63330--3/31/2009--MAUI_LAND_&_PINEAPPLE_CO

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Risks Related to our Business Risks Relating to our Community Development and Resort Segments Unstable market conditions could continue to materially and adversely affect our operating results. Real estate investments are subject to numerous risks and we are negatively impacted by the downturn in the real estate market. The current economic environment and the more limited availability of credit may increase the possibility of default on sales at the Residences at Kapalua Bay project which could materially and adversely affect our financial condition and results of operations. Because we are located in Hawaii and therefore apart from the mainland United States, we are more sensitive to certain economic factors, such as increased fuel and travel costs, which may adversely impact and materially affect our business, financial condition and results of operations. A reduction in the value of our investment in Bay Holdings would require us to reduce the value of this investment on our balance sheet, which could adversely affect our results of operations and financial condition. We are involved in joint ventures and are subject to risks associated with joint venture relationships. If we are unable to complete land development projects within forecasted timing and budgeting, or at all, financial results may be negatively affected. If we are unable to obtain required land use entitlements at reasonable costs, or at all, our operating results would be adversely affected. If we are unable to successfully compete with other developers of luxury real estate on Maui, our financial results could be materially affected. We have entered into limited guarantees under which we may be required to guarantee completion of the Residences at Kapalua Bay project or certain limited recourse obligations of Bay Holdings. We may be subject to certain environmental regulations under which we may have additional liability and experience additional costs for land development. Risks Relating to our Agriculture Segment Our agriculture operations face significant competition from companies with greater financial resources and from foreign competition with lower cost structures. If we are unable to successfully compete with other producers of fresh pineapple products, our financial results could be materially affected. We are highly dependent on the success of our consignment arrangement to sell our fresh pineapple. Our ability to competitively serve our customers depends on the availability of reliable and low-cost transportation, and any increases in transportation- related costs could have material adverse impact on our results of operations. Changes in weather conditions or natural disasters could adversely impact and materially affect our business, financial condition and results of operations. If we are unable to find a title sponsor for the LPGA golf tournament that we are contractually obligated to sponsor, we may have to bear the full cost of producing the tournament. We have incurred a significant amount of indebtedness and are subject to certain covenants under those agreements. Failure to satisfy covenants under these agreements could accelerate our obligations under such credit agreements, which could adversely affect our operations and financial results and impact our ability to satisfy our obligations and ability to continue as a going concern. Available credit under each of our revolving credit facilities is dependent upon maintaining a specified percentage of the amount of the loan relative to the value of the property securing the loan and any reduction in the appraised value of such property could reduce our borrowing capacity. The financial markets have recently experienced significant turmoil which may negatively impact our liquidity and our ability to obtain financing. The number of shares registered for resale pursuant to an effective Registration Statement on Form S-3 is significant in relation to our outstanding shares and trading volume and sales of substantial amounts of our common stock may adversely affect our market price. The conversion price of the convertible notes is subject to adjustment and, if adjusted, will result in dilution to our existing holders of common stock. The convertible notes provide the holders with certain rights of redemption and, upon the occurrence of various events of default and change of control transactions, the right to require us to redeem the convertible notes for cash. We may not have the funds necessary to redeem the convertible notes for cash, or any such redemption of the convertible notes could leave us with little or no working capital for operations or capital expenditures. Risks Relating to our Stock Our stock price has been subject to significant volatility. Trading in our stock over the last twelve months has been limited, so investors may not be able to sell as much stock as they want at prevailing prices. We do not anticipate declaring any cash dividends on our common stock. If we do not meet the continued listing requirements of the New York Stock Exchange (NYSE), our common stock may be delisted.

Full 10-K form ▸

63330--3/31/2009--MAUI_LAND_&_PINEAPPLE_CO_INC