CADIZ INC
For the period ended Mar 31, 2026. Filed May 14, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 14, 2026
CDZI$3.58+5.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-13.
0001437749-25-034647
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001437749-26-017051
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 61 current paragraphs.
27 unchanged; 21 reworded; 13 added; 18 removed; 8 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
ITEM 2. Management**’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
The combination of the water supply, water storage and water conveyance infrastructure described above constitutes the “Mojave Groundwater Bank” as discussed in more detail in Item 1. – Business of our Annual Report on Form 10-K for the year ended December 31, 2025.
Current report
We expect the remaining water supply available under our current permit to be contracted for delivery via the Southern Pipeline. We are in discussion with several parties interested in contracting for the supply from the Southern Pipeline, including multiple water providers, municipalities and tribes in Arizona that could take delivery from the Colorado River’s Central Arizona Project under exchange agreements as well as existing Southern California based water users.
Current report
In addition to available water supply, the Mojave Groundwater Bank offers one million acre-feet of imported storage capacity and an additional 150,000 acre-feet for carryover storage of existing contracted supplies. We are in discussions with multiple parties with interest in contracting for storage capacity in the project. We expect the capacity charge for contracted storge capacity will range from $1,500 - $3,000 per acre-foot, plus annual maintenance and operational fees. In October 2025, we executed an MOU with the U.S. Bureau of Reclamation to explore incorporating the Mojave Groundwater Bank, including supply and storage capacity, into long-term Colorado River system planning, as federal authorities contemplate solutions to the ongoing drought and long-term stress on the river system.
Current report
In October 2025, we entered into the Lytton Credit Agreement, pursuant to which we may require Lytton to provide up to $51 million in an unsecured loan facility, convertible into the Storage Cash Flows Right, which Lytton would then contribute to MWI, in exchange for equity interests in MWI on the same economic terms offered to other equity investors in MWI. The Lytton Credit Agreement represents the first tranche of up to approximately $451 million in total equity capital being raised by us through MWI, to construct, own and operate the Mojave Groundwater Bank (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”).
Current report
In addition to WIFIA, we are evaluating potential revenue bond issuances through a financing focused Joint Powers Authority formed by Fenner Gap Mutual Water Company and the County of San Bernardino in April 2026 to fund any remaining construction costs.
Current report
On October 27, 2025, we entered into the Lytton Credit Agreement, pursuant to which Lytton provided the first tranche of capital (the “Tribal Investment”) for construction of the Mojave Groundwater Bank. Under the Lytton Credit Agreement, the Company at its election may draw, as an unsecured term loan, up to $51 million in one or more installments beginning on the Effective Date and ending April 30, 2027. The unsecured term loan bears interest at a fixed rate of 8% per annum, payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year. Interest may be paid in cash or, upon mutual agreement between us and Lytton, in shares of our common stock determined in accordance with the Lytton Credit Agreement. The Tribal Investment matures on April 30, 2031 (“Initial Maturity Date”) which may be extended to April 30, 2036 if any principal amount remains outstanding as of the Initial Maturity Date.
Current report
In connection with the Lytton Credit Agreement, the Company agreed to issue shares of its common stock to Lytton as follows:
Current report
At any time following the funding of the full $51 million Tribal Investment amount under the Lytton Credit Agreement, at Lytton’s election, any outstanding principal and accrued interest of the Tribal Investment may be converted into a contractual right to receive a share of future cash flows from our water-storage rights (the “Storage Cash Flows Right”), which will entitle Lytton to receive 51% of the cash flows generated from our water-storage operations, provided that Lytton contributes the Storage Cash Flows Right to MWI, our special purpose entity formed to construct, own and operate the Mojave Groundwater Bank, in exchange for an ownership interest in MWI alongside other expected equity investors in MWI on the same economic terms.
Current report
The proceeds from the Tribal Investment will be used to fund the construction, development, ownership, operation, and other ongoing costs of the Mojave Groundwater Bank, and to reimburse our expenses related thereto. We made an initial draw of $15 million for reimbursement of Mojave Groundwater Bank project expenses and to support development activities in November 2025 and a second draw of $15 million in March 2026 (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”). An additional $21 million remains undrawn under the Lytton Credit Agreement.
Current report
Recent Accounting Pronouncements
Current report
See Note 1 to the Condensed Consolidated Financial Statements – “Basis of Presentation”.
