Yotta Acquisition Corp. (NASDAQ:YOTA) announced this afternoon in an 8-K filing that NaturalShrimp (OTCQB:SHMP) has not fulfilled its obligation to pay the termination fee following the cancellation of their proposed business combination.
It appears NaturalShrimp is in hot water after the company has failed to pay a $3 million fee as well as its portion of the costs associated with an extension, which were supposed to be shared equally between the two parties.
As a recap, on July 20, the land-based shrimp farm supplier officially notified Yotta of its termination of the merger agreement due to the SPAC’s alleged breach of certain representations in the agreement.
Specifically, NaturalShrimp claimed that Yotta’s inability to comply with the provision in its Amended and Restated Certificate of Incorporation, which mandates the possession of net tangible assets amounting to at least $5,000,001 upon consummation of the initial business combination, conflicts with the SPAC’s representation in the agreement that its actions would not contradict its organizational documents.
Additionally, NaturalShrimp cited delays in the SEC registration process. The SPAC was allegedly obligated to use its reasonable best efforts to execute all necessary actions to complete the transactions specified in the merger agreement.
But, Yotta is now fighting back by filing a termination of its own on August 10, and claims that the deal termination was due to breaches by its ex-target for failing to pay their share of contributions to the trust in connection with its extension.
Back in April, shareholders of the SPAC approved a proposal that extended the completion deadline by a full year, pushing it from April 22, 2023, to April 22, 2024. As a result, $120,000 per month was to be deposited into the trust account each month, with the payment intended to be divided equally.
NaturalShrimp has not responded to the termination letter and Yotta believes that the company does not have a legal basis under the agreement to terminate it.
The parties inked their $275 million deal in October 2022. Dallas-based NaturalShrimp is developing a series of land-based shrimp farms to supply the US food service market.