Blue Star Foods Corp (BSFC): 2024 10-K Deep Dive & Investment Score

Blue Star Foods Corp ("Company" or "BSFC") is a publicly traded (OTCQB: BSFC) seafood importer and distributor headquartered in Miami, Florida. BSFCs core business is importing high-grade blue and red crab meat from Southeast Asia and Latin America, packaging under proprietary brands, and selling to foodservice and retail customers in the U.S. and Canada. Subsidiaries include:

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• John Keeler & Co. (operates under BSFC brand names: Blue Star, Pacifica, Oceanica, Crab & Go)
• Coastal Pride Seafood (fresh and pasteurized crab under Good Stuff, First Choice, Coastal Pride Fresh)
• Taste of BC Aquafarms (TOBC) (100-ton RAS salmon farm in British Columbia producing steelhead salmon)
• Afritex Ventures (AFVFL) (seafood packaging reseller)

In this post, we unpack the most important information from BSFCs 2024 Annual Report (Form 10-K), assess its financial health, and assign an Investment Score on a 1–10 scale (1 = no potential, 10 = very attractive).

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1. Business Overview (Item 1)

BSFC imports, packages, and distributes premium crabmeat products sourced from:

• Blue Star – Portunus pelagicus from Indonesia, the Philippines, Thailand, Vietnam, Sri Lanka and India.
• Pacifica – Portunus haanii from China and Vietnam.
• Oceanica – Portunus haanii from Vietnam.
• Lubkins Coastal Pride – Callinectes species from Mexico and the U.S.
• Crab & Go – Pouch packaging for grab-and-go convenience.
• TOBC Salmon (ras-sourced steelhead salmon) under Little Cedar Farms label, supplying to Canadian distributors.

BSFCs sustainable and traceable supply chain features a GPS-enabled tracking system for fishermen, and an eco-friendly pouch packaging that has saved millions of tons of CO2 vs. metal cans. The long-term strategy includes vertical integration of seafood lines, expansion of RAS farms to 1,500+ tons, and strategic acquisitions.

Key Brands & Products:

Brand	Species	Origin	Positioning
Blue Star	Portunus pelagicus	Indonesia, PH	Premium: strict QC, high price
Pacifica	Portunus haanii	China, Vietnam	Mid-tier
Oceanica	Portunus haanii	Vietnam	Affordable
Good Stuff	Callinectes spp.	Mexico	Premium U.S. crab
Coastal Pride	Callinectes spp.	U.S., Venezuela	Premium branded fresh
Crab & Go	Blue crab pouch food	Indonesia	Convenience, millennial
Little Cedar	Steelhead salmon (RAS)	Canada (TOBC)	Sashimi-grade fresh fish

Distribution Channels: Foodservice distributors (48% of 2024 revenue), retail clubs, seafood wholesalers, and limited direct sales.

Competitors: Tri-Union (Chicken of the Sea), Phillips Foods, Harbor Seafood, Newport International in crab; Atlantic Sapphire, Nordic Aquafarms, Pure Salmon in RAS salmon.

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2. Financial Highlights (Items 7 & 8)

2024 vs. 2023 Key Metrics

Metric	2024	2023	% Delta
Revenue (Net)	$3.59 million	$6.12 million	–41.3%
Cost of Goods Sold	$4.88 million	$5.97 million	–18.2%
Gross Profit (Loss)	–$1.29 million	$0.16 million	–$1.45 million
Gross Margin	–36.0%	2.6%	–38.6 pp
Other Operating Expenses	$7.15 million	$2.53 million	+183%
Operating Loss	–$10.12 million	–$4.23 million	–$5.89 million
Net Loss	–$12.48 million	–$4.47 million	–$8.01 million

Revenue Drop (–41%): Driven by lower poundage sold in 2024, partially offset by higher average market prices.

Gross Loss: The cost profile inverted with COGS above revenue, driven by inventory obsolescence reserves ($1.2 million) and higher import costs.

