The Company has determined, based on available evidence, that it is more likely than not that the deferred tax assets will be realized. No valuation allowance was provided against deferred tax assets in the accompanying consolidated financial statements. As of November 2, 2007, the Company had net operating loss carryforwards of approximately $3,986 and $4,949 for federal and state purposes, respectively.  These loss carryforwards will expire at various dates from 2011 through 2026.

NOTE 5- Line of Credit:

Under the terms of a revolving line of credit with Bank of America, the Company may borrow up to $2,000 through April 30, 2008. The interest rate is at the bank’s reference rate unless the Company elects an optional interest rate. The borrowing agreement contains various covenants, the more significant of which require the Company to maintain certain levels of shareholders’ equity and working capital. The Company was in compliance with all provisions of the agreement during the year. There were no borrowings under this line of credit during the year.

NOTE 6- Contingencies and Commitments:

The Company leases certain transportation and computer equipment under operating leases. The terms of the transportation leases provide for annual renewal options and contingent rental payments based upon mileage and adjustments of rental payments based on the Consumer Price Index. Minimum rental payments were $415 in fiscal year 2007, $395 in fiscal year 2006, and $330 in fiscal year 2005. Contingent payments were approximately $120 in fiscal year 2007, $108 in fiscal year 2006, and $132 in fiscal year 2005. Future minimum lease payments are approximately $415 in the each of the years 2008 through 2011 and $395 in 2012 and thereafter.

NOTE 7- Segment Information:

The Company has two reportable operating segments, Frozen Food Products (the processing and distribution of frozen products), and Refrigerated and Snack Food Products (the processing and distribution of refrigerated meat and other convenience foods).

The Company evaluates each segment’s performance based on revenues and operating income. Selling and general administrative expenses include corporate accounting, information systems, human resource and marketing management at the corporate level. These activities are allocated to each operating segment based on revenues and/or actual usage.

The following segment information is for the years ended November 2, 2007, November 3, 2006, and October 28, 2005: