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What changed in CADIZ INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CADIZ INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+201 added−189 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-28)

Top changes in CADIZ INC's 2024 10-K

201 paragraphs added · 189 removed · 135 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

60 edited+42 added−35 removed20 unchanged
Biggest changeRevenue from alfalfa totaled $0.8 million in 2023 and revenue from leased land totaled $0.4 million. Permits Water Supply and Storage Project From 2010 – 2012, the Water Project completed a California Environmental Quality Act (“CEQA”) review process including the completion of a comprehensive Final Environmental Impact Report (“FEIR”).
Biggest changeWater Supply and Water Storage From 2010 – 2012, we completed a California Environmental Quality Act (“CEQA”) review process including the approval of a comprehensive Final Environmental Impact Report (“FEIR”) for the conservation of 2.5 million acre-feet of water from the aquifer system over a 50-year period (50,000 AFY for 50 years) and the storage and banking of up to one million acre-feet of water in the aquifer system at the Cadiz Property which is now called the Mojave Groundwater Bank.
Further, we urge professional development opportunities and mentorship to cultivate talent throughout the Company. As a small workforce, we focus on skill sharing and experience diversity in the workplace. Our full-time employees have regular opportunities to work with senior leadership and/or Board members in pursuit of business objectives. Management and Board leadership provide annual reviews of employee performance.
Further, we urge professional development opportunities and mentorship to cultivate talent throughout our company. As a small workforce, we focus on skill sharing and experience diversity in the workplace. Our full-time employees have regular opportunities to work with senior leadership and/or Board members in pursuit of business objectives. Management and Board leadership provide annual reviews of employee performance.
It pioneered technology to provide cost-effective high-rate removal of iron and manganese and then expanded its reach to a full range of contaminants, including, arsenic, Chromium-6, nitrates, and other contaminants found in groundwater that limit the available supply of drinking water for many communities.
It pioneered technology to provide cost-effective high-rate removal of iron and manganese and then expanded its reach to a full range of contaminants, including, arsenic, Chromium-6, nitrates, PFAS and other contaminants found in groundwater that limit the available supply of drinking water for many communities.
The TRP started in 2022 and meets regularly to collect and assess pre-operational data and make recommendations for monitoring protocols to be implemented upon commencement of operations. Northern Pipeline The 220-mile Northern Pipeline is a former segment of a 1,200 mile, 30” steel pipeline constructed in 1985 by All American Pipeline Company to convey oil.
The TRP meets regularly to collect and assess pre-operational data and make recommendations for monitoring protocols to be implemented upon commencement of operations. Northern Pipeline The 220-mile Northern Pipeline is a former segment of a 1,200 mile, 30” steel pipeline constructed in 1985 by All American Pipeline Company to convey oil.
The average tenure of our full-time employees is approximately 10 years, reflecting our positive work environment that offers opportunities to develop new skills and advance to new positions. We believe we offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages to our employees, including a 401(k) plan.
The average tenure of our full-time employees is approximately 6 years, reflecting our positive work environment that offers opportunities to develop new skills and advance to new positions. We believe we offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages to our employees, including a 401(k) plan.
The water industry customer base includes regional wholesale water agencies responsible for acquiring, distributing and managing imported water resources; water and wastewater utilities that supply, treat and monitor clean water or transport, treat and analyze wastewater or storm water through an infrastructure network; government agencies responsible for public safety, environmental protection and economic security; and commercial and industrial customers requiring long-term, reliable supplies of clean, affordable water for their customers and businesses.
The water industry customer base includes regional wholesale water agencies responsible for acquiring, distributing and managing imported water resources; water and wastewater utilities that supply, treat and monitor clean water or transport, treat and analyze wastewater or storm water through an infrastructure network; government agencies responsible for public safety, environmental protection and economic security; and commercial and industrial customers requiring long-term, reliable supplies of clean, affordable water for their customers and businesses. 2 Cadiz Inc.
ITEM 1. Description of Business Business Overview We are a water solutions provider with a unique combination of land, water, pipeline and water filtration technology assets located in Southern California between major water systems serving population centers in the Southwestern United States.
ITEM 1. Business Business Overview We are a water solutions provider with a unique combination of land, water, pipeline and water filtration assets located in Southern California between major water systems serving population centers in the Southwestern United States.
The total storage capacity of the aquifer system is larger than Southern California’s largest surface reservoir, Diamond Valley Lake, but unlike a surface reservoir would not suffer evaporative losses. 3 Cadiz Inc.
The total storage capacity of the aquifer system is larger than Southern California’s largest surface reservoir, Diamond Valley Lake, but unlike a surface reservoir would not suffer evaporative losses. 4 Cadiz Inc.
To deliver conserved water off-property or import water for storage at the Cadiz Ranch, we are currently developing two potential pipeline routes for the Water Project; the Southern Pipeline which would extend southwards from the Cadiz Property to the Colorado River Aqueduct in Rice, California and the Northern Pipeline which extends northwards from the Cadiz Property to Barstow, Antelope Valley, and Wheeler Ridge, California.
To deliver conserved water off-property or import water for storage at the Cadiz Ranch, we are currently developing two potential pipeline routes for the Mojave Groundwater Bank - the Southern Pipeline which would extend southwards from the Cadiz Property to the Colorado River Aqueduct in Rice, California and the Northern Pipeline, which extends northwards from the Cadiz Property to Barstow, Antelope Valley, and Wheeler Ridge, California.
The Addendum concluded that there are no significant adverse impacts associated with the minor changes to the Water Project and further summarized that the spring studies did not change the conclusions of the FEIR’s analysis. The Addendum was not challenged in court and the statute of limitations to challenge has expired. 6 Cadiz Inc.
The Addendum concluded that there are no significant adverse impacts associated with the minor changes to the project and further summarized that the spring studies did not change the conclusions of the FEIR’s analysis. The Addendum was not challenged in court and the statute of limitations to challenge has expired.
Human Capital Resources As of December 31, 2023, we employed 18 full-time employees (i.e. those individuals working more than 1,000 hours per year) including 8 full-time employees at ATEC. Our business operations also rely on third-party contracted seasonal and temporary workers, as well as consultants and other professional vendors to help augment specialized human capital and talent needs.
Human Capital Resources As of December 31, 2024, we employed 25 full-time employees (i.e. those individuals working more than 1,000 hours per year) including 16 full-time employees at ATEC. Our business operations also rely on third-party contracted seasonal and temporary workers, as well as consultants and other professional vendors to help augment specialized human capital and talent needs.
The route and construction within the railroad ROW were evaluated and approved during the Water Project’s CEQA permitting process in 2012.
The route and construction within the railroad ROW were evaluated and approved during the CEQA permitting process in 2012.
San Bernardino County, the local agency responsible for groundwater use at the Cadiz Property, approved the Groundwater Monitoring, Management and Mitigation Plan (‘GMMMP”) for the Water Project in 2012, and requires regular reporting of groundwater levels and conditions.
San Bernardino County, the local agency responsible for groundwater use at the Cadiz Property, also approved a Groundwater Monitoring, Management and Mitigation Plan (‘GMMMP”) for the project in 2012 that requires regular reporting of groundwater levels and conditions.
The route of the Northern Pipeline intersects several water conveyance facilities that serve Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. 1 Cadiz Inc.
The route of the Northern Pipeline intersects several water conveyance facilities that serve Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline.
In the water filtration market, we compete with companies that offer products similar to ours. Some of these companies have greater financial resources, operational experience, and technical capabilities than we do.
In the groundwater treatment market, we compete with companies that offer products similar to ours. Some of these companies have greater financial resources, operational experience, and technical capabilities than we do.
Our SEC filings are also available to the public on the internet at the SEC’s website http://www.sec.gov .
Our SEC filings are also available to the public on the internet at the SEC’s website http://www.sec.gov . 12 Cadiz Inc.
Human capital is generally managed by our CEO and CFO, and employment policies are overseen by the Board, particularly the Compensation Committee. Our Board encourages diversity in the workforce. Approximately 65% of our senior executives are female.
Human capital is generally managed by our CEO and CFO, and employment policies are overseen by the Board, particularly the Compensation Committee. Our Board encourages diversity in the workforce. Approximately 55% of our senior executives are female. 11 Cadiz Inc.
Land We have 46,000 acres of landholdings including: ● 9,600 acres of land permitted for agriculture. ● 9,600 acres of land adjacent to the existing permit area that could be used for future agricultural development, but is not yet permitted. ● 26,800 acres of rangeland some of which is considered sensitive habitat for Desert Tortoise and other wildlife.
Land The Cadiz Property includes 46,000 acres of landholdings consisting of: ● 9,600 acres of land permitted for agriculture; ● 9,600 acres of land adjacent to the existing permit area that could be used for future agricultural development but which are not yet permitted; and ● 26,800 acres of rangeland some of which is considered sensitive habitat for Desert Tortoise and other wildlife.
Since California has scarce water resources and an increasing demand for available water, we believe that location, price and reliability of delivery are the principal competitive factors affecting agriculture and the demand for water supply, storage and conveyance in California. We believe our projects are competitive with other sources of water and farmland.
Since California has scarce water resources and an increasing demand for available water, we believe that location, price and reliability of delivery are the principal competitive factors affecting agriculture and the demand for water supply and storage in California. We believe the Cadiz Ranch and Mojave Groundwater Bank projects are competitive with other sources of water and farmland.
When bidding for water filtration projects, however, our current experience suggests that the market opportunity is very large, our products and services are highly competitively, and there is no clear dominant or preferred competitor in the markets in which we compete. 10 Cadiz Inc.
When bidding for groundwater treatment projects, however, our current experience suggests that the market opportunity is very large, our products and services are highly competitively, and there is no clear dominant or preferred competitor in the markets in which we compete.
Credits sold by the Fenner Bank are dedicated to funding the permanent preservation of the land by the San Diego Habitat Conservancy and research by San Diego Zoo Global into desert tortoise health and species protection. 8 Cadiz Inc.
Credits sold by the Fenner Bank are dedicated to funding the permanent preservation of the land by the San Diego Habitat Conservancy and research by San Diego Zoo Global into desert tortoise health and species protection. 7. Support stable water rates.
