What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-12-02 compared with 2023-12-06 · 295 added, 283 removed, 541 unchanged (52% of the section changed)

Financial Statements and Supplementary Data

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Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID 49 )

Report of Independent Registered Public Accounting Firm F o r T he Y ear E nded Sep t e mber 30, 2024 (PCAOB ID 248 )

Report of Independent Registered Public Accounting Firm For The Year Ended September 30, 2023 (PCAOB ID 49)

Consolidated Financial Statements:

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All schedules are omitted for the reason that they are not applicable or the required information is included in the financial statements or notes.

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Alico, Inc.

Board of Directors and Stockholders

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of Alico, Inc.

and its subsidiaries (the Company) as of September 30, 2023 and 2022, the related consolidated statements of operations, changes in equity and cash flows for each of the three years in the period ended September 30, 2023, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended September 30, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated December 6, 2023 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

We have audited the accompanying consolidated balance sheet of Alico, Inc.

(a Florida corporation) (and subsidiaries (the “Company”) as of September 30, 2024, the related consolidated statements of operations, changes in equity, and cash flows for the year ended September 30, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024, and the results of its operations and its cash flows for the year ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical audit matter

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(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Net Realizable Value of Unharvested Fruit Crop on the Trees

As described within Note 3 to the financial statements, the Company values inventory at the lower of cost or net realizable value.

As described further in note 3 to the financial statements, the Company values inventory at the lower of cost or net realizable value.

At September 30, 2024, the consolidated inventory balance included unharvested fruit crop on the trees of $28,921,000.

The Company assesses the carrying value of unharvested fruit crop on the trees, including the determination of adjustments to net realizable value, by applying judgment in developing estimates such as the expected future crop yield and future citrus pricing.

We identified the net realizable value of unharvested fruit crop on the trees as a critical audit matter because of the significant judgments utilized by management in developing the accounting estimate.

We identified management’s estimate of the net realizable value of unharvested fruit crop on the trees as a critical audit matter.

The principal considerations for our determination that net realizable value of unharvested fruit crop on the trees is a critical audit matter are the significant judgments utilized by management in developing the accounting estimate.

Auditing management’s estimates and assumptions required a high degree of auditor judgment and increased audit effort due to the impact these assumptions have on the net realizable value of unharvested fruit crop on the trees.

Our audit procedures related to the Company’s estimates and assumptions of the net realizable value of unharvested fruit crop on the trees included the following, among others:

• We obtained an understanding of the relevant controls related to management’s evaluation of the net realizable value of unharvested fruit crop on the trees, and tested such controls for design and operating effectiveness, including controls around management’s evaluation of the expected future crop yield and future citrus pricing.

• We tested the completeness of the population of unharvested fruit crop on the trees that were subject to net realizable value adjustments.

Our audit procedures related to the net realizable value of unharvested fruit crop on the trees included the following, among others:

• We obtained an understanding and evaluated the design and implementation of management’s controls related to the evaluation of the net realizable value of unharvested fruit crop on the trees, including the evaluation of the expected future crop yield.

• We tested the accumulated production costs of the unharvested fruit crop on the trees that were subject to net realizable value adjustments.

• We recalculated the mathematical accuracy of the net realizable value of unharvested fruit crop on the trees.

• We performed a comparison of management’s prior forecasts of future crop yield and future citrus pricing to actual results.

• We performed site observations and obtained industry data to evaluate the reasonableness of management's estimates of future crop yield and future citrus pricing.

/s/ RSM US LLP

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• We performed a retrospective review of management’s prior year expected future crop yield to actual results in the current year.

• We performed site observations and obtained industry data to evaluate the reasonableness of management's estimates of future crop yield.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2023.

Orlando, Florida

Tampa, Florida

December 2, 2024

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Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Alico, Inc.

Opinion on the Internal Control Over Financial Reporting

We have audited Alico, Inc.'s and its subsidiaries (the Company) internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2023, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of September 30, 2023 and 2022, the related consolidated statements of operations, changes in equity and cash flows for each of the three years in the period ended September 30, 2023, and the related notes to the consolidated financial statements of the Company and our report dated December 6, 2023 expressed an unqualified opinion.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Alico, Inc.

(the Company) as of September 30, 2023, the related consolidated statements of operations, changes in equity and cash flows, for the year then ended, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2023, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

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We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

We served as the Company’s auditor from 2007 to 2023.

Orlando, Florida

December 6, 2023

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CONSOLIDATED BALANCE SHEETS

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See accompanying notes to the consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

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Years Ended September 30,

2023 2022 2021

Operating revenues:

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Total operating expenses 103,026 33,400

Gross profit (loss) 6,446 ( 14,765 ) 23,893

Gross (loss) profit ( 56,383 ) 6,446

General and administrative expenses 11,071 10,643

(Loss) income from operations ( 4,197 ) ( 24,844 ) 14,440

Loss from operations ( 67,454 ) ( 4,197 )

Other income (expense), net:

Investment and interest income, net 58 21 23

Interest income 385 58

Interest expense ( 3,538 ) ( 4,911 )

Gain on sale of property and equipment 11,509 41,102 35,898

Other income, net — — 13

Gain on sale of property & equipment 81,559 11,509

Total other income, net 78,406 6,656

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See accompanying notes to the consolidated financial statements .

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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Shares Amount Shares Amount

September 30, 2020 8,416 $ 8,416 $ 19,685 924 $ ( 30,779 ) $ 221,531 $ 218,853 $ 5,441 $ 224,294

Net income (loss) — — — — — 34,859 34,859 ( 39 ) 34,820

Dividends — — — — — ( 10,227 ) ( 10,227 ) — ( 10,227 )

Stock-based compensation — — 304 ( 33 ) 926 — 1,230 — 1,230

September 30, 2021 8,416 8,416 19,989 890 ( 29,853 ) 246,163 244,715 5,402 250,117

Balance at September 30, 2022 8,416 $ 8,416 $ 19,784 829 $ ( 27,948 ) $ 243,490 $ 243,742 $ 5,123 $ 248,865

Net income (loss) — — — — — 1,835 1,835 ( 177 ) 1,658

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Capital contribution received from noncontrolling interest — — — — — — — 440 440

Executives stock exercises — — 34 — 431 — 465 — 465

Stock-based compensation — — 261 ( 23 ) 674 — 935 — 935

September 30, 2022 8,416 8,416 19,784 829 ( 27,948 ) 243,490 243,742 5,123 248,865

Balance at September 30, 2023 8,416 $ 8,416 $ 20,045 806 $ ( 27,274 ) $ 243,804 $ 244,991 $ 5,386 $ 250,377

Net income (loss) — — — — — 6,973 6,973 ( 618 ) 6,355

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Stock-based compensation — — 139 ( 18 ) 580 — 719 — 719

September 30, 2023 8,416 $ 8,416 $ 20,045 806 $ ( 27,274 ) $ 243,804 $ 244,991 $ 5,386 $ 250,377

Balance at September 30, 2024 8,416 $ 8,416 $ 20,184 788 $ ( 26,694 ) $ 249,253 $ 251,159 $ 5,136 $ 256,295

See accompanying notes to the consolidated financial statements .

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Years Ended September 30,

2023 2022 2021

Year Ended September 30,

Net cash (used in) provided by operating activities:

Net income $ 6,355 $ 1,658

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation, depletion and amortization 15,010 15,487

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Inventory net realizable value adjustment 48,099 1,616

Casualty loss – tree and building damage — 1,400 —

Loss on disposal of property and equipment 6,990 9,624

Inventory casualty loss — 14,900 —

Stock-based compensation expense 719 935

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Other liabilities ( 416 ) ( 499 )

Net cash (used in) provided by operating activities ( 6,254 ) 6,523 16,504

Net cash used in operating activities ( 30,497 ) ( 6,254 )

Cash flows from investing activities:

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Other, net ( 395 ) 412

Net cash (used in) provided by investing activities ( 4,123 ) 22,468 ( 3,268 )

Net cash provided by (used in) investing activities 68,178 ( 4,123 )

Cash flows from financing activities:

3 unchanged sentences

Capital contribution received from noncontrolling interest 368 441

Proceeds from exercise of stock options — 465 —

Dividends paid ( 1,524 ) ( 4,933 )

Net cash provided by (used in) financing activities 13,204 ( 29,012 ) ( 32,037 )

Net increase (decrease) in cash and cash equivalents and restricted cash 2,827 ( 21 ) ( 18,801 )

Net cash (used in) provided by financing activities ( 37,975 ) 13,204

Net (decrease) increase in cash and cash equivalents and restricted cash ( 294 ) 2,827

Cash and cash equivalents and restricted cash at beginning of the period 3,692 865

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Supplemental disclosure of cash flow information:

Cash paid for interest;

net of amount capitalized $ 4,433 $ 3,192 $ 3,940

Cash paid for income taxes $ — $ 3,430 $ 11,770

Cash paid for interest, net of amount capitalized $ 3,848 $ 4,433

Cash paid for income taxes, net of refunds $ 890 $ —

Supplemental disclosure of non-cash investing and financing activities:

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See accompanying notes to the consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Description of Business and Basis of Presentation

Description of Business

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”), is a Florida agribusiness and land management company owning approximately 72,000 acres of land and also mineral rights throughout Florida.

