CADIZ(CDZIP) - 2025 Q4 - Annual Report

Financial Performance - Total revenue for the year ended December 31, 2025, was $16.3 million, an increase from $9.6 million in 2024, primarily driven by ATEC sales of $14.5 million compared to $7.9 million in 2024[166] - The company incurred a net loss of $34.2 million for the year ended December 31, 2025, compared to a net loss of $31.1 million for the year ended December 31, 2024[164] - Operating income (loss) for the Land and Water Resources segment was $(28.1) million in 2025, compared to $(25.0) million in 2024, while the Water Filtration Technology segment reported an operating income of $2.5 million in 2025[164] - Cost of sales for the year ended December 31, 2025, totaled $11.2 million, with a gross margin of 48.4% for ATEC, up from 45.5% in 2024[167] Expenses and Costs - General and administrative expenses increased to $24.2 million in 2025 from $19.7 million in 2024, primarily due to higher legal and consulting fees[168] - Interest expense increased to $8.6 million in 2025 from $7.9 million in 2024, primarily due to increased borrowing under the Lytton Credit Agreement[170] Investments and Acquisitions - The company completed the acquisition of ATEC Water Systems, enhancing its water filtration technology capabilities[151] - The company has established a new special purpose business entity, Mojave Water Infrastructure Company LLC, to finance the Mojave Groundwater Bank project, with estimated capital costs of $1.5 billion[155] - Agreements have been made for the purchase of 21,275 acre-feet per year of water supply, with an estimated market price starting at approximately $850 per acre-foot[154] Cash Flow and Financing Activities - Cash used for operating activities totaled $18.9 million for the year ended December 31, 2025, a decrease from $21.5 million in 2024, primarily due to reduced working capital needs[190] - Cash used for investing activities increased to $12.6 million in 2025 from $1.2 million in 2024, mainly for securing an exclusive option for steel pipeline purchase and other project-related costs[191] - Cash provided by financing activities was $25.4 million for the year ended December 31, 2025, compared to $35.5 million in 2024, with proceeds primarily from share issuance and initial borrowing under the Lytton Credit Agreement[192] - The company entered into the Lytton Credit Agreement, allowing for up to $51 million in unsecured term loans for the Mojave Groundwater Bank construction, with an interest rate of 8% per annum[183] - The company made an initial draw of $15 million from the Lytton Credit Agreement for project expenses in November 2025 and a second draw of $15 million in March 2026[186] - The company expects to meet short-term working capital needs through proceeds from the Lytton Credit Agreement and cash on hand[193] - Long-term capital needs will depend on the progress of the Mojave Groundwater Bank and other development activities, with potential additional capital raises anticipated[194] - The company is evaluating cash requirements and potential financing methods, including equity or debt placements, to minimize dilution for existing shareholders[195] Asset Management and Valuation - The company conducts a quantitative assessment using the present value (discounted cash flow) method to determine the fair value of reporting units with goodwill[202] - In the fourth quarter of 2025, the goodwill of all reporting units in the water and land resources and water filtration technology segments was tested, and it was determined that their fair values were more-likely-than-not greater than their carrying values, indicating no impairment[203] - Long-lived assets, including property, plant, and equipment, are depreciated or amortized over their useful lives, which are based on management's estimates of revenue generation periods[204] Regulatory and Reporting Status - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[206]