CADIZ INC Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Cadiz Inc. performed this year. We’ll break down the important details so you can decide if this company fits your investment goals.

1. What does this company do?

Cadiz manages water infrastructure and land. They own about 46,000 acres in the Mojave Desert, which sits atop a massive underground water supply. Their main project aims to capture and deliver 50,000 acre-feet of water to Southern California each year. They also own a 220-mile pipeline they are converting to carry water. Additionally, their subsidiary, ATEC, sells technology that removes contaminants like arsenic from local water supplies.

2. Financial Performance: Still in "Build Mode"

Cadiz is not yet profitable. They are in a heavy construction phase, spending more on development than they earn in sales.

• The Numbers: As of March 2026, the company had 83.4 million shares outstanding, up from 55.2 million in mid-2025. This increase means more shares were issued, reducing your ownership percentage. For the year, the company lost $48.2 million, mostly due to high interest payments and development costs.
• Funding the Future: To solve their cash flow issues, they created the "Mojave Water Infrastructure Company" (MWI). This new branch aims to attract outside investors and public agencies to fund the $451 million needed for construction. This strategy helps the parent company avoid carrying all the financial risk alone.

3. Major Wins and Challenges

• The Big Move: In October 2025, the Lytton Rancheria of California agreed to provide up to $51 million in loans. The tribe can eventually convert this debt into a share of future water revenue. This money helps pay for the first phase of the pipeline conversion.
• The Hurdle: The company is under significant financial pressure. They must pay off $120 million in debt throughout 2026. If they cannot secure more funding through the MWI partnership or new service contracts, they may have to issue more shares or take on expensive emergency loans.

4. Key Risks

• Dilution: The company frequently sells new shares to fund operations. As the share count grows, your slice of the company shrinks. This makes it harder for the stock price to rise unless water sales grow significantly.
• Debt Maturity: The $120 million debt due in 2026 is a major threat. If they cannot refinance this or find new partners, they could face a crisis that might force them to sell assets or restructure, which could hurt current shareholders.
• Regulatory/Environmental: Cadiz faces intense scrutiny from California regulators. Ongoing legal battles over their water rights and environmental impact remain a concern. A negative court ruling could make their water assets impossible to use.

5. The Bottom Line

Cadiz is a high-risk, high-reward investment. They own valuable land and water, but they haven't proven they can turn these into steady profits. They are currently trying to trade future revenue for the cash needed to finish their projects. You are essentially betting that their new partnership model will succeed before they run out of money.

Investor Checklist:

• Watch the Debt: Keep an eye on whether they successfully refinance or pay off that $120 million due in 2026.
• Track the MWI Progress: Look for announcements regarding new partners or outside investment in the Mojave Water Infrastructure Company.
• Monitor Share Count: Check quarterly filings to see if they are continuing to issue large amounts of new stock to cover operating costs.