Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2018 | |
Document And Entity Information | |
Entity Registrant Name | Blue Star Foods Corp. |
Entity Central Index Key | 1,730,773 |
Document Type | S1 |
Document Period End Date | Sep. 30, 2018 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - John Keeler & Co., Inc. [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
CURRENT ASSETS | |||
Cash (including VIE $4,670 and $22,571 and $41,889, respectively) | $ 7,973 | $ 29,377 | $ 54,981 |
Restricted Cash | 58,503 | 29,498 | 193,674 |
Accounts receivable, net (including VIE $103,480, $138,33 and 53,750 respectively) | 3,400,550 | 4,675,588 | 4,417,654 |
Inventory, net (including VIE $66,916 and $257,798 and 89,127 respectively) | 6,866,917 | 12,952,850 | 9,434,629 |
Advances to related party | 1,079,583 | 981,972 | |
Other current assets (including VIE $6,896, $3,656 and 2,247 respectively) | 142,932 | 99,997 | 170,367 |
Total current assets | 11,556,458 | 17,787,310 | 15,253,277 |
FIXED ASSETS, net | 106,213 | 146,496 | 175,405 |
OTHER ASSETS | 238,662 | 311,053 | 343,930 |
TOTAL ASSETS | 11,901,333 | 18,244,859 | 15,772,612 |
CURRENT LIABILITIES | |||
Accounts payable and accruals (including VIE $26,116 $318,073 and 40,329 respectively) | 2,751,603 | 4,409,232 | 5,314,796 |
Working capital line of credit | 7,462,153 | 12,109,150 | 9,597,415 |
Current maturities of long-term debt | 36,524 | 35,011 | 33,090 |
Stockholder notes payable - Subordinated | 2,910,136 | 2,910,136 | 2,410,136 |
Total current liabilities | 13,160,416 | 19,463,529 | 17,355,437 |
LONG -TERM DEBT | 6,307 | 33,878 | 68,889 |
TOTAL LIABILITIES | 13,166,723 | 19,497,407 | 17,424,326 |
COMMITMENTS AND CONTINGENCIES | |||
John Keeler & Co. stockholder's deficit: | |||
Common stock, $1.00 par value 500 shares authorized, issued and Outstanding | 500 | 500 | 500 |
Additional paid-in capital | 559,257 | 559,257 | 559,257 |
Accumulated deficit | (1,461,812) | (1,494,927) | (1,888,799) |
Total John Keeler & Co. stockholder's deficit | (902,055) | (935,170) | (1,329,042) |
Non-controlling interest | (488,759) | (424,081) | (373,365) |
Accumulated other comprehensive income (VIE) | 125,424 | 106,703 | 50,693 |
Total VIE's deficit | (363,335) | (317,378) | (322,672) |
TOTAL STOCKHOLDER'S DEFICIT | (1,265,390) | (1,252,548) | (1,651,714) |
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT | $ 11,901,333 | $ 18,244,859 | $ 15,772,612 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - John Keeler & Co., Inc. [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par value | $ 1 | $ 1 | $ 1 |
Common stock, shares authorized | 500 | 500 | 500 |
Common stock, shares issued | 500 | 500 | 500 |
Common stock, shares outstanding | 500 | 500 | 500 |
Accounts Payable [Member] | |||
Current liabilities of VIE | $ 26,116 | $ 318,073 | $ 40,329 |
Other Current Assets [Member] | |||
Current assets attributable to VIE | 6,896 | 3,656 | 2,247 |
Inventories [Member] | |||
Current assets attributable to VIE | 66,916 | 257,798 | 89,127 |
Accounts Receivable [Member] | |||
Current assets attributable to VIE | 103,480 | 138,333 | 53,750 |
Cash [Member] | |||
Current assets attributable to VIE | $ 4,670 | $ 22,571 | $ 41,889 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - John Keeler & Co., Inc. [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
REVENUE, NET | $ 24,138,548 | $ 28,326,233 | $ 36,951,923 | $ 37,523,380 |
COST OF REVENUE (including approximately $17,230,000 and $5,850,000 $7,406,000 and $9,413,000 respectively, purchased from related party) | 20,552,952 | 23,654,699 | 31,254,430 | 32,689,580 |
GROSS PROFIT | 3,585,596 | 4,671,534 | 5,697,493 | 4,833,800 |
COMMISSIONS | 105,626 | 118,285 | 155,574 | 227,272 |
SALARIES & WAGES | 1,350,063 | 1,454,496 | 1,859,706 | 1,885,957 |
OTHER OPERATING EXPENSES | 1,767,861 | 1,728,156 | 2,340,163 | 2,311,132 |
INCOME (LOSS) FROM OPERATIONS | 362,046 | 1,370,597 | 1,342,050 | 409,439 |
OTHER INCOME | 391,533 | |||
OTHER EXPENSE | (29,478) | (29,478) | (368,989) | |
INTEREST EXPENSE | (785,142) | (724,117) | (969,416) | (914,355) |
NET INCOME (LOSS) | (31,563) | 617,002 | 343,156 | (873,905) |
LESS: NET INCOME ( LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (64,678) | (7,042) | (50,716) | 18,156 |
NET INCOME (LOSS) LOSS ATTRIBUTABLE TO JOHN KEELER & CO. | 33,115 | 624,044 | 393,872 | (892,061) |
COMPREHENSIVE INCOME (LOSS): | ||||
TRANSLATION ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 18,721 | 21,130 | 56,010 | (11,868) |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (45,957) | 14,088 | 5,294 | 6,288 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JOHN KEELER & CO. | 33,115 | 624,044 | 393,872 | (892,061) |
PRO FORMA DATA: | ||||
PRO FORMA INCOME TAX EXPENSE | (81,198) | 245,836 | 270,635 | (309,096) |
PRO FORMA NET (LOSS) INCOME ATTRIBUTABLE TO JOHN KEELER & CO. | 114,313 | 378,208 | 123,237 | (582,965) |
PRO FORMA COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO JOHN KEELER & CO. | $ 114,313 | $ 378,208 | $ 123,237 | $ (582,965) |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
John Keeler & Co., Inc. [Member] | ||||
Purchased from related party | $ 7,406,000 | $ 9,413,000 | $ 17,230,000 | $ 5,850,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholder's Equity (Deficit) - John Keeler & Co., Inc. [Member] - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total John Keeler & Co. Stockholder's Deficit [Member] | Non-Controlling Interest [Member] | Stockholders Equity [Member] |
Balance at Dec. 31, 2015 | $ 500 | $ 559,257 | $ (996,738) | $ (436,981) | $ (328,960) | $ (765,941) |
Balance, shares at Dec. 31, 2015 | 500 | |||||
Net loss income | (892,061) | (892,061) | 18,156 | (873,905) | ||
Comprehensive income loss | (11,868) | (11,868) | ||||
Balance at Dec. 31, 2016 | $ 500 | 559,257 | (1,888,799) | (1,329,042) | (322,672) | (1,651,714) |
Balance, shares at Dec. 31, 2016 | 500 | |||||
Net loss income | 393,872 | 393,872 | (50,716) | 343,156 | ||
Comprehensive income loss | 56,010 | 56,010 | ||||
Balance at Dec. 31, 2017 | $ 500 | $ 559,257 | $ (1,494,927) | $ (935,170) | $ (317,378) | $ (1,252,548) |
Balance, shares at Dec. 31, 2017 | 500 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - John Keeler & Co., Inc. [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net Income (Loss) | $ (31,563) | $ 617,002 | $ 343,156 | $ (873,905) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation of fixed assets | 46,654 | 46,934 | 62,400 | 62,353 |
Amortization of intangible assets | 6,491 | 6,491 | 6,491 | 6,492 |
Amortization of loan costs | 100,391 | 144,074 | 164,457 | 118,405 |
Allowance for inventory obsolescence | (88,584) | (103,657) | ||
Changes in operating assets and liabilities: | ||||
Receivables | 1,275,038 | (201,537) | (257,934) | 527,719 |
Inventories | 6,085,933 | 128,893 | (3,429,637) | 3,595,789 |
Advances to affiliated supplier | (1,079,583) | 777,732 | 981,972 | (107,909) |
Other current assets | (42,935) | 19,600 | 70,370 | (42,767) |
Other assets | (6,491) | (18,463) | (23,071) | (699) |
Accounts payable and accruals | (1,657,629) | (2,490,094) | (905,564) | 937,987 |
Net cash provided by (used) in operating activities | 4,696,306 | (969,368) | (3,075,944) | 4,119,808 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Purchases of fixed assets | (6,371) | (25,861) | (33,491) | (17,554) |
Net cash used in investing activities | (6,371) | (25,861) | (33,491) | (17,554) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Proceeds from working capital lines of credit | 352,822 | 39,080,437 | 41,968,961 | |
Repayments of working capital lines of credit | (4,646,997) | (36,568,702) | (45,499,318) | |
Proceeds from stockholder notes payable - Subordinated | 500,000 | 500,000 | ||
Principal payments of long-term debt | (26,058) | (24,642) | (33,090) | (31,272) |
Payments of Loan costs | (28,000) | (53,000) | (115,000) | (308,943) |
Changes in restrictive cash | (29,005) | 147,830 | 164,176 | (193,674) |
Net cash provided by (used) in financing activities | (4,730,060) | 923,010 | 3,027,821 | (4,064,246) |
Effect of exchange rate changes on cash | 18,721 | 21,130 | 56,010 | (11,868) |
NET INCREASE (DECREASE) IN CASH | (21,404) | (51,089) | (25,604) | 26,140 |
CASH, BEGINNING OF PERIOD | 29,377 | 54,981 | 54,981 | 28,841 |
CASH - END OF PERIOD | 7,973 | 3,892 | 29,377 | 54,981 |
Supplemental Disclosure of Cash Flow Information | ||||
Cash paid for interest | $ 776,311 | $ 724,282 | $ 969,483 | $ 914,355 |
Company Overview
Company Overview | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Company Overview | Note 1. Company Overview Located in Miami, Florida, John Keeler & Co., Inc. (the “Company”) d/b/a Blue Star Foods has been in business for approximately twenty-one years. The Company was formed under the laws of the State of Florida. The primary focus of the Company and current source of revenue is importing blue and red swimming crab meat primarily from Indonesia, Philippines and China and distributing it in the United States of America, Canada and Europe under several brand names such as Blue Star, Seassentials, Oceanica, Pacifika and Harbor Banks. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
John Keeler & Co., Inc. [Member] | |
