KANP Kaanapali Land LLC (PK)

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

[  X  ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

For the quarterly period ended June 30, 2023

 

or

 

[     ]       Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _______ to __________

 

Commission file 0-50273

 

KAANAPALI LAND, LLC

(Exact name of registrant as specified in its charter)

 

Delaware (State or other jurisdiction of incorporation or organization)	01-0731997 (I.R.S. Employer Identification No.)
900 N. Michigan Ave., Chicago, Illinois (Address of principal executive offices)	60611 (Zip Code)

 

Registrant's telephone number, including area code: 312-915-1987

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a shorter period that registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [ X ]    No [   ]

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [ X ]    No [   ]

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

	Large accelerated filer	[    ]		Accelerated filer	[     ]
	Non-accelerated filer	[ X ]		Smaller reporting company	[ X ]
				Emerging growth company	[     ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]    No [ X ]

 

As of August 14, 2023, the registrant had 1,792,613 Common Shares and 52,000 Class C Shares outstanding.

TABLE OF CONTENTS

 

 

Part I   FINANCIAL INFORMATION
Item 1.		Financial Statements	4
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.		Controls and Procedures	25
Part II  OTHER INFORMATION
Item 1.		Legal Proceedings	26
Item 1A.		Risk Factors	26
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.		Defaults Upon Senior Securities	26
Item 4.		Mine Safety Disclosures	27
Item 5.		Other Information	27
Item 6.		Exhibits	27
SIGNATURES			28

 

 

Part I.  Financial Information

     Item 1.   Financial Statements

 

KAANAPALI LAND, LLC

 

Condensed Consolidated Balance Sheets

 

June 30, 2023 and December 31, 2022

(Dollars in Thousands, except share data)

(Unaudited)

 

 

	June 30, 2023			December 31, 2022
Assets
Cash and cash equivalents	$	16,889		$	19,815
Property, net		59,209			58,988
Investments		19,618			19,115
Other assets		1,381			596
Total assets	$	97,097		$	98,514
Liabilities
Accounts payable and accrued expenses	$	329		$	643
Deposits and deferred gains		1,174			1,371
Deferred income taxes		10,513			9,322
Other liabilities		1,688			7,174
Total liabilities		13,704			18,510
Commitments and contingencies (Note 7)
Equity
Common equity, at 6/30/23 and 12/31/22   (Shares authorized – unlimited; shares issued and       outstanding – 1,792,613 common shares and       52,000 Class C shares)		--			--
Additional paid-in capital		5,471			5,471
Accumulated earnings		77,922			74,533
Total shareholders’ equity		83,393			80,004
Total liabilities and shareholders’ equity	$	97,097		$	98,514

 

 

 

 

  

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

KAANAPALI LAND, LLC

 

Condensed Consolidated Statements of Operations

 

Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)

(Dollars in Thousands, except per share data)

 

 

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenues:
Sales	$	1,147		$	1,244		$	2,300		$	7,252
Interest and other income		426			18			768			33
Total revenues		1,573			1,262			3,068			7,285
Cost and expenses:
Cost of sales		722			1,084			1,424			5,284
Selling, general and     administrative		(4,235)			1,297			(3,040)			(109)
Depreciation and     amortization		52			69			104			134
Total cost and expenses		(3,461)			2,450			(1,512)			5,309
Operating income (loss)     before income taxes		5,034			(1,188)			4,580			1,976
Income tax benefit (expense)		(1,309)			317			(1,191)			(529)
Net income (loss)		3,725			(871)			3,389			1,447
Less: Net income (loss)           attributable to           non controlling           interests		--			31			--			(58)
Net income (loss)           attributable to           shareholders	$	3,725		$	(902)		$	3,389		$	1,505
Net income (loss) per share   - basic and diluted	$	2.02		$	(0.49)		$	1.84		$	0.82

 

 

 

  

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

KAANAPALI LAND, LLC

 

Condensed Consolidated Statements of Comprehensive Income (Loss)

 

Three and Six Months Ended June 30, 2023 and 2022

(Unaudited)

(Dollars in Thousands)

 

 

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net income (loss)	$	3,725		$	(871)		$	3,389		$	1,447
Other comprehensive income:
Net unrealized (gains) losses      on pension plan assets		--			(4)			--			(21)
Other comprehensive income,   before tax		--			(4)			--			(21)
Income tax benefit (expense)   related to items of other   comprehensive income		--			3			--			7
Other comprehensive income,   net of tax		--			(1)			--			(14)
Comprehensive income (loss)		3,725			(872)			3,389			1,433
Comprehensive income (loss)   attributable to non controlling   interests		--			31			--			(58)
Comprehensive income (loss)   attributable to stockholders	$	3,725		$	(903)		$	3,389		$	1,491

 

 

 

 

 

 

 

  

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

KAANAPALI LAND, LLC

 

Condensed Consolidated Statements of Equity

 

Three and Six Months Ended June 30, 2023

(Unaudited)

(Dollars in Thousands)

 

 

 

		Common Equity			Additional Paid-In Capital			Accumulated (Deficit) Earnings			Total Shareholders’ Equity
Balance December 31, 2022		$	--		$	5,471		$	74,533		$	80,004
Net loss			--			--			(336)			(336)
Balance March 31, 2023			--			5,471			74,197			79,668
Net income			--			--			3,725			3,725
Balance June 30, 2023		$	--		$	5,471		$	77,922		$	83,393

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

 

KAANAPALI LAND, LLC

 

Condensed Consolidated Statements of Equity

 

Three and Six Months Ended June 30, 2022

(Unaudited)

(Dollars in Thousands)

 

 

 

		Common Equity			Additional Paid-In Capital			Accumu- lated (Deficit) Earnings			Accumu- lated Other Compre- hensive Income/ (Loss)			Total Share- holders’ Equity			Non Controlling Interests			Total Equity
Balance December 31, 2021		$	--		$	5,471		$	71,698		$	2,298		$	79,467		$	742		$	80,209
Effect of consolidat-   ing Kaanapali   Coffee Farms   Lot Owners’   Association			--			--			(15)			--			(15)			207			192
Other comprehensive   income, net of tax			--			--			--			(13)			(13)						(13)
Net income (loss)			--			--			2,407			--			2,407			(89)			2,318
Balance March 31, 2022			--			5,471			74,090			2,285			81,846			860			82,706
Effect of consolidat-   ing Kaanapali   Coffee Farms   Lot Owners’   Association			--			--			--			--			--			193			193
Other comprehensive   income, net of tax			--			--			--			(1)			(1)			--			(1)
Net income (loss)			--			--			(902)			--			(902)			31			(871)
Balance June 30, 2022		$	--		$	5,471		$	73,188		$	2,284		$	80,943		$	1,084		$	82,027

 

 

 

 

 

  

 

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

KAANAPALI LAND, LLC

 

Condensed Consolidated Statements of Cash Flows

 

Six Months Ended June 30, 2023 and 2022

(Unaudited)

(Dollars in Thousands)

 

 

 

	2023			2022
Net cash provided by (used in) operating activities	$	(1,963)		$	5,090
Net cash used in investing activities:
Property additions		(325)			(213)
Receivable due to sewer line installation		(638)			--
		(963)			(213)
Net cash provided by financing activities:
Contributions		--			385
		--			385
Net increase (decrease) in cash and cash equivalents		(2,926)			5,262
Cash and cash equivalents at beginning of period		19,815			17,837
Cash and cash equivalents at end of period	$	16,889		$	23,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the condensed consolidated financial statements.

 

KAANAPALI LAND, LLC

 

Notes to Condensed Consolidated Financial Statements

 

(Unaudited)

(Dollars in Thousands)

 

 

(1)  Summary of Significant Accounting Policies

 

Basis of Presentation

 

The accompanying condensed consolidated financial statements include the accounts of Kaanapali Land, LLC (“Kaanapali Land”) and all of its subsidiaries and its predecessors (collectively, the “Company”). Prior to July 1, 2022, the Kaanapali Coffee Farms Lot Owners’ Association (“LOA”) was consolidated into the Company’s consolidated financial statements and the interests of third-party owners of the lots in the Kaanapali Coffee Farms subdivision were reflected as equity including non controlling interests. The Company sold its last owned lot in the Kaanapali Coffee Farms subdivision in early 2022 and as a consequence, the Company elected to turn over control of the LOA board of directors to the third-party owners of the lots in the subdivision. An election for a new board of directors, comprised entirely of third-party lot owners, was held during June 2022 and the results of the election were announced July 1, 2022. Therefore, effective July 1, 2022, the Company deconsolidated the LOA due to the loss of control over the LOA and derecognized the assets, liabilities, equity (including the non controlling interests) and results of operations in its financial statements. The Company does not have any direct or indirect retained interest in the LOA. The Company currently has agreements with the LOA to farm coffee, perform common area maintenance services and provide delivery of non-potable water.

 

The Company's continuing operations are in two business segments - Agriculture and Property. The Agriculture segment primarily engages in farming, harvesting and milling operations relating to coffee orchards pursuant to farming agreements with the LOA and a related entity. The Company also cultivates, harvests and sells bananas and citrus fruits, and engages in certain ranching operations. The Property segment primarily develops land for sale and negotiates bulk sales of undeveloped land. The Property and Agriculture segments operate exclusively in the State of Hawaii.

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and therefore, should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). These unaudited condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the financial position and results of operations and cash flows for interim periods in accordance with U.S. GAAP.

 

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A description of the Company’s significant accounting policies is included in Note 1 to the Notes to the Consolidated Financial Statements included in its 2022 Form 10-K. Except as noted below, there were no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2023.

 

Property

 

The Company's significant property holdings are on the island of Maui and consist of approximately 3,900 acres, of which approximately 1,500 acres are classified as conservation land, which precludes development. The Company has determined, based on its current projections for the development and/or disposition of its property holdings, that the property holdings are not currently recorded in an amount in excess of proceeds that the Company expects that it will ultimately obtain from the operation and disposition thereof.

 

Inventory of land held for sale is carried at the lower of cost or fair market value, less costs to sell, which is based on current and foreseeable market conditions, discussions with real estate brokers and review of historical land sale activity fair value hierarchy (Levels 2 and 3). Land is currently utilized for commercial specialty coffee farming operations which also support the Company's land development program, as well as farming bananas, citrus and other farm products and ranching operations. Additionally, miscellaneous parcels of land have been leased or licensed to third parties on a short term basis.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be achieved for the full year ending December 31, 2023 or in any other future periods.

 

Cash and Cash Equivalents

 

The Company considers as cash equivalents all investments with maturities of three months or less when purchased. Included in this balance as of June 30, 2023 is a money market fund for $14,350 that is considered to be a fair value hierarchy Level 1 investment. The Company’s cash balances are maintained primarily in two financial institutions. Such balances significantly exceed the Federal Deposit Insurance Corporation insurance limits. Management does not believe the Company is exposed to significant risk of loss on cash and cash equivalents.

 

Subsequent Events

 

The Company has performed an evaluation of subsequent events from the date of the financial statements included in this quarterly report through the date of its filing with the Securities and Exchange Commission.

 

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Revenue Recognition

 

Revenue from real property sales is recognized at the time of closing when control of the property transfers to the customer. After closing of the sale transaction, the Company has no remaining performance obligation.

 

Other revenues are recognized when control of goods or services transfers to the customers, in the amount that the Company expects to receive for the transfer of goods or provision of services.

 

Revenue recognition standards require entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. The revenue recognition standards have implications for all revenues, excluding those that are under the specific scope of other accounting standards.

 

The Company’s revenues that were subject to revenue recognition standards were as follows (in thousands):

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Sales of real estate	$	--		$	--		$	--		$	4,750
Coffee and other sales		860			786			1,715			1,757
Total	$	860		$	786		$	1,715		$	6,507

 

The revenue recognition standards require the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (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.

 

Lease Accounting

 

The Company’s lease arrangements, both as lessor and as lessee, are short-term leases. The Company leases land to tenants under operating leases, and the Company leases property, primarily office and storage space, from lessors under operating leases. During the three and six months ended June 30, 2023, the Company recognized $287 and $585, respectively, and $275 and $537, respectively, during the three and six months ended June 30, 2022 of lease income, substantially comprised of non-variable lease payments. During the three and six months ended June 30, 2023, the Company recognized $26 and $49, respectively, and $15 and $34, respectively, during the three and six months ended June 30, 2022, respectively, of lease expense, substantially comprised of non-variable lease payments.

 

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Recently Issued Accounting Pronouncements

 

In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”. The amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments in this Update are effective for all entities upon issuance of this Update. While the Company is currently evaluating the effect that implementation of this update will have on its consolidated financial statements, no significant impact is anticipated.

 

(2)  Land Development

 

During the first quarter of 2006, the Company received final subdivision approval on an approximately 336 acre parcel in the region "mauka" (toward the mountains) from the main highway serving the area. This project, called Kaanapali Coffee Farms, originally consisted of 51 agricultural lots, offered to individual buyers. During the second quarter of 2021, the Company converted an approximately 55 acre cultural resources lot to an agricultural lot. The Company closed on the sale of this lot on March 22, 2022. The purchase price was $5,000, paid in cash at closing. The Company has sold all the lots at Kaanapali Coffee Farms.

 

In September 2014, Kaanapali Land Management Corp. (“KLMC”), pursuant to a property and option purchase agreement (“Purchase Agreement”) with an unrelated third party, closed on the sale of an approximately 14.9 acre parcel in West Maui. The purchase price was $3,300, paid in cash at closing. The agreement (as subsequently amended) commits KLMC to fund up to $583, depending on various factors, for off-site roadway, sewer and electrical improvements that will also provide service to other KLMC properties. KLMC may, at its discretion, design, construct, install, and complete all or portions of the off-site road, sewer and/or electrical improvements, in which case the developer shall pay to KLMC the total costs thereof, less the KLMC committed amount. In relation to such sewer line improvement, KLMC has entered into a contract for $1,070 to install such sewer line. KLMC has paid $845 on the contract which has been recorded as a receivable, less KLMC’s sewer line commitment of $208. In accordance with the Purchase Agreement, the receivable accrues interest of 6.5% and is secured by the 14.9 acre property. Certain other off-site construction has begun at the site. In conjunction with the Purchase Agreement, the Company retains certain approval rights relating to the uses and designs of the site to ensure the uses and designs are aligned with the Company's planned master development. If such uses result in a dispute with the developer of the site, such dispute could delay the development of the site. The 14.9 acre site is intended to be used for a critical access hospital, skilled nursing facility, assisted living facility, and independent living facility.

 

(3)  Mortgage Note Payable

 

Certain subsidiaries of Kaanapali Land are jointly indebted to Kaanapali Land pursuant to a certain Secured Promissory Note in the principal amount of $70,000, dated November 14, 2002, and due September 30, 2029, as extended. Such note had an outstanding balance of principal and accrued interest as of June 30, 2023 and December 31, 2022 of $90,378 and $90,203, respectively. The interest rate currently is 0.39% per annum and compounds semi-annually. The note, which is prepayable, is secured by substantially all of the remaining real property owned by such subsidiaries, pursuant to a certain Mortgage, Security Agreement and Financing Statement, dated as of November 14, 2002, and placed on record in December 2002. The note has been eliminated in the condensed consolidated financial statements because the obligors are consolidated subsidiaries of Kaanapali Land.

 

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(4)  Employee Benefit Plans and Investments

 

Prior to June 1, 2022, the Company participated in a defined benefit pension plan (the “Pension Plan”) that covers substantially all its eligible employees. The Pension Plan was sponsored and maintained by Kaanapali Land in conjunction with other plans providing benefits to employees of Kaanapali Land and its affiliates.

 

Pacific Trail Holdings LLC, the manager of the Company, adopted a plan to freeze the benefit accruals under and close participation in the Pension Plan and terminate the Pension Plan on June 1, 2022. Effective February 7, 2022, the fair value hierarchy Level 1 and Level 2 plan asset investments were reallocated to a money market fund. Benefit accruals were frozen on March 31, 2022. The Company paid lump sum benefits totaling approximately $420 to Pension Plan participants during October 2022, thereby settling all benefit Pension Plan liabilities. The Company’s former Pension Plan assets are approximately $19,620 and are included in Investments in the Company’s condensed consolidated balance sheet at June 30, 2023.

 

The Company currently expects to transfer during 2023 at least 25% of the remaining former Pension Plan assets to a qualified replacement plan (“QRP”) in which all of the participants in the terminated Pension Plan who are employed by the Company would become active participants in the QRP. The QRP is also expected to include the employees of certain affiliates of the Company. Thereafter, remaining assets of the terminated Pension Plan will revert to the Company. Under such circumstances, the Company will be subject to a 20% excise tax. There can be no assurances that the Company will be successful in executing such plan or that the Company will not be subject to additional taxes.

 

The components of the net periodic pension benefit (credit) included in selling, general and administrative in the Company’s condensed consolidated statements of operations are as follows (in thousands):

 

	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Service cost	$	--		$	101		$	--		$	210
Interest cost		--			1			--			2
Expected return on plan assets		--			(61)			--			(121)
Recognized net actuarial   (gain) loss		--			(4)			--			(9)
Curtailment (gain) loss		--			--			--			(12)
Net periodic pension cost   (credit)	$	--		$	37		$	--		$	70

 

 

The Company maintains a nonqualified deferred compensation arrangement (the "Rabbi Trust") which provides certain former directors of Amfac and their spouses with pension benefits. The deferred compensation liability of $329 is included in Other liabilities in the Company's condensed consolidated balance sheet as of June 30, 2023.

 

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(5)  Income Taxes

 

The statutes of limitations with respect to the Company's taxes for 2019 and more recent years remain open to examinations by tax authorities, subject to possible utilization of loss carryforwards from earlier years. Notwithstanding the foregoing, all net operating losses (“NOL”) generated and not yet utilized are subject to adjustment by the Internal Revenue Service (“IRS”). The Company believes adequate provisions for income tax have been recorded for all years, although there can be no assurance that such provisions will be adequate. To the extent that there is a shortfall for which the Company is liable, the Company’s results of operations may be affected adversely and materially.

 

The Tax Cuts and Jobs Act (the “Act”) is a comprehensive tax reform bill containing a number of other provisions that either currently or in the future could impact the Company, particularly the effect of certain limitations effective for the tax year 2018 and forward (prior losses remain subject to the prior 20 year carryover period) on the use of federal NOL carryforwards, which will generally be limited to being used to offset 80% of future annual taxable income.

 

(6)  Transactions with Affiliates

 

An affiliated insurance agency, JMB Insurance Agency, Inc., which has some degree of common ownership with the Company, earns insurance brokerage commissions in connection with providing the placement of insurance coverage for certain of the properties and operations of the Company. Commissions paid for the three and six months ended June 30, 2023 were $23 and $23, respectively, and $14 and $14 for the three and six months ended June 30, 2022, respectively.

 

The Company reimburses its affiliates for general overhead expense and for direct expenses incurred on its behalf, including salaries and salary-related expenses incurred in connection with the management of the Company's operations. Generally, the entity that employs the person providing the services receives the reimbursement. Substantially all of such reimbursable amounts were incurred by JMB Realty Corporation or its affiliates, 900FMS, LLC, 900Work, LLC, and JMB Financial Advisors, LLC, all of which have some degree of common ownership with the Company. The total costs recorded in cost of sales and selling, general and administrative expenses in the consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 were $302 and $565, respectively, and $370 and $740, respectively, of which $117 was unpaid as of June 30, 2023.

 

The Company had derived revenue from farming and common area maintenance services and for providing non-potable water to the LOA. The LOA is the association of the lot owners of the Kaanapali Coffee Farms. Effective July 1, 2022, the LOA is no longer an affiliate of the Company due to relinquishment of control over the LOA. The revenues for the three and six months ended June 30, 2022 were $303 and $616, respectively. Such revenue is recognized in the Agriculture Segment as disclosed in Note 9, Business Segment Information. Through June 30, 2022, the revenue amounts have been eliminated in the consolidated financial statements.

 

(7)  Commitments and Contingencies

 

Material legal proceedings of the Company are described below. Unless otherwise noted, the parties adverse to the Company in the legal proceedings described below have not made a claim for damages in a liquidated amount and/or the Company believes that it would be speculative to attempt to determine the Company's exposure relative thereto, and as a consequence believes that an estimate of the range of potential loss cannot be made.

 

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Under an insurance settlement the Company reached with Fireman’s Fund as a result of a complaint the Company filed against Fireman’s Fund in 2015, Fireman’s Fund paid $6,800 into an escrow during the first quarter of 2022 that was used to fund a settlement amount pursuant to a Consent Decree (described below) which was entered into with various federal agencies. That Consent Decree, entered by United States District Court for the District of Hawaii (the “Court”), and as more fully described below, resolved certain environmental claims against the Company with respect to the former mixing site on Waipio Peninsula on Oahu in Hawaii (the “Mixing Site”). After the Consent Decree was entered and finally approved by the Court in the form initially submitted by the Company and the federal government, the escrowed funds plus interest were paid to the Environmental Protection Agency on March 3, 2022 to fund the settlement that is the subject of the Consent Decree.

 

On April 16, 2021, the U.S. Department of Justice and the U.S. Environmental Protection Agency, on behalf of various federal agencies of the United States of America, executed a Consent Decree with Kaanapali Land, LLC, a Delaware limited liability company (the “Company”) that, if entered by the U.S. District Court sitting in the District of Hawaii, United States of America v. Kaanapali Land, and Oahu Sugar Company, LLC Case No. 1:21-CV-00190, resolved the U.S. federal government’s current environmental claims against the Company with respect to contamination at the former mixing site on Waipio Peninsula on Oahu in Hawaii that had been leased by Oahu Sugar Company LLC, a former subsidiary of the Company. In return for payments by the Company totaling $7,500, the Consent Decree resolved liability asserted by the U.S. government against the Company under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) as well as under the Clean Water Act, both for response costs (those costs expended for investigation and cleanup) and for natural resource damages. The U.S. District Court in Hawaii entered an Order approving the Consent Decree on February 11, 2022 and payment of the settlement amount was received by the government on March 3, 2022.

 

A subsidiary of the Company, D/C Distribution Corporation (“D/C”), filed a petition for liquidation under Chapter 7 of the Bankruptcy Code in July 2007. During the pendency of the bankruptcy case, D/C was not under control of the Company.

 

At the time of the filing of the bankruptcy petition, Kaanapali Land, as successor by merger to other entities, and D/C had been named as defendants in personal injury actions allegedly based on exposure to asbestos. While there were relatively few cases that name Kaanapali Land, there were a substantial number of cases that were pending against D/C on the U.S. mainland (primarily in California). Cases against Kaanapali Land (hereafter, “Kaanapali Land asbestos cases”) were allegedly based on its prior business operations in Hawaii and cases against D/C were allegedly based on sale of asbestos-containing products by D/C's prior distribution business operations primarily in California. Each entity defending these cases believes that it has meritorious defenses against these actions, but can give no assurances as to the ultimate outcome of these cases. The defense of these cases had a material adverse effect on the financial condition of D/C as it has been forced to file a voluntary petition for liquidation as discussed below. Kaanapali Land does not believe that it has liability, directly or indirectly, for D/C's obligations in those cases. Kaanapali Land does not presently believe that the cases in which it is named will result in any material liability to Kaanapali Land; however, there can be no assurance in that regard.

 

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On February 12, 2014, counsel for Fireman’s Fund, the carrier that had been paying defense costs and settlements for the Kaanapali Land asbestos cases, stated that it would no longer pay settlements or judgments in the Kaanapali Land asbestos cases due to then pending D/C and Oahu Sugar bankruptcies. In its communications with Kaanapali Land, Fireman’s Fund expressed its view that the automatic stay in effect in the D/C bankruptcy case barred Fireman’s Fund from making any payments to resolve the Kaanapali Land asbestos claims because D/C Distribution was also alleging a right to coverage under those policies for asbestos claims against it. However, in the interim, Fireman’s Fund advised that it intended to continue to pay defense costs for those cases, subject to whatever reservations of rights that might be in effect and subject further to the policy terms. Fireman’s Fund also indicated that, to the extent that Kaanapali Land cooperated with Fireman’s Fund in addressing settlement of the Kaanapali Land asbestos cases through coordination with its adjusters, it was Fireman’s Fund’s intention to reimburse any such payments by Kaanapali Land, subject, among other things, to the terms of any lift-stay order, the limits and other terms and conditions of the policies, and prior approval of the settlements. Kaanapali Land and Fireman’s Fund entered into a settlement agreement on or about November 24, 2021 whereby Fireman’s Fund paid $2,441 for certain listed Kaanapali Land asbestos cases upon a Final Order of the D/C bankruptcy court lifting the automatic stay to allow the payments. The D/C court issued the lift-stay order on March 1, 2022. On April 12, 2022, the Company received $2,441 as reimbursement for the various settlements Kaanapali made that were subject to the lift-stay order of March 1, 2022. The $2,441 was included as a reduction of Selling, general and administrative expenses on the Company’s consolidated statement of operations for the three months ended March 31, 2022.

 

Because D/C was substantially without assets and was unable to obtain additional sources of capital to satisfy its liabilities, D/C filed with the United States Bankruptcy Court, Northern District of Illinois, its voluntary petition for liquidation under Chapter 7 of Title 11, United States Bankruptcy Code during July 2007, Case No. 07-12776. Such filing was not expected to have a material adverse effect on the Company as D/C was substantially without assets at the time of the filing. Kaanapali Land filed claims in the D/C bankruptcy that aggregated approximately $26,800, relating to both secured and unsecured intercompany debts owed by D/C to Kaanapali Land. In addition, a personal injury law firm based in San Francisco that represents clients with asbestos-related claims filed proofs of claim on behalf of approximately two thousand claimants.

 

On January 21, 2020, certain asbestos claimants filed a Stay Relief Motion in the Bankruptcy Court for the Northern District of Illinois, Eastern Division, Case No. 07-12776 (“motion to lift stay”) in connection with the D/C proceeding. The motion sought the entry of an order, among other things, modifying the automatic stay in the D/C bankruptcy to permit those claimants to prosecute various lawsuits in state courts against D/C and to recover on any judgment or settlement solely from any available insurance coverage. Various oppositions to the motion to lift stay were filed, and the matter was heard and taken under advisement in April 2020. On July 21, 2020, the bankruptcy court issued an order granting the motion to lift stay to permit the movants to pursue their claims and to recover any judgment or settlement from and to the extent of any available insurance coverage of D/C only.

 

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Certain asbestos-related proofs claims in the bankruptcy case have been withdrawn in connection with closing. A court hearing was held on March 29, 2023 in which the court awarded the trustee’s compensation and expenses and therefore D/C no longer has any assets. On June 6, 2023, the bankruptcy trustee filed a final account and application to close the D/C bankruptcy and on June 14, 2023, the D/C bankruptcy court closed the case and the trustee was discharged. Due to the closing of the case, the Company derecognized a related contingent liability. The derecognition of the contingent liability is included as a reduction of Selling, general and administrative expenses and resulted in a credit in expenses on the Company’s consolidated statement of operations for the three and six months ended June 30, 2023. However, personal injury claimants have asserted, and may in the future assert, asbestos-related claims against D/C.

 

The Company has received notice from Hawaii’s Department of Land and Natural Resources (“DNLR”) that DNLR on a periodic basis would inspect all significant dams and reservoirs in Hawaii, including those maintained by the Company on Maui in connection with its agricultural operations. A series of such inspections have taken place over the period from 2006 through the most recent inspections that occurred in April 2022. To date, the DLNR has cited certain deficiencies concerning two of the Company’s reservoirs relating to dam and reservoir safety standards established by the State of Hawaii. These deficiencies include, among other things, vegetative overgrowth, erosion of slopes, uncertainty of inflow control, spillway capacity, and freeboard, and uncertainty of structural stability under certain loading and seismic conditions. The Company has taken certain corrective actions, including lowering the reservoir operating level, as well as updating important plans to address emergency events and basic operations and maintenance. In 2018, the Company contracted with an engineering firm to develop plans to address certain DLNR cited deficiencies on one of the Company’s reservoirs. Remediation plans for addressing all deficiencies have been submitted to DLNR. In 2012, the State of Hawaii issued new Hawaii Administrative Rules for Dams and Reservoirs which require dam owners to obtain from DLNR Certificates of Impoundment (“permits”) to operate and maintain dams or reservoirs. Obtaining such permits requires owners to completely resolve all cited deficiencies. Therefore, the process may involve further analysis of dam and reservoir safety requirements, which will involve continuing engagement with specialized engineering consultants, and ultimately could result in significant and costly improvements which may be material to the Company.

 

The DLNR categorizes the reservoirs as "high hazard" under State of Hawaii Administrative Rules and State Statutes concerning dam and reservoir safety. This classification, which bears upon government oversight and reporting requirements, may increase the cost of managing and maintaining these reservoirs in a material manner. The Company does not believe that this classification is warranted for either of these reservoirs and has initiated a dialogue with DLNR in that regard. In April 2008, the Company received further correspondence from DLNR that included the assessment by their consultants of the potential losses that result from the failure of these reservoirs. In April 2009, the Company filed a written response to DLNR to correct certain factual errors in its report and to request further analysis on whether such "high hazard" classifications are warranted. It is unlikely that the “high hazard” designation will be changed.

 

Other than as described above, the Company is not involved in any material pending legal proceedings, other than ordinary routine litigation incidental to its business. The Company and/or certain of its affiliates have been named as defendants in several pending lawsuits. While it is impossible to predict the outcome of such routine litigation that is now pending (or threatened) and for which the potential liability is not covered by insurance, the Company is of the opinion that the ultimate liability from any of this litigation will not materially adversely affect the Company's consolidated results of operations or its financial condition.

 

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KLMC is a party to an agreement with the State of Hawaii for the development of the Lahaina Bypass Highway. An approximately 2.4 mile portion of this two lane state highway has been completed. Construction to extend the southern terminus was completed mid-2018. The northern portion of the Lahaina Bypass Highway, which extends to KLMC’s lands, is in the early stage of planning. Under certain circumstances, which have not yet occurred, KLMC remains committed for approximately $1,100 of various future costs relating to the planning and design of the uncompleted portion of the Lahaina Bypass Highway. Under certain conditions, which have not yet been met, KLMC has agreed to contribute an amount not exceeding $6,700 toward construction costs. Any such amount contributed would be reduced by the value of KLMC’s land actually contributed to the State for the Lahaina Bypass Highway.

 

These potential commitments have not been reflected in the accompanying condensed consolidated financial statements. While the completion of the Lahaina Bypass Highway would add value to KLMC’s lands north of the town of Lahaina, there can be no assurance that it will be completed or when any future phases will be undertaken.

 

(8)  Calculation of Net Income (Loss) Per Share

 

The following tables set forth the computation of net loss per share - basic and diluted:

	Three Months Ended June 30,						Six Months Ended June 30,
	(Amounts in thousands, except per share amounts)
	2023			2022			2023			2022
Numerator:
Net income (loss)	$	3,725		$	(871)		$	3,389		$	1,447
Less: Net income (loss) attributable   to non controlling interests		--			31			--			(58)
Net income (loss) attributable to   stockholders	$	3,725		$	(902)		$	3,389		$	1,505
Denominator:
Number of weighted   average shares outstanding
-  basic and diluted		1,845			1,845			1,845			1,845
Net income (loss) per share,
attributable to   Kaanapali Land   -  basic and diluted	$	2.02		$	(0.49)		$	1.84		$	0.82

 

(9)  Business Segment Information

 

As described in Note 1, the Company operates in two business segments. Total revenues and operating profit by business segment are presented in the tables below.

 

Total revenues by business segment includes primarily (i) sales, all of which are to unaffiliated customers, and (ii) interest income that is earned from outside sources on assets which are included in the individual industry segment's identifiable assets.

 

Operating income (loss) is comprised of total revenue less cost of sales and operating expenses. In computing operating income (loss), none of the following items have been added or deducted: general corporate revenues and expenses, interest expense and income taxes.

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	Three Months Ended June 30, (in thousands)						Six Months Ended June 30, (in thousands)
	2023			2022			2023			2022
Revenues:
Property	$	107		$	81		$	299		$	4,887
Agriculture		1,050			1,177			2,064			2,394
Corporate		416			4			705			4
	$	1,573		$	1,262		$	3,068		$	7,285
Operating income (loss):
Property	$	(381)		$	(561)		$	(761)		$	611
Agriculture		215			269			363			519
Operating income (loss)		(166)			(292)			(398)			1,130
Corporate		5,200			(896)			4,978			846
Operating income (loss)   before income taxes	$	5,034		$	(1,188)		$	4,580		$	1,976

  

The Company’s Property segment consists primarily of revenue received from land sales and lease and licensing agreements.

 

The Company’s Agriculture segment consists primarily of coffee operations and licensing agreements.

 

The Company’s Corporate segment consists primarily of interest earned on investments.

 

The Company is exploring alternative agricultural operations, but there can be no assurance that replacement operations at any level will result.

 

(10) Subsequent Events

 

Beginning on August 8, 2023, a wildfire occurred due east of historic Lahaina town in Maui. The fire spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused multiple fatalities, widespread damage to Lahaina town and the surrounding area including the Company’s 19-acre Pioneer Mill site. The Company’s offices and coffee mill are located on the site as well as various other structures and a building which is leased to an unrelated third party and used to operate a coffee store. The Company also utilized portions of the property for short term license agreements with third parties that generates income for the Company. Although no employees were injured in the fire, the Company’s offices and coffee store building were destroyed. Additionally, it appears that most of the personal property of the licensees’ was destroyed and the coffee mill was severely damaged if not destroyed. The widespread destruction is likely to cause disruptions in the Company’s development plans, and the damage to the coffee mill will likely cause a delay or prevent the Company from harvesting the current year coffee crop. It is also likely that the Maui economy will be adversely impacted by the devastation caused by the fires in Lahaina and will likely have a negative impact on the tourism industry in west Maui. The Company continues to evaluate the extent of the damage to its property and equipment and has initiated claims with its insurance carriers. There can be no assurance that the Company’s insurance coverage will fully compensate the Company for its losses incurred in connection with the fire and related devastation, including the replacement cost of the structures and equipment lost in the fire, the loss in revenue from the lack of coffee sales, or the loss of income from the licensees. The Company could experience losses in excess of our insured limits, and further, claims for certain losses could be denied or subject to deductibles or exclusions under our insurance policies.  

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    Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

General

 

In addition to historical information, this report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations about its businesses and the markets in which the Company operates. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual operating results may be affected by various factors including, without limitation, natural events, including the Lahaina wildfire discussed below, the effect of geopolitical, economic and market conditions in Hawaii and globally, including continued increases in the rate of inflation, slower growth or recession, changes to fiscal and monetary policy, higher interest rates and currency fluctuations, pressure on the global banking system, competitive market conditions, uncertainties and costs related to the imposition of conditions on receipt of governmental approvals and costs of material and labor, actual versus projected timing of events, and the factors described in Part I, Item 1A of the Company’s 2022 Form 10-K, this report and any other periodic reports the Company files with the Securities and Exchange Commission, all of which may cause such actual results to differ materially from what is expressed or forecast in this report.

 

Lahaina Wildfire

 

Beginning on August 8, 2023, a wildfire occurred due east of historic Lahaina town in Maui. The fire spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused multiple fatalities, widespread damage to Lahaina town and the surrounding area including the Company’s 19-acre Pioneer Mill site. The Company’s offices and coffee mill are located on the site as well as various other structures and a building which is leased to an unrelated third party and used to operate a coffee store. The Company also utilized portions of the property for short term license agreements with third parties that generates income for the Company. Although no employees were injured in the fire, the Company’s offices and coffee store building were destroyed. Additionally, it appears that most of the personal property of the licensees’ was destroyed and the coffee mill was severely damaged if not destroyed. The widespread destruction is likely to cause disruptions in the Company’s development plans, and the damage to the coffee mill will likely cause a delay or prevent the Company from harvesting the current year coffee crop. It is also likely that the Maui economy will be adversely impacted by the devastation caused by the fires in Lahaina and will likely have a negative impact on the tourism industry in west Maui. The Company continues to evaluate the extent of the damage to its property and equipment and has initiated claims with its insurance carriers. There can be no assurance that the Company’s insurance coverage will fully compensate the Company for its losses incurred in connection with the fire and related devastation, including the replacement cost of the structures and equipment lost in the fire, the loss in revenue from the lack of coffee sales, or the loss of income from the licensees. The Company could experience losses in excess of our insured limits, and further, claims for certain losses could be denied or subject to deductibles or exclusions under our insurance policies.

  

By letters dated October 28, 2022, the State of Hawaii Commission on Water Resource Management (“CWRM”) officially designated all six Aquifer System Areas of the Lahaina Aquifer Sector, Maui, as Ground Water Management Areas, as of August 6, 2022. CWRM notified the Company that by August 5, 2023, the Company would need to apply for ground and surface water use permits to continue the Company’s use of certain wells that are integral to the Company’s entire operations. The Company has submitted such applications for permits. The permits, when or if granted and subject to various conditions, would preserve the Company’s existing water uses as of August 6, 2022. The Company cannot provide any assurances that CWRM will approve such permit applications for the amounts of water the Company seeks or impose conditions on such use that might affect the Company’s operations. If CWRM should fail to approve the Company’s water requests or impose onerous conditions on its use, CWRM’s actions could delay the Company’s development in substantial and material respects and affect the Company’s operations and finances. Further, in the event permits adequate to the Company’s plans are not received timely or at all, there could be negative impacts on the west Maui real estate market as a whole and on the development and sale of the Company’s lands on the Island of Maui, thereby materially and adversely affecting the Company’s operations, land sales, land values, results, and financial position.

 

By letter dated March 13, 2023, CWRM provided the Company a notice of alleged water violation covering the metering and monitoring of certain designated areas with the Honokowai aquifer and hydrologic unit, as well as certain waste conditions CWRM allegedly observed on prior investigations of those certain areas. The Company has engaged with CWRM to address the alleged violations and to seek clarification of the issues. While the Company does not believe that such issues, when and if addressed by the Company will prove material in cost, there can be no assurances of same.

 

The Company’s former Pension Plan (the “Pension Plan”) assets are approximately $20 million at June 30, 2023. On January 15, 2022, Pacific Trail Holdings LLC, the manager of the Company, adopted a plan to freeze the benefit accruals under and close participation in the Pension Plan and terminate the Pension Plan on or about June 1, 2022. Effective February 7, 2022, the fair value hierarchy Level 1 and Level 2 Pension Plan asset investments were reallocated to a money market fund. Benefit accruals were frozen on March 31, 2022. The Company paid lump sum benefits totaling approximately $0.42 million to Pension Plan participants during October 2022, thereby settling all Pension Plan liabilities.

 

The Company currently expects to transfer during 2023 at least 25% of the remaining former Pension Plan assets to a qualified replacement plan (“QRP”) in which all of the participants in the terminated Pension Plan who are employed by the Company would become active participants in the QRP. The QRP is also expected to include the employees of certain affiliates of the Company. Thereafter, remaining assets of the terminated Pension Plan will revert to the Company. Under such circumstances, the Company will be subject to a 20% excise tax. There can be no assurances that the Company will be successful in executing such plan or that the Company will not be subject to additional taxes.

 

The primary business of Kaanapali Land is the investment in and development of the Company's assets on the Island of Maui. The various development plans will take many years at significant expense to fully implement. Proceeds from land sales and the planned distribution of surplus Pension Plan assets are the Company's only source of significant cash proceeds and the Company's ability to meet its liquidity needs is dependent on the timing and amount of such proceeds.

 

The Company's operations have in recent periods been primarily reliant upon the net proceeds of sales of developed and undeveloped land parcels.

 

 

Liquidity and Capital Resources

 

The Company had cash and cash equivalents of approximately $17 million and $20 million as of June 30, 2023 and December 31, 2022, respectively, which is available for, among other things, working capital requirements, including future operating expenses, and the Company's obligations for engineering, planning, regulatory and development costs, drainage and utilities, environmental remediation costs on existing and former properties, potential liabilities resulting from tax audits, and existing and possible future litigation. To the extent the Company is not delayed by certain regulatory agencies, the Company expects the distribution of Pension Plan assets to enhance the Company’s liquidity. The Company does not anticipate making any distributions for the foreseeable future.

 

Although the Company believes that it has sufficient liquidity to fund its operations and capital needs over the near term, should the Company be unable to satisfy its liquidity requirements from its existing resources and future property sales, it will likely pursue alternate financing arrangements. However it cannot be determined at this time what, if any, financing alternatives may be available and at what cost.

 

Cash Flows

Net cash used in operating activities for the six months ended June 30, 2023 was approximately $2 million and was primarily due to working capital requirements. Net cash flows used in investing activities for the six months ended June 30, 2023 were approximately $1 million and was due to the cost of installation of a sewer line, as well as, costs of project planning and engineering, primarily relating to KCF Mauka and Puukolli Village Mauka.

 

Land Development

 

In September 2014, Kaanapali Land Management Corp. (“KLMC”), pursuant to a property and option purchase agreement (“Purchase Agreement”) with an unrelated third party, closed on the sale of an approximately 14.9 acre parcel in West Maui. The purchase price was $3.3 million, paid in cash at closing. The agreement (as subsequently amended) commits KLMC to fund up to $0.6 million, depending on various factors, for off-site roadway, sewer and electrical improvements that will also provide service to other KLMC properties. KLMC may, at its discretion, design, construct, install, and complete all or portions of the off-site road, sewer and/or electrical improvements, in which case the developer shall pay to KLMC the total costs thereof, less the KLMC committed amount. In relation to such sewer line improvement, KLMC has entered into a contract for $1.1 million to install such sewer line. KLMC has paid $0.8 million on the contract which has been recorded as a receivable, less KLMC’s sewer line commitment of $0.2 million. In accordance with the Purchase Agreement, the receivable accrues interest of 6.5% and is secured by the 14.9 acre property. Certain other offsite construction has begun at the site. In conjunction with the Purchase Agreement, the Company retains certain approval rights relating to the uses and designs of the site to ensure the uses and designs are aligned with the Company's planned master development. If such uses result in a dispute with the developer of the site, such dispute could delay the development of the site. The 14.9 acre site is intended to be used for a critical access hospital, skilled nursing facility, assisted living facility, and independent living facility.

 

 

The Company is in the planning stages for the development of a 295-acre parcel in the region mauka of Kaanapali Coffee Farms (“KCF Mauka”). The parcel is to be comprised of 61 agricultural lots that will be offered to individual buyers. The Company expects to develop the parcel in phases and all phases have been submitted to the County of Maui (the “County”) for subdivision approval. The Company has been working with the County to resolve certain of the County’s comments relating to the subdivision. The Company’s understanding is that all outstanding comments from the County have been resolved verbally with County staff. The final approval letter has been pending and additional efforts are being made to secure the approval. Upon final subdivision approval and receipt of final plat of the first phase from the County, which requires a bond in the amount of the cost to develop the first phase, the Company can pre-sell the undeveloped lots in the first phase. The Company expects to market the lots in the first phase upon receiving final approvals from the County, subject to various contingencies, including, but not limited to, governmental and market factors and the availability of a bond to secure the first phase of the development. Therefore, there can be no assurance the Company will be able to meet such timeline, that the subdivision will ultimately be approved or that the lots will sell for prices deemed advantageous by the Company.

 

The Company is in the planning stages for the development of a 241-acre residential development site in the region south of Kaanapali Coffee Farms known as Puukolii Village. The conceptual master plan is comprised of 20 developable parcels planned for 940 units including a mix of affordable and market priced homes, both single and multi-family, mixed use commercial, parks, school, and community facilities. Puukolii Village is fully entitled. In conjunction with the potential development of Puukolii Village and in coordination with the possible development by an unrelated third party of the 14.9 acre site to be used for a critical access hospital, as noted above, the Company entered into a contract to install a sewer line from the Puukolii Village site to the critical care hospital site. The developer of the critical access hospital site is obligated to share in the sewer line cost for the portion of the sewer line fronting the critical care hospital site (see discussion above).

  

Comparison of Results of Operations

 

Reference is made to the footnotes to the financial statements for additional discussion of items addressing comparability between years.

 

The decrease in other liabilities at June 30, 2023 as compared to December 31, 2022 is primarily due to the derecognition of a contingent liability related to the D/C bankruptcy case.

 

The increase in interest and other income for the three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022 is primarily due to market value adjustments related to investments.

 

The decrease in sales and the related decrease in costs of sales for the six months ended June 30, 2023 as compared to the six months ended June 30, 2022 is primarily due to the sale of a lot during the first quarter 2022.

 

The decrease in selling, general and administrative expenses for the three and six months ended June 30, 2023 as compared to the three and six months ended June 30, 2022 is due to the derecognition of a contingent liability related to the D/C bankruptcy case during second quarter 2023 offset by the insurance recoveries related to asbestos claims during the first quarter 2022.

 

See also notes to the condensed consolidated financial statements for additional discussion of items addressing comparability between the three and six months ended June 30, 2023 and 2022.

 

 

 

Inflation

 

High rates of inflation adversely affect real estate development generally because of their impact on interest rates. High interest rates not only increase the cost of borrowed funds to the Company, but can also have a significant effect on the affordability of permanent mortgage financing to prospective purchasers. However, high rates of inflation may permit the Company to increase the prices that it charges in connection with land sales, subject to a slowdown in sales and increase in home construction costs and to general economic conditions affecting the real estate industry and local market factors.

 

Critical Accounting Estimates

 

The discussion and analysis of the Company's financial condition and results of operations are based upon the Company's unaudited condensed consolidated interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these unaudited interim financial statements requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates are based on historical experience and on various other assumptions that management believes are reasonable under the circumstances; additionally management evaluates these results on an on-going basis. Management's estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Different estimates could be made under different assumptions or conditions, and in any event, actual results may differ from the estimates. The impact of a change in these estimates, assumptions, and judgments could materially affect the amounts reported in the Company’s consolidated financial statements.

 

Certain accounting policies involve significant judgements and estimates by management, and the Company considers these accounting policies to be critical accounting policies. There have been no material changes to the critical accounting polices disclosed in 2022 Form 10-K, except as described in Note 1 to the condensed consolidated financial statements.

 

Recently Adopted Accounting Pronouncements

 

For a description of recently issued accounting pronouncements, see Note 1 to the condensed consolidated financial statements.

 

 

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable as the Company is a smaller reporting company.

 

Item 4.  Controls and Procedures

 

Disclosure controls and procedures. The principal executive officer/principal financial officer of the Company have evaluated the effectiveness of the Company's disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") as of the end of the period covered by this report. Based on such evaluation, the principal executive officer/principal financial officer has concluded that the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed was recorded, processed, summarized and reported within the time periods specified in the applicable rules and form of the Securities and Exchange Commission. 

 

 

Internal control over financial reporting. There have not been any changes in the Company's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

 

 

Part II.  Other Information

 

Item 1.  Legal Proceedings

 

The information set forth under “Commitments and Contingencies” in Note 7 of the Notes to the condensed consolidated financial statements, included in Part I, Item 1 of this report is incorporated herein by reference.

 

Item 1A.  Risk Factors

 

In addition to the other information set up in this Quarterly Report on Form 10-Q, you should consider the factors discussed in Part 1, Item 1A of our 2022 Annual Report on Form 10-K. Except as set forth below, there have been no material changes in our risk factors from those disclosed in our 2022 Form 10-K.

 

Beginning on August 8, 2023, a wildfire occurred due east of historic Lahaina town in Maui. The fire spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused multiple fatalities, widespread damage to Lahaina town and the surrounding area including the Company’s 19-acre Pioneer Mill site. The Company’s offices and coffee mill are located on the site as well as various other structures and a building which is leased to an unrelated third party and used to operate a coffee store. The Company also utilized portions of the property for short term license agreements with third parties that generates income for the Company. Although no employees were injured in the fire, the Company’s offices and coffee store building were destroyed. Additionally, it appears that most of the personal property of the licensees’ was destroyed and the coffee mill was severely damaged if not destroyed. The widespread destruction is likely to cause disruptions in the Company’s development plans, and the damage to the coffee mill will likely cause a delay or prevent the Company from harvesting the current year coffee crop. It is also likely that the Maui economy will be adversely impacted by the devastation caused by the fires in Lahaina and will likely have a negative impact on the tourism industry in west Maui. The Company continues to evaluate the extent of the damage to its property and equipment and has initiated claims with its insurance carriers. There can be no assurance that the Company’s insurance coverage will fully compensate the Company for its losses incurred in connection with the fire and related devastation, including the replacement cost of the structures and equipment lost in the fire, the loss in revenue from the lack of coffee sales, or the loss of income from the licensees. The Company could experience losses in excess of our insured limits, and further, claims for certain losses could be denied or subject to deductibles or exclusions under our insurance policies.

 

  

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

 

Item 3.       Defaults Upon Senior Securities

 

None.

 

 

  

Item 4.       Mine Safety Disclosures

 

Not applicable.

 

 

Item 5. Other Information

 

None.

