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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934
Date of Report (Date of earliest event reported): November
22, 2021
NATURALSHRIMP
INCORPORATED
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(Exact name of Registrant as specified in its charter)
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Nevada
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000-54030
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74-3262176
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(State or other jurisdiction
of incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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5501 LBJ Freeway, Suite 450
Dallas, Texas
75240
(Address of principal executive offices, including zip
code)
(866)
351-5907
(Registrant’s telephone number, including area
code)
Check the appropriate box below if the 8-K filing is intended to
simultaneously satisfy the filing obligations of the registrant
under any of the following provisions:
☐ Written communication pursuant to
Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)).
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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N/A
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N/A
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N/A
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (17
CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
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.
☐
Item 1.01. Entry into a Material
Definitive Agreement.
Securities Purchase
Agreement
On November 22, 2021, NaturalShrimp Incorporated (the “Company”)
entered into a securities purchase agreement (the “Purchase
Agreement”) with one accredited investor (the “Purchaser”), for the
offering (the “Offering”) of (i) one thousand five hundred (1,500)
shares of the Company’s Series E Convertible Preferred stock, par
value $0.0001 (the “Series E Preferred Stock”) at a price of one
thousand dollars ($1,000.00) per share and (ii) a warrant to
purchase up to one million five hundred thousand (1,500,000) shares
of the Company’s common stock (the “Warrant”), with an exercise
price equal to $0.75, subject to adjustment therein. Pursuant to
the Purchase Agreement, the Purchaser is purchasing the one
thousand five hundred (1,500) shares of Series E Preferred Stock
(the “Purchased Shares”) and the Warrant for an aggregate purchase
price of one million five hundred thousand dollars ($1,500,000.00).
The Warrant expires on November 22, 2026, the five (5)-year
anniversary of the issue date. The Offering was a private placement
with the Purchaser. The Offering closed on November 23, 2021.
The Company expects to receive approximately one million three
hundred fifty thousand dollars ($1,350,000.00) in net proceeds from
the Offering before exercise of the Warrant and after deducting the
commission of Joseph Gunnar & Co., LLC (the placement
agent) and other estimated offering expenses payable by the
Company.
The Purchase Agreement contains customary representations,
warranties and agreements by the Company and the other parties
thereto, customary conditions to closing, indemnification
obligations of the parties, including for liabilities under the
Securities Act of 1933, as amended (the “Securities Act”) and other
obligations of the parties.
Pursuant to the Purchase Agreement, from the date thereof until the
date when the Purchaser no longer holds any of the Purchased Shares
or the Warrant (the “Securities”), upon any issuance by the Company
of its securities for cash consideration (a “Subsequent
Financing”), the Purchaser may elect, in its sole discretion, to
exchange (in lieu of conversion), if applicable, all or some of the
Securities then held for any securities or units issued in a
Subsequent Financing on a $1.00-for-$1.00 basis and under the same
terms and conditions as provided for in the Subsequent
Financing.
The shares of Series E Preferred Stock have a stated value of
$1,200 per share (the “Series E Stated Value”) and are convertible
into shares of the Company’s common stock, par value $0.001 per
share (the “Common Stock”) at the election of the holder of the
Series E Preferred Stock at any time at a price of $0.35 per share,
subject to adjustment (the “Conversion Price”). The Series E
Preferred Stock is convertible into that number of shares of Common
Stock determined by dividing the Series E Stated Value (plus any
and all other amounts which may be owing in connection therewith)
by the Conversion Price, subject to certain beneficial ownership
limitations.
Each holder of Series E Preferred Stock shall be entitled to
receive, with respect to each share of Series E Preferred Stock
then outstanding and held by such holder, dividends at the rate of
twelve percent (12%) per annum, payable quarterly (the “Preferred
Dividends”).
The holders of Series E Preferred Stock rank senior to the Common
Stock and Common Stock Equivalents (as defined in the Series E
Certificate of Designation (the “Certificate of Designation”)) with
respect to payment of dividends and rights upon liquidation and
will vote together with the holders of the Common Stock on an
as-converted basis, subject to beneficial ownership limitations, on
each matter submitted to a vote of holders of Common Stock (whether
at a meeting of shareholders or by written consent).
Registration Rights
Agreement
On November 22, 2021, in connection with the Purchase Agreement,
the Company and the Purchaser entered into a registration rights
agreement (the “Rights Agreement”) pursuant to which the Company
agreed to, within fifteen (15) calendar days of November 22, 2021,
the date of execution of the Rights Agreement, use its best efforts
to file a registration statement or registration statements (as is
necessary) with the SEC on Form S-1 (or, if such a form is
unavailable, on such other form as is available for such
registration) covering the resale of the Securities and the shares
of Common Stock underlying the Securities, and pursuant to which
the Company agreed that such registration statement will state,
according to Rule 416 promulgated under the Securities Act, that
such registration statement also covers such indeterminate number
of additional shares of Common Stock as may become issuable upon
stock splits, dividends, or similar transactions.
The Warrant’s cashless exercise provision will go into effect if
the Company violates the Rights Agreement.
Waiver
As previously disclosed, on April 14, 2021, the Company entered
into a securities purchase agreement (the “April SPA”) to sell: (a)
9,090,909 shares of Common Stock at a price per share of $0.55; (b)
warrants to purchase up to 10,000,000 shares of Common Stock, at an
exercise price of $0.75 per share (the “April Warrants”); and (c)
1,000,000 shares of Common Stock with a value (although no purchase
price will be paid) of $0.65 per share, with GHS Investments LLC
(“GHS”), an accredited investor. Pursuant to the April SPA, until
April 14, 2022, GHS has a right to participate in any subsequent
financing that the Company conducts.
On November 22, 2021, GHS entered into a Waiver (the “Waiver”)
whereby GHS agreed to waive its right to participate in the
Offering and to participate in a possible $16.32 million debt
financing for which the Company is still negotiating definitive
documentation. There is no guarantee the Company will be able to
secure such debt financing at all or on favorable terms to the
Company. GHS also agreed to waive its right, pursuant to the
Certificate of Designation, to exchange shares of Series E
Preferred Stock held by GHS for securities issued in the debt
financing, if the Company enters into such financing.
In consideration for GHS entering into the Waiver, the Company
agreed to lower the exercise price of the April Warrants to $0.35
per share (the Conversion Price) and to issue warrants to purchase
3,739,000 shares of Common Stock with an exercise price of $0.75
per share with such warrants being substantially in the form of the
Warrants.
The foregoing descriptions of the Purchase Agreement, the Warrant,
the Certificate of Designation, the Rights Agreement, and the
Waiver are qualified in their entirety by reference to the full
text of such Purchase Agreement, Warrant, Certificate of
Designation, Rights Agreement, and Waiver, the forms of which are
attached as Exhibits 10.1, 4.1, 3.1, 10.2, and 10.3, respectively,
to this Current Report on Form 8-K (this “Form 8-K”), and which are
incorporated herein in their entirety by reference.
This Form 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 Form 8-K, except as
required not by law.
Item 3.02 Unregistered Sales of
Equity Securities.
The information set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference into this Item 3.02.
The Securities and the shares of Common Stock underlying the
Securities are not registered under the Securities Act, but they
qualified for exemption under Section 4(a)(2) of the Securities
Act. The securities were exempt from registration under Section
4(a)(2) of the Securities Act because the issuance of such
securities by the Company did not involve a “public offering,” as
defined in Section 4(a)(2) of the Securities Act, due to the
insubstantial number of persons involved in the transaction, size
of the offering, manner of the offering and number of securities
offered. The Company did not undertake an offering in which it sold
a high number of securities to a high number of investors. In
addition, the Purchaser had the necessary investment intent as
required by Section 4(a)(2) of the Securities Act since the
Purchaser agreed to, and received, the securities bearing a legend
stating that such securities are restricted pursuant to Rule 144 of
the Securities Act. This restriction ensures that these securities
would not be immediately redistributed into the market and
therefore not be part of a “public offering.” Based on an analysis
of the above factors, the Company has met the requirements to
qualify for exemption under Section 4(a)(2) of the Securities
Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
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Description
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3.1
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Certificate of Designations of the Series E Convertible Preferred
Stock (filed as Exhibit 3.1 to the Registrant's Form 8-K filed with
the SEC on April 15, 2021 and incorporated herein by
reference)
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4.1
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Form of Warrant, dated as of November 22,
2021, by and between the Company and the Purchaser
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10.1
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Form of Securities Purchase Agreement,
dated as of November 22, 2021, by and between the Company and the
Purchaser
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10.2
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Form of Registration Rights Agreement,
dated as of November 22, 2021, by and between the Company and the
Purchaser
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10.3
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Form of Waiver
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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, hereunto duly authorized.
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NATURALSHRIMP INCORPORATED
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Date: November 24, 2021
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By:
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/s/ Gerald Easterling
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Name:
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Gerald Easterling
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Title:
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Chief Executive Officer
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