Maui Land & Pineapple pany(MLP) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially[8] - Key risk factors include natural disasters (e.g., Maui wildfires), credit risk concentration, unstable macroeconomic conditions (energy costs, interest rates, inflation), real estate investment risks (demand in Hawai'i/Maui), cybersecurity incidents, ability to complete land development projects on time/budget, crop damages, and environmental regulations[8] - The company cautions against undue reliance on forward-looking statements and undertakes no obligation to publicly revise them, except as required by law[9] PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated interim financial statements, including balance sheets, statements of operations and comprehensive loss, statements of changes in stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies and financial performance for the periods ended June 30, 2025 and 2024 Condensed Consolidated Balance Sheets The company's total assets decreased by 8.77% from December 31, 2024, to June 30, 2025, primarily due to reduced current assets, while total liabilities increased by 14.67%, leading to a 20.76% decrease in total stockholders' equity | Item | June 30, 2025 (unaudited) (in thousands) | December 31, 2024 (audited) (in thousands) | Change (in thousands) | % Change | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------- | :------- | | ASSETS | | | | | | Total current assets | $11,398 | $15,127 | $(3,729) | -24.65% | | Property & equipment, net | $17,534 | $17,401 | $133 | 0.76% | | Total other assets | $16,807 | $17,611 | $(804) | -4.56% | | TOTAL ASSETS | $45,739 | $50,139 | $(4,400) | -8.77% | | LIABILITIES | | | | | | Total current liabilities | $14,747 | $11,197 | $3,550 | 31.70% | | Total long-term liabilities | $4,698 | $5,761 | $(1,063) | -18.45% | | TOTAL LIABILITIES | $19,445 | $16,958 | $2,487 | 14.67% | | STOCKHOLDERS' EQUITY | | | | | | Total stockholders' equity | $26,294 | $33,181 | $(6,887) | -20.76% | Condensed Consolidated Statements of Operations and Comprehensive Loss (Three Months) For the three months ended June 30, 2025, operating revenues increased by 74.18% year-over-year, driven by land development and sales and leasing, leading to a 62.15% decrease in operating loss and a 46.63% improvement in net loss | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :------------------------------- | :------------------------------- | :-------------------- | :------- | | Operating revenues | $4,602 | $2,645 | $1,957 | 74.18% | | Total operating costs and expenses | $5,313 | $4,526 | $787 | 17.39% | | Operating loss | $(711) | $(1,881) | $1,170 | -62.15% | | Net loss | $(999) | $(1,872) | $873 | -46.63% | | Net loss per common share | $(0.05) | $(0.10) | $0.05 | -50.00% | Condensed Consolidated Statements of Operations and Comprehensive Loss (Six Months) For the six months ended June 30, 2025, operating revenues increased by 102.94% year-over-year, primarily from land development and sales and leasing, but a significant 4708.33% increase in pension expenses resulted in a 196.86% higher net loss of $(9.639) million | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | % Change | | :--------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | :------- | | Operating revenues | $10,406 | $5,128 | $5,278 | 102.94% | | Total operating costs and expenses | $12,897 | $8,409 | $4,488 | 53.37% | | Operating loss | $(2,491) | $(3,281) | $790 | -24.08% | | Pension and other post-retirement expenses | $(7,501) | $(156) | $(7,345) | 4708.33% | | Net loss | $(9,639) | $(3,247) | $(6,392) | 196.86% | | Net loss per common share | $(0.49) | $(0.16) | $(0.33) | 206.25% | Condensed Consolidated Statements of Changes in Stockholders' Equity Total stockholders' equity decreased by $6.887 million from December 31, 2024, to June 30, 2025, primarily due to net losses of $(8.640) million and $(0.999) million, partially offset by share-based compensation | Item | December 31, 2024 (audited) (in thousands) | June 30, 2025 (unaudited) (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------- | :------------------------ | :-------------------- | | Total Stockholders' Equity | $33,181 | $26,294 | $(6,887) | | Net loss (March 31, 2025) | - | $(8,640) | $(8,640) | | Net loss (June 30, 2025) | - | $(999) | $(999) | | Share-based compensation | $1,520 | $2,300 | $780 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, the company experienced a net decrease in cash and cash equivalents of $(0.299) million, an improvement from the prior year, driven by cash provided by investing activities despite increased cash used in operating and financing activities | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :-------------------------------------- | :----------------------------- | :----------------------------- | :-------------------- | | Net cash provided by (used in) operating activities | $(714) | $(543) | $(171) | | Net cash provided by (used in) investing activities | $747 | $(1,346) | $2,093 | | Net cash provided by (used in) financing activities | $(332) | $(78) | $(254) | | Net decrease in cash and cash equivalents | $(299) | $(1,967) | $1,668 | | Cash and cash equivalents at end of period | $6,536 | $3,733 | $2,803 | - Non-cash investing and financing activities for the six months ended June 30, 2025, included $1.2 million in common stock issued under the Equity Plan, $0.5 million in capitalized property and deferred development costs in accounts payable, and $1.5 million in assets transferred from deferred development to assets held for sale[24] Notes to Condensed Consolidated Interim Financial Statements These notes provide essential details and explanations for the unaudited condensed consolidated interim financial statements, covering accounting policies, specific asset and liability components, debt, retirement benefits, commitments, leasing, share-based compensation, and recent accounting pronouncements 1. Basis of Presentation The company reincorporated from Hawai'i to Delaware on July 18, 2022, and its common stock is listed on the NYSE under the ticker symbol 'MLP' - The company reincorporated from Hawai'i to Delaware on July 18, 2022, and its common stock is listed on the NYSE under the ticker symbol 'MLP'[27] 2. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits in banks, and money market funds - Cash and cash equivalents include cash on hand, deposits in banks, and money market funds[28] 3. Investments in Debt Securities The company's investments in debt securities, primarily short-term, decreased significantly from $2.692 million at December 31, 2024, to $0.492 million at June 30, 2025 | Item | June 30, 2025 (unaudited) (in thousands) | December 31, 2024 (audited) (in thousands) | | :---------------- | :-------------------------- | :-------------------------- | | Amortized cost | $492 | $2,687 | | Unrealized gains | - | $5 | | Fair value | $492 | $2,692 | | Maturities (One year or less) | $492 | $2,687 | 4. Deferred Development Costs - Development Projects Capitalized costs for real estate development projects decreased to $13.7 million at June 30, 2025, from $14.4 million at June 30, 2024 - Capitalized costs for real estate development projects were $13.7 million at June 30, 2025, down from $14.4 million at June 30, 2024[32] 5. Deferred Development Costs - Agave Venture Capitalized costs for the new Agave venture increased significantly to $0.6 million at June 30, 2025, from $30,000 at June 30, 2024 - Capitalized costs for the new Agave venture increased significantly to $0.6 million at June 30, 2025, from $30,000 at June 30, 2024[33] 6. Property & Equipment, Net Net property and equipment remained stable at $17.534 million at June 30, 2025, and the company manages over 22,300 acres of land on Maui, including 900 acres entitled for mixed-use development | Item | June 30, 2025 (unaudited) (in thousands) | December 31, 2024 (audited) (in thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | | Total property and equipment | $47,961 | $54,340 | | Less accumulated depreciation | $(30,427) | $(36,939) | | Property and equipment, net | $17,534 | $17,401 | - The company owns and manages over 22,300 acres of land on Maui, with over 20,000 acres in West Maui (including 900 acres entitled for mixed-use development in Kapalua Resort) and approximately 1,500 acres in Upcountry Maui (Hali'imaile)[34] 7. Investment in Unconsolidated Joint Venture The company entered a joint venture (BRE2 LLC) in December 2023, contributing 31 acres valued at $1.6 million, and received distributions of approximately $1.2 million in Q1 and April 2025 - The company entered a joint venture (BRE2 LLC) in December 2023, contributing 31 acres valued at $1.6 million. Distributions of approximately $0.7 million were received in Q1 2025 and an additional $0.5 million in April 2025[39] 8. Contract Assets and Liabilities Receivables from customer contracts decreased from $4.3 million at December 31, 2024, to $1.1 million at June 30, 2025, with deferred license fee revenue of $66,667 recognized in both six-month periods - Receivables from contracts with customers decreased from $4.3 million at December 31, 2024, to $1.1 million at June 30, 2025[40] - Deferred license fee revenue recognized was $66,667 for both six-month periods ended June 30, 2025 and 2024[41] 9. Long-Term Debt The company has a $15.0 million revolving line of credit, with $12.0 million available and $3.0 million borrowed at June 30, 2025, maintaining compliance with debt covenants - The company has a $15.0 million revolving line of credit facility with First Hawaiian Bank, maturing on December 31, 2025. $12.0 million was available at June 30, 2025, with $3.0 million borrowed[42] - The interest rate on the Credit Facility was 6.375% at June 30, 2025, down from 6.625% at December 31, 2024[42] - The company was in compliance with debt covenants at June 30, 2025, which include a minimum liquidity of $2.0 million and a maximum of $45.0 million in total liabilities[43][44] 10. Accrued Retirement Benefits Total accrued retirement benefits significantly increased to $8.808 million at June 30, 2025, from $2.508 million at December 31, 2024, primarily due to a $7.457 million settlement expense for pension plan termination | Item | June 30, 2025 (unaudited) (in thousands) | December 31, 2024 (audited) (in thousands) | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Defined benefit pension plan | $7,230 | $912 | | Non-qualified retirement plans | $1,578 | $1,596 | | Total accrued retirement benefits | $8,808 | $2,508 | | Non-current portion | $1,438 | $2,368 | - A settlement expense of $7.457 million was recognized during the six months ended June 30, 2025, primarily due to the estimated costs to terminate the qualified pension plan, including a $1.060 million cash contribution[47] 11. Commitments and Contingencies The company is addressing a 2018 State of Hawai'i Department of Health Order for alleged wastewater effluent violations at its Upcountry Maui facility, with a proposed solution submitted in March 2024 - The company is addressing a 2018 State of Hawai'i Department of Health Order for alleged wastewater effluent violations at its Upcountry Maui facility, with a proposed solution submitted in March 2024[48][49] 12. Leasing Arrangements Total leasing revenues increased to $2.194 million for the three months and $4.432 million for the six months ended June 30, 2025, reflecting growth across minimum rentals, percentage rentals, and licensing fees | Revenue Type | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Minimum rentals | $1,214 | $1,058 | $2,530 | $2,022 | | Percentage rentals | $590 | $444 | $1,187 | $1,049 | | Licensing fees | $41 | $36 | $72 | $69 | | Other | $349 | $184 | $643 | $351 | | Total | $2,194 | $1,722 | $4,432 | $3,491 | 13. Share-Based Compensation Share-based compensation expenses decreased to $0.7 million for the three months and $2.3 million for the six months ended June 30, 2025, with $1.6 million in unrecognized costs for unvested options - Share-based compensation expenses decreased to $0.7 million for the three months ended June 30, 2025 (from $1.6 million in 2024) and to $2.3 million for the six months ended June 30, 2025 (from $2.6 million in 2024)[61] - Unvested share options at June 30, 2025, include 133,333 shares for the Chairperson ($0.4 million unrecognized cost) and 266,666 shares for the CEO ($1.2 million unrecognized cost)[56][57] - Voluntary cancellations of stock options and common stock grants by certain directors and the CEO in August 2024 resulted in a $631,000 expense recognition in Q3 2024[59] 14. Income Taxes The company uses the liability method for income taxes and has established a full valuation allowance for deferred income tax assets at June 30, 2025, and December 31, 2024 - The company uses the liability method for income taxes and has established a full valuation allowance for deferred income tax assets at June 30, 2025, and December 31, 2024[62] 15. Loss Per Share Basic and diluted weighted-average shares outstanding were 19.7 million for the six months ended June 30, 2025, and 19.6 million for the six months ended June 30, 2024 - Basic and diluted weighted-average shares outstanding were 19.7 million for the six months ended June 30, 2025, and 19.6 million for the six months ended June 30, 2024[64] 16. Reportable Operating Segments The company's reportable segments include Land development and sales, Leasing, and Resort amenities, with consolidated operating revenues of $10.406 million and an operating loss of $(2.491) million for the six months ended June 30, 2025 | Segment | Operating Revenues (6M 2025) (in thousands) | Operating Revenues (6M 2024) (in thousands) | Operating Income (Loss) (6M 2025) (in thousands) | Operating Income (Loss) (6M 2024) (in thousands) | Assets (June 30, 2025) (in thousands) | Assets (June 30, 2024) (in thousands) | | :------------------------ | :--------------------------- | :--------------------------- | :-------------------------------- | :-------------------------------- | :--------------------- | :--------------------- | | Land