NaturalShrimp Inc 10-Q

Item 1. Financial Statements NATURALSHRIMP INCORPORATED and subsidiaries CONDENSED Consolidated Balance Sheets December 31, 2022 March 31, 2022 ( unaudited ) ASSETS Current assets Cash $ 141,864 $ 1,734,040 Accounts receivable 7,502 14,385 Escrow account - 1,500,000 Inventory 101,929 69,170 Prepaid expenses 490,140 1,511,546 Deferred offering costs 126,963 - Total current assets 868,398 4,829,141 Fixed assets, net 15,350,443 14,798,103 Other assets Construction-in-process 45,730 1,087,101 Patents, net 6,366,000 6,658,500 License Agreement, net 9,412,376 10,222,376 Right of Use asset 224,266 282,753 Deposits 20,633 20,633 Total other assets 16,069,005 18,271,363 Total assets $ 32,287,846 $ 37,898,607 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities Accounts payable $ 3,523,210 $ 2,802,787 Accrued interest 336,102 500,450 Accrued interest - related parties 213,292 203,520 Other accrued expenses 299,978 207,418 Accrued expenses - related parties 200,000 200,000 Short-term Promissory Note and Lines of credit 19,817 20,044 Note payable 96,000 96,000 Restructured August note payable 2,219,347 - Notes payable - related parties 745,412 495,412 Dividends payable 514,391 296,630 Derivative liability - 13,101,000 Warrant liability 892,000 3,923,000 Total current liabilities 9,059,549 21,846,261 Convertible debenture, less unamortized debt discount of $ 9,680,000 - 2,629,079 Restructured Senior note payable 20,223,035 - Note payable, less current maturities 47,604 119,604 Lease Liability 231,704 286,253 Total liabilities 29,561,892 24,881,197 Commitments and contingencies (Note 10) - - Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 20,000 shares authorized, 1,670 and 2,840 shares issued and outstanding at December 31, 2022 and March 31, 2021, respectively 2,003,557 2,539,176 Series F Redeemable Convertible Preferred stock, $ 0.0001 par value, 750,000 shares authorized, 750,000 and 0 shares issued and outstanding at December 31, 2022 and March 31, 2021, respectively 43,612,000 43,612,000 Stockholders’ deficit Series A Convertible Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at December 31, 2022 and March 31, 2021 500 500 Common stock, $ 0.0001 par value, 900,000,000 shares authorized, 768,561,129 shares issued and 751,322,954 shares outstanding at December 31, 2022 and 674,831,624 shares issued and 674,644,124 shares outstanding at March 31, 2022, respectively 76,894 67,500 Additional paid in capital 119,464,471 96,701,607 Stock payable 662,767 20,132,650 Subscription receivable ( 56,250 ) - Accumulated deficit ( 163,037,985 ) ( 150,036,023 ) Total stockholders' deficit ( 42,889,603 ) ( 33,133,766 ) Total liabilities, mezzanine and stockholders’ deficit $ 32,287,846 $ 37,898,607 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 NATURALSHRIMP INCORPORATED and subsidiaries CONDENSED Consolidated STATEMENTS OF OPERATIONS (Unaudited) For the Three Months Ended For the Nine Months Ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Sales $ 97,943 $ 16,640 $ 186,004 $ 16,640 Operating expenses: General and administrative 1,481,195 1,527,699 4,256,819 5,182,358 Research and development 14,212 20,357 190,855 217,229 Facility operations 875,194 398,504 1,895,357 810,260 Depreciation 416,377 218,134 1,349,838 830,409 Amortization 367,500 367,500 1,102,500 514,000 Total operating expenses 3,154,478 2,532,194 8,795,369 7,554,256 Net loss from operations ( 3,056,535 ) ( 2,515,554 ) ( 8,609,365 ) ( 7,537,616 ) 14.2 % Other income (expense): Interest expense ( 593,331 ) ( 80,991 ) ( 1,674,994 ) ( 228,190 ) Interest expense - related parties ( 6,250 ) - ( 9,772 ) - Amortization of debt discount ( 843,494 ) ( 340,000 ) ( 5,019,883 ) ( 576,364 ) Financing costs - ( 1,393,000 ) - ( 1,502,953 ) Change in fair value of derivative liability 17,738,000 - 811,000 - Change in fair value of warrant liability 1,155,000 ( 137,000 ) 3,031,000 ( 137,000 ) Change in fair value of restructured notes ( 1,594,515 ) - ( 1,594,515 ) - Forgiveness of PPP loan - - - 103,200 Gain on Vero Blue note settlement - 500,000 500,000 Gain on extinguishment of debt 2,383,088 - 2,383,088 - Legal Settlement - ( 29,400,000 ) - ( 29,400,000 ) Loss due to fire ( 6,262 ) - ( 869,379 ) - Total other income (expense) 18,232,236 ( 30,850,991 ) ( 2,943,455 ) ( 31,241,307 ) Income (loss) before income taxes 15,175,701 ( 33,366,545 ) ( 11,552,820 ) ( 