“These factors raise substantial doubt as to the company’s ability to continue as a going concern.”
Blue Star Foods, owner of land-based steelhead farmer Taste of BC, announced Thursday a public offering of 10.7 million shares as it looks to raise $5 million as part of an agreement to avoid being delisted by the Nasdaq stock exchange.
The company has produced steelhead under the brand name Little Cedar Falls for distribution in Canada since 2013.
Blue Star’s share price has been below the required $1.00 per share for an extended period of time. Should the company be delisted, its stock price could plunge further, threatening its ability to raise capital or pursue restructuring efforts.
Earlier this year, the company implemented a reverse stock split in order to regain compliance with Nasdaq’s bid price rule. A reverse stock split consolidates the number of existing shares of stock held by shareholders into fewer shares.
In its recent semi-annual report ending June 30, the company disclosed a net loss of $3.4 million. Furthermore, the firm revealed an accumulated deficit amounting to $32.7 million and a working capital deficit of slightly over $1.7 million. This includes a stockholder debt of $830,339.
In a subsequent quarterly filing with the Securities and Exchange Commission (SEC), the company stated, “These factors raise substantial doubt as to the company’s ability to continue as a going concern.”