NaturalShrimp Faces Liquidation After Asset Sale to Lenders

TL;DR

**NaturalShrimp is effectively dead, with assets sold to lenders; equity holders are likely wiped out.**

AI Summary

NaturalShrimp Inc. reported a significant decline in revenue and an increased net loss for the six months ended September 30, 2024. Sales decreased to $106,991 for the six months ended September 30, 2024, a substantial drop from $263,882 in the same period of 2023. The net loss attributable to NaturalShrimp Inc. widened to $3,914,477 for the six months ended September 30, 2024, compared to a net loss of $4,944,970 in the prior year, though the three-month net loss improved from $2,646,539 to $1,111,929. Key business changes include the appointment of Amplo Turnaround and Restructuring, LLC as receiver over the Company's assets on September 9, 2024, due to defaults on loan agreements with Streeterville Capital, LLC and Bucktown Capital, LLC. The court approved the sale of substantially all assets to Streeterville and Bucktown Capital for a credit bid of approximately $35.7 million and $100,000 in cash on March 30, 2025, with title transfer on May 14, 2025. This sale extinguished $30.8 million in outstanding debt to these lenders. The Company's total assets decreased from $27,717,338 on March 31, 2024, to $25,872,803 on September 30, 2024, while total liabilities increased from $38,571,859 to $39,647,616 over the same period. The Company plans to present its financial statements under the liquidation basis of accounting as of March 31, 2025.

Why It Matters

This filing signals the imminent liquidation of NaturalShrimp Inc., a critical event for investors who will likely see their equity wiped out. The sale of substantially all assets to Streeterville Capital and Bucktown Capital for a credit bid of $35.7 million and $100,000 cash, extinguishing $30.8 million in debt, indicates that secured creditors are recovering some value, but common stockholders are left with a significant deficit. For employees, this likely means job losses as the company ceases operations. In the broader aquaculture market, the failure of NaturalShrimp's proprietary technology highlights the challenges of scaling innovative, closed-system shrimp farming, potentially impacting investor confidence in similar ventures and reducing competitive pressure on traditional shrimp producers.

Risk Assessment

Risk Level: high — The risk level is high because NaturalShrimp Inc. is transitioning to a liquidation basis of accounting, with substantially all assets sold to lenders for a credit bid of approximately $35.7 million. The company's total stockholders' deficit increased from $(56,876,421) on March 31, 2024, to $(60,093,038) on September 30, 2024, indicating severe financial distress and a negative equity position.

Analyst Insight

Investors should consider any existing positions in NaturalShrimp Inc. as a total loss and exit immediately if possible, as the company is undergoing liquidation and common stockholders are unlikely to recover any value. Potential investors should avoid the stock entirely, as the company's operational assets have been sold and it will transition to a liquidation basis of accounting.

Financial Highlights

debt To Equity

N/A

revenue

$106,991

operating Margin

N/A

total Assets

$25,872,803

total Debt

$39,647,616

net Income

$(3,914,477)

eps

$0.00

gross Margin

N/A

cash Position

$43,330

revenue Growth

-60%

Revenue Breakdown

Key Numbers

• $106,991 — Sales for six months ended Sep 30, 2024 (Decreased from $263,882 in prior year, indicating significant revenue decline.)
• $(3,914,477) — Net loss for six months ended Sep 30, 2024 (Widened from $(4,944,970) in prior year, showing continued unprofitability.)
• $43,330 — Cash as of Sep 30, 2024 (Significantly reduced from $115,525 on March 31, 2024, highlighting liquidity issues.)
• $25,872,803 — Total assets as of Sep 30, 2024 (Decreased from $27,717,338 on March 31, 2024, reflecting asset erosion.)
• $39,647,616 — Total liabilities as of Sep 30, 2024 (Increased from $38,571,859 on March 31, 2024, worsening financial leverage.)
• $(60,093,038) — Total stockholders' deficit as of Sep 30, 2024 (Increased from $(56,876,421) on March 31, 2024, indicating deeper negative equity.)
• $35,703,789.87 — Credit bid for asset sale (Amount used by lenders to acquire substantially all company assets.)
• $30,800,000 — Debt extinguished by asset sale (Amount of outstanding debt to Streeterville and Bucktown Capital eliminated.)
• 1,257,546,746 — Common shares outstanding as of Sep 30, 2024 (Increased from 1,116,482,063 on March 31, 2024, indicating significant dilution.)

Key Players & Entities

• NaturalShrimp Inc. (company) — registrant undergoing liquidation
• Streeterville Capital, LLC (company) — lender and purchaser of assets
• Bucktown Capital, LLC (company) — lender and co-purchaser of assets
• Amplo Turnaround and Restructuring, LLC (company) — appointed receiver over company assets
• $35.7 million (dollar_amount) — approximate credit bid for assets
• $100,000 (dollar_amount) — cash component of asset sale
• $30.8 million (dollar_amount) — outstanding debt extinguished by asset sale
• September 30, 2024 (date) — end of reporting period
• March 30, 2025 (date) — court approval date for asset sale
• May 14, 2025 (date) — title transfer date for assets

FAQ

Risk Factors

• Receiver Appointment and Asset Sale [high — financial]: Amplo Turnaround and Restructuring, LLC was appointed receiver over the Company's assets on September 9, 2024, due to loan defaults. Substantially all assets were sold to lenders Streeterville and Bucktown Capital on March 30, 2025, for a credit bid of approximately $35.7 million, extinguishing $30.8 million in debt.
• Deteriorating Financial Position [high — financial]: Total assets decreased from $27.7 million on March 31, 2024, to $25.9 million on September 30, 2024. Concurrently, total liabilities increased from $38.6 million to $39.6 million, leading to a widening stockholders' deficit of $(60.1) million.
• Liquidity Crisis [high — financial]: Cash position significantly declined to $43,330 as of September 30, 2024, from $115,525 on March 31, 2024. This severe reduction in cash highlights an ongoing liquidity crisis.
• Increased Share Dilution [medium — financial]: The number of common shares outstanding increased from 1,116,482,063 on March 31, 2024, to 1,257,546,746 on September 30, 2024. This represents a significant dilution for existing shareholders.
• Loan Defaults and Legal Proceedings [high — legal]: The company defaulted on loan agreements with Streeterville Capital, LLC and Bucktown Capital, LLC, leading to the appointment of a receiver. This indicates significant legal and financial distress.
• Presentation under Liquidation Basis [high — financial]: The company plans to present its financial statements under the liquidation basis of accounting as of March 31, 2025. This signals an intent to wind down operations or sell off assets in an orderly liquidation.

Industry Context

The aquaculture industry, particularly shrimp farming, faces challenges related to disease, environmental sustainability, and market price volatility. Companies in this sector often require significant capital investment for facilities and technology. Competition can come from both domestic producers and large-scale international operations, impacting pricing and market share.

Regulatory Implications

As a publicly traded company, NaturalShrimp Inc. is subject to SEC regulations and reporting requirements. The appointment of a receiver and impending asset sale may trigger specific disclosure obligations and could impact the company's ability to comply with ongoing regulatory filings.

What Investors Should Do

1. Review the terms of the asset sale and liquidation plan.
2. Assess the impact of share dilution.
3. Monitor future filings for liquidation basis reporting.
4. Evaluate the company's ability to meet ongoing reporting obligations.

Key Dates

• 2024-09-09: Receiver Appointed — Amplo Turnaround and Restructuring, LLC appointed receiver over company assets due to loan defaults, marking a critical point of financial distress.
• 2025-03-30: Asset Sale Approved — Court approved the sale of substantially all assets to lenders Streeterville and Bucktown Capital for a credit bid of approximately $35.7 million, signaling the end of the company's operational life.
• 2025-05-14: Asset Title Transfer — Formal transfer of ownership of company assets to the acquiring lenders, finalizing the liquidation process.
• 2025-03-31: Liquidation Basis Presentation Date — The date as of which the company plans to present its financial statements under the liquidation basis of accounting, indicating the transition to winding down.

Glossary

Receiver

A person or entity appointed by a court to take control of and manage the assets of a company that is in financial distress or undergoing liquidation. (The appointment of a receiver signifies a severe loss of control by the company's management and a move towards asset preservation or liquidation.)

Credit Bid

A bid made by a creditor in an asset sale where the creditor uses the debt owed to them by the seller as payment, rather than providing cash. (In this case, lenders used the debt owed to them to acquire the company's assets, indicating they were the primary beneficiaries of the sale and minimizing cash outlay.)

