MAUI LAND & PINEAPPLE CO INC 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Maui Land & Pineapple Company, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Maui Land & Pineapple Company, Inc. and its Subsidiaries (collectively, the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years in the two‑year period ended December 31, 2025 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the results of their operations and their cash flows for each of the years in the two‑year period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion The consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the U.S. Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Commitments and Contingencies Description of the Matter The Company is party to claims that arise in the normal course of business. Contingent liabilities are recorded in the consolidated financial statements when management determines it is probable that a liability has been incurred and the amount can be reasonably estimated. This determination requires significant judgment by management. In assessing whether the Company should accrue a liability in its consolidated financial statements as a result of the claims, the Company considers various factors, including the legal and factual circumstances of the claims and advisement from legal counsel. As discussed in Note 9 to the consolidated financial statements, management determined an accrual was necessary. Management is unable to estimate the remaining amount or range of amounts, of any additional probable liability, if any, related to the claims. 23 Table of Contents We identified these potential contingent liabilities and disclosures as a critical audit matter because evaluating the likelihood of potential outcomes involves significant judgment by management. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the Company’s assertion that an additional loss is not probable and reasonably estimable as of December 31, 2025. How We Addressed the Matter in Our Audit Our audit procedures over commitments and contingencies included the following: ● We obtained an understanding and evaluated the design and implementation of internal controls that address the risks of material misstatement relating to management’s review of the claims and approval of the accounting treatment based on the most recent facts and circumstances. ● We obtained and evaluated legal confirmations from the Company’s external legal counsel involved in the claims confirming the facts and circumstances of the claims and evaluated insurance agreements to understand the basis for management’s conclusion that any additional losses from the claims are not probable and reasonably estimable as of December 31, 2025. ● We evaluated the accuracy and completeness of management’s estimates reviewing a haphazard sample of legal invoices during the year ended December 31, 2025. ● We evaluated the accuracy and completeness of management’s disclosures in the consolidated financial statements by comparing the disclosures to management’s internal analysis of the claims and known facts of the claims based on the information provided by the Company’s external legal counsel. Accrued Retirement Benefits Description of the Matter The estimated benefit obligations and related amounts reported in the Company’s consolidated financial statements as of and for the year ended December 31, 2025. Management engages actuarial specialists to perform the valuation and provides the specialists with the assumptions used to measure the amounts reported in the consolidated financial statements and disclosures in the notes to the consolidated financial statements. In 2025, the Company annuitized the scheduled pension payments of the remaining participants in its pension plans to formally terminate the plans. This transaction resulted in settlement adjustments with a material effect on the Company’s consolidated financial statements. We identified the valuation of the accumulated retirement benefit obligation as a critical audit matter because of the highly judgmental nature of actuarial assumptions made by management and the unique settlement in 2025. This required a high degree of auditor judgment and an increased extent of effort when performing audit procedures over the termination settlement. How We Addressed the Matter in Our Audit Our audit procedures over accrued retirement benefits included the following: ● We obtained an understanding and evaluated the design and implementation of internal controls that address the risks of material misstatement relating to management’s review of the determination of the actuarial assumptions used in calculating accrued retirement benefits and related amounts. ● We evaluated the reasonableness of the methods and significant assumptions used by management and assessed the work and competency of the third-party actuarial specialists engaged by management. ● We evaluated management specialists’ reports and underlying data used related to the pension termination and settlement transaction for completeness, accuracy and reasonableness. /s/ ACCUITY LLP We have served as the Company’s auditor since 2014. Honolulu, Hawaii March 31, 2026 24 Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED BALANCE SHEETS December 31, 2025 December 31, 2024 (audited) (audited) (in thousands except share data) ASSETS CURRENT ASSETS Cash and cash equivalents $ 5,295 $ 6,835 Accounts receivable, net 1,371 5,016 Investments, current portion - 2,687 Prepaid expenses and other assets 608 507 Assets held for sale 1,827 82 Total current assets 9,101 15,127 PROPERTY & EQUIPMENT, NET 18,243 17,401 OTHER ASSETS Investment in joint venture - 968 Deferred development costs - Development projects 15,720 14,216 Deferred development costs - Agave venture 1,680 194 Right of use assets 518 24 Other noncurrent assets 2,706 2,209 Total other assets 20,624 17,611 TOTAL ASSETS $ 47,968 $ 50,139 LIABILITIES & STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable $ 2,774 $ 2,321 Payroll and employee benefits 1,159 908 Accrued retirement benefits, current portion 1,620 140 Deferred revenue, current portion 833 833 Long-term debt, current portion 85 85 Line of credit - 3,000 Lease liability, current portion 106 12 Other current liabilities 786 730 Contract overbillings - 3,180 Total current liabilities 7,363 11,209 LONG-TERM LIABILITIES Accrued retirement benefits, noncurrent portion - 2,368 Line of credit 4,000 - Deferred revenue, noncurrent portion 1,100 1,233 Deposits 1,927 1,968 Long-term debt, noncurrent portion 102 168 Lease liability, noncurrent portion 413 12 Total long-term liabilities 7,542 5,749 TOTAL LIABILITIES 14,905 16,958 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock--$ 0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding - - Common stock--$ 0.0001 par value; 43,000,000 shares authorized; 19,755,431 and 19,663,780 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively 87,580 85,877 Additional paid-in-capital 17,346 15,202 Accumulated deficit ( 71,587 ) ( 61,008 ) Accumulated other comprehensive loss ( 276 ) ( 6,890 ) Total stockholders' equity 33,063 33,181 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $ 47,968 $ 50,139 See Notes to Consolidated Financial Statements 25 Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS Years Ended December 31, 2025 2024 (in thousands except per share amounts) OPERATING REVENUES Land development and sales $ 5,811 $ 520 Leasing 12,799 9,621 Resort amenities and other 847 1,424 Total operating revenues 19,457 11,565 OPERATING COSTS AND EXPENSES Land development and sales 3,963 1,104 Leasing 8,456 5,006 Resort amenities and other 1,388 1,477 General and administrative 4,744 4,297 Share-based compensation 4,318 6,312 Depreciation 1,135 723 Total operating costs and expenses 24,004 18,919 OPERATING LOSS ( 4,547 ) ( 7,354 ) Gain (loss) on assets disposal, net ( 15 ) 48 Other income 1,111 924 Pension and other post-retirement expenses ( 6,912 ) ( 948 ) Interest expense ( 216 ) ( 61 ) NET LOSS $ ( 10,579 ) $ ( 7,391 ) Other comprehensive income - pension, net 6,614 7 TOTAL COMPREHENSIVE LOSS $ ( 3,965 ) $ ( 7,384 ) NET LOSS PER COMMON SHARE-BASIC AND DILUTED $ ( 0.54 ) $ ( 0.38 ) See Notes to Consolidated Financial Statements 26 Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS ’ EQUITY For the Years Ended December 31, 2025 and 2024 (in thousands) Accumulated Additional Other Common Stock Paid in Accumulated Comprehensive Shares Amount Capital Deficit Loss Total Balance, December 31, 2023 19,615 $ 84,680 $ 10,538 $ ( 53,617 ) $ ( 6,897 ) $ 34,704 Share-based compensation expense - $ - 4,930 $ - $ - 4,930 Issuance of shares for incentive plan 18 412 - - - 412 Restricted stock and options cancellation - 258 372 - - 630 Vested restricted stock issued 35 638 ( 638 ) - - - Shares cancelled to pay tax liability ( 4 ) ( 111 ) - - - ( 111 ) Other comprehensive income - pension - - - - 7 7 Net loss - - - ( 7,391 ) - ( 7,391 ) Balance December 31, 2024 19,664 $ 85,877 $ 15,202 $ ( 61,008 ) $ ( 6,890 ) $ 33,181 Share-based compensation - - 3,251 - - 3,251 Issuance of shares for incentive plan 44 864 - - - 864 Vested restricted stock issued 53 1,107 ( 1,107 ) - - - Shares cancelled to pay tax liability ( 6 ) ( 268 ) - - - ( 268 ) Other comprehensive income - pension - - - - 6,614 6,614 Net loss - - - ( 10,579 ) - ( 10,579 ) Balance, December 31, 2025 19,755 87,580 17,346 ( 71,587 ) ( 276 ) 33,063 See Notes to Consolidated Financial Statements 27 Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2025 2024 (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES Cash receipts from customers and other receipts $ 19,922 $ 9,688 Cash paid to vendors ( 13,168 ) ( 6,596 ) Cash paid for payroll and taxes ( 4,679 ) ( 2,722 ) NET CASH PROVIDED BY OPERATING ACTIVITIES 2,075 370 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of bond securities ( 15 ) ( 3,170 ) Maturities of bond securities 2,702 3,618 Purchases of property and equipment ( 2,559 ) ( 1,871 ) Payments for deferred development ( 4,651 ) ( 1,661 ) Distributions from (Contribution to) unconsolidated joint venture 1,148 981 NET CASH USED IN INVESTING ACTIVITIES ( 3,375 ) ( 2,103 ) CASH FLOWS FROM FINANCING ACTIVITIES Borrowing under line of credit 1,000 3,000 Principal payments on long term debt ( 151 ) ( 21 ) Principal payments on financing agreements ( 821 ) - Common stock issuance costs and other ( 268 ) ( 111 ) NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES ( 240 ) 2,868 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS ( 1,540 ) 1,135 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6,835 5,700 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,295 $ 6,835 RECONCILIATION OF NET LOSS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net loss $ ( 10,579 ) $ ( 7,391 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 1,135 723 Provision for credit losses and impairments 460 227 Share-based compensation 4,115 5,560 Loss on disposal of property, net 15 84 Debt financed equipment - 274 Revenue from investment in JV - ( 341 ) Changes in operating assets and liabilities: Accounts receivable 3,005 ( 4,077 ) Retirement liabilities 5,726 823 Accounts payable 936 873 Deferred revenue ( 133 ) 1,849 Contract overbilling ( 3,180 ) 3,180 Other operating assets and liabilities 575 ( 1,414 ) NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,075 $ 370 SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: • Common stock issued to certain members of the Company’s management totaled $ 0.9 million and $ 0.4 million during the years ended December 31, 2025 and 2024, respectively. • During the year ended December 31, 2025, the Company entered into new operating and financing lease agreements resulting in the recognition of Right-of-Use assets and corresponding lease liabilities of approximately $ 0.5 million. • The Company had $ 0.5 million and $ 0.3 million in capital expenditures included in accounts payable and accrued and other liabilities at December 31, 2025 and 2024, respectively. • The Company's financed certain insurance premiums of $ 1.0 million and $ 0.3 million during the year ended December 31, 2025 and 2024, respectively. See Notes to Consolidated Financial Statements. 28 Table of Contents MAUI LAND & PINEAPPLE COMPANY, INC. & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Years Ended December 31, 2025 and 2024 1. DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS Maui Land & Pineapple Company, Inc. is a Delaware corporation and the successor to a business organized in 1909 as a Hawaii corporation. The Company reincorporated from Hawaii 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 under the ticker symbol “MLP.” The Company consists of a landholding and operating parent company, has a principal subsidiary, Kapalua Land Company, Ltd., and certain other subsidiaries (collectively, the “Company”). The Company owns approximately 22,300 acres of land and 247,000 square feet of commercial property on the island of Maui, Hawaii, which we put into productive use by planning, managing, developing, and selling, residential, resort, commercial, agricultural, and industrial real estate through the following business segments: Land Development and Sales : Our real estate 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 : The resort amenities operations include the operations of the Kapalua Club, a private, non-equity club program, providing its members special programs, access, and other privileges at certain amenities at the Kapalua Resort. BASIS OF ACCOUNTING AND CONSOLIDATION The accompanying consolidated financial statements of the Company are presented in conformity with generally accepted accounting principles in the United States of America (“GAAP”) as codified by the Financial Accounting Standards Board (“FASB”). The consolidated financial statements include the accounts of Maui Land & Pineapple Company, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash on hand, deposits in banks, and money market funds. ACCOUNTS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES Receivables are recorded net of an allowance for credit losses. The Company estimates expected credit losses over the contractual life of the receivables based on delinquencies, credit ratings, aging trends, and historical experience. The Company believes the allowance for credit losses is adequate to cover anticipated losses; however, significant deterioration in any of the aforementioned factors or in general economic conditions could change these expectations, and accordingly, the Company’s consolidated financial condition and/or its future operating results could be materially impacted. Credit is extended after evaluating creditworthiness and no collateral is generally required from customers. 29 Table of Contents INVESTMENT IN BOND SECURITIES Held-to-maturity debt securities are stated at amortized cost. Investments are reviewed for impairment for each reporting period. If any impairment is considered other-than-temporary, an allowance for credit losses would be established and held-to-maturity debt securities would be presented net of the allowance for credit losses. Adjustments to expected credit losses are recorded as a component of other income (expense). ASSETS HELD FOR SALE Assets are classified as held for sale when management approves and commits to a plan to sell the property; the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; the sale of the property is probable and is expected to be completed within one year; the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets held for sale are stated at the lower of net book value or estimated fair value less cost to sell. There were no impairments of assets held for sale during the years ended December 31, 2025 or 2024. DEFERRED DEVELOPMENT COSTS Deferred development costs consist primarily of design, entitlement and permitting fees and real estate development costs related to various planned projects. Deferred development costs are written off if management decides that it is no longer probable that the Company will proceed with the related development project. There were no impairments of deferred development costs during the years ended December 31, 2025 or 2024. DEFERRED DEVELOPMENT COSTS – AGAVE VENTURE Deferred development costs - Agave venture represents costs expended on the Company's new Agave venture and capitalized in accordance with ASC- 360. The amounts capitalized at December 31, 2025 and 2024, were $ 1.7 million and $ 0.2 million, respectively. INVESTMENT IN JOINT VENTURES Investments in joint ventures in which we have less than a controlling financial interest are accounted for under the equity method of accounting. The initial capital contribution of assets to a joint venture is recorded at fair value. PROPERTY & EQUIPMENT AND DEPRECIATION Property is stated at cost. Major replacements, renewals and betterments are capitalized while maintenance and repairs that do not improve or extend the life of an asset are charged to expense as incurred. When property is retired or otherwise disposed of, the cost of the property and the related accumulated depreciation are written off and the resulting gains or losses are included in income. Depreciation is provided over the estimated useful lives of the respective assets using the straight-line method generally over three to 40 years. LONG-LIVED ASSETS Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. When such events or changes occur, an estimate of the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition is made. If the sum of such expected future cash flows (undiscounted and without interest charges) is less than the carrying amount of the asset, an impairment loss is recognized in an amount by which the assets’ net book values exceed their fair value. These asset impairment loss analyses require management to make assumptions and apply considerable judgments regarding, among others, estimates of the timing and amount of future cash flows, expected useful lives of the assets, uncertainty about future events, including changes in economic conditions, changes in operating performance, changes in the use of the assets, and ongoing cost of maintenance and improvements of the assets, and thus, the accounting estimates may change from period to period. If management uses different assumptions or if different conditions occur in future periods, the Company’s consolidated financial condition or its future operating results could be materially impacted. There was no significant impairment of long-lived assets during the years ended December 31, 2025 or 2024. 