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Item 8. Financial Statements and Supplementary Data

2022-03-31 compared with 2021-04-15 · 1121 added, 1031 removed, 206 unchanged (91% of the section changed)

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Blue Star Foods Corp.

Index to Audited

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets as of December 31, 2021 and 2020

Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2021 and 2020

Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2021 and 2020

Consolidated Statements of Cash Flows for the years ended December 31, 2021 and 2020

Notes to Consolidated Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Star Foods Corp

on the Financial Statements

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

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

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency

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

Management’s plans in regard to these matters

are also described in Note 3.

The financial statements do not include any adjustments that might result from the outcome of this

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

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

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

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.

To the Shareholders and Board of Directors of

Blue Star Foods Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Blue Star Foods Corp.

and its subsidiaries (collectively, the “Company”) as of December 31, 2021 and 2020,

and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity (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, 2021 and

2020, 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.

Going Concern Matter

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements, the Company

has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue

as a going concern.

Management’s plans in regard to these matters are also described in Note 3.

The financial statements do not

include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

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 in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

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

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well

as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

MaloneBailey, LLP

/s/ MaloneBailey,

www.malonebailey.com

have served as the Company’s auditor since 2014.

We have served as the Company’s auditor since

Houston, Texas

March 31, 2022

Star Foods Corp.

BALANCE SHEETS

DECEMBER 31, 2021

DECEMBER 31, 2020

CURRENT ASSETS

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

Cash and cash equivalents

Restricted cash

Accounts receivable,

net (including VIE $20,321 for 2019)

Accounts receivable, net

Inventory, net

(including VIE $95,441 for 2019)

Advances to related

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

Total Current

Advances to related party

Other current assets

Total Current Assets

RELATED PARTY LONG-TERM RECEIVABLE

3 unchanged sentences

Customer relationships

Total Intangible

LIABILITIES AND STOCKHOLDERS’

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

Non-compete agreements

Total Intangible Assets

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

CURRENT LIABILITIES

Total Current

LONG -TERM LIABILITY

Long-term lease

party long-term notes

Accounts payable and accruals

Working capital line of credit

Deferred income

Current maturities of lease liabilities

Current maturities of related party long-term notes

Related party notes payable

Related party notes payable - subordinated

Other current liabilities

Total Current Liabilities

LONG-TERM LIABILITIES

Long-term lease liability

Long-term debt

Related party long-term notes

TOTAL LIABILITIES

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

STOCKHOLDERS’ EQUITY (DEFICIT)

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

10,000 shares authorized, 0 shares issued and outstanding as of December 31, 2021, and 1,413 shares issued and outstanding as of December 31, 2020

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

24,671,318 shares issued and outstanding as of December 31, 2021, and 19,580,721 shares issued and outstanding as of December 31, 2020

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

( 16,144,151 )

Total Blue Star

Stockholders’

Non-controlling

other comprehensive income (VIE)

Total VIE’s

TOTAL STOCKHOLDERS’

LIABILITIES AND STOCKHOLDERS’

( 13,510,517 )

TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

accompanying notes are an integral part of these consolidated financial statements

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DEPRECIATION AND AMORTIZATION

OTHER OPERATING

IMPAIRMENT LOSS

OTHER OPERATING EXPENSES

LOSS FROM OPERATIONS

FORBEARANCE FEE EXPENSE (NON-CASH)

INTEREST EXPENSE

INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST

NET LOSS ATTRIBUTABLE

TO BLUE STAR FOODS CORP.

( 2,783,641 )

( 1,803,506 )

DIVIDEND ON PREFERRED STOCK

NET LOSS ATTRIBUTABLE

TO BLUE STAR FOODS CORP COMMON STOCKHOLDERS

FORBEARANCE FEE EXPENSE (NON-CASH)

( 2,655,292 )

INTEREST EXPENSE

( 2,605,374 )

COMPREHENSIVE LOSS:

ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE

INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

( 4,437,434 )

NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST

NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

$ ( 2,605,374 )

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

$ ( 4,445,011 )

DIVIDEND ON PREFERRED STOCK

NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

COMMON STOCKHOLDERS

$ ( 2,633,634 )

COMPREHENSIVE

LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP

$ ( 4,558,051 )

COMPREHENSIVE LOSS:

CHANGE IN FOREIGN CURRENCY TRANSLATION ADJUSTMENT

TRANSLATION ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST

COMPREHENSIVE (LOSS) INCOME

COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP.

$ ( 2,659,614 )

Loss per basic and diluted common

$ ( 4,445,011 )

Loss per common share:

Basic weighted average common

shares outstanding

Fully diluted

net loss per common share

Fully diluted weighted average

common shares outstanding

Net loss per common share - basic and diluted

Weighted average common shares outstanding - basic and diluted

accompanying notes are an integral part of these consolidated financial statements

Star Foods Corp.

STATEMENTS OF CHANGES IN STOCKHOLDERS’

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

ENDED DECEMBER 31, 2021

A Pref Stock $.0001 par value

A Preferred Stock $.0001 par value

Stock $.0001 par value

Other Comprehensive

Blue Star Foods Corp.

Stockholders’

December 31, 2018

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

Common stock issued for service

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 )

Stockholder’s

Non-Controlling

Stockholder’s

based compensation

Common stock issued to settle related party interest

Common stock issued to settle related party interest, shares

stock issued for cash

stock issued for service

stock issued to related party lender for forbearance

stock issued to settle related party notes

stock issued for Taste of BC acquisition held in escrow

stock issued for Taste of BC acquisition held in escrow, shares

stock issued for Taste of BC Acquisition

stock issued for Taste of BC Acquisition, shares

A preferred 8% dividend issued in common stock

Stock conversion to Common Stock

Stock conversion to Common Stock, shares

stock issued from exercise of warrants

stock issued from exercise of warrants, shares

Deconsolidation

of Strike the Gold Foods, Ltd.

Comprehensive

balance, value

based compensation

stock issued to settle related party interest

stock issued for cash

stock issued for service

stock issued for TOBC acquisition held in escrow

stock issued for TOBC Acquisition

A preferred 8% dividend issued in common stock

Stock conversion to Common Stock

stock issued from exercise of warrants

Comprehensive

balance, value

accompanying notes are an integral part of these consolidated financial statements

5 unchanged sentences

$ ( 4,437,434 )

Adjustments to

reconcile net loss to net cash provided in operating activities:

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Stock based compensation

issued for service

issued for forbearance fee

of fixed assets

of intangible assets

of loan costs

Common stock issued for service

Common stock issued for forbearance fee

Depreciation of fixed assets

Amortization of intangible assets

Amortization of loan costs

Gain on PPP loan forgiveness

Gain on termination of lease

Gain on sale of equipment

Impairment of intangible asset

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

Allowance for inventory obsolescence

Changes in operating assets and liabilities:

Accounts receivables

Advances to related parties

Other current assets

( 3,512,928 )

Lease liability

Accounts payable and accruals

( 1,873,224 )

Deferred income

Other current liabilities

Net Cash (Used in) Provided by Operating Activities

( 4,833,029 )

CASH FLOWS FROM 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

Deconsolidation of variable interest entity

Net cash paid for acquisition of TOBC

Proceeds from sale of fixed assets

Purchases of fixed assets

Net Cash (Used in) Provided by Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

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

Proceeds from common stock offering

Proceeds from common stock warrants exercised

Proceeds from working capital line of credit

Proceeds from HSBC loan

Proceeds from PPP loan

Repayments of working capital line of credit

( 10,431,291 )

( 11,887,721 )

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

Repayments of related party notes payable

( 1,534,612 )

Principal payments of long-term debt

Payments of loan costs

Net Cash Provided by (Used in) Financing Activities

( 4,800,635 )

Effect of Exchange Rate Changes on Cash

NET INCREASE 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 Cash Flow Information

Cash paid for interest

SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY

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

Preferred shares conversion to common stock

Common stock issued for interest payment

Shares issued for acquisition

Related party notes recognized from business acquisition

accompanying notes are an integral part of these consolidated financial statements

3 unchanged sentences

Company Overview

in Miami, Florida, 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.