Liquidation Basis of Accounting

An accounting basis used when a company intends to liquidate its assets and cease operations. Financial statements reflect the expected net realizable value of assets and liabilities. (The company's plan to use this basis indicates an imminent or ongoing liquidation, fundamentally changing how its financial position is reported.)

Stockholders' Deficit

The amount by which total liabilities exceed total assets, resulting in negative equity for the shareholders. (A growing stockholders' deficit, as seen here, indicates increasing financial distress and a diminishing value for common stockholders.)

Non-controlling Interest

The portion of equity in a subsidiary that is not attributable to the parent company. In this filing, it appears to be zero. (Indicates that the parent company fully owns any subsidiaries, simplifying the ownership structure.)

Year-Over-Year Comparison

For the six months ended September 30, 2024, NaturalShrimp Inc. experienced a significant revenue decline, with sales dropping to $106,991 from $263,882 in the prior year. While the net loss widened to $(3,914,477) from $(4,944,970), the three-month net loss showed improvement. Key risks have emerged, including the appointment of a receiver and the impending sale of substantially all assets, indicating a shift towards liquidation. Total assets have decreased while liabilities have increased, worsening the company's financial standing.

Key Financial Figures

• $35.7 million — apital for an approximate credit bid of $35.7 million and $100,000 in cash. The motion was ap
• $100,000 — oximate credit bid of $35.7 million and $100,000 in cash. The motion was approved on Mar
• $25.5 million — nd license agreements (total balance of $25.5 million as of September 30, 2024) in exchange f
• $30.8 million — to Streeterville and Buckstown Capital ($30.8 million as of September 30, 2024). Consolidat

Filing Documents

• form10-q.htm (10-Q) — 1279KB
• ex31-1.htm (EX-31.1) — 17KB
• ex31-2.htm (EX-31.2) — 17KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• 0001641172-25-025047.txt ( ) — 5747KB
• shmp-20240930.xsd (EX-101.SCH) — 36KB
• shmp-20240930_cal.xml (EX-101.CAL) — 55KB
• shmp-20240930_def.xml (EX-101.DEF) — 219KB
• shmp-20240930_lab.xml (EX-101.LAB) — 341KB
• shmp-20240930_pre.xml (EX-101.PRE) — 273KB
• form10-q_htm.xml (XML) — 747KB

SIGNATURES

SIGNATURES 35 2 PART I – FINANCIAL INFORMATION Item 1. Financial Statements NATURALSHRIMP INCORPORATED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2024 March 31, 2024 As of September 30, 2024 March 31, 2024 Current assets Cash $ 43,330 $ 115,525 Accounts receivable 34,460 27,450 Inventory 48,476 68,510 Prepaid expenses 129,154 169,650 Other current asset-related party 45,938 - Total current assets 301,358 381,135 Fixed assets, net 12,279,106 13,301,245 Other assets Patents, net 5,683,500 5,878,500 License Agreement, net 7,522,376 8,062,376 Right of Use asset 65,830 73,449 Deposits 20,633 20,633 Total other assets 13,292,339 14,034,958 Total assets $ 25,872,803 $ 27,717,338 Current liabilities Accounts payable $ 3,147,996 $ 3,495,689 Accrued interest 119,717 107,435 Accrued interest - related parties 275,088 254,593 Accrued interest 275,088 254,593 Other accrued expenses 1,753,862 1,743,799 Accrued expenses - related parties 1,430,449 1,116,107 Short-term Note and Lines of credit 392,956 19,817 Notes payable 460,622 553,322 Restructured Senior note payable 27,600,000 27,120,000 Restructured August note payable 2,790,000 2,640,000 Notes payable - related parties 920,412 880,412 Notes payable 920,412 880,412 Dividends payable 694,332 544,800 Warrant liability - 24,000 Lease Liability, current 28,560 28,560 Total current liabilities 39,613,994 38,528,534 Lease Liability, non-current 33,622 43,325 Total liabilities 39,647,616 38,571,859 Commitments and contingencies (Note 11) - - Series E Redeemable Convertible Preferred stock, $ 0.0001 par value, 10,000 shares authorized, 1,571 and 1,670 shares issued and outstanding at September 30, 2024 and March 31, 2024, respectively 1,886,225 1,977,900 Series F Redeemable Convertible Preferred stock, $ 0.0001 par value, 750,000 shares authorized, 750,

View Full Filing

View this 10-Q filing on SEC EDGAR