 

 

Item 6.  Exhibits

 

		3.1	Amended and Restated Limited Liability Company Agreement of Kaanapali Land, LLC dated November 14, 2002 filed as an exhibit to the Company's report on Form 10 filed May 1, 2003 and incorporated by reference herein.
		3.2	Amendment to the Amended and Restated Limited Company Agreement of Kaanapali Land, LLC dated November 14, 2002 filed as an exhibit to the Company's report on Form 8-K filed April 21, 2008 and incorporated by reference herein.
		31.1	Certification of the Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) (furnished herewith).
		32.1	Certification of the Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and 18 U.S.C. 1350 (furnished herewith).
		101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
		101.SCH	XBRL Taxonomy Extension Schema Document.
		101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
		101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
		101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
		101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
		104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

	KAANAPALI LAND, LLC
	By:	Pacific Trail Holdings, LLC (sole member)
		/s/ Richard Helland
	By:	Richard Helland, Vice President
	Date:	August 14, 2023
		/s/ Richard Helland
	By:	Richard Helland, Vice President and Principal Accounting Officer
	Date:	August 14, 2023

 

 

28

Exhibit 31.1

 

 

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to Exchange Act Rule 13a-14(a) / 15d-14(a) as Adopted

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

 

I, Stephen A. Lovelette, certify that:

 

1.	I have reviewed this quarterly report on Form 10-Q for the period ending June 30, 2023 of Kaanapali Land, LLC;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

 

 

	d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

 

 

Date:	August 14, 2023
			/s/ Stephen A. Lovelette
			President, Chief Executive Officer and Chief Financial Officer

 

 

Exhibit 32.1

 

 

Certification of Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to the Sarbanes-Oxley Act of 2002

 

 

The following statement is provided by the undersigned with respect to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law:

 

The undersigned certifies that the foregoing Report on Form 10-Q fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m) and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Kaanapali Land, LLC.

 

 

Date:   August 14, 2023

 

 

 

By:	/s/ Stephen A. Lovelette
	Stephen A. Lovelette President, Chief Executive Officer and Chief Financial Officer

 

 

v3.23.2

Cover - shares	6 Months Ended
	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	0-50273
Entity Registrant Name	KAANAPALI LAND, LLC
Entity Central Index Key	0001230058
Entity Tax Identification Number	01-0731997
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	900 N. Michigan Ave.
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60611
City Area Code	312
Local Phone Number	915-1987
Title of 12(b) Security	N/A
Trading Symbol	N/A
Security Exchange Name	NONE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		1,792,613

v3.23.2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 16,889	$ 19,815
Property, net	59,209	58,988
Investments	19,618	19,115
Other assets	1,381	596
Total assets	97,097	98,514
Liabilities
Accounts payable and accrued expenses	329	643
Deposits and deferred gains	1,174	1,371
Deferred income taxes	10,513	9,322
Other liabilities	1,688	7,174
Total liabilities	13,704	18,510
Equity
Common equity, at 6/30/23 and 12/31/22   (Shares authorized – unlimited; shares issued and       outstanding – 1,792,613 common shares and       52,000 Class C shares)
Additional paid-in capital	5,471	5,471
Accumulated earnings	77,922	74,533
Total shareholders’ equity	83,393	80,004
Total liabilities and shareholders’ equity	$ 97,097	$ 98,514

v3.23.2

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Jun. 30, 2023	Dec. 31, 2022
Common stock, shares issued	1,792,613	1,792,613
Common stock, shares outstanding	1,792,613	1,792,613
Common Class C [Member]
Common stock, shares issued	52,000	52,000
Common stock, shares outstanding	52,000	52,000

v3.23.2

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues:
Sales	$ 1,147	$ 1,244	$ 2,300	$ 7,252
Interest and other income	426	18	768	33
Total revenues	1,573	1,262	3,068	7,285
Cost and expenses:
Cost of sales	722	1,084	1,424	5,284
Selling, general and     administrative	(4,235)	1,297	(3,040)	(109)
Depreciation and     amortization	52	69	104	134
Total cost and expenses	(3,461)	2,450	(1,512)	5,309
Operating income (loss)     before income taxes	5,034	(1,188)	4,580	1,976
Income tax benefit (expense)	(1,309)	317	(1,191)	(529)
Net income (loss)	3,725	(871)	3,389	1,447
Less: Net income (loss)           attributable to           non controlling           interests		31		(58)
Net income (loss)           attributable to           shareholders	$ 3,725	$ (902)	$ 3,389	$ 1,505

v3.23.2

Condensed Consolidated Statements of Operations (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net income (loss) per share - basic	$ 2.02	$ (0.49)	$ 1.84	$ 0.82
Net income (loss) per share - diluted	$ 2.02	$ (0.49)	$ 1.84	$ 0.82

v3.23.2

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net income (loss)	$ 3,725	$ (871)	$ 3,389	$ 1,447
Other comprehensive income:
Net unrealized (gains) losses      on pension plan assets		(4)		(21)
Other comprehensive income,   before tax		(4)		(21)
Income tax benefit (expense)   related to items of other   comprehensive income		3		7
Other comprehensive income,   net of tax		(1)		(14)
Comprehensive income (loss)	3,725	(872)	3,389	1,433
Comprehensive income (loss)   attributable to non controlling   interests		31		(58)
Comprehensive income (loss)   attributable to stockholders	$ 3,725	$ (903)	$ 3,389	$ 1,491

v3.23.2

Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Parent [Member]	AOCI Attributable to Parent [Member]	Noncontrolling Interest [Member]	Total
Beginning balance, value at Dec. 31, 2021		$ 5,471	$ 71,698	$ 79,467	$ 2,298	$ 742	$ 80,209
Net income (loss)			2,407	2,407		(89)	2,318
Effect of consolidat-   ing Kaanapali   Coffee Farms   Lot Owners’   Association			(15)	(15)		207	192
Other comprehensive   income, net of tax				(13)	(13)		(13)
Ending balance, value at Mar. 31, 2022		5,471	74,090	81,846	2,285	860	82,706
Beginning balance, value at Dec. 31, 2021		5,471	71,698	79,467	2,298	742	80,209
Net income (loss)							1,447
Other comprehensive   income, net of tax							(14)
Ending balance, value at Jun. 30, 2022		5,471	73,188	80,943	2,284	1,084	82,027
Beginning balance, value at Mar. 31, 2022		5,471	74,090	81,846	2,285	860	82,706
Net income (loss)			(902)	(902)		31	(871)
Effect of consolidat-   ing Kaanapali   Coffee Farms   Lot Owners’   Association						193	193
Other comprehensive   income, net of tax				(1)	(1)		(1)
Ending balance, value at Jun. 30, 2022		5,471	73,188	80,943	$ 2,284	$ 1,084	82,027
Beginning balance, value at Dec. 31, 2022		5,471	74,533	80,004
Net income (loss)			(336)	(336)
Ending balance, value at Mar. 31, 2023		5,471	74,197	79,668
Beginning balance, value at Dec. 31, 2022		5,471	74,533	80,004
Net income (loss)							3,389
Other comprehensive   income, net of tax
Ending balance, value at Jun. 30, 2023		5,471	77,922	83,393
Beginning balance, value at Mar. 31, 2023		5,471	74,197	79,668
Net income (loss)			3,725	3,725			3,725
Other comprehensive   income, net of tax
Ending balance, value at Jun. 30, 2023		$ 5,471	$ 77,922	$ 83,393

v3.23.2

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Statement of Cash Flows [Abstract]
Net cash provided by (used in) operating activities	$ (1,963)	$ 5,090
Net cash used in investing activities:
Property additions	(325)	(213)
Receivable due to sewer line installation	(638)
	(963)	(213)
Net cash provided by financing activities:
Contributions		385
		385
Net increase (decrease) in cash and cash equivalents	(2,926)	5,262
Cash and cash equivalents at beginning of period	19,815	17,837
Cash and cash equivalents at end of period	$ 16,889	$ 23,099

v3.23.2

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Summary of Significant Accounting Policies	(1)  Summary of Significant Accounting Policies   Basis of Presentation   The accompanying condensed consolidated financial statements include the accounts of Kaanapali Land, LLC (“Kaanapali Land”) and all of its subsidiaries and its predecessors (collectively, the “Company”). Prior to July 1, 2022, the Kaanapali Coffee Farms Lot Owners’ Association (“LOA”) was consolidated into the Company’s consolidated financial statements and the interests of third-party owners of the lots in the Kaanapali Coffee Farms subdivision were reflected as equity including non controlling interests. The Company sold its last owned lot in the Kaanapali Coffee Farms subdivision in early 2022 and as a consequence, the Company elected to turn over control of the LOA board of directors to the third-party owners of the lots in the subdivision. An election for a new board of directors, comprised entirely of third-party lot owners, was held during June 2022 and the results of the election were announced July 1, 2022. Therefore, effective July 1, 2022, the Company deconsolidated the LOA due to the loss of control over the LOA and derecognized the assets, liabilities, equity (including the non controlling interests) and results of operations in its financial statements. The Company does not have any direct or indirect retained interest in the LOA. The Company currently has agreements with the LOA to farm coffee, perform common area maintenance services and provide delivery of non-potable water.   The Company's continuing operations are in two business segments - Agriculture and Property. The Agriculture segment primarily engages in farming, harvesting and milling operations relating to coffee orchards pursuant to farming agreements with the LOA and a related entity. The Company also cultivates, harvests and sells bananas and citrus fruits, and engages in certain ranching operations. The Property segment primarily develops land for sale and negotiates bulk sales of undeveloped land. The Property and Agriculture segments operate exclusively in the State of Hawaii.   The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and therefore, should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). These unaudited condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the financial position and results of operations and cash flows for interim periods in accordance with U.S. GAAP.     A description of the Company’s significant accounting policies is included in Note 1 to the Notes to the Consolidated Financial Statements included in its 2022 Form 10-K. Except as noted below, there were no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2023.   Property   The Company's significant property holdings are on the island of Maui and consist of approximately 3,900 acres, of which approximately 1,500 acres are classified as conservation land, which precludes development. The Company has determined, based on its current projections for the development and/or disposition of its property holdings, that the property holdings are not currently recorded in an amount in excess of proceeds that the Company expects that it will ultimately obtain from the operation and disposition thereof.   Inventory of land held for sale is carried at the lower of cost or fair market value, less costs to sell, which is based on current and foreseeable market conditions, discussions with real estate brokers and review of historical land sale activity fair value hierarchy (Levels 2 and 3). Land is currently utilized for commercial specialty coffee farming operations which also support the Company's land development program, as well as farming bananas, citrus and other farm products and ranching operations. Additionally, miscellaneous parcels of land have been leased or licensed to third parties on a short term basis.   Use of Estimates   The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.   Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be achieved for the full year ending December 31, 2023 or in any other future periods.   Cash and Cash Equivalents   The Company considers as cash equivalents all investments with maturities of three months or less when purchased. Included in this balance as of June 30, 2023 is a money market fund for $14,350 that is considered to be a fair value hierarchy Level 1 investment. The Company’s cash balances are maintained primarily in two financial institutions. Such balances significantly exceed the Federal Deposit Insurance Corporation insurance limits. Management does not believe the Company is exposed to significant risk of loss on cash and cash equivalents.   Subsequent Events   The Company has performed an evaluation of subsequent events from the date of the financial statements included in this quarterly report through the date of its filing with the Securities and Exchange Commission.     Revenue Recognition   Revenue from real property sales is recognized at the time of closing when control of the property transfers to the customer. After closing of the sale transaction, the Company has no remaining performance obligation.   Other revenues are recognized when control of goods or services transfers to the customers, in the amount that the Company expects to receive for the transfer of goods or provision of services.   Revenue recognition standards require entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. The revenue recognition standards have implications for all revenues, excluding those that are under the specific scope of other accounting standards.   The Company’s revenues that were subject to revenue recognition standards were as follows (in thousands):                             Three Months Ended June 30,   Six Months Ended June 30,   2023   2022   2023   2022 Sales of real estate $ --    $ --    $ --    $ 4,750 Coffee and other sales   860     786     1,715     1,757 Total $ 860   $ 786   $ 1,715   $ 6,507   The revenue recognition standards require the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (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.   Lease Accounting   The Company’s lease arrangements, both as lessor and as lessee, are short-term leases. The Company leases land to tenants under operating leases, and the Company leases property, primarily office and storage space, from lessors under operating leases. During the three and six months ended June 30, 2023, the Company recognized $287 and $585, respectively, and $275 and $537, respectively, during the three and six months ended June 30, 2022 of lease income, substantially comprised of non-variable lease payments. During the three and six months ended June 30, 2023, the Company recognized $26 and $49, respectively, and $15 and $34, respectively, during the three and six months ended June 30, 2022, respectively, of lease expense, substantially comprised of non-variable lease payments.     Recently Issued Accounting Pronouncements   In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”. The amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments in this Update are effective for all entities upon issuance of this Update. While the Company is currently evaluating the effect that implementation of this update will have on its consolidated financial statements, no significant impact is anticipated.

v3.23.2

Land Development	6 Months Ended
	Jun. 30, 2023
Real Estate [Abstract]
Land Development	(2)  Land Development   During the first quarter of 2006, the Company received final subdivision approval on an approximately 336 acre parcel in the region "mauka" (toward the mountains) from the main highway serving the area. This project, called Kaanapali Coffee Farms, originally consisted of 51 agricultural lots, offered to individual buyers. During the second quarter of 2021, the Company converted an approximately 55 acre cultural resources lot to an agricultural lot. The Company closed on the sale of this lot on March 22, 2022. The purchase price was $5,000, paid in cash at closing. The Company has sold all the lots at Kaanapali Coffee Farms.   In September 2014, Kaanapali Land Management Corp. (“KLMC”), pursuant to a property and option purchase agreement (“Purchase Agreement”) with an unrelated third party, closed on the sale of an approximately 14.9 acre parcel in West Maui. The purchase price was $3,300, paid in cash at closing. The agreement (as subsequently amended) commits KLMC to fund up to $583, depending on various factors, for off-site roadway, sewer and electrical improvements that will also provide service to other KLMC properties. KLMC may, at its discretion, design, construct, install, and complete all or portions of the off-site road, sewer and/or electrical improvements, in which case the developer shall pay to KLMC the total costs thereof, less the KLMC committed amount. In relation to such sewer line improvement, KLMC has entered into a contract for $1,070 to install such sewer line. KLMC has paid $845 on the contract which has been recorded as a receivable, less KLMC’s sewer line commitment of $208. In accordance with the Purchase Agreement, the receivable accrues interest of 6.5% and is secured by the 14.9 acre property. Certain other off-site construction has begun at the site. In conjunction with the Purchase Agreement, the Company retains certain approval rights relating to the uses and designs of the site to ensure the uses and designs are aligned with the Company's planned master development. If such uses result in a dispute with the developer of the site, such dispute could delay the development of the site. The 14.9 acre site is intended to be used for a critical access hospital, skilled nursing facility, assisted living facility, and independent living facility.

v3.23.2

Mortgage Note Payable	6 Months Ended
	Jun. 30, 2023
Debt Disclosure [Abstract]
Mortgage Note Payable	(3)  Mortgage Note Payable   Certain subsidiaries of Kaanapali Land are jointly indebted to Kaanapali Land pursuant to a certain Secured Promissory Note in the principal amount of $70,000, dated November 14, 2002, and due September 30, 2029, as extended. Such note had an outstanding balance of principal and accrued interest as of June 30, 2023 and December 31, 2022 of $90,378 and $90,203, respectively. The interest rate currently is 0.39% per annum and compounds semi-annually. The note, which is prepayable, is secured by substantially all of the remaining real property owned by such subsidiaries, pursuant to a certain Mortgage, Security Agreement and Financing Statement, dated as of November 14, 2002, and placed on record in December 2002. The note has been eliminated in the condensed consolidated financial statements because the obligors are consolidated subsidiaries of Kaanapali Land.

v3.23.2

Employee Benefit Plans and Investments	6 Months Ended
	Jun. 30, 2023
Retirement Benefits [Abstract]
Employee Benefit Plans and Investments	(4)  Employee Benefit Plans and Investments   Prior to June 1, 2022, the Company participated in a defined benefit pension plan (the “Pension Plan”) that covers substantially all its eligible employees. The Pension Plan was sponsored and maintained by Kaanapali Land in conjunction with other plans providing benefits to employees of Kaanapali Land and its affiliates.   Pacific Trail Holdings LLC, the manager of the Company, adopted a plan to freeze the benefit accruals under and close participation in the Pension Plan and terminate the Pension Plan on June 1, 2022. Effective February 7, 2022, the fair value hierarchy Level 1 and Level 2 plan asset investments were reallocated to a money market fund. Benefit accruals were frozen on March 31, 2022. The Company paid lump sum benefits totaling approximately $420 to Pension Plan participants during October 2022, thereby settling all benefit Pension Plan liabilities. The Company’s former Pension Plan assets are approximately $19,620 and are included in Investments in the Company’s condensed consolidated balance sheet at June 30, 2023.   The Company currently expects to transfer during 2023 at least 25% of the remaining former Pension Plan assets to a qualified replacement plan (“QRP”) in which all of the participants in the terminated Pension Plan who are employed by the Company would become active participants in the QRP. The QRP is also expected to include the employees of certain affiliates of the Company. Thereafter, remaining assets of the terminated Pension Plan will revert to the Company. Under such circumstances, the Company will be subject to a 20% excise tax. There can be no assurances that the Company will be successful in executing such plan or that the Company will not be subject to additional taxes.   The components of the net periodic pension benefit (credit) included in selling, general and administrative in the Company’s condensed consolidated statements of operations are as follows (in thousands):                             Three Months Ended June 30,   Six Months Ended June 30,   2023   2022   2023   2022 Service cost $ --    $ 101    $ --    $ 210  Interest cost   --      1      --      2  Expected return on plan assets   --      (61)     --      (121) Recognized net actuarial   (gain) loss   --      (4)     --      (9) Curtailment (gain) loss   --      --      --      (12) Net periodic pension cost   (credit) $ --    $ 37    $ --    $ 70      The Company maintains a nonqualified deferred compensation arrangement (the "Rabbi Trust") which provides certain former directors of Amfac and their spouses with pension benefits. The deferred compensation liability of $329 is included in Other liabilities in the Company's condensed consolidated balance sheet as of June 30, 2023.

v3.23.2

Income Taxes	6 Months Ended
	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income Taxes	(5)  Income Taxes   The statutes of limitations with respect to the Company's taxes for 2019 and more recent years remain open to examinations by tax authorities, subject to possible utilization of loss carryforwards from earlier years. Notwithstanding the foregoing, all net operating losses (“NOL”) generated and not yet utilized are subject to adjustment by the Internal Revenue Service (“IRS”). The Company believes adequate provisions for income tax have been recorded for all years, although there can be no assurance that such provisions will be adequate. To the extent that there is a shortfall for which the Company is liable, the Company’s results of operations may be affected adversely and materially.   The Tax Cuts and Jobs Act (the “Act”) is a comprehensive tax reform bill containing a number of other provisions that either currently or in the future could impact the Company, particularly the effect of certain limitations effective for the tax year 2018 and forward (prior losses remain subject to the prior 20 year carryover period) on the use of federal NOL carryforwards, which will generally be limited to being used to offset 80% of future annual taxable income.

v3.23.2

Transactions with Affiliates	6 Months Ended
	Jun. 30, 2023
Related Party Transactions [Abstract]
Transactions with Affiliates	(6)  Transactions with Affiliates   An affiliated insurance agency, JMB Insurance Agency, Inc., which has some degree of common ownership with the Company, earns insurance brokerage commissions in connection with providing the placement of insurance coverage for certain of the properties and operations of the Company. Commissions paid for the three and six months ended June 30, 2023 were $23 and $23, respectively, and $14 and $14 for the three and six months ended June 30, 2022, respectively.   The Company reimburses its affiliates for general overhead expense and for direct expenses incurred on its behalf, including salaries and salary-related expenses incurred in connection with the management of the Company's operations. Generally, the entity that employs the person providing the services receives the reimbursement. Substantially all of such reimbursable amounts were incurred by JMB Realty Corporation or its affiliates, 900FMS, LLC, 900Work, LLC, and JMB Financial Advisors, LLC, all of which have some degree of common ownership with the Company. The total costs recorded in cost of sales and selling, general and administrative expenses in the consolidated statement of operations for the three and six months ended June 30, 2023 and 2022 were $302 and $565, respectively, and $370 and $740, respectively, of which $117 was unpaid as of June 30, 2023.   The Company had derived revenue from farming and common area maintenance services and for providing non-potable water to the LOA. The LOA is the association of the lot owners of the Kaanapali Coffee Farms. Effective July 1, 2022, the LOA is no longer an affiliate of the Company due to relinquishment of control over the LOA. The revenues for the three and six months ended June 30, 2022 were $303 and $616, respectively. Such revenue is recognized in the Agriculture Segment as disclosed in Note 9, Business Segment Information. Through June 30, 2022, the revenue amounts have been eliminated in the consolidated financial statements.

v3.23.2

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	(7)  Commitments and Contingencies   Material legal proceedings of the Company are described below. Unless otherwise noted, the parties adverse to the Company in the legal proceedings described below have not made a claim for damages in a liquidated amount and/or the Company believes that it would be speculative to attempt to determine the Company's exposure relative thereto, and as a consequence believes that an estimate of the range of potential loss cannot be made.     Under an insurance settlement the Company reached with Fireman’s Fund as a result of a complaint the Company filed against Fireman’s Fund in 2015, Fireman’s Fund paid $6,800 into an escrow during the first quarter of 2022 that was used to fund a settlement amount pursuant to a Consent Decree (described below) which was entered into with various federal agencies. That Consent Decree, entered by United States District Court for the District of Hawaii (the “Court”), and as more fully described below, resolved certain environmental claims against the Company with respect to the former mixing site on Waipio Peninsula on Oahu in Hawaii (the “Mixing Site”). After the Consent Decree was entered and finally approved by the Court in the form initially submitted by the Company and the federal government, the escrowed funds plus interest were paid to the Environmental Protection Agency on March 3, 2022 to fund the settlement that is the subject of the Consent Decree.   On April 16, 2021, the U.S. Department of Justice and the U.S. Environmental Protection Agency, on behalf of various federal agencies of the United States of America, executed a Consent Decree with Kaanapali Land, LLC, a Delaware limited liability company (the “Company”) that, if entered by the U.S. District Court sitting in the District of Hawaii, United States of America v. Kaanapali Land, and Oahu Sugar Company, LLC Case No. 1:21-CV-00190, resolved the U.S. federal government’s current environmental claims against the Company with respect to contamination at the former mixing site on Waipio Peninsula on Oahu in Hawaii that had been leased by Oahu Sugar Company LLC, a former subsidiary of the Company. In return for payments by the Company totaling $7,500, the Consent Decree resolved liability asserted by the U.S. government against the Company under the Comprehensive Environmental Response Compensation and Liability Act (“CERCLA”) as well as under the Clean Water Act, both for response costs (those costs expended for investigation and cleanup) and for natural resource damages. The U.S. District Court in Hawaii entered an Order approving the Consent Decree on February 11, 2022 and payment of the settlement amount was received by the government on March 3, 2022.   A subsidiary of the Company, D/C Distribution Corporation (“D/C”), filed a petition for liquidation under Chapter 7 of the Bankruptcy Code in July 2007. During the pendency of the bankruptcy case, D/C was not under control of the Company.   At the time of the filing of the bankruptcy petition, Kaanapali Land, as successor by merger to other entities, and D/C had been named as defendants in personal injury actions allegedly based on exposure to asbestos. While there were relatively few cases that name Kaanapali Land, there were a substantial number of cases that were pending against D/C on the U.S. mainland (primarily in California). Cases against Kaanapali Land (hereafter, “Kaanapali Land asbestos cases”) were allegedly based on its prior business operations in Hawaii and cases against D/C were allegedly based on sale of asbestos-containing products by D/C's prior distribution business operations primarily in California. Each entity defending these cases believes that it has meritorious defenses against these actions, but can give no assurances as to the ultimate outcome of these cases. The defense of these cases had a material adverse effect on the financial condition of D/C as it has been forced to file a voluntary petition for liquidation as discussed below. Kaanapali Land does not believe that it has liability, directly or indirectly, for D/C's obligations in those cases. Kaanapali Land does not presently believe that the cases in which it is named will result in any material liability to Kaanapali Land; however, there can be no assurance in that regard.     On February 12, 2014, counsel for Fireman’s Fund, the carrier that had been paying defense costs and settlements for the Kaanapali Land asbestos cases, stated that it would no longer pay settlements or judgments in the Kaanapali Land asbestos cases due to then pending D/C and Oahu Sugar bankruptcies. In its communications with Kaanapali Land, Fireman’s Fund expressed its view that the automatic stay in effect in the D/C bankruptcy case barred Fireman’s Fund from making any payments to resolve the Kaanapali Land asbestos claims because D/C Distribution was also alleging a right to coverage under those policies for asbestos claims against it. However, in the interim, Fireman’s Fund advised that it intended to continue to pay defense costs for those cases, subject to whatever reservations of rights that might be in effect and subject further to the policy terms. Fireman’s Fund also indicated that, to the extent that Kaanapali Land cooperated with Fireman’s Fund in addressing settlement of the Kaanapali Land asbestos cases through coordination with its adjusters, it was Fireman’s Fund’s intention to reimburse any such payments by Kaanapali Land, subject, among other things, to the terms of any lift-stay order, the limits and other terms and conditions of the policies, and prior approval of the settlements. Kaanapali Land and Fireman’s Fund entered into a settlement agreement on or about November 24, 2021 whereby Fireman’s Fund paid $2,441 for certain listed Kaanapali Land asbestos cases upon a Final Order of the D/C bankruptcy court lifting the automatic stay to allow the payments. The D/C court issued the lift-stay order on March 1, 2022. On April 12, 2022, the Company received $2,441 as reimbursement for the various settlements Kaanapali made that were subject to the lift-stay order of March 1, 2022. The $2,441 was included as a reduction of Selling, general and administrative expenses on the Company’s consolidated statement of operations for the three months ended March 31, 2022.   Because D/C was substantially without assets and was unable to obtain additional sources of capital to satisfy its liabilities, D/C filed with the United States Bankruptcy Court, Northern District of Illinois, its voluntary petition for liquidation under Chapter 7 of Title 11, United States Bankruptcy Code during July 2007, Case No. 07-12776. Such filing was not expected to have a material adverse effect on the Company as D/C was substantially without assets at the time of the filing. Kaanapali Land filed claims in the D/C bankruptcy that aggregated approximately $26,800, relating to both secured and unsecured intercompany debts owed by D/C to Kaanapali Land. In addition, a personal injury law firm based in San Francisco that represents clients with asbestos-related claims filed proofs of claim on behalf of approximately two thousand claimants.   On January 21, 2020, certain asbestos claimants filed a Stay Relief Motion in the Bankruptcy Court for the Northern District of Illinois, Eastern Division, Case No. 07-12776 (“motion to lift stay”) in connection with the D/C proceeding. The motion sought the entry of an order, among other things, modifying the automatic stay in the D/C bankruptcy to permit those claimants to prosecute various lawsuits in state courts against D/C and to recover on any judgment or settlement solely from any available insurance coverage. Various oppositions to the motion to lift stay were filed, and the matter was heard and taken under advisement in April 2020. On July 21, 2020, the bankruptcy court issued an order granting the motion to lift stay to permit the movants to pursue their claims and to recover any judgment or settlement from and to the extent of any available insurance coverage of D/C only.     Certain asbestos-related proofs claims in the bankruptcy case have been withdrawn in connection with closing. A court hearing was held on March 29, 2023 in which the court awarded the trustee’s compensation and expenses and therefore D/C no longer has any assets. On June 6, 2023, the bankruptcy trustee filed a final account and application to close the D/C bankruptcy and on June 14, 2023, the D/C bankruptcy court closed the case and the trustee was discharged. Due to the closing of the case, the Company derecognized a related contingent liability. The derecognition of the contingent liability is included as a reduction of Selling, general and administrative expenses and resulted in a credit in expenses on the Company’s consolidated statement of operations for the three and six months ended June 30, 2023. However, personal injury claimants have asserted, and may in the future assert, asbestos-related claims against D/C.   The Company has received notice from Hawaii’s Department of Land and Natural Resources (“DNLR”) that DNLR on a periodic basis would inspect all significant dams and reservoirs in Hawaii, including those maintained by the Company on Maui in connection with its agricultural operations. A series of such inspections have taken place over the period from 2006 through the most recent inspections that occurred in April 2022. To date, the DLNR has cited certain deficiencies concerning two of the Company’s reservoirs relating to dam and reservoir safety standards established by the State of Hawaii. These deficiencies include, among other things, vegetative overgrowth, erosion of slopes, uncertainty of inflow control, spillway capacity, and freeboard, and uncertainty of structural stability under certain loading and seismic conditions. The Company has taken certain corrective actions, including lowering the reservoir operating level, as well as updating important plans to address emergency events and basic operations and maintenance. In 2018, the Company contracted with an engineering firm to develop plans to address certain DLNR cited deficiencies on one of the Company’s reservoirs. Remediation plans for addressing all deficiencies have been submitted to DLNR. In 2012, the State of Hawaii issued new Hawaii Administrative Rules for Dams and Reservoirs which require dam owners to obtain from DLNR Certificates of Impoundment (“permits”) to operate and maintain dams or reservoirs. Obtaining such permits requires owners to completely resolve all cited deficiencies. Therefore, the process may involve further analysis of dam and reservoir safety requirements, which will involve continuing engagement with specialized engineering consultants, and ultimately could result in significant and costly improvements which may be material to the Company.   The DLNR categorizes the reservoirs as "high hazard" under State of Hawaii Administrative Rules and State Statutes concerning dam and reservoir safety. This classification, which bears upon government oversight and reporting requirements, may increase the cost of managing and maintaining these reservoirs in a material manner. The Company does not believe that this classification is warranted for either of these reservoirs and has initiated a dialogue with DLNR in that regard. In April 2008, the Company received further correspondence from DLNR that included the assessment by their consultants of the potential losses that result from the failure of these reservoirs. In April 2009, the Company filed a written response to DLNR to correct certain factual errors in its report and to request further analysis on whether such "high hazard" classifications are warranted. It is unlikely that the “high hazard” designation will be changed.   Other than as described above, the Company is not involved in any material pending legal proceedings, other than ordinary routine litigation incidental to its business. The Company and/or certain of its affiliates have been named as defendants in several pending lawsuits. While it is impossible to predict the outcome of such routine litigation that is now pending (or threatened) and for which the potential liability is not covered by insurance, the Company is of the opinion that the ultimate liability from any of this litigation will not materially adversely affect the Company's consolidated results of operations or its financial condition.     KLMC is a party to an agreement with the State of Hawaii for the development of the Lahaina Bypass Highway. An approximately 2.4 mile portion of this two lane state highway has been completed. Construction to extend the southern terminus was completed mid-2018. The northern portion of the Lahaina Bypass Highway, which extends to KLMC’s lands, is in the early stage of planning. Under certain circumstances, which have not yet occurred, KLMC remains committed for approximately $1,100 of various future costs relating to the planning and design of the uncompleted portion of the Lahaina Bypass Highway. Under certain conditions, which have not yet been met, KLMC has agreed to contribute an amount not exceeding $6,700 toward construction costs. Any such amount contributed would be reduced by the value of KLMC’s land actually contributed to the State for the Lahaina Bypass Highway.   These potential commitments have not been reflected in the accompanying condensed consolidated financial statements. While the completion of the Lahaina Bypass Highway would add value to KLMC’s lands north of the town of Lahaina, there can be no assurance that it will be completed or when any future phases will be undertaken.

v3.23.2

Calculation of Net Income (Loss) Per Share	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Calculation of Net Income (Loss) Per Share	(8)  Calculation of Net Income (Loss) Per Share   The following tables set forth the computation of net loss per share - basic and diluted:                           Three Months Ended June 30,   Six Months Ended June 30,   (Amounts in thousands, except per share amounts)   2023   2022   2023   2022 Numerator:                       Net income (loss) $ 3,725   $ (871)   $ 3,389   $ 1,447  Less: Net income (loss) attributable   to non controlling interests   --      31      --      (58) Net income (loss) attributable to   stockholders $ 3,725   $ (902)   $ 3,389   $ 1,505                          Denominator:                       Number of weighted   average shares outstanding                         -  basic and diluted   1,845     1,845      1,845     1,845                          Net income (loss) per share,                         attributable to   Kaanapali Land   -  basic and diluted $ 2.02   $ (0.49)   $ 1.84   $ 0.82

v3.23.2

Business Segment Information	6 Months Ended
	Jun. 30, 2023
Segment Reporting [Abstract]
Business Segment Information	(9)  Business Segment Information   As described in Note 1, the Company operates in two business segments. Total revenues and operating profit by business segment are presented in the tables below.   Total revenues by business segment includes primarily (i) sales, all of which are to unaffiliated customers, and (ii) interest income that is earned from outside sources on assets which are included in the individual industry segment's identifiable assets.   Operating income (loss) is comprised of total revenue less cost of sales and operating expenses. In computing operating income (loss), none of the following items have been added or deducted: general corporate revenues and expenses, interest expense and income taxes.                           Three Months Ended June 30, (in thousands)   Six Months Ended June 30, (in thousands)   2023   2022   2023   2022 Revenues:                         Property $ 107    $ 81    $ 299    $ 4,887    Agriculture   1,050      1,177      2,064      2,394    Corporate   416      4      705      4    $ 1,573    $ 1,262    $ 3,068    $ 7,285  Operating income (loss):                         Property $ (381)   $ (561)   $ (761)   $ 611    Agriculture   215      269      363      519  Operating income (loss)   (166)     (292)     (398)     1,130                          Corporate   5,200      (896)     4,978      846                          Operating income (loss)   before income taxes $ 5,034    $ (1,188)   $ 4,580    $ 1,976     The Company’s Property segment consists primarily of revenue received from land sales and lease and licensing agreements.   The Company’s Agriculture segment consists primarily of coffee operations and licensing agreements.   The Company’s Corporate segment consists primarily of interest earned on investments.   The Company is exploring alternative agricultural operations, but there can be no assurance that replacement operations at any level will result.

v3.23.2

Subsequent Events	6 Months Ended
	Jun. 30, 2023
Subsequent Events [Abstract]
Subsequent Events	(10) Subsequent Events   Beginning on August 8, 2023, a wildfire occurred due east of historic Lahaina town in Maui. The fire spread rapidly due to extreme wind conditions caused in part by Hurricane Dora which traveled 800 miles offshore west of Maui. The fires caused multiple fatalities, widespread damage to Lahaina town and the surrounding area including the Company’s 19-acre Pioneer Mill site. The Company’s offices and coffee mill are located on the site as well as various other structures and a building which is leased to an unrelated third party and used to operate a coffee store. The Company also utilized portions of the property for short term license agreements with third parties that generates income for the Company. Although no employees were injured in the fire, the Company’s offices and coffee store building were destroyed. Additionally, it appears that most of the personal property of the licensees’ was destroyed and the coffee mill was severely damaged if not destroyed. The widespread destruction is likely to cause disruptions in the Company’s development plans, and the damage to the coffee mill will likely cause a delay or prevent the Company from harvesting the current year coffee crop. It is also likely that the Maui economy will be adversely impacted by the devastation caused by the fires in Lahaina and will likely have a negative impact on the tourism industry in west Maui. The Company continues to evaluate the extent of the damage to its property and equipment and has initiated claims with its insurance carriers. There can be no assurance that the Company’s insurance coverage will fully compensate the Company for its losses incurred in connection with the fire and related devastation, including the replacement cost of the structures and equipment lost in the fire, the loss in revenue from the lack of coffee sales, or the loss of income from the licensees. The Company could experience losses in excess of our insured limits, and further, claims for certain losses could be denied or subject to deductibles or exclusions under our insurance policies.

v3.23.2

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	Basis of Presentation   The accompanying condensed consolidated financial statements include the accounts of Kaanapali Land, LLC (“Kaanapali Land”) and all of its subsidiaries and its predecessors (collectively, the “Company”). Prior to July 1, 2022, the Kaanapali Coffee Farms Lot Owners’ Association (“LOA”) was consolidated into the Company’s consolidated financial statements and the interests of third-party owners of the lots in the Kaanapali Coffee Farms subdivision were reflected as equity including non controlling interests. The Company sold its last owned lot in the Kaanapali Coffee Farms subdivision in early 2022 and as a consequence, the Company elected to turn over control of the LOA board of directors to the third-party owners of the lots in the subdivision. An election for a new board of directors, comprised entirely of third-party lot owners, was held during June 2022 and the results of the election were announced July 1, 2022. Therefore, effective July 1, 2022, the Company deconsolidated the LOA due to the loss of control over the LOA and derecognized the assets, liabilities, equity (including the non controlling interests) and results of operations in its financial statements. The Company does not have any direct or indirect retained interest in the LOA. The Company currently has agreements with the LOA to farm coffee, perform common area maintenance services and provide delivery of non-potable water.   The Company's continuing operations are in two business segments - Agriculture and Property. The Agriculture segment primarily engages in farming, harvesting and milling operations relating to coffee orchards pursuant to farming agreements with the LOA and a related entity. The Company also cultivates, harvests and sells bananas and citrus fruits, and engages in certain ranching operations. The Property segment primarily develops land for sale and negotiates bulk sales of undeveloped land. The Property and Agriculture segments operate exclusively in the State of Hawaii.   The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements, and therefore, should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Form 10-K”). These unaudited condensed consolidated financial statements include all normal and recurring adjustments considered necessary for a fair presentation of the financial position and results of operations and cash flows for interim periods in accordance with U.S. GAAP.     A description of the Company’s significant accounting policies is included in Note 1 to the Notes to the Consolidated Financial Statements included in its 2022 Form 10-K. Except as noted below, there were no material changes in the Company’s significant accounting policies during the three and six months ended June 30, 2023.
Property	Property   The Company's significant property holdings are on the island of Maui and consist of approximately 3,900 acres, of which approximately 1,500 acres are classified as conservation land, which precludes development. The Company has determined, based on its current projections for the development and/or disposition of its property holdings, that the property holdings are not currently recorded in an amount in excess of proceeds that the Company expects that it will ultimately obtain from the operation and disposition thereof.   Inventory of land held for sale is carried at the lower of cost or fair market value, less costs to sell, which is based on current and foreseeable market conditions, discussions with real estate brokers and review of historical land sale activity fair value hierarchy (Levels 2 and 3). Land is currently utilized for commercial specialty coffee farming operations which also support the Company's land development program, as well as farming bananas, citrus and other farm products and ranching operations. Additionally, miscellaneous parcels of land have been leased or licensed to third parties on a short term basis.
Use of Estimates	Use of Estimates   The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.   Operating results for the six months ended June 30, 2023 are not necessarily indicative of the results that may be achieved for the full year ending December 31, 2023 or in any other future periods.
Cash and Cash Equivalents	Cash and Cash Equivalents   The Company considers as cash equivalents all investments with maturities of three months or less when purchased. Included in this balance as of June 30, 2023 is a money market fund for $14,350 that is considered to be a fair value hierarchy Level 1 investment. The Company’s cash balances are maintained primarily in two financial institutions. Such balances significantly exceed the Federal Deposit Insurance Corporation insurance limits. Management does not believe the Company is exposed to significant risk of loss on cash and cash equivalents.
Subsequent Events	Subsequent Events   The Company has performed an evaluation of subsequent events from the date of the financial statements included in this quarterly report through the date of its filing with the Securities and Exchange Commission.
Revenue Recognition	Revenue Recognition   Revenue from real property sales is recognized at the time of closing when control of the property transfers to the customer. After closing of the sale transaction, the Company has no remaining performance obligation.   Other revenues are recognized when control of goods or services transfers to the customers, in the amount that the Company expects to receive for the transfer of goods or provision of services.   Revenue recognition standards require entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange. The revenue recognition standards have implications for all revenues, excluding those that are under the specific scope of other accounting standards.   The Company’s revenues that were subject to revenue recognition standards were as follows (in thousands):                             Three Months Ended June 30,   Six Months Ended June 30,   2023   2022   2023   2022 Sales of real estate $ --    $ --    $ --    $ 4,750 Coffee and other sales   860     786     1,715     1,757 Total $ 860   $ 786   $ 1,715   $ 6,507   The revenue recognition standards require the use of a five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (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.
Lease Accounting	Lease Accounting   The Company’s lease arrangements, both as lessor and as lessee, are short-term leases. The Company leases land to tenants under operating leases, and the Company leases property, primarily office and storage space, from lessors under operating leases. During the three and six months ended June 30, 2023, the Company recognized $287 and $585, respectively, and $275 and $537, respectively, during the three and six months ended June 30, 2022 of lease income, substantially comprised of non-variable lease payments. During the three and six months ended June 30, 2023, the Company recognized $26 and $49, respectively, and $15 and $34, respectively, during the three and six months ended June 30, 2022, respectively, of lease expense, substantially comprised of non-variable lease payments.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements   In December 2022, the FASB issued ASU No. 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848”. The amendments in this Update defer the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The amendments in this Update are effective for all entities upon issuance of this Update. While the Company is currently evaluating the effect that implementation of this update will have on its consolidated financial statements, no significant impact is anticipated.

v3.23.2

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Schedule of Revenues Subject to Revenue Recognition Standards	Three Months Ended June 30,   Six Months Ended June 30,   2023   2022   2023   2022 Sales of real estate $ --    $ --    $ --    $ 4,750 Coffee and other sales   860     786     1,715     1,757 Total $ 860   $ 786   $ 1,715   $ 6,507

v3.23.2

Employee Benefit Plans and Investments (Tables)	6 Months Ended
	Jun. 30, 2023
Retirement Benefits [Abstract]
Schedule of Components of Net Periodic Pension Benefit (Credit)	Three Months Ended June 30,   Six Months Ended June 30,   2023   2022   2023   2022 Service cost $ --    $ 101    $ --    $ 210  Interest cost   --      1      --      2  Expected return on plan assets   --      (61)     --      (121) Recognized net actuarial   (gain) loss   --      (4)     --      (9) Curtailment (gain) loss   --      --      --      (12) Net periodic pension cost   (credit) $ --    $ 37    $ --    $ 70

v3.23.2

Calculation of Net Income (Loss) Per Share (Tables)	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Schedule of Computation of Net Loss Per Share - Basic and Diluted	Three Months Ended June 30,   Six Months Ended June 30,   (Amounts in thousands, except per share amounts)   2023   2022   2023   2022 Numerator:                       Net income (loss) $ 3,725   $ (871)   $ 3,389   $ 1,447  Less: Net income (loss) attributable   to non controlling interests   --      31      --      (58) Net income (loss) attributable to   stockholders $ 3,725   $ (902)   $ 3,389   $ 1,505                          Denominator:                       Number of weighted   average shares outstanding                         -  basic and diluted   1,845     1,845      1,845     1,845                          Net income (loss) per share,                         attributable to   Kaanapali Land   -  basic and diluted $ 2.02   $ (0.49)   $ 1.84   $ 0.82

v3.23.2

Business Segment Information (Tables)	6 Months Ended
	Jun. 30, 2023
Segment Reporting [Abstract]
Schedule of Operating Income (Loss) by Segments	Three Months Ended June 30, (in thousands)   Six Months Ended June 30, (in thousands)   2023   2022   2023   2022 Revenues:                         Property $ 107    $ 81    $ 299    $ 4,887    Agriculture   1,050      1,177      2,064      2,394    Corporate   416      4      705      4    $ 1,573    $ 1,262    $ 3,068    $ 7,285  Operating income (loss):                         Property $ (381)   $ (561)   $ (761)   $ 611    Agriculture   215      269      363      519  Operating income (loss)   (166)     (292)     (398)     1,130                          Corporate   5,200      (896)     4,978      846                          Operating income (loss)   before income taxes $ 5,034    $ (1,188)   $ 4,580    $ 1,976

v3.23.2

Schedule of Revenues Subject to Revenue Recognition Standards (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Sales of real estate				$ 4,750
Coffee and other sales	860	786	1,715	1,757
Total	$ 860	$ 786	$ 1,715	$ 6,507

v3.23.2

Summary of Significant Accounting Policies (Details Narrative) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) a	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) a	Jun. 30, 2022 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Area of significant property holdings on island of Maui | a	3,900		3,900
Area of property holdings in Maui classified as conservation land which precludes development | a	1,500		1,500
Cash Equivalents, at Carrying Value	$ 14,350		$ 14,350
Operating lease income	287	$ 275	585	$ 537
Operating lease expense	$ 26	$ 15	$ 49	$ 34

v3.23.2

Land Development (Details Narrative) $ in Thousands	1 Months Ended		3 Months Ended	6 Months Ended
	Mar. 31, 2022 USD ($)	Sep. 30, 2014 USD ($) a	Mar. 31, 2006 lots	Jun. 30, 2023 USD ($)
Real Estate [Line Items]
Number of agricultural lots held for sale | lots			51
Proceeds from sale of agricultural lot	$ 5,000	$ 3,300
Acres of land sold | a		14.9
Contract price for sewer line improvement project				$ 1,070
Amount paid by KLMC on sewer line project				845
Sewer line project commitment amount				$ 208
Interest rate of receivable per Purchase Agreement				6.50%
Maximum [Member]
Real Estate [Line Items]
Future funds committed by KLMC to improve parcel of land sold		$ 583

v3.23.2

Mortgage Note Payable (Details Narrative) - Secured Debt [Member] - Affiliated Entity [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Debt instrument, face amount	$ 70,000
Debt instrument, issuance date	Nov. 14, 2002
Debt instrument, maturity date	Sep. 30, 2029
Outstanding balance of principal and accrued interest	$ 90,378	$ 90,203
Debt instrument, interest rate	0.39%

v3.23.2

Schedule of Components of Net Periodic Pension Benefit (Credit) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Retirement Benefits [Abstract]
Service cost		$ 101		$ 210
Interest cost		1		2
Expected return on plan assets		(61)		(121)
Recognized net actuarial   (gain) loss		(4)		(9)
Curtailment (gain) loss				(12)
Net periodic pension cost   (credit)		$ 37		$ 70

v3.23.2

Employee Benefit Plans and Investments (Details Narrative) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Retirement Benefits [Abstract]
Lump sum benefits paid to pension plan participants	$ 420
Excess assets of pension plan	19,620
Deferred liability for nonqualified deferred compensation arrangement ("Rabbi Trust")	$ 329

v3.23.2

Transactions with Affiliates (Details Narrative) - Affiliated Entity [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Insurance commissions paid to related party	$ 23	$ 14	$ 23	$ 14
Selling, general and administrative expenses incurred during the period with related parties	302	370	565	740
Amounts due to affiliates not yet paid	$ 117		$ 117
Revenue from farming and common area maintenance services and for providing non-potable water to the Kaanapali Coffee Farms Lot Owners Association ('LOA')		$ 303		$ 616

v3.23.2

Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	1 Months Ended
	Jul. 31, 2021	Jun. 30, 2023	Sep. 30, 2014	Dec. 31, 2013
Gain Contingencies [Line Items]
Insurance Settlement Agreement, proposed escrow funding		$ 6,800
Litigation settlement from Conset Decree	$ 7,500
Proposed settlement to be paid by Fireman's Fund		$ 2,441
Approximate future costs and expenditures KLMC remains committed for on uncompleted portion of Bypass Highway				$ 1,100
Maximum amount KLMC has agreed to contribute towards construction costs on Bypass Highway project				$ 6,700
Dc Distributions Bankruptcy [Member]
Gain Contingencies [Line Items]
Amount of claims filed			$ 26,800

v3.23.2

Schedule of Computation of Net Loss Per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Numerator:
Net income (loss)	$ 3,725	$ (871)	$ 2,318	$ 3,389	$ 1,447
Less: Net income (loss) attributable   to non controlling interests		31			(58)
Net income (loss) attributable to   stockholders	$ 3,725	$ (902)		$ 3,389	$ 1,505
Denominator:
Number of weighted average share outstanding - basic	1,845	1,845		1,845	1,845
Number of weighted average share outstanding - diluted	1,845	1,845		1,845	1,845
Net income (loss) per share - basic	$ 2.02	$ (0.49)		$ 1.84	$ 0.82
Net income (loss) per share - diluted	$ 2.02	$ (0.49)		$ 1.84	$ 0.82

v3.23.2

Schedule of Operating Income (Loss) by Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Segment Reporting Information [Line Items]
Revenues	$ 1,573	$ 1,262	$ 3,068	$ 7,285
Operating loss before income taxes	5,034	(1,188)	4,580	1,976
Property [Member]
Segment Reporting Information [Line Items]
Revenues	107	81	299	4,887
Operating loss before income taxes	(381)	(561)	(761)	611
Agriculture [Member]
Segment Reporting Information [Line Items]
Revenues	1,050	1,177	2,064	2,394
Operating loss before income taxes	215	269	363	519
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Revenues	416	4	705	4
Operating loss before income taxes	5,200	(896)	4,978	846
Property And Agriculture [Member]
Segment Reporting Information [Line Items]
Operating loss before income taxes	$ (166)	$ (292)	$ (398)	$ 1,130

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