Biotechnology aquaculture company NaturalShrimp Inc. (SHMP:OTCQB), which has developed, patented and now commercialized the first operational, shrimp-focused RAS (Recirculating Aquaculture System), today announced "it has entered into a purchase agreement with Gulf Seafood Inc. (GSI), a distributor in the Tampa/St. Petersburg, Fla. region for a three-month trial and delivery of 25,000 pounds of live shrimp which GSI will purchase, distribute and market."
The firm explained that GSI is a Florida-based company with lengthy experience in the U.S. live shrimp market that specializes in producing, packaging, and distributing live wild caught shrimp. The company noted that " GSI has developed a proven method of keeping shrimp alive during shipping without the need for adding water to the package."
The firm advised that if it is successful in meeting the product and delivery requirements during the trial period, there is a good possibility that GSI will agree to a longer-term distribution agreement for 2022 for additional live shrimp orders.
Under the terms of the agreement between the two parties, the minimum price established for shrimp deliveries will be at least $10.50 per pound FOB or higher. For its part, GSI will employ its expertise to assist in procuring necessary materials, equipment and facilities and will also provide logistical support including training staff on packaging methodology for shipping live shrimp.
NaturalShrimp's CEO Gerald Easterling remarked, "This agreement is a major milestone in the commercialization of our land-based gourmet-grade shrimp and the commencement of weekly production at our shrimp facilities… In addition to the fresh retail and wholesale markets, NaturalShrimp's ability to provide live shrimp to the market on a weekly basis is unique to the industry."
"GSI is a well-known distributor with a large network of buyers with the logistics and capacity to market our products. We are confident that after an initial successful partnership period, we will embark on a longer-term distribution agreement with GSI. At this stage of commercialization, with weekly production on track for Q1/22, we have numerous sales channel partners in place," Easterling added.
The company's CFO William Delgado commented, "We will be selling various sizes of shrimp to GSI at a price of $10.50 per pound. With this agreement in place, we are projecting sales for the December 2021 quarter of between $300,000 to $500,000. As sales and customers begin to ramp, we expect to be cash flow positive from sales and licensing agreements somewhere between the first and second quarters of calendar 2022."
Yesterday, in a separate news release, NaturalShrimp's CEO Gerald Easterling issued a letter to shareholders updating them on recent operations at the company. In the letter, Easterling stated that 2021 has been a pivotal year for the company and that the commercialization phase of its disruptive RAS (Recirculating Aquaculture System) technology in now underway.
According to the letter, NaturalShrimp is now on track to achieve material revenues and positive cash flow operations in 2022 and beyond as several key milestones are now being realized or are within reach. The company advised that under the agreement with GSI mentioned above, it expects sales for the December 2021 quarter to be between $300,000 and $500,000.
The firm noted that it has commenced weekly stocking and "growout" of shrimp at one its barns in Webster City, Iowa in to prepare for weekly harvesting operations. The company said it tested and implemented its patented filtration equipment in the first of its five barns and is now retrofitting the other four barns. When the work is complete, the location will have the capacity to produce 9,000 pounds weekly by the second calendar quarter of 2022.
NaturalShrimp further advised that its LaCoste, Tex. plant is gearing up to full capacity and it believes it will be able to ramp up full production of 3,000 pounds per week by the end of the first quarter 2022. The company mentioned additionally that it has plans to break ground on an 80,000 sq. ft. expansion project at the LaCoste site within the next 60 days.
The company indicated that is also pursuing several other opportunities including a $25M grant for an expansion plant in Northern Fla. and technology licensing opportunities with an unnamed Salmon producer. NaturalShrimp noted that "it is willing to entertain license opportunities in all areas of aquaculture except for the production of shrimp."
NaturalShrimp is a biotechnology-based, aquaculture company based in Dallas, Tex. The firm claims that "it has developed the first commercially viable 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." The company listed that using its technology and processes, gourmet-grade Pacific white shrimp can be produced worldwide at any location.
NaturalShrimp started the day with a market capitalization of around $273 million with approximately 603 million shares outstanding. SHMP shares opened 12% higher today at $0.5067 (+$0.0548, +12.13%) over yesterday's $0.4519 closing price. The stock traded today between $0.4715 and $0.55 per share and closed at $0.50 (+$0.050, +11.06%).
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