at a rate of 10% per
annum. The loans are cash advances from shareholders to pay operating expenses. The loans are unsecured and due and payable upon
demand.



Our net loss for the
year ended 2014 was $2,864,327 compared to $1,158,969 for the year ended 2013, an increase of $1,705,358 primarily as a result
of the increase in general and administrative expenses and research and development expenses during the current fiscal year.







Liquidity And Capital Resources



We expect to incur significant expenses and increasing operating losses for the foreseeable future. Specifically,
we estimate that the research and development and related costs associated with the execution of our 2015 business plan will be
approximately $220,000-250,000 per month, an increase in connection with our ongoing activities. Our Registration Statement became
effective in February 2015. We expect to incur additional costs associated with operating as a fully reporting public company,
which we expect will total approximately $165,000 during the initial twelve month period. Accordingly, we have acknowledged the
need to obtain additional funding in connection to the operation of the Company and have continued to raise funds through our current
offering, which closed during February 2015. Adequate additional financing may not be available to us on acceptable terms, or at
all. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our
research and development programs or any future commercialization efforts. We will need to generate significant revenues to achieve
profitability and we may never do so.



Fundraising



On February 27, 2015, we closed our Private Placement Memo having raised $4,448,297 through that date
and issuing 8,896,594 shares of unregistered common stock. The Company intends to commence one or more offerings in 2015 to assist
in the funding of its operations.



24







Although the Company believes it will successfully raise funds required to continue operations under the
additional offerings, we cannot guarantee that our fundraising efforts will be successful or if funds are raised, those funds will
be available in time and be sufficient to execute on our fiscal 2015 business plan.



Cash on Hand



As of December 31, 2014,
the Company had a cash balance of $253,677.



Use of Cash



Net Cash Used in
Operating Activities



Net cash used in operating activities of $2,153,272 for the year ended December 31, 2014 consists primarily
of a net loss of $2,864,327, an increase in prepaid expenses of $213,781 offset by noncash expenses including $427,500 of common
stock issues for services, $588,205 of warrants issued for services and an increase in accounts payable and accrued liabilities
of $11,046.



Net cash used in operating
activities of $695,965 for the year ended December 31, 2013 consists primarily of a net loss of 1,158,969 offset by noncash expenses
including $25,000 of common stock issued for services, $288,940 of warrants issued for services and an increase in accounts payable
and accrued liabilities of $141,039.



Net Cash Used in
Investing Activities



For the year ended December
31, 2014, cash used in investing activities included $45,835 for purchase of equipment. During the fiscal year 2013, no net cash
was used in investing activities.



Net Cash Provided
by Financing Activities





For the year ended December 31, 2014, net
cash provided by financing activities if $2,161,696 consists of $2,182,799 proceeds from the sale of common stock and proceeds
of $109,137 from notes payable, offset by $30,000 repayment of relate party notes payable and $95,750 payment of common stock offering
costs.







For the year ended December
31, 2013, net cash provided by financing activities of $988,900 consists of $1,012,600 proceeds from the sale of common stock
and $35,000 proceeds from notes payable from a related party offset by $58,700 of payment of common stock offering costs.



Required Capital Over the Next Fiscal Year



Outlook



We do not believe that
we can accurately predict revenues and cash flow at this time due to the fact that our product is new. We will need additional
funding to cover 2015 expenses. Without consideration of any revenue or additional fundraising, at the Company’s current
rate of expenditure, we estimate that our current capital will be sufficient to cover our operating costs through the end of May
2015. We anticipate the need to raise an additional $2,000,000 million to fund our operations through the end of 2015. Our long-term
fundraising needs are currently undetermined due to the uncertain nature of our revenues, but our current projections show that
our operations should be fully self-sufficient by September 2015.



25







Critical Accounting Policies and Estimates



For a discussion of our accounting policies
and related items, please see the Notes to the Financial Statements, included in Item 8.



| | ITEM 7A. | QUANTITATIVE
                                         AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
| | -------- | ---------------------------------------------------------------------------------------------------



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



| | ITEM 8. | FINANCIAL
                                         STATEMENTS AND SUPPLEMENTARY DATA
| | ------- | ------------------------------------------------------------------------------------



See “Index to Consolidated Financial
Statements and Financial Statement Schedule” at the end of this Annual Report on page [F-1] for information required by
this Item 8.



| | ITEM 9. | CHANGES IN AND
                                         DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
| | ------- | -----------------------------------------------------------------------------------------------------------------------------



There are not and have not been any disagreements
between the Registrant and its accountants on any matter of accounting principles, practices or financial statement disclosure.



| | ITEM 9A. | CONTROLS
                                         AND PROCEDURES
| | -------- | ----------------------------------------------------------------



Evaluation of Disclosure Controls and Procedures





As of the
end of the period covered by this report (the “Evaluation Date”), we carried out an evaluation, under the supervision
and with the participation of our management, including ourPrincipal Executive Officer and Principal Accounting Officer
(our Chief Executive Officer and Chief Financial Officer, respectively), of the effectiveness of
the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). Based upon this evaluation, our Chief Executive Officer concluded that, as of
the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information
required to be disclosed in the reports that are filed or submitted under the Exchange Act is recorded, processed, summarized,
and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and that our disclosure
controls and procedures are designed to ensure that information required to be disclosed in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management including our Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required disclosure.







Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that the Company’s disclosure controls and procedures
will detect or uncover every situation involving the failure of persons within the Company to disclose material information otherwise
required to be set forth in the Company’s periodic reports.



Management’s Annual Report on Internal
Controls over Financial Reporting



The Company’s management is also responsible
for establishing and maintaining adequate internal control over financial reporting 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. The Company’s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect our transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary
to permit preparation of the financial statements in accordance with U.S. generally accepted accounting principles, and that our
receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) 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.



26







Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



In connection with the preparation of our
annual financial statements, management has undertaken an assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2014 based on the framework in Internal Control—Integrated Framework (“1992 Framework”)
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Management’s assessment included
an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of those
controls.



Based on this evaluation, under that framework,
management has concluded that our internal control over financial reporting was not effective as of December 31, 2014. We concluded
that we have material weaknesses in our internal control over financial reporting because we do not have an adequate segregation
of duties due to a limited number of employees among whom duties can be allocated. The lack of segregation of duties is due to
the limited nature and resources of the Company.



This annual report does not include an attestation
report of the Company’s registered public accounting firm regarding internal controls over financial reporting. Management’s
report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities
and Exchange Commission that permit the Company to provide only management’s report in this annual report.



Changes in Internal Controls



There have been no changes in our internal
controls over financial reporting that occurred during the our last fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.



| | ITEM 9B. | OTHER INFORMATION
| | -------- | -----------------



Not applicable.



27







PART III



| | ITEM 10. | DIRECTORS,
                                         EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
| | -------- | -----------------------------------------------------------------------------------------------



The following table sets forth certain information about our executive
officers, key employees and directors:





|Name                    |  | Age |  | Position                                                                                                   
|----------------------- |  | --- |  | -----------------------------------------------------------------------------------------------------------
|Harvey “Kaye” Klebanoff |  | 74  |  | Chairman of the Board of Directors of the Company,                                                         
|Hugh Chambers           |  | 59  |  | Managing Director, ZGS UK                                                                                  
|Edward Cowle            |  | 58  |  | Director of the Company                                                                                    
|Lisa H. Gainsborg       |  | 49  |  | Vice President, Finance and Treasurer                                                                      
|Richard Godwin          |  | 59  |  | Director of the Company; President, Chief Executive Officer of ZGLS                                        
|John W. Kennedy         |  | 74  |  | Director and Chief Science Officer of the Company                                                          
|Patrick Kennedy         |  | 72  |  | Director and Vice President of Agricultural Business Development of the Company                            
|Timothy A. Peach        |  | 63  |  | Chief Financial Officer of the Company                                                                     
|Michael T. Smith        |  | 71  |  | Director of the Company                                                                                    
|Glenn A. Stinebaugh     |  | 68  |  | President, Acting Chief Executive Officer of the Company; President and Chief Executive Officer of BAM Inc.
|H. Deworth Williams     |  | 79  |  | Director of the Company                                                                                    







Harvey “Kaye” Klebanoff, Chairman of the Board of
Directors of the Company

Mr. Kaye has served as our Chairman since
the Company’s inception as its current form in December of 2012. From March 2009 to January 2012, Mr. Kaye was founder,
Chairman, Chief Executive Officer and President of Latitude Solutions, Inc. Latitude Solutions, Inc., a publicly traded holding
company for several subsidiaries, provided products, processes and services for contaminated water applications. Prior to founding
Latitude Solutions, Mr. Kaye was Chief Executive Officer and President of Gulfstream Capital, L.C., a merchant banking, consulting
and financial advisory organization, which provided advisory and corporate finance, services to both public and private companies.
Gulfstream has acted in a merchant banking, financial advisory and strategic planning capacity for numerous corporations, both
public and private. Mr. Kaye has a BS in business from Temple University. Harvey Kaye also serves as a director of Angstrom Technologies,
Inc.



Mr. Kaye is well qualified to serve as the
Chairman of Board due to his extensive experience in the management and operation of public and private companies, both large
and small, and his previous leadership experience as an entrepreneur, investment banker, chairman, chief executive officer and
director.



Hugh Chambers, Managing Director, ZGS UK

Mr. Chambers has been the Managing Director
of ZGS UK since July 2013. He formally became a full-time employee on January 1, 2014 and started the business of ZGS UK from
that date. He served as a Consultant to the UK located Association for Interactive Media and Entertainment (AIME) from March 2008
to June 2013, and was CEO of Fresh Telemedia Ltd (UK) from February 2011 to June 2013. He was Director of Sales and Marketing
for SGA Limited (UK) from November 2008 to February 2009 and CEO of In Touch Networks and Technologies (UK) from January until
August 2008. He was a Director and President of Network for Online Commerce Ltd (UK) from January 1996 until July 2009 by which
time the organization had reformed into AIME. He was elected a Fellow of the Institute of Directors in May 1987.



