DOH Order

On December 31, 2018, the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to the Company’s Upcountry Maui wastewater treatment facility. The facility was built in the 1960s to serve approximately 200 single-family homes developed for workers in the Company’s former agricultural operations. The facility is comprised of two 1.5-acre wastewater stabilization ponds and surrounding disposal leach fields. The Order includes, among other requirements, payment of a $230,000 administrative penalty and development of a new wastewater treatment plant, which become final and binding unless a hearing is requested to contest the alleged violations and penalties.

The construction of additional leach fields and installation of a surface aerator, sludge removal system, and natural pond cover using water plants were completed in 2023. Test results from wastewater monitoring indicate effluent concentration amounts within allowable ranges. A feasibility study was prepared for and submitted to the Company on January 15, 2024, identifying various technical solutions that could be implemented to resolve the Order. The DOH agreed to defer the Order on February 15, 2024, as the Company continues to work to resolve and remediate the facility’s wastewater effluent issues through an approved corrective action plan. The Company submitted a plan (the Plan) and proposed solution to resolve the Order on March 14, 2024. The Plan included the installation of an additional pond that will be lined and installed with aerators. One of the existing ponds will be lined and renovated as necessary and the other pond will be taken offline and used as a backup pond if needed.

On April 24, 2026, the Company received notification from the DOH that the approval to construct a 75,000 gallon per day wastewater treatment works was granted. The Company is working with the County of Maui to obtain the necessary grading and construction permits. The Company continues to coordinate with the DOH to resolve the Order. Meetings continue to be scheduled to provide status updates and progress being made towards resolution.

Honokohau Stream Irrigation Water Dispute

On August 18, 2025, TY Management Corporation, which owns two golf courses, the Plantation Estates Lot Owners Association (“PELOA”), the Association of Apartment Owners of the Coconut Grove on Kapalua, and the Association of Apartment Owners of the Ridge at Kapalua (three owner associations located within the Kapalua Resort Association (“KRA”), and Hui Momona Farms LLC, a Hawaii-based company that is a member of PELOA (collectively, the “Plaintiffs”), filed a complaint against the Company in the Circuit Court of the Second Circuit, State of Hawaii. The complaint alleged the Company failed to provide irrigation water from Honokohau Stream due to an alleged failure to maintain the ditch system that transports water from the stream. The complaint seeks declaratory and injunctive relief and unspecified monetary damages. 

In September 2025, the Company responded to the complaint and asserted counterclaims, including claims based on, alleged violations by Plaintiffs of irrigation-use restrictions intended to protect public trust purposes and fire protection for the entire Kapalua community as well as claims relating to alleged defamatory statements. At the time of filing this Quarterly Report, the Company cannot reasonably estimate the possible loss or range of loss, or recovery from the counterclaim, if any, associated with this matter. The Company intends to defend against the claims and to prosecute its counterclaims. The Company's insurance carrier accepted the claim and tendered defense on behalf of the Company.

Since 2019, the availability of divertible water from Honokohau Stream has been reduced under Hawaii state law. In addition, the stream has experienced record low flows associated with historic drought conditions impacting the island of Maui. At its September 2025 meeting, the Commission on Water Resource Management, the state agency responsible for administering the state water code, reported that rainfall contributes to runoff and baseflow to streams, and that for the period between September 2024 and August 2025, annual rainfall in Honokohau Valley was 46% of normal. As a result of reduced rainfall and Hawaii state law prioritizing public trust uses, including drinking water and traditional practices, there has been less water during the recent drought available for private commercial irrigation.

KRA Annexations

In 2024 and 2025, the Company, as the developer of Kapalua and member of the KRA, annexed certain lands into Kapalua in accordance with procedures set forth in the KRA’s governing declaration. 

On September 25, 2025, TY Management Corporation and derivatively on behalf of KRA, filed a lawsuit in the Circuit Court of the Second Circuit, State of Hawai‘i, against certain directors of KRA and the Company as declarant of KRA, alleging that the annexations and related voting rights are invalid. The matter is currently in court-mandated arbitration.

At the time of filing of this Quarterly Report, the financial impact to the Company, if any, cannot be determined or estimated. KRA is responsible for the defense of the directors named in the claim. The Company intends to fully defend against the allegations.

In addition, from time to time, the Company is the subject of various other claims, complaints and other legal actions which arise in the normal and ordinary course of the Company’s business activities. The Company believes the resolution of these other matters, in the aggregate, is not likely to have a material adverse effect on the Company’s consolidated financial position or operations.