What changed in this filing

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Item 1. Financial Statements

2023-03-09 compared with 2022-09-08 · 259 added, 381 removed, 409 unchanged (61% of the section changed)

3 unchanged sentences

($ in thousands, except share amounts)

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Current assets:

18 unchanged sentences

Payables to related parties 5,226 4,860

Income taxes payable 7,619 219

Current portion of long-term debt 448 1,732

5 unchanged sentences

Total liabilities 110,259 176,654

Commitments and contingencies (See Note 16) — —

Commitments and contingencies — —

Series B Convertible Preferred Stock – $ 100.00 par value ( 50,000 shares authorized:

14,790 shares issued and outstanding at July 31, 2022 and October 31, 2021) ( 8.75 % coupon rate)

14,790 shares issued and outstanding at January 31, 2023 and October 31, 2022) ( 8.75 % coupon rate)

Series B-2 Convertible Preferred Stock – $ 100.00 par value ( 10,000 shares authorized:

9,300 shares issued and outstanding at July 31, 2022 and October 31, 2021) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

9,300 shares issued and outstanding at January 31, 2023 and October 31, 2022) ( 4 % dividend rate on liquidation value of $ 1,000 per share)

Stockholders' Equity:

Series A Junior Participating Preferred Stock – $ 0.01 par value ( 20,000 shares authorized:

zero issued or outstanding at July 31, 2022 and October 31, 2021)

zero issued or outstanding at January 31, 2023 and October 31, 2022)

Common Stock – $ 0.01 par value ( 39,000,000 shares authorized:

17,972,528 and 17,936,377 shares issued and 17,721,551 and 17,685,400 shares outstanding at July 31, 2022 and October 31, 2021, respectively)

18,081,581 and 17,935,292 shares issued and 17,830,604 and 17,684,315 shares outstanding at January 31, 2023 and October 31, 2022, respectively)

Additional paid-in capital 166,232 165,169

1 unchanged sentence

Accumulated other comprehensive loss ( 3,961 ) ( 7,908 )

Treasury stock, at cost, 250,977 shares at July 31, 2022 and October 31, 2021

Treasury stock, at cost, 250,977 shares at January 31, 2023 and October 31, 2022

( 3,493 ) ( 3,493 )

7 unchanged sentences

Three Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Net revenues:

5 unchanged sentences

Other operations 1,238 1,074

Loss on disposal of assets, net 242 — 503 —

Gain on disposal of assets, net ( 39,742 ) ( 85 )

Selling, general and administrative 9,280 6,599

Total costs and expenses 12,017 48,832

Operating income 11,060 3,374 4,088 118

Operating income (loss) 25,884 ( 9,558 )

Other (expense) income:

2 unchanged sentences

Equity in earnings of investments, net 253 51

Other income, net 13 32 106 83

Other (expense) income, net ( 2,612 ) 15

Total other (expense) income ( 3,523 ) 302

Income before income tax provision 10,638 4,505 3,676 1,889

Income tax provision ( 3,313 ) ( 1,335 ) ( 1,385 ) ( 1,122 )

Net income 7,325 3,170 2,291 767

Income (loss) before income tax (provision) benefit 22,361 ( 9,256 )

Income tax (provision) benefit ( 6,827 ) 2,650

Net income (loss) 15,534 ( 6,606 )

Net loss attributable to noncontrolling interest 97 88

Net income attributable to Limoneira Company 7,377 3,705 2,420 1,430

Net income (loss) attributable to Limoneira Company 15,631 ( 6,518 )

Preferred dividends ( 125 ) ( 125 )

Net income applicable to common stock $ 7,252 $ 3,580 $ 2,044 $ 1,054

Basic net income per common share $ 0.41 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share $ 0.40 $ 0.20 $ 0.11 $ 0.06

Net income (loss) applicable to common stock $ 15,506 $ ( 6,643 )

Basic net income (loss) per common share $ 0.87 $ ( 0.38 )

Diluted net income (loss) per common share $ 0.84 $ ( 0.38 )

Weighted-average common shares outstanding-basic 17,573,000 17,448,000

2 unchanged sentences

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands)

Three Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Net income $ 7,325 $ 3,170 $ 2,291 $ 767

Other comprehensive (loss) income, net of tax:

Net income (loss) $ 15,534 $ ( 6,606 )

Other comprehensive income, net of tax:

Foreign currency translation adjustments 2,223 55

Minimum pension liability adjustment, net of tax of $ 27 , $ 50 , $ 81 and $ 150 for the three and nine months ended July 31, 2022 and 2021, respectively.

72 135 217 403

Total other comprehensive (loss) income, net of tax ( 756 ) ( 907 ) ( 1,562 ) 733

Comprehensive income 6,569 2,263 729 1,500

Minimum pension liability adjustment, net of tax of $( 135 ) and $ 27 for the three months ended January 31, 2023 and 2022, respectively.

Pension settlement, net of tax of $ 756 and $ 0 for the three months ended January 31, 2023 and 2022, respectively.

Total other comprehensive income, net of tax 3,947 127

Comprehensive income (loss) 19,481 ( 6,479 )

Comprehensive loss attributable to noncontrolling interest 97 86

Comprehensive income attributable to Limoneira Company $ 6,649 $ 2,821 $ 890 $ 2,130

Comprehensive income (loss) attributable to Limoneira Company $ 19,578 $ ( 6,393 )

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7 unchanged sentences

Preferred Series B-2

Shares Amount Capital Earnings Loss Stock Interest Equity Stock Stock

Shares Amount Capital Earnings (Loss) Income Stock Interest Equity Stock Stock

Balance at October 31, 2022 17,684,315 $ 177 $ 165,169 $ 15,500 $ ( 7,908 ) $ ( 3,493 ) $ 11,609 $ 181,054 $ 1,479 $ 9,331

6 unchanged sentences

Stock compensation 146,289 1 1,063 — — — — 1,064 — —

Exchange of common stock ( 55,362 ) — ( 900 ) — — — — ( 900 ) — —

Net loss — — — ( 6,518 ) — — ( 88 ) ( 6,606 ) — —

Noncontrolling interest adjustment — — — — — — ( 78 ) ( 78 ) — —

Net income — — — 15,631 — — ( 97 ) 15,534 — —

Other comprehensive income, net of tax — — — — 3,947 — — 3,947 — —

Balance at January 31, 2023 17,830,604 $ 178 $ 166,232 $ 29,669 $ ( 3,961 ) $ ( 3,493 ) $ 11,434 $ 200,059 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,325 ) — — — ( 1,325 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 33 ) — — — ( 33 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 34,231 — 378 — — — — 378 — —

Exchange of common stock ( 12,718 ) — ( 186 ) — — — — ( 186 ) — —

Net income — — — 1,561 — — 11 1,572 — —

Other comprehensive loss, net of tax — — — — ( 933 ) — ( 6 ) ( 939 ) — —

Balance at April 30, 2022 17,721,551 $ 180 $ 164,253 $ 13,691 $ ( 6,539 ) $ ( 3,493 ) $ 11,884 $ 179,976 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,325 ) — — — ( 1,325 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 618 — — — — 618 — —

Net income (loss) — — — 7,377 — — ( 52 ) 7,325 — —

Other comprehensive loss, net of tax — — — — ( 756 ) — ( 28 ) ( 784 ) — —

Balance at July 31, 2022 17,721,551 $ 180 $ 164,871 $ 19,618 $ ( 7,295 ) $ ( 3,493 ) $ 11,804 $ 185,685 $ 1,479 $ 9,331

LIMONEIRA COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND TEMPORARY EQUITY (CONTINUED)

($ in thousands)

Stockholders' Equity Temporary Equity

3 unchanged sentences

Preferred Series B-2

Shares Amount Capital Earnings Loss Stock Interest Equity Stock Stock

Shares Amount Capital Earnings (Loss) Income Stock Interest Equity Stock Stock

Balance at October 31, 2021 17,685,400 $ 179 $ 163,965 $ 21,552 $ ( 5,733 ) $ ( 3,493 ) $ 11,965 $ 188,435 $ 1,479 $ 9,331

