CADIZ INC

NOTE1 – BASIS OF PRESENTATION**

The Condensed Consolidated Financial Statements and notes have been prepared by Cadiz Inc., also referred to as “Cadiz” or “the Company”, without audit and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form10-K for the year ended* December 31, 2025.*

The foregoing Condensed Consolidated Financial Statements include the accounts of the Company and contain all adjustments, consisting only of normal recurring adjustments, which management considers necessary for a fair statement of the Company’s financial position, the results of its operations and its cash flows for the periods presented and have been prepared in accordance with generally accepted accounting principles.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates and such differences* maybe material to the financial statements. The results of operations for thesix* months ended* June 30, 2026,arenot* necessarily indicative of results for the entire fiscal year ending* December**31,* 2026.

Liquidity

The Condensed Consolidated Financial Statements of the Company have been prepared using accounting principles applicable to a going concern, which assumes realization of assets and settlement of liabilities in the normal course of business.

The Company incurred losses of $20.0 million for thesix months ended* June 30, 2026,compared to $17.3 million for thesix* months ended* June 30, 2025.The increased loss in2026* was primarily due 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. The Company had working capital of $1.6 million at* June 30, 2026and used cash in its operations of $12.2 million for thesix* months ended* June 30, 2026.*

Cash requirements during thesix months ended* June 30, 2026*primarily reflect certain operating and administrative costs related to the Company’s land, water, infrastructure, and technology assets for water solutions including development of our groundwater storage and supply project (the “Mojave Groundwater Bank”), agricultural operations and water treatment business. The Company’s present activities are focused on the development of its assets in ways that meet an urgent need for groundwater storage capacity in Southern California and growing demand for affordable, reliable, long-term water supplies that provide water security against inevitable drought periods in the Southwestern United States.

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On* March 6, 2024,the Company entered into a Third Amendment to Credit Agreement and First Amendment to Security Agreement (“Third Amended Credit Agreement”) with HHC $ Fund2012* (“Heerema”). 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 from an existing lender 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 (see Note3* – “Long-Term Debt”, below). On* August 12, 2026,the maturity date of each of these loans was extended to June 30, 2028.*

On* March 7, 2025,*the Company completed the sale and issuance of 5,715,000 shares of its common stock to certain institutional investors in a registered direct offering. The shares of common stock were sold at a purchase price of $3.50 per share, for aggregate gross proceeds of approximately $20.0 million and aggregate net proceeds of approximately $18.3 million.

On* October 27, 2025,the Company entered into a definitive agreement (the “Lytton Credit Agreement”) with Lytton Rancheria of California, a federally recognized Native American tribe (“Lytton”), pursuant to which Lytton will provide thefirst* tranche of capital (the “Tribal Investment”) for construction of the Mojave Groundwater Bank. Under the Lytton Credit Agreement, the Company at its election* maydraw, as an unsecured term loan, up to $51 million inone* or more installments prior to* April 30, 2027.Under the Lytton Credit Agreement, the proceeds from the Tribal Investment will be used by the Company to fund the construction, development, ownership, operation, and other ongoing costs of the Mojave Groundwater Bank, and to reimburse the Company’s expenses related thereto. As of June 30, 2026,the Company has drawn $30 million for reimbursement of Mojave Groundwater project expenses and to support development activities. In August 2026,*an additional $10 million was drawn under the Lytton Credit Agreement.

The Company* maymeet its debt and working capital requirements through a variety of means, including extension, refinancing, equity placements, the sale or other disposition of assets, or reductions in operating costs. The covenants in the senior secured debt donot* prohibit the Company’s use of additional equity financing and allow the Company to retain100% of the proceeds of any common equity financing. The Company doesnot expect the loan covenants to materially limit its ability to finance its Mojave Groundwater Bank, agricultural operations and water treatment business activities.

