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Note 17 - Subsequent Events

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Subsequent Events [Text Block]

17.

SUBSEQUENT EVENTS

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 restricted share grants. The Equity Plan was amended in February 2023 to increase 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 stock that exceeded the 400,000 limit. In February 2024, Mr. Randle received 28,511 shares of restricted stock that exceeded the 400,000 limit. In addition, although grants to Mr. Case did not exceed the Equity Plan limit, he voluntarily opted to cancel options and restricted shares issued in 2023 amounting to 6,659 and 56,000 shares, respectively, and options and restricted shares issued in 2024 amounting to 3,124 and 56,000 shares, respectively. The cancellation of the options and restricted shares will result in recognizing the remaining unvested awards of options and restricted shares immediately. In the third quarter of 2024, it is anticipated that $631,000 will be recognized as expense due to the cancellations, $402,000 due to the cancellation of Mr. Case’s options and restricted shares and $229,000 due to the cancellation of Mr. Randle’s restricted shares.

On August 14, 2024 (the “Effective Date”), Maui Land & Pineapple Company, Inc., a Delaware corporation (“MLP” or “Company”), entered into that certain Purchase Sales Agreement (the “Purchase Agreement”) for the sale and purchase of land with Shawn Sims and/or his permitted assignees (the “Purchaser”), pursuant to which MLP agrees to sell to Purchaser and Purchaser agrees to purchase from MLP an 11.883-acre parcel of land, including the associated easements and infrastructure improvements, located in Piiholo, Maui, Hawaii (the “Property”) (the “Transaction”). The purchase price for the Property is $7,000,000 (the “Purchase Price”). Pursuant to the terms of the Purchase Agreement, within three business days from the Effective Date, Purchaser will make an initial cash deposit in the amount of $300,000 (the “Initial Deposit”) to escrow. In the event Purchaser exercises his right to extend the 30-day inspection period beginning on the Effective Date (the “Inspection Period”), Purchaser will make a second deposit in the amount of $100,000 (the “Conditional Deposit”) to escrow. Within two business days of the expiration or waiver of the Inspection Period, Purchaser will deposit an additional $300,000 (the “Final Deposit,” together with the Initial Deposit and the Conditional Deposit, the “Deposits”) to escrow. The Deposits will be held in escrow and shall be applied to the Purchase Price at closing. Any interest accrued on the Deposits will benefit Purchaser and be applied towards the Purchase Price. Purchaser shall deposit the remaining balance of the Purchase Price to escrow in immediately available funds not less than two business days prior to the closing. The closing shall occur on a mutually agreeable date no later than 30 days after the expiration of the Inspection Period (the “Closing Date”), provided that if Purchaser has not satisfied the conditions precedent to close as of the Closing Date, Purchaser may elect to extend the Closing Date by five business days after such conditions have been satisfied, but such extension may not be more than 60 days after the end of the inspection period. Closing costs associated with the Transaction will be prorated to both Company and Purchaser per the terms of the Purchase Agreement. Purchaser, in his sole discretion, shall have the right to cancel the Purchase Agreement at any time up until 5:00 pm Hawaii Standard Time on the last day of the Inspection Period by giving the Company written notice. In the event Purchaser terminates the Purchase Agreement, the Deposits, together with any interest earned, less any incurred escrow fees and expenses, shall be refunded to the Purchaser and released from all further obligations and liabilities. This Transaction aligns with the Company’s operational plan to sell non-strategic land parcels.