UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-K




(Mark
One)


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


For the fiscal year ended
June 30,
2010


OR


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





Commission File Number
000-52401





Umami
Sustainable Seafood Inc.


(Exact
name of registrant as specified in its charter)





Nevada
              98-06360182(State
      or Other Jurisdiction
              (I.R.S.
      Employerof
      Incorporation)
              Identification
      Number)




405
Lexington Avenue


26th Floor, Suite
2640


New
York, NY 10174


(Address
of principal executive offices) (zip code)





212-907-6492


(Registrant’s
telephone number, including area code)




Lions Gate Lighting
Corp.


(Former
name or former address, if changed since last report)





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





Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes  ̈  No x





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 the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x   No
 ̈





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 during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files). Yes  ̈  No  ̈





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
regulation S-K is not contained herein, and will not be contained, to the best
of registrant 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. (Check One):





Large accelerated file   ̈
                  Accelerated filer  o
                  Non-accelerated filer  ̈
                  Smaller reporting company  x




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





Approximate
aggregate market value of the registrant’s common stock held by non-affiliates
as of December 31, 2009: N/A





The
number of shares of common stock outstanding as of October 20, 2010 was
47,745,400.





FORWARD LOOKING STATEMENTS





Some of
the statements contained in this Form 10-K that are not historical facts are
“forward-looking statements” which can be identified by the use of terminology
such as “estimates,” “projects,” “plans,” “believes,” “expects,” “anticipates,”
“intends,” or the negative or other variations, or by discussions of strategy
that involve risks and uncertainties.  We urge you to be cautious of
the forward-looking statements, in that such statements, which are contained in
this Form 10-K, reflect our current beliefs with respect to future events and
involve known and unknown risks, uncertainties, and other factors affecting our
operations, market growth, services, products, and licenses.  No
assurances can be given regarding the achievement of future results, as actual
results may differ materially as a result of the risks we face, and actual
events may differ from the assumptions underlying the statements that have been
made regarding anticipated events.  Such statements reflect our
current view with respect to future events and are subject to risks,
uncertainties, assumptions and other factors (including the risks contained in
the section of this report entitled “Risk Factors”) relating to our industry,
operations and results of operations and any businesses that we may acquire, and
include, without limitation:





1. Our
ability to attract and retain management, and to integrate and maintain
technical information and management information systems;





2. Our
ability to generate customer demand for our products;





3. The
intensity of competition; and





4.
General economic conditions.





Should
one or more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may differ significantly
from those anticipated, believed, estimated, expected, intended or
planned.





All
forward-looking statements made in connection with this Form 10-K that are
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by these cautionary statements.  Although we believe
that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Except as required by applicable law, including the securities
laws of the United States, we do not intend to update any of the forward-looking
statements to conform these statements to actual results. Given the
uncertainties that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.





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.





Unless
otherwise indicated or the context otherwise requires, all references below in
this current report on Form 10-K to “we”, “us”, “our”, and “the Company”, refer
to Umami Sustainable Seafood Inc., a Nevada corporation, and its wholly-owned
subsidiaries, Bluefin Acquisition Group Inc. and Kali Tuna d.o.o.





Item
1. BUSINESS





Company
Overview





Umami
Sustainable Seafood Inc. (Umami or the Company), formerly named Lions Gate
Lighting Corp. (Lions Gate) was formed by a team of individuals within the
Bluefin Tuna Industry who have been working on ensuring the long term
sustainability of Bluefin Tuna.  The Company is one of the global
leaders in the Northern and Pacific Bluefin Tuna industry with growth founded on
sustainable management of resources and economically sound
practices.  Our strategy is based on consolidation within the sector
to leverage scientific process and research knowledge through economies of
scale.  While the company’s current core business is focused on
on-growing Bluefin Tuna, the company is actively working on creating a
self-sustaining farm environment where the tuna spawn, the eggs are hatched and
grown to full size.





Umami’s
operations are comprised of Kali Tuna d.o.o. ( Kali Tuna), a wholly-owned
subsidiary located in Croatia and, in July 2010, the Company acquired a 33%
interest, and an option to acquire the remaining 67% interest,
in  Baja Aqua Farms S.A. de C.V (Baja) located in
Mexico.  In September 2010, the Company exercised its option to
purchase the remaining 67% with the closing expected to occur in the quarter
ending December 31, 2010.


1


Corporate
Background





Lions
Gate was incorporated on May 2, 2005 in the state of Nevada. From August 31,
2007 until June 30, 2010 we were a shell company.  On June 30, 2010 we
completed the reverse merger described below.





In 2005,
Kali Tuna, a limited liability company organized under the laws of the Republic
of Croatia, was acquired by Atlantis Group hf (Atlantis), an Iceland based
holding company with its key market in Japan, that seeks to produce, market and
distribute sustainable seafood, with a focus on aquaculture.  In March
2010, Atlantis created Bluefin Acquisition Group Inc. (Bluefin), a New York
based holding company and wholly owned subsidiary of Atlantis, for the purpose
of holding the shares of Kali Tuna. On May 3, 2010, Lions Gate entered into a
share exchange agreement, to be effective upon the initial funding of the
private placement discussed below, among Lions Gate, Kali Tuna, Bluefin and
Atlantis, pursuant to which Lions Gate purchased from Atlantis all of the issued
and outstanding shares of Bluefin in consideration for the issuance to Atlantis
of 30,000,000 share of Lions Gate common stock (the “Share Exchange”) resulting
in a change of control of Lions Gate. As a result, effective June 30, 2010, Kali
Tuna became an indirect wholly owned subsidiary of the Company.





In
addition, on June 30, 2010 we completed the initial funding of a private
placement financing pursuant to which we issued 7.3 million units at a price of
$1.00 per unit for gross proceeds of$7.3 million. In July and August 2010 we
completed the final funding of this private placement pursuant to which we
issued 1.4 million additional units at a price of $1.00 per unit for additional
gross proceeds of $1.4 million.  Each unit consisted of one share of
our common stock and a five-year warrant to purchase 0.2 shares of our common
stock at $2.00 per whole share. In connection with the private placement the
Company paid $0.1 million cash and issued 575,400 shares of common stock and
872,000 five-year warrants to purchase common stock at $2.00 per whole share to
placement agents.  Following the completion of the Share Exchange and
the financing, an aggregate of 46,745,400 shares were issued and
outstanding.





On August
20, 2010 we changed our name to Umami Sustainable Seafood Inc. The stock symbol
on the OTC Bulletin Board was changed to UMAM on the same date.





Baja
Aqua Farms and Oceanic





On July
20, 2010, Umami entered into a Stock Purchase Agreement with Corposa, S.A. de
C.V. (“Corposa”), Holshyrna ehf, (“Holshyrna”) and certain other parties,
providing for the sale from Corposa and Holshyrna of 33% of the equity of Baja
Aqua Farms, S.A. de C.V., a Mexican corporation (“Baja”) and its affiliate
Oceanic Enterprises, Inc., a California corporation (“Oceanic”). Baja and
Oceanic are collectively referred to as the “Baja Operation”.





Under the
terms of the transaction, cash totaling $8.0 million was paid to acquire 33% of
the Baja Operation.  The transaction was structured as a
recapitalization of Baja as required under Mexican law.  The Company
received newly issued shares from Baja while at the same time Corposa and
Holshyrna returned shares to the Company for cancellation of a portion of their
shares.  The Company also received shares representing 33% of the
outstanding shares of Oceanic.





Under the
terms of an Option Agreement of even date therewith (the “Option Agreement”, and
together with the Purchase Agreement, the “Agreements”), the Company also
acquired the option (the “Option”), exercisable by September 15, 2010, to
purchase all remaining Baja shares in consideration for the issuance of a)
10,000,000 restricted shares of common stock of the Company and b) the payment
in cash of $10.0 million.   On September 15, 2010, the Company
exercised the Option and on September 27, 2010, the parties to the Agreements
entered into amendments (the “Amendments”) to each of the Agreements, as
follows:





·
            The
      Company will permit Baja to distribute an additional $2 million capital to
      certain of its shareholders (the “Shareholder
  Payments”).





·
            The
      Company will cause Baja to pay amounts owed to Corposa and Holshyrna by
      November 30, 2010 which were borrowed by Baja in order to meet its working
      capital needs.  On September 27, 2010 such amounts were
      approximately $10.0 million (the “Amounts Owed to
      Shareholders”).





·
            The
      Company will fund any deficit in cash flow required to continue to operate
      Baja.





·
            Capital
      required in excess of amounts generated will be funded by Umami as loans
      to Baja (the “Umami Loans”).





·
            The
      closing date for the Option payment (the $10 million in cash and the 10
      million shares) was extended to November 30,
  2010.


2


·
            The
      Company will be allowed to use proceeds from sales of Baja’s inventory and
      amounts financed using Baja’s assets as collateral for loans to fund the
      Shareholder Payments, the Amounts Owed to Shareholders and Baja’s
      operating expenses as well as the amount required for the final cash
      option payment.





·
            In
      the event closing does not occur, Umami will remain a 33% shareholder in
      Baja.  Any Umami Loans remaining shall remain a debt of Baja due
      to Umami and repaid through future operating cash flow of
      Baja.





Kali
Tuna d.o.o





Kali Tuna
owns and operates facilities and equipment in Croatia where it farms Northern
(Atlantic) Bluefin Tuna for sale into the sushi and sashimi
market.  We believe that Kali Tuna is considered one of the most
respected and trusted suppliers of premium sushi and sashimi grade tuna in
Japan. Most of the company’s products are sold into Japanese trading houses for
distribution to the high end market in Japan.





Kali Tuna
was organized in 1996 under the laws of the Republic of Croatia by individuals
who had gained considerable experience in the area of tuna fishing, farming and
trading in Southern Australia for approximately 30 years before moving their
operations to Croatia.





Kali
Tuna’s activities consist of: (a) tuna farming and processing, (b) sales and
exports of tuna products, and (c) storage and processing of fish feed for its
tuna farming operations.  Through an affiliated entity MB Lubin, it
also operates a fleet of seven fishing vessels that typically catch Northern
Bluefin Tuna and small pelagic fish used for tuna feed in the Adriatic and
transports the live tuna back to its farming sites off the Croatian coast for
further growing.





On March
3, 2009, Atlantis entered into an agreement with Daito Gyouri of Japan (the
“Daito Agreement”) for the sale and delivery of at least 500 metric tons of
frozen Northern Bluefin Tuna on an annual basis.  On June 30, 2010,
Umami entered into a sales agency agreement with Atlantis.  Under the
terms of the agreement, Atlantis was granted the exclusive right to sell, on
Kali Tuna’s behalf, all of Kali Tuna’s Northern Bluefin Tuna products into the
Japanese market.  As a result of the sales agency agreement, it is
contemplated that tuna to be delivered under the Daito Agreement by Atlantis
will be filled by fish that are farmed by Kali Tuna.  Umami has agreed
to pay Atlantis an agency commission of 2% on all sales to be made under this
agency agreement.  We believe that we have significant competitive
advantage as a result of Atlantis’ solid ties in the Japanese fish market which
are built on strong personal relationships.





Baja
Aqua Farms S.A. de C.V





As
described above, Umami has purchased 33% of the outstanding shares of Baja with
an option to purchase the remaining 67%.  The completion of that
purchase is expected to occur in the quarter ending December 31,
2010.  Baja owns and operates facilities and equipment in Mexico where
it farms Pacific Northern Bluefin Tuna for sale primarily into the Japanese
sushi and sashimi market.





Baja was
organized in 1999 under the laws of the Republic of Mexico by individuals who
were involved in the tuna feed industry in Southern Australia for many years
before starting their operations in Mexico. Baja is the largest tuna farming
operation in Mexico and has been fishing and farming Bluefin Tuna since
2000.





Baja’s
activities consist of: (a) tuna farming and processing, (b) sales and exports of
tuna products, and (c) processing of fish feed for its tuna farming
operations.  Baja leases a fleet of purse seiners and tow boats during
the fishing season to catch the Pacific Bluefin Tuna and transport them live
back to its farming sites located off the Baja California, Mexico coast for
further growing. Through an affiliated entity, it operates a fleet of fishing
vessels that typically fish for small pelagic fish used for tuna
feed.  Baja sells its fish through various Japanese importers
primarily into the Japanese sushi and sashimi market.





Industry
Overview





Aquaculture
Industry





Aquaculture
is thefarming of
aquatic organisms including fish, mollusks, crustaceans and aquatic plants.
Farming implies some form of intervention in the rearing process to enhance
production, such as regular stocking, feeding, protection from predators, etc.
Farming also implies individual or corporate ownership of the stock being
cultivated. Aquaculture productionspecifically refers to
output from aquaculture activities, which are designated for final harvest for
consumption.


3


Aquaculture
is the world’s fastest growing segment in the food production system and has
been for the past two decades.  According to a recent study by the
Food and Agriculture Organization of the United Nations (the “FAO”) published on
March 2, 2009, world fisheries production reached a high of 143.6 million metric
tons in 2006.  The contribution of aquaculture to the world fisheries
production in 2006 was 51.7 million metric tons of fish, which is 36% of world
fisheries production, up from 3.6% in 1970.  Global aquaculture
accounted for 6% of the fish available for human consumption in
1970.  In 2006, global aquaculture accounted for 47% of the fish
available for human consumption according to the FAO.  The FAO report
also describes that over half of the global aquaculture in 2006 was freshwater
fin-fish.  Based on the FAO’s projections, it is estimated that in
order to maintain the current level of per capita consumption, global
aquaculture production will need to reach in excess of 80 million metric tons of
fish by 2050.





According
to the FAO, per capita supply from aquaculture increased from 0.7 kg in 1970 to
7.8 kg in 2006, an average annual growth rate of 6.9%. It is set to overtake
capture fisheries as a source of food fish. From a production of less than 1
million metric tons per year in the early 1950s, production in 2006 was reported
to be 51.7 million metric tons with a value of $78.8 billion, representing an
annual growth rate of nearly 7%.





A good
aquaculture site is made up of many factors, with the key ones being location,
weather, water temperature, currents and predator risk.  As the
availability of sites for aquaculture is becoming increasingly limited due to
licensing and environmental factors and the ability to develop non-agricultural
land is restricted, the competition to develop additional aquaculture production
systems is intensifying. As the intensification for aquaculture production
systems increases, the demand for institutional support, services and skilled
persons is anticipated to increase, along with the demand for more
knowledge-based aquaculture education and training as aquaculture becomes more
important worldwide.





Tuna
Industry





Tuna and
tuna-like species are of great economic importance and represent a significant
source of food. They include approximately forty species occurring in the
Atlantic, Indian and Pacific Oceans and in the Mediterranean Sea. Their global
production has increased from less than 0.6 million metric tons in 1950 to over
4 million metric tons in 2007 according to FAO1.











The
so-called principal market tuna species are the most economically important
among the tuna and tuna-like species.  They are landed in numerous
locations around the world, traded on a nearly global scale and also processed
and consumed in many locations worldwide. According to the FAO, in 2007, their
catch was approximately four million tons, which represents about 65% of the
total catch of all tuna and tuna-like species. Most catches of the principal
market tuna species are taken from the Pacific (69.0% of the total catch of
principal market tuna species in 2007), with the Indian Ocean contributing much
more (21.7% in 2007) than the Atlantic and the Mediterranean Sea (9.5% in
2007).





Bluefin
Tuna Trade





The
bluefin trade includes three species of tuna: the Pacific Bluefin, the Southern
Bluefin and the Atlantic or Northern Bluefin.  In 2007, the total
global bluefin trade was estimated to be in excess of $1 billion on a wholesale
basis.





The
Northern (Atlantic) Bluefin Tuna (Thunnus thynnus) is native to both the western
and eastern Atlantic Ocean, the Mediterranean and the Black Sea. It can live up
to 30 years and can reach weights of over 450 kilograms.  The Pacific
Bluefin Tuna (Thunnus orientalis) is native to both the western and eastern
Pacific Ocean.  It can live up to 25 years and weigh up to 200
kilograms.





The
following graph shows catches for each species of bluefin in metric tons per
year.


1FAO -
2007 catch data
http://www.fao.org/fishery/statistics/tuna-catches/en


4











Source:
Fish Info Network (http://www.eurofish.dk/dynamiskSub.php4?id=3416)
 
 As
concerns over depleting the natural stock of Bluefin Tuna have increased in
recent years, international organizations have increased regulation relating to
and imposed strict quotas on Bluefin Tuna catches. The main international body
that regulates fishing activities and trade in the Atlantic Bluefin is the
International Commission for the Conservation of Atlantic Tunas or
ICCAT.  It describes itself as an inter-governmental fishery
organization responsible for the conservation of tunas and tuna-like species in
the Atlantic Ocean and its adjacent seas.  Its primary tool in its
conservation efforts is its ability to impose quotas.  The
organization was established in 1966 and covers 30 species of tuna, including
the Northern (Atlantic) Bluefin Tuna.





In
November 2006, members of the ICCAT reached an agreement to reduce the Bluefin
tuna quota in the Mediterranean Sea from 32,000 metric tons in 2006 to 25,500
metric tons in 2010.  In November 2008, the ICCAT set the annual quota
at 22,000 metric tons, gradually reducing it to 18,500 tons by
2011.  Various groups, including environmental groups claimed that
this quota was too high and that 15,000 tons should have been set as an
appropriate level.  In October 2009 at an ICCAT meeting in Brazil it
was agreed to shorten the fishing period to one month and reduce the quotas to
13,500 metric tons annually.  The quota is now close to the figure
supported by the Company.





In 2008,
the ICCAT adopted measures which include a 15 year recovery plan for bluefin
tuna starting in 2007.  Among other things, the plan calls for 6-month
off-seasons for specific types of boats, bans the use of aircraft in spotting
tuna, forbids the capture of tuna under 30 kg except in certain specific
circumstances and areas, and requires extensive reporting of tuna
catches.  Furthermore, it only allows tuna to be offloaded at
designated ports and obliges countries to place observers on fishing boats to
monitor their adherence to regulations.





In March
2010, at a meeting of the Conference of the Parties to the Convention on
International Trade in Endangered Species of Wild Fauna and Flora, or CITES, in
Doha, Qatar, a proposal for a total ban on international trade in Atlantic
Bluefin was defeated by a wide majority of participants and it was decided to
continue to regulate fishing through the ICCAT organization.  As a
result, for the foreseeable future, fishing regulation regarding the species
should remain in the hands of ICCAT.


Japan has
traditionally been one of the largest consumers of tuna, especially Bluefin
tuna, which is used as a premium ingredient for sushi and
sashimi.  Umami’s products are
regarded by the Japanese as highly reputable and premium fish products as a
result of Atlantis’ solid ties in the Japanese fish market, which are built on
strong personal relationships.


5


Fish
Supply





Kali
Tuna





Kali Tuna
procures live Bluefin Tuna primarily through MB Lubin, a company controlled by
Kali Tuna.   MB Lubin owns and operates a fleet of seven
vessels.  They catch fish primarily off the coast of
Croatia.   Kali Tuna has also purchased live tuna from other
local and foreign based farms and suppliers including fishing companies
operating off the coast of Malta and Libya and other Mediterranean
locations.  The tuna is deposited into special towing cages that are
towed back to its three farming sites off the Croatian coast for transfer into
permanent holding cages.  Fishing takes place during the months of May
and June only as permitted by international regulations.  Transport of
the catch to Kali Tuna’s farms is a slow process that can take many weeks to
complete with speeds of the transport rarely exceeding one mile per hour to
maximize the survival rates of the live fish.





MB Lubin
sells its live fish to Kali Tuna under an exclusive arrangement in a supply
contract dated July 1, 2009.  Under the terms of the agreement, MB
Lubin has undertaken to sell all its Bluefin Tuna catches to Kali
Tuna.  Under the agreement, which has a term of 20 years, all
deliveries of tuna will be made at the market price prevailing at the time of
delivery.





In
addition, Kali Tuna has entered into an agreement with MB Lubin that provides
for the sale and delivery by MB Lubin of small fish that are used for feeding
the tuna.
 
 Since
Kali Tuna operates on a long-term farming cycle, the Company assumes that none
of its suppliers of live tuna or fish feed are critical to its
business.  However, if for any reason Kali Tuna would be unable to
procure fish from a particular supplier, this would likely lead to a temporary
interruption in the supply of fish, at least until Kali Tuna found another
entity that could provide it these services.





Baja





Baja
procures live Bluefin Tuna primarily through its own fishing efforts. Baja
leases fishing vessels (purse seiners) from  reputable companies in Mexico.
Baja catches fish primarily off the coast of Baja California, Mexico. The tuna
is deposited into special towing cages that are towed back to its two farming
sites off the Baja California coast for transfer into permanent holding
cages.  Fishing generally takes place during the months of May through
August.  Transport of the catch to its farms is a slow process that
can take many weeks to complete with speeds of the transport rarely exceeding
one mile per hour. This ensures that the Bluefin Tuna will arrive in the best
possible condition. Baja utilizes its own vessels to catch feed fish in addition
to purchasing feed from local suppliers and from suppliers in the
U.S.





Although
the Company does not believe that any of Baja’s suppliers of leased purse
seiners are critical to its business, if for any reason Baja would be unable to
procure vessels for lease from a particular supplier, this would likely lead to
a temporary interruption in the supply of fish at least until Baja found another
entity that could provide it these services.





Customers
and Marketing





Kali
Tuna





The
majority of Kali Tuna’s production is sold to two large Japanese importers who
account for more than 90% of its sales. On March 3, 2009 Atlantis entered into
the Daito Agreement for the sale and delivery of at least 500 metric tons of
frozen Northern Bluefin Tuna annually.  The management of Kali Tuna
believes that it will benefit from this arrangement and is confident that the
relationship with each of its customers is of a long term nature, whether or not
there is a written agreement.





On June
30, 2010, Umami entered into a sales agency agreement with
Atlantis.  Under the terms of the agreement, Atlantis was granted the
exclusive right to sell, on Kali Tuna’s behalf, all of its Northern Bluefin Tuna
products into the Japanese market.  As a result of the sales agency
agreement, it is contemplated that tuna to be delivered under the Daito
Agreement by Atlantis will be filled by fish that was farmed by Kali
Tuna.  Umami has agreed to pay Atlantis an agency commission of 2% on
all sales to be made under this agency agreement.





Harvesting
the tuna from the cages occurs typically during the months of November to March
when low water temperatures optimizes the quality of tuna meat.  When
selling frozen fish to a customer, the customer typically sends its own
specially equipped freezer vessels to pick up the product from the Kali Tuna
farming site for freezing and transport to Japan.  When selling fresh
fish to a customer, Kali Tuna ships the processed fish by overnight delivery to
the requested location.


6


Baja





Baja
sells it fish mainly through independent Japanese importers on agency commission
basis, which account for more than 90% of its sales. None of the importers
individually accounts for more than 45% of sales. These importers sell the fish
to all the levels of users in Japan – from wholesalers to sushi-chain
restaurants. The agency commissions which include Japanese import and logistic
costs are approximately 17% of all sales proceeds.





Harvesting
the tuna from the cages occurs typically during the months from September
through March when low water temperatures optimizes the quality of tuna
meat.  Traditionally Baja has not focused on selling frozen
fish.  Frozen sales in the future would either be through land based
containers or specially equipped freezer vessels.  When selling fresh
fish, Baja will ship the processed fish by overnight delivery to the requested
location.
 
 Research
and Development





Kali
Tuna





Kali Tuna
conducts research and development in two specific areas:


1.
              Kali
      Tuna researches the feeding habits of the Bluefin Tuna for the purpose of
      determining the optimal way of feeding the fish at its
      sites.  Improving the so-called Food Conversion Ratio or FCR,
      which represents the number of kilograms of feed needed to produce one
      kilogram of fish, facilitates achieving maximum feeding efficiencies and
      cost savings.
 
 2.
              Kali
      Tuna has also been conducting research and testing in the area of spawning
      the Bluefin Tuna in captivity with the objective of closing the full
      circle farming process, i.e. farming Bluefin Tuna that is born and raised
      in captivity.  The company has managed to hatch eggs for 2
      consecutive years in a laboratory environment.  Kali Tuna is in
      the final stages of preparing a hatchery for use during the next spawning
      season to allow it to advance its
research.


If we
succeed in our quest to create a closed life cycle in the Bluefin Tuna farming
process, the Company would become less dependent on the capture of wild
tuna.  We believe we would then be uniquely positioned to address the
expected shortage in the supply of tuna, especially as it relates to the
Japanese market. Our expenditures to date on this research and development have
been minimal but are expected to increase beginning in July,
2010.


Our
Principal Competitive Strengths


We
believe that we have the following competitive strengths:
 
 We have the most seasoned operations
in our geographic areas.  Kali Tuna was the first commercial
tuna farm in the Mediterranean and Adriatic areas.  The farm was built
by people who had previously been leaders in the tuna farming business in Port
Lincoln, Australia.  All farm operations were set up according to the
high standards used in Australia.  Most of the key crew members have
been with Kali Tuna from inception. Likewise, Baja was one of the early
commercial tuna farms in the Baja California area and is the largest in Mexico.
Baja was also founded by people who had previously been providers of feed and
buyers in the tuna farming business in Australia. Many of the key crew members
have been with Baja from inception.
 
 We have strong personal
relationships within our target market.  Following the
acquisition of Kali Tuna by Atlantis Group in 2005, Kali Tuna was able to
enhance its already considerable reputation in the Japanese fish market as a
result of strong personal relationships between Atlantis executives and Japanese
market leaders.  Japanese business is generally built on personal
trust, extensive knowledge regarding product quality assurance and a high level
of expertise.  Oli Steindorsson, Umami’s and
Atlantis’  Chairman, CEO and President, is fluent in Japanese and has
spent extended periods of time residing in that country.  This has
allowed Kali Tuna to capitalize on his experience, together with the team at
Atlantis’ Japanese subsidiary, and further solidify Kali Tuna’s position as a
trusted source of high quality fish products. Umami believes that Baja will be
able to utilize these strong Japanese relationships to optimize the sale price
achieved.
 
 We have a unique farming
cycle.  Following the catch of fish, they are transferred into
cages where they are fed and nurtured for up to three and one-half
years.  As a result, our output is less impacted by quota reductions
and each wild caught fish (between 10-120 kilograms) can be leveraged by a
factor of up to 10 times given livestock gains over the period.  Most
of our competitors have shorter farming cycles (up to six months) or they
practice “catch and kill”.


7


Full traceability.We also
have full traceability on each of the Tuna caught and the tuna feed, which means
that every batch of Tuna and feed brought in may be tracked from the area where
it was caught, when it was caught, to the boat catching it and to any other
intermediaries until its delivery to the farm sites.
 
 We operate in unique farming
environments.   There are no predators, such as sea
otters, sea lions or sharks, in Adriatic waters that might attack the fish in
captivity.  In the Pacific, where there are natural predators we build
the cages to keep the predators out.  The waters where the farming
sites are located are pristine with no cases of red or blue tide caused by the
damaging build-up of algae.  There is no industrial production nearby
either area and in both places there is exceptionally clean water. With the
islands surrounding the farm sites, we are sheltered naturally against
storms.  In addition, the salt and oxygen levels and the water
temperature offer a good combination of conditions for sustainable growth of our
tuna.
 
 We have an experienced and
knowledgeable workforce and a very low employee turnover at each of the
operations. A number of our employees have been working for
us for more than 10 years.  Kali Tuna employees have regularly been
requested to assist in external operations worldwide as far as Australia and
Mexico.  All of the management in Croatia is fluent in English while a
number of our key marketing people have multilingual skills that include
Japanese. All of the management in Mexico is fluent in English.
 
 We have reached major breakthroughs
in our research and development efforts to close the full circle farming
process. If our success in spawning and hatching in captivity at Kali
Tuna can be commercially implemented, we will become less dependent on wild
catches of tuna for both subsidiaries.
 
 We possess valuable government
farming permits and concessions at both locations. Kali Tuna has farming
concession permits for up to 3,250 metric tons from the government of Croatia.
Baja has farming concession permits for up to 4,000 metric tons from the
government of Mexico.
 
 Our
Growth Strategies





International
concerns have been mainly focused on over-catching and poaching of various tuna
species, primarily concentrating on the Bluefin Tuna’s stock situation in the
Mediterranean Sea.





In
response, ICCAT has been taking measures to regulate the catching of the
Atlantic-Mediterranean territory covering the migration of Northern Bluefin Tuna
and looking at its “colleague organization”, the Commission for the Conservation
of Southern Bluefin Tuna or CCSBT, and its measures taken to promote the
conservation of Southern Bluefin Tuna in the southern hemisphere  In
addition, preliminary discussions are under way between governments concerning
further measures to preserve the stock of  the Pacific
Bluefin.





We
endorse the efforts of these organizations and believe that it is critical to
create world-wide industry leadership that will regulate the fishing for all
species.  Otherwise, short-term profit considerations could result in
a failure to act and conserve and lead to extinction of, among others, the
Bluefin Tuna, and thus the demise of our industry.  We believe that we
have an important role to play in the adoption of rules aimed at ensuring the
long-term survival of the Bluefin Tuna, creating a sustainability model that can
be applied to other fish species as well.  We further believe that we
can be active in this area while generating profits for our shareholders, as
reducing the supply of bluefin tuna will increase its price.


We
believe that the following will be some of the critical elements in fulfilling
our strategy to become the world leader in the Bluefin Tuna trade:


·
              Build up enough livestock to
      create carry-over inventories.Our objective has been to
      lengthen the farming cycle.  This is expected to result in the
      greatest weight growth and an increase in the price paid per kilogram of
      fish by our buyers (the bigger the fish, the better the price per
      kilogram).  In addition, it will mitigate the effects of
      short-term fluctuations in catching due to weather or other abnormal
      situations that may occur. Live stock inventories biomass increased from
      1,315 metric tons at June 30, 2009 to 1,719 metric tons at June 30,
      2010.





·
              Strategic
      investments.We will seek to acquire stakes in tuna
      farming and fisherieswith farming
      and/or fishing licenses in selected areas in countries with successful
      Bluefin Tuna farming history that will synergize with our existing
      operations.  We have already identified a number of additional
      targets.





·
              Cooperate closely with
      regulators.Based on scientific advice, we intend to
      assist regulators in formulating regulatory proposals aimed at the
      conservation of the Bluefin Tuna.  We might also lobby for
      distribution of individual transferable quotas, or ITQs, and monitoring
      systems based on the experiences of leading countries in the seafood
      industry that have historically had to rely on sustainable usage of their
      fishery by strictly regulating and controlling the volume of
      catching.


8


·
              Consolidating and upgrading of
      the fleet. We intend to reduce the existing catching
      capacity to fewer and more efficient vessels as the quota system
      develops.  One of the important factors in sustainable fisheries
      management is to avoid overcapacity of fleet, which is caused by
      underdevelopment in regulatory environments, for example with Olympic
      catch systems (first in gets the fish), versus the highly controlled ITQ
      system.  We believe that a key part of sustainable resource
      management is to ensure that the harvesting of resources is done in the
      most efficient and economic way while at the same time, maximizing the
      value and quality of each
fish.





·
              Increase our research and
      development.We intend to increase our efforts on
      closing the Northern Bluefin Tuna cycle in cooperation with leading
      research institutes in this field (i.e. intense farming) as well as
      enhancing feeding techniques to continue our efforts to minimize the food
      conversion ratio (FCR) of Tuna. We also intend to establish and fund a
      research center in Kali, Croatia to focus on these
  issues.





·
              Upgrade and invest in feed
      procurement.We intend to achieve greatercost efficiency in
      feed procurement by focusing on our catching and logistic
      activities.  We expect this to result in greater profitability,
      especially in light of our efforts to lengthen the farming
      cycle.





We expect
that these factors will enhance sustainability and traceability of the final
products that we are offering to the market.  These actions will also
help prevent a collapse in the natural fish stocks and ensure food security for
one of the most popular sashimi grade products of the world.





Sustainable
Farming





The
concept of sustainable development has been popularized by the 1987 World
Commission on Environment and Development.  It defined “sustainable
development” as meeting the needs of the present generation, without
compromising the needs of future generations.  The idea of
sustainability has caught up with aquaculture partly because of pressure from
environmental groups.  In 1998, the Holmenkollen Guidelines for
Sustainable Aquaculture were formulated.  These guidelines
recommended, among other things, that new technologies and management procedures
should be utilized so that the quality and quantity of aquaculture products is
improved and the risk of adverse effects on the environment and on the
livelihood of other people, including future generations, is
reduced.  The guidelines also recommended:


(1)
              strict
      compliance with the internationally agreed food safety, environmental
      safety and ethical criteria if genetically modified organisms or hormones
      are utilized in the production, as well
as;
 (2)
              giving
      priority to the development of integrated fish farming and of sources for
      animal feed other than fish protein and fish
  lipid.





We fully
endorse the idea of sustainable farming.  Our scientists have achieved
some encouraging results in the area of breeding tuna in
captivity.  We are committed to continuing this research project with
the ultimate goal of 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 work closely with the local fisheries for  both
operations.


Competition


In
general, the aquaculture industry is intensely competitive and highly
fragmented.  We compete with various companies, many of which are
developing or can be expected to develop products similar to ours in the
future.  However, we believe that the competition from such producers
is minimal because, to the best of our knowledge, there are no competitors in
Croatia or other places in the Mediterranean that have a similar operating
scale, production capacity, available live-stock, brand recognition, long
history and as much market representation as Kali Tuna has. Likewise, to the
best of our knowledge, there are no competitors in Mexico that have a similar
operating scale, production capacity, available live-stock, brand recognition,
long history and as much market representation as Baja has.  On a
total basis, we believe that the Kali Tuna and Baja operations have more than
20% of the world production of long-term farmed Bluefin Tuna which makes it
difficult for others to compete on a similar scale.
 
 We are
aware of competitors in the Adriatic and Mediterranean that produce Bluefin
Tuna, including Fuentes e Hijos (Spain), Aquadem (Turkey), Azzopardi (Malta),
Sagun (Turkey) and Balfego (Spain).  However, Kali Tuna is the largest
single operation in the area.  We are aware of competitors in the
Mexican region that produce Bluefin Tuna including Maricultura del Norte
(Mexico). Umami, through Atlantis, has very strong relationships with Japanese
purchasers which will be highly beneficial now and in the future. We produce a
premium product “toro” tuna which is a high fat content belly tuna commanding
the highest prices at auctions in Tokyo.   We will continue
building on a consistently spotless record, over 14 years for Kali Tuna and 9
years for Baja, in the market in maintaining quality and traceability of
products. We also enjoy close ties with regulators responsible for Bluefin quota
implementation and have developed a viable business plan for long term growth
against a background of declining quota worldwide.


9


Some of
our foreign competitors may be – in certain parts of their business - more
established and may have significantly greater financial, technical, marketing
and other resources than we presently possess.  Some of our
competitors may have a larger customer base.  These competitors may be
able to respond more quickly to new or changing opportunities and customer
requirements, and may be able to undertake more extensive promotional
activities, offer more attractive terms to customers, and adopt more aggressive
pricing policies.





