Farmmi Inc.: Investment Losses

Have you suffered losses investing in Farmmi Inc. at the recommendation of your financial advisor? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA lawsuit against your brokerage firm.

What is Farmmi Inc.?

Farmmi, Inc. (NASDAQ: FAMI), through its subsidiaries, engages in processing and sale of agricultural products in China, the United States, Japan, Canada, Europe, Korea, and the Middle East. The company’s products are offered under Lishui Shangeng, Farmmi Liangpin, Forasen, and Puyangtang brands. It offers its products through local distributors to processing manufacturers, supermarkets, restaurants, cafeterias, and local specialty stores. The company was founded in 1994 and is headquartered in Lishui, China.

In March 2021, Farmmi Inc. offered shares of its common stock for sale to investors.  The offering was reportedly underwritten by Aegis Capital Corp. As of February 28, 2024, the average post offering return was –95.5%. The company’s common stock was traded on the NASDAQ, under the symbol “FAMI.”

NASDAQ Non-compliance – Share Price Below $1.00

As of April 26, 2024, according to a PR Newswire article: Farmmi, Inc. announced that on April 22, 2024, it received a letter from The Nasdaq Stock Market LLC notifying the Company that it is currently not in compliance with the minimum bid price requirement. It resulted from the fact that the closing bid price of the Company’s ordinary shares was below $1.00 per share for a period of 32 consecutive business days.

Farmmi Inc. reportedly has a compliance period of 180 calendar days, or until October 21, 2024, to regain compliance with Nasdaq’s minimum bid price requirement.

As of August 14, 2024, according to Market Watch shares of Farmmi Inc., were down -81.89% over the last 12 months.

Risks Associated with Small Stock Offerings 

There are numerous risks involved in investing in small stock offerings, including the following, among others:

Liquidity Concerns: These stocks may have low trading volumes, making it difficult to buy or sell shares at desired prices.

Lack of Information: Many small companies may not provide comprehensive financial disclosures or have limited operating histories.

Market Volatility: Small stocks can be more volatile than larger, established companies, leading to significant price fluctuations.

Farmmi Inc.: Suitable Investment for you?

Broker due diligence is a process undertaken by brokerage firms to ensure they are recommending and selling investment products appropriate for their clients. This process protects the interests of the brokerage firm and its clients by ensuring that the investments offered are suitable for the client’s investment objectives, risk tolerance, and financial situation.

If a broker or brokerage firm makes an unsuitable investment recommendation or fails to disclose the associated risks adequately, they may be found liable for investment losses in a FINRA arbitration claim. Fortunately, FINRA provides an arbitration forum for investors to resolve such disputes.

Class Action vs. Individual FINRA Arbitration Lawsuit

You may wonder whether a large class action lawsuit is a better litigation option than an individual FINRA arbitration case.  The answer depends on many factors, but typically if the loss sustained is large (say larger than $100,000), an individual arbitration claim is likely a better option.  Class actions as a recovery option are more appropriate for grouping large numbers of individuals who have small claims – too small to generally pursue individually.

Free Consultation

If you have suffered investment losses in Farmmi Inc., you may have recovery options. Please call the securities attorneys at The White Law Group for a free consultation at 1-888-637-5510.

About The White Law Group 

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington. The firm represents investors across the country in claims against their brokerage firms.