UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~December 31, 2020~~

September 30, 2021

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from _________ to _________

Commission file number: 000-54030

~~NATURALSHRIMP INCORPORATED~~

~~(Exact name of registrant as specified in its charter)~~

~~Nevada~~		~~74-3262176~~ NATURALSHRIMP INCORPORATED
(Exact name of registrant as specified in its charter)

Nevada		74-3262176
(State or other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

~~15150 Preston Road,~~ 5501 LBJ Freeway, Suite ~~#300~~ ~~Dallas,~~450Dallas, Texas		~~75248~~ 75240
(Address of Principal Executive Offices)		(Zip Code)

(888) 791-9474

(Registrant’s telephone number, including area code)

N/A

(Former address)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of exchange on which registered
None		N/A		N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a small reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” a “smaller reporting company” and an “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~February 16,~~November 15, 2021, there were ~~551,301,181~~636,528,901 shares of the registrant’s common stock outstanding.

NATURALSHRIMP INCORPORATED

FORM 10-Q

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~DECEMBER 31, 2020~~

SEPTEMBER 30, 2021

TABLE OF CONTENTS

			Page

PART I.FINANCIAL INFORMATION		3

ITEM 1.	Financial Statements		3

	Condensed Consolidated Balance Sheets as of ~~December 31, 2020~~September 30, 2021 (unaudited) and March 31, ~~2020~~2021		3

	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ (unaudited)		4

	Condensed Consolidated Statements of Stockholders’ Deficit for the ~~Three and Nine~~Six Months Ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ (unaudited)		5

	Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three and Six Months Ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ (unaudited)	7	6

	Notes to Condensed Consolidated Financial Statements (unaudited)	8	7

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21	19

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	32	30

ITEM 4.	Controls and Procedures	32	30

PART II.OTHER INFORMATION		33

ITEM 1.	Legal Proceedings	33	32

ITEM 1A.	Risk Factors	34	32

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34	33

ITEM 3.	Defaults Upon Senior Securities	34	33

ITEM 4.	Mine Safety Disclosures	34	33

ITEM 5.	Other Information	34	33

ITEM 6.	Exhibits	35	34

SIGNATURES		36	35

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NATURALSHRIMP INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

December 31,
2020

March 31,
2020

Current assets

(unaudited)



Cash
$311,848
$109,491
Prepaid expenses
  778,019
  128,693
Insurance settlement
  -
  917,210



Total current assets
  1,089,867
  1,155,394



Fixed assets
  12,286,515
  707,808



Other assets


Construction-in-process
  1,719,945
  -
Right of Use asset
  275,400
  275,400
Deposits
  20,633
  178,198



Total other assets
  2,015,978
  453,598



Total assets
$15,392,360
$2,316,800



LIABILITIES AND STOCKHOLDERS' DEFICIT


Current liabilities


Accounts payable
$896,379
$641,146
Accrued interest
  64,246
  81,034
Accrued interest - related parties
  175,520
  296,624
Other accrued expenses
  628,204
  1,204,815
Short-term Promissory Note and Lines of credit
  575,910
  570,497
Bank loan
  8,438
  8,904
PPP loan
  103,200
  -
Convertible debentures
  -
  463,161
Notes payable - related parties
  1,247,162
  1,221,162
Dividends payable
  182,639
  -
Derivative liability
  -
  176,000
Warrant liability
  -
  90,000



Total current liabilities
  3,881,698
  4,753,343



Bank loans, less current maturities
  208,493
  225,837
Notes payable
  5,000,000

Note payable - related party, less current maturities
  239,604
  -
Lease Liability
  275,400
  275,400



Total liabilities
  9,605,195
  5,254,580






Commitments and contingencies (Note 11)








Series D Redeemable Convertible Preferred stock, $0.0001 par value, 20,000 shares authorized, 5,000 and 0 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively
  208,333
  -






Stockholders' deficit


Series A Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at December 31, 2020 and March 31, 2020
  500
  500
Series B Convertible Preferred stock, $0.0001 par value, 5,000 shares authorized, 1,920 and 2,250 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively
  -
  -
Common stock, $0.0001 par value, 900,000,000 shares authorized, 544,989,181 and 379,742,524 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively
  54,500
  37,975
Additional paid in capital
  55,437,431
  43,533,242
Stock Payable
  135,000
  -
Accumulated deficit
  (49,961,843)
  (46,427,396)
Total stockholders' deficit attributable to NaturalShrimp, Inc. shareholders
  5,665,588
  (2,855,679)



Non-controlling interest in NAS
  (86,756)
  (82,101)



Total stockholders' deficit
  5,578,832
  (2,937,780)



Total liabilities mezzanine and stockholders' deficit
$15,392,360
$2,316,800

	September 30, 2021			March 31, 2021
ASSETS
Current assets
Cash	$	800,531		$	155,795
Prepaid expenses		287,068			655,339

Total current assets		1,087,599			811,134

Fixed assets		12,269,987			12,236,557

Other assets
Construction-in-process		3,171,038			1,873,219
Patents		6,853,500			0
License Agreement		10,762,376
Right of Use asset		320,461			275,400
Deposits		20,633			20,633
Total other assets		21,128,008			2,169,252
Total assets	$	34,485,594		$	15,216,943

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	3,821,506		$	963,289
Accrued interest		73,350			73,350
Accrued interest - related parties		187,520			187,520
Other accrued expenses		543,972			602,368
Accrued expenses - related parties		600,000			0
Short-term Promissory Note and Lines of credit		20,044			573,621
Bank loan		10,380			8,725
PPP loan		0			103,200
Convertible debentures		0			483,637
Note payable		96,000			96,000
Notes payable - related parties		495,412			1,151,162
Dividends payable		360,226			182,639
Total current liabilities		6,208,410			4,425,511

Bank loans, less current maturities		200,358			206,127
Notes payable		5,000,000			5,000,000
Note payable, less current maturities		167,604			215,604
Lease Liability		321,336			275,400

Total liabilities		11,897,708			10,122,642

Commitments and contingencies (Note 14)
Series E Redeemable Convertible Preferred stock, $0.0001 par value, 10,000 shares authorized, 2,540 and 0 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively		3,377,375			0

Series D Redeemable Convertible Preferred stock, $0.0001 par value, 20,000 shares authorized, 0 and 6,050 shares issued and outstanding at June 30, 2021 and March 31, 2021, respectively		0			2,023,333

Stockholders’ deficit
Series A Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively		500			500
Series B Convertible Preferred stock, $0.0001 par value, 5,000 shares authorized, 345 and 607 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively		0			0
Common stock, $0.0001 par value, 900,000,000 shares authorized, 607,134,014 and 560,745,180 shares issued and 606,821,513 and 560,745,180 shares outstanding at September 30, 2021 and March 31, 2021, respectively		60,683			56,075
Additional paid in capital		74,609,294			56,649,491
Stock Payable		11,948,176			136,000
Accumulated deficit		(67,408,142	)		(53,683,268	)
Total stockholders’ deficit attributable to NaturalShrimp Incorporated shareholders		19,210,511			3,158,798

Non-controlling interest in NAS		0			(87,830	)

Total stockholders’ deficit		19,210,511			3,070,968

Total liabilities mezzanine and stockholders’ deficit	$	34,485,594		$	15,216,943

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

Table of Contents

NATURALSHRIMP INCORPORATED ~~AND SUBSIDIARIES~~

CONDENSED ~~CONSOLIDATED~~Consolidated STATEMENTS OF OPERATIONS

(Unaudited)

For the Three Months Ended

For the Nine months Ended

December 31,
2020

December 31,
2019

December 31,
2020

December 31,
2019









Sales
$-
$-
$-
$-





Operating expenses:




General and administrative
  394,654
  306,834
  1,131,662
  944,571
Research and development
  -
  101,500
  79,550
  101,500
Facility operations
  154,470
  41,375
  234,113
  180,934
Depreciation and amortization
  18,173
  15,958
  37,850
  41,521





Total operating expenses
  567,297
  465,667
  1,483,175
  1,268,526





Net loss from operations
  (567,297)
  (465,667)
  (1,483,175)
  (1,268,526)





Other income (expense):




Interest expense
  (42,541)
  (40,820)
  (102,057)
  (160,351)
Amortization of debt discount
  -
  (38,831)
  -
  (515,204)
Financing costs
  -
  (53,528)
  (64,452)
  (217,746)
Change in fair value of derivative liability
  -
  58,000
  (29,000)
  19,000
Change in fair value of warrant liability
  -
  -
  -
  -
Loss on warrant settlement
  -
  -
  -
  (50,000)



  -






Total other income (expense)
  (42,541)
  (75,179)
  (195,509)
  (924,301)





Loss before income taxes
  (609,838)
  (540,846)
  (1,678,684)
  (2,192,827)





Provision for income taxes
  -
  -
  -
  -





Net loss
  (609,838)
  (540,846)
  (1,678,684)
  (2,192,827)





Less net loss attributable to non-controlling interest
  (1,074)
  -51363
  (4,655)
  (51,363)





Net loss attributable to NaturalShrimp Inc.
  (608,764)
  (489,483)
  (1,674,029)
  (2,141,464)





Amortization of beneficial conversion feature on PS
  (443,333)
  (380,000)
  (1,543,333)
  (380,000)
Dividends
  (172,291)
  -
  (317,083)
  -





Net loss available for common stockholders
$(1,224,388)
$(869,483)
$(3,534,445)
$(2,521,464)





EARNINGS PER SHARE (Basic and diluted)
$(0.00)
$(0.00)
$(0.01)
$(0.01)






  451,549,772
  345,260,292
  419,177,832
  326,835,226

	For the Three Months Ended						For the Six months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020

Sales	$	0		$	0		$	0		$	0

Operating expenses:
General and administrative		2,010,397			401,029			3,654,659			737,008
Research and development		196,872			79,550			196,872			79,550
Facility operations		172,431			68,271			411,756			79,643
Depreciation and amortization		404,272			8,896			758,775			19,677

Total operating expenses		2,783,972			557,746			5,022,062			915,878

Net loss from operations		(2,783,972	)		(557,746	)		(5,022,062	)		(915,878	)

Other income (expense):
Interest expense		(65,663	)		(29,490	)		(147,199	)		(59,516	)
Amortization of debt discount		0			0			(236,364	)		0
Financing costs		0			(2,643	)		(109,953	)		(64,452	)
Change in fair value of derivative liability		0						0			(29,000	)
Forgiveness of PPP loan		0						103,200			0

Total other income (expense)		(65,663	)		(32,133	)		(390,316	)		(152,968	)

Loss before income taxes		(2,849,635	)		(589,879	)		(5,412,378	)		(1,068,846	)

Provision for income taxes		0			0			0			0

Net loss		(2,849,635	)		(589,879	)		(5,412,378	)		(1,068,846	)

Less net loss attributable to non-controlling interest		0			(1,686	)		0			(3,581	)

Net loss attributable to NaturalShrimp Incorporated		(2,849,635	)		(588,193	)		(5,412,378	)		(1,065,265	)

Amortization of beneficial conversion feature on Preferred shares		0			(807,000	)		(817,376	)		(1,100,000	)
Redemption and exchange of Series D Preferred shares					0			(5,792,947	)		0
Dividends		0			(83,960	)		0			(228,752	)

Net loss available for common stockholders	$	(2,849,635	)	$	(1,479,153	)	$	(12,022,701	)	$	(2,394,017	)

EARNINGS PER SHARE (Basic and diluted)	$	(0.00	)	$	(0.00	)	$	(0.02	)	$	(0.01	)

WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and diluted)		603,775,024			451,549,772			594,359,747			419,177,832

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

Table of Contents

NATURALSHRIMP INCORPORATED ~~AND SUBSIDIARIES~~

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN ~~EQUITY~~

~~(Unaudited)~~

Series A Preferred stock

Series B Preferred stock

Common stock

Additional paid

Stock

Accumulated

Non-controlling

Total stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

in Capital

Payable

deficit

interest

deficit





Balance March 31, 2020
  5,000,000
$500
  2,250
$-
  379,742,524
$37,975
$43,533,243
  -
$(46,427,396)
$(82,101)
  (2,937,780)












Issuance of common stock upon conversion




  37,926,239
  3,793
  222,644



  226,437
Reclass of derivative liability upon conversion or redemption of related convertible debentures






  205,000



  205,00
Purchase of Series B Preferred shares


  1,250
  -


  1,250,000



  1,250,000
Beneficial conversion feature related to the Series B Preferred Shares






  293,000

  (293,000)

  -
Dividends payable on Series B PS








  (144,792)

  (144,792)
Series B PS Dividends in kind issued


  50
  -


  56,458



  56,458
Conversion of Series B PS to common stock


  (800)
  -
  33,569,730
  3,357
  (3,357)



  -
Common stock issued in Vista Warrant settlement




  17,500,000
  1,750
  608,250



  610,000
Reclass of warrant liability upon the cancellation of warrants under Vista Warrant settlement






  90,000



  90,000
Common stock issued to consultant




  1,250,000
  125
  61,125



  61,250












Net loss








  (477,072)
  (1,895)
  (478,967)











  -
Balance June 30, 2020
  5,000,000
$500
  2,750
$-
  469,988,493
$47,000
$46,316,363
$-
$(47,342,260)
$(83,996)
$(1,062,394)












Issuance of common stock upon conversion




  1,014,001
  101
  125,635



  125,736
Purchase of Series B Preferred shares


  1,250
  -


  1,250,000



  1,250,000
Beneficial conversion feature related to the Series B Preferred Shares


  65
  -


  807,000

  (807,000)

  -
Dividends payable on Series B PS








  (83,960)

  (83,960)
Series B PS Dividends in kind issued






  77,984



  77,984
Conversion of Series B PS to common stock


  (2,369)
  -
  58,521,249
  5,852
  (5,852)



  -
Common stock issued to consultant




  1,500,000
  150
  67,350



  67,500












Net loss








  (588,193)
  (1,686)
  (589,879)












Balance September 30, 2020
  5,000,000
$500
  1,696
$-
  531,023,743
$53,103
$48,638,480
$-
$(48,821,413)
$(85,682)
$(215,012)












Issuance of common stock upon conversion




  795,387
  80
  198,768



  198,848
Purchase of Series B Preferred shares


  750
  -


  750,000



  750,000
Beneficial conversion feature related to the Series B Preferred Shares






  235,000

  (235,000)

  -
Dividends payable on Series B Preferred Shares








  (88,333)

  (88,333)
Conversion of Series B Preferred Shares to common stock


  (526)
  -
  5,670,051
  567
  (567)



  -
Beneficial conversion feature related to the Series D Preferred Shares






  5,000,000



  5,000,000
Amortization of beneficial conversion feature related to Series D Preferred Shares








  (208,333)

  (208,333)
Commitment shares issued with Series D Preferred Shares




  6,000,000
  600
  (600)



  -
Common stock issued to consultant




  1,500,000
  150
  616,350



  616,500
Common stock to be issued as finder's fees related to asset acquisition







  135,775


  135,775












Net loss








  (608,764)
  (1,074)
  (609,838)












Balance December 31, 2020
  5,000,000
$500
  1,920
$-
  544,989,181
$54,500
$55,437,431
  135,775
$(49,961,843)
$(86,756)
$5,579,607

Series A Preferred stock

Series B Preferred stock

Common stock

Additional paid

Stock

Accumulated

Non-controlling

Total stockholders'

Shares

Amount

Shares

Amount

Shares

Amount

in Captial

Receivable

deficit

interest

deficit



Balance April 1, 2019
  5,000,000
  500

  301,758,293
  30,177
  38,335,782



  (41,223,445)

  (2,856,986)













Issuance of shares under equity financing agreement



  11,482,721
  1,148
  1,498,852





  1,500,000
Issuance of shares upon conversion



  3,000,000
  300
  29,700





  30,000
Beneficial conversion feature





  58,548





  58,548












  -
Net loss









  (795,270)
  -
  (795,270)













Balance June 30, 2019
  5,000,000
$500
  -
$-
  316,241,014
$31,625
$39,922,882
  -
$(42,018,715)
$-
$(2,063,708)












Purchase of Series B Preferred shares


  250
  -


  250,000



  250,000
Issuance of shares upon conversion




  14,000,000
  1,400
  138,600



  140,000
Issuance of shares under equity financing agreement




  3,275,060
  326
  273,675


  #
  274,001












Net loss








  (856,711)

  (856,711)












Balance September 30, 2019
  5,000,000
$500
  250
$-
  333,516,074
$33,351
$40,585,157

$(42,875,426)

$(2,256,418)
























Purchase of Series B Preferred shares


  1,250
  -


  1,250,000



  1,250,000
Issuance of shares upon conversion




  20,600,461
  2,060
  211,388



  213,448
Reclass of derivative liability upon conversion of related convertible debentures






  8,000



  8,000
Beneficial conversion feature related to the Series B Preferred Shares






  380,000

  (380,000)

  -











  -
Net loss








  (489,483)
  (51,363)
  (540,846)












Balance December 31, 2019
  5,000,000
$500
  1,500
$-
  354,116,535
$35,411
$42,434,545

$(43,744,909)

$(1,325,816)

SHAREHOLDERS’ DEFICIT

	Series A Preferred Stock				Series B Preferred Stock						Common Stock				Additional Paid			Stock		Accumulated			Non-controlling			Total Stockholders'
	Shares		Amount		Shares			Amount			Shares		Amount		In Capital			Payable		Deficit			Interest			Deficit

Balance March 31, 2021		5,000,000	$	500		607		$	0			560,745,180	$	56,076	$	56,649,491		$	136,000	$	(53,683,268	)	$	(87,830	)	$	3,070,969

Issuance of common stock upon conversion												1,329,246		133		421,353											421,486
Conversion of Series B PS to common stock						(262	)		0			3,144,000		314		(314	)										0
Conversion of Series D PS to common stock									0			428,572		43		(43	)										0
Exchange of Series D PS to Series E PS																					(3,258,189	)					(3,258,189	)
Sale of common shares and warrants for cash, less offering costs and commitment shares												35,772,729		3,577		17,273,546											17,277,123
Exercise of warrants related to the sale of common shares												1,100,000		110		10,890											11,000
Beneficial conversion feature related to the Series E Preferred Shares																3,269,505											3,269,505
Amortization of beneficial conversion feature related to Series E Preferred Shares																					(817,376	)					(817,376	)
Redemption of Series D Preferred shares																					(2,534,758	)					(2,534,758	)
Common shares to be issued for the acquisition of the non-controlling interest subsidiary's remaining equity																(3,087,830	)		2,000,000					87,830			(1,000,000	)
Common shares to be issued for Patent acquisition																			5,000,000								5,000,000
Common stock vested to consultants												125,000		13		48,738			24,900								73,651
Net loss																					(2,562,743	)					(2,562,743	)
Balance June 30, 2021		5,000,000	$	500		345		$	0			602,644,727	$	60,266	$	74,585,336		$	7,160,900	$	(62,856,334	)	$	0		$	18,950,668
Conversion of Series E PS to common stock												4,114,286		411		(411	)										0
Amortization of beneficial conversion feature related to Series E Preferred Shares																					(1,341,948	)					(1,341,948	)
Revision of dividends payable on Series B Preferred Shares (See Note 2)																					(182,639	)
Dividends payable on Preferred Shares																					(177,586	)
Common shares to be issued for Technical and Equipment Rights Agreement																			4,762,376								4,762,376
Common stock vested to consultants												62,500		6		24,369			24,900								49,275
Net loss																					(2,849,635	)					(2,849,635	)
Balance September 30, 2021		5,000,000	$	500		345		$	0			606,821,513	$	60,683	$	74,609,294		$	11,948,176	$	(67,408,142	)	$	0		$	19,210,511

Balance March 31, 2020		5,000,000	$	500		2,250		$	0			379,742,524	$	37,975	$	43,533,243			0	$	(46,427,396	)	$	(82,101	)		(2,937,780	)

Issuance of common stock upon conversion												37,926,239		3,793		222,644											226,437
Reclass of derivative liability upon conversion or redemption of related convertible debentures																205,000											205,000
Purchase of Series B Preferred shares						1,250			0							1,250,000											1,250,000
Beneficial conversion feature related to the Series B Preferred Shares																293,000					(293,000	)					0
Dividends payable on Series B PS																					(144,792	)					(144,792	)
Series B PS Dividends in kind issued						50			0							56,458											56,458
Conversion of Series B PS to common stock						(800	)		(-	)		33,569,730		3,357		(3,357	)										0
Common stock issued in Vista Warrant settlement												17,500,000		1,750		608,250											610,000
Reclass of warrant liability upon the cancellation of warrants under Vista Warrant settlement																90,000											90,000
Common stock issued to consultant												1,250,000		125		61,125											61,250
Net loss																					(477,072	)		(1,895	)		(478,967	)
Balance June 30, 2020		5,000,000	$	500		2,750		$	0			469,988,493	$	47,000	$	46,316,363		$	0	$	(47,342,260	)	$	(83,996	)	$	(1,062,394	)

Issuance of common stock upon conversion												1,014,001		101		125,635											125,736
Purchase of Series B Preferred shares						1,250			0							1,250,000											1,250,000
Beneficial conversion feature related to the Series B Preferred Shares									0							807,000					(807,000	)					0
Dividends payable on Series B PS																					(83,960	)					(83,960	)
Series B PS Dividends in kind issued						65										77,984											77,984
Conversion of Series B PS to common stock						(2,369	)		(-	)		58,521,249		5,852		(5,852	)										0
Common stock issued to consultant												1,500,000		150		67,350											67,500

Net loss																					(588,193	)		(1,686	)		(589,879	)
Balance September 30, 2020		5,000,000	$	500		1,696		$	(-	)		531,023,743	$	53,103	$	48,638,480		$	0	$	(48,821,413	)	$	(85,682	)	$	(215,012	)

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

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NATURALSHRIMP INCORPORATED ~~AND SUBSIDIARIES~~

CONDENSED ~~CONSOLIDATED~~Consolidated STATEMENTS OF CASH FLOWS

(Unaudited)

For the Nine Months Ended

December 31,
2020

December 31,
2019

CASH FLOWS FROM OPERATING ACTIVITIES

Net loss attributable to NaturalShrimp Inc.
$(1,674,029)
$(2,141,464)



Adjustments to reconcile net loss to net cash used in operating activities





Depreciation expense
  37,850
  41,521
Amortization of debt discount
  -
  515,204
Change in fair value of derivative liability
  29,000
  (19,000)
Default penalty
  41,112
  27,000
Net loss attributable to non-controlling interest
  (4,655)
  (51,363)
Shares issued for services
  745,250
  -



Changes in operating assets and liabilities:


Prepaid expenses and other current assets
  (649,326)
  (91,643)
Deposits
  -
  (10,133)
Accounts payable
  255,231
  56,002
Other accrued expenses
  143,793
  180,728
Accrued interest
  29,959
  -
Accrued interest - related parties
  32,096
  (10,560)



Cash used in operating activities
  (1,013,719)
  (1,503,708)



CASH FLOWS FROM INVESTING ACTIVITIES





Cash paid for machinery and equipment
  (1,481,558)
  (611,790)
Cash paid for asset acquisition with VeroBlue Farms, Inc.
  (5,000,000)
  -
Cash received from Insurance settlement
  917,210
  -
Cash paid for construction in process
  (1,562,380)
  (541,735)



CASH USED IN INVESTING ACTIVITIES
  (7,126,728)
  (1,153,525)



CASH FLOWS FROM FINANCING ACTIVITIES





Payments on bank loan
  (17,810)
  (5,989)
Payment of related party notes payable
  (48,000)
  -
     Repayment line of credit short-term
  5,413
  (110,788)
Proceeds from PPP loan
  103,200
  -
Proceeds from issuance of common shares under equity agreement
  -
  1,774,001
Proceeds from sale of Series B Convertible Preferred stock
  3,250,000
  1,500,000
Proceeds from convertible debentures
  -
  100,000
Proceeds from sale of Series D PS
  5,000,000
  (85,500)
Payments on convertible debentures, related party
  -
  (69,000)
Cash received in relation to Vista warrant settlement
  50,000
  -



Cash provided by financing activities
  8,342,803
  3,102,724



NET CHANGE IN CASH
  202,357
  445,491



CASH AT BEGINNING OF PERIOD
  109,491
  137,499



CASH AT END OF PERIOD
$311,848
$582,990



INTEREST PAID
$69,961
$170,911



Supplemental Disclosure of Non-Cash Investing and Financing Activities:


Shares issued upon conversion
$1,131,824
$383,448
Right of Use asset and Lease liability
$-
$275,400
Dividends in kind issued
$134,446
$-
Shares issued on Vista Warrant settlement
$610,000
$-
Note payable, related party, issued in place of Settlement Agreement
$383,604
$-
Notes payable, issued as consideration in VeroBlue Farms, Inc. asset acquisition
$5,000,000
$-
Shares payable, to be issued as finders fee in VeroBlue Farms, Inc. asset acquisition
$135,775
$-

	For the 6 Months Ended
	September 30, 2021			September 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss attributable to NaturalShrimp Incorporated	$	(5,412,378	)	$	(1,065,265	)

Adjustments to reconcile net loss to net cash used in operating activities

Depreciation and amortization expense		758,775			19,677
Amortization of debt discount		236,364			0
Change in fair value of derivative liability		0			29,000
Financing costs		109,953			0
Default penalty					41,112
Net loss attributable to non-controlling interest		0			(3,581	)
Forgiveness of PPP loan		(103,200	)		0
Shares issued for services		122,926			128,750

Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(281,729	)		(25,424	)
Accounts payable		(138,766	)		168,448
Other accrued expenses		(58,396	)		(174,926	)
Accrued expenses - related parties		600,000			0
Accrued interest		13,018			13,000
Accrued interest - related parties		0			18,096

Cash used in operating activities		(4,153,434	)		(851,113	)

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for machinery and equipment		(645,705	)		(742,388	)
Cash paid for patent acquisition with F & T		(2,000,000	)		0
Cash paid for acquisition of shares of NCI		(1,000,000	)		0
Cash paid for License Agreement		(2,350,000	)		0
Cash received from Insurance settlement		0			917,210
Cash paid for construction in process		(1,297,819	)		(1,738,661	)

Cash (used in) provided by investing activities		(7,293,524	)		(1,563,839	)

CASH FLOWS FROM FINANCING ACTIVITIES

Payments on bank loan		(4,114	)		(15,794	)
Payment of note payable		(48,000	)		(24,000	)
Payment of note payable, related party		(655,750	)		0
Repayment of short-term promissory note and lines of credit		(553,577	)		7,656
Proceeds from PPP loan		0			103,200
Proceeds from issuance of common shares		17,277,123			0
Shares issued upon exercise of warrants		11,000			0
Proceeds from sale of Series B Convertible Preferred stock		0			2,500,000
Payments on convertible debentures		(421,486	)		0
Redemption of Series D PS		(3,513,504	)		0
Cash received in relation to Vista warrant settlement		0			50,000

Cash provided by financing activities		12,091,692			2,621,062

NET CHANGE IN CASH		644,736			206,110

CASH AT BEGINNING OF PERIOD		155,795			109,491

CASH AT END OF PERIOD	$	800,531		$	315,601

INTEREST PAID	$	147,199		$	41,420

Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Shares issued upon conversion	$	421,486		$	336,437
Cancellation of Right of Use asset and Lease liability	$	275,400		$	0
Dividends in kind issued	$	0		$	134,443
Shares issued on Vista Warrant settlement	$	0		$	610,000
Shares to be issued as consideration for Patent acquisition	$	5,000,000		$	0
Shares to be issued as consideration for acquisition of remaining NCI	$	2,000,000		$	0
Note payable, related party, issued in place of Settlement Agreement	$	0		$	383,604

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

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NATURALSHRIMP INCORPORATED ~~AND SUBSIDIARIES~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND ~~NINE~~SIX MONTHS ENDED ~~DECEMBER 31, 2020~~

SEPTEMBER 30, 2021

(Unaudited)

NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS

Nature of the Business

NaturalShrimp Incorporated (“NaturalShrimp” or the “Company”), a Nevada corporation, is a biotechnology company and has developed a proprietary technology that allows it to grow Pacific White shrimp (Litopenaeus vannamei, formerly Penaeus vannamei) in an ecologically controlled, high-density, low-cost environment, and in fully contained and independent production facilities. The Company’s system uses technology which allows it to produce a naturally-grown shrimp “crop” weekly and accomplishes this without the use of antibiotics or toxic chemicals. The Company has developed several proprietary technology assets, including a knowledge base that allows it to produce commercial quantities of shrimp in a closed system with a computer monitoring system that automates, monitors and maintains proper levels of oxygen, salinity and temperature for optimal shrimp production. ~~Its initial~~The Company’s production facilities are located in La Coste, Texas and Webster City, Iowa.

was originally designed as an aquaculture facility, with the company having production issues. The Company ~~has two wholly-owned subsidiaries including NaturalShrimp Corporation, NaturalShrimp Global, Inc.~~began a modification process to convert the plant to produce shrimp, which will allow them to scale faster without having to build new facilities. The three Iowa facilities contain the tanks and ~~51%~~infrastructure that will be used to support the production of shrimp with the incorporation of the Company's patented EC platform technology. On May 19, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with F&T Water Solutions, LLC (“F&T”), for F&T’s owned shares of Natural Aquatic Systems, Inc. (“NAS”).

Prior to entering into the SPA, the Company owned fifty-one percent (51%) and F&T owned forty-nine percent (49%) of the issued and outstanding shares of common stock of NAS. After the SPA, NAS is a 100% owned subsidiary of the Company (See Note 8).

The Company has three wholly-owned subsidiaries including NaturalShrimp USA Corporation, NaturalShrimp Global, Inc. and NAS.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the ~~nine~~six months ended ~~December 31, 2020,~~September 30, 2021, the Company had a net loss available for common stockholders of approximately ~~$3,534,000. As of December 31, 2020,~~$12,023,000. At September 30, 2021, the Company had an accumulated deficit of approximately ~~$49,962,000~~$67,408,000 and a working capital deficit of approximately ~~$2,792,000.~~$5,119,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern, within one year from the issuance date of this filing. The Company’s ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the ~~nine~~six months ended ~~December 31, 2020,~~September 30, 2021, the Company received net cash proceeds of ~~$3,250,000~~approximately $17,277,000 from the sale of ~~3,250 Series B Preferred~~common shares ~~and $5,000,000 from the sale of 5,000 Series D Preferred shares.~~(See Note 11). Management believes that private placements of equity capital will be needed to fund the Company’s long-term operating requirements. The Company 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 our 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 our operations. The Company continues to pursue external financing alternatives to improve its working capital position. If the Company is unable to obtain the necessary capital, the Company may be unable to develop its facilities and enter in production.

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NOTE 2 – REVISION OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

In the Company’s previously issued financial statement for the first quarter of the current fiscal year for the three months ending June 30, 2021, the Company made an incorrect extinguishment of the Dividends payable in relation to the redemption of the Series D Preferred Stock as of April 15, 2021. However, it was later evaluated that the Dividends payable related to preferred shares that were still outstanding. The reclassification of the Dividends payable into Accumulated deficit was only presented as of June 30, 2021 on the Consolidated Balance Sheet, and did not impact the Consolidated Statements of Operations or the Consolidated Statement of Cash Flows.

In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements;” the Company evaluated the change and has determined that the related impact was not material to any previously presented financial statements. As such the Company is reporting the revision to dividends to that period in this Quarterly Report.

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial information as of and for the three ~~and nine~~ months ended ~~December 31,~~September 30, 2021 and 2020 ~~and 2019~~ has been prepared in accordance with GAAP in the U.S. for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the ~~three and nine~~six months ended ~~December 31, 2020~~September 30, 2021 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended March 31, ~~2020~~2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on June ~~26, 2020.~~

29, 2021.

The condensed consolidated balance sheet ~~as of~~at March 31, ~~2020~~2021 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements.

Consolidation

The consolidated financial statements include the accounts of NaturalShrimp Incorporated and its wholly-owned subsidiaries, NaturalShrimp Corporation, NaturalShrimp Global and ~~51 % owned~~ Natural Aquatic Systems, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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Basic and Diluted Earnings/Loss per Common Share

Basic and diluted earnings or loss per share (“EPS”) amounts in the consolidated financial statements are computed in accordance with 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. For the ~~nine~~six months ended ~~December 31, 2020,~~September 30, 2021, the Company had ~~a 1,920~~with Redeemable Convertible Preferred stock with approximately 9,842,000 underlying common shares, ~~of Series B PS whose approximately 12,308,000 underlying shares are convertible at the investors’ option at a conversion price based on the lowest market price over the last 20 trading days,~~ and ~~5,000 of Series D PS whose approximately 50,000,000 underlying shares are convertible at the investors’ option at a fixed conversion price of $0.10,~~10,000,000 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. For the ~~nine~~six months ended ~~December 31, 2019,~~September 30, 2020, the Company had approximately ~~$709,000~~$168,000 in ~~principal on~~ convertible debentures whose approximately ~~22,895,000~~1,560,000 underlying shares are convertible at the holders’ option at conversion prices ranging from ~~$0.01~~$0.124 to ~~$0.30~~$0.25 for fixed conversion rates ~~and 57% - 60% of the defined trading price for variable conversion rates and approximately 848,000 warrants~~ ~~with an exercise price of 45% of the market price of the Company’s common stock,~~ which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

Fair Value Measurements

ASC Topic 820, “Fair Value Measurement”, requires that certain financial instruments be recognized at their fair values at our balance sheet dates. However, other financial instruments, such as debt obligations, are not required to be recognized at their fair values, but GAAP provides an option to elect fair value accounting for these instruments. GAAP requires the disclosure of the fair values of all financial instruments, regardless of whether they are recognized at their fair values or carrying amounts in our balance sheets. For financial instruments recognized at fair value, GAAP requires the disclosure of their fair values by type of instrument, along with other information, including changes in the fair values of certain financial instruments recognized in income or other comprehensive income. For financial instruments not recognized at fair value, the disclosure of their fair values is provided below under “Financial Instruments.”

Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred.

The Company did not have any Level 1 or Level 2 assets and liabilities ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020.~~

2021.

The Derivative and Warrant liabilities are Level 3 fair value measurements.

~~The following is a summary of activity of~~ There were no Level 3 ~~liabilities~~fair value measurements during the ~~nine~~three months ended ~~December 31, 2020 and 2019:~~

~~Derivatives~~

2020

2019

Derivative liability balance at beginning of period
$176,000
$157,000
Reclass to equity upon conversion or redemption
  (205,000)
  (8,000)
Change in fair value
  29,000
  (19,000)
Balance at end of period
$-
$130,000

As of December 31, 2019, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock of 98.46%, and the various estimated reset exercise prices weighted by probability.

~~Warrant liability~~

2020

2019

Warrant liability balance at beginning of period
$90,000
$93,000
Reclass to equity upon cancellation or exercise
  (90,000)
  -
Change in fair value
  -
  -
Balance at end of period
$-
$93,000

As of December 31, 2019, the fair value of the warrant liability was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock of 281.4%.

September 30. 2021.

Financial Instruments

The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “Financial Instruments”. The carrying amount of these financial instruments, with the exception of discounted debt, as reflected in the consolidated balance sheets approximates fair value.

Cash and Cash Equivalents

For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020.~~

2021.

Concentration of Credit Risk

The Company maintains cash balances at two financial ~~institution.~~institutions. Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of ~~December 31, 2020~~ September 30, 2021 the Company’s cash balance exceeded FDIC coverage. As of March 31, ~~2020,~~2021, the Company’s cash balance did not exceed FDIC coverage. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible.

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Fixed Assets

Equipment is carried at historical value or cost and is depreciated using the straight-line method over the estimated useful lives of the related assets. Depreciation on buildings is computed using the straight-line method, while depreciation on all other fixed assets is computed using the Modified Accelerated Cost Recovery System (MACRS) method, which does not materially differ from GAAP. Estimated useful lives are as follows:

Buildings	~~27.5 –~~ 39 years
~~Other Depreciable Property~~ Machinery and Equipment	5 7 – 10 years
Vehicles	10 years
Furniture and Fixtures	3 – 10 years

Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations.

The consolidated statements of operations reflect depreciation expense of approximately $18,000 and $38,000 for the three and nine months ended December 31, 2020 and $16,000 and $42,000 for the three and nine months ended December 31, 2019, respectively.

Commitments and Contingencies

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. This ASU (1) simplifies the accounting for convertible debt instruments and convertible preferred stock by removing the existing guidance in ASC 470-20, Debt: Debt with Conversion and Other Options, that requires entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock; (2) revises the scope exception from derivative accounting in ASC 815-40 for freestanding financial instruments and embedded features that are both indexed to the issuer’s own stock and classified in stockholders’ equity, by removing certain criteria required for equity classification; and (3) revises the guidance in ASC 260, Earnings Per Share, to require entities to calculate diluted earnings per share (EPS) for convertible instruments by using the if-converted method. In addition, entities must presume share settlement for purposes of calculating diluted EPS when an instrument may be settled in cash or shares. For SEC filers, excluding smaller reporting companies, ASU 2020-06 is effective for fiscal years beginning after December 15, 2021 including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. For all other entities, ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period. The Company is currently evaluating the impact that ASU 2020-06 may have on its consolidated financial statements and related disclosures.

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As of ~~December 31, 2020,~~September 30, 2021, 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.

Management’s Evaluation of Subsequent Events

The Company evaluates events that have occurred after the balance sheet date of ~~December 31, 2020,~~September 30, 2021, through the date which the consolidated financial statements were issued. Based upon the review, other than described in Note 1215 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

~~NOTE 3 – ASSET ACQUISITION~~

On December 15, 2020, the Company entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation (“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). Transport and Iowa’s First were wholly-owned subsidiaries of VBF. The agreement called for the Company to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems and other improvements located on such real property) of Iowa’s First. The consideration was $10,000,000, consisting of $5,000,000 in cash, paid at closing on December 17, 2020, (ii) $3,000,000 payable in 36 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date, (“Promissory Note A”), and (iii) $2,000,000 payable in 48 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date (“Promissory Note B”). The Company also agreed to issue 500,000 shares of common stock as a finder’s fee, which would be considered as transaction fees in relation to the asset acquisition, with a fair value of $135,000 based on the market value of the common stock as of the closing date of the acquisition (Note 8).

The facility was originally designed as a farming facility, with the company never beginning production. The Company’s plan is to begin a modification process to convert the plant to produce shrimp, which will allow them to scale faster without having to build new facilities. The three Iowa facilities contain the tanks and infrastructure that will be used to support the production of shrimp with the incorporation of the Company's patented EC platform technology.

The Company determined the asset acquisition did not qualify as a business combination as not only did the Company only acquire certain listed tangible assets, but VBF did not fall under the definition of a business in accordance with ASU 2017-01. VBF was an early stage company that had not yet generated revenue, and it did not yet include an input and a substantive process that will afford the Company the ability to create an output. Additionally, the acquisition does not include an organized workforce. Instead, the assets acquired are to be used by the Company as a location in which to apply their own patented process and create their output, the production of shrimp.

~~The $10,136,000 consideration was allocated to the assets acquired based on their relative fair value:~~

Equipment
$7,014,000
  69.2%
Vehicles
  202,000
  2.0%
Buildings
  2,797,000
  26.6%
Land
  122,000
  1.2%

$10,135,000
  100%

NOTE 4 – FIXED ASSETS

A summary of the fixed assets as of ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020~~2021 is as follows:

December 31,
2020

March 31,
2020

Land
$323,564
$202,293
Buildings
  3,338,644
  509,762
Machinery and equipment
  8,686,256
  221,987
Autos and trucks
  221,199
  19,063

  12,569,663
  953,105
Accumulated depreciation
  (283,147)
  (245,297)
Fixed assets, net
$12,286,516
$707,808

	September 30, 2021			March 31, 2021
Land	$	324,293		$	324,293
Buildings		5,002,712			4,702,063
Machinery and equipment		7,897,554			7,580,873
Autos and trucks		247,356			213,849
		13,471,915			12,891,078
Accumulated depreciation		(1,201,928	)		(4,52158	)
Fixed assets, net	$	12,269,987		$	12,236,557

The ~~fixed assets include~~consolidated statements of operations reflect depreciation expense of approximately $307,000 and $9,000 and $661,000 and $20,000 for the three and six months ended September 30, 2021 and 2020, respectively.

NOTE 5 – PATENT ACQUISITION

On May 19, 2021, the Company entered into a Patents Purchase Agreement (the “Patents Agreement”) with F&T. The Company and F&T had previously jointly developed and patented a water treatment technology used or useful in growing aquatic species in re-circulating and enclosed environments (the “Patent”) with each party owning a fifty percent (50%) interest. Upon the closing of the Patents Agreement, the Company would purchase F&T’s interest in the Patent, F&T’s 100% interest in a second patent associated with the first Patent issued to F&T in March 2018, and all other intellectual property rights owned by F&T for a purchase price of $2,000,000 in cash and issue 9,900,990 shares of the Company’s common stock with a market value of $0.505 per share for a total fair value of $5,000,000, for a total acquisition price of $7,000,000. The Company paid the cash purchase price on May 20, 2021 and the closing of the Patents Agreement took place on May 25, 2021. As of September 30, 2021, the shares of common stock have not been issued and are therefore classified in Shares payable.

In accordance with ASC 805-10-55-5A, as substantially all the assets ~~purchased~~acquired are concentrated in a single identifiable asset, the patents, the acquisition has been determined to not be considered a business combination but an asset acquisition. The consideration will be allocated to the two patents, which were both approved in December, 2018, and will be amortized through the earliest of their useful life or December, 2038. Amortization over the next five years is expected to be $390,000 per year, for a total of $1,950,000. Amortization expense was $97,500 and $146,500 for the three and six months ended September 30, 2021

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NOTE 6 – RIGHTS AGREEMENTS

On August 25, 2021, the Company, through their 100% owned subsidiary NAS, entered into an Equipment Rights Agreements with Hydrenesis-Delta Systems, LLC (Hydrenesis-Delta") and a Technology Rights Agreement, in a sub-license agreement with Hydrenesis Aquaculture LLC ("Hydrenesis-Aqua"), The Equipment Rights involve specialized and proprietary equipment used to produce and control, dose, and infuse Hydrogas® and RLS® into both water and other chemical species, while the Technology sublicense pertains to the rights to Hydrogas® and RLS®. Both Rights agreements are for a 10 year term, which shall automatically renew for ten year successive terms. The term can be terminated by written notice by mutual consent, or by either party upon a breach of contract, insolvency or filing of bankruptcy. The agreements accord the exclusive rights to purchase or distribute the technology, or buy or rent the equipment, in the ~~asset acquisition~~Industry Sector, which is the primary business and revenue stream generated from indoor aquaculture farming of any species in the Territory, defined as anywhere in the world except for the countries in the Gulf Corporation Council.

The consideration for the Equipment Rights consists of the sum of $2,500,000, with $500,000 in cash paid at closing, and $500,000 to be paid on ~~December 15, 2020,~~the first day of the next calendar quarter, plus $250,000 to be paid on the first day of each successive calendar quarter until the amount is paid in ~~Note 3.~~

~~On March 18, 2020,~~full.

Per the ~~Company’s research~~Terms set forth in the Technology Rights Agreement, the consideration is defined as the sum of $10,000,000, consisting of $2,500,000 in cash at closing, and ~~development plant~~an additional $1,000,000 within 60 days after closing, and $6,500,000 worth of unrestricted common shares of stock in ~~La Coste, Texas was destroyed~~the parent company, NSI, at a stipulated share price of $0.505. Determined with this stipulated price, 12,871,287 shares are required to be issued. Based on the market price on August 25, 2021 of $0.37, is the fair value of the shares is $4,762,376, which results in a fair value total consideration of $8,262,376. As of September 30, 2021, the shares are not yet issued and are therefore classified in Shares payable. The common shares are covered by a ~~fire.~~ Lock-Up ad Leak-Out Agreement.

The ~~Company believes that it was caused by a natural gas leak, but the fire was so extensive that the cause was undetermined. The majority~~terms of the ~~damage was~~Agreements set forth that NAS will pay to ~~their pilot production plant, which destroyed~~Hydrenesis 12.5% royalty fees. The royalties are calculated per all customer or sub-license revenue generated by NAS, NSI or any Affiliate, from the sale or rental of either the Technologies or Hydrenesis Equipment, based on gross revenue less returns, rebates and sales taxes. There are sales milestones for exclusivity, whereby if NAS fails to achieve a ~~large portion~~sales milestone starting in Year 3, the exclusivity rights in both of the ~~fixed assets~~Rights agreements shall revert to non-exclusive rights. To maintain the exclusivity for the subsequent year, the Company may pay the amount of the ~~Company.~~ royalty fees that would have been due if the Sales Milestone had been meet in the current year.

The property destroyed had a net book value of $1,909,495, which was written off and recognized as Loss due to fire during the year ended March 31, 2020. The Company filed a claim with their insurance company, and as of June 2, 2020, received all the proceeds, which totaled $917,210. The Company is currently purchasing replacement fixed assets and reconstructing their pilot production plant.

Sales Milestones are:

Year 3	$	250,000 Royalty
Year 4	$	375,000 Royalty
Year 5	$	625,000 Royalty
Year 6	$	875,000 Royalty
All subsequent years	$	1,000,000 Royalty

NOTE 57 – SHORT-TERM NOTE AND LINES OF CREDIT

The Company has a working capital line of credit with Extraco Bank. On April 30, 2020, the line of credit was renewed with a maturity date of April 30, 2021 for a balance of $372,675. The line of credit ~~bears~~bore an interest rate of 5.0%, that iswas compounded monthly and to be paid with the principal on the maturity date. The line of credit ~~matures~~matured on April 30, 2021 and iswas secured by certificates of deposit and letters of credit owned by directors and shareholders of the Company. On May 5, 2021, the Company paid off the line of credit. The balance of the line of credit iswas $372,675 at ~~both December 31, 2020 and~~ March 31, ~~2020.~~

2021.

The Company also ~~has~~had an additional line of credit with Extraco Bank for $200,000, which was renewed with a maturity date of April 30, 2021, for a balance of $177,778. The ~~lines~~line of credit ~~bear~~bore interest at a rate of 5%, that iswas compounded monthly and to be paid with the principal on the maturity date. The line of credit iswas secured by certificates of deposit and letters of credit owned by directors and shareholders of the Company. On April 15, 2021, the line of credit was paid off in full. The balance of the line of credit was $177,778 at ~~both December 31, 2020 and~~ March 31, ~~2020.~~

2021.

The 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 29.15% as of ~~December 31, 2020.~~September 30, 2021. The line of credit is unsecured. The balance of the line of credit was $9,580 at both ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020.~~

2021.

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The 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 13.25% as of ~~December 31, 2020.~~September 30, 2021. The line of credit is secured by assets of the Company’s subsidiaries. The balance of the line of credit is $10,237 ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020.~~

2021.

NOTE 68 – BANK ~~LOAN~~

LOANS

On April 10, 2020, the Company obtained a Paycheck Protection Program (“PPP”) loan in the amount of $103,200 pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Interest on the loan is at the rate of 1% per year, and all loan payments are deferred for nine months, at which time the balance is payable in 18 monthly installments if not forgiven in accordance with the CARES Act and the terms of the promissory note executed byOn April 16, 2021, the Company ~~in connection with~~filed for the ~~loan.The promissory note contains events~~forgiveness of ~~default and other provisions customary for a loan of this type.As required, the Company intends to use~~ the PPP loan ~~proceeds~~and was approved for ~~payroll, healthcare benefits, and utilities.The program provides that the use~~forgiveness of ~~PPP Loan amount shall be limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act.~~

such loan on April 26, 2021.

On January 10, 2017, the Company entered into a promissory note with Community National Bank for $245,000, at an annual interest rate of 5% and a maturity date of January 10, 2020 (the “CNB Note”). The CNB Note is secured by certain real property owned by the Company in LaCoste, Texas, and is also personally guaranteed by the Company’s President, as well as certain shareholders of the Company. On January 10, 2020, the loan was modified, with certain terms amended. The modified note is for the principal balance of $222,736, with initial monthly payments of $1,730 through February 1, 2037, when all unpaid principal and interest will be due and payable. The loan has an initial yearly rate of interest of 5.75%, which may change beginning on February 1, 2023 and each 36 months thereafter, to the Wall Street Journal Prime Rate plus 1%, but never below 4.25%. The monthly payments may change on the same dates as the interest changes. The Company is also allowed to make payments against the principal at any time. The balance of the CNB Note is ~~$216,931 as of December 31, 2020, $8,438~~$210,738 at September 30, 2021, $10,380 of which was in current liabilities, and ~~$222,736 as of~~$214,452 at March 31, ~~2020,~~2021, of which ~~$8,904~~$8,725 was in current liabilities.

On November 3, 2015, the Company entered into a short-term note agreement with Community National Bank for a total value of $50,000, with a maturity date of December 15, 2017. On July 18, 2018, the short-term note was replaced by a promissory note for the outstanding balance of $25,298, which bears interest at 8% with a maturity date of July 18, 2021. The note is guaranteed by an officer and director. The note was paid off in full in July of 2021. The balance of the note ~~as of December 31, 2020 and~~at March 31, ~~2020~~2021 was ~~$5,413 and $12,005, respectively.~~

$3,124.

Maturities on Bank loan is as follows:

~~Years ended:~~
~~March 31, 2021~~	$~~103,782~~
~~March 31, 2022~~	~~20,730~~
~~March 31, 2023~~	~~9,240~~
~~March 31, 2024~~	~~9,786~~
~~March 31, 2025~~	~~10,364~~
~~Thereafter~~	~~171,642~~
	$~~325,544~~

Years ended:
March 31, 2022	$	10,380
March 31, 2023		20,760
March 31, 2024		20,760
March 31, 2025		20,760
March 31, 2025		20,760
Thereafter		117,318
	$	210,738

NOTE 79 – CONVERTIBLE DEBENTURES

~~August 24, 2018~~

February 26, 2021 Debenture

date of issuance. The note is convertible into shares of the Company’s common stock at a price per share equal to 57% of the lowest closing bid price for the last 20 days. The discount is increased an additional 10%, to 47%, upon a “DTC chill". The conversion feature meets the definition of a derivative and therefore requires bifurcation and will be accounted for as a derivative liability.

During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at amounts ranging from 130% to 145% of the principal and accrued interest balance, based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance, of the debenture. On January 10, 2019 the outstanding principal of $55,000 and accrued interest of $1,974 was purchased from the noteholder by a third party, for $82,612. The additional $25,638 represents the redemption amount owing to the original noteholder and increases the principal amount due to the new noteholder and was recognized as financing cost.

During the fourth fiscal quarter of 2019, in three separate conversions, the holder converted $57,164 of principal into 9,291,354 shares of common stock of the Company. As a result of the conversions the derivative liability related to the debenture was remeasured immediately prior to the conversions with an overall increase in the fair value of $65,000 recognized, with the fair value of the derivative liability related to the converted portion, of $171,000 being reclassified to equity. The key valuation assumptions used consist, in part, of the price of the Company’s common stock on the dates of conversion, of $0.28 to $0.40; a risk-free interest rate of 2.36% to 2.41% and expected volatility of the Company’s common stock, of 343.98% to 374.79%, and the various estimated reset exercise prices weighted by probability.

On May 5, 2020, the remaining outstanding balance of $29,057 was converted into 2,039,069 shares of common stock of the Company, at a conversion rate of $0.014. As a result of the conversion the derivative liability related to the debenture was remeasured immediately prior to the conversions with an overall increase in the fair value of $8,000 recognized, with the fair value of the derivative liability related to the converted portion, of $30,000 being reclassified to equity. The key valuation assumptions used consist, in part, of the price of the Company’s common stock on the dates of conversion of $0.03; a risk-free interest rate of 0.13% and expected volatility of the Company’s common stock, of 158.29%, and the various estimated reset exercise prices weighted by probability.

~~September 14, 2018 Debenture~~

On September 14, 2018, the Company entered into a 12% convertible promissory note for $112,500, with an original issuance discount (OID) of $10,250, which matures on March 14, 2019. There is a right of prepayment in the first 180 days, but there is no right to repay after 180 days. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company has not maintained the required share reservation under the terms of the note agreement. The Company believes it has sufficient available shares of the Company’s common stock in the event of conversion for these notes. The interest rate increases to a default rate of 24% for events as set forth in the agreement, including if the market capitalization is below $5 million, or there are any dilutive issuances. There is also a cross default provision to all other notes. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. Additionally, If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. Additionally, if the note is not repaid by the maturity date the principal balance increases by $15,000. The market capitalization has been below $5 million and therefore the note was in default, however, the holder has issued a waiver to the Company on this default provision.

The note is convertible into shares of the Company’s common stock at a variable conversion rate that is equal to the lesser of 60% of the lowest trading price for the last 20 days prior to the issuance of the note or 60% of the lowest market price over the 20 days prior to conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. There are additional 10% adjustments to the conversion price for events set forth in the agreement, including if the conversion price is less than $0.01, if the Company is not DTC eligible, the Company is no longer a reporting company, or the note cannot be converted into free trading shares on or after nine months from issue date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability.

~~On December 13, 2018 the holder converted $11,200 of principal into 4,000,000 shares of common stock of the Company.~~

On January 25, 2019 the outstanding principal of $101,550, plus an additional $81,970 of default principal and $13,695 in accrued interest of the note, resulting in a new balance of $197,215, was purchased from the noteholder by a third party, who extended the maturity date.

On three separate dates during the first quarter of the fiscal year ending March 31, 2021, the remaining outstanding balance was converted into 35,887,170 shares of common stock of the Company, at a conversion rate of $0.006. As a result of the conversion the derivative liability related to the debenture was remeasured immediately prior to the conversions with an overall increase in the fair value of $8,000 recognized, with the fair value of the derivative liability related to the converted portion, of $30,000 being reclassified to equity. The key valuation assumptions used consist, in part, of the price of the Company’s common stock on the dates of conversion of $0.03; a risk-free interest rate of 0.13% and expected volatility of the Company’s common stock, of 158.29%, and the various estimated reset exercise prices weighted by probability.

~~March 1, 2019 Debenture~~

On March 1, 2019, the Company entered into a 10% convertible promissory note for $168,000, with an OID of $18,000, for a purchase price of $150,000, which originally matured on November 1, 2019. The maturity date has been extended to September 1, 2020, with the noteholders waiving the default penalties through December 31, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 100% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion ~~price~~rate of ~~$0.25. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable~~$0.36. The conversion rate ~~that is 70% of the lowest trading prices during the 20 days prior~~shall change to ~~conversion. The fixed conversion price shall reset~~$0.10 upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in ASC 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. 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 on the date of funding as compared to the conversion price, determined there was a $134,000 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. There was not any amortization expense recognized during the three and nine months ended December 31, 2020, as ~~the beneficial conversion feature was fully amortized as of September 30, 2019. The amortization expense recognized during the~~ ~~three and nine months ended December 31, 2019~~ ~~amounted to approximately $50,000. On December 21,~~ ~~2020, the outstanding balance of $168,000 and accrued interest of $30,847 was converted into 795,387 shares of common stock of the Company, at a conversion rate of $0.25.~~

~~April 17, 2019 Debenture~~

On April 17, 2019, the Company entered into a 10% convertible promissory note for $110,000, with an OID of $10,000, for a purchase price of $100,000, which matures on January 23, 2020. The maturity date has been extended until September 1, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3 (a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.124. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities.default. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in ASC 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. 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 on the date of funding as compared to the conversion price, determined there was an approximately ~~$59,000~~$164,000 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. ~~There was not any~~The amortization ~~expense recognized during the three and nine months ended December 31, 2020, as~~ of the beneficial conversion feature was ~~fully amortized as~~$27,273 and the original issuance discount was $20,000, for the year ended March 31, 2021. On April 16, 2021, the Company settled the convertible note, consisting of ~~December 31, 2019.~~$720,000 in principal, approximately $13,000 in accrued interest, and approximately $110,000 in redemption fee, for a total of $842,972. The ~~amortization expense recognized during~~Company paid $421,486 in cash, and settled the ~~three~~remaining balance through the conversion into the issuance of 1,303,982 common shares.

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NOTE 10 – ACQUISITION OF NON-CONTROLLING INTEREST

On May 19, 2021, the Company entered into a Securities Purchase Agreement (“SPA”) with F&T, for the shares owned by F&T of NAS. Upon the closing of the SPA, the Company purchased the 980,000 shares of NAS’ common stock owned by F&T for a total acquisition price of $3,000,000, consisting of $1,000,000 paid in cash and ~~nine months ended December 31, 2019 amounted~~3,960,396 shares of the Company’s common stock to ~~approximately $20,000. On~~be issued at a market value of $0.505 per share for a total fair value of $2,000,000,. The Company paid the cash purchase price on May 20, 2021 and the purchase of the NAS shares closed on May 25, 2021. As of September ~~14, 2020,~~30, 2021, the ~~outstanding balance~~shares of ~~$110,000 was converted~~common stock have not been issued and are therefore classified in Shares payable. Prior to entering into ~~1,014,001~~the SPA, the Company owned fifty-one percent (51%) and F&T owned forty-nine percent (49%) of the issued and outstanding shares of common stock of NAS, and therefore, NAS was included in the consolidated financial statements of the Company, atwith F&T’s ownership accounted for as a ~~conversion rate~~non-controlling interest. After the SPA, the non-controlling interest was no longer in existence and NAS became a 100% owned subsidiary of ~~$0.124.~~

the Company. In accordance with ASC 810-10-45, when the parent’s ownership interest changes while the parent retains its controlling interest in a subsidiary, it is accounted for as an equity transaction and there is no gain or loss recognized in the consolidated net loss. The difference between the fair value of the consideration paid and the amount of the non-controlling interest as of the acquisition of NAS shares held by F&T is recognized in equity attributable to the Company. The carrying amount of the non-controlling interest prior to the acquisition was a deficit of $87,830, and as a result, a deduction of $3,087,830 was recognized in additional paid in capital in the Consolidated Statement of Changes in Equity, in the three months ended June 30, 2021.

NOTE 811 – STOCKHOLDERS’ DEFICIT

Preferred Stock

As of ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020,~~2021, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.0001. Of this amount, 5,000,000 shares of Series A preferred stock are authorized and outstanding, 5,000 shares Series B preferred stock are authorized and ~~1,920~~345 and 607 outstanding, ~~and 20,000~~respectively, 5,000 shares Series D preferred stock are authorized and 0 and 6,050 outstanding, respectively and 5,000 shares Series E preferred stock are authorized and 2,540 and 0 outstanding, respectively.

Series E Preferred Stock

On ~~December 16, 2020,~~April 14, 2021, the Board authorized the issuance of ~~20,000 preferred~~10,000 shares ~~to be designated as~~of the Company’s Series DE Preferred Stock (“and has filed a Certificate of Designation of Preferences of the Series ~~D PS”).~~E Convertible Preferred Stock with the State of Nevada. The shares of Series ~~D PS~~E Preferred Stock have ~~a par value of $0.0001,~~ a stated value of $1,200 per share and ~~will vote together with the~~are convertible into shares of common stock ~~on an as-converted basis. In addition, as further described in~~at the election of the holder of the Series ~~D Designation, as long as~~E Preferred Stock at any time at a price of ~~the~~$0.35 per share, subject to adjustment (the “Conversion Price”). The Series E Preferred Stock is convertible into that number of shares of common stock determined by dividing the Series ~~D Preferred Stock are outstanding,~~E Stated Value (plus any and all other amounts which may be owing in connection therewith) by the ~~Company will not take~~Conversion Price, subject to certain ~~corporate actions without the affirmative vote at a meeting (or the written consent with or without a meeting) of the majority of the shares of Series D Preferred Stock then outstanding.~~beneficial ownership limitations. Each holder of Series DE Preferred Stock shall be entitled to receive, with respect to each share of Series DE Preferred Stock then outstanding and held by such holder, dividends at the rate of twelve percent (12%) per annum, ~~(the “Preferred Dividends”). Dividends may be paid in cash or in shares~~payable quarterly. Each share of Series E Preferred Stock ~~at the discretion of the Company.~~

The Series D PS are convertible into Common Stock at the election of the holder of the Series D PS at any time following five days after a qualified offering (defined as an offering of common stock for an aggregate price of at least $10,000,000 resulting in the listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange) at a 35% discount to the offering price, or, if a qualified offering has not occurred, at a price of $0.10 per share, subject to adjustment based on several situations, including future dilutive issuances and a Fundamental Transaction.

~~The Series D PS~~ shall be redeemed by the ~~Corporation~~Company on the date that is no later than one calendar year from the date of its issuance. The Series D PS are also redeemable at the Company's option, at percentages ranging from 115% to 125% for the first 180 days, based on the passage of time. The ~~Company shall redeem~~holders of Series E Preferred Stock rank senior to the Common Stock and Common Stock Equivalents (as defined in the Series ~~D PS in cash~~E Designation) with respect to payment of dividends and rights upon ~~a three business days prior notice to~~liquidation and will vote together with the ~~holder or~~holders of the holder may convert the Series D PS within such three business days period prior to redemption. Additionally, the holder shall have the right to either redeem for cash or convert the Preferred Stock into Common Stock ~~within three business days following the consummation~~on an as-converted basis, subject to beneficial ownership limitations, on each matter submitted to a vote of holders of Common Stock (whether at a ~~qualified offering. The Series D PS are also redeemable at the holder’s option, upon the occurrence~~meeting of a triggering event which includes a change of control, bankruptcy, and the inability to deliver shares of common stock requested under conversion notices. The triggering redemption amount is 150% of the stated value.

shareholders or by written consent). Upon ~~the~~any liquidation, dissolution ~~liquidation~~ or ~~winding up~~winding-up of the Company, ~~whether voluntary or involuntary,~~ the holders ~~of Series D PS~~ shall be entitled to receive out of the assets of the Company an amount equal to the stated value, plus any accrued and unpaid dividends and any other fees or liquidated damages then due and owing for each share of ~~Series D PS~~Preferred Stock, before any ~~payment~~distribution or ~~distribution~~payment shall be made to the holders of any Junior ~~securities.~~

AsSecurities, and if the ~~Series D PS has a conditional redemption date, as it is convertible, it is classified~~assets of the Corporation shall be insufficient to pay in ~~mezzanine and, it is considered~~full such amounts, then the entire assets to be an debt host instrument. The conversion price, unless and until there is a qualified offering, is a fixed price and as such the conversion feature is not required to be bifurcated and accounted for as a derivative liability. The Company will analyze the conversion feature under ASC 470-20, “Debt with conversion and other options”, at each issuance date and based on the market price of the common stock of the Company on the commitment date as compareddistributed to the ~~conversion price, determine if there is a beneficial conversion feature to recognize.~~

~~The Series D Designation are subject to certain Registration Rights, whereby if~~holders shall be ratably distributed among the Corporation does not complete a market listing to the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing) within one hundred twenty (120) calendar days from the issuance of the Series D Preferred Stock, the Company will, within ten (10) calendar days, file a registration statement covering the shares of Common Stock underlying the Series D Preferred Shares. Additionally, the Company will include the shares of Common Stock underlying the Series D Preferred Sharesholders in ~~any registration statement which is being filed by the Corporation’s existing investment banker, provided, that said registration statement is not yet effective~~accordance with the ~~SEC and provided~~respective amounts that ~~the Company receives the prior written approval of said investment banker.~~

would be payable on such shares if all amounts payable thereon were paid in full.

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Series B Preferred Equity Offering

On September 17, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with GHS Investments LLC, a Nevada limited liability company (“GHS”) for the purchase of up to 5,000 shares of Series B PS at a stated value of $1,200 per share, or for a total net proceeds of $5,000,000 in the event the entire 5,000 shares of Series B PS are purchased. ~~During the nine months ended December 31, 2020~~

On April 8, 2021, the Company ~~received $3,250,000 for the issuance of 3,250~~converted 262 Series B ~~PS. During the nine months ended December 31, 2019, the Company received $1,500,000 under the SPA.~~

~~During the nine months ended December 31, 2020, the Company has converted 3,554 Series B PS plus 141 Series B PS dividends-in-kind~~ into ~~97,761,030~~3,144,000 shares of the Company’s common stock.

~~Series D Preferred Equity Offering~~

Securities Purchase Agreement

On ~~December 18, 2020,~~April 14, 2021, the Company entered into a securities purchase ~~agreements~~agreement (the “Purchase Agreement”) with an accredited investor (the “Purchaser”), for the offering (the “Offering”) of (i) $5,000,000 worth of common stock (“Shares”), par value $0.0001 per share, of the Company (“Common Stock”); at a per share purchase price of $0.55 per Share (ii) common stock purchase warrants (“Warrants”) to purchase up to an aggregate of 10,000,000 shares of Common Stock, which are exercisable for a period of five years after issuance at an initial exercise price of $0.75 per share, subject to certain adjustments, as provided in the Warrants; and (iii) 1,000,000 shares of Common Stock (the “Commitment Shares”). Pursuant to the Purchase Agreement, on April 15, 2021, the Company received net proceeds of $4,732,123 from the Purchaser.

Further, pursuant to the terms of the Purchase Agreement, from the date thereof until the date that is the twelve-month anniversary of the closing of the Offering, 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”), each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

Pursuant to the Purchase Agreement, on May 5, 2021, the Purchaser purchased an additional 15,454,456 shares of common stock at a per share purchase price of $0.55 per share (the “Second Closing”), for net proceeds of approximately $8,245,000.

Additionally, on May 20, 2021, the Purchaser purchased an additional 2,727,272 shares of common stock at a price per share of $0.55 per share (“Third Closing”), for net proceeds of approximately $1,455,000.

GHS ~~Investments LLC, Platinum Point Capital LLC~~Purchase Agreement

On June 28, 2021, the Company entered into a securities purchase agreement with GHS (the “June GHS Purchase Agreement”) for the offering of up to (i) $3,000,000 worth of common stock of the Company at a per share purchase price of $0.40 and ~~BHP Capital NY (collectively,~~(ii) $11,000 worth of prefunded common stock purchase warrants to purchase an aggregate of up to 1,100,000 shares of common stock, which are exercisable upon issuance and shall not expire prior to exercise, and are subject to certain adjustments, as provided in the ~~“Purchaser”~~warrants. Pursuant to the June GHS Purchase Agreement, on June 28, 2021, GHS purchased 7,500,000 shares of common stock and 1,100,000 shares of common stock underlying the prefunded warrants, for an aggregate purchase price of $3,011,000, less offering expenses of $90,330, for net proceeds of $2,909,670.

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Share Exchange Agreement and Redemption

On April 14, 2021, the Company, entered into a share exchange agreement (the “Exchange Agreement”) ,with a holder of the Series D Preferred Stock, whereby, at the closing ~~each Purchaser~~of the Offering, the Holder agreed to ~~purchase from the Company, up to 5,000~~exchange an aggregate of 3,600 shares of the Company’s Series D ~~PS,~~Preferred Stock, par value $0.0001 per share ~~at a purchase price of $1,000 per share of Series~~(the “Series D Preferred ~~Stock.~~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 ~~aggregate purchase price per Purchaser~~exchange was completed on April 15, 2021. 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 DE Preferred Stock ~~is $5,000,000. In connection with~~transferred to the ~~sale~~holder of the Series D Preferred Stock and the ~~Purchasers~~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. During the three months ended September 30. 2021, 1,200 shares of Series E Preferred Stock were ~~granted 6,000,000~~converted into 4,114,286 shares of common stock.

In addition, in relation to the Offering, on April 15, 2021, the Company redeemed the remaining 2,450 of the Series D PS for $3,513,504. In accordance with ASC 260-10-S99-2, the difference between the fair value of the consideration transferred to the holder of the Series D Preferred Stock and the carrying amount of the Series D Preferred Stock immediately prior to the redemption, which was $2,719,538, was accounted for in a manner similar to a dividend.

Leak-Out Agreements

In connection with the issuance of a total of 13,861,386 shares of the Company’s common stock ~~par value $0.0001~~pursuant to the SPA (Note 10) and the Patents Agreement (Note 5) (the ~~“Commitment Shares”~~“Shares”), ~~which have~~the Company and F&T, on May 19, 2021, entered into two separate leak-out agreements (the “Leak-Out Agreements”). Pursuant to the Leak-Out Agreements, F&T agreed that it would not sell or transfer the Shares for six months following the closing of the SPA and Patents Agreement and that, following these six months, each shareholder of F&T who was issued a portion of the Shares could sell up to one-sixth of their portion of the Shares every thirty-day period occurring thereafter for the next six months. Following the one-year anniversary of the closings, there will be no further restrictions regarding the sale or transfer of the Shares.

Common Shares Issued to Consultants

On April 14, 2021, 500,000 shares of common stock were issued to a consultant per an agreement entered into on January 20, 2021 for advisory services for a two-year period. The shares had a fair value of ~~$1,616,250~~$195,000, based on the market price of $0.39 on the grant date. 62,500 common shares ~~of $0.27 on~~shall vest each quarter through October 1, 2022, at $24,275, with $73,126 vested through the ~~date of the Series D PS purchase.~~

~~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~~September 30, 2021.

On May 24, 2021, the Company onentered into an agreement with a consultant, with a three-month term, that shall automatically renew each three months unless one party terminates the ~~dates of funding as compared to~~agreement. The compensation shall be $12,500 in cash per month for the conversion price, determined there was a $8,471,000, capped at $5,000,000 based on the purchase price of the Series B PS, beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. The amortization expense recognized during the threefirst six months and ~~nine months ended December 31, 2020 amounted to approximately $208,000.~~

~~Common Shares Issued to Consultants~~

~~In connection with the VBF asset acquisition (Note 3), the Company agreed to issue 500,000~~$15,000 per month thereafter. Also included in compensation are 200,000 shares of common stock, ~~as a finder’s fee,~~ with a fair value of ~~$135,000~~$99,600 based onupon the market ~~value~~price of $0.50 upon the grant date. The shares of common stock ~~of $0.27 as of December 15, 2020, the closing date of the acquisition.~~will vest in quarterly installments, with 50,000 to vest immediately. The shares ~~were~~of common stock have not yet been issued, ~~on February XX, 2021,~~ and ~~have been recognized~~therefore the 50,000 vested shares, at $24,900, are included in ~~the accompanying consolidated financial statements as Stock Payable as of December 31, 2020.~~

Shares payable.

On August 24, 2020, the Company issued 1,500,000 shares of common stock to a consultant per an agreement entered into on June 25, 2020. The agreement has a six month term, and therefore the fair value of $67,500, based on the market value of $0.045 on the grant date, will be recognized over the term of the agreement, with $32,500 and $67,500 expensed during the three and nine months ended December 31, 2020. On December 25, 2020, the Company renewed the agreement for an additional six months. As consideration for the agreement the Company issued 1,500,000 shares of common stock to the consultant. The agreement has a ~~six month~~six-month term, and therefore the fair value of $616,500, based on the market value of $0.041 on the grant date, iswas recognized in Prepaid expense asto be amortized over the six-month term. As of the ~~period~~year end ~~December~~March 31, ~~2020, and will be~~2021, $308,250 remained in Prepaid expense with $308,250 recognized in consulting expense for the year end March 31, 2021. The remaining $308,250 was expensed ~~over the term of the agreement.~~

On June 12, 2020, the Company issued 1,250,000 shares of common stock to a consultant, with the fair value of $61,250 based on the market price of $0.049 on the date issued and which was recognized as professional services in the three months ended ~~June~~September 30, ~~2020.~~

2021.

Options and Warrants

The Company has not granted any options since inception.

The Company granted warrants in connection with various convertible debentures in previous periods. The remaining outstanding warrants were cancelled in connection with the legal settlement with Vista Capital Investments, LLC, on April 9, 2020. See discussion in Note 10. The related warrant liability was revalued upon cancellation on April 9, 2020, resulting in no change to the fair value of the warrant liability and the $90,000 fair value was reclassified to equity.

~~As of September 30, 2019, there were~~ ~~551,452~~ (after adjustment) remaining warrants to purchase shares of common stock outstanding, classified as a warrant liability, which were to expire on January 31, 2022, with an exercise price of 45% of the market value of the common shares of the Company on the date of exercise.

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NOTE 912 – RELATED PARTY TRANSACTIONS

Accrued Payroll – Related Parties

Included in other accrued expenses on the accompanying consolidated balance sheet is ~~approximately $47,000~~September 30approximately $114,000 and ~~$84,000 owing to the President of the Company as of December 31, 2020 and March 31, 2020, respectively, and approximately $175,000,~~$154,000, owing to a key employee (which includes $50,000 in both fiscal years, from consulting services prior to his employment) as of ~~both December 31, 2020~~September 30, 2021 and March 31, ~~2020.~~2021. These amounts include both accrued payroll and accrued allowances and expenses.

The accrued payroll owing to the President of the Company was paid off in full during July 2021, and was approximately $35,000 as of March 31, 2021.

Bonus Compensation – Related Party

On August 10, 2021, the Board of Directors awarded the President, the Chief Financial Officer and the Chief Technology Officer compensation bonuses of $300,000 each. On May 11, 2021, the Company paid the Chief Financial Officer the bonus of $300,000, with the other bonuses to be distributed within the next twelve months from the award date, and are included in accrued expenses, related parties as of September 30, 2021.

NaturalShrimp Holdings, Inc.

On January 1, 2016 the Company entered into a notes payable agreement with NaturalShrimp Holdings, Inc.(“NSH”), a shareholder. Between January 16, 2016 and March 7, 2016, the Company borrowed $134,750 under this agreement. An additional $601,361 was borrowed under this agreement in the year ended March 31, 2017. The note payable has no set monthly payment or maturity date with a stated interest rate of 2%. AsDuring the three months ended September 30, 2021, the Company paid off $655,750 of ~~December 31, 2020 and March 31, 2020~~ the note payable. The outstanding balance is approximately ~~$735,000. As~~$77,000 and $735,000, as of ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020,~~2021, respectively. At September 30, 2021 and March 31, 2021, accrued interest payable was approximately ~~$62,000~~$70,000 and ~~$51,000,~~$66,000, respectively.

Shareholder Notes

The Company has entered into several working capital notes payable to multiple shareholders of NSH and Bill Williams, a former officer and director, and a shareholder of the Company, for a total of $486,500. The notes are unsecured and bear interest at 8%. These notes had stock issued in lieu of interest and have no set monthly payment or maturity date. The balance of these notes was ~~$366,404~~$356,404 as of ~~December 31, 2020~~both September 30, 2021 and ~~$426,404 as of~~ March 31, ~~2020, respectively,~~2021, and is classified as a current liability on the consolidated balance sheets. As of ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020,~~2021, accrued interest payable was approximately ~~$110,000~~$132,000 and ~~$240,000,~~$118,000, respectively.

On July 15, 2020, the Company issued a promissory note to Ms. Williams in the amount of $383,604 to settle the amounts that had been recognized per the separation agreement with the late Mr. Bill Williams dated August 15, 2019 (Note 11) for his portion of the related party notes and related accrued interest discussed above, and accrued compensation and allowances. The note bears interest at one percent per annum, and calls for monthly payments of $8,000 until the balance is paid in full. The balance as of December 31, 2020 was $335,604, with $96,000 classified in current liabilities on the consolidated balance sheet.

Shareholders

Beginning in 2010, the Company started entering into several working capital notes payable with various shareholders of NSH for a total of $290,000 and bearing interest at 8%. The balance of these notes ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020~~2021 was $54,647 and is classified as a current liability on the consolidated balance sheets.

NOTE 1013 – LEASE

On May 26, 2021, the Company entered into a sublease for a new office space in Texas, on two floors. The lease will commence on August 1, 2021 for a monthly rent of $7,000, and terminate on October 31, 2025, for one of the spaces, and commence in the second half of 2022 for monthly rent of $1,727, and terminate on October 31, 2025, for the second space. On June 2, 2021, the Company paid a deposit of $52,362 which shall be applied to the last six months of the sublease term, and $17,454 security deposit, which is included in Prepaid expenses on the accompanying consolidated condensed balance sheet. The Company assessed its new office lease as an operating lease.

At inception, on August 1, 2021, the ROU and lease liability was calculated as approximately $316,000, based on the net present value of the future lease payments over the term of the lease. When available, the Company uses the rate implicit in the lease discount payments as the incremental borrowing rate to calculate the net present value; however, the rate implicit in the lease is not readily determinable for their corporate office lease. In this case, the Company estimated its incremental borrowing rate of 5.75% as the interest rate it could have incurred to borrow an amount equal to the lease payments in a similar economic environment on a collateralized basis over a term similar to the lease term . The Company estimated its rate based on observable risk-free interest rate and credit spreads for commercial debt of a similar duration as to what rate would have been effective for the Company.

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On September 8, 2021, the Company entered into an equipment lease agreement for VOIP phone equipment. The lease term is for sixty months, with a monthly lease payment of approximately $300. The Company assessed the equipment lease as an operating lease. The Company determined the Right of Use asset and Lease liability values at inception as approximately $17,000 calculated at the present value of all future lease payments for the lease term, using an incremental borrowing rate of 5.75%.

On June 24, 2019, the Company entered into a service and equipment lease agreement for water treatment services, consumables and equipment. The lease term iswas for five years, with a renewal option of an additional five years, with a monthly lease payment of $5,000. The Company analyzed the classification of the lease under ASC 842, and as it did not meet any of the criteria for a financing lease it has been classified as an operating lease. The Company determined the Right of Use asset and Lease liability values at inception at a value of $275,400, calculated at the present value of all future lease payments for the lease term, using an incremental borrowing rate of 5%. ~~The Lease Liability will be expensed each month, on a straight line basis, over the life of the lease.~~ As of ~~December 31, 2020 and~~ March 31, ~~2020,~~2021, the lease iswas on hold while the Company ~~waits~~waited for new equipment to be delivered and installed. During the first quarter of fiscal 2022, the Company has cancelled the lease. As the lease iswas on hold there has been no lease expense or amortization of the Right of Use asset ~~for the three and nine months ended December 31, 2020.~~

~~For the three and nine months ended December 31, 2019~~since inception of the lease ~~expense was $15,000,~~ and ~~the amortization~~recognition of the Lease liability and Right of Use asset, ~~was $11,702.~~

and therefore there is no gain or loss recognized upon cancellation of the lease.

