Item 7. Management’s Discussion and Analysis
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with Part I, Item 1, “Business”, Item 1A, “Risk Factors” and the accompanying Consolidated Financial Statements and related Notes thereto included in this Annual Report commencing on page 47 . Our actual results of operations may differ materially from those discussed in forward-looking statements as a result of various factors, including, but not limited to, those included in Part I, Item 1A, “Risk Factors” and other portions of this Annual Report. In the following discussion and analysis, dollars are in thousands, except, per share and per acre amounts.
Business Overview
Business Description
Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) generates operating revenues primarily from the sale of our citrus products, providing management services to citrus groves owned by third parties, and grazing and hunting leasing. We operate as two business segments, and all of our operating revenues are generated in the United States. For the years ended September 30, 2024 and 2023 we generated operating revenues of $46,643 and $39,846, respectively, a loss from operations of $67,454 and $4,197, respectively, and net income attributable to common stockholders of $6,973 and $1,835, respectively. Net cash used in operating activities was $30,497 and $6,254, respectively, for the years ended September 30, 2024 and 2023, respectively. See Part I, Item 1, Business , included in this Annual Report for a discussion of our year highlights and our evolving business strategy.
Business Segments
Operating segments are defined in the criteria established under 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 our CODM in deciding how to assess performance and allocate resources. Our CODM assesses performance and allocates resources based on its reportable segments.
The Company has two segments as follows:
• Alico Citrus includes activities related to planting, owning, cultivating and/or managing citrus groves to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus; and
• Land Management and Other Operations includes activities related to grazing and hunting leasing, management and/or conservation of unimproved native pastureland and activities related to rock mining royalties and other insignificant lines of business. Also included are activities related to owning and/or leasing improved farmland. Improved farmland is acreage that has been converted, or is permitted to be converted, from native pasture and which may have various improvements including irrigation, drainage and roads.
For the year ended September 30, 2024, the Alico Citrus segment generated 96.6% of our consolidated revenues and the Land Management and Other Operations segment generated 3.4% of our consolidated revenues. For the year ended September 30, 2023, the Alico Citrus segment generated 95.7% of our consolidated revenues and the Land Management and Other Operations segment generated 4.3% of our consolidated revenues.
Consolidated Results of Operations
The following discussion provides an analysis of our results of operations for the year ended September 30, 2024, as compared to the year ended September 30, 2023.
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(in thousands) September 30, Change
2024 2023 $ %
Operating revenues:
Alico Citrus $ 45,059 $ 38,145 $ 6,914 18.1 %
Land Management and Other Operations 1,584 1,701 (117) (6.9) %
Total operating revenues 46,643 39,846 6,797 17.1 %
Gross profit (loss):
Alico Citrus (57,569) 5,186 (62,755) NM
Land Management and Other Operations 1,186 1,260 (74) (5.9) %
Total gross (loss) profit (56,383) 6,446 (62,829) NM
General and administrative expenses 11,071 10,643 428 4.0 %
Loss from operations (67,454) (4,197) (63,257) NM
Total other income, net 78,406 6,656 71,750 NM
Income before income taxes 10,952 2,459 8,493 345.4 %
Income tax provision 4,597 801 3,796 473.9 %
Net income 6,355 1,658 4,697 283.3 %
Net loss attributable to noncontrolling interests 618 177 441 249.2 %
Net income attributable to Alico, Inc. common stockholders $ 6,973 $ 1,835 $ 5,138 280.0 %
NM - Not Meaningful
The following table presents our operating revenues, by segment, as a percentage of total operating revenues for the years ended September 30, 2024 and 2023:
September 30,
2024 2023
Operating revenues:
Alico Citrus 96.6 % 95.7 %
Land Management and Other Operations 3.4 % 4.3 %
Total operating revenues 100.0 % 100.0 %
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The following discussion provides an analysis of our reportable segments:
Alico Citrus
(in thousands, except per box and per pound solids data)
September 30, Change
2024 2023 Unit %
Operating Revenues:
Early and Mid-Season $ 14,534 $ 11,954 $ 2,580 21.6 %
Valencias 26,925 23,906 3,019 12.6 %
Fresh Fruit and other 774 1,051 (277) (26.4) %
Grove Management Services 2,826 1,234 1,592 129.0 %
Total $ 45,059 $ 38,145 $ 6,914 18.1 %
Boxes Harvested:
Early and Mid-Season 1,194 979 215 22.0 %
Valencias 1,855 1,669 186 11.1 %
Total Processed 3,049 2,648 401 15.1 %
Fresh Fruit 35 41 (6) (14.6) %
Total 3,084 2,689 395 14.7 %
Pound Solids Produced:
Early and Mid-Season 5,364 4,586 778 17.0 %
Valencias 9,365 8,702 663 7.6 %
Total 14,729 13,288 1,441 10.8 %
Pound Solids per Box:
Early and Mid-Season 4.49 4.68 (0.19) (4.0) %
Valencias 5.05 5.21 (0.16) (3.1) %
Price per Pound Solids:
Early and Mid-Season $ 2.71 $ 2.61 $ 0.10 3.8 %
Valencias $ 2.88 $ 2.75 $ 0.13 4.7 %
Price per Box:
Fresh Fruit $ 15.89 $ 14.02 $ 1.87 13.3 %
Operating Expenses:
Cost of Sales $ 89,420 $ 50,961 $ 38,459 75.5 %
Harvesting and Hauling 11,843 10,573 1,270 12.0 %
Fresh Fruit and other (229) (29,326) 29,097 (99.2) %
Grove Management Services 1,593 751 842 112.1 %
Total $ 102,627 $ 32,959 $ 69,668 211.4 %
Components of Results of Operations for Alico Citrus Segment
Our citrus groves produce the majority of our annual operating revenues and the citrus grove business is seasonal because it is tied to the growing and harvest season. Historically, the second and third quarters of our year produce the majority of the annual revenues and working capital requirements are typically greater in the first and fourth quarters of our year, coinciding with the growing cycles. 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 that fiscal year.
We sell our Early and Mid-Season and Valencia oranges to orange juice processors. The processors generally buy the citrus crop on a pound solids basis, which is the measure of the soluble solids (sugars and acids) contained in one box of fruit. Our Fresh Fruit revenue is derived from sales to packing houses that purchase the citrus on a per box basis. We also
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provide citrus grove caretaking and harvest and haul management services to third parties from which revenues recorded as Grove management Services are generated, including a management fee. Other revenues principally consist of the purchase and reselling of fruit.
Operating expenses for our Alico Citrus segment consist primarily of Cost of Sales, Harvesting and Hauling costs and Grove Management Services costs. Cost of sales represents the cost of maintaining the citrus groves for the preceding calendar year and does not vary in relation to production. Harvesting and Hauling costs represent the costs of bringing citrus product to processors and vary, based upon the number of boxes produced. Grove management services include those costs associated with citrus grove caretaking and harvest and haul management services provided to third parties. Other expenses include the period costs of third-party grove caretaking and the purchase and reselling third-party fruit.
Comparison of the year ended September 30, 2024 and 2023 for the Alico Citrus Segment
The increase in revenue for the year ended September 30, 2024, as compared to the year ended September 30, 2023, was primarily due to a 10.8% increase in pound solids produced as the trees continue to recover from the effects of Hurricane Ian and an increase in the blended price per pound solids of 4.2% for the Early and Mid-season and Valencia crops as a result of more favorable pricing in one of our contracts with Tropicana.
The aggregate decrease in pound solids per box of 3.6% during the year ended September 30, 2024, as compared to the year ended September 30, 2023, was mainly due to the internal quality of the fruit not being as strong as it had been in the previous year. This decrease in pound solids per box was also due in part to a further acceleration of the harvesting of the Early and Mid-Season and Valencia crops to maximize the box production and avoid additional fruit drop.
