Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Dec. 31, 2019 | Feb. 11, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NaturalShrimp Inc | |
Entity Central Index Key | 0001465470 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2019 | |
Current Fiscal Year End Date | --03-31 | |
Amendment Flag | false | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 369,096,888 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Current assets | ||
Cash | $ 582,990 | $ 137,499 |
Notes receivable | 1,700 | 1,700 |
Inventory | 4,200 | 4,200 |
Prepaid expenses | 126,929 | 35,286 |
Total current assets | 715,819 | 178,685 |
Fixed assets | ||
Land | 202,293 | 202,293 |
Buildings | 1,645,454 | 1,328,161 |
Machinery and equipment | 1,224,118 | 934,621 |
Autos and trucks | 19,063 | 14,063 |
Furniture and fixtures | 22,060 | 22,060 |
Accumulated depreciation | (1,364,130) | (1,322,609) |
Fixed assets, net | 1,748,858 | 1,178,589 |
Other assets | ||
Construction-in-process | 919,239 | 377,504 |
Right of use asset | 252,140 | 0 |
Deposits | 20,633 | 10,500 |
Total other assets | 1,192,012 | 388,004 |
Total assets | 3,656,689 | 1,745,278 |
Current liabilities | ||
Accounts payable | 632,030 | 576,028 |
Accrued interest - related parties | 284,624 | 295,184 |
Other accrued expenses | 769,897 | 609,243 |
Short-term promissory note and lines of credit | 679,083 | 139,418 |
Bank loan | 222,736 | 228,725 |
Current maturities of convertible debentures, less debt discount of $61,382 and $511,640, respectively | 629,233 | 494,451 |
Convertible debentures, related party | 18,600 | 87,600 |
Notes payable - related parties | 1,271,162 | 1,271,162 |
Derivative liability | 130,000 | 157,000 |
Warrant liability | 93,000 | 93,000 |
Total current liabilities | 4,730,365 | 3,951,811 |
Lines of credit | 0 | 650,453 |
Lease liability | 252,140 | 0 |
Total liabilities | 4,982,505 | 4,602,264 |
Commitments and contingencies (Note 9) | ||
Stockholders' deficit | ||
Common stock, $0.0001 par value, 900,000,000 shares authorized, 354,116,535 and 301,758,293 shares issued and outstanding at December 31, 2019 and March 31, 2019, respectively | 35,411 | 30,177 |
Additional paid in capital | 42,434,545 | 38,335,782 |
Accumulated deficit | (43,744,909) | (41,223,445) |
Total stockholders' deficit | (1,274,453) | (2,856,986) |
Non-controlling interest in NAS | (51,363) | 0 |
Total stockholders' deficit | (1,325,816) | (2,856,986) |
Total liabilities and stockholders' deficit | 3,656,689 | 1,745,278 |
Series A Convertible Preferred stock | ||
Stockholders' deficit | ||
Preferred stock | 500 | 500 |
Series B Convertible Preferred stock | ||
Stockholders' deficit | ||
Preferred stock | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Convertible debenture debt discount | $ 61,382 | $ 511,640 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 900,000,000 | 900,000,000 |
Common stock, shares issued | 354,116,535 | 301,758,293 |
Common stock, shares outstanding | 354,116,535 | 301,758,293 |
Series A Convertible Preferred stock | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 5,000,000 | 5,000,000 |
Preferred stock, shares outstanding | 5,000,000 | 5,000,000 |
Series B Convertible Preferred stock | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 1,250 | 0 |
Preferred stock, shares outstanding | 1,250 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||||
Sales | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | ||||
Facility operations | 41,375 | 22,479 | 180,934 | 66,442 |
General and administrative | 306,834 | 223,821 | 944,571 | 654,119 |
Research and development | 101,500 | 0 | 101,500 | 0 |
Depreciation and amortization | 15,958 | 17,726 | 41,521 | 53,171 |
Total operating expenses | 465,667 | 264,026 | 1,268,526 | 773,732 |
Net loss from operations | (465,667) | (264,026) | (1,268,526) | (773,732) |
Other income (expense): | ||||
Interest expense | (40,820) | (68,634) | (160,351) | (205,561) |
Amortization of debt discount | (38,831) | (342,724) | (515,204) | (1,051,707) |
Financing costs | (53,528) | (77,390) | (217,746) | (1,361,735) |
Change in fair value of derivative liability | 58,000 | (211,500) | 19,000 | 1,116,500 |
Change in fair value of warrant liability | 0 | 0 | 0 | (47,000) |
Loss on warrant settlement | 0 | 0 | (50,000) | 0 |
Total other income (expense) | (75,179) | (700,248) | (924,301) | (1,549,503) |
Loss before income taxes | (540,846) | (964,274) | (2,192,827) | (2,323,235) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net loss | (540,846) | (964,274) | (2,192,827) | (2,323,235) |
Less net loss attributable to non-controlling interest | (51,363) | 0 | (51,363) | 0 |
Net loss attributable to Natural Shrimp Inc. | (489,483) | (964,274) | (2,141,464) | (2,323,235) |
Amortization of beneficial conversion feature on Series B PS | (380,000) | 0 | (380,000) | 0 |
Net loss available for common stockholders | $ (869,483) | $ (964,274) | $ (2,521,464) | $ (2,323,235) |
EARNINGS PER SHARE (Basic and diluted) | $ 0 | $ (0.01) | $ (0.01) | $ (0.02) |
WEIGHTED AVERAGE SHARES OUTSTANDING (Basic and diluted) | 345,260,292 | 165,284,849 | 326,835,226 | 129,672,152 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) | Preferred Stock Series A | Preferred Stock Series B | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interest | Total |
Beginning balance - shares at Mar. 31, 2018 | 0 | 0 | 97,656,095 | ||||
Beginning balance - amount at Mar. 31, 2018 | $ 0 | $ 0 | $ 9,766 | $ 27,743,352 | $ (34,012,864) | $ 0 | $ (6,259,746) |
Issuance of shares for cash - shares | 220,000 | ||||||
Issuance of shares for cash - amount | $ 22 | 15,378 | 15,400 | ||||
Issuance of shares upon conversion - shares | 37,887,704 | ||||||
Issuance of shares upon conversion - amount | $ 3,789 | 511,932 | 515,721 | ||||
Reclass of derivative liability upon conversion or redemption of related convertible debentures | 1,305,000 | 1,305,000 | |||||
Net loss | (1,097,109) | (1,097,109) | |||||
Ending balance, shares at Jun. 30, 2018 | 0 | 0 | 135,763,799 | ||||
Ending balance, amount at Jun. 30, 2018 | $ 0 | $ 0 | $ 13,577 | 29,575,662 | (35,109,973) | 0 | (5,520,734) |
Beginning balance - shares at Mar. 31, 2018 | 0 | 0 | 97,656,095 | ||||
Beginning balance - amount at Mar. 31, 2018 | $ 0 | $ 0 | $ 9,766 | 27,743,352 | (34,012,864) | 0 | (6,259,746) |
Net loss | (2,323,235) | ||||||
Ending balance, shares at Dec. 31, 2018 | 5,000,000 | 0 | 254,321,733 | ||||
Ending balance, amount at Dec. 31, 2018 | $ 500 | $ 0 | $ 25,432 | 31,772,141 | (36,335,770) | 0 | (4,537,697) |
Beginning balance - shares at Jun. 30, 2018 | 0 | 0 | 135,763,799 | ||||
Beginning balance - amount at Jun. 30, 2018 | $ 0 | $ 0 | $ 13,577 | 29,575,662 | (35,109,973) | 0 | (5,520,734) |
Issuance of shares under equity financing agreement - shares | 3,000,000 | ||||||
Issuance of shares under equity financing agreement - amount | $ 300 | 34,200 | 34,500 | ||||
Issuance of shares upon conversion - shares | 25,966,857 | ||||||
Issuance of shares upon conversion - amount | $ 2,596 | 144,607 | 147,203 | ||||
Issuance of shares upon exercise of warrants - shares | 11,214,272 | ||||||
Issuance of shares upon exercise of warrants - amount | $ 1,121 | 148,879 | 150,000 | ||||
Conversion of common shares into Series A Convertible Preferred stock - shares | 5,000,000 | (75,000,000) | |||||
Conversion of common shares into Series A Convertible Preferred stock - amount | $ 500 | $ (7,500) | 7,000 | (500) | |||
Reclass of derivative liability upon conversion or redemption of related convertible debentures | 435,500 | 435,500 | |||||
Net loss | (261,523) | (261,523) | |||||
Ending balance, shares at Sep. 30, 2018 | 5,000,000 | 0 | 100,944,928 | ||||
Ending balance, amount at Sep. 30, 2018 | $ 500 | $ 0 | $ 10,094 | 30,345,848 | (35,371,496) | 0 | (5,015,554) |
Issuance of shares under equity financing agreement - shares | 19,999,999 | ||||||
Issuance of shares under equity financing agreement - amount | $ 2,000 | 162,516 | 164,516 | ||||
Issuance of shares upon conversion - shares | 133,376,806 | ||||||
Issuance of shares upon conversion - amount | $ 13,338 | 451,777 | 465,115 | ||||
Reclass of derivative liability upon conversion or redemption of related convertible debentures | 812,000 | 812,000 | |||||
Net loss | (964,274) | (964,274) | |||||
Ending balance, shares at Dec. 31, 2018 | 5,000,000 | 0 | 254,321,733 | ||||
