Blue Star Foods Corp. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Blue Star Foods Corp. Index to Audited Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID No. 206 ) F-1 Consolidated Balance Sheets as of December 31, 2023 and 2022 F-2 Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022 F-3 Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022 F-4 Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 F-5 Notes to Consolidated Financial Statements F-6 41 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2023 and 2022, 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, 2023 and 2022, 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 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. 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. 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 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. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters /s/ MaloneBailey, LLP www.malonebailey.com We have served as the Company’s auditor since 2014. Houston, Texas April 1, 2024 F- 1 Blue Star Foods Corp. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 DECEMBER 31, 2022 ASSETS CURRENT ASSETS Cash and cash equivalents $ 24,163 $ 9,262 Accounts receivable, net of allowances and credit losses of $ 31,064 and $ 22,725 534,195 813,416 Inventory, net 2,608,521 4,808,152 Advances to related party 95,525 218,525 Other current assets 833,472 671,933 Total Current Assets 4,095,876 6,521,288 RELATED PARTY LONG-TERM RECEIVABLE 435,545 435,545 FIXED ASSETS, net 303,857 120,400 RIGHT OF USE ASSET 125,014 197,540 ADVANCES TO RELATED PARTY 1,299,984 1,299,984 OTHER ASSETS 102,222 103,720 TOTAL ASSETS $ 6,362,498 $ 8,678,477 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES Accounts payable and accruals $ 661,377 $ 2,401,243 Customer refunds 189,975 - Working capital line of credit - 1,776,068 Deferred income 47,819 47,078 Current maturities of long-term debt, net of discounts - 3,439,557 Current maturities of lease liabilities 35,428 57,329 Current maturities of related party long-term notes 100,000 100,000 Loan payable 156,938 29,413 Related party notes payable - subordinated 165,620 893,000 Derivative liability 1,047,049 - Warrants liability 1,574 - Other current liabilities 790,881 790,881 Total Current Liabilities 3,196,661 9,534,569 LONG-TERM LIABILITIES Lease liability, net of current portion 89,586 139,631 Debt, net of current portion and discounts 481,329 - Related party notes, net of current portion - 250,000 TOTAL LIABILITIES 3,767,576 9,924,200 STOCKHOLDERS’ EQUITY Series A 8 % cumulative convertible preferred stock, $ 0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding as of December 31, 2023, and 0 shares issued and outstanding as of December 31, 2022 - - Common stock, $ 0.0001 par value, 100,000,000 shares authorized; 23,086,077 shares issued and outstanding as of December 31, 2023, and 1,338,321 shares issued and outstanding as of December 31, 2022 2,324 134 Additional paid-in capital 36,659,648 28,329,116 Accumulated other comprehensive loss ( 179,995 ) ( 235,853 ) Accumulated deficit ( 33,810,732 ) ( 29,339,120 ) Treasury stock, 7,564 shares as of December 31, 2023 and 0 shares as of December 31, 2022 ( 76,323 ) - TOTAL STOCKHOLDERS’ EQUITY (DEFICIT) 2,594,922 ( 1,245,723 ) TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 6,362,498 $ 8,678,477 The accompanying notes are an integral part of these audited consolidated financial statements F- 2 Blue Star Foods Corp. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 2023 2022 Year Ended December 31 2023 2022 REVENUE, NET $ 6,124,529 $ 12,767,145 COST OF REVENUE 5,966,452 13,419,133 GROSS PROFIT (LOSS) 158,077 ( 651,988 ) COMMISSIONS 2,169 24,482 SALARIES AND WAGES 1,858,004 2,032,457 DEPRECIATION AND AMORTIZATION 4,521 584,386 IMPAIRMENT LOSS - 5,797,906 OTHER OPERATING EXPENSES 2,525,661 2,522,764 LOSS FROM OPERATIONS ( 4,232,278 ) ( 11,613,983 ) OTHER INCOME 12,708 154,196 LOSS ON SETTLEMENT OF DEBT ( 977,188 ) ( 57,085 ) CHANGE IN FAIR VALUE OF DERIVATIVE AND WARRANT LIABILITIES 2,497,088 - INTEREST EXPENSE ( 1,771,942 ) ( 1,678,097 ) NET LOSS ( 4,471,612 ) ( 13,194,969 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 4,471,612 ) $ ( 13,194,969 ) COMPREHENSIVE LOSS: CHANGE IN FOREIGN CURRENCY TRANSLATION ADJUSTMENT 55,858 ( 181,613 ) COMPREHENSIVE LOSS ( 4,415,754 ) ( 13,376,582 ) Loss per common share: Net loss per common share - basic and diluted $ ( 0.88 ) $ ( 0.52 ) Weighted average common shares outstanding - basic and diluted 5,082,500 25,158,555 The accompanying notes are an integral part of these audited consolidated financial statements F- 3 Blue Star Foods Corp. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY YEAR ENDED DECEMBER 31, 2023 AND 2022 Shares Amount Shares Amount Capital Deficit Loss (Deficit) Series A Preferred Stock $.0001 par value Common Stock $0.0001 par value Additional Paid-in Accumulated Accumulated Other Comprehensive Treasury Total Stockholder’s Equity Shares Amount Shares Amount Capital Deficit Loss Stock (Deficit) December 31, 2021 - $ - 1,233,566 $ 123 $ 25,105,236 $ ( 16,144,151 ) $ ( 54,240 ) $ - $ 8,906,968 Stock based compensation - - - - 187,385 - - - 187,385 Warrants issued on long-term debt - - - - 1,035,253 - - - 1,035,253 Common stock issued for service - - 34,788 4 667,994 - - - 667,998 Common stock issued for asset acquisition - - 8,355 1 359,249 - - - 359,250 Common stock issued from exercise of warrants - - 6,250 1 249,999 - - - 250,000 Common stock issued for note payment - - 33,333 3 547,774 - - - 547,777 Common stock issued to settle related party notes payable and accrued interest - - 22,029 2 176,226 - - - 176,228 Net Loss - - - - - ( 13,194,969 ) - - ( 13,194,969 ) Cumulative translation adjustment - - - - - - ( 181,613 ) - ( 181,613 ) December 31, 2022 - - 1,338,321 134 28,329,116 ( 29,339,120 ) ( 235,853 ) - ( 1,245,723 ) Balance - - 1,338,321 134 28,329,116 ( 29,339,120 ) ( 235,853 ) - ( 1,245,723 ) Stock based compensation - - - - 69,125 - - - 69,125 Common stock issued for service - - 2,078,672 224 476,839 - - - 477,063 Common stock issued for note payment - - 1,379,211 138 3,052,950 - - - 3,053,088 Common stock issued for cash and exercise for warrants - - 12,595,429 1,260 3,912,186 - - - 3,913,446 Common stock issued to settle related party notes payable - - 1,736,111 173 249,827 - - - 250,000 Common stock issued to settle subordinated related party note - - 3,958,333 395 569,605 - - - 570,000 Treasury Stock - - - - - - - ( 76,323 ) ( 76,323 ) Net Loss - - - - - ( 4,471,612 ) - - ( 4,471,612 ) Cumulative translation adjustment - - - - - - 55,858 - 55,858 December 31, 2023 - $ - 23,086,077 2,324 $ 36,659,648 $ ( 33,810,732 ) $ ( 179,995 ) $ ( 76,323 ) $ 2,594,922 Balance - - 23,086,077 2,324 36,659,648 ( 33,810,732 ) ( 179,995 ) ( 76,323 ) 2,594,922 The accompanying notes are an integral part of these audited consolidated financial statements F- 4 Blue Star Foods Corp. CONSOLIDATED STATEMENTS OF CASH FLOWS 2023 2022 Year Ended December 31 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net Loss $ ( 4,471,612 ) $ ( 13,194,969 ) Adjustments to reconcile net loss to net cash (used in) operating activities: Stock based compensation 69,125 187,385 Common stock issued for service 319,083 667,998 Impairment of goodwill - 1,244,309 Impairment of intangible assets - 2,679,978 Impairment of fixed assets - 1,873,619 Depreciation of fixed assets 4,521 231,465 Amortization of intangible assets - 315,420 Amortization of debt discounts 868,954 1,416,120 Allowance for inventory obsolescence 176,000 - Loss on settlement of debt 977,188 - Lease expense 72,526 58,723 Write down of inventory - 743,218 Bad debt expense - 405 Credit loss expense 8,340 - Gain on revaluation of fair value of derivative and warrant liabilities ( 2,497,088 ) - Changes in operating assets and liabilities: Accounts receivables 270,881 417,360 Inventories 2,023,631 ( 3,431,929 ) Advances to related parties 123,000 ( 95,759 ) Other current assets 140,290 3,030,728 Right of use liability ( 71,946 ) ( 58,867 ) Other assets 4,467 1,922 Accounts payable and accruals ( 1,737,997 ) 620,167 Customer refunds 189,975 - Deferred income - ( 62,336 ) Other current liabilities - ( 263,768 ) Net Cash (Used in) Operating Activities ( 3,530,662 ) ( 3,618,811 ) CASH FLOWS FROM INVESTING ACTIVITIES: Net cash paid for acquisition - ( 398,482 ) Purchases of fixed assets ( 159,609 ) ( 296,793 ) Net Cash (Used in) Investing Activities ( 159,609 ) ( 695,275 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from common stock offering 1,799,506 - Proceeds from common stock offering – prefunded warrants 4,678,924 - Proceeds from common stock warrants exercised - 250,000 Proceeds from working capital line of credit 2,405,034 12,552,008 Proceeds from short-term loan 700,000 - Proceeds from convertible debt 1,140,000 4,762,855 Repayments of working capital line of credit ( 4,182,971 ) ( 13,144,141 ) Repayments of short-term loan ( 623,000 ) - Principal payments of convertible debt ( 2,007,435 ) ( 1,118,888 ) Repayments of related party notes payable ( 157,380 ) ( 201,434 ) Purchase of treasury stock ( 76,323 ) - Payment of loan costs - ( 25,000 ) Net Cash Provided by Financing Activities 3,676,355 3,075,400 Effect of Exchange Rate Changes on Cash 28,817 92,435 NET INCREASE IN CASH AND CASH EQUIVALENTS 14,901 ( 1,146,251 ) CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD 9,262 1,155,513 CASH AND CASH EQUIVALENTS – END OF PERIOD $ 24,163 $ 9,262 Supplemental Disclosure of Cash Flow Information Cash paid for interest $ 923,992 $ 306,045 SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES Common stock issued to settle related party notes