What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-18 compared with 2023-02-16 · 549 added, 669 removed, 165 unchanged (88% of the section changed)

21 unchanged sentences

by way of example and without limitation:

ability on a timely basis to successfully rebuild our water treatment plant and replace our

filtration equipment that was destroyed by fire on July 3, 2022 at our La Coste, Texas facility;

ability to continue developing and expanding our research and development plant in La Coste,

Texas and our production facility in Webster City, Iowa;

ability to successfully commercialize our equipment and shrimp farming operations to produce

a market-ready product in a timely manner and in enough quantity;

ability on a timely basis to successfully rebuild our water treatment plant and replace our filtration equipment that was destroyed

by fire on July 3, 2022 at our La Coste, Texas facility;

ability to continue developing and expanding our research and development plant in La Coste, Texas and our production facility in

Webster City, Iowa;

ability to successfully commercialize our equipment and shrimp farming operations to produce a market-ready product in a timely manner

and in enough quantity;

of contracts with customers or suppliers;

5 unchanged sentences

economic and business conditions;

● substantial

doubt about our ability to continue as a going concern;

continued ability to raise funding at the pace and quantities required to scale our plant

needs to commercialize our products;

continued ability to raise funding at the pace and quantities required to scale our plant needs to commercialize our products;

ability to successfully recruit and retain qualified personnel in order to continue our operations;

2 unchanged sentences

commercial success of our products;

interruptions resulting from geo-political actions, including war, and terrorism or disease

outbreaks (such as the outbreak of COVID-19);

● intellectual

interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks (such as the outbreak of COVID-19);

property claims brought by third parties;

12 unchanged sentences

used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us,”

and “our” refer to NaturalShrimp Incorporated and its wholly-owned subsidiaries:

NaturalShrimp USA Corporation (“NSC”)

and NaturalShrimp Global, Inc.

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

Unless otherwise specified,

all dollar amounts are expressed in United States Dollars.

Company was incorporated in the State of Nevada on July 3, 2008 under the name “Multiplayer Online Dragon, Inc.” On January

30, 2015, we acquired substantially all of the assets of NaturalShrimp Holdings, Inc.

a Delaware corporation (“NSH”), that

had developed the proprietary technology to grow and sell shrimp potentially anywhere in the world that is now the basis of our business.

Such assets consisted primarily of all of the issued and outstanding shares of capital stock of its subsidiaries NaturalShrimp USA Corporation

(“NSC”) and NaturalShrimp Global (“NS Global”), and certain real property located outside of San Antonio, Texas,

in exchange for our issuance of 75,520,240 shares of our common stock to NSC.

As a result of the transaction, NSH acquired 88.62% of

our issued and outstanding shares of common stock, NSC and NS Global became our wholly-owned subsidiaries, and we changed our principal

and “our” refer to NaturalShrimp Incorporated and its wholly-owned subsidiaries NSC, NS Global and NAS.

The Company also

owns 51% of NaturalShrimp/Hydrenesis LLC, a Texas limited liability company.

Unless otherwise specified, all dollar amounts are expressed

in United States Dollars.

of Generally Accepted Accounting Principles (“GAAP”) Financial Measures

use United States GAAP financial measures, unless otherwise noted.

All of the GAAP financial measures used by us in this report relate

to the inclusion of financial information.

This discussion and analysis should be read in conjunction with our financial statements and

the notes thereto included elsewhere in this annual report.

All references to dollar amounts in this section are in United States dollars,

unless expressly stated otherwise.

discussion and analysis should be read in conjunction with our financial statements and the notes thereto included elsewhere in this

annual report.

are an aquaculture technology company that has developed proprietary, patented platform technologies to allow for the production of aquatic

species in an ecologically controlled, high-density, low-cost environment, and in fully contained and independent production facilities

without the use of antibiotics or toxic chemicals.

We own and operate indoor recirculating Pacific White shrimp production facilities

in Texas and Iowa using these technologies.

were incorporated in July 2008 and acquired substantially all of the assets of NSH, the company that developed the proprietary technology

to grow and sell shrimp potentially anywhere in the world that is now the basis of our business.

In 2015 NSH acquired 88.62% of the issued

and outstanding shares of NaturalShrimp Common Stock, NSC and NS Global became our wholly-owned subsidiaries, and we changed our principal

business to a global shrimp farming company.

We changed our name to “NaturalShrimp Incorporated” in 2015.

are a biotechnology company and have developed proprietary platform technologies that allow us 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.

Our system uses technology that allows us to produce a naturally grown shrimp “crop” weekly without

the use of antibiotics or toxic chemicals.

We have developed several proprietary technology assets, including a knowledge base that allows

us 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, we acquired certain assets from VeroBlue Farms USA, Inc.

and its subsidiaries VBF Transport, Inc.

First, Inc., including a facility that was designed for the growth of barramundi fish that we are in the process of converting so that

it can produce shrimp using the Company’s propriety technology.

The consideration for the purchase of these assets was (i) $10,000,000,

consisting of (i) $5,000,000 in cash paid at closing, (ii) $3,000,000 payable in 36 months with interest thereon at the rate of 5% per

annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid as a balloon payment on

the maturity date, and (iii) $2,000,000 payable in 48 months with interest thereon at the rate of 5% per annuum, interest only payable

quarterly on the first day of the quarter, with the remaining balance to be paid as a balloon payment on the maturity date.

also issued 500,000 shares of common stock as a finder’s fee in connection with the transaction.

facility was originally designed as an aquaculture facility.

The Company has begun a modification process to convert the plant to produce

shrimp, which will allow us to scale faster without having to build new facilities.

The Iowa facility contains the tanks and infrastructure

that the Company will use to support the production of shrimp with the incorporation of the Company’s electrocoagulation platform

The Company also plans to convert additional square footage currently used as storage to its planned shrimp processing plant.