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”), is a Florida agribusiness and land management company owning approximately 53,371 acres of land and approximately 48,700 acres of oil, gas and mineral rights throughout Florida.

Alico holds these mineral rights on substantially all its owned acres, with additional mineral rights on other acres.

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Kiernan, the Company’s President and Chief Executive Officer and chief operating decision maker (“CODM”), in deciding how to assess performance and allocate resources.

The Company’s CODM assesses performance and allocates resources based on two operating segments:

The Company’s CODM assesses performance and allocates resources based on two reportable segments:

(i) Alico Citrus and (ii) Land Management and Other Operations.

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Accordingly, the Company has recorded a noncontrolling interest in the equity of such entity.

Citree had a net loss of $ 361 thousand for the year ended September 30, 2023, a net loss of $ 1,170 thousand for the year ended September 30, 2022, and a net loss of $ 79 thousand for the year ended September 30, 2021, respectively, of which a net loss of $ 184 thousand, a net loss of $ 597 thousand, and a net loss of $ 41 thousand were attributable to the Company for the years ended September 30, 2023, 2022 and 2021, respectively.

Citree had a net loss of $ 1,261 and $ 361 for the years ended September 30, 2024 and 2023, respectively, of which a net loss of $ 643 and $ 184 were attributable to the Company for the years ended September 30, 2024 and 2023, respectively.

The net loss for the year ended September 30, 2024 was primarily due to lower revenue as Citree's trees continue to recover from the impact of Hurricane Ian.

The net loss for the year ended September 30, 2023 was primarily due to lower revenue as a result of the fruit drop from Hurricane Ian.

The net loss for the year ended September 30, 2022 was primarily due to the inventory casualty loss and net realizable value adjustment as result of the fruit loss sustained from Hurricane Ian.

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Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships and other transactions affected by reference rate reform.

The Company’s floating rate notes and variable funding notes have historically borne interest at fluctuating interest rates based on LIBOR.

Given the anticipated cessation of LIBOR, the Company renegotiated its variable rate loan agreements, to instead utilize fluctuating interest rates based on the 30 day Secured Overnight Financing Rate (SOFR), some with the change having taken effect late in the year ended September 30, 2022, and one with the change having taken effect early in the year ended September 30, 2023.

ASU 2020-04 was effective March 12, 2020 through December 31, 2022.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848, to extend the sunset date from December 31, 2022 to December 31, 2024.

The adoption of this standard will not have a material effect on the Company's consolidated financial statements, as it has converted all of its variable rate loan agreements from LIBOR to SOFR as noted above.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments—Credit Losses (“ASC 326”):

Measurement of Credit Losses on Financial Instruments to introduce a new model for recognizing credit losses on financial instruments based on estimated current expected credit losses (" CECL").

Under the new standard, an entity is required to estimate CECL on trade receivables at inception, based on historical information, current conditions, and reasonable and supportable forecasts.

The guidance is effective for the Company for annual periods beginning after December 15, 2022, including interim periods within those fiscal years.

Early application is permitted.

The Company adopted ASC 326 on October 1, 2023, and it did not have a material impact on the Company’s consolidated statements of operations, balance sheets, or cash flows in its Consolidated Financial Statements upon adoption.

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures,” which amends Topic 280 primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 will become effective for us on October 1, 2024.

The Company is currently evaluating this guidance.

The adoption will modify disclosures but will not have an impact on the Company's consolidated statements of operations, balance sheets, or cash flows in its Consolidated Financial Statements.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures,” which amends Topic 740 primarily through enhanced disclosures about an entity’s tax risks and tax planning.

The amendments are effective for public business entities in annual periods beginning after December 15, 2024, with early adoption permitted on a prospective or retrospective basis.

ASU 2023-09 will become effective for us on October 1, 2025.

The Company is currently evaluating the impact of the adoption of this accounting pronouncement on its tax disclosures but it will not impact the Company's consolidated statements of operations, balance sheets or cash flows in its Consolidated Financial Statements.

The Company has reviewed other recently issued accounting standards which have not yet been adopted to determine their potential effect, if any, on the results of operations or financial condition.

1 unchanged sentence

Reclassifications

Certain prior year amounts have been reclassified in the accompanying Financial Statements for consistent presentation to the current period.

These reclassifications had no impact on net income, equity, cash flows or working capital as previously reported.

Certain prior year amounts have been reclassified in the accompanying notes to the Financial Statements for consistent presentation to the current period.

These reclassifications had no impact on the Company's consolidated statements of operations, balance sheets, cash flows or working capital as previously reported.

The Company is primarily engaged in the production of fruit for sale to citrus markets, which is of a seasonal nature, and subject to the influence of natural phenomena and wide price fluctuations.

Historically, the second and third quarters of Alico’s year produce most of the Company’s annual revenue.

However, due to the timing of the harvest for the year ended September 30, 2024, more of the citrus crop was harvested in the first and second quarters of this fiscal year.

Working capital requirements are typically greater in the first and fourth quarters of the year, coinciding with harvesting cycles.

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For fruit sales, the Company recognizes revenue in the amount it expects to be entitled to be paid, determined when control of the products or services is transferred to its customers, which occurs upon delivery of and acceptance of the fruit by the customer and when the Company has a right to payment.

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For the sale of fruit, the Company has identified one performance obligation, which is the delivery of fruit to the processing facility of the customer (or harvesting of the citrus in the case of fresh fruit) for each separate variety of fruit identified in the respective contract with the respective customer.

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Differences between the estimates and the final realization of revenues at the close of the harvesting season can result in either an increase or decrease to reported revenues.

(in thousands) September 30,

Revenue recognized at a point-in-time $ 42,233 $ 36,911

Revenue recognized over time 4,410 2,935

Total $ 46,643 $ 39,846

Receivables under contracts, whereby pricing is based on contractual and market prices, are primarily paid at the floor amount and are collected within seven days after the harvest week.

2 unchanged sentences

Any adjustments to pricing because of the cost-plus calculation are collected or paid upon finalization of the calculation and agreement by both parties.

As of September 30, 2023, and September 30, 2022, the Company had total receivables relating to sales of citrus of $ 394 thousand and $ 171 thousand, respectively, recorded in Accounts Receivable, net, in the Consolidated Balance Sheets.

As of September 30, 2024, and September 30, 2023, the Company had total receivables relating to sales of citrus of $ 444 and $ 394 , respectively, recorded in Accounts Receivable, net, in the Consolidated Balance Sheets.

For grove management services, the Company has identified one performance obligation, which is the management of the third party’s groves.

2 unchanged sentences

The Company recognizes operating revenue, including a management fee, and corresponding operating expenses when such services are rendered and consumed.

In June 2022, a group of third-party grove owners, who are affiliated with each other (collectively, the “Grove Owners”), for which the Company was managing groves under a Property Management Agreement executed on July 16, 2020 with the Grove Owners, under which the Company performed grove management services, terminated the management relationship under the Property Management Agreement with the Company as the Grove Owners decided to exit the citrus business.

As a result, all services relating to this Property Management Agreement and the accompanying management fee and reimbursed costs associated with performing grove management services ceased as of June 10, 2022.

The Company recorded $ 0 , $ 10,598 thousand and $ 15,752 thousand of operating revenue relating to these grove management services, including the management fee, during the years ended September 30, 2023, 2022 and 2021, respectively.

