Cadiz (CDZI)2024-11-13 21:20Water Rights and Supply Agreements - Cadiz Inc. 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 beneficial use in Southern California communities [119]. - In the first three quarters of 2024, Cadiz Inc. 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 [125]. - The Northern Pipeline has a water conveyance capacity of 25,000 acre-feet per year, while the Southern Pipeline's capacity ranges from 75,000 to 150,000 acre-feet per year depending on the diameter selected [122]. - 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 [127]. Financial Performance - Revenue for the three months ended September 30, 2024, totaled 0.4 million in the same period in 2023, primarily driven by ATEC sales of 4.9 million for the nine months ended September 30, 2024, compared to 3.5 million [147]. - The total costs and expenses for the three months ended September 30, 2024, were 4.77 million [139]. - The company incurred a net loss of 6.9 million in the same period in 2023 [140]. - The company incurred a net loss of 24.7 million in the same period of 2023 [146]. Costs and Expenses - Cost of sales for the nine months ended September 30, 2024, was 1.5 million in the same period of 2023 [149]. - General and administrative expenses, excluding stock-based compensation, decreased to 13.2 million in 2023 [150]. - Net interest expense increased to 3.6 million in the same period of 2023, primarily due to increased borrowing [152]. - Compensation costs for stock and option awards rose to 1.1 million in 2023 [151]. Cash Flow and Financing - Cash used in operating activities was 15.4 million in 2023 [169]. - Cash provided by financing activities totaled 18.9 million in the same period of 2023 [171]. - The company completed a registered direct offering in November 2024, raising approximately 21.9 million, providing sufficient funds for short-term working capital needs [172]. Future Capital Needs - Future working capital needs will depend on measures pursued in the entitlement and development of water supply and storage resources [173]. - The company may need to raise additional capital for working capital and capital expenditures in the long term [173]. - Future capital expenditures will depend on the progress of the Water Project and ATEC operational needs [173]. - The company is evaluating cash requirements and potential means of raising cash, including equity or debt placements [175]. - Equity placements will be minimized to reduce the dilutive effect on existing stockholders [175]. - Limitations on liquidity and capital raising ability may adversely affect the company [175]. - Sufficient liquidity is critical for resource development activities [175]. Strategic Investments - A letter of intent was signed with a non-profit investment fund for a prospective investment of up to 800 million to fully operationalize the Mojave Groundwater Banking Project [129].