payable and accrued interest 250,000 176,228 Operating lease assets recognized in exchange for operating lease liabilities - 185,135 Warrants issued for convertible debt - 1,035,253 Common stock issued for asset acquisition - 359,250 Common stock issued for partial settlement of note payable 3,053,088 547,777 Derivative liability recognized on issuance of convertible note 383,672 - Warrant liability recognized on issuance of convertible note 453,746 - Common stock issued to settle subordinated related party note 570,000 - The accompanying notes are an integral part of these audited consolidated financial statements F- 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2023 and 2022 Note 1. Company Overview Blue 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 and rainbow trout fingerlings produced under the brand name Little Cedar Farms for distribution in Canada. On February 3, 2022, Coastal Pride entered into an asset purchase agreement with Gault Seafood, LLC, a South Carolina limited liability company (“Gault Seafood”), and Robert J. Gault II, President of Gault Seafood (“Gault”) pursuant to which Coastal Pride acquired all of the Seller’s right, title and interest in and to assets relating to Gault Seafood’s soft-shell crab operations, including intellectual property, equipment, vehicles and other assets used in connection with the soft-shell crab business. Coastal Pride did not assume any liabilities in connection with the acquisition. The purchase price for the assets consisted of a cash payment in the amount of $ 359,250 and the issuance of 8,355 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 Gault Seafood may not sell or otherwise transfer the shares until February 3, 2023. On June 9, 2023, the Company amended its Certificate of Incorporation to affect a one-for-twenty reverse stock split (“Reverse Stock Split”), which became effective on June 21, 2023. All share and per share amounts have been restated for all periods presented to reflect the Reverse Stock Split. Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying financial statements of the Company were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of the Company, Keeler & Co, Inc. a wholly owned subsidiary, Coastal Pride Seafood, LLC (“Coastal Pride”), a wholly owned subsidiary of Keeler & Co., Inc. and Taste of BC Aquafarms, Inc. (“TOBC”), a wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. Goodwill and Other Intangible Assets The Company accounts for business combinations under the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” where the total purchase price is allocated to the tangible and identified intangible assets acquired and liabilities assumed based on their estimated fair values. The purchase price is allocated using the information currently available, and may be adjusted, up to one year from acquisition date, after obtaining more information regarding, among other things, asset valuations, liabilities assumed, and revisions to preliminary estimates. The purchase price in excess of the fair value of the tangible and identified intangible assets acquired less liabilities assumed is recognized as goodwill. The Company reviews its 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. No impairment was recognized for the year ended December 31, 2023. An impairment of $ 1,244,309 related to Coastal Pride and TOBC was recognized for the year ended December 31, 2022. F- 6 Long-lived Assets Management 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. Fair value estimates are completed using a discounted cash flow analysis. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. No impairment was recognized for the year ended December 31, 2023. An impairment loss on customer relationships, trademarks, non-compete agreements and fixed assets of $ 1,595,677 , $ 1,006,185 , $ 78,116 and $ 1,873,619 , respectively, related to Coastal Pride and TOBC was recognized for the year ended December 31, 2022. Cash and Cash Equivalents The Company maintains cash balances with financial institutions in excess of Federal Deposit Insurance Company (“FDIC”) insured limits. The Company has not experienced any losses on such accounts and believes it does not have a significant exposure. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of December 31, 2023 and 2022, the Company had no cash equivalents. The Company considers any cash balance in the lender designated cash collateral account as restricted cash. 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. Accounts Receivable Accounts 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. Allowances 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. Receivables 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, 2023, and 2022, the Company recorded sales return, allowances, discounts and refund liability of approximately $ 265,700 and $ 94,000 , respectively. There was no allowance for bad debt recorded during the years ended December 31, 2023 and 2022. Inventories Substantially 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 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. Inventory 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. Merchandise is purchased cost and freight shipping point and becomes the Company’s asset and liability upon leaving the suppliers’ warehouse. The 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. Inventory write-downs are charged to cost of goods sold. The Company recorded an inventory allowance of $ 176,000 for the year ended December 31, 2023. F- 7 The Company’s inventory as of December 31, 2023 and December 31, 2022 consists of: Schedule of Inventory December 31, 2023 December 31, 2022 Inventory purchased for resale $ 1,708,311 $ 3,052,518 Feeds and eggs processed 102,373 156,984 In-transit inventory 973,837 1,598,650 Less: Inventory allowance ( 176,000 ) - Inventory, net $ 2,608,521 $ 4,808,152 Advances to Suppliers and Related Party In 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. As of December 31, 2023, and December 31, 2022, the balance due from Bacolod for future shipments was approximately $ 1,300,000 . No new purchases have been made from Bacolod since November 2020. There was no cost of revenue related to inventories purchased from Bacolod recorded for the years ended December 31, 2023 and 2022. Fixed Assets Fixed 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 RAS System 10 years Furniture and fixtures 7 to 10 years Computer equipment 5 years Warehouse and refrigeration equipment 10 years Leasehold improvements 7 years Automobile 5 years Trade show booth 7 years The RAS system is comprised of tanks, plumbing, pumps, controls, hatchery, tools and other equipment all working together for the TOBC facility. Leasehold improvements are amortized using the straight-line method over the shorter of the expected life of the improvement or the remaining lease term. The 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. The Company reviews fixed assets for recoverability if events or changes in circumstances indicate the assets may be impaired. No impairment was recorded related to fixed assets as of December 31, 2023. For the year ended December 31, 2022, an impairment was recorded related to Coastal Pride and TOBC’s fixed assets of $ 1,873,619 . Other Comprehensive (loss) Income The Company reports its comprehensive (loss) income in accordance with ASC 220, Comprehensive Income , which establishes standards for reporting and presenting comprehensive (loss) income and its components in a full set of financial statements. Other comprehensive (loss) income consists of net income (loss) and cumulative foreign currency translation adjustments. F- 8 Foreign Currency Translation The Company manages its exposure to fluctuations in foreign currency exchange rates through its normal operating activities. Its primary focus is to monitor exposure to, and manage, the economic foreign currency exchange risks faced by, its operations and realized when the Company exchanges one currency for another. The Company’s operations primarily utilize the U.S. dollar and Canadian dollar as its functional currencies. Movements in foreign currency exchange rates affect its financial statements. The assets and liabilities held by TOBC have a functional currency other than the U.S. Dollar. The TOBC results were translated into U.S. Dollars at exchange rates in effect at the end of each reporting period. TOBC’s revenue and expenses were translated into U.S. Dollars at the average rates that prevailed during the period. The rate used in the financial statements for TOBC as presented for December 31, 2023 was 0.74 Canadian Dollars to U.S. Dollars and for December 31, 2022 was 0.80 Canadian Dollars to U.S. Dollars . 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 $ 55,900 and $ 60,100 for the years ended December 31, 2023 and December 31, 2022, respectively. Revenue Recognition The 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 and rainbow trout fingerlings produced by TOBC under the brand name Little Cedar Farms for distribution in Canada. We sell primarily to food service distributors. The Company also sells its products to wholesalers, retail establishments and seafood distributors. To 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. The 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. Deferred Income The Company recognizes deferred income for advance payments received from customers for which sales have not yet occurred. Lease Accounting The Company accounts for its leases under ASC 842, Leases , which requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. The Company 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. F- 9 The Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow the Company 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. The Company did not have any finance leases as of December 31, 2023. The Company’s leases generally have terms that range from three years for equipment and six to seven years for real property. The Company elected the accounting policy to include both the lease and non-lease components of its agreements as a single component and accounts for them as a lease. 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. When the Company has 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 the Company will exercise the option, it considers 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. The table below presents the lease-related assets and liabilities recorded on the balance sheet as of December 31, 2023. Schedule of Lease-related Assets and Liabilities December 31, 2023 Assets Operating lease assets $ 125,014 Liabilities Current $ 35,428 Operating lease liabilities Noncurrent Operating lease liabilities $ 89,586 Supplemental cash flow information related to leases were as follows: Schedule of Supplemental Cash Flow Information Related to Leases Year Ended December 31, 2023 Cash used in operating activities: Operating leases $ 72,526 ROU assets recognized in exchange for lease obligations: Operating leases $ - The table below presents the remaining lease term and discount rates for operating leases. Schedule of Remaining Lease Term and Discount Rates for Operating Leases December 31, 2023 Weighted-average remaining lease term Operating leases 3.25 years Weighted-average discount rate Operating leases 7.3 % F- 10 Maturities of lease liabilities as of December 31, 2023, were as follows: Schedule of Maturities of Lease Liabilities Operating Leases 2024 $ 44,456 2025 44,456 2026 44,456 2027 11,117 2028 - Total lease payments $ 144,485 Less: amount of lease payments representing interest ( 19,471 ) Present value of future minimum lease payments $ 125,014 Less: current obligations under leases $ ( 35,428 ) Non-current obligations $ 89,586 Advertising The Company expenses the costs of advertising as incurred. Advertising expenses which are included in Other Operating Expenses were approximately $ 4,500 and $ 5,400 , for the years ended December 31, 2023 and 2022, respectively. Use of Estimates The preparation of financial statements in conformity with U.S. 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. Actual results could differ from those estimates. Customer Concentration The Company had sixteen customers which accounted for approximately 52 % of revenue during the year ended December 31, 2023. Two customers accounted for 22 % of revenue during the year ended December 31, 2023. The Company had nine customers which accounted for approximately 59 % of revenue during the year ended December 31, 2022. One customer accounted for 36 % of revenue during the year ended December 31, 2022. The loss of any major customer could have a material adverse impact on the Company’s results of operations, cash flows and financial position. Supplier Concentration The Company had four major suppliers located in the United States, Canada and China which accounted for approximately 82 % of the Company’s total purchases during the year ended December 31, 2023. The Company’s largest supplier is located in Miami and accounted for 35 % of the Company’s total purchases in the year ended December 31, 2023. The Company had five major suppliers located in the United States, Indonesia, Vietnam and China which accounted for approximately 76 % of the Company’s total purchases during the year ended December 31, 2022. The Company’s largest supplier is located in Indonesia and accounted for 29 % of the Company’s total purchases in the year ended December 31, 2022. The loss of any major supplier could have a material adverse impact on the Company’s results of operations, cash flows and financial position. F- 11 Fair Value Measurements and Financial Instruments Fair 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: Level 1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. Level 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. Level 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. The Company’s financial instruments include cash, accounts receivable, accounts payable, accrued expenses, debt obligations, derivative liabilities and warrant liabilities. The Company believes the carrying values of cash, accounts receivable, accounts payable and accrued expenses approximate their fair values because they are short term in nature or payable on demand. The derivative liability is the embedded conversion feature on the 2023 Lind convertible note. All derivatives and warrant liabilities are recorded at fair value. The change in fair value for derivatives and warrants liabilities is recognized in earnings. The Company’s derivative and warrant liabilities are measured at fair value on a recurring basis as of December 31, 2023. The Company does not have any assets or liabilities that are required to be measured at fair value on a recurring basis as of December 31, 2022. Schedule of Derivative and Warrant Liabilities Measured at Fair Value Fair Value Level 1 Level 2 Level 3 December 31, 2023 Fair Value Measurement using Fair Value Hierarchy Fair Value Level 1 Level 2 Level 3 Liabilities Derivative liability on convertible debt $ 1,047,049 $ - $ - $ 1,047,049 Warrant liability 1,574 - - 1,574 Total $ 1,048,623 $ - $ - $ 1,048,623 The table below presents the change in the fair value of the derivative liability convertible debt and warrant liability for the year ended December 31, 2023: Derivative liability balance, January 1, 2023 - Issuance of derivative liability during the period 383,672 Change in derivative liability during the period 663,377 Derivative liability balance, December 31, 2023 $ 1,047,049 Warrant liability balance, January 1, 2023 - Issuance of warrant liability during the period 5,032,025 Settlement of warrant liability (1,869,986 ) Change in warrant liability during the period ( 3,160,465 ) Warrant liability balance, December 31, 2023 $ 1,574 Earnings or Loss per Share The 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. 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, warrants and convertible notes for each year. For the years ended December 31, 2023 and 2022, the following common stock equivalents were excluded from the calculation of diluted earnings per share as their impact would be anti-dilutive due to the Company’s net loss. Schedule of anti dilutive earnings or loss per share Year ended December 31, 2023 Year ended December 31, 2022 Options $ 316,540 $ 223,076 Warrants 730,944 120,675 Convertible Notes 11,708,483 - Total $ 12,755,967 $ 343,751 Stock-Based Compensation 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 accounts for forfeitures as they occur. F- 12 Related Parties The 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. As of December 31, 2023, and 2022, there was approximately $ 83,000 and $ 67,000 , respectively, in interest paid to related parties notes payable. Income Taxes The 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. The 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. A 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. The 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, 2023 or 2022. Recent Accounting Pronouncements ASU 2016-13 Financial Instruments – Credit Losses (Topic 326) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires entities to use a forward-looking, expected loss model to estimate credit losses. It also requires entities to consider additional disclosures related to credit quality of trade and other receivables, including information related to management’s estimate of credit allowances. ASU 2016-13 was further amended in November 2018 by ASU 2018-19, Codification Improvements to Topic 236, Financial Instrument-Credit Losses. For public business entities that are Securities and Exchange Commission filers excluding smaller reporting companies, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. For all other public business entities, the amendments are effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. On October 16, 2019, FASB voted to delay implementation of ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326) - Measurement of Credit Losses on Financial Instruments.” For all other entities, the amendments are now effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. 