The Company recorded $ 0 , $ 9,711 thousand and $ 14,342 thousand of operating expenses relating to these grove management services during the years ended September 30, 2023, 2022 and 2021, respectively.

On October 30, 2023, the Company entered into the Grove Management Agreement with an unaffiliated group of third parties to provide citrus grove caretaking services for approximately 3,300 acres owned by such third parties.

Under the terms of the Agreement, the Company is reimbursed by the third parties for all its costs incurred related to providing these services and receives a management fee based on acres covered under this agreement.

The Agreement may be terminated with written notice provided at least 60 days prior to the commencement of the next fiscal year, occurring subsequent to September 30, 2024 and with shorter notice under certain conditions.

On September 20, 2024, the Grove Management Agreement was extended until December 31, 2024.

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Disaggregated Revenue

1 unchanged sentence

(in thousands) Years Ended September 30,

2023 2022 2021

Early and Mid-Season $ 14,534 $ 11,954

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The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate their fair values due to the short term and immediate nature of these financial instruments.

The carrying amounts and estimated fair values (Level 2) of debt instruments are as follows:

The carrying amounts and estimated fair values (Level 2) of debt instruments (see Note 7.

Long-Term Debt and Lines of Credit for further information) are as follows:

(in thousands) September 30, 2024 September 30, 2023

Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value

Corporate debt

Current long-term debt $ 1,410 $ 1,420 $ 2,566 $ 2,325

Long-term debt $ 126,753 $ 115,851 $ 108,589 $ 102,558

Long-term debt and lines of credit $ 91,141 $ 86,987 $ 126,753 $ 115,851

As of September 30, 2024 and 2023, the Company did not have any assets held for sale that had been measured at fair value on a non-recurring basis.

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The Company considers cash in banks and highly liquid instruments with an original maturity of three months or less to be cash and cash equivalents.

At various times throughout the year ended September 30, and as of September 30, 2023, some accounts held at financial institutions were in excess of the federally insured limit of $ 250 thousand.

At various times throughout the year ended September 30, and as of September 30, 2024, some

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accounts held at financial institutions were in excess of the federally insured limit of $ 250 .

The Company has not experienced any losses on these accounts and believes credit risk to be minimal.

Restricted Cash

Restricted cash is comprised of cash received from the sale of certain assets in which the use of funds is restricted.

Restricted cash of $ 248 at September 30, 2024 represents Cash-Secured Irrevocable Standby Letters of Credit to secure certain contractual obligations.

Restricted cash of $ 2,630 at September 30, 2023 is comprised of cash received from the sale of certain assets in which the use of funds is restricted.

For certain sales transactions, the Company sells property which serves as collateral for specific debt obligations and/or for which the Company intends to complete a (“1031 Exchange”) under section 1031 of the Internal Revenue Code.

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If an acceptable transaction is not consummated within this time period, the Company will need to pay income taxes on the gain from the sales transaction.

Accounts receivable

(in thousands) September 30,

Cash and cash equivalents $ 3,150 $ 1,062

Restricted cash 248 2,630

Cash and cash equivalents and restricted cash $ 3,398 $ 3,692

Accounts receivable, net

Accounts receivable from customers are generated from revenues based on the sale of citrus, grove management, leasing and other transactions.

The Company grants credit in the course of its operations to third party customers.

Accounts receivable is presented in accordance with the CECL impairment model as required under ASC 326.

The Company estimates a reserve for expected credit losses based on existing contractual payment terms, actual payment patterns of its customers, current and future economic and market conditions and individual customer circumstances.

The Company has determined that the reserve for expected credit losses at September 30, 2024 and 2023 was $( 73 ) and $( 14 ), respectively, and write-offs for the years ended September 30, 2024 and 2023 were not material.

The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral.

The Company provides an allowance for doubtful accounts for amounts which are not probable of collection.

The Company provides an allowance for credit losses for amounts which are not probable of collection.

The estimate, evaluated quarterly by the Company, is based on historical collection experience, current macroeconomic climate and market conditions and a review of the current status of each customer’s account.

1 unchanged sentence

Such changes in estimates are recorded in the period in which these changes become known.

The bad debt expense is included in general and administrative expenses in the Consolidated Statements of Operations.

The credit loss is included in general and administrative expenses in the Consolidated Statements of Operations.

The following table presents accounts receivable, net, as of September 30, 2024 and 2023:

1 unchanged sentence

Accounts receivable $ 844 $ 726

Allowance for doubtful accounts ( 14 ) ( 14 )

Allowance for credit losses ( 73 ) ( 14 )

Accounts receivable, net $ 771 $ 712

Concentrations

Accounts receivable from the Company’s major customer as of September 30, 2023 and 2022, and revenue from such customer for the years ended September 30, 2023, 2022 and 2021, are as follows:

Accounts receivable from the Company’s major customer as of September 30, 2024 and 2023, and revenue from such customer for the years ended September 30, 2024 and 2023, which is included in the Alico Citrus segment, are as follows:

(in thousands) Accounts Receivable Revenue % of Total Revenue

1 unchanged sentence

Tropicana $ — $ — $ 40,466 $ 32,403 86.8 % 81.3 %

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The citrus industry is subject to various factors over which growers have limited or no control, including weather conditions, disease, pestilence, water supply and market price fluctuations.

Market prices are highly sensitive to aggregate domestic and foreign crop sizes, as well as factors including, but not limited to, weather and competition from foreign countries.

The overall increase in Tropicana revenue, as a percentage of sales, was primarily due to lower caretaking revenue due to the termination in June 2022 of the agreement entered into in July 2020 with a group of third-party grove owners, who were affiliated with each other, to provide citrus grove caretaking and harvest and haul management services for 7,000 acres owned by such third parties.

Under the terms of this agreement, the Company was reimbursed by the third parties for all its costs incurred related to providing these services and received a management fee based on acres covered under this agreement.

The Company records both an increase in revenues and expenses when the Company provides these citrus grove caretaking management services.

The overall increase in Tropicana revenue, as a percentage of sales, was primarily due to an increase in pound solids produced during the year ended September 30, 2024, as we began to recover from Hurricane Ian which negatively impacted our harvest during the year September 30, 2023.

Accounting for government grants

The Company recognizes government grants when there is reasonable assurance that:

(1) the grant will be received and (2) all conditions will be met.

For income-based grants, the Company recognizes the income on a systemic basis over the periods in which it recognizes as expense the related costs for which the grant was intended to compensate.

In the year ended September 30, 2024, the Company received $ 2,962 of grant money from the Citrus Research and Field Trial Foundation’s (“CRAFT”) program to assist citrus growers in the State of Florida using Oxytetracycline (“OTC”) and other approved therapies to combat the effect of “greening” of their citrus trees.

These funds (including $ 35 received in October 2024) were recognized as a component of Inventories ($ 1,192 at September 30, 2024) in the Company’s Consolidated Balance Sheet and as a reduction of Operating expenses ($ 1,805 during the year ended September 30, 2024) in its Consolidated Statement of Operations as the fruit was sold, in order to align it to the period over which the expense related to the OTC treatments is recognized.

These grant monies were received in exchange for providing certain historical data to the CRAFT Foundation about the Company’s citrus groves.

The $ 1,805 of CRAFT funds received in January of 2024 covered substantially all of the costs of the OTC application for 2023-2024 harvest, $ 1,192 of CRAFT funds recognized in Inventories on the balance of the year ended September 30, 2024 covers approximately 35 % of the cost of OTC treatment for the 2024-2025 harvest season.

The Company may continue, but is not obligated, to participate in future CRAFT programs on the effects of the use of OTC on its Citrus Trees.

In February 2017, the FASB issued ASU 2017-05, “ Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets ” (ASC 610-20):

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Real estate costs incurred for the acquisition, development and construction of real estate projects are capitalized.

Depreciation is provided on a straight-line basis over the estimated useful lives of the depreciable assets, with the exception of leasehold improvements and assets acquired through capital leases, which are depreciated over their estimated useful lives if the lease transfers ownership or contains a bargain purchase option, otherwise the term of the lease.

Depreciation is provided on a straight-line basis over the estimated useful lives of the depreciable assets, with the exception of leasehold improvements and assets acquired through finance leases, which are depreciated over their estimated useful lives if the lease transfers ownership or contains a bargain purchase option.

