Company: BRID
Filing Date: 2025-06-02
Form Type: 10-Q
Source: 0001641172-25-013252
Chunk: 57

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-06-02
Form: 10-Q
Item: Part I, Item 8
Chunk 57
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 market value on some meat products
could not cover the costs associated with completion and sale of the product.

Note
3 – Contingencies and Commitments:

The
Company generally leases warehouses 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 – 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 equipment as a finance lease was $12 during the twelve weeks ended April 18, 2025.

     9 of 27 

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 through July 11, 2024 and for the refrigerated truck were the warehouse leases with Racine Partners 4333 LLC and
Hogshed Ventures, LLC.

The
Company’s five5-year
term lease with Racine Partners 4333 LLC, was effective June 1, 2022. An ROU asset of $1,924 and corresponding liability for warehouse
storage space of $1,992 as of April 18, 2025, 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. We leased warehouse storage space from Hogshed Ventures, LLC for 40th Street in Chicago, Illinois,