UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




FORM 10-K/A

(Amendment No. 3)




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

For the fiscal year ended June 30, 2012

OR

 ̈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 000-52401




UMAMI SUSTAINABLE SEAFOOD INC.



(Exact name of Registrant as specified
in its charter)



1230 Columbia St.

Suite 440

San Diego, CA 94089

(Address of principal executive offices,
including zip code)

Registrant’s telephone number,
including area code: (619) 544-9177

__________________

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

None



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

Common Stock, par value $.001 per share

(Title of Class)






Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ̈Nox



Indicate
by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes ̈No 
 x



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 thepreceding 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   ̈Nox



Indicate
by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted 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 and post such files).    Yes ̈No  
x



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is
not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈



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



|Large accelerated filer ̈                                             | Accelerated filer ̈          
|-------------------------------------------------------------------- | ----------------------------
|Non-accelerated filer ̈(Do not  check if a smaller reporting company) | Smaller reporting company  x





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



The aggregate market value of voting and
non-voting common equity held by non-affiliates of the registrant as of December 31, 2011: $25,005,000



The number of shares of the registrant’s
common stock outstanding as of October 9, 2012 was 59,515,543.



DOCUMENTS INCORPORATED BY REFERENCE



The following documents (or parts thereof)
are incorporated by reference into the following parts of this Form 10-K: None


















EXPLANATORY NOTE



This Amendment No. 3 to Form 10-K (this “Amendment”)
amends the Annual Report on Form 10-K for the fiscal year ended June 30, 2012 originally filed on October 12, 2012 (the “Original
Filing”) by Umami Sustainable Seafood Inc., a Nevada corporation (“Umami,” the “Company,” “we,”
or “us”). On October 30, 2012, we filed Amendment No. 1 to the Original 10-K (the “ First Amendment”) and
on November 21, 2012, we filed Amendment No. 2 to the Original 10-K (the “Second Amendment”). We are filing this Amendment
in response to a comment letter received from the Securities and Exchange Commission (“SEC”) to revise the disclosures
in Item 1. Business, Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results
of Operations, Item 10. Directors, Executive Officers and Corporate Governance, Item 11. Executive Compensation, Item 13. Certain
Relationships and Related Transactions and Director Independence, and Item 15. Exhibits, Financial Statement Schedules.



You should read this Amendment in conjunction with the Original
10-K, the First Amendment, the Second Amendment and the Company’s other filings made with the SEC subsequent to the filing
of the Original 10-K. The Original 10-K has not been amended or updated to reflect events occurring after June 30, 2012, except
as specifically set forth in the First Amendment, the Second Amendment and this Amendment.













PART I



FORWARD-LOOKING STATEMENTS



This Annual Report on Form 10-K contains statements that do
not relate to historical or current facts, but are "forward-looking" statements within the meaning of Private Securities
Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements relate to analyses and other information based on forecasts of future results and estimates of amounts not yet
determinable. These statements may also relate to future events and trends, our future prospects and proposed new products, services,
developments, or business strategies, among other things. These statements can generally (although not always) be identified by
their use of terms and phrases such as "anticipate," "appear," "believe," "contemplate,"
"continue," "could," "estimate," "expect," "indicate," "intend," "may,"
"plan," "predict," "project," "pursue," "seek," "should," "will,"
"would," or the negative thereof and other similar terms and phrases, as well as the use of the future tense.



Examples of forward-looking statements in this report include,
but are not limited to, the following categories of expectations about:



|• | customer demand for Bluefin Tuna and market prices;                                                                                   | 
|- | ------------------------------------------------------------------------------------------------------------------------------------- | 
|• | potential changes to Bluefin Tuna quotas, concessions and regulations;                                                                | 
|• | the implementation of our business model and strategic plans for our future business and products;                                   
|• | our ability to successfully increase the scale of our farming operations;                                                             | 
|• | our ability to develop closed-lifecycle farming;                                                                                      | 
|• | general economic conditions, particularly in Japan;                                                                                   | 
|• | our reliance on a few customers for substantially all of our sales;                                                                   | 
|• | our financial performance;                                                                                                            | 
|• | the intensity of competition and the advantages of our products as compared to those of others;                                       | 
|• | our ability to collect outstanding receivables;                                                                                       | 
|• | the amount of liquidity available at reasonable rates or at all for ongoing capital needs;                                            | 
|• | our ability to raise additional capital if necessary to execute our business plan;                                                    | 
|• | our ability to attract and retain management, and to integrate and maintain technical information and management information systems; | 
|• | the outcome of legal proceedings affecting our business; and                                                                          | 
|• | our insurance coverage being adequate to cover the potential risks and liabilities faced by our business.                             | 
|  |                                                                                                                                       | 



Actual results could differ materially from those expressed
or implied in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking
statements, are subject to change and to inherent known and unknown risks and uncertainties. See Part 1, Item 1A, "Risk Factors"
of this report for a discussion of these and other risks and uncertainties. You should not assume at any point in the future that
the forward-looking statements in this report are still valid. We do not intend, and undertake no obligation, to update our forward-looking
statements to reflect future events or circumstances, except as required by law.



In this report, unless otherwise specified, all dollar amounts
are expressed in United States dollars and all references to “common shares” refer to shares of our common stock. The
following discussion should be read in conjunction with the audited annual financial statements and the related notes filed herein.



METRIC SYSTEM CONVERSION INFORMATION



We reference various measurements throughout this report that
utilize the metric system of measurement. The applicable conversion rates from the metric system of measurement to the U.S. system
are as follows:



1 kilogram = 2.2046 pounds;

1 metric ton (or tonne) = 1.1023 short tons
(U.S. ton); and

1 metric ton (or tonne) = 2,204.6 pounds.





3







Item 1. BUSINESS



Corporate Background



Umami Sustainable Seafood Inc. (including its subsidiaries unless
the context indicates otherwise, "Umami," "the Company," "we," "us," and "our")
fishes and farms for Atlantic and Pacific Bluefin Tuna. We have three direct subsidiaries, Bluefin Acquisition Group Inc. ("Bluefin"),
Baja Aqua Farms, S.A. de C.V. ("Baja"), and Oceanic Enterprises, Inc. ("Oceanic"), and four indirect subsidiaries,
Kali Tuna d.o.o. ("Kali Tuna"), Thynnus d.o.o. ("Thynnus"), Bepina Komerc d.o.o. ("Bepina") and Atún
Oceano Pacifico S.A. de C.V. ("AOP"). In addition, based upon the criteria set forth in ASC 810, we have determined that
we are the primary beneficiary in two VIEs, M.B. Lubin d.o.o. ("Lubin") in Croatia and Marpesca S.A. de C.V. ("Marpesca")
in Mexico. We were the primary beneficiary in one additional VIE, Kali Tuna Trgovina d.o.o. ("KTT"), prior to May 23,
2012. See further discussion of our variable interest entities as discussed in Note 9 - Variable Interest Entities to our consolidated
financial statements included elsewhere is this report.



We own and operate Kali Tuna, a limited liability company organized
in 1996 under the laws of the Republic of Croatia, which is an Atlantic Bluefin Tuna farming operation located in the Adriatic
Sea off the coast of Croatia. We also own and operate Baja, a corporation organized in 1999 under the laws of the Republic of Mexico,
which is a Pacific Bluefin Tuna farming operation located in the Pacific Ocean off Baja California, Mexico.



Prior to June 30, 2010, we were a shell company known as Lions
Gate Lighting Corp. ("Lions Gate"), which was incorporated in the State of Nevada in May 2005. On June 30, 2010, Lions
Gate and Atlantis Group hf ("Atlantis"), our majority stockholder, completed a transaction in which Lions Gate purchased
from Atlantis all of the issued and outstanding shares of its wholly-owned subsidiary, Bluefin Tuna Acquisition Group ("Bluefin")
in consideration for the issuance to Atlantis of 30.0 million shares of Lions Gate common stock, resulting in a change of control
of Lions Gate. As a result of this transaction, Kali Tuna, a wholly-owned subsidiary of Bluefin acquired in 2005, and an indirect
subsidiary of Atlantis, became an indirect wholly-owned subsidiary of Lions Gate. This transaction was accounted for as a recapitalization
effected by a reverse merger, with Bluefin and Kali Tuna considered the acquirer for accounting and financial reporting purposes.



On July 20, 2010, we acquired 33% of Baja and Oceanic, and on
November 30, 2010, we acquired virtually all of the remaining shares of Baja and all of the shares of its related party Oceanic.
We currently own 99.98% of Baja. See further discussion regarding the acquisition of Baja and Oceanic below at "- Acquisition
of Baja Aqua Farms and Oceanic."



In August 2010, Lions Gate changed its name to Umami Sustainable
Seafood Inc. The stock symbol on the OTC Bulletin Board was changed to UMAM on the same date.



Our corporate structure is as follows:









_________________________________

|*  | Marpesca's remaining 51% is owned by Baja's General Manager, Victor Manuel Guardado France.  Mr. Guardado is our nominee for Mexican regulatory purposes, does not have decision-making authority and is not an executive officer or significant employee of Umami. Decision-making authority for Marpesca lies solely with Baja’s management, including specifically Mr. Sarmiento. See "Note 9 - Variable Interest Entities" for further discussion.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|** | Thynnus d.o.o. is an inactive Croatian company.                                                                                                                                                                                                                                                                                                                                                                                                       





4







Acquisition of Baja Aqua Farms and Oceanic



On July 20, 2010, we entered into a stock purchase agreement
with Corposa, S.A. de C.V. ("Corposa") and Holshyrna Ehf ("Holshyrna"), Oceanic and certain other parties,
providing for the sale from Corposa and Holshyrna of 33% of the equity in Baja and Oceanic. The agreement provided for our acquisition
of 33% interest in Baja and Oceanic for $8.0 million, which included $4.9 million that had been advanced to Baja previously.



As part of the stock purchase agreement, we also acquired the
option, exercisable by September 15, 2010, to purchase all remaining Baja and Oceanic shares in consideration for the issuance
of a) 10,000,000 restricted shares of our common stock and b) payment in cash of $10.0 million. On September 15, 2010, we exercised
the option and on September 27, 2010, the parties entered into amendments to each of the agreements requiring certain capital distributions
plus an additional $2.0 million related to the amendments to be made to the selling parties on or before November 30, 2010. On
November 30, 2010, we consummated the acquisition of Baja and Oceanic. However, instead of making the $10.0 million cash payment
described above, we paid $7.8 million in cash and issued zero interest promissory notes in the aggregate principal amount of $2.2
million on November 30, 2010. The notes, which were unsecured, were due and paid on December 10, 2010. As a result, on November
30, 2010, Baja became our 99.98% owned subsidiary and Oceanic became our 100% owned subsidiary.



Prior and subsequent to our acquisition of Baja, its administrative
functions were performed by Oceanic. These functions included accounting, payroll, human resources and related matters. While Oceanic
does not have an ongoing sales function, in 2008 and 2009 it sold Bluefin Tuna on Baja's behalf and was responsible for overseeing
the processing and shipping of that Bluefin Tuna. In limited circumstances, Oceanic also acquires and exports certain equipment
from U.S. vendors to Baja in cases where the U.S. vendors require a U.S. entity as a counterparty. It has no other functions or
operations beyond providing these services to Baja and is not a significant subsidiary. Oceanic, which was formed in California
in 2000 under the name Agritrade USA, Inc., was an affiliate of Baja that we acquired concurrently with the Baja acquisition. Oceanic
holds no intellectual property, does not require any government approval to conduct its operations as currently conducted, has
not engaged in research and development activities or incurred any costs or experienced any effects related to compliance with
environmental laws. As of June 30, 2012, Oceanic had 7 employees, all of whom were full-time employees. Oceanic continues to perform
some accounting, payroll and human resources functions for Baja.



Business Overview



Our core business activity is fishing, farming and selling Bluefin
Tuna. We generate all of our revenue from the sale of Bluefin Tuna primarily into the Japanese sushi and sashimi market, and our
sales are highly seasonal. Our fishing and farming operations increase the total weight of our Bluefin Tuna, which we refer to
as biomass, by catching or, less frequently, purchasing Bluefin Tuna and then transporting them to our farms for growing over extended
cycles.



We are a June 30-based fiscal year company and due to the optimal
seasonality for harvesting Bluefin Tuna in winter, we typically generate little or no revenue in our first fiscal quarter (the
three months ending September 30) or our fourth fiscal quarter (the three months ending June 30). In Croatia, our harvest months
are typically from November through February, while in Mexico, our harvest months are typically from October through December.



We are a leading producer of farmed Bluefin Tuna. We have farming
operations off the coast of Croatia in the Adriatic Sea and off the coast of Baja California, Mexico in the Pacific Ocean. Our
existing farming concessions in Croatia enable us to hold 5,030 metric tons at our Croatian farm. We can add 1,972 metric tons
of Bluefin Tuna to our Croatian farms each year, of which we can fish for and catch 133 metric tons based on our current allocation
of the total annual ICCAT fishing quota by the Croatian Fishing Ministry for calendar 2012 (see further discussion at "- Regulation"
below) and the remainder can be added through purchases of live Bluefin Tuna. Our Bluefin Tuna inventory of approximately 1,450
metric tons in Croatia as of June 30, 2012 represents just 29% of our holding allowance. We can add up to 2,720 metric tons of
Bluefin Tuna to our Mexican farms each year. Our Bluefin Tuna inventory at June 30, 2012 was approximately 887 metric tons in Mexico.
In Croatia and Mexico, there is no cap on the amount of biomass we have the right to export annually.





5







We are a practitioner of extended-cycle Bluefin Tuna farming,
which we define as farming through one or more winters. Extended-cycle farming enables us to grow our tuna, or biomass, by as much
as ten times prior to sale. In addition, our extended-cycle farming substantially increases the biomass of the Bluefin Tuna we
sell from farming compared to the biomass of the Bluefin Tuna we take from the wild. By adding substantial biomass from extended-cycle
farming, we can meet a given amount of market demand with a diminishing amount of wild-caught Bluefin Tuna. We also are working
toward a closed lifecycle Bluefin Tuna farming process, which has the long-term potential to significantly reduce Bluefin Tuna
fishing. We promote sustainability by meeting market demand through responsible farming practices that attempt to minimize reliance
on wild resources. We support fishery management actions to achieve permanent sustainability of Bluefin Tuna by advocating policies
to mitigate the effects of overfishing, including those directed at minimizing current overcapacity in the fishing fleets, as well
as to eliminate illegal fishing.



Industry Overview



Bluefin Tuna is commonly regarded as the highest quality and
most desirable species for sushi and sashimi consumption, and has become the centerpiece of the upscale sushi and sashimi plate.
However, Bluefin Tuna accounted for less than three percent of global tuna production in 2008.

1Bluefin Tuna itself is comprised of three distinct species: Atlantic Bluefin Tuna ("ABT"), which are found in the Mediterranean
Sea and the western and eastern Atlantic Ocean; Pacific Bluefin Tuna ("PBT"), which are found in the northern Pacific
Ocean; and Southern Bluefin Tuna ("SBT"), which are found in the southern hemisphere waters of all of the world's oceans.
Atlantic Bluefin Tuna are further comprised of two varieties, western Atlantic Bluefin Tuna and eastern Atlantic (including the
Mediterranean) Bluefin Tuna. Each of the three Bluefin Tuna species has its own distinct geographic distribution, migratory patterns
and sustainability profile.



The amount of each species of Bluefin Tuna caught in the wild
has declined significantly since the 1960s, primarily due to overfishing and the introduction of catch quotas and other regulations.
Bluefin Tuna catches declined from 143,200 metric tons in 1961 to 49,096 metric tons in 2010. 2 However, consumer demand
for Bluefin Tuna has substantially exceeded available wild catch supply. In addition to Japan, which remains the principal market
for Bluefin Tuna, other markets have emerged and grown, such as in China, Eastern Europe and the United States. This has resulted
in overfishing that has significantly reduced the Bluefin Tuna population.



The Atlantic and Southern Bluefin Tuna species are the most
critically affected by historical overfishing, leading to their classification as a threatened species by several Regional Fisheries
Management Organizations ("RFMOs"). As a result, the annual total allowable catch ("TAC") of ABT and SBT that
may be caught per year has been significantly reduced. For example, the TAC for eastern ABT has been reduced from 29,500 metric
tons in 2007 to 12,900 metric tons for 2012. 3The PBT is not yet in a low-TAC regime and the species is not nearly
as affected as ABT. However there are current attempts to introduce a low-TAC regime for PBT, such as implementation of decreasing
TACs and increasingly stringent controls on illegal fishing. Regulatory actions in support of sustainability applied to the PBT
fishery should help prevent a descent into critical status like that of ABT in the Mediterranean.



Current attempts to constrain Bluefin Tuna fishing are primarily
through setting environmentally sound quota levels, increasing quota enforcement and enforcement against illegal fishing of Bluefin
Tuna. In addition, other conservation measures, such as more stringent licensing and registration requirements, tighter documentation
and traceability restrictions, and shortened allowable fishing seasons, have been implemented in various parts of the world to
help conserve the wild Bluefin Tuna population. For example, the International Commission for the Conservation of Atlantic Tunas
("ICCAT") only allows Bluefin Tuna to be offloaded at designated, regulated ports and requires official monitors aboard
fishing boats. As a result of the sustained periods of overfishing and the relatively recent regulatory response, the supply of
Bluefin Tuna caught in the wild has been severely constrained and is expected to remain so for the foreseeable future.



The large supply and demand imbalance for Bluefin Tuna has intensified
the interest in Bluefin Tuna farming as a potential solution for the strong demand for the product and the desire to conserve the
species over the long term. In general, farming seafood species, or aquaculture, has emerged as the bridge between increasing demand
for seafood and the natural constraints on the amount of fish that can be caught in the wild. In the last two decades, the increase
in the demand for seafood has largely been addressed through the rapid growth of aquaculture as the level of wild catch has leveled
off, according to the Food and Agricultural Organization of the United Nations, or FAO.



---

1 Food and Agricultural Organization
of the United Nations ("FAO"), Fisheries and Aquaculture Department. The data is available publicly via the FAO's Fishery
Statistical Collections webpage at www.fao.org/fishery/statistics/tuna-catches/en.

2 Food and Agricultural Organization
of the United Nations ("FAO"), Fisheries and Aquaculture Department. The data is available publicly via an online query
on the FAO's website at www.fao.org/fishery/statistics/tuna-catches/en, "Global Tuna Nominal Catches."

3 International Seafood Sustainability
Foundation, "ISSF Technical Report 2012-04, ISSF Stock Status Ratings - 2012, Status of the World Fisheries for Tuna,"
April 2012. The complete report is publicly available at www.iss-foundation.org/science/technical-reports.





6







Aquaculture Production









Source: FAO4



According to the FAO, total world fisheries production
was estimated to be 154.0 million metric tons in 2011, of which 130.8 million metric tons was destined for human consumption.
Aquaculture production was estimated to be 63.6 million metric tons, of which more than 86 percent was destined for human
consumption, which means that aquaculture production represented nearly half of all fish consumed by humans in 2011.5 This percentage is projected to increase to meet the anticipated increase in demand for seafood. In the same way that
agriculture emerged in the last century to meet the demand for terrestrial animal proteins, aquaculture is poised to meet the
increasing demand for sea-based proteins. In addition, sea-based aquaculture offers many benefits over agriculture, including
the ability to farm without harmful fertilizers or the use of fresh water, which is critical in light of the impact many
fertilizers have on the environment and the increasing strain on fresh water supplies globally.



Prior to the early 1990s, conventional Bluefin Tuna fishing
methods meant it was not possible to keep bulk amounts of Bluefin Tuna alive after being caught. In the early 1990s, the emergence
of purse seine fishing vessels, which surround schools of Bluefin Tuna, enabled live capture and transport back to farms for further
growth. Historically, Bluefin Tuna farming occurred between the spring when the fish were caught and the winter. These short-term
Bluefin Tuna farms are generally able to increase the biomass of the catch during this period up to 50 percent.



Going forward, significantly more farmed biomass is required
to achieve sustainable Bluefin Tuna production in light of demand and reduced TAC. One way to accomplish this is to extend the
farming cycle through one or more winters. Extended-cycle Bluefin Tuna farms have successfully created more than ten times the
biomass on their farms compared to catch weights, which significantly reduces the strain on the Bluefin Tuna in the wild over the
longer term. In order to farm Bluefin Tuna at commercial scale over one or more winters, extended-cycle farmers need the ability
to catch or purchase live Bluefin Tuna, ample input quotas, and farming concessions in protected natural environments with key
characteristics such as adequate space and depth, multi-directional currents and favorable water quality. In addition, if the industry
continues moving towards fully sustainable Bluefin Tuna production as we expect, we believe successful Bluefin Tuna farmers will
need to develop and utilize the ability to raise Bluefin Tuna from eggs generated from farmed fish.



Operations



Our operations consist of the fishing (or less frequently purchasing),
farming (including feeding), harvesting and sale of Bluefin Tuna.



---





4 FAO, "The State of World
Fisheries and Aquaculture - 2012," 2012. The complete report is publicly available at www.fao.org/fishery/publications/en.

5 FAO, "The State of World
Fisheries and Aquaculture - 2012," 2012. The complete report is publicly available at www.fao.org/fishery/publications/en.





7







Fishing



Overview. We have developed the necessary
expertise to allow us to cost-effectively catch Bluefin Tuna. Successfully catching Bluefin Tuna in a cost-effective manner requires
knowledge, data and expertise at several points in the fishing process, including in locating, catching and towing the Bluefin
Tuna back to our farms in a manner designed to minimize mortalities.



Locating Bluefin Tuna. The first
step in the fishing process is locating Bluefin Tuna. Our extensive research and expertise allows us to identify likely places
and times where Bluefin Tuna will school. In addition, at our Mexican operation, we closely monitor oceanographic and weather information
to create predictive maps showing where we believe the most efficient fishing will take place. We gather and consider data from
satellites and over ten years of internal records, including with respect to water temperature (both at the surface and at various
depths), current flows and prevailing winds. The data is analyzed and provided to our vessel captains and our pilots (in Mexico),
who collectively draw on decades of experience to determine where and when ideal fishing conditions exist.



Catching Bluefin Tuna. Once Bluefin
Tuna have been located, we use our skills, expertise and specialized equipment to minimize mortality in the catching process. We
catch Bluefin Tuna using purse seiners, which are the most efficient in drawing live fish from the wild fishery for our farming
operations. Alternatives such as set nets, drift nets, and long-line fishing methods are not suitable for live fisheries. The seiner
circles the Bluefin Tuna with a deep curtain of netting. The bottom of the net is then closed, or pursed, underneath the Bluefin
Tuna by hauling a wire running from the seiner through rings along the bottom of the net. Purse seining, coupled with Bluefin Tuna
schooling patterns, allow us to substantially reduce the catching of any other fish species, or by-catch. We never use fish aggregating
devices ("FADs") which increase by-catch of marine life other than tuna. We do not need nets with panels to release dolphins
(such as nets used for Yellowfin Tuna fishing) because dolphins do not school with Bluefin Tuna. Our specially designed nets are
also easier to use than Yellowfin Tuna nets, making managing the catching process easier in order to minimize mortality. Key in
minimizing mortality is how the nets are set and manipulated. Immediately upon setting the nets, we deploy highly specialized divers,
who use their collective expertise to determine the optimal time and pace at which to purse the seine; if done too quickly, the
Bluefin Tuna can panic and charge the sides of the net, resulting in substantial mortality.



Towing Bluefin Tuna. Once we have
located and caught Bluefin Tuna, we must tow them to our farming sites while minimizing mortality. We employ divers with significant
experience to transfer the tuna from our seine nets to our specialized towing pens. After successfully transferring the Bluefin
Tuna to our towing cages, the tuna are then transported to our farms at extremely low rates of speed to minimize stress, ensuring
they arrive healthy and with a low mortality rate. Throughout the towing process, our divers go into the towing pens to remove
any deceased Bluefin Tuna and monitor the general condition of the live Bluefin Tuna, which they communicate to the captain in
order to determine optimal towing speed.



Our Vessels and Fishing Periods.
In Croatia, we use a combination of our fleet and contracted fishing vessels to catch Bluefin Tuna during May and June. In Mexico,
we lease a fleet of purse seiners and tugboats for an 80-day period during the fishing season of May through August to catch Bluefin
Tuna. These leased vessels are dry-leased, which means we provide all of the necessary equipment and personnel for Bluefin Tuna
fishing. This provides us with the level of control we desire and allows us to take full advantage of our know-how, data, experience,
expertise and developed skill sets. We also believe we can significantly lower our overall feed costs by purchasing sardine-fishing
vessels for our Mexican operation, and we intend to purchase one or more of these vessels in fiscal 2013 to support this goal.
We estimate that each of these sardine-fishing vessel acquisitions will require approximately $0.8 to $1.4 million until the purchase
is consummated and the vessel reaches its ultimate destination, at which point we believe we will be able to mortgage the vessels
or set up sale-leaseback arrangements and recover most of our initial cash outlay. Our current cash on hand and capital needs for
the foreseeable future may not allow us to fund these acquisitions. Therefore, to fund these acquisitions, we may pursue joint
ventures or debt or equity financing. Such funding may not be available on commercially reasonable terms or at all. Similarly,
we may not be successful in mortgaging or entering into sale-leaseback arrangements with respect to any vessels we acquire on commercially
reasonable terms or at all.



Farming



Overview. Our operations focus on
extended-cycle Bluefin Tuna farming. Farming is the principal form of aquaculture and involves farming fish commercially in tanks
or holding pens. Bluefin Tuna farming is conducted in the open water in circular holding pens typically measuring 30-50 meters
in diameter and 20-30 meters deep. We have developed the expertise to farm our Bluefin Tuna for extended periods of time, up to
3.5 years, which achieves up to a ten-fold increase in the Bluefin Tuna biomass.