7 unchanged sentences

Exchange of common stock ( 55,362 ) — ( 900 ) — — — — ( 900 ) — —

Net (loss) income — — — ( 4,208 ) — — 292 ( 3,916 ) — —

Net loss — — — ( 6,518 ) — — ( 88 ) ( 6,606 ) — —

Other comprehensive income, net of tax — — — — 127 — 2 129 — —

Balance at January 31, 2022 17,700,038 $ 180 $ 164,061 $ 13,581 $ ( 5,606 ) $ ( 3,493 ) $ 11,879 $ 180,602 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,327 ) — — — ( 1,327 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 33 ) — — — ( 33 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation 473 — 570 — — — — 570 — —

Net income (loss) — — — 1,933 — — ( 420 ) 1,513 — —

Other comprehensive income, net of tax — — — — 711 — 17 728 — —

Balance at April 30, 2021 17,685,400 $ 179 $ 163,020 $ 25,620 $ ( 5,908 ) $ ( 3,493 ) $ 13,669 $ 193,087 $ 1,479 $ 9,331

Dividends Common ($ 0.075 per share)

— — — ( 1,326 ) — — — ( 1,326 ) — —

Dividends Series B ($ 2.19 per share)

— — — ( 32 ) — — — ( 32 ) — —

Dividends Series B-2 ($ 10 per share)

— — — ( 93 ) — — — ( 93 ) — —

Stock compensation — — 440 — — — — 440 — —

Noncontrolling interest adjustment — — — — — — ( 1,331 ) ( 1,331 ) — —

Net income (loss) — — — 3,705 — — ( 535 ) 3,170 — —

Other comprehensive loss, net of tax — — — — ( 907 ) — ( 23 ) ( 930 ) — —

Balance at July 31, 2021 17,685,400 $ 179 $ 163,460 $ 27,874 $ ( 6,815 ) $ ( 3,493 ) $ 11,780 $ 192,985 $ 1,479 $ 9,331

The accompanying notes are an integral part of these unaudited consolidated financial statements.

2 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

Operating activities

Net income $ 2,291 $ 767

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ 15,534 $ ( 6,606 )

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

Depreciation and amortization 2,447 2,480

Loss (gain) on disposal of assets, net 503 ( 20 )

Gain on disposal of assets, net ( 39,742 ) ( 85 )

Stock compensation expense 1,064 997

1 unchanged sentence

Equity in earnings of investments, net ( 253 ) ( 51 )

Cash distributions from equity investments 132 —

Deferred income taxes 6,827 ( 2,650 )

4 unchanged sentences

Prepaid expenses and other current assets 529 ( 1,676 )

Income taxes receivable — 5,911

Other assets ( 10 ) 29

2 unchanged sentences

Other long-term liabilities ( 430 ) ( 112 )

Net cash provided by operating activities 10,919 16,802

Net cash used in operating activities ( 21,190 ) ( 8,162 )

Investing activities

Capital expenditures ( 2,151 ) ( 2,080 )

Net proceeds from sale of assets 110 87

Net proceeds from sales of assets 98,888 1,090

Net proceeds from sale of real estate development assets 2,577 —

Cash distribution from Trapani Fresh 82 —

Collection on notes receivable — 250

Cash distribution from equity investment — 106

Equity investment contributions ( 275 ) —

Investments in mutual water companies and water rights ( 11 ) —

Net cash used in investing activities ( 5,302 ) ( 8,716 )

Net cash provided by (used in) investing activities 99,110 ( 740 )

Financing activities

1 unchanged sentence

Repayments of long-term debt ( 122,692 ) ( 32,731 )

Proceeds from equipment financings 1,020 —

Principal paid on finance lease and equipment financings ( 107 ) ( 69 )

2 unchanged sentences

Exchange of common stock — ( 900 )

Net cash used in financing activities ( 4,814 ) ( 7,809 )

Net cash (used in) provided by financing activities ( 66,321 ) 9,286

Effect of exchange rate changes on cash 8 ( 7 )

5 unchanged sentences

(In thousands)

Nine Months Ended

Three Months Ended

Supplemental disclosures of cash flow information

Cash paid during the period for interest (net of amounts capitalized) $ 1,006 $ 618

Cash received during the period for income taxes, net $ — $ 5,942

Non-cash investing and financing activities:

Capital expenditures accrued but not paid at period-end $ 818 $ 25

Accrued contribution obligation of investment in water company $ — $ 450

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7 unchanged sentences

(“Sunkist”), an agricultural marketing cooperative, and sells a portion of its oranges, specialty citrus and other crops to Sunkist-licensed and other third-party packinghouses.

Through fiscal year 2021, the Company sold the majority of its avocado production to Calavo Growers, Inc.

(“Calavo”), a packing and marketing company listed on the NASDAQ Global Select Market under the symbol CVGW.

In February 2022, the Company terminated its Avocado Marketing Agreement and the associated Letter Agreement Regarding Fruit Commitment with Calavo to pursue opportunities with other packing and marketing companies.

Basis of Presentation and Preparation

8 unchanged sentences

Summary of Significant Accounting Policies

Comprehensive Income

Comprehensive income represents all changes in a company’s net assets, except changes resulting from transactions with stockholders.

Other comprehensive income or loss primarily includes foreign currency translation items and defined benefit pension items.

Comprehensive Income (Loss)

Comprehensive income (loss) represents all changes in a company’s net assets, except changes resulting from transactions with stockholders.

Other comprehensive income includes foreign currency translation items and defined benefit pension items.

Accumulated other comprehensive loss is reported as a component of the Company's stockholders' equity.

The following table summarizes other comprehensive (loss) income by component (in thousands):

Three Months Ended July 31,

Pre-tax Amount Tax Expense Net Amount Pre-tax Amount Tax Expense Net Amount

The following table summarizes other comprehensive income by component (in thousands):

Three Months Ended January 31,

Pre-tax Amount Tax Benefit (Expense) Net Amount Pre-tax Amount Tax Expense Net Amount

Foreign currency translation adjustments $ 2,223 $ — $ 2,223 $ 55 $ — $ 55

Minimum pension liability adjustments:

Other comprehensive gain before reclassifications 99 ( 27 ) 72 185 ( 50 ) 135

Other comprehensive loss $ ( 729 ) $ ( 27 ) $ ( 756 ) $ ( 857 ) $ ( 50 ) $ ( 907 )

Other comprehensive (loss) income before reclassifications ( 355 ) 135 ( 220 ) 99 ( 27 ) 72

Amounts reclassified to earnings included in "Other (expense) income, net" 2,700 ( 756 ) 1,944 — — —

Other comprehensive income $ 4,568 $ ( 621 ) $ 3,947 $ 154 $ ( 27 ) $ 127

LIMONEIRA COMPANY

1 unchanged sentence

Summary of Significant Accounting Policies (continued)

Comprehensive Income (continued)

Nine Months Ended July 31,

Pre-tax Amount Tax Expense Net Amount Pre-tax Amount Tax Expense Net Amount

Foreign currency translation adjustments $ ( 1,779 ) $ — $ ( 1,779 ) $ 330 $ — $ 330

Minimum pension liability adjustments:

Other comprehensive gain before reclassifications 298 ( 81 ) 217 553 ( 150 ) 403

Other comprehensive (loss) income $ ( 1,481 ) $ ( 81 ) $ ( 1,562 ) $ 883 $ ( 150 ) $ 733

The following table summarizes the changes in accumulated other comprehensive loss by component (in thousands):

Foreign Currency Translation Loss Defined Benefit Pension Plan Accumulated Other Comprehensive Loss

Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss (Income)

Balance at October 31, 2022 $ ( 6,184 ) $ ( 1,724 ) $ ( 7,908 )

Other comprehensive (loss) income ( 1,779 ) 217 ( 1,562 )

Balance at July 31, 2022 $ ( 5,533 ) $ ( 1,762 ) $ ( 7,295 )

Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss

Other comprehensive income 2,223 1,724 3,947

Balance at January 31, 2023 $ ( 3,961 ) $ — $ ( 3,961 )

Foreign Currency Translation (Loss) Gain Defined Benefit Pension Plan Accumulated Other Comprehensive Loss (Income)

Balance at October 31, 2021 $ ( 3,754 ) $ ( 1,979 ) $ ( 5,733 )

Other comprehensive income 55 72 127

Balance at July 31, 2021 $ ( 2,739 ) $ ( 4,076 ) $ ( 6,815 )

Balance at January 31, 2022 $ ( 3,699 ) $ ( 1,907 ) $ ( 5,606 )

COVID-19 Pandemic

There is uncertainty around the breadth and duration of the Company's business disruptions related to the COVID-19 pandemic.

