Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 14, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Blue Star Foods Corp. | |
Entity Central Index Key | 0001730773 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 16,055,794 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS | ||
Cash (including VIE $10,213 and $5,561, respectively) | $ 45,150 | $ 13,143 |
Restricted Cash | 59,237 | 334,083 |
Accounts receivable, net (including VIE $37,681 and $49,624, respectively) | 3,275,317 | 3,449,487 |
Inventory, net (including VIE $12,033 and $117,816, respectively) | 8,618,182 | 8,126,634 |
Advances to related party | 1,261,468 | 1,139,619 |
Other current assets (including VIE $3,759 and $4,351, respectively) | 95,166 | 90,929 |
Total current assets | 13,354,520 | 13,153,895 |
FIXED ASSETS, net | 95,834 | 109,169 |
RIGHT OF USE ASSET | 1,220,283 | |
OTHER ASSETS | 192,256 | 218,254 |
TOTAL ASSETS | 14,862,893 | 13,481,318 |
CURRENT LIABILITIES | ||
Accounts payable and accruals (including VIE $55,171 and $95,720, respectively) | 2,556,061 | 3,155,741 |
Working capital line of credit | 8,712,945 | 8,203,725 |
Related Party Notes Payable | 1,000,000 | |
Current maturities of long-term debt | 25,158 | 31,230 |
Stockholder notes payable - Subordinated | 2,910,136 | 2,910,136 |
Total current liabilities | 15,204,300 | 14,300,832 |
RIGHT OF USE LONG -TERM LIABILITY | 1,096,226 | |
TOTAL LIABILITIES | 16,300,526 | 14,300,832 |
COMMITMENTS AND CONTINGENCIES | ||
Blue Star Foods Corp. Stockholder's Deficit | ||
Series A 8% cumulative convertible preferred stock, $0.0001 par value; 10,000 shares authorized, 1,413 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 16,042,294 shares issued and outstanding (including 14,130 shares declared as stock dividend on March 31, 2019) as of March 31, 2019 and 16,023,164 shares issued and outstanding (including 8,164 shares declared as stock dividend on December 31, 2018) as of December 31, 2018 | 1,606 | 1,603 |
Additional paid-in capital | 4,108,059 | 3,404,774 |
Accumulated deficit | (5,101,428) | (3,853,139) |
Total Blue Star Foods Corp. stockholder's deficit | (991,763) | (446,762) |
Non-controlling interest | (460,101) | (440,833) |
Accumulated other comprehensive income (VIE) | 14,231 | 68,081 |
Total VIE's deficit | (445,870) | (372,752) |
TOTAL STOCKHOLDER'S DEFICIT | (1,437,633) | (819,514) |
TOTAL LIABILITIES AND STOCKHOLDER'S DEFICIT | $ 14,862,893 | $ 13,481,318 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 16,042,294 | 16,023,164 |
Common stock, shares outstanding | 16,042,294 | 16,023,164 |
Common stock dividend shares | 14,130 | 8,164 |
Series A 8% Cumulative Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 1,413 | 1,413 |
Preferred stock, shares outstanding | 1,413 | 1,413 |
Accounts Payable and Accruals [Member] | ||
Current liabilities of VIE | $ 55,171 | $ 95,720 |
Other Current Assets [Member] | ||
Current assets attributable to VIE | 3,759 | 4,351 |
Inventories [Member] | ||
Current assets attributable to VIE | 12,033 | 117,816 |
Accounts Receivable [Member] | ||
Current assets attributable to VIE | 37,681 | 49,624 |
Cash [Member] | ||
Current assets attributable to VIE | $ 10,213 | $ 5,561 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
REVENUE, NET | $ 6,510,774 | $ 8,190,417 |
COST OF REVENUE (including approximately $2,114,500 and $4,234,600, respectively, | 5,600,914 | 7,507,068 |
GROSS PROFIT | 909,860 | 683,479 |
COMMISSIONS | 18,810 | 28,815 |
SALARIES & WAGES | 1,116,748 | 472,877 |
SETTLEMENT & WARRANT EXPENSE | ||
OTHER OPERATING EXPENSES | 775,406 | 683,479 |
LOSS FROM OPERATIONS | (1,001,104) | (501,822) |
OTHER INCOME | ||
OTHER EXPENSE | ||
INTEREST EXPENSE | (238,193) | (266,297) |
NET LOSS | (1,239,297) | (768,119) |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (19,268) | (44,890) |
NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | (1,220,029) | (723,229) |
DIVIDEND ON PREFERRED STOCK | 28,260 | |
NET LOSS ATTRIBUABLE TO BLUE STAR FOODS CORP. COMMON SHAREHOLDERS | (1,248,289) | (715,458) |
COMPREHENSIVE INCOME (LOSS): | ||
TRANSLATION ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (53,850) | 5,096 |
COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (73,118) | (39,793) |
COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | (1,220,029) | (723,229) |
PRO FORMA DATA: | ||
PRO FORMA INCOME TAX EXPENSE | ||
PRO FORMA NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | (1,220,029) | (723,229) |
PRO FORMA COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | $ (1,222,029) | $ (723,229) |
Loss per basic and diluted common share: | ||
Basic net loss per common share | $ (0.08) | $ (0.05) |
Basic weighted average common shares outstanding | 16,026,386 | 15,000,000 |
Fully diluted net loss per common share | $ (0.08) | $ (0.05) |
Fully diluted weighted average common shares outstanding | 16,026,386 | 15,000,000 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Purchased from related party | $ 2,114,500 | $ 4,234,600 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholder's Deficit (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Total Blue Star Foods Corp. Stockholder's Deficit [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 29, 2017 | $ 1,500 | $ 558,257 | $ (1,494,927) | $ (935,170) | $ (317,378) | $ (1,252,548) | |
Balance, shares at Dec. 29, 2017 | 15,000,000 | ||||||
606 Adjustment to January 1, 2018 | (81,520) | (81,520) | (81,520) | ||||
Net Loss | |||||||
Balance at Jan. 02, 2018 | $ 1,500 | 558,257 | (1,576,447) | (1,016,690) | (317,378) | (1,334,068) | |
Balance, shares at Jan. 02, 2018 | 15,000,000 | ||||||
Net Loss | (723,228) | (723,228) | (44,890) | (768,118) | |||