With
respect to potential new competitors, although there are no formal barriers to
entry for engaging in similar aquaculture processing production and activities
in Croatia and Mexico, we believe that it will be very difficult and costly to
start an operation comparable to ours.  The principal barriers to
entry are the shortage of available sites for farms in the local Croatian waters
and the lack of new permits and concessions for farming in Mexico.  As
a result, concessions for such sites are almost impossible to
obtain.  In addition, our labor force is highly specialized and
individuals with the requisite expertise who could manage this type of business
are in short supply.  Finally, to build a consistent farming cycle of
two or three years, as we have already achieved, is highly capital intensive,
time consuming and can only be done with high expertise, experience and
research.





Regulation





We are
subject to international quotas and to various national, provincial and local
environmental protection laws and regulations, as well as certifications and
inspections relating to the quality control of their
production.





Internationally,
ICCAT regulates Atlantic Bluefin Tuna quotas that are allocated to and enforced
by individual countries, including Croatia.





Our
farming sites are operated under concessions granted by the national
authorities.  These concessions are of a long-term temporary nature
and are subject to renewal from time to time.  Currently, Kali Tuna
operates three sites with a total capacity of 3,240 metric
tons.   The concessions in Mexico are not based upon a total mass
of tuna at any point in time, but instead on limits of the input of new
fish.  The four concessions owned by Baja allow input of an additional
2,400 metric tons per annum.  Two of these concessions expire in 2015
and the remaining two in 2020.  All four of these concessions are
renewable through the department of fisheries in Mexico.





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.





We
believe that Kali Tuna and Baja, as well as our suppliers are currently in
compliance with all material aspects of these quota and licensing
requirements.





Staff





As of
June 30, 2010, Kali Tuna had 88 full-time employees and Lubin had 51 full-time
employees.   Baja had 75 full-time staff who were employed by an
independent labor contractor. None of our staff is represented by a labor union,
and both Kali Tuna and Baja consider their staff relations to be
excellent.


10


Item
1A. RISK FACTORS





An
investor should carefully consider the risks described below, as well as other
information contained in this Annual Report on Form 10-K and in our other
filings with the Securities and Exchange Commission. Additional risk not
presently known to us or that we currently deem immaterial may also adversely
affect our business.  If any of these events or circumstances occurs,
our business, financial condition, results of operations or prospects could be
materially harmed.  In that case, the value of our securities could
decline and an investor could lose part or all of his or her
investment.





RISKS
RELATED TO OUR BUSINESS





We
will need additional financing in order to execute our business
plan.





We
anticipate, based on currently proposed plans and assumptions relating to our
ability to market and sell our products, that our cash on hand, amounts being
made available by Atlantis under an executed line of credit facility and our
upcoming current year harvest will satisfy our operational and capital
requirements for the next 12 months.  However, without additional
capital we will be unable to significantly increase our biomass, expand our
markets or make significant acquisitions.  There can be no assurance
that any additional financing on commercially reasonable terms will be available
when needed.  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
will need additional financing in order to complete the Baja
acquisition.
 
 In order
to complete the Baja acquisition we will need to raise a significant amount of
funds in excess of the funds we currently have available. If we are unable
to raise these additional funds on reasonable terms when needed, we may not be
able to complete our acquisition of the remaining 67% of the Baja
operation.





Regulation
of our industry may have an adverse impact on our business.





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 to strict limitations on the amount of fish they are allowed to
catch.  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.  If international organizations or
national governments were to impose additional limitations on fishing and fish
farm operations, this could have a negative impact on our results of
operations.





Concerns
about the state of the Bluefin Tuna population may lead some customers to look
for alternatives.





In the
Mediterranean and the Pacific Ocean, large quantities of Bluefin Tuna are taken
for on-growing in fish cages. Statistics for culturing are even less accurate
than official catch statistics.  Experts estimated the total Atlantic
Bluefin aquaculture production during 2006 at between 20,000 and 30,000 metric
tons and the Mexican Pacific Bluefin aquaculture production during 2006 at
between 3,000 and 5,000 metric tons.





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, such as yellowfin, albacore and bigeye.  If these boycotts
become more widespread, they may have a negative impact on our results of
operations.





The
growth of our business depends on our ability to secure fishing licenses
directly or through third parties and concessions for our farm
locations.





Fish
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.  In addition, our offshore farms that harbor the
cages containing our tuna livestock are constructed pursuant to concessions
granted by the local governments that have jurisdiction over the waters where
our farms are located.  Our ability to obtain, sustain or renew such
licenses and permits on acceptable terms is subject to change 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.


11


We
are dependent on an affiliate for our Kali Tuna fishing and towing
operations.





A large
portion of our Kali Tuna fishing and towing operations is conducted by M.B.
Lubin, an affiliated entity owned by Dino Vidov, Kali Tuna’s General
Manager.  M.B. 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.  Kali Tuna does not have its own fishing vessels and, moreover,
does not possess the requisite licenses to catch its own fish. If for any
reason, M.B. Lubin would be unable or unwilling to continue to provide its
services to Kali Tuna, this would likely lead to a temporary interruption
in  the supply of fish at least until Kali Tuna found another entity
that could provide these services for it.  Failure to find a
replacement for M.B. Lubin, even on a temporary basis, may have an adverse
effect on our results of operations.


Almost
all Kali Tuna’s products are sold to only two customers.


Kali Tuna
has derived, and over the near term it expects to continue to derive, all of its
sales from a small number of customers.  Almost all of its products
are sold to only two trading houses for further sale into the Japanese
market.  The loss of either of these customers or non-payment of
outstanding amounts due to Kali Tuna by any of them could materially and
adversely affect our business in terms of results of operations, financial
position and liquidity.
 
 It
may be difficult to effect service of process and enforcement of legal judgments
upon our company and our officers and directors because some of them reside
outside the United States.
 
 Many of
our key directors and officers reside outside the United States, service of
process on our key directors and officers may be difficult to effect 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.
 
 We
may be adversely affected by fluctuations in raw material prices and selling
prices of our products.
 
 The
products and raw materials we use may experience price volatility caused by
events such as market fluctuations, weather conditions or changes in
governmental programs. The market price of these raw materials may also
experience significant upward adjustment, if, for instance, there is a material
under-supply or over-demand in the market.  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.





We
may not be able 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 cannot assure you that we will be able
to:


●
              meet
      our capital needs;
 ●
              expand
      our systems effectively or efficiently, or in a timely
    manner;
 ●
              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.





Loss
of Oli Steindorsson, our Chairman, could impair our ability to
operate.





If we
lose Oli Steindorsson, our Chairman, our business could suffer. Our success is
highly dependent on our ability to attract and retain qualified management
personnel.  We have entered into an employment agreement with Mr.
Steindorsson.  The loss of Mr. Steindorsson could have some effect on
our operations.  If we were to lose our Chairman, we may experience
temporary difficulties in competing effectively, developing our technology and
implementing our business strategies. We do not have key man life insurance in
place for any of our key personnel.


12


Our
business may suffer if we do not attract and retain talented
personnel.





Our
success will depend in large measure on the abilities, expertise, judgment,
discretion, integrity and good faith of our management and other personnel in
conducting the business of the Company. 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.





Our
success depends on the ability of our management and employees to interpret
market and aqua-biological data correctly and to interpret and respond to
economic, market and other conditions in order to locate and adopt appropriate
investment opportunities, monitor such investments, and ultimately, if required,
to successfully divest such investments. Further, no assurance can be given that
our key personnel will continue their association or employment with us or that
replacement personnel with comparable skills can be found. We have sought to and
will continue to ensure that management and any key employees are appropriately
compensated; however, their services cannot be guaranteed. If we are unable to
attract and retain key personnel, our business may be adversely
affected.





Our
management team has limited experience in public company matters in the United
States, which could impair our ability to comply with legal and regulatory
requirements.





Our
management team has only limited public company management experience or
responsibilities in the United States, which could impair our ability to comply
with legal and regulatory requirements such as the Sarbanes-Oxley Act of 2002
and applicable federal securities laws including filing required reports and
other information required on a timely basis. There can be no assurance that our
management will be able to implement and effect programs and policies in an
effective and timely manner that adequately respond to increased legal,
regulatory compliance and reporting requirements imposed by such laws and
regulations. Our failure to comply with such laws and regulations could lead to
the imposition of fines and penalties and further result in the deterioration of
our business.





Penalties
we may incur could impair our business.





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.





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 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.
 
 Some
consumers may refrain from purchasing tuna because it has been found to contain
mercury.
 
 Research
has shown that 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 heavy metals 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.  If this were to occur, it would have an adverse impact on our
business.
 
 Fluctuations
in Foreign Exchange Rates Could Have an Adverse Effect on the Company’s Results
of Operations.


13


The
Company’s operations are conducted in foreign currencies.  For
example, most of the sales are paid for in Japanese Yen while most of the
expenses are paid for in Croatian Kunas, Euros and Mexican Pesos.  The
value of these currencies fluctuates relative to the U.S. dollar.  As
a result, the Company is exposed to exchange rate fluctuations, which could have
an adverse effect on its results of operations in a given period.
  RISKS
RELATED TO OUR COMMON STOCK





There
has been a limited trading market for our common stock and no market for the
warrants.





It is
anticipated that there will be a limited trading market for the common stock on
the Over-the-Counter Bulletin Board.  The lack of an active market may
impair investor’s ability to sell his or her shares at the time he or she wishes
to sell them or at a price that he or she considers reasonable. The lack of an
active market may also reduce the fair market value of invesor’s shares. An
inactive market may also impair our ability to raise capital by selling shares
of capital stock and may impair our ability to acquire other companies or
technologies by using common stock as consideration.
 
 You
may have difficulty trading and obtaining quotations for our common
stock.





The
common stock may not be actively traded, and the bid and asked prices for our
common stock on the NASD Over-the-Counter Bulletin Board may fluctuate widely.
As a result, investors may find it difficult to dispose of, or to obtain
accurate quotations of the price of, our securities. This severely limits the
liquidity of the common stock, and would likely reduce the market price of our
common stock and 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;
 ●
              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.


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.





Our
operating results may fluctuate significantly, and these fluctuations may cause
our stock price to decline.
 
 Our
operating results will likely vary in the future primarily 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. If our results of operations do
not meet the expectations of current or potential investors, the price of our
common stock may decline.





We
may not pay dividends in the near future.





We may
not declare dividends for the near future, as we anticipate that we will
reinvest any future earnings in the development and growth of our business.
Therefore, investors would not receive any funds unless they sell their common
stock, and stockholders may be unable to sell their shares on favorable terms or
at all. Investors cannot be assured of a positive return on investment or that
they will not lose the entire amount of their investment in the Common
Stock.


14


Directors
and officers of the Company will have a high concentration of common stock
ownership.


Based on
the 46,745,400 shares of common stock that are outstanding (excluding shares
underlying Warrants) as of October 7, 2010, our officers and directors
beneficially own approximately 72% 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 the Company.  Additionally, as a result of their high level
of ownership, our officers and directors might be able to strongly influence the
actions of the Company’s board of directors (the “Board”) and the outcome of
actions brought to our shareholders for approval. Such a high level of ownership
may adversely affect the voting and other rights of our
shareholders.





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.





Shares of
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 or quoted on the NASDAQ system, 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.





ITEM
2.  PROPERTIES.





Kali Tuna
owns approximately 75,000 square feet of land in Lamjana Bay, Community of Kali,
Croatia, consisting of approximately 53,000 square feet of working area, housing
the main office building, cold storage building processing plant and two
warehouses.  Kali Tuna also has the right of use of a ship wharf
located adjacent to the property.  Kali Tuna believes that suitable
additional space to accommodate its anticipated growth will be available in the
future on commercially reasonable terms.





Baja
leases buildings of approximately 65,000 square feet of working area, housing
the main office building, building processing plant and two warehouses. Baja
believes that suitable additional space to accommodate its anticipated growth
will be available in the future on commercially reasonable
terms.





ITEM
3.  LEGAL PROCEEDINGS.





From time
to time we may be named in claims arising in the ordinary course of business.
Currently, no legal proceedings or claims are pending against or involve us that
could reasonably be expected to have a material adverse effect on our business
and financial condition.





During
June 2008, the Financial Police of Ministry of Finance of the Republic of
Croatia (FP) concluded an inspection of certain of the Company’s transactions
and alleged the following underpayments of taxes and related
interest:





·
            Underpayment
      of value added taxes for calendar year 2006 and related interest, which
      total approximately $1.5 million, in connection with sales of tuna
      inventory by the Company to its 50%-owned subsidiary, Kali Tuna Trgovina,
      at its purchase cost.





·
            Underpayment
      of tax on profit for the year ended June 30, 2007 and related interest,
      which total approximately $.1 million, in connection with sales of tuna
      inventory by the Company to a related
party.





The
Company filed an appeal to contest these allegations. The claim was dismissed by
the Appellate Body of Ministry of Finance. The dismissal did not terminate the
process, but has obliged the Financial Authorities in Croatia to repeat the
performed procedure, taking into account all facts and proof being proposed and
disclosed by Kali Tuna in their appeal. We intend to continue to defend
ourselves vigorously against this action.




Item
4.  [REMOVED AND RESERVED]


15




PART
II





Item
5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES




Our
common stock has been included for quotation on the OTC Bulletin Board under the
stock symbol “UMAM” since August 20, 2010.  Prior thereto, it was
traded under the symbol “LNLT”.




The
following table shows the reported high and low closing bid quotations per share
for our common stock based on information provided by the OTC Bulletin Board for
the periods indicated.  No quotes were available for prior
periods.  Over-the-counter market quotations reflect inter-dealer
prices, without markup, markdown or commissions.  Particularly since
our common stock is traded infrequently they may not necessarily represent
actual transactions or a liquid trading market.





Year Ended June30,2010
                      
                      HIGH
                      
                      
                      LOWThird
      Quarter
                      
                      $
                      0.08
                      
                      
                      $
                      0.06Fourth
      Quarter
                      
                      $
                      1.30
                      
                      
                      $
                      0.08





Item
6. SELECTED FINANCIAL DATA





Not
applicable.





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





The
following discussion and analysis presents the factors that had a material
effect on the Company’s financial position as of June 30, 2010 and its results
of operations for the two years then ended. You should read this discussion in
conjunction with the consolidated financial statements and related notes
included elsewhere in this Form 10-K. Prior to June 30, 2010 , the Company was a
shell company known as Lions Gate Lighting Corp. (Lions Gate). On June 30, 2010,
Lions Gate and Atlantis Group hf (Atlantis) 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 30,000,000 shares of Lions Gate
common stock, resulting in a change of control of Lions Gate. As a result of
this transaction, Kali Tuna d.o.o. (Kali Tuna), a wholly-owned subsidiary of
Bluefin and indirect subsidiary of Atlantis, became the indirect wholly-owned
subsidiary of the Company. 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.
Accordingly the consolidated financial statements presented in this Form 10-K
include the consolidated financial position and results of operations of Bluefin
(consisting primarily of Kali Tuna and its subsidiaries and variable interest
entities) rather than Lions Gate.





General
Overview




We are a
leader in long term farming of Northern Bluefin Tuna in the Mediterranean
through our wholly-owned subsidiary Kali Tuna with farming facilities located in
Kali, Croatia, along with a processing plant, freezing storage and
wharf.  Kali Tuna cultivates its tuna with special reliance on
technology and experience to grow the tuna for one and one-half to three and
one-half years following their capture in the wild.  Kali Tuna’s
operations include farming, feeding and harvesting Northern Bluefin Tuna that
was caught in the Mediterranean and the Adriatic Sea.   During
the past three years, Kali Tuna has been increasing its carry-over stock of tuna
to increase output quantities each year.





Kali Tuna
has marketed almost all of its products in Japan through Atlantis Group
hf.  Recently, Atlantis entered into an agreement for the sale and
delivery of at least 500 metric tons of frozen Northern Bluefin Tuna on an
annual basis.  It is contemplated that tuna to be delivered under this
agreement by Atlantis will be filled by fish farmed by Kali Tuna under the terms
of a sales agency agreement entered between Umami and Atlantis on June 30,
2010.  Under the terms of the agreement, Atlantis was granted the
exclusive right to sell on Kali Tuna’s behalf all of its Northern Bluefin Tuna
products into the Japanese market.   Umami has agreed to pay Atlantis
an agency commission of 2% of all sales to be made under this
agreement.




Critical
Accounting Policies and Estimates




We
prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America. 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. Our
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.




The
following critical accounting policies affect the more significant judgments and
estimates used in the preparation of the Company’s consolidated financial
statements.


16


Reporting Currency and Functional
Currency





Our
growth strategy is to become the world leader in the Bluefin tuna
industry.  As such we are positioning the Company to be able to seek
out opportunities worldwide and operate with a United States home base with our
strategy based on maximizing our returns as measured in US
dollars.  Accordingly, we will be continuing to raise capital in US
dollars and evolve our financial operations to maximize our returns in US
dollars.  Our reporting currency is the US dollar.





We are
planning to become a US dollar centric company and our treasury function will
strive to minimize foreign currency risk against the US dollar with investments,
loans and advances denominated in US dollars and if appropriate we will enter
into hedging transactions that we believe will maximize our returns in US
dollars.





At June
30, 2010 our functional currency was the Croatian Kuna as our Kali Tuna
operation is in Croatia,  our only operation on that
date.  We expect to evolve from a Croatian Kuna functional currency to
a US dollar functional currency in the near future as we continue to raise
capital in US dollars and transition our treasury operations to maximize our
return in US dollars and as we begin to acquire operations outside of
Croatia.  We have already made a significant investment in Baja Aqua
Farms and hope to complete this acquisition during the quarter ending December
31, 2010.





We expect
to seek opportunities and invest our available capital in investments that we
believe will provide the greatest return in US dollars.





