Water Rights and Supply Agreements - The company owns vested water rights to withdraw 2.5 million acre-feet of groundwater, expected to produce an average of 50,000 acre-feet of water per year for 50 years for beneficial use in Southern California communities[107] - In the first three quarters of 2024, the company entered into agreements with multiple public water systems to purchase 21,275 acre-feet of annual water supply, representing approximately 85% of the Northern Pipeline's full capacity of 25,000 acre-feet per year[113] - The company has executed Letters of Intent reserving up to 100,000 acre-feet of surplus water for local disadvantaged communities as part of the Mojave-San Bernardino County One Water Project[115] Financial Performance - Revenue for the three months ended September 30, 2024, totaled $3.2 million, primarily from ATEC sales of $2.8 million, compared to $0.4 million in the same period in 2023[129] - The company incurred a net loss of $6.8 million for the three months ended September 30, 2024, compared to a net loss of $6.9 million in the same period in 2023[127] - Revenue totaled $4.9 million for the nine months ended September 30, 2024, compared to $1.3 million for the same period in 2023, with ATEC sales increasing from $0.6 million to $3.5 million[135] - The net loss for the nine months ended September 30, 2024, was $22.5 million, an improvement from a net loss of $24.7 million in the same period of 2023[134] Expenses and Costs - General and Administrative Expenses totaled $4.1 million for the three months ended September 30, 2024, down from $4.5 million in the same period in 2023[131] - Cost of sales for the nine months ended September 30, 2024, was $4.3 million, resulting in a gross margin of 31.4% for ATEC[137] - Compensation costs for stock and option awards for the nine months ended September 30, 2024, were $3.6 million, up from $1.1 million in the same period of 2023[139] Financing and Capital Projects - The estimated cost for constructing facilities required to deliver water supplies and operationalize the Mojave Groundwater Banking Project is approximately $800 million[117] - The company plans to establish a new entity, Newco, to mobilize capital for the Mojave Groundwater Banking Project, with expected contributions of up to $401 million from partners[117] - The company completed a registered direct offering in November 2024, raising approximately $21.9 million to advance development projects[145][146] - The company plans to use proceeds from the November 2024 Direct Offering for equipment and materials related to water supply and groundwater banking projects expected to begin in 2025[146] Debt and Interest Expenses - Net interest expense increased to $5.9 million for the nine months ended September 30, 2024, compared to $3.6 million in the same period of 2023, primarily due to increased borrowing under the Third Amended Credit Agreement[140] - The maturity date of the Credit Agreement was extended to June 30, 2026, under the First Amended Credit Agreement[150] Operational Activities - Cash used in operating activities was $15.3 million for the nine months ended September 30, 2024, compared to $15.4 million in the same period of 2023[156] - Cash provided by financing activities totaled $14.7 million for the nine months ended September 30, 2024, down from $18.9 million in the same period of 2023[158] Strategic Initiatives - The company has entered into an agreement with a subsidiary of RIC Energy to build a hydrogen production facility at the Cadiz Ranch, which will supply land and water for the project[121] - ATEC's sales increased due to a contract to deliver 320 filters for the Central Utah Water Conservancy District's Vineyard Wellfield Groundwater Polishing Project[129] Regulatory and Reporting - The company is classified as a smaller reporting company under Reg. 240.12b-2 of the Securities and Exchange Act of 1934, and is not required to provide detailed market risk disclosures[164]
CADIZ(CDZIP) - 2024 Q3 - Quarterly Report