Company: BSFC
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001493152-25-012137
Chunk: 50

Company: Blue Star Foods Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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 using the first-in, first-out method for crab meat and raw materials for packaged
seafood inventory and using various estimates and assumptions in regard to the calculation of the biomass, including expected yield,
market value of the biomass, and estimated costs of completion.

Merchandise
is purchased on a cost and freight shipping point basis, and it becomes the Company’s asset and liability upon leaving the suppliers’
warehouse.

    10

The
Company periodically reviews the value of items in inventory and records an allowance to reduce the carrying value of inventory to the
lower of cost or net realizable value based on its assessment of market conditions, inventory turnover and current stock levels. For
the six months ended June 30, 2025, the Company recorded an inventory allowance of $1,444,737. For the year ended December 31, 2024,
the Company recorded an inventory allowance in the amount of $1,417,305 which was charged to cost of goods sold.

The
Company’s inventory as of June 30, 2025 and December 31, 2024 consists of:

Schedule
of Inventory 

    June 30, 2025  
    December 31,  2024 

    Inventory purchased for resale 
    $1,639,247  
    $1,644,085 
  
    Feeds and eggs processed 
     23,180  
     65,924 
  
    Raw materials for packaged seafood 
     31,305  
     155,056 
  
    Less: Inventory allowance 
     (1,444,737) 
     (1,417,305)
  
    Inventory, net 
    $248,995  
    $447,760 

Lease
Accounting

The
Company accounts for its leases under ASC 842, Leases, which requires all leases to be reported on the balance sheet as right-of-use
assets and lease obligations. The Company elected the practical expedients permitted under the transition guidance that retained the
lease classification and initial direct costs for any leases that existed prior to adoption of the standard.

The
Company categorizes leases with contractual terms longer than twelve months as either operating or finance. Finance leases are
generally those leases that would allow the Company to substantially utilize or pay for the entire asset over its estimated life.
Assets acquired under finance leases are recorded in property and equipment, net. All other leases are categorized as operating
leases. The Company did