What changed in this filing

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Item 1. Financial Statements

2024-02-14 compared with 2023-11-20 · 367 added, 211 removed, 813 unchanged (42% of the section changed)

3 unchanged sentences

Consolidated Balance Sheets

September 30,

December 31, 2023

March 31, 2023

Current assets

13 unchanged sentences

Accrued interest - related parties

Accrued interest

Other accrued expenses

5 unchanged sentences

Notes payable - related parties

Notes payable

Dividends payable

7 unchanged sentences

Commitments and contingencies (Note 11)

Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 10,000 shares authorized, 1,656 and 1,670 shares issued and outstanding at September 30, 2023 and March 31, 2023, respectively

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

Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 10,000 shares authorized, 1,656 and 1,670 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively

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

Series G Redeemable Convertible Preferred stock, $ 0.0001 par value, 10,000 shares authorized, 145 and 0 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively

equity, value

Stockholders’ deficit

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

Common stock, $ 0.0001 par value, 1,400,000,000 shares authorized, 900,071,985 and 803,123,748 shares issued and outstanding at September 30, 2023 and March 31, 2023, respectively

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

Common stock, $ 0.0001 par value, 1,400,000,000 shares authorized, 994,965,427 and 803,123,748 shares issued and outstanding at December 31, 2023 and March 31, 2023, respectively

Additional paid in capital

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Consolidated STATEMENTS OF OPERATIONS

December 31, 2023

December 31, 2022

December 31, 2023

December 31, 2022

For the Three Months Ended

For the Six Months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

For the Nine Months Ended

December 31, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Cost of sales

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( 5,019,883 )

( 4,176,389 )

Change in fair value of derivative liability

( 18,241,000 )

( 16,927,000 )

Change in fair value of warrant liability

Change in fair value of restructured notes

( 3,180,000 )

( 1,594,515 )

( 2,512,366 )

( 1,594,515 )

Loss due to fire

Gain on extinguishment of debt

Extension fee

Gain on termination of lease

Gain on sale of machinery and equipment

Total other income, net

Total other income (expense), net

( 3,128,720 )

( 2,412,034 )

Loss before income taxes

( 2,943,455 )

Income (loss) before income taxes

( 5,402,064 )

2 unchanged sentences

Provision for income taxes

( 2,646,539 )

Net income (loss)

( 5,402,064 )

3 unchanged sentences

Accretion on Preferred shares

Net loss available for common stockholders

Net income(loss) available for common stockholders

$ ( 5,470,980 )

1 unchanged sentence

$ ( 13,001,961 )

Income(Loss) per share (Basic )

Income(Loss) per share (Diluted)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic)

WEIGHTED AVERAGE SHARES OUTSTANDING (Diluted)

1,629,304,739

Loss per share (Basic and Diluted)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and Diluted)

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

2 unchanged sentences

Series A Preferred stock

Additional paid in

Total stockholders’

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( 48,520,305 )

Issuance of common shares under financing agreement

Shares issued upon exchange of Partitioned Note

Common stock issued to employee

Common stock issued to consultants

Dividends payable on Series E Preferred Shares

Accretion on Series E Preferred shares

Accretion on Series G Preferred shares

( 5,402,064 )

Balance December 31, 2023

$ 125,327,383

$ ( 178,425,983 )

( 52,664,766 )

Balance March 31, 2022

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( 34,892,793 )

$ 117,032,233

$ ( 152,758,426 )

( 34,892,793 )

Common stock issued for legal settlement to NSH shareholders

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( 59,183,191 )

Issuance of common shares under financing agreement

Amortization of beneficial conversion feature related to Series E Preferred Shares

Accretion of Series E Preferred Shares

Dividends payable on Preferred Shares

Common stock vested to consultants

Net income (loss)

Balance December 31, 2022

$ 119,464,471

$ ( 163,037,985 )

( 42,889,603 )

$ 119,464,471

$ ( 163,037,985 )

( 42,889,603 )

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

1 unchanged sentence

Consolidated STATEMENTS OF CASH FLOWS

For the Six Months Ended

September 30,

December 31, 2023

December 31, 2022

For the Nine Months Ended

December 31, 2023

December 31, 2022

CASH FLOWS FROM OPERATING ACTIVITIES

8 unchanged sentences

( 3,031,000 )