The development of the facility is 40% completed with full development of the facility expected by December 31, 2022.

May 25, 2021, the Company purchased from F&T Water Solutions LLC (“F&T”) its 50% ownership interest in a water treatment

technology used or useful in growing aquatic species in re-circulating and enclosed environments that the Company and F&T had previously

jointly developed and patented (the “Patent”), as well as F&T’s 100% interest in a second patent associated with

the Patent issued to F&T in March 2018 and all other intellectual property rights owned by F&T for a purchase price of $2,000,000

in cash and 9,900,990 shares of the Company’s common stock.

October 5, 2015, we formed NAS with F&T, the purpose of which was to jointly develop with F&T certain water technologies.

December 17, 2020, we acquired for $10.0 million certain assets from VeroBlue Farms USA, Inc.

and its subsidiaries, which assets included

our three current facilities located in Iowa.

May 25, 2021, we purchased certain parent and intellectual property rights from F&T and acquired all of its outstanding shares in

NAS, thereby making NAS our wholly-owned subsidiary, for $3.0 million in cash and 13,861,386 shares of NaturalShrimp Common Stock.

August 25, 2021, through NAS, we entered into an Equipment Rights Agreements with Hydrenesis-Delta Systems, LLC and a Technology Rights

Agreement with Hydrenesis Aquaculture LLC.

The Equipment Rights Agreement relates to specialized and proprietary equipment used to produce

and control, dose, and infuse Hydrogas ® and RLS ® into both water and other chemical species, while the

Technology Rights Agreement provides us with a sublicense to the rights to Hydrogas ® and RLS ® .

Company has three wholly-owned subsidiaries:

NSC, NS Global, and NAS.

of Technology

2001, we began research and development of a high density, natural aquaculture system that is not dependent on ocean water to provide

quality, fresh shrimp every week, 52 weeks a year.

Our initial system was successful, but we determined that it would not be economically

feasible due to high operating costs.

Over the next several years, using the knowledge we gained from developing the first system, we

developed a shrimp production system that eliminated the high costs associated with the previous system.

We have produced thousands of

pounds of shrimp over the last few years in order to develop a design that will consistently produce quality shrimp that grow to a large

size at a specific rate of growth.

This included experimenting with various types of natural live and synthesized feed supplies before

selecting the most appropriate nutritious and reliable combination.

It also included utilizing monitoring and control automation equipment

to minimize labor costs and to provide the necessary oversight for proper regulation of the shrimp environment.

July 3, 2022, the La Coste, Texas shrimp production facility experienced a fire that damaged the Water Treatment Plant (WTP) including

the filtration equipment within the building.

The initial investigation indicated that the fire started at an external source near the

WTP building.

No one was hurt and this did not cause any damage to the main production building containing the shrimp.

The Company immediately

engaged its Emergency Response Team comprised of management, engineering, production, and sales personnel organized to quickly respond

and deal with potential situations such as this.

Fortunately, the Company has the necessary backup equipment to replace the damaged equipment

which will allow continued production and sales in Texas.

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 unaudited condensed consolidated statement of operations.

began selling live shrimp in late June, and Iowa has been selling since November of 2021.

The initial live shrimp sales were limited

in size to establish and train customers in shipping and handling procedures.

These sales are targeted presently in the Chicago and San

Antonio areas.

As previously announced, the Company has established a partnership with US Foods, a leading foodservice distributor, to

deliver the Company’s fresh never frozen shrimp to US Foods in the South Texas area.

The Company expects sales to begin in November

2022 with sales of approximately 1,000 pounds per month with expected expansion of sales to 4,000 pounds per month in the first calendar

quarter of 2023.

Total sales have also recently included the selling of shrimp at the downtown Webster City, Iowa market for the local

Chamber of Commerce.

expect the combined output from the La Coste, Texas, and Webster City, Iowa facilities should result in a total of 20,000 pounds of shrimp

production for the calendar quarter that will end on December 31, 2022 and 40,000 pounds of shrimp production for the first calendar

quarter of 2023.

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

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

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

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

Merger Agreement and the Merger

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

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

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

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

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 in exchange (except for the Series A Convertible Preferred

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

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

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

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

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

Contingent Merger Consideration Shares;

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

$0.0001 per share, will be canceled and treated as if converted into shares of Common Stock at an adjusted conversion rate as set forth

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

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

and (iii) each outstanding

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

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

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

of the Closing Merger Consideration Shares and the Contingent Merger Consideration Shares.

In addition, each holder of Series E Preferred

will be entitled to receive at the Effective Time an additional number of Closing Merger Consideration Shares as are necessary to ensure

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

on the effective purchase price) of the aggregate Yotta Shares then held by any Yotta stockholder after taking into account any newly-issued

Yotta Shares that such Yotta stockholder acquires directly from Yotta prior to the closing of the Merger (the “Closing”)

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

The Series A Preferred will be cancelled and retired without any conversion thereof and for no consideration.

addition, the Merger Agreement provides that, pursuant to an agreement to be entered into between the Company and Streeterville Capital,

LLC (“Streeterville”) as the holder of the Secured Convertible Promissory Note in the initial amount of $16,320,000.00 issued

by the Company to Streeterville with an effective date of December 15, 2021 (the “Convertible Note”), contingent on and effective

as of the Effective Time, the Convertible Note will be amended to eliminate the conversion feature thereof.

Also, such agreement will

(i) for the payment to Streeterville of an amount equal to the lesser of (A) one-third of the amount retained in the Trust

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

that the remaining balance of the Convertible Note be repaid in equal monthly installments over a 12-month period beginning on a date

after the Closing Date or the termination of such agreement;

and (iii) that if the Closing Date is after December 31, 2022, the outstanding

balance of all indebtedness owed by the Company to Streeterville will be increased automatically by 2% and will automatically increase

by 2% every 30 days thereafter until the Closing, or substantially similar terms as approved by the Board of Directors of the Company.

