What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-02-14 compared with 2023-11-20 · 292 added, 195 removed, 599 unchanged (45% of the section changed)

116 unchanged sentences

of Operations

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

had gross sales revenue of $58,010 and $51,725, respectively, during the three months ended September 30, 2023 and 2022, an increase

of the Three Months Ended December 31, 2023 to the Three Months Ended December 31, 2022

had gross sales revenue of $101,302 and $97,943, respectively, during the three months ended December 31, 2023 and 2022, an increase

of approximately $3,000, or 3%.

increase in gross sales revenue during the three months ended September 30, 2023 over the same period in the prior year was a result

of the revenue recognized in the current quarter of the first monthly $25,000 service fee connected to the contract for the use of the

NSI Technologies, with a decrease in the sale of shrimp over the same period last year.

In the same period in the prior year 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.

had net revenues of $7,010 and $51,725, respectively, during the three months ended September 30, 2023 and 2022.

The decrease in net

revenues for the second quarter of fiscal 2024 is the result of the decrease in gross sale of shrimp revenue, with the inclusion of the

NSI Technologies $25,000 monthly payment, offset by the cost of sales in the second quarter of fiscal 2024, which was not recognized

increase in gross sales revenue during the three months ended December 31, 2023 over the same period in the prior year was a result of

the revenue recognized in the current quarter of $75,000 related to the monthly $25,000 service fee connected to the contract for the

use of the NSI Technologies, with a decrease in the sale of shrimp over the same period last year.

In the same period in the prior year

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.

had net revenues of $77,949 and $97,943, respectively, during the three months ended December 31, 2023 and 2022 .

in net revenues for the second quarter of fiscal 2024 is the result of the decrease in gross sale of shrimp revenue, increased by the

inclusion of the NSI Technologies $75,000 payment, offset by the cost of sales in the second quarter of fiscal 2024, which was not recognized

during the prior period.

2 unchanged sentences

Additionally, in the

current period, there is the cost of sales related to the contract for the use of the NSI Technology, which is approximately $25,000.

Cost of sales were $51,000 and $0, respectively, during the three months ended September 30, 2023 and 2022.

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

current period, there is the cost of sales related to the contract for the use of the NSI Technology, which in this quarter is approximately

Cost of sales were $23,353 and $0, respectively, during the three months ended December 31, 2023 and 2022.

following table summarizes the various components of our operating expenses for each of the three months ended December 31, 2023 and

Three Months Ended

September 30,

Salaries and related expenses

3 unchanged sentences

Research and development

expenses for the three months ended September 30, 2023 were $3,365,779, which is a 23.8% increase over operating expenses of $2,717,751

expenses for the three months ended December 31, 2023 were $2,351,293, which is a 25.5% decrease over operating expenses of $3,154,478

for the same period in 2022.

The overall change in expenses is mainly the result of the termination of the Merger Agreement, and therefore

the expense of the previous Deferred offering costs of $1,394,366, which resulted in an increase in professional services expense.

increase was offset by decreases in the current period where there was an approximately $331,000 decrease 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, general and administrative expenses decreased by approximately $169,000 in the

current period, as well as the salaries being decreased by approximately $44,000.

Lastly, we did not pay our rent in the current period,

but instead used the prepaid deposit against the rent expense.

The overall change in expenses is mainly the decrease in the current period where there was an approximately

$798,000 decrease 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 are now being considered as cost of revenue.

Additionally, general

and administrative expenses decreased by approximately $254,000 in the current period, as well as the salaries being decreased by approximately

These decreases were offset by the increase in professional services of approximately $388,000, a 111% increase, a result of

the 10,000,000 shares issued as a non-refundable retainer on behalf of consulting services with a fair value of $600,000 ,

which lessened the decrease in professional services from the prior period based on high professional services related to the merger

which was terminated in July 2023.

Income (Expense)

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

September 30,

following table summarizes the various components of our other income (expense) for each of the three months ended December 31, 2023

Three Months Ended

Interest expense

2 unchanged sentences

Change in fair value of derivative liability

(18,241,000 )

Change in fair value of warrant liability

1 unchanged sentence

Change in fair value of restructured notes

Gain on sale of machinery and equipment

Gain on extinguishment of debt

Extension fee

Gain on termination of lease

$ (3,128,720 )

Income(expense) for the three months ended September 30, 2023, increased approximately $22,045,000 into Other income, from the same period

in the prior year, due almost entirely to the restructuring of the convertible and August note, which resulted in 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.

