Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Jul. 02, 2020 | |
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, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 18,615,971 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
CURRENT ASSETS | ||
Cash (including VIE $9,196 and $8,725, respectively) | $ 22,959 | $ 153,904 |
Restricted Cash | 33,486 | 41,906 |
Accounts receivable, net (including VIE $23,818 and $20,321, respectively) | 1,921,761 | 2,071,363 |
Inventory, net (including VIE $77,419 and $95,441, respectively) | 4,784,499 | 7,984,492 |
Advances to related party | 1,301,934 | 1,285,935 |
Other current assets (including VIE $3,299 and $3,679, respectively) | 219,291 | 242,700 |
Total current assets | 8,283,930 | 11,780,300 |
FIXED ASSETS, net | 65,993 | 61,908 |
RIGHT OF USE ASSET | 1,190,706 | 1,206,931 |
INTANGIBLE ASSETS, net | ||
Trademarks | 831,112 | 845,278 |
Customer Relationships | 1,217,948 | 1,241,667 |
Non-Compete Agreements | 36,668 | 39,167 |
Goodwill | 445,395 | 445,395 |
Total Intangible Assets | 2,531,123 | 2,571,507 |
OTHER ASSETS | 161,068 | 125,418 |
TOTAL ASSETS | 12,232,820 | 15,746,064 |
CURRENT LIABILITIES | ||
Accounts payable and accruals (including VIE $4,849 and $30,649, respectively) | 2,759,934 | 3,528,466 |
Working capital line of credit | 4,989,374 | 6,917,968 |
Current maturities of Lease Liabilities | 162,112 | 136,952 |
Current maturities of Related Party Long-Term Note | 100,000 | 100,364 |
Related Party Notes Payable | 972,500 | 972,500 |
Related Party Notes Payable - Subordinated | 2,910,136 | 2,910,136 |
Total current liabilities | 11,894,056 | 14,566,386 |
LONG -TERM LIABILITY | ||
Long-Term Lease Liability | 1,052,671 | 1,089,390 |
Related Party Long-Term Note | 610,000 | 610,000 |
TOTAL LIABILITIES | 13,556,727 | 16,265,776 |
Blue Star Foods Corp. Stockholders 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, 2020 and December 31, 2019 | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 17,603,835 shares issued and outstanding (including 14,130 shares declared as a stock dividend on December 31, 2019 and 14,130 shares declared as a stock dividend on March 31, 2020) as of March 31, 2020 and 17,289,705 shares issued and outstanding (including 14,130 shares declared as a stock dividend on September 30, 2019 and 14,130 shares declared as a stock dividend on December 31, 2019) as of December 31, 2019 | 1,762 | 1,761 |
Additional paid-in capital | 8,852,125 | 8,789,021 |
Accumulated deficit | (9,831,132) | (8,952,466) |
Total Blue Star Foods Corp. stockholders deficit | (977,245) | (161,684) |
Non-controlling interest | (479,490) | (476,250) |
Accumulated other comprehensive income (VIE) | 132,828 | 118,222 |
Total VIE's deficit | (346,662) | (358,028) |
TOTAL STOCKHOLDERS DEFICIT | (1,323,907) | (519,712) |
TOTAL LIABILITIES AND STOCKHOLDERS DEFICIT | $ 12,232,820 | $ 15,746,064 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Preferred stock dividend percentage | 8.00% | ||
Common stock, par value | $ 0.0001 | $ 0.0001 | |
Common stock, shares authorized | 100,000,000 | 100,000,000 | |
Common stock, shares issued | 17,603,835 | 17,289,705 | |
Common stock, shares outstanding | 17,603,835 | 17,289,705 | |
Common stock dividend shares | 14,130 | 14,130 | 14,130 |
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 | |
Preferred stock dividend percentage | 8.00% | 8.00% | |
Accounts Payable and Accruals [Member] | |||
Current liabilities of VIE | $ 4,849 | $ 30,649 | |
Other Current Assets [Member] | |||
Current assets attributable to VIE | 3,299 | 3,679 | |
Inventory [Member] | |||
Current assets attributable to VIE | 77,419 | 95,441 | |
Accounts Receivable [Member] | |||
Current assets attributable to VIE | 23,818 | 20,321 | |
Cash [Member] | |||
Current assets attributable to VIE | $ 9,196 | $ 8,725 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
REVENUE, NET | $ 4,571,614 | $ 6,510,774 |
COST OF REVENUE (including approximately $110,298 and $2,114,500 respectively, purchased from related party) | 4,148,398 | 5,600,914 |
GROSS PROFIT | 423,216 | 909,860 |
COMMISSIONS | 66,829 | 18,810 |
SALARIES & WAGES | 409,181 | 1,116,748 |
OTHER OPERATING EXPENSES | 524,198 | 775,406 |
LOSS FROM OPERATIONS | (576,992) | (1,001,104) |
INTEREST EXPENSE | (276,655) | (238,193) |
NET LOSS | (853,647) | (1,239,297) |
LESS: NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | (3,240) | (19,268) |
NET LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | (850,407) | (1,220,029) |
DIVIDEND ON PREFERRED STOCK | 28,259 | 28,260 |
NET LOSS ATTRIBUABLE TO BLUE STAR FOODS CORP. COMMON STOCKHOLDERS | (878,666) | (1,248,289) |
COMPREHENSIVE LOSS: | ||
TRANSLATION ADJUSTMENT ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 14,606 | (53,850) |
COMPREHENSIVE LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST | 11,366 | (73,118) |
COMPREHENSIVE LOSS ATTRIBUTABLE TO BLUE STAR FOODS CORP. | $ (850,407) | $ (1,220,029) |
Loss per basic and diluted common share: | ||
Basic net loss per common share | $ (0.05) | $ (0.08) |
Basic weighted average common shares outstanding | 17,589,705 | 16,026,386 |
Fully diluted net loss per common share | $ (0.05) | $ (0.08) |
Fully diluted weighted average common shares outstanding | 17,589,705 | 16,026,386 |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cost of revenue | $ 4,148,398 | $ 5,600,914 |
Related Party [Member] | ||
Cost of revenue | $ 110,298 | $ 2,114,500 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Deficit (Unaudited) - USD ($) | Series A Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total Blue Star Foods Corp. Stockholder's Deficit [Member] | Non-Controlling Interest [Member] | Total |
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 | 9,999 | 10,000 | 10,000 | |||
Common stock issued for cash, shares | 5,000 | ||||||
Stock Based Compensation | 665,028 | 665,028 | 665,028 | ||||
Series A Preferred 8% dividend issued in common stock | $ 2 | 28,258 | (28,260) | ||||
Series A Preferred 8% dividend issued in common stock, shares | 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 | |||||
