Blue Star(US:BSFC)2020-11-16 22:20Revenue and Profit - Revenue for the three months ended September 30, 2020 decreased 21.7% to $3,980,151 compared to $5,081,164 for the same period in 2019 due to a decrease in poundage sold as a result of the COVID-19 pandemic[110] - Gross profit margin for the three months ended September 30, 2020 decreased to $546,362 from $671,507 for the same period in 2019, directly attributable to the reduction in overall revenue due to the pandemic[111] - Revenue for the nine months ended September 30, 2020 decreased 40.3% to $11,416,868 compared to $19,124,412 for the same period in 2019, impacted by a decrease in poundage sold due to the pandemic[119] - Gross profit margin for the nine months ended September 30, 2020 decreased to $952,140 from $2,692,697 for the same period in 2019, attributed to a reduction in pounds sold and a decrease in average selling price[121] Expenses and Income - Net income for the three months ended September 30, 2020 was $538, compared to a net loss of $1,288,238 for the same period in 2019, primarily due to reductions in salaries and wages, interest, and other expenses[118] - Commissions expense for the nine months ended September 30, 2020 increased to $105,983 from $54,657 for the same period in 2019, primarily due to the acquisition of Coastal Pride[122] - Other income for the nine months ended September 30, 2020 increased to $511,770 from $0 for the same period in 2019, mainly due to payroll protection program loan forgiveness and tariff reimbursements[125] - Interest expense for the nine months ended September 30, 2020 decreased to $704,809 from $748,120 for the same period in 2019, due to a decrease in average loans outstanding[127] - The Company reported a net loss of $4,344,042 for the nine months ended September 30, 2020, compared to a net loss of $3,480,331 for the same period in 2019, primarily due to a non-cash expense of $2,655,292[129] Cash Flow and Financing - Cash provided by operating activities increased to $3,944,053 for the nine months ended September 30, 2020, up from $942,066 for the same period in 2019, attributed to a reduction in inventory of $5,521,953[140] - The Company had cash of $68,288 as of September 30, 2020, with $60,461 being restricted cash, and a working capital deficit of $4,341,802[130] - Cash utilized in financing activities was $4,040,924 for the nine months ended September 30, 2020, compared to $1,000,051 for the same period in 2019, with a significant reduction in the revolving working capital line of credit[142] - The Company entered into a $14,000,000 revolving line of credit with ACF, which bears interest at 12.49% as of September 30, 2020[133] - The Company issued an unsecured promissory note for $344,762 related to the CARES Act Payroll Protection Program, which may be forgiven under certain conditions[139] - Cash used for investing activities increased to $54,351 for the nine months ended September 30, 2020, compared to $8,860 for the same period in 2019, due to fixed asset purchases[141] - The Company has approximately $2,910,000 of outstanding principal on demand promissory notes issued to its CEO, which are subordinated to ACF[134] - The Kenar Note, with an outstanding principal of $872,500 as of September 30, 2020, has an interest rate of 18% per annum and is secured by shares of common stock[136] COVID-19 Impact - The Company is unable to estimate the ongoing effects of the COVID-19 pandemic on its operations or financial condition for the next 12 months[132]