Zero Gravity Solutions, Inc. (Form: 8-K/A, Received: 05/16/2018 17:09:04)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K /A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 16 , 2018 ( May 1 , 201 8 )

Date of Report (Date of earliest event reported)

ZERO GRAVITY SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

NEVADA

000-55345

46-1779352

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

190 NW Spanish River

Boulevard Boca Raton, Florida

33431

(Address of principal

executive offices)

(Zip Code)

(561) 416-0400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

	☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

☐

Emerging growth company

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

Unless otherwise provided in this Current Report on Form 8-K, all references to “we,” “us,” “our,” “ZGSI” or the “Company” refer to the Registrant, Zero Gravity Solutions, Inc.

Explanatory Note

This Current Report on Form 8-K/A is being filed to amend the Current Report on Form 8-K filed by the Company on March 14, 2018 (the “Original Report”).

Item 1.01

Entry into a Material Definitive Agreement

The BPI Investment

On or about May 1, 2018, the Company received $300,001 from Boies Partners, Inc. (“BPI”), an accredited investor. BPI’s investment was made pursuant to a side letter agreement between the Company and BPI dated May 1, 2018 (the “BPI Side Letter”). The BPI Side Letter concerns a Confidential Term Sheet dated March 2018 from the Company (the “Term Sheet”) relating to certain additional terms to the Company’s 2016 private offering of up to $10,000,000 of its securities, consisting of up to 3,333,333 shares of its common stock at $3.00 per share (the “Current Offering”). The Term Sheet provides that, among other things, “Qualified Investors” in the Current Offering (i.e., those investing at least $500,000) will have a right to receive, in the aggregate, up to twenty percent (20%) of equity (determined on a scale and allocated pro rata, based on the aggregate money raised by Qualified Investors) in a to-be-formed subsidiary of the Company that will operate exclusively in the cannabis industry.

In accordance with the BPI Side Letter, BPI agreed to convert its $200,000 unsecured promissory note dated March 12, 2018 (the “BPI Prior Note”), as previously disclosed in the Original Report, into shares of the Company’s common stock under the Current Offering. In addition, the Company agreed that the balance of the BPI Prior Note would be aggregated with its $300,001 investment for the purposes of determining that BPI is a “Qualified Investor” under the Term Sheet.

Alex Boies, a member of our Board of Directors, has no financial interest in or control over BPI and does not otherwise have any beneficial ownership in any securities owned by BPI.

The Michael T. Smith Investment

On or about May 2, 2018, the Company received $300,001 from Michael T. Smith, an accredited investor and member of our Board of Directors (“Mr. Smith”), and in exchange the Company issued to Mr. Smith (a) an unsecured promissory note dated May 2, 2018 (the “Smith Note”), and (b) a warrant dated May 3, 2018 to purchase up to 30,000 shares of the Company’s common stock at $3.00 per share (the “Smith Warrant”).

The Smith Note bears interest at the rate of ten percent (10%) per annum, such interest being payable by the Company to the holder thereof quarterly in cash. The Smith Note shall be repaid in full by the Company, plus all unpaid interest thereon, by May 1, 2020 (the “Maturity Date”). Prepayment of all unpaid principal due on the Smith Note may be made by the Company prior to the Maturity Date, provided that the holder thereof shall receive a minimum amount of interest equal to one year of interest due under the Smith Note, based on the principal balance as of the origination date. The Smith Note contains customary provisions for events of default and acceleration of sums due. The Smith Note further provides that within thirty (30) days of receipt of payment of any amount of principal outstanding under the Smith Note (the “Conversion Window”), the holder thereof shall have the right to convert any portion of such payment into the Company’s common stock at the lesser of $3.00 per share or the lowest price per share of any sale by the Company of its common stock occurring between the date of the Smith Note and the end of the Conversion Window.