28







Edward F. Cowle, Director of the Company

Mr. Cowle has been a Director of the Company
since December 2012. Mr. Cowle has been a director and former CEO of US Rare Earths, Inc. (Delaware), a company that U.S. Rare
Earths, Inc. (Nevada) acquired in August 2011, and its predecessor Thorium Energy, Inc., since 2007. USRE is an exploration and
development company with rare earth and thorium deposits in Idaho and Montana. Mr. Cowle was a founder, and remains a Director,
and principal of Laser Technology, Inc., which produces laser based law enforcement speed guns. Mr. Cowle has also worked closely
with the Office of Industrial Liaison at New York University Medical School, investing in and incubating several technologies.
Mr. Cowle structured a licensing deal with C. R. Bard for a start-up company that he co-founded with Temple University Office
of Technology Development and Commercialization. He was a founding shareholder and investor in Biophan Technology and worked closely
with management to develop business, financing, and investor awareness. The company subsequently licensed and sold its technology
to Boston Scientific and Medtronic and the core products are currently being sold to the medical community. Mr. Cowle was a founder
of Golf Technologies, Inc., the owner and manufacturer of the “Snake Eyes” brand of golf equipment and apparel. The
company was bought by Golfsmith who currently sells the Snake Eyes line of products.  Mr. Cowle formerly served as Senior
Vice President Investments–Paine Webber and Co. and Vice President-Bear Stearns and Co. He graduated from Fairleigh Dickinson
University in 1978 with a BA in English and American studies



We believe Mr. Cowle is well qualified to
serve as a member of the Board due to his extensive experience starting, financing and advising successful small businesses and
the financial acumen he gained from his experience serving in the financial industry.





Lisa H. Gainsborg, Vice President of
Finance and Treasurer of the Company

Ms. Gainsborg joined ZGSI in 2014 and has
28 years of accounting system implementation and integration experience. She has been the president of A+ Accounting since 2003,
where she provided financial management, accounting, budgeting and tax services for commercial clients. Ms. Gainsborg graduated
from Hofstra University with a B.B.A. in accounting and is a registered C.P.A.



Richard Godwin, Director of the Company, President and Chief
Executive Officer of ZGLS

Richard Godwin has been a Director since the
Company’s inception at the end of 2012. Prior to that he was invited by Mr. John Wayne Kennedy to accept the position of
ZGSI CEO, which he accepted in 2012 along with the position of President. He was appointed to that position by unanimous vote
of the Board of Directors and has served in those two positions until October 2014 where he accepted the positions of CEO and
President of ZGLS. ZGLS takes lead on all company R&D for both our Directed Selection work with NASA and ESA, as well as continuing
ongoing R&D for our BAM products before handoff to the new BAM Inc. subsidiary. ZGLS will also be working towards development
of short, medium and long-term revenue new products being developed utilizing our substantial patent and IP stable, something
that Mr. Godwin has been managing for the past two years within ZGSI. Prior to 2012, Mr. Godwin was President of Third Millennium
Affiliates, a technology development company where his primary clients were as business development specialist and consultant
for SpaceX Corporation of Hawthorne CA’s new DragonLab spacecraft and as President of AlumiGen a privately held energy company
created by Dr. Robert Hirsch, previously a senior manager at the DoE and senior adviser to SAIC and the RAND Corporation. For
the past 21 years Mr. Godwin has also held the long time position of President of Collectors Guide Publishing and Apogee Books,
a Canadian book publisher based in Toronto. He has 35 years’ experience in managing new companies in Europe, the United
States and Canada.



We believe Mr. Godwin is well qualified to
serve as a member of the Board due to his breadth of knowledge of the space exploration and policy fields, as well as his extensive
entrepreneur experience.



John W. Kennedy, Founder, Chief Science Officer & Director
of the Company

John W. Kennedy has been with ZGSI since its
inception as the current company in 2012 and was instrumental in its creation. He has 40 years’ experience in applied research,
botany, biology, physics, nutrition, biochemistry and discoveries associated with health, disease, plant and biological sciences
and technologies. Mr. Kennedy has been operating John W. Kennedy Consultants, Inc. since November 1979, which represents companies
and associations in clearance and registration of pesticides at federal and state agencies. Mr. Kennedy is also president and
chairman of Axtel Scientific, Inc., a Nevada corporation, established October 18, 2012, which was licensed by Mr., Kennedy’s
IP to commercialize a unique modality for mitigation of several cellular devastating diseases. Zero Gravity Incorporated was a
former company owned by Mr. Kennedy that collaborated through a Space Act Agreement with NASA on six space shuttle launches carrying
experiments to the International Space Station for plant and animal studies. This corporation was discontinued shortly after the
incorporation of ZGSI. Mr. Kennedy holds a Bachelor of Science degree in Botany and Natural Science from University of Wisconsin.
He has received additional educational credits at the United States Dept. of Agriculture Graduate School in New York, NY with
advanced studies in the Biological Sciences. He was also awarded a Space Act Agreement with NASA and is considered a National
Lab Pathfinder for his work on plant and human stem cells.



29







Mr. Kennedy was selected to serve as a member
of the Board due to his experience in applied research, botany, biology, physics, nutrition, biochemistry, as well as his extensive
knowledge of the Company’s technologies and products.



Patrick Kennedy, Director and Vice President
of Agricultural Business Development of the Company

Mr. Kennedy has been with ZGSI in his current
positions since its inception in its current form in December 2012. Mr. Kennedy is also a consultant, currently managing public
relations coordination, data, websites and collateral material for The Williams Investment Companies. From May 2000 to June 2007
Mr. Kennedy was the President of American Natural Technology Sciences, Inc. Mr. Kennedy has forty-five years of business experience
involving a wide range of skills, including business development, trade, finance, marketing and sales. He has negotiated, marketed
and consummated over one billion dollars of sales volume. Patrick possesses valuable industry contracts and has been directly
responsible for negotiations and structuring of marketing and product distribution. From 1977 to 2000 Mr. Kennedy successfully
owned and operated oil companies. Patrick also serves as director of Axtel Scientific, Inc. and Mitigation of Disease, Inc. He
previously served as director of Digital Stream, Inc.



We believe that Mr. Kennedy is well qualified
to serve as a member of the Board due to his extensive understanding of business development and marketing, as well as his significant
experience working in and with businesses, large and small.



Timothy A. Peach, Chief Financial Officer
of the Company

Mr. Peach has served as the Company’s
Chief Financial Officer since February 2015. From 2008 until 2014, Mr. Peach served as Chief Financial Officer, Executive Vice
President, and Vice President of Finance of Oncure Medical Corp., a radiation oncology treatment center management company located
in Englewood, CO. From 2004 until 2008, Mr. Peach served as Chief Financial Officer and Vice President of Finance for VISTA International
Technologies, Inc., a waste to energy technology company. He served as an SEC and compliance consultant to growing companies from
2003-2004 and was the Vice President Finance and Chief Accounting Officer/Controller at Convergent Group Corp. from 1998 until
2002. Prior to 2002, he earned his CPA at PricewaterhouseCoopers and held a variety of senior financial and advisory positions
at Executive Telecard, Ltd., Kaire International and Telectronics Pacing Systems, Inc. Mr. Peach received his MBA from the University
of Pittsburgh. Our Board believes Mr. Peach’s qualifications to serve as our Chief Financial Officer include his extensive
financial and operations experience earned in both early stage and established companies.



Michael T. Smith, Director of the Company

Mr. Smith joined the Company’s Board
of Directors in February 2015. He is the former Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation,
having served from October 1997 to May 2001. From 1985 until 1997 he served in a variety of capacities for Hughes, including Vice
Chairman of Hughes Electronics, Chairman of Hughes Missile Systems and Chairman of Hughes Aircraft Company. Prior to joining Hughes,
he spent nearly 20 years with General Motors Corporation in a variety of financial management positions. Mr. Smith is currently
a director, Chair of the Nominating and Governance Committee and Audit Committee member of Teledyne Technologies Incorporated,
which provides enabling technologies for industrial growth markets. He also serves as a director for WABCO Holdings, Inc., which
provides electronic and electromechanical products for the automotive industry and FLIR Systems, Inc., which produces infrared
cameras, thermal imaging software and temperature measurement devices. He previously served as a director of ATK Alliant Techsystems,
Inc., an advanced weapon and space systems company, from 1997 to 2009, Anteon International Corporation, an information technology
and systems engineering solutions company, from 2005 to 2006, Ingram Micro Corporation, a technology sales, marketing and logistics
company from 2001 to 2014. Mr. Smith holds a B.A. Degree in Political Science from Providence College and an MBA from Babson College
and served as an officer in the United States Army.



30







We believe Mr. Smith brings strong financial
skills that are important in the understanding and oversight of our financial reporting and corporate governance matters, along
with expertise in corporate governance, enterprise risk management and strategic planning, which we believe qualify him provide
guidance as a Director to the Company



Glenn A. Stinebaugh – President and
Acting Chief Executive Officer of the Company; President and Chief Executive Officer, BAM Inc.

Mr. Stinebaugh has served as our President
and Active Chief Executive Officer since November 2014 and Chief Executive Officer of BAM Inc., our subsidiary since October 2014.
Prior to this, he served as an Advisor to the Chairman of the Board of Zero Gravity Solutions, Inc. From February 2010 to August
2014 he was Managing Member of MGA Holdings, LLC, developing and initiating sustainable economic development and agricultural
initiatives, domestically and internationally. From July 2007 to August 2014 Mr. Stinebaugh also served as Secretary for First
America Equity Trust, a Real Estate Investment Trust developing renewable energy initiatives, with a focus on biomass-to-energy
projects. From January 2002 to July 2007 Mr. Stinebaugh was Managing Member of Marketing Group of the Americas, LLC where he oversaw
the development of strategic partnerships in the Americas, as well as, the development of market entry strategies for US-based
agricultural, food and technology companies in their efforts to penetrate the Chile and South American markets. From January 1998
to December 2002, Mr. Stinebaugh was a Director of AMR Research, Inc., a Boston-based IT research firm.



H. Deworth Williams, Director of the Company

Mr. Williams has been the Company’s
Director since December 2012. Mr. Williams is the owner of Williams Investment Company, established in 1970 and is president of
Blue Cap Corporation, an investment company. He has been a financial consultant for more than forty-five years. During this time,
Mr. Williams has been instrumental in facilitating and completing numerous mergers, acquisitions, business consolidations
and underwritings. Mr. Williams was Founder, Director and Chairman of the Board of U.S. Rare Earths, Inc. a Delaware Corporation
(formerly Thorium Energy, Inc.) that owns the mineral rights to one of the two largest resources and reserves of rare earths in
the United States. Mr. Williams is Founder, Director and Principal of Laser Technology, Inc., a private company established in
1984 that designs, manufactures and markets laser-measuring devices for use in law enforcement, recreation, and professional measurement.
Mr. Williams has been a director of over twenty corporations.  Mr. Williams completed his education at the University
of Idaho.



