| Item 2.02. | Results of Operations and Financial Condition. |
On June 9, 2020, J. Alexander’s Holdings, Inc. (the “Company”) issued a press release announcing earnings results for the Company and its subsidiaries for its fiscal first quarter ended March 29, 2020. A copy of the press release is being furnished as Exhibit 99.1.
The information in this Item 2.02 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 2.03. | Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant. |
On June 5, 2020, J. Alexander’s, LLC, an indirect subsidiary of the Company, entered into a Third Amended and Restated Loan Agreement with Pinnacle Bank (the “Third Amended and Restated Loan Agreement”), which provides for a $15,000,000 increase in the Revolving Line of Credit from $1,000,000 to $16,000,000 as described below. The Third Amended and Restated Loan Agreement amends and restates in its entirety the Second Amended and Restated Loan Agreement, dated May 20, 2015, as amended, with Pinnacle Bank (the “Prior Loan Agreement”).
The borrower under the Third Amended and Restated Loan Agreement is J. Alexander’s, LLC, and it is guaranteed by J. Alexander’s Holdings, LLC and certain of its subsidiaries. The indebtedness outstanding under the Third Amended and Restated Loan Agreement is secured by liens on certain personal property of the Company and its subsidiaries, subsidiary guarantees, and a mortgage lien on 17 of the Company’s restaurant locations. The Third Amended and Restated Loan Agreement, among other things, permits payments of tax dividends to members, restricts liens and encumbrances, restricts dividends, and contains certain other provisions customarily included in such agreements.
The Company currently has four separate notes under the Third Amended and Restated Loan Agreement, all of which mature on September 3, 2021:
| | • | A $16,000,000 revolving line of credit (“Revolving Line of Credit”). |
| | • | A $20,000,000 development line of credit. |
| | • | A $10,000,000 term loan. |
Under the Third Amended and Restated Loan Agreement, the Revolving Line of Credit includes an increase in $15,000,000 of capacity (the “Additional Capacity”) over the $1,000,000 available under the Prior Loan Agreement, with such Additional Capacity being available for general corporate purposes, including working capital and letters of credit. Access to the Additional Capacity is contingent upon the Company achieving certain minimum revenue amounts as set forth in the Third Amended and Restated Loan Agreement.
Pursuant to the terms of the Third Amended and Restated Loan Agreement, the borrowings under the Revolving Line of Credit bear interest at30-day LIBOR plus a margin of 2.50%, with a minimum LIBOR of 1.50%. Interest rates for the remaining three notes remain unchanged.