Change in fair value of promissory notes

Change in fair value of restructured notes payable

Extension fee

Financing costs

Gain on extinguishment of debt

( 1,883,089 )

Gain on sale of machinery and equipment

1 unchanged sentence

Amortization of operating lease right-of-use assets

Gain on termination of lease

Loss due to fire

Changes in operating assets and liabilities:

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Cash paid for fixed assets

( 2,430,186 )

Cash received for sale of machinery and equipment

Cash provided by (used in) investing activities

Cash used in investing activities

( 1,730,186 )

CASH FLOWS FROM FINANCING ACTIVITIES

4 unchanged sentences

Proceeds from promissory note, related parties

Proceeds from convertible debentures

Proceeds from convertible debentures, receipt from escrow

( 3,900,000 )

Escrow account in relation to the proceeds from promissory notes

Proceeds from sale of Series E Preferred Shares

Proceeds from sale of Series G Preferred Shares

Cash provided by financing activities

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TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THE SIX MONTHS ENDED SEPTEMBER 30, 2023

THE NINE MONTHS ENDED DECEMBER 31, 2023

1 – NATURE OF THE ORGANIZATION AND BUSINESS

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

For the six months ended September 30, 2023, the Company

had a net loss available for common stockholders of approximately $ 5,419,000 .

As of September 30, 2023, the Company had an accumulated

deficit of approximately $ 172,952,000 and a working capital deficit of approximately $ 10,257,000 .

These factors raise substantial doubt

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

The Company’s

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

short and long-term operating requirements.

During the six months ended September 30, 2023, the Company received net cash proceeds of

approximately $ 1,865,000 from the sale of common shares (See Note 8), $ 150,000 from the sale of Series E Preferred stock and the Company

received $ 140,000 proceeds from the issuance of promissory notes, related parties.

Subsequent to period end, the Company received approximately

$ 166,000 for the sale of common shares (See Note 12).

For the nine months ended December

31, 2023, the Company had a net loss available for common stockholders of approximately $ 10,821,000 .

As of December 31, 2023, the Company

had an accumulated deficit of approximately $ 178,426,000 and a working capital deficit of approximately $ 10,406,000 .

These factors raise

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

The Company’s ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt

financing to meet short and long-term operating requirements.

During the nine months ended December 31, 2023, the Company received net

cash proceeds of approximately $ 2,323,000 from the sale of common shares (See Note 8), $ 150,000 from the sale of Series E Preferred stock,

$ 97,000 from the sale of Series G Preferred stock and the Company received $ 140,000 proceeds from the issuance of promissory notes, related

Subsequent to period end, the Company received approximately $ 248,000 for the sale of common shares and $ 97,000 from the sale

of Series G Preferred stock (See Note 12).

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

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of Presentation

accompanying unaudited financial information as of and for the three and six months ended September 30, 2023 and 2022 has been prepared

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

Regulation S-X.

accompanying unaudited condensed financial information as of and for the three and nine months ended December 31, 2023 and 2022 has been

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

10 of Regulation S-X.

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

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

for such periods.

Operating results for the three and six months ended September 30, 2023 are not necessarily indicative of the results

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

adjustments) considered necessary for a fair presentation of our condensed consolidated financial position at such date and the condensed

consolidated operating results and cash flows for such periods.

Operating results for the three and nine months ended December 31, 2023

are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.

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

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Securities and Exchange Commission (“SEC”).

These unaudited financial statements and related notes

should be read in conjunction with our audited financial statements for the year ended March 31, 2023 included in the Company’s

Annual Report on Form 10-K filed with the SEC on June 27, 2023.

condensed consolidated balance sheet at March 31, 2023 has been derived from the audited financial statements at that date but does not

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

These condensed consolidated unaudited financial statements

and related notes should be read in conjunction with our audited financial statements for the year ended March 31, 2023 included in the

Company’s Annual Report on Form 10-K filed with the SEC on June 27, 2023.

condensed consolidated balance sheet at March 31, 2023 has been derived from the audited consolidated financial statements at that date

but does not include all of the information and footnotes required by GAAP for complete financial statements.

