Cadiz (CDZI) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements Cadiz Inc. saw revenues rise to $2.95 million in Q1 2025, but net loss widened to $9.6 million due to higher costs, despite increased assets and cash from an equity offering Condensed Consolidated Statements of Operations and Comprehensive Loss Q1 2025 revenues grew 163% to $2.95 million, but operating loss increased to $7.53 million and net loss widened to $10.86 million due to higher costs Q1 2025 vs. Q1 2024 Statement of Operations Highlights | Metric ($ in thousands, except per share data) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total revenues | $2,954 | $1,121 | +163.5% | | Operating loss | $(7,533) | $(4,908) | +53.5% | | Net loss | $(9,593) | $(6,850) | +40.0% | | Net loss applicable to common stock | $(10,858) | $(8,115) | +33.8% | | Basic and diluted net loss per common share | $(0.14) | $(0.12) | +16.7% | Condensed Consolidated Balance Sheets Total assets increased to $145.6 million by March 31, 2025, driven by higher cash and equity from a stock issuance Balance Sheet Summary | Metric ($ in thousands) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $21,569 | $17,292 | | Total current assets | $30,589 | $25,786 | | Total assets | $145,576 | $134,494 | | Total current liabilities | $13,988 | $14,406 | | Total liabilities | $101,541 | $100,533 | | Total stockholders' equity | $44,035 | $33,961 | Condensed Consolidated Statements of Cash Flows Q1 2025 saw increased cash use in operations ($3.6 million) and investing ($6.3 million), offset by $16.8 million from financing activities Cash Flow Summary (Three Months Ended March 31) | Metric ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,644) | $(2,873) | | Net cash used in investing activities | $(6,289) | $(186) | | Net cash provided by financing activities | $16,835 | $17,769 | | Net increase in cash, cash equivalents and restricted cash | $6,902 | $14,710 | Notes to the Condensed Consolidated Financial Statements Notes detail liquidity bolstered by an $18.3 million equity offering, segment performance, and debt amendments extending maturities to 2027 - The company incurred a net loss of $9.6 million for Q1 2025, up from $6.9 million in Q1 2024, primarily due to increased professional fees for the Mojave Groundwater Bank development and higher stock-based compensation[19] - In March 2025, the company raised approximately $18.3 million in net proceeds from a registered direct offering of 5,715,000 shares of common stock at $3.50 per share[24] Segment Performance (Three Months Ended March 31, 2025) | Segment ($ in thousands) | Revenues | Operating (Loss) / Income | | :--- | :--- | :--- | | Land and Water Resources | $565 | $(7,626) | | Water Filtration Technology | $2,389 | $93 | - In March 2024, the company amended its credit agreement, securing a new $20 million senior secured convertible term loan and extending the maturity date for existing convertible and non-convertible loans to June 30, 2027[42] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Cadiz's water solutions business, Q1 2025 revenue growth to $3.0 million, wider net loss, and liquidity bolstered by an $18.3 million equity offering Business Overview and Strategy Cadiz, a water solutions provider, is advancing its Mojave Groundwater Bank project, securing 85% of pipeline capacity and seeking $401 million in equity capital - The company's asset portfolio includes 2.5 million acre-feet of water supply, 1 million acre-feet of groundwater storage capacity, 220 miles of existing pipeline, and water filtration technology[90] - In 2024, the company entered into agreements with multiple public water systems for the purchase of 21,275 AFY of annual water supply, representing 85% of the Northern Pipeline's full capacity[98] - The company estimates an $800 million cost to complete the Mojave Groundwater Bank and has established Mojave Water Infrastructure Company, LLC to raise up to $401 million in equity capital from partners to fund these costs[100] Results of Operations Q1 2025 revenue rose to $3.0 million, driven by ATEC sales, but net loss widened to $9.6 million due to higher G&A and stock-based compensation - Revenue for Q1 2025 increased to $3.0 million from $1.1 million in Q1 2024, primarily due to ATEC sales increasing from $0.5 million to $2.4 million[110] - General and administrative expenses (excluding stock compensation) increased to $5.3 million in Q1 2025 from $3.5 million in Q1 2024, mainly from higher legal and consulting fees related to the Mojave Groundwater Bank[112] - Stock-based compensation expense increased to $2.8 million in Q1 2025 from $1.3 million in Q1 2024 due to more awards to employees and consultants[113] Liquidity and Capital Resources Liquidity was boosted by an $18.3 million equity offering in March 2025 and debt maturities extended to 2027, but long-term project funding requires additional capital - Completed a registered direct offering in March 2025, raising approximately $18.3 million in net proceeds[117] - In March 2024, the company entered into a Third Amended Credit Agreement which provided a new $20 million tranche of senior secured convertible term loans and extended the maturity date of existing loans to June 30, 2027[123] - Management states that proceeds from the March 2025 offering, together with cash on hand, provide sufficient funds for short-term working capital needs, but additional capital will be required for long-term project development[131][132] Item 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, Cadiz Inc. is exempt from providing market risk disclosures - As a smaller reporting company, Cadiz Inc. is not required to provide quantitative and qualitative disclosures about market risk[136] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[137] - No changes in internal control over financial reporting occurred during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the company's internal controls[138] PART II – OTHER INFORMATION Item 1. Legal Proceedings No material changes to legal proceedings have occurred since the 2024 Annual Report on Form 10-K filing - No material changes to legal proceedings have occurred since the filing of the 2024 Annual Report on Form 10-K[141] Item 1A. Risk Factors No material changes to risk factors have occurred since the 2024 Annual Report on Form 10-K filing - No material changes to risk factors have occurred since the filing of the 2024 Annual Report on Form 10-K[142] Item 5. Other Information No Form 8-K information, nomination process modifications, or Rule 10b5-1 trading arrangement changes reported in Q1 2025 - During Q1 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement[147] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including agreements, officer certifications, and XBRL data files