Item
1.01 Entry into a Material Definitive Agreement.
Extension
of Lobo Note
On
June 30, 2021, Blue Star Foods Corp., a Delaware corporation (the “Company”), issued a replacement unsecured promissory note
in the principal amount of $100,000 (the “Lobo Note”) to Lobo Holdings, LLC, a Florida limited liability company (“Lobo”),
and a stockholder of the Company, which served to extend the maturity date of an unsecured promissory note the Company originally issued
to Lobo on January 1, 2021, from June 30, 2021 to September 30, 2021. The Lobo Note, which bears interest at the rate of 10% per annum,
may be prepaid in whole or in part without penalty.
The
foregoing description of the Lobo Note is not complete and is qualified in its entirety by reference to the full text of the Lobo Note,
a copy of which is attached hereto as Exhibit 4.1.
Payoff
of Debt to Kenar
On
July 6, 2021, the Company entered into a note payoff indemnity agreement (the “Kenar Payoff Agreement”) with Kenar Overseas
Corp., a company registered in Panama (“Kenar”), pursuant to which the Company paid Kenar $918,539.32 of principal and accrued
interest in full satisfaction of the amounts due to Kenar under the Second Loan Amendment, dated April 26, 2021, between the Company
and Kenar. At the time the payment was made to Kenar, the 4,000,000 shares pledged by John Keeler, the Company’s Chief Executive
Officer and Executive Chairman, to secure the obligations of the Company to Kenar, were released.
The
foregoing description of the Kenar Payoff Agreement is not complete and is qualified in its entirety by reference to the full text of
the Kenar Payoff Agreement, a copy of which is attached hereto as Exhibit 10.1.
Entry
into Subscription Agreements
On
June 30, 2021, the Company entered into subscription agreements (“Subscription Agreements”) with certain purchasers (the
“Purchasers”), pursuant to which the Company sold the Purchasers an aggregate of 598,750 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), at a purchase
price of $2.00 per Share (the “Purchase Price”), for gross proceeds to the Company of $1,197,500.
All
of the Purchasers were “accredited investors,” as defined in Regulation D under the Securities Act of 1933, as amended (the
“Securities Act”).
The
Company intends to utilize the net proceeds from the sales of the Shares for the acquisition of a land-based salmon farm, to purchase
more crabmeat, to repay certain of the Company’s debt, and for working capital and general corporate purposes.
In
connection with the purchase of the Shares by the Purchasers, the Company issued each Purchaser warrants (“Warrants”) to
purchase additional shares of the Company’s Common Stock (the “Warrant Shares”) equal to the number of Shares purchased
by such Purchaser, at an exercise price of $2.00 per share. As a result, the Company issued Warrants to purchase an aggregate of 598,750
Warrant Shares to the Purchasers. The Warrants are exercisable for cash only, for a term of three years from the date of issuance.
The number of Warrant Shares to be deliverable upon exercise of the Warrants is subject to adjustment for subdivision or consolidation
of shares and other standard dilutive events.
Pursuant
to the Subscription Agreements, the Company granted the Purchasers piggyback registration rights with respect to Shares and Warrant Shares
(the “Registrable Securities”), requiring the Company to register the Registrable Securities in any registration statement
filed by the Company within two years from the date of the issuance of the Registrable Securities to the Purchasers, subject to certain
limitations.
The
foregoing descriptions of the Subscription Agreement and the Warrant are not complete and are qualified in their entirety by reference
to the full text of the forms of the Subscription Agreement and the Warrant, copies of which are attached hereto as Exhibits 10.1 and
4.2, respectively, and incorporated herein by reference.
