BLUE STAR FOODS CORP.(BSFC) S-1 filing Filed On Dec 08, 2023

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BLUE STAR FOODS CORP.

Date Filed : Dec 08, 2023

View Exhibits

RegistrationNo. 333-______

Asfiled with the Securities and Exchange Commission on [ ], 2023

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORMS-1

REGISTRATIONSTATEMENT UNDER THE SECURITIES ACT OF 1933

BLUESTAR FOODS CORP.

(Exactname of registrant as specified in its charter)

Delaware	3510	82-4270040
(State or jurisdiction of	(Primary Standard Industrial	(I.R.S. Employer
incorporation or organization)	Classification Code Number)	Identification Number)

JohnKeeler

ChiefExecutive Officer and Executive Chairman

BlueStar Foods Corp.

3000NW 109th Avenue

Miami,Florida 33172

(305)836-6858

(Name,address, including zip code, and telephone number, including area code, of agent for service)

Copiesto:

MarkCrone, Esq.

JosephLaxague, Esq.

TheCrone Law Group, P.C.

420Lexington Avenue, Suite 2446

NewYork, New York 10170

mcrone@cronelawgroup.com

jlaxague@cronelawgroup.com

Telephone:(646) 861-7891

Approximatedate of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

Ifany of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under theSecurities Act of 1933 check the following box. ☒

Ifthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check thefollowing box and list the Securities Act registration statement number of the earlier effective registration statement for the sameoffering. ☐

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list theSecurities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☒

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complyingwith any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

THEREGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THEREGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVEIN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATEAS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

Theinformation in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registrationstatement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor doesit seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS SUBJECT TO COMPLETION

DATED [ ], 2023

BLUESTAR FOODS CORP.

19,876,735shares of Common Stock

Thisprospectus relates to the potential offer and resale by the selling stockholders identified in this prospectus or their permitted transferees(the “Selling Stockholders”) of 19,876,735 shares of our common stock, $0.0001par value per share, (the “CommonStock”) consisting of (i) up to 2,761,668 shares issuable upon conversion of the principal and accrued interest at maturityof two convertible promissory notes in the aggregate principal amount of $1,500,000 in total, each issued to Lind Global Fund II LP (“Lind“) on May 30, 2023 and July 27, 2023, respectively (collectively the “Lind Notes”), (ii) warrants to purchase upto 435,035 shares of Common Stock (at an exercise price of $2.45 per share), issuedto Lind on May 30, 2023, and (iii) up to 16,680,032 shares issuable pursuant to that certain purchase agreement (the “ELOCPurchase Agreement”) dated May 16, 2023, by and between ClearThink Capital Partners, LLC (“ClearThink”) and us. Seethe section of this prospectus entitled “Offering” for a description of the transactions and the section entitled “SellingStockholders” for additional information about the Selling Stockholders.

Theregistration of the shares of our Common Stock covered by this prospectus does not necessarily mean that any shares of our Common Stockwill be sold by any of the Selling Stockholders, and we cannot predict when or in what amounts any of the Selling Stockholdersmay sell any of our shares of Common Stock offered by this prospectus.

Theselling stockholders, or their respective transferees, pledgees, donees or other successors-in-interest, may sell the Common Stock throughpublic or private transactions at prevailing market prices, at prices related to prevailing market prices or at privately negotiatedprices. The Selling Stockholders may sell any, all or none of the securities offered by this prospectus, and we do not know whenor in what amount the Selling Stockholders may sell their shares of Common Stock hereunder following the effective date of thisregistration statement. We provide more information about how a Selling Stockholder may sell its shares of Common Stock in the sectiontitled “Plan of Distribution” on page 31.

Thereis currently a limited public trading market for our Common Stock.

OurCommon Stock is listed on the Nasdaq Capital Market under the symbol “BSFC.” The last reported sale price of our common stockon the Nasdaq Capital Market on December 7, 2023, was $0.15 per share.

Weare registering the shares of Common Stock on behalf of the Selling Stockholders, to be offered and sold by them from time to time. Wewill not receive any proceeds from the sale of the Common Stock by the Selling Stockholders in the offering described in this prospectus.We have agreed to bear all of the expenses incurred in connection with the registration of the Common Stock. The Selling Stockholderswill pay or assume discounts, commissions, fees of underwriters, selling brokers or dealer managers and similar expenses, if any, incurredfor the sale of the Common Stock.

Investingin our securities involves a high degree of risk. Before making any investment decision, you should carefully review and consider allthe information in this prospectus and the documents incorporated by reference herein, including the risks and uncertainties describedunder “Risk Factors” beginning on page 11.

NEITHERTHE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINEDIF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Wemay amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read the entireprospectus and any amendments or supplements carefully before you make your investment decision.

Weare an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”).

Thedate of this prospectus is _________, 2023.

BLUESTAR FOODS CORP.

TABLEOF CONTENTS

	Page
Special Note About Forward-Looking Statements	4
Prospectus Summary	5
Risk Factors	11
Use of Proceeds	29
Determination of the Offering Price	29
Market Price of and Dividends on the Company’s Common Equity and Related Stockholder Matters	29
Selling Stockholders	29
Plan of Distribution	31
Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Description of Business	45
Management	56
Executive Compensation	60
Director Compensation	65
Security Ownership of Certain Beneficial Owners & Management	67
Certain Relationships and Related Transactions, and Corporate Governance	68
Description of Securities	70
Shares Eligible for Future Sale	75
Legal Matters	76
Experts	76
Additional Information	76
Financial Statements	F-1

Youshould rely only on the information contained in this prospectus. Neither we, nor the Selling Stockholders have authorized anyone toprovide information different from that contained in this prospectus. The Selling Stockholders are offering to sell, and seeking offersto buy, shares of Common Stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectusis accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our CommonStock.

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS

Thisprospectus and any documents incorporated by reference herein and therein may contain forward looking statements that involve significantrisks and uncertainties. All statements other than statements of historical fact contained in this prospectus and the documents incorporatedby reference herein, including statements regarding future events, our future financial performance, business strategy, and plans andobjectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statementsby terminology including “anticipates,” “believes,” “can,” “continue,” “could,”“estimates,” “expects,” “intends,” “may,” “plans,” “potential,”“predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Althoughwe do not make forward looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy.These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlinedunder “Risk Factors” or elsewhere in this prospectus and the documents incorporated by reference herein, which may causeour or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-lookingstatements. Moreover, we operate in a highly regulated, very competitive, and rapidly changing environment. New risks emerge from timeto time and it is not possible for us to predict all risk factors, nor can we address the impact of all factors on our business or theextent to which any factor, or combination of factors, may cause our actual results to differ materially from those contained in anyforward-looking statements.

Wehave based these forward-looking statements largely on our current expectations and assumptions about future events and financial trendsthat we believe may affect our financial condition, results of operations, business strategy, short term and long term business operations,and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual resultsto differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differencesinclude, but are not limited to, those discussed in this prospectus, and in particular, the risks discussed below and under the heading“Risk Factors” and those discussed in other documents we file with the SEC which are incorporated by reference herein.

Weundertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as requiredby law. In light of the significant risks, uncertainties and assumptions that accompany forward-looking statements, the forward-lookingevents and circumstances discussed in this prospectus may not occur and actual results could differ materially and adversely from thoseanticipated or implied in the forward-looking statement.

Youshould not place undue reliance on any forward-looking statement, each of which applies only as of the date of this prospectus. Exceptas required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of thisprospectus to conform our statements to actual results or changed expectations.

Anyforward-looking statement you read in this prospectus, or any document incorporated by reference reflects our current views with respectto future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, operating results,growth strategy and liquidity. You should not place undue reliance on these forward-looking statements because such statements speakonly as to the date when made. We assume no obligation to publicly update or revise these forward-looking statements for any reason,or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if newinformation becomes available in the future, except as otherwise required by applicable law. You are advised, however, to consult anyfurther disclosures we make on related subjects in our reports on Forms 10-Q, 8-K, and 10-K filed with the SEC. You should understandthat it is not possible to predict or identify all risk factors. Consequently, you should not consider any such list to be a completeset of all potential risks or uncertainties.

PROSPECTUSSUMMARY

Weare an international sustainable marine protein company that owns and operates several portfolio companies with an emphasis on environmental,social and governance values. We seek to create a vertically integrated seafood company that offers customers high quality products whilemaintaining a focus on our core values of delivering food safety, traceability and certified resource sustainability. Our companies include:

	John Keeler & Co., Inc. (“Keeler & Co.”) doing business as Blue Star Foods, which imports, packages and sells refrigerated pasteurized crab meat sourced primarily from Southeast Asia and other premium seafood products;

	Coastal Pride Seafood, LLC (“Coastal Pride”) which imports pasteurized and fresh crab meat sourced primarily from Mexico and Latin America and sells premium branded label crab meat throughout North America; and

	Taste of BC Aquafarms, Inc. (“TOBC”), a land-based recirculating aquaculture systems (“RAS”) salmon farming operation, which sells its steelhead salmon to distributors in Canada.

Wedistribute our imported blue and red swimming crabmeat in the United States under the brand names Blue Star, Pacifika, Oceanica, Crab& Go Premium Seafood, First Choice, Good Stuff and Coastal Pride Fresh and steelhead salmon and rainbow trout fingerlings producedby TOBC under the brand name Little Cedar Falls.

BlueStar is packed with only high quality Portunus Pelagicus species crab and is produced under exacting specifications and quality controlrequirements.

Pacifikais a quality brand for the price conscious end user. The Portunus Haanii crab meat is packed in China and is ideal for upscale platepresentations.

Oceanicais made from the Portunus Haanii crab, which is caught and processed in Vietnam. It is an affordable choice to help reduce food costwithout sacrificing the look/taste of dishes.

Crab+ Go Premium Seafood is geared towards millennials as part of the trend toward pre-packaged, grab-and-go items. The product is packagedin flexible foil pouches.

LubkinBrand is packed with quality Portunus Pelagicus species crab in the Philippines and Indonesia.

FirstChoice is a quality brand packed with Portunus Haanii crab meat from Malaysia.

GoodStuff is a premium brand packed with high quality Callinectes species crab from Mexico.

CoastalPride Fresh is packed with Callinectes Sapidus from Venezuela and the United States.

Steelheadsalmon and rainbow trout fingerlings are produced by TOBC under the Little Cedar Falls brand. The fish are sashimi grade and only soldas a fresh item, usually reaching end users within days of harvest.

CompetitiveStrengths

Sustainableand Traceable Product Sourcing. We believe that our greatest point of differentiation from other seafood companies is our effortsto ensure that our seafood products are ethically sourced in a method that is consistent with our core values and those of our customers.

ProprietaryBrands. We have created several brands of crab meat that are well regarded amongst our customers and are differentiated by productquality and price point.

Eco-FriendlyPackaging. Another major point of differentiation from our competitors is our use of sustainable and ethical packaging. Our greenpouches for Eco-Fresh crab meat are patented in the United States, Europe, Thailand, the Philippines and Indonesia under patent Nos.1526091B1 and US Patents 8,337,922 and 8,445,046. We believe since their introduction in 2003, these pouches have saved in excess of a millionmetric tons of carbon dioxide emissions versus metal can packaging material.

Weintend to grow our business in several ways, including:

Ourlong-term strategy is to create a vertically integrated seafood company that offers customers high quality products while maintaininga focus on our core values of delivering food safety, traceability and certified resource sustainability. We plan to grow the Companyorganically by continuing to increase our customer base and by introducing new high-value product lines and categories, as well as strategicallyacquiring companies that focus on additional species and proprietary technologies that we believe we can integrate into a larger, diversifiedcompany.

Growingour existing businesses. The three current existing businesses each have different pathways to organic growth, including by increasingtheir reliable access to sustainably sourced marine product and supplying to a larger and more diversified customer base. Our key objectiveis to optimize the management of the companies across all companies, specifically in the marketing, sourcing and financing departments.

StrategicAcquisitions. We will continue to seek opportunities to acquire companies that allow us to expand into new territories, diversifyour species product categories, and where operational synergies with our existing companies may exist. We believe that we may have theability to layer on a sustainability model to certain companies that operate in a more traditional way, with an opportunity to increasemargins by selling a more premium product.

Scalingthe RAS Business. We have an internal goal to reach production of 21,000 metric tons of steelhead salmon by 2028. If we can successfullyaccess the necessary funding through the equity capital markets and through certain debt facilities, we hope to build a series of 1,500metric ton and 3,000 metric ton facilities throughout strategic locations in British Columbia, Canada, where TOBC is currently based.

Wepurchase crab meat directly from six processors with which we have long-standing relationships, that have agreed to source their productin a sustainable manner. All crab meat is sourced under the Company’s FDA approved HACCP Plan. Additionally, all suppliers arecertified grade A by the BRC and are audited annually to ensure safety and quality.

TheCompany had five major suppliers located in the United States, Indonesia, Vietnam and China which accounted for approximately 76% ofthe Company’s total purchases during the year ended December 31, 2022. The Company’s largest supplier is located in Indonesiaand accounted for 29% of the Company’s total purchases in the year ended December 31, 2022.

TheCompany’s products are sold in the United States and Canada. Its primary current source of revenue is importing blue and red swimmingcrab meat primarily from Indonesia, the Philippines and China and distributing it in the United States and Canada under several brandnames such as Blue Star, Oceanica, Pacifika, Crab & Go, Lubkin’s Coastal Pride, First Choice, Good Stuff, Coastal Pride Freshand TOBC steelhead salmon and rainbow trout fingerlings produced under the brand name Little Cedar Falls.

TheCompany stores its crab meat inventory at a third-party facility in Miami, Florida and distribution takes place from this facility.

TheCompany has a sales team based throughout the United States who sell directly to customers, most of whom are in the food service andretail industry and also manage a network of regional and national brokers, that cover both the retail and wholesale segments. The salesteam and brokers help to pull the products through the system by creating demand at the end user level and pulling the demand throughour distributor customers. The Company sells to retail customers either directly or via distributors that specialize in the retail segment.

TheCompany does not own its own fleet of trucks and utilizes less than truckload freight shipping (“LTL”) national freight carriersto deliver its products to its customers. LTL is used for the transportation of small freight or when freight does not require the useof an entire trailer. When shipping LTL, the Company pays for a portion of a standard truck trailer, and other shippers and their shipmentsfill the unoccupied space.

RecentEvents

PublicOffering

OnSeptember 11, 2023, the Company sold in an underwritten public offering pursuant to a securities purchase agreement, an aggregate of690,000 shares of its Common Stock, Series A-1 warrants to purchase up to 10,741,139 shares of Common Stock, Series A-2 warrants to purchaseup to 10,741,139 shares of Common Stock (collectively, the “Common Warrants”) and pre-funded warrants to purchase up to 10,051,139shares of Common Stock (the “Pre-Funded Warrants”). Each share of Common Stock and Pre-Funded Warrants were sold togetherwith a Series A-1 Common Stock purchase warrant to purchase one share of Common Stock and a Series A-2 Common Stock purchase warrantto purchase one share of Common Stock. The public offering price for each share of Common Stock and accompanying Common Warrants was$0.4655. Each Common Warrant has an exercise price of $0.4655 per share, and will be exercisable beginning on the effective date of stockholderapproval of the issuance of the shares upon exercise of the Common Warrants (“Warrant Stockholder Approval”). The SeriesA-1 warrants will expire on the five-year anniversary of the effective date of Warrant Stockholder Approval. The Series A-2 warrantswill expire on the eighteen-month anniversary of the effective date of Warrant Stockholder Approval. The public offering price was $0.4555per Pre-funded Warrant and accompanying Common Warrants. The Pre-funded Warrants are immediately exercisable and have an exercise priceof $0.01 per share.

H.C.Wainwright & Co., LLC, acted as placement agent for the offering and received a fee of 7% of the gross proceeds and reimbursementof $35,000 in non-accountable expenses and $100,000 of legal fees and out-of-pocket expenses.

NASDAQCompliance

OnSeptember 26, 2023, the Company received notice from NASDAQ that based upon the closing bid price of its Common Stock for the last 30consecutive business days, the Company was not in compliance with the requirement to maintain a minimum bid price of $1.00 per share(the “Minimum Bid Requirement”). The Company has 180 days, or until March 24, 2024, to regain compliance with NASDAQ ListingRule 5550(a)(2). If at any time before March 24, 2024, the closing bid price of the Company’s Common Stock closes at or above $1.00per share for a minimum of ten consecutive business days, NASDAQ will provide written notification that the Company has achieved compliancewith the Minimum Bid Requirement, and the matter would be resolved. If the Company does not regain compliance with the Minimum Bid Requirementduring the initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period if it meetsall other applicable listing standards.

TheCompany will continue to actively monitor the closing bid price of its Common Stock and will seek to regain compliance with all applicableNASDAQ requirements within the allotted compliance periods. If the Company does not regain compliance within the allotted complianceperiods, including any extensions that may be granted by NASDAQ, the Company’s Common Stock may be subject to delisting.

MinimumStockholder’s Equity

TheCompany was notified on May 23, 2023 by NASDAQ that it no longer complied with the minimum $2,500,000 stockholders’ equity requiredfor continued listing on NASDAQ. At a hearing with NASDAQ on June 29, 2023, the Company’s request for continued listing on TheNASDAQ Capital Market was granted, subject to filing a registration statement with the SEC for a $5 million public offering by July 28,2023 and demonstrating compliance with the minimum stockholders’ equity requirement by August 18, 2025, which date was extendedto September 15, 2023.On September 11, 2023, the Company closed its $5 million public offering. On October 16, 2023, NASDAQ notifiedthe Company that it had regained compliance with the minimum $2,500,000 stockholders’ equity requirement. However, the Companywill be subject to a mandatory panel monitor until October 16, 2024. If, within that one-year monitoring period, NASDAQ finds the Companyout of compliance, the Company will have an opportunity to request a new hearing on the matter.

TheCompany was notified on November 27, 2023 by NASDAQ that it no longer complied with the minimum $2,500,000 stockholders’ equityrequired for continued listing on NASDAQ. As the Company is subject to a mandatory panel monitor for a period of one year, we are noteligible for a compliance period. On December 4, 2023, the Company requested a hearing with the Hearings Panel, which has been scheduledfor March 28, 2024.

Implicationsof Being an Emerging Growth Company and Smaller Reporting Company

Wequalify as an “emerging growth company” under the Jumpstart our Business Startups Act (“JOBS Act”). As a result,we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growthcompany, we will not be required to:

	●	have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

	●	comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

	●	submit certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency” and pay ratio; and

	●	disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.

Inaddition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition periodprovided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

Inother words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwiseapply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statementsmay therefore not be comparable to those of companies that comply with such new or revised accounting standards.

Wewill remain an “emerging growth company” for up to five years from the date of the first sale of our Common Stock of theissuer pursuant to an effective registration statement, or until the earliest of (i) the last day of the first fiscal year in which ourtotal annual gross revenues exceed $1.07 billion, (ii) the date that we become a “large accelerated filer” as defined inRule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock that is held by non-affiliates exceeds $700million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued morethan $1 billion in non-convertible debt during the preceding three year period.

Additionally,we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may takeadvantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our Common Stock heldby non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenuesequaled or exceeded $100 million during such completed fiscal year and the market value of our Common Stock held by non-affiliates equalsor exceeds $700 million as of the end of that year’s second fiscal quarter.

CorporateInformation

Wewere incorporated on October 17, 2017 in the State of Delaware as a blank check company to be used as a vehicle to pursue a businesscombination. Prior to the Merger, we engaged in organizational efforts. Following the Merger, we discontinued our prior activities ofseeking a business for a merger or acquisition and acquired the business of John Keeler & Co. Inc., d/b/a Blue Star Foods, a Floridacorporation formed on May 5, 1995. Our executive offices are located at 3000 NW 109th Avenue, Miami, Florida 33172 and our telephonenumber is (305) 836-6858. Our website address is https://bluestarfoods.com/. Except for any documents that are incorporated byreference into this prospectus that may be accessed from our website, the information available on or through our website is not partof this prospectus.

TheOffering

OnMay 30, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Lind Global Fund IILP, a Delaware limited partnership (“Lind”), pursuant to which the Company issued to Lind a secured, two-year, interest freeconvertible promissory note in the principal amount of $1,200,000 (the “May 2023 Note”) and a Common Stock purchase warrant(the “May 2023 Warrant”) to acquire 435,035 shares of Common Stock of the Company, for the aggregate funding amount of $1,000,000.The conversion price of the May 2023 Note is equal to the lesser of: (i) US$2.40; or (ii) 90% of the lowest single VWAP during the 20trading day period ending on the last trading day immediately preceding the applicable conversion date, subject to customary adjustments.In connection with the issuance of the May 2023 Note and the May 2023 Warrant, the Company paid a $50,000 commitment fee to Lind.

OnJuly 27, 2023, the Company entered into a First Amendment to Securities Purchase Agreement (the “Purchase Agreement Amendment”)with Lind, pursuant to which the Company amended the Purchase Agreement in order to permit the issuance of further senior convertiblepromissory notes in the aggregate principal amount of up to $1,800,000 and common stock purchase warrants in such aggregate amount asthe Company and Lind shall mutually agree pursuant to the Purchase Agreement.

Pursuantto the Purchase Agreement Amendment, the Company issued to Lind a secured, two-year, interest free convertible promissory note in theprincipal amount of $300,000 (the “July 2023 Note”) and a common stock purchase warrant to acquire 175,234 shares of CommonStock of the Company (the “July 2023 Warrant”), for the aggregate funding amount of $250,000. The conversion price of theJuly 2023 Note is equal to the lesser of: (i) US$1.34; or (ii) 90% of the lowest single VWAP during the 20 trading day period endingon the last trading day immediately preceding the applicable conversion date, subject to customary adjustments. The July 2023 Warrantis exercisable at an exercise price of $1.34 per share, subject to customary adjustments. In connection with the issuance of the Noteand the Warrant, the Company paid a $12,500 commitment fee to Lind.

OnMay 16, 2023, the Company entered into a Purchase Agreement (the “ELOC Purchase Agreement”) with ClearThink Capital Partners,LLC (“ClearThink”). Pursuant to the ELOC Purchase Agreement, ClearThink has agreed to purchase from the Company, from timeto time upon delivery by the Company to ClearThink of request notices (each a “Request Notice”), and subject to the otherterms and conditions set forth in the ELOC Purchase Agreement, up to an aggregate of $10,000,000 of the Company’s Common Stock.The purchase price of the shares of Common Stock to be purchased under the ELOC Purchase Agreement will be equal to 80% of the two lowestdaily VWAPs during a valuation period of six trading days, beginning three trading days preceding the draw down or put notice to threetrading days commencing on the first trading day following delivery and clearing of the delivered shares. Each purchase under the ELOCPurchase Agreement will be in a minimum amount of $25,000 and a maximum amount equal to the lesser of (i) $1,000,000 and (ii) 300% ofthe average daily trading value of the Common Stock over the ten days preceding the Request Notice date. In addition, pursuant to theELOC Purchase Agreement, the Company agreed to issue to ClearThink 62,500 restricted shares of the Company’s Common Stock as a“Commitment Fee.”

Inconnection with the ELOC Purchase Agreement, the Company entered into a Registration Rights Agreement with ClearThink under which theCompany agreed to file a registration statement with the Securities and Exchange Commission covering the shares of Common Stock issuableunder the ELOC Purchase Agreement.

OnMay 16, 2023, the Company and ClearThink also entered into a Securities Purchase Agreement (the “SPA”) under which ClearThinkhas agreed to purchase from the Company an aggregate of 91,612 shares of the Company’s restricted Common Stock for a totalpurchase price of $200,000 in four closings. The first closing occurred on the execution date of the SPA and the second, third, and fourthclosings shall be within 60 days after the first closing.

SUMMARYOF THE OFFERING

Thefollowing is a summary of the shares being offered by the Selling Stockholders:

Common Stock offered by Selling Stockholders		19,876,735 shares of common stock, $0.0001par value per share (the “Common Stock”), consisting of (i) up to 2,761,668 shares issuable upon conversion of the principal and accrued interest at maturity of two convertible promissory notes in the aggregate principal amount of $1,500,000 in total, issued to Lind Global Fund II LP (“Lind “) on May 30, 2023 and July 27, 2023, respectively (collectively the “Lind Note), (ii) warrants to purchase up to 435,035 shares of Common Stock (at an exercise price of $2.45 per share), issued to Lind on May 30, 2023, and (iii) up to 16,680,032 issuable pursuant to that certain purchase agreement (the “ELOC Purchase Agreement”) dated May 16, 2023, by and between ClearThink Capital Partners, LLC (“ClearThink”) and us.

Common Stock outstanding prior to the offering		14,450,350 shares

Nasdaq Capital Market Symbol		BSFC

Use of proceeds		We will not receive any proceeds from the sale of shares of our Common Stock by the Selling Stockholders.

Risk factors		You should carefully read “Risk Factors” in this prospectus for a discussion of factors that you should consider before deciding to invest in our Common Stock.

Thenumber of shares of our Common Stock that will be outstanding immediately after this offering is based on 14,450,350 shares of CommonStock outstanding as of December 8, 2023 and excludes an aggregate of 997,220 shares of Common Stock issuable upon theexercise of stock options and warrants as follows:

●

266,276 shares of our common stock issuable upon the exercise of stock options;

●

730,944 shares of our common stock issuable upon exercise of warrants;

●

Approximately 50,000 shares of our common stock that may be issued upon exercise of a common stock purchase warrant that we issued to Lind Global Fund II LP, a Delaware limited partnership, on January 24, 2022, each of which is subject to potential anti-dilution adjustment as a result of this offering;

●

Approximately 11,046,672 shares of our common stock that may be issued upon conversion of a secured, two-year, interest-free convertible promissory note and 435,035 shares of our common stock that may be issued upon exercise of a common stock purchase warrant that we issued to Lind Global Fund II LP on May 30, 2023, each of which is subject to potential anti-dilution adjustment as a result of this offering; and

●

Approximately 2,761,668 shares of our common stock that may be issued upon conversion of a secured, two-year, interest-free convertible promissory note and 175,234 shares of our common stock that may be issued upon exercise of a common stock purchase warrant that we issued to Lind Global Fund II LP on July 27, 2023, each of which is subject to potential anti-dilution adjustment as a result of this offering.

RISKFACTORS

Investingin our Common Stock involves a high degree of risk. Before investing in our Common Stock, you should carefully consider the risks describedbelow, as well as the other information in this prospectus, including our consolidated financial statements and the related notes. Inaddition, we may face additional risks and uncertainties not currently known to us, or which as of the date of this registration statementwe might not consider significant, which may adversely affect our business. If any of the following risks occur, our business, financialcondition and results of operations could be materially adversely affected. In such case, the trading price of our Common Stock coulddecline due to any of these risks or uncertainties, and you may lose part or all of your investment.

RisksRelated to Our Business and Industry

Theoperation of our planned digital banking platform may subject us to costs and risks associated with various laws and regulations, includingthose relating to data privacy, security and protection. Developments in these and other laws and regulations could harm our business,financial condition or results of operations.

Futureacquisitions may have an adverse effect on our ability to manage our business.

Selectiveacquisitions currently form part of our strategy to further expand our business. If we are presented with appropriate opportunities,we may acquire additional businesses, services or products that are complementary to our core business. Future acquisitions and the subsequentintegration of new companies into ours would require significant attention from management. Future acquisitions would also expose usto potential risks, including risks associated with the assimilation of new operations, services and personnel, unforeseen or hiddenliabilities, the diversion of resources from our existing businesses and technologies, the inability to generate sufficient revenue tooffset the costs and expenses of acquisitions and potential loss of, or harm to, relationships with employees as a result of integrationof new businesses. The diversion of our management’s attention and any difficulties encountered in any integration process couldhave a material adverse effect on our ability to manage our business.

Thevalue of crab meat is subject to fluctuation which may result in volatility of our results of operations and the value of an investmentin the Company.

Ourbusiness is dependent upon the sale of a commodity which value is subject to fluctuation. Our net sales and operating results vary significantlydue to the volatility of the value of the crab meat that we sell which may result in the volatility of the market price of our CommonStock.

Amaterial decline in the population and biomass of crab meat that we sell in the fisheries from which we obtain our crab meat would materiallyand adversely affect our business.

Thepopulation and biomass of crab meat are subject to natural fluctuations which are beyond our control and which may be exacerbated bydisease, reproductive problems or other biological issues and may be affected by changes in weather and the global environment. The overallhealth of a crab or other fish is difficult to measure, and fisheries management is still a relatively inexact science. Since we areunable to predict the timing and extent of fluctuations in the population and biomass of our products, we are unable to engage in anymeasures that might alleviate the adverse effects of these fluctuations. Any such fluctuation which results in a material decline inthe population and biomass in the fisheries from which we obtain our crab meat would materially and adversely affect our business. Ouroperations are also subject to the risk of variations in supply.

Weare subject to the risk of product contamination and product liability claims.

Thesales of our products may involve the risk of injury to consumers. Such injuries may result from tampering by unauthorized personnel,product contamination or spoilage, including the presence of foreign objects, substances, chemicals, or residues introduced during thepacking, storage, handling or transportation phases. While we are subject to governmental inspection and regulations and believe ourfacilities comply in all material respects with all applicable laws and regulations, including internal product safety policies, we cannotbe sure that consumption of our products will not cause a health-related illness in the future or that we will not be subject to claimsor lawsuits relating to such matters. Even if a product liability claim is unsuccessful, the negative publicity surrounding any assertionthat our products caused illness or injury could adversely affect our reputation with existing and potential customers and our brandimage.

Asignificant portion of our revenues are derived from a single product, crab meat, and therefore we are highly susceptible to changesin market demand, which may be affected by factors over which we have limited or no control.

Asignificant portion of our revenues are derived from a single product, crab meat. We therefore are highly susceptible to changes in marketdemand, which may be impacted by factors over which we have limited or no control. Factors that could lead to a decline in market demandfor crab meat include economic conditions and evolving consumer preferences. A substantial downturn in market demand for crab meat mayhave a material adverse effect on our business and on our results of operations.

RisksRelated to Our Industry and TOBC’s RAS Operations

Regulationof the fishing industry may have an adverse impact on our business.

Theinternational community has been aware of and concerned with the worldwide problem of depletion of natural fish stocks. In the past,these concerns have resulted in the imposition of quotas that subject individual countries to strict limitations on the amount of seafoodthat is allowed to be caught or harvested. Environmental groups have been lobbying for additional limitations. If international organizationsor national governments were to impose additional limitations on crab meat or the seafood products we sell, this could have a negativeimpact on our results of operations.

Segmentsof the seafood industry in which we operate are competitive, and our inability to compete successfully could adversely affect our business,results of operations and financial condition.

Wecompete with major integrated seafood companies such as Tri Union Frozen Products, Inc. (Chicken of the Sea Frozen Foods), Phillips Foods,Inc., Harbor Seafood, Inc., and Twin Tails Seafood Corp. in our traditional sustainable seafood business and our primary competitorsin our RAS business are Aquabounty, Atlantic Sapphire, Aquacon, Nordic Aquafarms, Whole Oceans, West Coast Salmon and Pure Salmon. Someof our competitors have the benefit of marketing their products under brand names that have better market recognition than ours or havestronger marketing and distribution channels than we do. Increased competition as to any of our products could result in price reduction,reduced margins and loss of market share, which could negatively affect our profitability. An increase in imported products in the UnitedStates at low prices could also negatively affect our profitability.

Ourinsurance coverage may be inadequate to cover losses we may incur or to fully replace a significant loss of assets.

Ourinvolvement in the fishing industry may result in liability for pollution, property damage, personal injury or other hazards. Althoughwe believe we have obtained insurance in accordance with industry standards to address such risks, such insurance has limitations onliability and/or deductible amounts that may not be sufficient to cover the full extent of such liabilities or losses. In addition, suchrisks may not, in all circumstances, be insurable or, in certain circumstances, we may choose not to obtain insurance to protect againstspecific risks due to the high premiums associated with such insurance or for other reasons. The payment of such uninsured liabilitieswould reduce the funds available to us. If we suffer a significant event or occurrence that is not fully insured, or if the insurer ofsuch event is not solvent, we could be required to divert funds from capital investment or other uses towards covering any liabilityor loss for such events.

Ouroperations, revenue and profitability could be adversely affected by changes in laws and regulations in the countries where we do business.

Thegovernments of countries into which we sell our products, from time to time, consider regulatory proposals relating to raw materials,food safety and markets, and environmental regulations, which, if adopted, could lead to disruptions in distribution of our productsand increase our operational costs, which, in turn, could affect our profitability. To the extent that we increase our product pricesas a result of such changes, our sales volume and revenues may be adversely affected.

Furthermore,these governments may change import regulations or impose additional taxes or duties on certain imports from time to time. These regulationsand fees or new regulatory developments may have a material adverse impact on our operations, revenue and profitability. If one or moreof the countries into which we sell our products bars the import or sale of crab meat or related products, our available market wouldshrink significantly, adversely impacting our results of operations and growth potential.

Adecline in discretionary consumer spending may adversely affect our industry, our operations and ultimately our profitability.

Luxuryproducts, such as premium grade crab meat, are discretionary purchases for consumers. Any reduction in consumer discretionary spendingor disposable income may affect the crab meat industry significantly. Many economic factors outside of our control could affect consumerdiscretionary spending, including the financial markets, consumer credit availability, prevailing interest rates, energy costs, employmentlevels, salary levels, and tax rates. Any reduction in discretionary consumer spending could materially adversely affect our businessand financial condition.

Ourbusiness is affected by the quality and quantity of the salmon that is harvested by TOBC.

Wesell our products in a highly competitive market. The ability of TOBC to successfully sell its salmon and the price therefor, is highlydependent on the quality of the salmon. A number of factors can negatively affect the quality of the salmon sold, including the qualityof the broodstock, water conditions in the farm, the food and additives consumed by the fish, population levels in the tanks, and theamount of time that it takes to bring a fish to harvest, including transportation and processing. Optimal growing conditions cannot alwaysbe assured. Although fish grown in RAS production systems are not subject to the disease and parasite issues that can affect salmon grownin ocean pens, there is the potential for organisms that are ubiquitous to freshwater environments to become pathogenic if the fish aresubjected to stressful conditions or there is an issue with biomass management.

Highstandards for the quality of the product are maintained and if we determine that a harvest has not met such standards, we may be requiredto reduce inventory and write down the value of the harvest to reflect net realizable value. Sub-optimal conditions could lead to smallerharvests and or lower quality fish. Conversely, if we experience better than expected growth rates, we may not be able to process andbring our fish to market in a timely manner, which may result in overcrowding that can cause negative health impacts and/or require cullingour fish population.

Furthermore,if our salmon is perceived by the market to be of lower quality than other available sources of salmon or other fish, we may experiencereduced demand for our product and may not be able to sell our products at the prices that we expect or at all.

Aswe continue to expand our operations and build new farms, we potentially may face additional challenges with maintaining the qualityof our products. We cannot guarantee that we will not face quality issues in the future, any of which could cause damage to our reputation,and a loss of consumer confidence in our products, which could have a material adverse effect on our business results and the value ofour brands.

Ashutdown, damage to any of our farms, or lack of availability of power, fuel, oxygen, eggs, water, or other key components needed forour operations, could result in our prematurely harvesting fish, a loss of a material percentage of our fish in production, a delay inour commercialization plans, and a material adverse effect on our operations, business results, reputation, and the value of our brands.

Aninterruption in the power, fuel, oxygen supply, water quality systems, or other critical infrastructure of an aquaculture facility formore than a short period of time could lead to the loss of a large number of fish. A shutdown of or damage to our farm due to naturaldisaster, shortages of key components to our operations due to a pandemic, reduction in water supply, contamination of our aquifers,interruption in services, or human interference could require us to prematurely harvest some or all of the fish or could result in aloss of our fish in production.

Wealso are dependent on egg availability If we had a disruption in our ability to purchase eggs, we would not be able to continue to stockour farm. We cannot guarantee that any disruptions might not occur in the future, any of which could cause loss of salmon to sell, damageto our reputation, loss of consumer confidence in our products and company, and lost revenues, all of which could have a material adverseeffect on our business results.

Thesuccessful development of our TOBC business depends on TOBC’s ability to efficiently and cost-effectively produce and sell salmonat large commercial scale.

Ourbusiness plans depend on our ability to increase our production capacity through the development of larger farms. We have limited experienceconstructing, ramping up, and managing such large, commercial-scale facilities, and we may not have anticipated all of the factors orcosts that could affect our production, harvest, sale, and delivery of salmon at such a scale. Our salmon may not perform as expectedwhen raised at very large commercial scale, we may encounter operational challenges, control deficiencies may surface, our vendors mayexperience capacity constraints, or our production cost and timeline projections may prove to be inaccurate. Any of these could decreaseprocess efficiency, create delays, and increase our costs. We are also subject to volatility in market demand and prices, such as thedisruption of the salmon market including reduction in market prices for salmon.

Inaddition, competitive pressures, customer volatility and the possible inability to secure established and ongoing customer partnershipsand contracts, may result in a lack of buyers for our fish. Customers of our fish may not wish to follow our terms and conditions ofsale, potentially resulting in a violation of labeling or disclosure laws, improper food handling, nonpayment for product, and similarissues. The competitive landscape for salmon may create challenges in securing competitive pricing for our salmon to reach our competitivegoals. In addition, it is possible that we may not be able to service our customers to meet their expectations regarding fish quality,ongoing harvest supply availability, order processing fill rate, on time or correct deliveries, potential issues with third party processors,and other factors, which could impact our relationships with customers, our reputation, and our business results.

RisksRelated to Our Reliance on Third Parties

Weare dependent on third parties for our operations and our business may be affected by supply chain interruptions and delays.

Ourbusiness is dependent upon our relationships with vendors in Southeast Asia and Latin America for co-packing, processing and shippingproduct to us. If for any reason these companies became unable or unwilling to continue to provide services to us, this would likelylead to a temporary interruption in our ability to import our products until we found another entity that could provide these services.Moreover, if supply chain delays occur, our product will arrive late which will adversely impact our revenue. Failure to find a suitablereplacement, even on a temporary basis, would have an adverse effect on our results of operations.

Wedo not have long-term agreements with many of our customers and suppliers.

Manyof our customers and suppliers operate through purchase orders. Though we have long-term business relationships with many of our customersand suppliers and alternative sources of supply for key items, we do not have long-term agreements with such customers and suppliersand cannot be sure that any of these customers or suppliers will continue to do business with us on the same basis or on terms that arefavorable to us. The termination or modification of any of these relationships may adversely affect our business, financial performanceand results of operations.

RisksRelated to Our Financial Condition and Capital Requirements

Ourindependent registered public accounting firm has included an explanatory paragraph relating to our ability to continue as a going concernin its report on our audited financial statements.

Thereport from our independent registered public accounting firm for the year ended December 31, 2022 includes an explanatory paragraphstating that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubtabout its ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent on its abilityto increase revenues, execute on its business plan to acquire complimentary companies, raise capital and continue to sustain adequateworking capital to finance its operations. If we are unable to do so, our financial condition and results of operations will be materiallyand adversely affected and we may be unable to continue as a going concern.

Weface risks related to the current global economic environment which could harm our business, financial condition and results of operations.

Thestate of the global economy continues to be uncertain. The current global economic conditions and uncertain credit markets, concernsregarding the availability of credit pose a risk that could impact our international relationships, as well as our ability to managenormal commercial relationships with our customers, suppliers and creditors, including financial institutions. Global trade issues andthe impositions of tariffs could also have an adverse effect on our international business activities. If the current global economicenvironment deteriorates, our business could be negatively affected.

Wemay need to raise additional capital to fund our existing commercial operations and develop and commercialize new products and expandour operations.

Basedon our current business plan, we believe the net proceeds from our underwritten offering, together with our current cash and cash equivalentsand cash receipts from sales will enable us to conduct our planned operations for at least the next 12 months. If our available cashbalances, net proceeds from the offering and anticipated cash flow from operations are insufficient to satisfy our liquidity requirementsincluding because of lower demand for our products or due to other risks described herein, we may seek to sell Common Stock or preferredstock or convertible debt securities, enter into an additional credit facility or another form of third-party funding or seek other debtfinancing.

Wemay consider raising additional capital in the future to expand our business, to pursue strategic investments, to take advantage of financingopportunities or for other reasons, including to:

	●	increase our sales and marketing efforts and address competitive developments;

	●	provide for supply and inventory costs;

	●	fund development and marketing efforts of any future products or additional features to then-current products;

	●	acquire, license or invest in new technologies;

	●	acquire or invest in complementary businesses or assets; and

	●	finance capital expenditures and general and administrative expenses

Ourpresent and future funding requirements will depend on many factors, including:

	●	our ability to achieve revenue growth and improve gross margins;

	●	the cost of expanding our operations and offerings, including our sales and marketing efforts;

	●	the effect of competing market developments; and

	●	costs related to international expansion.

Thevarious ways we could raise additional capital carry potential risks. If we raise funds by issuing equity securities, dilution to ourstockholders could result. Any equity securities issued also could provide for rights, preferences or privileges senior to those of holdersof our Common Stock. If we raise funds by issuing debt securities, those debt securities would have rights, preferences and privilegessenior to those of holders of our Common Stock. The terms of debt securities issued or borrowings pursuant to a credit agreement couldimpose significant restrictions on our operations. If we raise funds through collaborations and licensing arrangements, we might be requiredto relinquish significant rights or grant licenses on terms that are not favorable to us.

Weincur significant costs as a result of operating as a public company and our management devotes substantial time to public company compliance.

Asa public company, we incur significant legal, accounting and other expenses due to our compliance with regulations and disclosure obligationsapplicable to us, including compliance with the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), and theDodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) as well as rules implemented by the SEC. Stockholder activism, the current political environment and the current high level of government intervention andregulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs andimpact, in ways we cannot currently anticipate, the manner in which we operate our business. Our management and other personnel devotea substantial amount of time to monitoring of and compliance with, public company reporting obligations. These rules and regulationscause us to incur significant legal and financial compliance costs and make some activities more time consuming and costly.

Tocomply with the requirements of being a public company, we may need to undertake various actions, including implementing internal controlsand procedures. The Sarbanes-Oxley Act requires that we maintain effective disclosure controls and procedures and internal control overfinancial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensurethat information required to be disclosed by us in the reports that we file with the SEC is recorded, processed, summarized and reportedwithin the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the SecuritiesExchange Act of 1934 is accumulated and communicated to our principal executive and financial officers. Any failure to develop or maintaineffective controls could harm our operating results, cause us to fail to meet our reporting obligations or result in a restatement ofprior period financial statements. In the event that we are not able to demonstrate compliance with the Sarbanes-Oxley Act, that ourinternal control over financial reporting is perceived as inadequate or that we are unable to produce timely or accurate financial statements,investors may lose confidence in our operating results and the price of our Common Stock could decline. In addition, if we are unableto continue to meet these requirements, our Common Stock may not be able to continue to meet the eligibility requirements for the NASDAQStock Market.

Ourindependent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control overfinancial reporting until the later of our second annual report or the first annual report required to be filed with the SEC followingthe date we are no longer an “emerging growth company” as defined in the JOBS Act depending on whether we choose to relyon certain exemptions set forth in the JOBS Act. If we are unable to assert that our internal control over financial reporting is effective,or if our independent registered public accounting firm is unable to express an opinion on the effectiveness of our internal controlover financial reporting, we could lose investor confidence in the accuracy and completeness of our financial reports, which could harmour business.

RisksRelated to Administrative, Organizational and Commercial Operations and Growth

Wemay be unable to manage our future growth effectively, which could make it difficult to execute our business strategy.

Weanticipate growth in our business operations. This future growth could create a strain on our organizational, administrative and operationalinfrastructure, including manufacturing operations, quality control, technical support and customer service, sales force management andgeneral and financial administration. Our ability to manage our growth properly will require us to continue to improve our operational,financial and management controls, as well as our reporting systems and procedures. If we are unable to manage our growth effectively,we may be unable to execute our business plan, which could have a material adverse effect on our business and our results of operations.

Ifwe are unable to support demand for our current and our future products, including ensuring that we have adequate resources to meet increaseddemand and mitigate any supply chain delays our business could be harmed.

Asour commercial operations and sales volume grow, we will need to continue to increase our workflow capacity for processing, customerservice, billing and general process improvements and expand our internal quality assurance program, and mitigate any supply chain delayswe could have with our vendors, among other things. We may also need to purchase additional equipment and increase our manufacturing,maintenance, software and computing capacity to meet increased demand. We cannot assure you that any of these increases in scale, expansionof personnel, purchase of equipment or process enhancements will be successfully implemented.

Theloss of our Executive Chairman and Chief Executive Officer or our inability to attract and retain highly skilled officers and key personnelcould negatively impact our business.

Oursuccess depends on the skills, experience and performance of John Keeler, our Executive Chairman and Chief Executive Officer. The individualand collective efforts of such individual will be important as we continue to develop and expand our commercial activities. The lossor incapacity of Mr. Keeler could negatively impact our operations if we experience difficulties in hiring qualified successors. Qualifiedemployees periodically are in great demand and may be unavailable in the time frame required to satisfy our customers’ requirements.Expansion of our business could require us to employ additional personnel. There can be no assurance that we will be able to attractand retain sufficient numbers of skilled employees in the future. The loss of personnel or our inability to hire or retain sufficientpersonnel at competitive rates could impair the growth of our business.

Ifwe were sued for product liability or professional liability, we could face substantial liabilities that exceed our resources.

Themarketing and sale of our products could lead to the filing of product liability claims alleging that our product made users ill. A productliability claim could result in substantial damages and be costly and time-consuming for us to defend.

Wemaintain product liability insurance, but this insurance may not fully protect us from the financial impact of defending against productliability claims. Any product liability claim brought against us, with or without merit, could increase our insurance rates or preventus from securing insurance coverage in the future. Additionally, any product liability lawsuit could lead to regulatory investigations,product recalls or withdrawals, damage our reputation or cause current vendors, suppliers and customers to terminate existing agreementsand potential customers and partners to seek other suppliers, any of which could negatively impact our results of operations.

Weface risks associated with our international business.

Ourinternational business operations are subject to a variety of risks, including:

	●	difficulties with managing foreign and geographically dispersed operations;

	●	having to comply with various U.S. and international laws, including export control laws and the FCPA, and anti-money laundering laws;

	●	changes in uncertainties relating to foreign rules and regulations;

	●	tariffs, export or import restrictions, restrictions on remittances abroad, imposition of duties or taxes that limit our ability to import product;

	●	limitations on our ability to enter into cost-effective arrangements with distributors, or at all;

	●	fluctuations in foreign currency exchange rates;

	●	imposition of limitations on production, sale or export in foreign countries;

	●	imposition of limitations on or increase of withholding and other taxes on remittances and other payments by foreign processors or joint ventures;

	●	imposition of differing labor laws and standards;

	●	economic, political or social instability in foreign countries and regions;

	●	an inability, or reduced ability, to protect our intellectual property, including any effect of compulsory licensing imposed by government action;

	●	availability of government subsidies or other incentives that benefit competitors in their local markets that are not available to us;

	●	difficulties in recruiting and retaining personnel, and managing international operations;

	●	less developed infrastructure; and impositions on operations as a result of the COVID-19 pandemic.

Ifwe expand into other target markets, we cannot assure you that our expansion plans will be realized, or if realized, be successful. Weexpect each market to have particular regulatory and funding hurdles to overcome and future developments in these markets, includingthe uncertainty relating to governmental policies and regulations, could harm our business. If we expend significant time and resourceson expansion plans that fail or are delayed, our reputation, business and financial condition may be harmed.

Ourresults may be impacted by changes in foreign currency exchange rates.

Currently,the majority of our international sales contracts are denominated in U.S. dollars. We pay certain of our suppliers in a foreign currencyand we may pay others in the future in foreign currency. As a result, an increase in the value of the U.S. dollar relative to foreigncurrencies could require us to reduce our selling price or risk making our product less competitive in international markets or our costscould increase. Also, if our international sales increase, we may enter into a greater number of transactions denominated in non-U.S.dollars, which could expose us to foreign currency risks, including changes in currency exchange rates.

Alarger portion of our revenues may be denominated in other foreign currencies if we expand our international operations. Conducting businessin currencies other than U.S. dollars subjects us to fluctuations in currency exchange rates that could have a negative impact on ouroperating results. Fluctuations in the value of the U.S. dollar relative to other currencies impact our revenues, cost of revenues andoperating margins and result in foreign currency translation gains and losses.

Wecould be negatively impacted by violations of applicable anti-corruption laws or violations of our internal policies designed to ensureethical business practices.

Weoperate in a number of countries throughout the world, including in countries that do not have as strong a commitment to anti-corruptionand ethical behavior that is required by U.S. laws or by corporate policies. We are subject to the risk that we, our U.S. employees orour employees located in other jurisdictions or any third parties that we engage to do work on our behalf in foreign countries may takeaction determined to be in violation of anti-corruption laws in any jurisdiction in which we conduct business. Any violation of anti-corruptionlaws or regulations could result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations in certainjurisdictions and might harm our business, financial condition or results of operations. Further, detecting, investigating and resolvingactual or alleged violations is expensive and can consume significant time and attention of our senior management.

Wedepend on our information technology systems, and any failure of these systems could harm our business.

Wedepend on information technology and telecommunications systems for significant elements of our operations. We have developed proprietysoftware for the management and operation of our business. We have installed and expect to expand a number of enterprise software systemsthat affect a broad range of business processes and functional areas, including for example, systems handling human resources, financialcontrols and reporting, contract management, regulatory compliance and other infrastructure operations.

Informationtechnology and telecommunications systems are vulnerable to damage from a variety of sources, including telecommunications or networkfailures, malicious human acts and natural disasters. Moreover, despite network security and back-up measures, some of our servers arepotentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems. Despite the precautionarymeasures we have taken to prevent unanticipated problems that could affect our information technology and telecommunications systems,failures or significant downtime of our information technology or telecommunications systems or those used by our third-party serviceproviders could prevent us from providing support services and product to our customers and managing the administrative aspects of ourbusiness. Any disruption or loss of information technology or telecommunications systems on which critical aspects of our operationsdepend could harm our business.

Ouroperations are vulnerable to interruption or loss due to natural or other disasters, power loss, strikes and other events beyond ourcontrol.

Weconduct a significant portion of our activities, including administration and data processing, at facilities located in Southern Floridathat have experienced major hurricanes and floods which could affect our facilities, significantly disrupt our operations, and delayor prevent product shipment during the time required to repair, rebuild or replace damaged processing facilities. Our suppliers in SoutheastAsia and Latin America are also vulnerable to natural disasters which could disrupt their operations and their ability to supply productto us. If any of our customers’ facilities are negatively impacted by a disaster, product shipments could be delayed. Additionally,customers may delay purchases of products until operations return to normal. Even if we and/or our suppliers are able to quickly respondto a disaster, the ongoing effects of the disaster could create some uncertainty in the operations of our business. In addition, ourfacilities may be subject to a shortage of available electrical power and other energy supplies. Any shortages may increase our costsfor power and energy supplies or could result in blackouts, which could disrupt the operations of our affected facilities and harm ourbusiness.

RisksRelated to Intellectual Property

Ourintellectual property rights are valuable, and any inability to adequately protect, or uncertainty regarding validity, enforceabilityor scope of them could undermine our competitive position and reduce the value of our products, services and brand, and litigation toprotect our intellectual property rights may be costly.

Weattempt to strengthen and differentiate our product portfolio by developing new and innovative products and product improvements. Asa result, our patents, trademarks, trade secrets, copyrights and other intellectual property rights are important assets to us. Variousevents outside of our control pose a threat to our intellectual property rights as well as to our products and services. For example,effective intellectual property protection may not be available in countries in which our products are sold. Also, although we have registeredour trademark in various jurisdictions, our efforts to protect our proprietary rights may not be sufficient or effective. Any significantimpairment of our intellectual property rights could harm our business or our ability to compete. Litigation might be necessary to protectour intellectual property rights and any such litigation may be costly and may divert our management’s attention from our corebusiness. An adverse determination in any lawsuit involving our intellectual property is likely to jeopardize our business prospectsand reputation. Although we are not aware of any of such litigation, we have no insurance coverage against litigation costs, and we wouldbe forced to bear all litigation costs if we cannot recover them from other parties. All foregoing factors could harm our business, financialcondition, and results of operations. Any unauthorized use of our intellectual property could harm our operating results.

Wemay be exposed to infringement or misappropriation claims by third parties, which, if determined against us, could adversely affect ourbusiness and subject us to significant liability to third parties.

Oursuccess mainly depends on our ability to use and develop our technology and product designs without infringing upon the intellectualproperty rights of third parties. We may be subject to litigation involving claims of patent infringement or violations of other intellectualproperty rights of third parties. Holders of patents and other intellectual property rights potentially relevant to our product offeringsmay be unknown to us, which may make it difficult for us to acquire a license on commercially acceptable terms. There may also be technologieslicensed to us and that we rely upon that are subject to infringement or other corresponding allegations or claims by third parties whichmay damage our ability to rely on such technologies. In addition, although we endeavor to ensure that companies that work with us possessappropriate intellectual property rights or licenses, we cannot fully avoid the risks of intellectual property rights infringement createdby suppliers of components used in our products or by companies we work with in cooperative research and development activities. Ourcurrent or potential competitors may obtain patents that will prevent, limit or interfere with our ability to make, use or sell our products.The defense of intellectual property claims, including patent infringement suits, and related legal and administrative proceedings canbe both costly and time consuming, and may significantly divert the efforts and resources of our technical personnel and management.These factors could effectively prevent us from pursuing some or all of our business operations and result in our customers or potentialcustomers deferring, canceling or limiting their purchase or use of our products, which may have a material adverse effect on our business,financial condition and results of operations.

Ourcommercial success will depend in part on our success in obtaining and maintaining issued patents and other intellectual property rightsin the United States and elsewhere. If we do not adequately protect our intellectual property, competitors may be able to use our processesand erode or negate any competitive advantage we may have, which could harm our business.

Wecannot provide any assurances that any of our patents have, or that any of our pending patent applications that mature into issued patentswill include, claims with a scope sufficient to protect our products, any additional features we develop or any new products. Patents,if issued, may be challenged, deemed unenforceable, invalidated or circumvented.

Furthermore,though an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability andit may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products. Competitorsmay also be able to design around our patents. Other parties may develop and obtain patent protection for more effective technologies,designs or methods. We may not be able to prevent the unauthorized disclosure or use of our knowledge or trade secrets by consultants,suppliers, vendors, former employees and current employees. The laws of some foreign countries do not protect our proprietary rightsto the same extent as the laws of the United States, and we may encounter significant problems in protecting our proprietary rights inthese countries. If any of these developments were to occur, they each could have a negative impact on our sales.

Ifwe are unable to protect the confidentiality of our trade secrets, our business and competitive position could be harmed.

Werely upon copyright and trade secret protection, as well as non-disclosure agreements and invention assignment agreements with our employees,consultants and third parties, to protect our confidential and proprietary information. In addition to contractual measures, we try toprotect the confidential nature of our proprietary information using physical and technological security measures. Such measures maynot, for example, in the case of misappropriation of a trade secret by an employee or third party with authorized access, provide adequateprotection for our proprietary information. Our security measures may not prevent an employee or consultant from misappropriating ourtrade secrets and providing them to a competitor, and recourse we take against such misconduct may not provide an adequate remedy toprotect our interests fully. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret can be difficult, expensiveand time-consuming, and the outcome is unpredictable. In addition, trade secrets may be independently developed by others in a mannerthat could prevent legal recourse by us. If any of our confidential or proprietary information, such as our trade secrets, were to bedisclosed or misappropriated, or if any such information was independently developed by a competitor, our competitive position couldbe harmed.

Wemay not be able to enforce our intellectual property rights throughout the world.

Thelaws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Manycompanies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions.This could make it difficult for us to stop the infringement or the misappropriation of our intellectual property rights. Many foreigncountries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countrieslimit the enforceability of patents against third parties, including government agencies or government contractors. In these countries,patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensiveand time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, andwe will not have the benefit of patent protection in such countries.

Proceedingsto enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts from other aspects ofour business. Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate. In addition,changes in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequateprotection for our technology and the enforcement of intellectual property.

Thirdparties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated tradesecrets.

Althoughwe try to ensure that our employees and consultants do not use the proprietary information or know-how of others in their work for us,we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used ordisclosed intellectual property, including trade secrets or other proprietary information, of a former employer or other third parties.Litigation may be necessary to defend against these claims. If we fail in defending any such claims, in addition to paying monetary damages,we may lose valuable intellectual property rights or personnel. Even if we are successful in defending against such claims, litigationcould result in substantial costs and be a distraction to management and other employees.

RisksRelated to Regulatory Matters

Ourproducts and operations are subject to government regulation and oversight both in the United States and abroad, and our failure to complywith applicable requirements could harm our business.

TheFDA and other government agencies regulate, among other things, with respect to our products and operations:

	●	design, development and manufacturing;

	●	testing, labeling, content and language of instructions for use and storage;

	●	product safety;

	●	marketing, sales and distribution;

	●	record keeping procedures;

	●	advertising and promotion;

	●	recalls and corrective actions; and

	●	product import and export.

Theregulations to which we are subject are complex and have tended to become more stringent over time. Regulatory changes could result inrestrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales.

Thefailure to comply with applicable regulations could jeopardize our ability to sell our products and result in enforcement actions suchas:

	●	warning letters;

	●	fines;

	●	injunctions;

	●	civil penalties;

	●	termination of distribution;

	●	recalls or seizures of products;

	●	delays in the introduction of products into the market; and

	●	total or partial suspension of production.

Wemay also be required to take corrective actions, such as installing additional equipment or taking other actions, each of which couldrequire us to make substantial capital expenditures. We could also be required to indemnify our employees in connection with any expensesor liabilities that they may incur individually in connection with regulatory action against them. As a result, our future business prospectscould deteriorate due to regulatory constraints, and our profitability could be impaired by our obligation to provide such indemnificationto our employees.

Anyof these sanctions could result in higher than anticipated costs or lower than anticipated sales and harm our reputation, business, financialcondition and results of operations.

Productliability claims could divert management’s attention from our business, be expensive to defend and result in sizeable damage awardsagainst us that may not be covered by insurance.

RisksRelating to Our Common Stock

Theprice of our Common Stock may be volatile and may be influenced by numerous factors, some of which are beyond our control.

Factorsthat could cause volatility in the market price of our Common Stock include:

	●	actual or anticipated fluctuations in our financial condition and operating results;

	●	actual or anticipated changes in our growth rate relative to our competitors;

	●	commercial success and market acceptance of our products;

	●	success of our competitors in commercializing products;

	●	strategic transactions undertaken by us;

	●	additions or departures of key personnel;

	●	product liability claims;

	●	prevailing economic conditions;

	●	disputes concerning our intellectual property or other proprietary rights;

	●	U.S. or foreign regulatory actions affecting us or our industry;

	●	sales of our Common Stock by our officers, directors or significant stockholders;

	●	future sales or issuances of equity or debt securities by us;

	●	business disruptions caused by natural disasters; and

	●	issuance of new or changed securities analysts’ reports or recommendations regarding us.

Inaddition, the stock markets in general have experienced extreme volatility that have been often unrelated to the operating performanceof the issuer. These broad market fluctuations may negatively impact the price or liquidity of our Common Stock. In the past, when theprice of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the issuer.If any of our stockholders were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attentionof our management would be diverted from the operation of our business.

Weare an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to emerging growthcompanies will make our Common Stock less attractive to investors.

Weare an “emerging growth company,” as defined in the JOBS Act, and may take advantage of certain exemptions from various reportingrequirements that are applicable to other public companies that are not “emerging growth companies,” including not beingrequired to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligationsregarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbindingadvisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannotpredict if investors will find our Common Stock less attractive because we may rely on these exemptions. If some investors find our CommonStock less attractive as a result, there may be a less active trading market for our Common Stock and our stock price may be more volatile.

Inaddition, Section 102 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extendedtransition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, or the Securities Act, for complying withnew or revised accounting standards. An “emerging growth company” can therefore delay the adoption of certain accountingstandards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of thisextended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such newor revised accounting standards.

Youmay experience dilution of your ownership interests because of the future issuance of additional shares of our Common Stock or preferredstock or other securities that are convertible into or exercisable for our Common Stock or preferred stock.

Ifour existing stockholders exercise warrants or sell, or indicate an intention to sell, substantial amounts of our Common Stock in thepublic market, the price of our Common Stock could decline. The perception in the market that these sales may occur could also causethe price of our Common Stock to decline.

Inthe future, we may issue authorized but previously unissued equity securities, resulting in the dilution of the ownership interests ofthe then current stockholders. We are authorized to issue an aggregate of 100,000,000 shares of Common Stock and 5,000,000 shares of“blank check” preferred stock. We may issue additional shares of our Common Stock or other securities that are convertibleinto or exercisable for our common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securitiesfor capital raising purposes, or for other business purposes. The future issuance of any such additional shares of our Common Stock maycreate downward pressure on the trading price of the Common Stock. We may need to raise additional capital in the near future to meetour working capital needs, and there can be no assurance that we will not be required to issue additional shares, warrants or other convertiblesecurities in the future in conjunction with the capital raising efforts, including at a price (or exercise prices) below the price youpaid for your stock.

Managementmay have broad discretion as to the use of the proceeds from offerings of its securities and may not use the proceeds effectively.

Becausethe Company may not designate the amount of net proceeds from offerings to be used for any particular purpose, management may have broaddiscretion as to the application of the net proceeds and could use them for purposes other than those contemplated at the time of suchoffering. Management may use net proceeds for corporate purposes that may not improve the Company’s financial condition or marketvalue.

Ifwe fail to comply with the Nasdaq Capital Market listing requirements, we will be subject to potential delisting from the Nasdaq CapitalMarket.

OurCommon Stock has been approved for listing on NASDAQ under the symbol “BSFC.” However, if we fail to comply with NASDAQ’srules for continued listing, including, without limitation, minimum market capitalization and other requirements, NASDAQ may take stepsto delist our shares. Failure to maintain our listing, or de-listing from NASDAQ, would make it more difficult for shareholders to sellour Common Stock and more difficult to obtain accurate price quotations on our Common Stock. This could have an adverse effect on theprice of our Common Stock. Our ability to issue additional securities for financing or other purposes, or otherwise to arrange for anyfinancing we may need in the future, may also be materially and adversely affected if our Common Stock is not traded on a national securitiesexchange. Additionally, our loan or other agreements, may contain covenants to maintain the listing of our Common Stock on NASDAQ. Accordingly,failure to maintain such listing may constitute a default under such agreements.

Weare not in compliance with The Nasdaq Capital Market $1.00 minimum bid price requirement and failure to maintain compliance with thisstandard could result in delisting and adversely affect the market price and liquidity of our Common Stock.

OurCommon Stock is currently traded on the Nasdaq Capital Market under the symbol “BSFC.” If we fail to meet any of the continuedlisting standards of NASDAQ, our Common Stock will be delisted. These continued listing standards include specifically enumerated criteria,such as a $1.00 minimum closing bid price.

OnSeptember 26, 2023, we received a letter from NASDAQ advising that the Company did not meet the minimum $1.00 per share bid price requirementfor continued inclusion on NASDAQ pursuant to NASDAQ Marketplace Listing Rule 5550(a)(2). We initially have a period of 180 calendardays, or until March 24, 2024, to regain compliance. If at any time before March 24, 2024, the closing bid price of our Common Stockcloses at or above $1.00 per share for a minimum of ten consecutive business days, NASDAQ will provide written notification that theCompany has achieved compliance with the minimum bid requirement. If we do not regain compliance with the minimum bid requirement duringthe initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, theCompany would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listingstandards for the Nasdaq Capital Market, with the exception of the minimum bid requirement, and would need to provide written noticeof our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.

Inorder to satisfy this requirement, the Company intends to continue actively monitoring the bid price for its Common Stock between nowand March 24, 2024 and will consider available options to resolve the deficiency and regain compliance with the minimum bid price requirement,including seeking approval from stockholders of an amendment to the Company’s Amended and Restated Certificate of Incorporationto effect a reverse stock split of its Common Stock. While we intend to regain compliance with the minimum bid price rule, there canbe no assurance that we will be able to do so, by approval of a reverse stock split or otherwise or to maintain continued compliancewith this rule or the other listing requirements of NASDAQ. If we are unable to meet these requirements, we would receive another delistingnotice from NASDAQ for failure to comply with one or more of the continued listing requirements. If our Common Stock were to be delistedfrom NASDAQ, trading of our Common Stock most likely will be conducted in the over-the-counter market on an electronic bulletin boardestablished for unlisted securities such as the OTC Markets or in the “pink sheets.” Such a downgrading in our listing marketmay limit our ability to make a market in our Common Stock and may impact purchases or sales of our securities.

Weare not in compliance with The Nasdaq Capital Market $2,500,000 stockholders’ equity requirement and failure to maintain compliancewith this standard could result in delisting and adversely affect the market price and liquidity of our Common Stock.

TheCompany was notified on November 27, 2023 by NASDAQ that it no longer complied with the minimum $2,500,000 stockholders’equity required for continued listing on NASDAQ. The Company is subject to a Mandatory Panel Monitor for a period of one year, oruntil October 16, 2024. As such, the Company is not eligible for a compliance period. On December 4, 2023, the Company requested a newhearing with the Hearings Panel (the “Panel”), which was granted and set for March 28, 2023. The Company believes that itscurrent shareholders equity figure meets Nasdaq continued listing standards following the recent conversion of certain non-cash liabilitiesto equity. The hearing request will stay the suspension of the Company’s securities and the filing of the Form 25-NSE pending thePanel’s decision.

OurCommon Stock may be deemed a “penny stock” which may reduce the value of an investment in the stock.

Rule15g-9 under the Exchange Act establishes the definition of a “penny stock,” for the purposes relevant to us, as any equitysecurity that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certainexceptions. For any transaction involving a penny stock, unless exempt, the rules require: (a) that a broker or dealer approve a person’saccount for transactions in penny stocks; and (b) the broker or dealer receive from the investor a written agreement to the transaction,setting forth the identity and quantity of the penny stock to be purchased.

Inorder to approve a person’s account for transactions in penny stocks, the broker or dealer must: (a) obtain financial informationand investment experience objectives of the person and (b) make a reasonable determination that the transactions in penny stocks aresuitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating therisks of transactions in penny stocks.

Thebroker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating tothe penny stock market, which, in highlight form: (a) sets forth the basis on which the broker or dealer made the suitability determination;and (b) confirms that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Generally,brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. If our Common Stockis or becomes subject to the “penny stock” rules, it may be more difficult for investors to dispose of our Common Stock andcause a decline in the market value of our Common Stock.

Disclosurealso has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about commissionspayable to both the broker or dealer and the registered representative, current quotations for the securities and the rights and remediesavailable to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recentprice information for the penny stock held in the account and information on the limited market in penny stocks.

Thesales practice requirements of the Financial Industry Regulatory Authority’s (“FINRA”) may limit a stockholder’sability to buy and sell our Common Stock.

FINRAhas adopted rules requiring that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believingthat the investment is suitable for that customer. Prior to recommending speculative or low-priced securities to their non-institutionalcustomers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status,investment objectives and other information. Under interpretations of these rules, FINRA has indicated its belief that there is a highprobability that speculative or low-priced securities will not be suitable for at least some customers. If these FINRA requirements areapplicable to us or our securities, they may make it more difficult for broker-dealers to recommend that at least some of their customersbuy our Common Stock, which may limit the ability of our stockholders to buy and sell our Common Stock and could have an adverse effecton the market for and price of our Common Stock.

Ouroperating results for a particular period may fluctuate significantly or may fall below the expectations of investors or securities analysts,each of which may cause the price of our Common Stock to fluctuate or decline.

Weexpect our operating results to be subject to fluctuations. Our operating results will be affected by numerous factors, including:

	●	variations in the level of expenses related to future development plans;

	●	fluctuations in value of the underlying commodity;

	●	inability to procure sufficient quantities to meet demand due to the scarcity of the product available from its suppliers;

	●	level of underlying demand for our products and any other products we sell;

	●	any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved;

	●	regulatory developments affecting us or our competitors; and

	●	the continuing effects of the COVID-19 pandemic.

Ifour operating results for a particular period fall below the expectations of investors or securities analysts, the price of our CommonStock could decline substantially. Furthermore, any fluctuations in our operating results may, in turn, cause the price of our CommonStock to fluctuate substantially. We believe that comparisons of our financial results from various reporting periods are not necessarilymeaningful and should not be relied upon as an indication of our future performance

Ourexecutive officers and directors own a significant percentage of our Common Stock and will be able to exercise significant influenceover matters subject to stockholder approval.

Asof the date of this filing, our executive officers and directors, together with their respective affiliates, owned approximately 6%of our Common Stock, including shares subject to outstanding options that are exercisable within 60 days after such date. Accordingly,these stockholders will be able to exert a significant degree of influence over our affairs and matters requiring stockholder approval,including the election of our board of directors and approval of significant corporate transactions. This concentration of ownershipcould have the effect of delaying or preventing a change in our control or otherwise discouraging a potential acquirer from attemptingto obtain control of us, which in turn could have a material and adverse effect on the fair market value of our Common Stock.

Becausewe became a reporting company under the Exchange Act by means other than a traditional underwritten initial public offering, we may notbe able to attract the attention of research analysts at major brokerage firms.

Becausewe did not become a reporting company by conducting an underwritten initial public offering of our Common Stock, and because we willnot be listed on a national securities exchange, securities analysts of brokerage firms may not provide coverage of our Company. In addition,investment banks may be less likely to agree to underwrite secondary offerings on our behalf than they might if we became a public reportingcompany by means of an underwritten initial public offering, because they may be less familiar with our Company as a result of more limitedcoverage by analysts and the media, and because we became public at an early stage in our development. The failure to receive researchcoverage or support in the market for our shares will have an adverse effect on our ability to develop a liquid market for our CommonStock.

Issuanceof stock to fund our operations may dilute your investment and reduce your equity interest.

Wemay need to raise capital in the future to fund the development of our seafood business. Any equity financing may have significant dilutiveeffect to stockholders and a material decrease in our stockholders’ equity interest in us. Equity financing, if obtained, couldresult in substantial dilution to our existing stockholders. At its sole discretion, our board of directors may issue additional securitieswithout seeking stockholder approval, and we do not know when we will need additional capital or, if we do, whether it will be availableto us.

Provisionsof our charter documents or Delaware law could delay or prevent an acquisition of the Company, even if such an acquisition would be beneficialto our stockholders, which could make it more difficult for you to change management.

Provisionsin our certificate of incorporation and our bylaws may discourage, delay or prevent a merger, acquisition or other change in controlthat stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.In addition, these provisions may frustrate or prevent any attempt by our stockholders to replace or remove our current management bymaking it more difficult to replace or remove our board of directors.

Inaddition, Delaware law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder,generally a person who, together with its affiliates, owns, or within the last three years has owned, 15% or more of our voting stock,for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the businesscombination is approved in a prescribed manner. Accordingly, Delaware law may discourage, delay or prevent a change in control of thecompany. Furthermore, our certificate of incorporation will specify that the Court of Chancery of the State of Delaware will be the soleand exclusive forum for most legal actions involving actions brought against us by stockholders. We believe this provision benefits usby providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporatedisputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdensof multi-forum litigation. However, the provision may have the effect of discouraging lawsuits against our directors and officers. Theenforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legalproceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forumprovisions contained in our certificate of incorporation to be inapplicable or unenforceable in such action.

Wedo not anticipate paying any cash dividends on our common stock in the foreseeable future therefore capital appreciation, if any, ofour common stock will be your sole source of gain for the foreseeable future.

Wehave never declared or paid cash dividends on our Common Stock. We do not anticipate paying any cash dividends on our common stock inthe foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growthof our business. In addition, our current loan and security agreement with Lighthouse contains, and our future loan arrangements, ifany, may contain, terms prohibiting or limiting the amount of dividends that may be declared or paid on our Common Stock. As a result,capital appreciation, if any, of our common stock will be your sole source of gain for the foreseeable future.

RisksRelated to this Offering

Statesecurities laws may limit secondary trading, which may restrict the states in which you can sell the shares offered by this Prospectus.

Ifyou purchase shares of our Common Stock sold in this Offering, you may not be able to resell the shares in any state unless and untilthe shares of our Common Stock are qualified for secondary trading under the applicable securities laws of such state or there is confirmationthat an exemption, such as listing in certain recognized securities manuals, is available for secondary trading in such state. Therecan be no assurance that we will be successful in registering or qualifying our Common Stock for secondary trading, or identifying anavailable exemption for secondary trading in our Common Stock in every state. If we fail to register or qualify, or to obtain or verifyan exemption for the secondary trading of, our Common Stock in any particular state, our Common Stock could not be offered or sold to,or purchased by, a resident of that state. In the event that a significant number of states refuse to permit secondary trading in ourCommon Stock, the market for our Common Stock will be limited which could drive down the market price of our Common Stock and reducethe liquidity of the shares of our Common Stock and a stockholder’s ability to resell shares of our Common Stock at all or at currentmarket prices, which could increase a stockholder’s risk of losing some or all of his investment.

Wecould face significant penalties for our failure to comply with the terms of our outstanding convertible notes.

Ourconvertible notes contain positive and negative covenants and customary events of default including requiring us in many cases to timelyfile SEC reports. In the event we fail to timely file our SEC reports in the future, or any other events of defaults occur under thenotes, we could face significant penalties and/or liquidated damages and/or the conversion price of such notes could be adjusted downwardsignificantly, all of which could have a material adverse effect on our results of operations and financial condition, or cause any investmentin the Company to decline in value or become worthless.

Certainof our outstanding convertible promissory notes include favored nations rights.

Certainof our outstanding convertible promissory notes include provisions which provide that, so long as such notes are outstanding, the Companyshall not enter into any public or private offering of its securities (including securities convertible into shares of our Common Stock)with any individual or entity that has the effect of establishing rights or otherwise benefiting such other investor in a manner morefavorable in any material respect to such other investor than the rights and benefits established in favor of the holder of our convertiblenotes unless, in any such case, the holder has been provided with such rights and benefits pursuant to a definitive written agreementor agreements between the Company and the holder. Such favored nations provisions could be triggered in the future and could materiallychange the terms of the notes. In the event any favored nations provisions of the notes are triggered, it may cause the terms of suchnotes to be materially amended in favor of the holders thereof, cause significant dilution to existing shareholders, and otherwise havea material adverse effect on the Company.

USEOF PROCEEDS

Wewill not receive any proceeds from the sales of shares of our common stock by the Selling Stockholders.

DETERMINATIONOF OFFERING PRICE

TheSelling Stockholders will offer shares of our Common Stock at the prevailing market prices or privately negotiated prices. The offeringprice of our Common Stock does not necessarily bear any relationship to our book value, assets, past operating results, financial conditionor any other established criteria of value. Our Common Stock may not trade at the market prices in excess of the offering prices forCommon Stock in any public market, will be determined in the marketplace and may be influenced by many factors, including the depth andliquidity of the market for our Common Stock.

MARKETPRICE OF AND DIVIDENDS ON THE COMPANY’S

COMMONEQUITY AND RELATED STOCKHOLDER MATTERS

MarketInformation

OurCommon Stock is quoted on the Nasdaq Capital Market under the symbol “BSFC.” On November 24, 2023, the closing price on Nasdaqof our Common Stock was $0.17.

Holders

Asof November 29, 2023, there were 78 holders of record of our Common Stock.

DividendPolicy

Wehave not paid any dividends since our incorporation and do not anticipate the payment of dividends in the foreseeable future. At present,our policy is to retain earnings, if any, to develop and market our products and implement our business plan. The payment of dividendsin the future will depend upon, among other factors, our earnings, capital requirements, and operating financial conditions.

SELLINGSTOCKHOLDERS

Thisprospectus relates to the potential offer and resale by the selling stockholders identified in this prospectus or their permitted transferees(the “Selling Stockholders”) of 19,876,735 shares of our common stock, $0.0001par value per share, (the “CommonStock”) consisting of (i) up to 2,761,668 shares issuable upon conversion of the principal and accrued interest at maturityof two convertible promissory notes in the aggregate principal amount of $1,500,000 in total, each issued to Lind Global Fund II LP (“Lind“) on May 30, 2023 and July 27, 2023, respectively (collectively the “Lind Notes”), (ii) warrants to purchase upto 435,035 shares of Common Stock (at an exercise price of $2.45 per share), issuedto Lind on May 30, 2023, and (iii) up to 16,680,032 issuable pursuant to that certain purchase agreement (the “ELOCPurchase Agreement”) dated May 16, 2023, by and between ClearThink Capital Partners, LLC (“ClearThink”) and us.

LindConvertible Promissory Notes

OnMay 30, 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Lind Global Fund IILP, a Delaware limited partnership (“Lind”), pursuant to which the Company issued to Lind a secured, two-year, interest freeconvertible promissory note in the principal amount of $1,200,000 (the “May 2023 Note”) and a common stock purchase warrant(the “May 2023 Warrant”) to acquire 435,035 shares of Common Stock of the Company, for the aggregate funding amount of $1,000,000.The conversion price of the May 2023 Note is equal to the lesser of: (i) US$2.40; or (ii) 90% of the lowest single VWAP during the 20trading day period ending on the last trading day immediately preceding the applicable conversion date, subject to customary adjustments.In connection with the issuance of the May 2023 Note and the May 2023 Warrant, the Company paid a $50,000 commitment fee to Lind.

ClearThinkELOC Purchase Agreement

TheSelling Stockholders, may, from time to time, offer and sell pursuant to this prospectus any or all of the shares referred to above.The Selling Stockholders may also sell, transfer or otherwise dispose of all or a portion of their shares in transactions exemptfrom the registration requirements of the Securities Act. We may from time to time include additional Selling Stockholders insupplements or amendments to this prospectus.

TheSelling Stockholders may sell some, all or none of its shares. We do not know how long the Selling Stockholders will hold the sharesbefore selling them, and we currently have no agreements, arrangements or understandings with the Selling Stockholders regardingthe sale of any of the shares.

Beneficialownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Exchange Act. The percentage of sharesbeneficially owned prior to the offering is based on 14,450,350 shares of our Common Stock outstanding as of December 8, 2023.

Thefollowing table sets forth the shares beneficially owned, as of December 8, 2023 by the Selling Stockholders prior to the offeringcontemplated by this prospectus, the number of shares that the Selling Stockholders may offer and sell from time to time under this prospectusand the number of shares which the Selling Stockholders would own beneficially if all such offered shares are sold.

Name of Selling Stockholders	Beneficial Ownership Before the Offering			Shares of Common Stock Included in Prospectus		Beneficial Ownership After the Offering		Percentage of Ownership After the Offering

Lind Global Fund II LP (4)		3,196,703	(1)(2)		3,196,703		-		-
ClearThink Capital Partners, LLC (5)		16,680,032	(1)(3)		16,680,032

*less than 1%

(1)Such amount of Common Stock is solely for the purposes of making a good faithestimate as to the number of shares issuable to be registered.

(2)Represents up to 2,761,668 shares of our Common Stock issuable upon the conversion of principal and accrued interest at maturity pursuantto the Lind Notes, at the option of Lind, and a warrant to purchase 435,035 shares of Common Stock (atan exercise price of $2.45 per share).

(3)Represents up to 16,680,032 shares of our Common Stock issuable pursuantto the ELOC Purchase Agreement.

(4) Lind Global Partners II LLC, the general partnerof Lind Global Fund II LP, may be deemed to have sole voting and dispositive power with respect to the shares held by Lind Global FundII LP. Jeff Easton, the managing member of Lind Global Partners II LLC, may be deemed to have sole voting and dispositive power withrespect to the shares held by Lind Global Fund II LP has sole voting and dispositive power over the shares held by Lind Global Fund IILP. The principal business address of Lind Global Fund II LP 444 Madison Avenue, Floor 41, New York, NY 10022.

(5) Brian Loper, the Managing Member of ClearThinkCapital Partners, LLC has sole voting and dispositive power over the shares of Common Stock held by ClearThink Capital Partners, LLC.The principal business address of ClearThink Capital Partners, LLC is 10 Times Square, Floor 5, New York, NY 10018.

Otherthan as disclosed above, none of the Selling Stockholders has had a material relationship with us or any of our affiliates other thanas a stockholder at any time within the past three years.

PLANOF DISTRIBUTION

TheSelling Stockholders and any of their respective pledgees, assignees and successors-in-interest may, from time to time, sell any or allof their securities covered hereby on any trading market, stock exchange or other trading facility on which the securities are tradedor in private transactions. These sales may be at fixed or negotiated prices. The Selling Stockholders may use any one or more of thefollowing methods when selling securities:

	●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
	●	block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
	●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
	●	an exchange distribution in accordance with the rules of the applicable exchange;
	●	privately negotiated transactions;
	●	settlement of short sales;
	●	in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
	●	through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
	●	a combination of any such methods of sale; or
	●	any other method permitted pursuant to applicable law.

TheSelling Stockholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.

Broker-dealersengaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissionsor discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not inexcess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup ormarkdown in compliance with FINRA IM-2440.

Inconnection with the sale of the securities covered hereby, the Selling Stockholders may enter into hedging transactions with broker-dealersor other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions theyassume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loanor pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into optionor other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require thedelivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealeror other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

TheSelling Stockholders and any broker-dealers or agents that are involved in selling the securities will or may be deemed to be “underwriters”within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealersor agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discountsunder the Securities Act. We are requesting that each Selling Stockholder inform us that it does not have any written or oral agreementor understanding, directly or indirectly, with any person to distribute the securities. We will pay certain fees and expenses incurredby us incident to the registration of the securities.

Becausethe Selling Stockholders will or may be deemed to be “underwriters” within the meaning of the Securities Act, they will besubject to the prospectus delivery requirements of the Securities Act, including Rule 172 thereunder. In addition, any securities coveredby this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than underthis prospectus. We are requesting that each Selling Stockholder confirm that there is no underwriter or coordinating broker acting inconnection with the proposed sale of the resale securities by the Selling Stockholders.

Weintend to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholderswithout registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement forus to be in compliance with the current public information requirement under Rule 144 under the Securities Act or any other rule of similareffect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other ruleof similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicablestate securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registeredor qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and iscomplied with.

Underapplicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneouslyengage in market making activities with respect to the Common Stock for the applicable restricted period, as defined in Regulation M,prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of theExchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of theCommon Stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholdersand are informing the Selling Stockholders of the need to deliver a copy of this prospectus to each purchaser at or prior to the timeof the sale (including by compliance with Rule 172 under the Securities Act).

PennyStock Rules

Ourshares of Common Stock are subject to the “penny stock” rules of the Exchange Act. In general terms, “penny stock”is defined as any equity security that has a market price less than $5.00 per share, subject to certain exceptions. The rules providethat any equity security is considered to be a penny stock unless that security is registered and traded on a national securities exchangemeeting specified criteria set by the SEC, authorized for quotation from the NASDAQ stock market, issued by a registered investment company,and excluded from the definition on the basis of price (at least $5.00 per share), or based on the issuer’s net tangible assetsor revenues. In the last case, the issuer’s net tangible assets must exceed $3,000,000 if in continuous operation for at leastthree years or $5,000,000 if in operation for less than three years, or the issuer’s average revenues for each of the past threeyears must exceed $6,000,000.

Tradingin shares of penny stock is subject to additional sales practice requirements for broker-dealers who sell penny stocks to persons otherthan established customers and accredited investors. Accredited investors, in general, include individuals with assets in excess of $1,000,000or annual income exceeding $200,000 (or $300,000 together with their spouse), and certain institutional investors. For transactions coveredby these rules, broker-dealers must make a special suitability determination for the purchase of the security and must have receivedthe purchaser’s written consent to the transaction prior to the purchase. Additionally, for any transaction involving a penny stock,the rules require the delivery prior to the first transaction, of a risk disclosure document relating to the penny stock. A broker-dealeralso must disclose the commissions payable to both the broker-dealer and the registered representative, and current quotations for thesecurity. Finally, monthly statements must be sent disclosing recent price information for the penny stocks. These rules may restrictthe ability of broker-dealers to trade or maintain a market in our Common Stock, to the extent it is penny stock, and may affect theability of stockholders to sell their shares.

MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Youshould read the following discussion together with our consolidated financial statements and the related notes included elsewhere inthis prospectus. This discussion contains forward-looking statements that are based on our current expectations, estimates and projectionsabout our business and operations. Our actual results may differ materially from those currently anticipated and expressed in such forward-lookingstatements.

Overview

Weare an international seafood company that imports, packages and sells refrigerated pasteurized crab meat, and other premium seafood products.Our current source of revenue is from importing blue and red swimming crab meat primarily from Indonesia, the Philippines and China anddistributing it in the United States and Canada under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, FirstChoice, Good Stuff and Coastal Pride Fresh, and steelhead salmon and rainbow trout fingerlings produced under the brand name Little CedarFarms for distribution in Canada. The crab meat which we import is processed in six out of the ten plants available throughout SoutheastAsia. Our suppliers are primarily via co-packing relationships, including two affiliated suppliers. We sell primarily to food servicedistributors. We also sell our products to wholesalers, retail establishments and seafood distributors.

RecentEvents

PublicOffering

OnSeptember 11, 2023, the Company sold in an underwritten public offering pursuant to a securities purchase agreement, an aggregate of690,000 shares of its Common Stock, Series A-1 warrants to purchase up to 10,741,139 shares of Common Stock, Series A-2 warrants to purchaseup to 10,741,139 shares of Common Stock (collectively, the “Common Warrants”) and pre-funded warrants to purchase up to 10,051,139shares of common stock (the “Pre-Funded Warrants”). Each share of Common Stock and Pre-Funded Warrants were sold togetherwith a Series A-1 common stock purchase warrant to purchase one share of Common Stock and a Series A-2 common stock purchase warrantto purchase one share of Common Stock. The public offering price for each share of Common Stock and accompanying Common Warrants was$0.4655. Each Common Warrant has an exercise price of $0.4655 per share, and will be exercisable beginning on the effective date of stockholderapproval of the issuance of the shares upon exercise of the Common Warrants (“Warrant Stockholder Approval”). The SeriesA-1 warrants will expire on the five-year anniversary of the effective date of Warrant Stockholder Approval. The Series A-2 warrantswill expire on the eighteen-month anniversary of the effective date of Warrant Stockholder Approval. The public offering price was $0.4555per Pre-funded Warrant and accompanying Common Warrants. The Pre-funded Warrants are immediately exercisable and have an exercise priceof $0.01 per share.

NASDAQCompliance

MinimumStockholder’s Equity

TheCompany was notified on November 27, 2023 by NASDAQ that it no longer complied with the minimum $2,500,000 stockholders’ equityrequired for continued listing on NASDAQ. The Company is subject to a Mandatory Panel Monitor for a period of one year, or until October16, 2024. As such, the Company is not eligible for a compliance period. On December 4, 2023, the Company requested a new hearing withthe Hearings Panel (the “Panel”), which was granted and set for March 28, 2023. The Company believes that its current shareholdersequity figure meets Nasdaq continued listing standards following the recent conversion of certain non-cash liabilities to equity. Thehearing request will stay the suspension of the Company’s securities and the filing of the Form 25-NSE pending the Panel’sdecision.

Resultsof Operations

Thefollowing discussion and analysis of financial condition and results of operations of the Company is based upon, and should be read inconjunction with, the financial statements and accompanying notes elsewhere in this prospectus.

Threemonths ended September 30, 2023 and 2022

NetRevenue. Revenue for the three months ended September 30, 2023 decreased 35.7% to $1,561,679 as compared to $2,429,195 for the threemonths ended September 30, 2022 as a result of a decrease in poundage sold during the three months ended September 30, 2023.

Costof Goods Sold. Cost of goods sold for the three months ended September 30, 2023 decreased to $1,586,478 as compared to $3,973,656for the three months ended September 30, 2022. This decrease is attributable to the decrease in poundage sold in the cost of goods.

GrossProfit (Loss). Gross (loss) for the three months ended September 30, 2023 decreased to ($24,799) as compared to gross (loss) of ($1,544,461)in the three months September 30, 2022. This decrease is attributable to the cost of sales no longer being higher than sales and a minoroperational issue affecting the biomass at TOBC.

CommissionsExpense. Commissions expense decreased to $423 for the three months ended September 30, 2023 from $2,674 for the three months endedSeptember 30, 2022. This decrease was due to lower commissionable revenues for the three months ended September 30, 2023.

Salariesand Wages Expense. Salaries and wages expense decreased to $301,393 for the three months ended September 30, 2023 as compared to$352,178 for the three months ended September 30, 2022. This decrease is mainly attributable to a strategic reduction in salaries forthe three months ended September 30, 2023.

Depreciationand Amortization. Depreciation and amortization expense decreased to $2,754 for the three months ended September 30, 2023 as comparedto $151,568 for the three months ended September 30, 2022. This decrease is attributable to lower depreciation due to the impairmentof fixed assets and intangible assets in the year ended December 31, 2022.

ImpairmentLoss. Impairment loss decreased to $0 for the three months ended September 30, 2023 as compared to $748,997 for the three monthsended September 30, 2022. This decrease is attributable to the impairment recognized on TOBC for the year ended December 31, 2022.

OtherOperating Expense. Other operating expense decreased to $410,913 for the three months ended September 30, 2023 from $566,977 forthe three months ended September 30, 2022. This decrease is mainly attributable to legal and professional fees related to our businessoperations.

OtherIncome (Expense). Other (expense) increased for the three months ended September 30, 2023 to ($1,902) from $22,229 for the threemonths ended September 30, 2022. This increase in expense is mainly attributable to the decrease in fair value of the Common Stock recordedin connection with Common Stock issued to ClearThink.

InterestIncome. Interest income increased to $16 for the three months ended September 30, 2023 from $0 for the three months ended September30, 2022. The increase is attributable to the interest earned on an interest-bearing brokerage account.

Losson Settlement of Debt. Loss on settlement of debt increased to $144,169 for the three months ended September 30, 2023 from $57,085for the three months ended September 30, 2022. The increase is attributable to the fair value of Common Stock issued higher than theprincipal amount paid.

Changein Fair Value of Derivative and Warrant Liabilities. Change in fair value of derivative and warrant liabilities increased to $1,240,214for the three months ended September 30, 2023 from $0 for the three months ended September 30, 2022. The increase is a result of thedecrease of the price of the Company’s Common Stock at September 30, 2023, as compared with the stock price at the date of issuanceof the Common Stock under warrants.

InterestExpense. Interest expense increased to $799,690 for the three months ended September 30, 2023 from $336,378 for the three monthsended September 30, 2022. The increase is attributable to the amortization of the Lind convertible debt discounts.

NetLoss. Net loss was $445,813 for the three months ended September 30, 2023 as compared to $3,738,089 for the three months ended September30, 2022. The decrease in net loss is primarily attributable to the decrease of salaries and wages, operating expenses and gross lossand gain from revaluation of the derivative and warranty liability.

Ninemonths ended September 30, 2023 and 2022

NetRevenue. Revenue for the nine months ended September 30, 2023 decreased 52.2% to $5,115,680 as compared to $10,712,363 for the ninemonths ended September 30, 2022 as a result of decrease in poundage sold during the nine months ended September 30, 2023.

Costof Goods Sold. Cost of goods sold for the nine months ended September 30, 2023 decreased to $4,775,102 as compared to $11,431,331for the nine months ended September 30, 2022. This decrease is attributable to the decrease in poundage sold in the cost of goods.

GrossProfit (Loss). Gross profit for the nine months ended September 30, 2023 increased to $340,578 as compared to gross (loss) of $718,968in the nine months ended September 30, 2022. This increase is attributable to decrease in the cost of inventory.

CommissionsExpense. Commissions expense decreased to $2,169 for the nine months ended September 30, 2023 from $24,051 for the nine months endedSeptember 30, 2022. This decrease was due to lower commissionable revenues for the nine months ended September 30, 2023.

Salariesand Wages Expense. Salaries and wages expense decreased to $1,298,358 for the nine months ended September 30, 2023 as compared to$1,498,703 for the nine months ended September 30, 2022. This decrease is mainly attributable to strategic reduction in salaries forthe nine months ended September 30, 2023.

Depreciationand Amortization. Depreciation and amortization expense decreased to $33,091 for the nine months ended September 30, 2023 as comparedto $426,364 for the nine months ended September 30, 2022. This decrease is attributable to lower depreciation due to the impairment offixed assets and intangible assets in the year ended December 31, 2022.

ImpairmentLoss. Impairment loss decreased to $0 for the nine months ended September 30, 2023 as compared to $748,997 for the nine months endedSeptember 30, 2022. This decrease is attributable to the impairment recognized on TOBC for the year ended December 31, 2022.

OtherOperating Expense. Other operating expense decreased to $1,773,702 for the nine months ended September 30, 2023 from $1,930,753 forthe nine months ended September 30, 2022. This decrease is mainly attributable to legal and professional related to our business operations.

OtherIncome. Other income decreased for the nine months ended September 30, 2023 to $25,292 from $68,899 for the nine months ended September30, 2022. This decrease is mainly attributable to the decrease in fair value of the Common Stock recorded in connection with Common Stockissued to ClearThink.

InterestIncome. Interest income increased to $40 for the nine months ended September 30, 2023 from $0 for the nine months ended September30, 2022. The increase is attributable to the interest earned on an interest-bearing brokerage account.

Losson Settlement of Debt. Loss on settlement of debt increased to $977,188 for the nine months ended September 30, 2023 from $57,085for the nine months ended September 30, 2022. The increase is attributable to the fair value of Common Stock issued was higher than theprincipal amount paid.

Changein Fair Value of Derivative and Warrant Liabilities. Change in fair value and derivative and warrant liabilities increase to $1,339,791for the nine months ended September 30, 2023 from $0 for the nine months ended September 30, 2022. This increase is a result of the decreasein the stock price of the Company’s Common Stock at September 30, 2023, as compared with the stock price at date of issuance ofsuch Common Stock.

InterestExpense. Interest expense increased to $1,470,143 for the nine months ended September 30, 2023 from $893,146 for the nine monthsended September 30, 2022. The increase is attributable to the amortization of the Lind convertible debt discounts.

NetLoss. Net loss was $3,848,950 for the nine months ended September 30, 2023 as compared to $6,229,168 for the nine months ended September30, 2022. The decrease in net loss is primarily attributable to the decrease of salaries and wages, operating expenses and gross lossand gain from revaluation of the derivative and warranty liability.

Liquidityand Capital Resources

TheCompany had cash of $488,833 as of September 30, 2023. At September 30, 2023, the Company had a working capital deficit of $1,254,840,including $768,839 in stockholder loans that are subordinated to its working capital line of credit, and the Company’s primarysources of liquidity consisted of inventory of $1,990,663 and accounts receivable of $152,954

TheCompany has historically financed its operations through the cash flow generated from operations, capital investment, notes payable anda working capital line of credit.

Cash(Used in) Operating Activities. Cash used in operating activities during the nine months ended September 30, 2023 was $3,112,126as compared to cash used in operating activities of $4,095,243 for the nine months ended September 30, 2022. The decrease is primarilyattributable to decrease in inventory of $7,331,680 and decrease in payables of $3,738,242, offset by the increase in other current assetsof $3,076,240 for the nine months ended September 30, 2023 compared with the nine months ended September 30, 2022.

Cash(Used in) Investing Activities. Cash used in investing activities for the nine months ended September 30, 2023 was $132,551 as comparedto cash used in investing activities of $549,337 for the nine months ended September 30, 2022. The decrease was mainly attributable toa decrease in the purchase of fixed assets for the nine months ended September 30, 2023 compared to the acquisition of the soft-shellcrab operations during the nine months ended September 30, 2022.

CashProvided by Financing Activities. Cash provided by financing activities for the nine months ended September 30, 2023 was $3,667,373as compared to cash provided by financing activities of $3,732,734 for the nine months ended September 30, 2022. The decrease is mainlyattributable to the pay-off of the working capital line of credit and the 2022 Lind Note during the nine months ended September 30, 2023.

WorkingCapital Line of Credit

Theadvance 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. Interest on the lineof credit was the prime rate (with a floor of 3.25%), plus 3.75%. The Borrowers paid Lighthouse a facility fee of $50,000 in three instalmentsof $16,667 in March, April and May 2021 and paid an additional facility fee of $25,000 on each anniversary of March 31, 2021. On January14, 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% advancein order to increase imports to meet customer demand. On July 29, 2022, the Loan Agreement was further amended to set the annual interestrate on the outstanding principal amount at 4.75% above the prime rate and to reduce the monthly required cash flow requirements beginningJuly 31, 2022. The amendment also updated the maximum inventory advance under the line of credit to 60% from August 1, 2022 through December31, 2022 and 50% thereafter.

Theline of credit was secured by a first priority security interest on all the assets of each Borrower. Pursuant to the terms of a guarantyagreement, the Company guaranteed the obligations of the Borrowers under the note and John Keeler, Executive Chairman and Chief ExecutiveOfficer of the Company, provided a personal guaranty of up to $1,000,000 to Lighthouse.

OnJune 16, 2023, the Company terminated the Loan Agreement and paid a total of approximately $108,400 to Lighthouse which included, asof June 16, 2023, an outstanding principal balance of approximately $93,400, accrued interest of approximately $9,900, and other feesincurred in connection with the line of credit of approximately $4,991. Upon the repayment of the total outstanding indebtedness owingto Lighthouse, the Loan Agreement and all other related financing agreements and documents entered into in connection with the Loan Agreementwere deemed terminated.

Duringthe nine months ended September 30, 2023, cash proceeds from the working capital line of credit totaled $2,405,034 and cash paymentsto the working capital line of credit totaled $4,182,971.

JohnKeeler Promissory Notes

FromJanuary 2006 through May 2017, Keeler & Co issued 6% demand promissory notes in the aggregate principal amount of $2,910,000 to JohnKeeler, our Chief Executive Officer and Executive Chairman. As of September 30, 2023, approximately $768,800 of principal remains outstandingand approximately $39,900 of interest was paid under the notes during the nine months ended September 30, 2023. After satisfaction ofthe terms of the subordination, the Company may prepay the notes at any time first against interest due thereunder. If an event of defaultoccurs under the notes, interest will accrue at 18% per annum and if not paid within ten days of payment becoming due, the holder ofthe note is entitled to a late fee of 5% of the amount of payment not timely made. The Company made principal payments of $124,161 duringthe nine months ended September 30, 2023.

LindGlobal Fund II LP notes

OnJanuary 24, 2022, the Company entered into a securities purchase agreement with 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 and a five-year warrant to purchase 1,000,000shares of Common Stock at an exercise price of $4.50 per share, subject to customary adjustments (50,000 shares of Common Stock at anexercise price of $90 per share after taking into account the Company’s Reverse Stock Split). The warrant provides for cashlessexercise and for full ratchet anti-dilution if the Company issues securities at less than $4.50 per share. In connection with the issuanceof the note and the warrant, the Company paid a $150,000 commitment fee to Lind and approximately $87,000 of debt issuance costs.

Theoutstanding principal under the note was payable commencing July 24, 2022, in 18 consecutive monthly installments of $333,333, at theCompany’s option, in cash or shares of Common Stock at a price (the “Repayment Share Price”) based on 90% of the fivelowest volume weighted average prices (“VWAP”) during the 20-days prior to the payment date with a floor price of $1.50 pershare (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 additionto shares, the Company will pay Lind an additional amount in cash as determined pursuant to a formula contained in the note.

Inconnection with the issuance of the note, the Company granted Lind a first priority security interest and lien on all of its assets,including a pledge on its shares in John Keeler & Co. Inc., its wholly-owned subsidiary, pursuant to a security agreement and a stockpledge agreement with Lind, dated January 24, 2022. Each subsidiary of the Company also granted a second priority security interest inall of its respective assets.

Thenote was mandatorily payable prior to maturity if the Company issued any preferred stock (with certain exceptions described in the note)or, if the Company or its subsidiaries issued 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 additionalsecurities based on future transactions of the Company on terms more favorable than those granted to Lind, with certain exceptions.

Ifthe Company failed to maintain the listing and trading of its Common Stock, the note would become due and payable and Lind may convertall 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 VWAPduring the 20 days prior to delivery of the conversion notice.

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

Thenote was convertible into Common Stock at $5.00 per share ($100 per share after taking into account the Company’s Reverse StockSplit), subject to certain adjustments, at any time after the earlier of six months from issuance or the date the registration statementis effective; provided that no such conversion may be made that would result in beneficial ownership by Lind and its affiliates of morethan 4.99% of the Company’s outstanding shares of Common Stock. If shares were issued by the Company at less than the conversionprice, the conversion price will be reduced to such price.

OnSeptember 15, 2023, the Company paid $2,573,142 to Lind and the note was extinguished.

OnMay 30, 2023, the Company entered into a securities 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 “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 exercisablefor five years at an exercise price of $2.45 per share, for the aggregate funding amount of $1,000,000. The Lind Warrant includes cashlessexercise and full ratchet anti-dilution provisions. In connection with the issuance of the Lind Note and the Lind Warrant, the Companypaid Lind a $50,000 commitment fee. The proceeds from the sale of the Note and Warrant are for general working capital purposes.

OnJuly 27, 2023, the Company, entered into a First Amendment to the securities purchase agreement (the “Purchase Agreement Amendment”)with Lind, pursuant to which the Company amended the securities purchase agreement, entered into with Lind as of May 30, 2023 in orderto permit the issuance of further senior convertible promissory notes in the aggregate principal amount of up to $1,800,000 and warrantsin such aggregate amount as the Company and Lind shall mutually agree.

Pursuantto the Purchase Agreement Amendment, the Company issued to Lind a two-year, interest free convertible promissory note in the principalamount of $300,000 and a warrant to purchase 175,234 shares of Common Stock of the Company, for the aggregate amount of $250,000. Inconnection with the issuance of the note and the warrant, the Company paid a $12,500 commitment fee. The proceeds from the sale of thenote and warrant are for general working capital purposes.

YearEnded December 31, 2022 compared to the Year Ended December 31, 2021

NetSales. Revenue for the year ended December 31, 2022 increased 28.0% to $12,767,145 as compared to $9,973,264 for the year ended December31, 2021 as a result of an increase in poundage sold during the year ended December 31, 2022.

Costof Goods Sold. Cost of goods sold for the year ended December 31, 2022 increased to $13,419,133 as compared to $7,979,830 for theyear ended December 31, 2021. This increase is attributable to price increases in inventory affecting its related cost of goods.

Gross(Loss) Profit. Gross loss for the year ended December 31, 2022 is $651,988 as compared to gross profit of $1,993,434 for the yearended December 31, 2021. This increase is attributable to higher cost of goods sold compared to the cost of goods sold in the year endedDecember 31, 2021.

Gross(Loss) Profit Margin. Gross loss margin for the year ended December 31, 2022 is 5.1% as compared to gross profit margin of 20.0%for the year ended December 31, 2021. This decrease is attributable to sales price decreases of our product and higher cost of inventorypurchased.

CommissionsExpenses. Commissions expenses decreased to $24,482 for the year ended December 31, 2022 from $42,332 for the year ended December31, 2021. The decrease is attributable to lower commissionable revenues.

Salariesand Wages Expense. Salaries and wages increased to $2,032,457 for the year ended December 31, 2022 as compared to $1,827,607 forthe year ended December 31, 2021. This increase is primarily attributable to the full year of salaries for TOBC and new employees.

Depreciationand Amortization. Depreciation and amortization expense increased to $584,386 for the year ended December 31, 2022 as compared to$384,963 for the year ended December 31, 2021. The increase is attributable to higher depreciation and amortization due to the acquisitionof TOBC and soft-shell crab operations.

ImpairmentLoss. Impairment loss increased to $5,797,906 for the year ended December 31, 2022 as compared to $374,300 for the year ended December31, 2021. This increase is attributable to the impairments recognized on TOBC and Coastal Pride for goodwill and long-lived assets.

OtherOperating Expense. Other operating expenses increased 17.5% to $2,522,764 for the year ended December 31, 2022 as compared to $2,147,873for the year ended December 31, 2021. This increase is primarily attributable to legal and professional fees and stock compensation expenseassociated with the acquisition of the soft-shell crab operations.

OtherIncome. Other income decreased to $154,196 for the year ended December 31, 2022 from $498,791 for the year ended December 31, 2021.This decrease is primarily attributable to the payroll protection program loan forgiveness granted in 2021.

Losson Conversion of Debt. Loss on conversion of debt increased to $57,085 for the year ended December 31, 2022 from $0 for the yearended December 31, 2021. This increase is attributable to the additional payments made to Lind by the issuance of Common Stock due toa decrease in the Repayment Share Price.

InterestExpense. Interest expense increased to $1,678,097 for the year ended December 31, 2022 as compared to $320,524 for the year endedDecember 31, 2021. This increase is attributable to the amortization of the Lind convertible debt discount.

NetLoss. The Company had a net loss of $13,194,969 for the year ended December 31, 2022 as compared to a net loss of $2,605,374 forthe year ended December 31, 2021. The increase in net loss is primarily attributable to an increase in salaries and wages, increasesin depreciation and amortization, recognition of impairment losses for TOBC and Coastal Pride and other expenses in connection with theacquisition of the soft-shell crab operations and amortization of the Lind convertible debt discount.

Liquidityand Capital Resources

TheCompany had cash of $9,262 as of December 31, 2022. At December 31, 2022, the Company had a working capital deficit of $3,013,281, including$893,000 in stockholder loans that were subordinated to its working capital line of credit, as compared to a working capital surplusof $2,839,477 at December 31, 2021, including $960,000 in stockholder loans. The Company’s primary sources of liquidity consistedof inventory of $4,808,152 and accounts receivable of $813,416 at December 31, 2022. The decrease in working capital was due primarilyto an increase of inventory of $2,688,711 netted against decreases in accounts receivable of $417,765 and the increase in the maturitiesof long-term debt of $3,439,557.

TheCompany has historically financed its operations through the cash flow generated from operations, loans from stockholders and other relatedparties as well as a working capital line of credit and the sale of equity in private offerings.

Asof January 27, 2023, the Company issued an aggregate of 322,822 shares of Common Stock to Roth for the “at the market” offeringpursuant to its sales agreement with Roth.

Cash(Used in) Operating Activities. Cash used in operating activities during the year ended December 31, 2022 was $3,618,811 as comparedto cash used in operating activities of $4,833,029 for the year ended December 31, 2021, representing a decrease of $1,214,218. The decreaseis primarily attributable to an increase in inventory of $3,431,929 netted against the decreases in deferred income of $62,336, accountsreceivable netted against other current assets of $3,448,088 and increase in payables netted against other current liabilities of $356,399for the year ended December 31, 2022.

Cash(Used in) Investing Activities. Cash used in investing activities for the year ended December 31, 2022 was $695,275 as compared to$773,410 cash used in investing activities for the year ended December 31, 2021. The decrease was attributable to the smaller acquisitionof the soft-shell crab operations by Coastal Pride for the year ended December 31, 2022 compared to the TOBC acquisition in the yearended December 31, 2021.

CashProvided by Financing Activities. Cash provided by financing activities for the year ended December 31, 2022 was $3,075,400 as comparedto cash provided by financing activities of $6,480,540 for the year ended December 31, 2021. This decrease is mainly attributable toprivate placement offerings in 2021 compared to no such offerings in 2022.

WorkingCapital Line of Credit

OnMarch 31, 2021, Keeler & Co. and Coastal Pride entered into a loan and security agreement (“Loan Agreement”) with LighthouseFinancial Corp., a North Carolina corporation (“Lighthouse”). Pursuant to the terms of the Loan Agreement, Lighthouse madeavailable to Keeler & Co. and Coastal Pride (together, the “Borrowers”) a $5,000,000 revolving line of credit for a termof thirty-six months, renewable annually for one-year periods thereafter. Amounts due under the line of credit are represented by a revolvingcredit note issued to Lighthouse by the Borrowers. As of December 31, 2022, the Company was in compliance with all financial covenantsunder the Loan Agreement, except for the requirement to maintain a greater than $50,000 cash flow in the months of July, August, September,October, November and December. Lighthouse has notified the Borrowers as to this default but has elected not to exercise its rights andremedies under the loan documents.

Theadvance rate of the revolving line of credit is 85% with respect to eligible accounts receivable and the lower of 60% of the Borrowers’eligible inventory, or 80% of the net orderly liquidation value, subject to an inventory sublimit of $2,500,000. The inventory portionof the loan will never exceed 50% of the outstanding balance. Interest on the line of credit is the prime rate (with a floor of 3.25%),plus 3.75%. The Borrowers paid Lighthouse a facility fee of $50,000 in three instalments of $16,667 in March, April and May 2021 andpaid an additional facility fee of $25,000 on March 31, 2022. In an effort to increase imports to meet customer demand, on January 14,2022, the maximum inventory advance under the line of credit was adjusted from 50% to 70% until June 30, 2022, 65% until July 31, 2022,60% until August 31, 2022, 55% until September 30, 2022, at a monthly fee of 0.25% on the portion of the loan in excess of the 50% advance.On July 29, 2022, the Loan Agreement was further amended to set the annual interest rate on the outstanding principal amount at 4.75%above the prime rate and to reduce the monthly required cash flow requirements beginning July 31, 2022. The amendment also updated themaximum inventory advance under the line of credit to 60% from August 1, 2022 through December 31, 2022 and 50% thereafter. As of December31, 2022, the interest rate was 15.25% which includes a default rate of 3%.

Theline of credit is secured by a first priority security interest on all the assets of each Borrower. Pursuant to the terms of a guarantyagreement, the Company guaranteed the obligations of the Borrowers under the note and John Keeler, Executive Chairman and Chief ExecutiveOfficer of the Company, provided a personal guaranty of up to $1,000,000 to Lighthouse.

TheBorrowers utilized $784,450 of the Lighthouse revolving line of credit to repay the outstanding indebtedness owed to ACF as of March31, 2021. As a result, all obligations owed to ACF were satisfied and the loan agreement with ACF was terminated. The outstanding balanceowed to Lighthouse as of December 31, 2022 was $1,776,068.

JohnKeeler Promissory Notes

FromJanuary 2006 through May 2017, Keeler & Co issued 6% demand promissory notes in the aggregate principal amount of $2,910,000 to JohnKeeler, our Chief Executive Officer and Executive Chairman. As of December 31, 2022, approximately $893,000 of principal remains outstandingand approximately $55,350 of interest was paid under the notes during the year ended December 31, 2022. These notes are subordinatedto the Lighthouse note. After satisfaction of the terms of the subordination, the Company may prepay the notes at any time first againstinterest due thereunder. If an event of default occurs under the notes, interest will accrue at 18% per annum and if not paid withinten days of payment becoming due, the holder of the note is entitled to a late fee of 5% of the amount of payment not timely made. TheCompany made principal payments of $67,000 during the year ended December 31, 2022.

UnderwrittenOffering

OnNovember 2, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Newbridge SecuritiesCorporation (“Newbridge”), as representative of the underwriters listed therein (the “Underwriters”), pursuantto which the Company agreed to sell to the Underwriters in a firm commitment underwritten public offering (the “Offering”)an aggregate of 800,000 shares of the Company’s Common Stock, at a public offering price of $5.00 per share. In addition, the Underwriterswere granted an over-allotment option (the “Over-allotment Option”) for a period of 45 days to purchase up to an additional120,000 shares of Common Stock. The Offering closed on November 5, 2021 and the Common Stock began trading on the NASDAQ Capital Marketunder the symbol “BSFC” on November 3, 2021. The Over-allotment Option was not exercised by the Underwriters.

Thenet proceeds to the Company from the Offering, after deducting the underwriting discount, the underwriters’ fees and expenses andthe Company’s estimated Offering expenses, were approximately $3,600,000. The Company is using the net proceeds from the Offeringfor general corporate purposes, including working capital, operating expenses, and capital expenditures. The Company may also use a portionof the net proceeds to acquire or make investments in businesses, products, and offerings, although the Company does not have agreementsor commitments for any material acquisitions or investments at this time.

Inaddition, pursuant to the terms of the Underwriting Agreement and related “lock-up” agreements, each director, executiveofficer, and beneficial owners of over 10% of the Company’s Common Stock (for a period of 180 days after the date of the finalprospectus relating to the Offering), have agreed, subject to customary exceptions, not to sell, transfer or otherwise dispose of securitiesof the Company, without the prior written consent of Newbridge.

OnNovember 5, 2021, in connection with the Offering, the Company issued a warrant to purchase an aggregate of 56,000 shares of Common Stockat an exercise price of $5.00 per share to Newbridge. Such warrant expires on November 11, 2024.

LindGlobal Fund II LP investment

OnJanuary 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 to Lind a secured, two-year, interest free convertible promissory note inthe principal amount of $5,750,000 and a five-year warrant to purchase 1,000,000 shares of Common Stock of the Company at an exerciseprice of $4.50 per share, subject to customary adjustments. The warrant provides for cashless exercise and for full ratchet anti-dilutionif the Company issues securities at less than $4.50 per share. In connection with the issuance of the note and the warrant, the Companypaid a $150,000 commitment fee to Lind and approximately $87,000 of debt issuance costs.

Theoutstanding principal under the note is payable commencing July 24, 2022, in 18 consecutive monthly installments of $333,333, at theCompany’s option, in cash or shares of Common Stock at a price (the “Repayment Share Price”) based on 90% of the fivelowest volume weighted average prices (“VWAP”) during the 20-days prior to the payment date with a floor price of $1.50 pershare (the “Floor Price”), or a combination of cash and stock provided that if at any time the Repayment Share Price is deemedto be the Floor Price, then in addition to shares, the Company will pay Lind an additional amount in cash as determined pursuant to aformula contained in the note.

Thenote is mandatorily payable prior to maturity if the Company issues any preferred stock (with certain exceptions described in the note)or, if the Company or its subsidiaries issues any indebtedness other than certain amounts under the current line of credit facility withLighthouse. The Company also agreed not to issue or sell any securities with a conversion, exercise or other price based on a discountto the trading prices of the Company’s stock or to grant the right to receive additional securities based on future transactionsof the Company on terms more favorable than those granted to Lind, with certain exceptions.

Ifthe Company fails to maintain the listing and trading of its Common Stock, the note will become due and payable and Lind may convertall 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 VWAPduring the 20 days prior to delivery of the conversion notice.

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

Thenote is convertible into Common Stock at $5.00 per share, subject to certain adjustments, at any time after the earlier of six monthsfrom issuance or the date the registration statement is effective; provided that no such conversion may be made that would result inbeneficial ownership by Lind and its affiliates of more than 4.99% of the Company’s outstanding shares of Common Stock. If sharesare issued by the Company at less than the conversion price, the conversion price will be reduced to such price.

Upona change of control of the Company, as defined in the note, Lind has the right to require the Company to prepay 10% of the outstandingprincipal amount of the 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 note at a price per share equal to the lesser of the Repayment Share Price or the conversion price. TheNote contains certain negative covenants, including restricting the Company from certain distributions, stock repurchases, borrowing,sale of assets, loans and exchange offers.

Uponan event of default as described in the note, the note will become immediately due and payable at a default interest rate of 125% ofthe then outstanding principal amount. Upon a default, all or a portion of the outstanding principal amount may be converted into sharesof Common Stock by Lind at the lower of the conversion price and 80% of the average of the three lowest daily VWAPs.

Duringthe year ended December 31, 2022, the Company made principal payments on the note totaling $1,666,666 through the issuance of an aggregateof 666,666 shares of Common Stock and cash payments of $1,175,973 which included $899,999 principal payments and additional paymentsrequested by Lind pursuant to the terms of the note.

Basisof Presentation

Thefollowing discussion highlights our results of operations and the principal factors that have affected our financial condition as wellas our liquidity and capital resources for the periods described and provides information that management believes is relevant for anassessment and understanding of the statements of financial condition and results of operations presented herein. The following discussionand analysis are based on our unaudited financial statements contained in this Quarterly Report, which we have prepared in accordancewith United States generally accepted accounting principles. You should read the discussion and analysis together with such financialstatements and the related notes thereto.

Critical Accounting Policies and Estimates

Valuationof Goodwill and Long-Lived Assets

Goodwilland long-lived assets include the cost of the acquired business in excess of the fair value of the net assets recorded in connectionwith an acquisition. Long-lived assets include customer relationships, non-compete agreements, trademarks and fixed assets. For goodwill,our policy is to assess for impairment at year-end or whenever events or changes in circumstances indicate that the carrying value maynot be recoverable. For long-lived assets, we assess for impairment only if events occur that indicate that the carrying amount of anasset may not be recoverable.

Annually,we assess the recoverability of goodwill and long-lived assets by determining whether the fair values exceed the carrying values of theseassets. For long-lived assets, we use the income method, which uses a forecast of the expected future net cash flows associated witheach asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factorsassociated with the cash flow streams. Our goodwill testing may be performed utilizing either a qualitative or quantitative assessment;however, if a qualitative assessment is performed and we determine that the fair value of a reporting unit is more likely than not (i.e.,a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative test is performed.

Whenusing a quantitative test, we arrive at our estimates of fair value using a discounted cash flow analysis. Our assessment for impairmentof goodwill and long-lived assets compared the fair value of the reporting unit to the corresponding carrying value. If the carryingvalue of the asset exceeds its fair value, an impairment loss is recognized in an amount equal to the excess. An annual impairment analysisfor goodwill and long-lived assets was completed for Coastal Pride and TOBC due to the lower forecasted revenues and gross losses recognizedin the year ended December 31, 2022 as a result of the effect of the COVID-19 pandemic on the Company’s business. Based on ouryear-end 2022 annual impairment analysis for goodwill and long-lived assets, we recorded 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 CoastalPride and TOBC. For goodwill, the analysis concluded an impairment of $1,244,309 related to Coastal Pride and TOBC for year ended December31, 2022.

Thefair value conclusions as of December 31, 2022 are highly sensitive to changes in the assumptions used in the income approach, whichinclude forecasted revenues, perpetual growth rates, among others, all of which require significant judgments by management.

Fairvalue of the reporting unit is therefore determined using significant unobservable inputs, or level 3 in the fair value hierarchy. TheCompany has used recent historical performance, current forecasted financial information, and broad-based industry and economic statisticsas a basis to estimate the key assumptions utilized in the forecasted cash flow model. These key assumptions are inherently uncertainand require a high degree of estimation and judgment and are subject to change based on future changes, industry and global economicand geo-political conditions, and the timing and success of the implementation of current strategic initiatives.

Inventories

Substantiallyall of the Company’s inventory consists of packaged crab meat located at a public cold storage facility and merchandise in transitfrom suppliers. The Company also has eggs and fish in process inventory from TOBC. The cost of inventory is primarily determined usingthe 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. Inventoryis valued at the lower of cost or net realizable value, cost being determined using the first-in, first-out method for crab meat andusing 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.

Merchandiseis purchased cost and freight shipping point and becomes the Company’s asset and liability upon leaving the suppliers’ warehouse.The Company had in-transit inventory of approximately $1,598,000 and $1,182,000 as of December 31, 2022 and December 31, 2021, respectively.

TheCompany periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to thelower of cost or net realizable value based on its assessment of market conditions, inventory turnover and current stock levels. Inventorywrite-downs are charged to cost of goods sold. For the year ended December 31, 2022, the Company recorded an inventory adjustment toreduce the carrying value of inventory to the lower of cost or net realizable value in the amount of $743,218 which was charged to costof goods sold.

RevenueRecognition

TheCompany recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, assuch, we record revenue when our customer obtains control of the promised goods or services in an amount that reflects the considerationwhich the Company expects to receive in exchange for those goods or services. The Company’s source of revenue is from importingblue and red swimming crab meat primarily from Mexico, Indonesia, the Philippines and China and distributing it in the United Statesand Canada under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and Coastal PrideFresh and steelhead salmon and rainbow trout fingerlings produced by TOBC under the brand name Little Cedar Farms for distribution inCanada. We sell primarily to food service distributors. We also sell our products to wholesalers, retail establishments and seafood distributors.

Todetermine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performsthe following five steps: (1) identify the contract(s) with a customer by receipt of purchase orders and confirmations sent by the Companywhich includes a required line of credit approval process, (2) identify the performance obligations in the contract which includes shipmentof goods to the customer FOB shipping point or destination, (3) determine the transaction price which initiates with the purchase orderreceived from the customer and confirmation sent by the Company and will include discounts and allowances by customer if any, (4) allocatethe transaction price to the performance obligations in the contract which is the shipment of the goods to the customer and transactionprice determined in step 3 above and (5) recognize revenue when (or as) the entity satisfies a performance obligation which is when theCompany transfers control of the goods to the customers by shipment or delivery of the products.

TheCompany elected an accounting policy to treat shipping and handling activities as fulfillment activities. Consideration payable to acustomer 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.

RecentAccounting Pronouncements

ASU2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’sOwn Equity (Subtopic 815-40).

InAugust 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contractsin Entity’s Own Equity (Subtopic 815-40). The ASU simplifies the accounting for certain financial instruments with characteristicsof liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instrumentsand made certain disclosure amendments to improve the information provided to users. In addition, the FASB amended the derivative guidancefor the “own stock” scope exception and certain aspects of the earnings per share (“EPS”) guidance. The guidanceis effective for smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within thosefiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periodswithin those fiscal years. The Company adopted the ASU effective January 1, 2022 and applied the provisions of the ASU to the convertiblenote issued during the year ended December 31, 2022.

ASU2016-13 Financial Instruments – Credit Losses (Topic 326)

InJune 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on FinancialInstruments, which requires entities to use a forward-looking, expected loss model to estimate credit losses. It also requires entitiesto consider additional disclosures related to credit quality of trade and other receivables, including information related to management’sestimate of credit allowances. ASU 2016-13 was further amended in November 2018 by ASU 2018-19, Codification Improvements to Topic 236,Financial Instrument-Credit Losses. For public business entities that are U.S. Securities and Exchange Commission (SEC) filers excludingsmaller reporting companies, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periodswithin those fiscal years. For all other public business entities, the amendments are effective for fiscal years beginning after December15, 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 otherentities, the amendments are now effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal yearsbeginning after December 15, 2022. On November 15, 2019, FASB issued an Accounting Standard Update No. 2019-10 to amend the implementationdate to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permittedfor fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. As this ASU became effective on January1, 2023, the Company continues to evaluate the impact of these amendments to the Company’s financial position and results of operationsand currently expects no material impact of the adoption of the amendments on the Company’s consolidated financial statements.

Off-BalanceSheet Arrangements

Wecurrently have no off-balance sheet arrangements.

DESCRIPTIONOF BUSINESS

History

Wewere incorporated on October 17, 2017 in the State of Delaware as a blank check company to be used as a vehicle to pursue a businesscombination with an unidentified target. Following the Merger (as described below), we changed our name from “AG Acquisition GroupII, Inc.” to “Blue Star Foods Corp.” and succeeded to the business of Keeler & Co.

Merger

OnNovember 8, 2018 (the “Closing Date”), we entered into an Agreement and Plan of Merger and Reorganization (the “MergerAgreement”), with Keeler & Co., Blue Star Acquisition Corp., our newly formed, wholly-owned Florida subsidiary (“AcquisitionSub”), and John Keeler, Keeler & Co’s sole stockholder (the “Sole Stockholder”). Pursuant to the terms ofthe Merger Agreement, Acquisition Sub merged with and into Keeler & Co, which was the surviving corporation and thus became our wholly-ownedsubsidiary (the “Merger”).

Atthe Closing Date, each of the 500 shares of Common Stock of Keeler & Co issued and outstanding immediately prior to the closing ofthe Merger were converted into 30,000 shares of our Common Stock. As a result, an aggregate of 15,000,000 shares of our Common Stockwere issued to the Sole Stockholder.

Atthe effective time of the Merger, the Company redeemed an aggregate of 9,250,000 shares of Common Stock from the pre-Merger stockholdersof the Company (the “Pre-Merger Holders”) for cancellation by the Company (the “Share Redemption”) and, as aresult, the Pre-Merger Holders retained an aggregate of 750,000 shares of Common Stock after the Merger, representing a value of $1.5million. The shares were redeemed in consideration for the direct benefit the Pre-Merger Holders will receive in connection with theconsummation of the Merger.

Offering

Concurrentlywith the closing of the Merger, we closed a private placement offering (the “Offering”) in which we sold an aggregate of725 units of our securities (the “Units”) at a purchase price of $1,000 per Unit, for aggregate gross proceeds of $725,000.Each Unit consisted of one share of the Company’s 8% Series A convertible preferred stock, par value $0.0001 per share (the “SeriesA Stock”) and a three-year warrant (the “Warrant”) to purchase one-half of one share of Common Stock for every shareof Common Stock that would be received upon conversion of a share of Series A Stock (the “Warrant Shares”), at an exerciseprice of $2.40. The Series A Stock is convertible into shares (the “Conversion Shares”) of the Company’s Common Stock,at a conversion rate of $2.00 per share (the “Conversion Rate”). We issued 353,250 Warrant Shares in the Offering, whichWarrant Shares are exercisable independently of any conversion of Series A Stock. The net proceeds of the Offering were used by the Companyfor general corporate purposes. All of the Series A Stock have been converted to shares of the Company’s Common Stock.

CompanySettlement

Effectiveupon the closing of the Merger, we issued an aggregate of 688 Units to eleven “accredited investors” (the “SettlementParties”) for each such individual or entity entering into a settlement and mutual general release agreement (the “SettlementAgreement”) with the Company in full and complete settlement and satisfaction and release of claims such Settlement Parties mayhave against the Company (the “Company Settlement”).

Uponthe closing of the Merger, (i) options to purchase an aggregate of 104 shares of Keeler & Co’s Common Stock at an exerciseprice of $10,000 per share, which were outstanding immediately prior to the closing of the Merger, were converted into a ten-year immediatelyexercisable options to purchase an aggregate of 3,120,000 shares of Common Stock at an exercise price of $0.333 (which option was subsequentlyterminated unexercised), and (ii) a ten-year option to purchase 3,120,000 shares of Common Stock at an exercise price of $2.00, whichvested one-year from the date of grant.

Changesto the Board of Directors and Executive Officers

Onthe Closing Date of the Merger, the then-current directors and Chief Financial Officer and Chief Executive Officer of the Company resignedfrom all such positions as directors and officers of the Company and were replaced by new officers and directors.

Lock-ups

Inconnection with the Merger, each of our executive officers and directors after giving effect to the Merger (the “Restricted Holders”)and each of the Pre-Merger Holders, holding at the closing date of the Merger an aggregate of 750,000 shares of our Common Stock, enteredinto lock-up agreements (the “Lock-Up Agreements”), whereby the Restricted Holders were restricted for a period of 18 monthsand the Pre-Merger Holders were restricted for 12 months, after the Merger (the “Restricted Period”), from sales or dispositions(including pledges) in excess of 50% of all of the Common Stock held by (or issuable to) them and at a price below $2.20 per share (suchrestrictions together the “Lock-Up”). Notwithstanding such restrictions, during the Restricted Period (i) the RestrictedHolders may transfer up to 10% of their shares to a charitable organization which agrees to be bound by such Lock-Up restrictions and(ii) the Pre-Merger Holders may transfer up to 10% of their shares to a third party which agrees to be bound by such Lock-Up restrictions.From and after the Restricted Period, neither the Restricted Holders nor the Pre-Merger Holders may sell, dispose or otherwise transfermore than one-third of the Common Stock held by such Holder in any two-month period.

Redemptionfrom Pre-Merger Holders

Inconnection with the Merger, the Company redeemed an aggregate of 9,250,000 shares of Common Stock from the Company’s Pre-MergerHolders for cancellation by the Company (the “Share Redemption”) and, as a result, the stockholders retained an aggregateof 750,000 shares of Common Stock after the Merger (the “Retained Shares”), representing a value of $1.5 million. The shareswere redeemed in consideration for the direct benefit the Pre-Merger Holders will receive in connection with the consummation of theMerger.

Ourauthorized capital stock currently consists of 100,000,000 shares of Common Stock, and 5,000,000 shares of the preferred stock, of which10,000 shares have been designated as Series A Stock. Our Common Stock is not traded on any exchange. Our Common Stock was quoted onthe OTC pink sheets under the symbol “BSFC” since February 18, 2020. Our Common Stock was approved for listing on NASDAQunder the symbol “BSFC” and began trading on November 3, 2021.

CoastalPride Acquisition

OnNovember 26, 2019, Keeler & Co., Inc. (the “Purchaser”) entered into an Agreement and Plan of Merger and Reorganization(the “Coastal Merger Agreement”) with Coastal Pride Company, Inc., a South Carolina corporation, Coastal Pride Seafood, LLC(“Coastal Pride”), a Florida limited liability company and newly-formed, wholly-owned subsidiary of Keeler & Co. (the“Acquisition Subsidiary” and, upon the effective date of the Coastal Merger, the “Surviving Company), and The WalterF. Lubkin, Jr. Irrevocable Trust dated 1/8/03 (the “Trust”), Walter F. Lubkin III (“Lubkin III”), Tracy LubkinGreco (“Greco”) and John C. Lubkin (“Lubkin”), constituting all of the shareholders of Coastal Pride Company,Inc. immediately prior to the Coastal Merger (collectively, the “Sellers”). Pursuant to the terms of the Coastal Merger Agreement,Coastal Pride Company, Inc. merged with and into the Acquisition Subsidiary, with the Acquisition Subsidiary being the surviving company(the “Coastal Merger”).

CoastalPride is a seafood company, based in Beaufort, South Carolina, that imports pasteurized and fresh crabmeat sourced primarily from Mexicoand Latin America and sells premium branded label crabmeat throughout North America.

Pursuantto the terms of the Coastal Merger Agreement, the following consideration was paid by Keeler & Co.: (i) an aggregate of $394,622in cash; (ii) a five-year 4% promissory note in the principal amount of $500,000 (the “Lubkin Note), issued by Keeler & Co.to Walter Lubkin Jr. (“Walter Jr.”); (iii) three-year 4% convertible promissory notes in the aggregate principal amount of$210,000 (collectively, the “Sellers Notes” and together with the Lubkin Note, the “Notes”), issued by Keeler& Co. to Greco, Lubkin III and Lubkin, pro rata to their ownership of Coastal Pride Company, Inc. immediately prior to the CoastalMerger; (iii) 500,000 shares of Common Stock of the Company, issued to Walter Lubkin, Jr. (the “Walter Jr. Shares”); and(iii) an aggregate of 795,000 shares of Common Stock of the Company, issued to Greco, Lubkin III and Lubkin, pro rata to their ownershipof Coastal Pride Company, Inc. immediately prior to the Coastal Merger (together with the Walter Jr. Shares, the “ConsiderationShares”).

TheNotes are subject to a right of offset against the Coastal Sellers’ indemnification obligations as described in the Coastal MergerAgreement and are subordinate and subject to prior payment of all indebtedness of John Keeler under the Loan Agreement with LighthouseFinancial Corp., a North Carolina corporation (“Lighthouse”).

Principaland interest under the Lubkin Note are payable quarterly, commencing February 26, 2020, in an amount equal to the lesser of (i) $25,000and (i) 25% of the Surviving Company’s quarterly earnings before interest, tax, depreciation and amortization.

One-sixthof the principal and interest under the Sellers Notes are payable quarterly commencing on August 26, 2021. The Sellers Notes are convertibleinto shares of Common Stock of the Company at the Seller’s option, at any time after the first anniversary of the date of the Note,at the rate of one share for each $2.00 of principal and/or interest so converted (the “Conversion Shares”).

Keeler& Co. has the right to prepay the Notes in whole or in part at any time without penalty or premium.

OnApril 15, 2021, the Company issued an aggregate of 16,460 shares of Common Stock to the Seller’s in lieu of payment in cash ofaccrued interest in the aggregate amount of $39,504 under the Sellers’ Notes.

Atthe effective time of the Coastal Merger, the Coastal Sellers entered into leak-out agreements (each, a “Leak-Out Agreement”)pursuant to which the Coastal Sellers and Walter Jr. may not directly or indirectly pledge, sell, or transfer any of the ConsiderationShares or Conversion Shares, or enter into any swap or other arrangement that transfers any of the economic consequences of ownershipof any such shares for one year from the date of the Coastal Merger. Thereafter, each Seller and Walter Jr. may transfer up to 25% ofthe aggregate of the Consideration Shares and the Conversion Shares held by such person, in each successive six-month period.

Inconnection with the Coastal Merger, Lubkin III and Greco agreed to serve as president and chief financial officer, respectively, of theSurviving Company.

ACFFinco I, LP (“ACF”) and Keeler & Co. were parties to a loan and security agreement, originally dated as of August 31,2016. As a condition to ACF’s waiver of certain events of default under the Loan Agreement, and consent to the formation of theAcquisition Subsidiary and the Coastal Merger, the Acquisition Subsidiary and Keeler & Co. entered into the Joinder and Seventh Amendmentto the Loan Agreement which resulted, among other things, in Coastal Pride becoming an additional borrower under the Loan Agreement.On March 31, 2021, Keeler & Co. and Coastal Pride entered into a loan and security agreement (the “Loan Agreement”) withLighthouse Financial Corp., a North Carolina corporation (“Lighthouse”), and the loan with ACF was extinguished.

Tasteof BC Aquafarms Acquisition

OnApril 27, 2021, we entered into a stock purchase agreement (the “SPA”) with TOBC, and Steve Atkinson and Janet Atkinson (the“TOBC Sellers”), the owners of all of the capital stock of TOBC (the “TOBC Shares”) pursuant to which we acquiredall of the TOBC Shares from the TOBC Sellers for an aggregate purchase price of CAD$4,000,000, subject to adjustment based upon the amountof TOBC’s working capital on the closing date (the “Purchase Price”) as follows: (i) CAD$1,000,000 in cash, pro ratawith each TOBC Seller’s ownership of TOBC (ii) by the issuance to each TOBC Seller of a non-interest bearing promissory note inthe aggregate principal amount of CAD$200,000, with a maturity date of November 30, 2021, with the principal amount of each note to bepro rata with each TOBC Seller’s ownership of TOBC, and secured by a Company guarantee and a general security agreement creatinga security interest over certain assets of the Company, and (iii) 987,741 shares of Common Stock, (representing CAD$2,800,000 of sharesbased on USD$2.30 per share) with each TOBC Seller receiving a pro rata portion of such shares based upon the total number of TOBC sharesheld by such TOBC Seller.

OnJune 24, 2021, the SPA was amended to increase the purchase price to an aggregate of CAD$5,000,000 and the TOBC acquisition closed. Pursuantto the amendment, on August 3, 2021, an aggregate of 344,957 shares of Common Stock (representing CAD$1,000,000 of additional sharescalculated at USD$2.30 per share) was put in escrow until the 24-month anniversary of the closing. If, within 24 months of the closing,TOBC has cumulative revenue of at least CAD$1,300,000, the TOBC Sellers will receive all of the escrowed shares. If, as of the 24-monthanniversary of the closing, TOBC has cumulative revenue of less than CAD$1,300,000, the TOBC Sellers will receive a prorated number ofthe escrowed shares based on the actual cumulative revenue of TOBC as of such date.

Inaddition to the foregoing consideration, at the time of the closing, the Company provided CAD$488,334 to TOBC for the extinguishmentof certain of TOBC’s existing debt.

Theshares of Common Stock received by the TOBC Sellers are subject to a leak-out restriction commencing on the date of issuance, as follows:(i) up to 25% may be sold after 12 months; (ii) up to 50% may be sold after 18 months; (iii) up to 75% may be sold after 24 months; and(iv) up to 100% may be sold after 30 months.

TheTOBC Seller’s non-interest-bearing promissory notes were paid in full at maturity.

Inconnection with the TOBC acquisition, the TOBC Sellers entered into four-year confidentiality, non-competition and non-solicitation agreementswith the Company.

GaultSeafood Asset Acquisition

OnFebruary 3, 2022, Coastal Pride entered into an asset purchase agreement with Gault Seafood, LLC, a South Carolina limited liabilitycompany ( “Gault Seafood”), and Robert J. Gault II, President of the Seller (“Gault”) pursuant to which CoastalPride acquired all of Gault Seafood’s right, title and interest in and to assets relating to Gault Seafood’s soft-shell craboperations, 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 cashpayment in the amount of $359,250 and the issuance of 167,093 shares of Common Stock of the Company with a fair value of $359,250.

CoastalPride also entered into a consulting agreement with Gault under the terms of which Gault will provide consulting services to CoastalPride at the rate of $100 per hour, however, the first 45 days of services will be provided at no cost. Gault also agreed not to competewith Coastal Pride and its affiliates for a period of five years in any market in which Coastal Pride is operating or is consideringoperating or solicit employees, consultants, customers or suppliers or in any way interfere with Coastal Pride’s business relationshipsfor a five-year period, Gault is also bound by customary confidentiality provisions. The Consulting Agreement may be terminated by eitherparty upon five days written notice and by Costal Pride immediately for cause.

Inconnection with the asset acquisition, Coastal Pride will lease 9,050 square feet from Gault for $1,000 per month under a one-year leaseagreement and will continue to operate the acquired soft-shell crab operations at such location in Beaufort, South Carolina unless anew facility is earlier completed.

Overview

Weare an international seafood company based in Miami, Florida that imports, packages and sells refrigerated pasteurized crab meat, andother premium seafood products. Our current source of revenue is from importing blue and red swimming crab meat primarily from Indonesia,the Philippines and China and distributing it in the United States and Canada under several brand names such as Blue Star, Oceanica,Pacifika, Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh, and steelhead salmon and rainbow trout fingerlings producedunder the brand name Little Cedar Farms for distribution in Canada. The crab meat which we import is processed in 13 plants throughoutSoutheast Asia. Our suppliers are primarily via co-packing relationships, including two affiliated suppliers. We sell primarily to foodservice distributors. We also sell our products to wholesalers, retail establishments and seafood distributors.

Strategy

Weplan to grow the Company organically by continuing to increase our customer base and by introducing new high-value product lines andcategories, as well as strategically acquiring companies that focus on additional species and proprietary technologies that we believewe can integrate into a larger, diversified company.

OperatingCompanies

Weoperate through the following subsidiary companies:

Keeler& Co., doing business as Blue Star Foods, is an international seafood company that imports, packages and sells refrigerated pasteurizedcrab meat sourced primarily from Southeast Asia and other premium seafood products.

Keeler& Co. purchases the majority of our crab product (Portunus Pelagicus and Portunus Haanii) from processors which source the crab meatfrom local fishermen in Indonesia, the Philippines, Thailand, Vietnam, Sri Lanka and India, to whom we pay a premium in order to outfittheir boats with a proprietary GPS-based system. This system allows us to trace where the crab product originates and ensure that onlymature crabs are being harvested by the use of collapsible traps and not gill nets.

Thecrab meat is purchased directly from processors with whom we have long-standing relationships, that have agreed to source their productin a sustainable manner. All crab meat is sourced under the Company’s U.S Food & Drug Administration (“FDA”) approvedHazard Analysis Critical Control Point (“HACCP”) Plan. Additionally, all suppliers are certified by the British Retail Consortium(the “BRC”) and are audited annually to ensure safety and quality of our product.

Theimported crab meat is processed in six out of the ten plants available throughout Southeast Asia. Our suppliers are primarily via co-packingrelationships, including two affiliated suppliers. We sell primarily to food service distributors. We also sell our products to wholesalers,retail establishments and seafood distributors.

Wehave created a technology platform that tracks the product through its entire chain of custody and collects and transmits various datato the Company in real-time, from the loading site to the packing plant, through the sorting and pasteurization process and the exportingprocess to the end customer. Our technology allows our customers access to their “Scan on Demand” QR code-enabled traceabilityapplication.

Ourpremium proprietary brands, Blue Star, Pacifika and Oceanica are differentiated in terms of quality and price point.

Webelieve that we utilize best-in-class technology, in both resource sustainability management and ecological packaging.

CoastalPride is a seafood company, based in Beaufort, South Carolina, that imports pasteurized and fresh crab meat (Portunus Pelagicus,Portunus Haanii and Callinectes) sourced primarily from Mexico and Latin America and sells premium branded label crab meat throughoutNorth America.

Ithas three premium branded label products, First Choice, Good Stuff and Coastal Pride Fresh.

TOBCis a land-based recirculating aquaculture system (“RAS”) farming operation located in Nanaimo, British Columbia, Canadawith an annual production capacity of approximately 100 tons. It produces steelhead salmon and rainbow trout fingerlings under the brandname Little Cedar Farms for distribution in Canada.

TOBC’sRAS facility has been operated as a model farm for the development of salmon RAS technology. We currently intend to refine this modelfarm into a 150-ton standardized module that will be replicated in the development of future farms. The next facility we hope to build,subject to sufficient resources, will have 10 such modules, for a total production capacity of 1,500 tons.

Thecurrent RAS facility is in an insulated, bio-secure structure in which culture conditions are controlled. The primary RAS system is composedof thirteen culture tanks, a drum filter, a fluidized sand bed biofilter and a low head oxygenator and employs an efficient gravity fedlow head arrangement which reduces energy use as compared to other RAS designs. Additionally, there are two independent partial reusefinishing tank systems.

Weeklyharvests of approximately two tons of salmon are stunned and bled at the farm and then processed as fresh iced head on gutted (“HOG”)fish at a Canadian Food Inspection Agency approved processing facility. Currently, TOBC sells its salmon mainly to two wholesale seafooddistributors in Canada.

Eggsare purchased from two primary suppliers and are hatched approximately every eight weeks. TOBC’s hatchery is composed of a recirculatingsystem that utilizes an upwelling “heath stack” incubator and five tanks with moving bed biofiltration. The fish are thentransferred to the main RAS system approximately 12 weeks post hatch. TOBC’s feed is largely terrestrial based from grains andother non-marine ingredients.

Webelieve that the faster life cycle from birth to harvesting of our salmon, as compared to conventional salmon, allows it to be producedmore economically in contained, land-based RAS farms. Although RAS farms require greater capital investment than the sea cage approach,we believe that the higher costs are offset by more efficient growth and a shorter transportation distance to market.

BrandedProducts