Removed paragraphs (18)
Previous report
Cadiz Inc.
Previous report
Cadiz Inc.
Previous report
Through membership in Fenner Gap Mutual Water Company, a mutual water company to be owned by the participating water agencies, these agreements provide for delivery of purchased annual water supply over a 40-year term (take or pay), at an agreed upon market price estimated to start at approximately $850/AFY (in 2024 dollars) and subject to annual adjustment. Participating water providers are also expected to pay a portion of operating costs and the capital costs for conversion of facilities.
Previous report
In August 2025, we entered into a non-binding Memorandum of Understanding (“MOU”) with EPCOR NR Holdings Inc. (“EPCOR”) to pursue development of the Mojave Groundwater Bank to provide long-term water supply for the benefit of EPCOR customers in Arizona (“Arizona off-takers”). The MOU contemplates entering into an exclusive marketing agreement wherein Cadiz will grant EPCOR exclusive rights to market 25,000 acre-feet per year (AFY) of conserved water from the Mojave Groundwater Bank to Arizona off-takers, and EPCOR will make a capital contribution to fund the design and construction of its reserve capacity in the Southern Pipeline system.
Previous report
Cadiz Inc.
Previous report
Since fourth quarter of 2024, we have entered into non-binding letters of intent (“LOIs”) and a letter of agreement (“LOA”) with potential investors in MWI, including public and private infrastructure funds, tribal and other public equity investors. These potential investors are currently engaged in due diligence in anticipation of the conversion of these LOIs and LOA into definitive agreements for equity capital investments in MWI of up to $450 million. In October 2025, we entered into a definitive agreement with Lytton Rancheria of California, a federally recognized Native American tribe ("Lytton”), pursuant to which Lytton will provide up to $51M in an unsecured loan facility, convertible into an ownership interest in MWI, as the first tranche of project construction capital (see Note 11 -“Subsequent Events”). These funds are to be used primarily to fund deposits on equipment necessary for construction of Northern Pipeline facilities in 2026 and to reimburse the Company for Project development expenses incurred in 2025. In addition, the Company is currently engaged in the completion of due diligence with the other potential investors in MWI for the contribution of up to $400 million of equity into MWI, to be used in coordination with our planned timeline for construction of the Northern Pipeline in 2026 and Southern Pipeline in 2027.
Previous report
Cadiz Inc.
Previous report
Cadiz Inc.
Previous report
Cadiz Inc.
Previous report
Nine Months Ended September 30, 2025, Compared to Nine Months Ended September 30, 2024
Previous report
Cadiz Inc.
Previous report
We incurred an operating loss of $18.2 million in the nine months ended September 30, 2025, compared to a $16.6 million operating loss during the nine months ended September 30, 2024. The higher operating loss in 2025 was primarily due to increased professional fees incurred in advancing the development of the Mojave Groundwater Bank and higher compensation costs related to stock based non-cash bonus awards offset by improved profitability from ATEC driven by increased filter sales. Net loss for the nine months ended September 30, 2025 was $24.4 million compared to a $22.5 million net loss during the nine months ended September 30, 2024.
Previous report
Cadiz Inc.
Previous report
Depreciation*** *** Depreciation expense totaled $0.9 million during each of the nine months ended September 30, 2025 and 2024.
Previous report
Cadiz Inc.
Previous report
Cadiz Inc.
Previous report
On October 27, 2025, we entered into a definitive agreement (the “Lytton Agreement”) with Lytton Rancheria of California, a federally recognized Native American tribe (“Lytton”), pursuant to which Lytton will provide the first tranche of capital (the “Tribal Investment”) for construction of the Mojave Groundwater Bank. Under the Lytton Agreement, we at our election may draw, as an unsecured term loan, up to $51 million in one or more installments prior to April 30, 2027 (see Note 11 - “Subsequent Events”). Under the Lytton Agreement, the proceeds will be used to fund the construction, development, ownership, operation, and other ongoing costs of the Mojave Groundwater Bank, and to reimburse our expenses related thereto.
Reworded paragraphs (21)
Previous wording
In connection with the“safe harbor”* provisions of the Private Securities Litigation Reform Act of 1995, the following discussion contains trend analysis and other forward-looking statements. Forward-looking statements can be identified by the use of words such as*“intends”,“anticipates”,“believes”,“estimates”,“projects”,“forecasts”,“expects”,“plans”* and*“proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. These include, among others, our ability to maximize value from our land and water resources and our ability to obtain new financings as needed to meet our ongoing working capital needs. See additional discussion under the heading“Risk Factors”* in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024. Our forward-looking statements are made only as of the date hereof. We assume no duty to update these forward-looking statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law.*
Current wording
In connection with the“safe harbor”* provisions of the Private Securities Litigation Reform Act of 1995, the following discussion contains trend analysis and other forward-looking statements. Forward-looking statements can be identified by the use of words such as*“intends”,“anticipates”,“believes”,“estimates”,“projects”,“forecasts”,“expects”,“plans”* and*“proposes”. Although we believe that the expectations reflected in these forward-looking statements are based on reasonable assumptions, there are a number of risks and uncertainties that could cause actual results to differ materially from these forward-looking statements. These include, among others, our ability to maximize value from our portfolio of assets and our ability to obtain new financings as needed to meet our ongoing working capital needs. See additional discussion under the heading“Risk Factors”* in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. Our forward-looking statements are made only as of the date hereof. We assume no duty to update these forward-looking statements to reflect new, changed or unanticipated events or circumstances, other than as may be required by law.*
Previous wording
We are a water solutions provider with a unique combination of land, water, pipeline and water filtration assets located in Southern California between major water systems serving population centers in the Southwestern United States. Our portfolio of assets includes 2.5 million acre-feet of water supply, 1 million acre-feet of groundwater storage capacity, 220 miles of existing, underground pipeline, 43 miles of right-of-way entitlements for pipeline construction, and versatile, scalable and cost-effective water filtration technology that removes contaminants and constituents of concern from groundwater. Our customers are public and private water systems, government agencies and commercial businesses.
Current wording
We are a water solutions provider with a unique combination of land, water, pipeline and water filtration assets located in Southern California between major water systems serving population centers in the Southwestern United States. Our portfolio of assets includes 2.5 million acre-feet of permitted water supply, 1 million acre-feet of groundwater storage capacity, 220 miles of existing, underground pipeline, 43 miles of right-of-way entitlements for pipeline construction, and versatile, scalable and cost-effective water filtration technology that removes contaminants and constituents of concern from groundwater. Our customers are public and private water systems, government agencies and commercial businesses.
Previous wording
Water Conveyance – We own an existing 220-mile 30-inch steel pipeline (“Northern Pipeline”), that intersects several water storage and conveyance facilities in Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. The capacity of the Northern Pipeline for water conveyance is 25,000 AFY. We also own a 99-year lease with the Arizona & California Railroad Company that will allow us to construct a 43-mile water conveyance pipeline (“Southern Pipeline”) within the existing, active railroad right-of-way that extends from the Cadiz Ranch to the Colorado River Aqueduct (“CRA”). We expect the capacity of the Southern Pipeline to be 150,000 AFY to accommodate imported water storage. We hold an option to purchase up to 180 miles of existing unused 36” steel pipeline that can be used in construction of the Southern Pipeline system or to replace certain components of the Northern Pipeline.
Current wording
Water Conveyance – We own an existing 220-mile 30-inch steel pipeline (“Northern Pipeline”), that intersects several water storage and conveyance facilities in Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. The maximum potential capacity of the Northern Pipeline for water conveyance is anticipated to be 25,000 AFY with expected throughput to be between 20,000 – 23,000 AFY. We also own a 99-year lease with the Arizona & California Railroad Company that will allow us to construct a 43-mile water conveyance pipeline (“Southern Pipeline”) within the existing, active railroad right-of-way that extends from the Cadiz Ranch to the Colorado River Aqueduct (“CRA”). We currently expect the capacity of the Southern Pipeline to be 120,000 AFY to accommodate imported water storage. We hold an option to purchase up to 180 miles of existing unused 36” steel pipeline that can be used in construction of the Southern Pipeline system or to replace certain components of the Northern Pipeline.
Previous wording
In 2024, we entered into agreements with public water systems, private utility and other private water providers for their purchase of 21,275 AFY of annual water supply from us to be delivered via the Northern Pipeline. These agreements cumulatively represent 85% of the full capacity (25,000 AFY) of the Northern Pipeline.
