MAUI LAND & PINEAPPLE CO INC 10-K/A

Item 1. BUSINESS Overview Maui Land & Pineapple Company, Inc. is a Delaware corporation and the successor to a business organized in 1909 as a Hawai‘i corporation. The Company reincorporated from Hawai‘i to Delaware pursuant to a plan of conversion completed on July 18, 2022. Total authorized capital stock of the Company includes 48,000,000 shares, consisting of 43,000,000 shares of common stock, par value $0.0001 per share, and 5,000,000 shares of preferred stock, par value $0.0001 per share. Shares of the Company’s common stock are listed on the New York Stock Exchange (“NYSE”) under the ticker symbol “MLP.” Depending upon the context, the terms “Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiaries collectively. The Company consists of a landholding and operating parent company, has a principal subsidiary, Kapalua Land Company, Ltd., and certain other subsidiaries. We own approximately 22,300 acres of land and 268,000 square feet of commercial property on the island of Maui, Hawai‘i which we put into productive use by planning, managing, developing, and selling residential, resort, commercial, agricultural, and industrial real estate through three business segments: Land Development & Sales : Our land development and sales operations consist of land planning and entitlement, development, and sales activities. Leasing : Our leasing operations include commercial, agricultural, and industrial land and property leases, licensing of our registered trademarks and trade names, management of potable and non-potable water systems in West and Upcountry Maui, and stewardship of conservation areas. Resort Amenities : We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs, access, and other privileges at certain amenities in the Kapalua Resort. For additional information and operating results related to the above business segments refer to the section entitled “Business Segments” in this Item 1 and in Note 13 to our financial statements set forth in Item 8 of this Annual Report. Business Segments Land Development and Sales Our Land Development and Sales segment includes all land planning, entitlement, development, and sales activities of our landholdings on Maui. Our principal real estate development is the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui. The following is a summary of our landholdings in approximate number of acres as of December 31, 2023: West Maui Upcountry Maui Total Commercial/Industrial 22 - 22 Residential 933 933 Agricultural 9,481 1,500 10,981 Conservation/watershed 10,350 - 10,350 Total 20,786 1,500 22,286 We did not have any revenues from our Real Estate segment for the year ended December 31, 2023. Real Estate Planning and Entitlements – In certain cases we must obtain appropriate entitlements and approvals for the land we intend to develop. Securing proper land entitlements is a process that may require county, state, and federal approvals, which can take years to complete and entails a variety of risks. The entitlement process requires that we satisfy certain conditions and restrictions in connection with such governmental approvals, including, among other things, infrastructure improvements and impact fees in the form of dedicated land for schools and public parks, provide traffic mitigation measures, restrictions on permitted uses of the land, and provisions of affordable housing. We actively work with the community, regulatory agencies, and legislative bodies at all levels of government to obtain and manage necessary approvals consistent with the needs of the community. Land Development and Sales was previously named Real Estate. The name change of the segment better represents the mission, vision and direction of the Company consistent with the leadership transition that occurred in April 2023. There is no impact to prior reporting due to this segment name change. 1 Table of Contents In 2023, under new leadership, our primary activity in this segment focused on market research and master planning of all owned land. In addition to strategic planning of our entire asset portfolio, we have approximately 1,050 acres of land on Maui that are in various stages of active planning and development process. The following is a summary of our active development projects as of December 31, 2023: Location Approximate Number of Acres Zoned for Planned Use Projected Start/End Dates West Maui - Kapalua Central Resort 50 Yes 2024 - 2031 West Maui – Kapalua Mauka 930 Yes 2024 - 2034 West Maui – Kapalua Makai 40 Yes 2024 - 2034 Hali‘imaile Ranch Lots 30 Yes 2024 - 2031 We are engaged in planning, permitting and entitlement activities for our development projects, and we intend to proceed with construction and sales of the following projects, among others, when internal and external factors permit: West Maui - Kapalua Resort: We began development of the Kapalua Resort in the early 1970s. Today, the Kapalua Resort is an internationally recognized world-class destination resort, beach, golf and residential community. We presently have entitlements to develop a variety of projects in the Kapalua Resort. Three projects that are currently in various stages of planning include Kapalua Central Resort, Kapalua Mauka, and Kapalua Makai. Kapalua Central Resort is a commercial town center and residential community located in the heart of the Kapalua Resort. It is comprised of 46 acres and State and County land use entitlements have been secured for this project. The project is currently planned to include up to 196 residential units and 61,000 square feet of commercial space. In December 2021, we entered into an agreement to sell the Kapalua Central Resort property for $40.0 million. On April 11, 2023, we allowed terms of the agreement to expire and regained control of the project from the developer. We are currently processing an extension of a Special Management Area (“SMA”) permit issued by the County of Maui. We are actively working with our consultants and engaging with the community in preparation for the permit extension review, which is anticipated to occur in 2024. Concurrently, we are negotiating a joint venture to advance development of the property. Kapalua Mauka was master planned and entitled in 2008 as a luxury single-family residential golf course neighborhood within Kapalua Resort. The property is located directly upslope of the existing resort development. The first phase of Kapalua Mauka, consisting of 51 residential lots, was subdivided, sold to a developer, and has since been completed. The remaining project area encompasses approximately 930 acres of land and has State and County land use entitlements to deliver up to 639 single-family homes, 19 condominium units, resort amenities, and an additional golf course or recreational space. As of this filing, planning and pre-development efforts are underway on the project. Kapalua Makai is a 37-acre future project of the Kapalua Resort which is located adjacent to Honokahua Bay, also known as DT Fleming Beach Park. The land has State and County land use entitlements to deliver up to up to 573 residences, 349 hotel units, and new commercial and/or resort amenities. As of this filing, master planning and pre-development efforts are underway on the project. Upcountry Maui - Hali'imaile Town: Hali‘imaile is an existing town located in Upcountry Maui, adjacent to historic Makawao Town. We own approximately 1,463 acres in Hali‘imaile zoned for agriculture, light industrial, and business which is in the federal Tax Cuts and Jobs Act (“TCJA”) Opportunity Zone. Our landholdings include 290 acres classified for growth potential as “Small Town” in the long-range County of Maui Island Plan. As of this filing, we are underway with master planning for all land in Hali‘imaile. In December 2023, we contributed approximately 30-acres of land in Haliimaile Town, valued at $1.6 million, to BRE2 LLC, a joint venture with Stone Properties, a Maui based developer, for the development and sales of ranch lots. There were no proceeds from the transaction as the land was an equity contribution to the joint venture and was initially recognized as land development and sales operating revenues. However, after review, it was determined that the $1.6 million should have been presented as a gain on the derecognition of the land asset rather than operating revenues. This restatement in the treatment of the $1.6 million gain has been made in this Amended Report. We anticipate sales of the ranch lots to total approximately $4.1 million, with approximately 50% constituting our share of the sales proceeds, which we expect to occur between the fourth quarter of 2024 to mid-2025. 2 Table of Contents As we develop these and other strategic projects, we expect to finance pre-development costs with operating revenues, proceeds from non-strategic land sales, debt financing, capital from joint venture partners or a combination of these methods. The price and market for resort and other real estate in Maui is generally cyclical and influenced significantly by interest rates, other real estate markets in the mainland United States, specifically the west coast, where Hawai‘i is a popular location for vacations and the second-home market, the general condition of the economy in the United States and Asia, and the relationship of the dollar to foreign currencies. Our Land Development and Sales segment faces competition from other landowners and developers in Maui, as well as in other parts of Hawai‘i and the mainland United States. Our land holdings in West Maui are highly desired due to their proximity to beaches and amenities, along with a natural grade which provides a majority of the land with unobstructed ocean views. Leasing Our Leasing segment operations include commercial, industrial, and agricultural leases of land and property, licensing of our registered trademarks and trade names, sales of potable and non-potable water in West and Upcountry Maui, and grants related to stewardship and conservation efforts. Revenues from our Leasing segment totaled $8.5 million, or approximately 91% of our total operating revenues for the year ended December 31, 2023. Commercial and Industrial Leases – We are the owner and lessor of approximately 267,747 square feet of commercial, retail and light industrial properties, including restaurants, retail outlets, office buildings, warehouses and Kapalua Resort activities. The following summarizes information related to our commercial and industrial leases as of December 31, 2023: Total Average Lease Square Occupancy Expiration Footage Percentage Dates Kapalua Resort 74,700 85 % 2024 - 2032 Other West Maui 55,450 68 % 2024 - 2034 Upcountry Maui 137,597 71 % 2024 - 2032 3 Table of Contents Agricultural Leases – We are the lessor of approximately 11,000 acres of diversified agriculture, renewable energy, eco tours, and activities land leases in West and Upcountry Maui. Trademark and Trade Name Licensing – Our primary trademarks and trade names include Kapalua, the Kapalua butterfly logo and the Maui Gold name and associated pineapple logo. We currently have licensing agreements for the use of these trademarks and trade names with several different companies, mainly in conjunction with our agricultural, commercial and industrial leases. Potable and Non-Potable Water Systems – We own and operate several potable water wells, non-potable irrigation water ditches, reservoirs and transmission systems serving the Kapalua Resort, the County of Maui, and agricultural users in West and Upcountry Maui. Stewardship and Conservation – We own and manage the conservation of a 9,000-acre nature and watershed preserve in West Maui known as the Pu‘u Kukui Watershed Preserve. A portion of our stewardship and conservation efforts is subsidized by the State of Hawai‘i. Our Leasing segment operations are highly sensitive to economic conditions, including tourism and consumer spending levels, and faces substantial competition from other property owners in both Maui and Hawai‘i as a whole. The amount of rainfall and the level of development in the Kapalua Resort area also affect the demand for our potable and non-potable water. The 2023 Maui wildfires negatively impacted leasing revenues in West Maui and led us to provide rent relief to certain tenants. Resort Amenities Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain amenities at the Kapalua Resort, including a 30,000 square foot full-service spa and fitness center as well as a private pool-side dining beach club. Revenues from our Resort Amenities segment totaled $0.8 million, or approximately 9% of our total operating revenues for the year ended December 31, 2023. The Kapalua Club is principally dependent on the overall appeal and success of the Kapalua Resort. The resort faces competition from other resort destination communities on Maui and other parts of Hawai‘i. Employees We had ten employees at December 31, 2023, of which seven were full-time employees none of whom are members of a collective bargaining group. We have adopted a Code of Business Conduct and Ethics, which applies to all of our directors, officers and employees. We also utilize an ethics reporting email and voice system which is monitored by the Audit Committee of the Board of Directors. Our Code of Business Conduct and Ethics is available on our website at www.mauiland.com under the Investor section of the website. We will promptly disclose on our website the nature of any amendment to, or waiver or implicit waiver from, our Code of Business Conduct and Ethics that applies to any principal executive officer, principal financial officer, principal accounting officer or persons performing similar functions. Available Information Our internet address is www.mauiland.com . Reference in this Annual Report to this website address does not constitute incorporation by reference of the information contained on the websites. We make available free of charge on or through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and other reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also make available through our website all filings of our executive officers and directors on Forms 3, 4 and 5 pursuant to Section 16 of the Exchange Act. These filings are also available on the Security and Exchange Commission’s website at www.sec.gov.