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Nature of Business
3 Months Ended
Mar. 31, 2017
Nature of Business [Abstract]  
NATURE OF BUSINESS

NOTE 1 – NATURE OF BUSINESS

 

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

 

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

 

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

 

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

 

On April 17, 2017, (i) the UCC Sale was conducted by GKS Funding and (ii) at the UCC Sale, GKS Funding credit bid $996,000 of its claims under the Loan Agreement to purchase all of the collateral. There were no other bids for any of the collateral.

 

In light of the foregoing, the Company is no longer engaged in the agricultural technology business. At this point, the Board is reevaluating its business plan and strategy and has not made any determination as to whether or not it will seek to engage in a new line of business.

 

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

 

During the quarter ended March 31, 2017, the Company’s core product portfolio was comprised of multifunctional food ingredients that included Corn Z Trim® (both GMO and non-GMO) and Oat Z Trim®. The superior water-holding capacity and amorphous structure of Z Trim ingredients are key to the exclusive multifunctional attributes they contribute to food product design, including moisture management, oil deflection, texture and appearance quality, fat and calorie reduction. These attributes allow manufacturers using such products to reduce costs of finished products by replacing more expensive ingredients with our fiber and water.  Z Trim® is now being used by food manufacturers world-wide, across a multitude of food categories, such as meats, sauces, soups, dressings, baked goods, fillings, toppings, prepared meals, dairy products, frozen handheld snacks, and pizza dough. Food formulators are seeking greater functionality and product performance than they can get from starches, gums, fats, and other fibers – for both standard and lower fat content foods - and Z Trim® multifunctional ingredients can help to satisfy their consumers with finished products that we believe have enhanced eating quality, outstanding product performance, and frequently, improved nutritional profiles.

  

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