What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2021-04-15 compared with 2020-05-29 · 750 added, 657 removed, 487 unchanged (74% of the section changed)

5 unchanged sentences

have audited the accompanying consolidated balance sheets of Blue Star Foods Corp and its subsidiaries (collectively, the “Company”)

as of December 31, 2019 and 2018, and the related consolidated statements of operations, stockholders’

deficit, and cash

flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December

31, 2019 and 2018, and the results of their operations and their cash flows for the years then ended, in conformity with accounting

principles generally accepted in the United States of America.

as of December 31, 2020 and 2019, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’

deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2020 and 2019, and the results of their operations and their cash flows for the years then ended, in conformity with

accounting principles generally accepted in the United States of America.

Concern Matter

2 unchanged sentences

that raises substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters

Management’s plans in regard to these matters

are also described in Note 3.

4 unchanged sentences

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

5 unchanged sentences

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.

we express no such opinion.

As part of our audits, we are required to obtain an understanding of internal control over financial reporting but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

7 unchanged sentences

www.malonebailey.com

have served as the Company's auditor since 2014.

have served as the Company’s auditor since 2014.

Star Foods Corp.

1 unchanged sentence

CURRENT ASSETS

Cash (including VIE $8,725 and $5,561, respectively)

and cash equivalents (including VIE $8,725 for 2019)

Restricted cash

Accounts receivable, net (including VIE $20,321 and $49,624, respectively)

Inventory, net (including VIE $95,441 and $117,816, respectively)

Advances to related party

Other current assets (including VIE $3,679 and $4,351 respectively)

Total current assets

Accounts receivable,

net (including VIE $20,321 for 2019)

Inventory, net

(including VIE $95,441 for 2019)

Advances to related

current assets (including VIE $3,679 for 2019)

Total Current

RELATED PARTY LONG-TERM RECEIVABLE

FIXED ASSETS, net

2 unchanged sentences

Customer relationships

Non-Compete Agreements

Total Intangible Assets

LIABILITIES AND STOCKHOLDER’S DEFICIT

Total Intangible

LIABILITIES AND STOCKHOLDERS’

CURRENT LIABILITIES

Accounts payable and accruals (including VIE $30,649 and $95,720, respectively)

Working capital line of credit

Current Maturities of long-term debt

Current Maturities of Lease Liabilities

Current Maturities of Related Party Long-term Note

Related Party Notes Payable

Stockholder notes payable - Subordinated

Total current liabilities

Accounts payable

and accruals (including VIE $30,649 for 2019)

Working capital

line of credit

Current maturities

of lease liabilities

Current maturities

of related party long-term notes

Related party

notes payable

Related party

notes payable - Subordinated

current liabilities

Total Current

LONG -TERM LIABILITY

Long-Term Lease Liability

Related Party Long-Term Note

Long-term lease

party long-term notes

TOTAL LIABILITIES

STOCKHOLDER’S DEFICIT

Series A 8% cumulative convertible preferred stock, $0.0001 par value;

10,000 shares authorized, 1,413 shares issued and outstanding as of December 31, 2019 and December 31, 2018

Common stock, $0.0001 par value, 100,000,000 shares authorized;

17,589,705 shares issued and outstanding (including 14,130 shares declared as stock dividend on September 30, 2019 and 14,130 shares declared as stock dividend on December 31, 2019) as of December 31, 2019 and 16,023,164 shares issued and outstanding (including 8,164 shares declared as stock dividend on December 31, 2018) as of December 31, 2018

Additional paid-in capital

Accumulated deficit

Total Blue Star Foods Corp.

stockholder’s deficit

Non-controlling interest

Accumulated other comprehensive income (VIE)

Total VIE’s deficit

TOTAL STOCKHOLDER’S DEFICIT

TOTAL LIABILITIES AND STOCKHOLDER’S DEFICIT

STOCKHOLDERS’

Series A 8% cumulative convertible

preferred stock, $0.0001 par value;

10,000 shares authorized, 1,413 shares issued and outstanding as of December 31, 2020

and December 31, 2019

Common stock, $0.0001 par value,

100,000,000 shares authorized;

19,580,721 shares issued and outstanding as of December 31, 2020, and 17,589,705 shares issued

and outstanding as of December 31, 2019

Additional paid-in

(13,510,517 )

Total Blue Star

Stockholders’

Non-controlling

other comprehensive income (VIE)

Total VIE’s

TOTAL STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’

accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

MONTHS ENDED DECEMBER 31,

COST OF REVENUE (including approximately $5,599,700 and $11,086,500 respectively, purchased from related party)

SALARIES & WAGES

SETTLEMENT & WARRANT EXPENSE

OTHER OPERATING EXPENSES

ENDED DECEMBER 31,

COST OF REVENUE

SALARIES AND WAGES

DEPRECIATION AND AMORTIZATION

OTHER OPERATING

LOSS FROM OPERATIONS

FORBEARANCE FEE EXPENSE (NON-CASH)

INTEREST EXPENSE

NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST

NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST

NET LOSS ATTRIBUTABLE

TO BLUE STAR FOODS CORP.

$ (4,445,011 )

1 unchanged sentence

DIVIDEND ON PREFERRED STOCK

NET LOSS ATTRIBUABLE TO BLUE STAR FOODS CORP COMMON SHAREHOLDERS

NET LOSS ATTRIBUTABLE

TO BLUE STAR FOODS CORP COMMON STOCKHOLDERS

$ (4,558,051 )

1 unchanged sentence

COMPREHENSIVE LOSS:

TRANSLATION ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE

INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

$ (4,445,011 )

$ (4,986,286 )

INCOME TAX EXPENSE (PRO-FORMA FOR 2018)

NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

$ (4,443,889 )

$ (4,990,699 )

COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

COMPREHENSIVE

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

$ (4,443,889 )

$ (4,990,699 )

Loss per basic and diluted common share:

Basic net loss per common share

Basic weighted average common shares outstanding

Fully diluted net loss per common share

Fully diluted weighted average common shares outstanding

Loss per basic and diluted common

loss per common share

Basic weighted average common

shares outstanding

Fully diluted

net loss per common share

Fully diluted weighted average

common shares outstanding

accompanying notes are an integral part of these consolidated financial statements

Star Foods Corp.

STATEMENTS OF CHANGES IN STOCKHOLDER’S EQUITY (DEFICIT)

MONTHS ENDED DECEMBER 31, 2019

Series A Pref Stock

$.0001 par value

Common Stock $.0001

Additional Paid-in

Retained Earnings (Accumulated

Total Blue Star Foods Corp.

Stockholder’s

Non-Controlling

Total Stockholder’s Equity

STATEMENTS OF CHANGES IN STOCKHOLDERS’

ENDED DECEMBER 31, 2020

A Pref Stock $.0001 par value

Stock $.0001 par value

Blue Star Foods Corp.

Stockholders’

December 31, 2018

606 Adjustment to January 1, 2018

Adjusted January 1, 2018

Reverse Merger recapitalization

Common stock issue for service

Preferred Stock Issued for Cash

Preferred Stock Issued in Connection with SOR investors

Option Expense

Warrant Expense

Series A 8% Dividends issued in common stock

Common stock issued for cash

Cancellation of issued shares for

Common stock issued for service

Common stock incentive issued to

Common stock issued for Coastal Pride

Stock based compensation

Series A preferred 8% dividend issued

in common stock

Comprehensive loss

December 31, 2019

Stock based compensation

Common stock issued for cash

Cancellation of Issued Shares for Cash

Common stock issued for service

Common Stock Incentive Issued to Employees

Common Stock Issued For Coastal Pride Acquisition

Stock Based Compensation

Series 8A 8% Dividends issued in common stock

Common stock issued to related party

lender for forbearance

Common stock issued to settle related

Series A preferred 8% dividend issued

in common stock

Deconsolidation of Strike the Gold

Comprehensive loss

December 31, 2020

(13,510,517 )

accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

STATEMENTS OF CASH FLOWS

THE TWELVE MONTHS ENDED DECEMBER 31,

ENDED DECEMBER 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net Income (Loss)

$ (4,437,434 )

$ (5,021,703 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock based compensation & Settlement Expense

Common stock issued for Service

Depreciation of fixed assets

Amortization of Right of use asset

Amortization of intangible assets

Amortization of loan costs

Settlement of Accounts Payable

Changes in operating assets and liabilities:

Advances to affiliated supplier

Other current assets

Change in Right of use Liability

Accounts payable and accruals

Net cash provided by (used) in operating activities

Adjustments to

reconcile net loss to net cash provided in operating activities:

Stock based compensation

issued for service

issued for forbearance fee

of fixed assets

of intangible assets

of loan costs

Lease expense

Bad debt expense

Allowance for

inventory obsolescence

Gain on PPP loan

Gain on termination

Changes in operating

assets and liabilities:

Advances to affiliated

Other current

Accounts payable

current liabilities

Net Cash Provided

by Operating Activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Net Cash Paid for Acquisition

Purchases of fixed assets

Net cash used in investing activities

Deconsolidation

of variable interest entity

Net cash paid

for acquisition

Proceeds from

sale of fixed assets

of fixed assets

Net Cash Provided

by (Used in) Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from Common Stock Offering

Proceeds from working capital lines of credit

Repayments of working capital lines of credit

Proceeds from

common stock offering

Proceeds from

working capital line of credit

Proceeds from

related party notes payable

Proceeds from

Repayments of

working capital line of credit

(11,887,721 )

(23,993,616 )

Proceeds from Related Party Notes Payable

Repayments of Releated Party Notes Payable

Principal payments of long-term debt

Payments of Loan costs

Net cash provided by (used) in financing activities

Effect of exchange rate changes on cash

NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD

CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY

Series A 8% Dividend issued in Common Stock

Reverse Merger Recapitalization

Valuation of Right of Use asset/liability

Shares issued for acquisition

Related Party Notes recognized from Business Acquisition

Supplemental Disclosure of Cash Flow Information

Cash paid for interest

Repayments of

related party notes payable

Principal payments

of long-term debt

of loan costs

Net Cash Used

in Financing Activities

Effect of Exchange Rate Changes on

(DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH

CASH, CASH EQUIVALENTS AND RESTRICTED

CASH - BEGINNING OF PERIOD

EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD

SUPPLEMENTAL DISCLOSURE OF NON-CASH

Series A preferred

8% dividend issued in common stock

Operating lease

assets recognized in exchange for operating lease liabilities

Shares issued

for partial payment of accounts payable

Shares issued

for partial payment of notes payable - related party

Shares issued

for acquisition

Related party

notes recognized from business acquisition

Supplemental Disclosure of Cash Flow

paid for interest

accompanying notes are an integral part of these consolidated financial statements

Star Foods Corp .

TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2019 and 2018

TO CONSOLIDATED FINANCIAL STATEMENTS

31, 2020 and 2019

Company Overview

in Miami, Florida, Blue Star Foods Corp.

(the “Company”) is a sustainable seafood company.

The company’s main

operating business, John Keeler & Co., Inc.

has been in business for approximately twenty-five years.

The Company was formed

under the laws of the State of Delaware.

The current source of revenue is importing blue and red swimming crab meat primarily

from Indonesia, Philippines and China and distributing it in the United States, Canada and Europe under several brand names such

as Blue Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh.

November 8, 2018 the sole shareholder of John Keeler & Co., Inc.

executed an Agreement and Plan of Merger and Reorganization

with Blue Star Foods Corp.

(“we”, “our”, the “Company”) is a sustainable

seafood company.

The Company’s main operating business, John Keeler & Co., Inc.

has been in business for approximately

twenty-five years.

The Company was formed under the laws of the State of Delaware.

The current source of revenue is importing

blue and red swimming crab meat primarily from Indonesia, the Philippines and China and distributing it in the United States,

Canada and Europe under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and

Coastal Pride Fresh.

November 8, 2018, the sole shareholder of John Keeler & Co., Inc., John Keeler, executed an Agreement and Plan of Merger and

Reorganization with Blue Star Foods Corp.

(formerly A.G.

Acquisition Group II, Inc.) and Blue Star Acquisition Corp.

Keeler exchanged

his 500 shares with a par value of $1.00 in John Keeler & Co., Inc.

for the 15,000,000 shares with a par value of $.0001 of

the then outstanding 16,015,000 outstanding shares.

As part of the merger, the net liabilities existing in the company as of the

date of the merger totaling approximately $2,400 were converted to equity as part of this transaction.

The prior owners of Blue

Star Foods Corp.

to which he exchanged his 500 shares, par value $1.00 per share in John Keeler & Co., Inc.

for 15,000,000 shares, par value

$0.0001 per share of the then outstanding 16,015,000 outstanding shares.

As part of the merger, the net liabilities existing in

the company as of the date of the merger totaling approximately $2,400 were converted to equity.

The prior owners of Blue Star

received 750,000 shares of common stock as part of this transaction, and various service providers received 265,000

shares as compensation for their work on the transaction resulting in and expense and additional paid in capital of $530,001.

Additionally, there were 725 Series A Preferred shares and 181,250 warrants issued to private placement investors for total capital

shares as compensation for their work on the transaction resulting in an expense and additional paid in capital of $530,001.

Additionally,

there were 725 Series A Preferred shares and 181,250 warrants issued to private placement offering investors for a total capital

contribution of $725,000, 688 Series A Preferred shares and 172,000 warrants issued for settlement with prior investors which

had a fair value of $688,000 and $81,353 respectively.

Lastly, upon the close of the merger there were 3,120,000 options to purchase

common stock issued to Christopher Constable.

Additionally, Carlos Faria held options to purchase 104 shares of John Keeler &

prior to the merger.

These options were immediately converted at closing to 3,120,000 options to purchase common stock

in Blue Star Foods Corp.

Upon the close of the merger, there were 3,120,000 options to purchase

common stock issued to Christopher Constable, the Company’s then Chief Financial Officer.

Additionally, Carlos Faria, the

Company’s then Chief Executive Officer, held options to purchase 104 shares of John Keeler & Co., Inc.

These options were immediately converted at closing to an option to purchase 3,120,000 shares of common stock in the Company.

Merger was accounted for as a “reverse merger”

and recapitalization since, immediately following the completion of

the transaction, the holders of John Keeler & Co., Inc.’s stock will have effective control of Blue Star Foods Corp.

In addition, John Keeler & Co., Inc.

will have control of the combined entity through control of the Board by designating

all four of the board seats.

Additionally, all of John Keeler & Co., Inc.’s officers and senior executive positions

continued as management of the combined entity after consummation of the Merger.

For accounting purposes, John Keeler & Co.,

was deemed to be the accounting acquirer in the transaction and, consequently, the transaction has been treated as a recapitalization

of Blue Star Foods Corp.

Accordingly, John Keeler & Co., Inc.’s assets, liabilities and results of operations are the

historical financial statements of the registrant, and the John Keeler & Co., Inc.’s assets, liabilities and results

of operations have been consolidated with Blue Star Foods Corp effective as of the date of the closing of the Merger.

in basis or intangible assets or goodwill was recorded in this transaction.

the transaction, the holders of John Keeler & Co., Inc.’s stock had effective control of Blue Star Foods Corp.

John Keeler & Co., Inc.

had control of the combined entity through control of the Board by designating all four of the board

Additionally, all of John Keeler & Co., Inc.’s officers and senior executive positions continued as management

of the combined entity after consummation of the Merger.

For accounting purposes, John Keeler & Co., Inc.

was deemed to be

the accounting acquirer in the transaction and, consequently, the transaction has been treated as a recapitalization of Blue Star

Accordingly, John Keeler & Co., Inc.’s assets, liabilities and results of operations are the historical

financial statements of the registrant, and the John Keeler & Co., Inc.’s assets, liabilities and results of operations

have been consolidated with Blue Star Foods Corp effective as of the date of the closing of the Merger.

No step-up in basis or

intangible assets or goodwill was recorded in this transaction.

November 26, 2019, John Keeler & Co., Inc., a Florida corporation (the “Purchaser”), and wholly-owned direct subsidiary

of the Company, entered into an Agreement and Plan of Merger and Reorganization (the “Coastal Merger Agreement”) with

Coastal Pride Company, Inc., a South Carolina corporation (“Coastal Pride”), Coastal Pride Seafood, LLC, a Florida

limited liability company and newly-formed, wholly-owned subsidiary of the Purchaser (the “Acquisition Subsidiary”

and, upon the effective date of the Merger, the “Surviving Company), and The Walter F.

Irrevocable Trust dated

1/8/03 (the “Trust”), Walter F.

Lubkin III (“Lubkin III”), Tracy Lubkin Greco (“Greco”) and

Lubkin (“Lubkin”), constituting all of the shareholders of Coastal Pride immediately prior to the Coastal

Merger (collectively, the “Sellers”).

Pursuant to the terms of the Coastal Merger Agreement, Coastal Pride merged

with and into the Acquisition Subsidiary, with the Acquisition Subsidiary being the surviving company (the “Merger”).

Coastal Pride Company, Inc., a South Carolina corporation, Coastal Pride Seafood, LLC, a Florida limited liability company and

newly-formed, wholly-owned subsidiary of the Purchaser (the “Acquisition Subsidiary”

and, upon the effective date

of the Merger, the “Surviving Company), and The Walter F.

Irrevocable Trust dated 1/8/03 (the “Trust”),

Lubkin III (“Lubkin III”), Tracy Lubkin Greco (“Greco”) and John C.

Lubkin (“Lubkin”),

constituting all of the shareholders of Coastal Pride Company, Inc.

immediately prior to the Coastal Merger (collectively,

the “Sellers”).

Pursuant to the terms of the Coastal Merger Agreement, Coastal Pride Company, Inc.

and into the Acquisition Subsidiary, with the Acquisition Subsidiary being the surviving company (the “Coastal Pride Merger”).

Pride is a seafood company, based in Beaufort, South Carolina, that imports pasteurized and fresh crabmeat sourced primarily from

7 unchanged sentences

consolidated financial statements include the accounts of the Company, John Keeler & Co, Inc.

a wholly owned subsidiary, Coastal

Pride Seafood, LLC, a wholly owned subsidiary of John Keeler & Co., Inc.

and its variable interest entity for which the John

Keeler & Co., Inc.

is the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation.

a wholly owned subsidiary, and

Coastal Pride Seafood, LLC (“Coastal Pride”), a wholly owned subsidiary of John Keeler & Co., Inc.

intercompany balances and transactions have been eliminated in consolidation.

and Other Intangible Assets

and other intangible assets include the cost of the acquired business in excess of the fair value of the tangible net assets recorded

in connection with an acquisition.

Other intangible assets include customer relationships, non-compete agreements, and trademarks.

The Company reviews its finite-lived intangibles and goodwill for impairment annually or whenever events or circumstances indicate

that the carrying amount of the asset exceeds its fair value and may not be recoverable.

are recorded as impairment charges in the Company’s Consolidated Statements of Operations and Comprehensive Loss, and a

reduction of the asset’s carrying value in the Company’s Consolidated Balance Sheets when they occur.

In accordance

with its policies, the Company performed an assessment of its finite-lived intangibles and goodwill and determined there was no

impairment for the years ended December 31, 2020 and 2019.

Interest Entity

21 unchanged sentences

most significantly impact Strike and the obligation to absorb losses or the right to receive benefits from Strike.

the Company consolidated Strike in its financial statements.

Strike’s

activities are reflected in the Company’s financial statements starting on April 1, 2014, the effective date of the controlling

the Company consolidated Strike in its financial statements starting as of April 1, 2014, the effective date of the controlling

interest transfer.

Strike’s equity is classified as non-controlling interest in the Company’s financial statements

since the Company is not a shareholder of Strike.

Strike was not a VIE of the Company and the Company was not the primary beneficiary

of Strike prior to the controlling interest transfer.

the third quarter of 2020, the Company determined that Strike was no longer a VIE because there was a verbal agreement with Strike

that terminated the original agreement to hold the inventory on consignment and Strike has not engaged in transactions with the

Company or its subsidiaries in 2020.

Company also evaluated its interest in three related party entities that are under common control with the Company, Bacolod Blue

6 unchanged sentences

The Company purchased inventory, via Bacolod, from Bicol.

The Company leases its office and

warehouse facility from JK Real Estate, a landlord that is a related party through common family beneficial ownership (see Note

The Company leased its office and

warehouse facility from JK Real Estate, a landlord that is a related party through common family beneficial ownership until December

Company determined that Bacolod and Bicol are not VIE’s as they do not meet the criteria to be considered a VIE per ASC

2 unchanged sentences

and Bacolod and Bicol is strictly a supplier/customer relationship (see Advances to Suppliers and Related Party accounting

Moreover, Bacolod and Bicol have other customers besides the Company.

