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Item 7. Management’s Discussion and Analysis

2025-11-24 compared with 2024-12-02 · 117 added, 95 removed, 180 unchanged (54% of the section changed)

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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.

Alico, Inc., together with its subsidiaries (collectively, “Alico”, the “Company”, “we”, “us” or “our”) currently generates operating revenues primarily from the sale of our citrus products, and through leases of citrus groves, as well as farming, grazing and hunting leases, activities related to rock and sand mining royalties, sod sales, leases of oil extraction rights to third parties, and other miscellaneous operations generating income.

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.

While Alico Citrus, which holds the Company’s citrus production operations, has substantially wound down operations after the 2024/2025 harvest due to environmental and financial challenges, Alico remains committed to Florida’s agriculture industry, and will focus on its long-term diversified land usage and real estate development strategy.

For the years ended September 30, 2025 and 2024 we generated operating revenues of $44,066 and $46,643, respectively, a loss from operations of $203,901 and $67,454, respectively, and net (loss) income attributable to common stockholders of $(147,334) and $6,973, respectively.

Net cash provided by (used in) operating activities was $20,126 and $(30,497), respectively, for the years ended September 30, 2025 and 2024, respectively.

See Part I, Item 1, Business , included in this Annual Report for a discussion of our year highlights and our evolving business strategy.

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Our CODM assesses performance and allocates resources based on its reportable segments.

The Company has two segments as follows:

Our two segments are 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;

• 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.

• Land Management and Other Operations includes activities related to the leasing of citrus groves, farming, 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.

Revenues from Alico Citrus operations were 93.8% and 96.6%, of our total operating revenues for the years ended September 30, 2025 and 2024, respectively.

Revenues from Land Management and Other Operations were 6.2% and 3.4% of total operating revenues for the years ended September 30, 2025 and 2024, respectively.

This shift reflects our migration away from growing our own citrus and toward a land management-focused model as part of the Strategic Transformation.

Recent Developments

Amended Credit Agreement with Metropolitan Life Insurance Company

On September 29, 2025, we entered into an Eighth Amendment (the “Eighth Amendment”) to our Amended and Restated Credit Agreement dated as of December 1, 2014, as amended to date, by and among the Company, Alico Land

Development Inc., Alico Fruit Company, LLC and Met (as amended, restated, supplemented or otherwise modified from time to time, the “MetLife Credit Agreement”), which, among other things:

provided for a new $10,000 fixed-rate term loan ("Met Fixed-Rate Term Loan II"), with a maturity date of May 1, 2034;

amended certain mortgages to add additional real property as collateral;

added parties as mortgagors;

and modified the loan-to-value ratio covenant to require that the LTV Ratio (as defined in the MetLife Credit Agreement) be at all times less than 50%.

The proceeds from the Met Fixed‑Rate Term Loan II were used to repay all outstanding borrowings under our Loan Agreement with Prudential Mortgage Capital Company, LLC, dated December 31, 2012 (as amended to date, the “Prudential Credit Agreement”).

As a result of such repayment, the Prudential Credit Agreement was terminated in accordance with its terms.

Corkscrew Grove Villages Wildlife Underpass

In advance of future development of Corkscrew Grove Villages, Alico Inc.

is coordinating with the Florida Department of Transportation to design and construct a wildlife underpass as part of FDOT’s ongoing widening of State Road 82 in Collier County.

This collaboration reflects Alico’s commitment to environmental stewardship and conservation by creating a critical regional link that supports wildlife movement throughout Southwest Florida.

After informal consultation with Florida Fish and Wildlife Conservation Commission and the US Fish and Wildlife Service, Alico is taking initial steps to implement a 1,295-acre wildlife corridor planned as part of the Corkscrew Grove Villages project in eastern Collier County.

The wildlife underpass proposed as part of this corridor will help advance the panther recovery plan by providing a permanent regional connection to the Caloosahatchee dispersal zone at no additional cost to taxpayers.

On October 27, 2025, the Corkscrew Grove Stewardship District (the “CGSD”), a special district formed to facilitate financing and development of community infrastructure within its boundaries, entered into a Locally Funded Agreement (the “CGSD Funding Agreement”) with FDOT.

The CGSD was established in June 2025 and it will assist the Company in its efforts to effectively finance infrastructure, help restore and manage natural areas, and oversee the administration of master planned communities and lands.

Our Chief Executive Officer, John Kiernan, is the Board Chairman of the CGSD.

Through the CGSD Funding Agreement, we will provide funding to FDOT to support the construction of a wildlife‑crossing planned as part of the Corkscrew Villages project and on November 14, 2025, we deposited $5,071 with FDOT to fund the project.

The payment to the CGSD is reimbursable to the Company under the CGSD Funding Agreement.

