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Item 1A. Risk Factors

2021-04-15 compared with 2020-05-29 · 255 added, 261 removed, 563 unchanged (48% of the section changed)

Annual Report contains certain statements relating to future events or the future financial performance of our Company.

CAUTIONED THAT SUCH STATEMENTS ARE ONLY PREDICTIONS AND INVOLVE RISKS AND UNCERTAINTIES, AND THAT ACTUAL EVENTS OR RESULTS MAY

DIFFER MATERIALLY.

IN EVALUATING SUCH STATEMENTS, YOU SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS IDENTIFIED IN THIS ANNUAL

REPORT, INCLUDING THE MATTERS SET FORTH BELOW, WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH

FORWARD-LOOKING STATEMENTS.

You are cautioned that such statements are only predictions and involve risks and uncertainties, and that actual events or results

may differ materially.

In evaluating such statements, you should specifically consider the various factors identified in this

annual report, including the matters set forth below, which could cause actual results to differ materially from those indicated

by such forward-looking statements.

investment in our common stock involves a high degree of risk.

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deciding to invest in our Company.

IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF

OPERATIONS AND PROSPECTS FOR GROWTH WOULD LIKELY SUFFER.

If any of the following risks actually occur, our business, financial condition, results

of operations and prospects for growth would likely suffer.

Relating to Our Company and Business

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Future acquisitions and

the subsequent integration of new companies into ours would require significant attention from our management.

the subsequent integration of new companies into ours would require significant attention from management.

Future acquisitions

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in the Company.

business is dependent upon the sale of a commodity which value is subject to fluctuation and which value greatly fluctuates.

net sales and operating results vary significantly due to the volatility of the value of the crab meat that we sell which may

result in the volatility of the market price of our common stock.

business is dependent upon the sale of a commodity which value is subject to fluctuation.

Our net sales and operating results

vary significantly due to the volatility of the value of the crab meat that we sell which may result in the volatility of the

market price of our common stock.

material decline in the population and biomass of crab meat that we sell in the fisheries from which we obtain our crab meat would

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population and biomass of crab meat are subject to natural fluctuations which are beyond our control and which may be exacerbated

by disease, reproductive problems or other biological issues and may be affected by changes in weather and global environmental

The overall health of a crab or other fish is difficult to measure, and fisheries management is still a relatively inexact

Since we are unable to predict the timing and extent of fluctuations in the population and biomass of our products, we

are unable to engage in any measures that might alleviate the adverse effects of these fluctuations.

Any such fluctuation which

results in a material decline in the population and biomass in the fisheries from which we obtain our crab meat would materially

and adversely affect our business.

by disease, reproductive problems or other biological issues and may be affected by changes in weather and the global environment.

The overall health of a crab or other fish is difficult to measure, and fisheries management is still a relatively inexact science.

Since we are unable to predict the timing and extent of fluctuations in the population and biomass of our products, we are unable

to engage in any measures that might alleviate the adverse effects of these fluctuations.

Any such fluctuation which results in

a material decline in the population and biomass in the fisheries from which we obtain our crab meat would materially and adversely

affect our business.

Our operations are also subject to the risk of variations in supply.

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(Chicken of the Sea Frozen Foods), Phillips

Foods, Inc., Harbor Seafood, Inc., Bonamar Corporation and Twin Tails Seafood Corp.

Some of our competitors have the benefit of

marketing their products under brand names that have better market recognition than ours or have stronger marketing and distribution

channels than we do.

Increased competition as to any of our products could result in price reduction, reduced margins and loss

of market share, which could negatively affect our profitability.

An increase in imported products in the U.S.

at low prices could

also negatively affect our profitability.

Foods, Inc., Harbor Seafood, Inc., and Twin Tails Seafood Corp.

Some of our competitors have the benefit of marketing their products

under brand names that have better market recognition than ours or have stronger marketing and distribution channels than we do.

Increased competition as to any of our products could result in price reduction, reduced margins and loss of market share, which

could negatively affect our profitability.

An increase in imported products in the United States at low prices could also negatively

affect our profitability.

insurance coverage may be inadequate to cover losses we may incur or to fully replace a significant loss of assets.

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Failure to find a suitable replacement, even on a temporary basis, would have an adverse effect on our results of operations.

are primarily dependent on two suppliers to provide our crab meat product.

Company had two suppliers which accounted for approximately 42% of the Company’s total purchases during the year ended December

These two suppliers are located in Indonesia and the Philippines.

These suppliers included Bacolod, which accounted

for approximately 27% of the Company’s total purchases during 2019.

The loss of any major supplier could have a material

adverse impact on the Company’s results of operations, cash flows and financial position.

John Keeler, our Executive Chairman,

owns 95%, of Bacolod, an exporter of pasteurized crab meat from the Philippines, and 95% of Bicol Blue Star Export Co., a Philippine

company (“Bicol”), and an indirect supplier of crab meat to the Company through Bacolod.

customers accounted for 46% of our revenue.

Company had three customers which accounted for approximately 46% of revenue during the year ended December 31, 2019.

receivables from these customers accounted for approximately 24% of the total accounts receivable as of December 31, 2019.

loss of any major customer could have a material adverse impact on the Company’s results of operations, cash flows and financial

of our significant customer contracts and some of our supplier contracts are short-term and may not be renewable on terms favorable

to us, or at all.

of our customers and some of our suppliers operate through purchase orders or short-term contracts.

Though we have long-term business

relationships with many of our customers and suppliers and alternative sources of supply for key items, we cannot be sure that

any of these customers or suppliers will continue to do business with us on the same basis.

Additionally, although we try to renew

these contracts as they expire, there can be no assurance that these customers or suppliers will renew these contracts on terms

that are favorable to us, if at all.

The termination of, or modification to, any number of these contracts may adversely affect

our business and prospects, including our financial performance and results of operations.

do not have long-term agreements with many of our customers and suppliers.

of our customers and suppliers operate through purchase orders.

Though we have long-term business relationships with many of our

customers and suppliers and alternative sources of supply for key items, we do not have long-term agreements with such customers

and suppliers and cannot be sure that any of these customers or suppliers will continue to do business with us on the same basis

or on terms that are favorable to us.

The termination or modification of any of these relationships may adversely affect our business,

financial performance and results of operations.

Related to Our Financial Condition and Capital Requirements

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concern in its report on our audited financial statements.

report from our independent registered public accounting firm for the fiscal year ended December 31, 2019 includes an explanatory

paragraph stating that for the year ended December 31, 2019, the Company incurred a net loss of $5,021,703, has an accumulated

deficit of $8,952,466 and working capital deficit of $2,786,086, inclusive of $2,910,136 in subordinated stockholder debt.

factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company’s ability

to continue as a going concern is dependent on its ability to increase revenues, execute on its business plan to acquire complimentary

companies, raise capital and continue to sustain adequate working capital to finance its operations.

If we are unable to do so,

our financial condition and results of operations will be materially and adversely affected and we may be unable to continue as

a going concern.

need to raise additional capital to fund our existing commercial operations and develop and commercialize new products and expand

our operations.

current available cash balances and anticipated cash flow from operations are insufficient to satisfy our liquidity requirements.,

We will require substantial additional funds our operations, for the service of debt and to fund our business objectives We will

have to continue to rely on equity and debt financing.

There can be no assurance that financing, whether debt or equity, will

always be available to us in the amount required at any particular time or for any particular period or, if available, that it

can be obtained on terms favorable to us.

Additionally, the continued spread of COVID-19 and uncertain market conditions may limit

the Company’s ability to access capital.

has also caused significant disruptions to the global financial markets, which severely impacts our ability to raise additional

full impact of the COVID-19 outbreak continues to evolve as of the date of this report, is highly uncertain and subject to change.

Management is actively monitoring the situation but given the daily evolution of the COVID-19 outbreak, the Company is not able

to estimate the effects of the COVID-19 outbreak on its operations or financial condition in the next 12 months.

However, while

significant uncertainty remains, the Company believes it is likely that the COVID-19 outbreak may have a negative impact on its

ability to raise additional financing.

report from our independent registered public accounting firm for the year ended December 31, 2020 includes an explanatory paragraph

stating that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial

doubt about its ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent

on its ability to increase revenues, execute on its business plan to acquire complimentary companies, raise capital and continue

to sustain adequate working capital to finance its operations.

If we are unable to do so, our financial condition and results

of operations will be materially and adversely affected and we may be unable to continue as a going concern.

has caused significant disruptions to the global financial markets which severely impacts our ability to raise additional capital.

full impact of the COVID-19 outbreak continues to evolve as of the date of this Annual Report.

Management is actively monitoring

the situation but given the daily evolution of the COVID-19 outbreak, the Company is not able to estimate the effects of the COVID-19

outbreak on its operations or financial condition in the next 12 months.

Additionally, the continued spread of COVID-19 and uncertain

market conditions may limit the Company’s ability to access capital.

may consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage

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related to international expansion;

and the continuing effects of COVID-19.

various ways we could raise additional capital carry potential risks.

If we raise funds by issuing equity securities, dilution

to our stockholders could result.

Any equity securities issued also could provide for rights, preferences or privileges senior

to those of holders of our Common Stock.

If we raise funds by issuing debt securities, those debt securities would have rights,

preferences and privileges senior to those of holders of our Common Stock.

The terms of debt securities issued or borrowings pursuant

to a credit agreement could impose significant restrictions on our operations.

If we raise funds through collaborations and licensing

arrangements, we might be required to relinquish significant rights or grant licenses on terms that are not favorable to us.

incur significant costs as a result of operating as a public company and our management expects to devote substantial time to

public company compliance.

a public company, we incur significant legal, accounting and other expenses due to our compliance with regulations and disclosure

obligations applicable to us, including compliance with the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley

continuing effects of COVID-19.

we raise funds by issuing equity securities, dilution to our stockholders could result.

Any equity securities issued also could

provide for rights, preferences or privileges senior to those of holders of our Common Stock.

If we raise funds by issuing debt

securities, those debt securities would have rights, preferences and privileges senior to those of holders of our Common Stock.

The terms of debt securities issued or borrowings pursuant to a credit agreement could impose significant restrictions on our

If we raise funds through collaborations and licensing arrangements, we might be required to relinquish significant

rights or grant licenses on terms that are not favorable to us.

incur additional costs as a result of operating as a public company and our management must devote time to public company compliance.

comply with the requirements of being a public company, we need to undertake various actions, including maintaining internal controls

and procedures.

As a public company, we incur additional legal, accounting and other expenses due to our compliance with regulations

and disclosure obligations applicable to us, including compliance with the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley

Act”), and the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) as well as rules

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lead to additional compliance costs and impact, in ways we cannot currently anticipate, the manner in which we operate our business.

Our management and other personnel devote a substantial amount of time to these compliance programs and monitoring of and compliance

with, public company reporting obligations.

These rules and regulations cause us to incur significant legal and financial compliance

costs and make some activities more time consuming and costly.

comply with the requirements of being a public company, we may need to undertake various actions, including implementing new internal

controls and procedures and hiring new accounting or internal audit staff.

The Sarbanes-Oxley Act requires that we maintain effective

disclosure controls and procedures and internal control over financial reporting.

We are continuing to develop and refine our

disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports

that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms,

and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal

executive and financial officers.

Our current controls and any new controls that we develop may become inadequate and weaknesses

in our internal control over financial reporting may be discovered in the future.

Any failure to develop or maintain effective

controls could negatively impact the results of periodic management evaluations and annual independent registered public accounting

firm attestation reports regarding the effectiveness of our internal control over financial reporting that we may be required

to include in our periodic reports we will file with the SEC under Section 404 of the Sarbanes-Oxley Act, harm our operating results,

cause us to fail to meet our reporting obligations or result in a restatement of our prior period financial statements.

event that we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that our internal control over financial reporting

is perceived as inadequate or that we are unable to produce timely or accurate financial statements, investors may lose confidence

in our operating results and the price of our common stock could decline.

In addition, if we are unable to continue to meet these

requirements, our common stock may not be able to be eligible for quotation on the OTC Markets or meet the eligibility requirements

for the NASDAQ Stock Market.

are required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore are required

to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.

We are required

to comply with certain of these rules, which require management to certify financial and other information in our quarterly and

annual reports and provide an annual management report on the effectiveness of our internal control over financial reporting.

During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial

reporting, we will be unable to assert that our internal control over financial reporting is effective.

independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control

over financial reporting until the first annual report required to be filed with the SEC following the date we are no longer an

“emerging growth company”

as defined in the JOBS Act depending on whether we choose to rely on certain exemptions

set forth in the JOBS Act.

If we are unable to assert that our internal control over financial reporting is effective, or if our

independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over

financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could

harm our business.

loan and security agreement with ACF Finco I LP (“ACF”), contains operating and financial covenants that may restrict

business and financing activities of our wholly-owned subsidiaries, John Keeler & Co, Inc.

Our management and other personnel devote a substantial amount of time monitoring and complying with public company reporting

obligations which may causes us to incur additional legal and financial compliance costs and make some activities more time consuming.

loan and security agreement with Lighthouse contains operating and financial covenants that may restrict business and financing

activities of our subsidiaries, Keeler & Co.

and Coastal Pride.

of December 31, 2019, we had $6,917,968 in outstanding debt to ACF.

Borrowings under our loan and security agreement with ACF

are secured by substantially all of our personal property, including our intellectual property.

Our loan and security agreement

contains affirmative and negative covenants which restricts our wholly-owned subsidiary, John Keeler & Co, Inc.’s and

its subsidiary, Coastal Pride’s ability to, among other things:

under our loan and security agreement with Lighthouse are secured by substantially all of our personal property, including our

intellectual property.

Our loan and security agreement contains affirmative and negative covenants which restricts our wholly-owned

subsidiary, Keeler & Co.

and its subsidiary, Coastal Pride’s ability to, among other things:

of or sell its assets;

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operating and financial restrictions and covenants in our loan and security agreement, as well as any future financing agreements

into which we may enter, may restrict our or our subsidiary’s ability to finance operations and engage in, expand or otherwise

pursue business activities and strategies.

Our ability to comply with these covenants may be affected by events beyond our control,

and future breaches of any of these covenants could result in a default under our loan and security agreement.

If not waived,

future defaults could cause all of the outstanding indebtedness under our loan and security agreement to become immediately due

and payable and terminate all commitments to extend further credit.

into which we may enter, may restrict the ability to finance operations and engage in, expand or otherwise pursue business activities

and strategies.

Our ability to comply with these covenants may be affected by events beyond our control, and future breaches of

any of these covenants could result in a default under our loan and security agreement.

If not waived, future defaults could cause

all of the outstanding indebtedness under our loan and security agreement to become immediately due and payable and terminate

all commitments to extend further credit.

we do not have or are unable to generate sufficient cash available to repay our debt obligations when they become due and payable,

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key personnel could negatively impact our business.

success depends on the skills, experience and performance of our Executive Chairman and Chief Executive Officer.

The individual

and collective efforts of these individuals will be important as we continue to develop and expand our commercial activities.

The loss or incapacity of existing members of our executive management team could negatively impact our operations if we experience

difficulties in hiring qualified successors.

Qualified employees periodically are in great demand and may be unavailable in the

time frame required to satisfy our customers’

success depends on the skills, experience and performance of John Keeler, our Executive Chairman and Chief Executive Officer.

The individual and collective efforts of such individual will be important as we continue to develop and expand our commercial

The loss or incapacity of Mr.

Keeler could negatively impact our operations if we experience difficulties in hiring

qualified successors.

Qualified employees periodically are in great demand and may be unavailable in the time frame required to

satisfy our customers’

requirements.

Expansion of our business could require us to employ additional

There can be no assurance that we will be able to attract and retain sufficient numbers of skilled employees in the

The loss of personnel or our inability to hire or retain sufficient personnel at competitive rates could impair the growth

of our business.

Expansion of our business could require us to employ additional personnel.

be no assurance that we will be able to attract and retain sufficient numbers of skilled employees in the future.

personnel or our inability to hire or retain sufficient personnel at competitive rates could impair the growth of our business.

we were sued for product liability or professional liability, we could face substantial liabilities that exceed our resources.

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developed infrastructure;

and impositions on operations from Covid-19.

and impositions on operations as a result of the COVID-19 pandemic.

we expand into other target markets, we cannot assure you that our expansion plans will be realized, or if realized, be successful.

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conduct a significant portion of our activities, including administration and data processing, at facilities located in Southern

Florida that have experienced major hurricanes and floods which could affect our facilities, , could significantly disrupt our

operations, and delay or prevent product shipment during the time required to repair, rebuild or replace damaged processing facilities;

these delays could be lengthy and costly.

Our suppliers in Southeast Asia are also vulnerable to natural disasters which could

disrupt their operations and their ability to supply product to us.

Florida that have experienced major hurricanes and floods which could affect our facilities, significantly disrupt our operations,

and delay or prevent product shipment during the time required to repair, rebuild or replace damaged processing facilities.

suppliers in Southeast Asia are also vulnerable to natural disasters which could disrupt their operations and their ability to

supply product to us.

If any of our customers’

facilities are negatively impacted

by a disaster, product shipments could be delayed.

Additionally, customers may delay purchases of products until operations return

Even if we and/or our suppliers are able to quickly respond to a disaster, the ongoing effects of the disaster could

create some uncertainty in the operations of our business.

In addition, our facilities may be subject to a shortage of available

electrical power and other energy supplies.

Any shortages may increase our costs for power and energy supplies or could result

in blackouts, which could disrupt the operations of our affected facilities and harm our business.

facilities are negatively impacted by a disaster, product shipments could

Additionally, customers may delay purchases of products until operations return to normal.

Even if we and/or our suppliers

are able to quickly respond to a disaster, the ongoing effects of the disaster could create some uncertainty in the operations

of our business.

In addition, our facilities may be subject to a shortage of available electrical power and other energy supplies.

Any shortages may increase our costs for power and energy supplies or could result in blackouts, which could disrupt the operations

of our affected facilities and harm our business.

Related to Intellectual Property

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Any significant impairment of our intellectual property rights could harm our business or our ability to compete.

and hurt our results of operation.

Also, protecting our intellectual property rights is costly and time consuming.

Policing unauthorized

use of our proprietary technology can be difficult and expensive.

Litigation might be necessary to protect our intellectual property

rights and any such litigation may be costly and may divert our management’s attention from our core business.

determination in any lawsuit involving our intellectual property is likely to jeopardize our business prospects and reputation.

Although we are not aware of any of such litigation, we have no insurance coverage against litigation costs, so we would be forced

to bear all litigation costs if we cannot recover them from other parties.

All foregoing factors could harm our business, financial

condition, and results of operations.

Any unauthorized use of our intellectual property could make it more expensive for us to

do business and harm our operating results.

Litigation might be necessary to protect our intellectual property rights and any such litigation may be costly and may divert

our management’s attention from our core business.

An adverse determination in any lawsuit involving our intellectual property

is likely to jeopardize our business prospects and reputation.

Although we are not aware of any of such litigation, we have no

insurance coverage against litigation costs, and we would be forced to bear all litigation costs if we cannot recover them from

other parties.

All foregoing factors could harm our business, financial condition, and results of operations.

Any unauthorized

use of our intellectual property could harm our operating results.

may be exposed to infringement or misappropriation claims by third parties, which, if determined against us, could adversely affect

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we work with in cooperative research and development activities.

Our current or potential competitors may have obtained or may

obtain patents that will prevent, limit or interfere with our ability to make, use or sell our products.

The defense of intellectual

property claims, including patent infringement suits, and related legal and administrative proceedings can be both costly and

time consuming, and may significantly divert the efforts and resources of our technical personnel and management.

These factors

could effectively prevent us from pursuing some or all of our business operations and result in our customers or potential customers

deferring, canceling or limiting their purchase or use of our products, which may have a material adverse effect on our business,

financial condition and results of operations.

Our current or potential competitors may obtain patents that

will prevent, limit or interfere with our ability to make, use or sell our products.

The defense of intellectual property claims,

including patent infringement suits, and related legal and administrative proceedings can be both costly and time consuming, and

may significantly divert the efforts and resources of our technical personnel and management.

These factors could effectively

prevent us from pursuing some or all of our business operations and result in our customers or potential customers deferring,

canceling or limiting their purchase or use of our products, which may have a material adverse effect on our business, financial

condition and results of operations.

commercial success will depend in part on our success in obtaining and maintaining issued patents and other intellectual property

rights in the United States and elsewhere If we do not adequately protect our intellectual property, competitors may be able to

use our processes and erode or negate any competitive advantage we may have, which could harm our business.

rights in the United States and elsewhere.

If we do not adequately protect our intellectual property, competitors may be able

to use our processes and erode or negate any competitive advantage we may have, which could harm our business.

cannot provide any assurances that any of our patents have, or that any of our pending patent applications that mature into issued

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This could make it difficult for us to stop the infringement or the misappropriation of our intellectual property

For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third

In addition, many countries limit the enforceability of patents against third parties, including government agencies

or government contractors.

Many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties.

In addition, many countries limit the enforceability of patents against third parties, including government agencies or government

In these countries, patents may provide limited or no benefit.

Patent protection must ultimately be

sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.

Accordingly, we

may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from

other aspects of our business.

Patent protection must ultimately be sought on a country-by-country

basis, which is an expensive and time-consuming process with uncertain outcomes.

Accordingly, we may choose not to seek patent

protection in certain countries, and we will not have the benefit of patent protection in such countries.

to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts from other aspects

of our business.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

In addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability

to obtain adequate protection for our technology and the enforcement of intellectual property.

addition, changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to

obtain adequate protection for our technology and the enforcement of intellectual property.

parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated

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must maintain effective internal controls to provide reliable financial reports and detect fraud.

We are in the process of evaluating

changes to internal controls for our new public company status but have not yet implemented changes.

Failure to implement changes

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could harm our operating results and cause investors to lose confidence in our business, operations or reported financial information.

Any such inability to establish effective controls or loss of confidence would have an adverse effect on our company and could

adversely affect the trading price of our Common Stock.

Any such inability to establish effective controls or loss of confidence would have an adverse effect on our Company and

could adversely affect the trading price of our Common Stock.

Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control over financial

We continue to develop and refine our disclosure controls and other procedures that are designed to ensure that information

required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized and reported within

the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange

Act is accumulated and communicated to our principal executive and financial officers.

Our current controls and any new controls

that we develop may become inadequate and weaknesses in our internal control over financial reporting may be discovered in the

Any failure to develop or maintain effective controls could negatively impact the results of periodic management evaluations

and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control

over financial reporting that we may be required to include in our periodic reports we will file with the SEC under Section 404

of the Sarbanes-Oxley Act, harm our operating results, cause us to fail to meet our reporting obligations or result in a restatement

of our prior period financial statements.

In the event that we are not able to demonstrate compliance with the Sarbanes-Oxley

Act, that our internal control over financial reporting is perceived as inadequate or that we are unable to produce timely or

accurate financial statements, investors may lose confidence in our operating results and the price of our common stock could

In addition, if we are unable to continue to meet these requirements, our Common Stock may not be able to be eligible

for quotation on the OTC Markets or meet the eligibility requirements for the NASDAQ Stock Market.

are required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore required to make

a formal assessment of the effectiveness of our internal control over financial reporting for that purpose.

We are required to

comply with certain of these rules, which require management to certify financial and other information in our quarterly and annual

reports and provide an annual management report on the effectiveness of our internal control over financial reporting.

the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting,

we will be unable to assert that our internal control over financial reporting is effective.

independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control

over financial reporting until the first annual report required to be filed with the SEC following the date, we are no longer

an “emerging growth company”

as defined in the JOBS Act depending on whether we choose to rely on certain exemptions

set forth in the JOBS Act.

If we are unable to assert that our internal control over financial reporting is effective, or if our

independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal control over

financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could

harm our business.

price of our Common Stock may be volatile and may be influenced by numerous factors, some of which are beyond our control.

that could cause volatility in the market price of our Common Stock include, but are not limited to:

that could cause volatility in the market price of our Common Stock include:

or anticipated fluctuations in our financial condition and operating results;

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capital in the near future to meet our working capital needs, and there can be no assurance that we will not be required to issue

additional shares, warrants or other convertible securities in the future in conjunction with these capital raising efforts, including

additional shares, warrants or other convertible securities in the future in conjunction with the capital raising efforts, including

at a price (or exercise prices) below the price you paid for your stock.

is currently a limited market for our Common Stock.

You may therefore be unable to re-sell shares of our Common Stock at times

and prices that you believe are appropriate.

is currently a limited market for our Common Stock and an investor may be unable to resell shares of our Common Stock at times

and prices believed appropriate.

Common Stock has been quoted on the OTC pink sheets under the symbol “BSFC”

as of February 18, 2020.

since February 18, 2020.

Currently, there

is a limited trading market for our Common Stock and a more active market for our Common Stock may never develop.

our Common Stock is highly illiquid, and you may experience difficulty buying and selling shares at times and prices that you

Trading in stocks quoted on the OTCQB Markets is often thin and characterized by wide fluctuations in trading prices.

Moreover, the OTC pink sheets is not a stock exchange, and trading of securities is often more sporadic than the trading of securities

listed on a quotation system like Nasdaq or a national stock exchange.

our Common Stock is highly illiquid, and an investor may experience difficulty buying and selling shares at times and prices that

they may desire.

Trading in stocks quoted on the OTC pink sheet market is often thin and characterized by wide fluctuations in

trading prices.

Moreover, the OTC pink sheets is not a stock exchange, and trading of securities is often more sporadic than the

trading of securities listed on a quotation system like NASDAQ or a national stock exchange.

Common Stock may be deemed a “penny stock”

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developments affecting us or our competitors;

continuing effects of the COVID-19 pandemic.

our operating results for a particular period fall below the expectations of investors or securities analysts, the price of our

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will not be listed on a national securities exchange, securities analysts of brokerage firms may not provide coverage of our Company.

In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we

became a public reporting company by means of an underwritten initial public offering, because they may be less familiar with

our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage in

our development.

In addition, investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might

if we became a public reporting company by means of an underwritten initial public offering, because they may be less familiar

with our company as a result of more limited coverage by analysts and the media, and because we became public at an early stage

in our development.

The failure to receive research coverage or support in the market for our shares will have an adverse effect

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management by making it more difficult to replace or remove our board of directors.

These provisions include:

cumulative voting in the election of directors;

exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors

or the resignation, death or removal of a director;

requirement that special meetings of stockholders be called only by the board of directors;

notice provision requirement for stockholders to nominate directors;

requirement that our directors may be removed only by a supermajority (two-thirds) vote of the stockholders;

authority of our board of directors to issue preferred stock with such terms as our board of directors may determine.

addition, Delaware law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested

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be inapplicable or unenforceable in such action.

do not anticipate paying any cash dividends on our Common Stock in the foreseeable future;

therefore, capital appreciation, if

any, of our Common Stock will be your sole source of gain for the foreseeable future.

do not anticipate paying any cash dividends on our Common Stock in the foreseeable future therefore capital appreciation, if any,

of our Common Stock will be your sole source of gain for the foreseeable future.

have never declared or paid cash dividends on our Common Stock.

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growth of our business.

In addition, our current loan and security agreement with ACF contains, and our future loan arrangements,

In addition, our current loan and security agreement with Lighthouse contains, and our future loan arrangements,

if any, may contain, terms prohibiting or limiting the amount of dividends that may be declared or paid on our Common Stock.

a result, capital appreciation, if any, of our Common Stock will be your sole source of gain for the foreseeable future.

Related to COVID-19

Related to the COVID-19 pandemic

may experience disruptions of or restrictions on our operations as a result of the COVID-19 pandemic.

current outbreak of COVID-19 could have a material and adverse effect on our business operations, including disruptions or restrictions

on our ability to travel or to distribute our seafood products, as well as temporary closures of our facilities.

Any such disruption

or delay would likely impact our sales and operating results.

In addition, COVID-19 has resulted in a widespread health crisis

that could adversely affect the economies and financial markets of many other countries, resulting in an economic downturn that

could affect demand for our products and significantly impact our operating results.

the result of current restrictions put in place to address COVID-19, we have had limited access to our corporate offices

and our corporate staff has been required to work remotely, disrupting interactions among our staff, with our customers

and suppliers, and with our accountants, consultants and advisors.

The extent to which our results may continue to be affected

by COVID-19 will largely depend on future developments which cannot be accurately predicted, including the duration and scope

of the pandemic, governmental and business responses to the pandemic and the impact on the global economy, our customers’

demand for our products, and our ability to provide our products and access our offices and facilities.

While these factors

are uncertain, the COVID-19 pandemic or the perception of its effects could continue to have a material adverse effect on our

business, financial condition, results of operations, or cash flows.

current COVID-19 pandemic has adversely affected our business operations, including disruptions or restrictions on our ability

to travel or to distribute our seafood products, as well as temporary closures of our facilities.

Any such disruption or delay

may impact our sales and operating results.

In addition, COVID-19 has resulted in a widespread health crisis that could adversely

affect the economies and financial markets of many other countries, resulting in an economic downturn that could continue to affect

demand for our products and significantly impact our operating results.

the result of current restrictions put in place to address COVID-19, we have had limited access to our corporate offices and our

corporate staff has been required to work remotely, disrupting interactions among our staff, with our customers and suppliers,

and with our accountants, consultants and advisors.

The extent to which our results may continue to be affected by COVID-19 will

largely depend on future developments which cannot be accurately predicted, including the duration and scope of the pandemic,

governmental and business responses to the pandemic and the impact on the global economy, our customers’

demand for our

products, and our ability to provide our products and access our offices and facilities.

While these factors are uncertain, the

COVID-19 pandemic or the perception of its effects could continue to have a material adverse effect on our business, financial

condition, results of operations, or cash flows.

may not be entitled to forgiveness of our recently received PPP Loan, and our application for the PPP Loans could in the future

be determined to have been impermissible or could result in damage to our reputation.

March 2, 2021, we received proceeds of $371,944 from a loan under the Paycheck Protection Program of the CARES Act, a portion

or all of which may be forgiven, which we used to retain current employees, maintain payroll and make lease and utility payments.

The PPP Loan matures on March 1, 2026 and bears annual interest at a rate of 1.0%.

Commencing on the date that is the latter of

(i) the date that is the 10th month after the end of the Company’s PPP Loan covered period (as described below) and (ii)

assuming the Company has applied for PPP Loan forgiveness within the period described in clause (i), the date on which SBA remits

the loan forgiveness amount on the Company’s PPP Loan to the PPP lender (or notifies such lender that no loan forgiveness

is allowed), we are required to pay the lender equal monthly payments of principal and interest as required to fully amortize

by March 1, 2026, any principal amount outstanding on the PPP Loan as of June 2, 2022.

A portion or all of the PPP Loan may be

forgiven by the SBA upon our application and upon documentation of expenditures in accordance with the SBA requirements.

the CARES Act, loan forgiveness is available for the sum of documented payroll costs, covered rent payments, covered mortgage

interest and covered utilities during the twenty-four-week period or, if elected by the Company, the eight-week period beginning

on the date the loan is advanced.

Not more than 40% of the forgiven amount may be for non-payroll costs.

The amount of the PPP

Loan eligible to be forgiven may be limited due to declines in headcount, whether voluntary or involuntary, or if salaries and

wages for employees with salaries of $100,000 or less annually are reduced by more than 25% as compared to the period of January

1, 2020 through March 31, 2020.

We will be required to repay any portion of the outstanding principal that is not forgiven, along

with accrued interest, in accordance with the amortization schedule described above.

There can be no assurances that we will be

eligible for loan forgiveness, that we will ultimately apply for forgiveness, or that any amount of the PPP Loan will ultimately

be forgiven by the SBA.

order to apply for the PPP Loan, we were required to certify, among other things, that the current economic uncertainty made the

PPP Loan request necessary to support our ongoing operations.

We made this certification in good faith after analyzing, among

other things, our financial situation and access to alternative forms of capital and believe that we satisfied all eligibility

criteria for the PPP Loan, and that our receipt of the PPP Loan is consistent with the broad objectives of the Paycheck Protection

Program of the CARES Act.

The certification described above does not contain any objective criteria and is subject to interpretation.

On April 23, 2020, the SBA issued guidance stating that it is unlikely that a public company with substantial market value and

access to capital markets will be able to make the required certification in good faith.

The lack of clarity regarding loan eligibility

under the Paycheck Protection Program has resulted in significant media coverage and controversy with respect to public companies

applying for and receiving loans.

If, despite our good-faith belief that given our Company’s circumstances we satisfied

all eligible requirements for the PPP Loan, we are later determined to have violated any of the laws or governmental regulations

that apply to us in connection with the PPP Loan, such as the False Claims Act, or it is otherwise determined that we were ineligible

to receive the PPP Loan, we may be subject to penalties, including significant civil, criminal and administrative penalties and

could be required to repay the PPP Loan in its entirety.

In addition, receipt of a PPP Loan may result in adverse publicity and

damage to reputation, and a review or audit by the SBA or other government entity or claims under the False Claims Act could consume

significant financial and management resources.

Any of these events could have a material adverse effect on our business, results

of operations and financial condition.

UNRESOLVED STAFF COMMENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors