BSFC.OTC.PinkBlue Star Foods CORP
S-1: Blue Star Foods Corp. Files for Resale of 1.35 Million Common Shares
Sentiment:
Registration Statement
Blue Star Foods Corp. has filed a prospectus for the potential resale of 1.35 million shares of its common stock by existing shareholders.
Delay expectedThe company is subject to a Mandatory Panel Monitor for a period of one year, or until June 11, 2025, and is not eligible for a compliance period with respect to the minimum bid price requirement.The company has a hearing with the Nasdaq Hearings Panel set for December 11, 2024, regarding its non-compliance with the minimum bid price requirement.
Capital raiseThe company has entered into securities purchase agreements with Quick Capital, LLC and Jefferson Street Capital, LLC for a private placement offering of promissory notes in the aggregate principal amount of $550,000.The company has also entered into a purchase agreement with ClearThink Capital Partners, LLC for the potential sale of up to $10,000,000 of the company's common stock.The company has issued convertible promissory notes to 1800 Diagonal Lending LLC in the principal amount of $179,400 and $121,900.
Worse than expectedThe company's revenue decreased by 43.4% for the three months ended September 30, 2024, compared to the same period in 2023.The company's net loss increased to $1,325,147 for the three months ended September 30, 2024, compared to $445,813 for the same period in 2023.
Summary
- Blue Star Foods Corp. has filed a registration statement for the potential resale of 1,350,000 shares of its common stock.
- The shares include 1,000,000 shares issuable upon conversion of promissory notes from a private placement offering in August 2024 and 350,000 shares issuable under a purchase agreement with ClearThink Capital Partners, LLC.
- The company will not receive any proceeds from the sale of these shares.
- The selling stockholders may sell the shares at prevailing market prices or in privately negotiated transactions.
- Blue Star Foods Corp. is an international sustainable marine protein company with a focus on seafood products.
- The company's common stock is listed on the Nasdaq Capital Market under the symbol BSFC, with the last reported sale price on November 14, 2024, at $0.2747 per share.
Sentiment
Score: 4
Explanation: The document presents a mixed picture. While the company has a clear strategy and some positive aspects, the financial results are concerning, and there are significant risks and uncertainties. The company's non-compliance with Nasdaq listing requirements and the need for additional capital raises further contribute to a negative sentiment.
Positives
- The company has a diverse portfolio of seafood brands.
- The company emphasizes sustainable and traceable product sourcing.
- The company uses eco-friendly packaging, including patented green pouches.
- The company has a long-term strategy to create a vertically integrated seafood company.
Negatives
- The company has a history of recurring losses from operations and a net capital deficiency.
- The company is not currently in compliance with the Nasdaq minimum bid price requirement.
- The company is subject to a Mandatory Panel Monitor until June 11, 2025.
- The company has a limited public trading market for its common stock.
- The company is dependent on third parties for its operations and may be affected by supply chain interruptions and delays.
- The company does not have long-term agreements with many of its customers and suppliers.
Risks
- The company's ability to continue as a going concern is dependent on its ability to increase revenues and raise capital.
- The company faces risks related to the current global economic environment.
- The company may need to raise additional capital to fund its operations.
- The company is subject to the risk of product contamination and product liability claims.
- The company's operations are vulnerable to interruption or loss due to natural disasters and other events beyond its control.
- The company may be unable to manage its future growth effectively.
- The company is subject to the risk of variations in supply and fluctuations in the value of crab meat.
- The company is subject to the risk of product contamination and product liability claims.
- The company is subject to the risk of violations of applicable anti-corruption laws.
- The company is subject to the risk of intellectual property infringement or misappropriation claims by third parties.
- The company is subject to the risk of delisting from the Nasdaq Capital Market if it fails to comply with listing requirements.
- The company is subject to the risk of its common stock being deemed a penny stock which may reduce the value of an investment in the stock.
- The company is subject to the risk of its operating results for a particular period may fluctuate significantly or may fall below the expectations of investors or securities analysts.
Future Outlook
The company plans to grow organically by increasing its customer base and introducing new product lines, as well as strategically acquiring companies. The company also aims to scale its RAS business to reach production of 21,000 metric tons of steelhead salmon by 2028.
Industry Context
The document highlights the company's efforts to ensure ethical sourcing and sustainable practices, which are increasingly important in the seafood industry. The company also aims to expand its RAS business, which is a growing trend in aquaculture.
Comparison to Industry Standards
- The company competes with major integrated seafood companies such as Tri Union Frozen Products, Inc. (Chicken of the Sea Frozen Foods), Phillips Foods, Inc., Harbor Seafood, Inc., and Twin Tails Seafood Corp. in its traditional sustainable seafood business.
- The company's primary competitors in its RAS business are Aquabounty, Atlantic Sapphire, Aquacon, Nordic Aquafarms, Whole Oceans, West Coast Salmon and Pure Salmon.
- The company's use of sustainable and ethical packaging, including patented green pouches, differentiates it from competitors.
- The company's goal to reach production of 21,000 metric tons of steelhead salmon by 2028 is ambitious and would place it among the larger players in the RAS salmon farming industry.
Legal Proceedings
- The Company, through TOBC, filed a lawsuit in the Supreme Court of British Columbia against their landlords Steven Atkinson, Kathryn Atkinson and Janet Atkinson requesting a declaration that their commercial lease is valid.
Related Party Transactions
- The company has outstanding promissory notes to John Keeler, its Chief Executive Officer and Executive Chairman.
- John Keeler owns 95% of Bacolod, an exporter of pasteurized crab meat from the Philippines, and 95% of Bicol, a Philippine company, and an indirect supplier of crab meat via Bacolod to the Company.
Stakeholder Impact
- Shareholders face the risk of dilution due to the potential issuance of additional shares.
- Shareholders face the risk of a decline in the market price of the common stock due to the potential sale of shares by existing shareholders.
- Employees may be affected by the company's financial challenges and potential restructuring.
- Customers may be affected by potential supply chain disruptions and changes in product availability.
- Creditors face the risk of non-payment due to the company's financial challenges.
Next Steps
- The company will continue to seek opportunities to acquire companies that allow it to expand into new territories and diversify its product categories.
- The company will continue to scale its RAS business to reach production of 21,000 metric tons of steelhead salmon by 2028.
- The company will attend a hearing with the Nasdaq Hearings Panel on December 11, 2024, regarding its non-compliance with the minimum bid price requirement.
Key Dates
| Date | Description |
|---|---|
| 2019-11-26 | Date of Five Year Unsecured Promissory Note with Walter Lubkin Jr. |
| 2021-03-01 | Date of Loan Agreement with Keeler and Co. |
| 2021-03-31 | Date of Loan Agreement with Keeler and Co. |
| 2021-06-22 | Date of Ceba Loan Agreement |
| 2021-06-24 | Date of Ceba Loan Agreement |
| 2022-01-23 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2022-01-24 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2022-02-01 | Date of Gault Seafood LLC Asset Purchase Agreement |
| 2022-02-03 | Date of Gault Seafood LLC Asset Purchase Agreement |
| 2022-04-22 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2023-01-01 | Start date of various agreements and financial periods |
| 2023-01-31 | Date of Sales Agreement with Roth Capital Patners LLC |
| 2023-02-01 | Date of Gault Seafood LLC Asset Purchase Agreement |
| 2023-02-03 | Date of Gault Seafood LLC Asset Purchase Agreement |
| 2023-02-14 | Date of Aegis Capital Corp Agreement |
| 2023-05-16 | Date of ELOC Purchase Agreement with ClearThink Capital Partners, LLC |
| 2023-05-20 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2023-05-27 | Date of Purchase Agreement with Lind Global Fund Two LP |
| 2023-05-30 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2023-06-14 | Date of Agile Lending LLC Loan Agreement |
| 2023-06-16 | Date of Terminated Loan Agreement |
| 2023-06-21 | Date of Master Service Agreement with Afritex Ventures Inc. |
| 2023-06-23 | Date of Agile Lending LLC Loan Agreement |
| 2023-07-01 | Start date of various agreements and financial periods |
| 2023-07-27 | Date of Purchase Agreement with Lind Global Fund Two LP |
| 2023-08-22 | Date of Mark Crone Agreement |
| 2023-09-11 | Date of Securities Purchase Agreement |
| 2023-09-15 | Date of Securities Purchase Agreement with Lind Global Fund Two LP |
| 2023-10-01 | Start date of various agreements and financial periods |
| 2023-10-19 | Date of Agile Lending LLC Loan Agreement |
| 2024-01-01 | Start date of various agreements and financial periods |
| 2024-01-02 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-01-05 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-01-18 | Date of MCAPlus Agreement with ClearThink Capital |
| 2024-01-25 | Date of MCAPlus Agreement with ClearThink Capital |
| 2024-02-01 | Date of Master Service Agreement with Afritex Ventures Inc. |
| 2024-02-12 | Date of Option Agreement with Afritex Ventures Inc. |
| 2024-03-01 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-03-07 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-03-11 | Date of Option Agreement with Lind Global Fund IILP |
| 2024-04-16 | Date of Promissory Note with One Thousand Eight Hundred Diagonal Lending LLC |
| 2024-05-09 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-05-17 | Date of Promissory Note with FirstFire Global Opportunities Fund LLC |
| 2024-05-20 | Date of Master Service Agreement with Afritex Ventures Inc. |
| 2024-05-22 | Date of Hart Associates LLC Agreement |
| 2024-07-01 | Start date of various agreements and financial periods |
| 2024-07-25 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-08-01 | Start date of August Private Placement Offering |
| 2024-08-02 | Date of Security Agreement with Agile Lending LLC and Agile Capital Funding LLC |
| 2024-08-12 | Date of Jefferson Street Capital LLC Agreement |
| 2024-08-17 | Date of Promissory Note with FirstFire Global Opportunities Fund LLC |
| 2024-08-31 | End date of August Private Placement Offering |
| 2024-09-08 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
| 2024-09-09 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
| 2024-10-01 | Date of Promissory Note with One Thousand Eight Hundred Diagonal Lending LLC |
| 2024-10-08 | Date of NASDAQ Compliance Notice |
| 2024-10-18 | Date of Mark Crone Agreement |
| 2024-11-12 | Date of Vendor Agreement with Low Tide LLC |
| 2024-11-14 | Last reported sale price of common stock |
| 2024-11-15 | Date of share count for beneficial ownership |
| 2024-11-18 | Date of Registration Statement |
| 2024-12-11 | Date of NASDAQ Hearings Panel |
| 2025-03-14 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
| 2025-04-14 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
| 2025-05-14 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
| 2025-06-14 | Date of Promissory Note Two with One Thousand Eight Hundred Diagonal Lending LLC |
Keywords
seafood, crab meat, aquaculture, RAS, sustainable, promissory notes, common stock, capital raise, convertible notes, Nasdaq, securities, private placement, recirculating aquaculture systems, traceability, marine protein
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