Blue Star Foods Secures Additional Non-Dilutive Growth Capital to Support Expansion of Business Under Existing Master Service Agreement & Soft Shell Crab Operations
- Blue Star Foods Corp. secures additional funding to meet increased demand under the Master Service Agreement and expand soft shell crab operations.
- The company issued a promissory note of $300,000 and 500,000 shares of restricted common stock to an accredited investor.
- An institutional investor received a convertible promissory note of $138,000 with a one-time interest charge of 19% and an annual rate of 22%.
- CEO John Keeler highlights plans for increased volume in soft shell crab operations and the rollout of new products at retail outlets.
- Blue Star aims to strengthen its balance sheet, raise additional working capital, and explore less dilutive financing options.
- The company received approval for continued listing on NASDAQ, subject to filing required financial reports and maintaining a minimum share price.
- None.
The arrangement characterized by the issuance of promissory notes and restricted common stock indicates Blue Star Foods' strategy to address immediate capital needs. The short-term nature of the note due in May 2024, paired with the high annual interest rate of 22% for the convertible note, suggests an assertive but potentially costly approach to financing. A critical assessment of the convertible note's specifics, such as the conversion price pegged at 61% of Market Price, is crucial, as it may lead to dilution of equity for existing shareholders in the event of a default.
Moreover, the mention of efforts to maintain NASDAQ listing status reflects a scenario where the company has faced compliance challenges. The stipulation of meeting certain bid price requirements further adds to the complexity of their financial position. It is essential for investors to closely monitor the company's performance against these regulatory benchmarks to gauge future stability and potential impact on stock performance.
Enhanced retail distribution and the launch of new products should theoretically contribute to revenue growth. However, the need to scrutinize the impact of these developments on the bottom line remains, as increased revenues must translate into sustainable profitability to bolster investor confidence in the long term.
Blue Star Foods' strategic expansion into the soft shell crab operations and its plans to increase offerings in gourmet value-added meals reflect an adaptive response to consumer demand. The distribution through 2,776 retail outlets and planned product releases in club store segments suggest a targeted approach to market penetration. Nonetheless, the success of these initiatives will hinge on consumer reception, competitive landscape and the company's ability to scale operations efficiently.
From an investor's standpoint, the ability of Blue Star Foods to leverage its ESG credentials may serve as a differentiating factor in a marketplace increasingly conscious of sustainable practices. However, balancing innovation, market expansion and environmental consciousness with cost management and financial prudence will be pivotal in translating these efforts into shareholder value.
Miami, FL, April 17, 2024 (GLOBE NEWSWIRE) -- Blue Star Foods Corp., (“Blue Star,” the “Company,” “we,” “our” or “us”) (NASDAQ: BSFC), an integrated Environmental, Social, and Governance (ESG) sustainable seafood company with a focus on Recirculatory Aquaculture Systems (RAS), today announced it has secured additional funding to help meet increased demand under its previously announced Master Service Agreement as well as increase the volume in its soft shell crab operations.
On April 16, 2024 Blue Star entered into a securities purchase agreement with an accredited investor pursuant to which Blue Star issued a promissory note in the principal amount of
On the same date, Blue Star also issued a convertible promissory note to an institutional investor, in the principal amount of
John Keeler, CEO of Blue Star Foods, commented, “We believe this quarter will finish strong with an increased volume in soft shelf crabs operations and an increased demand for gourmet value-added meals, through 2,776 retail outlets. We also intend to rollout of 4 new products at the club store segment, commencing in late June and throughout the summer. Our efforts call for increased working capital support, which we have initially secured through promissory notes. We will continue to explore ways to strengthen our balance sheet and raise additional working capital. I am fully committed to grow revenue and profitably and explore flexible and less dilutive financing opportunities. Lastly, we are confident in our efforts remain listed with NASDAQ.”
On April 10, 2024, the Company received a letter from the NASDAQ Hearings Panel indicating that our request for continued listing on Nasdaq was granted subject to the following: (i) on or before April 1, 2024, we file our Form 10-K for the period ended December 31, 2023 demonstrating compliance with Listing Rule 5550(b)(1), which was accomplished; (ii) on or before May 15, 2024, we file our Form 10-Q for the period ended March 31, 2024 demonstrating continued compliance with Listing Rule 5550(b)(1), and (iii) on or before May 30, 2024, we demonstrate compliance with Listing Rule 5550(a)(2) by evidencing a closing bid price of
About Blue Star Foods Corp. (NASDAQ: BSFC)
Blue Star Foods Corp. an integrated Environmental, Social, and Governance (ESG) sustainable seafood company with a focus on Recirculatory Aquaculture Systems (RAS) that processes, packages and sells high-value seafood products. The Company believes it utilizes best-in-class technology, in both resource sustainability management and traceability, and ecological packaging. The Company also owns and operates the oldest continuously operating Recirculating Aquaculture System (RAS) full grow-out salmon farm in North America. The company is based in Miami, Florida, and its corporate website is: https://bluestarfoods.com
Forward-Looking Statements:
The foregoing material may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company’s product development and business prospects, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Risks concerning the Company’s business are described in detail in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, and other periodic and current reports filed with the Securities and Exchange Commission. The Company is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contacts:
investors@bluestarfoods.com
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