Consolidation

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

As of the three months

ended September 30, 2023, the Company had 5,000,000 Series A Convertible Preferred Stock which would be converted at the holder’s

As of the nine months

ended December 31, 2023, the Company had 5,000,000 Series A Convertible Preferred Stock which would be converted at the holder’s

option into approximately 994,965,000 underlying common shares, 1,656 of Series E Redeemable Convertible Preferred shares whose approximately

5,678,000 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 216,017,000 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.

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

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

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

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

the investors’ option at conversion price of 90 % of the average of the two lowest market prices over the last 10 days, 750,000

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

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

holders’ option at conversion price of 90 % of the average of the two lowest market prices over the last 10 days and 18,573,429

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

F Preferred Stock which would be converted at the holders’ option into approximately 238,792,000 underlying common shares, 145

of Series G Redeemable Convertible Preferred shares whose approximately 12,429,000 underlying shares are convertible at the investors’

option at a conversion price based on the discounted market price of $ 0.014 and 18,573,116 warrants outstanding which were not included

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

As of the 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.

Value Measurements

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

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

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

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

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

following is a summary of activity of Level 3 during the nine months ended December 31, 2023 and the year ended March 31, 2023:

OF ACTIVITY OF DERIVATIVES AT FAIR VALUE

September 30,

Warrant liability balance at beginning of period

2 unchanged sentences

Balance at end of period

September 30, 2023, the fair value of the warrant liability was estimated using a Black Sholes option pricing model with the following

December 31, 2023, the fair value of the warrant liability was estimated using a Black Sholes option pricing model with the following

the price of the Company’s common stock of $ 0.012 ;

7 unchanged sentences

August and Senior Notes Payable

September 30,

Restructured notes payable fair value at beginning of period

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of their outstanding debentures (Note 6 and Note 7), which were accounted for as debt extinguishment, the Company elected to recognize

the new debt under the fair value option within ASC Topic 825, “ Financial Instruments .” .

The fair value for both

periods is based on the maturity dates, the interest of 12 % , the 15 % exit fee, the 2% appreciation fee for an estimated period, and a

40% present value factor .

In accordance with ASC 825, the Company chose to present the component for the accrued interest in the same

line item on the accompanying condensed consolidated balance sheet with the fair value option, and as of April 1, 2023, reclassed the

accrued interest to not be presented as a separate line item.

the new debt under the fair value option within ASC Topic 825, “ Financial Instruments .” The fair value for both periods

is based on the maturity dates, the interest of 12 %, the 15 % exit fee, the 2% appreciation fee for an estimated period, and a 45% and

40% present value factor , respectively as of December 31, 2023 and March 31, 2023.

In accordance with ASC 825, the Company chose to present

the component for the accrued interest in the same line item on the accompanying condensed consolidated balance sheet with the fair value

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

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

5 unchanged sentences

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

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

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

Concentration

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Corporation (“FDIC”) up to $ 250,000 .

As of September 30, 2023 and

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

The Company has not experienced any losses in such accounts

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

As of December 31, 2023 and March 31, 2023, the Company’s cash balance exceeded

FDIC coverage.

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

institutions and has determined the credit exposure to be negligible.

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

1 unchanged sentence

OF ESTIMATED USEFUL LIVES

Machinery and Equipment

Furniture and Fixtures

and Equipment

and repairs are charged to expense as incurred.

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

For the three months ended September 30, 2023 and September

For the three months ended December 31, 2023 and December

31, 2022, the amortization of the patents was $ 97,500 and $ 97,500 and in the amortization of the license rights was $ 270,000 and $ 270,000 ,

respectively.

For the six months ended September 30, 2023 and September 30, 2022, the amortization of the patents was $ 195,000 and $ 195,000

For the nine months ended December 31, 2023 and December 31, 2022, the amortization of the patents was $ 292,500 and $ 292,500

and the amortization of the license rights was $ 810,000 and $ 810,000 , respectively.

1 unchanged sentence

warrant a revision to the remaining period of amortization.

As of September 30, 2023, the Company believes the carrying value of the

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

As of December 31, 2023, the Company believes the carrying value of the intangible

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

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

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OF REVENUE RECOGNITION

Six months ended

September 30,

Three months ended

Technology and equipment services

Total revenues

May 21, 2023, the Company entered into a six-month agreement with a company for the use of the NSI Technologies Per the agreement, the

Nine months ended

Technology and equipment services

Total revenues

May 21, 2023, the Company entered into a six-month agreement with a company for the use of the NSI Technologies.

Per the agreement, the

customer is to pay a total of $ 300,000 comprised of an initial payment equal to $ 150,000 at execution of the contract and then $ 25,000

per month for the combined total of the Service Fee.

As of September 30, 2023, the Company has received $ 175,000 , comprised of the initial

As of December 31, 2023, the Company has received $ 250,000 , comprised of the initial

payment and $ 100,000 related to the monthly service fees which began September 1, 2023.

Issued Accounting Standards

November 2023, the FASB issued Accounting Standards Update (“ASU”) No.

2023-07 , “ Segment Reporting (Topic

280 ) Improvements to Reportable Segment Disclosures” which expands annual and interim disclosure requirements for reportable

The amendments require enhanced disclosure for certain segment items and required disclosure on how management uses reported

measures to assess segment performance.

The amendments do not change how segments are determined, aggregated, or how thresholds are applied

to determine reportable segments.

The updated standard is effective for annual periods beginning in fiscal 2025 and interim periods beginning

in the first quarter of fiscal 2026.

Early adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

December 2023, the FASB issued ASU No.

2023-09 “ Income Taxes (Topic 740):

Improvements to Income Tax Disclosures”

which requires two primary enhancements of 1) disaggregated information on a reporting entity’s effective tax rate reconciliation,

and 2) information on cash income taxes paid.

Additionally, specific disclosures related to unrecognized tax benefits and indefinite

reinvestment assertions were removed.

For public business entities, the new requirements will be effective for annual periods beginning

after December 15, 2024.

The guidance will be applied on a prospective basis with the option to apply the standard retrospectively.

adoption is permitted.

The Company is currently evaluating the effect of adopting this ASU.

August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt - Debt with Conversion and Other Options

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

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

of December 31, 2023, there were several new accounting pronouncements issued by the FASB.

Each of these pronouncements, as applicable,

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Evaluation of Subsequent Events

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

condensed consolidated financial statements were issued.

Based upon the review, other than described in Note 12 – Subsequent Events,

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

the unaudited condensed consolidated financial statements.

Company evaluates events that have occurred after the accompanying condensed consolidated balance sheet date of December 31, 2023, through

the date which the unaudited condensed consolidated financial statements were issued.

Based upon the review, other than described in

Note 12 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required

adjustment or disclosure in the unaudited condensed consolidated financial statements.

3 – FIXED ASSETS

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

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

OF FIXED ASSETS

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unaudited condensed consolidated statements of operations reflect depreciation expense of approximately $ 433,000 and $ 416,000 and $ 1,305,000

and $ 933,000 for the three and six months ended September 30, 2023 and 2022, respectively.

and $ 1,350,000 for the three and nine months ended December 31, 2023 and 2022, respectively.

4 – SHORT-TERM NOTE AND LINES OF CREDIT

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The line of credit bears an interest rate of prime plus

25.9 basis points , which totaled 34.4 % as of September 30, 2023.

25.9 basis points , which totaled 34.4 % as of December 31, 2023.

The line of credit is unsecured.

The balance of the line of credit was

$ 9,580 at both September 30, 2023 and March 31, 2023.

$ 9,580 at both December 31, 2023 and March 31, 2023.

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

The line of credit bears an interest rate of prime plus

10 basis points , which totaled 18 .

5% as of September 30, 2023.

10 basis points , which totaled 18.5 % as of December 31, 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 September 30, 2023 and March 31, 2023.

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

5 – NOTES PAYABLE

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for the business combination.

On November 20, 2023, the maturity date was extended to June 30, 2024.

On November 17, 2023, the Company received an extension of the maturity date to June 30, 2024, for a $ 5,000

extension fee.

November 8, 2023, the Company and the Investor entered into an Exchange Agreement on the January 2023 Note.

In the Exchange Agreement

the original note was partitioned into a $ 132,000 new promissory note, leaving the original January 2023 Note with an adjusted balance

of $ 499,968 .

The partitioned note was exchanged for 10,000,000 shares of the Company’s common stock.

The shares of common stock

issued had a fair value of $ 160,000 based on the market price of the shares of $ 0.016 on the execution date, resulting in an excess of

$ 28,000 to be recognized as a financing expense.

2023 Promissory Note

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

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

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

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

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

liabilities, on the condensed consolidated balance sheets.

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date of the Note.

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

of which are included in the principal balance of the Note.

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

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

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

all of the assets of the Company.

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

at maturity, shall be subject to an exit fee of 15 % of the portion of the outstanding balance being paid (the “Exit Fee”).

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

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

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

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

of the assets of the Company.

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

maturity, shall be subject to an exit fee of 15 % of the portion of the outstanding balance being paid (the “Exit Fee”).

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

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

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

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(“Trigger Events”).

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

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

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

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

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

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

the terms of the original instrument.

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

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

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

accounted for at fair value until they are settled.

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

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

for embedded derivatives.

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

derivatives and were required to be bifurcated.

The August Note was revalued as of September 30, 2023 at approximately $ 2,250,000 , with

a change in fair value of approximately $ ( 150,000 ) recognized in the accompanying condensed consolidated Statement of Operations.

of the note .

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

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

flows under the terms of the original instrument.

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

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

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

will be accounted for at fair value until they are settled.

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

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

evaluated for embedded derivatives.

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

of embedded derivatives and were required to be bifurcated.

The August Note was revalued as of December 31, 2023 at approximately $ 2,410,000 ,

with a change in fair value of approximately $ 10,000 recognized in the accompanying condensed consolidated Statement of Operations.

August Note was revalued as of March 31, 2023 at approximately $ 2,400,000 , with a change in fair value of approximately $ 467,000 .

of September 30, 2023, the accrued interest from the restructuring date, which is included in the fair value is approximately $ 271,000 .

of December 31, 2023, the accrued interest from the restructuring date, which is included in the fair value is approximately $ 342,000 .

7 – RESTRUCTURED SENIOR NOTE PAYABLE

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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 Senior Note;

after which the remaining balance of the Senior Note is to

be repaid in equal monthly installments over a 12-month period beginning on a date after the Merger Agreement closing date (“Closing

Date”) or the termination of such agreement.

All payments made shall be subject to an Exit Fee of 15 %

of the portion of the outstanding balance being paid.

Additionally, if the Closing Date is after December 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, a termination, or substantially similar terms as approved by the Board of Directors

of the Company.

key modifications include i) uplist terms in which the Company was to cause the common stock to be listed for trading on either of (a)

NYSE, or (b) NASDAQ, were removed, ii) Maturity date was modified from December 15, 2023 to 12 months from the Closing or termination

of the Merger Agreement, provided not to be later than September 30, 2024, and iii) the outstanding balance of the Senior Note may be

increased by 5% to 15% upon the occurrence of an event of default or failure to obtain the Lender’s consent or notify the Lender

for certain major equity related transactions (“Trigger Events”) .

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

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

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

All payments made shall

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

Additionally, if the Closing Date is after December

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, a termination, or substantially similar terms as

approved by the Board of Directors of the Company.

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

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

15, 2023 to 12 months from the Closing or termination of the Merger Agreement, provided not to be later than September 30, 2024, and

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

obtain the Lender’s consent or notify the Lender for certain major equity related transactions (“Trigger Events”).

As of June 30, 2023, the Merger has not yet closed, and therefore the 2% of the outstanding balance was increased as of June 30, 2023,

in the amount of approximately $ 2,675,000 .

On July 20, 2023, the Company sent Yotta notice of the Company’s termination of the Merger Agreement (See Note 11).

termination in July of 2023, the equal monthly payments were to begin on September 20, 2023 .

