Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Oct. 31, 2018 | Dec. 27, 2018 | May 31, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Blue Star Foods Corp. | ||
Entity Central Index Key | 1,730,773 | ||
Document Type | 10-K | ||
Document Period End Date | Oct. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --10-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 0 | ||
Entity Common Stock, Shares Outstanding | 16,015,000 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 |
Balance Sheets
Balance Sheets - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
CURRENT ASSETS: | ||
Cash | $ 1,024 | $ 4,000 |
Total current assets | 1,024 | 4,000 |
Total Assets | 1,024 | 4,000 |
CURRENT LIABILITIES: | ||
Accounts payable | 2,400 | 387 |
Advances from related parties | 9,000 | |
Total Liabilities | 11,400 | 387 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY (DEFICIENCY): | ||
Preferred stock $0.0001 par value: 5,000,000 shares authorized; none issued and outstanding | ||
Common stock $0.0001 par value: 10,000,000 shares authorized; 10,000,000 shares issued and outstanding at October 31, 2018 and October 31, 2017 | 1,000 | 1,000 |
Additional paid in capital | 3,000 | 3,000 |
Accumulated deficiency | (14,376) | (387) |
Total Stockholders' Equity (Deficiency) | (10,376) | 3,613 |
Total Liabilities and Stockholders' Equity (Deficiency) | $ 1,024 | $ 4,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Oct. 31, 2018 | Oct. 31, 2017 | Oct. 17, 2017 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 10,000,000 | 10,000,000 | 100,000,000 |
Common stock, shares issued | 10,000,000 | 10,000,000 | |
Common stock, shares outstanding | 10,000,000 | 10,000,000 |
Statements of Operations
Statements of Operations - USD ($) | Oct. 31, 2017 | Oct. 31, 2018 |
Income Statement [Abstract] | ||
Revenue | ||
Costs and Expenses: | ||
General and administrative | 387 | 13,989 |
Loss from Operations Before Income Taxes | (387) | (13,989) |
Income Tax Provision | ||
Net Loss | $ (387) | $ (13,989) |
Basic and diluted per share amounts: | ||
Basic and diluted net loss per share | ||
Basic and Diluted Weighted Average Shares Outstanding | 10,000,000 | 10,000,000 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Deficiency) - 12 months ended Oct. 31, 2018 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficiency [Member] | Total |
Balance at Oct. 31, 2017 | $ 1,000 | $ 3,000 | $ (387) | $ 3,613 |
Balance, shares at Oct. 31, 2017 | 10,000,000 | |||
Net loss | (13,989) | (13,989) | ||
Balance at Oct. 31, 2018 | $ 1,000 | $ 3,000 | $ (14,376) | $ (10,376) |
Balance, shares at Oct. 31, 2018 | 10,000,000 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | Oct. 31, 2017 | Oct. 31, 2018 |
Cash flows from operating activities: | ||
Net Loss | $ (387) | $ (13,989) |
Adjustments to reconcile net loss to cash used in operations | ||
Increase in accounts payable | 387 | 2,013 |
Net Cash Used in Operating Activities | (11,976) | |
Financing Activities | ||
Proceeds from sale of stock to founders | 4,000 | |
Advances from related parties | 9,000 | |
Net Cash Provided by Financing Activities | 4,000 | 9,000 |
Net Increase (Decrease) in Cash | 4,000 | (2,976) |
Cash-Beginning of Period | 4,000 | |
Cash-End of Period | 4,000 | 1,024 |
Supplemental Cash Information: | ||
Interest paid in cash | ||
Taxes paid in cash |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Oct. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Blue Star Foods Corp., formerly known as AG Acquisition Group II, Inc. (the “Company”) was incorporated in the State of Delaware on October 17, 2017 and established a fiscal year end of October 31. The Company was formed to engage in any lawful businesses and to seek and engage in an as of then, unidentified merger or acquisition to provide a method for a foreign or domestic private company to become a reporting company with a class of securities registered under the Securities Exchange Act of 1934. The Company completed a merger (the “Merger”) on November 8, 2018 in a transaction which was treated as a recapitalization and reverse acquisition of the Company for financial accounting purposes. (See Note 7). The Company’s activities since formation, other than those related to the Merger, have been limited to issuing shares to its founding shareholders and setting up its corporate entity. Following the Merger, the Company discontinued its prior activities of seeking a business for a merger or acquisition and acquired the business of Blue Star, as such term is defined in Note 7 below, which is an international seafood company that processes, packages and sells refrigerated pasteurized blue and red crab meat, and other premium seafood products. On November 5, 2018, the Company changed its name from AG Acquisition Group II, Inc. to Blue Star Foods Corp. and on November 8, 2018, the Company changed its fiscal year from a fiscal year ending October 31 to a fiscal year ending on December 31 of each year (See Note 7). |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | NOTE 2 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) regulations of the United States Securities and Exchange Commission. The financial statements and accompanying notes are the representations of the Company’s management, who are responsible for their integrity and objectivity. The Company has not earned any revenue from operations since inception. USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. CASH Cash includes cash on hand and on deposit at banking institutions. INCOME TAXES Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of October 31, 2018, the Company’s deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. LOSS PER COMMON SHARE Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. During the year ended October 31, 2018 and the period from October 17, 2017 (inception) through October 31, 2017, there were no outstanding potentially dilutive securities. FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of financial assets such as cash, accounts payable and advances from related parties, approximate their fair values because of the short maturity of these instruments. RECENT ACCOUNTING PRONOUNCEMENTS ASU No. 2014-09 Revenue from Contracts with Customers Topic 606. Topic 605, Revenue Recognition Required Elements of Our Revenue Recognition Topic 606 ● we ensure we have an executed purchase order with our customers that we believe is legally enforceable; ● we identify the “performance obligation in the respective purchase order; ● we determine the “transaction price” for each performance obligation in the respective purchase order; ● we allocate the transaction price to each performance obligation; and ● we recognize revenue only when we satisfy each performance obligation. These five elements, as applied to each of our revenue categories, is summarized below: ● Revenue - we sell our products to wholesalers, distributors and retailers (i.e., our customers). Our wholesalers/distributors in turn sell our products directly to restaurants or end users as well as retail stores. Revenue from our product sales is recognized when the product is taken from our warehouse via arranged freight or customer pick-up, in return for agreed-upon consideration. Additionally, the Company offers sales discounts and promotions to its customers in various forms. These incentives are accounted for as a reduction of revenue when they are characterized as cash consideration. Otherwise, the incentives are expensed. Revenue is inclusive of shipping and handling fees and all related costs of shipping and handling related to sales to customers are categorized as cost of revenue. ● Product Returns Allowances - We estimate expected product returns for our allowance based on our historical return rates. Returned product is evaluated for resale, and may be resold. ASC 842 Leases |
Stockholder's Equity (Deficienc
Stockholder's Equity (Deficiency) | 12 Months Ended |
Oct. 31, 2018 | |
Equity [Abstract] | |
Stockholder's Equity (Deficiency) | NOTE 3 – STOCKHOLDER’S EQUITY (DEFICIENCY) Effective October 17, 2017, the Company issued a total of Ten Million (10,000,000) shares of $0.0001 par value common stock to entities owned and controlled by the Company’s two officers and directors. The shares were issued for $0.0004 per share for a total of Four Thousand Dollars ($4,000). The Company is authorized to issue 100,000,000 shares of common stock, par value $0.0001 and 5,000,000 shares of preferred stock, par value $0.0001. As of October 31, 2018, there were 10,000,000 shares of common stock and no shares of preferred stock issued and outstanding. |
Liquidity
Liquidity | 12 Months Ended |
Oct. 31, 2018 | |
Liquidity | |