Current wording
Beginning in 2024, we entered into long-term agreements with public water systems, private utility and other private water providers for the delivery of 21,275 AFY of annual water supply from the Mojave Groundwater Bank via the Northern Pipeline, representing approximately 85% of capacity of the Northern Pipeline and 45% of total average long-term supply available under our current permits. Through membership in Fenner Gap Mutual Water Company, the mutual water company we formed to carry out the project, participating water providers will purchase, for up to a 50-year term (take on delivery), their contracted water supply at an agreed upon market price between $1,450 - $1,950/AFY (2024 dollars) that is estimated to provide a net return of approximately $850/AFY (2024 dollars and subject to annual inflation adjustment), after payment of operations and maintenance costs and a pro rata portion of capital costs for construction of the facilities of the Mojave Groundwater Bank project. The cost to participating water providers is estimated at this time without consideration of expected grant funding or low-interest government loans that may reduce capital costs.
Previous wording
To finance construction of all improvements and required facilities to operate the Mojave Groundwater Bank, including the Northern Pipeline, the Southern Pipeline, the wellfield and associated power facilities, we have established a new business entity, Mojave Water Infrastructure Company, LLC (“MWI”) that will fund these capital costs in partnership with public sector, tribal and other investors.
Current wording
To finance construction of all improvements and required facilities to operate the Mojave Groundwater Bank project including the Northern Pipeline, Southern Pipeline and related facilities currently estimated at $1.25 - $1.5 billion, we established a new special purpose business entity Mojave Water Infrastructure Company LLC (“MWI”) that we expect will fund these capital costs in partnership with public sector, tribal and other investors.
Previous wording
Upon completion of definitive agreements for an additional $400 million in equity capital investments in MWI, we expect to contribute to MWI our pipeline infrastructure assets, including the Northern Pipeline and the Southern Pipeline right-of-way. In addition, Lytton would contribute to MWI its Storage Cash Flows Right (see Note 11 – “Subsequent Events”), so that the MWI investors would share in the cash flows generated from the constructed facilities. Under this potential structure, in consideration of our transfer of assets, we expect to receive an upfront capital payment at closing and a share in the long-term cash flows generated by MWI, among other considerations.
Current wording
In addition, we are currently engaged in the completion of due diligence with private equity investors for up to a targeted $400 million in equity commitment to MWI. Upon completion of definitive agreements for an estimated additional $400 million in equity capital investments in MWI, we expect to contribute to MWI our pipeline infrastructure assets, including the Northern Pipeline and the Southern Pipeline right-of-way. In addition, Lytton would contribute to MWI the Storage Cash Flows Right (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”). Accordingly, MWI investors would be expected to share in the cash flows generated from the constructed facilities including from the supply agreements and the Storage Cash Flows Right. Under this potential structure, in consideration of our transfer of assets, we expect to receive an upfront capital reimbursement payment at closing and an equity interest in MWI, entitling us to share in the long-term cash flows generated by MWI, among other consideration.
Previous wording
MWI investors are expected to coordinate with us and project participants to seek available infrastructure grants and/or other financing alternatives, including potential revenue bond issuances through a to-be-formed financing Joint Powers Authority, to fund any remaining construction costs.
Current wording
MWI investors are expected to coordinate with us and project participants to seek available infrastructure grants and/or other financing alternatives. In February 2026 we received an invitation from the U.S. Environmental Protection Agency (“EPA”) to apply for up to $194 million under the Water Infrastructure Finance and Innovation Act (“WIFIA”) program to support Northern Pipeline conversion costs. This pre-application invitation reserves federal funding for the project while we advance through the underwriting process.
Previous wording
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 an operating loss of $4.9 million in the three months ended September 30, 2025, compared to a $4.8 million operating loss during the three months ended September 30, 2024. The higher loss in 2025 was primarily due to increased professional fees incurred in advancing the development of the Mojave Groundwater Bank offset by lower compensation costs related to stock based non-cash bonus award and improved profitability from ATEC driven by increased filter sales. Net loss for the three months ended September 30, 2025 was $7.1 million compared to a $6.8 million net loss during the three months ended September 30, 2024.
