What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-18 compared with 2023-02-16 · 544 added, 738 removed, 414 unchanged (76% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

December 31, 2022

June 30, 2023

March 31, 2023

( unaudited )

Current assets

Accounts receivable

Escrow account

Prepaid expenses

6 unchanged sentences

Total other assets

LIABILITIES AND STOCKHOLDERS' DEFICIT

LIABILITIES, MEZZANINE AND STOCKHOLDERS’ DEFICIT

Current liabilities

2 unchanged sentences

Accrued interest - related parties

Accrued interest

Other accrued expenses

Accrued expenses - related parties

Short-term Promissory Note and Lines of credit

Accrued expenses

Short-term Note and Lines of credit

Notes payable

Restructured August note payable

Notes payable - related parties

Notes payable

Dividends payable

Derivative liability

Warrant liability

Lease Liability, current

Total current liabilities

Convertible debenture, less unamortized debt discount of $ 9,680,000

Restructured Senior note payable

Note payable, less current maturities

Lease Liability

Lease Liability, non-current

Total liabilities

Commitments and contingencies (Note 11)

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

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

Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 20,000 shares authorized, 1,500 and 1,670 shares issued and outstanding at June 30, 2023 and March 31, 2023, respectively

Series F Redeemable Convertible Preferred stock, $ 0.0001 par value, 750,000 shares authorized, 750,000 shares issued and outstanding at June 30, 2023 and March 31, 2023, respectively

Temporary equity, value

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

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

Series A Convertible Preferred stock, $ 0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at June 30, 2023 and March 31, 2023

Common stock, $ 0.0001 par value, 900,000,000 shares authorized, 868,263,739 and 803,123,748 shares issued and outstanding at June 30, 2023 and March 31, 2023, respectively

Additional paid in capital

Stock payable

Stock to be issued

Subscription receivable

6 unchanged sentences

Total liabilities, mezzanine and stockholders’ deficit

The accompanying notes are an integral part of these condensed consolidated financial statements.

accompanying footnotes are an integral part of these condensed consolidated financial statements.

NATURALSHRIMP

INCORPORATED and subsidiaries

Consolidated STATEMENTS OF OPERATIONS

the Three Months Ended

the Nine Months Ended

June 30, 2023

June 30, 2022

For the 3 Months Ended

June 30, 2023

June 30, 2022

Cost of sales

Operating expenses:

2 unchanged sentences

Facility operations

operating expenses

Total operating expenses

Net loss from operations

1 unchanged sentence

( 2,886,804 )

( 8,609,365 )

( 7,537,616 )

Other income (expense):

Interest expense

( 1,674,994 )

Interest expense - related

Interest expense - related parties

Amortization of debt discount

( 2,040,000 )

Financing costs

( 1,393,000 )

( 1,502,953 )

Change in fair value of

derivative liability

Change in fair value of

warrant liability

Change in fair value of

restructured notes

( 1,594,515 )

Forgiveness of PPP loan

Gain on Vero Blue note

Gain on extinguishment

Legal Settlement

( 29,400,000 )

Loss due to fire

other income (expense)

( 30,850,991 )

( 2,943,455 )

( 31,241,307 )

Income (loss) before income taxes

( 33,366,545 )

Change in fair value of derivative liability

Change in fair value of warrant liability

Change in fair value of restructured notes

Extension fee

Gain on sale of machinery and equipment

Total other income, net

Loss before income taxes

( 2,298,431 )

1 unchanged sentence

Provision for income taxes

Net income (loss)

( 2,298,431 )

( 2,200,176 )

( 38,778,923 )

Amortization of beneficial conversion feature

on Preferred shares

Amortization of beneficial conversion feature on Preferred shares

Accretion on Preferred shares

Redemption and exchange of Series D Preferred

( 5,792,947 )

Net income (loss) available

for common stockholders

$ ( 33,366,545 )

$ ( 13,001,961 )

Net loss available for common stockholders

$ ( 2,703,256 )

EARNINGS PER SHARE (Basic)

EARNINGS PER SHARE (Diluted)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic)

WEIGHTED AVERAGE SHARES OUTSTANDING (Diluted)

$ ( 2,722,403 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

Loss per share (Basic and Diluted)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and Diluted)

accompanying footnotes are an integral part of these condensed consolidated financial statements.

NATURALSHRIMP

INCORPORATED and subsidiaries

Consolidated STATEMENT of CHANGES IN SHAREHOLDERS’ DEFICIT

A Preferred stock

B Preferred stock

Non-controlling

Consolidated STATEMENT of CHANGES IN STOCKHOLDERS’ DEFICIT

Series A Preferred stock

stockholders’

March 31, 2022

$ ( 150,036,023 )

$ ( 33,133,766 )

stock issued for legal settlement to NSH shareholders

( 19,317,598 )

of Series E Preferred Shares to common stock

beneficial conversion feature related to the Series E Preferred Shares, fully amortized

of beneficial conversion feature related to Series E Preferred Shares

of Series E Preferred Shares

payable on Preferred Shares

stock issued in business agreement, to be paid from revenue earned

stock vested to consultants

( 2,200,176 )

June 30, 2022

$ 117,032,233

$ ( 152,758,426 )

$ ( 34,892,794 )

stock issued for legal settlement to NSH shareholders

of Series E Preferred Shares to

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

of beneficial conversion feature related to Series E Preferred Shares

of Series E Preferred Shares

payable on Preferred Shares

stock issued in business agreement

stock issued from shares payable

stock vested to consultants

( 24,528,345 )

September 30, 2022

$ 118,061,820

$ ( 177,927,198 )

$ ( 59,183,191 )

of common shares under financing agreement

of beneficial conversion feature related to Series E Preferred Shares

of Series E Preferred Shares

payable on Preferred Shares

stock vested to consultants

December 31, 2022

$ 119,464,471

$ ( 163,037,985 )

$ ( 42,889,603 )

March 31, 2021

$ ( 53,683,268 )

of common stock upon conversion

of Series B PS to common stock

of Series D PS to common stock

of Series D Preferred Shares to Series E Preferred Shares

( 3,258,189 )

Balance March 31, 2023

$ 121,156,733

of common shares and warrants for cash, less offering costs and commitment shares

of warrants related to the sale of common shares

conversion feature related to the Series E Preferred Shares

of beneficial conversion feature related to Series E Preferred Shares

of Series D Preferred shares

$ ( 167,533,292 )

( 45,689,165 )

shares to be issued for the acquisition of the non-controlling interest subsidiary's remaining equity

Common stock issued for legal settlement to NSH shareholders

Issuance of common shares under financing agreement

Conversion of Series E Preferred Shares to common stock

Dividends payable on Preferred Shares

Common stock issued to consultants

( 2,298,431 )

shares to be issued for Patent acquisition

stock vested to consultants

Balance June 30, 2023

$ 123,554,174

$ ( 170,236,548 )

June 30, 2021

( 46,261,209 )

of Series E PS to common stock

of beneficial conversion feature related to Series E Preferred Shares

Balance March 31, 2022

$ ( 150,036,023 )

$ ( 33,133,765 )

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

payable on Preferred Shares

shares to be issued for Technical and Equipment Rights Agreement

stock vested to consultants

$ ( 150,036,023 )

$ ( 33,133,765 )

September 30, 2021

Common stock issued for legal settlement to NSH shareholders

( 19,317,598 )

of Series B Preferred Shares to common stock

of Series E Preferred Shares to common stock

of beneficial conversion feature related to Series E Preferred Shares

conversion feature related to the Series E Preferred Shares

of Series E Preferred Shares

payable on Preferred Shares

shares issued for Technical and Equipment Rights Agreement

Conversion of Series E PS to common stock

Contingent beneficial conversion feature related to the Series E Preferred Shares, fully amortized

Amortization of beneficial conversion feature related to Series E Preferred Shares

Accretion of Series E Preferred Shares

Dividends payable on Preferred Shares

Common stock issued in business agreement, to be paid from revenue earned

Common stock vested to consultants

( 2,200,176 )

stock vested to consultants

stock issued to consultants

stock vested to employees

Reclassification

of warrants to liability

( 2,200,176 )

Balance June 30, 2022

$ 117,032,233

stock to be issued for legal settlement to NSH shareholders

$ ( 152,758,426 )

( 34,892,793 )

income (loss)

$ 117,032,233

$ ( 152,758,426 )

December 31, 2021

( 34,892,793 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

accompanying footnotes are an integral part of these condensed consolidated financial statements.

NATURALSHRIMP

INCORPORATED AND SUBSIDIARIES

Consolidated STATEMENTS OF CASH FLOWS

Nine Months Ended

June 30, 2023

June 30, 2022

For the 3 Months Ended

June 30, 2023

June 30, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

6 unchanged sentences

Change in fair value of derivative liability

( 1,314,000 )

Change in fair value of warrant liability

2 unchanged sentences

Financing costs

Gain on extinguishment of debt

( 1,883,089 )

Loss due to fire

Forgiveness of PPP loan

Gain on Vero Blue note settlement

Legal settlement

Gain on sale of machinery and equipment

Shares issued for services

Amortization of operating lease right-of-use assets

Changes in operating assets and liabilities:

3 unchanged sentences

Accounts payable

( 5,637,796 )

Other accrued expenses

2 unchanged sentences

Accrued interest - related parties

Operating lease liabilities

Cash used in operating activities

3 unchanged sentences

Cash paid for fixed assets

( 2,430,186 )

( 2,116,124 )

Cash received for fire damage to fixed assets

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

investing activities

( 1,730,186 )

( 7,899,513 )

Cash received for sale of machinery and equipment

Cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on bank loan

Payments of notes payable

Payments on notes payable, related party

Repayment of short-term promissory note and lines of credit

Proceeds from issuance of common shares under equity agreement

Proceeds from sale of stock

Proceeds from promissory note

Proceeds from promissory note, related parties

Proceeds from convertible debentures

Proceeds from convertible debentures, receipt from escrow

Escrow account in relation to the proceeds from promissory notes

Payments on convertible debentures

Payments on notes payable

( 4,500,000 )

Proceeds from sale of Series E Preferred Shares

Redemption of Series D Preferred Shares

( 3,513,504 )

Shares issued upon exercise of warrants

Cash provided by financing activities

1 unchanged sentence

( 1,069,616 )

CASH AT BEGINNING OF YEAR

CASH AT END OF YEAR

CASH AT BEGINNING OF PERIOD

CASH AT END OF PERIOD

INTEREST PAID

Supplemental Disclosure of Non-Cash Investing and Financing

Supplemental Disclosure of Non-Cash Investing and Financing Activities:

Construction in process transferred to fixed assets

Shares issued upon conversion of convertible debentures

Shares issued upon conversion of Preferred stock

Cancellation of Right of Use asset and Lease liability

Shares issued as consideration for Rights Agreement

Shares issued as consideration for Patent acquisition

Shares issued as consideration for acquisition of remaining NCI

The accompanying notes are an integral part of these condensed consolidated financial statements.

