Financial Performance - The company reported revenues of $4.1 million for the three months ended September 30, 2025, compared to $3.2 million for the same period in 2024, primarily driven by ATEC sales of $4.0 million [130]. - Revenue for the nine months ended September 30, 2025, was $11.2 million, up from $4.9 million in the same period of 2024, driven by ATEC sales of $10.1 million compared to $3.5 million in 2024 [138]. - Operating loss for the three months ended September 30, 2025, was $4.9 million, slightly higher than the $4.8 million loss in the same period of 2024, attributed to increased professional fees and improved ATEC profitability [128]. - Operating loss for the nine months ended September 30, 2025, was $18.2 million, compared to a loss of $16.6 million in 2024, attributed to increased professional fees and compensation costs [137]. - The company incurred a net loss of $7.1 million for the three months ended September 30, 2025, compared to a net loss of $6.8 million in the same period of 2024 [128]. Cost and Expenses - General and administrative expenses increased to $5.2 million in Q3 2025 from $4.1 million in Q3 2024, primarily due to higher legal and consulting fees [132]. - General and administrative expenses, excluding stock-based compensation, increased to $16.9 million for the nine months ended September 30, 2025, from $12.7 million in 2024, mainly due to higher legal and consulting fees [140]. - Cost of sales for the nine months ended September 30, 2025, was $7.8 million, compared to $4.3 million in 2024, with ATEC gross margin improving to 44.1% from 31.4% [139]. - Compensation costs for stock and option awards were $3.8 million for the nine months ended September 30, 2025, compared to $3.6 million in 2024, reflecting stock-based non-cash awards [142]. Water Supply and Infrastructure - The company has entered into agreements for the purchase of 21,275 acre-feet per year (AFY) of annual water supply, representing 85% of the Northern Pipeline's capacity [115]. - The company holds vested water rights allowing the withdrawal of an average of 50,000 acre-feet per year, totaling 2.5 million acre-feet over 50 years [109]. - The company’s water storage capacity includes the ability to store up to 1 million acre-feet of imported surplus water for drought periods [110]. - The company has established a new business entity, Mojave Water Infrastructure Company, to finance the construction of the Mojave Groundwater Bank and associated facilities [119]. - The company expects to receive up to $450 million in equity capital investments for the Mojave Water Infrastructure Company, LLC, with a definitive agreement for $51 million from Lytton Rancheria [120]. Cash Flow and Financing - Cash used in operating activities decreased to $12.0 million for the nine months ended September 30, 2025, from $15.3 million in 2024, driven by reduced working capital needs at ATEC [159]. - Cash used in investing activities increased significantly to $11.3 million for the nine months ended September 30, 2025, compared to $0.5 million in 2024, primarily for securing an option to purchase steel pipeline for the Mojave Groundwater Bank [160]. - Cash provided by financing activities totaled $13.0 million for the nine months ended September 30, 2025, compared to $14.7 million for the same period in 2024, reflecting a decrease of approximately 11.6% [161]. - The company completed a registered direct offering in March 2025, raising approximately $20.0 million in gross proceeds from the sale of 5,715,000 shares [147]. - The company has entered into a definitive agreement with Lytton Rancheria for a potential unsecured term loan of up to $51 million for the construction of the Mojave Groundwater Bank [155]. Future Outlook and Capital Needs - ATEC operations are expected to be funded using existing capital and cash profits generated from operations during 2025 [162]. - Future working capital needs will depend on the measures pursued in the entitlement and development of water supply and other resources [163]. - Additional capital may be needed in the long term to finance working capital needs and capital expenditures, particularly related to the Mojave Groundwater Bank [163]. - The company is evaluating cash requirements and may meet future needs through equity or debt placements, or asset sales [164]. - Equity placements will be undertaken only as necessary to minimize dilution for existing stockholders [164]. - Limitations on liquidity and capital raising ability may adversely affect the company [164].
CADIZ(CDZIP) - 2025 Q3 - Quarterly Report