We believe that Mr. Williams is well qualified
to serve as a member of the Board due to his deep knowledge of financial issues and his prior executive experience.



Term of Office



Our directors are appointed for a one-year
term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with
our bylaws. Our officers are appointed by our board of directors and hold office until removed by the board.



Family Relationships.



John W. Kennedy, the Company’s
Director and Chief Science Officer, and Patrick Kennedy, the Company’s Director and Vice President of Agricultural Business
Development, are brothers.



Involvement in Certain
Legal Proceedings.



Except as noted below,
none of our officers, directors, promoters or control persons has had any of the following events occur:



31







| | · | any
                                         bankruptcy petition filed by or against any business of which such person was a general
                                         partner or executive officer, either at the time of the bankruptcy or within two years
                                         prior to that time, except that (i) Mr. Kaye held an officer position (until January
                                         2012) and a director position (until April 2012) in Latitude Solutions, Inc., which in
                                         December 2012 filed for bankruptcy protection, and (ii) Mr. Peach held an officer position
                                         in Oncure Medical Corp. (until June 2014), which filed for reorganization in June 2013
                                         in connection with an acquisition of the company by new ownership.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | any
                                         conviction in a criminal proceeding or being subject to a pending criminal proceeding,
                                         excluding traffic violations and other minor offenses; or
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | being
                                         subject to any order, judgment or decree, not substantially reversed, suspended or vacated,
                                         of any court of competent jurisdiction, permanently enjoining, barring, suspending or
                                         otherwise limiting his involvement in any type of business, securities or banking business;
                                         or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | being
                                         found by a court of competent jurisdiction in a civil action, the SEC or the Commodity
                                         Futures Trading Commission to have violated a federal or state securities or commodities
                                         law, and the judgment has not been reversed, suspended or vacated; or
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | been
                                         the subject of, or a party to, any Federal or State judicial or administrative order,
                                         judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating
                                         to an alleged violation of:
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | any
                                         Federal or State securities or commodities law or regulation; or
| | - | -------------------------------------------------------------------------------------------------------------

| | o | any
                                         law or regulation respecting financial institutions or insurance companies including,
                                         but not limited to, a temporary or permanent injunction, order of disgorgement or restitution,
                                         civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition
                                         order; or
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | o | any
                                         judicial or administrative proceeding resulting from involvement in mail or wire fraud
                                         or fraud in connection with any business entity.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ITEM 11. | EXECUTIVE COMPENSATION
| | -------- | ----------------------



The following table sets forth the cash and other compensation
paid by the Company to our named executive officers for the year ended December 31, 2013 and year ended December 31, 2014.



|Name and Principal Position                                                                                |  | Year |      |  | Salary |   |        | Stock Awards |  |   | Option Awards |     |  | Total |       
|---------------------------------------------------------------------------------------------------------- |  | ---- | ---- |  | ------ | - | ------ | ------------ |  | - | ------------- | --- |  | ----- | ------
|Harvey “Kaye” Klebanoff, Chairman and Director
    of the Company(1)                                       |  |      | 2014 |  |        | $ | 40,000 | (4)          |  | $ | —             |     |  | $     | —     
|Richard Godwin,                                                                                            |  |      | 2013 |  |        | $ | 60,000 |              |  | $ | —             |     |  | $     | —     
|President and CEO of ZGLS, Director of the Company(2)                                                      |  |      | 2014 |  |        | $ | 96,000 |              |  | $ | —             |     |  | $     | —     
|Glenn Stinebaugh President
                                         and CEO of the Company and BAM Inc.(3) |  |      | 2014 |  |        | $ | 31,000 |              |  | $ | 250,000       | (5) |  | $     | 23,092

(1) Mr. Kaye served as President
and Interim Chief Executive Officer of the Company from October 3, 2014 to November 21, 2014.

(2) Mr. Godwin served as President
and Chief Executive Officer of the Company during the entire fiscal year ended December 31, 2013 and until October 3, 2014, at
which time he resigned from that role and was named President and Chief Executive Officer of our subsidiary, ZGLS.

(3) On November 6, 2014, Mr. Stinebaugh
was named the President and Chief Executive Officer of BAM Inc., and on November 21, 2014, he was named the President and Acting
Chief Executive Officer of the Company.

(4) Mr. Kaye’s salary was
earned in connection with his overall service as Chairman of the Board, as President and Interim Chief Executive Officer for the
period October 3, 2014 to November 21, 2014, and as Treasurer of the Company (until November 11, 2014).

(5) Mr. Stinebaugh received 500,000
shares of the Company’s common stock upon his execution of an offer letter with the Company on September 29, 2014. Additional
information is available in the “Narrative Discussion of Compensation Tables” below. For valuation considerations,
please see Note 6 of the December 31, 2014 Notes to the Financial Statements, included in Item 8.



32







(6) Mr. Stinebaugh received a five
year warrant to purchase 50,000 shares of the Company’s common stock at $0.50 per share under an advisory agreement with
the Company dated August 6, 2014. Additional information is available in the “Narrative Discussion of Compensation Tables”
below. For valuation considerations, please see Note 6 of the December 31, 2014 Notes to the Financial Statements, included in
Item 8.



Outstanding Equity Awards at December 31,
2014 Fiscal Year End



|Name             |  | Number of  Securities
     underlying  unexercised  options  exercisable |        |   | Number of  Securities
     underlying  unexercised  options  unexercisable |  |   | Option  exercise
    or  base price per  share  ($/Share) |  |   | Option Expiration Date
|---------------- |  | ------------------------------------------------------------------------ | ------ | - | -------------------------------------------------------------------------- |  | - | --------------------------------------------------------- |  | - | ----------------------
|Glenn Stinebaugh |  |                                                                          | 50,000 | * |                                                                            |  | — |                                                           |  | $ | 0.50                  



Narrative Discussion of Compensation Tables



Employee Agreements and Current Compensation Rates for Named
Executive Officers and Other Key Employees





There are currently
no employment agreements in place for any named executive officers above and each serves at the will of our Board of Directors.
As dictated by the Board, Mr. Harvey Kaye’s salary for fiscal year 2014 was $40,000 per annum. As dictated by the Board,
Mr. Godwin’s salary for fiscal year 2014 was $96,000 per annum and $60,000 per annual for 2013.





Mr. Stinebaugh initially
entered into an advisory agreement with the Company, dated August 6, 2014, under which he was to serve as an advisor the Company
for a term of one year, unless terminated by mutual agreement of the parties. Under the advisory agreement, Mr. Stinebaugh received
$5,000 per month for an initial period of three months, and a five year warrant to purchase 50,000 shares of the Company’s
common stock at $0.50 per share. This agreement was terminated by mutual agreement of the Company and Mr. Stinebaugh on September
29, 2014 via his execution of an offer letter, described below.



On November 6, 2014, Mr.
Stinebaugh was named the President and Chief Executive Officer of BAM Inc., and on November 21, 2014, was named the President
and Acting Chief Executive Officer of the Company. In connection to Mr. Stinebaugh’s employment with the Company, we entered
into an offer letter with Mr. Stinebaugh, under which he receives $8,000 per month for his services to the Company, along with
500,000 shares of the Company’s common stock. Pursuant to this offer letter, the Company and Mr. Stinebaugh shall work in
good faith to enter into an employment agreement securing Mr. Stinebaugh services. Once an employment agreement has been entered
into, in connection to the Company naming Mr. Stinebaugh as the President and Acting Chief Executive Officer of the Company and
by direction of the Board, Mr. Stinebaugh will receive an additional 500,000 shares of common stock of the Company. We hope to
have this employment agreement completed by the end of the second quarter of 2015.



Employee Benefit and Incentive Plans



No retirement, pension,
profit sharing, stock option or insurance programs or other similar programs have been adopted by the Company for the benefit
of its employees. The Company plans on adopting a Stock Incentive Plan for its employees during fiscal 2015.



33







Director Compensation



|Name              |  | Fees earned or paid in
    cash  ($) |   |  | Stock awards  ($) |   |   | Option awards  ($) |  |   | All other compensation
     ($) |  |  | Total  ($) |        
|----------------- |  | ------------------------------------ | - |  | ----------------- | - | - | ------------------ |  | - | ------------------------------- |  |  | ---------- | -------
|Harvey Kaye       |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 40,000 
|Deworth Williams  |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 0      
|Edward Cowle      |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 0      
|Richard Godwin    |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 96,000 
|John W. Kennedy   |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 96,000 
|Patrick Kennedy   |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 106,000
|Michael Smith (5) |  | $                                    | 0 |  |                   | $ | 0 |                    |  | $ | 0                               |  |  | $          | 0      

(1) Mr. Kaye’s salary was
earned in connection with his service as Chairman of the Board, as President and Interim Chief Executive Officer for the period
October 3, 2014 to November 21, 2014, and as Treasurer of the Company (until November 11, 2014).

(2) Mr. Godwin’s salary was
earned in connection with his service as President and CEO of the Company and ZGSL). He did not receive any amount for his service
as a Director.

(3)Mr. JW Kennedy’s salary of $96,000 was earned in connection with his service as Chief Science Officer
of the Company. He did not receive any amount for his service as a Director.

(4)Mr. P. Kennedy’s earned
a salary of $76,000 in connection with his service as Vice President, Agribusiness Development of the Company and received advanced
royalties in the amount of $30,000 pursuant to the Royalty Agreement, defined in Item 13 He did not receive any amount for his
service as a Director.

(5)Michael Smith joined the Board
of Directors in February 2015 and did not receive any compensation in the fiscal year ended December 31, 2014.



There are no written compensation
agreements in place regarding the payment to any director for their service as a director. In connection with Mr. Smith’s
appointment to the Board in February 2015, he received 200,000 warrants for the purchase of shares of the Company’s common
stock with an exercise price of $0.50 on February 10, 2015 having a fair value of $92,479.



Indemnification of Officers and Directors



Our bylaws provide that we will indemnify our officers and directors to the fullest extent permitted by
applicable law against all liability and loss suffered and expenses (including attorney’s fees) incurred in connection with
actions or proceedings brought against them by reason of their serving or having served as officers, directors or in other capacities,
provided that the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the Company, unless such director or officer for negligence or misconduct in the performance of his or
her duty to the Company. We shall be required to indemnify a director or officer in connection with an action or proceeding commenced
by such director or officer only if the commencement of such action or proceeding by the director or officer was authorized in
advance by the Board of Directors.



