Company: BRID
Filing Date: 2025-01-29
Form Type: 10-K
Source: 0001493152-25-004182
Chunk: 926

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-01-29
Form: 10-K
Item: Item 13
Chunk 926
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578

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 NOTE 6- Contingencies and Commitments:

The Company leases warehouse
and/or office facilities throughout the United States through month-to-month rental agreements. In the case of month-to-month lease or
rental agreements with terms of 12 months or less, the Company made an accounting policy election to not recognize lease assets and liabilities
and record them on a straight-line basis over the lease term. For further information regarding our lease accounting policy, please refer
to Note 1 – The Company and 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 two long-haul trucks on July 11, 2024, for a loss of $90, in an effort
to reduce the overall cost of delivering products. All long-haul trucks under this lease agreement have been returned as of November 1,
2024. The Company leased one box truck for a market value of $27 on April 17, 2023, and that lease term is two years.

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 equipment as a finance lease was $44 during the fifty-two weeks ended November 1, 2024.

The Company performed a detailed
analysis and determined that the only indications of a long-term lease in addition to transportation leases for long-haul trucks were
the warehouse leases with Hogshed Ventures, LLC and Racine Partners 4333 LLC.

The Company’s five-year
term lease with Racine Partners 4333 LLC, was effective June 1, 2022. A ROU asset of $2,383 and corresponding liability for warehouse
storage space of $2,450 as of November 1, 2024, was recorded for Racine Partners 4333 LLC for 43rd Street in Chicago, Illinois. This lease
does not provide an implicit rate and we estimated our incremental interest rate to be approximately 3.68%. We used our estimated incremental
borrowing rate and other information available at the lease commencement date in determining the present value of the lease payments.