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

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

Merger is expected to close in the first calendar quarter of 2023, following the receipt of the required approvals by the stockholders

of the Company and Yotta, conditional approval by the Nasdaq Stock Market of Yotta’s initial listing application filed in connection

with the Merger, and the fulfillment of other customary closing conditions.

Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, without

(i) by the mutual written consent of the parties;

(ii) by either Yotta or the Company if the Closing does not occur on or

prior to July 22, 2023 or, if an Additional Extension Period has been approved, at the expiration of such period (the “Outside

Termination Date”), unless the breach of any covenants or obligations under the Merger Agreement by the party seeking to terminate

(or, in the case of Yotta, by Merger Sub) proximately caused the failure to consummate the Transactions by the applicable date;

by either Yotta or the Company if any governmental authority shall have issued an order, enacted a law, or taken any other action that

has the effect of making the Transactions illegal or permanently restraining, enjoining, or otherwise prohibiting the consummation of

the Transactions and such law or order or other action shall have become final and nonpeelable, unless the failure by such party or its

affiliates to comply with any provision of the Merger Agreement was a substantial cause of, or substantially resulted in, such action

by such governmental authority;

(iv) by Yotta, subject to certain exceptions, if the Company has breached any of its representations,

warranties, covenants, or agreements in the Merger Agreement and such breach cannot be cured at all or within the earlier of (A) 30 days

after written notice thereof and (B) the Outside Termination Date;

(v) by Yotta, subject to certain exceptions, if the Company does not

receive the required stockholder approval of the Merger Agreement within five business days after the effective date of the Form S-4;

(vi) by Yotta, subject to certain exceptions, if the Company fails to enter into the Convertible Instrument Agreements by November 7,

and (vii) by the Company, subject to certain exceptions, if Yotta or Merger Sub has breached any of its representations, warranties,

covenants, or agreements in the Merger Agreement and such breach cannot be cured at all or within the earlier of (A) 30 days after written

notice thereof and (B) the Outside Termination Date.

the Merger Agreement is validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation

under the Merger Agreement other than customary confidentiality obligations, except in the case of a willful breach of any covenant or

agreement under the Merger Agreement or fraud, provided, that (A) if Yotta terminates the Merger Agreement pursuant to clauses (iv),

(v), or (vi) of the preceding paragraph, the Company must pay to Yotta, within two business days of such termination, a termination fee

in the amount of $3,000,000, and (B) if the Company terminates the Merger Agreement pursuant to clause (vii) of the preceding paragraph,

Yotta shall pay to the Company, within two business days of such termination, a termination fee in the amount of $3,000,000.

NSC, NS Global, and NAS, and owns 51% of NaturalShrimp/Hydrenesis LLC, a Texas limited liability

of the shrimp consumed in the world today come from shrimp farms that can only produce crops between one and four times per year.

Consequently,

the shrimp from these farms requires freezing between crops until consumed.

Our system is designed to harvest different tanks each week,

which provides for fresh shrimp throughout the year.

We strive to create a niche market of “Always Fresh, Always Natural”

As opposed to many of the foreign shrimp farms, we can also claim that our product is 100% free of antibiotics.

The ability to

grow shrimp locally and year-round allows us to provide this high-end product to upscale restaurant and grocery stores throughout the

We rotate the stocking and harvesting of our tanks each week, which allows for weekly shrimp harvests.

Our product is free of

pollutants and is fed only the highest-quality feeds.

began making regular weekly sales of live shrimp from our Iowa production facility in November 2021 and from our Texas production

facility in June 2022.

Although our revenues were initially limited, our gross sales for the fiscal year ended March 31, 2023

increased significantly as compared to the fiscal year ended March 31, 2022.

The Company is using its aforementioned platform technologies to retrofit 344,000 square feet of its

existing Iowa facilities that we expect will, once fully operational, produce 18,000 pounds of shrimp per week.

We believe that the

combined output from our La Coste, Texas and Iowa facilities will be approximately 24,000 pounds of shrimp production per week by

the third or fourth calendar quarter of 2023.

We can, however, provide no assurances as to how significant our revenue will be in

the next one to two fiscal quarters.

of Operations

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

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

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

At the beginning of fiscal 2023 these sales

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

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

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

of staff and packaging necessary for shipment of live shrimp.

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

and execute a long-term distribution agreement.

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

the other in September 2022.

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

December 31, 2021:

Three Months Ended December 31,

Salaries and related expenses

Professional fees

Other general and administrative expenses

Facility operations

Research and development

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

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

in professional fees and other general and administrative expenses.

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

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

operations in our Iowa and Texas facilities.

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

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

Salaries and related expenses increased

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

increase in the number of employees and normal salary increases.

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

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

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

income (expense)

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

and December 31, 2021:

Three Months Ended December 31,

Interest expense

Interest expense - related parties

Amortization of debt discount

Financing costs

Change in fair value of derivative liability

Change in fair value of warrant liability

Change in fair value of restructured notes

Gain on Vero Blue note settlement

Gain on extinguishment of debt

Legal settlement

(29,400,000 )

Loss due to fire

$ (30,850,991 )

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

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

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

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

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

There was no derivative liability in the prior period.

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

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

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

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

Additionally, prior

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

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

The amortization of

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

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

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

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

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

of operations as legal settlement.

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

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

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

December 31, 2021.