Comprehensive loss | 5,096 | 5,096 | |||||
Balance at Mar. 31, 2018 | $ 1,500 | 558,257 | (2,299,675) | (1,739,918) | (357,172) | (2,097,090) | |
Balance, shares at Mar. 31, 2018 | 15,000,000 | ||||||
Balance at Dec. 31, 2018 | $ 1,603 | 3,404,774 | (3,853,139) | (446,762) | (372,752) | (819,514) | |
Balance, shares at Dec. 31, 2018 | 1,413 | 16,023,164 | |||||
Common stock issued for Cash | $ 1 | 10,000 | 10,000 | ||||
Common stock issued for Cash, shares | 5,000 | 9,999 | |||||
Stock Based Compensation | $ 665,028 | 665,028 | 665,028 | ||||
Dividends to preferred stockholders | $ 2 | 28,258 | (28,260) | $ 28,260 | |||
Dividends to preferred stockholders, shares | 14,130 | 14,130 | |||||
Net Loss | (1,220,029) | (1,220,029) | (19,268) | $ (1,239,297) | |||
Comprehensive loss | (53,850) | (53,850) | |||||
Balance at Mar. 31, 2019 | $ 1,606 | $ 4,108,059 | $ (5,101,428) | $ (991,763) | $ (445,870) | $ (1,437,633) | |
Balance, shares at Mar. 31, 2019 | 1,413 | 16,042,294 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholder's Deficit (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Mar. 31, 2018 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net Loss | $ (1,239,297) | $ (768,119) | $ (768,118) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock Based Compensation | 665,028 | ||
Depreciation of fixed assets | 17,005 | 15,551 | |
Amortization of Right of use asset | 37,468 | ||
Amortization of loan costs | 35,998 | 33,262 | |
Changes in operating assets and liabilities: | |||
Receivables | 174,170 | 255,434 | |
Inventories | (491,548) | 2,496,991 | |
Advances to affiliated supplier | (121,849) | (327,044) | |
Other current assets | (4,237) | (2,983) | |
Change in Right of use Liability | (32,615) | ||
Accounts payable and accruals | (728,590) | (622,157) | |
Net cash provided by (used) in operating activities | (1,688,467) | 1,080,936 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of fixed assets | (3,670) | (2,991) | |
Net cash used in investing activities | (3,670) | (2,991) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from Common Stock Offering | 10,000 | ||
Proceeds from working capital lines of credit | 7,215,843 | 6,888,740 | |
Repayments of working capital lines of credit | (6,706,623) | (7,934,415) | |
Proceeds from Related Party Notes Payable | 1,000,000 | ||
Principal payments of long-term debt | (6,072) | (8,556) | |
Payments of Loan costs | (10,000) | ||
Net cash provided by (used) in financing activities | 1,503,148 | (1,054,231) | |
Effect of exchange rate changes on cash | (53,850) | 5,096 | |
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (242,839) | 28,810 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH BEGINNING OF PERIOD | 347,226 | 58,875 | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD | 104,387 | 87,685 | $ 87,685 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY | |||
Series A 8% Dividend issued in Common Stock | 28,260 | ||
Valuation of Right of Use asset/liability | 1,257,751 | ||
Supplemental Disclosure of Cash Flow Information | |||
Cash paid for interest | $ 238,367 | $ 266,286 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 3 Months Ended |
Mar. 31, 2019 | |
Statement of Cash Flows [Abstract] | |
Preferred stock, dividend percentage | 8.00% |
Company Overview
Company Overview | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company Overview | Note 1. Company Overview Located in Miami, Florida, Blue Star Foods Corp. (the “Company”) is a sustainable seafood company. The company’s main operating business, John Keeler & Co., Inc. has been in business for approximately twenty-one years. The Company was formed under the laws of the State of Delaware. The 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, Oceanica, Pacifika and Harbor Banks. On November 8, 2018 the sole shareholder of John Keeler & Co., Inc. 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 exchanged 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. As part of the merger, the net liabilities existing in the company as of the date of the merger totaling approximately $2,400 were converted to equity as part of this transaction. The prior owners of Blue Star Foods Corp. received 750,000 shares of common stock as part of this transaction, and various service providers received 265,000 shares as compensation for their work on the transaction resulting in and expense and additional paid in capital of $530,001. Additionally, there were 725 Series A Preferred shares and 181,250 warrants issued to private placement investors for total capital contribution of $725,000, 688 Series A Preferred shares and 172,000 warrants issued for settlement with prior investors which had a fair value of $688,000 and $81,353 respectively. Lastly, upon the close of the merger there were 3,120,000 options to purchase common stock issued to Christopher Constable. Additionally, Carlos Faria held options to purchase 104 shares of John Keeler & Co., Inc. prior to the merger. These options were immediately converted at closing to 3,120,000 options to purchase common stock in Blue Star Foods Corp. The Merger was 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 has been treated as a recapitalization of Blue Star Foods Corp. Accordingly, John Keeler & Co., Inc.’s assets, liabilities and results of operations are the historical financial statements of the registrant, and the John Keeler & Co., Inc.’s assets, liabilities and results of operations have been 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 was recorded in this transaction. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Note 2. Basis of Presentation and Summary of Significant Accounting Policies 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, 2018 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. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on from 10-K for the year ending December 31, 2018 for a broader discussion of our business and the risks inherent in such business. 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 March 31, 2019 and December 31, 2018, the balance due from the related party for future shipments was approximately $1,261,468 and $1,139,619, respectively. The 2019 balances represent approximately four months of purchases from the supplier. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers”, and has subsequently issued several supplemental and/or clarifying ASUs (collectively, “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 is intended to provide a more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual and interim periods beginning after December 15, 2017. Upon adoption, we must elect to adopt either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We adopted the new standard using the modified retrospective method on January 1, 2018. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. The standard also requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. ASC 842 Leases On January 1, 2019, we adopted Accounting Standards Codification 842 and all the related amendments using the modified retrospective method. We recognized the cumulative effect of initially applying the new lease standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods. The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. We did not reassess whether any contracts entered into prior to adoption are leases or contain leases. We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. We did not have any finance leases as of March 31, 2019. Our leases generally have terms that range from three years for equipment and five to twenty years for property. We elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease. Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Lease assets are tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that we will exercise the option, we consider these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. The table below presents the lease-related assets and liabilities recorded on the balance sheets. March 31, 2019 Assets Operating lease assets $ 1,220,283 Liabilities Current $ 128,910 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,096,226 Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2019 Cash used in operating activities: Operating leases $ 4,853 ROU assets recognized in exchange for lease obligations: Operating leases $ 1,257,751 The table below presents the remaining lease term and discount rates for operating leases. March 31, 2019 Weighted-average remaining lease term Operating leases 7.21 years Weighted-average discount rate Operating leases 5.5 % Maturities of lease liabilities as of March 31, 2019, were as follows: Operating Leases 2019 (excluding the three months ended March 31, 2019) $ 149,729 2020 190,574 2021 201,675 2022 213,600 2023 216,847 Thereafter 557,074 Total lease payments 1,529,499 Less: amount of lease payments representing interest (312,143 ) Present value of future minimum lease payments $ 1,217,356 Less: current obligations under leases $ (121,130 ) Non current long-term obligations $ 1,096,226 Stock-Based Compensation Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements. Income Taxes Prior to November 8, 2018, the Company was taxed under the provisions of subchapter S of the Internal Revenue Code. Under these provisions, the Company did not pay corporate federal income taxes on its taxable income but was liable for Florida corporate income taxes and Texas Franchise Tax. The shareholder was liable for individual income taxes on the Company’s taxable income. Post-merger, the Company file consolidated federal and state income tax returns. |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 3. Going Concern The accompanying consolidated financial statements and notes have been prepared assuming the Company will continue as a going concern. For the three months ended March 31, 2019, the Company incurred a net loss of $1,239,297, has an accumulated deficit of $5,101,428 and working capital deficit of $1,849,780, with the current liabilities inclusive of $2,910,136 in stockholder loans that are subordinated to the provider of the working capital facility, and $128,910 in the current portion of the lease liability recognition. These circumstances raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to increase revenues, execute on its business plan to acquire complimentary companies, raise capital, and to continue to sustain adequate working capital to finance its operations. The failure to achieve the necessary levels of profitability and cash flows would be detrimental to the Company. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Consolidation of Variable Inter
Consolidation of Variable Interest Entities | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation of Variable Interest Entities | Note 4. Consolidation of Variable Interest Entities Effective April 1, 2014, the Company’s stockholder was transferred the controlling interest of Strike the Gold Foods Ltd. (“Strike”), a related party entity based in the United Kingdom. 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 March 31, 2019 and December 31, 2018. March 31, 2019 Assets $ 63,686 Liabilities 55,171 Non-controlling interest (460,101 ) December 31, 2018 Assets $ 177,352 Liabilities 95,720 Non-controlling interest (440,883 ) |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
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 year ended December 31, 2018, the Company failed to meet certain financial covenants. The bank issued the fourth amendment to the loan and security agreement dated September 19, 2018 waiving the defaults of the financial covenants, and resetting certain financial covenants. The Company is in violation of its covenant regarding advances to affiliates as of March 31, 2019. 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. 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 revolving line of credit remain unchanged As of March 31, 2019, the line of credit bears interest rate of 9.376%. As of March 31, 2019 and December 31, 2018, the line of credit had an outstanding balance of approximately $8,713,000 and $8,204,000, respectively. John Keeler Promissory Notes From January 2006 through May 2017, Keeler & Co issued an aggregate of $2,910,000 6% demand promissory notes to John Keeler, our Executive Chairman. As of March 31, 2019, $2,910,000 of principal remains outstanding and approximately $43,700 of interest was paid under the notes. These notes have been subordinated to the provider of the working capital line of credit and payment of these loans are restricted under this subordination agreement. After satisfaction of the terms of the subordination, the Company can prepay the notes at any time first against interest due thereunder. If an event of default occurs under the notes, interest will accrue at 18% per annum and if not paid within 10 days of payment becoming due, the holder of the note is entitled to a late fee of 5% of the amount of payment not timely made. Current Portion of Long-Term Debt As of March 31, 2019 and December 31, 2018, current portion of 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 installments of approximately $3,000, inclusive of interest. The loan matures on November 30, 2019. Kenar Note On March 26, 2019, the Company issued a four-month promissory note in the principal amount of $1,000,000 (the “Kenar Note”) to Kenar Overseas Corp., a company registered in Panama (the “Lender”) and controlled by a related party. The term of the note may be extended for an additional two months at the Lender’s discretion. The note bears interest at the rate of 18% per annum during the initial four months which rate will increase to 24% during any extension thereof. The note may be prepaid in whole or in part without penalty. John Keeler, the Company’s Executive Chairman pledged 5,000,000 shares of common stock to secure the Company’s obligations under the note. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Common Stock | Note 6. Common Stock On February 1, 2019, the Company sold 5,000 shares at $2.00 per share to one investor in a private offering. A dividend of common stock was authorized to the shareholders per the preferred shares designation on March 31, 2019. The dividend resulted in an issuance of 14,130 shares of stock with a value of $28,260. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 7. Stock-Based Compensation For the three months ended March 31, 2019 During the three months ended March 31, 2019, $665,028 in compensation expense was recognized on the following: 1. Options to purchase 3,120,000 shares of Common Stock at an exercise price of $2.00 with a 10 year life, which vest one-year from the date of grant, were issued to Christopher Constable under the 2018 Plan during the twelve months ending December 31, 2018. 2. Options to purchase 430,000 shares of Common Stock at an exercise price of $2.00 with a 10 year life, which vest 25% each year from the date of grant, were issued to various long term employees under the 2018 Plan during the three months ending March 31, 2019. 3. Options to purchase 250,000 shares of Common Stock at an exercise price of $2.00 with a 10 year life, which vest 20% each year from the date of grant, were issued to Zoty Ponce under the 2018 Plan during the three months ending March 31, 2019. 4. Options to purchase 25,000 shares of Common Stock at an exercise price of $2.00 with a 10 year life, which vest 25% each year from the date of grant, were issued to various contractors during the three months ending March 31, 2019. The following table summarizes the assumptions used to estimate the fair value of the stock options granted during 2019: 2019 Expected Volatility 39%-48 % Risk Free Interest Rate 2.62%-2.71 % Expected life of warrants 6.25 – 10.0 Under the Black-Scholes option pricing model, the fair value of the 705,000 options granted during the three months ended March 31, 2019 is estimated at $613,586.55 on the date of grant. The following Table represents option activity for the three months ending March 31, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding - December 31, 2018 6,240,000 $ 1.17 9.86 Exercisable - December 31, 2018 3,120,000 $ 0.33 9.86 $ 5,210,400 Granted 705,000 $ 2.00 Vested - Outstanding - March 31, 2019 6,945,000 $ 1.25 9.64 Exercisable - March 31, 2019 3,120,000 $ 0.33 9.62 $ 5,210,400 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Warrants | |
Warrants | Note 8. Warrants The following Table represents warrant activity for the three months ending March 31, 2019: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding - December 31, 2018 353,250 $ 2.40 2.85 Exercisable - December 31, 2018 353,250 $ 2.40 2.85 $ - Granted - $ - Forfeited or Expired - Outstanding - March 31, 2019 353,250 $ 2.40 2.61 Exercisable - March 31, 2019 353,250 $ 2.40 2.61 $ - There was no warrant activity for the three months ending March 31, 2019. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Note 9. Commitment and Contingencies Office lease The Company leases its office and warehouse facility from JK Real Estate, a related party through common family beneficial ownership. The lease has a 20 year term, expiring in July 2021. It is currently likely that the Company will renew this lease for a five year term. The estimated lease payments associated with the renewal are included in the calculation of the future minimum lease payments. The Company is a guarantor of the mortgage on the facility which had a balance of approximately $1,298,100 at March 31, 2019; 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 Legal Based on current negotiations in response to a letter received on November 27, 2018 in connection with a threatened lawsuit by a former employee, the Company believes that it has adequately reserved for any settlement resulting from such negotiations in its financial statements for the three months ended March 31, 2019. To date, the Company has received no further communications from the former employee. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10 Subsequent Events On April 2, 2019, the Company issued a four-month promissory note in the principal amount of $100,000 to Lobo Holdings, LLC., a stockholder in the Company. The note bears interest at the rate of 18% per annum. The note may be prepaid in whole or in part without penalty. John Keeler, the Company’s Executive Chairman pledged 1,000,000 shares of common stock to secure the Company’s obligations under the note. On April 2, 2019, the Company sold 5,000 shares at $2.00 per share to one investor in a private offering. On April 12, 2019, the Company sold 1,000 shares at $2.00 per share to one investor in a private offering. On April 23, 2019, the Company issued 2,500 shares at $2.00 per share to MEC Consulting Inc. for professional services. On May 2, 2019, the Company sold 500 shares at $2.00 per share to one investor in a private offering. On May 6, 2019, the Company sold 500 shares at $2.00 per share to one investor in a private offering. On May 7, 2019, the Company sold 3,000 shares at $2.00 per share to one investor in a private offering. On May 9, 2019, the Company sold 1,000 shares at $2.00 per share to one investor in a private offering. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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, 2018 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. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on from 10-K for the year ending December 31, 2018 for a broader discussion of our business and the risks inherent in such business. |
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 March 31, 2019 and December 31, 2018, the balance due from the related party for future shipments was approximately $1,261,468 and $1,139,619, respectively. The 2019 balances represent approximately four months of purchases from the supplier. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, “Revenue from Contracts with Customers”, and has subsequently issued several supplemental and/or clarifying ASUs (collectively, “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 is intended to provide a more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual and interim periods beginning after December 15, 2017. Upon adoption, we must elect to adopt either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We adopted the new standard using the modified retrospective method on January 1, 2018. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. ASC 606 also impacts certain other areas, such as the accounting for costs to obtain or fulfill a contract. The standard also requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. |
ASC 842 Leases | ASC 842 Leases On January 1, 2019, we adopted Accounting Standards Codification 842 and all the related amendments using the modified retrospective method. We recognized the cumulative effect of initially applying the new lease standard as an adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the lease accounting standard in effect for those periods. The new lease standard requires all leases to be reported on the balance sheet as right-of-use assets and lease obligations. We elected the practical expedients permitted under the transition guidance of the new standard that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. We did not reassess whether any contracts entered into prior to adoption are leases or contain leases. We categorize leases with contractual terms longer than twelve months as either operating or finance. Finance leases are generally those leases that would allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating leases. We did not have any finance leases as of March 31, 2019. Our leases generally have terms that range from three years for equipment and five to twenty years for property. We elected the accounting policy to include both the lease and non-lease components of our agreements as a single component and account for them as a lease. Lease liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives, plus any direct costs from executing the leases. Lease assets are tested for impairment in the same manner as long-lived assets used in operations. Leasehold improvements are capitalized at cost and amortized over the lesser of their expected useful life or the lease term. When we have the option to extend the lease term, terminate the lease before the contractual expiration date, or purchase the leased asset, and it is reasonably certain that we will exercise the option, we consider these options in determining the classification and measurement of the lease. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease. The table below presents the lease-related assets and liabilities recorded on the balance sheets. March 31, 2019 Assets Operating lease assets $ 1,220,283 Liabilities Current $ 128,910 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,096,226 Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2019 Cash used in operating activities: Operating leases $ 4,853 ROU assets recognized in exchange for lease obligations: Operating leases $ 1,257,751 The table below presents the remaining lease term and discount rates for operating leases. March 31, 2019 Weighted-average remaining lease term Operating leases 7.21 years Weighted-average discount rate Operating leases 5.5 % Maturities of lease liabilities as of March 31, 2019, were as follows: Operating Leases 2019 (excluding the three months ended March 31, 2019) $ 149,729 2020 190,574 2021 201,675 2022 213,600 2023 216,847 Thereafter 557,074 Total lease payments 1,529,499 Less: amount of lease payments representing interest (312,143 ) Present value of future minimum lease payments $ 1,217,356 Less: current obligations under leases $ (121,130 ) Non current long-term obligations $ 1,096,226 |
Stock-Based Compensation | Stock-Based Compensation Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-7”), which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity – Equity-Based Payments to Non-Employees. The adoption of ASU 2018-07 did not have a material impact on the Company’s consolidated financial statements. |
Income Taxes | Income Taxes Prior to November 8, 2018, the Company was taxed under the provisions of subchapter S of the Internal Revenue Code. Under these provisions, the Company did not pay corporate federal income taxes on its taxable income but was liable for Florida corporate income taxes and Texas Franchise Tax. The shareholder was liable for individual income taxes on the Company’s taxable income. Post-merger, the Company file consolidated federal and state income tax returns. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Lease-related Assets and Liabilities | The table below presents the lease-related assets and liabilities recorded on the balance sheets. March 31, 2019 Assets Operating lease assets $ 1,220,283 Liabilities Current $ 128,910 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,096,226 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2019 Cash used in operating activities: Operating leases $ 4,853 ROU assets recognized in exchange for lease obligations: Operating leases $ 1,257,751 |
Schedule of Remaining Lease Term and Discount Rates for Operating Leases | The table below presents the remaining lease term and discount rates for operating leases. March 31, 2019 Weighted-average remaining lease term Operating leases 7.21 years Weighted-average discount rate Operating leases 5.5 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of March 31, 2019, were as follows: Operating Leases 2019 (excluding the three months ended March 31, 2019) $ 149,729 2020 190,574 2021 201,675 2022 213,600 2023 216,847 Thereafter 557,074 Total lease payments 1,529,499 Less: amount of lease payments representing interest (312,143 ) Present value of future minimum lease payments $ 1,217,356 Less: current obligations under leases $ (121,130 ) Non current long-term obligations $ 1,096,226 |
Consolidation of Variable Int_2
Consolidation of Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 March 31, 2019 and December 31, 2018. March 31, 2019 Assets $ 63,686 Liabilities 55,171 Non-controlling interest (460,101 ) December 31, 2018 Assets $ 177,352 Liabilities 95,720 Non-controlling interest (440,883 ) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Fair Value of Stock Options | The following table summarizes the assumptions used to estimate the fair value of the stock options granted during 2019: 2019 Expected Volatility 39%-48 % Risk Free Interest Rate 2.62%-2.71 % Expected life of warrants 6.25 – 10.0 |
Schedule of Stock Option Activity | The following Table represents option activity for the three months ending March 31, 2019: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding - December 31, 2018 6,240,000 $ 1.17 9.86 Exercisable - December 31, 2018 3,120,000 $ 0.33 9.86 $ 5,210,400 Granted 705,000 $ 2.00 Vested - Outstanding - March 31, 2019 6,945,000 $ 1.25 9.64 Exercisable - March 31, 2019 3,120,000 $ 0.33 9.62 $ 5,210,400 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Warrants | |
Schedule of Warrant Activity | The following Table represents warrant activity for the three months ending March 31, 2019: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Outstanding - December 31, 2018 353,250 $ 2.40 2.85 Exercisable - December 31, 2018 353,250 $ 2.40 2.85 $ - Granted - $ - Forfeited or Expired - Outstanding - March 31, 2019 353,250 $ 2.40 2.61 Exercisable - March 31, 2019 353,250 $ 2.40 2.61 $ - |
Company Overview (Details Narra
Company Overview (Details Narrative) - USD ($) | Nov. 08, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Nov. 08, 2019 | Dec. 31, 2018 | Jan. 02, 2018 | Dec. 29, 2017 |
Par value of exchanged shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Stock issued during period services, value | $ 530,001 | ||||||
Total capital contribution | $ 10,000 | ||||||
Series A Preferred Stock [Member] | |||||||
Shares outstanding | 1,413 | 1,413 | |||||
Common Stock [Member] | |||||||
Shares outstanding | 16,042,294 | 15,000,000 | 16,023,164 | 15,000,000 | 15,000,000 | ||
Common stock recieved on transaction | 750,000 | ||||||
Stock issued during period services | 265,000 | ||||||
Prior Investors [Member] | Series A Preferred Stock [Member] | |||||||
Fair value | $ 688,000 | $ 81,353 | |||||
Christopher Constable [Member] | |||||||
Number of stock options granted | 3,120,000 | ||||||
John Keeler & Co., Inc. [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 | ||||||
Shares outstanding | 16,015,000 | ||||||
Converted to equity transaction | $ 2,400 | ||||||
John Keeler & Co., Inc. [Member] | Private Placement Investors [Member] | |||||||
Warrants issued to investors | 181,250 | ||||||
Total capital contribution | $ 725,000 | ||||||
John Keeler & Co., Inc. [Member] | Private Placement Investors [Member] | Series A Preferred Stock [Member] | |||||||
Shares issued to investors | 725 | ||||||
John Keeler & Co., Inc. [Member] | Prior Investors [Member] | |||||||
Warrants issued to investors | 172,000 | ||||||
John Keeler & Co., Inc. [Member] | Prior Investors [Member] | Series A Preferred Stock [Member] | |||||||
Shares issued to investors | 688 | ||||||
John Keeler & Co., Inc. [Member] | Christopher Constable [Member] | |||||||
Number of stock options granted | 3,120,000 | ||||||
John Keeler & Co., Inc. [Member] | Carlos Faria [Member] | |||||||
Options to purchase stock | 104 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Due from related party for future shipments | $ 1,261,648 | $ 1,139,619 |
finance leases | ||
Operating lease, term | 7 years 2 months 16 days | |
Equipment [Member] | ||
Operating lease, term | 3 years | |
Property [Member] | Minimum [Member] | ||
Operating lease, term | 5 years | |
Property [Member] | Maximum [Member] | ||
Operating lease, term | 20 years |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Lease-related Assets and Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Operating lease assets | $ 1,220,283 | |
Operating lease liabilities - Current | 128,910 | |
Operating lease liabilities - Noncurrent | $ 1,096,226 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Supplemental Cash Flow Information Related to Leases (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |
Cash used in operating activities, Operating leases | $ 4,853 |
ROU assets recognized in exchange for lease obligations, Operating leases | $ 1,257,751 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Remaining Lease Term and Discount Rates for Operating Leases (Details) | Mar. 31, 2019 |
Accounting Policies [Abstract] | |
Weighted-average remaining lease term, Operating leases | 7 years 2 months 16 days |
Weighted-average discount rate, Operating leases | 5.50% |
Basis of Presentation and Sum_8
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Maturities of Lease Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
2019 (excluding the three months ended March 31, 2019) | $ 149,729 | |
2020 | 190,574 | |
2021 | 201,675 | |
2022 | 213,600 | |
2023 | 216,847 | |
Thereafter | 557,074 | |
Total lease payments | 1,529,499 | |
Less: amount of lease payments representing interest | (312,143) | |
Present value of future minimum lease payments | 1,217,356 | |
Less: current obligations under leases | (121,130) | |
Non current long-term obligations | $ 1,096,226 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net income (loss) | $ (1,239,297) | $ (768,119) | $ (768,118) | |
Accumulated deficit | (5,101,428) | $ (3,853,139) | ||
Working capital deficit | 1,849,780 | |||
Subordinated stockholder debt | 2,910,136 | $ 2,910,136 | ||
Current portion of lease liability recognition | $ 128,910 |
Consolidation of Variable Int_3
Consolidation of Variable Interest Entities - Schedule of Assets, Liabilities and Non-controlling Interest Related to Strike (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Assets | $ 63,686 | $ 177,352 |
Liabilities | 55,171 | 95,720 |
Non-controlling interest | $ (460,101) | $ (440,883) |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Mar. 26, 2019 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Aug. 31, 2016 |
Revolving line of credit | $ 8,713,000 | $ 8,204,000 | |||
Repayment of new loan | $ 6,706,623 | $ 7,934,415 | |||
Line of credit, interest rate | 9.376% | ||||
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. | ||||
6% Demand Promissory Notes [Member] | John Keeler [Member] | |||||
Debt instrument, principal amount | $ 2,910,000 | ||||
Debt instrument, interest rate | 6.00% | ||||
Debt instrument, interest paid | $ 43,700 | ||||
Debt instrument, payment terms | If an event of default occurs under the notes, interest will accrue at 18% per annum and if not paid within 10 days of payment becoming due, the holder of the note is entitled to a late fee of 5% of the amount of payment not timely made. | ||||
Four Month Promissory Notes [Member] | Kenar Overseas Corp [Member] | |||||
Debt instrument, principal amount | $ 1,000,000 | ||||
Debt instrument, interest rate | 18.00% | ||||
Debt instrument, increase in interest rate | 24.00% | ||||
Four Month Promissory Notes [Member] | John Keeler [Member] | Kenar Overseas Corp [Member] | |||||
Number of shares pledged to secure company's obligation | 5,000,000 | ||||
ACF Finco I LP [Member] | |||||
Revolving line of credit | $ 14,000,000 | ||||
Repayment of new loan | $ 309,000 | ||||
Line of credit, term | 5 years | ||||
ACF Finco I LP [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Line of credit, interest rate | 6.25% | ||||
ACF Finco I LP [Member] | Prime Rate [Member] | |||||
Line of credit, interest rate | 3.00% | ||||
ACF Finco I LP [Member] | Fixed Rate [Member] | |||||
Line of credit, interest rate | 6.50% | ||||
Mercedes-Benz Financial Services [Member] | |||||
Debt instrument, interest rate | 5.56% | 5.56% | |||
Debt monthly instalment | $ 3,000 | $ 3,000 | |||
Debt maturity date | Nov. 30, 2019 | Nov. 30, 2019 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Feb. 01, 2019 | Mar. 31, 2019 |
Dividends to preferred stockholders, shares | 14,130 | |
Dividends to preferred stockholders | $ 28,260 | |
Private Offering [Member] | One Investor [Member] | ||
Number of shares sold | 5,000 | |