Dividends on Series E Preferred stock

Dividends in kind issued

Shares issued/to be issued, for legal settlement

accompanying footnotes are an integral part of these condensed consolidated financial statements.

NATURALSHRIMP

INCORPORATED AND SUBSIDIARIES

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE THREE AND NINE MONTHS ENDED DECEMBER 31, 2022

THE THREE MONTHS ENDED JUNE 30, 2023

1 – NATURE OF THE ORGANIZATION AND BUSINESS

2 unchanged sentences

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

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

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

The Company’s system uses technology

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

toxic chemicals.

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

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

of oxygen, salinity and temperature for optimal shrimp production.

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

Texas and Webster City, Iowa.

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

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

(“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.

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.

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.

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

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

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

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

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

For the 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

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.

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

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

The Company’s system

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

antibiotics or toxic chemicals.

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

it to produce commercial quantities of shrimp in a closed system with a computer monitoring system that automates, monitors and maintains

proper levels of oxygen, salinity and temperature for optimal shrimp production.

The Company’s production facilities are located

in La Coste, Texas and Webster City, Iowa.

Company has three wholly-owned subsidiaries including NaturalShrimp USA Corporation (“NSC”) and NaturalShrimp Global, Inc.

(“NS Global”) and Natural Aquatic Systems, Inc.

(“NAS”), and owns 51% of NaturalShrimp/Hydrenesis LLC, a Texas

limited liability company.

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

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

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

For the three months ended June 30, 2023, the Company had

a net loss available for common stockholders of approximately $ 2,703,000 .

As of June 30, 2023, the Company had an accumulated deficit

of approximately $ 170,237,000 and a working capital deficit of approximately $ 8,781,000 .

These factors raise substantial doubt about

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

The Company’s

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

short and long-term operating requirements.

During the three months ended June 30, 2023, the Company received net cash proceeds of approximately

$ 1,299,000 from the sale of common shares (See Note 8).

Subsequent to period end, the Company received $ 140,000 proceeds from the issuance

of promissory notes, related parties (See Note 12).

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

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 its 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.

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 its operations.

The Company continues to pursue external financing alternatives to improve its working capital

If the Company is unable to obtain the necessary capital, the Company may be unable to develop its facilities and enter into

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

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

accompanying unaudited financial information as of and for the three months ended June 30, 2023 and 2022 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.

2 unchanged sentences

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.

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.

Operating results for the three months ended June 30, 2023 are not necessarily indicative of the results that may be

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

information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted

accounting principles have been omitted pursuant to the rules of the U.S.

Securities and Exchange Commission (“SEC”).

unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year

ended March 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on June 27, 2023.

condensed consolidated balance sheet at March 31, 2023 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.

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

Consolidation

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.

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.

NSC, NS Global, and NAS.

All significant intercompany accounts and transactions have been eliminated in consolidation.

financial statements in conformity with accounting principles generally accepted in the United States of America requires management

to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and

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

results could differ from those estimates.

and Diluted Earnings/Loss per Common Share

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

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

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

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 ,

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

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.

in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification (“ASC”) 260 – 10 “Earnings per Share”, which establishes the requirements for presenting EPS.

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

Diluted EPS is based on the weighted average number

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

Basic EPS is computed by dividing net income or loss available

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

As of the three months ended June 30, 2023, the Company had 5,000,000 Series A Convertible Preferred Stock which would be converted at

the holder’s option into approximately 868,264,000 underlying common shares, 1,500 of Series E Redeemable Convertible Preferred

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

$ 0.35 , 750,000 shares of Series F Preferred Stock which would be converted at the holders’ option into approximately 208,383,000

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.

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

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

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

conversion price of $ 0.35 , and 640 of Series E Redeemable Convertible Preferred shares whose approximately 7,676,000 underlying shares

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

10 days, 750,000 shares of Series F Preferred Stock which would be converted at the holders’ option into approximately 177,771,000

underlying common shares, approximately $ 18,768,000 in a convertible debenture whose approximately 164,177,000 underlying shares are

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

and 18,506,429 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

Value Measurements

17 unchanged sentences

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

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

derivative and warrant liabilities are Level 3 fair value measurements.

following is a summary of activity of Level 3 derivatives during the nine months ended December 31, 2022 and the year ended March 31,

OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE

December 31, 2022

March 31, 2022

Derivative liability balance at beginning of period

Included in gain on extinguishment of note

( 12,290,000 )

Additions to derivatives

Change in fair value

Balance at end of period

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).

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

of the Company’s common stock of $ 0.225 ;

the conversion price of $ 0.19 ;

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

of the Company’s common stock of 109.47 %.

Company did not have any Level 1 or Level 2 assets and liabilities at June 30, 2023 and March 31, 2023.

warrant liabilities and fair value option on Restructured notes, are Level 3 fair value measurements.

following is a summary of activity of Level 3 derivatives during the three months ended June 30, 2023 and the year ended March 31, 2023:

OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE

December 31, 2022

June 30, 2023

March 31, 2023

Warrant liability balance at beginning of period

Additions to warrant liability

Reclass to equity upon cancellation or exercise

Change in fair value

( 3,568,000 )

( 1,987,000 )

Balance at end of period

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.

June 30, 2023, the fair value of the warrant liability was estimated using the following inputs:

the price of the Company’s common

stock of $ 0.05 ;

a risk-free interest rate ranging from 3.89 % to 4.49 %;

and expected volatility of the Company’s common stock ranging

from 108.4 % to 121.5 % and the remaining terms of each warrant issuance.

March 31, 2023, the fair value of the warrant liability was estimated using a Black Sholes model with the following weighted-average

2 unchanged sentences

common stock ranging from 113.6 % to 121.0 % and the remaining terms of each warrant issuance.

OF DERIVATIVE AND WARRANT AND PROMISSORY NOTE AT FAIR VALUE

December 31, 2022

OF RESTRUCTURED NOTE AT FAIR VALUE

Restructured August and Senior Notes Payable

June 30, 2023

March 31, 2023

Promissory Notes fair value at beginning of period

Fair value of Promissory Note upon Restructuring Agreement

Restructured notes payable fair value at beginning of period

Reclass of accrued interest

Fair value of restructured notes payable upon Restructuring Agreement

Change in fair value

( 1,594,515 )

Promissory Note fair value at end of period

Restructured notes payable fair value at end of period

November 4, 2022, when the Company entered into a Restructuring Agreement for an Amended and Restated Secured Promissory Note for two

1 unchanged sentence

the new debt under ASC 825 fair value option.

The fair value for both periods is based on the maturity dates, the interest of 12 %, the

15 % exit fee, the 2% appreciation fee for an estimated period, and a 40% present value factor.

In accordance with ASC 825, the Company

chose to present the component for the accrued interest in the same line item on the Balance Sheet with the fair value option, and as

of April 1, 2023, reclassed the accrued interest to not be presented as a separate line item.

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

5 unchanged sentences

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.

There were no cash equivalents at June 30, 2023 and March 31, 2023.

Concentration

3 unchanged sentences

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

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.

As of June 30, 2023 and

March 31, 2023, the Company’s cash balance exceeded FDIC coverage.

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

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

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

1 unchanged sentence

OF ESTIMATED USEFUL LIVES

Machinery and Equipment

Furniture and Fixtures

and Equipment

and repairs are charged to expense as incurred.

15 unchanged sentences

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 .

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.

For the three months ended June 30, 2023 and June 30, 2022,

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

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

As of June 30, 2023, the Company believes the carrying value of the intangible

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

August 25, 2021, the Company, through their 100% owned subsidiary NAS, entered into an Equipment Rights Agreements with Hydrenesis-Delta

Systems, LLC (“Hydrenesis-Delta”) and a Technology Rights Agreement, in a sub-license agreement with Hydrenesis Aquaculture

LLC (“Hydrenesis-Aqua”), Both Rights agreements are for a 10-year term, which shall automatically renew for ten-year successive

The agreements accord the exclusive rights to purchase or distribute the technology, or buy or rent the equipment, which is the

primary business and revenue stream generated from indoor aquaculture farming of any species in the territory.

terms of the Agreements set forth that NAS will pay Hydrenesis 12.5% royalty fees.

The royalties are calculated per all customer or sub-license

revenue generated by NAS, NSI or any affiliate, from the sale or rental of either the Technologies or Hydrenesis Equipment, based on

gross revenue less returns, rebates and sales taxes.

There are sales milestones for exclusivity, whereby if NAS fails to achieve a sales

milestone starting in Year 3, the exclusivity rights in both of the Rights agreements shall revert to non-exclusive rights.

the exclusivity for the subsequent year, the Company may pay the amount of the royalty fees that would have been due if the Sales Milestones

had been meet in the current year.

of Long-lived Assets

24 unchanged sentences

would be disclosed.

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.

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.

Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, as

such, the Company records revenue when its 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.

Additionally, the Company will sell or rent

either the Hydrenesis Technologies or Equipment.

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.

the future, if the Company has customers with long-term contracts for multiple shipments of live shrimp, the Company will elect the right-to-invoice

practical expedient and any variable consideration estimate will be excluded from the transaction price and the revenue will be recognized

directly when the goods are delivered.

OF REVENUE RECOGNITION

June 30, 2023

June 30, 2022

Three months ended

June 30, 2023

June 30, 2022

Technology and equipment services

Total revenues

May 21, 2023, the Company entered into a six month agreement with a company for the use of the Hydrenesis Technology and Equipment.

the agreement, the customer is to pay a total of $ 300,000 comprised of an initial payment equal to $ 150,000 and then $ 25,000 per month

for the combined total of the Service Fee.

Issued Accounting Standards

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

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

Accounting for Convertible Instruments

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

instruments with characteristics of liabilities and equity.