We recognized an increase in Grove Management Services revenues for the year ended September 30, 2024, as compared to the year ended September 30, 2023 of $1,592, which was due to the signing of the Grove Management Agreement in the current year (see “Recent Developments” in Item 1. Business for further details).
We also recorded a decrease in revenue from sales of Fresh Fruit and other. This decrease, compared to the same period in the prior year, was principally due to a decrease in the amount of fruit that was resold on behalf of grove owners.
The USDA, in its October 11, 2024 Citrus Crop Forecast for the 2023-24 harvest season, indicated the overall Florida orange crop increased from approximately 15,820 boxes for the 2022-23 crop year to approximately 17,960 boxes for the 2023-24 crop year, an increase of 13.5%. We experienced an increase in total box production in the 2023-2024 harvest season crop of 14.7% compared to the 2022-23 crop year.
The increase in Operating expenses for the year ended September 30, 2024, as compared to the year ended September 30, 2023, primarily relates to the inventory adjustments recorded at September 30, 2022 on the ending inventory balance, as a result of the impact of Hurricane Ian, which effectively lowered the inventory to be expensed in the year ended September 30, 2023, $27,389 in crop insurance proceeds and $839 in property and casualty insurance reimbursements for Hurricane Ian and $1,315 in proceeds from federal relief proceeds received under the Florida Citrus Recovery Block Grant (“CRBG”) program in the year ended September 30, 2023, all of which were recognized within Operating expenses under Fresh Fruit and other. By comparison, we only recognized $299 in crop insurance proceeds during the year ended September 30, 2024. No further insurance of federal relief program proceeds are expected to be received. In addition, we recognized an inventory impairment charge of $19,549 in the fourth quarter of the year ended September 30, 2024 related to our 2024-2025 estimated harvest (see Note 3. Inventories to the Consolidated Financial Statements included in this Annual Report for further information).
Furthermore, our Harvesting and Hauling expenses increased 12.0% driven by an increase in the total number of boxes harvested in the year ended September 30, 2024, when compared to the prior year and a $842 increase in operating expenses relating to the Grove Management Agreement.
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Land Management and Other Operations
The table below presents key operating measures for the years ended September 30, 2024 and 2023 for the Land Management and Other Operations segment:
(in thousands)
September 30, Change
2024 2023 $ %
Revenue From:
Land and Other Leasing $ 1,284 $ 1,327 $ (43) (3.2) %
Other 300 374 (74) (19.8) %
Total $ 1,584 $ 1,701 $ (117) (6.9) %
Operating Expenses:
Land and Other Leasing $ 393 $ 436 $ (43) (9.9) %
Other 5 5 — — %
Total $ 398 $ 441 $ (43) (9.8) %
Components of Results of Operations for Land Management and Other Operations Segment
Land and Other Leasing include lease income from leases for grazing rights, hunting leases, farm leases, a lease to a third party of an aggregate mine, leases of oil extraction rights to third parties, and other miscellaneous income.
Land and Other Leasing operating expenses includes real estate, property taxes, and general and administrative expenses, including legal and professional fees.
Comparison of the year ended September 30, 2024 and 2023 for the Land Management and Other Operations Segment
The decrease in revenues from Land Management and Other Operations for the year ended September 30, 2024, as compared to the prior year, was primarily due to a decrease in hunting and grazing lease revenue due to the sales of portions of the Alico Ranch, which resulted in the reduction of land covered under our hunting and grazing lease contracts.
The decrease in operating expenses from Land Management and Other Operations for the year ended September 30, 2024, as compared to the prior year, was primarily due to the reduction of the ad valorem tax expense as a result of us owning fewer ranch acres due to the sale of the Alico Ranch.
The following discussion provides an analysis of our results of operation, as a whole:
General and Administrative
General and administrative expenses for the year ended September 30, 2024 was $11,071, compared to $10,643 for the year ended September 30, 2023. The increase was principally attributable to an increase in personnel costs, partially offset by lower depreciation, lower legal and professional fees due to the dismissal of the stockholder litigation in 2023 and lower insurance costs, as compared to the same period last year.
