| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
As previously disclosed, J. Alexander’s Holdings, Inc. (the “Company”) is party to that certain Second Amended and Restated Loan Agreement, dated May 20, 2015, by and between J. Alexander’s, LLC and Pinnacle Bank, as amended (the “Loan Agreement”). The Loan Agreement consists of the following loans: (i) a $5,000,000 term loan that matures on September 3, 2021 (the “Mortgage Loan”), (ii) a $20,000,000 development line of credit that matures on September 3, 2021 (the “Development Line of Credit”), (iii) a $10,000,000 term loan that matures on May 3, 2020 (the “Term Loan”), and (iv) a $1,000,000 revolving line of credit that matures on September 3, 2021 (the “Revolving Line of Credit”). As of December 29, 2019, approximately $4,584,000 and $1,389,000, was outstanding under the Mortgage Loan and the Term Loan, respectively. As of December 29, 2019, approximately $4,000,000 and $0 was outstanding under the Development Line of Credit and the Revolving Line of Credit, respectively, and a total of $17,000,000 was available to the Company for borrowing under these lines of credit on this date. For additional information on the terms and conditions of the Loan Agreement, please see “Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements, Note 10 – Debt” in the Company’sAnnual Report on Form10-K for the fiscal year ended December 29, 2019, which is incorporated herein by reference.
On March 24, 2020, the Company announced it drew down the remaining $17,000,000available under the Development Line of Credit and the Revolving Line of Credit (the “Credit Draw”). Following the Credit Draw, a total of approximately $25,722,000 was outstanding under the Loan Agreement. Pursuant to the terms of the Loan Agreement, the borrowings under the Loan Agreement bear interest at30-day LIBOR plus a sliding interest rate scale determined by a maximum adjusted debt to EBITDAR ratio (following the Credit Draw, currently set at30-day LIBOR plus 1.85%).
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 novel coronavirus(COVID-19) outbreak. The proceeds from the Credit Draw will be available to be used for general corporate purposes, including working capital.
| Item 7.01. | Regulation FD Disclosure. |
On March 24, 2020, the Company issued a press release announcing the Credit Draw and certain updates regarding the Company’s operations in light of current disruption and uncertainty resulting from the novel coronavirus(COVID-19) outbreak. A copy of the press release is being furnished as Exhibit 99.1.
The information in this Item 7.01 in this Current Report on Form8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
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