38,778,923 ) Provision for income taxes - - - - Net income (loss) 15,175,701 ( 33,366,545 ) ( 11,552,820 ) ( 38,778,923 ) Amortization of beneficial conversion feature on Preferred shares ( 28,048 ) - ( 212,048 ) ( 817,376 ) Accretion on Preferred shares ( 198,333 ) - ( 755,333 ) - Redemption and exchange of Series D Preferred shares - - - ( 5,792,947 ) Dividends ( 60,107 ) - ( 481,761 ) - Net income (loss) available for common stockholders $ 14,889,213 $ ( 33,366,545 ) $ ( 13,001,961 ) $ ( 45,389,246 ) EARNINGS PER SHARE (Basic) $ 0.02 $ ( 0.05 ) $ ( 0.02 ) $ ( 0.07 ) EARNINGS PER SHARE (Diluted) $ 0.01 $ ( 0.05 ) $ ( 0.02 ) $ ( 0.07 ) WEIGHTED AVERAGE SHARES OUTSTANDING (Basic) 697,586,776 635,536,459 682,750,957 608,191,555 WEIGHTED AVERAGE SHARES OUTSTANDING (Diluted) 1,629,304,739 635,536,459 682,750,957 608,191,555 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 NATURALSHRIMP INCORPORATED and subsidiaries CONDENSED Consolidated STATEMENT of CHANGES IN SHAREHOLDERS’ DEFICIT (Unaudited) Series A Preferred stock Series B Preferred stock Common stock Additional paid in Stock Subscription Accumulated Non-controlling Total stockholders' Shares Amount Shares Amount Shares Amount Capital Payable receivable deficit interest deficit Balance March 31, 2022 5,000,000 $ 500 - $ - 674,644,124 $ 67,500 $ 96,701,607 $ 20,132,650 $ - $ ( 150,036,023 ) $ - $ ( 33,133,766 ) Common stock issued for legal settlement to NSH shareholders - - - - 61,154,136 6,112 19,311,486 ( 19,317,598 ) - - - - Conversion of Series E Preferred Shares to common stock - - - - 4,537,240 454 839,546 - - - - 840,000 Contingent beneficial conversion feature related to the Series E Preferred Shares, fully amortized - - - - - - 99,000 - - ( 99,000 ) - - Amortization of beneficial conversion feature related to Series E Preferred Shares - - - - - - - - - ( 42,500 ) - ( 42,500 ) Accretion of Series E Preferred Shares - - - - - - - - - ( 278,500 ) - ( 278,500 ) Dividends payable on Preferred Shares - - - - - - - - - ( 102,227 ) - ( 102,227 ) Common stock issued in business agreement, to be paid from revenue earned - - - - 250,000 25 56,225 - ( 56,250 ) - - - Common stock vested to consultants - - - - - 6 24,369 - - - - 24,375 Net loss ( 2,200,176 ) - ( 2,200,176 ) Balance June 30, 2022 5,000,000 $ 500 - $ - 740,585,500 $ 74,097 $ 117,032,233 $ 815,052 $ ( 56,250 ) $ ( 152,758,426 ) - $ ( 34,892,794 ) Common stock issued for legal settlement to NSH shareholders - - - - 404,067 40 127,646 ( 127,686 ) - - - - Conversion of Series E Preferred Shares to common stock - - - - 9,920,887 992 827,008 - - ( 108,000 ) - 720,000 Increase of 10 % in Series E Preferred Shares to one holder based on certain rights ( 156,000 ) ( 156,000 ) Amortization of beneficial conversion feature related to Series E Preferred Shares - - - - - - - - - ( 42,500 ) - ( 42,500 ) Accretion of Series E Preferred Shares - - - - - - - - - ( 278,500 ) - ( 278,500 ) Dividends payable on Preferred Shares - - - - - - - - - ( 55,427 ) - ( 55,427 ) Common stock issued in business agreement - - - - 250,000 25 25,975 - - - 26,000 Common stock issued from shares payable - - - - 100,000 10 24,590 ( 24,600 ) - - - Common stock vested to consultants - - - - 62,500 6 24,369 - - - - 24,375 Net loss ( 24,528,345 ) - ( 24,528,345 ) Balance September 30, 2022 5,000,000 $ 500 - $ - 751,322,954 $ 75,170 $ 118,061,820 $ 662,767 $ ( 56,250 ) $ ( 177,927,198 ) - $ ( 59,183,191 ) Issuance of common shares under financing agreement 17,175,675 1,718 1,378,282 1,380,000 Amortization of beneficial conversion feature related to Series E Preferred Shares - - - - - - - - - ( 28,048 ) - ( 28,048 ) Accretion of Series E Preferred Shares - - - - - - - - - ( 198,333 ) - ( 198,333 ) Dividends payable on Preferred Shares - - - - - - - - - ( 60,107 ) - ( 60,107 ) Common stock vested to consultants - - - - 62,500 6 24,369 - - - - 24,375 Net income 15,175,701 - 15,175,701 Balance December 31, 2022 5,000,000 $ 500 - $ - 768,561,129 $ 76,894 $ 119,464,471 $ 662,767 $ ( 56,250 ) $ ( 163,037,985 ) - $ ( 42,889,603 ) Balance March 31, 2021 5,000,000 $ 500 607 $ - 560,745,180 $ 56,075 $ 56,649,491 $ 136,000 $ - $ ( 53,683,268 ) $ ( 87,830 ) $ 3,070,969 Issuance of common stock upon conversion - - - - 1,329,246 133 421,353 - - - - 421,486 Conversion of Series B PS to common stock - - ( 262 ) - 3,144,000 314 ( 314 ) - - - - - Conversion of Series D PS to common