8







Transferring Bluefin Tuna to Holding
Pens. Once the tow pen arrives at our farm locations (after approximately one to three weeks of towing), our biologists and
farm staff study the Bluefin Tuna to determine whether they have acclimated to the towing pen and their stress level has adequately
declined. We have sufficient infrastructure and additional towing pens to allow us to transfer the Bluefin Tuna to minimize mortality.
First, we anchor the towing net to a farming pen and allow them to acclimate before transferring them to the holding pen. Having
many farming sites allows us to choose the farming pen with optimal conditions and to avoid overcrowding the Bluefin Tuna. When
our farm staff determine that the conditions are optimal for a transfer based on fish behavior, visibility and other conditions,
we transfer the Bluefin Tuna into holding pens. We open the towing net and create a portal to the farm pen to accomplish the transfer.
Divers then guide the Bluefin Tuna into the holding pen. Using high-speed cameras and a specialized software, we film, count and
measure the Bluefin Tuna entering our pens to record total inventory and calculate biomass. We have a security team that
monitors our farms 24 hours per day, seven days per week. We also have teams of marine biologists, feed providers, divers and maintenance
staff that look after our Bluefin Tuna. Our staff ensures that the pens are secure and that any mortalities are removed.



Location. As with terrestrial farming,
identifying and setting up favorable farming locations is one of the most important aspects to a successful open water aquaculture
farming operation. We determine the optimal locations for our farming operations after a careful and thorough review of site-specific
conditions by our operational teams and external environmental consultants. We currently operate our farming operations in two
locations: Croatia and Mexico. Kali Tuna has been operating in the Adriatic Sea off the Croatian coast since 1996. The Adriatic
Sea off the Croatian coast provides an ideal farming ground due to its infrequent storms and lack of natural predators of tuna.
In 2010, we acquired a Bluefin Tuna farming operation in the Pacific Ocean off the coast of Baja California, Mexico. Both our Croatia
and Mexico sites offer several advantages over other locations to farm Bluefin Tuna due to their favorable climate, water temperatures
and quality, and multi-directional currents, which we believe aid in farm cleanliness and lower disease rates. In addition, our
farms are located in close proximity to sources of sardines and other small fish we catch or purchase for feed, in locations with
conveniently-located, well developed port infrastructure and in areas with competitively priced skilled labor. In Croatia, we own
the right to hold 5,030 metric tons of biomass in our pens, and we own quotas to catch an additional 133 metric tons per year.
In Mexico, we can add 2,720 metric tons of Bluefin Tuna to our farms each year.



Fish Farming. Our staff monitor the
Bluefin Tuna and their reactions to the conditions on the farm. Stress can cause Bluefin Tuna mortality. We seek to minimize stress
on our Bluefin Tuna throughout the farming cycle, but especially while introducing new Bluefin Tuna to our farms. Our staff continually
assess potential contributors to stress and conduct regular histological testing to closely monitor the health of the tuna in our
farms.



Procurement of Additional Bluefin Tuna



For a farming operation to be successful, Bluefin Tuna stock
must be replenished. We obtain additional Bluefin Tuna stock for use in our farming operations through two primary methods: catching
live fish and purchasing live fish from third parties. Fishing in Croatia takes place only from May 15 through June 15 and is subject
to strict quotas, as set by the international regulatory body International Commission for the Conservation of Atlantic Tunas ("ICCAT").
In Mexico, the majority of our Bluefin Tuna is obtained through our own fishing efforts. The fishing season in Mexico generally
takes place during the months of May through August. In Croatia, we also purchase live tuna from local and foreign-based farms
and suppliers, including fish companies operating in the Mediterranean. Purchased fish are towed back to our farming sites off
the Croatian coast for transfer into our farming pens. Since the acquisition of our Mexican operation, we have not purchased any
live Bluefin Tuna in Mexico. Whether self-caught or purchased, we have extensive controls in place to ensure that our Bluefin Tuna
is compliant with total traceability standards, meaning it was caught in compliance with all quotas and other regulations governing
the fishery and fishing methods. We can trace the history of each farming pen of fish that we harvest back to the time and location
where it was caught, what it has been fed, and how long it has been farmed as part of our compliance with total traceability standards
required to sell Bluefin Tuna into Japan.



Feed and Inventory Management



We feed our Bluefin Tuna a diet of sardines, anchovies, mackerel,
herring, squid and other small fish, the same diet the Bluefin Tuna would have in the wild. The quantity of feeding can be adjusted
up or down depending on seasonal conditions and timing within the general farming cycle. Because our Bluefin Tuna are caged and
spend much less energy hunting for their own food, the feed we provide them goes more towards growth than would a comparable amount
of feed consumed by tuna in the wild. We amass feed with different nutritional specifications, such as higher or lower fat and
protein content, and freeze feed to ensure that we maintain adequate supply. Our staff carefully monitors the feeding behavior
and we are then able to increase or decrease the fat and protein content of our Bluefin Tuna's diet to achieve optimal food conversion.
We use no antibiotics, additives or supplements.





9







In Croatia, we currently purchase most of our feed requirements
from third-party vendors. In Mexico, we catch most of our feed requirements ourselves, and we supplement the caught feed by purchasing
some additional fish from third parties. We believe we can significantly lower overall feed costs in Mexico by purchasing sardine-fishing
vessels.



Harvesting



At harvest time, we set up specialized nets to partition the
pens into sections. Divers guide a certain number of Bluefin Tuna into a quartered section of a pen where our dive team removes
Bluefin Tuna from the holding pens one-by-one. The harvested Bluefin Tuna is either sold fresh or, more commonly, loaded onto a
customer's freezer boat where it is frozen at ultra-low temperatures.



In Croatia, the optimal harvest months are from November through
February. In Mexico, the optimal harvest months are from October through December. These months represent the months when water
temperature is lowest, which increases the quality of tuna meat. Although we have proven the ability to farm Bluefin Tuna for several
years, we have historically harvested fish after an average period of 2.5 to 3.5 years in Croatia (approximately 70-120 kilograms)
and two to fourteen months in Mexico (approximately 20-35 kilograms) due to capital constraints that limited our ability to grow
our tuna over the optimal growing cycle.



Strategic investments



We may seek to acquire stakes in tuna farming and fisheries
with farming and/or fishing licenses in selected areas in countries with successful Bluefin Tuna farming history that will complement
our existing operations. We have previously identified a number of potential targets but we have not yet entered into negotiations
with any of them. We had preliminary discussions with certain potential acquisition targets, but those discussions have ceased.
No acquisitions are probable for the foreseeable future. Any future acquisition will be subject to available financing, which could
include cash on hand, the issuance of additional debt or equity, or alternative financing plans, such as refinancing or restructuring
our debt, selling assets, or reducing or delaying capital investments.



Customers, Sales and Marketing



We sell virtually all of our Bluefin Tuna to a small number
of Japanese customers. In fiscal 2011, sales to four customers, Atlantis Japan, Mitsubishi Corporation, Global Seafoods Co., LTD
and Sirius Ocean Inc., accounted for 98.9% of our net revenue. In fiscal 2011, sales to Atlantis Japan accounted for 71.9% of our
net revenue, sales to Mitsubishi accounted for 10.8%, sales to Global Seafoods accounted for 9.3% and sales to Sirius Ocean accounted
for 6.9%. In fiscal 2012, sales to these four customers plus Daito Gyorui Co., Ltd. and Kykuyo Co., LTD accounted for 99.3% of
our net revenues. In fiscal 2012, sales to Atlantis Japan accounted for 30.2% of our net revenue, sales to Mitsubishi accounted
for 14.9%, sales to Global Seafoods accounted for 7.1%, sales to Sirius Ocean accounted for 19.5%, sales to Daito Gyorui accounted
for 15.2% and sales to Kyokuyo accounted for 12.4% .We anticipate continuing to generate a significant percentage of our revenue
from a small number of Japanese customers. See “Risk Factors - Risks Related to Our Business -We depend on a small number
of customers for virtually all of our revenue.”



In Croatia, approximately 99% of our Atlantic Bluefin Tuna sales
in fiscal 2012 were sold as frozen fish, which typically will be picked up by the customer in its own specially equipped freezer
vessels for transport to Japan. When selling fresh fish to a customer, we ship the processed fish by express delivery to the requested
location. In Mexico, approximately 83% of our production in fiscal 2012 was sold as frozen product. The remaining 17% was sold
fresh where the fish is harvested, cooled, packed in ice and then sent via air-freight to Japan. Our Mexican operation has sold
frozen fish through both land-based (rented) containers and specially equipped freezer vessels. We expect most frozen product will
be sold utilizing freezer vessels as the freezer vessels are currently more efficient from a processing standpoint.



We previously contracted with Atlantis and its affiliated entities
to handle Bluefin Tuna sales for us. Our current agreement was terminated effective March 31, 2012. We do not intend to renew this
agreement and will handle all future sales and marketing of our Bluefin Tuna inventory in-house. We expect that this change will
reduce our selling, general and administrative expenses in the future, as we expect our internal sales fixed costs are likely to
be less than a customary percentage applied across the sales that we previously outsourced.



Sustainability and Research & Development



We fully endorse the idea of sustainable farming. Our extended-cycle
farming can substantially increase the biomass of the Bluefin Tuna we sell after farming compared to the biomass of the Bluefin
Tuna we take from the wild fisheries. The result would be that we could significantly decrease the amount of Bluefin Tuna that
is caught in the wild each year to meet market demand, thereby improving the long-term sustainability of Bluefin Tuna. In addition,
one of our long term goals is developing closed-lifecycle Bluefin Tuna farming, which has the long-term potential to significantly
reduce Bluefin Tuna fishing in the wild by replacing wild caught tuna with tuna spawned, hatched and raised in captivity. Scientists
have achieved some encouraging results in the area of breeding tuna in captivity. However, we believe that commercialization of
propagation programs is still a number of years away. We are committed to continuing this research project with the ultimate goal
of profitably commercializing the full circle farming process. We have consistently worked closely with the local fisheries ministry
in Croatia to formulate rules governing the industry and we are committed to working closely with the local fisheries for both
operations.





10







Environmental Practices



We believe that we employ industry-leading environmental practices
to ensure a sustainable business model in the changing regulatory and environmental market. Prior to commencing operations, we
conduct extensive environmental impact studies, which we submit for consideration to the relevant governmental authorities in the
areas where we propose to operate. Even after these agencies authorize us to commence farming operations, they conduct routine
tests of indicators of adverse environmental impact. We have never been found by any authority to have created any adverse impact.



At our farms we employ open water farming, through which we
ensure our pens are located in areas with multi-directional currents and with sufficient space between them to minimize concentrations
of farming-related natural debris and waste. In addition, our use of purse seiners virtually eliminates the inadvertent catching
of fish other than Bluefin Tuna.



Employees



As of June 30, 2012, we directly, through contract with an independent
labor contractor or indirectly, through one of our variable interest entities, employed 515 persons globally, including 3 part-time
employees. Of these, Umami employed 8 full-time individuals and Oceanic employed 7 full-time individuals, including executive,
finance and administrative personnel. In Croatia, we had 146 employees (including 3 part-time employees), of which 45 full-time
employees were employed by our variable interest entity Lubin. In Mexico, we had 354 full-time staff, all of whom were employed
pursuant to an agreement with Servicios Administrativos BAF, an independent labor contractor, including 24 administrative staff
members, 250 farm workers, 13 fishermen and 67 employees active in other operations. Seasonal changes occur as a result of additional
hires required during the fishing season. None of our staff is represented by a labor union, and we consider our staff relations
to be excellent.



Insurance



Our involvement in the fish farming industry may result in our
becoming subject to liability for pollution, property damage, personal injury or other hazards. Also, we are subject to loss or
mortality of our tuna inventories. We carry insurance in both our Croatia operations and our Mexico operations to mitigate these
risks.



Competition



In general, the Bluefin Tuna trade market is intensely competitive
and highly fragmented. Gaining market share in the Bluefin Tuna trade market is difficult because of regulatory matters involving
increasing quota enforcement and more stringent licensing and registration requirements. We compete with various companies, many
of which are producing products similar to ours. Our competitors in the Adriatic and Mediterranean that produce Bluefin Tuna are
Fuentes e Hijos (Spain), Aquadem (Turkey), Azzopardi (Malta), Sagun (Turkey) and Balfego (Spain). In Mexico, we compete with Maricultura
del Norte and Aquacultura Baja California. As of June 30, 2012, we held approximately 72% of the Bluefin Tuna farming concessions
issued in Croatia, or 5,030 metric tons out of 6,980 issued in total. 6 Our future competitors may have competitive
advantages, including but not limited to greater resources that can be devoted to the development of extended-cycle Bluefin Tuna
farming and gaining market share, more established sales channels, greater aquaculture operational experience, and/or greater
name recognition.



---









6 International Commission for the Conservation
of Atlantic Tunas, ICCAT Record of BFT Farming Facilities webpage filtered for Croatia publicly available at www.iccat.int/en/ffb.asp.





11







Regulation



Environmental Laws



We are subject to international quotas and to various national,
provincial and local environmental protection laws and regulations, including certifications and inspections relating to the quality
control of our production. During the years ended June 30, 2012 and June 30, 2011, we spent approximately $0.3 million and $0.2
million, respectively, on environmental law compliance, consisting primarily of various ICCAT and veterinary inspection fees, environmental
monitoring fees and biological waste disposal costs.



Croatian Environmental Law



Our Croatian operation is subject to laws and rules that regulate
the location, design and operation of its farming sites. Under Croatia's Environment Protection Act of 2007, we are required to
apply for location permits, which are issued by the respective authority for each farming location and in accordance with local
ordinances. Applications must be accompanied by an environmental impact assessment that will identify, describe and evaluate in
an appropriate manner the impact of the relevant project on the environment, by establishing the possible direct and indirect effects
of the project on the soil, water, sea, air, forest, climate, human beings, flora and fauna, landscape, material assets and cultural
heritage, taking into account their mutual interrelations. Concession contracts (discussed below) relating to each site are entered
into based on the relevant location permits.



We are also subject to ongoing environmental monitoring requirements
in Croatia, including testing the quality of the water and performing emission measurements for all our installations. We are required
to conduct monitoring of our impact on the environment from two to four times per year at all our Croatian sites, which is conducted
by an independent company. The monitoring includes seawater analyses performed by the Institute for Public Health in Zadar pursuant
to rules established by the respective location permits.



Each of our farming locations in Croatia is provided with a
location permit approved by the Croatian Ministry of Environmental Protection. We believe that we are in material compliance with
Croatian applicable environmental laws and regulations.



Mexican Environmental Law and Compliance



The Mexican General Act for Ecologic Balance and the Protection
of the Environment of 1988, or the “General Act,” was influenced by U.S. environmental laws such as the Environmental
Impact Act, the Clean Water Act, the Clean Air Act and the National Environmental Policy Act. The General Act provides for specific
criminal and administrative sanctions assessable upon a failure to comply with regulations regarding hazardous materials and also
serves as the main legal framework of the federal environmental agency in charge of issuing the technological standards for federal,
state and local authorities to determine environmental for non-compliance.



The General Act for Sustainable Fishing and Aquaculture (Ley
de Pesca, 2007) and its Regulations (Reglamento de la Ley de Pesca) constitute the main legal framework governing the conservation,
preservation, exploitation and management of all aquatic flora and fauna in Mexico. There are also certain secondary statutes,
such as Official Mexican Standards, or "NOMs." NOMs applicable to our business are mainly related to water waste and
sanitary rules applicable to our product.



The Ministry of Agriculture, Livestock, Rural Development, Fisheries
and Food, or "SAGARPA" and the National Commission of Aquaculture and Fisheries, or "CONAPESCA," are the authorities
in Mexico responsible for the management, coordination and development of policies regarding the sustainable use and exploitation
of fisheries and aquatic resources.



Our aquaculture activities are developed in federal water bodies
under a concession title issued by CONAPESCA. In accordance with the General Act, the protection of aquatic ecosystems and their
ecological balance must be taken into account when granting concession titles for aquaculture activities. In this same regard,
as described herein, the application for a concession title must be accompanied with an environmental impact assessment. Authorization
by the Ministry of Environment and Natural Resources, or "SEMARNAT," is required if the intended activities may cause
ecological imbalances or otherwise may surpass the limits and conditions set forth in the applicable regulations that protect the
environment and the preservation and restoring of the ecosystems. To initiate our activities, an application was filed before SEMARNAT.
SEMARNAT resolved that our activities cause no imbalances and are within the limits and conditions set forth in the applicable
regulations that protect the environment and the preservation and restoration of the ecosystems.





12







Under Mexican law, generators of waste are categorized in accordance
with the volume of waste they generate, as follows: (i) micro-generators (up to 400 kilograms per year); (ii) small-generators
(from 400 kilograms to 10 tons per year), and (iii) large-generators (more than 10 tons per year). Our activities produce a volume
of waste that categorizes us as micro-generators.



Our activities in Mexico produce hazardous and non-hazardous
waste. Hazardous waste includes industrial waste with corrosive, reactive, explosive, toxic, flammable or biological-infectious
characteristics. Although all residues may entail environmental obligations for generators, hazardous residues are subject to compliance
with the most stringent rules. In our case, our business generates waste oils. Therefore, among our obligations in respect of hazardous
waste are: (i) obtaining a registration before SEMARNAT of our management program for hazardous waste, and (ii) maintaining a record
for our disposals (through official forms). There is no obligation to report this information.



In respect of the non-hazardous waste generated by our activities
(mainly animal organic waste), we are subject to the provisions of the Environmental Protection Act of Baja California, or the
“Environmental Provincial Act.” This statute provides for the management of special waste and the generators' responsibility
to handle, transport and dispose of solid waste, unless that waste is transferred to the competent authority or to an authorized
private company. Liability ceases upon deposit of the waste in authorized containers or at sites approved by the competent authority.
In addition, the Environmental Provincial Act establishes that generators of special waste must maintain a Waste Management Program
that specifies the form in which special waste is selected, gathered, transported and recycled after treatment or their final disposal
in controlled terms. All non-hazardous waste must be handled by authorized companies registered as non-hazardous waste generators.
It is mandatory to file annual reports to the relevant authority.



As mentioned above, we are also subject to the National Waters
Act and the General Act for Sustainable Fishing and Aquaculture in Mexico, which, among other things, governs the grant of concessions
for commercial fisheries. Concession holders have, among others, the following environmental obligations:

|  |                                                                                                                                  | 
|- | -------------------------------------------------------------------------------------------------------------------------------- | 
|• | Assist in the preservation of the environment and the conservation and reproduction of species, including repopulation programs; | 
|• | comply with the NOMs and measures of aquatic health; and                                                                         | 
|• | maintain in good condition land-based establishments and permanent or temporary cultivation equipment in water bodies.          
|  |                                                                                                                                  | 



We are also required to monitor our activities on all our farming
sites for ongoing compliance and we are subject to periodic inspections. Our environmental monitoring requirements in Mexico include
testing the quality of the water for harm caused by normal daily feeding activities (including the water's oxygen level, temperature
and visibility), performing bi-weekly nutrient analysis of the water column, and performing sediment testing at each site twice
per year to measure any impact on the local marine environment.



We have obtained permits for each farming location in Mexico
and believe that we are in material compliance with applicable environmental laws and regulations.



Fishing Quotas



Internationally, ICCAT regulates Atlantic Bluefin Tuna quotas
that are allocated to and enforced by individual countries, including Croatia. ICCAT quotas for individual countries can vary each
year depending on the status of tuna stock worldwide. The Croatian Fishing Ministry allocates the ICCAT-mandated quota for Croatia
annually on a boat-by-boat basis. Each boat permitted to engage in fishing activities each year by the Croatian Fishing Ministry
is allocated a percentage of the total annual ICCAT fishing quota for that calendar year by the Croatian Fishing Ministry. For
calendar year 2012, ICCAT allocated a quota of 367 metric tons to Croatia, of which we secured 36%, or 133 metric tons.



Fishing quotas in Croatia can be transferred, leased or assigned
to other boat operators. In addition to the quota we own in Croatia, we also regularly lease quota from other boat operators. The
Croatian Fishing Ministry also limits the number of boats that can fish for Bluefin Tuna in any given fishing season. In calendar
year 2012, of the 39 boats allocated fishing quotas by ICCAT, only nine were permitted by the Croatian Fishing Ministry to engage
in fishing activities. We had the right to receive the fish caught by three of those boats. In 2013, the number of boats will be
decreased to seven. The number of boats allowed in subsequent years has not yet been determined.



ICCAT divides the boat allocations into three categories-boats
up to 24 meters, boats from 24 meters to 40 meters and boats over 40 meters. ICCAT determines which boats to allow to fish by reviewing
the fish quota allocations for all the boats over the past several years. The boats with the highest quotas (either quotas expressly
granted to the boat or assigned to the boat by another operator) are granted fishing permits.





13







If any boat violates a provision of the ICCAT regulations, its
fishing license is revoked and it is prohibited from any further fishing.



Farming Concessions



We operate our farming sites under concession permits granted
by the applicable national authorities of Croatia and Mexico.



In Croatia, we currently operate five farming sites with an
aggregate input quota of 1,972 metric tons of new Bluefin Tuna per annum. Following is a detailed breakdown of our farming sites
and the terms of our concessions in Croatia as of June 30, 2012, which are based on both new fish allowed to enter farms annually
and total farm fish holding capacity:

|                |                                                  |  |                                           |       |                 |                 |                 |  |                   |                      
|--------------- | ------------------------------------------------ |  | ----------------------------------------- | ----- | --------------- | --------------- | --------------- |  | ----------------- | ---------------------
|Site            | Annual New Fish Input Quota (in metric tons) (1) |  | Maximum Farming Capacity (in metric tons) |       | Surface (in m2) | Expiration Date | Renewal Process
|Mrdjina Field B | 674                                              |  |                                           | 1,240 |                 |                 | 160,000         |  | February 28, 2026 | Restricted public bid
|Fulija (2)      | -                                                |  |                                           | 500   |                 |                 | 120,000         |  | December 23, 2018 | Restricted public bid
|Zverinac        | 314                                              |  |                                           | 1,500 |                 |                 | 140,000         |  | December 14, 2026 | Restricted public bid
|Mrdjina Field A | 100                                              |  |                                           | 230   |                 |                 | 30,000          |  | February 28, 2026 | Restricted public bid
|Lavdara (3)     | 884                                              |  |                                           | 1,560 |                 |                 | 197,000         |  | April 23, 2032    | Restricted public bid
|Total           | 1,972                                            |  |                                           | 5,030 |                 |                 | 647,000         |  |                   |                      

_________________________________

|(1) | Each input quota is based on historical records of the respective farm location. We believe the quotas can be re-allocated to other existing farms (to the extent it would not exceed the farm's maximum farming capacity) or to any new farming site, although any change to the terms of the permit (including the farming quotas) are subject to approval. | 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|(2) | Fulija's annual new fish input quota is combined with Mrdjina Field B.                                                                                                                                                                                                                                                                                        | 
|(3) | Our award of the Lavdara concession requires a minimum utilization of twenty-four cages by April 2013. We plan to move currently unused cages to this location to meet this requirement once our Fiscal 2012-2013 harvest has been completed.                                                                                                                



All concession permits are awarded until the indicated expiration
dates. Concession permits can be revoked due to a violation or breach of the respective concession permit, including failure to
pay the concession fees or misuse, such as using the farming sites in contravention of the purpose set out in the permit, failing
to comply with environment protection regulations and damaging the area surrounding farming sites. Prior to the revocation of the
respective permit due to the violation and breach of the permit terms, the competent state authority gives the permit holder a
chance to cure the non-compliance. Upon expiration, each of these concessions will be open for public bid if the competent local
authority determines it is appropriate to subject the concession to a public bidding process. Concession permits may be terminated
prior to the expiration of the term, even without any breach or violation, if the Croatian Parliament determines it is in the public
interest to terminate the concession permit. Upon such termination, the concession user is entitled to recover damages.





14







In Mexico, we currently operate five sites, which are allowed
an aggregate input of 2,720 additional metric tons of Bluefin Tuna per annum. Following is a detailed breakdown of our farming
sites and the terms of our concessions in Mexico as of June 30, 2012:

|                       
|-----------------------
|                       
|Site                   
|Isla Coronado 1        
|Bahia Salsipuedes 1 (2)
|Isla de Coronado 2     
|Bahia Salsipuedes 2    
|Punta Banda            
|Total                  

_________________________________

|(1) | Based on maximum input per annum.                             | 
|--- | ------------------------------------------------------------- | 
|(2) | This concession site was moved to Punta Banda in fiscal 2012.



All concession permits are awarded until the indicated expiration
dates, but can be suspended or revoked by the authorities citing the public interest. All four of these concessions may be extended
with CONAPESCA's approval. For such purposes, an application requesting the extension of the concession period must be filed with
CONAPESCA at least 30 days in advance of expiration; where applicable, the environmental impact authorizations must be in full
force and effect. A concession title may be extended for an equivalent period, and the extension is subject to: (i) assessment
of compliance with all the obligations established in the concession title; (ii) the opinion of the National Institute of Fishing,
or “INAPESCA”, and (iii) compliance with the Programs of Aquaculture Management.Like in Croatia, we monitor
various indicators of sea water quality in our Mexico operations daily or monthly, as applicable.



In addition, Croatian and Mexican governmental agencies require
commercial fishing vessels to be licensed. Individual operators of the vessels are also subject to permit requirements. In Mexico,
in connection with applicable regulations, these permits are issued by CONAPESCA. The permits require us to inform the competent
authorities of the volume and location of the catch and report all the activities in the vessel through a log book.



We believe that our Croatian and Mexican operations are currently
in compliance with all material aspects of these quota and licensing requirements.



Reports to Securityholders



We file annual reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K and proxy and information statements and amendments to reports filed or furnished pursuant to
Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended. You may read and copy these materials at the SEC’s
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public
reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website (http://www.sec.gov) that contains
reports, proxy and information statements and other information regarding us and other companies that file materials with the
SEC electronically.



Item 1A. RISK FACTORS



The following factors could cause our actual results to differ
materially from those contained in forward-looking statements made in this Annual Report on Form 10-K and presented elsewhere by
our management from time to time. This list should not be considered to be a complete statement of all potential risks or uncertainties
as it does not describe additional risks of which we are not presently aware or that we do not currently consider material. We
may update our risk factors from time to time in our future periodic reports. Any of these factors may have a material adverse
effect on our business, financial condition, operating results and cash flows.





15







RISKS RELATED TO OUR BUSINESS



We rely on a single product, Bluefin Tuna, for all of
our revenues and therefore are highly susceptible to changes in market demand, which may be affected by factors over which we have
limited or no control.