The decline in demand for the Company's products beginning the second quarter of fiscal year 2020, which it believes was due to the COVID-19 pandemic, negatively impacted its sales and profitability for the last three quarters of fiscal year 2020, all of fiscal year 2021, and the first three quarters of fiscal year 2022.

The Company also expects the COVID-19 pandemic to impact its sales and profitability in future periods.

There is continued uncertainty around the breadth and duration of the Company's business disruptions related to the COVID-19 pandemic.

The decline in demand for the Company's products beginning the second quarter of fiscal year 2020, has negatively impacted its sales and profitability for the last three years.

The COVID-19 pandemic may impact its sales and profitability in future periods.

The duration of these trends and the magnitude of such impacts are uncertain and therefore cannot be estimated at this time, as they are influenced by a number of factors, many of which are outside management’s control.

The full impact of the COVID-19 pandemic on the Company's results of operations, financial condition, and liquidity, including its ability to comply with debt covenants, for fiscal year 2023 and beyond, is driven by estimates that contain uncertainties.

Recent Accounting Pronouncements

Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

This amendment simplifies accounting for convertible instruments by removing major separation models currently required under GAAP.

Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features.

The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it.

The ASU also simplifies the diluted earnings per share (EPS) calculation in certain areas.

ASU 2020-06 is effective for public business entities that meet the definition of a SEC filer for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted for fiscal years beginning after December 15, 2020.

The Company adopted this ASU effective November 1, 2021 and the adoption did not have a material impact on its consolidated financial statements.

Concentrations and Geographic Information

Concentrations of credit risk with respect to revenues and accounts receivable are limited due to a large, diverse customer base.

One customer represented 13 % of revenue for the three months ended January 31, 2023.

Two individual customers represented 15 % and 12 % of revenue, respectively, for the three months ended January 31, 2022.

One individual customer represented 11 % of accounts receivable, net as of January 31, 2023.

No individual customer represented more than 10% of accounts receivable, net as of October 31, 2022.

One individual supplier represented 13 % of accounts payable as of January 31, 2023.

No individual supplier represented more than 10% of accounts payable as of October 31, 2022.

Lemons procured from third-party growers were 66 % and 57 % of the Company's lemon supply for the three months ended January 31, 2023 and 2022, respectively.

One third-party grower was 17 % and 20 % of the lemon supply for the three months ended January 31, 2023 and 2022, respectively.

The Company maintains its cash in federally insured financial institutions.

The account balances at these institutions periodically exceed Federal Deposit Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of risk related to amounts on deposit in excess of FDIC insurance coverage.

During the three months ended January 31, 2023 and 2022, the Company had approximately $ 252,000 and $ 208,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

("PDA") and Agricola San Pablo SpA ("San Pablo") and approximately $ 74,000 and $ 147,000 , respectively, of total sales in Argentina by Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh").

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $ 58,000 for the three months ended January 31, 2023 and was included in selling, general and administrative expenses in the consolidated statements of operations.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Concentrations and Geographic Information

Concentrations of credit risk with respect to revenues and trade receivable are limited due to a large, diverse customer base.

One customer represented 11 % of revenue for the nine months ended July 31, 2022.

Two customers represented 17 % and 13 % of revenue, respectively, for the nine months ended July 31, 2021.

No individual customer represented more than 10% of accounts receivable, net as of July 31, 2022 or October 31, 2021.

Lemons procured from third-party growers were 46 % and 57 % of the Company's lemon supply for the three months ended July 31, 2022 and 2021, respectively, and were 51 % and 51 % of the Company's lemon supply for the nine months ended July 31, 2022 and 2021, respectively.

One third-party grower was 10 % of the lemon supply for the nine months ended July 31, 2021.

During the three months ended July 31, 2022 and 2021, the Company had approximately $ 491,000 and $ 578,000 , respectively, of total sales in Chile by Fruticola Pan de Azucar S.A.

("PDA") and Agricola San Pablo SpA ("San Pablo").

During the nine months ended July 31, 2022 and 2021, the Company had approximately $ 3,202,000 and $ 2,555,000 , respectively, of total sales in Chile by PDA and San Pablo.

In March 2022, the Company signed an agreement to lease Finca Santa Clara, its 1,200 -acre lemon ranch in Argentina, to FGF Trapani ("FGF"), its 49 % partner in Trapani Fresh Consorcio de Cooperacion ("Trapani Fresh").

The lease is retroactive beginning November 1, 2021, with a term of 14 months at a fixed sum of $ 400,000 , payable in five equal, monthly installments beginning August 2022 until December 2022.

During the three and nine months ended July 31, 2022, the Company had approximately $ 86,000 and $ 257,000 , respectively, of lease income by Trapani Fresh included in other operations revenue.

During the three and nine months ended July 31, 2021, the Company had approximately $ 710,000 and $ 3,265,000 , respectively, of total agribusiness sales in Argentina by Trapani Fresh.

Aggregate foreign exchange transaction losses realized for our foreign subsidiaries was approximately $ 137,000 and $ 598,000 for the nine months ended July 31, 2022 and 2021, respectively, and were included in selling, general and administrative expenses in the consolidated statements of operations.

In October 2022, the Company entered into a Purchase and Sale Agreement, as amended, (the “Agreement”) with PGIM Real Estate Finance, LLC (“PGIM”) to sell 3,537 acres of land and citrus orchards in Tulare County, California (the “Northern Properties”) for a purchase price of approximately $ 100,405,000 .

On January 25, 2023, the Board approved the Agreement creating a binding agreement of the Company to sell the Northern Properties and the transaction closed on January 31, 2023.

The following is a summary of the transaction (in thousands):

January 31, 2023

Net cash proceeds received $ 85,891

Debt directly repaid through the transaction 12,917

Total net proceeds received 98,808

net book value of assets sold

Cultural costs 4,405

Property, plant and equipment, net 53,144

Intangible assets, net 12

Other assets 1,320

Accrued liabilities ( 68 )

Gain on disposal of assets $ 39,995

The proceeds were used to pay down all of the Company’s domestic debt except the AgWest Farm Credit $ 40,000,000 non-revolving line of credit.

The Northern Properties component, including an allocation of interest expense related to the debt directly repaid through the transaction, had a pretax loss of $ 1,667,000 and $ 2,720,000 for the three months ended January 31, 2023 and 2022, respectively.

On January 31, 2023, the Company entered into a Farm Management Agreement (“FMA”) with an affiliate of PGIM to provide farming, management and operations services related to the Northern Properties.

The FMA has an initial term expiring March 31, 2024, and thereafter continuing from year to year unless earlier terminated under the terms of the FMA.

Further, on January 31, 2023, the Company entered into a Grower Packing and Marketing Agreement to provide packing, marketing and selling services for lemons harvested on the Northern Properties for a minimum five-year term, subject to certain benchmarking standards.

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following (in thousands):

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Prepaid supplies and insurance $ 3,315 $ 2,958

Note receivable and related interest — 2,438

Real estate development held for sale — 2,670

4 unchanged sentences

Real Estate Development

Real estate development assets are comprised primarily of land and land development costs and consist of the following (in thousands):

July 31, 2022 October 31, 2021

East Area I - Retained Property $ 13,633 $ 13,335

East Area II 9,598 9,493

$ 23,231 $ 22,828

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

Real estate development assets are comprised primarily of land and land development costs for the East Area II property in the amount of $ 9,849,000 and $ 9,706,000 at January 31, 2023 and October 31, 2022, respectively.

East Area I, Retained Property and East Area II

1 unchanged sentence

In November 2015 (the “Transaction Date”), the Company entered into a joint venture with The Lewis Group of Companies (“Lewis”) for the residential development of its East Area I real estate development project.

To consummate the transaction, the Company formed Limoneira Lewis Community Builders, LLC (“LLCB”) as the development entity, contributed its East Area I property to LLCB and sold a 50 % interest in LLCB to Lewis for $ 20,000,000 .

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Real Estate Development (continued)

East Area I, Retained Property and East Area II (continued)

The Company and LLCB also entered into a Retained Property Development Agreement on the Transaction Date (the "Retained Property Agreement").