Management assesses whether the Company has sufficient liquidity to fund its costs for the nexttwelve months from each financial statement issuance date. Management evaluates the Company’s liquidity to determine if there is a substantial doubt about the Company’s ability to continue as a going concern. In the preparation of this liquidity assessment, management applies judgement to estimate the projected cash flows of the Company including the following: (i) projected cash outflows (ii) projected cash inflows, (iii) categorization of expenditures as discretionary versus non-discretionary and (iv) the ability to raise capital. The cash flow projections are based on known or planned cash requirements for operating costs as well as planned costs for project development.* *

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Limitations on the Company’s liquidity and ability to raise capital* mayadversely affect it. Sufficient liquidity is critical to meet the Company’s resource development activities. Although the Company currently expects its sources of capital to be sufficient to meet its near-term liquidity needs, there can beno* assurance that its liquidity requirements will continue to be satisfied. If the Company cannot raise needed funds, it might be forced to make substantial reductions in its operating expenses, which could adversely affect its ability to implement its current business plan and ultimately its viability as a company.

Supplemental Cash Flow Information

During thesix months ended* June 30, 2026,approximately $1,656,000 in interest payments on the Company’s debt was paid in cash and approximately $1,461,000 was recorded as interest payable in kind. There areno* scheduled principal payments due on the senior secured debt prior to its maturity.

At* June 30, 2026,accruals for cash dividends payable on the Series A Preferred Stock were $1.27 million (see Note9* – “Common and Preferred Stock”). The cash dividends were paid on* July 15, 2026.*

At* June 30, 2026,accruals for capitalized costs related to the Mojave Groundwater Bank included in property, plant and equipment and water programs were approximately $0.9 million and are expected to be paid in2026.*

During thesix months ended* June 30, 2026,the Company recorded $3.3 million as a non-cash debt discount related to the issuance of 375,000 shares of its common stock in conjunction with thesecond* draw of $15 million under the Lytton Credit Agreement (see Note3 – “Long-Term Debt”). This debt discount will be amortized into interest expense over the remaining term of the loan.

The balance of cash, cash equivalents, and restricted cash as shown in the condensed consolidated statements of cash flows is comprised of the following:

The restricted cash amounts primarily represented funds deposited into a segregated account as cash collateral supporting a letter of credit issued by the Company related to a performance and reclamation bond for the Company’s220-mile30” steel pipeline (the “Northern Pipeline”).

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Recent Accounting Pronouncements

Accounting GuidanceNot* Yet Adopted*

In* November 2024,the FASB issued ASUNo.* 2024-03, Disaggregation of Income Statement Expenses (Subtopic220-40)(“ASU2024-03”). ASU2024-03 which requires disaggregated disclosures of income statement expenses for public business entities. ASU2024-03 is effective for fiscal years beginning after* December 15, 2025,and for interim reporting periods that begin after December 15, 2027.The Company is currently assessing this new guidance and expects this standard willnot* have a material impact on the consolidated financial statements.

NOTE2 – REPORTABLE SEGMENTS

The Company currently operates intwo reportable segments based upon its organizational structure and the way in which its operations are managed and evaluated. The Company’s largest segment is Land and Water Resources, which comprises all activities regarding its properties in the eastern Mojave Desert including pre-revenue development of the Mojave Groundwater Bank (supply, storage and conveyance), and agricultural operations. The Company’ssecond operating segment is its Water Treatment Technology business, consisting of ATEC Water Systems LLC (“ATEC”), which provides innovative water treatment solutions for impaired or contaminated groundwater sources. The Chief Operating Decision-Maker for our Land and Water Resources segment is the Chief Executive Officer of Cadiz Inc. and for the Water Treatment Technology segment is the Chief Executive Officer of ATEC.

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 thethree andsix ended* June 30, 2026and2025:*

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Assets by operating segment are as follows (dollars in thousands):

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Goodwill by operating segment is as follows (dollars in thousands):

Property, plant, equipment and water programs consist of the following (dollars in thousands):

NOTE3 – LONG-TERM DEBT

The carrying value of the Company’s senior secured debt and the Company’s convertible note instrument approximates fair value. The annual effective interest rate on the Company’s debt was 15.4% for thesix months ended* June 30, 2026.*

On* July 2, 2021,the Company entered into a $50 million senior secured credit agreement (“Credit Agreement”). Interest is paid quarterly at a rate ofseven percent per annum. The obligations under the Credit Agreement are secured by substantially all of the Company’s assets on afirst*-priority basis. At any time, the Company is permitted to prepay the principal of the debt, in whole or in part, provided that such prepayment is accompanied by any accrued interest on such principal amount being prepaid.

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On* February 2, 2023,*the Company entered into a First Amendment to Credit Agreement to amend certain provisions of the Credit Agreement (“First Amended Credit Agreement”). In connection with the First Amended Credit Agreement, the Company repaid $15 million of the senior secured debt together with fees and interest required to be paid in connection with such repayment under the Credit Agreement. Under the First Amended Credit Agreement, the lenders have a right to convert up to $15 million of outstanding principal, plus any PIK interest and any accrued and unpaid interest (the “Convertible Loan”) into shares of the Company’s common stock at a conversion price of $4.80 per share (the “Conversion Price”). The annual interest rate remains unchanged at 7.00%. Interest on $20 million of the principal amount is paid in cash. Interest on the $15 million principal amount of the Convertible Loan is paid in kind on a quarterly basis by addition of such amount to the outstanding principal amount of the outstanding Convertible Loan. The amendment was recorded as a debt extinguishment.

On* March 6, 2024,*the Company entered into the Third Amended Credit Agreement. Before entering into the Third Amended Credit Agreement, Heerema purchased the outstanding secured non-convertible term loans under the Credit Agreement (“Assignment”) at a discount on behalf of the Company. The Assignment was considered a debt extinguishment resulting in a gain of $1.9 million recorded as additional paid-in-capital as Heerema is a significant shareholder of the Company. The acquired secured non-convertible term loans were issued to Heerema at a discount which is being amortized over the term of the non-convertible term loan. 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 the Company’s registered common stock (valued at $2.89 per share, or 166,036 shares). The consent fee was capitalized as an additional debt discount and is being amortized over the remaining term of the Convertible Loan.

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.The New Secured Convertible Debt bears PIK interest at a rate of 7% per annum, payable quarterly in arrears. The initial conversion price of the New Secured Convertible Debt is $5.30 per share and will be subject to anti-dilution adjustments. As a result of a registered direct offering that was completed in March 2025,the conversion price of the New Secured Convertible Debt was reduced to $5.04 per share. On August 12, 2026,the maturity date of each of these loans was extended to June 30, 2028.*

In connection with the debts issued to Heerema, the Company issued a warrant to purchase 1,000,000 shares of our common stock (the “Heerema Warrant”) to Heerema. The initial exercise price of the Heerema Warrant is $5.00 per share, which is subject to anti-dilution adjustments. As a result of a registered direct offering that was completed in* March 2025,the exercise price of the Heerema Warrant was reduced to $4.75 per share. Following an amendment completed on August 12, 2026,the Heerema Warrant currently expires on June 30, 2028.*The Company recorded the fair value of the Heerema Warrant on the issuance date in additional paid-in capital in the amount of $0.9 million. In addition, the fair value of the Heerema Warrant was recorded as debt discount and is being amortized over the term of the secured debt issued to Heerema.

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Heerema, who holds the New Secured Convertible Debt, non-convertible term loans and Heerema Warrant, is also a significant shareholder as the holder of 25,695,300 shares of the Company’s common stock or 30.5% of the issued and outstanding shares as of* June 30, 2026.*

In the event of certain asset sales, the incurrence of indebtedness or a casualty or condemnation event, in each case, under certain circumstances as described in the Credit Agreement, the Company will be required to use a portion of the proceeds to prepay amounts under the secured debt. In the event of any additional issuance of depositary receipts (“Depositary Receipts”) representing interests in shares of 8.875% Series A Cumulative Perpetual Preferred Stock (“Series A Preferred Stock”) by the Company, the Company will be required to, withinfive business days after the receipt of the net cash proceeds, apply 75% of the net cash proceeds to prepay amounts due under the debt (including the applicable repayment fee described above).

The Credit Agreement includes customary affirmative and negative covenants, including delivery of financial statements and other reports. The negative covenants limit the ability of the Company to, among other things, incur debt, incur liens, make investments, sell assets, pay dividends and enter into transactions with affiliates. In addition, the Credit Agreement includes customary events of default and remedies. The Company was in compliance with all covenants under the Credit Agreement as of* June 30, 2026.*

On* October 27, 2025 (the “Effective Date”), the Company entered the Lytton Credit Agreement pursuant to which Lytton committed to provide an unsecured term loan facility with a maximum of $51 million in principal to be drawn in installments through April 30, 2027to fund the construction, development, ownership, operation, and other ongoing costs of the Mojave Groundwater Bank, and to reimburse the Company’s expenses related thereto (the “Tribal Investment”). 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 31of each year. Interest maybe paid in cash or, upon mutual agreement between the Company and Lytton, in shares of the Company’s common stock determined in accordance with the Lytton Credit Agreement. The Tribal Investment matures on April 30, 2031 (“Initial Maturity Date”) which maybe extended to April 30, 2036.*

