UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file number: 000-55903

BLUE STAR FOODS CORP.

(Exact name of registrant as specified in its charter)

Delaware

82-4270040

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

3000 NW 109th Avenue

Miami, Florida 33172

(Address of principal executive offices)

(860) 633-5565

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

BSFC

The NASDAQ Stock Market LLC

(NASDAQ Capital Market)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐ No ☒

As of August 15, 2022, there were 25,073,066 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

BLUE STAR FOODS CORP.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022

TABLE OF CONTENTS

		PAGE

PART I - FINANCIAL INFORMATION		4

Item 1.	Financial Statements (Unaudited)	4

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	27

PART II - OTHER INFORMATION		28

Item 1.	Legal Proceedings	28

Item 1A.	Risk Factors	28

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28

Item 3.	Defaults Upon Senior Securities	28

Item 4.	Mine Safety Disclosures	28

Item 5.	Other Information	28

Item 6.	Exhibits	28

SIGNATURES		29

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Except for historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include, among others, those statements including the words “believes”, “anticipates”, “expects”, “intends”, “estimates”, “plans” and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on our current expectations and assumptions regarding our business, potential target businesses, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore that you should not rely on any of these forward-looking statements as statements of historical fact or as guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include changes in local, regional, national or global political, economic, business, competitive, market (supply and demand), regulatory conditions and the following:

	●	Our ability to raise capital when needed and on acceptable terms and conditions;

	●	Our ability to make acquisitions and integrate acquired businesses into our company;

	●	Our ability to attract and retain management with experience in the business of importing, packaging and selling of seafood;

	●	Our ability to negotiate, finalize and maintain economically feasible agreements with suppliers and customers;

	●	The availability of crab meat and other premium seafood products we sell;

	●	The intensity of competition;

	●	Changes in the political and regulatory environment and in business and fiscal conditions in the United States and overseas; and

	●	The effect of COVID-19 on our operations and the capital markets.

A description of these and other risks and uncertainties that could affect our business appears in the section captioned “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 which we filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022. The risks and uncertainties described under “Risk Factors” are not exhaustive.

Given these uncertainties, readers of this Quarterly Report on Form 10-Q (“Quarterly Report”) are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments.

All references in this Quarterly Report to the “Company”, “Blue Star Foods”, “we”, “us”, or “our”, are to Blue Star Foods Corp., a Delaware corporation, and its consolidated subsidiaries, John Keeler & Co., Inc., d/b/a Blue Star Foods, a Florida corporation, and its wholly-owned subsidiary, Coastal Pride Seafood, LLC, a Florida limited liability company (“Coastal Pride”) and Taste of BC Aquafarms, Inc., a corporation formed under the laws of the Province of British Columbia, Canada (“TOBC”).

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the SEC, and should be read in conjunction with the audited financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2021, as updated in subsequent filings we have made with the SEC. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year.

Blue Star Foods Corp.

CONSOLIDATED BALANCE SHEETS

	JUNE 30, 2022			DECEMBER 31, 2021
	Unaudited
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	2,585,878		$	1,155,513
Accounts receivable, net		1,251,215			1,231,181
Inventory, net		5,689,982			2,119,441
Advances to related party		1,464,009			1,422,750
Other current assets		2,435,366			3,702,661
Total Current Assets		13,426,450			9,631,546
RELATED PARTY LONG-TERM RECEIVABLE		455,545			455,545
FIXED ASSETS, net		2,039,830			1,904,403
RIGHT OF USE ASSET		234,822			71,128
INTANGIBLE ASSETS, net
Trademarks		1,083,874			1,125,074
Customer relationships		1,759,807			2,082,757
Non-compete agreements		106,891			104,927
Total Intangible Assets		2,950,572			3,312,758
GOODWILL		1,282,064			445,395
OTHER ASSETS		196,388			124,634
TOTAL ASSETS	$	20,585,671		$	15,945,409
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accruals	$	1,547,667		$	1,794,223
Working capital line of credit		3,451,321			2,368,200
Deferred income		108,750			109,414
Current maturities of long-term debt, net		2,824,684			-
Current maturities of lease liabilities		60,561			30,583
Current maturities of related party long-term notes		430,000			475,000
Current maturity of loan payable		31,073			-
Related party notes payable - subordinated		910,000			960,000
Other current liabilities		854,649			1,054,649
Total Current Liabilities		10,218,705			6,792,069
LONG-TERM LIABILITIES
Long-term lease liability		173,753			40,109
Long-term debt, net		1,412,343			31,263
Related party long-term notes		125,000			175,000
TOTAL LIABILITIES		11,929,801			7,038,441
STOCKHOLDERS’ EQUITY
Series A 8% cumulative convertible preferred stock, $0.0001 par value; 10,000 shares authorized, 0 shares issued and outstanding as of June 30, 2022, and 0 shares issued and outstanding as of December 31, 2021		-			-
Common stock, $0.0001 par value, 100,000,000 shares authorized; 25,063,612 shares issued and outstanding as of June 30, 2022, and 24,671,318 shares issued and outstanding as of December 31, 2021		2,525			2,480
Additional paid-in capital		27,344,601			25,102,879
Accumulated other comprehensive loss		(56,026	)		(54,240	)
Accumulated deficit		(18,635,230	)		(16,144,151	)
TOTAL STOCKHOLDERS’ EQUITY		8,655,870			8,906,968
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	20,585,671		$	15,945,409

The accompanying notes are an integral part of these unaudited consolidated financial statements

Blue Star Foods Corp.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	2022		2021		2022		2021
	Three months ended June 30				Six months ended June 30
	2022		2021		2022		2021
REVENUE, NET	$	2,958,866	$	2,129,389	$	8,283,168	$	4,615,280

COST OF REVENUE		2,621,112		1,559,490		7,457,675		3,742,602

GROSS PROFIT		337,754		569,899		825,493		872,678

COMMISSIONS		21,377		13,606		21,377		18,400
SALARIES AND WAGES		571,076		228,859		1,146,525		609,455
DEPRECIATION AND AMORTIZATION		110,201

SEC Form 10-Q filed by Blue Star Foods Corp.