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., Taste of BC Aquafarms, Inc. (“TOBC”), a wholly owned subsidiary, and Afritex Ventures Inc. (“AFVFL”) a wholly owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

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, 2024 and 2023, 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.

Inventories

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. For the year ended December 31, 2024, the Company recorded an inventory adjustment to reduce the carrying value of inventory to the lower of cost or net realizable value in the amount of $286,319 which was charged to cost of goods sold and an inventory allowance of $1,417,305.

The Company’s inventory as of December 31, 2024 and December 31, 2023 consists of:

Schedule of Inventory

	December 31, 2024			December 31, 2023

Inventory purchased for resale	$	1,644,085		$	1,708,311
Feeds and eggs processed		65,924			102,373
Raw materials for packaged seafood		155,056
In-transit inventory		-			973,837
Less: Inventory allowance		(1,417,305	)		(176,000	)
Inventory, net	$	447,760		$	2,608,521

Fixed Assets

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:

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, 2024 and 2023.

Foreign Currency Translation

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, 2024 was 0.70 Canadian Dollars to U.S. Dollars and for December 31, 2023 was 0.74 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 $185,169 and $55,900 for the years ended December 31, 2024 and December 31, 2023, respectively.

Deferred Income

Deferred Income

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

Advertising

Advertising

The Company expenses the costs of advertising as incurred. Advertising expenses which are included in Other Operating Expenses were approximately $13,000 and $4,500, for the years ended December 31, 2024 and 2023, respectively.

Customer Concentration

Customer Concentration

The Company had five customers which accounted for approximately 48% of revenue during the year ended December 31, 2024. Two customer accounted for 31% of revenue during the year ended December 31, 2024.

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

Fair Value Measurements and Financial Instruments

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, 2024 and 2023.

	Fair Value		Level 1		Level 2		Level 3
	December 31, 2024
			Fair Value Measurement using Fair Value Hierarchy
	Fair Value		Level 1		Level 2		Level 3
Liabilities
Derivative liability on convertible debt	$	49,565	$	-	$	-	$	49,565
Total	$	49,565	$	-	$	-	$	49,565

	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 years ended December 31, 2024 and 2023:

		December 31, 2024			December 31, 2023
Derivative liability balance, beginning of year	$	1,047,049		$	-
Issuance of derivative liability during the period		47,410			383,672
Settlement of derivative liability		(1,384,450	)		-
Change in derivative liability during the period		339,556			663,377
Derivative liability balance, end of year	$	49,565		$	1,047,049

Warrant liability balance, beginning of year	$	1,574		$	-
Issuance of warrant liability during the period		-			5,032,025
Settlement of warrant liability		-			(1,869,986	)
Change in warrant liability during the period		(1,574	)		(3,160,465	)
Warrant liability balance, end of year	$	-			1,574

The fair market value of all derivatives and warrant liability as of December 31, 2023 was determined using the Black-Scholes option pricing model which used the following assumptions:

Stock price	$	7.00
Expected dividend yield		0.00	%
Expected stock price volatility		133.54	%
Risk-free interest rate		4.79	%
Expected term		1.50 years

The fair market value of all derivatives and warrant liability as of December 31, 2024 was determined using the Black-Scholes option pricing model which used the following assumptions:

Stock price	$	0.13
Expected dividend yield		0.00	%
Expected stock price volatility		189.14	%
Risk-free interest rate		4.32	%
Expected term		0.58 years

Stock-Based Compensation

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.

Income Taxes

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, 2024 or 2023.