Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of August ~~6, 2020, 15,011,676~~17, 2021, 15,079,893 shares of the registrant’s common stock, ~~$0.001~~ par value $0.001 per share, were outstanding.

	June 28,		December 29,		July 4,		January 3,
	2020		2019		2021		2021
Assets
Current assets:
Cash and cash equivalents	$	17,315	$	8,803	$	22,611	$	12,363
Accounts and other receivables		2,504		2,035		9,094		8,756
Inventories		2,895		3,095		3,017		2,538
Prepaid expenses and other current assets		3,877		4,159		2,563		2,105
Total current assets		26,591		18,092		37,285		25,762
Other assets		5,941		5,698		6,583		6,195
Property and equipment, at cost, less accumulated depreciation and amortization of $69,493 and $64,967 as of June 28, 2020 and December 29, 2019, respectively		103,837		109,303
Property and equipment, at cost, less accumulated depreciation and amortization of $80,970 and $75,327 as of July 4, 2021 and January 3, 2021, respectively						99,422		102,188
Right-of-use lease assets, net		74,023		70,277		73,030		72,515
Goodwill		-		15,737
Tradename and other indefinite-lived assets		25,648		25,648		25,648		25,648
Deferred income taxes, net		7,157		2,918		5,738		4,627
Deferred charges, less accumulated amortization of $371 and $343 as of June 28, 2020 and December 29, 2019, respectively		211		239
Deferred charges, less accumulated amortization of $413 and $392 as of July 4, 2021 and January 3, 2021, respectively						163		184
Total assets	$	243,408	$	247,912	$	247,869	$	237,119

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	7,171	$	6,353	$	7,631	$	5,147
Accrued expenses and other current liabilities		7,965		9,389		13,981		9,422
Unearned revenue		2,964		4,111		2,905		3,761
Current portion of long-term debt		5,250		7,056		1,667		1,667
Current portion of lease liabilities		4,556		4,317		5,000		5,428
Total current liabilities		27,906		31,226		31,184		25,425
Long-term debt, net of portion classified as current and deferred loan costs		20,233		2,845		11,000		12,746
Long-term lease liabilities		80,104		75,883		78,960		78,968
Deferred compensation obligations		7,157		7,103		8,255		7,973
Other long-term liabilities		1,015		138		1,892		1,902
Total liabilities		136,415		117,195		131,291		127,014
Stockholders' equity:
Common stock, par value $0.001 per share: authorized 30,000,000 shares; issued and outstanding 15,011,676 shares as of June 28, 2020 and December 29, 2019, respectively		15		15
Preferred stock, par value $0.001 per share: authorized 10,000,000 shares; 0 shares issued and outstanding as of June 28, 2020 or December 29, 2019		-		-
Common stock, par value $0.001 per share: authorized 30,000,000 shares; issued and outstanding of 15,090,077 and 15,070,077 shares as of July 4, 2021 and January 3, 2021, respectively						15		15
Preferred stock, par value $0.001 per share: authorized 10,000,000 shares; 0 shares issued and outstanding as of July 4, 2021 or January 3, 2021						-		-
Additional paid-in capital		104,964		104,056		106,745		105,915
Retained earnings		456		25,088		8,260		2,617
Total stockholders' equity attributable to J. Alexander's Holdings, Inc.		105,435		129,159		115,020		108,547
Non-controlling interests		1,558		1,558		1,558		1,558
Total stockholders' equity		106,993		130,717		116,578		110,105
Commitments and contingencies
Total liabilities and stockholders' equity	$	243,408	$	247,912	$	247,869	$	237,119

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~

	Quarter Ended						Six Months Ended						Quarter Ended						Six Months Ended
	June 28,			June 30,			June 28,			June 30,			July 4,			June 28,			July 4,			June 28,
	2020			2019			2020			2019			2021			2020			2021			2020
Net sales	$	27,602		$	62,229		$	84,574		$	126,963		$	68,101		$	27,602		$	125,476		$	84,574
Costs and expenses:
Cost of sales		10,471			19,803			29,038			40,331
Food and beverage costs														22,899			10,471			39,986			29,038
Restaurant labor and related costs		12,554			19,157			32,892			38,707			19,046			12,554			35,721			32,892
Depreciation and amortization of restaurant property and equipment		3,060			2,950			6,154			5,879			2,988			3,060			5,871			6,154
Other operating expenses		8,536			12,428			20,490			25,112			13,479			8,536			25,201			20,490
Total restaurant operating expenses		34,621			54,338			88,574			110,029			58,412			34,621			106,779			88,574
Transaction, contested proxy and other related expenses		(66	)		651			623			651
Transaction and other related expenses														1,888			(66	)		1,934			623
General and administrative expenses		4,095			4,772			8,835			9,528			5,442			4,095			10,595			8,835
Goodwill impairment		-			-			15,737			-			-			-			-			15,737
Long-lived asset impairment charges and restaurant closing costs		178			-			867			-			(1	)		178			2			867
Pre-opening expenses		72			125			91			146			71			72			516			91
Total operating expenses		38,900			59,886			114,727			120,354			65,812			38,900			119,826			114,727
Operating (loss) income		(11,298	)		2,343			(30,153	)		6,609
Operating income (loss)														2,289			(11,298	)		5,650			(30,153	)
Other (expense) income:
Interest expense		(189	)		(169	)		(305	)		(355	)		(141	)		(189	)		(294	)		(305	)
Other, net		135			70			127			136			84			135			38			127
Total other expense		(54	)		(99	)		(178	)		(219	)		(57	)		(54	)		(256	)		(178	)
(Loss) income from continuing operations before income taxes		(11,352	)		2,244			(30,331	)		6,390
Income (loss) from continuing operations before income taxes														2,232			(11,352	)		5,394			(30,331	)
Income tax benefit (expense)		4,419			(18	)		5,806			(257	)		24			4,419			(343	)		5,806
Loss from discontinued operations, net		(55	)		(58	)		(107	)		(117	)
Net (loss) income	$	(6,988	)	$	2,168		$	(24,632	)	$	6,016
(Loss) income from discontinued operations, net														(3	)		(55	)		592			(107	)
Net income (loss)													$	2,253		$	(6,988	)	$	5,643		$	(24,632	)

Basic (loss) earnings per share:
(Loss) income from continuing operations, net of tax	$	(0.47	)	$	0.15		$	(1.67	)	$	0.42
Loss from discontinued operations, net		(0.00	)		(0.00	)		(0.01	)		(0.01	)
Basic (loss) earnings per share	$	(0.48	)	$	0.15		$	(1.68	)	$	0.41
Basic earnings (loss) per share:
Income (loss) from continuing operations, net of tax													$	0.15		$	(0.47	)	$	0.34		$	(1.67	)
(Loss) income from discontinued operations, net														(0.00	)		(0.00	)		0.04			(0.01	)
Basic earnings (loss) per share													$	0.15		$	(0.48	)	$	0.38		$	(1.68	)

Diluted (loss) earnings per share:
(Loss) income from continuing operations, net of tax	$	(0.47	)	$	0.15		$	(1.67	)	$	0.42
Loss from discontinued operations, net		(0.00	)		(0.00	)		(0.01	)		(0.01	)
Diluted (loss) earnings per share	$	(0.48	)	$	0.15		$	(1.68	)	$	0.41
Diluted earnings (loss) per share:
Income (loss) from continuing operations, net of tax													$	0.15		$	(0.47	)	$	0.34		$	(1.67	)
(Loss) income from discontinued operations, net														(0.00	)		(0.00	)		0.04			(0.01	)
Diluted earnings (loss) per share													$	0.15		$	(0.48	)	$	0.37		$	(1.68	)

Weighted-average common shares outstanding:
Basic		14,695			14,695			14,695			14,695			14,757			14,695			14,757			14,695
Diluted		14,695			14,735			14,695			14,715			15,285			14,695			15,073			14,695

Comprehensive (loss) income	$	(6,988	)	$	2,168		$	(24,632	)	$	6,016
Comprehensive income (loss)													$	2,253		$	(6,988	)	$	5,643		$	(24,632	)

Outstanding
shares

Common
stock

Additional
paid-in capital

Retained
earnings

Non-controlling
interests

Total

Balances at December 29, 2019

15,011,676

$
15

$
104,056

$
25,088

$
1,558

$
130,717

Share-based compensation

-

-

455

-

-

455

Net loss

-

-

-

(17,644
)

-

(17,644
)
Balances at March 29, 2020

15,011,676

15

104,511

7,444

1,558

113,528

Share-based compensation

-

-

453

-

-

453

Net loss

-

-

-

(6,988
)

-

(6,988
)
Balances at June 28, 2020

15,011,676

$
15

$
104,964

$
456

$
1,558

$
106,993

	Outstanding shares		Common stock		Additional paid-in capital		Retained earnings		Non-controlling interests		Total
Balances at January 3, 2021		15,070,077	$	15	$	105,915	$	2,617	$	1,558	$	110,105
Issuance of restricted stock awards		20,000		-		-		-		-		-
Share-based compensation		-		-		412		-		-		412
Net income		-		-		-		3,390		-		3,390
Balances at April 4, 2021		15,090,077		15		106,327		6,007		1,558		113,907
Share-based compensation		-		-		418		-		-		418
Net income		-		-		-		2,253		-		2,253
Balances at July 4, 2021		15,090,077	$	15	$	106,745	$	8,260	$	1,558	$	116,578

Outstanding
shares

Common
stock

Additional
paid-in capital

Retained
earnings

Non-controlling
interests

Total

Balances at December 30, 2018

14,695,176

$
15

$
96,272

$
17,528

$
7,844

$
121,659

Cumulative effect of change in accounting policy (Note 10)

-

-

-

(1,257
)

-

(1,257
)
Share-based compensation

-

-

296

-

-

296

Cancellation of subsidiary Class B Units (Note 2 (h))

-

-

6,286

-

(6,286
)

-

Net income

-

-

-

3,848

-

3,848

Balances at March 31, 2019

14,695,176

15

102,854

20,119

1,558

124,546

Share-based compensation

-

-

296

-

-

296

Net income

-

-

-

2,168

-

2,168

Balances at June 30, 2019

14,695,176

$
15

$
103,150

$
22,287

$
1,558

$
127,010

	Outstanding shares		Common stock		Additional paid-in capital		Retained earnings			Non-controlling interests		Total
Balances at December 29, 2019		15,011,676	$	15	$	104,056	$	25,088		$	1,558	$	130,717
Share-based compensation		-		-		455		-			-		455
Net loss		-		-		-		(17,644	)		-		(17,644	)
Balances at March 29, 2020		15,011,676		15		104,511		7,444			1,558		113,528
Share-based compensation		-		-		453		-			-		453
Net loss		-		-		-		(6,988	)		-		(6,988	)
Balances at June 28, 2020		15,011,676	$	15	$	104,964	$	456		$	1,558	$	106,993

	Six Months Ended						Six Months Ended
	June 28,			June 30,			July 4,			June 28,
	2020			2019			2021			2020
Cash flows from operating activities:
Net (loss) income	$	(24,632	)	$	6,016
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Net income (loss)							$	5,643		$	(24,632	)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment		6,256			6,008			5,952			6,256
Share-based compensation expense		908			592			830			908
Asset impairment charges		16,426			-			-			16,426
Deferred income taxes		(4,239	)		(789	)		(1,111	)		(4,239	)
Other, net		122			120			143			122
Changes in assets and liabilities:
Accounts and other receivables		(469	)		(233	)		(338	)		(469	)
Prepaid expenses and other current assets		1,524			(26	)		(458	)		1,524
Accounts payable		1,074			(880	)		2,085			1,074
Accrued expenses and other current liabilities		(1,424	)		(5,455	)		4,559			(1,424	)
Lease right-of-use assets and liabilities		714			1,039			(951	)		714
Other assets and liabilities, net		(24	)		(920	)		(1,074	)		(24	)
Net cash (used in) provided by operating activities		(3,764	)		5,472
Net cash provided by (used in) operating activities								15,280			(3,764	)

Cash flows from investing activities:
Purchase of property and equipment		(3,030	)		(3,176	)		(2,827	)		(3,030	)
Other investing activities		(236	)		(122	)		(378	)		(236	)
Net cash used in investing activities		(3,266	)		(3,298	)		(3,205	)		(3,266	)

Cash flows from financing activities:
Proceeds from borrowing under debt agreement		32,100			-			5,000			32,100
Payments on long-term debt		(16,350	)		(2,500	)		(6,833	)		(16,350	)
Other financing activities		(208	)		(6	)		6			(208	)
Net cash provided by (used in) financing activities		15,542			(2,506	)
Increase (decrease) in cash and cash equivalents		8,512			(332	)
Net cash (used in) provided by financing activities								(1,827	)		15,542
Increase in cash and cash equivalents								10,248			8,512
Cash and cash equivalents at beginning of period		8,803			8,783			12,363			8,803
Cash and cash equivalents at end of period	$	17,315		$	8,451		$	22,611		$	17,315

Supplemental disclosures:
Property and equipment obligations accrued at beginning of period	$	1,116		$	819		$	879		$	1,116
Property and equipment obligations accrued at end of period		860			1,930			1,278			860
Cash paid for interest		109			327			277			109
Cash paid for income taxes		83			740			1,272			83

J. Alexander’s Holdings, Inc. (the “Company”) was incorporated on August 15, 2014 in the state of Tennessee and is a holding company which is the sole managing member of and owns all of the outstanding Class A Units of J. Alexander’s Holdings, LLC, the parent company of all of the Company’s operating subsidiaries. The Company is a publicly-traded company, with its stock listed on the New York Stock Exchange under the symbol “JAX.”

The Company, through J. Alexander’s Holdings, LLC and its subsidiaries, owns and operates full service, upscale restaurants including J. Alexander’s, Redlands Grill, Overland Park Grill, Merus Grill and Stoney River Steakhouse and Grill (“Stoney River”). At ~~June 28, 2020~~July 4, 2021 and ~~December 29, 2019,~~January 3, 2021, the Company operated 4647 and 4746 restaurants, respectively, in 16 states. The Company’s restaurants are concentrated primarily in the East, Southeast, and Midwest regions of the United States. The Company does not have any restaurants operating under franchise agreements.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the instructions to Form 10-Q and the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnote disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarter and six-month period ended ~~June 28, 2020~~July 4, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending January ~~3, 2021.~~2, 2022. For further information, refer to the Consolidated Financial Statements and footnotes thereto included in ~~our~~the Company’s Annual Report on Form 10-K for the fiscal year ended ~~December 29, 2019,~~January 3, 2021, filed with the SEC on March ~~13, 2020,~~18, 2021, and amended on April ~~17, 2020~~29, 2021 (the ~~“2019~~“2020 Annual Report”).

Total comprehensive income (loss) ~~income~~ is comprised solely of net income (loss) ~~income~~ for all periods presented. There have been no material changes in ~~our~~the Company’s significant accounting policies ~~other than those described in Note 2(k) – Inventory Method Change, Note 4 – Income Taxes and Note 7 – Recent Accounting Pronouncements,~~ as compared to the significant accounting policies described in ~~our 2019~~the Company’s 2020 Annual Report.

~~On January 30,~~The onset of the novel coronavirus (“COVID-19”) pandemic in the first quarter of 2020 ~~the World Health Organization (“WHO”) announced a global health emergency due~~resulted in significant disruption to the ~~global spread of a new strain of coronavirus ("COVID-19")~~restaurant industry and adversely affected the ~~related risks~~Company’s business. In response to the ~~international community. On March 11, 2020, the WHO classified the~~ COVID-19 ~~outbreak as a~~ pandemic, ~~and on March 13, 2020 the United States declared the pandemic a National Public Health Emergency. In response,~~ many states and local jurisdictions in which the Company operates restaurants issued stay-at-home orders and other measures, including the closure of all in-restaurant dining, aimed at slowing the spread of ~~the virus~~COVID-19 beginning in March 2020. These measures resulted in the closure of the Company’s dining rooms beginning in mid-March 2020 and a shift to an entirely off-premise operations platform ~~only~~ until late April 2020 when certain states began to allow for partial reopening of dining rooms. ~~Dining room capacity restrictions remain in place at varying degrees through the date of this report.~~ As a result of the government-mandated restrictions and related public health concerns, the Company’s net sales, results of operations and cash flows were negatively impacted in fiscal 2020, and the impact continued throughout the first half of 2021 due to reductions in guest counts from capacity restrictions, particularly during January and early February of 2021. Each of the Company’s 47 locations were open for in‑restaurant dining at full capacity as of the end of the second quarter of 2021 and remain fully open as of the date of this report in accordance with their state’s or local government’s guidelines. This capacity status was only reached in the final weeks of the second quarter at certain locations due to restrictions imposed by their respective state and local governments.

During the first half of 2020, due to significant reductions in guest counts. The Company has taken measures to increase its off-premise sales during the COVID-19 pandemic, including implementing its online ordering platform utilizing the services of ChowNow, introducing curbside service, menu innovation which includes family-style meals and butcher-shop sales of cook-at-home, hand-cut steaks and whole loins, and increasing digital marketing and email campaigns to drive guest awareness.

~~In addition to the decline in restaurant sales,~~ the Company ~~has also~~ incurred approximately $3,275 of additional costs ~~directly~~ related primarily to the ~~COVID-19 pandemic in the six-month period ended June 28, 2020, which consists primarily of~~continuing benefits and payments to furloughed restaurant employees ~~for emergency sick leave,~~under the Company’s Emergency Sick Leave Policy (“ESLP”), vacation and other sick leave benefits and related payroll taxes as well as ~~inventory waste. Additionally,~~write-offs of inventory. During the same period of 2021, the Company ~~has continued to incur expenses~~incurred approximately $103 related to payments made to employees pursuant to the ~~ongoing operations of the restaurants as well as monthly rent~~ESLP and ~~occupancy-related costs~~other sick leave benefits and related payroll taxes. Additionally, during the ~~period that its restaurants were temporarily closed,~~

or operating on an off-premise basis only or with limited capacity. The Company has implemented measures to reduce its costs and limit its cash outflows during the COVID-19 pandemic, including temporary reductions in staffing levels and related furloughsfirst half of restaurant-level hourly employees, elimination of certain positions at the Company’s corporate office, deferral or cancellation of significant capital expenditure projects, engaging in ongoing negotiations with vendors and landlords regarding deferral or abatement of rental and other contractual obligations and the deferral of tax payments where allowed.

The disruption in operations and reduction in restaurant sales also led the Company to consider the impact of the COVID-19 pandemic on the recoverability of its assets, including property and equipment, right-of-use assets for operating leases, goodwill and intangible assets, and others. Such impairment analyses resulted in the Company recording impairment charges totaling $16,426 for the six-month period ended June 28, 2020 and are discussed further in Note 2(m) below. T~~he ultimate severity and longevity of the COVID-19 pandemic is unknown, and therefore,~~ ~~it is possible that additional impairments could be identified in future periods, and such amounts could be material.~~

~~To preserve financial flexibility, the Company drew the remaining $17,000 of available capacity (at the time of the draw) under its revolving credit facilities in March 2020. During April~~ 2020, the Company ~~also entered into deferral letter agreements with its lender to postpone principal and interest payments on its outstanding indebtedness for a period of 90 days and,~~recorded certain impairment charges which are discussed in June 2020, an additional deferral letter was entered into to defer principal payments for an additional 90-day period. Additionally, the Company entered into a modification agreement in April 2020 to defer the maturity of, and interest payments under one of its term loans to September 2021. In June 2020, the Company entered into an amendment with its lender to increase the borrowing capacity under its revolving line of credit by an additional $15,000. Further, in May 2020, the Company obtained a waiver letter from its lender that waived existing financial covenants and instituted new financial covenants, which the Company expects to be in compliance with, through the period ending July 4, 2021. See Note ~~2(l)~~2(k) below ~~for further information.~~.

The full impact of the COVID-19 pandemic continues to evolve as of the date of this report. ~~Given~~Despite the ~~uncertainty surrounding~~fact that vaccines are now widely available across the ~~global economy and governmental restrictions~~country, there are widespread increases in diagnosed cases reported since the end of the second quarter largely due to the spread of COVID-19 variants. There can be no assurance that state or local authorities will allow dining rooms to remain open even at reduced capacity if there is a surge in cases or variants of COVID-19 in their respective areas. The extent of the impact of the COVID-19 pandemic on our operations and financial results depends on future developments, and the Company cannot reasonably predict ~~when~~if all of its restaurants will be ~~able~~allowed to ~~return~~continue to ~~normal~~operate their dining ~~room operations.~~rooms at full or limited capacities. Due to the rapid development and fluidity of this situation, the Company cannot determine the ultimate impact that the COVID-19 pandemic will have on its consolidated financial condition, liquidity and future results of operations, and therefore, any prediction as to the ultimate material adverse impact on ~~the Company’s consolidated financial condition, liquidity, and future results of operations~~these performance measures is uncertain. The Company does expect that its results of operations, cash flows and liquidity will continue to be negatively affected to some extent by the COVID-19 pandemic, ~~in some form, for~~either by potential future governmental restrictions or lingering impacts on the economy and the labor market, during at least a portion of the remainder of fiscal ~~year 2020.~~2021.

The unaudited Condensed Consolidated Financial Statements include the accounts of the Company as well as the accounts of its subsidiaries. All intercompany profits, transactions, and balances between the Company and its subsidiaries have been eliminated. It is the Company’s policy to reclassify prior year amounts to conform to the current year’s presentation for comparative purposes, if such a reclassification is warranted.

