What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-18 · 710 added, 559 removed, 251 unchanged (83% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

June 30, 2022

September 30, 2022

March 31, 2022

27 unchanged sentences

Commitments and contingencies (Note 9)

Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 20,000 shares authorized, 2,140 and 2,840 shares issued and outstanding at June 30, 2022 and March 31, 2021, respectively

Series F Redeemable Convertible Preferred stock, $ 0.0001 par value, 750,000 shares authorized, 750,000 and 0 shares issued and outstanding at June 30, 2022 and March 31, 2021, respectively

Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 20,000 shares authorized, 1,670 and 2,840 shares issued and outstanding at September 30, 2022 and March 31, 2021, respectively

Series F Redeemable Convertible Preferred stock, $ 0.0001 par value, 750,000 shares authorized, 750,000 and 0 shares issued and outstanding at September 30, 2022 and March 31, 2021, respectively

Stockholders’ deficit

Series A Convertible Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at June 30, 2022 and March 31, 2021

Common stock, $ 0.0001 par value, 900,000,000 shares authorized, 740,710,500 shares issued and 740,585,500 shares outstanding at June 30, 2022 and 674,831,624 shares issued and 674,644,124 shares outstanding at March 31, 2022, respectively

Series A Convertible Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized , 5,000,000 shares issued and outstanding at September 30, 2022 and March 31, 2021

Common stock, $ 0.0001 par value, 900,000,000 shares authorized, 751,385,454 shares issued and 751,322,954 shares outstanding at September 30, 2022 and 674,831,624 shares issued and 674,644,124 shares outstanding at March 31, 2022, respectively

Additional paid in capital

8 unchanged sentences

Total liabilities, mezzanine and stockholders’ deficit

The accompanying footnotes are in integral part of

these condensed consolidated financial statements.

The accompanying footnotes are in integral part of these condensed consolidated

financial statements.

NATURALSHRIMP

Consolidated STATEMENTS OF OPERATIONS

For the 3 Months Ended

June 30, 2022

June 30, 2021

For the Three Months Ended

For the Six Months Ended

September 30, 2022

September 30, 2021

September 30, 2022

September 30, 2021

Operating expenses:

General and administrative

Salaries and Wages

Stock Compensation

Professional services

General and administrative

Research and development

4 unchanged sentences

( 2,783,972 )

( 5,552,830 )

( 5,022,062 )

Other income (expense):

Interest expense

( 1,081,663 )

Interest expense - related parties

Amortization of debt discount

( 2,136,389 )

( 4,176,389 )

Financing costs

Change in fair value of derivative liability

( 18,241,000 )

( 16,927,000 )

Change in fair value of warrant liability

Forgiveness of PPP loan

Loss due to fire

Total other income (expense)

( 21,862,319 )

( 21,175,691 )

Loss before income taxes

1 unchanged sentence

( 2,849,635 )

( 26,728,521 )

( 5,412,378 )

Provision for income taxes

1 unchanged sentence

( 2,849,635 )

Amoritzation of beneficial conversion feature on Preferred shares

( 26,728,521 )

( 5,412,378 )

Amortization of beneficial conversion feature on Preferred shares

( 1,341,948 )

Accretion on Preferred shares

4 unchanged sentences

$ ( 4,551,808 )

$ ( 27,627,175 )

$ ( 12,382,926 )

EARNINGS PER SHARE (Basic and diluted)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and diluted)

The accompanying footnotes are in integral part of

these condensed consolidated financial statements.

The accompanying footnotes are in integral part of these condensed consolidated

financial statements.

NATURALSHRIMP

Consolidated STATEMENT of CHANGES IN SHAREHOLDERS’ DEFICIT

A Preferred stock

Preferred stock

B Preferred stock

19 unchanged sentences

$ ( 34,892,794 )

stock issued for legal settlement to NSH shareholders

of Series E Preferred Shares to common stock

of 10 % in Series E Preferred Shares to one holder based on certain rights

of beneficial conversion feature related to Series E Preferred Shares

of Series E Preferred Shares

payable on Preferred Shares

stock issued in business agreement

stock issued from shares payable

stock vested to consultants

( 24,528,345 )

September 30, 2022

$ 118,061,820

$ ( 177,927,198 )

$ ( 59,183,191 )

March 31, 2021

22 unchanged sentences

$ ( 62,856,334 )

Conversion of Series E PS to common stock

Amortization of beneficial conversion feature related to Series E Preferred

( 1,341,948 )

Revision of dividends payable on Series B Preferred Shares (See Note 2)

Dividends payable on Preferred Shares

Common shares to be issued for Technical and Equipment Rights Agreement

Common stock vested to consultants

( 2,849,635 )

Balance September 30, 2021

( 67,408,142 )

The accompanying footnotes are in integral part of

2 unchanged sentences

Consolidated STATEMENTS OF CASH FLOWS

For the 3 Months Ended

June 30, 2022

June 30, 2021

For the Six Months Ended

September 30, 2022

September 30, 2021

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Change in fair value of derivative liability

( 1,314,000 )

Change in fair value of warrant liability

3 unchanged sentences

Shares issued for services

in operating assets and liabilities:

Changes in operating assets and liabilities:

Accounts receivable

2 unchanged sentences

Other accrued expenses

Accrued expenses - related parties

Accrued interest

Accrued interest - related parties

used in operating activitites

Cash used in operating activitites

( 3,630,503 )

6 unchanged sentences

( 1,000,000 )

Cash paid for License Agreement

( 2,350,000 )

Cash paid for construction in process

USED IN INVESTING ACTIVITIES

( 1,297,819 )

CASH USED IN INVESTING ACTIVITIES

( 7,293,524 )

CASH FLOWS FROM FINANCING ACTIVITIES

3 unchanged sentences

Repayment of short-term promissory note and lines of credit

Borrowing on Notes payable related party

Notes receivable

Lines of credit

Proceeds from issuance of common shares under equity agreeement

Proceeds from promissory note

Proceeds from promissory note, related parties

Proceeds from convertible debentures, receipt from escrow

Escrow account in relation to the proceeds from promissory notes

( 3,900,000 )

Payments on convertible debentures

Proceeds from sale of Series E PS

Proceeds from sale of Series D PS

Redemption of Series D PS

1 unchanged sentence

Shares issued upon exercise of warrants

provided by financing activitites

Cash provided by financing activitites

NET CHANGE IN CASH

12 unchanged sentences

these condensed consolidated financial statements.

NATURALSHRIMP INCORPORATED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31,

NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Nature of the Business

NaturalShrimp Incorporated (“NaturalShrimp”

or the “Company”), a Nevada corporation, is a biotechnology company and has developed a proprietary technology that allows

it to grow Pacific White shrimp (Litopenaeus vannamei, formerly Penaeus vannamei) in an ecologically controlled, high-density, low-cost

environment, and in fully contained and independent production facilities.

The Company’s system uses technology which allows it

to produce a naturally-grown shrimp “crop” weekly and accomplishes this without the use of antibiotics or toxic chemicals.

The Company has developed several proprietary technology assets, including a knowledge base that allows it to produce commercial quantities

of shrimp in a closed system with a computer monitoring system that automates, monitors and maintains proper levels of oxygen, salinity

and temperature for optimal shrimp production.

The Company’s production facilities are located in La Coste, Texas and Webster City,

15, 2020, the Company entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation

NATURALSHRIMP

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2022

1 – NATURE OF THE ORGANIZATION AND BUSINESS

of the Business

NaturalShrimp

Incorporated (“NaturalShrimp” or the “Company”), a Nevada corporation, is a biotechnology company and has developed

a proprietary technology that allows it to grow Pacific White shrimp (Lit Penaeus, formerly Penaeus vannamei) in an ecologically controlled,

high-density, low-cost environment, and in fully contained and independent production facilities.

The Company’s system uses technology

which allows it to produce a naturally grown shrimp “crop” weekly and accomplishes this without the use of antibiotics or

toxic chemicals.

The Company has developed several proprietary technology assets, including a knowledge base that allows it to produce

commercial quantities of shrimp in a closed system with a computer monitoring system that automates, monitors and maintains proper levels

of oxygen, salinity and temperature for optimal shrimp production.

The Company’s production facilities are located in La Coste,

Texas and Webster City, Iowa.

December 17, 2020, the Company closed on an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation

(“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation

11 unchanged sentences

be used to support the production of shrimp with the incorporation of the Company’s patented EC platform technology.

2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with F&T Water Solutions, LLC (“F&T”),

May 19, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with F&T Water Solutions, LLC (“F&T”),

for F&T’s owned shares of Natural Aquatic Systems, Inc.

2 unchanged sentences

the SPA, NAS is a 100 % owned subsidiary of the Company.

The Company has three wholly-owned

subsidiaries including NaturalShrimp USA Corporation, NaturalShrimp Global, Inc.

Going Concern

The accompanying unaudited

condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the

United States of America (“GAAP”), assuming the Company will continue as a going concern, which contemplates the

realization of assets and satisfaction of liabilities in the normal course of business.

For the three months ended June 30, 2022,

the Company had a net loss available for common stockholders of approximately $ 2,722,000 .

At June 30, 2022, the Company had an accumulated deficit of approximately $ 152,758,000

and a working capital deficit of approximately $ 16,876,000 .

These factors raise substantial doubt about the Company’s ability to continue as a going concern, within one year from the

issuance date of this filing.

The Company’s ability to continue as a going concern is dependent on its ability to raise the

required additional capital or debt financing to meet short and long-term operating requirements.

During the three months ended June

30, 2022, the Company received the $ 1,500,000

remaining escrow amount related to the proceeds from the issuance of a convertible debenture in December 2021.

Subsequent to

the period end, the Company received $ 250,000 in a loan agreement with related parties.

Management believes that private placements

of equity capital will be needed to fund the Company’s long-term operating requirements.

The Company may also encounter

business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a

requirement for additional cash.

If the Company raises additional funds through the issuance of equity, the percentage ownership of

its current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common

Additional financing may not be available upon acceptable terms, or at all.

If adequate funds are not available or are not

available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities,

which could significantly and materially restrict our operations.

The Company continues to pursue external financing alternatives to

improve its working capital position.

If the Company is unable to obtain the necessary capital, the Company may be unable to develop

its facilities and enter in production.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING

Basis of Presentation

The accompanying unaudited financial

information as of and for the three months ended June 30, 2022 and 2021 has been prepared in accordance with GAAP in the U.S.

financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X.

In the opinion of management,

such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair

presentation of our financial position at such date and the operating results and cash flows for such periods.

Operating results for the

three months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the entire year or for any other

subsequent interim period.

Certain information and footnote

disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted

pursuant to the rules of the U.S.

Company has three wholly-owned subsidiaries including NaturalShrimp USA Corporation, NaturalShrimp Global, Inc.

accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally

accepted in the United States of America (“GAAP”), assuming the Company will continue as a going concern, which contemplates

the realization of assets and satisfaction of liabilities in the normal course of business.

For the six months ended September 30, 2022,

the Company had a net loss from operations of approximately $ 5,553,000 .

At September 30, 2022, the Company had an accumulated deficit

of approximately $ 177,927,000 and a working capital deficit of approximately $ 38,334,000 .

These factors raise substantial doubt about

the Company’s ability to continue as a going concern, within one year from the issuance date of this filing.

The Company’s

ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt financing to meet

short and long-term operating requirements.

During the six months ended September 30, 2022, the Company received the $ 1,500,000 remaining

escrow amount related to the proceeds from the issuance of a convertible debenture in December 2021, as well as $ 1,100,000 from the from

the issuance of a convertible debenture in August 2022, with $ 3,900,000 put into escrow to be held until certain terms are met for a

promissory note (see Note 5) and $ 250,000 in a loan agreement with related parties.

Subsequent to the period end , the Company entered

into a Purchase Agreement with GHS Investments LLC (“GHS”) under which the Company may require GHS to purchase a maximum

of up to 64,000,000 shares of the Company’s common stock (“GHS Purchase Shares”) based on a total aggregate purchase

price of up to $ 5,000,000 over a one-year term that ends on November 4, 2023 (see Note 11).

On November 8, 2022, the Company received

a $ 500,000 , for the sale of 4,972,156 shares of common stock .

Management believes that private placements of equity capital will

be needed to fund the Company’s long-term operating requirements.

The Company may also encounter business endeavors that require

significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash.

If the Company

raises additional funds through the issuance of equity, the percentage ownership of its current shareholders could be reduced, and such

securities might have rights, preferences or privileges senior to our common stock.

Additional financing may not be available upon acceptable

terms, or at all.

If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage

of prospective business endeavors or opportunities, which could significantly and materially restrict our operations.

The Company continues

to pursue external financing alternatives to improve its working capital position.

If the Company is unable to obtain the necessary capital,

the Company may be unable to develop its facilities and enter in production.

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

accompanying unaudited financial information as of and for the three and six months ended September 30, 2022 and 2021 has been prepared

in accordance with GAAP for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of

Regulation S-X.

In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring

adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows

for such periods.

Operating results for the six months ended September 30, 2022 are not necessarily indicative of the results that may

be expected for the entire year or for any other subsequent interim period.

information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant

to the rules of the U.S.

Securities and Exchange Commission, or the SEC.

These unaudited financial statements and related notes

should be read in conjunction with our audited financial statements for the year ended March 31, 2022 included in the Company’s

Annual Report on Form 10-K filed with the SEC on June 29, 2022.

The condensed consolidated balance

sheet at March 31, 2022 has been derived from the audited financial statements at that date but does not include all of the information

and footnotes required by generally accepted accounting principles in the U.S.

for complete financial statements.

These unaudited financial statements and related notes should

be read in conjunction with our audited financial statements for the year ended March 31, 2022 included in the Company’s Annual

Report on Form 10-K filed with the SEC on June 29, 2022.

condensed consolidated balance sheet at March 31, 2022 has been derived from the audited financial statements at that date but does not

include all of the information and footnotes required by GAAP for complete financial statements.

Consolidation

The unaudited condensed

consolidated financial statements include the accounts of NaturalShrimp Incorporated and its wholly-owned subsidiaries,

unaudited condensed consolidated financial statements include the accounts of NaturalShrimp Incorporated and its wholly-owned subsidiaries,

NaturalShrimp USA Corporation, NaturalShrimp Global, Inc.

and Natural Aquatic Systems, Inc.

All significant intercompany accounts

and transactions have been eliminated in consolidation.

Use of Estimates

Preparing financial statements

in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date

of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ

from those estimates.

Basic and Diluted Earnings/Loss per Common Share

Basic and diluted earnings

or loss per share (“EPS”) amounts in the unaudited condensed consolidated financial statements are computed in

accordance with ASC 260 – 10 “Earnings per Share”, which establishes the requirements for presenting EPS.

All significant intercompany accounts and

transactions have been eliminated in consolidation.

financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

and Diluted Earnings/Loss per Common Share

and diluted earnings or loss per share (“EPS”) amounts in the unaudited condensed consolidated financial statements are computed

in accordance with ASC 260 – 10 “Earnings per Share”, which establishes the requirements for presenting EPS.

EPS is based on the weighted average number of shares of common stock outstanding.

Diluted EPS is based on the weighted average

number of shares of common stock outstanding and dilutive common stock equivalents.

Basic EPS is computed by dividing net income or

loss available to common stockholders (numerator) by the weighted average number of shares of common stock outstanding (denominator)

during the period.

For the three months ended June 30, 2022, the Company had 5,000,000 Series A Convertible Preferred Stock which

would be converted at the holder’s option into approximately 740,711,000 underlying common shares, 1,500 of Series E

Redeemable Convertible Preferred shares whose approximately 5,143,000 underlying shares are convertible at the investors’

option at a fixed conversion price of $ 0.35 , and 640 of Series E Redeemable Convertible Preferred shares whose approximately

7,676,000 underlying shares are convertible at the investors’ option at conversion price of 90 % of the average of the two

lowest market prices over the last 10 days, 750,000 shares of Series F Preferred Stock which would be converted at the

holders’ option into approximately 177,771,000 underlying common shares, approximately $ 18,768,000 in a convertible debenture

whose approximately 164,177,000 underlying shares are convertible at the holders’ option at conversion price of 90 % of the

average of the two lowest market prices over the last 10 days and 18,506,429 warrants outstanding which were not included in the

calculation of diluted EPS as their effect would be anti-dilutive.

For the three months ended

June 30, 2021, the Company had 10,000,000 warrants outstanding which were not included in the calculation of diluted EPS as their

effect would be anti-dilutive.

Fair Value Measurements

ASC Topic 820, “ Fair

Value Measurement” , requires that certain financial instruments be recognized at their fair values at our balance sheet dates.

However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but GAAP provides

an option to elect fair value accounting for these instruments.

GAAP requires the disclosure of the fair values of all financial instruments,

regardless of whether they are recognized at their fair values or carrying amounts in our balance sheets.

For financial instruments recognized

at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes

in the fair values of certain financial instruments recognized in income or other comprehensive income.

For financial instruments not

recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property,

plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets.

does not permit nonfinancial assets and liabilities to be remeasured at their fair values.

However, GAAP requires the remeasurement of

such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and

In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other

information, including the gain or loss recognized in income in the period the remeasurement occurred.

The Company did not have any Level

1 or Level 2 assets and liabilities at June 30, 2022 and March 31, 2022.

The derivative and warrant liabilities

are Level 3 fair value measurements.

The following is a summary of

activity of Level 3 derivatives during the three months ended June 30, 2022 and the year ended March 31, 2022:

Diluted EPS is based on the weighted average number

of shares of common stock outstanding and dilutive common stock equivalents.

Basic EPS is computed by dividing net income or loss available

to common stockholders (numerator) by the weighted average number of shares of common stock outstanding (denominator) during the period.

For the six months ended September 30, 2022, the Company had 5,000,000 shares of Series A Convertible Preferred Stock which would be

converted at the holder’s option into approximately 751,323,000 underlying common shares, 1,500 shares of Series E Redeemable Convertible

Preferred shares whose approximately 5,143,000 underlying shares are convertible at the investors’ option at a fixed conversion

price of $ 0.35 , and 170 shares of Series E Redeemable Convertible Preferred shares whose approximately 2,656,000 underlying shares are

convertible at the investors’ option at conversion price of 90 % of the average of the two lowest market prices over the last 10

days, 750,000 shares of Series F Preferred Stock which would be converted at the holders’ option into approximately 180,333,000

underlying common shares, approximately $ 18,768,000 in a convertible debenture whose approximately 259,759,000 underlying shares are

convertible at the holders’ option at conversion price of 90 % of the average of the two lowest market prices over the last 10 days

and 18,573,116 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

For the six months ended September 30, 2021, the Company had Redeemable Convertible Preferred stock with approximately 9,842,000 underlying

common shares, and 10,000,000 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be

anti-dilutive.

Value Measurements

Topic 820, “ Fair Value Measurement” , requires that certain financial instruments be recognized at their fair values

at our balance sheet dates.

However, other financial instruments, such as debt obligations, are not required to be recognized at their

fair values, but GAAP provides an option to elect fair value accounting for these instruments.

GAAP requires the disclosure of the fair

values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our balance

For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument,

along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive

For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial

Instruments.”

assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s

balance sheets.

GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values.

However, GAAP requires

the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of

property, plant and equipment.

In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability

along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

Company did not have any Level 1 or Level 2 assets and liabilities at September 30, 2022 and March 31, 2022.

derivative and warrant liabilities are Level 3 fair value measurements.

following is a summary of activity of Level 3 derivatives during the six months ended September 30, 2022 and the year ended March 31,

DERIVATIVE AND WARRANT AT FAIR VALUE

June 30, 2022

September 30, 2022

March 31, 2022

4 unchanged sentences

Balance at end of period

At June 30, 2022, the fair value

of the derivative liabilities of convertible notes was estimated using the following inputs:

the price of the Company’s common stock

a risk-free interest rate of 2.80 % and expected volatility of the Company’s common stock of 99.02 %.

At March 31, 2022, the fair value

of the derivative liabilities of convertible notes was estimated using the following inputs:

the price of the Company’s common stock

a risk-free interest rate of 2.28 % and expected volatility of the Company’s common stock of 109.47 %.

Warrant liability

June 30, 2022

September 30, 2022, the fair value of the derivative liabilities of convertible notes was estimated by the use of a Binomial model using

the following inputs:

the price of the Company’s common stock of $ 0.15 ;

the conversion price of $ 0.0657 ;

a risk-free interest rate

of 4.05 % and expected volatility of the Company’s common stock of 104,46 %.

March 31, 2022, the fair value of the derivative liabilities of convertible notes was estimated using the following inputs:

of the Company’s common stock of $ 0.225 ;

the conversion price of $ 0.19 ;

a risk-free interest rate of 2.28 % and expected volatility

of the Company’s common stock of 109.47 %.

September 30, 2022

March 31, 2022

4 unchanged sentences

( 1,876,000 )

( 1,987,000 )

Balance at end of period

At June 30, 2022, the fair value

of the warrant liability was estimated using the following inputs:

the price of the Company’s common stock of $ 0.12 ;

interest rate of 3.01 % and expected volatility of the Company’s common stock ranging from 182.4 % to 197.5 % and the remaining terms of each

warrant issuance.

At March 31, 2022, the fair value

of the warrant liability was estimated using a Black Sholes model with the following weighted-average inputs:

September 30, 2022, the fair value of the warrant liability was estimated using the following inputs:

the price of the Company’s

common stock of $ 0.15 ;

a risk-free interest rate of 2.42 % and expected volatility of the Company’s common stock ranging from 185.9 %

to 205.9 % and the remaining terms of each warrant issuance.

Financial Instruments

The Company’s financial

instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic

825, “ Financial Instruments” .

The carrying amount of these financial instruments, with the exception of discounted

debt, as reflected in the unaudited condensed consolidated balance sheets approximates fair value.

Cash and Cash Equivalents

For the purpose of the

unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments purchased with a

maturity of three months or less to be cash equivalents.

There were no cash equivalents at June 30, 2022 and March 31, 2022.

Concentration of Credit Risk

The Company maintains cash balances

at two financial institutions.

Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $ 250,000 .

As of June 30, 2022 and March 31, 2022, the Company’s

cash balance exceeded FDIC coverage.

The Company has not experienced any losses in such accounts and periodically evaluates the

credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

Equipment is carried at historical

value or cost and is depreciated using the straight-line method over the estimated useful lives of the related assets.

Estimated useful

lives are as follows:

a risk-free interest rate ranging from 4.06 % to 4.25 % and expected volatility of the Company’s common stock

ranging from 124.6 % to 174.8 % and the remaining terms of each warrant issuance.

March 31, 2022, the fair value of the warrant liability was estimated using a Black Sholes model with the following weighted-average

the price of the Company’s common stock of $ 0.225 ;

a risk-free interest rate of 2.42 % and expected volatility of the Company’s

common stock ranging from 185.9 % to 205.9 % and the remaining terms of each warrant issuance.

Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under

the provisions of ASC Topic 825, “ Financial Instruments” .

The carrying amount of these financial instruments, with

the exception of discounted debt, as reflected in the unaudited condensed consolidated balance sheets approximates fair value.

and Cash Equivalents

the purpose of the unaudited condensed consolidated statements of cash flows, the Company considers all highly liquid instruments purchased

with a maturity of three months or less to be cash equivalents.

There were no cash equivalents at September 30, 2022 and March 31, 2022.

Concentration

of Credit Risk

Company maintains cash balances at two financial institutions.

Accounts at this institution are insured by the Federal Deposit Insurance

Corporation (FDIC) up to $ 250,000 .

As of September 30, 2022 and

March 31, 2022, the Company’s cash balance exceeded FDIC coverage.

The Company has not experienced any losses in such accounts

and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

is carried at historical value or cost and is depreciated using the straight-line method over the estimated useful lives of the related

Estimated useful lives are as follows:

SCHEDULE OF ESTIMATED USEFUL LIVES

Machinery and Equipment

Furniture and Fixtures

Maintenance and repairs are charged

to expense as incurred.

At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed

from the accounts and the resulting gain or loss, if any, will be reflected in operations.

and Equipment

and repairs are charged to expense as incurred.

At the time of retirement or other disposition of equipment, the cost and accumulated

depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

Company accounts for stock-based compensation to employees and non-employees in accordance with ASC 718.

“ Stock-based Compensation

The Company accounts for stock-based

compensation to employees and non-employees in accordance with ASC 718.

“ Stock-based Compensation to Employees ” is

measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite employee service period.

The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for common stock options and

warrants and the closing price of the Company’s common stock for common share issuances.

Once the stock is issued the appropriate

expense account is charged.

Intangible Assets

The Company has intangible assets,

which were acquired in a patent acquisition, and license rights agreements.

The Company’s patents represent definite lived intangible

assets and will be amortized over the twenty year duration of the patent, unless at some point the useful life is determined to be less

than the protected life of the patent.

The Company’s license rights will be amortized on a straight-line basis over the expected

term of the agreements of ten years.

For the three months ended June 30, 2022, the amortization of the patents was $ 97,500 and the license

rights was $ 270,000 .

There was no amortization in the three months ended June 30, 2021.

The accumulated amortization of the patents was

$ 439,000 and $ 341,500 as of June 30, 2022 and March 31, 2022, respectively.

The accumulated amortization of the license rights was $ 810,000

and $ 540.000 as of June 30, 2022 and March 31, 2022, respectively.

The Company periodically evaluates

the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances warrant a revision to the

remaining period of amortization.

As of June 30, 2022, the Company believes the carrying value of the intangible assets are still recoverable,

and there is no impairment to be recognized.

Impairment of Long-lived Assets

The Company will periodically

evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review and at least

The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset

is separately identifiable and is less than its carrying value.

In that event, a loss is recognized based on the amount by which the carrying

value exceeds the fair value of the long-lived asset.

Fair value is determined primarily using the anticipated cash flows discounted at

a rate commensurate with the risk involved.

Losses on long-lived assets to be disposed of are determined in a similar manner, except that

fair values are reduced for the cost to dispose.

Commitments and Contingencies

to Employees ” is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite

employee service period.

The Company estimates the fair value of stock-based payments using the Black-Scholes option-pricing model for

common stock options and warrants and the closing price of the Company’s common stock for common share issuances.

Once the stock

is issued the appropriate expense account is charged.

Company has intangible assets, which were acquired in a patent acquisition, and license rights agreements.

The Company’s patents

represent definite lived intangible assets and will be amortized over the twenty year duration of the patent, unless at some point the

useful life is determined to be less than the protected life of the patent.

The Company’s license rights will be amortized on a

straight-line basis over the expected term of the agreements of ten years.

For the three and six months ended September 30, 2022, the

amortization of the patents was $ 97,500 and $ 195,000 and the license rights was $ 270,000 and $ 540,000 .

expense for the patents was $ 97,500 and $ 146,500 for the three and six months ended September 30, 2021.

The accumulated amortization

of the patents was $ 536,000 and $ 341,500 as of September 30, 2022 and March 31, 2022, respectively.

The accumulated amortization of the

license rights was $ 1,080,000 and $ 540.000 as of September 30, 2022 and March 31, 2022, respectively.

Company periodically evaluates the remaining useful lives of its finite-lived intangible assets to determine whether events and circumstances

warrant a revision to the remaining period of amortization.

As of September 30, 2022, the Company believes the carrying value of the

intangible assets are still recoverable, and there is no impairment to be recognized.

of Long-lived Assets

Company will periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant

such a review and at least annually.

The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted

cash flow from such asset is separately identifiable and is less than its carrying value.

In that event, a loss is recognized based on

the amount by which the carrying value exceeds the fair value of the long-lived asset.

Fair value is determined primarily using the anticipated

cash flows discounted at a rate commensurate with the risk involved.

Losses on long-lived assets to be disposed of are determined in

a similar manner, except that fair values are reduced for the cost to dispose.

and Contingencies

conditions may exist as of the date the unaudited condensed consolidated financial statements are issued, which may result in a loss

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and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment.

assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result

in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims

as well as the perceived merits of the amount of relief sought or expected to be sought therein.

loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings,

the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived

merits of the amount of relief sought or expected to be sought therein.

the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability

can be estimated, then the estimated liability would be accrued in the Company’s unaudited condensed consolidated financial

If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or

is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible

loss if determinable and material, would be disclosed.

can be estimated, then the estimated liability would be accrued in the Company’s unaudited condensed consolidated financial statements.

If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable

but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable

and material, would be disclosed.

contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee

would be disclosed.

Recently Issued Accounting Standards

In August 2020, the FASB issued

ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s

Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”),

which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

This ASU (1) simplifies

the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features

in equity, separately from the host convertible debt or preferred stock;

(2) revises the scope exception from derivative accounting in

ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified

in stockholders’ equity, by removing certain criteria required for equity classification;

and (3) revises the guidance in ASC 260,

Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted

In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled

in cash or shares.

For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December

15, 2021 including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning

after December 15, 2020.

For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including

interim periods within those fiscal years.

Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot

adopt the guidance in an interim reporting period.

The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated

financial statements and related disclosures.

As of June 30, 2022, there were

several new accounting pronouncements issued by the Financial Accounting Standards Board.

Each of these pronouncements, as applicable,

has been or will be adopted by the Company.

Management does not believe the adoption of any of these accounting pronouncements has had

or will have a material impact on the Company’s consolidated financial statements.

Management’s Evaluation of Subsequent

Company evaluates events that have occurred after the balance sheet date of June 30, 2022, through the date which the unaudited

Issued Accounting Standards

August 2020, the Financial Accounting Standards Board issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-

20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and

Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments

with characteristics of liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible

preferred stock by removing the existing guidance in ASC 470-20, Debt:

Debt with Conversion and Other Options, that requires entities

to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred

(2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features

that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required

for equity classification;

and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted EPS

for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for purposes of calculating

diluted EPS when an instrument may be settled in cash or shares.

For SEC filers, excluding smaller reporting companies, ASU 2020-06 is

effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years.

Early adoption is permitted,

but no earlier than fiscal years beginning after December 15, 2020.

For all other entities, ASU 2020-06 is effective for fiscal years

beginning after December 15, 2023, including interim periods within those fiscal years.

Entities should adopt the guidance as of the

beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period.

The Company is currently evaluating

the impact that ASU 2020-06 may have on its consolidated financial statements and related disclosures.

of September 30, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board.

Each of these

pronouncements, as applicable, has been or will be adopted by the Company.

Management does not believe the adoption of any of these accounting

pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

Evaluation of Subsequent Events

Company evaluates events that have occurred after the balance sheet date of September 30, 2022, through the date which the unaudited

condensed consolidated financial statements were issued.

Based upon the review, other than described in Note 10 – Subsequent

Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or

disclosure in the unaudited condensed consolidated financial statements.

NOTE 3 – FIXED ASSETS

A summary of the fixed assets as of June 30, 2022

and March 31, 2022 is as follows:

Based upon the review, other than described in Note 11 – Subsequent Events,

the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in

the unaudited condensed consolidated financial statements.

3 – FIXED ASSETS

summary of the fixed assets as of September 30, 2022 and March 31, 2022 is as follows:

SCHEDULE OF FIXED ASSETS

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Fixed assets, net

The unaudited condensed

consolidated statements of operations reflect depreciation expense of approximately $ 525,000 and $ 355,000 for the three months ended

June 30, 2022 and 2021, respectively.

NOTE 4 – SHORT-TERM NOTE AND LINES OF CREDIT

The Company has a working capital

line of credit with Capital One Bank for $ 50,000 .

The line of credit bears an interest rate of prime plus 25.9 basis points , which totaled

30.65 % as of June 30, 2022.

unaudited condensed consolidated statements of operations reflect depreciation expense of approximately $ 408,000 and $ 404,000 , and $ 933,000

and $ 759,000 for the three and six months ended September 30, 2022 and 2021, respectively.

July 3, 2022, the Company’s building containing its water treatment and purification system in La Coste, Texas (the “Water

Treatment Plant”) was completely destroyed in a fire.

The Water Treatment Plant is a separate building consisting of approximately

8,000 square feet located apart from the production building which was not damaged.

The Company received $ 700,000 from the insurance

company for the claim filed for the fire damage.

Due to the damage caused by the fire, the Company has written off approximately $ 1,764,000

of the fixed assets, and $ 325,000 of the accumulated depreciation, which, less the $ 700,000 insurance settlement, has resulted in the

recognition of a Loss due to fire in the condensed consolidated statement of operations.

4 – SHORT-TERM NOTE AND LINES OF CREDIT

Company has a working capital line of credit with Capital One Bank for $ 50,000 .

The line of credit bears an interest rate of prime plus

25.9 basis points , which totaled 31.625 % as of September 30, 2022.

The line of credit is unsecured.

The balance of the line of credit was $ 9,580 at both June 30, 2022 and March

The Company also has a working

capital line of credit with Chase Bank for $ 25,000 .

The line of credit bears an interest rate of prime plus 10 basis points, which totaled

14.75 % as of June 30, 2022.

The line of credit is secured by assets of the Company’s subsidiaries.

The balance of the line of credit

is $ 10,237 at June 30, 2022 and March 31, 2022.

NOTE 5 – CONVERTIBLE DEBENTURES

December 15, 2021 Debenture

Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”) on December

was $ 9,580 at both September 30, 2022 and March 31, 2022.

Company also has a working capital line of credit with Chase Bank for $ 25,000 .

The line of credit bears an interest rate of prime plus

10 basis points, which totaled 15.725 % as of September 30, 2022.

The line of credit is secured by assets of the Company’s subsidiaries.

The balance of the line of credit is $ 10,237 at September 30, 2022 and March 31, 2022.

5 – PROMISSORY NOTE

Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”) on August

Pursuant to the SPA, the Investor purchased a secured promissory note (the “Note”) in the aggregate principal amount

totaling approximately $ 16,320,000 (the “Principal Amount”).

The Note has an interest rate of 12 % per annum, with a maturity

date 24 months from the issuance date of the Note (the “Maturity Date”).

The Note carried an original issue discount totaling

$ 1,300,000 and a transaction expense amount of $ 20,000 , both of which are included in the principal balance of the Note.

$ 2,035,000 in debt issuance costs, including fees paid in cash of $ 1,095,000 and 3,000,000 warrants issued to placement agents with a

fair value of $ 940.000 .

The warrant fair value was estimated using the Black Scholes Model, with the following inputs:

the price of the

Company’s common stock of $ 0.32 ;

a risk-free interest rate of 1.19 %, the expected volatility of the Company’s common stock

the estimated remaining term, a dividend rate of 0 %.

The warrants were classified as a liability, as it is not known if there

will be sufficient authorized shares to be issued upon settlement, based on the conversion terms of the convertible debt.

on the date that is 6 months from the issuance date of the Note, the Investor has the right to redeem up to $ 1,000,000 of the outstanding

balance per month.

Payments may be made by the Company, at the Company’s option, (a) in cash, or (b) by paying the redemption amount

in the form of shares of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”), per the following

the number of redemption shares equals the portion of the applicable redemption amount divided by the Redemption Repayment Price.

The “Redemption Repayment Price” equals 90% multiplied by the average of the two lowest volume weighted average price per

share of the Common Stock during the ten (10) trading days immediately preceding the date that the Investor delivers notice electing to

redeem a portion of the Note.

The redemption amount shall include a premium of 15% of the portion of the outstanding balance being paid

(the “Exit Fee”).

As the Exit Fee is to be included in every settlement of the Note, an additional 15% of the principal balance,

which totals $ 2,448,000 , was recognized along with the principal balance, and offset by a contra account in a manner similar to a debt

In addition to the Investor’s right of redemption, the Company has the option to prepay the Notes at any time prior to

the Maturity Date by paying a premium of 15% plus the principal, interest, and fees owed as of the prepayment date.

Within 180 days of the

issuance date of the Note, the Company will obtain an effective registration statement or a supplement to any existing registration

statement or prospectus with the SEC registering at least $ 15,000,000

in shares of Common Stock for the Investor’s benefit such that any redemption using shares of Common Stock could be done using

registered Common Stock.

Additionally, as soon as reasonably possible following the issuance of the Note, the Company will cause the

Common Stock to be listed for trading on either of (a) NYSE, or (b) NASDAQ (in either event, an “Uplist”).

the Company has not effectuated the Uplist by March 1, 2022, the then-current outstanding balance will be increased by 10%.

February 7, 2022, the Company and the Lender entered into an amendment to the SPA, which extended the date by which the Uplist must

be completed to April 15, 2022.

In consideration of the grant of the extension there was an extension fee of $ 249,079

added to the principal balance, which has been recognized as a financing cost in the accompanying unaudited condensed consolidated

financial statement.

Subsequently, the date by which the Uplist had to be completed was further extended to June 15, 2022, and again

to November 15, 2022, with no additional fee included.

The Company will make a one-time payment to the Investor equal to 15% of the

gross proceeds the Company receives from the offering expected to be effected in connection with the Uplist (whether from the sale

of shares of its Common Stock and / or preferred stock) within ten (10) days of receiving such amount.

In the event Borrower does

not make this payment, the then-current outstanding balance will be increased by 10%.

totaling approximately $ 5,433,333 .

The Note has an interest rate of 12 % per annum, with a maturity date nine months from the issuance

date of the Note.

The Note carried an original issue discount totaling $ 433,333 and a transaction expense amount of $ 10,000 , both of

which are included in the principal balance of the Note.

On the Closing Date the Company received $ 1,100,000 , with $ 3,900,000 put into

escrow to be held until certain terms are met, which includes $ 3,400,000 upon the completion of a successful uplist to NYSE or NASDAQ.

The SPA includes a Security Agreement, whereby the note is secured by the collateral set forth in the agreement, covering all of the

assets of the Company.

All payments made by the Company under the terms in the note, including upon repayment of this Note at maturity,

shall be subject to an exit fee of 15 % of the portion of the Outstanding Balance being paid (the “Exit Fee”).

Fee is to be included in every settlement of the Note, an additional 15 % of the principal balance, which totals $ 816,500 , was recognized

along with the principal balance, and offset by a contra account in a manner similar to a debt discount.

soon as reasonably possible, the Company will cause the Common Stock to be listed for trading on either of (a) NYSE, or (b) NASDAQ (in

either event, an “Uplist”).

In the event the Company has not effectuated the Uplist by November 15, 2022, the then-current

outstanding balance will be increased by 10 %.

Following the Uplist, while the Note is still outstanding, ten days after the Company may

have a sale of any of its shares of common stock or preferred stock, there shall be a Mandatory Prepayment equal to the greater of $ 3,000,000

or thirty-three percent of the gross proceeds of the equity sale .

6 – CONVERTIBLE DEBENTURES

15, 2021 Debenture

Company entered into a securities purchase agreement (the “December 2021 SPA”) with an investor (the “December 2021

Investor”) on December 15, 2021.

Pursuant to the December 2021 SPA, the December 2021 Investor purchased a secured promissory note

(the “December 2021 Note”) in the aggregate principal amount totaling approximately $ 16,320,000 .

The December 2021 Note has

an interest rate of 12 % per annum, with a maturity date 24 months from the issuance date of the December 2021 Note (the “Maturity

The December 2021 Note carried an original issue discount totaling $ 1,300,000 and a transaction expense amount of $ 20,000 ,

both of which are included in the principal balance of the December 2021 Note.

The December 2021 Note had $ 2,035,000 in debt issuance

costs, including fees paid in cash of $ 1,095,000 and 3,000,000 warrants issued to placement agents with a fair value of $ 940.000 .

warrant fair value was estimated using the Black Scholes Model, with the following inputs:

the price of the Company’s common stock

a risk-free interest rate of 1.19 %, the expected volatility of the Company’s common stock of 209.9 %;

the estimated remaining

term, a dividend rate of 0 %.

The warrants were classified as a liability, as it is not known if there will be sufficient authorized shares

to be issued upon settlement, based on the conversion terms of the convertible debt.

on the date that is 6 months from the issuance date of the December 2021 Note, the December 2021 Investor has the right to redeem up

to $ 1,000,000 of the outstanding balance per month.

Payments may be made by the Company, at the Company’s option, (a) in cash,

or (b) by paying the redemption amount in the form of shares of the Company’s common stock, par value $ 0.0001 per share (the “Common

Stock”), per the following formula:

the number of redemption shares equals the portion of the applicable redemption amount divided

by the Redemption Repayment Price.

The “Redemption Repayment Price” equals 90% multiplied by the average of the two lowest

volume weighted average price per share of the Common Stock during the ten (10) trading days immediately preceding the date that the

December 2021 Investor delivers notice electing to redeem a portion of the December 2021 Note.

The redemption amount shall include a

premium of 15% of the portion of the outstanding balance being paid (the “Exit Fee”).

As the Exit Fee is to be included in

every settlement of the December 2021 Note, an additional 15% of the principal balance, which totals $ 2,448,000 , was recognized along

with the principal balance, and offset by a contra account in a manner similar to a debt discount.

In addition to the December 2021 Investor’s

right of redemption, the Company has the option to prepay the December 2021 Notes at any time prior to the Maturity Date by paying a

premium of 15% plus the principal, interest, and fees owed as of the prepayment date.

180 days of the issuance date of the December 2021 Note, the Company will obtain an effective registration statement or a supplement

to any existing registration statement or prospectus with the SEC registering at least $ 15,000,000 in shares of Common Stock for the

December 2021 Investor’s benefit such that any redemption using shares of Common Stock could be done using registered Common Stock.

Additionally, as soon as reasonably possible following the issuance of the December 2021 Note, the Company will cause the Common Stock

to be listed for trading on either of (a) NYSE, or (b) NASDAQ (in either event, an “Uplist”).

In the event the Company has

not effectuated the Uplist by March 1, 2022, the then-current outstanding balance will be increased by 10%.

On February 7, 2022, the

Company and the December 2021 Investor entered into an amendment to the December 2021 SPA, which extended the date by which the Uplist

must be completed to April 15, 2022.

In consideration of the grant of the extension there was an extension fee of $ 249,079 added to the

principal balance, which has been recognized as a financing cost in the accompanying unaudited condensed consolidated financial statement.

Subsequently, the date by which the Uplist had to be completed was further extended to June 15, 2022, and again to November 15, 2022,

with no additional fee included .

The Company will make a one-time payment to the December 2021 Investor equal to 15%

of the gross proceeds the Company receives from the offering expected to be effected in connection with the Uplist (whether from the

sale of shares of its Common Stock and / or preferred stock) within ten (10) days of receiving such amount.

In the event the Company

does not make this payment, the then-current outstanding balance will be increased by 10%.

In addition, the Company has 30 days in which

to secure the Note and grant the Lender a first position security interest in the real property in Texas and Iowa, and if it is not

effectuated within the 30 days the outstanding balance will be increased by 15%.

The Company is required to reserve 65,000,000

shares of common stock from its authorized and unissued common stock and to add 100,000,000

shares of common stock to the Share Reserve on or before March 10, 2022.

The Note also contains certain

negative covenants and Events of Default, which in addition to common events of default, include a failure to deliver conversion shares,

the Company fails to maintain the share reserve, the occurrence of a Fundamental Transaction without the Lenders written consent, the

Company effectuates a reverse split of its common stock without 20 trading days written notice to Lender, fails to observe or perform

or breaches any covenant, and, the Company or any of its subsidiaries, breaches any covenant or other term or condition contained in any

Other Agreements in any material.

Upon an Event of a Default, at its option and sole discretion, the Investor may consider the Note immediately

due and payable.

Upon such an Event of Default, the interest rate increases to 18% per annum and the outstanding balance of the Note increases

to secure the December 2021 Note and grant the December 2021 Investor a first position security interest in the real property in Texas

and Iowa, and if it is not effectuated within the 30 days the outstanding balance will be increased by 15%.

The Company is required to

reserve 65,000,000 shares of common stock from its authorized and unissued common stock and to add 100,000,000 shares of common stock

to the Share Reserve on or before March 10, 2022.

December 2021 Note also contains certain negative covenants and Events of Default, which in addition to common events of default, include

a failure to deliver conversion shares, the Company fails to maintain the share reserve, the occurrence of a Fundamental Transaction

without the December 2021 Investor’s written consent, the Company effectuates a reverse split of its common stock without 20 trading

days written notice to the December 2021 Investor, fails to observe or perform or breaches any covenant, and, the Company or any of its

subsidiaries, breaches any covenant or other term or condition contained in any Other Agreements in any material.

Upon an Event of a

Default, at its option and sole discretion, the December 2021 Investor may consider the December 2021 Note immediately due and payable.

Upon such an Event of Default, the interest rate increases to 18% per annum and the outstanding balance of the December 2021 Note increases

from 5% to 15%, depending upon the specific Event of Default .

As of June 30, 2022, the Company is in full compliance with the covenants

As of September 30, 2022, the Company is in full compliance with the covenants

and Events of Default.

The conversion feature meets the

definition of a derivative and therefore requires bifurcation and was accounted for as a derivative liability.

As of June 30, 2022 the

fair value of the derivative is $ 11,787,000 , with a change in fair value of $ 1,314,000 recognized in the three months ended June 30, 2022.

NOTE 6 – STOCKHOLDERS’ EQUITY

Preferred Stock

As of June 30, 2022 and

March 31, 2022, the Company had 200,000,000 shares

of preferred stock authorized with a par value of $ 0.0001 .

Of this amount, 5,000,000 shares

of Series A preferred stock are authorized and outstanding, 5,000 shares

Series B preferred stock are authorized and no shares

outstanding, 5,000 shares

Series D preferred stock are authorized with no shares

outstanding 10,000 shares

Series E preferred stock are authorized and 2,140 and 2,840 outstanding,

respectively, and 750,000 shares

of Series F preferred stock are authorized with 750,000 outstanding,

respectively.

conversion feature meets the definition of a derivative and therefore requires bifurcation and was accounted for as a derivative liability.

As of September 30, 2022 the fair value of the derivative is $ 30,028,000 , with a change in fair value of $ 16,927,000 recognized in the

six months ended September 30, 2022.

7 – STOCKHOLDERS’ EQUITY

of September 30, 2022 and March 31, 2022, the Company had 200,000,000 shares of preferred stock authorized with a par value of $ 0.0001 .

Of this amount, 5,000,000 shares of Series A preferred stock are authorized and outstanding, 5,000 shares Series B preferred stock are

authorized and no shares outstanding, 5,000 shares Series D preferred stock are authorized with no shares outstanding 10,000 shares Series

E preferred stock are authorized and 1,540 and 2,840 outstanding, respectively, and 750,000 shares of Series F preferred stock are authorized

with 750,000 outstanding, respectively.

E Preferred Stock

June 16, 2022, one of the holders of our Series E Convertible Preferred Stock chose to exercise their right, pursuant to the Certificate

of Designation relating to the Series E Convertible Preferred Stock, to receive the rights extended to the convertible noteholder, of

90% multiplied by the average of the two lowest volume weighted average price per share of the Common Stock during the ten (10) trading

days immediately preceding the date of conversion.

As the exercise of the conversion price adjustment was similar to a down round, and

the Company has not yet adopted ASU 2020-06, the accounting treatment of ASU 2017-11 was applied, whereby the adjustment was treated

as a contingent beneficial conversion feature recognized as of the triggering date.

As of June 16, 2022, this holder held 940 shares

of the Series E preferred stock.

The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other

options”, and based on the market price of the common stock of the Company as compared to the conversion price, determined there

was a $ 99,000 beneficial conversion feature to recognize, which was fully amortized as there is no remaining redemption date to their

Series E Preferred Stock.

On June 16, 2022, one of the holders

of our Series E Convertible Preferred Stock chose to exercise their right, pursuant to the Certificate of Designation relating to the

Series E Convertible Preferred Stock, to receive the rights extended to the convertible noteholder, of 90% multiplied by the average of

the two lowest volume weighted average price per share of the Common Stock during the ten (10) trading days immediately preceding the

date of conversion.

As the exercise of the conversion price adjustment was similar to a down round, and the Company has not yet adopted

ASU 2020-06, the accounting treatment of ASU 2017-11 was applied, whereby the adjustment was treated as a contingent beneficial conversion

feature recognized as of the triggering date.

As of June 16, 2022, this holder held 940 shares of the Series E preferred stock.

analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price

of the common stock of the Company as compared to the conversion price, determined there was a $ 99,000 beneficial conversion feature to

recognize, which was fully amortized as there is no remaining redemption date to their Series E Preferred Stock.

During the three months ended June 30, 2022, 700 shares

of Series E Preferred Stock were converted into 4,537,240 shares of common stock.

During the three months ended

June 30, 2022, the amortization of the beneficial conversion feature of the Series E preferred stock was $ 141,500 .

The Company is accreting

the carrying value, of the Series E Preferred Stock in temporary equity up to the redemption value over the period until its redemption.

For the three months ended June 30, 2022, $ 278,500 was accreted, and approximately $ 637,000 to date as of June 30, 2022.

Common Shares Issued to Consultant

On April 14, 2021, 500,000 shares

of common stock were issued to a consultant per an agreement entered into on January 20, 2021 for advisory services for a two-year period.

The shares had a fair value of $ 195,000 , based on the market price of $ 0.39 on the grant date.

62,500 common shares shall vest each quarter

through October 1, 2022, at $ 24,275 , with $ 146,750 vested through June 30, 2022.

Common Stock Issued in Relation to Business Agreement

As of June 22, 2022, 250,000 common

shares were issued in relation to a trial distribution agreement, which after the result of the trial period, both parties may negotiate

and execute a long term distribution agreement.

The shares will be paid by the Company withholding sufficient profits from the sale by

the other party of the live shrimp.

Options and Warrants

The Company has not granted any

options since inception.

All of the warrants issued have

been recognized as a liability, as of the issuance of the convertible debenture on December 15, 2021, based on the fact it as it is not

known if there will be sufficient authorized shares to be issued upon settlement, based on the conversion terms of the existing convertible

The 18,506,429 warrants outstanding

as of June 30, 2022, were revalued as of period end for a fair value of $ 2,008,000 , with a decrease in the fair value of $ 1,915,000 recognized

on the Statement of Operations.

The fair value was estimated using Black Scholes Model, with the following inputs:

the price of the Company’s

common stock of $ 0.12 ;

a risk-free interest rate of 3.01 %, the expected volatility of the Company’s common stock ranging from 182.4 %

the estimated remaining term, a dividend rate of 0 %,

NOTE 7 – RELATED PARTY TRANSACTIONS

Accrued Payroll – Related Parties

Included in other accrued

expenses on the accompanying unaudited condensed consolidated balance sheet approximately $ 119,000 , owing to a key employee (which

includes $ 50,000 in both fiscal years, from consulting services prior to his employment) as of both June 30, 2022 and March 31,

The additional rights of the convertible note which were applied include the 10 % increase in the outstanding

balance if an uplist to a national exchange was not consummated by the Company by March 1, 2022, for an increase of 130 Series E Preferred

shares with a stated value of $ 156,000 , as well as an exit fee of 15 % to be recognized upon conversions of the Series E Preferred shares

into shares of common stock.

the six months ended September 30, 2022, 1,300 shares of Series E Preferred Stock were converted into 14,458,127 shares of common stock.

the three and six months ended September 30, 2022, the amortization of the beneficial conversion feature of the Series E preferred stock

was $ 42,500 and $ 85,000 .

The Company is accreting the carrying value, of the Series E Preferred Stock in temporary equity up to the redemption

value over the period until its redemption.

For the three and six months ended September 30, 2022, $ 278,500 and $ 557,000 was accreted,

and approximately $ 916,000 to date as of September 30, 2022.

Shares Issued to Consultant

August 1, 2022, the Company issued 250,000 shares of common stock to a consultant per the terms of an agreement from June 2021, to be

issued upon the approval of a patent.

April 14, 2021, 500,000 shares of common stock were issued to a consultant per an agreement entered into on January 20, 2021 for

advisory services for a two-year period.

The shares had a fair value of $ 195,000 , based on the market price of $ 0.39 on the grant

A total of 62,500 common shares shall vest each quarter through October 1, 2022, at $ 24,275 , with approximately $ 171,000

vested through September 30, 2022.

Stock Issued in Relation to Business Agreement

of June 22, 2022, 250,000 common shares were issued in relation to a trial distribution agreement, which after the result of the trial

period, both parties may negotiate and execute a long-term distribution agreement.

The shares will be paid by the Company withholding

sufficient profits from the sale by the other party of the live shrimp.

Company has not granted any options since inception.

of the warrants issued have been recognized as a liability, as of the issuance of the convertible debenture on December 15, 2021, based

on the fact it as it is not known if there will be sufficient authorized shares to be issued upon settlement, based on the conversion

terms of the existing convertible debt.

18,573,116 warrants outstanding as of September 30, 2022, were revalued as of period end for a fair value of $ 2,047,000 , with a decrease

in the fair value of $ 1,876,000 recognized on the unaudited condensed consolidated statement of operations.

The fair value was estimated

using Black Scholes Model, with the following inputs:

the price of the Company’s common stock of $ 0.15 ;

a risk-free interest rate

of 4.06 % to 4.25 %, the expected volatility of the Company’s common stock ranging from 124.6 % to 174.8 %;

the estimated remaining

term, a dividend rate of 0 %,

8 – RELATED PARTY TRANSACTIONS

Payroll – Related Parties

in other accrued expenses on the accompanying unaudited condensed consolidated balance sheet approximately $ 119,000 , owing to a key employee

(which includes $ 50,000 in both fiscal years, from consulting services prior to his employment) as of both September 30, 2022 and March

These amounts include both accrued payroll and accrued allowances and expenses.

Bonus Compensation – Related Party

On May 11, 2021, the Company paid

the Chief Financial Officer a bonus of $ 300,000 .

On August 10, 2021, the Board of Directors ratified the bonus payment to the CFO and

awarded the President and the Chief Technology Officer compensation bonuses of $ 300,000 each.

The bonuses to the President and CTO are

to be distributed within the next twelve months from the award date, and are included in accrued expenses, related parties as of June

As of June 30, 2022, $ 200,000 has been paid each to the President and Chief Technology Officer, with a total of $ 200,000 remaining

in accrued expenses, related parties.

NaturalShrimp Holdings, Inc.

On January 1, 2016 the Company

entered into a notes payable agreement with NaturalShrimp Holdings, Inc.(“NSH”), a shareholder.

The note payable has no set

monthly payment or maturity date with a stated interest rate of 2 %.

During the year ended March 31, 2022, the Company paid off $ 655,750

of the note payable.

The outstanding balance is approximately $ 77,000 as of both June 30, 2022 and March 31, 2022.

As of June 30, 2022

and March 31, 2022, accrued interest payable was approximately $ 74,000 and $ 74,000 , respectively.

Shareholder Notes

The Company has entered into

several working capital notes payable to multiple shareholders of NSH and Bill Williams, a former officer and director, and a

shareholder of the Company, for a total of $ 486,500 .

Compensation – Related Party

May 11, 2021, the Company paid the Chief Financial Officer a bonus of $ 300,000 .

On August 10, 2021, the Board of Directors ratified the

bonus payment to the CFO and awarded the President and the Chief Technology Officer compensation bonuses of $ 300,000 each.

to the President and CTO are to be distributed within the next twelve months from the award date, and are included in accrued expenses,

related parties as of September 30, 2022.

As of September 30, 2022, $ 200,000 has been paid each to the President and Chief Technology

Officer, with a total of $ 200,000 remaining in accrued expenses, related parties.

NaturalShrimp

Holdings, Inc.

January 1, 2016 the Company entered into a notes payable agreement with NaturalShrimp Holdings, Inc.(“NSH”), a shareholder.

The note payable has no set monthly payment or maturity date with a stated interest rate of 2 %.

During the year ended March 31, 2022,

the Company paid off $ 655,750 of the note payable.

The outstanding balance is approximately $ 77,000 as of both September 30, 2022 and

March 31, 2022.

As of September 30, 2022 and March 31, 2022, accrued interest payable was approximately $ 74,000 and $ 74,000 , respectively.

August 10, 2022, the Company issued a loan agreement for $ 300,000 , with related parties, which is to be considered priority debt

of the Company.

As of this filing, five of the related parties have entered into promissory notes under the loan agreement for $ 50,000

each, for a total of cash received of $ 250,000 .

The notes bear interest at a 10 % per annum and are due in one year from the date of the

Company has entered into several working capital notes payable to multiple shareholders of NSH and Bill Williams, a former officer and

director, and a shareholder of the Company, for a total of $ 486,500 .

The notes are unsecured and bear interest at 8 %.

These notes had stock issued

in lieu of interest and have no set monthly payment or maturity date.

The balance of these notes was $ 356,404 as of both June 30,

2022 and March 31, 2022, and is classified as a current liability on the unaudited condensed consolidated balance sheets.

30, 2022 and March 31, 2022, accrued interest payable was approximately $ 154,000 and $ 146,000 , respectively.

Beginning in 2010, the

Company started entering into several working capital notes payable with various shareholders of NSH for a total of $ 290,000 and

bearing interest at 8 %.

The balance of these notes at June 30, 2022 and March 31, 2022 was $ 54,647 and is classified as a current

These notes had

stock issued in lieu of interest and have no set monthly payment or maturity date.

The balance of these notes was $ 356,404 as of both

September 30, 2022 and March 31, 2022 and is classified as a current liability on the unaudited condensed consolidated balance sheets.

As of September 30, 2022 and March 31, 2022, accrued interest payable was approximately $ 161,000 and $ 146,000 , respectively.

in 2010, the Company started entering into several working capital notes payable with various shareholders of NSH for a total of $ 290,000

and bearing interest at 8 %.

The balance of these notes at September 30, 2022 and March 31, 2022 was $ 54,647 and is classified as a current

liability on the unaudited condensed consolidated balance sheets.

NOTE 8 – LEASE

On May 26, 2021, the Company

entered into a sublease for a new office space in Texas, on two floors.

The lease commenced on August 1, 2021 for a monthly rent of

$ 7,000 , and will terminate on October 31, 2025 , for one of the spaces, and commence in the second half of 2022 for monthly rent of

$ 1,727 , and terminate on October 31, 2025 , for the second space.

On June 2, 2021, the Company paid a deposit of $ 52,362 which shall

be applied to the last six months of the sublease term, and $ 17,454 security deposit, which is included in Prepaid expenses on the

accompanying unaudited condensed consolidated balance sheet.

May 26, 2021, the Company entered into a sublease for a new office space in Texas, on two floors.

The lease commenced on August 1, 2021

for a monthly rent of $ 7,000 , and will terminate on October 31, 2025 , for one of the spaces, and commence in the second half of 2022

for monthly rent of $ 1,727 , and terminate on October 31, 2025 , for the second space.

On June 2, 2021, the Company paid a deposit of $ 52,362

which shall be applied to the last six months of the sublease term, and $ 17,454 security deposit, which is included in Prepaid expenses

on the accompanying unaudited condensed consolidated balance sheet.

The Company assessed its new office lease as an operating lease.

At inception, on August 1, 2021,

the ROU and lease liability was calculated as approximately $ 316,000 , based on the net present value of the future lease payments over

the term of the lease.

When available, the Company uses the rate implicit in the lease discount payments as the incremental borrowing

rate to calculate the net present value;

however, the rate implicit in the lease is not readily determinable for their corporate office

In this case, the Company estimated its incremental borrowing rate of 5.75 % as the interest rate it could have incurred to borrow

an amount equal to the lease payments in a similar economic environment on a collateralized basis over a term similar to the lease term.

The Company estimated its rate based on observable risk-free interest rate and credit spreads for commercial debt of a similar duration

as to what rate would have been effective for the Company.

On September 8, 2021, the Company

entered into an equipment lease agreement for VOIP phone equipment.

The lease term is for sixty months, with a monthly lease payment of

approximately $ 300 .

inception, on August 1, 2021, the ROU and lease liability was calculated as approximately $ 316,000 , based on the net present value of

the future lease payments over the term of the lease.

When available, the Company uses the rate implicit in the lease discount payments

as the incremental borrowing rate to calculate the net present value;

however, the rate implicit in the lease is not readily determinable

for their corporate office lease.

In this case, the Company estimated its incremental borrowing rate of 5.75 % as the interest rate it

could have incurred to borrow an amount equal to the lease payments in a similar economic environment on a collateralized basis over

a term similar to the lease term.

The Company estimated its rate based on observable risk-free interest rate and credit spreads for commercial

debt of a similar duration as to what rate would have been effective for the Company.

September 8, 2021, the Company entered into an equipment lease agreement for VOIP phone equipment.

The lease term is for sixty months,

with a monthly lease payment of approximately $ 300 .

The Company assessed the equipment lease as an operating lease.

The Company determined the Right of Use asset and

Lease liability values at inception as approximately $ 17,000 calculated at the present value of all future lease payments for the lease

term, using an incremental borrowing rate of 5.75 %.

NOTE 9 – COMMITMENTS AND CONTINGENCIES

Executive Employment Agreements –Gerald Easterling

On April 1, 2015, the Company

entered into an employment agreement with Gerald Easterling at the time as the Company’s President, effective as of April 1, 2015

(the “Employment Agreement”).

The Employment Agreement is terminable

at will and each provide for a base annual salary of $ 96,000 .

On May 4, 2021, the Company’s Board of Directors approved a salary

The Company determined

the Right of Use asset and Lease liability values at inception as approximately $ 17,000 calculated at the present value of all future

lease payments for the lease term, using an incremental borrowing rate of 5.75 %.

10 – COMMITMENTS AND CONTINGENCIES

Employment Agreements –Gerald Easterling

April 1, 2015, the Company entered into an employment agreement with Gerald Easterling at the time as the Company’s President,

effective as of April 1, 2015 (the “Employment Agreement”).

Employment Agreement is terminable at will and each provide for a base annual salary of $ 96,000 .

On May 4, 2021, the Company’s

Board of Directors approved a salary for Mr.

Easterling of $ 180,000 per annum.

In addition, the Employment Agreement provides that the employee is entitled, at the sole and

absolute discretion of the Company’s Board of Directors, to receive performance bonuses.

Easterling will also be entitled to

certain benefits including health insurance and monthly allowances for cell phone and automobile expenses.

The Employment Agreement provides

that in the event the employee is terminated without cause or resigns for good reason (as defined in their Employment Agreement), the

employee will receive, as severance the employee’s base salary for a period of 60 months following the date of termination.

event of a change of control of the Company, the employee may elect to terminate the Employment Agreement within 30 days thereafter and

upon such termination would receive a lump sum payment equal to 500% of the employee’s base salary .

The Employment Agreement contains

certain restrictive covenants relating to non-competition, non-solicitation of customers and non-solicitation of employees for a period

of one year following termination of the employee’s Employment Agreement.

NOTE 10 – SUBSEQUENT EVENTS

The Company evaluated subsequent

events and transactions that occurred after the balance sheet date up to the date that the financial statement was issued.

this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement.

On July 3, 2022, the Company’s

building containing its water treatment and purification system in La Coste, Texas (the “Water Treatment Plant”) was completely

destroyed in a fire.

The Water Treatment Plant is a separate building consisting of approximately 8,000 square feet located apart from

the production building which was not damaged.

The Company has filed a claim with the insurance company which, as of this filing, has

not yet been completed.

Due to the damage caused by the fire, the Company has written off approximately $ 1,764,000 of the fixed assets,

and $ 325,000 of the accumulated depreciation, for a net impairment to be recognized of $ 1,439,000 .

On August 1, 2022, the Company

issued 250,000 shares of common stock to a consultant per the terms of an agreement from June 2021, to be issued upon the approval of

August 10, 2022, the Company issued a loan agreement for $ 300,000 , with related parties, which is to be considered priority debt of the

As of this filing, five of the related parties have entered into promissory notes under the loan agreement for $ 50,000 each,

for a total of cash received of $ 250,000 .

The notes bear interest at a 10 % per annum and are due in one year from the date of the note.

Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”) on August

Pursuant to the SPA, the Investor purchased a secured promissory note (the “Note”) in the aggregate principal amount

totaling approximately $ 5,433,333 (the “Principal Amount”).

The Note has an interest rate of 12 % per annum, with a maturity

date nine months from the issuance date of the Note (the “Maturity Date”).

The Note carried an original issue discount totaling

$ 433,333 and a transaction expense amount of $ 10,000 , both of which are included in the principal balance of the Note.

On the Closing

Date the Company shall receive $ 1,100,000 , with $ 3,900,000 put into escrow to be held until certain terms are met, which includes $ 3,400,000

upon the completion of a successful uplist to NYSE or NASDAQ.

The SPA includes a Security Agreement, whereby the note is secured by the

collateral set forth in the agreement, covering all of the assets of the Company.

All payments made by the Company under the terms in

the note, including upon repayment of this Note at maturity, shall be subject to an exit fee of 15 % of the portion of the Outstanding

Balance being paid (the “Exit Fee”).

soon as reasonably possible, the Company will cause the Common Stock to be listed for trading on either of (a) NYSE, or (b) NASDAQ (in

either event, an “Uplist”).

In the event the Company has not effectuated the Uplist by November 15, 2022, the then-current

outstanding balance will be increased by 10 % .

Following the Uplist, while the Note is still outstanding, ten days after the Company may

have a sale of any of its shares of common stock or preferred stock, there shall be a Mandatory Prepayment equal to the greater of $ 3,000,000

or thirty-three percent of the gross proceeds of the equity sale.

In addition, the Employment Agreement provides that the

employee is entitled, at the sole and absolute discretion of the Company’s Board of Directors, to receive performance bonuses.

Easterling will also be entitled to certain benefits including health insurance and monthly allowances for cell phone and automobile

Employment Agreement provides that in the event the employee is terminated without cause or resigns for good reason (as defined in their

Employment Agreement), the employee will receive, as severance the employee’s base salary for a period of 60 months following the

date of termination.

In the event of a change of control of the Company, the employee may elect to terminate the Employment Agreement

within 30 days thereafter and upon such termination would receive a lump sum payment equal to 500% of the employee’s base salary .

Employment Agreement contains certain restrictive covenants relating to non-competition, non-solicitation of customers and non-solicitation

of employees for a period of one year following termination of the employee’s Employment Agreement.

11 – SUBSEQUENT EVENTS

Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statement

Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure

in the financial statement.

October 24, 2022, the Comapny entered into a Merger Agreement (as it may be amended, supplemented, or otherwise modified from time to

time, the “Merger Agreement”), by and among the Company, Yotta Acquisition Corporation, a Delaware corporation (“Yotta”),

and Yotta Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Yotta (“Merger Sub”).

Agreement and the transactions contemplated thereby (the “Transactions”) were approved by the board of directors of each

of the Company, Yotta, and Merger Sub.

Merger Agreement provides, among other things, that Merger Sub will merge with and into the Company, with the Company as the surviving

company (the “Surviving Company”) in the merger and, after giving effect to such merger, the Company shall be a wholly-owned

subsidiary of Yotta (the “Merger ” ).

In addition, Yotta will be renamed “NaturalShrimp, Incorporated” or

such other name as shall be designated by the Company.

Other capitalized terms used, but not defined, herein have the respective meanings

given to such terms in the Merger Agreement.

Merger Agreement provides for aggregate consideration to be issued to securityholders of the Company of 17,500,000 shares (the “Closing

Merger Consideration Shares”) of Yotta’s common stock, par value $ 0.0001 per share (“Yotta Shares”), to be issued

at the effective time of the Merger (the “Effective Time”), plus an additional (i) 5,000,000 Yotta Shares if the Surviving

Corporation has at least $15,000,000 in revenue during the fiscal year ended March 31, 2024 and (ii) 5,000,000 Yotta Shares if the Surviving

Corporation has at least $30,000,000 in revenue during the fiscal year ended March 31, 2025 (collectively, the “Contingent Merger

Consideration Shares”) .

In accordance with the terms

and subject to the conditions of the Merger Agreement, at the Effective Time each share of Common Stock outstanding or deemed outstanding

pursuant to the provisions discussed immediately below as of immediately prior to the Effective Time will be converted into the right

to receive its allocable portion of the Closing Merger Consideration Shares and the Contingent Merger Consideration Shares (to the extent

the required revenue thresholds are met).

to the terms of the Merger Agreement and agreements that, pursuant to the Merger Agreement, the Company will enter into with holders of

such convertible securities, such convertible securities will be canceled in exchange (except for the Series A Convertible Preferred Stock

of the Company, par value $ 0.0001 per share (the “Series A Preferred”) for a cash payment or Yotta Shares as follows:

at the option of the holder thereof, each outstanding warrant to purchase shares of Common Stock will be canceled in exchange for a cash

payment based on the value thereof or treated as exercised for shares of Common Stock, in each case based on an adjusted exercise price

and as otherwise set forth in the Merger Agreement and/or the individual agreements, and if treated as exercised, converted into the right

to receive such deemed shares of Common Stock’s allocable portion of the Closing Merger Consideration Shares and the Contingent

Merger Consideration Shares;

(ii) each outstanding share of Series F Convertible Preferred Stock of the Company, par value $ 0.0001 per

share, will be canceled and treated as if converted into shares of Common Stock at an adjusted conversion rate as set forth in the Merger

Agreement and/or such individual agreements, and converted into the right to receive such deemed shares of Common Stock’s allocable

portion of the Closing Merger Consideration Shares and the Contingent Merger Consideration Shares;

and (iii) each outstanding share of

Series E Convertible Preferred Stock of the Company, par value $ 0.0001 per share (the “Series E Preferred”), will be canceled

and treated as if converted into shares of Common Stock at an adjusted conversion rate as set forth in the Merger Agreement and/or such

individual agreements, and converted into the right to receive such deemed shares of Common Stock’s allocable portion of the Closing

Merger Consideration Shares and the Contingent Merger Consideration Shares.

In addition, each holder of Series E Preferred will be entitled

to receive at the Effective Time an additional number of Closing Merger Consideration Shares as are necessary to ensure that the per-share

value of the Yotta Shares that such stockholder is entitled to receive is not less than the per-share value (based on the effective purchase

price) of the aggregate Yotta Shares then held by any Yotta stockholder after taking into account any newly-issued Yotta Shares that such

Yotta stockholder acquires directly from Yotta prior to the closing of the Merger (the “Closing”) (which will reduce the number

of Closing Merger Consideration Shares that will be issued to the Company’s other securities holders).

The Series A Preferred will

be cancelled and retired without any conversion thereof and for no consideration.

the Merger Agreement provides that, pursuant to an agreement to be entered into between the Company and the December 2021 Investor, in

relation to December 2021 SPA, contingent on and effective as of the Effective Time, the Convertible Note will be amended to eliminate

the conversion feature thereof.

Also, such agreement will provide for:

(i) for the payment to December 2021 Investor of an amount equal

to the lesser of (A) one-third of the amount retained in the Trust Account at the Effective Time or (B) $ 10,000,000 , in order to repay

a portion of the outstanding balance of the Convertible Note;

(ii) that the remaining balance of the Convertible Note be repaid in equal

monthly installments over a 12-month period beginning on a date after the Closing Date or the termination of such agreement;

that if the Closing Date is after December 31, 2022, the outstanding balance of all indebtedness owed by the Company to December 2021

Investor will be increased automatically by 2% and will automatically increase by 2% every 30 days thereafter until the Closing, or substantially

similar terms as approved by the Board of Directors of the Company.

is required to enter into all of the above-described agreements with the holders of the warrants, preferred stockholders, and December

2021 Investor within 14 days of the date of the Merger Agreement, or November 7, 2022 (the “Convertible Instrument Agreements”).

Restructuring Agreements

4, 2022, the Company entered into a restructuring agreement with the terms noted above with the December 2021 Investor.

The December 2021

SPA was amended and restated and eliminated the conversion feature as well as the Uplist provision (see Note 6).

Additionally, the maturity

date as well as the Mandatory Prepayment provision was amended.

While the December 2021 SPA is outstanding and within 3 trading days of

the Closing of the Merger Agreement, the Company will make a payment equal to the lesser of (A) one-third of the amount (calculated prior

to any deductions for any broker, underwriter, legal, accounting or other fees) retained in the Trust Account (as defined in the Merger

Agreement) at the Effective Time (as defined in the Merger Agreement) or (B) $ 10,000,000 , in order to repay a portion of the Outstanding

Balance (a “ Mandatory Prepayment ”).

In the event that the Closing does not occur on or before December 31, 2022, the

then-current outstanding balance will be increased by two percent (2%) and shall increase by 2% every 30 days thereafter until the Closing

or termination of the Merger Agreement

5, 2022, the Company entered a restructuring agreement with GHS, whereby the Series E Preferred Stock and the warrants outstanding as

of the Closing date shall have their terms adjusted.

The outstanding warrants shall be a) cancelled in exchange for a cash payment equal

to the fair value of the warrants based on the Black Scholes model, with the exercise price to be adjusted to equal 80% of the average

volume weighted average price of the Company common stock during the five trading day period immediately prior to the Closing Date (the

“Adjusted Exercise Price”);

or (b) as of the Effective Time, canceled and treated as if exercised for that number of shares

of the Company’s common stock calculated using the Black Scholes model fair value, the number of Warrant Shares on the Closing Date

and the Adjusted Exercise Price, with the shares of the Company’s common stock that would have been due to Holder as a result of

such exercise of the Warrant treated as if issued to Holder and then converted into the right to receive (i) the Closing Per Share Merger

Consideration (as defined in the Merger Agreement) plus (ii) the Additional Per Share Merger Consideration (as defined in the Merger Agreement),

if any, at the time and subject to the contingencies set forth in the Merger Agreement.

For the Series E Preferred Stock that shall be

outstanding immediately prior to the Effective Time, they shall be canceled and treated as if converted into that number of shares of

the Company’s common stock equal to (i) the stated value of $ 1,200 per share plus any unpaid dividends, multiplied by 1.25, divided

by (ii) 80% of the average volume weighted average price of the Company’s common stock during the five trading day period immediately

prior to the Closing Date.

The shares of the Company’s common stock that would have been due to the holder as a result of the conversion

of such shares of Series E Convertible Preferred Stock shall be treated as issued to holder and converted, as of the Effective Time, into

the right to receive (y) the Closing Per Share Merger Consideration plus (z) the Additional Per Share Merger Consideration, if any, at

the time and subject to the contingencies set forth in the Merger Agreement.

Purchase Agreement

November 4, 2022, the Company entered into a purchase agreement (the “GHS Purchase Agreement”) with GHS Investments LLC (“GHS”),

an accredited investor, pursuant to which, the Company may require GHS to purchase a maximum of up to 64,000,000 shares of the Company’s

common stock (“GHS Purchase Shares”) based on a total aggregate purchase price of up to $ 5,000,000 over a one-year term that

ends on November 4, 2023.

Notwithstanding the foregoing dollar limitations, the Company and GHS

may, from time to time, mutually agree in writing to waive the aforementioned limitations for a relevant Purchase Notice, which waiver,

shall not exceed the 4.99 % beneficial ownership limitation contained in the GHS Purchase Agreement.

The Company is to control

the timing and amount of any sales of GHS Purchase Shares to GHS.

The Company intends to use the net proceeds from this offering for

working capital and general corporate purposes.

“Purchase Price” means, with respect to a purchase made pursuant to the GHS Purchase Agreement, 90 % of the lowest VWAP during

the 10 consecutive business days immediately preceding, but not including, the applicable purchase date.

The Company shall deliver a

number of GHS Purchase Shares equal to 112.5 % of the aggregate purchase amount for such GHS Purchase divided by the Purchase Price per

share for such GHS Purchase.

there are any default events, as set forth in the GHS Purchase Agreement, has occurred and is continuing, the Company shall not deliver

to GHS any Purchase Notice.

pursuant to the terms of the GHS Purchase Agreement, from November 4, 2022 until the date that is the later of (i) the closing of the

transactions whereby Yotta Merger Sub, Inc.

will merge with and into the Company, with the Company as the surviving company (the “Merger”);

and (ii) the 12 month anniversary of the first delivery of GHS Purchase Shares, upon any issuance by the Company or any of its subsidiaries

of Common Stock or Common Stock equivalents for cash consideration, indebtedness or a combination of units thereof (a “Subsequent

Financing”), GHS shall have the right to participate in any financing, up to an amount of the Subsequent Financing equal to 100%

of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent

Following the Merger, the Participation Maximum shall be 50% of the Subsequent Financing.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements