Filed
pursuant to Rule 424(b)(5)
Registration
Statement No. 333-268564
| Prospectus Supplement |
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| (To Prospectus dated December 6, 2022) |
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BLUE
STAR FOODS CORP.
8,200,000
Shares of Common Stock
Pre-Funded
Warrants to Purchase up to 800,000 Shares of Common Stock
We
are offering 8,200,000 shares of our common stock pursuant to this prospectus supplement and the accompanying prospectus. We are
also offering pre-funded warrants to purchase up to an aggregate of 800,000 shares of common stock to institutional investors
whose purchase of shares of common stock in this offering would otherwise result in such purchasers, together with their affiliates and
certain related parties, beneficially owning more than 4.99% (or, at the election of the purchasers, 9.99%) of our outstanding shares
of common stock immediately following the closing of this offering. Subject to limited exceptions, a holder of pre-funded warrants will
not have the right to exercise any portion of its pre-funded warrants if the holder, together with its affiliates, would beneficially
own in excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of common stock outstanding immediately after
giving effect to such exercise. This offering also relates to the shares of common stock issuable upon exercise of any pre-funded warrants
sold in this offering.
Each
pre-funded warrant will have an exercise price per share of common stock equal to $0.001 and will be exercisable at any time after its
original issuance until exercised in full.
Our
common stock is traded on the Nasdaq Capital Market, or NASDAQ, under the symbol “BSFC.” There is no established trading
market for the pre-funded warrants, and we do not expect a market to develop. We do not intend to apply for a listing for the pre-funded
warrants on any securities exchange or other nationally recognized trading system. On February 8, 2023, the closing sale price of our
common stock on NASDAQ was $0.37 per share.
Investing
in our securities is highly speculative and involves a high degree of risk. You should read carefully and consider the information contained
in and incorporated by reference under “Risk Factors” beginning on page S-7 of this prospectus supplement, and the risk factors
contained in other documents incorporated by reference.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
| | |
Per Share | | |
Per Pre-Funded Warrant | | |
Total | |
| Public offering price | |
$ | 0.200 | | |
$ | 0.199 | | |
$ | 1,799,200 | |
| Underwriting discounts and commissions(1) | |
$ | 0.012 | | |
$ | 0.012 | | |
$ | 108,000 | |
| Proceeds, before expenses, to us(2) | |
$ | 0.188 | | |
$ | 0.187 | | |
$ | 1,691,200 | |
| (1) |
We have agreed to reimburse the underwriter for certain expenses. See “Underwriting” for a description of the compensation
payable to the underwriter. |
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|
| (2) |
The above
summary of offering proceeds does not give effect to any proceeds from the exercise of the pre-funded warrants being issued in this
offering. |
We
have granted the underwriter an option to purchase up to an additional 1,350,000 shares of our common stock and/or pre-funded warrants
(equal to 15% of the number of shares of common stock and/or pre-funded warrants sold in this offering) from us, at a price of $0.20
per share and $0.199 per pre-funded warrant, for 45 days after the date of the closing of this offering.
Delivery
of the shares of our common stock and pre-funded warrants against payment is expected to be made on or about February 14, 2023, subject
to customary closing conditions.
Sole
Book-Running Manager
AEGIS
CAPITAL CORP.
The
date of this prospectus supplement is February 10, 2023.
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
You
should rely only on the information we have provided or incorporated by reference in this prospectus supplement. We have not authorized
anyone to provide you with information different from that contained or incorporated by reference in this prospectus supplement.
This
prospectus supplement is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where
it is lawful to do so.
You
should assume that the information contained in this prospectus supplement is accurate only as of their respective dates and that any
information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of
the time of delivery of this prospective supplement for any sale of securities.
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
prospectus supplement and the accompanying prospectus relate to the offering of shares of our common stock and pre-funded warrants. Before
buying any shares of our common stock or pre-funded warrants offered hereby, we urge you to carefully read this prospectus supplement
and the accompanying prospectus, together with the information incorporated herein and therein by reference as described under the headings
“Where You Can Find More Information” and “Incorporation of Certain Information by Reference.” These documents
contain important information that you should consider when making your investment decision.
This
prospectus supplement is part of a registration statement (File No.: 333-268564) that we filed with the Securities and Exchange Commission,
or SEC, utilizing a shelf registration process, which registration statement became effective on December 6, 2022. Under this shelf registration
process, we may, from time to time, sell common stock and other securities, including this offering.
This
document is in two parts. The first part is this prospectus supplement, which describes the specific terms of this offering of common
stock and pre-funded warrants and also adds to and updates information contained in the accompanying prospectus and the documents incorporated
by reference into this prospectus supplement and the accompanying prospectus. The second part, the accompanying prospectus dated December
6, 2022, including the documents incorporated by reference, provides more general information, some of which may not apply to this offering.
Generally, when we refer to this prospectus supplement, we are referring to both parts of this document combined.
To
the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information
contained in any document incorporated by reference into this prospectus supplement that was filed with the SEC before the date of this
prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement. If any statement in one of
these documents is inconsistent with a statement in another document having a later date—for example, a document incorporated by
reference into this prospectus supplement—the statement in the document having the later date modifies or supersedes the earlier
statement.
You
should rely only on the information contained in, or incorporated by reference into this prospectus supplement and in any free writing
prospectus that we may authorize for use in connection with this offering. We have not, and Aegis Capital Corp. has not, authorized any
other person to provide you with different information. If anyone provides you with different or inconsistent information, you should
not rely on it. We are not, and Aegis Capital Corp. is not, making an offer to sell or soliciting an offer to buy our securities in any
jurisdiction in which an offer or solicitation is not authorized or in which the person making that offer or solicitation is not qualified
to do so or to anyone to whom it is unlawful to make an offer or solicitation. You should assume that the information appearing in this
prospectus supplement, the documents incorporated by reference into this prospectus supplement, and in any free writing prospectus that
we may authorize for use in connection with this offering, is accurate only as of the date of those respective documents. Our business,
financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus supplement,
the documents incorporated by reference into this prospectus supplement, and any free writing prospectus that we may authorize for use
in connection with this offering, in their entirety before making an investment decision. You should also read and consider the information
in the documents to which we have referred you in the sections of this prospectus supplement entitled “Where You Can Find More
Information” and “Incorporation by Reference.”
We
are offering to sell, and seeking offers to buy, shares of common stock and our pre-funded warrants only in jurisdictions where offers
and sales are permitted. The distribution of this prospectus supplement and the offering of the common stock and pre-funded warrants
in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus supplement
must inform themselves about, and observe any restrictions relating to, the offering of the common stock and pre-funded warrants and
the distribution of this prospectus supplement outside the United States. This prospectus supplement does not constitute, and may not
be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement
by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
We
obtained statistical data, market data and other industry data, and forecasts used in this prospectus supplement, the accompanying prospectus
and the documents incorporated by reference into the prospectus and this prospectus supplement from market research, publicly available
information and industry publications. Industry publications generally state that they obtain their information from sources that they
believe to be reliable, but they do not guarantee the accuracy and completeness of the information. Similarly, while we believe that
the statistical data, market data and other industry data and forecasts used herein are reliable, we have not independently verified
the data, and we do not make any representation as to the accuracy of the information.
We
further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document
that is incorporated by reference into the prospectus supplement and accompanying prospectus were made solely for the benefit of the
parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreement, and should
not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate
only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs.
Unless
otherwise stated, all references to “us,” “our,” “we,” the “Company” and similar designations
refer to Blue Star Foods Corp. and its consolidated subsidiaries. Our logo, trademarks and service marks are the property of Blue Star
Foods Corp. and its consolidated subsidiaries. Other trademarks or service marks appearing in this prospectus supplement are the property
of their respective holders.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement, the accompanying prospectus, and the documents incorporated by reference herein contains forward-looking statements
that reflect our current expectations and views of future events. The forward-looking statements are contained principally in the sections
included or incorporated by reference herein entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations.” Readers are cautioned that known and unknown risks, uncertainties and other
factors, including those over which we may have no control and others listed in the “Risk Factors” section of this prospectus
supplement, may cause our actual results, performance or achievements to be materially different from those expressed or implied by the
forward-looking statements.
You
can identify some of these forward-looking statements by words or phrases such as “may,” “will,” “expect,”
“anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,”
“is/are likely to,” “potential,” “continue” or other similar expressions. We have based these forward-looking
statements largely on our current expectations and projections about future events that we believe may affect our financial condition,
results of operations, business strategy and financial needs. These forward-looking statements include statements relating to:
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the
fact that a significant portion of our revenues are derived from a single product, crab meat, and therefore we are highly susceptible
to changes in market demand, which may be affected by factors over which we have limited or no control;
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our exposure to the risk
of product contamination and product liability claims; |
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our vulnerability to declines
in discretionary consumer spending; |
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our vulnerability to a
shutdown, damage to any of our farms, or lack of availability of power, fuel, oxygen, eggs, water, or other key components needed
for our operations; |
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the difficulty of efficiently
and cost-effectively producing and sell salmon at large commercial scale; |
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the fact that we do not
have long-term agreements with many of our customers and suppliers; |
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the fact that our competitors
include companies with brand names that have better market recognition than ours or have stronger marketing and distribution channels
than we do; |
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our exposure to increased
regulation of the fishing industry; |
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our dependence upon international
supply chains; |
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difficulties with managing
foreign and geographically dispersed operations; |
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having to comply with various
U.S. and international laws, including export control laws and the FCPA, and anti-money laundering laws; |
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changes in uncertainties
relating to foreign rules and regulations; |
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tariffs, export or import
restrictions, restrictions on remittances abroad, imposition of duties or taxes that limit our ability to import product; |
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limitations on our ability
to enter into cost-effective arrangements with distributors, or at all; |
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fluctuations in foreign
currency exchange rates; |
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imposition of limitations
on production, sale or export in foreign countries; |
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imposition of limitations
on or increase of withholding and other taxes on remittances and other payments by foreign processors or joint ventures; |
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imposition of differing
labor laws and standards; |
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economic, political or
social instability in foreign countries and regions; |
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an inability, or reduced
ability, to protect our intellectual property, including any effect of compulsory licensing imposed by government action; |
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availability of government
subsidies or other incentives that benefit competitors in their local markets that are not available to us; |
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difficulties in recruiting
and retaining personnel, and managing international operations; and |
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less developed infrastructure
in foreign markets. |
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other risks and uncertainties
inherent in our business, including those described under Item 1A. “Risk Factors” in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2021, and those risks and uncertainties that may be identified in our Quarterly Reports on Form
10-Q and our other filings with the SEC and/or press releases from time to time. |
These
forward-looking statements involve numerous risks and uncertainties. Although we believe that our expectations expressed in these forward-looking
statements are reasonable, our expectations may later be found to be incorrect. Our actual results of operations or the results of other
matters that we anticipate could be materially different from our expectations. Important risks and factors that could cause our actual
results to be materially different from our expectations are generally set forth in “Risk Factors,” “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” “Regulation” and
other sections included or incorporated by reference in this prospectus supplement. You should thoroughly read this prospectus supplement
and the documents incorporated herein by reference with the understanding that our actual future results may be materially different
from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The
forward-looking statements made in this prospectus supplement relate only to events or information as of the date on which the statements
are made in or incorporated by reference in this prospectus supplement. Except as required by law, we undertake no obligation to update
or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date
on which the statements are made or to reflect the occurrence of unanticipated events. You should read this prospectus supplement, the
documents incorporated by reference into this prospectus supplement and the documents we have filed as exhibits to the registration statement,
of which this prospectus supplement forms a part, completely and with the understanding that our actual future results may be materially
different from what we expect.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus supplement. This summary does not contain all the information
that you should consider before investing in our Company. You should carefully read the entire prospectus supplement and the accompanying
prospectus, including all documents incorporated by reference herein. In particular, attention should be directed to our “Risk
Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and the financial
statements and related notes thereto contained herein or otherwise incorporated by reference hereto, before making an investment decision.
