Jan. 24, 2022

Minnesota-based aquaculture startup The Tru Shrimp Cos. Inc., which plans to build a $90 million production facility in South Dakota, has filed plans for an initial public offering.

The company is asking to begin trading on the Nasdaq but hasn’t set an initial price range for its IPO.

Tru Shrimp has a pilot-scale facility in Balaton, Minnesota, where it was commissioned in 2018 and has been producing shrimp.

The company started as part of Marshall, Minnesota-based Ralco Nutrition.

In its SEC filing, the company calls itself  “an early-stage seafood and biopolymer production company pioneering the development and commercialization of a scalable, shallow-water indoor aquaculture technology platform” that so far has focused nearly exclusively on research and development, and now intends to commercialize.

Its expectation is to become one of the  premier domestic producers of premium positioned shrimp and one of the only domestic FDA-registered at-scale producers of chitosan and subsequent chitosan derivatives, it said.

Chitosan is made by processing the chitin found in the shells of the shrimp. It can be used in biomedical, pharmaceutical, dermatology and high-end consumer cosmetic markets.

“Our extensive research, development and optimization has led to a technology platform that enables us to produce shrimp and shrimp exoskeleton material at scale in a traceable, safe and documented sustainable manner,” Tru Shrimp said. “The shrimp exoskeleton materials represent a key raw material used in the production of chitosan and chitosan derivatives.”

The company said it has entered into an agreement with Parimer Scientific, a contract manufacturing organization, to develop private label USP-grade chitosan products from its exoskeleton material and to develop the processes, procedures and equipment necessary for commercial manufacturing of such products.

Madison Bay Harbor, the estimated $90 million facility planned in South Dakota, is expected to produce 1.3 million pounds of unprocessed shrimp annually, resulting in 790,000 pounds of processed shrimp and enough exoskeleton material for approximately 6,173 pounds of chitosan and its derivatives.

“The combination of superior density, growth rate and survival enables us to grow shrimp across the entire spectrum of market sizes with a distinct competitive advantage of growing the most valuable shrimp — 30 count per pound and larger,” the company said.

“We are targeting the premium segment of the shrimp market and intend to sell through United States-based distributors and consumer-direct channels.”

Madison Bay Harbor is envisioned as a 191,000-square-foot biosecure facility housing 36 tidal basins, a shrimp processing facility, offices and support systems. There has been $4 million invested into design and engineering.

Tru Shrimp plans to use a portion of the proceeds of the public offering and existing cash to finalize engineering and complete the construction bid process, but it will still need to obtain $75 million to $80 million in financing for construction — which is an estimate.

“Subject to securing adequate funding, we intend to break ground in 2022,” the company said. “Upon commencing operations, we believe an aggregate capital investment of $90 million will have a payback period of less than five years, assuming the revenue targets for shrimp, pet food and chitosan product sales and our estimated operating income target of 45 percent or more is achieved.”

The company had an accumulated deficit of $33.4 million at the end of 2020.

Leadership declined to comment beyond the SEC filing.

Here’s a look at the last update SiouxFalls.Business did on the company in 2021:

Tru Shrimp finds momentum with revamped plan, new opportunities