“Description of Business - Permits”, below). Water Storage In addition to making available new water supply, the Water Project would also look to manage the groundwater basin to offer storage in our aquifer system for up to one-million acre-feet of fresh water that would be imported and held in storage until needed in future dry years.
Water Storage In addition to making available new water supply, the Mojave Groundwater Bank can also offer storage in our aquifer system for up to one-million acre-feet of fresh water that would be imported and held until needed in future dry years.
Because water in the aquifer system will continue to be lost to evaporation, surplus water that is captured and withdrawn before it evaporates is recognized as a new water supply (“conserved” water).
Because water in the aquifer system would otherwise be lost to evaporation, surplus water that is captured and withdrawn for beneficial uses before it evaporates is recognized as a new water supply (i.e. “conserved” water).
In August 2019, an Addendum to the FEIR was adopted by FVWA to address updates to the Water Project proposal, such as its water treatment program and pipeline route. The Addendum also assessed new studies published about natural springs in the Water Project watershed.
In August 2019, an Addendum to the FEIR was adopted to address updates to the project proposal, including a water treatment program and changes to the pipeline route. The Addendum also assessed new studies published about natural springs in the surrounding watershed at the project area.
In the first quarter of 2024, we entered into agreements with multiple public water systems to purchase 15,000 acre-feet per year (“AFY”) of annual water supply from us to be delivered via the Northern Pipeline. These agreements cumulatively represent 60% of the full capacity (25,000 AFY) of the Northern Pipeline.
In 2024, we entered into agreements with multiple public water systems for their purchase of 21,275 acre-feet per year (“AFY”) of annual water supply from the Mojave Groundwater Bank to be delivered via the Northern Pipeline. These agreements cumulatively represent approximately 85% of the full capacity (25,000 AFY) of the Northern Pipeline.
In 2008, we entered into a 99-year lease with the Arizona & California Railroad Company (“ARZC”) that will allow us to co-locate and construct a 43-mile water conveyance pipeline (“Southern Pipeline”) within an existing, active railroad right-of-way (“ROW”) that extends from the Cadiz Ranch to the Colorado River Aqueduct (“CRA”), one of Southern California’s primary sources of water supply.
In 2008, we entered into a 99-year lease with the Arizona & California Railroad Company (“ARZC”) to co-locate and construct a water conveyance pipeline system (“Southern Pipeline”) within ARZC’s existing, active railroad right-of-way (“ROW”) that extends 43-miles from the Cadiz Ranch to the Colorado River Aqueduct (“CRA”), one of Southern California’s primary sources of water supply, allowing water supply to be moved between the Cadiz Ranch and the CRA for off property beneficial uses. 1 Cadiz Inc.
This includes providing water and power to the railroad for fire protection and improving access roads and transloading operations, among other things. By co-locating the conveyance pipeline within this existing railroad ROW, Water Project construction would avoid impacts to desert habitats.
As part of the lease arrangement, we agreed to provide necessary railroad improvements in furtherance of railroad purposes. This includes providing water and power to the railroad for fire protection and improving access roads and transloading operations, among other things. By co-locating the conveyance pipeline within this existing railroad ROW, pipeline construction would avoid impacts to desert habitats.
Water Filtration Technology In the fourth quarter of 2022, we completed the acquisition of the assets of ATEC Systems, Inc. into ATEC Water Systems, LLC (“ATEC”), which provides innovative water filtration solutions for impaired or contaminated groundwater sources.
These approvals will be bound by the existing CEQA record of review, study, and approvals. Water Filtration Technology In the fourth quarter of 2022, we completed the acquisition of the assets of ATEC Systems, Inc. into ATEC Water Systems, LLC (“ATEC”), which provides innovative water filtration solutions for impaired or contaminated groundwater sources.
Competition We face competition in the acquisition, development and sale of water and land assets from a variety of parties. We also experience competition in the market for our water supply, storage and conveyance solutions and agriculture products associated with our water and land assets.
We also experience competition in the market for our water supply, storage and conveyance solutions and agriculture products associated with our water and land assets.
Agricultural operations are also generally subject to regulation by local agencies, such as county governments, as well as state environmental and water statutes.
Our agricultural operations are also generally subject to regulation by local agencies, such as county governments, as well as state environmental and water statutes. We are in compliance with all material applicable regulations.
We are focused on both executing a strategy to support progress and evaluating our diversity and inclusion strengths and opportunities to ensure our workforce reflects the communities in which we operate. Regulation Our operations are subject to various federal, state and local laws and regulations, as detailed throughout Item 1.
We are focused on executing on our objectives of implementing our projects and realizing the cash flow potential of our assets, while also evaluating opportunities to ensure our workforce reflects the diversity of the communities in which we operate. Regulation Our operations are subject to various federal, state and local laws and regulations, as detailed throughout Item 1.
In accordance with the structure of such agreements, it is anticipated that we will contribute an annual supply of 50,000 AFY of water from the Water Project into Fenner Gap Mutual Water Company ("FGMWC"), a mutual water company, to be owned jointly by the participating public water agencies.
Under our water supply agreements, it is anticipated that we will contribute an annual supply of 50,000 AFY of water into Fenner Gap Mutual Water Company ("FGMWC"), a mutual water company that we presently manage that will ultimately be jointly owned by all participating public water agencies that have acquired water supply from the Mojave Groundwater Bank.
Seasonality Our water resource development and water filtration activities are not seasonal in nature. Farming operations at the Cadiz Ranch include the year-round cultivation of grain crops, including alfalfa. These operations are subject to general seasonal trends that are characteristic of the agricultural industry.
Farming operations at the Cadiz Ranch include the year-round cultivation of grain crops, including alfalfa. These operations are subject to general seasonal trends that are characteristic of the agricultural industry. Competition We face competition in the acquisition, development and sale of water and land assets from a variety of parties.
Southern Pipeline In 2008, we entered into a 99-year lease agreement with the ARZC to utilize a portion of its existing ROW southwest from the Cadiz Property to the Colorado River Aqueduct for a conveyance pipeline and related facilities. As part of the lease arrangement, we agreed to provide necessary railroad improvements in furtherance of railroad purposes.
We expect to process these construction permits in coordination with our public agency partners in 2025. Southern Pipeline In 2008, we entered into a 99-year lease agreement with the ARZC to utilize a portion of its existing ROW southwest from the Cadiz Property to the Colorado River Aqueduct for a conveyance pipeline and related facilities.
When the Northern Pipeline becomes operational for water conveyance, and the Southern Pipeline is built, the Water Project would interconnect Southern California’s primary water delivery systems for the first time, enabling more flexible trading among participants on these systems. See also “Permits”, below, for details about the history and future requirements for local, state and federal permits for these pipelines.
When the Northern Pipeline becomes operational for water conveyance, and the Southern Pipeline is built, the Mojave Groundwater Bank would interconnect Southern California’s primary water delivery systems for the first time, enabling more flexible trading among participants on these systems.
In 2001, the pipeline was acquired by El Paso Natural Gas (“EPNG”) and authorized for natural gas conveyance. In 2011, we reserved the segment in an option agreement with EPNG and began to explore using the pipeline for water conveyance.
In 2001, the pipeline was acquired by El Paso Natural Gas (“EPNG”) and authorized for natural gas conveyance. In 2011, we entered into an option agreement with EPNG to explore using the pipeline segment for water conveyance. In June 2021, we completed the acquisition of the pipeline for $19 million and presently own the entire 220-mile asset in fee.
To deliver water from the Southern Pipeline to any point of use, the operating parties will require (i) an agreement with Metropolitan Water District of Southern California (“MWD”) to move water supplies from the Water Project in the CRA; and (ii) a finding by the California State Lands Commission (“SLC”) that conveying water from the Water Project in the CRA will not adversely affect the desert environment.
To deliver water from the Mojave Groundwater Bank to any participating agencies via the Southern Pipeline, the operating parties will require (i) an agreement with Metropolitan Water District of Southern California (“MWD”) to move water supplies from the Mojave Groundwater Bank in the CRA; and (ii) a finding by the California State Lands Commission (“SLC”) that conveying water from Cadiz Ranch in the CRA will not adversely affect the desert environment in accordance with California Water Code Section 1815, which requires desert groundwater projects to apply for a review by the SLC prior to moving water in public conveyance facilities like the CRA.
We own approximately 46,000 acres of land with high-quality, naturally recharging groundwater resources in Southern California’s Mojave Desert (“Cadiz Property”). Our land holdings with vested water rights were assembled by our founders in the early 1980s, relying on NASA imagery that identified a desert aquifer system at the base of a vast Southern California watershed.
Our land holdings with vested water rights were assembled by our founders in the early 1980s, relying on NASA imagery that identified a desert aquifer system beneath a vast 2,000 square mile Southern California watershed.
The capacity of the Southern Pipeline, which is expected to be constructed within the ARZC ROW, ranges from 75,000 AFY to 150,000 AFY depending on the pipeline diameter, ranging from 54” to 84”, that will be selected to accommodate imported water storage.
The capacity of the Northern Pipeline for water conveyance is 25,000 AFY. The capacity of the Southern Pipeline, which is expected to be constructed within the ARZC ROW, is anticipated to be 150,000 AFY depending on the final pipeline design to accommodate imported water storage.
Through membership in the mutual water company, public water agencies will be able to purchase, for a 40-year term (take or pay), up to 50,000 AFY of water at our wellhead at an agreed upon market price estimated to start at approximately net $850/AFY to us and subject to annual inflation adjustment.
Through membership in the mutual water company, public water agencies will purchase, for up to a 50-year term (take on delivery), their share of the 50,000 AFY of water at our wellhead at an agreed upon market price estimated to net approximately $850/AFY in 2024 dollars to us subject to annual inflation adjustment, after payment of a pro rata portion of capital costs for construction of all facilities of the Mojave Groundwater Bank project, wheeling fees and O&M costs.
We submitted a patent application for our treatment process of nitrate removal in 2023 and expect to file an application for another constituent during 2024. We manufacture and sell an array of small, modular vertical steel tanks ranging from 14-inch to 48-inch diameter coupled with filter media to remove groundwater contaminants for our customers.
We have three U.S. patent applications pending for our treatment processes and filter design. 8 Cadiz Inc. We manufacture and sell an array of small, modular vertical steel tanks ranging from 14-inch to 48-inch in diameter coupled with filter media to remove groundwater contaminants for our customers.
Hydrological and geological study of the area has continued, and we regularly monitor and report groundwater conditions to the County of San Bernardino as part of our agricultural use.
Hydrological and geological study of the area has continued, and we regularly monitor and report groundwater conditions to the County of San Bernardino as part of our agricultural use. The County of San Bernardino and SMWD through FVWA established an inter-agency Technical Review Panel (“TRP”) mandated by the GMMMP approvals to provide scientific and environmental monitoring of the project area.
The FEIR concluded that Water Project operations, including the conservation of 2.5 million acre-feet of water from the aquifer system over a 50-year period (50,000 AFY for 50 years) would not cause any significant adverse environmental impacts. The FEIR was certified on July 31, 2012, by Santa Margarita Water District (“SMWD”), the lead participating water agency.
The FEIR concluded that operations, would not cause any significant adverse environmental impacts. The FEIR was certified on July 31, 2012, by Santa Margarita Water District (“SMWD”), the lead participating water agency. 6 Cadiz Inc.
In June 2021, we completed the acquisition of the pipeline for $19 million and own the entire 220-mile asset in fee. Changing the use of the Northern Pipeline to water conveyance is subject to applicable local, state and federal laws.
Changing the use of the Northern Pipeline to water conveyance is subject to applicable local, state and federal laws.
Business Strategy With the addition of pipeline infrastructure and water filtration technology to our portfolio of assets, our business now enables us to begin to offer integrated products and services to public water systems and other water industry customers in addition to products and services focused solely on water supply and water storage.
Business Strategy Our diversified portfolio of related water assets enables us to offer products and services to public water systems and other water industry customers in an integrated manner to meet the growing need for reliable access to clean water. Description of Assets Assets in our portfolio include Land, Water Supply, Water Storage, Water Conveyance, and Water Filtration Technology.
Under an extensive groundwater monitoring plan approved by local permitting authorities, Water Project operations and withdrawals of groundwater will be limited to sustainable amounts that preserve the health of the aquifer system and safeguard the desert ecosystem.
One acre-foot is approximately 326,000 gallons or enough water to serve two average households of four people for 1 year. Under the extensive groundwater monitoring plan approved by the County and local permitting authorities, Mojave Groundwater Bank operations and withdrawals of groundwater are limited to sustainable amounts that preserve the health of the aquifer system and safeguard the desert ecosystem.
The water supply element of our Water Project is expected to conserve 50,000 acre-feet per year at the Cadiz Property and make this new water supply available to underserved communities in Southern California.
Water Supply In 2012, we received approval from the County of San Bernardino to conserve an average of 50,000 acre-feet per year from the aquifer system at the Cadiz Ranch for 50 years (2.5 million acre-feet in total) and make this new water supply available off-property to underserved communities in Southern California.
Our portfolio of assets includes 2.5 million acre-feet of water supply (permits complete), 220 miles of existing, buried pipeline, 1 million acre-feet of groundwater storage capacity, and versatile, scalable and cost-effective water filtration technology. We will provide products and services to public water systems, government agencies and commercial clients.
Our portfolio of assets includes 2.5 million acre-feet of permitted water supply, 1 million acre-feet of groundwater storage capacity, 220 miles of existing, underground pipeline, 43 miles of right-of-way entitlements for pipeline construction, and versatile, scalable and cost-effective water filtration technology that removes contaminants and constituents of concern from groundwater.
In February 2015, the California Department of Fish and Wildlife approved our establishment of the Fenner Valley Desert Tortoise Conservation Bank (“Fenner Bank”), a land conservation bank that makes available these properties for mitigation of impacts to tortoise and other sensitive species that would be caused by any development across the Southern California desert.
Approximately 7,400 acres of our 46,000 acres of landholdings are permanently dedicated to conservation. as the Fenner Valley Desert Tortoise Conservation Bank (“Fenner Bank”), a land conservation bank that makes available these properties for mitigation of impacts to tortoise and other sensitive species.
Additionally, all public agency participants with agreements to contract for water from the Water Project must serve at least one disadvantaged community within their service area. 2. Improve local water quality.
Additionally, all public agency participants with agreements to contract for water from the Mojave Groundwater Bank must serve at least one disadvantaged community within their service area. 2. Ownership of Water Infrastructure by Native American Tribes. Tribal nations have disproportionally been underserved by water agencies and infrastructure needed to reliably deliver safe clean water.
The aquifer system underlying our property in the Cadiz Valley (“Cadiz Ranch”) presently holds 17 - 34 million acre-feet of groundwater in storage – comparable in size to the largest reservoir in the United States, Lake Mead.
The aquifer system underlying the watershed is estimated to hold 30 - 50 million acre-feet of groundwater in storage, comparable in size to the capacity of the largest reservoir in the United States - Lake Mead. Since the late 1980s, we have farmed at our contiguous property at the base of the watershed (“Cadiz Ranch”) relying on groundwater for irrigation.
Such storage capacity could be used to store water purchases from the Cadiz water supply or could be used for imported water (once sufficient conveyance infrastructure is available). Water Conveyance Water conveyance facilities are required to effectuate the sale of water supply and water storage.
Similar to the contracts for supply discussed above, water providers and entities with access to surplus water would contract for reserved storage capacity in our aquifer system through FGMWC. Such storage capacity could be used to store water purchases from our water supply or could be used for imported water (once sufficient conveyance infrastructure is available).
All Water Project facilities will be built on private lands, disturbed public lands or within existing transportation corridors to avoid any impacts on habitats. We have dedicated portions of our Mojave Desert properties within protected areas and habitats to permanent conservation. 7. Support stable water rates.
All Mojave Groundwater Bank facilities will be built on disturbed lands or within existing transportation corridors to avoid any impacts on habitats.
It is available to all and delivered sustainably for generations to come. 1. Water for disadvantaged communities. We have committed to donate clean affordable water supply to disadvantaged communities. To date, we have committed more than 200,000 AF in water supply to serve disadvantaged communities in the Coachella Valley and California ’ s High Desert communities.
We have committed to make available clean affordable water supply from the Cadiz Property to rural, underserved, tribal and disadvantaged communities that lack reliable access to California’s traditional sources of water supply. To date, we have committed to make available more than 250,000 AF of water supply to serve disadvantaged communities in the Coachella Valley and California’s High Desert communities.
The Water Project is expected to create and support nearly 6,000 jobs across the local economy during two phases of construction; 10% of jobs are reserved for veterans. We maintain a Project Labor Agreement with building trades and labor unions to employ their members during construction of Water Project facilities.
We have also entered into agreements with public water agencies that serve disadvantaged communities to supply water from the Mojave Groundwater Bank at reduced cost. 8. Create and support good-paying jobs. The Mojave Groundwater Bank is expected to create and support nearly 6,000 jobs across the local economy during two phases of construction; 10% of jobs are reserved for veterans.
The realization of income from our assets could be delayed, reduced or eliminated based on regulatory restrictions and/or processes. 11 Cadiz Inc.
Because of the discretionary nature of these approvals, our ability to secure these approvals and receive income from our water assets could be delayed, reduced or eliminated based on regulatory processes. See also more information in “Risk Factors”.
The Northern Pipeline crosses critically dry, rural and underserved regions of California and it could directly augment water supply access for 23 state-designated disadvantaged communities along its route. We presently hold agreements with parties interested in using the Northern Pipeline for conveyance, storage and supply to serve these disadvantaged communities.
Our Northern Pipeline intersects several water storage and conveyance facilities in Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. The Northern Pipeline offers California water purveyors an opportunity to connect available supplies to underserved regions of the State and directly augment water supply access for 23 state-designated disadvantaged communities along its route.
We developed the land for our agricultural use and have farmed ourselves and extended leases to private farming operations since the 1980s. We maintain approximately 1,000 acres in current agriculture development of grain crops, primarily in alfalfa plantings, and have 2,100 acres leased for farming activities by Fenner Valley Farms LLC.
We currently farm approximately 1,000 acres of grain crops, primarily in alfalfa plantings, and have leased 2,100 acres for farming activities by Fenner Valley Farms LLC. 3 Cadiz Inc. In 2024, we entered into a lease agreement with RIC Energy to build a hydrogen production facility at the Cadiz Ranch.
The use of the Northern Pipeline for water conveyance will convert a former oil and gas pipeline for the beneficial use of water conveyance. The recycling of an existing pipeline will reduce greenhouse gas emissions and reduce the energy load on the state’s current water transportation sources. 9 Cadiz Inc. 5. Farmworker training.
The recycling of this existing pipeline will reduce greenhouse gas emissions and reduce the energy load on the state’s current water transportation sources. 5. Creation of new renewable energy. Our Southern Pipeline will feature in-line turbines that will generate renewable hydropower.
It is anticipated that conveyance facilities will be owned and operated by participating public agencies through Fenner Valley Water Authority, a Joint Powers Authority (“FVWA” or “JPA”) comprised of public water agencies participating in the Water Project that would operate the pipelines to deliver water to point of use.
The letters of intent and letter of agreement are non-binding and subject to on-going due diligence. MGSC is expected to lease the facility assets to Fenner Valley Water Authority, a Joint Powers Authority (“FVWA” or “JPA”) comprised of public water agencies participating in the Mojave Groundwater Bank project to operate the facilities and the groundwater management plan with the FGMWC.
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Description of Assets by Sector Assets in our portfolio include Water Supply, Water Storage, Water Conveyance, Water Filtration Technology and Land. Each asset with an associated revenue model is described below. 2 Cadiz Inc.
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Our customers are public and private water systems, government agencies and commercial businesses. We own approximately 46,000 acres of land with high-quality, naturally recharging groundwater resources in Southern California’s Mojave Desert (“Cadiz Property”).
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Water Supply In 2012, we received approvals from public agencies to implement the Cadiz Water Conservation & Storage Project (“Water Project”), a public-private partnership with California water agencies.