30 Table of Contents LEASES – THE COMPANY AS LESSEE Company determines whether an arrangement is a lease at inception by considering whether that arrangement conveys the right to use an identified asset for a period of time in exchange for consideration. The Company evaluates whether a lease is a finance or operating lease using the criteria established in ASC Topic 842, Leases . Right-of-use assets (ROU assets) and lease liabilities related to leases are included in lease right-of-use assets and lease liabilities , respectively, in the Company's consolidated balance sheets. Operating lease expense is recognized on a straight-line basis over the lease term. Finance lease ROU assets are amortized on a straight-line basis over the shorter of the useful life of the asset or the lease term or using the useful life of the asset if the financing lease contains a purchase option that is reasonably certain to be exercised. Interest expense on the finance lease liability is recognized using the effective interest rate method and is presented within Interest expense in the Company’s consolidated statements of operations. ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's leases do not provide an implicit rate and are not readily determinable, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. ROU assets also include any lease payments made at or before the commencement date and excludes any lease incentives received. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. In connection with its application of the lease guidance, the Company has evaluated the lease and non-lease components within its leases where it is the lessee and has elected, for all classes of underling assets, the practical expedient to present lease and non-lease components in its lease agreements as one component. The Company has also elected, for all classes of underlying assets, to not recognize lease liabilities and lease assets for leases with a term of 12 months or less. ACCRUED RETIREMENT BENEFITS The Company’s policy is to fund retirement benefit costs at a level at least equal to the minimum funding requirements under federal law, but not more than the maximum amount deductible for federal income tax purposes. The funded status of the Company’s defined benefit pension plan is recorded as an asset or liability in the consolidated balance sheet reflecting the difference between the fair value of plan assets and the projected benefit obligation. Changes in the funded status of the plan are recorded in the year in which the changes occur, through comprehensive income. Deferred compensation plans for certain former management employees provide for specified payments after retirement. A liability has been recognized based on the present value of estimated payments to be made. REVENUE RECOGNITION The Company recognizes revenue to represent the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. Operating results pertaining to the Company’s business segments are summarized in Note 13 to the consolidated financial statements. 31 Table of Contents A customer is distinguished from a noncustomer by the nature of the goods or services that are transferred. Customers are provided with goods or services that are generated by a company’s ordinary output activities, whereas noncustomers are provided with nonfinancial assets that are outside of a company’s ordinary output activities. This distinction may not significantly change the pattern of income recognition but determines whether that income is classified as revenue (contracts with customers) or other gains/losses (contracts with noncustomers) in the Company’s consolidated financial statements. The Company’s revenue streams for the period were generated as ordinary output activities to customers as defined by the guidance and were properly classified as revenues. The Company uses the five -step model to recognize revenue from customer contracts. The five -step model requires the Company to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. For each contract that involves variable consideration, the transaction price of the contract is considered the most likely outcome in estimating possible consideration amounts. The information used to determine the transaction price is similar to the information used in establishing prices of goods or services. The Company is also required to determine if it controls the goods or services prior to the transfer to the customer in order to determine if it should account for the arrangement as a principal or agent. Principal arrangements, where the Company controls the goods or services provided, will result in the recognition of the gross amount of consideration expected in the exchange. Agent arrangements, where the Company simply arranges but does not control the goods or services being transferred to the customer, will result in the recognition of the net amount the Company is entitled to retain in the exchange. Revenues from the Company’s land development and sales segment consist of sales of real estate. Revenues from sales of real estate are recognized in the period in which sufficient cash has been received, collection of the balance is reasonably assured, performance obligations have been performed and risks of ownership have passed to the buyer. Sales of real estate assets that are considered central to the Company’s ongoing major operations are classified as real estate sales revenue, along with any associated cost of sales, in the Company’s consolidated statements of operations and comprehensive income (loss). Sales of real estate assets that are considered peripheral or incidental transactions to the Company’s ongoing major or central operations are reflected as net gains or losses in the Company’s consolidated statements of operations and comprehensive income (loss). The construction contract for the Honokeana Homes Temporary Housing Project follows the cost to cost accounting method. Contracting revenues and expenses are proportionately recognized based on actual costs incurred in relation to reliable and updated estimates of the cost to complete the project. Project billings in excess of recognized revenues are recorded as Billings in Excess of Revenues (a deferred revenue account) project costs in excess of project billings are recorded as Costs in Excess of Billings (a deferred expense account). Leasing revenues are recognized on a straight-line basis over the terms of the leases. Lease income may include certain percentage rents determined in accordance with the terms of the leases. Lease income arising from rents that are contingent upon the sales of the tenant exceeding a defined threshold are recognized only after the defined sales thresholds are achieved. Reimbursements received for real estate taxes, general excise taxes, insurance and common area maintenance expenses are recognized as revenue as provided in the underlying lease terms. The Company elected the following practical expedients upon adoption of Accounting Standards Codification, Leases (Topic 842 ) (ASC Topic 842 ) on January 1, 2019: ● Single component practical expedient – requires the Company to account for lease and non-lease components associated with that lease, if certain criteria are met. ● Short-term leases practical expedient – for operating leases with a term of 12 months or less in which the Company is the lessee, this expedient allows the Company to not record on its balance sheets the related lease liabilities, taxes collected from lessees, lessor costs paid directly by lessee to a third party and right-of-use assets. 32 Table of Contents Included in leasing revenues are grants issued by the State of Hawai‘i to subsidize the conservation and preservation efforts of the Pu‘u Kukui Watershed Preserve (“PKW”). The PKW is approximately 9,000 acres of conservation zoned lands that is a primary source of water that originates on the top of the West Maui Mountains. We currently receive government assistance via two grants, the Natural Area Partnership Program (“NAPP”) Grant with the State of Hawai‘i Department of Land and Natural Resources and the State of Hawai‘i Department of Health grant entitled Treatment Train: An Ahupua‘a’s Approach to Watershed Best Practices in West Maui, Hawai‘i (“DOH Grant”). The NAPP Grant was renewed on July 1, 2023 for a six -year period. For the period from July 1, 2024 to June 30, 2025, the NAPP Grant provided $ 340,000 in government funds in support of the conservation efforts by the Company. The DOH Grant for the period from April 1, 2019 to April 30, 2024 provided $ 1.1 million in total funds, in 2024, the final $ 60,000 of remaining funds were received and the grant was terminated. Actual funds received for both grants were $ 0.3 million for 2025 and $ 0.3 million in 2024. Revenue from resort amenities consist of annual dues received from the Kapalua Club membership program. Member services include access, special programs, and other privileges at certain of the amenities at the Kapalua Resort. Annual membership dues are recognized on a straight-line basis over one year. Performance obligations for services are satisfied by relying on information received from the Company’s employees and vendors who have rendered services in accordance with the terms and conditions of the membership program. The Company estimates expected credit losses on accounts receivable from customers by considering relevant information (past, current, and future) in assessing the collectability of cash flows. The expected credit losses of the Company’s accounts receivable are summarized in Note 14 to the consolidated financial statements. Economic factors affecting the nature, amount, timing, and uncertainty of the Company’s revenue and cash flows are identified as Risks and Uncertainties in this Note 1. OPERATING COSTS AND EXPENSES Land development and sales, leasing, resort amenities, and general and administrative costs and expenses are reflected exclusive of depreciation and pension and other post-retirement expenses. RECLASSIFICATION OF PRIOR YEAR PRESENTATION Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. 33 Table of Contents SHARE-BASED COMPENSATION PLANS The Company accounts for share-based compensation, including grants of restricted shares of common stock and options to purchase common shares, as compensation expense over the respective vesting periods in the consolidated financial statements based on their fair values on the grant dates. The impact of forfeitures that may occur prior to vesting is estimated and considered in the expense recognized. INCOME TAXES The Company accounts for uncertain tax positions using a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s provision for income taxes is calculated using the liability method. Deferred income taxes are provided for all temporary differences between the financial statement and income tax bases of assets and liabilities using tax rates enacted by law or regulation. A valuation allowance is established for deferred income tax assets if management believes that it is more likely than not that some portion or all of the asset will not be realized through future taxable income. The Company recognizes accrued interest related to unrecognized tax benefits as interest expense and penalties in general and administrative expenses in its consolidated statements of operations and comprehensive income (loss) and such amounts are included in income taxes payable on the Company’s consolidated balance sheets. COMPREHENSIVE INCOME (LOSS) Comprehensive income (loss) includes all changes in stockholders’ equity, except those resulting from capital stock transactions. Comprehensive income (loss) also includes adjustments to the Company’s defined benefit pension plan obligations. INCOME (LOSS) PER COMMON SHARE Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding. Diluted net income per common share is computed similar to basic net income (loss) per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if dilutive potential common shares from share-based compensation arrangements had been issued. Potentially dilutive shares from stock option grants to purchase common shares and non-vested restricted stock are determined using the treasury stock method. Basic and diluted weighted-average common shares outstanding at December 31, 2025 and 2024 were 19.7 and 19.6 million, respectively. FAIR VALUE MEASUREMENTS GAAP establishes a framework for measuring fair value and requires certain disclosures about fair value measurements to enable the reader of the consolidated financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. GAAP requires that financial assets and liabilities be classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The Company considers cash and cash equivalents to be unrestricted for purposes of the consolidated balance sheets and consolidated statements of cash flows. The fair value of receivables and payables approximate their carrying value due to the short-term nature of the instruments. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost. USE OF ESTIMATES The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Future actual amounts could differ from these estimates. 34 Table of Contents CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. The Company had deposits in excess of the FDIC limit at December 31, 2025 and 2024. No losses have been recognized in 2025 or 2024. RISKS AND UNCERTAINTIES Factors that could adversely impact the Company’s future operations or financial results include, but are not limited to the following: periods of economic weakness and uncertainty in Hawai‘i and the mainland United States; high unemployment rates and low consumer confidence; uncertainties and changes in U.S. social, political, regulatory and economic conditions or laws and policies and concerns surrounding ongoing developments in the European Union, Middle East, and Asia; the general availability of mortgage financing, including the effect of more stringent lending standards for mortgages and perceived or actual changes in interest rates; risks related to the Company’s investments in real property, the value and salability of which could be impacted by the economic factors discussed above or other factors; the popularity of Maui in particular and Hawai‘i in general as a vacation destination or second -home market; increased energy costs, including fuel costs, which affect tourism on Maui and Hawai‘i generally; untimely completion of land development projects within forecasted time and budget expectations; inability to obtain land use entitlements at a reasonable cost or in a timely manner; unfavorable legislative decisions by state and local governmental agencies; impact of governmental fines and assessments; the cyclical market demand for luxury real estate on Maui and in Hawai‘i generally; increased competition from other luxury real estate developers on Maui and in Hawai‘i generally; failure of future joint venture partners to perform in accordance with their contractual agreements; environmental regulations; acts of God, such as tsunamis, hurricanes, earthquakes and other natural disasters, such as the 2023 Maui wildfires; the spread of contagious diseases, such as COVID- 19; the Company’s location apart from the mainland United States, which results in the Company’s financial performance being more sensitive to the aforementioned economic risks; failure to comply with restrictive financial covenants in the Company’s credit arrangements; and an inability to achieve the Company’s short and long-term goals and cash flow requirements. LEGAL CONTINGENCIES The Company is party to claims and lawsuits as well as threatened or potential actions or claims concerning matters arising from the conduct of its business activities. The outcome of claims or litigation and the timing of ultimate resolution are inherently difficult to predict and significant judgment may be required in the determination of both the probability of loss and whether the amount of the loss is reasonably estimable. The Company’s estimates are subjective and are based on the status of legal and regulatory proceedings, the merit of the Company’s defenses and consultation with external legal counsel. An accrual for a potential litigation loss is established when information related to the loss contingency indicates both that a loss is probable and that the amount of loss can be reasonably estimated. Refer to Note 9 to the consolidated financial statements for further information regarding the Company’s legal proceedings. NEW ACCOUNTING STANDARDS ADOPTED In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ) , which requires public entities to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction on an annual basis. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023 - 09 propectively during the current year. NEW ACCOUNTING STANDARDS ISSUED In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Topic 220 ) , which requires public entities to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses. ASU 2024 - 03 is effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024 - 03. 35 Table of Contents 2. INVESTMENTS IN BOND SECURITIES Bond securities investments were liquidated during the year ended December 31, 2025.Amortized cost and fair value of debt securities at December 31, 2025 and 2024 consisted of the following: December 31, December 31, 2025 2024 (in thousands) Amortized cost $ - $ 2,687 Unrealized gains - 5 Fair value $ - $ 2,692 Maturities of debt securities at December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value One year or less $ - $ - $ 2,687 $ 2,692 Greater than one year through five years - - - - $ - $ - $ 2,687 $ 2,692 The fair value of debt securities were measured using Level 1 inputs which are based on quotes for trades occurring in active markets for identical assets. 3. ASSETS HELD FOR SALE Assets held for sale consist of non-strategic land parcels identified for sale at December 31, 2025. There are fourteen parcels that carry a historical cost basis of approximately $ 1.8 million. These parcels are either actively listed by a broker or privately marketed for sale. 4. PROPERTY & EQUIPMENT Property and equipment at December 31, 2025 and 2024 consist of the following: December 31, December 31, 2025 2024 (in thousands) Land $ 7,706 $ 7,715 Land improvements 13,456 12,213 Buildings 20,502 19,335 Machinery and equipment 6,949 6,658 Construction in progress 528 1,366 Total property and equipment 49,141 47,287 Less accumulated depreciation ( 30,898 ) ( 29,886 ) Property and equipment, net $ 18,243 $ 17,401 Land Most of the Company’s 22,300 acres of land were acquired between 1911 and 1932 and is carried in its balance sheets at cost. More than 20,000 acres of land are located in West Maui and comprise a largely contiguous parcel that extends from the sea to an elevation of approximately 5,700 feet. This area includes approximately 900 acres entitled for mixed-use development within the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui. The Company’s remaining approximate 1,500 acres of land are located in Upcountry Maui in an area commonly known as Hali‘imaile and are mainly comprised of agricultural fields, ranch lands and industrial and retail properties. Land Improvements Land improvements are comprised primarily of roads, utilities, and landscaping infrastructure improvements at the Kapalua Resort. Also included is the Company’s potable and non-potable water systems in West Maui. Majority of the Company’s land improvements were constructed and placed in service in the mid-to-late 1970s or conveyed in 2017. Depreciation expense would be considerably higher if these assets were stated at current replacement cost. 36 Table of Contents Buildings Buildings are comprised of restaurant, retail and light industrial spaces located at the Kapalua Resort and Hali’imaile which are used in the Company’s leasing operations. Most of the Company’s buildings were constructed and placed in service in the mid-to-late 1970s. Depreciation expense would be considerably higher if these assets were stated at current replacement cost. Machinery and Equipment Machinery and equipment are mainly comprised of zipline course equipment installed in 2008 at the Kapalua Resort and used in the Company’s leasing operations and various rolling stock and off road equipment used in our land management and Agave farming operations. Construction in Progress Construction in progress is comprised of ongoing Kapalua Resort and Hal‘iimaile projects, including renovations and improvements to buildings, warehouses and commercial assets. 5. INVESTMENT IN UNCONSOLIDATED JOINT VENTURE In December 2023, the Company entered into a joint venture agreement with a local developer to form a Hawai‘i limited liability company ( "BRE2 LLC"). The Company's initial capital contribution to BRE2 LLC consisted of approximately 31 acres of former pineapple lands in Hali‘imaile valued at $ 1.6 million. The first lot sold for $ 1.8 million in December 2024 and the second lot sold for $ 2.4 million in February of 2025. The Company received a distribution from BRE2 LLC in the amount of $ 1.0 million during the year ended December 31, 2024. Distributions of approximately $ 1.1 million were received during the year ended December 31, 2025. The remaining investment value of approximately $ 40,000 was written off during 2025. BRE2 LLC was dissolved in December 2025. 6. LONG-TERM DEBT On December 22, 2025, the Company executed a Sixth Loan Modification Agreement and Third Amended and Restated Credit Agreement (“Agreements”) increasing the credit limit to $ 25.0 million and extending the maturity date of the credit facility with First Hawaiian Bank (“Credit Facility”) to December 31, 2030. The Agreements provide revolving or term loan borrowing options. Interest on revolving borrowing is calculated based on the Bank’s prime rate minus 1.125 percentage points. Interest on term loan borrowing is fixed at the Bank’s commercial loan rates with interest rate swap options available. The Company has pledged approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility. At December 31, 2025, $ 21.0 million was available from our Credit Facility, as the Company had $ 4.0 million outstanding at December 31, 2025 . The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of $ 2.0 million, a maximum of $ 45.0 million in total liabilities, and a limitation on new indebtedness. The Credit Facility also contains covenants restricting the payment of cash dividends without the lender’s prior approval. The Company was in compliance with the covenants under the Credit Facility as of December 31, 2025. In July 2024 the Company took out a loan to finance equipment purchases. The loan carried a principal amount of $ 338,720 , 0 % interest rate and a monthly payment of $ 7,057 . The loan matures in July 2028. At December 31, 2025, long-term debt principal payments and imputed interest on this loan for the next four years to maturity are as follows: Years ending December 31, in thousands 2026 85 2027 85 2028 49 The Company financed insurance premiums of approximately $ 1.0 million during the year ended December 31, 2025. The remaining unpaid balance of $ 0.2 million is included in other current liabilities on the consolidated balance sheet. 37 Table of Contents 7. ACCRUED RETIREMENT BENEFITS Accrued retirement benefits at December 31, 2025 and 2024 consisted of the following: December 31, December 31, 2025 2024 (in thousands) Defined benefit pension plan $ - $ 912 Non-qualified retirement plans 1,620 1,596 Total 1,620 2,508 Less current portion ( 1,620 ) ( 140 ) Non-current portion of accrued retirement benefits $ - $ 2,368 The Company had two defined benefit pension plans which covered substantially all former bargaining and non-bargaining full-time, part-time and intermittent employees. In 2011, pension benefits under both plans were frozen. In 2018, the Company merged the two defined benefit pension plans (the “Defined Plan”) to streamline the administration of the frozen plan in. The Company also has an unfunded non-qualified retirement plan (the”Non-qualified Plan”) covering nine of its former employees. The Non-qualified plan was frozen in 2009 and future vesting of additional benefits was discontinued. The Board of Directors (the “Board”) approved the termination of the Defined Plan and the Non-qualified Plan in 2023. The benefits paid from of the plan towards the final annuitization and plan termination was $ 12.4 million. The measurement date for the Company’s benefit plan disclosures is December 31 of each year. The changes in benefit obligations and plan assets for the years ended December 31, 2025 and 2024, and the funded status of the plans and assumptions used to determine benefit information at December 31, 2025 and 2024 were as follows: Years Ended December 31, 2025 2024 (in thousands) Change in benefit obligations: Benefit obligations at beginning of year $ 13,949 $ 15,552 Interest cost 335 738 Actuarial gain ( 248 ) ( 27 ) Benefits paid ( 12,416 ) ( 2,314 ) Benefit obligations at end of year 1,620 13,949 Change in plan assets: - Fair value of plan assets at beginning of year 11,441 13,860 Actual return on plan assets ( 210 ) ( 231 ) Employer contributions 1,283 126 Asset transfers ( 98 ) - Benefits paid ( 12,416 ) ( 2,314 ) Fair value of plan assets at end of year - 11,441 Funded status $ ( 1,620 ) $ ( 2,508 ) Accumulated benefit obligations $ ( 1,620 ) $ ( 13,949 ) Weighted average assumptions to determine benefit obligations: Discount rate 4.98 % 5.40 - 5.52 % Expected long-term return on plan assets n/a 5.40 % Rate of compensation increase n/a n/a 38 Table of Contents Components of net periodic benefit cost and other amounts recognized in comprehensive income were as follows: Years Ended December 31, 2025 2024 (in thousands) Pensions and other benefits: Interest cost $ 337 $ 735 Expected return on plan assets ( 216 ) ( 695 ) Amortization of net loss 235 273 Settlement expense 6,556 635 Pension and other postretirement expenses $ 6,912 $ 948 Other changes in plan assets and benefits obligations recognized in comprehensive income: Net loss (gain) 178 $ 900 Amortization of recognized loss ( 6,792 ) ( 907 ) Total recognized gain in comprehensive income $ ( 6,614 ) $ ( 7 ) Weighted average assumptions used to determine net periodic benefit cost: 2025 2024 Discount rate 4.98 % 5.40 - 5.52 % Expected long-term return on plan assets n/a 5.40% Rate of compensation increase n/a n/a Weighted average assumptions used to determine net periodic benefit cost: 2025 2024 Discount rate 4.98 % 5.40 - 5.52 % Expected long-term return on plan assets n/a 5.40% Rate of compensation increase n/a n/a The expected long-term rate of return on plan assets was based on a building-block approach. Historical markets are studied and long-term historical relationships between equities and fixed income are presumed consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors, such as inflation and interest rates, are evaluated before long-term capital markets are determined. Diversification and rebalancing of plan assets are properly considered as part of establishing long-term portfolio returns. As a result of the termination of the Defined Plan and the Non-qualified Plan in 2025, we did not have any plan assets at December 31, 2025. 39 Table of Contents At December 31, 2024, the Defined Plan held shares of various Aon Collective Investment Trust (“ACIT”) funds. At December 31, 2025 the plan assets were $ 0 . The fair value of the Company’s pension plan assets by category at December 31, 2024 were as follows: 2024 Fair Value Measurements ( in thousands) Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable nputs (Level 2) Measured at NAC as a practical expedient Total ACIT equity funds $ - $ 94 $ - $ 94 ACIT fixed income funds - 10,362 - 10,362 Cash management funds - 985 - 985 $ - $ 11,441 $ - $ 11,441 Level 1 assets are priced using quotes for trades occurring in active markets for the identical asset. Level 2 assets are priced using observable inputs for the asset (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates) or inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Net asset values (“NAV”) of ACIT funds included in Level 2 are readily determinable, measured daily and based on the fair value of each fund’s underlying investments. For certain ACIT funds, NAV is used as a practical expedient to estimate fair value and is not categorized in the fair value hierarchy. These funds determine NAV based on the fair value of its underlying investments on a monthly or quarterly basis and have redemption restrictions. Redemptions may be requested at the fund’s quarter-end NAV under the notification requirements of each fund, including a 105 day notice. An administrative committee consisting of certain senior management employees administers the Company’s Defined Plan. The pension plan assets are allocated among approved asset types based on the plan’s current funded status and other characteristics set by the administrative committee, subject to liquidity requirements of the Defined Plan. Estimated future benefit payments are as follows (in thousands): Years ending December 31, 2026 $ 1,620 2027 - 2028 - 2029 - 2030 - Plan cash contributions in the amount of $ 1,060,000 were made to the Defined Plan during the year ended December 31, 2025. No contributions were required in 2024. A settlement expense in the amount of $ 6,556,000 was recognized during the year ended December 31, 2025. A $ 6,556,000 non-cash GAAP expense to recognize the most current estimated costs to terminate the Defined pension plan was incurred during the year ended December 31, 2025. A cash contribution to the Defined plan in the amount of $ 1,060,000 was made during the year ended December 31, 2025. No contributions to the plan were required in 2024. Final expense recovery of $ 587,000 was recognized upon the final termination of the Defined plan which was completed during the third quarter of 2025. 40 Table of Contents 8. CONTRACT ASSETS AND LIABILITIES Receivables from contracts with customers were $ 0.6 million, $ 4.3 million, and $ 0.4 million at December 31, 2025, 2024 and 2023, respectively. In 2024, $ 3.5 million of contract receivable is due to the outstanding progress billing from the temporary homes construction project. The $ 0.6 million receivable at December 31, 2025 is due from Kapalua Club receivable, utility fees receivable and conservation grants receivable from the State of Hawaii. Deferred license fee revenue The Company entered into a trademark license agreement with the owner of the Kapalua Plantation and Bay golf courses, effective April 1, 2020. Under the terms and conditions set forth in the agreement, the licensee is granted a perpetual, terminable on default, transferable, non-exclusive license to use the Company’s trademarks and service marks to promote its golf courses and to sell its licensed products. The Company received a single payment royalty of $ 2.0 million in March 2020. Revenue recognized on a straight-line basis over its estimated economic useful life was $ 0.1 million for each of the years ended December 31, 2025 and 2024, respectively. 9. COMMITMENTS AND CONTINGENCIES DOH Order On December 31, 2018, the State of Hawai‘i Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to our Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-family homes developed for workers in our former agricultural operations. The facility is made up of two 1.5 -acre wastewater stabilization ponds and surrounding disposal leach fields. The Order includes, among other requirements, payment of a $ 230,000 administrative penalty and development of improvements to the current wastewater treatment plant, which become final and binding unless a hearing is requested to contest the alleged violations and penalties. The DOH agreed to defer the Order while we implement an approved corrective action plan to address the facility’s wastewater effluent issues. The construction of additional leach fields and installations of a surface aerator, sludge removal system, and natural pond cover using water plants were completed. Test results from wastewater monitoring indicate effluent concentration amounts within allowable ranges. A feasibility study was prepared and submitted identifying various technical solutions that could be implemented to resolve the Order. We submitted a plan and proposed solution to resolve the Order. The plan included the installation of an additional pond that will be lined and installed with aerators. One of the existing ponds will be lined and renovated as necessary and the other pond will be taken offline and used as a backup pond if needed. The Company continues to make progress with the DOH and was, as of the date of this Annual Report, awaiting approval of submitted engineering and design drawings from the State of Hawai‘i. We have accrued approximately $ 23,000 related to the administrative penalty as of December 31, 2025. We are currently unable to estimate the remaining amount, or range of amounts, of any probable liability, if any, related to the Order. Accordingly, no additional provision has been made in the accompanying financial statements. Maui County Water Filtration Settlement Pursuant to a 1999 settlement agreement with the County of Maui, the Company and several chemical manufacturers agreed to pay for 90% of capital costs to install filtration systems in any future water wells if the presence of a nematicide, commonly known as DBCP, exceeds specified levels, and for the ongoing maintenance and operating cost for filtration systems on existing and future wells. The Company paid approximately $ 23,000 for the reimbursement of filtration and maintenance costs during each of the years ended December 31, 2025 and 2024. At the time of filing this Annual Report, the Company is not aware of any plans by the County of Maui to install other filtration systems or to drill any water wells in areas affected by agricultural chemicals. Accordingly, no reserve for costs relating to any future wells has been recorded because the Company cannot reasonably estimate the possible amount, or range of amounts, in any, of any probable liability. Honokohau Stream Irrigation Water Dispute On August 18, 2025, TY Management Corporation, which owns two golf courses (The Kapalua Plantation Golf Course and the Kapalua Bay Golf Course), the Plantation Estates Lot Owners Association (“PELOA”), the Association of Apartment Owners of the Coconut Grove on Kapalua, and the Association of Apartment Owners of the Ride at Kapalua ( three owner associations located within the Kapalua Resort Association (“KRA”)), and Hui Momona Farms LLC, a Hawaii-based company that is a member of PELOA (collectively, the “Plaintiffs”), filed a complaint against the Company in the Circuit Court of the Second Circuit, State of Hawaii. The complaint alleged the Company failed to provide irrigation water from Honokohau Stream due to an alleged failure to maintain the ditch system that transports water from the stream. The complaint seeks declaratory and injunctive relief and unspecified monetary damages. The Company's insurance carrier accepted the claim and tendered defense on behalf of the Company. In September 2025, the Company responded to the complaint and asserted counterclaims, including claims based on, alleged violations by Plaintiffs of irrigation-use restrictions intended to protect public trust purposes and fire protection for the entire Kapalua community as well as claims relating to alleged defamatory statements. At the time of filing this Annual Report, Company cannot reasonably estimate the possible loss or range of loss, or recovery from the counterclaim, if any, associated with this matter. The Company intends to defend against the claims and to prosecute its counterclaims. Since 2019, the availability of divertible water from Honokohau Stream has been reduced under Hawai’i state law. In addition, the stream has experienced record low flows associated with historic drought conditions impacting the island of Maui. At its September 2025 meeting, the Commission on Water Resource Management, the state agency responsible for administering the state water code, reported that rainfall contributes to runoff and baseflow to streams, and that for the period between September 2024 and August 2025, annual rainfall in Honokohau Valley was 46% of normal. As a result of reduced rainfall and Hawaii state law public trust uses, including drinking water and traditional practices, there has been less water available for private commercial irrigation 41 Table of Contents KRA Annexations In 2024 and 2025, the Company, as the developer of Kapalua and member of the KRA, annexed certain lands into Kapalua in accordance with procedures set forth in the KRA’s governing declaration. KRA's records reflect the annexed lands are part of Kapalua. On September 25, 2025, TY Management Corporation and derivatively on behalf of KRA, filed a lawsuit in the Circuit Court of the Second Circuit, State of Hawai‘i, against certain directors of KRA and the Company as declarant of KRA, alleging that the annexations and related voting rights are invalid. As a result of the disputes regarding the annexations and related voting rights, KRA’s annual meeting had not been held as of the date of this Annual Report, as required to be held by Hawaii statutes. On October 10, 2025, the Company, as a member of KRA and developer of Kapalua, petitioned the Second Circuit Court, State of Hawai‘i, to set the annual meeting. At the time of filing this Annual Report, the financial impact to the Company, if any, cannot be determined or estimated. KRA is responsible for the defense of the directors named in the claim. The Company will intend to defend against claims. In addition, from time to time, the Company is a party various legal proceedings, disputes, and other claims arising in the ordinary course of business. The Company believes the resolution of these other matters, in the aggregate, is not likely to have a material adverse effect on the Company’s consolidated financial position or operations. 10. LEASING ARRANGEMENTS The Company leases land primarily to agriculture operators and space in commercial buildings, primarily to restaurant and retail tenants through 2048. These operating leases generally provide for minimum rents, licensing fees, percentage rentals based on tenant revenues, and reimbursement of common area maintenance and other expenses. Certain leases allow the lessee an option to extend or terminate the lease agreement. There are no agreements allowing a lessee an option to purchase the underlying asset. Total leasing income subject to ASC Topic 842 for the years ended December 31, 2025 and 2024 were as follows: 2025 2024 (in thousands) Minimum rentals $ 4,668 $ 4,315 Percentage rentals 2,291 2,166 Licensing fees 139 169 Other 1,605 1,082 Total $ 8,703 $ 7,732 Leased property, net of accumulated depreciation, was $ 10.2 million and $ 9.6 million at December 31, 2025 and 2024. Future minimum rental income for the next five years and thereafter are as follows (in thousands): 2026 $ 4,443 2027 4,418 2028 4,055 2029 3,603 2030 3,107 Thereafter 13,281 42 Table of Contents 11. SHARE-BASED COMPENSATION The Company’s directors and certain members of management receive a portion of their compensation in shares of the Company’s common stock granted under the Company’s 2017 Equity and Incentive Award Plan, as amended (the “Equity Plan”). Share-based compensation is awarded annually to certain members of the Company’s management based on their achievement of predefined performance goals and objectives under the Equity Plan. Their share-based compensation is comprised of an annual incentive paid in shares of common stock and a long-term incentive paid in restricted shares of common stock vesting quarterly over a period of three years. Share-based compensation is valued based on the average of the high and low share price on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms and conditions of the Equity Plan. Restricted shares issued under the Equity Plan have voting and regular dividend rights but cannot be disposed of until such time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company. Directors receive both cash and share-based compensation under the Equity Plan. Their share-based compensation is comprised of restricted shares of common stock vesting quarterly over the directors’ annual period of service which are valued based on the average of the high and low share price on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms and conditions of the Equity Plan. Restricted shares issued under the Equity Plan have voting and regular dividend rights but cannot be disposed of until such time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company. Options to purchase shares of the Company’s common stock under the Equity Plan were granted to directors and the Chief Executive Officer in 2024 and 2023 . Stock option grants are valued at the commitment date, based on the fair value of the equity instruments, and recognized as share-based compensation expense on a straight-line basis over its respective vesting periods. The option agreements provide for accelerated vesting if there is a change in control in ownership. The number of common shares subject to options granted in 2023 for annual board service, board committee service, and continued service of the Chairperson of the Board are 250,000 shares, 78,000 shares, and 400,000 , respectively. For annual board service and board committee service, the stock options granted have a contractual period of ten years and vest quarterly over one year. The exercise price per share was based on the average of the high and low share price on the date of grant, or $ 12.11 per share. The fair value of these grants using the Black-Scholes option-pricing model was $ 3.88 per share based on an expected term of 5.25 years, expected volatility of 28 %, and a risk-free rate of 4.16 %. During the year ended December 31, 2024, 215,334 shares underlying the stock options granted to directors in 2023 for annual board and committee service vested. No shares underlying the 2023 stock option grants to directors remain unvested. For continued board service of the Chairperson, the stock option grant has a contractual period of ten years which vests as follows: 133,334 shares on June 1, 2024 , 133,333 shares on June 1, 2025 , and 133,333 shares on June 1, 2026 . The exercise price per share was based on the average of the high and low share price on the date of grant, or $ 9.08 per share. The fair value of these grants using the Black-Scholes option-pricing model was $ 3.94 per share based on an expected term of 6.12 years, expected volatility of 37 %, and a risk-free rate of 3.49 %. There were 133,333 of unvested share options, or $ 0.2 million of unrecognized compensation cost, at December 31, 2025 . An option to purchase 400,000 shares of the Company’s common stock under the Equity Plan was granted to the Chief Executive Officer in January 2024 .  The stock option grant has a contractual period of ten years and vests annually as follows: 133,334 shares on January 1, 2025 , 133,333 shares on January 1, 2026 , and 133,333 shares on January 1, 2027 . The exercise price per share was based on the average of the high and low share price on the date of grant, or $15.75 per share. The stock option grant is valued at the commitment date, based on the fair value, and recognized as share-based compensation expense on a straight-line basis over its vesting period beginning in January 2024 . The fair value of the grant using the Black-Scholes option-pricing model was $6.02 per share at January 1, 2024 based on an expected term of 6.00 years, expected volatility of 31 %, and a risk-free rate of 3.82 %. There were 266,666 shares of unvested share options, or $ 0.8 million of unrecognized compensation cost at December 31, 2025. The number of common shares subject to options granted in 2024 for annual board service and board committee service were 312,500 and 87,000 , respectively. These option grants have a contractual period of ten years and vest quarterly over one year. The exercise price per share was based on the average of the high and low share price on the date of grant, or $ 22.25 per share. The fair value of these grants using the Black-Scholes option-pricing model was $ 8.87 per share based on an expected term of 5.25 years, expected volatility of 32.1 %, and a risk-free rate of 4.40 %. During the year ended December 31, 2025 , 96,375 shares of stock options granted to directors in 2024 for annual board and committee service vested. No shares underlying the 2024 stock option grants to directors remain unvested. 43 Table of Contents The simplified method described in Staff Accounting Bulletin No. 107 was used by management due to the lack of historical option exercise behavior. The Company does not currently issue dividends. There were no forfeitures of stock option grants as of December 31, 2025. Management does not anticipate future forfeitures to be material. Share-based compensation expenses totaled $ 4.3 million and $ 6.3 million for the years ended December 31, 2025 and 2024 , respectively. Included in these amounts were $ 1.2 million and $ 0.6 million of restricted common stock vested during the years ended December 31, 2025 and 2024, and $ 2.1 million and $ 4.3 million of stock options vested during the years ended December 31, 2025 and 2024 , respectively. On August 5, 2024, R. Scot Sellers, a director and Chairperson of the Board, Steve Case, a director, and Race A. Randle, Chief Executive Officer, voluntarily executed agreements to cancel previously granted stock options and common stock grants. The Equity Plan was amended in February 2023 to increase the limit on the number of shares to be awarded during a plan year to 400,000 shares. In 2023, Mr. Sellers received options to purchase 63,500 shares and 18,804 shares of restricted common stock that exceeded the 400,000 share limit. In February 2024, Mr. Randle received 28,511 shares of restricted common stock that exceeded the 400,000 share limit. In addition, although grants to Mr. Case did not exceed the Equity Plan limit, he voluntarily opted to cancel the common stock grants and options issued to him in 2023 amounting to 6,659 shares of restricted common stock and options to purchase 56,000 shares, and options and restricted common stock issued in 2024 amounting to 3,124 shares of restricted common stock and options to purchase 56,000 shares. The cancellation of the options and restricted common stock grants resulted in recognizing the remaining unvested awards of options and restricted common stock grants immediately. In the third quarter of 2024, $ 631,000 was recognized as expense due to the cancellations, $ 402,000 due to the cancellation of Mr. Case’s options and restricted common stock grants and $ 229,000 due to the cancellation of Mr. Randle’s restricted common stock grants. 44 Table of Contents 12. INCOME TAXES GAAP prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s provision for income taxes is calculated using the liability method. Deferred income taxes are provided for all temporary differences between the financial statement and income tax bases of assets and liabilities using tax rates enacted by law or regulation. Reconciliations between the total income tax expense (benefit) and the amount computed using the statutory federal rate of 21 % for the years ended December 31, 2025 and 2024 were as follows: Year Ended December 31, 2025 2024 (in thousands) Federal income tax expense/(benefit) at statutory rate ( 2,222 ) 21.0 % ( 1,595 ) Adjusted for: Non-deductible items 31 ( 0.3 % ) 6 Return to provision adjustments 1,606 ( 15.2 % ) ( 372 ) State and local income tax, net of federal income tax effect ( 623 ) 5.9 % Valuation Allowance 1,208 ( 11.4 % ) 1,961 Income Tax expense/(benefit) - N/A - Deferred tax assets were comprised of the following temporary differences as of December 31, 2025 and 2024: Year Ended December 31, 2025 2024 Net operating loss and tax credit carryforwards $ 26,322 $ 24,770 Joint Venture and other investments ( 28 ) ( 279 ) Accrued retirement benefits and other compensation 3,295 2,728 Property net book value 2,015 3,042 Deferred Revenue 1,005 1,051 Reserves and other ( 60 ) 29 Total Deferred Tax Assets 32,549 31,341 Valuation Allowance ( 32,549 ) ( 31,341 ) Net deferred tax asset - - Valuation allowances at December 31, 2025 and 2024 have been established to reduce future tax benefits not expected to be realized. Net Operating Loss (NOL) carryforwards created in tax years beginning after December 31, 2017 are limited by the TCJA but do not expire. At December 31, 2025, the Company had approximately $ 67.5 million in federal NOL carryforwards and approximately $ 81.4 million in state NOL carryforwards expiring from 2030 through 2034. The Company also had approximately $ 14.5 million in federal and state NOL carryforwards at December 31, 2025 that do not expire. The Company is subject to U.S. federal income tax as well as income tax in Hawaii. The Company is currently open to examination by taxing authorities for tax years ended after 2021 . The Company recognizes and reports interest and penalties related to unrecognized tax benefits if applicable, within the provision for income tax expense. The Company had no unrecognized tax benefits for the years ended December 31, 2025 and 2024, and therefore did not recognize any interest expense or penalties on unrecognized tax benefits. The Company paid no income taxes in the years ended December 31, 2025 and 2024. 45 Table of Contents 13. SEGMENT INFORMATION The Company’s reportable operating segments are comprised of the discrete business units whose operating results are regularly reviewed by the Company’s Chief Executive Officer, its chief operating decision maker, and the Board of Directors in assessing performance and determining the allocation of resources. Reportable operating segments in 2025 were as follows: • Land development and sales operations consist of land planning and entitlement, development, development related construction, and sales of land assets. • Leasing primarily includes revenues and expenses from real property leasing activities, license fees and royalties for the use of certain of the Company’s trademarks and brand names by third parties, and the cost of maintaining the Company’s real estate assets, including conservation activities. The operating segment also includes the management of ditch, reservoir and well systems that provide potable and non-potable water to West and Upcountry Maui areas. • Resort Amenities include a membership program that provides certain benefits and privileges within the Kapalua Resort for its members. The Company’s reportable operating segment results were measured based on operating income, exclusive of interest, pension and other postretirement expenses. Condensed consolidated financial information for each of the Company’s reportable segments for the years ended December 31, 2025 and 2024 (in thousands) were as follows: Land Development & Sales Leasing Resort Amenities Other Consolidated 2025 Operating revenues (1) $ 5,811 $ 12,799 $ 847 $ - $ 19,457 Operating costs and expenses ( 3,963 ) ( 8,456 ) ( 1,388 ) - ( 13,807 ) Depreciation expense ( 18 ) ( 955 ) ( 11 ) ( 151 ) ( 1,135 ) General and administrative expenses ( 712 ) ( 949 ) ( 237 ) ( 7,164 ) ( 9,062 ) Operating income (loss) 1,118 2,439 ( 789 ) ( 7,315 ) ( 4,547 ) Pension and other postretirement expenses ( 6,912 ) Interest expense ( 216 ) Loss on asset disposal, net ( 15 ) Other income, net 1,111 Income from continuing operations ( 10,579 ) Capital expenditures (2) $ 4,473 $ 2,143 $ - $ 111 $ 6,727 Assets (3) $ 20,150 $ 17,927 $ 1,062 $ 8,829 $ 47,968 ( 1 ) Amounts are principally revenues from external customers and exclude equity in earnings of affiliates. ( 2 ) Includes expenditures for property and deferred costs. ( 3 ) Segment assets are located in the United States. Land Development & Sales Leasing Resort Amenities Other Consolidated 2024 Operating revenues (1) $ 520 $ 9,621 $ 1,424 $ - $ 11,565 Operating costs and expenses ( 1,104 ) ( 5,006 ) ( 1,477 ) - ( 7,587 ) Depreciation expense - ( 668 ) - ( 55 ) ( 723 ) General and administrative expenses ( 645 ) ( 859 ) ( 215 ) ( 8,890 ) ( 10,609 ) Operating income (loss) ( 1,229 ) 3,088 ( 268 ) ( 8,945 ) ( 7,354 ) Pension and other postretirement expenses ( 948 ) Interest expense ( 61 ) Loss on asset disposal, net 48 Other income 924 Income from continuing operations ( 7,391 ) Capital expenditures (2) $ 1,661 $ 1,871 $ - $ - $ 3,532 Assets (3) $ 21,695 (4) $ 16,672 $ 1,323 $ 10,449 $ 50,139 ( 1 ) Amounts are principally revenues from external customers and exclude equity in earnings of affiliates. ( 2 ) Includes expenditures for property and deferred costs. ( 3 ) Segment assets are located in the United States. ( 4 ) The Land Development and Sales segment includes a $ 1.0 million equity method investment as of December 31, 2024. 46 Table of Contents 14. ALLOWANCE FOR CREDIT LOSSES Allowance for credit losses for 2025 and 2024 were as follows: Description Balance at Beginning of Year Increase (Decrease) Balance at End of Year (in thousands) Alowance for Credit Losses 2025 $ 505 $ ( 189 ) $ 316 2024 $ 518 $ ( 13 ) $ 505 15. LONG TERM LEASES As of December 31, 2025, the company’s lease portfolio consists of five operating leases (office equipment and vehicles) and one finance lease (heavy equipment). The following table summarized the classification of leases on the Balance Sheet as of December 31, 2025 and 2024: 2025 2024 (in thousands) Assets Operating Lease ROU Assets $ 216 $ 24 Finance Lease ROU Assets 302 - Total Lease Assets $ 518 $ 24 2025 2024 (in thousands) Liabilities Current Operating Lease liabilities $ 35 $ 12 Finance Lease Liabilities 71 - Total Lease Liabilities - Current $ 106 $ 12 Non-Current Operating Lease liabilities 181 12 Finance Lease Liabilities 232 - Total Lease Liabilities - Non-Current $ 413 $ 12 The company used weighted-average discount rate of 4.50 %. The weighted-average remaining lease term for operating leases is 4.8 years. The weighted-average reaming lease term for the finance lease is 3.3 years. The following table projects the undiscounted cash flows for lease liabilities over the remaining five years: Operating Leases Finance Lease 2026 $ 52 $ 82 2027 50 82 2028 50 82 2029 50 82 2030 39 - Total lease payments 241 328 Less: imputed interest ( 18 ) ( 32 ) Total lease liability $ 223 $ 296 47 Table of Contents 16. SUBSEQUENT EVENT On January 28, 2026 ( “Effective Date”), the Company entered into a Purchase Agreement and Escrow Instructions (“Purchase Agreement”) with Race A. Randle, the Chief Executive Officer of the Company (“Buyer”), pursuant to which the Company agreed to sell to Buyer a 30 -acre parcel of land (“Property”), located in Lahaina, Hawaii. The Property is unimproved land that the Buyer will improve as a farm and home, pursuant to the terms of the Purchase Agreement. The purchase price (“Purchase Price”) for the Property is $ 1,200,000 . The Board has received and approved an appraisal of the property from an independent licensed Hawaii third -party appraiser that confirms the purchase price exceeds the current fair market value for the property as of the Effective Date. The transaction includes a value true-up mechanism on the fifth anniversary that requires the Buyer to pay additional purchase price if the fair market value of the Property on the fifth anniversary exceeds the Purchase Price. The Buyer is also subject to a long-term occupancy requirement as a principal residence, the breach of which grants the Company a repurchase option. Furthermore, the agreement utilizes a shared appreciation model where a decreasing percentage of sale profits must be paid to the Seller if the property is disposed of before the tenth anniversary. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.