We have procured a Directors
and Officers Insurance Policy with National Union Fire Insurance Company of Pittsburgh, PA with a $3,000,000 limit of liability.



| | ITEM 12. | SECURITY
                                         OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
| | -------- | ---------------------------------------------------------------------------------------------------------------------------------------



The following table sets
forth, as of March 20, 2015, the number of shares of Common Stock owned of record and beneficially by the named executive officers,
directors and persons who beneficially own more than 5% of the outstanding shares of Common Stock of the Company. Unless otherwise
noted below, the address of each director and executive officer of the Company is 190 NW Spanish River Boulevard, Suite 101, Boca
Raton, Florida 33431. There are no persons other than the directors and officers shown below who beneficially own more than 5%
of the outstanding shares of Common Stock of the Company. The addresses for the greater than 5% stockholders are set forth in
the footnotes to this table:



34







|                                                                      |  | Common Stock                                |           
|--------------------------------------------------------------------- |  | ------------------------------------------- | ----------
|                                                                      |  | Number of Shares
    Beneficially Owned (1) |           
|Directors and Officers (6)                                            |  |                                             |           
|John W. Kennedy                                                       |  |                                             | 7,000,000 
|Edward F. Cowle                                                       |  |                                             | 2,650,000 
|Deworth Williams                                                      |  |                                             | 2,615,000 
|Harvey “Kaye” Klebanoff                                               |  |                                             | 2,483,000 
|Richard Godwin                                                        |  |                                             | 2,000,000 
|Patrick Kennedy                                                       |  |                                             | 1,986,666 
|Glenn Stinebaugh                                                      |  |                                             | 550,000   
|Michael Smith                                                         |  |                                             | 200,000   
|                                                                      |  |                                             |           
|All directors and named executive Officers as a group
    (8 persons) |  |                                             | 19,484,666





|(1) | The Company believes that each stockholder has sole voting and investment power with respect to the shares of common stock listed, except as otherwise noted. The number of shares beneficially owned by each stockholder is determined under rules of the SEC, and the information is not necessarily indicative of ownership for any other purpose. Under these rules, beneficial ownership includes (i) any shares as to which the person has sole or shared voting power or investment power and (ii) any shares which the individual has the right to acquire within 60 days after March 20, 2015 through the exercise of any stock option, warrant, conversion of preferred stock or other right, but such shares are deemed to be outstanding only for the purposes of computing the percentage ownership of the person that beneficially owns such shares and not for any other person shown in the table. The inclusion herein of any shares of common stock deemed beneficially owned does not constitute an admission by such stockholder of beneficial ownership of those shares of common stock.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Based on 33,476,597 shares of common stock issued and outstanding as of March 20, 2015                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|(3) | The 2,483,000 shares of our common stock include 983,000 shares of our common stock owned of record by Mr. Kaye and 1,500,000 shares of our common stock owned of record by Ms. Helen Klebanoff, Mr. Kaye’s wife.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(4) | The 550,000 shares of our common stock include 500,000 shares of our common stock owned of record by Mr. Stinebaugh and a warrant exercisable into 50,000 shares of our common stock at $0.50 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|(5) | The 200,000 shares of our common stock are made up of a warrant exercisable into 200,000 shares of our common at $0.50 per share.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(6) | Timothy Peach, our Chief Financial Officer, assumed his role with the Company in 2015 and, as such, was not a Named Executive Officer for fiscal 2014.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       







35







| | ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED
                                         TRANSACTIONS, AND DIRECTOR INDEPENDENCE
| | -------- | ------------------------------------------------------------------------------------------------------------------



Certain Relationships and Related Transactions



Except as otherwise
indicated herein, there have been no other related party transactions, or any other transactions or relationships required to
be disclosed pursuant to Item 404 and Item 407(a) of Regulation S-K.







| | · | The Company had previously received cash advances periodically beginning during the fiscal year
ended 2006 from Mr. Deworth Williams, our director, to pay its operating expenses. The Company accrued interest on the notes at
10%. The notes were unsecured and due on demand. On March 3, 2012, Mr. Williams forgave these loans and related accrued interest
which totaled $413,753.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | During the year ended December 31, 2012, Blue Cap Development Corp., which is fully owned by Mr.
Williams, advanced $6,000 to the Company. The advance bears interest at 10%, was unsecured and due on demand. The outstanding note
balance at December 31, 2013 was $6,000. The accrued interest balance at December 31, 2013 was $628. The outstanding balance was
repaid in full during March 2014.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | During the year ended December 31, 2013, the Williams Investment Company, which is fully owned
by Mr. Williams, advanced $20,000 to the Company. The advance was non-interest bearing, unsecured and due on demand. The outstanding
note balance at December 31, 2013 was $20,000. For the year ended December 31, 2013, the Company recorded $525 as imputed interest.
The note was repaid in full during January 2014.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On August 29, 2013, the Williams Investment Company, which is fully owned by Mr. Williams, advanced
$15,000 to the Company via verbal agreement to assist with the Company’s payroll needs. The advance bears interest at 10%,
was unsecured and due on demand. The outstanding note balance at December 31, 2014 was $11,000 plus accrued interest of $2,064.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | During the year ended December 31, 2013, the Company temporarily provided administrative services
via verbal agreement to F&T Water Solutions, LLC, which is an affiliate of our Chairman, Mr. Harvey Kaye. As a result, the
Company earned $3,015 during the year ended December 31, 2013.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On December 3, 2012, the Company entered into a Patent Acquisition Agreement by and between the
Company’s predecessor company, ElectroHealing Technologies Inc., and our current director, John Wayne Kennedy (“JW
Kennedy”) in which JW Kennedy agreed to assign certain patents applications and technology to the Company in exchange for
11,500,000 shares of common stock of the Company. JW Kennedy was not an affiliate of the Company at this time.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | As required by the Patent Acquisition Agreement, on December 12, 2013, our directors, JW Kennedy
and Mr. Patrick Kennedy, and the Company entered into a royalty agreement (the “Royalty Agreement”) having a term of
75 years, wherein the Company is required to pay royalty fees to Messrs. JW Kennedy and P. Kennedy, in the amount of (1) 5% of
gross sales of the BAM-FX product (and related products), of which 3% will be paid to JW Kennedy and 2% to Patrick Kennedy, and/or
(2) 10% of any license or sub-license of the product or related products, of which 6% will be paid to JW Kennedy and 4% to P. Kennedy.
The Royalty Agreement also allows the Company to pay Messrs. JW Kennedy and P. Kennedy advance royalties as determined by the CEO
of the Company, to be deducted from any future royalties due. For the year ended December 31, 2014, JW Kennedy and P. Kennedy earned
$467, under the Royalty Agreement.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | As of December 31, 2014, the Company has advanced a total of $50,356 to Messrs. JW Kennedy and
P. Kennedy, our directors, which will offset future royalties to be earned under the Royalty Agreement to pay for legal fees related
to the patent for the "Mitigation of Plant and Animal Diseases using Bioavailable Minerals." The Company may utilize
this patent in future and reserves the right to negotiate for this patent at a later date.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On March 13, 2015, the Company entered into a License and Royalty Agreement with our directors
JW Kennedy and P. Kennedy in connection with the patent application relating to the Copper/Zinc Superoxide Dismutase (SOD) Formulation
for the Treatment of Traumas Including Amyotrophic Lateral Sclerosis for manufacturing, commercial opportunities and/or supply
and/or research for products which may be developed by the Company for fertilizers and for humans and animals such as remediation
of radiation of astronauts and other oxidative stress conditions discovered in a micro/zero gravity environment. The Agreement
has a term of 25 years and the Company has an obligation to pay royalty fees to Messrs. JW Kennedy and P. Kennedy, in the amount
of (1) 5% of gross sales of commercial product developed and sold (and related products), of which 3% will be paid to JW Kennedy
and 2% to P. Kennedy, and/or (2) 10% of any license or sub-license of the product or related products, of which 6% will be paid
to JW Kennedy and 4% to P. Kennedy.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | On March 10, 2015, the Company entered into a Consulting Agreement with Williams Investment Company
and Deworth Williams, a director of the Company. Under the Consulting Agreement, Williams will provide advice and recommendations
to the Company with respect to investor relations, public relations and general corporate business development advise for a period
of six months from the date of the Agreement. The Company paid $50,000 upon execution of the Agreements with additional payments
of $150,000 due in equal installments on June 6, 2105 and August 6, 2015.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------





Director Independence



Our Common Stock is not
quoted or listed on any national exchange or interdealer quotation system with a requirement that a majority of our board of directors
be independent and therefore, the Company is not subject to any director independence requirements. Under NASDAQ Rule 5605(a)(2)(A),
a director is not considered to be independent if he or she also is an executive officer or employee of the corporation.  Under
such definition, Harvey Kaye, Richard Godwin, John Wayne Kennedy, Patrick Kennedy, and Edward F. Cowle would not be considered
independent as they serve currently or have served as the officers of the Company within the past three years. Mr. Smith may be
considered independent under this standard.



36







Committees of the Board of Directors



Currently, we do not have
any standing committees of the Board of Directors. Until such time as formal committees are established, our Board of Directors
will perform some of the functions associated with a nominating committee and a compensation committee, including reviewing all
forms of compensation provided to our executive officers, directors, consultants and employees, including stock compensation.
The Board will also perform the functions of an audit committee until we establish a formal audit committee.



Policies Regarding Conflicts of Interests
and Related Party Transactions



We have not adopted formal
policies or procedures for the review or approval of related party transactions or the management of conflicts of interest. However,
our Board is in the process of establishing such policies with the intent to have them in place subsequent to the effectiveness
of this Registration Statement.



| | ITEM 14. | PRINCIPAL
                                         ACCOUNTING FEES AND SERVICES
| | -------- | -------------------------------------------------------------------------------



The Company's Board of
Directors does not have an Audit Committee.



The following table sets
forth the aggregate fees billed to us for the years ended December 31, 2014 and December 31, 2013 by Sadler Gibb Certified Public
Accountants, our independent auditors:





|                   |  | 2014 |        |  | 2013 |  
|------------------ |  | ---- | ------ |  | ---- | -
|Audit Fees         |  | $    | 22,500 |  |      | $
|Audit-Related Fees |  |      | -      |  |      |  
|Tax Fees           |  |      | 1,125  |  |      |  
|Other Fees         |  |      | -      |  |      |  
|Totals             |  | $    | 23,625 |  |      | $









Audit fees represent
amounts billed for professional services rendered for the audit of our annual financial statements.