This resulted in the prior period of a decrease in a fair value of derivative liability of $18,241,000, and the full amortization of

the related debt discounts of $2,136,389.

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 condensed consolidated statement of operations but included in the change in fair value of the restructured notes.

Additionally,

in the prior period there was a loss due to a fire which occurred on July 3, 2022, in our building containing the water treatment and

purification system in La Coste, Texas.

income (expense) for the three months ended December 31, 2023, decreased approximately $21,361,000 from other income into other expense,

from the same period in the prior year, due almost entirely to the restructuring of the convertible and August note, which resulted in

the removal of the derivative related to the conversion feature and the debt discount as a result of the accounting treatment as an extinguishment

This resulted in the prior period of a decrease in a fair value of derivative liability of $17,738,000, and the full amortization

of the related debt discounts of $843,494, as well as a gain on extinguishment of debt of $2,383,088.

Further, due to the election to

account for the restructured notes under the fair value option, there is a change in fair value of the restructured notes, and the interest

expense is not recognized separately in the condensed consolidated statement of operations but included in the change in fair value of

the restructured notes, resulting in a reduction to the interest expense between periods.

In the current period, as of December 31, 2023,

as the Company moved their office and had their current lease terminated, there was a gain on the termination of lease of approximately

Additionally, in the prior period there was a loss due to a fire which occurred on July 3, 2022, in our building containing

the water treatment and purification system in La Coste, Texas.

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 September 30, 2023, as compared to the prior year end, resulted in a $220,000 recognition as income during

the three months ended September 30, 2023, compared to an increase in fair value as of September 30, 2022, which resulted in $39,000

in expense during the three months ended September 30, 2022.

of the Six Months Ended September 30, 2023 to the Six Months Ended September 30, 2022

had gross sales revenue of $263,882 and $88,061, respectively, during the six months ended September 30, 2023 and 2022, an increase of

approximately $176,000, or 200%.

increase in gross sales revenue during the six months ended September 30, 2023 over the prior period was a result mainly of the Company

for the three months ended December 31, 2023, as compared to the prior year end, resulted in a $67,050 recognition as income during the

three months ended December 31, 2023, compared to a decrease in fair value as of December 31, 2022, which resulted in a $1,155,000 recognition

as income during the three months ended December 31, 2022.

of the Nine Months Ended December 31, 2023 to the Nine Months Ended December 31, 2022

had gross sales revenue of $365,184 and $186,004, respectively, during the nine months ended December 31, 2023 and 2022, an increase

of approximately $179,000, or 96%.

increase in gross sales revenue during the nine months ended December 31, 2023 over the prior period was a result mainly of the Company

entering into a six-month agreement with a company for the use of the Hydrenesis Technology and Equipment on May 21, 2023, for an initial

payment of $150,000 and the receipt of the first monthly payment of $25,000.

had net revenues of $163,141 and $88,061, respectively, during the six months ended September 30, 2023 and 2022.

payment of $150,000 and the receipt of the monthly payments of $100,000.

had net revenues of $241,090 and $186,004, respectively, during the nine months ended December 31, 2023 and 2022.

The increase in net

revenues for the six months ended September 30, 2023 is the result of the increase in gross sales revenue, with the inclusion of the

NSI Technologies contract, offset by the cost of sales in the six months ended September 30, 2023, which was not recognized during the

revenues for the nine months ended December 31, 2023 is the result of the increase in gross sales revenue, with the inclusion of the

NSI Technologies contract, offset by the cost of sales in the nine months ended December 31, 2023, which was not recognized during the

prior period.