Liquidity | NOTE 4 – LIQUIDITY Given that a merger occurred on November 8, 2018, raised $725,000 as part of the merger, and have access to a revolving line of credit to provide working capital as necessary, management believes the Company has the necessary cash flow to meet its financial obligation as they become due through December 2019. As of December 28, 2018 the revolving line of credit had an outstanding balance of $8,079,712. The Company will continue to rely on the working capital provided by its Lender and continue to solicit ongoing working capital by the sale of its stock as necessary. See Note 7 Subsequent Events. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Oct. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 5 – RELATED PARTY TRANSACTIONS As of October 31, 2018, entities owned and controlled by the Company’s former sole officers and directors have provided the Company with its only cash for operations. That is, entities, owned and controlled by the Company’s former sole officers and directors purchased a total of 10,000,000 shares of common stock for a total of $4,000 on October 17, 2017. Further, during the year ended October 31, 2018, entities owned and controlled by the Company’s former sole officers and directors have loaned the Company funds totaling $9,000. The advances are not interest bearing and due on demand. As of November 8, 2018, these advances were converted to equity. The Company previously used the office address of a former officer and director, without charge. The same former officer previously also provided legal services to the Company as of October 17, 2017, through November 8, 2018, without charge. |
Income Taxes
Income Taxes | 12 Months Ended |
Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 6 – INCOME TAXES The Company accounts for income taxes using the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory rates to differences between the financial statement carrying amounts and tax bases of existing assets and liabilities. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company provides a valuation allowance for deferred tax assets, when required, based on evaluation of the realizability of such deferred tax assets. The tax effects of the significant temporary differences representing deferred assets as of the year ended October 31, 2018 and for the period from October 17, 2017 (inception) through October 31, 2017: October 31, 2018 October 31, 2017 Net operating loss $ 3,497 97 Valuation allowance (3,497 ) (97 ) Net deferred income tax asset $ – – As of October 31, 2018, the Company had net operating losses of approximately $13,989 available to offset future taxable income, subject to annual limitations. As of October 31, 2018, the Company’s deferred tax asset is offset by a valuation allowance due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Oct. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 7 – SUBSEQUENT EVENTS Name Change On November 5, 2018, the Company changed its name from AG Acquisition Group II, Inc. to Blue Star Foods Corp. effective on November 5, 2018. Series A Preferred Stock On November 5, 2018, the Company amended its Certificate of Incorporation as filed with the Secretary of State of the State of Delaware to designate the 8% Series A Convertible Preferred Stock (the “Series A Preferred Stock”) as a series of preferred stock of the Company. 10,000 shares of Series A Preferred Stock are authorized, with a par value of $0.0001 per share. The Series A Preferred Stock has no maturity, is not subject to any sinking fund or redemption, and will remain outstanding indefinitely unless and until converted by the holder or the Company decides to redeem or otherwise repurchase the Series A Preferred Stock. The Company is not required to redeem, purchase or set aside funds to redeem the Series A Preferred Stock. The Series A Preferred Stock ranks, with respect to rights to the payment of dividends and/or the distribution of assets in the event of any liquidation, dissolution or winding up of the Company, (i) senior to all classes or series of the common stock, par value $0.0001 per share, of the Company (“Common Stock”), and to all other equity securities issued by the Company, other than equity securities referred to in clauses (ii) and (iii) below; (ii) on parity with all equity securities issued by the Company with terms specifically providing that those equity securities rank on parity with the Series A Preferred Stock; (iii) junior to all equity securities issued by the Company with terms specifically providing that those equity securities rank senior to the Series A Preferred Stock; and (iv) effectively junior to all existing and future indebtedness and liabilities of the Company. Cumulative dividends will accrue on each share of Series A Preferred Stock, at the rate of 8% of the purchase price (which purchase price will be $1,000 per share) per year. The dividend on the Series A Preferred Stock is payable quarterly, when and if declared by the board of directors, beginning on September 30, 2018 and thereafter on December 31, March 31 and June 30 of each calendar year. The dividends are to be paid in shares of Common Stock with such shares being valued at the volume weighted average price of the common stock on the trading market on which the Common Stock is then listed or quoted or the fair market value of a share of Common Stock as determined by an independent appraiser if it is not so listed or quoted. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series A Preferred Stock will be entitled to be paid out of the assets the Company, subject to the preferential rights of the holders of any class or series of capital stock of the Company it may issue ranking senior to the Series A Preferred Stock, a liquidation preference of the Purchase Price, before any distribution of assets is made to holders of Common Stock or any other class or series of capital stock of the Company that it may issue that ranks junior to the Series A Preferred Stock as to liquidation rights. The liquidation preference will be proportionately adjusted in the event of a stock split, stock combination or similar event. Each share of Series A Preferred Stock is convertible, at any time and in the sole discretion of the holder thereof, into shares of Common Stock at a conversion rate of 500 shares of Common Stock per each share of Series A Preferred Stock, which conversion rate is subject to customary adjustments for dividends or distributions on Common Stock payable in shares of Common Stock, or splits or combinations relating to the Common Stock. Upon any merger, share exchange or consolidation of the Company with any other corporation or entity; the sale, lease, exchange, mortgage, pledge, transfer or other disposition or encumbrance, whether in one transaction or a series of transactions, by the Company of all or substantially all of the Company’s assets; or any agreement, contract or other arrangement providing for any of the foregoing transactions (other than the Merger, as such term is defined below), each share of Series A Preferred Stock will remain outstanding and will be convertible into the kind and amount of securities or other property as the Common Stock is converted into in such transaction. Holders of the Series A Preferred Stock have no voting rights, except as discussed below or as otherwise required by law. So long as any shares of Series A Preferred Stock remain outstanding, the may not, without the affirmative vote or consent of the holders of at least two-thirds of the shares of the Series A Preferred Stock outstanding at the time (voting together as a class with all other series of parity Preferred Stock that the may issue upon which similar voting rights have been conferred and are exercisable), (i) authorize or create, or increase the authorized or issued amount of, any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any of the authorized capital stock of the into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or (ii) amend, alter, repeal or replace the Certificate of Incorporation so as to materially and adversely affect and deprive holders of Series A Preferred Stock. On each matter on which holders of Series A Preferred Stock are entitled to vote, each share of Series A Preferred Stock will be entitled to one vote. Merger On November 8, 2018 (the “Closing Date”), the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”), with John Keeler & Co., Inc., d/b/a Blue Star Foods, a privately held Florida corporation (“Blue Star”), Blue Star Acquisition Corp., a newly formed, wholly-owned Florida subsidiary of the Company (“Acquisition Sub”), and John Keeler, Blue Star’s sole stockholder (the “Blue Star Stockholder”). Pursuant to the terms of the Merger Agreement, Acquisition Sub merged with and into Blue Star, which was the surviving corporation and thus became the Company’s wholly-owned subsidiary (the “Merger”). Following the Merger, the Company discontinued its prior activities of seeking a business for a merger or acquisition and acquired the business of Blue Star, which is an international seafood company that processes, packages and sells refrigerated pasteurized blue and red crab meat, and other premium seafood products. At the Closing Date, each of the 500 shares of Blue Star’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into 30,000 shares of the Company’s common stock, $0.0001 par value per share (“Common Stock”). As a result, an aggregate of 15,000,000 shares of the Company’s Common Stock were issued to the Blue Star Stockholder. At the effective time of the Merger, the Company redeemed 9,250,000 shares of Common Stock from the pre-Merger stockholders of the Company (the “Pre-Merger Holders”), which retained an aggregate of 750,000 shares of Common Stock. The Merger was treated