Accounting
for Derivative Warrant Liabilities





As
described above, the Company’s reporting currency is the US dollar and its
functional currency is the Croatian Kuna, as virtually all current operations
are in Croatia. Capital raising efforts are conducted primarily in US dollars
and the Company has and will continue to issue warrants to purchase common
shares at prices denominated in US dollars.





The fact
that the exercise prices of the warrants are not denominated in the functional
currency requires that the warrants be considered derivatives and recorded at
their estimated fair value as liabilities.  As of each reporting date,
the estimated fair value of the warrants that remain outstanding will be
re-assessed and the recorded liabilities will be adjusted.  If the
warrants increase in fair value, the increase will be shown as an expense in the
income statement and if the warrants decrease in fair value, a gain will be
recorded for such decrease.





Future
increases in the share value of the Company’s common stock will increase the
value of the outstanding warrants.  Accordingly, during periods when
the share price increases, expenses will be recorded related to the warrant
liabilities which may be larger than the operating income of the
Company.  Conversely, during periods when the share price decreases,
gains will be recorded related to the warrant liabilities which may bear no
relationship to the operating income or loss of the Company.  Such
gains and losses will not be tax-effected.





The
warrant liabilities will not require the use of cash in order to be
settled.  The warrant liabilities will remain outstanding until (i)
the warrants are exercised, (ii) the warrants expire unexercised, or (iii) the
Company’s functional currency becomes the US dollar.





If the
warrants are exercised, cash will be received for the exercise price, net of any
applicable placement agent costs, and recorded as increases to common stock and
additional paid in capital equivalent to the total of net cash proceeds received
and the value of the warrants immediately prior to exercise.  If the
warrants expire unexercised or in the event the Company’s functional currency
becomes the US dollar, the Company will reclassify the recorded liability to
stockholders’ equity, after first adjusting its fair value and recording a gain
or loss on the income statement.





Until we
have evolved Umami to a US dollar functional currency, due to the large amount
of warrants outstanding and expected to be outstanding, and the expected
volatility of our share price, our reported net income will be unpredictable,
with potentially large gains or losses resulting from recording changes in the
fair value of the warrants affecting each reporting period.





Our
financial statements will not be comparable to another entity’s financial
statements with a similar capital structure, with the only difference being that
their warrants are priced in their functional currency, as such a company would
not be required to record the estimated fair value of their outstanding warrants
as derivative liabilities with corresponding changes affecting their income
statement.  Accordingly, given comparable results and capital
structure, such companies will have less volatility in reported earnings, as
their net income would be based only on operating results, while our net income
will be the sum of our operating results plus or minus changes in the fair value
of the warrants.





Inventories




Inventories
are stated at the lower of cost or net realizable value.





Cost is
calculated on a weighted average basis and includes all costs to acquire and to
bring the inventories to their present location and condition. The Company
evaluates the net realizable value of its inventories on a regular basis and
records a provision for loss to reduce the computed weighted average cost if it
exceeds the net realizable value.


17





The fair
value of live tuna stock that was caught in the 2010 fiscal year is estimated to
equal its cost.  The fair value of inventory that was caught in prior
years is estimated based upon the market price that an unrelated party would be
willing to pay for the inventory, less estimated selling costs.




Consolidation




The
Company has determined that (i) Kali Tuna Trgovina d.o.o., a joint venture owned
50% each by Kali Tuna and Bluefin Tuna Hellas A.E, (“BTH Joint Venture”) and
(ii) MB Lubin d.o.o., an entity owned by one of the Kali Tuna’s executive
officers, are variable interest entities of which the Company is the primary
beneficiary.   These entities are therefore consolidated in the
Company’s financial statements.  The 50% of the BTH Joint Venture
owned by Bluefin Tuna Hellas A.E. has been reflected as non-controlling interest
in the financial statements.  All material inter-company transactions
and balances have been eliminated in consolidation.





Related
Parties





Parties
are considered to be related if one party has the ability, directly or
indirectly, to control the other party or exercise significant influence over
the other party in making financial and operational decisions. Parties are also
considered to be related if they are subject to common control or common
significant influence. Related parties may be individuals or corporate
entities.




Revenue
Recognition




The
Company recognizes revenue when the significant risks and rewards of ownership
have been transferred to the customer, including factors such as when persuasive
evidence of an arrangement exists, delivery has occurred, the sales price is
fixed and determinable, and collectability is probable. The Company recognizes
sales when its tuna inventory is shipped, title has passed to the customers and
collectability is reasonably assured.




Results
of Operations




Year
Ended June 30, 2010 Compared to Year Ended June 30, 2009




Sales. For the year ended June 30,
2010, sales increased by $1,256,000 from $24,070,000 to $25,326,000, an increase
of 5.2% compared to the year ended June 30, 2009.  Included in the
sales for the year ended June 30, 2010, are net revenues of $7,935,000 in
connection with transactions that involved the purchase of tuna from another
Croatian farming operation and the immediate sale of the product to one of the
Company’s customers.




The
Company’s sales from its farming activities were $17,391,000, a reduction from
the 2009 fiscal year of $6,679,000. This was caused by a decline in the volume
of sales to 924 metric tons in the year ended June 30, 2010 from 1,055 metric
tons in the year ended June 30, 2009.  There was also a decline in the
average sales price to $18.82 per kg from $22.82 per kg. due to the sales of
smaller size fish which command a lower price per kg.





Cost of
Sales.   The cost of sales as a percentage of net sales from
the Company’s farming operations increased from 70% of sales in the year ended
June 30, 2009 to 79% in the corresponding period ended June 30, 2010. This was
primarily due to the reduction in average sales price per kg of
18%.





Gross
Profit. The gross profit generated from the sale of tuna decreased to
approximately 20% in the year ended June 30, 2010 compared to approximately 30%
in 2009 due to the reduction in average sales price per kg for our farmed tuna
of 18% noted above and also to the purchase and resale of tuna of another
Croatian farming operation described above, as that transaction resulted in a
gross profit margin of only 10%.





Other Operating
Income (Expenses). Other operating income declined by
$64,000.





Selling, General
and Administrative Expenses. Selling, general and
administrative costs increased by $1,672,000 from 2009 to
2010.   Costs incurred in connection with the reverse merger and
recapitalization of the Company account for $1,271,000 of the increase, and
stock option expense accounts for an additional $60,000. Advertising and
marketing costs increased by $126,000 due to an increase in our marketing
activities in anticipation of larges increases in future quantities available
for sale due to the increase in carry-over stocks.





Operating
Income.  During the year
ended June 30, 2010, we generated an operating income of $2,204,000, a decrease
of $3,630, 000 compared to the operating income for the year ended June 30,
2009.  The decrease is the result of slightly higher sales levels
offset by lower margins on those sales and higher selling, general and
administration expenses.





Foreign Currency
Gains and Losses.  The financial
meltdown during late 2008 and the ensuing currency exchange turmoil between EUR
and JPY led to a loss of $3,176,000 on the maturity of our JPY denominated
liabilities consisting of advances received from customers for contracted sales
in the year ended June 30, 2009. In the year ended June 30, 2010, these currency
losses fell to $1,700,000, a decrease of $1,476,000 primarily as a result of the
Euro decreasing in value against major currencies, especially the US Dollar and
the Japanese Yen, due to the current economic crisis in Europe related to Greece
and potentially other countries in Europe.


18





Interest Expense,
Net. Interest expenses increased to $987,000 during the year ended June
30, 2010, an increase of $277,000 compared to the prior year.  This
was caused by increased borrowings resulting from the extension of the farming
cycle.





Income Tax
Expense.  Deferred income tax 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 bases. The deferred tax liabilities decreased by $66,000 during
the year ended June 30, 2010.  Income tax expense was $462,000 for the
year ended June 30, 2010.





Net Loss
Attributable to the Non-controlling Interests. The net losses
attributable to the non-controlling interests, Lubin and the BTH Joint Venture,
increased to $1,380,000 in the year ended June 30, 2010 from $630,000 in the
year ended June 30, 2009 as the BTH Joint Venture did not generate sales revenue
during 2010. Lubin incurred losses mainly due to changes in the exchange rates
on loans held in US Dollar and Japanese Yen. These losses are added back to
consolidated net income to derive net income attributable to the Company’s
shareholders.





Net
Income. Net
income decreased to $441,000 for the year ended June 30, 2010, compared to net
income of $2,130,000 for the previous year.





Liquidity
and Capital Resources





Years
ended June 30, 2010 and 2009





At June
30, 2010, we reported working capital of approximately $7,448,000 compared to
approximately $2,948,000 at June 30, 2009.  At June 30, 2010, we had
cash and cash equivalents in the amount of $215, 000. Additional cash proceeds
from the private placement of $1,635,000 were held by the private placement
escrow agent on June 30, 2010 and transferred to the Company’s operating cash
bank account in July, 2010.





Cash
Flows





The
following table summarizes our cash flows for the years ended June 30, 2010 and
2009:





Years Ended June 30,2010
                      
                      
                      2009Total
      cash provided by (used in):Operating
      activities
                      
                      $
                      (2,303,000
                      )
                      
                      $
                      (5,494,000
                      )Investing
      activities
                      
                      
                      (2,397,000
                      )
                      
                      
                      (1,466,000
                      )Financing
      activities
                      
                      
                      3,574,000
                      
                      
                      
                      5,736,000Effects
      of exchange rate changes
                      
                      
                      (80,000
                      )
                      
                      
                      (375,000
                      )Decrease
      in cash and cash equivalents
                      
                      $
                      (1,206,000
                      )
                      
                      $
                      (1,599,000)





Net cash
used in operating activities for the year ended June 30, 2010 totaled
$2,303,000, compared to $5,494,000 used in operating activities for the year
ended June 30, 2009.  The change is primarily due to the lower net
income and changes in inventory  and accounts payable,
trade.





Cash used
in investing activities for the year ended June 30, 2010 was $2,397,000 compared
to $1,466,000 for the year ended June 30, 2009.  The change is due
primarily to higher investment in new tangible assets including cages for
livestock.





Cash
provided by financing activities for the year ended June 30, 2010 totaled
$3,574,000, compared to $5,736,000 of cash provided by financing activities for
the year ended June 30, 2009.  The change is due primarily to the
issuance of common stock and warrants for net proceeds of $5,351,000, an
increase in shareholder loans of $11,790,000 offset by payments on these loans
of $12,572,000 and net new borrowings of $2,225,000 from Erste &
Steirmaerkische bank, offset by payments of $3,200,000 to related
parties.




Sources
of Liquidity





The
Company’s most significant sources of liquidity have been cash from lines of
credit with commercial banks, advances made by Atlantis and the issuance of
shares.  Additionally, Atlantis has provided loan guarantees and other
credit support through its banking relationships.





Sales of
tuna occur during the winter when the sea temperature is lowest to maximize the
quality and value of the product (October to March).  There are
generally no sales generated during the rest of the
year.  Accordingly, the Company and Kali Tuna need to finance
operations with available capital during the non-selling months.





We
raised initial net proceeds of approximately $7.0 million in a financing
transaction that was completed on June 30, 2010.  Subsequent to June
30, 2010 another $1.4 million in proceeds related to the same financing
transaction was raised. Additionally, we have a credit facility with
Atlantis providing for a $9.9 million line of credit and a $5.1 million term
loan.  As of October 17, 2010, the total principal balance advanced
under the facility was approximately $15.0 million, which was used for the
purchase in July 2010 of the initial 33% of Baja and the financing of Baja's
farming operations, financing Kali Tuna's farming operations and for Umami
corporate expenses.


19





We
believe that the net proceeds from the transactions described above and cash
generated by operations will be sufficient to continue to finance our present
operations through the harvest season and for the remainder of our fiscal year
ending June 30, 2011.





However,
we will need to obtain additional capital in order to complete the Baja
acquisition ($10 million), and expand operations and remain
profitable.  We plan to pursue sources of additional capital by
issuing securities through various financing transactions or arrangements,
including joint venturing of projects, debt financing, equity financing or other
means. We may also consider advance sales and/or outright sales of tuna to
customers.  Since June 30, 2010, we have increased available bank
lines and borrowings including an additional $11.2 million in financing for
Croatia and net proceeds of $4.2 million from a private investor
loan.  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.





Seasonality





As
explained above, sales of tuna occur during the winter when the sea temperature
is lowest to maximize the quality and value of the product (October to
March).  There are generally no sales generated during the rest of the
year.





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, and
results of operations, liquidity or capital expenditures.





Item
7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.




20




Item
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




Our
consolidated financial statements and Report of Independent Registered Public
Accounting Firm appears on pages F-1 through F-14 of this
Report.




Item 9.  CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE




On August
25, 2010, Umami Sustainable Seafood Inc., formerly Lions Gate Lighting Corp.
(the “Company”) dismissed its auditors, Madsen & Associates, CPA’s Inc. (the
"Former Accountant").  Effective August 26, 2010, the Company engaged
Ramirez International (the "New Accountant"), as its independent certified
public accountant.  The Company's decision to dismiss the Former
Accountant and retain the New Accountant was approved by its Board of Directors
on July 29, 2010.





The
Former Accountant’s report on the financial statements for the fiscal years
ended February 29, 2009 and February 28, 2010 was not subject to an adverse or
qualified opinion or a disclaimer of opinion and were not modified as to
uncertainty, audit scope or accounting principles for the fiscal years then
ended, except that the Former Accountant’s report on the financial statements as
of February 29, 2009 and February 28, 2010 contained explanatory language that
substantial doubt existed about the Company’s ability to continue as a going
concern due to the Company’s need for additional working capital for its planned
activity and to service its debt.





During
the two most recent fiscal years and any subsequent interim period there were no
reportable events as the term is described in Item 304(a)(1)(iv) of Regulation
S-K.





During
the two most recent fiscal years and any subsequent interim period there were no
disagreements with the Former Accountant on any matters of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which, if not resolved to the satisfaction of the Former Accountant would have
caused it to make reference to the subject matter of the disagreements in
connection with its reports on these financial statements for those
periods.





The
Company did not consult with the New Accountant regarding the application of
accounting principles to a specific transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's financial
statements, and no written or oral advice was provided by the New Accountant
that was a factor considered by the Company in reaching a decision as to the
accounting, auditing or financial reporting issues.





Item 9a. CONTROLS
AND PROCEDURES




Evaluation
of disclosure controls and procedures





Disclosure
controls and procedures are controls and other procedures that are designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is
recorded, processed, summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms. Disclosure controls
and procedures include controls and procedures designed to ensure that
information required to be disclosed in our reports filed or submitted under the
Exchange Act is accumulated and communicated to management to allow timely
decisions regarding required disclosure.




As
required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our
management, with the participation of our president (our principal executive
officer) and our chief financial officer (our principal financial officer and
principal accounting officer) evaluated the effectiveness of our disclosure
controls and procedures as of the end of the period covered by this annual
report, being June 30, 2010.  Our president and our chief financial
officer evaluated our company’s disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30,
2010.




Based on
this evaluation, these officers concluded that, as of June 30, 2010, these
disclosure controls and procedures were not effective to ensure that the
information required to be disclosed by our company in reports it files or
submits under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and forms of the Securities
Exchange Commission.  The conclusion that our disclosure controls and
procedures were not effective was due to the presence of material weaknesses in
internal control over financial reporting as identified below under the heading
“Management’s Report on Internal Control over Financial Reporting.” Management
anticipates that such disclosure controls and procedures will not be effective
until the material weaknesses are remediated.




Because
of the inherent limitations in all control systems, no evaluation of controls
can provide absolute assurance that all control issues, if any, within our
company have been detected. These inherent limitations include the realities
that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake.


21





Management’s
Report on Internal Control over Financial Reporting




Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. The term “internal control over financial
reporting” is defined as a process designed by, or under the supervision of, an
issuer’s principal executive and principal financial officers, or persons
performing similar functions, and effected by the issuer’s board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:





(1)
            pertain to the maintenance of
      records that in reasonable detail accurately and fairly reflect the
      transactions and dispositions of the assets of the
      issuer;





(2)
            provide reasonable assurance that
      transactions are recorded as necessary to permit preparation of financial
      statements in accordance with generally accepted accounting principles,
      and that receipts and expenditures of the issuer are being made only in
      accordance with authorizations of management and directors of the issuer;
      and





(3)
            provide reasonable assurance
      regarding prevention or timely detection of unauthorized acquisition, or
      use or disposition of the issuer’s assets that could have a material
      effect on the financial
statements.




Under the
supervision of our president, being our principal executive officer, and our
chief financial officer, being our principal financial officer and principal
accounting officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting as of June 30, 2010 using the criteria
established in Internal Control—Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). This evaluation
included review of the documentation of controls, evaluation of the design
effectiveness of controls, testing of the operating effectiveness of controls
and a conclusion on this evaluation. Based on this evaluation, our management
concluded our internal control over financial reporting was not effective as at
June 30, 2010.




A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of our company’s annual or interim financial
statements will not be prevented or detected on a timely basis. In its
assessment of the effectiveness of our internal control over financial reporting
as of June 30, 2010, we determined that there were control deficiencies that
constituted material weaknesses which are indicative of many small companies
with small staff, such as:





(1)
            inadequate segregation of duties
      and effective risk
assessment;





(2)
            insufficient written policies and
      procedures for accounting and financial reporting with respect to the
      requirements and application of both generally accepted accounting
      principles in the United States and guidelines of the Securities and
      Exchange Commission; and





(3)
            inadequate security and
      restricted access to computers, including insufficient disaster recovery
      plans.




These
control deficiencies resulted in a reasonable possibility that a material
misstatement of the annual or interim financial statements could not have been
prevented or detected on a timely basis.  As a result of the material
weaknesses described above, we concluded that we did not maintain effective
internal control over financial reporting as of June 30, 2010 based on criteria
established in Internal
Control—Integrated Frameworkissued by COSO. Our management is currently
evaluating remediation plans for the above deficiencies.   During
the period covered by this annual report on Form 10-K, we have not been able to
remediate the weaknesses described above.   However, we plan to
take steps to enhance and improve the design of our internal control over
financial reporting.




