What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-01-29 compared with 2023-01-26 · 213 added, 203 removed, 140 unchanged (75% of the section changed)

6 unchanged sentences

Business for more information).

of Operations (in thousands except percentages)

Year Ended October 28, 2022 (52 weeks) Compared to Fiscal Year Ended October 29, 2021 (52 weeks)

of Operations (dollars in thousands)

Year Ended November 3, 2023 (53 weeks) Compared to Fiscal Year Ended October 28, 2022 (52 weeks)

Sales-Consolidated

sales in fiscal year 2022 increased $25,468 (10.6%) when compared to the prior fiscal year.

sales in fiscal year 2023 decreased $14,262 (5.4%) when compared to the prior fiscal year.

The changes in net sales were comprised as

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Promotional activity

Increase in net sales

Decrease in net sales

Sales-Frozen Food Products Segment

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Increase in net sales

increase in net sales for fiscal year 2022 primarily relates to higher unit sales volume in pounds coupled with a higher selling price

The increase in net sales was primarily driven by a significant increase in volume to institutional customers and an increase

in selling prices due to price increases implemented during the fourth quarter of fiscal year 2021 and second quarter of fiscal year

Other institutional Frozen Food Products sales, including sheet dough and rolls, increased 44% by volume and retail sales volume

decreased 6%.

Demand has shifted from retail to foodservice sales channels as schools and in-dining restaurants have reopened in response

to the lifting of restrictions caused by the COVID-19 pandemic.

Returns activity decreased compared to the 2021 fiscal year.

activity was higher in fiscal year 2022 as a percentage of sales due to increased sales to high promotion customers.

increase in net sales for fiscal year 2023 primarily relates to higher selling prices per pound partially offset by lower unit sales

volume in pounds.

The increase in net sales was primarily driven by a significant increase in volume to institutional customers and an

increase in selling price per pound due to price increases implemented during the fourth quarter of fiscal year 2023.

Other institutional

Frozen Food Products sales, including sheet dough and rolls, increased 8% by volume and retail sales volume increased 2%.

Returns activity

increased compared to the 2022 fiscal year.

Promotional activity was higher in fiscal year 2023 as a percentage of sales due to increased

sales to high promotion customers.

Sales-Snack Food Products Segment

sales in the Snack Food Products segment in fiscal year 2022 increased $10,724 (5.4%) compared to the prior fiscal year.

sales in the Snack Food Products segment in fiscal year 2023 decreased $15,646 (7.5%) compared to the prior fiscal year.

in net sales were comprised as follows:

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Promotional activity

Increase in net sales

sales of Snack Food Products increased due to higher average selling prices per pound compared to fiscal year 2021.

Price increases were

implemented in the second quarter of fiscal year 2022 in response to record high meat commodity input costs.

Unit sales volume in pounds

through our direct store delivery distribution channel decreased due to lower demand caused by inflationary pressures on consumer spending

Decrease in net sales

sales of Snack Food Products decreased due to lower sales through our direct-store-delivery distribution channel during the fiscal year

The weighted average selling price per pound increased compared to fiscal year 2022 due to price increases implemented in response

to increased meat commodity input costs experienced in fiscal year 2022.

Unit sales volume in pounds was lower as compared to the prior

We believe demand decreased primarily due to inflationary pressure on consumer spending habits as consumers have pulled

back on meat product purchases.

Returns activity was higher compared to the 2022 fiscal year.

Promotional offers increased slightly compared to fiscal year 2021.

Promotional offers increased slightly compared

to fiscal year 2022.

of Products Sold and Gross Margin-Consolidated

of products sold from continuing operations increased by $4,791 (2.5%) compared to the prior fiscal year.

The gross margin increased

from 21.4% to 27.1% during fiscal year 2022 compared to the prior fiscal year.

of products sold from continuing operations decreased by $12,558 (6.5%) during fiscal year 2023 compared to the prior fiscal year.

gross margin increased from 27.1% to 28.0% during fiscal year 2023 compared to the prior fiscal year.

Change in Cost of Products Sold by Segment

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of products sold in the Frozen Food Products segment increased by $2,080 (5.1%) in fiscal year 2023 compared to the prior fiscal year.

