Company: BRID
Filing Date: 2025-06-02
Form Type: 10-Q
Source: 0001641172-25-013252
Chunk: 116

Company: BRIDGFORD FOODS CORP
Filing Date: 2025-06-02
Form: 10-Q
Item: Part I, Item 2
Chunk 116
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 1.0 at each fiscal quarter end.

As
of April 18, 2025, the Company was in violation of the Fixed Charge Coverage Ratio covenant which was waived for the fiscal quarter ended
April 18, 2025 (per letter dated June 2, 2025).

We do not anticipate being in compliance with the Fixed Charge Coverage
Ratio covenant of the Credit Agreement during the third and fourth fiscal quarters of 2025. Our inability to meet financial covenant requirements
of the Credit Agreement may impact our liquidity. We are discussing potential solutions with Wells Fargo Bank, N.A., regarding amendment or renewal of the revolving line of credit. We have reclassified $1,239 of equipment note payable from a long-term notes payable
- equipment to a current notes payable – equipment in compliance with ASC 470 Debt. We plan to implement 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 cause future outcomes to differ materially from those foreseen in forward-looking statements

Recently
issued accounting pronouncements and regulations

In
June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (ASC 326), which provides guidance on measurement
of credit losses on financial instruments. This ASU adds a current expected credit loss impairment model to GAAP that is based on expected
losses rather than incurred losses whereby a broader range of reasonable and supportable information is required to be utilized in order
to derive credit loss estimates. The effective date of the new guidance as amended by ASU No. 2019-10 is fiscal years beginning after
December 15, 2022, including interim periods within those fiscal years. The adoption of ASU No. 2019-10 did not have a material or significant
impact on the Company’s Consolidated Financial Statements as it has been our policy to estimate and record credit losses on trade
accounts receivable.

In
November 2023, the FASB issued ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures. ASU No. 2023-07
enhances disclosures of significant segment expenses by requiring disclosure of significant segment expenses regularly provided to the
chief operating decision maker (