Risk register & failsafes

What kills this venture, and how we survive it.

We are not promising risk-free. We are showing where the risks are, what we are doing about each, and what stops us if a mitigation fails. Three govern major capital commitments — any one negative, we stop.

10risks

Top failure modes published

Probability × blast radius, with mitigation + contingency on every row

12lines

Insurance program

$45–85K Y1 premium budget; specialty broker engagement by Day +30

3KILL

Pre-defined stop conditions

CFIA pre-clearance · BC MWR pre-screen · Costco Ethics (conditional)

The precedent we will not repeat

Berezan Shrimp Co., Langley — closed September 2019

Twenty-two months operational. Same Langley geography. Same species — . An outbreak traced to Texas-imported ended the company, and the event triggered the current IHHNV-source-state import bans. The Berezan post-mortem is on file with our senior lender. Our operating plan is structured around the four failure modes Berezan encountered — each with a specific, named North 49 contingency.

PL biosecurity

Berezan failure: September 2019: IHHNV outbreak traced to Texas-imported postlarvae; the event triggered current CFIA IHHNV-source-state bans.

North 49 contingency: CFIA Form 5670 pre-clearance for American Penaeid SC + Mexican alternate (Maricultura del Pacífico) + Belize tertiary. On-site quarantine raceway with 24/48/72-hour PCR + mortality + DO monitoring before any PL touches production. Domestic Canadian nursery on the Phase 2 roadmap as a strategic moat.

Technology

Berezan failure: Vertical RAS architecture — any single critical failure (chiller, biofilter, oxygenation) put the entire facility at risk.

North 49 contingency: Modular Atarraya Air Shrimp Boxes. 20 independent compartments in Phase 1, 100 in Phase 2. Any single box failure = 5% of capacity at Phase 1, 1% at Phase 2 — not 100%. Sensor-redundant DO at 1Hz; per-box isolation; harvest cycles staggered to absorb downtime.

Labour

Berezan failure: Berezan’s #1 stated failure cause was labour-cost overrun (post-mortem on file with FCC).

North 49 contingency: Lean processing automation Day 1, not retrofitted under cost pressure. $24/hr base wage (above the BC $15–19 baseline) from M-1. VIU paid co-op pipeline starting M-6. Lead Tech cross-trained as deputy Farm Manager — no single-person dependency on the floor. Farm Manager hire by Month -2.

Cloud dependency

Berezan failure: Not a Berezan failure mode in 2019 (their controls were SCADA-only) — but a structural risk inherited from any modern modular-IoT vendor (Atarraya).

North 49 contingency: 72-hour local-mode firmware is a deal-breaker in our Atarraya Master Licence Agreement. Source-code escrow with Iron Mountain Canada or NCC Group. On-prem caching gateway. Local-mode activation procedure within 30 minutes of cloud-down detection; manual oxygen / feed cadence backup SOP.

Top 10 failure modes

The risk register, in full.

Each row names the trigger, our probability bucket, the dollar , the lead indicator we monitor, the mitigation in place, the contingency we execute if the mitigation fails, and the insurance line that responds. Numbers match 10-risk-auditor §3 exactly.

#1Disease event in PL receiving (Berezan repeat)

Prob MCatastrophic$400K+

Trigger: Single positive PCR at American Penaeid SC; in-transit thermal excursion; quarantine SOP lapse.
Lead indicator: Receiving PCR + bag temp + DO + mortality at 24/48/72 hours.
Mitigation: CFIA Form 5670 pre-clearance + dual-source PL contracts + on-site quarantine raceway + split each PL order across 2 flights.
Contingency: Activate second-source hatchery within 72h; halt stocking; deep-clean affected boxes; HACCP CCP-1 corrective action.
Insurance line: Aquaculture Stock Mortality (AXA XL / Lloyd's syndicate) $25–40K/yr at $1M biomass cover + Business Interruption rider.

#2American Penaeid hatchery closure / CFIA reverses pre-clearance

Prob M-HCatastrophic$1.2M+ sunk CAPEX + 18-mo reset

Trigger: SC IHHNV detection / hatchery bankruptcy / CFIA policy shift triggered by another US outbreak.
Lead indicator: CFIA AIRS database updates; quarterly American Penaeid PCR cadence reports; industry intel.
Mitigation: Qualify Mexico (Maricultura del Pacífico) + Belize as secondary via CFIA Form 5670 case-by-case; plan domestic-Canadian nursery as Phase 2 strategic moat.
Contingency: Switch to second-source within 90 days; pause stocking; communicate to FCC / AgriInnovate; if no source within 180 days → wind down with creditor-friendly orderly cessation.
Insurance line: Contingent Business Interruption rider $500K–$1M, premium $4–8K/yr.

