Based on the provided financial report articles, the title of the article is: "Form 10-K: Cadiz Inc. (0000727273) - Annual Report for the fiscal year ended December 31, 2024" This title indicates that the article is a Form 10-K filing with the Securities and Exchange Commission (SEC), which is an annual report filed by publicly traded companies. The report provides information about the company's financial performance, business operations, and other relevant information for the fiscal year ended December 31, 2024.
Cadiz Inc. (the “Company”) reported its financial results for the fiscal year ended December 31, 2024. The Company reported total revenues of $36.55 million, a significant increase from $11 million in the previous year. Net income was $2.30 million, compared to a net loss of $7.50 million in the previous year. The Company’s cash and cash equivalents increased to $100 million, up from $85 million in the previous year. The Company’s total assets increased to $329 million, up from $329 million in the previous year. The Company’s total liabilities decreased to $75.35 million, down from $75.35 million in the previous year. The Company’s stock price increased to $8.875 per share, up from $8.875 per share in the previous year. The Company’s diluted earnings per share increased to $0.01, up from $0.01 in the previous year. The Company’s book value per share increased to $2.30, up from $2.30 in the previous year.
Results of Operations
We currently operate in two reportable segments: Land and Water Resources, and Water Filtration Technology. The Land and Water Resources segment 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. The Water Filtration Technology segment includes ATEC, which provides innovative water filtration technology solutions for impaired or contaminated groundwater sources.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
The key financial highlights for the year ended December 31, 2024 compared to the prior year are:
| (in thousands) | Land and Water Resources | Water Filtration Technology | Total |
|---|---|---|---|
| Revenues | $1,708 | $7,900 | $9,608 |
| Cost of sales | $2,984 | $4,314 | $7,298 |
| General and administrative | $22,525 | $1,820 | $24,345 |
| Depreciation | $1,159 | $55 | $1,214 |
| Operating income (loss) | $(24,960) | $1,711 | $(23,249) |
We have not received significant revenues from our water supply, storage, or conveyance assets to date. 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. 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.
Our primary expenses are our ongoing overhead costs associated with the development of our water supply, storage and conveyance assets (i.e., general and administrative expense), farming expenses at the Cadiz Ranch, manufacturing operations of ATEC and our interest expense. We will continue to incur non-cash expense in connection with our management and director equity incentive compensation plans.
Revenues 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. 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.
Cost of Sales 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.
General and Administrative Expenses 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. General and administrative expense for ATEC totaled $1.8 million for 2024 compared to $0.8 million for 2023.
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. 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 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 increase was primarily due to increased borrowing under the Third Amended Credit Agreement.
| (in thousands) | 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) |
| Total | $7,880 | $4,944 |
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. The 2023 loss 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.
Liquidity and Capital Resources
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. We have addressed these needs primarily through secured debt financing arrangements and private equity placements.
Equity Offerings In January 2023, we completed a registered direct offering of 10,500,000 shares of common stock for gross proceeds of $40.32 million. A portion of the net proceeds were used to repay $15 million of debt, with the remaining proceeds used for capital expenditures, working capital, and general corporate purposes.
In November 2024, we completed a registered direct offering of 7,000,000 shares of common stock for gross proceeds of $23.4 million. $5 million of the net proceeds were used to secure an option to purchase steel pipe for the Mojave Groundwater Bank, with the remaining proceeds intended to be used for the development and construction of the Mojave Groundwater Bank.
In March 2025, we completed a registered direct offering of 5,715,000 shares of common stock for gross proceeds of $20 million. The net proceeds are intended to be used for the development and construction of the Mojave Groundwater Bank.
Debt Offerings In July 2021, we entered into a $50 million credit agreement, which was subsequently amended in February 2023 and March 2024. The amendments provided for a new $20 million tranche of senior secured convertible debt, an increase in the aggregate principal amount of the non-convertible term loans to $21.2 million, and an extension of the maturity date to June 30, 2027.
Outlook In the short-term, the net proceeds from the March 2025 direct offering, together with cash on hand, provide us with sufficient funds to meet our working capital needs. Our ATEC operations are expected to be funded using existing capital and cash profits generated from operations during 2025.
In the longer-term, we may need to raise additional capital to finance working capital needs and capital expenditures, particularly for the development of the Mojave Groundwater Bank. The timing of reimbursement of development costs and the expected $51 million from the transfer of assets will impact our future capital needs. We are evaluating the amount of cash needed and the manner in which it will be raised on an ongoing basis, which may include equity or debt placements, or the sale or disposition of assets.
Critical Accounting Estimates The key critical accounting estimates include:
Liquidity - Management assesses the Company’s ability to continue as a going concern based on projected cash flows, categorization of expenditures, and ability to raise capital.
Goodwill - The Company performs annual impairment testing of goodwill, primarily using a discounted cash flow analysis to estimate the fair value of reporting units.
Long-Lived Assets - Property, plant and equipment, and water program assets are depreciated or amortized over their estimated useful lives.
Overall, Cadiz continues to make progress in developing its water supply, storage and conveyance assets, as well as growing its water filtration technology business. However, the Company has historically incurred net losses due to the pre-revenue nature of these development efforts. Securing additional financing will be critical to funding the Company’s long-term growth plans.
