cdzi20250331

cdzi20250331_10q.htm

united states

Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from …… to …….

Commission File Number 0-12114

Cadiz Inc.

(Exact name of registrant specified in its charter)

Delaware	77-0313235
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

550 South Hope Street, Suite 2850
Los Angeles, California	90071
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 271-1600

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

CDZI

The NASDAQ Global Market

Depositary Shares (each representing a

1/1000^th fractional interest in share of

8.875% Series A Cumulative Perpetual

Preferred Stock, par value $0.01 per

share)

CDZIP

The NASDAQ Global Market

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 shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ 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

☑ Smaller Reporting Company ☐ Emerging growth company

If an emerging growth company, indicate by checkmark 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 Exchange Act Rule 12b-2). Yes ☐ No ☑

As of May 12, 2025, the Registrant had 81,876,376 shares of common stock, par value $0.01 per share, outstanding.

Fiscal First Quarter 2025 Quarterly Report on Form 10-Q

Page

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

Cadiz Inc. Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 2024	1

Unaudited Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	2

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	3

Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2025 and 2024	4

Unaudited Notes to the Condensed Consolidated Financial Statements	6

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	27

ITEM 4. Controls and Procedures	27

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings	28

ITEM 1A. Risk Factors	28

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	28

ITEM 3. Defaults Upon Senior Securities	28

ITEM 4. Mine Safety Disclosures	28

ITEM 5. Other Information	28

ITEM 6. Exhibits	29

Cadiz Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

	For the Three Months
	Ended March 31,
*($ in thousands, except per share data)*	2025			2024

Total revenues	$	2,954		$	1,121

Costs and expenses:
Cost of sales		2,078			1,004
General and administrative		8,107			4,730
Depreciation		302			295

Total costs and expenses		10,487			6,029

Operating loss		(7,533	)		(4,908	)

Interest expense, net		(2,057	)		(1,939	)

Loss before income taxes		(9,590	)		(6,847	)
Income tax expense		(3	)		(3	)

Net loss and comprehensive loss	$	(9,593	)	$	(6,850	)

Less: Preferred stock dividend		(1,265	)		(1,265	)

Net loss and comprehensive loss applicable to common stock	$	(10,858	)	$	(8,115	)

Basic and diluted net loss per common share	$	(0.14	)	$	(0.12	)

Basic and diluted weighted average shares outstanding		77,208			66,997

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadiz Inc.

Condensed Consolidated Balance Sheets (Unaudited)

	March 31,			December 31,
*($ in thousands, except per share data)*	2025			2024

ASSETS
Current assets:
Cash and cash equivalents	$	21,569		$	17,292
Accounts receivable		4,968			4,586
Inventories		3,052			3,020
Prepaid expenses and other current assets		1,000			888
Total current assets		30,589			25,786

Property, plant, equipment and water programs, net		92,105			88,362
Long-term deposit/prepaid expenses		420			420
Goodwill		5,714			5,714
Right-of-use asset		3,660			3,746
Long-term restricted cash		2,759			134
Other assets		10,329			10,332
Total assets	$	145,576		$	134,494

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,107		$	2,261
Accrued liabilities		7,026			7,997
Current portion of long-term debt		101			120
Dividend payable		1,265			1,288
Contingent consideration liabilities		1,200			1,200
Deferred revenue		1,949			1,226
Operating lease liabilities		340			314
Total current liabilities		13,988			14,406

Long-term debt, net		57,713			56,708
Long-term lease obligations with related party, net		25,915			25,275
Long-term operating lease liabilities		3,253			3,473
Deferred revenue		625			625
Other long-term liabilities		47			46
Total liabilities		101,541			100,533

Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock - $.01 par value; 100,000 shares authorized at March 31, 2025 and December 31, 2024; shares issued and outstanding – 329 at March 31, 2025 and December 31, 2024		1			1
8.875% Series A cumulative, perpetual preferred stock - $.01 par value; 7,500 shares authorized at March 31, 2025 and December 31, 2024; shares issued and outstanding – 2,300 at March 31, 2025 and December 31, 2024		1			1
Common stock - $.01 par value; 100,000,000 shares authorized at March 31, 2025 and December 31, 2024; shares issued and outstanding – 81,785,011 at March 31, 2025 and 75,353,889 at December 31, 2024		816			752
Additional paid-in capital		730,171			709,303
Accumulated deficit		(686,954	)		(676,096	)
Total stockholders’ equity		44,035			33,961
Total liabilities and stockholders’ deficit	$	145,576		$	134,494

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadiz Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

	For the Three Months
	Ended March 31,
*($ in thousands)*	2025			2024

Cash flows from operating activities:
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:	$	(9,593	)		(6,850	)
Depreciation		302			295
Amortization of debt discount and issuance costs		361			269
Amortization of right-of-use asset		86			33
Interest expense added to loan principal		671			380
Interest expense added to lease liability		634			569
Finance expense		-			307
Compensation charge for stock and share option awards		2,769			1,259
Changes in operating assets and liabilities:
Accounts receivable		(382	)		(677	)
Inventories		(32	)		(650	)
Prepaid expenses and other current assets		(112	)		(485	)
Other assets		3			40
Accounts payable		1,021			1,485
Lease liabilities		(194	)		(170	)
Deferred revenue		723			350
Other accrued liabilities		99			972

Net cash used in operating activities		(3,644	)		(2,873	)

Cash flows from investing activities:
Additions to property, plant and equipment and water programs		(1,289	)		(186	)
Additions to deposits for asset purchase options		(5,000	)		-

Net cash used in investing activities		(6,289	)		(186	)

Cash flows from financing activities:
Net proceeds from issuance of stock		18,335			-
Dividend payments		(1,288	)		(1,288	)
Proceeds from the issuance of long-term debt		-			20,000
Principal payments on long-term debt		(40	)		(52	)
Issuance costs long-term debt		-			(839	)
Taxes paid related to net share settlement of equity awards		(172	)		(52	)

Net cash provided by financing activities		16,835			17,769

Net increase in cash, cash equivalents and restricted cash		6,902			14,710

Cash, cash equivalents and restricted cash, beginning of period		17,426			4,636

Cash, cash equivalents and restricted cash, end of period	$	24,328		$	19,346

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadiz Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the three months ended March 31, 2025 ($ in thousands, except share data)

									8.875% Series A Cumulative				Additional					Total
	Common Stock				Preferred Stock				Perpetual Preferred Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance as of December 31, 2024		75,353,889	$	752		329	$	1		2,300	$	1	$	709,303	$	(676,096	)	$	33,961

Issuance of shares pursuant to direct offering		5,715,000		57		-		-		-		-		18,278		-			18,335
Stock-based compensation expense, net of taxes		716,122		7		-		-		-		-		2,590		-			2,597
Dividends declared on 8.875% series A cumulative perpetual preferred shares ($550 per share)		-		-		-		-		-		-		-		(1,265	)		(1,265	)
Net loss and comprehensive loss		-		-		-		-		-		-		-		(9,593	)		(9,593	)

Balance as of March 31, 2025		81,785,011	$	816		329	$	1		2,300	$	1	$	730,171	$	(686,954	)	$	44,035

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadiz Inc.

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

For the three months ended March 31, 2024 ($ in thousands, except share data)

									8.875% Series A Cumulative				Additional					Total
	Common Stock				Preferred Stock				Perpetual Preferred Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance as of December 31, 2023		66,710,795	$	665		329	$	1		2,300	$	1	$	679,150	$	(639,850	)	$	39,967

Stock-based compensation expense, net of taxes		472,779		5		-		-		-		-		1,202		-			1,207
Issuance of warrants		-		-		-		-		-		-		887		-			887
Shares to be issued to lenders		-		-		-		-		-		-		480		-			480
Issuance of shares to consultants		100,000		1		-		-		-		-		256		-			257
Capitalization of gain on extinguishment of debt		-		-		-		-		-		-		1,928		-			1,928
Dividends declared on 8.875% series A cumulative perpetual preferred shares ($550 per share)		-		-		-		-		-		-		-		(1,265	)		(1,265	)
Net loss and comprehensive loss		-		-		-		-		-		-		-		(6,850	)		(6,850	)

Balance as of March 31, 2024		67,283,574		671		329	$	1		2,300	$	1		683,903		(647,965	)		36,611

See accompanying notes to the unaudited condensed consolidated financial statements.

Cadiz Inc.

Notes to the Consolidated Financial Statements

NOTE 1 – BASIS OF PRESENTATION

The Condensed Consolidated Financial Statements and notes have been prepared by Cadiz Inc., also referred to as “Cadiz” or “the Company”, without audit and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

The foregoing Condensed Consolidated Financial Statements include the accounts of the Company and contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair statement of the Company’s financial position, the results of its operations and its cash flows for the periods presented and have been prepared in accordance with generally accepted accounting principles.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates and such differences may be material to the financial statements. The results of operations for the three months ended March 31, 2025, are not necessarily indicative of results for the entire fiscal year ending December 31, 2025.

Liquidity

The Condensed Consolidated Financial Statements of the Company have been prepared using accounting principles applicable to a going concern, which assumes realization of assets and settlement of liabilities in the normal course of business.

The Company incurred losses of $9.6 million for the three months ended March 31, 2025, compared to $6.9 million for the three months ended March 31, 2024. The Company had working capital of $16.6 million at March 31, 2025 and used cash in its operations of $3.6 million for the three months ended March 31, 2025. The higher loss in 2025 was primarily due to increased professional fees incurred in advancing the development of our groundwater storage project (the “Mojave Groundwater Bank”) and higher compensation costs related to stock based non-cash bonus awards.

Cash requirements during the three months ended March 31, 2025 primarily reflect certain operating and administrative costs related to the Company’s land, water, infrastructure and technology assets for water solutions including the Mojave Groundwater Bank, agricultural operations and water filtration business. The Company’s present activities are focused on the development of its assets in ways that meet an urgent need for groundwater storage capacity in Southern California and growing demand for affordable, reliable, long-term water supplies that provide water security against inevitable drought periods in the Southwestern United States.

Cadiz Inc.

On March 6, 2024, the Company entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund 2012 (“Heerema”). The Third Amended Credit Agreement provides, among other things, (a) a new tranche of senior secured convertible terms loans from Heerema in an aggregate principal amount of $20 million, having a maturity date of June 30, 2027 (“New Secured Convertible Debt”); (b) the aggregate principal amount of the secured non-convertible term loans acquired by Heerema from an existing lender has been increased from $20 million to $21.2 million and the applicable repayment fee in respect thereof has been eliminated; (c) the Convertible Loan existing prior to the Third Amended Credit Agreement, in an aggregate principal amount of approximately $16 million plus interest accruing thereon, has become unsecured; and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027 (see “Note 3 – Long-Term Debt”, below).

On November 5, 2024, the Company completed the sale and issuance of 7,000,000 shares of its common stock to certain institutional investors in a registered direct offering. The shares of common stock were sold at a purchase price of $3.34 per share, for aggregate gross proceeds of $23.4 million and aggregate net proceeds of approximately $22.1 million.

On March 7, 2025, the Company completed the sale and issuance of 5,715,000 shares of its common stock to certain institutional investors in a registered direct offering. The shares of common stock were sold at a purchase price of $3.50 per share, for aggregate gross proceeds of approximately $20.0 million and aggregate net proceeds of approximately $18.3 million.

The Company may meet its debt and working capital requirements through a variety of means, including extension, refinancing, equity placements, the sale or other disposition of assets, or reductions in operating costs. The covenants in the senior secured debt do not prohibit the Company’s use of additional equity financing and allow the Company to retain 100% of the proceeds of any common equity financing. The Company does not expect the loan covenants to materially limit its ability to finance its water and agricultural development activities.

Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from each financial statement issuance date. Management evaluates the Company’s liquidity to determine if there is a substantial doubt about the Company’s ability to continue as a going concern. In the preparation of this liquidity assessment, management applies judgement to estimate the projected cash flows of the Company including the following: (i) projected cash outflows (ii) projected cash inflows, (iii) categorization of expenditures as discretionary versus non-discretionary and (iv) the ability to raise capital. The cash flow projections are based on known or planned cash requirements for operating costs as well as planned costs for project development.

Limitations on the Company’s liquidity and ability to raise capital may adversely affect it. Sufficient liquidity is critical to meet the Company’s resource development activities. Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can be no assurance that its liquidity requirements will continue to be satisfied. If the Company cannot raise needed funds, it might be forced to make substantial reductions in its operating expenses, which could adversely affect its ability to implement its current business plan and ultimately its viability as a company.

Cadiz Inc.

Supplemental Cash Flow Information

During the three months ended March 31, 2025, approximately $371,000 in interest payments on the Company’s senior secured debt was paid in cash and approximately $671,000 was recorded as interest payable in kind. There are no scheduled principal payments due on the senior secured debt prior to its maturity.

At March 31, 2025, accruals for cash dividends payable on the Series A Preferred Stock was $1.27 million (see Note 9 – “Common and Preferred Stock”). The cash dividends were paid on April 15, 2025.

At March 31, 2025, accruals for purchases of property, plant and equipment and water programs received was approximately $4.3 million and are expected to be paid in the second fiscal quarter of 2025.

The balance of cash, cash equivalents, and restricted cash as shown in the condensed consolidated statements of cash flows is comprised of the following:

Cash, Cash Equivalents and Restricted Cash	March 31, 2025		December 31, 2024		March 31, 2024
*(in thousands)*

Cash and Cash Equivalents	$	21,569	$	17,292	$	19,212
Restricted Cash		-		-		-
Long-Term Restricted Cash		2,759		134		134
Cash, Cash Equivalents and Restricted Cash in the Consolidated Statement of Cash Flows	$	24,328	$	17,426	$	19,346

Recent Accounting Pronouncements

Accounting Guidance Not Yet Adopted

In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40)(“ASU 2024-03”). ASU 2024-03 which requires disaggregated disclosures of income statement expenses for public business entities. ASU 2024-03 is effective for fiscal years beginning after December 15, 2025, and for interim reporting periods that begin after December 15, 2027. The Company is currently assessing this new guidance and expect this standard will not have a material impact on the consolidated financial statements.

Accounting Guidance Adopted

In November 2023, the Financial Account Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. ASU 2023-07, Segment Reporting (Topic 280)(“ASU 2023-07”). ASU 2023-07 modifies the disclosure and presentation requirements of reportable segments. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within those financial years beginning after December 15, 2024, with early adoption permitted. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. The adoption of this new standard as of December 31, 2024, had no material impact on the Company’s consolidated financial statements.

Cadiz Inc.

In December 2023, the Financial Account Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740)(“ASU 2023-09”). ASU 2023-09 expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash tax paid in the U.S. and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The adoption of this new standard as of January 1, 2025, had no material impact on the Company’s consolidated financial statements,

NOTE 2 – REPORTABLE SEGMENTS

The Company currently operates in two reportable segments based upon its organizational structure and the way in which its operations are managed and evaluated. The Company’s largest segment is Land and Water Resources, which comprises all activities regarding its properties in the eastern Mojave Desert including pre-revenue development of the Mojave Groundwater Bank (supply, storage and conveyance), and agricultural operations. The Company’s second operating segment is its Water Filtration Technology business, consisting of ATEC Water Systems LLC (“ATEC”), which provides innovative water filtration solutions for impaired or contaminated groundwater sources. The Chief Operating Decision-Maker for our Land and Water Resources segment is the Chief Executive Officer of Cadiz Inc. and for the Water Filtration Technology segment is the Chief Executive Officer of ATEC.

We evaluate our performance based on segment operating (loss). Interest expense, income tax expense and losses related to equity method investments are excluded from the computation of operating (loss) for the segments. Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the three months ended March 31, 2025 and 2024:

	Three Months Ended March 31, 2025
(in thousands)	Land and Water Resources			Water Filtration Technology		*Total*

Revenues		565			2,389		2,954

Costs and expenses:
Cost of sales		499			1,579		2,078
General and administrative		7,397			710		8,107
Depreciation		295			7		302

Total costs and expenses		8,191			2,296		10,487

Operating (loss) income	$	(7,626	)	$	93	$	(7,533	)

	Three Months Ended March 31, 2024
(in thousands)	Land and Water Resources			Water Filtration Technology			*Total*

Revenues		636			485			1,121

Costs and expenses:
Cost of sales		660			344			1,004
General and administrative		4,480			250			4,730
Depreciation		282			13			295

Total costs and expenses		5,422			607			6,029

Operating loss	$	(4,786	)	$	(122	)	$	(4,908	)

Cadiz Inc.

Assets by operating segment are as follows (dollars in thousands):

	March 31, 2025		December 31, 2024
Operating Segment:
Water and Land Resources	$	134,635	$	123,786
Water Filtration Technology		10,941		10,708
	$	145,576	$	134,494

Goodwill by operating segment is as follows (dollars in thousands):

	March 31, 2025		December 31, 2024
Operating Segment:
Water and Land Resources	$	3,813	$	3,813
Water Filtration Technology		1,901		1,901
	$	5,714	$	5,714

Property, plant, equipment and water programs consist of the following (dollars in thousands):

	March 31, 2025
	Water and Land Resources			Water Filtration Technology				Total

Land and land improvements	$	33,069		$	-		$	33,069
Water programs		30,955			-			30,955
Pipeline		22,102			-			22,102
Buildings		1,805			-			1,805
Leasehold improvements, furniture and fixtures		1,605			8			1,613
Machinery and equipment		3,907			247			4,154
Construction in progress		9,277			6			9,283
		102,720			261			102,981
Less accumulated depreciation		(10,691	)		(185	)		(10,876	)
	$	92,029		$	76		$	92,105

	December 31, 2024
	Water and Land Resources		Water Filtration Technology			Total

Land and land improvements	$	33,069	$	-	$	33,069
Water programs		29,383

SEC Form 10-Q filed by CADIZ Inc.