Basis of Presentation | Note 1. Basis of Presentation The following unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, such interim financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States for complete annual financial statements. The information furnished reflects all adjustments, consisting only of normal recurring items which are, in the opinion of management, necessary in order to make the financial statements not misleading. The balance sheet as of December 31, 2017 has been derived from the Company’s annual financial statements that were audited by an independent registered public accounting firm but does not include all of the information and footnotes required for complete annual financial statements. The consolidated financial statements included in this report on Form 8-K should be read in conjunction with the consolidated financial statements for the fiscal year ended December 31, 2017, also included in this report. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | ||
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its variable interest entity for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Advances to Suppliers and Related Party In the normal course of business, the Company may advance payments to its suppliers, inclusive of Bacolod, a related party. These advances are in the form of prepayments for products that will ship within a short window of time. In the event that it becomes necessary for the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the normal course of business and these credits are also reflected against future shipments. As of September 30, 2018 and December 31, 2017, the balance due from the related party for future shipments was approximately $1,079,600 and $0, respectively. The 2018 balances represent approximately two months of purchases from the supplier. Revenue Recognition 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 category, 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 as 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 The Company, with the consent of its stockholder, has elected to be taxed under the S Corporation provisions of the Internal Revenue Code. Under these provisions, taxable income or loss of the Company is reflected on the stockholder’s individual income tax return. For the nine months ended September 30, 2018 and 2017, a pro forma income tax provision has been disclosed as if the Company was a C corporation and thus was subject to U.S. federal and state income taxes. The Company computed pro forma tax expense using an effective rate of 23.242% and 39.22% as of September 30, 2018 and 2017, respectively. The pro-forma provision for income taxes excludes information related to the Company’s VIE. | Note 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its variable interest entity for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Variable Interest Entity Under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810, Consolidation The Company evaluates its interests in VIE’s on an ongoing basis and consolidates any VIE in which it has a controlling financial interest and is deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact its economic performance; and (ii) the obligation to absorb losses of the VIE that could potentially be significant to it or the right to receive benefits from the VIE that could be significant to the VIE. Effective April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike the Gold Foods, Ltd. (“Strike”), a related party entity which holds the Company’s inventory on consignment in United Kingdom (see Note 3). The Company evaluated its interest in Strike and determined that Strike is a VIE due to the Company’s implicit interest in Strike and the fact that Strike and the Company were under common control after the transfer of the controlling interest. Moreover, the Company determined that it is the primary beneficiary of Strike due to the fact that the Company had both the power to direct the activities that most significantly impact Strike and the obligation to absorb losses or the right to receive benefits from Strike. Therefore, the Company consolidated Strike in its financial statements. Strike’s activities are reflected in the Company’s financial statements starting on April 1, 2014, the effective date of the controlling interest transfer. Strike’s equity is classified as non-controlling interest in the Company’s financial statements since the Company is not a shareholder of Strike. Strike was not a VIE of the Company and the Company was not the primary beneficiary of Strike prior to the controlling interest transfer. The Company also evaluated its interest in three related party entities that are under common control with the Company, Bacolod Blue Star Export Corp. (“Bacolod”), Bicol Blue Star Export Co. (“Bicol”) and John Keeler Real Estate Holding (“JK Real Estate”), in light of ASC 810. The Company purchased inventory from Bacolod, an exporter of pasteurized crab meat out of the Philippines. The Company purchased inventory, via Bacolod, from Bicol. The Company leases its office and warehouse facility from JK Real Estate, a landlord that is a related party through common family beneficial ownership (see Note 7). The Company determined that Bacolod and Bicol are not VIE’s as they do not meet the criteria to be considered a VIE per ASC 810. The Company does not directly or indirectly absorb any variability of Bacolod or Bicol. The relationship between the Company and Bacolod and Bicol is strictly a supplier/customer relationship (see Advances to Suppliers and Related Party The Company determined that JK Real Estate is a VIE due the fact that the Company guarantees the mortgage on the facility rented from JK Real Estate. Therefore, JK Real Estate’s equity at risk is not deemed sufficient to permit JK Real Estate to finance its activities without subordinated financial support. Moreover, the activities of JK Real Estate are substantially conducted on behalf of the Company’s stockholder. The Company concluded that it not the primary beneficiary of JK Real Estate since the Company does not have the power to direct the activities that most significantly impact JK Real Estate. Therefore, JK Real Estate is not consolidated with the Company’s financial statements. Cash, Restricted Cash and Cash Equivalents The Company maintains cash balances with financial institutions in excess of Federal Deposit Insurance Company (“FDIC”) insured limits. The Company has not experienced any losses on such accounts and believes it does not have a significant exposure. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company considers any cash balance in the lender designated cash collateral account as restricted cash. All cash proceeds must be deposited into cash collateral account, and will be cleared and applied to the line of credit. The Company has no access to this account, and the purpose of the funds is restricted to repayment of the line of credit. As of December 31, 2017 and 2016 restricted cash was approximately $29,500 and $194,000. Accounts Receivable Accounts receivable consist of unsecured obligations due from customers under normal trade terms, usually net 30 days. The Company grants credit to its customers based on the Company’s evaluation of a particular customer’s credit worthiness. Allowances for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of the Company’s periodic credit evaluations of its customers’ financial condition. Receivables are written off as uncollectible and deducted from the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful. Subsequent recoveries are netted against the provision for doubtful accounts expense. The Company generally does not charge interest on receivables. Receivables are net of estimated allowances for doubtful accounts and sales return and allowances. They are stated at estimated net realizable value. As of December 31, 2017 and 2016, the Company recorded sales return and allowances of approximately $155,000 and $134,000, respectively. There was no allowance for bad debt recorded during the years ended December 31, 2017 and 2016. Inventories Substantially all of the Company’s inventory consists of packaged crab meat located at the Company’s warehouse facility as well as public cold storage facilities and merchandise in transit from suppliers. The cost of inventory is primarily determined using the specific identification method. Inventory is valued at the lower of cost or market, using the first-in, first-out method. Merchandise is 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 $6,148,000 and $5,363,000 as of December 31, 2017 and December 31, 2016, respectively. The Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to the lower of cost or market based on its assessment of market conditions, inventory turnover and current stock levels. Inventory write-downs are charged to cost of goods sold. The Company recorded an inventory allowance of approximately $39,300 and $48,500 for the years ended December 31, 2017 and December 31, 2016, respectively. Advances to Suppliers and Related Party In the normal course of business, the Company may advance payments to its suppliers, inclusive of Bacolod, a related party. These advances are in the form of prepayments for products that will ship within a short window of time. In the event that it becomes necessary for the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the normal course of business and these credits are also reflected against future shipments. As of December 31, 2017 and 2016, the balance due from the related party for future shipments was approximately $0 and $982,000, respectively. The 2016 balances represent approximately two to three months of purchases from the supplier. Fixed Assets Fixed assets are stated at cost less accumulated depreciation and are being depreciated using the straight-line method over the estimated useful life of the asset as follows: Furniture and fixtures 7 to 10 years Computer equipment 5 years Warehouse and refrigeration equipment 10 years Leasehold improvements 7 years