What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-21 compared with 2024-08-14 · 124 added, 467 removed, 195 unchanged (75% of the section changed)

19 unchanged sentences

levels of activity, performance or achievements expressed or implied in our forward-looking statements.

These risks and factors include,

by way of example and without limitation:

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

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

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

Webster City, Iowa;

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

and in enough quantity;

of contracts with customers or suppliers;

ability to maintain and develop relationships with customers and suppliers;

ability to successfully integrate acquired businesses or new brands;

impact of competitive products and pricing;

constraints or difficulties;

retention and availability of key personnel;

economic and business conditions;

doubt about our ability to continue as a going concern;

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

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

ability to successfully implement our business plan;

ability to successfully acquire, develop or commercialize new products and equipment;

commercial success of our products;

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

property claims brought by third parties;

impact of any industry regulation.

we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels

15 unchanged sentences

in United States Dollars.

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

of 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 Water Solutions, LLC (“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, 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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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.

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

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

discussed in our consolidated financial statements, Ampleo Turnaround and Restructuring, LLC was placed as the receiver over the Company’s

assets during September of 2024.

Further, during February of 2025, the receiver submitted a motion to sell substantially all of the Company’s

assets to Streeterville and Bucktown Capital for an approximate credit bid of $35.7m and $100,000 in cash.

The Company believes that

it continued to function as a going concern until the date of the approved sale.

Subsequent to that date, the Company plans to present

its financial statements using the liquidation basis of accounting as liquidation was considered imminent.

As such, in accordance with

ASC 205-30, Liquidation Basis of Accounting , the Company will present a Consolidated statement of net assets (liabilities) in

liquidation and Consolidated statement of changes in net assets (liabilities) in liquidation as of the approximate date that the liquidation

became imminent.

For purposes of reporting under the liquidation basis of accounting the Company plans to measure its assets at the amount

used to settle its liabilities (based on the proposed credit bid).

and Capital Resources

of September 30, 2024, we had cash on hand of approximately $43,330 and working capital deficiency of $39,312,635, 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.

While we continued

to function as a going concern during the interim period ended September 30, 2024, the Company plans to liquidate its assets in order

to settle its outstanding debts.

September 4, 2024, Streeterville Capital, LLC, a Utah limited liability company, and Bucktown Capital, LLC, a Utah limited liability

company (collectively, “Lenders”), filed a Verified Emergency Motion for Appointment of Receiver (the “Motion”)

under Civil Case No.

240907138, in the District Court of Salt Lake County, Utah, against NaturalShrimp, Inc.

(“NaturalShrimp”).

Motion alleges, among other things, that NaturalShrimp has defaulted under the terms of its loan agreements with Lenders.

sought the appointment of a Receiver to immediately take control of NaturalShrimp’s assets to preserve the same.

order was entered ex parte by the Utah State Court in the Receivership Case on September 9, 2024 granting the relief requested by Lenders.

The Utah State Court duly appointed Amplēo Turnaround and Restructuring, LLC (the “Receiver”) as the receiver over NaturalShrimp’s

The Utah State Court’s order further scheduled a hearing to be held on September 17, 2024, on a preliminary injunction

to address issues raised in the Motion.

November 20, 2024, the Lenders and NaturalShrimp filed a Verified Amended and Stipulated Emergency Motion for Immediate Appointment

of a Receiver in the Receivership Case.

November 22, 2024, the Utah State Court entered an order granting the Stipulated Motion and appointed Receiver as the receiver over the

assets of NaturalShrimp.

Under the Amended Receivership Order, the Receiver is the receiver over the Receivership Entities’ assets.

11, 2025, the Receiver filed a Motion for Approval to Sell Substantially all of the Receivership Entities’ Assets to Streeterville

Captial, LLC and Bucktown Captial, LLC (or Their Designees) or Any Other Party With a Higher and Better Offer Free and Clear of All Liens,

Interests, Claims, and Encumbrances (the “Sale Motion”) in the Receivership Case.

The Sale Motion seeks the Utah State

Court’s approval for the Receiver to sell substantially all of the Receivership Entities’ assets free and clear of all liens,

interests, claims, and encumbrances to Streeterville and Bucktown Capital, through their designated entities, NaturalShrimp Farms, Inc.

(“NV Purchaser”), a Nevada corporation, Iowa Shrimp Holdings, LLC (“IA Purchaser”), an Iowa limited liability

company, Texas Shrimp Holdings, LLC (“TX Purchaser” or together with NV Purchaser and IA Purchaser, the “Purchasers”),

a Texas limited liability company, for a roughly $35,703,789.87 credit bid (based on a secured and administrative claim basis) and $100,000

cash, pursuant to the terms and conditions set forth in that certain Asset Purchase Agreement (“APA”) between Trustee and

The order to sell the assets was approved on March 30, 2025 and the title to the assets was transferred to the lenders on

May 14, 2025.

As part of the sale, the Company transferred its ownership rights to its fixed assets, patents and license agreements (total

balance of $25.5 million as of September 30, 2024) in exchange for the extinguishment of its outstanding debt to Streeterville and Buckstown

Capital ($30.8 million as of September 30, 2024).

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

months Ended September 30,

Net cash used in operating activities

$ (1,556,764 )

$ (2,200,446 )

Net cash provided by (used in) investing activities

Net cash provided by financing

Net change in cash

cash used in operating activities during the six months ended September 30, 2024, was a decrease of approximately $644,000 as compared

to the same period in 2023.

The decrease in cash used is primarily due to the decrease in the current period net loss as compared to

the same period the prior year and adjustments to reconcile the net loss to net cash, including i) the change in fair value of the restructured

notes and ii) the prior period write-off of deferred offering costs.

net cash provided by investing activities in the six months ended September 30, 2024 increased by $107,512 compared to net cash used

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

The increase was in the current period was due primarily to cash

of $117,712 that was received for the sale of machinery and equipment.

net cash provided by financing activities decreased by $654,014 between periods.

For the current period, the Company received approximately

$653,719 for the sale of shares of common shares and $300,000 for the sale of the new Series G Preferred Shares.

In the same period in

the prior year the Company received $1,755,000 for the sale of shares of common stock.

of Operations

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 the Three Months Ended September 30, 2024 to the Three Months Ended September 30, 2023

had gross sales revenue of $70,373 and $58,010, respectively, during the three months ended September 30, 2024 and 2023, an increase

of approximately $12,000 or 12%.

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

of slightly higher shrimp sales during the 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

1 unchanged sentence

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

Salaries and related expenses

Professional services

Other general and administrative expenses

Facility operations

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

$50,758 and $51,000, respectively, during the three months ended September 30, 2024 and 2023.

expenses for the three months ended September 30, 2024 were $1,172,405, which is a 65.2% decrease over operating expenses of $3,365,779

for the same period in 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.

The overall change in expenses is primarily due to a $1.3 million writeoff of deferred offering costs in

the prior period (related to the merger termination) that did not recur during the current period.

Income (Expense)

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

following table summarizes the various components of our other income (expense) for the three months ended September 30, 2024 and 2023:

Months Ended September

Interest expense

2 unchanged sentences

Change in fair value of restructured notes

Gain on sale of machinery

and equipment

Income (expense) for the three months ended September 30, 2024 decreased by $671,369 as compared to the same period in the prior year.

The decrease was primarily due to the change in fair value of the restructured notes and the change in fair value of the warrant liability.

of the Six Months Ended September 30, 2024 to the Six Months Ended September 30, 2023

Company had gross sales revenue of $106,991 and $263,882, respectively, during the six months ended September 30, 2024 and 2023, a decrease

of approximately $157,000, or 60%.

The decrease in gross sales revenue during the six months ended September 30, 2024 over the same period

in the prior year was a result of the $150,000 of revenue recognized in the prior period stemming from the rental of NSI Technologies

that did not recur during the current period.

of sales decreased by approximately $15,000 during the six months ended September 30, 2024 as compared to the same period in the prior

The decrease primarily relates to the $15,000 in costs of sales incurred related to the rental of NSI technologies in the prior

period that did not recur in the current period.

expenses for the six months ended September 30, 2024 decreased by $2,586,964, or 63.5%, compared to the same period in 2023, primarily

due to a decrease in professional fees stemming from the $1.3 million write-off of deferred offering costs as a result of the termination

of the Merger Agreement.

In addition, the decrease was also due to a decrease in facility operation of approximately $230,000 and salaries

of approximately $180,000 as compared to the same period in the prior year.

income (expense)

following table summarizes the various components of our Other income(expense) for each of the six months ended September 30, 2024 and

September 30, 2023:

Months Ended September

Interest expense

Interest expense - related parties

Change in fair value of warrant liability

Change in fair value of restructured notes

Extension Fee

(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 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 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%.

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 June 30, 2024 and March 31, 2023:

June 30, 2024

March 31, 2024

Current assets

Current liabilities

Working capital deficiency

$ (39,417,481 )

$ (38,147,399 )

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 )

Net cash provided by (used in) investing activities

Net cash provided by financing activities

Net change in cash

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.

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 $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.

Financing Arrangements and Developments During the Period

Debt and Lines of Credit

Company also has a working capital line of credit with Capital One Bank for $50,000.

The line of credit bears an interest rate of prime

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 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 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 June 30, 2024 and March 31, 2024.

Common Stock Equity Financing

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

Agreement with GHS.

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

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

The Registration

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

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

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

amount specified in each put notice.

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

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

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

dollars ($1,000,000).

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

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

4.99% of the Company’s outstanding Common Stock.

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

Price (as defined in the Equity Financing Agreement).

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

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

Puts may be delivered

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

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

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

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.

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.

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”).

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

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

date nine months from the issuance date of the Note.

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

price is $575,100.

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

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

The 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.

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 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 $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

April 21, 2023, the Company entered into a $60,000 promissory note with Yotta Investment LLC (“Yotta”), with no interest

to accrue on the principal balance.

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

by the Merger Agreement with Yotta (“Merger Agreement”).

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

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

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

The Merger Agreement was terminated,

and management believes the promissory note will be settled in the Breakup Fee.

2023 Promissory Note

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

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

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

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

cases without any action on the part of the Company.

The Merger Agreement was terminated, and management believes the promissory note

will be settled in the Breakup Fee.

August Note payable

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

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

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

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

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

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

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

portion of the outstanding balance being paid.

conjunction with the 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

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

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

the terms of the original instrument.

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

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

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

accounted for at fair value until it is settled.

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

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

for embedded derivatives.

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

embedded derivatives and was required to be bifurcated.

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

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

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

priority debt of the Company.

As of the date of this report, five of the related parties have entered into promissory notes under the

loan agreement for $50,000 each, for a total of cash received of $250,000.

The notes bear interest at 10% per annum and are due one year

from the date of the note.

For the 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.

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

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

the principal balance of the Convertible Note.

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

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

with a fair value of $940,000.

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

of the common stock of $0.32;

a risk-free interest rate of 1.19%;

the expected volatility of the common stock of 209.9%;

the estimated

remaining term;

and a dividend rate of 0%.

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

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

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

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

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

(i) eliminated

the conversion feature of the Convertible Note;

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

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

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

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

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

(iii) provide that the remaining

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

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

later than June 30, 2024;

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

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

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

of June 30, 2023, the Merger 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.

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

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

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

As such, with the removal of the Convertible

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

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

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

election of the fair value option under ASC 825, we will account for the Restructured Senior Note at fair value every period end until

it is settled.

In accordance with ASC 815- 15-25-1(b) a hybrid instrument that is measured at fair value under ASC 825 fair value option

each period with changes in fair value reported in earnings as they occur should not be evaluated for embedded derivatives.

we did not evaluate the provisions in the Restructured Senior Note as to whether they fell under the guidance of embedded derivatives

and were required to be bifurcated.

We revalued the Restructured Senior Note as of June 30, 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

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

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

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

We received approximately $1.4 million in net proceeds after deducting

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

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

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

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.

These factors raise substantial doubt about the Company’s ability to continue as a going concern, within one year from the issuance

date of this filing.

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

capital or debt financing to meet short and long-term operating requirements.

During the three months ended June 30, 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.

may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result

in a requirement for additional cash.

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

of its current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to its common stock.

Additional financing may not be available upon acceptable terms, or at all.

If adequate funds are not available or are not available

on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly

and materially restrict its operations.

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

If the Company is unable to obtain the necessary capital, the Company may be unable to develop its future planned facilities

and, concomitantly, increase its shrimp production.

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

the Company be unable to continue as a going concern.

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

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

If the Company raises additional funds through

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

or privileges senior to the rights, preferences, and privileges of the NaturalShrimp Common Stock.

Additional financing may not be available

upon acceptable terms, or at all.

If adequate funds are not available or are not available on acceptable terms, the Company may not be

able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict its future

plans for developing its business and achieving commercial revenues.

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

In addition, while we have received capital from various

private placements that have enabled us to fund our operations, these funds have been largely used to develop our processes, although

additional funds are needed for other corporate operational and working capital purposes.

However, not including funds needed for capital

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

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

commercial scale-up of our equipment.

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

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

There can be no assurance that additional financing will be available

to us when needed or, if available, that such financing can be obtained on commercially reasonable terms.

If we are not able to obtain

the additional necessary financing on a timely basis, or if we are unable to generate significant revenues from operations, we will not

be able to meet our other obligations as they become due, and we will be forced to scale down or perhaps even cease our operations.

Sheet Arrangements

have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that

is material to stockholders.

do not believe that inflation has had a material impact on our business, revenues or operating results during the periods presented.

Accounting Policies and Estimates

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

Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2024 and 2023.

We believe that the accounting policies

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

Gain on sale of machinery

and equipment

Total other income (expense)

Income (expense) for the six months ended September 30, 2024, decreased $1,414,831 as compared to the same period in the prior year.

The decrease was due to primarily to the change in fair value of the restructured notes and warrant liability.

Accounting Estimates

Value Measurement

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

and Diluted Earnings/Loss per Common Share

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

in accordance with 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 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

F Preferred Stock which would be converted at the holders’ option into approximately 286,290,000 underlying common shares, 645

of Series G Redeemable Convertible Preferred shares whose approximately 387,000,000 underlying shares are convertible at the investors’

option at a conversion price based on the discounted market price of $0.002 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

26 unchanged sentences

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

ended June 30, 2024.

ended September 30, 2024.

Issued Accounting Standards

48 unchanged sentences

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.

the period ending September 30, 2024, there were a few 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.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

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