Company: BSFC
Filing Date: 2025-07-15
Form Type: 10-Q
Source: 0001641172-25-019736
Chunk: 14

Company: Blue Star Foods Corp.
Filing Date: 2025-07-15
Form: 10-Q
Item: Part I, Item 1
Chunk 14
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 of the asset may not be recoverable,
the potential impairment is measured using fair value. Fair value estimates are completed using a discounted cash flow analysis. Impairment
losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. No impairment
was recognized for the three months ended March 31, 2025 and for the year ended December 31, 2024.

Foreign
Currency Exchange Rates Risk

The
Company manages its exposure to fluctuations in foreign currency exchange rates through its normal operating activities. Its primary
focus is to monitor exposure to, and manage, the economic foreign currency exchange risks faced by, its operations and realized when
the Company exchanges one currency for another. The Company’s operations primarily utilize the U.S. dollar and Canadian dollar
as its functional currencies. Movements in foreign currency exchange rates affect its financial statements.

Fair
Value Measurements and Financial Instruments

Fair
value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date and is measured using inputs in one of the following three categories:

Level
1 measurements are based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to
access. Valuation of these items does not entail a significant amount of judgment.

Level
2 measurements are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active or market data other than quoted prices that are observable for the assets or liabilities.

Level
3 measurements are based on unobservable data that are supported by little or no market activity and are significant to the fair value
of the assets or liabilities.

Our
financial instruments include cash, accounts receivable, accounts payable, accrued expenses, debt obligations, derivative liabilities
and warrant liabilities. We believe the carrying values of our cash, accounts receivable, accounts payable, and accrued expenses approximate
their fair values because they are short term in nature or payable on demand. The derivative liability is the embedded conversion feature
on the 2023 Lind convertible note. All derivatives and warrant liabilities are recorded at fair value. The change in fair value for derivatives
and warrants liabilities is recognized in earnings. The Company’s derivative and warrant liabilities are measured at fair value
on a recurring basis using the Black Scholes Pricing model as of March 31, 2025 and December 31,