stock - - - - 428,572 43 ( 43 ) - - - - - Exchange of Series D Preferred Shares to Series E Preferred Shares - - - - - - - - - ( 3,258,189 ) - ( 3,258,189 ) Sale of common shares and warrants for cash, less offering costs and commitment shares - - - - 35,772,729 3,577 17,273,546 - - - - 17,277,123 Exercise of warrants related to the sale of common shares - - - - 1,100,000 110 10,890 - - - - 11,000 Beneficial conversion feature related to the Series E Preferred Shares - - - - - - 3,269,505 - - - - 3,269,505 Amortization of beneficial conversion feature related to Series E Preferred Shares - - - - - - - - - ( 817,376 ) - ( 817,376 ) Redemption of Series D Preferred shares - - - - - - - - - ( 2,534,758 ) - ( 2,534,758 ) Common shares to be issued for the acquisition of the non-controlling interest subsidiary's remaining equity - - - - - - ( 3,087,830 ) 2,000,000 - - 87,830 ( 1,000,000 ) Common shares to be issued for Patent acquisition - - - - - - - 5,000,000 - - - 5,000,000 Common stock vested to consultants - - - - 125,000 13 48,738 24,900 - - - 73,651 Net loss - - - - - - - - - ( 2,562,743 ) - ( 2,562,743 ) Balance June 30, 2021 5,000,000 $ 500 345 $ - 602,644,727 $ 60,265 $ 74,585,336 $ 7,160,900 $ - $ ( 62,856,334 ) $ - $ 18,950,668 Conversion of Series E PS to common stock 4,114,286 411 ( 411 ) - Amortization of beneficial conversion feature related to Series E Preferred Shares ( 1,341,948 ) ( 1,341,948 ) Revision of dividends payable on Series B Preferred Shares (See Note 2) ( 182,639 ) ( 182,639 ) Dividends payable on Preferred Shares ( 177,586 ) ( 177,586 ) Common shares to be issued for Technical and Equipment Rights Agreement 4,762,376 4,762,376 Common stock vested to consultants 62,500 6 24,369 24,900 49,275 - Net loss - - - - - - - - - ( 2,849,635 ) - ( 2,849,635 ) Balance September 30, 2021 5,000,000 $ 500 345 $ - 606,821,513 $ 60,683 $ 74,609,294 $ 11,948,176 - $ ( 67,408,142 ) $ - $ 19,210,511 Conversion of Series B Preferred Shares to common stock - - ( 278 ) - 3,336,000 334 ( 334 ) - - - - ( 334 ) Conversion of Series E Preferred Shares to common stock - - - - 4,114,286 411 2,879,589 - - - - 2,880,000 Amortization of beneficial conversion feature related to Series E Preferred Shares - - - - - - - - - ( 831,543 ) - ( 831,543 ) Beneficial conversion feature related to the Series E Preferred Shares - - - - - - 169,714 - - - - 169,714 Accretion of Series E Preferred Shares - - - - - - - - - ( 80,167 ) - ( 80,167 ) Dividends payable on Preferred Shares - - - - - - - - - ( 112,577 ) - ( 112,577 ) Common shares issued for Technical and Equipment Rights Agreement - - - - 26,732,673 2,673 11,759,706 ( 11,762,376 ) - - - - Common stock vested to consultants - - - - 112,500 21 99,054 ( 49,800 ) - - - 49,275 Common stock issued to consultants - - - - 430,071 43 158,285 - - - - 158,328 Common stock vested to employees - - - - 175,000 18 68,286 - - - - 68,304 Reclassification of warrants to liability - - - - - - ( 2,935,000 ) - - - - ( 2,935,000 ) Common stock to be issued for legal settlement to NSH shareholders - - - - - - - 29,388,000 - - - 29,388,000 - Net loss - - - - - - - - - ( 33,366,545 ) - ( 33,366,545 ) Net income (loss) - - - - - - - - - ( 33,366,545 ) - ( 33,366,545 ) Balance December 31, 2021 5,000,000 $ 500 67 $ - 641,722,043 $ 64,183 $ 86,808,594 $ 29,524,000 $ - $ ( 101,798,974 ) $ - $ 14,597,966 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 NATURALSHRIMP INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) For the Nine Months Ended December 31, 2022 December 31, 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ ( 11,552,820 ) $ ( 38,778,923 ) Adjustments to reconcile net loss to net cash used in operating activities Depreciation expense 1,349,838 586,409 Amortization expense 1,102,500 514,000 Amortization of debt discount 5,019,883 576,364 Change in fair value of derivative liability ( 811,000 ) - Change in fair value of warrant liability ( 3,031,000 ) 137,000 Change in fair value of promissory notes 1,594,515 - Financing costs - 1,502,953 Gain on extinguishment of debt ( 1,883,089 ) - Loss due to fire 869,379 - Forgiveness of PPP loan - ( 103,200 ) Gain on Vero Blue note settlement - ( 500,000 ) Legal settlement - 29,388,000 Shares issued for services 99,124 398,831 Changes in operating assets and liabilities: Accounts receivable 6,883 - Inventory ( 32,759 ) ( 28,128 ) Prepaid expenses and other