Higher commodity costs, increased volume and changes in product mix were the primary contributing factors to this increase.

of purchased flour increased approximately $1,844, which contributed to the increase in costs of goods sold.

The gross margin percentage

decreased from 28.8% to 26.9% during fiscal year 2022 compared to the prior fiscal year.

Increased volume and changes in the product mix were the primary contributing factors to this increase.

The cost of purchased flour decreased

approximately $164, which partially offset the increase in costs of goods sold.

The gross margin percentage decreased from 26.9% to 25.1%

during fiscal year 2023 compared to the prior fiscal year.

of Products Sold and Gross Margin–Snack Food Products Segment

of products sold in the Snack Food Products segment decreased by $6,762 (4.2%) compared to the prior fiscal year due primarily to lower

unit sales volume.

Meat commodity costs increased during fiscal year 2022 partially offsetting the decrease in cost of products sold.

The cost of meat commodities increased approximately $7,949 during fiscal year 2022 compared to the prior fiscal year.

As a result, a

net realizable value reserve of $131 was recorded during the fiscal year after determining that the market value on some meat products

of products sold in the Snack Food Products segment decreased by $14,638 (9.6%) during fiscal year 2023 compared to the prior fiscal

year due primarily to lower unit sales volume in our direct-store-delivery distribution channel.

The cost of meat commodities decreased

approximately $7,737 during fiscal year 2023 compared to the prior fiscal year due to favorable fluctuations in commodity markets.

increased our net realizable value reserve by $161 during fiscal year 2023 after determining that the market value on some meat products

was less than the costs associated with production and sale of the product.

Higher depreciation on processing equipment impacted the

cost of products sold.

We maintained a net realizable reserve of $513 on products

as of November 3, 2023.

The gross margin earned in this segment increased from 27.1% to 28.8% during fiscal year 2023.

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table below summarizes the primary expense variances in this category:

October 28, 2022

November 3, 2023

October 28, 2022

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Wages and bonus

Pension (income) expense

Product advertising

Outside storage

Insurance expenses

Healthcare cost

Vehicle repairs and maintenance

Travel expenses

Fuel expenses

Postage expenses

Storage unit rent

Travel expense

Vehicle repairs and maintenance

sales commissions resulted in lower wages and bonus expenses in the 2023 fiscal year compared to the 2022 fiscal year.

Outside storage

sales commissions resulted in higher wages and bonus expenses in the 2022 fiscal year compared to the 2021 fiscal year.

in pension expense was a result of an increase in pension plan assets caused by the performance of the underlying markets that support

them as well as higher pension discount rates resulting in lower liability.

The increase in fuel expense was driven by per gallon fuel

price increases compared to the prior year as a result of higher cost trends in petroleum markets.

Costs for product advertising increased

mainly as a result of higher payments under brand licensing agreements in the Snack Food Products segment during fiscal year 2022.

costs have increased due to unfavorable claim trends.

Other income decreased due to a gain on life insurance proceeds caused by the passing

of a former executive employee during the fourth quarter of fiscal year 2021.

Vehicle repairs and maintenance on vehicles have increased

compared to the prior year period mainly due to an aging fleet.

Rent for storage units that house inventory increased due to inflationary

price pressure.

Travel expenses increased due to the lifting of travel restrictions and stay-at-home orders which had been imposed in

response to the COVID-19 pandemic.

Outside storage costs to warehouse products prior to shipment increased due to reaching storage capacity

at our new Chicago facility as a result of higher sales volume.

None of the changes individually or as a group of expenses in “Other

SG&A” were significant enough to merit separate disclosure.

The major components comprising the increase of “Other SG&A”

expenses were higher sales taxes, office supplies and professional fees.

increased primarily as a result of the need for additional warehouse capacity to store products.

The increase in insurance expenses was

driven by higher premiums on property insurance and increased reserves on aged claims.

Healthcare costs have decreased due to favorable

claim trends.

Travel expenses increased due to participation in food shows and in-person business meetings.

The decrease in fuel expense

was driven by per gallon fuel price decreases compared to the prior year as a result of lower cost trends in petroleum markets and to

a lesser extent due to a reduction in the number of company-owned long-haul trucks.

