What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-02-14 · 166 added, 395 removed, 496 unchanged (53% of the section changed)

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as filed with the U.S.

Securities and Exchange Commission (the “SEC”) on June 27, 2023, any of which may cause our company’s

Securities and Exchange Commission (the “SEC”) on July 17, 2024, any of which may cause our company’s

or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results,

21 unchanged sentences

commercial success of our products;

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

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

property claims brought by third parties;

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in United States Dollars.

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

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

use United States GAAP financial measures, unless otherwise noted.

17 unchanged sentences

business to a global shrimp farming company.

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

October 5, 2015, we formed NAS with F&T Water Solutions, LLC (“F&T”), the purpose of which was to jointly develop

with F&T certain water technologies.

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

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in June 2022.

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

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

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

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

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

per week by the third or fourth calendar quarter of 2024.

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

be in the next one to two fiscal quarters.

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

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

We believe that the combined output from our La

Coste, Texas and Iowa facilities will be approximately 24,000 pounds of shrimp production per week by the third calendar quarter of 2025.

We can, however, provide no assurances as to how significant our revenue will be in the next one to two fiscal quarters.

of Operations

of the Three Months Ended December 31, 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 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.

of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

had gross sales revenue of $36,618 and $205,872, respectively, during the three months ended June 30, 2024 and 2023, a decrease of approximately

$169,000, or 82%.

decrease in gross sales revenue during the three months ended June 30, 2024 over the same period in the prior year was a result of the

revenue recognized under ASC 606 in the quarter of the prior year as the Company entered into a six month agreement with a company for

the use of the NSI Technologies on May 21, 2023, and received the initial payment of $150,000, before the monthly payments required in

the contract.

There is no contract for the use of the NSI Technologies in the current period.

In addition, there has been a decrease

in the sale of shrimp over the same period last year.

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

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

Additionally, in the

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

Cost of sales were

$34,732 and $49,741, respectively, during the three months ended June 30, 2024 and 2023.

The decrease in cost of sales was primarily

due to the decrease in shrimp sales during Q1 2025 as compared to the same period in prior year.

following table summarizes the various components of our operating expenses for each of the three months ended June 30, 2024 and 2023:

Three Months Ended

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Facility operations

Research and development

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

expenses for the three months ended June 30, 2024 were $2,065,428, which is a 16.0% decrease as compared to operating expenses of $2,459,018

for the same period in 2023.

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.

The overall change in expenses is primarily due to the approximately $200,000 decrease in facility operations

relating to the progress of the commercial operations in the new plant in Iowa as well as in Texas due to completion of the work, and

the salt expense was reduced in this quarter compared to last, due to changes and improvement for the system in Iowa.

In addition, the

rent expense was reduced by approximately $17,000, or 76.9% based on the termination of the previous lease agreement and the smaller

lease expense under the new lease agreement.

Finally, professional services decreased by approximately $82,000, or 26.3%, which is primarily

comprised of salaries being decreased by approximately $57,000, a 11.2% decrease, as well as general and administrative expenses decreased

by approximately $38,000 in the current period.

Income (Expense)

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

following table summarizes the various components of our other income (expense) for each of the three months ended June 30, 2024 and

Three Months Ended

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Interest expense – related parties

Amortization of debt discount

Change in fair value of derivative liability

Change in fair value of warrant liability

Loss due to fire

Change in fair value of restructured notes

Gain on extinguishment of debt

Extension fee

Gain on termination of lease

$ (3,128,720 )

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 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 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 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.

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

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

Additionally, in the

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

Professional fees

Other general and administrative expenses

Facility operations

Research and development

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.

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 nine months ended December 31, 2023 and

December 31, 2022:

Nine Months Ended

Interest expense

$ (1,674,994 )

Interest expense - related parties

Amortization of debt discount

Change in fair value of derivative liability

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 )

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

(Loss)gain on sale of machinery and equipment

income (expense) for the three months ended June 30, 2024, decreased approximately $743,000 from other income into other expense, from

the same period in the prior year, due almost entirely from the difference in the change in fair value of the restructured notes between

periods and the change in fair value of the warrant liability.

Additionally, in the prior period there was $180,000 in extension fees

related to the attempted merger, which was terminated in July of 2023.

Company originally recognized the warrant liability in December 2021 and revalues it at the end of each reporting period.

in the fair value for the three months ended June 30, 2024, as compared to the prior year end, resulted in a $5,000 recognition as income

during the three months ended June 30, 2024, compared to a decrease in fair value during the three months ended June 30, 2023, which

resulted in a $50 ,000 recognition as income during the three months ended June 30, 2023.

Financial Condition and Capital Resources

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

of June 30, 2024, we had cash on hand of approximately $5,000 and working capital deficiency of approximately $38,697,000, as compared

to cash on hand of approximately $116,000 and a working capital deficiency of approximately $38,147,000 as of March 31, 2024.

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

capital deficiency for the three months ended June 30, 2024, as compared to the March 31, 2023 year-end has a slight increase (a reduced

working capital) of 1.4%.

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Capital Deficiency

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

December 31, 2023

following table summarizes our working capital deficiency as of June 30, 2024 and March 31, 2023:

June 30, 2024

March 31, 2024

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$ (38,147,399 )

assets decreased mainly as the deferred offering costs relating to the Merger Agreement were no longer to be recognized as a current

asset based on the Merger termination and were expensed in July 2023.

Additionally, the assets decreased because of the use of the cash

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

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

off set by the 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

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

The increase in current liabilities is primarily due to the change in the

fair value option of the restructured notes payable, the accrual of interest on notes payable with related parties and accrued dividends

payable, offset by the partition from the January 2023 note payable which was exchanged for common shares.

following table summarizes our cash flows for the three months ended June 30, 2024 and 2023:

Three months Ended

Net cash used in operating activities

$ (1,400,898 )

$ (3,884,764 )

Net cash provided by (used in) investing activities

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Net change in cash

$ (1,592,176 )

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.

The decrease in cash used is primarily due to the current period expense of the deferred offering costs of

$1,336,263 due to the termination of the Merger Agreement, as well as a decrease in prepaid expenses and an increase in accrued expense

for related parties, which is accrued payroll.

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

cash used in operating activities during the three months ended June 30, 2024, was a decrease of approximately $595,000 as compared to

the same period in 2023.

The decrease in cash used is primarily due to the difference in the current period adjustments to reconcile

the net loss to net cash.

While the depreciation and amortization is similar in both periods, there are changes in the change of fair

value of restructured notes payable between the periods with an increase in the fair value in the current period compared to a loss 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 $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.

In addition, the change in the amortization

of the operating lease right-of-use assets and the gain on termination of lease, based on the change in office lease.

Furthermore, there

was an increase in accounts payable, accrued expenses and the new operating lease liability.

net cash provided by investing activities in the three months ended June 30, 2024, decreased by approximately $30,000 compared to net

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

During the current period, cash was provided by $10,000

of cash received for the sale of machinery and equipment, as compared to cash used in the prior year period to purchase fixed assets

which consists of approximately $39,000, offset by $19,000 of cash received for the sale of machinery and equipment.

net cash provided by financing activities decreased by approximately $589,000 between periods.

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

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

For the current period, the Company received

approximately $486,000 for the sale of shares of common shares and $200,000 for the sale of the new Series G Preferred Shares.

same period in the prior year the Company received $1,299,000 for the sale of shares of common stock offset by the payment of $24,000

on notes payable,

cash position was approximately $5,000 as of June 30, 2024.

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

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

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

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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 December 31, 2023.

plus 25.9 basis points, which totaled 34.4% as of June 30, 2024.

The line of credit is unsecured.

The balance of the line of credit

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

The balance of the line of credit was

$9,580 at both June 30, 2024 and March 31, 2024.

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 December 31, 2023.

10 basis points, which totaled 18.50% as of June 30, 2024.

The line of credit is secured by assets of the Company’s subsidiaries.

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

Purchase Agreement

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

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

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

Notwithstanding the

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

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

the GHS Purchase Agreement.

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

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

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

immediately preceding, but not including the applicable purchase date.

The Company must deliver a number of GHS Purchase Shares equal

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

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

any GHS Purchase Shares.

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

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

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

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

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

the three months ended June 30, 2023, the Company sold 11,981,706 shares of common stock at a net amount of approximately $376,000, at

a share price of $0.03, of the GHS Purchase Agreement.

The balance of the line of credit is $10,237 at June 30, 2024 and March 31, 2024.

Common Stock Equity Financing

22 unchanged sentences

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

the three months ended September 30, 2023, the Company sold 31,808,246 shares of common stock at a net amount of approximately $566,000,

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

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

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

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

The Company intends to use

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

GHS 2023 Purchase Agreement provides that, upon the terms and subject to the conditions and limitations set forth in the agreement, the

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

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

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

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

business days preceding the purchase date.