On November 20, 2023, the Investor

issued a waiver to the Company on the equal monthly payments, which are not currently required to be paid .

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

Merger Agreement (See Note 11).

Based on the termination in July of 2023, the equal monthly payments were to begin on September 20, 2023.

On November 20, 2023, the Investor issued a waiver to the Company on the equal monthly payments, which are not currently required to

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

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

As of September 30, 2023, the Company is in full compliance with the covenants

and Events of Default.

As of December 31, 2023, the Company is in full compliance with the covenants and

Events of Default.

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

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The Restructured Senior Note was

revalued as of September 30, 2023 at approximately $ 21,680,000 , with a change in fair value of approximately $ 390,000 recognized in the

Company’s accompanying condensed consolidated Statement of Operations.

The Senior Note was revalued as of March 31, 2023, at approximately

$ 21,290,000 , with a change in fair value of approximately $ 2,376,000 recognized in the accompanying condensed consolidated Statement

of Operations.

As of September 30, 2023, the accrued interest from the restructuring date, which is included in the fair value is approximately

$ 4,201,000 .

revalued as of December 31, 2023 at approximately $ 24,700,000 , with a change in fair value of approximately $ 3,410,000 recognized in

the Company’s accompanying condensed consolidated Statement of Operations.

The Senior Note was revalued as of March 31, 2023, at

approximately $ 21,290,000 , with a change in fair value of approximately $ 2,376,000 recognized in the accompanying condensed consolidated

Statement of Operations.

As of December 31, 2023, the accrued interest from the restructuring date, which is included in the fair value

is approximately $ 4,937,000 .

8 – STOCKHOLDERS’ EQUITY

September 28, 2023, the Company increased their authorized common shares to 1,400,000,000 .

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

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

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

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

Series E preferred stock are authorized and 1,656 and 1,670 outstanding, respectively, and 750,000 shares of Series F preferred stock

are authorized with 750,000 outstanding, respectively.

Series E preferred stock are authorized and 1,656 and 1,670 outstanding, respectively, 750,000 shares of Series F preferred stock are

authorized with 750,000 outstanding, and 10,000 shares of Series G preferred stock are authorized with 145 outstanding, respectively.

G Preferred Stock

December 1, 2023, the Board authorized the issuance of 10,000 preferred shares to be designated as Series G Preferred Stock (“Series

G Preferred Stock”).

The Series G Preferred Stock has a par value of $ 0.0001 , a stated value of $ 1,200 and bear dividends at the

rate of 8 % per annum, payable quarterly, to be paid in cash or in-kind, at the discretion of the Company.

The Series G Preferred Stock

will vote together with the common stock on an as-converted basis subject to the beneficial ownership limitations.

The Series G Preferred

Stock is required to be redeemed by the Company no later than one calendar year from the date of its issuance.

The Series G Preferred

Stock is also redeemable at the option of the Company at any time after the original issued date, upon 3 business days’ notice,

at a premium rate which is (a) 1.15 if all of the Series G Preferred Stock is redeemed within 90 calendar days from the issuance date

(b) 1.2 if all of the Series G Preferred Stock is redeemed after 90 calendar days and within 120 calendar days from the issuance

date thereof;

(c) 1.25 if all of the Series G PS is redeemed after 120 calendar days and within 180 calendar days from the issuance date

The Company shall be permitted to redeem the Series G Preferred Stock at any time in cash upon 3 business days prior notice

to the Holder or the Holder may convert the Series G Preferred Stock within 3 business days period prior to redemption.

The Holder shall

have the right to either redeem for cash or convert the Series G Preferred Stock into common stock within 3 business days following the

consummation of a qualified offering.

The conversion price is based on the discounted market price which is the lower of:

price equaling the closing bid price for the common stock on the trading day preceding the execution of the SPA ;

or (ii) 100% of

the lowest volume weighted average price (“VWAP)” for the common stock during 10 trading days preceding the conversion request,

subject to adjustment.

the redemption feature is mandatorily redeemable within one year of the issuance date, with a substantive conversion option, the Series

G Preferred Stock would not fall under liability classification but is to be classified as mezzanine equity.