The Company is a holding company with no direct operations and that holds as its sole asset an equity interest in J. Alexander’s Holdings, LLC and, as a result, relies on J. Alexander’s Holdings, LLC to provide it with funds necessary to meet its financial obligations.

The Company’s fiscal year ends on the Sunday closest to December 31, and each quarter typically consists of 13 weeks. The quarters and six-month periods ended July 4, 2021 and June 28, 2020 ~~and June 30, 2019~~ each included 13 and 26 weeks of operations, respectively. Fiscal ~~years 2020 and 2019~~year 2021 will include ~~53 and~~ 52 weeks of operations ~~respectively.~~while fiscal year 2020 included 53 weeks of operations.

Losses from discontinued operations totaled $3 and $55 for the quarters ended July 4, 2021 and June 28, 2020, respectively. For the six-month periods ended July 4, 2021 and June 28, 2020, the income and loss from discontinued operations totaled $592 and $107, respectively. During the ~~second quarter~~first half of ~~2020,~~2021, the Company made the decision to permanently close the Lyndhurst Grill location in Cleveland, Ohio, on May 1, 2020 after a review of its projected and historical financial performance. This location was also required to be temporarily closed in mid‑March due to COVID-19-related traffic limitations unique to that specific restaurant which further impacted operating results. Restaurant closing costs recorded during the second quarter of 2020 totaled $178 and included labor expenses incurred subsequent to closure, severance and other miscellaneous costs. Expenses

associated with the closure of the Lyndhurst Grill restaurant have not been included in discontinued operations as its closure does not represent a strategic shift that will have a major effect on our operations and financial results. As such, these restaurant closing costs have been included ~~as a component of “Long-lived asset impairment charges and restaurant closing costs” in the Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income. The~~ Company entered into ana termination agreement to sell this property in the second quarter of 2020. The sale is expected to close in the third quarter of 2020, subject to customary closing conditions. As such, the Company has reclassified $1,242 of restaurant property and equipment to “Prepaid expenses and other current assets” from “Property and equipment, at cost, less accumulated depreciation and amortization” in the Condensed Consolidated Balance Sheets as of June 28, 2020. The assets held for sale consist of land and building at their carrying amounts subsequent to the related ~~long-lived asset impairment charge recorded during the first quarter of 2020 discussed in Note 2(m) below.~~

~~In addition,~~ ~~the Company remains party~~ to a lease agreement for a location that was closed in 2013, ~~and is~~which has been accounted for as a discontinued ~~operation.~~operation since that time. As a result of the termination agreement, the Company recorded a gain of approximately $630, representing the difference between recorded lease liabilities and the termination fee paid to the landlord by the Company during the first quarter of 2021. The ~~$55~~gain was partially offset by ongoing lease and ~~$58 losses~~other exit costs incurred during fiscal 2021. The loss from discontinued operations ~~included~~recorded in the ~~quarters ended June 28,~~second quarter and first half of 2020 ~~and June 30, 2019, respectively, and losses for the six-month periods ended June 28, 2020 and June 30, 2019 of $107 and $117, respectively, consist~~consisted solely of exit and disposal costs ~~for~~related to the Company’s obligations under this ~~location.~~same lease agreement.

Transaction ~~contested proxy~~ and other related expenses totaled $1,888 and $(66) for the quarters ended July 4, 2021 and June 28, 2020, respectively, and $1,934 and $623 for ~~the quarter~~six-month periods ended July 4, 2021 and ~~six-month period ended~~ June 28, 2020, respectively. During the second quarter of 2021, the Company incurred consulting, investment banking and legal fees related to the Company’s evaluation of strategic alternatives. In the first quarter of 2020, the Company incurred legal fees, other professional fees and consulting fees related to the ~~ongoing evaluation of strategic alternatives.~~same project. The Company received a discount for legal services rendered during that period resulting in income for the second quarter of ~~the year. During the first quarter of 2020,~~fiscal 2020.

As noted below, on July 2, 2021, the Company announced that ~~given~~it entered into a merger agreement under which SPB Hospitality LLC (“SPB Hospitality”) will acquire the ~~uncertainties~~Company in an all-cash transaction valued at approximately $220,000. If the merger is consummated, the Company’s shareholders will receive $14.00 in cash per share of common stock of the Company. The merger is expected to be completed in the ~~business community, the restaurant industry and the financial markets as a result~~fourth quarter of ~~COVID-19, the ongoing review of strategic alternatives~~2021, subject to approval by the Company’s ~~Board~~

shareholders, expiration or termination of ~~Directors (the “Board”) will not be completed until these uncertainties are resolved. Transaction, contested proxy and other related expenses for~~ the ~~second quarter and six-month~~applicable waiting period ~~ended June 30, 2019 totaled $651. Expenses in 2019 include costs associated with both soliciting shareholder proxies for~~under the ~~Company’s 2019 annual meeting~~Hart-Scott-Rodino Antitrust Improvements Act of ~~shareholders~~1976, as well as ~~costs related to~~other customary closing conditions. See “Note 10 – Merger Agreement with SPB Hospitality” below for additional discussion of the ~~evaluation of strategic alternatives.~~merger.

Basic earnings (loss) ~~earnings~~ per share of common stock is computed by dividing net income (loss) ~~income~~ by the weighted average number of shares outstanding for the reporting period. Diluted earnings (loss) ~~earnings~~ per share of common stock is computed similarly to basic earnings (loss) ~~earnings~~ per share except the weighted average shares outstanding are increased to include potential shares outstanding resulting from share-based compensation awards and additional shares from the assumed exercise of any common stock equivalents, if dilutive. In periods of net loss, 0no potential common shares are included in the diluted shares outstanding as the effect is anti-dilutive. J. Alexander’s Holdings, LLC Class B Units are considered common stock equivalents for this purpose. The number of additional shares of common stock related to these common stock equivalents is calculated using the if-converted method, if dilutive. The number of additional shares of common stock related to stock option awards and unvested restricted share awards subject to only a service condition is calculated using the treasury stock method, if dilutive. Unvested restricted share awards that are subject to a performance condition are regarded as contingently issuable common shares and are included in the denominator of the diluted earnings (loss) ~~earnings~~ per share calculation using the treasury stock method as of the beginning of the period in which the performance condition has been satisfied, if dilutive. Refer to Note 3 – Earnings (Loss) ~~Earnings~~ per Share for the basic and diluted earnings (loss) ~~earnings~~ per share calculations and additional discussion.

Non-controlling interests presented on the Condensed Consolidated Balance Sheets represent the portion of net assets of the Company attributable to the non-controlling J. Alexander’s Holdings, LLC Class B Unit holders. As of each ~~June 28, 2020~~of July 4, 2021 and ~~December 29, 2019,~~January 3, 2021, the non-controlling interests presented on the Condensed Consolidated Balance Sheets were ~~$1,558. On February 28, 2019, in conjunction with the termination agreement (“Termination Agreement”) entered into in November 2018 between J. Alexander’s Holdings, LLC~~$1,558 and Black Knight Advisory Services, LLC (“Black Knight”), the 1,500,024 Class B Units held by Black Knight were cancelled and forfeited for no consideration. Therefore, the Black Knight non‑controlling interest associated with their Class B Unit share-based compensation expense was reclassified to additional paid-in capital in the first quarter of 2019, and as of June 28, 2020 and December 29, 2019, non-controlling interests consist ~~solely~~ of the previously recognized non-cash compensation expense relative to the Class B Units held by management. The Hypothetical Liquidation at Book Value method was used as of each of July 4, 2021 and June 28, 2020 ~~and June 30, 2019~~ to determine

allocations of non-controlling interests in respect of vested grants consistent with the terms of the Second Amended and Restated LLC Agreement of J. Alexander’s Holdings, LLC, and pursuant to those calculations, 0 allocation of net income (loss) ~~income~~ was made to non-controlling interests for either of the quarters or ~~six-month periods~~six months ended July 4, 2021 or June 28, ~~2020 or June 30, 2019.~~2020.

Management has made certain estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the unaudited Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the periods presented to prepare these unaudited Condensed Consolidated Financial Statements in conformity with GAAP. Significant items subject to such estimates and assumptions include those related to the accounting for gift card breakage, determination of uncertain tax positions and the valuation allowance relative to deferred tax assets, if any, estimates of useful lives of property and equipment and leasehold improvements, the carrying amount of ~~goodwill and~~ intangible assets, fair market valuations, determination of lease terms, and accounting for impairment losses, contingencies, and litigation. Actual results could differ from these estimates.

The Company recently completed the implementation of a new inventory management system. In connection with this implementation, the Company changed its method of accounting for inventory from the lower of cost (first-in, first-out) or net realizable value method utilized by its legacy system to the lower of cost or net realizable value method, with cost being determined using an average cost method, effective December 30, 2019 (the first day of the current fiscal year). The Company believes this change in accounting principle is preferable, as it will result in greater precision in the costing of inventories. In addition, the average cost method better aligns with the functionality of the new inventory management system. The Company determined that the effects of adopting the average cost method were not material to its Condensed Consolidated Financial Statements. Prior to the conversion to the new inventory management system, the Company was not able to determine the impact of the change to the average cost method. Therefore, it did not retroactively apply the change to periods prior to fiscal year 2020.

~~The Company is party to the Third Amended and Restated Loan Agreement, dated June 5, 2020, by and between J. Alexander’s, LLC and Pinnacle Bank, as amended (the “Loan Agreement”).~~ As of June 28, 2020, the Loan Agreement consists of the following loans: (i) a $5,000 term loan that matures on September 3, 2021 (the “Mortgage Loan”), (ii) a $20,000 development line of credit that matures on September 3, 2021 (the “Development Line of Credit”), (iii) a $10,000 term loan that matures on September 3, 2021 (the “Term Loan”), and (iv) a $16,000 revolving line of credit that matures on September 3, 2021 (the “Revolving Line of Credit”). At June 28, 2020, the amounts outstanding under the Development Line of Credit and the Revolving Line of Credit were $20,000 and $1,000, respectively. At June 28, 2020, $4,167 was outstanding under the Mortgage Loan and an additional $555 was outstanding under the Term Loan. The Loan Agreement includes the agreed terms of the April and May modifications discussed below.

During the first quarter of 2020, the Company announced it drew down the remaining $17,000 of available capacity (at the time of the draw) under the Development Line of Credit and the Revolving Line of Credit (the “Credit Draw”). Following the Credit Draw, debt outstanding under the Development Line of Credit and the Revolving Line of Credit totaled $21,000. Pursuant to the terms of the Second Amended and Restated Loan Agreement (the “Second Loan Agreement”), the borrowings under the Second Loan Agreement bore interest at 30-day LIBOR plus a sliding interest rate scale determined by a maximum adjusted debt to EBITDAR ratio (following the Credit Draw, set at 30-day LIBOR plus 2.10% as of June 28,

2020). Interest rate terms with respect to the Development Line of Credit under the Loan Agreement are consistent with those stated in the Second Loan Agreement. The new interest rate terms under the Revolving Line of Credit are discussed below. The Credit Draw was undertaken as a precautionary measure to provide increased liquidity and preserve financial flexibility in light of current disruption and uncertainty resulting from the COVID-19 pandemic. The proceeds from the Credit Draw are available to be used for general corporate purposes, including working capital.

On April 15, 2020, the Company entered into a modification of the Second Loan Agreement impacting the Term Loan, which deferred the two remaining principal payments totaling $555 until the Term Loan’s new maturity date which was modified to be September 3, 2021. On September 3, 2021, this principal amount will be payable in full in addition to interest accrued during the relevant period. With respect to interest payments in the interim, the Term Loan was modified to defer such payments until July 3, 2020 at which point monthly interest payments will resume through the September 3, 2021 maturity date. Similar to the Term Loan, the Company also negotiated for the deferral of principal and interest payments related to the Mortgage Loan and executed deferral letters in both April 2020 and June 2020 to cause such deferrals. The principal payments otherwise due in April through September 2020 totaling $834 will now be payable when the loan matures on September 3, 2021 and interest payments will resume on July 3, 2020. The Company also reached an agreement with its lender in April 2020 to defer interest payments on its Development Line of Credit and Revolving Line of Credit for the months of April, May and June 2020, and interest payments will resume on July 3, 2020.

On June 5, 2020, the Company entered into the Loan Agreement with Pinnacle Bank which amended its Revolving Line of Credit to expand its capacity from $1,000 to a total of $16,000 by adding an accordion feature for the additional $15,000, with the additional capacity being available for general corporate purposes, including working capital and letters of credit. This amendment also required the Company to pledge the previously unencumbered five owned properties as collateral to the lender. The additional capacity is available for borrowing by the Company in amounts up to and including $5,000 per fiscal month beginning in the eighth fiscal month of 2020, with any amounts not borrowed during any particular period to be available for borrowing in subsequent periods. Any advances on the expanded Revolving Line of Credit are contingent on the Company achieving certain levels of revenue on a trailing three-fiscal-month basis. The Loan Agreement was included as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 9, 2020. Borrowings under the Revolving Line of Credit under the Loan Agreement bear interest at a rate of LIBOR plus 2.5%, with a floor for LIBOR of 1.5%, and will be payable quarterly beginning on September 3, 2020. All outstanding principal and interest under the Revolving Line of Credit will be due and payable on the maturity date of September 3, 2021.

Effective May 6, 2020, the Company entered into a waiver with Pinnacle Bank, which waived financial covenant compliance for existing financial covenants under the Second Loan Agreement beginning May 7, 2020 through the period ending July 4, 2021 (the “Waiver Period”), and implemented two new financial covenants now included in the Loan Agreement (the “New Financial Covenants”). The New Financial Covenants require (i) minimum revenue of (a) at least $99,800 for the Company’s fiscal year ending January 3, 2021, (b) at least $118,400 on a four-quarter trailing basis by April 4, 2021, and (c) at least $166,800 on a four-quarter trailing basis by July 4, 2021, and (ii) a maximum adjusted debt to tangible net worth ratio of 0.80 or less, measured quarterly beginning September 27, 2020. In accordance with the Loan Agreement, upon the expiration of the Waiver Period, the New Financial Covenants will terminate and the financial covenants revert back to (i) a fixed coverage charge ratio of not less than 1.25 to 1.0 and (ii) a maximum adjusted debt to EBITDAR ratio of not more than 4.0 to 1.0, consistent with the historical financial covenants in the Second Loan Agreement prior to the Company obtaining the waiver. The Company projects to be in compliance with these New Financial Covenants through the Waiver Period. For additional information on the former financial covenants under the terms and conditions of the Second Loan Agreement, please see “Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note 10 – Debt” in the Company’s 2019 Annual Report.

On April 10, 2020 and April 15, 2020, respectively, J. Alexander’s, LLC and Stoney River Management Company, LLC each an indirect subsidiary of the Company, were each granted loans from Pinnacle Bank in the aggregate amounts of $10,000 and $5,100 pursuant to the Paycheck Protection Program under the Coronavirus Aid Relief and Economic Security Act (“CARES Act”), which was enacted March 27, 2020. The Company believed its subsidiary operating companies were eligible for the loans in accordance with the special eligibility provisions for larger companies under provisions included in the CARES Act and the applicable implementing guidance issued by the U.S. Small Business Administration under the Paycheck Protection Program that was available at the time loan applications were submitted. The loans had been obtained to support the goal in the legislation of providing financial assistance to restaurant-level employees, including approximately 3,400 furloughed hourly employees that were not assisting with the Company’s carry-out programs at the time, and to restore the Company’s workforce as quickly as possible once dine-in operations could be safely resumed in accordance with applicable state and local government guidelines. However, as a result of ~~additional~~ ~~guidance issued by~~ the ~~United States~~

~~Treasury Department and the U.S. Small Business Administration on April 23, 2020,~~ ~~the Company repaid both the $10,000 and $5,100 loans in full on April 29, 2020.~~

~~In light of the recent~~ decline in the market price of the Company’s common stock that occurred during the first quarter of 2020, the impact of mandated dining room closures on financial results last year, the ~~expected~~severe reduction in economic activity ~~in the near term,~~that followed, and the general economic and market volatility at the time, the Company determined that these factors constituted an interim triggering event as of the end of the Company’s first ~~and second quarters~~quarter of 2020, and performed impairment analyses with regard to its indefinite-lived intangible assets, property and equipment (including its right-of-use assets for operating leases) and goodwill. As a result, the Company recorded asset impairment charges totaling $16,426 in the first half of ~~2020.~~

~~The Company performed a quantitative goodwill impairment test as of March 29,~~ 2020, ~~utilizing a market approach~~ which included observable market prices associated with the Company’s common stock price in determining a fair value for the Company and its reporting units. As a result of this test, the Company determined that the J. Alexander’s reporting unit’s carrying value exceeded its fair value$15,737 related to ~~such an extent that~~ the full impairment of ~~goodwill in~~ the ~~first quarter of 2020 in the~~carrying amount of ~~$15,737 was appropriate.~~goodwill. The ~~effect of this conclusion~~goodwill impairment charge is presented as a ~~component of “Goodwill impairment charge”~~separate line on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~.

Additionally, during the first half of 2020, the Company recorded a long-lived asset impairment charge of $689 related to ~~state the assets at its Lyndhurst Grill~~one location ~~in Cleveland, Ohio, at their fair value as of March 29, 2020,~~ which was subsequently closed and sold during fiscal 2020. This impairment charge is presented as “Long-lived asset impairment charges and restaurant closing costs” on the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Income. During the second quarter of 2020, the Company made the decision to permanently close this location after a review of its projected and historical financial performance. This location was also required to be temporarily closed in mid‑March ~~due to COVID-19-related traffic limitations unique to that specific restaurant which further impacted operating results.~~.

The Company assessed its ~~other restaurant locations~~remaining intangible and fixed assets for indicators of impairment as of ~~the quarter ended~~quarter-end, for both July 4, 2021 and June 28, 2020, and assessed recoverability of certain fixed assets as warranted. NaN ~~additional~~ impairment was ~~identified as of June 28, 2020.~~

~~The Company also performed a quantitative impairment analysis in the first and second quarters of 2020 relative to its indefinite-lived intangible assets and determined that the fair value~~recorded for either of these ~~assets substantially exceeded their carrying values and 0 impairment existed as of June 28, 2020.~~periods.

The following table sets forth the computation of basic and diluted earnings (loss) ~~earnings~~ per share:

Quarter Ended

Six Months Ended

(Dollars and shares in thousands, except per share amounts)

June 28,

June 30,

June 28,

June 30,

2020

2019

2020

2019

Numerator:

(Loss) income from continuing operations, net of tax

$
(6,933
)

$
2,226

$
(24,525
)

$
6,133

Loss from discontinued operations, net

(55
)

(58
)

(107
)

(117
)
Net (loss) income

$
(6,988
)

$
2,168

$
(24,632
)

$
6,016

Denominator:

Weighted average shares (denominator for basic (loss) earnings per share)

14,695

14,695

14,695

14,695

Effect of dilutive securities

-

40

-

20

Adjusted weighted average shares and assumed conversions
(denominator for diluted (loss) earnings per share)

14,695

14,735

14,695

14,715

Basic (loss) earnings per share:

(Loss) income from continuing operations, net of tax

$
(0.47
)

$
0.15

$
(1.67
)

$
0.42

Loss from discontinued operations, net

(0.00
)

(0.00
)

(0.01
)

(0.01
)
Basic (loss) earnings per share

$
(0.48
)

$
0.15

$
(1.68
)

$
0.41

Diluted (loss) earnings per share:

(Loss) income from continuing operations, net of tax

$
(0.47
)

$
0.15

$
(1.67
)

$
0.42

Loss from discontinued operations, net

(0.00
)

(0.00
)

(0.01
)

(0.01
)
Diluted (loss) earnings per share

$
(0.48
)

$
0.15

$
(1.68
)

$
0.41

Note: Per share amounts may not sum due to rounding.

	Quarter Ended						Six Months Ended
(Dollars and shares in thousands, except per share amounts)	July 4,			June 28,			July 4,		June 28,
	2021			2020			2021		2020
Numerator:
Income (loss) from continuing operations, net of tax	$	2,256		$	(6,933	)	$	5,051	$	(24,525	)
Income (loss) from discontinued operations, net		(3	)		(55	)		592		(107	)
Net income (loss)	$	2,253		$	(6,988	)	$	5,643	$	(24,632	)
Denominator:
Weighted average shares (denominator for basic earnings (loss) per share)		14,757			14,695			14,757		14,695
Effect of dilutive securities		528			-			316		-
Adjusted weighted average shares and assumed conversions (denominator for diluted earnings (loss) per share)		15,285			14,695			15,073		14,695

Basic earnings (loss) per share:
Income (loss) from continuing operations, net of tax	$	0.15		$	(0.47	)	$	0.34	$	(1.67	)
Income (loss) from discontinued operations, net		(0.00	)		(0.00	)		0.04		(0.01	)
Basic earnings (loss) per share	$	0.15		$	(0.48	)	$	0.38	$	(1.68	)
Diluted earnings (loss) per share:
Income (loss) from continuing operations, net of tax	$	0.15		$	(0.47	)	$	0.34	$	(1.67	)
Income (loss) from discontinued operations, net		(0.00	)		(0.00	)		0.04		(0.01	)
Diluted earnings (loss) per share	$	0.15		$	(0.48	)	$	0.37	$	(1.68	)

Note: Per share amounts may not sum due to rounding.

