NaturalShrimp Issues Shareholder Letter and Provides Corporate Update
DALLAS--(BUSINESS WIRE)-- NaturalShrimp, Inc. (OTCQB: SHMP), a Biotechnology Aquaculture Company that has developed and patented the commercially operational RAS (Recirculating Aquaculture System), today issued a letter to shareholders from Gerald Easterling, CEO of NaturalShrimp.
Our last letter to you was published over a year ago in July 2022 and for this delay we apologize. We make it our obligation to keep our shareholders up to date and only fail to do so when intervening circumstances restrict or limit our ability to inform our shareholders of news of our activities. During our year-long transaction with Yotta Acquisition Corporation, (from August 2, 2022 through the date our termination of the transaction on July 20, 2023) all proposed press releases or other dissemination of information had to first be reviewed and approved by Yotta’s legal counsel. As a result, the ability to communicate freely with our shareholders has been limited and restricted.
Now that we have terminated the Yotta transaction and demanded payment of the breakup fee, we are able to communicate with you directly and tell you, from our perspective, what has happened, what is happening and what we believe will happen. There has been a lot of chatter on social media, but I can assure you that NaturalShrimp is still the only land-based company in the world that is growing shrimp using our patented technology and without the use of antibiotics, probiotics, hormones, or toxic chemicals. Our shrimp is still gourmet-grade and our vision for this Company remains resolutely the same.
WHAT HAS HAPPENED
As each of our shareholders knows, or by now should know, our unique Electrocoagulation (EC) technology differentiates us in the industry and the widespread supply chain issues that caused so much difficulty and delay has surprisingly turned out to be an unexpected opportunity, borne of necessity, to enhance our equipment and prepare it for future commercialization. Confronted with extended delays for critical components and repair work, the Company was forced to innovate. Our resourceful team in La Coste located readily accessible and available equipment not subject to supply chain issues and successfully integrated it into our proprietary technology. This new and novel approach not only kept our operations going but has yielded more efficient and cost-effective solutions.
As a result of the continued research and innovations being developed at our La Coste facility, La Coste has evolved into the Company’s principal center for continued development of new engineering designs, processes, and materials. Consequently, La Coste now serves as our dedicated Research & Development Center with our expanding technical team focusing on refining, enhancing, and expanding our EC and Hydrogas technologies. We are committed to testing new applications for commercialization while developing more efficient, cost-effective, and secure system designs. La Coste will continue its production and sale of shrimp while assuming a pivotal role as our leading R&D Center.
The innovations in enhancing and redesigning the EC and Hydrogas equipment have shown significant potential in increased production efficiency, which can positively impact both our La Coste and Webster City facilities. Lowering the costs of production and reducing implementation time is at the forefront of the retrofits being constructed. In fact, these new designs have already produced tangible, quantifiable benefits. While the original cost of retrofitting our 50,000 sq ft production facility in Webster City exceeded $2,500,000, the cost of retrofitting the other three 50,000 sq. ft production facilities located in the warehouse using our new designs is expected to realize a seventy percent (70%) decrease in capital expenditures bringing the overall costs for each production facility down to $750,000.
For the better part of the last year our production facilities in both Texas and Iowa have been utilizing the Hydrogas and EC technologies to produce and sell shrimp to local markets, while maintaining weekly deliveries of live shrimp to our loyal customers in the Chicago area. The Company has further developed a better and much improved system for delivering live shrimp to these markets. This new delivery system instituted by Rafael Zelaya, our Vice President of Production, has significantly reduced our mortality rates of live shrimp upon delivery.
Another supply chain hurdle the Company has navigated included our primary supplier of post larvae shrimp (PLs). There was a point in time within the last year when our supplier was not able to provide us with necessary PLs, causing a reduction in our production output. Although we were able to procure PLs from alternative sources, our production nevertheless suffered. In March of 2023, we entered into a new PL Purchase Agreement with Homegrown USA, Inc. (“Homegrown”) to secure the delivery of up to 2 million PLs each month to accommodate our production requirements while maintaining an ongoing relationship with third party suppliers to cover any shortfalls. Moreover, the Company has taken steps to design and build a new hatchery at our Blairsburg, Iowa facility to avoid any future disruptions in our PL supply. Our agreement with Homegrown will also provide us access to Homegrown’s superior fast-growing genetic line of PLs.
