Company: BSFC
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001493152-25-012137
Chunk: 49

Company: Blue Star Foods Corp.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 49
---

Company transfers control of the goods to the customers by shipment or delivery of the products.

The
Company elected an accounting policy to treat shipping and handling activities as fulfillment activities. Consideration payable to a
customer is recorded as a reduction of the arrangement’s transaction price, thereby reducing the amount of revenue recognized,
unless the payment is for distinct goods or services received from the customer.

Accounts
Receivable

Accounts
receivable consist of unsecured obligations due from customers under normal trade terms, usually net 30 days. The Company grants credit
to its customers based on the Company’s evaluation of a particular customer’s credit worthiness.

Allowances
for credit losses are maintained for potential credit losses based on the age of the accounts receivable and the results of the Company’s
periodic credit evaluations of its customers’ financial condition. Receivables are written off as uncollectible and deducted from
the allowance for doubtful accounts after collection efforts have been deemed to be unsuccessful. Subsequent recoveries are netted against
the allowance for credit losses. The Company generally does not charge interest on receivables.

Receivables
are net of estimated allowances for doubtful accounts and sales return, allowances and discounts. They are stated at estimated net realizable
value. As of June 30, 2025, the Company recorded allowances for sales returns, allowances and discounts of $28,800 and refund liability
of $33,800. There was no allowance for bad debt recorded for the six months ended June 30, 2025. As of December 31, 2024, the Company
recorded sales return, allowances and discounts of $39,000 and refund liability of $57,000. There was no allowance for bad debt recorded
for the year ended December 31, 2024.

Inventories

Substantially
all of the Company’s inventory consists of packaged crab meat located at a public cold storage facility and merchandise in transit
from suppliers. The Company also has eggs and fish in process inventory from TOBC and raw materials for packaged seafood and other inventory
from AFVFL. The cost of inventory is primarily determined using the specific identification method for crab meat and raw materials for
packaged seafood inventory. Fish in process inventory is measured based on the estimated biomass of fish on hand. The Company has established
a standard procedure to estimate the biomass of fish on hand using counting and sampling techniques. Inventory is valued at the lower
of cost or net realizable value, cost being determined