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

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

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

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

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

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

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

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

Nine Months Ended December 31,

of the Three Months Ended June 30, 2023 to the Three Months Ended June 30, 2022

had gross sales revenue of $205,872 and $36,336, respectively, during the three months ended June 30, 2023 and 2022, an increase of approximately

$170,000, or 467%.

increase in gross sales revenue during the three months ended June 30, 2023 over the prior period was a result of our sale of shrimp

to two customers directly during fiscal 2023 that had been made exclusively through a consultant during fiscal 2022 and the increased

production of shrimp available for sale, which resulted in us being able to sell more shrimp to meet existing demand.

Additionally, the

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

received the initial payment of $150,000.

had net revenues of $156,131 and $36,336, respectively, during the three months ended June 31, 2023 and 2022.

The increase in net revenues

for the first quarter of fiscal 2024 is the result of the increase in gross sales revenue, the inclusion of the contract for the use

of the Hydrenesis Technology and Equipment, offset by the cost of sales in the first quarter of fiscal 2024.

of sales includes direct costs related to the production and sale of our products, primarily the cost of the post-larva shrimp that we

purchase to grow into our shrimp product at our facilities and the costs of shipping purchase orders to customers.

Cost of sales were

$49,741 and $0, respectively, during the three months ended June 30, 2023 and 2022.

following table summarizes the various components of our operating expenses for each of the three months ended June 30, 2023 and 2022:

Three Months Ended June 30,

Salaries and related expenses

Professional fees

Professional services

Other general and administrative expenses

1 unchanged sentence

Research and development

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

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

expenses and professional fees .

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

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

of the commercial operations in our Iowa and Texas facilities .

Depreciation increased $519,429,

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

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

Amortization increased $588,500, or 114.5%,

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

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

to recognize in August 2021.

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

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

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

Professional fees

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

nine months ended December 31, 2021.

expenses for the three months ended June 30, 2023 were $2,459,018, which is a 15.9% decrease over operating expenses of $2,923,140 for

the same period in 2022.

The overall change in expenses is mainly the result of decreases in facility operations relating to the progress

of the commercial operations in the new plant in Iowa as well as in Texas, and the fact that some facility operations now being considered

as cost of revenue.

Additionally, as a result of the production of the shrimp there was not any research and development in the current

Salaries increased by approximately $69,000 for additional employees.

Professional fees decreased by approximately $123,000,

due to increased attorneys work with the Company on equity offerings and SEC filings, as well as consultant and accounting fees, in the

prior period.

The depreciation in the three months ended June 30, 2023, decreased due to the progressed fixed assets as well as the movement

of construction in process to fixed assets, in the two plants.

Income (Expense)

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

December 31, 2021:

Nine Months Ended December 31,

following table summarizes the various components of our other income (expenses) for each of the three months ended June 30, 2023 and

Three Months Ended

Interest expense

$ (1,674,994)

Interest expense – related parties

Amortization of debt discount

Financing costs

Change in fair value of derivative liability

1 unchanged sentence

Change in fair value of restructured notes

Forgiveness of PPP loan

Gain on Vero Blue note settlement

Gain on extinguishment of debt

Legal settlement

(29,400,000 )

Loss due to fire

$ (2,953,455)

$ (31,241,307 )

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

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

Additionally, as

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

the nine months ended December 31, 2022.

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

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

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

There was no derivative liability in the prior period.

Therefore, the change

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

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

notes issued in December of 2021 and August of 2022.

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

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

as compared to the prior period.

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

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

the notes through November 4, 2022.

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

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

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

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

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

resulted in a $137,000 expense.

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

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

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

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

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

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

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

recognized in the nine months ended December 31, 2021.

Extension fee

Gain on sale of machinery and equipment

expense for the three months ended June 30, 2023, decreased approximately $682,000, or 99.4%, from the same period in the prior year,

almost entirely restructuring of the convertible and August note, due to the removal of the derivative related to the conversion feature

and the debt discount as a result of the accounting treatment as an extinguishment of debt.

Further, due to the election to account for

the restructured notes under the fair value option, in the current period there is a change in fair value of the restructured notes,

and the interest expense is not recognized separately in the statement of operations but included in the change in fair value of the

restructured notes.

Additionally, there was an extension fee related to the delay in the Merger Agreement closing in the current period.

Company originally recognized the warrant liability in December 2021 and revaluates it at each period-end.

The decrease in the fair value

for the three months ended June 30, 2023, as compared to the prior year end, resulted in a $50,000 recognition as income during the three

months ended June 30, 2023, compared to a decrease in fair value as of June 30, 2022, which resulted in $1,915,000 in income during the

three months ended June 30, 2022.

Financial Condition and Capital Resources

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

of June 30, 2023, we had cash on hand of approximately $70,000 and working capital deficiency of approximately $8,781,000, as compared

to cash on hand of approximately $216,000 and a working capital deficiency of approximately $9,339,000 as of March 31, 2023.

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

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

a decrease in fair value of the warrant liability.

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

in accounts payable.

Capital/(Deficit)

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

capital for the three months ended June 30, 2023, as compared to the March 31, 2023 year end is not significantly different, with solely

an increase (a reduced working capital deficiency) of 6.0%.

This is mainly due to the decrease in cash on-hand, and slight increases

in other current assets , offset by a decrease in current liabilities from the reclass of the accrued interest into the inclusion in

the line item for the fair value of the restructured notes.

Capital Deficiency

following table summarizes our working capital deficiency at of June 30, 2023 and March 31, 2023:

Current assets

3 unchanged sentences

$ (9,339,412 )

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

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

Then there was a decrease in

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

The decrease in current liabilities

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

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

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

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

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

can be summarized as follows:

Nine months Ended December 31,

assets decreased mainly because of the use of the cash on hand.

This was offset by an increase in deferred offering costs, relating to

the Merger Agreement.

The decrease in current liabilities is primarily due to the reclass of the accrued interest on the restructured

notes into the line item for the fair value of the restructured notes, which only the Restructured August note payable is in the current

liabilities, off set by the increase in accrued expenses to related parties and the fair value of the Restructured August note.

following table summarizes our cash flows for the three months ended June 30, 2023 and 2022:

Three months Ended June 30,

Net cash used in operating activities

5 unchanged sentences

$ (1,069,616 )

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

same period in 2021.