current assets 1,021,406 ( 321,162 ) Deferred offering costs ( 126,963 ) - Accounts payable 724,360 ( 5,637,796 ) Other accrued expenses 92,560 ( 101,896 ) Accrued expenses - related parties - 200,000 Accrued interest 1,662,647 ( 49,482 ) Accrued interest - related parties 9,772 16,000 Cash used in operating activities ( 3,884,764 ) ( 12,201,031 ) CASH FLOWS FROM INVESTING ACTIVITIES Cash paid for fixed assets ( 2,430,186 ) ( 2,116,124 ) Cash received for fire damage to fixed assets 700,000 - Cash paid for patent acquisition with F & T - ( 2,000,000 ) Cash paid for acquisition of shares of NCI - ( 1,000,000 ) Cash paid for License Agreement - ( 2,350,000 ) Cash paid for construction in process - ( 433,389 ) Cash used in investing activities ( 1,730,186 ) ( 7,899,513 ) CASH FLOWS FROM FINANCING ACTIVITIES Payments on bank loan - ( 214,852 ) Payments of notes payable ( 72,000 ) ( 72,000 ) Payments on notes payable, related party - ( 655,750 ) Repayment of short-term promissory note and lines of credit ( 227 ) ( 553,577 ) Proceeds from issuance of common shares under equity agreement - 17,277,123 Proceeds from sale of stock 1,380,000 - Proceeds from promissory note 1,465,000 - Proceeds from promissory note, related parties 250,000 - Proceeds from convertible debentures - 8,905,000 Proceeds from convertible debentures, receipt from escrow 1,500,000 - Escrow account in relation to the proceeds from promissory notes ( 500,000 ) 5,000,000 Payments on convertible debentures - ( 421,486 ) Payments on notes payable - ( 4,500,000 ) Proceeds from sale of Series E Preferred Shares - 1,348,000 Redemption of Series D Preferred Shares - ( 3,513,504 ) Shares issued upon exercise of warrants - 11,000 Cash provided by financing activities 4,022,773 22,609,954 NET CHANGE IN CASH ( 1,592,176 ) 2,509,411 CASH AT BEGINNING OF YEAR 1,734,040 155,795 CASH AT END OF YEAR $ 141,864 $ 2,665,206 INTEREST PAID $ 1,829,570 $ 212,190 Supplemental Disclosure of Non-Cash Investing and Financing Activities: Construction in process transferred to fixed assets $ 1,041,371 $ - Shares issued upon conversion of convertible debentures $ - $ 421,486 Shares issued upon conversion of Preferred stock $ 1,560,000 - Cancellation of Right of Use asset and Lease liability $ - $ 275,400 Shares issued as consideration for Rights Agreement $ - $ 4,762,376 Shares issued as consideration for Patent acquisition $ - $ 5,000,000 Shares issued as consideration for acquisition of remaining NCI $ - $ 2,000,000 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 NATURALSHRIMP INCORPORATED AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2022 (Unaudited) 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 (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. On 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 (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). Transport and Iowa’s First were wholly-owned subsidiaries of VBF. The agreement called for the Company to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems and other improvements located on such real property) of Iowa’s First. The facility was originally designed as an aquaculture facility, with the company having production issues. The Company began a modification process to convert the plant to produce shrimp, which will allow them to scale faster without having to build new facilities. The three Iowa facilities contain the tanks and infrastructure that will be used to support the production of shrimp with the incorporation of the Company’s patented EC platform technology. On 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. (“NAS”). Prior to entering into the SPA, the Company owned fifty-one percent ( 51 %) and F&T owned forty-nine percent ( 49 %) of the issued and outstanding shares of common stock of NAS. After 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. and NAS. 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 nine months ended December 31, 2022, the Company had a net loss from operations of approximately $ 8,609,000 . At December 31, 2022, the Company had an accumulated deficit of approximately $ 163,038,000 and a working capital deficit of approximately $ 8,191,000 . 