Subject to final permitting and approval, this underpass may commence construction within the next six months.

Sale of Lily Grove

On November 4, 2025, we sold 579 acres of citrus land for $6,077.

Sale of Office and Shop in Frostproof

On November 19, 2025, sold our office and shop in Frostproof for $1,675.

Consolidated Results of Operations

The following discussion provides an analysis of our results of operations for the year ended September 30, 2025, as compared to the year ended September 30, 2024.

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(in thousands) September 30, Change

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Land Management and Other Operations 2,310 1,186 1,124 94.8 %

Total gross (loss) profit (56,383) 6,446 (62,829) NM

Total gross loss (192,194) (56,383) (135,811) 240.9 %

General and administrative expenses 11,707 11,071 636 5.7 %

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 %

Loss from operations (203,901) (67,454) (136,447) 202.3 %

Total other income, net 17,970 78,406 (60,436) (77.1) %

(Loss) income before income taxes (185,931) 10,952 (196,883) NM

Income tax (benefit) provision (38,423) 4,597 (43,020) NM

Net (loss) income (147,508) 6,355 (153,863) NM

Net loss attributable to noncontrolling interests 174 618 (444) (71.8) %

Net income attributable to Alico, Inc.

common stockholders $ 6,973 $ 1,835 $ 5,138 280.0 %

Net (loss) income attributable to Alico, Inc.

common stockholders $ (147,334) $ 6,973 $ (154,307) NM

NM - Not Meaningful

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Total operating revenues 100.0 % 100.0 %

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The following discussion provides an analysis of our reportable segments:

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Harvesting and Hauling 10,743 11,843 (1,100) (9.3) %

Fresh Fruit and other (229) (29,326) 29,097 (99.2) %

Fresh Fruit and other (20,193) (228) (19,965) NM

Grove Management Services 168 1,593 (1,425) (89.5) %

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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.

Our citrus groves have historically produced the majority of our annual operating revenues and the citrus grove business is seasonal because it is tied to the growing and harvest season.

For the years ended September 30, 2025 and 2024, in light of the Strategic Transformation, the first and second quarters of Alico’s year produce most of the Company’s annual revenue.

We sell our Early and Mid-Season and Valencia oranges to orange juice processors.

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Our Fresh Fruit revenue is derived from sales to packing houses that purchase the citrus on a per box basis.

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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.

We also 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.

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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.

Other expenses include the period costs of third-party grove caretaking, the purchase and reselling of third-party fruit and insurance proceeds for crop claims, which are shown as a reduction to operating expenses in the period the claims are received.

Comparison of the year ended September 30, 2025 and 2024 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.

The decrease in revenue for the year ended September 30, 2025, as compared to the year ended September 30, 2024, was primarily due to a 26.4% decrease in pound solids produced, driven by fruit drop as a result of Hurricane Milton, partially offset by an increase in the blended price per pound solids of 29.9% for the Early and Mid-season and Valencia crops as a result of more favorable pricing in one of our then-existing contracts with Tropicana.

We recognized a decrease in Grove Management Services revenues for the year ended September 30, 2025, as compared to the year ended September 30, 2024 of $1,932, which was due to the termination of the Grove Management Agreement reducing Grove Management revenues in the year ended September 30, 2025.

Revenue from sales of Fresh Fruit and other was relatively flat compared to the same period in the prior year.

The increase in Operating expenses for the year ended September 30, 2025, as compared to the year ended September 30, 2024, primarily relates to the accelerated depreciation of approximately $162,095 principally on our Citrus trees during the year ended September 30, 2025, as a result of the decision to wind down our citrus operations, as part of the Strategic Transformation, the impairment of our young trees, which were not yet being depreciated and the impairment of our long lived assets at one of our groves of $24,966.

Partially offsetting the increase in cost of sales were lower inventory adjustments of $9,895 during the year ended September 30, 2025, compared to $48,099 for the year ended September 30, 2024 and $20,381 of crop insurance proceeds received in connection with Hurricane Milton during the year ended September 30, 2025, which was recorded within Fresh Fruit and Other in the table above (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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Furthermore, our Harvesting and Hauling expenses decreased 9.3% as compared to the year ended September 30, 2024, driven by a decrease in the total number of boxes harvested and our Grove Management Services expenses decreased $1,425, as compared to the prior year as a result of the termination of the Grove Management Agreement.

Land Management and Other Operations

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Revenue From:

Land and Other Leasing $ 1,284 $ 1,327 $ (43) (3.2) %

Leasing and Royalties $ 2,393 $ 1,284 $ 1,109 86.4 %

Other 336 300 36 12.0 %

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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 Management and Other Operations includes lease income from farm leases (including leases of our citrus groves), grazing rights and hunting, as well as royalties received for mining and oil extraction rights, 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, 2025 and 2024 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 increase in revenues from Land Management and Other Operations for the year ended September 30, 2025, as compared to the prior year, was primarily due to an increase in rock and sand royalty income, sod sales and farm lease revenue, partially offset by lower grazing and hunting lease revenues due to the sale of the Alico Ranch.