We have also retained the services of a former Homegrown hatchery specialist to design and construct the new hatchery, further fortifying our production capabilities and ensuring consistent production in times of shortages. Along with the design and construction of the new hatchery, the Company has hired a new employee, Lance Looney, as manager of the hatchery who, once the hatchery is completed, will be manager of that department.
On December 19, 2022, we launched our ecommerce venture, NaturalShrimp Harvest-Select. This platform allows for the mail-order sale of our shrimp, initially catering exclusively to our existing shareholders with plans to expand access to the general public. The trial launch exceeded our expectations and sold out in two days. Initial participation included 100 shareholders and, after making some packaging adjustments, have since completed additional shipments, maintaining a high level of satisfaction among our shareholder customers. Douwe Iedema, Director of our ecommerce Division, along with our new head of Social Media, Lauren Wion, are spearheading advertising and media purchase research in preparation for our public launch. We anticipate offering the broader public the opportunity to purchase our shrimp via the platform with the launch scheduled around the end of the third quarter of 2023. Mr. Iedema stated, “I am looking forward to expanding our ecommerce division to include not only mail order purchasing but, also on-line ordering with local pick-up options in select markets.” The Company is also modifying our ecommerce website with the expectation that it will be quicker, more accurate, more user-friendly, and seamless to use. While the ecommerce website is still a work in progress, we hope to have these updates completed before its public launch.
Throughout the period. David Antelo, CEO of our technology partner, Hydrenesis Aquaculture, LLC (“Hydrenesis”), has played a crucial role in aiding us when challenges have emerged. Thanks to Hydrenesis’ Hydrogas products and infusion equipment, which are licensed to NaturalShrimp, we managed to save a significant portion of our shrimp following the devastating fire that destroyed our water treatment plant in La Coste on July 3, 2022. Today, with both the Hydrenesis equipment and our EC Technology operating in tandem, our water quality is continually improving and promoting the growth of healthier and faster growing shrimp.
Building upon our expertise in EC Technology, NaturalShrimp participated in a study sponsored and funded by the Fisheries Research and Development Corporation, an arm of the Australia government, and the Australian Prawn Farmers Association. This study sought to explore the potential use of EC technology in eradicating microalgae and reducing total nitrogen levels in wastewater from prawn farms. Nautilus Collaboration Pty Ltd, together with Fresh By Design, installed the necessary equipment to treat water from sedimentation ponds. Tom Untermeyer, our Chief Technical Officer, travelled to the project site in Australia and assisted the lead research provider, Dr. Christine Huynh, and her team installation and management of the equipment for this project. Our involvement in such research reflects not only our ongoing dedication to advancing our technology and discovering new commercial applications, but further demonstrates our continued dedication and commitment to using our technologies to improve the environment. We are still awaiting the final conclusions reached in the trial after approval from the Australian government.
WHAT IS HAPPENING
By now, shareholders have probably heard or read about the recent termination of the Business Combination Agreement (“BCA”) between the Company and Yotta Acquisition Corporation (“Yotta”). This agreement was intended to result in the Company’s ultimate goal of uplisting to Nasdaq. Much time was spent, and work dedicated to this project but ultimately it would not, in the opinion of the board of directors, be as financially beneficial to the Company as we were originally promised or would otherwise be in the best interest of our shareholders. The continued delays in completing the transaction harmed the Company’s ability to keep pace with our planned operational schedule. Much still needs to be done to untangle the relationship between the Company and Yotta relating to the termination of the BCA. However, the Company is reluctant to provide further detailed information at this time. Suffice it to say that it was the Company that terminated the BCA on July 20, 2023 and not Yotta, as it claims in its recently filed 8K.
It is our overarching goal uplist to Nasdaq, which will enable the Company to establish an institutional investor base not available on the OTC and provide better access to the capital markets as we execute upon our growth strategies.
On a more positive note, Tom Untermeyer recently landed in Japan to commence a trial sponsored by Niterra Co., Ltd (formerly known as NGK Spark Plugs USA, Inc.). The purpose of the trial is to determine, among other things, the efficacy of the Company’s technology in smaller, more localized shrimp-growing facilities to provide local communities with a supply of fresh natural shrimp and to help ensure food security for these communities. The Agreement with Niterra further contemplates an on-going joint venture relationship between the Company and Niterra and its subsidiaries to explore the use of our technologies with other aqua species including fin fish. The trial is for a period of six months with the results to be published soon thereafter. The additional benefit to the Company from our new relationship with Niterra will be the joint development of additional enhancements to our technologies in real-world settings and, perhaps, the development of new technologies and processes resulting from the synergies arising out of the joint engineering teams working together. The Company further anticipates that the contemplated joint venture with Niterra will act as a springboard for additional international joint ventures and further commercialization of our technologies.
Although our focus for the past ten months has been on completing the BCA with Yotta, we have not lost sight of our core business and principal objectives. The Company continues to grow and sell shrimp. In fact, through the end of our fiscal year, March 31, 2023, NaturalShrimp was able to generate just under $500,000 in gross revenues. Additional capital raised after achieving our uplist to Nasdaq will enable the Company to finish the retrofits of the remaining three 50,000 sq. ft production facilities in Webster City. Once this retrofit is completed and the facility fully operational, our weekly production capacity, including both La Coste and Webster City is estimated to be 13,000 pounds of shrimp, generating over $6,000,000 in projected annual sales.
Building on the vision of our future, our collaboration with Jefferson County on the Florida Project remains steadfast. Our focus on ecological sustainability perfectly aligns with the objectives of governmental and agricultural leaders who acknowledge the critical role of biosecurity in our food chains, an area where our Recirculating Aquaculture System technology can make a significant impact. We envision the upcoming Florida farm not merely as a production facility, but as a protein sustainability blueprint. This model will form an integral part of our broader commercialization strategy, emphasizing our commitment to sustainable aquaculture and the delivery of high-quality, naturally grown shrimp. We anticipate that our Florida facility will be one of our projected Regional Production Facilities to serve Southeastern United States. It has always been part of our expansion plan to build such Regional Production Facilities in strategic locations in the US to serve regional markets. As we have previously stated, this plan includes expansion into the Las Vegas area and in the New York or New Jersey areas.
In addition, we will be working on developing educational programs in collaboration with Florida-based organizations and higher education institutions. We anticipate that these programs will educate students and individuals about water quality and management principles while also emphasizing the potential for job skills training in the rapidly evolving aquaculture sector in Florida. Our goal is to foster knowledge and develop our workforce talent pipeline.
WHAT WILL HAPPEN
Of course, we are not able to predict the future, but we can plan for the future. We have been working on uplisting to the Nasdaq since April 2022 and now intend to merge with a Nasdaq-listed shell company. The necessary filings to affect this move have been completed and will only need to be revised to incorporate our new merger candidate. We believe an acceptable candidate will be located within the next 30 days and the process of uplisting will then continue.
In order to avoid making a hasty decision by choosing a merger candidate that does not fit with our corporate philosophy, the Company will take a measured approach in conducting its due diligence on any potential merger candidate. In this regard, the Company has filed an S-1 Registration Statement along with a Form 14C Information Statement which provides for an increase in the Company’s authorized shares. The Company intends to sell as few as possible of the newly authorized and registered shares to provide the Company with sufficient time, without pressure, to select the appropriate merger partner.
In conclusion, we are grateful for the support of our shareholders as we continue our mission to establish a new standard in aquaculture. Despite the challenges we have faced, our vision remains unchanged, and we have made significant progress in enhancing our technologies. Our strategic partnerships, ongoing research, and upcoming global projects position us for success and growth in the aquaculture industry. We are committed to delivering on our promise and creating a sustainable future for NaturalShrimp. Thank you for being a part of our journey.
CEO of NaturalShrimp
NaturalShrimp Incorporated is a publicly traded aquaculture Company, headquartered in Dallas, with production facilities located near San Antonio, Texas, and Webster City, Iowa. The Company has developed the first commercially viable system for growing shrimp in enclosed salt-water systems using patented technology to produce fresh, naturally grown shrimp, without the use of antibiotics or toxic chemicals. NaturalShrimp systems can be located anywhere in the world to produce gourmet-grade Pacific white shrimp. For more information visit www.naturalshrimp.com.
This press release contains a number of forward-looking statements that reflect management's current views with respect to future events and financial performance. Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in our forward-looking statements.
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Source: NaturalShrimp, Inc.
Released August 25, 2023