Balance at Dec. 31, 2019 | $ 1,761 | 8,789,021 | (8,952,466) | (161,684) | (358,028) | (519,712) | |
Balance, shares at Dec. 31, 2019 | 1,413 | 17,589,705 | |||||
Stock Based Compensation | 34,846 | 34,846 | 34,846 | ||||
Series A Preferred 8% dividend issued in common stock | $ 1 | 28,258 | (28,259) | 0 | |||
Series A Preferred 8% dividend issued in common stock, shares | 14,130 | ||||||
Net Loss | (850,407) | (850,407) | (3,240) | (853,647) | |||
Comprehensive loss | 14,606 | 14,606 | |||||
Balance at Mar. 31, 2020 | $ 1,762 | $ 8,852,125 | $ (9,831,132) | $ (977,245) | $ (346,662) | $ (1,323,907) | |
Balance, shares at Mar. 31, 2020 | 1,413 | 17,603,835 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders Deficit (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock dividend percentage | 8.00% | |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock dividend percentage | 8.00% | 8.00% |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net Loss | $ (853,647) | $ (1,239,297) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 34,846 | 665,028 |
Depreciation of fixed assets | 9,145 | 17,005 |
Amortization of right of use asset | 43,730 | 37,468 |
Amortization of intangible assets | 40,384 | |
Amortization of loan costs | 25,988 | 35,998 |
Deferred Taxes | 8,362 | |
Allowance for inventory obsolescence | 146,853 | |
Changes in operating assets and liabilities: | ||
Receivables | 149,602 | 174,170 |
Inventories | 3,053,140 | (491,548) |
Advances to affiliated supplier | (15,999) | (121,849) |
Other current assets | 23,409 | (4,237) |
Change in right of use liability | (39,064) | (32,615) |
Accounts payable and accruals | (768,896) | (728,590) |
Net cash provided by (used) in operating activities | 1,857,853 | (1,688,467) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of fixed assets | (13,230) | (3,670) |
Net cash used in investing activities | (13,230) | (3,670) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from common stock offering | 10,000 | |
Proceeds from working capital lines of credit | 2,407,538 | 7,215,843 |
Repayments of working capital lines of credit | (4,336,132) | (6,706,623) |
Proceeds from Related Party Notes Payable | 1,000,000 | |
Principal payments of long-term debt | (6,072) | |
Payments of Loan costs | (70,000) | (10,000) |
Net provided by (used in) financing activities | (1,998,594) | 1,503,148 |
Effect of exchange rate changes on cash | 14,606 | (53,850) |
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (139,365) | (242,839) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH- BEGINNING OF PERIOD | 195,810 | 347,226 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD | 56,445 | 104,387 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY | ||
Series A 8% Dividend issued in Common Stock | 28,259 | 28,260 |
Valuation of Right of Use asset/liability | 28,137 | 1,257,751 |
Supplemental Disclosure of Cash Flow Information | ||
Cash paid for interest | $ 276,655 | $ 238,367 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Preferred stock, dividend percentage | 8.00% | |
Series A Common Stock [Member] | ||
Preferred stock, dividend percentage | 8.00% | 8.00% |
Company Overview
Company Overview | 3 Months Ended |
Mar. 31, 2020 | |
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-five 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, Canada and Europe under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh. On November 26, 2019, John Keeler & Co., Inc., a Florida corporation (the “Purchaser”), and wholly-owned direct subsidiary of the Company, entered into an Agreement and Plan of Merger and Reorganization (the “Coastal Merger Agreement”) with Coastal Pride Company, Inc., a South Carolina corporation (“Coastal Pride”), Coastal Pride Seafood, LLC, a Florida limited liability company and newly-formed, wholly-owned subsidiary of the Purchaser (the “Acquisition Subsidiary” and, upon the effective date of the Merger, the “Surviving Company), and The Walter F. Lubkin, Jr. Irrevocable Trust dated January 8, 2003 (the “Trust”), Walter F. Lubkin III (“Lubkin III”), Tracy Lubkin Greco (“Greco”) and John C. Lubkin (“Lubkin”), constituting all of the shareholders of Coastal Pride immediately prior to the Coastal Merger (collectively, the “Sellers”). Pursuant to the terms of the Coastal Merger Agreement, Coastal Pride merged with and into the Acquisition Subsidiary, with the Acquisition Subsidiary being the surviving company (the “Coastal Merger”). Coastal Pride is a seafood company, based in Beaufort, South Carolina, that imports pasteurized and fresh crabmeat sourced primarily from Mexico and Latin America and sells premium branded label crabmeat throughout North America. Pro Forma Information The following is the unaudited pro forma information assuming all business acquisitions occurred on January 1, 2019. For all of the business acquisitions depreciation and amortization have been included in the calculation of the below pro forma information based upon the actual acquisition costs. Three Months Ending Revenue $ 9,178,661 Net Loss $ (1,596,396 ) Basic and Diluted Loss per Share $ (0.10 ) Basic and Diluted Weighted Average Common Shares Outstanding 16,026,386 |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
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 (“SEC”). Accordingly, such interim financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) 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, 2019 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 Form 10-K for the year ending December 31, 2019 filed with the SEC on May 29, 2020 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, 2020 and December 31, 2019, the balance due from the related party for future shipments was approximately $1,301,900 and $1,285,900, respectively. The 2020 balances represent approximately six months of purchases from the supplier. Employee Stock-Based Compensation: The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. The Company has elected to adopt ASU 2016-09 and has a policy to account for forfeitures as they occur. Non-Employee 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. The Company accounts for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), 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. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if the Company had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service completed. Revenue Recognition Effective with the January 1, 2018 adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” and the associated ASUs (collectively, “Topic 606”), the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company elected an accounting policy to treat shipping and handling activities as fulfillment activities. Consideration payable to a customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue recognized, unless the payment is for distinct goods or services received from the customer. Lease Accounting 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 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, 2020. 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, 2020 Assets Operating lease assets $ 1,190,706 Liabilities Current $ 162,112 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,052,671 Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2020 Cash used in operating activities: Operating leases $ 39,064 ROU assets recognized in exchange for lease obligations: Operating leases $ 28,137 The table below presents the remaining lease term and discount rates for operating leases. March 31, 2020 Weighted-average remaining lease term Operating leases 5.81 years Weighted-average discount rate Operating leases 5.4 % Maturities of lease liabilities as of March 31, 2020, were as follows: Operating Leases 2020 167,477 2021 235,227 2022 247,152 2023 243,321 2024 235,203 Thereafter 336,932 Total lease payments 1,465,312 Less: amount of lease payments representing interest (250,529 ) Present value of future minimum lease payments $ 1,214,783 Less: current obligations under leases $ (162,112 ) Non-current obligations $ 1,052,671 |
Going Concern
Going Concern | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020, the Company incurred a net loss of $853,647, has an accumulated deficit of $9,831,132 and working capital deficit of $3,610,126, with the current liabilities inclusive of $2,910,136 in stockholder loans that are subordinated to the provider of the working capital facility, and $162,112 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, 2020 | |
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, 2020 and December 31, 2019. March 31, 2020 Assets $ 113,732 Liabilities 4,849 Non-controlling interest (479,490 ) December 31, 2019 Assets $ 128,166 Liabilities 30,649 Non-controlling interest (476,250 ) |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 5. Debt Working Capital Line of Credit The Company entered into a $14,000,000 revolving line of credit, pursuant to a loan and security agreement with ACF Finco I, LP (“ACF”) 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 is secured by all assets of John Keeler & Co., Inc. This facility was amended on November 18, 2016, June 19, 2017, October 16, 2017, September 19, 2018, November 8, 2018, July 29, 2019, and November 26, 2019. The line of credit bears an interest rate equal to the greater of 3 Month LIBOR rate plus 9.25%, the Prime rate plus 6.0% or a fixed rate of 6.5%. The ACF 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 ACF to call the note upon a material adverse change. On November 26, 2019, Inc. the Company entered into the seventh amendment to the loan and security agreement with ACF. This amendment memorialized the acquisition of Coastal Pride Seafood, LLC, made Coastal Pride Seafood, LLC a co-borrower to the facility. Additionally, the seventh amendment waived and reset the covenant default that occurred during 2019, extended the term of the facility to 5 years 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 remaining unchanged As of March 31, 2020, the line of credit bears interest rate of 10.83% As of March 31, 2020 and December 31, 2019, the line of credit had an outstanding balance of approximately $4,989,400 and $6,918,000, respectively. John Keeler Promissory Notes - Subordinated The Company had unsecured promissory notes outstanding to its stockholder of approximately $2,910,000 as of March 31, 2020 and December 31, 2019. These notes are payable on demand, bear an annual interest rate of 6% and are subordinated to the AFS working capital line of credit. Principle payments are not allowed under the subordination agreement with AFS that was effective August 31, 2016. No principal payments were made by the Company during the three months ended March 31, 2020 or the twelve months ended December 31, 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 a company controlled by a shareholder, Kenar Overseas Corp., a company registered in Panama (the “Lender”) the term of which was previously extended to March 31, 2020 after which time, on May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender’s sole option), (ii) provide that the Company use one-third of any capital raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18% per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr. Keeler to 4,000,000. As consideration therefor, the Company has agreed to issue 1,021,266 shares of its Common Stock to Kenar. The outstanding principal amount of the note at March 31, 2020 was $872,500. Lobo Note On April 2, 2019, the Company issued a four-month unsecured promissory note in the principal amount of $100,000 (the “Lobo Note”) to Lobo Holdings, LLC, a stockholder in the Company (“Lobo”). The Lobo Note bears interest at the rate of 18% per annum. The Lobo Note may be prepaid in whole or in part without penalty. John Keeler, the Company’s Executive Chairman and Chief Executive Officer, pledged 1,000,000 shares of common stock of the Company to secure the Company’s obligations under the Lobo Note. The Lobo Note matured on August 2, 2019 and was extended through December 2, 2019 on the same terms and conditions. On November 15, 