Blue Star(US:BSFC)2022-05-12 16:00Revenue and Profitability - Revenue for the three months ended March 31, 2022 increased 114.2% to $5,324,302 compared to $2,485,891 for the same period in 2021, driven by higher market prices and new product sales [132]. - Gross profit for the three months ended March 31, 2022 increased to $487,739 from $302,779 in the same period of 2021, reflecting higher market prices and new product sales [134]. Costs and Expenses - Cost of goods sold for the three months ended March 31, 2022 rose to $4,836,563 from $2,183,112 in the same period of 2021, attributed to price increases [133]. - Net loss for the three months ended March 31, 2022 was $1,053,866, an increase from a net loss of $478,104 for the same period in 2021, primarily due to increased salaries and other expenses related to acquisitions [142]. - Interest expense increased to $234,716 for the three months ended March 31, 2022 from $110,534 in the same period of 2021, due to the amortization of convertible debt discount [141]. Cash Flow - Cash used in operating activities during the three months ended March 31, 2022 was $3,013,910, a significant decrease from cash provided by operating activities of $462,624 in the same period of 2021 [146]. - Cash provided by financing activities for the three months ended March 31, 2022 was $5,256,418, compared to cash used in financing activities of $653,675 for the same period in 2021, mainly due to convertible debt net proceeds of $4,762,855 [148]. Financing Activities - The company raised approximately $3,600,000 in net proceeds from an underwritten public offering of 800,000 shares at $5.00 per share, which closed on November 5, 2021 [157]. - A secured, two-year, interest-free convertible promissory note of $5,750,000 was issued to Lind Global Fund II LP, along with a five-year warrant to purchase 1,000,000 shares at $4.50 per share [160]. - The outstanding principal under the note is payable in 18 monthly installments of $333,333, starting July 24, 2022 [161]. - The note is convertible into common stock at $5.00 per share, subject to adjustments, and Lind has rights to purchase up to 10% of new securities in future capital raising transactions [168]. - If the company fails to maintain its common stock listing, the note will become due and payable, allowing Lind to convert at a reduced price [164]. Company Financial Position - The company had cash of $2,980,672 and a working capital surplus of $5,561,782 as of March 31, 2022, including $910,000 in subordinated stockholder loans [143]. - The outstanding balance owed to Lighthouse Financial Corp. as of March 31, 2022 was $2,746,763 [153]. - The company issued 6% demand promissory notes totaling $2,910,000 to CEO John Keeler, with approximately $910,000 principal outstanding as of March 31, 2022 [154]. - The company made principal payments of $50,000 during the three months ended March 31, 2022 [154]. - The company has no off-balance sheet arrangements currently [171]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [172]. Acquisitions - The company acquired soft-shell crab operations for a total purchase price of $359,250 in cash and 167,093 shares of common stock, valued at $359,250 [122].