Shares sold, price per share | $ 2 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Compensation expense | $ 665,028 | ||
Option granted during period | 705,000 | ||
Estimated fair value of option granted during period | $ 613,587 | ||
Contractors [Member] | |||
Optiion to purchase of common stock | 25,000 | ||
Exercise price | $ 2 | ||
Option term | 10 years | ||
Stock option vesting percentage | 25.00% | ||
2018 Plan [Member] | Christopher Constable [Member] | |||
Optiion to purchase of common stock | 3,120,000 | ||
Exercise price | $ 2 | ||
Option term | 10 years | ||
Stock option vesting term | 1 year | ||
2018 Plan [Member] | Long Term Employees [Member] | |||
Optiion to purchase of common stock | 430,000 | ||
Exercise price | $ 2 | ||
Option term | 10 years | ||
Stock option vesting percentage | 25.00% | ||
2018 Plan [Member] | Zoty Ponce [Member] | |||
Optiion to purchase of common stock | 250,000 | ||
Exercise price | $ 2 | ||
Option term | 10 years | ||
Stock option vesting percentage | 20.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Fair Value of Stock Options (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Expected Volatility, Minimum | 39.00% |
Expected Volatility, Maximum | 48.00% |
Risk Free Interest Rate, Minimum | 2.62% |
Risk Free Interest Rate, Maximum | 2.71% |
Minimum [Member] | |
Expected life of warrants | 6 years 2 months 30 days |
Maximum [Member] | |
Expected life of warrants | 10 years |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Option, Outstanding beginning | shares | 6,240,000 |
Number of Option, Exercisable beginning | shares | 3,120,000 |
Number of Option, Granted | shares | 705,000 |
Number of Option, Vested | shares | |
Number of Option, Outstanding ending | shares | 6,945,000 |
Number of Option, Exercisable ending | shares | 3,120,000 |
Weighted Average Exercise Price, Outstanding beginning | $ / shares | $ 1.17 |
Weighted Average Exercise Price, Exercisable beginning | $ / shares | 0.33 |
Weighted Average Exercise Price, Granted | $ / shares | 2 |
Weighted Average Exercise Price, Vested | $ / shares | |
Weighted Average Exercise Price, Outstanding ending | $ / shares | 1.25 |
Weighted Average Exercise Price, Exercisable ending | $ / shares | $ 0.33 |
Weighted Average Remaining Contractual Life in Years, Outstanding beginning | 9 years 10 months 10 days |
Weighted Average Remaining Contractual Life in Years, Exercisable beginning | 9 years 10 months 10 days |
Weighted Average Remaining Contractual Life in Years, Outstanding ending | 9 years 7 months 21 days |
Weighted Average Remaining Contractual Life in Years, Exercisable ending | 9 years 7 months 13 days |
Aggregate Intrinsic value, Outstanding ending | $ | $ 5,210,400 |
Aggregate Intrinsic value, Exercisable ending | $ | $ 5,210,400 |
Warrants (Details Narrative)
Warrants (Details Narrative) | 3 Months Ended |
Mar. 31, 2019shares | |
Warrants | |
Number of warrants granted |
Warrants - Schedule of Warrant
Warrants - Schedule of Warrant Activity (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Warrants | |
Number of Shares, Warrants Outstanding Beginning | shares | 353,250 |
Number of Shares, Warrants Exercisable Beginning | shares | 353,250 |
Number of Shares, Warrants granted | shares | |
Number of Shares, Warrants Forfeited or Expired | shares | |
Number of Shares, Warrants Outstanding Ending | shares | 353,250 |
Number of Shares, Warrants Exercisable Ending | shares | 353,250 |
Weighted Average Exercise Price Outstanding Beginning | $ / shares | $ 2.40 |
Weighted Average Exercise Price Exercisable, Beginning | $ / shares | 2.40 |
Weighted Average Exercise Price granted | $ / shares | |
Weighted Average Exercise Price Forfeited or Expired | $ / shares | |
Weighted Average Exercise Price Outstanding Ending | $ / shares | 2.40 |
Weighted Average Exercise Price Exercisable Ending | $ / shares | $ 2.40 |
Weighted Average Remaining Contractual Life Warrants Outstanding, Beginning | 2 years 10 months 6 days |
Weighted Average Remaining Contractual Life Warrants Exercisable, Beginning | 2 years 10 months 6 days |
Weighted Average Remaining Contractual Life Warrants Exercisable, Ending | 2 years 7 months 10 days |
Aggregate Intrinsic Value Exercisable | $ | |
Aggregate Intrinsic Value Exercisable | $ |
Commitment and Contingencies (D
Commitment and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Lease term | 20 years | |
Lease expiration | Jul. 31, 2021 | |
Mortgage amount | $ 1,298,100 | |
Rental and equipment lease expenses | $ 58,500 | $ 53,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 09, 2019 | May 07, 2019 | May 06, 2019 | May 02, 2019 | Apr. 23, 2019 | Apr. 12, 2019 | Apr. 02, 2019 | Feb. 01, 2019 | Apr. 02, 2019 |
One Investor [Member] | Private Offering [Member] | |||||||||
Number of shares sold | 5,000 | ||||||||
Shares sold, price per share | $ 2 | ||||||||
Subsequent Event [Member] | One Investor [Member] | Private Offering [Member] | |||||||||
Number of shares sold | 3,000 | 500 | 500 | 1,000 | 5,000 | ||||
Shares sold, price per share | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | $ 2 | |||
Subsequent Event [Member] | Accredited Investor [Member] | Private Offering [Member] | |||||||||
Number of shares sold | 1,000 | ||||||||
Shares sold, price per share | $ 2 | ||||||||
Subsequent Event [Member] | MEC Consulting [Member] | |||||||||
Shares sold, price per share | $ 2 | ||||||||
Stock issued during period for services | 2,500 | ||||||||
Subsequent Event [Member] | Four Month Promissory Notes [Member] | Lobo Holdings, LLC [Member] | |||||||||
Debt instrument, principal amount | $ 100,000 | $ 100,000 | |||||||
Debt instrument, interest rate | 18.00% | 18.00% | |||||||
Number of shares pledged to secure company's obligation | 1,000,000 |