Under the terms of the Retained Property Agreement, LLCB transferred certain contributed East Area I property, which is entitled for commercial development, back to the Company (the "Retained Property") and arranged for the design and construction of certain improvements to the Retained Property, subject to certain reimbursements by the Company.

The balance in Retained Property and East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 5,771,000 at July 31, 2022 and October 31, 2021, which is included in payables to related parties.

The balance in East Area II includes estimated costs incurred by and reimbursable to LLCB of $ 3,444,000 at January 31, 2023 and October 31, 2022, which is included in payables to related parties.

In January 2018, LLCB entered into a $ 45,000,000 unsecured Line of Credit Loan Agreement and Promissory Note (the “Loan”) with Bank of America, N.A.

to fund early development activities.

The Loan, as modified and extended, matures February 22, 2023.

The interest rate on the Loan is LIBOR plus 2.85 % and is payable monthly.

Effective as of February 22, 2023, the Loan maturity date was extended to February 22, 2024 and the maximum borrowing amount was reduced to $ 35,000,000 .

As of February 1, 2023, the interest rate on the Loan transitioned from the London Interbank Offered Rate ("LIBOR") to the Bloomberg Short-Term Bank Yield Index rate ("BSBY") plus 2.85 % and is payable monthly.

The Loan contains certain customary default provisions and LLCB may prepay any amounts outstanding under the Loan without penalty.

The Loan had an outstanding balance of $ 2,500,000 as of July 31, 2022.

The Loan has a one year extension option through February 22, 2024 subject to terms and conditions as defined in the Loan agreement, with the maximum borrowing amount reduced to $ 35,000,000 during the extension period.

The Loan had an outstanding balance of $ 9,800,000 as of January 31, 2023.

In February 2018, the Company and certain principals from Lewis guaranteed the obligations under the Loan.

3 unchanged sentences

Additionally, a Reimbursement Agreement was executed between the Lewis guarantors and the Company, which provides for unpaid liabilities of LLCB to be shared pro-rata by the Lewis guarantors and the Company in proportion to their percentage interest in LLCB.

Through July 31, 2022, LLCB has closed sales of initial residential lots representing 586 residential units.

In September 2022, the Company entered into an agreement with LLCB to sell its East Area 1 - Retained Property to potentially develop additional residential units.

The Company expects to close the transaction in the fourth quarter of fiscal year 2022, receive approximately $ 8,000,000 in cash proceeds and record an estimated gain of approximately $ 4,700,000 .

In October 2022, the Company entered into a joint venture with Lewis for the development of the Retained Property.

The Company formed LLCB II, LLC ("LLCB II") as the development entity, contributed the Retained Property to the joint venture and sold a 50 % interest to Lewis for $ 7,975,000 .

The Company recorded a deferred gain of $ 465,000 on the transaction which is included in other long-term liabilities as of January 31, 2023 and October 31, 2022.

The joint venture partners will share in the capital contributions to fund project costs until loan proceeds and/or revenues are sufficient to fund the project.

The Company made contributions of $ 275,000 to LLCB II during the three months ended January 31, 2023.

Through January 31, 2023, LLCB has closed sales of initial residential lots representing 586 residential units.

Other Real Estate Development Projects

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which is expected to close in calendar year 2022.

After transaction and other costs, the Company expects to receive cash proceeds of approximately $ 2,670,000 .

During the third quarter of fiscal year 2022, the Company incurred additional costs to prepare the asset for sale, of which $ 127,000 were capitalized and $ 153,000 were recorded in loss on disposal of assets.

The carrying value of the property at July 31, 2022 and October 31, 2021, was $ 2,670,000 and $ 2,543,000 , respectively, and classified as held for sale and included in prepaid expenses and other current assets.

In December 2017, the Company sold its Centennial property with a net book value of $ 2,983,000 for $ 3,250,000 .

The Company received cash and a $ 3,000,000 promissory note secured by the property for the balance of the purchase.

The promissory note was originally scheduled to mature in December 2019, but was periodically extended with principal payments totaling $ 400,000 received through October 31, 2021.

In November 2021, the promissory note was further extended to June 30, 2022 upon making a principal paydown of $ 250,000 , which was paid in November 2021, and revising the interest rate to 4.00 % per annum.

In April 2022, the $ 2,350,000 net carrying value of the promissory note was paid in full and the deferred gain of $ 161,000 was recognized in the second quarter of fiscal year 2022.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

In fiscal year 2020, the Company entered into an agreement to sell its Sevilla property for $ 2,700,000 , which closed in November 2022.

After transaction and other costs, the Company received cash proceeds of approximately $ 2,577,000 and recorded an immaterial loss on disposal of assets during the three months ended January 31, 2023.

Equity in Investments

Equity in investments consist of the following (in thousands):

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Limoneira Lewis Community Builders, LLC $ 61,250 $ 61,154

LLCB II, LLC 8,297 8,023

Limco Del Mar, Ltd.

2 unchanged sentences

$ 73,383 $ 72,855

Net amounts due from Rosales were $ 540,000 and $ 1,570,000 at July 31, 2022 and October 31, 2021, respectively, and are included in receivables/other from related parties and payables to related parties.

Net amounts due from Rosales were $ 430,000 and $ 270,000 at January 31, 2023 and October 31, 2022, respectively, and are included in receivables/other from related parties and payables to related parties.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Equity in Investments (continued)

Unconsolidated Significant Subsidiary

2 unchanged sentences

Summarized income statement information of an equity method investee is required in an interim report if either of the two tests exceed 20% in the interim periods presented.

During the year-to-date interim period for the nine months ended July 31, 2021, this threshold was met for the Company's equity investment in LLCB.

The following is unaudited summarized financial information for LLCB (in thousands):

Nine Months Ended

Revenues $ 1,686 $ 36,684

Cost of land sold — 28,062

Operating expenses 569 634

Net income $ 1,117 $ 7,988

Net income attributable to Limoneira Company $ 658 $ 3,944

During the year-to-date interim periods for the three months ended January 31, 2023 and 2022, this threshold was not met for any of the Company's equity investments.

Goodwill and Intangible Assets, Net

3 unchanged sentences

Foreign currency translation adjustment 23

Balance at July 31, 2022 $ 1,512

Balance at January 31, 2023 $ 1,529

Goodwill is tested for impairment on an annual basis or when an event or changes in circumstances indicate that its carrying value may not be recoverable.

There have been no impairment charges recorded against goodwill as of July 31, 2022.

During the nine months ended July 31, 2021, the Company acquired additional water rights in Chile for $ 186,000 .

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Goodwill and Intangible Assets, Net (continued)

There have been no impairment charges recorded against goodwill as of January 31, 2023.

Intangible assets consisted of the following (in thousands):

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted Average Useful Life in Years

4 unchanged sentences

$ 10,238 $ ( 2,814 ) $ 7,424 $ 9,934 $ ( 2,617 ) $ 7,317

Amortization expense totaled $ 182,000 and $ 210,000 for the three months ended July 31, 2022 and 2021, respectively.

Amortization expense totaled $ 543,000 and $ 736,000 for the nine months ended July 31, 2022 and 2021, respectively.

Estimated future amortization expense of intangible assets as of July 31, 2022 is as follows (in thousands):

2022 (excluding the nine months ended July 31, 2022) $ 180

Amortization expense totaled $ 197,000 and $ 181,000 for the three months ended January 31, 2023 and 2022, respectively.

Estimated future amortization expense of intangible assets as of January 31, 2023 is as follows (in thousands):

2023 (excluding the three months ended January 31, 2023) $ 532

Thereafter 676

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Investments in Mutual Water Companies

The Company’s investments in various not-for-profit mutual water companies provide it with the right to receive a proportionate share of water from each of the not-for-profit mutual water companies that have been invested in and do not constitute voting shares and/or rights.

As of July 31, 2022 and October 31, 2021, $ 6,488,000 and $ 5,994,000 , respectively, were included in other assets.

In January 2023, the Company sold an investment in a mutual water company with a net book value of $ 1,320,000 as part of the Northern Properties sale described in Note 3.

As of January 31, 2023 and October 31, 2022, $ 5,191,000 and $ 6,500,000 , respectively, were included in other assets.

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Compensation $ 3,609 $ 3,572

4 unchanged sentences

$ 11,333 $ 11,060

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt

Long-term debt is comprised of the following (in thousands):

July 31, 2022 October 31, 2021

Farm Credit West revolving and non-revolving lines of credit:

the interest rate of the revolving line of credit is variable based on the one-month London Interbank Offered Rate (“LIBOR”), which was 1.65 % at July 31, 2022, plus 1.85 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit was fixed at 4.77 % through July 1, 2022, is 3.57 % through July 1, 2025 and variable thereafter.

January 31, 2023 October 31, 2022

AgWest Farm Credit revolving and non-revolving lines of credit:

the interest rate of the revolving line of credit is variable based on the one-month Secured Overnight Financing Rate ("SOFR"), which was 4.33 % at January 31, 2023, plus 1.85 %.

The interest rate for the $ 40.0 million outstanding balance of the non-revolving line of credit is fixed at 3.57 % through July 1, 2025 and variable thereafter.

Interest is payable monthly and the principal is due in full on July 1, 2026.

$ 40,000 $ 88,521

Farm Credit West term loan:

The interest rate is fixed at 2.48 %.

The loan is payable in quarterly installments through November 2022.

Farm Credit West term loan:

The interest rate is fixed at 3.24 %.

The loan is payable in monthly installments through October 2035.

Farm Credit West term loan:

The interest rate is fixed at 3.24 %.

The loan is payable in monthly installments through March 2036.

Farm Credit West term loan:

The interest rate is fixed at 2.77 % until July 1, 2025, becoming variable for the remainder of the loan.

The loan is payable in monthly installments through March 2036.

Farm Credit West term loan:

Effective August 2, 2021, the interest rate was fixed at 3.19 %.

The loan is payable in monthly installments through September 2026.

AgWest Farm Credit term loan:

The interest rate was fixed at 3.24 %.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 3.24 %.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 2.77 % until July 1, 2025, becoming variable for the remainder of the loan.

The loan was repaid in January 2023.

AgWest Farm Credit term loan:

The interest rate was fixed at 3.19 %.

The loan was repaid in January 2023.

Banco de Chile term loan:

1 unchanged sentence

The loan is payable in annual installments through January 2025.

Note Payable:

the interest rate ranges from 5.00 % to 7.00 % and was 7.00 % at July 31, 2022.

The loan includes interest only monthly payments and principal is due in February 2023.

Banco de Chile COVID-19 loans:

9 unchanged sentences

Long-term debt, less current portion $ 40,919 $ 104,076

The Company entered into a Master Loan Agreement (the “MLA”) with Farm Credit West, PCA (the "Lender") dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to a fixed interest rate for a period of time as described in the table above ("Fixed Interest Rate Agreement").

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt (continued)

The Company entered into a Master Loan Agreement (the “MLA”) with AgWest Farm Credit, formerly known as Farm Credit West, (the "Lender") dated June 1, 2021, together with a revolving credit facility supplement (the “Revolving Credit Supplement”), a non-revolving credit facility supplement (the “Non-Revolving Credit Supplement,” and together with the Revolving Credit Supplement, the “Supplements”) and an agreement to convert to a fixed interest rate for a period of time as described in the table above ("Fixed Interest Rate Agreement").

The MLA governs the terms of the Supplements.

3 unchanged sentences

The Supplements and RELOC provide aggregate borrowing capacity of $ 130,000,000 comprised of $ 75,000,000 under the Revolving Credit Supplement, $ 40,000,000 under the Non-Revolving Credit Supplement and $ 15,000,000 under the RELOC.

As of July 31, 2022, the Company's outstanding borrowings under the Supplements and RELOC were $ 112,994,000 and it had $ 17,006,000 available to borrow.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt (continued)

The interest rate in effect under the Revolving Credit Supplement automatically adjusted commencing on July 1, 2021 and on the first day of each month thereafter.

The interest rate for any amount outstanding under the Revolving Credit Supplement is based on the one-month LIBOR rate plus or minus an applicable margin.

As of January 31, 2023, the Company's outstanding borrowings under the Supplements and RELOC were $ 40,000,000 and it had $ 90,000,000 available to borrow.

In January 2023, the Company used the proceeds from the Northern Properties sale as described in Note 3 to reduce the Company's long-term debt.

The interest rate in effect under the Revolving Credit Supplement automatically adjusts on the first day of each month.

The interest rate for any amount outstanding under the Revolving Credit Supplement was based on the one-month LIBOR plus or minus an applicable margin.

As of January 1, 2023, the rate transitioned from LIBOR to the Secured Overnight Financing Rate ("SOFR").

The applicable margin ranges from 1.75 % to 2.35 % depending on the ratio of current assets, plus the remaining available commitment divided by current liabilities.

On each one year anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding LIBOR-based calculation to a variable interest rate.

On each one-year anniversary of July 1, the Company has the option to convert the interest rate in use under the Revolving Credit Supplement from the preceding SOFR-based calculation to a variable interest rate.

The Company may prepay any amounts outstanding under the Revolving Credit Supplement without penalty.

The initial interest rate in effect under the Non-Revolving Credit Supplement was a fixed interest rate of 4.77 % through July 1, 2022 and then converted to a fixed interest rate of 3.57 % per year until July 1, 2025 (the “Fixed Rate Term”).

The interest rate in effect under the Non-Revolving Credit Supplement is a fixed interest rate of 3.57 % per year until July 1, 2025 (the “Fixed Rate Term”).

Thereafter, the interest rate will convert to a variable interest rate established by the Lender corresponding to the applicable interest rate group.

1 unchanged sentence

Thereafter, the Company may prepay any amounts outstanding under the Non-Revolving Credit Supplement, provided that a fee equal to 0.50 % of the amount prepaid and any other cost or loss suffered by the Lender must be paid with any prepayment.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 4.00 % as of July 31, 2022.

The interest rate in effect under the RELOC is a variable interest rate established by the Lender corresponding to the applicable interest rate group, which was 6.75 % as of January 31, 2023.

The interest rate may be adjusted automatically under the provisions of the Lender's variable interest rate plan.

The Company may prepay any amounts outstanding under the RELOC without penalty.

All indebtedness under the MLA and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Tulare and Ventura counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

All indebtedness under the MLA and RELOC, including any indebtedness under the Supplements, is secured by a first lien on Company-owned stock or participation certificates, Company funds maintained with the Lender, the Lender’s unallocated surplus, and certain of the Company’s agricultural properties in Ventura counties in California and certain of the Company’s building fixtures and improvements and investments in mutual water companies associated with the pledged agricultural properties.

The MLA includes customary default provisions that provide should an event of default occur, the Lender, at its option, may declare all or any portion of the indebtedness under the MLA to be immediately due and payable without demand, notice of nonpayment, protest or prior recourse to collateral, and terminate or suspend the Company’s right to draw or request funds on any loan or line of credit.

1 unchanged sentence

The Company is also subject to a financial covenant that requires it to maintain compliance with a specific debt service coverage ratio greater than or equal to 1.25 :1 when measured at October 31, 2023 and annually thereafter.

In December 2021, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received the aggregate of $ 1,582,000 in March and April 2022.

The Company was in compliance as of October 31, 2022.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Long-Term Debt (continued)

In February 2023, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received $ 1,413,000 in the second quarter of fiscal year 2023.

In December 2021, the Lender declared an annual cash patronage dividend of 1.25 % of average eligible loan balances and the Company received $ 1,582,000 in February 2022.

Interest is capitalized on non-bearing orchards, real estate development projects and significant construction in progress.

The Company capitalized interest of $ 235,000 and $ 353,000 during the three months ended July 31, 2022 and 2021, respectively, and $ 235,000 and $ 661,000 during the nine months ended July 31, 2022 and 2021, respectively.

The Company capitalized interest of $ 347,000 and zero during the three months ended January 31, 2023 and 2022, respectively.

Capitalized interest is included in property, plant and equipment and real estate development assets in the Company’s consolidated balance sheets.

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in thousands):

January 31, 2023 October 31, 2022

Minimum pension liability $ — $ 2,272

Loan guarantee 1,080 1,080

Leases 4,703 5,062

Other 1,318 1,393

$ 7,101 $ 9,807

Lessor Arrangements

2 unchanged sentences

All of the residential rentals have month-to-month lease terms.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

Lessor Arrangements (continued)

The Company’s rental operations revenue consists of the following (in thousands):

Three Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Operating lease revenue $ 1,291 $ 1,118

4 unchanged sentences

These lease contracts are classified as either operating or finance leases.