Other Income, net
Other income, net, for the years ended September 30, 2024 and 2023 was $78,406 and $6,656, respectively. The increase in other income, net was primarily due to the sale of 18,354 acres of land for approximately $86,217 which resulted in 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. These gains on land sales are partially offset by interest expense during the years ended September 30, 2024 and 2023.
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Income Taxes
For the years ended September 30, 2024 and 2023, the provision for income taxes was $4,597 and $801, respectively, and the related effective income tax rates were 42.0% and 32.6%, respectively. The effective tax rate for the year ended September 30, 2024 is higher than the statutory tax rate principally due to an increase in the valuation allowance on our charitable deduction carryforward and state income taxes. The effective tax rate for the year ended September 30, 2023 is higher than the statutory tax rate due to the deferred rate change and return-to-provision adjustments, which were partially offset by a reduction in the valuation allowance. During the year ended September 30, 2022, a bargain sale of land to the State of Florida, at a price below market value, resulted in a charitable contribution carryover for tax purposes and generated a tax benefit of $6,300, of which $500 was utilized immediately, $8 was recognized during the year ended September 30, 2024 and nothing was recognized in 2023. We do not anticipate that we will be able to recognize any of the charitable deduction carryover before it expires in 2027. As of September 30, 2024 and 2023, the valuation allowance was $5,757 and $4,170, respectively, resulting in a provision (benefit) of $1,588 and $(139), respectively.
Liquidity and Capital Resources
A comparative balance sheet summary is presented in the following table:
(in thousands) September 30,
2024 2023 Change
Cash and cash equivalents $ 3,150 $ 1,062 $ 2,088
Total current assets $ 40,627 $ 58,805 $ (18,178)
Total current liabilities $ 10,651 $ 15,065 $ (4,414)
Working capital $ 29,976 $ 43,740 $ (13,764)
Total assets $ 398,719 $ 428,353 $ (29,634)
Principal amount of term loans and lines of credit $ 92,551 $ 129,319 $ (36,768)
Current ratio 3.81 to 1 3.90 to 1
Debt to total assets ratio 0.23 to 1 0.30 to 1
Debt to equity ratio 0.37 to 1 0.53 to 1
Sources and Uses of Liquidity and Capital
Our business has historically generated positive net cash flows from operating activities. In light of recent hurricanes, costs of maintaining the citrus groves and harvesting and hauling of citrus products continue to increase, and we continue to evaluate the short and long-term use of our land. Sources of cash primarily include cash flows from operations, sales of under-performing land and other assets, amounts available under our credit facilities and access to capital markets. Access to additional borrowings under revolving lines of credit is subject to the satisfaction of customary borrowing conditions. As a public company, we may have access to other sources of capital. However, access to, and availability of, financing on acceptable terms in the future will be affected by many factors, including (i) financial condition, prospects, and credit rating; (ii) liquidity of the overall capital markets; and (iii) the state of the economy. There can be no assurance that we will continue to have access to the capital markets on acceptable terms, or at all.
The principal uses of cash that affect our liquidity position include the following: operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions.
Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under our line of credit will provide sufficient liquidity to service the principal and interest payments on our indebtedness and will satisfy working capital requirements and capital expenditures for at least the next twelve months and over the long term.
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Borrowing Facilities and Long-term Debt
We have a $95,000 revolving line of credit ("RLOC"), of which $86,606 is available for general corporate purposes as of September 30, 2024 (see Note 7. Long-Term Debt and Lines of Credit to the Consolidated Financial Statements included in this Annual Report for further information). The RLOC was amended on September 17, 2024, and the primary terms of the amendment were an extension of the maturity date to May 1, 2034, an increase in the amount available under the RLOC from $25,000 to $95,000 and securing the RLOC by real property, consisting of approximately 36,800 gross acres of citrus land. We also repaid current borrowings under the $70,000 working capital line of credit ("WCLC") with Rabo Agrifinance, Inc., (“Rabo”) and there were no available borrowings under this facility at September 30, 2024, which was cancelled in October 2024.
