Minnesota's Tru Shrimp files to go public

Southwest Minnesota-based Tru Shrimp, the indoor shrimp farm company, plans to go public this year to help it rapidly increase production.

"We've been at this now over six years, and we firmly believe the research is done and we're ready to commercialize," Tru Shrimp chief executive Michael Ziebell said Wednesday. "We have customers for our products. This is the next step going forward."

The aquaculture firm based in tiny Balaton, Minn., filed an IPO prospectus with the Securities and Exchange Commission Tuesday afternoon but has not yet nailed down an initial share price or the total amount the company wants to raise.

The filing marks Minnesota's first initial public offering registration of the year. In 2021, there were eight successful IPOs to come out of Minnesota.

Tru Shrimp plans to break ground on a $90 million commercial production facility in Madison, S.D., later this year, pending financing. The company had originally planned to open a plant in Luverne, Minn., but was courted away by South Dakota incentives and perceived regulatory hurdles in Minnesota.

The company expects to grow 1.3 million pounds of head-on, shell-on shrimp annually, which equals 790,000 pounds of processed shrimp, according to the filing.

Americans consume more than 1.5 billion pounds of shrimp per year, almost all of it imported, federal data shows.

Tru Shrimp also plans to make and market chitosan, a biopolymer derived from shrimp exoskeletons, for "the high value and high margin biomedical, pharmaceutical, dermatology and high-end consumer cosmetic markets," the company said in its filing.

Chitosan is expected to be the company's biggest money-maker, with estimated annual revenue of $21 million at full production, the company estimated. The company also plans to sell shrimp heads and other protein-rich "waste stream" products into the pet food market for about $3 million per year.

Shrimp sales are expected to account for $12 million in yearly revenue.

The company has 25 employees today at its headquarters and pilot production facility in Balaton. It expects to add 60 more in South Dakota.

Ziebell said Tru Shrimp is working to find a distributor for Twin Cities supermarkets and is already selling some shrimp through its $11 million pilot plant, which can produce 45,000 pounds of unprocessed shrimp per year.

The company began as a division of Marshall-based agriculture firm Ralco in 2014 and was spun off in 2017.

Ralco and its owners, Jon and Brian Knochenmus, will "continue to control a majority of the voting power of shares eligible to vote in the election of our directors" following Tru Shrimp's listing, according to the prospectus.

Marshall-based Schwan's Co. owns a 9% stake in the company.

Tru Shrimp has received $70 million in investments to date and has incurred "significant net losses and negative cash flows," the prospectus said.

The company went quiet through the first year of the pandemic, furloughing employees from May 2020 through July 2021. Ziebell said the pandemic made it difficult to raise capital as "people were not able to come to Balaton to visit and see our technology."

"Management previously stated that there was substantial doubt about our ability to continue as a [business] due to our limited capital resources," according to the prospectus. "We do not expect significant revenues until Madison Bay Harbor is constructed and operational."

Tru Shrimp has applied for listing on the Nasdaq under the ticker symbol BTRU. Ziebell said more stock offering details and timing will be identified "as market conditions allow."