Automobile 5 years Trade show booth 7 years Leasehold improvements are amortized using the straight-line method over the shorter of the expected life of the improvement or the remaining lease term. The Company capitalizes expenditures for major improvements and additions and expenses those items which do not improve or extend the useful life of the fixed assets. The Company reviews fixed assets for recoverability if events or changes in circumstances indicate the assets may be impaired. At December 31, 2017 and 2016, the Company believes the carrying values of its long-lived assets are recoverable and as such, the Company did not record any impairment. Other Comprehensive (loss) Income The Company reports its comprehensive (loss) income in accordance with ASC 220, Comprehensive Income Foreign Currency Translation The Company’s functional and reporting currency is the U.S. Dollars. The assets and liabilities held by the Company’s VIE have a functional currency other than the U.S. Dollar. They are translated into U.S. Dollars at exchange rates in effect at the end of each reporting period. The VIE’s revenue and expenses are translated into U.S. Dollars at the average rates that prevailed during the period. The resulting net translation gains and losses are reported as foreign currency translation adjustments in stockholders’ equity as a component of comprehensive (loss) income. The Company recorded foreign currency translation adjustment of approximately $56,000 and $(12,000) for the years ended December 31, 2017 and December 31, 2016, respectively. Revenue Recognition The Company recognizes revenue when the products are shipped, the risks of ownership transfer to the customer and collectability is reasonably assured. Revenue is stated net of sales returns and allowances. Provision for sales return is estimated based on the Company’s historical return experience. 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, in accordance with ASC 605, Revenue Recognition 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. Advertising The Company expenses the costs of advertising as incurred. Advertising expenses which are included in Other Operating Expenses were approximately $108,000 and $82,500, for the years ended December 31, 2017 and 2016, respectively. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Customer Concentration The Company had three customers which accounted for approximately 63% and 60%, of revenue during the years ended December 31, 2017 and 2016, respectively. Outstanding receivables from these customers accounted for approximately 66% and 63% of the total accounts receivable as of December 31, 2017 and 2016, respectively. The loss of any major customer could have a material adverse impact on the Company’s results of operations, cash flows and financial position. Supplier Concentration The Company had three suppliers which accounted for approximately 75% of the Company’s total purchases during the year ended December 31, 2017. These three suppliers are located in three countries, Indonesia, Philippines, China, which accounted for approximately 93% of the Company’s total purchases during the year ended December 31, 2017. The Company had four suppliers which accounted for approximately 70% of the Company’s total purchases during the year ended December 31, 2016. These four suppliers are located in four countries, Indonesia, Philippines, China and USA, which accounted for approximately 82% of the Company’s total purchases during the year ended December 31, 2016. These suppliers included Bacolod, a related party, which accounted for approximately 53% and 22% of the Company’s total purchases, during the years ended December 31, 2017 and 2016, respectively. The loss of any major supplier could have a material adverse impact on the Company’s results of operations, cash flows and financial position. Fair Value of Financial Instruments Our financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and debt obligations. We believe the carrying values of our financial instruments approximate their fair values because they are short term in nature or payable on demand. Reclassifications Certain amounts in prior year have been reclassified to conform to the current year presentation. Income Taxes The Company, with the consent of its stockholder, has elected to be taxed under the S Corporation provisions of the Internal Revenue Code. Under these provisions, taxable income or loss of the Company is reflected on the stockholder’s individual income tax return. The Company assesses its tax positions in accordance with ASC 740, Income Taxes Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties related to uncertain tax positions, if any, are classified as a component of income tax expense. The Company believes that it does not have any significant uncertain tax positions requiring recognition or measurement in the accompanying financial statements. For the years ended December 31, 2016 and 2017, a pro forma income tax provision has been disclosed as if the Company was a C corporation and thus was subject to U.S. federal and state income taxes. The Company computed pro forma tax expense using an effective rate of 34.92% and 68.09% as of December 31, 2016 and 2017, respectively. The pro-forma provision for income taxes excludes information related to the Company’s VIE. Recently Issued 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 category, 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 as 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 |
Consolidation of Variable Inter
Consolidation of Variable Interest Entities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | ||
Consolidation of Variable Interest Entities | Note 3. Consolidation of Variable Interest Entities Effective April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike (see Note 2). The Company concluded that Strike is a VIE and the Company is the primary beneficiary of Strike, in accordance with ASC 810, Consolidation The information below represents the assets, liabilities and non-controlling interest related to Strike as of September 30, 2018 and December 31, 2017. September 30, 2018 Assets $ 181,962 Liabilities 26,116 Non-controlling interest (488,759 ) December 31, 2017 Assets $ 422,358 Liabilities 318,073 Non-controlling interest (424,081 ) | Note 3. Consolidation of Variable Interest Entities Effective April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike (see Note 2). The Company concluded that Strike is a VIE and the Company is the primary beneficiary of Strike, in accordance with ASC 810, Consolidation Company and the Company was not the primary beneficiary of Strike prior to the effective date of the controlling interest transfer of April 1, 2014. Strike’s equity is classified as non-controlling interest in the Company’s financial statements since the Company is not a shareholder of Strike. The information below represents the assets, liabilities and non-controlling interest related to Strike as of December 31, 2017 and December 31, 2016. December 31, 2017 Assets $ 422,358 Liabilities 318,073 Non-controlling interest (424,081 ) December 31, 2016 Assets $ 187,013 Liabilities 40,329 Non-controlling interest (373,365 ) |
Accounts Payable
Accounts Payable | 9 Months Ended |
Sep. 30, 2018 | |
John Keeler & Co., Inc. [Member] | |
Accounts Payable | Note 4. Accounts Payable On September 20, 2018, the company entered into a settlement and mutual release agreement with a Longhai Desheng Canned Food Stuffs, ltd, a supplier that the company was engaged in a commercial dispute. The settlement resulted in a reduction of the outstanding accounts payable to that supplier of $388,199.34 to a balance due of $1,465,000. |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Fixed Assets | Note 4. Fixed Assets Fixed assets comprised the following at December 31: 2017 2016 Computer equipment $ 22,924 $ 18,303 Warehouse and refrigeration equipment 135,607 106,737 Leasehold improvements 26,600 26,600 Automobile 174,621 174,621 Total 359,752 326,261 Less: Accumulated depreciation and amortization (213,256 ) (150,856 ) Fixed assets, net $ 146,496 $ 175,405 For the years ended December 31, 2017 and 2016, depreciation and amortization expense of fixed assets totaled approximately $62,400 each year. |
Stockholder Notes Payable
Stockholder Notes Payable | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Stockholder Notes Payable | Note 5. Stockholder Notes Payable The Company had unsecured promissory notes outstanding to its stockholder of approximately $2,910,000 and $2,410,000 as of December 31, 2017 and 2016, respectively. These notes are payable on demand and bear an annual interest rate of 6%. These notes are subordinated to AFS Finco I LP (“Ares”) as a stipulation to the working capital line of credit. Principle payments are not allowed under this subordination agreement that was effective August 31, 2016. No Principal payments were made by the Company during 2017 or 2016. The Stockholder loaned an additional $500,000 in subordinated funds to the Company during the year ended December 31, 2017. Interest expense for the stockholder notes totaled approximately $162,300 and $115,000 for the years ending December 31, 2017 and 2016, respectively. For the year ending December 31, 2016 there was approximately $30,000 in interest payments waived by the stockholder. |
Debt
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | ||
