Cadiz Inc. Enters Agreement for the Sale of Common Stock in Registered Direct Offering

Cadiz Inc. (NASDAQ: CDZI) recently disclosed in an 8-K filing with the Securities and Exchange Commission that on November 4, 2024, the company entered into a placement agent agreement with B. Riley Securities, Inc. This agreement is in connection with Cadiz’s offer and sale of 7,000,000 shares of its common stock, with a par value of $0.01 per share, in a registered direct offering to certain institutional investors.

The shares are set to be sold at a purchase price of $3.34 per share, resulting in an aggregate purchase price of $23.38 million. Following deductions for placement agent fees and transaction expenses, Cadiz expects to receive net proceeds of approximately $21.9 million from this offering. Notably, Heerema International Group Services SA, the Company’s largest equity shareholder, will maintain approximately 34% ownership of Cadiz’s common stock through its participation in this offering.

The purpose behind this offering is to further the development of Cadiz’s water supply and groundwater banking project. The company plans to allocate the proceeds towards acquiring equipment and materials needed for the construction of facilities related to its upcoming northern and/or southern pipeline projects, scheduled to commence in 2025. Additionally, the net proceeds may support wellfield infrastructure on Cadiz-owned land and subsidiaries, business development activities, capital expenditures, working capital, business expansion, acquisitions, and general corporate purposes.

The Placement Agent Agreement entails customary representations, warranties, and agreements by Cadiz, along with standard conditions to closing, indemnification obligations of both the Company and the Placement Agent, and termination provisions. Furthermore, the Company’s directors, officers, and Heerema have entered into ‘lock-up’ agreements with the Placement Agent, restricting the sale or transfer of securities for a 90-day period without prior consent.

Investors seeking further details regarding the Placement Agent Agreement are encouraged to refer to the full text of the agreement attached as Exhibit 10.1 to Cadiz’s Current Report on Form 8-K. It’s essential to note that the content of the agreement is incorporated for informational purposes only and should be viewed in conjunction with Cadiz’s periodic reports and filings with the SEC.

The Company initiated this offering under an effective registration statement on Form S-3 (File No. 333-281507) filed with the SEC on August 13, 2024, which was declared effective on August 22, 2024. The Prospectus Supplement under this registration statement was utilized for the offering.

In addition to the offering, Cadiz disclosed that the Prospectus Supplement filing included a legal opinion from Norton Rose Fulbright US LLP regarding the validity of the Shares’ issuance and sale. It is expected that an Amendment No. 4 to the Registration Rights Agreement with Heerema will be established to classify all Heerema-purchased shares in this offering under “Registerable Securities.”

Cadiz Inc.’s strategic moves in this offering and collaboration affirm its commitment to expanding projects and developments vital to its growth and future endeavors in the industry.

Please note that this article is based on the 8-K SEC Filing by Cadiz Inc. and is intended for informational purposes only. Investors and interested parties are advised to refer to the original filing and seek professional financial advice when making investment decisions.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Cadiz’s 8K filing here.

Cadiz Company Profile

Cadiz Inc, together with its subsidiaries, provides water solutions in the United States. The company operates through Land and Water Resources; and Water Filtration Technology segments. It offers water supply, water storage, water conveyance, and water filtration services. In addition, the company is involved in the cultivation of grain crops and alfalfa, as well as provides water filtration solutions for impaired or contaminated groundwater sources.