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Note 11 - Subsequent Events

9 Months Ended

Sep. 30, 2025

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE 11 – SUBSEQUENT EVENTS

On October 27, 2025 (the “Effective Date”), the Company entered into a definitive agreement (the “Lytton Agreement”) with Lytton Rancheria of California, a federally recognized Native American tribe (“Lytton”), pursuant to which Lytton will provide the first tranche of capital (the “Tribal Investment”) for construction of the Mojave Groundwater Bank. The agreement terms have been designed to reflect the operational support Lytton will deliver to advance the Mojave Groundwater Bank.

Under the Lytton Agreement, the Company at its election may draw, as an unsecured term loan, up to $51 million in one or more installments beginning on the Effective Date and ending April 30, 2027. The unsecured term loan bears interest at a fixed rate of 8% per annum, payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year. Interest may be paid in cash or, upon mutual agreement between the Company and Lytton, in shares of the Company’s common stock determined in accordance with the Lytton Agreement. The Tribal Investment matures on April 30, 2031 (“Initial Maturity Date”) which may be extended to April 30, 2036 if any principal amount remains outstanding as of the Initial Maturity Date.

In connection with the Lytton Agreement, the Company agreed to issue shares of its common stock to Lytton as follows:

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upon execution of the Lytton Agreement, a commitment fee of 600,000 shares;

Cadiz Inc.

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on each funding date, a funding fee of 25,000 shares per $1 million of principal amount funded; and

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in the event the Tribal Investment is extended beyond the Initial Maturity Date, an extension fee of 800,000 shares.

At any time following the funding of the full $51 million Tribal Investment amount under the Lytton Agreement, at Lytton’s election, any outstanding principal and accrued interest of the Tribal Investment may be converted into a contractual right to receive a share of future cash flows from the Company’s water-storage rights (the “Storage Cash Flows Right”), which will entitle Lytton to receive 51% of the cash flows generated from the Company’s water-storage operations, provided that Lytton contributes the Storage Cash Flows Right to Mojave Water Infrastructure Company, LLC (“MWI”), the Company’s special purpose entity formed to construct, own and operate the Mojave Groundwater Bank, in exchange for an ownership interest in MWI alongside other expected equity investors in MWI on the same economic terms.

Under the Lytton Agreement, the proceeds from the Tribal Investment will be used by the Company to fund the construction, development, ownership, operation, and other ongoing costs of the Mojave Groundwater Bank, and to reimburse the Company’s expenses related thereto.

The Lytton Agreement includes customary representations, warranties, covenants, conditions precedent, and events of default, including non-payment, failure to issue required shares, covenant breaches, material misrepresentations, certain cross-defaults, judgments, material adverse events, failure to maintain required governmental approvals for the Project, and insolvency events. Upon an event of default, Lytton may accelerate the Tribal Investment, cease further funding, and exercise available remedies.

Cadiz Inc.