Item 1.01. Entry into a
Material Definitive Agreement.
As
previously disclosed in the Current Report on Form 8-K filed with
the U.S. Securities and Exchange Commission (the
“SEC”)
by NaturalShrimp Incorporated (the “Company”) on April 15,
2021, the Company entered into a securities purchase agreement (the
“Purchase
Agreement”) with an accredited investor (the
“Purchaser”) on April 14,
2021, for the offering of (i) $5,000,000 worth of common stock, par
value $0.0001 per share, of the Company (“Common Stock”), at a per
share purchase price of $0.55 per share; (ii) common stock purchase
warrants to purchase up to an aggregate of 10,000,000 shares of
Common Stock, which are exercisable for a period of five years
after issuance at an initial exercise price of $0.75 per share,
subject to certain adjustments, as provided in the warrants; and
(iii) 1,000,000 shares of Common Stock, as commitment
shares.
Second Closing
As
previously disclosed in the Current Report on Form 8-K filed by the
Company with the SEC on May 11, 2021 (as amended on July 2, 2021),
pursuant to the Purchase Agreement, on May 5, 2021, the Purchaser
purchased an additional 15,454,546 shares of Common Stock at a per
share purchase price of $0.55 per share for gross proceeds of $8.5
million.
Third Closing
Pursuant to the Purchase
Agreement, on May 20, 2021, the Purchaser purchased an additional
2,727,272 shares of Common Stock (the “Third Closing Shares”) at
a per share purchase price of $0.55 per share (the
“Third
Closing”). Lake Street Capital Markets, LLC
(“Lake
Street”) acted as a financial advisor to the Company
in connection with the Third Closing and received a fee equal to 3%
of the gross proceeds raised in the Third Closing, or an aggregate
of $45,000.
The
number of shares of common stock outstanding immediately after the
Third Closing was 594,419,727 shares. The Company received
approximately $1,455,000 in net proceeds from the Third Closing
after deducting the fees and other estimated offering expenses
payable by the Company. The Company expects to use the net proceeds
from the Third Closing for working capital and for general
corporate purposes.
The
Third Closing Shares were issued to the Purchaser in a registered
direct offering pursuant to which the Third Closing Shares were
registered under the Securities Act of 1933, as amended (the
“Securities
Act”), pursuant to a prospectus supplement to the
Company’s currently effective registration statement on Form
S-3 (File No. 333-253953), which was initially filed with the SEC
on March 5, 2021, and was declared effective on March 22, 2021 (the
“Shelf Registration
Statement”). A prospectus supplement for the Third
Closing was filed with the SEC on June 28, 2021 and is available on
the SEC’s website at http://www.sec.gov.
The
foregoing description of the Purchase Agreement does not purport to
be complete and is qualified in its entirety by reference to the
Purchase Agreement, which was filed as Exhibit 10.1 to the Current
Report on Form 8-K filed by the Company with the SEC on April 15,
2021, and is incorporated by reference into this Item
1.01.
June Purchase Agreement
On June
28, 2021 (the “June
28th
Closing”), the Company entered into a securities
purchase agreement with the Purchaser (the “June Purchase
Agreement”), pursuant to which the Purchaser purchased
(i) an additional 7,500,000 shares of Common Stock (the
“June
Shares”) at a per share purchase price of $0.40 per
share and (ii) $11,000 worth of prefunded warrants to purchase up
to an aggregate of 1,100,000 shares of Common Stock, at an exercise
price of $0.01 per share (the “Prefunded Warrants”, and
together with the June Shares, the “June 28th Closing
Shares”). The Prefunded Warrants are exercisable upon
issuance and shall not expire prior to exercise, and are subject to
certain adjustments, as provided in the Prefunded Warrants. Lake
Street acted as a financial advisor to the Company in connection
with the June 28th Closing and
received a fee equal to 3% of the gross proceeds raised in the June
28th
Closing, or an aggregate of $90,330.
The
number of shares of common stock outstanding immediately after the
June 28th
Closing was 603,019,728 shares (assuming full exercise of the
Prefunded Warrants). The Company received approximately $2,909,670
in net proceeds from the June 28th Closing after
deducting the fees and estimated offering expenses payable by the
Company. The Company expects to use the net proceeds from the June
28th
Closing for working capital and for general corporate
purposes.
The
June 28th
Closing Shares were issued to the Purchaser in a registered direct
offering pursuant to the Shelf Registration Statement. A prospectus
supplement for the June 28th Closing was filed
on June 29, 2021 and is available on the SEC’s website at
http://www.sec.gov.
The
foregoing description of the June Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the June Purchase Agreement, which is filed as Exhibit
10.2 to this Current Report on Form 8-K (this “8-K”), and is
incorporated by reference into this Item 1.01.
The
Company is filing the opinion of its counsel, Lucosky Brookman LLP,
relating to the legality of the issuance and sale of the Third
Closing Shares and the June 28th Closing Shares as
Exhibit 5.1 hereto. Exhibit 5.1 is incorporated herein by reference
and into the Shelf Registration Statement.
This
8-K contains forward-looking statements. Forward-looking statements
include, but are not limited to, statements that express the
Company’s intentions, beliefs, expectations, strategies,
predictions, or any other statements related to the Company’s
future activities, or future events or conditions. These statements
are based on current expectations, estimates and projections about
the Company’s business based, in part, on assumptions made by
its management. These statements are not guarantees of future
performances and involve risks, uncertainties and assumptions that
are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in the
forward-looking statements due to numerous factors, including those
risks discussed in documents that the Company files from time to
time with the SEC. Any forward-looking statements speak only as of
the date on which they are made, and the Company undertakes no
obligation to update any forward-looking statement to reflect
events or circumstances after the date of this 8-K, except as
required not by law.