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 nine months ended December 31, 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 $ 1,465,000 from the issuance of a convertible debenture in August 2022, per the restructuring agreement and $ 250,000 in a loan agreement with related parties. Additionally, 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). During the three months ended December 31, 2022, the Company received a net amount of approximately $ 1,380,000 , for the sale of 17,175,675 shares of common stock. Subsequent to the period end, the Company has received another $ 878,365 from GHS for the sale of 14,880,460 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. 7 NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited financial information as of and for the three and nine months ended December 31, 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 nine months ended December 31, 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 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 GAAP for complete financial statements. Consolidation The 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 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. 8 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. Basic 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 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 diluted EPS. 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 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. 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. 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. The Company did not have any Level 1 or Level 2 assets and liabilities at December 31, 2022 and March 31, 2022. The derivative and warrant liabilities are Level 3 fair value measurements. 9 The following is a summary of activity of Level 3 derivatives during the nine months ended December 31, 2022 and the year ended March 31, 2022: SCHEDULE OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE Derivatives December 31, 2022 (unaudited) March 31, 2022 Derivative liability balance at beginning of period $ 13,101,000 $ - Included in gain on extinguishment of note ( 12,290,000 ) - Additions to derivatives - 12,985,000 Change in fair value ( 811,000 ) 116,000 Balance at end of period $ - $ 13,101,000 The derivative liability does not exist as of December 31, 2022, as the convertible note removed the conversion feature upon its restructuring and there is no longer an embedded derivative to be bifurcated (Note 6). 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 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 %. SCHEDULE OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE Warrant liability December 31, 2022 (unaudited) March 31, 2022 Warrant liability balance at beginning of period $ 3,923,000 $ - Additions to warrant liability - 5,910,000 Reclass to equity upon cancellation or exercise - - Change in fair value ( 3,031,000 ) ( 1,987,000 ) Balance at end of period $ 892,000 $ 3,923,000 At December 31, 2022, the fair value of the warrant liability was estimated using the following inputs: the price of the Company’s common stock of $ 0.079 ; a risk-free interest rate ranging from 4.11 % to 4.22 % and expected volatility of the Company’s common stock ranging from 125.3 % to 145.6 % 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: 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. SCHEDULE OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE Promissory Note December 31, 2022 (unaudited) March 31, 2022 Promissory Notes fair value at beginning of period $ - $ - Fair value of Promissory Note upon Restructuring Agreement 20,847,867 - Change in fair value ( 1,594,515 ) - Promissory Note fair value at end of period $ 22,442,382 $ - On November 4, 2022, when the Company entered into a Restructuring Agreement for an Amended and Restated Secured Promissory Note for two of their outstanding debentures (Note 6 and Note 7), which were accounted for as debt extinguishment, the Company elected to recognize the new debt under ASC 825 fair value option . 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. 10 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 December 31, 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 December 31, 2022, the Company’s cash balance did not exceed FDIC coverage. As of 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. Fixed Assets 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: SCHEDULE OF ESTIMATED USEFUL LIVES Buildings 39 years Machinery and Equipment 7 – 10 years Vehicles 10 years Furniture and Fixtures 3 – 10 years 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. 