LIMONEIRA COMPANY (NASDAQ:LMNR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
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”) 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 CARES Act.
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
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.
Forward-Looking Statements
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’s SEC 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.
About LIMONEIRA COMPANY (NASDAQ:LMNR)
Limoneira Company is an agribusiness and real estate development company. The Company’s operations consist of fruit production, sales and marketing, rental operations, real estate development and capital investment activities. The Company’s three business divisions are agribusiness, rental operations and real estate development. The Company’s agribusiness division consists of two segments, namely lemon operations and other agribusiness, and includes its farming, harvesting, lemon packing and lemon sales operations. The Company’s rental operations business division includes its residential and commercial rentals, leased land operations and organic recycling. The Company’s real estate development business division includes its real estate projects and development. The Company operates its packinghouses in Santa Paula, California and Yuma, Arizona. The Company’s water resources include water rights, usage rights and pumping rights to the water in aquifers.
