10-K: NaturalShrimp Inc. Files Annual Report Amidst Liquidation and Transition

NaturalShrimp Incorporated has filed its annual report, detailing its transition to a liquidation basis of accounting following a receivership and asset sale, and outlining a new intellectual property and management transition agreement.

Summary

• The company has transitioned to a liquidation basis of accounting as of March 31, 2026, following a court-approved sale of substantially all its assets in May 2025.
• The sale of assets to Streeterville Capital and Buckstown Capital for approximately $35.7 million in credit bid and $100,000 cash resulted in the extinguishment of outstanding debt.
• As of March 31, 2026, the company reported net liabilities in liquidation of approximately $9.0 million.
• A new Intellectual Property and Management Transition Agreement was entered into in March 2026 with Hydrenesis, Inc. and David Antelo, involving a perpetual license and conversion of debt to equity, which was consummated on June 25, 2026.
• The company's common stock is now traded on the OTC Markets Expert Market, with no established public trading market.
• Material weaknesses in internal control over financial reporting were identified, including inadequate segregation of duties and lack of an independent board and audit committee.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing as highly negative due to the company's liquidation status, cessation of operations, and material weaknesses in internal controls, despite a new IP agreement.

Positives

• The company has entered into an agreement for a perpetual license to intellectual property and technology rights from Hydrenesis, Inc.
• Outstanding obligations to Hydrenesis of approximately $1,034,112 will be converted into equity.
• Existing liabilities and legacy securities are being restructured, amended, cancelled, or exchanged into Series L Preferred Stock.
• The company has a plan to settle remaining outstanding balances with creditors through the exchange of liabilities into newly authorized preferred shares.

Negatives

• The company is operating under a liquidation basis of accounting.
• Net liabilities in liquidation were approximately $9.0 million as of March 31, 2026.
• The company ceased all business operations as of the date of ownership transfer in May 2025.
• Material weaknesses in internal control over financial reporting have been identified and not yet remedied.
• The company's common stock is traded on the OTC Markets Expert Market with no established public trading market.

Risks

• The company is in liquidation, with operations having ceased.
• Significant uncertainty exists regarding the manner and amount by which the Company will ultimately settle its remaining net liabilities in liquidation.
• Material weaknesses in internal control over financial reporting could lead to undetected deficiencies.
• The company's common stock is traded on the OTC Markets Expert Market, limiting public accessibility and price discovery.
• The company has never declared or paid cash dividends and has no intention to do so in the future.

Future Outlook

The company is operating under a liquidation basis of accounting. A new agreement with Hydrenesis, Inc. involves transitioning operations towards aquaculture and water treatment technologies, with a perpetual license to intellectual property. The consummation of this agreement on June 25, 2026, included preferred share issuances and creditor restructuring, but accounting recognition of license rights remained subject to completion.

Management Comments

• Management assessed the effectiveness of the Company's internal control over financial reporting as of March 31, 2026 and determined it was not effective due to material weaknesses.
• Management is implementing measures to remediate control deficiencies, including identifying skill gaps, establishing an independent board and audit committee, and retaining additional accounting personnel.
• David Antelo, as CEO, CFO, and sole director, is responsible for monitoring and addressing cybersecurity risks.
• The company does not compensate its directors for their service on the Board of Directors.

Industry Context

StockSavvy.ai notes that NaturalShrimp's transition to a liquidation basis and focus on intellectual property licensing aligns with trends in distressed companies seeking to monetize assets and technology rather than continuing core operations. The shift towards aquaculture and water treatment technologies reflects growing market interest in sustainable solutions.

Management Changes

Corporate Governance

Legal Proceedings

• A receivership case was initiated on September 4, 2024, by Streeterville Capital, LLC and Buckstown Capital, LLC, alleging default under loan agreements.
• The court approved the sale of substantially all of the company's assets to Streeterville and Buckstown Capital on March 30, 2025.

Related Party Transactions

• The company entered into an Intellectual Property and Management Transition Agreement with Hydrenesis, Inc. and David Antelo (a related party).
• The agreement includes a proposed perpetual license and the proposed conversion of approximately $1,034,112 owed to Hydrenesis into equity.
• During the year ended March 31, 2025, the company received $40,000 from the issuance of a promissory note with a related party, which is currently in default.

Stakeholder Impact

• Shareholders: The company is in liquidation, and its common stock is traded on the OTC Markets Expert Market, indicating a high risk and limited liquidity.
• Creditors: Outstanding liabilities are being addressed through asset sales and potential restructuring into preferred shares.
• Employees: Accrued compensation to former employees is part of the outstanding liabilities.
• Management: David Antelo has assumed control as CEO, CFO, and sole director, overseeing the transition and liquidation process.

Next Steps

• Continue to monitor and evaluate the effectiveness of internal controls and procedures over financial reporting.
• Evaluate the addition of qualified directors as the transition plan, financing needs, and operating activities develop.
• The company expects to file Certificates of Designation for Series P, Series P-2, and Series L Preferred Stock with the Nevada Secretary of State.
• The consummation of the Hydrenesis transaction on June 25, 2026, included preferred share issuances and creditor restructuring, with accounting recognition of license rights remaining subject to completion.

Key Dates

Recommendation

The company is in liquidation and has ceased operations, making traditional investment analysis difficult. However, the new IP and management transition agreement with Hydrenesis, Inc. offers a potential path forward for monetizing assets and technology, warranting a hold to observe the execution of this transition.

Keywords

Liquidation, Receivership, Asset Sale, Intellectual Property, Hydrenesis, David Antelo, OTC Markets, Internal Controls