In connection with the Lytton Credit Agreement, the Company agreed to issue shares of its common stock to Lytton as follows:

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The Company has evaluated whether the contracts to issue the Company’s common stock to secure funding should be classified as equity or a derivative liability pursuant to ASC815-40. The Company’s obligation to deliver variable funding fee shares depending on the amount drawn on the facility by the Company was determined to be an equity contract and this obligation is recognized as a derivative liability of $7 million at inception on* October 27, 2025and $2.2 million as of June 30, 2026,subject to reassessment at each reporting period. The value of the commitment shares and the derivative liability at inception were capitalized in other noncurrent assets, $4.7 million as of June 30, 2026.A portion of the asset is recognized as a debt discount when the loan is drawn. The extension fee is an equity contract that isnot* separately recognized as the probability of extending the maturity date was considered by the Company to be remote.

At any time following the funding of the full $51 million Tribal Investment amount under the Lytton Credit Agreement or on the maturity date, 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 the Company’s water-storage rights (the “Storage Cash Flows Right”), which will entitle Lytton to receive up to 51% of the cash flows generated from the Company’s water-storage operations, provided that Lytton contributes the Storage Cash Flows Right to Mojave Water Infrastructure Company, LLC (“MWI”), the Company’s 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 whereby such interest in MWI remains subject to definitive agreements to be mutually agreed upon by the parties including the Company.

On* November 4, 2025,the Company made an initial draw of $15 million for reimbursement of Mojave Groundwater Bank project expenses and to support development activities. Asecond* draw of $15 million was made in* March 2026.Athird* draw of $10 million was made in* August 2026.*

NOTE4 – STOCK-BASED COMPENSATION PLANS

The Company has issued options and has granted stock awards pursuant to its2019 Equity Incentive Plan, as described below.

2019 Equity Incentive Plan

The2019 Equity Incentive Plan (as amended,“2019 EIP”) was originally approved by stockholders at the* July 10, 2019Annual Meeting, with amendments to the plan approved by stockholders at the July 12, 2022Annual Meeting, the June 11, 2024Annual Meeting and the June 12, 2025*Annual Meeting. The plan, as amended, provides for the grant and issuance of up to 7,200,000 shares and options to the Company’s employees, directors and consultants.

Effective* July 1, 2021,under the2019* EIP, each outside director receives $75,000 of cash compensation and receives a deferred stock award consisting of shares of the Company’s common stock with a value equal to $25,000 on* June 30of each year. The award accrues on a quarterly basis, with $18,750 of cash compensation and $6,250 of stock earned for each fiscal quarter in which a director serves. The deferred stock award vests automatically on the January 31thatfirst* follows the award date.

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Stock Awards to Directors, Officers, and Consultants

The Company has granted stock awards pursuant to its2019 EIP.

Of the total 7,200,000 shares reserved under the2019 Equity Incentive Plan, as amended,6,590,598 shares and restricted stock units (“RSUs”) have been awarded to the Company directors, employees and consultants as of* June 30, 2026.Of the 6,590,598 shares and RSUs awarded,45,773 shares were awarded to the Company’s directors on June 30, 2026for services performed during the plan year ended June 30, 2026.These shares will vest and be issued on January 31, 2027.*

In* January 2024,60,000 RSUs were granted to employees which vested on January 2, 2025.*

In* April 2024,the Company granted 1.6 million RSUs and performance stock units (“PSUs”) in conjunction with entering into an amended and restated employment agreement with the Company’s Chief Executive Officer with (a)700,000 RSUs that vest over athree-year period from2024* to2026; (b)600,000 RSUs to vest upon achievement of milestones related to completion of certain permits, entering into binding contract for water delivery or storage, and delivery of water, and (c)300,000 PSUs to vest upon a Price Hurdle of $15 per share for20 consecutive days. In2025, the Company’s Chief Executive Officer and the Company mutually agreed to cancel 300,000 PSUs and 10,000 RSUs so that the underlying shares can be utilized for grants to other key employees and consultants. In* April 2026,*the Company’s Chief Executive Officer and the Company mutually agreed to cancel an additional 150,500 RSUs so that the underlying shares can be utilized for grants to other key employees and consultants.

In* September 2024,the Company granted 275,000 RSUs in conjunction with entering into an employment agreement with the Company’s Chief Operating Officer.137,500 of these RSUs vest over athree-year period from September 2024to September 2027and the remaining 137,500 RSUs will vest upon achievement of milestones related to completion of certain permits, entering into binding contracts for water delivery or storage, and delivery of water. In July 2026,*25,000 of the shares underlying these RSUs vested upon achievement of certain milestones.

In* January 2025,150,000 RSUs were granted to consultants ( “January 2025RSU Grant”). Of the 150,000 RSUs granted under the January 2025RSU Grant,16,250 RSUs vested and were issued immediately,50,000 RSUs vested in February 2025upon achievement of certain milestones and 50,000 RSUs vested in July 2025upon achievement of certain milestones. The remaining 33,750 RSUs granted under the January 2025RSU Grant vested in equal quarterly installments through December 2025.*

In* February 2025,*420,000 RSUs for bonus awards were granted to employees which vested and became issuable immediately. Of these 420,000 RSUs, the Company issued 382,477 shares net of taxes withheld and paid in cash by the Company.

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In* March 2025,145,000 RSUs were granted to consultants ( “March 2025RSU Grant”). Of the 145,000 RSUs granted under the March 2025RSU Grant,85,000 shares were subject to vesting upon achievement of certain milestones and 60,000 shares vest over a period ofone year. In June 2025,55,000 of the shares underlying these RSUs vested upon achievement of certain milestones; in June 2026,15,000 of the shares underlying these RSUs vested upon achievement of certain milestones; and in July 2026,*15,000 of the shares underlying these RSUs vested upon achievement of certain milestones.

In* September 2025,150,000 RSUs and PSUs were granted to a consultant ( “September 2025RSU Grant”). Of the 150,000 units granted under the September 2025RSU Grant,25,000 RSUs vested on September 30, 2025and 50,000 RSUs expired on March 31, 2026.*The remaining 75,000 PSUs vest upon the company’s stock achieving certain price hurdles.

In* October 2025,1,060,600 RSUs were granted to employees ( “October 2025RSU Grant”). Of the 1,060,600 RSUs granted under the October 2025RSU Grant,700,000 RUSs were subject to vesting upon achievement of milestones related to completion of certain permits, entering into binding contracts for water delivery and storage and delivery of water, and 360,600 RSUs vest in quarterly installments through December 31, 2027.In October 2025,50,000 of the shares underlying these RSUs vested upon achievement of certain milestones. In July 2026,*95,000 of the shares underlying these RSUs vested upon achievement of certain milestones.

In* April 2026,*275,500 RSUs for bonus awards were granted to employees and consultants which vested and became issuable immediately. Of these 275,500 RSUs, the Company issued 250,575 shares net of taxes withheld and paid in cash by the Company.

The accompanying consolidated statements of operations and comprehensive loss include approximately $2,308,000 and $3,319,000 of stock-based compensation expense related to stock awards in thesix months ended* June 30, 2026and2025,* respectively.

NOTE5 – INCOME TAXES

As of* June 30, 2026the Company had net operating loss (“NOL”) carryforwards of approximately $393 million for federal income tax purposes and $374 million for California state income tax purposes. Such carryforwards expire in varying amounts through the year2037* and2045 for federal and California purposes, respectively. For federal losses arising in tax years ending after* December 31, 2017,the NOL carryforwards are allowed indefinitely. Use of the carryforward amounts is subject to an annual limitation as a result of a previous ownership change and a tax ownership change that occurred in June 2021.*

The Company’s tax years2022 through 2025 remain subject to examination by the Internal Revenue Service, and tax years2021 through 2025 remain subject to examination by California tax jurisdictions. In addition, the Company’s loss carryforward amounts are generally subject to examination and adjustment for a period ofthree years for federal tax purposes andfour years for California purposes, beginning when such carryovers are utilized to reduce taxes in a future tax year.

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Because it is more likely thannot that the Company willnot realize its net deferred tax assets, it has recorded a full valuation allowance against these assets. Accordingly, no deferred tax asset has been reflected in the accompanying condensed consolidated balance sheet.