Audit-related fees
represent professional services rendered for assurance and related services by the accounting firm that are reasonably related
to the performance of the audit or review of our financial statements that are not reported under audit fees. Our Board of Directors
is of the opinion that the Audit-Related Fees charged by Sadler Gibb Certified Public Accountants were consistent with Sadler Gibb
Certified Public Accountants maintaining its independence from us.



Tax fees represent
professional services rendered by the accounting firm for tax compliance.



All other fees represent fees billed for products and services provided by the accounting firm, other
than the services reported for the other three categories.





The Board of Directors
acts as the audit committee of the Company and approves all auditing services and the terms thereof and non-audit services (other
than non-audit services published under Section 10A(g) of the Exchange Act or the applicable rules of the SEC or the Pubic Company
Accounting Oversight Board) to be provided to us by the independent auditor; provided, however, the pre-approval requirement is
waived with respect to the provisions of non-audit services for us if the "de minimus" provisions of Section 10A(i)(1)(B)
of the Exchange Act are satisfied.



37







PART IV



| | ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT
                                         SCHEDULES
| | -------- | -----------------------------------------------------------------------------------



| | (a) | Financial Statements.
| | --- | ---------------------







|Management’s Report on Internal Control Over Financial Reporting
|----------------------------------------------------------------
|Report of Independent Registered Public Accounting Firm         
|Consolidated Balance Sheets                                     
|Consolidated Statements of Operations and Comprehensive loss    
|Consolidated Statements of Cash Flows                           
|Consolidated Statements of Stockholders’ Equity                 
|Notes to Consolidated Financial Statements                      







(b) Exhibits.





|Exhibit |  |                                                                                                     
|------- |  | ----------------------------------------------------------------------------------------------------
|Number  |  | Description                                                                                         
|3.1     |  | Certificate of Incorporation, Amendments to Articles of Incorporation and Articles of Merger+       
|3.2     |  | By-Laws of the Company+                                                                             
|4.1     |  | Form of Certificate of Common Stock+                                                                
|4.2     |  | Form of Cashless Warrant+                                                                           
|10.1    |  | Securities Purchase Agreement – Form+                                                               
|10.2    |  | Offer Letter to Glenn A. Stinebaugh+                                                                
|10.3    |  | Lease Agreement between the Company and MRK Acquisition, Inc.+                                      
|10.4    |  | Patent Acquisition Agreement between the Company and John Wayne Kennedy+                            
|10.5    |  | BAM-FX Royalty Agreement+                                                                           
|10.6    |  | SOD License Agreement between the Company and John Wayne Kennedy*                                   
|10.7    |  | Space Act Agreement+                                                                                
|10.8    |  | Assignment of BAM Patent to Company+                                                                
|10.9    |  | Lease between the BAM Inc. and Palm City Interiors, Inc.+                                           
|10.10   |  | ZGS UK Lease+                                                                                       
|10.11   |  | Lease between the Company and Investments Limited+                                                  
|10.12   |  | Memorandum of Understanding between ZGS UK and the International Institute of Tropical Agriculture++
|10.13   |  | At-Will Employment Agreement, dated March 12, 2015, between the Company and Timothy Peach+++        
|10.14   |  | Consulting Agreement between the Company and Williams Investment Company, Inc.*                     
|21.1    |  | Subsidiary List+                                                                                    
|31.1    |  | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act*                             
|31.2    |  | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act*                             
|32.1    |  | Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act*                             
|32.2    |  | Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act*                             







+Previously filed with the Company’s
Registration Statement on Form 10, filed with the SEC on December 29, 2014.

++Previously filed with the Company’s
Amendment to its Registration Statement on Form 10, filed with the SEC on January 28, 2015.

+++ Previously filed with the Company’s Form 8-K filed
March 13, 2015.

* Filed herewith.





38







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





|Date: March 31, 2015 | ZERO GRAVITY SOLUTIONS, INC.
|-------------------- | ----------------------------
|                     |                             
|                     | By:                         
|                     |                             
|                     |                             
|                     |                             





Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below
by the following persons on behalf of the Registrant and in the capacities indicated on March 31, 2015.





|Signatures:            | Title:                                                          
|---------------------- | ----------------------------------------------------------------
|/s/ Harvey Kaye        | Director, Chairman of the Board                                 
|Harvey Kaye            |                                                                 
|                       |                                                                 
|/s/ John Wayne Kennedy | Director                                                        
|John Wayne Kennedy     |                                                                 
|                       |                                                                 
|/s/ Patrick Kennedy    | Director                                                        
|Patrick Kennedy        |                                                                 
|                       |                                                                 
|/s/ Deworth Williams   | Director                                                        
|Deworth Williams       |                                                                 
|                       |                                                                 
|/s/ Richard Godwin     | Director                                                        
|Richard Godwin         |                                                                 
|                       |                                                                 
|/s/ Ed Cowle           | Director                                                        
|Ed Cowle               |                                                                 
|                       |                                                                 
|/s/ Glenn Stinebaugh   | Chief Executive Officer, President (Principal Executive Officer)
|Glenn Stinebaugh       |                                                                 
|                       |                                                                 
|/s/ Timothy Peach      | Chief Financial Officer (Principal Financial Officer)           
|Timothy Peach          |                                                                 







39







ZERO GRAVITY SOLUTIONS, INC. AND SUBSIDIARIES



CONTENTS





|PAGE  | F1      | CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2014 AND AS OF DECEMBER 31, 2013.                                            
|----- | ------- | ----------------------------------------------------------------------------------------------------------------------------
|      |         |                                                                                                                             
|PAGE  | F2      | CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS FOR THE   TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013.
|      |         |                                                                                                                             
|PAGE  | F3      | CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013. 
|      |         |                                                                                                                             
|PAGE  | F4      | CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, 2014.                                                         
|      |         |                                                                                                                             
|PAGES | F5- F14 | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                  





40









| | 
| | 

REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM



To the Board of Directors and shareholders

Zero Gravity Solutions, Inc.



We have audited the accompanying
consolidated balance sheets of Zero Gravity Solutions, Inc. (the Company) as of December 31, 2014 and 2013 and the related consolidated
statements of operations, stockholders’ equity and cash flows for the years 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 audits.



We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated 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 audits 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
audits provide 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 Zero Gravity Solutions, Inc. as
of December 31, 2014 and 2013, and the results of their operations and cash flows for the years then ended, in conformity with
U.S. generally accepted accounting principles.



The accompanying financial statements
have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial
statements, the Company has an accumulated deficit of $4,485,661 cash used in operations of $2,153,272 as of and for the year ended
December 31, 2014 which raises substantial doubt about its ability to continue as a going concern. Management’s plans concerning
these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the
outcome of this uncertainty.





/s/ Sadler, Gibb & Associates, LLC



Salt Lake City, UT

March 31, 2015

















ZERO GRAVITY SOLUTIONS, INC. AND
SUBSIDIARY

Consolidated Balance Sheets



|                                                                                                                                        |  | December 31, 2014 |            |   | December 31, 2013 |  
|--------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ---------- | - | ----------------- | -
|                                                                                                                                        |  |                   |            |   |                   |  
|ASSETS                                                                                                                                  |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|CURRENT ASSETS                                                                                                                          |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Cash                                                                                                                                    |  | $                 | 253,677    |   |                   | $
|Prepaid Expenses                                                                                                                        |  |                   | 213,781    |   |                   |  
|Accounts Receivable                                                                                                                     |  |                   | 1,325      |   |                   |  
|Inventory                                                                                                                               |  |                   | 18,592     |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Total Current Assets                                                                                                                    |  |                   | 487,375    |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Property and Equipment - net                                                                                                            |  |                   | 44,142     |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|OTHER ASSETS                                                                                                                            |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Deposit                                                                                                                                 |  |                   | 6,356      |   |                   |  
|Advance on Future Royalties - Related Parties                                                                                           |  |                   | 50,356     |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|TOTAL ASSETS                                                                                                                            |  | $                 | 588,229    |   |                   | $
|                                                                                                                                        |  |                   |            |   |                   |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                    |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|CURRENT LIABILITIES                                                                                                                     |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Accounts Payable and Accrued Liabilities                                                                                                |  | $                 | 155,960    |   |                   | $
|Notes Payable Related Party                                                                                                             |  |                   | 11,000     |   |                   |  
|Notes Payable                                                                                                                           |  |                   | 104,647    |   |                   |  
|Total Current Liabilities                                                                                                               |  |                   | 271,607    |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|STOCKHOLDERS' EQUITY                                                                                                                    |  |                   |            |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Common stock; 100,000,000 shares authorized, at $0.001 par value, 30,844,597 and 25,674,000 shares issued and outstanding, respectively |  |                   | 30,845     |   |                   |  
|Common stock to be issued                                                                                                               |  |                   | 25,000     |   |                   |  
|Additional paid-in capital                                                                                                              |  |                   | 4,748,285  |   |                   |  
|Accumulated other comprehensive loss                                                                                                    |  |                   | (1,847     | ) |                   |  
|Accumulated deficit                                                                                                                     |  |                   | (4,485,661 | ) |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|Total Stockholders' Equity                                                                                                              |  |                   | 316,622    |   |                   |  
|                                                                                                                                        |  |                   |            |   |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                              |  | $                 | 588,229    |   |                   | $



See accompanying notes to consolidated financial
statements







F1







ZERO GRAVITY SOLUTIONS, INC. AND
SUBSIDIARY

Consolidated Statements of Operations
and Other Comprehensive Loss



|                                                       |  | Year Ended   |           
|------------------------------------------------------ |  | ------------ | ----------
|                                                       |  | December 31, |           
|                                                       |  | 2014         |           
|                                                       |  |              |           
|REVENUES                                               |  |              |           
|Sales                                                  |  | $            | 11,218    
|                                                       |  |              |           
|Total Revenue                                          |  | $            | 11,218    
|                                                       |  |              |           
|COST OF SALES                                          |  |              |           
|Cost of Materials                                      |  |              | (2,609    
|                                                       |  |              |           
|Total Cost of Sales                                    |  |              | (2,609    
|GROSS PROFIT                                           |  |              | 8,609     
|                                                       |  |              |           
|OPERATING EXPENSES                                     |  |              |           
|                                                       |  |              |           
|General and Administrative                             |  | $            | 2,741,172 
|Research and Development                               |  |              | 128,194   
|                                                       |  |              |           
|Total Operating Expenses                               |  |              | 2,869,366 
|                                                       |  |              |           
|LOSS FROM OPERATIONS                                   |  |              | (2,860,757
|                                                       |  |              |           
|OTHER EXPENSES                                         |  |              |           
|                                                       |  |              |           
|Other Income                                           |  |              | 381       
|Other Income - Related Party                           |  |              | -         
|Interest Expense                                       |  |              | (3,951    
|                                                       |  |              |           
|Total Other Income (Expenses)                          |  |              | (3,570    
|                                                       |  |              |           
|NET LOSS                                               |  | $            | (2,864,327
|                                                       |  |              |           
|NET LOSS PER SHARE - BASIC AND DILUTED                 |  | $            | (0.10     
|                                                       |  |              |           
|WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - |  |              |           
|BASIC AND DILUTED                                      |  |              | 27,620,651
|                                                       |  |              |           
|OTHER COMPREHENSIVE LOSS                               |  |              |           
|Net Loss                                               |  |              | (2,864,327
|Foreign currency translation loss                      |  |              | (1,847    
|                                                       |  |              |           
|COMPREHENSIVE LOSS                                     |  | $            | (2,866,174



