CADIZ INC
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
View on SEC.govAbout this filing
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.
Jun 30, 2026 · Filed Aug 13, 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 2026-03-31; filed 2026-05-14.
0001437749-26-017051
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001437749-26-027664
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 61 previous paragraphs and 73 current paragraphs.
31 unchanged; 29 reworded; 7 added; 1 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 6 previous and 9 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 (7)
Current report
We expect the remaining water supply available under our current permit to be contracted for delivery via the Southern Pipeline. In July 2026, we executed a Memorandum of Understanding (“MOU”) with Central Arizona Irrigation and Drainage District (“CAIDD”) for the purchase and sale of up to 10,000 acre-feet per year (“AFY”) from the Mojave Groundwater Bank, representing our first agreement for water supply with an Arizona water district. The MOU is subject to the negotiation of necessary interstate exchange agreements to enable delivery of water from the Mojave Groundwater Bank to CAIDD.
Current report
In July 2026, FGMWC executed the principal construction contracts for the Northern Pipeline conversion project using a construction manager at risk (“CMAR”) delivery model. The contracts establish guaranteed maximum prices (“GMPs”) for the pump station and pipeline replacement components of the Northern Pipeline conversion project. These GMPs, together with contractual pricing and option agreements for equipment, materials and necessary components expected to be procured by MWI, support an estimated capital cost of approximately $400 million to place the Northern Pipeline into service. The Northern Pipeline’s detailed engineering, procurement and construction pricing also provides a more reliable basis for estimating the cost of comparable components of the Southern Pipeline. Although the Southern Pipeline estimate remains subject to further engineering and negotiation of a GMP, we currently estimate that approximately $850 million to $1.0 billion of additional capital will be required to place the Southern Pipeline into service. In total, the expected Northern Pipeline and Southern Pipeline capital costs are estimated at $1.25 - $1.5, billion which is consistent with our estimate from last quarter.
Current report
Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025
Current report
We incurred an operating loss of $15.7 million in the six months ended June 30, 2026, compared to a $13.3 million operating loss during the six months ended June 30, 2025. The higher operating loss in 2026 was primarily due to decreased gross profits from ATEC driven by reduced filter sales. Net loss for the six months ended June 30, 2026 was $20.0 million compared to a $17.3 million net loss during the six months ended June 30, 2025.
Current report
***Cost of Sales ***Cost of sales totaled $2.2 million during the six months ended June 30, 2026, which comprised of $1.5 million related to ATEC (26.0% gross margin) and $0.7 million related to our alfalfa crop harvest. Cost of sales totaled $4.7 million during the six months ended June 30, 2025, which comprised of $3.6 million related to ATEC (40.3% gross margin) and $1.1 million related to our alfalfa crop harvest. The decrease in ATEC gross margin is primarily driven by spreading the fixed costs of manufacturing filters included in cost of sales over a reduced number of filters sold.
Current report
***General and Administrative Expenses ***General and administrative expenses, exclusive of stock-based compensation costs, totaled $13.0 million in the six months ended June 30, 2026, compared to $11.7 million in the six months ended June 30, 2025. The increase in 2026 was primarily a result of increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank. General and administrative expense for ATEC totaled $2.2 million during the six months ended June 30, 2026 compared with $1.9 million for the same period in 2025. The increase in ATEC costs was primarily related to increased salaries and benefits and marketing expenses.
Current report
Depreciation*** *** Depreciation expense totaled $0.8 million during the six months ended June 30, 2026, compared to $0.6 million during the six months ended June 30, 2025.
Removed paragraphs (1)
Reworded paragraphs (29)
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 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.
Current wording
We are a water solutions provider with a unique combination of land, water and infrastructure 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 infrastructure, over 100 miles of right-of-way entitlements for pipeline construction, and versatile, scalable and cost-effective water treatment 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
We manage our landholdings, pipeline and water filtration technology assets to offer a suite of integrated products and services to public water systems, government agencies and commercial customers that include reliable water supply, groundwater storage, water conveyance and custom-designed water filtration technology systems.
Current wording
We manage our landholdings and water supply, pipeline and water treatment technology assets to offer a suite of integrated products and services to public water systems, government agencies and commercial customers that include reliable water supply, groundwater storage, water conveyance and custom-designed water treatment systems.
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 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.
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 21,275 AFY under contract. In July 2026, we received a 45-year right-of-way grant from the U.S. Department of the Interior and the Bureau of Land Management (“BLM”) that authorizes the conversion and operation of the Northern Pipeline for water conveyance including the construction of pump stations and related facilities on federal land. We also own a 99-year lease with the Arizona & California Railroad Company (“ARZC”) that authorizes construction of a 43-mile water conveyance pipeline (“Southern Pipeline”) within the active ARZC 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
Water Filtration Technology – In 2022, we completed the acquisition of the assets of ATEC Water Systems, Inc. into ATEC Water Systems, LLC (“ATEC”), which provides innovative water filtration solutions for impaired or contaminated groundwater sources. ATEC’s specialized filtration media provide cost-effective, high-rate of removal for common groundwater impairments and contaminants that pose health risks in drinking water including iron, manganese, arsenic, Chromium-6, nitrates, per-and-polyfluoroalkyl substances (PFAS) and other constituents of concern.
Current wording
Water Treatment Technology – In 2022, we completed the acquisition of the assets of ATEC Water Systems, Inc. into ATEC Water Systems, LLC (“ATEC”), which provides innovative water treatment solutions for impaired or contaminated groundwater sources. ATEC’s specialized filtration media provide cost-effective, high-rate of removal for common groundwater impairments and contaminants that pose health risks in drinking water including iron, manganese, arsenic, Chromium-6, nitrates, per-and-polyfluoroalkyl substances (PFAS) and other constituents of concern.
Previous wording
Our addition of pipeline infrastructure and ATEC water filtration technology to our portfolio of land and water assets has enabled us to adjust our business model to begin offering integrated services and solutions to public water systems that address the urgent challenges of climate change and make significant progress in advancing contract negotiations for water supply with public water systems.
Current wording
Our addition of pipeline infrastructure and ATEC water treatment technology to our portfolio of land and water assets has enabled us to adjust our business model to begin offering integrated services and solutions to public water systems that address the urgent challenges of climate change and make significant progress in advancing contract negotiations for water supply with public water systems.
Previous 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.
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 $1,650 - $2,100/AFY (2024 dollars) that is estimated to provide a volumetric commodity price for water at the wellhead, plus operations, maintenance, and pro-rated power costs for conveyance and prorated capital charge per acre-foot for dedicated pipeline capacity. 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
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 wording
We are in discussion with several additional 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.
Previous wording
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 wording
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.
Previous 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.
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, we established a new special purpose business entity Mojave Water Infrastructure Company LLC (“MWI”) that we expect will finance these capital costs in partnership with public sector, tribal and other investors through equity contributions as well as debt and/or grant financing opportunities.
Previous wording
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 wording
We are currently engaged in the completion of due diligence with private equity investors for up to a targeted $400 million in equity commitments to MWI. 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 equity capital being raised by MWI, to construct, own and operate the Mojave Groundwater Bank (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”).
Previous 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.
Current wording
Upon completion of definitive agreements for equity capital investments in MWI, we expect to contribute to MWI our pipeline infrastructure assets, including the Northern Pipeline and the Southern Pipeline and their right-of-ways and entitlements, as well as cash flows under the NPL water supply agreements. Lytton would also contribute to MWI its Storage Cash Flows Right (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”). 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. 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.
Current wording
MWI investors are expected to coordinate with us and project participants to seek available infrastructure grants and/or other financing alternatives such as public debt and infrastructure debt financing. 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
ATEC and our agricultural operations provide our current principal source of revenue, although our working capital needs are not fully supported by these operations at this time. We believe that our water supply, storage, pipeline conveyance and treatment solutions will provide a significant source of future cash flow for the business and our stockholders. We presently rely upon debt and equity financing to support our working capital needs and development of our water solutions.
Current wording
ATEC and our agricultural operations provide our current principal source of revenue, although our working capital needs are not fully supported by these operations at this time. We presently rely upon debt and equity financing to support our working capital needs and development of our water solutions.
Previous wording
Our current and future operations also include activities that further our commitments to sustainable stewardship of our land, water, pipeline and water filtration technology assets, good governance and corporate social responsibility. We believe these commitments are important investments that will assist in maintenance of sustained stockholder value.
Current wording
Our current and future operations also include activities that further our commitments to sustainable stewardship of our land, water, pipeline and water treatment technology assets, good governance and corporate social responsibility. We believe these commitments are important investments that will assist in maintenance of sustained stockholder value.
Previous wording
We currently operate in two reportable segments. Our largest segment is Land and Water Resources, which 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. Our second operating segment is Water Filtration Technology comprised of ATEC which provides innovative water filtration technology solutions for impaired or contaminated groundwater sources.
Current wording
We currently operate in two reportable segments. Our largest segment is Land and Water Resources, which 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. Our second operating segment is Water Treatment Technology comprised of ATEC which provides innovative water treatment technology solutions for impaired or contaminated groundwater sources.
Previous wording
We evaluate our performance based on segment operating (loss). Interest expense, income tax expense and losses related to equity method investments are excluded from the computation of operating (loss) for the segments. Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the three months ended March 31, 2026 and 2025:
Current wording
We evaluate our performance based on segment operating (loss). Interest expense, income tax expense and gain on derivative liability are excluded from the computation of operating income (loss) for the segments. Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the three months ended June 30, 2026 and 2025:
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 $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.
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 $8.8 million in the three months ended June 30, 2026, compared to a $5.8 million operating loss during the three months ended June 30, 2025. The higher operating loss in 2026 was primarily due to decreased gross profits from ATEC driven by reduced filter sales and increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank. Net loss for the three months ended June 30, 2026 was $11.4 million compared to a $7.7 million net loss during the three months ended June 30, 2025.
Previous 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.
Current wording
Revenues Revenue totaled $1.0 million during the three months ended June 30, 2026 primarily related to ATEC sales totaling $0.8 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.1 million and rental income from agricultural leases totaling $0.1 million. Revenue totaled $4.1 million during the three months ended June 30, 2025, primarily related to ATEC sales totaling $3.7 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.3 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 second quarter of 2026 compared to 2025. Filter revenues in the second quarter of 2025 primarily 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 $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.
Current wording
**Cost of Sales **Cost of sales totaled $1.0 million during the three months ended June 30, 2026, comprised of $0.6 million related to ATEC (23.7% gross margin) and $0.4 million related to our alfalfa crop harvest. Cost of sales totaled $2.7 million during the three months ended June 30, 2025, comprised of $2.1 million related to ATEC (44.5% gross margin) and $0.6 million related to our alfalfa crop harvest. The decrease in ATEC gross margin is primarily driven by spreading the fixed costs of manufacturing filters included in cost of sales over a reduced number of filters sold.
Previous 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.
Current wording
***General and Administrative Expenses ***General and administrative expenses during the three months ended June 30, 2026, exclusive of stock-based compensation costs, totaled $6.6 million compared to $6.4 million for the three months ended June 30, 2025. The increase in expenses was primarily due to increased legal and consulting fees incurred in advancing the development of the Mojave Groundwater Bank. General and administrative expense for ATEC totaled $1.0 million during the three months ended June 30, 2026 compared with $1.2 million for the same period in 2025. The reduction in ATEC costs was primarily related to reduced marketing commissions from the lower filter sales.
Previous 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”).
Current wording
Compensation costs for stock and option awards for the three months ended June 30, 2026, were $1.8 million, compared to $0.5 million for the three months ended June 30, 2025. The higher 2026 expense was primarily due to higher stock-based non-cash awards to employees and consultants in 2026 compared to 2025 (see Note 4 to the Condensed Consolidated Financial Statements – “Stock-Based Compensation Plans”).
Previous 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):
Current wording
Interest Expense, net Net interest expense totaled $2.9 million during the three months ended June 30, 2026, compared to $2.0 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
As we have not received sufficient 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 revenue will commence. Historically, we have addressed these needs primarily through secured debt financing arrangements and private equity placements.
Current wording
As we have not received sufficient revenues or gross profits from our water, agriculture or water treatment 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 revenue will commence. Historically, we have addressed these needs primarily through secured debt financing arrangements and private equity placements.
Previous wording
On March 6, 2024, we entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund 2012 (“Heerema”) (see Note 3 to the Condensed Consolidated Financial Statements – “Long-Term Debt”). Before entering into the Third Amended Credit Agreement, Heerema purchased the outstanding secured non-convertible term loans under the Credit Agreement (“Assignment”). In connection with the Assignment, the existing holders of both the Convertible Loan and non-convertible term loans consented to effectuate the Third Amended Credit Agreement in consideration of a consent fee in the aggregate amount of $479,845 payable in the form of our common stock (valued at $2.89 per share, or 166,036 shares), which was registered pursuant to an effective shelf registration statement on Form S-3 and a prospectus supplement thereunder. The Third Amended Credit Agreement provides, among other things, (a) a new tranche of senior secured convertible terms loans from Heerema in an aggregate principal amount of $20 million, having a maturity date of June 30, 2027 (“New Secured Convertible Debt”); (b) the aggregate principal amount of the secured non-convertible term loans acquired by Heerema has been increased from $20 million to $21.2 million and the applicable repayment fee in respect thereof has been eliminated; (c) the Convertible Loan existing prior to the Third Amended Credit Agreement, in an aggregate principal amount of approximately $16 million plus interest accruing thereon, has become unsecured; and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027.
Current wording
On March 6, 2024, we entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund 2012 (“Heerema”) (see Note 3 to the Condensed Consolidated Financial Statements – “Long-Term Debt”). Before entering into the Third Amended Credit Agreement, Heerema purchased the outstanding secured non-convertible term loans under the Credit Agreement (“Assignment”). In connection with the Assignment, the existing holders of both the Convertible Loan and non-convertible term loans consented to effectuate the Third Amended Credit Agreement in consideration of a consent fee in the aggregate amount of $479,845 payable in the form of our common stock (valued at $2.89 per share, or 166,036 shares), which was registered pursuant to an effective shelf registration statement on Form S-3 and a prospectus supplement thereunder. The Third Amended Credit Agreement provides, among other things, (a) a new tranche of senior secured convertible terms loans from Heerema in an aggregate principal amount of $20 million, having a maturity date of June 30, 2027 (“New Secured Convertible Debt”); (b) the aggregate principal amount of the secured non-convertible term loans acquired by Heerema has been increased from $20 million to $21.2 million and the applicable repayment fee in respect thereof has been eliminated; (c) the Convertible Loan existing prior to the Third Amended Credit Agreement, in an aggregate principal amount of approximately $16 million plus interest accruing thereon, has become unsecured; and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027. On August 12, 2026, the maturity date of each of these loans was extended to June 30, 2028.
Previous wording
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 wording
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, a second draw of $15 million in March 2026, and a third draw of $10 million in August 2026 (see Note 3 to the Consolidated Financial Statements – “Long-Term Debt”). An additional $11 million remains undrawn under the Lytton Credit Agreement.
Previous 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.
Current wording
Cash Used in Operating Activities. Cash used in operating activities totaled $12.2 million for the six months ended June 30, 2026 and $5.0 million for the six months ended June 30, 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 reduced ATEC filter sales and corresponding working capital activity.
Previous 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.
Current wording
Cash Used in Investing Activities. Cash used for investing activities for the six months ended June 30, 2026, was $3.4 million, compared with $10.8 million for the six months ended June 30, 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, costs to convert three wells to natural gas of $3.5 million, and pipe inspection costs of $1.2 million for the Northern Pipeline.
Previous 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.
Current wording
Cash Provided by Financing Activities***.***Cash provided by financing activities totaled $12.2 million for the six months ended June 30, 2026, compared with cash provided by financing activities of $14.3 million for the six months ended June 30, 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 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.
Current wording
***Short-Term Outlook.***Proceeds from draws under the Lytton Credit Agreement, including the $15 million draw made in March 2026 and the $10 million draw made in August 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 current paragraphs (6)
Current report — wording carried from elsewhere
In September 2025, we executed an MOU with the U.S. Bureau of Reclamation (“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. In late May, we entered into a funding agreement with Reclamation to support technical and regulatory review activities associated with 2025 MOU, including Reclamation’s review of proposed water exchange agreements necessary to deliver water to Arizona parties and technical work to validate water supply and delivery capability and evaluate necessary steps to support potential federal investment in the project.
Current report — wording carried from elsewhere
Segment net revenue, segment operating expenses and segment operating (loss)/income information consisted of the following for the six months ended June 30, 2026 and 2025:
Current report — wording carried from elsewhere
Revenues Revenue totaled $2.6 million during the six months ended June 30, 2026, primarily related to ATEC sales totaling $2.0 million, sales from the harvest from our 890 acres of commercial alfalfa crop totaling $0.4 million and rental income from our agricultural leases totaling $0.2 million. Revenue totaled $7.1 million during the six months ended June 30, 2025, primarily related to ATEC sales totaling $6.1 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 $0.2 million. The decrease in ATEC revenues primarily reflects an anticipated reduction in volume of filters shipped in 2026 compared to 2025. Filter revenues in 2025 primarily related to a mega project for the Central Utah Water Conservancy District’s Vineyard Wellfield Groundwater Polishing Project.
Current report — wording carried from elsewhere
Compensation costs for stock and option awards for the six months ended June 30, 2026, were $2.3 million, compared to $3.3 million for the six months ended June 30, 2025. The higher 2025 expense was primarily due to stock-based non-cash awards to employees and consultants.
Current report — wording carried from elsewhere
Interest Expense, net Net interest expense totaled $5.4 million during the six months ended June 30, 2026 compared to $4.0 million during the same period in 2025. The following table summarizes the components of net interest expense for the two periods (in thousands):
Current report — wording carried from elsewhere
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.