NOTE 1114 – COMMITMENTS AND CONTINGENCIES

Executive Employment Agreements –Gerald Easterling

On April 1, 2015, the Company entered into an employment agreement with Gerald Easterling at the time as the Company’s President, effective as of April 1, 2015 (the “Employment Agreement”).

The Employment Agreement is terminable at will and each provide for a base annual salary of $96,000. In addition, the Employment Agreement provides that the employee is entitled, at the sole and absolute discretion of the Company’s Board of Directors, to receive performance bonuses. Mr. Easterling will also be entitled to certain benefits including health insurance and monthly allowances for cell phone and automobile expenses.

The Employment Agreement provides that in the event the employee is terminated without cause or resigns for good reason (as defined in their Employment Agreement), the employee will receive, as severance the employee’s base salary for a period of 60 months following the date of termination. In the event of a change of control of the Company, the employee may elect to terminate the Employment Agreement within 30 days thereafter and upon such termination would receive a lump sum payment equal to 500% of the employee’s base salary.

The Employment Agreement contains certain restrictive covenants relating to non-competition, non-solicitation of customers and non-solicitation of employees for a period of one year following termination of the employee’s Employment Agreement.

On August 15, 2019, the late Mr. Bill Williams resigned from his position as Chairman of the Board and Chief Executive Officer of the Company, effective August 31, 2019. Mr. Easterling replaced him as the Chief Executive Officer of the Company. The separation agreement calls for the continued payment of salary, at $8,000 semi-monthly, until his accrued compensation in the amount of approximately $217,000 is paid off, as well as his monthly rent, medical and automobile payments to continue to be paid and deducted against the accrued compensation and debt. After the accrued compensation is fully paid, the payments shall be $10,000 per month against the remaining debt balance, until such balance is paid in full. On July 15, 2020, the Company issued a promissory note to Ms. Williams in the amount of $383,604 to settle the amounts agreed to in the separation agreement for accrued compensation and debt (see Note 9).

~~Vista Capital Investments, LLC~~

On April 30, 2019, a complaint was filed against the Company in the U.S. District Court in Dallas, Texas alleging that the Company breached a provision in a common stock purchase warrant (the “Vista Warrant”) issued by the Company to Vista Capital Investments, LLC (“Vista”). Vista alleged that the Company failed to issue certain shares of the Company’s Common Stock as was required under the terms of the Warrant. Vista sought money damages in the approximate amount of $7,000,000, as well as costs and reimbursement of expenses.

On April 9, 2020, the Company, Vista and David Clark (“Clark”), a principal of Vista, (the “Parties”) entered into a Settlement Agreement and Release (the “Settlement Agreement”) whereby the Company shall (i) pay to Vista the sum of $75,000, which the Company wired on April 10, 2020, and (ii) issue to Vista 17,500,000 shares of the Company’s Common Stock (the “Settlement Shares”). For a period of time equal to 90-days from the date of the settlement, or July 8, 2020, the Company shall have the right, but not the obligation, to purchase back from Vista 8,750,000 of the Settlement Shares at a price equal to the greater of (i) the volume weighted-average trading price of the Company’s common shares over the five preceding trading days prior to the date of the delivery of the Company’s written notice of such repurchase or (ii) $0.02 per share. ~~On May 18, 2020, the Company received $50,000 as consideration for waiving the purchase option on the Settlement Shares, thereby allowing Vista to retain all of the Settlement Shares. T~~he Vista warrants outstanding were also cancelled as part of the Settlement Agreement. The $75,000, as well as the fair market value of the 17,500,000 common shares, which is $560,000 based on the market value of the Company’s common stock on the settlement date of $0.32, was accrued in Accrued expenses on the accompanying March 31, 2020 Balance Sheet and recognized as Loss on Warrant settlement in the fourth quarter of the year ending March 31, 2020.

RGA Labs, Inc.

On February 18, 2020, RGA Labs, Inc. (“RGA”) filed suit against the Company in the Illinois Circuit Court ~~(23~~rd(23rd District) alleging that the Company owed RGA money pursuant to a written contract for the design and manufacture of certain water treatment equipment commissioned by the Company. The Company disputed the allegations and has counterclaimed against RGA for additional costs and expenses incurred by the Company in correcting, repairing and retro-fitting the equipment to enable it to work in the Company’s facilities. ~~On December 1, 2020,~~As a result of RGA’s failure to respond to written discovery served by the Company ~~filed a motion to dismiss the lawsuit as a sanction for the~~and failure of RGA to ~~comply with~~satisfy requirements imposed by an order compelling response, the court issued an order prohibiting RGA from introducing any evidence at the time of trial other than the original agreement between RGA and the Company. Further, the Court sustained the Company’s objection to RGA’s written discovery obviating the Company’s obligation to respond. On August 10, 2021, pursuant to a court order, ~~compelling responses~~RGA and the Company participated in a mediation wherein a settlement of all claims was reached. The settlement consisted of the agreement of the Company to pay RGA the sum of $8,000, execution of joint and mutual releases and the execution of a non-competition agreement by RGA and its principals restricting them from competing against the Company in the aquaculture business using electrocoagulation technology. The settlement has not yet been finalized at this time due to the ~~Company’s requests for production~~negotiation of the terms and ~~first set~~breadth of ~~interrogatories. A hearing was held on~~ the ~~motion to dismiss on January 20, 2021. The Court has taken the matter under advisement and will issue its ruling on March 19, 2021.~~

non-competition agreement.

Gary Shover

A shareholder of NaturalShrimp Holdings, Inc. (“NSH”), Gary Shover, filed suit against the Company on August 11, 2020 in the Northern District of Texas, Dallas Division, alleging breach of contract for the Company’s failure to exchange common shares of the Company for shares Mr. Shover owns in NSH. The federal District Court for the Northern District of Texas, Dallas Division, has set the claims of Gary Shover against the Company ~~has filed its answer~~for a hearing scheduled for November 15, 2021. At this hearing, the parties will have the opportunity to present to the complaint and is seeking to settle the matter with Mr. Shover with the approval of the Federal District Court. A settlement stipulation has been prepared and approved by the parties and will be filed withCourt reasons why the Court ~~along with a~~should approve the proposed ~~order. It is anticipated that the stipulation, joint motion~~settlement agreed to ~~approve stipulation and proposed order approving the stipulation and settlement will be filed with the Court during the week of February~~by all parties.

NOTE 15 ~~2021.~~

~~NOTE 12~~ – SUBSEQUENT EVENTS

~~Subsequent to the nine months ended December 31, 2020, the Company has converted 526 Series B PS plus 141 Series B PS dividends-in-kind into 6,312,000~~

On October 18, 2021, 600 shares of ~~the Company’s~~Series E Preferred Stock were converted into 2,057,143 shares of common stock.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes a number of forward-looking statements that reflect management’s current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended March 31, ~~2020,~~2021, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on June ~~26, 2020,~~29, 2021, 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, 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:

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~~our ability on a timely basis to successfully rebuild our research and development plant in La Coste, Texas which was completely destroyed by a fire on March 18, 2020;~~

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our ability, once our research and development plan is rebuilt, to successfully commercialize our equipment and shrimp farming operations to produce a market-ready product in a timely manner and in enough quantity;

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~~absence of contracts with customers or suppliers;~~

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~~our ability to maintain and develop relationships with customers and suppliers;~~

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~~our ability to successfully integrate acquired businesses or new brands;~~

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~~the impact of competitive products and pricing;~~

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~~supply constraints or difficulties;~~

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~~the retention and availability of key personnel;~~

●

~~general economic and business conditions;~~

●

~~substantial doubt about our ability to continue as a going concern;~~

●

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

●

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

●

~~our ability to successfully implement our business plan;~~

●

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

●

~~the commercial success of our products;~~

●

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

●

~~intellectual property claims brought by third parties; and~~

●

~~the impact of any industry regulation.~~

	·	our ability to continue developing and expanding our research and development plant in La Coste, Texas and our production facility in Webster City, Iowa;
	·	our ability, once our research and development plant is rebuilt, to successfully commercialize our equipment and shrimp farming operations to produce a market-ready product in a timely manner and in enough quantity;
	·	absence of contracts with customers or suppliers;
	·	our ability to maintain and develop relationships with customers and suppliers;
	·	our ability to successfully integrate acquired businesses or new brands;
	·	the impact of competitive products and pricing;
	·	supply constraints or difficulties;
	·	the retention and availability of key personnel;
	·	general economic and business conditions;
	·	substantial doubt about our ability to continue as a going concern;
	·	our continued ability to raise funding through institutional investors at the pace and quantities required to scale our plant needs to commercialize our products;
	·	our ability to successfully recruit and retain qualified personnel in order to continue our operations;
	·	our ability to successfully implement our business plan;
	·	our ability to successfully acquire, develop or commercialize new products and equipment;
	·	the commercial success of our products;
	·	business interruptions resulting from geo-political actions, including war, and terrorism or disease outbreaks (such as the outbreak of COVID-19 or any of its variants);
	·	intellectual property claims brought by third parties; and
	·	the impact of any industry regulation.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the ~~Securities and Exchange Commission (the “SEC”).~~SEC. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

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As used in this Quarterly Report on Form 10-Q and unless otherwise indicated, the terms “Company,” “we,” “us,” and “our” refer to NaturalShrimp Incorporated and its wholly-owned subsidiaries: NaturalShrimp USA Corporation (“NSC”) and NaturalShrimp Global, Inc. (“NS Global”) and ~~our 51% owned subsidiary,~~ Natural Aquatic Systems, Inc. Unless otherwise specified, all dollar amounts are expressed in United States Dollars.

Corporate History

We were incorporated in the State of Nevada on July 3, 2008 under the name “Multiplayer Online Dragon, Inc.” Effective November 5, 2010, we effected an 8-for-1 forward stock split, increasing the issued and outstanding shares of our common stock from 12,000,000 shares to 96,000,000 shares. On October 29, 2014, we effected a 1-for-10 reverse stock split, decreasing the issued and outstanding shares of our common stock from 97,000,000 to 9,700,000.

On November 26, 2014, we entered into an Asset Purchase Agreement (the “Agreement”) with NaturalShrimp Holdings, Inc. a Delaware corporation (“NSH”), pursuant to which we agreed to acquire substantially all of the assets of NSH which assets consisted primarily of all of the issued and outstanding shares of capital stock of NSC and NS Global, and certain real property located outside of San Antonio, Texas (the “Assets”).

On January 30, 2015, we consummated the acquisition of the Assets pursuant to the Agreement. In accordance with the terms of the Agreement, we issued 75,520,240 shares of our common stock to NSH as consideration for the Assets. As a result of the transaction, NSH acquired 88.62% of our issued and outstanding shares of common stock; NSC and NS Global became our wholly-owned subsidiaries, and we changed our principal business to a global shrimp farming company.

In connection with our receipt of approval from the Financial Industry Regulatory Authority (“FINRA”), effective March 3, 2015, we amended our Articles of Incorporation to change our name to “NaturalShrimp Incorporated.”

Business Overview

We are a biotechnology company and ~~we have~~has developed a proprietary ~~technology~~platform technologies that ~~allows~~allow us to grow Pacific White shrimp (Litopenaeus vannamei, formerly Penaeus vannamei) in an ecologically controlled, high-density, low-cost environment, and in fully contained and independent production facilities. Our system uses technology which allows us to produce a ~~naturally-grown~~naturally grown shrimp “crop” weekly and accomplishes this without the use of antibiotics or toxic chemicals. We have developed several proprietary technology assets, including a knowledge base that allows us to produce commercial quantities of shrimp in a closed system with a computer monitoring system that automates, monitors, and maintains proper levels of oxygen, salinity, and temperature for optimal shrimp production. ~~Our initial~~The Company’s production ~~facility is~~facilities are located ~~outside of San Antonio, Texas.~~

in La Coste, Texas and Webster City, Iowa.

NS Global, ~~was a 50% shareholder~~one of ~~NaturalShrimp Europe GmBH, which ultimately re-domiciled from Switzerland to~~our wholly-owned subsidiaries, owns less than 1% of Norway ~~in the name of~~Seafood A.S, (formerly NaturalShrimp International A.S.) in Oslo, Norway. This entity was our original European-based partner and ~~later changed~~was responsible for the construction cost of its ~~name to Gamba~~facility and initial operating capital.

The first facility built in Spain for NaturalShrimp International A.S.~~, supplied the original technology and design support~~ is GambaNatural de España, S.L. The land for the first ~~production subsidiary formed~~facility was purchased in Medina del Campo, Spain, and ~~operated as GambaNatural de España, S.L. Today, NS Global holds less than 1% ownership~~construction of the 75,000 sq. ft. facility was completed in ~~Norwegian-based Noray Seafood A.S. (formally Gamba International A.S.).~~

2016. Medina del Campo is approximately seventy-five miles northwest of Madrid, Spain.

On October 16, 2015, we formed Natural Aquatic Systems, Inc. (“NAS”). The purpose of ~~the~~ NAS is to formalize the business relationship between our Company and F&T Water Solutions LLC (“F&T”) for the joint development of certain water technologies. The technologies shall include, without limitation, any and all inventions, patents, intellectual property, and know-how dealing with enclosed aquatic production systems worldwide. This includes construction, operation, and management of enclosed aquatic production, other than shrimp, facilities throughout the world, co-developed by both parties at our facility located outside of La Coste, Texas. On December 25, 2018, we were awarded U.S. Patent “Recirculating Aquaculture System and Treatment Method for Aquatic Species” covering all indoor aquatic species that utilizes proprietary art.

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On December 15, 2020, we entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation (“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). Transport and Iowa’s First were wholly-owned subsidiaries of VBF. The agreement called for us to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems, and other improvements located on such real property) of Iowa’s First. The consideration was $10,000,000, consisting of $5,000,000 in cash, paid at closing on December 17, 2020, (ii) $3,000,000 payable in 36 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date, ~~(“Promissory Note A”),~~ and (iii) $2,000,000 payable in 48 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity ~~date (“Promissory Note B”).~~

~~Per the APA, other than the purchased assets, all other assets and properties were excluded from the purchased assets ("Excluded Assets"), which consisted~~date. The Company also agreed to issue 500,000 shares of ~~intangible assets and intellectual property rights,~~Common Stock as ~~well as the server, all records~~a finder’s fee, with a fair value of $135,000 based on the ~~server, hard copies~~market value of ~~accounting records and documents, claims, Pranger retrofit designs, and~~ the ~~equity interest VBF holds in VBF IP Inc., a Texas corporation including, by extension, any and all patents, trademarks and other items~~Common Stock as of ~~intellectual property owned by VBF IP. The assets purchased are therefore only tangible assets.~~

the closing date of the acquisition.

The facility was originally designed ~~for the growth of barramundi fish, but~~as an aquaculture facility, with the company ~~never began~~having production ~~and declared bankruptcy on September 21, 2018. Our plan is to begin~~issues. The Company’s has begun a modification process to convert the plant to produce ~~shrimp.~~shrimp, which will allow them to scale faster without having to build new facilities. The three Iowa facilities contain the tanks and infrastructure that will be used to support the production of shrimp with the incorporation of the ~~Company's patented EC~~Company’s Electrocoagulation (EC) platform technology.

On May 19, 2021, the Company entered into a Patents Purchase Agreement (the “Patents Agreement”) with F&T. The Company ~~also plans~~and F&T had previously jointly developed and patented a water treatment technology used or useful in growing aquatic species in re-circulating and enclosed environments (the “Patent”) with each party owning a fifty percent (50%) interest. Upon the closing of the Patents Agreement, the Company would purchase F&T’s interest in the Patent, F&T’s 100% interest in a second patent associated with the first Patent issued to ~~convert additional square footage currently~~F&T in March 2018, and all other intellectual property rights owned by F&T for a purchase price of $2,000,000 in cash and issue 9,900,990 shares of the Company’s common stock with a market value of $0.505 per share for a total fair value of $5,000,000, for a total acquisition price of $7,000,000. The Company paid the cash purchase price on May 20, 2021 and the closing of the Patents Agreement took place on May 25, 2021. As of September 30, 2021, the shares of common stock have not been issued and are therefore classified in shares payable.

On August 25, 2021, the Company, through their 100% owned subsidiary NAS, entered into an Equipment Rights Agreements with Hydrenesis-Delta Systems, LLC (Hydrenesis-Delta") and a Technology Rights Agreement, in a sub-license agreement with Hydrenesis Aquaculture LLC ("Hydrenesis-Aqua"), The Equipment Rights involve specialized and proprietary equipment used to produce and control, dose, and infuse Hydrogas® and RLS® into both water and other chemical species, while the Technology sublicense pertains to the rights to Hydrogas® and RLS®. Both Rights agreements are for a 10 year term, which shall automatically renew for ten year successive terms. The term can be terminated by written notice by mutual consent, or by either party upon a breach of contract, insolvency or filing of bankruptcy. The agreements accord the exclusive rights to purchase or distribute the technology, or buy or rent the equipment, in the Industry Sector, which is the primary business and revenue stream generated from indoor aquaculture farming of any species in the Territory, defined as ~~storage to a shrimp processing plant. Final plans and decisions related to this project continue to be developed.~~

anywhere in the world except for the countries in the Gulf Corporation Council.

The Company has ~~two~~three wholly-owned subsidiaries including NSC and NS Global and ~~owns 51% of~~ NAS.

Evolution of Technology ~~and Revenue Expectations~~

Historically, efforts to raise shrimp in a high-density, closed system at the commercial level have been met with either modest success or outright failure through “BioFloc Technology.” Infectious agents such as parasites, bacteria and viruses are the most damaging and most difficult to control. Bacterial infection can in some cases be combated through the use of antibiotics (although not always), and in general, the use of antibiotics is considered undesirable and counter to “green” cultivation practices. Viruses can be ~~even~~ worse, in that they are immune to antibiotics. Once introduced to a shrimp population, viruses can wipe out entire farms and shrimp populations, even with intense probiotic applications.

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Our primary solution against infectious agents is our “Vibrio Suppression Technology.” We believe this system creates higher sustainable densities, consistent production, improved growth and survival rates and improved food conversion without the use of antibiotics, probiotics, or unhealthy anti-microbial chemicals. Vibrio Suppression Technology helps to exclude and suppress harmful organisms that usually destroy “BioFloc” and other enclosed technologies.

In 2001, we began research and development of a high density, natural aquaculture system that is not dependent on ocean water to provide quality, fresh shrimp every week, fifty-two weeks a year. Our initial system was successful, but we determined that it would not be economically feasible due to high operating costs. Over the next several years, using the knowledge we gained from developing the first system, we developed a shrimp production system that eliminated the high costs associated with the previous system. We have continued to refine this technology, eliminating bacteria and other problems that affect enclosed systems, and now have a successful shrimp growing process. We have produced thousands of pounds of shrimp over the last few years in order to develop a design that will consistently produce quality shrimp that grow to a large size at a specific rate of growth. This included experimenting with various types of natural live and synthesized feed supplies before selecting the most appropriate nutritious and reliable combination. It also included utilizing monitoring and control automation equipment to minimize labor costs and to provide the necessary oversight for proper regulation of the shrimp environment. However, there were further enhancements needed to our process and technology in order to begin production of shrimp on a commercially viable scale and to generate revenues.

Our current system consists of a ~~reception~~nursery tank where the shrimp are acclimated, then moved to a larger grow-out tank for the rest of the ~~twenty-four week~~twenty-four-week cycle. During 2016, we engaged in additional engineering projects with third parties to further enhance our indoor production capabilities. For example, through our relationship with Trane, Inc., a division of Ingersoll-Rand Plc (“Trane”), Trane provided a detailed audit to use data to build and verify the capabilities of then initial Phase 1 prototype of a Trane-proposed three tank system at our La Coste, Texas facility. The Company ~~contracted~~working with F&T Water Solutions ~~and~~contracted RGA Labs, Inc. (“RGA Labs”) to ~~complete final engineering and building of~~build the initial ~~patent-pending modified~~NaturalShrimp patented Electrocoagulation system for the grow-out, harvesting and processing of fully mature, antibiotic-free Pacific White Leg shrimp. The design ~~presented~~provided a viable pathway to begin generating revenue and producing shrimp on a commercially viable scale. The ~~design was completed and~~equipment was installed in early June 2018 by RGA Labs, and final financing for the system was provided by one of the Company’s ~~existing intuitional~~institutional investors. The first post larvae (PL) arrived from the hatchery on July 3, 2018. The Company used the shrimp for sampling to key potential customers and special events such as the Texas Restaurant Association trade show. The Company also received two production PL lots from Global Blue Technologies on March 21, 2019 and April 17, 2019 and from American Penaeid, Inc. on August 7, 2019. Because the shrimp displayed growth that was slower than normal, the Company had a batch tested by an independent lab at the University of Arizona. The shrimp tested positive for Infectious hypodermal and hematopoietic necrosis (“IHHNV”) and the Texas Parks and Wildlife Department was notified that the facility was under quarantine. On August 26, 2019, the Company was forced to terminate all lots due to the infection. On August 30, 2019, the Company received notice that it was in compliance again and the quarantine had been ~~lifted.~~lifted and the Company began restocking shrimp in the refurbished facility sections. During the aforementioned quarantine, the Company decided to begin an approximately ~~$1,000,000~~$2,000,000 facility renovation demolishing the interior 16 wood structure lined tanks (720,000 gallons). The Company ~~would be~~began replacing the previous tanks with 40 new fiberglass tanks (600,000 gallons) at a cost of approximately $400,000 allowing complete production flexibility with more smaller tanks. ~~The Company had expected that the first shrimp tanks harvest target date would be April 2020.~~

On March 18, 2020, our research and development plant in La Coste, Texas was destroyed by a fire. The Company ~~believes~~believed that it was caused by a natural gas leak, but the fire was so extensive that the cause was undetermined. No one was injured as a result of the fire. The majority of the damage was to our pilot production plant, which ~~comprises~~comprised approximately 35,000 square feet of the total size of all facilities at the La Coste location of approximately 53,000 square feet, but the fire did not impact the separate greenhouse, reservoirs, or utility buildings. We ~~have~~ received total insurance proceeds in the amount of $917,210, the full amount of our claim. These funds ~~are being~~were utilized to ~~convert the original greenhouse into an 8,000 square foot water treatment plant,~~ rebuild a 40,000 square foot production facility at the La Coste facility and to repurchase the equipment ~~and technology~~ needed to replace what was lost in the fire. ~~We began stocking PLs~~The Company continues to work towards full capacity at this plant in LaCoste and expects that sales will be generated from the facility in the ~~water treatment plant in January 2021~~fourth calendar quarter of 2021. While we have experienced supply chain issues due to ~~perform testing~~COVID-19, we do expect ramping up full production of 3,000 pounds per week by the end of the ~~facility support systems and will begin stocking the new grow-out facility with regular biweekly supplies~~first calendar quarter of ~~PLs in February 2021.~~

On December 18, 2020, we closed the acquisition for the assets of Alder Aqua, formerly known as VeroBlue Farms in Webster City, Iowa, including but not limited to the real property, equipment, tanks, rolling stock, inventory, permits, customer lists, contracts and other such assets used in the operation of the business. These facilities were previously used to raise Barramundi fish. We have begun the conversion from a fish aquaculture facility to a shrimp production facility that includes inserting2022. Also, the Company ~~patented “Vibrio Suppression Technology”. We will begin stocking PLs~~is expecting to break ground on an 80,000 square foot expansion in ~~that facility in March 2021 to perform testing of~~LaCoste within the ~~support systems.~~

~~Recent developments~~

On December 15, 2020, the Company entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation (“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). Transport and Iowa’s First were wholly-owned subsidiaries of VBF. The agreement called for the Company to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems and other improvements located on such real property) of Iowa’s First. The consideration was $10,000,000, consisting of $5,000,000 in cash, paid at closing on December 17, 2020, (ii) $3,000,000 payable in 36 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date, and (iii) $2,000,000 payable in 48 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date. The Company also agreed to issue 500,000 shares of common stock as a finder’s fee, with a fair value of $135,000 based on the market value of the common stock as of the closing date of the acquisition.

next sixty days.

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Results of Operations

Comparison of the Three Months Ended ~~December 31, 2020~~September 30, 2021 to the Three Months Ended ~~December 31, 2019~~

September 30, 2020

Revenue

We have not earned any significant revenues since our inception and, although we expect revenues to begin in ~~fiscal year 2021,~~three to six months, we can provide no assurances as to how significant they will be at that time.

Expenses

Our expenses for the three months ended ~~December 31, 2020~~September 30, 2021 are summarized as follows, in comparison to our expenses for the three months ended ~~December 31, 2019:~~

Three Months Ended December 31,

2020

2019

Salaries and related expenses
$97,090
$109,733
Professional fees
  228,967
  116,844
Other general and administrative expenses
  64,762
  75,906
Rent
  3,835
  4,351
Facility operations
  154,470
  41,375
Research and development
  -
  101,500
Depreciation
  18,173
  15,958
Total
$567,297
$465,667

September 30, 2020:

	Three Months Ended September 30,
	2021		2020

Salaries and related expenses	$	1,023,206	$	103,818
Professional fees		378,853		159,178
Other general and administrative expenses		591,468		133,824
Rent		16,870		4,209
Facility operations		172,431		68,271
Research and development		196,872		79,550
Depreciation and amortization		404,272		8,896
Total	$	2,783,972	$	557,746

Operating expenses for the three months ended ~~December 31, 2020~~September 30, 2021 were ~~$567,297,~~$2,783,972, which is ~~an approximately 22%~~a 399% increase over operating expenses of ~~$465,667~~$557,749 for the same period in ~~2019.~~2020. The overall change in expenses is mainly the result of a ramp up of costs based on the increase in the activity in planning operations, as well as the acquisition and addition of the Iowa facility. Salaries increased by approximately $919,000, due to the ~~increase in professional fees resulting from an increase in legal fees this period, related in part to the warrant settlement with Vista, the designation of the~~ new ~~series Preferred shares~~employees, as well as ~~its purchase~~the $300,000 bonus paid to the CFO, and anthe $600,000 bonus to the President and Chief Technology Officer in accrued expenses, related parties. Professional fees increased by approximately $120,000, due to attorneys work with the Company on acquisitions and equity offerings and SEC filings, as well as consultant and accounting fees. The approximately $457,644 increase in ~~accounting~~other general and ~~consulting fees, over the same period~~administrative expenses includes maintenance work being done in the ~~previous year.~~Texas and Iowa facilities and property taxes paid in Iowa. Additionally, it is the result of the fact that the operating costs in 2020 were decreased due to the slowdown of the progressing of testing and planning to begin commercial operations due to the fire at the Texas plant. The ~~increase of approximately $113,000~~depreciation in the three months ended ~~December 31, 2020 for facility operations~~September 30, 2021, increased due to the new fixed assets acquired from Vero Blue, and the amortization in the current period is athe result of the ~~Company recommencing with its testing~~patent acquisition on May 19, 2021 and ~~start-up operations in~~ the ~~production plant. The research and development cost in the prior period was for the NAS 51% subsidiary. All other costs between periods are fairly consistent.~~

License Agreements entered into on August 25, 2021.

Comparison of the ~~Nine~~Six Months Ended ~~December 31, 2020~~September 30, 2021 to the ~~Nine~~Six Months Ended ~~December 31, 2019~~

September 30, 2020

Revenue

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Expenses

Our expenses for the ~~nine~~six months ended ~~December 31, 2020~~September 30, 2021 are summarized as follows, in comparison to our expenses for the ~~nine~~six months ended ~~December 31, 2019:~~

Nine Months Ended December 31,

2020

2019

Salaries and related expenses
$311,623
$337,265
Professional fees
  516,453
  266,455
Other general and administrative expenses
  291,908
  328,688
Rent
  11,678
  12,163
Facility operations
  234,113
  180,934
Research and development
  79,550
  101,500
Depreciation
  37,850
  41,521
Total
$1,483,175
$1,268,526

September 30, 2020:

	Six Months Ended September 30,
	2021		2020

Salaries and related expenses	$	1,655,527	$	214,533
Professional fees		976,099		287,486
Other general and administrative expenses		1,002,098		227,146
Rent		20,955		7,843
Facility operations		411,756		79,643
Research and development		196,872		79,550
Depreciation and amortization		758,775		19,667
Total	$	5,022,062	$	915,878

Operating expenses for the ~~nine~~six months ended ~~December 31, 2020~~September 30, 2021 were ~~$1,483,175,~~$5,022,062, which is ana 448% increase ~~of approximately 17% as compared to~~over operating expenses of $915,878 for the same period in ~~2019.~~2020. The overall change in expenses is mainly the result of a ramp up of costs based on the increase in the activity in planning operations, as well as the acquisition and addition of the Iowa facility, especially in general and administrative expenses and facility operations. Salaries increased by approximately $1,441,000, due to the ~~increase~~new employees, as well as the $300,000 bonus paid to the CFO, and the $600,000 bonus to the President and Chief Technology Officer in ~~professional~~accrued expenses, related parties. Professional fees increased by approximately $689,000, due to attorneys work with the Company on acquisitions and ~~facility operations, offset by the decrease~~equity offerings and SEC filings, as well as consultant and accounting fees. The increase in other general and administrative expenses and research and development between the periods. The increase in professional fees is due to an increase in legal fees this period, related in part to the Vista warrant settlement and the new Series D PS, and an increase in accounting and consulting fees, over the same periodof approximately $775,000 includes maintenance work being done in the ~~previous year. The increase of approximately $53,000~~Texas and Iowa facilities and property taxes paid in ~~facility operations~~Iowa. Additionally, it is athe result of the ~~fire on March 18,~~fact that the operating costs in 2020 ~~at our pilot production plant, which is currently in~~were decreased due to the ~~process~~slowdown of ~~being rebuilt, with additional amounts also spent on testing and startup operations. In~~ the ~~three months ending December 31, 2019, the Company was also~~ progressing ~~with its~~of testing and planning to begin commercial operations ~~which had resulted~~due to the fire at the Texas plant. The depreciation in ~~a ramp-up of costs, as well as~~ the ~~research~~six months ended September 30, 2021, increased due to the new fixed assets acquired from Vero Blue, and ~~development~~the amortization in the current period is the result of the ~~51% subsidiary NAS. All other costs between periods are fairly consistent.~~

patent acquisition on May 19, 2021 and the License Agreements entered into on August 25, 2021.

Liquidity, Financial Condition and Capital Resources

As of ~~December 31, 2020,~~September 30, 2021, we had cash on hand of approximately ~~$312,000~~$801,000 and a working capital ~~deficiency~~ of approximately ~~$2,792,000,~~$5,121,000. as compared to cash on hand of approximately ~~$109,000~~$156,000 and a working capital deficiency of approximately ~~$3,598,000~~$3,614,000 as of March 31, ~~2020.~~2021. The decrease in working capital ~~deficiency~~ for the ~~nine~~six months ended ~~December 31, 2020~~September 30, 2021, is mainly due to the decrease in ~~current liabilities as a result of decreases~~cash on-hand and increase in ~~convertible debt~~accounts payable and the related derivatives due to conversions of approximately $463,000 of convertible debt, the Vista settlement in April of 2020, which was accrued as of March 31, 2020 and which consisted of $560,000 in accrued expenses, and $90,000 in warrant liability, as well as the issuance of the related party note to Ms. Williams in exchange for the amounts owed under the late Mr. William’s settlement agreement, a portion of which in now non-current. This is offset by a decrease in ~~current assets as a result of the collection of the insurance settlement of approximately $917,000.~~

notes payable – related parties.

Working ~~Capital Deficiency~~

Capital/(Deficiency)

Our working capital ~~deficiency~~ as of ~~December 31, 2020,~~September 30, 2021, in comparison to our working capital deficiency as of March 31, ~~2020,~~2021, can be summarized as follows:

December 31,

March 31,

2020

2020

Current assets
$1,089,867
$1,155,394
Current liabilities
3,881,698
4,753,343
Working capital deficiency
$2,791,831
$3,597,949

~~The~~

	September 30,			March 31,
	2021			2021
Current assets	$	1,087,599		$	811,134
Current liabilities		6,208,410			4,425,511
Working capital/(deficiency)	$	(5,120,811	)	$	(3,614,377	)

Current assets increased mainly because of the addition to cash as a result of the equity offerings during April through June 2021, of approximately $17,274,000, a portion of which was then used in the patent and NAS acquisitions, the License agreements, as well as redemption of Series D Preferred shares, offset by a decrease in ~~current assets is~~prepaid expenses, due to the receipt of the insurance settlement of approximately $917,000 which was in current assets as of March 31, 2020. While this decreased current assets as compared to the prior year end, the remaining proceeds have increased cash as of December 31, 2020, by approximately $202,000.amortization. The ~~decrease~~increase in current liabilities is primarily due to the ~~issuance~~$3 million in cash payments owed on the License agreements recorded in accounts payable and the $600,000 in accrued bonuses for the President and Chief Technology Officer (“CTO”), off set by the payoff of bank loans and lines of credit, convertible debt, notes payable to related parties, and the forgiveness of the shares of the Company’s common stock in the current period related to the Vista warrant settlement, with a fair value of $560,000, plus the cash payment to Vista of $75,000 on April 10, 2020, which were both included in accrued expenses as of March 31. 2020, along with the reclassification of the $90,000 warrant liability to equity upon cancellation of the Vista warrants. The current liabilities also were decreased by the conversion of approximately $463,000 of principal of convertible notes and the related reclassification to equity of the total derivative liability upon conversion. Additionally, the issuance of the related party note to Ms. Williams in exchange for the amounts owed under the late Mr. William’s settlement agreement, also resulted in a decrease to current liabilities as a portion of the new note payable in now non-current. Lastly, there also is an increase of approximately $255,000 in accounts payable.

PPP loan.

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Cash Flows

Our cash flows for the ~~nine~~six months ended ~~December 31, 2020,~~September 30, 2021, in comparison to our cash flows for the ~~nine~~six months ended ~~December 31, 2019,~~September 30, 2020, can be summarized as follows:

Nine Months Ended December 31,

2020

2019

Net cash used in operating activities
$(1,013,718)
$(1,503,708)
Net cash used in investing activities
  (7,126,728)
  (1,153,525)
Net cash provided by financing activities
  8,342,803
  3,102,724
Net change in cash
$202,357
$634,353

	Six Months Ended September 30,
	2021			2020
Net cash used in operating activities	$	(4,153,434	)	$	(851,113	)
Net cash used in investing activities		(7,293,524	)		1,563,839
Net cash provided by financing activities		12,091,692			2,621,062
Net change in cash	$	644,736		$	206,110

The ~~decrease~~increase in net cash used in operating activities in the ~~nine~~six months ended ~~December 31, 2020~~September 30, 2021, compared to the same period in ~~2019~~2020 is largely attributable ~~partly due~~ to the ~~decrease~~increase in the net loss, ~~as well as~~plus the ~~approximately $745,000 fair value of~~increase in accounts payable, offset by the shares issued for services. There also was the decrease in accrued expenses, which was a result of the settlement with Vista and in accrued interest due to related parties, stemming from the issuance of the new Ms. Williams note payable in settlement of the late Mr. Williams separation agreement. This is offsetincrease in the ~~current period of no longer recognizing~~depreciation and amortization ~~of debt discount, which was approximately $515,000 in~~and the ~~prior period.~~

accrued bonuses for the President and CTO.

The net cash used in investing activities in the ~~nine~~six months ended ~~December 31, 2020~~September 30, 2021 includes $2,000,000 in the patent acquisition and $1,000,000 in the acquisition of shares of the non-controlling interest, the $2,350,000 for the License agreement, as well as approximately $646,000 for machinery and equipment and $1,298,000 for construction in process. The prior year’s cash spent on investing activities consisted mainly of the cash paid for ~~the VeroBlue Farm asset acquisition, as well as~~ machinery and equipment and construction in process, ~~to rebuild the Texas plant and is~~ offset by ~~the~~ $917,210 of cash proceeds received from the insurance settlement for the fire to the pilot production plant. In the same period in 2019, the Company used cash for investing activities to purchase machinery and equipment and payments on construction in process on the Texas facility, prior to the March 2020 fire.

The net cash provided by financing activities increased by approximately ~~$738,000~~$9,471,000 between periods. For the current period, the Company received ~~$3,250,000~~approximately $17,277,000 from ~~the Securities Purchase Agreement for~~ the sale of ~~Series B Convertible Preferred Stock, $5,000,000 from~~common stock and warrants, offset by amounts paying off the ~~Securities Purchase Agreement for~~convertible note, notes payable with related parties and bank loans, and the ~~sale~~amount paid on the redemption of Series D ~~Redeemable Convertible~~ Preferred ~~Stock, as well as $103,200 from a Paycheck Protection Program (“PPP”) loan, which is expected to be forgiven within the current year, and $50,000 connected to the Vista warrant settlement.~~Shares. In the same period in the prior year, the financing activities primarily arose from the proceeds received from the ~~equity financing agreement~~sale of ~~$1,774,000~~Series B convertible Preferred Shares and ~~$100,000 proceeds from a new convertible debenture in April of 2019, and $250,000~~the $103,200 received from the ~~initial tranche of the Stock Purchase Agreement of the Series B Convertible Preferred Stock, offset by payments made on the credit line and convertible debentures in fiscal 2020.~~

PPP loan.

Our cash position was approximately ~~$312,000~~$801,000 as of ~~December 31, 2020.~~September 30, 2021. Management believes that our cash on hand and working capital 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, as more fully described below.~~

months.

Recent Financing Arrangements and Developments During the Period

Short-Term Debt and Lines of Credit

The Company has a working capital line of credit with Extraco Bank. On April 30, 2020, the line of credit was renewed with a maturity date of April 30, 2021 for a balance ~~limit~~ of $372,675. The line of credit ~~bears~~bore an interest rate of 5.0%, that iswas compounded monthly and to be paid with the principal on the maturity date. The line of credit ~~matures~~matured on April 30, 2021 and iswas secured by certificates of deposit and letters of credit owned by directors and shareholders of the Company. On May 5, 2021, the Company paid off the line of credit. The balance of the line of credit iswas $372,675 at ~~both December 31, 2020 and~~ March 31, ~~2020.~~

2021.

The 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 29.15% as of ~~December 31, 2020.~~June 30, 2021. The line of credit is unsecured. The balance of the line of credit was $9,580 at both ~~December 31, 2020~~September 30, 2021 and March 31, ~~2020.~~

2021.

The 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 13.25% as of ~~December 31, 2020.~~June 30, 2021. The line of credit is secured by assets of the Company’s subsidiaries. The balance of the line of credit is $10,237 ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020.~~

2021.

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Bank Loan

On April 10, 2020, the Company obtained a ~~PPP~~Paycheck Protection Program (“PPP”) loan in the amount of $103,200 pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). Interest on the loan is at the rate of 1% per year, and all loan payments are deferred for six months, at which time the balance is payable in 18 monthly installments if not forgiven in accordance with the CARES Act and the terms of the promissory note executed byOn April 16, 2021, the Company ~~in connection with~~filed for the ~~loan.~~ ~~The promissory note contains events~~forgiveness of ~~default and other provisions customary for a loan of this type.~~ ~~As required, the Company intends to use~~ the PPP loan ~~proceeds~~and was approved for ~~payroll, healthcare benefits, and utilities.~~ ~~The program provides that the use~~forgiveness of ~~PPP Loan amount shall be limited to certain qualifying expenses and may be partially or wholly forgiven in accordance with the requirements set forth in the CARES Act.~~

such loan on April 26, 2021.

On January 10, 2017, the Company entered into a promissory note with Community National Bank for $245,000, at an annual interest rate of 5% and a maturity date of January 10, 2020 (the “CNB Note”). The CNB Note is secured by certain real property owned by the Company in LaCoste, Texas, and is also personally guaranteed by the Company’s President, as well as certain shareholders of the Company. On January 10, 2020, the loan was modified, with certain terms amended. The modified note is for the principal balance of $222,736, with initial monthly payments of $1,730 through February 1, 2037, when all unpaid principal and interest will be due and payable. The loan has an initial yearly rate of interest of 5.75%, which may change beginning on February 1, 2023 and each 36 months thereafter, to the Wall Street Journal Prime Rate plus 1%, but never below 4.25%. The monthly payments may change on the same dates as the interest changes. The Company is also allowed to make payments against the principal at any time. The balance of the CNB Note is ~~$216,931 as of December 31, 2020, $8,438~~$210,738 at September 30, 2021, $10,380 of which was in current liabilities, and ~~$220,899 as of~~$214,452 at March 31, ~~2020,~~2021, of which ~~$8,904~~$8,725 was in current liabilities.

On November 3, 2015, the Company entered into a short-term note agreement with Community National Bank for a total value of ~~$50,000. The short-term note had~~$50,000, with a ~~stated interest rate of 5.25%,~~ maturity date of December 15, ~~2017 and had an initial interest only payment on February 3, 2016.~~2017. On July 18, 2018, the short-term note was replaced by a promissory note for the outstanding balance of $25,298, which bears interest at 8% with a maturity date of July 18, 2021. The note is guaranteed by an officer and director. The note was paid off in full in July of 2021. The balance of the note ~~as of December 31, 2020 and~~at March 31, ~~2020~~2021 was ~~$5,413 and $12,005, respectively.~~

$3,124.

Convertible Debentures

On ~~August 24, 2018,~~February 26, 2021, the Company entered into a ~~10%~~ convertible note infor the principal amount of ~~$55,000,~~$720,000, with an original issue discount of $120,000, convertible into shares of common stock of the ~~Company, which matures August 24, 2019.~~Company. The interest rate increases to 24% per annum upon an event of default, as set forth in the agreement, including a cross default to all other outstanding notes, and if the debenture is not paid at maturity the principal due increases by 10%. If the Company loses its bid price the principal outstanding on the debenture increases by 20%, and if the Company’s common stock is delisted, the principal increases by 50%. On January 10, 2019 the outstanding principal of $55,000 and accruednote bears interest of ~~$1,974 was purchased~~12% and is due six months from the ~~noteholder by a third party, for $82,612. The additional $25,638 represents the redemption amount owing to the original noteholder and increases the principal amount due to the new noteholder.~~date of issuance. The note is convertible from the date of issuance, at a fixed conversion rate of $0.36. The conversion rate shall change to $0.10 upon the event of default. Based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was an approximately $164,000 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. The amortization of the beneficial conversion feature was $27,273 and the original issuance discount was $20,000, for the year ended March 31, 2021. On April 16, 2021, the Company settled the convertible note, consisting of $720,000 in principal, approximately $13,000 in accrued interest, and approximately $110,000 in redemption fee, for a total of $842,972. The Company paid $421,486 in cash, and settled the remaining balance through the conversion into the issuance of 1,303,982 common shares.

Series B Preferred Equity Offering

On April 8, 2021, the Company converted 262 Series B into 3,144,000 shares of the Company’s common stock.

Securities Purchase Agreement

On April 14, 2021, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an accredited investor (the “Purchaser”), for the offering (the “Offering”) of (i) $5,000,000 worth of common stock (“Shares”), par value $0.0001 per share, of the Company (“Common Stock”); at a per share purchase price of $0.55 per Share (ii) common stock purchase warrants (“Warrants”) to purchase up to an aggregate of 10,000,000 shares of Common Stock, which are exercisable for a period of five years after issuance at an initial exercise price of $0.75 per share, subject to certain adjustments, as provided in the Warrants; and (iii) 1,000,000 shares of Common Stock (the “Commitment Shares”). Pursuant to the Purchase Agreement, on April 15, 2021, the Company received net proceeds of $4,732,123 from the Purchaser.

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Additionally, on May 20, 2021, the Purchaser purchased an additional 2,727,272 shares of common stock at a price per share ~~equal to 57%~~ of $0.55 per share (“Third Closing”), for net proceeds of approximately $1,455,000.

GHS Purchase Agreement

On June 28, 2021, the ~~lowest closing bid price~~Company entered into a securities purchase agreement with GHS (the “June GHS Purchase Agreement”) for the ~~last 20 days. The discount is increased an additional 10%,~~offering of up to 47%, upon a “DTC chill". During the fourth fiscal quarter of 2019, in three separate conversions, the holder converted $57,164 of principal into 9,291,354 shares of common stock of the Company. On May 5, 2020, the remaining outstanding balance of $29,057 was converted into 2,039,069 shares(i) $3,000,000 worth of common stock of the Company at a ~~conversion rate~~per share purchase price of ~~$0.014.~~

$0.40 and (ii) $11,000 worth of prefunded common stock purchase warrants to purchase an aggregate of up to 1,100,000 shares of common stock, which are exercisable upon issuance and shall not expire prior to exercise, and are subject to certain adjustments, as provided in the warrants. Pursuant to the June GHS Purchase Agreement, on June 28, 2021, GHS purchased 7,500,000 shares of common stock and 1,100,000 shares of common stock underlying the prefunded warrants, for an aggregate purchase price of $3,011,000, less offering expenses of $90,330, for net proceeds of $2,909,670.

Share Exchange Agreement and Redemption

On ~~September~~April 14, ~~2018,~~2021, the Company, entered into a ~~12% convertible promissory note for $112,500,~~share exchange agreement (the “Exchange Agreement”) with ~~an OID of $10,250, which matures on March 14, 2019. On January 25, 2019 the outstanding principal of $101,550, plus an additional $81,970 of default principal and $13,695 in accrued interest~~a holder of the ~~note, resulting in a new balance of $197,215, was purchased from~~Series D Preferred Stock, whereby, at the noteholder by a third party, who extended the maturity date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversionclosing of the ~~note. The interest rate increases~~Offering, the Holder agreed to ~~a default rate~~exchange an aggregate of 24% for events as set forth in the agreement, including if the market capitalization is below $5 million, or there are any dilutive issuances. There is also a cross default provision to all other notes. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. Additionally, If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. Additionally, if the note is not repaid by the maturity date the principal balance increases by $15,000. The market capitalization has been below $5 million and therefore the note was in default, however, the holder has issued a waiver to the Company on this default provision.

~~The note is convertible into~~3,600 shares of the Company’s ~~common~~Series D Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”) into 3,739.63 shares of the Company’s Series E Convertible Preferred stock, atpar value $0.0001 (the “Series E Preferred Stock”). The exchange was completed on April 15, 2021. 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 ~~variable conversion rate that is equal~~redemption. Therefore, the difference between the fair value of the Series E Preferred Stock transferred to the ~~lesser of 60%~~holder of the ~~lowest trading price for~~Series D Preferred Stock and the ~~last 20 days~~carrying amount of the Series D Preferred Stock immediately prior to the ~~issuance~~exchange, which was $3,258,189, was accounted for in a manner similar to a dividend. During the three months ended September 30. 2021, 1,200 shares of Series E Preferred Stock were converted into 4,114,286 shares of common stock.

In addition, in relation to the Offering, on April 15, 2021, the Company redeemed the remaining 2,450 of the ~~note or 60%~~Series D PS for $3,513,504. In accordance with ASC 260-10-S99-2, the difference between the fair value of the ~~lowest market price over~~consideration transferred to the ~~20 days~~holder of the Series D Preferred Stock and the carrying amount of the Series D Preferred Stock immediately prior to ~~conversion. The conversion price shall be adjusted upon subsequent sales of securities at~~the redemption, which was $2,719,538, was accounted for in a ~~price lower than the original conversion price. There are additional 10% adjustments~~manner similar to ~~the conversion price for events set forth in the agreement, including if the conversion price is less than $0.01, if the Company is not DTC eligible, the Company is no longer~~ a ~~reporting company, or the note cannot be converted into free trading shares on or after nine months from issue date.~~ dividend.

Common Shares Issued to Consultants

On ~~December 13, 2018 the holder converted $11,200 of principal into 4,000,000~~April 14, 2021, 500,000 shares of common stock were issued to a consultant per an agreement entered into on January 20, 2021 for advisory services for a two-year period. The shares had a fair value of $195,000, based on the ~~Company.~~ market price of $0.39 on the grant date. 62,500 common shares shall vest each quarter through October 1, 2022, at $24,275, with $73,126 vested through the three months ended June 30, 2021.

On May 24, 2021, the Company entered into an agreement with a consultant, with a three-month term, that shall automatically renew each three ~~separate dates during~~months unless one party terminates the agreement. The compensation shall be $12,500 in cash per month for the first ~~quarter of the fiscal year ending March 31, 2021, the remaining outstanding balance was converted into 35,887,170~~six months and $15,000 per month thereafter. Also included in compensation are 200,000 shares of common stock, with a fair value of $99,600 based upon the ~~Company, at a conversion rate of $0.006.~~

~~On March 1, 2019, the Company entered into a 10% convertible promissory note for $168,000, with an OID of $18,000, for a purchase~~market price of ~~$150,000, which originally matured on November 1, 2019.~~$0.50 upon the grant date. The maturity date has been extended to September 1, 2020, with the noteholders waiving the default penalties through December 31, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 100% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3 (a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.25. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. ~~On December 21,~~ ~~2020, the outstanding balance of $168,000 and accrued interest of $30,847 was converted into 795,387~~ shares of common stock ~~of the Company, at a conversion rate of $0.25.~~

~~On April 17, 2019, the Company entered into a 10% convertible promissory note for $110,000,~~will vest in quarterly installments, with ~~an OID of $10,000, for a purchase price of $100,000, which matures on January 23, 2020.~~50,000 to vest immediately. The maturity date has been extended to September 1, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the "bid" price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3 (a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.124. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. On September 14, 2020, the outstanding balance of $110,000 was converted into 1,014,001 shares of common stock ofhave not yet been issued, and therefore the ~~Company,~~50,000 vested shares, at ~~a conversion rate of $0.124.~~

~~Sale and Issuance of Common Stock~~

During the nine months ended December 31, 2020, the Company issued 39,735,627 shares of the Company’s common stock upon conversion of approximately $564,000 of their outstanding convertible debt and accrued interest.

~~During the nine months ended December 31, 2020, the Company has converted 3,554 Series B PS plus 141 Series B PS dividends-in-kind into 97,761,030 shares of the Company’s common stock.~~

~~Common~~$24,900, are included in Shares ~~Issued to Consultants~~

payable.

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On August 24, 2020, the Company issued 1,500,000 shares of common stock to a consultant per an agreement entered into on June 25, 2020. The agreement has a six month term, and therefore the fair value of $67,500, based on the market value of $0.045 on the grant date, will be recognized over the term of the agreement, with $32,500 and $67,500 expensed during the three and nine months ended December 31, 2020. On December 25, 2020, the Company renewed the agreement for an additional six months. As consideration for the agreement the Company issued 1,500,000 shares of common stock to the consultant. The agreement has a ~~six month~~six-month term, and therefore the fair value of $616,500, based on the market value of $0.041 on the grant date, iswas recognized in Prepaid expense asto be amortized over the six-month term. As of the ~~period~~year end ~~December~~March 31, ~~2020, and will be~~2021, $308,250 remained in Prepaid expense with $308,250 recognized in consulting expense for the year end March 31, 2021. The remaining $308.250 was expensed ~~over the term of the agreement.~~

~~Series B Preferred Equity Offering~~

On September 5, 2019, the Board authorized the issuance of 5,000 preferred shares to be designated as Series B Preferred Stock. The Series B PS have a par value of $0.0001, a stated value of $1,200 and no voting rights. The Series B PS are redeemable at the Company's option, at percentages ranging from 120% to 135% for the first 180 days, based on the passage of time. The Series B are also redeemable at the holder’s option, upon the occurrence of a triggering event which includes a change of control, bankruptcy, and the inability to deliver Series B PS requested under conversion notices. The triggering redemption amount is at the greater of (i) 135% of the stated value or (ii) the product of the volume-weighted average price (“VWAP”) on the day proceeding the triggering event multiplied by the stated value divided by the conversion price. As the redemption feature at the holder’s option is contingent on a future triggering event, the Series B PS is considered contingently redeemable, and as such the preferred shares are classified in equity until such time as a triggering event occurs, at which time they will be classified as mezzanine.

The Series B PS is convertible, at the discounted market price which is defined as the lowest VWAP over last 20 days. The conversion price is adjustable based on several situations, including future dilutive issuances. As the Series B PS does not have a redemption date and is perpetual preferred stock, it is considered to be an equity host instrument and as such the conversion feature is not required to be bifurcated as it is clearly and closely related to the equity host instrument.

~~During the nine months ended December 31, 2020, the Company received $3,250,000 for the issuance of 3,250 Series B PS.~~

~~Series D Preferred Equity Offering~~

On December 18, 2020, the Company entered into securities purchase agreements (the “Purchase Agreement”) with GHS Investments LLC, Platinum Point Capital LLC and BHP Capital NY (collectively, the “Purchaser”) , whereby, at the closing, each Purchaser agreed to purchase from the Company, up to 5,000 shares of the Company’s Series D Convertible Preferred Stock, par value $0.0001 per share (the “Series D Preferred Stock”), at a purchase price of $1,000 per share of Series D Preferred Stock. The aggregate purchase price per Purchaser for the Series D Preferred Stock is $5,000,000. In connection with the sale of the Series D Preferred Stock, the Purchasers received 6,000,000 shares of the Company’s common stock, par value $0.0001 (the “Commitment Shares”), which have a fair value of $1,616,250 based on the market price of the common shares of $0.27 on the date of the Series D PS purchase.

Each holder of Series D Preferred Stock shall be entitled to receive, with respect to each share of Series D Preferred Stock then outstanding and held by such holder, dividends at the rate of twelve percent (12%) per annum (the “Preferred Dividends”). Dividends may be paid in cash or in shares of Preferred Stock at the discretion of the Company.

The Series D PS are convertible into Common Stock at the election of the holder of the Series D PS at any time following five days after a qualified offering (as defined in the Purchase Agreement) at a 35% discount to the offering price, or, if a qualified offering has not occurred, at a price of $0.10 per share, subject to adjustment as set forth in the designation.

The Series BD PS shall be redeemed by the Corporation on the date that is no later than one calendar year from the date of its issuance. The Series D PS are also redeemable at the Company's option, at percentages ranging from 115% to 125% for the first 180 days, based on the passage of time. The Company shall redeem the Series D PS in cash upon a three business days prior notice to the holder or the holder may convert the Series D PS within such three business days period prior to redemption. Additionally, the holder shall have the right to either redeem for cash or convert the Preferred Stock into Common Stock within three business days following the consummation of a qualified offering. The Series D PS are also redeemable at the holder’s option, upon the occurrence of a triggering event which includes a change of control, bankruptcy, and the inability to deliver shares of the Company’s common stock requested under conversion notices. The triggering redemption amount is 150% of the stated value.

2021.

Going Concern

The audited consolidated financial statements contained in this quarterly report on Form 10-Q have been prepared, assuming that the Company will continue as a going concern. The Company has accumulated losses through the period to ~~December 31, 2020~~June 30, 2021 of approximately ~~$49,962,000~~$67,408,000 as well as negative cash flows from operating activities of approximately ~~$1,014,000.~~$5,119,000. Presently, the Company does not have sufficient cash resources to meet its plans in the twelve months following the date of issuance of this filing. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management is in the process of evaluating various financing alternatives in order to finance the continued build-out of our equipment and for general and administrative expenses. These alternatives include raising funds through public or private equity markets and either through institutional or retail investors. Although there is no assurance that the Company will be successful with our ~~fund raising~~fund-raising initiatives, management believes that the Company will be able to secure the necessary financing as a result of ongoing financing discussions with third party investors and existing shareholders.

The consolidated financial statements do not include any adjustments that may be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent on its ability to obtain additional financing as may be required and ultimately to attain profitability. If the Company raises additional funds through the issuance of equity, the percentage ownership of current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to the rights, preferences and privileges of the Company’s common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict its future plans for developing its business and achieving commercial revenues. If the Company is unable to obtain the necessary capital, the Company may have to cease operations.

Future Financing

We 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 $2,500,000 to cover all of our capital and operational expenses over the next 12 months, not including any capital expenditures needed as part of any commercial scale-up of our equipment. These funds may be raised through equity financing, debt financing, or other sources, which may result in further dilution in the equity ownership of our shares. 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.

Off-Balance Sheet Arrangements

We 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.

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Effects of Inflation

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

Critical Accounting Policies and Estimates

Our significant accounting policies are more fully described in the notes to our financial statements included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020. We believe that the accounting policies below are critical for one to fully understand and evaluate our financial condition and results of operations.

Fair Value Measurement

The fair value measurement guidance clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in the valuation of an asset or liability. It establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under the fair value measurement guidance are described below:

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities;

Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; or

Level 3 - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

The Company did not have any Level 1, Level 2 or Level 23 assets and liabilities ~~as of December 31, 2020~~at September 30, 2021 and March 31, ~~2020.~~

~~The Derivative and warrant liabilities are Level 3 fair value measurements.~~

2021.

Basic and Diluted Earnings/Loss per Common Share

Basic and diluted earnings or loss per share (“EPS”) amounts in the consolidated financial statements are computed in accordance with 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.~~period For the ~~nine~~six months ended ~~December 31, 2020,~~September 30, 2021, the Company had ~~a 1,920~~with Redeemable Convertible Preferred stock with approximately 9,842,000 underlying common shares, ~~of Series B PS whose approximately 12,308,000 underlying shares are convertible at the investors’ option at a conversion price based on the lowest market price over the last 20 trading days,~~ and ~~5,000 of Series B PS whose approximately 50,000,000 underlying shares are convertible at the investors’ option at a fixed conversion price of $0.10,~~10,000,000 warrants outstanding which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. For the ~~nine~~six months ended ~~December 31, 2019,~~September 30, 2020, the Company had approximately ~~$709,000~~$168,000 in ~~principal on~~ convertible debentures whose approximately ~~22,895,000~~1,560,000 underlying shares are convertible at the holders’ option at conversion prices ranging from ~~$0.01~~$0.124 to ~~$0.30~~$0.25 for fixed conversion rates ~~and 57% - 60% of the defined trading price for variable conversion rates and approximately 848,000 warrants~~ ~~with an exercise price of 45% of the market price of the Company’s common stock,~~ which were not included in the calculation of diluted EPS as their effect would be anti-dilutive.

Impairment of Long-lived Assets and Long-lived Assets

The Company will periodically evaluate the carrying value of long-lived assets to be held and used when events and circumstances warrant such a review and at least annually. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost to dispose.

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Recently Adopted Accounting Pronouncements

Our recently adopted accounting pronouncements are more fully described in Note 2 to our financial statements included herein for the quarter ended ~~December 31, 2020.~~

September 30, 2021.

Recently Issued Accounting Standards

During the ~~year ended March 31, 2020,~~period ending September 30, 2021, 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable. As a smaller reporting company, we are not required to provide the information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (who is our Principal Executive Officer) and our Chief Financial Officer and Treasurer (who is our Principal Financial Officer and Principal Accounting Officer), of the effectiveness of the design of ourmaintain disclosure controls and procedures (as that term is defined byin Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act ~~Rules 13a-15(e) or 15d-15(e)~~of 1934, as amended (the “Exchange Act”)) ~~as of September 30, 2020 pursuant~~that are designed to Exchange Act Rule 13a-15. Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2020 in ensuringensure that information required to be disclosed ~~by us~~ in our reports ~~that we file or submit~~ under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and ~~forms. This conclusion~~forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.

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Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our principal executive officer and principal financial officer concluded that, our disclosure controls and procedures were not effective due to the material weaknesses below which are indicative of many small companies with small number of staff:

	·	inadequate segregation of duties consistent with control objectives;
	·	lack of independent Board of Directors and absence of Audit Committee to exercise oversight responsibility related to financial reporting and internal control;
	·	lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; and
	·	lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives.

Management’s Annual Report on ~~findings~~Internal Control Over Financial Reporting

Management of and its consolidated subsidiaries is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of its principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that ~~constituted material weaknesses.~~ controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Material Weakness in Internal Control over Financial Reporting

Management assessed the effectiveness of the Company’s internal control over financial reporting as of September 30, 2021 based on the framework established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that the Company’s internal control over financial reporting as of September 30, 2021 was not effective.

A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of ~~control~~ deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of ~~the Company’s~~our annual or interim financial statements will not be prevented or detected on a timely basis.

Management continues to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

Changes in Internal Control ~~Over~~over Financial Reporting

There ~~were~~have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during ~~the~~our first quarter ended ~~December 31, 2020~~September 30, 2021 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

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PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Except as described below, we are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

RGA Labs, Inc.

non-competition agreement.

Gary Shover

by all parties.

ITEM 1A. RISK FACTORS

Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in Item 1A1 of our Annual Report on Form 10-K for the year ended March 31, ~~2020.~~2021. The risks described in our Form 10-K and this Report are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.

There have been no material changes to the risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended March 31, ~~2020,~~2021, filed with SEC on June ~~26, 2020,~~29, 2021, other than the following:

~~Our purchase of the assets from VeroBlue Farms USA will require us to devote a significant amount of attention to that operation and will require further investment to develop such assets.~~

On December 15, 2020, we entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation (“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). The agreement called for us to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems and other improvements located on such real property) of Iowa’s First. The facility was originally designed for the growth of barramundi fish, but the company never began production and declared bankruptcy on September 21, 2018. Our plan is to begin a modification process to convert the plant to produce shrimp. The three Iowa facilities contain the tanks and infrastructure that will be used to support the production of shrimp with the incorporation of the Company's patented EC platform technology. The Company also plans to convert additional square footage currently used as storage to a shrimp processing plant. Final plans and decisions related to this project continue to be developed and we can provide no assurance that we will be able to provide the time and additional resources to further such development.

We face risks related to Novel Coronavirus (COVID-19) which could significantly disrupt our research and development, operations, sales, and financial results.

Our business could be adversely impacted by the effects of the Novel Coronavirus (COVID-19). In addition to global macroeconomic effects, the ~~COVID-19~~Novel Coronavirus (COVID-19) outbreak and any other related adverse public health developments could cause disruption to our operations and manufacturing activities. Our third-party equipment manufacturers, third-party raw material suppliers, and consultants have been and will be disrupted by worker absenteeism, quarantines and restrictions on employees’ ability to work, office and factory closures, disruptions to ports and other shipping infrastructure, border closures, or other travel or health-related restrictions which could adversely affect our business and operations. In addition, we have experienced and will experience disruptions to our business operations resulting from quarantines, self-isolations, or other movement and restrictions on the ability of our employees to perform their jobs that may impact our ability to develop and design our products and services in a timely manner or meet required milestones.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Shares~~

There were no unregistered sales of ~~Common Stock~~

the Company’s equity securities during the quarter ended June 30, 2021 that were not previously reported in a Current Report on Form 8-K except as follows:

On August 24, 2020, the Company issued 1,500,000 shares of common stock to a consultant per an agreement entered into on June 25, 2020. On December 25, 2020, the Company renewed anthe agreement ~~with a consultant~~ for an additional six months. As consideration for the agreement the Company issued 1,500,000 shares of common stock to the consultant.

~~Series B Preferred Shares~~

During the nine months ended December 31, 2020, the Company converted 3,554 Series B Preferred Shares plus 141 Series B Preferred Share dividends-in-kind into 97,761,030 shares of the Company’s common stock.

The above securities were issued in reliance on ~~either the safe harbor of Rule 144 pursuant to Section 4(a)(1) of the Securities Act of 1933, as amended (in the case of shares issued pursuant to conversions of other securities) or~~ the exemption under Section 4(a)(2) of the Securities ~~Act (in the case of the issuance of the Series B PS and the shares issued to the consultants).~~Act. The issuance of the ~~Series B PS and the~~ shares ~~issued~~ to the ~~consultants~~consultant qualified for exemption under Section 4(a)(2) since the issuance by us did not involve a public offering. The ~~offerings were~~offering was not a “public ~~offerings”~~offering” as defined in 4(a)(2) due to the insubstantial number of persons involved in the transactions, manner of the issuance and number of securities issued. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, the ~~investors~~investor had the necessary investment intent as required by Section 4(a)(2) since they agreed to and received securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering”. Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(a)(2) of the Securities ~~Act for the issuance of the Series B PS and the shares issued to the consultants.~~

Act.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

��

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

~~We are providing the following disclosure in lieu~~

None.

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ITEM 6. EXHIBITS

		Incorporated by Reference
Exhibit Number	Exhibit Description		Form	Exhibit	Filing Date
3.1	Certificate of Designation of Series E Preferred Stock		8-K	3.1	4/15/2021
4.1	Form of Warrant Issued April 2021.		8-K	4.1	4/15/2021
10.1	Form of Securities Purchase Agreement, dated as of April 14, 2021, by and between the Company and the Purchaser		8-K	10.1	4/15/2021
10.2	Form of Exchange Agreement, dated as of April 14, 2021 by and between the Company and a holder of the Series D Preferred Stock		8-K	10.2	4/15/2021
10.3	Securities Purchase Agreement by and between NaturalShrimp Incorporated and F&T Water Solutions, LLC, dated May 19, 2021		8-K	10.1	6/1/2021
10.4	Patents Purchase Agreement by and between NaturalShrimp Incorporated and F&T Water Solutions, LLC, dated May 19, 2021.		8-K	10.2	6/1/2021
10.5	Form of Leak-Out Agreement by and between NaturalShrimp Incorporated and F&T Water Solutions, LLC, dated May 19, 2021.		8-K	10.3	6/1/2021
10.6	Form of Securities Purchase Agreement, dated as of April 14, 2021, by and between the Company and the Purchaser, incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company with the SEC on April 15, 2021.		8-K	10.1	7/2/2021
31.1*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2*	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.
32.1**	Section 1350 Certification of Chief Executive Officer.
32.2**	Section 1350 Certification of Chief Financial Officer.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema Document
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

** Furnished herewith.

# Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of filing a Current Report on Form 8-K relating to: “Item 1.01—Entry into a Material Definitive Agreement” and “Item 2.03—Creation of Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant” of Form 8-K.

On December 15, 2020, the Company entered into an Asset Purchase Agreement (“APA”) between VeroBlue Farms USA, Inc., a Nevada corporation (“VBF”), VBF Transport, Inc., a Delaware corporation (“Transport”), and Iowa’s First, Inc., an Iowa corporation (“Iowa’s First”) (each a “Seller” and collectively, “Sellers”). Transport and Iowa’s First were wholly-owned subsidiaries of VBF. The agreement called for the Company to purchase all of the tangible assets of VBF, the motor vehicles of Transport and the real property (together with all plants, buildings, structures, fixtures, fittings, systems and other improvements located on such real property) of Iowa’s First. The consideration was $10,000,000, consisting of $5,000,000 in cash, paid at closing on December 17, 2020, (ii) $3,000,000 payable in 36 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date, and (iii) $2,000,000 payable in 48 months with interest thereon at the rate of 5% per annuum, interest only payable quarterly on the first day of the quarter, with the remaining balance to be paid to VBF as a balloon payment on the maturity date.Regulation S-K. The Company ~~also agreed to issue 500,000 shares~~will furnish supplementally copies of ~~common stock as a finder’s fee, which would be considered as transaction fees in relation~~omitted schedules and exhibits to the ~~asset acquisition, with a fair value of $135,000 based on the market value of the common stock as of the closing date of the acquisition.~~

~~ITEM 6. EXHIBITS~~

Securities and Exchange Commission or its staff upon its request.

~~Exhibit~~ ~~Number~~		~~Description~~
~~3.1~~		~~Certificate of Designation of the Series D Convertible Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on December 22, 2020)~~34
~~10.1~~		~~Form Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on December 22, 2020)~~
~~10.2~~*		~~Asset Purchase Agreement between NaturalShrimp Incorporated and~~ ~~VeroBlue Farms USA, Inc. and certain subsidiaries~~Table of ~~VeroBlue Farms, dated December 15, 2020.~~ Contents
~~31.1~~*		~~Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer~~
~~31.2~~*		~~Section 302 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer~~
~~32.1~~**		~~Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer~~
~~32.2~~**		~~Section 906 Certification under the Sarbanes-Oxley Act of 2002 of the Principal Financial Officer and Principal Accounting Officer~~
101.INS*		~~XBRL Instance Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema Document~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase Document~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB*		~~XBRL Taxonomy Extension Label Linkbase Document~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~Filed herewith.~~

~~In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		NATURALSHRIMP INCORPORATED

~~Date: February 16, 2021~~ By:	~~By:~~	/s/ Gerald Easterling
	Gerald Easterling
		~~Gerald Easterling~~ Chief Executive Officer
		~~Chief~~(Principal Executive ~~Officer~~ Officer)
	Date: November 15, 2021	~~(Principal Executive Officer)~~

	~~NATURALSHRIMP INCORPORATED~~

~~Date: February 16, 2021~~ By:	~~By:~~	/s/ William Delgado
		William Delgado
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)
	Date: November 15, 2021

ASSETS	December 31, 2020	March 31, 2020
Current assets	(unaudited)
Cash	$311,848	$109,491
Prepaid expenses	778,019	128,693
Insurance settlement	-	917,210

Total current assets	1,089,867	1,155,394

Fixed assets	12,286,515	707,808

Other assets
Construction-in-process	1,719,945	-
Right of Use asset	275,400	275,400
Deposits	20,633	178,198

Total other assets	2,015,978	453,598

Total assets	$15,392,360	$2,316,800

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$896,379	$641,146
Accrued interest	64,246	81,034
Accrued interest - related parties	175,520	296,624
Other accrued expenses	628,204	1,204,815
Short-term Promissory Note and Lines of credit	575,910	570,497
Bank loan	8,438	8,904
PPP loan	103,200	-
Convertible debentures	-	463,161
Notes payable - related parties	1,247,162	1,221,162
Dividends payable	182,639	-
Derivative liability	-	176,000
Warrant liability	-	90,000

Total current liabilities	3,881,698	4,753,343

Bank loans, less current maturities	208,493	225,837
Notes payable	5,000,000
Note payable - related party, less current maturities	239,604	-
Lease Liability	275,400	275,400

Total liabilities	9,605,195	5,254,580


Commitments and contingencies (Note 11)


Series D Redeemable Convertible Preferred stock, $0.0001 par value, 20,000 shares authorized, 5,000 and 0 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively	208,333	-


Stockholders' deficit
Series A Convertible Preferred stock, $0.0001 par value, 5,000,000 shares authorized, 5,000,000 shares issued and outstanding at December 31, 2020 and March 31, 2020	500	500
Series B Convertible Preferred stock, $0.0001 par value, 5,000 shares authorized, 1,920 and 2,250 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively	-	-
Common stock, $0.0001 par value, 900,000,000 shares authorized, 544,989,181 and 379,742,524 shares issued and outstanding at December 31, 2020 and March 31, 2020, respectively	54,500	37,975
Additional paid in capital	55,437,431	43,533,242
Stock Payable	135,000	-
Accumulated deficit	(49,961,843)	(46,427,396)
Total stockholders' deficit attributable to NaturalShrimp, Inc. shareholders	5,665,588	(2,855,679)

Non-controlling interest in NAS	(86,756)	(82,101)

Total stockholders' deficit	5,578,832	(2,937,780)

Total liabilities mezzanine and stockholders' deficit	$15,392,360	$2,316,800

	For the Three Months Ended		For the Nine months Ended
	December 31, 2020	December 31, 2019	December 31, 2020	December 31, 2019

Sales	$-	$-	$-	$-

Operating expenses:
General and administrative	394,654	306,834	1,131,662	944,571
Research and development	-	101,500	79,550	101,500
Facility operations	154,470	41,375	234,113	180,934
Depreciation and amortization	18,173	15,958	37,850	41,521

Total operating expenses	567,297	465,667	1,483,175	1,268,526

Net loss from operations	(567,297)	(465,667)	(1,483,175)	(1,268,526)

Other income (expense):
Interest expense	(42,541)	(40,820)	(102,057)	(160,351)
Amortization of debt discount	-	(38,831)	-	(515,204)
Financing costs	-	(53,528)	(64,452)	(217,746)
Change in fair value of derivative liability	-	58,000	(29,000)	19,000
Change in fair value of warrant liability	-	-	-	-
Loss on warrant settlement	-	-	-	(50,000)
			-

Total other income (expense)	(42,541)	(75,179)	(195,509)	(924,301)

Loss before income taxes	(609,838)	(540,846)	(1,678,684)	(2,192,827)

Provision for income taxes	-	-	-	-

Net loss	(609,838)	(540,846)	(1,678,684)	(2,192,827)

Less net loss attributable to non-controlling interest	(1,074)	-51363	(4,655)	(51,363)

Net loss attributable to NaturalShrimp Inc.	(608,764)	(489,483)	(1,674,029)	(2,141,464)

Amortization of beneficial conversion feature on PS	(443,333)	(380,000)	(1,543,333)	(380,000)
Dividends	(172,291)	-	(317,083)	-

Net loss available for common stockholders	$(1,224,388)	$(869,483)	$(3,534,445)	$(2,521,464)

EARNINGS PER SHARE (Basic and diluted)	$(0.00)	$(0.00)	$(0.01)	$(0.01)

	451,549,772	345,260,292	419,177,832	326,835,226

	Series A Preferred stock		Series B Preferred stock		Common stock		Additional paid	Stock	Accumulated	Non-controlling	Total stockholders'
	Shares	Amount	Shares	Amount	Shares	Amount	in Capital	Payable	deficit	interest	deficit

Balance March 31, 2020	5,000,000	$500	2,250	$-	379,742,524	$37,975	$43,533,243	-	$(46,427,396)	$(82,101)	(2,937,780)

Issuance of common stock upon conversion					37,926,239	3,793	222,644				226,437
Reclass of derivative liability upon conversion or redemption of related convertible debentures							205,000				205,00
Purchase of Series B Preferred shares			1,250	-			1,250,000				1,250,000
Beneficial conversion feature related to the Series B Preferred Shares							293,000		(293,000)		-
Dividends payable on Series B PS									(144,792)		(144,792)
Series B PS Dividends in kind issued			50	-			56,458				56,458
Conversion of Series B PS to common stock			(800)	-	33,569,730	3,357	(3,357)				-
Common stock issued in Vista Warrant settlement					17,500,000	1,750	608,250				610,000
Reclass of warrant liability upon the cancellation of warrants under Vista Warrant settlement							90,000				90,000
Common stock issued to consultant					1,250,000	125	61,125				61,250

Net loss									(477,072)	(1,895)	(478,967)
											-
Balance June 30, 2020	5,000,000	$500	2,750	$-	469,988,493	$47,000	$46,316,363	$-	$(47,342,260)	$(83,996)	$(1,062,394)

Issuance of common stock upon conversion					1,014,001	101	125,635				125,736
Purchase of Series B Preferred shares			1,250	-			1,250,000				1,250,000
Beneficial conversion feature related to the Series B Preferred Shares			65	-			807,000		(807,000)		-
Dividends payable on Series B PS									(83,960)		(83,960)
Series B PS Dividends in kind issued							77,984				77,984
Conversion of Series B PS to common stock			(2,369)	-	58,521,249	5,852	(5,852)				-
Common stock issued to consultant					1,500,000	150	67,350				67,500

Net loss									(588,193)	(1,686)	(589,879)

Balance September 30, 2020	5,000,000	$500	1,696	$-	531,023,743	$53,103	$48,638,480	$-	$(48,821,413)	$(85,682)	$(215,012)

Issuance of common stock upon conversion					795,387	80	198,768				198,848
Purchase of Series B Preferred shares			750	-			750,000				750,000
Beneficial conversion feature related to the Series B Preferred Shares							235,000		(235,000)		-
Dividends payable on Series B Preferred Shares									(88,333)		(88,333)
Conversion of Series B Preferred Shares to common stock			(526)	-	5,670,051	567	(567)				-
Beneficial conversion feature related to the Series D Preferred Shares							5,000,000				5,000,000
Amortization of beneficial conversion feature related to Series D Preferred Shares									(208,333)		(208,333)
Commitment shares issued with Series D Preferred Shares					6,000,000	600	(600)				-
Common stock issued to consultant					1,500,000	150	616,350				616,500
Common stock to be issued as finder's fees related to asset acquisition								135,775			135,775

Net loss									(608,764)	(1,074)	(609,838)

Balance December 31, 2020	5,000,000	$500	1,920	$-	544,989,181	$54,500	$55,437,431	135,775	$(49,961,843)	$(86,756)	$5,579,607

	2020	2019
Derivative liability balance at beginning of period	$176,000	$157,000
Reclass to equity upon conversion or redemption	(205,000)	(8,000)
Change in fair value	29,000	(19,000)
Balance at end of period	$-	$130,000

	2020	2019
Warrant liability balance at beginning of period	$90,000	$93,000
Reclass to equity upon cancellation or exercise	(90,000)	-
Change in fair value	-	-
Balance at end of period	$-	$93,000

Equipment	$7,014,000	69.2%
Vehicles	202,000	2.0%
Buildings	2,797,000	26.6%
Land	122,000	1.2%
	$10,135,000	100%

	Three Months Ended December 31,
	2020	2019

Salaries and related expenses	$97,090	$109,733
Professional fees	228,967	116,844
Other general and administrative expenses	64,762	75,906
Rent	3,835	4,351
Facility operations	154,470	41,375
Research and development	-	101,500
Depreciation	18,173	15,958
Total	$567,297	$465,667

	Nine Months Ended December 31,
	2020	2019

Salaries and related expenses	$311,623	$337,265
Professional fees	516,453	266,455
Other general and administrative expenses	291,908	328,688
Rent	11,678	12,163
Facility operations	234,113	180,934
Research and development	79,550	101,500
Depreciation	37,850	41,521
Total	$1,483,175	$1,268,526

	December 31,	March 31,
	2020	2020
Current assets	$1,089,867	$1,155,394
Current liabilities	3,881,698	4,753,343
Working capital deficiency	$2,791,831	$3,597,949