Cadiz Inc.

What they do

Cadiz operates in two segments: Land and Water Resources, which includes agricultural operations and the development of the Mojave Groundwater Bank (supply, storage, and conveyance), and Water Filtration Technology, which provides filtration solutions for impaired groundwater via its ATEC subsidiary. The company's agricultural operations and ATEC are the current principal sources of revenue, but working capital needs are not fully supported by these operations. The core growth project is the Mojave Groundwater Bank, which involves building the Northern and Southern Pipelines at an estimated total cost of $1.5 billion.

Revenue drivers

• Agricultural operations — Revenue from farming on company land in the Mojave Desert; part of the Land and Water Resources segment.
• ATEC (Water Filtration Technology) — Provides innovative water filtration technology solutions for impaired or contaminated groundwater sources; the other reportable segment.
• Water supply agreements — Agreements with public water systems and private utilities for sale of 21,275 AFY of annual water supply, starting at ~$850/AFY with 40-year terms, but no revenue recognized yet as the pipeline isn't operational.

Recent performance

In Q2 2026, total revenues were $979 thousand and operating loss was $8.8 million, down from revenues of $4.1 million and an operating loss of $5.8 million in Q2 2025. Net loss for Q2 2026 was $11.4 million, including $1.3 million in preferred dividends. As of June 30, 2026, the company had cash of $5.3 million, total assets of $134.8 million, total liabilities of $130.1 million, and shareholder equity of only $4.7 million. For the full year 2025, revenue reached $16.3 million while net loss was $34.2 million.

Strategy

The company is developing the Mojave Groundwater Bank to generate long-term cash flows from water supply, storage, and conveyance. It established a special purpose entity, Mojave Water Infrastructure Company LLC (MWI), to finance construction costs through equity partnerships with public sector, tribal, and private investors. The first tranche is the Lytton Credit Agreement for up to $51 million, with a target of $400 million in additional private equity commitments. If completed, Cadiz expects to contribute its pipeline assets and receive an upfront capital reimbursement and an equity interest in MWI, sharing in future cash flows.

Risks

• Funding and liquidity risk — The company has minimal cash and relies on external financing to fund operations and development; continued losses and negative operating cash flow increase going-concern risk.
• Large capital expenditure requirement — The Mojave Groundwater Bank is estimated to cost ~$1.5 billion, far exceeding current resources, and completion depends on closing significant equity commitments from investors.
• Construction and regulatory risks — The pipeline and groundwater bank project faces typical construction delays, permitting complexities, and regulatory approvals, which could delay revenue generation.
• Debt burden — As of June 30, 2026, long-term debt was $87.0 million against only $4.7 million in shareholder equity, heightening financial leverage and interest expense sensitivity.

Outlook

Management expects to close additional equity commitments for MWI, targeting $400 million in private equity, which would trigger the transfer of pipeline assets and further project funding. The first tranche via the Lytton Credit Agreement (up to $51 million) is in place. The company anticipates that the water supply, storage, and conveyance business will provide significant future cash flow, but current operations do not fully support working capital needs.