Cadiz Inc. (CDZI) Q2 2026 Filing Summary
Business Context and Reporting Period
This summary covers the Unaudited Condensed Consolidated Financial Statements for Cadiz Inc. for the quarterly and six-month periods ended June 30, 2026. Cadiz is a water solutions provider focused on the development of the Mojave Groundwater Bank, agricultural operations, and water treatment technology (ATEC). The company operates as a non-accelerated filer and smaller reporting company.
Key Financial Metrics
| Metric ($ in thousands) | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Revenues | $979 | $4,126 | $2,611 | $7,080 |
| Operating Loss | $(8,835) | $(5,777) | $(15,670) | $(13,310) |
| Net Loss | $(11,374) | $(7,730) | $(20,010) | $(17,323) |
| Net Loss per Share (Diluted) | $(0.15) | $(0.11) | $(0.27) | $(0.25) |
| Cash and Equivalents | $5,319 (as of June 30, 2026) | |||
| Working Capital | $1,585 (as of June 30, 2026) | |||
| Long-Term Debt, Net | $86,978 (as of June 30, 2026) | |||
| Stockholders' Equity | $4,665 (as of June 30, 2026) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenues dropped 76% in Q2 2026 compared to Q2 2025. This was primarily driven by a significant decrease in ATEC filter sales, specifically the absence of a "mega project" for the Central Utah Water Conservancy District that occurred in the prior year.
- Margin Compression: ATEC gross margin fell from 44.5% in Q2 2025 to 23.7% in Q2 2026 due to fixed manufacturing costs being spread over a reduced volume of sales.
- Increased Expenses: General and administrative expenses rose due to increased legal and consulting fees associated with advancing the Mojave Groundwater Bank development. Stock-based compensation expense also increased significantly in Q2 2026 ($1.8M) compared to Q2 2025 ($0.5M).
- Interest Expense: Net interest expense increased to $2.9M in Q2 2026 from $2.0M in Q2 2025, largely due to new borrowings under the Lytton Credit Agreement.
- Cash Flow: Net cash used in operating activities increased to $12.2M for the six months ended June 30, 2026, compared to $5.0M in the prior year period.
Outlook, Management Commentary, and Risks
- Liquidity Position: Management states that proceeds from the Lytton Credit Agreement (including a $15M draw in March 2026 and a subsequent $10M draw in August 2026) combined with cash on hand are sufficient to meet short-term working capital needs. However, the company continues to rely on debt and equity financing to bridge the gap until water revenue commences.
- Project Development: The company is actively pursuing the Mojave Groundwater Bank. In July 2026, principal construction contracts for the Northern Pipeline conversion were executed with an estimated capital cost of $400M. Total project costs (Northern and Southern Pipelines) are estimated at $1.25B - $1.5B.
- Financing Activities:
- Lytton Credit Agreement: An unsecured term loan facility of up to $51M. As of June 30, 2026, $30M had been drawn. An additional $10M was drawn in August 2026.
- Debt Extension: On August 12, 2026, the maturity date of the senior secured credit agreement and related convertible loans was extended from June 30, 2027, to June 30, 2028.
- Equity: The company is engaged in due diligence for up to $400M in equity commitments for the special purpose entity (MWI) and received an invitation to apply for up to $194M in federal WIFIA funding.
- Risks and Contingencies:
- Legal Proceedings: Two lawsuits were filed in July 2026 by environmental groups challenging the BLM's right-of-way grant for the Northern Pipeline. The company is not a named party but monitors the situation closely.
- Capital Requirements: There is no assurance that additional capital will be available on acceptable terms. Failure to raise funds could force substantial reductions in operating expenses.
- Executive Transition: CFO Stanley E. Speer is retiring effective September 1, 2026, with Jacinto J. Hernandez appointed as his successor.
Investor Verification Checklist
- Verify the status of the two lawsuits filed in July 2026 challenging the BLM right-of-way grant for the Northern Pipeline.
- Confirm the timeline and certainty of the $400M equity commitment for the Mojave Water Infrastructure Company (MWI).
- Monitor the progress of the WIFIA application for up to $194M in federal funding.
- Review the impact of the reduced ATEC filter sales on future revenue projections and gross margins.
- Assess the company's ability to service its debt obligations, particularly the PIK interest components, given the current cash burn rate.
- Track the execution of the remaining $21M available under the Lytton Credit Agreement.