Blue Star Foods’ Taste of BC Aquafarms Signs Fingerling Supply Agreement with Miracle Springs, Poised for Accelerated Growth

Rhea-AI Summary

Blue Star Foods Corp. (NASDAQ: BSFC) announced that its subsidiary, Taste of BC Aquafarms, has signed a significant fingerling supply agreement with Miracle Springs. This partnership is set to accelerate harvest growth and meet increasing market demand. The agreement includes:

1. Initial supply of 1,250 kg of fish (750 kg of 100-200g and 10,000 50g fingerlings)
2. Ongoing supply of 10-20 thousand fingerlings in Q1 and Q2 2025
3. 20 thousand 50g fingerlings every 2 months starting Q3 2025

The contract, valued at approximately CAD$200,000, is expected to increase Taste of BC's production capability to 200 Tons HOG Steelhead salmon in 2025 & 2026, projecting revenues of CAD$2.315 million at current selling prices. Taste of BC is also upgrading farm systems to support additional biomass and enhance oxygen and ozone capacities, targeting a 40% reduction in LOX costs.

Positive

• Signed fingerling supply agreement with Miracle Springs to accelerate harvest growth
• Expected increase in production capability to 200 Tons HOG Steelhead salmon in 2025 & 2026
• Projected revenues of CAD$2.315 million at current selling prices
• Upgrading farm systems to support additional biomass and enhance oxygen and ozone capacities
• Targeting 40% reduction in Liquid Oxygen (LOX) costs

Negative

• None.

Insights

Aquaculture Industry Analyst

This agreement marks a significant step for Blue Star Foods' subsidiary, Taste of BC Aquafarms. The partnership with Miracle Springs for fingerling supply is a strategic move to accelerate growth and meet market demand. Key points:

• Supply of various sizes of fingerlings will save 2-5 months in the growth cycle, enhancing efficiency.
• Projected increase in production capability to 200 Tons HOG Steelhead salmon in 2025 & 2026.
• Expected revenue boost of CAD$2.315 million at current selling prices.
• Upgrades to farm systems, including oxygen and ozone capacities, aim to reduce Liquid oxygen costs by 40%.

This deal showcases Taste of BC's commitment to scaling its Recirculatory Aquaculture Systems (RAS) operations efficiently. The modular approach and standardized processes position the company well for future expansion in the growing sustainable seafood market. However, investors should note that realizing projected revenues depends on successful implementation and market conditions.

Financial Analyst

The fingerling supply agreement represents a positive development for Blue Star Foods Corp. (NASDAQ: BSFC). Financial implications include:

• Initial contract value of approximately CAD$200,000, excluding VAT & Freight.
• Potential revenue increase of CAD$2.315 million in 2025 & 2026, a significant boost for a company with a current market cap of about $1.3 million.
• Cost reduction initiatives, such as the 40% targeted decrease in Liquid oxygen expenses, could improve profit margins.

While these projections are promising, investors should consider the company's current financial position and execution risks. The substantial revenue increase relative to the market cap suggests potential for significant growth, but also implies high execution risk. The success of this expansion and its impact on BSFC's stock will depend on the company's ability to efficiently scale operations and maintain quality while meeting increased demand.

Major Milestone to Meet Increasing Market Demand

Miami, FL, Oct. 10, 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 that its Taste of BC Aquafarms executed a significant agreement with Miracle Springs to supply a substantial quantity of fingerlings. This partnership represents a major milestone, enabling Taste of BC to accelerate its harvest growth and meet increasing market demand.

Under this innovative agreement, Miracle Springs will supply (subject to permits), 1,250 kilograms of fish consisting of 750 kg of 100-200 grams & 10,000 50 grams fingerlings. These strategic quantities will save between 2 to 5 months in our growth cycle per respective lot. Moreover, Miracle Springs will continue to supply 10 to 20 thousand fingerlings during 1^st & 2^nd quarter 2025 & 20 thousand (50 grams) fingerlings every 2 months starting 3^rd quarter 2025, ensuring Taste of BC consistent and predictable harvest capabilities.

Valued at approximately CAD$200,000 (excluding VAT & Freight), this contract is set to increase Taste of BC’s production capability up to 200 Tons HOG Steelhead salmon in 2025 & 2026. This boost equates to an impressive CAD$2.315 million in projected revenues at current selling prices, driven by the growing demand for wholesome, sushi-grade fish.

In response to this expected growth, Taste of BC is upgrading key farm systems to support additional biomass, with farm water quality in mind, by enhancing both our oxygen and ozone capacities, with less depend of Liquid oxygen (LOX). We are targeting a 40% reduction of our LOX cost. When completed, these highly optimized RAS module have all components dimensioned to work harmoniously at their peak output, thereby maximizing value for money, coupled with our standardized and predictable harvest processes, demonstrate our unwavering commitment to continuing success in Recirculating Aquaculture Systems (RAS).

The partnership with Miracle Springs not only reinforces our ability to improve efficiency but also exemplifies our readiness for future expansion. Through the modularization of our proven operational methodology, Taste of BC is well-positioned to scale operations and meet the ever-increasing demand for sustainable, high-quality aquaculture products.

About Taste of BC Aquafarms:

Taste of BC Aquafarms is a leading aquafarm dedicated to producing high-quality, sustainable steelhead salmon. Utilizing innovative Recirculating Aquaculture Systems (RAS), Taste of BC ensures the delivery of fresh, sushi-grade fish while committed to environmental stewardship and operational excellence.

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, 2023, 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

FAQ

What is the value of the fingerling supply agreement between Taste of BC Aquafarms and Miracle Springs?

The fingerling supply agreement between Taste of BC Aquafarms and Miracle Springs is valued at approximately CAD$200,000, excluding VAT and freight.

How much is Taste of BC Aquafarms' production capability expected to increase in 2025 and 2026?

Taste of BC Aquafarms' production capability is expected to increase up to 200 Tons HOG Steelhead salmon in 2025 and 2026.

What is the projected revenue for Taste of BC Aquafarms based on the new fingerling supply agreement?

The projected revenue for Taste of BC Aquafarms based on the new fingerling supply agreement is CAD$2.315 million at current selling prices.

How much is Taste of BC Aquafarms aiming to reduce its Liquid Oxygen (LOX) costs?

Taste of BC Aquafarms is targeting a 40% reduction in its Liquid Oxygen (LOX) costs through upgrades to farm systems and enhanced oxygen and ozone capacities.