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

the decrease in accounts payable in the prior period.

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

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

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

same period in the prior nine-month period.

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

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

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

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

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

cash used in operating activities during the three months ended June 30 2023, was approximately $654,000 less as compared to the same

period in 2022.

The decrease in cash used is primarily due to the decrease in prepaid expenses and an increase in accrued expense for

related parties, which is accrued payroll.

Additionally, there was less of an increase in accounts payable during the three months ended

June 30, 2023 compared to the same period in the three months ended June 30, 2022, which reflects an additional use of cash during 2022.

net cash used in investing activities in the three months ended June 30, 2023 decreased by approximately $471,000 compared to the same

period in the prior fiscal year.

During the current period cash was only used to purchase approximately $39,000, as compared to cash

used to purchase fixed assets which consists of approximately $491,000 for the prior year period.

net cash provided by financing activities decreased by approximately $201,000 between periods.

For the current period, the Company

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

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

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

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

In the same period

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

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

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

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

Management believes that our cash on hand and working capital deficit

are not sufficient to meet our current anticipated cash requirements for additional anticipated capital expenditures, operating expenses

For the current period, the Company received

approximately $1,299,000 for the sale of shares of common stock.

In the same period in the prior year the Company received $1,500,000

that had been held in escrow from the convertible note they entered into in December of 2021.

cash position was approximately $70,000 as of June 30, 2023.

Management believes that our cash on hand and working capital deficit are

not sufficient to meet our current anticipated cash requirements for additional anticipated capital expenditures, operating expenses

and scale-up of operations for the next twelve months.

3 unchanged sentences

The line of credit bears an interest rate of prime

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

plus 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 at both December 31, 2022 and March 31, 2021.

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

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

The line of credit bears an interest rate of prime plus

10 basis points, which totaled 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.

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

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

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

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

Purchase Agreement

November 4, 2022, the Company entered into a purchase agreement (the “GHS Purchase Agreement”) with GHS pursuant to which

the Company may require GHS to purchase a maximum of up to 64,000,000 shares of NaturalShrimp Common Stock (“GHS Purchase Shares”)

based on a total aggregate purchase price of up to $5,000,000 over a one-year term that ends on November 4, 2023.

Notwithstanding the

foregoing dollar limitations, the Company and GHS may, from time to time, mutually agree in writing to waive the aforementioned limitations

for a particular purchase of GHS Purchase Shares, which waiver may not exceed the 4.99% beneficial ownership limitation contained in

the GHS Purchase Agreement.

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

intends to use the net proceeds from the sale of any GHS Purchase Shares for working capital and general corporate purposes.

purchase price for the GHS Purchase Shares is 90% of the lowest volume-weighted average price during the 10 consecutive business days

immediately preceding, but not including the applicable purchase date.

The Company must deliver a number of GHS Purchase Shares equal

to 112.5% of the aggregate purchase amount for any such purchase of GHS Purchase Shares divided by the applicable purchase price per

any default events, as set forth in the GHS Purchase Agreement, has occurred and is continuing, the Company may not require GHS to purchase

any GHS Purchase Shares.

pursuant to the terms of the GHS Purchase Agreement, from November 4, 2022 until the later of the Closing and the 12-month anniversary

of the first delivery of GHS Purchase Shares, upon any issuance by the Company or any of its subsidiaries of shares of NaturalShrimp

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

Financing”), GHS will have the right to participate in any such financing in an amount equal to 100% or, following the Merger,

up to 50% of such financing, on the same terms, conditions and price otherwise provided for in such subsequent financing.

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.

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

The 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.

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 “Maturity Date”).

The Note carried an original issue discount totaling

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

On the Closing

Date the Company 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”).

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

either event, an “Uplist”).

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

outstanding balance will be increased by 10%.

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

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

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

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

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

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

The Restructuring Agreement included key modifications, in which

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

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

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

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

(“Trigger Events”).

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

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

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

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 cash was not transferred to the Company’s

bank account, but instead to the merger entity, Yotta, 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 termination

was entered into 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 termination was entered into subsequent to the period

Promissory Note

August 17, 2022, Streeterville purchased from us the August Note.

The August Note has an annual interest rate of 12% and was to mature

on May 17, 2023.

The August Note carried an original issue discount (“OID”) totaling $433,333 and a transaction expense amount

of $10,000, both of which are included in its principal balance.

At issuance the Company received $1.1 million, with $3.9 million put

into escrow to be held until certain terms are met, which includes $3.4 million upon the listing of the NaturalShrimp Common Stock on

the New York Stock Exchange (“NYSE”) or Nasdaq.

The August Note also provided that if the Company did not effect the listing

of the NaturalShrimp Common Stock by November 15, 2022, the then-current outstanding balance on the August Note increased by 10%, and

that following such listing, while the August Note was still outstanding, 10 days after the Company sold any shares of NaturalShrimp

Common Stock or NaturalShrimp Preferred Stock, it would have been required to make a mandatory prepayment on the August Note equal to

the greater of $3.0 million or 33% of the gross proceeds of such equity sale.

The August Note is secured by all of the assets of the

All payments made by the Company on the note, including upon repayment at maturity, is subject to an exit fee of 15% of the

portion of the outstanding balance being paid.

conjunction with the Merger Agreement, the Company entered into a Restructuring Agreement with respect to the August Note through which

the August Note was amended and restated in its entirety.