Even if the Company is no longer Bacolod or Bicol’s

customer, they would be able to sustain their operations from selling their inventory to their other customers.

As the Company

concluded that Bacolod and Bicol are not VIE’s and the Company is not deemed their primary beneficiary, Bacolod or Bicol

is not consolidated with the Company’s financial statements.

Company determined that JK Real Estate is a VIE due the fact that the Company guarantees the mortgage on the facility rented from

JK Real Estate.

Therefore, JK Real Estate’s equity at risk is not deemed sufficient to permit JK Real Estate to finance

its activities without subordinated financial support.

Moreover, the activities of JK Real Estate are substantially conducted

on behalf of the Company’s majority stockholder.

The Company concluded that it not the primary beneficiary of JK Real Estate

since the Company does not have the power to direct the activities that most significantly impact JK Real Estate.

Therefore, JK

Real Estate is not consolidated with the Company’s financial statements.

Moreover, Bacolod and Bicol have other customers besides the Company which will allow them to sustain their operations

from selling their inventory to their other customers.

As the Company concluded that Bacolod and Bicol are not VIE’s and

the Company is not deemed their primary beneficiary, Bacolod or Bicol is not consolidated with the Company’s financial statements.

Company no longer leases its office and warehouse facility from JK Real Estate and no longer guarantees the mortgage on the facility

and therefore is no longer considered a VIE.

On December 31, 2020, this facility was sold to an unrelated third-party purchaser

and the lease was terminated.

Restricted Cash and Cash Equivalents

January 1, 2018 the Company adopted the provisions of ASU 2016-18, “Statement of Cash Flows (Topic 230) Restricted Cash”

(“ASU 2016-18”) , which requires that the statement of cash flows explain the change during the period in the

total of cash and cash equivalents and amounts generally described as restricted cash.

Company maintains cash balances with financial institutions in excess of Federal Deposit Insurance Company (“FDIC”)

9 unchanged sentences

of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same

such amounts in the consolidated statement of cash flows:

such amounts in the consolidated statements of cash flows:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash shown in the cash flow statement

Total cash, cash

equivalents, and restricted cash shown in the cash flow statement

receivable consist of unsecured obligations due from customers under normal trade terms, usually net 30 days.

18 unchanged sentences

the specific identification method.

Inventory is valued at the lower of cost or market, using the first-in, first-out method.

Inventory is valued at the lower of cost or net realizable value, cost being determined

using the first-in, first-out method.

is purchased cost and freight shipping point and becomes the Company’s asset and liability upon leaving the suppliers’

12 unchanged sentences

normal course of business and these credits are also reflected against future shipments.

of December 31, 2019 and 2018, the balance due from the related party for future shipments was approximately $1,285,900 and $1,139,600,

respectively.

The 2019 balances represent approximately five to six months of purchases from the supplier.

of December 31, 2020, and 2019, the balance due from the related party for future shipments was approximately $1,300,000

and $1,286,000, respectively.

No new purchases have been made from Bacolod since November 2020.

Cost of revenue related to inventories

purchased from Bacolod represented approximately $1,280,000 and $9,531,000 of total cost of revenue for the twelve months ended

December 31, 2020 and 2019, respectively.

assets are stated at cost less accumulated depreciation and are being depreciated using the straight-line method over the estimated

20 unchanged sentences

The assets and liabilities held by the Company’s

VIE have a functional currency other than the U.S.

They are translated into U.S.

Dollars at exchange rates in effect at

the end of each reporting period.

The VIE’s revenue and expenses are translated into U.S.

Dollars at the average rates that

prevailed during the period.

The rates used in the financial statements as presented for December 31, 2019 and 2018 were 1.337

and 1.336 US dollar to UK pound sterling, respectively.

The resulting net translation gains and losses are reported as foreign

currency translation adjustments in stockholders’

previous VIE had a functional currency other than the U.S.

In the third quarter of 2020, the VIE was assessed as no longer

The VIE results were translated into U.S.

Dollars at exchange rates in effect at the end of each reporting period.

The VIE’s revenue and expenses were translated into U.S.

Dollars at the average rates that prevailed during the period.

The rates used in the financial statements as presented for December 31, 2020 and 2019 were 1.260 and 1.337 US dollar to UK pound

sterling, respectively.

The resulting net translation gains and losses are reported as foreign currency translation adjustments

in stockholders’

equity as a component of comprehensive (loss) income.

The Company recorded

foreign currency translation adjustment of approximately $50,100 and ($38,600) for the years ended December 31, 2019 and December

31, 2018, respectively.

The Company recorded foreign currency translation

adjustment of approximately $23,700 and $50,100 for the years ended December 31, 2020 and December 31, 2019, respectively.

with the January 1, 2018 adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),”

2 unchanged sentences

or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services.

To determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company

The Company’s source of revenue is from importing blue and red swimming crab meat primarily from Indonesia, the Philippines

and China and distributing it in the United States and Canada under several brand names such as Blue Star, Oceanica, Pacifika,

Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh.

We sell primarily to food service distributors.

our products to wholesalers, retail establishments and seafood distributors.

determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company

performs the following five steps:

(1) identify the contract(s) with a customer, (2) identify the performance obligations in the

contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract

and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

(1) identify the contract(s) with a customer by receipt of purchase orders and confirmations

sent by the Company which includes a required line of credit approval process, (2) identify the performance obligations in the

contract which includes shipment of goods to the customer FOB shipping point or destination, (3) determine the transaction price

which initiates with the purchase order received from the customer and confirmation sent by the Company and will include discounts

and allowances by customer if any, (4) allocate the transaction price to the performance obligations in the contract which is

the shipment of the goods to the customer and transaction price determined in step 3 above and (5) recognize revenue when (or

as) the entity satisfies a performance obligation which is when the Company transfers control of the goods to the customers by

shipment or delivery of the products.

Company elected an accounting policy to treat shipping and handling activities as fulfillment activities.

2 unchanged sentences

recognized, unless the payment is for distinct goods or services received from the customer.

January 1, 2019, we adopted Accounting Standards Codification 842 and all the related amendments using the modified retrospective

We recognized the cumulative effect of initially applying the new lease standard as an adjustment to the opening balance

of retained earnings.

The comparative information has not been restated and continues to be reported under the lease accounting

standard in effect for those periods.

new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations.

the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and

initial direct costs for any leases that existed prior to adoption of the standard.

We did not reassess whether any contracts

entered into prior to adoption are leases or contain leases.

categorize leases with contractual terms longer than twelve months as either operating or finance.

Finance leases are generally

those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life.

Assets acquired

under finance leases are recorded in property and equipment, net.

All other leases are categorized as operating leases.

not have any finance leases as of December 31, 2020.

Our leases generally have terms that range from three years for equipment

and six to seven years for property.

We elected the accounting policy to include both the lease and non-lease components of our

agreements as a single component and account for them as a lease.

liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings

available to us.

Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord

incentives, plus any direct costs from executing the leases.

Lease assets are tested for impairment in the same manner as long-lived

assets used in operations.

Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful

life or the lease term.

we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased

asset, and it is reasonably certain that we will exercise the option, we consider these options in determining the classification

and measurement of the lease.

Costs associated with operating lease assets are recognized on a straight-line basis within operating

expenses over the term of the lease.

table below presents the lease-related assets and liabilities recorded on the balance sheets.

lease liabilities

cash flow information related to leases were as follows:

December 31, 2020

used in operating activities:

assets recognized in exchange for lease obligations:

table below presents the remaining lease term and discount rates for operating leases.

Weighted-average

remaining lease term

Weighted-average

discount rate

of lease liabilities as of December 31, 2020, were as follows:

lease payments

amount of lease payments representing interest

value of future minimum lease payments

current obligations under leases

Company expenses the costs of advertising as incurred.

7 unchanged sentences

Concentration

Company had three customers which accounted for approximately 46% and 65%, of revenue during the years ended December 31, 2019

and 2018, respectively.

Outstanding receivables from these customers accounted for approximately 24% and 65% of the total accounts

receivable as of December 31, 2019 and 2018, respectively.

The loss of any major customer could have a material adverse impact

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

Company had three customers which accounted for approximately 26% of revenue in the year ended December 31, 2020.

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

Outstanding receivables

from these customers accounted for approximately 19% of the total accounts receivable as of December 31, 2020 and 2019.

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

financial position.

Concentration

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

year ended December 31, 2019, and a one-time purchase from a United States based supplier that accounted for approximately

21% of purchases.

The two suppliers are located in two countries, Indonesia, and the Philippines, which accounted

for approximately 65% of the Company’s total purchases during the year ended December 31, 2019.

Company had three suppliers which accounted for approximately 87% of the Company’s total purchases during the year ended

Company had five suppliers which accounted for approximately 65% of the Company’s total purchases during the year ended

December 31, 2020.

These three suppliers are located in two countries, Indonesia, and the Philippines, which accounted for approximately

93% of the Company’s total purchases during the year ended December 31, 2018.

suppliers included Bacolod, a related party, which accounted for approximately 27% and 49% of the Company’s total purchases,

during the years ended December 31, 2019 and 2018, respectively.

September 20, 2018, the company entered into a settlement and mutual release agreement with a supplier that the company was engaged

in a commercial dispute.

The settlement resulted in a reduction of the outstanding accounts payable to that supplier of $388,199

to a balance due of $1,465,000.

The balance due to this supplier as of December 31, 2019 was approximately $927,800.

These five suppliers are located in the United States, Indonesia, Sri Lanka, Mexico and the Philippines, which

accounted for approximately 93% of the Company’s total purchases during the year.

During 2020, the Company purchased inventory

from two non-affiliated Indonesian suppliers that made up the balance of 25% of the supply concentration.

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

31, 2019, and a one-time purchase from a United States based supplier that accounted for approximately 21% of purchases.

suppliers are located in two countries, Indonesia, and the Philippines, which accounted for approximately 65% of the Company’s

total purchases during the year ended December 31, 2019.

These suppliers included Bacolod, a related party, which accounted for

approximately 27% of the Company’s total purchases during the year ended December 31, 2019.

