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Overview of Cadiz Inc.
Cadiz Inc. (NASDAQ: CDZI) is a California water solutions company that specializes in the development and management of renewable water resources. With a core focus on groundwater banking, sustainable water management, and water supply and storage, the company acquires vast land holdings endowed with significant water resources, turning these assets into integrated solutions for water conservation, agricultural development, and environmental management. Operating through a dual-segment approach involving Land and Water Resources and its subsidiary ATEC Water Systems, Cadiz is positioned to address critical challenges in water access, particularly in arid regions of Southern California.
Business Model and Operational Strategy
At its heart, Cadiz Inc. leverages its large portfolio of land to develop a series of interrelated water management projects. The company’s primary project, the Cadiz Valley Water Conservation, Recovery and Storage Project, aims to capture billions of gallons of groundwater that would otherwise be lost to evaporation. By actively managing its groundwater aquifer system, Cadiz seeks to create an efficient and reliable water storage mechanism that serves multiple community needs, from residential consumption to industrial use.
Cadiz generates revenue and enhances its market position through a diversified approach:
- Water Supply and Storage: The company develops extensive groundwater banking systems that capture and conserve precious water resources, making them available to water agencies and public partners.
- Pipeline Infrastructure: With an expansive network of pipelines, including a recently developed Northern Pipeline that spans over 220 miles, Cadiz is uniquely positioned to deliver water to communities across Southern California.
- Water Treatment and Filtration: Through its subsidiary ATEC Water Systems, Cadiz offers state-of-the-art water treatment solutions designed to remove common contaminants such as iron, manganese, arsenic, and other constituents, ensuring clean and reliable water quality for a wide range of consumers.
- Land Conservation and Organic Agriculture: The company’s properties in the eastern Mojave Desert not only support water projects but also provide a conducive environment for organic farming and land conservation initiatives.
Innovative Water Management Solutions
Cadiz’s integrated approach to water resource development is anchored in the concept of maximizing available water supplies while mitigating the environmental impacts of traditional water use. The Cadiz Valley Project exemplifies this by utilizing a series of sophisticated engineering techniques to capture groundwater before it evaporates. This not only ensures that water is conserved but also helps in recharging local aquifers, thereby supporting long-term sustainability in water-scarce regions.
The company’s water treatment arm, run through its subsidiary ATEC Water Systems, leverages breakthrough filtration technologies that are both scalable and cost-effective. With systems customized for different capacities—from urban municipalities to rural communities—ATEC’s solutions have been deployed at hundreds of locations, addressing issues ranging from discolored water to significant public health concerns tied to water contaminants.
Strategic Partnerships and Market Position
Another significant pillar of Cadiz's business is its network of strategic partnerships with public sector entities, local water agencies, and private investors. These collaborations are designed to enhance the capacities of local water systems and reduce dependency on traditional water sources, such as those from the State Water Project or imported supplies. Key collaborations include agreements with cities and water districts in the Mojave Desert and Inland Empire, where Cadiz’s reliably conserved water is integral to meeting regulatory and consumer demand.
The company’s commitment to secure water supply is further evidenced by its repeated engagement in infrastructure projects with long-term contractual frameworks. These contracts allow water agencies to secure a stable water source at cost-effective terms, which in turn supports robust financing of large-scale pipeline and storage projects.
Technology, Infrastructure, and Environmental Stewardship
Cadiz’s dual focus on technology and infrastructure innovation establishes it as a key player in the evolving water solutions sector. On the technology side, the company has invested in advanced water treatment filtration technologies that are recognized for their efficiency and scalability. The in-line treatment systems developed by ATEC utilize proprietary filter media processes to remove contaminants by adsorption, making them suitable for varied applications ranging from small community water systems to expansive industrial uses.
In parallel, the firm’s commitment to environmental stewardship is reflected in its investments in land conservation. By preserving over 45,000 acres of land in biologically diverse regions of California, Cadiz not only safeguards water resources but also supports organic agriculture and wildlife conservation. Its initiatives in managing the largest desert tortoise land conservation bank in the state further highlight its integrated approach to environmental management.
Comprehensive Infrastructure Development
Infrastructure is at the core of Cadiz’s operational strategy. The company owns and manages a significant pipeline network that spans hundreds of miles, connecting its groundwater banks to communities in need of reliable water supply. This network is crucial for the delivery of conserved water and serves as a backbone for the company’s broader agenda of water security in Southern California. In addition to its pipelines, Cadiz is actively involved in repurposing legacy infrastructure assets, such as the acquisition of steel pipe assets from the terminated Keystone XL Pipeline Project, repurposing them for water transportation needs. This innovative reuse of existing infrastructure not only accelerates project timelines but also serves as a model for sustainable infrastructure management.
Cadiz Inc. (NASDAQ: CDZI), a California water solutions company, has announced a $20 million registered direct offering of 5,715,000 common stock shares at $3.50 per share. The offering is expected to close with institutional investors around March 10, 2025.
The net proceeds will fund the development of the Mojave Groundwater Bank project, including equipment and materials for northern/southern pipeline construction starting in 2025. Funds will also support wellfield infrastructure, business development, capital expenditures, and general corporate purposes.
The company expects reimbursement of project-related expenses through Mojave Groundwater Storage Company, (MGSC), a new entity established for the project's construction, ownership, and operation. Roth Capital Partners, serves as the exclusive placement agent for this offering.
Cadiz Inc. (NASDAQ: CDZI) has signed a Letter of Agreement (LOA) with a lead investor for an investment of up to $175 million in the Mojave Groundwater Storage Company, (MGSC), a new entity for the Mojave Groundwater Bank project. The lead investor, a publicly traded water infrastructure-focused company, joins previously announced tribal investors, with total expected equity capital reaching $401 million.
Under the agreement, Cadiz will transfer significant assets to MGSC, including the Northern Pipeline, Southern Pipeline right of way, and 51% of water storage rights. In return, MGSC will pay Cadiz $51 million and provide up to $350 million for development and construction. Cadiz retains 49% of water storage rights and all water supply purchase contracts.
Through East Mojave Water Company, (EMWC), MGSC investors will receive priority distributions with a 7.5% annual yield. The agreement remains non-binding until definitive agreements are executed and shareholder approval is obtained.
Cadiz Inc. (NASDAQ: CDZI) has partnered with Stantec Inc. (NYSE: STN) to oversee the development and construction of the $800M Mojave Groundwater Bank project, set to be the Southwest's largest new water infrastructure project. The project will provide:
- 2.5 million acre-feet of new water supply
- 1 million acre-feet of underground storage capacity
- 350+ miles of pipeline network between Colorado River and California Aqueducts
Located at a 2,000 square mile watershed system base, the aquifer system currently holds 30-50 million acre-feet of groundwater. At the end of 2024, Cadiz announced a historic partnership with Native American Tribes to construct, own, and operate the project, marking the first large-scale water infrastructure project off tribal lands in U.S. history.
Cadiz Inc. (NASDAQ: CDZI), a California water solutions company, has scheduled a quarterly Corporate Update Call for investors on January 22, 2025, at 11:00am ET. Chairman and CEO Susan Kennedy will present the company's 2024 milestone achievements and outline 2025 objectives.
Investors and analysts can submit questions in advance until 5:00pm ET on January 21, 2025, via CDZI@mzgroup.us. The call will be accessible through both domestic (1-877-407-0779) and international (1-201-389-0914) dial-in numbers, with a webcast option available on the company's investor relations website.
Founded in 1983, Cadiz operates with 45,000 acres of California land, 2.5 million acre-feet of water supply, 220 miles of pipeline assets, and specialized water treatment filtration technology, focusing on providing clean, reliable, and affordable water solutions to address climate change impacts.
Cadiz Inc. (NASDAQ: CDZI) has announced a quarterly dividend declaration for Q4 2024 on its 8.875% Series A Cumulative Perpetual Preferred Stock. Shareholders will receive $560.00 per whole share, while holders of depositary shares (CDZIP) will receive $0.56 per depositary share. The dividend will be paid on January 15, 2025, to holders of record as of January 3, 2025.
The company, founded in 1983, is a California water solutions provider with 45,000 acres of land, 2.5 million acre-feet of water supply, and 220 miles of pipeline assets, focusing on clean water access solutions to address climate change impacts.
Cadiz (NASDAQ: CDZI), a California water solutions company, has announced its participation in the iAccess Alpha Virtual Best Ideas Winter Conference 2024 on December 10-11, 2024. Chairman and CEO Susan Kennedy will present on December 10th at 2:30pm ET and conduct one-on-one investor meetings the following day.
The company, founded in 1983, specializes in water supply, storage, pipeline, and treatment solutions. Cadiz's assets include 45,000 acres of California land, 2.5 million acre-feet of water supply, and 220 miles of pipeline infrastructure. The company focuses on providing clean, reliable, and affordable water access while addressing climate change impacts through cost-effective water treatment filtration technology.
Cadiz Inc. (NASDAQ: CDZI) has signed a Letter of Intent with the Lytton Rancheria of California for a historic $50 million investment in the Mojave Groundwater Bank project. This marks the largest investment in water infrastructure off tribal-lands by Native American Tribes in U.S. history. The project, located in California's Mojave Desert, features a massive underground reservoir holding 30-40 million acre-feet of water, exceeding the combined capacity of Lake Mead and Lake Powell. The groundwater bank will include over 300 miles of pipelines and aims to provide clean water to underserved communities. Construction is expected to begin in 2025, with initial water delivery targeted for 2026.
Cadiz (NASDAQ: CDZI) has agreed to purchase 180 miles of steel pipe from the terminated Keystone XL Pipeline Project to expand its water delivery infrastructure. The pipe will be used to connect the company's Mojave Groundwater Bank to major water networks in the Southwestern U.S. This acquisition complements Cadiz's existing 220 miles of pipeline acquired from El Paso Natural Gas in 2021. The company plans to begin construction in 2025. Additionally, Cadiz has secured an LOI for up to $150 million from a non-profit investment fund, with potential total equity funding of $401 million towards the estimated $800 million project cost.
Cadiz Inc. (NASDAQ: CDZI) has announced a $23.38 million registered direct offering of 7,000,000 common stock shares at $3.34 per share. Heerema International Group Services SA, the company's largest shareholder, participated to maintain its 34% ownership. The offering is expected to close around November 5, 2024. The proceeds will fund the development of water supply and groundwater banking projects, including pipeline construction planned for 2025, wellfield infrastructure, business development, and general corporate purposes. B. Riley Securities is acting as the sole placement agent.
Cadiz (NASDAQ: CDZI) and RIC Energy have partnered to build California's largest green hydrogen facility at Cadiz Ranch in the Mojave Desert. The facility will produce 50,000 kilograms of hydrogen daily using 100% solar power on up to 3,000 acres. Cadiz will provide land and up to 500 acre-feet of water annually, while RIC Energy will implement state-of-the-art technologies complying with IRA's Section 45V regulations. The facility's strategic location near rail lines, pipelines, and interstate highways will facilitate distribution to Southern California markets for zero-emission vehicles and electric generation. The project is designated as a Tier 2 ARCHES project under California's Regional Clean Hydrogen Hub initiative.
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