The Restructuring Agreement included key modifications, in which (i) the uplist

terms were removed, (ii) in the event that the Closing does not occur on or before December 31, 2022, the then-current outstanding balance

will be increased by 2% and will increase by 2% every 30 days thereafter until the Closing or termination of the Merger Agreement, and

(iii) the outstanding balance of the August Note may be increased by 5% to 15% upon the occurrence of an event of default or failure

to obtain Streeterville’s consent or notify Streeterville for certain major equity related transactions.

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

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

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

2 unchanged sentences

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

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

to the restructured note with a fair value of approximately $1.9 million, there was a loss in extinguishment of approximately $157,000.

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

accounted for at fair value until they are settled.

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

1 unchanged sentence

for embedded derivatives.

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

derivatives and were required to be bifurcated.

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

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

Therefore, we did not evaluate the provisions in the August Note as to whether it fell under the guidance of

embedded derivatives and was required to be bifurcated.

Note — related parties

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

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

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

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

Company entered into a securities purchase agreement (the “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”).

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 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.

August 10, 2022, the Company entered into a loan agreement for an aggregate of $300,000 with six related parties, which is to be considered

priority debt of the Company.

As of the date of this report, 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 10% per annum and are due one year

from the date of the note.

For the year ended March 31, 2023, the interest expense was $22,270.

issued the Convertible Note in December 2021.

The Convertible Note had an annual interest rate of 12% and matured on December 15, 2023.

The Convertible Note carried an OID totaling $1.3 million and a transaction expense amount of $20,000, both of which were included in

the principal balance of the Convertible Note.

The Convertible Note had $2.0 million in debt issuance costs, including fees paid in cash

of $1.1 million and warrants to purchase 3,000,000 shares of the Company’s common stock that we issued to the placement agents

with a fair value of $940,000.

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

of the common stock of $0.32;

a risk-free interest rate of 1.19%;

the expected volatility of the common stock of 209.9%;

the estimated

remaining term;

and a dividend rate of 0%.

We classified the warrants as a liability, as it was not known if there would be sufficient

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

Company was required to obtain an effective registration statement or a supplement to any existing registration statement or prospectus

with the SEC registering at least $15.0 million in shares of NaturalShrimp common stock for Streeterville’s benefit such that any

redemption using shares of NaturalShrimp common stock could be done using registered shares of NaturalShrimp common stock.

Additionally,

the Company was required, as soon as reasonably possible following the issuance of the Convertible Note, to cause the Company’s

common stock to be listed for trading on either NYSE or Nasdaq.

In the event the Company did not effectuate such listing by March 1,

2022, the then-current outstanding balance would be increased by 10%.

On February 7, 2022, the Company and Streeterville entered into

an amendment to the SPA, which extended the date by which the Uplist must be completed to April 15, 2022.

In consideration of the grant

of the extension an extension fee of $249,079 was added to the principal balance, which we recognized as a financing cost.

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

the date by which the listing 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 Borrower does not make this payment, the then-current outstanding

balance will be increased by 10%.

The December 2021 Note also contains certain negative covenants and Events of Default.

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.

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

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

These amendments

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

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

Second, a Mandatory Payment was added

whereby within 3 trading days of the closing upon the Merger an amount equal to the lesser of (A) one-third of the amount retained in

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

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

beginning on a date after the Closing Date or the termination of such agreement.

Additionally, if the Closing Date is after December

31, 2022, the outstanding balance of all indebtedness owed by the Company to December 2021 Investor will be increased automatically by

2% and will automatically increase by 2% every 30 days thereafter until the Closing, or substantially similar terms as approved by the

Board of Directors of the Company.

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

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

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

transactions (“Trigger Events”).

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

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

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

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

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

As such, with the removal of the original

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

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

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

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

In accordance with ASC

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

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

Therefore, the provisions in the Senior Note were

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

The Senior Note was revalued

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

of Operations.

Purchase Agreement

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

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

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

ends on November 4, 2023.

Notwithstanding the foregoing dollar limitations, the Company and GHS

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

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

The Company is to control

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

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

working capital and general corporate purposes.

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

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

The Company shall deliver a

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

share for such GHS Purchase.

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

to GHS any Purchase Notice.

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

transactions whereby Yotta Merger Sub, Inc.

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

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

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

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

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

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

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

at share prices ranging from $0.08 to $0.10.

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

Shares Issued to Consultant

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.

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

Stock Issued in Relation to Business Agreement

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.

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

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

The shares will be paid by the Company withholding

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

The Company must make a one-time payment to Streeterville equal to 15% of the gross proceeds that the Company receives

from the offering expected to be effected in connection with the listing (whether from the sale of shares of its common stock and / or

preferred stock) within 10 days of receiving such amount.

In the event that the Company does not make this payment, the then-current

outstanding balance will be increased by 10%.

The Convertible Note also contains certain negative covenants and events of default.

the occurrence of an event of default, at its option and sole discretion, Streeterville may consider the Convertible Note immediately

due and payable.

Upon such an event of default, the annual interest rate on the Convertible Note will increase to 18% and the outstanding

balance will increase from 5% to 15%, depending upon the specific event of default.

accordance with the terms of the Merger Agreement, the Company and Streeterville entered into Restructuring Agreement dated as of November

4, 2022, pursuant to which the Convertible Note was amended and restated, and the Company issued to Streeterville and Amended and Restated

Secured Promissory Note that amended and replaced the Convertible Note (the “Restructured Senior Note”), that:

(i) eliminated

the conversion feature of the Convertible Note;

(ii) provides that within three trading days of the closing of the Business Combination,

NaturalShrimp as the surviving entity in its merger with Merger Sub as a wholly-owned subsidiary of Yotta will pay Streeterville an amount

equal to the lesser of (A) one-third of the amount (calculated prior to any deductions for any broker, underwriter, legal, accounting

or other fees) retained in Yotta’s Trust Account (the “Trust Account”) at the effective time of the Business Combination

or (B) $10,000,000, in order to repay a portion of the outstanding balance of the Restructured Senior Note;

(iii) provide that the remaining

balance of the Restructured Senior Note must be repaid in equal monthly installments over a 12-month period beginning on the second month

immediately following either the closing date of the Business Combination or the termination of the Merger Agreement, but in no case

later than June 30, 2024;

and (iv) provides that if the closing date of the Business Combination is after December 31, 2022, the outstanding

balance of all indebtedness owed by NaturalShrimp to Streeterville will be increased automatically by 2% and will automatically increase

by 2% every 30 days thereafter until the closing of the Business Combination or the termination of the Merger Agreement.

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

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

As of August 16, 2023,

Yotta has not responded to the Company’s notice of termination.

analyzed the Restructured Senior Note under ASC 470-50 as to if the changes 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 Restructured

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

As such, with the removal of the Convertible

Note and its debt discount and accrued interest as compared to the Restructured Senior Note with a fair value of approximately $18.9

million, there was a gain in extinguishment of approximately $2.5 million.

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

election of the fair value option under ASC 825, we 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.

we 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.

We revalued the Restructured Senior Note 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 Statement of Operations.

E Preferred Stock and Warrant

November 22, 2021, we sold to an accredited investor 1,500 shares of Series E Preferred at a price of $1,000 per share and a warrant

to purchase up to 1,500,000 shares of NaturalShrimp common stock at an exercise price of $0.75 per share, subject to adjustment as set

forth therein, for an aggregate purchase price of $1.5 million.

We received approximately $1.4 million in net proceeds after deducting

the commission of Joseph Gunnar & Co., LLC (the placement agent) and other estimated offering expenses payable by the Company.

issued warrants to purchase 334,116 shares of our common stock to the placement agent as placement agent fees.

Exchange Agreement and Redemption

April 14, 2021 the Company, entered into a share exchange agreement (the “Exchange Agreement”) with a holder of the Company’s

Series D Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), whereby, at the closing of the Offering,

the Holder agreed to exchange an aggregate of 3,600 shares of the Series D Preferred Stock into 3,739.63 shares of the Company’s

Series E Convertible Preferred Stock, par value $0.0001 (the “Series E Preferred Stock”).

The exchange was completed on April

In accordance with ASC 260-10-S99-2, exchanges of preferred stock that are considered to be extinguishments are to be accounted

for as a redemption.

Therefore, the difference between the fair value of the Series E Preferred Stock transferred to the holder of the

Series D Preferred Stock and the carrying amount of the Series D Preferred Stock immediately prior to the exchange, which was $3,258,189,

was accounted for in a manner similar to a dividend.

June 16, 2022, one of the holders of the 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 Company’s common stock during the

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 that 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 shares of Series

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

E Preferred Stock into shares of common stock.

On May 1, 2023, the holder 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.

30, 2023 there were 1,500 shares of Series E Preferred Stock remaining outstanding.

November 5, 2022, the Company entered a restructuring agreement with the holders of the Series E Preferred Stock whereby the Series E

Preferred Stock and the warrants outstanding, including all holders of the warrants (in Note 13 in the consolidated financial statement

footnotes) as of the closing date of the Business Combination will have their terms adjusted.

The outstanding warrants will be (i) 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’s common stock during the five trading day period

immediately prior to the closing date of the Business Combination (the “Adjusted Exercise Price”) or (ii) as of the effective

time of the Business Combination, 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 shares of common stock underlying the warrants on the closing date

of the Business Combination and the Adjusted Exercise Price, with the shares of the Company’s common stock that would have been

due to the holder as a result of such exercise of the warrant treated as if issued to the holder and then converted into the right to

receive (A) the Closing Per Share Merger Consideration (as defined in the Merger Agreement) plus (B) 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.

The shares of Series E Preferred Stock that are outstanding immediately prior to the effective time of the Business Combination will

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 of the Business Combination.

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 will be treated as issued to holder and converted, as of the effective time of the Business Combination,

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.

April 14, 2021, NaturalShrimp entered into a securities purchase agreement with GHS to sell to GHS:

(i) 9,090,909 shares of NaturalShrimp

common stock at a price per share of $0.55;

(ii) warrants to purchase up to 10,000,000 shares of NaturalShrimp common stock, at an exercise

price of $0.75 per share;

and (iii) 1,000,000 shares of NaturalShrimp common stock with a value (although no purchase price will be paid)

of $0.65 per share, pursuant to which, until April 14, 2022, GHS had a right to participate in any subsequent financing that we conducted.

November 22, 2021, NaturalShrimp and GHS entered into a waiver whereby GHS agreed to waive its right to participate in the above-described

offering and to participate in a possible debt financing.

GHS also agreed to waive its right, pursuant to the Certificate of Designation

for the Series E Preferred Stock, to exchange its shares of Series E Preferred Stock for securities issued in the debt financing, if

the Company enters into such financing.

consideration for GHS entering into the waiver, we lowered the exercise price of the warrants we had previously issued to GHS to $0.35

per share and issued to GHS warrants to purchase 3,739,000 shares of NaturalShrimp Common Stock at an exercise price of $0.75 per share.

Concern and Management Liquidity Plans

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

the Company will continue as a going concern.

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

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

Presently, the Company does not have

sufficient cash resources to meet its plans in the twelve months following the date of issuance of this filing.

These factors raise substantial

doubt about the Company’s ability to continue as a going concern.

Management is in the process of evaluating various financing

alternatives in order to finance the continued build-out of our equipment and for general and administrative expenses.

These alternatives

include raising funds through public or private equity markets and either through institutional or retail investors.

Although there is

no assurance that the Company will be successful with our fund-raising initiatives, management believes that the Company will be able

to secure the necessary financing as a result of ongoing financing discussions with third party investors and existing shareholders.

unaudited condensed consolidated financial statements do not include any adjustments that may be necessary should the Company be unable

to continue as a going concern.

The Company’s continuation as a going concern is dependent on its ability to obtain additional

financing as may be required and ultimately to attain profitability.

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

the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior

to the rights, preferences and privileges of the Company’s 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 its future plans for developing

its business and achieving commercial revenues.

If the Company is unable to obtain the necessary capital, the Company may have to cease

consolidated financial statements have been prepared assuming that it will continue as a going concern.

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.

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

from the issuance of promissory notes, related parties.

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 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 future planned facilities

and, concomitantly, increase its shrimp production.

Company’s consolidated financial statements included in this report do not include any adjustments that may be necessary should

the Company be unable to continue as a going concern.

The Company’s continuation as a going concern is dependent on its ability

to obtain additional financing as may be required and ultimately to attain profitability.

If the Company raises additional funds through

the issuance of equity, the percentage ownership of current stockholders could be reduced, and such securities might have rights, preferences,

or privileges senior to the rights, preferences, and privileges of the NaturalShrimp 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 its future

plans for developing its business and achieving commercial revenues.

will require additional funds to implement our growth strategy for our business.

3 unchanged sentences

However, not including funds needed for capital

expenditures or to pay down existing debt and trade payables, we anticipate that we will need to raise an additional $2,500,000

to cover all of our capital and operational expenses over the next 12 months, not including any capital expenditures needed as part of

any commercial scale-up of our equipment.

These funds may be raised through equity financing, debt financing, or other sources, which

may result in further dilution in the equity ownership of our shares.

expenditures or to pay down existing debt and trade payables, we anticipate that we will need to raise an additional $2.5 million to

cover all of our capital and operational expenses over the next 12 months, not including any capital expenditures needed as part of any

commercial scale-up of our equipment.

These funds may be raised through equity financing, debt financing, or other sources, which may

result in further dilution in the equity ownership of our shares.

There can be no assurance that additional financing will be available

10 unchanged sentences

significant accounting policies are more fully described in the notes to our financial statements included in this Quarterly Report on

Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020.

We believe that the accounting policies below

are critical for one to fully understand and evaluate our financial condition and results of operations.

Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023 and 2022.

We believe that the accounting policies

below are critical for one to fully understand and evaluate our financial condition and results of operations.

Value Measurement

15 unchanged sentences

by little or no market activity).

Derivative and warrant liabilities are Level 3 fair value measurements.

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

and Diluted Earnings/Loss per Common Share

6 unchanged sentences

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

For the three months ended December 31, 2022, the Company had 5,000,000 shares of Series A Convertible Preferred Stock which would be

converted at the holder’s option into approximately 751,385,000 underlying common shares, 170 shares of Series E Redeemable Convertible

Preferred shares whose approximately 2,775,000 underlying shares are convertible at the investors’ option at conversion price of

90% of the average of the two lowest market prices over the last 10 days, 750,000 shares of Series F Preferred Stock which would be converted

at the holders’ option into approximately 180,333,000 underlying common shares, whose shares were included in the calculation of

For the three months ended December 31, 2022, the Company had 1,500 shares of Series E Redeemable Convertible Preferred

For 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.

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

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

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

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

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

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

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

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

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

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

For the nine months

ended December 31, 2022, the Company had 5,000,000 shares of Series A Convertible Preferred Stock which would be converted at the holder’s

option into approximately 768,561,000 underlying common shares, 1,500 shares of Series E Redeemable Convertible Preferred shares whose

approximately 5,143,000 underlying shares are convertible at the investors’ option at a fixed conversion price of $0.35, and 170

shares of Series E Redeemable Convertible Preferred shares whose approximately 2,775,000 underlying shares are convertible at the investors’

option at conversion price of 90% of the average of the two lowest market prices over the last 10 days, 750,000 shares of Series F Preferred

Stock which would be converted at the holders’ option into approximately 184,387,000 underlying common shares, and 18,573,116 warrants

outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

For the three and nine

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

shares, $18,768,000 in a convertible debenture whose approximately 67,816,000 underlying shares are convertible at the holders’

option at conversion price of 90 % of the average of the two lowest market prices over the last 10 days and 18,506,429 warrants outstanding

which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

of Long-lived Assets and Long-lived Assets

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

such a review and at least annually.

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

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

In that event, a loss is recognized based on

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

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

a review and at least annually.

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

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

In that event, a loss is recognized based on the

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

Fair value is determined primarily using the anticipated

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

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

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

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

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

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

The Company will sell primarily to food service distributors, as

well as to wholesalers, retail establishments and seafood distributors.

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

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

Company recognizes revenue in accordance with 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.

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

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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.

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.

Adopted Accounting Pronouncements

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

ended December 31, 2022.

ended June 30, 2023.

Issued Accounting Standards

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Accounting for Convertible Instruments and Contracts in an Entity’s

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

liabilities and equity.

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing

the existing guidance in ASC 470-20, Debt:

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

conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock;

the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both

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

classification;

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

per share (EPS) for convertible instruments by using the if-converted method.

In addition, entities must presume share settlement for

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

For SEC filers, excluding smaller reporting

companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

For all other entities, ASU 2020-06

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

Entities should

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

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

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

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

This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing

guidance in ASC 470-20, Debt:

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

and cash conversion features in equity, separately from the host convertible debt or preferred stock;

(2) revises the scope exception

from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s

own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification;

and (3) revises

the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments

by using the if-converted method.

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

instrument may be settled in cash or shares.

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

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

Early adoption is permitted, but no earlier

than fiscal years beginning after December 15, 2020.

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

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

Entities should adopt the guidance as of the beginning of the

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

The Company is currently evaluating the impact

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

the period ending June 30, 2023, there were several new accounting pronouncements issued by the Financial Accounting Standards Board.

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

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis