Company: BSFC
Filing Date: 2025-07-15
Form Type: 10-Q
Source: 0001641172-25-019736
Chunk: 10

Company: Blue Star Foods Corp.
Filing Date: 2025-07-15
Form: 10-Q
Item: Part I, Item 1
Chunk 10
---
 the information and footnotes required for complete annual financial statements. These financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto which are included in our Annual Report on Form 10-K
for the year ended December 31, 2024 filed with the SEC on June 23, 2025 for a broader discussion of our business and the risks inherent
in such business.

Advances
to Suppliers and Related Party 

In
the normal course of business, the Company may advance payments to its suppliers, including of Bacolod Blue Star Export Corp. (“Bacolod”),
a related party based in the Philippines. These advances are in the form of prepayments for products that will ship within a short window
of time. In the event that it becomes necessary for the Company to return products or adjust for quality issues, the Company is issued
a credit by the vendor in the normal course of business and these credits are also reflected against future shipments.

As
of March 31, 2025, and December 31, 2024, the balance due from the related party for future shipments was approximately $1,300,000. During
the year ended December 31, 2024, the Company determined it was appropriate to record an allowance for the full balance due from Bacolod.
No new purchases have been made from Bacolod since November 2020. There was no cost of revenue related to inventories purchased from
Bacolod recorded for the three months ended March 31, 2025 and 2024.

Revenue
Recognition

The
Company recognizes revenue in accordance with Accounting Standards Codification (ASC) 606, Revenue from Contracts with Customers, as
such, we record revenue when our customer obtains control of the promised goods or services in an amount that reflects the consideration
which the Company expects to receive in exchange for those goods or services. The Company’s source of revenue is from importing blue and red swimming crab meat primarily from South East
Asia and distributing it in the United States and Canada under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go,
First Choice, Good Stuff and Coastal Pride Fresh, and steelhead salmon and rainbow trout fingerlings produced under the brand name Little
Cedar Farms for distribution in Canada. We sell primarily to food service distributors. The Company also sells its products to wholesalers,
retail establishments and seafood distributors. 

     9 

To
determine