as a recapitalization and reverse acquisition of the Company for financial accounting purposes. Blue Star is considered the acquirer for accounting purposes, and the Company’s historical financial statements before the Merger will be replaced with the historical financial statements of Blue Star before the Merger in future filings with the Securities and Exchange Commission. The Merger is intended to be treated as a tax-free reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended. As discussed above, on November 8, 2018, pursuant to the terms of the Merger Agreement, all of the shares of common stock of Blue Star were exchanged for 15,000,000 restricted shares of Common Stock. On November 8, 2018, Christopher Constable, the current Chief Financial Officer of the Company, was issued a ten-year option to purchase 3,120,000 shares of Common Stock, which option vests and becomes exercisable one year from the date of issuance. On November 8, 2018, upon the closing of the Merger, 80,000 shares of Common Stock were issued to The Crone Law Group, P.C. for legal services, 129,500 shares of Common Stock were issued to Sandstone Group Corp. and 55,500 shares were issued to Newbridge Securities Corporation for financial advisory services provided to Blue Star in connection with the Merger. Equity Issuances Concurrently with the closing of the Merger, the Company held an initial closing of its private placement offering (the “Offering”) of a minimum of $700,000 and a maximum of $3,200,000 of units of the Company’s securities (the “Units”), in which the Company sold 725 Units at a purchase price of $1,000 per Unit. Each Unit consisted of one share of the Company’s 8% Series A convertible preferred stock, par value $0.0001 per share (the “Series A Stock”), initially convertible into shares (the “Conversion Shares”) of the Company’s Common Stock, at a conversion rate of $2.00 per share (the “Conversion Rate”) and (ii) a three-year warrant (the “Warrant”) to purchase one-half of one share of Common Stock for every share of Common Stock that would be received upon conversion of a share of Series A Stock (the “Warrant Shares”), at an exercise price equal to $2.40. The aggregate gross proceeds from the Offering were $725,000. The closing of the Offering and the closing of the Merger were conditioned upon each other and both closed on November 8, 2018. On November 8, 2018, we entered into a registration rights agreement (the “Registration Rights Agreement”) with the investors in the Offering. Pursuant to the terms of the Registration Rights Agreement, within 120 business days after the closing of the Offering, the Company is obligated toll file a registration statement (the “Registration Statement”) with the SEC covering the Conversion Shares and the Warrant Shares (collectively, the “Registrable Shares”) and use its commercially reasonable efforts to cause such Registration Statement to be declared effective and to keep such Registration Statement effective for a period of twelve months or for such shorter period ending on the earlier to occur of (x) the sale of all Registrable Securities and (y) the availability of Rule 144 for the sale of the Registrable Securities without volume limitations within a 90 day period. Notwithstanding the foregoing, in the event that the SEC limits the number of Registrable Securities that may be sold pursuant to the Registration Statement, the Company may remove from the Registration Statement such number of Registrable Securities as specified by the SEC on a pro-rata basis (the “SEC Cutback”). The holders of Registrable Shares will have “piggyback” registration rights for such Registrable Shares with respect to two registration statements in accordance with the terms and the notice requirements of the Registration Rights Agreement, subject to a SEC Cutback or a customary cutback in an underwritten offering, both which would be pro rata. Settlement Agreement Effective upon the closing of the Merger, the Company issued an aggregate of 688 Units to eleven “accredited investors” (the “Settlement Parties”) for each such individual or entity entering into a settlement and mutual general release agreement (the “Settlement Agreement”) with the Company in full and complete settlement and satisfaction and release of claims such Settlement Parties may have against the Company (the “Company Settlement”). Change to the Board of Directors and Executive Officers On the Closing Date of the Merger, Laura Anthony and Howard Gostfrand, the then-current directors and Chief Financial Officer and Chief Executive Officer of the Company, respectively, resigned from all such positions as directors and officers of the Company and were replaced by new officers and directors. Immediately following the closing of the Merger, the Company’s board of directors was reconstituted to consist of John Keeler, Carlos Faria, Christopher Constable and Nubar Herian, with John Keeler being the Executive Chairman of the Board. Following the Merger, the Company’s officers consisted of the officers of Blue Star immediately prior to the Merger, with Carlos Faria being the Chief Executive Officer and President of the Company and Christopher Constable being the Chief Financial Officer, Treasurer and Secretary of the Company. Redemption from Pre-Merger Holders In connection with the Merger, the Company redeemed an aggregate of 9,250,000 shares of Common Stock from the Company’s pre-Merger stockholders (the “Pre-Merger Holders”) for cancellation by the Company. The Pre-Merger Holders retained an aggregate of 750,000 shares of the Company’s Common Stock after the Merger, representing a value of $1,500,000 million. The shares were surrendered in consideration for the direct benefit the Pre-Merger Holders will receive in connection with the consummation of the Merger Change in Fiscal Year On November 8, 2018, the Company’s board of directors approved a change in the Company’s fiscal year from a fiscal year ending October 31 to a fiscal year ending on December 31 of each year, which is the fiscal year of Blue Star. The Company’s 2018 fiscal year will end on December 31, 2018. 2018 Equity Incentive Award Plan In connection with the Merger, the Company adopted the 2018 Equity Incentive Award Plan (the “2018 Plan”), which was effective immediately prior to the consummation of the Merger. The principal purpose of the 2018 Plan is to attract, retain and motivate selected employees, consultants and non-employee directors through the granting of stock-based compensation awards and cash-based performance bonus awards. 7,500,000 shares of Common Stock are reserved for issuance under the 2018 Plan as future incentive awards to executive officers, employees, consultants and directors. Upon the closing of the Merger, (i) options to purchase an aggregate of 104 shares of Blue Star’s common stock at an exercise price of $10,000 per share, which were outstanding immediately prior to the closing of the Merger, were converted into ten-year immediately exercisable options to purchase an aggregate of 3,120,000 shares of Common Stock at an exercise price of $0.333 under the 2018 Plan, and (ii) ten-year options to purchase 3,120,000 shares of Common Stock at an exercise price of $2.00, which vest one-year from the date of grant, were issued under the 2018 Plan. Revolving Line of Credit In connection with Merger that occurred on November 8, 2018, the Company became the borrower on a $14,000,000 revolving line of credit with ACF. As of December 28, 2018, the Company had $8,078,712 in outstanding debt to ACF. Borrowings under our loan and security agreement with ACF are secured by substantially all of our personal property, including our intellectual property. Pro forma results of operations (Unaudited) Following are the supplemental consolidated results of operations of Blue Star Foods Corp. on an unaudited pro forma basis, as if the acquisition had been consummated on November 1, 2017. We have not presented pro-forma results of operations for the period October 17, 2017 to October 31, 2017 as they are not material to the consolidated results of operations, either individually or in aggregate. (in thousands) As of October 31, 2018 (unaudited) Current Assets 11,897 Total Assets 12,260 Current Liabilities 12,880 Total Liabilities 12,883 Stockholder Deficit (623 ) Total Liabilities and Stockholder Deficit 12,260 (in thousands, except earnings per share) Year Ended October 31, 2018 (Unaudited) Revenue 32,102 Net Income (5,042 ) Diluted earnings per share (0.32 ) |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | USE OF ESTIMATES The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Cash | CASH Cash includes cash on hand and on deposit at banking institutions. |
Income Taxes | INCOME TAXES Under ASC 740, “Income Taxes,” deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets will not be realized. As of October 31, 2018, the Company’s deferred tax assets are offset by a valuation allowance due to the uncertainty of the realization of net operating loss or carry forward prior to expiration. |
Loss Per Common Share | LOSS PER COMMON SHARE Basic loss per common share excludes dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per common share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. During the year ended October 31, 2018 and the period from October 17, 2017 (inception) through October 31, 2017, there were no outstanding potentially dilutive securities. |
