NaturalShrimp Inc: Form 10-Q for the period ended Dec 31, 2025

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.

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

We use United States GAAP financial measures, unless otherwise noted. All of the GAAP financial measures used by us in this report relate to the inclusion of financial information. This discussion and analysis should be read in conjunction with our financial statements and the notes thereto included elsewhere in this quarterly report. All references to dollar amounts in this section are in United States dollars, unless expressly stated otherwise.

Overview

NaturalShrimp Incorporated (“NaturalShrimp” or the “Company”), a Nevada corporation, is a former biotechnology company that was focused on growing 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.

During March of 2026, NaturalShrimp Incorporated entered into an Intellectual Property Acquisition and Management Transition Agreement (the “Agreement”) with Hydrenesis, Inc., a Florida corporation (“Hydrenesis”), and David Antelo. Pursuant to the agreement:

• The Company will transition its operations toward the commercialization of aquaculture and water treatment technologies; and
• Certain governance and control rights have been transferred pursuant to the Agreement, although the Agreement had not been fully consummated as of the date of this filing.
• Hydrenesis will grant the Company a perpetual license to certain intellectual property, technology rights, know-how, and related commercialization rights, subject to the terms and conditions of the agreement
• The Company’s outstanding obligation to Hydrenesis in the amount of approximately $1,034,112 will be converted into equity at Closing;
• The Company has approved and executed Certificates of Designation for Series P, Series P-2, and Series L Preferred Stock, which are expected to be filed with the Nevada Secretary of State;
• Existing liabilities, obligations, and legacy securities, including Series A Preferred Stock and Series F Preferred Stock, will be restructured, amended, cancelled, or exchanged into Series L Preferred Stock;

The agreement with Hydrenesis was not yet consummated as of the date of this filing.

Receivership and Liquidation

On September 4, 2024, Streeterville Capital, LLC, a Utah limited liability company, and Bucktown Capital, LLC, a Utah limited liability company (collectively, “Lenders”), filed a Verified Emergency Motion for Appointment of Receiver (the “Motion”) under Civil Case No. 240907138, in the District Court of Salt Lake County, Utah, against NaturalShrimp, Inc. (“NaturalShrimp”).

The Motion alleged, among other things, that NaturalShrimp had defaulted under the terms of its loan agreements with the Lenders. The Motion sought the appointment of a Receiver to immediately take control of NaturalShrimp’s assets to preserve the same.

An order was entered ex parte by the Utah State Court in the Receivership Case on September 9, 2024 granting the relief requested by Lenders. The Utah State Court duly appointed Amplēo Turnaround and Restructuring, LLC (the “Receiver”) as the receiver over NaturalShrimp’s assets. The Utah State Court’s order further scheduled a hearing to be held on September 17, 2024, on a preliminary injunction to address issues raised in the Motion.

On November 20, 2024, the Lenders and NaturalShrimp filed a Verified Amended and Stipulated Emergency Motion for Immediate Appointment of a Receiver in the Receivership Case.

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

On February 11, 2025, the Receiver filed a Motion for Approval to Sell Substantially all of the Receivership Entities’ Assets to Streeterville Captial, LLC and Bucktown Captial, LLC (or Their Designees) or Any Other Party With a Higher and Better Offer Free and Clear of All Liens, Interests, Claims, and Encumbrances (the “Sale Motion”) in the Receivership Case. The Sale Motion sought the Utah State Court’s approval for the Receiver to sell substantially all of the Receivership Entities’ assets free and clear of all liens, interests, claims, and encumbrances to Streeterville and Bucktown Capital, through their designated entities, NaturalShrimp Farms, Inc. (“NV Purchaser”), a Nevada corporation, Iowa Shrimp Holdings, LLC (“IA Purchaser”), an Iowa limited liability company, Texas Shrimp Holdings, LLC (“TX Purchaser” or together with NV Purchaser and IA Purchaser, the “Purchasers”), a Texas limited liability company, for a roughly $35,703,789.87 credit bid (based on a secured and administrative claim basis) and $100,000 cash, pursuant to the terms and conditions set forth in that certain Asset Purchase Agreement (“APA”) between Trustee and Purchasers. The order to sell the assets was approved on March 30, 2025 and the title to the assets was transferred to the lenders on May 14, 2025.

Liquidity and Capital Resources

The Company had limited liquidity as of December 31, 2025 and is currently working on a plan with its existing creditors on how to settle its remaining outstanding balances, which were primarily comprised of i) payables to finance and legal service providers and ii) loans and the corresponding accrued interest.

Results of Operations

During the nine months ended December 31, 2025, the Company settled its outstanding liabilities to both Streeterville and Buckstown (approximately $36 million as of March 31, 2025) through the transfer of ownership rights to its fixed assets and intangible assets. As of the date of the transfer, i) the outstanding debt to those entities was considered extinguished and ii) the fixed assets and intangible assets were derecognized. The Company had limited other activity during the period, as reflected in the Statement of Change in Net Assets.

Critical Accounting Estimates

Liquidation Basis of Accounting

In accordance with ASC 205-30, Liquidation Basis of Accounting, the Company prepares its financial statements using the liquidation basis of accounting when liquidation is imminent. Liquidation is considered imminent when either of the following occurs-i) A plan for liquidation has been approved by the person or persons with the authority to make such a plan effective, and the likelihood is remote that either execution of the plan will be blocked by other parties or the entity will return from liquidation and ii) A plan for liquidation is imposed by other forces, and the likelihood is remote that the entity will return from liquidation.

When using the liquidation basis of accounting, the Company will i) recognize other items that is previously had not recognized but it expects to sell in liquidation or use to settle liabilities ii) accrue costs and income that it expects to incur or earn through the end of its liquidation if and when it has a reasonable basis for estimation iii) measure its assets to reflect the estimated amount of cash or other consideration that it expects to collect in settling or disposing of those assets in carrying out its plan for liquidation and iv) measure its liabilities in accordance with the measurement provision of other topics that it would otherwise apply to those liabilities.

Recently Issued Accounting Standards

As the Company is currently reporting under the liquidation basis of accounting, it does not believe that there are any recently issued accounting standards that would be material to its financial statements.

Evaluation of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and 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 and evaluating our disclosure controls and procedures, management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

The Company’s 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 defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of the end of the period covered by this Report.

Based upon that evaluation , our principal executive officer and principal financial officer concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Thus, there remains a reasonable possibility that a material misstatement of the Company’s interim financial statements will not be prevented or detected on a timely basis. This does not include an evaluation by the Company’s registered public accounting firm regarding the Company’s internal control over financial reporting. Accordingly, we cannot provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, to allow our principal financial and executive officers to make timely decisions regarding required disclosures as of December 31, 2025.

Management’s evaluation was based on the following material weaknesses in our internal control over financial reporting which existed as of March 31, 2025, and which continue to exist, as discussed in the Company’s Annual Report on Form 10-K:

• Inadequate segregation of duties consistent with control objectives;
• Lack of independent board of directors (as of the balance sheet date) and absence of an 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.

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 Financial Reporting

There 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 nine months ended December 31, 2025 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.