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 for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company adopted this ASU related to its trade receivables on January 1, 2023 and determined there was no material impact from the adoption of the ASU on the Company’s consolidated financial statements. F- 13 Note 3. Going Concern The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. The Company incurred a net loss of $ 4,471,612 , has an accumulated deficit of $ 33,810,732 and working capital surplus of $ 899,215 , inclusive of $ 165,620 in subordinated stockholder debt. These factors 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. Note 4. Other Current Assets Other current assets totaled $ 833,472 and $ 671,933 for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, approximately $ 136,000 and $ 158,000 of the balance was related to prepaid inventory to the Company’s suppliers and prepaid legal fees, respectively. The remainder of the balance was related to prepaid insurance and other prepaid expenses. Note 5. Fixed Assets, Net Fixed assets comprised the following at December 31: Schedule of Fixed Assets 2023 2022 Computer equipment $ 47,908 $ 97,624 RAS system 140,214 2,089,909 Automobiles - 122,715 Leasehold improvements 17,904 89,055 Building improvements 136,653 - Total 342,679 2,399,303 Less: Accumulated depreciation and impairment ( 38,822 ) ( 2,278,903 ) Fixed assets, net $ 303,857 $ 120,400 For the years ended December 31, 2023 and 2022, depreciation expense totaled approximately $ 4,500 and $ 231,000 , respectively. Note 6. Goodwill and Intangible Assets, Net The following table sets forth the changes in the carrying amount of the Company’s goodwill for the year ended December 31, 2022. No goodwill and intangible assets were recognized for the year ended December 31, 2023. Schedule of Goodwill 2022 Balance, January 1 $ 445,395 Acquisition of TOBC 836,669 Impairment ( 1,282,064 ) Balance, December 31 $ - The following table sets forth the components of the Company’s intangible assets at December 31, 2022: Schedule of Intangible Assets Amortization Period (Years) Cost Accumulated Amortization and Impairment Net Book Value Intangible Assets Subject to amortization Trademarks – Coastal Pride 14 $ 850,000 $ ( 850,000 ) $ - Trademarks – TOBC 15 406,150 ( 406,150 ) - Customer Relationships – Coastal Pride 12 1,486,832 ( 1,486,832 ) - Customer Relationships – TOBC 15 592,979 ( 592,979 ) - Non-Compete Agreements – Coastal Pride 3 40,000 ( 40,000 ) - Non-Compete Agreements – TOBC 4 121,845 ( 121,845 ) - Total $ 3,497,806 $ ( 3,497,806 ) $ - For the years ended December 31, 2023 and 2022, amortization expense of intangible assets totaled approximately $ 0 and $ 315,000 , respectively. F- 14 Note 7. Debt and Derivatives Working Capital Line of Credit On March 31, 2021, Keeler & Co. 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 were evidenced by a revolving credit note issued to Lighthouse by the Borrowers. The advance rate of the revolving line of credit was 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 could never exceed 50% of the outstanding balance. Interest on the line of credit was the prime rate (with a floor of 3.25%), plus 3.75% which increased to 4.75% in 2022. The Borrowers paid Lighthouse a facility fee of $50,000 in three instalments of $16,667 in March, April and May 2021 and 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 demand. The line of credit was 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. For the year ended December 31, 2022, cash proceeds from the working capital line of credit totaled $ 12,552,008 and cash payments to the working capital line of credit totaled $ 13,144,141 . The outstanding balance owed to Lighthouse as of December 31, 2022 was $ 1,776,068 . On June 16, 2023, the Company terminated the Loan Agreement and paid a total of approximately $ 108,400 to Lighthouse which included, as of June 16, 2023, an outstanding principal balance of approximately $ 93,400 , accrued interest of approximately $ 9,900 , and other fees incurred in connection with the line of credit of approximately $ 4,900 . Upon the repayment of the total outstanding indebtedness owing to Lighthouse, the Loan Agreement and all other related financing agreements and documents entered into in connection with the Loan Agreement were deemed terminated. John Keeler Promissory Notes – Subordinated The Company had unsecured promissory notes outstanding to John Keeler of $ 165,620 and $ 893,000 as of December 31, 2023 and 2022, respectively. These notes are payable on demand and bear an annual interest rate of 6 %. Since March 31, 2021, these notes are subordinated to the Lighthouse note. The Company made principal payments during the year ended December 31, 2023 and 2022 of $ 157,380 and $ 67,000 , respectively. During the year ended December 31, 2023, the Company issued 3,958,333 shares of its common stock to settle $ 570,000 principal of the subordinated notes. Walter Lubkin Jr. Note On 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 Coastal Pride acquisition. The note bears interest at the rate of 4% per annum. The note is payable quarterly in 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 . For the year ended December 31, 2022, $ 38,799 of the outstanding principal and accrued interest was paid in cash and $ 104,640 of the outstanding principal and accrued interest was paid in shares of common stock of the Company. F- 15 For the year ended December 31, 2023, $ 250,000 of the outstanding principal was paid in shares of common stock of the Company. Interest expense for the note totaled approximately $ 14,100 and $ 18,000 during the year ended December 31, 2023 and December 31, 2022, respectively. As of December 31, 2023 and December 31, 2022, the outstanding principal balance on the note totaled $ 100,000 and $ 350,000 , respectively. Lind Global Fund II LP notes 2022 Note On January 24, 2022, the Company entered into a securities purchase agreement with Lind Global Fund II LP, a Delaware limited partnership (“Lind”), pursuant to which the Company issued Lind a secured, two-year, interest free convertible promissory note in the principal amount of $ 5,750,000 (the “2022 Lind Note) and a five -year warrant to purchase 1,000,000 shares of common stock at an exercise price of $ 4.50 per share, subject to customary adjustments ( 50,000 shares of common stock at an exercise price of $ 90 per share after taking into account the Company’s Reverse Stock Split). The warrant provides for cashless exercise and for full ratchet anti-dilution if the Company issues securities at less than $ 4.50 per share (exercise price of $ 90 per share after taking into account the Company’s Reverse Stock Split). In connection with the issuance of the 2022 Lind Note and the warrant, the Company paid a $ 150,000 commitment fee to Lind and $ 87,144 of debt issuance costs. The Company recorded a total of $ 2,022,397 debt discount at issuance of the debt, including original issuance discount of $ 750,000 , commitment fee of $ 150,000 , $ 87,144 debt issuance cost, and $ 1,035,253 related to the fair value of warrants issued. Amortization expense recorded in interest expense totaled $ 643,777 and $ 1,378,620 for the year ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and December 31, 2022, the unamortized discount on the 2022 Lind Note was $ 0 and $ 643,777 , respectively. The outstanding principal under the 2022 Lind 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”) (floor price of $30 per share after taking into account the Company’s Reverse Stock Split), 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 shares, the Company will pay Lind an additional amount in cash as determined pursuant to a formula contained in the 2022 Lind Note. In connection with the issuance of the 2022 Lind Note, the Company granted Lind a first priority security interest and lien on all of its assets, including a pledge of its shares in Keeler & Co., pursuant to a security agreement and a stock pledge agreement with Lind, dated January 24, 2022 (the “2022 Security Agreement). Each subsidiary of the Company also granted a second priority security interest in all of its respective assets. The 2022 Lind 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. 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 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. 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. F- 16 If the Company engages in capital raising transactions, Lind has the right to purchase up to 10 % of the new securities. The 2022 Lind Note is convertible into common stock at $ 5.00 per share ($ 100 per share after taking into account the Company’s Reverse Stock Split), subject to certain adjustments, on April 22, 2022; 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. If shares are issued by the Company at less than the conversion price, the conversion price will be reduced to such price. Upon a change of control of the Company, as defined in the 2022 Lind Note, Lind has the right to require the Company to prepay 10% of the outstanding principal amount of the 2022 Lind Note. The Company may prepay the outstanding principal amount of the note, provided Lind may convert up to 25% of the principal amount of the 2022 Lind Note at a price per share equal to the lesser of the Repayment Share Price or the conversion price. The 2022 Lind Note contains certain negative covenants, including restricting the Company from certain distributions, stock repurchases, borrowing, sale of assets, loans and exchange offers. Upon an event of default as described in the 2022 Lind Note, the 2022 Lind 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. During the year ended December 31, 2022, the Company made principal payments on the note totaling $ 1,666,666 through the issuance of an aggregate of 666,666 shares of common stock and cash payments of $ 1,175,973 which included $ 899,999 principal payments and additional payments requested by Lind pursuant to the terms of the note. As of December 31, 2022, the outstanding balance on the 2022 Lind Note was $ 3,439,558 , net of debt discount of $ 643,777 . During the year ended December 31, 2023, the Company made aggregate principal payments on the 2022 Lind Note of $ 2,075,900 through the issuance of an aggregate of 1,379,211 shares of common stock. On September 15, 2023, the Company paid $ 2,573,142 to Lind and the 2022 Lind Note was extinguished. 