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In 2012, we received permits and entitlements from public agencies for our groundwater storage project (the “Mojave Groundwater Bank”), which will (1) conserve 2.5 million acre-feet of water from the aquifer system over a 50-year period (average of 50,000 acre-feet per year) for off-property beneficial uses in underserved California communities and (2) store up to 1 million acre-feet of imported water in the aquifer system.
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An average of 50,000 acre-feet of water per year is expected to be captured and made available for beneficial use in Southern California communities over 50 years (2.5 million acre-feet in total), an amount of annual supply that could serve approximately 400,000 people each year.
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The permits were challenged in Court and were upheld and sustained in their entirety by judgements in California Superior Court in 2014 and the California Court of Appeal in 2016.
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The Water Project is structured as a public-private partnership in order for us and the participating public water agencies to cooperatively fund capital costs and operating and maintenance (“O&M”) costs required for us to deliver future contracted water supply to the agencies.
Added
To finance the estimated $800 million capital cost to bring the Northern Pipeline, Southern Pipeline and related facilities online to provide supply and storage to public water systems, in December 2024, we established a new business entity, Mojave Groundwater Storage Company LLC (“MGSC”) for public and private investors to take an ownership interest in the facility assets in exchange for equity capital to fund construction.
Removed
Participating public water agencies will fund through FGMWC (a) capital costs for conversion of the Northern Pipeline from gas to water, construction of the Southern Pipeline, construction of pumping stations and appurtenant facilities, and (b) O&M costs. Any contracts and off take facility construction will be subject to environmental review and a project level permitting process (see Item 1.
Added
As of March 2025, we have entered into letters of intent and a letter of agreement with potential MGSC investors for up to $425 million. The letters of intent and letter of agreement are non-binding and subject to on-going due diligence.
Removed
As part of the public-private partnership discussed above, participating water agencies would be eligible to purchase reserved storage capacity in the Cadiz aquifer at negotiated terms due to their participation in the Water Project.
Added
Our land assets support agricultural development that currently provides operating revenue to us. Our water filtration technology business also currently provides us with revenue. Our water supply, water storage, and water conveyance assets are being developed for use and do not yet provide us with revenue.
Removed
Cadiz’ Northern Pipeline is an existing 220-mile 30-inch steel pipeline that intersects several water storage and conveyance facilities in Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. The capacity of the Northern Pipeline for water conveyance is 25,000 AFY.
Added
All development activities related to the water, supply, storage and conveyance assets are reflected in our land and water resources segment. The development process and revenue model for our assets is described below.
Removed
We will lease our pipeline facilities to the JPA for operation of the Water Project through a Facilities Operation Agreement. Participating public agencies may apply for grants and use municipal financing resources to fund the capital expenses for conversion of the pipeline and construction of pumping stations and distribution facilities.
Added
The land is underlain with high quality, groundwater resources capable of supporting a variety of surface activities including agriculture, renewable energy, and water supply and storage banking. Since the 1980s, we have developed the land for our agricultural use and we either farm the property directly or via leases to private farming operators.
Removed
The amortized cost of capital for construction of conveyance facilities is expected to be paid for by participating agencies taking delivery of water via those facilities as described above. Lease payments to us for pipeline facilities will be included in the price for water supply.
Added
Under the agreement, RIC will consider the development of a solar powered green hydrogen production facility on up to 3,000 acres of land at the Cadiz Ranch. In the current development phase, RIC will make payments of $35,000 per year. Upon approval of construction, lease payments will increase to $1,000 per acre.
Removed
The chart below provides the anticipated structure of how the financing and operations of the Water Project would be handled between us and the participating public agencies through FGMWC and FVWA. 4 Cadiz Inc.
Added
RIC will also purchase water from us for $850 per AF, subject to annual inflation adjustments. The surplus energy supply available at the facility will be made available for Mojave Groundwater Bank facilities.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, while we presently hold agreements with multiple public water systems to purchase 15,000 AFY and are in discussions with additional public water agencies to enter agreements to fill the remaining capacity of our Northern Pipeline (25,000 AFY) and whereby participating agencies would finance, own and operate the Northern Pipeline and lease 25,000 AFY of annual supply from us, any contracts and off take facility construction will be subject to standard environmental review and a project level permitting process as conditions precedent.
Biggest changeFor example, while we presently hold agreements with multiple public water systems for their purchase of 21,275 AFY and are in discussions with additional public water agencies to enter agreements for the full supply capacity of our Mojave Groundwater Bank (50,000 AFY) any contracts will be subject to conditions precedent including standard environmental review and permitting.
ITEM 1A. Risk Factors Our business is subject to a number of risks, including those described below. Our Development Activities Have Not Generated Significant Revenues At present, our asset development activities include water resource (supply, storage and conveyance) and agricultural development at our San Bernardino County properties.
ITEM 1A. Risk Factors Our business is subject to a number of risks, including those described below. Our Development Activities Have Not Generated Significant Revenues At present, our asset development activities include water resource (supply, storage and conveyance) and land and agricultural development at our San Bernardino County properties.
Interest is payable quarterly in cash at a 7% annual rate on the $21.2 million of non-convertible loans with PIK interest accruing quarterly at a 7% annual rate on the $16 million of existing convertible loans and $20 million of new convertible loans.
Interest is payable quarterly in cash at a 7% annual rate on the $21.2 million of non-convertible loans with PIK interest accruing quarterly at a 7% annual rate on the $16 million of then existing convertible loans and $20 million of new convertible loans.
Our ability to obtain financing will depend, among other things, on the status of our asset development programs and water filtration technology business and general conditions in the capital markets at the time financing is sought. Any further equity or convertible debt financings would result in the dilution of ownership interests of our current stockholders. 14 Cadiz Inc.
Our ability to obtain financing will depend, among other things, on the status of our asset development programs and water filtration technology business and general conditions in the capital markets at the time financing is sought. Any further equity or convertible debt financings would result in the dilution of ownership interests of our current stockholders. 15 Cadiz Inc.
There is no assurance that we can meet the conditions precedent for any of these contracts and even if we do, there is no assurance that we can receive the needed permits in a timely manner. We cannot predict the terms, if any, which may be imposed in order to proceed with our water and other development programs.
There is no assurance that we can meet the conditions precedent for any of these contracts and even if we do, there is no assurance that we can receive the needed permits in a timely manner. We cannot predict the terms, if any, which may be imposed on our permits to proceed with our water and other development programs.
However, we cannot provide assurance that a security breach, cyber-attack, data theft or other significant systems failure will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position. 15 Cadiz Inc.
However, we cannot provide assurance that a security breach, cyber-attack, data theft or other significant systems failure will not occur in the future, and such occurrences could have a material and adverse effect on our consolidated results of operations or financial position. 16 Cadiz Inc.
While we have worked with representatives of various environmental and third-party stakeholders to address any concerns about our projects, certain groups may remain opposed to our development plans regardless of our engagement and pursue legal and other actions.
While we have worked with representatives of various environmental and third-party stakeholders to address any concerns about our water development projects, certain groups may remain opposed to our development plans regardless of our engagement and pursue legal and other appeal actions.
If such permits were to be denied or granted subject to unfavorable conditions or restrictions, our ability to successfully implement our development programs as planned would be adversely impacted and could delay returns on our investments in the development of our assets.
If such permits were to be denied or granted subject to unfavorable conditions or restrictions, our ability to successfully implement our development programs as planned would be adversely impacted and could delay returns on our investments in the development of our assets. 13 Cadiz Inc.
On March 6, 2024, we entered into a Third Amendment to Credit Agreement which, among other things, provided for (a) a new tranche of senior secured convertible term loans in an aggregate principal amount of $20,000,000 with a maturity date of June 30, 2027; (b) extension of the maturity date for the existing convertible loans ( $16.0 million in principal) and existing non-convertible loans ($21.2 million in principal) to June 30, 2027; and (c) subordination of the existing convertible loans to the existing non-convertible loans and new convertible loans (see Note 15 to the Condensed Consolidated Financial Statements – “Subsequent Events”).
On March 6, 2024, we entered into a Third Amendment to Credit Agreement which, among other things, provided for (a) a new tranche of senior secured convertible term loans in an aggregate principal amount of $20,000,000 with a maturity date of June 30, 2027; (b) extension of the maturity date for the existing convertible loans ( $16.0 million in principal) and existing non-convertible loans ($21.2 million in principal) to June 30, 2027; and (c) subordination of the existing convertible loans to the existing non-convertible loans and new convertible loans (see Note 7 to the Condensed Consolidated Financial Statements – “Long-Term Debt”).
Additional risks include our ability to obtain all necessary regulatory approvals and permits, litigation by community, environmental or other groups, unforeseen technical difficulties, general market conditions and competition for agriculture, water filtration products and water supplies, and the time needed to generate significant operating revenues from such programs after contracts are secured, crops are planted or operations commence. 12 Cadiz Inc.
Additional risks include our ability to obtain all necessary regulatory approvals and permits, litigation by community, environmental or other groups, unforeseen technical difficulties, general market conditions and competition for agriculture, water filtration products and water supplies, and the time needed to generate significant operating revenues from such programs after contracts are secured or operations commence.
The Issuance of Equity Securities and Management Equity Incentive Plans Will Cause Dilution We have and may continue to issue equity securities pursuant to "at the market" issuance sales agreements or direct placements. Further, our compensation programs for management and consultants emphasize long-term incentives, primarily through the issuance of equity securities and options to purchase equity securities.
The Issuance of Equity Securities and Management Equity Incentive Plans Will Cause Dilution We have and may continue to issue equity securities pursuant to “at the market” issuance sales agreements or direct placements. Further, our compensation programs for management and consultants emphasize long-term incentives, primarily through the issuance of equity securities and options to purchase equity securities.
Our Failure to Make Timely Payments of Principal and Interest on Our Indebtedness or To Obtain Additional Financing Will Impact our Ability to Implement Our Asset Development Programs As of December 31, 2023, we had total indebtedness outstanding to our lenders of approximately $38.5 million which is secured by our assets.
Our Failure to Make Timely Payments of Principal and Interest on Our Indebtedness or To Obtain Additional Financing Will Impact our Ability to Implement Our Asset Development Programs As of December 31, 2024, we had total indebtedness outstanding to our lenders of approximately $60.6 million which is secured by our assets.
Additionally, violations of privacy or cybersecurity laws (including the California Consumer Privacy Act), regulations or standards increasingly lead to class-action and other types of litigation, which can result in substantial monetary judgments or settlements. Therefore, any such security breaches could have a material adverse effect on us. ITEM 1B. Unresolved Staff Comments Not applicable at this time.
Additionally, violations of privacy or cybersecurity laws (including the California Consumer Privacy Act), regulations or standards increasingly lead to class-action and other types of litigation, which can result in substantial monetary judgments or settlements. Therefore, any such security breaches could have a material adverse effect on us.
We May Never Become Profitable Unless We Are Able to Successfully Implement Programs to Develop Our Land Assets and Related Water Resources and Water Filtration Technology Assets Our agreements for water supply, storage, and conveyance projects are subject to financial and regulatory conditions, which may not be satisfied.
We May Never Become Profitable Unless We Are Able to Successfully Implement Programs to Develop Our Land Assets Our water supply agreements are subject to financial and regulatory conditions precedent, which may not be satisfied.
Generally, opposition from third parties expressed at any regulatory venue can cause delays and increase the costs of our development efforts or preclude such development entirely.
Generally, opposition from third parties with standing expressed to regulatory bodies with jurisdiction over our projects can cause delays and increase the costs of our development efforts or preclude such development entirely.
We will continue to require additional working capital to meet our cash resource needs until such time as our asset development programs, including the Water Project, and water filtration technology business produce revenues sufficient to fund operations.
We will continue to require additional working capital to meet our cash resource needs until such time as our asset development programs, including the Mojave Groundwater Bank, and water filtration technology business produce revenues sufficient to fund operations or we receive reimbursement for costs advanced for development of the Mojave Groundwater Bank from MGSC and payment from MGSC of $51 million among other considerations for our transfer of assets into MGSC.
Governmental approvals and permits granted authorizing our development activities may be challenged in court and such litigation could adversely impact our timelines, development plans, and ultimately the return on our investments. 13 Cadiz Inc.
Governmental approvals and permits granted authorizing our development activities may be challenged in court and such litigation could adversely impact our timelines, development plans, and ultimately the return on our investments. We may not be able to execute our plans for the construction, ownership, and operation of our Mojave Groundwater Bank and obtain the requisite funding.
Added
We have entered into letters of intent with a non-profit investment fund and Lytton Rancheria of California, a federally recognized Native American Tribe, as well as a letter of agreement with a publicly traded company, related to potential investments in MGSC by these entities to support the construction, ownership, and operation of the Mojave Groundwater Bank.
Added
The agreements announced with these potential investors are not binding and there is no guarantee that we will be able to enter into binding definitive agreements or that the proposed transactions pursuant to the letters of intent and letter of agreement will move forward based on the terms described in such agreements.
Added
Even if we do enter into definitive agreements for investments into the construction, ownership and operations of the Mojave Groundwater Bank, we may not be able to obtain the requisite total funding necessary for the construction of all facilities for the Mojave Groundwater Bank or such additional funding may not be available on terms satisfactory to the parties or in sufficient amounts, or the progress of the Mojave Groundwater Bank may not proceed as planned, or the definitive agreements entered into, if any, may not generate our anticipated benefits.
Added
These events could materially and adversely affect the success of the Mojave Groundwater Bank and, as a result, materially and adversely affect our business prospects. 14 Cadiz Inc.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

0 edited+2 added−6 removed0 unchanged
Removed
ITEM 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information from cybersecurity threats.
Added
Item 1C. Cybersecurity 17 Item 2. Properties 18 Item 3. Legal Proceedings 20 Item 4. Mine Safety Disclosures 20 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities 21 Item 6. [Reserved] 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 Item 7A.
Removed
Our cybersecurity risk management program includes: ● risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment; ● offsite backup storage of critical systems and information; 16 Cadiz Inc. ● the use of external service providers to assess, test or otherwise assist with aspects of our security controls; ● cybersecurity awareness training; ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and ● a third-party risk management process to identify and mitigate risks from third parties, such as service providers, suppliers, and vendors.
Added
Quantitative and Qualitative Disclosures about Market Risk 31 Item 8. Financial Statements and Supplementary Data 31
Removed
We have not identified any risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. For additional information regarding risks from cybersecurity threats, see Item 1A, “Risk Factors”, above.
Removed
Cybersecurity Governance Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to the Audit & Risk Committee (the “Committee”) oversight of cybersecurity and other information technology risks. The Committee oversees management’s implementation of our cybersecurity risk management program as part of our overall enterprise risk management program.
Removed
The Committee receives periodic reports from management on our cybersecurity risks. In addition, management promptly updates the Committee regarding any material cybersecurity incidents, and as necessary as to any incidents with lesser impact potential. The Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Removed
Our management team, with the assistance of our external service providers, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises the cybersecurity activities of both our internal personnel and our retained external cybersecurity consultants.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeExecutive Offices We lease approximately 3,800 square feet of office space in Los Angeles, California for our executive offices. This lease is month-to-month. Current base rent under the lease is approximately $8,600 per month. 18 Cadiz Inc.
Biggest changeExecutive Offices We lease approximately 4,500 square feet of office space in Los Angeles, California for our executive offices (“Executive Office Lease”). The Executive Office Lease terminates in May 2030. The current base rent under the Executive Office Lease is approximately $10,000 per month.
We are presently marketing these credits to a variety of planned developments in the region. Danby : We own nearly 2,000 acres near Danby Dry Lake in Ward Valley, approximately 30 miles southeast of the Cadiz Property. Our Danby Dry Lake property is located approximately 10 miles north of the Colorado River Aqueduct.
We are presently marketing these credits to a variety of planned developments in the region. Danby : We own nearly 2,000 acres near Danby Dry Lake in Ward Valley, approximately 30 miles southeast of the Cadiz Ranch. Our Danby Dry Lake property is located approximately 10 miles north of the Colorado River Aqueduct.
Cadiz Real Estate Title to all of our real estate assets is held by Cadiz Real Estate LLC (“Cadiz Real Estate”), a wholly owned subsidiary of Cadiz Inc. The Board of Managers of Cadiz Real Estate currently consists of two managers appointed by the Company’s Board of Directors.
Cadiz Real Estate Title to substantially all of our real estate assets is held by Cadiz Real Estate LLC (“Cadiz Real Estate”), a wholly owned subsidiary of Cadiz Inc. The Board of Managers of Cadiz Real Estate currently consists of two managers appointed by the Company’s Board of Directors.
Cadiz Real Estate is a co-obligor under our senior secured term loan, for which assets of Cadiz Real Estate have been pledged as security. Debt Secured by Properties Our assets have been pledged as collateral for $38.1 million of senior secured debt outstanding as of December 31, 2023.
Cadiz Real Estate is a co-obligor under our senior secured term loan, for which assets of Cadiz Real Estate have been pledged as security. Debt Secured by Properties Our assets have been pledged as collateral for $60.6 million of senior secured debt outstanding as of December 31, 2024.
The Cadiz Property, which is at the base of a topographically diverse 1,300 square mile watershed, is the principal location of our business operations, including our agricultural operations and ongoing development of our water supply, storage and conveyance projects. 17 Cadiz Inc.
The Cadiz Ranch, which is at the base of a topographically diverse 2,000 square mile watershed, is the principal location of our business operations, including our agricultural operations and ongoing development of our water supply, storage and conveyance projects. 18 Cadiz Inc.
ITEM 2. Properties Following is a description of our significant properties. The Cadiz Valley Property We own approximately 35,000 acres of largely contiguous desert land in the Cadiz and Fenner valleys of eastern San Bernardino County, California (the “Cadiz Property”).
ITEM 2. Properties Following is a description of our 46,000 acres of landholdings in the Eastern Mojave Desert in Southern California. The Cadiz Ranch Property We own approximately 35,000 acres of largely contiguous desert land in the Cadiz and Fenner valleys of eastern San Bernardino County, California (the “Cadiz Ranch”).
Independent geotechnical and engineering studies conducted since initial acquisition have confirmed that the Cadiz Property overlies a significant aquifer system that can support agricultural development, the conservation of groundwater for off property water supply and the storage of imported water.
Independent geotechnical and engineering studies conducted since initial acquisition have confirmed that the Cadiz Ranch overlies a significant aquifer system from a watershed with an estimated 30-50 million acre-feet of groundwater that can support agricultural development, the conservation of groundwater for off-property uses the storage of imported water.
Approximately 3,100 acres of the Cadiz Property is actively farmed by us or leased to third parties for farming activities and includes agriculture and water infrastructure including wells, wellfield manifold, pipelines, worker housing, and energy and transportation facilities (see Item 1. “Description of Business”, above).
Approximately 3,100 acres of the Cadiz Ranch are actively farmed by us or leased to third parties for farming activities and includes agriculture and water infrastructure including wells, wellfield manifold, pipelines, worker housing, and energy and transportation facilities (see Item 1. “Business”, above). Additional Eastern Mojave Properties Piute: We own approximately 9,000 acres in the Piute Valley.
Removed
Additional Eastern Mojave Properties In addition to the Cadiz Property, we also own approximately 11,000 additional acres in the eastern Mojave Desert portion of San Bernardino County, California at two separate properties. Piute: We own approximately 9,000 acres in the Piute Valley.
Added
We lease a total of approximately 44,500 square feet of industrial space under two leases in Hollister, California for our water filtration technology operations (“Hollister Leases”). The Hollister Leases terminate in October 2026 and May 2029. The current base rent under the Hollister Leases is approximately $35,500 per month. 19 Cadiz Inc.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeITEM 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities Our common stock is currently traded on The NASDAQ Global Market (“NASDAQ”) under the symbol “CDZI.” As of March 26, 2024, the number of stockholders of record of our common stock was 56.
Biggest changeITEM 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities Our common stock is currently traded on The NASDAQ Global Market (“NASDAQ”) under the symbol “CDZI.” As of March 26, 2025, the number of stockholders of record of our common stock was 55.
All securities sold by us during the three years ended December 31, 2023, which were not registered under the Securities Act of 1933, as amended, have been previously reported in accordance with the requirements of Rule 12b-2 of the Securities Exchange Act of 1934, as amended.
All securities sold by us during the three years ended December 31, 2024, which were not registered under the Securities Act of 1933, as amended, have been previously reported in accordance with the requirements of Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur largest segment is Land and Water Resources, which comprises all activities regarding our properties in the eastern Mojave Desert pre-revenue development of the Water Project (supply, storage and conveyance), and agricultural operations. Our second operating segment is Water Filtration Technology comprised of ATEC which provides innovative water filtration technology solutions for impaired or contaminated groundwater sources.
Biggest changeResults of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 We currently operate in two reportable segments. Our largest segment is Land and Water Resources, which comprises all activities regarding our properties in the eastern Mojave Desert, pre-revenue development of the Mojave Groundwater Bank (supply, storage and conveyance), and agricultural operations.
We also own a 99-year lease with the ARZC that will allow us to construct the Southern Pipeline within the existing, active railroad ROW that extends from the Cadiz Ranch to the Colorado River Aqueduct. The capacity of the Northern Pipeline for water conveyance is 25,000 AFY.
The capacity of the Northern Pipeline for water conveyance is 25,000 AFY. We also own a 99-year lease with the ARZC that will allow us to construct the Southern Pipeline within the existing, active railroad ROW that extends from the Cadiz Ranch to the Colorado River Aqueduct.
Liquidity and Capital Resources (a) Current Financing Arrangements As we have not received significant revenues or gross profits from our water, agriculture or water filtration technology activities to date, we have been required to obtain financing to bridge the gap between the time water resource and other development expenses are incurred and the time that revenue will commence.
Liquidity and Capital Resources (a) Current Financing Arrangements As we have not received significant revenues or gross profits from our water, agriculture or water filtration technology activities to date, we have been required to obtain financing to bridge the gap between the time water resource and other development expenses are incurred and the time that significant revenue will commence.
In the longer term, we will need to raise additional capital to finance working capital needs and capital expenditures (see “Current Financing Arrangements”, above). Our future working capital needs will depend upon the specific measures we pursue in the entitlement and development of our water supply, storage, conveyance resources and other developments.
In the longer term, we may need to raise additional capital to finance working capital needs and capital expenditures (see “Current Financing Arrangements”, above). Our future working capital needs will depend upon the specific measures we pursue in the entitlement and development of our water supply, storage, conveyance resources and other developments.
Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from the 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.
(1) Liquidity. Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from the 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 addition, prior to the maturity of the Credit Agreement, we have the right to require that the lenders convert the outstanding principal amount, plus any PIK Interest and accrued and unpaid interest, of the Convertible Loan if the following conditions are met: (i) the average VWAP of the Company’s common stock on The Nasdaq Stock Market, or such other national securities exchange on which the shares of common stock are listed for trading, over 30 consecutive trading dates exceeds 115% of the then Conversion Price and (ii) there is no event of default under certain provisions of the Credit Agreement.
In addition, prior to the maturity of the Credit Agreement, we have the right to require that the lenders convert the outstanding principal amount, plus any PIK Interest and accrued and unpaid interest, of the Convertible Loan if the following conditions are met: (i) the average VWAP of the Company’s common stock on The Nasdaq Stock Market, or such other national securities exchange on which the shares of common stock are listed for trading, over 30 consecutive trading dates exceeds 115% of the then Conversion Price and (ii) there is no event of default under certain provisions of the Credit Agreement. 27 Cadiz Inc.
In our annual impairment analysis in the fourth quarter of 2023, the goodwill of all reporting units in our water and land resources and water filtration technology reportable segments were tested utilizing a qualitative assessment. Based on this assessment, we determined that the fair values of these reporting units were more-likely-than-not greater than their respective carrying values.
In our annual impairment analysis in the fourth quarter of 2024, the goodwill of all reporting units in our water and land resources and water filtration technology reportable segments were tested utilizing a qualitative assessment. Based on this assessment, we determined that the fair values of these reporting units were more-likely-than-not greater than their respective carrying values.
Our addition of pipeline infrastructure and ATEC water filtration technology to our portfolio of land and water assets enabled us in 2023 to adjust our business model to begin offering integrated services and solutions to public water systems that address the urgent challenges of climate change and make significant progress in advancing contract negotiations for water supply with public water systems.
Our addition of pipeline infrastructure and ATEC water filtration technology to our portfolio of land and water assets has enabled us to adjust our business model to begin offering integrated services and solutions to public water systems that address the urgent challenges of climate change and make significant progress in advancing contract negotiations for water supply with public water systems.
In connection with the Assignment, the existing holders of both the Convertible Loan and non-convertible term loans consented to effectuate the Third Amended Credit Agreement in consideration of a consent fee in the aggregate amount of $479,845 payable in the form of our common stock (valued at $2.89 per share, or 166,036 shares), which will be registered pursuant to an effective shelf registration statement on Form S-3 and a prospectus supplement thereunder.
In connection with the Assignment, the existing holders of both the Convertible Loan and non-convertible term loans consented to effectuate the Third Amended Credit Agreement in consideration of a consent fee in the aggregate amount of $479,845 payable in the form of our common stock (valued at $2.89 per share, or 166,036 shares), which was registered pursuant to an effective shelf registration statement on Form S-3 and a prospectus supplement thereunder.
Water Storage – The alluvium aquifer that lies beneath the Cadiz Property is also large enough for use as a water “banking” facility, capable of storing water “in-lieu” for supply customers and up to 1 million acre-feet of imported surplus water for return during drought periods.
Water Storage – The alluvium aquifer that lies beneath the Cadiz Ranch is also large enough for use as a water “banking” facility, capable of storing water “in-lieu” for supply customers and up to 1 million acre-feet of imported surplus water for return during drought periods.
Debt Offerings In July 2021, we entered into a $50 million new credit agreement (“Credit Agreement”) (see Note 8 to the Condensed Consolidated Financial Statements – “Long-Term Debt”).
Debt Offerings In July 2021, we entered into a $50 million new credit agreement (“Credit Agreement”) (see Note 7 to the Condensed Consolidated Financial Statements – “Long-Term Debt”).
The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions.
The valuation methodology we use to estimate the fair value of reporting units requires inputs and assumptions that reflect current market conditions, as well as the impact of planned business and operational strategies that require management judgment. The estimated fair value could increase or decrease depending on changes in the inputs and assumptions. 30 Cadiz Inc.
Because all water in the aquifer system will eventually be lost to evaporation, surplus water that is captured and withdrawn before it evaporates is a new water supply (“conserved” water).
Because all water in the aquifer system will eventually be lost to evaporation, surplus water that is captured and withdrawn before it evaporates is a new water supply (i.e. “conserved” water).
No assurances can be given, however, as to the availability or terms of any new financing. Limitations on our liquidity and ability to raise capital may adversely affect us. Sufficient liquidity is critical to meet our resource development activities. 27 Cadiz Inc.
No assurances can be given, however, as to the availability or terms of any new financing. Limitations on our liquidity and ability to raise capital may adversely affect us. Sufficient liquidity is critical to meet our resource development activities.
The remaining proceeds were used for working capital needs and for general corporate purposes. 25 Cadiz Inc. On February 2, 2023, we entered into a First Amendment to Credit Agreement to amend certain provisions of the Credit Agreement (“First Amended Credit Agreement”).
The remaining proceeds were used for working capital needs and for general corporate purposes. On February 2, 2023, we entered into a First Amendment to Credit Agreement to amend certain provisions of the Credit Agreement (“First Amended Credit Agreement”).
The cash was primarily used to fund general and administrative expenses related to our water development efforts, agricultural development efforts, and our ATEC business including increased working capital needs related to accounts receivable and inventory offset by increased accounts payable. Cash Used for Investing Activities .
The cash was primarily used to fund general and administrative expenses related to our water development efforts, agricultural development efforts, and our ATEC business including increased working capital needs related to accounts receivable and inventory offset by increased accounts payable. 28 Cadiz Inc. Cash Used for Investing Activities .
Our reporting units are composed of either a discrete business or an aggregation of businesses with similar economic characteristics. 28 Cadiz Inc. We perform our annual impairment test of goodwill during the fourth quarter.
Our reporting units are composed of either a discrete business or an aggregation of businesses with similar economic characteristics. We perform our annual impairment test of goodwill during the fourth quarter.
The 2023 loss on early extinguishment of debt was a result of a conversion instrument, a repayment fee and elimination of debt discount associated with the paydown of $15 million of senior secured debt in February 2023. 24 Cadiz Inc.
The 2023 loss on early extinguishment of debt was a result of a conversion instrument, a repayment fee and elimination of debt discount associated with the paydown of $15 million of senior secured debt in February 2023.
However, application of these policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Management has concluded that the following critical accounting policies described below affect the most significant judgments and estimates used in the preparation of the consolidated financial statements. (1) Liquidity.
However, application of these policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. Management has concluded that the following critical accounting policies described below affect the most significant judgments and estimates used in the preparation of the consolidated financial statements. 29 Cadiz Inc.
Proceeds from financing activities for both periods reported are primarily related to the issuance of shares under direct offerings, offset by the paydown of $15 million of senior secured debt in February 2023. (b) Outlook Short-Term Outlook.
Proceeds from financing activities for the 2023 period primarily related to the issuance of shares under direct offerings, offset by the paydown of $15 million of senior secured debt in February 2023. (b) Outlook Short-Term Outlook.
The remaining proceeds from the January 2023 Direct Offering, together with the remaining proceeds from the November 2022 Direct Offering were used for capital expenditures to accelerate development of water supply, storage, conveyance and treatment assets, working capital, development of additional water resources to meet increase demand on an accelerated timetable, and general corporate purposes.
The remaining proceeds from the January 2023 Direct Offering were used for capital expenditures to accelerate development of water supply, storage, conveyance and treatment assets, working capital, development of additional water resources to meet increase demand on an accelerated timetable, and general corporate purposes. 26 Cadiz Inc.
On March 6, 2024, we entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund 2012 (“Heerema”) (see Note 15 to the Condensed Consolidated Financial Statements – “Subsequent Events”).
On March 6, 2024, we entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund 2012 (“Heerema”) (see Note 7 to the Condensed Consolidated Financial Statements – “Long-Term Debt”).
We incurred a net loss of $31.4 million for the year ended December 31, 2023, compared with a net loss of $24.8 million for the year ended December 31, 2022.
We incurred a net loss of $31.1 million for the year ended December 31, 2024, compared with a net loss of $31.4 million for the year ended December 31, 2023. 24 Cadiz Inc.
Our revenues have been limited to rental income from our agricultural leases, sales from our alfalfa plantings beginning in 2022 and ATEC sales beginning in 2023. As a result, we have historically incurred a net loss from operations. We currently operate in two reportable segments.
Our revenues have been limited primarily to ATEC sales and sales from our alfalfa plantings and rental income from our agricultural leases. As a result, we have historically incurred a net loss from operations.
The net proceeds of approximately $19.0 million from the completion of the Third Amended Credit Agreement in March 2024, together with cash on hand, provide us with sufficient funds to meet our short-term working capital needs. Our agricultural development and ATEC operations are expected to be funded using existing capital and cash profits generated from operations. Long-Term Outlook .
The net proceeds of approximately $18.3 million from the completion of the March 2025 Direct Offering, together with cash on hand, provide us with sufficient funds to meet our short-term working capital needs. Our ATEC operations are expected to be funded using existing capital and cash profits generated from operations during 2025. Long-Term Outlook .
ATEC’s specialized filtration media provide cost-effective, high-rate of removal for common groundwater impairments and contaminants that pose health risks in drinking water including iron, manganese, arsenic, Chromium-6, nitrates, and other constituents of concern.
Water Filtration Technology – In 2022, we completed the acquisition of ATEC, which provides innovative water filtration solutions for impaired or contaminated groundwater sources. ATEC’s specialized filtration media provide cost-effective, high-rate of removal for common groundwater impairments and contaminants that pose health risks in drinking water including iron, manganese, arsenic, Chromium-6, nitrates, PFAS and other constituents of concern.
The annual interest rate remains unchanged at 7.00%. Interest on $21.2 million of the remaining principal amount will be paid in cash. Interest on the aggregate $36 million principal amount of the New Secured Convertible Debt and existing Convertible Loan is paid in kind on a quarterly basis. 26 Cadiz Inc.
The annual interest rate remains unchanged at 7.00%. Interest on $21.2 million of the remaining principal amount will be paid in cash. Interest on the New Secured Convertible Debt and existing Convertible Loan is paid in kind on a quarterly basis. Limitations on our liquidity and ability to raise capital may adversely affect us.
Cost of sales totaled $2.9 million during the year ended December 31, 2023, comprised of $2.2 million related to our alfalfa crop harvest and $0.7 million related to ATEC. The 2023 alfalfa crop harvest net operating loss of $1.4 million primarily relates to increased diesel costs for farming as well as suppressed market conditions for alfalfa on the West Coast.
Cost of sales totaled $7.3 million during the year ended December 31, 2024, comprised of $4.3 million related to ATEC (45.5% gross margin) and $3.0 million related to our alfalfa crop harvest. The 2024 alfalfa crop harvest net operating loss of $1.7 million primarily related to continued suppressed market conditions for alfalfa on the West Coast.
Revenue totaled $1.5 million during the year ended December 31, 2022, primarily related to rental income from our agricultural leases and sales from the harvest from our then 610 acres of commercial alfalfa crop. Cost of Sales .
Revenue totaled $9.6 million during the year ended December 31, 2024, primarily related to ATEC sales totaling $7.9 million, sales from the harvest from our 760 acres of commercial alfalfa crop totaling $1.3 million and rental income from agricultural leases totaling $0.4 million.
On March 23, 2022, we completed the sale and issuance of 6,857,140 shares of our common stock to certain institutional and individual investors in a registered direct offering. The shares of common stock were sold at a purchase price of $1.75 per share, for aggregate gross proceeds of $12 million and aggregate net proceeds of approximately $11.8 million.
On November 5, 2024, we completed the sale and issuance of 7,000,000 shares of our common stock to certain institutional investors in a registered direct offering (“November 2024 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.
Loss on early extinguishment of debt totaled $5.3 million during the year ended December 31, 2023 compared to $0 in the year ended December 31, 2022.
Interest income primarily relates to interest on investments in short-term deposits which were lower in 2024. Loss on Early Extinguishment of Debt. Loss on early extinguishment of debt totaled $0 during the year ended December 31, 2024 compared to $5.3 million in the year ended December 31, 2023.
To the extent additional capital is required, we may increase liquidity through a variety of means, including equity or debt placements, through the lease, sale or other disposition of assets or reductions in operating costs. If additional capital is required, no assurances can be given as to the availability and terms of any new financing.
Sufficient liquidity is critical to meet our resource development activities. To the extent additional capital is required, we may increase liquidity through a variety of means, including equity or debt placements, through the lease, sale or other disposition of assets or reductions in operating costs.
General and administrative expense for ATEC totaled $0.8 million for 2023. 23 Cadiz Inc. Compensation costs from stock and option awards for the year ended December 31, 2023, totaled $1.5 million compared with $1.9 million for the year ended December 31, 2022. The higher 2022 expense was primarily due to stock-based non-cash bonus awards to employees. Depreciation.
General and administrative expense for ATEC totaled $1.8 million for 2024 compared to $0.8 million for 2023. The increase was primarily driven by the growth in the ATEC operations. Compensation costs from stock and option awards for the year ended December 31, 2024, totaled $4.6 million compared with $1.5 million for the year ended December 31, 2023.
ATEC and our agricultural operations provide our current principal source of revenue, although our working capital needs are not fully supported by these operations at this time. We believe that our water supply, storage, pipeline conveyance and treatment solutions will provide a significant source of future cash flow for the business and our stockholders.
We believe that our water supply, storage, pipeline conveyance and treatment solutions will provide a significant source of future cash flow for the business and our stockholders. We presently rely upon debt and equity financing to support our working capital needs and development of our water solutions.
Cash used for investing activities in the year ended December 31, 2023, was $5.8 million, compared with $4.1 million for the year ended December 31, 2022. The cash used in the 2023 period primarily related to development costs of three new wells at the Cadiz Ranch.
Cash used for investing activities in the year ended December 31, 2024, was $1.2 million, compared with $5.8 million for the year ended December 31, 2023.
The cash used in the 2022 period primarily related to development costs for the initial planting of 760 acres of alfalfa. Cash Provided by Financing Activities . Cash provided by financing activities totaled $17.6 million for the year ended December 31, 2023, compared with cash provided by financing activities of $16.6 million for the year ended December 31, 2022.
Cash provided by financing activities totaled $35.5 million for the year ended December 31, 2024, compared with cash provided by financing activities of $17.6 million for the year ended December 31, 2023.
We presently rely upon debt and equity financing to support our working capital needs and development of our water solutions. Our current and future operations also include activities that further our commitments to sustainable stewardship of our land, water, pipeline and water filtration technology assets, good governance and corporate social responsibility.
Our current and future operations also include activities that further our commitments to sustainable stewardship of our land, water, pipeline and water filtration technology assets, good governance and corporate social responsibility. We believe these commitments are important investments that will assist in maintenance of sustained stockholder value. 23 Cadiz Inc.
The proceeds were used for working capital needs and for general corporate purposes. On November 14, 2022, we completed the sale and issuance of 5,000,000 shares of our common stock to certain institutional investors in a registered direct offering (“November 2022 Direct Offering”).
On March 7, 2025, we completed the sale and issuance of 5,715,000 shares of our common stock to certain institutional investors in a registered direct offering (“March 2025 Direct Offering”) (see Note 14 of the Condensed Consolidated Financial Statements – “Subsequent Events”).
As we continue to actively pursue our business strategy, additional financing will continue to be required (see “Outlook”, below). The covenants in the Credit Agreement do not prohibit our use of additional equity financing and allow us to retain 100% of the proceeds of any common equity financing.
The covenants in the Credit Agreement, as amended, do not prohibit our use of additional equity financing and allow us to retain 100% of the proceeds of any common equity financing. We do not expect the loan covenants to materially limit our ability to finance our water and agricultural development activities. Cash Used for Operating Activities .
General and administrative expenses during the year ended December 31, 2023, exclusive of stock-based compensation costs, totaled $17.3 million compared with $13.5 million for the year ended December 31, 2022.
General and administrative expenses during the year ended December 31, 2024, exclusive of stock-based compensation costs, totaled $19.7 million compared with $17.3 million for the year ended December 31, 2023. The increase in 2024 was primarily a result of increased professional fees incurred in advancing the development of the Mojave Groundwater Bank and increased marketing outreach campaign activity in 2024.
We assume no duty to update these forward-looking statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law. We are a water solutions provider with a unique combination of land, water, pipeline and water filtration technology assets located in Southern California between water systems serving population centers in the Southwestern United States.
We assume no duty to update these forward-looking statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law.
Historically, we have addressed these needs primarily through secured debt financing arrangements and private equity placements. Equity Offerings In July 2021, we completed the sale of 2,300,000 depositary shares each representing 1/1000 th of a share of Series A Preferred Stock (“Depositary Share Offering”) for net proceeds of approximately $54 million.
Historically, we have addressed these needs primarily through secured debt financing arrangements and private equity placements. Equity Offerings In January 2023, we completed the sale and issuance of 10,500,000 shares of common stock to certain institutional investors in a registered direct offering (“January 2023 Direct Offering”).
Interest expense totaled $4.9 million during the year ended December 31, 2023, compared to $8.3 million during the year ended December 31, 2022.
Interest expense totaled $7.9 million during the year ended December 31, 2024, compared to $4.9 million during the year ended December 31, 2023. The following table summarizes the components of net interest expense for the two periods (in thousands): 25 Cadiz Inc.
In the first quarter of 2024, we entered into agreements with multiple public water systems to purchase 15,000 AFY of annual water supply from us to be delivered via the Northern Pipeline. These agreements cumulatively represent 60% of the full capacity (25,000 AFY) of the Northern Pipeline.
The combination of the water supply, water storage and water conveyance infrastructure described above constitutes the Mojave Groundwater Bank as discussed in more detail in Item 1. – Business, above. In 2024, we entered into agreements with multiple public water systems for their purchase of 21,275 AFY of annual water supply from us to be delivered via the Northern Pipeline.
Future capital expenditures will depend on the progress of the Water Project, further expansion of our agricultural assets, and ATEC operational needs. We are evaluating the amount of cash needed, and the manner in which such cash will be raised, on an ongoing basis.
Future capital expenditures will depend on the progress of the Mojave Groundwater Bank, including the funding of MGSC, ATEC operational needs and any further expansion of our agricultural assets.
We do not expect the loan covenants to materially limit our ability to finance our water, agricultural development, and water filtration technology activities. Cash Used for Operating Activities . Cash used for operating activities totaled $20.9 million for the year ended December 31, 2023, and $18.6 million for the year ended December 31, 2022.
Cash used for operating activities totaled $21.5 million for the year ended December 31, 2024, and $20.9 million for the year ended December 31, 2023.
Depreciation expense totaled $1.2 million during the year ended December 31, 2023, compared to $0.7 million during the year ended December 31, 2022.
Cost of sales totaled $2.9 million during the year ended December 31, 2023, comprised of $2.2 million related to our alfalfa crop harvest and $0.7 million related to ATEC. General and Administrative Expenses .
The shares of common stock were sold at a purchase price of $2.00 per share, for aggregate gross proceeds of $10 million and aggregate net proceeds of approximately $9.9 million. On January 30, 2023, we completed the sale and issuance of 10,500,000 shares of common stock to certain institutional investors in a registered direct offering (“January 2023 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. $5 million of the net proceeds from the November 2024 Direct Offering were paid in January 2025 to secure an exclusive option finalized in December 2024 to purchase up to 180 miles of steel pipe intended to be used for the development of the Mojave Groundwater Bank.
Removed
Our portfolio of assets includes 2.5 million acre-feet of water supply (permits complete), 220 miles of existing, buried pipeline, 1 million acre-feet of groundwater storage capacity, versatile, scalable and cost-effective water filtration technology.
Added
We expect the capacity of the Southern Pipeline to be 150,000 AFY to accommodate imported water storage. We hold an option to purchase up to 180 miles of existing unused 36” steel pipeline that can be used in construction of the Southern Pipeline system or to replace certain components of the Northern Pipeline. 22 Cadiz Inc.
Removed
The capacity of the Southern Pipeline, ranges from 75,000 AFY to 150,000 AFY depending on the pipeline diameter (54-inch to 84-inch) selected to accommodate imported water storage. 21 Cadiz Inc. Water Filtration Technology – In 2022, we completed the acquisition of ATEC, which provides innovative water filtration solutions for impaired or contaminated groundwater sources.
Added
These agreements cumulatively represent 85% of the full capacity (25,000 AFY) of the Northern Pipeline.
Removed
Participating public agencies are expected to fund capital costs for conversion of the Northern Pipeline from gas to water, construction of pumping stations and appurtenant facilities, and would be able to seek infrastructure funding and grants. These agreements and off take facility construction will be subject to standard environmental review and a project-level permitting process.
Added
Participating public agencies are also expected to pay a portion of operating costs and the capital costs for construction of facilities.
Removed
We believe these commitments are important investments that will assist in maintenance of sustained stockholder value. 22 Cadiz Inc. Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 We have not received significant revenues from our water supply, storage, or conveyance assets to date.
Added
In December 2024, we established a new business entity, Mojave Groundwater Storage Company LLC (“MGSC”) for public and private investors to take an ownership interest in the facility assets in exchange for equity capital to finance the estimated $800 million facility construction cost.
Removed
Reporting of these two segments began in 2023 as the revenue and operating results for the water filtration technology segment were not material to our consolidated operations prior to the year ended December 31, 2023.
Added
As of March 2025, we have entered into letters of intent and a letter of agreement with potential MGSC investors for up to $425 million. The letters of intent and letter of agreement are non-binding and subject to on-going due diligence.
Removed
The higher loss in 2023 was primarily due to a loss on extinguishment of debt in the amount of $5.3 million resulting from issuance of a conversion instrument, a repayment fee and elimination of debt discount associated with the paydown of $15 million of senior secured debt in February 2023.
Added
The parties will also coordinate with us to seek available infrastructure grants and/or other financing alternatives including potential bond issuances through a to-be-formed financing Joint Powers Authority. ATEC and our agricultural operations provide our current principal source of revenue, although our working capital needs are not fully supported by these operations at this time.
Removed
Cost of sales totaled $2.1 million during the year ended December 31, 2022. In June 2022, the Company converted 610 acres of agricultural development to alfalfa commercial production. The 2022 loss was primarily due to non-recurring start-up costs for the initial short year of commercial production. General and Administrative Expenses .
Added
Our second operating segment is Water Filtration Technology comprised of ATEC which provides innovative water filtration technology solutions for impaired or contaminated groundwater sources. We evaluate our performance based on segment operating income (loss). Interest expense, income tax expense and losses related to equity method investments are excluded from the computation of operating income (loss) for the segments.
Removed
The increase in 2023 was primarily a result of community partnership and communications investments, including $2.2 million in water quality and infrastructure costs in coordination with community partners that will improve access to clean water in disadvantaged communities in the Coachella Valley and $1.3 million in corporate communications modernization expenses to the Company’s online, print, digital and social materials.
Added
Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the years ended December 31, 2024 and 2023: Twelve Months Ended December 31, 2024 (in thousands) Land and Water Resources Water Filtration Technology Total Revenues $ 1,708 $ 7,900 $ 9,608 Costs and expenses: Cost of sales 2,984 4,314 7,298 General and administrative 22,525 1,820 24,345 Depreciation 1,159 55 1,214 Total costs and expenses 26,668 6,189 32,857 Operating income (loss) $ (24,960 ) $ 1,711 $ (23,249 ) Twelve Months Ended December 31, 2023 (in thousands) Land and Water Resources Water Filtration Technology Total Revenues $ 1,251 $ 740 $ 1,991 Costs and expenses: Cost of sales 2,241 646 2,887 General and administrative 18,042 755 18,797 Depreciation 1,096 151 1,247 Total costs and expenses 21,379 1,552 22,931 Operating income (loss) $ (20,128 ) $ (812 ) $ (20,940 ) We have not received significant revenues from our water supply, storage, or conveyance assets to date.
Removed
The higher 2023 depreciation expense is primarily due to construction in progress placed into service in 2023, which included land development and stand establishment related to the planting of 150 acres of alfalfa, as well as $0.2 million of depreciation for ATEC assets in 2023. Interest Expense, Net .
Added
The increase in ATEC sales primarily relates to revenues under a contract to deliver 320 filters for the Central Utah Water Conservancy District’s Vineyard Wellfield Groundwater Polishing Project (“Utah Project”) announced in 2023 and now being delivered. Cost of Sales .
Removed
The following table summarizes the components of net interest expense for the two periods (in thousands): Year Ended December 31, 2023 2022 Interest on outstanding debt $ 5,161 $ 5,849 Amortization of debt discount 414 2,414 Interest Income (606 ) - Other Income (25 ) - $ 4,944 $ 8,263 Interest income primarily relates to interest on investments in short-term deposits.
Added
The higher 2024 expense was primarily due to an increase in stock-based non-cash awards to employees and consultants in 2024 compared to 2023. Depreciation. Depreciation expense totaled $1.2 million during each the years ended December 31, 2024 and 2023. Interest Expense, Net .
Removed
Losses on Derivative Liabilities. Losses on derivative liabilities totaled $220 thousand during the year ended December 31, 2023 compared to $0 in the year ended December 31, 2022. The losses recorded in 2023 were a result of a remeasurement of a conversion option under our senior secured debt. Loss on Early Extinguishment of Debt.
Added
Year Ended December 31, 2024 2023 Cash interest on outstanding debt $ 1,530 $ 1,639 PIK interest on outstanding debt 2,364 995 Interest added to lease obligation 2,794 2,527 Amortization of debt discount 1,316 414 Finance expense 307 - Interest Income (342 ) (606 ) Other Income (89 ) (25 ) $ 7,880 $ 4,944 Increased interest expense is primarily due to increased borrowing under the Third Amended Credit Agreement.
Removed
Limitations on our liquidity and ability to raise capital may adversely affect us. Sufficient liquidity is critical to meet our resource development, agricultural development and water filtration technology activities.
Added
The remaining proceeds from the November 2024 Direct Offering and the proceeds from the March 2025 Direct Offering are intended to be used for capital and other expenses related to the development and construction of the Mojave Groundwater Bank, which may include acquisition of equipment and materials intended to be used in construction of facilities related to our Northern and/or Southern Pipelines, which we expect to begin in 2025.
Added
Net proceeds from the offerings may also be used for the equipment and materials related to wellfield infrastructure on land owned by us and our subsidiaries, business development activities, other capital expenditures, working capital, the expansion of our business and general corporate purposes.
Added
If additional capital is required, no assurances can be given as to the availability and terms of any new financing. As we continue to actively pursue our business strategy, additional financing will continue to be required (see “Outlook”, below).
Added
The cash used in the 2024 period primarily related to development costs for the planting of 125 additional acres of alfalfa and the payment of a deferred portion of the purchase price related to the ATEC acquisition. The cash used in the 2023 period primarily related to the development of three new wells. Cash Provided by Financing Activities .
Added
Proceeds from financing activities for the 2024 period primarily related to the issuance of long-term debt under the Third Amended Credit Agreement and to the issuance of shares under a direct offering.
Added
Additionally, timing of reimbursement of development costs advanced related to the Mojave Groundwater Bank and the expected receipt of $51 million for the transfer of assets will impact the need to raise additional capital. We are evaluating the amount of cash needed, and the manner in which such cash will be raised, on an ongoing basis.

Other CDZIP 10-K year-over-year comparisons