What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-01-14 compared with 2020-01-14 · 89 added, 23 removed, 183 unchanged (38% of the section changed)

2 unchanged sentences

As of October 31, 2020,we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) promulgated under the Exchange Act.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Annual Report.

During this evaluation, management identified deficiencies related to the inadequate design and operating effectiveness of certain internal controls related to an acquired foreign subsidiary in the first year the subsidiary was included in management’s evaluation of the effectiveness of the Company’s internal control over financial reporting.

While none of the deficiencies caused material misstatements to the financial statements, these deficiencies in aggregate represent a material weakness and presented a reasonable possibility that a material misstatement to the financial statements could have occurred.

As a result, as described below in “Management’s Report on Internal Control over Financial Reporting”, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this Annual Report.

Internal Control over Financial Reporting.

Refer to “Management’s Report on Internal Control over Financial Reporting” on page 59 and “Reports of Independent Registered Public Accounting Firm” on pages 60-62.

Refer to “Management’s Report on Internal Control over Financial Reporting” below.

Management’s Report on Internal Control over Financial Reporting

Management of Limoneira Company (the “Company”) is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in the Exchange Act Rule 13a-15(f).

Internal control over financial reporting is 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.

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.

The Company’s management, including the principal executive officer and principal financial officer, conducted an evaluation of the effectiveness of Limoneira Company’s internal control over financial reporting, based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

Management identified deficiencies in internal control over financial reporting related to the inadequate design and operating effectiveness of certain controls in the areas of journal entries and agribusiness revenues and expenses related to an acquired foreign subsidiary in the first year the subsidiary was included in management’s evaluation of the effectiveness of the Company’s internal control over financial reporting.

As a result, management concluded that the Company’s internal control over financial reporting as of October 31, 2020 was ineffective due to the material weakness.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.

Deloitte & Touche LLP, an independent registered public accounting firm, has audited the effectiveness of the Company’s internal control over financial reporting and has issued a report on internal control over financial reporting, which is included herein.

President and Chief Executive Officer

Mark Palamountain

Chief Financial Officer, Treasurer and Corporate Secretary

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Limoneira Company

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Limoneira Company and subsidiaries (the “Company”) as of October 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, because of the effect of the material weakness identified below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of October 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended October 31, 2020, of the Company and our report dated January 14, 2021, expressed an unqualified opinion on those financial statements and included an explanatory paragraph regarding the Company’s adoption of Accounting Standards Update (“ASU”) No.

2016-02, Leases.

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, included in the accompanying Management’s 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.

We are a public accounting firm registered with the 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 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, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

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.

Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management's assessment:

Foreign Subsidiary Process Level Controls

These deficiencies in the aggregate represent a material weakness.

This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the consolidated financial statements as of and for the year ended October 31, 2020 of the Company, and this report does not affect our report on such financial statements.

/s/ Deloitte & Touche LLP

Los Angeles, California

January 14, 2021

Changes in Internal Control over Financial Reporting .

There have been no significant changes in our internal control over financial reporting during the quarter ended October 31, 2019 or, to our knowledge, in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the identification of a material weakness in the control environment described above, there have been no significant changes in our internal control over financial reporting during the quarter ended October 31, 2020 or, to our knowledge, in other factors that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls .

3 unchanged sentences

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Acquisition of Trapani Fresh.

We have excluded Trapani Fresh's operations from our management’s report on internal control over financial reporting as we continue to evaluate their internal controls.

This exclusion is in accordance with the general guidance issued by the Staff of the SEC that an assessment of a recent business combination may be omitted from management’s report on internal control over financial reporting in the first year of consolidation.

Remediation of Material Weakness.

Management is committed to improving the Company’s internal control processes.

We are currently taking steps to enhance our process level controls over the recording of journal entries and controls over revenues and expenses at the foreign subsidiary where we identified the control deficiencies.

We are also enhancing management’s review controls over financial information of the foreign subsidiary.

Management believes these prompt actions should remediate the material weakness and improve the design and operating effectiveness of our internal control over financial reporting.

As we continue to evaluate and improve our internal control over financial reporting, additional measures to remediate the material weakness or modifications to certain of the remediation procedures may be necessary.

Other Information

11 unchanged sentences

Exhibits and Financial Statement Schedules

Financial Statements

(a)(1) Financial Statements

Management’s Report on Internal Control over Financial Reporting

8 unchanged sentences

Notes to Consolidated Financial Statements

(a)(2) Financial Statement Schedules

Per Item 15(a)(2), list the following documents filed as part of the report:

those financial statements required to be filed by Item 8 of this Form 10-K, and by paragraph (b) below.

See “Exhibit Index” set forth on page 109.

Per Item 15(c), registrants shall file, as financial statement schedules to this Form 10-K, the financial statements required by Regulation S-X (17 CFR 210) which are excluded from the annual report to shareholders by Rule 14a-3(b) including:

(1) separate financial statements of subsidiaries not consolidated and fifty percent or less owned persons;

(2) separate financial statements of affiliates whose securities are pledged as collateral;

and (3) schedules.

Form 10-K Summary

5 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below on January 14, 2021, by the following persons on behalf of the registrant and in the capacities indicated:

Signature Title

/s/ Gordon E.

Chairman of the Board of Directors

Kimball Chairman of the Board of Directors

/s/ Harold S.

Director, President and Chief Executive Officer

(Principal Executive Officer)

/s/ Mark Palamountain

Chief Financial Officer, Treasurer

Mark Palamountain

and Corporate Secretary

Edwards Director, President and Chief Executive Officer

Edwards (Principal Executive Officer)

/s/ Mark Palamountain Chief Financial Officer, Treasurer

Mark Palamountain and Corporate Secretary

(Principal Financial and Accounting Officer)

/s/ Elizabeth Blanchard Chess

/s/ Elizabeth Blanchard Chess Director

Elizabeth Blanchard Chess

/s/ John W.H.

/s/ Edgar Terry

Merriman Director

/s/ Edgar Terry Director

/s/ Donald R.

Rudkin Director

/s/ Robert M.

Sawyer Director

Slater Director

/s/ Amy Fukutomi Director

/s/ Jesus Loza Director

EXHIBIT INDEX

127 unchanged sentences

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Limoneira Lewis Community Builders, LLC - Financial Statements as of October 31, 2019

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

99.1* Limoneira Lewis Community Builders, LLC - Financial Statements as of October 31, 20 20 and 20 19

101.INS* XBRL Instance Document

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF* XBRL Taxonomy Extension Definition Linkbase Document

101.LAB* XBRL Taxonomy Extension Label Linkbase Document

101.PRE* XBRL Taxonomy Extension Presentation Linkbase Document

* Filed or furnished herewith.

5 unchanged sentences

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 9A. Controls and Procedures