2023 Note On May 30, 2023, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Lind pursuant to which the Company issued to Lind a secured, two-year, interest free convertible promissory note in the principal amount of $ 1,200,000 (the “2023 Lind Note”) and a warrant (the “Lind Warrant”) to purchase 435,035 shares of common stock of the Company commencing six months after issuance and exercisable for five years at an exercise price of $ 2.45 per share. The Lind Warrant includes cashless exercise and full ratchet anti-dilution provisions. In connection with the issuance of the Lind Note and the Lind Warrant, the Company paid Lind a $ 50,000 commitment fee. The proceeds from the sale of the Note and Warrant are for general working capital purposes. In connection with the issuance of the 2022 Lind Note, the Company and Lind amended the 2022 Security Agreement to include the new 2023 Lind Note, pursuant to an amended and restated security agreement, dated May 30, 2023, between the Company and Lind. The Company agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of common stock issuable pursuant to the 2023 Lind Note and Lind Warrant. If the registration statement is not declared effective within 90 days the 2023 Lind Note will be in default. Lind was also granted piggyback registration rights. If the Company engages in capital raising transactions, Lind has the right to purchase up to 20 % of the new securities for 24 months. F- 17 The 2023 Lind Note is convertible into common stock of the Company after the earlier of 90 days 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. The conversion price of the 2023 Lind Note is equal to the lesser of: (i) $ 2.40 ; or (ii) 90 % of the lowest single volume-weighted average price during the twenty-trading day period ending on the last trading day immediately preceding the applicable conversion date, subject to customary adjustments. The maximum number of shares of common stock to be issued in connection with the conversion of the 2023 Lind Note and the exercise of the Lind Warrant, in the aggregate, will not, exceed 19.9 % of the outstanding shares of common stock of the Company immediately prior to the date of the 2023 Lind Note, in accordance with NASDAQ rules and guidance. Due to the variable conversion price of the 2023 Lind Note, the embedded conversion feature was accounted as a derivative liability. The Company estimated the fair values of the derivative liability using the Black-Scholes option pricing model and using the following key assumptions at issuance and at December 31, 2023: stock price of $ 2.14 and $ 0.14 ; exercise price of $ 2.40 and $ 0.13 , risk free rate of 4.46 % and 4.79 %, volatility of 150.46 % and 134.99 %; and expected term of two years and one and a half years . The 2023 Lind Note contains certain negative covenants, including restricting the Company from certain distributions, stock repurchases, borrowing, sale of assets, loans and exchange offers. Upon the occurrence of an event of default as described in the 2023 Lind Note, the 2023 Lind Note will become immediately due and payable at a default interest rate of 120 % of the then outstanding principal amount of the Lind Note. The Warrant entitles the Investor to purchase up to 435,035 shares of common stock of the Company during the exercise period commencing on the date that is six months after the issue date (“Exercise Period Commencement”) and ending on the date that is sixty months from the Exercise Period Commencement at an exercise price of $ 2.45 per share, subject to customary adjustments. The Warrant includes cashless exercise and full ratchet anti-dilution provisions. On July 27, 2023, the Company, entered into a First Amendment to the Purchase Agreement (the “Purchase Agreement Amendment”) with Lind, which provided for the issuance of further senior convertible promissory notes up to an aggregate principal amount of up to $ 1,800,000 and the issuance of additional warrants in such amounts as the Company and Lind shall mutually agree. Pursuant to the Purchase Agreement Amendment, the Company issued to Lind a two-year, interest free convertible promissory note in the principal amount of $ 300,000 and a warrant to purchase 175,234 shares of common stock of the Company at an exercise price of $ 1.34 per share for $ 250,000 . In connection with the issuance of the note and the warrant, the Company paid a $ 12,500 commitment fee. The proceeds from the sale of the note and warrant are for general working capital purposes. Due to the variable conversion price of the Purchase Agreement Amendment, the embedded conversion feature was accounted as a derivative liability. The Company estimated the fair values of the derivative liability using the Black-Scholes option pricing model and using the following key assumptions at issuance and at December 31, 2023: stock price of $ 1.07 and $ 0.14 ; exercise price of $ 0.93 and $ 0.14 , risk free rate of 4.91 % and 4.79 %, volatility of 45.51 % and 133.54 %; and expected term of two years and one and a half years . As of December 31, 2023, the outstanding balance on the notes was $ 1,500,000 , net of debt discount of $ 1,018,671 , and totaling $ 481,329 . As of December 31, 2023, the total derivative liability and warrant liability was $ 1,047,049 and $ 1,574 , respectively. Agile Lending, LLC loan On June 14, 2023, the Company, and Keeler & Co. (the “Borrowers”) entered into a subordinated business loan and security agreement with Agile Lending, LLC as lead lender (“Agile”) and Agile Capital Funding, LLC as collateral agent (“Agile Capital”), which provides for a term loan to the Company in the amount of $ 525,000 which principal and interest (of $ 231,000 ) is due on December 15, 2023 . Commencing June 23, 2023, the Company is required to make weekly payments of $ 29,077 until the due date. The loan may be prepaid subject to a prepayment fee. An administrative agent fee of $ 25,000 was paid on the loan which was recognized as a debt discount and amortized over the term of the loan. In connection with the loan, Agile was issued a subordinated secured promissory note, dated June 14, 2023, in the principal amount of $ 525,000 which note is secured by all of the Borrowers’ assets, including receivables. For the year ended December 31, 2023, the Company made principal and interest payments on the loan totaling $ 525,000 and $ 114,692 , respectively, and the outstanding interest balance was refinanced in the January 2024 loan. On October 19, 2023, the Borrowers entered into a subordinated business loan and security agreement with Agile and Agile Capital as collateral agent, which provides for a term loan to the Company in the amount of $ 210,000 which principal and interest (of $ 84,000 ) is due on April 1, 2024 . Commencing October 19, 2023, the Company is required to make weekly payments of $ 12,250 until the due date. The loan may be prepaid subject to a prepayment fee. An administrative agent fee of $ 10,000 was paid on the loan which was recognized as a debt discount and amortized over the term of the loan. In connection with the loan, Agile was issued a subordinated secured promissory note, dated October 19, 2023, in the principal amount of $ 210,000 which note is secured by all of the Borrowers’ assets, including receivables. For the year ended December 31, 2023, the Company made principal payments on the loan totaling $ 98,000 and no interest payments were made. F- 18 First West Credit Union CEBA Loan On June 24, 2021, the Company assumed a commercial term loan with First West Credit Union Canada Emergency Business Account (“CEBA”) in the principal amount of CAD$ 60,000 in connection with the acquisition of TOBC. The loan initially bears no interest and is due on December 31, 2025. The loan was amended on October 19, 2022 to extend the loan forgiveness date from December 31, 2022 to December 31, 2023. If less than 75% of the loan amount was outstanding at December 31, 2023 , the then outstanding balance will be converted to interest only monthly payments at 5.0 %. As of December 31, 2023, the outstanding balance on the loan was CAD$ 60,000 . Note 8. Acquisitions Acquisition of Gault Seafood On February 3, 2022, Coastal Pride entered into an asset purchase agreement with Gault Seafood and Robert J. Gault II pursuant to which Coastal Pride acquired all of Gault Seafood’s right, title and interest in and to assets relating to Gault Seafood’s soft-shell crab operations, including intellectual property, equipment, vehicles and other assets used in connection with the soft-shell crab operations. Coastal Pride did not assume any liabilities in connection with the acquisition. The purchase price for the assets consisted of a cash payment in the amount of $ 359,250 and the issuance of 8,355 shares of common stock of the Company with a fair value of $ 359,250 . The acquisition was accounted for as an asset acquisition. Fair Value of Consideration Transferred and Recording of Assets Acquired The following table summarizes the acquisition date fair value of the consideration paid and identifiable assets acquired. Schedule of Fair Value of Assets Acquired and Liabilities Assumed Consideration Paid: Cash $ 359,250 Common stock, 8,355 shares of common stock of the Company 359,250 Transaction costs 39,231 Fair value of total consideration $ 757,731 Purchase Price Allocation: Fixed assets acquired $ 146,600 Customer relationships 611,131 Fair market value of net assets acquired $ 757,731 Note 9. Stockholders’ Equity Preferred Stock Our Board of Directors has designated 10,000 shares of preferred stock as “ 8 % Series A Convertible Preferred Stock”. The 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. Dividends. 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. F- 19 For the year ended December 31, 2023 and 2022, the Company had no preferred stock outstanding. Common Stock The Company is authorized to issue 100,000,000 shares of common stock at a par value of $ 0.0001 and had 23,086,077 and 1,338,321 shares of common stock issued and outstanding as of December 31, 2023 and 2022, respectively. On January 24, 2022, the Company issued 6,250 shares of common stock to an investor upon the exercise of warrants for total proceeds of $ 250,000 . On February 3, 2022, the Company issued 8,355 shares of common stock with a fair value of $ 359,250 to Gault Seafood as partial consideration for the purchase of certain of its assets. On March 31, 2022, the Company issued 769 shares of common stock to Intelligent Investments I LLC, with a fair value of $ 30,000 , for legal services provided to the Company. On March 31, 2022, the Company issued 250 shares of common stock with a fair value of $ 9,750 to TraDigital Marketing Group for consulting services provided to the Company. On April 1, 2022, the Company issued 144 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital LLC (“ClearThink Capital”) for consulting services provided to the Company. On April 4, 2022, the Company issued 478 shares of common stock with a fair value of $ 20,000 to SRAX, Inc. for consulting services provided to the Company which is amortized to expense over the term of the agreement. The Company recognized stock compensation expense of $ 15,000 for the year ended December 31, 2022 in connection with these shares. On April 5, 2022, the Company issued an aggregate of 1,241 shares of common stock with a fair value of $ 156,341 to Newbridge Securities Corporation and its affiliates for consulting services provided to the Company. On May 1, 2022, the Company issued 196 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On June 1, 2022, the Company issued 222 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On June 3, 2022, the Company issued 500 shares of common stock with a fair value of $ 13,800 to TraDigital Marketing Group for consulting services provided to the Company. On June 30, 2022, the Company issued 1,210 shares of common stock to Intelligent Investments I LLC, with a fair value of $ 30,000 , for legal services provided to the Company. On July 1, 2022, the Company issued 242 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. F- 20 On August 1, 2022, the Company issued 231 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On August 25, 2022, the Company issued 11,111 shares of common stock to Lind, with a fair value of $ 271,111 , in satisfaction of the convertible promissory note. On September 1, 2022, the Company issued 261 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On September 26, 2022, the Company issued 11,111 shares of common stock to Lind, with a fair value of $ 176,666 , in satisfaction of the convertible promissory note. On October 1, 2022, the Company issued 476 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On November 1, 2022, the Company issued 330 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On December 1, 2022, the Company issued 462 shares of common stock with a fair value of $ 6,000 to the designee of Clear Think Capital for consulting services provided to the Company. On December 21, 2022, the Company issued 11,111 shares of common stock to Lind with a fair value of $ 100,000 , in satisfaction of the convertible promissory note. On December 31, 2022, the Company issued 3,125 shares of common stock to each of Nubar Herian and John Keeler, 5,000 shares of common stock to each of Timothy McLellan and Trond Ringstad, 2,170 shares of common stock to each of Juan Carlos Dalto and Silvia Alana and 7,188 shares of common stock to Jeffrey Guzy with a total fair value of $ 222,222 for serving as directors of the Company. On December 31, 2022, the Company issued an aggregate of 22,029 shares of common stock to Walter Lubkin Jr., Walter Lubkin III, Tracy Greco and John Lubkin in lieu of $ 176,228 of outstanding principal and interest under promissory notes issued by the Company to them in connection with the Coastal Pride acquisition. In January 2023, the Company sold an aggregate of 23,705 shares of common stock for net proceeds of $ 182,982 in an “at the market” offering pursuant to a sales agreement between the Company and Roth Capital Partners, LLC (“Roth”). On January 31, 2023, 7,564 of shares were repurchased from Roth for $ 76,323 . The offering was terminated on February 2, 2023. On February 14, 2023, the Company issued 410,000 shares of common stock and 40,000 Pre-Funded Warrants to purchase common stock to Aegis Capital Corp. (“Aegis”) for net proceeds of $ 1,692,000 in connection with an underwritten offering. F- 21 On August 22, 2023, the Company issued 200,000 shares of common stock with a fair value of $ 157,980 to Mark Crone for consulting services to be provided to the Company starting on January 1, 2024, which will be amortized to expense over the term of the agreement and the shares will vest when services are provided. The Company recognized no stock compensation expense for the year ended December 31, 2023 in connection with these shares. On September 11, 2023, the Company sold an aggregate of 690,000 shares of common stock for net proceeds of $ 321,195 in an underwritten public offering pursuant to a securities purchase agreement. The Company issued an aggregate of 1,700,410 shares upon the exercise of warrants. On December 31, 2023, the Company issued an aggregate of 3,958,333 shares of common stock to John Keeler’s designee in lieu of payment of $ 570,000 of the principal amount of outstanding promissory notes held by Mr. Keeler. On December 31, 2023, the Company issued 173,611 shares of common stock to each of Silvia Alana, Nubar Herian and John Keeler, 277,778 shares of common stock to each of Timothy McLellan and Trond Ringstad, 101,273 shares of common stock to Juan Carlos Dalto and 399,306 shares of common stock to Jeffrey Guzy with a total fair value of $ 227,083 for serving as directors of the Company. On December 31, 2023, the Company issued 1,736,111 shares of common stock to Walter Lubkin Jr. in lieu of $ 250,000 of outstanding principal payment due under promissory notes issued by the Company in connection with the Coastal Pride acquisition. During the year ended December 31, 2023, the Company issued an aggregate of 239,229 shares of common stock to the designee of ClearThink for consulting services provided to the Company. During the year ended December 31, 2023, the Company issued an aggregate of 1,380,585 shares of common stock for cash proceeds of $ 343,849 pursuant to a securities purchase agreement, dated May 16, 2023, with ClearThink. In connection with such agreement, the Company also issued 62,500 shares of common stock to ClearThink as a commitment fee, with a fair value of $ 141,250 , which was recorded as stock issuance costs. During the year ended December 31, 2023, between October 2023 and November 2023, the Company issued an aggregate of 8,350,729 shares upon the exercise of warrants pursuant to a securities purchase agreement. During the year ended December 31, 2023, the Company issued an aggregate of 1,379,211 shares of common stock to Lind with a fair value of $ 3,053,088 as payment of $ 2,075,900 of note principal due on a convertible promissory note, and recorded a loss of $ 977,188 . Note 10. Options During the years ended December 31, 2023 and December 31, 2022, $ 69,125 and $ 187,385 , respectively, in compensation expense was recognized on the following: 1. Ten -year option to purchase 156,000 shares of common stock at an exercise price of $ 40.00 , 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. F- 22 2. Ten -year options to purchase an aggregate of 17,562 shares of common stock at an exercise price of $ 40.00 , 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 31, 2019. 3. Ten -year option to purchase 12,500 shares of common stock at an exercise price of $ 40.00 , which vest as to 20 % of the shares subject to the option each year from the date of grant, were issued to an officer of the Company under the 2018 Plan during the year ended December 31, 2019. 4. Ten -year options to purchase an aggregate of 1,250 shares of common stock at an exercise price of $ 40.00 , 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. 5. Three -year options to purchase an aggregate of 25,000 shares of common stock at an exercise price of $ 40.00 , 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. 6. Three -year option to purchase 351 shares of common stock at an exercise price of $ 120.00 , 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. 7. Five -year options to purchase an aggregate of 8,750 shares of common stock at an exercise price of $ 40.00 , which vest in equal monthly installments during the term of the option, were issued to the Company’s directors during the year ended December 31, 2022. 8. Three -year options to purchase 1,378 shares of common stock at an exercise price of $ 17.20 , which vest in equal monthly installments during the term of the option, were issued to an employee during the year ended December 31, 2022. 9. Three -year option to purchase 285 shares of common stock at an exercise price of $ 15.80 , which vest in equal monthly installments during the term of the option, were issued to an employee during the year ended December 31, 2022. 10. Three -year option to purchase 43,200 shares of common stock at an exercise price of $ 0.80 , 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, 2023. 