Current wording
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 an operating loss of $6.8 million in the three months ended March 31, 2026, compared to a $7.5 million operating loss during the three months ended March 31, 2025. The reduced loss in 2026 was primarily due to higher compensation costs related to stock based non-cash bonus awards in 2025. Net loss for the three months ended March 31, 2026 was $8.6 million compared to a $9.6 million net loss during the three months ended March 31, 2025.
Previous wording
Revenues Revenue totaled $11.2 million during the nine months ended September 30, 2025, primarily related to ATEC sales totaling $10.1 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.8 million and rental income from our agricultural leases totaling $0.3 million. Revenue totaled $4.9 million during the nine months ended September 30, 2024, primarily related to ATEC sales totaling $3.5 million, sales from the harvest from our 760 acres of commercial alfalfa crop totaling $1.1 million and rental income from our agricultural leases totaling $0.3 million. The increase in ATEC sales primarily relates to revenues from shipment of 308 filters in 2025 compared to shipment of 132 filters in 2024.
Current wording
Revenues Revenue totaled $1.6 million during the three months ended March 31, 2026 primarily related to ATEC sales totaling $1.3 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.2 million and rental income from agricultural leases totaling $0.1 million. Revenue totaled $3.0 million during the three months ended March 31, 2025, primarily related to ATEC sales totaling $2.4 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.5 million and rental income from agricultural leases totaling $0.1 million. The decrease in ATEC revenues primarily reflects an anticipated reduction in volume of filters shipped in the first quarter of 2026 compared to 2025. Filter revenues in the 1 st quarter of 2025 related to a mega project for the Central Utah Water Conservancy District’s Vineyard Wellfield Groundwater Polishing Project.
Previous wording
Cost of Sales** **Cost of sales totaled $3.0 million during the three months ended September 30, 2025, comprised of $2.0 million related to ATEC (49.6% gross margin) and $1.0 million related to our alfalfa crop harvest. Cost of sales totaled $2.4 million during the three months ended September 30, 2024, comprised of $1.9 million related to ATEC (32.1% gross margin) and $0.5 million related to our alfalfa crop harvest. The improved ATEC gross margin is driven by the increase in filter sales over which the fixed costs included in cost of sales can be spread.
Current wording
Cost of Sales** **Cost of sales totaled $1.2 million during the three months ended March 31, 2026, comprised of $0.9 million related to ATEC (27.6% gross margin) and $0.3 million related to our alfalfa crop harvest. Cost of sales totaled $2.1 million during the three months ended March 31, 2025, comprised of $1.6 million related to ATEC (35.2% gross margin) and $0.5 million related to our alfalfa crop harvest. The decrease in ATEC gross margin is driven by the reduced filter sales over which the fixed costs included in cost of sales can be spread.
Previous wording
General and Administrative Expenses*** ***General and administrative expenses during the three months ended September 30, 2025, exclusive of stock-based compensation costs, totaled $5.2 million compared to $4.1 million for the three months ended September 30, 2024. The increase in 2025 was primarily a result of increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank and increased marketing commissions and sales expenses related to ATEC growth.
Current wording
***General and Administrative Expenses ***General and administrative expenses during the three months ended March 31, 2026, exclusive of stock-based compensation costs, totaled $6.4 million compared to $5.3 million for the three months ended March 31, 2025. The increase in 2026 was primarily due to increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank, accrued cash bonuses recorded in the 2026 period and increased marketing commissions and sales expenses related to ATEC. General and administrative expense for ATEC totaled $1.1 million during the three months ended March 31, 2026 compared with $0.7 million for the same period in 2025.
Previous wording
Compensation costs for stock and option awards for the three months ended September 30, 2025, were $0.5 million, compared to $1.2 million for the three months ended September 30, 2024. The higher 2024 expense was primarily due to higher stock-based non-cash awards to employees and consultants in 2024 compared to 2025 (see Note 4 to the Condensed Consolidated Financial Statements – “Stock-Based Compensation Plans”).
Current wording
Compensation costs for stock and option awards for the three months ended March 31, 2026, were $0.5 million, compared to $2.8 million for the three months ended March 31, 2025. The higher 2025 expense was primarily due to higher stock-based non-cash awards to employees and consultants in 2025 compared to 2026 (see Note 4 to the Condensed Consolidated Financial Statements – “Stock-Based Compensation Plans”).
Previous wording
Depreciation*** *** Depreciation expense totaled $0.3 million during each of the three months ended September 30, 2025 and 2024.
Current wording
Depreciation*** *** Depreciation expense totaled $0.4 million during the three months ended March 31, 2026 compared to $0.3 million during the three months ended March 31, 2025.
Previous wording
Interest Expense, net Net interest expense totaled $2.2 million during the three months ended September 30, 2025 compared to $2.0 million during the same period in 2024. The following table summarizes the components of net interest expense for the two periods (in thousands):
Current wording
Interest Expense, net Net interest expense totaled $2.5 million during the three months ended March 31, 2026, compared to $2.1 million during the same period in 2025. The following table summarizes the components of net interest expense for the two periods (in thousands):
Previous wording
Increased interest expense is primarily due to increased borrowing under the Third Amended Credit Agreement. Interest income primarily relates to interest on investments in short-term deposits.
Current wording
Increased interest expense is primarily due to borrowings under the Lytton Credit Agreement. Interest income primarily relates to interest on investments in short-term deposits.
Previous wording
$5.0 million of the net proceeds from the November 2024 Direct Offering were paid in January 2025 to secure an exclusive option finalized in December 2024 to purchase up to 180 miles of steel pipe intended to be used for the development of the Mojave Groundwater Bank. The remaining proceeds from the November 2024 Direct Offering and the proceeds from the March 2025 Direct Offering were used for capital and other expenses related to the development and construction of the Mojave Groundwater Bank, which may include acquisition of equipment and materials intended to be used in construction of facilities related to our Northern and/or Southern Pipelines, which we expect to begin in 2025. Net proceeds from the offerings may also be used for the equipment and materials related to wellfield infrastructure on land owned by us and our subsidiaries, business development activities, other capital expenditures, working capital, the expansion of our business and general corporate purposes.
Current wording
The proceeds from the March 2025 Direct Offering were used for capital and other expenses related to the development and construction of the Mojave Groundwater Bank, working capital, and general corporate purposes.
Previous wording
As we continue to actively pursue our business strategy, additional financing will continue to be required (see “Outlook”, below). The covenants in the Credit Agreement, as amended, do not prohibit our use of additional equity financing and allow us to retain 100% of the proceeds of any common equity financing. We do not expect the loan covenants to materially limit our ability to finance Mojave Groundwater Bank, agricultural operations and water filtration business activities.
Current wording
As we continue to actively pursue our business strategy, additional financing will continue to be required (see “Outlook”, below). The covenants in the Credit Agreement, as amended, do not prohibit our use of additional equity financing and allow us to retain 100% of the proceeds of any common equity financing. We do not expect the loan covenants to materially limit our ability to finance our water and agricultural development activities.
Previous wording
Cash Used in Operating Activities. Cash used in operating activities totaled $12.0 million and $15.3 million for the nine months ended September 30, 2025 and 2024, respectively. The cash was primarily used to fund general and administrative expenses related to our water development efforts, agricultural development efforts, and our ATEC business. The decrease in cash used in operating activities was primarily driven by a decrease in working capital needs at ATEC due to completion of the final shipment of the contracted 320 filters for the Central Utah Water Conservancy District’s Vineyard Wellfield Groundwater Polishing Project during the second quarter of 2025.
Current wording
Cash Used in Operating Activities. Cash used in operating activities totaled $5.5 million for the three months ended March 31, 2026 and $3.6 million for the three months ended March 31, 2025. The cash was primarily used to fund general and administrative expenses related to our water development efforts, agricultural development efforts, and our ATEC business including working capital needs. The increase in cash used in operating activities was driven by the increased cash losses from operations in 2026 primarily resulting from increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank.
Previous wording
Cash Used in Investing Activities. Cash used in investing activities totaled $11.3 million for the nine months ended September 30, 2025, and $0.5 million for the nine months ended September 30, 2024. The cash used in 2025 was primarily related to securing an exclusive option to purchase up to 180 miles of steel pipeline intended to be used for the development of the Mojave Groundwater Bank for $5.0 million. The cash used in the 2024 period primarily related to the development cost for the planting of 125 additional acres of alfalfa.
Current wording
Cash Used in Investing Activities. Cash used for investing activities for the three months ended March 31, 2026, was $0.2 million, compared with $6.3 million for the three months ended March 31, 2025. The cash used in 2026 was primarily related to engineering design costs related to the Mojave Groundwater Bank project. The cash used in the 2025 was primarily related to securing an exclusive option to purchase up to 180 miles of steel pipeline for the development of the Mojave Groundwater Bank for $5.0 million.
Previous wording
Cash Provided by Financing Activities***.***Cash provided by financing activities totaled $13.0 million for the nine months ended September 30, 2025, compared with cash provided of $14.7 million for the nine months ended September 30, 2024. Proceeds from the financing activities in the 2025 period primarily related to the issuance of shares under a direct offering and the payment of a deferred portion of the purchase price related to the ATEC acquisition. Proceeds from financing activities for the 2024 period related to the issuance of long-term debt under the Third Amended Credit Agreement.
Current wording
Cash Provided by Financing Activities***.***Cash provided by financing activities totaled $13.7 million for the three months ended March 31, 2026, compared with cash provided by financing activities of $16.8 million for the three months ended March 31, 2025. Proceeds from the financing activities in the 2026 period primarily related to a $15 million draw under the Lytton Credit Agreement in March 2026. Proceeds from financing activities for the 2025 period primarily related to the issuance of shares under a direct offering.
Previous wording
***Short-Term Outlook.***Proceeds from draws under the Tribal Investment, together with cash on hand, provide us with sufficient funds to meet our short-term working capital needs. Our ATEC operations are expected to be funded using existing capital and cash profits generated from operations during 2025.
Current wording
***Short-Term Outlook.***Proceeds from draws under the Lytton Credit Agreement, including the $15 million draw made in March 2026, together with cash on hand, provide us with sufficient funds to meet our short-term working capital needs. Our ATEC operations are expected to be funded using existing capital, and anticipated cash profits generated from operations during 2026.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Revenues Revenue totaled $4.1 million during the three months ended September 30, 2025, primarily related to ATEC sales totaling $4.0 million and rental income from agricultural leases totaling $0.1 million. Revenue totaled $3.2 million during the three months ended September 30, 2024, primarily related to ATEC sales totaling $2.8 million, sales from the harvest from our then 760 acres of commercial alfalfa crop totaling $0.3 million and rental income from our agricultural leases totaling $0.1 million. The increase in ATEC sales primarily relates to revenues from shipment of 113 filters in 2025 compared to shipment of 95 filters in 2024.
Previous report — wording carried elsewhere
Interest income primarily relates to interest on investments in short-term deposits.
Previous report — wording carried elsewhere
Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the nine months ended September 30, 2025 and 2024:
Previous report — wording carried elsewhere
Cost of Sales*** ***Cost of sales totaled $7.8 million during the nine months ended September 30, 2025, which comprised of $5.7 million related to ATEC (44.1% gross margin) and $2.1 million related to our alfalfa crop harvest. Cost of sales totaled $4.3 million during the nine months ended September 30, 2024, which comprised of $2.4 million related to ATEC (31.4% gross margin) and $1.9 million related to our alfalfa crop harvest. The improved ATEC gross margin is driven by the increase in filter sales over which the fixed costs included in cost of sales can be spread.
Previous report — wording carried elsewhere
General and Administrative Expenses*** ***General and administrative expenses, exclusive of stock-based compensation costs, totaled $16.9 million in the nine months ended September 30, 2025, compared to $12.7 million in the nine months ended September 30, 2024. The increase in 2025 was primarily a result of increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank and increased marketing commissions and sales expenses related to ATEC growth.
Previous report — wording carried elsewhere
Compensation costs for stock and option awards for the nine months ended September 30, 2025, were $3.8 million, compared to $3.6 million for the nine months ended September 30, 2024. The higher 2025 expense was primarily due to stock-based non-cash awards to employees and consultants.
Previous report — wording carried elsewhere
Interest Expense, net Net interest expense totaled $6.2 million during the nine months ended September 30, 2025 compared to $5.9 million during the same period in 2024. The following table summarizes the components of net interest expense for the two periods (in thousands):
Previous report — wording carried elsewhere
In November 2024, we completed the sale and issuance of 7,000,000 shares of our common stock to certain institutional investors in a registered direct offering (“November 2024 Direct Offering”). The shares of common stock were sold at a purchase price of $3.34 per share, for aggregate gross proceeds of $23.4 million and aggregate net proceeds of approximately $22.1 million.