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SPAC Scampi: NaturalShrimp Dives into NASDAQ

A variety of seafood on ice.

Close up of cooled seafood - trout, sockeye, sea bass, in the market of a fish shop, supermarket, horizontal frame, side view

NaturalShrimp, an aquaculture company focused on America’s most popular seafood, will join the NASDAQ via a SPAC acquisition. Valued at $275 million, the company intends to use cash proceeds “to accelerate our efforts for commercialization and the ramp up of production of our fresh, land-based gourmet-grade shrimp at the largest indoor farming facilities in the U.S.”

Shrimp has become the nation’s most popular seafood, with the average American consuming approximately 4 and a half pounds of the crustacean each year. Both low in calories and high in protein and nutrients, shrimp is widely praised by dietitians. Shrimp’s antioxidant astaxanthin, derived from its algae diet, has been found to strengthen people’s arteries and protect their brain from inflammation.

From battered to boiled, shrimp is consumed by Americans in its many forms at a pace of nearly 1 billion pounds per year. While the Gulf states catch hundreds of millions of pounds of shrimp per year from the Gulf of Mexico, they cannot come close to keeping up with demand and nearly 90% of the nation’s shrimp comes from overseas, typically farmed in Asia and Central America.

According to analysts, farmed shrimp from these regions can have a dark side: “shrimp aquaculture in particular has a very grim reputation, rife with accounts of slave laborers harvesting disease-ridden crustaceans from antibiotic-filled swamps amid the dead mangroves.” While some of these aquaculture farms are run with the highest standards, others misuse antibiotics, overcrowd ponds, and mistreat their labor force.

American businesses such as NaturalShrimp, have sought to use technology to increase domestic shrimp farming in a healthy and sustainable manner. The deal’s press release touts NaturalShrimp as running “the first commercially viable system for growing shrimp in enclosed, salt-water systems, using patented technology to produce fresh, naturally grown shrimp, without the use of antibiotics or toxic chemicals.”

Global Shrimp Production

Source: Global Seafood Alliance

The company focuses on large, premium shrimp, with the goal of building land-based farms near the United States’ ten top population centers so it can readily supply those markets with fresh shrimp. With most experts predicting that there will not be enough fresh-caught seafood to feed demand within the next ten years, NaturalShrimp is counting on these farms to become increasingly crucial to getting scampi on Americans’ plates.

Further, fresh shrimp can be rare except for certain coastal states and during particular seasons, so the vast majority of shrimp consumed is frozen. Shrimp quality varies wildly based on how the shrimp is processed, ranging from treatment with chemical additives to fisherman utilizing freezing plates right on their boats.

The SPAC, Yotta Acquisition Corporation, was formed in March with the intention “to focus on high technology, blockchain, software and hardware, ecommerce, social media and other general business industries globally.” Because SPACs that return fund to their investors can face a 1% excise tax starting in 2023, sponsors are eager to make a deal or liquidate before year end. 

According to Matterhorn’s comprehensive M&A database, which harnesses AI to track current and historical deals, NaturalShrimp was advised by law firm Lucosky Brookman LLP and financial advisers Joseph Gunnar & Co., LLC and Roth Capital Partners, LLC. Yotta Acquisition Corporation was advised by Loeb & Loeb LLP and financial adviser Chardan.

Source: NOAA Fisheries
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