Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations contain certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events; are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. We undertake no obligation to publicly update or revise any forward-looking statements, including any changes that might result from any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements. Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

Critical Accounting Policies

The following discussions are based upon our financial statements and accompanying notes, which have been prepared in accordance with GAAP Financial Measures of the United States.

The preparation of these financial statements requires management to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingencies. We continually evaluate the accounting policies and estimates used to prepare the financial statements. We base our estimates on historical experiences and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management.

Accounting for Our Shrimp Inventory

Our inventory of shrimp is divided into shrimp held for sale and broodstock shrimp. Broodstock are shrimp that are used for breeding purposes; selected for their genetic, disease-free and size attributes they can be more valuable than shrimp held for sale. We collect broodstock from the biomass just before the harvest and segregate them from the shrimp that will be harvested and sold. Broodstock, because of their higher value, may be sold to other shrimp farmers in the United States and overseas. We also keep a number of broodstock for our own restocking purposes. So, during the year, our inventory can consist of shrimp held for sale, broodstock held for sale and broodstock used for restocking purposes.

Shrimp farming is a seasonal business. On a calendar year basis, we typically use the broodstock to breed our larvae shrimp during the first quarter so that by spring the shrimp are held in large post-larvae tanks for development. Later, in early summer, the shrimp are transferred to ponds where they complete the grow out process over the next five to nine months. This can vary if we have more than one cycle of shrimp. Grow out may begin in the second in the second quarter, with a second cycle grow out beginning in early summer. The first harvest cycle can occur in early fall with the second harvest cycle occurring in November or December. During 2023, we had one cycle and harvest occurred in early November 2023. During 2024, we did not stock, nor did we have a harvest. In 2025, we have not stocked the ponds or had a harvest. At this time, we are only maintaining the broodstock lines. We plan to refresh the lines in 1Q26, which will depend on investment funds raised.

Our shrimp inventory is valued at lower of cost or the net realizable value on a first-in, first-out basis.

The inventory at September 30, 2025 consists of live broodstock animals. Included in this amount are costs and charges directly and indirectly incurred in bringing shrimp inventory to its existing condition and location as noted in FASB ASC 330-10-30.

At September 30, 2025, the broodstock shrimp for the 2025 harvest had been identified and segregated from consumable shrimp in outdoor ponds to indoor tanks. The table below summarizes inventory at September 30, 2025 and 2024.

		September 30, 2025				September 30, 2024
Held for Sale
Shrimp		$	0			$	12,234
Broodstock			284,028				0
Total Held for Sale			284,028				12,234
Broodstock - Restocking			54,869				210,000
Total inventory		$	338,898			$	222,234

At September 30, 2025, approximately 4,415 animals of broodstock will be used to populate our post larval development in 2026. The cost of the broodstock was reclassified to broodstock held for restocking on a pro rata basis of cost per pound of the total biomass of shrimp held for sale. Subsequent costs will be allocated in accordance with ASC 330-10-30.

Business Overview

Founded in 2017, we are a leading aquaculture company that provides premium quality, farm-raised pacific white shrimp, 100% free of antibiotics and hormones, to the U.S. domestic seafood market. We believe we are a leading aquaculture company due to Best Aquaculture Practices ("BAP") guidelines,¹considering the rarity of the standards in the U.S. Although we are not currently in full compliance with BAP guidelines, we are working towards full compliance. At the moment, we adhere to BAP guidelines as part of our operating and production model. Grown at our 1,880-acre farm located in Rio Hondo, Texas, on the largest scale aquaculture farm in the U.S., our shrimp are meticulously raised to exceed in line with industry best practices according to BAP guidelines²using only authentic, sustainable practices. Within our controlled facility, each harvest is responsibly raised and cultivated onsite with minimal ecological footprint, promising our customers a superior product developed from the highest standard of care.

We have and will continue to utilize superior genetic linage broodstock for cultivation of own post larvae in our onsite genetics, maturation and hatchery facilities. These facilities allow us to continually develop animals with increasing growth rates, lower mortality, and stronger disease resistance. We began formal production runs in 2018 and to date have produced almost one million lbs. of shrimp for consumption.

Recent trends in the shrimp industry, including that, according to preliminary 2023 data from the National Marine Fisheries Service, shrimp prices have dropped as much as 44% since 2022.³Our business, prospects, revenues, profitability, and future growth are highly dependent upon the prices of and demand for shrimp. Our ability to borrow and to obtain additional capital on attractive terms is also substantially dependent upon shrimp prices. These prices have been and are likely to continue to be extremely volatile for seasonal, cyclical, and other reasons. Any substantial or extended decline in the price of shrimp will have a material adverse effect on our financing capacity and our prospects for commencing and sustaining any economic commercial production. In addition, increased availability of imported shrimp can affect our business by lowering commodity prices. This could reduce the value of inventories, held both by us and by our customers, and cause many of our customers to reduce their orders for new products until they can dispose of their higher-cost inventories.

Going Concern Uncertainty

As shown in the accompanying financial statements, during the three-months ended September 30, 2025, we reported a net loss of $171,642. As of September 30, 2025, our current liabilities exceeded its current assets by $4,379,486. As of September 30, 2025, we had $509 in cash. During the year ended December 31, 2024, we reported a net loss of $2,808,894. As of December 31, 2024, our current liabilities exceeded our current assets by $3,351,602. As of December 31, 2024, we had $0 cash.

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¹https://www.bapcertification.org/Downloadables/pdf/BAP%20-%20BAP%20Farm%20Standard%20-%20Issue%203.1%20-%2007-February-2023.pdf

²https://www.bapcertification.org/Downloadables/pdf/BAP%20-%20BAP%20Farm%20Standard%20-%20Issue%203.1%20-%2007-February-2023.pdf

³ https://civileats.com/2023/06/20/cheap-imports-leave-us-shrimpers-struggling-to-compete/#:~:text=The%20U.S.%20Food%20and%20Drug,before%20entering

%20the%20U.S.%20market

We will require additional funding to finance the growth of our operations and achieve our strategic objectives. These factors, as relative to capital raising activities, create doubt as to our ability to continue as a going concern. We are seeking to raise additional capital and are targeting strategic partners to accelerate the sales and marketing of our products and begin generating revenues. Our ability to continue as a going concern is dependent upon the success of future capital offerings or alternative financing arrangements, expansion of our operations and generating sales. The accompanying financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. Management is actively pursuing additional sources of financing sufficient to generate enough cash flow to fund its operations; however, management cannot make any assurances that such financing will be secured.

Results of Operations for the Three-Months Ended September 30, 2025 and 2024

Revenues

For the three-months ended September 30, 2025, total revenues were $0 compared to $0 for the same period in 2024, a decrease of $0 or 0%. This decrease was related to the company not having shrimp for sale and only maintaining the broodstock for future genetic development and stocking.

Cost of Goods Sold and Gross Profit

For the three-months ended September 30, 2025, cost of goods sold was $0 compared to $196,552 for the same period in 2024, a decrease of $196,552 or 100%. This was the result of not producing and harvesting or selling shrimp during the current three months ended September 30, 2025.

The gross profit for the three-months ended September 30, 2025 was $0 for an operating profit of $0 compared to a gross profit margin of $-196,552 for the same period in 2024.

Operating Expenses

General and administrative expenses for three-months ended September 30, 2025 decreased by $129,854, or 61%, to $83,396 from $213,250 for the three-months ended September 30, 2024. This decrease in expenses resulted from lower legal and professional fees and accrued payroll wages.

Other Income (Expense)

For the three-months ended September 30, 2025, we had interest expenses of $88,246 compared to interest expenses of $175,836 for the same period in 2024, a decrease in interest expense of $87,590. This decrease in interest expense was due primarily to reduction in interest related to the farm note.

Net Income (Loss)

As a result of the above, we reported a net loss of $171,642 for the three-months ended September 30, 2025 compared to a net loss of $575,325 for the three-months ended September 30, 2024.

Results of Operations for the Nine-Months Ended September 30, 2025 and 2024

Revenues

For the nine-months ended September 30, 2025, total revenues were $0 compared to $315,145 for the same period in 2024, a decrease of $315,145 or 100%. This decrease was related to the company not having shrimp for sale and only maintaining the broodstock for future genetic development and stocking.

Cost of Goods Sold and Gross Profit

For the nine-months ended September 30, 2025, cost of goods sold was $0 compared to $419,851 for the same period in 2024, a decrease of $419,851 or 100%. This was the result of not producing and harvesting or selling shrimp during the current three months ended September 30, 2025.

The gross profit for the nine-months ended September 30, 2025 was $0 for an operating profit of 0% compared to a gross profit margin of $-104,706 for the same period in 2024.

Operating Expenses

General and administrative expenses for nine-months ended September 30, 2025 decreased by $268,276, or 50%, to $266,357 from $534,633 for the nine-months ended September 30, 2024. This reduction in expenses resulted from lower legal and professional fees and payroll wages.

Other Income (Expense)

For the nine-months ended September 30, 2025, we had interest expenses of $215,528 compared to interest expenses of $449,356 for the same period in 2024, a decrease in interest expense of $233,828. This decrease in interest expense was due primarily to reduction in interest related to the farm note.

Net Income (Loss)

As a result of the above, we reported a net loss of $489,387 for the nine-months ended September 30, 2025 compared to a net loss of $1,143,656 for the nine-months ended September 30, 2024.

Liquidity and Capital Resources

As of September 30, 2025, we had a cash balance of $509, compared to a balance of $0 at September 30, 2024. We currently do not have sufficient cash to fund our operations for the next 12 months and we will require working capital to complete development and production, testing and marketing of our products and to pay for ongoing operating expenses. We anticipate adding management positions for corporate development and the corresponding operations of the Company, but this will not occur prior to obtaining additional capital. Currently, competitively priced loans from banks or other lending sources for lines of credit or similar short-term borrowings are not available to us. We have been able to raise working capital to fund operations through the issuances of convertible preferred stock to GHS, factoring our receivables, and borrowing funds from employees of the Company. As of September 30, 2025, our current liabilities exceeded our current assets by $4,379,486 as compared to September 30, 2024, when current liabilities exceeded current assets by $3,351,602 , an increase of $1,027,884.

The Company is also a party to an SBA Loan through a bank in the original amount of $150,000 bearing interest at 3.75% per annum, due in 2050, yielding a monthly payment amount of $731.

Liquidity is also affected by notes to our shareholders. At September 30, 2025, shareholders have loaned the Company approximately $1,646,636 which notes accrue interest at ranging from 12.0% to 18% per annum and were due September 30, 2024. The Company extended this due date to July 1, 2024, and plans to extend them again into 2026. Current discussions with noteholders are underway and we expect the noteholders to agree to this extension, but to date, no extensions have been finalized or approved.

In February 2024, the Company signed an unsecured promissory note with a lender for $111,600, bearing one-time interest at the rate of 13%, and maturing on four dates beginning on August 30, 2024 and ending on November 30, 2024. The proceeds of this note were issued with an original issue discount of $18,600, yielding net proceeds of $88,000. Upon full maturity, the Company will have paid a total of $126,108 of principal and interest on this note.

Cash Flows from Operating Activities

During the three-months ended September 30, 2025, net cash used in operating activities was $-54,305, due mainly to a net loss of $171,642, an increase in accounts payable of $57,086 mostly of payroll liabilities, and an increase of $88,246 in accrued interest. By comparison, during the three-months ended September 30, 2024, net cash used in operating activities was $389,780, due mainly to a net loss of $568,332, payroll liabilities, offset by an increase of $216,203 in accrued interest.

During the nine-months ended September 30, 2025, net cash used in operating activities was $-771,113, due mainly to a net loss of $-489,387, an increase in accounts payable of $835,244 mostly of payroll liabilities, professional services and reclassification of notes payment from related parties. By comparison, during the nine-months ended September 30, 2024, net cash used in operating activities was $442,196 due mainly to a net loss of $1,143,656, increase in accounts payable and accrued expense of $613,243 due to increased operations, and increase in accrued interest expense due mainly to falling into arrears on the note payable covering our farm property and increased interest expense on notes payable to shareholders.

Cash Flows from Investing Activities

During the three-months ended September 30, 2025, we had $10,616 net cash used in investing activities. During the three-months ended September 30, 2024, we had $0 net cash used in investing activities.

During the nine-months ended September 30, 2025, we had $21,232 net cash used in investing activities. During the nine-months ended September 30, 2024, we had $7,494 net cash used in investing activities.

Cash Flows from Financing Activities

During the three-months ended September 30, 2025, net cash provided by financing activities was $44,000 which was mainly comprised of proceeds from the purchase of Preferred Series D Shares of $44,000. During the three-months ended September 30, 2024, net cash provided by financing activities was $395,397 which was mainly comprised of proceeds from notes payable of $443,000, offset by payments due related parties of $70,850.

During the nine-months ended September 30, 2025, net cash provided by financing activities was $743,696 which was mainly comprised of proceeds from the purchase of Preferred Series D Shares of $117 and reclassification of related party notes payable. During the nine-months ended September 30, 2024, net cash provided by financing activities was $428,102 which was mainly comprised of proceeds from notes payable of $506,000, offset by payments due to shareholders of $74,375, and notes payable of $74,243. During the nine-months ended September 30, 2023, net cash provided by financing activities was $908,667 which was mainly comprised of proceeds from $958,000 from issued Series D Preferred Stock to GHS, offset by $116,488 in payments on related party notes and $56,258 in notes payable as well as proceeds from shareholder notes of $123,700.

Factors That May Affect Future Results

Management's Discussion and Analysis contains information based on management's beliefs and forward-looking statements that involve several risks, uncertainties, and assumptions. There can be no assurance that actual results will not differ materially from the forward-looking statements as a result of various factors, including but not limited to, our ability to obtain the equity/debt funding or borrowings necessary to produce, market and launch our products, our ability to successfully serially produce and market our products; our success establishing and maintaining production lines; the acceptance of our products by customers; our continued ability to pay operating costs; our ability to meet demand for our products; the amount and nature of competition from our competitors; the effects of technological changes on products and product demand; and our ability to successfully adapt to market forces and technological demands of our customers.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity capital expenditures or capital resources.

Recent Accounting Pronouncements

We have provided a discussion of recent accounting pronouncements in NOTE 2 to the Quarterly Consolidated Financial Statements for September 30, 2025 and 2024.