1 unchanged sentence
Disclosure Controls and Procedures
−Removed:              
−Removed: We have established disclosure controls and procedures to ensure that material information related to the Company, including its consolidated entities, is accumulated and communicated to senior management, including Chief Executive Officer (the “Principal Executive Officer”) and Chief Financial Officer (the “Principal Financial Officer”) and to our Board of Directors.
+Added: We have established disclosure controls and procedures to ensure that material information related to the Company, including its consolidated entities, is accumulated and communicated to senior management, including Chief Executive Officer (the “Principal Executive Officer”) and Chief Financial Officer (the “Principal Financial Officer”) and to our Board of Directors.
Based on their evaluation as of December 31, 2023, our Principal Executive Officer and Principal Financial Officer have concluded that the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective to ensure that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and such information is accumulated and communicated to management, including the principal executive and principal financial officers as appropriate, to allow timely decisions regarding required disclosures.
−Removed: Management ’
−Removed: s Report on Internal Control Over Financial Reporting
+Added: Management ’ s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f).
1 unchanged sentence
Based on our evaluation under that framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2023.
−Removed: Management’s assessment of and conclusions on the effectiveness of our internal control over financial reporting did not include the internal controls of ATEC Water Systems, LLC, which included assets acquired from ATEC Systems, Inc. in November 2022, which is included in our 2022 consolidated financial statements and constituted 1.3% of total assets as of December 31, 2022 and 0.0% of net sales for the year then ended. 
−Removed: This exclusion is in accordance with the guidance issued by the U.S.
−Removed: Securities and Exchange Commission that allows companies to exclude acquisitions from management’s report on internal control over financial reporting for the first year after acquisition.
Changes in Internal Control Over Financial Reporting
−Removed: In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, excluding the acquisition of the assets of ATEC Systems, Inc.
−Removed: into ATEC Water Systems, LLC, there was no change identified in the Company's internal control over financial reporting that occurred during the last fiscal quarter ended December 31, 2022, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
+Added: In connection with the evaluation required by paragraph (d) of Rule 13a-15 under the Exchange Act, there was no change identified in the Company's internal control over financial reporting that occurred during the last fiscal quarter ended December 31, 2023, that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.
−Removed: Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
+Added: Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in
+Added: conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Other Information
12 unchanged sentences
Exhibits, Financial Statement Schedules
−Removed: 1.         Financial Statements.
+Added: Financial Statements.
See Index to Consolidated Financial Statements.
−Removed: 2.         Financial Statement Schedule.
+Added: Financial Statement Schedule.
See Index to Consolidated Financial Statements.
−Removed: 3.         Exhibits.
The following exhibits are filed or incorporated by reference as part of this Form 10-K.
11 unchanged sentences
dated as of July 2, 2021
+Added: Common Stock Purchase Warrant dated as of March 6, 2024
Limited Liability Company Agreement of Cadiz Real Estate LLC dated December 11, 2003
4 unchanged sentences
Longitudinal Lease Agreement dated September 17, 2008 between Arizona & California Railroad Company and Cadiz Real Estate, LLC
−Removed: †**10.5
2019 Equity Incentive Plan, as amended
Form of Option Agreement with Santa Margarita Water District
−Removed: Form of Environmental Processing and Cost Sharing Agreement with Santa Margarita Water District
−Removed: Form of Environmental Processing and Cost Sharing Agreement with Three Valleys Municipal Water District
Option Agreement with Golden State Water Company dated June 25, 2010
+Added: Key Terms for First Amendment to Option and Golden State Water Company’s Conditional Exercise of its Option dated March 13, 2024
Option Agreement with Suburban Water Systems dated October 4, 2010
−Removed: †**10.11
−Removed: Letter agreement with Scott S.
−Removed: Slater dated April 12, 2011
−Removed: †**10.12
−Removed: Letter agreement with Scott S.
−Removed: Slater dated January 10, 2013
Option Agreement with California Water Service Company dated December 1, 2011
Form of Memorandum of Understanding by and among Cadiz Inc., County of San Bernardino and Santa Margarita Water District
+Added: First Amendment to the Memorandum of Understanding, dated November 2, 2023, by and among the Santa Margarita Water District, Cadiz Inc., Fenner Gap Mutual Water Company and San Bernardino County
Water Purchase and Sale Agreement among Cadiz Inc., Cadiz Real Estate LLC, Fenner Valley Mutual Water Company and Santa Margarita Water District dated July 31, 2012
Groundwater Management, Monitoring, and Mitigation Plan for the Cadiz Valley Groundwater Conservation, Recovery and Storage Project approved by the Santa Margarita Water District and the County of San Bernardino Board of Supervisors effective October 1, 2012
−Removed: †**10.17
−Removed: Revised Terms of Engagement with Brownstein Hyatt Farber and Schreck dated January 9, 2013
+Added: Summary of Key Terms Between Antelope Valley – East Kern Water Agency and Fenner Gap Mutual Water Company dated May 24, 2023
+Added: Agreement for the Delivery of Water Made Available by Cadiz Inc.
+Added: and Fenner Gap Mutual Water Company to Public Water Systems, dated February 28, 2024, among Cadiz Inc., Cadiz Real Estate LLC, Fenner Gap Mutual Water Company and Fontana Water Company
+Added: Term Sheet for the Delivery of Water Made Available by Cadiz Inc.
+Added: and Fenner Gap Mutual Water Company to Santa Margarita Water District in the Northern Pipeline, dated February 28, 2024, among Cadiz Inc., Fenner Gap Mutual Water Company and Santa Margarita Water District
Track Utilization Agreement dated September 16, 2013, between Arizona & California Railroad Company and Cadiz Real Estate LLC
−Removed: †**10.19
Amended and Restated Employment Agreement between Timothy J.
1 unchanged sentence
dated June 13, 2014
−Removed: †**10.20
Amendment No.
2 unchanged sentences
dated March 10, 2020
−Removed: †**10.21
Amendment No.
2 unchanged sentences
dated as of May 21, 2020
−Removed: †**10.22
Employment Agreement between Cadiz Inc.
13 unchanged sentences
and the other parties thereto
−Removed: Placement Agent Agreement, dated as of June 2, 2021, by and between Cadiz Inc.
−Removed: Riley Securities, Inc.
Underwriting Agreement, dated as of June 29, 2021, by and among the Company and B.
3 unchanged sentences
Riley Securities, Inc., as administrative agent
+Added: Security Agreement, dated as of July 2, 2021, made by Cadiz Inc., Cadiz Real Estate LLC, in favor of B.
+Added: Riley Securities, Inc.
First Amendment to Credit Agreement, dated as of February 2, 2023, by and among Cadiz Inc.
2 unchanged sentences
as administrative agent
−Removed: Security Agreement, dated as of July 2, 2021, made by Cadiz Inc., Cadiz Real Estate LLC, in favor of B.
+Added: Second Amendment to Credit Agreement, dated as of August 14, 2023, by and among Cadiz Inc.
+Added: and Cadiz Real Estate LLC as borrowers, the lenders from time to time party thereto, and B.
Riley Securities, Inc.
+Added: as administrative agent
+Added: Third Amendment to Credit Agreement and First Amendment to Security Agreement, dated as of March 6, 2024, by and among Cadiz Inc., Cadiz Real Estate LLC, ATEC Water Systems, LLC and Octagon Partners LLC as borrowers, and the lenders party thereto
Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of July 2, 2021
−Removed: First Amendment to Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of February 2, 2023
−Removed: †**10.37
+Added: First Amendment to Deed of Trust, Assignment of Leases and Rents, Securities Agreement, Financing Statement and Fixture Filing, dated as of February 2, 2023
Employment Agreement between Cadiz Inc.
Kennedy dated as of February 4, 2022
−Removed: Form of Securities Purchase Agreement, dated as of March 20, 2022
Form of Board Observer and Nomination Right Agreement
−Removed: Form of Securities Purchase Agreement, dated as of November 9, 2022
+Added: Amendment No.
+Added: 1 to Board Observer and Nomination Right Agreement, dated as of March 6, 2024, by and between Cadiz Inc.
+Added: and Heerema International Group Services S.A.
Form of Registration Rights Agreement
Form of Amendment No.
−Removed: 1 to Registration Rights Agreement
+Added: 1 to Registration Rights Agreement
Form of Amendment No.
2 to Registration Rights Agreement
+Added: Amendment No.
+Added: 3 to Registration Rights Agreement, dated as of March 6, 2024, by and between Cadiz Inc.
+Added: and Heerema International Group Services S.A.
Asset Purchase Agreement, dated as of October 21, 2022, between ATEC Systems, Inc., David Ketchum and Donna Ketchum and Cadiz Inc.
Amended and Restated Limited Liability Company Agreement of ATEC Water Systems, LLC dated as of November 6, 2022
−Removed: Placement Agent Agreement, dated as of January 30, 2023, by and among Cadiz Inc., B.
−Removed: Riley Securities, Inc.
−Removed: and Northland Securities Inc.
Subsidiaries of the Registrant
12 unchanged sentences
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
−Removed: * 101.INS
+Added: Cadiz Clawback and Forfeiture Policy
Inline XBRL Instance Document
−Removed: * 101.SCH
Inline XBRL Taxonomy Extension Schema
−Removed: * 101.CAL
Inline XBRL Taxonomy Extension Calculation
−Removed: * 101.DEF
Inline XBRL Extension Definition
−Removed: * 101.LAB
Inline XBRL Taxonomy Extension Label
−Removed: * 101.PRE
Inline XBRL Taxonomy Extension Presentation
6 unchanged sentences
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereto duly authorized.
−Removed:  /s/ Scott S.
−Removed: Slater          
Chief Executive Officer
2 unchanged sentences
Name and Position
−Removed:  /s/ Susan Kennedy
March 28, 2024
−Removed: Susan Kennedy, Chair
−Removed:  /s/ Scott S.
−Removed: March 30, 2023
−Removed: Slater, Chief Executive Officer, President and Director
+Added: Susan Kennedy, Chair and Chief Executive Officer
(Principal Executive Officer)
−Removed:  /s/ Stanley E.
+Added: /s/ Stanley E.
March 28, 2024
Speer, Chief Financial Officer
−Removed:  (Principal Financial and Accounting Officer)
−Removed: /s/ Keith Brackpool
−Removed: March 30, 2023
−Removed: Keith Brackpool, Director
+Added: (Principal Financial and Accounting Officer)
/s/ Stephen E.
1 unchanged sentence
Courter, Director
−Removed:  /s/ Maria Echaveste
+Added: /s/ Maria Dreyfus
March 28, 2024
−Removed: Maria Echaveste, Director
−Removed:  /s/ Geoffrey T.
+Added: Maria Dreyfus, Director
+Added: /s/ Maria Echaveste
March 28, 2024
−Removed: Grant, Director
−Removed:  /s/ Winston H.
+Added: Maria Echaveste, Director
+Added: /s/ Winston H.
March 28, 2024
Hickox, Director
−Removed:  /s/ Kenneth Lombard
+Added: /s/ Barbara Lloyd
March 28, 2024
+Added: Barbara Lloyd, Director
+Added: /s/ Kenneth Lombard
+Added: March 28, 2024
Kenneth Lombard, Director
−Removed:  /s/ Richard Polanco
+Added: /s/ Richard Polanco
March 28, 2024
8 unchanged sentences
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022
−Removed: Consolidated Statements of Stockholders’ Equity (Deficit) for the years ended December 31, 2022 and 2021
+Added: Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2023 and 2022
Notes to the Consolidated Financial Statements
3 unchanged sentences
We have audited the accompanying consolidated balance sheets of Cadiz Inc.
−Removed: and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, of stockholders’
−Removed: equity (deficit) and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).
+Added: and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for the years then ended, including the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
−Removed: These consolidated financial statements are the responsibility of the Company’s management.
−Removed: Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
+Added: These consolidated financial statements are the responsibility of the Company’s management.
+Added: Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.
We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
13 unchanged sentences
Liquidity Assessment
−Removed: As described in Note 2 to the consolidated financial statements, management has prepared the Company’s consolidated financial statements on a going concern basis, contemplating the continuity of operations, the realization of assets and the satisfaction of liabilities in the normal course of business.
+Added: As described in Note 2 to the consolidated financial statements, management has prepared the Company’s consolidated financial statements on a going concern basis, which contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities in the normal course of business.
The Company incurred losses of $31.4 million for the year ended December 31, 2023.
1 unchanged sentence
Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from the financial statement issuance date.
−Removed: Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern.
+Added: Management evaluates the Company’s liquidity to determine if there is substantial doubt about the Company’s ability to continue as a going concern.