NOTE6 – NET LOSS PER COMMON SHARE

Basic net loss per common share is computed by dividing the net loss by the weighted-average common shares outstanding. Options, deferred stock units, convertible debt, convertible preferred shares and warrants werenot considered in the computation of net loss per share because their inclusion would have been antidilutive. Had these instruments been included, the fully diluted weighted average shares outstanding would have increased by approximately 11,440,000 and 10,507,000 for thethree months ended* June 30, 2026and2025,* respectively; and 11,440,000 and 10,476,000 for thesix months ended* June 30, 2026and2025,* respectively.

NOTE7 – LEASES & PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS

Effective* February 1, 2024,the Company entered into a 26-year right-of-way agreement with the United States Bureau of Land Management (“BLM”) with respect to the Company’s Northern Pipeline asset which resulted in recording right-of-use assets and lease liabilities in the amount of $1.9 million resulting from $4.8 million in future lease payments over the 26 years less imputed interest of $2.9 million based upon a 10% weighted average discount rate. Rent under the agreement is set at fair market value as determined by BLM under its published per-acre rent schedule for linear rights-of-way, which is adjusted annually by a defined inflation factor and recalculated by BLM periodically. In accordance with ASC842,* the Company measured its lease payments using the rate in effect at the* February 1, 2024commencement date, approximately $186,000 annually, and doesnot* remeasure the lease liability for subsequent changes in that rate.

Effective* January 1, 2026,BLM issued an updated per-acre rent schedule for calendar years2026* through2035, under which rent billed for the right-of-way increased to $474,000 for calendar year2026. There wasno change in the acreage encumbered or in any other term of the agreement. In accordance with ASC842, the Company recognizes the excess over the commencement-date rate as variable lease cost in the period incurred. Lease cost related to the BLM right-of-way was $237,000 for thesix months ended* June 30, 2026,consisting of operating lease cost of $93,000 and variable lease cost of $144,000, compared with $93,000 for thesix* months ended* June 30, 2025.BLM's rent schedule provides for 2.6% annual increases through2035* and is subject to recalculation thereafter, so future rent* may*differ materially from the payments included in the measurement of the lease liability.

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The Company has operating leases for right-of-way agreements, corporate offices, vehicles and office equipment. The Company’s leases have remaining lease terms of 28 months to 25 years as of* June 30, 2026,some of which include options to extend or terminate the lease. However, the Company isnot* reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options arenot included in the lease term or the right-of-use asset and lease liability balances. The Company’s current lease arrangements expire in2049. The Company doesnot have any finance leases.

As a lessor, in* February 2016,the Company entered into a lease agreement with Fenner Valley Farms LLC (“FVF”) (the “lessee”), pursuant to which FVF is leasing, for a 99-year term,2,100 acres owned by Cadiz in San Bernardino County, California, to be used to plant, grow and harvest agricultural crops (“FVF Lease Agreement”). As consideration for the lease, FVF paid the Company aone*-time payment of $12.0 million upon closing. The Company expects to recognize non-cash rental income of $420,000 annually over the nextfive years related to the FVF Lease Agreement.

Depreciation expense on land improvements, buildings, leasehold improvements, machinery and equipment and furniture and fixtures was $770,000 and $605,000 for thesix months ended* June 30, 2026and2025,* respectively.

NOTE8 – FAIR VALUE MEASUREMENTS

Fair values determined by Level1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. The Company considers a security that trades at least weekly to have an active market. Fair values determined by Level2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

On* October 27, 2025,the Company recorded a derivative liability in the amount of $7 million related to funding fee shares to be issued under the Lytton Credit Agreement (see Note3* – Long-Term Debt, above). $1.9 million of the derivative liability was reclassified to additional paid-in capital for the settlement of funding fee shares upon an initial borrowing of $15 million under the Lytton Credit Agreement in* November 2025and $1.8 million of the derivative liability was reclassified to additional paid-in capital for the settlement of funding fee shares upon asecond* draw of $15 million in* March 2026.The fair value of the derivative liability was estimated using the equity spot price approach, which involves remeasuring the liability at each reporting date based on the Company's closing common stock price. The number of shares expected to be issued is determined in accordance with the funding fee formula specified in the debt agreement (i.e.,25,000 shares per$1* million of principal funded at each funding date). The change in fair value is recorded as an adjustment to the recorded derivative liability with the unrealized gains and losses reflected on the income statement.

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NOTE9 – COMMON AND PREFERRED STOCK

Common Stock

The Company is authorized to issue 125 million shares of Common Stock at a $0.01 par value. As of* June 30, 2026,*the Company had 84,161,245 shares issued and outstanding.

On* March 7, 2025,*the Company completed the sale and issuance of 5,715,000 shares of its common stock to certain institutional investors in a registered direct offering. The shares of common stock were sold at a purchase price of $3.50 per share, for aggregate gross proceeds of approximately $20.0 million and aggregate net proceeds of approximately $18.3 million.

Series1* Preferred Stock*

The Company has issued a total of 10,000 shares of Series1 Preferred Stock (“Series1 Preferred Stock”) to certain holders (“Holders”) under certain conversion and exchange agreements entered into in* March 2020.Each share of Series1* Preferred Stock is convertible at any time at the option of the Holder into 405.05 shares of Common Stock. As of* March 31, 2023,Holders of Series1* Preferred Stock exercised their option to convert 9,671 shares of Series1 Preferred Stock into 3,917,235 shares of Common Stock. The Company has 329 shares of Series1 Preferred Stock issued and outstanding as of* June 30, 2026.*

Series A Preferred Stock

On* June 29, 2021,the Company entered into an Underwriting Agreement with B. Riley Securities, Inc., as representative of the several underwriters named there, to issue and sell an aggregate of 2,000,000 depositary shares (the “Depositary Shares”), as well as up to 300,000 Depositary Shares sold pursuant to the exercise of an option to purchase additional Depositary Shares (“Depositary Share Offering”), each representing 1/1000 th of a share of the 8.875% Series A Cumulative Perpetual Preferred Stock (the “Series A Preferred Stock”). The Depositary Share Offering was completed on July 2, 2021*for net proceeds of approximately $54 million.

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On* July 1, 2021,*the Company filed the Certificate of Designation (“Certificate of Designation”) for the Series A Preferred Stock with the Secretary of State of the State of Delaware, which became effective upon acceptance for record. The Certificate of Designation classified a total of 7,500 shares of the Company’s authorized shares of preferred stock, $0.01 par value per share, as Series A Preferred Stock.

As set forth in the Certificate of Designation, the Series A Preferred Stock will rank, as to dividend rights and rights upon the Company’s liquidation, dissolution or winding up: (i) senior to Common Stock of the Company; (ii) junior to the Series1 Preferred Stock with respect to the distribution of assets upon the Company’s voluntary or involuntary liquidation, dissolution or winding up; (iii) senior to the Series1 Preferred Stock with respect to the payment of dividends and (iv) effectively junior to all the Company’s existing and future indebtedness (including indebtedness convertible into Common Stock or preferred stock) and to the indebtedness and other liabilities of (as well as any preferred equity interests held by others in) the Company’s existing or future subsidiaries.

Holders of Series A Preferred Stock, when and as authorized by the Company’s Board of Directors, are entitled to cumulative cash dividends at the rate of 8.875% of the $25,000.00 ($25.00 per Depositary Share) liquidation preference per year (equivalent to $2,218.75 per share per year or $2.21875 per Depositary Share per year). Dividends are payable quarterly in arrears, on or about the15th of* January,** April,** Julyand October,beginning on or about October**15,* 2021. As of* June 30, 2026,the Company has paid aggregate cash dividends of $24,426,000. On June 19, 2026,the Company’s Board of Directors declared that holders of Series A Preferred stock will receive a cash dividend equal to $550.00 per whole share; therefore, holders of Depositary Shares will receive a cash dividend equal to $0.55 per Depositary Share. The dividend totaling $1,265,000 was paid on July 15, 2026to respective holders of record as of the close of business on July 2, 2026.*

Dividends on the Series A Preferred Stock underlying the depositary shares will continue to accumulate whether ornot (i) any of our agreements prohibit the current payment of dividends, (ii) we have earnings or funds legally available to pay the dividends, or (iii) our Board of Directors doesnot declare the payment of the dividends.

