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 Exchange Act of 1934
Date
of Report (Date of earliest event reported) October 24, 2022
NATURALSHRIMP
INCORPORATED
(Exact
name of registrant as specified in its charter)
| Nevada |
|
000-54030 |
|
74-3262176 |
(State
or other jurisdiction
of incorporation) |
|
Commission
File Number |
|
(IRS
Employer
Identification No.) |
| 5501
LBJ Freeway, Suite 450, Dallas, Texas |
|
75240 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code (866) 351-5907
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| ☒ |
Written
communications 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 |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| N/A |
|
N/A |
|
N/A |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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 ☐
Section
1 - Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement.
Merger
Agreement
On
October 24, 2022, NaturalShrimp Incorporated, a Nevada corporation (the “Company”), entered into a Merger Agreement
(as it may be amended, supplemented, or otherwise modified from time to time, the “Merger Agreement”), by and among
the Company, Yotta Acquisition Corporation, a Delaware corporation (“Yotta”), and Yotta Merger Sub, Inc., a Nevada
corporation and a wholly owned subsidiary of Yotta (“Merger Sub”).
The
Merger Agreement and the transactions contemplated thereby (the “Transactions”) were approved by the board of directors
of each of the Company, Yotta, and Merger Sub.
The
Merger Agreement and the Merger
The
Merger Agreement provides, among other things, that Merger Sub will merge with and into the Company, with the Company as the surviving
company (the “Surviving Company”) in the merger and, after giving effect to such merger, the Company shall be a wholly-owned
subsidiary of Yotta (the “Merger”). In addition, Yotta will be renamed “NaturalShrimp, Incorporated”
or such other name as shall be designated by the Company. Other capitalized terms used, but not defined, herein have the respective meanings
given to such terms in the Merger Agreement.
The
Merger Agreement provides for aggregate consideration to be issued to securityholders of the Company of 17,500,000 shares (the “Closing
Merger Consideration Shares”) of Yotta’s common stock, par value $0.0001 per share (“Yotta Shares”),
to be issued at the effective time of the Merger (the “Effective Time”), plus an additional (i) 5,000,000 Yotta Shares
if the Surviving Corporation has at least $15,000,000 in revenue during the fiscal year ended March 31, 2024 and (ii) 5,000,000 Yotta
Shares if the Surviving Corporation has at least $30,000,000 in revenue during the fiscal year ended March 31, 2025 (collectively, the
“Contingent Merger Consideration Shares”).
In
accordance with the terms and subject to the conditions of the Merger Agreement, at the Effective Time each share of common stock, par
value $0.0001 per share, of the Company (“Company Common Stock”) outstanding or deemed outstanding pursuant to the
provisions discussed immediately below as of immediately prior to the Effective Time will be converted into the right to receive its
allocable portion of the Closing Merger Consideration Shares and the Contingent Merger Consideration Shares (to the extent the required
revenue thresholds are met).
Pursuant
to the terms of the Merger Agreement and agreements that, pursuant to the Merger Agreement, the Company will enter into with holders
of such convertible securities, such convertible securities will be canceled in exchange (except for the Series A Convertible Preferred
Stock of the Company, par value $0.0001 per share (the “Series A Preferred”) for a cash payment or Yotta Shares as
follows: (i) at the option of the holder thereof, each outstanding warrant to purchase shares of Company Common Stock will be canceled
in exchange for a cash payment based on the value thereof or treated as exercised for shares of Company Common Stock, in each case based
on an adjusted exercise price and as otherwise set forth in the Merger Agreement and/or the individual agreements, and if treated as
exercised, converted into the right to receive such deemed shares of Company Common Stock’s allocable portion of the Closing Merger
Consideration Shares and the Contingent Merger Consideration Shares; (ii) each outstanding share of Series F Convertible Preferred Stock
of the Company, par value $0.0001 per share, will be canceled and treated as if converted into shares of Company Common Stock at an adjusted
conversion rate as set forth in the Merger Agreement and/or such individual agreements, and converted into the right to receive such
deemed shares of Company Common Stock’s allocable portion of the Closing Merger Consideration Shares and the Contingent Merger
Consideration Shares; and (iii) each outstanding share of Series E Convertible Preferred Stock of the Company, par value $0.0001 per
share (the “Series E Preferred”), will be canceled and treated as if converted into shares of Company Common Stock
at an adjusted conversion rate as set forth in the Merger Agreement and/or such individual agreements, and converted into the right to
receive such deemed shares of Company Common Stock’s allocable portion of the Closing Merger Consideration Shares and the Contingent
Merger Consideration Shares. In addition, each holder of Series E Preferred will be entitled to receive at the Effective Time an additional
number of Closing Merger Consideration Shares as are necessary to ensure that the per-share value of the Yotta Shares that such stockholder
is entitled to receive is not less than the per-share value (based on the effective purchase price) of the aggregate Yotta Shares then
held by any Yotta stockholder after taking into account any newly-issued Yotta Shares that such Yotta stockholder acquires directly from
Yotta prior to the closing of the Merger (the “Closing”) (which will reduce the number of Closing Merger Consideration Shares
that will be issued to the Company’s other securities holders). The Series A Preferred will be cancelled and retired without any
conversion thereof and for no consideration.
In
addition, the Merger Agreement provides that, pursuant to an agreement to be entered into between the Company and Streeterville Capital,
LLC (“Streeterville”) as the holder of the Secured Convertible Promissory Note in the initial amount of $16,320,000.00
issued by the Company to Streeterville with an effective date of December 15, 2021 (the “Convertible Note”), contingent
on and effective as of the Effective Time, the Convertible Note will be amended to eliminate the conversion feature thereof. Also, such
agreement will provide for: (i) for the payment to Streeterville of an amount equal to the lesser of (A) one-third of the amount retained
in the Trust Account at the Effective Time or (B) $10,000,000, in order to repay a portion of the outstanding balance of the Convertible
Note; (ii) that the remaining balance of the Convertible Note be repaid in equal monthly installments over a 12-month period beginning
on a date after the Closing Date or the termination of such agreement; and (iii) that if the Closing Date is after December 31, 2022,
the outstanding balance of all indebtedness owed by the Company to Streeterville will be increased automatically by 2% and will automatically
increase by 2% every 30 days thereafter until the Closing, or substantially similar terms as approved by the Board of Directors of the
Company.
The
Company is required to enter into all of the above-described agreements with the holders of the warrants, preferred stockholders, and
Streeterville within 14 days of the date of the Merger Agreement, or November 7, 2022 (the “Convertible Instrument Agreements”).
The
Merger is expected to close in the first calendar quarter of 2023, following the receipt of the required approvals by the stockholders
of the Company and Yotta, conditional approval by the Nasdaq Stock Market (“Nasdaq”) of Yotta’s initial listing
application filed in connection with the Merger, and the fulfillment of other customary closing conditions.
Representations
and Warranties; Covenants
The
Agreement contains customary representations and warranties of the parties thereto with respect to, among other things, (i) entity organization,
good standing, and qualification, (ii) capital structure, (iii) authorization to enter into the Agreement, (iv) compliance with laws
and permits, (v) taxes, (vi) financial statements and internal control over financial reporting, (vii) real and personal property, (viii)
material contracts, (ix) environmental matters, (x) absence of changes, (xi) employee matters, (xii) litigation, and (xiii) brokers and
finders.
In
addition, the parties to the Merger Agreement agreed to be bound by certain customary covenants for transactions of this type, including,
among others, covenants with respect to the conduct of the Company and Yotta and their subsidiaries during the period between execution
of the Merger Agreement and the Closing Date. Each of the parties to the Merger Agreement has agreed to use its reasonable best efforts
take or to cause to be taken all actions and to do or cause to be done all things reasonably necessary to consummate as promptly as reasonably
practicable the Transactions.
Exclusivity
Each
of the Company and Yotta has agreed that from the date of the Agreement to the earlier of the Closing and the termination of the Agreement,
neither the Company nor Yotta will (i) encourage, solicit, initiate, engage or participate in negotiations with any party concerning
any alternative transaction, (ii) take any other action intended or designed to facilitate the efforts of any person relating to a possible
alternative transaction or (iii) approve, recommend or enter into any alternative transaction or any contract or agreement related to
any alternative transaction.
