Company: BRID
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001493152-25-012266
Chunk: 58

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 8
Chunk 58
---
338 

Inventories
are valued at the lower of cost (which approximates actual cost on a first-in, first-out basis) or net realizable value. Inventories
include the cost of raw materials, labor, and manufacturing overhead. We regularly review inventory quantities on hand and write
down any estimated excess, obsolete inventories, or impaired balances to net realizable value. An inventory reserve is created when
potentially slow-moving or obsolete inventories are identified in order to reflect the appropriate inventory value. Changes in
economic conditions, production requirements, and lower than expected customer demand could result in additional obsolete or
slow-moving inventory that cannot be sold or must be sold at reduced prices and could result in additional reserve provisions. The
reserve for slow moving and obsolete inventory was $1,081
as of July 11, 2025 and $1,115
as of November 1, 2024. We maintain a net realizable value reserve of $1,532
as of July 11, 2025, and $1,467
as of November 1, 2024, on products in inventory after determining that the market value on some meat products could not cover the
costs associated with completion and sale of the product.

    9 of 27

Note
3 – Contingencies and Commitments:

The
Company generally leases warehouses throughout the United States through month-to-month rental agreements. For month-to-month leases
or rental agreements with terms of 12 months or less, the Company has elected an accounting policy to not recognize lease assets and
liabilities, instead recording lease expenses on a straight-line basis over the lease term. For further information regarding our lease
accounting policy, please refer to Note 1 – Summary of Significant Accounting Policies — Leases.

The
Company leased three long-haul trucks received during fiscal year 2019. The six-year leases for these trucks would have expired in fiscal
year 2025. We returned one long-haul truck on June 22, 2023, for a loss of $12 and returned the remaining two long-haul trucks on July
11, 2024, for a loss of $90, in an effort to reduce the overall cost of delivering products. The Company leased one refrigerated truck
received on May 10, 2024, for a net present value of $166. The seven-year lease for this truck will expire in fiscal year 2031. Amortization
of