NaturalShrimp Inc: Form 10-Q for the period ended Jun 30, 2026

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.

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.

Intellectual Property Agreement with Hydrenesis, Inc.

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 agreed to transition its operations toward the commercialization of aquaculture and water treatment technologies
• Certain governance and control rights were transferred
• Hydrenesis agreed to grant the Company a 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 $1.3 million will be converted into equity at Closing;
• The Company 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;

On June 25, 2026, NaturalShrimp Inc, Hydrenesis, Inc., and David Antelo entered into a First Amendment to the Intellectual Property Acquisition and Management Transition Agreement and Amended and Restated Perpetual Field-of-Use License Terms (the “Amendment”). The amendment confirmed that the intellectual property transfer contemplated by the original agreement did not occur. Instead, effective June 25, 2026, Hydrenesis granted the Company a perpetual, worldwide, exclusive, and sublicensable license to use and commercialize the licensed technology in aquaculture and related fields. However, as of June 30, 2026, i) the Company’s outstanding obligation to Hydrenesis had not been extinguished ii) No Series P or Series L preferred shares were issued and iii) no other existing liabilities or obligations (including preferred shares) were restructured, amended, cancelled or exchanged.

Liquidity and Capital Resources

The Company had limited liquidity as of June 30, 2026 and is currently working on a plan with its existing creditors in hopes to settle its outstanding obligations through the issuance of preferred shares. In addition, the Company has entered into an equity line of credit agreement whereby it could receive up to $5,000,000 in exchange for the issuance of common shares. The agreement requires the Company to achieve certain milestones prior to drawing on the equity line of credit. No funds were received from the agreement as of June 30, 2026.

Results of Operations

During the three months ended June 30, 2026, the Company had very limited activity other than the closing of the perpetual license agreement with Hydrenesis. Further, as a result of moving to the going concern basis of accounting during June of 2026 the Company has not presented going concern financial statements for the comparative period.

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

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses at each interim and annual reporting period. The amendments are effective for annual periods beginning after December 15, 2026, and reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the new ASU to its financial statements.

As of June 30, 2026, the Company had defaulted on $1,179,832 of notes payable. The Company is in active negotiations with the creditors, which are primarily former employees, to settle the outstanding loans. Further, the Company has also defaulted on its payment of $933,993 of accrued dividends stemming from its Series E, F and G preferred shares. Similar to the notes payable, the Company is in active negotiations with the preferred shareholders to settle the outstanding dividends payable.

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 June 30, 2026, 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 June 30, 2026.

Management’s evaluation was based on the following material weaknesses in our internal control over financial reporting which existed as of March 31, 2026, 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 fiscal quarter ended June 30, 2026 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.