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 and nine months ended December 31, 2022, the amortization of the patents was $ 97,500 and $ 292,500 and the license rights was $ 270,000 and $ 810,000 . Amortization expense for the patents was $ 97,500 and $ 244,000 for the three and nine months ended December 31, 2021. The accumulated amortization of the patents was $ 633,500,000 and $ 341,500 as of December 31, 2022 and March 31, 2022, respectively. The accumulated amortization of the license rights was $ 1,350,000 and $ 540,000 as of December 31, 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 December 31, 2022, the Company believes the carrying value of the intangible assets are still recoverable, and there is no impairment to be recognized. 11 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 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. Commitments and Contingencies Certain conditions may exist as of the date the unaudited condensed consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In 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. If 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 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. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, and as such, the Company records revenue when its customers obtain control of the promised goods or services in an amount that reflects the consideration that 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. To 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 Company satisfies a performance obligation which is when the Company transfers control of the goods to the customers by shipment or delivery of the products. 12 Recently Issued Accounting Standards In 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 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 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. As of 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. 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 Events The Company evaluates events that have occurred after the balance sheet date of December 31, 2022, through the date which the unaudited condensed consolidated financial statements were issued. 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. NOTE 3 – FIXED ASSETS A summary of the fixed assets as of December 31, 2022 and March 31, 2022 is as follows: SCHEDULE OF FIXED ASSETS (unaudited) December 31, 2022 March 31, 2022 (unaudited) Land $ 324,293 $ 324,293 Buildings 5,439,365 5,611,723 Machinery and equipment 12,210,036 10,524,343 Autos and trucks 307,227 247,356 Fixed assets,gross 18,280,921 16,707,715 Accumulated depreciation ( 2,930,478 ) ( 1,909,612 ) Fixed assets, net $ 15,350,443 $ 14,798,103 The unaudited condensed consolidated statements of operations reflect depreciation expense of approximately $ 416,000 and $ 218,000 , and $ 1,350,000 and $ 830,000 for the three and nine months ended December 31, 2022 and 2021, respectively. 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 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. 13 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 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 December 31, 2022 and March 31, 2022. 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 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 December 31, 2022 and March 31, 2022. NOTE 5 – PROMISSORY NOTE The Company entered into a securities purchase agreement (the “SPA”) with an investor (the “Investor”) on August 17, 2022. Pursuant to the SPA, the Investor purchased a secured promissory note (the “Note”) in the aggregate principal amount 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”). As the Exit 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. As 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 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, 202 2, in the amount of approximately $ 35,000 . The Restructured August Note was analyzed under ASC 470-50 as to if the change in terms qualified as a modification or an extinguishment of the note. 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. 14 NOTE 6 – CONVERTIBLE DEBENTURES December 15, 2021 Debenture The 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 Date”). 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 . 