Changes
in Internal Control




There was
no change in our internal control over financial reporting identified in
connection with the evaluation of our internal control over financial reporting
described above that occurred during our most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, our internal
control over financial reporting.




22





Inherent
Limitations on Effectiveness of Controls




In
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives. In addition, the design of disclosure controls and procedures must
reflect the fact that there are resource constraints and that management is
required to apply its judgment in evaluating the benefits of possible controls
and procedures relative to their costs.




Attestation
Report of Registered Public Accounting Firm Not Required




This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management's report was not subject to attestation by our registered public
accounting firm pursuant to an exemption for smaller reporting
issuers.




Item
9B.  OTHER INFORMATION




None


23




PART III




Item
10.  DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




The
information required by this item is incorporated by reference to the sections
captioned “Election of Directors” and “Section 16(a) Beneficial
Ownership Reporting Compliance” contained in our Proxy Statement related to the
2010 Annual Meeting of Stockholders, to be filed with the SEC within 120 days of
June 30, 2010, pursuant to General Instruction G(3) of Form 10-K (the
“Proxy Statement”). Certain information required by this item concerning
executive officers is set forth in Part I of this Report in
“Business—Executive Officers,” and certain other information required by this
item is incorporated by reference from the sections captioned “Principal
Stockholders” contained in our Proxy Statement.




Item
11.  EXECUTIVE COMPENSATION




The
information required by this item is incorporated by reference to the section
captioned “Executive Compensation and Other Matters” contained in our Proxy
Statement.




Item
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS




The
information required by this item is incorporated by reference to the sections
captioned “Principal Stockholders”, “Executive Compensation and Other Matters”
and “Certain Transactions” contained in our Proxy Statement.




Item 13.  CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE




The
information required by this item is incorporated by reference to the sections
captioned “Proposal One—Election of Directors,” “Compensation Committee
Interlocks and Insider Participation” and “Certain Transactions” contained in
our Proxy Statement.




Item
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES




The
information required by this section is incorporated by reference from the
information in the section entitled “Ratification of Appointment of Independent
Accountants” in our Proxy Statement.


24




PART IV




Item
15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
  Exhibits
  ExhibitNumber
                    
                    Description2.1
                    
                    Articles
      of Merger (1)2.2
                    
                    Share
      Exchange Agreement (2)3.1
                    
                    Articles
      of Incorporation (3)3.2
                    
                    Bylaws
      (3)4.1
                    
                    Form
      of Warrant (2)4.2
                    
                    Common
      Stock Purchase Warrant dated October 7, 2010*4.3
                    
                    Senior
      Secured Bridge Note in the Principal Amount of $3,125,000 dated October 7,
      2010*4.4
                    
                    Senior
      Secured Bridge Note in the Principal Amount of $2,500,000 dated October 7,
      2010*10.1
                    
                    Letter
      Agreement dated June 6, 2007, with Sunway Lighting Technology Co. Ltd.
      (3)10.2
                    
                    Return
      to Treasury Agreement dated May 12, 2009 with Robert McIsaac
      (4)10.3
                    
                    Employment
      Agreement dated July 1, 2010 with Oli Valur Steindorsson
    (2)10.4
                    
                    Employment
      Agreement dated July 1 2010 with Dan Zang (2)10.5
                    
                    Sales
      Agency Agreement dated June 30, 2010 with Atlantis Group hf
      (2)10.6
                    
                    Call
      Option Agreement dated June 30, 2010 with Atlantis Group hf
      (2)10.7
                    
                    Stock
      Purchase Agreement dated July 20, 2010 by and among Corposa, S.A. de C.V.,
      Marpesca, S.A. de C.V., Holshyrna ehf, Vilhelm Mar Gudmundsson, Robert
      Gudfinnsson, Baja Aqua Farms, S.A. de C.V., Oceanic Enterprises, Inc. and
      Lions Gate Lighting Corp. (1)10.8
                    
                    Option
      Agreement, dated July 20, 2010, by and among Baja Aqua-Farms, S.A. de
      C.V., Lions Gate Lighting Corp., Corposa, S.A. de C.V. and Holshyrna, ehf
      (1)10.9
                    
                    Amendment
      dated September 24, 2010 to Stock Purchase Agreement dated July 20,
      2010  (7)10.10
                    
                    Amendment
      dated September 24, 2010 to Option Agreement dated July 20, 2010
      (7)10.11
                    
                    Note
      and Warrant Purchase Agreement dated October 7, 2010*10.12
                    
                    Atlantis
      Credit Facility effective as of June 30, 2010*10.13
                    
                    Amendment
      No. 1 to Loan Agreement dated September 30, 2010*10.14
                    
                    Company
      Pledge and Security Agreement dated October 7,
  2010*14.1
                    
                    Code
      of Ethics (5)16.1
                    
                    Letter
      from Former Accountants dated August 25, 2010. (6)21.1
                    
                    Subsidiaries
      of Lions Gate Lighting Corp.: Bluefin Acquisition Group
    Inc.31.1
                    
                    Section
      302 Certification*31.2
                    
                    Section
      302 Certification *32.1
                    
                    Section
      906 Certification *32.2
                    
                    Section
      906 Certification *99.1
                    
                    Audit
      Committee Charter
(5)
  
 * Filed
herewith
 
 (1)
              Incorporated
      by reference to the Company’s Current Report on Form 8-K filed on July 30,
      2010
 (2)
              Incorporated
      by reference to the Company’s Current Report on Form 8-K filed on July 7,
      2010
 (3)
              Incorporated
      by reference to the Company’s Registration Statement on Form SB-2 filed on
      July 12, 2006
 (4)
              Incorporated
      by reference to the Company’s annual report on Form 10-KSB filed on June
      13, 2007
 (5)
              Incorporated
      by reference to the Company’s current report on Form 8-K filed on May 12,
      2009
 (6)
                Incorporated
      by reference to the Company’s Current Report on Form 8-K filed on August
      27, 2010(7)
                Incorporated
      by reference to the Company’s Current Report on Form 8-K filed on October
      1, 2010
 25





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 report to be signed on its
behalf by the undersigned thereunto duly authorized.





DATE:       
      October 20, 2010
                UMAMI
      SUSTAINABLE SEAFOOD INC./s/ Oli Valur SteindorssonOli
      Valur SteindorssonChief
      Executive Officer





POWER
OF ATTORNEY





KNOW ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Oli Valur Steindorsson, his attorney-in-fact, each with
the power of substitution, for him in any and all capacities, to sign any
amendments to this Annual Report on Form 10-K, and to file the same, with
exhibits thereto and other documents in connections therewith, with the
Securities and Exchange Commission, hereby ratifying and conforming all that
each of said attorneys-in-fact, or his or her substitutes, may do or cause to be
done by virtue of hereof.





Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Signature
                  
                  Title
                  
                  Date/s/
                  Oli
      Valur Steindorsson
                  
                  Chief
      Executive Officer and Director
                  
                  October
      20, 2010(Principal
      Executive Officer)/s/
                  Daniel
      G. Zang
                  
                  Chief
      Financial Officer (Principal
                    Financial
      and Accounting Officer)
                  
                  October
      20, 2010/s/
                  Frederick
      Charles Kempson
                  
                  Director
                  
                  October
      20, 2010/s/
                  Michael
      David Gault
                  
                  Director
                  
                  October
      20, 2010


26





REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the
Board of Directors of Umami Sustainable Seafood Inc. (formerly Lions Gate
Lighting Corp.)
  We have
audited the accompanying consolidated balance sheets of Umami Sustainable
Seafood Inc. (Company) as of June 30, 2010 and 2009 and the related consolidated
statements of operations, equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on the consolidated
financial statements based on our audits.
  We
conducted our audits in accordance with the auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Umami
Sustainable Seafood Inc. as of June 30, 2010 and 2009, and the results of its
operations and cash flows for the years then ended in conformity with accounting
principles generally accepted in the United States of America.
  /s/RAMIREZ
INTERNATIONAL
 Financial
& Accounting Services, Inc
  Irvine,
California
 October
20, 2010


F-1





UMAMI SUSTAINABLE SEAFOOD
INC.
 (formerly
Lions Gate Lighting Corp.)


CONSOLIDATED
BALANCE SHEETS


(in
thousands, except par value)





June30,
                                    2010
                                  
                                  
                                  June30,
                                    2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  215
                                  
                                  
                                  $
                                  1,421Accounts
      receivable, escrow agent
                                  
                                  
                                  1,635
                                  
                                  
                                  
                                  -Accounts
      receivable, trade
                                  
                                  
                                  64
                                  
                                  
                                  
                                  238Accounts
      receivable, related party
                                  
                                  
                                  424
                                  
                                  
                                  
                                  -Inventories
                                  
                                  
                                  19,767
                                  
                                  
                                  
                                  20,324Other
      current assets
                                  
                                  
                                  781
                                  
                                  
                                  
                                  1,374Total
      current assets
                                  
                                  
                                  22,886
                                  
                                  
                                  
                                  23,357Property and
      equipment, net
                                  
                                  
                                  8,672
                                  
                                  
                                  
                                  8,561Other
      assets
                                  
                                  
                                  11
                                  
                                  
                                  
                                  18Total
      assets
                                  
                                  $
                                  31,569
                                  
                                  
                                  $
                                  31,936LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Short-term
      borrowings
                                  
                                  $
                                  12,700
                                  
                                  
                                  $
                                  12,076Borrowings
      from shareholder
                                  
                                  
                                  -
                                  
                                  
                                  
                                  560Accounts
      payable, trade
                                  
                                  
                                  1,812
                                  
                                  
                                  
                                  2,888Accounts
      payable to related parties
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,559Accrued
      liabilities
                                  
                                  
                                  634
                                  
                                  
                                  
                                  642Income
      taxes payable
                                  
                                  
                                  157
                                  
                                  
                                  
                                  483Deferred
      income taxes
                                  
                                  
                                  135
                                  
                                  
                                  
                                  201Total
      current liabilities
                                  
                                  
                                  15,438
                                  
                                  
                                  
                                  20,409Derivative
      warrant liability
                                  
                                  
                                  697
                                  
                                  
                                  
                                  -Obligations
      under capital leases
                                  
                                  
                                  28
                                  
                                  
                                  
                                  19Total
      liabilities
                                  
                                  
                                  16,163
                                  
                                  
                                  
                                  20,428Commitments
      and contingencies(Note
      13)Stockholders’
      equity:Common
      stock  $0.001 par value, 100,000 shares
    authorized45,261and
      30,000 shares issued and outstanding at June 30, 2010 and June 30, 2009,
      respectively
                                  
                                  
                                  45
                                  
                                  
                                  
                                  30Additional
      paid-in capital
                                  
                                  
                                  6,308
                                  
                                  
                                  
                                  (26
                                  )Retained
      earnings
                                  
                                  
                                  7,514
                                  
                                  
                                  
                                  7,073Accumulated
      other comprehensive income
                                  
                                  
                                  2,401
                                  
                                  
                                  
                                  3,966Total
      Umami stockholders’ equity
                                  
                                  
                                  16,268
                                  
                                  
                                  
                                  11,043Noncontrolling
      interests in VIE’s:Lubin
                                  
                                  
                                  (1,812
                                  )
                                  
                                  
                                  (909
                                  )BTH
      Joint Venture
                                  
                                  
                                  950
                                  
                                  
                                  
                                  1,374Total
      noncontrolling interest
                                  
                                  
                                  (862
                                  )
                                  
                                  
                                  465Total
      equity
                                  
                                  
                                  15,406
                                  
                                  
                                  
                                  11,508Total
      liabilities and stockholders’ equity
                                  
                                  $
                                  31,569
                                  
                                  
                                  $
                                  31,936





The
accompanying notes are an integral part of these Consolidated Financial
Statements.





F-2




UMAMI SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


CONSOLIDATED
STATEMENTS OF OPERATIONS


(in
thousands, except per share information)





YearsEndedJune 30,
                    2010
                  
                  
                  June30,
                    2009Net
      revenue
                  
                  $
                  25,326
                  
                  
                  $
                  24,070Cost
      of goods sold
                  
                  
                  (20,074
                  )
                  
                  
                  (16,924
                  )Gross
      profit
                  
                  
                  5,252
                  
                  
                  
                  7,146Other
      operating  income
                  
                  
                  46
                  
                  
                  
                  110Selling,
      general and administrative expenses
                  
                  
                  (3,094
                  )
                  
                  
                  (1,422
                  )Operating
      income
                  
                  
                  2,204
                  
                  
                  
                  5,834Gain
      (loss) from foreign currency transactions
                  
                  
                  (1,700)
                  
                  
                  
                  (3,176
                  )Interest
      income
                  
                  
                  6
                  
                  
                  
                  62Interest
      expense
                  
                  
                  (987
                  )
                  
                  
                  (710
                  )Income
      (loss) before provision for income taxes
                  
                  
                  (477
                  )
                  
                  
                  2,010Income
      tax provision
                  
                  
                  (462
                  )
                  
                  
                  (510
                  )Net
      income (loss)
                  
                  
                  (939
                  )
                  
                  
                  1,500Add
      net losses (income) attributable to the non-controlling
      interests:Lubin
                  
                  
                  1,106
                  
                  
                  
                  799BTH
      Joint Venture
                  
                  
                  274
                  
                  
                  
                  (169
                  )Net
      income attributable to Umami stockholders
                  
                  $
                  441
                  
                  
                  $
                  2,130Basic
      and diluted net income per share attributable to Umami
      stockholders
                  
                  $
                  0.01
                  
                  
                  $
                  0.07Weighted-average
      shares outstanding, basic and diluted
                  
                  
                  30,042
                  
                  
                  
                  30,000





The
accompanying notes are an integral part of these Consolidated Financial
Statements.





F-3





UMAMI SUSTAINABLE SEAFOOD
INC.
 (formerly
Lions Gate Lighting Corp.)


CONSOLIDATED
STATEMENTS OF EQUITY


(in
thousands)




Common
      Stock
                            
                            
                            AdditionalPaid-InCapital
                            
                            
                            Retained
      Earnings
                            
                            
                            AccumulatedCurrencyTranslationAdjustments
                            
                            
                            TotalUmamiStockholders’Equity
                            
                            
                            Non-Controlling
                              Interest
      inVIE
                            
                            TotalEquityShares
                            
                            
                            Amount
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            Lubin
                            
                            
                            BTHEquity
      July 1, 2008
                            
                            
                            30,000
                            
                            
                            $
                            30
                            
                            
                            $
                            (26
                            )
                            
                            $
                            4,943
                            
                            
                            $
                            5,023
                            
                            
                            $
                            9,970
                            
                            
                            $
                            (100
                            )
                            
                            $
                            257
                            
                            
                            $
                            10,127Transfer
      from non-controlling interests
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,138
                            
                            
                            
                            1,138Distribution
      to non-controlling interest
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (188
                            )
                            
                            
                            (188
                            )Comprehensive
      income:Net
      income (loss)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            2,130
                            
                            
                            
                            
                            
                            
                            
                            2,130
                            
                            
                            
                            (799
                            )
                            
                            
                            169
                            
                            
                            
                            1,500Translation
      adjustments
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (1,057
                            )
                            
                            
                            (1,057
                            )
                            
                            
                            (10
                            )
                            
                            
                            (2
                            )
                            
                            
                            (1,069
                            )Total
      comprehensive income:
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            1,073
                            
                            
                            
                            (809
                            )
                            
                            
                            167
                            
                            
                            
                            431Equity
      June 30, 2009
                            
                            
                            30,000
                            
                            
                            
                            30
                            
                            
                            
                            (26
                            )
                            
                            
                            7,073
                            
                            
                            
                            3,966
                            
                            
                            
                            11,043
                            
                            
                            
                            (909
                            )
                            
                            
                            1,374
                            
                            
                            
                            11,508Shares
      issued for recapitalization on June 30, 2010
                            
                            
                            7,450
                            
                            
                            
                            7
                            
                            
                            
                            (7
                            )Issuance
      of common stock and warrants
                            
                            
                            7,811
                            
                            
                            
                            8
                            
                            
                            
                            6,978
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            6,986
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            6,986Reclassification
      of derivative
                              warrant
      liability
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (697
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (697
                            )
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (697
                            )Stock-based
      compensation expense
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            60
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            60
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            60Comprehensive
      income:Net
      income (loss)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            441
                            
                            
                            
                            
                            
                            
                            
                            441
                            
                            
                            
                            (1,106
                            )
                            
                            
                            (274
                            )
                            
                            
                            (939
                            )Translation
      adjustments
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (1,565
                            )
                            
                            
                            (1,565
                            )
                            
                            
                            203
                            
                            
                            
                            (150
                            )
                            
                            
                            (1,512
                            )Total
      comprehensive income (loss)
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            
                            (1,124
                            )
                            
                            
                            (903
                            )
                            
                            
                            (424
                            )
                            
                            
                            (2,451
                            )Equity
      June 30, 2010
                            
                            
                            45,261
                            
                            
                            $
                            45
                            
                            
                            $
                            6,308
                            
                            
                            $
                            7,514
                            
                            
                            $
                            2,401
                            
                            
                            $
                            16,268
                            
                            
                            $
                            (1,812
                            )
                            
                            $
                            950
                            
                            
                            $
                            15,406
  The
accompanying notes are an integral part of these Consolidated Financial
Statements.




F-4





UMAMI SUSTAINABLE SEAFOOD
INC.
 (formerly
Lions Gate Lighting Corp.)