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 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.

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 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 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

Mexico and Latin America and sells premium branded label crabmeat throughout North America.

Star Foods Corp., a Delaware corporation (“we”, “our”, the “Company”), is an international sustainable

marine protein company based in Miami, Florida that imports, packages and sells refrigerated pasteurized crab meat, and other premium

seafood products.

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

(“Keeler & Co.”) was incorporated

in the State of Florida in May 1995.

The Company’s 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 and Canada under several brand names such as Blue Star,

Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh, and steelhead salmon produced under the brand name

Little Cedar Farms for distribution in Canada.

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 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 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.

merged with 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 Mexico

and Latin America and sells premium branded label crabmeat throughout North America.

April 27, 2021, the Company entered into a stock purchase agreement (the “Purchase Agreement”) with TOBC, and Steve Atkinson

and Janet Atkinson (the “Sellers”), the owners of all of the capital stock of TOBC (the “TOBC Shares”), pursuant

to which the Company acquired all of the TOBC Shares from the Sellers for an aggregate purchase price of CAD$ 4,000,000 consisting of:

(i) an aggregate of CAD$ 1,000,000 in cash (with each Seller receiving a pro rata amount based upon the total number of TOBC Shares held

by such Seller);

(ii) promissory notes in the aggregate principal amount of CAD$ 200,000 (the “Notes”) with the principal

amount of each Seller’s Note based on such Seller’s pro rata portion of the TOBC Shares);

and (iii) 987,741 shares of the

Company’s common stock (representing CAD$ 2,800,000 of shares based on USD$ 2.30 per share) with each Seller receiving a pro rata

portion of such shares based upon the total number of TOBC Shares held by such Seller.

June 24, 2021, the Purchase Agreement was amended (the “Amendment”), to increase the Purchase Price to an aggregate of CAD$ 5,000,000

and the acquisition closed.

As a result of the acquisition, TOBC became a wholly owned subsidiary of the Company.

Pursuant to the Amendment,

on August 3, 2021, an aggregate of 344,957 shares of the Company’s common stock (representing CAD$ 1,000,000 of additional shares

calculated at USD$ 2.30 per share) was put in escrow until the 24-month anniversary of the closing.

If within 24 months of the closing

TOBC has cumulative revenue of at least CAD$ 1,300,000 , the Sellers will receive all of the escrowed shares.

If as of the 24-month anniversary

of the closing, TOBC has cumulative revenue of less than CAD$ 1,300,000 , the Sellers will receive a prorated number of the escrowed shares

based on the actual cumulative revenue of TOBC as of such date.

is a land-based recirculating aquaculture systems salmon farming operation, based in Nanaimo, British Columbia, Canada, which sells its

steelhead salmon to distributors in Canada.

Summary of Significant Accounting Policies

of Presentation

accompanying financial statements of the Company were prepared in accordance with accounting principles generally accepted in

the United States of America (“U.S.

GAAP”).

accompanying financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United

States of America (“U.S.

of Consolidation

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

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.

a wholly owned subsidiary, Coastal

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

and Taste of BC Aquafarms,

(“TOBC”), a wholly owned subsidiary.

All intercompany balances and transactions have been eliminated in consolidation.

and Other Intangible Assets

2 unchanged sentences

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

Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810, Consolidation ,

when a reporting entity is the primary beneficiary of an entity that is a variable interest entity (“VIE”), as defined

in ASC 810, the VIE must be consolidated into the financial statements of the reporting entity.

The determination of which owner

is the primary beneficiary of a VIE requires management to make significant estimates and judgments about the rights, obligations,

and economic interests of each interest holder in the VIE.

Company evaluates its interests in VIE’s on an ongoing basis and consolidates any VIE in which it has a controlling financial

interest and is deemed to be the primary beneficiary.

A controlling financial interest has both of the following characteristics:

(i) the power to direct the activities of the VIE that most significantly impact its economic performance;

and (ii) the obligation

to absorb losses of the VIE that could potentially be significant to it or the right to receive benefits from the VIE that could

be significant to the VIE.

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

(“Strike”),

a related party entity which holds the Company’s inventory on consignment in United Kingdom (see Note 3).

The Company evaluated

its interest in Strike and determined that Strike is a VIE due to the Company’s implicit interest in Strike and the fact

that Strike and the Company were under common control after the transfer of the controlling interest.

Moreover, the Company determined

that it is the primary beneficiary of Strike due to the fact that the Company had both the power to direct the activities that

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 starting as of April 1, 2014, the effective date of 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

Star Export Corp.

(“Bacolod”), Bicol Blue Star Export Co.

(“Bicol”) and John Keeler Real Estate Holding

(“JK Real Estate”), in light of ASC 810.

The Company purchases inventory from Bacolod, an exporter of pasteurized

crab meat out of the Philippines.

The Company purchased inventory, via Bacolod, from Bicol.

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

The Company does not directly or indirectly absorb any variability of Bacolod or Bicol.

The relationship between the Company

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 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.

Company reviews its indefinite-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 indefinite-lived intangibles and goodwill and determined there was no impairment for the

years ended December 31, 2021 and 2020.

reviews long-lived assets, including finite-lived intangible assets, for indicators of impairment whenever events or changes in circumstances

indicate that the carrying value may not be recoverable.

Cash flows expected to be generated by the related assets are estimated over

the asset’s useful life on an undiscounted basis.

If the evaluation indicates that the carrying value of the asset may not be recoverable,

the potential impairment is measured using fair value.

Impairment losses for assets to be disposed of, if any, are based on the estimated

proceeds to be received, less costs of disposal.

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 recognized an impairment loss on customer relationships

intangible asset of $ 374,300 for the year ended December 31, 2021.

Restricted Cash and Cash Equivalents

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

insured limits.

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

The Company has not experienced any losses on such accounts and believes it does not have a significant exposure.

Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents.

As of December

31, 2021, the Company had no cash equivalents.

Company considers any cash balance in the lender designated cash collateral account as restricted cash.

All cash proceeds must

be deposited into cash collateral account, and will be cleared and applied to the line of credit.

The Company has no access to

this account, and the purpose of the funds is restricted to repayment of the line of credit.

The following table provides a reconciliation

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 statements of cash flows:

All cash proceeds must be deposited

into the cash collateral account, and will be cleared and applied to the line of credit.

The Company has no access to this account, and

the purpose of the funds is restricted to repayment of the line of credit.

The following table provides a reconciliation 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 statements of cash flows:

Schedule Reconciliation of Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents

Total cash, cash

equivalents, and restricted cash shown in the cash flow statement

Restricted cash

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.

The Company grants

credit to its customers based on the Company’s evaluation of a particular customer’s credit worthiness.

for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of

the Company’s periodic credit evaluations of its customers’

financial condition.

Receivables are written off as uncollectible

and deducted from the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful.

recoveries are netted against the provision for doubtful accounts expense.

The Company grants credit

to its customers based on the Company’s evaluation of a particular customer’s credit worthiness.

for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of the Company’s

periodic credit evaluations of its customers’ financial condition.

Receivables are written off as uncollectible and deducted from

the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful.

Subsequent recoveries are netted against

the provision for doubtful accounts expense.

The Company generally does not charge interest on receivables.

are net of estimated allowances for doubtful accounts and sales return and allowances.

They are stated at estimated net realizable

As of December 31, 2020, and 2019, the Company recorded sales return and allowances and refund liability of approximately

$62,800 and $59,100, respectively.

There was no allowance for bad debt recorded during the years ended December 31, 2020 and 2019.

are net of estimated allowances for doubtful accounts and sales return, allowances and discounts.

They are stated at estimated

net realizable value.

As of December 31, 2021, and 2020, the Company recorded sales return, allowances, discounts and refund liability

of approximately $ 66,000 and

respectively.

allowance for bad debt recorded during the years ended December

31, 2021 and 2020.