Overview
We
are an international sustainable marine protein company that owns and operates several portfolio companies with an emphasis on environmental,
social and governance values. We seek to create a vertically integrated seafood company that offers customers high quality products while
maintaining a focus on our core values of delivering food safety, traceability and certified resource sustainability. Our companies include:
John
Keeler & Co. Inc. (“Keeler & Co.”), doing business as Blue Star Foods, which imports, packages and sells refrigerated
pasteurized crab meat sourced primarily from Southeast Asia and other premium seafood products;
Coastal
Pride Seafood LLC (“Coastal Pride”), which imports pasteurized and fresh crab meat sourced primarily from Mexico and
Latin America and sells premium branded label crab meat throughout North America; and
Taste
of BC Aquafarms, Inc. (“TOBC”), a land-based recirculating aquaculture systems (“RAS”) salmon farming operation,
which sells its steelhead salmon to distributors in Canada.
Our
long-term strategy is to create a vertically integrated seafood company that offers customers high quality products while maintaining
a focus on our core values of delivering food safety, traceability and certified resource sustainability.
We
plan to grow the Company organically by continuing to grow our customer base and introducing new high-value product lines and categories,
as well as strategically acquiring companies that focus on additional species and proprietary technologies that we believe we can integrate
into a larger, diversified company.
Implications
of Being an Emerging Growth Company and Smaller Reporting Company
We
qualify as an “emerging growth company” under the Jumpstart our Business Startups Act (“JOBS Act”). As a result,
we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth
company, we will not be required to:
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have
an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
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comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e.,
an auditor discussion and analysis); |
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submit
certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency”
and pay ratio; and |
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disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons
of the CEO’s compensation to median employee compensation. |
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In
other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements
may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We
will remain an “emerging growth company” for up to five years from the date of the first sale of our common stock of the
issuer pursuant to an effective registration statement, or until the earliest of (i) the last day of the first fiscal year in which our
total annual gross revenues exceed $1.235 billion, (ii) the date that we become a “large accelerated filer” as defined in
Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700
million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more
than $1 billion in non-convertible debt during the preceding three year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals
or exceeds $700 million as of the end of that year’s second fiscal quarter.
Corporate
Information
We
were incorporated on October 17, 2017 in the State of Delaware as a blank check company to be used as a vehicle to pursue a business
combination. Prior to the Merger, we engaged in organizational efforts. Following the Merger, we discontinued our prior activities of
seeking a business for a merger or acquisition and acquired the business of John Keeler & Co. Inc., d/b/a Blue Star Foods, a Florida
corporation formed on May 5, 1995. Our executive offices are located at 3000 NW 109th Avenue, Miami, Florida 33172 and our telephone
number is (305) 836-6858. Our website address is https://bluestarfoods.com/. Except for any documents that are incorporated by
reference into this prospectus supplement that may be accessed from our website, the information available on or through our website
is not part of this prospectus supplement.
THE
OFFERING
The
following summary contains basic information about this offering. The summary is not intended to be complete. You should read the full
text and more specific details contained elsewhere in this prospectus supplement and the accompanying prospectus.
| Common stock
offered by us: |
|
8,200,000
shares of our common stock, par value $0.0001. |
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Pre-funded
warrants offered by us:
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Pre-funded
warrants to purchase up to an aggregate of 800,000 shares of common stock. We are
offering the pre-funded warrants to institutional investors whose purchase of shares of common
stock in this offering would otherwise result in such purchasers, together with their affiliates
and certain related parties, beneficially owning more than 4.99% (or, at the election of
the purchasers, 9.99%) of our outstanding shares of common stock immediately following the
closing of this offering. Each pre-funded warrant is exercisable for one share of common
stock. Each pre-funded warrant is being sold for a price of $0.199. Each pre-funded warrant
will have an exercise price per share of common stock of $0.001, will be immediately exercisable
and may be exercised at any time until exercised in full. This prospectus supplement also
relates to the offering of the shares of common stock issuable upon exercise of the pre-funded
warrants. The exercise price and number of shares of common stock issuable upon exercise
will be subject to certain further adjustments as described herein.
|
| Common stock to be outstanding
after the offering |
|
37,540,477
shares of our common stock, assuming all of the pre-funded warrants issued in this offering are exercised. |
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| Option to purchase additional
shares |
|
We
have granted the underwriter an option for a period of up to 45 days from the date of the closing of the offering to purchase up
to an aggregate of 1,350,000 additional shares of our common stock and/or pre-funded warrants (representing 15% of the shares
of common stock and/or pre-funded warrants sold in the offering) at the price set forth on the cover page of this prospectus supplement,
less the underwriting discounts and commissions.
|
| Use of Proceeds |
|
We
intend to use the net proceeds from these sales for general corporate purposes, including working capital, operating expenses, and
capital expenditures. We
may also use a portion of the net proceeds to acquire or make investments in businesses, products, and offerings, although we do
not have agreements or commitments for any material acquisitions or investments at this time. See “Use of Proceeds” on
page S-8 of this prospectus supplement. |
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Risk
Factors
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An
investment in our securities is highly speculative and subject to substantial risks. You should consider the “Risk
Factors” and the “Cautionary Note Regarding Forward-Looking Statements” included and incorporated by reference
in this prospectus supplement and the accompanying prospectus, including the risk factors incorporated by reference from our filings
with the SEC. |
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| Nasdaq Capital Market
symbol |
|
Our
common stock is listed on the Nasdaq Capital Market under the symbol “BSFC.” The shares of common stock offered hereby
and the shares of common stock issuable upon exercise of the pre-funded warrants will be listed on the Nasdaq Capital Market. We
do not intend to list the pre-funded warrants on the Nasdaq Capital Market, any other national securities exchange or any other nationally
recognized trading system |
The
number of shares of common stock shown above to be outstanding after this offering is based on 28,540,477 shares of our common
stock outstanding as of February 8, 2023 and excludes the following as of that date:
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4,161,633 shares of our common stock
issuable upon the exercise of stock options; |
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1,413,500 shares of our common stock issuable upon
exercise of warrants; and |
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2,666,664
shares of our common stock that may be issued upon conversion of a secured, two-year, interest-free convertible promissory note and
1,000,000 shares of our common stock that may be issued upon exercise of a common stock purchase warrant that we issued to Lind Global Fund II LP, a Delaware limited partnership, on
January 24, 2022. |
Unless
otherwise indicated, all information in this prospectus assumes no exercise or conversion of the outstanding Note, warrants or stock
options described above.
RISK
FACTORS
Investing
in our securities is highly speculative and involves a high degree of risk. Before deciding whether to invest in our securities, you
should carefully consider the risk factors we describe in this prospectus supplement, the accompanying prospectus, and in any related
free writing prospectus that we may authorize to be provided to you or in any report incorporated by reference into this prospectus supplement,
including our Annual Report on Form 10-K for the year ended December 31, 2021, or any Annual Report on Form 10-K or Quarterly Report
on Form 10-Q that is incorporated by reference into this prospectus supplement after the date of this prospectus supplement. Although
we discuss key risks in those risk factor descriptions, additional risks not currently known to us or that we currently deem immaterial
also may impair our business. Our subsequent filings with the SEC may contain amended and updated discussions of significant risks. We
cannot predict future risks or estimate the extent to which they may affect our financial performance.
Risks
Related to This Offering
You
will experience immediate and substantial dilution.
Because
the price per share of our common stock being offered is substantially higher than the net tangible book value per share of our common
stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. If you
purchase shares of common stock in this offering, you will suffer immediate and substantial dilution of $0.10 per share in the
net tangible book value of the common stock. In addition, we may issue additional securities in the future, including shares of common
stock, securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or substantially
similar securities. The issuance of these securities may cause further dilution to our stockholders. The exercise of outstanding stock
options and the vesting of outstanding restricted stock units may also result in further dilution of your investment. See the section
entitled “Dilution” below for a more detailed discussion of the dilution you would incur if you purchase securities in this
offering.
Management
will have broad discretion as to the use of the proceeds from this offering and may not use the proceeds effectively.
Because
we have not designated the amount of net proceeds from this offering to be used for particular purposes, our management will have broad
discretion as to the application of the net proceeds from this offering and could use them for purposes other than those contemplated
at the time of the offering. Our management may use the net proceeds for corporate purposes that may not improve our financial condition
or market value.
You
may experience future dilution as a result of future equity offerings.
In
order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into
or exchangeable for our common stock at prices that may not be the same as the price per share in this offering. We may sell shares or
other securities in any other offering at a price per share that is less than the price per share paid by investors in this offering,
and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per
share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future
transactions may be higher or lower than the price per share paid by investors in this offering.
A
substantial number of shares of our common stock could be sold into the public market in the near future, which could depress our stock
price.
Sales
of substantial amounts of our common stock in the public market could reduce the prevailing market prices for our common stock. If our
existing stockholders sell a large number of shares of our common stock, or the public market perceives that existing stockholders might
sell shares of common stock, the market price of our common stock could decline significantly. These sales might also make it more difficult
for us to sell equity securities at a time and price that we deem appropriate.
There
is no public market for the pre-funded warrants being offered in this offering.
There
is no established public trading market for the pre-funded warrants being offered in this offering, and we do not expect a market to
develop. In addition, we do not intend to apply to list the pre-funded warrants on any securities exchange or nationally recognized trading
system. Without an active market, the liquidity of the pre-funded warrants will be limited.
Risks
Related to Our Common Stock
We
are not in compliance with The NASDAQ Capital Market $1.00 minimum bid price requirement and failure to maintain compliance with this
standard could result in delisting and adversely affect the market price and liquidity of our common stock.
Our
common stock is currently traded on the Nasdaq Capital Market, or NASDAQ, under the symbol “BSFC.” If we fail to meet any
of the continued listing standards of NASDAQ, our common stock will be delisted. These continued listing standards include specifically
enumerated criteria, such as a $1.00 minimum closing bid price.
On
November 17, 2022, we received a letter from NASDAQ advising that the Company did not meet the minimum $1.00 per share bid price requirement
for continued inclusion on NASDAQ pursuant to NASDAQ Marketplace Listing Rule 5550(a)(2). We initially have a period of 180 calendar
days, or until May 16, 2023, to regain compliance. If at any time before May 16, 2023, the closing bid price of the our common stock
closes at or above $1.00 per share for a minimum of ten consecutive business days, NASDAQ will provide written notification that the
Company has achieved compliance with the minimum bid requirement. If we do not regain compliance with the minimum bid requirement during
the initial 180 calendar day period, the Company may be eligible for an additional 180 calendar day compliance period. To qualify, the
Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing
standards for the Nasdaq Capital Market, with the exception of the minimum bid requirement, and would need to provide written notice
of our intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary.
In
order to satisfy this requirement, the Company intends to continue actively monitoring the bid price for its common stock between now
and May 16, 2023 and will consider available options to resolve the deficiency and regain compliance with the minimum bid price requirement.
While we intend to regain compliance with the minimum bid price rule, there can be no assurance that we will be able to maintain continued
compliance with this rule or the other listing requirements of NASDAQ. If we are unable to meet these requirements, we would receive
another delisting notice from NASDAQ for failure to comply with one or more of the continued listing requirements. If our common stock
were to be delisted from NASDAQ, trading of our common stock most likely will be conducted in the over-the-counter market on an electronic
bulletin board established for unlisted securities such as the OTC Markets or in the “pink sheets.” Such a downgrading in
our listing market may limit our ability to make a market in our common stock and may impact purchases or sales of our securities.
USE
OF PROCEEDS
We
estimate that the proceeds from this offering, after deducting estimated offering expenses payable by us and underwriting discounts
and commissions, and excluding the proceeds, if any, from the subsequent exercise of the pre-funded warrants offered and issued
pursuant to this offering, will be approximately $1.8 million (or approximately $2.0 million if the underwriter’s option
to purchase additional shares is exercised in full). We intend to use the net proceeds of this offering for general
corporate purposes, including working capital, operating expenses, and capital expenditures.
We
may also use a portion of the net proceeds to acquire or make investments in businesses, products, and offerings, although we do not
have agreements or commitments for any material acquisitions or investments at this time.