The Smith Warrant is exercisable within 5 years of issuance into shares of the Company’s common stock, at $3.00 per share. In addition to the terms customarily included in such instruments, the Smith Warrant may be exercised by the holder thereof by providing to the Company a notice of exercise, payment and surrender of the Smith Warrant. In addition, the Smith Warrant is subject to adjustment upon the occurrence of specified events including, but not limited to, a payment of certain stock dividends, a subdivision or combination of the Company’s outstanding shares of common stock, a reclassification of the Company’s common stock, a consolidation or merger of the Company, a sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange affecting the Company. The Smith Warrant includes piggyback registration rights.

Mr. Smith’s investment was made pursuant to a side letter agreement between the Company and Mr. Smith dated May 2, 2018 (the “Smith Side Letter”). In accordance with the Smith Side Letter, Mr. Smith agreed to convert his $200,000 unsecured promissory note dated March 8, 2018 (the “Smith Prior Note”), as previously disclosed in the Original Report, into shares of the Company’s common stock under the Current Offering. In addition, the Company agreed that the balance of the Smith Prior Note would be aggregated with the $300,001 balance of the Smith Note for the purposes of determining that Mr. Smith is a “Qualified Investor” under the Term Sheet.

The foregoing descriptions of the BPI Side Letter, Smith Note, Smith Warrant and Smith Side Letter do not purport to be complete and are qualified in their entirety by reference to the full text of the BPI Side Letter, Smith Note, Smith Warrant and Smith Side Letter filed as Exhibits 10.1, 10.2, 10.3 and 10.4 hereto, respectively, and are incorporated herein by reference.

Aggregate gross proceeds in connection with the foregoing investments by BPI and Mr. Smith were $600,002, and proceeds net of commission were $567,002. Commissions in connection with the BPI investment were equal to eight percent (8%) of the principal thereof, totaling $24,000, and commissions in connection with the Smith Note were equal to three percent (3%) of the principal thereof, totaling $9,000. The Company intends to use the proceeds from the foregoing investments to fund working capital requirements and for general corporate purposes.

The Company is providing this report in accordance with Rule 135c under the Securities Act of 1933, as amended (the “Securities Act”), and the notice contained herein does not constitute an offer to sell the Company’s securities, and is not a solicitation for an offer to purchase the Company’s securities. The securities offered have not been registered under the Securities Act, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Item 2.03

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

Item 3.02

Unregistered Sales of Equity Securities

Reference is made to the disclosure set forth under Item 1.01 above, which disclosure is incorporated herein by reference.

The Company has sold the securities in a private transaction in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder since, among other things, the above transaction did not involve a public offering. Additionally, the Company relied on similar exemptions under applicable state laws. The Holders had access to information about the Company and their investments, took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities. Upon issuance, the resale of the securities will not be registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.

10.1 Side Letter Agreement, dated May 1, 2018, between the Company to Boies Partners, Inc.

10.2 Promissory Note, dated May 2, 2018, issued by the Company to Michael T. Smith.

10.3 Warrant, dated May 3, 2018, issued by the Company to Michael T. Smith.

10.4 Side Letter Agreement, dated May 2, 2018, between the Company to Michael T. Smith.

SIGNATURES

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

	Zero Gravity Solutions, Inc.

Date: May 16, 2018	By:	/s/Timothy A. Peach
		Timothy A. Peach
		Chief Executive Officer

Exhibit 10.1

May 1, 2018

VIA EMAIL ONLY

Zero Gravity Partners, LLC, a division of Boies Partners, Inc.

2200 Corporate Blvd., NW

Suite 400

Boca Raton, FL 33431

Attn: David Boies

Re: Agreement Regarding Cannabis Entity Ownership

Dear Mr. Boies:

Reference is made to: (i) that certain Confidential Term Sheet, dated March, 2018 (the “Term Sheet”), a copy of which is attached hereto as Exhibit A, regarding Zero Gravity Solution Inc.’s (“Zero Gravity” or the “Company”) Current Offering and the Company’s offer to certain investors to participate in the equity ownership of a to-be-formed subsidiary which shall operate exclusively in the cannabis industry (the “ZG Cannabis Entity”); and (ii) the Promissory Note dated March 12, 2018 in the amount of $200,000 (the “Note”). Capitalized terms used herein not otherwise defined in this letter agreement (the “Agreement”) shall have the meaning ascribed to it in the Term Sheet.