2 unchanged sentences

Additionally, in the

current six-month period, there is the cost of sales related to the contract for the use of the NSI Technologies, which is approximately

Cost of sales were $100,741 and $0, respectively, during the six months ended September 30, 2023 and 2022.

following table summarizes the various components of our operating expenses for each of the six months ended September 30, 2023 and September

Six Months Ended

September 30,

current nine-month period, there is the cost of sales related to the contract for the use of the NSI Technologies, which is approximately

Cost of sales were $124,094 and $0, respectively, during the nine months ended December 31, 2023 and 2022.

following table summarizes the various components of our operating expenses for each of the nine months ended December 31, 2023 and December

Nine Months Ended

Salaries and related expenses

3 unchanged sentences

Research and development

expenses for the six months ended September 30, 2023 increased $183,906, or 3.3%, compared to the same period in 2022, primarily

due to an increase in professional fees as a result of the termination of the Merger Agreement which caused the expense of the previous

Deferred offering costs of $1,394,366.

There was also a slight increase of approximately $26,000 for additional salaries for new employees.

These increases were offset by decreases in the current period where there was an approximately $504,000 decrease 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.

expenses for the nine months ended December 31, 2023 decreased $619,279, or 7.0%, compared to the same period in 2022, primarily

due to decreases in the current period where there was an approximately $1,302,000 decrease 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.

The general and administrative expenses decreased by approximately $392,000 in the current period.

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

rent expense decreased by approximately $60,000 as we did not pay our rent in the current period, but instead used the prepaid deposit

against the rent expense.

There was also

a slight decrease of approximately $84,000 for salaries to employees.

Additionally, as a result of the production of the shrimp there

was not any research and development in the current period.

Lastly, the rent expense decreased by approximately $91,000 as we did not

pay our rent in the current period, but instead used the prepaid deposit against the rent expense.

These decreases were offset by an

increase in professional fees as a result of the termination of the Merger Agreement which caused the expense of the previous Deferred

offering costs of $1,394,366, as well as a result of the 10,000,000 shares issued as a non-refundable retainer on behalf of consulting

services with a fair value of $600,000, offset by less fees to be paid to attorneys and consultants in the current period due to the

termination after the first quarter of 2023.

income (expense)

following table summarizes the various components of our Other income(expense) for each of the six months ended September 30, 2023 and

September 30, 2022:

Six Months Ended

September 30,

following table summarizes the various components of our Other income(expense) for each of the nine months ended December 31, 2023 and

December 31, 2022:

Nine Months Ended

Interest expense

3 unchanged sentences

Change in fair value of derivative liability

(16,927,000 )

Change in fair value of warrant liability

Change in fair value of restructured notes

Gain on extinguishment of debt

Loss due to fire

Extension fee

Gain on termination of lease

Gain on sale of machinery and equipment

$ (2,412,034 )

Income (expense) for the six months ended September 30, 2023, increased approximately $21,362,000 into Other income, from the same period

in the prior year, due almost entirely to the restructuring of the convertible and August note, which resulted in 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.

Therefore, while there is no change in fair value of a derivative liability or amortization of debt discount in the six months ended

September 30, 2023, in the six months ended September 30, 2022 there is a decrease in a fair value of derivative liability of $16,927,000,

and amortization of the debt discounts of $4,176,389.

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 condensed consolidated statement of operations but included in the change in fair value of the restructured notes.

$ (2,953,455 )

income (expense) for the nine months ended December 31, 2023, decreased approximately $531,000, from the same period in the prior year,

due almost entirely to the restructuring of the convertible and August note, which resulted in 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.

Therefore, while

there is no change in fair value of a derivative liability or amortization of debt discount in the nine months ended December 31, 2023,

in the nine months ended December 31, 2022 there is a decrease in a fair value of derivative liability of $811,000, and amortization

of the debt discounts of $5,019,883.

Further, due to the election to account for the restructured notes under the fair value option,

there is a change in fair value of the restructured notes, and the interest expense is not recognized separately in the condensed consolidated

statement of operations but included in the change in fair value of the restructured notes, which reduces the interest expense in the

current nine months ended December 31, 2023.

Included in the extension fee during the nine months ended December 31, 2023, is $180,000

which consists of three monthly extension fees of $60,000 paid related to the Yotta Merger agreement not closing by the first required

date, prior to its termination in July 2023.

In the current period as the Company moved their office and had their current lease terminated

as of December 31, 2023, there was a gain on the termination of lease of approximately $22,000.