The decrease in pension cost was a result of an increase

in pension plan assets caused by the performance of the underlying markets that support them as well as higher pension discount rates

resulting in lower liability.

Postage expenses have decreased due to partnering with outside distributors and carriers to transport products

to minimize postage expenses.

Rent for storage units that house inventory increased due to inflationary price pressure.

Vehicle repairs

and maintenance on vehicles have increased compared to the prior year period mainly due to an aging fleet.

None of the changes individually

or as a group of expenses in “Other SG&A” were significant enough to merit separate disclosure.

The major components

comprising the increase of “Other SG&A” expenses were higher product advertising expenses, sales taxes, office supplies

and professional fees.

General and Administrative Expenses-Frozen Food Products Segment

expenses in the Frozen Food Products segment increased by $2,664 (22.3%) compared to the prior fiscal year.

The overall increase in SG&A

expenses was due to higher sales volume and corresponding increased wages and bonus and product advertising partially offset by lower

pension expense.

expenses in the Frozen Food Products segment decreased by $171 (1.2%) during fiscal year 2023 compared to the prior fiscal year.

overall decrease in SG&A expenses was due to lower unit sales volume and lower fuel expenses related to a reduction in the number

of company-owned long-haul trucks partially offset by an increase in insurance expenses and broker commissions.

General and Administrative Expenses-Refrigerated and Snack Food Products Segment

expenses in the Snack Food Products segment increased by $503 (1.0%) during fiscal year 2023 compared to the prior fiscal year.

of the increase was due to higher licensing fees, travel expense and taxes.

on Sale of Property, Plant and Equipment

gain during fiscal years 2022 and 2021 was due the sale of the Green Street facility and ordinary gain on disposal of assets, respectively.

of the increase was due to higher property insurance expense, higher outside storage fees and higher vehicle repairs partially offset

by lower fuel and healthcare costs.

(Gain) on Sale of Property, Plant and Equipment

loss during fiscal year 2023 and gain during fiscal year 2022 was due to ordinary disposal of assets and the sale of real property located

Green Street in Chicago, respectively.

tax for fiscal years 2023 and 2022, respectively, was as follows:

October 28, 2022

November 3, 2023

October 28, 2022

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Effective tax rate

recorded a tax provision of $16,341 and benefit of $1,779, for fiscal years 2022 and 2021, respectively, related to federal and state

taxes, based on the Company’s expected annual effective tax rate.

The effective tax rate was 26.6% and 24.4% for fiscal years 2022

and 2021, respectively.

In addition, the effective tax rates for fiscal years 2022 and 2021 were impacted by such items as non-deductible

meals and entertainment, non-taxable gains and losses on life insurance policies and state income taxes.

(Refer to Note 4 of Notes to

Consolidated Financial Statements for more information).

and Capital Resources (in thousands except share amounts, percentages, and ratios)

recorded a tax provision of $1,021 and $16,341, for fiscal years 2023 and 2022, respectively, related to federal and state taxes, based

on the Company’s expected annual effective tax rate.

The effective tax rate was 22.7% and 26.6% for fiscal years 2023 and 2022,

respectively.

In addition, the effective tax rates for fiscal years 2023 and 2022 were impacted by such items as non-deductible meals

and entertainment, non-taxable gains and losses on life insurance policies and state income taxes.

(Refer to Note 4 of Notes to Consolidated

Financial Statements for more information).

and Capital Resources (dollars in thousands)

principal source of our operating cash flow is cash receipts from the sale of our products, net of costs to manufacture, store, market

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We normally fund our operations from cash balances and cash flow generated from operations.

We received $60,000

in gross proceeds on June 1, 2022, from the closing of the sale of the Green Street Property pursuant to the terms of the CRG Purchase

We borrowed $2,000 under our line of credit with Wells Fargo Bank, N.A.

on December 2, 2020, $2,000 on April 27, 2021, $2,000

on July 1, 2021, $3,000 on July 19, 2021, $3,000 on October 15, 2021, $2,000 on November 1, 2021, $2,000 on December 16, 2021, and $2,000

on January 24, 2022, for a combined total of $18,000.

The line of credit was paid off on June 7, 2022, using $18,000 in proceeds from

the sale of the Green Street Property.

