CADIZ INC 10-K

ITEM 1. Business Business Overview We are a water solutions provider with a unique combination of land, water, pipeline and water filtration assets located in Southern California between major water systems serving population centers in the Southwestern United States. Our portfolio of assets includes 2.5 million acre-feet of permitted water supply, 1 million acre-feet of groundwater storage capacity, 220 miles of existing, underground pipeline, 43 miles of right-of-way entitlements for pipeline construction, and versatile, scalable and cost-effective water filtration technology that removes contaminants and constituents of concern from groundwater. Our customers are public and private water systems, government agencies and commercial businesses. We own approximately 46,000 acres of land with high-quality, naturally recharging groundwater resources in Southern California’s Mojave Desert (“Cadiz Property”). Our land holdings with vested water rights were assembled by our founders in the early 1980s, relying on NASA imagery that identified a desert aquifer system beneath a vast 2,000 square mile Southern California watershed. The aquifer system underlying the watershed is estimated to hold 30 - 50 million acre-feet of groundwater in storage, comparable in size to the capacity of the largest reservoir in the United States - Lake Mead. Since the late 1980s, we have farmed at our contiguous property at the base of the watershed (“Cadiz Ranch”) relying on groundwater for irrigation. In 2008, we entered into a 99-year lease with the Arizona & California Railroad Company (“ARZC”) to co-locate and construct a water conveyance pipeline system (“Southern Pipeline”) within ARZC’s existing, active railroad right-of-way (“ROW”) that extends 43-miles from the Cadiz Ranch to the Colorado River Aqueduct (“CRA”), one of Southern California’s primary sources of water supply, allowing water supply to be moved between the Cadiz Ranch and the CRA for off property beneficial uses. 1 Cadiz Inc. In 2012, we received permits and entitlements from public agencies for our groundwater storage project (the “Mojave Groundwater Bank”), which will (1) conserve 2.5 million acre-feet of water from the aquifer system over a 50-year period (average of 50,000 acre-feet per year) for off-property beneficial uses in underserved California communities and (2) store up to 1 million acre-feet of imported water in the aquifer system. The permits were challenged in Court and were upheld and sustained in their entirety by judgements in California Superior Court in 2014 and the California Court of Appeal in 2016. In 2021, we completed the acquisition of a 30” steel natural gas pipeline (“Northern Pipeline”) that extends 220-miles from the Cadiz Ranch across Kern and San Bernardino Counties terminating in California’s Central Valley. The pipeline, originally constructed to transport fossil fuels, is idle, and we are preparing to convert the pipeline to transport water. The route of the Northern Pipeline intersects several water conveyance facilities that serve Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. In 2022, we completed the acquisition of the assets of ATEC Systems, Inc., a producer of specialized filtration systems for removal of common groundwater contaminants that pose health risks in drinking water, including iron, manganese, arsenic, nitrates, Chromium 6 and other constituents of concern. In 2024, we entered into agreements with multiple public water systems for their purchase of 21,275 acre-feet per year (“AFY”) of annual water supply from the Mojave Groundwater Bank to be delivered via the Northern Pipeline. These agreements cumulatively represent approximately 85% of the full capacity (25,000 AFY) of the Northern Pipeline. To finance the estimated $800 million capital cost to bring the Northern Pipeline, Southern Pipeline and related facilities online to provide supply and storage to public water systems, in December 2024, we established a new business entity, Mojave Groundwater Storage Company LLC (“MGSC”) for public and private investors to take an ownership interest in the facility assets in exchange for equity capital to fund construction. As of March 2025, we have entered into letters of intent and a letter of agreement with potential MGSC investors for up to $425 million. The letters of intent and letter of agreement are non-binding and subject to on-going due diligence. The Water Industry Value Chain The water industry value chain today includes water supply, water storage, wastewater treatment, long-range conveyance, local distribution systems, and a wide range of products, technologies and services for monitoring, moving, trading, treating and integrating water resources across thousands of miles to address the challenges and demands of a diverse customer base. The water industry customer base includes regional wholesale water agencies responsible for acquiring, distributing and managing imported water resources; water and wastewater utilities that supply, treat and monitor clean water or transport, treat and analyze wastewater or storm water through an infrastructure network; government agencies responsible for public safety, environmental protection and economic security; and commercial and industrial customers requiring long-term, reliable supplies of clean, affordable water for their customers and businesses. 2 Cadiz Inc. Climate change has disrupted hydrological cycles around the world. Extreme weather has created extreme unpredictability with regard to water supply for human consumption. Increasingly frequent and intense storms and swings between wet and dry years have created an urgent demand for technologies, services and infrastructure investment to capture, store and transport fresh water. Moreover, violent weather, extreme flooding and increasingly stringent regulatory restrictions on water quality have exceeded the capacity of existing water infrastructure and increased the cost of water over the last decade. Water industry customers today require products, services, technology, and integrated solutions that address the challenges of scarcity of freshwater supplies, rising pollution, stricter regulations, infrastructure limitations and increasing operational costs. Business Strategy Our diversified portfolio of related water assets enables us to offer products and services to public water systems and other water industry customers in an integrated manner to meet the growing need for reliable access to clean water. Description of Assets Assets in our portfolio include Land, Water Supply, Water Storage, Water Conveyance, and Water Filtration Technology. Our land assets support agricultural development that currently provides operating revenue to us. Our water filtration technology business also currently provides us with revenue. Our water supply, water storage, and water conveyance assets are being developed for use and do not yet provide us with revenue. All development activities related to the water, supply, storage and conveyance assets are reflected in our land and water resources segment. The development process and revenue model for our assets is described below. Land The Cadiz Property includes 46,000 acres of landholdings consisting of: ● 9,600 acres of land permitted for agriculture; ● 9,600 acres of land adjacent to the existing permit area that could be used for future agricultural development but which are not yet permitted; and ● 26,800 acres of rangeland some of which is considered sensitive habitat for Desert Tortoise and other wildlife. The land is underlain with high quality, groundwater resources capable of supporting a variety of surface activities including agriculture, renewable energy, and water supply and storage banking. Since the 1980s, we have developed the land for our agricultural use and we either farm the property directly or via leases to private farming operators. We currently farm approximately 1,000 acres of grain crops, primarily in alfalfa plantings, and have leased 2,100 acres for farming activities by Fenner Valley Farms LLC. 3 Cadiz Inc. In 2024, we entered into a lease agreement with RIC Energy to build a hydrogen production facility at the Cadiz Ranch. Under the agreement, RIC will consider the development of a solar powered green hydrogen production facility on up to 3,000 acres of land at the Cadiz Ranch. In the current development phase, RIC will make payments of $35,000 per year. Upon approval of construction, lease payments will increase to $1,000 per acre. RIC will also purchase water from us for $850 per AF, subject to annual inflation adjustments. The surplus energy supply available at the facility will be made available for Mojave Groundwater Bank facilities. Water Supply In 2012, we received approval from the County of San Bernardino to conserve an average of 50,000 acre-feet per year from the aquifer system at the Cadiz Ranch for 50 years (2.5 million acre-feet in total) and make this new water supply available off-property to underserved communities in Southern California. One acre-foot is approximately 326,000 gallons or enough water to serve two average households of four people for 1 year. Under the extensive groundwater monitoring plan approved by the County and local permitting authorities, Mojave Groundwater Bank operations and withdrawals of groundwater are limited to sustainable amounts that preserve the health of the aquifer system and safeguard the desert ecosystem. Because water in the aquifer system would otherwise be lost to evaporation, surplus water that is captured and withdrawn for beneficial uses before it evaporates is recognized as a new water supply (i.e. “conserved” water). In 2024, we entered into agreements with multiple water providers for the purchase of a total of 21,275 AFY of annual water supply to be delivered via the Northern Pipeline. These agreements cumulatively represent approximately 85% of the full capacity (25,000 AFY) of the Northern Pipeline. We are in discussions with several parties interested in contracting for the remaining capacity of the Northern Pipeline and the supply available for delivery via the Southern Pipeline (25,000 AFY). Under our water supply agreements, it is anticipated that we will contribute an annual supply of 50,000 AFY of water into Fenner Gap Mutual Water Company ("FGMWC"), a mutual water company that we presently manage that will ultimately be jointly owned by all participating public water agencies that have acquired water supply from the Mojave Groundwater Bank. Through membership in the mutual water company, public water agencies will purchase, for up to a 50-year term (take on delivery), their share of the 50,000 AFY of water at our wellhead at an agreed upon market price estimated to net approximately $850/AFY in 2024 dollars to us subject to annual inflation adjustment, after payment of a pro rata portion of capital costs for construction of all facilities of the Mojave Groundwater Bank project, wheeling fees and O&M costs. The “as delivered price” to participating water providers is estimated to start at between $1,650 - $1,950/AF per year. Any contracts and off take facility construction are subject to environmental review and permitting (see “Permits”, below). Water Storage In addition to making available new water supply, the Mojave Groundwater Bank can also offer storage in our aquifer system for up to one-million acre-feet of fresh water that would be imported and held until needed in future dry years. The total storage capacity of the aquifer system is larger than Southern California’s largest surface reservoir, Diamond Valley Lake, but unlike a surface reservoir would not suffer evaporative losses. 4 Cadiz Inc. Similar to the contracts for supply discussed above, water providers and entities with access to surplus water would contract for reserved storage capacity in our aquifer system through FGMWC. Such storage capacity could be used to store water purchases from our water supply or could be used for imported water (once sufficient conveyance infrastructure is available). The estimated market price for storage capacity reservations is $1,500/AF. Agencies with water supply contracts are also expected to pay annual maintenance fees up to approximately $25 per AF subject to annual inflation adjustments. Water Conveyance Water conveyance facilities are required to effectuate the sale of water supply and water storage. These water conveyance facilities must be the appropriate size and in the right locations to meet customer needs. We have invested in physical pipeline assets and the acquisition of rights-of-way to build water conveyance facilities that can transport our own water supplies and also be utilized by public water systems across California to trade and transport water supplies. To deliver conserved water off-property or import water for storage at the Cadiz Ranch, we are currently developing two potential pipeline routes for the Mojave Groundwater Bank - the Southern Pipeline which would extend southwards from the Cadiz Property to the Colorado River Aqueduct in Rice, California and the Northern Pipeline, which extends northwards from the Cadiz Property to Barstow, Antelope Valley, and Wheeler Ridge, California. Our Northern Pipeline intersects several water storage and conveyance facilities in Southern California, including the California Aqueduct, the Los Angeles Aqueduct, and the Mojave River Pipeline. The Northern Pipeline offers California water purveyors an opportunity to connect available supplies to underserved regions of the State and directly augment water supply access for 23 state-designated disadvantaged communities along its route. The capacity of the Northern Pipeline for water conveyance is 25,000 AFY. The capacity of the Southern Pipeline, which is expected to be constructed within the ARZC ROW, is anticipated to be 150,000 AFY depending on the final pipeline design to accommodate imported water storage. In November 2024, we entered into an option agreement for the purchase of 180 miles of existing 36” steel pipe that was constructed but never installed as a petroleum products pipeline. We currently anticipate using this pipe in our Southern and Northern Pipeline conveyance systems. We made an initial payment of $5 million for an exclusive 3-year option to purchase all or part of the pipeline assets at $155 per linear foot, with certain rights to credit the initial payment against final purchase. The pipe is presently stored in South Dakota and transportation fees to the Cadiz Ranch are included in the current price per linear foot. When the Northern Pipeline becomes operational for water conveyance, and the Southern Pipeline is built, the Mojave Groundwater Bank would interconnect Southern California’s primary water delivery systems for the first time, enabling more flexible trading among participants on these systems. See also “Permits”, below, for details about the history and future requirements for local, state and federal permits for these pipelines. 5 Cadiz Inc. We estimate that it will cost approximately $800 million to construct all required facilities to complete the Mojave Groundwater Bank, including conversion of the Northern Pipeline to water conveyance and construction of the Southern Pipeline, the wellfield and power facilities. We established MGSC to fund these capital costs in partnership with public sector, tribal and other investors that we expect will contribute up to $401 million equity capital into MGSC in exchange for ownership of the pipeline facilities and a 51% share of the long-term cash flows from the groundwater banking and storage operations. We anticipate serving as the managing member of MGSC. We expect to coordinate with the investors to seek available grant funding and/or other financing alternatives including potential bond issuances through a to-be-formed financing Joint Powers Authority for the remaining construction costs. Upon closing of definitive agreements, we would contribute our pipeline infrastructure assets, including the Northern Pipeline and the Southern Pipeline right-of-way, and an expected 51% share of the long-term cash flows from the groundwater banking and storage operations, to MGSC in exchange for the equity capital funding. In consideration of our transfer of assets, MGSC is expected to pay us approximately $51 million among other considerations and we would retain 49% of the water storage rights. Water supply net revenues are not expected to be contributed to MGSC or shared with MGSC investors. We will hold a minority interest in MGSC as managing member and receive a share of the LLC profits from storage and banking operation above specified returns to MGSC investors. As of March 2025, we have entered into letters of intent and a letter of agreement with potential MGSC investors for up to $425 million of equity investments. The letters of intent and letter of agreement are non-binding and subject to on-going due diligence. MGSC is expected to lease the facility assets to Fenner Valley Water Authority, a Joint Powers Authority (“FVWA” or “JPA”) comprised of public water agencies participating in the Mojave Groundwater Bank project to operate the facilities and the groundwater management plan with the FGMWC. Permits The value of our assets and the anticipated revenues from water supply, water storage contracts and profit sharing with MGSC is supported by several permits and entitlements secured by the Company and our partners over the last 25 years. Water Supply and Water Storage From 2010 – 2012, we completed a California Environmental Quality Act (“CEQA”) review process including the approval of a comprehensive Final Environmental Impact Report (“FEIR”) for the conservation of 2.5 million acre-feet of water from the aquifer system over a 50-year period (50,000 AFY for 50 years) and the storage and banking of up to one million acre-feet of water in the aquifer system at the Cadiz Property which is now called the Mojave Groundwater Bank. The FEIR concluded that operations, would not cause any significant adverse environmental impacts. The FEIR was certified on July 31, 2012, by Santa Margarita Water District (“SMWD”), the lead participating water agency. 6 Cadiz Inc. San Bernardino County, the local agency responsible for groundwater use at the Cadiz Property, also approved a Groundwater Monitoring, Management and Mitigation Plan (‘GMMMP”) for the project in 2012 that requires regular reporting of groundwater levels and conditions. The FEIR and GMMMP permits were challenged through litigation and were upheld and sustained in their entirety by judgements in California Superior Court in 2014 and the California Court of Appeal in 2016 and are no longer subject to legal challenge. In August 2019, an Addendum to the FEIR was adopted to address updates to the project proposal, including a water treatment program and changes to the pipeline route. The Addendum also assessed new studies published about natural springs in the surrounding watershed at the project area. The Addendum concluded that there are no significant adverse impacts associated with the minor changes to the project and further summarized that the spring studies did not change the conclusions of the FEIR’s analysis. The Addendum was not challenged in court and the statute of limitations to challenge has expired. While the FEIR and GMMMP approvals analyzed imported storage and provided programmatic assessment of this component of the project, additional project level environmental study will be required prior to utilizing the project facilities for storage of imported surplus water. We expect to begin the required studies in 2025. Hydrological and geological study of the area has continued, and we regularly monitor and report groundwater conditions to the County of San Bernardino as part of our agricultural use. The County of San Bernardino and SMWD through FVWA established an inter-agency Technical Review Panel (“TRP”) mandated by the GMMMP approvals to provide scientific and environmental monitoring of the project area. The TRP meets regularly to collect and assess pre-operational data and make recommendations for monitoring protocols to be implemented upon commencement of operations. Northern Pipeline The 220-mile Northern Pipeline is a former segment of a 1,200 mile, 30” steel pipeline constructed in 1985 by All American Pipeline Company to convey oil. In 2001, the pipeline was acquired by El Paso Natural Gas (“EPNG”) and authorized for natural gas conveyance. In 2011, we entered into an option agreement with EPNG to explore using the pipeline segment for water conveyance. In June 2021, we completed the acquisition of the pipeline for $19 million and presently own the entire 220-mile asset in fee. Changing the use of the Northern Pipeline to water conveyance is subject to applicable local, state and federal laws. In December 2023, after a public review process, the US Bureau of Land Management and the US Air Force assigned to our subsidiary Cadiz Real Estate LLC EPNG’s existing right-of-way for federal lands crossed by the Northern Pipeline authorizing continued maintenance as an idle natural gas pipeline. The right-of-way was not challenged in court and the statute of limitations to challenge has expired. 7 Cadiz Inc. Prior to operating the Northern Pipeline for water conveyance, we will need to process change of use authorizations from the BLM, the California State Lands Commission and the US Air Force. We expect to process these construction permits in coordination with our public agency partners in 2025. Southern Pipeline In 2008, we entered into a 99-year lease agreement with the ARZC to utilize a portion of its existing ROW southwest from the Cadiz Property to the Colorado River Aqueduct for a conveyance pipeline and related facilities. As part of the lease arrangement, we agreed to provide necessary railroad improvements in furtherance of railroad purposes. This includes providing water and power to the railroad for fire protection and improving access roads and transloading operations, among other things. By co-locating the conveyance pipeline within this existing railroad ROW, pipeline construction would avoid impacts to desert habitats. The route and construction within the railroad ROW were evaluated and approved during the CEQA permitting process in 2012. Our proposed co-location in the ROW was also separately assessed by the BLM to determine the need for any federal permitting related to the proposed use of the ARZC railroad ROW, which is a federal ROW originally granted to the railroad in accordance with the General Railroad Right-of-Way Act of 1875 (“1875 Act”). BLM’s evaluation, which was issued in February 2020, concluded that the proposed Southern Pipeline will further railroad purposes at least in part, is within the scope of the ROW, and requires no additional BLM approvals. In February 2022, the US Department of the Interior’s Solicitor Office issued a new legal opinion regarding third party use of 1875 Act ROWs that preserved the railroad purposes assessment for third party uses. The opinion was not specific to any railroad and did not alter our 2020 evaluation. To deliver water from the Mojave Groundwater Bank to any participating agencies via the Southern Pipeline, the operating parties will require (i) an agreement with Metropolitan Water District of Southern California (“MWD”) to move water supplies from the Mojave Groundwater Bank in the CRA; and (ii) a finding by the California State Lands Commission (“SLC”) that conveying water from Cadiz Ranch in the CRA will not adversely affect the desert environment in accordance with California Water Code Section 1815, which requires desert groundwater projects to apply for a review by the SLC prior to moving water in public conveyance facilities like the CRA. These approvals will be bound by the existing CEQA record of review, study, and approvals. Water Filtration Technology In the fourth quarter of 2022, we completed the acquisition of the assets of ATEC Systems, Inc. into ATEC Water Systems, LLC (“ATEC”), which provides innovative water filtration solutions for impaired or contaminated groundwater sources. Adding the ATEC filtration products to our business portfolio diversifies our range of innovative, sustainable clean water solutions offered in support of our mission to provide safe, affordable drinking water to underserved communities. ATEC, based in Hollister, California, has produced water filtration systems since 1982. It pioneered technology to provide cost-effective high-rate removal of iron and manganese and then expanded its reach to a full range of contaminants, including, arsenic, Chromium-6, nitrates, PFAS and other contaminants found in groundwater that limit the available supply of drinking water for many communities. We have three U.S. patent applications pending for our treatment processes and filter design. 8 Cadiz Inc. We manufacture and sell an array of small, modular vertical steel tanks ranging from 14-inch to 48-inch in diameter coupled with filter media to remove groundwater contaminants for our customers. ATEC’s modular, vertical tank systems can be scaled in size to serve small, rural communities as well as larger municipalities with system treatment capacities up to 60 million gallons per day (MGD) and require less maintenance and upkeep than traditional filtration systems. Our customers include municipalities, public and private utilities, and engineering and construction firms constructing new plants. ATEC has built more than 450 water filtration systems for cities, water districts, investor-owned utilities and small communities and businesses in 10 U.S. states, as well as Canada and Sri Lanka. Since our acquisition of the business, ATEC has experienced a significant increase in demand and signed more than two dozen sales contracts in the last 24 months, ranging in size from $50,000 to $9 million, mostly for iron, manganese, arsenic and Chromium 6. Of the nearly 30 contracts ATEC bid on over the period, it only lost one award. ATEC achieved tremendous year over year growth in 2024, with $7.9 million in gross revenue in 2024, compared to $0.7 million in 2023. ATEC recently signed an agreement to partner in the delivery of cost -effective PFAS treatment. In 2025, ATEC is expected to further expand its reach in the PFAS treatment market as it continues to develop its relationships in its traditional iron and manganese treatment market. Equity, Sustainability and Environmental Justice Water insecurity is one of the most pressing challenges of the 21st century, driven primarily by population growth and the impacts of climate change creating an imbalance in supply and demand around the world. We recognize the dual role of our land and water assets as a valuable investment and a crucial solution to the growing issue of water scarcity. Our vision is a world where wealth and geography do not dictate access to clean, fresh, affordable water. We have made a commitment to delivering clean, reliable, and affordable water to marginalized and disadvantaged communities through innovative and sustainable approaches. The following is a list of highlights of our programs to achieve these objectives: 1. Water for disadvantaged communities. We have committed to make available clean affordable water supply from the Cadiz Property to rural, underserved, tribal and disadvantaged communities that lack reliable access to California’s traditional sources of water supply. To date, we have committed to make available more than 250,000 AF of water supply to serve disadvantaged communities in the Coachella Valley and California’s High Desert communities. Additionally, all public agency participants with agreements to contract for water from the Mojave Groundwater Bank must serve at least one disadvantaged community within their service area. 2. Ownership of Water Infrastructure by Native American Tribes. Tribal nations have disproportionally been underserved by water agencies and infrastructure needed to reliably deliver safe clean water. We are partnering with native American Tribes to finance Construction of our Mojave Groundwater Bank facilities with Tribes and will provide to these partners lasting ownership of a portion of the largest groundwater bank in the Southwest. This will be the first major water infrastructure project majority-owned by Native American tribes in U.S. history. 9 Cadiz Inc. 3. Improve local water quality. Utilizing our ATEC filtration systems, we can improve water quality in communities affected by contaminated groundwater. In 2024, we donated ATEC filtration systems to communities in the Coachella Valley affected by high levels of arsenic. Approximately $2.7 million has been invested in mobile home communities at the Torres Martinez tribal reservation to provide residential well treatment systems at homes relying on well water. In addition, the high-quality groundwater from the Cadiz Ranch can benefit the Colorado River Aqueduct system delivering water throughout Southern California. Our groundwater is much lower in total dissolved solids than water in the CRA, reducing treatment needs for public water systems in Southern California by millions of dollars. 4. Repurposing carbon contributing assets. The use of the Northern Pipeline for water conveyance will convert a former oil and gas pipeline for the beneficial use of water conveyance. The recycling of this existing pipeline will reduce greenhouse gas emissions and reduce the energy load on the state’s current water transportation sources. 5. Creation of new renewable energy. Our Southern Pipeline will feature in-line turbines that will generate renewable hydropower. The project wellfield and pump stations are expected to be powered at least in part by renewable energy and natural gas. In 2024, we started the process of converting our diesel operated agricultural wells to natural gas to reduce emissions. 6. Protection of habitats. All Mojave Groundwater Bank facilities will be built on disturbed lands or within existing transportation corridors to avoid any impacts on habitats. Approximately 7,400 acres of our 46,000 acres of landholdings are permanently dedicated to conservation. as the Fenner Valley Desert Tortoise Conservation Bank (“Fenner Bank”), a land conservation bank that makes available these properties for mitigation of impacts to tortoise and other sensitive species. Credits sold by the Fenner Bank are dedicated to funding the permanent preservation of the land by the San Diego Habitat Conservancy and research by San Diego Zoo Global into desert tortoise health and species protection. 7. Support stable water rates. Water supply from the Mojave Groundwater Bank is expected to be among the lowest cost supplemental water supply available in the region when compared to other supplemental water supply programs such as desalination, recycling, stormwater capture and surface storage. We have also entered into agreements with public water agencies that serve disadvantaged communities to supply water from the Mojave Groundwater Bank at reduced cost. 8. Create and support good-paying jobs. The Mojave Groundwater Bank is expected to create and support nearly 6,000 jobs across the local economy during two phases of construction; 10% of jobs are reserved for veterans. We maintain a Project Labor Agreement with building trades and labor unions to pay our workforce prevailing wage and employ union members during construction of the Mojave Groundwater Bank facilities. 10 Cadiz Inc. Seasonality Our water resource development and water filtration activities are not seasonal in nature. Farming operations at the Cadiz Ranch include the year-round cultivation of grain crops, including alfalfa. These operations are subject to general seasonal trends that are characteristic of the agricultural industry. Competition We face competition in the acquisition, development and sale of water and land assets from a variety of parties. We also experience competition in the market for our water supply, storage and conveyance solutions and agriculture products associated with our water and land assets. Since California has scarce water resources and an increasing demand for available water, we believe that location, price and reliability of delivery are the principal competitive factors affecting agriculture and the demand for water supply and storage in California. We believe the Cadiz Ranch and Mojave Groundwater Bank projects are competitive with other sources of water and farmland. In the groundwater treatment market, we compete with companies that offer products similar to ours. Some of these companies have greater financial resources, operational experience, and technical capabilities than we do. When bidding for groundwater treatment projects, however, our current experience suggests that the market opportunity is very large, our products and services are highly competitively, and there is no clear dominant or preferred competitor in the markets in which we compete. Human Capital Resources As of December 31, 2024, we employed 25 full-time employees (i.e. those individuals working more than 1,000 hours per year) including 16 full-time employees at ATEC. Our business operations also rely on third-party contracted seasonal and temporary workers, as well as consultants and other professional vendors to help augment specialized human capital and talent needs. Our full-time and third-party contracted workers, as well as consultants and vendors, must follow our code of conduct and ethics policy, as well as our whistleblower and information security policies. We appreciate the importance of retention, growth and development of our employees. The average tenure of our full-time employees is approximately 6 years, reflecting our positive work environment that offers opportunities to develop new skills and advance to new positions. We believe we offer competitive compensation (including salary, incentive bonus, and equity) and benefits packages to our employees, including a 401(k) plan. Further, we urge professional development opportunities and mentorship to cultivate talent throughout our company. As a small workforce, we focus on skill sharing and experience diversity in the workplace. Our full-time employees have regular opportunities to work with senior leadership and/or Board members in pursuit of business objectives. Management and Board leadership provide annual reviews of employee performance. Human capital is generally managed by our CEO and CFO, and employment policies are overseen by the Board, particularly the Compensation Committee. Our Board encourages diversity in the workforce. Approximately 55% of our senior executives are female. 11 Cadiz Inc. We are focused on executing on our objectives of implementing our projects and realizing the cash flow potential of our assets, while also evaluating opportunities to ensure our workforce reflects the diversity of the communities in which we operate. Regulation Our operations are subject to various federal, state and local laws and regulations, as detailed throughout Item 1. In the normal course of developing our land, water and infrastructure assets, we are required to demonstrate to various regulatory authorities that we are in compliance with the laws, regulations and policies enforced by such authorities. Groundwater use and development, and the import and export of groundwater and surface supplies by public water agencies via conveyance pipelines, is subject to regulation by local, state and federal existing statutes pertaining to water supply and land use, but also general environmental statutes applicable to all forms of development. We have successfully obtained several approvals and permits from local, state and federal regulatory authorities with respect to our water supply, water storage and water conveyance assets over the last 25 years. Prior to the operation of the Northern and Southern Pipelines for water conveyance, we will obtain additional permits regulating the use of those pipelines and related facilities. Because of the discretionary nature of these approvals, our ability to secure these approvals and receive income from our water assets could be delayed, reduced or eliminated based on regulatory processes. See also more information in “Risk Factors”. Our agricultural operations are also generally subject to regulation by local agencies, such as county governments, as well as state environmental and water statutes. We are in compliance with all material applicable regulations. Our water filtration products are manufactured to the specifications of our water provider customers in coordination with state and federal water quality and treatment regulatory approvals obtained by these providers in the ordinary course of permitting water treatment or groundwater well and pumping facilities. We are not directly impacted by these regulations. Access to Our Information Our annual, quarterly and current reports, proxy statements and other information are filed with the Securities and Exchange Commission (“SEC”) and are available free of charge on the internet through our website, http:// www.cadizinc.com , as soon as reasonably practical after electronic filing of such material with the SEC. Our website address provided in this Annual Report on Form 10-K is not intended to function as a hyperlink and the information on our website is not, nor should it be considered, part of this report or incorporated by reference into this report. Our SEC filings are also available to the public on the internet at the SEC’s website http://www.sec.gov . 12 Cadiz Inc.