Blue Star Foods Corp. 10-K

ITEM 3. LEGAL PROCEEDINGS On January 17, 2025, the Company, through TOBC, filed a lawsuit in the Supreme Court of British Columbia against Harold Steven Atkinson, Janet Atkinson and Ben Atkinson (the “Defendants”) for breach of contract, tort of intentional interference with economic relations, breach of confidentiality and non-compete, breach of trust, breach of fiduciary duty, defamation, breach of duty of honest performance and good faith, and damages. The Company claims that Harold Steven Atkinson purposely hid the renewal process of the Fisheries and Oceans Canada – Freshwater / Land-based Aquaculture License (the “License”) and placed the License in his personal name when it should be in the name of TOBC. The License is required to operate the aquaculture farm, including the transfer of eggs and fingerlings to its facilities. While the dispute of who controls the License is ongoing, management believes that the Company can continue to operate as the licensed facility pertains to TOBC. On March 4, 2026, Taste of BC Aquafarms Inc. (the “Company”) filed a Notice of Application in the Supreme Court of British Columbia (Nanaimo Registry) in connection with a dispute with the landlords of the property located at 2930 Jameson Road, Nanaimo, British Columbia. The application seeks, among other things, reconsideration and setting aside of a February 23, 2026 order that terminated the Company’s lease and granted the landlords immediate possession of the property. The Company also seeks relief from forfeiture and reinstatement of the lease, or alternatively other interim and related relief. The Company’s application asserts that the order was made following a hearing at which the Company did not appear and that certain relevant facts were not before the Court, including that basic rent payments had been made within the time permitted under the lease and that the parties were engaged in mediation regarding a dispute over alleged additional rent & operational contradicting views under the lease. A hearing on the application was held on March 9, 2026. The presiding judge reserved judgment, and a decision has not yet been issued. The Company cannot predict the outcome of the proceeding or whether the requested relief will be granted. The Company, together with its subsidiaries, has initiated legal proceedings against an Indonesian seafood supplier, in the U.S. District Court for the Southern District of Florida. The complaint alleges breach of contract, violation of the Florida Deceptive and Unfair Trade Practices Act, and unjust enrichment arising from shipments delivered in 2022. According to the complaint, certain product lots supplied were determined to be rancid and unmarketable following customer complaints and third-party laboratory testing. The Company asserts that it incurred approximately $0.250 million in direct product losses, in addition to other related costs. The Company is seeking monetary damages, including consequential damages, as well as other relief. The outcome of this matter is currently uncertain, and no assurance can be given regarding the timing or ultimate resolution. The Company is waiting for the Defendants to respond and a court date to be granted. The Company cannot provide any assurance as to the timing of resolution or outcome of this matter. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 PART II