The J. Alexander’s Holdings, LLC Class B Units are considered common stock equivalents, and the number of additional shares of common stock related to these Class B Units is calculated using the if-converted method. The 833,346 Class B Units associated with management’s profits interest awards are considered to be ~~antidilutive as of and~~dilutive for the quarter and six-month period ended ~~June 30, 2019,~~July 4, 2021, and ~~therefore, have been excluded from~~the impact on the number of weighted average shares in the diluted ~~(loss)~~ earnings per share ~~calculations.~~calculation was 127,664 and 63,832, respectively.

The number of additional shares of common stock related to stock option awards is calculated using the treasury stock method, if dilutive. There were 1,739,250 and 1,495,750 stock option awards outstanding as of July 4, 2021 and June 28, 2020, ~~and June 30, 2019.~~respectively. The dilutive impact of ~~these~~the awards outstanding as of July 4, 2021 on the number of weighted average shares in the diluted earnings per share calculation was ~~39,848~~282,200 and ~~19,924 for the quarter and six-month periods ended June 30, 2019, respectively.~~

As of June 28, 2020, there were 264,000 and 52,500 restricted share awards and performance share awards outstanding, respectively. The performance condition associated with the performance share awards had not been met as of June 28, 2020. As noted above, the Company recorded a net loss169,164 for the quarter and six-month period ended July 4, 2021, respectively.

As of July 4, 2021 and June 28, ~~2020. As such, NaN~~2020, there were 281,003 and 264,000 unvested restricted share awards outstanding, respectively, which were subject to only a service condition. All unvested restricted share awards outstanding as of ~~these outstanding awards~~July 4, 2021 were considered dilutive for the second quarter and six-month period then ended, and the impact on the number of weighted average shares in the diluted earnings per share calculation was 118,601 and 83,038, respectively.

As of July 4, 2021 and June 28, 2020, there were 52,500 performance share awards outstanding. The performance condition associated with such awards had not been met at either July 4, 2021 or June 28, 2020, and, therefore, the portion of the awards that had satisfied the applicable service condition as of these ~~periods. NaN such~~dates was excluded from the weighted average shares outstanding for basic earnings (loss) per share calculations. These awards ~~were outstanding as of June 30, 2019.~~also did not impact the diluted earnings per share calculation since the performance condition has not yet been satisfied.

~~On March 27, 2020, the CARES Act was enacted into law.~~ The ~~CARES Act is a~~interim tax and spending package intended to provide economic relief to address the impact of the COVID-19 pandemic. The CARES Act includes several significant income and other business tax provisions that, among other things, eliminates the taxable income limit for certain net operating losses (“NOLs”) and

allows businesses to carry back NOLs arising in 2018, 2019 and 2020 to the five prior tax years, loosens the business interest limitation under Internal Revenue Code Section 163(j) and fixes the qualified improvement property (“QIP”) regulations in the 2017 Tax Cuts and Jobs Act. Additionally, the CARES Act provides for non-income tax-related relief such as refundable employee retention tax credits and the deferral of the employer-paid portion of social security taxes. As a result of the CARES Act, the Company estimates that it will be able to obtain a tax refund from the carryback of NOLs expected to be generated in fiscal 2020, and it is currently in the process of quantifying the estimated total amount of that carryback. The Company also intends to take full advantage of the deferral offeredprovision for the ~~employer-paid portion of social security taxes~~quarter and the refundable employee retention tax credits. As of June 28, 2020, the Company has deferred the payment of $897 of social security taxes which are accrued as “Other long-term liabilities” in the Consolidated Balance Sheets. The Company continues to evaluate the various provisions of the CARES Act and their impactsix-month period ended July 4, 2021 was prepared on ~~its~~an estimated annual effective ~~tax~~ rate ~~and its consolidated financial statements as a whole, but~~basis while the ~~Company does anticipate the impact for the full fiscal year 2020 could be significant.~~

~~The~~ interim tax provision for the quarter and six-month period ended June 28, 2020 was prepared on an actual effective tax rate ~~basis rather than on an estimated annual effective rate basis due to the fact that the Company has determined that a reliable estimate of the annual effective tax rate cannot be made.~~basis. The Company recognized anincome tax expense of $343 and income tax benefit of ~~$4,419 and~~ $5,806 for the ~~quarter~~six-month periods ended July 4, 2021 and June 28, 2020, respectively. The net effective tax rate (including the impact of discrete items) for the first six months of 2021 was 5.7%. The factors that caused the net effective tax rate to vary from the federal statutory rate of 21% for the six-month period ended ~~June 28, 2020, respectively, which includes $1,477 and $1,583, respectively, of current benefit~~July 4, 2021 primarily related to the ~~carryback~~impact of ~~calculated NOLs for~~ the ~~second quarter~~Federal Insurance Contribution Act (“FICA”) tip credit offset by state income taxes and ~~first half of 2020~~discrete items primarily related to ~~prior years as allowed under the CARES Act.~~return to provision adjustments. The ~~actual~~ net effective tax rate for the first half of 2020 was 19.1% ~~compared to 4.1% for the same period in 2019.~~. The factors that caused the net effective tax rate to vary from the federal statutory rate of 21% for the six-month period ended June 28, 2020 primarily related to the impact of the nondeductible book goodwill impairment charge recorded during 2020, partially offset by the ~~Federal Insurance Contribution Act (“FICA”)~~FICA tip credit, state income taxes, the anticipated carryback of the ~~NOLs~~net operating losses (“NOLs”) generated during 2020 to prior years, including the impact of the correction of the ~~QIP~~qualified improvement property (“QIP”) regulations on the anticipated carryback and other items. For the six-month period ended June 30, 2019, the factors that caused the net effective tax rate to vary from the federal statutory rate included the impact of the FICA tip credit and other credits, partially offset by state income taxes and certain non-deductible expenses.

The Company regularly assesses the need for a valuation allowance related to its deferred tax assets, which includes consideration of both positive and negative evidence related to the likelihood of realization of such deferred tax assets to determine, based on the weight of the available evidence, whether it is more-likely-than-not that some or all of its deferred tax assets will not be realized. In its assessment, the Company considers recent financial operating results, projected future taxable income, the reversal of existing taxable differences, and tax planning strategies. The Company has evaluated the need for valuation allowances as of the six-month period ended June 28, 2020 and has determined that a valuation allowance of $307 was necessary relative to certain state net operating losses and other deferred tax assets which are not expected to be realized. Management also determined at June 28, 2020 that it is more likely than not that the results of future operations and reversal of deferred tax liabilities will generate sufficient taxable income to realize the remaining deferred tax assets not covered by this valuation allowance. The Company will continue to assess the likelihood of the realization of its deferred tax assets, especially in light of the COVID-19 pandemic and related economic uncertainty, and the valuation allowance will be adjusted accordingly in future periods, if required.

As a result of the disposition of the Company’s predecessor’s Wendy’s operations in 1996, subsidiaries of the Company may remain secondarily liable for certain real property leases with remaining terms of one to five years. The total estimated amount of lease payments remaining on these 54 leases at ~~June 28, 2020~~July 4, 2021 was approximately ~~$875.~~$859. In connection with the sale of the Company’s predecessor’s Mrs. Winner’s Chicken & Biscuit restaurant operations in 1989 and certain previous dispositions, subsidiaries of the Company also may remain secondarily liable for 1 real property lease. The total estimated amount of lease payments remaining on this lease at ~~June 28, 2020~~July 4, 2021 was approximately ~~$303.~~$215. There have been 0 payments by subsidiaries of the Company of such contingent liabilities in the history of the Company. Management believes the likelihood of any significant loss is remote.

The Company and its subsidiaries are subject to real property, personal property, business, franchise, income, withholding, unemployment, unclaimed property, sales and use taxes in various jurisdictions within the United States and are regularly under audit by tax authorities. This is believed to be common for the restaurant industry. Management believes the ultimate disposition of these matters will not have a material adverse effect on the consolidated financial position or results of operations of the Company.

The Company and its subsidiaries are defendants from time to time in various claims or legal proceedings arising in the ordinary course of business, including claims relating to workers’ compensation matters, labor-related claims, discrimination and similar matters, claims resulting from guest accidents while visiting a restaurant, claims relating to lease and contractual obligations, federal and state tax matters, and claims from guests or employees alleging illness, injury or other food quality, health or operational concerns, and injury or wrongful death under “dram shop” laws that allow a person to sue the Company and its subsidiaries based on any injury caused by an intoxicated person who was wrongfully served alcoholic beverages at one of the Company’s restaurants.

Management does not believe that any of the legal proceedings pending against the Company and its subsidiaries as of the date of this report will have a material adverse effect on the Company’s liquidity, consolidated results of operations or financial condition. The Company may incur liabilities, settle disputes, sustain judgments, or accrue expenses relating to legal proceedings in a particular fiscal year, which may adversely affect its consolidated results of operations, or on occasion, receive settlements that favorably affect its consolidated results of operations.

As of ~~June 28, 2020~~July 4, 2021 and ~~December 29, 2019,~~January 3, 2021, the fair value of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities approximated their carrying value due to their short-term nature. The carrying amounts of ~~long-term~~long‑term debt approximate fair value as interest rates and negotiated terms and conditions are consistent with current market rates because of the close proximity of recent refinancing transactions to the dates of these unaudited Condensed Consolidated Financial Statements (Level 2).

The Company utilizes the following fair value hierarchy, which prioritizes the inputs into valuation techniques used to measure fair value. Accordingly, the Company uses valuation techniques which maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value. The three levels of the hierarchy are as follows:

As discussed in Note ~~2(m)~~2(k) above, during the first quarter of fiscal year 2020, primarily due to the impacts of the COVID-19 pandemic, the Company determined that a triggering event had occurred requiring an impairment evaluation of its long-lived assets, indefinite‑lived intangible assets and goodwill. As a result of these analyses, the Company recorded a $689 impairment charge related to the long-lived assets at 1 restaurant location (Level 3) that management determined would be permanently closed ~~(the Lyndhurst Grill location)~~ and a $15,737 impairment charge related to the Company’s recorded goodwill. The impairment charges were measured based on the amounts by which the carrying values of the assets exceeded their relative fair values. NaN impairment was recorded for indefinite‑lived intangible assets as their fair values were determined to substantially exceed their carrying values. Fair values for goodwill and long-lived assets that were impaired during the first ~~six-months~~quarter of 2020 were estimated utilizing a market approach, and fair value estimates for indefinite-lived intangibles were determined based on an income approach. Fair value estimates utilized market participant assumptions reflecting all available information as of the impairment date. The fair value as of ~~the impairment date associated with~~goodwill was $0 (Level 3) and the impaired ~~long‑lived assets at~~restaurant location was sold during the ~~Company’s Lyndhurst Grill location is approximately $1,245 (Level 2), and the fair value~~third quarter of ~~goodwill is $0 (Level 3). No changes to these fair values were warranted at June 28,~~ 2020. There were 0 non-financial assets measured at fair value on a non‑recurring basis as of ~~December 29, 2019.~~July 4, 2021 or January 3, 2021.

The Company updated its impairment analyses for its long-lived and indefinite-lived intangible assets as of June 28, 2020 as the Company continued to be impacted by the COVID-19 pandemic during the second quarter. NaN additional impairment was recorded for long-lived or indefinite-lived intangible assets for the quarter ended June 28, 2020.

The ultimate severity and longevity of the COVID-19 pandemic is unknown, and, therefore, it is possible that additional impairments could be identified in future periods, and such amounts could be material.

The following tables present the Company’s financial assets and liabilities measured at fair value on a recurring basis as of the dates indicated:

	June 28, 2020						July 4, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents *	$	76	$	-	$	-	$	110	$	-	$	-
U.S. government obligations *		202		-		-		189		-		-
Corporate bonds *		2,344		-		-		2,226		-		-
Mutual and money market funds **		1,014		-		-		1,672		-		-
Cash surrender value - life insurance *		-		2,261		-
Total	$	3,636	$	2,261	$	-	$	4,197	$	-	$	-

	December 29, 2019						January 3, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents *	$	71	$	-	$	-	$	81	$	-	$	-
U.S. government obligations *		300		-		-		276		-		-
Corporate bonds *		2,195		-		-		2,241		-		-
Mutual and money market funds **		833		-		-		1,222		-		-
Cash surrender value - life insurance *		-		2,253		-
Total	$	3,399	$	2,253	$	-	$	3,820	$	-	$	-

* - As held in the Trust (as defined below). ** - As held in the 409a Trust (as defined below).
* - As held in the Trust (as defined below).
** - As held in the 409a Trust (as defined below).

Cash and cash equivalents are classified as Level 1 of the fair value hierarchy as they represent cash held in a rabbi trust established under a retirement benefit arrangement with certain of ~~our~~the Company’s current and former officers (the “Trust”). Cash held in the Trust is invested through an overnight repurchase agreement the investments of which may include U.S. Treasury securities, such as bonds or Treasury bills, and other agencies of the U.S. government. Such investments are valued using quoted market prices in active markets.

U.S. government obligations held in the Trust include U.S. Treasury Bonds. These bonds as well as the corporate bonds listed above are considered to be trading securities and are classified as Level 1 of the fair value hierarchy given their readily available quoted prices in active markets.

At ~~June 28, 2020~~July 4, 2021 and ~~December 29, 2019,~~ January 3, 2021, the Company held investments in mutual and money market funds classified as trading securities that were also held in a rabbi trust ~~as of June 28, 2020~~ (the “409a Trust”) to support its future obligations to participants of its nonqualified deferred compensation plan, which are carried at fair value based on quoted market prices in active markets for identical assets (Level 1).

Cash surrender value - life insurance is classified as Level 2 in the fair value hierarchy. The value of each policy was determined by MassMutual Financial Group, an A-rated insurance company, which provides the value of these policies to the Company on a regular basis.

There were no transfers between the levels listed above during either of the reporting periods.

Unrealized gains or losses on investments held in either the Trust or the 409a Trust are presented as a component of “Other, net” on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~. The assets of both the Trust and the 409a Trust disclosed above are presented as a component of “Other assets” on the Condensed Consolidated Balance Sheets.

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU No. 2016-13”). ASU No. 2016-13 was issued to update the methodology used to measure current expected credit losses (“CECL”). The update applies

to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. ASU No. 2016-13 must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings in the period of adoption. The effective date relative to smaller reporting companies is for fiscal years beginning after December 15, 2022 and interim periods within those fiscal years. Early adoption is permitted. The Company does not expect the adoption of ASU No. 2016-13 to have a material impact on its unaudited Condensed Consolidated Financial Statements and related disclosures.

~~In January 2017, the FASB issued ASU No. 2017-04,~~ ~~Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~ (“ASU No. 2017-04”). This update simplifies the subsequent measurement of goodwill by eliminating the second step of the two-step quantitative goodwill impairment test. An entity will no longer perform a hypothetical purchase price allocation to measure goodwill impairment. Instead, impairment will be measured at the amount by which the carrying value exceeds the fair value of a reporting unit, not to exceed the carrying value of the reporting unit goodwill. The option remains for an entity to perform a qualitative assessment of a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 requires prospective adoption and is effective commencing in fiscal years beginning after December 15, 2022, with early adoption permitted. The Company adopted this guidance at the beginning of fiscal year 2020, which it followed in assessing goodwill for impairment as of March 29, 2020 as discussed in Note 2(m) above.13

~~Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement~~ (“ASU No. 2018-13”). This update eliminates, modifies and adds a number of disclosure requirements related to fair value measurements in connection with the FASB’s disclosure framework project, the objective of which is to improve the effectiveness of disclosures in the notes to financial statements. ASU No. 2018-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those annual periods, with early adoption permitted. The Company adopted this guidance at the beginning of fiscal year 2020, and it did not have a significant impact on its unaudited Condensed Consolidated Financial Statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”). ASU No. 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic ~~740.~~740, amending the interim-period accounting for enacted changes in tax law and amending the requirements related to the accounting for “hybrid” tax regimes. This standard is effective for annual periods beginning after December 15, 2020, including interim periods within those annual periods, with early adoption permitted. The Company ~~is currently assessing~~adopted this guidance at the ~~potential~~beginning of fiscal year 2021, and it did not have a significant impact ~~of ASU No. 2019-12~~ on its unaudited Condensed Consolidated Financial Statements and related disclosures.

In ~~March 2020,~~January 2021, the FASB issued ASU ~~No.~~2021-01, Reference Rate Reform (Topic 848): Scope, which clarified the guidance issued in March 2020, ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ~~(“ASU No. 2020-04”)~~. ~~This update provides~~These updates provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments ~~in ASU No. 2020-04~~ apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. An entity may elect to apply the amendments for contract modifications by the impacted ~~Accounting Standards Codification (“ASC”)~~ASC topic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued through December 31, 2022. Once elected for an ASC topic, the amendments ~~in ASU No. 2020-04~~ must be applied prospectively for all eligible contract modifications for that ASC topic. The Company continues to assess the potential impact of ~~ASU No. 2020-04~~the amendments on its unaudited Condensed Consolidated Financial Statements and related ~~disclosures.~~

~~In April 2020, the staff~~disclosures and has not adopted any of the ~~FASB issued a question-and-answer document that stated that entities may elect to account for lease concessions related to~~transition relief available under the ~~effects of the COVID-19 pandemic as though the rights and obligations for those concessions existed~~new guidance as of the commencement of the contract rather than as a lease modification. Lessees may make the election for any lessor-provided lease concession related to the impact of the COVID-19 pandemic as long as the concession does not result in a substantial increase in the rights of the lessor or in the obligations of the lessee. The Company has made such election. See Note 10 – Leases below for additional discussion regarding rent concessions granted during the second quarter of 2020. While the impact to the Company’s Condensed Consolidated Financial Statements and related disclosures for the second quarter of 2020 was not material, ~~the Company continues to have discussions and negotiations are ongoing with its landlords regarding future rent concessions which could become material.~~July 4, 2021.

On September 28, 2015, J. Alexander’s Holdings, LLC entered into a management consulting agreement (“Management Consulting Agreement”) with Black Knight, pursuant to which Black Knight provided corporate and strategic advisory services to J. Alexander’s

~~Holdings, LLC. On November 30, 2018 (“Termination Date”), the Company terminated the Management Consulting Agreement by entering into the Termination Agreement.~~

Under the Management Consulting Agreement, J. Alexander’s Holdings, LLC issued Black Knight 1,500,024 non-voting Class B Units and was required to pay Black Knight an annual fee equal to 3% of the Company’s Adjusted EBITDA for each fiscal year during the term of the Management Consulting Agreement and to reimburse Black Knight for its direct out-of-pocket costs incurred for management services provided to J. Alexander’s Holdings, LLC. Under the Management Consulting Agreement, “Adjusted EBITDA” meant the Company’s net income before interest expense, income tax (expense) benefit, depreciation and amortization, and adding asset impairment charges and restaurant closing costs, loss on disposals of fixed assets, transaction and integration costs, non-cash compensation, loss from discontinued operations, gain on debt extinguishment, pre-opening costs and certain unusual items. As a result of the Termination Agreement, in the first quarter of 2019, the Company paid approximately $705 to Black Knight which represented the pro-rata portion of its consulting fees earned during 2018 through the Termination Date. Additionally, the early termination of the Management Consulting Agreement by J. Alexander’s Holdings, LLC required the cash payment of $4,560 to Black Knight as a termination fee which the Company paid on January 31, 2019 using cash on hand.

Under the terms of the Termination Agreement, Black Knight had 90 days from the Termination Date to exercise its right to convert the value of the Class B units it was granted under the Management Consulting Agreement above the applicable hurdle rate to the Company’s common stock. Since Black Knight did not exercise its conversion rights within the 90-day period, the Class B Units were cancelled and forfeited for no consideration on February 28, 2019.

The following table presents the Company’s ~~revenues~~net sales disaggregated by ~~revenue~~ source for the periods presented:

	Quarter Ended				Six Months Ended				Quarter Ended				Six Months Ended
	June 28,		June 30,		June 28,		June 30,		July 4,		June 28,		July 4,		June 28,
	2020		2019		2020		2019		2021		2020		2021		2020
Restaurant	$	27,544	$	62,154	$	84,288	$	126,651	$	67,998	$	27,544	$	125,126	$	84,288
Gift card breakage		58		75		286		312		103		58		350		286
Net sales	$	27,602	$	62,229	$	84,574	$	126,963	$	68,101	$	27,602	$	125,476	$	84,574

The Company recognized revenue associated with gift cards redeemed by guests of ~~$379~~$865 and ~~$914~~$379 during the quarters ended July 4, 2021 and June 28, 2020, respectively, and ~~June 30, 2019, respectively,~~$1,924 and $1,813 ~~and $2,429~~ during the six-month periods ended July 4, 2021 and June 28, 2020 ~~and June 30, 2019,~~, respectively. Further, of the amounts that were redeemed during the six-month periods ended July 4, 2021 and June 28, 2020, $1,340 and ~~June 30, 2019,~~ $1,484, ~~and $1,842,~~ respectively, were recorded within unearned revenue at the beginning of each ~~of the~~ respective fiscal ~~years.~~year. Unearned revenue increased by ~~$412~~$847 and ~~$735~~$412 during the quarters ended July 4, 2021 and June 28, 2020, ~~and June 30, 2019,~~ respectively, and by ~~$953~~$1,418 and ~~$1,347~~$953 during the six-month periods ended July 4, 2021 and June 28, 2020 ~~and June 30, 2019,~~, respectively, as a result of gift cards sold.

As of July 4, 2021, the Company was party to 30 separate operating leases for real estate under which it currently operates its restaurants and has its corporate office space. The Company ~~adopted ASC Topic 842,~~ ~~Leases~~, as of the first day of fiscal year 2019, December 31, 2018, electing the optional transition method to apply the standard as of the effective date. Accordingly, the Company recorded a cumulative-effect adjustment to opening retained earnings for the impairment of an abandoned right-of-use (“ROU”) assetcommenced operations at ~~the effective date for a restaurant that was previously impaired and the remaining lease payments were accounted for under ASC Topic 420,~~ ~~Exit or Disposal Obligations, as shown~~its new Redlands Grill location in ~~the Condensed Consolidated Statement of Shareholders’ Equity.~~San Antonio, Texas, on March 29, 2021. Additionally, the adoption of Topic 842 had a material impact on the Company’s assets and liabilities as a result of the recognition of operating lease ROU assets and lease liabilities on its Condensed Consolidated Balance Sheets. The adoption of Topic 842 did not have a material effect on the Company’s Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income and Condensed Consolidated Statements of Cash Flows.

~~During the first half of 2020,~~ the Company took possession of ~~the~~a new restaurant ~~location in San Antonio, Texas,~~property during the ~~construction~~first half of 2021, which is ~~scheduled to be completed during~~currently under construction in Madison, Alabama, and the ~~fourth quarter of 2020. However, due to the current restrictions associated with the COVID-19 pandemic in Texas, coupled with the lead time associated with preparing a new~~J. Alexander’s location ~~for opening, the Company has scheduled this restaurant~~is slated to open in early 2022.As a result, the ~~first quarter of fiscal year 2021. The~~ Company recorded a ROU asset in exchange for a new lease liability of ~~$4,515.~~$2,683 in the first half of 2021. Further, in the first half of 2021, the Company entered into a lease for a new restaurant location in Madison, Alabama, which it anticipates will also open during fiscal year 2021 but for which it has not yet taken possession. Each of these leases include a lease term, including option periods, of 30 years.

The Company modified an existing lease related to its Stoney River Annapolis location during the first quarter of 2020, which included changes to the length of the lease’s option periods. However, the total number of years between the two option periods remained the same, and the modification did not extend the total lease period beyond that which was agreed upon in the original lease. While base rental payments remained unchanged, the breakpoint and percentages applicable to percentage rental payments were modified should the restaurant’s sales exceed such thresholds. The amendment also providedtermination agreement for a lease ~~incentive payment of $527 contingent upon certain conditions~~to which ~~were met by the Company. The~~it remained a party for a previously closed location. This lease ~~incentive payment~~ was ~~recorded~~originally set to expire in August 2023, and, as ~~a reduction to the ROU asset during the first quarter of 2020 and received in the second quarter of 2020. As~~ a result of the ~~modification,~~termination agreement, the Company derecognized the remaining liability associated with this lease totaling $1,196. The Company is also party to 1 equipment operating lease.

The Company modified certain of its leases during fiscal year 2020 for matters unrelated to the COVID-19 pandemic and updated the ROU assets, lease liabilities and related incremental borrowing ~~rate associated with the lease~~rates as ~~of the date of the modification.~~required.

Additionally, in the second quarter of 2020, the Company modified the lease for its Redlands Grill location in Nashville to extend the upcoming renewal term of the lease to 10 years as well as adjust the rent payments that would have been made under the original lease agreement. Pursuant to this modification, the Company also adjusted the incremental borrowing rate associated with the lease.

~~In the second quarter of~~During fiscal year 2020, the Company was granted ~~COVID-19-related~~COVID-19 related rent concessions for ~~one~~certain of its restaurant locations and for its corporate office. The Company elected to account for lease concessions resulting directly from COVID-19 as though the enforceable rights and obligations to the concessions existed in the ~~form of rent abatement. Because~~respective agreements at lease inception and did not account for the

concessions as lease ~~term of this location was also extended,~~modifications, unless the ~~Company has elected to treat this~~ concession asresulted in a ~~lease modification, including updating~~substantial increase in the ~~incremental borrowing rate,~~Company’s obligations, taking into consideration the ~~recent~~ guidance issued by the FASB in its Staff ~~question-and-answer~~Question-and-Answer document regarding rent concessions related to the effects of the COVID-19 pandemic. ~~The Company continues to have discussions and negotiations are ongoing with its landlords regarding future rent concessions.~~

The cash paid during the ~~second quarter and~~ first half of ~~2020~~2021 for amounts included in the measurement of lease liabilities totaled ~~$2,208 and $4,427, respectively.~~$5,458.

Maturities of lease liabilities by fiscal year for the Company’s operating leases are as follows:

	June 28,		July 4,
	2020		2021
2020 ⁽¹⁾	$	4,454
2021		9,536
2021 ⁽¹⁾			$	4,850
2022		9,708		9,391
2023		9,744		9,560
2024		9,402		9,547
2025 and thereafter		94,946
2025				8,863
2026 and thereafter				92,958
Total minimum lease payments		137,790		135,169
Less: Imputed interest ⁽²⁾		53,130		51,209
Present value of lease liabilities	$	84,660	$	83,960

(2) Amount necessary to reduce net minimum lease payments to present value calculated using ~~our~~the Company’s incremental borrowing rates, which are consistent with the lease terms at adoption date (for those leases in existence as of the adoption date of Topic 842) or lease inception or modification date (for those leases entered into or modified after the adoption date).

On July 2, 2021, the Company announced that it entered into a merger agreement under which SPB Hospitality will acquire the Company in an all-cash transaction valued at approximately $220,000. If the merger is consummated, the Company’s shareholders will receive $14.00 in cash per share of common stock of the Company.

Certain of the Company’s officers, directors and shareholders including Newport Global Opportunities Fund I-A LP and Ancora Holdings LLC, holding, in the aggregate, as of July 1, 2021, over 20% of the outstanding shares of Company common stock, entered into voting agreements with SPB Hospitality pursuant to which they agreed, among other things, to vote their respective shares of Company common stock in favor of the merger.

The merger was approved by the Company’s Board of Directors following a review of a wide range of strategic alternatives, which was first announced in August 2019, and continued in 2020 (until the onset of the COVID-19 pandemic) and 2021. The merger is expected to be completed in the fourth quarter of 2021, subject to approval by the Company’s shareholders, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary closing conditions.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

J. Alexander’s Holdings, Inc. (also referred to herein as the “Company”, “we”, “us” or “our”) cautions that certain information contained or incorporated by reference in this report and our other filings with the United States Securities and Exchange Commission (the “SEC”), in our press releases and in statements made by or with the approval of authorized personnel is forward-looking information that involves risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements contained herein. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. Forward-looking statements are typically identified by words or phrases such as “may,” “will,” “would,” “can,” “should,” “likely,” “anticipate,” “potential,” “estimate,” “pro forma,” “continue,” “expect,” “project,” “intend,” “seek,” “plan,” “believe,” “target,” “outlook,” “forecast,” the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Forward-looking statements include all statements that do not relate solely to historical or current facts, including statements regarding our expectations, intentions or strategies and regarding the future, including the impact of the novel coronavirus (“COVID-19”) pandemic ~~reopening~~(including variant strains of COVID-19) on our operations, operating the Company’s restaurants at increased capacities, consumer demand, the Company’s sales, off-premise sales, cash ~~burn rate,~~position, cost containment efforts, liquidity, input costs, results of operations, new restaurant openings and the ~~Company’s plans to continue its review of strategic alternatives.~~proposed merger (the “Merger”) with SPB Hospitality LLC (“SPB Hospitality”). We expressly disclaim any intent or obligation to update these forward-looking statements. Other risks, uncertainties and factors which could affect actual results include, but are not limited to:

These factors should not be construed as exhaustive and should be read with the other cautionary statements in the ~~2019~~2020 Annual Report and this report. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results including the economic impact of the ongoing COVID-19 pandemic. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business” and elsewhere in the ~~2019~~2020 Annual Report and in subsequent ~~filings and in Part II, Item 1A. Risk Factors of this report.~~filings. All forward-looking statements are expressly qualified in their entirety by these cautionary statements. You should evaluate all forward-looking statements made in this Form 10-Q in the context of these risks and uncertainties. Forward-looking information provided by the Company pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 should be evaluated in the context of these factors. We expressly disclaim any intent or obligation to update these forward-looking statements.

Dollar amounts within this Management’s Discussion and Analysis of Financial Condition and Results of Operations are presented in thousands except for average weekly sales per restaurant, average weekly same store sales per restaurant and average check per guest.

The Company, as the sole managing member of its subsidiary J. Alexander’s Holdings, LLC, owns and operates complementary upscale dining restaurants including: J. Alexander’s, Redlands Grill, Overland Park Grill, Merus Grill and Stoney River Steakhouse and Grill (“Stoney River”). For ~~more than 29~~30 years, J. Alexander’s guests have enjoyed a contemporary American menu, polished service and an attractive ambiance. In February 2013, our team brought our quality and professionalism to the steakhouse category with the addition of the Stoney River concept. Stoney River provides “white tablecloth” service and food quality in a casual atmosphere at a competitive price. Our Redlands Grill concept offers guests a different version of our contemporary American menu and a distinct architectural design and feel. In 2018, we successfully converted one of our previous J. Alexander’s locations in Kansas to the Overland Park Grill. In 2019, we opened Merus Grill in Houston, ~~Texas.~~Texas, and, in March 2021, we opened a second location in San Antonio, Texas, under the Redlands Grill concept. Each of these locations offers a contemporary American menu. As of August 17, 2021, we operate 47 restaurants across 16 states. Additionally, we plan to open a J. Alexander’s restaurant in Madison, Alabama, in the first quarter of 2022, which is currently under construction.

During the second quarter of 2020, the Company made the decision not to reopen the Lyndhurst Grill location in Cleveland, Ohio, after a review of its projected and historical financial performance. This location was required to be closed in mid-March 2020 due to COVID-19 related traffic limitations unique to that specific restaurant and remained closed. The Company completed the sale of the remaining long-lived assets at this location, including the land and building, during the third quarter of 2020.

Our business plan has evolved over time to include a collection of restaurants dedicated to providing guests with what we believe to be ~~the highest~~high quality food and beverages, high levels of professional service and a comfortable ambiance. By offering multiple restaurant concepts and utilizing unique non-standardized architecture and specialized menus, we believe we are positioned to continue to scale and grow our overall restaurant business in an efficient manner in urban and affluent suburban areas. We want each of our restaurants to be perceived by our guests as a locally managed, stand-alone dining experience. This differentiation permits us to successfully operate multiple restaurants in the same geographic market. If this strategy continues to prove successful, we may expand beyond our ~~current~~currently existing concepts in the future. Additionally, by further developing our carry-out program in each of our restaurant locations with the same attention to detail taken in our dining rooms, we believe we can both increase frequency of usage by our existing loyal guests and reach a wider array of guests who may prefer this level of service when selecting their dining options. While each restaurant concept operates under a unique trade name, each of our restaurants is identified as a “J. Alexander’s Holdings Restaurant.”

We believe our restaurants deliver on our guests’ desire for freshly-prepared, high-quality food and exemplary service in a restaurant with architecture and design that varies from location to location. ~~Through our combination with Stoney River and opening new restaurants, we have grown from 33 restaurants across 13 states in 2012 to 46 restaurants across 16 states as of August 6, 2020.~~ Our financial performance has allowed us to invest significant amounts of capital to drive growth through the continuous improvement of existing locations, the development of plans to open new restaurants, and the hiring of personnel to support our growth plans.

We plan to execute the following strategies to continue to enhance the awareness of our restaurants, grow our sales and improve our profitability by:

The most recent restaurant openings include a Merus Grill in Houston, Texas, during November 2019 and a Stoney River restaurant in Troy, Michigan, during October 2018. Additionally, the Company announced the signing of two leases to open a new Redlands Grill in San Antonio, Texas, and a new J. Alexander’s restaurant in Madison, Alabama. The Company is currently constructing the new Redlands Grill which is scheduled to be completed before the holiday season of 2020. However, due to the current restrictions associated with the COVID-19 pandemic in Texas, coupled with the lead time associated with preparing a new location for opening, the Company has scheduled this restaurant to open in the first quarter of fiscal year 2021. The J. Alexander’s restaurant in Madison, Alabama, is also slated to begin operations in 2021. The opening of the Madison, Alabama, location has been delayed from its previously anticipated opening in 2020 due to the Company’s decision to limit capital expenditures in response to COVID-19. Our restaurants often have a slower ramp up than many other restaurant groups due to our reliance on repeat business from a relatively small group of guests within each market. Having opened seven restaurants since the beginning of 2016, all of which are at different stages of maturity, our near-term focus will be on building guest traffic and sales at certain of the newer locations while we continue to evaluate promising opportunities for new restaurant development as well as react to the impact of the COVID-19 pandemic on our liquidity and restaurant performance in the near‑term.

The locations ~~that have been transitioned from a J. Alexander’s restaurant to~~operating as a Redlands Grill, Lyndhurst Grill (now permanently closed) or, Overland Park Grill ~~restaurant~~ or ~~opened as a~~ Merus Grill restaurant have been included inwith the J. Alexander’s restaurants’ results of operations, average weekly same store sales calculations and all other applicable disclosures, and, with the J. Alexander’s restaurants, are collectively referred to herein as “J. Alexander’s / Grill” restaurants.

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic and the United States declared it a national public health emergency. Since March 2020, we have experienced substantial disruptions in our operations including, but not limited to, temporary restaurant closings, reopening of restaurants at limited capacity, suggested and mandated social distancing and stay-at-home orders, limited staffing and to-go only service in our restaurants. ~~Despite~~Throughout the ~~fact that all~~first half of ~~our locations’~~2021, we were impacted by capacity restrictions at varying levels and only reached 100% dining ~~rooms have been allowed to reopen during~~room capacity in the final weeks of the second quarter. While vaccines are now widely available across the country resulting in further easing of restrictions, there are widespread increases in diagnosed cases reported since the end of the second quarter largely due to the ~~Company continues~~spread of COVID-19 variants. There can be no assurance that state or local authorities will continue to ~~be impacted by governmental orders that restrict~~allow dining rooms to operate at full capacity in ~~its restaurants.~~the near-term should existing or future variants of COVID-19 result in increased transmission and diagnosis rates. Each of these factors ~~have~~has limited our ability to generate revenue, impacting results from operations and cash flows during fiscal 2020 and into the first half of ~~2020,~~2021, and may continue to do so for an extended period of time depending on the length of the COVID-19 pandemic and how significantly it affects the economy. There is significant uncertainty concerning consumer behavior, including guests’ propensity to spend disposable income or changes in consumer habits due to fear of contracting ~~the virus~~COVID-19 in public or as a result of ~~unemployment. Governmental mandates required the Company to keep its dining rooms closed for a significant portion of the second quarter with reopening dates varying by state~~unemployment or local municipality. Further, we expect that most, if not all, of our restaurants will operate on a limited-capacity basis for the balance of the third quarter in response to orders issued by government officials in an effort to limit the spread of COVID-19.reduced income. The Company is also closely monitoring the impact of the COVID-19 pandemic on all aspects of its business, including on guests, existing and potential employees, suppliers, vendors, landlords, distribution channels and other business partners.

As a result of factors noted above, the Company has taken steps to modify its operations, where necessary, ~~for a limited period of time,~~ including ~~pivoting to~~implementing a carry-out ~~model as a means of generating revenue~~program and ~~cash flow~~online ordering platform and reopening dining rooms at a limited capacity in compliance with

state and local government guidelines. We have made employee and guest health and safety our first priority as we serve our guests during these uncertain times. ~~We have provided personal protective equipment, such as masks, gloves and hand sanitizer~~The Company intends to ~~our team members, and we are checking employee temperatures daily. We are also observing social~~

distancing requirements and routinely sanitizing high-touch surface areas in our restaurants. We have sought to develop menus that are friendly to an off-premise model providing guests with appetizers, salads, entrées, sides, wine, family meal kits that can be prepared at home and “butcher shop” style beef offerings at select restaurants. We have also implemented an online ordering platform to allow for ease of ordering and increase off-premises sales. We have implemented contactless menus in all of our dining rooms and will be piloting contactless payments at certain locations in 2020. Restaurant and corporate management have evaluated, and continue to ~~evaluate, ways~~actively monitor the evolving situation and may take further actions that alter its business operations that may be required by federal, state or local authorities or that it determines are in the best interests of its employees, guests and shareholders. While we do not know the full future impact COVID-19 will have on our business, we expect to ~~curtail spending including an ongoing review~~see a continued impact on our results of operations, ~~to maximize efficiency, adjusting restaurant-level labor~~cash flows and reducing purchases of inventory to align with new levels of demand, limiting discretionary operating expenses including business travel, suspending all non-essential capital expenditures, and negotiating the deferral of new restaurant capital expenditures with contractors in addition to certain rent, insurance, tax and debt payments where possible. We have also eliminated certain positionsliquidity during at the Company’s corporate office during the second quarter of 2020. During the first quarter of 2020, we made the difficult decision to furlough restaurant employees that were not able to assist with the Company’s carry-out program, but have brought some of these employees back to their restaurant during the reopening process atleast a volume warranted by the allowed dine-in capacity, as applicable, until normal staffing levels can resume. Additionally, the Company has held, and will continue to engage in, discussions with its lender to further enhance its liquidity including the full draw down on its available lines of credit in March 2020 as well as negotiating for modifications of these credit facilities during the second quarter of 2020 in order to make additional funds available for operations. See the discussion contained in “~~Liquidity and Capital Resources – Credit Facility” below for additional information. Similarly, we have been in discussions with many of our landlords to pursue rent concessions for the remainder~~portion of the ~~fiscal year in order to defer or abate rent payments in order to conserve cash.~~ rest of 2021. The remainder of Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses a number of ways our business has been impacted by COVID-19.

Same Store Sales. We include a restaurant in the same store restaurant group starting in the first full accounting period following the 18^th month of operations. Our same store restaurant base consisted of 4546 restaurants at ~~June 28, 2020.~~July 4, 2021. Changes in same store restaurant sales reflect changes in sales for the same store group of restaurants over a specified period of time. This measure highlights the performance of existing restaurants, as the impact of new restaurant openings and closed locations is excluded.

Measuring our same store restaurant sales allows us to evaluate the performance of our existing restaurant base. Various factors impact same store sales including:

Average Weekly Sales. Average weekly sales per restaurant is computed by dividing total restaurant sales for the period by the total number of days all restaurants were open for the period to obtain a daily sales average. The daily sales average is then multiplied by seven to arrive at average weekly sales per restaurant. Days on which restaurants are closed for business for any reason other than scheduled closures on Thanksgiving and Christmas are excluded from this calculation. Revenue associated with reduction in liabilities for gift cards which are not redeemed, commonly referred to as gift card breakage, is not included in the calculation of average weekly sales per restaurant.

Average Weekly Same Store Sales. Average weekly same store sales per restaurant is computed by dividing total restaurant same store sales for the period by the total number of days all same store restaurants were open for the period to obtain a daily sales average. The daily same store sales average is then multiplied by seven to arrive at average weekly same store sales per restaurant. Days on which restaurants are closed for business for any reason other than scheduled closures on Thanksgiving and Christmas are excluded from this calculation. Sales and sales days used in this calculation include only those for restaurants in operation at the end of the period which have been open for more than 18 months. Gift card breakage is not included in the calculation of average weekly same store sales per restaurant.

Average Check. Average check is calculated by dividing total restaurant sales by guest counts for a given time period. Total restaurant sales include food, alcohol and beverage sales. Average check is influenced by menu prices and menu mix. Management uses this indicator to analyze trends in guests’ preferences, the effectiveness of menu changes and price increases on per guest expenditures.

Average Unit Volume. Average unit volume consists of the average sales of our restaurants over a certain period of time. This measure is calculated by multiplying average weekly sales by the relevant number of weeks for the period presented. This indicator assists management in measuring changes in guest traffic, guest spending patterns, pricing and development of our concepts.

Guest Counts. Guest counts are measured by the number of ~~entrées ordered at our restaurants~~entrees sold either for in-restaurant dining or for off-premise dining over a given time period. For purposes of guest count calculations, family pack meals sales are counted as an average of three guests.

Net Sales. Net sales consist primarily of food and beverage sales at our restaurants, net of any discounts, such as management meals and employee meals, associated with each sale. Net sales are directly influenced by the number of operating weeks in the relevant period, the number of restaurants we operate and same store sales growth. Gift card breakage is also included in net sales.

~~Cost of Sales.~~ ~~Cost of sales is comprised primarily of food~~Food and beverage ~~expenses~~costs. Food and isbeverage costs are presented net of earned vendor rebates. Food and beverage ~~expenses~~costs are generally influenced by the input cost of food and beverage items, distribution costs and menu mix. The components of ~~cost of sales~~food and beverage costs are variable in nature, increase with ~~revenues,~~sales, are subject to increases or decreases based on fluctuations in commodity costs, including beef prices, and depend in part on the controls we have in place to manage ~~cost of sales~~costs at our restaurants.