Pursuant to the Term Sheet, the Company is granting to Qualified Investors a right to participate in the equity ownership of the ZG Cannabis Entity, on a pro rata basis, as more fully described therein. An Investor is deemed a Qualified Investor if he purchases, in one or more tranches, at least $500,000 of the Company’s securities being offered in the Current Offering. You are now hereby instruction the Company to convert the Note in the amount of $200,000 and to apply the proceeds of the Note toward the Current Offering, plus making an additional investment in the Current Offering in the amount of $300,001. Together those amounts make you a Qualified Investor.

Furthermore and in recognition of the considerable financial and advisory contributions over many years to the Company, the Company hereby agrees to the following:

(1)

Should the Company be required to reduce the purchase price in the Current Offering (at any amount less than $3 per share for equity), Boies Partners, Inc. shall be entitled to a corresponding price adjustment for this current investment; and

(2)

Upon conversion of the Note into equity at the current $3 offering pursuant to the Term Sheet plus a new equity investment of $300,001, for a total investment of $500,001, Boies Partners, Inc. shall be entitled without any additional payment to a guaranteed participation in the amount of 2% in the ZG Cannabis Entity without regard to whether other funds are being raised under the Current Offering.

If the above accurately reflects your understanding, please sign this Agreement below where indicated and return a copy to us.


		Very truly yours,

		/s/ Harvey Kaye
		Harvey Kaye, Chairman

ACCEPTED AND AGREED:


By:	/s/ David Boies
	David Boies
	Dated: May 1, 2018

Exhibit 10.2

PROMISSORY NOTE

$300,001.00

May 2, 2018

FOR VALUE RECEIVED, ZERO GRAVITY SOLUTIONS, INC., a Nevada corporation, its successors and assigns (“Maker”), here-by promises to pay to the order of Michael T. Smith, or his successors or assigns located at 15903 Roseto Way, Naples, Florida 34110 (“Payee”), the principal amount of THREE HUNDRED THOUSAND DOLLARS ($300,001.00), together with interest on the principal balance outstanding hereunder, from (and including) the date hereof until (but not including) the date of payment, at the interest rate specified below, in accordance with the following terms and conditions:

Stated Interest Rate. Except as provided in Section 2 below, the unpaid principal balance from day to day outstanding hereunder shall bear interest at a rate per annum equal to ten percent (10%) per annum (the “Stated Interest Rate”) calculated on the basis of the actual days elapsed but computed as if each year consisted of 360 days.

Payments. All unpaid principal and any accrued but unpaid interest thereon and all other amounts payable hereunder shall be due and payable on May 1, 2020.

Interest Payments. Interest shall accrue at the Stated Interest Rate beginning on the date hereof on the unpaid principal amount of this Note and shall be payable to Payee quarterly in cash. Each such payment shall be made within 15 calendar days from the end of the applicable calendar quarter.

Prepayment. Maker may prepay all or any portion of the interest and the unpaid principal balance of this Note at any time, or from time to time; however, Payee shall receive minimum interest equivalent to one year at the Stated Interest Rate calculated using the principal balance as of the origination date.

Application and Place of payments. Payments received by Payee with respect to the indebtedness evidenced hereby shall be applied in such order and manner as Payee in its sole and absolute discretion may elect. Unless Payee otherwise elects, payments received by Payee shall be applied first to accrued and unpaid interest, next to the principal balance then outstanding hereunder, and the remainder to Additional Sums (as hereinafter defined) or other costs or added charges provided for in this Note. Payments hereunder shall be made at the address for Payee first set forth above or at such other address as Pay e may specify to Maker in writing.