The level of debt could have important consequences on our business, including, but not limited to, increasing our vulnerability to general adverse economic and industry conditions, limiting the availability of cash flow to fund future investments, capital expenditures, working capital, business activities and other general corporate requirements, and limiting flexibility in planning for, or reacting to, changes in our business and industry.
Our credit facilities are subject to various debt 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 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; and (iv) debt to total assets ratio not greater than 0.625 to 1.00. As of September 30, 2024, we were in compliance with all of the financial covenants.
Consolidated Statements of Cash Flows
The following table details the items contributing to the changes in cash and cash equivalents and restricted cash for the years ended September 30, 2024 and 2023:
(in thousands) September 30,
2024 2023
Net cash (used in) operating activities $ (30,497) $ (6,254)
Net cash provided by (used in) investing activities $ 68,178 (4,123)
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
Net Cash (Used In) Operating Activities
The increase in net cash used in operating activities for the year ended September 30, 2024, as compared to the year ended September 30, 2023, was primarily due to $27,389 in crop insurance proceeds and $839 in property and casualty insurance reimbursements for Hurricane Ian and $1,315 in proceeds under the CRBG program in the year ended September 30, 2023, partially offset by a decrease in accounts payable at September 30, 2024 driven by timing of spending.
Net Cash Provided By (Used In) Investing Activities
The shift to net cash provided by investing activities for the year ended September 30, 2024, from net cash used in investing activities for the year ended September 30, 2023, was driven by the sale of 18,354 acres of land for approximately $86,217 for the year ended September 30, 2024 as compared to the sale of 2,225 acres of ranch land for $12,000 in the prior year period.
Net Cash (Used In) Provided By Financing Activities
The shift to net cash used in financing activities for the year ended September 30, 2024, from net cash provided by financing activities for the year ended September 30, 2023, was primarily due to the repayment of borrowings under the WCLC and the $19,094 in outstanding borrowings under the Met Life Variable-Rate Term Loan with the proceeds from the sale of the Alico Ranch, as compared to net borrowings under the under the WCLC for the year ended September 30, 2023.
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Contractual Obligations
Our material cash requirements from known contractual and other obligations are described in the accompanying notes to the financial statements within Item 8. Financial Statements and Supplementary Data . These include principal and interest payments on long-term debt as described in Note 7. Long-Term Debt and Lines of Credit, operating leases as described in Note 11. Leases and purchase commitments as described in Note 14. Commitments and Contingencies to our Consolidated Financial Statements included in this Annual Report.
Critical Accounting Policies and Estimates
Our Consolidated Financial Statements are prepared in accordance with U.S. GAAP, which requires management to make estimates, judgments and assumptions that affect the amounts reported in those financial statements and accompanying notes. Management considers an accounting policy to be critical if it is important to our financial condition and results of operations and if it requires significant judgment and estimates on the part of management in its application. Management considers an accounting estimate to be critical if it is made in accordance with generally accepted accounting principles, involves a significant level of estimation uncertainty, and has had, or is reasonably likely to have, a material impact on our financial condition or results of operations. We consider policies and estimates relating to the following matters to be critical accounting policies:
Revenue Recognition
We recognize revenue at the amount we expect to be entitled to be paid, determined when control of the products or services is transferred to our customers, which occurs upon delivery of and acceptance of the fruit by the customer and we have a right to payment. For grove management services, we recognize operating revenue, including a management fee, when services are rendered and consumed. Management reviews the reasonableness of the revenue accruals quarterly based on buyers’ and processors’ advances to growers, cash and futures markets and experience in the industry. Adjustments are made throughout the year to these estimates as more current relevant industry information becomes available. Differences between the estimates and the final realization of revenues can be significant and can be either positive or negative. During the periods presented in this Annual Report, no material adjustments were made to the reported revenues from our crops.
Inventories
The costs of growing crops, including, but not limited to, labor, fertilization, fuel, crop nutrition and irrigation, are capitalized into inventory throughout the respective crop year. Such costs are expensed as cost of sales when the crops are harvested and are recorded as operating expenses in the Consolidated Statements of Operations. Inventories are stated at the lower of cost or net realizable value. The cost for unharvested citrus crops is based on accumulated production costs incurred during the period from January 1 through the balance sheet date. In the event that there is a casualty loss due to severe weather or other significant incident which negatively impacts inventory, we will undertake a process to estimate the amount of casualty loss. The process includes a number of factors, including touring all of the citrus groves by operational personnel, to assess the estimated fruit drop by grove and estimate the amount of fruit we expect to produce for the respective harvest season. As a result of this process, we would estimate the amount of casualty loss, if any, to reduce the carrying value of unharvested fruit crop on trees inventory.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation and amortization. Major improvements are capitalized while maintenance and repairs are expensed in the period the cost is incurred. Costs related to the development of citrus groves, through planting of trees, are capitalized. Such costs include land clearing, excavation and construction of ditches, dikes, roads and reservoirs among other costs. After the planting, caretaking costs or pre-productive maintenance costs are capitalized for four years. After four years, a grove is considered to have reached maturity and the accumulated costs are depreciated over 25 years, except for land clearing and excavation, which are considered costs of land and not depreciated.
Income Taxes
We use the asset and liability method of accounting for deferred income taxes. 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
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tax rates expected to apply to taxable income in the years in which those temporary differences are 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. A valuation allowance is provided to reduce deferred tax assets to the amount of future tax benefit when it is more likely than not that some portion or all of the deferred tax assets will not be realized. Projected future taxable income and ongoing tax planning strategies are considered and evaluated when assessing the need for a valuation allowance. Any increase or decrease in a valuation allowance could have a material adverse or beneficial impact on our income tax provision and net income or loss in the period the determination is made. For the years ended September 30, 2024 and September 30, 2023, we recorded a valuation allowance of $5,757 and $4,170, respectively. We recognize interest and/or penalties related to income tax matters in income tax expense.
We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which a change in judgment occurs. We record interest related to unrecognized tax benefits in income tax expense.
Impairment of Long-Lived Assets
We review our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. We record impairment losses on long-lived assets used in operations, other than goodwill, when events and circumstances indicate that the asset or asset group might be impaired and the estimated cash flows (undiscounted and without interest charges) to be generated by those assets or asset group over the remaining lives of the assets are less than the carrying amounts of those assets. In calculating impairments and the estimated cash flows, we assign its asset groups by determining the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets. The net carrying values of assets or asset groups not recoverable are reduced to their fair values. Our cash flow estimates are based on historical results adjusted to reflect our best estimates of future market conditions and operating conditions. As of September 30, 2024 and 2023, long-lived assets were comprised of property and equipment.
Fair Value Measurements
We categorize our financial instruments measured at fair value into a fair value hierarchy that prioritizes the inputs used in pricing the asset or liability into a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:
• Level 1 – Observable inputs such as quoted market prices for identical assets and liabilities in active markets;
• Level 2 – Inputs, other than the quoted prices for identical assets and liabilities in active markets, for which significant other observable market inputs are readily available; and
• Level 3 – Unobservable inputs in which there is little or no market data, such as internally developed valuation models which require the reporting entity to develop its own assumptions.
The carrying amounts of our 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. See Note 2. Summary of Significant Accounting Policies to our Consolidated Financial Statements included in this Annual Report for additional information about the fair value of our debt.
As of September 30, 2024 and 2023, we did not have any assets held for sale that had been measured at fair value on a non-recurring basis.
Impact of Accounting Pronouncements
See Item 8. “Financial Statements and Supplementary Data” – Note 1. Description of Business and Basis of Presentation to our Consolidated Financial Statements included in this Annual Report for additional information about the impact of accounting pronouncements.
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Item 7A. Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.