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

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

Debt with Conversion and Other Options, that requires

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

or preferred 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.

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

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

of December 31, 2022, there were several new accounting pronouncements issued by the Financial Accounting Standards Board.

August 2020, the FASB issued ASU 2020-06, “Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging

- Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s

Own Equity” (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities

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.

of June 30, 2023, there were several new accounting pronouncements issued by the FASB.

Each of these

3 unchanged sentences

Evaluation of Subsequent Events

Company evaluates events that have occurred after the balance sheet date of December 31, 2022, through the date which the unaudited condensed

Company evaluates events that have occurred after the balance sheet date of June 30, 2023, through the date which the unaudited condensed

consolidated financial statements were issued.

3 unchanged sentences

3 – FIXED ASSETS

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

summary of the fixed assets as of June 30, 2023 and March 31, 2023 is as follows:

OF FIXED ASSETS

6 unchanged sentences

Fixed assets, net

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.

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.

unaudited condensed consolidated statements of operations reflect depreciation expense of approximately $ 435,000 and $ 525,000 for the

three months ended June 30, 2023 and 2022, respectively.

4 – SHORT-TERM NOTE AND LINES OF CREDIT

1 unchanged sentence

The line of credit bears an interest rate of prime plus

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

25.9 basis points , which totaled 34.15 % as of June 30, 2023.

The line of credit is unsecured.

The balance of the line of credit was $ 9,580

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

at both June 30, 2023 and March 31, 2023.

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.

10 basis points , which totaled 18.25 % as of June 30, 2023.

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.

The balance of the line of credit is $ 10,237 at June 30, 2023 and March 31, 2023.

5 – NOTES PAYABLE

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 Note has an interest rate of 10 % per annum, with a maturity

date nine months from the issuance date of the Note.

The 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 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”).

The cash was not

transferred to the Company’s bank account, but instead to the merger entity, Yotta Acquisition Corporation (Note 11), for a contribution

to a required extension fee for the business combination.

2023 Promissory Note

April 21, 2023, the Company entered into a $ 60,000

promissory note with Yotta Investment LLC (“Yotta”), with no interest to accrue on the principal balance.

The promissory

note is to be settled on the date of closing of the business combination contemplated by the Merger Agreement with Yotta

(“Merger Agreement”).

Upon the occurrence of an event of default, including the termination of the Merger Agreement, the

unpaid principal balance of this note, and all other sums payable with regard to this note, shall automatically and immediately

become due and payable, in all cases without any action on the part of the Company.

As discussed in Note 12, the Merger Agreement was terminated subsequent to the period end.

2023 Promissory Note

May 17, 2023, the Company entered into an additional $ 60,000 promissory note with Yotta, with no interest to accrue on the principal

The promissory note is to be settled on the date of closing of the business combination contemplated by the Merger Agreement

Upon the occurrence of an event of default, including the termination of the Merger Agreement, the unpaid principal balance

of this note, and all other sums payable with regard to this note, shall automatically and immediately become due and payable, in all

cases without any action on the part of the Company.

As discussed in Note 12, the Merger Agreement was terminated subsequent to the period end.

Williams Promissory Note

July 15, 2020, the Company issued a promissory note to Ms.

Williams in the amount of $ 383,604 to settle the amounts that had been recognized

per the separation agreement with the late Mr.

Bill Williams dated August 15, 2019, for his portion of the related party notes and related

accrued interest discussed above, and accrued compensation and allowances.

The note bears interest at one percent per annum and calls

for monthly payments of $ 8,000 until the balance is paid in full.

The balance as of June 30, 2023 and March 31, 2023 was $ 95,604 and

$ 119,604 , respectively, with the balance as of June 30, 2023 and $ 96,000 for the year end March 31, 2023, classified in current liabilities,

on the condensed consolidated balance sheets.

6 – RESTRUCTURED AUGUST NOTE PAYABLE

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

6 unchanged sentences

On the closing date the Company received $ 1,100,000 , with $ 3,900,000 put into

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

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

assets of the Company.

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

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

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

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

escrow to be held until certain terms were to be met, which included $ 3,400,000 upon the completion of a successful uplist to NYSE or

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”).

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.

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

8 unchanged sentences

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

The Restructured August Note decreased the principal to $1,748,667,

less an OID of $138,667, and the amount in escrow was returned to the investor, 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

1 unchanged sentence

(“Trigger Events”) .

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

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

30, 2023, in the amount of approximately $ 272,000 .

On July 20, 2023, the Company sent Yotta notice of the Company’s termination

of the Merger Agreement.

(See Note 12)

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

11 unchanged sentences

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.

6 – CONVERTIBLE DEBENTURES

The August Note was revalued as of June 30, 2023 at approximately $ 2,590,000 , with a

change in fair value of approximately $ 190,000 recognized in the Statement of Operations.

The August Note was revalued as of March 31,

2023 at approximately $ 2,400,000 , with a change in fair value of approximately $ 467,000 .

As of June 30, 2023, the accrued interest from

the restructuring date, which is included in the fair value is approximately $ 203,000 .

7 – RESTRUCTURED SENIOR NOTE PAYABLE

15, 2021 Debenture

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

Investor”) on December 15, 2021.

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

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

The December 2021 Note has

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

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

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

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

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

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

the price of the Company’s common stock

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

the estimated remaining

term, a dividend rate of 0 %.

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

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

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

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

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

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

Stock”), per the following formula:

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

by the Redemption Repayment Price.

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

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

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

The redemption amount shall include a

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

As the Exit Fee is to be included in

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

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

In addition to the December 2021 Investor’s

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

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

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

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

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

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

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

In the event the Company has

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

On February 7, 2022, the

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

must be completed to April 15, 2022.

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

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

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

with no additional fee included.

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

the Company receives from the offering expected to be effected in connection with the Uplist (whether from the sale of shares of its

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

In the event the Company does not make this payment,

the then-current outstanding balance will be increased by 10%.

In addition, the Company has 30 days in which to secure the December 2021

Note and grant the December 2021 Investor a first position security interest in the real property in Texas and Iowa, and if it is not

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

The Company is required to reserve 65,000,000 shares

of common stock from its authorized and unissued common stock and to add 100,000,000 shares of common stock to the Share Reserve on or

before March 10, 2022.

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

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

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

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

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

Upon an Event of a

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

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

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

As of December 31, 2022, the Company is in full compliance with the covenants

and Events of Default.

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.

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

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

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

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

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

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

balance per month.

Payments could have been 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

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

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

to redeem a portion of the Note.

The redemption amount shall include an Exit Fee, consisting of a premium of 15% of the portion of the

outstanding balance being paid.

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

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

to a debt discount.

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

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

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

5 unchanged sentences

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.

the Trust Account at the Effective Time or (B) $ 10,000,000 , in order to repay a portion of the outstanding balance of the Senior Note;

after which the remaining balance of the Senior Note is to be repaid in equal monthly installments over a 12-month period beginning on

a date after the Merger Agreement closing date (“Closing Date”) or the termination of such agreement.

All payments made shall

be subject to an Exit Fee of 15% of the portion of the outstanding balance being paid.

Additionally, if the Closing Date is after December

2 unchanged sentences

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 .

Additional key modifications include i) uplist terms in which the Company was to cause the common

stock to be listed for trading on either of (a) NYSE, or (b) NASDAQ, were removed, ii) Maturity date was modified from December 15, 2023

to 12 months from the Closing or termination of the Merger Agreement, provided not to be later than June 30, 2024, and iii) the outstanding

balance of the Senior 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 June 30, 2023, the Merger

has not yet closed, and therefore the 2% of the outstanding balance was increased as of June 30, 2023 , in the amount of approximately

$ 2,675,000 .

On July 20, 2023, the Company sent Yotta notice of the Company’s termination of the Merger Agreement.

(See Note 12)

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

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

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

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

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

Upon such an Event of Default, the interest rate increases to 18% per annum and the outstanding balance of the Note increases from 5%

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

As of June 30, 2023, the Company is in full compliance with the covenants and Events

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.

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

As such, with the removal of the original

1 unchanged sentence

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.

As of the restructuring date the derivative had a fair value of $ 12,290,000 ,

based on assumptions used in a bi-nomial option pricing model, which resulted in a change in fair value of $ 17,738,000 as of the restructuring

date, from its previous fair value of $ 30,028,000 .

The key valuation assumptions used consist, in part, of the price of the Company’s

common stock of $ 0.16 at issuance date;

a risk-free interest rate of 3.73 % and expected volatility of the Company’s common stock,

of 117.77 %, and the strike price of $ 0.1017 .

a result of the extinguishment and at the Company’s election of the fair value option under ASC 825, the Company will account

for the Restructured Senior Note at fair value every period end 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 Company did not evaluate the provisions in

the Restructured Senior Note as to whether they fell under the guidance of embedded derivatives and were required to be bifurcated.

The Restructured Senior Note was revalued as of June 30, 2023 at approximately $ 21,870,000 ,

with a change in fair value of approximately $ 580,000

recognized in the Company’s accompanying condensed consolidated Statement of Operations.

The Senior Note was revalued as of

March 31, 2023, at approximately $ 21,290,000 ,

with a change in fair value of approximately $ 2,376,000

recognized in the accompanying condensed consolidated Statement of Operations.

As of June 30, 2023, the accrued interest from the

restructuring date, which is included in the fair value is approximately $ 3,487,000 .

8 – STOCKHOLDERS’ EQUITY

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.

of June 30, 2023 and March 31, 2023, the Company had 200,000,000 shares of preferred stock authorized with a par value of $ 0.0001 .

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 1,500 and 1,670 outstanding, respectively, and 750,000 shares of Series F preferred stock are authorized with

750,000 outstanding, respectively.

E Preferred Stock

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

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

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

days immediately preceding the date of conversion.

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

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

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

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

of the Series E preferred stock.

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

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

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

Series E Preferred Stock.

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

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

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

into shares of common stock.

the nine months ended December 31, 2022, 1,300 shares of Series E Preferred Stock were converted into 14,458,127 shares of common stock.

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.

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.

May 1, 2023, one of the holders converted 600 Series E Preferred Stock into 23,989,570 shares of common stock.

The conversion represented

their remaining Series E Preferred Stock, including the 10% increase, accrued dividends in kind of $ 516,000 and the 15% Exit Fee of $ 108,000 .

2022 Purchase Agreement

25 unchanged sentences

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 ,

the three months ended June 30, 2023, the Company sold 40,187,311 shares of common stock at a gross amount of approximately $ 1,299,000 ,

at share prices ranging from $ 0.03 to $ 0.04 .

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

the year ended March 31, 2023, the Company sold 52,018,294 shares of common stock at a net amount of approximately $ 3,076,000 , at share

prices ranging from $ 0.04 to $ 0.10 .

Common Stock Equity Financing

April 28, 2023, the Company entered into an Equity Financing Agreement (“Equity Financing Agreement”) and Registration

Rights Agreement with GHS.

Under the terms of the Equity Financing Agreement, GHS agreed to provide the Company with up to $ 10,000,000

upon effectiveness of a registration statement on Form S-1 (the “Registration Statement”) filed with the SEC.

Registration Statement was filed on July 20, 2023 and the SEC declared it effective on August 14, 2023.

effectiveness of the Registration Statement, the Company now has the discretion to deliver puts to GHS and GHS will be obligated to

purchase shares of the Company’s common stock, par value $ 0.0001 per share (the “Common Stock”) based on the investment

amount specified in each put notice.

The maximum amount that the Company shall be entitled to put to GHS in each put notice shall not

exceed two hundred percent ( 200 %) of the average daily trading dollar volume of the Company’s Common Stock during the ten ( 10 )

trading days preceding the put, so long as such amount does not equal less than ten thousand dollars ($10,000) or greater than one million

dollars ($1,000,000).

Pursuant to the Equity Financing Agreement, GHS and its affiliates will not be permitted to purchase and the Company

may not put shares of the Company’s Common Stock to GHS that would result in GHS’s beneficial ownership equaling more than

4.99% of the Company’s outstanding Common Stock.

The price of each put share shall be equal to eighty percent (80%) of the Market

Price (as defined in the Equity Financing Agreement).

Following an up-list to the NASDAQ or equivalent national exchange, the price of

each put share shall be equal to ninety percent (90%) of the Market Price, subject to a floor price of $1.00 per share.

Puts may be delivered

by the Company to GHS until the earlier of twenty-four (24) months after the effectiveness of the Registration Statement or the date

on which GHS has purchased an aggregate of $10,000,000 worth of Common Stock under the terms of the Equity Financing Agreement .

Purchase Agreement

May 9, 2023, the Company entered into a purchase agreement (the “GHS Purchase Agreement”) with GHS pursuant which the Company

may require GHS to purchase a maximum of up to 45,923,929 shares of the Company’s common stock (“GHS Purchase Shares”)

based on a total aggregate purchase price of up to $ 6,000,000 over a one-year term that ends on May 9, 2024.

The Company intends to use

the net proceeds from this offering for working capital and general corporate purposes.

GHS Purchase Agreement provides that, upon the terms and subject to the conditions and limitations set forth in the agreement, the Company

has the right from time to time during the term of the agreement, in its sole discretion, to deliver to GHS a purchase notice (a “Purchase

Notice”) directing GHS to purchase (each, a “GHS Purchase”) a specified number of GHS Purchase Shares.

A GHS Purchase

will be made in a minimum amount of $10,000 and up to a maximum of $1,500,000 and provided that, the purchase amount for any purchase

will not exceed 200% of the average of the daily trading dollar volume of the Company’s common stock during the 10 business days

preceding the purchase date.

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, for the avoidance of doubt, shall

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

The “Purchase Price” means,

with respect to a purchase made pursuant to the GHS Purchase Agreement, 90% of the lowest VWAP (as defined in the GHS Purchase Agreement)

during the Valuation Period (the ten (10) consecutive business days immediately preceding, but not including, the applicable purchase

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, against payment by GHS to the Company of the purchase amount with respect

to such Purchase (less documented deposit and clearing fees, if any), as full payment for such GHS Purchase Shares via wire transfer

of immediately available funds .

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 May 9, 2023 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 initial closing pursuant to the Section 2(a) of GHS Purchase Agreement, 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.

Shares Issued to Consultant

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

issued upon the approval of a patent.

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

services for a two-year period.

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

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.

Stock Issued in Relation to Business Agreement

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.

June 19, 2023, 100,000 shares of common stock were issued to a consultant.

The shares had a fair value of $ 4,700 , based on the market

price of $ 0.047 on the grant date.

Company has not granted any options since inception.

2 unchanged sentences

terms of the existing convertible debt.

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

The 18,573,116

warrants outstanding as of June 30, 2023, were revalued as of period end for a fair value of $ 305,000 ,

with a decrease in the fair value of $ 50,000

recognized on the accompanying condensed consolidated Statement of Operations.

The fair value of the warrant liability was estimated

using Black Scholes Model, with the following inputs:

the price of the Company’s common stock of $ 0.05 ;

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 %,

a risk-free interest rate ranging from 3.89 %

and expected volatility of the Company’s common stock ranging from 108.4 %

and the remaining terms of each warrant issuance.

