Miami-based seafood group Blue Star Foods has received $5 million (€4.4 million) in financing that the company needs to help it fulfill orders amid brisk demand for its product, company CEO John Keeler told IntraFish.
US-based Lind Global Fund II LP provided the funding through a two-year, interest-free convertible note. The company will over the two years pay back the note in the principal amount of $5.75 million (€5.1 million).
Lind Global Fund II has common stock purchase warrants to acquire up to one million shares of common stock of Blue Star Foods at $4.50 (€4.00)per share.
In connection with financing, the company granted Lind Global Fund II LP a first priority security interest and lien upon all of its assets.
Expansion underway
In December, Blue Star Foods announced it is acquiring the assets of Gault Seafood, a company using a recirculating aquaculture system (RAS) to farm Atlantic blue crab.
Gault Seafood has been in operation for close to 20 years and is based in Beaufort, South Carolina.
Blue Star Foods has for years specialized in crab but recently moved into land-based salmonid farming via its acquisition of steelhead salmon farming operation Taste of BC Aquafarms.
Gault Seafood has developed RAS technology that will allow Blue Star Foods to modify the molting cycle of Atlantic blue crab so it can harvest them in the off-season, the company said.
The Gault Seafood deal is part of Blue Star Foods' acquisition strategy, which is to purchase new innovative technologies or companies that diversify its offering of marine protein species.
Last year, Blue Star Foods acquired land-based steelhead salmon farming operation Taste of BC Aquafarms. At the time, Keeler said company plans to produce 21,000 metric tons of product by 2028.
In 2019, the company acquired South Carolina-based Coastal Pride Company, through its John Keeler & Co. subsidiary. Coastal Pride specializes in importing pasteurized and fresh crabmeat from Mexico and Latin America, serving North American customers.
Last year, the company changed trading platforms from the OTC market to the Nasdaq Stock Market. Keeler said the company ultimately opted to apply for a listing on the NASDAQ "because it is more favorable for food-tech companies."
Blue Star Foods has struggled in recent years and has made moves to turn around the company. Last year, it saw its revenue sink by 40.8 percent to $14.1 million (€12.2 million) due to a sharp decline in volume sales from COVID-related shutdowns.