In the preparation of this liquidity assessment, management applies judgment to estimate the significant assumptions related to the projected cash flows of the Company, including the following:
−Removed: (i) projected cash outflows;
−Removed: (ii) projected cash inflows;
−Removed: (iii) categorization of expenditures as discretionary versus non-discretionary;
−Removed: and (iv) ability to raise capital.
+Added: (i) projected cash outflows, (ii) projected cash inflows, (iii) categorization of expenditures as discretionary versus non-discretionary and (iv) 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.
−Removed: The principal considerations for our determination that performing procedures relating to the liquidity assessment is a critical audit matter are the significant judgment by management when assessing whether the Company has sufficient liquidity and a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s liquidity assessment and the significant assumptions related to (i) projected cash outflows;
−Removed: (ii) projected cash inflows;
−Removed: (iii) categorization of expenditures as discretionary versus non-discretionary;
−Removed: and (iv) ability to raise capital.
+Added: The principal considerations for our determination that performing procedures relating to the liquidity assessment is a critical audit matter are the significant judgment by management when assessing whether the Company has sufficient liquidity and a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to management’s liquidity assessment and the significant assumptions related to projected cash outflows, projected cash inflows, categorization of expenditures as discretionary versus non-discretionary, and ability to raise capital.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.
−Removed: These procedures included, among others (i) testing management’s process for assessing whether the Company has sufficient liquidity;
+Added: These procedures included, among others (i) testing management’s process for assessing whether the Company has sufficient liquidity;
(ii) evaluating the appropriateness of the projected cash flow model;
−Removed: (iii) testing the completeness and accuracy of the underlying data used in the model;
−Removed: and (iv) evaluating the reasonableness of management’s significant assumptions related to projected cash outflows, projected cash inflows, categorization of expenditures as discretionary versus non-discretionary, and ability to raise capital.
−Removed: Evaluating management’s assumptions related to projected cash outflows, projected cash inflows, categorization of expenditures as discretionary versus non-discretionary, and ability to raise capital involved evaluating whether the assumptions used were reasonable considering (i) current and past performance of the Company;
−Removed: (ii) management’s historical forecasting accuracy;
+Added: (iii) testing the completeness and accuracy of the underlying data used in the projected cash flow model;
+Added: and (iv) evaluating the reasonableness of management’s significant assumptions related to projected cash outflows, projected cash inflows, categorization of expenditures as discretionary versus non-discretionary, and ability to raise capital.
+Added: Evaluating management’s assumptions related to projected cash outflows, projected cash inflows, categorization of expenditures as discretionary versus non-discretionary, and ability to raise capital involved evaluating whether the assumptions used were reasonable considering (i) current and past performance of the Company;
+Added: (ii) management’s historical forecasting accuracy;
and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.
−Removed: /s/ PricewaterhouseCoopers LLP  
+Added: /s/ PricewaterhouseCoopers LLP
Los Angeles, California
March 28, 2024
−Removed: We have served as the Company’s auditor since at least 1995.
+Added: We have served as the Company’s auditor since at least 1995.
We have not been able to determine the specific year we began serving as auditor of the Company.
2 unchanged sentences
Total revenues
+Added: $ 1,991 $ 1,501
Costs and expenses:
1 unchanged sentence
General and administrative
+Added: 18,797 15,342
Total costs and expenses
+Added: 22,931 18,063
Operating loss
+Added: ( 20,940 ) (16,562 )
Interest expense, net
−Removed: Loss on extinguishment of debt
+Added: ( 4,944 ) (8,263 )
+Added: Loss on derivative liability
+Added: Loss on early extinguishment of debt
Loss before income taxes
+Added: ( 31,435 ) (24,825 )
Income tax expense
1 unchanged sentence
Net loss and comprehensive loss
+Added: $ ( 31,446 ) $ (24,792 )
Preferred stock dividend requirements
+Added: $ 5,106 5,106
Net loss and comprehensive loss applicable to common stock
+Added: $ ( 36,552 ) $ (29,898 )
Basic and diluted net loss per common share
+Added: $ ( 0.56 ) $ (0.60 )
Basic and diluted weighted-average shares outstanding
+Added: 65,656 49,871
See accompanying notes to the consolidated financial statements.
3 unchanged sentences
Cash and cash equivalents
−Removed: $ 9,997  
−Removed: $ 10,965  
+Added: $ 4,502 $ 9,997
Restricted Cash
2 unchanged sentences
Total current assets
−Removed: 12,435  
−Removed: 13,214  
Property, plant, equipment and water programs, net
−Removed: 84,138  
−Removed: 78,890  
+Added: 87,217 84,138
Long-term deposit/prepaid expenses
−Removed: Equity-method investments
Right-of-use asset
Long-term restricted cash
−Removed: $ 110,787  
−Removed: $ 112,493  
+Added: $ 107,374 $ 110,787
LIABILITIES AND STOCKHOLDERS' EQUITY
1 unchanged sentence
Accounts payable
−Removed: $ 1,107  
+Added: $ 1,245 $ 1,107
Accrued liabilities
2 unchanged sentences
Contingent consideration liabilities
+Added: Short-term deferred revenue
Operating lease liabilities
1 unchanged sentence
Long-term debt, net
−Removed: 48,950  
−Removed: 46,477  
+Added: 37,711 48,950
Long-term lease obligations with related party, net
−Removed: 20,745  
−Removed: 18,855  
+Added: 22,877 20,745
Long-term operating lease liabilities
2 unchanged sentences
Total liabilities
−Removed: 76,564  
−Removed: 71,884  
−Removed: Stockholders' equity (deficit):
+Added: 67,407 76,564
+Added: Stockholders' equity:
Preferred stock - $ .01 par value, 100,000 shares authorized at December 31, 2023, and December 31, 2022;
−Removed: shares issued and outstanding –
−Removed: 329 at December 31, 2022 and December 31, 2021
+Added: shares issued and outstanding – 329 at December 31, 2023, and December 31, 2022
8.875 % Series A cumulative, perpetual preferred stock - $ .01 par value;
7,500 shares authorized at December 31, 2023, and December 31, 2022;
−Removed: shares issued and outstanding –
−Removed: 2,300 at December 31, 2022 and 2,300 at December 31, 2021
+Added: shares issued and outstanding – 2,300 at December 31, 2023, and 2,300 at December 31, 2022
Common stock - $ 0.01 par value;
−Removed: 70,000,000 shares Authorized at December 31, 2022 and December 31, 2021;
+Added: 85,000,000 shares authorized at December 31, 2023, and 70,000,000 authorized at December 31, 2022;
shares issued and outstanding:
1 unchanged sentence
Additional paid-in capital
−Removed: 636,963  
−Removed: 613,572  
+Added: 679,150 636,963
Accumulated deficit
+Added: ( 639,850 ) ( 603,298 )
Total stockholders' equity
−Removed: 34,223  
−Removed: 40,609  
+Added: 39,967 34,223
Total liabilities and stockholders' equity
−Removed: $ 110,787  
−Removed: $ 112,493  
+Added: $ 107,374 $ 110,787
See accompanying notes to the consolidated financial statements.
3 unchanged sentences
Cash flows from operating activities:
−Removed: Net loss  
−Removed: Adjustments to reconcile net loss to net cash used in operating activities:
+Added: $ ( 31,446 ) $ ( 24,792 )
+Added: Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount and issuance costs
2 unchanged sentences
Interest expense added to lease liability
−Removed: Loss on equity method investments
−Removed: ( 40 )  
−Removed: Loss on debt conversion and extinguishment of debt
+Added: Gain/Loss on equity method investments
+Added: Loss on early extinguishment of debt
Compensation charge for stock and share option awards
−Removed: Unrealized gain on warrant derivative liabilities
+Added: Unrealized loss on derivative liabilities
Changes in operating assets and liabilities:
Accounts receivable
+Added: ( 450 ) ( 184 )
+Added: ( 1,790 ) ( 236 )
Prepaid expenses and other current assets
−Removed: ( 684 )  
+Added: ( 408 ) ( 684 )
Accounts payable
−Removed: Accrued and other liabilities
+Added: Lease liabilities
+Added: ( 108 ) ( 18 )
+Added: Deferred revenue
+Added: Other accrued liabilities
Net cash used in operating activities
+Added: ( 20,924 ) ( 18,599 )
Cash flows from investing activities:
Additions to property, plant and equipment and water programs
+Added: ( 5,787 ) ( 3,376 )
Contributions to equity-method investments
−Removed: Distributions from equity-method investments  
+Added: Distributions from equity-method investments
Payments for acquisitions, net of cash acquired
−Removed: ( 750 )  
Net cash used in investing activities
+Added: ( 5,787 ) ( 4,122 )
Cash flows from financing activities:
Net proceeds from issuance of common stock
−Removed: 21,636  
−Removed: 32,459  
−Removed: Net proceeds from the issuance of 8.875 % series A cumulative, perpetual preferred stock
−Removed: 54,209  
+Added: 38,490 21,636
Dividend payment
+Added: ( 5,106 ) ( 5,106 )
Proceeds from the issuance of long-term debt
−Removed: 50,137  
Issuance costs of long-term debt
Principal payments on long-term debt
+Added: ( 15,164 ) ( 170 )
Costs for extinguishment of debt
1 unchanged sentence
Net cash provided by financing activities
−Removed: 16,647  
−Removed: 51,178  
+Added: 17,565 16,647
Net (decrease) increase in cash, cash equivalents and restricted cash
−Removed: ( 6,074 )  
−Removed: 12,432  
+Added: ( 9,146 ) ( 6,074 )
Cash, cash equivalents and restricted cash, beginning of period
−Removed: 19,856  
+Added: 13,782 19,856
Cash, cash equivalents and restricted cash, end of period
−Removed: $ 13,782  
−Removed: $ 19,856  
+Added: $ 4,636 $ 13,782
See accompanying notes to the consolidated financial statements.
−Removed: Consolidated Statements of Stockholders ’
−Removed: Equity (Deficit)
+Added: Consolidated Statements of Stockholders ’ Equity
8.875% Series A Cumulative
1 unchanged sentence
Perpetual Preferred Stock
−Removed: Stockholders ’
−Removed: Equity (Deficit)
+Added: Stockholders’
Balance as of December 31, 2021
−Removed: 36,902,361  
−Removed: $ 513,744  
−Removed: $ ( 539,414 )  
−Removed: Issuance of restricted stock units
−Removed: 158,673  
−Removed: Net settlement for taxes related to equity awards
−Removed: ( 1,184 )  
−Removed: Issuance of shares pursuant to ATM offerings
−Removed: 1,649,318  
−Removed: 18,366  
−Removed: 18,382  
−Removed: Issuance of shares pursuant to direct offering
−Removed: 1,219,512  
−Removed: 14,062  
−Removed: 14,074  
−Removed: Conversion of preferred shares to common stock
−Removed: 2,917,167  
−Removed: ( 7,202 )  
−Removed: ( 29 )  
−Removed: Issuance of 8.875 % series A cumulative perpetual preferred shares
−Removed: 54,209  
−Removed: 54,210  
−Removed: Issuance of shares pursuant to exercise of warrants
−Removed: 362,500  
−Removed: Reclassification of warrant liability
−Removed: Issuance of warrants
−Removed: Issuance of shares to lenders
−Removed: 363,566  
+Added: 43,656,169 $ 435 329 $ 1 2,300 $ 1 $ 613,572 $ ( 573,400 ) $ 40,609
+Added: Issuance of shares pursuant to direct offerings
+Added: 11,857,140 118 - - - - 21,518 - 21,636
Dividends paid and declared on 8.875 % series A cumulative perpetual preferred shares ($ 2,220 per share)
−Removed: ( 2,737 )  
−Removed: Cancellation of stock options to consultants
+Added: - - - - - - - ( 5,106 ) ( 5,106 )
Stock-based compensation expense
−Removed: 83,072  
+Added: 310,501 3 - - - - 1,873 - 1,876
Net loss and comprehensive loss
−Removed: ( 31,249 )  
+Added: - - - - - - - ( 24,792 ) ( 24,792 )
Balance as of December 31, 2022
−Removed: 43,656,169  
−Removed: $ 613,572  
−Removed: $ ( 573,400 )  
−Removed: $ 40,609  
+Added: 55,823,810 $ 556 329 $ 1 2,300 $ 1 $ 636,963 $ ( 603,298 ) $ 34,223
Issuance of shares pursuant to direct offerings
−Removed: 11,857,140  
−Removed: 21,518  
−Removed: 21,636  
+Added: 10,500,000 105 - - - - 38,385 - 38,490
Dividends paid and declared on 8.875 % series A cumulative perpetual preferred shares ($ 2,220 per share)
−Removed: ( 5,106 )  
+Added: - - - - - - - ( 5,106 ) ( 5,106 )
+Added: Reclassification of derivative liability
+Added: - - - - - - 2,570 - 2,570
Stock-based compensation expense
−Removed: 310,501  
+Added: 386,985 4 - - - - 1,232 - 1,236
Net loss and comprehensive loss
−Removed: ( 24,792 )  
−Removed: Balance as of December 31, 2022  
−Removed: 55,823,810  
−Removed: $ 636,963  
−Removed: $ ( 603,298 )  
−Removed: $ 34,223  
+Added: - - - - - - - ( 31,446 ) ( 31,446 )
+Added: Balance as of December 31, 2023 66,710,795 $ 665 329 $ 1 2,300 $ 1 $ 679,150 $ ( 639,850 ) $ 39,967
See accompanying notes to the consolidated financial statements.
Notes To The Consolidated Financial Statements
−Removed: NOTE 1 –
−Removed: DESCRIPTION OF BUSINESS
−Removed: (“Cadiz or the “Company”) is a water solutions provider dedicated to delivering clean, reliable, and affordable water for people through a variety of innovative water supply, storage, conveyance and treatment projects.
−Removed: The Company is advancing human access to clean water with its unique combination of land, water, infrastructure and technology assets, cutting-edge innovation, and industry-leading standards of environmental stewardship.
−Removed: The Company owns approximately 46,000 acres of land with access to high-quality, naturally-recharging groundwater resources in three areas of Southern California’s Mojave Desert –
−Removed: the Cadiz Valley ( 35,000 acres), Danby Dry Lake ( 2,000 acres), and the Piute Valley ( 9,000 acres) (“Cadiz Property”).
−Removed: The Company’s land holdings with vested water rights were primarily assembled by its founders in the early 1980s, relying on NASA imagery that identified a unique desert aquifer system at the base of a vast Southern California watershed.
−Removed: Since its founding in 1983, the Company has developed its unique land assets in California for sustainable farming and groundwater management, and in recent years,  has invested in wellfield and pipeline infrastructure as well as groundwater treatment technology that will enable us to play a critical role in serving the needs of people and communities that lack access to clean, reliable and affordable water. 
−Removed: The Company’s unique supply, storage and pipeline assets are located in a remote area of eastern San Bernardino County that sits at the crossroads of major highway, rail, energy, and water infrastructure between California’s primary water supply systems, the Colorado River Basin and the State Water Project.
−Removed: As a result, our Cadiz Water Conservation and Storage Project is uniquely positioned to assist public water agencies in storing and managing unpredictable water supplies and provide reliable, affordable water supplies to chronically underserved areas of California.
−Removed: NOTE 2 –
−Removed: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
+Added: NOTE 1 – DESCRIPTION OF BUSINESS
+Added: (“Cadiz or the “Company”) is a water solutions provider with a unique combination of land, water, pipeline and water filtration technology assets strategically located in Southern California between major water systems serving population centers in the Southwestern United States.
+Added: The Company’s portfolio of assets includes 2.5 million acre-feet of water supply, 220 miles of existing, buried pipeline, 1 million acre-feet of groundwater storage capacity, versatile, scalable, and cost-effective water filtration technology.
+Added: The Company provides products and services to public water systems, government agencies and commercial clients that address the emerging threat of water scarcity and affordability in a region of the world facing severe challenges from climate change.
+Added: The Company owns approximately 46,000 acres of land with high-quality, naturally-recharging groundwater resources in Southern California’s Mojave Desert (“Cadiz Property”).
+Added: Land holdings with vested water rights were assembled by the Company’s founders in the early 1980s, relying on NASA imagery that identified a significant desert aquifer system at the base of a vast Southern California watershed.
+Added: Since its founding in 1983, the Company has developed its land assets in California for sustainable farming and groundwater management, and in recent years, has invested in wellfield and pipeline infrastructure as well as water filtration technology that will enable The Company to play a critical role in serving the needs of people and communities that lack access to clean, reliable and affordable water.
+Added: The Company’s supply, storage and pipeline assets are located in a remote area of eastern San Bernardino County that sits at the crossroads of major highway, rail, energy, and water infrastructure between California’s primary water supply systems, the Colorado River Basin and the State Water Project.
+Added: As a result, the Cadiz Water Conservation and Storage Project is well positioned to assist public water agencies in storing and managing unpredictable water supplies and provide reliable, affordable water supplies to chronically underserved areas of California.
+Added: NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
2 unchanged sentences
The Company had working capital of $ 2.2 million at December 31, 2023 and used cash in operations of $ 20.9 million for the year ended December 31, 2023.
−Removed: The higher loss in 2021 was primarily due to stock-based non-cash bonus awards to employees and higher interest expense in that period offset by higher cost of sales recorded in the 2022 period.
−Removed: Cash requirements during the year ended December 31, 2022 primarily reflect certain administrative costs related to the Company’s water project development efforts, the further development of its land and agricultural assets.
−Removed: The Company’s present activities are focused on development of its assets in ways that meet growing long-term demand for access to sustainable water supplies and agricultural products.
−Removed: Notes To The Consolidated Financial Statements
−Removed: On June 7, 2021, the Company completed the sale and issuance of 1,219,512 shares of the Company’s common stock to certain institutional investors under a placement agent agreement with B.
−Removed: Riley Securities, Inc.
−Removed: (“BRS”).
−Removed: The shares of common stock were sold at a purchase price of $ 12.30 per share, for aggregate gross proceeds of $ 15 million and aggregate net proceeds of approximately $ 14.1 million.
−Removed: The Company used the net proceeds from this offering together with cash on hand, to fund the $ 19 million payment made on June 30, 2021 to complete the acquisition of a 124 -mile extension of its Northern Pipeline.
−Removed: On June 29, 2021, the Company entered into an Underwriting Agreement with BRS as representative of the several underwriters named therein, to issue and sell an aggregate of 2,000,000 depositary shares (the “Depositary Shares”), as well as up to 300,000 Depositary Shares that may be sold pursuant to the exercise of an option to purchase additional Depositary Shares, each representing 1/1000 th of a share of Series A Preferred Stock (“Depositary Share Offering”).
−Removed: The liquidation preference of each share of Series A Preferred Stock is $ 25,000.00 ($ 25.00 per Depositary Share).
−Removed: The Depositary Share Offering was completed on July 2, 2021 for net proceeds of approximately $ 54 million.
−Removed: On July 2, 2021, the Company entered into a new $ 50 million senior secured credit agreement with lenders party thereto from time to time (“Lenders”) and BRS, as administrative agent for the Lenders (“Current Senior Secured Debt”) (see Note 7  –
−Removed: “Long-Term Debt”).
−Removed: The proceeds of the Current Senior Secured Debt, together with the proceeds from the Depositary Share Offering, were used (a) to repay all the Company’s outstanding obligations under the Prior Senior Secured Debt in the amount of approximately $ 77.5 million, (b) to deposit approximately $ 10.2 million into a segregated account, representing an amount sufficient to pre-fund eight quarterly dividend payments on the Series A Preferred Stock underlying the Depositary Shares issued in the Depositary Share Offering, and (c) to pay transaction related expenses.
−Removed: The remaining proceeds were used for working capital needs and for general corporate purposes.
−Removed: At December 31, 2022, the Company was in compliance with its debt covenants.
−Removed: On March 23, 2022, the Company completed the sale and issuance of 6,857,140 shares of the Company’s common stock to certain institutional and individual investors in a registered direct offering.
−Removed: The shares of common stock were sold at a purchase price of $ 1.75 per share, for aggregate gross proceeds of $ 12 million and aggregate net proceeds of approximately $ 11.7 million.
−Removed: On November 14, 2022, the Company completed the sale and issuance of 5,000,000 shares of the Company’s common stock to certain institutional investors in a registered direct offering ( “November 2022 Direct Offering”).
−Removed: The shares of common stock were sold at a purchase price of $ 2.00 per share, for aggregate gross proceeds of $ 10 million and aggregate net proceeds of approximately $ 9.9  million.
+Added: The higher loss in 2023 was primarily due to a loss on extinguishment of debt in the amount of $ 5.3 million resulting from issuance of a conversion instrument, a repayment fee and elimination of debt discount associated with the paydown of $ 15 million of senior secured debt in February 2023.
Notes To The Consolidated Financial Statements
−Removed: On January 30, 2023, the Company completed the sale and issuance of 10,500,000 shares of the Company’s common stock to certain institutional investors in a registered direct offering ( “January 2023 Direct Offering”).
+Added: Cash requirements during the year ended December 31,2023, primarily reflect certain operating and administrative costs related to development of the Company’s land, water, infrastructure and technology assets for water solutions including the Cadiz Water Conservation & Storage Project (“Water Project”), agricultural operations and water filtration business.
+Added: 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 before the next drought strikes the Southwestern United States.
+Added: On January 30, 2023, the Company completed the sale and issuance of 10,500,000 shares of the Company’s common stock to certain institutional investors in a registered direct offering ( “January 2023 Direct Offering”).
The shares of common stock were sold at a purchase price of $ 3.84 per share, for aggregate gross proceeds of $ 40.32 million and aggregate net proceeds of approximately $ 38.5 million.
−Removed: A portion of the net proceeds were used to repay the Company’s debt in the principal amount of $ 15 million, together with fees and interest required to be paid in connection with such repayment.
−Removed: The remaining proceeds from the January 2023 Direct Offering, together with the remaining proceeds from the November 2022 Direct Offering will be used for capital expenditures to accelerate development of the Company’s water supply, storage, conveyance and treatment assets, working capital and development of additional water resources to meet increase demand on an accelerated timetable.
+Added: A portion of the net proceeds were used to repay the Company’s debt in the principal amount of $ 15 million, together with fees and interest required to be paid in connection with such repayment.
+Added: On February 2, 2023, the Company and its wholly-owned subsidiary, Cadiz Real Estate LLC, as borrowers (collectively, the “Borrowers”) entered into a First Amendment to Credit Agreement with BRF Finance Co., LLC (“Lenders”) and B.
+Added: Riley Securities, Inc., (“BRS”) as administrative agent, to amend certain provisions of the Credit Agreement dated as of July 2, 2021 ( “First Amended Credit Agreement”).
+Added: Under the First Amended Credit Agreement, the lenders will 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”)(see Note 8 – "Long-Term Debt”, below).
+Added: 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 $ Fund 2012 (“Heerema”).
+Added: 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”);
+Added: (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;
+Added: (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;
+Added: and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027 ( see Note 15 – “Subsequent Events”).
The Company may meet 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.
−Removed: The covenants in the Current Senior Secured Debt do not prohibit the Company’s use of additional equity financing and allow the Company to retain 100% of the proceeds of any common equity financing. The Company does not expect the loan covenants to materially limit its ability to finance its water and agricultural development activities.
+Added: The covenants in the senior secured debt do not prohibit the Company’s use of additional equity financing and allow the Company to retain 100% of the proceeds of any common equity financing.
+Added: The Company does not expect the loan covenants to materially limit its ability to finance its water and agricultural development activities.
+Added: Notes To The Consolidated Financial Statements
Management assesses whether the Company has sufficient liquidity to fund its costs for the next twelve months from the financial statement issuance date.
−Removed: 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.
+Added: 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 judgment to estimate the significant assumptions related to the projected cash flows of the Company including the following:
−Removed: (i) projected cash outflows, (ii) projected cash inflows, (iii) categorization of expenditures as discretionary versus non-discretionary and (iv) the ability to raise capital.
+Added: (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.
−Removed: Limitations on the Company’s liquidity and ability to raise capital may adversely affect it.
−Removed: Sufficient liquidity is critical to meet the Company’s resource development activities.
+Added: Limitations on the Company’s liquidity and ability to raise capital may adversely affect it.
+Added: 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 be no assurance that its liquidity requirements will continue to be satisfied.
5 unchanged sentences
The Company applies the equity method of accounting for investments in which the Company has significant influence but not a controlling interest.
−Removed: Notes To The Consolidated Financial Statements
Use of Estimates in Preparation of Financial Statements
3 unchanged sentences
Segment Reporting
−Removed: The Company currently operates in two segments based upon its organizational structure and the way in which its operations are managed and evaluated.
−Removed: The Company’s largest segment is Land and Water Resources which includes all activities regarding its properties in the eastern Mojave desert including the Water Project development and its agricultural operations.