2019, the Company paid off the Lobo Note with the issuance to Lobo of an unsecured promissory note in the principal amount of $100,000 which bears interest at the rate of 15%, which may be prepaid in whole or in part without penalty, and matures on March 31, 2020. On April 1, 2020 the Company paid off the November 15, 2019 Lobo Note with the issuance of a 6 month unsecured promissory note with a principal amount of $100,000, bearing an interest rate of 10%. This note may be prepaid in whole or in part without penalty. Walter Lubkin Jr. Note - Subordinated On November 26, 2019, the Company issued a five year unsecured promissory note in the principal amount of $500,000 to Walter Lubkin Jr. as part of the purchase price for the Coastal Pride acquisition. The note bears interest at the rate of 4% per annum. The note is payable quarterly in an amount equal to the lesser of (i) $25,000 or (ii) 25% of the EBITDA of Coastal Pride, as determined on the first day of each quarter. The first payment was scheduled for February 26, 2020, however, the EBITDA generated for Coastal during the three months did not warrant a principal payment. This note is subordinate to the ACF working capital line of credit. Principal payments are allowed under the subordination agreement with ACF that was effective November 26, 2019 so long as the borrower is not in default under the loan and security agreement with ACF. No principal payments were made by the Company during the three months ending March 31, 2020. Walter Lubkin III Convertible Note - Subordinated On November 26, 2019, the Company issued a thirty-nine month unsecured promissory note in the principal amount of $87,842 to Walter Lubkin III as part the purchase price for the Coastal Pride acquisition. The note bears interest at the rate of 4% per annum. The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. At the election of the holder, at any time after the first anniversary of the issuance of the note, the then outstanding principal and accrued interest may be converted into the Company’s common stock at a rate of $2.00 per share. This note is subordinated to the ACF working capital line of credit. Principle payments are allowed under the subordination agreement with ACF that was effective November 26, 2019 so long as the borrower is not in default under the loan and security agreement with ACF. No principal payments were made by the Company during the three months ended March 31, 2020. Tracy Greco Convertible Note - Subordinated On November 26, 2019, the Company issued a thirty-nine month unsecured promissory note in the principal amount of $71,372 to Tracy Greco as part of the purchase price for the Coastal Pride acquisition The note bears interest at the rate of 4% per annum. The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. At the election of the holder, at any time after the first anniversary of the issuance of the note, the then outstanding principal and accrued interest may be converted into the Company’s common stock at a rate of $2.00 per share. This note is subordinated to the ACF working capital line of credit. Principle payments are allowed under the subordination agreement with ACF that was effective November 26, 2019 so long as the borrower is not in default under the loan and security agreement with ACF. No principal payments were made by the Company during the three months ended March 31, 2020. John Lubkin Convertible Note – Subordinated On November 26, 2019, the Company issued a thirty-nine month unsecured promissory note in the principal amount of $50,786 to John Lubkin. as part the Coastal Pride acquisition. The note bears interest at the rate of 4% per annum. The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. At the election of the holder, at any time after the first anniversary of the issuance of the note, the then outstanding principal and accrued interest may be converted into the Company’s common stock at a rate of $2.00 per share. This note is subordinated to the ACF working capital line of credit. Principle payments are allowed under the subordination agreement that was effective November 26, 2019 so long as the borrower is not in default under the loan and security agreement with ACF. No principal payments were made by the Company during the three months ended March 31, 2020. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Common Stock | Note 6. Common Stock On January 23, 2020, an aggregate of 14,130 shares of common stock were issued to the Series A Preferred stockholders as a common stock dividend with an aggregate value of $28,259. |
Options
Options | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Options | Note 7. Options The following Table represents option activity for the three months ended March 31, 2020: Number of Options Weighted Weighted Average Remaining Contractual Aggregate Intrinsic Outstanding - December 31, 2019 3,810,000 $ 2.00 8.86 Exercisable - December 31, 2019 3,120,000 $ 2.00 8.86 $ - Granted - $ - Forfeited - $ - Vested 3,280,000 Outstanding - March 31, 2020 3,810,000 $ 2.00 8.65 Exercisable - March 31, 2020 3,280,000 $ 2.00 8.62 $ - There was no option activity for the three months ending March 31,2020. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | Note 8. Warrants The following table represents warrant activity for the three month period ended March 31, 2020: Number of Warrants Weighted Weighted Average Remaining Contractual Aggregate Intrinsic Outstanding - December 31, 2019 353,250 $ 2.40 1.85 Exercisable - December 31, 2019 353,250 $ 2.40 1.85 $ - Granted - $ - Forfeited or Expired - Outstanding - March 31, 2020 353,250 $ 2.40 1.61 Exercisable - March 31, 2020 353,250 $ 2.40 1.61 $ - There was no warrant activity for the three months ending March 31, 2020. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Note 9. Commitment and Contingencies Office lease The Company leases its Miami 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. The Company is a guarantor of the mortgage on the facility which had a balance of approximately $1,259,300 at March 31, 2020; the Company’s maximum exposure. 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 The Company leases approximately 3,000 square feet in Beaufort, South Carolina for the offices of Coastal Pride Seafood, LLC. This office space consists of two leases with related parties with approximately 6 years remaining on the leases. Rental and equipment lease expenses amounted to approximately $63,500 and $58,500 for the three months ended March 31, 2020 and 2019, respectively. Legal The Company has reached a settlement agreement with a former employee. Although the agreement is not finalized the Company has reserved for the entire amount of the settlement. |
COVID-19 Pandemic
COVID-19 Pandemic | 3 Months Ended |
Mar. 31, 2020 | |
Covid-19 Pandemic | |
COVID-19 Pandemic | Note 10. COVID-19 Pandemic On March 11, 2020, the World Health Organization declared that the novel coronavirus (COVID-19) had become a pandemic, and on March 13, 2020, the U.S. President declared a National Emergency concerning the disease. Additionally, in March 2020, state governments began instituting preventative shut down measures in order to combat the novel coronavirus pandemic. The coronavirus and actions taken to mitigate its spread have had and are expected to continue to have an adverse impact on the economies and financial markets of the geographical area in which the Company operates. We do not currently know the full affect of COVID-19 on our operations. Our sales and supply may continue to be adversely affected due to, among other things, decreased demand and ability to source adequate product. The Company has enacted measures to reduce expenses to coincide with the potential reduction in demand. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events On April 17, 2020, the Company entered into an unsecured promissory note with US Century Bank in the principal amount of $344,762 related to the CARES Act Payroll Protection Program. This note is fully guaranteed by the Small Business Administration and may be forgivable provided that certain criteria are met. The interest rate on the loan is 1%, and the note has a two year maturity. The Company is required to make payments on the remaining principal of the note net of any loan forgiveness beginning November 17, 2020. On May 7, 2020, the Company entered into an eighth amendment to the loan and security agreement with ACF. This amendment acknowledged the execution of the Payroll Protection Program loan, provided a reservation of rights related to a default of the minimum EBITDA covenant, and increased the default interest rate an additional 3%. On May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender’s sole option), (ii) provide that the Company use one-third of any capital raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18% per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr. Keeler to 4,000,000. As consideration therefor, on May 27, 2020, the Company issued 1,021,266 shares of its common stock to Kenar. On April 1, 2020, the Company issued a six-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 10% per annum. The note may be prepaid in whole or in part without penalty. This note paid in full $100,000 which was outstanding under a promissory note with Lobo Holdings, LLC,. dated November 15, 2019. On May 27, 2020, an aggregate of 14,130 shares of common stock with a value of $28,261 were issued to Series A Preferred stockholders as a common stock dividend related to the December 31, 2019 dividends payable. On May 27, 2020, the Company issued 5,000 shares of common stock to an accredited investor in a private offering for $10,000. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
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 (“SEC”). Accordingly, such interim financial statements do not include all the information and footnotes required by accounting principles generally accepted in the United States (“GAAP”) 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, 2019 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 Form 10-K for the year ending December 31, 2019 filed with the SEC on May 29, 2020 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, 2020 and December 31, 2019, the balance due from the related party for future shipments was approximately $1,301,900 and $1,285,900, respectively. The 2020 balances represent approximately six months of purchases from the supplier. |
Employee Stock-Based Compensation | Employee Stock-Based Compensation: The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost of employee services received in exchange for an award of equity instruments, including stock options, based on the grant-date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service in exchange for the award, usually the vesting period. The Company has elected to adopt ASU 2016-09 and has a policy to account for forfeitures as they occur. |
Non-Employee Stock-Based Compensation | Non-Employee 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. The Company accounts for stock-based compensation awards to non-employees in accordance with ASU No. 2018-07, Compensation – Stock Based Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”), 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. All issuances of stock options or other equity instruments to non-employees as consideration for goods or services received by the Company are accounted for based on the fair value of the equity instruments issued. Non-employee equity-based payments are recorded as an expense over the service period, as if the Company had paid cash for the services. At the end of each financial reporting period, prior to vesting or prior to the completion of the services, the fair value of the equity-based payments will be re-measured and the non-cash expense recognized during the period will be adjusted accordingly. Since the fair value of equity-based payments granted to non-employees is subject to change in the future, the amount of the future expense will include fair value re-measurements until the equity-based payments are fully vested or the service completed. |
Revenue Recognition | Revenue Recognition Effective with the January 1, 2018 adoption of ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” and the associated ASUs (collectively, “Topic 606”), the Company recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for the arrangements that the Company determines are within the scope of Topic 606, the Company performs the following five steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company elected an accounting policy to treat shipping and handling activities as fulfillment activities. Consideration payable to a customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue recognized, unless the payment is for distinct goods or services received from the customer. |
Lease Accounting | Lease Accounting 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 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, 2020. 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, 2020 Assets Operating lease assets $ 1,190,706 Liabilities Current $ 162,112 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,052,671 Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2020 Cash used in operating activities: Operating leases $ 39,064 ROU assets recognized in exchange for lease obligations: Operating leases $ 28,137 The table below presents the remaining lease term and discount rates for operating leases. March 31, 2020 Weighted-average remaining lease term Operating leases 5.81 years Weighted-average discount rate Operating leases 5.4 % Maturities of lease liabilities as of March 31, 2020, were as follows: Operating Leases 2020 167,477 2021 235,227 2022 247,152 2023 243,321 2024 235,203 Thereafter 336,932 Total lease payments 1,465,312 Less: amount of lease payments representing interest (250,529 ) Present value of future minimum lease payments $ 1,214,783 Less: current obligations under leases $ (162,112 ) Non-current obligations $ 1,052,671 |
Company Overview (Tables)
Company Overview (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Unaudited Pro Forma Information | Three Months Ending Revenue $ 9,178,661 Net Loss $ (1,596,396 ) Basic and Diluted Loss per Share $ (0.10 ) Basic and Diluted Weighted Average Common Shares Outstanding 16,026,386 |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 Assets Operating lease assets $ 1,190,706 Liabilities Current $ 162,112 Operating lease liabilities Noncurrent Operating lease liabilities $ 1,052,671 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases were as follows: Three Months Ended March 31, 2020 Cash used in operating activities: Operating leases $ 39,064 ROU assets recognized in exchange for lease obligations: Operating leases $ 28,137 |
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, 2020 Weighted-average remaining lease term Operating leases 5.81 years Weighted-average discount rate Operating leases 5.4 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of March 31, 2020, were as follows: Operating Leases 2020 167,477 2021 235,227 2022 247,152 2023 243,321 2024 235,203 Thereafter 336,932 Total lease payments 1,465,312 Less: amount of lease payments representing interest (250,529 ) Present value of future minimum lease payments $ 1,214,783 Less: current obligations under leases $ (162,112 ) Non-current obligations $ 1,052,671 |
Consolidation of Variable Int_2
Consolidation of Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and December 31, 2019. March 31, 2020 Assets $ 113,732 Liabilities 4,849 Non-controlling interest (479,490 ) December 31, 2019 Assets $ 128,166 Liabilities 30,649 Non-controlling interest (476,250 ) |
Options (Tables)
Options (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock Option Activity | The following Table represents option activity for the three months ended March 31, 2020: Number of Options Weighted Weighted Average Remaining Contractual Aggregate Intrinsic Outstanding - December 31, 2019 3,810,000 $ 2.00 8.86 Exercisable - December 31, 2019 3,120,000 $ 2.00 8.86 $ - Granted - $ - Forfeited - $ - Vested 3,280,000 Outstanding - March 31, 2020 3,810,000 $ 2.00 8.65 Exercisable - March 31, 2020 3,280,000 $ 2.00 8.62 $ - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of Warrant Activity | The following table represents warrant activity for the three month period ended March 31, 2020: Number of Warrants Weighted Weighted Average Remaining Contractual Aggregate Intrinsic Outstanding - December 31, 2019 353,250 $ 2.40 1.85 Exercisable - December 31, 2019 353,250 $ 2.40 1.85 $ - Granted - $ - Forfeited or Expired - Outstanding - March 31, 2020 353,250 $ 2.40 1.61 Exercisable - March 31, 2020 353,250 $ 2.40 1.61 $ - |
Company Overview - Schedule of
Company Overview - Schedule of Unaudited Pro Forma Information (Details) - John Keeler & Co., Inc. [Member] - Shareholder [Member] | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Revenue | $ 9,178,661 |
Net Loss | $ (1,596,396) |
Basic and Diluted Loss per Share | $ / shares | $ (0.10) |
Basic and Diluted Weighted Average Common Shares Outstanding | shares | 16,026,386 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Due from related party for future shipments | $ 1,301,900 | $ 1,285,900 |
Equipment [Member] | ||
Finance lease term | 3 years | |
Property [Member] | Minimum [Member] | ||
Finance lease term | 5 years | |
Property [Member] | Maximum [Member] | ||
Finance 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, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Operating lease assets | $ 1,190,706 | $ 1,206,931 |
Operating lease liabilities - Current | 162,112 | 136,952 |
Operating lease liabilities - Noncurrent | $ 1,052,671 | $ 1,089,390 |
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, 2020USD ($) | |
Accounting Policies [Abstract] | |
Cash used in operating activities, Operating leases | $ 39,064 |
ROU assets recognized in exchange for lease obligations, Operating leases | $ 28,137 |
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, 2020 |
Accounting Policies [Abstract] | |
Weighted-average remaining lease term, Operating leases | 5 years 9 months 22 days |
Weighted-average discount rate, Operating leases | 5.40% |
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, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
2020 | $ 167,477 | |
2021 | 235,227 | |
2022 | 247,152 | |
2023 | 243,321 | |
2024 | 235,203 | |
Thereafter | 336,932 | |
Total lease payments | 1,465,312 | |
Less: amount of lease payments representing interest | (250,529) | |
Present value of future minimum lease payments | 1,214,783 | |
Less: current obligations under leases | (162,112) | $ (136,952) |
Non-current obligations | $ 1,052,671 | $ 1,089,390 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net income (loss) | $ (853,647) | $ (1,239,297) | |
Accumulated deficit | (9,831,132) | $ (8,952,466) | |
Working capital deficit | 3,610,126 | ||
Subordinated stockholder debt | 2,910,136 | 2,910,136 | |
Current portion of lease liability recognition | $ 162,112 | $ 136,952 |
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, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Assets | $ 113,732 | $ 128,166 |
Liabilities | 4,849 | 30,649 |
Non-controlling interest | $ (479,490) | $ (476,250) |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | May 27, 2020 | May 21, 2020 | Nov. 26, 2019 | Nov. 15, 2019 | Apr. 02, 2019 | Mar. 26, 2019 | Mar. 26, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 02, 2020 | Dec. 31, 2019 | Aug. 31, 2016 |
Revolving line of credit | $ 4,989,400 | $ 6,918,000 | ||||||||||
Repayment of new loan | $ 4,336,132 | $ 6,706,623 | ||||||||||
Line of credit, interest rate | 10.83% | |||||||||||
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. | |||||||||||
Line of credit, term | 5 years | |||||||||||
Debt EBITDA covenant | $ 102,000 | |||||||||||
EBITDA covenant, description | During the three months ended March 31, 2020 the Company was in violation of its minimum EBITDA covenant as well as exceeding the covenant related to monies advanced to Bacolod by approximately $102,000. | |||||||||||
Kenar Overseas Corp [Member] | Subsequent Event [Member] | ||||||||||||
Debt instrument, interest rate | 18.00% | |||||||||||
Debt maturity date | Mar. 31, 2021 | |||||||||||
Description on maturity date | The Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender's sole option) | |||||||||||
Extended maturity date | Sep. 30, 2021 | |||||||||||
Issuance of common stock, shares | 1,021,266 | |||||||||||
Debt instrument, description | The Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender's sole option), (ii) provide that the Company use one-third of any capital raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18% per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr. Keeler to 4,000,000. | |||||||||||
6% Demand Promissory Notes [Member] | John Keeler [Member] | ||||||||||||
Debt instrument, principal amount | $ 2,910,000 | $ 2,910,000 | ||||||||||
Debt instrument, interest rate | 6.00% | 6.00% | ||||||||||
Kenar Note [Member] | Kenar Overseas Corp [Member] | ||||||||||||
Debt instrument, principal amount | $ 1,000,000 | $ 1,000,000 | $ 872,500 | |||||||||
Debt instrument, interest rate | 18.00% | 18.00% | ||||||||||
Debt maturity date | Mar. 31, 2021 | |||||||||||
Description on maturity date | The term of which was previously extended to March 31, 2020 after which time, on May 21, 2020, the Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender's sole option), | |||||||||||
Extended maturity date | Sep. 30, 2021 | |||||||||||
Number of shares pledged to secure company's obligation | 4,000,000 | |||||||||||
Issuance of common stock, shares | 1,021,266 | |||||||||||
Lobo Note [Member] | Lobo Holdings, LLC [Member] | ||||||||||||
Debt instrument, principal amount | $ 100,000 | $ 100,000 | ||||||||||
Debt instrument, interest rate | 15.00% | 18.00% | ||||||||||
Debt maturity date | Mar. 31, 2020 | Aug. 2, 2019 | ||||||||||
Description on maturity date | The Lobo Note matured on August 2, 2019 and was extended through December 2, 2019 on the same terms and conditions. | |||||||||||
Extended maturity date | Dec. 2, 2019 | |||||||||||
Number of shares pledged to secure company's obligation | 1,000,000 | |||||||||||
Four Month Unsecured Promissory Notes [Member] | Lobo Holdings, LLC [Member] | Subsequent Event [Member] | ||||||||||||
Debt instrument, principal amount | $ 100,000 | |||||||||||
Debt instrument, interest rate | 10.00% | |||||||||||
Four Month Unsecured Promissory Notes [Member] | John Keeler [Member] | ||||||||||||
Number of shares pledged to secure company's obligation | 4,000,000 | |||||||||||
Five Year Unsecured Promissory Note [Member] | Walter Lubkin Jr [Member] | ||||||||||||
Debt EBITDA covenant | $ 25,000 | |||||||||||
EBITDA covenant, description | The note is payable quarterly in an amount equal to the lesser of (i) $25,000 or (ii) 25% of the EBITDA of Coastal Pride, as determined on the first day of each quarter. | |||||||||||
Debt instrument, principal amount | $ 500,000 | |||||||||||
Debt instrument, interest rate | 4.00% | |||||||||||
Thirty-Nine Month Unsecured Promissory Note [Member] | Walter Lubkin III [Member] | ||||||||||||
Debt instrument, principal amount | $ 87,842 | |||||||||||
Debt instrument, interest rate | 4.00% | |||||||||||
Debt instrument, description | The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. | |||||||||||
Conversion rate | 200.00% | |||||||||||
Thirty-Nine Month Unsecured Promissory Note [Member] | Tracy Greco [Member] | ||||||||||||
Debt instrument, principal amount | $ 71,372 | |||||||||||
Debt instrument, interest rate | 4.00% | |||||||||||
Debt instrument, description | The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. | |||||||||||
Conversion rate | 200.00% | |||||||||||
Thirty-Nine Month Unsecured Promissory Note [Member] | John Lubkin [Member] | ||||||||||||
Debt instrument, principal amount | $ 50,786 | |||||||||||
Debt instrument, interest rate | 4.00% | |||||||||||
Debt instrument, description | The note is payable in equal quarterly payments over six quarters beginning August 26, 2021. | |||||||||||
Conversion rate | 200.00% | |||||||||||
ACF Finco I, LP [Member] | ||||||||||||
Revolving line of credit | $ 14,000,000 | |||||||||||
Repayment of new loan | $ 309,000 | |||||||||||
ACF Finco I, LP [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||||||||
Line of credit, interest rate | 9.25% | |||||||||||
ACF Finco I, LP [Member] | Prime Rate [Member] | ||||||||||||
Line of credit, interest rate | 6.00% | |||||||||||
ACF Finco I, LP [Member] | Fixed Rate [Member] | ||||||||||||
Line of credit, interest rate | 6.50% |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Jan. 23, 2020 | Mar. 31, 2020 | Mar. 31, 2019 |
Issuance of dividend | $ 0 | ||
Series A Preferred Stock [Member] | |||
Issuance of dividend shares | 14,130 | ||
Issuance of dividend | $ 28,259 |
Options (Details Narrative)
Options (Details Narrative) | 3 Months Ended |
Mar. 31, 2020shares | |
Share-based Payment Arrangement [Abstract] | |
Number of stock option granted |
Options - Schedule of Stock Opt
Options - Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Option, Outstanding beginning | 3,810,000 |
Number of Option, Exercisable beginning | 3,120,000 |
Number of Option, Granted | |
Number of Option, Forfeited | |
Number of Option, Vested | 3,280,000 |
Number of Option, Outstanding ending | 3,810,000 |
Number of Option, Exercisable ending | 3,280,000 |
Weighted Average Exercise Price, Outstanding beginning | $ / shares | $ 2 |
Weighted Average Exercise Price, Exercisable beginning | $ / shares | 2 |
Weighted Average Exercise Price, Granted | $ / shares | |
Weighted Average Exercise Price, Forfeited | $ / shares | |
Weighted Average Exercise Price, Outstanding ending | $ / shares | 2 |
Weighted Average Exercise Price, Exercisable ending | $ / shares | $ 2 |
Weighted Average Remaining Contractual Life in Years, Outstanding beginning | 8 years 10 months 10 days |
Weighted Average Remaining Contractual Life in Years, Exercisable beginning | 8 years 10 months 10 days |
Weighted Average Remaining Contractual Life in Years, Outstanding ending | 8 years 7 months 24 days |
Weighted Average Remaining Contractual Life in Years, Exercisable ending | 8 years 7 months 13 days |
Aggregate Intrinsic value, Exercisable beginning | $ | |
Aggregate Intrinsic value, Exercisable ending | $ |
Warrants (Details Narrative)
Warrants (Details Narrative) | 3 Months Ended |
Mar. 31, 2020shares | |
Warrants and Rights Note Disclosure [Abstract] | |
Number of warrants granted |
Warrants - Schedule of Warrant
Warrants - Schedule of Warrant Activity (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
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 | 1 year 10 months 6 days |
Weighted Average Remaining Contractual Life Warrants Exercisable, Beginning | 1 year 10 months 6 days |
Weighted Average Remaining Contractual Life Warrants Outstanding, Ending | 1 year 7 months 10 days |
Aggregate Intrinsic Value Exercisable, Beginning | $ | |
Aggregate Intrinsic Value Exercisable, Ending | $ |
Commitment and Contingencies (D
Commitment and Contingencies (Details Narrative) | 3 Months Ended | |
Mar. 31, 2020USD ($)ft² | Mar. 31, 2019USD ($) | |
Lease term | 20 years | |
Lease expiration | Jul. 31, 2021 | |
Mortgage amount | $ 1,259,300 | |
Rental and equipment lease expenses | $ 63,500 | $ 58,500 |
Coastal Pride Seafood, LLC. [Member] | ||
Lease term | 6 years | |
Area of land | ft² | 3,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | May 27, 2020 | May 21, 2020 | May 07, 2020 | Apr. 17, 2020 | Jan. 23, 2020 | Mar. 26, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Apr. 02, 2020 | Apr. 01, 2020 | Nov. 15, 2019 |
Loan interest rate | 10.83% | ||||||||||
Issuance of dividend | $ 0 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Issuance of common stock, shares | |||||||||||
Issuance of dividend shares | 14,130 | ||||||||||
Issuance of dividend | $ 28,259 | ||||||||||
Four Month Unsecured Promissory Notes [Member] | John Keeler [Member] | |||||||||||
Number of shares pledged to secure company's obligation | 4,000,000 | ||||||||||
Lobo Holdings, LLC [Member] | Six-Month Promissory Note [Member] | |||||||||||
Notes payable | $ 100,000 | ||||||||||
Subsequent Event [Member] | Series A Preferred Stock [Member] | |||||||||||
Issuance of dividend shares | 14,130 | ||||||||||
Issuance of dividend | $ 28,261 | ||||||||||
Subsequent Event [Member] | Accredited Investors [Member] | |||||||||||
Number of shares sold, shares | 5,000 | ||||||||||
Number of shares sold | $ 10,000 | ||||||||||
Subsequent Event [Member] | Kenar Overseas Corp [Member] | |||||||||||
Description on maturity date | The Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender's sole option) | ||||||||||
Debt maturity date | Mar. 31, 2021 | ||||||||||
Extended maturity date | Sep. 30, 2021 | ||||||||||
Debt instrument description | The Kenar Note was amended to (i) set the maturity date at March 31, 2021 (unless extended to September 30, 2021 at the Lender's sole option), (ii) provide that the Company use one-third of any capital raise from the sale of its equity to reduce the outstanding principal under the Kenar Note, (iii) set the interest rate at 18% per annum, payable monthly commencing October 1, 2020, and (iv) to reduce the number of pledged shares by Mr. Keeler to 4,000,000. | ||||||||||
Debt instrument, interest rate | 18.00% | ||||||||||
Issuance of common stock, shares | 1,021,266 | ||||||||||
Subsequent Event [Member] | Lobo Holdings, LLC [Member] | Four Month Unsecured Promissory Notes [Member] | |||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||
Debt instrument, principal amount | $ 100,000 | ||||||||||
Subsequent Event [Member] | Lobo Holdings, LLC [Member] | Six-Month Promissory Note [Member] | |||||||||||
Debt instrument, interest rate | 10.00% | ||||||||||
Debt instrument, principal amount | $ 100,000 | ||||||||||
Subsequent Event [Member] | Eighth Amendment to the Ares Loan and Security Agreement [Member] | |||||||||||
Advance rate | 3.00% | ||||||||||
Subsequent Event [Member] | US Century Bank [Member] | |||||||||||
Unsecured note | $ 344,762 | ||||||||||
Loan interest rate | 1.00% | ||||||||||
Maturity terms | 2 years |