Company: BSFC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021887
Chunk: 9

Company: Blue Star Foods Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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ex’s inventory. Under the Services Agreement,
Afritex may not sell or otherwise use as consideration any of its intellectual property without the Company’s consent. The Company
must maintain certain commercial liability insurance during the term of the Services Agreement. The Services Agreement also provides
that the Company may not solicit Afritex employees for 24 months nor circumvent existing business relationships of Afritex for three
years, after the term of the Services Agreement. The term of the Services Agreement will automatically extend for three thirty-day periods,
if Afritex’s outstanding debt is no greater than $325,000. The Company automatically extended the Service Agreement to August 31,
2024 after which it expired. The Company incurred losses of approximately $1.5 million from our Services Agreement with Afritex.

In
connection with the Services Agreement, on February 12, 2024, the Company entered into an Intangibles Assets and Machinery Option to
Purchase Agreement with Afritex (the “Option Agreement”). Pursuant to the Option Agreement, the Company has the option to
purchase Afritex’s intangible assets, machinery and equipment set forth in the Option Agreement for a purchase price of $554,714
for machinery and equipment and 100,000 shares of the Company’s common stock were issued on February 12, 2024 to be held in escrow,
for intangible assets. The Company did not exercise its option to purchase such intangible assets, machinery and equipment.

In
connection with the Services Agreement, on February 1, 2024, AFVFL, a wholly-owned subsidiary of the Company, was incorporated in the
State of Florida for the purpose of purchasing raw materials from Afritex for the preparation of packaged seafood and other inventory
to be sold to various customers in the United States.

    8

On
May 20, 2024, the Company amended its Certificate of Incorporation to affect a one-for-fifty reverse stock split (“Reverse Stock
Split”), which became effective the same day. All share and per share amounts have been restated for all periods presented to reflect
the Reverse Stock Split.

Note
2. Summary of Significant Accounting Policies

Basis
of Presentation

The
following unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities
and Exchange Commission (“SEC”). Accordingly, such interim financial statements do not include all the information and footnotes
required by accounting principles generally accepted in the United States (“GAAP