On February 1, 2017, Agritech Worldwide, Inc. entered into a loan and security agreement with various lenders, including an entity controlled by its chief executive officer, Jonathan Kahn, and a director, Morris Garfinkle, and issued a note in connection therewith. The principal amount of the loan is $996,000. The loan accrues interest at a rate per annum equal to the prime rate plus 18.9%. Interest is payable monthly and the principal is payable on the maturity date of the loan, which is 2.5 years from the issuance date. The loan is secured by all of the assets of the corporation. The loan agreement contains certain covenants regarding financial reporting, limits on the corporation's incurrence of indebtedness, permitted investments, encumbrances, restricted payments, and mergers and acquisitions. The loan agreement includes customary events of default, including non-payment by the corporation of the monthly interest payments and the payment of penalties upon such late payments. The corporation used a portion of the proceeds of the loan to exercise its purchase option under its equipment lease agreement with Fordham Capital Partners, LLC that it entered into on July 17, 2015. The corporation intends to utilize the proceeds from the loan for working capital purposes.