Limoneira CO 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Borrowings under the AgWest Farm Credit Facility are subject to variable interest rates. These variable interest rates subject us to the risk of increased interest costs associated with any upward movements in interest rates. For the AgWest Farm Credit Facility, our borrowing interest rate is an internally calculated rate based on an AgWest Farm Credit internal method that follows the changing market interest rates and the cost to fund variable-rate loans. Rate changes are expected to be generally the same as the Federal Open Market Committee (the “FOMC”) recommended changes; however the changes may be marginally different than the FOMC’s recommendation. As of October 31, 2025, our total debt outstanding under the AgWest Farm Credit Facility was $72.5 million. Based on our level of borrowings as of October 31, 2025, a 100 basis points increase in interest rates would increase our interest rate expense by $0.7 million for fiscal year 2026 and by an annual average of $0.7 million for each of the three subsequent fiscal years. Additionally, a 100 basis points increase in the interest rate would decrease our net income by $0.5 million for fiscal year 2026 and by an annual average of $0.5 million for each of the three subsequent fiscal years. We have strategies in place to manage our exposure to interest rate risk, including the potential early pay down of outstanding debt under the AgWest Farm Credit Facility. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for additional information.