Company: BRID
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001493152-25-012266
Chunk: 12

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 1
Chunk 12
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 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 equipment as a finance lease was $18 during the thirty-six weeks ended July 11, 2025.

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, 2025, and for the refrigerated truck were the warehouse leases with Racine Partners 4333 LLC and
Hogshed Ventures, LLC.

The
Company’s 5five-year term lease with Racine Partners 4333 LLC, was effective June 1, 2022. An ROU asset of $1,692 and corresponding
liability for warehouse storage space of $1,754 as of July 11, 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