Company: BSFC
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021887
Chunk: 13

Company: Blue Star Foods Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 13
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 30, 2025, the Company recorded an inventory allowance of $916,573. 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 September 30, 2025 and December 31, 2024 consists of:

Schedule
of Inventory 

    September 30, 2025  
    December 31, 2024 

    Inventory purchased for resale 
    $994,237  
    $1,644,085 
  
    Feeds and eggs processed 
     18,703  
     65,924 
  
    Raw materials for packaged seafood 
     20,899  
     155,056 
  
    Less: Inventory allowance 
     (916,573) 
     (1,417,305)
  
    Inventory, net 
    $117,266  
    $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
not have any finance leases as of September 30, 2025. The Company’s leases generally have terms that range from 3three years for
equipment and 6six to seven years for real property. The Company elected the accounting policy to include both the lease and non-lease
components of its agreements as a single component and accounts for them as a lease.

Lease
liabilities are recognized at the present value of the fixed lease payments using a discount rate based on similarly secured borrowings
available to us. Lease assets are recognized based on the initial present value of the fixed lease payments, reduced by landlord incentives,
plus any direct costs from executing the lease. Lease assets are tested for impairment in the same manner as long-lived