MAUI LAND & PINEAPPLE CO INC

Previous wording

We own and manage a diverse portfolio including over 22,400 acres of land on the island of Maui, Hawaii along with 247,000 square feet of commercial real estate. For over a century, we have built a legacy of authentic innovation through conservation, agriculture, community building and land management. Our current portfolio of assets includes unimproved land, entitled land allowing for various residential and mixed-use construction, and completed commercial properties.

Current wording

We own and manage a diverse portfolio including over 22,000 acres of land on the island of Maui, Hawaii along with approximately 247,000 square feet of commercial real estate. For over a century, we have built a legacy of thoughtful stewardship through conservation, agriculture, community building and land management. Our current portfolio of assets includes unimproved land, entitled land allowing for various residential and mixed-use construction, and completed commercial properties.

Previous wording

In April 2023, a leadership transition was initiated by appointing a new Chief Executive Officer and new Chairman of the Board, both of whom are experienced in large scale real estate portfolio management including master planning, community building, and asset management. The strengthening of our team has continued through September 2024 with the addition of team members with localized experience including planning, engineering, permitting, community development, land and natural resource stewardship, and asset management.

Current wording

In April 2023, a leadership transition was initiated by appointing a new Chief Executive Officer and new Chairperson of the Board, both of whom are experienced in large scale real estate portfolio management including master planning, community building, and asset management. The strengthening of our team continued with the addition of team members with localized experience including planning, engineering, permitting, community development, land and natural resource stewardship, and asset management.

Previous wording

Year to date, the team has increased commercial property occupancy from 72% to 86%, including tenant relocations and improvements necessary to enhance the variety and quality of experiences in our town centers. This effort will continue, along with capital improvements necessary to continue attracting top tier tenants. In addition to stable cashflow in a supply-constrained market, our commercial properties allow us to perform value-creating placemaking for our surrounding landholdings. We anticipate cashflow from our commercial properties to increase in the coming years, as we reach stabilization and fund the near-term costs for tenant improvements and leasing costs inherent with new tenancies.

Current wording

From January 1, 2024 to March 31, 2025, the team has increased commercial property occupancy from 72% to 86%, including tenant relocations and improvements necessary to enhance the variety and quality of experiences in our town centers. This effort will continue, along with capital improvements necessary to continue attracting top tier tenants. In addition to stable cashflow in a supply-constrained market, our commercial properties allow us to perform value-creating placemaking for our surrounding landholdings. We anticipate cashflow from our commercial properties to increase in the coming years, as we reach stabilization and fund the near-term costs for tenant improvements and leasing costs inherent with new tenancies.

Previous wording

To enable the productive use of land for homes, businesses, farms, resort projects, or otherwise, we generally must make improvements to the land. These improvements take the form of master planning, entitlements and zoning, subdivision into useful lot sizes, and the addition of infrastructure, enabling it to be placed into productive use. In 2024 we completed portfolio-wide strategic plans across all 22,400 acres to prioritize and guide actions of the Company in the forthcoming quarters.

Current wording

To enable the productive use of land for homes, businesses, farms, resort projects, or otherwise, we generally must make improvements to the land. These improvements take the form of master planning, entitlements and zoning, subdivision into useful lot sizes, and the addition of infrastructure, enabling it to be placed into productive use. We continue to progress portfolio-wide strategic plans across over 22,000 acres of landholdings to prioritize and guide actions of the Company in the forthcoming quarters.

Previous wording

Near-term sales revenues (1-3 years) may be anticipated from our remnant and non-strategic parcels for sale, along with improved land in active marketing for sale and/or development with partner(s).

Current wording

We have recognized revenue from one non-strategic parcel sale in the first quarter of 2025 and anticipate additional near-term sales revenues (1-3 years) from other remnant parcels for sale, along with improved land in active marketing for sale and/or development with partner(s).

Previous wording

For the Honokeana Homes project, 50 acres will be leased to the State of Hawaii for up to seven years with no lease revenue. The State of Hawaii will fund the hard and soft costs to make horizontal improvements to the land and has set aside an initial $35.5 million for the project. The Company will administer the horizontal improvements utilizing third party contractors, on a cost recovery basis with no direct profit from the administrative work. If the State selects the Company to administer the home construction, the Company will similarly intend to do so on a cost recovery basis.

Current wording

For the Honokeana Homes project, we have agreed to lease up to 50 acres to the State of Hawaii for up to seven years with no lease revenue, to support the needs of victims of the 2023 Lahaina wildfire. The State of Hawaii set aside an initial $35.5 million for the project, to fund hard and soft costs related to horizontal improvements on the land. We have agreed to administer the horizontal improvements utilizing third party contractors, on a cost recovery basis with no direct profit from the administrative work.

Previous wording

Unimproved land identified for long-term lease and ongoing asset management may be expected to be leased or licensed for diversified agricultural, conservation, and cultural uses for the next ten or more years. This land includes the Pu’u Kukui Watershed, which is over 8,600 acres and is actively managed to maximize rainfall capture and recharge of the aquifer which provides approximately 70% of the water consumed in West Maui. As most of the agricultural land was irrigated, graded, and actively farmed in prior decades, it has high potential for productive agricultural use. The Company is focused on increasing the occupancy of these agricultural lands to improve productivity via economic activity and local food production.

Current wording

Unimproved land identified for long-term lease and ongoing asset management may be expected to be leased or licensed for diversified agricultural, conservation, and cultural uses for the next ten or more years. This land includes the Pu’u Kukui Watershed, which is over 8,600 acres and is actively managed to maximize rainfall capture and recharge of the aquifer which provides approximately 70% of the water consumed in West Maui.

Previous wording

Three and Nine Months Ended September 30, 2024 Compared to Three and Nine Months Ended September 30, 2023

Current wording

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Previous wording

Land development and sales operating revenues include the sales of our real estate inventory. There was one sale of real estate during the nine months ended September 30, 2024 amounting to $200,000 for a land easement in West Maui and no sales of real estate during the nine months ended September 30, 2023. This is purposeful as the Company is evaluating its commercial assets and land holdings to determine the best utilization of its assets in West Maui and in Upcounty Maui in the town of Haliimaile to increase value.

Current wording

Land development and sales operating revenues primarily consist of the project revenue from the Honokeana Homes project. There were no sales of real estate during the three months ended March 31, 2025 or 2024. This is purposeful as we continue to evaluate our commercial assets and land holdings to determine the best utilization of our assets in West Maui and in Upcounty Maui in the town of Haliimaile to increase value.

Previous wording

Approximately $687,000 was spent towards real estate development expenditures during the nine months ended September 30, 2024 for development efforts both in West Maui and Haliimaile. Approximately $526,000 in development expenditures were made during the nine months ended September 30, 2023.

Current wording

Approximately $2.3 million was spent towards real estate development expenditures during the three months ended March 31, 2025 related to the Honokeana Homes project. Approximately $266,000 in development expenditures were made during the three months ended March 31, 2024.

Previous wording

Operating revenues from leasing activities for the three months ended September 30, 2024, were comprised primarily of $2.2 million from commercial, industrial, and agricultural leases, and the remaining $0.5 million was primarily comprised of $67,000 of licensing fees from our registered trademarks and trade names, $249,000 from potable and non-potable water system sales and $85,000 in grant revenue from the State of Hawai‘i for conservation management of our Pu‘u Kukui Watershed. Operating revenue from leasing activities for the three months ended September 30, 2023, were primarily comprised of $1.3 million from commercial, industrial, and agricultural leases, and the remaining $0.6 million was comprised of $188,000 of licensing fees from our registered trademarks and trade names, $312,000 from potable and non-potable water system sales and $85,000 in grant revenue from the State of Hawai‘i for conservation management of our Puu Kukui Watershed.

Current wording

Operating revenues from leasing activities for the three months ended March 31, 2025, were comprised primarily of $2.2 million from commercial, industrial, and agricultural leases, and the remaining $1.0 million was primarily comprised of $33,000 of licensing fees from our registered trademarks and trade names, approximately $800,000 from potable and non-potable water system sales and $86,000 in grant revenue from the State of Hawai‘i for conservation management of our Pu‘u Kukui Watershed. Operating revenues from leasing activities for the three months ended March 31, 2024, were comprised primarily of $1.9 million from commercial, industrial, and agricultural leases, and the remaining $0.3 million was comprised of $33,000 of licensing fees from our registered trademarks and trade names, $175,000 from potable and non-potable water system sales and $85,000 in grant revenue from the State of Hawai‘i for conservation management of our Pu‘u Kukui Watershed.