The Company’s lease contracts are generally for agricultural land and packinghouse and farming equipment with remaining lease terms ranging from one to 16 years, with various term extensions available.

The Company’s lease contracts are generally for agricultural land and packinghouse facilities and equipment with remaining lease terms ranging from one to 15 years, with various term extensions available.

The Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.

Leases with an initial term of 12 months or less are not recorded on the balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Operating lease costs were $ 137,000 and $ 128,000 for the three months ended July 31, 2022 and 2021, respectively, and $ 395,000 and $ 406,000 for the nine months ended July 31, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Finance lease costs were $ 37,000 and zero for the three months ended July 31, 2022 and 2021, respectively, and $ 112,000 and zero for the nine months ended July 31, 2022 and 2021, respectively, which are primarily included in agribusiness costs and expenses in the Company’s consolidated statements of operations.

Variable and short term lease costs were immaterial.

All lease costs are primarily included in agribusiness costs and expenses in the Company's consolidated statements of operations

Operating lease costs were $ 491,000 and $ 123,000 for the three months ended January 31, 2023 and 2022, respectively.

Finance lease costs were immaterial for the three months ended January 31, 2023 and 2022.

Variable and short term lease costs were $ 145,000 and $ 162,000 , respectively for the three months ended January 31, 2023,and were immaterial for the three months ended January 31, 2022.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

Supplemental balance sheet information related to leases consists of the following (in thousands):

Classification July 31, 2022 October 31, 2021

Classification January 31, 2023 October 31, 2022

Operating lease ROU assets Other assets $ 5,926 $ 6,190

Finance lease assets Other assets 1,058 1,091

Total lease assets $ 3,113 $ 3,183

$ 6,984 $ 7,281

Liabilities and Stockholders' Equity

3 unchanged sentences

Non-current finance lease liabilities Other long-term liabilities 656 715

Total lease liabilities $ 3,073 $ 3,269

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Leases (continued)

Lessee Arrangements (continued)

$ 6,910 $ 7,222

Supplemental cash flow information related to leases consists of the following (in thousands):

Nine Months Ended

Three Months Ended

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

ROU assets obtained in exchange for new operating lease liabilities $ 99 $ 288

Basic and Diluted Net Income per Share

Basic net income per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock.

Diluted net income per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of unvested, restricted stock and conversion of preferred stock.

The computations for basic and diluted net loss per common share are as follows (in thousands, except per share amounts):

Leased assets obtained in exchange for new finance lease liabilities $ — $ 1,020

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per common share is calculated using the weighted-average number of common shares outstanding during the period without consideration of the dilutive effect of conversion of preferred stock.

Diluted net income (loss) per common share is calculated using the weighted-average number of common shares outstanding during the period plus the dilutive effect of unvested, restricted stock and conversion of preferred stock.

The computations for basic and diluted net income (loss) per common share are as follows (in thousands, except per share amounts):

Three Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Basic net income per common share:

Net income applicable to common stock $ 7,252 $ 3,580 $ 2,044 $ 1,054

Earnings allocated to unvested, restricted stock ( 79 ) ( 15 ) ( 42 ) ( 50 )

Net income for basic EPS 7,173 3,565 2,002 1,004

Basic net income (loss) per common share:

Net income (loss) applicable to common stock $ 15,506 $ ( 6,643 )

Effect of unvested, restricted stock ( 161 ) ( 13 )

Net income (loss) for basic EPS 15,345 ( 6,656 )

Weighted average common shares-basic 17,573 17,448

Basic net income per common share $ 0.41 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share:

Net income for basic EPS $ 7,173 $ 3,565 $ 2,002 $ 1,004

Effect of dilutive unvested, restricted stock and preferred stock 125 140 — —

Net income for diluted EPS $ 7,298 $ 3,705 2,002 1,004

Basic net income (loss) per common share $ 0.87 $ ( 0.38 )

Diluted net income (loss) per common share:

Net income (loss) for basic EPS $ 15,345 $ ( 6,656 )

Effect of dilutive preferred stock 125 —

Net income (loss) for diluted EPS 15,470 ( 6,656 )

Weighted average common shares–basic 17,573 17,448

Effect of dilutive unvested, restricted stock and preferred stock 805 782 — —

Effect of dilutive preferred stock 805 —

Weighted average common shares–diluted 18,378 17,448

Diluted net income per common share $ 0.40 $ 0.20 $ 0.11 $ 0.06

Diluted net income per common share is computed using the more dilutive method of either the two-class method or the treasury stock method.

Diluted net income (loss) per common share $ 0.84 $ ( 0.38 )

Diluted net income (loss) per common share is computed using the more dilutive method of either the two-class method or the treasury stock method.

Unvested stock-based compensation awards that contain non-forfeitable rights to dividends as participating shares are included in computing earnings per share.

The Company’s unvested, restricted stock awards qualify as participating shares.

Diluted net income per common share was calculated under the two-class method for the three and nine months ended July 31, 2022.

The Company excluded 147,000 , unvested, restricted shares, as calculated under the treasury stock method, from its computation of diluted net income per common share for the three months ended July 31, 2021 and 146,000 for the nine months ended July 31, 2021.

Diluted net income per common share was calculated under the two-class method for the three months ended January 31, 2023 and 2022.

LIMONEIRA COMPANY

2 unchanged sentences

The Company has transactions with equity method investments and various related parties summarized in Note 6 - Equity in Investments and in the tables below (in thousands):

July 31, 2022 October 31, 2021

January 31, 2023 October 31, 2022

Balance Sheet Balance Sheet

1 unchanged sentence

2 Mutual water companies $ — $ 11 $ 207 $ — $ — $ 506 $ 133 $ —

3 Cooperative association $ — $ — $ 18 $ — $ — $ — $ 19 $ —

5 Cadiz / Fenner / WAM $ — $ 1,268 $ 722 $ 1,178 $ — $ 1,288 $ 446 $ 1,198

1 unchanged sentence

9 LLCB $ 66 $ — $ 3,444 $ — $ 66 $ — $ 3,444 $ —

11 Third-party growers $ — $ — $ — $ — $ — $ — $ 41 $ —

Three Months Ended July 31, 2022 Three Months Ended July 31, 2021

Consolidated Statement of Operations Consolidated Statement of Operations

Ref Related Party Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Dividends Paid Net Revenue Agribusiness Net Revenue Rental Operations Agribusiness Expense and Other Dividends Paid

1 Employees $ — $ 220 $ — $ — $ — $ 204 $ — $ —

2 Mutual water companies $ — $ — $ 481 $ — $ — $ — $ 274 $ —

3 Cooperative association $ — $ — $ 585 $ — $ — $ — $ 652 $ —

4 Calavo $ — $ — $ — $ — $ 4,036 $ 80 $ 408 $ 126

5 Cadiz / Fenner / WAM $ — $ — $ 895 $ — $ — $ — $ 36 $ —

8 FGF $ 83 $ 86 $ 2 $ — $ 710 $ — $ 1,761 $ —

10 Freska $ — $ — $ — $ — $ 23 $ — $ — $ —

11 Third-party growers $ — $ — $ — $ — $ — $ — $ 16 $ —

Nine Months Ended July 31, 2022 Nine Months Ended July 31, 2021

Three Months Ended January 31, 2023 Three Months Ended January 31, 2022

Consolidated Statement of Operations Consolidated Statement of Operations

Ref Related Party Net Revenue Agribusiness Net Revenue Other Operations Agribusiness Expense and Other Dividends Paid Net Revenue Agribusiness Net Revenue Other Operations Agribusiness Expense and Other Dividends Paid

1 Employees $ — $ 223 $ — $ — $ — $ 211 $ — $ —

3 unchanged sentences

5 Cadiz / Fenner / WAM $ — $ — $ 1,138 $ — $ — $ — $ 717 $ —

6 Colorado River Growers $ — $ — $ — $ — $ 157 $ — $ 2,772 $ —

7 YMIDD $ 135 $ — $ — $ — $ — $ — $ 14 $ —

8 FGF $ 83 $ 74 $ 10 $ — $ 229 $ — $ 59 $ —

10 Freska $ — $ — $ — $ — $ 119 $ — $ 142 $ —

11 Third-party growers $ 104 $ — $ 12 $ — $ — $ — $ 132 $ —

12 Principal owner $ — $ — $ — $ 209 $ — $ — $ — $ —

(1) Employees - The Company rents certain of its residential housing assets to employees on a month-to-month basis and recorded rental income from employees.