We rely on a single product, Bluefin Tuna, for all of our revenues.
We therefore are highly susceptible to changes in market demand, which may be impacted by factors over which we have limited or
no control. Factors that could lead to a decline in market demand for Bluefin Tuna include, but are not limited to:



|• | economic conditions, particularly in Japan;                                   | 
|- | ----------------------------------------------------------------------------- | 
|• | evolving consumer preferences;                                                | 
|• | consumer perceptions about possible health risks related to Bluefin Tuna; and
|• | consumer perceptions about Bluefin Tuna fishing.                              | 
|  |                                                                               | 

We sell substantially all of our Bluefin Tuna inventory
to Japanese customers and distributors. Sales to Japanese customers and distributors accounted for 98.9% and 98.1% for the years
ended June 30, 2012 and 2011, respectively. Changes in economic conditions may negatively impact consumer spending. Prolonged
negative trends in the Japanese or global economies can adversely affect consumer spending and demand for Bluefin Tuna, which
could materially and adversely affect our business in terms of results of operations, financial position and liquidity.



Research has shown that wild tuna contains relatively high levels
of mercury, a toxic substance. Studies have suggested that mercury may cause health problems, including an increased risk of cardiovascular
disease and neurological symptoms. The high mercury concentration in tuna relative to other fish species is due to its large size
and resulting high position in the food chain and the subsequent accumulation of mercury from its diet. As awareness of the real
or perceived risks associated with the consumption of a fish that contains this substance spreads, increasing numbers of people
may refrain from consuming tuna.



Responding to fears of a collapse of Bluefin Tuna stock in the
Mediterranean and the Pacific Ocean, a number of tuna buyers have occasionally threatened boycotts unless drastic measures are
taken to protect the tuna stock. In addition, some restaurants in Europe and the United States have stopped buying Mediterranean
and Pacific Bluefin Tuna and replaced the Bluefin with other tuna species. If these boycotts become more widespread, they may have
a negative impact on our results of operations.



Changes in market demand for Bluefin Tuna could materially and
adversely affect our business in terms of results of operations, financial position and liquidity.



We will continue to encounter risks and difficulties that companies
at a similar stage of development frequently experience, including the potential failure to:



|• | obtain sufficient working capital to support our expansion;                                                                                                                                                                                                      | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|• | expand our product offerings and maintain the high quality of our products;                                                                                                                                                                                      | 
|• | manage our expanding operations;                                                                                                                                                                                                                                 | 
|• | maintain adequate control of our expenses allowing us to realize anticipated income growth;                                                                                                                                                                      | 
|• | implement our product development, sales, and acquisition strategies and adapt and modify them as needed;                                                                                                                                                       
|• | successfully integrate any future acquisitions; and                                                                                                                                                                                                              | 
|• | anticipate and adapt to changing conditions in the tuna farming industry resulting from changes in government regulations, mergers and acquisitions involving our competitors, technological developments and other significant competitive and market dynamics.
|  |                                                                                                                                                                                                                                                                  | 

If we are not successful in addressing any or all of
the foregoing risks, our results of operations may be materially and adversely affected.





16







Because we derive all of our revenue from our Bluefin
Tuna inventory and carry a significant portion of our assets in fish inventory, deterioration in inventory value and levels, which
may be due to various factors over which we exercise limited or no control, could materially impact our business, results of operations,
financial condition and liquidity.



We derive all of our revenue from Bluefin Tuna sales and carry
a significant portion of our assets in fish inventory. For the year ended June 30, 2012, we generated net revenue of $97.4 million
from inventory sales. At June 30, 2012, our fish inventory accounted for $40.7 million, or 37% of our total assets. Because of
our reliance on a single inventory item for all of our revenue, we are highly susceptible to changes in Bluefin Tuna market prices
and dependent on Bluefin Tuna sales as a source of liquidity. Bluefin Tuna market prices can be materially affected by foreign
exchange rate changes, changes in consumer discretionary spending, macro-economic conditions, particularly in Japan, evolving consumer
preferences, consumer perceptions about possible health risks related to sushi and sashimi in general, and Bluefin Tuna sushi or
sashimi in particular, consumer perceptions about Bluefin Tuna fishing, changing conditions in Bluefin Tuna fisheries, customer
consolidation and price seasonality.



We are also subject to significant changes in inventory value
due to factors related to inventory losses. In particular, mortality occurring during the farming process and inclement weather
can have a significant impact on inventory levels. For example, in the years ended June 30, 2012 and 2011, we suffered storm losses
totaling approximately $0.2 million and $2.9 million in book value, respectively. Finally, while we have not had historical problems
with infectious disease or water quality, each of these has the potential to have a material negative effect on our inventory.



Market price and inventory changes caused by factors over which
we have limited or no control can also materially and adversely affect our liquidity. A significant reduction in our inventory
levels or value could impair or prevent us from obtaining financing and executing our growth strategies, and could materially and
adversely affect our financial condition and results of operations. Such reduction in inventory could also result in a default
under our credit agreements and make any outstanding amounts immediately due and payable.



We may be adversely affected by fluctuations in raw material
prices used in our farming operations.



Aside from original acquisition costs, feed costs, including
sardines, anchovies, mackerel, herring, squid and other small fish related to farming our Bluefin Tuna is the largest component
of our cost of goods sold. Feed costs experience price volatility caused by events such as market fluctuations, weather conditions,
contamination of or disease outbreak in the population of fish used as feed or changes in governmental programs. The market price
of these feed materials may also experience significant upward adjustment, if, for instance, there is a material under-supply or
over-demand in the market resulting in a limitation on the availability of raw materials, which would hinder our ability to create
biomass through our farming operations. These price changes may ultimately result in increases in the selling prices of our products,
and may, in turn, adversely affect our sales volume, revenue and operating profit. If we are unable to pass on increases in our
raw material costs, our margins could be materially and adversely affected.



We farm a significant portion of our Bluefin Tuna, and
variations in our Bluefin Tuna's growth rates could have a material adverse effect on our business.



We farm a significant portion of our Bluefin Tuna and rely on
biomass increases resulting from our farming efforts for a substantial portion of inventory growth. For example, in the years ended
June 30, 2012 and 2011, biomass increases from farming accounted for 55% and 30% of our Bluefin Tuna inventory increases. Bluefin
Tuna growth rates are subject to significant variation due to numerous factors, many of which are partially or completely beyond
our control, including:



|• | water temperatures;                                                                         | 
|- | ------------------------------------------------------------------------------------------- | 
|• | the average size and overall size distribution of our Bluefin Tuna in any given period; and
|• | the quality of the feed we are able to obtain for our Bluefin Tuna.                         | 
|  |                                                                                             | 

Variations in Bluefin Tuna growth rates could have a
material and adverse effect on our liquidity and results of operations.



Our Mexico operations rely primarily on catching Bluefin
Tuna to replace or increase inventory levels, and variations in the quantity of Bluefin Tuna we catch during a fishing season can
materially impact our potential future revenues.



We have historically sold a significant percentage of our Bluefin
Tuna inventory at our Baja Mexico operations each year. To replace or increase inventory, we rely on our ability to catch Bluefin
Tuna during the fishing period. Fishing results can be highly variable, and we may be unable to catch an adequate number of Bluefin
Tuna necessary to replace or increase inventory levels during a fishing season. Any inability to do so would negatively impact
our potential future revenue and liquidity.





17







We may decide to purchase Bluefin Tuna from third parties,
which can be significantly more expensive than catching Bluefin Tuna ourselves and therefore would negatively impact our margins.



Depending in part upon our success in fishing, we may be required
to purchase Bluefin Tuna from third parties to meet our revenue targets. Certain purchases Bluefin Tuna from third parties has
historically been much more expensive than the acquisition costs associated with fishing. Further, adequate supplies of Bluefin
Tuna may not be available at reasonable prices, or at all. If we are required to purchase Bluefin Tuna from third parties, our
margins will be negatively affected. If adequate supplies of Bluefin Tuna are not available at all, our results of operations and
liquidity could be negatively affected.



Our management has significant discretion over how much
Bluefin Tuna to harvest each year, and a decision to harvest a significant portion of our inventory in a given year could materially
impact our future potential revenues.



Our management has significant discretion over how much Bluefin
Tuna to harvest each year. A decision to harvest a significant portion of our inventory in a given year could materially and negatively
impact our future potential revenues. A decision to farm an increased portion of our inventory in a given year could materially
and negatively impact revenues in that period because it would result in a small amount of fish harvested and sold during that
period, which is our only source of revenue.



We sell substantially all of our Bluefin Tuna to only
a few customers.



We have derived, and expect to continue to derive, nearly all
of our revenue from sales to a small number of customers. For the year ended June 30, 2012, our top six customers accounted for
99.3% of our net revenue. These customers sell almost all of their Bluefin Tuna to only a few trading houses for further sale into
the Japanese market. We do not have long-term agreements with our customers. Accordingly, a customer may, on short or no notice,
decide that it wishes to cease purchasing our Bluefin Tuna. The loss of any of these customers or non-payment of outstanding amounts
due to us by any of them could materially and adversely affect our business in terms of results of operations, financial position
and liquidity.



All of our significant customer contracts and some of
our supplier contracts are short-term and may not be renewable on terms favorable to us, or at all.



All of our customers and some of our suppliers operate through
purchase orders or short-term contracts. Though we have long-term business relationships with many of our customers and suppliers
and alternative sources of supply for key items, we cannot be sure that any of these customers or suppliers will continue to do
business with us on the same basis. Additionally, although we try to renew these contracts as they expire, there can be no assurance
that these customers or suppliers will renew these contracts on terms that are favorable to us, if at all. The termination of,
or modification to, any number of these contracts may adversely affect our business and prospects, including our financial performance
and results of operations.



A decline in discretionary consumer spending may adversely
affect our industry, our operations, and ultimately our profitability.



Luxury products, such as premium grade Bluefin Tuna sushi and
sashimi, are discretionary purchases for consumers. Any reduction in consumer discretionary spending or disposable income may affect
the Bluefin Tuna industry more significantly than other industries. Many economic factors outside of our control could affect consumer
discretionary spending, including the financial markets, consumer credit availability, prevailing interest rates, energy costs,
employment levels, salary levels, and tax rates. Any reduction in discretionary consumer spending could materially adversely affect
our business and financial condition.



Consolidation among our customers could lead to a reduction
in selling prices and customer loss, which would harm our business, financial condition, operating margins, and operating results.



Our reliance on a small number of customers for substantially
all of our revenues makes us particularly vulnerable to the effects of customer consolidation. Customer consolidation could lead
to the loss of customers and reduced purchases. In addition, customer consolidation could increase our existing and potential customers'
bargaining power, requiring us to reduce the price of Bluefin Tuna and offer more attractive sales terms. Ongoing consolidation
could therefore harm our business, financial condition, operating margins, and operating results.





18







Our business depends on our ability to secure and renew
relevant licenses, quotas and concessions directly or through third parties.



Bluefin Tuna fishing and farming is a highly regulated industry.
Our operations require licenses, permits and in some cases renewals of licenses and permits from various governmental authorities.
For example, commercial fishing operations are subject to government license requirements that permit them to make their catch.
Further, our operations can be subject to input quotas, which strictly limit the number of Bluefin Tuna that we can bring into
our farms in a single fishing season. In addition, our offshore farms that harbor the cages containing our Bluefin Tuna inventory
are constructed pursuant to concessions granted by the local governments that have jurisdiction over the waters where our farms
are located and, in some cases, have restrictions on the amount of biomass that we may maintain in the farms at any given time.
Our ability to obtain, sustain or renew such licenses and permits on acceptable terms, or at all, is subject to our ability to
renew our existing licenses and permits or obtain new licenses and permits, changes in regulations and policies, and to the discretion
of the applicable governments, among other factors. Our inability to obtain, or a loss of or denial of extension, to any of these
licenses or permits could hamper our ability to produce revenues from our operations.



We operate in a highly regulated industry, and regulatory
changes may have an adverse impact on our business.



Our business is subject to extensive regulation and licensing
requirements, and we commit material financial and employee resources to comply with these regulations. Failure to comply with
government regulations could subject us to civil and criminal penalties, could require us to forfeit property rights, and may affect
the value of our assets. We may also be required to take corrective actions, such as installing additional equipment or taking
other actions, each of which could require us to make substantial capital expenditures. We could also be required to indemnify
our employees in connection with any expenses or liabilities that they may incur individually in connection with regulatory action
against them. As a result, our future business prospects could deteriorate due to regulatory constraints, and our profitability
could be impaired by our obligation to provide such indemnification to our employees.



For years, the international community has been aware of and
concerned with the worldwide problem of depletion of natural fish stocks. In the past, these concerns have resulted in the imposition
of quotas that subject individual countries, such as Croatia, to strict limitations on the amount of fish they are allowed to catch.
These quotas do not currently apply to our Mexico operations and, if that changes in the future, our financial condition and results
of operations may be adversely affected. Environmental groups have been lobbying to have additional limitations on fishing imposed
and have even made suggestions that would limit the activities of fish farms, including input quotas, limits on the amount held
at farms and limits on the amount of fish that can be harvested in one season. If international organizations or national governments
were to impose additional limitations on fishing and fish farm operations or impose a fishing moratorium, this could have a negative
impact on our results of operations.



Our operations, revenue and profitability could be adversely
affected by changes in laws and regulations in the countries where we do business.



The governments of countries into which we sell our products,
from time to time, consider regulatory proposals relating to raw materials, food safety and markets, and environmental regulations,
which, if adopted, could lead to disruptions in distribution of our products and increase our operational costs, which, in turn,
could affect our profitability. To the extent that we increase our product prices as a result of such changes, our sales volume
and revenues may be adversely affected.



Furthermore, these governments may change import regulations
or impose additional taxes or duties on certain imports from time to time. These regulations and fees or new regulatory developments
may have a material adverse impact on our operations, revenue and profitability. If one or more of the countries into which we
sell our products bars the import or sale of Bluefin Tuna or related products, our available market would shrink significantly,
adversely impacting our results of operations and growth potential.



There could be changes in the policies of the governments
in the countries where we do business that may adversely affect our business.



The aquaculture industry in Croatia, Mexico and the importation
of Bluefin Tuna into Japan are subject to policies implemented by their respective governments. These governments may, for instance,
impose control over aspects of our business such as distribution of raw materials, Bluefin Tuna pricing and sales. If the raw materials
used by us or our products become subject to any form of government control, then depending on the nature and extent of the control
and our ability to make corresponding adjustments, there could be a material adverse effect on our business and operating results.



Separately, our business and operating results also could be
adversely affected by changes in policies of these governments such as: changes in laws, regulations or the interpretation thereof;
confiscatory taxation; restrictions on currency conversion, imports on sources of supplies; or the expropriation or nationalization
of private enterprises.





19







Climate change and related regulatory responses may impact
our business.



Climate change as a result of emissions of greenhouse gases
is a significant topic of discussion and may generate regulatory responses in the near future. For example, the changes in water
temperature that may result from climate change could harm our business. It is impracticable to predict with any certainty the
impact of climate change on our business or the regulatory responses to it, although we recognize that they could be significant.



To the extent that climate change increases the risk of natural
disasters or other disruptive events in the areas in which we operate, we could be harmed. While we maintain business recovery
plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, our
plans may not fully protect us from all such disasters or events.



We may incur material costs associated with non-compliance
with environmental regulations.



We are subject to various environmental regulations, including
those governing discharges to water, the management, treatment, storage and disposal of hazardous substances, and the remediation
of contamination. If we do not fully comply with environmental regulations, or if a release of hazardous substances occurs at or
from one of our facilities or vessels or as a result of insufficient disposal of Bluefin Tuna food waste and excrement, we may
be subject to penalties and could be held liable for the cost of remediation. For example, an accident involving one of our vessels
could result in significant environmental liability, including fines and penalties and remediation costs. If we are subject to
these penalties or costs, we may not be covered by insurance, or any insurance coverage that we do have may not cover the entire
cost. Compliance with environmental regulations could require us to make material capital expenditures and could have a material
adverse effect on our results of operations and financial condition.



If we or members of our fishing crews fail to comply with
applicable fishing and farming regulations, our vessels may become subject to liens, foreclosure risks and various penalties and
our fishing rights could be revoked.



Our industry is subject to highly complex statutes, rules and
regulations. For example, we are subject to statutory and contractual limitations on the amount of fish we may harvest, as well
as restrictions as to where we may fish. If we or members of our crew violate maritime law or otherwise become subject to civil
and criminal fines, penalties and sanctions, our vessels could be subject to forfeiture and our fishing rights could be revoked.
The violations that could give rise to these consequences include operating a vessel with expired or invalid vessel documentation
or in violation of trading restrictions, violating international fishing treaties or fisheries laws or regulations, submitting
false reports to a governmental agency, or interfering with a fisheries observer. Because our farming and harvesting activities
take place at sea, outside the day-to-day supervision of senior management, our employees and contractors may have been guilty
of infractions or violations that could subject them or us to significant penalties, which could have a material and adverse effect
on our results of operations and financial condition.



In addition, our vessels may become subject to liens imposed
by operation of maritime law in the ordinary course of business. These include liens for unpaid crew wages, liens for damages arising
from maritime torts, liens for various services provided to the vessel and liens arising out of the operation, maintenance and
repair of the vessel. The holders of these liens may have the right to foreclose on the vessel if the circumstances giving rise
to the liens are not adequately addressed.



Our business is capital intensive and we may require additional
financing in order to execute our business plan.



Commercial fishing operations and the establishment of commercial
aquaculture operations are both capital intensive. In order to expand our operations and our fishing fleet and to catch sufficient
quantities of Bluefin Tuna or purchase additional biomass to replace harvested or lost inventory, we may need to raise additional
capital. We may pursue sources of additional capital by issuing securities through various financing transactions or arrangements,
including joint ventures or projects, debt financing, equity financing or other means. In the past, we have addressed liquidity
needs by issuing short- and long-term debt with commercially unfavorable terms, sometimes with warrants to purchase shares of our
common stock. We may also consider advance sales and/or outright sales of tuna to customers prior to the time at which the tuna
has reached optimal biomass, which could reduce our future revenue. For example, in the year ended June 30, 2012, we began harvesting
Bluefin Tuna in July. There can be no assurance that any additional financing will be available when needed on commercially reasonable
terms, or at all. The inability to obtain additional capital may reduce our ability to continue to conduct business operations
as currently contemplated. Any additional equity financing may involve substantial dilution to our then-existing stockholders.





20







In addition, sales of Bluefin Tuna typically occur during the
winter (October through February) when the sea temperature is lowest to maximize the quality and value of the product. There are
generally very limited sales generated during the rest of the year. Accordingly, we need to finance our operations with available
capital during the non-selling months.



Ongoing liquidity issues may hamper our ability to operate
our business.



Our business is highly seasonal. Our harvesting season extends
primarily from October to March when the waters are coldest resulting in the firmest and highest quality meat. During this period
we generate substantially all of our annual revenues. For the remainder of the year we have been reliant primarily on short-term
bridge loans as a source of cash to fund our operations. In the past, we have been able to secure short-term loans to cover temporary
cash needs. If for any reason we are unsuccessful in securing these types of financing arrangements and we are unable to find alternative
sources of liquidity, we may be required to curtail our operations.



Seasonality and variability of our businesses may cause
volatility in the market value of our securities and may hinder our ability to make timely payments on our debt.



Our business is seasonal in nature, and our net sales and operating
results vary significantly from quarter to quarter. For example, we generate almost all of our revenue between October and February
due to the harvesting of Bluefin Tuna, which has the highest revenue per kilogram of product sold during this period.



Our harvesting season straddles more than one quarter. As a
result, the timing of the recognition of sometimes significant amounts of revenue from one quarter to another can be a function
of unpredictable factors, such as the timing of when our customers arrive at our farms to purchase our Bluefin Tuna. Consequently,
our results of operations for any particular quarter may not be indicative of results of operations for future quarterly periods,
which make it difficult to forecast our results for an entire year. This variability may cause volatility in the market price of
our shares. In addition, the seasonality and variability of our business means that at certain times of the year our cash receipts
are significantly higher than at other times. Consequently, given that we are required to make regular interest payments to debt
holders, there is a risk that we will experience cash shortages. See “Management's Discussion and Analysis of Financial Condition
and Results of Operations - Seasonality and Fiscal Year.”



We may be unable to effectively manage our growth, which
may harm our profitability.



Our strategy envisions expanding our business. If we fail to
effectively manage our growth, our financial results could be adversely affected. Growth may place a strain on our management systems
and resources. We must continue to refine and expand our business development capabilities, our systems and processes and our access
to financing sources. As we grow, we must continue to hire, train, supervise and manage new employees. We may be unable to:



|• | meet our capital needs;                                                                                     | 
|- | ----------------------------------------------------------------------------------------------------------- | 
|• | allocate our human resources optimally;                                                                     | 
|• | identify and hire qualified employees or retain valued employees; or                                        | 
|• | incorporate effectively the components of any business that we may acquire in our effort to achieve growth.
|  |                                                                                                             | 



If we are unable to manage our growth, our operations
and our financial results could be adversely affected by inefficiency, which could diminish our profitability.



We expect that acquisitions will continue to be an important
part of our strategy. If we are unable to effectively complete and integrate acquisitions, this could materially and adversely
affect our business, financial condition, and results of operations.



A significant part of our growth strategy is to continue to
pursue acquisitions. Achieving the anticipated benefits of past and possible future acquisitions will depend in part upon whether
we can integrate acquired operations, products, and technology in a timely and cost-effective manner. The acquisition and integration
process can be complex, expensive, and time consuming, and may cause an interruption of, or loss of momentum in, activities and
operations of both companies. We may not find suitable acquisition candidates, and acquisitions we complete may be unsuccessful.
We may not consummate any particular transaction, but may nonetheless incur significant management time and effort and acquisition-related
costs. If we consummate a transaction, we may be unable to integrate and manage acquired products and businesses effectively and
if growth resulting from the transaction does not meet our expectations, our financial results could be negatively impacted. Assimilating
previously acquired companies or companies we may seek to acquire involves numerous risks, including but not limited to:





21







|• | adverse effects on existing customer relationships;                                                                                                                                                  | 
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|• | difficulties in integrating or retaining acquired company key employees;                                                                                                                             | 
|• | potential downward pressure on operating margins due to lower operating margins of acquired businesses, increased headcount costs, and other expenses;                                               | 
|• | difficulties in integrating acquired company operations, such as IT resources, farming processes, and financial and operational data;                                                                | 
|• | diversion of our management's attention from day-to-day business when evaluating and negotiating these transactions and integrating an acquired business;                                            | 
|• | potential incompatibility of business cultures;                                                                                                                                                      | 
|• | difficulties managing different business models;                                                                                                                                                     | 
|• | post-acquisition discovery of previously unknown liabilities assumed with the acquired business;                                                                                                    
|• | the failure to understand and compete in geographies where we have limited experience;                                                                                                               | 
|• | unanticipated litigation in connection with or as a result of an acquisition;                                                                                                                        | 
|• | the potentially negative impact on our earnings per share; and                                                                                                                                       | 
|• | potential dilution to existing stockholders if we issue equity securities to finance acquisitions and potential increased debt either assumed in the acquisition or used to finance the acquisition. | 
|  |                                                                                                                                                                                                      | 



If we are unable to effectively execute acquisitions, our business,
financial condition, and operating results could be adversely affected.



We rely on our international operations for substantially
all of our revenue and revenue growth, and international operations and expansion involve numerous risks that could adversely impact
our business, financial condition, and operating results.



In fiscal 2009 through 2012, we generated all of our revenue
from sales outside the United States. We anticipate that international operations will account for substantially all of our revenue
in the foreseeable future. Our business and operating results therefore significantly depend upon our international operations
and our ability to continue expanding in our existing international markets and enter into new international markets. In expanding
our business internationally, we have entered and intend to continue to enter markets in which we have limited or no experience.
We may fail to anticipate natural or competitive conditions in new markets that differ from those in our existing markets. These
conditions may make it difficult or impossible for us to effectively operate in these markets. If our expansion efforts in existing
and new markets are unsuccessful, our business, financial condition, and operating results would be materially and adversely affected.



We have been and continue to be exposed to other risks associated
with international operations, including:



|• | difficulties and costs of staffing and managing international operations across different geographic areas;                                                                                   | 
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|• | changes in currency exchange rates and controls;                                                                                                                                              | 
|• | potentially higher tax rates or additional tax liabilities;                                                                                                                                   | 
|• | uncertainty regarding tax and regulatory requirements in multiple jurisdictions;                                                                                                              | 
|• | the lack of financial and political stability in foreign countries, preventing overseas sales growth;                                                                                        
|• | our ability to comply with customs, import/export, and other trade compliance regulations of the countries in which we do business, together with any unexpected changes in such regulations; | 
|• | language and cultural barriers;                                                                                                                                                               | 
|• | longer payment cycles;                                                                                                                                                                        | 
|• | greater difficulty in accounts receivable collection;                                                                                                                                         | 
|• | limitations on repatriation of earnings or on the conversion of foreign currencies;                                                                                                           | 
|• | inadequate local infrastructure that could result in business disruptions; and                                                                                                                | 
|• | any related conflicts or similar events worldwide.                                                                                                                                            | 
|  |                                                                                                                                                                                               | 



For example, we conduct a substantial amount of business in
Mexico. In recent years, there has been an increase in organized crime in Mexico. This has not had an impact on our operations,
but this does increase the risk of doing business in Mexico. Additionally, we are also subject to regulations imposed by governments,
and also to examinations by the tax authorities in Mexico and Croatia. Significant changes to these government regulations and
to assessments by the tax authorities can have a negative impact on our operations and operating results in Mexico and Croatia.





22







In addition, our global operations are subject to numerous U.S.
and foreign laws and regulations, including those related to anti-corruption, tax, corporate governance, imports and exports, financial
and other disclosures and labor relations. These laws and regulations are complex and may have differing or conflicting legal standards,
making compliance difficult and costly. If we violate these laws and regulations, we could be subject to fines, penalties or criminal
sanctions, and may be prohibited from conducting business in one or more countries. Any violation could have a material adverse
effect on our business, financial condition, and operating results.



We conduct our business by means of contractual arrangements.
If the Croatian and Mexican governments determine that these contractual arrangements do not comply with applicable regulations,
our business could be adversely affected.