Notwithstanding the foregoing dollar limitations, the Company and GHS may, from time to time,

mutually agree (in writing) to waive the aforementioned limitations for a relevant Purchase Notice, which waiver, for the avoidance of

doubt, shall not exceed the 4.99% beneficial ownership limitation contained in the GHS 2023 Purchase Agreement.

The “Purchase Price”

means, with respect to a purchase made pursuant to the GHS 2023 Purchase Agreement, 90% of the lowest VWAP (as defined in the GHS 2023

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

applicable purchase date).

The Company shall deliver a number of GHS Purchase Shares equal to 112.5% of the aggregate purchase amount

for such GHS Purchase divided by the Purchase Price per share for such GHS Purchase, against payment by GHS to the Company of the purchase

amount with respect to such Purchase (less documented deposit and clearing fees, if any), as full payment for such GHS Purchase Shares

via wire transfer of immediately available funds.

there are any default events, as set forth in the GHS 2023 Purchase Agreement, has occurred and is continuing, the Company shall not

deliver to GHS any Purchase Notice.

pursuant to the terms of the GHS 2023 Purchase Agreement, from May 9, 2023 until the date that is the later of (i) the closing of the

transactions whereby Yotta Merger Sub, Inc.

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

and (ii) the 12 month anniversary of the initial closing pursuant to the Section 2(a) of GHS Purchase Agreement, upon any issuance by

the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash consideration, indebtedness or a combination

of units thereof (a “Subsequent Financing”), GHS shall have the right to participate in any financing, up to an amount of

the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions

and price provided for in the Subsequent Financing.

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

Company submitted a Post-Effective Amendment No.

1 (“Amendment”) to this Registration Statement for the purpose of providing

information from its Annual Report on Form 10-K for the period ended March 31, 2024 filed with the SEC July 17, 2024.

The original Registration

Statement registered 324,675,325 common shares, with 243,860,340 common shares having been issued to the selling stockholder after the

Registration Statement was declared effective, with this Amendment registering for resale by the selling stockholder a total of 80,814,985

shares which remain to be issued.

the three months ended June 30, 2024, the Company sold 66,392,019 shares of common stock at a net amount of approximately $486,000, at

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

share prices of $0.007 through $0.008, in relation to the Equity Financing Agreement.

G Preferred Stock

33 unchanged sentences

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.

April 23, 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.

The $20,000 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.

June 12, 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.

The $20,000 discount will be accreted up to the redemption price over the one-year period until redemption.

July 10, 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.

The $20,000 discount will be accreted up to the redemption price over the one-year period until redemption.

the three months ending June 30, 2024, the accretion for the Series G Preferred Stock was $39,000.

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

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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.

date has been further extended to August 15, 2024.

April 3, 2024, the Company and the Investor entered into a fifth 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 remaining January 2023 Note was partitioned into a $92,700 new promissory note, leaving the original January 2023 Note with an adjusted

balance of $221,018.

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.

The shares of common

stock issued had a fair value of $100,000 based on the market price of the shares of $0.010 on the execution date, resulting in an excess

of $7,300 to be recognized as a financing expense.

2023 Promissory Note

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will be settled in the Breakup Fee.

Promissory Note

August Note payable

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

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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.

On November 20, 2023,

the maturity date was extended to June 30, 2024.

conjunction with the October 24, 2022 Merger Agreement with Yotta Acquisition Corporation, on November 4, 2022, 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.

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.

The maturity date

has been further extended to August 15, 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 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.

The August Note was revalued as of June 30, 2024 at approximately $2,790,000,

with a change in fair value of approximately $150,000.

As of June 30, 2024, the accrued interest from the restructuring date, which is

included in the fair value is approximately $490,000.

Note — related parties

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

The maturity date has been extended for six months to two of the related parties and three months for one of the

related party.

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

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from the date of the note.

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.

For the three and nine months ended June 30, 2024, the interest expense for the related party promissory notes

was approximately $9,000 and $21,000, respectively.

As of June 30, 2024 and March 31, 2023, the accrued interest related to the related

party promissory notes was approximately $41,000 and $22,000, respectively.

Senior Note payable

issued the Convertible Note in December 2021.

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

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

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

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

Additionally,

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

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

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

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

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

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

In consideration of the grant

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

Subsequently,

the date by which the listing had to be completed was further extended to June 15, 2022, and again to November 15, 2022, with no additional

fee included.

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

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

preferred stock) within 10 days of receiving such amount.

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

outstanding balance will be increased by 10%.

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

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

due and payable.

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

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

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

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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.

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

On July 3, 2024,

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

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 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.

We revalued the Restructured Senior Note as of June 30, 2024 at approximately $27,690,000, with a

change in fair value of approximately $570,000 recognized in the Company’s condensed consolidated statement of operations.

June 30, 2024, the accrued interest from the restructuring date, which is included in the fair value is approximately $6,463,000.

E Preferred Stock and Warrant

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

Exchange Agreement and Redemption

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

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

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

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

The exchange was completed on April

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

for as a redemption.

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

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

was accounted for in a manner similar to a dividend.

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

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

90% multiplied by the average of the two lowest volume weighted average price per share of the Company’s common stock during the

10 trading days immediately preceding the date of conversion.

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

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

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

As of June 16, 2022, this holder held 940

shares of the Series E Preferred Stock.

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

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

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

their Series E Preferred Stock.

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

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

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

E Preferred Stock into shares of common stock.

On May 1, 2023, the holder converted 600 Series E Preferred Stock into 23,989,570 shares

of common stock.

The conversion represented their remaining Series E Preferred Stock, including the 10% increase, accrued dividends in

kind of $516,000 and the 15% Exit Fee of $108,000.

July 24, 2023, the Company entered into a Securities Purchase Agreement for the additional sale of 156 shares of Series E Preferred Stock

at a price of $1,000 per share of Preferred Stock, for a total of $156,000.

The Series E Preferred Stock will earn a dividend of 12%

per annum, for as long as the relevant Preferred Stock has not been redeemed or converted.

Dividends are to be paid quarterly, and at

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

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:

(i) 9,090,909 shares of NaturalShrimp

common stock at a price per share of $0.55;

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

price of $0.75 per share;

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

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

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

offering and to participate in a possible debt financing.

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

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

the Company enters into such financing.

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

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

July 24, 2023, the Company entered into a Securities Purchase Agreement with another accredited investor for the additional sale of 156

shares of Series E Preferred Stock at a price of $1,000 per share of Preferred Stock, for a total of $156,000.

The Series E Preferred

Stock will earn a dividend of 12% per annum, for as long as the relevant Preferred Stock has not been redeemed or converted.

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

30, 2024 the accretion for the Series E Preferred Stock was $9,300.

of June 30, 2024 there were 1,656 shares of Series E Preferred Stock remaining outstanding.

Concern and Management Liquidity Plans

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

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,

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

three months ended June 30, 2024, the Company had a net loss available for common stockholders of approximately $2,926,000.

30, 2024, the Company had an accumulated deficit of approximately $186,717,000 and a working capital deficit of approximately $39,417,000.

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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 $2,324,000 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

During the three months ended June 30, 2024, the Company

received net cash proceeds of approximately $486,000 from the sale of common shares, and $200,000 from the sale of Series G Preferred

Subsequent to period end, the Company received approximately $42,000 for the sale of common shares and $100,000 from the sale

of Series G Preferred stock

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

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(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

As of the three months

ended June 30, 2024, the Company had 5,000,000 Series A Convertible Preferred Stock which would be converted at the holder’s option

into approximately 1,192,874,000 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

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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.

As of the three months ended June 30, 2023, the Company had

5,000,000 Series A Convertible Preferred Stock which would be converted at the holder’s option into approximately 868,264,000 underlying

common shares, 1,500 of Series E Redeemable Convertible Preferred shares whose approximately 5,143,000 underlying shares are convertible

at the investors’ option at a fixed conversion price of $0.35, 750,000 shares of Series F Preferred Stock which would be converted

at the holders’ option into approximately 208,383,000 underlying common shares, and 18,573,116 warrants outstanding which were

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

of Long-lived Assets and Long-lived Assets

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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 December 31, 2023.

ended June 30, 2024.

Issued Accounting Standards

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2023-07 , “ Segment Reporting (Topic

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.

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

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

The Company is currently evaluating the impact

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

the period ending 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.

Management does not believe the adoption of

any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

The Company adopted ASU 2020-06 as of April 1,

2024, which had no impact on its consolidated financial statements and related disclosures.

the period ending June 30, 2024, there were a few new accounting pronouncements issued by the Financial Accounting Standards Board.

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

Management does not believe the adoption of any of

these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements.

Quantitative and Qualitative Disclosures about Market Risk

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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