What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-02-16 compared with 2022-11-14 · 327 added, 177 removed, 507 unchanged (50% of the section changed)

154 unchanged sentences

quarter of 2023.

believe that the combined output from our La Coste, Texas and Iowa facilities will be approximately 24,000 pounds of shrimp production

per week by the fourth calendar quarter of 2023.

Also, the Company is expecting to break ground on an 80,000 square foot expansion in

La Coste prior to December 31, 2022.

We believe that the combined output from our La Coste, Texas and Iowa facilities will be approximately 24,000 pounds

of shrimp production per week by the fourth calendar quarter of 2023.

Also, the Company is expecting to break ground on an 80,000 square

foot expansion in La Coste prior to December 31, 2022.

Merger Agreement and the Merger

89 unchanged sentences

of Operations

of the Three Months Ended September 30, 2022 to the Three Months Ended September 30, 2021

had revenue of $51,725 in the three months ended September 30, 2022, compared to no revenues during the quarter ended September 30, 2021.

Revenues during the 2022 period were the result of initial sample orders sold to customers.

following table summarizes the various components of our operating expenses for each of the three months ended September 30, 2022 and

September 30, 2021:

Three Months Ended September 30,

of the Three Months Ended December 31, 2022 to the Three Months Ended December 31, 2021

had revenue of $97,943 in the three months ended December 31, 2022, compared to $16,640 of revenue during the quarter ended December

Revenues during the 2022 period were the result of our sale of shrimp to customers.

At the beginning of fiscal 2023 these sales

were made to two customers of a consultant to the Company under the terms of a trial distribution agreement between the consultant and

the Company pursuant to which the consultant was to introduce the Company to customers and assist it in the set-up of ancillary materials

used or useful in the delivery of live shrimp, including installation of necessary equipment and facilities, logistical support, training

of staff and packaging necessary for shipment of live shrimp.

After the trial period, the parties could have, but decided not to, negotiate

and execute a long-term distribution agreement.

We began receiving orders and billing one of these customers directly in June 2022 and

the other in September 2022.

following table summarizes the various components of our operating expenses for each of the three months ended December 31, 2022 and

December 31, 2021:

Three Months Ended December 31,

Salaries and related expenses

3 unchanged sentences

Research and development

expenses for the three months ended September 30, 2022, decreased $66,621, or 2.4%, compared to the same period in 2021, primarily

due to increases in facility operations expense, depreciation, and amortization partially offset by decreases in salaries and

related expenses, research and development expenses, and professional fees.

Facility operations expenses increased $315,801, or 183.1%, during the three months ended September 30, 2022 compared to the same period in 2021, as a

result of the progress of the planning of the commercial operations in our Iowa and Texas facilities .

Depreciation increased

$150,728, or 58.5%, quarter over quarter due to the progressed fixed assets as well as the movement of construction in process to

fixed assets in the two plants .

Amortization increased $221,000, or 150.9%, quarter over quarter, to $367,500 for the quarter

ended September 30, 2022, as a result of quarterly amortization of $367,500 for the Patents and the license rights pursuant to the

Equipment Rights Agreement with Hydrenesis Delta Systems and the Technology Rights Agreement with Hydrenesis Aquaculture, which

amortization we began to recognize in August 2021 and that will be amortized over a 20-year period for the patents and a 10 year period for the license rights.

Amortization during the 2021

period related to the beginning of the amortization of the patents and license rights.

Salaries and related expenses decreased by $482,433, or 47.1%, during the quarter ended September 30, 2022

compared to the same period of 2021, primarily due to the Company’s payment of a one-time $600,000 bonus to the

President and Chief Technology Officer during the 2021 period, partially offset by an increase in the number of employees and

normal salary increases.

Research and development expenses decreased $192,872, or 98.0%, due to the slowdown during the quarter of

conducting trials of Atlantic salmon production in Norway.

Finally, professional fees

during the quarter ended September 30, 2022, decreased by $66,383 compared to the same period of 2021, due to greater than normal

levels of attorneys’ work with the Company on acquisitions and equity offerings and SEC filings, as well as consultant and

accounting fees, in the 2021 period.

expenses for the three months ended December 31, 2022, increased approximately $622,000, or 24.6%, compared to the same period in 2021,

primarily due to increases in facility operations expense, depreciation, and salaries and related expenses partially offset by decreases

in professional fees and other general and administrative expenses.

Facility operations expenses increased $476,690, or 119.6%, during

the three months ended December 31, 2022 compared to the same period in 2021, as a result of the progress of the planning of the commercial

operations in our Iowa and Texas facilities.

Depreciation increased $198,243, or 90.9%, quarter over quarter due to the progressed fixed

assets as well as the movement of construction in process to fixed assets in the two plants.

Salaries and related expenses increased

by $197,774, or 86.3%, during the quarter ended December 31, 2022 compared to the same period of 2021, primarily due to the Company’s

increase in the number of employees and normal salary increases.

Finally, professional fees during the quarter ended December 31, 2022,

decreased by $193,631 compared to the same period of 2021, due to greater than normal levels of attorneys’ work with the Company

on acquisitions and equity offerings and SEC filings, as well as consultant and accounting fees, in the 2021 period.

income (expense)

following table summarizes the various components of our Other income(expenses) for each of the three months ended September 30, 2022

and September 30, 2021:

Three Months Ended September 30,

following table summarizes the various components of our Other income(expenses) for each of the three months ended December 31, 2022

and December 31, 2021:

Three Months Ended December 31,

Interest expense

1 unchanged sentence

Amortization of debt discount

Financing costs

Change in fair value of derivative liability

(18,241,000 )

Change in fair value of warrant liability

Change in fair value of restructured notes

Gain on Vero Blue note settlement

Gain on extinguishment of debt

Legal settlement

(29,400,000 )

Loss due to fire

$ (30,850,991 )

expense for the three months ended September 30, 2022 increased significantly from the three months ended September 30, 2021, the majority

of which is a result of the recognition of the features related to the new $16,320,000 convertible note entered into on December 15,

The note included an OID of $1,320,000, plus debt issuance costs of $1,095,000 and warrants were issued with a fair value of $940,000.

Additionally, the conversion feature was analyzed as a derivative and was required to be bifurcated, and the derivative at the inception

was valued at $12,985,000.

All of these features added together resulted in a debt discount capped at $16,320,000.

As a result, the quarterly

amortization of the debt discount is $2,040,000 in the three months ended September 30, 2022.

There were no derivatives or warrant liabilities

in the prior period.

Therefore, the change in fair value is a new recognition in the current period.

The derivative fair value increased,

resulting in the change in fair value being an expense.

The interest rate on the convertible note is 12%, so the interest expense on

it is $497,072 for the three months ended September 30, 2022, which is the cause of the increase in interest expense for the current

period as compared to the prior period.

July 3, 2022, the Company’s building containing its water treatment and purification system in La Coste, Texas was completely destroyed

This resulted in the $863,117 loss due to fire recognized in the three months ended September 30, 2022.

of the Six Months Ended September 30, 2022 to the Six Months Ended September 30, 2021

were $88,061 during the six months ended September 30, 2022, compared to no revenues during the six months ended September 30, 2021.

Revenues during the 2022 period were the result of initial sample orders sold to customers.

following table summarizes the various components of our operating expenses for each of the six months ended September 30, 2022 and September

Six Months Ended September 30,

(income) expense for the three months ended December 31, 2022 changed significantly from the three months ended December 31, 2021, the

majority of which is a result of the restructuring of the December 2021 note, with the removal of the conversion feature resulting in

a “decrease” in the fair value of the derivative liability, as well as a legal settlement expense in December of 2021.

part of the restructuring on November 4, 2021, the conversion feature was removed, and therefore the bifurcated derivative was valued

as of the restructuring date at $12,290,000, with a decrease in fair value of $17,738,000, resulting in the change in fair value being

There was no derivative liability in the prior period.

Therefore, the change in fair value is a new recognition in the current

The interest expense increases in the current period, based on the two new notes issued in December of 2021 and August of 2022.

The interest rate on both notes is 12%, so the interest expense on it is approximately $592,000 for the three months ended December 31,

2022, which is the cause of the increase in interest expense for the current period as compared to the prior period.

Additionally, prior

to the restructuring and accounting treatment as an extinguishment, so a removal of the original debt discounts for the two notes, there

was amortization of the recognized debt discounts on the original issuance of the notes through November 4, 2022.

The amortization of

the debt discount during the three months ended December 31, 2021 was only for approximately 15 days, upon issuance of the December 2021

December 6, 2021 a final order was signed and a case was closed for a suit filed against the Company on August 11, 2020, alleging breach

of contract for the Company’s failure to exchange common shares of the Company to shareholders of NaturalShrimp Holdings, Inc.

The Company was to issue approximately 93 million shares in settlement, which had a fair value of $29,400,000, based on the market value

of the Company’s common shares of $0.316 on the date the case was closed, has been recognized in the Company’s statement

of operations as legal settlement.

The fair value of the shares was recognized as an expense in the three months ended December 31.

a result of the restructuring of the December 2021 and August Note, which was determined to be accounted for as an extinguishment of

debt, there was a gain on the extinguishment of debt for $2,383,088, between the two notes, as other income in the three months ended

December 31, 2021.

Additionally, as the Company elected the fair value option under ASC 825 for the restructured notes to be accounted

for at fair value until settled, the fair value was revalued as of the period end, with a decrease in fair value of the two notes of

$1,594,515, recognized as an expense in the three months ended December 31, 2022.

of the Nine Months Ended December 31, 2022 to the Nine Months Ended December 31, 2021

were $186,004 during the nine months ended December 31, 2022, compared to $16,640 of revenue during the nine months ended December 31,

Revenues during the 2022 period were the result of our sale of shrimp to customers, as discussed under “— Comparison

of the Three Months Ended December 31, 2022 to the Three Months Ended December 31, 2021 — Revenues.”

following table summarizes the various components of our operating expenses for each of the nine months ended December 31, 2022 and December

Nine Months Ended December 31,

Salaries and related expenses

3 unchanged sentences

Research and development

expenses for the six months ended September 30, 2022 increased $618,829, or 12.3%, compared to the same period in 2021, primarily

expenses for the nine months ended December 31, 2022 increased $1,241,113, or 16.4%, compared to the same period in 2021, primarily

due to increases in facility operations expense, depreciation, and amortization partially offset by decreases in salaries and related

1 unchanged sentence

Facility operations expenses increased $1,085,097, or 133.9%,

during the six months ended September 30, 2022 compared to the same period in 2021, primarily as a result

of a ramp-up of costs based on the increase in the activity in planning operations .

Depreciation increased $321,186, or 52.5%, during the six months ended September 30, 2022, compared to the same period in 2021,

as a result of the fixed assets from the new plant and the construction in process moved to fixed

assets , as discussed above.

Amortization increased $588,500, or 401.7%, during the

six months ended September 30, 2022, compared to the same period of 2021, as a result of the quarterly amortization for the new patent

and license rights as discussed above with respect to the results for the quarter ended September 30, 2022, which we began to recognize

in August 2021.

during the nine months ended December 31, 2022 compared to the same period in 2021, primarily as a result of the progress of the planning

of the commercial operations in our Iowa and Texas facilities .

Depreciation increased $519,429,

or 62.6%, during the nine months ended December 31, 2022, compared to the same period in 2021, as a result of

the fixed assets from the new plant and the construction in process moved to fixed assets.