Holders of depositary shares representing interests in the Series A Preferred Stock generally will haveno voting rights. However, if we donot pay dividends on any outstanding shares of Series A Preferred Stock forsix or more quarterly dividend periods (whether ornot declared or consecutive), holders of the Series A Preferred Stock (voting separately as a class with all other outstanding series of preferred stock upon which like voting rights have been conferred and are exercisable) will be entitled to electtwo additional directors to the Board of Directors to serve until all unpaid dividends have been fully paid or declared and set apart for payment.

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On and after* July 2, 2026,*the shares of Series A Preferred Stock will be redeemable at the Company’s option, in whole or in part, at a redemption price equal to $25,000.00 per share ($25.00 per Depositary Share), plus any accrued and unpaid dividends. Furthermore, upon a change of control or delisting event (each as defined in the Certificate of Designation), the Company will have a special option to redeem the Series A Preferred Stock at $25,000.00 per share ($25.00 per Depositary Share), plus any accrued and unpaid dividends.

Shares of Series A Preferred Stock are convertible into shares of Common Stock if, and only if, a change of control or delisting event (each as defined in the Certificate of Designation) has occurred, and the Company hasnot elected to redeem the Series A Preferred Stock prior to the applicable conversion date. Upon any conversion, each share of Series A Preferred Stock will be converted into that number of shares of Common Stock equal to the lesser of (i) the quotient obtained by dividing (A) the sum of (x) the $25,000 liquidation preference per share plus (y) the amount of an accrued and unpaid dividends to, butnot including, the conversion date by (B) the Common Stock Purchase Price (as defined in the Certificate of Designation), and (ii)3,748.13 (the “Share Cap”), subject to certain adjustments.

The Company has 2,300 shares of Series A Preferred Stock issued and outstanding as of* June 30, 2026.*

NOTE10 – COMMITMENTS AND CONTINGENCIES

In the normal course of its agricultural operations, the Company handles, stores, transports and dispenses products identified as hazardous materials. Regulatory agencies periodically conduct inspections and, currently, there areno pending claims with respect to hazardous materials.

Pursuant to cost-sharing agreements that have been entered into by participants in the Mojave Groundwater Bank, $625,000 in funds have been received in order to offset costs incurred in the environmental analysis of the Mojave Groundwater Bank. These funds* mayeither be reimbursed or credited to participants’ participation in the Mojave Groundwater Bank and, accordingly, are fully reflected as deferred revenue as of June 30, 2026and June 30, 2025.*

In conjunction with the 26-year right-of-way agreement with the BLM with respect to the Company’s Northern Pipeline asset, the Company deposited approximately*$420,000* towards a performance and reclamation bond with the BLM which has been recorded in Other Long-Term Deposits/Prepaid Expenses.

The Company is from time to time involved in various lawsuits and legal proceedings that arise in the ordinary course of business. At this time, the Company isnot aware of any other pending or threatened litigation that it expects will have a material adverse effect on its business, financial condition, liquidity, or operating results. Legal claims are inherently uncertain, however, and it is possible that the Company’s business, financial condition, liquidity and/or operating results could be adversely affected in the future by legal proceedings.

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NOTE11 – SUBSEQUENT EVENTS

In* July 2026,the Company announced a chief financial officer succession plan pursuant to which Stanley E. Speer will retire as the Company’s Chief Financial Officer effective as of September 1, 2026.*Jacinto J. Hernandez was appointed as the Company’s Executive Vice President of Finance and will become the Company’s Chief Financial Officer upon Mr. Speer’s retirement.

In conjunction with the succession plan, Mr. Hernandez was grantedone-time inducement awards outside of the Company’s2019 Equity Incentive Plan (the “Plan”) consisting of (i)800,000 restricted stock units (“RSUs”), of which 200,000 RSUs will be vested upon grant, and the remaining 600,000 RSUs intwelve approximately equal quarterly installments over three years, and (ii)800,000 performance stock units (“PSUs”) which will vest upon achievement of specified stock price hurdles.

In connection with his retirement, Mr. Speer entered into a Separation Agreement which provides for, among other things, accelerated vesting of unvested service-based RSUs representing 68,700 shares, a new grant of fully vested RSUs under the Plan representing 100,000 shares in lieu of Mr. Speer’s forfeited2026 bonus opportunity, and continued eligibility for vesting of milestone-based RSUs representing 85,000 shares tied to the closing of the LLC project financing for the Northern Pipeline. Additionally, Mr. Speer will forfeit unvested milestone-based RSUs representing 150,000 shares.

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