Blue Star Foods

Kurta Law is investigating potentially unsuitable recommendations of Blue Star Foods (BSFC). Regulations like FINRA Rule 2111 and Regulation Best Interest require brokers to recommend suitable investments, which are tailored to an investor’s profile. High-risk investments are often unsuitable and lead to losses for unsuspecting investors.

If you have concerns about your investment in Blue Star Foods, contact (877) 600-0098 or email info@kurtalawfirm.com to speak to one of our securities attorneys for free.

What is Blue Star Foods?

Blue Star Foods (BSFC) is a sustainable seafood company that owns and operates several subsidiaries:

• John Keeler & Co. (dba Blue Star Foods), importing, packaging, and selling pasteurized crab meat
• Coastal Pride Seafood LLC, importing pasteurized and fresh crab meat
• Taste of BC Aquafarms, Inc., steelhead salmon farming via recirculating aquaculture systems

As stated in its prospectus, Blue Star Foods’ status as an emerging growth company exempts it from certain accounting disclosure requirements.

What are the Risks Associated with Blue Star Foods?

The prospectus describes Blue Star Foods as a “highly speculative” investment and identifies a number of key risks regarding this stock’s liquidity and potential value.

Limited Liquidity

According to the prospectus, there is “no established public trading market for the pre-funded warrants being offered” and Blue Star Foods has no expectation that a market will develop in the future.

Further, the company has no intention to apply for listing on any securities exchange. The lack of an active market limits investor’s ability to trade their shares.

Potential Market Delisting

Blue Star Foods has received several letters from the Nasdaq Capital Market notifying them that their stock failed to meet the minimum $1.00 per share bid requirement. In a recent letter, received on May 17, 2023, provided the company with 180 days to achieve compliance by reaching at least $1.00/share for ten consecutive days.

Loss of Share Value

The prospectus warns that investors will experience immediate dilution in the value of their shares as its offering price is “substantially higher” than its net tangible book value. This dilution could be exacerbated if Blue Star Foods issues more stock or other securities in the future.

The company’s stock price could also significantly decline if investors sell large quantities of shares at the same time.

Aegis Capital Corp. Underwriting

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Do You Have Concerns Related to Your Shares of Blue Star Foods?

If you believe Blue Star Foods was overly risky for your risk profile, consider reaching out to a Kurta Law securities attorney. Our securities attorneys regularly take on cases of unsuitably risky investment recommendations and can help you get a fair settlement. Call (877) 600-0098 or email info@kurtalawfirm.com.