G Preferred Equity Offering

December 14, 2023, the Company entered into a Securities Purchase Agreement for the sale of 110 shares of Series G Preferred Stock at

a price of $ 1,000 per share of preferred stock, for a total of $ 110,000 .

The Purchaser also received an “Equity Incentive”,

which was an additional 35 Series G Preferred Stock issued to the Purchaser at the initial closing and deemed to be earned at the time

of its issuance.

Following the initial closing, the Company and Purchaser shall mutually agree from time to time for the Company to sell

and the Purchaser to purchase up to 400 shares of Series G Preferred Stock at a price of $ 1,000 per share in separate closings .

The Series G Preferred Stock will earn a dividend of 8 % per annum, for as long as the relevant Preferred Stock has not been redeemed

or converted.

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

purchase price.

On December 19, 2023, the Company received an initial tranche of $ 110,000 under the SPA, less $ 13,000 for legal and commission

The $ 77,000 discount will be accreted up to the redemption price over the one-year period until redemption.

As of December 31,

2023, the accretion for the Series G Preferred Stock was $ 3,000 .

E Preferred Stock

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the Company’s discretion, in cash or Preferred Stock calculated at the purchase price.

As of December 31, 2023 the accretion for

the Series E Preferred Stock was $ 9,300 .

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

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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 2022 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.

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 2022 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

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at share price of $ 0.02 related to the Equity Financing Agreement.

the three months ended December 31, 2023, the Company sold 44,843,442 shares of common stock at a net amount of approximately $ 459,000 ,

at share prices ranging from $ 0.01 to $ 0.02 , in relation to the Equity Financing Agreement.

Included in this amount, on October 31, 2023,

the Company issued GHS 7,868,985 shares of common stock, for no purchase price, as consideration resulting from GHS receiving a phishing

email informing them to wire a purchase price to an incorrect bank, resulting in the Company not receiving the wire and for which GHS

resent a second wire to the Company’s correct bank.

2023 Purchase Agreement

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share prices ranging from $ 0.03 to $ 0.04 related to the GHS 2023 Purchase Agreement.

Shares Issued to Employees

October 10, 2023, a new employee was issued 50,000 shares of common stock as a signing bonus with a total fair value of $ 1,100 , based

on the market price of $ 0.02250 on the grant date.

Shares Issued to Consultant

December 4, 2023, 40,000,000 shares of common stock were issued to a consultant under an Independent Consulting Agreement.

are a non-refundable retainer on behalf of their consulting services for one year of services.

The shares had a fair value of $ 600,000 ,

based on the market price of $ 0.015 on the grant date, recognized as consulting services in the nine months ended December 31, 2023.

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

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terms of the existing convertible debt.

18,573,116 warrants outstanding as of September 30, 2023, were revalued as of period end for a fair value of $ 85,000 , with a decrease

18,573,116 warrants outstanding as of December 31, 2023, were revalued as of period end for a fair value of $ 17,950 , with a decrease

in the fair value of $ 337,050 recognized on the accompanying condensed consolidated Statement of Operations.

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and expected volatility of the Company’s common stock ranging from 109.9 % to 114.6 % and the remaining terms of each warrant issuance.

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

in the fair value of $ 1,876,000 recognized on the accompanying condensed consolidated Statement of Operations.

The fair value was estimated

using Black Scholes Model, with the following inputs:

18,573,116 warrants outstanding as of December 31, 2022 , were revalued as of period end for a fair value of $ 2,047,000 , with

a decrease in the fair value of $ 1,876,000 recognized on the accompanying condensed consolidated Statement of Operations.

The fair value

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

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

a risk-free interest rate

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

the estimated remaining

term, a dividend rate of 0 %,

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

the estimated

remaining term, a dividend rate of 0 %.

9 – RELATED PARTY TRANSACTIONS

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

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

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

July 10 through July 17, 2023, the Company received $ 140,000 in proceeds from the issuance of three promissory notes with related parties.

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

the three and six months ended September 30, 2023, the interest expense for the related party promissory notes was $ 9,301 and $ 15,551

and $ 3,522 and $ 3,522 , respectively.

