cdzi20240630

cdzi20240630_10q.htm

united states

Securities and Exchange Commission

Washington, D. C. 20549

FORM 10-Q

(Mark One)

☑

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended June 30, 2024

☐

Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from …… to …….

Commission File Number 0-12114

Cadiz Inc.

(Exact name of registrant specified in its charter)

Delaware	77-0313235
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

550 South Hope Street, Suite 2850
Los Angeles, California	90071
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (213) 271-1600

Securities Registered Pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CDZI	The NASDAQ Global Market
Depositary Shares (each representing a 1/1000^th fractional interest in share of 8.875% Series A Cumulative Perpetual Preferred Stock, par value $0.01 per share)	CDZIP	The NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" , "smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

☐ Large accelerated filer ☐ Accelerated filer ☑ Non-accelerated filer

☑ Smaller Reporting Company ☐ Emerging growth company

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ☑

As of August 9, 2024, the Registrant had 67,896,161 shares of common stock, par value $0.01 per share, outstanding.

*Fiscal Second Quarter 2024 Quarterly Report on Form 10-Q*	*Page*


PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

Cadiz Inc. Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended June 30, 2024 and 2023	1

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the six months ended June 30, 2024 and 2023	2

Unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	3

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023	4

Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the three and six months ended June 30, 2024	5

Unaudited Condensed Consolidated Statement of Stockholders’ Equity for the three and months ended June 30, 2023	6

Unaudited Notes to the Condensed Consolidated Financial Statements	7

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	31

ITEM 4. Controls and Procedures	31

PART II – OTHER INFORMATION

ITEM 1. Legal Proceedings	32

ITEM 1A. Risk Factors	32

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	32

ITEM 3. Defaults Upon Senior Securities	32

ITEM 4. Mine Safety Disclosures	32

ITEM 5. Other Information	32

ITEM 6. Exhibits	33

CADIZ INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	For the Three Months
	Ended June 30,
*($ in thousands, except per share data)*	2024			2023

Total revenues	$	513		$	809

Costs and expenses:
Cost of sales		852			768
General and administrative		6,305			5,320
Depreciation		305			305

Total costs and expenses		7,462			6,393

Operating loss		(6,949	)		(5,584	)

Interest expense, net		(1,921	)		(1,128	)
Loss on derivative liability		-			(350	)

Loss before income taxes		(8,870	)		(7,062	)
Income tax expense		(2	)		(2	)

Net loss and comprehensive loss	$	(8,872	)	$	(7,064	)

Less: Preferred stock dividend		(1,288	)		(1,288	)

Net loss and comprehensive loss applicable to common stock	$	(10,160	)	$	(8,352	)

Basic and diluted net loss per common share	$	(0.15	)	$	(0.13	)

Basic and diluted weighted average shares outstanding		67,771			66,606

See accompanying notes to the unaudited condensed consolidated financial statements.

CADIZ INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)

	For the Six Months
	Ended June 30,
*($ in thousands, except per share data)*	2024			2023

Total revenues	$	1,634		$	939

Costs and expenses:
Cost of sales		1,856			790
General and administrative		11,035			9,251
Depreciation		600			634

Total costs and expenses		13,491			10,675

Operating loss		(11,857	)		(9,736	)

Interest expense, net		(3,860	)		(2,464	)
Loss on derivative liability		-			(220	)
Loss on early extinguishment of debt		-			(5,331	)

Loss before income taxes		(15,717	)		(17,751	)
Income tax expense		(5	)		(4	)

Net loss and comprehensive loss	$	(15,722	)	$	(17,755	)

Less: Preferred stock dividend		(2,553	)		(2,553	)

Net loss and comprehensive loss applicable to common stock	$	(18,275	)	$	(20,308	)

Basic and diluted net loss per common share	$	(0.27	)	$	(0.31	)

Basic and diluted weighted average shares outstanding		67,384			64,633

See accompanying notes to the unaudited condensed consolidated financial statements.

CADIZ INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	June 30,			December 31,
*($ in thousands, except per share data)*	2024			2023

ASSETS
Current assets:
Cash and cash equivalents	$	10,102		$	4,502
Accounts receivable		1,619			904
Inventories		4,497			2,106
Prepaid expenses and other current assets		1,006			508
Total current assets		17,224			8,020

Property, plant, equipment and water programs, net		87,034			87,217
Long-term deposit/prepaid expenses		420			420
Goodwill		5,714			5,714
Right-of-use asset		2,221			431
Long-term restricted cash		134			134
Other assets		5,365			5,438
Total assets	$	118,112		$	107,374

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,901		$	1,245
Accrued liabilities		2,309			1,170
Current portion of long-term debt		155			182
Dividend payable		1,288			1,288
Contingent consideration liabilities		1,450			1,450
Deferred revenue		1,843			373
Operating lease liabilities		171			127
Total current liabilities		9,117			5,835

Long-term debt, net		54,724			37,711
Long-term lease obligations with related party, net		24,055			22,877
Long-term operating lease liabilities		1,976			318
Deferred revenue		625			625
Other long-term liabilities		43			41
Total liabilities		90,540			67,407

Commitments and contingencies (Note 10)
Stockholders’ equity:
Preferred stock - $.01 par value; 100,000 shares authorized at June 30, 2024 and December 31, 2023; shares issued and outstanding – 329 at June 30, 2024 and December 31, 2023		1			1
8.875% Series A cumulative, perpetual preferred stock - $.01 par value; 7,500 shares authorized at June 30, 2024 and December 31, 2023; shares issued and outstanding – 2,300 at June 30, 2024 and December 31, 2023		1			1
Common stock - $.01 par value; 100,000,000 shares authorized at June 30, 2024 and 85,000,000 authorized at December 31, 2023; shares issued and outstanding – 67,800,188 at June 30, 2024 and 66,710,795 at December 31, 2023		676			665
Additional paid-in capital		685,019			679,150
Accumulated deficit		(658,125	)		(639,850	)
Total stockholders’ equity		27,572			39,967
Total liabilities and stockholders’ deficit	$	118,112		$	107,374

See accompanying notes to the unaudited condensed consolidated financial statements.

CADIZ INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Six Months
	Ended June 30,
*($ in thousands)*	2024			2023

Cash flows from operating activities:
Net loss	$	(15,722	)		(17,755	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		600			634
Amortization of debt discount and issuance costs		611			273
Amortization of right-of-use asset		66			59
Interest expense added to loan principal		1,024			435
Interest expense added to lease liability		1,166			1,032
Finance expense		307			-
Unrealized loss on derivative liability		-			220
Loss on early extinguishment of debt		-			5,331
Compensation charge for stock and share option awards		2,380			489
Changes in operating assets and liabilities:
Accounts receivable		(715	)		(426	)
Inventories		(2,391	)		(849	)
Prepaid expenses and other current assets		(498	)		(233	)
Other assets		73			(443	)
Accounts payable		670			816
Lease liabilities		(154	)		(53	)
Deferred revenue		1,470			-
Other accrued liabilities		1,177			599

Net cash used in operating activities		(9,936	)		(9,871	)

Cash flows from investing activities:
Additions to property, plant and equipment and water programs		(467	)		(3,213	)

Net cash used in investing activities		(467	)		(3,213	)

Cash flows from financing activities:
Net proceeds from issuance of stock		-			38,490
Dividend payments		(2,553	)		(2,553	)
Proceeds from the issuance of long-term debt		20,000			-
Principal payments on long-term debt		(98	)		(15,088	)
Issuance costs long-term debt		(1,294	)		(27	)
Costs for early extinguishment of debt		-			(600	)
Taxes paid related to net share settlement of equity awards		(52	)		(261	)

Net cash provided by financing activities		16,003			19,961

Net increase in cash, cash equivalents and restricted cash		5,600

SEC Form 10-Q filed by CADIZ Inc.