Debt | Note 5. Debt Working Capital Line of Credit The Company entered into a $14,000,000 revolving line of credit with Ares on August 31, 2016, the proceeds of which were used to pay off the prior line of credit, pay new loan costs of approximately $309,000, and provide additional working capital to the company. This facility was amended on November 18, 2016, June 19, 2017, October 16, 2017 and September 19, 2018. In the fourth amendment the term of this facility was extended to a term of 5 years from the effective date and is subject to early termination by the lender upon defined events of default. The Company continues to be obligated to meet certain financial covenants. The line of credit bears an interest rate equal to the greater of 3 Month LIBOR rate plus 6.25%, the Prime rate plus 3.0% or a fixed rate of 6.5%. The Ares line of credit agreement is subject to the following terms: ● Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. ● The line is collateralized by substantially all the assets and property of the Company and is personally guaranteed by the stockholder of the Company. ● The Company is restricted to specified distribution payments, use of funds, and is required to comply with certain other covenants including certain financial ratios. ● All cash received by the Company is applied against the outstanding loan balance. ● A subjective acceleration clause allows Ares to call the note upon a material adverse change. During the first nine months ended September 30, 2018, the Company failed to meet certain financial covenants. The bank elected not to charge the default rate of interest related to this covenant breach. On September 19, 2018, the Company signed a fourth amendment to the loan and security agreement with the lender. This Amendment waived the current default and increased the term of the agreement to August 30, 2020. As of September 30, 2018, the line of credit bears interest rate of 8.571%. As of September 30, 2018 and December 31, 2017, the line of credit had an outstanding balance of approximately $7,462,000 and $12,100,000, respectively. Interest expense for third party debt totaled approximately $645,400 and $807,000 for the nine months ending September 30, 2018 and the year ended December 31, 2017, respectively. | Note 6. Debt Working Capital Line of Credit The Company entered into a $10,000,000 revolving line of credit with AloStar in July 2013. This facility was amended in March 2014 to increase the line of credit to $13,500,000, and subsequently amended in January 2015 to increase the line of credit to $20,000,000. The January 2015 amendment also extended the term of the facility through December 31, 2017. This line of credit is subject to early termination by the lender upon defined event of default. The Company continues to be obligated to meet certain financial covenants. The Company analyzed the Line of Credit modification under ASC 470-50-40-21 and determined that the modification did not trigger any additional accounting due to the line increase. The line of credit bears an interest rate equal to the Daily LIBOR rate plus 4.50% or a Base Rate (Prime) plus 1.75%, with a floor interest rate of 5.50%. During the year ended December 31, 2015, the Company failed to meet certain financial covenants. As a result of the covenant breach, the company entered into a forbearance agreement dated November 5, 2015 and expired January 31, 2016. This forbearance agreement reduced the amount of the line to $17,000,000 and required the company to adhere to additional reporting requirements, increased the minimum interest rate to 6.50%, and changed the lending formulas and requirements on several pieces of collateral. The Company analyzed the Line of Credit modification under ASC 470-50-40-21 and determined that the modification did not trigger any additional accounting due to the line reduction. Additionally, it required the shareholder pledge 65% of his stock in Bacolod Blue Star Export Co. as additional collateral to the facility. This line was paid in full, inclusive of approximately $120,000 in prepayment penalties and legal fees on August 31, 2016. The Company entered into a $14,000,000 revolving line of credit with Ares on August 31, 2016, the proceeds of which were used to pay off the prior line of credit, pay new loan of approximately $309,000, and provide additional working capital to the company. This facility was amended on November 18, 2016, June 19, 2017 and October 16, 2017. In the second amendment the term of this facility was extended to a term of 4 years from the effective date and is subject to early termination by the lender upon defined events of default. The Company continues to be obligated to meet certain financial covenants. The line of credit bears an interest rate equal to the greater of 3 Month LIBOR rate plus 6.25%, the Prime rate plus 3.0% or a fixed rate of 6.5%. The Ares line of credit agreement is subject to the following terms: ● Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. ● The line is collateralized by substantially all the assets and property of the Company and is personally guaranteed by the stockholder of the Company. ● The Company is restricted to specified distribution payments, use of funds, and is required to comply with certain other covenants including certain financial ratios. ● All cash received by the Company is applied against the outstanding loan balance. ● A subjective acceleration clause allows Ares to call the note upon a material adverse change. During the year ended December 31, 2016, the Company failed to meet certain financial covenants. As a result of the covenant breach, the company is being charged the default rate of interest of an additional 3.0%. The company cured the default effective May 31, 2017 and the bank issued the second amendment to the loan and security agreement dated June 19, 2017 waiving the defaults of the financial covenants. The Company is in compliance with all bank covenants as of December 31, 2017. As of December 31, 2017, the line of credit bears interest rate of 6.7%. As of December 31, 2017 and 2016, the line of credit had an outstanding balance of approximately $12,100,000 and $9,600,000, respectively. The Company amortizes loan costs on a straight-line basis, which approximates the interest method, over the term of the credit facility. The Company had loan costs associated with the working capital lines of credit of approximately $195,000 and $244,000, net of approximately $229,000 and $64,500 of accumulated amortization as of December 31, 2017 and 2016, respectively. The Company recorded amortization expense of approximately $164,000 and $118,000 during the years ended December 31, 2017 and 2016, respectively. Long-Term Debt As of December 31, 2017 and 2016, long-term debt consisted of a note payable outstanding with Mercedes-Benz Financial Services (“MB Financial”). The Company entered into a loan agreement with MB Financial on November 30, 2014 to finance the purchase of an automobile. The loan bears interest at 5.56% per annum and requires monthly installment of approximately $3,000, inclusive of interest. The loan matures on November 30, 2019. As of December 31, 2017 and 2016, this loan had an outstanding balance of approximately $69,000 and $102,000, respectively. At December 31, 2017, scheduled principal payments related to long-term debt are as follows: 2018 35,000 2019 34,000 Total $ 69,000 Interest expense for third party debt totaled approximately $807,000 and $800,000 for the years ended December 31, 2017 and 2016, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
John Keeler & Co., Inc. [Member] | |
Stock-Based Compensation | Note 6. Stock-Based Compensation On March 31, 2018 the company issued options totaling 104 shares to an employee of the company. This Option grant was approved by the shareholder at the time of the grant. We accounted for the Stock options using a Black-Sholes valuation model utilizing an expected term of 5 years, a volatility factor of 51.76% and a compounded risk free interest rate of 2.84%. The Exercise price of the option was equal to the fair market value of the company’s common stock at the date of the grant and have a 10 year term. These options were accounted for as fully vested and will become fully vested as of the close of the merger between John Keeler & Co., Inc. and Blue Star Foods Corp (formerly A.G. Acquisition Group II, Inc.) The probability for vesting of this option was analyzed as of September 30, 2018 based upon certain milestones that are necessary for the vesting. It was determined that as of September 30, 2018 that the probability that these options will vest was 47.5%, therefore, no option expense was recognized for the period. Stock Options Options Average Price Average Life (in Years) Aggregate Intrinsic Value Outstanding as of December 31, 2017 - $ - Granted 104 10,000.00 Exercised - Forfeited/Expired - Outstanding as of September 30, 2018 104 $ 10,000.00 9.50 $ - Exercisable at September 30, 2018 - - $ - Stock Based Compensation for the grant of these options is approximately $496,293. This expense will be recognized when the probability of the vesting condition is certain. The vesting condition was met on November 8, 2018 via the execution of an Agreement and Plan of Merger and Reorganization with Blue Star Foods Corp. (Formerly A.G. Acquisition Group II, Inc. and Blue Star Acquisition Corp. |
Commitment