The revolving line of credit continues in effect per its terms to March 1, 2023.

We entered into

a bridge loan with Wells Fargo on August 30, 2021, for up to $25,000, of which we used $18,653 to pay off a portion of our existing equipment

loans as they came out of the lock out period and could be repaid.

We repaid and terminated the bridge loan on June 2, 2022, using $18,653

in proceeds from the sale of real property at the Green Street Property.

As of October 28, 2022, we had $1,089 of current debt on equipment

loans, $66,076 of net working capital and $15,000 available under our revolving line of credit with Wells Fargo Bank, N.A.

Refer to Note

5 - Line of Credit and Borrowing Agreements of the Notes to the Condensed Consolidated Financial Statements included within this Report

for further information.

higher commodity costs, we may not be able to increase our product prices in a timely manner or sufficiently to offset increased commodity

costs due to consumer price sensitivity, pricing in relation to competitors and the reluctance of retailers to accept the price increase.

Higher product prices could potentially lower demand for our product and decrease volume.

Management believes there are various options

available to generate additional liquidity to repay debt or fund operations such as mortgaging real estate, should that be necessary.

Our ability to increase liquidity will depend upon, among other things, our business plans, the performance of operating divisions and

economic conditions of capital markets, or circumstances related to the COVID-19 global pandemic.

However, on June

1, 2022, we received approximately $60,000 in gross proceeds, from the closing of the sale of real property located at 170 N.

in Chicago pursuant to the terms of the Purchase and Sale Agreement dated March 16, 2020, as amended, between Bridgford Food Processing

Corporation and CRG Acquisition, LLC (the “CRG Purchase Agreement”).

Additionally, we have maintained a revolving line of

credit with Wells Fargo Bank, N.A.

pursuant to the terms of the credit agreement dated March 1, 2018, as amended to date.

an aggregate of $18,000 under such revolving line of credit from inception through January 24, 2022.

The line of credit was paid off

on June 7, 2022, using $18,000 in proceeds from the sale of real property at 170 N.

Green Street.

The revolving line of credit continued

in effect per its terms until November 30, 2023, when it was replaced with a new revolving line of credit as described below.

we entered into a bridge loan with Wells Fargo Bank, N.A.

on August 30, 2021, for up to $25,000, of which we used $18,653 to pay off

a portion of our existing equipment loans as they came out of the lock out period and could be prepaid.

We prepaid and terminated the

bridge loan on June 2, 2022, using $18,653 in proceeds from the sale of real property at 170 N.

Green Street.

November 30, 2023, we entered into a fifth amendment to the credit agreement with Wells Fargo Bank, N.A., and also executed a new revolving

line of credit note pursuant to the amendment.

Under the terms of this amendment and the revolving line of credit note, we may borrow

up to $7,500 from time to time up to November 30, 2024.

As of November 3, 2023, we had $1,045 of current debt on equipment loans, $69,496

of net working capital and $7,500 available under our revolving line of credit with Wells Fargo Bank, N.A.

Refer to the Notes to the

Condensed Consolidated Financial Statements included within this Report for further information.

The Company was in compliance with all

loan covenants as of November 3, 2023.

higher commodity costs like we experienced in fiscal year 2022, we may not be able to increase our product prices in a timely manner

or sufficiently to offset such increased commodity costs due to consumer price sensitivity, pricing in relation to competitors and the

reluctance of retailers to accept the price increase.

Instances of higher interest rates, labor shortages or supply chain issues could

result in material changes in the Company’s liquidity.

Higher product prices could potentially lower demand for our product and

decrease volume.

Management believes there are various options available to generate additional liquidity to repay debt or fund operations

such as mortgaging real estate, should that be necessary.

Our ability to increase liquidity will depend upon, among other things, our

business plans and the performance of operating divisions and economic conditions of capital markets.

If we are unable to increase liquidity

through mortgaging real estate, or generate positive cash flow necessary to fund operations, we may not be able to compete successfully,

which could negatively impact our business, operations, and financial condition.