There were no material rental payments due from employees at July 31, 2022 or October 31, 2021.

There were no material rental payments due from employees at January 31, 2023 or October 31, 2022.

(2) Mutual water companies - The Company has representation on the boards of directors of the mutual water companies in which the Company has investments, as well as other water districts.

1 unchanged sentence

The Company recorded capital contributions, purchased water and water delivery services and had water payments due to the mutual water companies and districts.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related Party Transactions (continued)

(3) Cooperative association - The Company has representation on the board of directors of a non-profit cooperative association that provides pest control services for the agricultural industry.

1 unchanged sentence

(4) Calavo - Through January 2022, the Company had representation on the board of directors of Calavo.

Calavo owns common stock of the Company and the Company pays dividends on such common stock to Calavo.

Calavo owned common stock of the Company and the Company paid dividends on such common stock to Calavo.

Additionally, the Company leases office space to Calavo.

2 unchanged sentences

In 2013, the Company entered a long-term lease agreement (the “Lease”) with Cadiz Real Estate, LLC (“Cadiz”), a wholly owned subsidiary of Cadiz, Inc., and currently leases 670 acres located in eastern San Bernardino County, California.

The annual base rental is equal to the sum of $ 200 per planted acre and 20 % of gross revenues from the sale of harvested lemons (less operating expenses), not to exceed $ 1,200 per acre per year.

The annual base rent is equal to the sum of $ 200 per planted acre and 20 % of gross revenues from the sale of harvested lemons (less operating expenses), not to exceed $ 1,200 per acre per year.

In 2016, Cadiz assigned this lease to Fenner Valley Farms, LLC (“Fenner”), a subsidiary of Water Asset Management, LLC (“WAM”).

1 unchanged sentence

Upon the adoption of ASC 842, the Company recorded a right-of-use, or ROU, asset and corresponding lease liability.

(6) Colorado River Growers, Inc.

(“CRG”) - The Company had representation on the board of directors of CRG, a non-profit cooperative association of fruit growers engaged in the agricultural harvesting business in Yuma County, Arizona.

CRG was dissolved in August 2021.

The Company paid harvest expense to CRG and provided harvest management and administrative services to CRG.

(7) Yuma Mesa Irrigation and Drainage District (“YMIDD”) - The Company has representation on the board of directors of YMIDD.

The Company purchased water from YMIDD and had immaterial amounts payable to them for such purchases.

Additionally, the Company received fallowing revenue from YMIDD.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Related Party Transactions (continued)

(8) FGF - The Company advances funds to FGF for fruit purchases, which are recorded as an asset until the sales occur and the remaining proceeds become due to FGF.

Additionally, FGF provided farming, packing, by-product processing and administrative services to Trapani Fresh.

The Company had a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services.

The Company has a receivable from FGF for lemon sales and the sale of packing supplies and a payable due to FGF for fruit purchases and services.

The Company records revenue related to the licensing of intangible assets to FGF.

Effective November 1, 2021, the Company leases Finca Santa Clara to FGF and records rental revenue related to the leased land.

The Company leases the Santa Clara ranch to FGF and records rental revenue related to the leased land.

(9) LLCB - Refer to Note 5 - Real Estate Development.

(10) Freska - A former member of the Company's board of directors is a majority shareholder of Freska Produce International, LLC ("Freska").

The Company had avocado sales to Freska and corresponding receivables for such sales.

The former board member resigned effective June 14, 2022 and Freska is no longer a related party.

(11) Third-party growers - A former member of the Company's board of directors markets lemons through the Company.

The Company had payments due to the member for such lemon procurement.

The former board member resigned effective June 14, 2022.

The effective tax rate for the nine months ended July 31, 2022 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of stock-based compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of July 31, 2022.

(12) Principal owner - The Company has one principal owner with ownership shares over 10% and paid dividends to such owner.

The effective tax rate for the three months ended January 31, 2023 was higher than the federal statutory tax rate of 21% mainly due to foreign jurisdictions that are taxed at different rates, state taxes, tax impact of stock-based compensation, and nondeductible tax items.

The Company has no material uncertain tax positions as of January 31, 2023.

The Company recognizes interest expense and penalties related to income tax matters as a component of income tax expense.

There was no accrued interest or penalties associated with uncertain tax positions as of July 31, 2022.

There was no accrued interest or penalties associated with uncertain tax positions as of January 31, 2023.

Retirement Plans

The Limoneira Company Retirement Plan (the “Plan”) is a noncontributory, defined benefit, single employer pension plan, that provides retirement benefits for all eligible employees.

The Limoneira Company Retirement Plan (the “Plan”) is a noncontributory, defined benefit, single employer pension plan, which provides retirement benefits for all eligible employees.

Benefits paid by the Plan are calculated based on years of service, highest five-year average earnings, primary Social Security benefit and retirement age.

Effective June 2004, the Company froze the Plan and no additional benefits accrued to participants subsequent to that date.

The Plan is administered by Wells Fargo Bank and Mercer Human Resource Consulting.

The Plan is administered by Principal Bank and Mercer Human Resource Consulting.

In fiscal year 2021, the Company terminated the Plan effective December 31, 2021.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Retirement Plans (continued)

During the three months ended January 31, 2023, the Company made funding contributions of $ 2,550,000 to fully fund and settle the plan obligations.

Lump sum payments were made to a portion of the active and vested terminated participants and annuities were purchased for all remaining participants from an insurance company.

There are no remaining benefit obligations or plan assets and the remaining accumulated other comprehensive loss was fully recognized.

The Plan was funded consistent with the funding requirements of federal law and regulations.

There were no funding contributions during the nine months ended July 31, 2022 and 2021.

Plan assets are invested in a group trust consisting primarily of pooled funds, mutual funds, cash and cash equivalents.

The components of net periodic pension cost for the Plan for the three and nine months ended July 31, 2022 and 2021 were as follows (in thousands):

There were no funding contributions during the three months ended January 31, 2022.

Plan assets were invested in a group trust consisting primarily of pooled funds, mutual funds, cash and cash equivalents.

The components of net periodic pension cost for the Plan for the three months ended January 31, 2023 and 2022 were as follows (in thousands):

Three Months Ended

July 31, Nine Months Ended

2022 2021 2022 2021

Administrative expenses $ 20 $ 180

3 unchanged sentences

Recognized actuarial loss — 99

Settlement loss recognized 2,700 —

Net periodic benefit cost $ 2,741 $ 293

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Commitments and Contingencies

2 unchanged sentences

Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

The Company is party to a lawsuit, initiated on March 27, 2018, against Southern California Edison in Superior Court of the State of California, County of Los Angeles whereby the Company is claiming unspecified damages, attorneys' fees and other costs, as a result from the Thomas Fire in fiscal year 2018.

While the outcome of this lawsuit is uncertain, the Company believes its claim for damages is valid.

Stock-based Compensation and Treasury Stock

Stock-based Compensation

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Certain restricted stock grants are made to management each December under the Stock Plan based on the achievement of certain annual financial performance and other criteria achieved during the previous fiscal year (“Performance Awards”).

The Performance Awards are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria has been met, and generally vest over a two-year period as service is provided.

There were no Performance Awards granted for fiscal year 2021 because the financial performance and other criteria were not met.

The Performance Awards are based on a percentage of the employee’s base salary divided by the stock price on the grant date once the performance criteria have been met, and generally vest over a two-year period as service is provided.

During December 2022, 79,972 shares of restricted stock with a per share price of $ 13.19 were granted to management under the Stock Plan for fiscal year 2022 performance, resulting in total compensation expense of approximately $ 1,055,000 , with $ 365,000 recognized in the fiscal year ended October 31, 2022 and the balance to be recognized over the next two years as the shares vest.

Executive Awards

Certain restricted stock grants are made to key executives under the Stock Plan (“Executive Awards”).

Executive awards generally vest over a three to five-year period as service is provided.

During December 2021, the Company granted 70,000 shares of restricted stock with a per share price of $ 14.96 to key executives under the Stock Plan, of which 15,000 shares were forfeited on February 1, 2022 pursuant to a key executive's severance agreement.

The related compensation expense after forfeiture of approximately $ 823,000 will be recognized equally over the next three years as the shares vest.

Executive Awards generally vest over a three-year period as service is provided.

During December 2022, the Company granted 55,000 shares of restricted stock with a per share price of $ 13.19 to key executives under the Stock Plan.

The related compensation expense of approximately $ 725,000 will be recognized equally over the next three years as the shares vest.

In fiscal year 2022, the Company entered into Retention Bonus Agreements with key executives (collectively, the “Retention Bonus Agreements”) whereby the executives will be eligible to receive cash and restricted stock grants.

During December 2022, the Company granted 11,317 shares of common stock with a per share price of $ 13.19 to key executives related to the Retention Bonus Agreements.

The related compensation expense of approximately $ 149,000 had $ 122,000 recognized in the fiscal year ended October 31, 2022 and the balance will be recognized over the next year as the shares vest.

Director Awards

The Company issues shares of restricted stock to non-employee directors under the Stock Plan on an annual basis that generally vest over a one-year period (“Director Awards”).

Exchange of Common Stock

During the three months ended January 31, 2023 and 2022, members of management exchanged zero and 55,362 shares of common stock with fair values totaling zero and $ 900,000 , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Stock-based Compensation and Treasury Stock (continued)

Stock-based Compensation (continued)

Director Awards

On an annual basis, the Company generally issues shares of common stock to non-employee directors under the Stock Plan (“Director Awards”).

During March 2022, 46,279 shares of restricted stock were granted as Director Awards, which vest after a one-year period from date of grant.

The related stock-based compensation of approximately $ 627,000 will be recognized equally over the next year as the shares vest.

During January 2021, 27,815 shares of restricted stock were granted as Director Awards that vested upon grant.

The related stock-based compensation of $ 469,000 was recognized during the first quarter of fiscal year 2021.

During the nine months ended July 31, 2022 and 2021, members of management exchanged 68,080 and 46,993 shares of common stock with fair values totaling $ 1,086,000 and $ 701,000 , respectively, at the dates of the exchanges, for the payment of payroll taxes associated with the vesting of shares under the Stock Plan.

Treasury Stock

Share Repurchase Program

In fiscal year 2021, the Company's Board of Directors approved a share repurchase program authorizing the Company to repurchase up to $ 10,000,000 of its outstanding shares of common stock through September 2022.

No shares have been repurchased under this program.

Segment Information

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The reportable operating segments of the Company are strategic business units with different products and services, distribution processes and customer bases.

The fresh lemons segment includes sales, farming and harvesting expenses and third-party grower and supplier costs relative to fresh lemons.

The lemon packing segment includes packing revenues, intersegment packing revenues and shipping and handling revenues relative to lemon packing.

The fresh lemons segment includes sales, farming and harvest costs and third-party grower and supplier costs relative to fresh lemons.

The lemon packing segment includes packing revenues and shipping and handling revenues relative to lemon packing.

The lemon packing segment expenses are comprised of lemon packing costs.

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The avocados segment includes sales, farming and harvest costs.

The other agribusiness segment includes sales, farming and harvest costs of oranges, specialty citrus and other crops.

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 3,736,000 and $ 7,226,000 and specialty citrus and other crops of $ 1,120,000 and $ 3,437,000 for the three and nine months ended July 31, 2022, respectively.

Other agribusiness revenues consisted of oranges of $ 1,981,000 and $ 4,476,000 and specialty citrus and other crops of $ 1,065,000 and $ 4,089,000 for the three and nine months ended July 31, 2021, respectively.

The other agribusiness segment includes sales, farming and harvest costs and brokered fruit costs of oranges, specialty citrus and other crops.

Revenues related to rental operations are included in “Corporate and Other.” Other agribusiness revenues consisted of oranges of $ 1,152,000 and specialty citrus and other crops of $ 1,247,000 for the three months ended January 31, 2023.

Other agribusiness revenues consisted of oranges of $ 873,000 and specialty citrus and other crops of $ 876,000 for the three months ended January 31, 2022.

The Company does not separately allocate depreciation and amortization to its fresh lemons, lemon packing, avocados and other agribusiness segments.

1 unchanged sentence

The Company measures operating performance, including revenues and operating income, of its operating segments and allocates resources based on its evaluation.

The Company does not allocate selling, general and administrative expense, total other income (expense) and income taxes, or specifically identify them to its operating segments.

The Company does not allocate selling, general and administrative expense, gain on disposal of assets, total other income (expense) and income taxes, or specifically identify them to its operating segments.

The Company earns packing revenue for packing lemons grown on its orchards and lemons procured from third-party growers.

Intersegment revenues represent packing revenues related to lemons grown on the Company’s orchards.

LIMONEIRA COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

Segment Information (continued)

Segment information for the three months ended July 31, 2022 (in thousands):

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 33,823 $ 6,337 $ — $ 12,578 $ 4,856 $ 57,594 $ 1,329 $ 58,923

Intersegment revenue — 9,696 ( 9,696 ) — — — — —

Total net revenues 33,823 16,033 ( 9,696 ) 12,578 4,856 57,594 1,329 58,923

Costs and expenses 32,600 11,953 ( 9,696 ) 3,154 1,280 39,291 6,103 45,394

Depreciation and amortization — — — — — 2,172 297 2,469

Operating income (loss) $ 1,223 $ 4,080 $ — $ 9,424 $ 3,576 $ 16,131 $ ( 5,071 ) $ 11,060

Segment information for the three months ended July 31, 2021 (in thousands):

Packing Eliminations

Avocados Other

Agribusiness Total

Agribusiness Corporate

and Other Total

Revenues from external customers $ 36,295 $ 4,540 $ — $ 4,073 $ 3,046 $ 47,954 $ 1,171 $ 49,125

Intersegment revenue — 7,192 ( 7,192 ) — — — — —

Total net revenues 36,295 11,732 ( 7,192 ) 4,073 3,046 47,954 1,171 49,125

Costs and expenses 31,846 9,279 ( 7,192 ) 2,708 1,956 38,597 4,717 43,314

Depreciation and amortization — — — — — 2,094 343 2,437

Operating income (loss) $ 4,449 $ 2,453 $ — $ 1,365 $ 1,090 $ 7,263 $ ( 3,889 ) $ 3,374

Segment information for the nine months ended July 31, 2022 (in thousands):

Segment information for the three months ended January 31, 2023 (in thousands):

Packing Eliminations

6 unchanged sentences

Total net revenues 28,481 13,011 ( 7,363 ) — 2,399 36,528 1,373 37,901

Costs and expenses 91,983 34,171 ( 25,658 ) 5,548 7,718 113,762 19,665 133,427

Costs and expenses (gain) 33,300 11,353 ( 7,363 ) — 1,816 39,106 ( 29,536 ) 9,570

Depreciation and amortization — — — — — 2,135 312 2,447

Operating income (loss) $ ( 4,819 ) $ 1,658 $ — $ — $ 583 $ ( 4,713 ) $ 30,597 $ 25,884

Segment information for the nine months ended July 31, 2021 (in thousands):

Segment information for the three months ended January 31, 2022 (in thousands):

Packing Eliminations

8 unchanged sentences

Depreciation and amortization — — — — — 2,185 295 2,480

Operating income (loss) $ 8,213 $ 9,015 $ — $ 2,639 $ 1,733 $ 15,009 $ ( 14,891 ) $ 118

Operating (loss) income $ ( 2,561 ) $ 2,001 $ — $ 445 $ ( 861 ) $ ( 3,161 ) $ ( 6,397 ) $ ( 9,558 )

Subsequent Events

The Company evaluated events subsequent to July 31, 2022 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.

The Company evaluated events subsequent to January 31, 2023 through the date of this filing, to assess the need for potential recognition or disclosure in this Quarterly Report on Form 10-Q.

Based upon this evaluation, except as described in the notes to the interim consolidated financial statements, it was determined that no other subsequent events occurred that require recognition or disclosure in the unaudited consolidated financial statements.

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-Q

Item 1. Financial Statements