development & sales | $3,442 | $200 | $(235) | $(577) | $16,920 | $16,042 | | Leasing | $6,421 | $4,388 | $2,067 | $1,502 | $17,320 | $14,973 | | Resort amenities | $543 | $540 | $(442) | $(309) | $1,332 | $1,195 | | Other | - | - | $(3,881) | $(3,897) | $10,167 | $9,726 | | Consolidated | $10,406 | $5,128 | $(2,491) | $(3,281) | $45,739 | $41,936 | - Reportable operating segments include Land development and sales, Leasing, and Resort amenities. The 'Other' category includes general and administrative expenses not allocated to specific segments[66][69] 17. Fair Value Measurements The company classifies financial assets and liabilities into a three-level hierarchy for fair value measurements: Level 1 (quoted market prices), Level 2 (observable market-based inputs), and Level 3 (unobservable inputs) - The company classifies financial assets and liabilities into a three-level hierarchy for fair value measurements: Level 1 (quoted market prices), Level 2 (observable market-based inputs), and Level 3 (unobservable inputs)[72][73][74] 18. New Accounting Standard Adopted The company adopted ASU 2023-07, Segment Reporting (Topic 280), which requires disclosure of significant expenses and other segment items on an interim and annual basis, resulting in modifications to reportable segment disclosures - The company adopted ASU 2023-07, Segment Reporting (Topic 280), which requires disclosure of significant expenses and other segment items on an interim and annual basis, resulting in modifications to reportable segment disclosures[76] 19. Recently Issued Accounting Pronouncements The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively - The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[78][79] 20. Reclassification Deferred development costs on the balance sheet have been reclassified to separate 'Deferred development – development projects' from 'Deferred development – Agave venture' - Deferred development costs on the balance sheet have been reclassified to separate 'Deferred development – development projects' from 'Deferred development – Agave venture'[80] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the company's financial condition and results of operations, highlighting strategic initiatives, segment performance, and liquidity, emphasizing efforts to maximize asset utilization, address community needs, and manage financial resources amidst market changes Overview The company, a landholding and operating entity with over 22,000 acres on Maui, focuses on strategically maximizing asset use and improving quality of life, with recent initiatives including increasing commercial property occupancy, advancing land utilization plans, and launching a new Agave venture - The company owns and manages over 22,000 acres of land on Maui, Hawai'i, and approximately 247,000 square feet of commercial real estate[83] - Strategic mission is to maximize asset use, resulting in added value to the Company and improved quality of life on Maui for future generations[85] | Commercial Real Estate | Total (Sq. ft.) | Leased (Sq. ft.) | Percent Leased | Net increase (decrease) in leased area (in 2025) (Sq. ft.) | | :--------------------- | :-------------- | :--------------- | :------------- | :-------------------------------------------------------- | | Industrial | 168,880 | 150,469 | 89% | 8,316 | | Office | 10,105 | 10,105 | 100% | - | | Retail | 61,004 | 57,111 | 94% | 799 | | Residential | 7,339 | 3,000 | 41% | - | | Total CRE | 247,328 | 220,685 | 89% | 9,115 | | Land | Total (Acres) | Leased (Acres) | Percent Leased | Net increase (decrease) in leased area (in 2025) (Acres) | | :--------------- | :------------ | :------------- | :------------- | :------------------------------------------------------- | | Comm./Ind. | 19 | 19 | 100% | - | | Residential | 866 | 336 | 39% | 324 | | Agriculture | 10,356 | 4,653 | 45% | - | | Conservation | 11,045 | - | 0% | - | | Total Land | 22,286 | 4,684 | 21% | - | - The company has initiated a new scalable business venture to cultivate agave, with planting begun in Q2 2025, anticipating a 7-9 year growth cycle for production[94][99] - For the Honokeana Homes project, the company agreed to lease up to 50 acres to the State of Hawai'i for up to seven years with no lease revenue, to support Lahaina wildfire victims, administering horizontal improvements on a cost recovery basis[96] Results of Operations The company's operating revenues significantly increased across segments for both the three and six months ended June 30, 2025, compared to 2024, with improved operating losses, though the six-month net loss widened due to substantial pension settlement expenses Consolidated Results Consolidated operating revenues increased significantly for both three and six-month periods ended June 30, 2025, leading to reduced operating losses, but a substantial increase in pension expenses resulted in a higher net loss of $(9.639) million for the six months | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating revenues | $4,602 | $2,645 | $10,406 | $5,128 | | Operating loss | $(711) | $(1,881) | $(2,491) | $(3,281) | | Pension and other post-retirement expenses | $(582) | $(78) | $(7,501) | $(156) | | Net loss | $(999) | $(1,872) | $(9,639) | $(3,247) | | Net loss per Common Share | $(0.05) | $(0.10) | $(0.49) | $(0.16) | Land Development and Sales Land development and sales operating revenues significantly increased to $1.143 million for the three months and $3.442 million for the six months ended June 30, 2025, primarily from the Honokeana Homes project and parcel sales, resulting in positive operating income | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating revenues | $1,143 | $200 | $3,442 | $200 | | Operating costs and expenses | $(973) | $(187) | $(3,300) | $(450) | | Operating income (loss) | $170 | $13 | $142 | $(250) | - Operating revenues for the three months ended June 30, 2025, included $0.9 million from the Honokeana Homes project and $0.2 million from a non-strategic parcel sale. For the six months, revenues primarily consisted of the Honokeana Homes project and two real estate sales[101] - The Kapalua Central Resort project, despite an expired sale agreement, continues to be marketed for sale or development, with an SMA permit extension application ongoing[102] Leasing Leasing operating revenues increased to $3.203 million for the three months and $6.421 million for the six months ended June 30, 2025, reflecting successful re-tenanting and market rate conversions, indicating a return of tourism post-Maui wildfires | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating revenues | $3,203 | $2,173 | $6,421 | $4,388 | | Operating costs and expenses | $(1,973) | $(1,122) | $(3,367) | $(2,114) | | Operating income | $1,230 | $1,051 | $3,054 | $2,274 | - The increase in leasing operating revenues reflects efforts to re-tenant, re-merchandise, and convert below-market leases to current market rates across commercial centers, indicating a return of tourism and visitor traffic towards pre-pandemic levels after the Maui wildfires[107] - Increased leasing operating costs are attributed to higher property maintenance, increased property management fees and commissions due to increased occupancy, and costs associated with improving tenant composition[108] Resort Amenities and Other Resort amenities operating revenues remained stable, with a steady intake of new memberships to the Kapalua Club, which was restructured in 2023 to better align club dues and expenses | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating revenues | $256 | $272 | $543 | $540 | | Operating costs and expenses | $(243) | $(305) | $(854) | $(741) | | Operating income (loss) | $13 | $(33) | $(311) | $(201) | - Operating revenues remained stable, with a steady intake of new memberships to the Kapalua Club, which was restructured in 2023 to better align club dues and expenses[111] General and Administrative Costs, Share-Based Compensation Total general and administrative costs and share-based compensation decreased to $(1.769) million for the three months ended June 30, 2025, primarily due to reduced share-based compensation as directors' stock options fully vested | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | General and administrative | $(1,027) | $(1,118) | $(2,514) | $(2,178) | | Share-based compensation | $(742) | $(1,623) | $(2,321) | $(2,582) | | Total | $(1,769) | $(2,741) | $(4,835) | $(4,760) | - The $0.3 million decrease in share-based compensation for the six months ended June 30, 2025, is attributed to directors' stock options that fully vested at the end of Q1 2025[114] - The company expects a decrease in future share-based compensation expenses as it does not anticipate using options as part of its compensation strategy going forward[117] Other Income Other income for the six months ended June 30, 2025, increased to $0.5 million, primarily from interest earned on savings, dividends from an investment bond fund, and Employee Retention Credit revenue | Metric | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :----------- | :--------------------------- | :--------------------------- | | Other income | $0.5 | $0.2 | - Other income for the six months ended June 30, 2025, was primarily from interest earned on savings, dividends from an investment bond fund, and Employee Retention Credit revenue[118] Liquidity and Capital Resources The company maintains liquidity through cash, investments, and an available revolving line of credit, actively seeking proposals for a new credit facility as the current one expires soon, with capital resources deemed sufficient for working capital and debt obligations Liquidity The company's liquidity includes $6.5 million in cash and cash equivalents, $0.5 million in investments, and a $12.0 million available credit facility, with discussions ongoing for a new facility as the current one matures in December 2025 | Item | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $6.5 | $6.8 | | Investments (bond fund) | $0.5 | $2.7 | | Available Credit Facility | $12.0 | $12.0 | - The company was in compliance with its Credit Facility covenants at June 30, 2025, and is in discussions with lenders for a new credit facility as the current one expires on December 30, 2025[122][123] Cash Flows For the six months ended June 30, 2025, net cash used in operating activities was $0.7 million, while investing activities provided $0.7 million, primarily due to debt security maturities, offsetting cash used in financing activities | Cash Flow Activity | 6 Months Ended June 30, 2025 (in millions) | 6 Months Ended June 30, 2024 (in millions) | | :-------------------------------------- | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $0.7 | $0.5 | | Net cash provided by (used in) investing activities | $0.7 | $(1.3) | | Net cash used in financing activities | $0.3 | $0.078 | - The increase in cash provided by investing activities was primarily due to $2.2 million in maturities of debt securities, with no new purchases, offset by $2.1 million in payments for property and deferred development costs[126] Capital Resources The company believes its cash, investment balances, cash from operations, and available credit facility will provide sufficient liquidity for working capital, contractual obligations, and debt service for the next twelve months and foreseeable longer term - The company believes its cash, investment balances, cash from operations, and available credit facility will provide sufficient liquidity for working capital, contractual obligations, and debt service for the next twelve months and foreseeable longer term[128] Critical Accounting Policies and Estimates There have been no material changes to the critical accounting policies and key estimates and assumptions disclosed in the Annual Report - There have been no material changes to the critical accounting policies and key estimates and assumptions disclosed in the Annual Report[129] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material exposure to market risks, specifically regarding changes in interest rates related to borrowing and investing activities, or foreign currency risks - The company has no material exposure to changes in interest rates related to borrowing and investing activities[130] - The company has no material exposure to foreign currency risks[130] Item 4. Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, and reported no significant changes in internal controls over financial reporting during the three months ended June 30, 2025 - The Principal Executive Officer and Principal Financial Officer concluded that disclosure controls and procedures were effective as of June 30, 2025[133] - There have been no significant changes in internal controls over financial reporting during the three months ended June 30, 2025[134] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 11 of the financial statements for detailed information regarding the company's legal proceedings, commitments, and contingencies - Information related to legal proceedings is detailed in Note 11, Commitments and Contingencies, to the unaudited condensed consolidated interim financial statements[136] Item 1A. Risk Factors The company directs readers to its Annual Report and this Quarterly Report for a comprehensive discussion of risk factors, confirming that there were no material changes to these risks during the six months ended June 30, 2025 - No material changes to the risk factors described in Part I, Item 1A, 'Risk Factors,' of the Annual Report occurred during the six months ended June 30, 2025[137] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents - Exhibits include certifications of the Principal Executive Officer and Principal Financial Officer (31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[144] Signature - The report was signed on August 14, 2025, by Wade K. Kodama, Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer)[148]