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The estimated useful lives for property and equipment are primarily as follows:

3 unchanged sentences

Changes in circumstances, such as technological advances, or changes to our business model or capital strategy could result in the actual useful lives differing from the original estimates.

In those cases where the Company determines that the useful

life of property and equipment should be shortened, Alico depreciates the asset over its revised estimated remaining useful life, thereby increasing depreciation expense (see Note 5.

In those cases where the Company determines that the useful life of property and equipment should be shortened, Alico depreciates the asset over its revised estimated remaining useful life, thereby increasing depreciation expense (see Note 5.

Property and Equipment, Net for further information).

15 unchanged sentences

The Company identifies any potential impairment by comparing the carrying value of a reporting unit to its fair value.

The Company typically determines the fair value of its reporting units using a discounted cash flow valuation approach.

The Company typically determines the fair value of its reporting units using a market approach.

If a potential impairment is identified, the Company will determine the amount of goodwill impairment by comparing the fair value of a reporting unit with its carrying amount.

5 unchanged sentences

The provision for income taxes includes income taxes currently payable and those deferred as a result of temporary differences between the financial statements and the income tax basis of assets and liabilities.

Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are

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expected to be recovered or settled.

The effect of a change in income tax rates on deferred income tax assets and liabilities is recognized in income or loss in the period that includes the enactment date.

13 unchanged sentences

(in thousands) Years Ended September 30,

2023 2022 2021

Weighted Average Common Shares Outstanding – Basic 7,622 7,602

13 unchanged sentences

The Company records its inventory at the lower of cost or net realizable value.

In September 2022, the state of Florida’s citrus business, including the Company’s unharvested citrus crop, was significantly impacted by Hurricane Ian.

The impact of Hurricane Ian resulted in the premature drop of unharvested fruit.

Accordingly, for the years ended September 30, 2023 and 2022, the Company recorded $ 1,616 thousand and $ 6,676 thousand, respectively, for adjustments to reduce inventory to net realizable value as a result of the impact of Hurricane Ian, which impacted the Company’s unharvested citrus crop for the year ended September 30, 2022.

The Company undertook a process to estimate the amount of inventory casualty loss as of the date of Hurricane Ian.

Such process included a number of factors including touring all of the citrus groves by operational personnel to assess the estimated fruit drop by grove and the impact of damage to the citrus trees, and an estimate of fruit the Company expects to produce for the 2022-2023 harvest season after Hurricane Ian.

As a result, the Company recorded, for the year ended September 30, 2022, a casualty loss to reduce the carrying value of unharvested fruit crop on trees inventory by $ 14,900 thousand.

In the year ended September 30, 2023, the Company received insurance proceeds relating to Hurricane Ian of approximately $ 27,389 thousand for crop claims and $ 839 thousand relating to property and casualty damage claims, which have been recorded as a reduction in operating expenses in the Consolidated Statements of Operations.

No further insurance proceeds related to Hurricane Ian are expected.

In December 2022, the Consolidated Appropriations Act was signed into law by the federal government;

however, the details of the mechanism and funding of any Hurricane Ian relief still remains unclear and, if available, the extent to which we will be eligible.

We intend to take advantage of any such available programs as and when they become available.

We are currently working with Florida Citrus Mutual, the industry trade group, and government agencies on the federal relief programs available as part of the Consolidated Appropriations Act.

The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida.

During the years ended September 30, 2023, 2022 and 2021, the Company received $ 1,315 thousand, $ 1,123 thousand and $ 4,299 thousand, respectively, under the Florida Citrus Recovery Block Grant (“CRBG”) program.

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During the years ended September 30, 2024 and 2023 the Company recorded $ 48,099 and $ 1,616 , respectively, for adjustments to reduce inventory to net realizable value, within Operating expenses, which includes $ 19,549 recognized at September 30, 2024.

The incremental inventory adjustment is the result of expectations for a significantly lower than anticipated harvest of the Early and Mid-Season and Valencia crops for the 2024-2025 season.

The remainder of the adjustment for the year ended September 30, 2024 was due to significantly lower than anticipated harvests of the Early and Mid-Season and Valencia crops, during the 2023/2024 crop seasons as a result of the continued recovery from the impacts of Hurricane Ian.

The adjustment for the year ended September 30, 2023 was due to the premature drop of unharvested fruit as a result of Hurricane Ian in September 2022.

In the year ended September 30, 2024 the Company received insurance proceeds relating to Hurricane Ian of $ 299 for crop claims, as part of a final true-up of amounts due.

In the year ended September 30, 2023, the Company received insurance proceeds relating to Hurricane Ian of $ 27,389 for crop claims and $ 839 relating to property and casualty damage claims, all of which have been recorded as a reduction in operating expenses in the Consolidated Statements of Operations.

The Company was eligible for Hurricane Irma federal relief programs for block grants that were being administered through the State of Florida in 2023.

During the year ended September 30, 2023, the Company received $ 1,315 , under the Florida Citrus Recovery Block Grant (“CRBG”) program.

No further federal relief proceeds are expected related to Hurricane Irma.

These federal relief proceeds are included as a reduction to operating expenses in the Consolidated Statements of Operations.

On October 9, 2024, Hurricane Milton hit Florida and the Company's citrus groves sustained hurricane or tropical storm force winds for varying durations of time.

Based on observations to date, the Company sustained minimal tree damage;

however, there was measurable fruit drop from trees in our northern groves, particularly in Polk and Hardee County.

The Company will continue to evaluate the impact of the Hurricane on its anticipated harvest in assessing any incremental write-down to be recognized at December 31, 2024.

However, an estimate of the amount of any incremental write-down to inventory cannot be made at this time.

Assets Held for Sale

3 unchanged sentences

Ranch $ 69 $ 1,632

Alico Citrus $ 3,037 $ —

Total assets held for sale $ 3,106 $ 1,632

On September 18, 2023, the Company signed an Option Agreement for Sale and Purchase (“Option Agreement”) with the Board of Trustees of the Internal Improvement Trust Fund of the State of Florida for the sale of 17,229 acres of the Alico Ranch.

On September 21, 2023, Florida Governor Ron DeSantis and the Florida Cabinet approved the purchase of this land from Alico, under the Florida Forever Program, for approximately $ 77,600 thousand.

The sale is expected to close between December 2023 and February 2024.

During the year ended September 30, 2023, we sold approximately 2,255 acres of ranch land for approximately $ 12,000 thousand and recognized a gain of $ 11,432 thousand (including approximately 85 acres to Mr.

Kiernan, the Company’s President and CEO, on October 20, 2022, for $ 439 thousand ($ 5,161 per acre)).

Related Party Transactions for further information.

During the year ended September 30, 2022 we sold approximately 9,414 acres of ranch land for $ 41,421 thousand and recognized a gain of $ 39,124 thousand.

On April 19, 2024, the Company entered into an agreement to sell 798 acres of citrus land, which were not producing as expected, for $ 7,183 ($ 9,000 per acre).

This agreement includes an option to purchase approximately 680 additional acres within ten months of the closing date of the sale, at the same price per acre.

The 798 acre sale closed on June 28, 2024 (included in the September 30, 2024 land sales below).

In addition, the Company has a purchase option agreement to sell 899 acres of ranch and citrus land for $ 10,333 ($ 11,494 per acre) that expires on January 13, 2025.

During the year ended September 30, 2024, we sold approximately 18,354 acres of land for approximately $ 86,217 and recognized a gain of $ 81,416 (including 17,229 acres of the Alico Ranch to the State of Florida for approximately $ 77,631 in gross proceeds).

During the year ended September 30, 2023 we sold approximately 2,225 acres of ranch land for $ 12,000 and recognized a gain of $ 11,432 .

The Company recorded no impairment loss during the years ended September 30, 2024 and 2023.

During the year ended September 30, 2023, these proceeds were used for general corporate purposes.

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During the year ended September 30, 2024, the Company used a portion of the proceeds from these various asset sales to pay down debt (see Note 7.

Long-Term Debt and Lines of Credit for further information), purchase citrus groves and pay the dividend during the year.

Long-Term Debt and Lines of Credit for further information) and for general corporate purposes.

During the year ended September 30, 2023, these proceeds were used for general corporate purposes.