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

The decrease in the fair value

for the six months ended September 30, 2023, as compared to the prior year end, resulted in a $270,000 recognition as income during the

six months ended September 30, 2023, compared to an increase in fair value as of September 30, 2022, which resulted in $1,876,000 in

expense during the six months ended September 30, 2022.

for the nine months ended December 31, 2023, as compared to the prior year end, resulted in a $337,050 recognition as income during the

nine months ended December 31, 2023, compared to the larger decrease in fair value as of December 31, 2022, which resulted in $3,031,000

in income during the nine months ended December 31, 2022.

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

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

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

Financial Condition and Capital Resources

of September 30, 2023, we had cash on hand of approximately $47,000 and working capital deficiency of approximately $10,597,000, as compared

of December 31, 2023, we had cash on hand of approximately $36,000 and working capital deficiency of approximately $10,490,000, 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.

capital deficiency for the six months ended September 30, 2023, as compared to the March 31, 2023 year end has an increase (a reduced

working capital deficiency) of 13.5%.

This is mainly due to the decrease in cash on-hand and current period expense of the previous Deferred

offering costs, offset by a slight 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 offset by new promissory notes.

capital deficiency for the nine months ended December 31, 2023, as compared to the March 31, 2023 year-end has an increase (a reduced

working capital) of 12.3%.

This is mainly due to the decrease in cash on-hand and current period expense of the previous Deferred offering

costs, offset by a slight 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 offset by new promissory notes.

Capital Deficiency

following table summarizes our working capital deficiency as of September 30, 2023 and March 31, 2023:

September 30,

following table summarizes our working capital deficiency as of December 31, 2023 and March 31, 2023:

December 31, 2023

March 31, 2023

Current assets

8 unchanged sentences

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 six months ended September 30, 2023 and 2022:

Six months Ended

September 30,

off set by the additional notes payable to related parties and the increase in accrued expenses to related parties.

following table summarizes our cash flows for the nine months ended December 31, 2023 and 2022:

Nine months Ended

Net cash used in operating activities

5 unchanged sentences

$ (1,592,176 )

cash used in operating activities during the six months ended September 30, 2023, was a decrease of approximately $1,430,000 as compared

cash used in operating activities during the nine months ended December 31, 2023, was a decrease of approximately $1,027,000 as compared

to the same period in 2022.

2 unchanged sentences

for related parties, which is accrued payroll.

Additionally, there was accrued interest activity in the prior six-month period, but no

accrued interest activity in the current six-month period.

net cash provided by investing activities in the six months ended September 30, 2023 increased by approximately $219,000 compared to

Additionally, there was accrued interest activity in the prior nine-month period, but

no accrued interest activity in the current nine-month period.

For the adjustments to reconcile the net loss to net cash, while the depreciation

and amortization is similar in both periods, there are changes due to the extinguishment of restructuring of the convertible note in

the prior period, as well as the difference in the change in the warrant fair value between periods.

net cash provided by investing activities in the nine months ended December 31, 2023 decreased by approximately $1,722,000 compared to

net cash used by investing activities for the same period in the prior fiscal year.

During the current period cash was only used to purchase

approximately $49,000 and offset by $59,000 received for the sale of machinery and equipment as compared to only cash used to purchase

fixed assets which consists of approximately $208,000 for the prior year period.

approximately $68,000 and offset by $59,000 received for the sale of machinery and equipment as compared to cash used to purchase fixed

assets which consists of approximately $2,430,000 for the prior year period, offset by $700,000 of cash received for the sale of machinery

and equipment.

net cash provided by financing activities decreased by approximately $1,336,000 between periods.

For the current period, the Company received

approximately $1,755,000 for the sale of shares of common stock, $150,000 from the sale of Series E Preferred Shares and $140,000 from

promissory notes with related parties.

In the same period in the prior year the Company received $4,865,000 from the original August

promissory note, $1,500,000 that had been held in escrow from the convertible note they entered into in December of 2021, and $250,000

proceeds from related party promissory notes.

This was offset in the six months ended September 30, 2022, by the removal of $3,900,000

that had been held in escrow upon the restructuring of the August promissory note.

cash position was approximately $47,000 as of September 30, 2023.

For the current period, the Company

received approximately $2,323,000 for the sale of shares of common stock, $150,000 from the sale of Series E Preferred Shares, $97,000

for the sale of the new Series G Preferred Shares and $140,000 from promissory notes with related parties.

In the same period in the

prior year the Company received $1,380,000 for the sale of shares of common stock and $250,000 proceeds from related party promissory

In the prior period, as a result of the restructuring of two of the notes, the Company had received a net amount of $1,465,000

based on $4,865,000 from the original August promissory note offset by the removal of $3,900,000 that had been held in escrow until the

restructuring of the August promissory note, as well as receiving $1,500,000 that had been held in escrow from the restructured convertible

note they entered into in December of 2021,

cash position was approximately $36,000 as of December 31, 2023.

Management believes that our cash on hand and working capital deficit

5 unchanged sentences

The line of credit bears an interest rate of prime

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

plus 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.

was $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.

50% as of September 30, 2023.

10 basis points, which totaled 18.50% 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.

Purchase Agreement

47 unchanged sentences

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

34 unchanged sentences

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

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

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 have a par value of $0.0001, a stated value of $1,200 and 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 are 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.

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.

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 fees.

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.

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

The January 2023 Note is in the aggregate principal amount of $631,968.

The Note has an interest rate of

10% per annum, with a maturity date nine months from the issuance date of the Note.

The Note carried an original issue discount

totaling $56,868, whereby the purchase price is $575,100.

All payments made by the Company under the terms in the note, including

upon repayment of this Note at maturity, shall be subject to an exit fee of 15% of the portion of the outstanding balance being

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.

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

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

date nine months from the issuance date of the Note.

The Note carried an original issue discount totaling $56,868, whereby the purchase

price is $575,100.

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

be subject to an exit fee of 15% of the portion of the outstanding balance being paid.

The 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.

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

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

20 unchanged sentences

nine months from the effective date.

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

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

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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.

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

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.

On November 20, 2023,

the maturity date was extended to June 30, 2024.

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

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embedded derivatives and was 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 condensed consolidated statement of operations.

The August Note was revalued as of December 31, 2023 at approximately $2,400,000,

with a change in fair value of approximately $467,000 recognized in the condensed consolidated statement of operations.

Note — related parties

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from the date of the note.

For 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.

For 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.

issued the Convertible Note in December 2021.

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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 had 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.

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

to be paid in full no later than June 30, 2024.

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.

of June 30, 2023, 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 $2,675,000.

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

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

no later than June 30, 2024.

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.

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

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and were required to be bifurcated.

We revalued the Restructured Senior Note as of September 30, 2023 at approximately $21,680,000, with

We revalued the Restructured Senior Note as of December 31, 2023 at approximately $24,700,000, with

a change in fair value of approximately $2,376,000 recognized in the Company’s condensed consolidated statement of operations.

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

of September 30, 2023 there were 1,656 shares of Series E Preferred Stock remaining outstanding.

of December 31, 2023 there were 1,656 shares of Series E Preferred Stock remaining outstanding.

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

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

For the six months

ended September 30, 2023, the Company had a net loss available for common stockholders of approximately $5,418,000.

As of September 30,

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.

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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.

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

received net cash proceeds of approximately $2,324,000 from the sale of common shares, $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

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

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

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

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

Diluted EPS is based on the weighted average number

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

Basic EPS is computed by dividing net income or loss available

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

For the three months ended September 30, 2023, the Company had 5,000,000 Series A Convertible Preferred Stock which would be converted

at the holder’s option into approximately 900,072,000 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.

For the three 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.

in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 260

– 10 “ Earnings per Share ”, which establishes the requirements for presenting EPS.

Basic EPS is based on the

weighted average number of shares of common stock outstanding.

Diluted EPS is based on the weighted average number of shares of common

stock outstanding and dilutive common stock equivalents.

Basic EPS is computed by dividing net income or loss available to common stockholders

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

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 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.

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.

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

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

ended September 30, 2023.

ended December 31, 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 segments.

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 ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging

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

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

the period ending December 31, 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