See accompanying notes to consolidated financial statements







F2







ZERO GRAVITY SOLUTIONS, INC. AND
SUBSIDIARY

Condensed Consolidated Statements
of Stockholders' Equity (Deficit)



|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  | Deficit       |   |           |             |  |   |                  |  
|------------------------------------------------ |  | ------------ | ---------- |  | ------------ | - | ------ | ------- |  |  | ----------- |  |  | ------------- | ------ |  | ------------- | - | --------- | ----------- |  | - | ---------------- | -
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  | Accumulated   |   |           | Accumulated |  |   |                  |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  | Additional    |        |  | During the    |   |           | Other       |  |   | Total            |  
|                                                 |  | Common Stock |            |  | Common Stock |   |        | Paid-In |  |  | Development |  |  | Comprehensive |        |  | Stockholders' |  
|                                                 |  | Shares       |            |  | Amount       |   |        | Shares  |  |  | Amount      |  |  | Capital       |        |  | Stage         |   |           | Loss        |  |   | Equity/(Deficit) |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Balance, December 31, 2012                       |  |              | 23,000,000 |  |              | $ | 23,000 |         |  |  | -           |  |  |               | -      |  |               |   | 430,011   |             |  | $ | (462,365         | )
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock issued for cash at $0.001 per share |  |              | 600,000    |  |              |   | 600    |         |  |  |             |  |  |               |        |  |               |   | -         |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock issued for cash at $0.50 per share  |  |              | 2,024,000  |  |              |   | 2,024  |         |  |  |             |  |  |               |        |  |               |   | 1,009,976 |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Direct offering costs                            |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | (58,700   | )           |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock issued for services                 |  |              | 50,000     |  |              |   | 50     |         |  |  |             |  |  |               |        |  |               |   | 24,950    |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Warrants issued for services                     |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | 288,940   |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Capital contribution of services - related party |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | 10,000    |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Imputed interest - related party                 |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | 525       |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Net loss for the year ended                      |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | -         |             |  |   | -                |  
|December 31, 2013                                |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   | (1,158,969       | )
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Balance, December 31, 2013                       |  |              | 25,674,000 |  |              |   | 25,674 |         |  |  | -           |  |  |               | -      |  |               |   | 1,705,702 |             |  |   | (1,621,334       | )
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock issued for cash at $0.50 per share  |  |              | 4,365,597  |  |              |   | 4,366  |         |  |  |             |  |  |               |        |  |               |   | 2,178,433 |             |  |   |                  |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Direct offering costs                            |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | (95,750   | )           |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock issued for services                 |  |              | 805,000    |  |              |   | 805    |         |  |  |             |  |  |               |        |  |               |   | 401,695   |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Warrants issued for services                     |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | 558,205   |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Common stock to be issued for services           |  |              |            |  |              |   |        |         |  |  | 50,000      |  |  |               | 25,000 |  |               |   |           |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Foreign currency translation adjustment          |  |              | -          |  |              |   | -      |         |  |  |             |  |  |               |        |  |               |   | -         |             |  |   | -                |  
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Net loss for the period ended December 31, 2014  |  |              | -          |  |              |   | -      |         |  |  | -           |  |  |               | -      |  |               |   | -         |             |  |   | (2,864,327       | )
|                                                 |  |              |            |  |              |   |        |         |  |  |             |  |  |               |        |  |               |   |           |             |  |   |                  |  
|Balance, December 31, 2014                       |  |              | 30,844,597 |  |              | $ | 30,845 |         |  |  | 50,000      |  |  |               | 25,000 |  |               | $ | 4,748,285 |             |  | $ | (4,485,661       | )



See accompanying notes to consolidated financial statements



F3







ZERO GRAVITY SOLUTIONS, INC. AND
SUBSIDIARY

Condensed Consolidated Statements
of Cash Flows



|                                                                            |  | Year Ended   |           
|--------------------------------------------------------------------------- |  | ------------ | ----------
|                                                                            |  | December 31, |           
|                                                                            |  | 2014         |           
|                                                                            |  |              |           
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |  |              |           
|                                                                            |  |              |           
|Net loss                                                                    |  | $            | (2,864,327
|                                                                            |  |              |           
|Adjustments to reconcile net loss to net cash used by operating activities: |  |              |           
|Depreciation expense                                                        |  |              | 1,693     
|Contributed services by officers, directors, and shareholders               |  |              | -         
|Common stock issued for services                                            |  |              | 427,500   
|Warrants issued for services                                                |  |              | 558,205   
|In kind contribution of Interest                                            |  |              | -         
|Changes in operating assets and liabilities:                                |  |              |           
|Receivables                                                                 |  |              | (1,326    
|Prepaids                                                                    |  |              | (213,781  
|Advance on future royalties - related parties                               |  |              | (47,856   
|Inventory                                                                   |  |              | (18,592   
|Deposit                                                                     |  |              | (6,353    
|Due from related party                                                      |  |              | -         
|Accounts payable and accrued liabilities                                    |  |              | 11,046    
|Accrued interest                                                            |  |              | 519       
|                                                                            |  |              |           
|Net Cash Used in Operating Activities                                       |  |              | (2,153,272
|                                                                            |  |              |           
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |  |              | -         
|                                                                            |  |              |           
|Cash paid to purchase equipment                                             |  |              | (45,835   
|                                                                            |  |              |           
|Net Cash Used in Investing Activities                                       |  |              | (45,835   
|                                                                            |  |              |           
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |  |              |           
|                                                                            |  |              |           
|Proceeds from notes payable                                                 |  |              | 109,137   
|Payments of notes payable                                                   |  |              | (4,490    
|(Repayment of)  proceeds from notes payable - related party                 |  |              | (30,000   
|Proceeds from sale of common stock                                          |  |              | 2,182,799 
|Payment of offering costs                                                   |  |              | (95,750   
|                                                                            |  |              |           
|Net Cash Provided by Financing Activities                                   |  |              | 2,161,696 
|                                                                            |  |              |           
|EFFECT OF EXCHANGE RATES ON CASH                                            |  |              | (1,847    
|                                                                            |  |              |           
|NET (DECREASE) INCREASE IN CASH                                             |  |              | (39,258   
|                                                                            |  |              |           
|CASH AT BEGINNING OF PERIOD                                                 |  |              | 292,935   
|                                                                            |  |              |           
|CASH AT END OF PERIOD                                                       |  | $            | 253,677   
|                                                                            |  |              |           
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                           |  |              |           
|                                                                            |  |              |           
|CASH PAID FOR:                                                              |  |              |           
|                                                                            |  |              |           
|Interest                                                                    |  | $            | 3,051     
|Income Taxes                                                                |  | $            | -         
|                                                                            |  |              |           
|SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING ANDD FINANCING ACTIVITIES:   |  |              |           
|                                                                            |  |              |           
|Warrants issued as direct offering costs                                    |  | $            | 121,744   
|Forgiveness of debt and accrued interest by a related party                 |  | $            | -         
|Subscription receivable                                                     |  | $            | -         



See accompanying notes to consolidated financial statements





F4











Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





NOTE 1 – ORGANIZATION, HISTORY
AND NATURE OF OPERATIONS



The Company was organized on August 19,
1983 in the State of Delaware, under the name Monolith Ventures, Inc. to acquire and develop mineral properties.



On January 12, 2012, the Company amended
its Articles of Incorporation to change its name to ElectroHealing Technologies, Inc. under the laws of the State of Nevada, in
anticipation of a merger which did not occur.



On January 11, 2013, the Company amended
its Articles of Incorporation to change its name to Zero Gravity Solutions, Inc. (“the Company”) (“ZGSI”),
pursuant to the acquisition of intellectual property on December 3, 2012.



On October 29, 2013, the Company formed
its wholly-owned subsidiary in the State of Delaware, Zero Gravity Solutions, Inc., which had no operations through December 31,
2013.



On December 16, 2013, the Company acquired
100% of Zero Gravity Solutions, Ltd. (“ZGSL”). This was a dormant U.K. company, which had no operations prior to acquisition
and through December 31, 2013.



On June 13, 2014, the Company formed its wholly-owned subsidiary
in the State of Florida, Bam Agricultural Solutions, Inc.



On August 19, 2014, the Company formed its wholly-owned subsidiary
in the U.K., Bam Agricultural Solutions, Ltd.



On December 17, 2014, the Company formed its wholly-owned subsidiary
in the State of Florida, Zero Gravity Life Sciences, Inc.



The Company owns proprietary technology
for its first commercial product, BAM-FXTM that can boost the nutritional value and enhance the immune system of food
crops without the use of Genetic Modification.



The Company’s mission is to improve
life on earth by applying intellectual property and technology designed for and derived from six NASA enabled flights over the
last five years through utilization of the unique long-term microgravity environment platform of the International Space Station
(ISS). The Company’s initial projects will be directed to providing solutions to critical world food crop challenges.



Further, the Company is focused on industrializing
and commercializing scientific breakthroughs in the area of patentable stem cell technologies through developing
advances in plant, animal and human biology based on intellectual property designed for and derived from multiple experiments on
the ISS.



Basis of Presentation



The accompanying financial statements have
been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.









F5









Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





NOTE 2 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES



Cash and Cash Equivalents



For purposes of the statement of cash flows, the Company considers
all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company had
no cash equivalents at December 31, 2014 and December 31, 2013.



Use of Estimates



In preparing financial statements, management
makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and
expenses in the statement of operations. Actual results could differ from those estimates.



Principles of Consolidation





The accompanying consolidated financial
statements include the accounts of Zero Gravity Solutions, Inc. and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.