As of September 30, 2023 and March 31, 2023, the accrued interest related to the related party promissory

notes was approximately $ 36,000 and $ 22,000 , respectively.

the three and nine months ended December 31, 2023, the interest expense for the related party promissory notes was approximately $ 9,000

and $ 21,000 , respectively.

As of December 31, 2023 and March 31, 2023, the accrued interest related to the related party promissory notes

was approximately $ 41,000 and $ 22,000 , respectively.

NaturalShrimp

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

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

The outstanding balance is approximately $ 77,000 as of both December 31, 2023 and

March 31, 2023.

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

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

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

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

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

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

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

As of December 31, 2023 and March 31, 2023, accrued interest payable was approximately $ 146,000 .

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

and bearing interest at 8 %.

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

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

liability on the unaudited condensed consolidated balance sheets.

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

December 31, 2023, the Company moved to a new office space in Texas, and the sublease in effect was terminated.

At the termination of

the original lease, the existing ROU of approximately $ 153,000 and lease liability of approximately $ 175,000 was removed, with a gain

of approximately $ 22,000 recognized in the quarter ended December 31, 2023, in the accompanying condensed consolidated Statement of Operations.

December 20, 2023, the Company entered into a sublease for a new office space in Texas, with a commencement date of January 1, 2024,

which will terminate on March 31, 2027.

The monthly rates are $2,063 for April 1, 2024 through March 31, 2025, $2,192 for the second

year of April 1, 2025 through March 31, 2026 and $2,320 for the final year.

On December 19, 2023, the Company paid a $ 2,063 security

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

The Company assessed its new

office lease as an operating lease.

inception, as of January 1, 2024, the ROU and lease liability was calculated as approximately $ 61,000 , based on the net present value

of the future lease payments over the term of the lease.

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

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

however, the rate implicit in the lease is not readily

determinable for their corporate office lease.

In this case, the Company estimated its incremental borrowing rate of 14.5 % as the interest

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

over a term similar to the lease term.

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

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

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

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

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

OF MATURITIES OF LEASE LIABILITIES

Total future minimum lease payments

imputed interest

11 – COMMITMENTS AND CONTINGENCIES

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the July 20 th notice.

the current nine months ending December 31, 2023, as a result of the termination of the Merger Agreement the related Deferred offering

costs in current assets of $ 1,394,366 was expensed in professional fees.

12 – SUBSEQUENT EVENTS

Shares Issued to Employees

October 10, 2023, a new employee was issued 50,000 shares of common stock as a signing bonus with a total fair value of $ 1,100 , based

on the market price of $ 0.02250 on the grant date.

to the period end, in October 2023, the Company sold 10,443,858 shares of common stock at a net amount of approximately $ 166,000 , at

share prices of $ 0.02 , in relation to the Equity Financing Agreement.

In addition, on October 31, 2023, the Company issued GHS 7,868,985

shares of common stock, for no purchase price, as consideration resulting from GHS receiving a phishing email informing them to wire

a purchase price to an incorrect bank, resulting in the Company not receiving the wire and for which GHS resent a second wire to the

Company’s correct bank.

to the period end, in January 2024, the Company sold 39,455,759

shares of common stock at a net amount of approximately

at share prices of $ 0.008

through $ 0.009 , in relation to the Equity Financing

January 24, 2024, the Company received a tranche of $ 100,000 under the SPA for 100 Series G Preferred Stock with a stated value of $ 120,000 ,

less $ 3,000 for legal and commission fees.

The $ 23,000 discount will be accreted up to the redemption price over the one-year period

until redemption.

On January 17, 2024, the Company

and the Investor entered into an Exchange Agreement on the January 2023 Note.

In the Exchange Agreement the remaining January 2023 Note

was partitioned into a $ 99,450 new promissory note, leaving the original January 2023 Note with an adjusted balance of $ 400,518 .

partitioned note was exchanged for 10,000,000 shares of the Company’s common stock.

The shares of common stock issued had a fair

value of $ 110,000 based on the market price of the shares of $ 0.011 on the execution date, resulting in an excess of $ 10,550 to be recognized

as a financing expense.

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

What changed 10-Q

Item 1. Financial Statements