Amortization increased $588,500, or 114.5%,

during the nine months ended December 31, 2022, compared to the same period of 2021, as a result of the quarterly amortization for the

new patent and license rights as discussed above with respect to the results for the quarter ended December 31, 2022, which we began

to recognize in August 2021.

While there were additional employees and normal salary increases, salaries and related expenses decreased

or 40.6%, during the six months ended September 30, 2022 compared to the same period of 2021, primarily due to the Company’s payment

of $700,000 in bonuses to its executive officers during the 2021 period, as discussed above.

Professional fees decreased during the 2022

period due to greater than normal levels of legal work, as well as consultant and accounting fees, during the six months ended September

$473,677, or 23.8%, during the nine months ended December 31, 2022 compared to the same period of 2021, primarily due to the Company’s

payment of $700,000 in bonuses to its executive officers during the 2021 period .

Professional fees

decreased during the 2022 period due to greater than normal levels of legal work, as well as consultant and accounting fees, during the

nine months ended December 31, 2021.

income (expense)

following table summarizes the various components of our Other income(expenses) for each of the six months ended September 30, 2022 and

September 30, 2021:

Six Months Ended September 30,

following table summarizes the various components of our Other income(expenses) for each of the nine months ended December 31, 2022 and

December 31, 2021:

Nine Months Ended December 31,

Interest expense

4 unchanged sentences

Change in fair value of derivative liability

(16,927,000 )

Change in fair value of warrant liability

Change in fair value of restructured notes

Forgiveness of PPP loan

Gain on Vero Blue note settlement

Gain on extinguishment of debt

Legal settlement

(29,400,000 )

Loss due to fire

$ (2,953,455)

expense for the six months ended September 30, 2022, increased significantly from the same period in 2021, the majority of which is a

result of the recognition of the features related to the new $16,320,000 convertible note entered into on December 15, 2021.

included an OID of $1,320,000, plus debt issuance costs of $1,095,000 and warrants were issued with a fair value of $940,000.

Additionally,

the conversion feature was analyzed as a derivative required to be bifurcated, and the derivative at the inception was valued at $12,985,000.

All of these features added together resulted in a debt discount capped at $16,320,000.

As a result, the amortization of the debt discount

is $4,080,000 in the six months ended September 30, 2022.

There were no derivatives nor warrant liabilities in the prior period, therefore

the change in fair value is a new recognition in the current period.

The derivative fair value increased, resulting in the change in

fair value being an expense.

The interest rate on the convertible note is 12%, so the interest expense on it is $994,145 for the six

months ended September 30, 2022, which is the cause of the increase in interest expense for the current period as compared to the prior

$ (31,241,307 )

expense for the nine months ended December 31, 2022, decreased significantly from the same period in 2021, the majority of which is a

result of the legal settlement expense of $29,400,000 in December of 2021, as noted in the three month change above.

Additionally, as

noted in the three-month activity above, the restructuring of the December 2021 and August notes, resulted in recognition in income for

the nine months ended December 31, 2022.

part of the restructuring on November 4, 2021, the conversion feature was removed, and therefore the bifurcated derivative was valued

as of the restructuring date at $12,290,000, with a decrease in fair value of $17,738,000, resulting in the change in fair value of $811,000

for the nine months ending December 31, 2022 being income.

There was no derivative liability in the prior period.

Therefore, the change

in fair value is a new recognition in the current period.

The interest expense increases in the current period, based on the two new

notes issued in December of 2021 and August of 2022.

The interest rate on both notes is 12%, so the interest expense on it is approximately

$1,666,000 for the nine months ended December 31, 2022, which is the cause of the increase in interest expense for the current period

as compared to the prior period.

Additionally, prior to the restructuring and accounting treatment as an extinguishment, so a removal

of the original debt discounts for the two notes, there was amortization of the recognized debt discounts on the original issuance of

the notes through November 4, 2022.

As a result, the amortization of the debt discount is approximately $5,020,000 in the nine months

ended December 31, 2022, compared to approximately $576,000 of amortization of the debt discount during the nine months ended December

31, 2021 based on only for approximately 15 days upon issuance of the December 2021 note.

warrant liability was originally recognized in December 2021, and is revalued each period end, with a decrease in the fair value as of

December 31, 2022, resulting in a $3,031,000 recognition as income, compared to an increase in fair value as of December 31, 2021, which

resulted in a $137,000 expense.

July 3, 2022, the Company’s building containing its water treatment and purification system in La Coste, Texas was completely destroyed

This resulted in the $863,117 loss due to fire recognized in the six months ended September 30, 2022.

April of 2021, the Company settled a convertible note, with a redemption fee of $109,953, recognized as financing costs.

The Company’s

Paycheck Protection Program (“PPP”) loan was approved for forgiveness on April 26, 2021 and, therefore, was recognized in

the six months ended September 30, 2021.

This resulted in the $869,379 loss due to fire recognized in the nine months ended December 31, 2022.

November 22, 2021, the Company entered into a waiver with a shareholder who had the rights to participate in a subsequent filing, in

which warrants to purchase 3,739,000 shares of common stock warrants were issued with a fair value of $1,373,000 recognized as financing

Additionally, in April of 2021, the Company settled a convertible note, with a redemption fee of $109,953, recognized as financing

This resulted it the recognition of a financing cost expense of approximately $1,483,000.

Company’s Paycheck Protection Program (“PPP”) loan was approved for forgiveness on April 26, 2021 and, therefore, was

recognized in the nine months ended December 31, 2021.

Financial Condition and Capital Resources

of September 30, 2022, we had cash on hand of approximately $561,000 and working capital deficiency of approximately $38,334,000, as

compared to cash on hand of approximately $1,734,000 and a working capital deficiency of approximately $17,017,000 as of March 31, 2022.

The decrease in working capital for the six months ended September 30, 2022, is mainly due to the decrease in cash on-hand, the increase

in the fair value of the derivative liability , the new promissory notes and related party notes, accrued interest, offset

by a decrease in fair value of the warrant liability.

Capital/(Deficiency)

working capital as of September 30, 2022, in comparison to our working capital deficiency as of March 31, 2021, can be summarized as

September 30,

of December 31, 2022, we had cash on hand of approximately $142,000 and working capital deficit of approximately $8,191,000, as compared

to cash on hand of approximately $1,734,000 and a working capital deficiency of approximately $17,017,000 as of March 31, 2022.

in working capital for the nine months ended December 31, 2022, is mainly due to the decrease in cash on-hand, as well as the decrease

in the fair value of the derivative liability due to the removal of the conversion feature in the restructured December 2021 Note, and

a decrease in fair value of the warrant liability.

This is offset by the new promissory notes and related party notes, and an increase

in accounts payable.

Capital/(Deficit)

working capital as of December 31, 2022, in comparison to our working capital deficiency as of March 31, 2021, can be summarized as follows:

Current assets

3 unchanged sentences

$ (17,017,120 )

assets increased mainly because of the $3,900,000 escrow account arising from the new promissory note in August 2022, less the release

of the $1,500,000 escrow account as of March 31, 2022 related to the proceeds from the issuance of a convertible debenture in December

2021, which was transferred to the Company’s cash.

This was offset by a decrease in cash based on the use of the cash on hand,

and a decrease as well in prepaid expenses.

The increase in current liabilities is primarily due to the in $18,241,000, increase in the

fair value of the derivative liability , as well as the entrance into a new promissory note of $5,000,000, less it’s OID and

debt discount, and the $250,000 notes payable-related party.

This is offset by the decrease in the fair value of the warrant liability.

cash flows for the six months ended September 30, 2022, in comparison to our cash flows for the six months ended September 30, 2021,

assets decreased mainly because of the release of the $1,500,000 escrow account as of March 31, 2022 related to the proceeds from the

issuance of a convertible debenture in December 2021, which was transferred to the Company’s cash.

Then there was a decrease in

cash based on the use of the cash on hand, and a decrease of approximately $1,020,000 in prepaid expenses.

The decrease in current liabilities

is primarily due to the $13,101,000, decrease in the fair value of the derivative liability, related to the removal of the conversion

feature in the restructuring of the December 2021 Note, as well as the by the decrease in the fair value of the warrant liability.

is offset by the new promissory note, which upon its restructuring was treated as an extinguishment and then recognized at its fair value

under ASC 825, at approximately $2,219,000 and the $250,000 notes payable-related party.

cash flows for the nine months ended December 31, 2022, in comparison to our cash flows for the nine months ended December 31, 2021,

can be summarized as follows:

Six months Ended September 30,

Nine months Ended December 31,

Net cash used in operating activities

5 unchanged sentences

$ (1,592,176 )

net cash used in operating activities in the six months ended September 30, 2022 is approximately $523,000 less as compared to the same

period in 2021.

The decrease in cash used is based on the decrease in prepaid expenses and the increase in accounts payable and accrued

interest related to the new promissory note as well as the addition for the current period’s six months on the convertible note.

A portion is also due to the increase in the accounts receivable and inventory, none of which occurred in the prior period.

net cash used in investing activities in the three months ended September 30, 2022 decreased by approximately $7,085,000 compared to

the same period in the prior fiscal year.

net cash used in operating activities in the nine months ended December 31, 2022 is approximately $8,316,000 less as compared to the

same period in 2021.

The decrease in cash used is based mainly on the increase in accounts payable in the current period compared to

the decrease in accounts payable in the prior period.

Additionally, there is a decrease in prepaid expenses and an increase accrued interest

related to the August note as well as the addition for the current period’s nine months on the December 2021 note.

net cash used in investing activities in the nine months ended December 31, 2022 decreased by approximately $6,169,000 compared to the

same period in the prior nine-month period.

During the current period cash used consists of the purchase of approximately $2,430,000 for

machinery and equipment.

machinery and equipment, offset by the $700,000 received from the insurance company for the fixed assets destroyed by the July 3, 2022 fire.

The prior year’s cash spent on investing activities consisted of the $2,000,000 of cash in the patent

acquisition and $1,000,000 in the acquisition of shares of the non-controlling interest, as well as approximately $646,000 for machinery

and equipment and $1,298,000 for construction in process.

acquisition, $2,350,000 for the License Agreement and $1,000,000 in the acquisition of shares of the non-controlling interest, as well

as approximately $2,116,000 for machinery and equipment and $433,000 for construction in process.

net cash provided by financing activities decreased by approximately $18,587,000 between periods.

For the current period, the Company

received $4,865,000 net proceeds on a new promissory note, with $3,900,000 put in an escrow account, and $150,000 from a promissory note

with related parties.

Additionally, the $1,500,000 that had been held in escrow from the convertible note the Company entered into in

December of 2021 has been transferred into its cash on hand.

In the same period in the prior year, the Company received approximately

$17,277,000 from the sale of common stock and warrants, offset by amounts paying off the convertible note, notes payable with related

parties and bank loans, and the amount paid on the redemption of Series D Preferred Shares.

cash position was approximately $561,000 as of September 30, 2022.

received $1,380,000 from the financing agreement for the sale of shares of common stock, as well as $1,465,000 net proceeds on a new

promissory note, and $250,000 from a promissory note with related parties.

Additionally, the $1,500,000 that had been held in escrow

from the convertible note the Company entered into in December of 2021 has been transferred into its cash on hand.

In the same period

in the prior year, the Company received approximately $17,277,000 from the sale of common stock and warrants, and $8,905,000 of net proceeds

from entering into the December 2021 note, offset by amounts paying off the previous convertible note, notes payable with related parties

and bank loans, and the amount paid on the redemption of Series D Preferred Shares.

cash position was approximately $142,000 as of December 31, 2022.

Management believes that our cash on hand and working capital deficit

5 unchanged sentences

The line of credit bears an interest rate of prime

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

plus 25.9 basis points, which totaled 33.17% as of December 31, 2022.

The line of credit is unsecured.

The balance of the line of credit

was $9,580 at both September 30, 2022 and March 31, 2021.

was $9,580 at both December 31, 2022 and March 31, 2021.

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.

10 basis points, which totaled 17.27% as of December 31, 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.

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

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

20 unchanged sentences

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

conjunction with the Merger Agreement, entered into on October 24, 2022, with Yotta Acquisition Corporation (Note 10), on November 4,

2022, the Company entered into a Restructuring Agreement for an Amended and Restated Secured Promissory Note (the “August Note”),

through which the August Note was amended and restated in its entirety.

The Restructuring Agreement included key modifications, in which

i) the Uplist terms were removed, ii) in the event that the Closing of the Merger does not occur on or before December 31, 2022, the

then-current Outstanding Balance will be increased by 2% and shall increase by 2% every 30 days thereafter until the Closing or termination

of the Merger Agreement, and iii) the outstanding balance of the Convertible Note may be increased by 5% to 15% upon the occurrence of

an event of default or failure to obtain the Lender’s consent or notify the Lender for certain major equity related transactions

(“Trigger Events”).

The Merger has not yet closed, and therefore the 2% of the outstanding balance was increased as of December

31, 2022, in the amount of approximately $35,000.

Restructured August Note was analyzed under ASC 470-50 as to if the change in terms qualified as a modification or an extinguishment

The changes in terms were considered an extinguishment as the present value of the cash flows under the terms of the new

debt instrument was evaluated to be a substantial change, as over 10% difference from the present value of the remaining cash flows under

the terms of the original instrument.

As such, with the removal of the original note and its debt discount and accrued interest as compared

to the restructured note with a fair value of approximately $1,933,000, there was a loss in extinguishment of approximately $157,000.

As a result of the extinguishment and at the Company’s election of the fair value option under ASC 825, the August Note will be

accounted for at fair value until they are settled.

In accordance with ASC 815- 15-25-1(b) a hybrid instrument that is measured at fair

value under ASC 825 fair value option each period with changes in fair value reported in earnings as they occur should not be evaluated

for embedded derivatives.

Therefore, the provisions in the August Note were not evaluated as to if they fell under the guidance of embedded

derivatives and were required to be bifurcated.

The August Note was revalued as of December 31, 2022 at approximately $2,219,000, with

a change in fair value of approximately $286,000 recognized in the Statement of Operations.

Note – related parties

60 unchanged sentences

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

November 4, 2022, the Company entered into a Restructuring Agreement for an Amended and Restated Secured Promissory Note (the “Senior

Note”) with the December 2021 Investor through which the December 2021 Note was amended and restated in its entirety.

These amendments

were made in conjunction with the Merger Agreement, entered into on October 24, 2022, with Yotta Acquisition Corporation (Note 10), The

main modification of the terms of the Senior Note was that the conversion feature was eliminated.

Second, a Mandatory Payment was added

whereby within 3 trading days of the closing upon the Merger 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

after which the remaining balance of the Convertible Note is to 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.

Additionally, 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.

Additional key modifications include i) the Uplist terms were removed, ii) Maturity date was modified

from December 15, 2023 to December 4, 2023, and iii) the outstanding balance of the Convertible Note may be increased by 5% to 15% upon

the occurrence of an event of default or failure to obtain the Lender’s consent or notify the Lender for certain major equity related

transactions (“Trigger Events”).

As of December 31, 2022, the Merger has not yet closed, and therefore the 2% of the outstanding

balance was increased as of December 31, 2022, in the amount of approximately $1,309,000.

Restructured Senior Note was analyzed under ASC 470-50 as to if the change in terms qualified as a modification or an extinguishment

The changes in terms were considered an extinguishment as the conversion feature has been eliminated and therefore the modified

August Note is determined to be fundamentally different from the original convertible note.

As such, with the removal of the original

note and its debt discount and accrued interest as compared to the restructured note with a fair value of approximately $18,914,000,

there was a gain in extinguishment of approximately $2,540,000.

As a result of the extinguishment and at the Company’s election

of the fair value option under ASC 825, the Senior Note will be accounted for at fair value until it is settled.

In accordance with ASC

815- 15-25-1(b) a hybrid instrument that is measured at fair value under ASC 825 fair value option each period with changes in fair value

reported in earnings as they occur should not be evaluated for embedded derivatives.

Therefore, the provisions in the Senior Note were

not evaluated as to if they fell under the guidance of embedded derivatives and were required to be bifurcated.

The Senior Note was revalued

as of December 31, 2022 at approximately $20,223,000, with a change in fair value of approximately $1,309,000 recognized in the Statement

of Operations.

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.

the three months ended December 31, 2022, the Company sold 17,175,675 shares of common stock at a net amount of approximately $1,378,000,

at share prices ranging from $0.08 to $0.10.

There were 11,306.351 additional shares of common stock sold after the period end (see Note

Shares Issued to Consultant

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

shares of common stock shall vest each quarter through October 1, 2022, at $24,275, with approximately $171,000 vested through September

shares of common stock shall vest each quarter through October 1, 2022, at $24,275, with approximately $171,000 vested through December

Stock Issued in Relation to Business Agreement

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issued upon the approval of a patent.

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

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

Concern and Management Liquidity Plans

unaudited condensed consolidated financial statements contained in this quarterly report on Form 10-Q have been prepared, assuming that

the Company will continue as a going concern.

The Company has accumulated losses through the period to September 30, 2022 of approximately

The Company has accumulated losses through the period to December 31, 2022 of approximately

$163,038,000 as well as negative cash flows from operating activities of approximately $4,754,000.

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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 Series A Convertible Preferred Stock which would be converted

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

For the three months ended December 31, 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 751,385,000 underlying common shares, 170 shares of Series E Redeemable Convertible

Preferred shares whose approximately 2,775,000 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, whose shares were included in the calculation of

For the three months ended December 31, 2022, the Company had 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 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,

$0.35, and 18,573,116 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive

as their conversion and exercise prices were greater than the market price of the Company’s common shares.

For the nine months

ended December 31, 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 768,561,000 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 2,775,000 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 184,387,000 underlying common shares, 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 three and nine

months ended December 31, 2021, the Company had Redeemable Convertible Preferred stock with approximately 9,842,000 underlying common

shares, $18,768,000 in a convertible debenture whose approximately 67,816,000 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.

of Long-lived Assets and Long-lived Assets

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

Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as

such, the Company records revenue when their customers obtain control of the promised goods or services in an amount

that reflects the consideration which the Company expects to receive in exchange for those goods or services.

The Company will sell primarily to food service distributors, as

well as to wholesalers, retail establishments and seafood distributors.

determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs

the following five steps:

(1) identify the contract(s) with a customer by receipt of purchase orders and confirmations sent by the Company

which includes a required line of credit approval process, (2) identify the performance obligations in the contract which includes shipment

of goods to the customer FOB shipping point or destination, (3) determine the transaction price which initiates with the purchase order

received from the customer and confirmation sent by the Company and will include discounts and allowances by customer if any, (4) allocate

the transaction price to the performance obligations in the contract which is the shipment of the goods to the customer and transaction

price determined in step 3 above and (5) recognize revenue when (or as) the entity satisfies a performance obligation which is when the

Company transfers control of the goods to the customers by shipment or delivery of the products.

Adopted Accounting Pronouncements

recently adopted accounting pronouncements are more fully described in Note 2 to our financial statements included herein for the quarter

ended September 30, 2022.

ended December 31, 2022.

Issued Accounting Standards

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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

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 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.

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

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;

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 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

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.

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

the period ending December 31, 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.

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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 2. Management’s Discussion and Analysis