CONSOLIDATED
STATEMENTS OF CASH FLOWS


(in
thousands)





Years EndedJune 30,
                                                                  2010
                                                                
                                                                
                                                                June 30,
                                                                  2009Operating
      activitiesNet
      income (loss)
                                                                
                                                                $
                                                                (939
                                                                )
                                                                
                                                                $
                                                                1,500Adjustments
      to reconcile to net cash used in operating activities:Depreciation
      and amortization
                                                                
                                                                
                                                                1,153
                                                                
                                                                
                                                                
                                                                959Stock-based
      compensation
                                                                
                                                                
                                                                60
                                                                
                                                                
                                                                
                                                                -Deferred
      income tax
                                                                
                                                                
                                                                5
                                                                
                                                                
                                                                
                                                                40Changes
      in assets and liabilities:Accounts
      receivable, trade
                                                                
                                                                
                                                                150
                                                                
                                                                
                                                                
                                                                50Inventories
                                                                
                                                                
                                                                (1,894
                                                                )
                                                                
                                                                
                                                                (3,007
                                                                )Other
      current assets
                                                                
                                                                
                                                                245
                                                                
                                                                
                                                                
                                                                57Accounts
      payable, trade
                                                                
                                                                
                                                                (1,071
                                                                )
                                                                
                                                                
                                                                (6,368
                                                                )Income
      taxes payable
                                                                
                                                                
                                                                (236
                                                                )
                                                                
                                                                
                                                                228Other
      current liabilities
                                                                
                                                                
                                                                224
                                                                
                                                                
                                                                
                                                                1,047Net
      cash used in operating activities
                                                                
                                                                
                                                                (2,303
                                                                )
                                                                
                                                                
                                                                (5,494
                                                                )Investing
      activitiesPurchases
      of fixed assets
                                                                
                                                                
                                                                (2,405
                                                                )
                                                                
                                                                
                                                                (1,561
                                                                )Proceeds
      from sale of equipment
                                                                
                                                                
                                                                8
                                                                
                                                                
                                                                
                                                                95Net
      cash used in investing activities
                                                                
                                                                
                                                                (2,397
                                                                )
                                                                
                                                                
                                                                (1,466
                                                                )Financing
      activitiesDividends
      paid
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                (220
                                                                )Shareholder
      loans
                                                                
                                                                
                                                                11,790
                                                                
                                                                
                                                                
                                                                -Repayments
      of long-term liabilities
                                                                
                                                                
                                                                (19
                                                                )
                                                                
                                                                
                                                                (9
                                                                )Repayments
      of shareholder loans
                                                                
                                                                
                                                                (12,572
                                                                )
                                                                
                                                                
                                                                (32
                                                                )Borrowings
                                                                
                                                                
                                                                24,151
                                                                
                                                                
                                                                
                                                                11,080Repayments
      of borrowings
                                                                
                                                                
                                                                (21,927
                                                                )
                                                                
                                                                
                                                                (5,000
                                                                )Repayment
      of accounts payable to related parties
                                                                
                                                                
                                                                (3,200
                                                                )
                                                                
                                                                
                                                                -Escrow
      deposit in connection with letter of credit
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                (83
                                                                )Proceeds
      on the issuance of common stock and warrants
                                                                
                                                                
                                                                5,351
                                                                
                                                                
                                                                
                                                                -Net
      cash provided by financing activities
                                                                
                                                                
                                                                3,574
                                                                
                                                                
                                                                
                                                                5,736Subtotal
                                                                
                                                                
                                                                (1126
                                                                )
                                                                
                                                                
                                                                (1,224
                                                                )Effects
      of exchange rate changes on the balances of cash held in foreign
      currencies
                                                                
                                                                
                                                                (80
                                                                )
                                                                
                                                                
                                                                (375
                                                                )Cash
      and cash equivalents at beginning of year
                                                                
                                                                
                                                                1,421
                                                                
                                                                
                                                                
                                                                3,020Cash
      and cash equivalents at end of year
                                                                
                                                                $
                                                                215
                                                                
                                                                
                                                                $
                                                                1,421Supplemental
      Cash Flow InformationCash
      paid during the period for:Interest
                                                                
                                                                
                                                                956
                                                                
                                                                
                                                                
                                                                610Income
      taxes
                                                                
                                                                
                                                                691
                                                                
                                                                
                                                                
                                                                314Non
      cash financing activities:BTH
      livestock contribution to Joint Venture
                                                                
                                                                
                                                                -
                                                                
                                                                
                                                                
                                                                1,138New
      lease of capital equipment
                                                                
                                                                
                                                                34
                                                                
                                                                
                                                                
                                                                -Advance
      received by related party
                                                                
                                                                
                                                                5,000
                                                                
                                                                
                                                                
                                                                -Equity
      proceeds received by escrow agent
                                                                
                                                                
                                                                1,635
                                                                
                                                                
                                                                
                                                                -





The
accompanying notes are an integral part of these Consolidated Financial
Statements.





F-5




UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




1.
            Description
      of business




Umami
Sustainable Seafood Inc. (Umami or Company) is one of the global leaders in the
Northern and Pacific Bluefin Tuna industry. Umami has two subsidiaries, Bluefin
Acquisition Group Inc. (Bluefin) and Kali Tuna d.o.o (Kali Tuna). In 2005, Kali
Tuna, a limited liability company organized under the laws of the Republic of
Croatia, was acquired by Atlantis Group hf (Atlantis). In March 2010, Atlantis
created Bluefin, a New York based holding company and wholly owned subsidiary of
Atlantis, for the purpose of holding the shares of Kali Tuna.
 
 Kali Tuna
is incorporated as a limited liability company and operates in the Republic of
Croatia. The Company ́s core business activity is farming and selling Bluefin
Tuna. The Company farms two different types of Bluefin Tuna: Mediterranean tuna
and Adriatic tuna. The production is seasonal as tuna is caught mostly during
May and June. Mediterranean tuna has an average farming period of six months and
Adriatic tuna requires a farming period between 1.5 years and 3 years. Most of
Kali Tuna’s sales transactions occur during the winter months, November through
February.
 
 Lions
Gate Lighting Corp. (Lions Gate) was incorporated on May 2, 2005 in the state of
Nevada.  Lions Gate was a shell company from August 31, 2007 until
June 30, 2010, when the reverse merger described below occurred.
 
 On May 3,
2010, a share exchange agreement was entered into among Lions Gate, Kali Tuna,
Bluefin and Atlantis, pursuant to which Lions Gate received from Atlantis on
June 30, 2010, all of the issued and outstanding shares of Bluefin in
consideration for the issuance to Atlantis of 30,000,000 shares of its common
stock resulting in a change of control of Lions Gate. As a result of this
transaction (Share Exchange), Kali Tuna became the indirect wholly owned
subsidiary of Lions Gate. Immediately prior to the Share Exchange, Lions Gate
divested its wholly-owned subsidiary, LG Lighting Corp., in consideration for
the satisfaction of debt owed to affiliated parties.
 
 The
acquisition was accounted for as a recapitalization effected by a reverse
merger, wherein Bluefin and Kali Tuna were considered the acquirer for
accounting and financial reporting purposes.  Because of Lions Gate’s
status as a shell company prior to the completion of the Share Exchange, Kali
Tuna is deemed to be the surviving entity for accounting purposes. All the
assets and liabilities of Kali Tuna were carried forward at historical cost and
no goodwill or intangible assets were recorded. The equity section of the
balance sheet and earnings per share of Kali Tuna were retroactively restated to
reflect the effect of the exchange ratio established in the merger
agreement.  Costs of $1.3 million related to the recapitalization
were charged to selling, general and administrative expenses in the year ended
June 30, 2010.
 
 As a
result of the Share Exchange, Lions Gate ceased to be a shell company as such
term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of
1934, as amended. Further,  Lions Gate’s fiscal year end has been
changed from February 28 to Kali Tuna’s fiscal year end, June 30.
 
 Simultaneously
with completion of the Share Exchange on June 30, 2010, the Company completed a
private placement with a group of accredited investors and issued 7.3 million
units, with each unit consisting of one share of common stock and a five-year
warrant to purchase 0.2 shares of common stock at $2.00 per share. Each unit was
issued for $1.00, resulting in gross proceeds of $7.3 million.  As
compensation for their services, the Company issued 0.5 million shares of stock
and 0.7 million additional whole-share five-year warrants to purchase
shares of its common stock at $2.00 per share to two firms who acted as
placement agents for the private placement.  In addition, the Company
incurred cash costs of $0.3 million resulting in net proceeds of $7.0
million that have been recorded as common stock and additional paid-in
capital.
 
 Upon the
completion of the Share Exchange, the Company issued one million three-year
warrants to purchase shares of its common stock at $1.00 to an investor in the
private placement, in order to replace an obligation to Atlantis as
described in Note 12.
 
 On August
20, 2010, Lions Gate changed its name to Umami Sustainable Seafood
Inc.


2.
            Significant
      accounting policies





Basis
of presentation





The
consolidated financial statements of Umami and its wholly-owned subsidiaries
have been prepared in accordance with accounting principles generally accepted
in the United States of America (US GAAP). All significant intercompany accounts
and transactions have been eliminated.





Kali
Tuna’s transactions and balances have been measured in Croatian Kunas (HRK), its
functional currency, and its financial statements have been translated into
United States dollars (USD), which is the reporting currency of the
Company.





All
amounts are stated in thousands of USD, unless indicated otherwise.





Transactions
in foreign currencies are initially recorded at the rates of exchange prevailing
on the dates of the transactions. Assets and liabilities are translated at the
rates prevailing on each balance sheet date. Revenue and expenses are translated
at average exchange rates in effect during the period. The results of
transaction gains and losses are reflected in the Statements of Operations.
Equity is translated at historical rates and the resulting translation
adjustments are reflected as accumulated other comprehensive
income.





Accounting
estimates





The
preparation of financial statements in conformity with US GAAP requires that
management make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the
reporting period. Management exercises significant judgment in estimating both
the quantities and the fair value of tuna inventories. Actual results may
differ from those estimates.





Basis
of consolidation





Kali Tuna
has had relationships, through common control and various business transactions
(renting of ships, buying and farming of live tuna) with two companies, Kali
Tuna Trgovina d.o.o. (KTT) and MB Lubin d.o.o. (Lubin). Lubin is owned by Mr.
Dino Vidov, a manager for Kali Tuna; however, it is controlled by
Umami.





F-6




UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Kali Tuna
owns a 50% interest in KTT. The remaining 50% interest in KTT is owned by
Bluefin Tuna Hellas (BTH). In accordance with its joint venture agreement with
BTH, Kali Tuna historically sold tuna inventory to KTT at its cost, and KTT in
turn sold the tuna to unrelated third parties. However, as a result of the tax
contingency matter described in Note 13,
Kali Tuna and BTH modified their joint venture agreement during the year ended
June 30, 2009 so that the joint venture activity is conducted entirely within
Kali Tuna rather than through KTT. As more fully described in Notes 10
and 12,
BTH continued to provide financing for the joint venture activities and
participate in the profits derived therefrom. The BTH share of profits or losses
from the joint venture for each period has been reflected as a
noncontrolling  interest in these consolidated financial statements
and described herein as “BTH Joint Venture”.





The
fiscal year of KTT is from May 1 to April 30. Therefore, the difference in
fiscal year has no material effects on the results reported in the consolidated
financial statements.





The
Company has determined that KTT and Lubin are variable interest entities of
which Kali Tuna is the primary beneficiary. These companies are therefore
consolidated in Kali Tuna's financial statements.





In
response to revised guidance from the Financial Accounting Standards Board
(FASB) concerning presentation of ownership interests in consolidated entities
held by parties other than the reporting entity, the Company has modified its
presentation to reflect in the accompanying consolidated financial statements
the equity in the consolidated variable interest entities and their share of
reported net losses as amounts attributable to noncontrolling interests. Amounts
previously reported as of June 30, 2009 as minority interest of $3 thousand and
related party liabilities to BTH of $1.4 million have been restated and are
now reflected within the equity section of the consolidated balance sheet as
noncontrolling interest in VIE- BTH Joint Venture. Further, the following
amounts have been restated for the year ended June 30, 2009:





Consolidated
                    Net Income
                  
                  
                  Total
                    Comprehensive
                    IncomeAs
      previously reported
                  
                  $
                  1,331
                  
                  
                  $
                  264Attributable
      to noncontrolling interest held by BTH
                  
                  
                  169
                  
                  
                  
                  167As
      restated
                  
                  $
                  1,500
                  
                  
                  $
                  431





Earnings
per share





Basic
earnings per share is computed by dividing net income attributable
to Umami stockholders bythe weighted average number of common shares
outstanding in each year. Diluted earnings per share is computed by dividing net
income attributable to Umami stockholders by the weighted average
number of common shares outstanding plus any shares that would be issued upon
exercise of outstanding options and warrants. However, for the years ended
June 30, 2010 and 2009, outstanding options and warrants were excluded from the
calculation of weighted average shares because their inclusion would have been
anti-dilutive.





Risk
management





The
Company is exposed to financial risks arising from changes in tuna prices. The
Company does not anticipate that tuna prices will decline significantly in the
foreseeable future and, therefore, has not entered into derivative or other
contracts to manage the risk of a decline in tuna prices. The Company reviews
its outlook for tuna prices regularly in considering the need for active
financial risk management.





Revenue
recognition





Revenue
is recognized when tuna inventory is delivered and the Company has transferred
to the buyer the significant risks and rewards of ownership. Revenue is
presented net of value added taxes collected.





Fair
value of financial instruments





The
carrying value of the Company‘s accounts receivable, advances, short term
borrowings and accounts payable approximates fair value because of the
short-term maturity of these instruments. The Company does not hold any
financial instruments for trading purposes.





Leases





Leases
are classified as capital leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other
leases are classified as operating leases. Assets held under capital leases are
recognized as assets of the Company at their fair value at the inception of the
lease or, if lower, at the present value of the minimum lease payments. The
corresponding liabilities are included in the balance sheet as obligations under
capital leases.




Long-lived
assets
 
 The
Company reviews its long-lived assets for possible impairment whenever events or
changes in circumstances indicate the carrying amount of an asset may not be
recoverable. An impairment loss would be recognized when estimated future cash
flows expected to result from the use of the asset and its eventual disposition
are less than its carrying amount. The Company has identified no such impairment
losses as of June 30, 2010.
 
 Income
taxes
 
 Deferred
income taxes are provided under the liability method and reflect the net tax
effects of temporary differences between the tax bases of assets and liabilities
and their reported amounts in the consolidated financial statements, using the
enacted tax rates expected to be in effect when those differences reverse. The
Company establishes valuation allowances when the realization of specific
deferred tax assets is subject to uncertainty.




F-7


UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




Property
and equipment





Property
and equipment are stated at cost and depreciated over the estimated useful lives
of the related assets, which generally range from 2 to 50 years, using the
straight line method. Maintenance and repairs, which do not extend asset lives,
are expensed as incurred. The gain or loss arising on the disposal or retirement
of an item of property and equipment is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognized in profit or loss.





Inventories





Inventories
consist primarily of live tuna stock that Kali Tuna farms until the tuna reaches
desirable market size. Management systematically monitors the size, growth and
growth rate of the tuna to estimate the quantity at each balance sheet date.
Live stock inventories are stated at the lower of cost or market value using the
average cost method. Inventories of fish feed and supplies are stated at the
lower of cost or market, using the average cost method.





Management
periodically reviews inventory balances and purchase commitments to estimate if
inventories will be sold at amounts (net of estimated selling costs) less than
carrying value. If expected net realizable value is less than carrying value,
the Company adjusts its inventory balances through a charge to cost of goods
sold.




Trade
accounts receivable





Trade
accounts receivable represents the balance owed to the Company by its customers
in connection with sales transactions. An allowance for uncollectible accounts
is determined by management based on a review of the Company’s accounts, with
consideration of historical losses, industry circumstances and general economic
conditions. Accounts are charged against the allowance when all attempts to
collect have failed.





Cash
and cash equivalents





For
purposes of the statements of cash flows, the Company considers all highly
liquid cash investments that mature in three months or less when purchased, to
be cash equivalents. The Company’s bank deposits are generally not covered by
deposit insurance.




Accounting
for Employee Stock Options
 
 Stock-based
compensation cost is estimated at the grant date based on the fair value of the
award, and the cost is recognized as expense ratably over the vesting period.
Determining the fair value model to use requires judgment. Determining the
assumptions that enter into the model is highly subjective and also requires
judgment. The significant assumptions include long-term projections regarding
stock price volatility, expected term of the awards, interest rates and dividend
yields. The Company uses the Black-Scholes model for estimating the fair value
of stock options. Since the Company has no prior trading history, expected
volatility is estimated based on the historical volatility of similar companies
in the same industry as the Company. The expected term of awards granted is
estimated based on the minimum vesting period of the awards since there is no
historical exercise behavior. The risk-free interest rate is estimated based
upon rates for long-term U.S. Treasury securities. The Company does not
presently pay dividends.


Accounting
for Derivative Warrant Liabilities
 
 As
described above, the Company’s reporting currency is the US dollar and its
functional currency is the Croatian Kuna, as virtually all current operations
are in Croatia. Capital raising efforts are conducted primarily in US dollars
and the Company has and will continue to issue warrants to purchase common
shares at prices denominated in US dollars.
 
 The fact
that the exercise prices of the warrants are not denominated in the functional
currency requires that the warrants be considered derivatives and recorded at
their estimated fair value as liabilities.  As of each reporting date,
the estimated fair value of the warrants that remain outstanding will be
re-assessed and the recorded liabilities will be adjusted.  If the
warrants increase in fair value, the increase will be shown as an expense in the
income statement and if the warrants decrease in fair value, a gain will be
recorded for such decrease.
 
 Future
increases in the share value of the Company’s common stock will increase the
value of the outstanding warrants.  Accordingly, during periods when
the share price increases, expenses will be recorded related to the warrant
liabilities which may be larger than the operating income of the
Company.  Conversely, during periods when the share price decreases,
gains will be recorded related to the warrant liabilities which may bear no
relationship to the operating income or loss of the Company.  Such
gains and losses will not be tax-effected.
 
 The
warrant liabilities will not require the use of cash in order to be
settled.  The warrant liabilities will remain outstanding until i) the
warrants are exercised, ii) the warrants expire unexercised or iii) the
Company’s functional currency becomes the US dollar.
 
 If the
warrants are exercised, cash will be received for the exercise price, net of any
applicable placement agent costs, and recorded as increases to common stock and
additional paid in capital will be recorded equivalent to the total of net
cash proceeds received and the value of the warrants immediately prior to
exercise.  If the warrants expire unexercised or in the event the
Company’s functional currency becomes the US dollar, the Company will reclassify
the recorded liability to stockholders’ equity, after first adjusting its fair
value and recording a gain or loss on the income statement.





Reclassifications





Certain
items in the 2009 financial statement have been reclassified to conform with the
2010 presentation. With the exception of the item described above under the
heading “Basis of consolidation”, there was no effect on previously reported
consolidated net income or equity.





Recent
Accounting Pronouncements





In June
2009, the FASB amended the accounting guidance for the consolidation of variable
interest entities. This amendment revised the evaluation criteria to identify
the primary beneficiary of a variable interest entity. Additionally, this
amendment requires ongoing reassessments of whether an enterprise is the primary
beneficiary of the variable interest entity. In December 2009, the FASB amended
consolidation guidance previously issued in June to eliminate the quantitative
approach previously required for determining the primary beneficiary of a
variable interest entity, among other changes.





In
January 2010, the FASB issued new accounting guidance that requires new
disclosures related to fair value measurements. The new guidance requires
expanded disclosures related to transfers between Level 1 and 2 activities
and a gross presentation for Level 3 activity. The new accounting guidance is
effective for fiscal years and interim periods beginning after December 15,
2009, except for the new disclosures related to Level 3 activities, which
are effective for fiscal years beginning after December 15, 2010 and for
interim periods within those years. The new guidance was effective in the third
quarter of fiscal year 2010 for Level 1 and Level 2 activities but disclosures
related to Level 3 activities, will not be effective until the first quarter of
fiscal year 2012.




As the
Company does not have any assets or liabilities that are categorized in Levels 1
and 2, the adoption of this guidance will have no impact on our financial
statements until the first quarter of fiscal year 2012.




F-8




UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




3.
            Significant
      concentrations





Sales of
tuna to two customers in Japan accounted for approximately 99.1% of the
Company's net revenue for the year ended June 30, 2010, with one customer
accounting for 82.6% and the other for 16.5%. For the year ended June 30, 2009,
sales to three customers in Japan accounted for approximately 99.5% of the
Company's net revenue.


4.
              Inventories
 
 Inventories
are comprised as follows as of June 30, 2010 and 2009:
 
 2010
                    
                    
                    2009Live
      stock inventories:Adriatic
      tuna0-30
      kg.
                    
                    $
                    7,132
                    
                    
                    $
                    10,58730-60
      kg.
                    
                    
                    8,858
                    
                    
                    
                    4,05260+
      kg.
                    
                    
                    720
                    
                    
                    
                    1,901Mediterranean
      tuna + 60kg.
                    
                    
                    2,354
                    
                    
                    
                    2,12819,064
                    
                    
                    
                    18,668Fish
      feed and supplies
                    
                    
                    703
                    
                    
                    
                    1,656Total
      inventories
                    
                    $
                    19,767
                    
                    
                    $
                    20,324
 
 Inventories
are stated at the lower of cost or net realizable value. Cost is calculated on a
weighted average basis and includes all costs to acquire and to bring the
inventories to their present location and condition. International regulations
prohibit the sale for consumption of tuna under 30kg.   The Company
evaluates the net realizable value of its inventories on a regular basis and
records a provision for loss to reduce the computed weighted average cost
if it exceeds the net realizable value.
 
 The fair
value of live tuna stock inventories at June 30, 2010 and June 30, 2009 is
estimated at $26.1 millionand $22.2 million,
respectively. The fair value of live tuna stock that were caught in the 2010
fiscal year is estimated to equal its cost. The fair value of inventory that was
caught in prior years is estimated based upon the market prices that an
unrelated third party would be willing to pay for the inventory, less estimated
selling costs.




5.
              Other
      current assets
 
 The
Company’s other current assets as of June 30, 2010 and 2009 were comprised as
follows:
 
 2010
                      
                      
                      2009Refundable
      value added tax
                      
                      $
                      463
                      
                      
                      $
                      736Refundable
      income taxes
                      
                      
                      16
                      
                      
                      
                      141Other
      receivables
                      
                      
                      278
                      
                      
                      
                      130Prepaid
      expenses
                      
                      
                      24
                      
                      
                      
                      282Escrow
      balance related to letter of credit
                      
                      
                      -
                      
                      
                      
                      85$
                      781
                      
                      
                      $
                      1,374




6.
              Property
      and equipment
 
 The
Company ́s property and equipment as of June 30, 2010 and 2009 were as
follows:
 
 2010
                    
                    
                    2009Cost:Land
                    
                    $
                    431
                    
                    
                    $
                    468Buildings
                    
                    
                    2,495
                    
                    
                    
                    2833Vessels
                    
                    
                    8,143
                    
                    
                    
                    7,315Machinery
      and equipment
                    
                    
                    6,884
                    
                    
                    
                    6,043Fixtures
      and office equipment
                    
                    
                    110
                    
                    
                    
                    121Construction
      in progress
                    
                    
                    34
                    
                    
                    
                    1,41418,097
                    
                    
                    
                    18,194Less
      accumulated depreciation:Buildings
                    
                    
                    918
                    
                    
                    
                    893Vessels
                    
                    
                    3,982
                    
                    
                    
                    3,972Machinery
      and equipment
                    
                    
                    4,428
                    
                    
                    
                    4,670Fixtures
      and office equipment
                    
                    
                    97
                    
                    
                    
                    989,425
                    
                    
                    
                    9,633Property
      and equipment, net
                    
                    $
                    8,672
                    
                    
                    $
                    8,561


F-9





UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS




7.
            Borrowings





The
Company's short-term borrowings as of June 30, 2010 and 2009 were comprised as
follows:





Facility
                        
                        Interest rate
                        
                        Effective rate
                          @ June 30,
                          2010
                        
                        
                        2010
                        
                        
                        2009Erste&Steiermaerkische
      bank d.d.
                        
                        HRK
      19,240,000
                        
                        5%
                        
                        
                        5.000
                        %
                        
                        $
                        3,258
                        
                        
                        $
                        3,705Erste&Steiermaerkische
      bank d.d.
                        
                        HRK
      30,000,000
                        
                        5%
                        
                        
                        5.000
                        %
                        
                        
                        5,080
                        
                        
                        
                        5,777Erste&Steiermaerkische
      bank d.d.
                        
                        EUR
      1,375,000
                        
                        EURIBOR
      +7%
                        
                        
                        7.699
                        %
                        
                        
                        1,675
                        
                        
                        
                        1,930Erste&Steiermaerkische
      bank d.d.
                        
                        JPY
      180,000,000
                        
                        3M
      JPY LIBOR+6.5%
                        
                        
                        6.746
                        %
                        
                        
                        2,025
                        
                        
                        
                        -Erste
      Factoring d.o.o.
                        
                        HRK
      3,400,000
                        
                        3M
      CHF LIBOR+5.75%
                        
                        
                        N/A
                        
                        
                        
                        -
                        
                        
                        
                        655Erste&Steiermaerkische
      bank d.d.
                        
                        CHF
      707,000
                        
                        1M
      LIBOR +7%
                        
                        
                        7.108
                        %
                        
                        
                        649
                        
                        
                        
                        -Current
      maturities of capital lease obligations
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        
                        13
                        
                        
                        
                        9$
                        12,700
                        
                        
                        $
                        12,076





Kali Tuna
has a credit facility with Erste&Steiermaerkische bank. d.d. that consists
of four revolving credit lines amounting to HRK 19,240,000 ($3.3 million), HRK
30,000,000 ($5.1 million), EUR 1,375,000 ($1.7 million), and JPY 180,000,000
($2.0 million) which mature on August 15, 2010, September 15, 2010, March 1,
2011 and March 1, 2011, respectively. Subsequent to June 30, 2010 the two notes
that matured in August and September, 2010 were replaced on similar
terms.




Lubin has
a credit facility with Erste&Steiermaerkische bank. d.d. amounting to CHF
707,000 ($.6 million) which matures on July 1, 2010. Subsequent to June 30, 2010
this note matured and was replaced on similar terms.









All of
the Company's fixed assets are pledged to the bank in connection with these
loans. The loan from Erste&Steiermaerkische bank. d.d. for 1,375,000 Euros
is collateralized by the inventory of the business.




8.
              Obligations
      under capital leases
 
 The
Company leases equipment under arrangements classified as capital
leases, and had the following obligations as of June 30, 2010 and
2009:
  2010
                      
                      
                      2009Total
      obligations under capital leases
                      
                      $
                      41
                      
                      
                      $
                      28Current
      maturities (classified as borrowings within the consolidated balance
      sheets)
                      
                      
                      (13
                      )
                      
                      
                      (9
                      )Non-current
      obligations
                      
                      $
                      28
                      
                      
                      $
                      19Aggregated
      annual maturities under capital leases as of June 30, 2010 were as
       follows:Year
      ending June 30, 2011
                      
                      $
                      15Year
      ending June 30, 2012
                      
                      
                      15Year
      ending June 30, 2013
                      
                      
                      7Year
      ending June 30, 2014
                      
                      
                      7Year
      ending June 30, 2015
                      
                      
                      246Less
      interest
                      
                      
                      (5
                      )Total
      obligations under capital leases
                      
                      $
                      41


F-10




UMAMI
SUSTAINABLE SEAFOOD INC.
 (formerly
Lions Gate Lighting Corp.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


9.
              Income
      taxes
 
 Income
tax expense for the years ended June 30, 2010 and 2009 is comprised as
follows:
 
 2010
                    
                    
                    2009Current
      expense
                    
                    $
                    (528
                    )
                    
                    $
                    (470
                    )Deferred
      benefit (expense)
                    
                    
                    66
                    
                    
                    
                    (40
                    )Total
      income tax provision
                    
                    $
                    (462
                    )
                    
                    $
                    (510
                    )
 
 The
Company’s effective tax rates for the years ended June 30, 2010 and 2009 are
higher than the Croatian statutory rate of 20% primarily because the potential
future tax benefits from Umami’s and Lubin’s loss carryforwards have been fully
offset by valuation allowances as of each balance sheet date.
 
 Deferred
tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statements carrying amounts of
existing assets and liabilities and their respective tax bases. 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 as income in the period that includes the
enactment date. A valuation allowance is provided for the amount of deferred tax
assets that, based on available evidence, are not expected to be
realized.
 
 Deferred
tax liabilities and assets have been recognized as of June 30, 2010 and 2009 in
the following amounts based upon the indicated temporary
differences:
 
 2010
                            
                            
                            2009Inventories
                            
                            $
                            (135
                            )
                            
                            $
                            (210
                            )Tax
      loss carryforwards
                            
                            
                            859
                            
                            
                            
                            150Other
      items
                            
                            
                            -
                            
                            
                            
                            9Valuation
      allowance
                            
                            
                            (859
                            )
                            
                            
                            (150
                            )Net
      deferred income tax liability
                            
                            $
                            (135
                            )
                            
                            $
                            (201
                            )
 
 At June
30, 2010, the Company has tax loss carryforwards available for offset against
future taxable income as follows:
 
 Available
      through June 30, 2014 related to MB Lubin
                    
                    $
                    752Available
      through June 30, 2015 related to MB Lubin
                    
                    
                    877Available
      through June 30, 2017 related to Umami
                    
                    
                    1,569


F-11




UMAMI
SUSTAINABLE SEAFOOD INC.
 (formerly
Lions Gate Lighting Corp.)
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


10.
                      Variable
      interest entities
 
 The
company has determined that Kali Tuna and its affiliates provided the majority
of financial support to Lubin and KTT through various sources including the
purchase and sale of inventory, rental income and unsecured loans. In addition,
as of June 30, 2010, Kali Tuna was a guarantor for repayment of Lubin ́s note
payable to Erste&Steiermaerkische bank d.d. in the amount of CHF 707,000
($.6 million).
  Financial
support provided by Kali Tuna and its affiliates to Lubin and KTT as of June 30,
2010 and 2009 and during the years then ended follows:
 
 Lubin
                            
                            
                            KTT2010
                            
                            
                            2009
                            
                            
                            2010
                            
                            
                            2009Rental
      income and sale of inventory
                            
                            $
                            2,402
                            
                            
                            $
                            1,860
                            
                            
                            $
                            -
                            
                            
                            $
                            -Purchase
      of inventory
                            
                            
                            48
                            
                            
                            
                            26
                            
                            
                            
                            -
                            
                            
                            
                            -Unsecured
      loans
                            
                            
                            6,028
                            
                            
                            
                            5,597
                            
                            
                            
                            -
                            
                            
                            
                            61
  Selected
information from the balance sheets of Lubin and KTT as of June 30, 2010 and
2009, and the results of operations for the years then ended
follow:
 
 Lubin
                            
                            
                            KTT2010
                            
                            
                            2009
                            
                            
                            2010
                            
                            
                            2009Total
      assets
                            
                            $
                            5,123
                            
                            
                            $
                            5,835
                            
                            
                            $
                            51
                            
                            
                            $
                            67Total
      liabilities
                            
                            
                            7,308
                            
                            
                            
                            6,744
                            
                            
                            
                            -
                            
                            
                            
                            1Stockholders’
      equity
                            
                            
                            (2,185
                            )
                            
                            
                            (909
                            )
                            
                            
                            51
                            
                            
                            
                            66Net
      sales
                            
                            
                            2,518
                            
                            
                            
                            1,623
                            
                            
                            
                            -
                            
                            
                            
                            -Net
      income (loss)
                            
                            
                            (1,566
                            )
                            
                            
                            (799
                            )
                            
                            
                            (8
                            )
                            
                            
                            1
  As
described in Note 2, the BTH joint venture activities previously conducted
through KTT were, beginning during the year ended June 30, 2009, conducted
within Kali Tuna. As described in Note 12,
BTH contributed livestock to the joint venture during 2009 and its 50%
share in the profits generated has been reflected as a noncontrolling interest
within these consolidated financial statements. Selected balance sheet
information related to these activities as of June 30, 2010 and 2009, and the
results of its operations for the years then ended were as follows:
  2010
                        
                        
                        2009Total
      assets
                        
                        $
                        2,354
                        
                        
                        $
                        2,128Total
      liabilities
                        
                        
                        -
                        
                        
                        
                        -Venturers’
      equity
                        
                        
                        2,354
                        
                        
                        
                        2,128Net
      sales
                        
                        
                        189
                        
                        
                        
                        3,844Net
      income (loss)
                        
                        
                        (456
                        )
                        
                        
                        336
  11.
                          Stock
      options and warrants
  The
Company does not currently have a formal stock option plan. On June 30, 2010,
stock options were granted to two employees to purchase 1,100,000 shares of
common stock of the Company at $1.00 per share. Of these options, 183,333 vested
immediately, with an additional 183,333 shares vesting on the first anniversary
of the grant. An additional 366,667 shares will vest on each of the second and
third anniversary dates of the grant.
 
 The fair
value of each option award is estimated on the date of grant using the
Black-Scholes option valuation model, and the following
assumptions:
 
 Average
      risk-free interest rate
                                            
                                            
                                            1.9
                                            %Expected
      dividend yield
                                            
                                            NoneExpected
      volatility
                                            
                                            
                                            100
                                            %Expected
      term (years)
                                            
                                            
                                            3.0
 
 The
risk-free interest rate is estimated based upon rates for long-term U.S.
Treasury securities. Since the Company has no prior trading history, expected
volatility is estimated based on the historical volatility of similar companies
in the same industry as the Company. The expected term of awards granted is
estimated based on the minimum vesting period of the awards since there is no
historical exercise behavior.
 
 Stock
option activity during the year ended June 30, 2010:
 
 Shares
                                                
                                                
                                                ExercisePrice
                                                
                                                Remaining
                                                  Contractual
                                                  TermOutstanding
      as of June 30, 2009
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Options
      granted
                                                
                                                
                                                1,100,000
                                                
                                                
                                                $
                                                1.00Options
      exercised
                                                
                                                
                                                -Options
      forfeited
                                                
                                                
                                                -Outstanding
      as of June 30, 2010
                                                
                                                
                                                1,100,000
                                                
                                                
                                                $
                                                1.00
                                                
                                                5.0
      yearsExercisable
      as of June 30, 2010
                                                
                                                
                                                183,333
                                                
                                                
                                                $
                                                1.00
                                                
                                                5.0
      yearsVested
      as of June 30, 2010
                                                
                                                
                                                183,333
                                                
                                                
                                                $
                                                1.00
                                                
                                                5.0
      yearsNonvested
      as of June 30, 2010
                                                
                                                
                                                916,667
                                                
                                                
                                                $
                                                1.00
                                                
                                                5.0
      years
 
 The
intrinsic value of stock options is calculated as the amount by which the fair
value of the Company’s common stock exceeds the exercise price of the option. At
June 30, 2010, there was limited trading of the Company’s stock, so the fair
value was estimated by reference to the 7.3 million share units sold for $1.00
each on June 30, 2010, as described in Note 1. The fair value for each
share and each warrant was estimated using a Black-Scholes pricing model. The
share value was estimated to be $0.96 and the warrant value was estimated to be
$0.04; thus, the exercise price of $1.00 per share is greater than the estimated
fair value of $0.96 and there is zero intrinsic value at June 30,
2010.
 
 The
weighted-average grant-date fair value of options granted during the year ended
June 30, 2010 has been estimated at $0.33 and the total grant-date fair value of
stock options vested during the year has been estimated at $0.1 million.
There was no tax benefit related to the stock based compensation because the
Company has incurred losses in the U.S. and it is not probable that the company
would be able to use any such losses in the future. Stock-based compensation
expense recognized as selling, general and administrative expenses in the
consolidated statement of operations was $0.1 million for the year ended June
30, 2010. As of June 30, 2010, total unrecognized compensation expense related
to stock-based compensation is $0.3 million, which is expected to be recognized
over the remaining vesting period of three years.
  At June
30, 2010, warrants were outstanding as follows in connection with the
transactions described in Note 1:
  Number
                                        
                                        Exercise
      Price
                                        
                                        TermSubscription
      agreements
                                        
                                        
                                        1,460,000
                                        
                                        $
                                        2.00
                                        
                                        
                                        5
      yearsInvestor
      agreement
                                        
                                        
                                        1,000,000
                                        
                                        $
                                        1.00
                                        
                                        
                                        3 yearsPlacement
      agent payment
                                        
                                        
                                        730,000
                                        
                                        $
                                        2.00
                                        
                                        
                                        3 yearsTotal
      warrants at June 30, 2010
                                        
                                        
                                        3,190,000




12.
              Related
      parties
 
 Related
parties are those parties which have influence with the Company, directly or
indirectly, either through common ownership or other relationship.
 
 Related
party transactions during the years ended June 30, 2010 and 2009 were as
follows:
  2010Purchases
      of goods/services from Atlantis, the ultimate parent company of Kali Tuna
      prior to the Share Exchange described in Note 1, and its
      affiliates
                              
                              $
                              1,778
 
 2009Bluefin
      Tuna Hellas,  joint venture partner as described in Note
      2:Sales
      of good/services
                            
                            
                            93Contribution
      of livestock to joint venture
                            
                            
                            1,138
 
 Related
party balances as of June 30, 2010 and 2009 were as follows:
 
 2010
                      
                      
                      2009Accounts
      receivable from related parties – Atlantis and its
    affiliates
                      
                      $
                      424
                      
                      
                      $
                      -Accounts
      payable to related parties:Atlantis
      and its affiliates
                      
                      
                      -
                      
                      
                      
                      3,559Note
      payable to KT DOO Finance Pty. Ltd, Australia, subsidiary of Atlantis, non
      interest bearing (AUD 696,000)
                      
                      
                      -
                      
                      
                      
                      560
  During
the year ended June 30, 2010, Kali Tuna paid $0.1 million to Atlantis for
interest on a loan. No interest was paid in the year ended June 30, 2009. 
The average borrowings outstanding from Atlantis during the year ended June 30,
2010 were $2.7 million.  Additionally, Atlantis has provided loan
guarantees and other credit support through its banking
relationships.
  In
connection with a financing transaction in October 2009 between Atlantis and a
third party, Atlantis granted the third party the right to acquire a 1.82%
equity interest in Kali Tuna for a five-year period for $1 million. In the event
that Kali Tuna completed a merger transaction with a publicly traded shell
company in the United States, the right would be replaced by a three-year
warrant to purchase one million shares of the public company at $1.00 per share.
The warrants were issued to the third party on the date of the Share
Exchange.
  Contemporaneously
with the completion of the Share Exchange, the Company entered into a
sales agency agreement with Atlantis.  Under the terms of the
agreement, Atlantis was granted the exclusive right to sell, on the Company’s
behalf, all of its Northern Bluefin Tuna products into the Japanese market. The
Company will pay to Atlantis a commission of 2% of all net sales proceeds under
the agreement.  The agreement may be terminated at any time by either
party upon six months prior notice. In addition, it may be terminated
immediately by the Company if Atlantis defaults in its obligations under the
agreement following a 21-day notice and cure period.
 Contemporaneously
with the completion of the Share Exchange, the Company entered into a call
option agreement that grants the Company, until December 1, 2010, the right to
purchase from Atlantis the following assets at the prices set forth
below:
 
 Asset
                        
                        Option Exercise PriceThe
      patent and the U.S. ownership rights to Freshtec, a method to treat food,
      fish and meat to improve storage durability of the food being
      treated.  The patent application is pending.
                        
                        $
                        2,300,000Farming
      Concession for up to 1,000 tons stocking rights for for striped sea
      bass, yellow tail tuna and king fish with necessary farming equipments, at
      Todos Santos, Mexico.
                        
                        $
                        1,500,000Factory
      equipment for food processing, packaging and processing using the Freshtec
      method.
                        
                        $
                        1,500,000The
      entire share capital in Havetorsk AS, Mausund, Norway, a Norwegian cod
      farming company.
                        
                        $
                        7,000,000
 
 The
options are exercisable at the Company’s sole discretion and may be exercised as
to each individual asset or all of the listed assets on a combined
basis.




F-12




UMAMI
SUSTAINABLE SEAFOOD INC.


(formerly
Lions Gate Lighting Corp.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





13.
            Commitments
      and contingencies





During
June 2008, the Financial Police of Ministry of Finance of the Republic of
Croatia (FP) concluded an inspection of certain of the Company’s transactions
and alleged the following underpayments of taxes and related
interest:





Underpayment
of value added taxes for calendar year 2006 and related interest, which total
approximately $1.5 million, in connection with sales of tuna inventory by the
Company to its 50%-owned subsidiary, Kali Tuna Trgovina, at its purchase
cost.





Underpayment
of tax on profit for the year ended June 30, 2007 and related interest, which
total approximately $0.1 million, in connection with sales of tuna inventory by
the Company to Atlantis Resources ehf (an Icelandic subsidiary of Atlantis
Group, which was the Company’s ultimate parent).





Any
underpayments that are ultimately upheld at the conclusion of a permitted appeal
process would also be subject to liability for additional interest penalties. In
addition, the Company could potentially be held liable for similar transactions
in subsequent years; as the applicable amounts of additional taxes and interest
for those periods are dependent upon assessment of the Company ́s transactions by
FP, such amounts cannot be reasonably estimated. The
Company filed an appeal to contest these allegations. The claim was dismissed by
the Appellate Body of Ministry of Finance. Dismissal did not terminate the
process, but has obliged the Financial Authorities in Croatia to repeat the
performed procedure, taking into account all facts and proof being proposed and
disclosed by KT in their appeal. Management
expects, based upon the facts and circumstances of the relevant transactions,
that the Company should ultimately prevail and incur no material liability.
Accordingly, the accompanying consolidated financial statements do not reflect any
adjustments related to this contingency.




In March
2010, Kali Tuna purchased certain assets of another Croatian fish farming
business, consisting of farming equipment and about 400 metric tons of live
bluefin tuna, for an aggregate cost of $3.7 million.  Title  was
transferred and payment was made, except in relation to a liability of $0.6
million for about 70 tons out of the total tuna quantity, because the
contract states that the payment does not become due until receipt of legal
documentation proving good title for this 70 tons and because this tuna is not
salable by the Company unless this documentation is available.  The
seller has filed a lawsuit against Kali Tuna to reclaim the disputed 70 tons but
the Company is confident that the suit is without merit and that it will prevail
in this matter.




14.
            Subsequent
      events




Bank borrowings. Subsequent
to June 30, 2010, as described in Note 7, several short-term bank loans matured
and were replaced on similar terms. In addition, during August, 2010, Kali Tuna
received the proceeds of a loan from Volksbank d.d. for $1.9
million.  The loan
matures December 31, 2013 and is payable in quarterly installments of $.1
million beginning March 31, 2011. The terms of the loan call for a variable
interest rate based on 40% at HBOR rate plus 60% at a rate of 5.9%.The
loan is collateralized by certain inventory of the
business.
  Kali Tuna
entered into an agreement on October 7, 2010 with Erste&Steiermaerkische
bank d.d. providing for a 6.7 million Euros ($9.3 million) loan. The loan
matures March 31, 2011, with interest payable monthly based on the three-month
EURIBOR rate plus 5.25%.  The loan is collateralized by the fixed
assets and certain inventory of the business.
  Issuance of
equity. Subsequent to June 30, 2010, the Company issued 1.4 million
units, with each unit consisting of one share of common stock and a five-year
warrant to purchase .2 shares of common stock at $2.00 per share. Each unit was
issued for $1.00, resulting in gross proceeds of $1.4 million. As compensation
for their services, the Company issued 0.1 million shares of stock and 0.1
million additional whole-share five-year warrants to purchase shares of its
common stock at $2.00 per share to two firms who acted as placement agents for
the private placement. The
Company also issued 1 million units, with each unit consisting of one share of
common stock and one warrant to purchase one share of common stock at $1.80 per
share. Each unit was issued for $1.50, resulting in gross proceeds of $1.5
million. The company paid $ .3 million in costs related to the
offering.
 Borrowings from
related party. On September 29, 2010, the Company entered into an
agreement with Atlantis, providing for a $15 million loan facility consisting of
two components: a line of credit for the amount of $9.9 million and a term
loan of $5.1 million. As of October 17, 2010, the total principal balance
advanced under the facility was approximately $15 million, which was used for
the purchase of the initial 33% of Baja and the financing of Baja's operations,
financing Kali Tuna's operations, and for Umami corporate expenses. Funds
advanced under the facility accrue interest at the rate of 1% per month which is
payable monthly. Advances under the facility may be made upon ten day's prior
written notice to Atlantis and are collateralized by a pledge of certain of the
Company's inventory.
  The
facility must be repaid in its entirety by June 30, 2012. At the discretion of
Atlantis, the facility may be terminated and all amounts may be declared due and
payable immediately if Atlantis ceases to be a greater than 50% shareholder
of the Company and Atlantis ceases to act as the Company's exclusive agent for
the sale of the Company's Bluefin tuna into the Japanese market. In addition,
under the terms of the facility, Atlantis has the right to cancel the facility
and demand all outstanding amounts immediately due and payable in the event of a
change of control of the Company.
  Borrowing from
private party. On October 7, 2010, the Company entered into a note and
warrant purchase agreement with a third party lender.  The Company
received gross proceeds of $5 million in exchange for: (i) a note payable of
$2.5 million which matures on March 31, 2011, (ii) a note payable of $3.1
million which matures on March 31, 2012, and (iii) warrants to purchase 3
million shares of the Company's common stock.
 
 Both
notes bear interest at 9% per year.  However, additional interest
expense between $0.3 million and $1.5 million would become due and payable over
the terms of the notes if the Company does not achieve certain EBITDA
thresholds. Further, the interest rate is subject to increase to 13.5% in the
event that (i) certain assets of Kali Tuna or Baja are not pledged to the lender
by November 16, 2011, or (ii) the acquisition of Baja is not completed by
December 16, 2010. Each of the notes may be accelerated if certain events of
default were to occur, including failure to complete the acquisition of Baja by
January 1, 2011 or  failure of the Company to secure sufficient
pledges of the assets of its subsidiaries or Baja prior to December 16,
2010.
 
 The notes
are collateralized by certain assets of the Company, Kali and
Baja.  In addition, the Company has pledged its shares in Bluefin, and
Baja has guaranteed the Company's obligations to the lender.
 
 The
exercise prices for common stock underlying the warrants are $1.50 for 1 million
shares and $1.00 for the remaining 2 million shares.  The exercise
price and number of shares issuable upon exercise of the warrants are subject to
anti-dilution provisions for subsequent issuances of the Company's common stock
at prices below the exercise prices of the warrants.  The lender also
received demand and piggy-back registration rights in connection with the shares
issuable upon exercise of the warrants.
 
 In
connection with this transaction, the Company paid an advisor a fee consisting
of (i) $0.5 million and (ii) warrants to purchase 0.3 million shares of the
Company's common stock, at exercise prices equal to 110%  of those
applicable to the warrants that were issued to the lender, but otherwise on the same
terms and conditions.  The lender also received a closing fee of $25
thousand and was reimbursed for costs of $0.1 million from the gross proceeds.
Additional closing costs of $0.1 million will be paid to the
lender.


F-13
 Baja acquisition.As of
June 30, 2010, Atlantis, the Company’s principal stockholder, had advanced $4.9
million as a deposit toward the purchase price of the anticipated
acquisition by Umami of Baja, S.A. de C.V., a Mexican corporation (Baja)
and its affiliate Oceanic Enterprises, Inc., a California corporation (Oceanic).
Baja owns and operates facilities and equipment in Mexico where it farms Pacific
Northern Bluefin Tuna for sale primarily into the Japanese sushi and sashimi
market.
  On July
20, 2010, Umami acquired 33% of the outstanding common shares of both Baja and
Oceanic in exchange for a cash purchase price of $8 million, consisting of
the advance deposit described above, and an additional amount of $3.1 million,
and an option to acquire substantially all of the remaining outstanding shares
of both entities in exchange for the issuance of 10 million shares of the
Company’s common stock and $10 million of cash.
  On
September 15, 2010, the Company exercised its option to purchase the additional
shares. On September 27, 2010, the share purchase and option agreements were
amended as follows:
  ·
                The closing date for issuance of shares and payment of
      cash required by the option agreement was extended to November 30,
      2010.
 ·
                  Prior
      to November 30, 2010, Baja will be permitted to distribute $2 million
      to certain of its selling shareholders and to repay certain additional
      amounts that have been advanced by those shareholders to fund Baja’s
      working capital needs. As of September 27, 2010, such amounts were
      approximately $10 million.
 ·
                  The
      Company will fund any further deficit in Baja’s cash flows as loans to
      Baja and will be allowed to use proceeds from sales of Baja’s inventory
      and amounts financed using Baja’s assets as collateral for loans to fund
      the above-referenced payments to shareholders and Baja’s operating
      expenses as well as the amount required for the cash option
      payment.


In order
to complete the Baja acquisition, the Company will need to raise
significant  funds in excess of amounts currently
available.  If additional funds cannot be raised on reasonable terms
when needed, the Company may not be able to complete the acquisition of the
remaining 67% of the Baja operation. In the
event that closing does not occur, Umami would remain a 33% stockholder in
Baja.  Any Umami loans remaining would remain a debt of Baja due
to Umami and be repaid through future operating cash flows of
Baja.
 
 The
following unaudited pro forma consolidated balance sheet reflects adjustments to
the Company’s actual financial position assuming the Baja and Oceanic equity
investments were consummated as of June 30, 2010.  The acquisition
price of $8 million is assumed to have been financed using $1.6 million of
available funds remaining from the private placement and $6.4 million in
borrowings from Atlantis under the loan facility disclosed below.
 
 Pro Forma
Consolidated Balance Sheet
 June 30,
2010
 
 Inventories
                        
                        $
                        19,767Other
      current assets
                        
                        
                        1,484Equity
      investments
                        
                        
                        8,000Long
      term assets
                        
                        
                        8,683Total
      assets
                        
                        $
                        37,934Short-term
      borrowings
                        
                        $
                        12,700Borrowings
      from shareholder
                        
                        
                        6,365Other
      current liabilities
                        
                        
                        2,738Long
      term liabilities
                        
                        
                        725Total
      equity
                        
                        
                        15,406Total
      liabilities and equity
                        
                        $
                        37,934
 
 
 The
following unaudited pro forma consolidated statement of operations reflects
adjustments to the Company’s actual results of operations assuming the equity
investments occurred on July 1, 2009. Accordingly, it includes adjustments
to reflect the Company’s proportionate share of the net losses of Baja and
Oceanic ($0.6 million) for the year ended June 30, 2010 and interest expense
($0.8 million) based upon the portion of the acquisition price assumed to have
been financed with proceeds from the Atlantis loan facility.
 
 Pro Forma
Consolidated Statement of Operations
 Year
ended June 30, 2010
 
 Net
      revenue
                        
                        $
                        25,326Cost
      of goods sold
                        
                        
                        (20,074
                        )Gross
      profit
                        
                        
                        5,252Selling,
      general and administrative expenses and other operating
    income
                        
                        
                        (3,048
                        )Operating
      income
                        
                        
                        2,204Loss
      from foreign currency transactions
                        
                        
                        (1,700
                        )Loss
      from equity investments
                        
                        
                        (567
                        )Interest
      income
                        
                        
                        6Interest
      expense
                        
                        
                        (1,794
                        )Loss
      before provision for income taxes
                        
                        
                        (1,851
                        )Income
      tax provision
                        
                        
                        (462
                        )Net
      loss
                        
                        
                        (2,313
                        )Net
      loss attributable to the non-controlling interests
                        
                        
                        1,380Net
      loss attributable to Umami shareholders
                        
                        $
                        (933
                        )Basic
      and diluted net loss per share attributable to Umami
      shareholders
                        
                        $
                        (0.03
                        )Weighted-average
      shares outstanding, basic and diluted
                        
                        
                        30,042
 
 The pro
forma information above is not indicative of what the Company’s consolidated
balance sheet and operating results would have been if the equity investments
had actually taken place on earlier dates indicated. Further, this information
is not indicative of future operating results.
  Termination of
BTH Joint VentureOn September 30, 2010, the Company entered into an
agreement with Bluefin Tuna Hellas S.A. to terminate the BTH joint venture
activities described in Note 10 and to transfer to the Company the 50% interest
owned by BTH in exchange for 1.2 million Euros ($1.6 million), with payment in
two installments on October 15, and October 19, 2010. The termination agreement
also contemplates that BTH will relinquish its 50% interest in KTT in exchange
for consideration equal to the estimated value of that
entity.


F-14