NaturalShrimp: $11.9K cash, going-concern warning
At September 30, 2026, cash was $11,886 and current liabilities were $8,269,826; disclosure controls were ineffective.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
NaturalShrimp Inc (SHMP) reported a net loss of $83,417 for the three months ended September 30, 2026, all of which was general and administrative expense. Operating activities used $67,574 of cash, while financing provided $49,000 from Series M preferred shares. Cash was $11,886 and current liabilities were $8,269,826 at September 30, 2026.
Effective June 25, 2026, Hydrenesis granted NaturalShrimp a perpetual, worldwide, exclusive and sublicensable license to commercialize technology in aquaculture and related fields. Former executives cancelled Series A and Series F preferred shares totaling $43,612,500, recorded as a capital contribution. NaturalShrimp transitioned back to going-concern accounting, but disclosed substantial doubt about its ability to continue as a going concern within one year after the financial statements were issued, citing limited operations, limited cash and significant net liabilities. It reported defaults on $1,079,832 of notes payable and $933,993 of accrued dividends, and said disclosure controls were ineffective because of material weaknesses in internal controls.
After quarter-end, on October 19, 2026, the company received $50,000 in gross proceeds for 50 Series Q preferred shares to be issued.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- None.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Going-concern doubt extends through one year after the statements were issued.
- Major pointDisclosure controls were ineffective at September 30, 2026 because of material weaknesses.
- Major point$1,079,832 of notes payable was in default at September 30, 2026. 56% of market cap
- Major point$933,993 of accrued dividends was in default at September 30, 2026. 49% of market cap
Filing Explained
The completed 60 million-share exchange reduces existing holders’ percentage ownership, absent offsets; no preferred shares had yet been issued under the technology arrangement.
The company reports exchanging four Series G preferred shares on
Under the technology arrangement, the company agreed to issue Series P and P-2 preferred shares to David Antelo and Hydrenesis, but reported none issued by
Key Figures
Key Terms
going concern financial
liquidation basis of accounting financial
temporary equity financial
cumulative dividend financial
volume weighted average price financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
Why did SHMP report substantial doubt about its ability to continue as a going concern?
How much did SHMP receive from its Series Q financing after quarter-end?
What equity did SHMP agree to issue for the Hydrenesis technology license?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the Quarterly Period Ended
or
For the Transition Period from _________ to _________
Commission
file number:
(Exact name of registrant as specified in its charter)
(State or other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) | |
| (Address of Principal Executive Offices) | (Zip Code) |
(Registrant’s telephone number, including area code)
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 ☐
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 ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | 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 13(a) of the Exchange 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 November 10, 2026, there were
NATURALSHRIMP INCORPORATED
FORM 10-Q
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
TABLE OF CONTENTS
| Page | ||
| PART I. FINANCIAL INFORMATION | ||
| ITEM 1. | Financial Statements | |
| Condensed Balance Sheet as of September 30, 2026 | 3 | |
| Condensed Statement of Operations for the three months ended September 30, 2026 | 4 | |
| Condensed Statement of Cash Flows for the three months ended September 30, 2026 | 5 | |
| Condensed Statement of Changes in Shareholders Equity for the three months ended September 30, 2026 | 6 | |
| Condensed Statement of Net Liabilities in Liquidation as of March 31, 2026 | 7 | |
| Condensed Statement of Changes of Net Liabilities in Liquidation for the six months ended September 30, 2025 | 8 | |
| Notes to Condensed Financial Statements | 9 | |
| ITEM 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 16 |
| ITEM 3. | Quantitative and Qualitative Disclosures about Market Risk | 18 |
| ITEM 4. | Controls and Procedures | 18 |
| PART II. OTHER INFORMATION | 19 | |
| ITEM 1. | Legal Proceedings | 19 |
| ITEM 1A. | Risk Factors | 19 |
| ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 19 |
| ITEM 3. | Defaults Upon Senior Securities | 19 |
| ITEM 4. | Mine Safety Disclosures | 19 |
| ITEM 5. | Other Information | 19 |
| ITEM 6. | Exhibits | 19 |
| SIGNATURES | 20 | |
| 2 |
NATURALSHRIMP INCORPORATED
CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 2026
(Going Concern Basis)
| ASSETS | ||||
| Current assets | ||||
| Cash | $ | |||
| Prepaid expenses | ||||
| Total current assets | ||||
| Total assets | $ | |||
| LIABILITIES, MEZZANINE AND STOCKHOLDERS’ DEFICIT | ||||
| Current liabilities | ||||
| Accounts payable | $ | |||
| Accrued expenses | ||||
| Notes payable | ||||
| Dividends payable | ||||
| Mandatorily redeemable preferred shares | ||||
| Total current liabilities | ||||
| Total liabilities | ||||
| Commitments and contingencies | - | |||
| Series F Redeemable Convertible Preferred stock, $ | - | |||
| Series M Convertible Preferred stock, $ | ||||
| Redeemable convertible preferred stock | ||||
| Stockholders’ deficit | ||||
| Series A Convertible Preferred stock, $ | - | |||
| Common stock, $ | ||||
| Additional paid in capital | ||||
| Stock to be issued | ||||
| Subscription receivable | ( | ) | ||
| Accumulated deficit | ( | ) | ||
| Adjustment to net assets in liquidation | - | |||
| Total stockholders’ deficit | ( | ) | ||
| Total liabilities, mezzanine and stockholders’ deficit | $ |
The accompanying notes are an integral part of these consolidated financial statements.
| 3 |
NATURALSHRIMP INCORPORATED
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
(Going Concern Basis)
| Operating expenses: | ||||
| General and administrative | ||||
| Total operating expenses | ||||
| Net loss from operations | ( | ) | ||
| Income (loss) before income taxes | ( | ) | ||
| Provision for income taxes | - | |||
| Net income | ( | ) | ||
| Earnings per share (Basic and Diluted) | $ | ( | ) | |
| WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and Diluted) | ||||
| 4 |
NATURALSHRIMP INCORPORATED
STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||
| Net income | $ | ( | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities | ||||
| Changes in operating assets and liabilities: | ||||
| Prepaid expenses | ( | ) | ||
| Accounts payable | ||||
| Cash provided by operating activities | ( | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||
| Proceeds from sale of Series M Preferred Shares | ||||
| Cash provided by financing activities | ||||
| NET CHANGE IN CASH | ( | ) | ||
| CASH AT BEGINNING OF PERIOD | ||||
| CASH AT END OF PERIOD | $ | |||
| Non-Cash Investing and Financing Activities: | ||||
| Series M P/S dividend accrual | $ | |||
| Capital contribution-accrued compensation forgiveness | $ | |||
| Capital contribution-payable forgiveness | $ | |||
| Capital contribution-series A and F preferred shares cancellation | $ | |||
| Capital contribution-loan forgiveness | $ | |||
The accompanying notes are an integral part of these consolidated financial statements.
| 5 |
NATURALSHRIMP INCORPORATED
STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026
| Shares | Amount | Shares | Amount | in Capital | issued | receivable | deficit | deficit | ||||||||||||||||||||||||||||
| Series A Preferred stock | Common stock | Additional paid | Stock to be | Subscription | Accumulated | Total stockholders’ | ||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | in Capital | issued | receivable | deficit | deficit | ||||||||||||||||||||||||||||
| Balance June 26, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Series M P/S dividend accrual | - | - | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||||
| Series G P/S exchange | - | - | - | - | - | |||||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance June 30, 2026 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Balance | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||
| Series M P/S dividend accrual | - | - | - | - | ( | ) | - | - | - | ( | ) | |||||||||||||||||||||||||
| Capital contribution-accrued compensation forgiveness | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Capital contribution-payable forgiveness | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Capital contribution-series A and F preferred shares cancellation | ( | ) | ( | ) | - | - | - | - | - | |||||||||||||||||||||||||||
| Capital contribution-loan forgiveness | - | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance September 30, 2026 | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||
| Balance | - | $ | - | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||
| 6 |
NATURALSHRIMP INCORPORATED
STATEMENT OF NET LIABILITES IN LIQUIDATION
AS OF MARCH 31, 2026
(Liquidation Basis)
| As of March 31, | ||||
| 2026 | ||||
| Cash | $ | |||
| Current assets | - | |||
| Fixed assets and intangibles | - | |||
| Other assets | - | |||
| Accounts payable and accrued expenses | ( | ) | ||
| Notes payable and lines of credit | ( | ) | ||
| Other liabilities | ( | ) | ||
| Net liabilities in liquidation | $ | ( | ) | |
| 7 |
NATURALSHRIMP INCORPORATED
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2025
(Liquidation Basis)
| For the | ||||
Six Months Ended September 30, 2025 | ||||
| Net liabilities in liquidation, March 31, 2025 | $ | ( | ) | |
| Changes in assets and liabilities in liquidation: | ||||
| Cash | ( | ) | ||
| Write-off of assets | ( | ) | ||
| Transfer of fixed assets and intangibles to creditor | ( | ) | ||
| Settlement of accounts payable and accrued expenses | ( | ) | ||
| Extinguishment of notes payable and lines of credit | ||||
| Extinguishment of other liabilities | ||||
| Net changes in liabilities in liquidation | ( | ) | ||
| Net liabilities in liquidation, September 30, 2025 | $ | ( | ) | |
The accompanying notes are an integral part of these Condensed Consolidated financial statements.
| 8 |
NATURALSHRIMP INCORPORATED
NOTES TO FINANCIAL STATEMENTS
NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS
Historical Business Operations
NaturalShrimp Incorporated (“NaturalShrimp” or the “Company”), a Nevada corporation, was 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
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. Under the Amended Receivership Order, the Receiver is the receiver over the Receivership Entities’ assets.
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 $
| 9 |
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 $ | |
| ● | 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. See Note 6 for additional information. |
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 September 30, 2026, no Series P or Series L preferred shares were issued.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The Condensed Consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“US GAAP”). As the Company’s liquidation was considered imminent on March 30, 2025, the Company has presented its financial statements under the liquidation basis of accounting as of March 31, 2025 and for the six month period ended September 30, 2025. Further, as a result of the intellectual property agreement with Hydrenesis and Mr. Antelo, the Company believes that it transitioned from liquidation basis to a going concern as of June 25, 2026 (i.e. the date that the perpetual license was transferred). Thus, the Company has also presented a going concern balance sheet as of September 30, 2026 and a going concern statement of operations, cash flow statement and statement of changes in shareholders equity for the three month period ended September 30, 2026. The Company has not presented an additional statement of operations, cash flow statement and statement of changes in shareholders’ equity for the going concern period from June 26, 2026 through September 30, 2026 as it does not believe it would be material to a reasonable investor.
Extinguishment of Liabilities
The Company determines whether a liability has been extinguished in accordance ASC 405-20, Extinguishment of liabilities. Specifically, a liability has been extinguished if either i) the debtor pays the creditor and is relieved of its obligation for the liability or ii) the debtor is legally released from being the primary obligor under the liability, either judicially or by the creditor.
| 10 |
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 it 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.
Transactions under Common Control
The Company recognizes transactions under common control in accordance with ASC 805-50. Specifically, when accounting for a transfer of assets or exchange of shares between entities under common control, the Company will initially measure the recognized assets and liabilities transferred at their carrying amounts in the accounts of the transferring entity at the date of transfer.
Going Concern
Due to its limited operations, limited cash and significant net liabilities as of September 30, 2026 the Company has concluded that there is substantial doubt about its ability to continue as a going concern within one year after its financial statements were issued. The Company hopes to i) raise funds in the private markets and ii) generate operating revenue to fund its business operations going forward. However, no plans were finalized as of the time of the filing and were not considered probable of occurring within 12 months of the date the financial statements were issued.
Preferred Share Issuances
Upon the issuance of preferred shares, the Company will determine if the shares should be classified as a liability in accordance with ASC 480, Distinguishing Liabilities from Equity. If the Company determines that the preferred shares should not be classified as a liability, it will then assess whether the shares should be classified as permanent or temporary equity. If classified as temporary equity, the Company will re-measure the shares at the end of each reporting period (if required) in accordance with 480-10-S99. If classified as permanent equity, the shares will not be re-measured at the end of each reporting period.
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.
| 11 |
NOTE 3 – TRANSITION FROM LIQUIDATION BASIS TO GOING CONCERN
During
September of 2024, Ampleo Turnaround and Restructuring, LLC was placed as the receiver over the Company’s assets due to its significant
outstanding debt. Subsequently, during February of 2025, the receiver filed a motion to sell all of the Company’s assets to Streeterville
and Bucktown Capital for an approximate credit bid of $
Based on the above, the Company has presented the following in its interim financial statements for the period ended September 30, 2026:
| ● | A going concern balance sheet as of September 30, 2026 | |
| ● | A going concern statement of operations, cash flow statement and statement of changes in shareholders equity for the three months ended September 30, 2026 | |
| ● | A condensed consolidated statement of net liabilities in liquidation as of March 31, 2026 | |
| ● | A condensed consolidated statement of changes in net liabilities in liquidation for the six month period ended September 30, 2025 |
NOTE 4 – INTELLECTUAL PROPERTY TRANSFER
On June 25, 2026, Hydrenesis, a related party under common control, granted the Company a perpetual, worldwide, exclusive and sublicensable license to use and commercialize licensed technology in aquaculture and related fields (“IP”). In exchange for the transferred IP, the Company agreed to issue Series P preferred stock and series P-2 preferred stock to Mr. Antelo and Hydrenesis, respectively. Additional preferred stock may be earned by both Mr. Antelo and Hydrenesis upon achievement of certain milestones outlined in the agreement. No preferred shares were issued as of September 30, 2026.
In
accordance with ASC 805-50, the Company recognized the perpetual license at its carrying amount in the accounts of the transferring entity
at the date of transfer. As the transferor had recognized all costs related to developing the IP as research and development expense,
the Company did not recognize as asset related to the transferred IP. Further, as the preferred shares were not yet authorized or issued,
the Company has not presented them on the face of their balance sheet. Once the preferred shares are issued, the Company plans to recognize
the shares at a $
NOTE 5 –CURRENT LIABILITIES
Accounts Payable
Accounts payable was comprised of various payables to a significant number of vendors. The Company is currently in active talks with the vendors to settle the outstanding payables through the issuance of preferred shares.