The 18,506,429

warrants outstanding as of June 30, 2022, were revalued as of period end for a fair value of $ 2,008,000 ,

with a decrease in the fair value of $ 1,915,000

recognized on the accompanying 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 $ 0.12 ;

a risk-free interest rate of 3.01 %,

the expected volatility of the Company’s common stock ranging from 182.4 %

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

9 – RELATED PARTY TRANSACTIONS

Payroll – Related Parties

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.

Compensation – Related Party

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

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

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

May 11, 2021, the Company paid the Chief Financial Officer (“CFO”) 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 CTO compensation bonuses of $ 300,000 each.

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

related parties as of December 31, 2021.

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.

During the year ended March 31, 2022, $ 200,000 was paid each to the President and CTO, with

a total of $ 200,000 remaining in accrued expenses, related parties, as of June 30, 2023 and March 31, 2023.

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

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

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

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

For the three months ended June 30, 2023, the interest expense was $ 3,500 .

As of June 30, 2023 and March 31, 2023, the accrued

interest was approximately $ 26,000 and $ 22,000 , respectively.

NaturalShrimp

4 unchanged sentences

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.

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

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

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

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

The outstanding balance is approximately $ 77,000 as of both June 30, 2023 and March

As of both June 30, 2023 and March 31, 2023, accrued interest payable was approximately $ 74,000 .

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

4 unchanged sentences

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.

June 30, 2023 and March 31, 2023, and is classified as a current liability on the unaudited condensed consolidated balance sheets.

of June 30, 2023 and March 31, 2023, accrued interest payable was approximately $ 146,000 .

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

The balance of these notes at June 30, 2023 and March 31, 2023 was $ 54,647 and is classified as a current

liability on the unaudited condensed consolidated balance sheets.

1 unchanged sentence

The lease commenced on August 1,

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.

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.

which shall be applied to the last six months of the sublease term, and $ 17,454

security deposit, which is included in Prepaid expenses on the accompanying condensed consolidated balance sheet.

assessed its new office lease as an operating lease.

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

7 unchanged sentences

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.

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

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

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

5 unchanged sentences

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

following is a schedule of maturities of lease liabilities as of June 30, 2023:

OF MATURITIES OF LEASE LIABILITIES

Total future minimum lease payments

imputed interest

11 – COMMITMENTS AND CONTINGENCIES

19 unchanged sentences

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.

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

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.

Merger Agreement provided, 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 was to be a wholly-owned

subsidiary of Yotta (the “Merger”).

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

such other name as shall be designated by the Company.

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

given to such terms in the Merger Agreement.

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

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

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

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

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

Consideration Shares”) .

accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time each share of Common Stock outstanding

or deemed outstanding pursuant to the provisions discussed immediately below as of immediately prior to the Effective Time will be converted

into the right to receive its allocable portion of the Closing Merger Consideration Shares and the Contingent Merger Consideration Shares

(to the extent the required revenue thresholds are met).

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

of such convertible securities, such convertible securities will be canceled 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

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.

noted in Notes 5 and 6, the Company entered into Restructuring Agreements with the December 2021 Investor as required in the Merger Agreement.

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

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.

In addition, Yotta was to be renamed “NaturalShrimp, Incorporated” or such

other name as shall be designated by the Company.

noted in Notes 6 and 7, the Company entered into Restructuring Agreements as required in the Merger Agreement.

On July 20, 2023, the Company sent Yotta notice of the Company’s termination of the Merger Agreement.

12 – SUBSEQUENT EVENTS

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

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

in the financial statement.

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 .

January 20, 2023, the Company entered into a secured promissory note (“January 2023 Note”) with an investor (the

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”).

July 20, 2023, the Company sent Yotta notice of the Company’s termination of the Merger Agreement pursuant to Section 10.2(b) thereof

based on breaches by Yotta of certain representations in the Merger Agreement that would render impossible the satisfaction of certain

conditions to the Company’s obligations to consummate the transactions contemplated by the Merger Agreement.

In particular, Yotta

will not be able to comply with the provision of its Amended and Restated Certificate of Incorporation that prohibits Yotta from consummating

an initial business combination unless it has net tangible assets of at least $ 5,000,001 upon consummation of such initial business combination.

This conflicts with Yotta’s representation in the Merger Agreement that its consummation of the transactions contemplated by the

Merger Agreement will not conflict with its organizational documents.

The Company also cited delays in the SEC

registration process that are attributable to Yotta, which breached its covenant pursuant to the Merger Agreement to use its reasonable

best efforts to take all actions reasonably necessary or advisable to consummate the transactions contemplated by Merger Agreement as

promptly as reasonably practicable.

As of August 16, 2023, Yotta has not responded to the Company’s notice

of termination.

On July 10 through

July 17, 2023, the Company received $ 140,000 in proceeds from the issuance of three promissory notes with related parties.

bear interest at 10 % and have maturity dates one year from the issuance date.

On July 24, 2023, the Company entered

into a Securities Purchase Agreement for the additional sale of 156 shares of Series E Preferred Stock at a price of $ 1,000 per share

of Preferred Stock, for a total of $ 156,000 .

The Series E Preferred Stock will earn a dividend of 12 % per annum, for as long as the relevant

Preferred Stock has not been redeemed or converted.

Dividends are to be paid quarterly, and at the Company’s discretion, in cash

or Preferred Stock calculated at the purchase price.

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

What changed 10-Q

Item 1. Financial Statements