Company: BRID
Filing Date: 2025-08-22
Form Type: 10-Q
Source: 0001493152-25-012266
Chunk: 119

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-08-22
Form: 10-Q
Item: Part I, Item 2
Chunk 119
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    Total debt 
     4,068  
     2,786 
  
    Less current debt 
     (3,111) 
     (1,084)
  
    Total long-term debt 
    $957  
    $1,702 

Loan
Covenants

The
Wells Fargo Loan Agreements and the amended and restated credit agreement contain various covenants that
limit the use of funds and define other provisions of the loans. Material financial covenants are listed below, and the capitalized
terms are defined in the applicable agreements:

    ●
    Total
    Liabilities divided by Tangible Net Worth not greater than 2.0 to 1.0 at each fiscal quarter end, 

    ●
    Quick
    Ratio of not less than 1.25 to 1.0 at each fiscal quarter end, and

    ●
    Net
    income after taxes of not less than $1.00 on a quarterly basis, determined as of each fiscal quarter end, commencing on January 30,
    2026. 

The amended and restated credit agreement eliminated the fixed charge coverage ration covenant contained in the original agreement.

22 of 27

During
the fiscal quarter 2025, the Company was in active negotiations with Wells Fargo and on July 23, 2025, those negotiations concluded
with the execution of the amended and restated credit agreement with the covenants detailed above. Since the amended and restated
agreement superseded and replaced the original credit agreement, covenant reporting under the original credit agreement was no longer
required and all covenant reporting will be pursuant to the amended and restated credit agreement. As of the date of filing, the
Company is in compliance with all loan covenants and was in compliance with all loan covenants as of November 1, 2024.

We
anticipate being in compliance with the covenants of the amended and restated credit agreement during the  fourth fiscal quarter of 2025.
Our inability to meet financial covenant requirements in future quarters of the amended and restated credit agreement may impact our liquidity. We have already
begun implementing a price increase on our products to help offset some of the higher costs for meat commodities and are focused on reducing
selling, general and administrative expenses. Certain factors such as increased commodity costs, tariffs, willingness of customers to
accept price increases and inflation of input costs, to name a few, may