NaturalShrimp enters merger agreement with Yotta Acquisition Group
NaturalShrimp, a shrimp-farming company that has pioneered a unique recirculating aquaculture system technology, has entered into a merger agreement with Yotta Acquisition Corp., a public blank check corporation listed on the Nasdaq Stock Exchange.
Dallas, Texas, U.S.A.-based NaturalShrimp is in line to receive up to USD 105 million (EUR 105 million) in net cash proceeds if and when the transaction is completed.
“This business combination with Yotta has the potential to significantly accelerate our efforts for commercialization and the ramp up of production of our fresh, land-based gourmet-grade shrimp at the largest indoor farming facilities in the U.S.,” NaturalShrimp CEO Gerald Easterling said in a press release. “We also expect that the merger will provide us with additional capital to advance facility expansion efforts in strategic markets in the U.S., including Florida, Nevada, and the [U.S.] Northeast. Our goal is to rapidly build market share in the supply-constrained, premium segment of the market for large shrimp, which sell at 20 to 30 percent price premiums utilizing our propriety, proven and scalable technologies and production system. Combined with our capital efficient model, the transaction has the potential to put NaturalShrimp on the fast track to rollout across the 10 largest population centers in the U.S.”
Yotta closed its initial public offering in April 2022, raising gross proceeds of USD 100 million (EUR 100 million), with the goal of buying or merging with another business focused in technology, blockchain, software, e-commerce, or “other general business industries globally.” The transaction, which has been approved by the boards of both companies, involves Yotta issuing 17.5 million of its common stock, currently valued at USD 9.90 (EUR 9.94) per share. It will then disburse 5 million common shares to NaturalShrimp if it meets its revenue target for 2024 and another 5 million shares in 2025.
“Assuming no redemptions, the total enterprise value is estimated at approximately USD 275 million [EUR 275 million] at closing of the transaction,” the companies said in their joint press release.
As part of the merger, the new company – subsumed into a subsidiary of Yotta that will change its name to NaturalShrimp – will “conduct a global marketing campaign to educate institutional and other investors about its system for growing shrimp in enclosed, salt-water systems, using patented technology to produce fresh, never frozen, naturally grown shrimp, without the use of antibiotics or toxic chemicals.”
“We believe NaturalShrimp’s patented technologies, attractive business model and unit economics provides a premium pricing opportunity for fresh, locally grown product that is of superior quality and sustainable,” Yotta CEO Hui Chen said. “We further believe that NaturalShrimp is well-positioned to become a premier provider of shrimp in the U.S., and we are pleased that Yotta’s stockholders will have the opportunity to invest and help fill the gap in the large and growing shrimp market with land-based gourmet-grade shrimp without the use of antibiotics, probiotics, or toxic chemicals.”
The transaction, expected to be completed by Q1 2023, is subject to approval of Nasdaq and the S. Securities and Exchange Commission, as well as the shareholders of both companies. Post-closing, the new company will have a seven-member board chosen by NaturalShrimp.
Chen has served as the director and CEO of Yotta since December 2021. He founded the New York City-based law officers of Hui Chen and Associates in 2012, with a focus on patent prosecution, copyright infringement, and other general intellectual property matters. He is an adjunct professor at Hofstra University and previously worked as an adjunct associate professor at John Jay College of Criminal Justice, Pace University, Touro College, and Saint Francis College. He previously worked as an Oracle developer at eBay and as a solo back-end developer at IBM Global Services.
“We believe that Mr. Chen’s access to contacts and sources, ranging from high-technology companies and legal contacts, will allow us to generate acquisition opportunities and identify suitable acquisition candidates,” Yotta said in its initial prospectus.
NaturalShrimp operates two recirculating aquaculture system farms growing shrimp in Texas and in the U.S. state of Indiana, and purchased the former VeroBlue and Alder Aqua farm in Webster City, Iowa, in 2021. It has announced plans to expand in Florida and Puerto Rico and has signed distribution agreements with US Foods and Gulf Seafood Inc.
Photo courtesy of NaturalShrimp