However,
the nature, amounts and timing of our actual expenditures may vary significantly depending on numerous factors. As a result, our management
has and will retain broad discretion over the allocation of the net proceeds from this offering. We may find it necessary or advisable
to use the net proceeds from this offering for other purposes, and we will have broad discretion in the application of net proceeds from
this offering.
DIVIDEND
POLICY
We
have never paid any cash dividends on our capital stock and do not anticipate paying any cash dividends on our common stock in the foreseeable
future. We intend to retain future earnings to fund ongoing operations and future capital requirements. Any future determination to pay
cash dividends will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations,
capital requirements and such other factors as the board of directors deems relevant.
DILUTION
If
you invest in our common stock or pre-funded warrants, your interest will be diluted immediately to the extent of the difference between
the public offering price per share or pre-funded warrant, as applicable, and the adjusted net tangible book value per share of our common
stock after this offering.
Our
net tangible book value on September 30, 2022 was approximately $1,958,341, or $0.08 per share. “Net tangible book value”
is total assets minus the sum of liabilities and intangible assets. “Net tangible book value per share” is net tangible book
value divided by the total number of shares outstanding.
After
giving effect to our sale of 8,200,000 shares of our common stock at a public offering price of $0.20 per share and pre-funded warrants
to purchase 800,000 shares of our common stock at the public offering price of $0.199 per pre-funded warrant, including shares of common
stock issuable upon exercise of the pre-funded warrants but excluding any resulting accounting associated therewith, excluding the exercise
of the underwriter’s option to purchase additional shares, and after deducting underwriting discounts, commissions and estimated
offering expenses payable by us, our pro forma net tangible book value as of September 30, 2022 would have been $3,516,341, or $0.10
per share. This represents an immediate increase in net tangible book value of $0.02 per share to our existing stockholders and an immediate
dilution of $0.10 per share to investors participating in this offering. The following table illustrates this dilution per share to investors
participating in this offering:
| Public offering price per share | |
| | | |
$ | 0.20 | |
| Net tangible book value per share as of September 30, 2022 | |
$ | 0.08 | | |
| | |
| Increase per share attributable to this offering | |
$ | 0.02 | | |
| | |
| Pro forma net tangible book value per share after this offering | |
$ | 0.10 | | |
| | |
| Dilution per share to investors in this offering | |
| | | |
$ | 0.10 | |
The
above discussion and table are based on 25,522,727 shares of our common stock outstanding as of September 30, 2022 and assumes the full
exercise of the pre-funded warrants sold in the offering.
To
the extent that any of our outstanding options or warrants are exercised, we grant additional options or other awards under our stock
incentive plan or issue additional warrants, or we issue additional shares of common stock in the future, there may be further dilution.
In
addition, the amounts in the table above assume no exercise by the underwriter of its option to purchase additional shares. If the underwriter
exercises its option to purchase shares of our common stock in full, the pro forma net tangible book value per share after this offering
would be approximately $0.11 per share, representing an increase in net tangible book value per share attributable to this offering of
approximately $0.03 and dilution in net tangible book value per share to investors in this offering of approximately $0.09.
DESCRIPTION
OF SECURITIES
In
this offering, we are offering shares of our common stock and pre-funded warrants to purchase shares of common stock (and the shares
of common stock issuable from time to time upon exercise of the offered pre-funded warrants). No fractional warrants will be issued.
Common
Stock
As
of February 8, 2023, there were 28,540,477 shares of common stock issued and outstanding, held of record by approximately 77
stockholders. Subject to preferential rights with respect to any outstanding preferred stock, all outstanding shares of common stock
are of the same class and have equal rights and attributes.
The
holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment
of dividends of such times and in such amounts as the board from time to time may determine. Holders of common stock are entitled to
one vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors
then standing for election. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon
liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable
ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims
of creditors.
Market,
Symbol and Transfer Agent
Our
common stock is listed for trading on the Nasdaq Capital Market under the symbol “BSFC”. The transfer agent and registrar
for our common stock is VStock Transfer, LLC, at 18 Lafayette Place, Woodmere, New York 11598, and its telephone number is (212) 828-8436.
Pre-Funded
Warrants
The
following is a summary of the material terms and provisions of the pre-funded warrants that are being offered hereby. This summary is
subject to and qualified in its entirety by the form of pre-funded warrants, which has been provided to the investors in this offering
and which will be filed with the SEC as an exhibit to a Current Report on Form 8-K in connection with this offering and incorporated
by reference into the registration statement of which this prospectus supplement forms a part. Prospective investors should carefully
review the terms and provisions of the form of pre-funded warrant for a complete description of the terms and conditions of the pre-funded
warrants.
Duration
and Exercise Price
The
pre-funded warrants offered hereby will have an exercise price of $0.001 per share. The pre-funded warrants will be immediately exercisable
and may be exercised at any time after their original issuance until such pre-funded warrants are exercised in full. The exercise price
and number of shares of common stock issuable upon exercise are subject to appropriate adjustment in the event of share dividends, share
splits, reorganizations or similar events affecting our shares of common stock.
Exercisability
The
pre-funded warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of common stock purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder (together with its affiliates) may not exercise any portion of such holder’s warrants
to the extent that the holder would own more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of common
stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase
the amount of ownership of outstanding shares of common stock after exercising the holder’s pre-funded warrants up to 9.99% of
the number of shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined
in accordance with the terms of the pre-funded warrants.
Book-Entry
Form
The
pre-funded warrants will be registered securities and will be evidenced by a global certificate, which will be deposited on behalf of
the Company with a custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee
of DTC. If DTC subsequently ceases to make its book-entry settlement system available for the pre-funded warrants, the Company may instruct
the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that any pre-funded warrants are not eligible
for, or it is no longer necessary to have the pre-funded warrants available in, book-entry form, then the Company may instruct the Warrant
Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation the global certificate, and the Company
will instruct the Warrant Agent to deliver to DTC separate warrant certificates as requested through the DTC system.
Prior
to due presentment for registration of transfer of any pre-funded warrants, the Company and the Warrant Agent may deem and treat the
person in whose name that pre-funded warrants will be registered on the Warrant register (the “holder”) as the absolute owner
of such pre-funded warrants for purposes of any exercise thereof, and for all other purposes, and neither the Company nor the Pre-funded
Warrants Agent will be affected by any notice to the contrary. Notwithstanding the foregoing, nothing herein will prevent the Company,
the Warrant Agent or any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorization
furnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any pre-funded warrants. The rights of
beneficial owners in pre-funded warrants evidenced by the global certificate will be exercised by the holder or a participant through
the DTC system, except to the extent set forth herein or in the global certificate.
A
holder whose interest in a global warrant is a beneficial interest in a global warrant held in book-entry form through DTC (or another
established clearing corporation performing similar functions) will effect exercises by delivering to DTC (or such other clearing corporation,
as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC
(or such other clearing corporation, as applicable).
Warrant
Agent
The
pre-funded warrants will be issued in registered form under separate pre-funded warrant agent agreements (each a “Pre-funded Warrant
Agent Agreement”) between us and our warrant agent, VStock Transfer, LLC (the “Warrant Agent”). The material provisions
of the pre-funded warrants are set forth herein, and a copy of each of the Pre-funded Warrant Agent Agreements are filed with the SEC
as an exhibit to the registration statement of which this prospectus forms a part.
Cashless
Exercise
The
pre-funded warrants will also be exercisable on a “cashless exercise” basis under which the holder will receive upon such
exercise a net number of common shares determined according to a formula set forth in the pre-funded warrants.
Fundamental
Transactions
In
the event of any fundamental transaction, as described in the pre-funded warrants and generally including any merger with or into another
entity, sale of all or substantially all of our assets, tender offer or exchange offer, or reclassification of our shares of common stock,
then upon any subsequent exercise of a pre-funded warrant, the holder will have the right to receive as alternative consideration, for
each share of common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction,
the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving corporation,
and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of common stock
for which the pre-funded warrant is exercisable immediately prior to such event.
Transferability
In
accordance with its terms and subject to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender
of the pre-funded warrant to us together with the appropriate instruments of transfer and payment of funds sufficient to pay any transfer
taxes (if applicable).
Fractional
Shares
No
fractional shares of common stock will be issued upon the exercise of the pre-funded warrants. Rather, the number of shares of common
stock to be issued will, at our election, either be rounded up to the nearest whole number or we will pay a cash adjustment in respect
of such final fraction in an amount equal to such fraction multiplied by the exercise price.
Trading
Market
There
is no established trading market for the pre-funded warrants, and we do not expect a market to develop. We do not intend to apply for
a listing for the pre-funded warrants on any securities exchange or other nationally recognized trading system. Without an active trading
market, the liquidity of the pre-funded warrants will be limited.
Rights
as a Stockholder
Except
as otherwise provided in the pre-funded warrants or by virtue of the holders’ ownership of shares of common stock, the holders
of pre-funded warrants will not have the rights or privileges of holders of our shares of common stock, including any voting rights,
until such pre-funded warrant holders exercise their warrants.
Amendment
and Waiver
We
may amend or supplement a warrant agreement without the consent of the holders of the applicable warrants to cure ambiguities in the
warrant agreement, to cure or correct a defective provision in the warrant agreement, or to provide for other matters under the warrant
agreement that we and the warrant agent deem necessary or desirable, so long as, in each case, such amendments or supplements do not
materially adversely affect the interests of the holders of the warrants.
UNDERWRITING
Aegis
Capital Corp. is the sole underwriter and book-running manager for this offering. Under the terms of an underwriting agreement dated
February 10, 2023, we have agreed to sell to the underwriter, on a firm commitment basis, the number
of shares of common stock and pre-funded warrants shown opposite its name below:
| Underwriter |
|
Shares
of Common Stock |
|
Number
of Pre-funded Warrants |
| Aegis Capital Corp. |
|
8,200,000 |
|
800,000 |
| Total |
|
8,200,000 |
|
800,000 |
The
underwriting agreement provides that the underwriter’s obligation to purchase the shares of common stock and pre-funded warrants
depends on the satisfaction of the conditions contained in the underwriting agreement including:
| |
● |
the representations and warranties made by us to the underwriter
are true; |
| |
● |
there is no material change in our business or the financial markets; and |
| |
|
|
| |
● |
we deliver customary closing documents to the underwriter. |
Discounts,
Commissions and Reimbursement
The
underwriter has advised us that it proposes to offer the shares of common stock and the pre-funded warrants to the public at the
public offering price per share set forth on the cover page of this prospectus supplement. The underwriter may offer shares of
common stock and/or pre-funded warrants to securities dealers at that price less a concession of not more than
$0.006 per share of common stock or pre-funded warrant. After the initial
offering, the public offering price and concession to dealers may be changed.
The
following table summarizes the underwriting discounts and commissions and proceeds, before expenses, to us assuming no exercise and full
exercise by the underwriter of its over-allotment option, respectively:
| | |
| | |
| | |
Total | |
| | |
Per
Common
Share | | |
Pre
Pre-funded Warrant | | |
Without
Option | | |
With
Option | |
| Public offering price | |
$ | 0.200 | | |
$ | 0.199 | | |
$ | 1,799,200 | | |
$ | 2,069,080 | |
| Underwriting discounts and
commissions (6%) | |
$ | 0.012 | | |
$ | 0.012 | | |
$ | 108,000 | | |
$ | 124,200 | |
| Proceeds, before expenses
to us | |
$ | 0.188 | | |
$ | 0.187 | | |
$ | 1,691,200 | | |
$ | 1,944,880 | |
In
addition, we have also agreed to pay all expenses in connection with the offering, including the following expenses: (a) all filing fees
and expenses relating to the registration of the shares with SEC; (b) all FINRA public offering filing fees; (c) all fees and expenses
relating to the listing of the Company’s equity or equity-linked securities on an Exchange; (d) all fees, expenses and disbursements
relating to the registration or qualification of the shares under the “blue sky” securities laws of such states and other
jurisdictions as the underwriter may reasonably designate (including, without limitation, all filing and registration fees, and the reasonable
fees and disbursements of the Company’s “blue sky” counsel, which will be underwriter’s counsel) unless such
filings are not required in connection with the Company’s proposed Exchange listing; (e) all fees, expenses and disbursements relating
to the registration, qualification or exemption of the shares under the securities laws of such foreign jurisdictions as the underwriter
may reasonably designate; (f) the costs of all mailing and printing of the offering documents; (g) transfer and/or stamp taxes, if any,
payable upon the transfer of shares from the Company to the underwriter and (h) the fees and expenses of the Company’s accountants;
and (i) a maximum of $40,000 for fees and expenses, including “road show”, diligence, and reasonable legal fees and disbursements
for the underwriter’s legal counsel.