Substantially

all of the Company’s inventory consists of packaged crab meat located at the Company’s warehouse facility as well

as public cold storage facilities and merchandise in transit from suppliers.

all of the Company’s inventory consists of packaged crab meat located at a public cold storage facility and merchandise in transit

from suppliers.

The Company also has eggs and fish in process inventory from TOBC.

The cost of inventory is primarily determined using

the specific identification 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’

The Company had in-transit inventory of approximately $522,000 and $1,958,000 as of December 31, 2020 and December

31, 2019, respectively.

Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory

to the lower of cost or market based on its assessment of market conditions, inventory turnover and current stock levels.

the specific identification method for crab meat.

Fish in process inventory is measured based on the estimated biomass of fish on hand.

The Company has established a standard procedure to estimate the biomass of fish on hand using counting and sampling techniques.

is valued at the lower of cost or net realizable value, cost being determined using the first-in, first-out method for crab meat and

using various estimates and assumptions in regard to the calculation of the biomass, including expected yield, market value of the biomass,

and estimated costs of completion.

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

Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to the

lower of cost or net realizable value based on its assessment of market conditions, inventory turnover and current stock levels.

write-downs are charged to cost of goods sold.

The Company recorded an inventory allowance of approximately $71,400 and $40,800

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

Company’s inventory as of December 31 2021 and 2020 consists of:

Inventory purchased for resale

Feeds and eggs processed

In-transit inventory

Inventory allowance

Inventory, net

to Suppliers and Related Party

the normal course of business, the Company may advance payments to its suppliers, inclusive of Bacolod, a related party.

advances are in the form of prepayments for products that will ship within a short window of time.

In the event that it becomes

necessary for the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the

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

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

useful life of the asset as follows:

the normal course of business, the Company may advance payments to its suppliers, including Bacolod, a related party.

These advances

are in the form of prepayments for products that will ship within a short window of time.

In the event that it becomes necessary for

the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the normal course of business

and these credits are also reflected against future shipments.

of December 31, 2021, and December 31, 2020, the balance due from Bacolod for future shipments was approximately $ 1,300,000 .

No new purchases

have been made from Bacolod since November 2020.

Cost of revenue related to inventories purchased from Bacolod represented approximately

$ 0 and $ 1,280,000 of total cost of revenue for the years ended December 31, 2021 and 2020, respectively.

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

life of the asset as follows:

Schedule of Estimated Usefule Life of Assets

Furniture and fixtures

4 unchanged sentences

Trade show booth

improvements are amortized using the straight-line method over the shorter of the expected life of the improvement or the remaining

Company capitalizes expenditures for major improvements and additions and expenses those items which do not improve or extend

the useful life of the fixed assets.

RAS system is comprised of tanks, plumbing, pumps, controls, hatchery, tools and other equipment all working together for the TOBC facility.

improvements are amortized using the straight-line method over the shorter of the expected life of the improvement or the remaining lease

Company capitalizes expenditures for major improvements and additions and expenses those items which do not improve or extend the useful

life of the fixed assets.

Company reviews fixed assets for recoverability if events or changes in circumstances indicate the assets may be impaired.

December 31, 2020 and 2019, the Company believes the carrying values of its long-lived assets are recoverable and as such, the

Company did not record any impairment.

31, 2021 and 2020, the Company believes the carrying values of its long-lived assets are recoverable and as such, the Company did not

record any impairment.

Comprehensive (loss) Income

4 unchanged sentences

Currency Translation

Company’s functional and reporting currency is the U.S.

The assets and liabilities held by the Company’s

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.

Company’s functional and reporting currency is the U.S.

The assets and liabilities held by TOBC and the previous VIE from

2020 have a functional currency other than the U.S.

The TOBC results and the 2020 VIE results were translated into U.S.

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

TOBC and the 2020 VIE’s revenue and expenses were translated into

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 $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),”

and the associated

ASUs (collectively, “Topic 606”), the Company recognizes revenue when its customer obtains control of promised goods

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

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 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.

rate used in the financial statements as presented for December 31, 2021 for TOBC was 0.79 Canadian Dollars to U.S.

for December 31, 2020 for the previous VIE was 1.260 U.S.

Dollar to UK pound sterling .

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 $ 54,200

for the years ended December 31, 2021 and December

31, 2020, respectively.

Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as

such, we record revenue when our customer obtains control of the promised goods or services in an amount that reflects the consideration

which the Company expects to receive in exchange for those goods or services.

The Company’s source of revenue is from importing

blue and red swimming crab meat primarily from Mexico, 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 and steelhead salmon produced by TOBC under the brand name Little Cedar Farms for distribution in Canada.

We sell primarily to

food service distributors.

We also sell 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 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 at 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.

Consideration payable

to a customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue

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.

Consideration payable to a

customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue recognized,

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

Company recognizes deferred income for advance payments received from customers for which sales have not yet occurred.

account for our leases under ASC 842, Leases , which requires all leases to be reported on the balance sheet as right-of-use assets

and lease obligations.

We elected the practical expedients permitted under the transition guidance that retained the lease classification

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

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.

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.

We did not have any finance

leases as of December 31, 2021.

Our leases generally have terms that range from three years for equipment and six to seven years for

real 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.

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

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

Schedule of Lease-related Assets and Liabilities

Operating lease assets

Operating lease liabilities

cash flow information related to leases were as follows:

Schedule of Supplemental Cash Flow Information Related to Leases

December 31, 2021

used in operating activities:

assets recognized in exchange for lease obligations:

Cash used in operating activities:

Operating leases

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

Weighted-average

discount rate

Schedule of Remaining Lease Term and Discount Rates for Operating Leases

December 31, 2021

Weighted-average remaining lease term

Operating leases

Weighted-average discount rate

Operating leases

of lease liabilities as of December 31, 2021, were as follows:

lease payments

Schedule of Maturities of Lease Liabilities

Operating Leases

Total lease payments

amount of lease payments representing interest

value of future minimum lease payments

Present value of future minimum lease payments

current obligations under leases

Non-current obligations

Company expenses the costs of advertising as incurred.

Advertising expenses which are included in Other Operating Expenses were

approximately $7,200 and $81,700, for the years ended December 31, 2020 and 2019, respectively.

preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure

of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses

during the reporting period.

Advertising expenses which are included in Other Operating Expenses were approximately

$ 5,700 and 7,200 , for the years ended December 31, 2021 and 2020, respectively.

preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting

Actual results could differ from those estimates.

Concentration

Company had ten customers which accounted for approximately 52 %

of revenue during the year ended December 31, 2021.

One customer accounted for 24 % of revenue during the year ended December 31, 2021.

Outstanding receivables from these customers

accounted for approximately 59 %

of the total accounts receivable as of December 31, 2021.

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.

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

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

Concentration

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

December 31, 2020.

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

Value of Financial Instruments

Company had four suppliers which accounted for approximately 70 % of the Company’s total purchases during the year ended December

These four suppliers are located in the United States, Indonesia, Mexico and China, which accounted for approximately 80 % of

the Company’s total purchases during the year.

During 2021, the Company purchased inventory from one non-affiliated Mexican supplier

that made up the balance of 42 % of the supply concentration.

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

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.

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

Value Measurements and Financial Instruments

value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date and is measured using inputs in one of the following three categories:

1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we judgment.

ability to access.

Valuation of these items does not entail a significant amount of judgment.

2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar

assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value

of the assets or liabilities.

financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and debt obligations.

the carrying values of our financial instruments approximate their fair values because they are short term in nature or payable

We believe the carrying

values of our financial instruments approximate their fair values because they are short term in nature or payable on demand.

does not have any assets or liabilities that are required to be measured at fair value on a recurring basis as of December 31, 2021 and

or Loss per Share

Company accounts for earnings per share pursuant to ASC 260, Earnings per Share, which requires disclosure on the financial statements

of “basic”

and “diluted”

earnings (loss) per share.

of “basic” and “diluted” earnings (loss) per share.

Basic earnings (loss) per share are computed by dividing

net income (loss) by the weighted average number of common shares outstanding for the year.

Diluted earnings (loss) per share

is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents

(if dilutive) related to stock options and warrants for each year.

As further described in Footnote 6 - Series A Convertible Preferred

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”.

requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including

stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the

employee is required to provide service in exchange for the award, usually the vesting period.

The Company has elected to adopt

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

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

2018-07, Compensation –

Stock Based Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”),

which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic

718, with certain exceptions.

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

is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls,

is controlled by, or is under common control with the Company.

Related parties also include principal owners of the Company, its

management, members of the immediate families of principal owners of the Company and its management and other parties with which

the Company may deal if one party controls or can significantly influence the management or operating policies of the other to

an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

A party which

can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest

in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties

might be prevented from fully pursuing its own separate interests is also a related party.

of December 31, 2020, and 2019, there was approximately $392,000 and $350,900 in interest paid to related parties notes payable.

See Note 6 Debt and Note 4 Consolidation of Variable Interest Entity for further information.

Reclassifications

amounts in prior year have been reclassified to conform to the current year presentation.

to November 8, 2018, the Company was taxed under the provisions of subchapter S of the Internal Revenue Code.

Under these provisions,

the Company did not pay corporate federal income taxes on its taxable income but was liable for Florida corporate income taxes

and Texas Franchise Tax.

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

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.

assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases

of assets and liabilities, computed using enacted tax rates.

A valuation allowance, if needed, reduces deferred tax assets to

the amount expected to be realized.

As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted

through the provision for income taxes.

tax position is recognized as a benefit only if it is “more likely than not”

that the tax position would be sustained

in a tax examination, with a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit

that is greater than 50% likely of being realized on examination.

For tax positions not meeting the “more likely than not”

test, no tax benefit is recorded.

Company’s policy is to recognize interest and penalties on uncertain tax positions in “Income tax expense”

the Consolidated Statements of Operations.

There were no amounts related to interest and penalties recognized for the years ended

December 31, 2020 or 2019.

Diluted earnings (loss) per share is computed

by dividing net income (loss) by the weighted average number of common shares outstanding plus common stock equivalents (if dilutive)

related to stock options and warrants for each year.

As further described in Note 9 - Series A Convertible Preferred Stock, as of December

31, 2021, 1,413 shares of preferred stock were converted into 706,500 shares of common stock.

As further described in Notes 10 and 11

– Options and Warrants, as of December 31, 2021 and 2020, 3,431,250 and 3,280,000 options may be exercised, respectively, and 1,538,500

warrants are exercisable.

there was a net loss for the years ended December 31, 2021 and December 31, 2020, basic and diluted losses per share each year are the

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

ASC 718 requires

companies to measure the cost of services received in exchange for an award of equity instruments, including stock options, based on

the grant-date fair value of the award and to recognize it as compensation expense over the period the individual is required to provide

service in exchange for the award, usually the vesting period.

The Company has elected to adopt ASU 2016-09 and has a policy to account

for forfeitures as they occur.

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

A party is considered

to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or

is under common control with the Company.

Related parties also include principal owners of the Company, its management, members of the

immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party

controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties

might be prevented from fully pursuing its own separate interests.

A party which can significantly influence the management or operating

policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence

the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests

is also a related party.

of December 31, 2021, and 2020, there was approximately $ 143,300

and $ 392,000

in interest paid to related parties notes payable.

See Note 7 Debt for further information.

Company accounts for income taxes utilizing the liability method, where deferred tax assets and liabilities are determined based on the

expected future tax consequences of temporary differences between the carrying amounts of assets and liabilities for financial and income

tax reporting purposes, using enacted statutory tax rates in effect for the year in which the differences are expected to reverse.

effects of future changes in tax laws or rates are not included in the measurement.

Income tax expense is the total of the current year

income tax due and the change in deferred tax assets and liabilities.

Deferred tax assets and liabilities are the expected future tax

amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates.

A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

As changes in tax laws or rates

are enacted, deferred tax assets and liabilities are adjusted through the provision for income taxes.

tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in

a tax examination, with a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit that is

greater than 50% likely of being realized on examination.

For tax positions not meeting the “more likely than not” test,

no tax benefit is recorded.

Company’s policy is to recognize interest and penalties on uncertain tax positions in “Income tax expense” in the Consolidated

Statements of Operations.

There were no amounts related to interest and penalties recognized for the years ended December 31, 2021 or

Adopted Accounting Pronouncements

2 unchanged sentences

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU

2019-12”), which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain

exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020,

with early adoption permitted.

The Company is currently evaluating the impact of this standard on its consolidated financial statements

and related disclosure.

2016-13 Financial Instruments –

Credit Losses (Topic 326)

Simplifying the Accounting for Income Taxes (“ASU 2019-12”),

which is intended to simplify various aspects related to accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general

principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

This guidance is effective

for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted.

Company determined that the standard has no impact on its consolidated financial statements and related disclosures.

2016-13 Financial Instruments – Credit Losses (Topic 326)

June 2016, the FASB issued ASU No.

2 unchanged sentences

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.

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

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.

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.

On October 16, 2019, FASB voted to delay implementation of ASU No.

“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.

On November 15, 2019, FASB issued an Accounting Standard Update No.

2019-10 to amend the implementation

date to fiscal year beginning after December 15, 2022, including interim periods within those fiscal years.

Early adoption is permitted

1 unchanged sentence

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.

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

accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern.

Although the company has positive cash flow from operations for the year ended December 31, 2020, the Company incurred a net loss

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

revenues, execute on its business plan to acquire complimentary companies, raise capital, and to continue to sustain adequate

working capital to finance its operations.

The failure to achieve the necessary levels of profitability and cash flows would be

detrimental to the Company.

The consolidated financial statements do not include any adjustments that might be necessary if the

Company is unable to continue as a going concern.

Consolidation of Variable Interest Entities

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

Accumulated other comprehensive income

Non-controlling interest

Company incurred a net loss of $ 2,605,374 ,

has an accumulated deficit of $ 16,144,151

and working capital surplus of $ 2,831,718 ,

inclusive of $ 960,000

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 revenues, execute on its business plan to acquire complimentary

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

The failure to achieve the necessary

levels of profitability and cash flows would be detrimental to the Company.

The consolidated financial statements do not include any

adjustments that might be necessary if the Company is unable to continue as a going concern.

Other Current Assets

current assets totaled $ 3,702,661 and $ 176,925 for the years ended December 31, 2021 and 2020, respectively.

As of December 31, 2021,

approximately $ 3.2 million of the balance was related to prepaid inventory to our suppliers.

The remainder of the balance is related

to prepaid insurance and other prepaid expenses.

Fixed Assets, Net

assets comprised the following at December 31:

of Fixed Assets

Computer equipment

Warehouse and refrigeration equipment

Leasehold improvements

Fixed assets,

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.

Accumulated depreciation

Fixed assets, net

the years ended December 31, 2021 and 2020, depreciation expense totaled approximately $ 104,000

and $ 33,000 ,

respectively.

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

and the Company recorded a gain on the sale of

the equipment of $ 343,181 .

Goodwill and Intangible Assets, Net

following table sets for the changes in the carrying amount of the Company’s goodwill for the years ended December 31, 2021 and

Balance, January 1

Acquisition of TOBC

Balance, December 31

following table sets for the components of the Company’s intangible assets at December 31, 2021:

of Intangible Assets

Amortization Period (Years)

Accumulated Amortization

Net Book Value

Intangible Assets Subject to amortization

Trademarks – Coastal Pride

$ ( 118,050 )

Trademarks – TOBC

Customer Relationships – Coastal Pride

Customer Relationships – TOBC

Non-Compete Agreements – Coastal Pride

Non-Compete Agreements – TOBC

$ ( 784,885 )

aggregate amortization remaining on the intangible assets as of December 31, 2021 is as follows:

of Amortization of Intangible Assets

Intangible Amortization

Capital Line of Credit

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%.

& Co entered into a $ 14,000,000 revolving line of credit pursuant to a loan and security agreement 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 was secured by all assets of Keeler & Co.

This facility 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.

line of credit accrued interest at a 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 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

same rate, subject to certain defined limitations.

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

subject to certain defined limitations .

line is collateralized by substantially all the assets and property of the Company and is personally guaranteed by the stockholder

of the Company.

Company is restricted to specified distribution payments, use of funds, and is required to comply with certain other covenants

including certain financial ratios.

Company is restricted to specified distribution payments, use of funds, and is required to comply with certain other covenants including

certain financial ratios.

cash received by the Company is applied against the outstanding loan balance.

subjective acceleration clause allows ACF to call the note upon a material adverse change.

November 26, 2019, Inc.

the Company entered into the seventh amendment to the loan and security agreement with ACF.

This amendment

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

additional accounting due to the revolving line of credit remain unchanged.

of December 31, 2020, the line of credit bears interest rate of 12.48%.

of December 31, 2020, and 2019, the line of credit had an outstanding balance of approximately $1,805,000 and $6,918,000, respectively.

Company amortizes loan costs on a straight-line basis, which approximates the interest method, over the term of the credit facility.

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

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.

November 26, 2019, Keeler & Co.

entered into the seventh amendment to the loan and security agreement with ACF.

This amendment 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 $ 105,000 .

The default interest rate

increase of 3 % was implemented in April 2020.

May 7, 2020, Keeler & Co.

and Coastal Pride 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 additional

accounting due to the revolving line of credit remain unchanged.

of December 31, 2021, and 2020, the interest rate was 0 % and 12.48 %, respectively.

of December 31, 2021, and 2020, the line of credit had an outstanding balance of $ 0 and approximately $ 1,805,000 , respectively.

Company amortized loan costs on a straight-line basis, which approximates the interest method, over the term of the credit facility.

The Company added loan costs associated with the working capital lines of credit of approximately $ 70,000 for the year ended December

31, 2020, leaving balances in the asset of $ 2,992 , net of approximately $ 585,000 of accumulated amortization as of December 31, 2020.

The Company recorded amortization expense of approximately $ 72,000 for the year ended December 31, 2020.

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.

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

Financial Corp., a North Carolina corporation (“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 Borrowers.

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%),

The Borrowers paid Lighthouse a facility fee of $50,000 in three instalments of $16,667 in March, April and May 2021 and

will pay an additional facility fee of $25,000 on each anniversary of March 31, 2021.

On January 14, 2022, the maximum inventory advance

under the line of credit was adjusted from 50% to 70% until June 30, 2022, 65% to July 31, 2022, 60% to August 31, 2022 and 55% to September

30, 2022 at a monthly fee of 0.25% on the portion of the loan in excess of the 50% advance, in order to increase imports to meet customer

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.

As of December 31, 2021, the Company was in compliance

with all financial covenants under the Loan Agreement, except for the requirement to maintain a greater than $ 50,000 cash flow for the

fourth quarter of 2021 which was accepted by Lighthouse.

Borrowers utilized $ 784,450 of the Lighthouse revolving line of credit to repay the outstanding indebtedness owed to ACF as of March

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

The outstanding balance

owed to Lighthouse as of December 31, 2021 was $ 2,368,200 .

Keeler Promissory Notes – Subordinated

1 unchanged sentence

and 2020, 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 (“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.

These notes are payable on demand, bear an annual interest rate of 6 % and were subordinated to the ACF working

capital line of credit until March 31, 2021.

Since March 31, 2021, these notes are subordinated to the Lighthouse note.

The Company made

principal payments during the year ended December 31, 2021, and 2020 of $ 339,712 and approximately $ 17,000 , respectively.

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.

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 (“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

Keeler to 4,000,000 .

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.

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

The Lobo Note bears interest at the rate

of 18% per annum.

April 28, 2021, the Kenar Note was further amended to extend the maturity date to May 31, 2021.

July 6, 2021, the Company entered into a note payoff indemnity agreement with Kenar pursuant to which the Company paid Kenar $ 918,539

of principal and accrued interest in full satisfaction of the amounts due to Kenar under the Second Loan Amendment, dated April 26, 2021,

between the Company and Kenar, and the Kenar Note was extinguished, and the shares pledged by Mr.

Keeler were released.

expense for the Kenar Note totaled approximately $ 79,100 during the year ended December 31, 2021.

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, LLLP, a stockholder of the Company (“Lobo”).

The Lobo Note bears interest at the rate of 18 % per annum.

The Lobo Note may be prepaid in whole or in part without penalty.

John Keeler, the Company’s Executive

Chairman and Chief Executive Officer, pledged 1,000,000 shares of common stock of the Company to secure the Company’s obligations

under the Lobo Note.

The Lobo Note matured on August 2, 2019 and was extended through December 2, 2019 on the same terms and conditions.

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% 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.

John Keeler, the Company’s Executive Chairman and Chief Executive

Officer, pledged 1,000,000 shares of common stock of the Company to secure the Company’s obligations under the Lobo Note.

Note matured on August 2, 2019 and was extended through December 2, 2019 on the same terms and conditions .

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 accrued

interest at the rate of 15 % per annum and matured on March 31, 2020.

On April 1, 2020, the Company paid off the November 15, 2019 Lobo

Note with the issuance to Lobo of a six-month unsecured promissory note in the principal amount of $ 100,000 , which accrued interest at

the rate of 10 % per annum 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 % per annum and

matured on December 31, 2020.

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

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.

July 1, 2021, the Company paid off the January 1, 2021 Lobo note with the issuance of a three-month unsecured promissory note in the

principal amount of $ 100,000 which accrued interest at the rate of 10 % per annum and matured on September 30, 2021.

On October 1, 2021,

the Company paid off the July 1, 2021 Lobo Note with the issuance of a one-month unsecured promissory note in the principal amount of

$ 100,000 , which accrued interest at the rate of 10 % per annum and matured on November 1, 2021.

November 1, 2021, the Company paid Lobo $ 100,877 of principal and accrued interest in full satisfaction of the amounts due to Lobo under

the one-month unsecured promissory note dated October 1, 2021, between the Company and Lobo, and the Lobo Note was extinguished.

expense for the Lobo Note totaled approximately $ 8,300 during the year ended December 31, 2021.

Note – Subordinated

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.

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

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, 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.

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

by the Company during 2020.

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

expense for the Walter Lubkin Jr.

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.

note totaled approximately $ 19,700 and $ 20,100 during the years ended December 31, 2021, and 2020,

respectively.

October 8, 2021, a portion of the outstanding principal and accrued interest to date totaling $ 34,205 were paid on the note by the Company.

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 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 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.

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 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 Coastal Pride acquisition.

expense for the Walter Lubkin III note totaled approximately $ 3,300 and $ 3,500 during the years ended December 31, 2021, and 2020, respectively.

October 8, 2021, a portion of the outstanding principal and accrued interest to date totaling $ 16,257 were paid on the note by the Company.

Greco Convertible Note – Subordinated

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 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.

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.

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 –

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.

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 Tracy Greco note totaled approximately $ 2,700 and $ 2,800 during the years ended December 31, 2021, and 2020, respectively.

October 8, 2021, a portion of the outstanding principal and accrued interest to date totaling $ 13,209 were paid on the note by the Company.

Lubkin Convertible Note – Subordinated

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.

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

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.

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 $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.

expense for the John Lubkin note totaled approximately $ 1,900 and $ 2,000 during the years ended December 31, 2021, and 2020, respectively.

October 8, 2021, a portion of the outstanding principal and accrued interest to date totaling $ 9,399 were paid on the note by the Company.

Protection Program Loans

April 17, 2020, the Company received proceeds of $ 344,762 and

issued an unsecured promissory note to US Century Bank in the principal amount of $ 344,762 in

connection with the Payroll Protection Program of the CARES Act (“PPP Loan”).

The note accrues interest at 1 %

per annum, matures two years from the date of issuance and is fully guaranteed by the Small Business Administration

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

The Company is required to make monthly payments of

approximately $ 19,401 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 on November 16, 2020.

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 CARES Act Payroll Protection Program (“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

In September 2021, the Company applied for the loan forgiveness by the SBA through US Century Bank for the full amount which

was granted in October 2021 and was recognized as other income in the consolidated statement of operations for the year ended December

Business Combination

with Coastal Pride Seafood, LLC

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 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 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,

$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.

of Taste of BC Aquafarms

June 24, 2021, the Company consummated the acquisition of TOBC and TOBC became a wholly owned subsidiary of the Company.

The acquisition

was accounted for as a business combination under the provisions of ASC 805.

The aggregate purchase price of CAD$ 5,000,000 was paid as

(i) an aggregate of CAD$ 1,000,000 in cash to the Sellers;

(ii) promissory notes in the aggregate principal amount of CAD$ 200,000

to the Sellers;

(iii) 987,741 shares of the Company’s common stock and an aggregate of 344,957 shares of the Company’s common

stock were issued on August 3, 2021 and put in escrow until June 24, 2023.

If, within 24 months of the closing, TOBC has cumulative revenue

of at least CAD$ 1,300,000 , the Sellers will receive all of the escrowed shares.

If, as of the 24-month anniversary of the closing, TOBC

has cumulative revenue of less than CAD$ 1,300,000 , the Sellers will receive a prorated number of the escrowed shares based on the actual

cumulative revenue of TOBC as of such date.

transaction costs incurred in connection with the acquisition of TOBC amounted to $ 31,000 which were expensed as incurred.

Value of Consideration Transferred and Recording of Assets Acquired

following table summarizes the acquisition date fair value of the consideration paid, identifiable assets acquired, and liabilities

assumed including an amount for goodwill:

Consideration

Cash and cash equivalents

Common stock, 1,295,000 shares of BSFC

4% Unsecured promissory note

4% Unsecured, Convertible promissory

note payable to seller

The business combination accounting is not yet complete and the amounts assigned to assets acquired and liabilities assumed

are provisional.

Therefore, this may result in future adjustments to the provisional amounts as information is obtained about facts

and circumstances that existed at the acquisition date.

of Fair Value of Assets Acquired and Liabilities Assumed

Consideration Paid:

Common stock, 987,741 shares of common stock of the Company

Promissory notes to Sellers

Contingent consideration - Common stock, 344,957 shares of common stock of the Company in escrow

Fair value of total consideration

Recognized amount

of identifiable assets acquired and liabilities assumed:

Financial assets:

Cash and cash equivalents

Accounts receivables

Inventory Step Up

Prepaid and other assets

Right of Use Assets

Property and equipment

Identifiable intangible assets:

Purchase Price Allocation:

Tangible assets acquired

Customer relationships

Non-compete agreements

Financial liabilities:

Accounts payable and accrued liabilities

Right of Use Liability

Working Capital Line of Credit

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 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

to evaluate the fair value of the inventory at the time of closing.

The step up represents the net profit that would be attained

when the inventory is sold.

The key assumptions used in this analysis is a gross margin of 11.6% and selling costs of 4.4%, The

analysis resulted in a necessary step up of $105,000 at the time of closing.

represents the future economic benefit arising from other assets acquired that could not be individually identified and separately

The goodwill arising from the acquisition is attributable to the value of the potential expanded market opportunity

with new customers.

The goodwill is not expected to be deductible for tax purposes.

Liabilities assumed

Fair market value of net assets acquired

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 which was determined to be $ 2.00 , based on the Company’s private placement offering price.

assumed included three mortgage loans of approximately CAD$ 490,000 which were paid off by the Company on July 9, 2021.

The Company has

one commercial loan outstanding for CAD$ 60,000 which is due on December 31, 2025.

Forma Information

following is the unaudited pro forma information assuming all business acquisitions occurred on January 1, 2019.

For all of the

business acquisitions depreciation and amortization have been included in the calculation of the below pro forma information based

upon the actual acquisition costs.

the year ended

following pro forma information assumes the business acquisition occurred on January 1, 2020.

For all of the business acquisitions, depreciation

and amortization have been included in the calculation of the below pro forma information based upon the actual acquisition costs.

of Proforma Information

For the year ended

December 31, 2021

For the year ended

December 31, 2020

Net loss attributable to common shareholders

$ ( 3,102,683 )

Basic and Diluted

Loss per Share

Basic and Diluted

Weighted Average Common Shares Outstanding

information included in the pro forma amounts is derived from historical information obtained from the sellers of the businesses.

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 Pride.

Goodwill and Intangible Assets, Net

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, Inc.

Balance, December 31

following table sets for the components of the Company’s intangible assets at December 31, 2020:

Period (Years)

Intangible Assets Subject

to amortization

Customer Relationships

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

$ ( 4,721,865 )

Basic and diluted loss per share

information included in the pro forma amounts is derived from historical information obtained from the Sellers of the business.

Stockholders’ Equity

Board of Directors has designated 10,000 shares of preferred stock as “8% Series A Convertible Preferred Stock”.

Series A Convertible Preferred Stock (“Series A Stock”) has no maturity and is not subject to any sinking fund or

redemption and will remain outstanding indefinitely unless and until converted by the holder or the Company redeems or otherwise

repurchases the Series A Stock.

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,

validly issued, fully paid and non-assessable.

Dividends will accumulate whether or not the Company has earnings, there are funds

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

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 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.

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.

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.

Board of Directors has designated 10,000 shares of preferred stock as “ 8 % Series A Convertible Preferred Stock”.

A Convertible Preferred Stock (“Series A Stock”) has no maturity and is not subject to any sinking fund or redemption and

will remain outstanding indefinitely unless and until converted by the holder or the Company redeems or otherwise repurchases the Series

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.

of Common Stock issued in payment of a PIK Dividend will be duly authorized, validly issued, fully paid and non-assessable.

will accumulate whether or not the Company has earnings, there are funds legally available for the payment of those dividends and whether

or not those dividends are declared by the Board.

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.

On June 30 2021, all preferred shares were converted to common shares and

the Company issued an aggregate of 706,500 shares of common stock to Series A preferred shareholders upon conversion of an aggregate

1,413 shares of Series A Stock.

Company is authorized to issue 100,000,000 shares of common stock at a par value of $ .0001 and had 24,671,318 and 19,580,721 shares of

common stock issued and outstanding as of December 31, 2021 and 2020, respectively.

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:

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:

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.

July 1, 2020, the Company entered into an investment banking engagement agreement, as amended on October 30, 2020, with Newbridge Securities

In consideration for advisory services, the Company agreed to issue Newbridge a total of 60,000 shares of common stock with

a fair value of $ 138,000 which is amortized to expense over the term of the agreement.

The Company recognized stock compensation expense

of $ 69,000 for the year ended December 31, 2021 in connection with these shares.

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 fees.

February 8, 2021, the Company issued 25,000 shares of common stock with a fair value of $ 25,250 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

March 30, 2021, the Company issued 10,465 shares of common stock with a fair value of $ 24,697 to the designee of a law firm for services

provided to the Company.

March 31, 2021, the Company issued 5,000 shares of common stock with a fair value of $ 11,800 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

March 31, 2021, the Company issued 11,975 shares of common stock to Series A preferred stockholders as a common stock dividend with an

aggregate fair value of $ 28,260 for the three months e nd ed March 31, 2021.

April 15, 2021, the Company issued an aggregate of 16,460 shares of common stock to Walter Lubkin Jr., Walter Lubkin III, Tracy Greco

and John Lubkin (collectively, the “Coastal Sellers”) in lieu of $ 39,504 of outstanding interest under promissory notes issued

by the Company to the Coastal Sellers in connection with the Coastal Pride acquisition.

April 19, 2021, the Company issued 12,500 shares of common stock with a fair value of $ 25,000 to the designee of a law firm for services

provided to the Company.

April 29, 2021, the Company issued 105,757 shares of common stock to Kenar in lieu of $ 227,378 of outstanding interest under the Kenar

April 30, 2021, the Company issued 5,000 shares of common stock with a fair value of $ 28,500 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

May 31, 2021, the Company issued 5,000 shares of common stock with a fair value of $ 31,500 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

June 24, 2021, the Company issued 987,741 shares to the sellers of TOBC as partial consideration for the sale of TOBC to the Company.

June 30, 2021, the Company issued 5,000 shares of common stock with a fair value of $ 36,250 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

June 30, 2021, the Company issued 10,465 shares of common stock with a fair value of $ 75,871 to the designee of a law firm for services

provided to the Company.

June 30, 2021, the Company issued an aggregate of 706,500 shares of common stock to Series A preferred stockholders upon conversion of

an aggregate 1,413 shares of Series A preferred stock.

August 3, 2021, the Company issued 5,000 shares of common stock with a fair value of $ 30,000 to an investor relations firm for services

provided to the Company under an investor relations consulting agreement.

November 5, 2021, we issued 800,000 shares of common stock to Newbridge Securities Corporation (“Newbridge”), as underwriters’

representative, in connection with our underwritten public offering for gross proceeds of $ 4 million.

November 5, 2021 we issued a warrant to purchase an aggregate of 56,000 shares of common stock at an exercise price of $ 5.00 per share

to Newbridge.

Such warrant is exercisable on a date which is 180 days from the closing of the underwritten offering and expires on November

November 10, 2021 and December 31, 2021, the Company issued 52,326 and 18,405 shares of common stock, respectively, to Intelligent Investments

I LLC for legal services provided to the Company.

December 31, 2021, the Company issued 5,000 shares of common stock to TraDigital Marketing Group for consulting services provided to

December 31, 2021, we issued 10,992 shares of common stock to each of Nubar Herian and John Keeler, 15,107 shares of common stock to

each of Timothy McLellan and Trond Ringstad and 19,909 shares of common stock to Jeffrey Guzy for serving as directors of the Company.

the year ended December 31, 2021, we issued an aggregate of 370,750

shares of common stock to investors upon the

exercise of warrants for total proceeds of $ 882,800 .

the year ended December 31, 2021, the Company sold pursuant to subscription agreements an aggregate of 1,500,000 shares of common stock

at $ 2.00 per share and issued warrants to purchase an aggregate of 1,500,000 shares at an exercise price of $ 2.00 to various accredited

investors in private offerings for gross proceeds of $ 3 million.

the year ended December 31, 2021 and December 31, 2020, $ 549,231 and $ 139,380 , respectively, in compensation expense was recognized on

the following:

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 year ended December

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

In connection with our underwritten public offering, such shares

underlying the option are subject to a lock-up and may not be sold or otherwise transferred until May 3, 2022.

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 year ended December

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 an employee under the 2018 Plan during the year 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 year ended December 31, 2019.

options to purchase an aggregate of 500,000 shares of common stock at an exercise price of $ 2.00 , which vest in equal monthly installments

during the first year from the date of grant, were issued to the Company’s directors during the year ended December 31, 2021.

options to purchase an aggregate of 176,417 shares of common stock at an exercise price of $ 2.30 , which vest in equal quarterly installments starting on the 48th month through the 60th month

upon meeting certain performance conditions, were issued to an employee of TOBC during the year ended December 31, 2021.

options to purchase an aggregate of 7,013 shares of common stock at an exercise price of $ 6.00 , which vest in equal monthly installments

during the term of the option, were issued to an officer of the Company during the year ended December 31, 2021.

following table summarizes the assumptions used to estimate the fair value of the stock options granted for the year ended December 31,

2021 since no options were granted for the year ended December 31, 2020:

of Fair Value of Stock Options

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 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.

the Black-Scholes option pricing model, the fair value of the 683,430 options granted during the year ended December 31, 2021 was estimated

at $ 1,251,598 on the date of grant.

For the years ended December 31, 2021 and 2020, the unrecognized portion of the expense remaining

outstanding was $ 823,670 and $ 327,852 , respectively.

The weighted average period of unrecognized stock options compensation that is expected

to be recognized as expense is approximately 7 years.

During the year ended December 31, 2021, an aggregate of 85,000 shares subject

to options were forfeited, 12,500 shares were vested, which resulted in a reversal of the expense of $ 13,580 .

following table represents option activity for the years ended December 31, 2021 and 2020:

Average Exercise Price

Average Remaining Contractual Life in Years

Intrinsic Value

of Option Activity

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Life in Years

Aggregate Intrinsic Value

Outstanding - December 31, 2019

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Exercisable - December 31, 2021

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:

of Tax Expense

Current - Federal

Current - State

Deferred - Federal

Deferred - State

Income Tax Provision/(Benefit)

non-vested options outstanding are 998,431 and 530,000 for the years ended December 31, 2021 and 2020, respectively.

of Warrant Activity

Number of Warrants

Weighted Average Remaining Contractual

Aggregate Intrinsic

Outstanding – December 31, 2020

Exercisable – December 31, 2020

Forfeited or Expired

Outstanding – December 31, 2021

Exercisable – December 31, 2021

of December 31, 2021, the Company issued warrants to purchase an aggregate of 1,500,000

shares at an exercise price of $ 2.00

per share in a private offering to seventy-seven

accredited investors that expire in June 2024.

The Company also issued a warrant to purchase an aggregate of 56,000

shares of common stock at an exercise price of

per share to Newbridge.

Such warrant is exercisable

on a date which is 180 days from the closing of the offering November 5, 2021 and expires on November 5, 2024.

The Company issued

353,250 shares at an exercise price of $ 2.40 and 17,500 shares at an exercise price of $ 2.00 to investors upon the exercise of warrants.

the year ended December 31, 2020, the Company did not have any warrant activity.

income tax expense differs from the statutory federal rates of 21% for the years ended December 31, 2021 and 2020 due to the following:

Reconciliation

Provision/(Benefit) at Statutory

of Rate Reconciliation

Rate Reconciliation

December 31, 2021

December 31, 2020

Provision/(Benefit) at Statutory Rate

$ ( 557,193 )

State Tax Provision/(Benefit) net of

federal benefit

$ ( 931,861 )

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, 2021 and 2020, are as follows:

of Deferred Income Tax Assets

Deferred Tax Assets

Charitable Contribution

Charitable Contribution Carryforward

Inventory Reserve

Business Interest

Business Interest Limitation

Stock based compensation

Federal Net Operating

Net Operating Loss

Total Deferred Tax

Deferred Tax Asset/(Liability)

Federal Net Operating loss

State Net Operating Loss

Net Deferred Tax Asset/(Liability)

Valuation Allowance

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.

( 1,535,310 )

( 2,504,807 )

Net Deferred Tax Asset/(Liability)

periods for all fiscal years after 2018 remain open to examination by the federal and state taxing jurisdictions to which the Company

As of December 31, 2021, the Company has federal net operating loss of $ 3,054,257 to carry forward indefinitely.

740, “Income Taxes”

requires that a valuation allowance be established when it is “more likely than not”

that all, or a portion of, deferred tax assets will not be recognized.

A review of all available positive and negative evidence

needs to be considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax

planning strategies.

After consideration of all the information available, management believes that uncertainty exists with respect

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

740, “Income Taxes” requires that a valuation allowance be established when it is “more likely than not” that

all, or a portion of, deferred tax assets will not be recognized.

A review of all available positive and negative evidence needs to be

considered, including the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies.

After consideration of all the information available, management believes that uncertainty exists with respect to future realization

of its deferred tax assets and has, therefore, established a full valuation allowance as of December 31, 2021.

of December 31, 2021, and 2020, the Company has evaluated and concluded that there were no material uncertain tax positions requiring

recognition in the Company’s financial statements.

The Company’s policy is to classify assessments, if any, for tax

related interest as income tax expenses.

recognition in the Company’s financial statements.

The Company’s policy is to classify assessments, if any, for tax related

interest as income tax expenses.

No interest or penalties were recorded during the years ended December 31, 2021, and 2020.

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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 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.

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.

Therefore, 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 .

In connection with the sale, the Company retained

approximately 4,756 square

feet of such space, rent-free for 12 months.

On January 1, 2022, the Company entered into a verbal month-to-month lease agreement for

its executive offices with an unrelated third party.

The Company has paid $ 11,600

to date under this lease.

Company leases approximately 1,100

square feet in Beaufort South Carolina for

the offices of Coastal Pride.

This office space consists of two leases with related parties that expire 2024.

On February 3, 2022, in

connection with the acquisition of certain assets of Gault, the Company entered into a one -year lease agreement for 9,050 square

feet from Gault in Beaufort, South Carolina for $ 1,000

per month until a new facility is completed.

facilities are on land leased to TOBC for approximately $ 2,500

per month plus taxes from Steve and Janet Atkinson,

the former TOBC owners that expired in December 2021.

As of March 31, 2022, renewal of this lease has not been finalized and no rent

payments have been made.

and equipment lease expenses were approximately $ 63,500 and $ 239,600 for the years ended December 31, 2021 and 2020, respectively.

Company has reached a settlement agreement with a former employee.

has reached a settlement agreement with a former employee.

Although the agreement is not finalized the Company has reserved $ 70,000 ,

for the entire amount of the settlement.

representing the entire amount of the settlement.

COVID-19 Pandemic

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President declared a National Emergency concerning the disease.

Additionally, in March 2020, state governments

in the Company’s geographic operating area began instituting preventative shut down measures in order to combat the novel

coronavirus pandemic.

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 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 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.

Additionally, in March 2020, state governments in the

Company’s geographic operating area began instituting preventative shut down measures in order to combat the novel coronavirus

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 areas in which the Company operates.

On March 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 for 2020 and into 2021.

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

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.

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.

By the end of 2021, the U.S.

government has made available a booster of the COVID-19 vaccine to continue the fight against the pandemic.

The Company’s sales and supply 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

Company provides and sponsors a 401(k) plan for its employees.

For the years ended December 31, 2020 and 2019, no contributions

were made to the plan by the Company.

For the years ended December 31, 2021 and 2020, no contributions were

made to the plan by the Company.

Subsequent Events

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.

January 24, 2022, the Company issued a total of 125,000 shares of common stock to investors upon the exercise of warrants for total proceeds

of $ 250,000 .

Seafood Asset Acquisition

February 3, 2022, Coastal Pride entered into an asset purchase agreement with Gault Seafood, LLC, a South Carolina limited liability

company (the “Seller”), and Robert J.

Gault II, President of the Seller (“Gault”) pursuant to which Coastal Pride

acquired all of the Seller’s right, title and interest in and to assets relating to the Seller’s soft shell crab operations,

including intellectual property, equipment, vehicles and other assets used in connection with the Business.

Coastal Pride did not assume

any liabilities in connection with the acquisition.

The purchase price for the assets consisted of cash in the amount of $ 359,250 and

the issuance of 167,093 shares of common stock of the Company with a fair value of $ 359,250 .

Such shares are subject to a leak-out agreement

pursuant to which the Seller may not sell or otherwise transfer the shares until February 3, 2023.

Pride also entered into a consulting agreement with Gault under the terms of which Gault will provide consulting services to Coastal

Pride at the rate of $ 100 per hour, however, the first 45 days of services will be provided at no cost.

Gault also agreed not to compete

with Coastal Pride and its affiliates for a period of five years in any market in which Coastal Pride is operating or is considering

operating or solicit employees, consultants, customers or suppliers or in any way interfere with Coastal Pride’s business relationships

for a five-year period, Gault is also bound by customary confidentiality provisions.

The consulting agreement may be terminated by either

party upon five days written notice and by Costal Pride immediately for cause.

connection with the asset acquisition, Coastal Pride will lease 9,050 square feet from Gault for $ 1,000

per month under a one-year lease agreement and

will continue to operate the acquired soft shell crab operations at such location in Beaufort, South Carolina unless a new facility is

earlier completed.

January 1, 2022, the Company entered into a verbal month-to-month lease agreement for its executive offices with an unrelated third party.

The Company has paid $ 11,600

to date on this lease.

and Greco Notes – Subordinated

February 1, 2022, principal outstanding amounts and accrued interest of up to $ 66,553 under the subordinated note with Walter Lubkin

Jr., and the subordinated convertible notes with Walter Lubkin III, Tracy Greco and John Lubkin were paid off by the Company.

Global Fund II LP investment

January 24, 2022, we entered into a securities purchase agreement with Lind Global Fund II LP, a Delaware limited partnership (“Lind”),

pursuant to which the Company issued to Lind a secured, two-year, interest free convertible promissory note in the principal amount of

$ 5,750,000 and a five-year warrant to purchase 1,000,000 shares of common stock of the Company at an exercise price of $ 4.50 per share,

subject to customary adjustments.

The warrant provides for cashless exercise and for full ratchet anti-dilution if the Company issues

securities at less than $ 4.50 per share.

In connection with the issuance of the note and the warrant, the Company paid a $ 150,000 commitment

outstanding principal under the note is payable commencing July 24, 2022, in 18 consecutive monthly installments of $ 333,333 , at the

Company’s option, in cash or shares of common stock at a price (the “Repayment Share Price”) based on 90% of the five

lowest volume weighted average prices (“VWAP”) during the 20-days prior to the payment date with a floor price of $ 1.50 per

share (the “Floor Price”), or a combination of cash and stock provided that if at any time the Repayment Share Price is deemed

to be the Floor Price, then in addition to

the Company will pay Lind an additional amount in cash as determined pursuant to a formula contained in the note.

connection with the issuance of the note, the Company granted Lind a first priority security interest and lien on all of its assets,

including a pledge on its shares in John Keeler & Co.

Inc., its wholly-owned subsidiary, pursuant to a security agreement and a stock

pledge agreement with Lind, dated January 24, 2022.

Each subsidiary of the Company also granted a second priority security interest in

all of its respective assets.

note is mandatorily payable prior to maturity if the Company issues any preferred stock (with certain exceptions described in the note)

or, if the Company or its subsidiaries issues any indebtedness other than certain amounts under the current line of credit facility with

Lighthouse Financial Corp.

The Company also agreed not to issue or sell any securities with a conversion, exercise or other price based

on a discount to the trading prices of the Company’s stock or to grant an investor the right to receive additional securities based

on future transactions of the Company on terms more favorable than those granted to Lind, with certain exceptions.

on the earlier of July 24, 2022 or the effectiveness of the registration statement covering Lind’s shares, if the Company fails

to maintain the listing and trading of its common stock, the note will become due and payable and Lind may convert all or a portion of

the outstanding principal at the lower of the then current conversion price and 80 % of the average of the 3-day VWAP during the 20 days

prior to delivery of the conversion notice.

a resale registration statement is not effective covering the shares of common stock issuable to Lind in 180 days following January 24,

2022, the note will be in default.

Lind was also granted piggyback registration rights.

the Company engages in capital raising transactions, Lind has the right to purchase up to 10 % of the new securities.

note is convertible into common stock at $ 5.00 per share, subject to certain adjustments, at any time after the earlier of six months

from issuance or the date the registration statement is effective;

provided that no such conversion may be made that would result in

beneficial ownership by Lind and its affiliates of more than 4.99 % of the Company’s outstanding shares of common stock.

are issued by the Company at less than the conversion price, the conversion price will be reduced to such price.

a change of control of the Company, as defined in the note, Lind has the right to require the Company to prepay 10 % of the outstanding

principal amount of the note.

Company may prepay the outstanding principal amount of the note, provided Lind may convert up to 25 % of the principal amount of the note

at a price per share equal to the lesser of the Repayment Share Price or the conversion price.

Note contains certain negative covenants, including restricting the Company from certain distributions, stock repurchases, borrowing,

sale of assets, loans and exchange offers.

an event of default as described in the note, the note will become immediately due and payable at a default interest rate of 125 % of

the then outstanding principal amount.

Upon a default, all or a portion of the outstanding principal amount may be converted into shares

of common stock by Lind at the lower of the conversion price and 80 % of the average of the three lowest daily VWAPs.

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