Expenses: Other operating expenses ballooned to $7.15 million (vs $2.53 million in 2023) due to:

• $1.5 million loss on discontinued Afritex services
• $1.8 million valuation allowance on related-party long-term receivable
• $1.4 million inventory write-downs
• Legal & professional fees

Net Loss: $(12.48 million) vs $(4.47 million) in 2023.

Balance Sheet & Liquidity

Metric	Dec 31, 2024	Dec 31, 2023
Cash & Equivalents	$0.33 million	$0.02 million
Inventory (Net)	$0.45 million	$2.61 million
Accounts Receivable (Net)	$0.35 million	$0.53 million
Working Capital	–$0.41 million	+$0.90 million
Total Assets	$2.55 million	$6.36 million
Stockholders Deficit	$46.29 million	$33.81 million

BSFCs balance sheet is heavily strained with a negative equity, reduced inventory levels (down $2.16 million in 2024), and reliance on high-cost debt and perpetual equity issuance to fund operations.

Cash Flow

• Operating Activities: $(6.2 million) used in 2024 vs $(3.5 million) in 2023.
• Investing Activities: $(0.1 million) vs $(0.16 million) in 2023 (capital expenditures on RAS, vehicles).
• Financing Activities: +$6.42 million in 2024 vs +$3.68 million in 2023 (convertible notes, private placement, agile loans).

Funded by: Lind notes, Agile loans, ClearThink MCA, Private Placements (Quick Capital, Jefferson), business default financing. The average cost of capital is extremely high (>20–25% on several loans, stock conversion at deep discounts).

Going Concern

The 10-K discloses substantial doubt about BSFCs ability to continue as a going concern, due to:

• Recurring net losses & negative equity deficit of $46.3 million
• Cash burn in excess of $6 million in operating activities.
• Reliance on dilutive financings and high-cost debt to fund working capital.

Unless significant new capital is raised or operations become cash-flow positive, ongoing viability is in question.

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3. Key Risk Factors (Item 1A)

1) Commodity Price & Supply Volatility: Crab meat and RAS salmon volumes can fluctuate by season, regulations, and biomass health.
2) Customer & Supplier Concentrations: Top 5 customers = 48% of revenue; Top 4 suppliers = 61% of purchases in 2024.
3) Legal & Regulatory: Dispute in Canada over the aquaculture license (TOBC), questioning the RAS farmsintegration and output.
4) High Leverage & Liquidity Risk: Multiple short-term, high-cost loans; going concern doubt.
5) Dilution Risk: Recent ATM and private offerings have issued millions of shares at deep discounts (as low as $0.13–$1.50 per share), resulting heavy dilution.
6) Controls & Governance: The Audit Committee noted material weaknesses in inventory controls, financial close, and related-party transaction monitoring.
7) Competitive Landscape: Large integrated players in both crab and RAS salmon may outspend BSFC in marketing, distribution and R&D.
8) No Cash Dividends: Stockholders rely exclusively on stock price appreciation for returns.

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4. Conclusion & Investment Score (1–10)

Score: 2.0
We assign BSFC a conservative 2.0/10 rating due to:

• Recurring losses & negative equity. Net loss of $12.5M in 2024 and a $46.3M deficit.
• Severe liquidity constraints. Negative working capital, going concern risk, and reliance on high-cost debt.
• Legal & regulatory uncertainties. TOBC license litigation and lease disputes in Canada.
• High dilution & debt burden. Multiple short-term notes convert at deep discounts and expand share count.
• Operational risks. Customer/supplier concentration, supply chain and quality control weaknesses.

Offsetting factors:

• Unique value proposition in sustainable, traceable crab meat and eco-friendly packaging.
• Potential upside from RAS salmon scalability if license issues and capital constraints resolve.
• Longstanding industry expertise of management team.

Long-term investors seeking turnaround opportunities may watch for:

• A clear path to profitability or major equity infusion.
• Resolution of TOBC license litigation.
• Strengthening of internal controls and governance.

Short-term investors should be wary given low liquidity, high dilution, and stock volatility.

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Disclaimer: This post is for informational purposes only and is not a recommendation to buy or sell any security. Always consult a financial advisor before making investment decisions.