Fair Value of Financial Instruments | FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of financial assets such as cash, accounts payable and advances from related parties, approximate their fair values because of the short maturity of these instruments. |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS ASU No. 2014-09 Revenue from Contracts with Customers Topic 606. Topic 605, Revenue Recognition Required Elements of Our Revenue Recognition Topic 606 ● we ensure we have an executed purchase order with our customers that we believe is legally enforceable; ● we identify the “performance obligation in the respective purchase order; ● we determine the “transaction price” for each performance obligation in the respective purchase order; ● we allocate the transaction price to each performance obligation; and ● we recognize revenue only when we satisfy each performance obligation. These five elements, as applied to each of our revenue categories, is summarized below: ● Revenue - we sell our products to wholesalers, distributors and retailers (i.e., our customers). Our wholesalers/distributors in turn sell our products directly to restaurants or end users as well as retail stores. Revenue from our product sales is recognized when the product is taken from our warehouse via arranged freight or customer pick-up, in return for agreed-upon consideration. Additionally, the Company offers sales discounts and promotions to its customers in various forms. These incentives are accounted for as a reduction of revenue when they are characterized as cash consideration. Otherwise, the incentives are expensed. Revenue is inclusive of shipping and handling fees and all related costs of shipping and handling related to sales to customers are categorized as cost of revenue. ● Product Returns Allowances - We estimate expected product returns for our allowance based on our historical return rates. Returned product is evaluated for resale, and may be resold. ASC 842 Leases |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Income Tax Assets | The tax effects of the significant temporary differences representing deferred assets as of the year ended October 31, 2018 and for the period from October 17, 2017 (inception) through October 31, 2017: October 31, 2018 October 31, 2017 Net operating loss $ 3,497 97 Valuation allowance (3,497 ) (97 ) Net deferred income tax asset $ – – |
Subsequent Events (Tables)
Subsequent Events (Tables) | 12 Months Ended |
Oct. 31, 2018 | |
Subsequent Events [Abstract] | |
Schedule of Pro Forma Results of Operations | (in thousands) As of October 31, 2018 (unaudited) Current Assets 11,897 Total Assets 12,260 Current Liabilities 12,880 Total Liabilities 12,883 Stockholder Deficit (623 ) Total Liabilities and Stockholder Deficit 12,260 (in thousands, except earnings per share) Year Ended October 31, 2018 (Unaudited) Revenue 32,102 Net Income (5,042 ) Diluted earnings per share (0.32 ) |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Oct. 31, 2017 | Oct. 31, 2018 |
Accounting Policies [Abstract] | ||
Deferred taxes due to uncertainty of realization of net operating loss | ||
Outstanding dilutive securities |
Stockholder's Equity (Deficie_2
Stockholder's Equity (Deficiency) (Details Narrative) - USD ($) | Oct. 17, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares issued | 10,000,000 | 10,000,000 | |
Common stock, shares outstanding | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | |||
Preferred stock, shares outstanding | |||
Two Officers and Directors [Member] | |||
Number of stock issued | 10,000,000 | ||
Common stock, par value | $ 0.0001 | ||
Shares issued price per share | $ 0.0004 | ||
Number of stock issued total value | $ 4,000 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) | 12 Months Ended |
Oct. 31, 2018USD ($) | |
November 8, 2018 [Member] | |
Merger cost | $ 725,000 |
December 28, 2018 [Member] | |
Revolving line of credit | $ 8,079,712 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Oct. 17, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Due from related parties | $ 9,000 | ||
Sole Officers and Directors [Member] | |||
Number of common stock shares issued | 10,000,000 | ||
Number of common stock shares issued, value | $ 4,000 | ||
Due from related parties | $ 9,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | Oct. 31, 2018USD ($) |
Income Tax Disclosure [Abstract] | |