Events of Default; Acceleration. The occurrence of any one or more of the following events shall constitute an “Event of Default” hereunder, and upon such Event of Default, the entire principal balance outstanding hereunder, together with all accrued interest and other amounts payable hereunder, at the election of Payee, shall become immediately due and payable, without any notice to Maker, provided that in the case of any of the Events of Default in paragraphs (b), (c) or (d) below, the remainder of the debt evidenced hereby shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by Maker:

Nonpayment of principal, interest, or other amounts when the same shall become due and payable hereunder, and Maker does not cure such failure to pay within three days after the date such payment is due; or

The failure of Maker to comply with any provision of this Note; or

The dissolution, winding-up liquidation or termination of the existence of Maker or the sale or disposition of substantially all of the assets of Maker’s business; or

The making by Maker of an assignment for the benefit of its creditors; or

The appointment of a receiver for Maker or the involuntary filing against Maker, which is not stayed or dismissed within 30 days of filing, or the voluntary filing by Maker of a petition of bankruptcy.

Contracted For Interest.

Maker agrees to pay an effective contracted for rate of interest equal to the rate of interest resulting from all interest payable as provided in this Note, plus the additional rate of interest resulting from the Additional Sums. The Additional Sums shall consist of all fees, charges, goods, things in action, or any other sums or things of value (other than interest payables as provided in this Note) paid or payable by Maker, pursuant to this Note, that may be deemed to be interest for the purpose of any law of the state of Florida that may limit the maximum amount of interest to be charged with respect to this lending transaction. The Additional Sums shall be deemed to be interested for the purposes of any such law only.

Maker understands and believes that this transaction complies with the usury laws of the state of Florida; however, if any interest or other charges in connection with this transaction are ever determined to exceed the maximum amount permitted by law, then Maker agrees that (i) the amount of interest or charges payable pursuant to this transaction shall be reduced to the maximum amount permitted by law; and (ii) any excess amount previously collected from Maker in connection with this transaction, which exceeded the maximum amount permitted by law, will be credited against the principal balance then outstanding hereunder. If the outstanding principal balance hereunder has been paid in full, the excess amount paid will be refunded to Maker.

Costs of Collection. Maker agrees to pay all costs of collection, including, without limitation, attorney’s fees, whether or not suit is filed, and all costs of suit and preparation for suit (whether at trial or appellate level), in the event any payment of principal, interest, or other amount is not paid when bankruptcy law (or any similar state or federal law) in connection with the obligations evidenced hereby. In the event of any court proceeding, court costs and attorneys’ fees shall be set by the court and not by the jury and shall be included in any judgment obtained by Payee.

No Waiver by Payee. Maker hereby waives presentment, protest, notice of dishonor, and notice of acceleration of maturity. No failure to accelerate the debt evidenced hereby by reason of default hereunder, acceptance of a past-due installment, or other indulgence granted from time to time shall be construed as a novation of this Note or as a waiver of such right of acceleration or of the right of Payee thereafter to insist upon strict compliance with the terms of this Note or to prevent the exercise of such right of acceleration or any other right granted hereunder or by applicable law. No extension of the time for payment of this Note shall operate to release, discharge, modify, change or affect the original liability of Maker under this Note, either in whole or in part, unless Payee agrees otherwise in writing. Maker agrees to continue to remain bound for the payment of principal, interest, and all other sums due under this Note notwithstanding any changes by way of release, surrender, exchange, modification, substitution of, failure to perfect or maintain perfection of any security for this Note. No delay or failure of Payee in exercising any right hereunder shall affect such right, nor shall any single or partial exercise of any right preclude further exercise thereof.

10.

Governing Law. This Note shall be construed in accordance with and governed by the laws of the state of Florida without regard to the choice of the law rules of the state of Florida.

11.

Times of Essence. Time is of the essence of this Note and each and every provision hereof.

12.

Conflicts; Inconsistency . In the event of any conflict or inconsistency between the provisions of this Note and the provisions of any one or more of the other documents executed in connection with this transaction, the provisions of this Note shall govern and control to the extent necessary to resolve such conflict or inconsistency.

13.

Amendments . No amendment, modification, change, waiver, release, or discharge hereof and hereunder shall be effective unless evidenced by an instrument in writing and signed by the party against whom enforcement is sought.

14.

Severability . The invalidity of any provision of this Note or portion of a provision shall not affect the validity of any other provision of this Note or the remaining portion of a portion of the applicable provision.