11. Three -year option to purchase 51,514 shares of common stock at an exercise price of $ 0.35 , which vest in equal monthly installments during the term of the option, were issued to an employee during the year ended December 31, 2023. The following table summarizes the assumptions used to estimate the fair value of the stock options granted for the years ended December 31, 2023 and 2022: Schedule of Fair Value of Stock Options 2023 2022 Expected Volatility 35 % – 45 % 39 % – 48 % Risk Free Interest Rate 2.87 % – 4.72 % 2.87 % – 4.27 % Expected life of options 3.0 – 5.0 3.0 – 5.0 On April 20, 2022, the Company’s existing directors and two newly appointed directors each entered into a one-year director service agreement with the Company, which will automatically renew for successive one-year terms unless either party notifies the other of its desire not to renew the agreement at least 30 days prior to the end of the then current term, or unless earlier terminated in accordance with the terms of the agreement. As compensation for serving on the Board of Directors, each director will be entitled to a $ 25,000 annual stock grant and for serving on a Committee of the Board, an additional $ 5,000 annual stock grant, both based upon the closing sales price of the common stock on the last trading day of the calendar year. Each director who serves as chairman of the Audit Committee, Compensation Committee and Nominating and Governance Committee will be entitled to an additional $ 15,000 , $ 10,000 and $ 7,500 annual stock grant, respectively. As additional consideration for such Board service, on April 20, 2022, each director was granted a five-year option to purchase 1,250 shares of the Company’s common stock at an exercise price of $ 40.00 per share, which shares will vest in equal quarterly installments of 63 shares during the term of the option. The agreement also includes customary confidentiality provisions and one-year non-competition and non-solicitation provisions. On September 16, 2022, the Company granted an employee a three -year option to purchase 1,378 shares of common stock at an exercise price of $ 17.20 which vests in equal monthly installments during the term of the option. On November 22, 2022, the Company granted an employee a three -year option to purchase 285 shares of common stock at an exercise price of $ 15.80 which vests in equal monthly installments during the term of the option. Under the Black-Scholes option pricing model, the fair value of the 8,750 options, 1,378 options and 285 options granted during the year ended December 31, 2022 is estimated at $ 84,334 , $ 8,409 , and $ 1,615 , respectively, on the date of grant using the following assumptions: stock price of $ 31.40 , $ 17.20 and $ 15.80 at the grant date, exercise price of the option, option term, volatility rate of 39.23 %, 46.72 % and 46.72 % and risk-free interest rate of 2.87 %, 3.81 % and 4.27 %, respectively. The unrecognized portion of the expense remaining at December 31, 2022 is $ 72,620 , $ 7,600 , and $ 1,558 , respectively, which is expected to be recognized to expense over a period of three years. F- 23 For the year ended December 31, 2022, the Company determined that the five -year option to purchase 8,822 shares of common stock at an exercise price of $ 46.00 granted to an employee of TOBC in 2021 does not meet the vesting requirements pursuant to the terms of the option grant and accordingly, reversed the expense recorded of approximately $ 76,400 and $ 79,023 for the years ended December 31, 2022 and 2021, respectively. On August 3, 2023, the Company granted an officer a three -year option to purchase 43,200 shares of common stock at an exercise price of $ 0.80 , which vest in equal monthly installments during the term of the option. On October 1, 2023, the Company granted an employee a three -year option to purchase 51,514 shares of common stock at an exercise price of $ 0.36 , which vest in equal monthly installments during the term of the option. Under the Black-Scholes option pricing model, the fair value of the 43,200 options and 51,514 options granted during the year ended December 31, 2023 is estimated at $ 12,261 and $ 5,489 , respectively, on the date of grant using the following assumptions: stock price of $ 0.80 and $ 0.36 at the grant date, exercise price of the option, option term, volatility rate of 45.44 % and 35.97 % and risk-free interest rate of 4.58 % and 4.72 %, respectively. The unrecognized portion of the expense remaining at December 31, 2023 is $ 10,592 and $ 4,961 , respectively, which is expected to be recognized to expense over a period of three years. The following table represents option activity for the years ended December 31, 2023 and 2022: Schedule of Option Activity Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding - December 31, 2021 221,484 $ 40.00 6.23 Exercisable - December 31, 2021 190,356 $ 40.00 6.83 $ - Granted 10,412 $ 36.40 Forfeited ( 8,822 ) $ 46.00 Vested 206,082 - Outstanding - December 31, 2022 223,076 $ 40.00 5.25 Exercisable - December 31, 2022 206,082 $ 40.00 5.28 $ - Granted 94,714 $ 0.58 Forfeited ( 1,250 ) $ 40.00 Vested 219,908 - Outstanding - December 31, 2023 316,540 $ 31.11 3.80 Exercisable - December 31, 2023 219,908 $ 31.11 4.27 $ - For the year ended December 31, 2023, the Company determined that the five -year option to purchase 1,250 shares of common stock at an exercise price of $ 40.00 granted to a director in 2022 was forfeited as the director resigned in 2023. The non-vested options outstanding are 96,632 and 16,994 for the years ended December 31, 2023 and 2022, respectively. Note 11. Warrants Schedule of Warrant Activity Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding – December 31, 2022 120,675 $ 62.20 1.32 Exercisable – December 31, 2022 120,675 $ 62.20 1.32 $ - Granted 10,701,408 $ 0.15 Exercised ( 10,091,139 ) $ 0.03 Forfeited or Expired - $ - Outstanding – December 31, 2023 730,944 $ 12.04 4.20 Exercisable – December 31, 2023 555,710 $ 15.41 5.52 $ - F- 24 On January 24, 2022, in connection with the issuance of the $ 5,750,000 promissory note to Lind pursuant to a securities purchase agreement, the Company issued Lind a five -year warrant to purchase 50,000 shares of common stock at an exercise price of $ 90.00 per share. The warrant provides for cashless exercise and full ratchet anti-dilution if the Company issues securities at less than $ 90.00 per share. Under the Black-Scholes pricing model, the fair value of the warrant issued to purchase 50,000 shares of common stock was estimated at $ 1,412,213 on the date of issuance using the following assumptions: stock price of $ 79.40 at the date of the agreement, exercise price of the warrant, warrant term, volatility rate of 43.21 % and risk-free interest rate of 1.53 % from the Department of Treasury. The relative fair value of $ 1,035,253 was calculated using the net proceeds of the convertible note and accounted for as paid in capital. For the year ended December 31, 2022, the Company issued 6,250 shares of common stock at an exercise price of $ 40.00 to an investor upon exercise of a warrant. On May 30, 2023, in connection with the issuance of the $ 1,200,000 promissory note to Lind pursuant to a securities purchase agreement, the Company issued Lind a five -year warrant exercisable six months from the date of issuance to purchase 435,035 shares of common stock at an exercise price of $ 2.45 per share. The warrant provides for cashless exercise and full ratchet anti-dilution provisions. Under the Black-Scholes pricing model, the fair value of the warrants issued to purchase 435,035 shares of common stock was estimated at $ 381,538 on the date of issuance of the warrant and $ 664 as of December 31, 2023 using the following assumptions: stock price of $ 2.14 and $ 0.14 ; exercise price of $ 2.45 , risk free rate of 3.81 % and 3.84 %, volatility of 46.01 % and 50.12 %; and expected term of five years . The fair value of the warrants of $ 381,538 was recorded as a discount to the 2023 Lind Note and classified as liabilities. On July 27, 2023, in connection with the issuance of the $ 300,000 promissory note to Lind pursuant to the Purchase Agreement Amendment, the Company issued Lind a five -year warrant exercisable six months from the date of issuance to purchase 175,234 shares of common stock at an exercise price of $ 1.34 per share. The warrant provides for cashless exercise and full ratchet anti-dilution provisions. Under the Black-Scholes pricing model, the fair value of the warrants is estimated at $ 72,208 on the date of issuance of the warrant and $ 910 as of December 31, 2023 using the following assumptions: stock price of $ 1.07 and $ 0.14 ; exercise price of $ 1.34 ; risk free rate of 4.24 % and 3.84 %; volatility of 45.51 % and 49.76 %; and expected term of five years . The fair value of the warrants of $ 72,208 was recorded as a discount to the 2023 Purchase Agreement Amendment and classified as a liability. On September 11, 2023, in connection with the underwritten public offering pursuant to a securities purchase agreement, the Company issued pre-funded warrants with the public offering price of $ 0.4555 immediately exercisable to purchase up to 10,051,139 shares of common stock at an exercise price of $ 0.01 per share for gross proceeds of $ 4,578,294 . Under the Black-Scholes pricing model, the fair value of the warrants issued to purchase 10,051,139 shares of common stock was estimated at $ 4,619,851 on the date of issuance of the warrant using the following assumptions: stock price of $ 0.469 ; exercise price of $ 0.01 ; warrant term; volatility rate of 149.06 %; and risk-free interest rate of 5.40 % from the US Department of Treasury. On September 11, 2023, in connection with the underwritten public offering, the Company issued five -year Series A-1 warrants to purchase up to 10,741,139 shares of common stock which warrants are exercisable upon stockholder approval at an exercise price of $ 0.4655 per share. Since the exercise of these warrants is contingent upon stockholder approval, which stockholder approval has not been obtained, such warrants were not considered as outstanding as of December 31, 2023. On September 11, 2023, in connection with the underwritten public offering, the Company issued eighteen -month Series A-2 warrants to purchase up to 10,741,139 shares of common stock which