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 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. Beginning 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. Within 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 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. 15 The 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 December 31, 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 December 31, 2022 the fair value of the derivative is $ 30,028,000 , with a change in fair value of $ 16,927,000 recognized in the nine months ended December 31, 2022. On 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 Note; 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 . The Restructured Senior Note was analyzed under ASC 470-50 as to if the change in terms qualified as a modification or an extinguishment of the note. 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. 16 NOTE 7 – STOCKHOLDERS’ EQUITY Preferred Stock As of December 31, 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 1,670 and 2,840 outstanding, respectively, and 750,000 shares of Series F preferred stock are authorized with 750,000 outstanding, respectively. 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. 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. 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. During the nine months ended December 31, 2022, 1,300 shares of Series E Preferred Stock were converted into 14,458,127 shares of common stock. During the three and nine months ended December 31, 2022, the amortization of the beneficial conversion feature of the Series E preferred stock was approximately $ 28,000 and $ 113,000 , and the Series E beneficial conversion feature was fully amortized. 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 nine months ended December 31, 2022, approximately $ 198,000 and $ 755,000 was accreted, and $ 1,114,000 was fully amortized to date as of December 31, 2022. On November 5, 2022, the Company entered a restructuring agreement with GHS, whereby the Series E Preferred Stock and the warrants outstanding ( 13,739,000 warrants of the warrants discussed below) 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. 17 GHS Purchase Agreement On 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. The “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. If 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. Further, 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 Financing. Following the Merger, the Participation Maximum shall be 50% of the Subsequent Financing. In 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 11). Common Shares Issued to Consultant 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 a patent. 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. A total of 62,500 common shares shall vest each quarter through October 1, 2022, at $ 24,275 , with the it fully vested through December 31, 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 entered into with a consultant who was to introduce the Company to customers. Additionally, the consultant was also to assist the Company 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 result of the trial period, the parties could have, but decided not to, negotiate and execute a long-term distribution agreement. The shares will be paid for by the Company withholding sufficient profits from the sale of the live shrimp to the customers introduced by the consultant. 18 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 debt. The 18,573,116 warrants outstanding as of December 31, 2022, were revalued as of period end for a fair value of $ 892,000 , with a decrease in the fair value of $ 3,031,000 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 $ 0.079 ; a risk-free interest rate of 4.11 % to 4.22 %, the expected volatility of the Company’s common stock ranging from 125.3 % to 145.6 %; the estimated remaining term, a dividend rate of 0 %, NOTE 8 – RELATED PARTY TRANSACTIONS Accrued Payroll – Related Parties Included in other accrued expenses on the accompanying unaudited condensed consolidated balance sheets 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 December 31, 2022 and March 31, 2022. 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 December 31, 2022. As of December 31, 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 December 31, 2022 and March 31, 2022. As of December 31, 2022 and March 31, 2022, accrued interest payable was approximately $ 74,000 and $ 74,000 , respectively. Promissory Note On 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 note. 