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

Company: Blue Star Foods Corp.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 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 September 30, 2025, the Company recorded allowances for sales returns, allowances and discounts of $24,300 and refund liability
of $0. There was no allowance for bad debt recorded for the nine months ended September 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 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 nine months ended September