Farmmi Inc. (NASDAQ: FAMI) has attracted attention due to its high-risk profile, stock volatility, and a growing number of investor complaints. Reports suggest that more than 1,000 investors have filed grievances against brokers over unsuitable recommendations involving Farmmi shares, with average losses ranging from $5,000 to $50,000.
If you have suffered significant losses in a risky investment underwritten by Aegis Capital Corp. such as Farmmi Inc., reach out to Meyer Wilson Werning today. Our attorneys have experience recovering losses for our clients who unknowingly invested in products that were unsuitable for their portfolio.

Understanding Farmmi’s Business and Financial Situation
Farmmi primarily sells shiitake mushrooms, mu er mushrooms, other edible fungi, and related agricultural products. Importantly, Farmmi does not cultivate these products but purchases them from third-party suppliers, creating vulnerabilities tied to supply chain reliance.
Offering Details and Financial Position
Farmmi announced a March 22, 2021 offering of 6,469,467 ordinary shares, priced at $1.15 per share. By April 4, 2024, shares were trading below $1, raising concerns about compliance with NASDAQ listing requirements. The company has consistently reported losses since its inception, and its prospectus warned of future capital needs and potential dilution of existing shareholders.
Key financial risks include:
- Persistent losses: Farmmi has struggled to achieve profitability.
- Stock dilution: Issuing more shares to raise capital reduces the value of existing shares.
- Relinquished rights: Collaborations or fundraising agreements may force Farmmi to give up valuable revenue streams or rights.
These disclosures show a company heavily dependent on raising capital, with existing investors exposed to dilution and uncertainty.
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The Impact of COVID-19 on Farmmi
The COVID-19 pandemic further complicated Farmmi’s operations. Restrictions and delays disrupted suppliers, logistics providers, and distributors.
COVID-19-Related Risks for Investors
The company warned that such disruptions could harm financial performance. Increased costs and delays in shipping impacted Farmmi’s ability to meet expectations. While Farmmi reported a 44% increase in revenue for the first half of 2023 compared to the same period in 2022, the unpredictable nature of the pandemic left investors exposed to volatility.
Farmmi’s situation demonstrates how external challenges, combined with internal weaknesses, can magnify investor risks.
Risks of Investing in Farmmi
Farmmi’s own filings outlined significant risks for investors that brokers should have disclosed.
Volatility and Delisting Concerns
The company acknowledged that its shares were highly volatile. In the last quarter of 2020, the stock price swung between $1.45 and $0.69. Once shares fell below $1.00, delisting became a real concern.
This type of instability makes Farmmi unsuitable for investors with moderate or conservative risk tolerances.
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Aegis Underwriting Corp. and Their Practices
Farmmi’s 2021 offering was underwritten by Aegis Capital Corp. Underwriting plays a role in bringing securities to market, but it can also create risks for retail investors.
How Underwriting Influences Investor Risk
- Incentives to underwrite risky offerings: Underwriters earn fees by backing offerings, even when they involve high-risk companies.
- Broker conflicts of interest: Brokers affiliated with underwriters may recommend shares to clients despite the risks, putting firm profits ahead of investor protection.
These conflicts highlight why investors may have been steered into Farmmi shares despite the company’s clear financial red flags.
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Broker Responsibilities and Unsuitability Issues
FINRA Rule 2111 requires brokers to recommend only investments suitable for a client’s financial profile. Many Farmmi investors allege that their brokers recommended these shares despite the investors having low to moderate risk tolerance.
What Brokers Should Have Done
- Matched Farmmi only to investors with a high-risk tolerance.
- Fully disclosed the volatility, delisting risks, and financial instability.
- Avoided conflicts tied to underwriting arrangements.
Failing to meet these obligations exposes brokers to potential liability, giving investors the right to pursue recovery through arbitration or other legal action.
How Meyer Wilson Werning Helps Investors Affected by Farmmi
The case of Farmmi shows how unsuitable recommendations in volatile stocks can harm retail investors. If you have suffered losses due to investments in Farmmi Inc., legal remedies may be available. The securities attorneys at Meyer Wilson Werning are experienced in investment fraud and broker misconduct and can provide valuable assistance in recovering losses. Our attorneys help investors manage the intricate landscape of securities law, pursuing claims against brokers or firms that violated their fiduciary duties or regulatory obligations. Contact us today for a free consultation.
Frequently Asked Questions

Why is Farmmi Inc. considered a high-risk investment?
Farmmi has never achieved profitability and relies heavily on issuing new shares, which dilutes existing investors. Its stock has also faced volatility and NASDAQ delisting concerns.
How did COVID-19 affect Farmmi’s operations and investors?
Pandemic-related restrictions disrupted suppliers and logistics, raising costs and creating uncertainty. While revenue briefly improved in 2023, volatility left investors exposed to sudden swings.
What role did Aegis Capital play in Farmmi’s stock offering?
Aegis underwrote Farmmi’s 2021 offering, helping bring shares to market despite the risks. This connection raised concerns about brokers recommending the stock due to conflicts of interest.
Why are investors filing complaints about Farmmi shares?
More than 1,000 investors have reported losses, many tied to unsuitable broker recommendations. Complaints focus on volatility, financial instability, and undisclosed risks.
Can investors recover losses tied to Farmmi investments?
Yes, investors may have legal claims if brokers failed to disclose risks or recommended Farmmi shares despite low risk tolerance. Arbitration is often the path to pursue recovery.
Recovering Losses Caused by Investment Misconduct.