The increase in operating expenses from Land Management and Other Operations for the year ended September 30, 2025, as compared to the prior year, was primarily due to cost of sales associated with sod sales and depreciation on trees in citrus groves leased to third parties, partially offset by lower ad valorem taxes.

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.

General and administrative expenses increased $636 for the year ended September 30, 2025 as compared to the year ended September 30, 2024, driven by the acceleration of depreciation on certain administrative assets and an increase in personnel and legal costs, as a result of our Strategic Transformation, partially offset by lower employee costs associated with our reduced workforce.

Other Income, net

Other income, net, for the years ended September 30, 2025 and 2024 was $17,970 and $78,406, 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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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 decrease in other income, net was primarily due to the sale of 2,796 acres of land for approximately $23,807 which resulted in a gain of $20,319, as compared to the year ended September 30, 2024, when we sold approximately 18,354 acres of land for $86,217 and recognized a gain of $81,416 (including the sale of 17,229 acres of the Alico Ranch to the State of Florida).

For the years ended September 30, 2025 and 2024, the (benefit) provision for income taxes was $(38,423) and $4,597, respectively, and the related effective income tax rates were 20.6% and 42.0%, respectively.

The effective tax rate for the year ended September 30, 2025 is different than the statutory tax rate principally due to an increase in the valuation allowance on our charitable deduction carryforward, disallowed interest carryforward, and loss carryforwards, as well as state income taxes.

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.

We do not anticipate that we will be able to recognize the majority of the charitable deduction carryover before it expires in 2027.

As of September 30, 2025 and 2024, the valuation allowance was $14,094 and $5,757, respectively, resulting in a provision of $8,336 and $1,588, respectively.

Liquidity and Capital Resources

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Principal amount of term loans and lines of credit $ 85,950 $ 92,551 $ (6,601)

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

Current ratio 9.56 to 1 3.81 to 1 NM

Minimum Liquidity Requirement $ 5,858 N/A NM

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.

On January 6, 2025, we announced a Strategic Transformation in the Company’s business focus, to wind down its Alico Citrus division, which holds the Company’s citrus production operations, to focus on a long-term diversified land usage and real estate development strategy.

Due to increasing financial challenges from citrus greening disease and environmental factors for many seasons, the Company has decided to not spend further material capital on its citrus operations and to wind down substantially all of its Citrus’ primary operations after completion of the current harvest in April 2025.

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.

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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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operating expenses including employee costs, the cost of maintaining the citrus groves, harvesting and hauling of citrus products, capital expenditures, entitlement and development costs, stock repurchases, dividends, debt service costs including interest and principal payments on term loans and other credit facilities and acquisitions.

Our expected principal uses of cash that affect our liquidity position, in light of the Strategic Transformation and the workforce reduction, are expected to include lower employee costs, lower costs of maintaining citrus groves and lower capital expenditures.

In addition, on March 25, 2025, our Board approved a stock repurchase program authorizing us to repurchase up to $50,000 shares of common stock, with the amount and timing of repurchases depending on market conditions and corporate needs.

During the year ended September 30, 2025, we recorded an additional valuation allowance against our deferred tax assets, which is recorded in the annual effective tax rate.

We are required to assess the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets.

A significant piece of objective negative evidence evaluated was the cumulative loss expected to be incurred over a three-year period during the year ending September 30, 2025.

Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth.

The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.

Management believes that a combination of cash-on-hand, cash generated from operations, asset sales and availability under our RLOC 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.

Borrowing Facilities and Long-term Debt

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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.

On September 29, 2025, we entered into an Eighth Amendment (the “Eighth Amendment”) to the credit agreement with Met (the "Eighth Amendment").

Among other things, the Eighth Amendment provided for a new $10,000 fixed rate term loan bearing interest at 6.21% ("Met Fixed-Rate Term Loan II") with a maturity date of May 1, 2034;

amended certain mortgages to add additional real property as collateral and add additional mortgagors;

and modified the loan-to-value ratio covenant to require that the LTV Ratio be at all times less than 50%.

The proceeds from the Met Fixed-Rate Term Loan II were used to repay all outstanding borrowings under our loan agreement with Prudential Mortgage Capital Company, LLC, dated December 31, 2012 (as amended to date, the "Prudential Credit Agreement") consisting of Pru loans A & B with aggregate principal of $9,297, plus a prepayment premium of $649 and accrued interest.

As a result of such repayment, the Prudential Credit Agreement was terminated in accordance with its terms.

The Met Fixed-Rate Term Loan II is interest-only, with a balloon payment due at maturity on May 1, 2034 and reduces our total required annual principal repayments by $1,160 per year.

Subsequent to the Eighth Amendment, our credit facilities are subject to a Minimum Liquidity Requirement of $5,858 and an LTV Cap of 50%.

As of September 30, 2025, we were in compliance with all of the financial covenants and were able to draw the entire amount of the RLOC, less current borrowings, and remain under the LTV Cap.

The term loans and RLOC are secured by real property.

The security for the term loans and RLOC as of the most recent amendment, consists of approximately 40,428 gross acres of land.

We may utilize available cash and proceeds from asset sales to pay down indebtedness and for other corporate purposes, subject to market conditions and Board discretion.

Any decision regarding share repurchases or dividends will depend on our cash flows, liquidity, credit facility covenants, and other factors, and there can be no assurance that additional financing will be available on acceptable terms, or at all.

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

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(in thousands) September 30,

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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Net cash provided by (used in) operating activities $ 20,126 $ (30,497)

Net cash provided by investing activities $ 24,144 68,178

Net cash used in financing activities $ (8,778) (37,975)

Net increase (decrease) in cash and cash equivalents and restricted cash $ 35,492 $ (294)

Net cash provided by (used in) operating activities

Cash provided by (used in) operating activities for the year ended September 30, 2025, was primarily due to $20,381 in crop insurance proceeds as a result of Hurricane Milton and a $15,969 decrease in inventory as we wind down our Citrus operations in connection with our Strategic Transformation, partially offset by lower cash generated from our citrus operations, as a result of fruit drop caused by Hurricane Milton.

The decrease in cash provided by (used in) operating activities for the year ended September 30, 2024 was driven by a $26,258 increase in inventory.

Net cash provided by investing activities

The decrease in net cash provided by investing activities for the year ended September 30, 2025, as compared to the year ended September 30, 2024, was driven by the sale of 2,796 acres of land for approximately $23,807 for the year ended September 30, 2025 as compared to the sale of 18,354 acres of land for $86,217 in the prior year period.

Net cash used in financing activities

The decrease in net cash used in financing activities for the year ended September 30, 2025, as compared to the year ended September 30, 2024, was primarily due to a decrease in the amount of borrowings which were repaid during the year ended September 30, 2025, principally as a result of the repayment of the $19,094 Met Variable-Rate Term Loans of on December 26, 2023.

Contractual Obligations

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These include principal and interest payments on long-term debt as described in Note 8.

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.

Long-Term Debt and Lines of Credit and operating leases as described in Note 12.

Leases to our Consolidated Financial Statements included in this Annual Report.

Critical Accounting Policies and Estimates

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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.

After the planting, caretaking costs or pre-productive maintenance costs are capitalized for 4 years.

After 4 years, a grove is considered to have reached maturity and the accumulated costs were historically depreciated over 25 years, except for land clearing and excavation, which are considered costs of land and not depreciated.

Refer to Note 5.

Property and Equipment, Net to our Consolidated Financial Statements included in this Annual Report for a discussion of a change in the estimated useful life of the Company’s citrus trees, certain equipment (principally irrigation related), and the Buildings and improvements within its citrus groves.

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.

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.

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.

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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.

We record impairment losses on long-lived assets used in operations, or asset group, when events and circumstances indicate that the assets 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 or asset group are less than the carrying amounts of those assets.

In calculating impairments and the estimated cash flows, we assign our 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 group not recoverable are reduced to their fair values.

Alico’s cash flow estimates are based on historical results adjusted to reflect best estimates of future market conditions and operating conditions.

We have determined that the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of the other Company assets is the Grove level and includes, its Citrus Trees, Land, certain equipment (principally irrigation related) and the Buildings and improvements within its citrus groves, which are used together to generate cash flows from fruit for sales to its customers.

For the year ended September 30, 2025, we recognized an impairment of its long-lived assets at one of our groves, as well as our young trees, which were not yet being depreciated, of $24,966, which was recorded within Operating expenses in its Alico Citrus Segment.

The fair value of the assets which were determined to be impaired were based primarily on consideration of comparable land sales and recent appraisals which considered comparable land sales, as well as any cash flows expected to be received from, or related to its operations (such as the fruit harvest and crop insurance proceeds) through the third quarter ended June 30, 2025.

No impairment of long-lived assets was recognized during the year ended September 30, 2024.

As of September 30, 2025 and 2024, long-lived assets were comprised of property, including citrus trees, and equipment.

Fair Value Measurements

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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

“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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Quantitative and Qualitative Disclosures about Market Risk

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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 7. Management’s Discussion and Analysis