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

13 unchanged sentences

As further described in Footnote 6 - Series A Convertible Preferred

Stock, as of December 31, 2019, 1,413 shares of Preferred Stock could be converted into 706,500 shares of common stock.

described in Footnote 7 –

Options & Warrants, as of December 31, 2019, 3,120,000 options may be exercised and 353,250

warrants exercisable.

there was a net loss for the years ended December 31, 2019, basic and diluted losses per share are the same.

Stock-Based Compensation:

Stock, as of December 31, 2020 and 2019, 1,413 shares of Preferred Stock could be converted into 706,500 shares of common stock.

As further described in Footnote 7 –

Options & Warrants, as of December 31, 2020 and 2019, 3,120,000 and 3,280,000 options

may be exercised, respectively, and 353,250 warrants are exercisable.

there was a net loss for the years ended December 31, 2020 and December 31, 2019, basic and diluted losses per share each year

are the same.

Company accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation”.

4 unchanged sentences

ASU 2016-09 and has a policy to account for forfeitures as they occur.

Non-Employee Stock-Based Compensation:

January 1, 2019, the Company adopted ASU No.

2018-07, Compensation –

Stock Based Compensation (Topic 718):

to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued

to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions.

This update supersedes

previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity –

Equity-Based Payments to Non-Employees.

The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements.

Company accounts for stock-based compensation awards to non-employees in accordance with ASU No.

4 unchanged sentences

718, with certain exceptions.

This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic

505-50, Equity –

Equity-Based Payments to Non-Employees.

issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the

Company are accounted for based on the fair value of the equity instruments issued.

Non-employee equity-based payments are recorded

as an expense over the service period, as if the Company had paid cash for the services.

At the end of each financial reporting

period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured

and the non-cash expense recognized during the period will be adjusted accordingly.

Since the fair value of equity-based payments

granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements

until the equity-based payments are fully vested or the service completed.

Company accounts for related party transactions in accordance with ASC 850 (“Related Party Disclosures”).

18 unchanged sentences

The shareholder was liable for individual income taxes on the Company’s taxable income.

the Company file consolidated federal and state income tax returns.

pro forma amounts for income tax expense have been presented assuming the Company’s pro forma effective tax rate of (2.56)%

for the year ended December 31, 2018, as if it had been a C corporation during that period.

The pro-forma provision

for income taxes excludes information related to the Company’s VIE.

the Company files consolidated federal and state income tax returns.

tax expense is the total of the current year income tax due and the change in deferred tax assets and liabilities.

17 unchanged sentences

Adopted Accounting Pronouncements

January 1, 2019, we adopted Accounting Standards Codification 842 and all the related amendments using the modified retrospective

We recognized the cumulative effect of initially applying the new lease standard as an adjustment to the opening balance

of retained earnings.

The comparative information has not been restated and continues to be reported under the lease accounting

standard in effect for those periods.

new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations.

the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and

initial direct costs for any leases that existed prior to adoption of the standard.

We did not reassess whether any contracts

entered into prior to adoption are leases or contain leases.

categorize leases with contractual terms longer than twelve months as either operating or finance.

Finance leases are generally

those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life.

Assets acquired

under finance leases are recorded in property and equipment, net.

All other leases are categorized as operating leases.

not have any finance leases as of December 31, 2019.

Our leases generally have terms that range from three years for equipment

and five to twenty years for property.

We elected the accounting policy to include both the lease and non-lease components of

our agreements as a single component and account for them as a lease.

liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings

available to us.

Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord

incentives, plus any direct costs from executing the leases.

Lease assets are tested for impairment in the same manner as long-lived

assets used in operations.

Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful

life or the lease term.

we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased

asset, and it is reasonably certain that we will exercise the option, we consider these options in determining the classification

and measurement of the lease.

Costs associated with operating lease assets are recognized on a straight-line basis within operating

expenses over the term of the lease.

table below presents the lease-related assets and liabilities recorded on the balance sheets.

Operating lease assets

Operating lease

Operating lease liabilities

cash flow information related to leases were as follows:

December 31, 2019

Cash used in operating activities:

ROU assets recognized in exchange for

lease obligations:

Operating leases

table below presents the remaining lease term and discount rates for operating leases.

Weighted-average

remaining lease term

Operating leases

Weighted-average

discount rate

of lease liabilities as of December 31, 2019, were as follows:

Total lease payments

of lease payments representing interest

Present value

of future minimum lease payments

obligations under leases

Non-current obligations

Issued Accounting Pronouncements

2019-12 Income Taxes (Topic 740)

December 2019, the FASB issued ASU No.

8 unchanged sentences

and related disclosure.

2016-13 Financial Instruments –

Credit Losses (Topic 326)

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments, which requires entities to use a forward-looking, expected loss model to estimate credit losses.

It also requires

entities to consider additional disclosures related to credit quality of trade and other receivables, including information related

to management’s estimate of credit allowances.

ASU 2016-13 was further amended in November 2018 by ASU 2018-19, Codification

Improvements to Topic 236, Financial Instrument-Credit Losses.

For public business entities that are U.S.

Securities and Exchange

Commission (SEC) filers excluding smaller reporting companies, the amendments are effective for fiscal years beginning after December

15, 2019, including interim periods within those fiscal years.

For all other public business entities, the amendments are effective

for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years.

On October 16, 2019,

FASB voted to delay implementation of ASU No.

2016-13, “Financial Instruments-Credit Losses (Topic 326) - Measurement of

Credit Losses on Financial Instruments.”

For all other entities, the amendments are now effective for fiscal years beginning

after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022.

Early adoption is permitted

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018.

The Company continues to evaluate

the impact of these amendments to the Company’s financial position and results of operations and currently expect no material

impact of the adoption of the amendments on the Company’s consolidated financial statements.

Going Concern

1 unchanged sentence

Although the company has positive cash flow from operations for the year ended December 31, 2020, 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.

These circumstances raise substantial doubt as to the Company’s ability to continue as

a going concern.

of $4,437,434, has an accumulated deficit of $13,510,517 and working capital deficit of $2,257,059, inclusive of $1,299,712 in

subordinated stockholder debt.

These circumstances raise substantial doubt as to the Company’s ability to continue as a

going concern.

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

6 unchanged sentences

Consolidation of Variable Interest Entities

April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike (see Note 2).

concluded that Strike is a VIE and the Company is the primary beneficiary of Strike, in accordance with ASC 810, Consolidation .

Therefore, the Company consolidated Strike in its financial statements.

Strike’s activities are reflected in the

Company’s financial statements starting on April 1, 2014, the effective date of the controlling interest transfer.

Strike was not a VIE of the Company and the Company was not the primary beneficiary of Strike prior to the effective date of

the controlling interest transfer of April 1, 2014.

Strike’s equity is classified as non-controlling interest in the

Company’s financial statements since the Company is not a shareholder of Strike.

information below represents the assets, liabilities and non-controlling interest related to Strike as of December 31, 2019 and

December 31, 2018.

April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike the Gold Foods Ltd.

(“Strike”),

a related party entity based in the United Kingdom.

The Company concluded that Strike was a variable interest entity (“VIE”)

and the Company was the primary beneficiary of Strike, in accordance with ASC 810, Consolidation.

Therefore, the Company consolidated

Strike in its financial statements.

Strike’s activities were reflected in the Company’s financial statements starting

on April 1, 2014, the effective date of the controlling interest transfer.

The equity of Strike was classified as non-controlling

interest in the Company’s financial statements since the Company is not a shareholder of Strike.

the third quarter of 2020, the Company determined that Strike was no longer a VIE because there was a verbal agreement with Strike

that terminated the original agreement to hold Company inventory on consignment and Strike has not engaged in transactions with

the Company or its subsidiaries in 2020.

In addition, as of July 1, 2020, the Company neither directly or indirectly absorbs any

variability of Strike nor holds the power to direct the activities of Strike that most significantly impact its economic performance

and Strike was also able to finance its activities without financial support from the Company.

The Company deconsolidated Strike

on July 1, 2020 and the income and loss for the VIE is recognized in the Company’s income statement through the deconsolidation

As a result of such deconsolidation, the Company no longer recognizes the carrying value of the noncontrolling interest

as a component of total shareholder’s equity resulting in a reduction of $468,673 of noncontrolling interest and $141,922

from accumulated other comprehensive income on its consolidated balance sheet.

Further, the Company derecognized approximately

$8,421 of effect of exchange rate changes on cash of Strike as of July 1, 2020 which is reflected in its consolidated statement

of cash flows for the twelve months ended December 31, 2020.

There is no other material impact on the Company’s consolidated

balance sheet, consolidated cash flows or consolidated statement of operations resulting from deconsolidation of Strike.

financials have not been presented because the effects were not material to the Company’s consolidated financial position

and results of operations for all periods presented.

Strike remains a related party to the Company after deconsolidation and there

is a long-term receivable from Strike to the Company for $455,545 as of December 31, 2020.

There were no transactions between

the Company and Strike since November 2020.

information below represents the assets, liabilities and non-controlling interest related to Strike as of July 1, 2020, the deconsolidation

date, and December 31, 2019.

Non-controlling interest

December 31, 2018

Accumulated other comprehensive income

Non-controlling interest

Fixed Assets, Net

assets comprised the following at December 31:

2 unchanged sentences

Leasehold improvements

Accumulated depreciation and amortization

Fixed assets,

the years ended December 31, 2019 and 2018, depreciation and amortization expense of fixed assets totaled approximately $66,000

and $64,000 respectively.

the years ended December 31, 2020 and 2019, depreciation expense totaled approximately $33,200 and $66,000, respectively.

December 2020, our warehouse and refrigeration equipment was sold to an unrelated party for $407,198 and the Company recorded

gain on the sale of the equipment of $343,181.

Capital Line of Credit

Company entered into a $14,000,000 revolving line of credit with ACF Finco I, LP (“ACF”) on August 31, 2016, the proceeds

of which were used to pay off the prior line of credit, pay new loan costs of approximately $309,000, and provide additional working

capital to the Company, this facility is secured by all assets of John Keeler & Co., Inc.

This facility was amended on November

18, 2016, June 19, 2017, October 16, 2017, September 19, 2018, November 8, 2018, July 29, 2019, and November 26, 2019.

line of credit bears an interest rate equal to the greater of 3 Month LIBOR rate plus 9.25%, the Prime rate plus 6.0% or a fixed

rate of 6.5%.

ACF line of credit agreement is subject to the following terms:

August 31, 2016, the Company entered into a $14,000,000 revolving line of credit pursuant to a loan and security agreement with

ACF Finco I, LP (“ACF”), the proceeds of which were used to pay off the prior line of credit, pay new loan costs of

approximately $309,000, and provide additional working capital to the Company.

This facility was secured by all assets of John

Keeler & Co., Inc.

and was amended on November 18, 2016, June 19, 2017, October 16, 2017, September 19, 2018, November 8,

2018, July 29, 2019, November 26, 2019 and May 7, 2020.

on the line of credit was equal to the greater of 3 Month LIBOR rate plus 9.25%, the Prime rate plus 6.0% or a fixed rate of 6.5%.

ACF line of credit agreement was subject to the following terms:

is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the

9 unchanged sentences

This amendment

memorialized the acquisition of Coastal Pride Seafood, LLC, made Coastal Pride Seafood, LLC a co-borrower to the facility.

Additionally,

the seventh amendment waived and reset the covenant default that occurred during 2019, and extended the term of the facility to

5 years and is subject to early termination by

the lender upon defined events of default.

During the year ended December 31, 2019 the Company was in violation of its minimum

EBITDA covenant as well as exceeding the covenant related to monies advanced to Bacolod Blue Star by approximately $85,000.

memorialized the acquisition of Coastal Pride and made Coastal Pride a co-borrower to the facility.

Additionally, the seventh

amendment waived and reset the covenant default that occurred during 2019 and extended the term of the facility to 5 years and

is subject to early termination by the lender upon defined events of default.

During the year ended December 31, 2020, the Company

was in violation of its minimum EBITDA covenant as well as exceeding the covenant related to monies advanced to Bacolod by approximately

The default interest rate increase of 3% was implemented in April 2020.

May 7, 2020, the Company entered into an eighth amendment to the loan and security agreement with ACF which acknowledged the execution

of a Payroll Protection Program loan and provided a reservation of rights related to a default of the minimum EBITDA covenant.

Company analyzed the Line of Credit modification under ASC 470-50-40-21 and determined that the modification did not trigger any

4 unchanged sentences

The Company added loan costs associated with the working capital lines of credit of approximately $70,000 and $25,000 for the

twelve months ending December 31, 2019 and 2018, leaving balances in the asset of $5,470 and $109,200, net of approximately $513,171

and $384,500 of accumulated amortization as of December 31, 2019 and 2018, respectively.

The Company recorded amortization expense

of approximately $129,000 and $155,500 during the years ended December 31, 2019 and 2018, respectively.

twelve months ended December 31, 2020 and 2019, leaving balances in the asset of $2,992 and $5,470, respectively, net of

approximately $585,000 and $513,000 of accumulated amortization as of December 31, 2020 and 2019, respectively.

The Company recorded amortization expense of approximately $72,000 and $129,000 during the years ended December 31, 2020

and 2019, respectively.

March 31, 2021, Keeler & Co.

and Coastal Pride entered into a loan and security agreement (the “Loan Agreement”)

with Lighthouse Financial Corp., a North Carolina corporation (“Lighthouse”) and the loan with ACF was extinguished.

Keeler Promissory Notes - Subordinated

Company had unsecured promissory notes outstanding to its stockholder of approximately $2,910,000 as of December 31, 2019 and

These notes are payable on demand and bear an annual interest rate of 6%.

These notes are subordinated to AFS Finco I LP

(“Ares”) as a stipulation to the working capital line of credit.

Principle payments are not allowed under this subordination

agreement that was effective August 31, 2016.

No Principal payments were made by the Company during 2019 or 2018.

expense for the John Keeler Promissory notes totaled approximately $174,600 the years ending December 31, 2019 and 2018.

Company had unsecured promissory notes outstanding to its stockholder of approximately $1,299,700 and $2,910,000 as of December

31, 2020 and 2019, respectively.

These notes are payable on demand, bear an annual interest rate of 6% and are subordinated

to the working capital line of credit.

Principal payments were not permitted under the subordination agreement with ACF,

that was effective August 31, 2016.

During 2020, a principal payment of approximately $17,000 was made.

An additional principal

settlement of $1,593,300 was made in December 2020 by the issuance of 796,650 shares of common stock to the noteholder.

No principal payments were made by the Company during 2019.

March 26, 2019, the Company issued a four-month promissory note in the principal amount of $1,000,000 (the “Kenar Note”)

to Kenar Overseas Corp., a company registered in Panama (the “Lender”) the term of which was previously extended to

March 31, 2020 after which time, on May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless

extended to September 30, 2021 at the Lender’s sole option), (ii) provide that the Company use one-third of any capital

raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18%

per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr.

to Kenar Overseas Corp., a company registered in Panama (“Kenar”), the term of which was previously extended to March

31, 2020 after which time, on May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 , (ii) provide

that the Company use one-third of any capital raise from the sale of its equity to reduce the outstanding principal under the

Kenar Note, (iii) set the interest rate at 18% per annum, payable monthly commencing October 1, 2020, and (iv) reduce the number

of pledged shares by Mr.

Keeler to 4,000,000.

As consideration therefor, the Company has agreed to issue 1,021,266 shares of its Common Stock to Kenar.

The outstanding principal

amount of the note at December 31, 2019 was $872,500.

expense for the Kenar note totaled approximately $160,400 during the year ending December 31, 2019.

As consideration for Kenar’s agreement to amend the note, on May 27, 2020,

the Company issued 1,021,266 shares of common stock to Kenar.

The outstanding principal amount of the note at December

31, 2020 was $872,500.

amendment to the Kenar Note was analyzed under ASC 470-50 and was determined that it will be accounted for as an extinguishment

of the old debt and the new debt recorded at fair value with the new effective interest rate of 18%.

Additionally, this treatment

resulted in the cost of the modification paid in common stock with a value of $2,655,292 charged to other expense as of the date

of the amendment as a non-cash forbearance fee.

expense for the Kenar Note totaled approximately $177,700 during the year ended December 31, 2020.

April 2, 2019, the Company issued a four-month unsecured promissory note in the principal amount of $100,000 (the “Lobo

Note”) to Lobo Holdings, LLC, a stockholder in the Company (“Lobo”).

Note”) to Lobo Holdings, LLLP, a stockholder in the Company (“Lobo”).

The Lobo Note bears interest at the rate

6 unchanged sentences

On November 15, 2019, the Company paid off the Lobo Note with the issuance to Lobo of an unsecured promissory note in the principal

amount of $100,000 which bears interest at the rate of 15%, which may be prepaid in whole or in part without penalty, and matures

on March 31, 2020.

On April 1, 2020 the Company paid off the November 15 2019 Lobo Note with the issuance of a 6 month unsecured

promissory note with a principal amount of $100,000, bearing an interest rate of 10%.

This note may be prepaid in whole or in

part without penalty.

expense for the Lobo note totaled approximately $13,100 during the year ending December 31, 2019.

Note - Subordinated

November 26, 2019, the Company issued a five year unsecured promissory note in the principal amount of $500,000 to Walter Lubkin

as part of the purchase price for the acquisition of Coastal Pride Co.

amount of $100,000 which bears interest at the rate of 15% and matured on March 31, 2020.

On April 1, 2020 the Company paid off

the November 15, 2019 note with the issuance of a six-month unsecured promissory note in the principal amount of $100,000, which

bears interest at the rate of 10% and matured on October 1, 2020.

On October 1, 2020, the Company paid off the April 1, 2020 note

with the issuance of a three-month unsecured promissory note in the principal amount of $100,000, which bears interest at the

rate of 10% and matured on December 31, 2020.

On January 1, 2021, the Company paid off the October 1, 2020 note with the issuance

of a six-month unsecured promissory note in the principal amount of $100,000, which bears interest at the rate of 10% per annum

and matures on June 30, 2021.

expense for the Lobo Note totaled approximately $11,200 during the year ended December 31, 2020.

November 26, 2019, the Company issued a five-year unsecured promissory note in the principal amount of $500,000 to Walter Lubkin Jr.

as part of the purchase price for the acquisition of Coastal Pride Company, Inc.

The note bears and interest rate of 4% per annum.

The note is payable quarterly based on an amount equal to the lesser of (i) $25,000 or (ii) 25% of the EBITDA of Coastal Pride

Seafood, LLC, as determined on the first day of each quarter.

The first payment was scheduled for February 26, 2020, however,

the EBITDA generated for Coastal during the 3 months did not warrant a principal payment.

This note is subordinated to ACF as

a stipulation to the working capital line of credit.

Principal payments are allowed under this subordination agreement that was

effective November 26, 2019 so long as the borrower is not in default of its lending agreement.

The note is payable quarterly based on an amount equal to the lesser of (i) $25,000 or (ii) 25% of the EBITDA of Coastal Pride, as determined

on the first day of each quarter.

The first payment was scheduled for February 26, 2020, however, the EBITDA generated for Coastal during

the 3 months did not warrant a principal payment.

This note is subordinated to the working capital line of credit.

Principal payments

are permitted so long as the borrower is not in default of its working capital line of credit.

No principal payments were made

1 unchanged sentence

expense for the Walter Lubkin Jr.

note totaled approximately $2,000 during the year ending December 31, 2019.

Lubkin III Convertible Note - Subordinated

November 26, 2019, the Company issued a thirty-nine month unsecured promissory note in the principal amount of $87,842 to Walter

Lubkin III as part the purchase price for the acquisition of Coastal Pride Co.

The note bears and interest rate of 4% per

note totaled approximately $20,100 during the year ended December 31, 2020.

Lubkin III Convertible Note –

On November 26, 2019, the Company issued a thirty-nine-month

unsecured promissory note in the principal amount of $87,842 to Walter Lubkin III as part the purchase price for the Coastal Pride acquisition.

The note bears interest at the rate of 4% per annum.

The note is payable in equal quarterly payments over six quarters beginning August

At the election of the holder,

at any time after the first anniversary date and prior to the end of the 39 month term of this note and prior to payment in full

of this note, the principal amount, together with accrued interest may be converted into the Company’s common stock at a

rate of $2.00 of principal and/or interest per common share.

This note is subordinated to ACF as a stipulation to the working

capital line of credit.

Principle payments are allowed under this subordination agreement that was effective November 26, 2019

so long as the borrower is not in default of its lending agreement.

At the election of the holder, at any time after the first anniversary of the issuance of the note, the then outstanding principal

and accrued interest may be converted into the Company’s common stock at a rate of $2.00 per share.

This note is subordinated to

the working capital line of credit.

Principal payments are permitted so long as the borrower is not in default of its working capital

line of credit.

No principal payments were made by the Company during 2020.

expense for the Walter Lubkin III note totaled approximately $400 during the year ending December 31, 2019.

Greco Convertible Note - Subordinated

expense for the Walter Lubkin III note totaled approximately $3,500 during the year ended December 31, 2020.

Greco Convertible Note –

November 26, 2019, the Company issued a thirty-nine-month unsecured promissory note in the principal amount of $71,372 to Tracy

Greco as part of the purchase price for the acquisition of Coastal Pride Co.

The note bears and interest rate of 4% per annum.

The note is payable in equal quarterly payments over six quarters beginning August 26, 2021.

At the election of the holder, at

any time after the first anniversary date and prior to the end of the 39 month term of this note and prior to payment in full

of this note, the principal amount, together with accrued interest may be converted into the Company’s common stock at a

rate of $2.00 of principal and/or interest per common share.

This note is subordinated to ACF as a stipulation to the working

capital line of credit.

Principle payments are allowed under this subordination agreement that was effective November 26, 2019

so long as the borrower is not in default of its lending agreement.

No Principal payments were made by the Company during 2019.

expense for the Tracy Greco note totaled approximately $300 during the year ending December 31, 2019.

Greco as part of the purchase price for the Coastal Pride acquisition.

The note bears interest at the rate of 4% per annum.

note is payable in equal quarterly payments over six quarters beginning August 26, 2021.

At the election of the holder, at any

time after the first anniversary of the issuance of the note, the then outstanding principal and accrued interest may be converted

into the Company’s common stock at a rate of $2.00 per share.

This note is subordinated to the working capital line of credit.

Principal payments are permitted so long as the borrower is not in default of its working capital line of credit.

payments were made by the Company during 2020.

expense for the Tracy Greco note totaled approximately $2,800 during the year ended December 31, 2020.

Lubkin Convertible Note –

November 26, 2019, the Company issued a thirty-nine month unsecured promissory note in the principal amount of $50,786 to John

as part the purchase price of Coastal Pride Co.

The note bears and interest rate of 4% per annum.

The note is payable

in equal quarterly payments over six quarters beginning August 26, 2021.

At the election of the holder, at any time after the

first anniversary date and prior to the end of the 39 month term of this note and prior to payment in full of this note, the principal

amount, together with accrued interest may be converted into the Company’s common stock at a rate of $2.00 of principal

and/or interest per common share.

This note is subordinated to ACF as a stipulation to the working capital line of credit.

payments are allowed under this subordination agreement that was effective November 26, 2019 so long as the borrower is not in

default of its lending agreement.

On November 26, 2019, the Company issued a

thirty-nine-month unsecured promissory note in the principal amount of $50,786 to John Lubkin as part the Coastal Pride acquisition.

The note bears interest at the rate of 4% per annum.

The note is payable in equal quarterly payments over six quarters beginning

August 26, 2021.

At the election of the holder, at any time after the first anniversary of the issuance of the note, the then

outstanding principal and accrued interest may be converted into the Company’s common stock at a rate of $2.00 per share.

This note is subordinated to the working capital line of credit.

Principal payments are permitted so long as the borrower is not

in default of its working capital line of credit.

No principal payments were made by the Company during 2020.

expense for the John Lubkin note totaled approximately $200 during the year ending December 31, 2019.

expense for the John Lubkin note totaled approximately $2,000 during the year ended December 31, 2020.

Protection Program Loan

April 17, 2020, the Company issued an unsecured promissory note to US Century Bank in the principal amount of $344,762 related

to the CARES Act Payroll Protection Program (“PPP Loan”).

This note is fully guaranteed by the Small Business Administration

(“SBA”) and may be forgivable provided that certain criteria are met.

The note has a two-year maturity and accrues

interest at 1% per annum.

The Company is required to make payments on the remaining principal of the note net of any loan forgiveness

beginning November 17, 2020.

In September 2020, the Company applied for the loan forgiveness by SBA through US Century Bank for

the full amount which was granted in November 2020 and was recognized as other income in the consolidated statement of operations

for the twelve months ended December 31, 2020.

May 13, 2020, the Company through Strike, its former variable interest entity, issued a six-year unsecured promissory note to

HSBC Bank plc in the principal amount of $43,788 related to the Bounce Back Loan Scheme, managed by the British Business Bank.

This note is fully guaranteed by the UK Secretary of State for Business, Energy and Industrial Strategy and accrues interest at

2.5% per annum.

As a result of the deconsolidation of Strike as a VIE during the third quarter of 2020, the note is no longer

debt of the Company.

Business Combination

1 unchanged sentence

November 26, 2019, the Company completed its merger with Coastal Pride Company, Inc.

Under the terms of the Agreement and Plan

of Merger and Reorganization, the Company paid $3.7 million in consideration including approximately $394,600 in cash, the

issuance of $2.59 million of its common stock, the issuance of $500,000 in 4% unsecured promissory note and $210,000 in 4% unsecured

Under the terms of the Agreement and

Plan of Merger and Reorganization, the Company paid $3.7 million in consideration including approximately $394,600 in cash, the

issuance of $2.59 million of its common stock, the issuance of a $500,000 4% unsecured promissory note and $210,000 4% unsecured

convertible promissory notes in exchange for all of the equity of Coastal Pride Company, Inc.

The 1,295,000 shares of the Company’s

common stock issued are subject to leak out agreements whereby the shareholders are unable to sell or transfer the stock for a

period of one year, and are permitted to transfer or sell up to 25% in each excessive 6 month period thereafter.

The 1,295,000 shares of the

Company’s common stock issued are subject to leak out agreements whereby the shareholders are unable to sell or transfer

the stock for a period of one year and are permitted to transfer or sell up to 25% in each successive six-month period thereafter.

transaction costs associated with this merger were $175,400 in investment banking fees paid via 87,700 shares of the common stock,

and $110,176 in legal fees paid in $49,535 in cash, and 30,321 shares of the company’s common stock.

The common stock

for these transaction costs were issued subsequent to December 31, 2019.

$110,176 in legal fees paid in $49,535 in cash and 30,321 shares of common stock.

The common stock for these transaction costs

were issued subsequent to December 31, 2019.

Value of Consideration Transferred and Recording of Assets Acquired

21 unchanged sentences

Financial liabilities:

Accounts payable

and accrued liabilities

Accounts payable and accrued liabilities

Right of Use Liability

1 unchanged sentence

Total identifiable net assets

Total net value of assets assumed

determining the fair value of the common stock issued, the Company considered the value of the stock as estimated by the company

at the time of closing.

Given that the stock was not trading at the time of closing, the Company utilized its most sale of common

stock from November, 2018 to November, 2019 of approximately $1,000,000 in the aggregate with a valuation of $2.00 shares of common

Total net value

of assets assumed

determining the fair value of the common stock issued, the Company considered the value of the stock as estimated at the time

Given that the stock was not trading at the time of closing, the Company utilized its sale of common stock from November

2018 to November, 2019 of approximately $1,000,000 in the aggregate with a valuation of $2.00 shares of common stock.

was assessed at the time of closing as to its fair value and it was determined that a step-up analysis was necessary in order

13 unchanged sentences

upon the actual acquisition costs.

the Years Ended December 31

$ (5,048,290 )

the year ended

$ (5,048,290 )

5 unchanged sentences

The pro forma amounts above for basic and diluted weighted average shares outstanding have been adjusted to include the stock

issued in connection with the acquisition of Coastal.

issued in connection with the acquisition of Coastal Pride.

Goodwill and Intangible Assets, Net

following table sets for the changes in the carrying amount of the Company’

Goodwill for the year ending December 31, 2019

following table sets for the changes in the carrying amount of the Company’s goodwill for the years ended December

31, 2020 and 2019.

Balance, January 1

of Coastal Pride Company

of Coastal Pride Company, Inc.

Balance, December 31

1 unchanged sentence

Period (Years)

Intangible Assets Subject to amortization

Intangible Assets Subject

to amortization

Customer Relationships

aggregate amortization remaining on the intangible assets as of December 31, 2019 is a follows:

Intangible Amortization

aggregate amortization remaining on the intangible assets as of December 31, 2020 is as follows:

Stockholders Equity

3 unchanged sentences

repurchases the Series A Stock.

Cumulative dividends shall accrue on each share of Series A Stock at the rate of 8% (the “Dividend Rate”) of the

purchase price of $1,000.00 per share, commencing on the date of issuance.

Dividends are payable quarterly, when and if declared

by the Board, beginning on September 30, 2018 (each a “Dividend Payment Date”) and are payable in shares of Common

Stock (a “PIK Dividend”) with such shares being valued at the daily volume weighted average price (“VWAP”)

of the Common Stock for the thirty trading days immediately prior to each Dividend Payment Date or if not traded or quoted as

determined by an independent appraiser selected in good faith by the Company.

Any fractional shares of a PIK Dividend will be

rounded to the nearest one-hundredth of a share.

Cumulative dividends accrue on each share of Series A Stock at the rate of 8% (the “Dividend Rate”) of the purchase

price of $1,000.00 per share, commencing on the date of issuance.

Dividends are payable quarterly, when and if declared by the

Board, beginning on September 30, 2018 (each a “Dividend Payment Date”) and are payable in shares of Common Stock

(a “PIK Dividend”) with such shares being valued at the daily volume weighted average price (“VWAP”) of

the Common Stock for the thirty trading days immediately prior to each Dividend Payment Date or if not traded or quoted as determined

by an independent appraiser selected in good faith by the Company.

Any fractional shares of a PIK Dividend will be rounded to

the nearest one-hundredth of a share.

All shares of Common Stock issued in payment of a PIK Dividend will be duly authorized,

2 unchanged sentences

legally available for the payment of those dividends and whether or not those dividends are declared by the Board.

of common stock were authorized to the shareholders in accordance with the terms of the Certificate of Designation for the Series

A Stock on March 31, 2019, June 30, 2019, September 20, 2019 and December 31, 2019.

The dividends resulted in total share issuances

of 56,520 shares of stock with a value of $113,041.

Each share of Series A Stock is convertible at any time and in the sole discretion of the holder thereof, into shares of common

stock at a conversion rate of 500 shares of Common Stock per each share of Series A Stock (the “Conversion Rate”)

The Company analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives

and Hedging”

of common stock were authorized for issuance to the stockholders in accordance with the terms of the Certificate of Designation

for the Series A Stock on March 31, 2020, June 30, 2020, September 29, 2020, and December 31, 2020.

The dividends resulted in

the issuance of an aggregate of 52,286 shares of common stock with a value of $113,040.

On March 31, 2021, the Company issued

11,975 shares of common stock to Series A preferred stockholders as a common stock dividend for the quarter ended March 31, 2021.

Each share of Series A Stock is convertible at any time and in the sole discretion of the holder, into shares of common stock

at a conversion rate of 500 shares of common stock for each share of Series A Stock (the “Conversion Rate”) The Company

analyzed the embedded conversion option for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging”

and determined that the conversion option should be classified as equity.

Company is authorized to issue 100,000,000 shares of common stock at a par value of $.0001 and had 17,589,705 shares of common

stock issued and outstanding as of December 31, 2019.

Stock issued in Private Placements

Company is authorized to issue 100,000,000 shares of common stock at a par value of $.0001 and had 19,580,721 and 17,589,705 shares

of common stock issued and outstanding as of December 31, 2020 and 2019, respectively.

January 29, 2019, the Company’s board of directors approved a private placement memorandum offering up to $300,000 or 150,000

shares of common stock at $2.00 per share.

the year ended December 31, 2019, the Company issued 11,000 common shares for a gross proceeds of $22,000.

Stock Issued for Bonus Shares for Employees

May 16, 2019, the Company’s Board of directors approved the issuance of 5,500 shares valued at $2.00 per share for a total

value of $11,000 issued to certain employees as an incentive bonus.

Stock Issued for the Acquisition of a Business

May 16, 2019, the Company issued 5,500 shares valued at $2.00 per share for a total value of $11,000 to certain employees as an

incentive bonus.

November 26, 2019, the Company issued 1,295,000 shares, valued at $2.00 per share for a total value of $2,590,000 in connection

with the acquisition of Coastal Pride Company, Inc.

Stock Issued as Dividends on 8% series A Convertible Preferred Stock

of common stock were authorized to the shareholders per Certificate of Designation for the Series A Stock the preferred shares

designation on March 31, 2019, June 30, 2019, September 20, 2019 and December 31, 2019.

The dividends resulted in total share

issuances of 56,520 shares of stock with a value of $113,041 during 2019.

Stock Issued for Consulting, Professional and other Services

the twelve months ending December 31, 2019, the Company issued 22,500 shares of common stock valued at $45,000 for legal and consulting

Additionally, the company granted 176,021 shares with a value of $352,042 for legal and consulting fees that were issued

subsequent to December 31, 2019.

with the acquisition of Coastal Pride.

of common stock were authorized for issuance to the Series A preferred stockholders in accordance with the terms of the Certificate

of Designation for the Series A Stock on March 31, 2019, June 30, 2019, September 20, 2019 and December 31, 2019.

The dividends

resulted in the issuances of an aggregate of 56,520 shares of common stock with a value of $113,041 during 2019.

the year ended December 31, 2019, the Company issued 11,000 shares of common stock at $2.00 per share in a private placement offering.

the year ended December 31, 2019, the Company issued 22,500 shares of common stock valued at $45,000 for legal and consulting

Additionally, the Company authorized an aggregate of 176,021 shares with a value of $352,042 for legal and consulting fees

that were issued subsequent to December 31, 2019.

May 27, 2020, the Company issued 5,000 shares of common stock at $2.00 per share in a private placement offering.

May 27, 2020, the Company issued 1,021,266 shares of common stock to Kenar at $2.60 per share as a forbearance fee.in connection

with Kenar’s agreement to amend its outstanding promissory note.

December 30, 2020, the Company issued 796,650 shares of common stock to John Keeler’s designee as partial payment of

outstanding notes payable totaling to $1,593,300.

of common stock were issued to the Series A preferred stockholders in accordance with the terms of the Certificate of Designation

for the Series A Stock on March 31, 2020, June 30, 2020, September 29, 2020 and December 31, 2020.

The dividends resulted in the

issuances of an aggregate of 52,286 shares of common stock with a value of $113,040 during 2020.

the year ended December 31, 2020, the Company issued 115,814 shares of common stock valued at $189,000 for legal and consulting

the twelve months ended December 31, 2020 and December 31, 2019, approximately $139,380 and $2,251,300, respectively, in compensation

expense was recognized on the following:

2018 Options to purchase an aggregate of 104 shares of Blue Star’s common stock issued to Carlos Faria at an exercise

price of $10,000 per share, which were outstanding immediately prior to the closing of the Merger, were converted into ten-year

immediately exercisable options to purchase an aggregate of 3,120,000 shares of common stock at an exercise price of $0.333

under the Company’s 2018 Equity Incentive Plan (“2018 Plan”).

These options were forfeited during the 12

months ending December 31, 2019

to purchase 3,120,000 shares of common stock at an exercise price of $2.00 with a 10 year life, which vest one-year from the

date of grant, were issued to Christopher Constable under the 2018 Plan during the twelve months ending December 31, 2018.

to purchase 430,000 shares of common stock at an exercise price of $2.00 with a 10 year life, which vest 25% each year from

the date of grant, were issued to various long term employees under the 2018 Plan during the twelve months ending December

to purchase 250,000 shares of common stock at an exercise price of $2.00 with a 10 year life, which vest 20% each year from

the date of grant, were issued to Zoty Ponce under the 2018 Plan during the twelve months ending December 31, 2019.

to purchase 25,000 shares of common stock at an exercise price of $2.00 with a 10 year life, which vest 25% each year from

the date of grant, were issued to various contractors during the twelve months ending December 31, 2019

following table summarizes the assumptions used to estimate the fair value of the stock options granted during 2019 and 2018:

options to purchase 3,120,000 shares of common stock at an exercise price of $2.00, which vest one year from the date of grant,

were issued to Christopher Constable, the Company’s former Chief Financial Officer, under the 2018 Plan during the twelve

months ended December 31, 2018 and have vested during the twelve months ended December 31, 2019.

options to purchase 430,000 shares of common stock at an exercise price of $2.00, which vest as to 25% of the shares subject

to the option each year from the date of grant, were issued to various long-term employees under the 2018 Plan during the

twelve months ended December 31, 2019.

options to purchase 250,000 shares of common stock at an exercise price of $2.00, which vest as to 20% of the shares subject

to the option each year from the date of grant, were issued to Zoty Ponce under the 2018 Plan during the twelve months ended

December 31, 2019.

options to purchase 25,000 shares of common stock at an exercise price of $2.00, which vest as to 25% of the shares subject

to the option each year from the date of grant, were issued to various contractors during the twelve months ended December

following table summarizes the assumptions used to estimate the fair value of the stock options granted for the twelve months

ended December 31, 2019 since no options were granted for the twelve months ended December 31, 2020:

Expected Volatility

Risk Free Interest Rate

–2.71 %

Expected life of options

the Black-Scholes option pricing model, the fair value of the 705,000 options granted during the twelve months ended December

31, 2019 is estimated at $613,586 on the date of grant.

The unrecognized portion of the expense remaining outstanding is $467,232.

During the twelve months ended December 31, 2019, an aggregate of 15,000 shares subject to options were forfeited, none of which

shares were vested and resulted in a reversal of the expense of $2,263.

following Table represents option activity for the period ending December 31, 2019 and 2018:

Average Exercise Price

Average Remaining Contractual Life in Years

Intrinsic Value

- December 31, 2017

- December 31, 2018

- December 31, 2019

the twelve months ended December 31, 2019, the Company had no Warrant activity.

For the 12 months ending December 31, 2018, approximately

$81,400 in Settlement and Warrant Expense was recognized on the following:

November 8, 2018, as part of the units purchased by the private placement participants and the SOR settlement shareholders, warrants

to purchase 172,000 share of the Company’s common stock were granted.

These warrants are immediately vested, are exercisable

at an exercise price of $2.40 per share and expire on November 7, 2021.

following table summarizes the assumptions used to estimate the fair value of the warrants to purchase 172,000 shares granted

during 2018 as of re-measurement dates:

Expected Volatility

Risk Free Interest Rate

Expected life of warrants

following table represents warrant activity for the period ending December 31, 2019 and 2018:

31, 2019 was estimated at $613,586 on the date of grant.

For the twelve months ended December 31, 2020 and 2019, the unrecognized

portion of the expense remaining outstanding was $327,852 and $467,232, respectively.

The weighted average period of unrecognized

stock options compensation that is expected to be recognized as expense is approximately 7 years.

During the twelve months

ended December 31, 2019, an aggregate of 15,000 shares subject to options were forfeited, none of which shares were vested, which

resulted in a reversal of the expense of $2,263.

following table represents option activity for the years ended December 31, 2020 and 2019:

Average Exercise Price

1 unchanged sentence

Intrinsic Value

- December 31, 2017

- December 31, 2018

- December 31, 2019

12 Income taxes

connection with the Merger, as discussed in Note 1, the Company terminated its S-Corporation status and became a taxable entity

(“C Corporation”) on November 8, 2018.

The consolidated statements of income present unaudited pro forma statements

of income for the year to date and for prior year period.

The pro-forma provision for income taxes excludes information related

to the Company’s VIE.

Outstanding - December

Exercisable - December 31, 2018

Outstanding - December 31, 2019

Exercisable - December 31, 2019

Outstanding - December 31, 2020

Exercisable - December 31, 2020

non-vested options outstanding are 530,000 and 690,000 for the twelve months ended December 31, 2020 and 2019, respectively.

the twelve months ended December 31, 2020 and 2019, the Company did not have any warrant activity.

of federal and state income taxes between current and deferred portions is as follows:

Components of Tax Expense

December 31, 2019

December 31, 2018

of Tax Expense

Current - Federal

3 unchanged sentences

Income Tax Provision/(Benefit)

income tax expense differs from the statutory federal rates of 21% for the years ended December 31, 2019 and 2018 due

to the following:

income tax expense differs from the statutory federal rates of 21% for the years ended December 31, 2020 and 2019 due to the following:

Reconciliation

Provision/(Benefit)

at Statutory Rate

Provision/(Benefit) at Statutory

$ (1,054,558 )

State Tax Provision/(Benefit)

net of federal benefit

Permanent Book/Tax

Employee Retention

Change in valuation

Tax Provision/(Benefit)

State Tax Provision/(Benefit) net of

federal benefit

Permanent Book/Tax Differences

Change in valuation allowance

Income Tax Provision/(Benefit)

components of the net deferred tax asset at December 31, 2020 and 2019, are as follows:

December 31, 2019

December 31, 2018

Deferred Tax Assets

Charitable Contribution Carryforward

Business Interest Limitation

Stock based compensation

Federal Net Operating loss

State Net Operating Loss

Total Deferred Tax Assets

Deferred Tax Liabilities

Charitable Contribution

Inventory Reserve

Total Deferred Tax Liability

Net Deferred Tax Asset/(Liability)

Business Interest

Stock based compensation

Federal Net Operating

Net Operating Loss

Total Deferred Tax

Deferred Tax Asset/(Liability)

Valuation Allowance

Net Deferred Tax Asset/(Liability)

Tax Asset/(Liability)

periods for all fiscal years after 2017 remain open to examination by the federal and state taxing jurisdictions to which

the Company is subject.

As of December 31, 2019, the Company has federal net operating loss of $1,429,252 to carry forward

indefinitely.

As of December 31, 2020, the Company has federal net operating loss of $4,186,428 to carry forward indefinitely.

740, “Income Taxes”

6 unchanged sentences

to future realization of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31,

of December 31, 2019, the Company has evaluated and concluded that there were no material uncertain tax positions requiring

of December 31, 2020, and 2019, the Company has evaluated and concluded that there were no material uncertain tax positions requiring

recognition in the Company’s financial statements.

1 unchanged sentence

related interest as income tax expenses.

No interest or penalties were recorded during the years ended December 31, 2019.

No interest or penalties were recorded during the years ended December 31, 2020, and

Commitment and Contingencies

Company leases its Miami office and warehouse facility from JK Real Estate, a related party through common family beneficial ownership

Company leased its Miami office and warehouse facility from JK Real Estate, a related party through common family beneficial ownership

(see Note 2).

The lease has a 20 year term, expiring in July 2021.

The Company is a guarantor of the mortgage on the facility

which had a balance of approximately $1,274,700 at December 31, 2019;

the Company’s maximum exposure.

deems that rental income on this lease is sufficient to cover the loan payments under this mortgage.

Therefore, the Company did

not record any liability related to the mortgage in the consolidated financial statements as the Company does not believe it will

be called upon to perform under this guarantee, in accordance with ASC 460, Guarantees .

Company leases approximately 3,000 square feet in Beaufort South Carolina for the offices of Coastal Pride Seafood, LLC.

office space consists of two leases with related parties with approximately 6 years remaining on the leases.

the disclosure under Recently Adopted Accounting Pronouncements under ASC 842 Leases regarding the disclosure of the future period

amortizations of the Right of Use assets.

and equipment lease expenses amounted to approximately $237,400 and $211,000 for the years ended December 31, 2019 and 2018, respectively.

The lease which had a 20-year term, expiring in July 2021 was terminated on December 31, 2020, upon the sale of

the facility.

The Company was a guarantor of the mortgage on the facility which had a zero balance at December 31, 2020.

the Company did not record any liability related to the mortgage in the consolidated financial statements as the Company will

not be called upon to perform under any guarantee, in accordance with ASC 460, Guarantees .

Company leases approximately 3,000 square feet in Beaufort South Carolina for the offices of Coastal Pride.

This office space

consists of two leases with related parties with approximately four years remaining on the leases.

Recently Adopted Accounting Pronouncements under ASC 842 Leases regarding the disclosure of the future period amortizations of

the Right of Use assets.

and equipment lease expenses were approximately $239,600 and $237,400 for the years ended December 31, 2020 and 2019, respectively.

Company has reached a settlement agreement with a former employee.

9 unchanged sentences

The coronavirus and actions taken to mitigate the spread of it have had and are expected to continue to

have an adverse impact on the economies and financial markets of the geographical area in which the Company operates.

have an adverse impact on the economies and financial markets of the geographical areas in which the Company operates.

27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted to amongst other provisions, provide

emergency assistance for individuals, families and businesses affected by the novel coronavirus pandemic.

emergency assistance for individuals, families and businesses affected by the novel coronavirus pandemic for 2020 and into

The Company’s business not being deemed essential resulted in decreased financial performance that may not be

indicative of future financial results.

Government-mandated closures of businesses and shipping delays have affected our sales

and inventory purchases.

The Company continues to face uncertainty and increased risks concerning its employees, customers,

supply chain and government regulation.

In April 2021, the U.S.

government has made available the COVID-19 vaccine to most

of its population to aid with the pandemic but the long-term effects of this development are yet to be seen.

The Company’s

business not being deemed essential resulted in will result in decreased financial performance that may not be indicative of future

financial results and there remains uncertainty and increased risks concerning its employees, customers, supply chain and government

Going forward sales and supply may continue to be adversely affected due to COVID-19, via decreased demand and/or

a decreased ability to source adequate product to meet demand.

sales and supply may continue to be adversely affected due to COVID-19 and plans continue to be developed to ensure a prompt

response is given to address the effects of the pandemic.

Employee Benefit Plan

3 unchanged sentences

Subsequent Events

April 17, 2020 the company entered into an unsecured note with US Century Bank for $344,762 related to the CARES act Payroll Protection

This note is fully guaranteed by the SBA and may be forgivable provided that certain criteria are met.

The interest rate

on the loan is 1%, and has a 2 year maturity.

The Company is required to make payments on the remaining principal of the note

net of any loan forgiveness beginning November 17, 2020.

May 7, 2020 the Company entered into the eighth amendment to the Ares Loan and Security agreement.

This amendment acknowledged

the execution of the Payroll Protection Program loan as well provided a Reservation of Rights related to a default of the minimum

EBITDA covenant.

This amendment also established a default advance rate of an additional 3%.

March 26, 2019, the Company issued a four-month promissory note in the principal amount of $1,000,000 (the “Kenar Note”)

to Kenar Overseas Corp., a company registered in Panama (the “Lender”) the term of which was previously extended to

March 31, 2020 after which time, on May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless

extended to September 30, 2021 at the Lender’s sole option), (ii) provide that the Company use one-third of any capital

raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18%

per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr.

Keeler to 4,000,000.

As consideration therefor, the Company has agreed to issue 1,021,266 shares of its Common Stock to Kenar.

April 1, 2020, the Company issued a six-month promissory note in the principal amount of $100,000 to Lobo Holdings, LLC., a stockholder

in the Company.

The note bears interest at the rate of 10% per annum.

The note may be prepaid in whole or in part without penalty.

This note paid in full the $100,000 outstanding note dated August 2, 2019.

Series A Preferred Stock dividend of common stock was authorized to the shareholders per the preferred shares designation on March

The dividend resulted in an issuance of 14,130 shares of stock with a value of $28,260.

January 23, 2020 the Company issued 127,700 shares of stock for professional fees, and 30,321 shares of common stock for legal

Company authorized the issuance of an aggregate of 83,721 shares for quarterly legal and consulting fees to be issued subsequently

to December 31, 2020.

February 8, 2021, the Company issued 25,000 shares to an investment relations firm as compensation under an investor relations

consulting agreement.

March 30, 2021, the Company issued 10,465 shares of common stock to the designee of a law firm for services provided to the Company.

March 31, 2021, the Company issued 5,000 shares to an investor relations firm for services provided to the Company under an investor

relations consulting agreement.

Protection Program Loan

March 2, 2021, the Company received proceeds of $371,944 and issued an unsecured promissory note to US Century in the principal

amount of $371,944 in connection with a PPP Loan.

The note accrues interest at 1.0% per annum, matures five years from the date

of issuance and is fully guaranteed by the SBA and may be forgiven provided certain criteria are met.

The Company may apply for

forgiveness after August 17, 2021 and may be required to make monthly payments of approximately $8,500 beginning June 2, 2022.

March 29, 2021, the board of directors increased the size of the Company’s Board from two to five members and appointed

Guzy, Timothy McLellan and Trond Ringstad as directors, effective April 12, 2021, to fill the vacancies created by

such increase.

connection with such appointments, the Company entered into one-year director service agreements with each of Messrs.

Guzy, McLellan

and Ringstad and with each of the two current Board members, Nubar Herian and John Keeler which automatically renew for successive

one-year terms.

consideration for their services, each director will be issued $25,000 of shares of the Company’s common stock for each

year’s service and on April 12, 2021, the Company granted each director an option to purchase 100,000 shares of common stock

at an exercise price of $2.00 per share, which option vests in equal monthly installments over the course of the applicable year

and will expire three years from the date they are fully vested.

Credit Facility

March 31, 2021, Keeler & Co.

and Coastal Pride entered into a loan and security agreement (“Loan Agreement”) with

Lighthouse pursuant to the terms of the Loan Agreement, Lighthouse made available to Keeler & Co.

and Coastal Pride (together,

the “Borrowers”) a $5,000,000 revolving line of credit for a term of thirty-six months, renewable annually for one-year

periods thereafter.

Amounts due under the line of credit are represented by a revolving credit note issued to Lighthouse by the

advance rate of the revolving line of credit is 85% with respect to eligible accounts receivable and the lower of 60% of the Borrowers’

eligible inventory, or 80% of the net orderly liquidation value, subject to an inventory sublimit of $2,500,000.

The inventory

portion of the loan will never exceed 50% of the outstanding balance.

Interest on the line of credit is the prime rate (with a

floor of 3.25%), plus 3.75%.

The Borrowers paid Lighthouse a facility fee of $50,000 and will pay an additional facility fee of

$25,000 on each anniversary of March 31, 2021.

line of credit is secured by a first priority security interest on all the assets of each Borrower.

Pursuant to the terms of a

guaranty agreement, the Company guaranteed the obligations of the Borrowers under the note and John Keeler, Executive Chairman

and Chief Executive Officer of the Company, provided a personal guaranty of up to $1,000,000 to Lighthouse.

Borrowers utilized $784,450 borrowed from Lighthouse to repay all the outstanding indebtedness owed to the ACF as of March 31,

As a result, all obligations owed to ACF were satisfied and the loan agreement with ACF was terminated.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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 8. Financial Statements and Supplementary Data