Net operating losses | $ 13,989 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Income Tax Assets (Details) - USD ($) | Oct. 31, 2018 | Oct. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss | $ 3,497 | $ 97 |
Valuation allowance | (3,497) | (97) |
Net deferred income tax asset |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Dec. 28, 2018 | Nov. 08, 2018 | Nov. 05, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | Oct. 17, 2017 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Subsequent Event [Member] | ||||||
Common stock, par value | $ 0.0001 | |||||
Conversion of stock | 500 | |||||
Subsequent Event [Member] | 2018 Equity Incentive Award Plan [Member] | ||||||
Options to purchase stock | 104 | |||||
Number of stock reserved for issuance | 7,500,000 | |||||
Stock option exercise price | $ 10,000 | |||||
Subsequent Event [Member] | 2018 Equity Incentive Award Plan [Member] | Common Stock [Member] | ||||||
Options to purchase stock | 3,120,000 | |||||
Stock option exercisable period | 10 years | |||||
Stock option exercise price | $ 0.333 | |||||
Subsequent Event [Member] | 2018 Equity Incentive Award Plan [Member] | Common Stock One [Member] | ||||||
Options to purchase stock | 3,120,000 | |||||
Stock option exercisable period | 10 years | |||||
Stock option exercise price | $ 2 | |||||
Subsequent Event [Member] | ACF FINCO LP [Member] | ||||||
Revolving line of credit | $ 14,000,000 | |||||
Outstanding debt | $ 8,078,712 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | ||||||
Common stock, par value | $ 0.0001 | |||||
Conversion of stock | 30,000 | |||||
Proceeds from public offerings | $ 725,000 | |||||
Number of units sold | 725 | |||||
Purchase price of units | $ 1,000 | |||||
Conversion price per share | $ 2 | |||||
Preferred stock description | Each Unit consisted of one share of the Company's 8% Series A convertible preferred stock, par value $0.0001 per share (the "Series A Stock"), initially convertible into shares (the "Conversion Shares") of the Company's Common Stock, at a conversion rate of $2.00 per share (the "Conversion Rate") | |||||
Warrant description | A three-year warrant (the "Warrant") to purchase one-half of one share of Common Stock for every share of Common Stock that would be received upon conversion of a share of Series A Stock (the "Warrant Shares"), at an exercise price equal to $2.40. | |||||
Warrant exercise price | $ 2.40 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Minimum [Member] | ||||||
Proceeds from public offerings | $ 700,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Maximum [Member] | ||||||
Proceeds from public offerings | $ 3,200,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | The Crone Law Group, P.C. [Member] | ||||||
Number of shares issued for service | 80,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Sandstone Group Corp. [Member] | ||||||
Number of shares issued | 129,500 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Newbridge Securities Corporation [Member] | ||||||
Number of shares issued for service | 55,500 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Restricted Stock [Member] | ||||||
Number of common stock exchanged | 15,000,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | John Keeler [Member] | ||||||
Number of shares issued | 15,000,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Pre-Merger Holders [Member] | ||||||
Number of shares redeemed | 9,250,000 | |||||
Number of common shares retained | 750,000 | |||||
Cancellation redeemed shares | 9,250,000 | |||||
Value of shares redeemed | $ 1,500,000 | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Christopher Constable [Member] | ||||||
Option term | 10 years | |||||
Options to purchase stock | 3,120,000 | |||||
Stock option exercisable period | 1 year | |||||
Subsequent Event [Member] | Merger Agreement [Member] | Eleven Accredited Investors [Member] | ||||||
Number of units sold | 688 | |||||
Subsequent Event [Member] | 8% Series A Convertible Preferred Stock [Member] | ||||||
Preferred stock, shares authorized | 10,000 | |||||
Preferred stock, par value | $ 0.0001 | |||||
Rate of purchase price | 8.00% | |||||
Purchase price of shares | $ 1,000 |
Subsequent Events - Schedule of
Subsequent Events - Schedule of Pro Forma Results of Operations (Details) | 12 Months Ended |
Oct. 31, 2018USD ($)$ / shares | |
Subsequent Events [Abstract] | |
Current Assets | $ 11,897 |
Total Assets | 12,260 |
Current Liabilities | 12,880 |
Total Liabilities | 12,883 |
Stockholder Deficit | (623) |
Total Liabilities and Stockholder Deficit | 12,260 |
Revenue | 32,102 |
Net Income | $ (5,042) |
Diluted earnings per share | $ / shares | $ (0.32) |