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 . 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 December 31, 2022 and March 31, 2022 and is classified as a current liability on the unaudited condensed consolidated balance sheets. As of December 31, 2022 and March 31, 2022, accrued interest payable was approximately $ 161,000 and $ 146,000 , respectively. 19 Shareholders 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 December 31, 2022 and March 31, 2022 was $ 54,647 and is classified as a current liability on the unaudited condensed consolidated balance sheets. NOTE 9 – LEASES 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 nine months of the sublease term, and $ 17,454 security deposit, which is included in Prepaid expenses on the accompanying unaudited condensed consolidated balance sheets. 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 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. 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 . 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 10 – 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 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. Mr. 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. 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 . 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. 20 Merger Agreement On October 24, 2022, the Company 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”). The Merger Agreement and the transactions contemplated thereby (the “Transactions”) were approved by the board of directors of each of the Company, Yotta, and Merger Sub. The 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. The 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). Pursuant 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 prior to the closing of the Merger 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: (i) 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. As noted in Notes 5 and 6, the Company entered into Restructuring Agreements with the December 2021 Investor as required in the Merger Agreement. 21 The Business Combination is expected to be accounted for as a reverse merger and recapitalization of NaturalShrimp into Yotta in accordance with GAAP because NaturalShrimp has been determined to be the accounting acquirer under ASC 805 under the no-redemption and full redemption scenarios. Under this method of accounting, Yotta will be treated as the “acquired” company for financial reporting purposes. Accordingly, the combined assets, liabilities and results of operations of NaturalShrimp will become the historical financial statements of NaturalShrimp Incorporated, and Yotta’s assets, liabilities and results of operations will be consolidated with NaturalShrimp beginning on the acquisition date. For accounting purposes, the financial statements of NaturalShrimp Incorporated will represent a continuation of the financial statements of NaturalShrimp with the transaction being treated as the equivalent of NaturalShrimp issuing stock for the net assets of Yotta, accompanied by a recapitalization. The net assets of Yotta will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be presented as those of NaturalShrimp in future reports of NaturalShrimp Incorporated. NOTE 11 – 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. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statement. After the period end, there were three purchases of a total of 14,880,460 shares of common stock for a net amount of $ 878,365 , with share price ranging from $ 0.060 to $ 0.065 . On January 20, 2023, the Company entered into a secured promissory note (“January 2023 Note”) with an investor (the “Investor”). The January 2023 Note is in the aggregate principal amount of $ 631,968 . The January 23 Note has an interest rate of 10 % per annum, with a maturity date nine months from the issuance date of the January 23 Note. The January 23 Note carried an original issue discount totaling $ 56,868 , whereby the purchase price is $ 575,100 . All payments made by the Company under the terms in the January 23 Note, including upon repayment of the January 23 Note at maturity, shall be subject to an exit fee of 15 % of the portion of the Outstanding Balance being paid (the “Exit Fee”). 22