Property and Equipment, Net

9 unchanged sentences

Property and equipment, net $ 352,733 $ 361,849

For the year ended September 30, 2022, the Company recorded a casualty loss of $ 1,400 thousand with respect to one of its groves, which sustained tree loss of $ 1,300 thousand, and damage to one of its buildings of $ 100 thousand, as a direct result of Hurricane Ian.

For the years ended September 30, 2023, 2022 and 2021, the Company recognized a loss on the disposal of property and equipment of $ 9,624 thousand, $ 3,251 thousand and $ 2,338 thousand, respectively, due to tree clippings.

The significant

increase for the year ended September 30, 2023 was principally driven by a change in plans with respect to the management of a portion of one of its groves and an increase in clippings to support the planting of new trees.

In the year ended September 30, 2023, the Company recognized a $ 3,744 thousand loss on the disposal of a portion of one of its citrus groves, as it entered into a lease with a third-party to remove these trees and allow them to utilize this portion of the grove for other agricultural development.

For the years ended September 30, 2024 and 2023 the Company recognized a loss on the disposal of property and equipment of $ 6,990 and $ 9,624 , respectively, due to tree clippings, which has been recognized within Operating expenses.

These losses were principally driven by a decision not to continue to provide caretaking for certain groves which were under performing and a decision to enter a lease with a third-party to remove certain trees in exchange for allowing them to utilize a portion of the grove for other agricultural development during the years ended September 30, 2024 and 2023, respectively.

For the years ended September 30, 2024 and 2023 depreciation expense was $ 14,959 and $ 15,444 , respectively and depletion expense was $ 51 and $ 43 , respectively.

Accrued Liabilities

Accrued liabilities consist of the following at September 30, 2024 and September 30, 2023:

(in thousands) September 30,

Ad valorem taxes $ 1,898 $ 2,134

Accrued interest 554 1,102

Accrued employee wages and benefits 1,727 1,007

Accrued dividends 381 381

Accrued insurance 124 345

Professional fees 275 307

Other accrued liabilities 407 87

Total accrued liabilities $ 5,366 $ 5,363

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Long-Term Debt and Lines of Credit

13 unchanged sentences

Lines of Credit:

RLOC $ 8,394 $ —

WCLC — 24,722

1 unchanged sentence

( 671 ) ( 95 )

Lines of Credit $ 24,627 $ 4,818

1- Represents deferred financing fees on the RLOC.

Lines of Credit, net $ 7,723 $ 24,627

1- Represents deferred financing fees on the RLOC, included within Other non-current assets in the consolidated balance sheets.

Future maturities of long-term debt and lines of credit as of September 30, 2024 are as follows:

9 unchanged sentences

(in thousands) Years Ended September 30,

2023 2022 2021

Interest expense $ 3,538 $ 4,911

1 unchanged sentence

Total $ 4,798 $ 6,350

The Company’s credit facilities consist of fixed interest rate term loans originally in the amount of $ 125,000 thousand (“Met Fixed-Rate Term Loans”), variable interest rate term loans originally in the amount of, $ 57,500 thousand (“Met Variable-Rate Term Loans”), a $ 25,000 thousand revolving line of credit (“RLOC”) with Metropolitan Life Insurance Company and New England Life Insurance Company (collectively “Met”), and a $ 70,000 thousand working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc.

At September 30, 2023 and 2022, $ 25,000 thousand and $ 25,000 thousand, is available under the RLOC, respectively, and $ 45,030 thousand and $ 64,762 thousand was available under the WCLC, respectively.

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The Company’s credit facilities originally consisted of fixed interest rate term loans originally in the amount of $ 125,000 (“Met Fixed-Rate Term Loans”), variable interest rate term loans originally in the amount of $ 57,500 (“Met Variable-Rate Term Loans”), a $ 25,000 revolving line of credit (“RLOC”) with Metropolitan Life Insurance Company ( “Met”) and a $ 70,000 working capital line of credit (“WCLC”) with Rabo Agrifinance, Inc.

On September 17, 2024, the Company amended the credit agreement with Met (the "Amended Credit Agreement") and the term loans and RLOC (the "Amended RLOC").

The primary terms of the amendments include an increase in the capacity of the Amended RLOC to $ 95,000 and an extension of its maturity to May 1, 2034.

In connection with entrance into the Amended Credit Agreement, the Company also repaid current borrowings under the WCLC with Rabo and there were no available borrowings under this facility at September 30, 2024, which was cancelled in October 2024.

As a result of the Amended Credit Agreement, the credit facilities now include the Met Fixed-Rate Term Loans and the Amended RLOC.

The term loans and RLOC are secured by real property.

The security for the term loans and RLOC consists of 38,200 gross acres of citrus groves and originally included 5,800 gross acres of ranch land.

In April 2021, the 5,800 gross acres of ranch land was released as security against the term loans and RLOC and only the 38,200 gross acres of citrus groves remain as security for the term loans and RLOC.

The WCLC is collateralized by the Company’s current assets and certain other personal property owned by the Company.

Initially, the Met Fixed-Rate Term Loans were subject to quarterly principal payments of $ 1,563 thousand and bore interest at 4.15 % per annum.

Effective May 1, 2021, the Company modified its Met Fixed-Rate Term Loans, which, in the aggregate, have a balance of $ 70,000 thousand after the prepayment of $ 10,313 thousand made in April 2021, and have a balance of $ 70,000 thousand to be interest-only, with a balloon payment to be paid at maturity on November 1, 2029.

The interest rate on these Met Fixed-Rate Term Loans, which were bearing interest at 4.15 %, was adjusted to 3.85 %.

As part of this modification, the Company no longer has the prepayment option previously allowed under the arrangement.

The Met Variable-Rate Term Loans are subject to quarterly principal payments of $ 406 thousand and historically bear an interest rate equal to 90-day LIBOR plus 165 basis points (the “LIBOR spread”).

Effective February 17, 2023, the Company agreed to defer the next three quarterly principal payments which were previously due May 2023, August 2023 and November 2023 to the maturity date of the loan.

For the year ended September 30, 2022, the LIBOR rate was effective from October 1, 2021 through July 31, 2022.

The LIBOR spread was subject to adjustment by Met beginning May 1, 2017 and was subject to further adjustment every two years thereafter until maturity.

No adjustment was made at May 1, 2019, or at May 1, 2021.

Effective August 1, 2022, the interest rate was renegotiated to the One Month Term Secured Overnight Financing Rate (SOFR) plus 175 basis points (the “SOFR spread”).

The SOFR spread is subject to adjustment by Met every 2 years beginning May 1, 2023, until maturity.

Interest on the term loans is payable quarterly.

The interest rates on the Met Variable-Rate Term Loans were 7.52 % per annum and 4.27 % per annum, as of September 30, 2023 and September 30, 2022, respectively.

The Met Variable-Rate Term Loans mature on November 1, 2029.

With respect to the RLOC, for the year ended September 30, 2022, the LIBOR-based rate was effective from October 1, 2021 through July 31, 2022 and bears interest at a floating rate equal to 90-day LIBOR plus 165 basis points, payable quarterly.

Effective August 1, 2022, the LIBOR-based rate was renegotiated to SOFR plus 175 basis points.

The SOFR spread is subject to adjustment by lender every 2 years beginning May 1, 2023, until maturity on November 1, 2029.

The security for the term loans and RLOC as of the most recent amendment, consists of approximately 36,800 gross acres of citrus groves.

The Met Fixed-Rate Term Loans are interest-only, with a balloon payment to be paid at maturity on November 1, 2029.

The interest rate on these Met Fixed-Rate Term Loans, is 3.85 %.

The Met Variable-Rate Term Loans were subject to quarterly principal payments of $ 406 and bore an interest rate equal to One Month Term Secured Overnight Financing Rate ("SOFR") plus 175 basis points (the “SOFR spread”).

The SOFR spread was subject to adjustment by Met every 2 years beginning May 1, 2023, until maturity.

Interest on the term loans was payable quarterly.

The interest rates on the Met Variable-Rate Term Loans were 7.52 % per annum as of September 30, 2023.

On December 26, 2023, the Company repaid the outstanding balance of $ 19,094 , plus accrued interest, and no further borrowings are possible on these loans.

With respect to the RLOC, for the year ended September 30, 2023, the interest rate was SOFR plus 175 basis points.

The SOFR spread was subject to adjustment by lender every 2 years beginning May 1, 2023, until maturity on November 1, 2029 and was subject to an annual commitment fee of 25 basis points on the unused portion of the line of credit, which was available for funding general corporate purposes.

The Amended RLOC bears interest rate at SOFR plus 220 basis points (the "Amended SOFR Spread), with a SOFR floor of 5.00 % and a minimum balance of $ 2,500 .

The SOFR spread and SOFR floor are subject to adjustment by lender every 2 years beginning January 1, 2026 and every two years thereafter until maturity.

The RLOC is subject to an annual commitment fee of 25 basis points on the unused portion of the line of credit and is available for funding general corporate purposes.

The variable interest rate was 7.52 % per annum and 4.27 % per annum as of September 30, 2023 and September 30, 2022, respectively.

The WCLC is a revolving credit facility and is available for funding working capital and general corporate requirements.

T he WCLC agreement was amended on October 27, 2022, and the primary terms of the amendment were an extension of the maturity to November 1, 2025, and the conversion of the interest rate from LIBOR plus a spread to SOFR plus a spread, which spread is adjusted quarterly, based on the Company’s debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points .

There were no changes to the commitment amount.

The rate at September 30, 2023 was SOFR plus 175 basis points.

The variable interest rate was 7.07 % per annum and 4.31 % per annum as of September 30, 2023 and September 30, 2022, respectively.

The WCLC agreement provides for Rabo to issue up to $ 2,000 thousand in letters of credit on the Company’s behalf, of which $ 248 thousand and $ 310 thousand were issued as of September 30, 2023 and September 30, 2022, respectively.

The WCLC is subject to a quarterly commitment fee on the daily unused availability under the line computed as the commitment amount less the aggregate of the outstanding loans and outstanding letters of credit.

The commitment fee is adjusted quarterly based on Alico’s debt service coverage ratio for the preceding quarter and can vary from a minimum of

20 basis points to a maximum of 30 basis points.

Commitment fees to date have been charged at 20 basis points, except from May 18, 2023 through August 8, 2023 when they were charged at 30 basis points.

At September 30, 2024 and 2023, $ 86,606 and $ 25,000 , was available under the RLOC, respectively, and $ — and $ 45,030 was available under the WCLC, respectively.

The variable interest rate on the Amended RLOC and the RLOC, respectively, was 7.30 % per annum and 7.52 % per annum as of September 30, 2024 and September 30, 2023, respectively.

The WCLC was a revolving credit facility which is available for funding working capital and general corporate requirements.

As of September 30, 2024 no borrowings were available borrowings under the WCLC and the agreement and was terminated in October 2024, once the accrued interest was paid.

T he WCLC agreement was amended on October 27, 2022 and the primary terms of the amendment were an extension of the maturity to November 1, 2025, and the conversion of the interest rate from LIBOR plus a spread to SOFR plus a spread.

This spread was adjusted quarterly, based on the Company’s debt service coverage ratio for the preceding quarter and can vary from 175 to 250 basis points .

The variable interest rate was 4.31 % per annum as of September 30, 2023.

The WCLC provided for Rabo to issue up to $ 2,000 in letters of credit on the Company’s behalf, of which $ 248 were issued as of September 30, 2023.

The WCLC was collateralized by the Company’s current assets and certain other personal property owned by the Company.

These credit facilities noted above are subject to various covenants, including the following financial covenants:

(i) minimum debt service coverage ratio of 1.10 to 1.00;

(ii) tangible net worth of at least $ 160,000 thousand increased annually by 10 % of consolidated net income for the preceding years, or $ 174,628 thousand applicable for the year ended September 30, 2023;

(ii) tangible net worth of at least $ 160,000 increased annually by 10 % of consolidated net income for the preceding years, or $ 174,628 applicable for the year ended September 30, 2024;

(iii) minimum current ratio of 1.50 to 1.00;

(iv) debt to total assets ratio not greater than .625 to 1.00;

and (v) solely in the case of the WCLC, a limit on capital expenditures of $ 30,000 thousand per year ended September 30.

As of September 30, 2023, the Company was in compliance with all of the financial covenants.

and (v) solely in the case of the WCLC, a limit on capital expenditures of $ 30,000 per year ended September 30.

As of September 30, 2024, the

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Company was in compliance with all of the financial covenants.

There were no changes to the covenants in the Amended Credit Agreement, except to include a 55 % Loan To Value Cap (the "LTV CAP") on the value of the term loans and RLOC capacity.

At September 30, 2024, the Company was able to draw the entire amount of the RLOC, less current borrowings, and remain under the LTV Cap.

Credit facilities also include a Met Life term loan collateralized by 1,200 gross acres of citrus grove owned by Citree (“Met Citree Loan”).

This is a $ 5,000 thousand credit facility that bears interest at a fixed rate of 5.28 % per annum.

This is a $ 5,000 credit facility that bears interest at a fixed rate of 5.28 % per annum.

Principal and interest payments are made on a quarterly basis.

2 unchanged sentences

Silver Nip Citrus Debt

There are two fixed-rate term loans, with an original combined balance of $ 27,550 thousand, bearing interest at 5.35 % per annum (“Pru Loans A & B”).

Principal of $ 290 thousand is payable quarterly, together with accrued interest.

On February 15, 2015, 734 Citrus Holdings, LLC d/b/a Silver Nip Citrus (“Silver Nip Citrus”) made a prepayment of $ 750 thousand.

In addition, the Company made prepayments of $ 4,453 thousand in the second quarter of 2018 with proceeds from the sale of certain properties, which were collateralized under these loans.

The Company may prepay up to $ 5,000 thousand of principal without penalty.

As such, the Company exceeded the allowed $ 5,000 thousand prepayment by $ 203 thousand and was required to make a premium payment of $ 22 thousand.

There are two fixed-rate term loans, with an original combined balance of $ 27,550 , bearing interest at 5.35 % per annum (“Pru Loans A & B”).

Principal of $ 290 is payable quarterly, together with accrued interest.

The loans are collateralized by approximately 5,700 acres of citrus groves in Collier, Hardee, Highlands and Polk Counties, Florida and mature on June 1, 2029 and June 1, 2033, respectively.

4 unchanged sentences

The Company records debt issuance costs as a direct reduction of the carrying value of the related debt.

Financing costs related to the undrawn RLOC are included in "Other non-current assets" in the consolidated balance sheet.

Accrued Liabilities

Accrued liabilities consist of the following at September 30, 2023 and September 30, 2022:

(in thousands) September 30,

Ad valorem taxes $ 2,134 $ 2,024

Accrued interest 1,102 764

Accrued employee wages and benefits 1,007 1,713

Accrued dividends 381 3,793

Accrued insurance 345 345

Professional fees 307 303

Other accrued liabilities 87 120

Total accrued liabilities $ 5,363 $ 9,062

Stock-based Compensation

Effective January 27, 2015, the Company’s Board of Directors adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which provides for up to 1,250 thousand common shares available for issuance to provide a long-term incentive plan for officers, employees, directors and/or consultants to directly link incentives to stockholder value, with approximately 1,145 thousand remaining available for issuance under the 2015 Plan.

The 2015 Plan was approved by the Company’s stockholders in February 2015.

The Company’s 2015 Plan provides for grants to executives in various forms including restricted shares of the Company’s common stock and stock options.

Awards are discretionary and are determined by the

Compensation Committee of the Board of Directors.

Awards vest based upon service conditions.

Non-vested restricted shares generally vest over requisite service periods of one to six years from the date of grant.

The Company recognizes stock-based compensation expense for (i) Board of Directors fees (generally paid in treasury stock);

and (ii) other awards under the 2015 Plan (paid in restricted stock and stock options).

Stock-based compensation expense is recognized in general and administrative expenses in the Consolidated Statements of Operations.

Stock Compensation – Board of Directors

The Board of Directors can either elect to receive stock compensation or cash for their fees for services provided.

Stock-based compensation expense relating to the Board of Directors fees was $ 588 thousand, $ 661 thousand and $ 844 thousand for the years ended September 30, 2023, 2022 and 2021, respectively.

Restricted Stock Awards (“RSAs”)

The following table represents a summary of the status of the Company’s RSAs:

Restricted Stock Awards Shares Weighted-

Outstanding at September 30, 2022 28,546 $ 37.82

Granted during year 2023 (a)

Vested during year 2023 (b)

( 11,037 ) 37.82

Forfeited during year 2023 ( 19 ) 32.30

Outstanding and expected to vest at 2023 (c)

17,540 $ 37.82

The weighted average fair value of RSAs granted in year 2023 and 2022 was $ 32.30 and $ 37.82 , respectively.

The total fair value of all RSAs vested in year 2023 and 2022 was $ 417 thousand and $ 214 thousand, respectively.

The weighted average remaining contractual term is 1.8 years and the aggregate intrinsic value of RSAs expected to vest is $ 438 thousand.

Stock compensation expense related to the RSAs totaled $ 329 thousand, $ 459 thousand and $ 144 thousand for the years ended September 30, 2023, 2022 and 2021, respectively.

There was $ 376 thousand of total unrecognized stock compensation costs related to RSAs at September 30, 2023.

Stock Options

All outstanding stock options are fully vested at September 30, 2023.

The following table represents a summary of the Company’s stock option activity:

Options Weighted

Price Weighted

(years) Aggregate

Outstanding – September 30, 2022 (a)

126,500 $ 33.78 0 —

Exercised during year 2023 — — 0 —

Forfeitures/expired during year 2023 ( 88,500 ) 33.96 0 —

Outstanding – September 30, 2023 38,000 $ 33.75 3.3 —

Includes 29,500 options which would vest if the price of the Company’s common stock during a consecutive 20 -trading day period exceeds $ 40 ;

29,500 options which would vest if the price of the Company’s common stock during a consecutive 20 -trading day period exceeds $ 45 ;

and 29,500 options which would vest if the price of the Company’s common stock during a consecutive 20 -trading day period exceeds $ 50 .

Stock compensation expense related to the options totaled $ 18 thousand, $ 115 thousand and $ 242 thousand for the years ended September 30, 2023, 2022 and 2021, respectively.

Forfeitures of RSAs and stock options were recognized as incurred.

At September 30, 2023 and September 30, 2022, there was $ 0 and $ 18 thousand, respectively, of total unrecognized stock compensation costs related to unvested share-based compensation for the option grants.

Total stock-based compensation expense for the years ended September 30, 2023, 2022 and 2021, which was recognized in general and administrative expense, was $ 935 thousand, $ 1,235 thousand and $ 1,230 thousand, respectively.

Financing costs related to the undrawn RLOC are included in "Other non-current assets" in the consolidated balance sheets.

The Federal and State filings remain subject to examination by tax authorities for tax periods ending after September 30, 2018.

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(in thousands) Years Ended September 30,

2023 2022 2021

Federal income tax $ 99 $ ( 18 )

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Income tax provision $ 4,597 $ 801

Income tax provision attributable to income before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes for each of the years ended September 30, 2023, September 30, 2022 and September 30, 2021, respectively, as a result of the following:

Income tax provision attributable to income before income taxes differed from the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes for each of the years ended September 30, 2024 and September 30, 2023, respectively, as a result of the following:

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(in thousands) Years Ended September 30,

2023 2022 2021

Amount Tax Rate Amount Tax Rate Amount Tax Rate

Amount Tax Rate Amount Tax Rate

Income tax at the statutory federal rate $ 2,300 21.0 % $ 516 21.0 %

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State income taxes, net of federal benefit 514 4.7 % 265 10.8 %

Permanent and other reconciling items, net 27 1.1 % 44 0.3 % 41 0.1 %

Land Donation – Bargain Sale — — % ( 6,279 ) ( 48.5 %) — — %

Permanent reconciling items, net 13 0.1 % 16 0.7 %

Officer life insurance ( 16 ) ( 0.1 %) 11 0.4 %

Non-Controlling Interest - Citree 130 1.2 % 37 1.5 %

Valuation allowance 1,588 14.5 % ( 139 ) ( 5.7 %)

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Net deferred income tax liabilities $ ( 40,873 ) $ ( 36,410 )

The Company has a federal net operating loss carryforward of $ 17,400 thousand and state net operating loss carryforward of $ 2,400 thousand at September 30, 2023, which resulted in deferred tax assets of $ 3,657 thousand and $ 105 thousand, respectively.

Both federal and state net operating losses have an indefinite life.

The Company has established a partial valuation allowance on our charitable contribution carryforward as of September 30, 2022, as the amount of expected future taxable income is not likely to support the use of the deferred tax asset before it expires.

The valuation allowance at September 30, 2023 and 2022 was $ 4,170 thousand and $ 4,309 thousand, respectively.

The Company has a federal net operating loss carryforward of $ 20,013 and state net operating loss carryforward of $ 8,321 at September 30, 2024, which resulted in deferred tax assets of $ 4,203 and $ 372 , respectively.

Both the federal and state net operating losses have an indefinite life.

The Company has a partial valuation allowance on our charitable contribution carryforward as of September 30, 2024 and 2023.

The valuation allowance at September 30, 2024 and 2023 was $ 5,757 and $ 4,170 , respectively.

Stock-based Compensation

Effective January 27, 2015, the Company’s Board of Directors adopted the 2015 Stock Incentive Plan (the “2015 Plan”), which provides for up to 1,250,000 common shares available for issuance to provide a long-term incentive plan for officers, employees, directors and/or consultants to directly link incentives to stockholder value, with 1,127,000 remaining available for issuance under the 2015 Plan.

The 2015 Plan was approved by the Company’s stockholders in February 2015.

The Company’s 2015 Plan provides for grants to executives in various forms including restricted shares of the Company’s common stock and stock options.

Awards are discretionary and are determined by the Compensation Committee of the

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Board of Directors.

Awards vest based upon service conditions.

Non-vested restricted shares generally vest over requisite service periods of one to six years from the date of grant.

The Company recognizes stock-based compensation expense for (i) Board of Directors fees (generally paid in treasury stock);

and (ii) other awards under the 2015 Plan (paid in restricted stock and stock options).

Stock-based compensation expense is recognized in general and administrative expenses in the Consolidated Statements of Operations.

Stock Compensation – Board of Directors

The Board of Directors can either elect to receive stock compensation or cash for their fees for services provided.

Stock-based compensation expense relating to the Board of Directors fees was $ 493 and $ 588 for the years ended September 30, 2024, and 2023, respectively.

Restricted Stock Awards (“RSAs”)

The following table represents a summary of the status of the Company’s RSAs:

Restricted Stock Awards Shares Weighted-

Outstanding at September 30, 2023 17,540 $ 37.82

Vested during year 2024 (a) ( 35 ) 32.30

Forfeited during year 2024 ( 5 ) 32.30

Outstanding and expected to vest at 2024 (b) 17,500 $ 37.82

The total fair value of all RSAs vested in year 2024 and 2023 was $ 1 and $ 417 , respectively.

The weighted average remaining contractual term is 0.8 years and the aggregate intrinsic value of RSAs expected to vest is $ 489 .

Stock compensation expense related to the RSAs totaled $ 226 and $ 329 for the years ended September 30, 2024 and 2023, respectively.

There was $ 150 of total unrecognized stock compensation costs related to RSAs at September 30, 2024.

Stock Options

All outstanding stock options are fully vested at September 30, 2024.

The following table represents a summary of the Company’s stock option activity:

Options Weighted

Price Weighted

(years) Aggregate

Vested and outstanding – September 30, 2024 38,000 $ 33.75 2.3 —

Stock compensation expense related to the options totaled $ 0 and $ 18 for the years ended September 30, 2024 and 2023, respectively.

Forfeitures of RSAs and stock options were recognized as incurred.

At September 30, 2024 and September 30, 2023, there was no unrecognized stock compensation costs related to unvested share-based compensation for the option grants.

Total stock-based compensation expense for the years ended September 30, 2024 and 2023, which was recognized in general and administrative expense, was $ 719 and $ 935 , respectively.

Segment Information

Operating segments are defined in the criteria established under the FASB ASC Topic 280 as components of public entities that engage in business activities from which they may earn revenues and incur expenses for which separate financial information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources.

The Company’s CODM assesses performance and allocates resources based on two operating segments:

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information is available and which is evaluated regularly by the Company’s chief operating decision maker (“CODM”) in deciding how to assess performance and allocate resources.

The Company’s CODM assesses performance and allocates resources based on two reportable segments:

Alico Citrus and Land Management and Other Operations.

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The Company evaluates the segments’ performance based on direct margins (gross profit) from operations before general and administrative expenses, interest expense, other income (expense) and income taxes, not including nonrecurring gains and losses.

Information by operating segment is as follows:

Information by reportable segment is as follows:

(in thousands) Years Ended September 30,

2023 2022 2021

Alico Citrus $ 45,059 $ 38,145

Land Management and Other Operations 1,584 1,701

Total revenues 39,846 91,947 108,564

Total operating revenues $ 46,643 $ 39,846

Operating expenses:

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Land Management and Other Operations 1,186 1,260

Total gross profit (loss) $ 6,446 $ ( 14,765 ) $ 23,893

Total (loss) profit $ ( 56,383 ) $ 6,446

General and administrative expenses 11,071 10,643

Total other income, net 78,406 6,656

Income before income taxes $ 10,952 $ 2,459

Capital expenditures:

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Land Management and Other Operations 58 67

Other Depreciation, Depletion and Amortization 421 434 452

Other Corporate Assets 210 421

Total depreciation, depletion and amortization $ 15,010 $ 15,487

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Total Assets $ 398,719 $ 428,353

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The Company determines whether an arrangement is a lease at inception.

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Operating lease components

Grove management services revenue Operating revenue $ — $ 116

Grove management services cost-of-sales Operating expenses $ — $ 116

Operating lease costs General and administrative expenses $ 148 $ 128

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Present value of lease obligations $ 323

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September 30, 2024

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Operating leases $ — $ 184

Employee Benefits Plans

Employee Benefit Plans

Profit Sharing and 401(k) Plans

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The Company’s matching funds vest to the employee immediately, pursuant to a safe harbor election effective in October 2012.

The Company’s contributions to the plan were $ 384 thousand, $ 398 thousand and $ 401 thousand for the years ended September 30, 2023, 2022 and 2021, respectively.

The Company’s contributions to the plan were $ 347 and $ 384 for the years ended September 30, 2024 and 2023, respectively.

The Company also maintains a Profit Sharing Plan (“Plan”) that is fully funded by contributions from the Company.

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Capital Contribution

On June 6, 2023, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution (“Contribution”) requirement of $ 900 thousand as a result of trees producing limited revenue due to the severity of the fruit drop resulting from Hurricane Ian, which negatively impacted both the box production and pounds solids.

The Company’s portion of the Contribution was $ 460 thousand and was funded on June 22, 2023.

The remaining portion of the Contribution of $ 440 thousand was funded by the noncontrolling parties.

On September 6, 2022, all operating partners of Citree received a funding notice relating to an additional Contribution requirement of $ 600 thousand as a result of trees producing limited revenue because they are still in early-stage development, a freeze event occurred in January 2022 which negatively impacted both the box production and pounds solids, and the increased cost of fertilizer, other chemicals and fuel.

The Company’s portion of the Contribution was $ 306 thousand and was funded on September 22, 2022.

The remaining portion of the Contribution of $ 294 thousand was funded by the noncontrolling parties.

On June 10, 2024, all operating partners of Citree received a funding notice relating to an additional Cash Capital Contribution (“Contribution”) requirement of $ 750 , as a result of trees producing limited revenue as they continue to recover from Hurricane Ian.

The Company’s and noncontrolling parties’ portions of the Contribution of $ 382 and $ 368 , respectively, were funded on July 11, 2024.

On June 6, 2023, all operating partners of Citree received a funding notice relating to an additional Contribution requirement of $ 900 as a result of trees producing limited revenue due to the severity of the fruit drop resulting from Hurricane Ian, which negatively impacted both the box production and pounds solids.

The Company’s portion of the Contribution was $ 460 and was funded on June 22, 2023.

The remaining portion of the Contribution of $ 440 was funded by the noncontrolling parties.

Lease Agreement

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Under the Kiernan Lease Agreement, the Company leased approximately 93 acres of Company-owned, largely unimproved land (the “Land”) to Mr.

Kiernan for a three-year term commencing on January 1, 2022, and ending on January 1, 2025, with a yearly rent of $ 1,860 .

Kiernan for a three-year term commencing on January 1, 2022, and ending on January 1, 2025, with a yearly rent of $ 1,860 (in whole dollars).

Additionally, under the terms of the Kiernan Lease Agreement, the Company granted to Mr.

Kiernan an option to purchase the Land from the Company, exercisable only during the one-year period January 1, 2022, through January 1, 2023, and at a price of $ 480 thousand ($ 5,161 per acre), which price was based on an independent appraisal obtained by the Company.

Kiernan an option to purchase the Land from the Company, exercisable only during the one-year period January 1, 2022, through January 1, 2023, and at a price of $ 480 ($ 5,161 per acre), which price was based on an independent appraisal obtained by the Company.

On January 5, 2022, Mr.

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Pursuant to exercise of the option, the Company sold approximately 85 acres to Mr.

Kiernan on October 20, 2022 for $ 439 thousand ($ 5,161 per acre).

Kiernan on October 20, 2022 for $ 439 ($ 5,161 per acre).

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Commitments and Contingencies

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The Company enters into contracts for the purchase of citrus trees during the normal course of its business.

As of September 30, 2023, the Company had $ 4,350 thousand relating to outstanding commitments for these purchases that will be paid upon delivery of the remaining citrus trees.

As of September 30, 2024, the Company had $ 3,069 relating to outstanding commitments for these purchases that will be paid upon delivery of the remaining citrus trees.

Letters of Credit

The Company had outstanding standby letters of credit in the total amount of $ 248 thousand and $ 310 thousand at September 30, 2023 and September 30, 2022, respectively, to secure its various contractual obligations.

The Company had outstanding standby letters of credit in the total amount of $ — and $ 248 at September 30, 2024 and September 30, 2023, respectively, to secure its various contractual obligations (see Note 2.

Summary of Significant Accounting Policies for further information on current letters of credit).

Legal Proceedings

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There are no current legal proceedings to which the Company is a party or of which any of its property is subject that it believes will have a material adverse effect on its financial position, results of operations or cash flows.

On February 17, 2023, a class action complaint was filed in the Middle District of Florida captioned Sinder v.

et al., Case No.

2:23-cv-00107 (the “Sinder” matter) asserting violations of Sections 10(b) and 20(a) of the Exchange Act of 1934 against the Company and certain of its current and former officers on behalf of a putative class of investors who purchased the Company’s common stock between February 4, 2021 and December 13, 2022.

The complaint alleged, among other things, that the Company and certain of its current and former officers made false and misleading statements and failed to disclose certain information regarding the Company’s financial reporting and December 13, 2022 restatement of the Company’s previously issued financial statements.

On August 28, 2023, the same day on which the Company’s motion to dismiss was due, the plaintiff voluntarily dismissed without prejudice the Sinder matter.

On March 7, 2023, an alleged shareholder filed a derivative complaint purportedly on behalf of the Company against certain of its current and former officers and directors in the 20th Judicial Circuit for Lee County, Florida captioned Assad v.

Brokaw et al., Case # 23-CA-001484 (the “Assad” matter).

The complaint asserted claims of breach of fiduciary duty and unjust enrichment arising from substantially similar allegations as those contained in the securities class action described above.

Following dismissal of the Sinder matter, the shareholder voluntarily dismissed without prejudice the Assad matter.

Subsequent Events

On October 30, 2023, the Company entered into a Citrus Grove Management Agreement (the "Agreement") with an unaffiliated group of third parties to provide citrus grove caretaking and harvest and haul management services for approximately 3,300 acres owned by such third parties.

On November 21, 2024, the Florida Citrus Commission passed an emergency rule, based on requests from the Florida Citrus Processors Association and Florida Citrus Mutual, to reduce the minimum Brix value (a measurement of sugar content) for oranges harvested for the period beginning on November 21, 2024 and ending on May 23, 2025 from 8.5 to 7.0 and to eliminate the minimum ratio of total soluble solids to anhydrous citric acid (a measure of maturity).

While it is not possible for the Company to estimate the potential impact of this ruling, it may increase the amount of the Company's fruit that would be acceptable at the processors.

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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data