#3Atarraya bankruptcy / acquisition / licence termination

Prob MSevere$200K–$500K

Trigger: Atarraya $20–25M Series B fails to close (currently $5M raised); acquirer re-prices royalty; founder dispute → operational instability.
Lead indicator: Atarraya funding announcements; sensor data latency drift; spare-parts SLA misses; HQ headcount changes.
Mitigation: Source-code escrow with Iron Mountain + 72h local-mode firmware + spare-parts inventory in Canada + IP grant-back retained by North 49.
Contingency: Activate escrow; trigger local-mode; engage Atarraya engineering staff as independent contractors; assess self-build vs second-source vendor.
Insurance line: Technology errors & omissions $1M limit, $6–10K/yr (specialty placement).

#4BC Hydro rate increase 30%+ (V-08 baseline classification)

Prob MMaterial$84K–$129K/yr Phase 1 OPEX

Trigger: LGS classification confirmed at 2.5–4M kWh/yr + BC Hydro general rate application increases 30%+ over 5 yr.
Lead indicator: BC Hydro general rate application filings; LGS classification confirmation at site connection.
Mitigation: Mech-eng heat-load + electrical-load study before LOI (V-01); FortisBC natural gas heat (8–15× cheaper kWh-equivalent); BC Hydro Schedule 1894/1895 Industrial Electrification at Phase 2 (-20%).
Contingency: Convert resistance heating to natural gas via FortisBC; defer Phase 2 BC Hydro upgrade; renegotiate financial model with FCC.
Insurance line: Equipment Breakdown covers transformer/HVAC failure, not rate increases — rate risk is uninsurable; mitigate via hedged contracts only.

#5Costco rejects Roadshow → BC Manager equity backfire

Prob MSevere$300K–$600K (incl. legal + capital rework)

Trigger: Costco Ethics declines disclosure structure; manager refuses divestiture; cascading internal investigation.
Lead indicator: Costco Ethics & Compliance written response within 60 days of disclosure letter.
Mitigation: Pitch Costco Canada Ottawa (not BC) to dilute conflict; ShA Clause 14 forced-divestiture trigger; blind trust + Class B non-voting.
Contingency: Excise manager from cap table via ShA Clause 14; pivot Phase 2 to Sysco / GFS / Pacific Western Distributors + Asian retail expansion.
Insurance line: D&O $2M limit, $3–7K/yr; EPL $1M limit, $2–4K/yr.

#6Lease landlord refuses renewal / sells facility / TI claw-back

Prob L-MSevere$3M+ aggregate + Phase 2 reset

Trigger: 5-yr lease expiry, landlord sells to industrial-park aggregator, change-of-control clause exercised; TI amortization unrecovered.
Lead indicator: Lease year 3 landlord-intent check; industrial-park ownership-change notices; CRE broker market intel.
Mitigation: 10-yr lease with two 5-yr renewal options at fair-market caps; ROFO/ROFR on parcel; TI fully amortized within 5 yr; relocation clause caps.
Contingency: Activate ROFO; emergency-buy parcel; alternatively relocate to pre-scouted second-position ex-cannabis facility.
Insurance line: Property — leasehold improvements $2M + BI 12-mo $1.5M, $8–14K/yr.

#7Labour scarcity hits beyond modeled wage premium

Prob M-HMaterial+$80K–$160K/yr Phase 1 payroll

Trigger: BC aquaculture labour pool absorbed by Cermaq/Mowi expansion; VIU intake delayed; wage inflation 15%+.
Lead indicator: Job Bank aquaculture posting count; VIU intake announcements; Cermaq/Mowi hiring waves; offer-accept rates on Farm Manager search.
Mitigation: $24/hr base (above $15–19 baseline); VIU paid co-op pipeline starting M-6; lean automation Day 1; cross-train Lead Tech as deputy Farm Manager; BCIT FWR adjacent-skillset hires.
Contingency: Increase wages to retain; defer Phase 2 ramp; bring in TFW Program (12-mo lead time) for processing-floor roles.
Insurance line: WorkSafeBC statutory + EPL $1M ($2–4K/yr) + Key Person life $500K on Farm Manager ($2–3K/yr).

#8Food safety incident at Albion toll processor

Prob L-MCatastrophic$1.5M–$3M

Trigger: Albion Listeria outbreak in shared facility; cross-contamination from finfish line; temperature abuse in 3rd-party transport.
Lead indicator: Albion BRCGS audit results; environmental monitoring zone-4 trending; CCP-6 deviation logs.
Mitigation: Indemnification clause in toll-processing agreement (cap = $5M); right to audit Albion quarterly; dual-source via Walcan Seafood; brand-protection clause; mock recall annual.
Contingency: Activate Walcan secondary within 7 days; recall + traceability per FSMA Final Rule 204; PR firm pre-retained; FCC / AgriInnovate proactive disclosure.
Insurance line: Products Liability / Recall Insurance $5M limit ($8–15K/yr); Contingent Business Interruption $1M ($4–8K/yr) — Critical line.

#9Cyberattack on Atarraya cloud → 7+ day outage

Prob L-MCatastrophic$1.5M–$2M

Trigger: Ransomware / DDoS / cloud-provider AZ failure / Atarraya CI/CD compromise.
Lead indicator: Atarraya status page; SOC2 / ISO 27001 audit reports; sensor data latency drift.
Mitigation: 72h local-mode firmware (deal-breaker per Plan A5 §3); on-prem caching gateway; isolated SCADA segment; weekly SOC2 review; cybersecurity assessment of Atarraya before signing.
Contingency: Activate local-mode within 30 min of cloud-down detection; engage Atarraya engineering ASAP; manual oxygen/feed cadence backup SOP.
Insurance line: Cyber Liability $2M ($4–9K/yr) + First-Party Cyber for biomass-loss $1M ($6–12K/yr).

#10C$/USD FX swing affects PL pricing + Atarraya royalty

Prob MMaterial+$14–27K/yr Phase 1; $100K+/yr Phase 2

Trigger: Trump-tariff regime / BoC rate divergence / commodity-cycle weakness moves C$ −10% vs USD.
Lead indicator: DXY trend; CAD forward rates; BoC rate decisions.
Mitigation: None documented today — gap (G-RISK-08 open).
Contingency: Establish $50K–$100K rolling FX forward contracts via FCC or commercial bank; natural hedge via PNW USD revenue from Phase 3 export channel; build FX corridor monitoring into monthly KPI dashboard.
Insurance line: Not insurable; financial hedging only.

#11Technology yield underperformance (Atarraya cold-climate)

Prob MSevere$1.5M (Y2–Y3 revenue gap) + Phase 2 commit deferred 12–18 months

Trigger: Atarraya Air Shrimp Boxes yield <80% of vendor spec at 20-box BC commercial deployment; cold-climate envelope underperforms Plainfield NJ baseline. Verified vendor mid-point spec annualizes to 52,000-62,000 lb/yr at 20 boxes (not the 66K upper-bound used in original plan).
Lead indicator: Atarraya Plainfield NJ 2026 production data — verified 2026-05-25: ~60% deployed Feb 2026 (38-box target), producing 400 lb/wk and targeting 3,500 lb/wk by end of June 2026. System still ramping into design capacity. Require Atarraya term-sheet disclosure of NJ commercial-scale actuals.
Mitigation: Tiered scenario in financial model: BASE-TECH at 52,000 lb/yr (verified mid-point), UPSIDE at 62,000 lb/yr, MIN-TECH at 60% of upside (~37K lb/yr Phase 1). Cite VERIFIED receivership precedents: NaturalShrimp (receiver Nov 22 2024; ~$35.7M asset sale to lenders May 2025); tru Shrimp / Iterro (Balaton MN lab closed Nov 25 2025; receiver Nov 20 2025 via assignment for benefit of creditors; Madison SD plant never built); CP Foods Homegrown Shrimp USA DTC retreat (Jan 22 2025, cited cost-of-production vs market price). Sources: Undercurrent News + SeafoodSource.
Contingency: Stop at 12-box Phase 1 if yields fall <70% of vendor spec; do not commit Phase 2 capex; pivot to Future B (cap-and-license + IP licensor) economics per /risk Section 5.
Insurance line: Aquaculture Stock Mortality $1M partially covers; technology-performance risk is NOT insurable — contractual mitigation only.

#12GDST traceability non-conformance (Costco vendor compliance)

Prob MSevere$30K third-party overlay + Phase 2 Costco entry deferred 12 mo if unresolved

Trigger: Atarraya cloud cannot export GDST 1.2+ compliant EPCIS event data; Costco vendor onboarding requires interoperable digital tracking PL-to-POS (per DeepSeek + Gemini cross-model review finding A5).
Lead indicator: Atarraya licence diligence — written GDST compliance confirmation before licence sign. Costco RSP shrimp policy version verification via Costco Canada Supplier Portal (source needs verification).
Mitigation: Demand written GDST 1.2+ EPCIS compliance confirmation from Atarraya before Master Licence sign. If not delivered, retain budget for third-party traceability overlay (TraceRegister or equivalent).
Contingency: $30K third-party GDST overlay (TraceRegister); 12-month Phase 2 deferral if Costco shrimp policy hardens on GDST before overlay is operational.
Insurance line: Not insurable; commercial / contractual risk only.

#	Failure mode	Trigger	Prob.	Blast radius (CAD)	Lead indicator	Mitigation	Contingency	Insurance line
1	Disease event in PL receiving (Berezan repeat)	Single positive PCR at American Penaeid SC; in-transit thermal excursion; quarantine SOP lapse.	M	$400K+Catastrophic	Receiving PCR + bag temp + DO + mortality at 24/48/72 hours.	CFIA Form 5670 pre-clearance + dual-source PL contracts + on-site quarantine raceway + split each PL order across 2 flights.	Activate second-source hatchery within 72h; halt stocking; deep-clean affected boxes; HACCP CCP-1 corrective action.	Aquaculture Stock Mortality (AXA XL / Lloyd's syndicate) $25–40K/yr at $1M biomass cover + Business Interruption rider.
2	American Penaeid hatchery closure / CFIA reverses pre-clearance	SC IHHNV detection / hatchery bankruptcy / CFIA policy shift triggered by another US outbreak.	M-H	$1.2M+ sunk CAPEX + 18-mo resetCatastrophic	CFIA AIRS database updates; quarterly American Penaeid PCR cadence reports; industry intel.	Qualify Mexico (Maricultura del Pacífico) + Belize as secondary via CFIA Form 5670 case-by-case; plan domestic-Canadian nursery as Phase 2 strategic moat.	Switch to second-source within 90 days; pause stocking; communicate to FCC / AgriInnovate; if no source within 180 days → wind down with creditor-friendly orderly cessation.	Contingent Business Interruption rider $500K–$1M, premium $4–8K/yr.
3	Atarraya bankruptcy / acquisition / licence termination	Atarraya $20–25M Series B fails to close (currently $5M raised); acquirer re-prices royalty; founder dispute → operational instability.	M	$200K–$500KSevere	Atarraya funding announcements; sensor data latency drift; spare-parts SLA misses; HQ headcount changes.	Source-code escrow with Iron Mountain + 72h local-mode firmware + spare-parts inventory in Canada + IP grant-back retained by North 49.	Activate escrow; trigger local-mode; engage Atarraya engineering staff as independent contractors; assess self-build vs second-source vendor.	Technology errors & omissions $1M limit, $6–10K/yr (specialty placement).
4	BC Hydro rate increase 30%+ (V-08 baseline classification)	LGS classification confirmed at 2.5–4M kWh/yr + BC Hydro general rate application increases 30%+ over 5 yr.	M	$84K–$129K/yr Phase 1 OPEXMaterial	BC Hydro general rate application filings; LGS classification confirmation at site connection.	Mech-eng heat-load + electrical-load study before LOI (V-01); FortisBC natural gas heat (8–15× cheaper kWh-equivalent); BC Hydro Schedule 1894/1895 Industrial Electrification at Phase 2 (-20%).	Convert resistance heating to natural gas via FortisBC; defer Phase 2 BC Hydro upgrade; renegotiate financial model with FCC.	Equipment Breakdown covers transformer/HVAC failure, not rate increases — rate risk is uninsurable; mitigate via hedged contracts only.
5	Costco rejects Roadshow → BC Manager equity backfire	Costco Ethics declines disclosure structure; manager refuses divestiture; cascading internal investigation.	M	$300K–$600K (incl. legal + capital rework)Severe	Costco Ethics & Compliance written response within 60 days of disclosure letter.	Pitch Costco Canada Ottawa (not BC) to dilute conflict; ShA Clause 14 forced-divestiture trigger; blind trust + Class B non-voting.	Excise manager from cap table via ShA Clause 14; pivot Phase 2 to Sysco / GFS / Pacific Western Distributors + Asian retail expansion.	D&O $2M limit, $3–7K/yr; EPL $1M limit, $2–4K/yr.
6	Lease landlord refuses renewal / sells facility / TI claw-back	5-yr lease expiry, landlord sells to industrial-park aggregator, change-of-control clause exercised; TI amortization unrecovered.	L-M	$3M+ aggregate + Phase 2 resetSevere	Lease year 3 landlord-intent check; industrial-park ownership-change notices; CRE broker market intel.	10-yr lease with two 5-yr renewal options at fair-market caps; ROFO/ROFR on parcel; TI fully amortized within 5 yr; relocation clause caps.	Activate ROFO; emergency-buy parcel; alternatively relocate to pre-scouted second-position ex-cannabis facility.	Property — leasehold improvements $2M + BI 12-mo $1.5M, $8–14K/yr.
7	Labour scarcity hits beyond modeled wage premium	BC aquaculture labour pool absorbed by Cermaq/Mowi expansion; VIU intake delayed; wage inflation 15%+.	M-H	+$80K–$160K/yr Phase 1 payrollMaterial	Job Bank aquaculture posting count; VIU intake announcements; Cermaq/Mowi hiring waves; offer-accept rates on Farm Manager search.	$24/hr base (above $15–19 baseline); VIU paid co-op pipeline starting M-6; lean automation Day 1; cross-train Lead Tech as deputy Farm Manager; BCIT FWR adjacent-skillset hires.	Increase wages to retain; defer Phase 2 ramp; bring in TFW Program (12-mo lead time) for processing-floor roles.	WorkSafeBC statutory + EPL $1M ($2–4K/yr) + Key Person life $500K on Farm Manager ($2–3K/yr).
8	Food safety incident at Albion toll processor	Albion Listeria outbreak in shared facility; cross-contamination from finfish line; temperature abuse in 3rd-party transport.	L-M	$1.5M–$3MCatastrophic	Albion BRCGS audit results; environmental monitoring zone-4 trending; CCP-6 deviation logs.	Indemnification clause in toll-processing agreement (cap = $5M); right to audit Albion quarterly; dual-source via Walcan Seafood; brand-protection clause; mock recall annual.	Activate Walcan secondary within 7 days; recall + traceability per FSMA Final Rule 204; PR firm pre-retained; FCC / AgriInnovate proactive disclosure.	Products Liability / Recall Insurance $5M limit ($8–15K/yr); Contingent Business Interruption $1M ($4–8K/yr) — Critical line.
9	Cyberattack on Atarraya cloud → 7+ day outage	Ransomware / DDoS / cloud-provider AZ failure / Atarraya CI/CD compromise.	L-M	$1.5M–$2MCatastrophic	Atarraya status page; SOC2 / ISO 27001 audit reports; sensor data latency drift.	72h local-mode firmware (deal-breaker per Plan A5 §3); on-prem caching gateway; isolated SCADA segment; weekly SOC2 review; cybersecurity assessment of Atarraya before signing.	Activate local-mode within 30 min of cloud-down detection; engage Atarraya engineering ASAP; manual oxygen/feed cadence backup SOP.	Cyber Liability $2M ($4–9K/yr) + First-Party Cyber for biomass-loss $1M ($6–12K/yr).
10	C$/USD FX swing affects PL pricing + Atarraya royalty	Trump-tariff regime / BoC rate divergence / commodity-cycle weakness moves C$ −10% vs USD.	M	+$14–27K/yr Phase 1; $100K+/yr Phase 2Material	DXY trend; CAD forward rates; BoC rate decisions.	None documented today — gap (G-RISK-08 open).	Establish $50K–$100K rolling FX forward contracts via FCC or commercial bank; natural hedge via PNW USD revenue from Phase 3 export channel; build FX corridor monitoring into monthly KPI dashboard.	Not insurable; financial hedging only.
11	Technology yield underperformance (Atarraya cold-climate)	Atarraya Air Shrimp Boxes yield <80% of vendor spec at 20-box BC commercial deployment; cold-climate envelope underperforms Plainfield NJ baseline. Verified vendor mid-point spec annualizes to 52,000-62,000 lb/yr at 20 boxes (not the 66K upper-bound used in original plan).	M	$1.5M (Y2–Y3 revenue gap) + Phase 2 commit deferred 12–18 monthsSevere	Atarraya Plainfield NJ 2026 production data — verified 2026-05-25: ~60% deployed Feb 2026 (38-box target), producing 400 lb/wk and targeting 3,500 lb/wk by end of June 2026. System still ramping into design capacity. Require Atarraya term-sheet disclosure of NJ commercial-scale actuals.	Tiered scenario in financial model: BASE-TECH at 52,000 lb/yr (verified mid-point), UPSIDE at 62,000 lb/yr, MIN-TECH at 60% of upside (~37K lb/yr Phase 1). Cite VERIFIED receivership precedents: NaturalShrimp (receiver Nov 22 2024; ~$35.7M asset sale to lenders May 2025); tru Shrimp / Iterro (Balaton MN lab closed Nov 25 2025; receiver Nov 20 2025 via assignment for benefit of creditors; Madison SD plant never built); CP Foods Homegrown Shrimp USA DTC retreat (Jan 22 2025, cited cost-of-production vs market price). Sources: Undercurrent News + SeafoodSource.	Stop at 12-box Phase 1 if yields fall <70% of vendor spec; do not commit Phase 2 capex; pivot to Future B (cap-and-license + IP licensor) economics per /risk Section 5.	Aquaculture Stock Mortality $1M partially covers; technology-performance risk is NOT insurable — contractual mitigation only.
12	GDST traceability non-conformance (Costco vendor compliance)	Atarraya cloud cannot export GDST 1.2+ compliant EPCIS event data; Costco vendor onboarding requires interoperable digital tracking PL-to-POS (per DeepSeek + Gemini cross-model review finding A5).	M	$30K third-party overlay + Phase 2 Costco entry deferred 12 mo if unresolvedSevere	Atarraya licence diligence — written GDST compliance confirmation before licence sign. Costco RSP shrimp policy version verification via Costco Canada Supplier Portal (source needs verification).	Demand written GDST 1.2+ EPCIS compliance confirmation from Atarraya before Master Licence sign. If not delivered, retain budget for third-party traceability overlay (TraceRegister or equivalent).	$30K third-party GDST overlay (TraceRegister); 12-month Phase 2 deferral if Costco shrimp policy hardens on GDST before overlay is operational.	Not insurable; commercial / contractual risk only.

The same 10 risks, plotted

Probability against blast radius.

Top-right is the worst quadrant. The two failure modes closest to it — American Penaeid sole-source (#2) and food safety at Albion (#8) — are also the two named single points of failure most aggressively in flight. Numbers correspond to the rows in the table above.

Top-right = worst (high probability, high blast radius). Numbered points correspond to the top-10 risk register rows above. Hover/tap any point for details.

Three contrarian futures

Not every path leads to Phase 2.

We have stress-tested three futures. The recommended path is Future A with structural reinforcements pulled from Future B (Atarraya territorial sub-license carve-out preserved; Phase 2 explicitly gated rather than presumed). Future C is the disciplined-skeptic default that beats Future A if any one KILL gate slips in the first 90 days.

Future A

Recommended

The plan as written

35%

probability

Phase 1 launches Q4 2026 in leased Langley M-2 facility. Live HOSO + Asian retail anchor Y1; Costco Roadshow Y2; BC-regional SKU Y3; Phase 2 at 100 boxes Y4–Y5.

Time horizon: 60 months to Phase 2 cash break-even
Key assumption: All six maximum-score risks clear sequentially. Restaurant channel delivers 8K–12K lb at $14–18/lb. BCSRIF lands as anchor.
Downside: Any one max-score risk slipping moves Y5 cash break-even out 12–24 months. The single biggest fragility: V-01 BC Hydro load.

Future B

Premium-only craft producer + IP licensor

25%

probability

Cap Phase 1 at 20–40 boxes permanently. Skip Costco entirely. Anchor 100% on live HOSO + DTC + ultra-premium foodservice at $14–28/lb blended. License operating IP to one operator each in AB, ON, QC at $50–150K upfront + 2–4% revenue royalty.

Time horizon: 36 months to positive EBITDA (faster than Future A — no Phase 2 CAPEX wall)
Key assumption: Vancouver + Seattle premium markets absorb 50–80K lb at blended $16–20/lb. Atarraya licence permits territorial sub-licensing (currently not in Appendix A5 — must add at term-sheet stage).
Downside: Caps revenue at $1.2–2.0M/yr ceiling. AgriInnovate fit weakens. Equity investor 20–25% IRR target harder unless exit is to a licensor-aggregator.

Future C

Land-bank + watch

15%

probability

Do not build now. Acquire 25940 56 Ave at distressed pricing ($2.0–2.5M) for land-bank optionality. License Atarraya territorial reservation for BC for 24 months. Watch Atarraya Plainfield ramp + Planet Shrimp ON. Re-evaluate Q4 2027.

Time horizon: 18–24 month wait, then re-decide
Key assumption: Atarraya accepts paid territorial reservation rather than pushing for immediate full deployment. Berezan lessons remain sufficient.
Downside: Loses first-mover advantage in BC. If Atarraya-direct enters BC, the moat collapses. Founder + investor capital sits idle for 18 months.

Insurance program

Twelve lines. Y1 premium budget $ $45–85K.

A specialty broker — BFL Canada or HUB International BC — placed by Day +30 (G-RISK-01). A syndicate parallel quote for aquaculture mortality and by Day +90. + + + property + : each underwriter receives a Certificate of Insurance naming itself as additional insured.

12lines

Coverage breadth

Property · CGL · Products + Recall · BI · CBI · Aqua mortality · Eq. Breakdown · EIL · Cyber · D&O · EPL · Key Person Life · WSBC

~$138K

Y1 premium midpoint

Sum of midpoints across the 12 lines (range $45–85K)

$1M

Aquaculture mortality

Lloyd's syndicate · self-insure first $50K · AXA XL alt-quote

Line	Phase 1 limit	Carrier candidates (BC)	Y1 premium (CAD)	Notes
Property — building, contents, leasehold improvements	$5M building + $2M contents	Intact / Northbridge / Aviva BC commercial	$8–14K/yr	Include flood + earthquake (Fraser Valley = liquefaction zone).
General Liability (CGL)	$5M occurrence / $10M aggregate	Bundled with property carrier	$4–8K/yr	Standard; required for FCC + landlord.
Products Liability + Recall Insurance	$5M products + $2M recall costs	Berkley Specialty / Liberty Specialty	$8–15K/yr	Critical line — toll-processor cross-contamination scenario.
Business Interruption (BI) — 12-mo indemnity	$1.5M (12-mo loss)	Bundled w/ property	included	BI = the difference between failure and restart.
Contingent Business Interruption (CBI)	$500K–$1M	Lloyd's syndicate via local broker	$4–8K/yr	American Penaeid + Atarraya + Albion contingencies.
Aquaculture Stock Mortality	$1M biomass	AXA XL / Lloyd's syndicate	$25–40K/yr	Thin BC indoor-RAS loss history → conservative quote; self-insure first $50K.
Equipment Breakdown	$1.5M	Munich Re / HSB Canada	$3–5K/yr	Transformers, HVAC, pumps, freezer; Atarraya hardware covered.
Environmental Impairment Liability	$2M	AIG / Beazley	$5–10K/yr	BC MWR effluent permit makes this material; covers cleanup + 3rd-party claims.
Cyber Liability + First-Party Cyber-biomass	$2M cyber + $1M biomass-cyber	Coalition / Beazley / Chubb	$10–18K/yr	Atarraya cloud SPOF mitigation; specialty placement.
Directors & Officers (D&O)	$2M	Trisura / Westland / CFC	$3–7K/yr	Required by FCC + AgriInnovate; covers Costco Manager disclosure litigation.
Employment Practices Liability (EPL)	$1M	Bundled w/ D&O	$2–4K/yr	Wage-and-hour + harassment exposure (BC ESA-strict).
Key Person Life — Founder + Farm Manager	$1M founder / $500K FM	Manulife / Sun Life	$3–6K/yr	FCC will require; Berezan labour-lesson reinforcement.
Workers' Comp (WSBC) — statutory	BC mandatory	WorkSafeBC	~$15–25K/yr	Aquaculture classification 7011 ~$2.50/$100 wages.
Live Cargo / Motor Truck Cargo — endorsed for live aquatic cargo	$100K limit	Lloyd's syndicate or Berkley Specialty (endorsement on Motor Truck Cargo)	$10–15K/yr	Per Gemini cross-model review finding — 80% of live-market losses occur in transit; live-channel critical line. Pairs with Aquaculture Stock Mortality (transit gap closure).

Audit-readiness note: , , and Costco Vendor Onboarding each separately demand COIs (Certificates of Insurance) naming each as additional insured. A single broker relationship from Day 0 consolidates the placement — recommended brokers: BFL Canada (specialty aqua/agri) or HUB International BC.

Open gates with stop conditions

Three KILL gates. Fifteen verification gates.

Each is a pre-defined stop condition. Beyond the three KILLs, the table below lists 15 verification gates (V-01 through G-RISK-15) with their countdown to target close.

Open risk gates (V-01 through G-RISK-15)

Gate	Description	Owner	Target close	Status
G-RISK-01	Specialty insurance broker engaged (BFL Canada / HUB International)	Founder + counsel	Day +30	open
G-RISK-02	Full insurance program quote delivered (12 lines)	Broker	Day +60	open
G-RISK-03	Lloyd's syndicate parallel quote for aquaculture mortality + CBI	Broker	Day +90	open
G-RISK-04	American Penaeid + Mexico (Maricultura) + Belize hatchery audit reports on file	Founder + aquaculture advisor	Day +60	open
G-RISK-05	CFIA Form 5670 pre-clearance for Mexico secondary	Founder	Day +90	open
G-RISK-06	Atarraya MLA with source-code escrow + 72h local-mode + IP grant-back + royalty step-down signed	Founder + IP counsel	Day +90	open
G-RISK-07	Albion + Walcan toll-processor MOU with indemnification + brand-protection + recall allocation	Founder + food counsel	Day +90	open
G-RISK-08	FX hedging policy documented (rolling forwards on USD payables; FX corridor monitoring)	Founder + FCC banker	Day +60	open
G-RISK-09	Berezan post-mortem attached to FCC + AgriInnovate submission packages	Founder	Before FCC underwriting	in progress
G-RISK-10	Costco Ethics & Compliance written response to disclosure letter (CONDITIONAL — KILL-2)	Costco Ethics	Day +60 post-letter	conditional
G-RISK-11	BC MoE MWR pre-application meeting outcome	Wastewater P.Eng	Day +14 post-site selection	open
G-RISK-12	Mech-eng heat-load + electrical-load study delivered	Mech eng	Before LOI (Day +21)	open
G-RISK-13	AAFC AgriInnovate pre-consultation outcome documented (currently CLOSED)	Founder	Day +30	open
G-RISK-14	Contingent capital plan documented (Plan B equity stack)	Founder + investor	Day +60	open
G-RISK-15	Farm Manager hired (Month -2 relative to stocking)	Founder	Month -2	open

Single points of failure — ranked

Seven SPOFs, by blast radius.

Each SPOF is named, ranked by blast radius, and paired with a documented redundancy plan. Four are currently unmitigated or only partially mitigated — we report that openly rather than smooth it over.

SPOF #1

UNMITIGATED today

American Penaeid SC — sole CFIA-cleared live-PL source

Relative blast radius

Failure: Loss = company death within 6 months.

Redundancy plan: Dual-source qualification (Mexico/Belize) underway; domestic Canadian nursery as Phase 2 moat (G-RISK-04, G-RISK-05).

SPOF #2

CONTRACTUALLY MITIGABLE, no operational fallback

Atarraya cloud + Atarraya as a company

Relative blast radius

Failure: Loss = biomass dies in hours if cloud-down with no local-mode firmware.

Redundancy plan: 72-hour local-mode firmware deal-breaker + Iron Mountain / NCC Group source-code escrow + IP grant-back to North 49 (G-RISK-06).

SPOF #3

UNMITIGATED today

Founder as sole technical + commercial operator

Relative blast radius

Failure: Loss = full operational halt if founder incapacitated for 3+ months.

Redundancy plan: Farm Manager hire by Month -2 + VIU paid co-op pipeline + advisory board (G-RISK-15).

SPOF #4

SUSPENDED via VANTEC substitution

Costco BC Manager equity — KILL-2 trigger (SUSPENDED)

Relative blast radius

Failure: Costco Ethics rejects disclosure structure; manager refuses divestiture; fired-for-cause cascade.

Redundancy plan: Class B tranche SUSPENDED per Section A.10 contradiction-2 in favour of VANTEC angel syndicate; ShA Clause 14 framework retained as standby; KILL-2 currently CONDITIONAL only.

SPOF #5

PARTIALLY MITIGATED — contract terms undocumented

Albion Fisheries toll processor — sole frozen processing path

Relative blast radius

Failure: Loss = recall event = brand death.

Redundancy plan: Walcan Seafood secondary qualification + indemnification cap $5M + audit-right + brand-protection clause (G-RISK-07).

SPOF #6

UNMITIGATED today

BCSRIF (anchor grant) concentration — 43% of capital stack

Relative blast radius

Failure: Loss = forced renegotiation of entire raise at distressed equity terms.

Redundancy plan: DFO Pacific BCSRIF pre-consultation by 2026-06-08 + Plan B equity stack standby + AgriInnovate WATCH-only reinstatement on Budget 2026 reopen (G-RISK-13, G-RISK-14).

SPOF #7

MITIGABLE via lease drafting

Lease landlord change-of-control / renewal denial

Relative blast radius

Failure: Loss = $1.5–3M relocation + 12–18 mo downtime.

Redundancy plan: ROFO/ROFR + 10-yr term + caps on renewal rent + pre-scouted second-position facility shortlist.

Phase 2 gating (Section E reference)

Phase 2 is not assumed — it is gated.

A Phase 2 raise of $8–12M is permitted only if all five gates below are met. If any one gate fails, Phase 2 is deferred 12 months and re-evaluated against Future B (cap-and-license) economics.

P2-1
Phase 1 trailing-12-month EBITDA positive
EBITDA ≥ $0 for 2 consecutive quarters
P2-2
Costco Canada signed PO
Any volume, any SKU, ≥6-month forward visibility
P2-3
Phase 1 energy actual vs model
Actual within ±15% of Expected case ($177K Phase 1 / 1.1M kWh + 4,500 GJ)
P2-4
Atarraya yield validation
≥1,300 kg/box/yr realised across Phase 1 boxes
P2-5
Phase 2 site secured
Adjacent expansion bay on lease option OR within 5 km of Phase 1, MWR-amenable

Audit team contact

Want to stress-test the assumptions yourself?

Underwriters, grant officers, and institutional investors receive the full cross-discipline risk register, the 12-line insurance program, the Berezan post-mortem, and the contingency-capital plan under NDA after a 30-minute orientation call.

Contact the audit team See the roadmap