Restaurant Labor and Related Costs. Restaurant labor and related costs includes restaurant management salaries, hourly staff payroll and other payroll-related expenses, including management bonus expenses, vacation pay, payroll taxes, emergency sick leave pay, fringe benefits and health insurance expenses.

Depreciation and Amortization. Depreciation and amortization principally includes depreciation on restaurant fixed assets, including equipment and leasehold improvements, and amortization of certain intangible assets for restaurants. We depreciate capitalized leasehold improvements over the shorter of the total expected lease term or their estimated useful life. As we open additional restaurants, depreciation and amortization is expected to increase as a result of our increased capital expenditures.

Other Operating Expenses. Other operating expenses includes china and supplies, laundry and linens, repairs and maintenance, credit card fees, rent, property taxes, insurance, utilities, operating supplies and other restaurant-level related operating expenses.

Pre-opening Expense. Pre-opening expense consists of expenses incurred prior to opening a new restaurant and ~~include~~includes principally manager salaries and relocation costs, payroll and related costs for training new employees, travel and lodging expenses for employees who assist with training new employees, and the cost of food and other expenses associated with practice of food preparation and service activities. Pre-opening expense also includes rent expense for leased properties for the period of time between taking control of the property and the opening of the restaurant.

General and Administrative Expenses. General and administrative expenses consist of costs related to certain corporate and administrative functions that support development and restaurant operations and provide an infrastructure to support future company growth. These expenses reflect management, supervisory and staff salaries and employee benefits, non-cash share-based ~~compensation.~~compensation, travel, information systems, training, corporate rent, depreciation of corporate assets, professional and consulting fees, technology and market research. These expenses ~~have increased as a result of~~include costs associated with being a public company, and we believe such expenses will ~~continue to~~ increase ~~related~~over time in response to our anticipated growth. ~~However, as~~As we are able to leverage these investments made in our people and systems, we expect these expenses to decrease as a percentage of net sales over time.

Interest Expense. Interest expense consists primarily of interest on our outstanding indebtedness. During periods of restaurant construction, interest expense is capitalized at a rate commensurate with the cost incurred to construct the restaurant. Our debt issuance costs are recorded at cost and are amortized over the lives of the related debt.

Income Tax (Expense) Benefit. This represents tax expense or benefit related to the taxable income (loss) at the federal, state and local level.

Discontinued Operations. ~~We remain~~During a portion of fiscal 2021, we remained a party to a lease for a restaurant that closed in 2013 which we determined met the criteria for classification as discontinued operations. Expenses related to continuing obligations under this lease agreement are recognized as discontinued operations, net. In March 2021, a termination agreement related to this lease was executed resulting in the recognition of a gain for the first half of 2021. The Company does not expect to incur any significant expense related to this property going forward.

Our business is subject to seasonal fluctuations. Historically, the percentage of our annual revenues earned during the first and fourth quarters has typically been higher due, in part, to increased gift card redemptions, guest traffic and private dining during the year-end holiday season. In addition, we operate on a 52-week or 53-week fiscal year that ends on the Sunday closest to December 31^st. Each quarterly period includes 13 weeks of operations, except for a 53-week year when the fourth quarter has 14 weeks of operations. Fiscal year ~~2020~~2021 is a ~~53-week~~52-week year. As many of our operating expenses have a fixed component, our operating income and operating income margins have historically varied from quarter to quarter. Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter, or for the full fiscal year.

The following tables set forth, for the periods indicated, (i) the items in the Company’s Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income,~~, including our results expressed as a percentage of net sales, and (ii) other selected operating data:

	Quarter Ended									Six Months Ended									Quarter Ended									Six Months Ended
	June 28,			June 30,			Percent Change			June 28,			June 30,			Percent Change			July 4,			June 28,			Percent Change			July 4,			June 28,			Percent Change
(Unaudited)	2020			2019			2020 vs. 2019			2020			2019			2020 vs. 2019			2021			2020			2021 vs. 2020			2021			2020			2021 vs. 2020

Net sales	$	27,602		$	62,229			(55.6)	%	$	84,574		$	126,963			(33.4	)%	$	68,101		$	27,602			146.7	%	$	125,476		$	84,574			48.4	%
Costs and expenses:
Cost of sales		10,471			19,803			(47.1	)		29,038			40,331			(28.0	)
Food and beverage costs																				22,899			10,471			118.7			39,986			29,038			37.7
Restaurant labor and related costs		12,554			19,157			(34.5	)		32,892			38,707			(15.0	)		19,046			12,554			51.7			35,721			32,892			8.6
Depreciation and amortization of restaurant property and equipment		3,060			2,950			3.7			6,154			5,879			4.7			2,988			3,060			(2.4	)		5,871			6,154			(4.6	)
Other operating expenses		8,536			12,428			(31.3	)		20,490			25,112			(18.4	)		13,479			8,536			57.9			25,201			20,490			23.0
Total restaurant operating expenses		34,621			54,338			(36.3	)		88,574			110,029			(19.5	)		58,412			34,621			68.7			106,779			88,574			20.6
Transaction, contested proxy and other related expenses		(66	)		651			(110.1	)		623			651			(4.3	)
Transaction and other related expenses																				1,888			(66	)		NCM			1,934			623			210.4
General and administrative expenses		4,095			4,772			(14.2	)		8,835			9,528			(7.3	)		5,442			4,095			32.9			10,595			8,835			19.9
Goodwill impairment		-			-			-			15,737			-			100.0			-			-			-			-			15,737			(100.0)
Long-lived asset impairment charges and restaurant closing costs		178			-			-			867			-			100.0			(1	)		178			100.6			2			867			(99.8	)
Pre-opening expense		72			125			(42.4	)		91			146			(37.7	)
Pre-opening expenses																				71			72			(1.4	)		516			91			NCM
Total operating expenses		38,900			59,886			(35.0	)		114,727			120,354			(4.7	)		65,812			38,900			69.2			119,826			114,727			4.4
Operating (loss) income		(11,298	)		2,343			NCM			(30,153	)		6,609			NCM
Operating income (loss)																				2,289			(11,298	)		NCM			5,650			(30,153	)		NCM
Other (expense) income:
Interest expense		(189	)		(169	)		11.8			(305	)		(355	)		(14.1	)		(141	)		(189	)		(25.4	)		(294	)		(305	)		(3.6	)
Other, net		135			70			92.9			127			136			(6.6	)		84			135			(37.8	)		38			127			(70.1	)
Total other expense		(54	)		(99	)		(45.5	)		(178	)		(219	)		(18.7	)		(57	)		(54	)		5.6			(256	)		(178	)		43.8
(Loss) income from continuing operations before income taxes		(11,352	)		2,244			NCM			(30,331	)		6,390			NCM
Income (loss) from continuing operations before income taxes																				2,232			(11,352	)		NCM			5,394			(30,331	)		NCM
Income tax benefit (expense)		4,419			(18	)		NCM			5,806			(257	)		NCM			24			4,419			(99.5	)		(343	)		5,806			(105.9	)
Loss from discontinued operations, net		(55	)		(58	)		(5.2	)		(107	)		(117	)		(8.5	)
Net (loss) income	$	(6,988	)	$	2,168			NCM		$	(24,632	)	$	6,016			NCM
(Loss) income from discontinued operations, net																				(3	)		(55	)		94.5			592			(107	)	��	NCM
Net income (loss)																			$	2,253		$	(6,988	)		NCM		$	5,643		$	(24,632	)		NCM

As a Percentage of Net Sales	Quarter Ended						Six Months Ended						Quarter Ended						Six Months Ended
	June 28,			June 30,			June 28,			June 30,			July 4,			June 28,			July 4,			June 28,
	2020			2019			2020			2019			2021			2020			2021			2020
Net sales		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Costs and expenses:
Cost of sales		37.9			31.8			34.3			31.8
Food and beverage costs														33.6			37.9			31.9			34.3
Restaurant labor and related costs		45.5			30.8			38.9			30.5			28.0			45.5			28.5			38.9
Depreciation and amortization of restaurant property and equipment		11.1			4.7			7.3			4.6			4.4			11.1			4.7			7.3
Other operating expenses		30.9			20.0			24.2			19.8			19.8			30.9			20.1			24.2
Total restaurant operating expenses		125.4			87.3			104.7			86.7			85.8			125.4			85.1			104.7
Transaction, contested proxy and other related expenses		(0.2	)		1.0			0.7			0.5
Transaction and other related expenses														2.8			(0.2	)		1.5			0.7
General and administrative expenses		14.8			7.7			10.4			7.5			8.0			14.8			8.4			10.4
Goodwill impairment		-			-			18.6			-			-			-			-			18.6
Long-lived asset impairment charges and restaurant closing costs		0.6			-			1.0			-			(0.0	)		0.6			0.0			1.0
Pre-opening expense		0.3			0.2			0.1			0.1
Pre-opening expenses														0.1			0.3			0.4			0.1
Total operating expenses		140.9			96.2			135.7			94.8			96.6			140.9			95.5			135.7
Operating (loss) income		(40.9	)		3.8			(35.7	)		5.2
Operating income (loss)														3.4			(40.9	)		4.5			(35.7	)
Other income (expense):
Interest expense		(0.7	)		(0.3	)		(0.4	)		(0.3	)		(0.2	)		(0.7	)		(0.2	)		(0.4	)
Other, net		0.5			0.1			0.2			0.1			0.1			0.5			0.0			0.2
Total other expense		(0.2	)		(0.2	)		(0.2	)		(0.2	)		(0.1	)		(0.2	)		(0.2	)		(0.2	)
(Loss) income from continuing operations before income taxes		(41.1	)		3.6			(35.9	)		5.0
Income (loss) from continuing operations before income taxes														3.3			(41.1	)		4.3			(35.9	)
Income tax benefit (expense)		16.0			(0.0	)		6.9			(0.2	)		0.0			16.0			(0.3	)		6.9
Loss from discontinued operations, net		(0.2	)		(0.1	)		(0.1	)		(0.1	)
Net (loss) income		(25.3	)%		3.5	%		(29.1	)%		4.7	%
(Loss) income from discontinued operations, net														(0.0	)		(0.2	)		0.5			(0.1	)
Net income (loss)														3.3	%		(25.3	)%		4.5	%		(29.1	)%

Note: Certain percentage totals do not sum due to rounding.


Restaurants open at end of period:
J. Alexander's / Grill Restaurants		33			33			33			33			34			33			34			33
Stoney River Steakhouse and Grill		13			13			13			13			13			13			13			13

Average weekly sales per restaurant:
J. Alexander's / Grill Restaurants	$	50,800		$	113,600		$	76,500		$	115,400		$	120,200		$	51,000		$	112,800		$	76,600
Percent change		(55.3	)%					(33.7	)%					135.7	%					47.3	%
Stoney River Steakhouse and Grill	$	34,300		$	79,500		$	53,400		$	82,400		$	88,000		$	34,300		$	81,700		$	53,400
Percent change		(56.9	)%					(35.2	)%					156.6	%					53.0	%

Average weekly same store sales per restaurant:
J. Alexander's / Grill Restaurants	$	51,600		$	115,100		$	77,500		$	116,900		$	121,600		$	51,600		$	114,200		$	77,300
Percent change		(55.2	)%					(33.7)	%					135.7	%					47.7	%
Stoney River Steakhouse and Grill	$	35,000		$	79,300		$	53,100		$	81,800		$	88,000		$	34,300		$	81,700		$	53,400
Percent change		(55.9	)%					(35.1)	%					156.6	%					53.0	%

Net sales ~~decreased~~increased by ~~$34,627,~~$40,499, or ~~55.6%~~146.7%, in the second quarter of ~~2020~~2021 compared to the second quarter of ~~2019.~~2020. Further, for the first half of ~~2020,~~2021, net sales ~~decreased~~increased by ~~$42,389,~~$40,902, or ~~33.4%~~48.4%, compared to the first half of ~~2019 primarily~~2020. As noted, the majority of the year-to-date increase in net sales in fiscal 2021 occurred during the second quarter.

The Company’s first quarter 2021 sales were impacted for a variety of reasons including the effects of COVID-19 on our operations, holiday timing and weather-related closures. During March 2020, the Company was forced to close its dining rooms due to state and local mandates in order to mitigate the effect of COVID-19 ~~related~~on the population which led the Company to operate on a carry‑out only model during the last two weeks of the first quarter in 2020. During that time, the Company’s sales were approximately 15% of sales for the same weeks in 2019. During the first quarter of 2021, the Company’s sales continued to be impacted by dining room capacity restrictions at varying levels, and the Company ended the quarter operating at approximately 75% capacity on a company‑wide basis. Additionally, because fiscal 2020 contained 53 weeks of operations, it received the benefit of the Company’s typically higher New Year’s Eve holiday sales at the end of the fiscal year as it ended on January 3, 2021. The first quarter of 2021 did not receive that benefit, and management estimates that net sales in the first quarter of 2021 would have been approximately $650 higher if it had included the benefit of the New Year’s Eve week. Further, during February 2021 beginning on Valentine’s Day, the Company closed restaurants in several markets due to severe winter weather conditions, the impact of which totaled 54 closed days. Management estimates that the net sales lost due to these closures ~~that began March 16, 2020, and~~totaled $500 during the first quarter of 2021.

During the second quarter of 2021, the Company continued to experience an easing of in-restaurant dining restrictions resulting in a significant improvement in net sales over the ~~course~~second quarter of 2020, when many of the ~~next several weeks.~~Company’s dining rooms were closed. These closures resulted in the Company pivoting to a carry-out only program until dining rooms began to reopen at limited capacities in late April

2020, ~~which significantly limited sales volumes during the affected weeks. Once reopened, our dining rooms continued to operate at limited capacities~~ under governmental mandates throughout the second quarter of 2020 significantly limiting net sales in 2020. During the ~~first half~~second quarter of ~~2020 compared to~~2021, the ~~first half~~average seating capacity was approximately 75% of ~~2019.~~total capacity and, as of the end of the second quarter of 2021, each of the Company’s 47 restaurants were fully reopened at 100% capacity. They remain open at 100% capacity as of August 17, 2021.

Average weekly same store sales at J. Alexander’s / Grill restaurants for the second quarter of ~~2020 decreased~~2021 increased by ~~55.2%~~135.7% to ~~$51,600,~~$121,600, compared to ~~$115,100~~$51,600 in the second quarter of ~~2019.~~ 2020. For the first half of ~~2020,~~2021, J. Alexander’s / Grill restaurants’ average weekly same store sales totaled ~~$77,500,~~$114,200, a ~~33.7% decrease~~47.7% increase from ~~$116,900~~$77,300 in the first half of ~~2019.~~2020. Average weekly same store sales at Stoney River restaurants for the second quarter of ~~2020~~2021 ~~decreased~~increased by ~~55.9%~~156.6% to ~~$35,000~~$88,000 compared to ~~$79,300~~$34,300 in the second quarter of ~~2019.~~ 2020. For the first half of ~~2020,~~2021, Stoney River restaurants average weekly same store sales totaled ~~$53,100,~~$81,700, a ~~35.1% decrease~~53.0% increase from ~~$81,800~~$53,400 in the first half of 2020. During the first half of ~~2019. During the first two months~~2021, off‑premise sales were approximately 13% of 2020, average weekly same store sales at the J. Alexander’s / Grill restaurants increased by 2.1% but decreased by 1.4% at the Stoney River restaurants compared to the same periods in 2019, respectively. This is partly due to the fact that Stoney River experienced the effects of COVID-19 on sales earlier than the J. Alexander’s / Grill restaurants as cancellations related to private dining and business travel and functions began prior to the dining room closures in March 2020. During the third month of 2020, when widespread mandatory closures of our dining rooms occurred in response to COVID-19, average weekly same store sales at the J. Alexander’s / Grill and Stoney River restaurants decreased by 37.0% and 37.2%, respectively, compared to the same period in 2019. While states and municipalities began allowing for limited capacities inside our restaurants at various points in the second quarter, such restrictions continued to negatively impact average weekly same store sales in the second quarter of 2020 relative to the same period in 2019 as noted above. To provide additional detail, in the months of April, May and June of 2020, average weekly same storetotal sales for J. Alexander’s / Grill restaurants decreased by 81.0%, 61.5% and 28.2%, respectively, compared to the same months in 2019. For Stoney River restaurants, in the months of April, May and June of 2020, average weekly same store sales decreased by 78.3%, 62.0% and 33.7%, respectively, compared to the same months in 2019. Further, off-premise sales represented a significant portion of the Company’s total net sales during the second quarter of 2020. In the months of April, May and June 2020, off-premise salesall concepts, which represented approximately ~~99%, 56% and 22%, respectively, of total net sales recorded by the Company.~~$640 on average in weekly off-premise sales.

At J. Alexander’s / Grill restaurants, the average check per guest, including alcoholic beverage sales, ~~decreased~~increased by ~~4.1%~~26.7% to ~~$30.86~~$36.32 in the second quarter of 2021 from $28.66 in the second quarter of 2020, ~~from $32.17 in the second quarter of 2019,~~ ~~but~~and increased by ~~0.2%~~15.6% to ~~$32.32 for the firsthalfof 2020 from $32.27~~$36.31 for the first half of ~~2019.~~2021 from $31.42 for the first half of 2020. For the 3233 locations in the same store base of restaurants, the average check per guest ~~decreased~~increased by ~~4.5%~~26.3% for the second quarter of ~~2020~~2021 relative to the same period of ~~2019, and by 0.2% for~~2020. This increase is primarily due to the ~~first~~ price increase implemented during the second half of 2020 ~~compared to the same period of 2019~~.discussed below as well as a shift in product mix and new menu offerings. Management estimates that weekly average guest counts ~~decreased~~increased by approximately ~~52.9%~~86.1% and ~~33.8%~~27.6% in the second quarter and first half of ~~2020~~2021, respectively, compared to the same periods of ~~2019,~~2020, respectively, within the same store base of restaurants. On a consolidated basis, management estimates that weekly average guest counts ~~decreased~~increased by approximately ~~53.2%~~86.4% and ~~33.8%~~27.4% in the second quarter and first half of ~~2020,~~2021, respectively, compared to the corresponding periods of ~~2019.~~2020. Each of the guest count ~~decreases~~increases noted above can be primarily attributed to ~~limited restaurant operations~~our restaurants operating at full or increased capacities during ~~March through June~~the second quarter of ~~fiscal~~2021 relative to the same period of 2020 when dining rooms were closed for at least a portion of the quarter due to restrictions caused by the COVID-19 pandemic. ~~Management cannot estimate comparable menu prices~~ ~~fluctuations for the~~ ~~second quarter~~ ~~and first half of 2020 due to the significant shift in product mix that resulted from dining room closures and restrictions thereafter as well as the mix of products offered for carryout~~ ~~in response to COVID-19 during March through June of fiscal 2020.~~

At Stoney River, the average check per guest, including alcoholic beverage sales, ~~remained flat at $41.51~~increased by 26.2% to $45.28 in the second quarter of ~~2020 compared to~~2021 from $35.89 in the second quarter of ~~2019~~2020, ~~but~~and increased by ~~0.5%~~13.7% to ~~$42.29 for the first~~ ~~halfof 2020 from $42.06~~$45.14 for the first half of ~~2019.~~ ~~For~~2021 from $39.69 for the ~~locations in~~first half of 2020. This increase is primarily due to the ~~same store base of restaurants, the average check per guest decreased by 0.2% to $41.52~~price increase implemented during the second ~~quarter of 2020 compared to $41.62 in the corresponding period of 2019. For the first~~ half of 2020 ~~the average check per guest totaled $42.60,~~discussed below as well as a ~~0.6% increase from $42.34~~shift in ~~the corresponding period of 2019 within the same store base of restaurants.~~product mix and new menu offerings. Management estimates that weekly average guest counts ~~decreased~~increased by approximately ~~55.9%~~103.9% and ~~35.9% within the same store base of restaurants~~34.7% during the second quarter and first half of ~~2020~~2021, respectively,compared to the same periods of ~~2019. On a consolidated basis, management estimates that weekly average guest counts decreased by approximately 57.0% and 35.6% for the second quarter and first half of 2020, respectively,~~ ~~compared to the corresponding periods of 2019.~~2020. Similar to the J. Alexander’s / Grill restaurants, each of the Stoney River guest count ~~decreases~~increases noted above can be primarily attributed to ~~limited restaurant operations~~our restaurants operating at full or increased capacities during ~~March through June fiscal 2020 caused by the COVID-19 pandemic.~~ ~~As noted above, management cannot estimate comparable menu prices fluctuations for~~ the second quarter ~~and first half~~of 2021 relative to the same period of 2020 ~~due to~~when dining rooms were closed for at least a portion of the ~~significant shift in product mix that resulted from dining room closures and restrictions thereafter as well as~~quarter for the ~~mix of products offered for carryout in response to COVID-19 during the most recent four months of fiscal 2020.~~same reason.

Total restaurant operating expenses ~~increased~~decreased to 85.8% and 85.1% of net sales in the second quarter and first half of 2021, respectively,compared to 125.4% and 104.7% of net sales in the second quarter and first half of 2020, respectively~~, respectively,~~. ~~from 87.3%~~The decrease in the second quarter and ~~86.7%~~first half of 2021 compared to the corresponding periods of 2020 was mainly due to higher average weekly same store sales.