Ending balance, amount at Dec. 31, 2018 | $ 500 | $ 0 | $ 25,432 | 31,772,141 | (36,335,770) | 0 | (4,537,697) |
Beginning balance - shares at Mar. 31, 2019 | 5,000,000 | 0 | 301,758,293 | ||||
Beginning balance - amount at Mar. 31, 2019 | $ 500 | $ 0 | $ 30,177 | 38,335,782 | (41,223,445) | 0 | (2,856,986) |
Issuance of shares under equity financing agreement - shares | 11,482,721 | ||||||
Issuance of shares under equity financing agreement - amount | $ 1,148 | 1,498,852 | 1,500,000 | ||||
Issuance of shares upon conversion - shares | 3,000,000 | ||||||
Issuance of shares upon conversion - amount | $ 300 | 29,700 | 30,000 | ||||
Beneficial conversion feature | 58,548 | 58,548 | |||||
Net loss | (795,270) | (795,270) | |||||
Ending balance, shares at Jun. 30, 2019 | 5,000,000 | 0 | 316,241,014 | ||||
Ending balance, amount at Jun. 30, 2019 | $ 500 | $ 0 | $ 31,625 | 39,922,882 | (42,018,715) | 0 | (2,063,708) |
Beginning balance - shares at Mar. 31, 2019 | 5,000,000 | 0 | 301,758,293 | ||||
Beginning balance - amount at Mar. 31, 2019 | $ 500 | $ 0 | $ 30,177 | 38,335,782 | (41,223,445) | 0 | (2,856,986) |
Net loss | (2,192,827) | ||||||
Ending balance, shares at Dec. 31, 2019 | 5,000,000 | 1,500 | 354,116,535 | ||||
Ending balance, amount at Dec. 31, 2019 | $ 500 | $ 0 | $ 35,411 | 42,434,545 | (43,744,909) | (51,363) | (1,325,816) |
Beginning balance - shares at Jun. 30, 2019 | 5,000,000 | 0 | 316,241,014 | ||||
Beginning balance - amount at Jun. 30, 2019 | $ 500 | $ 0 | $ 31,625 | 39,922,882 | (42,018,715) | 0 | (2,063,708) |
Purchase of Series B Preferred shares - shares | 250 | ||||||
Purchase of Series B Preferred shares - amount | 250,000 | 250,000 | |||||
Issuance of shares under equity financing agreement - shares | 3,275,060 | ||||||
Issuance of shares under equity financing agreement - amount | $ 326 | 273,675 | 274,001 | ||||
Issuance of shares upon conversion - shares | 14,000,000 | ||||||
Issuance of shares upon conversion - amount | $ 1,400 | 138,600 | 140,000 | ||||
Net loss | (856,711) | (856,711) | |||||
Ending balance, shares at Sep. 30, 2019 | 5,000,000 | 250 | 333,516,074 | ||||
Ending balance, amount at Sep. 30, 2019 | $ 500 | $ 0 | $ 33,351 | 40,585,157 | (42,875,426) | 0 | (2,256,418) |
Purchase of Series B Preferred shares - shares | 1,250 | ||||||
Purchase of Series B Preferred shares - amount | 1,250,000 | 1,250,000 | |||||
Issuance of shares upon conversion - shares | 20,600,461 | ||||||
Issuance of shares upon conversion - amount | $ 2,060 | 211,388 | 213,448 | ||||
Reclass of derivative liability upon conversion or redemption of related convertible debentures | 8,000 | 8,000 | |||||
Beneficial conversion feature | 380,000 | (380,000) | 0 | ||||
Net loss | (489,483) | (51,363) | (540,846) | ||||
Ending balance, shares at Dec. 31, 2019 | 5,000,000 | 1,500 | 354,116,535 | ||||
Ending balance, amount at Dec. 31, 2019 | $ 500 | $ 0 | $ 35,411 | $ 42,434,545 | $ (43,744,909) | $ (51,363) | $ (1,325,816) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (2,141,464) | $ (2,323,235) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 41,521 | 53,171 |
Amortization of debt discount | 515,204 | 1,051,707 |
Change in fair value of derivative liability | (19,000) | (1,116,500) |
Change in fair value of warrant liability | 0 | 47,000 |
Financing costs related to convertible debentures | 0 | 1,361,735 |
Default penalty | 27,000 | 0 |
Net loss attributable to non-controlling interest | (51,363) | 0 |
Shares issued for services | 0 | 0 |
Changes in operating assets and liabilities: | ||
Inventory | 0 | (4,200) |
Prepaid expenses and other current assets | (91,643) | (543) |
Deposits | (10,133) | 0 |
Accounts payable | 56,002 | (1,403) |
Other accrued expenses | 180,728 | 103,732 |
Accrued interest - related parties | (10,560) | 145,641 |
Cash used in operating activities | (1,503,708) | (682,895) |
Cash flows from investing activities | ||
Cash paid for machinery and equipment | (611,790) | (5,350) |
Cash paid for construction in progress | (541,735) | (75,404) |
Cash used in investing activitites | (1,153,525) | (80,754) |
Cash flows from financing activities | ||
Payments on bank loan | (5,989) | (5,689) |
Repayment line of credit short-term | (110,788) | (3,153) |
Notes receivable | 0 | 150,000 |
Proceeds from sale of stock | 1,774,001 | 179,916 |
Proceeds from sale of Series B Convertible Preferred stock | 1,500,000 | 0 |
Proceeds from convertible debentures | 100,000 | 565,800 |
Payments on convertible debentures | (85,500) | (123,037) |
Payments on convertible debentures, related party | (69,000) | 0 |
Cash provided by financing activities | 3,102,724 | 763,837 |
NET CHANGE IN CASH | 445,491 | 188 |
CASH AT BEGINNING OF PERIOD | 137,499 | 24,280 |
CASH AT END OF PERIOD | 582,990 | 24,468 |
INTEREST PAID | 170,911 | 96,018 |
Supplemental Disclosure of Non-Cash Investing and Financing Activities: | ||
Shares issued upon conversion | 383,448 | 1,128,068 |
Shares issued upon exercise of warrants | 0 | 150,000 |
Right of use asset and lease liability | 275,400 | 0 |
Notes receivable for convertible debentures | 0 | 90,000 |
Conversion of common shares to Series A Preferred Shares | $ 0 | $ 500 |
1. NATURE OF THE ORGANIZATION A
1. NATURE OF THE ORGANIZATION AND BUSINESS | 9 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF THE ORGANIZATION AND BUSINESS | Nature of the Business NaturalShrimp Incorporated (“NaturalShrimp” or the “Company”), a Nevada corporation, is a biotechnology company and has developed a proprietary technology that allows it to grow Pacific White shrimp (Litopenaeus vannamei, formerly Penaeus vannamei) in an ecologically controlled, high-density, low-cost environment, and in fully contained and independent production facilities. The Company’s system uses technology which allows it to produce a naturally-grown shrimp “crop” weekly, and accomplishes this without the use of antibiotics or toxic chemicals. The Company has developed several proprietary technology assets, including a knowledge base that allows it to produce commercial quantities of shrimp in a closed system with a computer monitoring system that automates, monitors and maintains proper levels of oxygen, salinity and temperature for optimal shrimp production. Its initial production facility is located outside of San Antonio, Texas. The Company has two wholly-owned subsidiaries including NaturalShrimp Corporation, NaturalShrimp Global, Inc. and 51% owned Natural Aquatic Systems, Inc. (“NAS”). Going Concern The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. For the nine months ended December 31, 2019, the Company had a net loss available for common stockholders of approximately $2,521,000. At December 31, 2019, the Company had an accumulated deficit of approximately $43,745,000 and a working capital deficit of approximately $4,015,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern, within one year from the issuance date of this filing. The Company’s ability to continue as a going concern is dependent on its ability to raise the required additional capital or debt financing to meet short and long-term operating requirements. During the nine months ended December 31, 2019, the Company received net cash proceeds of approximately $100,000 from the issuance of convertible debentures, approximately $1,774,000 from the issuance of approximately 14,758,000 common shares of the Company’s common stock through an equity financing agreement, and $1,500,000 from the sale of 1,500 Series B Preferred shares. Subsequent to December 31, 2019, the Company received $500,000 from the sale of Series B Preferred shares. (See Note 10). Management believes that private placements of equity capital and/or additional debt financing will be needed to fund the Company’s long-term operating requirements. The Company may also encounter business endeavors that require significant cash commitments or unanticipated problems or expenses that could result in a requirement for additional cash. If the Company raises additional funds through the issuance of equity or convertible debt securities, the percentage ownership of its current shareholders could be reduced, and such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, the Company may not be able to take advantage of prospective business endeavors or opportunities, which could significantly and materially restrict our operations. The Company continues to pursue external financing alternatives to improve its working capital position. If the Company is unable to obtain the necessary capital, the Company may have to cease operations. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The accompanying unaudited financial information as of and for the three and nine months ended December 31, 2019 and 2018 has been prepared in accordance with GAAP in the U.S. for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended March 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on July 1, 2019. The condensed consolidated balance sheet at March 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. Consolidation The consolidated financial statements include the accounts of NaturalShrimp Incorporated and its wholly-owned subsidiaries, NaturalShrimp Corporation, NaturalShrimp Global and 51 % owned Natural Aquatic Systems, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Basic and Diluted Earnings/Loss per Common Share Basic and diluted earnings or loss per share (“EPS”) amounts in the consolidated financial statements are computed in accordance with ASC 260 – 10 “Earnings per Share”, which establishes the requirements for presenting EPS. Basic EPS is based on the weighted average number of shares of common stock outstanding. Diluted EPS is based on the weighted average number of shares of common stock outstanding and dilutive common stock equivalents. Basic EPS is computed by dividing net income or loss available to common stockholders (numerator) by the weighted average number of shares of common stock outstanding (denominator) during the period. For the nine months ended December 31, 2019, the Company had approximately $709,000 in convertible debentures whose approximately 22,895,000 underlying shares are convertible at the holders’ option at conversion prices ranging from $0.01 to $0.30 for fixed conversion rates, and 57% - 60% of the defined trading price for variable conversion rates and approximately 848,000 warrants with an exercise price of 45% of the market price of the Company’s common stock, which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. For the nine months ended December 31, 2018, the Company had approximately $974,000 in principal on convertible debentures whose approximately 96,842,000 underlying shares are convertible at the holders’ option at conversion prices ranging from 34% - 75% of the defined trading price and approximately 10,637,000 warrants with an exercise price of 45% of the market price of the Company’s common stock, which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. Fair Value Measurements ASC Topic 820, “ Fair Value Measurement” “Financial Instruments.” Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred. The Company did not have any Level 1 or Level 2 assets and liabilities at December 31, 2019 and March 31, 2019. The Derivative liabilities are Level 3 fair value measurements. The following is a summary of activity of Level 3 liabilities during the nine months ended December 31, 2019 and 2018: Derivatives 2019 2018 Derivative liability balance at beginning of period $ 157,000 $ 3,455,000 Additions to derivative liability for new debt -- 1,897,000 Reclass to equity upon conversion or redemption (8,000 ) (2,552,500 ) Change in fair value (19,000 ) (1,116,500 ) Balance at end of period $ 130,000 $ 1,683,000 At December 31, 2019, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock of 98.46%, and the various estimated reset exercise prices weighted by probability. At December 31, 2018, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.02; a risk-free interest rate ranging from 2.45% to 2.63%, and expected volatility of the Company’s common stock ranging from 315.25% to 448.43%, and the various estimated reset exercise prices weighted by probability. Warrant liability 2019 2018 Warrant liability balance at beginning of period $ 93,000 $ 277,000 Reclass to equity upon exercise - (150,000 ) Change in fair value - 47,000 Balance at end of period $ 93,000 $ 174,000 At December 31, 2019, the fair value of the warrant liability was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock ranging of 281.4%. At December 31, 2018, the fair value of the warrant liability was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.02 a risk-free interest rate of 2.46%, and expected volatility of the Company’s common stock of 350.2%. Financial Instruments The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “ Financial Instruments” Cash and Cash Equivalents For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2019 and March 31, 2019. Concentration of Credit Risk The Company maintains cash balances at two financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of , 2019 the Company’s cash balance exceeded FDIC coverage. As of March 31, 2019, the Company’s cash balance did not exceed FDIC coverage. Fixed Assets Equipment is carried at historical value or cost and is depreciated over the estimated useful lives of the related assets. Depreciation on buildings is computed using the straight-line method, while depreciation on all other fixed assets is computed using the Modified Accelerated Cost Recovery System (MACRS) method, which does not materially differ from GAAP. Estimated useful lives are as follows: Buildings 27.5 – 39 years Other Depreciable Property 5 – 10 years Furniture and Fixtures 3 – 10 years Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. The consolidated statements of operations reflect depreciation expense of approximately $16,000 and $42,000 and $18,000 and $53,000 for the three and nine months ended December 31, 2019 and 2018, respectively. Commitments and Contingencies Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. Recently Issued Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases During the nine months ended December 31, 2019, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. Management’s Evaluation of Subsequent Events The Company evaluates events that have occurred after the balance sheet date of December 31, 2019, through the date which the consolidated financial statements were issued. Based upon the review, other than described in Note 10 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. |
3. SHORT-TERM NOTE AND LINES OF
3. SHORT-TERM NOTE AND LINES OF CREDIT | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
SHORT-TERM NOTE AND LINES OF CREDIT | On November 3, 2015, the Company entered into a short-term note agreement with Community National Bank for a total value of $50,000. The short-term note had a stated interest rate of 5.25%, maturity date of December 15, 2017 and had an initial interest only payment on February 3, 2016. On July 18, 2018, the short-term note was replaced by a promissory note for the outstanding balance of $25,298, which bears interest at 8% with a maturity date of July 18, 2021. The short-term note is guaranteed by an officer and director. The balance of the note at December 31, 2019 and March 31, 2019 was $14,116 and $20,193, respectively. The Company also has a working capital line of credit with Extraco Bank. On April 30, 2019, the Company renewed the line of credit for $372,675. The line of credit bears an interest rate of 5.0% that is compounded monthly on unpaid balances and is payable monthly. The line of credit matures on April 30, 2020 and is secured by certificates of deposit and letters of credit owned by directors and shareholders of the Company. On April 12, 2019, prior to the renewal, the Company paid $100,000 on the loan. The balance of the line of credit is $372,675 and $472,675 at December 31, 2019 and March 31, 2019, respectively. The Company also has additional lines of credit with Extraco Bank for $100,000 and $200,000, which were renewed on January 19, 2019 and April 30, 2019, respectively, with maturity dates of January 19, 2020 and April 30, 2020, respectively. The lines of credit bear interest at a rate of 6.5% and 5%, respectively, that is compounded monthly on unpaid balances and is payable monthly. They are secured by certificates of deposit and letters of credit owned by directors and shareholders of the Company. The balance of the lines of credit was $276,958 at both December 31, 2019 and March 31, 2019. On January 8, 2020, the Company paid off the $100,000 line of credit. The Company also has a working capital line of credit with Capital One Bank for $50,000. The line of credit bears an interest rate of prime plus 25.9 basis points, which totaled 31.4% as of December 31, 2019. The line of credit is unsecured. The balance of the line of credit was $9,580 at both December 31, 2019 and March 31, 2019. The Company also has a working capital line of credit with Chase Bank for $25,000. The line of credit bears an interest rate of prime plus 10 basis points, which totaled 15.50% as of December 31, 2019. The line of credit is secured by assets of the Company’s subsidiaries. The balance of the line of credit is $10,237 at December 31, 2019 and March 31, 2019. |
4. BANK LOAN
4. BANK LOAN | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
BANK LOAN | On January 10, 2017, the Company entered into a promissory note with Community National Bank for $245,000, at an annual interest rate of 5% and a maturity date of January 10, 2020 (the “CNB Note”). The CNB Note is secured by certain real property owned by the Company in LaCoste, Texas, and is also personally guaranteed by the Company’s President, as well as certain shareholders of the Company. The balance of the CNB Note is $222,736 at December 31, 2019 and $228,725 at March 31, 2019. The CNB note is in technical default as of the date of this filing, and the Company is in negotiations with the bank to extend the maturity date. |
5. CONVERTIBLE DEBENTURES
5. CONVERTIBLE DEBENTURES | 9 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURES | September 14, 2018 Debenture On September 14, 2018, the Company entered into a 12% convertible promissory note for $112,500, with an OID of $10,250, which matures on March 14, 2019. There is a right of prepayment in the first 180 days, but there is no right to repay after 180 days. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The Company has not maintained the required share reservation under the terms of the note agreement. The Company believes it has sufficient available shares of the Company’s common stock in the event of conversion for these notes. The interest rate increases to a default rate of 24% for events as set forth in the agreement, including if the market capitalization is below $5 million, or there are any dilutive issuances. There is also a cross default provision to all other notes. In the event of default, the outstanding principal balance increases to 150%, and if the Company fails to maintain the required authorized share reserve, the outstanding principal increases to 200%. Additionally, If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. Additionally, if the note is not repaid by the maturity date the principal balance increases by $15,000. The market capitalization is below $5 million and therefore the note was in default, however, the holder has issued a waiver to the Company on this default provision. The note is convertible into shares of the Company’s common stock at a variable conversion rate that is equal to the lesser of 60% of the lowest trading price for the last 20 days prior to the issuance of the note or 60% of the lowest market price over the 20 days prior to conversion. The conversion price shall be adjusted upon subsequent sales of securities at a price lower than the original conversion price. There are additional 10% adjustments to the conversion price for events set forth in the agreement, including if the conversion price is less than $0.01, if the Company is not DTC eligible, the Company is no longer a reporting company, or the note cannot be converted into free trading shares on or after nine months from issue date. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. The conversion feature meets the definition of a derivative and therefore requires bifurcation and is accounted for as a derivative liability. On December 13, 2018 the holder converted $11,200 of principal into 4,000,000 shares of common stock of the Company. On January 25, 2019 the outstanding principal of $101,550, plus an additional $56,375 of default principal and $13,695 in accrued interest of the note was purchased from the noteholder by a third party, who extended the maturity date. The new balance outstanding as of December 31, 2019 is $171,620. December 6, 2018 Debenture On December 6, 2018, the Company entered into an 10% convertible promissory note for $210,460, which matures on September 6, 2019. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. The Company did not pay the outstanding principal and accrued interest of approximately $54,000 on the maturity date of September 6, 2019, and therefore the principal was increased by the default penalty of 50%, amounting to approximately $27,000. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.01. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in Accounting Standards Codification (“ASC”) 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was a $136,799 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. There was not any amortization expense recognized during the three months ended December 31, 2019, as the beneficial conversion feature was fully amortized as of September 30, 2019. The amortization expense recognized during the , 2019 amounted to approximately $91,000,. On June 27, 2019 the holder converted $30,000 of principal into 3,000,000 shares of common stock of the Company. On three occasions during the three months ended September 30, 2019, the holder converted $140,000 of principal into 14,000,000 shares of common stock of the Company. The note was fully converted on two occasions during October 2019. December 31, 2018 Debenture On December 31, 2018, the Company entered into an 10% convertible promissory note for $135,910, which matures on September 30, 2019. The maturity date has been extended to March 1, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.01. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in Accounting Standards Codification (“ASC”) 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was a $88,342 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. There was not any amortization expense recognized during the three months ended December 31, 2019, as the beneficial conversion feature was fully amortized as of September 30, 2019. The amortization expense recognized during the , 2019 amounted to approximately $59,000. January 16, 2019 Debenture On January 16, 2019, the Company entered into an 10% convertible promissory note for $205,436, with an OID of $18,686, for a purchase price of $186,750, which matures on October 16, 2019. The maturity date has been extended to March 1, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.01. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in Accounting Standards Codification (“ASC”) 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was a $176,675 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. The amortization expense recognized during the three and nine months ended December 31 , 2019 amounted to approximately $59,000 and $128,000, respectively. On two occasions during the three months ended December 31, 2019, the holder converted $101,661 of principal into 12,000,000 shares of common stock of the Company. February 4, 2019 Debenture On February 4, 2019, the Company entered into an 10% convertible promissory note for $85.500, with an OID of $7,500, for a purchase price of $75,000, which matures on November 4, 2019. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3 (a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder's written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.01. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in ASC 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was a $85,500 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. On August 6, 2019, the Company exercised its option to redeem the February 4, 2019 debenture, for a redemption price of approximately $132,000. The principal of $85,500 and interest of approximately $5,000 was derecognized with the additional $27,000 paid upon redemption recognized as a financing cost and $15,000 for legal fees. As a result of the redemption, the unamortized discount related to the redeemed balance of $38,000 was immediately expensed. March 1, 2019 Debenture On March 1, 2019, the Company entered into an 10% convertible promissory note for $168,000, with an OID of $18,000, for a purchase price of $150,000, which matures on November 1, 2019. The maturity date has been extended to March 1, 2020. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 100% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3(a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.25. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in ASC 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was a $134,000 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. There was not any amortization expense recognized during the three months ended December 31, 2019, as the beneficial conversion feature was fully amortized as of September 30, 2019. The amortization expense recognized during the , 2019 amounted to approximately $100,000,. April 17, 2019 Debenture On April 17, 2019, the Company entered into an 10% convertible promissory note for $110,000, with an OID of $10,000, for a purchase price of $100,000, which matures on January 23, 2020. The maturity date has been waived as of the date of this filing. During the first 180 days the convertible redeemable note is in effect, the Company may redeem the note at a prepayment percentage of 120% to 130% of the outstanding principal and accrued interest based on the redemption date’s passage of time ranging from 60 days to 180 days from the date of issuance of the debenture. Per the agreement, the Company is required at all times to have authorized and reserved three times the number of shares that is actually issuable upon full conversion of the note. In the event of default, as set forth in the agreement, the outstanding principal balance increases to 150%. In addition to standard events of default, an event of default occurs if the common stock of the Company shall lose the “bid” price for its Common Stock, on trading markets, including the OTCBB, OTCQB or an equivalent replacement exchange. If the Company enters into a 3 (a)(9) or 3(a)(10) issuance of shares there are liquidation damages of 25% of principal, not to be below $15,000. The Company must also obtain the noteholder’s written consent before issuing any new debt. The note is convertible at a fixed conversion price of $0.124. If an event of default occurs, the fixed conversion price is extinguished and replaced by a variable conversion rate that is 70% of the lowest trading prices during the 20 days prior to conversion. The fixed conversion price shall reset upon any future dilutive issuance of shares, options or convertible securities. The conversion feature at issuance meets the definition of conventional convertible debt and therefore qualifies for the scope exception in ASC 815-10-15-74(a) and would not be bifurcated and accounted for separately as a derivative liability. The Company analyzed the conversion feature under ASC 470-20, “Debt with conversion and other options”, and based on the market price of the common stock of the Company on the date of funding as compared to the conversion price, determined there was an approximately $59,000 beneficial conversion feature to recognize, which will be amortized over the term of the note using the effective interest method. The amortization expense recognized during the three and nine months ended December 31, 2019 amounted to approximately $20,000 and $59,000, respectively. |
6. STOCKHOLDERS' DEFICIT
6. STOCKHOLDERS' DEFICIT | 9 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT | Preferred Stock As of December 31, 2019 and March 31, 2019, the Company had 200,000,000 shares of preferred stock authorized with a par value of $0.0001. Of this amount, 5,000,000 shares Series A preferred stock are authorized and outstanding. On September 5, 2019, the Board authorized the issuance of 5,000 preferred shares to be designated as Series B Preferred Stock (“Series B PS”). The Series B PS have a par value of $0.0001, a stated value of $1,200 and no voting rights. The Series B PS are redeemable at the Company's option, at percentages ranging from 120% to 135% for the first 180 days, based on the passage of time. The Series B are also redeemable at the holder’s option, upon the occurrence of a triggering event which includes a change of control, bankruptcy, and the inability to deliver Series B PS requested under conversion notices. The triggering redemption amount is at the greater of (i) 135% of the stated value or (ii) the product of the volume-weighted average price (“VWAP”) on the day proceeding the triggering event multiplied by the stated value divided by the conversion price. As the redemption feature at the holder’s option is contingent on a future triggering event, the Series B PS is considered contingently redeemable, and as such the preferred shares are classified in equity until such time as a triggering event occurs, at which time they will be classified as mezzanine. The Series B PS is convertible, at the discounted market price which is defined as the lowest VWAP over last 20 days. The conversion price is adjustable based on several situations, including future dilutive issuances. As the Series B PS does not have a redemption date and is perpetual preferred stock, it is considered to be an equity host instrument and as such the conversion feature is not required to be bifurcated as it is clearly and closely related to the equity host instrument. Series B Preferred Equity Offering On September 17, 2019, the Company entered into a Securities Purchase Agreement (“SPA”) with GHS Investments LLC, a Nevada limited liability company (“GHS”) for the purchase of up to 5,000 shares of Series B PS at a stated value of $1,200 per share, or for a total net proceeds of $5,000,000 in the event the entire 5,000 shares of Series B PS are purchased. On September 17, 2019, the Company received an initial tranche of $250,000 under the SPA. During the three months ended December 31, 2019 the Company received $1,250,000 for the issuance of 1,250 Series B PS. Equity Financing Agreement 2019 On August 23, 2019, the Company entered into a new Equity Financing Agreement (“Equity Financing Agreement”) and Registration Rights Agreement (“Registration Rights Agreement”) with GHS. Under the terms of the Equity Financing Agreement, GHS agreed to provide the Company with up to $11,000,000 upon effectiveness of a registration statement on Form S-1 (the “Registration Statement”) filed with the U.S. Securities and Exchange Commission (the “Commission”). Following effectiveness of the Registration Statement, the Company shall have the discretion to deliver puts to GHS and GHS will be obligated to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) based on the investment amount specified in each put notice. The maximum amount that the Company shall be entitled to put to GHS in each put notice shall not exceed two hundred percent (200%) of the average daily trading dollar volume of the Company’s Common Stock during the ten (10) trading days preceding the put, so long as such amount does not exceed $500,000. Pursuant to the Equity Financing Agreement, GHS and its affiliates will not be permitted to purchase and the Company may not put shares of the Company’s Common Stock to GHS that would result in GHS’s beneficial ownership equaling more than 4.99% of the Company’s outstanding Common Stock. The price of each put share shall be equal to eighty percent (80%) of the Market Price (as defined in the Equity Financing Agreement). Puts may be delivered by the Company to GHS until the earlier of thirty-six (36) months after the effectiveness of the Registration Statement or the date on which GHS has purchased an aggregate of $11,000,000 worth of Common Stock under the terms of the Equity Financing Agreement. The Registration Rights Agreement provides that the Company shall (i) use its best efforts to file with the Commission the Registration Statement within 30 days of the date of the Registration Rights Agreement; and (ii) have the Registration Statement declared effective by the Commission within 30 days after the date the Registration Statement is filed with the Commission, but in no event more than 90 days after the Registration Statement is filed. The Registration Statement was filed on October 8, 2019 and as of this filing has not yet been deemed effective. Equity Financing Agreement 2018 On August 21, 2018, the Company entered into the first Equity Financing Agreement and Registration Rights Agreement with GHS. Under the terms of the first Equity Financing Agreement, GHS agreed to provide the Company with up to $7,000,000 upon effectiveness of a registration statement on Form S-1 filed with the U.S. Securities and Exchange Commission. The registration statement was filed and deemed effective on September 19, 2018. Following effectiveness of the first registration statement, the Company had the discretion to deliver puts to GHS and GHS was obligated to purchase shares of the Company’s common stock, based on the investment amount specified in each put notice. The maximum amount that the Company was entitled to put to GHS in each put notice was not to exceed two hundred percent (200%) of the average daily trading dollar volume of the Company’s Common Stock during the ten (10) trading days preceding the put, so long as such amount did not exceed $300,000. Pursuant to the first Equity Financing Agreement, GHS and its affiliates will not be permitted to purchase, and the Company may not put shares of the Company’s Common Stock to GHS that would result in GHS’s beneficial ownership equaling more than 9.99% of the Company’s outstanding Common Stock. The price of each put share was to be equal to eighty percent (80%) of the Market Price (as defined in the Equity Financing Agreement). Puts may be delivered by the Company to GHS until the earlier of thirty-six (36) months after the effectiveness of the Registration Statement or the date on which GHS has purchased an aggregate of $7,000,000 worth of Common Stock under the terms of the Equity Financing Agreement. During the three months ended June 30, 2019, the Company put to GHS for the issuance of 11,482,721 shares of common stock for a total of $1,500,000. Options and Warrants The Company has not granted any options since inception. The Company granted warrants in connection with various convertible debentures in previous periods. As of December 31, 2019 and March 31, 2019, there are 848,000 and 444,000 (after adjustment) remaining warrants to purchase shares of common stock outstanding, classified as a warrant liability, which expire on January 31, 2022, with an exercise price of 45% of the market value of the common shares of the Company on the date of exercise. The warrant liability was revalued at December 31, 2019, resulting in no change to the fair value of the warrant liability for the nine months ended December 31, 2019. |
7. RELATED PARTY TRANSACTIONS
7. RELATED PARTY TRANSACTIONS | 9 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | Accrued Payroll – Related Parties Included in other accrued expenses on the accompanying consolidated balance sheet as of December 31, 2019 is approximately $185,000 owing to the former Chief Executive Officer of the Company, approximately $56,000 owing to the President of the Company, and approximately $96,000 owing to a key employee. Notes Payable – Related Parties On April 20, 2017, the Company entered into a convertible debenture with an affiliate of the Company whose managing member is the Treasurer, Chief Financial Officer, and a director of the Company (the “affiliate”), for $140,000. The convertible debenture matures one year from date of issuance, and bears interest at 6%. Upon an event of default, as defined in the debenture, the principal and any accrued interest becomes immediately due, and the interest rate increases to 24%. The convertible debenture is convertible at the holder’s option at a conversion price of $0.30. As of March 31, 2018, the Company had paid $52,400 on this note, with $87,600 remaining outstanding as of March 31, 2019. On July 26, 2019, the Company paid $47,000 on this note and on December 17, 2019, $22,000, leaving $18,600 remaining outstanding on the note as of December 31, 2019. Subsequent to period end, on February 4, 2020, the Company paid off the remaining $18,600. NaturalShrimp Holdings, Inc. On January 1, 2016 the Company entered into a notes payable agreement with NaturalShrimp Holdings, Inc.(“NSH”), a shareholder. Between January 16, 2016 and March 7, 2016, the Company borrowed $134,750 under this agreement. An additional $601,361 was borrowed under this agreement in the year ended March 31, 2017. The note payable has no set monthly payment or maturity date with a stated interest rate of 2%. As of December 31, 2019 and March 31, 2019 the outstanding balance is approximately $735,000. Shareholder Notes The Company has entered into several working capital notes payable to multiple shareholders of NSH and Bill Williams, a former officer and director, and a current shareholder of the Company, for a total of $486,500. The notes are unsecured and bear interest at 8%. These notes had stock issued in lieu of interest and have no set monthly payment or maturity date. The balance of these notes at December 31, 2019 and March 31, 2019 was $426,404 and $426,404, respectively, and is classified as a current liability on the consolidated balance sheets. At December 31, 2019 and March 31, 2019, accrued interest payable was $266,616 and $241,032, respectively. Shareholders In 2009, the Company entered into a note payable to Randall Steele, a shareholder of NSH, for $50,000. The note bears interest at 6.0% and was payable upon maturity on January 20, 2011, and is currently in default. The note is unsecured. The balance of the note at December 31, 2019 and March 31, 2019 was $50,000, respectively, and is classified as a current liability on the consolidated balance sheets. Beginning in 2010, the Company started entering into several working capital notes payable with various shareholders of NSH for a total of $290,000 and bearing interest at 8%. The balance of these notes at December 31, 2019 and March 31, 2019 was $104,647 and is classified as a current liability on the consolidated balance sheets. |
8. LEASE
8. LEASE | 9 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASE | On June 24, 2019, the Company entered into a service and equipment lease agreement for water treatment services, consumables and equipment. The lease term is for five years, with a renewal option of an additional five years, with a monthly lease payment of $5,000. The Company analyzed the classification of the lease under ASC 842, and as it did not meet any of the criteria for a financing lease it has been classified as an operating lease. The Company determined the Right of Use asset and Lease liability values at inception calculated at the present value of all future lease payments for the lease term, using an incremental borrowing rate of 5%. The Lease Liability will be expensed each month, on a straight line basis, over the life of the lease. For the three and nine months ended December 31, 2019 the lease expense was $15,000 and $30,000, and the amortization of the Right of Use asset was $11,702 and $23,260. |
9. COMMITMENTS AND CONTINGENCIE
9. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Executive Employment Agreements – Bill Williams and Gerald Easterling On April 1, 2015, the Company entered into employment agreements with each of Bill G. Williams, as the Company’s Chief Executive Officer, and Gerald Easterling as the Company’s President, effective as of April 1, 2015 (the “Employment Agreements”). The Employment Agreements are each terminable at will and each provide for a base annual salary of $96,000. In addition, the Employment Agreements each provide that the employee is entitled, at the sole and absolute discretion of the Company’s Board of Directors, to receive performance bonuses. Each employee will also be entitled to certain benefits including health insurance and monthly allowances for cell phone and automobile expenses. Each Employment Agreement provides that in the event employee is terminated without cause or resigns for good reason (each as defined in their Employment Agreements), the employee will receive, as severance the employee’s base salary for a period of 60 months following the date of termination. In the event of a change of control of the Company, the employee may elect to terminate the Employment Agreement within 30 days thereafter and upon such termination would receive a lump sum payment equal to 500% of the employee’s base salary. Each Employment Agreement contains certain restrictive covenants relating to non-competition, non-solicitation of customers and non-solicitation of employees for a period of one year following termination of the employee’s Employment Agreement. On August 15, 2019, Mr. Bill Williams resigned from his position as Chairman of the Board and Chief Executive Officer of the Company, effective August 31, 2019. A separation agreement is currently being negotiated. Vista Capital Investments, LLC On April 30, 2019, a complaint was filed against the Company in the U.S. District Court in Dallas, Texas alleging that the Company breached a provision in a common stock purchase warrant (the “Vista Warrant”) issued by the Company to Vista Capital Investments, LLC (“Vista”). Vista alleges that the Company failed to issue certain shares of the Company’s common stock as was required under the terms of the Vista Warrant. Vista is currently seeking money damages in the approximate amount of $7,000,000, which the Company believes is unwarranted and excessive, as well as costs and reimbursement of expenses. As of the date hereof, no hearing has been scheduled, but the Company is vigorously defending itself against these claims, preparing a counter-claim against Vista and taking such other appropriate action, in addition to seeking for other costs and relief as may be appropriate. The Company is currently in discussions with Vista and has accrued $50,000 for the settlement of this complaint, which is recognized as “loss on warrant settlement” on the accompanying Statement of Operations in the nine months ended December 31, 2019. Contingent Events On August 5, 2019, the Company received a formal notice from the Texas Parks and Wildlife Department for the Company’s facility in La Coste, Texas due to the detection of IHHNV, a viral disease of Pacific white shrimp, from two Postlarvae (“PL”) shipments from the Company’s Texas hatchery supplier in March and April of this year. At the time of receipts of such shipments from the hatchery in March and April, the Company was notified by its supplier that the shipments were virus free. Based on the Company’s quality control procedures during the course of the shrimp farming process in the Company’s tanks and, in this case the slower than normal growth rate indicating possible compromise, the Company undertook to have lots independently tested by the University of Arizona Pathology Laboratory in Tucson. Based on those tests, IHHNV was detected and the Company’s facility was placed under quarantine until further notice by Texas Parks and Wildlife Department and the United States Department of Agriculture/Animal and Plant Health Inspection Service. Such quarantine notice also imposes no discharge of any culture water to state waters (creeks, rivers, streams, bays) and no sales of any shrimp until further notice. The Company’s system of tanks prevents crossover contamination in order to quickly begin restocking of PL shrimp from a different hatchery beginning in August in different tanks. Such orders have been placed and are expected to be placed into production as soon as inspection is passed and the quarantine has been lifted. Furthermore, the Company has enhanced its system to include nursery tanks that will allow the Company to evaluate the health of the shrimp through much earlier testing in its quality control process. While the Company expects to incur costs associated with the proper disposal of such batches, it does not expect it to be material. |
10. SUBSEQUENT EVENTS
10. SUBSEQUENT EVENTS | 9 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Sale of Series B PS Subsequent to period end, on January 7, 2020, and January 31, 2020, the Company received further tranches of $250,000 each under the SPA. Issuance of Common Stock under Convertible Notes Subsequent to December 31, 2019, the GHS December 30, 2018 debenture and related accrued interest was fully converted into 14,980,353 shares of the Company’s common stock. Notes Payable – Related Parties On February 4, 2020, the Company paid the remaining outstanding balance of $18,600 of the convertible debenture owed an affiliate of the Company whose managing member is the Treasurer, Chief Financial Officer, and a director of the Company (Note 7). |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited financial information as of and for the three and nine months ended December 31, 2019 and 2018 has been prepared in accordance with GAAP in the U.S. for interim financial information and with the instructions to Quarterly Report on Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, such financial information includes all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of our financial position at such date and the operating results and cash flows for such periods. Operating results for the nine months ended December 31, 2019 are not necessarily indicative of the results that may be expected for the entire year or for any other subsequent interim period. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the U.S. Securities and Exchange Commission, or the SEC. These unaudited financial statements and related notes should be read in conjunction with our audited financial statements for the year ended March 31, 2019 included in the Company’s Annual Report on Form 10-K filed with the SEC on July 1, 2019. The condensed consolidated balance sheet at March 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles in the U.S. for complete financial statements. |
Consolidation | The consolidated financial statements include the accounts of NaturalShrimp Incorporated and its wholly-owned subsidiaries, NaturalShrimp Corporation, NaturalShrimp Global and 51 % owned Natural Aquatic Systems, Inc. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Basic and Diluted Earnings/Loss per Common Share | Basic and diluted earnings or loss per share (“EPS”) amounts in the consolidated financial statements are computed in accordance with ASC 260 – 10 “Earnings per Share”, which establishes the requirements for presenting EPS. Basic EPS is based on the weighted average number of shares of common stock outstanding. Diluted EPS is based on the weighted average number of shares of common stock outstanding and dilutive common stock equivalents. Basic EPS is computed by dividing net income or loss available to common stockholders (numerator) by the weighted average number of shares of common stock outstanding (denominator) during the period. For the nine months ended December 31, 2019, the Company had approximately $709,000 in convertible debentures whose approximately 22,895,000 underlying shares are convertible at the holders’ option at conversion prices ranging from $0.01 to $0.30 for fixed conversion rates, and 57% - 60% of the defined trading price for variable conversion rates and approximately 848,000 warrants with an exercise price of 45% of the market price of the Company’s common stock, which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. For the nine months ended December 31, 2018, the Company had approximately $974,000 in principal on convertible debentures whose approximately 96,842,000 underlying shares are convertible at the holders’ option at conversion prices ranging from 34% - 75% of the defined trading price and approximately 10,637,000 warrants with an exercise price of 45% of the market price of the Company’s common stock, which were not included in the calculation of diluted EPS as their effect would be anti-dilutive. |
Fair Value Measurements | ASC Topic 820, “ Fair Value Measurement” “Financial Instruments.” Nonfinancial assets, such as property, plant and equipment, and nonfinancial liabilities are recognized at their carrying amounts in the Company’s balance sheets. GAAP does not permit nonfinancial assets and liabilities to be remeasured at their fair values. However, GAAP requires the remeasurement of such assets and liabilities to their fair values upon the occurrence of certain events, such as the impairment of property, plant and equipment. In addition, if such an event occurs, GAAP requires the disclosure of the fair value of the asset or liability along with other information, including the gain or loss recognized in income in the period the remeasurement occurred. The Company did not have any Level 1 or Level 2 assets and liabilities at December 31, 2019 and March 31, 2019. The Derivative liabilities are Level 3 fair value measurements. The following is a summary of activity of Level 3 liabilities during the nine months ended December 31, 2019 and 2018: Derivatives 2019 2018 Derivative liability balance at beginning of period $ 157,000 $ 3,455,000 Additions to derivative liability for new debt -- 1,897,000 Reclass to equity upon conversion or redemption (8,000 ) (2,552,500 ) Change in fair value (19,000 ) (1,116,500 ) Balance at end of period $ 130,000 $ 1,683,000 At December 31, 2019, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock of 98.46%, and the various estimated reset exercise prices weighted by probability. At December 31, 2018, the fair value of the derivative liabilities of convertible notes was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.02; a risk-free interest rate ranging from 2.45% to 2.63%, and expected volatility of the Company’s common stock ranging from 315.25% to 448.43%, and the various estimated reset exercise prices weighted by probability. Warrant liability 2019 2018 Warrant liability balance at beginning of period $ 93,000 $ 277,000 Reclass to equity upon exercise - (150,000 ) Change in fair value - 47,000 Balance at end of period $ 93,000 $ 174,000 At December 31, 2019, the fair value of the warrant liability was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.11; a risk-free interest rate of 1.55%, and expected volatility of the Company’s common stock ranging of 281.4%. At December 31, 2018, the fair value of the warrant liability was estimated using the following weighted-average inputs: the price of the Company’s common stock of $0.02 a risk-free interest rate of 2.46%, and expected volatility of the Company’s common stock of 350.2%. |
Financial Instruments | The Company’s financial instruments include cash and cash equivalents, receivables, payables, and debt and are accounted for under the provisions of ASC Topic 825, “ Financial Instruments” |
Cash and Cash Equivalents | For the purpose of the consolidated statements of cash flows, the Company considers all highly liquid instruments purchased with a maturity of three months or less to be cash equivalents. There were no cash equivalents at December 31, 2019 and March 31, 2019. |
Concentration of Credit Risk | The Company maintains cash balances at two financial institution. Accounts at this institution are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. As of , 2019 the Company’s cash balance exceeded FDIC coverage. As of March 31, 2019, the Company’s cash balance did not exceed FDIC coverage. |
Fixed Assets | Equipment is carried at historical value or cost and is depreciated over the estimated useful lives of the related assets. Depreciation on buildings is computed using the straight-line method, while depreciation on all other fixed assets is computed using the Modified Accelerated Cost Recovery System (MACRS) method, which does not materially differ from GAAP. Estimated useful lives are as follows: Buildings 27.5 – 39 years Other Depreciable Property 5 – 10 years Furniture and Fixtures 3 – 10 years Maintenance and repairs are charged to expense as incurred. At the time of retirement or other disposition of equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. The consolidated statements of operations reflect depreciation expense of approximately $16,000 and $42,000 and $18,000 and $53,000 for the three and nine months ended December 31, 2019 and 2018, respectively. |
Commitments and Contingencies | Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company’s management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company’s legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed. |
Recently Issued Accounting Standards | In February 2016, the FASB issued ASU No. 2016-02, Leases During the nine months ended December 31, 2019, there were several new accounting pronouncements issued by the Financial Accounting Standards Board. Each of these pronouncements, as applicable, has been or will be adopted by the Company. Management does not believe the adoption of any of these accounting pronouncements has had or will have a material impact on the Company’s consolidated financial statements. |
Management's Evaluation of Subsequent Events | The Company evaluates events that have occurred after the balance sheet date of December 31, 2019, through the date which the consolidated financial statements were issued. Based upon the review, other than described in Note 10 – Subsequent Events, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements. |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Activity of Level 3 liabilities | Derivatives 2019 2018 Derivative liability balance at beginning of period $ 157,000 $ 3,455,000 Additions to derivative liability for new debt -- 1,897,000 Reclass to equity upon conversion or redemption (8,000 ) (2,552,500 ) Change in fair value (19,000 ) (1,116,500 ) Balance at end of period $ 130,000 $ 1,683,000 Warrant liability 2019 2018 Warrant liability balance at beginning of period $ 93,000 $ 277,000 Reclass to equity upon exercise - (150,000 ) Change in fair value - 47,000 Balance at end of period $ 93,000 $ 174,000 |
Estimated useful lives | Buildings 27.5 – 39 years Other Depreciable Property 5 – 10 years Furniture and Fixtures 3 – 10 years |
1. NATURE OF THE ORGANIZATION_2
1. NATURE OF THE ORGANIZATION AND BUSINESS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss available for common stockholders | $ (869,483) | $ (964,274) | $ (2,521,464) | $ (2,323,235) | |
Accumulated deficit | (43,744,909) | (43,744,909) | $ (41,223,445) | ||
Working capital deficit | $ (4,015,000) | (4,015,000) | |||
Proceeds from convertible debentures | 100,000 | 565,800 | |||
Proceeds from sale of stock | 1,774,001 | 179,916 | |||
Proceeds from sale of Series B Convertible Preferred stock | $ 1,500,000 | $ 0 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 9 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Derivative liability, beginning | $ 157,000 | $ 3,455,000 |
Additions to derivative liability for new debt | 0 | 1,897,000 |
Reclass to equity upon conversion | (8,000) | (2,552,500) |
Change in fair value | (19,000) | (1,116,500) |
Derivative liability, ending | 130,000 | 1,683,000 |
Warrant liability, beginning | 93,000 | 277,000 |
Reclass to equity upon exercise | 0 | (150,000) |
Change in fair value | 0 | 47,000 |
Warrant liability, beginning | $ 93,000 | $ 174,000 |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 9 Months Ended |
Dec. 31, 2019 | |
Buildings | Minimum | |
Estimated useful life | 27 years 6 months |
Buildings | Maximum | |
Estimated useful life | 39 years |
Other Depreciable Property | Minimum | |
Estimated useful life | 5 years |
Other Depreciable Property | Maximum | |
Estimated useful life | 10 years |
Furniture and Fixtures | Minimum | |
Estimated useful life | 3 years |
Furniture and Fixtures | Maximum | |
Estimated useful life | 10 years |
2. SUMMARY OF SIGNIFICANT ACC_6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||||
Depreciation | $ 15,958 | $ 17,726 | $ 41,521 | $ 53,171 |
3. SHORT-TERM NOTE AND LINES _2
3. SHORT-TERM NOTE AND LINES OF CREDIT (Details Narrative) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Line of credit balance | $ 679,083 | $ 139,418 |
Community National Bank | ||
Line of credit balance | 14,116 | 20,193 |
Extraco Bank | ||
Line of credit balance | 372,675 | 472,675 |
Additional Lines of Credit Extraco Bank | ||
Line of credit balance | 276,958 | 276,958 |
Capital One Bank | ||
Line of credit balance | 9,580 | 9,580 |
Chase Bank | ||
Line of credit balance | $ 10,237 | $ 10,237 |
4. BANK LOAN (Details Narrative
4. BANK LOAN (Details Narrative) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Debt Disclosure [Abstract] | ||
Current maturities of bank loan | $ 222,736 | $ 228,725 |
7. RELATED PARTY TRANSACTIONS (
7. RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Dec. 31, 2019 | Mar. 31, 2019 |
Note payable related party | $ 18,600 | $ 87,600 |
NaturalShrimp Holdings, Inc | ||
Note payable related party | 735,000 | 735,000 |
Multiple Shareholders | ||
Note payable related party | 426,404 | 426,404 |
Accrued interest payable | 266,616 | 241,032 |
Randall Steele | ||
Note payable related party | 50,000 | 50,000 |
Various Shareholders | ||
Note payable related party | $ 104,647 | $ 104,647 |
8. LEASE (Details Narrative)
8. LEASE (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Lease expense | $ 15,000 | $ 30,000 |
Amortization of right of use asset | $ 11,702 | $ 23,260 |