Conditions
to Obligations under the Merger Agreement
Under
the Merger Agreement, the obligations of the parties to consummate the Transactions are subject to the satisfaction or waiver of certain
closing conditions of the respective parties, including, without limitation: (i) no order or law issued by any court of competent jurisdiction
or other governmental authority or other legal restraint or prohibition preventing the consummation of the Transactions being in effect;
(ii) no action or proceeding having been commenced or asserted in writing by any governmental authority to enjoin or otherwise materially
restrict the consummation of the Closing; (iii) the registration statement on Form S-4 containing the proxy statement/prospectus to be
filed by Yotta relating to the Merger Agreement and the Merger (the “Registration Statement”) becoming effective in
accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), no stop order being
issued by Securities and Exchange Commission (the “SEC”) and remaining in effect with respect to the Registration
Statement, and no proceeding seeking such a stop order being threatened or initiated by the SEC and not withdrawn; (iv) Yotta’s
initial listing application filed with Nasdaq in connection with the Merger having been approved; (v) the approval of the Merger Agreement
and the Merger, and certain related proposals, by the requisite vote of Yotta’s stockholders (the “Required Yotta Stockholder
Approval”); and (vi) the approval of the Merger Agreement by the requisite vote of the Company’s stockholders.
In
addition, the obligations of Yotta and Merger Sub to consummate the Transactions are subject to the satisfaction or waiver of certain
additional closing conditions, including, without limitation: (i) the Company having complied with all of its convents, agreements, and
obligations under the Merger Agreement in all material respects; (ii) the Company’s representations and warranties contained in
the Merger Agreement being true and correct; (iii) the absence of an event since the date of the Merger Agreement that is continuing
and that has had or would reasonably be expected to have a Material Adverse Effect on the Company; (iv) holders of no more than 5% of
the issued and outstanding shares of Company Common Stock having exercised their dissenters’ rights under Nevada law; and (v) the
receipt by Yotta at or prior to the Closing of a lock-up agreement between Yotta and each of the Company’s executive officers and
directors in their capacity as stockholders (which lock-up period will last for six months after the Effective Time).
Further,
the Company’s obligations to consummate the Transactions are subject to the satisfaction or waiver of certain additional closing
conditions, including, without limitation: (i) each of Yotta and Merger Sub having complied with all of its convents, agreements, and
obligations under the Merger Agreement in all material respects; (ii) the representations and warranties of Yotta and Merger Sub contained
in the Merger Agreement being true and correct; (iii) the absence of an event since the date of the Merger Agreement that is continuing
and that has had or would reasonably be expected to have a Material Adverse Effect on Yotta or Merger Sub; and (iv) the post-Effective
Time board of directors of each of Yotta and the Surviving Corporation having been set up to consist of seven directors designated by
the Company as provided in the Merger Agreement.
Termination
The
Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including, without
limitation: (i) by the mutual written consent of the parties; (ii) by either Yotta or the Company if the Closing does not occur on or
prior to July 22, 2023 or, if an Additional Extension Period has been approved, at the expiration of such period (the “Outside
Termination Date”), unless the breach of any covenants or obligations under the Merger Agreement by the party seeking to terminate
(or, in the case of Yotta, by Merger Sub) proximately caused the failure to consummate the Transactions by the applicable date; (iii)
by either Yotta or the Company if any governmental authority shall have issued an order, enacted a law, or taken any other action that
has the effect of making the Transactions illegal or permanently restraining, enjoining, or otherwise prohibiting the consummation of
the Transactions and such law or order or other action shall have become final and nonappealable, unless the failure by such party or
its affiliates to comply with any provision of the Merger Agreement was a substantial cause of, or substantially resulted in, such action
by such governmental authority; (iv) by Yotta, subject to certain exceptions, if the Company has breached any of its representations,
warranties, covenants, or agreements in the Merger Agreement and such breach cannot be cured at all or within the earlier of (A) 30 days
after written notice thereof and (B) the Outside Termination Date; (v) by Yotta, subject to certain exceptions, if the Company does not
receive the required stockholder approval of the Merger Agreement within five business days after the effective date of the Form S-4;
(vi) by Yotta, subject to certain exceptions, if the Company fails to enter into the Convertible Instrument Agreements by November 7,
2022; and (vii) by the Company, subject to certain exceptions, if Yotta or Merger Sub has breached any of its representations, warranties,
covenants, or agreements in the Merger Agreement and such breach cannot be cured at all or within the earlier of (A) 30 days after written
notice thereof and (B) the Outside Termination Date.
If
the Merger Agreement is validly terminated, none of the parties to the Merger Agreement will have any liability or any further obligation
under the Merger Agreement other than customary confidentiality obligations, except in the case of a willful breach of any covenant or
agreement under the Merger Agreement or fraud, provided, that (A) if Yotta terminates the Merger Agreement pursuant to clauses (iv),
(v), or (vi) of the preceding paragraph, the Company must pay to Yotta, within two business days of such termination, a termination fee
in the amount of $3,000,000, and (B) if the Company terminates the Merger Agreement pursuant to clause (vii) of the preceding paragraph,
Yotta shall pay to the Company, within two business days of such termination, a termination fee in the amount of $3,000,000.
A
copy of the Merger Agreement will be filed as Exhibit 2.1 to an amendment to this 8-K and the foregoing description of the Merger Agreement
is qualified in its entirety by reference thereto.
The
Merger Agreement contains representations, warranties, and covenants that the respective parties made to each other as of the date of
the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties, and covenants were made for
purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties
in connection with negotiating such agreement. The representations, warranties, and covenants in the Merger Agreement are also modified
in important part by the underlying disclosure schedules that are not filed publicly and that are subject to a contractual standard of
materiality different from that generally applicable to stockholders, and were used for the purpose of allocating risk among the parties
rather than establishing matters as facts. The Company does not believe that these schedules contain information that is material to
an investment decision.
Support
Agreements
Company
Support Agreements
Contemporaneously
with the execution of, and as a condition and an inducement to Yotta and the Company entering into, the Merger Agreement, the Company,
Yotta, and each of the Company’s three executive officers and directors, solely in his capacity as a stockholder of the Company,
entered into the Company Stockholder Support Agreement (the “Company Support Agreements”), pursuant to which each
such stockholder agreed to, among other things, (i) to vote in favor of the Merger Agreement, the Merger, and the other Transactions,
(ii) waive any rights of appraisal, dissenter’s rights, and any similar rights under applicable law, and (iii) not to sell, assign,
pledge or otherwise transfer or dispose of, encumber, hedge, swap, convert or utilize a derivative to transfer an interest in (collectively,
a “Transfer”) any of his shares of capital stock in the Company unless the buyer, assignee, or transferee thereof
executes a joinder agreement to his Company Support Agreement.
The
foregoing description of the Company Support Agreements does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Company Support Agreements, a form of which is attached as Exhibit A to the Merger Agreement.
Sponsor
Support Agreement
Contemporaneously
with the execution of, and as a condition and an inducement to the Company entering into, the Merger Agreement, Yotta, Yotta Investment
LLC (the “Sponsor”), and the Company entered into the Sponsor Support Agreement, pursuant to which the Sponsor agreed,
among other things, (i) not to Transfer or redeem any Yotta Shares held by the Sponsor unless the buyer, assignee, or transferee thereof
executes a joinder agreement to the Sponsor Support Agreement, and (ii) to vote in favor of the approval of the Merger Agreement and
the Transactions, and any other proposals related thereto that are presented for a vote of Yotta’s stockholders.
The
foregoing description of the Sponsor Support Agreement does not purport to be complete and is qualified in its entirety by the terms
and conditions of the Sponsor Support Agreement, the form of which is attached as Exhibit B to the Merger Agreement.
Lock-Up
Agreements
Company
Lock-up Agreements
The
Merger Agreement provides that each of the Company’s three executive officers and directors, in their capacity as stockholders,
will enter into a lock-up agreement with the Company and Yotta (the “Company Lock-Up Agreement”) pursuant to each
of them will agree, subject to certain customary exceptions, not to (i) sell, offer to sell, contract, or agree to sell, pledge, or otherwise
dispose of, directly or indirectly, any Yotta Shares they receive in the Merger (the “Company Lock-Up Shares”), (ii)
enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers, in whole
or in part, any of the economic consequences of ownership of the Company Lock-Up Shares, (iv) publicly disclose the intention to effect
any transaction specified in clause (i) or (iii), or (v) engage in any short sales with respect to any security of Yotta, until the date
that is six months after the date on which the Effective Time occurs.
The
foregoing description of the Company Lock-Up Agreements does not purport to be complete and is qualified in its entirety by the
terms and conditions of the Company Lock-Up Agreements, the form of which is attached as Exhibit C-1 to the Merger Agreement.
Sponsor
Lock-up Agreement
The
Merger Agreement provides that the Company, Yotta, and the Sponsor will enter into a sponsor lock-up agreement (the “Sponsor
Lock-Up Agreement”), pursuant to which the Sponsor will not (i) offer, sell, contract to sell, pledge or otherwise dispose
of, directly or indirectly, any Yotta Shares held by them at the Effective Time (such shares, together with any securities convertible
into or exchangeable for or representing the rights to receive Yotta Shares as of the Effective Time, the “Sponsor Lock-Up Shares”),
(ii) enter into a transaction that would have the same effect, (iii) enter into any swap, hedge or other arrangement that transfers,
in whole or in part, any of the economic consequences of ownership of the Sponsor Lock-up Shares, (iv) publicly disclose the intention
to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or (v) engage in
any short sales with respect to any security of Yotta, until the date that is six months after the date on which the Effective Time occurs.
The
foregoing description of the Sponsor Lock-Up Agreement does not purport to be complete and is qualified in its entirety by the
terms and conditions of the Sponsor Lock-Up Agreement, the form of which is attached as Exhibit C-2 to the Merger Agreement.
Section
7 – Regulation FD Disclosure
Item
7.01 Regulation FD Disclosure.
On
October 25, 2022, the Company and Yotta issued a joint press release announcing their entry into the Merger Agreement. The press release
is attached hereto as Exhibit 99.1.
Exhibits
99.1 is being furnished pursuant to Item 7.01 and will not be deemed to be filed for purposes of Section 18 of the Securities Exchange
Act of 1934 as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor will
it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Additional
Information
In
connection with the Merger and the other Transactions, Yotta intends to file relevant materials with the SEC including a registration
statement on Form S-4, which will include a prospectus with respect to its common stock to be issued in connection with the Merger and
a proxy statement with respect to the stockholder meeting of Yotta to vote on the Transactions. Investors and securityholders of the
Company and other interested persons are urged to read, when available, the proxy statement/prospectus as well as other documents that
Yotta and the Company file with the SEC, as well as any amendments or supplements to those documents, because they will contain important
information about the Company, Yotta, and the Merger. Once available, stockholders will also be able to obtain a copy of the Form S-4,
including the proxy statement/prospectus, and other documents filed with the SEC without charge, at the SEC’s website at http://www.sec.gov
and, with respect to documents filed by the Company, from the Company’s website at www.naturalshrimp.com.
Participants
in the Solicitation
Yotta
and its directors and executive officers may be deemed participants in the solicitation of proxies from Yotta stockholders with respect
to the Transactions. Information about Yotta’s directors and executive officers and a description of their interests in Yotta will
be included in the proxy statement/prospectus for the Transactions and be available at the SEC’s website (www.sec.gov). Additional
information regarding the interests of such participants will be contained in the proxy statement/prospectus for the Transactions when
available.
The
Company and its directors and executive officers also may be deemed to be participants in the solicitation of proxies from the stockholders
of Yotta in connection with the Transactions. Information about the Company’s directors and executive officers is set forth in
the Company’s Annual Report on Form 10-K for the year ended March 31, 2022, as filed with the SEC on June 29, 2022, and information
regarding their interests in the Transactions will be included in the proxy statement/prospectus for the Transactions.
Forward
Looking Statements
The
statement herein that the Merger is expected to close in the first calendar quarter of 2023 is a “forward-looking statement”
as defined the Private Securities Litigation Reform Act of 1995. Such statement reflects management’s current views with respect
to future events and are subject to numerous assumptions, risks, and uncertainties. Actual results may differ materially from those contemplated
by such forward-looking statement for a variety of reasons including: the stability of the financial and capital markets; the Company
and Yotta being able to receive all required third-party and stockholder approvals for the Transactions; the occurrence of any event,
change or other circumstances that could give rise to the termination of the Merger Agreement; the outcome of any legal proceedings that
may be instituted against the Company or Yotta following announcement of the Merger Agreement and the Transactions; and those discussed
and identified in filings made by the Company and Yotta with the SEC. The foregoing list of factors is not exhaustive. Forward-looking
statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on any forward-looking statement
and, except to the extent required by applicable law or regulation, the Company assumes no obligation and does not intend to update or
revise this forward-looking statements whether as a result of new information, future events, or otherwise.
Disclaimer
This
communication does not constitute an offer to sell, or the solicitation of an offer to buy or exchange, any securities, nor shall there
be any sale of securities in any state or jurisdiction in which such offer, solicitation, exchange, or sale would be unlawful prior to
registration or qualification under the securities laws of any such state or jurisdiction. No offer of securities shall be made except
by means of a prospectus meeting the requirements of the Securities Act.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
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.
| |
NATURALSHRIMP
INCORPORATED |
| |
|
|
| Date:
October 25, 2022 |
By: |
/s/
William Delgado |
| |
Name: |
William
Delgado |
| |
Title: |
Chief
Financial Officer |
NaturalShrimp (PK) (USOTC:SHMP)
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