Farmmi Investor Alert

Soreide Law Group is investigating potential claims from investors who were sold Farmmi, Inc. (FAMI) by their financial advisors or brokerage firms. Farmmi is a China-based agricultural company that has recently drawn scrutiny due to its stock performance and the practices of its underwriter. There is concerning information about this investment that investors should understand. The following sections provide an overview of the product, related risks, and what rights investors may have.

What is Farmmi?

Farmmi, Inc. (NASDAQ: FAMI) is an agricultural enterprise incorporated in 2015 in the Cayman Islands and later listed on NASDAQ in 2018. The company focuses on cultivating and distributing edible mushrooms, selling its products both domestically and internationally. It operates through a network of farms and has developed a branded online marketplace called Farmmi Jicai, which features products under several names, including Farmmi and Forasen. The firm has also expanded its physical presence with large-scale distribution centers in Los Angeles and New Jersey, supporting exports across Asia, Europe, and North America.

Concerns About Farmmi

Although Farmmi has established operations and infrastructure, the company’s stock has reportedly performed poorly in recent years. Beginning in 2021, Farmmi raised money by issuing new shares underwritten by Aegis Capital, a strategy that allegedly resulted in dilution of existing shareholders’ investments. By early 2024, Farmmi’s stock value had fallen by more than 95%, leading to compliance warnings from NASDAQ for failing to maintain the required minimum share price. While the company recently regained compliance by trading above one dollar per share, many investors allegedly suffered large losses during this period. Analysts and reports have noted a pattern in Aegis-underwritten offerings, several of which have led to negative outcomes for retail investors.

Sales Practice Violations

Brokers and financial advisors are legally required to recommend investments that are suitable based on each client’s financial situation, goals, and risk tolerance. When firms fail to properly evaluate or disclose the risks of investments such as Farmmi, investors may be exposed to unsuitable and high-risk products. Violations in cases like these often include failure to conduct due diligence, omitting key information about risks, or recommending speculative investments to conservative clients. Investors who have experienced losses may pursue recovery through FINRA arbitration or related legal actions, which provide a forum for resolving disputes with brokerage firms.

Did You Sustain Losses By Investing In Farmmi?

Did you experience losses because of investing in Farmmi, Inc. (FAMI) as a result of your broker’s recommendation? If so, reach out to Soreide Law Group online or at (888) 760-6552 to speak with a securities attorney about your options for potential recovery. Soreide Law Group represents investors nationwide, advancing all costs and working on a contingency fee basis, meaning there are no attorney’s fees unless a financial recovery is made.