Food and beverage costs decreased to 33.6% and 31.9% of net sales in the second quarter and first half of ~~2019,~~2021, respectively,. ~~The increase in the second~~

quarter and first half of 2020 compared to the corresponding periods of 2019, respectively, was due to lower same store sales as a result of dining room closures and capacity restrictions in response to the COVID-19 pandemic.

~~Cost of sales, which includes the cost of food and beverages, increased to~~ from 37.9% and 34.3% of net sales ~~for~~in the second quarter and first half of 2020,~~, respectively,~~ ~~compared to 31.8% of net sales~~ respectively. Beginning in ~~both the second quarter~~March and ~~first half of 2019. The increase during~~extending into the second quarter of 2020, ~~is largely due to the effect of lower same store sales compared to the second quarter of 2019. In addition,~~ selected offerings under the Company’s carry-out program were marketed at a price point intended to quickly move product and, as such, did not reflect margins typical of the Company’s historical menu ~~offerings. Further, supply constraints experienced throughout the country~~offerings, thus, driving up food and beverage costs as a ~~result~~percent of ~~COVID-19 created upward pressure on input costs, particularly for beef,~~net sales. Additionally, during the ~~quarter.~~ ~~The increase during the first~~ second half of 2020, the Company took a price increase of 4.1% in August 2020 and implemented a packaging fee of 6% on carry-out sales in October 2020. The Company also took a price increase of approximately 3.0% in June 2021. These price increases helped increase same store sales in the second quarter and first half of 2021 and contributed to the lower food and beverage costs as a percentage of net sales as compared to the ~~same period in 2019 is largely due to the same factors previously mentioned for the second quarter of 2020.~~ prior year. Management estimates that inflation in total food costs for J. Alexander’s / Grill restaurants was approximately ~~3.8% and 5.2%~~15.2% in the second quarter of ~~2020 for J. Alexander’s / Grill and~~2021 compared to the same period in 2020. Management estimates that Stoney River restaurants ~~respectively. Management also estimates that inventory waste~~experienced inflation in total food costs of approximately ~~$125 related~~21.2% in the second quarter of 2021 compared to the ~~COVID-19 dining room closures caused cost of sales to be higher during the first half of~~same period in 2020.

Beef purchases represent the largest component of consolidated ~~cost of sales~~food and beverage costs and generally comprise approximately 30% of this expense category. However, during the first half of ~~2020,~~2021, beef costs represented ~~36%~~37% of consolidated food and beverage costs ~~of sales~~partially due to ~~the factors~~inflation discussed ~~above.~~above and partially due to a product mix shift in our food categories as well as a reduction of alcohol sales and related costs from restrictions on indoor dining and pub capacity. We purchase beef at weekly market prices. Prices paid for beef within the J. Alexander’s / Grill restaurants were higher in the second quarter compared to the same period of ~~2019~~2020 by approximately ~~5.1%~~24.1%. At Stoney River, prices paid for beef ~~increased~~were higher by approximately ~~5.8%~~37.0% in the second quarter compared to the same period of ~~2019.~~2020. Our beef purchases currently remain subject to variable market ~~conditions. The~~conditions which the Company ~~believes that the potential disruptions~~closely follows to ~~its supply chain, particularly with regard to beef, coupled with increasing input costs could have a significant impact~~identify trending pressure on ~~its operations during the balance of fiscal year 2020.~~such costs.

Restaurant labor and related costs totaled ~~45.5%~~28.0% and ~~30.8%~~45.5% of net sales in the second quarters of 2021 and 2020, respectively. These costs totaled 28.5% and ~~2019, respectively~~, ~~and totaled~~38.9% ~~and 30.5%~~ of net sales induring the first ~~half~~halves of ~~2020~~2021 and ~~2019,~~2020, respectively. The ~~increase~~decrease as a percentage of net sales noted during the second quarter and first half of ~~2020~~2021 was ~~primarily~~ due to the effect of ~~lower~~higher same store sales ~~during the second quarter and first half of 2020~~ compared to the same periods in ~~2019 and~~2020. While our expense as a percentage of sales decreased, the Company incurred greater total restaurant labor expense due to the easing of dining room capacity restrictions during 2021 allowing the Company to more fully operate its dining rooms with increased staffing levels. In the first half of 2020, the Company incurred additional labor costs associated with the Emergency Sick Leave Policy (“ESLP”), which provided for up to two weeks of paid leave for team members who were either infected by COVID-19 or employed at a restaurant that closed its dining room in response to the COVID-19 pandemic. Under the terms of the ESLP, hourly employees were paid the higher of their normal hourly rate or the federal minimum wage for the average hours worked over the previous eight-week period. This resulted in certain employees receiving the higher federal minimum wage rate who otherwise would have been paid at the tipped minimum wage rate effective within their respective state. During the first half of 2020, the Company incurred approximately $3,150 in costs related to continuing benefits, ESLP payments, vacation and other sick leave payments made to its staff members as a result of the COVID-19 ~~pandemic.~~pandemic, while such costs in the first half of 2021 totaled $103.

Depreciation and amortization of restaurant property and equipment ~~increased~~decreased by ~~$110,~~$72, or ~~3.7%~~2.4%, and by ~~$275,~~$283, or ~~4.7%~~4.6%, for the second quarter and first half of ~~2020~~2021, respectively, compared to the corresponding periods of ~~2019. The increases~~2020. During fiscal 2020, the Company selectively replaced restaurant equipment as needed in an effort to conserve cash flow. This approach resulted in decreased depreciation being recorded as certain fixed assets remaining in service during the first half of 2021 became fully depreciated during fiscal 2020. Further, the decrease noted during the ~~second quarter~~ ~~and~~ first half of ~~2020~~2021 relative to the same ~~periods~~period in ~~2019 were~~2020 was also partially due to the ~~Merus~~write off of assets of the Lyndhurst Grill restaurant that ~~opened~~permanently closed in ~~Houston, Texas during~~Cleveland, Ohio, early in the ~~fourth~~second quarter of ~~2019. Further, we recorded additional depreciation~~2020 resulting in no such expense ~~associated with fixed asset additions for restaurant remodels which occurred during the latter part of 2019.~~related to this location in 2021.

Other operating expenses, which include restaurant level expenses such as china and supplies, laundry and linen costs, repairs and maintenance, utilities, credit card fees, rent, property taxes and insurance, totaled ~~30.9%~~19.8% and ~~20.0%~~30.9% of net sales in the second quarters of 2021 and 2020, respectively. While the Company’s actual spending increased during the second quarter of 2021 compared to the same period in 2020 ~~and 2019, respectively. The~~due its ability to operate its dining rooms at increased capacity, the decreased expense as a percentage of net sales was athe result of ~~lower~~higher same store sales compared to the same quarter of 2019. The increased expense as a percentage of net sales was partially offset by decreased expense due to cost cutting initiatives during the period. We recorded decreased expense associated with credit card fees, contracted services and maintenance, repairs and maintenance, china and smallwares, laundry and linens and various other restaurant supplies used in the ordinary course of operations. These decreases were partially offset by increases in rent, property taxes, and personal protective equipment costs for our restaurant employees.2020. Other operating expenses ~~increased~~decreased to ~~24.2%~~20.1% of net sales during the first half of ~~2020~~2021 compared to ~~19.8%~~24.2% of net sales for the first half of ~~2019~~2020 due to the same ~~factors~~factor discussed above.

Transaction ~~contested proxy~~ and other related expenses totaled ~~$(66)~~$1,888 and ~~$651~~$(66) for the quarters ended July 4, 2021 and June 28, 2020, respectively, and $1,934 and $623 for the six-month periods ended July 4, 2021 and June ~~30, 2019,~~28, 2020, respectively. During the second quarter and first half of 2021, the Company incurred consulting, investment banking and legal fees related to the Company’s evaluation of strategic alternatives. Transaction and other related expenses in 2020 include legal fees, other professional fees and consulting fees that were incurred for the same reason. In the first quarter of 2020, the Company incurred legal fees, other professional fees and consulting fees related to the ~~ongoing~~Company’s evaluation of strategic alternatives totaling $689. The Company subsequently received a discount for legal services rendered during that period resulting in income for the second quarter of 2020. ~~During the first quarter of 2020, the Company announced that given the uncertainties in the business community, the restaurant industry and the financial markets, the ongoing~~

~~review~~On July 2, 2021, we announced that the Company entered into a merger agreement (the “Merger Agreement”) under which SPB Hospitality will acquire the Company in an all cash transaction valued at approximately $220,000. The Merger is expected to be completed in the fourth quarter of ~~strategic alternatives~~2021, subject to approval by the Company’s ~~Board~~shareholders, expiration or termination of ~~Directors (the “Board”) will not be completed until these uncertainties are resolved. Transaction, contested proxy and other related expenses for~~ the ~~six-month~~applicable waiting period ~~ended June 30, 2019 totaled $651. Expenses in 2019 included costs associated with both soliciting shareholder proxies for our 2019 annual meeting~~under the Hart-Scott-Rodino Antitrust Improvements Act of ~~shareholders~~1976, as well as ~~costs related~~other customary closing conditions. See “Note 10 – Merger Agreement with SPB Hospitality” in the notes to the ~~evaluation~~financial statements for additional discussion of ~~strategic opportunities.~~the Merger.

Total general and administrative expenses, which include all supervisory costs and expenses, management training and relocation costs, equity compensation expenses and other costs incurred above the restaurant level, ~~decreased~~increased by ~~$677,~~$1,347, or ~~14.2%~~32.9%, in the second quarter of ~~2020~~2021 compared to the second quarter of ~~2019.~~2020. During the second quarter of ~~2020,~~2021, the Company recorded ~~decreased~~increased expense ~~associated with~~related to incentive compensation, ~~consulting services~~travel, accounting and ~~other~~auditing fees, insurance costs ~~associated with new enterprise systems implemented during the same quarter in 2019,~~and restaurant management training ~~salaries and other professional services costs. Further, travel and employee relocation costs were reduced in response to the COVID-19 outbreak in an effort to conserve cash.~~salaries. These ~~reductions in costs~~increases were partially offset by ~~increased~~decreased expense ~~related to non‑cash~~for severance benefits, salaries, non-cash share-based compensation ~~for restricted share awards~~ and ~~performance share awards granted during the third quarter of 2019, severance benefits, payroll processing fees and general insurance costs.~~legal fees.

General and administrative expenses ~~decreased~~increased by ~~$693,~~$1,760, or ~~7.3%~~19.9%, for the first half of ~~2020~~2021 compared to the corresponding period of ~~2019~~2020 primarily due to the same factors discussed above for the second quarter. In addition to the offsetting ~~increases~~decreases noted for the quarter, we also incurred ~~additional~~less expense for other employee benefits, payroll processing fees, restaurant management training salaries and ~~401(k) contributions~~payroll taxes during the first half of ~~2020 relative~~2021 compared to the ~~first half~~same period of ~~2019.~~2020.

Goodwill Impairment and Long-lived Asset Impairment Charges and Restaurant Closing Costs

~~In light of~~During the recent decline in the market price of the Company’s common stock, the impact of mandated dining room closures on financial results, the expected reduction in economic activity in the near term, and the general economic and market volatility, the Company determined that these factors constituted an interim triggering event at the end of the Company’s first quarter of 2020, and performed impairment analyses with regard to its indefinite-lived intangible assets, property and equipment (including its right-of-use assets for operating leases) and goodwill during the first quarter of 2020. As a result, the Company assessed its recorded ~~asset~~goodwill for impairment ~~charges totaling $16,426 in the first half of 2020.~~

The Company performed a quantitative goodwill impairment test as of March 29, 2020 utilizing a market approach which included observable market prices associated with the Company’s common stock price in determining a fair value for the Company and ~~its reporting units. As a result of this test, the Company~~ determined that the J. Alexander’s / Grill reporting unit’s carrying value exceeded its fair value to such an extent that the full write-off of goodwill in the first quarter of 2020 in the amount of $15,737 was appropriate. The ~~effect~~impairment test was performed in response to certain triggering events that occurred during the quarter including a decline in the market price of ~~this conclusion~~the Company’s common stock in March 2020, the impact of mandated dining room closures on financial results, the expected reduction in economic activity in the near term, and the general economic and market volatility. The full write-off is presented as a ~~component of~~separate line titled “Goodwill ~~impairment charge”~~impairment” on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~.

Additionally, we recorded a long-lived asset impairment charge of $689 to state the assets formerly at ~~our~~the Lyndhurst Grill location in Cleveland, Ohio, at their fair value as of March 29, 2020, which is presented as a component of “Long-lived asset impairment charges and restaurant closing costs” on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income.~~. During the second quarter of 2020, management made the decision to permanently close this location after a review of its projected and historical financial performance. This location was also required to be temporarily closed in mid-March due to COVID-19-related traffic limitations unique to that specific restaurant which further impacted operating results. ~~Restaurant closing costs recorded~~The remaining assets at this location were sold during the ~~second~~third quarter of 2020 totaled $178 and included labor expenses incurred after closure, severance and other miscellaneous costs. These restaurant closing costs have also been included as a component of the same line previously mentioned for impairment charges at this location.2020. The Company assessed its ~~other restaurant locations~~remaining intangibles and fixed assets for indicators of impairment as of ~~the quarter ended June 28, 2020~~quarter-end and assessed recoverability of certain fixed assets as warranted. No ~~additional~~ impairment was ~~identified as of June 28, 2020.~~

~~The Company also performed a quantitative impairment analysis relative to its indefinite-lived intangible assets and determined that~~recorded for the ~~fair value of these assets substantially exceeded their carrying values and no impairment existed as of June 28, 2020.~~quarter ended July 4, 2021.

For the quarters ended July 4, 2021 and June 28, 2020, pre-opening expenses of $71 and ~~June 30, 2019, pre-opening expense of~~ $72, ~~and $125, respectively, was recorded. Further, for the six-month periods ended June 28, 2020 and June 30, 2019, preopening costs of $91 and $146,~~ respectively, were recorded. During the second quarter ~~and first half~~ of ~~2020,~~2021, the Company recorded pre-opening rent associated with the new J. Alexander’s in Madison, Alabama, as the Company took possession of this property in March 2021. Pre-opening expense recorded during the second quarter of 2020 included rent expense associated with ~~a new~~

the Redlands Grill location in San Antonio, Texas, for which we began incurring rent expense ~~as we took~~after taking possession of the property in March 2020. ~~Similarly,~~Further, for the six-month periods ended July 4, 2021 and June 28, 2020, preopening costs of $516 and $91, respectively, were recorded. In addition to the expenses mentioned above, for the first half of 2021, the Company recorded pre-opening expenses including training, labor, travel costs and the cost of food and beverage associated with the training process for the new Redlands Grill in San Antonio, Texas, which commenced operations at the end of March 2021. For the first half of 2020, the Company recorded pre-opening rent associated with the Redlands Grill in San Antonio, Texas, as noted above.

Interest expense ~~recorded during~~decreased by $48, or 25.4%, in the second quarter of 2021 compared to the second quarter of 2020 due to a decreased debt balance relative to 2020 as a portion of the Company’s debt balance has been repaid over the course of fiscal 2021. For the first half of 2021, interest expense decreased by $11, or 3.6%, due to the same factor previously mentioned.

Other, net decreased by $51 and $89 in the second quarter and first half of ~~2019 included rent expense associated with the Merus Grill in Houston, Texas, as we took possession of the property in March 2019 as well as other pre-opening related expenses.~~

~~Interest expense increased by $20, or 11.8%, in the second quarter of 2020~~2021, respectively, compared to the ~~second quarter of 2019 due to an increased debt balance throughout the second quarter of~~same periods in 2020. During March 2020, the Company drew down the remaining $17,000 of available capacity (at the time of the draw) under its credit facilities, resulting in additional interest expense. For the first half of 2020, interest expense decreased by $50, or 14.1%, due to the impact of debt service payments made during the course of the year partially offset by increased interest expense due to the same factors discussed above.

~~Other, net increased by $65 for the second quarter of 2020 compared to the corresponding period of 2019.~~ The ~~increase~~decrease was primarily related to the ~~change in~~market performance of the ~~fair value of the~~underlying trading securities held in the “rabbi trust” pursuant to the Salary Continuation Agreements discussed in greater detail below.

We reported an income tax benefit of $24 and income tax expense of $343 for the quarter and six-month period ended July 4, 2021, respectively, and an income tax benefit of $4,419 and $5,806 for the quarter and ~~six-month period~~six-months ended June 28, 2020, respectively, ~~and income tax expense of $18 and $257 for the quarter and six-months ended June 30, 2019, respectively,~~ reflecting the Company’s federal, state and local income tax liability or benefit, as applicable, for its allocable share of income (loss) ~~income~~ of J. Alexander’s Holdings, LLC. The ~~interim~~net effective tax ~~provision~~rate (including the impact of discrete items) for the first ~~half~~six months of ~~2020~~2021 was ~~prepared on an actual~~5.7%. The factors that caused the net effective tax rate ~~basis rather than on an estimated annual effective~~to vary from the federal statutory rate ~~basis due to~~of 21% for the ~~fact that the Company has determined that a reliable estimate of the annual effective tax rate cannot be made. The income tax benefit recognized during 2020 includes $1,583 of current benefit~~six-month period ended July 4, 2021 primarily related to the ~~carryback~~impact of ~~calculated net operating losses (“NOLs”) for~~ the ~~first half of 2020 to prior years as allowed under the Coronavirus Aid, Relief, and Economic Security~~Federal Insurance Contribution Act (“~~CARES Act”~~FICA”). tip credit offset by state income taxes and discrete items primarily related to return to provision adjustments. The ~~actual~~ net effective tax rate for the first half of 2020 was ~~impacted by~~19.1%. The factors that caused the net effective tax rate to vary from the federal statutory rate of 21% for the six-month period ended June 28, 2020 primarily related to the impact of the nondeductible book goodwill impairment charge recorded during ~~the year,~~2020, partially offset by the ~~Federal Insurance Contribution Act (“FICA”)~~FICA tip credit, state income taxes, the anticipated carryback of the NOLs generated during ~~the current year~~2020 to prior years, including the impact of the correction of the ~~qualified improvement property~~QIP regulations on the anticipated carryback and other items.For the first half of 2019, the net effective tax rate included the impact of the FICA tip credit and other credits, partially offset by state income taxes and certain non-deductible expenses. The change in recorded income taxes of $6,063 in the first half of 2020 compared to the same period of 2019 was primarily due to the loss from continuing operations before income taxes of $30,331 compared to income from continuing operations before taxes of $6,390 recorded during the first half of 2019.

Losses from discontinued operations ~~totaling~~totaled $3 and $55 ~~and $58~~ for the quarters ended July 4, 2021 and June 28, 2020, respectively, and ~~June 30, 2019, respectively~~,income and loss from discontinued operations totaled $592 and $107 ~~and $117~~ for the~~quarters and~~ six-month periods ended July 4, 2021 and June 28, 2020, ~~and June 30, 2019~~respectively. During the first quarter of 2021, ~~respectively,~~ ~~consist~~the Company entered into a termination agreement related to a lease agreement for a location that was closed in 2013, which has been accounted for as a discontinued operation since that time. As a result of the termination agreement, we recorded a gain of approximately $630, representing the difference between recorded lease liabilities and the lease termination fee paid to the landlord by the Company during the first quarter of 2021. The gain was partially offset by ongoing lease and other exit costs incurred during 2021. The loss from discontinued operations recorded in the first and second quarters of 2020 consisted solely of exit and disposal costs ~~which are primarily~~ related to ~~a continuing obligation~~the Company’s obligations under ~~one~~this same lease ~~agreement for a closed location to which the Company remains a party.~~agreement.

The Company is a holding company and the sole managing member of J. Alexander’s Holdings, LLC. As such, we control the business and affairs of J. Alexander’s Holdings, LLC and its subsidiaries and consolidate J. Alexander’s Holdings, LLC and subsidiaries into our consolidated financial statements. Our principal sources of cash are cash and cash equivalents on hand, cash flow from operations and available borrowings under our credit facility. As of ~~June 28, 2020~~July 4, 2021, cash and cash equivalents totaled ~~$17,315~~$22,611.

~~Our~~During the first half of 2021, our liquidity has been impacted by the government mandated closure of dining rooms in certain states as well as limits on dining capacity in all other states where our restaurants are located in response to the COVID-19 ~~pandemic. The most immediate impact has been~~pandemic, albeit to ~~cash~~a lesser extent than experienced during the comparable time period in 2020. Cash flows from operations ~~which~~ were significantly reduced ~~as all our restaurants were operating under a carry-out only model for a period~~at the onset of ~~time. As of June 9,~~the dining room closures in March 2020 and throughout the following months until capacity restrictions began to ease. By February 5, 2021, all of our restaurants were permitted to resume in-person dining ~~subject~~after a period of time where certain states reverted back to ~~varying capacity~~dining room closures in response to a surge in COVID-19 during the fourth quarter of 2020. During the first half of 2021, state and local governments continued to ease such restrictions in response to positive COVID-19 trends and ~~those restrictions remain in place~~increased vaccination rates among the country’s population, and, as of the end of the second quarter of 2021 and continuing through August ~~6, 2020.~~ 17, 2021, each of our restaurants’ dining rooms are operating at full capacity. There can be no assurance that state or local authorities will allow dining rooms to remain open even at reduced capacity if there is a surge in COVID‑19 cases in those locations, especially if COVID-19 variants threaten to reverse the country’s progress in containing its spread.We have continued carry-out services in all of our ~~restaurants as well.~~restaurants. While the Company quickly pivoted to a carry-out model to generate sales when dining room closures began in 2020, this approach inherently ~~limits~~limited our guest traffic relative to historical levels. ~~To supplement our cash on hand, in March 2020, the~~The Company drew down the remaining $17,000 of available capacity (at the time of the draw) under the line of credit facilities discussed in detail below. This was undertaken as a precautionary measure to provide increased liquidity and

preserve financial flexibility in light of the disruption in operations and uncertainty resulting from the COVID-19 pandemic. The proceeds from the credit draws are available to be used for general corporate purposes including working capital. In the second quarter of 2020, management was able to negotiate with the Company’s lender a modification to the payment terms of its existing debt delaying principal payments otherwise due in the months of April through September 2020 and interest payments otherwise payable in the months of April through June 2020 to September 2021 and modified financial covenants, as well as the expansion of its Revolving Line of Credit (as defined below) which occurred in June 2020 and is discussed in detail below. Further, the Company has made targeted reductions in spending at its restaurants and within its corporate office ~~which has been discussed throughout this report. Any non-essential capital expenditures have been deferred as well as certain scheduled payments~~ to conserve ~~its~~ cash, ~~on hand as uncertainty remains as to when government restrictions will be lifted, when restaurants will fully reopen and future business levels.~~particularly during the early stages of the COVID-19 pandemic. Based on

actions taken to date and projected future cash flows, we believe our cash on hand, expected cash flows from operations and available borrowings under the ~~loan agreements~~credit facility with our lender will be sufficient to finance our capital expenditures and other operating activities for the next 12 months.

As of August ~~2, 2020,~~15, 2021, the Company ~~has~~had cash on hand of approximately $16,400. During the second quarter of 2020, the Company’s cash and cash equivalents decreased by $7,503 for a weekly cash burn rate of approximately $577. The Company has undertaken significant steps to reduce expenses since March 2020, and these steps, coupled with the growth in sales levels, have allowed the Company to reduce its weekly cash burn rate previously anticipated for the full second quarter. The Company is currently forecasting the weekly cash burn rate to be in the range of $325 to $375 per week under the current operating model for the third quarter, but expects that it will see an improvement in the fourth quarter from a cash flow perspective if sales continue to improve, and that the Company will have adequate liquidity for the next 12 months. These estimates include the closing of the sale of the Cleveland property as well as required debt service payments and capital expenditure commitments including the completion of construction for one new location in the fourth quarter of 2020 and the commencement of construction of an additional location set to open in 2021.$22,060. Consistent with many other restaurant companies, we use operating lease arrangements for many of our restaurants. We believe that these operating lease arrangements provide appropriate leverage for our capital structure in a financially efficient manner.

Our liquidity may also be adversely affected by a number of factors not specifically addressed above, but are described in detail in the ~~2019~~2020 Annual Report, under the heading “Risk ~~Factors” and in Part II, Item 1A. Risk Factors of this report.~~Factors.”

The table below shows our net cash flows from operating, investing and financing activities for the six-month periods ended July 4, 2021 and June 28, ~~2020 and June 30, 2019:~~2020:

	Six Months Ended						Six Months Ended
	June 28,			June 30,			July 4,			June 28,
	2020			2019			2021			2020

Net cash (used in) provided by:
Net cash provided by (used in):
Operating activities	$	(3,764	)	$	5,472		$	15,280		$	(3,764	)
Investing activities		(3,266	)		(3,298	)		(3,205	)		(3,266	)
Financing activities		15,542			(2,506	)		(1,827	)		15,542
Net increase (decrease) in cash and cash equivalents	$	8,512		$	(332	)
Net increase in cash and cash equivalents							$	10,248		$	8,512

Operating Activities. Net cash flows ~~used in~~provided by operating activities totaled ~~$3,764~~$15,280 for the first half of ~~2020~~2021 compared to net cash flows ~~provided by~~used in operating activities of ~~$5,472~~$3,764 for the corresponding period of ~~2019, a decrease~~2020, an increase of ~~$9,236.~~$19,044. Our operations generate receipts from customers in the form of cash and cash equivalents, with receivables related to credit card payments considered cash equivalents due to their relatively short settlement period, and the majority of our expenses are paid within a 30-day pay period. During the first half of ~~2020,~~2021, net sales ~~decreased~~increased by ~~$42,363,~~$40,838, which excludes the impact of the comparative ~~decrease~~increase in gift card breakage of ~~$26,~~$64, relative to the corresponding period of ~~2019,~~2020, and total restaurant operating expenses ~~decreased~~increased by ~~$21,455~~$18,205 compared to the first half of ~~2019,~~2020, resulting in a net ~~decrease~~increase to cash flow from operations of approximately ~~$20,908 due to limited restaurant operations caused by COVID-19.~~$22,633. This ~~decrease~~increase was offset by the lease termination fee paid during the first quarter of 2021 discussed above in the amount of $565. Cash paid for income taxes and interest increased by $1,189 and $168, respectively, during the first half of 2021 compared to the same period in 2020. Further, in the first half of 2020, the Company received tenant incentive payments ~~received in 2020~~ from our ~~lessors~~landlords at the Merus Grill restaurant in Houston, Texas, and at our Stoney River restaurant in Annapolis, Maryland, pursuant to the terms of the lease agreements, which totaled $790 and $527, respectively. ~~Additionally, transaction cost~~No such payments were approximately $4,621 lower during the first half of 2020 compared to the corresponding period of 2019, which was primarily related to the Black Knight Advisory Services, LLC (“Black Knight”) termination fee paid in 2019 of $4,560. Further,received in the first half of 2019, the Company paid approximately $705 to Black Knight which represented the pro-rata portion of its consulting fees earned during 2018. No such payment occurred in the first half of 2020. Finally, as a result of the timing of certain payments at quarter‑end, our accounts payable balance is $2,474 higher at the end of the second quarter of 2020 relative to the same period-end in 2019. Further, cash paid for

income taxes and interest decreased by $657 and $218, respectively during the first half of 2020 compared to the same period in 2019. Finally, pursuant to relief granted under the CARES Act, we have deferred $897 in social security tax payments as of June 28, 2020.2021.

Investing Activities. Net cash used in investing activities for the first half of ~~2020~~2021 totaled ~~$3,266~~$3,205 compared to ~~$3,298~~$3,266 in the corresponding period of ~~2019,~~2020, with the ~~2020~~2021 use of cash being attributed primarily to the ~~ongoing~~completed construction of one Redlands Grill location ~~expected to be completed~~that opened in ~~the fourth quarter of 2020 and anticipated to begin operations in the first quarter of~~San Antonio, Texas, during March 2021 as well as ~~one restaurant remodel and~~ routine additions at other locations. Cash used in investing activities in the first half of ~~2019~~2020 was attributed primarily to ~~capital expenditures related to the construction of the Merus Grill location in Houston, Texas, opened in November 2019,~~a restaurant ~~remodels that occurred at certain locations and~~remodel as well as routine additions at other ~~locations.~~locations and for construction costs related to the Redlands Grill in San Antonio.

Financing Activities. Net cash ~~provided by~~used in financing activities for the first half of ~~2020~~2021 totaled ~~$15,542~~$1,827 compared to net cash ~~used~~provided by financing activities of ~~$2,506~~$15,542 in the corresponding period of ~~2019.~~2020. Net cash used in financing activities in the first half of 2021 included routine debt service payments made during the quarter as well as a repayment of the $1,000 outstanding under its Revolving Line of Credit (as defined below) in April 2021. Additionally, the Company repaid $5,000 outstanding under its Development Line of Credit (as defined below) in April 2021 and subsequently drew down $5,000 under the same line of credit in June 2021. Net cash provided by financing activities in the first half of 2020 included a $17,000 draw down of the Company’s lines of credit which represented all remaining available balances at the ~~time. The circumstances surrounding this draw down are discussed in detail below.~~time and which was done as a precaution to preserve liquidity at the onset of the COVID-19 pandemic. This amount was partially offset by routine debt payments made during the first quarter of the year prior to deferral of principal payments that have been negotiated with the Company’s lender for principal payments due April through September of 2020. The Company also paid $236 of financing fees associated with the expansion of its Revolving Line of Credit (as defined below) which occurred during the second half ~~of 2020 discussed in detail below under~~ ~~“Capital Resources—Credit Facility.”~~ Further, the Company qualified for and received $15,100 in loans under the Paycheck Protection Program of the CARES Act during the second quarter of 2020. The Company subsequently repaid those loans in full during the second quarter of 2020.

Net cash used in financing activities in the first half of 2019 included debt service payments as well as a $6 payment for deferred financing fees related to the modification of our loan agreement also discussed below.27

Our capital requirements are primarily dependent upon the pace of our growth plan and resulting new restaurants. Our growth plan is dependent on many factors, including economic conditions, availability of capital resources, real estate markets, restaurant locations and the nature of lease agreements. Our capital expenditure outlays are also dependent on costs for maintenance in our existing restaurants as well as information technology and other general corporate capital expenditures.

The capital resources required for a new restaurant depend on the concept, the size of the building, the day parts the restaurant will offer and whether the restaurant is a ground-up build-out or a conversion. We estimate development costs, net of landlord contributions and excluding pre-opening costs, will range from $5,000 to $6,000 for a new J. Alexander’s / Grill restaurant or Stoney River location, and anticipate that all new Stoney River restaurants will serve both lunch and dinner. In addition, we expect to spend approximately $700 per restaurant for pre-opening expense including pre-opening rent expense, and expect that such ~~expense~~expenses will approximate ~~$725~~$1,050 in fiscal year ~~2020.~~

~~With respect~~2021 related to the ~~Company’s remodel program,~~new locations in San Antonio, Texas, and Madison, Alabama, with approximately $525 expected to be spent in the remainder of 2021 associated with the Madison, Alabama, location.

In addition to new store development, we ~~completed the remodel~~currently plan to begin remodels of ~~our~~one J. Alexander’s / Grill restaurant and two Stoney River ~~Annapolis location~~restaurants during the ~~first~~second half of ~~2020 which resulted in $490 of capital expenditures. Historically, we have completed three to eight remodels each year~~2021 at an average cost of ~~approximately $425~~$350 per ~~location. However, due to the impact of COVID-19, the Company has suspended its remodel program for the remainder of 2020.~~restaurant.

For ~~fiscal year 2020,~~2021, we currently estimate capital expenditure outlays will range between ~~$8,000~~$10,000 and ~~$10,000, approximately $5,000 to $7,000~~$12,000, net of ~~which will be spent in July through December 2020~~any tenant incentives and excluding pre-opening ~~expense.~~costs. These estimates include the ~~completion of construction~~opening of one ~~Redlands~~J. Alexander’s / Grill restaurant during ~~2020 slated for opening in~~ 2021 ~~for which we are contractually obligated,~~and the ~~commencement~~buildout of ~~construction for~~ one ~~new~~ J. Alexander’s ~~expected~~/ Grill restaurant which will open early in 2022 (with the majority of the capital expenditures related to ~~open~~the new San Antonio location already incurred during fiscal 2020, and thus not included in the 2021 ~~and only~~estimate) as well as capital expenditures incurred in connection with the remodels discussed above, those ~~capital~~ expenditures necessary to maintain ~~operations at~~ our existing restaurants ~~or those required~~and outlays for general corporate purposes. ~~These estimated capital expenditure amounts are included in our cash burn estimates above.~~

We believe that we can fund such expenditures with cash on hand, cash flows from operations and by the use of our ~~loan agreements~~lines of credit as necessary, depending upon the timing of expenditures.

~~An additional~~Additional long-term capital ~~requirement is~~requirements include the funding of the Amended and Restated Salary Continuation Agreements (the “Salary Continuation Agreements”) in place with certain current and former officers of the ~~Company and~~Company. J. Alexander’s, LLC, the ~~related~~operating subsidiary of J. Alexander’s Holdings, LLC, is obligated to continue funding a “rabbi trust”

( (previously defined as the “Trust”)~~. On October 19, 2015,~~ under the Salary Continuation Agreements. As of July 4, 2021, the Trust ~~was established~~holds $110, $2,415 and ~~funded with a total of $4,304, which consisted of $2,415~~$2,336 in cash and ~~$1,889 in~~cash equivalents, trading securities and aggregate cash surrender ~~values~~value of whole life insurance ~~policies.~~policies, respectively. These assets are classified as noncurrent within the Company’s condensed consolidated financial statements. The Company made additional ~~cash~~ contributions of $75 and $95 to the Trust in fiscal years 2019 and 2018, respectively, and will continue to make additional contributions to the Trust in the future in order to maintain the level of funding required by the Salary Continuation Agreements.

~~On November 1, 2018,~~As of July 4, 2021, we have deferred the ~~Board authorized~~payment of $3,593 in employer-related social security taxes as permitted by a share repurchase program which replaced the previous share repurchase program that expired on October 29, 2018, and allows for the repurchase of shares up to an aggregate purchase price of $15,000 over the three-year period ending November 1, 2021. Any share repurchases under the program are expected to be made solely from cash on hand and available operating cash flow. Repurchases will be made in accordance with applicable securities laws and may be made from time to timeprovision in the ~~open market. The timing, prices~~Coronavirus Aid, Relief, and ~~amount~~Economic Security Act. Employers taking advantage of ~~repurchases will depend upon prevailing market prices, general economic and market conditions and other considerations. The repurchase program does not obligate~~this provision are required to pay 50% of these funds by December 31, 2021 with the ~~Company~~remaining portion payable by December 31, 2022. We intend to ~~acquire any particular amount of stock. There was no common stock repurchase activity under the program during~~fund the first half of ~~2020.~~this liability by the end of the third quarter of 2021.

Our operations have not historically required significant working capital. Many companies in the restaurant industry operate with a working capital deficit. Guests pay for their purchases with cash or by credit card at the time of the sale while restaurant operations do not require significant inventories or receivables. In addition, trade payables for food and beverage purchases and other obligations related to restaurant operations are not typically due for approximately 30 days after the sale takes place. Since requirements for funding accounts receivable and inventories are relatively insignificant, virtually all cash generated by operations is available to meet current obligations. As noted previously, COVID-19 has negatively affected our ability to generate cash flow from operations due to government mandated dining room closures and subsequent seating capacity restrictions and the resulting impact on guest traffic. While the Company has taken, and will continue to take as necessary, measures to curtail its spending in step with the reduced cash flow, uncertainty remains as to ~~whether dining rooms will be required to close once again in future periods, for how long and to~~ what extent dining room capacity in our restaurants will be limited going forward and the level of guest traffic the ~~restaurant~~restaurants will be able to generate ~~once government mandated restrictions are fully lifted.~~as a result. These factors may negatively impact the Company’s working capital for an extended period of time. Our current obligations are to fund purchases of inventory and to make required payroll

payments, tax payments, rental payments and to fund ~~the purchase of~~ other required operating payments such as for insurance, building maintenance, utilities and other items necessary to operate our restaurants. ~~We had a~~Our working capital ~~deficit of $1,315~~surplus totaled $6,101 and ~~$13,134~~$337 as of ~~June 28, 2020~~July 4, 2021 and ~~December 29, 2019,~~January 3, 2021, respectively.

The Company ~~currently has four separate notes under its Third~~is party to the Fourth Amended and Restated Loan Agreement (“(the “Fourth Loan Agreement”) with Pinnacle Bank. The Loan Agreement amended and restated in full the Company’s Second Amended and Restaurant Loan Agreement (the “Second Loan Agreement”) in conjunction with the modification of the revolving line of credit (“Revolving Line of Credit”) on June 5, 2020 as discussed in detail below.Bank, dated October 28, 2020. The borrower under the Fourth Loan Agreement is J. Alexander’s, LLC, and it is guaranteed by J. Alexander’s Holdings, LLC and all of its significant subsidiaries. The indebtedness outstanding under this Fourth Loan Agreement is secured by liens on certain personal property of the Company and its subsidiaries, subsidiary guarantees, and a mortgage lien on certain real property. The Fourth Loan Agreement, among other things, permits payments of tax dividends to members, ~~limits capital expenditures, assets sales and~~restricts liens and encumbrances, ~~prohibits~~restricts dividends, and contains certain other provisions customarily included in such agreements. ~~As of June 28, 2020, the~~The Fourth Loan Agreement ~~consisted~~consists of the following:

The current balance of each of these credit facilities is set forth ~~below.~~below under “Debt Status and Related Information.”

Under the Fourth Loan Agreement, ~~contains financial covenants that~~each of the ~~Company is required to comply~~Company’s notes bear interest at a rate of 30-day LIBOR plus 2.5%, with ~~during~~ a ~~waiver period beginning May 7, 2020 through the period ending~~ floor for LIBOR of 1.5%, which was set at 4.0% as of July 4, 2021 ~~(the “Waiver Period”) (the “New Financial Covenants”)~~. ~~The New~~

Financial Covenants ~~were initially implemented in a bank waiver dated May 6, 2020.~~

The ~~New Financial Covenants~~financial covenants under the Fourth Loan Agreement require (i) minimum revenue of (a) at least $99,800 for the Company’s fiscal year ~~ending~~ended January 3, 2021, (b) at least

~~$118,400~~ $118,400 on a four quarter trailing basis by April 4, 2021, and (c) at least $166,800 on a four quarter trailing basis by July 4, 2021 through the maturity date, and (ii) a maximum adjusted debt to tangible net worth ratio of 0.80 or less, measured quarterly beginning September 27, ~~2020. In accordance with the Third Amended~~2020, and ~~Restated Loan Agreement, upon the expiration of the Waiver Period, the New Financial Covenants will terminate and the financial covenants revert back to (i)~~(iii) a fixed coverage charge ~~ratio~~ of not less than ~~1.25~~1.00 to ~~1.0~~1.00 for the period commencing July 5, 2021 through January 2, 2022, and ~~(ii) a maximum adjusted debt~~not less than 1.05 to ~~EBITDAR ratio of not more than 4.0 to 1.0, consistent with~~1.00 beginning on January 3, 2022 through January 1, 2023, or the historical financial covenants in the Loan Agreement prior to the Company obtaining the waiver. The Company projects to be in compliance with these New Financial Covenants through the Waiver Period.

~~The historical financial covenants that will be reinstated in the third quarter of 2021 after the Waiver Period which are follows:~~

~~A fixed charge coverage ratio of at least 1.25 to 1 as of the end of any fiscal quarter based on the four quarters then ended must be maintained.~~maturity date. The fixed charge coverage ratio is defined in the Fourth Loan Agreement as the ratio of (a) the sum of net income (loss) ~~income~~ for the applicable period (excluding the effect on such period of any extraordinary or nonrecurring gains or losses, including any asset impairment charges, restaurant closing expenses, changes in valuation allowance for deferred tax assets, and non-cash deferred income tax benefits and expenses and up to $1,000 (in the aggregate for the remaining term of the loans) in uninsured losses) plus depreciation and amortization plus interest expense plus rent payments plus non-cash share-based compensation expense plus other non-cash expenses or charges plus expenses associated with a public offering, spin-off, strategic evaluation, or acquisition/merger process regardless of whether such events occur or are delayed minus the greater of either actual store maintenance capital expenditures (excluding major remodeling or image enhancements) or the total number of stores in operation for at least 18 months multiplied by $40 to (b) the sum of interest expense during such period plus rent payments made during such period plus payments of long-term debt and finance lease obligations made during such period, all determined in accordance with U.S. ~~generally accepted accounting principles (“GAAP”).~~

~~In addition,~~GAAP. Additionally, the ~~maximum adjusted debt to EBITDAR ratio must not exceed 4.0 to 1 at the end of any fiscal quarter. Under the~~Fourth Loan Agreement ~~EBITDAR is measured based on the then ending four fiscal quarters and is defined as the sum of net (loss) income~~specifically states that for the applicable period (excluding the effect on such period of any extraordinary or nonrecurring gains or losses, including any asset impairment charges, restaurant closing expenses, changes in valuation allowance for deferred tax assets and non-cash deferred income tax benefits and expenses and up to $1,000 (in the aggregate for the termpurposes of the loans) in uninsured losses) plus an amount that in the determination of net (loss) income for the applicable period has been deducted for (i) interest expense; (ii) total federal, state, foreign, or other income taxes; (iii) all depreciation and amortization; (iv) rent payments; and (v) non-cash share-based compensation, all as determined in accordance with GAAP. Adjusted debt is (i) funded debt obligations net of any short-term investments, cash and cash equivalents plus (ii) rent payments multiplied by seven.financial covenant calculations, operating leases are not considered indebtedness.

If an event of default shall occur and be continuing under the Fourth Loan Agreement, the commitment under the Fourth Loan Agreement may be terminated and any principal amount outstanding, together with all accrued unpaid interest and other amounts owing in respect thereof, may be declared immediately due and payable. J. Alexander’s, LLC was in compliance with the ~~existing~~applicable financial covenants as of ~~December 29, 2019~~January 3, 2021 and the reporting periods subsequent to that date as of ~~June 28, 2020.~~July 4, 2021.

~~At June 28, 2020,~~The Company projects to be in compliance with each of these financial covenants through the next 12 months.

On July 4, 2021, the amounts outstanding under the Development Line of Credit and ~~the~~ Revolving Line of Credit were ~~$20,000~~$10,000 and $0, respectively. As previously noted above, in April 2021, the Company voluntarily repaid $5,000 and $1,000 on the outstanding balances of the Development Line of Credit and Revolving Line of Credit, respectively. AtThe Company subsequently drew down

$5,000 under its Development Line of Credit in June ~~28, 2020, $4,167~~2021, which is available to be used for general corporate purposes, including working capital. As of the date of this report, the Company has access to available lines of credit totaling $26,000. As of July 4, 2021, $2,917 was outstanding under the Mortgage ~~Loan and an additional $555 was outstanding under the Term~~ Loan. ~~At June 28, 2020, the~~The Fourth Loan Agreement ~~was~~is secured by the real estate, equipment and other personal property of 17 restaurant locations with an aggregate net book value of ~~$40,071.~~

The Loan Agreement amended the Revolving Line of Credit effective June 5, 2020 to expand its capacity from $1,000 to a total of $16,000 by adding an accordion feature for the additional $15,000, with the additional capacity being available for general corporate purposes, including working capital and letters of credit. This amendment also required the Company to pledge the previously unencumbered five owned properties as collateral to the lender. The additional capacity is available for borrowing by the Company in amounts up to and including $5,000 per fiscal month beginning in the eighth fiscal month of 2020, with any amounts not borrowed during any particular period to be carried over to subsequent periods. Any advances on the expanded Line of Credit are contingent on the Company achieving certain levels of revenue on a trailing three-fiscal-month basis. The Loan Agreement was included as an exhibit to the Company’s Current Report on Form 8-K filed with the SEC on June 9, 2020. Borrowings under the Revolving Line of Credit under the Loan Agreement bear interest at a rate of LIBOR plus 2.5%, with a floor for LIBOR of 1.5%, and will be payable quarterly beginning on September 3, 2020 (set at 30-day LIBOR plus 2.10%$37,180 as of ~~June 28, 2020). All outstanding principal and interest under the Revolving Line of Credit will be due and payable on the maturity date of September 3,~~July 4, 2021.

During the second quarter of 2020, the Company entered into a modification agreement to the Term Loan, which defers the two remaining principal payments totaling $555 until the Term Loan’s new maturity date, which was also modified to be September 3, 2021. On September 3, 2021, this principal amount will be payable in full in addition to interest accrued during the relevant period. With respect to interest payments in the interim, the Term Loan was modified to defer such payments until July 3, 2020 at which point

~~monthly interest payments resumed through the September 3, 2021 maturity date.~~ The Company also ~~negotiated for~~capitalizes lender and legal fees as deferred loan costs and amortizes such costs over the ~~deferral~~respective lives of ~~principal and interest payments related to~~ the ~~Mortgage Loan. The six principal payments otherwise due in April through September 2020 totaling $834 will now be payable when~~loans under the ~~loan matures on September 3, 2021 and interest payments~~Fourth Loan Agreement. A total of $250 is currently classified as a reduction of long-term debt on the ~~Mortgage Loan, the Development Line~~Company’s Condensed Consolidated Balance Sheet as of ~~Credit and Revolving Line of Credit for the months of April, May and June 2020, were deferred, and interest payments resumed on~~ July 3, 2020. Each of the Term and Mortgage Loans and the Development Line of Credit bear interest at LIBOR plus a sliding interest rate scale determined by the maximum adjusted debt to EBITDAR ratio. As of June 28, 2020, the interest rate for these loans was set at LIBOR plus 2.10%.4, 2021.

As previously disclosed in the Company’s Form 8-K filed on March 24, 2020, during the first quarter of 2020, the Company announced it drew down the remaining $17,000 of available capacity (at the time of the draw) under the Development Line of Credit and the Revolving Line of Credit (the “Credit Draw”). The Credit Draw was undertaken as a precautionary measure to provide increased liquidity and preserve financial flexibility in light of current disruption and uncertainty resulting from the COVID-19 outbreak. The proceeds from the Credit Draw are available to be used for general corporate purposes, including working capital.

As of ~~June 28, 2020,~~July 4, 2021, we had no financing transactions, arrangements or other relationships with any unconsolidated affiliated entities. Additionally, we are not a party to any financing arrangements involving synthetic leases or trading activities involving commodity contracts.

From 1975 through 1996, the Company’s predecessor operated restaurants in the quick-service restaurant industry. The discontinuation of these quick-service restaurant operations included disposals of restaurants that were subject to lease agreements which typically contained initial lease terms of 20 years plus two additional option periods of five years each. In connection with certain of these dispositions, the Company through its subsidiaries may remain secondarily liable for ensuring financial performance as set forth in the original lease agreements. We can only estimate our contingent liability relative to these leases, as any changes to the contractual arrangements between the current tenant and the landlord subsequent to the assignment are not required to be disclosed to us. A summary of our estimated contingent liability as of ~~June 28, 2020,~~July 4, 2021 is as follows:

Wendy's restaurants (five leases)	$	875	$	859
Mrs. Winner's Chicken & Biscuits restaurants (one lease)		303		215
Total contingent liability related to assigned leases	$	1,178	$	1,074

Critical accounting policies are those that management believes to be the most significant judgments and estimates used in the preparation of the Company’s Condensed Consolidated Financial Statements. Judgments or uncertainties regarding the application of these policies could potentially result in materially different amounts being reported under different assumptions and conditions. There have been no material changes to the critical accounting policies previously reported in the Consolidated Financial Statements and footnotes thereto for the fiscal year ended ~~December 29, 2019~~January 3, 2021 included in the ~~2019~~2020 Annual Report.

Information regarding recent accounting pronouncements may be found in Part I, Financial Information, Item 1. Financial Statements, Notes to Condensed Consolidated Financial Statements, Note 7 – Recent Accounting Pronouncements.

The information required by this Item is incorporated by reference tofrom Part I, Financial Information, Item 1. Financial Statements, Notes to Condensed Consolidated Financial Statements, Note 5 (c) Commitments and Contingencies – Litigation Contingencies.

The discussion of the Company’s business and operations should be read together with risk factors contained under the heading “Risk Factors” in our 2019 Annual Report, which describe various risks and uncertainties to which we are or may be subject. These risks and uncertainties have the potential to affect our business, revenues, financial condition and results of operations, liquidity, cash flows and prospects in a material adverse manner. As of the date hereof,Except as otherwise described herein there have been no material changes tofrom the risk factors ~~set forth~~disclosed in ~~our 2019 Annual Report, except as follows:~~

The current novel coronavirus (COVID-19) pandemic (and other diseases, outbreaks, or pandemics) has disrupted and may further disrupt our business, and has affected and may further adversely affect our revenues, results of operations, cash flows, liquidity and financial condition.

The COVID-19 pandemic has affected and may continue to adversely affect our revenues, results of operations, cash flows, liquidity and financial condition. Commencing in March 2020 and continuing to the present, we are experiencing unprecedented effects of the COVID-19 pandemic, which has negatively impacted and may continue to negatively impact guest traffic at our restaurants, make it more difficult to staff our restaurants and, in more severe cases, may cause a temporary inability to obtain supplies, increase commodity costs or cause full and partial closuresPart 1, Item 1A. Risk Factors, of our ~~affected restaurants, sometimes for prolonged periods of time. All of our currently-open restaurants temporarily shifted to a carry-out operating model~~2020 Annual Report. Dollar amounts within Part II. Other Information, Item 1A. Risk Factors are presented in March 2020, suspending dine-in services until applicable state and local governments determined it was safe for restaurants to resume such services. In addition, as our dining rooms gradually began to reopen at the end of April 2020, our restaurants implemented limited service and modified hours in certain circumstances. thousands.

The Company also determined during the second quarter of 2020 that one of its locations will remain permanently closed, and the Company entered into an agreement to sell said location, subject to customary closing conditions. As restaurants were permitted to reopen for dining, they have operated at and are expected to continue to operate at, decreased capacity to comply with governmental mandates and social distancing requirements.Effective June 9, 2020, all of our restaurants were permitted to resume in-person dining, subject to varying capacity restrictions and we have continued carry-out services in all of our restaurants. As a result of these changes to our operations, we have experienced severe decreases in revenues, while continuing to incur significant levels of expenses. Additionally, since the reopening phases began, various states have seen a surge in positive COVID-19 cases, and at the end of June and early July, certain states and local jurisdictions paused or, in some cases, reversed reopening plans. If federal, state or local jurisdictions determine that another closure of restaurants for dine-in services is warranted, whether temporary or prolonged, our results of operations, revenues, cash flows, liquidity and financial condition will be negatively impacted. Additionally, if prolonged increases in positive cases of COVID-19 occurs, it will be difficult for us to staff our restaurants while adhering to quarantine guidelines which could cause temporary closures of our locations. ~~Further, we have new or additional competitors we may not otherwise face under normal operations, and we~~Merger may not be ~~able to successfully compete with such establishments.~~

Moreover, the COVID-19 pandemic has impacted, and may continue to impact, the greater economy, causing an economic downturn and generating uncertainty related to factors that may impact our business, such as timing of any economic recovery, changes in guest spending, and changes in consumer habits in light of job losses, lower discretionary income, and higher individual debt levels. The COVID-19 pandemic may also materially adversely affect our ability to implement our growth plans, including closures of existing restaurants, delays in opening new restaurants, and delaying our ongoing exploration of strategic alternatives. These changes have materially adversely affected our revenues, results of operations, cash flows, liquidity and financial condition, and may continue to materially adversely affect such aspects of our business, particularly if these changes continue for an extended period of time.

On June 5, 2020, we entered into the Third Amended and Restated Loan Agreement with our lender which expanded our revolving credit facility, with the additional capacity being available for borrowing subject to the Company achieving certain levels of net sales. We are also taking steps to defer payments to landlords and other parties in order to reduce our capital commitments and supplement our liquidity. We cannot assure you that we will be able to access the additional funds available under the Third Amended and Restated Loan Agreementcompleted on a timely basis, or ~~obtain any payment deferrals or contract concessions sought. If we are unable to obtain additional liquidity, our operations and financial condition may be adversely affected.~~

~~The long-term impact of this or any other pandemic remains uncertain, as viruses may be transmitted through human contact,~~at all, and the ~~risk of contracting viruses~~failure to complete the Merger could cause employees or guests to avoid gathering in public places, which has adversely impacted our operations, and could further have longer-term adverse effects on our restaurant guest traffic or the ability to adequately staff our restaurants. Additionally, it is possible that we may experience some reputational harm due to our responses to the COVID‑19 pandemic that may negatively impact our business and results of operations. We will be adversely affected if government authorities impose longer-term restrictions on public gatherings, human interactions, operations of restaurants, or mandatory closures. Even if such measures are not implemented and a virus or other disease does not spread significantly after we fully reopen our restaurants, any continuing perceived risk of infection or health risk may adversely affect our business, revenues, cash flows, liquidity, financial condition and results of operations. Further deterioration in our results from operations could prompt additional long-lived and intangible asset impairment charges, an increase in our valuation allowance relative to deferred tax assets or the write‑down of other assets recorded on the Company’s consolidated balance sheets. There may be other effects of the COVID-19 pandemic that are not yet identified and may materially adversely affect our business.

~~The COVID-19 pandemic has disrupted our Board’s review of strategic alternatives.~~

As part of the Board’s previously announced review of strategic alternatives, the Company retained the investment banking firm of Piper Sandler in August 2019 to assist the Company in its evaluation of strategic alternatives, with a particular focus on a sale of the entire Company. The Board believed, and took into account the views of shareholders, that the small size of the Company made it inefficient to be a standalone publicly traded company. Piper Sandler ultimately contacted over 125 potential interested parties and through an exhaustive process, three interested parties emerged as serious potential acquirers. One of those parties was in advanced negotiations with the Company for an acquisition at a premium to the then current market price. The initial impacts of the COVID-19 pandemic led the potential acquirer to reduce its proposed purchase price twice and to insist on conditions relating to the performance of the Company. Ultimately, when government entities mandated the closure of the Company’s restaurants, except for limited carry-out, the Board determined that no transaction at a price that reflected the long-term value of the Company would be able to be consummated until the resolution of uncertainties about the pandemic and the return of the Company’s business, ~~to satisfactory levels. For~~financial results and stock price.

We can provide no assurance that the near term, the Company intends to focus on rebuilding its revenue base as its restaurants are able to reopen and increase capacity by providing an outstanding dining experience for its guests. The Board currently believes itMerger will be ~~sometime in 2021 before~~completed on a timely basis or at all. The Merger is subject to a number of conditions, including the ~~Company can conclude its evaluation of strategic alternatives focusing on the potential sale~~approval of the ~~Company.~~

Merger Agreement by the Company’s shareholders, which are not within our control. There can be no assurance as to when, or if, the conditions to closing of the Merger will be satisfied or waived or that other events will not intervene to delay the ~~exploration of strategic alternatives will~~Merger or result in the ~~identification~~termination of the Merger Agreement, including the failure to obtain the approval of the Company’s shareholders or ~~consummation of any transaction or any other particular outcome. Speculation regarding any developments~~litigation related to the ~~review~~Merger, which may involve related significant costs of ~~strategic alternatives~~defense, indemnification and perceived uncertainties related to the future of the Company could cause our stock price to fluctuate significantly. There can be no assurance that our review of strategic alternatives will not cause the diversion of management’s attention, incurrence of significant transaction expenses,liability.

Any failure to ~~retain or attract key personnel, vendors or customers, or exposure to potential litigation. If we are unable to mitigate these or other potential risks related to~~complete the ~~uncertainty caused by our exploration of strategic alternatives, it may disrupt our business or~~Merger could have a ~~material adverse effect~~negative impact on our business, financial ~~condition,~~results and stock price, as well as on our relationships with our customers, suppliers and employees. In addition, if the Merger Agreement is terminated, in certain circumstances, we may be required to pay SPB Hospitality a termination fee of $7,750.

The Company’s business and financial results could be adversely impacted during the pendency of the Merger, particularly if there is a delay in the completion of the Merger.

The Merger may cause disruption to our business, business relationships or current plans and create uncertainty surrounding our ongoing business operations, which could materially and adversely impact our business, results of operations ~~or cash flows.~~

~~There can~~and financial condition, regardless of whether the Merger is completed, including as a result of the following (all of which could be ~~no assurance that any potential transaction or other strategic alternative, if identified, evaluated and consummated, will provide greater value to our shareholders than that reflected~~exacerbated by a delay in the ~~current stock price.~~completion of the Merger):

In addition, we have incurred, and will continue to incur, significant costs, expenses and fees for professional services and other transaction costs in connection with the Merger, and many of these fees and costs are payable by us regardless of whether or not the Merger is completed. We may also incur unexpected costs, charges or expenses resulting from the Merger.

The Merger Agreement limits the Company’s ability to pursue alternatives to the Merger.

The Merger Agreement contains provisions that restrict the ability of the Company to sell its business to a party other than SPB Hospitality. These provisions include a general prohibition on the Company soliciting any acquisition proposal or offer for a competing transaction. Further, ~~our Board may determine~~the ability of the Company’s board of directors to ~~suspend~~withdraw or adversely modify its recommendation to approve the Merger Agreement is limited by the terms of the Merger Agreement. Under the terms of the Merger Agreement, prior to the approval of the Merger Agreement by the Company’s shareholders, the Company’s board of directors is permitted to take certain of these actions and, in certain circumstances, terminate the ~~exploration~~Merger Agreement only if it determines in good faith that the

failure to take such action would be inconsistent with its fiduciary duties under applicable law. Under certain circumstances, in accordance with the Merger Agreement, such action would obligate the Company to pay to SPB Hospitality a termination fee of ~~strategic alternatives at any time due~~$7,750. While the Company believes these provisions are reasonable and not preclusive of other offers, the provisions may discourage a third party that has an interest in acquiring all or a significant part of the Company from considering or proposing such a transaction, even if that party were prepared to ~~various factors. Any~~pay consideration with a higher per-share value than the currently proposed Merger consideration. Furthermore, the termination fee may result in a potential ~~transaction or other outcome~~competing acquirer proposing to pay a lower per-share price to acquire the Company than it might otherwise have proposed to pay because of ~~this process is also dependent upon a number~~the added expense of ~~factors~~the $7,750 termination fee that may ~~be beyond our control, including among other factors, market conditions, industry trends, regulatory limitations and~~become payable by the ~~interest of third parties~~Company in ~~our business.~~certain circumstances.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Tennessee		47-1608715
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3401 West End Avenue, Suite 260 P.O. Box 24300
Nashville, Tennessee		37202
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock, ~~$0.001~~ par value $0.001 per share	JAX	New York Stock Exchange

Large accelerated filer	☐	Accelerated filer	☑☐

Non-accelerated filer	☐☑	Smaller reporting company	☑

Emerging growth company	☑☐

PART I. FINANCIAL INFORMATION		3

Item 1. Financial Statements (Unaudited)		3

Condensed Consolidated Balance Sheets		3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income~~		4

Condensed Consolidated Statements of Stockholders’ Equity		5

Condensed Consolidated Statements of Cash Flows		6

Notes to Condensed Consolidated Financial Statements		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		2016

Item 3. Quantitative and Qualitative Disclosures About Market Risk		3530

Item 4. Controls and Procedures		3631

PART II. OTHER INFORMATION		3732

Item 1. Legal Proceedings		3732

Item 1A. Risk Factors		3732

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		3832

Item 3. Defaults Upon Senior Securities		3833

Item 4. Mine Safety Disclosures		3833

Item 5. Other Information		3833

Item 6. Exhibits		3934

SIGNATURES		4035

Exhibit No.		Exhibit Description

2.1		Agreement and Plan of Merger, dated as of July 2, 2021, by and among J. Alexander’s Holdings, Inc., SPB Hospitality LLC, and Titan Merger Sub, Inc. (Exhibit 2.1 of Current Report on Form 8-K filed July 6, 2021 (File No. 1-37473), is incorporated herein by reference).*

3.1		Amended and Restated Charter of J. Alexander’s Holdings, Inc., dated September 14, 2015 (Exhibit 3.1 of Current Report on Form 8-K filed September 17, 2015 (File No. 1-37473), is incorporated herein by reference).

3.2		Articles of Correction to Amended and Restated Charter of J. Alexander’s Holdings, Inc., dated September 22, 2015 (Exhibit 3.2 of Form S-8 filed November 3, 2015 (File No. 333-207780), is incorporated herein by reference).

3.3		Amended and Restated Bylaws of J. Alexander’s Holdings, Inc., dated September 14, 2015 (Exhibit 3.2 of Current Report on Form 8-K filed September 17, 2015 (File No. 1-37473), is incorporated herein by reference).

3.4		Amendment No. 1 to Amended and Restated Bylaws of J. Alexander’s Holdings, Inc., dated March 12, 2020 (Exhibit 3.1 of Current Report on Form 8-K filed March 13, 2020 (File No. 1-37473), is incorporated herein by reference).

3.5		Second Amended and Restated LLC Agreement of J. Alexander’s Holdings, LLC, dated September 28, 2015 (Exhibit 3.4 of Quarterly Report on Form 10-Q filed November 9, 2015 (File No. 1-37473), is incorporated herein by reference).

~~10.1~~		Amendment to Promissory Note, dated April 15, 2020, by and between J. Alexander’s, LLC and Pinnacle Bank (Exhibit 10.1 of Quarterly Report on Form 10-Q filed June 9, 2020 (File No. 1-37473), is incorporated herein by reference).

~~10.2~~		Waiver Letter, dated May 6, 2020, by and between J. Alexander’s, LLC and Pinnacle Bank (Exhibit 10.2 of Quarterly Report on Form 10-Q filed June 9, 2020 (File No. 1-37473), is incorporated herein by reference).

~~10.3~~		Third Amended and Restated Loan Agreement, dated June 5, 2020, by and between J. Alexander’s, LLC and Pinnacle Bank (Exhibit 10.1 of Current Report on Form 8-K, filed June 9, 2020 (File No. 1-37473), is incorporated herein by reference).

~~10.4~~		Cooperation Agreement, dated April 20, 2020, by and between the Company, Ancora Advisors, LLC, Ancora Merlin Institutional LP, Ancora Merlin LP, Ancora Catalyst Institutional LP, Ancora Catalyst LP, Ancora/Thelen Small-Mid Cap Mutual Fund and Frederick DiSanto (Exhibit 10.1 of Current Report on Form 8-K, filed April 20, 2020 (File No. 1-37473), is incorporated herein by reference).

~~18.1~~		~~Preferability Letter from Independent Registered Public Accounting Firm (Exhibit 18.1 of Quarterly Report on Form 10-Q filed June 9, 2020 (File No. 1-37473), is incorporated herein by reference).~~

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101		The following financial information from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~June 28, 2020,~~July 4, 2021, formatted in Inline XBRL (Extensible Business Reporting Language) includes: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) ~~Income,~~, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows and (v) Notes to Condensed Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document.


104		The cover page from the ~~Company's~~Company’s Quarterly Report on Form 10-Q for the quarter ended ~~June 28, 2020,~~July 4, 2021, formatted in Inline XBRL (included in Exhibit 101).


*		Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request.

		J. ALEXANDER’S HOLDINGS, INC.

Date: August ~~6, 2020~~17, 2021		/s/ Mark A. Parkey
		Mark A. Parkey
		President and Chief Executive Officer (Principal Executive Officer)

Date: August ~~6, 2020~~17, 2021		/s/ Jessica L. Hagler
		Jessica L. Hagler
		Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial Officer)