Blue Star Foods has secured additional funding to help it grow its soft-shell crab recirculating aquaculture system production.
Miami, Florida, U.S.A.-based Blue Star is exploring an expansion of its RAS facility in Beaufort County, South Carolina, U.S.A., after buying Atlantic blue crab RAS operator Gault Seafood in 2021 Blue Star said in 2023 it plans to invest USD 11.4 million (EUR 10.3 million) into the project.
Through the new funding initiative, Blue Star has entered into a securities purchase agreement with an unnamed investor for a promissory note in the principal amount of USD 300,000 (EUR 281,000) and 500,000 shares of its restricted common stock. Blue Star also issued a convertible promissory note to an institutional investor in the principal amount of USD 138,000 (EUR 129,000).
The new funding will help the company strengthen its balance sheet and grow revenue, Blue Star CEO John Keeler said.
“We believe this quarter will finish strong with an increased volume in soft-shell crabs operations and an increased demand for gourmet value-added meals through 2,776 retail outlets. We also intend to roll out four new products at the club store segment, commencing in late June and throughout the summer,” he said. “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.”
Keeler said he is “fully committed to grow revenue and profitably and explore flexible and less dilutive financing opportunities” and is confident in the company’s efforts to remain listed on the Nasdaq exchange.
In addition to new funding, Blue Star entered into a supply agreement to provide manufacturing of meals to the U.S. military via a partnership with Eagle Rising food solutions.
Blue Star will create 13 “meticulously crafted meal options, each designed to meet the rigorous nutritional standards and diverse preferences of military personnel” to 14 U.S. military bases. Every meal is produced in the U.S., “leveraging locally sourced ingredients to reinforce our dedication to quality, sustainability, and the bolstering of domestic economies,” Blue Star said.
“This pivotal agreement facilitates the provision of premium products distributed under the renowned Eagle Rising Brand, a service-disabled veteran-owned small business, directly supporting the brave men and women serving in the United States military,” the company said.
The Miami, Florida, U.S.A.-based company is still engaged in a court battle with struggling seafood restaurant chain Red Lobster. Orlando, Florida, U.S.A.-based Red Lobster Sourcing sued Blue Star in July 2023 over an alleged breach of contract due to Blue Star’s inability to provide enough crabmeat during Covid-19.
The moves come after the company managed to remain listed with the Nasdaq Stock Exchange following a 10 April Nasdaq Hearings Panel hearing. The company first started trading on the stock exchange in 2021, but its low stock price as of December 2022 had it facing the threat of delisting from the exchange.
The Nasdaq panel granted Blue Star’s request for continued listing, provided the company's stock has a closing bid price of USD 1.00 (EUR 0.94) or more per share for 10 consecutive trading sessions by 30 May 2024, according to Nasdaq.