Commitment | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Commitment | Note 7. Commitment The Company leases its office and warehouse facility from JK Real Estate, a related party through common family beneficial ownership (see Note 2). The lease has a 20 year term, expiring in July 2021. The Company is a guarantor of the mortgage on the facility which had a balance of approximately $1,346,000 at December 31, 2017; the Company’s maximum exposure. The Company deems that rental income on this lease is sufficient to cover the loan payments under this mortgage. Therefore, the Company did not record any liability related to the mortgage in the consolidated financial statements as the Company does not believe it will be called upon to perform under this guarantee, in accordance with ASC 460, Guarantees At December 31, 2017, future minimum lease payments under operating lease agreements are as follows: 2018 203,000 2019 203,000 2020 203,000 2021 102,000 $ 711,000 Rental and equipment lease expenses amounted to approximately $211,000 and $227,400 for the years ended December 31, 2017 and 2016, respectively. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Employee Benefit Plan | Note 8. Employee Benefit Plan The Company provides and sponsors a 401(k) plan for its employees. For the years ended December 31, 2017 and 2016, no contributions were made to the plan by the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | ||
Subsequent Events | Note 7 Subsequent Events As of November 8, 2018 the company changed its tax status from an S corporation to a C Corporation under the provisions of the Internal Revenue Code. On November 8, 2018 the sole shareholder of the company executed an Agreement and Plan of Merger and Reorganization with Blue Star Foods Corp. (Formerly A.G. Acquisition Group II, Inc. and Blue Star Acquisition Corp. John R. Keeler will exchange his 500 shares with a par value of $1.00 in John Keeler & Co., Inc. for the 15,000,000 shares with a par value of $.0001 of the then outstanding 16,015,000 outstanding shares. The balance of the outstanding shares will be held by the prior owners of Blue Star Foods Corp. and various service providers. Additionally, there were 725 Series A Preferred shares and 181,250 warrants issued to private placement investors, 688 Series A Preferred shares and 172,000 warrants issued for settlement with prior investors, and 3,120,000 options to purchase preferred stock issued to Christopher Constable upon the close of the merger. The Merger will be accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, the holders of John Keeler & Co., Inc.’s stock will have effective control of Blue Star Foods Corp. In addition, John Keeler & Co., Inc. will have control of the combined entity through control of the Board by designating all four of the board seats. Additionally, all of John Keeler & Co., Inc.’s officers and senior executive positions will continue on as management of the combined entity after consummation of the Merger. For accounting purposes, John Keeler & Co., Inc. will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of Blue Star Foods Corp. Accordingly, John Keeler & Co., Inc.’s assets, liabilities and results of operations will become the historical financial statements of the registrant, and the Company’s assets, liabilities and results of operations will be consolidated with Blue Star Foods Corp effective as of the date of the closing of the Merger. No step-up in basis or intangible assets or goodwill will be recorded in this transaction. On November 8, 2018, Inc. the company entered into the fifth amendment to the loan and security agreement with Ares Financial. This amendment memorialized the change in ownership of John Keeler & Co., Inc as a wholly owned subsidiary of Blue Star Foods Corp. as well as the change of John Keeler from CEO to Executive Chairman, and the appointment of Carlos Faria as the CEO of John Keeler & Co., Inc. | Note 9. Subsequent Events On March 31, 2018 the company granted options to Carlos Faria. The option grant consisted of an option to purchase 104 shares of stock, and is for a 10 year term. These options were accounted for as fully vested and will become fully vested as of the close of the merger between John Keeler & Co., Inc. and Blue Star Foods Corp (formerly A.G. Acquisition Group II, Inc.) The probability for vesting of this option was analyzed as of June 30, 2018 and September 30, 2018 based upon certain milestones that are necessary for the vesting. It was determined that as of June 30, 2018 and September 30, 2018 that the probability that these options will vest was 40% and 47.5% respectively, therefore, no option expense was recognized for either period. However, On November 8, 2018 the sole shareholder of the company executed an Agreement and Plan of Merger and Reorganization with Blue Star Foods Corp. Upon the execution of this agreement, the options to Mr. Faria were fully vested. On September 19, 2018, the company signed a fourth amendment to the loan and security agreement with Ares Financial. This Amendment waived the current default, and increased the term of the agreement to August 30, 2020. On September 20, 2018, the company entered into a settlement and mutual release agreement with a supplier that the company was engaged in a commercial dispute. The settlement resulted in a reduction of the outstanding accounts payable to that supplier of $388,199.34 to a balance due of $1,465,000. As of November 8, 2018 the company changed its tax status from an S corporation to a C Corporation under the provisions of the Internal Revenue Code. On November 8, 2018 the sole shareholder of the company executed an Agreement and Plan of Merger and Reorganization with Blue Star Foods Corp. (Formerly A.G. Acquisition Group II, Inc.) and Blue Star Acquisition Corp. John R. Keeler will exchange his 500 shares with a par value of $1.00 in John Keeler & Co., Inc. for the 15,000,000 shares with a par value of $.0001 of the then outstanding 16,015,000 outstanding shares. The balance of the outstanding shares will be held by the prior owners of Blue Star Foods Corp. and various service providers. Additionally, there were 725 Series A Preferred shares and 181,250 warrants issued to private placement investors, 688 Series A Preferred shares and 172,000 warrants issued for settlement with prior investors, and 3,120,000 options to purchase preferred stock issued to Christopher Constable upon the close of the merger. The Merger will be accounted for as a “reverse merger” and recapitalization since, immediately following the completion of the transaction, the holders of John Keeler & Co., Inc.’s stock will have effective control of Blue Star Foods Corp. In addition, John Keeler & Co., Inc. will have control of the combined entity through control of the Board by designating all four of the board seats. Additionally, all of John Keeler & Co., Inc.’s officers and senior executive positions will continue on as management of the combined entity after consummation of the Merger. For accounting purposes, John Keeler & Co., Inc. will be deemed to be the accounting acquirer in the transaction and, consequently, the transaction will be treated as a recapitalization of Blue Star Foods Corp. Accordingly, John Keeler & Co., Inc.’s assets, liabilities and results of operations will become the historical financial statements of the registrant, and the Company’s assets, liabilities and results of operations will be consolidated with Blue Star Foods Corp effective as of the date of the closing of the Merger. No step-up in basis or intangible assets or goodwill will be recorded in this transaction. On November 8, 2018, Inc. the company entered into the fifth amendment to the loan and security agreement with Ares Financial. This amendment memorialized the change in ownership of John Keeler & Co., Inc as a wholly owned subsidiary of Blue Star Foods Corp. as well as the change of John Keeler from CEO to Executive Chairman, and the appointment of Carlos Faria as the CEO of John Keeler& Co., Inc. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) - John Keeler & Co., Inc. [Member] | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its variable interest entity for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its variable interest entity for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. |
Variable Interest Entity | Variable Interest Entity Under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810, Consolidation The Company evaluates its interests in VIE’s on an ongoing basis and consolidates any VIE in which it has a controlling financial interest and is deemed to be the primary beneficiary. A controlling financial interest has both of the following characteristics: (i) the power to direct the activities of the VIE that most significantly impact its economic performance; and (ii) the obligation to absorb losses of the VIE that could potentially be significant to it or the right to receive benefits from the VIE that could be significant to the VIE. Effective April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike the Gold Foods, Ltd. (“Strike”), a related party entity which holds the Company’s inventory on consignment in United Kingdom (see Note 3). The Company evaluated its interest in Strike and determined that Strike is a VIE due to the Company’s implicit interest in Strike and the fact that Strike and the Company were under common control after the transfer of the controlling interest. Moreover, the Company determined that it is the primary beneficiary of Strike due to the fact that the Company had both the power to direct the activities that most significantly impact Strike and the obligation to absorb losses or the right to receive benefits from Strike. Therefore, the Company consolidated Strike in its financial statements. Strike’s activities are reflected in the Company’s financial statements starting on April 1, 2014, the effective date of the controlling interest transfer. Strike’s equity is classified as non-controlling interest in the Company’s financial statements since the Company is not a shareholder of Strike. Strike was not a VIE of the Company and the Company was not the primary beneficiary of Strike prior to the controlling interest transfer. The Company also evaluated its interest in three related party entities that are under common control with the Company, Bacolod Blue Star Export Corp. (“Bacolod”), Bicol Blue Star Export Co. (“Bicol”) and John Keeler Real Estate Holding (“JK Real Estate”), in light of ASC 810. The Company purchased inventory from Bacolod, an exporter of pasteurized crab meat out of the Philippines. The Company purchased inventory, via Bacolod, from Bicol. The Company leases its office and warehouse facility from JK Real Estate, a landlord that is a related party through common family beneficial ownership (see Note 7). The Company determined that Bacolod and Bicol are not VIE’s as they do not meet the criteria to be considered a VIE per ASC 810. The Company does not directly or indirectly absorb any variability of Bacolod or Bicol. The relationship between the Company and Bacolod and Bicol is strictly a supplier/customer relationship (see Advances to Suppliers and Related Party The Company determined that JK Real Estate is a VIE due the fact that the Company guarantees the mortgage on the facility rented from JK Real Estate. Therefore, JK Real Estate’s equity at risk is not deemed sufficient to permit JK Real Estate to finance its activities without subordinated financial support. Moreover, the activities of JK Real Estate are substantially conducted on behalf of the Company’s stockholder. The Company concluded that it not the primary beneficiary of JK Real Estate since the Company does not have the power to direct the activities that most significantly impact JK Real Estate. Therefore, JK Real Estate is not consolidated with the Company’s financial statements. | |
Cash, Restricted Cash and Cash Equivalents | Cash, Restricted Cash and Cash Equivalents The Company maintains cash balances with financial institutions in excess of Federal Deposit Insurance Company (“FDIC”) insured limits. The Company has not experienced any losses on such accounts and believes it does not have a significant exposure. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company considers any cash balance in the lender designated cash collateral account as restricted cash. All cash proceeds must be deposited into cash collateral account, and will be cleared and applied to the line of credit. The Company has no access to this account, and the purpose of the funds is restricted to repayment of the line of credit. As of December 31, 2017 and 2016 restricted cash was approximately $29,500 and $194,000. | |
Accounts Receivable | Accounts Receivable Accounts receivable consist of unsecured obligations due from customers under normal trade terms, usually net 30 days. The Company grants credit to its customers based on the Company’s evaluation of a particular customer’s credit worthiness. Allowances for doubtful accounts are maintained for potential credit losses based on the age of the accounts receivable and the results of the Company’s periodic credit evaluations of its customers’ financial condition. Receivables are written off as uncollectible and deducted from the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful. Subsequent recoveries are netted against the provision for doubtful accounts expense. The Company generally does not charge interest on receivables. Receivables are net of estimated allowances for doubtful accounts and sales return and allowances. They are stated at estimated net realizable value. As of December 31, 2017 and 2016, the Company recorded sales return and allowances of approximately $155,000 and $134,000, respectively. There was no allowance for bad debt recorded during the years ended December 31, 2017 and 2016. | |
Inventories | Inventories Substantially all of the Company’s inventory consists of packaged crab meat located at the Company’s warehouse facility as well as public cold storage facilities and merchandise in transit from suppliers. The cost of inventory is primarily determined using the specific identification method. Inventory is valued at the lower of cost or market, using the first-in, first-out method. Merchandise is 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 $6,148,000 and $5,363,000 as of December 31, 2017 and December 31, 2016, respectively. The Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to the lower of cost or market based on its assessment of market conditions, inventory turnover and current stock levels. Inventory write-downs are charged to cost of goods sold. The Company recorded an inventory allowance of approximately $39,300 and $48,500 for the years ended December 31, 2017 and December 31, 2016, respectively. | |
Advances to Suppliers and Related Party | Advances to Suppliers and Related Party In the normal course of business, the Company may advance payments to its suppliers, inclusive of Bacolod, a related party. These advances are in the form of prepayments for products that will ship within a short window of time. In the event that it becomes necessary for the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the normal course of business and these credits are also reflected against future shipments. As of September 30, 2018 and December 31, 2017, the balance due from the related party for future shipments was approximately $1,079,600 and $0, respectively. The 2018 balances represent approximately two months of purchases from the supplier. | Advances to Suppliers and Related Party In the normal course of business, the Company may advance payments to its suppliers, inclusive of Bacolod, a related party. These advances are in the form of prepayments for products that will ship within a short window of time. In the event that it becomes necessary for the Company to return products or adjust for quality issues, the Company is issued a credit by the vendor in the normal course of business and these credits are also reflected against future shipments. As of December 31, 2017 and 2016, the balance due from the related party for future shipments was approximately $0 and $982,000, respectively. The 2016 balances represent approximately two to three months of purchases from the supplier. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost less accumulated depreciation and are being depreciated using the straight-line method over the estimated useful life of the asset as follows: Furniture and fixtures 7 to 10 years Computer equipment 5 years Warehouse and refrigeration equipment 10 years Leasehold improvements 7 years Automobile 5 years Trade show booth 7 years Leasehold improvements are amortized using the straight-line method over the shorter of the expected life of the improvement or the remaining lease term. The Company capitalizes expenditures for major improvements and additions and expenses those items which do not improve or extend the useful life of the fixed assets. The Company reviews fixed assets for recoverability if events or changes in circumstances indicate the assets may be impaired. At December 31, 2017 and 2016, the Company believes the carrying values of its long-lived assets are recoverable and as such, the Company did not record any impairment. | |
Other Comprehensive (loss) Income | Other Comprehensive (loss) Income The Company reports its comprehensive (loss) income in accordance with ASC 220, Comprehensive Income | |
Foreign Currency Translation | Foreign Currency Translation The Company’s functional and reporting currency is the U.S. Dollars. The assets and liabilities held by the Company’s VIE have a functional currency other than the U.S. Dollar. They are translated into U.S. Dollars at exchange rates in effect at the end of each reporting period. The VIE’s revenue and expenses are translated into U.S. Dollars at the average rates that prevailed during the period. The resulting net translation gains and losses are reported as foreign currency translation adjustments in stockholders’ equity as a component of comprehensive (loss) income. The Company recorded foreign currency translation adjustment of approximately $56,000 and $(12,000) for the years ended December 31, 2017 and December 31, 2016, respectively. | |
Revenue Recognition | Revenue Recognition 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 category, 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 as 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 | Revenue Recognition The Company recognizes revenue when the products are shipped, the risks of ownership transfer to the customer and collectability is reasonably assured. Revenue is stated net of sales returns and allowances. Provision for sales return is estimated based on the Company’s historical return experience. 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, in accordance with ASC 605, Revenue Recognition 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. |
Advertising | Advertising The Company expenses the costs of advertising as incurred. Advertising expenses which are included in Other Operating Expenses were approximately $108,000 and $82,500, for the years ended December 31, 2017 and 2016, respectively. | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | |
Customer Concentration | Customer Concentration The Company had three customers which accounted for approximately 63% and 60%, of revenue during the years ended December 31, 2017 and 2016, respectively. Outstanding receivables from these customers accounted for approximately 66% and 63% of the total accounts receivable as of December 31, 2017 and 2016, respectively. The loss of any major customer could have a material adverse impact on the Company’s results of operations, cash flows and financial position. | |
Supplier Concentration | Supplier Concentration The Company had three suppliers which accounted for approximately 75% of the Company’s total purchases during the year ended December 31, 2017. These three suppliers are located in three countries, Indonesia, Philippines, China, which accounted for approximately 93% of the Company’s total purchases during the year ended December 31, 2017. The Company had four suppliers which accounted for approximately 70% of the Company’s total purchases during the year ended December 31, 2016. These four suppliers are located in four countries, Indonesia, Philippines, China and USA, which accounted for approximately 82% of the Company’s total purchases during the year ended December 31, 2016. These suppliers included Bacolod, a related party, which accounted for approximately 53% and 22% of the Company’s total purchases, during the years ended December 31, 2017 and 2016, respectively. The loss of any major supplier could have a material adverse impact on the Company’s results of operations, cash flows and financial position. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our financial instruments include cash, accounts receivable, accounts payable, accrued expenses, and debt obligations. We believe the carrying values of our financial instruments approximate their fair values because they are short term in nature or payable on demand. | |
Reclassifications | Reclassifications Certain amounts in prior year have been reclassified to conform to the current year presentation. | |
Income Taxes | Income Taxes The Company, with the consent of its stockholder, has elected to be taxed under the S Corporation provisions of the Internal Revenue Code. Under these provisions, taxable income or loss of the Company is reflected on the stockholder’s individual income tax return. For the nine months ended September 30, 2018 and 2017, a pro forma income tax provision has been disclosed as if the Company was a C corporation and thus was subject to U.S. federal and state income taxes. The Company computed pro forma tax expense using an effective rate of 23.242% and 39.22% as of September 30, 2018 and 2017, respectively. The pro-forma provision for income taxes excludes information related to the Company’s VIE. | Income Taxes The Company, with the consent of its stockholder, has elected to be taxed under the S Corporation provisions of the Internal Revenue Code. Under these provisions, taxable income or loss of the Company is reflected on the stockholder’s individual income tax return. The Company assesses its tax positions in accordance with ASC 740, Income Taxes Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold, it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Interest and penalties related to uncertain tax positions, if any, are classified as a component of income tax expense. The Company believes that it does not have any significant uncertain tax positions requiring recognition or measurement in the accompanying financial statements. For the years ended December 31, 2016 and 2017, a pro forma income tax provision has been disclosed as if the Company was a C corporation and thus was subject to U.S. federal and state income taxes. The Company computed pro forma tax expense using an effective rate of 34.92% and 68.09% as of December 31, 2016 and 2017, respectively. The pro-forma provision for income taxes excludes information related to the Company’s VIE. |
Recently Issued Accounting Pronouncements | Recently Issued 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 category, 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 as 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 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Schedule of Estimated Useful Life of Asset | Fixed assets are stated at cost less accumulated depreciation and are being depreciated using the straight-line method over the estimated useful life of the asset as follows: Furniture and fixtures 7 to 10 years Computer equipment 5 years Warehouse and refrigeration equipment 10 years Leasehold improvements 7 years Automobile 5 years Trade show booth 7 years |
Consolidation of Variable Int_2
Consolidation of Variable Interest Entities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | ||
Schedule of Assets, Liabilities and Non-controlling Interest Related to Strike | The information below represents the assets, liabilities and non-controlling interest related to Strike as of September 30, 2018 and December 31, 2017. September 30, 2018 Assets $ 181,962 Liabilities 26,116 Non-controlling interest (488,759 ) December 31, 2017 Assets $ 422,358 Liabilities 318,073 Non-controlling interest (424,081 ) | The information below represents the assets, liabilities and non-controlling interest related to Strike as of December 31, 2017 and December 31, 2016. December 31, 2017 Assets $ 422,358 Liabilities 318,073 Non-controlling interest (424,081 ) December 31, 2016 Assets $ 187,013 Liabilities 40,329 Non-controlling interest (373,365 ) |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Schedule of Fixed Assets | Fixed assets comprised the following at December 31: 2017 2016 Computer equipment $ 22,924 $ 18,303 Warehouse and refrigeration equipment 135,607 106,737 Leasehold improvements 26,600 26,600 Automobile 174,621 174,621 Total 359,752 326,261 Less: Accumulated depreciation and amortization (213,256 ) (150,856 ) Fixed assets, net $ 146,496 $ 175,405 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Schedule of Principal Payments Related to Long-term Debt | At December 31, 2017, scheduled principal payments related to long-term debt are as follows: 2018 35,000 2019 34,000 Total $ 69,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
John Keeler & Co., Inc. [Member] | |
Schedule of Stock Option Activity | Stock Options Options Average Price Average Life (in Years) Aggregate Intrinsic Value Outstanding as of December 31, 2017 - $ - Granted 104 10,000.00 Exercised - Forfeited/Expired - Outstanding as of September 30, 2018 104 $ 10,000.00 9.50 $ - Exercisable at September 30, 2018 - - $ - |
Commitment (Tables)
Commitment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
John Keeler & Co., Inc. [Member] | |
Schedule of Future Minimum Lease Payments Under Operating Lease | At December 31, 2017, future minimum lease payments under operating lease agreements are as follows: 2018 203,000 2019 203,000 2020 203,000 2021 102,000 $ 711,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - John Keeler & Co., Inc. [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Due from related party for future shipments | $ 1,079,600 | $ 0 | $ 982,000 | |
Effective income tax rate | 23.242% | 39.22% | 34.92% | 68.09% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted cash | $ 58,503 | $ 29,498 | $ 193,674 | |
Allowances for doubtful accounts | 155,000 | 134,000 | ||
Allowance for bad debt | ||||
In-transit inventory | 6,148,000 | 5,363,000 | ||
Allowance for inventory | 39,300 | 48,500 | ||
Due from related party for future shipments | 1,079,600 | 0 | 982,000 | |
Foreign currency translation adjustment | $ 18,721 | $ 21,130 | 56,010 | (11,868) |
Advertising expenses | $ 108,000 | $ 82,500 | ||
Effective income tax rate | 23.242% | 39.22% | 34.92% | 68.09% |
Three Customers [Member] | Revenue [Member] | ||||
Concentration Risk percentage | 63.00% | 60.00% | ||
Three Customers [Member] | Accounts Receivable [Member] | ||||
Concentration Risk percentage | 66.00% | 63.00% | ||
Three Suppliers [Member] | ||||
Concentration Risk percentage | 75.00% | |||
Indonesia, Philippines, China [Member] | ||||
Concentration Risk percentage | 93.00% | |||
Four Suppliers [Member] | ||||
Concentration Risk percentage | 70.00% | |||
Indonesia, Philippines, China and USA [Member] | ||||
Concentration Risk percentage | 82.00% | |||
Bacolod [Member] | ||||
Concentration Risk percentage | 53.00% | 22.00% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Estimated Useful Life of Asset (Details) (10-K) - John Keeler & Co., Inc. [Member] | 12 Months Ended |
Dec. 31, 2017 | |
Furniture and Fixtures [Member] | Minimum [Member] | |
Property plant and equipment useful life | 7 years |
Furniture and Fixtures [Member] | Maximum [Member] | |
Property plant and equipment useful life | 10 years |
Computer Equipment [Member] | |
Property plant and equipment useful life | 5 years |
Warehouse and Refrigeration Equipment [Member] | |
Property plant and equipment useful life | 10 years |
Leasehold Improvements [Member] | |
Property plant and equipment useful life | 7 years |
Automobile [Member] | |
Property plant and equipment useful life | 5 years |
Trade Show Booth [Member] | |
Property plant and equipment useful life | 7 years |
Consolidation of Variable Int_3
Consolidation of Variable Interest Entities - Schedule of Assets, Liabilities and Non-controlling Interest Related to Strike (Details) - John Keeler & Co., Inc. [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | $ 181,962 | $ 422,358 | $ 187,013 |
Liabilities | 26,116 | 318,073 | 40,329 |
Non-controlling interest | $ (488,759) | $ (424,081) | $ (373,365) |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
John Keeler & Co., Inc. [Member] | ||||
Depreciation and amortization expense of fixed assets | $ 46,654 | $ 46,934 | $ 62,400 | $ 62,353 |
Fixed Assets - Schedule of Fixe
Fixed Assets - Schedule of Fixed Assets (Details) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Total | $ 359,752 | $ 326,261 | |
Less: Accumulated depreciation and amortization | (213,256) | (150,856) | |
Fixed assets, net | $ 106,213 | 146,496 | 175,405 |
Computer Equipment [Member] | |||
Total | 22,924 | 18,303 | |
Warehouse and Refrigeration Equipment [Member] | |||
Total | 135,607 | 106,737 | |
Leasehold Improvements [Member] | |||
Total | 26,600 | 26,600 | |
Automobile [Member] | |||
Total | $ 174,621 | $ 174,621 |
Accounts Payable (Details Narra
Accounts Payable (Details Narrative) - John Keeler & Co., Inc. [Member] - USD ($) | Sep. 30, 2018 | Sep. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts payable due | $ 2,751,603 | $ 4,409,232 | $ 5,314,796 | |
Longhai Desheng Canned Food Stuffs Ltd [Member] | ||||
Reduction in outstanding accounts payable | $ 388,199 | |||
Accounts payable due | $ 1,465,000 |
Stockholder Notes Payable (Deta
Stockholder Notes Payable (Details Narrative) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | |
Notes payable outstanding amount | $ 2,910,136 | $ 2,410,136 | $ 2,910,136 |
Interest expense | 162,300 | 115,000 | |
Interest waived | 30,000 | ||
AFS Finco I LP [Member] | |||
Proceeds from related party debt | 500,000 | ||
Unsecured Promissory Notes [Member] | |||
Notes payable outstanding amount | $ 2,910,000 | $ 2,410,000 | |
Annual interest rate | 6.00% | 6.00% |
Debt (Details Narrative)
Debt (Details Narrative) - John Keeler & Co., Inc. [Member] - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 31, 2016 | Jan. 31, 2015 | Mar. 31, 2014 | |
Revolving line of credit | $ 7,462,000 | $ 12,100,000 | $ 9,600,000 | $ 14,000,000 | $ 20,000,000 | $ 13,500,000 |
Repayment of new loan include debt issuance costs | $ 309,000 | |||||
Line of credit, term | 5 years | |||||
Line of credit, interest rate | 8.571% | 6.70% | ||||
Line of credit, description | Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. | Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. | ||||
Interest expenses | $ 645,400 | $ 807,000 | $ 800,000 | |||
London Interbank Offered Rate (LIBOR) [Member] | ||||||
Line of credit, interest rate | 6.25% | 4.50% | ||||
Prime Rate [Member] | ||||||
Line of credit, interest rate | 3.00% | |||||
Fixed Rate [Member] | ||||||
Line of credit, interest rate | 6.50% |
Debt (Details Narrative) (10-K)
Debt (Details Narrative) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | Aug. 31, 2016 | Nov. 05, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2015 | Mar. 31, 2014 | Jul. 31, 2013 |
Revolving line of credit | $ 14,000,000 | $ 7,462,000 | $ 12,100,000 | $ 9,600,000 | $ 20,000,000 | $ 13,500,000 | |||
Line of credit, interest rate | 8.571% | 6.70% | |||||||
Prepayment penalties and legal fees | 120,000 | ||||||||
Repayment of new loan | $ 4,646,997 | $ 36,568,702 | $ 45,499,318 | ||||||
Line of credit, term | 5 years | ||||||||
Line of credit, description | Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. | Borrowing is based on up to 85% of eligible accounts receivable plus the net orderly liquidation value of eligible inventory at the same rate, subject to certain defined limitations. | |||||||
Debt default interest rate | 3.00% | ||||||||
Debt issuance cost | $ 195,000 | $ 244,000 | |||||||
Debt accumulated amortization | 229,000 | 64,500 | |||||||
Amortization expense | $ 100,391 | $ 144,074 | 164,457 | 118,405 | |||||
Long term debt | 69,000 | 102,000 | |||||||
Interest expenses | $ 645,400 | $ 807,000 | $ 800,000 | ||||||
Forbearance Agreement [Member] | |||||||||
Line of credit, interest rate | 6.50% | ||||||||
Line of credit current borrowing capacity | $ 17,000,000 | ||||||||
Percentage of common stock to be pledge | 65.00% | ||||||||
London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Line of credit, interest rate | 6.25% | 4.50% | |||||||
Base Rate [Member] | |||||||||
Line of credit, interest rate | 1.75% | ||||||||
Floor Interest Rate [Member] | |||||||||
Line of credit, interest rate | 5.50% | ||||||||
Prime Rate [Member] | |||||||||
Line of credit, interest rate | 3.00% | ||||||||
Fixed Rate [Member] | |||||||||
Line of credit, interest rate | 6.50% | ||||||||
AloStar [Member] | |||||||||
Revolving line of credit | $ 10,000,000 | ||||||||
AFS Finco I LP [Member] | |||||||||
Revolving line of credit | $ 14,000,000 | ||||||||
Repayment of new loan | $ 309,000 | ||||||||
Line of credit, term | 4 years | ||||||||
AFS Finco I LP [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||||||
Line of credit, interest rate | 6.25% | ||||||||
AFS Finco I LP [Member] | Prime Rate [Member] | |||||||||
Line of credit, interest rate | 3.00% | ||||||||
AFS Finco I LP [Member] | Fixed Rate [Member] | |||||||||
Line of credit, interest rate | 6.50% | ||||||||
Mercedes-Benz Financial Services [Member] | |||||||||
Loan interest rate | 5.56% | ||||||||
Debt monthly instalment | $ 3,000 | ||||||||
Debt maturity date | Nov. 30, 2019 |
Debt - Schedule of Principal Pa
Debt - Schedule of Principal Payments Related to Long-term Debt (Details) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
2,018 | $ 35,000 | |
2,019 | 34,000 | |
Total | $ 69,000 | $ 102,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - John Keeler & Co., Inc. [Member] - USD ($) | Mar. 31, 2018 | Sep. 30, 2018 |
Number of share options issued during period | 104 | |
Stock option, expected term | 5 years | |
Stock option, volatility | 51.76% | |
Stock option, risk free interest rate | 2.84% | |
Stock option term | 10 years | |
Stock option vesting percentage | 47.50% | |
Stock based compensation | $ 496,293 | |
Employee [Member] | ||
Number of share options issued during period | 104 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - John Keeler & Co., Inc. [Member] | 9 Months Ended |
Sep. 30, 2018USD ($)$ / sharesshares | |
Number of Option, Outstanding beginning | |
Number of Option, Granted | 104 |
Number of Option, Exercised | |
Number of Option, Forfeited/Expired | |
Number of Option, Outstanding ending | 104 |
Number of Option, Exercisable ending | |
Average Price, Outstanding beginning | $ / shares | |
Average Price, Granted | $ / shares | 10,000 |
Average Price, Outstanding ending | $ / shares | 10,000 |
Average Price, Exercisable ending | $ / shares | |
Average Life (in Years), Outstanding ending | 9 years 6 months |
Aggregate Intrinsic value, Outstanding ending | $ | |
Aggregate Intrinsic value, Exercisable ending | $ |
Commitment (Details Narrative)
Commitment (Details Narrative) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Lease term | 20 years | |
Lease expiration | Jul. 31, 2021 | |
Mortgage amount | $ 1,346,000 | |
Rental and equipment lease expenses | $ 211,000 | $ 227,400 |
Commitment - Schedule of Future
Commitment - Schedule of Future Minimum Lease Payments Under Operating Lease (Details) (10-K) - John Keeler & Co., Inc. [Member] | Dec. 31, 2017USD ($) |
2,018 | $ 203,000 |
2,019 | 203,000 |
2,020 | 203,000 |
2,021 | 102,000 |
Future minimum lease payments | $ 711,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - John Keeler & Co., Inc. [Member] - $ / shares | Nov. 08, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Par value of exchanged shares | $ 1 | $ 1 | $ 1 | |
Subsequent Event [Member] | Shareholder [Member] | ||||
Shares exchanged by the shareholder | 500 | |||
Par value of exchanged shares | $ 1 | |||
Shares issued to new shareholder | 15,000,000 | |||
Par value of shares issued to new shareholder | $ 0.0001 | |||
Outstanding shares issued to new shareholder | 16,015,000 | |||
Subsequent Event [Member] | Private Placement Investors [Member] | ||||
Warrants issued to investors | 181,250 | |||
Subsequent Event [Member] | Private Placement Investors [Member] | Series A Preferred Stock [Member] | ||||
Shares issued to investors | 725 | |||
Subsequent Event [Member] | Prior Investors [Member] | ||||
Warrants issued to investors | 172,000 | |||
Subsequent Event [Member] | Prior Investors [Member] | Series A Preferred Stock [Member] | ||||
Shares issued to investors | 688 | |||
Subsequent Event [Member] | Christopher Constable [Member] | ||||
Number of stock options granted | 3,120,000 |
Subsequent Events (Details Na_2
Subsequent Events (Details Narrative) (10-K) - John Keeler & Co., Inc. [Member] - USD ($) | Nov. 08, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 20, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Number of stock options to purchase shares of common stock | 104 | ||||||
Stock option term | 9 years 6 months | ||||||
Probability of vesting of stock options | 47.50% | ||||||
Par value of exchanged shares | $ 1 | $ 1 | $ 1 | ||||
Carlos Faria [Member] | |||||||
Number of stock options to purchase shares of common stock | 104 | ||||||
Stock option term | 10 years | ||||||
Probability of vesting of stock options | 40.00% | 47.50% | |||||
Supplier [Member] | |||||||
Outstanding accounts payable | $ 388,199 | ||||||
Balance due to supplier | $ 1,465,000 | ||||||
Subsequent Event [Member] | Shareholder [Member] | |||||||
Shares exchanged by the shareholder | 500 | ||||||
Par value of exchanged shares | $ 1 | ||||||
Shares issued to new shareholder | 15,000,000 | ||||||
Par value of shares issued to new shareholder | $ 0.0001 | ||||||
Outstanding shares issued to new shareholder | 16,015,000 | ||||||
Subsequent Event [Member] | Private Placement Investors [Member] | |||||||
Warrants issued to investors | 181,250 | ||||||
Subsequent Event [Member] | Private Placement Investors [Member] | Series A Preferred Stock [Member] | |||||||
Shares issued to investors | 725 | ||||||
Subsequent Event [Member] | Prior Investors [Member] | |||||||
Warrants issued to investors | 172,000 | ||||||
Subsequent Event [Member] | Prior Investors [Member] | Series A Preferred Stock [Member] | |||||||
Shares issued to investors | 688 | ||||||
Subsequent Event [Member] | Christopher Constable [Member] | |||||||
Number of stock options granted | 3,120,000 |