With the cash expected to be generated from the Company’s

operations, we anticipate that we will maintain sufficient liquidity to operate our business for at least the next twelve months.

will continue to monitor the impact of COVID-19 on our liquidity and, if necessary, take action to preserve liquidity and ensure that

our business can operate during these uncertain times.

flows used in operating activities:

October 28, 2022

through mortgaging real estate or additional borrowing, or generate positive cash flow necessary to fund operations, we may not be able

to compete successfully, which could negatively impact our business, operations, and financial condition.

With the cash expected to be

generated from the Company’s operations, we anticipate that we will maintain sufficient liquidity to operate our business for at

least the next twelve months.

We will continue to monitor the impact of inflation and interest rate volatility on our liquidity and,

if necessary, take action to preserve liquidity and ensure that our business can operate during these uncertain times.

flows provided by (used in) operating activities:

November 3, 2023

October 28, 2022

Net income (loss)

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization

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(Reduction in) provision for promotional allowances

Gain on sale of property, plant and equipment

Loss (gain) on sale of property, plant and equipment

Deferred income taxes, net

Operating assets and liabilities

Net cash used in operating activities

the fifty-two weeks ended October 28, 2022, net cash used in operating activities was $7,830, an increase of $1,8380 compared to the

fifty-two weeks ended October 29, 2021.

The increase in net cash used in operating activities primarily relates to a gain on sale of

property, plant and equipment of $57,745, an increase in accounts receivable of $10,116 and an increase in inventory of $3,762, partially

offset by a decrease in refundable income taxes of $4,955 and an increase in deferred taxes of $5,070.

During fiscal year 2022, we did

not contribute towards our defined benefit pension plan.

Plan funding strategies may be adjusted depending upon economic conditions,

investment options, tax deductibility, or legislative changes in funding requirements.

Changes in assets and liabilities

Net cash provided by (used in) operating activities

the fifty-three weeks ended November 3, 2023, net cash provided by operating activities was $3,985, an increase of $11,815 compared to

the fifty-two weeks ended October 28, 2022.

The increase in net cash provided by operating activities primarily relates to net income

of $3,474 and a reduction in accounts receivable of $6,480, partially offset by a decrease in accounts payable of $6,457 and lower non-current

liabilities of $1,836.

During fiscal year 2023, we did not contribute towards our defined benefit pension plan.

Plan funding strategies

may be adjusted depending upon economic conditions, investment options, tax deductibility, or legislative changes in funding requirements.

cash conversion cycle (defined as days of inventory and trade receivables less days of trade payables outstanding) was equal to 83 days

for the fifty-two weeks ended October 28, 2022, and 74 days for the fifty-two weeks ended October 29, 2021.

for the fifty-three weeks ended November 3, 2023, and 83 days for the fifty-two weeks ended October 28, 2022.

the fifty-two weeks ended October 28, 2022, net cash used in operating activities was $7,830.

The result was primarily related to an

increase in inventory of $7,475 and net loss of $5,503 partially offset by a decrease in refundable income taxes and deferred taxes.

During fiscal year 2021, we did not contribute towards our defined benefit pension plan.

flows provided by (used in) investing activities:

October 28, 2022

The result was primarily related to a gain

on sale of property, plant, and equipment of $57,745, an increase in accounts receivable of $10,116 and an increase in inventory of $3,762,

partially offset by a decrease in refundable income taxes of $4,955 and an increase in deferred taxes of $5,070.

During fiscal year 2022,

we did not contribute towards our defined benefit pension plan.

flows (used in) provided by investing activities:

November 3, 2023

October 28, 2022

Proceeds from sale of property, plant and equipment

Changes in escrow balance

Additions to property, plant and equipment

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

for property, plant and equipment include the acquisition of equipment, upgrading of facilities to maintain operating efficiency and

2 unchanged sentences

the cost for repairs and maintenance.

We received $60,000 in gross proceeds on June 1, 2022, from the closing of the real estate transaction

for the Green Street Property, pursuant to the terms of the CRG Purchase Agreement.

We may also capitalize costs related to improvements

that extend the life, increase the capacity, or improve the efficiency of existing machinery and equipment.

