Item 1.01 Entry into a Material Definitive Agreement.
On April 17, 2020, Limoneira Company (the "Company") entered into a Promissory
Note with City National Bank, which provides for a loan in the amount of
$3,609,200 (the "PPP Loan") pursuant to the Paycheck Protection Program under
the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act"). The
PPP Loan has a two-year term and bears interest at a rate of 1.0% per annum.
Monthly principal and interest payments are deferred for six months after the
date of disbursement. The PPP Loan may be prepaid at any time prior to maturity
with no prepayment penalties. The Promissory Note contains events of default and
other provisions customary for a loan of this type. The Paycheck Protection
Program provides that the PPP Loan may be partially or wholly forgiven if the
funds are used for certain qualifying expenses as described in the CARES Act.
The Company intends to use the entire PPP Loan amount for qualifying expenses
and to apply for forgiveness of the loan in accordance with the terms of the
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 of this Current Report on Form
8-K is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure
The coronavirus disease 2019 ("COVID-19") pandemic has had an adverse impact on
the industries and markets in which the Company conducts business. In
particular, the United States lemon market has seen a significant decline in
volume, with lemon demand falling more than 50% since wide spread shelter in
place orders were issued in mid-March, resulting in a significant market
oversupply. The export market for fresh product has also significantly declined
due to COVID-19 impacts. These market and industries pressures are causing, and
are likely to continue to cause, adverse impacts on our business, financial
position and liquidity. The proceeds from the PPP Loan described in Item 1.01
above will be used for certain qualifying payroll costs under the CARES Act and,
as a result of receiving the PPP Loan, the Company expects to be able to retain
100% of its workforce.
This Form 8-K contains forward-looking statements, within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements are based on
Limoneira's current expectations about future events and can be identified by
terms such as "expect," "may," "anticipate," "intend," "should be," "will," "is
likely to," "strive to," and similar expressions referring to future periods.
Limoneira believes the expectations reflected in the forward-looking statements
are reasonable but cannot guarantee future results, level of activity,
performance or achievements. Actual results may differ materially from those
expressed or implied in the forward-looking statements. Therefore, Limoneira
cautions you against relying on any of these forward-looking statements. Factors
that may cause future outcomes to differ materially from those foreseen in
forward-looking statements include, but are not limited to: risks related to the
COVID-19 outbreak, changes in laws, regulations, rules, quotas, tariffs and
import laws; weather conditions that affect production, transportation, storage,
import and export of fresh product; increased pressure from crop disease,
insects and other pests; disruption of water supplies or changes in water
allocations; pricing and supply of raw materials and products; market responses
to industry volume pressures; pricing and supply of energy; changes in interest
and currency exchange rates; availability of financing for land development
activities; political changes and economic crises; international conflict; acts
of terrorism; labor disruptions, strikes or work stoppages; loss of important
intellectual property rights; inability to pay debt obligations; inability to
engage in certain transactions due to restrictive covenants in debt instruments;
government restrictions on land use; and market and pricing risks due to
concentrated ownership of stock. Other risks and uncertainties include those
that are described in Limoneira'sSEC filings that are available on the SEC's
website at http://www.sec.gov. Limoneira undertakes no obligation to
subsequently update or revise the forward-looking statements made in this press
release, except as required by law.
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