15.

Binding Nature . The provisions of this Note shall be binding upon and inure to the benefit of Maker and Payee and their respective heirs, personal representatives, successors, and assigns, as applicable.

16.

Notices . All notices, requests, demands, and other communications required or permitted under this Note shall be in writing and shall be deemed to have been duly given, made, and received when delivered against receipt, upon receipt requested, addressed as set forth below:

If to Maker:

Zero Gravity Solutions, Inc.

190 NW Spanish River Blvd, Suite 101

Boca Raton, FL 33441

Attention: Harvey Kaye

If to Payee:

Michael T. Smith

19503 Roseto Way

Naples, Florida 34110

Either party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the provisions of this section for the giving of notice.

17.

Conversion . While this Note remains outstanding and at any time no later than fifteen (15) days of receiving payment of any principal due hereunder, whether such payment of principal is made when due, as a prepayment, or otherwise, the Payee shall have the right to convert all or any portion of any such payment and/ or the outstanding principal balance of this Note into common stock of the Maker at a price of $3 per share, or such lower price at which the Maker has issued stock subsequent to the date hereof. Conversion shall not be construed as Prepayment under section 4 of this Note.

18.

Construction. Maker and Payee participated in the drafting of this Note, and this document was reviewed by the respective legal counsel for Maker and Payee. The normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be applied to the interpretation of this Note. The language of this Note shall be construed as a whole according to its fair meaning. The word “include(s)” No inference in favor of, or against, Maker or Payee shall be drawn from the fact that one party has drafted any portion hereof.

IN WITNESS WHEREOF, Maker has executed this Note as of the date first set forth above.

	ZERO GRAVITY SOLUTIONS, INC.

	By:	/s/ Harvey Kaye
		Harvey Kaye
	Its:	Chairman
	Date: May 2, 2018



ACCEPTED:
	By:	/s/ Michael T. Smith
		Michael T. Smith
	Date: May 2, 2018

Exhibit 10.3

WARRANT NO. 18-1014

Dated: May 3, 2018

WARRANT

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 , AS AMENDED (THE “ SECURITIES ACT ”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A "NO - ACTION" LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “ COMMISSION ” OR THE “ SEC ”) WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

Zero Gravity Solutions, Inc.

Zero Gravity Solutions, Inc. , a corporation organized under the laws of the State of Nevada (the “ Company ”), hereby certifies that, for value received from Michael T. Smith (the “ Holder ”), is entitled, subject to the terms set forth below, to purchase from the Company up to a total of thirty thousand (30,000) shares of the common stock, $0.001 par value per share (the “ Common Stock ”), of the Company (the “ Warrant Shares ”), at an exercise price equal to three dollars ($3.00) per share (the “ Exercise Price ”). This Warrant may be exercised at any time after issuance through and including the Fifth (5th) anniversary of its original issuance as noted above (the “ Expiration Date ”), subject to the following terms and conditions:

1. Registration of Warrant . The Company shall, from time to time and whenever requested by the Holder, register this Warrant in conformity with records to be maintained by the Company for such purpose (the “ Warrant Register ”) in the name of the Holder. The Company shall treat the registered Holder of this Warrant as the absolute owner hereof for any and all purposes, including the exercise hereof or any distribution to the Holder, and the Company shall not be affected by notice to the contrary.

2. Registration of Transfers and Exchanges .

(a) The Company or the transfer agent shall enter or record the transfer of all or any portion of this Warrant in the Warrant Register, upon surrender of this Warrant to the Company at the office specified herein or pursuant to Section 11 hereof. Upon any such registration or transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant hereinafter referred to as a “ New Warrant ”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance of such transferee of all of the rights and obligations of a holder of a Warrant.

(b) This Warrant is exchangeable, upon the surrender hereof by the Holder to the office of the Company specified herein or pursuant to Section 3(b) hereof for one or more New Warrants, evidencing in the aggregate the right to purchase the number of Warrant Shares which may then be purchased hereunder. Any such New Warrant shall be dated as of the date of such exchange.

3. Duration and Exercise of Warrants .

(a) This Warrant shall be exercisable by the registered Holder on any business day before 5:00 P.M., New York time, at any time and from time to time on or after the date hereof to and including the Expiration Date. At 5:00 P.M., New York time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. Prior to the Expiration Date, the Company may not call or otherwise redeem this Warrant without the prior written consent of the Holder, which consent shall be given or withheld at the sole and absolute discretion of the Holder.

(b) Subject to Section 2(b) , Section 6 and Section 10 hereof, upon: (x) surrender of this Warrant, together with the Form of Election to Purchase attached hereto duly completed and signed, to the Company at its address for notice set forth in Section 11 hereof; and (y) payment of the Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, in the manner provided hereunder, all as specified by the Holder in the Form of Election to Purchase, the Company shall promptly (but in no event later than ten (10) business days after the Date of Exercise (as defined below)) issue or cause to be issued and cause to be delivered to the Holder in such name(s) as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise and free of restrictive legends unless a registration statement covering the resale of the Warrant Shares and naming the Holder as a selling stockholder thereunder is not then effective or the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144(k) promulgated under the Securities Act then the Warrant Shares will bear a Securities Act restrictive legend. Any person so designated by the Holder to receive Warrant Shares shall be deemed to have become holder of record of such Warrant Shares as of the Date of Exercise of this Warrant. A “ Date of Exercise ” means the date on which the Company shall have received (I) this Warrant (or any New Warrant, as applicable), together with the Form of Election to Purchase attached hereto (or attached to such New Warrant) appropriately completed and duly signed; and (II) payment of the Exercise Price for the number of Warrant Shares so indicated by the holder hereof to be purchased.

(c) This Warrant shall be exercisable in its entirety or, from time to time, for a portion of the number of Warrant Shares. If less than all of the Warrant Shares which may be purchased under this Warrant are exercised at any time, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares for which no exercise has been evidenced by this Warrant.

4. Piggyback Registration Rights . The Holder shall be granted certain Piggyback Registration Rights as more fully described in that certain Piggyback Registration Rights Agreement entered into in connection with the Offering.

5. Payment of Taxes . Upon the exercise of this Warrant, the Company will pay all documentary stamp taxes attributable to the issuance of Warrant Shares; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

6. Replacement of Warrant . If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and indemnity, if requested, satisfactory to it. Applicants for a New Warrant under such circumstances shall comply with such other reasonable regulations and procedures and pay such other reasonable charges as the Company may prescribe.

7. Reservation of Warrant Shares . The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 8 hereof). The Company covenants that all Warrant Shares that shall be so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. If the Company does not have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares, it shall, as soon as reasonably practicable, use its best efforts to increase the number of its authorized shares such that the Company will have a sufficient amount of Common Stock authorized to reserve for the Warrant Shares.

8. Certain Adjustments . The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 8 . Upon each such adjustment of the Exercise Price pursuant to this Section 8 , the Holder shall thereafter but prior to the Expiration Date be entitled to purchase, at the Exercise Price resulting from such adjustment, the number of Warrant Shares obtained by multiplying the Exercise Price in effect immediately prior to such adjustment by the number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment and dividing the product thereof by the Exercise Price resulting from such adjustment.

(a) An adjustment shall be made, if the Company, at any time while this Warrant is outstanding (i) pays a stock dividend (except scheduled dividends paid on outstanding preferred stock as of the date hereof which contain a stated dividend rate) or otherwise make distribution(s) on shares of its Common Stock or on any other class of capital stock and not the Common Stock payable in shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines outstanding shares of Common Stock into a smaller number of shares. If either (i), (ii) or (iii) above occurs, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination, and shall apply to successive subdivisions and combinations.

(b) In case of any reclassification of the Common Stock, any consolidation or merger of the Company with or into another entity, the sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property, then the Holder shall have the right thereafter to exercise this Warrant only into the shares of stock and other securities and property receivable upon or deemed to be held by holders of Common Stock following such reclassification, consolidation, merger, sale, transfer or share exchange, and the Holder shall be entitled upon such event to receive such amount of securities or property equal to the amount of Warrant Shares such Holder would have been entitled to had such Holder exercised this Warrant immediately prior to such reclassification, consolidation, merger, sale, transfer or share exchange. The terms of any such consolidation, merger, sale, transfer or share exchange shall include such terms so as to continue to give to the Holder the right to receive the securities or property set forth in this Section 8(b) upon any exercise following any such reclassification, consolidation, merger, sale, transfer or share exchange.

(i) Record Date . In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (A) to receive a dividend or other distribution payable in Common Stock or in securities convertible or exchangeable into shares of Common Stock, or (B) to subscribe for or purchase Common Stock or securities convertible or exchangeable into shares of Common Stock, then such record date shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be.

(ii) Treasury Shares . The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

(d) All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.

9. Payment of Exercise Price .

(a) Cash Exercise . The Holder shall deliver to the Company at its principal offices, with the Election to Purchase form attached hereto, duly executed by the Holder and accompanied by payment in cash, wire transfer or by check, payable to the order of the Company, of the aggregate Exercise Price for the total aggregate number of Warrant Shares for which this Warrant is exercised.

(b) Legend. Unless the Warrant Shares have been registered under the Securities Act, upon exercise of any of the Warrants and the issuance of any of the Warrant Shares, all certificates representing the Warrant Shares shall bear on the face thereof substantially the following legend:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF, UNLESS REGISTERED PURSUANT TO THE PROVISIONS OF THAT ACT OR UNLESS AN OPINION OF COUNSEL TO THE CORPORATION IS OBTAINED STATING THAT SUCH DISPOSITION IS IN COMPLIANCE WITH AN AVAILABLE EXEMPTION FROM SUCH REGISTRATION .

10. Fractional Shares . The Company shall not be required to issue or cause to be issued fractional Warrant Shares on the exercise of this Warrant. The number of full Warrant Shares which shall be issuable upon the exercise of this Warrant shall be computed on the basis of the aggregate number of Warrant Shares purchasable on exercise of this Warrant so presented. If any fraction of a Warrant Share would, except for the provisions of this Section 10 , be issuable on the exercise of this Warrant, the Company shall pay an amount in cash equal to the Exercise Price multiplied by such fraction.

11. Notices . Any and all notices or other communications or deliveries hereunder shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:00 p.m. New York time on a business day, (ii) the business day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:00 p.m. New York time on any date and earlier than 11:59 p.m. New York time on such date, (iii) the business day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be:

If to the Company:

Zero Gravity Solution, Inc.

190 NW Spanish River Boulevard

Boca Raton, Florida 33431

If to the Holder:

Michael T. Smith

15903 Roseto Way

Naples, Florida 34110

or if none listed above, to such Holder’s address as set forth in the register maintained by the Company.

12. Warrant Agent . The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further action. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register.

13. Miscellaneous .

(a) This Warrant shall be binding on and inure to the benefit of the parties hereto. This Warrant may be amended only in writing signed by the Company and the Holder.

(b) Nothing in this Warrant shall be construed to give to any person or corporation other than the Company and the Holder any legal or equitable right, remedy or cause under this Warrant. This Warrant shall inure to the sole and exclusive benefit of the Company and the Holder.

(c) The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(d) In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e) The Company hereby represent and warrants to the Holder that: (i) it is voluntarily issuing this Warrant of its own freewill, (ii) it is not issuing this Warrant under economic duress, (iii) the terms of this Warrant are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review this Warrant, advise the Company with respect to this Warrant, and represent the Company in connection with its issuance of this Warrant.

(f) Any capitalized term used but not defined in this Warrant shall have the meaning ascribed to it in the Subscription Agreement.

(g) This Warrant may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Warrant. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.

(h) This Warrant and the obligations of the Company hereunder shall not be assignable by the Company.

14. Disputes Under This Agreement.

This Agreement shall be construed and interpreted in accordance with the laws of the State of Nevada, without reference to such State’s conflicts of laws principles. Any legal suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby shall be instituted exclusively in a court of competent jurisdiction located in the County of Palm Beach, Florida. The parties hereto hereby: (i) waives any objection which they may now have or hereafter have to the venue of any such suit, action or proceeding, and (ii) irrevocably consents to the courts of competent jurisdiction in the County of Palm Beach, Florida in any such suit, action or proceeding. The parties further agree to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in a court of competent jurisdiction in the County of Palm Beach, Florida and agree that service of process upon a party mailed by certified mail to such party’s address shall be deemed in every respect effective service of process upon such party in any such suit, action or proceeding.

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[ Signature on Following Page ]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

	Zero Gravity Solutions, Inc.

	By /s/	Harvey Kaye
		Harvey Kaye
		Its: Chairman

EXHIBIT A

FORM OF ELECTION TO PURCHASE

Zero Gravity Solutions, Inc.

Re: Intention to Exercise Right to Purchase Shares of Common Stock Under the Warrant

Gentlemen:

In accordance with the Warrant enclosed with this Form of Election to Purchase, the undersigned hereby irrevocably elects to purchase _________________shares of Common Stock, $0.001 par value per share, of Zero Gravity Solutions, Inc. encloses herewith $________ in cash, certified or official bank check(s), which sum represents the aggregate Exercise Price for the number of shares of Common Stock to which this Form of Election to Purchase relates, together with any applicable taxes payable by the undersigned pursuant to the Warrant. Any capitalized terms used but not defined in this Form of Election to Purchase shall have the meaning ascribed to them in the accompanying Warrant.

The undersigned requests that certificates for the shares of Common Stock issuable upon this exercise be issued in the name of:

(Please insert SS# or FEIN #)

(Please print name and address)

If the number of shares of Common Stock issuable upon this exercise shall not be all of the shares of Common Stock which the undersigned is entitled to purchase in accordance with the enclosed Warrant, the undersigned requests that a New Warrant evidencing the right to purchase the shares of Common Stock not issuable pursuant to the exercise evidenced hereby be issued in the name of and delivered to:

(Please print name and address)

Dated: _____________, _____	Name of Holder:

	Signed:
	Print Name:
	Title:

(Signature must conform in all respects to name of Holder as specified on the face of the Warrant)

Exhibit 10.4

May 2, 2018

VIA EMAIL ONLY

Michael T. Smith

15903 Roseto Way

Naples, Florida 34110

Re: Agreement Regarding Cannabis Entity Ownership

Dear Mr. Smith:

Reference is made to: (i) that certain Confidential Term Sheet, dated March, 2018 (the “Term Sheet”), a copy of which is attached hereto as Exhibit A, regarding Zero Gravity Solution Inc.’s (“Zero Gravity” or the “Company”) Current Offering and the Company’s offer to certain investors to participate in the equity ownership of a to-be-formed subsidiary which shall operate exclusively in the cannabis industry (the “ZG Cannabis Entity”); and (ii) the Promissory Note dated March 8, 2018 in the amount of $200,000 (the “Note”). Capitalized terms used herein not otherwise defined in this letter agreement (the “Agreement”) shall have the meaning ascribed to it in the Term Sheet.

You are now loaning the Company the additional sum of $300,001, as evidenced by the Promissory Note dated May 2, 2018 (the “Second Note”). Upon your request and prior to the closing of the Current Offering, the Company will allow you to convert the Note together with your instructions to convert the Second Note and to apply the proceeds thereof in the amount of $500,001. Together those amounts make you a Qualified Investor.

In consideration of the transaction outlined under the Second Note, the Company agrees that it shall give you a reasonable amount of notice prior to the closing of the Current Offering to allow you the opportunity to convert the Note and the Second Note as described herein.

If the above accurately reflects your understanding, please sign this Agreement below where indicated and return a copy to us.

Very truly yours,

/s/ Harvey Kaye ___________________________________

Harvey Kaye, Chairman

ACCEPTED AND AGREED:


By:	/s/ Michael T. Smith
	Michael T. Smith
	Dated: May 2, 2018