Accrued Expenses
Accrued
expenses was primarily comprised of $
Notes Payable
The
Company had approximately $
| 12 |
Dividends Payable
Dividends payable relates to accrued dividends on the former Series E, F and G preferred shares. The Company is in active negotiations with the preferred shareholders in attempt to settle the outstanding payables through the issuance of preferred shares.
Mandatorily Redeemable Preferred Shares
The Company’s Series E and G preferred shares have been recognized as a liability (in accordance with ASC 480) as they were considered mandatorily redeemable as of September 30, 2026.
NOTE 6-CAPITAL CONTRIBUTIONS
Accrued Compensation Forgiveness
During
September of 2026, accrued compensation totaling $
Series A and F Preferred Shares Cancellation
During
September of 2026, the Company’s Series A and Series F preferred shares (totaling $
Loan Forgiveness
During
September of 2026, loans from former employees totaling $
Related Party Liability to Hydrenesis
During
September of 2026, a related party loan from Hydrenesis totaling $
| 13 |
NOTE 7 – STOCKHOLDERS’ EQUITY
Preferred Stock
Series E
On
April 14, 2021, the Board authorized the issuance of
Series G
On
December 1, 2023, the Board authorized the issuance of
On
June 30, 2026, the Company exchanged
| 14 |
Series M
On
May 6, 2026, the Company signed a Securities Purchase Agreement (SPA) with GHS Investments LLC (“GHS”), for the private placement
of a new class of Series M Convertible Preferred Stock. At the Initial Closing, the Company sold
The preferred shares include the following key terms:
| ● | A
| |
| ● | A conversion option into common shares per the Certificate of Designation | |
| ● | An issuer call/redemption right exercisable per the Certificate of Designation and | |
| ● | A redemption trigger on upon an event of default |
In accordance with ASC 480, Distinguishing Liabilities and Equity and ASC 815, Derivatives and Hedging, the Company concluded that the preferred shares did not contain an embedded derivative and should be classified in temporary equity (as a result of mandatory redemption upon on event of default). Further, as the dividends can be paid in either cash or additional preferred shares the accrued dividends are recognized as an increase in temporary equity.
During the three months ended September 30, 2026, the Company sold an additional
Series M preferred shares for gross proceeds of $
Common Stock
As
of September 30, 2026, the Company had
NOTE 7 – SUBSEQUENT EVENTS
In accordance with ASC 855, Subsequent Events, the Company evaluated all events or transactions that occurred after the balance sheet date but before the financial statements were issued. To that extent, the Company noted the following:
Series Q Financing
On October 19, 2026, the Company received $
| 15 |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 amount was forgiven during the three months ended September 30, 2026. | |
| ● | 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. Both the Series A and Series F preferred shares were cancelled during the interim period ended September 30, 2026. |
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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 September 30, 2026, No Series P or Series L preferred shares were issued.
Liquidity and Capital Resources
The Company had limited liquidity as of September 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 also hopes to finalize an equity line of credit and to raise capital through the future issuance of Series Q preferred shares. To that extent, on October 19, 2026 the Company raised $50,000 in gross proceeds for (to be issued) 50 Series Q preferred shares.
Results of Operations
During the three months ended September 30, 2026, the Company’s results of operations were limited and were primarily comprised of basic operating expenses. While certain loans and payables were forgiven during the period, all amounts were recognized as a capital contribution. 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.
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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 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 September 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 September 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 September 30, 2026 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable
Item 1A. Risk Factors
As a smaller reporting Company (“SRC”) we are not required to provide this information.
Item 2. Unregistered Sales of Equity Securities and Use Of Proceeds
On July 30, 2026, the Company sold 49 Series M preferred shares to an investor for gross proceeds of $49,000. The preferred shares were issued upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933.
Item 3. Defaults upon Senior Securities
As of September 30, 2026, the Company had defaulted on $1,079,832 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 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.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
None.
Item 6. Exhibits
EXHIBIT INDEX
| Incorporated by Reference | ||||||
| Exhibit Number | Exhibit Description | Form | Exhibit | |||
| 31.1* | Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer. | |||||
| 32.1** | Section 1350 Certification of Chief Executive Officer. | |||||
| 101.INS* | Inline XBRL Instance Document | |||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||
* Filed herewith.
** Furnished herewith.
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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
| By: | /s/ David Antelo | |
| David Antelo | ||
| Chief Executive Officer and Chief Financial Officer | ||
| Date: | November 10, 2026 |
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