−Removed: The Company’s second operating segment is its recently acquired water treatment business, ATEC Water Systems LLC (“ATEC”) which provides innovative water filtration solutions for impaired or contaminated groundwater sources.
−Removed: The reporting segments have been combined for 2022 as the ATEC business was not acquired until November 2022 and its revenue, operating results and assets in 2022 were not material to the Company’s consolidated operations.
+Added: The Company currently operates in two reportable segments based upon its organizational structure and the way in which its operations are managed and evaluated.
+Added: 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 Water Project (supply, storage and conveyance), and agricultural operations.
+Added: The Company’s second operating segment is its water filtration technology business, ATEC Water Systems LLC (“ATEC”) which provides innovative water filtration solutions for impaired or contaminated groundwater sources.
+Added: The Company acquired the assets of ATEC Systems, Inc.
+Added: in November 2022 into its new subsidiary ATEC.
+Added: There were intersegment sales of $ 311 thousand during the year ended December 31, 2023, which resulted in an intercompany elimination of profits in the amount of $ 99 thousand.
+Added: Notes To The Consolidated Financial Statements
Revenue Recognition
−Removed: The Company recognizes rental income through its agricultural leases with Fenner Valley Farms LLC and SoCal Hemp JV LLC, and crop sale revenue from its alfalfa farming operations upon shipment and transfer of title to customers.
+Added: The Company’s revenue is currently derived from sales of water filtration systems by ATEC, sales of farm crops, and rental revenue from its agricultural lease.
+Added: The Company recognizes revenue by following the five -step model under ASC 606 to achieve the core principle that an entity recognizes revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.
+Added: Sales of farm crops are recognized when product is shipped to customers at Cadiz Ranch, and sales at ATEC are recognized when filters are shipped to the customer.
Stock-Based Compensation
General and administrative expenses include $ 1.5 million and $ 1.9 million of stock-based compensation expenses in the years ended December 31, 2023 and 2022, respectively.
−Removed: Stock-based compensation is generally based upon grants of stock awards, performance stock units (“PSU”) and restricted stock units (“RSU”) to its employees and consultants under the 2019 Equity Incentive Plan.
+Added: Stock-based compensation is generally based upon grants of stock awards, performance stock units (“PSU”) and restricted stock units (“RSU”) to its employees and consultants under the 2019 Equity Incentive Plan.
For stock awards, PSUs or RSUs granted, the Company determines the fair value of the stock award, PSUs or RSU at the date of the grant and recognizes the compensation expense over the vesting period.
4 unchanged sentences
Had these instruments been included, the fully diluted weighted average shares outstanding would have increased by approximately 5,290,000 shares and 1,814,000 shares for the years ended December 31, 2023 and 2022, respectively.
−Removed: Notes To The Consolidated Financial Statements
Property, Plant, Equipment and Water Programs
7 unchanged sentences
While interest on borrowed funds is currently expensed, interest costs related to the construction of water project facilities will be capitalized at the time construction of these facilities commences.
+Added: Notes To The Consolidated Financial Statements
Goodwill and Other Intangibles Resulting from Business Acquisitions
As a result of a merger in May 1988 between two companies which eventually became known as Cadiz Inc., goodwill in the amount of $ 7,006,000 was recorded.
−Removed: Approximately $ 3,193,000 of this amount was amortized prior to the adoption of Accounting Standards Codification 350, “Intangibles –
−Removed: Goodwill and Other”
−Removed: (“ASC 350”
−Removed: ) on January 1, 2002.
−Removed: In addition, as a result of the ATEC Acquisition (see Note 3 –
−Removed: “Acquisitions”), tax deductible goodwill in the amount of $ 1.9 million was recorded in November 2022. 
+Added: Approximately $ 3,193,000 of this amount was amortized prior to the adoption of Accounting Standards Codification 350, “Intangibles – Goodwill and Other” (“ASC 350” ) on January 1, 2002.
+Added: In addition, as a result of the ATEC Acquisition (see Note 3 – “Acquisitions”), tax deductible goodwill in the amount of $ 1.9 million was recorded in November 2022.
Since the adoption of ASC 350, there have been no goodwill impairments recorded.
3 unchanged sentences
Other identifiable intangibles related to the ATEC acquisition included non-compete agreements.
−Removed: Contingent consideration arrangements are initially recorded based on management’s best estimate of the amount of contingent consideration that will be realized.
+Added: Contingent consideration arrangements are initially recorded based on management’s best estimate of the amount of contingent consideration that will be realized.
Changes in fair value of contingent consideration that are not measurement period adjustments are recognized in earnings.
3 unchanged sentences
No impairment charge was recorded during the current fiscal year.
−Removed: Notes To The Consolidated Financial Statements
The Company performs an annual impairment test to identify potential goodwill impairment and measure the amount of a goodwill impairment loss to be recognized (if any).
2 unchanged sentences
This impairment assessment is performed at least annually in the fourth quarter.
−Removed: An impairment loss will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit. 
−Removed:  The Company uses the market approach to assess impairment for the Land and Water Resources reporting unit, as its common stock price is an important component of the fair value calculation. 
−Removed: If the Company’s stock price experiences price declines, this will impact the fair value of the reporting unit and could lead to potential impairment charges in future periods. Accordingly, no assurances can be given that the Company will not record an impairment loss on goodwill in the future.
−Removed: In the Company’s annual impairment analysis for the fourth quarter 2022, the goodwill was evaluated utilizing a qualitative assessment.
+Added: An impairment loss will be recognized for the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill in that reporting unit.
+Added: The Company uses the market approach to assess impairment for the Land and Water Resources reporting unit, as its common stock price is an important component of the fair value calculation.
+Added: If the Company’s stock price experiences price declines, this will impact the fair value of the reporting unit and could lead to potential impairment charges in future periods.
+Added: Accordingly, no assurances can be given that the Company will not record an impairment loss on goodwill in the future.
+Added: The Company uses the income approach to assess impairment for the Water Filtration Technology reporting unit.
+Added: Notes To The Consolidated Financial Statements
+Added: In the Company’s annual impairment analysis for the fourth quarter 2023, the goodwill was evaluated utilizing a qualitative assessment.
Based on this assessment, the Company determined that the fair value of the reporting units was more-likely-than- not greater than its respective carrying value;
therefore, no impairment charge was recorded during the current fiscal year.
−Removed: Deferred Financing Costs
−Removed: Deferred loan costs represent costs incurred to obtain debt financing.
−Removed: Such costs are amortized over the life of the related loan using the effective interest method, and are presented as a reduction of long-term debt.
−Removed: The Company had no deferred loan costs as of December 31, 2022, and $ 2.3 million as of December 31, 2021.
Debt Discount
−Removed: Debt discount created upon the issuance of debt is deferred and amortized over the life of the related loan using the effective interest method, and is presented as a reduction of long-term debt. 
−Removed: The Company recorded debt discount of $ 2.4 million for the year ended December 31, 2022, and $ 1.1 million for the year ended December 31, 2021. 
+Added: Debt discount created upon the issuance of debt is deferred and amortized over the life of the related loan using the effective interest method and is presented as a reduction of long-term debt.
+Added: The Company recorded $ 0.7 million of debt discount for the year ended December 31, 2023, and $ 2.4 million for the year ended December 31, 2022.
Amortization of debt discounts is included in interest expense on the Consolidated Statement of Operations.
−Removed: Notes To The Consolidated Financial Statements
Income taxes are provided for using an asset and liability approach which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial statement and tax bases of assets and liabilities at the applicable enacted tax rates.
3 unchanged sentences
Financial liabilities with carrying values approximating fair value include accounts payable and accrued liabilities due to their short-term nature.
−Removed: The carrying value of the Company’s secured debt approximates fair value, based on interest rates available to the Company for debt with similar terms.
−Removed: See Note 7  –
−Removed: “Long-Term Debt”, for discussion of fair value of debt.
+Added: The carrying value of the Company’s secured debt approximates fair value, based on interest rates available to the Company for debt with similar terms.
+Added: See Note 8 – “Long-Term Debt”, for discussion of fair value of debt.
SoCal Hemp JV
−Removed: In July 2019, SoCal Hemp JV LLC (the “JV”) was created by Cadiz Real Estate LLC (a fully owned subsidiary of Cadiz Inc.) and SoCal Hemp Co, LLC (a fully owned subsidiary of Glass House Brands, Inc., which is an unrelated company to Cadiz Inc.) when the two parties entered into a Limited Liability Company Agreement (“LLC Agreement”).
−Removed: The JV was 50% owned by Cadiz Real Estate LLC and 50 % owned by SoCal Hemp Co., LLC (“SCHCO”, together the “Parties”).
−Removed: Pursuant to the LLC Agreement, the JV profits and losses were allocated to the members based on their ownership share.
−Removed: The Company accounted for its investment in the JV using the equity method of accounting. 
−Removed: No planting of hemp was made by the JV during 2022 due to poor market conditions for hemp pricing. 
−Removed: On December 30, 2022, the Parties entered into an Agreement and Plan of Dissolution of the JV whereby the Company purchased fixed assets with a net book value to the JV of approximately $ 343 thousand for $ 171 thousand and reclaimed the buildings, tenant improvements and machinery and equipment with fair value of approximately $ 1 million which is included in Property, Plant, Equipment and Water Programs at December 31, 2022. 
−Removed: Prior to the dissolution of the JV, the carrying value of the investment was approximately $ 1 million. 
−Removed: Loss from equity-method investments related to the JV immediately prior to the dissolution totaled $ 171 thousand. 
+Added: In July 2019, SoCal Hemp JV LLC (the “JV”) was created by Cadiz Real Estate LLC (a fully owned subsidiary of Cadiz Inc.) and SoCal Hemp Co, LLC (a fully owned subsidiary of Glass House Brands, Inc., which is an unrelated company to Cadiz Inc.) when the two parties entered into a Limited Liability Company Agreement (“LLC Agreement”).
+Added: The JV was 50% owned by Cadiz Real Estate LLC and 50 % owned by SoCal Hemp Co., LLC (“SCHCO”, together the “Parties”).
+Added: On December 30, 2022, the Parties entered into an Agreement and Plan of Dissolution of the JV whereby the Company purchased fixed assets with a net book value to the JV of approximately $ 343 thousand for $ 171 thousand and reclaimed the buildings, tenant improvements and machinery and equipment with fair value of approximately $ 1 million which is included in Property, Plant, Equipment and Water Programs at December 31, 2022.
+Added: Notes To The Consolidated Financial Statements
+Added: Prior to the dissolution of the JV, the carrying value of the investment was approximately $ 1 million.
+Added: Loss from equity-method investments related to the JV immediately prior to the dissolution totaled $ 171 thousand.
At the time of the dissolution, the Company recorded a gain on the dissolution of the JV of approximately $ 211 thousand.
Total gain from equity-method investments for the year ended December 31, 2022, was $ 40 thousand.
−Removed: The Company recorded rental income related to the JV of approximately $ 129 thousand for the year ended December 31, 2022. 
+Added: The Company recorded rental income related to the JV of approximately $ 129 thousand for the year ended December 31, 2022.
The results of the JV have not been separately recorded in discontinued operations as the results were not material.
Supplemental Cash Flow Information
−Removed: During the year ended December 31, 2022, approximately $ 3.5 million in interest payments on the Company’s senior secured debt was paid in cash.
+Added: During the year ended December 31, 2023, approximately $ 1.6 million in interest payments on the Company’s senior secured debt was paid in cash.
There are no scheduled principal payments due on the Current Senior Secured Debt prior to its maturity.
−Removed: Notes To The Consolidated Financial Statements
−Removed: At December 31, 2022, accruals for cash dividends payable on the Series A Preferred Stock was $ 1.29 million (see Note 9 –
−Removed: “Common and Preferred Stock”).
+Added: At December 31, 2023, accruals for cash dividends payable on the Series A Preferred Stock was $ 1.29 million (see Note 10 – “Common and Preferred Stock”).
The cash dividends were paid on January 15, 2024.
−Removed: At December 31, 2022, accruals for purchases of PP&E received was approximately $ 1.5 million, and are expected to be paid in the first fiscal quarter of 2023.
The balance of cash, cash equivalents, and restricted cash as shown in the condensed consolidated statements of cash flows is comprised of the following:
4 unchanged sentences
Cash and Cash Equivalents
−Removed: $ 9,997  
−Removed: $ 10,965  
+Added: $ 4,502 $ 9,997
Restricted Cash
1 unchanged sentence
Cash, Cash Equivalents and Restricted Cash in the Consolidated Statement of Cash Flows
−Removed: $ 13,782  
−Removed: $ 19,856  
−Removed: The restricted cash amounts primarily represent funds deposited into a segregated account, representing an amount sufficient to pre-fund quarterly dividend payments on Series A Preferred Stock underlying the Depositary Shares issued in the Depositary Share Offering through approximately July 2023.
+Added: $ 4,636 $ 13,782
+Added: The restricted cash amounts primarily represented funds deposited into a segregated account, representing an amount sufficient to pre-fund quarterly dividend payments on Series A Preferred Stock underlying the Depositary Shares issued in the Depositary Share Offering through approximately July 2023.
Cash payments for income taxes were $ 11 thousand and $ 7 thousand for the years ended December 31, 2023 and 2022, respectively.
+Added: Notes To The Consolidated Financial Statements
Recent Accounting Pronouncements
+Added: Accounting Guidance Not Yet Adopted
+Added: In November 2023, the Financial Account Standards Board (“FASB”) issued an accounting standards update which modifies the disclosure and presentation requirements of reportable segments.
+Added: This update is effective for fiscal years beginning after December 15, 2023, and interim periods within those financial years beginning after December 15, 2024, with early adoption permitted.
+Added: The Company is currently assessing this new guidance and expects this new standard will not have a material impact on the consolidated financial statements.
+Added: In December 2023, the FASB issued an accounting standards update which expands disclosures in an entity’s income tax rate reconciliation table and disclosures regarding cash tax paid in the U.S.
+Added: and foreign jurisdictions.
+Added: This update is effective for fiscal years beginning after December 15, 2024.
+Added: The Company is currently assessing this new guidance and expects this new standard will not have a material impact on the consolidated financial statements.
Accounting Guidance Adopted
−Removed: In June 2016, the Financial Account Standards Board (“FASB”) issued an accounting standards update which introduces new guidance for the accounting for credit losses on certain financial instruments.
+Added: In June 2016, the FASB issued an accounting standards update which introduces new guidance for the accounting for credit losses on certain financial instruments.
This update is effective for fiscal years beginning after December 15, 2022, and for interim periods within those fiscal years, with early adoption permitted.
−Removed: The adoption of this new standard on January 1, 2023 had no impact on the Company’s consolidated financial statements.
−Removed: Reclassifications
−Removed: Certain reclassifications have been made to the prior year's financial statement notes to conform to classifications used in the current year.
−Removed: NOTE 3 –
−Removed: On November 9, 2022, the Company completed the acquisition of the assets of ATEC Systems, Inc.
−Removed: into ATEC Water Systems, LLC ("ATEC"), a water filtration technology company, at a purchase price of up to $ 2.2 million (“ATEC Acquisition”). 
−Removed: The ATEC Acquisition is intended to enable the Company to assist water agencies in increasing supplies of potable water from contaminated groundwater sources. 
−Removed: The table below summarizes the preliminary fair value of assets acquired and liabilities assumed in the ATEC Acquisition:
−Removed: Notes To The Consolidated Financial Statements
+Added: The adoption of this new standard on January 1, 2023 had no impact on the Company’s consolidated financial statements.
+Added: NOTE 3 – ACQUISITIONS
+Added: On November 9, 2022, the Company completed the acquisition of the assets of ATEC Systems, Inc.
+Added: into ATEC Water Systems, LLC (“ATEC”), a water filtration technology company, at a purchase price of up to $ 2.2 million (“ATEC Acquisition”).
+Added: The ATEC Acquisition is intended to enable the Company to assist water agencies in increasing supplies of potable water from contaminated groundwater sources.
+Added: The table below summarizes the fair value of assets acquired and liabilities Assumed in the ATEC Acquisition:
($ in thousands)
2 unchanged sentences
Total estimated purchase price
−Removed: $ 2,200  
−Removed: The final allocation of purchase consideration to assets and liabilities is ongoing as the Company continues to evaluate certain balances, estimates and assumptions during the measurement period. 
−Removed: Consistent with the allowable time to complete the Company’s assessment, the valuation of certain acquired assets and liabilities, including environmental liabilities and income taxes, is currently pending finalization.
−Removed: The impact of the ATEC Acquisition, which is a new water treatment segment for the Company, was not material to the proforma net revenue or net income of the Company’s combined operations for the periods presented. 
−Removed: Net revenue and net loss related to ATEC post-acquisition were not material to the Consolidated Statements of Income for the periods presented. 
+Added: Notes To The Consolidated Financial Statements
+Added: The impact of the ATEC Acquisition, which is a new water filtration technology segment for the Company, was not material to the proforma net revenue or net income of the Company’s combined operations for the year ended December 31, 2022.
+Added: Net revenue and net income related to ATEC post-acquisition were not material to the Consolidated Statements of Income for the year ended December 31, 2022.
The Company recorded a contingent consideration liability in the amount of $ 1.45 million related to the purchase price of the ATEC Acquisition for amounts payable upon the sale of a requisite number of water filtration units under an asset purchase agreement.
−Removed: Following the acquisition, we entered into an agreement to grant 
−Removed: 200,000 Class P Units of ATEC to the new Chief Operating Officer of ATEC which vest ratably an annual basis over three years. 
+Added: Following the acquisition, the Company entered into an agreement to grant 200,000 Class P Units of ATEC to the new Chief Operating Officer of ATEC which vest ratably on an annual basis over three years.
These units provide for a 20 % profit participation in ATEC following a return to the Company of its initial $ 2.2 million investment.
−Removed: NOTE 4 –
−Removed: PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS
+Added: NOTE 4 – REPORTABLE SEGMENTS
+Added: We evaluate our performance based on segment operating (loss).
+Added: Interest expense, income tax expense and losses related to equity method investments are excluded from the computation of operating (loss) for the segments.
+Added: Segment net revenue, segment operating expenses and segment operating (loss) information consisted of the following for the year ended December 31, 2023:
+Added: Year Ended December 31, 2023
+Added: (in thousands)
+Added: Total revenues
+Added: 1,251 740 1,991
+Added: Costs and expenses:
+Added: Cost of sales
+Added: 2,241 646 2,887
+Added: General and administrative
+Added: 18,042 755 18,797
+Added: 1,096 151 1,247
+Added: Total costs and expenses
+Added: 21,379 1,552 22,931
+Added: Operating loss
+Added: $ ( 20,128 ) $ ( 812 ) $ ( 20,940 )
+Added: The Company only operated in one segment during the year ended December 31, 2022, as the water filtration technology segment did not exist prior to the ATEC Acquisition in November 2022.
+Added: Assets by operating segment, inclusive of goodwill, are as follows (dollars in thousands):
+Added: Operating Segment:
+Added: Water and Land Resources
+Added: $ 101,946 $ 107,439
+Added: Water Filtration Technology
+Added: $ 107,374 $ 110,787
+Added: Notes To The Consolidated Financial Statements
+Added: Goodwill by operating segment is as follows (dollars in thousands):
+Added: Operating Segment:
+Added: Water and Land Resources
+Added: $ 3,813 $ 3,813
+Added: Water Filtration Technology
+Added: $ 5,714 $ 5,714
Property, plant, equipment and water programs consist of the following (dollars in thousands):
+Added: December 31, 2023
+Added: Water and Land
+Added: Water Filtration
Land and land improvements
−Removed: $ 30,579  
−Removed: $ 27,548  
Water programs
−Removed: 29,210  
−Removed: 28,784  
−Removed: 22,091  
−Removed: 22,087  
Leasehold improvements, furniture and fixtures
1 unchanged sentence
Construction in progress
−Removed: 92,279  
−Removed: 86,377  
Less accumulated depreciation
−Removed: $ 84,138  
−Removed: $ 78,890  
+Added: ( 9,238 ) ( 139 )
+Added: $ 87,142 $ 75
+Added: December 31, 2022
+Added: Water and Land
+Added: Water Filtration
+Added: Land and land improvements
+Added: Water programs
+Added: Leasehold improvements, furniture and fixtures
+Added: Machinery and equipment
+Added: Construction in progress
+Added: Less accumulated depreciation
+Added: $ 83,969 $ 169
Notes To The Consolidated Financial Statements
−Removed: On June 30, 2021, the Company recorded the acquisition of a 124 -mile pipeline (“Northern Pipeline”).
−Removed: Depreciation on the Northern Pipeline will commence when construction is completed and required permits are secured in order to use the facility for the conveyance of water.
+Added: NOTE 5 – PROPERTY, PLANT, EQUIPMENT AND WATER PROGRAMS
+Added: Property, plant, equipment and water programs consist of the following (dollars in thousands):
+Added: Land and land improvements
+Added: $ 32,357 $ 30,579
+Added: Water programs
+Added: 29,209 29,210
+Added: 22,096 22,091
+Added: Leasehold improvements, furniture and fixtures
+Added: Machinery and equipment
+Added: Construction in progress
+Added: 96,594 92,279
+Added: Less accumulated depreciation
+Added: ( 9,377 ) ( 8,141 )
+Added: $ 87,217 $ 84,138
Land and land improvements primarily include land acquisitions, well development, irrigation systems and other related land infrastructure.
−Removed: Water programs primarily include costs directly attributable to the Company’s water project development efforts, including consulting fees for various engineering, hydrological, environmental and additional feasibility studies, and other professional and legal fees.
−Removed: Depreciation expense on land improvements, buildings, leasehold improvements, machinery and equipment and furniture and fixtures was $ 654 thousand and $ 423 thousand for the twelve months ended December 31, 2022 and 2021, respectively.
−Removed: NOTE 5 –
+Added: Water programs primarily include costs directly attributable to the Company’s water project development efforts, including consulting fees for various engineering, hydrological, environmental and additional feasibility studies, and other professional and legal fees.
+Added: During the year ended December 31, 2023, $ 1,906,000 of construction in progress was placed into service, which included land development, irrigation systems and stand establishment related to the planting of 150 acres of alfalfa.
+Added: Depreciation expense on land improvements, buildings, leasehold improvements, machinery and equipment and furniture and fixtures was $ 1.25 million and $ 0.7 million for the twelve months ended December 31, 2023 and 2022, respectively.
+Added: NOTE 6 – OTHER ASSETS
Other assets include the following (dollars in thousands):
−Removed: $ 4,481  
−Removed: $ 4,296  
+Added: $ 4,366 $ 4,481
Deposits and other
−Removed: $ 5,030  
−Removed: $ 4,296  
+Added: $ 5,438 $ 5,030
Prepaid rent primarily consists of fees incurred to obtain the rights-of-way for the Water Project.
Amortization of prepaid rent was approximately $ 115,000 for each of the years ended December 31, 2023 and 2022.
−Removed: NOTE 6 –
−Removed: ACCRUED LIABILITIES
+Added: Notes To The Consolidated Financial Statements
+Added: NOTE 7 – ACCRUED LIABILITIES
At December 31, 2023 and 2022, accrued liabilities consist of the following (dollars in thousands):
1 unchanged sentence
Legal and consulting
−Removed: Well development
−Removed: Water project
+Added: Water project and well development
Other accrued expenses
−Removed: $ 1,545  
−Removed: Notes To The Consolidated Financial Statements
−Removed: NOTE 7 –
−Removed: LONG-TERM DEBT
−Removed: At December 31, 2022 and 2021, the carrying amount of the Company’s outstanding debt is summarized as follows (dollars in thousands):
−Removed: Senior secured debt due July 2, 2024  
+Added: $ 1,170 $ 1,545
+Added: NOTE 8 – LONG-TERM DEBT
+Added: At December 31, 2023 and 2022, the carrying amount of the Company’s outstanding debt is summarized as follows (dollars in thousands):
+Added: Senior secured debt due
+Added: $ 21,200 $ 50,000
Interest rate of 7 % per annum
−Removed: $ 50,000  
−Removed: $ 50,000  
+Added: Convertible note instrument due
+Added: Interest rate of 7 % per annum
Debt discount and debt issuance costs, net of accumulated accretion
+Added: ( 554 ) ( 1,198 )
Total outstanding long-term debt
−Removed: 49,089  
−Removed: 46,584  
+Added: 37,893 49,089
Less current portion
Total outstanding debt
−Removed: $ 48,950  
−Removed: $ 46,477  
−Removed: The carrying value of the Company’s Senior Secured Debt approximates fair value.
−Removed: The fair value of the Company’s Senior Secured Debt (Level 2 ) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company by its lenders for similar debt instruments of comparable maturities by its lenders.
−Removed: Pursuant to the Company’s loan agreements, annual maturities of long-term debt outstanding on December 31, 2022, are as follows:
−Removed: ($ in thousands)
−Removed: 50,109  
−Removed: $ 50,287  
−Removed: On June 28, 2021, an affiliate of BRS entered into an assignment and assumption agreement (“Assignment”) whereby it agreed to purchase all outstanding obligations under the Company’s Prior Senior Secured Debt for $ 77.6  million.
−Removed: This Assignment closed on July 2, 2021.
−Removed: In conjunction with the closing of the Assignment, the Company issued 299,210 shares of the Company’s common stock to Apollo.
+Added: $ 37,711 $ 48,950
+Added: The carrying value of the Company’s Senior Secured Debt is approximately $ 19.1 million.
+Added: The carrying value of the Company's convertible note instrument approximates fair value.
+Added: Pursuant to the Company’s loan agreements, annual maturities of long-term debt outstanding on December 31, 2023, are as follows:
Notes To The Consolidated Financial Statements
−Removed: On July 2, 2021, the Company entered into a new $ 50 million senior secured credit agreement (“Credit Agreement”) with Lenders and BRS, as administrative agent for the Lenders (“Current Senior Secured Debt”).
−Removed: The Current Senior Secured Debt will mature on July 2, 2024, unless the maturity is accelerated subject to the terms of the Credit Agreement.
−Removed: Interest is paid quarterly beginning on September 30, 2021 at a rate of seven percent per annum. The obligations under the Current Senior Secured Debt are secured by substantially all of the Company’s assets on a first -priority basis.
−Removed: In connection with any repayment or prepayment of the debt, the Company is required to pay a repayment fee equal to the principal amount being repaid or prepaid, multiplied by (i) 4.0 %, if such repayment or prepayment is made on or after the eighteen -month anniversary of the closing of the debt and prior to the thirty -month anniversary of the closing of the debt, and (iii) 6.0 %, if such repayment or prepayment is made at any time after the thirty -month anniversary of the closing of the debt.
+Added: ($ in thousands)
+Added: .On July 2, 2021, the Company entered into a $ 50 million senior secured credit agreement (“Credit Agreement”) with Lenders and BRS, as administrative agent for the Lenders (“Current Senior Secured Debt”).
+Added: Interest is paid quarterly at a rate of seven percent per annum.
+Added: The obligations under the Current Senior Secured Debt are secured by substantially all of the Company’s assets on a first -priority basis.
+Added: In connection with any repayment or prepayment of the debt, the Company is required to pay a repayment fee equal to the principal amount being repaid or prepaid, multiplied by 6.0 %.
At any time, the Company will be 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 plus the applicable repayment fee described above.
+Added: 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”).
+Added: 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.
+Added: 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”).
+Added: Additionally, the maturity date of the Credit Agreement was extended from July 2, 2024 to June 30, 2026.
+Added: The annual interest rate remains unchanged at 7.00 %.
+Added: Interest on $ 20 million of the principal amount will be paid in cash.
+Added: Interest on the $ 15 million principal amount of the Convertible Loan will be paid in kind on a quarterly basis by addition such amount to the outstanding principal amount of the outstanding Convertible Loan.
+Added: The amendment was recorded as a debt extinguishment.
+Added: As a result of the First Amended Credit Agreement, the Company bifurcated the new conversion option from the debt and recorded a derivative liability.
+Added: As of the effective date of the First Amended Credit Agreement, the derivative liability had a fair value of approximately $ 2.4 million which was recorded as loss on early extinguishment of debt.
+Added: In addition, the loss on early extinguishment of debt included $ 2.0 million of repayment fees for both repaid and amended principal and $ 980 thousand of unamortized debt issuance costs.
+Added: The fair value of the derivative liability was remeasured each reporting period using an option pricing model, and the change in fair value was recorded as an adjustment to the derivative liability with the change in fair value recorded as income or expense.
+Added: On August 14, 2023, the Credit Agreement was further amended to remove a conversion exchange cap provision (“Second Amended Credit Agreement”).
+Added: As a result of the Second Amended Credit Agreement, the Company reclassified the carrying value of the bifurcated conversion option at the time of the modification from a derivative liability in the amount of $ 2.57 million to additional paid-in capital.
+Added: Total unrealized losses of derivative liabilities accounted for as derivatives prior to the Second Amended Credit Agreement were $ 220 thousand for the year ended December 31, 2023.
+Added: Notes To The Consolidated Financial Statements
+Added: 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 $ Fund 2012 (“Heerema”).
+Added: 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”);
+Added: (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;
+Added: (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;
+Added: and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027.
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 debt.
−Removed: 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, within five 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). 
+Added: 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, within five 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.
1 unchanged sentence
In addition, the Credit Agreement includes customary events of default and remedies.
−Removed: While any amount remains outstanding under the debt, the Lenders will have the right to convert the outstanding principal, plus unpaid interest, on the debt into Depositary Receipts at the per share exchange price of $ 25.00 , as follows:
−Removed: at any time after the 18 -month anniversary of the closing of the debt, and on or before the 24 -month anniversary of the closing of the debt, up to 75 % of the principal and unpaid interest on the debt may be exchanged into Depositary Receipts;
−Removed: at any time after the 24 -month anniversary of the closing of the debt, up to 100 % of the principal and unpaid interest on the debt may be exchanged for Depositary Receipts.
−Removed: The proceeds of the Current Senior Secured Debt were used, together with the proceeds received from the Depositary Share Offering, (a) to repay all of the Company’s outstanding obligations under the Prior Senior Secured Debt, (b) to deposit approximately $ 10.2 million into a segregated account, representing an amount sufficient to pre-fund eight quarterly dividend payments on the Series A Preferred Stock underlying the Depositary Shares issued in the Depositary Share Offering, and (c) to pay transaction related expenses.
−Removed: The remaining proceeds were used for working capital needs and for general corporate purposes.
−Removed: In addition, the Company incurred approximately $ 2.9 million in legal and advisory fees which was recorded as additional debt discount and is being amortized over the term of the Current Senior Secured Debt.
−Removed: Notes To The Consolidated Financial Statements
−Removed: In connection with the issuance of the Current Senior Secured Debt, on July 2, 2021 ( the “Original Issue Date”) the Company issued to the Lenders two warrants (“A Warrants”
−Removed: and “B Warrants”), each granting an option to purchase 500,000 shares of the Company’s common stock (collectively, the “Warrants”).
−Removed: The A Warrants may be exercised any time prior to July 2, 2024 ( the “Expiration Date”) and have an exercise price of $ 17.38 equal to 120 % of the closing price per share of the Company’s common stock on the Original Issue Date.
−Removed: The B Warrants may be exercised in the period from 180 days after the Original Issue Date to the Expiration Date and have an exercise price of $ 21.72 equal to 150 % of the closing price of the Company’s common stock on the Original Issue Date.
+Added: In connection with the issuance of the Current Senior Secured Debt, on July 2, 2021 ( the “Original Issue Date”) the Company issued to the Lenders two warrants (“A Warrants” and “B Warrants”), each granting an option to purchase 500,000 shares of the Company’s common stock (collectively, the “Warrants”).
+Added: The A Warrants may be exercised any time prior to July 2, 2024 ( the “Expiration Date”) and have an exercise price of $ 17.38 equal to 120 % of the closing price per share of the Company’s common stock on the Original Issue Date.
+Added: The B Warrants may be exercised in the period from 180 days after the Original Issue Date to the Expiration Date and have an exercise price of $ 21.72 equal to 150 % of the closing price of the Company’s common stock on the Original Issue Date.
As a result of the issuance of the Warrants, which met the criteria for equity classification under applicable GAAP, the Company recorded additional paid-in capital in the amount of $ 1.9 million which was the fair value of the Warrants on the issuance date.
In addition, the fair value of the Warrants was recorded as debt discount and is being amortized over the term of the Current Senior Secured Debt.
−Removed: On February 2, 2023, the Company used a portion of the net cash proceeds from a January 2023 direct offering to repay the Current Senior Secured Debt in the principal amount of $ 15 million, together with fees and interest required to be paid in connection with such repayment, under the Credit Agreement (see Note 15 - “Subsequent Events).
−Removed: NOTE 8 –
+Added: Notes To The Consolidated Financial Statements
+Added: NOTE 9 – INCOME TAXES
Deferred taxes are recorded based upon differences between the financial statement and tax basis of assets and liabilities and available carryforwards.
2 unchanged sentences
Net operating losses
−Removed: $ 69,537  
−Removed: $ 64,418  
+Added: $ 75,727 $ 69,537
Fixed asset basis difference
3 unchanged sentences
Total deferred tax assets
−Removed: 75,237  
−Removed: 69,852  
+Added: 81,447 75,237
Valuation allowance for deferred tax assets
+Added: ( 81,447 ) ( 75,237 )
Net deferred tax asset
−Removed: The change in deferred tax assets resulted from current year net operating losses and changes to future tax deductions resulting from expiring net operating losses, terms of stock compensation plans, fixed assets, and accrued liabilities. 
+Added: The change in deferred tax assets resulted from current year net operating losses and changes to future tax deductions resulting from expiring net operating losses, terms of stock compensation plans, fixed assets, and accrued liabilities.
A full valuation allowance continues to be recorded given the Company continues to be incurring losses.
−Removed: Notes To The Consolidated Financial Statements
As of December 31, 2023, the Company had net operating loss (NOL) carryforwards of approximately $ 334 million for federal income tax purposes and $ 309 million for California income tax purposes.
1 unchanged sentence
For federal losses arising in tax years ending after December 31, 2017, the NOL carryforwards are allowed indefinitely.
−Removed: 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 of 2021.
−Removed: As of December 31, 2022 and 2021, the Company's unrecognized tax benefits were immaterial.
+Added: 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 of 2021.
The Company’s tax years 2020 through 2023 remain subject to examination by the Internal Revenue Service, and tax years 2019 through 2023 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 of three years for federal tax purposes and four years for California purposes, beginning when such carryovers are utilized to reduce taxes in a future tax year.
+Added: Notes To The Consolidated Financial Statements
A reconciliation of the income tax benefit to the statutory federal income tax rate is as follows (dollars in thousands):
Expected federal income tax benefit at 21%
+Added: $ ( 6,602 ) $ ( 5,205 )
Increase (decrease) in valuation allowance
1 unchanged sentence
Expiring carryforwards
−Removed: 14,260  
Non-deductible expenses and other
2 unchanged sentences
Accordingly, no deferred tax asset has been recorded in the accompanying balance sheet.
−Removed: NOTE 9 –
−Removed: COMMON AND PREFERRED STOCK
+Added: NOTE 10 – COMMON AND PREFERRED STOCK
The Company is authorized to issue 85 million shares of Common Stock at a $ 0.01 par value.
As of December 31, 2023, and December 31, 2022, the Company had 66,710,795 and 55,823,810 shares issued and outstanding, respectively.
−Removed: Notes To The Consolidated Financial Statements
−Removed: In January 2013, the Company revised its then existing agreement with the law firm of Brownstein Hyatt Farber Schreck LLP (“Brownstein”), a related party.
−Removed: Under this agreement, the Company is to issue up to a total of 400,000 shares of the Company’s common stock, with 200,000 shares earned to date and 100,000 shares to be earned upon the achievement of each of two remaining milestones as follows:
−Removed: 100,000 shares earned upon the signing of binding agreements for more than 51 % of the Water Project’s annual capacity, which is not yet earned;
−Removed: 100,000 shares earned upon the commencement of construction of all of the major facilities contemplated in the Final Environmental Impact Report necessary for the completion and delivery of the Water Project, which is not yet earned.
−Removed: All shares earned upon achievement of any of the remaining two milestones will be payable three years from the date earned.
+Added: During 2022, the Company completed the sale and issuance of 11,857,140 shares of its common stock to certain institutional and individual investors in two registered direct offerings with net proceeds totaling $ 21.6 million.
+Added: During 2023, the Company completed the sale and issuance of 10,500,000 shares of its common stock to certain institutional investors in a registered direct offering with net proceeds totaling $ 38.5 million.
+Added: In January 2013, the Company revised its then existing agreement with the law firm of Brownstein Hyatt Farber Schreck LLP (“Brownstein Agreement”), a related party.
+Added: Under the Brownstein Agreement, the Company was to issue up to a total of 400,000 shares of the Company’s common stock.
+Added: 200,000 of these shares had been issued as of December 31, 2023 and 200,000 shares were to be earned upon the achievement of certain milestones.
+Added: Effective December 31, 2023, the unearned milestone shares were cancelled upon termination of the Brownstein Agreement.
Additionally, the Company incurred direct expenses to Brownstein of approximately $ 0.8 million and $ 1.5 million in 2023 and 2022, respectively.
+Added: Notes To The Consolidated Financial Statements
Series 1 Preferred Stock
−Removed: The Company has issued a total of 10,000 shares of Series 1 Preferred Stock (“Series 1 Preferred Stock”) to certain holders (“Holders”) under certain conversion and exchange agreements entered into in March 2020.
+Added: The Company has issued a total of 10,000 shares of Series 1 Preferred Stock (“Series 1 Preferred Stock”) to certain holders (“Holders”) under certain conversion and exchange agreements entered into in March 2020.
Each share of Series 1 Preferred Stock is convertible at any time at the option of the Holder into 405.05 shares of Common Stock.
2 unchanged sentences
Series A Preferred Stock
−Removed: On June 29, 2021, the Company entered into an Underwriting Agreement with BRS 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 that may be 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”).
+Added: On June 29, 2021, the Company entered into an Underwriting Agreement with BRS 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 that may be 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.
−Removed: 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.
−Removed: 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.
−Removed: Notes To The Consolidated Financial Statements
−Removed: 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:
−Removed: (i) senior to Common Stock of the Company;
−Removed: (ii) junior to the Series 1 Preferred Stock with respect to the distribution of assets upon the Company’s voluntary or involuntary liquidation, dissolution or winding up;
−Removed: (iii) senior to the Series 1 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.
−Removed: 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).
−Removed: Dividends will be payable quarterly in arrears, on or about the 15th of January, April, July and October, beginning on or about October 
+Added: 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.
+Added: 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.
+Added: 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:
+Added: (i) senior to Common Stock of the Company;
+Added: (ii) junior to the Series 1 Preferred Stock with respect to the distribution of assets upon the Company’s voluntary or involuntary liquidation, dissolution or winding up;
+Added: (iii) senior to the Series 1 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.
+Added: 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).
+Added: Dividends will be payable quarterly in arrears, on or about the 15 th of January, April, July and October, beginning on or about October 15, 2021.
As of December 31, 2023, the Company has paid cash dividends in the amount of $ 11,661,000 .
−Removed: On December 21, 2022, the Company’s Board of Directors declared that holders of Series A Preferred stock will receive a cash dividend equal to $ 560.00 per whole share;
+Added: On December 21, 2023, the Company’s Board of Directors declared that holders of Series A Preferred stock will receive a cash dividend equal to $ 560.00 per whole share;
therefore, holders of Depositary Shares will receive a cash dividend equal to $ 0.56 per Depositary Share.
−Removed: The dividend was paid on January 17, 2023 to respective holders of record at of the close of business on January 4, 2023.
−Removed: At the issuance of the Series A Preferred Stock, the Company pre-funded eight quarterly payments through July 2023 in a segregated account which appears as Restricted Cash on the Balance Sheet.
−Removed: Dividends on the Series A Preferred Stock underlying the depositary shares will continue to accumulate whether or not (i) any of the Company’s agreements prohibit the current payment of dividends, (ii) the Company has earnings or funds legally available to pay the dividends, or (iii) the Company’s Board of Directors does not declare the payment of the dividends.
+Added: The dividend was paid on January 15, 2024 to respective holders of record as of the close of business on January 4, 2024.
+Added: Notes To The Consolidated Financial Statements
+Added: At the issuance of the Series A Preferred Stock, the Company pre-funded eight quarterly payments through July 2023 in a segregated account which appeared as Restricted Cash on the Balance Sheet.
+Added: Dividends on the Series A Preferred Stock underlying the depositary shares will continue to accumulate whether or not (i) any of the Company’s agreements prohibit the current payment of dividends, (ii) the Company has earnings or funds legally available to pay the dividends, or (iii) the Company’s Board of Directors does not declare the payment of the dividends.
Holders of depositary shares representing interests in the Series A Preferred Stock generally will have no voting rights.
However, if the Company does not pay dividends on any outstanding shares of Series A Preferred Stock for six or more quarterly dividend periods (whether or not 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 elect two additional directors to the Board of Directors to serve until all unpaid dividends have been fully paid or declared and set apart for payment.
−Removed: 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.
+Added: 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.
−Removed: Notes To The Consolidated Financial Statements
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 has not elected to redeem the Series A Preferred Stock prior to the applicable conversion date.
−Removed: 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, but not 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.
+Added: 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, but not 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 December 31, 2023.
−Removed: NOTE 10 –
−Removed: STOCK-BASED COMPENSATION PLANS
+Added: NOTE 11 – STOCK-BASED COMPENSATION PLANS
The Company has issued options and has granted stock awards pursuant to its 2019 Equity Incentive Plan, as described below.
2019 Equity Incentive Plan
−Removed: The 2019 Equity Incentive Plan (as amended, the “2019 EIP”) was originally approved by stockholders at the July 10, 2019 Annual Meeting, with an amendment to the plan approved by stockholders at the July 12, 2022 Annual Meeting.
−Removed: The plan, as amended, provides for the grant and issuance of up to 2,700,000 shares and options to the Company’s employees, directors and consultants.
−Removed: Effective July 1, 2021, under the 2019 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 30 of each year.
+Added: The 2019 Equity Incentive Plan (as amended, the “2019 EIP”) was originally approved by stockholders at the July 10, 2019 Annual Meeting, with an amendment to the plan approved by stockholders at the July 12, 2022 Annual Meeting.
+Added: The plan, as amended, provides for the grant and issuance of up to 2,700,000 shares and options to the Company’s employees, directors and consultants.
+Added: Notes To The Consolidated Financial Statements
+Added: Effective July 1, 2021, under the 2019 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 30 of 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.
2 unchanged sentences
The Company has granted stock awards pursuant to its 2019 EIP.
−Removed: Of the total 2,700,000 shares reserved under the 2019 EIP, 1,803,666 shares and restricted stock units (“RSUs”) have been awarded to the Company’s directors, employees and consultants as of December 31, 2022.
−Removed: Notes To The Consolidated Financial Statements
−Removed: 825,000 RSUs were granted to employees in April 2021 as long-term equity incentive awards ( “April 2021 RSU Grant”).
−Removed: Of the 825,000 RSUs granted under the April 2021 RSU Grant, 510,000 RSUs were scheduled to vest upon completion of certain milestones, including (a) 255,000 RSUs which vested in July 2021 upon completion of refinancing of the Company’s then existing senior secured debt and funding to complete the purchase of the northern Pipeline (“
−Removed: Northern Pipeline Vesting Event”), and (b) 255,000 RSUs scheduled to vest upon completion of final binding water supply agreement(s) for the delivery of at least 9,500 acre-feet of water per annum to customers.
−Removed: Of the remaining 315,000 RSUs granted under the April 2021 RSU Grant, 60,000 RSUs vested and were issued on January 3, 2023, and 255,000 RSUs vested and were issued on March 1, 2023.
−Removed: Additionally, in July 2022, 60,000 RSUs were granted to employees as long-term equity incentive awards ( “July 2022 RSU Grant”).
−Removed: The RSUs granted under the July 2022 RSU Grant are scheduled to vest on January 2, 2024.
+Added: Of the total 2,700,000 shares reserved under the 2019 EIP, 2,333,739 shares and restricted stock units (“RSUs”) have been awarded to the Company’s directors, employees and consultants as of December 31, 2023.
+Added: 825,000 RSUs were granted to employees in April 2021 as long-term equity incentive awards ( “April 2021 RSU Grant”).
+Added: Of the 825,000 RSUs granted under the April 2021 RSU Grant, 510,000 RSUs were scheduled to vest upon completion of certain milestones, including (a) 255,000 RSUs which vested in July 2021 upon completion of refinancing of the Company’s then existing senior secured debt and funding to complete the purchase of the northern Pipeline (“ Northern Pipeline Vesting Event”), and (b) 255,000 RSUs scheduled to vest upon completion of final binding water supply agreement(s) for the delivery of at least 9,500 acre-feet of water per annum to customers (“Supply Agreement Vesting Event”).
+Added: 170,000 RSUs, including 85,000 related to the Supply Agreement Vesting Event, were accelerated and became fully vested as a result of an amended employee agreement entered into in February 2022 upon the change of the Executive Chair, 60,000 RSUs vested and were issued on January 3, 2023, and 170,000 RSUs vested and were issued on March 1, 2023.
+Added: 85,000 of the RSUs related to the Supply Agreement Vesting Event were cancelled effective December 31, 2023 and the remaining 85,000 shares related to the Supply Agreement Vesting Event vested in March 2024.
+Added: Additionally, in July 2022, 60,000 RSUs were granted to employees as long-term equity incentive awards ( “July 2022 RSU Grant”).
+Added: The RSUs granted under the July 2022 RSU Grant vested on January 2, 2024.
The RSU incentive awards are subject in each case to continued employment with the Company through the vesting date.
−Removed: Of the 255,000 RSUs earned upon the Northern Pipeline Vesting Event, the Company issued 158,673 shares net of taxes withheld and paid in cash by the Company.
+Added: Of the 255,000 RSUs earned and issued in July 2021 upon the Northern Pipeline Vesting Event, the Company issued 158,673 shares net of taxes withheld and paid in cash by the Company.
Of the 170,000 RSUs issued on March 1, 2023, the Company issued 102,871 shares net of taxes withheld and paid in cash by the Company.
−Removed: Upon the change of the Executive Chair on February 4, 2022, a total of 170,000 unvested RSUs were accelerated and became fully vested as a result of an amended employee agreement, which included 85,000 RSUs scheduled to vest upon completion of final binding water supply agreement(s) and 85,000 RSUs scheduled to vest on March 1, 2023.
−Removed: Additionally, the Company issued 450,000 performance stock units (“PSUs”) upon achievement of certain performance events.
−Removed: The PSUs vest upon the Company’s common stock achieving price hurdles (“Price Hurdles”) but not sooner than three years from date of grant, including (a) 200,000 PSUs to vest upon a Price Hurdle of $ 7 per share, (b) 150,000 PSUs to vest upon a Price Hurdle of $ 9 per share, (c) 50,000 PSUs to vest upon a Price Hurdle of $ 11 per share, and (d) 50,000 PSUs to vest upon a Price Hurdle of $ 13 per share and are payable, at the option of the Compensation Committee, in either common stock or cash.
+Added: The Company issued 450,000 performance stock units (“PSUs”) upon achievement of certain performance events.
+Added: The PSUs vest upon the Company’s common stock achieving price hurdles (“Price Hurdles”) but not sooner than three years from date of grant, including (a) 200,000 PSUs to vest upon a Price Hurdle of $ 7 per share, (b) 150,000 PSUs to vest upon a Price Hurdle of $ 9 per share, (c) 50,000 PSUs to vest upon a Price Hurdle of $ 11 per share, and (d) 50,000 PSUs to vest upon a Price Hurdle of $ 13 per share and are payable, at the option of the Compensation Committee, in either common stock or cash.
The PSU incentive award is subject to continued employment with the Company through the vesting date.
+Added: Notes To The Consolidated Financial Statements
+Added: Additionally, 400,000 RSUs were granted to a consultant on July 1, 2023 ( “July 2023 RSU Grant).
+Added: Of the 400,000 RSUs granted under the July 2023 RSU Grant, 200,000 RSUs were vested in March 2024 upon completion of the Third Amended Credit Agreement and Assignment discussed in Note 15 – “Subsequent Events”, below.
+Added: Of the remaining 200,000 RSUs granted, 100,000 RSUs vested and were issued on October 1, 2023, and 100,000 vested and were issued on February 1, 2024.
A summary of RSU activity under the plans during the years ended December 31, 2023 and 2022 is presented below:
Nonvested at December 31, 2021
−Removed: 119,281  
−Removed: $ 9.10  
−Removed: 850,729  
−Removed: $ 11.31  
+Added: 634,247 $ 11.14
+Added: 219,878 $ 2.22
Forfeited or canceled
−Removed: $ 10.84  
+Added: ( 310,501 ) $ 8.75
Nonvested at December 31, 2022
−Removed: 634,247  
−Removed: $ 11.14  
−Removed: 219,878  
−Removed: $ 2.22  
+Added: 543,624 $ 8.90
+Added: 603,884 $ 3.85
Forfeited or canceled
−Removed: $ 8.75  
+Added: ( 90,315 ) $ 10.75
+Added: ( 468,116 ) $ 7.19
Nonvested at December 31, 2023
−Removed: 543,624  
−Removed: $ 8.90  
−Removed: Notes To The Consolidated Financial Statements
−Removed: As of December 31, 2022, the Company had approximately $ 2.5 million of unrecognized stock compensation expense related to nonvested PSUs and RSUs.
−Removed: NOTE 11 –
−Removed: SEGMENT INFORMATION
−Removed: The primary business of the Company is to acquire and develop land and water resources.
−Removed: As a result, the Company’s financial results are reported in a single segment for the year ended December 31, 2022.
−Removed: During November 2022, the Company entered into a new segment, water treatment, through its acquisition of ATEC (see Note 3 –
−Removed: “Acquisitions”). 
−Removed: No segment information for ATEC is separately presented as the impact of ATEC was not material to the Consolidated Statements of Operations for the periods presented.
−Removed: NOTE 12 –
−Removed: COMMITMENTS AND CONTINGENCIES
+Added: 589,077 $ 4.80
+Added: As of December 31, 2023, the Company had approximately $ 315 thousand of unrecognized stock compensation expense related to nonvested PSUs and RSUs.
+Added: NOTE 12 – 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 are no pending claims with respect to hazardous materials.
−Removed: Pursuant to cost-sharing agreements that have been entered into by participants in the Company’s Water Project, $ 750,000 in funds have been received in order to offset costs incurred in the environmental analysis of the Water Project.
+Added: Pursuant to cost-sharing agreements that have been entered into by participants in the Company’s Water Project, $ 625,000 in funds have been received in order to offset costs incurred in the environmental analysis of the Water Project.
These funds may either be reimbursed or credited to participants participation in the Water Project and, accordingly, are fully reflected as deferred revenue as of December 31, 2023 and December 31, 2022.
+Added: Notes To The Consolidated Financial Statements
The Company recorded a contingent consideration liability in the amount of $ 1.45 million related to the purchase price of the ATEC Acquisition for amounts payable upon the sale of a requisite number of water filtration units under an asset purchase agreement.
1 unchanged sentence
At this time, the Company is not 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.
−Removed: 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.
−Removed: NOTE 13 –
+Added: 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.
+Added: NOTE 13 – LEASES
The Company has operating leases for its corporate offices and office equipment.
−Removed: The Company’s leases have remaining lease terms of 1 month to 46 months as of December 31, 2022, some of which include options to extend or terminate the lease.
+Added: The Company’s leases have remaining lease terms of 1 month to 34 months as of December 31, 2023, some of which include options to extend or terminate the lease.
However, the Company is not reasonably certain to exercise options to renew or terminate, and therefore renewal and termination options are not included in the lease term.
−Removed: The Company’s current lease arrangements expire in the fourth quarter of 2024.
−Removed: The Company has removed $3.3 million of right-of-use assets and liabilities related to the Bureau of Land Management (“BLM”) rights-of-way leases due to a court ruling in September 2022 which vacated the rights-of-way and returned them to the BLM.
−Removed: The Company will reapply for the rights-of-way and work with the BLM on any additional environmental review required to authorize the conveyance of water in the Northern Pipeline over BLM lands.
−Removed: The Company does not have any finance leases.
−Removed: Notes To The Consolidated Financial Statements
−Removed: The Company’s lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances.
+Added: The Company’s lease population does not include any residual value guarantees, and therefore none were considered in the calculation of the lease balances.
The Company has leases with variable payments, most commonly in the form of common area maintenance charges which are based on actual costs incurred.
These variable payments were excluded from the right-of-use asset and lease liability balances since they are not fixed or in-substance fixed payments.
−Removed: The Company elected to utilize the practical expedients permitted within the leasing standard, including the practical expedient not to reassess existing land easements, which among other things, allows the Company to carryforward the historical lease classification.
+Added: The Company elected to utilize the practical expedients permitted within the leasing standard, including the practical expedient not to reassess existing land easements, which among other things, allows the Company to carryforward the historical lease classification.
The Company has lease agreements with lease and non-lease components and has elected the practical expedient to account for lease and non-lease components as a single lease component for real-estate class of leases only.
4 unchanged sentences
Amounts recognized in the accompanying consolidated balance sheet as of December 31, 2023 and 2022 are as follows (in thousands):
+Added: Notes To The Consolidated Financial Statements
As of December 31, 2023
6 unchanged sentences
Balance Sheet Location
−Removed: $ 3,281  
Short-term lease liability
2 unchanged sentences
Other long-term liabilities
−Removed: $ 3,257  
−Removed: The Company’s operating lease cost for the year ended December 31, 2022 was $ 29 thousand.
+Added: The Company’s operating lease cost for the year ended December 31, 2023 was $ 180 thousand.
Lease commitments.
−Removed: The table below summarizes the Company’s scheduled future minimum lease payments under operating, recorded on the balance sheet as of December 31, 2022 ( in thousands):
−Removed: Notes To The Consolidated Financial Statements
+Added: The table below summarizes the Company’s scheduled future minimum lease payments under operating, recorded on the balance sheet as of December 31, 2023 ( in thousands):
Total lease payments
3 unchanged sentences
Long-term lease obligations
−Removed: Most of the Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to us from its lessors.
+Added: Most of the Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to us from its lessors.
Instead, the Company estimates its incremental borrowing rate based on information available at either the implementation date of Topic 842 or at lease commencement for leases entered into thereafter in order to discount lease payments to present value.
−Removed: The table below presents additional information related to the Company’s leases as of December 31, 2022:
+Added: The table below presents additional information related to the Company’s leases as of December 31, 2023:
Weighted Average Remaining Lease Term
−Removed: Operating leases (years)
+Added: Operating leases (in years)
Weighted Average Discount Rate
Operating leases
−Removed: 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”).
+Added: 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 a one -time payment of $ 12.0 million upon closing.
The Company expects to record rental income of $ 420 thousand annually over the next five years related to the FVF Lease Agreement.
−Removed: NOTE 14 –
−Removed: FAIR VALUE MEASUREMENTS
−Removed: Fair values determined by Level 
−Removed: 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.
−Removed: The Company considers a security that trades at least weekly to have an active market.
−Removed: Fair values determined by Level 
−Removed: 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves.
−Removed: Fair values determined by Level 
−Removed: 3 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.
−Removed: On March 24, 2021, the Company entered into an agreement which provided it the right, at its option, to further extend the maturity date of its Prior Senior Secured Debt to November 2022.
−Removed: The fee to acquire this second extension option was the adjustment of the exercise price of 362,500 warrants to purchase the Company’s common stock held by Apollo from $ 6.75 to $ 0.01 (“Warrant Modification”).
Notes To The Consolidated Financial Statements
−Removed: As a result of the Warrant Modification, the Company reclassified the carrying value of the warrant prior to the modification from a warrant liability in the amount of $ 1.3 million to additional paid-in capital.
−Removed: In addition, the Company recorded debt issuance costs in the amount of $ 1.9 million, which was the increase in fair value of the warrant at the time of the modification, with a corresponding adjustment to additional paid-in capital.
−Removed: Prior to the Warrant Modification, the fair value of the warrant was remeasured each reporting period using an option pricing model, and the change in fair value was recorded as an adjustment to the recorded warrant liability with the unrealized gains or losses reflected in interest expense.
−Removed: During the year ended December 31, 2021, the Company recognized an unrealized gain of $ 573 thousand related to the remeasurement of the warrant derivative liability at fair value prior to the Warrant Modification.
−Removed:          
−Removed: The Company recorded a contingent consideration liability in the amount of $ 1.45 million related to the purchase price of the ATEC Acquisition for amounts payable upon the sale of a requisite number of water filtration units under an asset purchase agreement.
−Removed: The following table presents a reconciliation of Level 3 activity for the years ended December 31, 2021 and 2022:
−Removed: (in thousands)  
+Added: NOTE 14 – FAIR VALUE MEASUREMENTS
+Added: Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.
+Added: The Company considers a security that trades at least weekly to have an active market.
+Added: Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates and yield curves.
+Added: Fair values determined by Level 3 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.
+Added: In 2022, the Company recorded a contingent consideration liability in the amount of $ 1.45 million related to the purchase price of the ATEC Acquisition for amounts payable upon the sale of a requisite number of water filtration units under an asset purchase agreement.
+Added: (in thousands)
+Added: Level 1 Assets
+Added: Balance at December 31, 2022
+Added: Investments in Certificates of Deposit
+Added: Balance at December 31, 2023
+Added: (in thousands)
Level 3 Liabilities
−Removed: Balance at January 1, 2021
−Removed: $ 1,847  
−Removed: Unrealized gains on warrants, net
−Removed: Reclassification of warrant liability to additional paid in capital upon Warrant Modification
−Removed: ( 1,274  
Balance at December 31, 2022
−Removed: Contingent consideration liabilities
+Added: Derivative liabilities
+Added: Unrealized losses on derivative liabilities, net
+Added: Reclassification of derivative liabilities to additional paid-in capital
Balance at December 31, 2023
−Removed: $ 1,450  
−Removed: NOTE 15 –
−Removed: SUBSEQUENT EVENTS
−Removed: On January 30, 2023, the Company completed the sale and issuance of 10,500,000 shares of the Company’s common stock to certain institutional investors in a registered direct offering ( “January 2023 Direct Offering”).
−Removed: The shares of common stock were sold at a purchase price of $ 3.84 per share, for aggregate gross proceeds of $ 40.32 million and aggregate net proceeds of approximately $ 38.5 million.
−Removed: A portion of the proceeds were used to repay the Company’s debt in the principal amount of $ 15 million, together with fees and interest required to be paid in connection with such repayment under the Credit Agreement.
−Removed: The remaining proceeds will be used for capital expenditures to accelerate development of the Company’s water supply project, working capital and development of additional water resources to meet increased demand on an accelerated timetable.
+Added: Investments at Fair Value as of December 31, 2023
+Added: (in thousands)
+Added: Certificates of Deposit
+Added: $ 3,000 $ - $ - $ 3,000
+Added: $ 3,000 $ - $ - $ 3,000
+Added: Contingent consideration liabilities
+Added: $ - $ - $ 1,450 $ 1,450
+Added: Total Liabilities
+Added: $ - $ - $ 1,450 $ 1,450
Notes To The Consolidated Financial Statements
−Removed: On February 2, 2023, the Company and its wholly-owned subsidiary, Cadiz Real Estate LLC, as borrowers (collectively, the “Borrowers”) entered into a First Amendment to Credit Agreement with BRF Finance Co., LLC and B.
−Removed: Riley Securities, Inc., as administrative agent, to amend certain provisions of the Credit Agreement dated as of July 2, 2021 ( “First Amended Credit Agreement), Under the First Amended Credit Agreement, the lenders will 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”).
−Removed: The lenders’
−Removed: right to convert is conditioned upon the Company obtaining stockholder approval of an amendment to its certificate of incorporation to increase the number of authorized shares of the Company at its next annual meeting of stockholders, expected to be held in June 2023 ( “Stockholder Approval”).
−Removed: In addition, prior to the maturity of the Credit Agreement, the Company will have the right to require that the lenders convert the outstanding principal amount, plus any PIK Interest and accrued and unpaid interest, of the Convertible Loan if the following conditions are met:
−Removed: (i) the average VWAP of the Company’s common stock on The Nasdaq Stock Market, or such other national securities exchange on which the shares of common stock are listed for trading, over 30 consecutive trading dates exceeds 115 % of the then Conversion Price, (ii) a registration statement registering the resale of the shares issuable upon conversion of the Convertible Loan has been declared effective by the Securities and Exchange Commission, (iii) the Stockholder Approval has been obtained, and (iv) there is no event of default under certain provisions of the Credit Agreement.
−Removed: Under the First Amended Credit Agreement, the maturity date of the Credit Agreement has been extended from July 2, 2024 to June 30, 2025.
−Removed: Upon obtaining the Stock Approval and so long as there is no event of default under certain provisions of the Credit Agreement, the maturity date for the Credit Agreement will automatically be extended to June 30, 2026.
−Removed: The annual interest rate will remain unchanged at 7.00 %.
−Removed: Interest on $ 20 million of the principal amount will be paid in cash.
−Removed: Interest on the $ 15 million principal amount of the Convertible Loan will be paid in kind on a quarterly basis by addition such amount to the outstanding principal amount of the outstanding Convertible Loan.
+Added: NOTE 15 – SUBSEQUENT EVENTS
+Added: 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 $ Fund 2012 (“Heerema”).
+Added: Before entering into the Third Amended Credit Agreement, Heerema purchased the outstanding secured non-convertible term loans under the Credit Agreement (“Assignment”).
+Added: 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 our common stock (valued at $ 2.89 per share, or 166,036 shares), which will be registered pursuant to a shelf registration statement on Form S- 3 and a prospectus supplement thereunder.
+Added: 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”);
+Added: (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;
+Added: (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;
+Added: and (d) extension of the maturity date for the existing Convertible Loan and non-convertible loans to June 30, 2027.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.