Previous wording

Certain rental income is contingent upon the sales of tenants exceeding a defined threshold and recognized as a percentage of sales after those thresholds are achieved. As the COVID-19 pandemic waned, visitor traffic to Maui began to increase and these percentage rents, leasing revenues in general and land licensing from adventure tourism tenants were returning to pre-pandemic levels until the occurrence of the devastating Maui wildfires on August 8, 2023. The wildfires directly and critically impacted West Maui and took its toll on percentage rents and revenues for tourism based tenants. The $2.7 million of operating revenues from leasing activities for the three months ended September 30, 2024, compared to $1.9 million for the three months ended September 30, 2023 is an indication that tourism and visitor traffic is returning to pre-pandemic levels. The increase in operating revenues at September 30, 2024 compared to September 30, 2023, is reflective of our efforts to re-tenant and re-merchandise the tenant mix in the three commercial centers owned by the Company in the Kapalua Resort, Haliimaile Town and the Alaeloa Business Park. New tenant leases are typically being executed with an initial free rent period to reflect current market rental rates.

Current wording

Certain rental income is contingent upon the sales of tenants exceeding a defined threshold and recognized as a percentage of sales after those thresholds are achieved. As the COVID-19 pandemic waned, visitor traffic to Maui began to increase and these percentage rents, leasing revenues in general and land licensing from adventure tourism tenants were returning to pre-pandemic levels until the occurrence of the devastating Maui wildfires on August 8, 2023. The wildfires directly and critically impacted West Maui and took its toll on percentage rents and revenues for tourism based tenants. The $3.2 million of operating revenues from leasing activities for the three months ended March 31, 2025, compared to $2.2 million for the three months ended March 31, 2024 is an indication that tourism and visitor traffic is returning to pre-pandemic levels. The increase in operating revenues at March 31, 2025 compared to March 31, 2024, is reflective of our efforts to re-tenant, re-merchandise and convert below market leases to current market rate leases throughout the three commercial centers owned by the Company in the Kapalua Resort, Haliimaile Town and the Alaeloa Business Park. New tenant leases are typically being executed with an initial free rent period to reflect current market rental rates.

Previous wording

The increase in leasing operating costs and expenses for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, can be attributed to higher property maintenance costs for our commercial leasing portfolio properties, which had been deferred in prior years, hiring a property management and leasing firm to increase occupancy of our leasing portfolio, and the start-up costs and fees associated with our efforts to improve the tenant composition in our leasing portfolio.

Current wording

The increase in leasing operating costs and expenses for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, can be attributed to higher property maintenance costs for our commercial leasing portfolio properties, which had been deferred in prior years, hiring a property management and leasing firm to increase occupancy of our leasing portfolio, and the costs associated with our efforts to improve the tenant composition in our leasing portfolio.

Previous wording

The increase in operating revenues for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, was primarily due to new memberships being sold for the first time since 2019.

Current wording

The increase in operating revenues for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was primarily due to new memberships being sold.

Previous wording

General and administrative costs and share-based compensation for the nine months ended September 30, 2024 amounted to $8.0 million, compared to $5.5 million for the nine months ended September 30, 2023.

Current wording

General and administrative costs and share-based compensation for the three months ended March 31, 2025 amounted to $3.1 million, compared to $2.0 million for the three months ended March 31, 2024.

Previous wording

Share-based compensation costs and share-based compensation for the nine months ended September 30, 2024 amounted to $4.7 million, compared to $2.5 million for the nine months ended September 30, 2023. The $2.2 million increase is attributable to option valuation expenses resulting from the options granted to our Chief Executive Officer in January 2024, options granted to our directors in May 2024, which were at a higher valuation from the options granted to directors in May 2023, and the options and shares cancellation that took place in August 2024. These differences are explained in the paragraphs below. Shared based compensation expenses for the nine months ended September 30, 2024 included options for the Chairman of the Board issued in March 2023, options issued to directors in May 2023, options issued to the Chief Executive Officer in January 2024, options issued to directors in May 2024, stock grants to directors in 2024, cancellations of certain stock grants and options in August 2024, and employees’ incentive share vesting. Share-based compensation expenses for the nine months ended September 30, 2023 included options for the Chairman of the Board issued in March 2023, options issued to directors in May 2023, employees’ incentive share vesting and incentive share vesting for the former Chief Executive Officer upon separation from the Company on March 31, 2023.

Current wording

Share-based compensation costs and share-based compensation for the three months ended March 31, 2025 amounted to $1.6 million, compared to $1.0 million for the three months ended March 31, 2024. The $0.5 million increase is attributable to option valuation expenses resulting from the options granted to our Chief Executive Officer in January 2024, options granted to our directors in May 2024, which were at a higher valuation from the options granted to directors in May 2023, and the options and shares cancellation that took place in August 2024. These differences are explained in the paragraphs below.

Previous wording

An option to purchase 400,000 shares of the Company’s common stock under the 2017 Equity and Incentive Award Plan (the Plan) was granted to the Company's Chief Executive Officer during the three months ended March 31, 2024, none of these options shares vested during this period. Additional information of the option issuance to the Chief Executive Officer is detailed in Note 11 of the financial statements. During the nine months ended September 30, 2024, 422,084 shares of stock options vested which were comprised of 82,000 option shares issued to directors in May 2023, 340,084 option shares issued to directors in May 2024 and 133,334 option shares issued to the Chairman of the Board in March 2023. During the nine months ended September 30, 2023, 164,000 option shares were vested under options issued to directors in March 2023.

Current wording

An option to purchase 400,000 shares of our common stock under the 2017 Equity and Incentive Award Plan (the Plan) was granted to our Chief Executive Officer during the three months ended March 31, 2024, none of these options shares vested during this period. Additional information of the option issuance to the Chief Executive Officer is detailed in Note 11 of the financial statements. During the three months ended March 31, 2025, 229,709 shares of stock options vested which were comprised of 96,375 option shares issued to directors in May 2024 and 133,334 option shares issued to the Chairperson of the Board in March 2023. For the three months ended March 31,2024, director options to purchase 82,000 shares and 164,000 shares vested for annual board and committee service, respectively.

Previous wording

On August 5, 2024, R. Scot Sellers, a director and Chairman of the Board, Stephen M. 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 common stock that exceeded the 400,000 share limit. In February 2024, Mr. Randle received 28,511 shares of 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 and 56,000 shares, respectively, and options and restricted shares issued in 2024 amounting to 3,124 shares and 56,000 shares, respectively. The cancellation of the options and common stock grants resulted in recognizing the remaining unvested awards of options and 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 common stock grants and $229,000 due to the cancellation of Mr. Randle’s common stock grants.

Current wording

On August 5, 2024, R. Scot Sellers, a director and Chairperson of the Board, Stephen M. 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 common stock that exceeded the 400,000 share limit. In February 2024, Mr. Randle received 28,511 shares of 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 and 56,000 shares, respectively, and options and restricted shares issued in 2024 amounting to 3,124 shares and 56,000 shares, respectively. The cancellation of the options and common stock grants resulted in recognizing the remaining unvested awards of options and 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 common stock grants and $229,000 due to the cancellation of Mr. Randle’s common stock grants.

Previous wording

Other income of $0.3 million and $0.6 million was earned during the nine month period ended September 30, 2024 and 2023, respectively. During the nine months ended September 30, 2024, other income was due to interest earned on savings and dividends earned on an investment bond fund of varying maturities. For the nine month period ended September 30, 2023, $0.4 million was earned interest on savings and dividends on an investment bond fund of varying maturities and $0.2 million was earned on a refund of captive insurance funds from a now defunct joint venture of the Company. The Company does not maintain nor possess any off-balance sheet financings nor transactions.

Current wording

Other income of $0.1 million was earned during the three month period ended March 31, 2025 and 2024. During the three months ended March 31, 2025 and 2024, other income was due to interest earned on savings and dividends earned on an investment bond fund of varying maturities. We do not maintain nor possess any off-balance sheet financings nor transactions.

Previous wording

Our cash and cash equivalents were $6.1 million and $5.7 million (audited) at September 30, 2024 and December 31, 2023, respectively.

Current wording

Our cash and cash equivalents were $7.9 million and $6.8 million (audited) at March 31, 2025 and December 31, 2024, respectively.

Previous wording

We also had investments in a bond fund with varying maturities in the amount of $3.1 million at September 30, 2024 and December 31, 2023. Our investments consist of corporate bond securities maturing on various dates through November 2025. These bond investments yield approximately 3.4% at September 30, 2024. We intend to hold our bond securities until maturity.

Current wording

We also had investments in a bond fund with varying maturities in the amount of $1.6 million and $2.7 million at March 31, 2025 and December 31, 2024. Our investments consist of corporate bond securities maturing on various dates through November 2025. These bond investments yield approximately 3.8% at March 31, 2025. We intend to hold our bond securities until maturity.

Previous wording

At September 30, 2024, $12.0 million was available from our revolving line of credit facility (“Credit Facility”) with First Hawaiian Bank (“Bank”), as the Company borrowed $3,000,000 during the three months ended September 30, 2024. The Credit Facility, which matures on December 31, 2025, provides for revolving or term loan borrowing options. Interest on revolving loan borrowings is calculated using 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. We have 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.

Current wording

At March 31, 2025, $12.0 million was available from our revolving line of credit facility (“Credit Facility”) with First Hawaiian Bank (“Bank”), as the Company borrowed $3,000,000 in 2024. The Credit Facility, which matures on December 31, 2025, provides for revolving or term loan borrowing options. Interest on revolving loan borrowings is calculated using 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. We have 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.

Previous wording

Net cash provided by our operating activities for the nine months ended September 30, 2024 was $0.1 million and net cash used in our operating activities was $0.2 million for the nine months ended September 30, 2023.

Current wording

Net cash provided by our operating activities for the three months ended March 31, 2025 was $0.2 million and net cash used in our operating activities was $10,000 for the three months ended March 31, 2024.

Previous wording

There was one sale of real estate during the nine months ended September 30, 2024 in the amount of $0.2 million for a land easement in West Maui and no sales of real estate during the nine months ended September 30, 2023.

Current wording

There was land development revenue during the three months ended March 31, 2025 in the amount of $2.3 million for a Honokeana Homes project and no sales of real estate during the three months ended March 31, 2024.

Previous wording

Interest income earned from our money market and bond investments was $0.3 million for the nine months ended September 30, 2024, and $0.4 million for the nine months ended September 30, 2023.

Current wording

Interest income earned from our money market and bond investments was $0.1 million for the three months ended March 31, 2025, and 2024.

Previous wording

The outstanding balance of our Credit Facility was $3,000,000 at September 30, 2024. There were no interest payments due on our Credit Facility during the nine months ended September 30, 2024.

Current wording

The outstanding balance of our Credit Facility was $3,000,000 at March 31, 2025. There were no interest payments due on our Credit Facility during the three months ended March 31, 2025.

Previous wording

No contributions are required to be made to our defined benefit pension plan in 2024.

Current wording

Contributions in the amount of $500,000 was required to be made to our defined benefit pension plan during the first quarter of 2025.

Previous wording

Our business initiatives include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects. At times, this may require borrowing under our Credit Facility or other indebtedness, repayment of which may be dependent on selling of our real estate assets at acceptable prices in condensed timeframes. We believe our cash and investment balances, cash provided from ongoing operating activities, and available borrowings under our Credit Facility, will provide sufficient liquidity to enable us to meet our working capital requirements, contractual obligations, and timely service our debt obligations for the next months and the foreseeable longer term.

Current wording

Our business initiatives include investing in our operating infrastructure and continued planning and entitlement efforts on our development projects. At times, this may require borrowing under our Credit Facility or other indebtedness, repayment of which may be dependent on selling of our real estate assets at acceptable prices in condensed timeframes. We believe our cash and investment balances, cash provided from ongoing operating activities, and available borrowings under our Credit Facility, will provide sufficient liquidity to enable us to meet our working capital requirements, contractual obligations, and timely service our debt obligations for the next twelve months and the foreseeable longer term.