warrants are exercisable upon stockholder approval at an exercise price of $ 0.4655 per share. Since the exercise of these warrants is contingent upon stockholder approval, which stockholder approval has not been obtained, such warrants were not considered as outstanding as of December 31, 2023. During the year ended December 31, 2023, the Company issued 40,000 shares of common stock at an exercise price of $ 3.98 per share pursuant to pre-funded warrants issued to Aegis in connection with an underwritten offering. For the year ended December 31, 2023, between October 2023 and November 2023, the Company issued an aggregate of 10,051,139 shares of common stock at an exercise price of $ 0.01 to two investors upon exercise of Pre-Funded Warrants. F- 25 Note 12. Income taxes Federal income tax expense differs from the statutory federal rates of 21% for the years ended December 31, 2023 and December 31, 2022 due to the following: Schedule of Rate Reconciliation Rate Reconciliation December 31, 2023 December 31, 2022 Provision/(Benefit) at statutory rate $ 851,925 21.00 % $ ( 2,770,944 ) 21.00 % State tax Provision/(Benefit) net of federal benefit ( 206,832 ) 5.10 % ( 309,886 ) 2.35 % Permanent book/tax differences ( 237,419 ) 5.85 % 10,621 ( 0.048 )% Change in valuation allowance 74,848 ( 1.85 )% 2,751,592 ( 20.85 )% Other 1,221,327 ( 30.11 )% 318,617 ( 2.42 )% Income Tax Provision/(Benefit) - - - - The components of the net deferred tax asset at December 31, 2023 and 2022, are as follows: Schedule of Deferred Income Tax Asset December 31, 2023 December 31, 2022 Deferred Tax Assets Business interest limitation $ - $ 627,930 Allowance for bad debt 5,797 - Fixed assets 136,208 140,494 Stock based compensation - 1,017,629 Net operating loss carryovers 3,626,165 2,089,409 Non-capital Losses 511,340 365,053 Other 83,687 46,385 Net Deferred Tax Asset/(Liability) 4,363,197 4,286,900 Valuation Allowance ( 4,363,197 ) ( 4,286,900 ) Net Deferred Tax Asset/(Liability) $ - $ - Tax periods for all fiscal years after 2019 remain open to examination by the federal and state taxing jurisdictions to which the Company is subject. As of December 31, 2023, the Company has cumulative net federal and state operating losses of $ 14,896,960 and $ 11,456,916 , respectively. ASC 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, 2023. As of December 31, 2023, and 2022, 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. No interest or penalties were recorded during the years ended December 31, 2023, and 2022. F- 26 Note 13. Commitment and Contingencies Office lease On January 1, 2022, the Company entered into a verbal month-to-month lease agreement for its executive offices with an unrelated third party and paid $ 23,200 on the lease for the three months ended March 31, 2022. For the year ended December 31, 2023, the Company has paid $ 69,900 on this lease. Coastal Pride leased an aggregate of 1,600 square feet of office space in Beaufort, South Carolina under two leases for $ 1,255 and $ 750 per month. On October 1, 2023, both leases were terminated and Coastal Pride entered into a new one-year office lease for 1,100 square feet for $ 1,000 per month. Coastal Pride also leased a 9,050 square foot facility for $ 1,000 per month from Gault for its soft-shell crab operations in Beaufort, South Carolina under a one -year lease that expired in February 2023. On February 3, 2023, the lease was renewed for $ 1,500 per month until February 2024. On February 3, 2024, the Coastal Pride entered into a verbal month-to-month lease agreement with Gault for $ 1,500 per month. The offices and facility of TOBC are located in Nanaimo, British Columbia, Canada and are on land which was leased to TOBC for approximately $ 2,500 per month plus taxes, from Steve and Janet Atkinson, the former TOBC owners. On April 1, 2022, TOBC entered into a new five-year lease with Steve and Janet Atkinson for CAD$ 2,590 per month plus taxes, and an additional five-year lease with Kathryn Atkinson for CAD$ 2,370 per month plus. Both leases are renewable for two additional five-year terms. Rental and equipment lease expenses were approximately $ 166,000 and $ 168,000 for the years ended December 31, 2023 and 2022, respectively. Legal The Company has reached a settlement agreement with a former employee. Although the agreement is not finalized the Company has reserved $ 70,000 , representing the entire amount of the settlement. Note 14. Employee Benefit Plan The Company provides and sponsors a 401(k) plan for its employees. For the years ended December 31, 2023 and 2022, no contributions were made to the plan by the Company. Note 15. Subsequent Events In order to refinance interest due on the June 14, 2023 note issued to Agile, on January 2, 2024, the Company, and Keeler & Co. entered into a subordinated business loan and security agreement with Agile and Agile Capital as collateral agent, which provides for a term loan to the Company in the amount of $ 122,491 which principal and interest (of $ 48,996 ) is due on May 31, 2024. Commencing January 5, 2024, the Company is required to make weekly payments of $ 7,795 until the due date. The loan may be prepaid subject to a prepayment fee. An administrative agent fee of $ 5,833 was paid on the loan. A default interest rate of 5 % will become effective upon the occurrence of an event of default. In connection with the loan, Agile was issued a subordinated secured promissory note, dated January 2, 2024, in the principal amount of $ 122,491 which note is secured by all of the Borrower’s assets, including receivables. ClearThink Term Loan On January 18, 2024, the Company entered into the Revenue-Based Factoring MCA Plus Agreement with ClearThink which provides, among other things, for a 33-week term loan in the principal amount of $ 200,000 (with an additional one-time commitment fee of $ 50,000 ). Interest accrues at the rate of 25 % per annum with an additional 5 % default interest rate in the event of circumstances described in the agreement or $ 50,000 will be added to the principal amount and accrue after principal is paid. The Company is required to make biweekly payments of $ 14,706 , commencing February 1, 2024 for the term of the Agreement. On January 25, 2024, the Company issued 354,610 shares of common stock to ClearThink as a commitment fee, with a fair value of $ 50,000 . On January 23, 2024 and February 1, 2024, the Company issued 76,388 and 82,706 shares of common stock, respectively, to the designee of ClearThink for consulting services provided to the Company. During February 2024 and March 2024, the Company issued an aggregate of 11,332,787 shares of common stock for cash proceeds of $ 836,360 pursuant to a securities purchase agreement, dated May 16, 2023 with ClearThink. Afritex Agreements On February 1, 2024, the Company entered into a ninety-day Master Services Agreement (the “Services Agreement”) with Afritex Ventures, Inc. a Texas corporation (“Afritex”), pursuant to which the Company will be responsible for all of Afritex’s operations and finance functions. The Company will provide Afritex with working capital in order to sustain operations and will purchase certain inventory listed in the Services Agreement. In consideration for its services, during the term of the Services Agreement, the Company will be entitled to all of the revenue and profits earned by Afritex. Under the Services Agreement, Afritex may not sell or otherwise use as consideration any of its intellectual property without the Company’s consent. The Company must maintain certain commercial liability insurance during the term of the Services Agreement. The Services Agreement also provides that the Company may not solicit Afritex employees for 24 months nor circumvent existing business relationships of Afritex for three years, after the term of the Services Agreement. The term of the Services Agreement will automatically extend for three thirty-day periods, if Afritex’s outstanding debt is no greater than $325,000. In connection with the Services Agreement, on February 12, 2024, the Company entered into an Intangibles Assets and Machinery Option To Purchase Agreement with Afritex (the “Option Agreement”). Pursuant to the Option Agreement, the Company has the option to purchase Afritex’s intangible assets, machinery and equipment set forth in the Option Agreement for a purchase price of $ 554,714 for machinery and equipment and 5,000,000 shares of the Company’s common stock were issued on February 12, 2024 to be held in escrow, for intangible assets. In addition, for one year from the date of the Option Agreement, Afritex has an option to purchase up to $ 1,000,000 shares of the Company’s common stock at a 10 % discount to the lowest volume-weighted average price in the immediately prior five days. The sale of any shares acquired by Afritex under the Option Agreement are subject to a “leak-out” provision as set forth in the Option Agreement. The closing of the Option Agreement is subject to, among other things, the successful restructuring of Afritex’s accounts payable debts so that no individual debt of $85,000 or aggregate debt of more than $325,000 is outstanding. The Option Agreement may be terminated if, among others, the closing has not has not occurred within 90 days, unless extended for two additional 30-day periods at the Company’s sole discretion. To date, the Company has not exercised its option to purchase such intangibles assets, machinery and equipment. On March 11, 2024, the Company issued 750,000 shares of common stock to Lind, with a fair value of $ 60,000 , as partial conversion of the principal pursuant to the May 2023 convertible promissory note. F- 27 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.