There are uncertainties regarding the interpretation and application
of Croatian and Mexican laws, rules and regulations, including the laws, rules and regulations governing the validity and enforcement
of the contractual arrangements. Although we have been advised by our counsel that based on their understanding of current laws,
rules and regulations, the structure for operating our business in Croatia and Mexico (including our corporate structure and contractual
arrangements with Lubin in Croatia and Marpesca in Mexico and their respective owners) comply with all applicable laws, rules and
regulations, and do not violate, breach, contravene or otherwise conflict with any applicable laws, rules or regulations, we cannot
assure you that the regulatory authorities will not determine that our corporate structure and contractual arrangements violate
laws, rules or regulations. If the regulatory authorities determine that our contractual arrangements are in violation of applicable
laws, rules or regulations, our contractual arrangements will become invalid or unenforceable. In addition, new laws, rules and
regulations may be introduced from time to time to impose additional requirements that may be applicable to our contractual arrangements.



The Croatian and Mexican governments have broad discretion in
dealing with violations of laws and regulations, including levying fines, revoking business and other licenses and requiring actions
necessary for compliance. In particular, licenses and permits issued or granted to us by relevant governmental bodies may be revoked
at a later time by higher regulatory bodies. We cannot predict the effect of the interpretation of existing or new laws or regulations
on our businesses. We cannot assure you that our current ownership and operating structure would not be found in violation of any
current or future laws or regulations. As a result, we may be subject to sanctions, including fines, and could be required to restructure
our operations or cease to provide certain services. Any of these or similar actions could significantly disrupt our business operations
or restrict us from conducting a substantial portion of our business operations, which could materially and adversely affect our
business, financial condition and results of operations.



Our contractual arrangements with Lubin and its respective
owner may not be as effective in providing control over these entities as direct ownership.



We have no equity ownership interest in Lubin, and rely on contractual
arrangements to control and operate Lubin and its businesses. These contractual arrangements may not be as effective in providing
control over the company as direct ownership. For example, Lubin could fail to take actions required for our business despite its
contractual obligation to do so. If Lubin fails to perform under its agreements with us, we may have to rely on legal remedies
under Croatian law, which may not be effective. In addition, we cannot assure you that the owners of Lubin will act in our best
interests.



Our operation in Mexico is located in an area that is
subject to severe storms and local predators that may damage our inventory, thereby inhibiting our ability to make sales or obtain
financings.



A large portion of our cash needs are met by short-term loans
that are secured by live fish inventory. Our subsidiary, Baja Aqua Farms, located in Baja, Mexico, maintains its farming operations
off the Pacific coast. This area is frequently visited by severe storms, including tsunamis. These storms can cause (as they have
in the past) damage to the cages or swells large enough to allow predators such as seals and sea lions to gain entry to our cages
and kill our Bluefin Tuna. In the years ended June 30, 2012 and 2011, we incurred storm losses of $0.2 million and $2.9 million,
respectively. We maintain insurance covering these losses, subject to high deductibles. If these events occur with greater frequency,
we may incur significant losses as a consequence of our inability to sell our inventory to our customers resulting in a negative
impact on our results of operations. In addition, loss of value of our live inventory may prevent us from obtaining secured short-term
loans which would hamper our ability to operate our business.



Exchange rate fluctuations could have an adverse effect
on our results of operations.



Our operations are conducted in foreign currencies. For example,
substantially all of our sales are paid for in Japanese Yen while most of our expenses are paid for in Croatian Kunas, Euros and
Mexican Pesos. Any fluctuation in the value of the Japanese Yen against these currencies or any other currency, such as the U.S.
Dollar, will affect the Japanese Yen value of our revenues in cases of revenues that are received in foreign currencies, which
could have a material adverse effect on our business, prospects, financial condition and results of operations and thus affect
the market price of our ordinary shares in the U.S.

Although we have not historically done so, we may, from time
to time, seek to reduce the effect of exchange rate fluctuations on our operating results by purchasing derivative instruments
such as foreign exchange forward contracts to cover our intercompany indebtedness or outstanding receivables. However, we may not
be able to purchase contracts to insulate ourselves adequately from foreign currency exchange risks. In addition, any such contracts
may not perform effectively as a hedging mechanism. See “Management's Discussion and Analysis of Financial Conditions and
Results of Operations - Quantitative and Qualitative Disclosures about Market Risk.”





23







Our indebtedness could adversely affect our operations,
including our ability to perform our obligations, fund working capital and pay dividends.



As of June 30, 2012, we had approximately $42.3 million of borrowings
and $21.9 million of available borrowings. We may also be able to incur substantial additional indebtedness.



Our indebtedness could have important consequences to our operations,
including the following:\



|• | we could have difficulty satisfying our debt obligations, and if we fail to comply with these requirements, an event of default could result;                                                                                                                                                                | 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|• | if an event of default occurs, our lenders could foreclose on the security interests they hold on substantially all of our assets, as well as certain pledges of our and our subsidiaries' common stock;                                                                                                     | 
|• | we may be required to dedicate a substantial portion of our cash flow from operations to required payments on indebtedness, thereby reducing the cash flow available to fund working capital, capital expenditures and other general corporate activities or to pay dividends;                               | 
|• | covenants relating to our indebtedness restrict our ability to make distributions to our shareholders;                                                                                                                                                                                                      
|• | covenants relating to our indebtedness may limit our ability to obtain additional financing for working capital, capital expenditures and other general corporate activities, which may limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | 
|• | we may be more vulnerable to general adverse economic and industry conditions; and                                                                                                                                                                                                                           | 
|• | we may have difficulty repaying or refinancing our obligations on their respective maturity dates.                                                                                                                                                                                                           | 
|  |                                                                                                                                                                                                                                                                                                              | 



If any of these consequences occur, our financial condition,
results of operations and ability to pay dividends could be adversely affected. This, in turn, could negatively affect the market
price of our shares, and we may need to undertake alternative financing plans, such as refinancing or restructuring our debt, selling
assets, reducing or delaying capital investments or seeking to raise additional capital. We cannot assure you that any refinancing
would be possible, that any assets could be sold, or, if sold, of the timing of the sales and the amount of proceeds that may be
realized from those sales, or that additional financing could be obtained on acceptable terms, if at all.



Our business is subject to interest rate risk and variations
in interest rates may negatively affect our financial condition and results of operations.



A significant portion of our long-term debt bears interest at
variable rates based on certain announced interest rates plus margins stipulated in those agreements. We also finance capital acquisitions
via capital leases at fixed rates of interest and the notes will be set at a fixed interest rate. As such, our net income is sensitive
to both short-term and long-term movements in interest rates. We monitor, on an ongoing basis, market conditions and interest rate
fluctuations that could result in increased interest expense on debt bearing variable rates of interest or on any new borrowing
at fixed rates to finance capital expenditures. To manage this risk, we have and may continue to enter into interest rate swaps,
caps or similar instruments based on anticipated exposure; however, we may not be able to prevent changes in interest rates from
having a material adverse effect on our results of operations and financial condition. There are many economic factors outside
our control that have in the past and may, in the future, impact rates of interest including publicly announced indices that underlie
the interest obligations related to a significant portion of our debt. Factors that impact interest rates include governmental
monetary policies, inflation, recession, changes in unemployment, the money supply, international disorder and instability in domestic
and foreign financial markets. Should interest rates increase, it is likely that we will incur increased interest payment obligations
and related expense. Such increases could have a material adverse effect on our financial condition and results of operations.





24







The loss of Oli Steindorsson, our Chairman, President
and Chief Executive Officer, or any of our senior management, could impair our ability to operate.



If we lose Oli Steindorsson, our Chairman, President and Chief
Executive Officer, our business could suffer. He has extensive contacts in Japan, where substantially all of our revenues are generated,
and is fluent in Japanese. We have entered into an employment agreement with Mr. Steindorsson. The loss of Mr. Steindorsson could
have a material adverse effect on our operations. If we were to lose our Chairman, President and Chief Executive Officer, we may
experience temporary difficulties in competing effectively, developing our technology and implementing our business strategies.
We have a small management team, and the loss of a key individual or inability to attract suitably qualified staff could materially
adversely impact our business. We do not have key man life insurance in place for any of our key personnel.



Our operations are labor intensive, and our failure to
attract and retain qualified employees may adversely affect us.



The Bluefin Tuna fishing and farming industry is labor intensive
and requires an adequate supply of qualified workers willing to work in rough weather and potentially dangerous operating conditions
at sea. We may experience a high rate of employee turnover. Labor shortages, the inability to hire or retain qualified employees
or increased labor costs could have a material adverse effect on our ability to control expenses and efficiently conduct our operations.
We may not be able to continue to hire and retain the sufficiently skilled labor force necessary to operate efficiently and to
support our operating strategies, or we may not continue to experience favorable labor relations. In addition, our labor expenses
could increase as a result of continuing shortages in the supply of personnel. Changes in applicable laws and regulations could
increase labor costs, which could have a material adverse effect on our business, results of operations and financial condition.



We depend on an affiliate and third parties for our fishing
and towing operations.



A large portion of our Croatia fishing and towing operations
is conducted by Lubin, an affiliated entity owned by Dino Vidov, Kali Tuna's General Manager. Lubin owns a fleet of seven fishing
vessels that catch fish, typically in the Adriatic, store them in cages and tow those cages back to our farming locations where
they are transferred into permanent holding pens. We do not have our own fishing vessels in Croatia and, moreover, do not possess
the requisite licenses to catch our own fish. If for any reason, Lubin would be unable or unwilling to continue to provide its
services to us, we would not be able to fish in Croatia until we find a replacement for Lubin. Failure to find a replacement for
Lubin, even on a temporary basis, may have an adverse effect on our results of operations. However, the Company has entered into
twenty-year agreements whereby Lubin is required to provide services exclusively to Kali Tuna related to fish farming, live Atlantic
Bluefin Tuna catching and catching of bait fish. Kali Tuna may also purchase feed and Bluefin Tuna from other suppliers.



Similarly, our Mexico fishing operations are currently conducted
through third party leases of boats that have fishing licenses for Bluefin Tuna and are capable of catching the fish live. If for
any reason we are unable to obtain such leases along with the rights to acquire the Bluefin Tuna in a given year we would likely
have a temporary interruption in the supply of fish coming into the farm. Failure to lease or acquire boats with the requisite
ability and licenses, even on a temporary basis, may have an adverse effect on our results of operations.



Our insurance coverage may be inadequate to cover liabilities
we may incur or to fully replace a significant loss of assets.



Our involvement in the fish farming industry may result in our
becoming subject to liability for pollution, property damage, personal injury or other hazards. Also, we are subject to loss or
mortality of our tuna inventories. Although we believe we have obtained insurance in accordance with industry standards to address
such risks, such insurance has limitations on liability and/or deductible amounts that may not be sufficient to cover the full
extent of such liabilities or losses. In addition, such risks may not, in all circumstances, be insurable or, in certain circumstances,
we may choose not to obtain insurance to protect against specific risks due to the high premiums associated with such insurance
or for other reasons. The payment of such uninsured liabilities or incurring uncovered losses of our tuna inventories would reduce
the funds available to us. If we suffer a significant event or occurrence that is not fully insured, or if the insurer of such
event is not solvent, we could be required to divert funds from capital investment or other uses towards covering our liability
or loss for such events.





25







Failure to comply with the U.S. foreign corrupt practices
act and local anti-corruption laws could subject us to penalties and other adverse consequences.



Our executive officers, employees and other agents may violate
applicable law in connection with the marketing or sale of our products, including the U.S. Foreign Corrupt Practices Act, or the
FCPA, which generally prohibits United States companies from engaging in bribery or other prohibited payments to foreign officials
for the purpose of obtaining or retaining business. In addition, we are required to maintain records that accurately and fairly
represent our transactions and have an adequate system of internal accounting controls. Foreign companies, including some that
may compete with us, are not subject to these prohibitions, and therefore may have a competitive advantage over us. The jurisdictions
that our executives are active in prohibit bribery of government officials. However, corruption, extortion, bribery, pay-offs,
theft and other fraudulent practices could potentially occur from time-to-time.



While we intend to implement measures to ensure compliance with
the FCPA by all individuals involved with our company, our employees or other agents may engage in such conduct without our knowledge
for which we might be held responsible. If our employees or other agents are found to have engaged in such practices, we could
suffer severe penalties and other consequences that may have a material adverse effect on our business, financial condition and
results of operations. In addition, our brand and reputation, our sales activities or our stock price could be adversely affected
if we become the target of any negative publicity as a result of actions taken by our employees or other agents.



Potential conflicts of interest with our majority shareholder
and one of our officers may result in actions that are adverse to our interests and those of our shareholders.



Atlantis Group hf, an Icelandic corporation, is a supplier of
fresh and frozen premium sustainable fish and seafood. At June 30, 2012, Atlantis was the beneficial owner of more than 60% of
our issued and outstanding shares. In addition, Oli Valur Steindorsson, our Chairman, President and Chief Executive Officer, and
Mike Gault, one of our directors, are shareholders and executive officers of Atlantis. As a result, Atlantis exercises control
over the affairs of the Company. In addition, certain conflicts of interest now exist and will continue to exist between us and
our executive officers and directors due to their having other employment, business and investment interests to which they devote
some attention and they are expected to continue to do so. For example, Tim Fitzpatrick, our Chief Financial Officer, is the Chief
Financial Officer of a separate private company. While Mr. Fitzpatrick currently has no conflicts in regards to acting as our Chief
Financial Officer, in the event that a conflict of interest arises, Mr. Fitzpatrick may be forced to resign. Although we have created
internal mechanisms for the resolution of potential conflicts of interest, there can be no assurance that in the future, Atlantis
and the afore-mentioned individuals will necessarily act in our best interest.



Joint venture investments could be adversely affected
by our lack of sole decision-making authority, our reliance on co-venturers' financial condition and disputes between us and our
co-venturers.



We may continue to co-invest with other third parties through
partnerships, joint ventures or other entities, acquiring non-controlling interests in or sharing responsibility for managing the
affairs of a property, partnership, joint venture or other entity. Consequently, with respect to any such arrangement, we would
not be in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity.
Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present were
a third party not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their
share of required capital contributions. Partners or co-venturers may have economic or other business interests or goals which
are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives,
and they may have competing interests in our markets that could create conflict of interest issues. Such investments may also have
the potential risk of impasses on decisions, such as a sale, because neither we nor the partner or co-venturer would have full
control over the partnership or joint venture. In addition, a sale or transfer by us to a third party of our interests in the joint
venture may be subject to consent rights or rights of first refusal, in favor of our joint venture partners, which would in each
case restrict our ability to dispose of our interest in the joint venture. Disputes between us and partners or co-venturers may
result in litigation or arbitration that would increase our expenses and prevent our officers and/or directors from focusing their
time and effort on our business. Consequently, actions by or disputes with partners or co-venturers might result in subjecting
properties owned by the partnership or joint venture to additional risk. In addition, we may in certain circumstances be liable
for the actions of our third-party partners or co-venturers. Our joint ventures may be subject to debt and, in the current volatile
credit market, the refinancing of such debt may require equity capital calls.





26







It may be difficult to effect service of process and enforcement
of legal judgments upon our company, our officers and directors because one of our executive officers and several of our directors
reside and substantially all of our assets are located outside the United States.



One of our executive officers and three of our directors, Oli
Valur Steindorsson, James White and Mike Gault, reside outside the United States. As a result, effecting service of process on
our executive officers and directors may be difficult within the United States. Also, substantially all of our assets are located
outside the United States and any judgment obtained in the United States against us may not be enforceable outside the United States.



Adverse litigation results could affect our business.



We are subject to various legal proceedings. Litigation can
be lengthy, expensive and disruptive to our operations, and results cannot be predicted with certainty. An adverse decision could
result in monetary damages or injunctive relief that could affect our business, operating results or financial condition. Additional
information regarding certain of the lawsuits we are involved in is discussed under “Business - Legal Proceedings.”



Outbreaks of disease can adversely affect our revenues
and operating margins.



The outbreak of disease and other events could significantly
restrict our ability to conduct our operations. The productivity and profitability of any tuna farming operation depends, to a
great extent, on the ability to maintain fish health and control disease. Disease can reduce the number of offspring and hamper
the growth of tuna. Diseases can be spread from other infected tuna, in feed, in water, by people swimming in the tanks or through
the air. While we have not experience any disease outbreaks to date, we may experience outbreaks in the future. Any such outbreaks
could have a material adverse effect on our business, financial condition and results of operations.



In addition, an outbreak of disease could result in governmental
restrictions on the import and export of our Bluefin Tuna to or from our suppliers, facilities or customers even if our stock were
not infected with such disease. This could result in the cancellation of orders by our customers and create adverse publicity that
may have a material adverse effect on our business, financial condition and results of operations. Furthermore, any outbreak of
tuna disease may result in a loss of consumer confidence in the protein products affected by the particular disease, adverse publicity
and the imposition of export restrictions.



Any actual contamination of our products resulting from
catching, towing, farming or harvesting of Bluefin Tuna or negative press from contamination experienced by other companies in
our industry may adversely affect our operations or reduce our margins or profits.



We actively seek to control the quality of our Bluefin Tuna
and avoid risk of contamination in our catching, towing, farming and harvesting of such products; however no quality control program
is guaranteed to be completely effective. We are dependent on others for the reliable safe transportation of our products to the
market place and the quality of our final product as experienced by the consumer may be impacted by disruptions in the transit
process beyond our control. In addition, if our competitors experience problems with contamination of their products, even if we
do not concurrently suffer similar adverse events, publicity of such problems could negatively impact our reputation. Actual contamination
or reports of industry problems with contamination or poor quality may have a material adverse effect on our operations, including
an increase in product liability claims, higher quality control and transport costs, reduced margins and decreased consumer interest
in our products.



We have entered into debt financing deals in Mexico and
Croatia, which have and may continue to restrict the repatriation of cash from our operating subsidiaries.



We have entered into debt financing deals in Mexico and Croatia,
which include restrictions on transfers of cash out of the country. We may not be able to repatriate cash at exchange rates beneficial
to the Company, which could have a material adverse effect on our financial position, results of operations or cash flows.



We do not have any registered patents or other registered
intellectual property on our production processes and we may not be able to maintain the confidentiality of our processes.



We have no patents or registered intellectual property covering
our farming and harvesting processes and we rely on the confidentiality of these processes in farming a competitive product. The
confidentiality of our know-how may not be maintained and we may lose any meaningful competitive advantages that arise through
our proprietary processes. Due to the lack of such protection, unauthorized parties may attempt to copy or otherwise obtain and
use our proprietary farming methods. Monitoring unauthorized use of our farming process is difficult and this may have a material
adverse effect on our competitive advantage.





27







Our proprietary farming system could be replicated creating
additional competition in the Bluefin Tuna industry.



Despite our first mover advantage and the substantial amount
of research and development and resources that we believe would be required to replicate our extended cycle farming system, over
time and with significant capital, it is possible that other producers could replicate our model with a certain degree of success.
This could put our market share and competitive advantages at risk.



Ineffective disclosure controls and procedures and internal
control over financial reporting may result in material misstatements of our financial statements.



In this Annual Report on Form 10-K for the year ended June 30,
2012, we have disclosed that our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls
and procedures and internal control over financial reporting were not effective. This conclusion was based on their assessment
that there were control deficiencies that constituted a material weakness related to accounting for deferred income taxes in international
jurisdictions, such as:

|  |                                                                                                                                                                          
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|• | Inadequate consideration of the provisions of ASC 740 by our external service provider resulting in process inadequacies in the accounting for deferred income taxes; and
|• | Inefficient and ineffective review practices by our internal personnel.                                                                                                  



Even after corrective actions are implemented, the effectiveness
of our controls and procedures may be limited by a variety of risks including:



|• | faulty human judgment and simple errors, omissions or mistakes;                                                               | 
|- | ----------------------------------------------------------------------------------------------------------------------------- | 
|• | collusion of two or more people;                                                                                              | 
|• | inappropriate management override of procedures; and                                                                          | 
|• | the risk that enhanced controls and procedures may still not be adequate to assure timely and reliable financial information.
|  |                                                                                                                               | 



These control deficiencies, if un-remedied, may result in a
reasonable possibility that a material misstatement of the annual or interim financial statements could not have been, or may not
be, prevented or detected on a timely basis.



RISKS RELATED TO OUR COMMON STOCK



Because we missed the filing deadlines for our Annual
Report on Form 10-K for the fiscal year ended June 30, 2011 and our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2011 and September 30, 2011, our stock may be removed from the OTC Bulletin Board, resulting in greater difficulties to trade
our stock.



Our common stock is included for quotation on the OTC Bulletin
Board. Under the rules of FINRA, the self-regulatory organization that governs the OTC Bulletin Board, if an issuer fails to file
a complete required annual or quarterly reports by the due dates for such reports three times in a prior two-year period, its securities
may be removed from the OTC Bulletin Board. We failed to timely file our Quarterly Report on Form 10-Q for the quarters ended March
31, 2011 and September 30, 2011 and our Annual Report on Form 10-K for the fiscal year ended June 30, 2011 during a two-year measurement
period. Therefore, our common stock may be removed from the OTC Bulletin Board. Such removal could significantly affect the market
price and liquidity of our common stock and/or hamper our ability to raise additional capital.



The market price of our common stock may be, and is likely
to continue to be, highly volatile and subject to wide fluctuations.



The market price of our common stock is likely to be highly
volatile and could be subject to wide fluctuations in response to a number of factors that are beyond our control, including:



|• | dilution caused by our issuance of additional shares of common stock and other forms of equity securities, which we expect to make in connection with future acquisitions or capital financings to fund our operations and growth, to attract and retain valuable personnel and in connection with future strategic partnerships with other companies; | 
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
|• | variations in our operating results as the result of fluctuations in our revenues and operating expenses, expenses that we incur, prices of feed used in our business, the price that customer are willing and able to pay for our products and other factors;                                                                                         | 
|• | announcements of new acquisitions or other business initiatives by our competitors;                                                                                                                                                                                                                                                                    | 
|• | our ability to take advantage of new acquisitions or other business initiatives;                                                                                                                                                                                                                                                                       | 
|• | quarterly variations in our revenues and operating expenses;                                                                                                                                                                                                                                                                                           | 
|• | changes in the valuation of similarly situated companies, both in our industry and in other industries;                                                                                                                                                                                                                                               
|• | changes in analysts' estimates affecting our company, our competitors and/or our industry;                                                                                                                                                                                                                                                             | 
|• | changes in the accounting methods used in or otherwise affecting our industry;                                                                                                                                                                                                                                                                         | 
|• | additions and departures of key personnel;                                                                                                                                                                                                                                                                                                             | 
|• | announcements by relevant governments pertaining to additional quota restrictions; and                                                                                                                                                                                                                                                                 | 
|• | fluctuations in interest rates and the availability of capital in the capital markets.                                                                                                                                                                                                                                                                 | 
|  |                                                                                                                                                                                                                                                                                                                                                        | 



28









Many of these and other factors are largely beyond our control,
and the impact of these risks, singly or in the aggregate, may result in material adverse changes to the market price of our common
stock and/or our results of operations and financial condition.



We became a public company through our acquisition of
a public shell company pursuant to which we assumed all known and unknown potential liabilities of our predecessor entity.



We became a public company through the acquisition of a public
shell company that did not have significant operations or assets at the time of the transaction, but previously was engaged in
selling and marketing lighting products and accessories in the North American markets. We may be exposed to undisclosed liabilities
related to the prior operations of the shell company and we could incur losses, damages or other costs as a result of such exposure.
These losses, damages and costs from such undisclosed liabilities could be significant, and could have a material adverse effect
on our business, financial condition and results of operations.



We do not currently intend to pay dividends on our common
stock.



We do not intend to declare dividends in the near future, as
we anticipate that we will reinvest any available funds and future earnings in the development and growth of our business. Therefore,
you would not receive any funds unless you sell your common stock, and you may be unable to sell your shares on favorable terms
or at all. You may not achieve a positive return on your investment in our common stock, and you may lose part or all of your investment.



Our directors and executive officers have a high concentration
of common stock ownership.



Based on the 59,512,066 shares of common stock that are outstanding
(excluding shares underlying Warrants) as of June 30, 2012, our executive officers and directors beneficially own approximately
68% of our outstanding common stock. Such a high level of ownership by such persons may have a significant effect in delaying,
deferring or preventing any potential change in control of our company. Additionally, as a result of their high level of ownership,
our officers and directors might be able to strongly influence the actions of our board of directors and the outcome of actions
brought to our stockholders for approval. Such a high level of ownership may adversely affect the voting and other rights of our
stockholders.



Applicable SEC rules governing the trading of “penny
stocks” limit the trading and liquidity of our common stock, which may affect the trading price of our common stock.



Our common stock may be considered a “penny stock”
and be subject to SEC rules and regulations which impose limitations upon the manner in which such shares may be publicly traded
and regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are
equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges, provided
that current price and volume information with respect to transactions in such securities is provided by the exchange or system).
The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to
deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market.
The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of
the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny
stock held in the customer’s account. In addition, the penny stock rules generally require that prior to a transaction in
a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing
the level of trading activity in the secondary market for a stock that becomes subject to the penny stock rules which may increase
the difficulty investors may experience in attempting to liquidate such securities.





29







PART II



Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



The following discussion and analysis of our financial condition
and results of operations for the years ended June 30, 2012 and 2011 should be read in conjunction with our consolidated financial
statements and the notes thereto and other financial information included elsewhere in this Annual Report on Form 10-K. Certain
statements in this “Management’s Discussion and Analysis (“MD&A”) of Financial Condition and Results
of Operations” are “forward-looking statements.” See “Forward-Looking Statements” under Item 1. We
intend this MD&A section to provide you with a narrative from the perspective of our management on our financial condition,
results of operations, liquidity and certain other factors that may affect our future results. The following sections comprise
this MD&A:



|• | Overview                                   | 
|- | ------------------------------------------ | 
|• | Outlook                                    | 
|• | Key Business Indicators                    | 
|• | Components of Revenue and Expenses         | 
|• | Critical Accounting Policies and Estimates
|• | Results of Operations                      | 
|• | Liquidity and Capital Resources            | 
|• | Off-Balance Sheet Arrangements             | 
|• | Seasonality and Fiscal Year                | 
|• | Inflation                                  | 
|  |                                            | 



Overview



We fish for and farm Bluefin Tuna. We employ environmentally
sound fishing practices and fish farming practices, which we refer to as aquaculture, to help meet market demand for Bluefin Tuna
while supporting their long-term sustainability. We own and operate Kali Tuna, a limited liability company organized in 1996 under
the laws of the Republic of Croatia, which is a Northern Bluefin Tuna farming operation located in the Adriatic Sea off the coast
of Croatia. We also own and operate Baja, a corporation organized in 1999 under the laws of the Republic of Mexico, which is a
Pacific Bluefin Tuna farming operation located in the Pacific Ocean off Baja California, Mexico.



Our core business activity is farming and selling Bluefin Tuna.
We generate all of our revenue from the sale of Bluefin Tuna primarily into the Japanese sushi and sashimi market, and our sales
are highly seasonal. Our farming operations increase the total weight of our Bluefin Tuna, which we refer to as biomass, by catching
or, less frequently, purchasing Bluefin Tuna and then transporting them to our farms for optimizing the growth cycle by maintaining
our Bluefin Tuna biomass inventory in farm pens over extended cycles.



We are a June 30-based fiscal year company and due to the optimal
seasonality for harvesting Bluefin Tuna in winter, we typically generate little or no revenue in our first fiscal quarter (the
three months ending September 30) or our fourth fiscal quarter (the three months ending June 30). In Croatia, our harvest months
are typically from November through February, while in Mexico, our harvest months are typically from October through December.



We sell substantially all of our Bluefin Tuna to a small number
of Japanese customers. In fiscal 2011, sales to four customers accounted for 98.9% of our net revenue and in fiscal 2012, sales
to these same four customers plus two additional customers accounted for 99.3% of our net revenue. As a result, we anticipate continuing
to generate substantially all of our revenue from a small number of Japanese customers. We are therefore susceptible to changes
in Japanese demand for Bluefin Tuna, which may be materially affected by macroeconomic changes, among other things, as well as
exchange rate fluctuations between the Japanese Yen and the US dollar. Our Japanese customers' contract for and pay for Bluefin
Tuna purchases in Japanese Yen. We negotiate over a period of several months with more than 15 potential customers who have the
ability to buy Bluefin Tuna from us in bulk through a distribution channel centered around freezer boats, which process, freeze,
and transport up to 800 tons of Bluefin Tuna in a single shipment. At the conclusion of our negotiations we select four to six
customers who have offered to buy in large bulk at a mutually agreed price. Because of the scale of bulk purchases in this freezer
boat channel we sell to a small number of customers. We believe that we are not captive to any customer and that there are alternatives
purchasers consistently available while we are negotiating price and volume terms. We can also sell a smaller amount of our Bluefin
Tuna through a fresh sales channel by truck and air transport to auction houses primarily in Japan.





30







Our ability to hire, train and retain a skilled aquaculture
workforce, availability of high-quality feed, how we manage the feeding process, water quality and temperatures are critical factors
affecting the growth of our biomass. Our farming operations are also subject to conditions of nature primarily related to storms
and water quality, and our Mexican operations are also subject to natural predators. At our Mexican operations, storms can damage
cages to the point where Bluefin Tuna may escape or be killed. Storms also may allow predators such as seals and sea lions to enter
the cages and kill our Bluefin Tuna. At our Croatian operations, storms are generally less severe, our cages are more protected
by natural features such as islands, and there are no natural Bluefin Tuna predators. We carry insurance policies for both operations
for loss, under which we have chosen relatively high deductibles. In the years ended
June 30, 2012 and 2011, we incurred storm-related losses, including losses due to predators, of $0.2 million and $2.9 million,
respectively.



Prior to June 30, 2010, we were a shell company known as Lions
Gate Lighting Corp. ("Lions Gate"). On June 30, 2010, Lions Gate and Atlantis Group hf ("Atlantis"), our majority
stockholder, completed a transaction in which Lions Gate purchased from Atlantis all of the issued and outstanding shares of its
wholly-owned subsidiary, Bluefin Tuna Acquisition Group ("Bluefin") in consideration for the issuance to Atlantis of
30.0 million shares of Lions Gate common stock, resulting in a change of control of Lions Gate. As a result of this transaction,
Kali Tuna, a wholly-owned subsidiary of Bluefin acquired in 2005, and an indirect subsidiary of Atlantis, became an indirect wholly-owned
subsidiary of Lions Gate. This transaction was accounted for as a recapitalization effected by a reverse merger, with Bluefin and
Kali Tuna considered the acquirer for accounting and financial reporting purposes. On July 20, 2010, we acquired 33% of Baja, and
on November 30, 2010, we acquired virtually all of the remaining shares of Baja and all of the shares of its related party Oceanic.
We currently own 99.98% of Baja.



Outlook



Tuna sales increased from $57.0 million for the year ended June
30, 2011 to $97.4 million for the year ended June 30, 2012. However, part of our revenue growth was due to a substantial reduction
in existing Bluefin Tuna inventory, from approximately 3,400 metric tons at June 30, 2011, to approximately 2,300 metric tons at
June 30, 2012, as we decided to sell a larger percentage of our total biomass in fiscal 2012 compared to fiscal 2011 to meet liquidity
needs. This significant reduction in the biomass retained for farming reduces the growth potential for fiscal 2013. If we do not
significantly increase our Bluefin Tuna inventory by catching and/or purchasing significant quantities of Bluefin Tuna in fiscal
2013, net revenue may be negatively affected. Even if we significantly increase our Bluefin Tuna inventory, our net revenue may
be negatively affected, depending on how much of our Bluefin Tuna inventory we decide to retain for farming beyond fiscal 2013.



Key Business Indicators



In addition to traditional financial measures, we monitor our
operating performance using financial and non-financial metrics that are not included in our consolidated financial statements.
The following are key business indicators we regularly use:



Biomass Measures



We increase the total weight of our Bluefin Tuna, which we refer
to as biomass, by catching or purchasing Bluefin Tuna and growing them in our farms. A net increase in biomass typically corresponds
with potential revenue growth. However, increased biomass also increases our carrying costs related to retaining and growing our
tuna and requires increased working capital. Decreases in biomass of our Bluefin Tuna are primarily due to Bluefin Tuna sales,
but in some cases are due to natural mortality and mortality caused by storms, predation and related damages. Almost all storm-related
mortality has historically occurred in connection with our Mexican operations, though in rare cases our Croatian operations may
experience storms that cause Bluefin Tuna mortality.



Each biomass measure described below is a key measure.



Existing Biomass Growth. Existing
biomass growth is a key measure because it tells us how many kilograms of growth we can expect from our current biomass, which
in turn will allow us to produce biomass for further growth or sale. Existing biomass growth is the difference in the total biomass
of our existing Bluefin Tuna between one measuring point and another, net of natural mortalities. Biomass growth varies depending
on water temperature, age, size and condition of Bluefin Tuna, the quantity and quality of feed we obtain and provide, and any
natural mortalities that occur. Younger Bluefin Tuna grow at a faster rate than mature Bluefin Tuna. Newly acquired Bluefin Tuna
that have not been fully fed previously will typically have a higher growth rate than the Bluefin Tuna that have become accustomed
to farm feeding after being in our farms for a few months. Bluefin Tuna are warm-blooded fish, meaning they can regulate and raise
their body temperatures above water temperatures by means of muscular activity, and as such will grow more slowly in cold water
because they utilize a portion of the energy from feeding to keep warm. Existing biomass growth is a key measure because it informs
us of the projected amount of biomass available for future sale, which, along with cost data, is a key factor in management decisions
regarding optimal operational scale and duration for growing and farming operations. Biomass growth increased 84 metric tons, or
6%, from 1,413 metric tons for the year ended June 30, 2011, to 1,497 metric tons for the year ended June 30, 2012. The increase
in growth was primarily due to the fact that growth for the year ended June 30, 2012 reflects growth at our Baja operations for
the entire twelve months. In the year ended June 30, 2011, our Baja operations provided seven months of growth because we completed
the acquisition on November 30, 2010.





31







Feed Conversion Ratio. Feed conversion
ratio, or FCR, is the measure of how many kilograms of feed it takes to add one kilogram of weight to our Bluefin Tuna stock. FCR
is dependent upon a large number of factors, including the total quantity and fat content of feed, the size of the Bluefin Tuna,
and the temperature of the water. Lower FCR typically means lower feed costs per kilogram of biomass and therefore higher gross
margin potential for the same feed cost. However, variances in feed costs also affect gross margin potential. In general, the higher
the fat content of feed, the higher our feed costs will be. We continually seek to refine our Bluefin Tuna feeding practices to
improve our FCR. FCR decreased 1.72, or 9%, from 19.08 for the year ended June 30, 2011 to 17.36 for the year ended June 30, 2012.
The decrease in FCR was primarily due to colder weather and more storms in Mexico during the year ended June 30, 2011 that caused
interruptions of feeding and decreased growth patterns of our biomass at our Mexican operation.



Caught Bluefin Tuna. Caught Bluefin
Tuna is a key biomass measure. The size of our annual catch directly affects the amount of biomass in our farms growing as inventory,
which directly affects potential future revenue. Our Baja operations are subject to input limits on the amount of biomass we can
add to our farms annually. Our Croatian operations are regulated by a catch quota system and maximum input and capacity limits
on our farms. A regulatory body, the International Commission for the Conservation of Atlantic Tunas, or ICCAT, issues a total
catch quota for Croatia for each year based in part upon advice from scientists. Each Croatian vessel that is licensed to catch
Bluefin Tuna is assigned a certain portion of that quota. These fishing quotas are subject to annual review and renewal, and may
be materially decreased. In the year ended June 30, 2011, our Croatian operations caught 133 metric tons of Bluefin Tuna, with
70 metric tons coming from M.B. Lubin d.o.o., a Croatian limited company, and the balance coming from quotas leased from other
companies. In the year ended June 30, 2012, we caught a total of 1,201 metric tons of Bluefin Tuna, with 1,069 metric tons caught
by our Mexican operations and 132 metric tons caught by our Croatian operations. Historic catches are not necessarily indicative
of future catches. The increase in the year ended June 30, 2012 compared to the year ended June 30, 2011 was primarily due to the
fact that this was the first year we completed a fishing season at our Mexican operations, as we acquired it in November 2010 (which
was after the completion of the 2010 fishing season). Our overall fishing results are subject to material changes based on circumstances
beyond our control related to fish habits and changes in regulatory requirements and environmental conditions, and our Baja results
are also subject to material changes based on the number and quality of boats and supporting infrastructure we are able to employ
in a given fishing season.



Purchased Bluefin Tuna. Our available
capital, the availability of Bluefin Tuna for sale at any given time, and market prices for Bluefin Tuna affect our tuna purchases.
We will consider purchases of live Bluefin Tuna based on available capital and market opportunities. In the year ended June 30,
2011, we purchased 150 metric tons for our Croatian operation. In the year ended June 30, 2012, we did not made any purchases of
live tuna for our farming operations due to our lower available capital and fewer market opportunities during the period.



Acquisition of Baja. On November
30, 2010, we acquired the Baja operation. As a result of this acquisition, we acquired 3,080 metric tons of Bluefin Tuna.



Storm Losses. Storm losses negatively
affect the amount of biomass available for future sale and therefore potential future revenue. We maintain insurance covering storm
losses, subject to high deductibles. Storm losses decreased 208 metric tons, or 92%, from 227 metric tons for the year ended June
30, 2011, to 19 metric tons for the year ended June 30, 2012. The decrease primarily resulted from improved weather conditions
in Mexico and less storm losses as we moved most of our Bluefin Tuna in Mexico to a more secure farm at Punta Banda that was acquired
in December 2011 that is more sheltered from storms than our other farm sites in Mexico.





32







Bluefin Tuna Sales. Sales of our
Bluefin Tuna in the past have not been limited by demand, but by the amount that we have determined to sell. Our Bluefin Tuna sales
may also be affected by market supply. A decrease in market supply would generally lead to an increase in market prices, which
would affect the amount that we determine to sell. Tuna sales reduce inventory levels and therefore negatively affect potential
future revenue from our farming operations. Bluefin Tuna sales increased 909 metric tons, or 32%, from 2,851 metric tons for the
year ended June 30, 2011, to 3,760 metric tons for the year ended June 30, 2012. The increase was due to several factors. Our sales
for the year ended June 30, 2012 reflect sales from our Baja operations for the entire twelve months. In the year ended June 30,
2011, our Baja operations provided seven months of sales as we completed the acquisition on November 30, 2010. Additionally, we
decided to sell a larger percentage of our total biomass in fiscal 2012 compared to fiscal 2011 to meet liquidity needs.



The following table summarizes our estimated biomass and changes
in biomass for the year ended June 30, 2012 and 2011 in metric tons. We acquired our Baja biomass on November 30, 2010. Therefore,
for the year ended June 30, 2012, changes in Baja biomass is for the seven month period from November 30, 2010 through June 30,
2011, in metric tons.



|                                              |  | Year Ended June 30, |       
|--------------------------------------------- |  | ------------------- | ------
|                                              |  | 2012                |       
|Beginning biomass                             |  |                     | 3,418 
|Acquired in Baja acquisition                  |  |                     | -     
|Growth, net of mortality                      |  |                     | 1,497 
|Caught                                        |  |                     | 1,201 
|Purchased for farming                         |  |                     | -     
|Storm losses                                  |  |                     | (19   
|Biomass sales                                 |  |                     | (3,760
|Ending                                        |  |                     | 2,337 
|                                              |  |                     |       
|Net biomass added from operations during year |  |                     | 2,679 



Biomass Capacity. From June 2011 through September 2011,
we completed a series of acquisitions of Croatian farming concessions that increased the biomass capacity of our Croatian farms
from 3,240 metric tons to 5,030 metric tons as of June 30, 2012. In December 2011, we completed a farming concession acquisition
that increased the biomass input capacity of our Mexican farms by 400 metric tons to a total of approximately 2,720 metric tons
as of June 30, 2012. While we have added biomass capacity at both operations, we have not yet expanded our biomass to utilize such
additional capacity due to capital constraints, and do not anticipate fully utilizing our capacity for the foreseeable future until
adequate financing has been arranged.



Revenue Per Kilogram. The revenue we generate per kilogram
of biomass sold is a key factor to our operating results. Our overall average revenue per kilogram of biomass sold that we realized
increased from $20.01 in the year ended June 30, 2011 to $25.91 in the year ended June 30, 2012. Our revenue per kilogram of biomass
sold is impacted by the size distribution of the Bluefin Tuna we sell. Generally, Bluefin Tuna sell for more per kilogram as they
increase in size (sales prices can be up to 33% more for larger tuna than smaller tuna), and the average size of Bluefin Tuna sold
by our Croatian operations have been larger than our Mexican operations. Market prices for Bluefin Tuna generally have varied significantly
due in part to supply and demand changes. Attempting to explain the reasons for the changes would be speculative, and we are unable
to predict future supply and demand changes. Market prices have also increased in US dollar terms in each of the prior two years
because of the strengthening of the Japanese Yen relative to the US dollar, as sales to Japanese customers have accounted for approximately
99% of our Bluefin Tuna sales and are priced in Japanese Yen.



Non-GAAP Gross Profit and Non-GAAP Gross Margin. We present
non-GAAP gross profit measures and non-GAAP net income attributable to Umami stockholders in the following tables. Management believes
these non-GAAP measures help indicate our performance before the fair value purchase price adjustments to the Baja inventory that
are considered by management to be representative of our on-going operating results. Once the adjustments related to the fair value
of the Baja inventory due to the purchase price adjustment have been fully recognized in cost of sales in the future, these non-GAAP
adjustments to cost of sales and the resulting non-GAAP measures will no longer be applicable.





33







The following non-GAAP table is a summary of our costs and margins
showing our gross margin and the effect of the purchase price adjustment for the years ended June 30, 2012 and 2011 (in thousands):



|                                                                            |  | Year
Ended June 30, |        
|--------------------------------------------------------------------------- |  | ------------------- | -------
|                                                                            |  | 2012                |        
|Net Revenue                                                                 |  | $                   | 97,433 
|Cost of Goods Sold                                                          |  |                     | (50,401
|Gross Profit                                                                |  | $                   | 47,032 
|                                                                            |  |                     |        
|Gross Profit %                                                              |  |                     | 48     
|                                                                            |  |                     |        
|Add back: estimated cost of goods sold in excess of catch and farming costs |  | $                   | 2,238  
|                                                                            |  |                     |        
|Estimated non-GAAP gross profit based on catch and farming costs            |  | $                   | 49,270 
|                                                                            |  |                     |        
|Estimated non-GAAP gross profit % based on catch and farming costs          |  |                     | 51     



The following table is a summary of non-GAAP net income attributable
to Umami stockholders. Non-GAAP net income has been adjusted to eliminate the effect of the fair value purchase price adjustment
on the Baja inventory on the net income attributable to Umami stockholders for the years ended June 30, 2012 and 2011:



|                                                                                                         |  | Year
Ended June 30, |       
|-------------------------------------------------------------------------------------------------------- |  | ------------------- | ------
|                                                                                                         |  | 2012                |       
|Net income attributable to Umami Stockholders                                                            |  | $                   | 14,797
|Plus estimated cost of goods sold in excess of catch and farming costs                                   |  |                     | 2,238 
|Eliminate bargain purchase on business combination                                                       |  |                     | -     
|Estimated non-GAAP net income attributable to Umami stockholders using estimated catch and farming costs |  | $                   | 17,035



As of June 30, 2012, $0.7 million of the Baja inventory purchase
price adjustment remains on our balance sheet to be amortized.



Acquisitions



On July 20, 2010, we entered into a stock purchase agreement
with Corposa S.A. de C.V. ("Corposa") and Holshryna Ehf ("Holshyrna"), Oceanic Enterprises, Inc. ("Oceanic"),
and certain other parties, providing for the sale from Corposa and Holshyrna of 33% of the equity in Baja and Oceanic. The agreement
provided for acquisition of 33% interest in Baja and Oceanic by us for $8.0 million, which included $4.9 million that had been
advanced to Baja previously.



As part of the stock purchase agreement, we also acquired
the option, exercisable by September 15, 2010, to purchase all remaining Baja and Oceanic shares in consideration for the
issuance of a) 10,000,000 shares of our common stock and b) payment in cash of $10.0 million. On September 15, 2010, we
exercised the option and on September 27, 2010, the parties entered into amendments to each of the agreements requiring
certain capital distributions plus an additional $2.0 million related to the amendments to be made to the selling parties on
or before November 30, 2010. On November 30, 2010, we consummated the acquisition of Baja and Oceanic. However, instead of
making the $10.0 million cash payment described above, we paid $7.8 million in cash and issued zero interest promissory notes
in the aggregate principal amount of $2.2 million on November 30, 2010. The notes, which were unsecured, were due and paid on
December 10, 2010. As a result, on November 30, 2010, Baja became our 99.98% owned subsidiary and Oceanic became our 100%
owned subsidiary.



We accounted for the results of operations of Baja and Oceanic
from July 20, 2010 through November 30, 2010 under the equity method. Beginning December 1, 2010, we accounted for this acquisition
as a business combination, and therefore our consolidated financial statements include the results of operations of Baja and Oceanic.
In addition, we accounted for the acquisition of Drvenik Tuna d.o.o. (which includes Bepina Komerc d.o.o.) in June 2011 as a business
combination, and therefore our consolidated financial statements include the results of operations of Bepina.





34







Components of Revenue and Expenses



Net Revenue



We derive virtually all of our revenue from Bluefin Tuna sales.
We recognize revenue when tuna inventory is delivered and we have transferred to the buyer the significant risks and rewards of
ownership. The delivery occurs either at our sites in Croatia or Mexico when loaded into a freezer vessel or container or at an
auction house in Japan. We are responsible for shipping and handling costs, up to the point of sale. We include shipping and handling
costs in cost of goods sold. We do not incur any post sale obligations. See “- Critical Accounting Policies.”



We significantly increased our net revenue in the year ended
June 30, 2012 compared to the year ended June 30, 2011. However, part of our revenue growth is due to a substantial reduction in
existing Bluefin Tuna inventory, from approximately 3,400 metric tons at the end of the harvest for the year ended June 30, 2011,
to approximately 2,300 metric tons at the end of the harvest for the year ended June 30, 2012. This significant reduction in the
biomass retained for our farming operations reduces the growth potential for the coming growing season. If we do not significantly
increase our Bluefin Tuna inventory by catching and/or purchasing significant quantities of Bluefin Tuna in calendar 2012, our
fiscal 2013 net revenue may be negatively affected. Even if we significantly increase our Bluefin Tuna inventory, our net revenue
may be negatively affected, depending on how much of our Bluefin Tuna inventory we decide to retain for our farming operations
beyond fiscal 2013.



Cost of Goods Sold



Cost of goods sold includes costs associated with the initial
catching or purchasing of our tuna and costs associated with towing these fish to our farming operations, as well as farming costs,
tuna shipping and handling costs and insurance costs related to our Bluefin Tuna inventories. The most significant variable affecting
costs of goods sold for our Mexican operations is the costs associated with catching Bluefin Tuna relative to how many tons of
Bluefin Tuna we are able to catch, whereas it is the cost of bait required to grow our biomass for our Croatian operation. Our
farming costs include feed costs, which are the largest component of growing costs, as well as other costs of farming such as employee
compensation, benefits, and other employee-related costs for our farming personnel and direct costs incurred in the farming operation.
Finally, cost of goods sold in the years ended June 30, 2012 and 2011 also reflects fair value adjustments representing the increase
in the carrying value of Baja inventory to reflect the valuation of the inventory purchased in the Baja acquisition over its historical
fishing and farming costs. We expect the costs of fishing and farming new Bluefin Tuna inventory at the Baja operation to be more
in line with our historical cost. As of June 30, 2012, $0.7 million of the fair value adjustment remains on our balance sheet,
and $2.2 million and $9.8 million were recognized in cost of goods sold in the Statement of Operations in the years ended June
30, 2012 and 2011, respectively. Changes in cost of goods sold do not necessarily correlate with revenue changes. Costs of goods
sold may be materially impacted by changes over which we have limited or no control, particularly feed costs.



Selling, General and Administrative Expenses



Selling, general and administrative expenses consist of commissions
payable arising from our prior sales agreement with Atlantis, as well as compensation, benefits, and other employee-related costs
for executive management, finance, human resources and other administrative personnel, third-party professional fees, allocated
facilities costs, and other corporate and operating expenses. Through March 31, 2012, either Atlantis or Atlantis Japan provided
sales and marketing services through sales agreements under which we were charged 1-2% commission on sales of our Bluefin Tuna
inventory. We terminated our agreement with Atlantis Japan affective March 31, 2012 and will handle all future sales and marketing
of our Bluefin Tuna inventory in-house. We expect that this change will reduce our selling, general and administrative expenses
in the future, as we expect our internal sales fixed costs will likely be less than a customary percentage applied across our sales
that we previously outsourced. We anticipate that in fiscal 2013, other components of selling, general and administrative expenses
will increase as we grow our business.



Research and Development Expenses



We take care in choosing and investing in research and development
activities, and we plan to remain focused on incremental projects that offer the promise to generate near term returns, such as
R&D which could improve margins. Longer term, our goal is to close the lifecycle of Bluefin Tuna farming, which we believe
would continue to transform our business given our ability to farm tuna over a multi-year period. We currently participate in closed-lifecycle
R&D activities. Although we believe that commercial-scale closed-lifecycle Bluefin Tuna farming is several years away, we intend
to continue minimal research and development activities in this area because of its potentially transformative impact on the Bluefin
Tuna industry.





35







Other Operating Income



Other operating income consists primarily of interest income
and other miscellaneous items and has historically been immaterial. We anticipate that other operating income will be immaterial
for the foreseeable future.



Foreign Currency Transactions and Remeasurements



Effective December 1, 2010, we changed our functional currency
to the United States dollar, or USD, from the Croatian Kuna due to changes in the circumstances of our business, the most significant
being the completion of the acquisition of Baja and Oceanic. Kali Tuna's and Lubin's transactions and balances have been measured
in Kuna, their functional currency, and their financial statements have been translated into USD. Financial statements for Baja
and Marpesca S.A. de C.V., or Marpesca, are maintained in Mexican Pesos, and have been remeasured into USD, their functional currency.
We record the foreign currency translation adjustments in accumulated other comprehensive income. We include the resulting gain
or loss in foreign currency transactions and remeasurements in earnings.



We conduct most of our operations in foreign currencies. Substantially
all of our sales are to customers located in Japan and are settled in Japanese Yen. However, we typically seek to promptly convert
Yen into other currencies to match our operational needs. While we pay a significant portion of our expenses in USD, we pay the
majority of our expenses in Kuna, Euros and Mexican Pesos. The value of these currencies fluctuates relative to the USD. As a result,
we are exposed to exchange rate fluctuations, which could have an adverse effect on our results of operations.



Foreign exchange losses in Croatia have primarily been caused
by the effects of movements of the Croatian Kuna against accounts receivables and payables, cash accounts and loans denominated
in currencies other than Croatian Kuna.



Interest Expense, Net



During the year ended June 30, 2011 and the first six months
of fiscal 2012, we experienced liquidity shortfalls that necessitated financing a portion of our operations with short-term, high-interest
bridge loans from private lenders, including Atlantis, our principal shareholder. The interest costs, transactional costs and,
for certain financings, costs related to the issuance of warrants, significantly increased our cost of capital in the year ended
June 30, 2011 and the first six months of fiscal 2012. This high interest expense, net continued until October 2011, when we repaid
our higher-cost bridge loans with proceeds from the current year's harvest. We anticipate that our future cost of capital (on a
per dollar basis) will be lower than what we experienced for the first six months of fiscal 2012; however we anticipate the continued
need for short-term, high cost bridge loans to cover temporary cash needs during the non-harvesting season (April to September).



Income Tax Provision



Our effective tax rate has varied and may continue varying year-to-year
based on various factors, including our overall profitability, the geographical mix of income before taxes, and the related tax
rates in the jurisdictions where we operate and withholding taxes, as well as discrete events such as transferring money from a
jurisdiction where earned to another.



Critical Accounting Policies and Estimates



We prepare our consolidated financial statements in accordance
with accounting principles generally accepted in the United States of America, or US GAAP. The preparation of these financial statements
requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during
the reporting period. Management periodically evaluates the estimates and judgments made. Management bases its estimates and judgments
on historical experience and on various factors that are believed to be reasonable under the circumstances. Actual results may
differ from these estimates.



We consider the policies discussed below to be critical to an
understanding of our financial statements because they involve the greatest reliance on management's judgment.





36







Inventories



Substantially all of our inventories consist of Bluefin Tuna,
with a small amount consisting of feed stock. We state inventories at the lower of cost, based on the average cost method, or market.



We systematically monitor the size, growth and growth rate of
our tuna to estimate total biomass at each balance sheet date. We track our tuna inventory by cage at each site, physically counting
all tuna entering the farm and estimating their weight utilizing slow motion computer monitored underwater camera technology. We
also count the tuna using the same technology when we transfer tuna to another cage or divide a cage. We divide cages when our
biomass exceeds the optimal level for a cage of that size.



We assess tuna growth and average size based upon the quantity
of feed and the expected food conversion ratio at that time of year for that size of tuna and the water temperature, as well as
observation by our staff and, in some cases utilization of high-tech cameras. We measure actual fish mortality almost daily. Each
month, we estimate our production by calculating our estimated growth of the biomass and subtracting estimated mortality.



During harvesting, we weigh each Bluefin Tuna harvested. We
generally empty entire cages during the harvest. After emptying a cage, we compare differences between our recorded and estimated
biomass for that cage and the actual biomass removed.



Management reviews quarterly inventory balances to estimate
if net realizable value is less than carrying value. Substantially all of our inventory consists of Bluefin Tuna, and a small amount
consists of feed stock and other materials and supplies used in our operations. To determine the carrying value of our inventories,
we calculate the cost of our biomass on a weighted average basis, which includes all costs to catch, acquire, transport to the
farm and grow the fish. We will record a provision for loss to reduce the computed weighted average cost if management determines
it exceeds the net realizable value. We have not had any losses related to net realizable value, and do not anticipate any for
the foreseeable future.



Our methodology for quantifying and recording losses due to
escape from cages and mortality (i.e., storm losses and natural mortalities) is based on a combination of the following procedures:
(1) on an almost daily basis, through observation by our staff, we identify and extract any fish mortalities resulting from the
natural course of operation, which are immediately recorded as actual mortalities; and (2) we perform test counts of our biomass
periodically and adjust our specific fish counts and biomass by cage, with any net negative differences deemed to be due to storm
losses or natural mortalities. Historical data does not enable us to establish a more precise estimation of mortalities or storm
losses at this time.



We charge abnormal mortalities, such as storm losses, against
income in the period the loss occurs. Storm losses are more common in our Mexican operation than in our Croatian operation. In
the Adriatic Sea off the coast of Croatia, the storms are less frequent and not as strong compared with the Pacific Ocean off Baja
California. In addition, there are no natural predators in the Adriatic Sea. We had storm losses of $0.2 million and $2.9 million
in the years ended June 30, 2012 and 2011, respectively. The decrease in storm losses in the year ended June 30, 2012 compared
to the year ended June 30, 2011 was due to fewer and less severe storms, the movement of most of our Bluefin Tuna inventory in
Mexico to a more secure farm at Punta Banda, which we acquired in December 2011, that is more sheltered from storms than our other
farm sites in Mexico, and an overall lower amount of biomass in Baja in the current year compared to the prior year.



During the fishing season, we catch and transport Bluefin Tuna
to our farms. We do not include this tuna in our live stock inventory until it has been transferred into our farming cages and
has been counted and the biomass assessed. We accumulate costs associated with our fishing activities in a separate inventory account
and transfer these costs to live stock inventory once we assess the Bluefin Tuna at the lower of cost or the net realizable value.
We write off any costs that are not recoverable in the period in which the tuna were recorded.



Consolidation and Operating Structure



Our consolidated financial statements include Umami and the
Kali Tuna operations for all periods presented. From July 20, 2010 (the date of the acquisition of the initial 33% of Baja and
Oceanic) through November 30, 2010 (the date of completion of the acquisition of the remaining shares of Baja and Oceanic), the
financial statements include our equity interest in the results of the operations of Baja and Oceanic. From December 1, 2010, our
financial statements include Baja and Oceanic fully consolidated. All significant intercompany balances and transactions have been
eliminated in consolidation.





37







Under ASC 810, a VIE is an entity that either (i) has insufficient
equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors
who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary
beneficiary of a VIE has both the power to direct the activities that most significantly impact the entity's economic performance
and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the
VIE.



Based upon the criteria set forth in ASC 810, we have determined
that we are the primary beneficiary in two VIEs, M.B. Lubin d.o.o. ("Lubin") in Croatia and Marpesca S.A. de C.V. ("Marpesca")
in Mexico, as we absorb significant economics of the entities, have the power to direct the activities that are considered most
significant to the entities, and provide financing to the entities. In addition, the entities do not have the total equity investment
at risk sufficient to permit them to finance their activities without our support. As such, the VIEs have been consolidated within
our consolidated financial statements. We were the the primary beneficiary in one additional VIE, Kali Tuna Trgovina d.o.o. ("KTT"),
prior to May 23, 2012 as discussed below. See Note 9 to our consolidated financial statements included elsewhere in this report
for additional discussion regarding these entities.



Prior to October 31, 2010, Kali Tuna operated a joint venture
(the "BTH Joint Venture"). Under the terms of the BTH Joint Venture, Bluefin Tuna was acquired, farmed and sold at our
Croatian site. Initially, the BTH Joint Venture was operated through a separate entity, Kali Tuna Trgovina d.o.o. ("KTT"),
a Croatian-based company owned 50% by Kali Tuna and 50% by Bluefin Tuna Hellas A.E. (“BTH,” an unrelated third party).
In January 2008, all activities of the BTH Joint Venture were assumed by Kali Tuna. In October 2010, the BTH Joint Venture was
terminated, at which time the BTH Joint Venture's remaining assets, consisting primarily of Bluefin Tuna biomass located at our
Croatian farming sites, were purchased by Kali Tuna at the fair market value of $1.6 million. BTH had no operations subsequent
to September 30, 2010. On May 23, 2012, the shares in KTT owned by BTH were transferred to Kali Tuna, whereby KTT became the wholly-owned
subsidiary of Kali Tuna. Therefore, as of June 30, 2012, KTT is no longer considered a VIE and is accounted for as a wholly-owned
subsidiary of Kali Tuna.



Revenue Recognition



We recognize revenue from tuna sales when our tuna inventory
is shipped, title has passed to the customer and collectability is reasonably assured.



Allowance for Doubtful Accounts



We record the substantial majority of our revenue by March 31
of each fiscal year. Our sales are typically large in size and small in number. As a result, our accounts receivable balance at
June 30, our fiscal year end, is typically low. We review all invoices and will make a provision for the value of any amounts that
in the view of the management are at risk. During the years ended June 30, 2012 and 2011, we did not identify any doubtful accounts
related to non-related party receivables. As of the date of this annual report, we have collected all amounts related to the year
ended June 30, 2012 and earlier sales to non-related parties. See discussion regarding related party receivables at Note 11 to
our consolidated financial statements included elsewhere in this report.



The total allowance for doubtful accounts related to non-related
party receivables was nil on June 30, 2012, and less than $0.1 million on June 30, 2011. See discussion regarding related party
receivables at Note 11 to our consolidated financial statements included elsewhere in this report.



Provision for Income Taxes



Income taxes are accounted for using the asset and liability
method. Under the asset and liability method of accounting for income taxes, deferred tax assets and liabilities are recognized
for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis, and for tax loss carryforwards.



Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or
settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period the changes are
enacted. In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some portion
or all of the deferred tax assets will not be realized. A valuation allowance is provided for deferred income tax assets for which
it is deemed more likely than not that future taxable income will not be sufficient to realize the related income tax benefits
from these assets. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the periods in which those temporary differences become deductible. We consider the scheduled reversal of deferred tax liabilities
(including the impact of available carryback and carryforward periods), projected future taxable income, and tax-planning strategies
in making this assessment.





38







We evaluate our uncertain tax positions in accordance with the
guidance for accounting for uncertainty in income taxes. We recognize the effect of uncertain tax positions only if those positions
are more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical
merits of the position. Recognized income tax positions are measured based on the largest amount that has a greater than 50% likelihood
of being realized upon ultimate settlement. Guidance is also provided for recognition of income tax assets and liabilities, classification
of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions,
and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in
our financial statements or tax returns. Changes in recognition or measurement are reflected in the period in which the change
in judgment occurs. We record interest and penalties related to unrecognized tax positions in income tax expense.



Results of Operations



Our results of operations include Kali Tuna and Umami for all
periods presented, and Baja and Oceanic from December 1, 2010. We included results of Baja and Oceanic from July 20, 2010 through
November 30, 2010 under the equity method.



Comparison of Years Ended June 30, 2012 and June 30, 2011



The following table and discussion sets forth our consolidated
statements of operations by amount and as a percentage of our total net revenue for the periods presented. Our historical results
are not necessarily indicative of our results of operations to be expected in the future.



|                                                                  | Year Ended June 30,
|----------------------------------------------------------------- | -------------------
|                                                                  |                    
|                                                                  |                    
|Revenue, net                                                      |                    
|Cost of goods sold                                                |                    
|Gross profit                                                      |                    
|                                                                  |                    
|Selling cost                                                      |                    
|General and administrative expense                                |                    
|Total selling, general and administrative expense                 |                    
|                                                                  |                    
|Research and development expense                                  |                    
|Other operating income (expense), net                             |                    
|Operating income                                                  |                    
|Gain (loss) from foreign currency transactions and remeasurements |                    
|Gain on disposal of assets                                        |                    
|Gain (loss) on derivative stock warrants                          |                    
|Income from investment in unconsolidated affiliates               |                    
|Bargain purchase on business combinations                         |                    
|Interest expense, net                                             |                    
|Income before provision for income taxes                          |                    
|Income tax provision                                              |                    
|Net income                                                        |                    





39







Net Revenue



Net revenue increased $40.4 million, or 70.8%, from $57.0 million
for the year ended June 30, 2011 to $97.4 million for the year ended June 30, 2012. The increase in net revenue was due to several
factors. Our net revenues for the year ended June 30, 2012 reflect revenue from our Mexican operations for the entire year. In
the year ended June 30, 2011, our Mexican operations provided seven months of revenue contribution because we completed the acquisition
of the Mexican operations on November 30, 2010. Additionally, we decided to sell a larger percentage of our total biomass in the
year ended June 30, 2012 compared to the year ended June 30, 2011 to meet liquidity needs. Finally, average revenue per kilogram
in the year ended June 30, 2012 increased relative to the year ended June 30, 2011. Average revenue per kilogram of tuna sold was
$25.91 and $20.01 for the years ended June 30, 2012 and 2011, respectively. The increase in the average revenue per kilogram in
the year ended June 30, 2012 compared to the year ended June 30, 2011 was primarily due to an increase in the average sales price
per tuna in fiscal 2012 compared to fiscal 2011 (an approximate increase of 25% year over year) as well as strengthening of the
Japanese Yen, partially offset by increased sales of Bluefin Tuna from Mexico in the fiscal 2012 harvest season, which tend to
be smaller in size than tuna from Croatia as Bluefin Tuna sell for incrementally more per kilogram as they increase in size.



Cost of Goods Sold



Cost of goods sold increased $7.2 million, or 16.6%, from $43.2
million for the year ended June 30, 2011 to $50.4 million for the year ended June 30, 2012. The increase was due to several factors.
The year ended June 30, 2012 reflect cost of goods sold from our Mexican operations for the entire year. In the year ended June
30, 2011, our Mexican operations provided seven months of cost of goods sold because we completed the acquisition of Baja on November
30, 2010. Additionally, we decided to sell a larger percentage of our total biomass in the year ended June 30, 2012 compared to
the year ended June 30, 2011, which resulted in a larger amount of cost recognized in the year ended June 30, 2012. These increases
were partially offset by a decrease in the fair value adjustment included in cost of goods sold of $2.2 million in the year ended
June 30, 2012 compared to $9.8 million in the year ended June 30, 2011. The fair value adjustment represents the increase in the
carrying value of our inventory in Mexico to reflect the valuation of the inventory purchased in the Baja acquisition over its
historical fishing and farming costs. As of June 30, 2012, $0.7 million of the fair value adjustment remains on our balance sheet
to be recognized.



As a percentage of net revenue, cost of goods sold decreased
from 75.8% for the year ended June 30, 2011 to 51.7% for the year ended June 30, 2012. The decrease in cost of goods sold as a
percentage of net revenue is primarily due to a decrease in the fair value purchase price adjustment recorded to Baja inventory
or cost of sales in the year ended June 30, 2012 compared to year ended June 30, 2011. The inventories purchased as part of the
Baja acquisition were recorded at fair value, which was estimated based upon the estimated market prices that a market participant
would be willing to pay for the inventory, less costs to be incurred up to the estimated harvest date and an acceptable profit
margin on the cost to be incurred and the selling efforts. Therefore, included in the cost of sales for Baja for the years ended
June 30, 2012 and 2011was a fair value adjustment of $2.2 million and $9.8 million, respectively, representing the increase in
the carrying value of Baja inventory to reflect the valuation of the inventory purchased in the Baja acquisition over its historical
fishing and farming costs. We expect the remainder of this cost to be recognized as a cost of sales in fiscal 2013.



A portion of the operating cost for the non-controlling interest
of Lubin and Marpesca is inventoried by Kali Tuna and Baja, respectively, to reflect the actual operating costs of Lubin's and
Marpesca's bait operations. We expect that the stockholders' deficit at Lubin and Marpesca will be absorbed by Umami shareholders
in the future.



Gross Profit and Gross Margin



Gross profit increased $33.2 million, or 240.3%, from $13.8
million for the year ended June 30, 2011 to $47.0 million for the year ended June 30, 2012. Gross margin increased from 24.2% for
the year ended June 30, 2011 to 48.3% for the year ended June 30, 2012. The increase in gross profit was due to several factors.
The year ended June 30, 2012 reflect gross profit from our Mexican operations for the entire year. In the year ended June 30, 2011,
our Mexican operations provided seven months of gross profit because we completed the acquisition of Baja on November 30, 2010.
Additionally, we decided to sell a larger percentage of our total biomass in the year ended June 30, 2012 compared to the year
ended June 30, 2011, which resulted in a larger amount of gross profit in the year ended June 30, 2012.





40







Selling Expenses



As a percentage of net revenue, selling expenses decreased from
1.9% for the year ended June 30, 2011 to 1.2% for the year ended June 30, 2012. However, in absolute dollars, selling expenses
increased $0.1 million, or 7.6%, from $1.1 million for the year ended June 30, 2011 to $1.2 million for the year ended June 30,
2012. The decrease in selling expenses as a percentage of net revenue was due to a change in the terms of our sales agency contract
with Atlantis. Under the sales agency contract with Atlantis that was terminated in June 2011, Atlantis Japan received 2% on all
sales of our tuna, including related party sales. Under the Atlantis sales agency agreement entered into in October 2011, Atlantis
Japan received 2% on all non-related party sales up to 4.0 billion Japanese Yen (approximately $52.0 million) and 1.0% on all non-related
party sales above that amount. The increase in selling expenses in absolute dollars was due to an increase in the amount of commissionable
non-related party sales made by Atlantis Japan in the year ended June 30, 2012 compared to the year ended June 30, 2011. The sales
agency agreement was terminated effective March 31, 2012.



General and Administrative Expenses



General and administrative expenses increased $4.4 million,
or 46.4%, from $9.5 million for the year ended June 30, 2011 to $13.9 million for the year ended June 30, 2012. The increase in
general and administrative expenses was due to additional costs for salaries, consultants, legal and audit fees, and travel expenses
incurred at the Baja operation that were not part of the business in the prior year, as well as the increased size of our operations
and staff at Umami and Kali.



Research and Development Expenses



Research and development expenses decreased $0.3 million, or
56.5%, from $0.6 million for the year ended June 30, 2011 to $0.3 million for the year ended June 30, 2012. In the year ended June
30, 2011, research and development expense consisted primarily of wages for staff involved in the acquisition and initial work
on a floating hatchery. In the year ended June 30, 2012, research and development expense consisted of wages and benefits for staff
involved in and expenses for our propagation project. The decrease in expense was primarily due to our decision to cease work on
the development of the floating hatchery in fiscal 2012. The cost for all of our research and development activities is borne directly
by us.



Gain (Loss) from Foreign Currency Transactions and Remeasurements



We incurred a gain from foreign currency transactions and remeasurements
of less than $0.2 million for the year ended June 30, 2012, compared to a loss of $1.3 million for the year ended June 30, 2011.
In the year ended June 30, 2012, the gain was primarily due to a $1.0 million remeasurement gain at our Mexican operation resulting
from a weakening of the Mexico Peso by 15% against the USD in our fiscal first quarter when Baja had significant Mexican Peso denominated
net liabilities, and a strengthening of the Mexican Peso by 9% against the USD in our fiscal third quarter when Baja had significant
Mexican Peso denominated net assets. This was partially offset by $0.9 million loss on foreign currency translation adjustments
on Japanese Yen and other foreign currency denominated liabilities and payments at Kali Tuna. The loss in the year ended June 30,
2011 was primarily due to a $0.3 million loss on foreign currency translation adjustments on Swiss Franc and other foreign currency
denominated liabilities and payments at Kali Tuna, and a $1.0 million foreign currency remeasurement loss at Baja resulting from
the strengthening of the Mexican Peso by 8% on Mexican Peso denominated net liabilities.



Gain (Loss) from Revaluation of Derivative Warrant Liability



We incurred a gain of $0.8 million from the revaluation of our
derivative warrant liability in the year ended June 30, 2012, compared to a loss of $0.3 million for the year ended June 30, 2011.
The change from a loss in the year ended June 30, 2011 to a gain in the year ended June 30, 2012 was due to a decrease in the fair
value of our derivative warrants in the year ended June 30, 2012, compared to an increase in the fair value of our derivative warrants
in the year ended June 30, 2011. The decrease in the fair value of derivative warrants in the year ended June 30, 2012 was due
to several factors, including decreases in the fair value of our common stock, the average risk-free interest rate, expected volatility
and the remaining term of the warrants. the increase in the fair value of our derivative warrants in the year ended June 30, 2011
was primarily due to an increase in the fair value of our common stock and expected volatility, partially offset by a decrease
in the average risk-free interest rate and remaining term of the warrants.





41







Income (Loss) from Investment in Unconsolidated Affiliates



We recognized income of $0.6 million related to our 33% equity
interest in Baja and Oceanic from the date we acquired the equity interest, July 20, 2010, until the date we acquired the remaining
interest in Baja and Oceanic, November 30, 2010, as we accounted for the results of operations of Baja and Oceanic from July 20,
2010 through November 30, 2010 under the equity method. Beginning December 1, 2010, we accounted for this acquisition as a business
combination, and therefore our consolidated financial statements include the results of operations of Baja and Oceanic.



Bargain Purchase on Business Combination



During the year ended June 30, 2011, we recorded a gain on bargain
purchase on business combination of $7.1 million related to our acquisition of Baja and Oceanic. The transaction resulted in a
gain as we acquired a larger biomass of Bluefin Tuna than we had originally projected. See note 7 to our consolidated financial
statements included elsewhere in this report.



Interest Expense, Net



Interest expense, net increased $0.2 million, or 3.5%, from
$6.4 million for the year ended June 30, 2011 to $6.7 million for the year ended June 30, 2012. The primary reasons for the increase
was utilizing certain third party debt to finance most of the Baja acquisition and operations since its acquisition. Additionally,
we financed shortfalls in receipt of cash related to past due accounts receivable from related party customers and unexpected delays
in collections of sales due to governmental clearance of imports of our fish with short-term bridge financing. We also financed
a portion of our fishing cost in Baja utilizing short-term bridge loans. We repaid several of our high-interest rate bridge loans
by December 31, 2011. Interest expense, net, included $1.3 million in write-offs of original issue discount, offering costs and
warrant costs related to the early repayment of a $3.1 million note that we paid in full in the quarter ended September 30, 2011,
instead of its original due date of March 31, 2012.



A summary of our interest expense for the years ended June 30,
2012 and 2011 is as follows (in thousands):



|                                                                                             |  | Year Ended June 30, |      
|-------------------------------------------------------------------------------------------- |  | ------------------- | -----
|                                                                                             |  | 2012                |      
|Interest paid to banks                                                                       |  | $                   | 1,706
|Interest related to Atlantis and Aurora                                                      |  |                     | 804  
|Interest paid to private investors (including amortization of original issue discounts)      |  |                     | 2,093
|Amortization of transactional costs of loans                                                 |  |                     | 1,264
|Amortization of equity participation costs related to private investors and placement agents |  |                     | 995  
|Less interest income                                                                         |  |                     | (205 
|Total interest expense, net                                                                  |  | $                   | 6,657



Income Tax Expense



Income tax expense increased $10.1 million, or 437.1%, from
$2.3 million for the year ended June 30, 2011 to $12.4 million for the year ended June 30, 2012. The increase in income tax expense
is primarily due to the significant increase in revenues and operating income for the year ended June 30, 2012 compared to the
year ended June 30, 2011, as well as a change in our tax position related to our Mexican operation. In addition, primarily due
to earnings repatriated from Mexico, the Company switched from a nontaxable entity to a taxable entity, by becoming subject to
Alternative Minimum Tax (AMT), during the quarter ended December 31, 2011.



The effective tax rate of 47.7% for the year ended June 30,
2012 differs from the statutory U.S. federal income tax rate of 34.0% primarily due to the dividends from foreign subsidiaries,
the change from IETU to ISR tax regime in calculating the Company's Mexican taxes subject to ASC 740, as well as an increase in
its valuation allowances related to certain of our foreign operations due to the uncertainty of generating future profits that
would allow for realization of their deferred tax assets. The effective tax rate of 89.6% for the year ended June 30, 2011 differed
from the statutory U.S. federal income tax rate of 34.0% primarily due to foreign income tax and the valuation allowance against
our domestic deferred tax assets. Although we received a dividend of $3.4 million from Kali Tuna in the year ended June 30, 2012,
unremitted earnings of Kali Tuna have been included in the consolidated financial statements without giving effect to the United
States taxes that may be payable as it is not anticipated any further such earnings will be remitted to the United States. Such
unremitted earnings are considered to be indefinitely reinvested and determination of the amount of taxes that might be paid on
these undistributed earnings is not practicable. Baja earnings are considered to be repatriated to the United States and Umami,
to fund current debt obligations of Umami taken out primarily for the acquisition and operations of Baja.





42







Liquidity and Capital Resources



At June 30, 2012, we had working capital of $32.8 million compared
to $16.2 million at June 30, 2011. Included in the $32.8 million at June 30, 2012 are $17.3 million of accounts receivables due
from related parties. See further discussion of these receivables in Note 11 to our consolidated financial statements included
elsewhere in this report. At June 30, 2012, we had cash and cash equivalents of $10.8 million, compared to $1.1 million at June
30, 2011.



Cash Flows



The following table summarizes our cash flows for the years
ended June 30, 2012 and 2011 (in thousands):



|                                                  |  | Year Ended June 30, |       
|------------------------------------------------- |  | ------------------- | ------
|                                                  |  | 2012                |       
|Total cash provided by (used in):                 |  |                     |       
|Operating activities                              |  | $                   | 8,796 
|Investing activities                              |  |                     | (4,388
|Financing activities                              |  |                     | 4,407 
|Effects of exchange rate changes on cash balances |  |                     | 916   
|Increase in cash and cash equivalents             |  | $                   | 9,731 



Operating Activities. Net cash provided by operating
activities was $8.8 million for the year ended June 30, 2012, compared to net cash used in operating activities of $1.0 million
for the year ended June 30, 2011. The increase in cash provided by operating activities is largely due to an increase in net income,
adjusted for certain non-cash items such as inventories, amortization of debt discounts/warrants, accounts receivable and income
taxes payable.



For the year ended June 30, 2012, our net income was $13.6 million,
which included a $0.3 million loss resulting from increases in foreign exchange rates on foreign-denominated debt; an $0.8 million
gain resulting from a decrease in the fair value of our derivative stock warrant liability due primarily to a decrease in the estimated
fair value of our share price at June 30, 2012; depreciation and amortization expense of $1.5 million; $0.6 million of stock compensation
expense; and $3.4 million in amortization of deferred financing costs, debt discounts and warrants included in interest expense,
including $1.3 million in write-offs of original issue discount, offering costs and warrant costs related to the early repayment
of a $3.1 million note that was paid in full in the three months ended September 30, 2011 instead of on its original due date of
March 31, 2012. In addition, interest expense increased from $6.4 million for the year ended June 30, 2011 to $6.7 million for
the year ended June 30, 2012 primarily due to our utilization of short-term bridge financing and the credit facilities from Atlantis
and Aurora to finance most of the Baja acquisition and our Mexican operations since its acquisition. We repaid our highest-cost
bridge loans by the end of December 2011. We also used $16.4 million to fund net working capital requirements, consisting primarily
of a $15.7 million increase in trade and related party account receivables; a $2.9 million decrease in trade and related party
accounts payables due to harvest-related payables being paid in the period; a $5.4 million increase in prepaid expenses related
to the fiscal 2012 fishing season; and a $0.1 million increase in refundable value added taxes; partially offset by an $5.5 million
decrease in inventory and a $2.0 million increase in income taxes payable resulting from increased sales compared to the year ended
June 30, 2011.



Net cash used in operating activities for the year ended June
30, 2011 of $1.0 million reflected net income of $0.3 million, which included a gain on bargain purchase of $7.1 million related
to the acquisition of Baja and Oceanic and $0.6 million in net income from the Baja operations which at the time were an equity
investee; partially offset by a $0.5 million impairment loss on certain of Kali Tuna's property and equipment, a $0.3 million loss
resulting from an increase in the fair value of our derivative stock warrant liability due primarily to an increase in volatility;
depreciation and amortization expense of $1.4 million, $0.2 million of stock compensation cost, and $2.0 million in amortization
of deferred financing costs, debt discounts and warrants included in interest expense. Net use of cash from operating activities
also included a net working capital increase of $1.9 million, consisting primarily of an $8.7 million decrease in inventory, an
$11.7 million increase in accounts payable and accrued and other liabilities, a $1.1 million increase in income taxes payable and
a $0.1 million decrease in prepaid expenses and other current assets, partially offset by an $18.3 million increase in trade and
related party account receivables and a $1.4 million increase in refundable value added taxes.





43







Investing Activities. Cash used in investing activities
for the year ended June 30, 2012 was $4.4 million compared to $20.1 million for the year ended June 30, 2011. During the year ended
June 30, 2012, we spent $4.5 million on purchases of property and equipment. During the year ended June 30, 2011, we invested $16.6
million in the purchase and operations of Baja and Oceanic, we invested $1.6 million in the purchase of the BTH Joint Venture assets,
and we spent $1.8 million on the purchases of property and equipment.