Accounts Receivable



Trade receivables are recorded at net
realizable value, which includes allowances for doubtful accounts. The Company periodically reviews accounts receivable balances
and provides an allowance for doubtful accounts to the extent deemed uncollectible.





Inventory



Inventory is valued on a lower of first-in, first out (FIFO)
cost or market basis. At December 31, 2014 Raw materials on hand was $13,173 and finished product inventory was valued at $5,419.



Property and Equipment



Property and equipment is stated at cost, less accumulated depreciation.
Expenditures for maintenance and repairs are charged to expense as incurred.





Depreciation is computed on a straight-line
basis over estimated useful lives of between three and ten years. Property and equipment is reviewed for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. There were no impairment charges
taken in the years ended December 31, 2014 and 2013.



Revenue Recognition



Revenue is measured at the fair value of the consideration received
or receivable net of sales tax, trade discounts and customer returns.





Revenue from sale of goods is recognized
when the following conditions are satisfied:



| | · | the Company has transferred to the buyer the significant risks and
rewards of ownership of the goods;
| | - | -----------------------------------------------------------------------------------------------------

| | · | the Company retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | the amount of revenue can be measured reliably;
| | - | -----------------------------------------------

| | · | it is probable that the economic benefits associated with the transaction
will flow to the entity; and
| | - | ------------------------------------------------------------------------------------------------------

| | · | costs incurred or to be incurred in respect of the transaction can
be measured reliably.
| | - | ----------------------------------------------------------------------------------------





Concentration of Credit Risk





The Company currently maintains its cash equivalent balance
with one major national financial institution. Our bank balance at year end exceeded the FDIC limits by $3,677, as a result, the
Company believes that its credit risk exposure is limited.







Fair Value of Financial Instruments
and Derivative Financial Instruments



The Company applies the accounting guidance
under Financial Accounting Standards Board (“FASB”) ASC 820-10, “Fair Value Measurements”,
as well as certain related FASB staff positions.  This guidance defines fair value as the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date.  When determining the fair value measurements for assets and liabilities required to be recorded at fair value,
the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that
marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk
of non-performance.



The guidance also establishes a fair value hierarchy for measurements
of fair value as follows:





| | ● | Level 1 – quoted market prices in active markets for identical assets or liabilities.
| | - | -------------------------------------------------------------------------------------



| | ● | Level 2 - inputs other than Level 1 that are observable, either directly or indirectly, such
as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities
in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially
the full term of the assets or liabilities.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Level 3 – unobservable inputs that are supported
by little or no market activity and that are significant to the fair value of the assets or
| | - | --------------------------------------------------------------------------------------------------------------------------------------------







F6







Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





The carrying amounts of the Company’s short-term financial
instruments, accounts payable and accrued liabilities and related party-notes payable, approximate fair value due to the relatively
short period to maturity for these instruments.





Stock based compensation



We account for stock options in accordance
with Accounting Standards Codification (“ASC”) 718: Compensation - Stock Compensation (“ASC 718”). ASC
718 requires generally that all equity awards be accounted for at their “fair value.” This fair value is measured on
the grant date for stock-settled awards, and at subsequent exercise or settlement for cash-settled awards. Fair value is equal
to the underlying value of the stock for “full-value” awards such as restricted stock and performance shares, and estimated
using an option-pricing model with traditional inputs for “appreciation” awards such as stock options and stock appreciation
rights.





Costs equal to these fair values are recognized
ratably over the requisite service period based on the number of awards that are expected to vest, or in the period of grant for
awards that vest immediately and have no future service condition. For awards that vest over time, cumulative adjustments in later
periods are recorded to the extent actual forfeitures differ from our initial estimates: previously recognized compensation cost
is reversed if the service or performance conditions are not satisfied and the award is forfeited. The expense resulting from share-based
payments is recorded in general and administrative expense for the years ended December 31, 2014 and 2013.





Basic (Loss) per Common Share



Basic (loss) per share is calculated by
dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during
the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding
is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.



The Company had the following potential common stock equivalents
at December 31, 2014 and December 31, 2013:





|                                                          |  | December 30. 2014 |           |  | December 31. 2013 | 
|--------------------------------------------------------- |  | ----------------- | --------- |  | ----------------- | 
|Stock Warrants (Exercise price - $.50/share) (see Note 5) |  |                   | 1,926,900 |  |                   | 
|Total common stock equivalents                            |  |                   | 1,926,900 |  |                   | 







Advertising and Promotions



Expenditures for advertising and promotions
are charged to expense as incurred. Advertising and promotion expenses consists primarily of sales collateral material and product
samples. For the years ended December 31, 2014 and 2013, advertising expenses were $21,585 and $7,215, respectively.





Research and Development



The Company expenses all research and development
costs as incurred for which there is no alternative future use.





F7









Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013



Foreign Currency Transactions



The consolidated financial statements are
presented in United States Dollars. The Company has a bank account in foreign currency. The balance of this bank account was translated
from its local currency (British Pounds) into the reporting currency, U.S. dollars, using period end exchange rates. The resulting
translation adjustments were recorded as a separate component of accumulated other comprehensive loss. Revenues and expenses were
translated using weighted average exchange rate for the period.



Transaction gains and losses resulting
from foreign currency transactions were recorded as foreign exchange gains or losses in the consolidated statement of operations.
The Company did not enter into any financial instruments to offset the impact of foreign currency fluctuations.



Income Taxes



The Company accounts for income taxes in
accordance with accounting guidance now codified as FASB ASC Topic 740, “Income Taxes,” which requires that
the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts
and the tax basis of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.
Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation
allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.



Accounting guidance now codified as FASB
ASC Topic 740-20, “Income Taxes – Intraperiod Tax Allocation,” clarifies the accounting for
uncertainties in income taxes recognized in accordance with FASB ASC Topic 740-20 by prescribing guidance for the recognition,
de-recognition and measurement in financial statements of income tax positions taken in previously filed tax returns or tax positions
expected to be taken in tax returns, including a decision whether to file or not to file in a particular jurisdiction. FASB ASC
Topic 740-20 requires that any liability created for unrecognized tax benefits is disclosed. The application of FASB ASC Topic
740-20 may also affect the tax bases of assets and liabilities and therefore may change or create deferred tax liabilities or assets.
The Company recognizes interest and penalties related to unrecognized tax benefits in income tax expense.



At
December 31, 2014 and December 31, 2013, the Company did not record any liabilities for uncertain tax positions.



F8







Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





Recent Accounting Pronouncements



In June 2014, the Financial Accounting
Standards Board issued Accounting Standards Update No. 2014-10, which eliminated certain financial reporting requirements of companies
previously identified as “Development Stage Entities” (Topic 915). The amendments in this ASU simplify accounting guidance
by removing all incremental financial reporting requirements for development stage entities. The amendments also reduce data maintenance
and, for those entities subject to audit, audit costs by eliminating the requirement for development stage entities to present
inception-to-date information in the statements of income, cash flows, and shareholder equity.   Early application of
each of the amendments is permitted for any annual reporting period or interim period for which the entity’s financial statements
have not yet been issued (public business entities) or made available for issuance (other entities). Upon adoption, entities will
no longer present or disclose any information required by Topic 915.  The Company has adopted this standard and will not report
inception to date financial information.





NOTE 3 – GOING CONCERN



As reflected in the accompanying financial
statements, the Company has an accumulated deficit of $4,485,661 and net cash used in operations of $2,153,272 for the year ended
December 31, 2014.



The Company’s financial statements
are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet
established any source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability
of the Company to continue as a going concern is dependent upon the Company obtaining adequate capital to fund operating losses
until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.



In order to continue as a going concern,
the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for
the Company include obtaining capital from certain related parties, management and significant shareholders sufficient to meet
its minimal operating expenses. However, management cannot provide any assurances that the Company will be successful in accomplishing
any of its plans.



The ability of the Company to continue
as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and
eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as a going concern.





F9







Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013







NOTE 4 – PROPERTY AND EQUIPMENT



|                             |  | December 31, 2014 |        |   | December 31, 2013 | 
|---------------------------- |  | ----------------- | ------ | - | ----------------- | 
|Computer Equipment           |  |                   | 4,937  |   |                   | 
|Equipment                    |  |                   | 40,895 |   |                   | 
|Accumulated Depreciation     |  |                   | (1,690 | ) |                   | 
|Property and Equipment - Net |  | $                 | 44,142 |   |                   | 







NOTE 5 – RELATED PARTY TRANSACTIONS
AND COMMITMENTS



(A) Notes Payable

|    |  |                              |  | Interest Rate |    |   | Maturity Date |               | December 31, 2014 |   |        | December 31, 2013 | 
|--- |  | ---------------------------- |  | ------------- | -- | - | ------------- | ------------- | ----------------- | - | ------ | ----------------- | 
|    |  |                              |  |               |    |   |               |               |                   |   |        |                   | 
|(1) |  | Note Payable - related party |  |               | 10 | % |               | Due on Demand |                   |   | -      |                   | 
|    |  |                              |  |               |    |   |               |               |                   |   |        |                   | 
|(2) |  | Note Payable - related party |  |               | 0  | % |               | Due on Demand |                   |   | -      |                   | 
|    |  |                              |  |               |    |   |               |               |                   |   |        |                   | 
|(3) |  | Note Payable - related party |  |               | 10 | % |               | Due on Demand |                   |   | 11,000 |                   | 
|    |  |                              |  |               |    |   |               |               |                   |   |        |                   | 
|    |  | Total                        |  |               |    |   |               |               |                   | $ | 11,000 |                   | 





(1) During the year ended December
31, 2012, a board of director advanced $6,000 to the Company. The advance bears interest at 10%, was unsecured and due on demand.
The outstanding balance was repaid during January 2014.



(2) During the year ended December
31, 2013, a board of director advanced $20,000 to the Company. The advance was non-interest bearing, unsecured and due on demand.
Year ended December 31, 2014, the Company recorded $33 as imputed interest (see Note 6(d)). The note was repaid during January
2014.



(3) During the year ended December
31, 2013, a board of director advanced $15,000 to the Company. The advance bears interest at 10%, was unsecured and due on demand.
The outstanding note balance at December 31, 2014 was $14,000.





During the year ended December 31, 2013,
the Company was reimbursed $3,015 for temporary personnel services provided to a related party.





(B) Commitments



During the year ended December 31, 2013,
the Company entered into a royalty agreement having a term of 75 years, with a principal stockholder and a relative of the principal
stockholder, whereas the Company is required to pay royalty fees based on a percentage of gross sales. As of December 31, 2014,
the Company advanced a total of $48,357 to offset future royalties to be earned. Sales requiring royalties of $467 have occurred
as of December 31, 2014.



NOTE 6 – COMMITMENTS



Lease Commitments



We lease some of our offices and buildings under short term
leases. These leases have various terms and renewal options, generally renewable year to year, with the exception of one lease
with an eighteen-month term. Lease expense was $76,714 and $42,239 for the years ended December 31, 2014 and 2013, respectively.
Future minimum lease payments required under operating leases with initial terms in excess of one year were $8,800 for fiscal year
2015.





NOTE 7 – NOTES PAYABLE



The Company has two outstanding notes payable
for financing its insurance premiums. Both notes carry a rate of interest of 7.5%. One note has a term of nine months and the other
eleven months. Both due before the end of fiscal year 2015.



NOTE 8 – EQUITY



The Company has one class of common stock at $.001 par value
per common share of which 30,844,597 shares were issued and outstanding at December 31, 2014.







(A) Common Stock Issued for Cash



Year Ended December 31, 2014



The Company issued 4,365,597 shares of
common stock for $2,182,799 ($0.50/share).









F10





Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





Year ended December 31, 2013



The Company issued 600,000 shares of common
stock for $600 ($0.001/share).



The Company issued 2,024,000 shares of
common stock for $1,012,000 ($0.50/share).







(B) Imputed Interest – Related
Party



Year Ended December 31, 2014



The Company recorded $33 as imputed interest (See Note 5).



Year Ended December 31, 2013



The Company recorded $525 as imputed interest.





(C) Direct Offering Costs



Year Ended December 31, 2014



During the year ended December 31, 2014,
the Company issued 4,365,597 shares of common stock for $2,182,799 ($0.50/share) and paid direct offering costs of $95,750 (5%
or 10% of gross proceeds). As a result of the offering, the Company also issued 263,230 fully vested, non-forfeitable warrants
as a direct offering cost, which had no effect on the statement of stockholders’ equity and had a fair value of $121,744
(see Note 5(G) for additional details) based upon the following management assumptions:





|Exercise price            | $            0.50
|------------------------- | -----------------
|Expected dividends        | 0%               
|Expected volatility       | 157.54%          
|Risk free interest rate   | 1.46% - 1.82%    
|Expected life of warrants | 5 years          









Year Ended December 31, 2013



During the year ended December 31, 2013,
the Company issued 1,174,000 shares of common stock for $587,000 ($0.50/share), which is included in the 2,024,000 shares of common
stock issued as noted in Note 6(A) above, and paid direct offering costs of $58,700 (5% or 10% of gross proceeds). As a result
of the offering, the Company also issued 110,400 fully vested, non-forfeitable warrants as a direct offering cost, which had no
effect on the statement of stockholders’ equity and had a fair value of $51,036 (see Note 6(G) for additional details) based
upon the following management assumptions:





|Exercise price            | $            0.50
|------------------------- | -----------------
|Expected dividends        | 0%               
|Expected volatility       | 157.54%          
|Risk free interest rate   | 1.01% - 1.63%    
|Expected life of warrants | 5 years          











(D) Warrants issued for Services



Year Ended December 31, 2014



During the year ended December 31, 2014,
the Company issued 1,208,000 fully vested, non-forfeitable warrants to employees and consultants for services having a fair value
of $558,669 based upon the following management assumptions:



|Exercise price            | $               0.50
|------------------------- | --------------------
|Expected dividends        | 0%                  
|Expected volatility       | 157.54%             
|Risk free interest rate   | 1.49%  - 1.82%      
|Expected life of warrants | 5 years             



Year Ended December 31, 2013



During the year ended December 31, 2013,
the Company issued 625,000 fully vested, non-forfeitable warrants to employees and consultants for services having a fair value
of $288,940 based upon the following management assumptions:



|Exercise price            | $               0.50
|------------------------- | --------------------
|Expected dividends        | 0%                  
|Expected volatility       | 157.54%             
|Risk free interest rate   | 1.37%  - 1.65%      
|Expected life of warrants | 5 years             







F11





Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013



(E) Warrants



The following is a summary of the Company’s
warrant activity:





|                                |  | Number of 
Warrants |           |  | Weighted Average
 Exercise Price |   |      | Weighted Average Remaining 
Contractual Life  (In Years) | 
|------------------------------- |  | ------------------- | --------- |  | -------------------------------- | - | ---- | -------------------------------------------------------- | 
|Outstanding – December 31, 2012 |  | -                   |           |  | -                                |   |      | -                                                        | 
|Granted                         |  | $                   | 735,400   |  |                                  |   | 0.50 |                                                          | 
|Exercised                       |  |                     | -         |  |                                  |   | -    |                                                          | 
|Cancelled/Forfeited             |  |                     | -         |  |                                  |   | -    |                                                          | 
|Outstanding – December 31, 2013 |  |                     | 735,400   |  |                                  |   | 0.50 |                                                          | 
|Granted                         |  |                     | 1,471,230 |  |                                  |   | 0.50 |                                                          | 
|Exercised                       |  |                     | -         |  |                                  |   | -    |                                                          | 
|Cancelled/Forfeited             |  |                     | 279,730   |  |                                  |   | -    |                                                          | 
|Outstanding – December 31, 2014 |  | $                   | 1,926,900 |  |                                  |   | 0.50 |                                                          | 
|Exercisable – December 31, 2014 |  | $                   | 1,926,900 |  |                                  | $ | 0.50 |                                                          | 





As of December 31, 2014:



|         |      |  |             |  |           |             |  |  | Weighted Average |  |  |                 |          
|-------- | ---- |  | ----------- |  | --------- | ----------- |  |  | ---------------- |  |  | --------------- | ---------
|Exercise |      |  | Warrants    |  |           | Warrants    |  |  | Remaining        |  |  | Aggregate       |          
|Price    |      |  | Outstanding |  |           | Exercisable |  |  | Contractual Life |  |  | Intrinsic Value |          
|         |      |  |             |  |           |             |  |  |                  |  |  |                 |          
|$        | 0.50 |  |             |  | 1,926,900 |             |  |  | 1,926,900        |  |  |                 | 4.6 years
|         |      |  |             |  | 1,926,900 |             |  |  | 1,926,900        |  |  |                 | 4.6 years







(F) Common Stock Issued for Services



Year ended December 31, 2014, the Company
issued 555,000 shares of common stock to employees for services having a fair value of $277,500 ($0.50/share) based on the most
recent cash offering price. The Company also issued 250,000 shares of common stock to a third party for services having a fair
value of $125,000 ($0.50/share) based on the most recent cash offering price.



During the year ended December 31, 2013,
the Company issued 50,000 shares of common stock to a third party for services having a fair value of $25,000 ($0.50/share) based
on the most recent cash offering price.









F12







Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013





NOTE 9 – INCOME TAXES



ASC 740 requires the reduction of deferred
tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized. The provision for income taxes differs from the amounts which would be provided
by applying the statutory federal income tax rate of 39% to the net loss before provision for income taxes for the following reasons:



|                                           |  | 12/31/2014 |            |   | 12/31/2013 | 
|------------------------------------------ |  | ---------- | ---------- | - | ---------- | 
|Taxes on loss at US Federal Statutory Rate |  |            | (1,117,088 | ) |            | 
|Meals and entertainment                    |  |            | 4,222      |   |            | 
|Stock/options issued for compensation      |  |            | 384,425    |   |            | 
|Unpaid payroll                             |  |            | 6,822      |   |            | 
|Contributed services                       |  |            |            |   |            | 
|Charitable contributions                   |  |            | -          |   |            | 
|Valuation allowance                        |  |            | 721,619    |   |            | 
|Income tax expense per books               |  |            | -          |   |            | 





Net deferred tax assets consist of the
following components as of December 31, 2013 and December 31, 2014:





|Deferred Tax assets:                  |  |  |            |   |  | 
|------------------------------------- |  |  | ---------- | - |  | 
|Net operating loss carry forwards     |  |  | (1,569,085 | ) |  | 
|Meals and entertainment               |  |  | 7,477      |   |  | 
|Stock/options issued for compensation |  |  | 506,862    |   |  | 
|Contributed services                  |  |  | 4,105      |   |  | 
|Charitable contributions              |  |  | 1,950      |   |  | 
|Unpaid payroll                        |  |  | 6,822      |   |  | 
|Valuation allowance                   |  |  | 1,041,870  |   |  | 
|Net deferred tax asset                |  |  | -          |   |  | 











At December 31, 2014, the Company had net
operating loss carry forwards of approximately $1,569,085 that may be offset against future taxable income through 2034. No tax
benefit has been reported in the December 31, 2014 financial statements since the potential tax benefit is offset by a valuation
allowance of the same amount.







Due to the change in ownership provisions
of the Tax Reform Act of 1986, net operating loss carry forwards for Federal income tax reporting purposes are subject to annual
limitations. Should a change in ownership occur, net operating loss carry forwards may be limited as to use in future years.











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Zero Gravity Solutions, Inc.

Notes To Consolidated Financial Statements

December 31, 2014 and 2013



NOTE 10 – SUBSEQUENT EVENTS



The Company has evaluated for subsequent
events between the balance sheet date of December 31, 2014 and March 31, 2015, the date the financial statements were available
to be issued, and concluded that events or transactions occurring during that period requiring recognition or disclosure have been
made.



Common Stock Issued for Cash

Subsequent to December 31, 2014, the Company
issued 2,557,000 shares of common stock for $1,278,500 ($0.50/share).



Of the 2,557,000 shares of common stock
sold for cash, the Company paid direct offering costs of $95,000 (5% or 10% of gross proceeds). As a result of the offering, the
Company also issued 198,000 fully vested non-forfeitable warrants as direct offering costs, which had no net effect on the statement
of stockholders’ equity and had a fair value of $88,338 based upon the following management assumptions:



|Exercise price            | $               0.50
|------------------------- | --------------------
|Expected dividends        | 0%                  
|Expected volatility       | 157.54%             
|Risk free interest rate   | 1.51%               
|Expected life of warrants | 5 years             



Warrants issued for Services



Subsequent to December 2014, the Company
issued 425,000 fully vested, non-forfeitable warrants to a Director for services having a fair value of $196,563 based upon the
following management assumptions:

|Exercise price            | $               0.50
|------------------------- | --------------------
|Expected dividends        | 0%                  
|Expected volatility       | 157.54%             
|Risk free interest rate   | 1.51-1.67%          
|Expected life of warrants | 5 years             





On February 20, 2015, the Company appointed
Timothy A. Peach as its Chief Financial Officer.







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