We
estimate the expenses of this offering payable by us, not including underwriting discounts and commissions, including amounts for which
we agreed to reimburse the underwriter for certain of its expenses, will be approximately $120,000.
Over-Allotment
Option
We
have granted the underwriter an over-allotment option. This option, which is exercisable for 45 days after the closing of this
offering, permits the underwriter to purchase up to an aggregate of 1,350,000 additional shares of common stock and/or pre-funded
warrants (equal to 15% of the number of shares of common stock and/or pre-funded warrants sold in the offering) at the public
offering price per share, less underwriting discounts and commissions, solely to cover over-allotments, if any. If the underwriter
exercises this option in whole or in part, then the underwriter will be committed, subject to the conditions described in the
underwriting agreement, to purchase the additional shares of common stock and/or pre-funded warrants.
Discretionary
Accounts
The
underwriter does not intend to confirm sales of the securities offered hereby to any accounts over which it has discretionary authority.
Lock-Up
Agreements
Our
directors, executive officers, and shareholders holding at least ten percent of the outstanding shares of common stock, have agreed for
a period of ninety (90) days, after the closing date of the offering, subject to certain exceptions, not to directly or indirectly offer,
sell, or otherwise transfer or dispose of, directly or indirectly, any shares of the Company or any securities convertible into or exercisable
or exchangeable for the shares of the Company.
Company
Standstill
The
Company has agreed, for a period of ninety (90) days after the closing date of the offering, that it will not, without the prior written
consent of the underwriter, (a) offer, sell, issue, or otherwise transfer or dispose of, directly or indirectly, any equity of the Company
or any securities convertible into or exercisable or exchangeable for equity of the Company; (b) file or caused to be filed any registration
statement with the SEC relating to the offering of any equity of the Company or any securities convertible into or exercisable or exchangeable
for equity of the Company; or (c) enter into any agreement or announce the intention to effect any of the actions described in subsections
(a) or (b) hereof, subject to certain exceptions in the underwriting agreement.
Right
of First Refusal
Pursuant
to the terms of the underwriting agreement, if, for the period ending six (6) months from the closing of this offering, subject to certain
exceptions set forth in the underwriting agreement, we or any of our subsidiaries (a) decide to finance or refinance any indebtedness,
The underwriter (or any affiliate designated by the underwriter) shall have the right to act as the sole book-runner, sole manager, sole
placement agent or sole agent with respect to such financing or refinancing; or (b) decide to raise funds by means of a public offering
(including an at-the-market facility) or a private placement or any other capital raising financing of equity, equity-linked or debt
securities, The underwriter (or any affiliate designated by The underwriter) shall have the right to act as the sole book-running manager,
sole underwriter or sole placement agent for such financing.
Electronic
Offer, Sale and Distribution of Shares
A
prospectus in electronic format may be made available on the websites maintained by the underwriter or one or more of selling group members.
The underwriter may agree to allocate a number of shares to selling group members for sale to its online brokerage account holders. Internet
distributions will be allocated by the underwriter and selling group members that will make internet distributions on the same basis
as other allocations. Other than the prospectus in electronic format, the information on these websites is not part of, nor incorporated
by reference into, this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed
by us, and should not be relied upon by investors.
Stabilization
The
underwriter has advised us that it, pursuant to Regulation M under the Exchange Act, and certain persons participating in the offering
may engage in short sale transactions, stabilizing transactions, syndicate covering transactions or the imposition of penalty bids in
connection with this offering. These activities may have the effect of stabilizing or maintaining the market price of the shares at a
level above that which might otherwise prevail in the open market. Establishing short sales positions may involve either “covered”
short sales or “naked” short sales.
“Covered”
short sales are sales made in an amount not greater than the underwriter’s option to purchase additional shares in this offering.
The underwriter may close out any covered short position by either exercising their option to purchase additional shares or purchasing
shares in the open market. In determining the source of shares to close out the covered short position, the underwriter will consider,
among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase
shares through the option to purchase additional shares.
“Naked”
short sales are sales in excess of the option to purchase additional shares. The underwriter must close out any naked short position
by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there
may be downward pressure on the price of our shares in the open market after pricing that could adversely affect investors who purchase
in this offering.
A
stabilizing bid is a bid for the purchase of shares on behalf of the underwriter for the purpose of fixing or maintaining the price of
the shares. A syndicate covering transaction is the bid for or the purchase of shares on behalf of the underwriter to reduce a short
position incurred by the underwriter in connection with the offering. Similar to other purchase transactions, the underwriter’s
purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our shares or preventing
or retarding a decline in the market price of our shares. As a result, the price of our shares may be higher than the price that might
otherwise exist in the open market. A penalty bid is an arrangement permitting the underwriter to reclaim the selling concession otherwise
accruing to a syndicate member in connection with the offering if the shares originally sold by such syndicate member are purchased in
a syndicate covering transaction and therefore have not been effectively placed by such syndicate member.
Neither
we nor the underwriter makes any representation or prediction as to the direction or magnitude of any effect that the transactions described
above may have on the price of our shares. The underwriter is not obligated to engage in these activities and, if commenced, any of the
activities may be discontinued at any time.
Passive
Market Making
The
underwriter may also engage in passive market making transactions in our shares on Nasdaq in accordance with Rule 103 of Regulation M
during a period before the commencement of offers or sales of our shares in this offering and extending through the completion of distribution.
A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all
independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits
are exceeded.
Other
Relationships
The
underwriter and its respective affiliates may, in the future provide various investment banking, commercial banking and other financial
services for the Company and its affiliates for which they have received, and may in the future receive, customary fees. However, except
as disclosed in this prospectus, the Company has no present arrangements with the underwriter for any further services.
Offer
restrictions outside the United States
Other
than in the United States, no action has been taken by us or the underwriter that would permit a public offering of the shares offered
by this prospectus supplement in any jurisdiction where action for that purpose is required. The shares offered by this prospectus supplement
and the accompanying prospectus may not be offered or sold, directly or indirectly, nor may this prospectus supplement or any other offering
material or advertisements in connection with the offer and sale of any such shares be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into
whose possession this prospectus supplement comes are advised to inform themselves about and to observe any restrictions relating to
the offering and the distribution of this prospectus supplement. This prospectus supplement does not constitute an offer to sell or a
solicitation of an offer to buy any shares offered by this prospectus supplement in any jurisdiction in which such an offer or a solicitation
is unlawful.
LEGAL
MATTERS
The
validity of the issuance of the common stock offered by this prospectus supplement will be passed upon for us by The Crone Law Group,
P.C., New York, New York. Aegis Capital Corp. is being represented in connection with this offering by Kaufman & Canoles, P.C., Richmond,
Virginia.
EXPERTS
Our
consolidated financial statements as of and for the years ended December 31, 2021 and 2020, included in our Annual Report on Form 10-K
for the year ended December 31, 2021, have been audited by MaloneBailey, LLP, independent registered public accounting firm, as set forth
in their report, and have been incorporated herein by reference in reliance upon the report of such firm given on their authority as
experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus supplement is part of the registration statement on Form S-3 we filed with the SEC under the Securities Act and does not contain
all the information set forth in the registration statement. Whenever a reference is made in this prospectus supplement to any of our
contracts, agreements or other documents, the reference may not be complete and you should refer to the exhibits that are a part of the
registration statement or the exhibits to the reports or other documents incorporated by reference into this prospectus supplement for
a copy of such contract, agreement or other document. Because we are subject to the information and reporting requirements of the Securities
Exchange Act of 1934, as amended, or the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information
with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s website at http://www.sec.gov.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We
are “incorporating by reference” certain documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents. The information in the documents incorporated by reference is considered to be part of this
prospectus supplement. Statements contained in documents that we file with the SEC and that are incorporated by reference in this prospectus
supplement will automatically update and supersede information contained in this prospectus supplement, including information in previously
filed documents or reports that have been incorporated by reference in this prospectus supplement, to the extent the new information
differs from or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they are
incorporated herein by reference as of their respective dates of filing:
1.
Our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022;
2.
Our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022, June 30, 2022, and September 30, 2022, as filed with the SEC
on May 13, 2022, August 15, 2022, and November 14, 2022, respectively; and
3.
Our Current Reports on Form 8-K as filed with the SEC on January 28, 2022, February 9, 2022, April 25, 2022, August 16, 2022, November 15, 2022, November 23, 2022, December 13, 2022, and February 1, 2023.
In
addition to the foregoing, we incorporate by reference into this prospectus supplement all documents that we file with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 subsequent to the date of this prospectus supplement and before
the termination or completion of this offering, and such documents will become a part of this prospectus supplement from the date that
such documents are filed with the SEC. Information in such future filings updates and supplements the information provided in this prospectus
supplement, the accompanying prospectus supplement and the information and documents incorporated by reference into this prospectus supplement.
Any statements in any such future filings will automatically be deemed to modify and supersede any information that is part of this prospectus
supplement to the extent that statements in the later filed document modify or supersede such earlier statements.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus supplement shall be deemed
modified, superseded or replaced for purposes of this prospectus supplement to the extent that a statement contained in this prospectus
supplement, or in any subsequently filed document that also is deemed to be incorporated by reference in this prospectus supplement,
modifies, supersedes or replaces such statement. Any statement so modified, superseded or replaced shall not be deemed, except as so
modified, superseded or replaced, to constitute a part of this prospectus supplement. None of the information that we disclose under
Items 2.02 or 7.01 of any Current Report on Form 8-K or any corresponding information, either furnished under Item 9.01 or included as
an exhibit therein, that we may from time to time furnish to the SEC will be incorporated by reference into, or otherwise included in,
this prospectus supplement, except as otherwise expressly set forth in the relevant document. Subject to the foregoing, all information
appearing in this prospectus supplement is qualified in its entirety by the information appearing in the documents incorporated by reference.
If
you make a request for such information in writing or by telephone, we will provide you, without charge, a copy of any or all of the
information incorporated by reference into this prospectus supplement. Any such request should be directed to:
Blue
Star Foods Corp.
3000
NW 109th Avenue
Miami,
Florida 33172
(305)
836-6858
Our
website address is https://bluestarfoods.com/. Except for any documents that are incorporated by reference into this prospectus
supplement that may be accessed from our website, the information available on or through our website is not part of this prospectus
supplement.
Blue
Star Foods Corp.
8,200,000 Shares of Common Stock
Pre-Funded Warrants to Purchase up to 800,000
Shares of Common Stock
PROSPECTUS
SUPPLEMENT
AEGIS
CAPITAL CORP.
February
10, 2023
BLUE
STAR FOODS CORP.
$25,000,000
COMMON
STOCK
PREFERRED
STOCK
WARRANTS
SUBSCRIPTION
RIGHTS
DEBT
SECURITIES
UNITS
We
may offer and sell from time to time, in one or more series, any one of the following securities of our company, for total gross proceeds
of up to $25,000,000:
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common
stock; |
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preferred
stock; |
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warrants
to purchase common stock, preferred stock, debt securities, other securities or any combination of those securities; |
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subscription
rights to purchase common stock, preferred stock, debt securities, other securities or any combination of those securities; |
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secured
or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities,
senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities; or |
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units
comprised of, or other combinations of, the foregoing securities. |
We
may offer and sell these securities separately or together, in one or more series or classes and in amounts, at prices and on terms described
in one or more offerings. We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters or
dealers, through agents or directly to purchasers. The prospectus supplement for each offering of securities will describe in detail
the plan of distribution for that offering. For general information about the distribution of securities offered, please see “Plan
of Distribution” in this prospectus.
Each
time our securities are offered, we will provide a prospectus supplement containing more specific information about the particular offering
and attach it to this prospectus. The prospectus supplements may also add, update or change information contained in this prospectus.
This
prospectus may not be used to offer or sell securities without a prospectus supplement which includes a description of the method and
terms of this offering.
Our common stock is quoted
on the Nasdaq Capital Market under the symbol “BSFC.” The last reported sale price of our common stock on the Nasdaq Capital
Market on November 23, 2022 was $0.78 per share. The aggregate market value of our outstanding common stock held by non-affiliates
is $9,690,595 based on 25,538,844 shares of outstanding common stock, of which 9,888,362 shares are held by non-affiliates,
and a per share price of $0.98, which was the closing sale price of our common stock as quoted on the Nasdaq Capital Market on
November 3, 2022.
If
we decide to seek a listing of any preferred stock, purchase contracts, warrants, subscriptions rights, depositary shares, debt securities
or units offered by this prospectus, the related prospectus supplement will disclose the exchange or market on which the securities will
be listed, if any, or where we have made an application for listing, if any.
Investing
in our securities is highly speculative and involves a significant degree of risk. See “Risk Factors” beginning on page 5 and the risk factors in our most recent Annual Report on Form 10-K, which is incorporated by reference herein, as well as in any other
recently filed quarterly or current reports and, if any, in the relevant prospectus supplement. We urge you to carefully read this prospectus
and the accompanying prospectus supplement, together with the documents we incorporate by reference, describing the terms of these securities
before investing.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed
upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is December 6, 2022.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC, utilizing
a “shelf” registration process. Under this shelf registration process, we may offer and sell, either individually or in combination,
in one or more offerings, any of the securities described in this prospectus, for total gross proceeds of up to $25,000,000. This prospectus
provides you with a general description of the securities we may offer. Each time we offer securities under this prospectus, we will
provide a prospectus supplement to this prospectus that will contain more specific information about the terms of that offering. We may
also authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings.
The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update or
change any of the information contained in this prospectus or in the documents that we have incorporated by reference into this prospectus.
We
urge you to read carefully this prospectus, any applicable prospectus supplement and any free writing prospectuses we have authorized
for use in connection with a specific offering, together with the information incorporated herein by reference as described under the
heading “Incorporation of Documents by Reference,” before investing in any of the securities being offered. You should rely
only on the information contained in, or incorporated by reference into, this prospectus and any applicable prospectus supplement, along
with the information contained in any free writing prospectuses we have authorized for use in connection with a specific offering. We
have not authorized anyone to provide you with different or additional information. This prospectus is an offer to sell only the securities
offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so.
The
information appearing in this prospectus, any applicable prospectus supplement or any related free writing prospectus is accurate only
as of the date on the front of the document and any information we have incorporated by reference is accurate only as of the date of
the document incorporated by reference, regardless of the time of delivery of this prospectus, any applicable prospectus supplement or
any related free writing prospectus, or any sale of a security.
This
prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the
actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some
of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration
statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the section entitled
“Where You Can Find Additional Information.”
This
prospectus contains, or incorporates by reference, trademarks, tradenames, service marks and service names of Blue Star Foods Corp. and
its consolidated subsidiaries.
CAUTIONARY
NOTE REGARDING FORWARD LOOKING STATEMENTS
This
prospectus and any accompanying prospectus or prospectus supplement and the documents incorporated by reference herein and therein may
contain forward looking statements that involve significant risks and uncertainties. All statements other than statements of historical
fact contained in this prospectus and any accompanying prospectus supplement and the documents incorporated by reference herein, including
statements regarding future events, our future financial performance, business strategy, and plans and objectives of management for future
operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking statements
unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions
and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or
elsewhere in this prospectus and the documents incorporated by reference herein, which may cause our or our industry’s actual results,
levels of activity, performance or achievements expressed or implied by these forward-looking statements. Moreover, we operate in a highly
regulated, very competitive, and rapidly changing environment. New risks emerge from time to time and it is not possible for us to predict
all risk factors, nor can we address the impact of all factors on our business or the extent to which any factor, or combination of factors,
may cause our actual results to differ materially from those contained in any forward-looking statements.
We
have based these forward-looking statements largely on our current expectations and assumptions about future events and financial trends
that we believe may affect our financial condition, results of operations, business strategy, short term and long term business operations,
and financial needs. These forward-looking statements are subject to certain risks and uncertainties that could cause our actual results
to differ materially from those reflected in the forward-looking statements. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed in this prospectus, and in particular, the risks discussed below and under the heading
“Risk Factors” and those discussed in other documents we file with the SEC which are incorporated by reference herein. This
prospectus, and any accompanying prospectus or prospectus supplement, should be read in conjunction with the consolidated financial statements
for the fiscal years ended December 31, 2021 and 2020 and related notes, which are incorporated by reference herein.
We
undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required
by law. In light of the significant risks, uncertainties and assumptions that accompany forward-looking statements, the forward-looking
events and circumstances discussed in this prospectus and any accompanying prospectus or prospectus supplement may not occur and actual
results could differ materially and adversely from those anticipated or implied in the forward-looking statement.
You
should not place undue reliance on any forward-looking statement, each of which applies only as of the date of this prospectus, or any
accompanying prospectus or any prospectus supplement. Except as required by law, we undertake no obligation to update or revise publicly
any of the forward-looking statements after the date of this prospectus to conform our statements to actual results or changed expectations.
Any
forward-looking statement you read in this prospectus, any accompanying prospectus, or any prospectus supplement or any document incorporated
by reference reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions
relating to our operations, operating results, growth strategy and liquidity. You should not place undue reliance on these forward-looking
statements because such statements speak only as to the date when made. We assume no obligation to publicly update or revise these forward-looking
statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking
statements, even if new information becomes available in the future, except as otherwise required by applicable law. You are advised,
however, to consult any further disclosures we make on related subjects in our reports on Forms 10-Q, 8-K and 10-K filed with the SEC.
You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any such
list to be a complete set of all potential risks or uncertainties.
PROSPECTUS
SUMMARY
This
summary highlights selected information contained elsewhere in this prospectus. This summary does not contain all the information that
you should consider before investing in our Company. You should carefully read the entire prospectus, including all documents incorporated
by reference herein. In particular, attention should be directed to our “Risk Factors,” “Information With Respect to
the Company,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the
financial statements and related notes thereto contained herein or otherwise incorporated by reference hereto, before making an investment
decision.
As
used herein, and any amendment or supplement hereto, unless otherwise indicated, “we,” “us,” “our,”
or the “Company” means Blue Star Foods Corp. and its consolidated subsidiaries.
Overview
We
are an international sustainable marine protein company that owns and operates several portfolio companies with an emphasis on environmental,
social and governance values. We seek to create a vertically integrated seafood company that offers customers high quality products while
maintaining a focus on our core values of delivering food safety, traceability and certified resource sustainability. Our companies include:
John
Keeler & Co., Inc. (“Keeler & Co.”) doing business as Blue Star Foods, which imports, packages
and sells refrigerated pasteurized crab meat sourced primarily from Southeast Asia and other premium seafood products;
Coastal Pride
Seafood, LLC (“Coastal Pride”) which imports pasteurized and fresh crab meat sourced primarily from
Mexico and Latin America and sells premium branded label crab meat throughout North America; and
Taste of
BC Aquafarms, Inc. (“TOBC”), a land-based recirculating aquaculture systems (“RAS”) salmon farming operation,
which sells its steelhead salmon to distributors in Canada.
Our
long-term strategy is to create a vertically integrated seafood company that offers customers high quality products while maintaining
a focus on our core values of delivering food safety, traceability and certified resource sustainability.
We
plan to grow the Company organically by continuing to grow our customer base and introducing new high-value product lines and categories,
as well as strategically acquiring companies that focus on additional species and proprietary technologies that we believe we can integrate
into a larger, diversified company.
Implications
of Being an Emerging Growth Company and Smaller Reporting Company
We
qualify as an “emerging growth company” under the Jumpstart our Business Startups Act (“JOBS Act”). As a result,
we are permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth
company, we will not be required to:
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have
an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; |
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comply
with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation
or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e.,
an auditor discussion and analysis); |
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submit
certain executive compensation matters to shareholder advisory votes, such as “say-on-pay,” “say-on-frequency”
and pay ratio; and |
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disclose
certain executive compensation related items such as the correlation between executive compensation and performance and comparisons
of the CEO’s compensation to median employee compensation. |
In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period
provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In
other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise
apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements
may therefore not be comparable to those of companies that comply with such new or revised accounting standards.
We
will remain an “emerging growth company” for up to five years from the date of the first sale of our common stock of the
issuer pursuant to an effective registration statement, or until the earliest of (i) the last day of the first fiscal year in which our
total annual gross revenues exceed $1.235 billion, (ii) the date that we become a “large accelerated filer” as defined in
Rule 12b-2 under the Exchange Act, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700
million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more
than $1 billion in non-convertible debt during the preceding three year period.
Additionally,
we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take
advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues
equaled or exceeded $100 million during such completed fiscal year and the market value of our common stock held by non-affiliates equals
or exceeds $700 million as of the end of that year’s second fiscal quarter.
Corporate
Information
We
were incorporated on October 17, 2017 in the State of Delaware as a blank check company to be used as a vehicle to pursue a business
combination. Prior to the Merger, we engaged in organizational efforts. Following the Merger, we discontinued our prior activities of
seeking a business for a merger or acquisition and acquired the business of John Keeler & Co. Inc., d/b/a Blue Star Foods, a Florida
corporation formed on May 5, 1995. Our executive offices are located at 3000 NW 109th Avenue, Miami, Florida 33172 and our telephone
number is (305) 836-6858. Our website address is https://bluestarfoods.com/. Except for any documents that are incorporated by
reference into this prospectus that may be accessed from our website, the information available on or through our website is not part
of this prospectus.
RISK
FACTORS
Investing
in our securities is highly speculative and involves a high degree of risk. Before deciding whether to invest in our securities, you
should carefully consider the risk factors we describe in any accompanying prospectus or any future prospectus supplement, as well as
in any related free writing prospectus for a specific offering of securities, and the risk factors incorporated by reference into this
prospectus, any accompanying prospectus or such prospectus supplement. You should also carefully consider other information contained
and incorporated by reference in this prospectus and any applicable prospectus supplement, including our financial statements and the
related notes thereto incorporated by reference in this prospectus. The risks and uncertainties described in the applicable prospectus
supplement and our other filings with the SEC incorporated by reference herein are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently consider immaterial may also adversely affect us. If any of the described risks occur,
our business, financial condition or results of operations could be materially harmed. In such case, the value of our securities could
decline and you may lose all or part of your investment.
USE
OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement, we intend to use the net proceeds from these sales for general corporate purposes, which
includes, without limitation, sales and marketing expenses generally, research and development expenses, sales and support staff and
software development including enterprise resource planning and practice management implementations. The amounts and timing of these
expenditures will depend on numerous factors, including the development of our current business initiatives.
DIVIDEND
POLICY
We
have never paid or declared any cash dividends on our common stock, and we do not anticipate paying any cash dividends on our common
stock in the foreseeable future. We intend to retain all available funds and any future earnings to fund the development and expansion
of our business. Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a
number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions
imposed by applicable law and other factors our board of directors deems relevant. Our future ability to pay cash dividends on our stock
may also be limited by the terms of any future debt or preferred securities or future credit facility.
PLAN
OF DISTRIBUTION
We
may sell the securities from time to time to or through underwriters or dealers, through agents, or directly to one or more purchasers.
A distribution of the securities offered by this prospectus may also be effected through the issuance of derivative securities, including
without limitation, warrants, rights to purchase and subscriptions. In addition, the manner in which we may sell some or all of the securities
covered by this prospectus includes, without limitation, through:
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a
block trade in which a broker-dealer will attempt to sell as agent, but may position or resell a portion of the block, as principal,
in order to facilitate the transaction; |
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purchases
by a broker-dealer, as principal, and resale by the broker-dealer for its account; or |
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ordinary
brokerage transactions and transactions in which a broker solicits purchasers. |
A
prospectus supplement or supplements with respect to each series of securities will describe the terms of the offering, including, to
the extent applicable:
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the
terms of the offering; |
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the
name or names of the underwriters or agents and the amounts of securities underwritten or purchased by each of them, if any; |
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the
public offering price or purchase price of the securities or other consideration therefor, and the proceeds to be received by us
from the sale; |
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any
delayed delivery requirements; |
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any
over-allotment options under which underwriters may purchase additional securities from us; |
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any
underwriting discounts or agency fees and other items constituting underwriter’s or agents’ compensation; |
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any
discounts or concessions allowed or re-allowed or paid to dealers; and |
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any
securities exchange or market on which the securities may be listed. |
The
offer and sale of the securities described in this prospectus by us, the underwriters or the third parties described above may be effected
from time to time in one or more transactions, including privately negotiated transactions, either:
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at
a fixed price or prices, which may be changed; |
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in
an “at the market” offering within the meaning of Rule 415(a)(4) of the Securities Act of 1933, as amended, or the Securities
Act; |
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at
prices related to such prevailing market prices; or |
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at
negotiated prices. |
Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
Underwriters
and Agents; Direct Sales
If
underwriters are used in a sale, they will acquire the offered securities for their own account and may resell the offered securities
from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. We may offer the securities to the public through underwriting syndicates represented by managing underwriters
or by underwriters without a syndicate.
Unless
the prospectus supplement states otherwise, the obligations of the underwriters to purchase the securities will be subject to the conditions
set forth in the applicable underwriting agreement. Subject to certain conditions, the underwriters will be obligated to purchase all
of the securities offered by the prospectus supplement, other than securities covered by any over-allotment option. Any public offering
price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time. We may use underwriters
with whom we have a material relationship. We will describe in the prospectus supplement, naming the underwriter, the nature of any such
relationship.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale
of securities, and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We
may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
Dealers
We
may sell the offered securities to dealers as principals. The dealer may then resell such securities to the public either at varying
prices to be determined by the dealer or at a fixed offering price agreed to with us at the time of resale.
Institutional
Purchasers
We
may authorize agents, dealers or underwriters to solicit certain institutional investors to purchase offered securities on a delayed
delivery basis pursuant to delayed delivery contracts providing for payment and delivery on a specified future date. The applicable prospectus
supplement or other offering materials, as the case may be, will provide the details of any such arrangement, including the offering
price and commissions payable on the solicitations.
We
will enter into such delayed contracts only with institutional purchasers that we approve. These institutions may include commercial
and savings banks, insurance companies, pension funds, investment companies and educational and charitable institutions.
Indemnification;
Other Relationships
We
may provide agents, underwriters, dealers and remarketing firms with indemnification against certain civil liabilities, including liabilities
under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to these liabilities.
Agents, underwriters, dealers and remarketing firms, and their affiliates, may engage in transactions with, or perform services for,
us in the ordinary course of business. This includes commercial banking and investment banking transactions.
Market-Making;
Stabilization and Other Transactions
There
is currently no market for any of the offered securities, other than our common stock, which is quoted on the Nasdaq Capital Market.
If the offered securities are traded after their initial issuance, they may trade at a discount from their initial offering price, depending
upon prevailing interest rates, the market for similar securities and other factors. While it is possible that an underwriter could inform
us that it intends to make a market in the offered securities, such underwriter would not be obligated to do so, and any such market-making
could be discontinued at any time without notice. Therefore, no assurance can be given as to whether an active trading market will develop
for the offered securities. We have no current plans for listing of the debt securities, preferred stock, warrants or subscription rights
on any securities exchange or quotation system; any such listing with respect to any particular debt securities, preferred stock, warrants
or subscription rights will be described in the applicable prospectus supplement or other offering materials, as the case may be.
Any
underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation
M under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Over-allotment involves sales in excess of the offering
size, which create a short position. Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing
bids do not exceed a specified maximum price. Syndicate-covering or other short-covering transactions involve purchases of the securities,
either through exercise of the over-allotment option or in the open market after the distribution is completed, to cover short positions.
Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally sold by the dealer
are purchased in a stabilizing or covering transaction to cover short positions. Those activities may cause the price of the securities
to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any time.
Any
underwriters or agents that are qualified market makers on the Nasdaq Capital Market may engage in passive market making transactions
in our common stock on the Nasdaq Capital Market in accordance with Regulation M under the Exchange Act, during the business day prior
to the pricing of the offering, before the commencement of offers or sales of our common stock. Passive market makers must comply with
applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display
its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive
market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
Passive market making may stabilize the market price of the securities at a level above that which might otherwise prevail in the open
market and, if commenced, may be discontinued at any time.
Fees
and Commissions
If
5% or more of the net proceeds of any offering of securities made under this prospectus will be received by a FINRA member participating
in the offering or affiliates or associated persons of such FINRA member, the offering will be conducted in accordance with FINRA Rule
5121.
DESCRIPTION
OF SECURITIES WE MAY OFFER
General
This
prospectus describes the general terms of our capital stock. The following description is not complete and may not contain all the information
you should consider before investing in our capital stock. For a more detailed description of these securities, you should read the applicable
provisions of Delaware law and our certificate of incorporation, as amended, referred to herein as our certificate of incorporation,
and our amended and restated bylaws, referred to herein as our bylaws. When we offer to sell a particular series of these securities,
we will describe the specific terms of the series in a supplement to this prospectus. Accordingly, for a description of the terms of
any series of securities, you must refer to both the prospectus supplement relating to that series and the description of the securities
described in this prospectus. To the extent the information contained in the prospectus supplement differs from this summary description,
you should rely on the information in the prospectus supplement.
We have authorized capital
stock consisting of 100,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value
$0.0001 per share. As of November 25, 2022, we had 25,538,844 shares of common stock and no shares of preferred stock issued
and outstanding.
We,
directly or through agents, dealers or underwriters designated from time to time, may offer, issue and sell, together or separately,
up to $25,000,000 in the aggregate of:
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common
stock; |
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preferred
stock; |
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warrants
to purchase common stock, preferred stock, debt securities, other securities or any combination of those securities; |
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subscription
rights to purchase common stock, preferred stock, debt securities, other securities or any combination of those securities; |
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secured
or unsecured debt securities consisting of notes, debentures or other evidences of indebtedness which may be senior debt securities,
senior subordinated debt securities or subordinated debt securities, each of which may be convertible into equity securities; or |
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units
comprised of, or other combinations of, the foregoing securities. |
We
may issue the debt securities as exchangeable for or convertible into shares of common stock, preferred stock or other securities that
may be sold by us pursuant to this prospectus or any combination of the foregoing. The preferred stock may also be exchangeable for and/or
convertible into shares of common stock, another series of preferred stock or other securities that may be sold by us pursuant to this
prospectus or any combination of the foregoing. When a particular series of securities is offered, a supplement to this prospectus will
be delivered with this prospectus, which will set forth the terms of the offering and sale of the offered securities.
Common
Stock
The
holders of outstanding shares of common stock are entitled to receive dividends out of assets or funds legally available for the payment
of dividends of such times and in such amounts as the board from time to time may determine. Holders of common stock are entitled to
one vote for each share held on all matters submitted to a vote of stockholders. There is no cumulative voting of the election of directors
then standing for election. The common stock is not entitled to pre-emptive rights and is not subject to conversion or redemption. Upon
liquidation, dissolution or winding up of our company, the assets legally available for distribution to stockholders are distributable
ratably among the holders of the common stock after payment of liquidation preferences, if any, on any outstanding payment of other claims
of creditors.
Market,
Symbol and Transfer Agent
Our
common stock is listed for trading on the Nasdaq Capital Market under the symbol “BSFC”. The transfer agent and registrar
for our common stock is VStock Transfer, LLC, at 18 Lafayette Place, Woodmere, New York 11598, and its telephone number is (212) 828-8436.
Preferred
Stock
Our
Board of Directors may issue preferred stock in one or more series without stockholder approval. Our Board of Directors may determine
the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges
and liquidation preferences, of each series of preferred stock.
Our
Board of Directors has designated 10,000 shares of preferred stock as “8% Series A Convertible Preferred Stock” (the “Series
A Stock”).
The
Series A Stock has no maturity and is not subject to any sinking fund or redemption and will remain outstanding indefinitely unless and
until converted by the holder or the Company redeems or otherwise repurchases the Series A Stock.
Ranking.
The Series A Stock ranks, with respect to the payment of dividends and/or the distribution of assets in the event of any liquidation,
dissolution or winding up of the Company, (i) senior to all classes or series of common stock, and to all other equity securities issued
by the Company; (ii) on parity with all equity securities issued by the Company with terms specifically providing that those equity securities
rank on parity with the Series A Stock; (iii) junior to all equity securities issued by the Company with terms specifically providing
that those equity securities rank senior to the Series A Stock; and (iv) effectively junior to all existing and future indebtedness (including
indebtedness convertible into our common stock or preferred stock) of the Company.
Dividends.
Cumulative dividends shall accrue on each share of Series A Stock at the rate of 8% (the “Dividend Rate”) of the purchase
price of $1,000.00 per share, commencing on the date of issuance. Dividends are payable quarterly, when and if declared by the Board,
beginning on September 30, 2018 (each a “Dividend Payment Date”) and are payable in shares of common stock (a “PIK
Dividend”) with such shares being valued at the daily volume weighted average price (“VWAP”) of the common stock for
the thirty trading days immediately prior to each Dividend Payment Date or if not traded or quoted as determined by an independent appraiser
selected in good faith by the Company. Any fractional shares of a PIK Dividend will be rounded to the nearest one-hundredth of a share.
All shares of common stock issued in payment of a PIK Dividend will be duly authorized, validly issued, fully paid and non-assessable.
Dividends will accumulate whether or not the Company has earnings, there are funds legally available for the payment of those dividends
and whether or not those dividends are declared by the Board. No dividends on shares of Series A Stock shall be authorized, paid or set
apart for payment at any time when the terms and provisions of any agreement of the Company prohibit the authorization, payment or setting
apart for payment thereof or provide that the authorization, payment or setting apart for payment thereof would constitute a breach of
the agreement or a default under the agreement, or if the authorization, payment or setting apart for payment is restricted or prohibited
by law. No dividends will be declared or paid or set aside for payment and no other distribution will be declared or made upon shares
of common stock or preferred stock that rank junior to the Series A Stock as to the payment of dividends, or upon liquidation, dissolution,
or winding up of the Company, and (iii) any shares of common stock and preferred stock that the Company may issue ranking junior to the
Series A Stock as to the payment of dividends, or the distribution of assets upon liquidation, dissolution, or winding up, shall not
be redeemed, purchased or otherwise acquired for any consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any such shares) by the Company (except by conversion into or exchange for other capital stock of the Company that
it may issue ranking junior to the Series A Stock as to the payment of dividends, or the distribution of assets upon liquidation, dissolution,
or winding up).
In
the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, the holders of shares of Series A Stock
will be entitled to be paid out of the assets the Company has legally available for distribution to its shareholders, subject to the
preferential rights of the holders of any class or series of capital stock of the Company it may issue ranking senior to the Series A
Stock with respect to the distribution of assets upon liquidation, dissolution or winding up, a liquidation preference of the Purchase
Price, before any distribution of assets is made to holders of common stock or any other class or series of capital stock of the Company
that it may issue that ranks junior to the Series A Stock as to liquidation rights. The liquidation preference shall be proportionately
adjusted in the event of a stock split, stock combination or similar event so that the aggregate liquidation preference allocable to
all outstanding shares of Series A Stock immediately prior to such event is the same immediately after giving effect to such event.
Liquidation
Preference. In the event that, upon any such voluntary or involuntary liquidation, dissolution or winding up, the available assets
of the Company are insufficient to pay the amount of the liquidating distributions on all outstanding shares of the Series A Stock and
the corresponding amounts payable on all shares of other classes or series of capital stock of the Company that it may issue ranking
on a parity with the Series A Stock in the distribution of assets, then the holders of the Series A Stock and all other such classes
or series of capital stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled. The consolidation or merger of the Company with or into any other entity or the
sale, lease, transfer or conveyance of all or substantially all of the property or business the Company, will not be deemed a liquidation,
dissolution or winding up of the Company.
Conversion.
Each share of Series A Stock is convertible at any time and in the sole discretion of the holder thereof, into shares of common stock
at a conversion rate of 500 shares of common stock per each share of Series A Stock (the “Conversion Rate”), subject to adjustment
from time to time as follows: if the Company declares or pays any dividend or makes any distribution on common stock payable in shares
of common stock, or effects a subdivision or split or a combination, consolidation or reverse split of the outstanding shares of common
stock then in each such case the Conversion Ratio will be adjusted, so that the holder of any shares of Series A Stock will be entitled
to receive upon conversion thereof the number of shares of common stock or other securities or property that such holder would have owned
or have been entitled to receive upon the happening of such event had such Series A Stock been converted immediately prior to the relevant
record date or the effective date of such event.
Upon
a merger, share exchange or consolidation of the Company, the sale, lease, exchange, mortgage, pledge, transfer or other disposition
or encumbrance, of all or substantially all of the Company’s assets, or any agreement providing for any of the foregoing, each
share of Series A Stock will remain outstanding and will thereafter be convertible into, or will be converted into a security which shall
be convertible into, the kind and amount of securities or other property to which a holder of the number of shares of common stock of
the Company deliverable upon conversion of such share of Series A Stock immediately prior to such business combination would have been
entitled upon such business combination.
Share
Reservation. The Company is obligated to at all times reserve and keep available out of its authorized but unissued shares of common
stock, a sufficient number of its shares of common stock as shall from time to time be to effect the conversion of all outstanding shares
of the Series A Stock.
Voting.
Holders of Series A Stock have no voting rights, except (i) the affirmative vote of at least two-thirds of the Series A Stock outstanding
will be required to authorize or create, or increase the authorized or issued amount of capital stock ranking senior to the Series A
Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution or winding up or reclassify any
of the authorized capital stock of the Company into such shares, or create, authorize or issue any obligation or security convertible
into or evidencing the right to purchase any such shares, or amend the Certificate of Incorporation which would have a material adverse
effect on the rights, preferences, privileges or voting powers of the Series A Stock or (ii) as otherwise required by law. On each matter
on which holders of Series A Stock are entitled to vote, each share of Series A Stock will be entitled to one vote.
While
we do not currently have any plans for the issuance of additional preferred stock, the issuance of such preferred stock could adversely
affect the rights of the holders of common stock and, therefore, reduce the value of the common stock. It is not possible to state the
actual effect of the issuance of any shares of preferred stock on the rights of holders of the common stock until the board of directors
determines the specific rights of the holders of the preferred stock; however, these effects may include:
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Restricting
dividends on the common stock; |
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|
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Diluting
the voting power of the common stock; |
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|
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Impairing
the liquidation rights of the common stock; or |
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Delaying
or preventing a change in control of the Company without further action by the stockholders. |
On
June 30, 2021, all of the 1,413 shares of Series A Stock then issued and outstanding were converted into an aggregate of 706,500 shares
of common stock of the Company.
We
will fix the rights, preferences, privileges and restrictions of the preferred stock of each series in the certificate of designation
relating to that series. We will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate
by reference from a current report on Form 8-K that we file with the SEC, the form of any certificate of designation that describes the
terms of the series of preferred stock we are offering before the issuance of the related series of preferred stock. This description
will include any or all of the following, as required:
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the
title and stated value; |
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the
number of shares we are offering; |
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the
liquidation preference per share; |
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the
purchase price; |
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the
dividend rate, period and payment date and method of calculation for dividends; |
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whether
dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
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any
contractual limitations on our ability to declare, set aside or pay any dividends; |
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the
procedures for any auction and remarketing, if any; |
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the
provisions for a sinking fund, if any; |
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the
provisions for redemption or repurchase, if applicable, and any restrictions on our ability to exercise those redemption and repurchase
rights; |
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any
listing of the preferred stock on any securities exchange or market; |
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whether
the preferred stock will be convertible into our common stock, and, if applicable, the conversion price, or how it will be calculated,
and the conversion period; |
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whether
the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price, or how it will be calculated,
and the exchange period; |
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voting
rights, if any, of the preferred stock; |
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preemptive
rights, if any; |
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restrictions
on transfer, sale or other assignment, if any; |
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whether
interests in the preferred stock will be represented by depositary shares; |
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a
discussion of any material or special United States federal income tax considerations applicable to the preferred stock; |
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the
relative ranking and preferences of the preferred stock as to dividend rights and rights if we liquidate, dissolve or wind up our
affairs; |
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any
limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock
as to dividend rights and rights if we liquidate, dissolve or wind up our affairs; and |
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any
other specific terms, preferences, rights or limitations of, or restrictions on, the preferred stock. |
If
we issue shares of preferred stock under this prospectus, after receipt of payment therefor, the shares will be fully paid and non-assessable.
The
Delaware General Corporation Law provides that the holders of preferred stock will have the right to vote separately as a class on any
proposal involving fundamental changes in the rights of holders of that preferred stock. This right is in addition to any voting rights
provided for in the applicable certificate of designation.
Our
board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting
power or other rights of the holders of our common stock. Preferred stock could be issued quickly with terms designed to delay or prevent
a change in control of our Company or make removal of management more difficult. Additionally, the issuance of preferred stock could
have the effect of decreasing the market price of our common stock.
Warrants
We
may issue warrants to purchase our securities or other rights, including rights to receive payment in cash or securities based on the
value, rate or price of one or more specified commodities, currencies, securities or indices, or any combination of the foregoing. Warrants
may be issued independently or together with any other securities that may be sold by us pursuant to this prospectus or any combination
of the foregoing and may be attached to, or separate from, such securities. To the extent warrants that we issue are to be publicly-traded,
each series of such warrants will be issued under a separate warrant agreement to be entered into between us and a warrant agent.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a current
report on Form 8-K that we file with the SEC, forms of the warrant and warrant agreement, if any. The prospectus supplement relating
to any warrants that we may offer will contain the specific terms of the warrants and a description of the material provisions of the
applicable warrant agreement, if any. These terms may include the following:
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the
title of the warrants; |
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the
price or prices at which the warrants will be issued; |
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the
designation, amount and terms of the securities or other rights for which the warrants are exercisable; |
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the
designation and terms of the other securities, if any, with which the warrants are to be issued and the number of warrants issued
with each other security; |
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the
aggregate number of warrants; |
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any
provisions for adjustment of the number or amount of securities receivable upon exercise of the warrants or the exercise price of
the warrants; |
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the
price or prices at which the securities or other rights purchasable upon exercise of the warrants may be purchased; |
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if
applicable, the date on and after which the warrants and the securities or other rights purchasable upon exercise of the warrants
will be separately transferable; |
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a
discussion of any material U.S. federal income tax considerations applicable to the exercise of the warrants; |
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the
date on which the right to exercise the warrants will commence, and the date on which the right will expire; |
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the
maximum or minimum number of warrants that may be exercised at any time; |
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information
with respect to book-entry procedures, if any; and |
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any
other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants. |
Exercise
of Warrants. Each warrant will entitle the holder of warrants to purchase the amount of securities or other rights, at the exercise
price stated or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up to the close of
business on the expiration date shown in the applicable prospectus supplement, unless otherwise specified in such prospectus supplement.
After the close of business on the expiration date, if applicable, unexercised warrants will become void. Warrants may be exercised in
the manner described in the applicable prospectus supplement. When the warrant holder makes the payment and properly completes and signs
the warrant certificate at the corporate trust office of the warrant agent, if any, or any other office indicated in the prospectus supplement,
we will, as soon as possible, forward the securities or other rights that the warrant holder has purchased. If the warrant holder exercises
less than all of the warrants represented by the warrant certificate, we will issue a new warrant certificate for the remaining warrants.
We
issued warrants to purchase an aggregate of 1,500,000 shares of common stock to investors in an offering from June 17, 2021 through July
14, 2021, in which the Company entered into subscription agreements with certain “accredited investor” (as defined in Regulation
D under the Securities Act). As of October 20, 2022, warrants to purchase 142,500 shares of common stock have been exercised,
and warrants to purchase 1,357,500 shares of common stock remain outstanding. Each Warrant entitles the holder to purchase shares
of common stock at an exercise price of $2.00 per share and will expire three years from the date of issuance. Prior to exercise, the
warrants do not confer upon holders any voting or any other rights as a stockholder. The warrants contain provisions that protect the
holders against dilution by adjustment of the purchase price in certain events such as stock dividends, stock splits and other similar
events.
On
November 5, 2021, we issued a warrant to purchase an aggregate of 56,000 shares of common stock at an exercise price of $5.00 per share
to Newbridge Securities Corporation. Such warrant is exercisable on a date which is 180 days from the closing of the Company’s
a firm commitment underwritten public offering and expires on November 11, 2024.
On
January 24, 2022, we issued to Lind Global Fund II LP (“Lind”), a Delaware limited partnership, a five-year warrant to purchase
1,000,000 shares of common stock of the Company at an exercise price of $4.50 per share, subject to customary adjustments. The warrant
provides for cashless exercise and for full ratchet anti-dilution if the Company issues securities at less than $4.50 per share.
Subscription
Rights
We
may issue rights to purchase our securities. The rights may or may not be transferable by the persons purchasing or receiving the rights.
In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or
other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after
such rights offering. In connection with a rights offering to holders of our capital stock a prospectus supplement will be distributed
to such holders on the record date for receiving rights in the rights offering set by us.
We
will file as exhibits to the registration statement of which this prospectus is a part, or will incorporate by reference from a current
report on Form 8-K that we file with the SEC, forms of the subscription rights, standby underwriting agreement or other agreements, if
any. The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including,
among other matters:
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the
date of determining the security holders entitled to the rights distribution; |
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the
aggregate number of rights issued and the aggregate amount of securities purchasable upon exercise of the rights; |
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the
exercise price; |
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the
conditions to completion of the rights offering; |
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the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and |
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any
applicable federal income tax considerations. |
Each
right would entitle the holder of the rights to purchase the principal amount of securities at the exercise price set forth in the applicable
prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided
in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
Holders
may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and the rights certificate properly
completed and duly executed at the corporate trust office of the rights agent, if any, or any other office indicated in the prospectus
supplement, we will, as soon as practicable, forward the securities purchasable upon exercise of the rights. If less than all of the
rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than stockholders,
to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby underwriting arrangements,
as described in the applicable prospectus supplement.
Debt
Securities
As
used in this prospectus, the term “debt securities” means the debentures, notes, bonds and other evidences of indebtedness
that we may issue from time to time. The debt securities will either be senior debt securities, senior subordinated debt or subordinated
debt securities. We may also issue convertible debt securities. Debt securities may be issued under an indenture (which we refer to herein
as an Indenture), which are contracts entered into between us and a trustee to be named therein. The Indenture has been filed as an exhibit
to the registration statement of which this prospectus forms a part. We may issue debt securities and incur additional indebtedness other
than through the offering of debt securities pursuant to this prospectus. It is likely that convertible debt securities will not be issued
under an Indenture.
The
debt securities may be fully and unconditionally guaranteed on a secured or unsecured senior or subordinated basis by one or more guarantors,
if any. The obligations of any guarantor under its guarantee will be limited as necessary to prevent that guarantee from constituting
a fraudulent conveyance under applicable law. In the event that any series of debt securities will be subordinated to other indebtedness
that we have outstanding or may incur, the terms of the subordination will be set forth in the prospectus supplement relating to the
subordinated debt securities.
We
may issue debt securities from time to time in one or more series, in each case with the same or various maturities, at par or at a discount.
Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the
holders of the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together
with all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable Indenture
and will be equal in ranking.
Should
an Indenture relate to unsecured indebtedness, in the event of a bankruptcy or other liquidation event involving a distribution of assets
to satisfy our outstanding indebtedness or an event of default under a loan agreement relating to secured indebtedness of our company
or its subsidiaries, the holders of such secured indebtedness, if any, would be entitled to receive payment of principal and interest
prior to payments on the unsecured indebtedness issued under an Indenture.
Each
prospectus supplement will describe the terms relating to the specific series of debt securities. These terms will include some or all
of the following:
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the
title of debt securities and whether the debt securities are senior or subordinated; |
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any
limit on the aggregate principal amount of debt securities of such series; |
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the
percentage of the principal amount at which the debt securities of any series will be issued; |
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the
ability to issue additional debt securities of the same series; |
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the
purchase price for the debt securities and the denominations of the debt securities; |
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the
specific designation of the series of debt securities being offered; |
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the
maturity date or dates of the debt securities and the date or dates upon which the debt securities are payable and the rate or rates
at which the debt securities of the series shall bear interest, if any, which may be fixed or variable, or the method by which such
rate shall be determined; |
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the
basis for calculating interest; |
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the
date or dates from which any interest will accrue or the method by which such date or dates will be determined; |
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the
duration of any deferral period, including the period during which interest payment periods may be extended; |
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whether
the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference
to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner
of determining the amount of such payments; |
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the
dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest
payable on any interest payment date; |
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the
place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities
may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered
to or upon us pursuant to the applicable Indenture; |
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the
rate or rates of amortization of the debt securities; |
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any
terms for the attachment to the debt securities of warrants, options or other rights to purchase or sell our securities; |
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if
the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms and provisions
of such collateral security, pledge or other agreements; |
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if
we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in
part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions; |
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our
obligation or discretion, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through
an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or
prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the
other terms and conditions of such obligation; |
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the
terms and conditions, if any, regarding the option or mandatory conversion or exchange of debt securities; |
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the
period or periods within which, the price or prices at which and the terms and conditions upon which any debt securities of the series
may be redeemed, in whole or in part at our option and, if other than by a board resolution, the manner in which any election by
us to redeem the debt securities shall be evidenced; |
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any
restriction or condition on the transferability of the debt securities of a particular series; |
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the
portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration
of the maturity of the debt securities in connection with any event of default; |
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the
currency or currencies in which the debt securities will be denominated and in which principal, any premium and any interest will
or may be payable or a description of any units based on or relating to a currency or currencies in which the debt securities will
be denominated; |
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provisions,
if any, granting special rights to holders of the debt securities upon the occurrence of specified events; |
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any
deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of
debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable Indenture; |
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any
limitation on our ability to incur debt, redeem stock, sell our assets or other restrictions; |
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the
application, if any, of the terms of the applicable Indenture relating to defeasance and covenant defeasance (which terms are described
below) to the debt securities; |
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what
subordination provisions will apply to the debt securities; |
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the
terms, if any, upon which the holders may convert or exchange the debt securities into or for our securities or property; |
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whether
we are issuing the debt securities in whole or in part in global form; |
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any
change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable
because of an event of default; |
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the
depositary for global or certificated debt securities, if any; |
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any
material federal income tax consequences applicable to the debt securities, including any debt securities denominated and made payable,
as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies; |
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any
right we may have to satisfy, discharge and defease our obligations under the debt securities, or terminate or eliminate restrictive
covenants or events of default in the Indentures, by depositing money or U.S. government obligations with the trustee of the Indentures; |
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the
names of any trustees, depositories, authenticating or paying agents, transfer agents or registrars or other agents with respect
to the debt securities; |
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to
whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the
record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security
will be paid; |
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if
the principal of or any premium or interest on any debt securities is to be payable in one or more currencies or currency units other
than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions
upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined); |
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the
portion of the principal amount of any debt securities which shall be payable upon declaration of acceleration of the maturity of
the debt securities pursuant to the applicable Indenture; |
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if
the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or
more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such debt securities as of
any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than
the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case,
the manner in which such amount deemed to be the principal amount shall be determined); and |
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any
other specific terms of the debt securities, including any modifications to the events of default under the debt securities and any
other terms which may be required by or advisable under applicable laws or regulations. |
Unless
otherwise specified in the applicable prospectus supplement, we do not anticipate the debt securities will be listed on any securities
exchange. Holders of the debt securities may present registered debt securities for exchange or transfer in the manner described in the
applicable prospectus supplement. Except as limited by the applicable Indenture, we will provide these services without charge, other
than any tax or other governmental charge payable in connection with the exchange or transfer.
Debt
securities may bear interest at a fixed rate or a variable rate as specified in the prospectus supplement. In addition, if specified
in the prospectus supplement, we may sell debt securities bearing no interest or interest at a rate that at the time of issuance is below
the prevailing market rate, or at a discount below their stated principal amount. We will describe in the applicable prospectus supplement
any special federal income tax considerations applicable to these discounted debt securities.
We
may issue debt securities with the principal amount payable on any principal payment date, or the amount of interest payable on any interest
payment date, to be determined by referring to one or more currency exchange rates, commodity prices, equity indices or other factors.
Holders of such debt securities may receive a principal amount on any principal payment date, or interest payments on any interest payment
date, that are greater or less than the amount of principal or interest otherwise payable on such dates, depending upon the value on
such dates of applicable currency, commodity, equity index or other factors. The applicable prospectus supplement will contain information
as to how we will determine the amount of principal or interest payable on any date, as well as the currencies, commodities, equity indices
or other factors to which the amount payable on that date relates and certain additional tax considerations.
On
January 24, 2022, we issued to Lind a secured, two-year, interest free convertible promissory note in the principal amount of $5,750,000.
The outstanding principal under the note is payable commencing July 24, 2022, in 18 consecutive monthly installments of $333,333, at
the Company’s option, in cash or shares of common stock at a price (the “Repayment Share Price”) based on 90% of the
five lowest volume weighted average prices (“VWAP”) during the 20-days prior to the payment date with a floor price of $1.50
per share (the “Floor Price”), or a combination of cash and stock provided that if at any time the Repayment Share Price
is deemed to be the Floor Price, then in addition to shares, the Company will pay Lind an additional amount in cash as determined pursuant
to a formula contained in the note.
In
connection with the issuance of the note, we granted Lind a first priority security interest and lien on all of our assets, including
a pledge on our shares in Keeler & Co., our wholly-owned subsidiary, pursuant to a security agreement and a stock pledge
agreement with Lind, dated January 24, 2022. Each subsidiary of the Company also granted a second priority security interest in all of
its respective assets.
The
note is mandatorily payable prior to maturity if the Company issues any preferred stock (with certain exceptions described in the note)
or, if the Company or its subsidiaries issues any indebtedness other than certain amounts under the current line of credit facility with
Lighthouse Financial Corp. The Company also agreed not to issue or sell any securities with a conversion, exercise or other price based
on a discount to the trading prices of the Company’s stock or to grant an investor the right to receive additional securities based
on future transactions of the Company on terms more favorable than those granted to Lind, with certain exceptions.
If
the Company engages in capital raising transactions, Lind has the right to purchase up to 10% of the new securities.
The
note is convertible into common stock at $5.00 per share, subject to certain adjustments, at any time after the earlier of six months
from issuance or the date the registration statement is effective; provided that no such conversion may be made that would result in
beneficial ownership by Lind and its affiliates of more than 4.99% of the Company’s outstanding shares of common stock. If shares
are issued by the Company at less than the conversion price, the conversion price will be reduced to such price.
Upon
a change of control of the Company, as defined in the note, Lind has the right to require the Company to prepay 10% of the outstanding
principal amount of the note.
The
Company may prepay the outstanding principal amount of the note, provided Lind may convert up to 25% of the principal amount of the note
at a price per share equal to the lesser of the Repayment Share Price or the conversion price.
The
note contains certain negative covenants, including restricting the Company from certain distributions, stock repurchases, borrowing,
sale of assets, loans and exchange offers.
Upon
an event of default as described in the note, the note will become immediately due and payable at a default interest rate of 125% of
the then outstanding principal amount. Upon a default, all or a portion of the outstanding principal amount may be converted into shares
of common stock by Lind at the lower of the conversion price and 80% of the average of the three lowest daily VWAPs.
Units
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we may issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent, if any, may be a bank or trust company that we select. We will indicate the name and address of the
unit agent, if any, in the applicable prospectus supplement relating to a particular series of units. Specific unit agreements, if any,
will contain additional important terms and provisions. We will file as an exhibit to the registration statement of which this prospectus
is a part, or will incorporate by reference from a current report that we file with the SEC, the form of unit and the form of each unit
agreement, if any, relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without
limitation, the following, as applicable:
| |
● |
the
title of the series of units; |
| |
● |
identification
and description of the separate constituent securities comprising the units; |
| |
● |
the
price or prices at which the units will be issued; |
| |
● |
the
date, if any, on and after which the constituent securities comprising the units will be separately transferable; |
| |
● |
a
discussion of certain United States federal income tax considerations applicable to the units; and |
| |
● |
any
other material terms of the units and their constituent securities. |
LEGAL
MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the validity of the securities offered by this prospectus will be passed
upon for us by The Crone Law Group, P.C., New York, New York. If legal matters in connection with offerings made by this prospectus are
passed on by counsel for the underwriters, dealers or agents, if any, that counsel will be named in the applicable prospectus supplement.
EXPERTS
Our
consolidated financial statements as of and for the years ended December 31, 2021 and 2020, included in our Annual Report on Form 10-K
for the year ended December 31, 2021, have been audited
by MaloneBailey, LLP, independent registered public accounting firm, as set forth in their report, and have been incorporated herein
by reference in reliance upon the report of such firm given on their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
We
file annual, quarter and periodic reports, proxy statements and other information with the Securities and Exchange Commission using the
Commission’s EDGAR system. The Commission maintains a web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission. The address of such site is http//www.sec.gov.
INCORPORATION
OF DOCUMENTS BY REFERENCE
We
are “incorporating by reference” in this prospectus certain documents we file with the SEC, which means that we can disclose
important information to you by referring you to those documents. The information in the documents incorporated by reference is considered
to be part of this prospectus. Statements contained in documents that we file with the SEC and that are incorporated by reference in
this prospectus will automatically update and supersede information contained in this prospectus, including information in previously
filed documents or reports that have been incorporated by reference in this prospectus, to the extent the new information differs from
or is inconsistent with the old information. We have filed or may file the following documents with the SEC and they are incorporated
herein by reference as of their respective dates of filing.
1.
Our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on March 31, 2022;
2.
Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2022, June
30, 2022, and September
30, 2022, as filed with the SEC on May 13, 2022, August 15, 2022, and November 14, 2022, respectively; and
3.
Our Current Reports on Form 8-K as filed with the SEC on January
28, 2022, February
9, 2022, April
25, 2022, August
16, 2022, November
15, 2022, and November 23, 2022.
All
documents that we filed with the SEC pursuant to Sections 13(a), 13(c), 14, and 15(d) of the Exchange Act subsequent to the date of this
registration statement and prior to the filing of a post-effective amendment to this registration statement that indicates that all securities
offered under this prospectus have been sold, or that deregisters all securities then remaining unsold, will be deemed to be incorporated
in this registration statement by reference and to be a part hereof from the date of filing of such documents.
Any
statement contained in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed modified,
superseded or replaced for purposes of this prospectus to the extent that a statement contained in this prospectus, or in any subsequently
filed document that also is deemed to be incorporated by reference in this prospectus, modifies, supersedes or replaces such statement.
Any statement so modified, superseded or replaced shall not be deemed, except as so modified, superseded or replaced, to constitute a
part of this prospectus. None of the information that we disclose under Items 2.02 or 7.01 of any Current Report on Form 8-K or any corresponding
information, either furnished under Item 9.01 or included as an exhibit therein, that we may from time to time furnish to the SEC will
be incorporated by reference into, or otherwise included in, this prospectus, except as otherwise expressly set forth in the relevant
document. Subject to the foregoing, all information appearing in this prospectus is qualified in its entirety by the information appearing
in the documents incorporated by reference.
If
you make a request for such information in writing or by telephone, we will provide you, without charge, a copy of any or all of the
information incorporated by reference into this prospectus. Any such request should be directed to:
Blue
Star Foods Corp.
3000
NW 109th Avenue
Miami,
Florida 33172
(305)
836-6858
Our
website address is https://bluestarfoods.com/. Except for any documents that are incorporated by reference into this prospectus
that may be accessed from our website, the information available on or through our website is not part of this prospectus.
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