Financing Activities. Cash provided by financing activities
for the year ended June 30, 2012 totaled $4.4 million, compared to $22.5 million for the year ended June 30, 2011. During the year
ended June 30, 2012, we borrowed $40.5 million from banks and third parties and $1.3 million from related parties to fund our operations
and capital requirements. This was offset by $24.8 million in principal and interest payments to non-related party lenders, $6.0
million in repayments to related parties, settlement of $5.4 million in related party notes and accounts payables, $1.0 million
in debt offering costs paid, and a $0.1 million earnest payment to Dino Vidov, Lubin's owner and Kali Tuna's General Manager, towards
the acquisition of 100% of his shares in Lubin, a variable interest entity in which we are the primary beneficiary. During the
year ended June 30, 2011, we borrowed $49.7 million from banks and third parties and $8.8 million from related parties, made $39.4
million in principal and interest payments to non-related party lenders, made $1.9 million in principal and interest payments to
related parties, and paid $1.2 million in debt offering costs. In addition, we received $4.9 million in net proceeds from the issuance
of common stock and warrants, and $1.6 million in funds were released from escrow accounts related to the acquisition of Baja and
Oceanic.



Credit Agreements and Borrowings



As noted above, due to the seasonality of our business, we have
been reliant on short-term bridge loans as a source of cash to fund our operations and cover temporary cash needs during the non-harvesting
season (April to September). Our borrowings were comprised as follows as of June 30, 2012 and June 30, 2011 (borrowings in thousands):



|                                         | Borrowing Party | Facility    |  | Interest Rate                                |  | Effective rate at June 30, 2012 |        | June 30, 2012 |        | June 30, 2011
|---------------------------------------- | --------------- | ----------- |  | -------------------------------------------- |  | ------------------------------- | ------ | ------------- | ------ | -------------
|Non-related party borrowings:            |                 |             |  |                                              |  |                                 |        |               |        |              
|Erste&Steiermaerkische bank d.d.         | Kali Tuna       | HRK 29,240  |  | 4.4% floating *                              |  | 5.74%                           |        | $             | 4,826  |              
|Erste&Steiermaerkische bank d.d.         | Kali Tuna       | HRK 30,000  |  | 4.4% floating *                              |  | 5.65%                           |        | 4,952         |        |              
|Erste&Steiermaerkische bank d.d.         | Kali Tuna       | JPY 180,000 |  | 3M JPY LIBOR+6.5%                            |  | n/a                             |        | -             |        |              
|Erste&Steiermaerkische bank d.d.         | Kali Tuna       | HRK 80,000  |  | 40% at HBOR 2.8% + 60% at 3%+floating T-Bill |  | 5.62%                           |        | 13,205        |        |              
|Erste&Steiermaerkische bank d.d.         | Lubin           | EUR 550     |  | 3M EURIBOR+5%                                |  | 6.04%                           |        | 603           |        |              
|Volksbank d.d.                           | Kali Tuna       | HRK 10,000  |  | 40% at HBOR 3.8% + 60% at 5.9%               |  | n/a                             |        | -             |        |              
|Privredna banka Zagreb d.d.              | Kali Tuna       | EUR 2,505   |  | 3M EURIBOR+4.75%                             |  | 5.68%                           |        | 2,371         |        |              
|Bancomer                                 | Baja            | MXN 50,000  |  | TIEE + 4.5%                                  |  | n/a                             |        | -             |        |              
|Bancomer                                 | Baja            | MXN 46,878  |  | TIEE + 5.0%                                  |  | 9.77%                           |        | 3,487         |        |              
|Amerra Capital Management, LLC           | Umami           | USD 30,000  |  | 9%+1YR LIBOR + 11.75% 1YR LIBOR              |  | 11.41%                          |        | 13,315        |        |              
|UTA Capital LLC                          | Umami           | USD 3,125   |  | 9%                                           |  | n/a                             |        | -             |        |              
|Private investors                        | Umami           | USD 5,624   |  | Nil                                          |  | n/a                             |        | -             |        |              
|Total obligations under capital leases   |                 |             |  |                                              |  |                                 |        | 14            |        |              
|Less: Debt Discount                      |                 |             |  |                                              |  |                                 |        | (513          | )      |              
|Total non-related party borrowings       |                 |             |  |                                              |  |                                 |        | $             | 42,260 |              
|                                         |                 |             |  |                                              |  |                                 |        |               |        |              
|Related party borrowings:                |                 |             |  |                                              |  |                                 |        |               |        |              
|Atlantis Co., Ltd.                       | Umami           | USD 15,000  |  | 1%/month                                     |  | n/a                             |        | $             | -      |              
|Aurora Investments ehf                   | Umami           | USD 8,000   |  | 1%/month                                     |  | n/a                             |        | -             |        |              
|Total related party borrowings           |                 |             |  |                                              |  |                                 |        | $             | -      |              
|                                         |                 |             |  |                                              |  |                                 |        |               |        |              
|Total borrowings                         |                 |             |  |                                              |  |                                 |        | $             | 42,260 |              
|                                         |                 |             |  |                                              |  |                                 |        |               |        |              
|Classification of borrowings:            |                 |             |  |                                              |  |                                 |        |               |        |              
|Short-term borrowings, non-related party |                 |             |  |                                              |  | $                               | 27,528 |               |        | $            
|Short-term borrowing, related party      |                 |             |  |                                              |  | -                               |        |               | 7,587  |              
|Long-term debt, non-related party        |                 |             |  |                                              |  | 14,732                          |        |               | 4,433  |              
|Long-term debt, related party            |                 |             |  |                                              |  | -                               |        |               | 2,000  |              
|Total borrowings                         |                 |             |  |                                              |  |                                 |        | $             | 42,260 |              



*At
discretion of bank





44







Material Credit Agreements - Croatian Operations:



Our Croatian operations are funded with local bank debt that
is secured by most of the Bluefin Tuna inventory, fixed assets and concessions of our Croatian operations. Most of the loans require
pre-approval for any funds to be distributed outside of the Croatian operations. At June 30, 2012, Kali Tuna had $26.0 million
in bank debt, of which $11.2 million was current and $14.7 million was long-term. At June 30, 2012, we had $8.0 million of cash
on hand available for use by our Croatian operations. The following is a description of the material indebtedness owed by our Croatian
operations:



Erste & Steiermaerkische Bank Loans



On October 30, 2007, Kali Tuna entered into a framework credit
agreement with Erste & Steiermaerkische bank d.d. (“Erste & Steiermaerkische”), which was renewed on January
21, 2008. The framework agreements provided for a secured credit facility consisting of three revolving credit lines: (i) a credit
line of HRK 29.2 million, granted under the short term revolving credit agreement dated November 12, 2007, payable successively
or at once on February 15, 2012, with a variable interest rate of 5.0%; (ii) a credit line of HRK 30.0 million, granted under the
short term revolving credit agreement dated June 6, 2008, payable successively or at once on March 15, 2012, with a variable interest
rate of 5.0%; and (iii) a credit line of JPY 180.0 million, payable successively or at once on March 1, 2012, with a variable interest
rate of 3-month LIBOR + 6.5%. The funds were to be used for preparation of goods for export and other export purposes. The first
two of the mentioned agreements were executed as part of the program of the Croatian Bank for Reconstruction and Development for
advancement of export, which included a subsidized interest rate, and were each renewed for one additional year. The JPY 180.0
million credit line was repaid in full in March 2012 and has not been renewed. On March 15, 2012, the HRK 29.2 million and HRK
30.0 million credit lines were extended to February 15, 2013 and March 15, 2013, respectively, and, in connection therewith, the
interest rates were reduced from 5.0% to 4.4%.





45







On April 15, 2011, Lubin entered into a credit agreement with
Erste & Steiermaerkische. The agreement provides for a secured credit facility of EUR 0.6 million with interest payable monthly
at a variable rate of three-month EURIBOR plus 5.0%. The loan matures on January 31, 2018. Funds advanced were used for operational
purposes at our Croatian operations. The loan/facility is secured by certain fixed assets of our Croatian operations. Kali Tuna
is jointly liable for all of Lubin's obligations under the facility.



On June 8, 2011, Kali Tuna entered into an additional syndicated
credit agreement with Erste & Steiermaerkische and the Croatian Bank for Reconstruction and Development (“HBOR”).
The agreement provides for a secured credit facility consisting of a credit line of HRK 80.0 million, which was fully drawn at
December 31, 2011, with 40.0% of the credit line (funds of HBOR) accruing interest at a variable rate of 2.8% and the remaining
60.0% at a variable rate equal to the rate accruing on Croatian National Bank bills with maturity of 91 days, plus 3.0%. The facility
matures on December 31, 2014 and is repayable in one installment. The interest is payable quarterly. Funds advanced are to be used
for working capital needs for the operation of our farming sites in Croatia or for the purchase of Bluefin Tuna, and require that
matching funds (at least 45%) be provided by us. As of June 30, 2012, Kali Tuna has drawn all funds available under the line. The
line is secured by live Bluefin Tuna owned by us in Croatia, as well as other security instruments, including guaranties issued
by Lubin, Atlantis and us.



Under the Erste & Steiermaerkische's agreements, Kali Tuna
agreed that, without obtaining Erste & Steiermaerkische's consent, it would not pledge or otherwise encumber its assets, dispose
of its assets (except in the ordinary course of business), undertake actions affecting the company's status (including mergers
or subdivisions), repay indebtedness owed to its shareholders, guarantee the obligations of others (with the exception of Lubin's
loan) or incur additional indebtedness. Events of defaults, which results in an acceleration of all amounts due under the facility,
include the failure to pay any obligation when due, Kali Tuna's insolvency, a material adverse change in Kali Tuna's business,
use of funds for purposes other than those for which the loan was granted, the invalidity (or non-substitution) of any of the security
instruments, a breach of the obligation to conduct at least 75% of the payment operations through Erste & Steiermaerkische,
and a change of ownership of Kali Tuna that is not acceptable to Erste & Steiermaerkische.



Other Bank Loans



Kali Tuna also has a loan from Privredna banka Zagreb d.d. for
EUR 2.5 million that matures on March 31, 2014 and is payable in three annual installments which began March 31, 2012. The first
annual installment was paid early in January 2012. Interest is payable monthly based on the three-month EURIBOR rate plus 4.75%.
Funds advanced were granted for the purchase of certain assets and for working capital purposes. The loan is secured by certain
of our fish inventory in Croatia as well as certain other security instruments, including the pledge over two motor boats owned
by the seller of those assets. The parties established that the value of the pledged Bluefin Tuna inventory amounted to HRK 29.7
million on March 31, 2011, and Kali Tuna undertook to maintain a certain value of inventory until the full repayment of the loan.
Under the agreement, Kali Tuna undertook various other obligations, including not to assume further debts or to encumber its assets
in a manner that could affect its ability to repay the loan, to inform the bank of all material changes (including changes of the
company status) or changes affecting its business or ability to repay the loan and to conduct its monetary operations through the
bank on a pro rata basis in relation to other creditors. In case of default, the bank may terminate the agreement with immediate
effect and make due the total amount of the loan. Events of default include a delay in repaying any of its obligations under the
agreement (or any other agreement it may enter into with the bank), a material adverse changes that may reasonably affect the ability
of Kali Tuna to fulfill its obligations under the agreement and a change of the company name or address of which the bank is not
informed within three days. In addition, Kali Tuna undertook not to perform any activities that could endanger the environment
or any activities in breach of the applicable regulations relating to environmental protection for the duration of the agreement.



Kali Tuna had an additional credit line that was paid in full
in January 2012. The credit line was with Volksbank d.d. for HRK 10.0 million that was to mature on December 31, 2013 and was payable
in quarterly installments of $0.2 million, which began March 31, 2011. The terms of the loan called for a variable interest rate
based on 40.0% of the funds at a rate of 3.8%, with the remaining 60.0% at a rate of 5.9%. The loan was secured by certain of our
Croatian fish inventory and certain other security instruments, including a guaranty by Lubin.



Material Credit Agreements - Mexican Operations:



On July 5, 2010, Baja entered into a revolver facility (amended
on June 23, 2011) with BBVA Bancomer, S.A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer (“Bancomer”)
for MXN 50.0 million that accrued interest payable at an annual rate equal to the Mexican 28-days period Tasa de Interés
Interbancaria de Equilibrio (“TIIE”) + 4.5% and was secured by certain Baja inventory. Marpesca and Oli Steindorsson,
our Chairman, President and Chief Executive Officer, were joint obligors under the credit facility. This facility matured on September
30, 2011, was extended to November 4, 2011 and was paid in full in October 2011.





46







On February 22, 2012, Baja entered into a revolver facility
with Bancomer for MXN 46.9 million that accrues interest payable at an annual rate of the 28-days period TIIE and is unsecured.
This facility matures on February 22, 2013. At June 30, 2012, Baja has drawn all funds available under the facility. Under this
facility Baja is not subject to restrictive covenants other than customary affirmative covenants such as the periodic delivery
of financial statements and compliance with applicable Mexican environmental laws and regulations. This facility does not restrict
the ability of Baja to pay dividends.



Private Investor Loans - Baja and Umami:



On August 26, 2011, we, together with Baja, entered into a credit
agreement with AMERRA Agri Fund, L.P., AMERRA Agri Opportunity Fund, L.P., JP Morgan Chase Retirement Plan (the “Lending
Parties”) and AMERRA Capital Management, LLC (as administrative agent). The agreement was amended in February 2012, April
2012, June 2012 and August 2012 (the agreement, as amended, is referred to as the “AMERRA Agreement”).



The AMERRA Agreement provides for a secured credit facility
consisting of loans in an aggregate principal amount of up to $30.0 million (increased to $35.0 million in August 2012, including
a $5.0 million term loan facility), with a variable interest rate of one-year LIBOR plus 9.0% for a portion of the loans and LIBOR
plus 11.75% for a portion of the loans. At June 30, 2012, $19.7 million in additional funds were available under the line. Additional
funds can also be available based on growth of the biomass in Baja.



Funds advanced are to be used solely to refinance certain of
our indebtedness, to finance the working capital needs of Baja and Kali, and to pay expenses incurred in connection with the credit
facility. The loans were funded in multiple tranches. The first tranche of $5.2 million was received on September 7, 2011 in the
amount of $5.1 million, of which $3.1 million was used to repay a secured note with a maturity date of March 31, 2012, plus accrued
interest and to pay placement agent costs totaling $0.1 million, with the remainder being used as general working capital for growth
and reinforcement of infrastructure at the Company's facility in Mexico. The second tranche of $1.1 million was received on September
15, 2011. In January 2012, the Company repaid $0.3 million of the initial funds. The third tranche of $4.0 million was received
on April 16, 2012 in the amount of $3.9 million. In addition, the fourth tranche of $0.4 million was received on May 24, 2012,
the fifth tranche of $0.5 million was received on June 8, 2012, and the sixth tranche of $2.0 million was received on June 26,
2012. Additional tranches totaling $17.7 million with net proceeds of $17.4 million were received in July and August 2012, including
$5.0 million received as a term loan with net proceeds of $4.8 million under the credit agreement.



The notes are secured by (1) substantially all of the Umami's
assets, including the shares it holds in Baja and Oceanic and (2) pledges of the common stock of Marpesca made by Baja. Moreover,
each of Atlantis, Aurora, Oceanic and Mr. Steindorsson have guaranteed prompt and complete performance of Umami's obligations under
the AMERRA Agreement and related contracts.



In August 2011, we also issued five-year warrants to the Lending
Parties to purchase 500,000 shares of our common stock at an initial exercise price of $1.50. In connection with the AMERRA Agreement,
we granted the Lending Parties demand and piggyback registration rights and agreed to indemnify them and AMERRA against certain
expenses related to the transaction and controversies arising thereunder or in connection with their registration rights, should
they occur. The warrants are subject to anti-dilution protection should their then-applicable exercise price be greater than the
price or exercise price of certain subsequently issued common stock or securities (including additional warrants), among other
circumstances.



We and our subsidiaries are subject to a number of restrictions
under the AMERRA Agreement that affect our ability to incur indebtedness, transfer assets, issue dividends and make investments,
among other activities. For instance, subject to certain exceptions, we and our subsidiaries: (1) may not incur or permit to exist
any indebtedness, unless the indebtedness: (a) is pre-existing or is a like-amount renewal of pre-existing debt, (b) is used to
finance the acquisition and maintenance of capital assets and does not exceed $500,000, (c) is related to trade letters of credit,
(d) is certain subordinated debt, (e) is incurred to harvest or increase our biomass, (f) is assumed pursuant to a permitted acquisition,
(g) is secured and does not exceed $5.0 million outstanding at any time, or (h) qualifies under another limited exemption; (2)
may not create, incur or permit any lien on our existing or subsequently acquired property, or assign or sell any rights (including
accounts receivable) in respect of any thereof; (3) may not, without prior approval from certain of the Lending Parties, undergo
a fundamental corporate change or dispose of substantially all of our or any of our subsidiaries' assets or the stock in our subsidiaries;
(4) may not engage in any business other than the type conducted when we entered into the agreement or a business reasonably related
to that type; (5) may not hold or acquire any securities (including pursuant to a merger) of, make any loan to or guarantee for,
or permit to exist an interest in any assets of, another person or entity, or acquire the assets of another person or entity constituting
a business unit, except in the case of (a) short-term U.S. Treasuries, certain highly-rated commercial paper or money market funds,
and certain other similar securities, (b) an investment in the capital stock of an existing subsidiary, (c) mergers or other combinations
in which we or our subsidiary is the survivor and the acquired company operates in a complementary line of business, subject to
the approval of AMERRA or (d) other investments or transactions otherwise permitted under the agreement; (6) may not make certain
restricted payments, including, in the case of us but not our subsidiaries, cash or other non-stock dividends; (7) may not sell
to, purchase from, or otherwise engage in any transactions with any affiliates not in the ordinary course and on arm's-length terms,
unless the transaction only involves us and our subsidiaries or is otherwise permitted under the agreement; (8) may not enter or
permit to exist any arrangement that restricts (a) us and our subsidiaries' ability to create liens against property or assets
or (b) our subsidiaries' ability to pay dividends, repay loans to, or guarantee the indebtedness of, us or other of our subsidiaries,
subject to certain exceptions. We are also subject to certain financial ratio requirements and both us and Baja must maintain minimum
amounts of working capital.





47







The amounts due under the facility at June 30, 2012 are due
no later than December 31, 2012, except for the $5.0 million term loan drawn down under the amendment to the credit agreement in
August 2012, which is due on March 31, 2013. In addition, in the event the Bluefin Tuna biomass at the farm has not increased,
from growth or the fishing season, to meet certain agreed upon levels by certain dates up to $5.0 million would have been due August
31, 2012, an additional $5.0 million will be due September 30, 2012, with the remaining payable on December 31, 2012. As our biomass
increased resulting from our fishing season, we were not required to make the $5.0 million payments due on August 31, 2012 and
September 30, 2012.



Related Party Loans - Atlantis and Aurora:



At June 30, 2011, we owed Atlantis and Aurora a total of $9.6
million in notes payable. On July 7, 2011, we entered into a credit facility with Atlantis that provided for a line of credit of
up to $15.0 million. This amount included funds utilized for the refinance of the $4.0 million of the notes payable due to Atlantis
on June 30, 2011. New funds available under the credit line totaled $10.7 million (after deduction of fees and expenses). Principal
amounts drawn under the credit line bore interest at the rate of 1.0% per month based on the average amount outstanding payable
monthly, and required payment of a 1.25% fee related to the advances. During the year ended June 30, 2012, we borrowed an additional
$1.3 million from Atlantis, repaid $2.7 million to Atlantis and paid $3.0 million to others on Atlantis' behalf. Also, we issued
warrants to acquire 258,948 shares of our common stock at an exercise price of $3.00 per share in connection with amounts borrowed
from Atlantis. The notes and accrued interest totaling $5.4 million were due and payable on March 31, 2012. In addition, we owed
Atlantis Japan $0.9 million in commissions at March 31, 2012. However, the parties agreed to offset these amounts totaling $6.3
million against receivables owed to us by Atlantis Japan effective March 31, 2012. See further discussion at Note 11 - Related
Parties elsewhere in this report.



Material Covenants or Operating Restrictions



The terms of the AMERRA Agreement prohibit us from paying cash
dividends and making certain other restricted payments, and also prohibit certain transactions with affiliates, without AMERRA's
prior written consent. In addition, we and our subsidiaries are limited by the AMERRA facility in our and their ability to incur
additional indebtedness and to issue future liens against assets and we and they may not enter into or permit agreements restricting
the ability to create liens, or preventing a subsidiary from paying dividends. Finally, we and Baja must also maintain specified
financial ratios and working capital requirements, as provided in the AMERRA credit agreement. Under the Atlantis credit facility,
a change in control transaction or asset sale can permit Atlantis to cancel the facility and declare all outstanding amounts due
and payable. For additional restrictions and material covenants related to our subsidiaries' credit facilities, see Note 8 and
"-Sources of Liquidity" below.



Market Value



The fair value of our saleable inventory is based upon the market
price that an unrelated party would be willing to pay for the inventory, less estimated selling costs. In the Adriatic Sea, there
is a ban on the sale of tuna less than 30 kg to the general market for consumption and, accordingly, we consider these fish to
be nonsaleable. The fair value for these fish is estimated at the cost to bring that inventory to its present location and condition.



The market value of saleable live tuna stock inventories at
June 30, 2012 and June 30, 2011 was estimated at $54.5 million and $72.0 million, respectively. The market value of live tuna stock
is determined by multiplying the metric tons of the biomass by the market price estimated on those dates based on actual sales
contracts.





48







Sources of Liquidity



Our cash flow cycle is highly seasonal as it follows our operating
cycle. During the harvest season, which generally begins in October and ends around February of each year, our cash inflows greatly
exceed our cash outflows. Once the annual harvest is completed, we rely on the cash generated from the harvest plus working capital
financing to finance our farming operations, costs to catch Bluefin Tuna and costs to pay ongoing general and administrative costs
plus any interest or principal payments required to service our debt.



For the year ended June 30, 2012, our most significant sources
of liquidity were proceeds from the sale of Bluefin Tuna and cash from lines of credit with commercial banks and bridge loans.
Significant uses of liquidity include funding of our operations, including fishing in Mexico and Croatia, repayment of amounts
advanced by related parties and repayment of bank and other debt.



At June 30, 2012, we had $10.8 million in cash. On May 15, 2012,
the Company reached an agreement with Atlantis whereby Atlantis and Umami agreed to offset all amounts due to Atlantis under the
Atlantis Credit facility, including interest, and the amounts due to Atlantis Japan under the Sales Agency agreement effective
as of March 31, 2012 (a total of $6.3 million) against amounts due to Kali Tuna and Baja for fish purchased by Atlantis Japan.
Additionally, Atlantis and Atlantis Japan agreed to pay us for all remaining amounts owed by Atlantis Japan under its purchase
agreements with Kali Tuna (totaling HRK 99.7 million or approximately $17.1 million USD on May 15, 2012) and Baja (totaling $1.1
million USD), representing the amounts that would have been received by Kali Tuna and Baja in their respective functional currencies
had the accounts receivable been paid on their respective due dates. The amounts were due no later than July 31, 2012. On June
27, 2012, the agreement was amended whereby Atlantis and Atlantis Japan agreed to pay Kali Tuna as the secured party for all remaining
amounts owed by Atlantis Japan under its purchase agreements with Kali Tuna (totaling JPY 1.3 billion or approximately $16.4 million
USD on June 27, 2012). The net amount due to the Company at June 30, 2012 of $17.3 million shown on the consolidated balance sheet
represents the amount due to Kali in Japanese Yen converted into USD at the prevailing exchange rates on June 30, 2012 and the
amount due to Baja in USD. The total amount due from Atlantis at June 30, 2012 discussed above ($18.2 million) represents the agreed
upon amount due to the Company at the prevailing exchange rates on May 15, 2012 (the date of the agreement with Atlantis discussed
above). To provide security for this total amount due to the Company, Atlantis has secured these obligations with 8.0 million of
its shares in the Company. As Atlantis has not paid the net amount due by July 31, 2012, we have the right to liquidate enough
of the 8.0 million shares of collateral to settle the total amount due to Kali Tuna and Baja and return any excess shares to Atlantis.
In the event the proceeds from liquidation of all 8.0 million shares is insufficient to settle the total amount due to Kali Tuna
and Baja, Atlantis would remain obligated to pay the remaining amount.



Of our total consolidated cash balance of $10.8 million at June
30, 2012, $8.0 million is held at our Croatian operation, $2.8 million is held at our Mexican operations, and the remainder (less
than $0.1 million) is held by Umami and Oceanic. Under the terms of Kali Tuna's debt agreements, any movement of funds to Umami
would require pre-approval by those lenders. However, under our current investment strategy, we do not anticipate any additional
remittance of any of Kali Tuna's undistributed earnings as we consider them to be indefinitely reinvested. See further discussion
at Note 12 to our consolidated financial statements included elsewhere in this report. In addition, at June 30, 2012, our Croatian
operation had approximately $2.3 million (JPY 180.0 million) available under a revolving credit line with a Croatian bank. We believe
our Croatian operation has sufficient capital to fund its fishing and farming operations through the 2012-2013 harvest season,
based on their available cash balance at June 30, 2012 and their ability draw down their existing revolving credit line.



In addition to their cash balance of $2.8 million at June 30,
2012, our Mexican operation had $19.7 million available under the AMERRA Agreement discussed above. We believe our Mexican operation
has or will be able to obtain sufficient capital to fund its farming operations through the 2012-2013 harvest season, however it
will need to obtain additional capital to (i) expand its fleet to increase the quantity of Bluefin Tuna or feed it can catch, or
(ii) purchase additional Bluefin Tuna to increase its biomass. In addition, we will need to obtain additional financing to fund
our corporate operations. We may pursue sources of additional capital by issuing securities through various financing transactions
or arrangements, including joint ventures, debt or equity financing. We have previously addressed liquidity needs by issuing debt
with commercially unfavorable terms, sometimes with warrants to purchase shares of our common stock. If we require additional capital,
we may also consider harvesting a portion of our Bluefin Tuna inventory earlier in the extended-lifecycle process than we otherwise
would have. For example, in fiscal 2012, we began harvesting Bluefin Tuna in July. Additional financing may not be available when
needed on commercially reasonable terms, or at all. The inability to obtain additional capital may reduce our ability to continue
to conduct business operations as currently contemplated. Any additional equity financing may involve substantial dilution to our
existing stockholders.



We expect to utilize a portion of these resources to pay debt
service obligations in the next twelve months. Our debt service obligations in the next twelve months consist of (i) debt principal
repayments of $40.3 million to financial institutions and unrelated third parties and (ii) approximately $3.1 million in interest
payments due on financings from financial institutions and unrelated third parties.





49







Off Balance Sheet Arrangements



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



Seasonality and Fiscal Year



Our business is highly seasonal, both with respect to revenue,
expenses, cash flow and capital requirements. In Croatia, we use our fleet or fishing vessels to catch Bluefin Tuna during May
and June and in Mexico, we lease a fleet of purse seiners and tugboats for an eight-week period during the fishing season of May
through August to catch Bluefin Tuna. Purchases of Bluefin Tuna can occur at any time. However, there are generally additional
opportunities during the fishing seasons as fishermen may decide to sell us all or a portion of their live catch. Our tuna sales
typically occur between October and February, when the sea temperature is lowest and Bluefin Tuna growth is slowest. Absent liquidity
requirements, we generally do not generate sales during the rest of the year. Accordingly, our fishing activities and a substantial
portion of our farming operations require funds during periods where we are receiving no revenue from harvesting. Our fiscal year,
which starts on July 1 and ends on June 30, fits our farming operation because each fiscal year includes a full annual harvest
cycle.



For the year ended June 30, 2010, 19% of our sales were in the
second quarter, 80% of our sales were in the third quarter and 1% of our sales were in the fourth quarter. For the year ended June
30, 2011, 25% of our sales were in the second quarter, 74% of our sales were in the third quarter and 1% of our sales were in the
fourth quarter. For the year ended June 30, 2012, 16% of our sales were in the first quarter, 57% of our sales were in the second
quarter, 26% of our sales were in the third quarter, and less than 1% of our sales were in the fourth quarter. For the year ended
June 30, 2012, we had significant sales in the first quarter as management decided to meet current liquidity needs by harvesting
early some of our fish. In addition, we completed a significant portion of our fiscal 2012 sales in our second fiscal quarter as
Baja's fiscal 2012 harvest season was completed in November 2011, and our Kali fiscal 2012 harvest season was completed in January
2012.



We historically have relied on cash proceeds collected from
our tuna sales along with bank borrowings and other capital resources to fund our operations. Our operating plan contemplates expanding
our extended-cycle farming by retaining biomass at the end of each harvest for up to three years. Accordingly, we need to continue
feeding our Bluefin Tuna and maintaining our farming operations year-round, which results in year-round expenses that are not matched
by our highly seasonal revenue. We also have year-round general and administrative costs and interest expense that must be funded.
See “- Liquidity and Capital Resources” elsewhere in this report.



Inflation



We believe inflation has not had a material effect on our financial
condition or results of operations in recent years.





50







Part III



Item 10. Directors, Executive Officers and Corporate Governance



OUR EXECUTIVE OFFICERS



Executive officers are elected by and serve at the discretion
of the Board of Directors (the “Board of Directors”) of Umami. The names of our current executive officers and significant
employees, their ages as of October 29, 2012 and their positions with the Company are set forth below, followed by certain other
information about them:



|Name                   | Age | Position                                                
|---------------------- | --- | --------------------------------------------------------
|Oli Valur Steindorsson | 38  | Chairman, President and Chief Executive Officer         
|Timothy P. Fitzpatrick | 45  | Chief Financial Officer                                 
|Benito Sarmiento       | 51  | Chief Executive Officer of Baja Aqua Farms, S.A. de C.V.
|Miro Mirkovic          | 51  | Director of Kali Tuna, d.o.o.                           



Executive Officers



Oli Steindorssonhas been
our Chairman, President and Chief Executive Officer since June 2010. He has been a director of Kali Tuna, our wholly owned subsidiary,
since 2005. From 2004 until 2011, he was the Chairman of Atlantis Group, a seafood trading company and our majority stockholder.
In addition, he has been a director in the following privately held entities: Atlantis Chile: 2004 – 2007 (holding company
for salmon farming company divested by Atlantis Group in 2006, subsidiary closed 2007); Atlantis Miami: 2004 – 2007 (seafood
trading company, divested by Atlantis Group in 2007); Atlantis Japan: 2005 – 2006 (seafood sales company, divested May 2011);
Atlantis Resources Australia: 2004 – current (seafood trading, holding company, divested May 2011 awaiting confirmation of
removal from BOD); Coral Sea Fishing PTY ltd: 2007 – current (seafood processor, patent holder, divested May 2011 awaiting
confirmation from removal of BOD); KT doo Finance PTY ltd: 2004 – 2010 (holding company divested 2010); Havtorsk Sales AS;
2004 – current (seafood export company, cod farming); Kali Tuna Doo; 2006 – current (seafood export, tuna and pelagic
fisheries, tuna farming); Baja Aquafarms SA de CV: 2004 – 2006, Chairman Nov 2010 – current (seafood export, tuna farming,
vessel operations); Oceanic November 2010 – current. He has also been involved in the following real estate ventures: Chairman
of Phoenix Investments ltd (Iceland) 2004 – 2006 (developed several commercial and residential properties in Iceland, sold
out April 2006); Phoenix Real Estate AS (Norway) 2004 - 2010 (small scale real estate company, divested in 2010); Atlito PTY Ltd
(Australia) 2004 – 2010 (small scale real estate, assets sold out 2007, 2008, company closed in 2010); Valkyrie Investments
Pty Ltd (Australia) 2004 – 2010 (company closed in 2010); Director of Adiantum (Lithuania) 2008 – current (developing
several commercial and residential land plots); Chairman Aurora Investments 2006 – current (holding company for shares in
Atlantis Group, various financing activities to Atlantis Group); Chairman of Aur Capital 2010 – current (holding company
for Umami shares). Mr. Steindorsson attended the University of Iceland where he earned a B.S. degree in Business Administration
in 1998. We believe that Mr. Steindorsson is uniquely qualified to be a director with his long background in the fishing industry,
his familiarity with our operations and his extensive contacts in Japan and Japanese language abilities. Under the terms of Mr.
Steindorsson’s employment agreement, he is required to spend no less than 80% of his time working for us.



Timothy P. Fitzpatrickhas
been our Chief Financial Officer since January 5, 2012. He was general counsel of Mindray Medical International Limited, a medical
device company, from September 2006 to June 2011. Prior to joining Mindray, Mr. Fitzpatrick worked as an attorney in the United
States and Hong Kong. Mr. Fitzpatrick received his M.B.A. from the Kellog-HKUST Executive MBA Program in Hong Kong, his J.D. from
the University of California, Los Angeles, his M.A. from the University of California, San Diego, and his B.A. from Hamilton College.
Mr. Fitzpatrick is also currently the chief financial officer of Guardtime, which he joined in August 2011.



Significant Employees



Benito Sarmientowas appointed
Chief Executive Officer of Baja Farms, S.A. de C.V. in December 2010. Mr. Sarmiento has been employed by Baja since December 2005.
Prior to being named Chief Executive Officer, Mr. Sarmiento was the General Manager of Marpesca. Mr. Sarmiento holds a degree in
Chemical Engineering from Instituto Technológico y de Estudios Superiores de Monterrey and has over ten years of experience
working in the seafood industry in Mexico.



Miro Mirkovichas been a Director
(the equivalent of an officer with executive management authority and the power to bind an entity) of Kali Tuna d.o.o., our indirect
wholly-owned subsidiary, since 2008. He was Director of Farming and Fisheries of Jadran Tuna from 2007 to 2008. Mr. Mirkovic was
Chairman of the Board of Marituna from 2001 to 2007. He holds a degree from a Navy College in Croatia.





51







Mr. Steindorsson, our Chairman, President
and Chief Executive Officer, and Mr. Fitzpatrick, our Chief Financial Officer, currently devote approximately 80% of their working
time, or approximately 50 hours per week, to Umami and its subsidiaries. Other than Mssrs. Steindorsson and Fitzpatrick, each member
of management currently devotes 100% of his working time to Umami and its subsidiaries.



Executive officers serve at the pleasure
of our Board of Directors. There are no arrangements or understandings between any officer and any other person pursuant to which
such executive officer was or is to be selected as an executive officer. There are no family relationships between any executive
officer, director or person nominated by us to become a director or executive officer.



OUR DIRECTORS



Our Board of Directors currently consists of five directors.
The names of our directors, their ages as of October 29, 2012 and their positions with the Company are set forth below, followed
by certain other information about them:



|Name                   | Age | Position Held                                  
|---------------------- | --- | -----------------------------------------------
|Oli Valur Steindorsson | 38  | Chairman, President and Chief Executive Officer
|Douglas Dunn           | 69  | Independent Director                           
|Michael David Gualt    | 43  | Independent Director                           
|Yukuo Takenaka         | 69  | Independent Director                           
|James White            | 52  | Independent Director                           



Set forth below is a brief biographical
description of each of our directors. The primary individual experience, qualifications, attributes and skills of each of our directors
that led to the Corporate Governance and Nominating Committee’s and Board’s conclusion that such director should serve
as a member of the Board are also described in the following paragraphs.



Oli Valur Steindorsson’s
biography is set forth under the heading “Our Executive Officers” above.



Douglas Dunnhas served as
a member of our board of directors since March 2011. He was the Managing Partner of Dunn Associates, a real estate investment firm,
from 2006 to 2011. Mr. Dunn currently sits on the board of directors of Universal Stainless & Alloy Products, Inc., Power Efficiency
Corporation and the Dunn Family Foundation. Mr. Dunn is a member of the audit committee and compensation committee of both companies
and also a member of the governance committee of Universal Stainless & Alloy Products. He had a career with AT&T and retired
as an officer of that corporation. Subsequently he served as Dean of the business school at Carnegie Mellon University, now the
Tepper School of Business. Mr. Dunn received a Ph.D. in business statistics from the University of Michigan, Ann Arbor. We believe
that Mr. Dunn is qualified to serve as a member of our board of directors due to his business background and public company experience.



Michael David Gaulthas served
as a member of our board of directors since June 2010. He is one of the co-founders of Atlantis Group and has been a director of
that entity since 2006. Since August 2008, he has been the Chief Executive Officer of Guardtime Ltd., a software company maintaining
an infrastructure for data security in cloud computing. He was a Managing Director at Barclays Capital from April 2005 until August
2008, where he was responsible for developing financial products for the Japanese market. From 1997 until 2005 he was a director
at Credit Suisse. Mr. Gault brings more than 20 years diverse experience including stints in the military, academia, engineering
and financial derivatives. He received a Ph.D. in electronic engineering from the University of Wales. We believe that he is uniquely
qualified serve as a member of our board of directors as a result of his extensive international contacts and his banking relationships.



Yukuo Takenakahas served
as a member of our board of directors since March 2011. He has been the President of Takenaka Partners LLC, an investment banking
firm, since 1989. Mr. Takenaka is also currently a member of the Board of Directors of JPH Holdings, Inc., EYE Lighting International
of North America, Inc., and Hitachi Chemical Diagnostics, Inc., where he is also a member of the audit and compensation committees.
All three are non-publicly held companies. Mr. Takenaka received a B.S. degree in accounting from the University of Utah. We believe
that Mr. Takenaka is qualified to serve as a member of our board of directors due to his financial background and investment banking
experience.





52







James White has served as
a member of our board of directors since January 2011. He has been the Managing Partner and President of Baynes & White Inc.,
a consulting and actuarial firm, from May 1993 to the present. Mr. White served on the board of directors of Patricia Mining Corp.
from October 2005 to December 2008, Matamec Explorations Inc. from July 2006 to October 2009 and Sydney Resource Corp. He is currently
a director and member of the audit committee of PC Gold Corp., Auriga Gold Corp., and Currency Exchange International, all of which
are Canadian public companies. He is also a member of the compensation committee of Auriga Gold Corp and Currency Exchange International.
We believe that Mr. White is qualified to serve as a member of our board of directors due to his financial background and experience
in the debt and equity markets.



There are no arrangements or understandings
between any director and any other person pursuant to which such director was or is to be selected as a director. There are no
family relationships between any executive officer, director or person nominated by us to become a director or executive officer.



SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE



Section 16(a) of the Exchange Act requires
our directors, executive officers and beneficial owners of more than 10% of our common stock to file reports of ownership and changes
in ownership with the SEC. To the Company’s knowledge, based solely on copies of these reports provided to us and written
representations that no other reports were required, all Section 16(a) filing requirements applicable to its officers and directors
were complied with; except that one report, covering an aggregate of four transactions, was never filed on behalf of Mr. White,
one report, covering an aggregate of four transactions, was never filed on behalf of Mr. Dunn and one report, covering an aggregate
of four transactions, was never filed on behalf of Mr. Takenaka. In addition, one report covering one transaction was filed late
by Mr. Fitzpatrick. We did not receive any representations or reports from greater than ten percent beneficial owners.



CODE OF BUSINESS CONDUCT AND ETHICS



We have adopted the Umami Sustainable Seafood
Inc. Code of Business Conduct and Ethics, which applies to our directors, executive officers and employees. A copy of the Code
of Business Conduct and Ethics is publicly available on our website at www.umamiseafood.com. If we make any substantive
amendments to the Code of Business Conduct and Ethics or grant any waiver from a provision of the code applying to our principal
executive officer or our principal financial or accounting officer, we will disclose the nature of such amendment or waiver on
our website or in a report on Form 8-K.



AUDIT COMMITTEE



The Company has a separately-designated Audit Committee established
in accordance with Section 3(a)(58)(A) and Section 10A(m) of the Exchange Act, as amended. The Audit Committee consists of Yukuo
Takenaka (Chairman), Douglas Dunn and James White. Each member of the Audit Committee is independent within the meaning of applicable
SEC rules and the NASDAQ Marketplace Rule 5605(a)(2). The Board has determined that Mr. Takenaka is an “audit committee financial
expert” within the meaning of SEC rules.



Item 13. Certain Relationships and Related Transactions,
and Director Independence



Related parties are those parties which have influence over
the Company, directly or indirectly, either through common ownership or other relationship. In 2005, Kali Tuna, a limited liability
company organized under the laws of the Republic of Croatia, was acquired by Atlantis Group hf, or Atlantis, an Icelandic holding
company with its key market in Japan that seeks to produce, market and distribute sustainable seafood, with a focus on aquaculture.
Atlantis is our largest stockholder and an affiliate of our Chief Executive Officer. Atlantis or Atlantis Co., Ltd., ("Atlantis
Japan"), a wholly-owned subsidiary of Atlantis, served as our exclusive sales agent through the 2011-2012 harvest season (see
further discussion at —"Sales Agency Agreement" below). In addition, for the years ended June 30, 2012 and 2011,
Atlantis Japan and other Atlantis subsidiaries, purchased from us, for their own account and not as sales agents, approximately
$29.4 million and $40.9 million of Bluefin Tuna, respectively, representing 30.2% and 71.9%, respectively of our total sales for
those years. Our sales contract with Atlantis Japan was terminated effective March 31, 2012. We have adopted policies that prohibit
any future related-party transactions with Atlantis. Except for this sales relationship, Atlantis Japan did not provide any other
function to us. We have also entered into financing transactions with Aurora Investments ehf ("Aurora"), one of our shareholders
that is indirectly owned by our Chief Executive Officer, who is also a director of Aurora.





53







Financing Transactions



At June 30, 2011, we owed Atlantis and Aurora $4.3 million and
$5.3 million in notes payable and accrued interest and fees, respectively. On July 7, 2011, we entered into a credit facility with
Atlantis that provided for a line of credit of up to $15.0 million. This amount included funds utilized for the refinance of the
$4.0 million of the notes payable due to Atlantis on June 30, 2011. New funds available under the credit line totaled $10.7 million
(after reduction of fees and expenses). Principal amounts drawn under the credit line bore interest at the rate of 1.0% per month
based on the average amount outstanding payable monthly, and required payment of a 1.25% fee related to the advances. During the
year ended June 30, 2012, we borrowed an additional $1.3 million from Atlantis, repaid $2.7 million to Atlantis and Aurora and
paid $3.0 million to others on Atlantis' behalf. Also, during the year ended June 30, 2012, we issued warrants to acquire 258,948
shares of its common stock at an exercise price of $3.00 in connection with amounts borrowed from Atlantis. The notes and accrued
interest totaling $5.4 million were due and payable March 31, 2012. In addition, we owed Atlantis Japan $0.9 million in commissions
at March 31, 2012. However, on May 15, 2012 we reached an agreement with Atlantis whereby Atlantis and Umami agreed to offset all
amounts due to Atlantis under the Atlantis Credit facility, including interest, and the amounts due to Atlantis Japan under the
Sales Agency agreement effective as of March 31, 2012 (a total of $6.3 million) against amounts due to Kali Tuna and Baja for fish
purchased by Atlantis Japan. Additionally, Atlantis and Atlantis Japan agreed to pay the Company for all remaining amounts owed
by Atlantis Japan under its purchase agreements with Kali Tuna (totaling HRK 99.7 million or approximately $17.1 million USD on
May 15, 2012) and Baja (totaling $1.1 million USD), representing the amounts that would have been received by Kali Tuna and Baja
in their respective functional currencies had the accounts receivable been paid on their respective due dates. On June 27, 2012,
the agreement was amended whereby Atlantis and Atlantis Japan agreed to pay Kali Tuna as the secured party for all remaining amounts
owed by Atlantis Japan under its purchase agreements with Kali Tuna (totaling JPY 1.3 billion or approximately $16.4 million USD
on June 27, 2012).



The net amount due to the Company at June 30, 2012 of $17.3
million shown on the consolidated balance sheet represents the amount due to Kali in Japanese Yen converted into USD at the prevailing
exchange rates on June 30, 2012 and the amount due to Baja in USD. The total amount due from Atlantis at June 30, 2012 discussed
above ($18.2 million) represents the agreed upon amount due to the Company at the prevailing exchange rates on May 15, 2012 (the
date of the agreement with Atlantis discussed above). To provide security for this total amount due to the Company, Atlantis has
secured these obligations with 8.0 million of its shares in the Company. As Atlantis has not paid the net amount due by July 31,
2012, we have the right to liquidate enough of the 8.0 million shares of collateral to settle the total amount due to Kali Tuna
and Baja and return any excess shares to Atlantis. In the event the proceeds from liquidation of all 8.0 million shares is insufficient
to settle the total amount due to Kali Tuna and Baja, Atlantis would remain obligated to pay the remaining amount.



Sales of Bluefin Tuna



In the year ended June 30, 2012, Atlantis Japan and other Atlantis
subsidiaries purchased a total of $29.4 million of Bluefin Tuna from our operations, compared to $40.9 million in the year ended
June 30, 2011. Of the total amount purchased, $17.3 million remained outstanding and is past due at June 30, 2012. See further
discussion regarding this outstanding amount at "— Financing Transactions" above.



Sales Agency Agreement



In October 2011, we entered into a sales agency agreement with
Atlantis Japan, giving Atlantis Japan exclusive rights to sell our Bluefin Tuna in Japan. Under the agreement, we paid Atlantis
Japan a 2.0% sales commission for all sales it made on our behalf to non-related parties sales up to 4.0 billion Japanese Yen (approximately
$52 million), and 1.0% for all sales above that amount. Commissions under the agreement were payable quarterly. The agreement was
retroactive to July 1, 2011 and was terminated effective March 31, 2012. Commission expense for the year ended June 30, 2012 was
$1.2 million compared to $1.0 million for the year ended June 30, 2011.



Other



We reimburse Atlantis for certain services provided to us, as
well as out of pocket expenses paid on our behalf. For the year ended June 30, 2012, $0.2 million was billed for services and reimbursements,
compared to $0.7 million for the year ended June 30, 2011.





54







From time to time, Atlantis, Aurora and Oli Steindorsson, our
Chairman, President and Chief Executive Officer, have provided loan guarantees and other credit support through their banking
relationships and Atlantis has pledged its shares in Umami as collateral for certain financing transactions with private party
lenders. Since fiscal year 2008, Atlantis, Aurora and Mr. Steindorsson have provided guaranties in connection with our debt facilities.
In the years ended June 30, 2012 and 2011, Atlantis, Aurora and Mr. Steindorsson continued to provide other loan guarantees or
other credit support for our benefit. A description of which credit agreements include guaranties by these parties are as follows
(monetary units in thousands:



|Guarantor(s)                      | Lender                           | Borrowing Party | Facility             | Interest Rate                                  | June 30, 2012 | June 30, 2011 | Largest Aggregate Amount of Principal Outstanding During the Two Years Ended June 30, 2012 and 2011 | Guarantee/Collateral
|--------------------------------- | -------------------------------- | --------------- | -------------------- | ---------------------------------------------- | ------------- | ------------- | --------------------------------------------------------------------------------------------------- | --------------------
|Atlantis                          | Erste&Steiermaerkische bank d.d. | Kali Tuna       | HRK 29,240           | 4.4% floating *                                | $             | 4,826         |                                                                                                     | $                   
|Atlantis                          | Erste&Steiermaerkische bank d.d. | Kali Tuna       | HRK 30,000           | 4.4% floating *                                | 4,952         |               | 5,856                                                                                               |                     
|Atlantis                          | Erste&Steiermaerkische bank d.d. | Kali Tuna       | EUR 1,375            | 3M EURIBOR + 7%                                | —             |               | —                                                                                                   |                     
|Atlantis                          | Erste&Steiermaerkische bank d.d. | Kali Tuna       | JPY 180,000          | 3M JPY LIBOR+6.5%                              | —             |               | 2,219                                                                                               |                     
|Atlantis                          | Erste&Steiermaerkische bank d.d. | Kali Tuna       | HRK 80,000           | 40% at HBOR 2.8% + 60% at 3%+floating T-Bill   | 13,205        |               | —                                                                                                   |                     
|Atlantis, Aurora, O. Steindorsson | Amerra Capital Management, LLC   | Umami           | USD 30,000           | 9%+1YR LIBOR + 11.75% 1YR LIBOR                | 13,315        |               | —                                                                                                   |                     
|Atlantis                          | Private Investors                | Umami           | USD 2,750            | 6% for first 30 days, 9% for remainder of term | —             |               | —                                                                                                   |                     
|Atlantis                          | Private Investors                | Umami           | USD 3,500            | 4.5%                                           | —             |               | —                                                                                                   |                     
|Aurora                            | Private Investors                | Umami           | USD 500              | Nil                                            | —             |               | —                                                                                                   |                     
|Atlantis                          | Private investors                | Umami           | USD 2,000/ USD 5,624 | Nil                                            | —             |               | 2,000                                                                                               |                     



* Interest rate as of June 30, 2012
or latest practicable date prior to repayment, if paid in full prior to June 30, 2012.



Related party amounts included in our balance
sheet and income statement are as follows (monetary units in thousands):



|Balance Sheet                                     |  | June 30, 2012 |        |  | June 30, 2011 |  
|------------------------------------------------- |  | ------------- | ------ |  | ------------- | -
|Trade accounts receivable, related parties        |  | $             | 17,261 |  |               | $
|                                                  |  |               |        |  |               |  
|Accounts payable, related parties                 |  | $             | —      |  |               | $
|                                                  |  |               |        |  |               |  
|Notes payable, related parties                    |  |               |        |  |               |  
|Due to Atlantis - principal                       |  | $             | —      |  |               | $
|Due to Aurora - principal                         |  |               | —      |  |               |  
|Accrued related party interest, expenses and fees |  |               | —      |  |               |  
|Total notes payable, related parties              |  |               | —      |  |               |  
|Included in current portion                       |  |               | —      |  |               |  
|Long-term portion                                 |  | $             | —      |  |               | $





55







|                                                                                                             |  | Year ended June 30, |       
|------------------------------------------------------------------------------------------------------------ |  | ------------------- | ------
|Income Statement                                                                                             |  |                     |       
|                                                                                                             |  | 2012                |       
|Sales to Atlantis and subsidiary - included in net revenue                                                   |  | $                   | 29,390
|Reimbursement of costs - included in selling, general and administrative expenses                            |  |                     | 157   
|Commission expense - included in selling, general and administrative expenses                                |  |                     | 1,188 
|                                                                                                             |  |                     |       
|Interest expense (including amortization of original issue discounts, deferred financing costs and warrants) |  |                     | 840   



DIRECTOR INDEPENDENCE



Our Board of Directors, upon the recommendation
of the Corporate Governance and Nominating Committee, has affirmatively determined that Messrs. Dunn, Takenaka and White are independent
directors within the meaning of NASDAQ Marketplace Rule 5605(a)(2). Mr. Steindorsson does not meet the independence requirements
under NASDAQ Marketplace Rule 5605(a)(2) because he is our President and Chief Executive Officer. Mr. Gault does not meet the independence
requirements under NASDAQ Marketplace Rule 5605(a)(2) because he is a director of Atlantis Group hf, our majority shareholder and
a significant source of liquidity for our operations.



Item 15. Exhibits and Financial Statement Schedules



(a) The following documents are filed as
part of this report:



| | 3. | Exhibits:
| | -- | ---------



The exhibits listed in the exhibit index
of the Original Filing, the First Amendment, the Second Amendment and the exhibits listed in the exhibit index of this Amendment
No. 3 to the Annual Report on Form 10-K are filed with, or incorporated by reference in, this report.





56







SIGNATURES



Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Amendment No. 3 to the Annual
Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on the 5th day of July, 2013.





| | UMAMI SUSTAINABLE SEAFOOD INC. | 
| | ------------------------------ | 
| |                                | 
| | By:	/s/ Tim Fitzpatrick        | 
| | Tim Fitzpatrick                | 
| | Chief Financial Officer        | 
| | (Principal Financial Officer)  | 













EXHIBIT INDEX



The following exhibits are included, or
incorporated by reference, in this Amendment No. 3 to the Annual Report on Form 10-K(and are
numbered in accordance with Item 601 of Regulations S-K). Pursuant to Item 601(a)(2) of Regulation S-K, this exhibit index immediately
precedes the exhibits.



|Exhibit
        Number |  | Description                                                                                                                                                                                       
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                       | 
|                       | 
|31.7*                  |  | Certificate of Chief Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated May 28, 2013.
|                       | 



* Filed herewith.