Specifically, capitalization

of upgrades of facilities to maintain operating efficiency include acquisitions of machinery and equipment used on packaging lines and

refrigeration equipment used to process food products.

table below highlights the additions to property, plant and equipment for the fifty-two weeks ended:

October 28, 2022

We received $60,000 in gross sales proceeds on June 1, 2022, from the closing of the real estate

transaction for the real property located at 170 N.

Green Street, pursuant to the terms of the CRG Purchase Agreement.

We may also capitalize

costs related to improvements that extend the life, increase the capacity, or improve the efficiency of existing machinery and equipment.

Specifically, capitalization of upgrades of facilities to maintain operating efficiency include acquisitions of machinery and equipment

used on packaging lines and refrigeration equipment used to process food products.

table below highlights the additions to property, plant and equipment for the fifty-three and fifty-two weeks ended:

November 3, 2023

October 28, 2022

Building improvements

Building and leasehold improvements

Furniture and fixture

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Additions to property, plant and equipment

for additions to property, plant and equipment during the fifty-two weeks ended October 28, 2022, include projects in process of $212

related to the new facility in Chicago.

flows (used in) provided by financing activities:

October 28, 2022

for additions to property, plant and equipment during the fifty-three weeks ended November 3, 2023, include projects in process of $837

related to the production facility in Chicago.

flows used in financing activities:

November 3, 2023

October 28, 2022

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Repayments of bank borrowings

Net cash (used in) provided by financing activities

Net cash used in financing activities

stock repurchase program was approved by the Board of Directors in November 1999 and was expanded in June 2005.

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The Company also leased one long-haul truck for $75 during fiscal year 2022, and that lease term is two years.

following table reflects major components of our line of credit and borrowing agreements as of October 28, 2022 and October 29, 2021.

October 28, 2022

following table reflects major components of our line of credit and borrowing agreements as of November 3, 2023, and October 28, 2022,

respectively.

November 3, 2023

October 28, 2022

8 unchanged sentences

Credit Facility

maintain a revolving line of credit with Wells Fargo that extends through March 1, 2023.

As of year-end October 29, 2021, under the terms

of this line of credit, we could borrow up to $15,000 at an interest rate equal to the bank’s prime rate or LIBOR plus 2.0%.

line of credit has an unused commitment fee of 0.25% of the available loan amount.

The line of credit is presented under non-current

liabilities in the consolidated balance sheets.

On December 1, 2021, Wells Fargo expanded our line of credit to $25,000 through June

15, 2022, at which time the credit limit returned to $15,000 for the balance of the term.

Under the terms of this line of credit, we

may borrow up to $15,000 at an interest rate equal to the bank’s prime rate or secured overnight financing rate (“SOFR”)

The former benchmark interest rate of LIBOR for our line of credit has been transitioned to SOFR which could impact the cost

of credit and alter the value of debt and loans.

We borrowed $2,000 under this line of credit on December 2, 2020, $2,000 on April 27,

2021, $2,000 on July 1, 2021, $3,000 on July 19, 2021, $3,000 on October 15, 2021, $2,000 on November 1, 2021, and $2,000 on December

26, 2021, and $2,000 on January 24, 2022, for a combined total of $18,000.

The revolving line of credit with Wells Fargo was paid off

on June 7, 2022, using $18,000 in proceeds from the sale of the Green Street Property.

November 30, 2023, we entered into a fifth amendment to the credit agreement with Wells Fargo Bank, N.A.

dated March 1, 2018, as

amended, and also executed a revolving line of credit note pursuant to the amendment.

The revolving line of credit note replaces the

existing note that expired by its terms on November 30, 2023.

Under the terms of this amendment and the revolving line of

credit note, we may borrow up to $7,500 from time to time up to November 30, 2024, at an interest rate equal to (a) the daily simple

secured overnight financing rate plus 2.0%, or if unavailable, (b) the prime rate, in each case as determined by the bank.

of credit has an unused commitment fee of 0.35% of the available loan amount, payable on a quarterly basis.

Amounts may be repaid

and reborrowed during the term of the note.

Accrued interest is payable on the first day of each month and the outstanding principal

balance and remaining interest are due and payable on November 30, 2024.

Notes Payable

December 26, 2018, we entered into a master collateral loan and security agreement with Wells Fargo (the “Original Wells Fargo

Loan Agreement”) for up to $15,000 in equipment financing which was amended and expanded as detailed below.

We subsequently entered

into additional master collateral loan and security agreements with Wells Fargo on each of;

April 18, 2019, December 19, 2019, March

5, 2020, and April 17, 2020 (the Original Wells Fargo Loan Agreement and the subsequent agreements collectively referred to as the “Wells

Fargo Loan Agreements”).

Pursuant to the Wells Fargo Loan Agreements, we owe the amounts as stated in the table above.

each of December 26, 2018, April 18, 2019, December 19, 2019, March 5, 2020, and April 17, 2020 (collectively referred to as the “Wells

Fargo Loan Agreements”), we entered into master collateral loan and security agreements with Wells Fargo Bank, N.A.

the Wells Fargo Loan Agreements, we owe the amounts as stated as equipment notes in the table on the previous page.

August 30, 2021, we entered into a loan commitment note for a bridge loan of up to $25,000 to obtain capital to pay off the existing

equipment loans as they come out of the lock out period and may be repaid (dates detailed in the table above).

The outstanding principal

balances of the bridge loan became due and payable in full on the earlier of the following dates (1) August 31, 2023, or (2) one Federal

Reserve business day after the closing of the real estate transactions contemplated under the CRG Purchase Agreement.

We repaid $18,653

in equipment loans (equipment loans 4.13%, 3.98%, 3.70% and 3.29% in the table above) utilizing proceeds from the new bridge loan.

Company evaluated the exchange under ASC 470 and determined that the exchange should be treated as a debt modification prospectively.

The Company accounted for this transaction as a debt modification and did not incur any gain or loss relating to the modification.

debt modification did not meet the greater than ten percent test and was deemed not substantial.

We repaid and terminated the bridge

loan and related loan commitment note on June 2, 2022, using $18,653 in proceeds from the sale of the Green Street Property pursuant

to the CRG Purchase Agreement.

Wells Fargo Loan Agreements contain various affirmative and negative covenants that limit the use of funds and define other provisions

Material financial covenants are listed below and the capitalized terms are defined in the Agreements:

Total Liabilities divided

by Tangible Net Worth not greater than 2.5 to 1.0 at each fiscal quarter,

Quick Ratio not less than

0.85 to 1.0 at each fiscal quarter end,

Net Income After Taxes

not less than $500 on a quarterly basis, and

Capital Expenditures less

of October 28, 2022, the Company was in compliance with all covenants under the Wells Fargo Loan Agreements.

contractual maturities of debt in future fiscal years are as follows as of October 28, 2022:

equipment loans as they came out of the lock out period and could be prepaid.

The outstanding principal balances of the bridge loan became

due and payable in full one Federal Reserve business day after the closing of the real estate transactions contemplated under the CRG

Purchase Agreement.

We prepaid $18,653 in equipment loans utilizing proceeds from the new bridge loan.

The Company evaluated the

exchange under ASC 470 and determined that the exchange should be treated as a debt modification prospectively.

The Company accounted

for this transaction as a debt modification and did not incur any gain or loss relating to the modification.

The debt modification did

not meet the greater than ten percent test and was deemed not substantial.

We prepaid and terminated the bridge loan and related loan

commitment note on June 2, 2022, using $18,653 in proceeds from the gain on the sale of a land parcel in Chicago pursuant to the CRG

Purchase Agreement.

Wells Fargo Loan Agreements and the credit agreement contain various affirmative and negative 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

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

Ratio not less than 1.25 to 1.0 at each fiscal quarter end,

Charge Coverage Ratio not less than 1.25 to 1.0 at each fiscal quarter end.

As of November 3, 2023, the Company was in compliance with all covenants under the Wells Fargo Loan Agreements and the credit agreement.

contractual maturities of debt in future fiscal years are as follows as of November 3, 2023:

operating results are heavily dependent upon the prices paid for raw materials.

11 unchanged sentences

as described above, we had no other debt or other contractual obligations within the meaning of Item 303(b) of Regulation S-K, as of

October 28, 2022.

expected future liability related to construction of the new Chicago processing facility is approximately $125 as of October 28, 2022.

November 3, 2023.

Accounting Policies

16 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis